* Pursuant to 5TH CIR. R. 47.5, the Court has determined

that this opinion should not be published and is not precedent

except under the limited circumstances set forth in 5TH CIR. R.

47.5.4.

1

United States Court of Appeals

Fifth Circuit

FILED

June 21, 2005

Charles R. Fulbruge III

Clerk

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

 

No. 04-60835

Summary Calendar

 

WALTER H. GIBBES, JR.; MARGARET S. DOZIER,

Plaintiffs-Appellants,

versus

AMERISTAR CASINO VICKSBURG INC, Etc.; ET AL

Defendants

AMERISTAR CASINO VICKSBURG INC, A Nevada Corporation

Defendant-Appellee.

--------------------

Appeal from the United States District Court

for the Southern District of Mississippi, Jackson

3:99-CV-911-WS

--------------------

Before WIENER, BENAVIDES, and STEWART, Circuit Judges.

BENAVIDES, Circuit Judge:*

 Plaintiffs-Appellants Walter H. Gibbes, Jr. (“Gibbes”) and

Margaret S. Dozier (“Dozier”) filed a complaint in Mississippi

state court on November 22, 1999 alleging Mississippi state law

claims against Defendants Ameristar Casinos, Inc. (“Ameristar”),

Harrah’s Vicksburg Corporation (“Harrah’s”), Isle of Capri
2

Casinos, Inc. (“Isle of Capri”) and Deposit Guaranty National

Bank. Gibbes and Dozier owned interests in real property on the

Big Black River, between Vicksburg and Jackson, Mississippi, on

which Horseshoe Gaming, Inc. proposed the building of a casino

and an associated racetrack. Ameristar, Harrah’s and Isle of

Capri all had existing casinos in Vicksburg, and they worked

together to successfully convince the Mississippi Gaming

Commission to deny a license for the proposed casino. Gibbes and

Dozier alleged that the actions taken by Ameristar, Harrah’s and

Isle of Capri to oppose the new casino were tortious under

Mississippi law. Gibbes and Dozier asserted that they would have

received substantial economic benefits if the Gaming Commission

had approved Horseshoe Gaming, Inc.’s application.

After Isle of Capri settled with the Plaintiffs, the

remaining Defendants removed this action to the United States

District Court for the Southern District of Mississippi.

Gibbes and Dozier brought their claims against the

Defendants only after a neighboring landowner, E.L. Pennebaker,

Jr. (“Pennebaker”), used the same theory – that it was tortious

under Mississippi law for the Defendants to work together to

oppose the approval of the proposed Big Black River casino – to

win a multi-million dollar jury verdict against Ameristar and

Harrah’s. While Gibbes and Dozier’s suit against the Defendants

was pending, Ameristar and Harrah’s appealed the judgment that
1 Because Isle of Capri and Deposit Guaranty National Bank

settled with the plaintiffs in Pennebaker, only Ameristar and

Harrah’s appealed the trial court judgment in that case to the

Mississippi Supreme Court.

2 The Noerr-Pennington doctrine, which is grounded in the

First Amendment right to petition the government, provides that

parties who petition the government for governmental action

favorable to them cannot be prosecuted under the antitrust laws

even though their petitions are motivated by anticompetitive

intent. The doctrine has its origins in two U.S. Supreme Court

cases: Eastern Railroad Presidents Conference v. Noerr Motor

Freight, Inc., 365 U.S. 127 (1961) and United Mine Workers of

America v. Pennington, 381 U.S. 657 (1965). 

3

Pennebaker won against them to the Mississippi Supreme Court.1

The Mississippi Supreme Court reversed the judgment against

Ameristar and Harrah’s, concluding that the Noerr-Pennington2

doctrine protected their efforts to lobby the Gaming Commission

to deny the approval of the Big Black River Casino. Harrah’s

Vicksburg Corp. v. Pennebaker, 812 So. 2d 163 (Miss. 2001). 

Accordingly, the court determined that all state law claims

asserted against Ameristar and Harrah’s were barred as a matter

of law. Id. at 174. 

After the Mississippi Supreme Court found in favor of 

Ameristar and Harrah’s in Pennebaker, Neville H. Boschert,

counsel for Ameristar, wrote letters to Wayne Dowdy, counsel for

Gibbes and Dozier, on May 10, 2002 and August 12, 2002,

requesting that he dismiss this action with prejudice. On August

20, 2002, Dowdy responded to Boschert’s request by stating that

he intended to proceed with the case. 
4

On September 20, 2002, Ameristar served, but in accordance

with Rule 11 of the Federal Rules of Civil Procedure did not

file, a Motion for Sanctions and Award of Attorneys’ Fees. 

Ameristar’s Motion was based on the ruling of the Mississippi

Supreme Court in Pennebaker, which barred state law claims

identical to the ones brought by Gibbes and Dozier, as discussed

supra. 

On November 5, 2002, Ameristar and Harrah’s filed a Motion

for Summary Judgment, which the district court orally granted

after hearing argument from counsel on December 10, 2002. On

March 26, 2003, the district court entered a Memorandum Opinion

and Order and separate Final Judgment in favor of Defendants.

On April 9, 2003, Ameristar filed its Motion for Sanctions

and Award of Attorneys’ Fees. On September 2, 2004, the district

court entered its Memorandum Opinion and Order granting

Ameristar’s Motion for Sanctions and awarding Ameristar fees and

expenses in the amount of $10,089.10. 

Gibbes and Dozier appeal only this sanctions ruling. They

do not appeal the entry of summary judgment in this case.

STANDARD OF REVIEW

We review the district court’s imposition of sanctions

pursuant to Rule 11 for abuse of discretion. Whitehead v. Food

Max of Mississippi, Inc., 332 F.3d 796, 802-03 (5th Cir. 2003)(en

banc). 
5

DISCUSSION

Appellants contend that the district court abused its

discretion by sanctioning them, pursuant to Rule 11, for failing

to withdraw their complaint in light of the Mississippi Supreme

Court’s decision in Pennebaker. Appellants assert that the

district court should not have sanctioned them because Mr. Dowdy,

counsel for Gibbes and Dozier, believed that case law supported

the position that the federal district court in this case was not

bound by the Mississippi Supreme Court’s interpretation of the

Noerr-Pennington doctrine, which is a matter of federal law. 

The district court found Appellants’ contention that the federal

courts are not bound by the Mississippi Supreme Court’s ruling in

Pennebaker to be unavailing because it was not supported by

existing law. We agree.

A federal court, in the exercise of its diversity

jurisdiction, is required to apply the substantive law of the

state in which it is sitting. See Erie R.R. Co. v. Tompkins, 304

U.S. 64 (1937). Thus, the district court in this case of wholly

state law claims was bound by the Mississippi Supreme Court’s

decision in Pennebaker. In Pennebaker, the Mississippi Supreme

Court concluded that claims identical to and based upon the same

operative facts as those asserted in the instant action were

barred by the Noerr-Pennington doctrine as a matter of

Mississippi state law. Pennebaker, 812 So. 2d at 174.
6

The district court further found that the doctrine of

collateral estoppel applies to preclude the issues in the instant

case from being litigated again. The Pennebaker court’s decision

has fully and finally determined that all the issues present in

the instant case are barred by the Noerr-Pennington doctrine as a

matter of Mississippi state law.

In sum, the district court found that it was clear, based on

the foregoing principles of law in effect at the time of the

Pennebaker decision, that the Appellants’ legal contentions given

as the basis for refusing to dismiss this case were not warranted

by existing law. Accordingly, the district court concluded that

Appellants’ behavior violated Rule 11 and that sanctions were

appropriate.

We agree with the district court. Gibbes and Dozier were

given ample opportunity to dismiss this case in light of the

decision in Pennebaker and they refused to do so. This was

unreasonable and not supported by any authority. Under these

circumstances, we find that the district court did not abuse its

discretion by imposing Rule 11 sanctions in the amount of

$10,089.10.

CONCLUSION

For the foregoing reasons, the order of the district court

is in all ways AFFIRMED.