Emily Rutherford v. Columbia Gas ( 2009 )

RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit Rule 206
File Name: 09a0270p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
_________________
X
-
EMILY RUTHERFORD,
-
Plaintiff-Appellant,
-
-
No. 08-3148
v.
,
>
-
Defendant-Appellee. -
COLUMBIA GAS,
-
N
Appeal from the United States District Court
for the Southern District of Ohio at Columbus.
No. 05-00053—Mark R. Abel, Magistrate Judge.
Argued: June 17, 2009
Decided and Filed: July 30, 2009
*
Before: CLAY and ROGERS, Circuit Judges; JORDAN, District Judge.
_________________
COUNSEL
ARGUED: Steven T. Greene, MORROW, GORDON & BYRD, LTD., Newark, Ohio,
for Appellant. John P. Lavelle, LAVELLE & ASSOCIATES, Athens, Ohio, for
Appellee. ON BRIEF: Steven T. Greene, Christopher M. Shook, MORROW,
GORDON & BYRD, Newark, Ohio, for Appellant. John P. Lavelle, LAVELLE &
ASSOCIATES, Athens, Ohio, Gregory D. Brunton, REMINGER & REMINGER CO.,
L.P.A., Columbus, Ohio, for Appellee.
ROGERS, J., delivered the opinion of the court, in which JORDAN, D. J., joined.
CLAY, J. (pp. 6-18), delivered a separate opinion concurring in part and dissenting in
part.
*
The Honorable R. Leon Jordan, Senior District Judge of the Eastern District of Tennessee, sitting
by designation.
1
No. 08-3148 Rutherford v. Columbia Gas Page 2
_________________
OPINION
_________________
ROGERS, Circuit Judge. Like cases should end in like judgments. Once this
court decides questions of law presented in a dispute, a nearly identical dispute ought to
yield a similar outcome. Emily Rutherford challenges the Columbia Gas Transmission
Corporation’s ability to maintain its pipeline easement by clearing certain trees from her
land, but her appeal comes to us soon after we affirmed the same magistrate’s rejection
of another landowner’s similar claims concerning a similar easement relating to the same
gas pipelines. The facts and legal arguments of the two appeals are nearly
indistinguishable, so our prior decision requires affirmance of the judgment below.
While the application of stare decisis to this case is straightforward, the
procedural posture creates problems of appellate jurisdiction. This suit commenced
when Rutherford (a citizen of Ohio) filed an Ohio court suit to keep Columbia from
cutting down seven trees that grew on Columbia’s easement on her land. She sought a
declaratory judgment protecting the trees, a declaratory judgment defining the easement,
damages, and costs. Columbia (incorporated in Delaware; principal place of business
in West Virginia) removed based on diversity jurisdiction and filed various
counterclaims. Columbia’s counterclaims included a request for a declaratory judgment
defining its easement, permitting it to remove the trees, and finding Rutherford liable for
various damages; a claim for injunctive relief; a claim for damages for breach of contract
and property rights; a claim for punitive damages; and a claim for attorney fees and
costs.
The magistrate made various findings of fact and conclusions of law that
explicitly rejected each of Rutherford’s claims. However, the magistrate did not address
Columbia’s then-still-pending counterclaims. Nevertheless, the magistrate directed the
clerk to enter judgment for Columbia based on the findings, and Rutherford filed a notice
of appeal from the judgment, even though it was not final because it did not resolve all
claims between the parties. See Fed. R. Civ. P. 54(b).
No. 08-3148 Rutherford v. Columbia Gas Page 3
After we directed the parties to supplement their inadequate jurisdictional
briefing and address this problem, the parties evidently asked the district court to amend
the judgment. The magistrate entered an order entitled “Nunc Pro Tunc Order Entry of
Judgment.” The order reiterates the previously entered judgment, without explanation
adds a declaratory judgment finding a right of way of 25 feet on each side of the
pipelines, and dismisses Columbia’s other counterclaims.
The magistrate did not seek leave under Fed. R. Civ. P. 60(a) to correct the
judgment while an appeal was docketed in this court, and it is hardly clear that an order
that adds new relief to a judgment could be a correction within the scope of Rule 60(a).
But resolution of that question is not necessary because at oral argument Columbia
explicitly stated that it was willing to relinquish all of its claims for relief in order to
ensure appellate jurisdiction. While we do not encourage this procedure, it is enough to
permit the exercise of appellate jurisdiction in this case. See Scarbrough v. Perez, 870
F.2d 1079, 1081-82 (6th Cir. 1989); G.G. Marck & Assocs., Inc. v. Peng, 309 F. App’x
928, 931-32 (6th Cir. 2009); but see Smoot v. Mazda Motors of Am., Inc., 469 F.3d 675,
676-78 (7th Cir. 2006) (both parties ordered to show cause why their counsel should not
be sanctioned for deficient jurisdictional statements). All of Columbia’s counterclaims,
including its request for declaratory relief, are therefore considered dismissed with
prejudice. We thus have jurisdiction to review the magistrate’s rejection of Rutherford’s
claims for relief.
These claims are largely controlled by our recent decision in Andrews v.
Columbia Gas Transmission Corp., 544 F.3d 618 (6th Cir. 2008). There we upheld the
rejection of similar claims against Columbia for removing trees from its easement across
Andrews’s land. See id. at 621-22. Like Rutherford, Andrews had requested declaratory
and injunctive relief to protect trees on the easement. Id. at 622. As in Rutherford’s
case, the magistrate rejected Andrews’s Ohio law claims of laches, estoppel, and waiver.
Id. at 622-23. And as he did in Rutherford’s case, the magistrate found that Columbia’s
planned tree removal was consistent with the terms of the easement. Id. Rutherford
offers little to distinguish her case from the judgment affirmed in Andrews.
No. 08-3148 Rutherford v. Columbia Gas Page 4
In her reply brief, Rutherford argues that the court should distinguish Andrews
because Rutherford’s trees likely had been planted in the mid-1950s, around the time
Columbia’s predecessor obtained the last of the easements at issue. The Andrews trees
did not exist at the time of the creation of the easements at issue in that case. Id. at 625.
Rutherford argues that the fact that the gas company allowed small trees to remain on
the property when it installed the second gas line shows that the parties contemplated
allowing large trees to grow on the easement. But in construing an express easement
with unclear dimensions, the court considers not only “circumstances surrounding” the
creation of the easement, but also “what is reasonably necessary and convenient to serve
the purposes for which the easement was granted.” See id. at 624 and cases cited therein.
Thus even if the circumstances surrounding the creation of the easements are marginally
different in the two cases, Rutherford has no developed argument as to how the
magistrate’s finding that a cleared right of way is reasonably necessary is distinguishable
from the similar finding upheld in Andrews. See id. at 626-30.
Because in Andrews we upheld an indistinguishable factual finding that a cleared
right of way is reasonably necessary to serve the purpose of the easement, we must
uphold that magistrate’s finding in this case that Columbia may clear trees from
Rutherford’s easement. And clearing even a 15-foot right of way on each side of the
pipelines would require the removal of the seven trees at issue here. Thus, Rutherford
is not entitled to relief on any of her claims.
Rutherford also contests the magistrate’s holding that various equitable doctrines
do not apply to express easements as a matter of Ohio law. But when pressed on this
point at oral argument, her counsel conceded that Andrews’s identical holding controls,
and counsel merely invited us to “reconsider” Andrews. A published prior panel
decision “remains controlling authority unless an inconsistent decision of the United
States Supreme Court requires modification of the decision or this Court sitting en banc
overrules the prior decision.” Salmi v. Sec’y of Health & Human Servs., 774 F.2d 685,
689 (6th Cir. 1985). Without taking a case en banc, a “panel cannot” reconsider a prior
published case that interpreted state law, “absent an indication by the [state] courts that
No. 08-3148 Rutherford v. Columbia Gas Page 5
they would have decided [the prior case] differently.” Blaine Constr. Corp. v. Ins. Co.
of N. Am., 171 F.3d 343, 350 (6th Cir. 1999). Or, as we recently stated in a diversity
case, “[w]e are bound by [a prior published case that interpreted Ohio law] unless Ohio
law has measurably changed in the meantime.” Big Lots Stores, Inc. v. Luv N’ Care,
Ltd., 302 F. App’x 423, 427 (6th Cir. 2008). The Tenth Circuit has explained:
Where no controlling state decision exists, the federal court must attempt
to predict what the state’s highest court would do. In performing this
ventriloquial function, however, the federal court is bound by ordinary
principles of stare decisis. Thus, when a panel of this Court has rendered
a decision interpreting state law, that interpretation is binding on district
courts in this circuit, and on subsequent panels of this Court, unless an
intervening decision of the state’s highest court has resolved the issue.
Wankier v. Crown Equip. Corp., 353 F.3d 862, 866 (10th Cir. 2003). As no Ohio court
has suggested that Andrews misapplied Ohio law or reached a contrary holding,
Andrews’s holding that laches, estoppel, and waiver do not apply to expressly granted
easements controls this case. See Andrews, 544 F.3d at 630-31.
That conclusion is sufficient to resolve this case. Moreover, we decline to
exercise our discretion to certify questions of state law to the Ohio Supreme Court.
First, no party has requested certification at any stage of this litigation. Second,
certification is not warranted because it would arguably be inconsistent with the Andrews
court’s determination not to seek such a certification sua sponte. Third, available
evidence does not suggest that the Ohio Supreme Court is likely to disagree with
Andrews’s interpretation of Ohio law.
At the parties’ request, we consider the district court’s purported nunc pro tunc
order as a confirmation that Columbia has agreed to the dismissal of its counterclaims.
Because the order appealed from properly denied Rutherford relief on her claims, we
affirm.
No. 08-3148 Rutherford v. Columbia Gas Page 6
___________________________________________________
CONCURRING IN PART AND DISSENTING IN PART
___________________________________________________
CLAY, Circuit Judge, concurring in part and dissenting in part. Although I agree
with much of the majority’s reasoning, I disagree with the notion that, at least with
respect to Rutherford’s claims regarding the equitable doctrines of waiver, laches, and
estoppel, stare decisis requires us to blindly defer to our decision in Andrews v.
Columbia Gas Transmission Corp., 544 F.3d 618 (6th Cir. 2008). Because Andrews, in
determining Ohio law with respect to the application of these equitable doctrines, relied
on an intermediate state appellate court decision to the exclusion of significant evidence
that the Supreme Court of Ohio would reach a different conclusion, our obligation to
properly determine Ohio state law conflicts with our obligation to respect and follow
Andrews. Under these unique circumstances, the balance of interests strongly suggests
that we should certify a question to the Supreme Court of Ohio seeking its input on the
proper scope of these doctrines under Ohio law. Therefore, I respectfully dissent as to
the resolution of Rutherford’s equitable claims.
I.
Our decision in Andrews, like the magistrate judge’s decision in this case, relied
almost exclusively on the Ohio Court of Appeals’ decision in Lone Star Steakhouse &
Saloon of Ohio, Inc. v. Ryska, No. 2003-L-192, 2005 Ohio App. LEXIS 3146, at *17
(Ohio Ct. App. June 30, 2005), to conclude that, unlike an easement obtained by
prescription, an easement created by an express grant is not subject to the equitable
doctrines of waiver, laches, and estoppel. There is no doubt that the Ohio Court of
Appeals held in Lone Star that “equity does not acknowledge the extinguishment of such
an [expressly granted] easement by recourse to estoppel or laches.” Id. at *19.
However, where a state’s highest court has not conclusively ruled on an issue, the
decisions of intermediate state courts, although entitled to “‘some weight,’” are “‘not
controlling.’” Comm’r of Internal Revenue v. Estate of Bosch, 387 U.S. 456, 465 (1967)
(quoting King v. Order of Travelers, 333 U.S. 153, 160-61 (1948)). Instead, federal
No. 08-3148 Rutherford v. Columbia Gas Page 7
courts sitting in diversity are obliged to “predict” how the state’s highest court would
rule “by looking to ‘all available data.’” Prestige Cas. Co. v. Mich. Mut. Ins. Co., 99
F.3d 1340, 1348 (6th Cir. 1996) (quoting Kingsley Assoc. v. Moll Plasti Crafters, Inc.,
65 F.3d 498, 507 (6th Cir. 1995)). Accordingly, while the holding of Lone Star provides
presumptively persuasive “datum for ascertaining state law,” we may disregard that
holding if we are “convinced by other persuasive data that the highest court of the state
would decide otherwise.” West v. Am. Tel. & Tel. Co., 311 U.S. 223, 227 (1940).
A review of Ohio law reveals very persuasive “data” that the Supreme Court of
Ohio would not accept the rule of Lone Star. The Supreme Court of Ohio has applied
these equitable doctrines in the context of other written contracts, see, e.g., Pedler v.
Aetna Life Ins. Co., 490 N.E.2d 605, 607 (Ohio 1986)1 (applying the “principles of
equitable estoppel” to written insurance contract, and holding that “an insurer is
estopped from denying the full value of coverage stated on the insurance certificate,
based upon limitations or exclusions contained in the master policy, where the insured
bargained and paid for such coverage, unless the insured knew or should have known
of his ineligibility”), and has interpreted right-of-way agreements according to principles
of contract law, see Alexander v. Buckeye Pipe Line Co., 374 N.E.2d 146, 150 (Ohio
1978). Moreover, in considering claims regarding the alleged interference with a right
of way created by an express agreement between adjacent landowners, the Supreme
Court of Ohio has expressly rejected the notion that “a plaintiff’s remedy should be at
law and not equity,” recognizing that equitable remedies may provide “the proper mode
of enforcing the agreement.” Goldberger v. Bexley Properties, 448 N.E.2d 1380, 1383
(Ohio 1983). Although not speaking to the applicability of the doctrine of laches and
estoppel specifically, Goldberger recognized that other equitable doctrines, such as
1
In Pedler, the Supreme Court of Ohio ultimately found that the claimant could be denied
coverage based on information contained in the “plan summary” and “other material outlining his
ineligibility,” holding that “[t]he failure of the appellee to specifically note the limitation on the face of the
certificate is not sufficient, standing alone, to estop the denial of coverage where the insured had the means
of acquiring knowledge of the limitation.” 490 N.E.2d at 608. In reaching that conclusion, however, the
Supreme Court of Ohio subjected a written insurance contract to an equitable estoppel inquiry. The fact
that the court ultimately determined that the claimant could not prevail on that claim should not distract
us from the critical fact that the court recognized that the doctrine of equitable estoppel applies with equal
force to written contracts.
No. 08-3148 Rutherford v. Columbia Gas Page 8
unclean hands and adverse possession, apply with equal force in the context of express
easements. Id. Our decision in Andrews did not consider any of these decisions in
determining that the Supreme Court of Ohio would accept the rule announced in Lone
Star.
Furthermore, the rule announced in Lone Star seems to be predicated on a
fundamental misreading of Zimmerman v. Cindle, 548 N.E.2d 1315 (Ohio Ct. App.
1988). Although the syllabus to Zimmerman states that “an easement obtained by
prescription” is subject to the doctrine of laches and estoppel, nothing in the Zimmerman
opinion suggests that this is the only context in which those doctrines apply. If anything,
Zimmerman seems to imply that these equitable doctrines apply to all easements. Id. at
1317 (discussing equitable doctrine of estoppel in the context of “an easement,” and
apparently referring to the original easement at issue in the case which was “an express
easement created by an instrument . . . and duly recorded”). Lone Star’s narrow reading
of Zimmerman also is belied by the fact that subsequent decisions by other Ohio Courts
of Appeals have held that express easements are subject to the doctrine of abandonment.
See, e.g., 1st Nat’l Bank v. Mt. Agency, LLC, 2009 Ohio App. LEXIS 1958, at *13 (Ohio
Ct. App. May 11, 2009).
To the extent that there is a conflict between Zimmerman and Lone Star, we
would be obliged to apply the earlier rule of Zimmerman. See Sowards v. Loudon
County, Tenn., 203 F.3d 426, 431 n.1 (6th Cir. 2000). That is especially true here given
that Lone Star purports to apply the rule set forth in Zimmerman, and also characterizes
Zimmerman as “the leading authority in Ohio on the extinguishment of easements via
the doctrines of estoppel and laches.” See Lone Star, 2005 Ohio App. LEXIS 3146, at
*18-19.
In addition, although the law of other states does not dictate the result here, it is
relevant to our inquiry. See, e.g., Herman Miller, Inc. v. Palazzetti Imps. & Exps., Inc.,
270 F.3d 298, 326 (6th Cir. 2001) (“In reaching our decision [regarding Michigan law],
we are also influenced by the number of states that have recognized a post-mortem right
of publicity.”). To that limited extent, then, it is important to note that other states have
No. 08-3148 Rutherford v. Columbia Gas Page 9
recognized that express easements are subject to these equitable doctrines. See, e.g.,
Jewett v. Leisinger, 655 So. 2d 1210, 1212 (Fla. Dist. Ct. App. 1995); Crew’s Die
Casting Corp. v. Davidow, 120 N.W.2d 238, 240 (Mich. 1963); see also Twp. of
Piscataway v. Duke Energy, 488 F.3d 203, 214 (3d Cir. 2007) (applying New Jersey
law). At a minimum, these decisions demonstrate that there is nothing inherently unique
about an expressly granted easement such that the rights created therein necessarily
preclude considerations of equity. Nor would such a limitation make sense given that
the Supreme Court has applied the doctrine of laches to land claims between the states
where a state’s “title and rightful authority” to disputed territory is at issue. See Ohio
v. Kentucky, 410 U.S. 641, 651 (1973) (“‘The rule, long-settled and never doubted by
this court, is that long acquiescence by one state in the possession of territory by another
and in the exercise of sovereignty and dominion over it is conclusive of the latter’s title
and rightful authority.’” (quoting Michigan v. Wisconsin, 270 U.S. 295, 308 (1926)));
Massachusetts v. New York, 271 U.S. 65, 95 (1926) (“Long acquiescence in the
possession of territory and the exercise of dominion and sovereignty over it may have
a controlling effect in the determination of a disputed boundary.”).
Despite this significant evidence that the holding of Lone Star is not an accurate
statement of Ohio law, our decision in Andrews relied almost exclusively on Lone Star
in determining that Ohio law precludes the application of these equitable doctrines in the
context of express easements. Because of this likely error, I disagree with the majority’s
conclusion that we have no choice but to resolve Rutherford’s claims by reference to the
rule set forth in Andrews. The approach endorsed by the majority glosses over the
shortcomings of our inquiry in Andrews, and in fact compounds the error by lending
credence to such an approach.
II.
According to the majority, we are “bound” to follow Andrews because no
intervening Ohio state court decision “has suggested that Andrews misapplied Ohio law
or reached a contrary holding.” Maj. Op. at 4-5 (citing Blaine Constr. Corp. v. Ins. Co.
of N. Am., 171 F.3d 343, 350 (6th Cir. 1999), and Big Lots Stores, Inc. v. Luv N’ Care,
No. 08-3148 Rutherford v. Columbia Gas Page 10
Ltd., 302 F. App’x 423, 427 (6th Cir. 2008)). Underlying the majority’s position is the
notion that stare decisis imposes on us an important obligation to respect and abide by
the decisions handed down by prior panels of this Court. See Darrah v. City of Oak
Park, 255 F.3d 301, 309-10 (6th Cir. 2001). A number of circuits have reached a similar
conclusion, reasoning that stare decisis “applies with equal force to cases in which state
law supplies the substantive rule of decision,” Broussard v. S. Pac. Transp. Co., 665
F.2d 1387, 1389 (5th Cir. 1982) (en banc), and thus holding that a prior panel decision
“should be followed by other panels without regard to any alleged existing confusion in
state law, absent a subsequent state court decision or statutory amendment which makes
this Court’s (prior) decision clearly wrong,” Lee v. Frozen Food Express, Inc., 592 F.2d
271, 272 (5th Cir. 1979) (per curiam); accord Woodling v. Garrett Corp., 813 F.2d 543,
557 (2d Cir. 1987) (“A ruling of one panel of this Circuit on an issue of state law
normally will not be reconsidered by another panel absent a subsequent decision of a
state court or of this Circuit tending to cast doubt on that ruling.”).
What the majority fails to recognize, however, is that certifying a question to a
state court does not implicate, much less contradict, our obligations under stare decisis.
When we certify a question to a state court, we are not modifying, overturning, or
otherwise refusing to follow prior precedent. Rather, we are seeking guidance from a
court to which we are bound to defer on issues of state law. Certifying a question
regarding Ohio law to Ohio’s highest court thus does not run counter to or even
implicate whatever obligations we have to follow Andrews, it merely reflects sound
judicial management.
Confronted with a wrongly decided prior panel decision, our only option
normally would be to follow that decision and encourage the en banc Sixth Circuit or
Supreme Court to reconsider the issue. In a diversity case such as this, however, we
have the additional option of certifying a question to the state’s highest court, at least
where that court’s rules make the certification procedure available. If the rules of the
Supreme Court of Ohio did not make the certification procedure available, then I would
agree that we would be bound by Andrews. But because the certification option is
No. 08-3148 Rutherford v. Columbia Gas Page 11
available here, and in light of the interests at stake, I believe that we are compelled to
exercise our discretion and provide the Supreme Court of Ohio an opportunity to address
this issue.
A.
The doctrine of stare decisis et non quieta movere—meaning “to stand by things
decided, and not to disturb settled points,” Black’s Law Dictionary 1414 (7th ed.
1999)—reflects the principle that, for the sake of consistency and order, courts should
follow prior decisions regarding the same points of law. But stare decisis “is not an
‘inexorable command.’” Planned Parenthood v. Casey, 505 U.S. 833, 854 (1992)
(quoting Burnet v. Coronado Oil & Gas Co., 285 U.S. 393, 405 (1932) (Brandeis, J.,
dissenting)). Rather, determining whether to follow past precedent requires an exercise
of “judgment” that “is customarily informed by a series of prudential and pragmatic
considerations designed to test the consistency of overruling a prior decision with the
ideal of the rule of law, and to gauge the respective costs of reaffirming and overruling
a prior case.” Id. In most cases, stare decisis “is usually the wise policy, because in
most matters it is more important that the applicable rule of law be settled than that it be
settled right.” Burnet, 285 U.S. at 406 (Brandeis, J., dissenting). In certain
circumstances, however, the balance of interests is shifted, and our responsibility to
make sure that an issue is “settled right” is more important than the benefits of letting
the issue remain merely “settled.” In such cases, the considerations that usually support
our following prior precedent must give way to other competing interests. This is one
of those circumstances.
Where, such as here, our jurisdiction is predicated on the diversity of parties, we
are obliged to apply state law in resolving the substantive issues presented. See Erie
R.R. v. Tompkins, 304 U.S. 64, 78 (1938). In fulfilling that obligation, we are required
to determine what in fact is the applicable state law. Our duty to properly determine
state law is a serious responsibility that implicates principles at least as significant as
those underlying stare decisis. In fact, unlike the “pragmatic considerations” underlying
stare decisis, see Casey, 505 U.S. at 854, Erie imposes on federal courts a “duty” and
No. 08-3148 Rutherford v. Columbia Gas Page 12
“great[] responsibility” to properly determine state law, see Meredith v. Winter Haven,
320 U.S. 228, 234 (1943). In all cases arising under our diversity jurisdiction, Erie
requires that we “adjudicate the rights of the parties with the aid of such light as was
afforded by the materials for decision at hand, and in accordance with the applicable
principles for determining state law.” Id. at 238. This is an obligation from which we
may not shrink. As the Supreme Court has emphasized, “diversity jurisdiction was not
conferred for the benefit of the federal courts or to serve their convenience,” but rather
was adopted by Congress “to afford to suitors an opportunity in such cases, at their
option, to assert their rights in the federal rather than in the state courts.” Id. at 234.
In certain cases, our “duty” to properly determine and apply state law comes into
conflict with the interests that normally would support our deferring to prior precedent.
In such cases, some courts have recognized that the obligation to properly determine
state law is more important than the general dictate to defer to prior federal precedent
construing state law. See United States v. Maness, 23 F.3d 1006, 1008-09 (6th Cir.
1994) (refusing to follow Fourth Circuit’s interpretation of North Carolina state law
because “the Fourth Circuit did not follow a contrary prior state supreme court decision”
even though “we would usually defer to the Fourth Circuit’s prediction of an issue of
first impression regarding North Carolina state law”); Factors Etc., Inc. v. Pro Arts, Inc.,
652 F.2d 278, 283 (2d Cir. 1981) (emphasizing that prior federal determinations of state
law should be followed “for the benefit of both the orderly development of state law and
fairness to those subject to state law requirements,” but acknowledging that prior federal
interpretations may be disregarded where “prior state court decisions had been
inadvertently overlooked by the pertinent court of appeals”).
B.
Confronted with these competing considerations, the majority resolves the issue
by suggesting that stare decisis operates in this case not as a merely prudential and
pragmatic consideration, but as a binding rule. In other words, according to the majority,
it is not just that we would “usually defer” to Andrews, as was the case in Maness, but
that we are required to do so.
No. 08-3148 Rutherford v. Columbia Gas Page 13
The majority’s position does have some appeal, at least superficially, in that our
case law dictates that prior reported panel decisions are binding on all subsequent panels
“unless an inconsistent decision of the United States Supreme Court requires
modification of the decision or this Court sitting en banc overrules the prior decision.”
Salmi v. Sec’y of Health & Human Servs., 774 F.2d 685, 689 (6th Cir. 1985). Even this
Court’s rules provide that “[r]eported panel opinions are binding on subsequent panels.
Thus, no subsequent panel overrules a published opinion of a previous panel.” 6 Cir. R.
206(c).
But this “binding” rule is not implicated by our certifying a question of Ohio
state law to the Supreme Court of Ohio because that procedure does not “overrule”
Andrews. While there may be sound and persuasive practical reasons not to exercise the
certification option in certain cases—none of which are present here—we certainly are
not precluded from doing so by Rule 206(c) or our decisions in Salmi, Blaine
Construction, or Big Lots. Indeed, none of these decisions even considers whether the
unique dynamics of cases arising under our diversity jurisdiction remove the certification
protocol from the constraints of Rule 206(c).
Significantly, the “binding” rule of Salmi and Rule 206(c) includes important
elements that make it more constraining than the traditional doctrine of stare decisis.
Like stare decisis, the requirement that a subsequent panel must follow reported
decisions of prior panels implicates considerations of consistency and order. That much
is obvious. What perhaps is less obvious, however, is that this rule also includes the
separate notion that the authority to modify or reverse a ruling should reside only in the
hands of a superior body, and includes as a minor premise the unextraordinary
proposition that panels within the same circuit are co-equals. While I do not disagree
with either this rule or its underlying premises, the majority’s contention that this rule
applies unyieldingly in this case overlooks several critical factors that suggest that this
binding rule operates differently in diversity cases such as this.
Most importantly, it makes sense to transform the pragmatic doctrine of stare
decisis into a binding rule with respect to co-equal panels only because there are at least
No. 08-3148 Rutherford v. Columbia Gas Page 14
two higher authorities—the en banc court and the Supreme Court—from which a
dissatisfied party can seek reconsideration of a wrongly decided question. As our rules
suggest, it makes sense to construe reported panel decisions as “binding” on subsequent
panels only because en banc reconsideration always is available to correct panel
mistakes. See 6 Cir. R. 35(a) and 206(c). Whereas the rule precluding subsequent
panels from overturning prior reported panel decisions promotes consistency and
reliability, this availability of review functions as a safety valve that allows for the
vindication of the interests of accuracy and justice. See, e.g., Adkins v. Wolever, 520
F.3d 585, 587-88 (6th Cir. 2008) (following wrongly decided prior panel decision but
“encourag[ing] the other members of our Court . . . to revisit the issue en banc”), rev’d
en banc, 554 F.3d 650 (6th Cir. 2009). Without the potential for review by higher
courts, the dictates of justice and practicality would preclude us from construing the
deference we owe to prior panel decisions as strictly binding. See Burnet, 285 U.S. at
406-07 (Brandeis, J., dissenting) (recognizing that stare decisis is “usually the wise
policy” because consistency and reliance interests are significant, but explaining that the
Supreme Court has never hesitated to overrule prior decisions where “correction . . . is
practically impossible” (citations and footnotes omitted)).2
However, this obligation to defer to “higher” courts is complicated when we sit
in diversity. In diversity cases, we are obliged to apply state law and, therefore, are
required to defer to the decisions of state courts. See Erie, 304 U.S. at 78-80; Bovee v.
Coopers & Lybrand C.P.A., 272 F.3d 356, 361 (6th Cir. 2001). In fact, federal courts
oftentimes confront questions of state law on which the highest court of the state has not
spoken, and thus are called upon to “predict” what state law would be by looking to the
decisions of the state’s intermediate and lower courts. See Prestige, 99 F.3d at 1348; see
also King, 333 U.S. at 160-61 (holding that the decrees of “lower state courts” are not
“controlling” but must be “attributed some weight”). Consequently, in addition to the
“pragmatic considerations” underlying stare decisis, we are obliged in diversity cases
2
Justice Brandeis’ argument is limited to cases “involving the Federal Constitution” where
“legislative action is practically impossible” only because legislative correction of mistakes involving
matters of statutory interpretation is much more feasible than amending the Constitution, as would be
required to effect a non-judicial correction of a mistake involving a matter of constitutional interpretation.
No. 08-3148 Rutherford v. Columbia Gas Page 15
to take into account the “mutual respect” and “comity” we owe state courts in
determining and applying state law. See Burgess v. Seligman, 107 U.S. 20, 33-34
(1883).
These considerations add a dimension of complexity to our stare decisis
obligations because state courts are “co-ordinate” courts, neither superior nor inferior,
in our federalist system. See id. at 33 (“The Federal courts have an independent
jurisdiction in the administration of State laws, co-ordinate with, and not subordinate to,
that of the State courts[.]”). As the Supreme Court has explained, a federal court sitting
in diversity is, “in effect, only another court of the State.” Guaranty Trust Co. v. York,
326 U.S. 99, 108 (1945). This distinction is crucial. In cases involving questions of
federal law, the only courts with the authority to overturn or modify a panel decision are
superior federal courts. See Darrah, 255 F.3d at 309-10 (citing Salmi, 774 F.2d at 689,
and 6 Cir. R. 206(c)). In diversity cases, however, the decisions of “co-ordinate” state
courts can force us to reconsider a prior panel’s pronouncement of state law. See Blaine
Constr., 171 F.3d at 350 (recognizing that stare decisis does not apply where there is “an
indication by the [state] courts that they would have decided [the issue] differently”); Big
Lots, 302 F. App’x at 427 (recognizing that a panel of this Court is “bound” by prior
reported panel decisions “unless [state] law has measurably changed in the meantime”).
This unique dynamic casts serious doubt on the majority’s suggestion that the
certification procedure runs afoul of our obligation to follow Andrews.
In addition, diversity cases also include another unique feature: namely, the
potential for us to seek guidance (via the certification procedure) from the court to which
we must defer. With respect to questions of federal law, subsequent panels must follow
prior precedent, even if wrongly decided, and are limited to encouraging en banc
reconsideration. See, e.g., Adkins, 520 F.3d at 587-88. In diversity cases, however, the
certification procedure provides a unique opportunity for a subsequent panel to request
input from a court with the authority to reexamine and overturn otherwise-controlling
prior precedent. See Bush v. Gore, 531 U.S. 98, 139 (2000) (Ginsburg, J., dissenting)
(“Notwithstanding our authority to decide issues of state law underlying federal claims,
No. 08-3148 Rutherford v. Columbia Gas Page 16
we have used the certification devise to afford state high courts an opportunity to inform
us on matters of their own State’s law because such restraint ‘helps build a cooperative
judicial federalism.’” (quoting Lehman Bros. v. Schein, 416 U.S. 386, 391 (1974))).
Because the certification procedure allows us to appeal to a court to which we must defer
in this context, we are not disregarding our obligations under stare decisis because we
are not modifying, overturning, or otherwise refusing to follow prior precedent.3
Both of these unique features suggest that the traditional precepts that support
transforming stare decisis from a pragmatic doctrine into a binding rule in the context
of co-equal panels of the same circuit do not apply so easily in diversity cases. See
Burgess, 107 U.S. at 33 (recognizing that “[t]he existence of two co-ordinate
jurisdictions in the same territory is peculiar,” and emphasizing that “mutual respect and
deference” are necessary to avoid “anomalous and inconvenient” results). For example,
the Supreme Court has rejected the notion that inferior courts must defer to superior
courts with respect to the resolution of issues of “purely local law,” reasoning instead
that the decisions of district court judges and circuit panels must be accorded greater
deference in this context because they generally have greater experience interpreting a
given state’s laws. See MacGregor v. State Mut. Life Assurance Co., 315 U.S. 280, 281
(1942). The Court has justified this inversion of the traditional hierarchy of deference
by reasoning that, when the federal courts are called upon to apply state law, “they act
. . . as ‘outsiders’ lacking the common exposure to local law which comes from sitting
in the jurisdiction.” Lehman Bros., 416 U.S. at 391. This rationale is all the more
compelling where, as here, the state’s highest court has yet to address an issue directly
and thus the federal courts are called upon to “predict” what that court would do. See,
e.g., R.R. Comm’n v. Pullman Co., 312 U.S. 496, 499 (1941) (observing, in a critical
3
But see Lee, 592 F.2d at 272 (“Regardless of any ambiguity the plaintiffs may find in Louisiana
cases to justify such a certification, there is no ambiguity as to this Court’s view of Louisiana law because
the legal issue has been squarely resolved against plaintiffs’ precise arguments by two recent Fifth Circuit
decisions. Once a panel of this Court has settled on the state law to be applied in a diversity case, the
precedent should be followed by other panels without regard to any alleged existing confusion in state law,
absent a subsequent state court decision or statutory amendment which makes this Court’s decision clearly
wrong.” (citations omitted)). In Lee, however, the Fifth Circuit did not confront the same tension we face
here because that panel determined that “the analysis in our prior decisions appears to us to be correct.”
Id.
No. 08-3148 Rutherford v. Columbia Gas Page 17
self-assessment, that even the justices of the Supreme Court are “outsiders without
special competence in Texas law,” and thus “we would have little confidence in our
independent judgment regarding the application of that law to the present situation”).
As a result of this inversion of deference, it is impractical to expect correction
by a superior federal authority. See, e.g., MacGregor, 315 U.S. at 281. This imposes
on the lower federal courts a greater responsibility to make sure that questions of state
law are “settled right,” not that they are just “settled.” For that reason, even if our
certifying a question to the Supreme Court of Ohio could be construed as our refusing
to follow Andrews, such a deviation from our traditional stare decisis obligations is
justified by our “great responsibility” to apply state law properly.
III.
Because there is significant data to suggest that the Supreme Court of Ohio
would reject the rule of Lone Star, I believe that the proper course of action is to certify
a question to the Supreme Court of Ohio and allow that court to weigh in on this issue
directly. I recognize that we owe deference to, and generally would be bound by,
Andrews because it is a prior published decision that is almost directly on point. See
Darrah, 255 F.3d at 309; Blaine Constr., 171 F.3d 350. But because we are sitting in
diversity, we also have an obligation to determine state law accurately. While there may
not be enough “data” to justify overturning Andrews, there is more than enough basis to
justify certifying a question to the Supreme Court of Ohio to permit that court an
opportunity to resolve the issue.
The United States Supreme Court has recognized that, where state law makes the
certification procedure available, the decision to certify a question to a state court in a
given case “rests in the sound discretion of the federal court.” Lehman Bros., 416 U.S.
at 391. The rules of the Supreme Court of Ohio provide for certification of questions
from federal courts, see Ohio S. Ct. R. XVIII, and that court repeatedly has accepted
certified questions from federal courts in the past, e.g., Genaro v. Cent. Transp., 703
N.E.2d 782 (Ohio 1999). The question, then, is whether this is a proper case for
exercising our considerable discretion in this regard. I believe it is.
No. 08-3148 Rutherford v. Columbia Gas Page 18
Although “the mere difficulty in ascertaining local law is no excuse for remitting
the parties to a state tribunal,” comity, cooperative federalism, and practical
considerations regarding judicial economy are factors that legitimately may be
considered in determining whether to certify a question to a state supreme court.
Lehman Bros., 416 U.S. at 390-91. Those factors support utilizing the certification
procedure in this case. Although this Court concluded in Andrews that Lone Star
properly reflects the state of Ohio law on this issue, for the reasons explained above,
significant evidence suggests that that is not true. That reason alone is sufficient to
warrant certifying this question to the Supreme Court of Ohio. See Bush, 531 U.S. at
139 (Ginsburg, J., dissenting) (encouraging certification as a means “to afford state high
courts an opportunity to inform us on matters of their own State’s law”).
In rejecting this suggestion, the majority points to case law in this circuit
suggesting that we should defer to Andrews because state law has not “measurably
changed in the meantime.” See Maj Op. at 5 (quoting Big Lots, 302 F. App’x at 427).
But that is not the only context in which we may revisit prior published decisions
construing state law. As courts have recognized in similar contexts, it may be
appropriate to set aside prior published precedent not only where “the holding had been
superseded by a later pronouncement from state legislative or judicial sources,” but also
where “prior state court decisions had been inadvertently overlooked.” Factors Etc.,
652 F.2d at 283 (emphasis added).
IV.
Therefore, I respectfully dissent.