UNITED STATES of America, Plaintiff-Appellee, v. Steven A. SCHURKMAN, in his capacity as Trustee of the Jacob Manne Irrevocable Trust, John Doe, in his capacity as the Representative of the Estate of Jacob Manne, Guardian Joseph S. Manne, Defendants, Joseph S. Manne, Defendant-Appellant.
Docket No. 12-3079-CV.
United States Court of Appeals, Second Circuit.
Argued: May 31, 2013. Decided: Aug. 27, 2013.
CONCLUSION
We have considered all of Tarbell‘s arguments on appeal and find them to be without merit. We conclude that:
- Inasmuch as the District Court did not refer to defendant‘s separate cooperation agreement at his plea hearing, it did not commit “plain error,” where his plea agreement did not depend on the cooperation agreement.
- The government did not breach its cooperation agreement with defendant.
- We dismiss Tarbell‘s ineffective assistance claims, without prejudice to the filing, in due course, of a
§ 2255 petition.
For these reasons, we AFFIRM the July 16, 2012 judgment of conviction of the District Court.
* The Clerk of Court is respectfully directed to amend the caption to conform to the above.
Ambrose Richardson, A.M. Richardson, P.C., New York, NY, for Defendant-Appellant.
Before: HALL and LYNCH, Circuit Judges, and ENGELMAYER, District Judge.†
HALL, Circuit Judge:
This appeal presents the issue of whether a district court, under the All Writs Act,
BACKGROUND
In October 2000, after receiving reports of contaminated wells in East Fishkill, Dutchess County, New York, the Environmental Protection Agency (“EPA“) and the New York State Department of Environmental Conservation identified as the primary source of the contamination a septic tank at a site in East Fishkill owned by Jacob Manne, appellant Joseph S. Manne‘s father.1 EPA later discovered a buried acid waste pit on the site that contained lead, perchloroethene, and other hazardous substances.
In February 2001, after incurring significant costs in cleaning up and removing contaminated soil from the site, EPA forwarded a Notice of Potential Liability and Request for Information informing Jacob Manne that EPA considered him a potentially liable party for the response costs incurred in the cleanup. Following Jacob Manne‘s death, the United States brought an action against appellant Joseph S. Manne, in his capacity as trustee of the Jacob Manne Irrevocable Trust (the “Trust“), a trust created and funded by Jacob Manne, and against Steven A. Schurkman, in his capacity as representative for the Estate of Jacob Manne. The United States alleged that shortly after receiving the notice, Jacob Manne had created the Trust, appointed Schurkman as Trustee, and fraudulently transferred cash and real property into the Trust. These assets were subsequently transferred to Joseph S. Manne, the Trust‘s principal beneficiary.
The United States sought reimbursement of approximately $1.5 million in response costs incurred under sections 104 and 107 of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980,
In 2010, the parties reached a settlement, embodied in a Consent Decree which the district court approved in July 2010. Under the terms of the Consent Decreе, Manne2 agreed to pay the United States an amount equal to the appraised value of certain property which had been transferred by Jacob Manne into the Trust (the “Property“).3 The appraised value of the Property was to be determined by an appraiser selected by the parties. Pursuant to the Consent Decree, the United States would provide a list of at least three appraisers, from which defendants would choose one. The United States would then retain the appraiser to prepare an appraisal report of the Property within six months of the date the appraiser was selected. The parties agreed that “[t]he Appraised Value of the Property as determined by the Selected Appraiser shall be unreviewable by any Party to this Consent Decree or by the Court.” Consent Decree ¶ 8.
In exchange for payment of the Property‘s appraised value, the United States provided defendants with a covenant not to sue or to take administrative action against Manne and ND-4 pursuant to
The parties expressly contemplated the approval and enforcement of the Consent Decree by the district court:
The United States and Settling Defendants agree, and this Court by entering this Consent Decree finds, that this Consent Decree has been negotiated by the Parties in good faith, that settlement of this matter will avoid prolonged and complicated litigation between the Parties, and that this Consent Decree is fair, reasonable, and in the public interest.
Id. ¶ (C). The Consent Decree provided that “[t]his Court shall retain jurisdiction over this matter for the purpose of interpreting and enforcing the terms of this Consent Decree,” id. ¶ 39, and that Manne and ND-4 “shall not challenge the terms of this Consent Decree or this Court‘s jurisdiction to enter and enforce this Consent Decree,” id. ¶ 1. Following a period of public notice and comment on the Consent Decree, during which no public comments were received, the district court approved and entered the Consent Decree.
In August 2010, the United States provided the names of three appraisеrs to defendants, who selected DeWan & Schott Appraisal Associates, LLC (“DeWan & Schott“). Following a visit to the Property, during which representatives from DeWan & Schott were accompanied by attorneys for Manne and the United States, the appraiser submitted an Appraisal Report. The Report noted that the appraiser took
The appraisers certified that the statements of fact in the Report were true and correct, that the appraisers were unbiased with respect to the Property and the pаrties involved, and that compensation for preparation of the Report was not contingent upon reaching a predetermined result. The appraisers represented that the Report was prepared in accordance with the Uniform Standards of Professional Appraisal Practice (“USPAP“), the Code of Professional Ethics, and the Standards of Professional Appraisal Practice of the Appraisal Institute. On January 13, 2011, in accordance with the terms of the Consent Decree, the district court entered judgment against Joseph S. Manne, in his capacity as the representative of the Estate of Jacob Manne, and ND-4, in the amount of $1,290,000 plus interest.
In July 2011, despite the Consent Decree‘s provision that the Property‘s appraised value shall be unreviewable, Manne filed a motion seeking to modify or vacate the judgment pursuant to
The district court denied the motion on the basis that the Consent Decree explicitly provided that the appraised value shall be “unreviewable.” The court noted that the Consent Decree had been negotiated at arms’ length and that there was no allegаtion that the appraisal was procured by fraud. Rather, Manne‘s objections to the Appraisal Report were, at bottom, criticisms of the appraisal methods employed by DeWan & Schott. This court affirmed the denial of Manne‘s motion. See United States v. Manne, 510 Fed.Appx. 83 (2d Cir. 2013).
After Manne appealed the district court‘s denial of his Rule 60(b) motion but before this court affirmed that order,
By letter dated May 23, 2012, the United States notified the district court of the filing of the state сourt action. The United States requested that the district court exercise its jurisdiction over the enforcement of the Consent Decree and enjoin the state court proceeding pursuant to its authority under the All Writs Act,
The district court rejected the government‘s argument that the issuance of an injunction was permitted under the so-called “relitigation” exception to the Anti-Injunction Act, which рermits a federal court to enjoin state proceedings where necessary “to protect or effectuate its judgments.”
However, finding that the “State Cоurt action in my view clearly interferes with this Court‘s exclusive jurisdiction over the Consent Decree,” the district court held that an injunction was permitted under the “in aid of jurisdiction” exception. The court noted that the Consent Decree granted to the district court jurisdiction over the interpretation and enforcement of the Consent Decree. The court opined that Manne, “after striking out in this court,” brought the state court suit asserting claims of fraud and negligent misrepresentation against the appraiser, thus seeking review of the adequacy of the appraiser‘s methods. Such a review, the court noted, is cleаrly disallowed by the Consent Decree‘s provision that the appraisal shall be “unreviewable.” The court continued:
And whether one dresses it up as mistake or as negligence or as gross negligence or even fraud, it‘s the same, which
is, it‘s asking a State Court to do what this Court should be doing, which is interpreting and applying and enforcing the Consent Decree, which includes issues having to do with the appraisal, and, of course, the Court will apply the Consent Decree that the parties negotiated with counsel and the Court so ordered back nearly two years ago.
Special App‘x 32. In the district court‘s view, any judgment issued in thе state court suit that awarded money to Manne “would in effect challenge or redo the appraisal” and “would frustrate the Consent Decree and would be inconsistent with [the] Court‘s exclusive jurisdiction over the enforcement of the Consent Decree.” Id. at 34. The district court thus granted the government‘s request for an injunction and issued an order “enjoin[ing] Defendants from litigating issues related to the Consent Decree in any court other than the Southern District of New York.” Special App‘x 2. This appeal followed.
DISCUSSION
The sole issue on appeal is whether the district court‘s injunction against the state court action wаs proper under the All Writs Act,
Given “the explicit wording” of the Anti-Injunction Act and “the fundamental principle of a dual system of courts,” “[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 fаshion to finally determine the controversy.” Atl. Coast Line R.R. Co. v. Bhd. of Locomotive Eng‘rs, 398 U.S. 281, 297, 90 S.Ct. 1739, 26 L.Ed.2d 234 (1970). Since the Anti-Injunction Act‘s prohibitory provision “rests on the fundamental constitutional independence of the States and their courts, the exceptions should not be enlarged by loose statutory construction.” Id. at 287, 90 S.Ct. 1739. “Proceedings in state courts[, thus,] 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 Supreme] Court.” Id.
In this case, the district court having held that an injunction was permitted under the “in aid of jurisdiction” exception to the Anti-Injunction Act, and the United States hаving expressly declined to challenge the court‘s ruling with respect to the relitigation exception, our review is limited solely to the applicability of the “in aid of jurisdiction” exception.
Congress amended the statute in 1948 to its present form by expressly incorporating three exceptions to the statute‘s prohibition against federal injunctions of state proceedings: where such an injunction is (1) expressly authorized by Act of Congress, (2) nеcessary in aid of the federal court‘s jurisdiction, or (3) to protect or effectuate the federal court‘s judgments.
The Supreme Court reversed, finding that the “in aid of jurisdiction” exception did not apply because the federal and state actions were each in personam. Id. at 641, 97 S.Ct. 2881. The Court noted:
The traditional notion is that in personam actions in federal and state court may proceed concurrently, without interference from either court, and there is no evidence that the exception to
§ 2283 was intended to alter this balance. We have never viewed parallel in personam actions as interfering with the jurisdiction of either court; as we stated in Kline v. Burke Construction Co., 260 U.S. 226, 230 [43 S.Ct. 79, 67 L.Ed. 226] (1922):“[A]n action brought to enforce [a personal liability] does not tend to impair or defeat the jurisdiction of the court in which a prior action for the same cause is pending. Each court is free to proceed in its own way and in its own time, without reference to the proceedings in the other court. Whenever a judgment is rendered in one of the courts and pleaded in the other, the effect of that judgment is to be determined by the application of the principles of res adjudicata ....”
Vendo Co., 433 U.S. at 641, 97 S.Ct. 2881 (alterations in original). The Court observed that the “in aid of jurisdiction” exception thus “may be fairly read as incorporating th[e] historical in rem excep-
We recently reaffirmed the prinсiple that the “in aid of jurisdiction” exception generally applies only where necessary to protect a federal court‘s jurisdiction over a res. See Wyly v. Weiss, 697 F.3d 131, 137-38 (2d Cir. 2012). In Wyly, we held that a district court could not invoke the “in aid of jurisdiction” exception to enjoin state proceedings, notwithstanding that a settlement agreement resolving the federal action provided that the federal district court would retain exclusive jurisdiction over enforcement of the settlement. Id. at 139. Wyly involved a class action, certified by the district court, in which the class asserted violations of securities laws against a defendant corporation. Following appointment of class counsel, the parties reached a settlement agreement, pursuant to which class counsel would receive as attorneys’ fees shares of common stock in the defendant corporation valued at $30 million to $40 million. Id. at 134-35. After holding a fairness hearing, at which no class member objected to the proposed settlement, this court approved the settlement and issued a judgment providing that both the settlement amount and the class counsel fee provision were fair and reasonable. The judgment also provided that the district court would retain exclusive jurisdiction “over the parties and the Settlement Class Members for all matters relating to th[ese] Actions.” Id. at 135 (alteration in original).
Months after the settlement was approved, after revelation that certain material had been improperly withheld by the defendant corporation during discovery, class members requested that class counsel move to vacate the judgment that approved the settlement pursuant to
On appeal, this court held that the “in aid of jurisdiction” exception did not authorize the federal court to enjoin the state malpractice suit. We reiterated that the exception “is generally reserved for state court actions in rem, because the state court‘s exercise of jurisdiction ‘necessarily impairs, and may, defeat,’ the federal court‘s jurisdiction over the res.” Id. at 137-38 (quoting Kline v. Burke Constr. Co., 260 U.S. 226, 229 (1922)). Because “an in personam action involves a controversy over liability rather than over possession of a thing[,] ... an in personam action generally does not tend to impair or defeat the jurisdiction of the court in which a prior action for the same cause is pending.” Id. at 138 (internal quotation marks omitted).
We have recognized a limited exception to the general rule that the “in aid of jurisdiction” exception does not permit a federal court to enjoin a parallel in personam action. See In re Baldwin-United Corp., 770 F.2d 328, 337 (2d Cir. 1985). In Baldwin-United, we held that injunction of an in personam action was justified where “the district court had before it a class action proceeding so far advanced that it was the virtual equivalent of a res over which the district judge required full control.” Id. at 337. In crafting that exception, however, we relied on the exceptional circumstances of that case—the
The circumstances in Baldwin-United—litigation consisting of consolidated multidistrict class actions which, following two years of settlement negotiations brokered by the district court, was in the final stages of settlement at the time the state court suit is filed—are absent from this case, see Wyly, 697 F.3d at 138; Baldwin-United, 770 F.2d at 338, and this single-district, non-class action is easily distinguished from that one. Moreover, we recognized in Baldwin-United that, were the circumstances such that the remaining eight defendants were no longer likely to settle, “the situation would fall within the Kline v. Burke Construction Co. rule that in personam proceedings in state court cannot be enjoined merely because they are duplicative of actions being heard in federal court.” Id. Because circumstances similar to those in Baldwin-United are absent here, we are bound to apply the general rule that an in personam state court action may not be enjoined merely because it is duplicative of, or conflicts with, a prior federal judgment. In accord with the principle that exceptions to the Anti-Injunction Act “should not bе enlarged by loose statutory construction,” Atl. Coast Line R.R. Co., 398 U.S. at 287, 90 S.Ct. 1739, we decline to extend the holding of Baldwin-United beyond the exceptional circumstances of that case.4
The United States maintains that this case falls within the limited exception described in Baldwin-United because, were Manne to prevail on his fraud and negligence claims and obtain a judgment against the appraisers in state court, that judgment would impermissibly conflict with the district court‘s denial of Manne‘s Rule 60(b) motion. The district court agreed, holding that any judgment that awarded money damages to Manne in the state court suit “would in effect challenge or redo the appraisal” and “would frustrate the Consent Decree and ... be inconsistent with [the] Court‘s exclusive jurisdiction over the enforcemеnt of the Consent Decree.” Special App‘x 34. The possibility that a potential judgment in a subsequent state court suit might conflict with a prior federal judgment, however, is not a basis to enjoin the state court suit. As this Court has recently recognized, “a court does not usually get to dictate to
We have no reason to believe that any judgment Manne obtains in state court would not peaceably coexist with thе district court‘s judgment approving the Consent Decree. The Consent Decree and the judgment approving it are, together, an explication of the rights and obligations of Manne and ND-4 vis-à-vis the United States; the appraiser is not a party to the Consent Decree.5 Any money judgment that Manne might win in state court against the appraiser, therefore, can have no effect on the appraisal value already determined according to the terms of the Consent Decree. Manne‘s obligation to remit to the United States the full amount of that appraisal value as dictated by the Consent Decree and confirmed by this court persists unaffected.
CONCLUSION
The district court erred by relying on the “in aid of jurisdiction” exception to the Anti-Injunction Act in enjoining Manne‘s state court suit. The injunction is VACATED.
PETER W. HALL
UNITED STATES CIRCUIT JUDGE