THI of South Carolina at Magnolia Manor-Inman LLC v. Gilbert

Filing 22

ORDER denying 13 Motion for TRO; denying 13 Motion for Preliminary Injunction; denying 13 Motion for Attorney Fees as set out. Signed by Honorable G Ross Anderson, Jr on 4/9/14.(alew, )

UNITED STATES DISTRICT COURT
DISTRICT OF SOUTH CAROLINA
SPARTANBURG DIVISION
THI of South Carolina at Magnolia
Manor-Inman, LLC doing business as
Magnolia Manor-Inman
Plaintiff,
v.
Eddie M. Gilbert, Individually and as
Personal Representative of the Estate
of Gertrude F. Gilbert,
Defendant.

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C/A No.: 7:13-cv-02929-GRA

ORDER

This matter comes before the Court on Plaintiff’s Motion for Temporary
Restraining Order and Preliminary Injunction, and for Fees and Costs. ECF No. 13.
As the motion has been fully briefed, this Court will dispense with a hearing. See
Local Civil Rule 7.08 DSC.

For the reasons discussed herein, this Court DENIES

Plaintiff’s motion.
Background
In July 2013, Defendant Eddie M. Gilbert (“Mr. Gilbert”), individually and as the
personal representative of the estate of his deceased mother, Gertrude F. Gilbert,
filed suit against Plaintiff THI of South Carolina at Magnolia Manor-Inman, LLC d/b/a
Magnolia Manor-Inman (“Magnolia Manor-Inman”) in the Court of Common Pleas of
the Seventh Judicial Circuit, County of Spartanburg, South Carolina (the “State Court
Action”) alleging injuries and wrongful death resulting from the nursing home facility’s
negligence and reckless care and treatment of Ms. Gilbert. ECF No. 1-2. On August

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15, 2013, Magnolia Manor-Inman filed a Motion to Stay Proceedings in the State
Court Action. ECF Nos. 13-3 & 14-9. On September 26, 2013, Mr. Gilbert filed a
Motion to Determine the Enforceability of the Alleged Arbitration Clause in the State
Court Action. ECF Nos. 13-4 & 14-13.
On October 25, 2013, Magnolia Manor-Inman, pursuant to § 4 of the Federal
Arbitration Act (“FAA”), 9 U.S.C. § 4, filed a Complaint to Compel Arbitration and Stay
State Court Proceedings (“the Federal Court Complaint”) in this Court, ECF No. 1,
which was served on Mr. Gilbert on January 14, 2014, ECF No. 7. On January 21,
2014, in the State Court Action, Mr. Gilbert filed a Memorandum in Opposition to
[Magnolia Manor-Inman’s] Motion to Stay Proceedings, ECF Nos. 13-6 at 2–16 & 1416 at 1–15, and Magnolia Manor-Inman filed a Memorandum in Support of its Motion
to Stay and in Opposition to [Mr. Gilbert’s] Motion to Determine Enforceability of
Arbitration Clause, ECF Nos. 13-8 at 2–11 & 14-17 at 1–10. On January 22, 2014, a
hearing was held in the State Court Action on Magnolia Manor-Inman’s Motion to
Stay the State Court Action and Mr. Gilbert’s Motion to Determine Enforceability of
Arbitration Clause, and the State Court Judge took both matters under advisement.
ECF Nos. 13-1 at 6 & 14-18. On February 3, 2014, Mr. Gilbert filed his Answer and
First Motion to Dismiss the Federal Court Complaint in this Court. ECF Nos. 10 & 11.
Subsequently, Magnolia Manor-Inman filed the instant motion on February 5,
2014 asking this Court, pursuant to the All Writs Act, 28 U.S.C. § 1651, or in the
alternative, under Fed. R. Civ. P. 65, for
a temporary restraining order and preliminary injunction against
Defendant Eddie Gilbert, his counsel, Poliakoff & Associates, P.C., and
anyone acting in concert with them, to (1) cease and refrain from
attempting to litigate (including, but not limited to, seeking discovery

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regarding) any issues relating to the enforceability of the parties’
arbitration provision, which is subject of Plaintiff’s complaint in the
above-captioned action before this Court (ECF #1), in the Court of
Common Pleas of the Seventh Judicial Circuit, County of Spartanburg,
South Carolina in Gilbert v. Fundamental Clinical and Operational
Services, LLC et al., C.A. No. 2013-CP-42-2754 (“State Court Action”)
or in any other forum; (2) withdraw Defendant’s “Motion to Determine
Enforceability of Alleged Arbitration Clause” that Defendant filed in the
State Court Action; (3) withdraw portions of Defendant’s “Memorandum
In Opposition to Defendant THI of South Carolina at Magnolia ManorInman’s Motion to Stay Proceedings” filed in the State Court Action that
challenge or address in any way the validity or enforcement of the
parties’ arbitration provision; and (4) withdraw discovery requests
directed to the arbitration provision which Defendant propounded on
Plaintiff in the State Court Action on January 20, 2014.
ECF No. 13 at 1–2.

On February 21, 2014, Mr. Gilbert filed his Response in

Opposition. ECF No. 14. Magnolia Manor-Inman filed a reply brief in support of its
motion on March 3, 2014. ECF No. 18.
Discussion
Magnolia Manor-Inman argues that Mr. Gilbert must be restrained from
litigating in the State Court Action any issues or defenses related to the enforceability
of the arbitration agreement.

ECF No. 13-1 at 2 n.1.

Mr. Gilbert counters that

granting the requested injunctive relief “would violate principles of comity, judicial
efficiency, federalism, and equity.” ECF No. 14 at 4.
The All Writs Act provides that a federal court “may issue all writs necessary or
appropriate in aid of their respective jurisdictions and agreeable to the usages and
principles of law.” 28 U.S.C. § 1651. “A court’s authority under the All Writs Act is
nowhere more limited than when it is asked to enjoin a proceeding in state court.”
United States v. Purdue Frederick Co., 963 F. Supp. 2d 561, 567 (W.D. Va. 2013).
Thus, relief under the All Writs Act is subject to the limitations set forth in the Anti-

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Injunction Act, which creates a baseline rule that federal courts are prohibited from
enjoining state court proceedings, unless the injunction falls within one of three
specifically delineated exceptions:
(1) the injunction is “expressly authorized by Act of Congress”;
(2) the injunction is “necessary in aid of [the court’s] jurisdiction”; or
(3) the injunction is necessary “to protect or effectuate [the court’s] judgments.”
28 U.S.C. § 2283; Atl. Coast Line R.R. Co. v. Bhd. of Locomotive Eng’rs, 398 U.S.
281, 286 (1970); see Hartsville Theatres, Inc. v. Fox, 324 F. Supp. 258, 261 (D.S.C.
1971) (“This ‘clear cut’ statutory prohibition . . . is more than a mere statement of a
principle of comity; it represents a binding rule on the power of the federal courts, a
rule which may not be ignored . . . .”). These three exceptions have been narrowly
construed and “[a]ny doubts as to the propriety of a federal injunction against state
court proceedings should be resolved in favor of permitting the state courts to
proceed in an orderly fashion to finally determine the controversy.” Atl. Coast Line,
398 U.S. at 297.
Although the All Writs Act, 28 U.S.C. § 1651(a), confers “extraordinary powers”
upon federal courts by authorizing them to enjoin parallel state court proceedings that
threaten their jurisdiction, the language of the All Writs Act closely resembles that of
the Anti-Injunction Act’s second exception, and thus courts construe the two similarly.
Winkler v. Eli Lilly & Co., 101 F.3d 1196, 1203 (7th Cir. 1996). Therefore, given the
strong prohibitions laid out in the Anti-Injunction Act, the Supreme Court has
cautioned that courts should use the All Writs Act “sparingly and only in the most
critical and exigent circumstances.” Wis. Right to Life, Inc. v. Fed. Election Comm’n,

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542 U.S. 1305, 1306 (2004).

Furthermore, “[p]roceedings in state courts should

normally be allowed to continue unimpaired by intervention of the lower federal
courts, with relief from error, if any, through the state appellate courts and ultimately
[the United States Supreme Court].” Atl. Coast Line, 398 U.S. at 287.
With respect to the “in aid of jurisdiction” exception, on which Magnolia ManorInman primarily bases its argument, courts should only invoke this exception when
“necessary to prevent a state court from so interfering with a federal court’s
consideration or disposition of a case as to seriously impair the federal court’s
flexibility and authority to decide that case.” Id. at 295 (emphasizing that in situations
where federal and state courts have concurrent jurisdiction the fact that the state
court could potentially rule first is not enough to require an injunction); see also Stifel,
Nicolaus & Co. v. Woolsey & Co., 43 F.3d 1483, at *2 (10th Cir. 1994) (unpublished
table decision) (“The potential of preclusion by the state action, however, is not the
type of threat to the federal court’s jurisdiction envisioned by the [Anti-Injunction
Act].”); Texas v. United States, 837 F.2d 184, 186 n.4 (5th Cir. 1988) (holding that the
“aid of jurisdiction” exception may not “be invoked merely because of the prospect
that a concurrent state proceeding might result in a judgment inconsistent with the
federal court’s decision”), cert. denied, 488 U.S. 821 (1988). Courts have historically
understood this exception “to apply most often when a federal court was the first in
obtaining jurisdiction over a res in an in rem action and the same federal court seeks
to enjoin suits in state courts involving the same res.” In re Am. Honda Motor Co.,
Dealership Relations Litig., 315 F.3d 417, 439 (4th Cir. 2003); see also Roth v. Bank
of the Commonwealth, 583 F.2d 527, 535 (6th Cir. 1978) (citing Kline v. Burke

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Constr. Co., 260 U.S. 226, 230 (1922)) (“in personam actions in federal and state
court may proceed concurrently, without interference from either court”); Niemczyk v.
Coleco Indus., Inc., 581 F. Supp. 717, 718 (N.D.N.Y. 1984) (“it is equally well
established that a state court cannot enjoin a person or corporation from prosecuting
an in personam action in a federal court which has jurisdiction over the parties and
subject matter”). “Unlike in personam actions, in which state and federal courts may
separately impose judgments and obligations on litigants, the imposition of conflicting
obligations on property is impossible to administer, necessitating that only one court
decide the appropriate allocation of rights with regard to that property.”

Purdue

Frederick, 963 F. Supp. 2d at 572. However, the Fourth Circuit has determined that
this exception can be appropriately used in “school desegregation cases,” and in
complex, “multi-district litigation.” In re Am. Honda Motor Co., 315 F.3d at 439–40.
Magnolia Manor-Inman asserts that, absent an injunction, the state court could
potentially—before this Court has a chance to rule on the petition for arbitration—
make rulings that “the arbitration provision is unenforceable.” ECF No. 13-1 at 18.
Thus, Magnolia Manor-Inman asserts that an injunction is necessary to preserve its
choice of a federal forum to compel arbitration. However, in the State Court Action,
the judge has taken both parties’ motions under advisement, and “[w]ithout, at the
very least, some evidence that the state court [is] indifferent to or hostile to the
parties’ rights,” this Court finds that “the extraordinary remedy of an injunction . . . is
not authorized by the “in aid of jurisdiction” exception. Zurich Am. Ins. Co. v. Super.
Ct. for Cal., 326 F.3d 816, 827 (7th Cir. 2002). Magnolia Manor-Inman’s motion fails
to show the “critical and exigent circumstances” that warrant a federal court enjoining

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a state court proceeding.

Wis. Right to Life, Inc., 542 U.S. at 1306; see also

TranSouth Fin. Corp. v. Bell, 149 F.3d 1292, 1297 (11th Cir. 1998) (finding that the
“aid of jurisdiction” exception cannot apply in situations where “no court has found the
underlying dispute arbitrable and compelled the parties to arbitrate their claims”).
Here, both this action and the State Court Action are in personam actions.
Moreover, as indicated in this Court’s previous Order denying Defendant’s Motion to
Dismiss, Mr. Gilbert’s pending Motion to Determine Enforceability of Arbitration
Clause in the State Court Action does not create duplicative litigation. ECF No. 21.
Thus, the question of whether to compel arbitration is not an issue in the State Court
Action because Magnolia Manor-Inman has not moved to compel arbitration in that
forum. Rather, the issue of whether Mr. Gilbert is required to arbitrate his dispute
with Magnolia Manor-Inman is solely a matter for this Court to decide. Furthermore,
no state or federal court has made a determination as to the arbitrability of the
underlying dispute between Mr. Gilbert and Magnolia Manor-Inman or compelled the
parties to arbitrate their claims.

Therefore, the Anti-Injunction Act precludes this

Court from enjoining Mr. Gilbert’s pursuit of the State Court Action.1 As a result, it is
not necessary for this Court to analyze the factors governing the issuance of a
preliminary injunction set forth in Magnolia Manor-Inman’s request for injunctive relief
under Fed. R. Civ. P. 65.

1

It is possible, however, that in the future course of this litigation, a situation will arise that meets one
of the exceptions enunciated in 28 U.S.C. § 2283 and that the Court will then gain authority to issue an
injunction.

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Conclusion
Accordingly, for the foregoing reasons, Plaintiff is not entitled to injunctive relief
under Fed. R. Civ. P. 65 or the All Writs Act.
IT IS THEREFORE ORDERED that Plaintiff’s Motion for Temporary
Restraining Order and Preliminary Injunction and for Fees and Costs is DENIED.
IT IS SO ORDERED.

April 9 , 2014 
Anderson, South Carolina

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