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Dorothy Quinn, Jacqueline Marchese and Nina Assajew v. Aetna Life & Casualty Co., 616 F.2d 38, 2d Cir. (1980)
Dorothy Quinn, Jacqueline Marchese and Nina Assajew v. Aetna Life & Casualty Co., 616 F.2d 38, 2d Cir. (1980)
2d 38
5 Media L. Rep. 2432
Appeal is taken from a judgment entered in the United States District Court for
the Eastern District of New York, Charles P. Sifton, Judge, 482 F.Supp. 22
(E.D.N.Y.1979), dismissing this action on the pleadings pursuant to Rule 12(c),
Fed.R.Civ.P. This proceeding was originally brought in the New York Supreme
Court, County of Queens, by the three named plaintiffs, all New York
residents, each of whom was then prosecuting a suit in state court seeking
recovery for personal injuries allegedly sustained in an automobile accident. 1
The complaint sought to enjoin publication in two magazines, both New York
residents, of a series of advertisements submitted by Aetna Life & Casualty Co.
("Aetna"), a Connecticut resident, which were critical of the present system of
adjudicating tort cases, particularly of the perceived trend towards increasingly
large awards. In essence, plaintiffs contended that their rights to receive a fair
trial were jeopardized by these statements. Despite the fact that their cases had
not been called for trial and notwithstanding the availability of techniques
designed to identify and disqualify jurors who had been unduly affected by
Aetna's campaign, plaintiffs sought permanent injunctive relief.
2
Aetna's initial attempt to remove the action pursuant to 28 U.S.C. 1332 and
1441 was rebuffed because the presence of the magazine defendants destroyed
the requisite diversity. Plaintiffs then moved in the state court for a preliminary
injunction and defendants responded by requesting dismissal for failure to state
a claim upon which relief could be granted. The request for a preliminary
injunction was denied, and the complaint was dismissed as against the
magazines but not as against Aetna. The matter was set down for an expedited
trial. In denying Aetna's motion the state court indicated that the advertisements
in issue were merely "commercial" expression, not fully protected by the First
Amendment to the federal Constitution, and as such, were susceptible to the
restraint sought by plaintiffs.
Following these rulings, the plaintiffs and the magazines consented to the
severance of the claims against the magazines from the claims against Aetna,
and plaintiffs elected not to appeal the ruling dismissing the magazines from
their suit. Having attained complete diversity in this manner, Aetna again
removed the case, under authority of 28 U.S.C. 1441(b), 1446(b),2 and
thereupon moved for dismissal upon the same grounds as had been previously
asserted before the state court. Plaintiffs responded by asking the district court
to abstain in favor of state adjudication, or, alternatively, to abide by the prior
ruling of the state judge on the dismissal motion. Neither request was granted.
The district judge, expressing his clear conviction of error with respect to the
state court's decision, dismissed the action on its pleadings, holding that the
relief sought was entirely improper as it constituted a prior restraint on the
exercise of First Amendment freedoms. Nebraska Press Ass'n v. Stuart, 427
U.S. 539, 96 S.Ct. 2791, 49 L.Ed.2d 683 (1976); First National Bank of Boston
v. Bellotti, 435 U.S. 765, 98 S.Ct. 1407, 55 L.Ed.2d 707 (1978). This appeal
followed.
We affirm the resolution of the First Amendment claim substantially for the
reasons set forth in Judge Sifton's thorough and considered opinion, supra, 482
F.Supp. 22. The relief sought by plaintiffs is clearly barred by the Fist
Amendment and by recent decisions construing it, and plaintiffs' reliance on
the "commercial speech" doctrine is misplaced. Nor do we find any procedural
bar to the vindication in federal court of defendant-appellee's First Amendment
rights. Relitigation of Aetna's motion for dismissal on the pleadings was not
barred by the law of the case doctrine, which is discretionary, First National
Bank of Hollywood v. American Foam Rubber Corp., 530 F.2d 450, 453 n.3
(2d Cir. 1976), even when the case is one transferred from state to federal court,
Hill v. U. S. Fidelity & Guaranty Co., 428 F.2d 112, 115 (5th Cir. 1970), and in
any event cannot bind an appellate court. Appellants' arguments as to waiver,
full faith and credit and res judicata are baseless.
5
Judge Sifton correctly held that this was not a proper case for abstention. It
falls into none of the three categories described by the Supreme Court in
Colorado River Water Conservation District v. United States, 424 U.S. 800,
814-16, 96 S.Ct. 1236, 1244-45, 47 L.Ed.2d 483,3 and he so held. It is easily
distinguishable from Naylor v. Case & McGrath, Inc., 585 F.2d 557 (2d Cir.
1978), a case in which we ordered abstention when a similar suit challenging
substantially the same advertisements came before us, because Naylor involved
the construction of a new Connecticut statute. Complex and unsettled issues of
state law, whose resolution might well affect broad policies of the state, were
involved in Naylor but are not present here. New York law is clear that the
plaintiffs do not have a cause of action under either the Penal Law prohibiting
jury tampering, which may only be enforced by criminal prosecution, or the
General Business Law's strictures on false advertising, which may only be
enforced by the state attorney general. Under these circumstances and in light
of the principle that "abstention cannot be ordered simply to give state courts
the first opportunity to vindicate (a) federal claim," Zwickler v. Koota, 389
U.S. 241, 251, 88 S.Ct. 391, 397, 19 L.Ed.2d 444 (1967), abstention would
have been inappropriate in this case.4
Counsel advised us at oral argument that the Quinn negligence case had been
settled after the entry of judgment by the district court. The Marchese and
Assajew cases were pending
The district court had subject matter jurisdiction over this action despite the line
of cases holding that, even under the 1949 amendment to 28 U.S.C. 1446(b),
the involuntary dismissal of non-diverse parties does not make an action
removable. See Weems v. Louis Dreyfus Corp., 380 F.2d 545 (5th Cir. 1967);
Squibb-Mathieson Int'l Corp. v. St. Paul Mercury Ins. Co., 238 F.Supp. 598
(S.D.N.Y.1965); 14 Wright, Miller & Cooper, 3723. The purpose of this
distinction is to protect against the possibility that a party might secure a
reversal on appeal in state court of the non-diverse party's dismissal, SquibbMathieson v. St. Paul, supra at 599, quoting 14 Wright, Miller & Cooper,
3723 at 595, producing renewed lack of complete diversity in the state court
action, a result repugnant to the requirement in 28 U.S.C. 1441 that an action,
in order to be removable, be one which could have been brought in federal court
in the first instance. By the time Judge Sifton came to decide the removability
of this case, however, the time for plaintiffs to take an appeal from the
involuntary dismissal of the non-diverse defendants had long passed, and no
appeal by the plaintiffs had been taken. Thus he was correct in concluding that
no appeal could occur which could produce the result, described above,
forbidden by the statute. Under these circumstances, plaintiffs' failure to take
an appeal constituted the functional equivalent of a "voluntary" dismissal
3
Colorado River's three categories are (1) cases in which the federal
constitutional question might be mooted or altered by reason of a state court
determination of state law; (2) cases involving difficult state law issues with
broad public policy impact; and (3) cases in which restraint of state criminal
proceedings is sought. 424 U.S. at 814-16, 96 S.Ct. at 1244-45
Consequently, we need not rule on the district court's apparent partial reliance
on two other reasons for declining to abstain: the fact that abstention was
sought by the plaintiffs, rather than the defendant, and the fact that jurisdiction
is based on diversity of citizenship. We doubt that the appropriateness of
abstention pursuant to Railroad Commission of Texas v. Pullman Co., 312 U.S.
496, 61 S.Ct. 643, 85 L.Ed. 971 (1941), turns on the fortuity of the identity of
the party seeking it, see 17 Wright, Miller & Cooper, Federal Practice and
Procedure, Civil: 4243 at 471. Since the state law question does not warrant
abstention in any event, we express no view on the difficult issue as to whether
abstention is appropriate in a diversity case to seek state court clarification of a
state law issue, and, if so, whether it is appropriate when the state law issue
might affect the resolution of a federal law defense, especially one grounded on
the First Amendment. See Miller-Davis Co. v. Illinois State Toll Highway
Authority, 567 F.2d 323, 326 (7th Cir. 1977)