Beatrice Boyer, et al v. BNSF Railway Company
Filing
Filed opinion of the court by Judge Rovner. We remand with directions to impose sanctions on the plaintiffs lead counsel, Christopher D. Stombaugh, in the amount of $34,575.80. AFFIRMED IN PART, REVERSED IN PART, and REMANDED. William J. Bauer, Circuit Judge; Ilana Diamond Rovner, Circuit Judge and Ann Claire Williams, Circuit Judge. [6754879-1] [6754879] [14-3131, 14-3182]
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In the
United States Court of Appeals
For the Seventh Circuit
Nos. 14-3131 & 14-3182
BEATRICE BOYER, et al.,
Plaintiffs-Appellants,
Cross-Appellees,
v.
BNSF RAILWAY COMPANY, doing
business as BURLINGTON NORTHERN
AND SANTA FE RAILWAY COMPANY,
Defendant-Appellee
Cross-Appellant.
Appeals from the United States District Court for the
Western District of Wisconsin.
No. 3:14-CV-00260-bbc— Barbara B. Crabb, Judge.
ARGUED JANUARY 4, 2016 — DECIDED JUNE 1, 2016
Before BAUER, ROVNER, and WILLIAMS, Circuit Judges.
ROVNER, Circuit Judge. These consolidated appeals are
successive to our decision in Irish v. BNSF Ry. Co., 674 F.3d 710
(7th Cir. 2012). See 7th Cir. Internal Operating Proc. 6(b). After
we concluded that the plaintiffs-appellants in Irish had for-
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feited the argument they presented on appeal, the plaintiffs’
counsel assembled a (mostly) new group of plaintiffs and refiled the same litigation in Arkansas state court in order to
pursue that argument. The new suit was removed to federal
court and transferred to the Western District of Wisconsin,
where the district court dismissed the complaint for failure to
state a claim on which relief could be granted. The defendant
asked the court to sanction the plaintiffs’ counsel pursuant to
Federal Rule of Civil Procedure 11 and/or 28 U.S.C. § 1927 for
pursuing frivolous claims and engaging in abusive litigation
tactics, but the court denied that request, reasoning that
although the plaintiffs’ claims were all but foreclosed by our
decision in Irish, they were not frivolous. The parties have
cross-appealed. We affirm the dismissal of the complaint but
reverse the denial of sanctions. We believe the record makes
clear that the plaintiffs’ counsel unreasonably and vexatiously
multiplied the proceedings by filing suit in Arkansas, which
had absolutely no connection to this case. Pursuant to section
1927, the defendant is entitled to its fees and costs for removing
the case to federal court and successfully seeking its transfer to
the Western District of Wisconsin.
I.
Like Irish, this suit arises out of a July 2007 flood in Bagley,
Wisconsin. Bagley is a small town situated in a valley along the
eastern bank of the Mississippi River. Bluffs flank the river
valley, and those bluffs are transected by ravines that drain the
upper watershed into the river. A 500-year rain that occurred
on July 17 and 18, 2007, sent torrents of water down those
ravines, among them the Glass Hollow Drain. A Burlington
Northern and Santa Fe Railway Company (“BNSF”) bridge
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crosses over the Glass Hollow Drain near Bagley. Large
amounts of debris swept along by the rainwater clogged the
trestle undergirding the railway bridge, causing the water
runoff to back up and inundate Bagley. Most of the town’s 300
to 400 homes were flooded.
Kenneth Irish and three other Bagley residents filed a classaction suit against BNSF and two of its supervisory employees
in Wisconsin state court in 2008. The suit blamed the flood of
Bagley on faulty design and maintenance of the trestle by
BNSF and its predecessors and sought damages based on
theories of negligence and nuisance. BNSF removed the case to
federal court where, after some initial procedural skirmishes,
the district court dismissed the complaint as to BNSF pursuant
to Federal Rule of Civil Procedure 12(b)(6). In relevant part, the
court held that Wis. Stat. § 88.87 provides the exclusive remedy
when the negligent design and maintenance of a railroad grade
has caused an obstruction to a waterway or drainage course
and resulted in flooding. That statute authorizes a person
injured by such flooding to sue in inverse condemnation or for
other equitable relief, but not for money damages; moreover,
the statute requires the injured party to first file a claim with
the railroad company within three years of the flood.
§ 88.87(2)(c). Because the plaintiffs had never filed such a claim
with BNSF, their suit was barred; and, in any event, the statute
foreclosed their claims for money damages.
The Irish plaintiffs appealed, and we affirmed. We began by
noting that “[o]n its face, the statute would appear to bar the
very suit for damages that the plaintiffs are pursuing.” 674 F.3d
at 713. According to the plaintiffs, it was BNSF’s alleged
negligence in maintaining the trestle that caused debris to
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accumulate and block the natural drainage of water through
the Glass Hollow Drain, resulting in the Bagley flood. Wisconsin cases, including, Pruim v. Town of Ashford, 483 N.W.2d 242,
244-45 (Wis. Ct. App. 1992), and Kohlbeck v. Reliance Constr. Co.,
647 N.W.2d 277, 280 (Wis. Ct. App. 2002), indicated that the
Wisconsin legislature meant to limit the types of claims that
could be brought against governmental entities and, in this
case, railroads, whose negligent construction and/or maintenance of roadways and railroad grades resulted in flood
damage. Irish, 674 F.3d at 713-14. The district court’s holding
that the statute controlled the plaintiffs’ claims—and foreclosed
their request for damages—was consistent with these cases. Id.
at 714.
The plaintiffs contended on appeal that section 88.87 had a
narrower scope than the courts had attributed to it, one that
did not reach their claims for damages; but we found it too late
in the day for them to make that argument. The plaintiffs’
theory was that the statute was meant only to address construction defects that would give rise to a continuing nuisance—i.e., repeated flooding—rather than shortcomings in
maintenance; and the Bagley flood, they argued, was the result
of faulty maintenance of the BNSF trestle as opposed to its
design. We had some concern that the plaintiffs were making
a belated effort to recast their complaint (which was rife with
references to the allegedly faulty design and construction of
the trestle), but the dispositive point, in our view, was that they
had not developed this argument in the district court. The
plaintiffs’ central argument below had been that section 88.87
was a governmental immunity statute that applied to private
parties only when they were affiliated with government
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entities, which BNSF was not. 674 F.3d at 714-15. Only in a few
isolated sentences in their memorandum opposing the motion
to dismiss had the plaintiffs hinted at a distinction between
design and construction flaws on the one hand and maintenance defects on the other, and this was not enough to have
put the district court on notice of the argument they were
making on appeal. Id. at 715. The argument was therefore
forfeited, and as “this [was] not the rare civil case in which the
forfeiture might be overlooked,” there was no need to reach its
merits. Id. at 716. The dismissal of the plaintiffs’ complaint was
affirmed. Id.
Our opinion in Irish opened with this observation: “This is
a lawsuit in search of a viable theory of recovery.” Id. at 711.
And in discussing the forfeiture of the plaintiffs’ appellate
argument, we elaborated upon our opening remark:
The short history of this case reflects the ever-shifting nature of the plaintiffs’ arguments. When the
case was removed to federal court, the plaintiffs
dropped their class allegations and disavowed any
federal claims, in the hope that the case would be
returned to state court. In their amended complaint,
the plaintiffs cited section 88.87 as support for their
claims, contending that the defendants had violated
the obligations imposed by that statute. R. 58 ¶¶
33(c) and (d), 35, but when Burlington Northern
moved to dismiss the complaint on the ground that
the relief the plaintiffs were seeking was not authorized, the plaintiffs turned around and contended
that the statute did not apply to their claims. See
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2010 WL 4293578, at *4 (“Plaintiffs’ position is
somewhat surprising in light of the fact that they
allege in their amended complaint that defendants
violated Wis. Stat. § 88.87.”). When the district court,
after dismissing the corporate defendant[ ] from the
case, solicited supplemental briefing as to the appropriate disposition of the individual defendants, the
plaintiffs sought leave to amend their complaint a
second time in order to raise the very sorts of federal
claims (among others) that they had disavowed
when they filed their first amended complaint. They
also attempted to make other arguments that the
district court appropriately characterized as untimely. And on appeal, as we have discussed, they
have attempted to challenge the dismissal of their
suit on the basis of an argument that they never
developed below. As Judge Crabb so aptly observed, “Although the losses plaintiffs sustained in
the 2007 flood are unfortunate, even a sympathetic
plaintiff is not entitled to an endless number of
chances to reinvent this lawsuit until he discovers a
version that leads to victory.” R. 89 at 3.
674 F.3d at 715-16.
These comments fell on deaf ears. Sixteen months after we
affirmed the dismissal of the Irish suit, and shortly before the
pertinent Wisconsin statute of limitations ran, attorney
Christopher D. Stombaugh, one of the lawyers who repre-
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sented the plaintiffs in the Irish appeal,1 sought a new venue in
which to continue the pursuit of relief for the residents of
Bagley: in conjunction with local counsel, he filed a virtually
identical lawsuit on behalf of a (mostly) different set of current
and former Bagley residents, led by Beatrice Boyer, in Arkansas state court. The Boyer complaint expressly invoked Wisconsin law as controlling, and set forth the same four claims under
Wisconsin law that had been asserted in the Irish litigation:
negligence per se, common law negligence, negligent creation
and maintenance of a nuisance, and intentional nuisance. The
factual allegations set forth in support of those claims were
virtually identical to those made in the prior litigation, with the
only substantive difference being that they omitted any
allegations regarding design and construction of the railroad
trestle. That revision was clearly aimed at our observation in
the Irish appeal that the complaint at issue there did not appear
to be based solely on negligent maintenance of the BNSF
trestle. 674 F.3d at 714. The Boyer complaint also set forth an
identical demand for relief, including compensatory, treble,
and punitive damages. The complaint posited that venue was
proper in Arkansas because BNSF was licensed to do business
there. BNSF, seeing things differently, promptly removed the
case to the United States District Court for the Eastern District
of Arkansas based on diversity of citizenship. See 28 U.S.C.
§§ 1332(a)(1), 1441(a). Once the removal was accomplished,
1
Stombaugh did not argue the Irish appeal, but his name was on the briefs
and he filed a Circuit Rule 26.1 disclosure statement. His firm had also
represented the plaintiffs in the district court, although it does not appear
that Stombaugh himself had appeared in the district court.
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BNSF moved to transfer the case to the Western District of
Wisconsin pursuant to 28 U.S.C. § 1404(a), noting that “no
plaintiff resides in Arkansas, nothing bearing on plaintiffs’
claims happened in Arkansas, and BNSF has no Arkansas
contacts relevant to a flood in Wisconsin.” R. 9 at 1.
In opposing the motion to transfer, the Boyer plaintiffs
could not deny Wisconsin’s strong ties to the suit; instead, they
contended that deference should be given to their choice of
forum and posited that Arkansas was not an unduly burdensome venue for BNSF. What is particularly noteworthy about
the plaintiffs’ response, however, was its exceedingly candid
acknowledgments that the Boyer plaintiffs were seeking a
different court to re-examine claims that had met with rejection
in the Western District of Wisconsin and in this Circuit.
As the old adage goes: a trial is the search for the
truth. Plaintiffs have grave concerns whether the
Wisconsin District Court will yield to the temptation
of ruling against th[e] plaintiffs based on the prior
case, rather than the merits of the arguments put
before it. The Plaintiffs in this action are simply
seeking a fresh pair of judicial eyes, in a proper
forum, to examine the merits of their arguments
without a prejudice or predisposition stemming
from prior litigation by other individuals. Because
Arkansas is a proper forum for this case and BNSF
has not met its burden to transfer, the motion to
transfer must be denied.
R. 16 at 2. The plaintiffs returned to this theme later in their
memorandum. After noting this court’s ruling that the Irish
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plaintiffs had forfeited any argument that Wisconsin Statute
§ 88.87 did not apply to claims of negligent maintenance (as
opposed to construction and design) of the BNSF trestle, the
Boyer plaintiffs had this to say:
According to the Seventh Circuit Court of Appeals
ruling, these arguments were not sufficiently developed before Judge Crabb, therefore they do not
constitute a bar under principles of res judicata or
collateral estoppel. However, Plaintiffs fear that the
Dist. Court of Wisconsin will be easily persuaded by
such arguments based upon the prior contentious
nature of the proceeding. Seeking out a judge that
has ruled for you in the past in hopes that the judge
will rule for you in the future is not the purpose of
the “judicial economy” element of the balancing test
under §1404(a). Naturally, human nature being what
it is, Plaintiffs retain grave concerns that it would be
all too easy for the Western District of Wisconsin to
make short shrift of Plaintiffs’ robust state law
arguments, unwilling to entertain further analysis.
Such would not be judicial economy.
R. 16 at 9. It is therefore clear that one of the principal reasons
that the plaintiffs had filed the suit in Arkansas, if not the
principal reason, was in the hopes of finding a bench that was
more receptive to its claims.
The district court in Arkansas granted BNSF’s motion and
transferred the case to the Western District of Wisconsin in a
one-page order. The court stated at the outset:
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Based on the complaint, the plaintiffs are all residents of Bagley, Wisconsin; all alleged actions and
damages are based in Bagley; and all causes of
action and requested relief are based on Wisconsin
law. Additionally, there was an earlier case in
Wisconsin involving many of the same Plaintiffs and
allegations.
R. 18. The court went on to acknowledge and quote from the
plaintiffs’ memorandum opposing transfer claiming their
“grave concern” that the court in the Western District of
Wisconsin would not give their renewed claims a fair hearing.
The court dismissed that concern. “Since I seriously doubt that
Plaintiffs’ concerns about the Wisconsin court are well founded
and there appears to be no other reason for Plaintiffs to have
filed in Arkansas, Defendant’s Motion to Transfer is
GRANTED, and this case is transferred to the Western District
of Wisconsin.” R. 18.
The Boyer plaintiffs filed an appeal to the Eighth Circuit
from the transfer order, and then, after BNSF filed a motion to
dismiss the appeal because the transfer order was an interlocutory, non-appealable order, a petition for a writ of mandamus.
BNSF asked the Court of Appeals to dismiss the appeal and to
deny the mandamus petition. Pursuant to Federal Rule of
Appellate Procedure 38, BNSF also asked the court to sanction
the plaintiffs on multiple grounds: (1) the impropriety of the
underlying litigation (including the plaintiffs’ choice of an
Arkansas forum); (2) filing an appeal from the interlocutory
transfer order, and (3) filing a mandamus petition which did
not demonstrate the sort of extraordinary circumstances
necessary for granting such a petition. In a brief order, the
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Eighth Circuit summarily dismissed the appeal, denied the
petition for a writ of mandamus, and denied BNSF’s motion
for sanctions, all without comment.
The case thus returned to the Western District of Wisconsin,
where it was assigned to Judge Crabb. BNSF in short order
moved to dismiss the complaint. The court noted that in the
new complaint, the plaintiffs were pursuing the argument that
section 88.87 does not bar a claim against BNSF for negligent
maintenance of the trestle, as opposed to negligent design and
construction; and this was the very argument that we had
deemed forfeited in Irish because it was developed for the first
time on appeal. Boyer v. BNSF Ry. Co., 2014 WL 4273271, at *2
(W.D. Wis. Aug. 28, 2014); see Irish, 674 F.3d at 714-15.
BNSF contended in the first instance that claim preclusion
barred the Boyer plaintiffs from pursuing this line of argument,
because it could have been raised in the earlier litigation; but
the district court rejected the argument. Although there was no
dispute that two of the three elements of claim preclusion
under Wisconsin law were satisfied (an identity of the causes
of action between the two suits and a final judgment rendered
by a court of competent jurisdiction in the previous suit), the
court was not convinced that there was an identity between the
parties and their privies in the two cases. With the exception of
three individuals whom the district court agreed should be
dismissed because they were parties in Irish, the Boyer plaintiffs
represented a different group of individuals whose properties
were injured in the Bagley flood. Although they had suffered
the same types of injuries in the same incident as the Irish
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plaintiffs, the court did not see how they could be treated as
being in privity with the Irish plaintiffs. In particular:
[D]efendant does not explain how the plaintiffs in
Irish could have represented the interests of the
plaintiffs in this case who were not parties in Irish.
Because Irish was not a class action, the plaintiffs in
Irish did not have standing to seek relief for other
property owners who were not plaintiffs. Thus, even
if the plaintiffs in Irish had prevailed, any other
property owner would have had to bring her own
case against defendant to assert her own interests. If
I accepted defendant’s argument, it would mean
that all property owners would have been forced to
join Irish or forever forfeit their rights. Particularly
because there is no indication that many property
owners were even aware of Irish, that would not be
a fair result.
Id. at *3 (emphasis in original).
The court agreed, however, that the Boyer complaint failed
to state a claim on which relief could be granted. Although the
Boyer plaintiffs posited that section 88.87 did not govern claims
of negligent maintenance (including negligent inspection), the
Wisconsin appellate court’s decision in Pruim, supra, 483
N.W.2d 242, cast doubt on that position. The claim in Pruim
was one based on both the negligent design and maintenance
of a highway, but the court had found the claim in its entirety
preempted by section 88.87. The plaintiffs attempted to
distinguish Pruim on the ground that the allegedly faulty
construction of the highway at issue in that case had given rise
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to a continuing nuisance, in other words, a condition that could
be expected to result in repeated flooding and repeated
lawsuits. In the plaintiffs’ view, that was the sort of claim that
the Wisconsin legislature was aiming at in section 88.87, not
one based on negligence—including, in particular, negligent
maintenance—giving rise to a one-time or rare event like the
Bagley flood. The district court was not persuaded that the
distinction the plaintiffs were attempting to draw was a
legitimate one, noting that “it is not clear why a failure to
maintain the railroad property is any less susceptible to
repeated damages actions than a failure to construct the
railroad properly.” 2014 WL 4273271, at *4. Even setting Pruim
aside, the court did not think that the distinction withstood the
language of section 88.87 itself. The court pointed out that the
statute refers to both the construction and maintenance of a
railroad grade, thereby indicating that negligence in either
regard fell within the statute’s scope. Id. at *5.
The better reading of subsection (2)(a) is that it
applies to any act by the railroad company related to
the railroad grade that “impede[s] the general flow
of surface water or stream water in any unreasonable manner so as to cause either an unnecessary
accumulation of waters flooding or water-soaking
uplands or an unreasonable accumulation and
discharge of surface waters flooding or watersoaking lowlands.” In other words, the important
question is whether there is an allegation that the
railroad caused damage by impeding water flow; it
does not matter whether the cause was faulty
construction rather than faulty maintenance.
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To the extent § 88.87(2)(a) leaves any room for
doubt, it is resolved by § 88.87(2)(c), which says that
a property owner may bring a claim if the “railroad
company … constructs and maintains a highway or
railroad grade not in accordance with par. (a).” In
other words, if the railroad company has impeded
water flow in a manner prohibited by § 88.87(2)(a),
then the statute applies, regardless [of] whether the
problem is construction or maintenance. Plaintiff’s
distinction between “construction” and “maintenance” is simply not supported by the statutory text.
Id. at *5-*6. The court did not think it important that several
passages in the introductory portion of section 88.87 mention
construction but not maintenance. The court pointed out that
the introduction also recognizes that “it is necessary to control
and regulate the construction and drainage of all highways and
railroad grades.” Id. at *6 (quoting section 88.87(1)) (emphasis
in district court’s opinion). “Obviously, drainage problems
could be caused by faulty construction or faulty maintenance,
so § 88.87(1) is not evidence that the legislature viewed the
scope of the law as narrowly as plaintiffs do.” Id.
Finally, the court rejected the plaintiffs’ contention that the
statute, to the extent it preempted their common law claims,
violated article I, section 9 of the Wisconsin Constitution,
which guarantees the right of every injured person to a
remedy. That provision, the court noted, had been construed
to protect an individual’s access to the courts rather than a
particular legal remedy. 2014 WL 4273271, at *6.
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The court concluded by rejecting BNSF’s request for
sanctions. The court noted that it had rejected BNSF’s claim
preclusion argument. And although the court had agreed with
BNSF that section 88.87 barred the plaintiffs’ claims, the court
“[could not] go so far as to say that plaintiffs’ claims are
frivolous.” Id.
The plaintiffs have appealed the dismissal of their claims,
and BNSF has cross-appealed the denial of their request for
sanctions.
II.
The parties’ cross-appeals present us with two principal
issues. The first of these is whether the plaintiffs’ common law
claims for negligence and nuisance are preempted by section
88.87. As below, the plaintiffs have argued in their briefs that
the statute should be construed to reach only construction
defects that give rise to a nuisance in the form of repeated
flooding. Their claims, they have stressed, are based on a
failure of maintenance which resulted in a one-time event. At
oral argument, their counsel modified that argument to
contend that the statute does not reach the failure to maintain
the area upstream of the trestle by allowing debris to accumulate which would, in the event of a heavy rainfall, clog the
trestle and cause a flood. Neither iteration of the argument is
consistent with the language of section 88.87, and the second
iteration has been forfeited, as we discuss below. The second
issue concerns the conduct of the plaintiffs’ counsel, and
whether the district court abused its discretion in declining to
find it sanctionable. Although we agree with the district court
that the plaintiffs’ claims themselves are not legally frivolous,
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we do conclude that counsel’s decision to file the claims in
Arkansas state court amounted to vexatious litigation conduct
that multiplied the proceedings and warrants sanctions
pursuant to section 1927.
Before we turn to the merits of the plaintiffs’ claims, we
must first address BNSF’s contention that this suit is barred by
claim preclusion. BNSF reasons that because the Irish plaintiffs
pursued essentially the same claims for relief that the Boyer
plaintiffs are now pursuing, based on the same underlying
facts, for the same types of injuries, any and all arguments as
to the preemptive scope of section 88.87 could and should have
been raised in that suit. The critical issue, as the district court
recognized, is whether we can say that there is an identity of
interests between the plaintiffs in the Irish litigation and the
plaintiffs in the instant litigation. 2014 WL 4273271, at *3; see,
e.g., Wis. Pub. Serv. Corp. v. Arby Constr., Inc., 818 N.W.2d 863,
870 (Wis. 2012) (citing, as first element of claim preclusion,
identity between the parties or their privies in the prior and
present suits). Certainly that was true as to the three Irish
plaintiffs who were included among the 60 Boyer plaintiffs and
whom Judge Crabb dismissed from this litigation. And we may
assume for the sake of argument that it might also be true of
the several spouses of the Irish plaintiffs. Cf. Jensen v. Milwaukee
Mut. Ins. Co., 554 N.W.2d 232, 234-36 (Wis. Ct. App. 1996)
(issue preclusion barred wife from relitigating negligence
question resolved against husband in prior action to which she
was not a party but in which she actively participated). But
even if these plaintiffs were dismissed, along with the four
Boyer plaintiffs whom BNSF has identified as deceased, there
remain 50 or so plaintiffs who were not named in the Irish
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litigation. Certainly these plaintiffs are similarly situated with
the Irish plaintiffs, in that they resided in Bagley and their
properties were damaged by the flood, but BNSF has not
shown that these Boyer plaintiffs were in privity with any of the
Irish plaintiffs, such that we can deem them bound by the
judgment in Irish. See generally Richards v. Jefferson Cnty., Ala.,
517 U.S. 793, 798, 116 S. Ct. 1761, 1766 (1996) (“[a] judgment or
decree among parties to a lawsuit resolves issues as among
them, but it does not conclude the rights of strangers to those
proceedings”) (internal quotation marks and citations omitted);
Blonder-Tongue Labs., Inc. v. Univ. of Ill. Found., 402 U.S. 313,
329, 91 S. Ct. 1434, 1443 (1971) (“Some litigants—those who
never appeared in a prior action—may not be collaterally
estopped without litigating the issue. They have never had a
chance to present their evidence and arguments on the claim.
Due process prohibits estopping them despite one or more
existing adjudications of the identical issue which stand
squarely against their position.”). We may therefore turn to the
merits.
We begin by reviewing the relevant language of the statute.
(a) Whenever any … railroad company … has
heretofore constructed and now maintains or
hereafter constructs and maintains any … railroad
grade in or across any marsh, lowland, natural
depression, natural watercourse, natural or manmade channel or drainage course, it shall not
impede the general flow of surface water or
stream water in any unreasonable manner so as to
cause either an unnecessary accumulation of
waters flooding or water-soaking uplands or an
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unreasonable accumulation and discharge of
surface waters flooding or water-soaking lowlands. All such … railroad grades shall be constructed with adequate ditches, culverts, and other
facilities as may be feasible, consonant with sound
engineering practices, to the end of maintaining as
far as practicable the original flow lines of drainage. …
(c) If a … railroad company … constructs and
maintains a … railroad grade not in accordance
with par. (a), any property owner damaged by the
… railroad grade may, within 3 years after the
alleged damage occurred, file a claim with the …
railroad company. The claim shall consist of a
sworn statement of the alleged faulty construction
and a description sufficient to determine the
location of the lands alleged to have been damaged by flooding or water-soaking. Within 90 days
after the filing of the claim, the … railroad company shall either correct the cause of the water
damage, acquire rights to use the land for drainage or overflow purposes, or deny the claim. If the
… company denies the claim or fails to take any
action within 90 days after the filing of the claim,
the property owner may bring an action in inverse
condemnation under ch. 32 or sue for such other
relief, other than damages, as may be just and
equitable.
Wis. Stat. § 88.87(2). In sum, if a railroad has constructed and
maintains a grade (including supporting structures such as a
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trestle), and it unreasonably interferes with the drainage of
natural man-made waterways, it is subject to a suit for equitable relief and liability in inverse condemnation (provided that
timely notice of the claim has first been given to the railroad),
but the railroad may not be sued for monetary damages under
common law theories such as negligence and nuisance. Pruim,
483 N.W.2d at 244-45.
For precisely the reasons identified by the district court, we
reject the plaintiff’s threshold argument that section 88.87
reaches only those claims based on the faulty design and
construction of a railroad grade and not claims related to
shortcomings in maintenance. The statute repeatedly refers to
both the construction and maintenance of railroad grades, and
considering the central duty imposed by the statute—not to
interfere with drainage and to prevent unnecessary flooding—we can see no reason to think that the Wisconsin legislature meant to regulate construction alone.
The introductory section of the statute recites the legislature’s finding that “it is necessary to control and regulate the
construction and drainage of all … railroad grades so as to
protect property owners from damage to lands caused by
unreasonable diversion or retention of surface waters due to a
… railroad grade construction … .” § 88.87(1). It is true enough
that this section does not mention maintenance, but, in context,
the focus on construction is to be expected. As the statute
recognizes, it is the construction of a new railroad grade that
“must inevitably result in some interruption of and changes in
the pre-existing natural flow of surface waters … .” Id. But once
the grade is created and the potential for obstruction of
drainage is present, maintenance becomes as important as the
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initial design and construction of the grade to preventing
flooding. Debris may naturally accumulate in or near a railroad
trestle or culvert, for example, even if there was no flaw in
their design or construction—thus the statute’s recognition that
“some interruption” in the flow of surface waters is
“inevitabl[e]” once a railroad grade comes into being. Notably,
then, the legislature recognized a duty not only to regulate the
construction of railroad grades, but the drainage of such
grades. Drainage is a term that logically encompasses maintenance as well as initial construction. And the particular
maintenance actions that are necessary to preserve and
promote drainage will depend in no small measure on the type
of structure that is present and how it was designed.
The substantive duty imposed on the railroad by section 2
of the statute is thus one “not [to] impede the general flow of
surface water or stream water in any unreasonable manner so as
to interfere with drainage” or cause an unreasonable accumulation and/or discharge of water. § 88.87(2)(a) (emphasis ours).
See Kohlbeck, supra, 647 N.W.2d at 280 (recognizing this duty as
“the essence” of section 2); Chicago & N.W. Transp. Co. v. Office
of Com’r of R.R.s, 553 N.W.2d 845, 850 (Wis. Ct. App. 1996)
(Section 88.87(2) “imposes an affirmative duty on a railroad to
refrain from impeding the general flow of water in an unreasonable manner when constructing or maintaining a railroad
bed.”) (emphasis ours) (citing Van v. Town of Manitowoc Rapids,
442 N.W.2d 557, 558 (Wis. Ct. App. 1989)); see also id. at 851
(noting that duty imposed by section 88.87(2) is ongoing duty
that does not end with construction of rail bed) (citing and
quoting Lemonweir River Drainage Dist. v. Chicago, Milwaukee,
St. Paul & Pac. Ry. Co., 225 N.W. 132, 133 (Wis. 1929), and Soo
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Line R.R. Co. v. Office of Com’r of Transp., 489 N.W.2d 672, 677
(Wis. Ct. App. 1992)). That language is plainly broad enough
to encompass failures of maintenance as well as construction.
Moreover, given the obvious ways in which the sort of maintenance omissions we have mentioned can contribute to flooding, there is no logical reason to believe that the legislature
meant to exclude maintenance from the coverage of the statute.
Any doubt in this regard, as the district court noted, is
resolved by the remedial provision set forth in subsection 2(c).
That provision states that in the event a railroad company
“constructs and maintains … a railroad grade not in accordance with par[agraph] (a),” an injured property owner may
file a claim with the railroad within three years of the injury.
§ 88.87(2)(c). The quoted passage makes clear that the duty not
to obstruct the flow of water set forth in subsection 2(a) applies
to both construction and maintenance.
It has not escaped our notice that this subsection requires
the injured party to include in his claim a description “of the
alleged faulty construction” while demanding no such description of any shortcomings in maintenance. But this requirement
is appropriately read, we believe, as a means of identifying the
railroad structure that altered the preexisting watercourse or
drainage way and thus triggered the rail company’s duty not
to unreasonably interfere with the flow of surface water. That
the subsection otherwise recognizes the possibility that the
railroad has not maintained the grade in compliance with
subsection 2(a) provides all the confirmation that is necessary
that the Wisconsin legislature intended for failures of maintenance to be covered by the statute.
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In short, section 88.87 by its terms is not limited to faults in
the construction of a railroad grade. If negligent maintenance,
by itself or in conjunction with shortcomings in construction,
results in flooding, the statute, and its limitations on the
available remedies, applies to the claims of an injured property
owner.
As we recognized in Irish, the Wisconsin Court of Appeals’
decision in Pruim makes this very point. See 674 F.3d at 713-14.
The injured property owner in Pruim alleged that the negligent
construction and maintenance of a roadway shoulder and
drainage culvert had caused flooding and erosion on his
adjacent land.2 The landowner sought damages to compensate
him for the costs of the repairs to his land under, inter alia, a
common-law nuisance theory against the municipality responsible for the roadway and culvert. Pruim held that this sort of
claim was preempted in its entirety by section 88.87. “[T]he
legislature decided to regulate and control strictly the types of
claims that may be made by property owners against governmental entities regarding highway construction and repair.
Common law nuisance actions are not allowed. The statute
clearly and unambiguously forbids it.” 483 N.W.2d at 245; see
Kohlbeck, 647 N.E.2d at 280 (when state department of transportation breaches its duty not to unreasonably impede flow of
surface water, an injured property owner may bring action in
inverse condemnation or sue for appropriate relief other than
2
Recall that the statute also applies to roads and highways and the
governmental agencies responsible for building and maintaining them. To
simplify matters, we omitted the references to roads and government
agencies in our quotations from the statute.
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damages (citing Pruim); see also Hoops Enters., III, LLC, v. Super
Western, Inc., 827 N.W.2d 120, 123 (Wis. Ct. App. 2012).
We come then to the plaintiffs’ argument that section 88.87
applies only to construction defects that result in repeated
flooding (and which could thus be characterized as nuisances)
rather than defective maintenance that results only in one-time
(or rare) flooding like the Bagley flood that injured the plaintiffs. But the argument fails for multiple reasons.
First, to the extent the argument is premised on a distinction between construction and maintenance, it fails for the
same reasons we have already discussed. The distinction is
inconsistent with both the broad obligation not to unreasonably interfere with drainage imposed by section 88.87 and
Pruim’s understanding of the statute.
Second, nothing in the statute itself supports the notion that
its scope is limited to conduct that gives rise to repeated
flooding. As a historical matter, it may be that the Wisconsin
legislature enacted section 88.87 with the intent to overrule
Stockstad v. Town of Rutland, 99 N.W.2d 813, 815-16 (Wis. 1959).
The court in that case was presented with a continuing or
permanent injury: the reconstruction of a roadway allegedly
had resulted in the contamination of a landowner’s deep water
well; and the court held that the injured property owner was
entitled to pursue a common law nuisance claim under the
statutory predecessor to section 88.87. Pruim noted that the
subsequent enactment of section 88.87 may or may not have
been a coincidence, although its effect was to overrule
Stockstad. 483 N.W.2d at 244-45. But beyond that historical
circumstance, nothing in the statute itself or the cases constru-
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ing it suggests that statute was meant to apply only to nuisance
fact patterns involving repeated or continuous flooding. The
statutory language, as we have said, generally proscribes
unreasonable acts that interfere with natural drainage, with no
exception for shortcomings in maintenance (or for that matter
construction), which give rise to isolated rather than repeated
flooding. And as a matter of logic, it would be difficult to
enforce such a distinction in practice. If the flooding is attributed to new railroad construction, a modification in an existing
grade or trestle, or a change in maintenance procedures, for
example, it may not be possible to determine ex ante whether
the flooding will be an isolated or repeated event. Even where
a statistically rare weather event plays a role in the flood, as it
did in Bagley’s case, there is no way to predict when and how
often a similar weather event might recur thereafter. And if the
railroad moves swiftly after a first-time flood to correct the
underlying cause, how is that flood to be categorized under the
statute as the plaintiffs understand it?
When we questioned the plaintiffs’ counsel at argument
about distinguishing between negligence that results in a onetime flood versus negligence that gives rise to repeated
flooding, counsel changed course and pursued a different line
of argument: that the Bagley flood was attributable not to the
construction or maintenance of the trestle itself but rather to
BNSF’s failure to keep the area upstream from the trestle clear
of debris, and that type of negligence is beyond the scope of
section 88.87. It is not clear to us that this is a form of negligence distinct from that addressed by the statute. Section 88.87,
after all, speaks of a broad duty not to interfere with the
natural drainage of a waterway. An accumulation of debris
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upstream from a railroad structure would only matter because
that structure might cause debris to gather and create a
blockage in the event of heavy water runoff. In any case, we
need not consider the argument on its merits. It was made for
the first time at oral argument, and that is far too late in the
day. See, e.g., Veluchamy v. F.D.I.C., 706 F.3d 810, 817 (7th Cir.
2013) (citing Quality Oil, Inc. v. Kelley Partners, Inc., 657 F.3d
609, 614-15 (7th Cir. 2011)).
In sum, the plaintiffs’ four common law claims are preempted by section 88.87. The premise of their claims—that
BNSF failed to maintain the trestle by keeping it clear of
debris—amounts to an allegation that the railroad unreasonably interfered with the natural drainage of the Glass Hollow
Drain. This is conduct which falls within the scope of section
88.87. Consequently, the plaintiffs’ remedies were limited to
those specified by the statute, including equitable relief and
inverse condemnation, but not money damages. And because
the plaintiffs never complied with the notice requirements of
the statute by timely presenting their claims to BNSF before
filing suit, even that relief is foreclosed to them.
The plaintiffs contend that our interpretation of the statute
effectively deprives them of a remedy in violation of article I,
section 9 of the Wisconsin Constitution, which provides in
relevant part that “[e]very person is entitled to a certain
remedy in the laws for all injuries, or wrongs which he may
receive in his person, property, or character[.]” But as the
Wisconsin Supreme Court has explained, “That section, though
of great importance in our jurisprudence, is primarily addressed to the right of persons to have access to the courts and
to obtain justice on the basis of the law as it in fact exists. No
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legal rights are conferred by this portion of the Constitution.”
Mulder v. Acme-Cleveland Corp., 290 N.W.2d 276, 284 & n.3 (Wis.
1980). Put another way, the provision does not guarantee any
particular legal remedy to an injured person. See Messner v.
Briggs & Stratton Corp., 353 N.W.2d 363, 366 (Wis. Ct. App.
1984).
We have considered and rejected the plaintiffs’ request that
we certify to the Wisconsin Supreme Court the question
whether section 88.87 is properly understood to apply to their
claims. The statute’s terms are sufficiently clear on their face.
Moreover, Pruim’s holding construing and enforcing those
terms has been consistently followed, and no case has called it
into question in the more than 20 years since it was decided.
This is not an appropriate case for certification.
We turn to the question of sanctions. Below, BNSF asked
the district court to impose sanctions pursuant to Rule 11
and/or section 1927. As we have noted, the district court
denied the request in a brief paragraph, reasoning that although the plaintiffs’ claims failed on their merits, they were
not frivolous. The court did not cite section 1927 specifically in
its decision, and as we noted in Kapco Mfg. Co. v. C&O Enters.,
Inc., 886 F.2d 1485, 1493 (7th Cir. 1989), a court is not required
to find that a party’s claims are frivolous in order to find its
attorney’s conduct sanctionable pursuant to section 1927 as it
would under Rule 11. It is thus apparent that the district court
did not separately consider whether sanctions were appropriate under the former provision. For the reasons that follow, we
conclude that sanctions are warranted under section 1927
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based on counsel’s decision to file the Boyer litigation in
Arkansas.
Section 1927 authorizes a court to sanction an attorney who
“multiplies the proceedings unreasonably and vexatiously” by
requiring the attorney to “satisfy personally” the excess costs
(including fees) “reasonably incurred because of such conduct.” A finding of subjective bad faith on the part of the
offending attorney will support the imposition of sanctions
under section 1927, but such a finding is not necessary;
“objective bad faith” will also support a sanctions award. Dal
Pozzo v. Basic Mach. Co., 463 F.3d 609, 614 (7th Cir. 2006)
(collecting cases).
If a lawyer pursues a path that a reasonably careful
attorney would have known, after appropriate
inquiry, to be unsound, the conduct is objectively
unreasonable and vexatious. To put this a little
differently, a lawyer engages in bad faith by acting
recklessly or with indifference to the law, as well as
by acting in the teeth of what he knows to be the
law. …
In re TCI Ltd., 769 F.2d 441, 445 (7th Cir. 1985); see also
Grochocinski v. Mayer Brown Rowe & Maw, LLP, 719 F.3d 785,
799 (7th Cir. 2013); Dal Pozzo, 463 F.3d at 614; Riddle & Assocs.,
P.C. v. Kelly, 414 F.3d 832, 835 (7th Cir. 2005); Kotsilieris v.
Chalmers, 966 F.2d 1181, 1184 (7th Cir. 1992). Simple negligence,
on the other hand, will not suffice to invoke section 1927.
Grochocinski, 719 F.3d at 799; Kotsilieris, 966 F.2d at 1184-85. Our
review of the district court’s decision to grant or deny sanctions pursuant to section 1927 is deferential. E.g., Dal Pozzo,
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463 F.3d at 614 (review is for abuse of discretion). But where,
as here, a court appears not to have considered sanctions
pursuant to section 1927, and the record is otherwise fully
developed and the pertinent facts are not in dispute, we may
consider the propriety of section 1927 sanctions de novo.
Cf. Ambrosia Land Investments, LLC v. Peabody Coal Co., 521 F.3d
778, 786 (7th Cir. 2008) (legal issues unaddressed by district
court may be resolved on appeal where record is developed
and relevant facts are undisputed). We conclude that sanctions
were required for the following reasons.
We agree with the district court that the plaintiffs’ claim
themselves were not frivolous. Our decision in Irish did not
resolve the merits of the particular line of argument that the
Boyer plaintiffs pursued below; and as we have discussed, the
Boyer plaintiffs, to the extent they were not in privity with the
Irish plaintiffs, were free to pursue that line of argument in the
instant litigation. It is true that we expressed skepticism about
the argument in Irish, but because we deemed it to have been
forfeited, we did not resolve the argument on its merits.
Nothing precluded the Boyer plaintiffs from pursuing it in a
new round of litigation, nor did our decision in Irish constitute
stare decisis on that point. The argument fails, for all of the
reasons that the district judge and we have discussed; but it
was neither foreclosed by our decision in Irish nor legally
frivolous.
What our decision in Irish should have brought a stop to is
the habit of the plaintiffs’ attorneys from perpetually altering
their line of argument as the moment suits them. We cited this
pattern with disapproval in the Irish decision itself and have
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repeated those observations here. Yet, the pattern has persisted. The argument presented below was that a failure of
maintenance that results in a one-time flood is not covered by
section 88.87. That is also the argument that the parties have
briefed. Imagine our surprise then, when counsel was asked
about that argument at oral argument and replied that we did
not need to address it, as the real issue in the case was BNSF’s
failure to keep the area upstream of the trestle free of debris, as
opposed to the failure to maintain the trestle itself. This is yet
another change of position to an argument that was not raised
below. And it is unacceptable. It is one thing to flesh out,
winnow, or sharpen one’s case as the record develops and
counsel responds to the evidence and arguments of his
opponent. It is another to repeatedly throw item after item at
the wall to see what might stick.
What ultimately has persuaded us that section 1927
sanctions are in order, however, is counsel’s decision to file the
Boyer litigation in Arkansas. We cannot think of a better
example of multiplying the proceedings needlessly, unreasonably, and vexatiously. The plaintiffs’ claims have no tie
whatsoever to Arkansas: none of the plaintiffs lived or live
there; the flood did not occur there; no evidence related to the
flood is to be found there; and BNSF is neither headquartered
in Arkansas nor maintains its principal place of business there.
Moreover, each of the plaintiffs’ claims invoked Wisconsin law,
so the plaintiffs were asking the Arkansas court to apply
another court’s substantive law. The one and only connection
to Arkansas is that BNSF owns and maintains roughly 190
miles of track within Arkansas. See R. 16 at 16. Although that
circumstance might well support the exercise of personal
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jurisdiction over BNSF in Arkansas, it has no connection with
the events at issue in this suit.
The plaintiffs’ counsel could not have reasonably believed
that his choice of venue would survive either a motion to
dismiss the case based on forum non conveniens (assuming
BNSF did not remove the case to federal court), see generally
Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 508-09, 67 S. Ct. 839, 843
(1947); Farm Bureau Mut. Ins. Co. of Ark. v. Gadbury-Swift,
362 S.W.3d 291, 295 (Ark. 2010), or a section 1404(a) motion to
transfer the case to the Western District of Wisconsin (assuming that BNSF did remove the case), see generally Terra Int’l, Inc.
v. Miss. Chem. Corp., 119 F.3d 688, 691 (8th Cir. 1997). As the
briefing on BNSF’s motion to transfer the case made patently
clear, other than the plaintiffs’ choice of forum, none of the
factors bearing on venue (including the convenience of the
parties and the witnesses and the interest of justice) pointed to
Arkansas as an appropriate forum in which to litigate this case.
See § 1404(a). Indeed, it is absolutely telling that the only
affirmative reason that the plaintiffs could articulate in
opposition to BNSF’s transfer motion, apart from the deference
purportedly owed to their choice of venue, was the notion that
Judge Crabb might be tempted to give the Boyer plaintiffs’
claims short shrift given her rulings against the plaintiffs in the
Irish litigation, so that review by a “fresh pair of judicial eyes”
was in order. This was a virtual admission that the plaintiffs’
counsel was forum shopping. And the choice of Arkansas, a
state outside of this circuit, leaves no doubt that counsel was
shopping not only for a different trial-level judge but a
different appellate court. See Nat’l Treasury Employees Union v.
I.R.S., 765 F.2d 1174, 1177 n.5 (D.C. Cir. 1985) (R. B. Ginsburg,
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J.) (“The semblance of judge-shopping … is … a concern when
a litigant discontinues a fray, only to start over again on
another day.”).
Filing the case in Arkansas was, in short, an objectively
unreasonable decision. It was not only foreseeable but inevitable that BNSF would, upon removing the Boyer suit to federal
court, seek transfer of the case to the Western District of
Wisconsin and that the district judge in Arkansas would grant
that motion. Correcting the plaintiffs’ improper choice of venue
imposed entirely unnecessary costs on BNSF (which was
required to both appear in Arkansas and file the motion to
transfer), not to mention the Arkansas district court (which was
required to rule on the motion). Our decision in Kapco cited
forum-shopping (there, the filing of a second complaint before
a different judge in the same district) as one reason among
several sustaining the imposition of section 1927 sanctions.
886 F.2d at 1492 (“The record sufficiently supports the district
court’s finding that Friedman filed the second complaint for
the express purpose of avoiding the district court’s order and
shopping for a different forum.”). In this case, we believe the
unreasonable selection of Arkansas by itself warrants the
imposition of sanctions. There was not even an arguable basis
for filing the case in Arkansas, and the memorandum that
counsel filed in opposition to BNSF’s transfer motion essentially admitted that the choice of forum was dictated by a
desire for a different judge.
We have considered and rejected counsel’s argument that
because the Eighth Circuit, in resolving the Boyer plaintiffs’
attempts (via appeal and mandamus) to overturn the transfer
decision, denied BNSF’s motion for Rule 38 sanctions, we
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should deem BNSF’s renewed request for sanctions here an
unwarranted attempt to relitigate a matter already decided and
to circumvent the law of the case. For three reasons, we believe
it is appropriate to consider and grant BNSF’s sanctions
request. Even if the first two of these reasons would not be
sufficient by themselves to overcome the law of the case
doctrine, the third, which relates to our broader familiarity
with and understanding of counsel’s conduct, supports our
decision to revisit the matter of sanctions.
First, as a prudential doctrine, the law of the case doctrine
is discretionary rather than mandatory. See Pepper v. United
States, 562 U.S. 476, 506-07, 131 S. Ct. 1229, 1250-51 (2011);
Arizona v. California, 460 U.S. 605, 618, 103 S. Ct. 1382, 1391
(1983); Messinger v. Anderson, 225 U.S. 436, 444, 32 S. Ct. 739,
740 (1912) (Holmes, J.); Avitia v. Metropolitan Club of Chicago,
Inc., 49 F.3d 1219, 1227 (7th Cir. 1995); Redfield v. Continental
Cas. Corp., 818 F.2d 596, 605 (7th Cir. 1987). For purposes of
consistency, finality, and judicial economy, the doctrine
presumes that once a court has decided a particular issue in a
case, the issue should not be reopened without good cause. See
Minch v. City of Chicago, 486 F.3d 294, 301 (7th Cir. 2007); Avitia,
49 F.3d at 1227; cf. Best v. Shell Oil Co., 107 F.3d 544, 546 (7th
Cir. 1997) (“the law of the case doctrine in these circumstances
reflects the rightful expectation of litigants that a change of
judges midway through a case will not mean going back to
square one”). But as this rationale suggests, it does not prohibit
a court from revisiting an issue when there is a legitimate
reason to do so, whether it be a change in circumstances, new
evidence, or something the court overlooked earlier. See Zhang
v. Gonzales, 434 F.3d 993, 998 (7th Cir. 2006); Best, 107 F.3d at
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547. In this case, as a court which is much more familiar than
our sister circuit with history of both the Irish litigation and the
instant lawsuit, we believe we are better situated to evaluate
counsel’s course of conduct, including in particular the
decision to file this suit in another forum.
Second, the underlying matters that the Eighth Circuit had
before it were the plaintiffs’ appeal of the district court’s
decision to transfer the case and their petition for a writ of
mandamus. The filing of that appeal and the mandamus
petition, both of which BNSF argued were frivolous, constituted two of the three grounds on which BNSF asked the
Eighth Circuit to sanction the plaintiffs’ counsel pursuant to
Rule 38, and we believe that those grounds were the ones that
the Eighth Circuit is most likely to have considered, and
rejected, when it summarily denied BNSF’s sanctions request.
The other ground underlying BNSF’s request for sanctions—the asserted impropriety of the underlying suit
itself—was not a matter that was before the court other than as
a basis for sanctions. Rule 38 necessarily focuses on what a
party has done in the appellate court rather than the district
court. See Roth v. Green, 466 F.3d 1179, 1188 (10th Cir. 2006)
(quoting In re 60 E. 80th St. Equities, Inc., 218 F.3d 109, 118 n.4
(2d Cir. 2000)). All that was before the Eighth Circuit substantively was the request to dismiss the plaintiffs’ appeal (as an
unauthorized interlocutory appeal) and to deny the mandamus
petition (as a petition which failed to demonstrate the sort of
extraordinary circumstances warranting relief). Those matters
did not require the court to evaluate the merits of the underlying suit (including the decision to file this case in Arkansas)
except in the most tangential sense, let alone to evaluate the
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overall context and history of the litigation. So although we do
have reason to believe that the Eighth Circuit considered and
rejected the appeal and the mandamus petition as a basis for
sanctioning plaintiffs’ counsel, we have far less reason to
believe that it considered and resolved the other basis on
which sanctions were sought.
Third, as is particularly apparent to this court, counsel’s
decision to file the new case in Arkansas was not an isolated
lapse in judgment but of a piece with the pattern of repeatedly
shifting theories in search of an argument that might circumvent the Wisconsin statute. After we warned the plaintiffs’
legal team (which included their current counsel) about that
pattern in Irish, counsel chose to pursue the line of argument
we deemed forfeited in an entirely different forum. That
decision was a patent effort to evade the two courts (both the
district court and this court) most familiar with the facts and
history of the litigation concerning the Bagley flood.
Finally, we have concluded that it is appropriate to sanction
Mr. Stombaugh, who has served as the plaintiffs’ sole counsel
in this appeal and one of its two lead attorneys below, pursuant to section 1927 notwithstanding the fact that he was not
solely responsible for representing the plaintiffs in the illadvised Arkansas phase of the litigation. At oral argument, Mr.
Stombaugh indicated for the first time that he was “surprised”
when local counsel filed suit in Arkansas. To the extent that
statement was meant to suggest that he was not involved with
the decision to file the Boyer suit in Arkansas and thus should
not be held responsible for that decision, we reject it. Mr.
Stombaugh was listed as one of the plaintiffs’ counsel on the
complaint filed in Arkansas state court, he was one of the
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attorneys of record throughout the proceedings in the Arkansas state and federal courts (as he also acknowledged at oral
argument), his name was on all of the relevant documents filed
on behalf of the plaintiffs in the Eastern District of Arkansas,
and it was an associate at his firm who signed the memorandum in opposition to BNSF’s motion to transfer the case to the
Western District of Wisconsin—the very memorandum
admitting that the plaintiffs’ goal in choosing Arkansas was to
have a “fresh pair of judicial eyes” review the plaintiffs’ claims.
We thus have no doubt that Mr. Stombaugh has been active in
the Boyer suit from its inception, and if he was not solely
responsible for the decision to file the suit in Arkansas, he at
least shares responsibility for that decision. As one of the
attorneys who represented the Irish plaintiffs before this court,
he would have been keenly aware of the substantial ties the
underlying claims in this suit have to Wisconsin and the
substantial proceedings that took place previously in the
Western District of Wisconsin. Despite (and evidently because
of) that awareness, he collaborated in an attempt to shop for a
different judge and a different court of review in a forum that
had no connection whatsoever to the claims and the underlying facts and served no interest other than the pursuit of
counsel’s short-sighted and misplaced strategic goals.
We asked BNSF’s counsel to submit an accounting of the
total fees and costs BNSF had incurred in connection with the
initial detour into Arkansas. The submitted affidavit of BNSF’s
lead counsel documents the costs and fees that BNSF incurred
with respect to each aspect of the litigation in Arkansas
(including retaining local counsel, effectuating removal of the
case to the district court, briefing the motion to transfer, and
Case: 14-3131
36
Document: 58
Filed: 06/01/2016
Pages: 37
Nos. 14-3131 & 14-3182
defending the plaintiffs’ two-pronged appellate attack on the
transfer decision) and reports total costs and incurred fees of
$51,586.80. Of that amount, $17,011.00 was expended before
the Eighth Circuit in connection with the plaintiffs’ appeal,
mandamus petition, and BNSF’s request for Rule 38 sanctions.
As we have said, we have no doubt that the Eighth Circuit
considered the appeal and the mandamus petition in declining
to impose sanctions at BNSF’s urging, and so in deference to
our sister circuit’s judgment and the law of the case, we will
excise that category of appellate fees and costs in determining
the amount of sanctions to impose. We are satisfied that the
balance of BNSF’s reported fees and costs, totaling $34,575.80,
were reasonably and necessarily incurred in connection with
appearing in the case (in part through local counsel), removing
it from state to federal court, and having it transferred to the
Western District of Wisconsin. We believe that amount is
adequate to compensate BNSF for the burdens imposed by the
decision of plaintiffs’ counsel to file the Boyer case in a patently
inappropriate forum and is therefore a reasonable and appropriate sanction under section 1927. We order plaintiffs’ counsel,
Christopher Stombaugh, to compensate BNSF in that amount.
BNSF has also asked that we impose sanctions pursuant to
Rule 38 for what it regards as a frivolous appeal from the
district court’s decision to dismiss the plaintiffs’ claims. We do
not regard the appeal as frivolous. Again, we did not resolve
in Irish the particular argument as to section 88.87 that the
Boyer plaintiffs have pursued.
Although we have rejected that argument on its merits, the
plaintiffs’ understanding of the statute is not unreasonable.
Case: 14-3131
Document: 58
Filed: 06/01/2016
Nos. 14-3131 & 14-3182
Pages: 37
37
III.
We conclude that the plaintiffs’ claims are barred by the
terms of section 88.87. The plaintiffs’ request to certify that
question to the Wisconsin Supreme Court is denied. BNSF’s
request that we impose Rule 38 sanctions is also denied.
Finally, the decision of plaintiffs’ counsel to file this litigation
in Arkansas state court was objectively unreasonable and
vexatiously multiplied the proceedings, warranting sanctions
pursuant to section 1927. We remand with directions to impose
sanctions on the plaintiffs’ lead counsel, Christopher D.
Stombaugh, in the amount of $34,575.80. Costs of the appeal
are awarded to BNSF.
AFFIRMED IN PART, REVERSED IN PART,
and REMANDED.
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