Unpublished Disposition, 875 F.2d 318 (9th Cir. 1985)

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U.S. Court of Appeals for the Ninth Circuit - 875 F.2d 318 (9th Cir. 1985)

Carol S. LANDI, Plaintiff-Appellant,v.TICOR TITLE INSURANCE COMPANY; Chicago Title InsuranceCompany; Tri-Pacific Lending Corporation, aCalifornia corporation; Santa ClaraSavings & Loan Association, etal., Defendants-Appellees.Carol S. LANDI, Plaintiff-Appellant,v.TICOR TITLE INS. CO., et al.; John C. Chasuk; Alfred P.Chasuk, Defendants-Appellees.Carol S. LANDI; Kathryn M. Alves; Myrna D. Thomsen; C.T.Kiely; R.G. Alberton; William D. Rippy; AlfredL. Rosby; Class of Land Owners in theState of California, et al.,Plaintiffs-Appellants,v.TICOR TITLE INSURANCE COMPANY; Chicago Title InsuranceCompany; California Trust Deeds, Inc.; Tri-Pacific LendingCorporation, a California corporation; Santa Clara Savings& Loan Association, et al., Defendants-Appellees.

Nos. 86-1563, 86-1745 and 86-1778.

United States Court of Appeals, Ninth Circuit.

Submitted*  April 13, 1989.Decided May 18, 1989.

Before CHOY, WIGGINS and KOZINSKI, Circuit Judges.


MEMORANDUM** 

This case involves three consolidated appeals by Carol Landi, Myrna Thomsen, Carmel Kelly, Alfred Rosby, William Rippy, and Kathryn Alves (collectively "Appellants"). Appellants' original action was dismissed for failure to state a claim upon which relief could be granted. Rather than appealing from that dismissal, Appellants subsequently filed the identical claim in three different district courts. The governmental and private defendants contend that the three subsequent actions are barred by res judicata. Additionally, the private defendants ("Appellees") seek an award of sanctions for this frivolous appeal. We affirm and award attorneys' fees and double costs to Appellees.

BACKGROUND

The appeals in these consolidated cases arise out of four separate actions filed by Appellants; two actions in the District Court for the Northern District of California and two actions in the District Court for the Eastern District of California. On September 12, 1985, Appellants filed a complaint in the District Court for the Northern District of California (the "First Action"). The complaint listed a multitude of defendants and alleged claims under the Racketeering Influence and Corrupt Organization Act (RICO), 18 U.S.C. §§ 1961-1968 (1982 & Supp.V 1987), the Hobbs Act, 18 U.S.C. § 1951 (1982), and the Civil Rights Act, 42 U.S.C. §§ 1981-1983, 1985-1986 (1982).

On October 22, 1985, Judge Schwarzer dismissed and struck the complaint pursuant to Fed. R. Civ. P. 12(b) (6) and 12(f). Judge Schwarzer granted Appellants 20 days leave to amend. Appellants subsequently filed both a first and second amended complaint. On November 19, 1985, Judge Schwarzer entered an order dismissing the amended complaint with prejudice for failure to state a claim. Appellants did not appeal the judgment in the First Action.

On November 26 and 27, 1985, Appellants filed identical copies of a complaint in three district courts: (1) on November 26, in the District Court for the Eastern District of California in Fresno; (2) on November 27, in the District Court for the Northern District of California; and (3) on November 27, in the District Court for the Eastern District of California in Sacramento. The complaints were virtual copies of the second amended complaint filed in the First Action. All three actions were subsequently dismissed and Appellants timely appealed. We have jurisdiction under 28 U.S.C. § 1291 (1982).

DISCUSSION

Appellants challenge the dismissal of their First Action. Appellants assert that Judge Schwarzer applied an incorrect standard in evaluating the sufficiency of their complaint. Appellants, however, did not file an appeal in the First Action. Therefore, Appellants may not complain to this court of any errors committed by Judge Schwarzer in dismissing that action.

Appellees argue that the dismissal in the First Action operates as res judicata to bar the three subsequent actions filed by Appellants. "The dismissal for failure to state a claim under Federal Rule of Civil Procedure 12(b) (6) is a 'judgment on the merits.' " Federated Dep't Stores v. Moitie, 452 U.S. 394, 399 n. 3 (1981). A judgment on the merits of an action precludes the parties from relitigating issues that were or could have been raised in that action. " 'A judgment merely voidable because based upon an erroneous view of the law is not open to collateral attack, but can be corrected only by direct review and not by bringing another action upon the same cause [of action].' " Id. at 398 (quoting Baltimore S.S. Co. v. Phillips, 274 U.S. 316, 325 (1927)).

Since Appellants' three subsequent complaints were virtually identical to the second amended complaint found insufficient in the First Action, we affirm the dismissals on the basis of res judicata. Appellants chose not to seek direct review of the dismissal in the First Action and may not attack it collaterally.1 

In dismissing Appellants' second action, Judge Schwarzer also entered an order limiting future filings by Appellants. Appellants contend that this order violates their due process rights. We recognize, however, that courts have inherent power to restrict future litigation by plaintiffs who continually engage in baseless litigation. See Hanson v. Goodwin, 432 F. Supp. 853, 858 (W.D. Wash. 1977) (enjoining "plaintiffs [who] repeatedly raise issues which are barred by res judicata" and who ignore the appeal process from filing future suits raising the same issues).

Appellants argue that the monetary sanctions imposed against appellant Alves in the Fresno action and the judgments of dismissal in each of these actions are invalid because she filed a bankruptcy petition on May 5, 1985. Appellants argue that the judgments and sanctions violate the automatic stay. The automatic stay, however, operates only against "the commencement or continuation ... of a judicial ... proceeding against the debtor...." 11 U.S.C. § 362(a) (1) (Supp.V 1987) (emphasis added). Actions by Alves as a plaintiff are not stayed. See Boone v. Beacon Bldg. Corp., 613 F. Supp. 1151, 1155 (D.N.J. 1985) ("As we understand the automatic stay provision of the Bankruptcy Act, it only operates in actions where the petitioner is in a defensive posture.") (emphasis in original).

Finally, Appellees seek an award of attorneys' fees and double costs as a sanction under Fed. R. App. P. 38 for Appellants' pursuit of a frivolous appeal. "An appeal is frivolous if the result is obvious, or the arguments of error are wholly without merit." DeWitt v. Western Pacific R.R. Co., 719 F.2d 1448, 1451 (9th Cir. 1983). Rule 38 sanctions may be awarded even when the appellant appears pro se. Ryan v. Bilby, 764 F.2d 1325, 1328-29 (9th Cir. 1985). Appellants are experienced pro se litigants. The res judicata effect of the dismissal in the First Action made the result of this appeal obvious. Moreover, Appellants' arguments are wholly without merit. We therefore award attorneys' fees and double costs to Appellees.

CONCLUSION

We affirm the judgments below. Appellants failed to appeal the dismissal of their First Action. They are barred by principles of res judicata from relitigating those issues in the subsequent actions. Furthermore, we award attorneys' fees and double costs to Appellees as a sanction for this frivolous appeal. Appellees have 14 days to submit an application for attorneys' fees incurred in defending this appeal. Appellants will then have 14 days to respond.

AFFIRMED.

 *

The panel finds this case appropriate for submission without argument pursuant to Fed. R. App. P. 34(a) and 9th Cir.R. 34-4

 **

This disposition is not appropriate for publication and may not be cited to or by the courts of this circuit except as provided by 9th Cir.R. 36-3

 1

Appellants contend that the dismissal of their second action in the district court for the Northern District of California is void because Judge Schwarzer was named as a defendant in that action. We disagree. Since Judge Schwarzer had presided over Appellants' First Action, the second action was also assigned to him. A " 'judge is not disqualifiefd merely because a litigant sues or threatens to sue him.' Such an easy method for obtaining disqualification should not be encouraged or allowed." Ronwin v. State Bar of Arizona, 686 F.2d 692, 701 (9th Cir. 1981) (citation omitted), rev'd on other grounds sub nom. Hoover v. Ronwin, 466 U.S. 558 (1984); see also United States v. Studley, 783 F.2d 934, 939-40 (9th Cir. 1986). Furthermore, any error in Judge Schwarzer's entry of the order in the second action prior to the case being formally assigned to him was clearly harmless