Opinion ID: 2503728
Heading Depth: 2
Heading Rank: 1

Heading: Ability to Sanction

Text: Appellants argue they should not have been sanctioned for the second removal because it was done in good faith. We disagree. Rule 11 states, The signature of an attorney or party constitutes a certificate by him that he has read the pleading, motion or other paper; that to the best of his knowledge, information and belief there is good ground to support it; and that it is not interposed for delay. 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 at 162. The sanctions may include: an order to pay the reasonable costs and attorneys' fees incurred by the party defending against the action brought in bad faith; a reasonable fine to be paid to the court; a reasonable monetary penalty to the party defending the action brought in bad faith; or a directive of a nonmonetary nature designed to deter the party or the party's attorney from bringing any future action in bad faith. Id. 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, [8] the rule still may be violated with a filing that is so patently without merit that no reasonable attorney could have a good faith belief in its propriety. We find such is the case here. Regarding the grounds for removal, first, it is clear that although Appellants cite different federal statutes to support their 2004 and 2010 removals, the underlying reason for both removals remains the sameAppellants' alleged defense under the HCQIA. The fact that they relied upon 2010 documents for their second removal does not change the reality that they were attempting to remove primarily because of their asserted defense under the HCQIA. Second, as Judge Houck noted, removal is based upon the claims alleged in the initial pleading. Dr. Wieters's complaint alleged a state law defamation claim, not a federal cause of action, and he never amended his pleading. As a defense, Appellants asserted the HCQIA provided absolute immunity from tort liability for defamation, and any reference Dr. Wieters's later made to the HCQIA was in response to that defense. Dr. Wieters simply asserted the HCQIA permitted the state law claim, meaning that it was not preempted or barred by the HCQIA, not that the HCQIA created an individual cause of action under which they were bringing the suit. Viewing all the pleadings and papers in context of each other and the lengthy history of this litigation, we find Appellants could not have formed a good faith belief the second removal was appropriate. We will not approve attorneys engaging in semantic games with the courts and allow artful crafting of new grounds for removal when no evidence exists to support a subjective belief that the plaintiff was asserting a federal cause of action. 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. [9] We want to make clear that we do not intend to chill a defendant's exercise of its removal rights, and we are cognizant that a defendant may remove a case up to the very minute before trial. We note that Appellants in this case are not being sanctioned for removing at the last minuteAppellants' behavior goes far beyond simply exercising their right to remove a case to federal court. A finding of vexatious removal should be rare, but the case before us is an extreme one, and the coalescence of all the facts merit appropriate sanctions. Therefore, we find Judge Baxley did not err in ordering sanctions against Appellants.