United States District Court, D. Minnesota
John Frederick Dryer, James Lawrence Marshall, Joseph Michael Senser, Elvin Lamont Bethea, Dante Anthony Pastorini, Edward Alvin White, Fred Lee Barnett, Tracy Anthony Simien, Darrell Alexander Thompson, Jim Ray Smith, Irvin Acie Cross, Bruce Allan Laird, Brian Duncan, Reginald Joseph Rucker, Billy Joe Dupree, Mark Gregory Clayton, Preston Pearson, Reginald McKenzie, Joseph Barney Lemuel, Jackie Larue Smith, Paul James Krause, James Nathaniel Brown, and Michael James Haynes, on behalf of themselves and all others similarly situated, Plaintiffs,
National Football League, Defendant.
MEMORANDUM AND ORDER
A. Magnuson United States District Court Judge
matter is before the Court on Hausfeld LLP's Motion for
Permanent Injunction. Hausfeld, one of Plaintiffs' law
firms, seeks to enjoin a Minnesota state-court lawsuit
initiated by Bob Stein LLC and Ward & Ward PLLC, two
other Plaintiffs' law firms. Stein and Ward's
state-court lawsuit alleges that Hausfeld breached a
fee-sharing agreement between the law firms and now owes
Stein and Ward 10% of the attorneys' fees awarded in this
case. Hausfeld claims that Stein and Ward are attempting to
relitigate the Court's allocation of attorneys' fees
in state court and seeks to enjoin those proceedings. For the
following reasons, Hausfeld's Motion is denied.
months of negotiations, and due to the yeoman's efforts
of a group of Plaintiffs, their counsel, the NFL, and the
Magistrate Judge, ” Plaintiffs and the NFL reached a
settlement in April 2013. (Mem. and Order (Docket No. 270) at
2.) Following preliminary approval of the settlement,
Plaintiffs' attorneys moved for fees. The Court
instructed Plaintiffs' Lead Settlement Counsel to review
each application for attorneys' fees and recommend
specific fee amounts that should be awarded to each law firm.
(Id. at 15.) Plaintiffs' Lead Settlement Counsel
provided a detailed summary and recommendation. (Rec. on Fees
(Docket No. 293) at 1.) Stein and Ward objected to the
recommendation. (Objs. (Docket Nos. 350, 354) at 1.) After
granting final approval of the settlement, the Court referred
the motions for attorneys' fees to then-Chief Magistrate
Judge Boylan. (Mem. and Order (Docket No. 431) at 19.)
hearing on the motions for attorneys' fees in November
2013, Magistrate Judge Boylan awarded a total of $6, 200, 000
in attorneys' fees to seven different law
firms. (Order on Att'y Fees (Docket No. 458)
at 8.) Stein received $445, 000, Ward received $525, 000, and
Hausfeld received $650, 000. (Id. at 10.) Stein
objected to Magistrate Judge Boylan's Order arguing that
the fees allocated to Stein and Ward were too low.
(Stein's Obj. (Docket No. 492) at 4.) The Court overruled
those objections and affirmed Magistrate Judge Boylan's
Order. (Order (Docket No. 499) at 3.)
2015, the Eighth Circuit Court of Appeals affirmed the
approval of the final settlement. Marshall v. Nat'l
Football League, 787 F.3d 502 (8th Cir. 2015). The
Supreme Court denied certiorari in February 2016.
Marshall v. Nat'l Football League, 136 S.Ct.
1166 (2016) (mem.). In March 2016, the Court ordered the
attorneys' fees be distributed. (Order (Docket No. 645)
August 25, 2016, Ward and Stein filed their lawsuit against
Hausfeld in Minnesota state court. The complaint alleges that
Stein and Ward entered into an agreement with Hausfeld to
jointly represent Plaintiffs. (Atmore Aff. (Docket No. 665)
Ex. A. at ¶ VI.) It further alleges that the agreement
required Hausfeld to pay Stein and Ward 10% of the
attorneys' fees awarded in this case, and that Hausfeld
has failed to pay that amount. (Id. at ¶¶
XIX, XXIII.) Along with the breach-of-contract claim, Stein
and Ward's other claims include promissory estoppel,
unjust enrichment, quantum meruit, breach of fiduciary duty,
conversion, civil theft, and fraudulent misrepresentation.
(Id. at ¶¶ XXVII-LXXXVI.)
September 16, 2016, Hausfeld filed this Motion for Permanent
Injunction. Hausfeld argues that Stein and Ward are
attempting to relitigate in state court the Court's
allocation of attorneys' fees, and that the Court may
properly enjoin that proceeding under the “necessary in
aid of its jurisdiction” and “relitigation”
exceptions to the Anti-Injunction Act, 28 U.S.C. § 2283.
(Hausfeld's Mem. in Supp. (Docket No. 664) at 7-13.)
Anti-Injunction Act provides that “[a] court of the
United States may not grant an injunction to stay proceedings
in a State court except as expressly authorized by Act of
Congress, or where necessary in aid of its jurisdiction, or
to protect or effectuate its judgments.” 28 U.S.C.
§ 2283. The Act “is a necessary concomitant of the
Framers' decision to authorize, and Congress'
decision to implement, a dual system of federal and state
courts.” Chick Kam Choo v. Exxon Corp., 486
U.S. 140, 146 (1988). Preventing federal courts from
intervening in state court proceedings “is important to
make the dual system work effectively.” Id.
The three exceptions to the Anti-Injunction Act are
“narrow and are not to be enlarged by loose statutory
construction.” Smith v. Bayer Corp., 564 U.S.
299, 318 (2011) (quotation and citation omitted). In close
cases, any doubts about whether a federal court should enjoin
a state-court action “should be resolved in favor of
permitting the state courts to proceed.” Id.
(quotation and citation omitted).
The “Necessary In Aid of its Jurisdiction”
“necessary in aid of its jurisdiction” exception
to the Anti-Injunction Act applies when it may be
“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.”
Atlantic Coast Line R. Co. v. Bhd of Locomotive
Eng'rs, 398 U.S. 281, 295 (1970). The Eighth Circuit
limits this exception to in rem claims. Versacold USA,
Inc. v. Inland Am. Brooklyn Park Atlas, L.L.C., No.
09cv2669, 2009 WL 3617544, at *2 (D. Minn. Oct. 29, 2009)
(Doty, J.) (citing In re Fed. Skywalk Cases, 680
F.2d 1175, 1182-83 (8th Cir. 1982)); see also 17A
Charles Alan Wright & Arthur R. Miller, Federal
Practice & Procedure § 4225 (3d Ed. 2016)
(“The second exception to the 1948 revision of the
statute may be fairly read as incorporating this historical
in rem exception.”).
does not-and could not-argue that this case is an in rem
action. Instead, Hausfeld argues that because the Court has
exercised jurisdiction over this litigation for the past
seven years, the Court retains ancillary jurisdiction to
effectuate its decrees, including jurisdiction over
attorneys' fee disputes. (Hausfeld's Mem. in Supp. at
9-10.) Hausfeld cites Marino v. Pioneer Edsel Sales,
Inc., 349 F.3d 746 (4th Cir. 2003), and In re
Coordinated Pretrial Proceedings in Antibiotic Antitrust
Actions, 520 F.Supp. 635 (D. Minn. 1981), to support its
disputes in both of those cases, however, were between
attorneys and their clients who allegedly owed them fees.
See Marino, 349 F.3d at 753; In re Antibiotic
Antitrust Actions, 520 F.Supp. at 650. Stein and
Ward's claims are with co-counsel, not Plaintiffs or the
NFL. If Stein and Ward brought a state-court lawsuit seeking
more attorneys' fees against either of those parties, the
Court would retain jurisdiction over that dispute, because
that lawsuit would directly implicate the award of
attorneys' fees. But that is not what Stein and Ward have
done. They have merely sued their co-counsel for allegedly
breaching a ...