Chief Justice TOAL.
Appellant Bon Secours-St. Francis Xavier Hospital (the Hospital) was a defendant at trial
The underlying case is a state law civil suit for defamation and civil conspiracy. In 2002, Dr. Thomas R. Wieters was suspended from the medical staff by the Hospital for unprofessional, threatening, and disruptive behavior. In April 2003, the Hospital, pursuant to the Health Care Quality Improvement Act of 1986 (HCQIA) found at 42 U.S.C. §§ 11101-52, filed a report regarding Dr. Wieters's status with the National Practitioners Data Bank (NPDB).
The state court trial was re-scheduled to begin at 2 p.m. on March 2, 2010. In his February 8 Memo in Opposition to the Motions for Summary Judgment, Dr. Wieters disputed the Hospital's alleged immunity under the HCQIA, stating at several points that the HCQIA expressly allows defamation suits, and further referenced the HCQIA. The trial judge denied the Hospital's motion for summary judgment. On March 1, Dr. Wieters filed his Pretrial Brief and Proposed Jury Instructions, all of which again stated the HCQIA allows for suit when party knowingly makes false statements to the NPDB.
On the morning of March 2, 2010, three hours before the trial was scheduled to begin, Appellants removed the case to the federal district court for the second time, relying upon Dr. Wieters's Pretrial Brief filed the evening before. Appellants claimed the Pretrial Brief, along with the jury instructions and February 8 Memo in Opposition to the Motions for Summary Judgment, constituted "other paper" under 28 U.S.C. § 1446(b).
As Judge Baxley expected, United States District Court Judge Houck remanded the case to state court on March 18, 2010. Judge Houck explained in his Order that the Complaint does not state a federal question, nor can one be inferred, and the Complaint has never been amended since his original remand order in 2005. Further, he stated whether the HCQIA creates a private right of action such that Dr. Wieters could bring a claim under the HCQIA has not been determined by the Fourth Circuit Court of Appeals, but that the First, Eighth, Tenth, and Eleventh Circuit Courts of Appeals have all determined that it does not. Judge Houck noted the Hospital raised federal law as a defense, and that is insufficient to create federal question jurisdiction under 28 U.S.C. § 1331 to justify removal. Judge Houck found that "[b]ecause a potential defense will not support federal question jurisdiction under Section 1331, it follows that federal question jurisdiction will not obtain by a mere reference to the HCQIA" in the filing relied upon by the Hospital.
As promised, Judge Baxley issued a Notice of Sanctions Hearing on March 24 for the Appellants to show cause as to why sanctions should not be ordered "for delaying the trial of this case by frivolously filing for removal to the Federal Court on the morning of the day this jury trial was to begin." Dr. Wieters filed for Rule 11 sanctions the following day, requesting reasonable expenses and attorneys' fees. The sanctions hearing was held on April 19, 2010, and Judge Baxley issued his Order for Sanctions on July 1. In his Order, Judge Baxley found the Hospital's second removal was based upon the same grounds as the first removal, was without merit, and was interposed solely for delay. In ordering the sanctions, Judge Baxley considered the complexity of the multi-week docket and the difficulty and expense involved in cancelling one case and calling another. He appeared particularly perturbed by the inference that Appellants had been considering removal since Dr. Wieters filed his February 8 Memo in Opposition, and that the hassle and expense could have been avoided if
The sanctions ordered totaled roughly $68,000.00 and are summarized as follows:
Appellants appeal those sanctions beyond the lost income, costs, and fees, arguing a good faith removal to federal court cannot be the basis for sanctions, and that the trial judge abused his discretion in the order of sanctions.
Appellants present the following issues for review:
A trial court may impose sanctions on a party, a party's attorney, or both for filing a pleading, motion, or other paper to cause delay or when no good grounds exist to support the filing. See Rule 11, SCRCP; Runyon v. Wright, 322 S.C. 15, 19, 471 S.E.2d 160, 162 (1996). "A court imposing sanctions under Rule 11 should, in its order, describe the conduct determined to constitute a violation of the Rule and explain the basis for the sanction imposed." Runyon, 322 S.C. at 19, 471 S.E.2d at 162. When reviewing judge's order of sanctions, the appellate court takes its own view of the facts. Father v. S.C. Dep't of Soc. Servs., 353 S.C. 254, 260-61, 578 S.E.2d 11, 14 (2003). "[W]here the appellate court agrees with the trial court's findings of fact, it reviews the decision to award sanctions, as well as the terms of those sanctions, under an abuse of discretion standard." Id. at 261, 578 S.E.2d at 14. An abuse of discretion may be found if the trial court's conclusions lack reasonable factual support. Runyon, 322 S.C. at 19, 471 S.E.2d at 162.
Appellants argue they should not have been sanctioned for the second removal because it was done in good faith. We disagree.
Rule 11 states,
Rule 11, SCRCP. A trial court may impose sanctions on a party, a party's attorney, or both for filing a pleading, motion, or other paper to cause delay or when no good grounds exist to support the filing. See Runyon, 322 S.C. at 19, 471 S.E.2d
We agree with both Judge Baxley's version of the facts and his conclusion that the second removal was not based on good grounds and was interposed solely for delay. While Rule 11 is evaluated by a subjective standard,
As to the delay, Appellants were first aware of Dr. Wieters's references to the HCQIA in early February when they received the Memo in Opposition to the Motion for Summary Judgment. Even when Appellants received the pretrial brief and jury instructions the evening before the trial, they did not bring to the court the question of whether the filings created a basis for removal; instead, they sought the advice of a practicing member of the Bar and a law professor on the removability question. Appellants waited until mere hours before the commencement of the multi-week jury trial before filing for removal. Judge Baxley characterized this action as "a thinly veiled effort at a continuance." We agree with Judge Baxley's assessment. We do not suggest that Appellants were under an obligation to seek clarification from the court before filing for removal. However, Appellants continually contend the lateness of their removal was a result of not learning of Dr. Wieters's references to the HCQIA until the eleventh hour. This was simply not the case as they had received nearly identical language in the February 8 memo almost a month before receiving the proposed jury instructions and pretrial brief.
We take this opportunity to state definitively that vexatious removal is sanctionable conduct, and parties will be held accountable for the unnecessary expense and delay caused by abuses of the right to removal.
As explained in Runyon v. Wright, a trial judge has wide discretion in ordering sanctions. Judge Baxley found Appellants' second removal attempt to be reprehensible and an improper delay tactic that cost the court system and the other party significant resources, time, and money. For that reason, Judge Baxley imposed stiff sanctions. While the unappealed portion of the ordered sanctions are standard and appropriate, we find the sanctions appealed from exceed the bounds of a judge's discretion.
The award to the other party of its detailed, itemized costs and fees incurred as a result of the improper removal plainly is allowed under the express language of Rule 11, SCRCP. However, we find Judge Baxley abused his discretion in going beyond the conventional awards of costs and fees when he required Appellants to reimburse the South Carolina Judicial Department for the cost of the court's salary and benefits for the week it was unable to proceed with the scheduled trial, to reimburse the Charleston County Clerk of Court for the expense it incurred in summoning and administering the jury panel, to pay $5,000.00 to the Access to Justice Commission with a letter of apology to Robin Wheeler, and to pay $50.00 to
Under the specific facts of this case, we find Appellants' second attempt at removal to be sanctionable. Further, the appealed sanctions were an abuse of the trial judge's discretion. Therefore, we affirm Judge Baxley's order as modified to remove the sanctions not relating to reimbursing the other party for its costs and fees.
BEATTY and KITTREDGE, JJ., concur. PLEICONES, J., concurring in a separate opinion. HEARN, J., concurring in a separate opinion.
Justice PLEICONES:
I concur but write separately as I would find no sanctionable conduct here.
I concur in the majority's decision to reverse all sanctions challenged in this appeal.
Justice HEARN:
I concur in the result reached by the majority. I wholeheartedly agree with the majority's statement that vexatious removal
In my view, the majority places too much emphasis on the original pleadings filed in this case. All parties agree that based on the district court's resolution of the original removal, the complaint itself does not raise questions of federal law. However, removal is not always "based upon the claims alleged in the initial pleading"; 28 U.S.C. § 1446(b) specifically permits removal "[i]f the case stated by the initial pleading is not removable" and it later becomes removable based on an "amended pleading, motion, order or other paper." (emphasis added). At this juncture, we must therefore examine Appellants' belief that these other papers stated a federal question, not whether the complaint implicated questions of federal law.
In 2004, Appellants' removal was premised upon the necessity of resolving substantial questions of federal law raised by a state law cause of action, not traditional federal question jurisdiction.
Given the statements contained in Dr. Wieters' filings and the advice Appellants sought from their general counsel, counsel for their insurance company, a law professor, and a highly respected local attorney, I believe the only reasonably conclusion is that Appellants had a good faith basis for removal in 2010. Based on the record before the Court, it is purely conjectural to conclude otherwise. Additionally, in my opinion the removal was not based on frivolous grounds but rather on the novel issue within the Fourth Circuit of whether the HCQIA provides for an independent cause of action. The fact that the district court predicted the Fourth Circuit would not find a private cause of action has no bearing on Appellants' subjective beliefs. Therefore, this is not a situation with "attorneys engaging in semantic games with the courts" but rather attorneys paying close attention to arguments made by their adversaries during litigation. While this undoubtedly is a fine line to walk, the record before us in this case convinces me that Appellants had a good faith belief in the grounds supporting the second removal.
However, I agree with the circuit court's conclusion that the removal was interposed for delay. I too wish to reiterate that a defendant generally has a right to remove a case up to the start of trial. Holding otherwise would undoubtedly chill the statutory right a defendant has to remove a case to federal court. The record shows Appellants received notice of Dr. Wieters' arguments knowing full well that the trial had a date certain set less than one month away. Moreover, Appellants could and should have sought clarification from Dr. Wieters or taken some other action to determine whether he was raising a federal question before receiving the additional filings on the eve of trial. Given the impending date certain for trial, there certainly were steps Appellants could have taken to ameliorate the inevitable delay their removal would cause. Because they