Unpublished Dispositionin Re National Association for the Advancement of Coloredpeople, Special Contribution Fund, Plaintiff,thomas I. Atkins, Defendant,robert A. Reed, Iii, et al., Plaintiffs,james A. Rhodes, et al., Defendants,national Association for the Advancement of Colored People,special Contribution Fund, Non-party Appellant, v. Thomas I. Atkins, Non-party Appellee, 849 F.2d 1473 (6th Cir. 1988)

Non-party appellant National Association for the Advancement of Colored People--Special Contribution Fund ("the Association") appeals an order enjoining it from prosecuting a lawsuit against appellee Thomas Atkins, its former attorney, in the district court for the Western District of Missouri, and an order reaffirming the district court's previous award of attorneys' fees in these consolidated appeals. Because the district court acted without personal jurisdiction, the orders appealed from are vacated.

The underlying action was commenced in December 1973 and involved the desegregation of the Cleveland, Ohio, Public Schools System ("the Ohio action"). Ultimately, the district court found that the defendants had created and maintained a system of public schools which were de jure segregated, and that plaintiffs were entitled to remedial relief. See Reed v. Rhodes, 422 F. Supp. 708 (N.D. Ohio 1976). Following the conclusion of the various appeals related to the liability and remedial findings and orders below, the district court issued judgments awarding attorneys' fees and costs to the prevailing party plaintiffs.

On February 20, 1987, the Association brought an action against Atkins and three other individual defendants, all of whom had previously provided legal representation to the Association, for the recovery of attorneys' fees received and personally retained by the defendants in various civil rights actions. That action, styled National Association for the Advancement of Colored People--Special Contribution Fund v. Thomas I. Atkins, et al., Docket No. 87-0156-CV-W-6 ("the Missouri action"), is currently pending in the United States District Court for the Western District of Missouri.

In the Missouri action, the Association claims that the defendants had a contractual duty and obligation to remit to it the attorneys' fees in question. As to Thomas I. Atkins ("Atkins"), the Association seeks to recover attorneys' fees he retained from fee awards granted by four federal district courts in civil rights actions, in addition to the fees Atkins received in the Ohio action.

On March 3, 1987, Atkins filed with the Ohio district court a "Motion to Enjoin The Prosecution Pending Determination" which requested the court to preliminarily enjoin the Association from prosecuting its action against Atkins in Missouri insofar as it involved the attorneys' fee award Atkins received from his participation in the Ohio action. On March 4, 1987, the district court granted Atkins a temporary restraining order enjoining the prosecution of the action in Missouri. Following a hearing on the motion to enjoin, at which the Association "specially appeared" solely to contest the court's jurisdiction to entertain the motion for injunctive relief, the district court entered on March 24, 1987, a preliminary injunction enjoining the Association from prosecuting its action against Atkins in Missouri. On April 10, 1987, the Association filed its notice of appeal from the March 24, 1987, preliminary injunction, herein No. 87-3366.

The record clearly reflects, as appellee Atkins concedes, that neither the National Association for the Advancement of Colored People nor its Special Contribution Fund were at any time parties to the litigation commenced in December 1973 in the United States District Court for the Northern District of Ohio ("the Ohio action"). Moreover, service of process has never been perfected in the court below upon either the National Association for the Advancement of Colored People or its Special Contribution Fund.

On April 7, 1987, the district court entered a scheduling order requiring the Association to present any claims it had concerning the court's earlier fee awards. No request was made to the district court for either reconsideration or stay of the scheduling order, nor was a stay sought in either the district court or this court of the March 24, 1987, preliminary injunction. Instead, the Association treated the scheduling order as an invalid assumption of either personal or subject matter jurisdiction.

On May 14, 1987, Atkins filed a "Motion to Affirm Judgment Under Rule 60" in the Ohio district court wherein he requested the court to issue "findings and conclusions under Rule 60" and to "reaffirm" the validity of the court's previous orders awarding attorneys' fees. The Association filed no response to the motion.

On June 16, 1987, the district court entered its order finding that the Association, by failing to submit its claims by the date set forth in the scheduling order, had abandoned its claims for the attorneys' fees previously awarded to Atkins. The court also vacated the March 24, 1987, preliminary injunction, reaffirmed its earlier judgment awarding fees, "pursuant to Rule 60," and directed Atkins to submit his application for attorneys' fees and/or costs related to the instant proceedings, which attorneys' fees and costs were to be taxed against the Association. On July 1, 1987, the Association filed a notice of appeal from the June 16, 1987, order, herein No. 87-3673.

On July 3, 1987, Atkins submitted to this court a motion to dismiss as moot the Association's appeal from the March 24, 1987, preliminary injunction below, arguing that the order of June 16, 1987, vacating the preliminary injunction rendered that appeal moot. Subsequently, the district court entered an order awarding Atkins attorneys' fees and costs for prevailing in the instant controversy.

Accordingly, there are several issues before the court: (1) whether the appeal from the March 24, 1987, preliminary injunction was rendered moot by the subsequent order vacating the injunction; (2) whether the district court acted without personal jurisdiction; (3) whether the district court acted without subject matter jurisdiction; (4) whether the district court abused its discretion in granting injunctive relief; (5) whether the district court abused its discretion in granting the "Rule 60 motion to affirm"; and (6) whether the district court abused its discretion in awarding Atkins attorneys' fees as a prevailing party in the instant controversy.

It is undisputed in the action below (the Ohio action) that the Association was, at all times pertinent, not a named party, had never been denominated a party-plaintiff, and never had summons issued to or served upon it. Atkins merely mailed copies of the motions in question to the Association. Moreover, by "specially appearing" before the district court only to contest the court's jurisdiction to entertain the motion for injunctive relief, the Association did not voluntarily submit itself to the court's general jurisdiction. Thus, the Association contends that the district court acted without personal jurisdiction over it. We agree.

It is elementary that without in personam jurisdiction, a court has no power to adjudicate a claim or obligation of that person. See, e.g., Vanderbilt v. Vanderbilt, 354 U.S. 416 (1957); Pennoyer v. Neff, 95 U.S. 714 (1878). An in personam judgment, whether in equity or at law, is invalid and unenforceable against a defendant unless the court entering the judgment has in personam jurisdiction. See Zenith Radio Corp. v. Hazeltine Research, Inc., 395 U.S. 100, 110 (1969); Regal Knitwear Co. v. NLRB, 324 U.S. 9 (1945). If a court acts without personal jurisdiction, any judgment or order it renders is null and void. See Stoll v. Gottlieb, 305 U.S. 165, 176 (1938).

The Association contends that the district court's injunctive order is void and without effect because the Association was not a party to the Ohio action. In Alemite Mfg. Corp. v. Staff, 42 F.2d 832 (2d Cir. 1930), the court stated the general rule that

no court can make a decree which will bind any one but a party; a court of equity is as much so limited as a court of law; it cannot lawfully enjoin the world at large, no matter how broadly it words its decree. If it assumes to do so, the decree is pro tanto brutum fulmen, and the persons enjoined are freed to ignore it.

Id. at 832; see also Kean v. Hurley, 179 F.2d 888, 890 (8th Cir. 1950).

Moreover, as the Supreme Court has recently reiterated:

Before a federal court may exercise personal jurisdiction over a defendant, the procedural requirement of service of summons must be satisfied. " [S]ervice of summons is the procedure by which a court having venue and jurisdiction of the subject matter of the suit asserts jurisdiction over the person of the party served."

Omni Capital Int'l v. Rudolph Wolff and Co., 108 S. Ct. 404, 409 (1987) (quoting Mississippi Publishing Corp. v. Murphree, 326 U.S. 438, 444-45 (1946)). The Court concluded that "before a court may exercise personal jurisdiction over a defendant, there must be more than notice to the defendant and a constitutionally sufficient relationship between the defendant and the forum. There also must be a basis for the defendant's amenability to service of summons." Omni Capital, 108 S. Ct. at 409 (emphasis supplied).

The mere mailing of pleadings to a party is not an adequate substitute for service of process. Rule 4 of the Federal Rules of Civil Procedure mandates that a summons must issue from the court and be served upon the party. In this case, Atkins simply mailed copies of his motions to the Association. Under these circumstances, such was inadequate to effectuate service of process. Omni Capital, 108 S. Ct. at 409. See Heyman v. Kline, 444 F.2d 65 (2d Cir. 1971) (when a defendant's wife was named in the order, but was never served with process, she was not bound by the order).

In Zenith Radio, supra, as in the present case, the district court purported to assert personal jurisdiction over a non-party entity because of its relationship to a named party even though the entity had not been made a party by way of service of process nor voluntarily submitting to the general jurisdiction of the court. For the purposes of the litigation in Zenith Radio, the parties had stipulated that the entity and one of the parties could be considered one and the same. The district court held that this stipulation allowed it to exercise personal jurisdiction over the entity.

The Supreme Court disagreed, holding that the stipulation, to which the entity had never agreed, was insufficient to confer personal jurisdiction absent service of process. The Court held:

It is elementary that one is not bound by a judgment in personam resulting from litigation in which he is not designated as a party or to which he has not been made a party by service of process. The consistent constitutional rule has been that a court has no power to adjudicate a personal claim or obligation unless it has jurisdiction over the person of the defendant.

Zenith Radio, 395 U.S. at 110 (citations omitted). Moreover, the Court held that the stipulation was an inadequate substitute for the normal methods of attaining jurisdiction over a person or corporation. Thus, the Court made it clear in Zenith Radio that service of process or an acceptable alternative is a prerequisite to a court's exercising personal jurisdiction over an individual or entity.

One means through which a court can exercise personal jurisdiction over a non-party is through its "inherent jurisdiction to preserve [its] ability to render judgment" and "make a binding adjudication between the parties properly before it." United States v. Hall, 472 F.2d 261, 265 (5th Cir. 1972). See also Kasper v. Brittain, 245 F.2d 92 (6th Cir.), cert. denied, 355 U.S. 834 (1957). A federal court may properly exercise its inherent jurisdiction and enjoin a non-party if his actions would disturb "in any way the adjudication of rights and obligations as between the original plaintiffs and defendants." Hall, 472 F.2d at 265. However, if the actions of the non-party would not upset either the plaintiff's rights or the defendant's duty to perform, then the court has no jurisdiction over the non-party.

In the present case, the actions of the National Association for the Advancement of Colored People--Special Contribution Fund in prosecuting its Missouri action do not in any way disturb the rights and duties established in the Ohio district court's desegregation orders. The actions of the Association are not in any way disturbing the plaintiffs' rights in the Ohio litigation, as it is obviously not hindering or obstructing the ordered desegregation. Moreover, the Association is not disturbing nor infringing upon the school board's duty to integrate the Cleveland, Ohio, Public Schools System, and the litigation in Missouri is not in any way contesting the duty of the Cleveland Public Schools System to pay the attorneys' fees of the prevailing plaintiffs. Therefore, as the action in Missouri does not in any way impair or disturb the rights or obligations of the parties in the Ohio desegregation litigation, the district court acted without personal jurisdiction over the Association, a non-party.¹ 

Rule 65(d) of the Federal Rules of Civil Procedure also provides certain circumstances under which a non-party may be bound by an injunctive order. The Rule states in relevant part:

Every order granting an injunction and every restraining order shall set forth the reasons for its issuance; shall be specific in terms; shall describe in reasonable detail, and not by reference to the complaint or other document, the act or acts sought to be restrained; and is binding only upon the parties to the action, their officers, agents, servants, employees, and attorneys, and upon those persons in active concert or participation with them who receive actual notice of the order by personal service or otherwise.

Fed. R. Civ. P. 65(d) (emphasis supplied). However, the Court held in Zenith Radio that mere service of the preliminary injunction order pursuant to Rule 65(d) did not confer jurisdiction:

Although injunctions issued by federal courts bind not only the parties defendant in a suit, but also those persons "in active concert or participation with them who receive actual notice of the order by personal service or otherwise," a non-party with notice cannot be held in contempt until shown to be in concert or participation. It was error to enter the injunction against [the non-party] without having made this determination in the proceeding to which [the non-party] was a party.

Zenith Radio, 395 U.S. at 112 (quoting Fed. R. Civ. P. 65(d)). Therefore, the Court made it clear that a non-party is not bound by an injunction pursuant to Rule 65 until a finding is made in a proceeding in which it is a party that the requisites are indeed present. As no such proceeding occurred here, Rule 65 cannot be used as a vehicle for asserting jurisdiction in the present case.

As the district court acted without having obtained in personam jurisdiction over the National Association for the Advancement of Colored People--Special Contribution Fund, its preliminary injunction of March 24, 1987, and all of its subsequent orders entered pursuant to Atkins' motions, being null and void, are VACATED.²