Appeal from the United States District Court for the Southern District of Indiana, Indianapolis Division. No. IP 03-5790-C-B/S, MDL No. 1373-Sarah Evans Barker, Judge.
The opinion of the court was delivered by: Wood, Circuit Judge
ARGUED SEPTEMBER 11, 2007
Before RIPPLE, MANION, and WOOD, Circuit Judges.
This appeal arises out of one of the many cases that were filed against Ford Motor Company and Bridgestone/Firestone, Inc. (now known as Bridgestone Firestone North American Tire, LLC), after some Firestone tires installed on Ford Explorers exploded, often with catastrophic consequences. Although most of those lawsuits involved U.S. citizens who were driving their cars within the United States, a certain number involved foreigners. This is one of the latter group: it was brought by the family of José Samuel MañezReyes, who was killed in Veracruz, Mexico, in one such accident. In an earlier opinion, this court reviewed a decision by the district court to dismiss the Mañez litigation under the doctrine of forum non conveniens, on the ground that a forum in Mexico would be available and more appropriate. In re Bridgestone/Firestone, Inc., 420 F.3d 702 (7th Cir. 2005) (Mañez I).
The earlier appeal took an unexpected turn when the plaintiffs submitted documents indicating that the Fourth Court of First Instance for Civil Cases of the First Judicial District in Morelos, Mexico, had concluded (contrary to the district court's expectation) that it did not have jurisdiction over the case. In supplemental filings before this court, plaintiffs argued that this demonstrated conclusively that the courts of Mexico were not available to hear the case and thus that a dismissal for forum non conveniens was improper. See generally Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 506-07 (1947) ("In all cases in which the doctrine of forum non conveniens comes into play, it presupposes at least two forums in which the defendant is amenable to process; the doctrine furnishes critera for choice between them."). When we invited the defendants to respond to this new information, they raised serious questions about the proffered documents. We concluded that the best course of action was to remand the case to the district court for reconsideration of the question whether, in light of all the evidence, Mexico is an available forum.
The district court accordingly held an evidentiary hearing on remand to explore the circumstances sur- rounding the Morelos court's decision. Ultimately, the court had to decide whether the plaintiffs brought that case in good faith and whether the Mexican court's decision was entitled to recognition in the U.S. action. The district court concluded that the Morelos judgment had indeed been procured in bad faith and thus was not subject to recognition. The court therefore reaffirmed its earlier decision to dismiss the Mañez litigation on the ground of forum non conveniens.
With that judgment in hand, defendants moved for an order imposing sanctions against plaintiffs' U.S. and Mexican lawyers. Initially, the district court refrained from taking that step, because it believed that any fraud that may have been perpetrated was directed to this court, not the district court. Upon reconsideration, however, the court concluded that the court of appeals no longer had jurisdiction over the motion for sanctions, because no proceeding was then pending there. In addition, the court noted that it, too, was arguably the victim of vexatious and unreasonable proceedings, as described in 28 U.S.C. § 1927. It therefore imposed a fine of $50,000 as a sanction against plaintiffs' U.S. lawyers, to be divided among the defendants in any way that defendants thought appropriate. In addition, the court singled out the appellant before us, Leonel Pereznieto-Castro, for a particular sanction:
Further, Dr. Leonel Pereznieto, the apparent mastermind behind these frauds on the U.S. and Mexican courts, is ordered to pay over, as a personal sanction, the amount of one hundred thousand dollars ($100,000.00). Fifty thousand dollars ($50,000.00) of that amount is payable to Defendants as an additional offset against the expenses they incurred in investigating the Morelos proceedings and litigating the remand issues and the second fifty thousand dollars is payable to the Clerk of this court as a sanction for the fraud perpetrated by him in this forum. So long as this monetary sanction remains unpaid in the full amount of $100,000, Leonel Pereznieto is and shall be barred from providing any testimony against any Defendant in this cause in any United States court. Further, in terms of resolving the remaining cases in this multidistrict litigation, any and all sworn assertions reflecting the views or opinions of Leonel Pereznieto, whether made by him directly or indirectly, shall be stricken and we shall not consider as authority cases where his testimony whether oral or written was relied upon as justification for the court's opinion.
The court concluded by ordering that its sanctions judgment should be issued under FED. R. CIV. P. 58(d), and that the dismissal of the case as a whole would be without prejudice. (Here and throughout this opinion we cite to the version of the Federal Rules of Civil Procedure that took effect on December 1, 2007, unless it appears that it would not be "just and practicable" to apply the new rules to this pending case.)
The fact that the dismissal was without prejudice raises the question whether the judgment before us is final for purposes of 28 U.S.C. § 1291. We conclude that it was, given the nature of a dismissal based on forum non conveniens. First, we note the obvious difference between dismissing a case on this ground and refusing to dismiss and thereby permitting the litigation to continue. The latter kind of order is non-final and does not fall within the narrow confines of the collateral order doctrine. See Van Cauwenberghe v. Biard, 486 U.S. 517, 527 (1988).A dismissal, in contrast, ends the case before the court. The premise of a dismissal under the forum non conveniens doctrine, as we noted earlier, is that there is an alternative forum that is better suited to hear the case. Had the dismissal here been one "with prejudice," there would have been some question about plaintiffs' right to resort to that alternative forum; by stipulating that it was "without prejudice," the district court properly signaled that it intended no such limitation. See In re Joint E. & S. Dists. Asbestos Litig., 22 F.3d 755, 762 n.13 (7th Cir. 1994) (stating that "[t]he grant of a motion to dismiss on the common law grounds of forum non conveniens is appealable," despite being without prejudice). Compare Peters v. Welsh Dev. Agency, 920 F.2d 438, 439 (7th Cir. 1990) (holding that the district court's order, which dismissed a complaint without prejudice for failure to prosecute but indicated that the case would be reinstated in that same court if plaintiff were to meet certain conditions, was not final and therefore not appealable).
In this context, therefore, the phrase "without prejudice" means that although the dismissal is "final" in the sense that plaintiffs are finished before the U.S. courts, they still are free to refile the case in another, appropriate forum, and (at least to the extent that a U.S. court is in a position to assure such a thing) such a refiling would not be subject to a defense based on former adjudication. See Esfeld v. Costa Crociere, S.P.A., 289 F.3d 1300, 1303, 1306 (11th Cir. 2002) (stating that after a dismissal without prejudice on grounds of forum non conveniens, plaintiffs are "free to refile" in "any other jurisdiction which [would] entertain the case," and noting that an "appropriate forum" for refiling in Esfeld could be "the courts of Italy, Vietnam, or Plaintiffs [sic] respective home states"). Because the underlying litigation is finished, nothing in Cunningham v. Hamilton County, 527 U.S. 198 (1999), which addressed interlocutory appeals from sanctions orders, would prevent Pereznieto from appealing (assuming for the sake of argument that he is best characterized as one of the lawyers for the plaintiffs, rather than an expert witness).
This situation is not unlike a dismissal for lack of personal or federal subject-matter jurisdiction, which, while foreclosing future litigation of the matter in the court issuing the order, does not preclude a plaintiff from refiling and litigating in a proper forum. See, e.g., Milwaukee Concrete Studios, Ltd. v. Fjeld Mfg. Co., Inc., 8 F.3d 441, 448 (7th Cir. 1993) (taking appellate jurisdiction and affirming the district court's dismissal without prejudice on grounds of improper venue because of insufficient contacts to confer personal jurisdiction but noting that refiling in a proper venue remains an option); Fuhrman v. Livaditis, 611 F.2d 203, 204 (7th Cir. 1979) (same).
Returning to the case presently before us, it is Pereznieto who has appealed. His complaint is not about the dismissal of the underlying action, but instead is about the order imposing sanctions on him. This order, we conclude, is also final for purposes of appeal; the district court is finished with him, and the only thing that remains is for him to pay the fine that it imposed, unless he can obtain relief on appeal. See United States v. Dowell, 257 F.3d 694, 698 (7th Cir. 2001); United States v. Kirschenbaum, 156 F.3d 784, 794 (7th Cir. 1998). Beginning with fundamental jurisdictional arguments and moving on to others, he argues that the court's order was either beyond its competence, unauthorized, or an abuse of discretion. We consider these points in turn, filling in the factual background as necessary.
A few more details about the conduct for which Pereznieto was sanctioned help to explain the district court's action. After the case was remanded to the district court, the parties spent nearly a year in discovery. The court then held a two-day evidentiary hearing. The evidence presented showed that plaintiffs' U.S. lawyers, Roger Reed and Alberto Guerrero, had hired Mexican lawyers on a contingent-fee basis after the initial appeal had been filed in this court, and that they did so for the express purpose of filing a deficient complaint in an improper Mexican court. The idea was to file something that the Morelos courts would dismiss, so that plaintiffs could present "proof" to this court that Mexico was not an available alternative forum. The Mexican attorney in charge of this strategy was Pereznieto-a Mexican citizen and attorney whom plaintiffs' U.S. lawyers knew because he previously had filed an expert declaration in support of their claims in the U.S. courts. Pereznieto in turn hired two other Mexican lawyers to assist him, Juan Carlos Guerrero-Valle and Rosa Maria Avila-Fernandez.
The district court found that the evidence, including a "smoking gun" email sent on January 14, 2005, showed that the Mexican attorneys improperly had used family connections and had ex parte contact with the Morelos judge in order to manipulate the system and ensure that the judge would "throw out the suit according to what we planned." Pereznieto, the court found, had "played a double role in this attempted fraud on the court," both by orchestrating the proceedings in Morelos and by submitting an "expert affidavit" to the Seventh Circuit in support of the plaintiffs' arguments while the initial appeal was pending. At no time did Pereznieto disclose the circumstances of the Mexican proceedings to the U.S. courts, nor did he mention that he was representing the plaintiffs on a contingent-fee basis in Mexico (in itself, a lawful arrangement) while at the same time giving sworn statements as an expert in the U.S. proceedings. These findings provided the basis for the sanctions order we set forth above.
In his appeal, Pereznieto raises three principal arguments: that the district court lacked jurisdiction to impose sanctions against him; that the district court did not observe the requirements of due process; and that the court erred ...