American Reliable Insurance v. Stillwell

PUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

AMERICAN RELIABLE INSURANCE 

COMPANY; AMERICAN BANKERS

INSURANCE COMPANY OF FLORIDA;

CAMPBELL INSURANCE SERVICES,

INCORPORATED,

Plaintiffs-Appellants,  No. 02-1431

v.

ROBERT STILLWELL; HELEN

STILLWELL,

Defendants-Appellees.



AMERICAN RELIABLE INSURANCE 

COMPANY; AMERICAN BANKERS

INSURANCE COMPANY OF FLORIDA;

CAMPBELL INSURANCE SERVICES,

INCORPORATED,

Plaintiffs-Appellees,  No. 02-1807

v.

ROBERT STILLWELL; HELEN

STILLWELL,

Defendants-Appellants.



Appeals from the United States District Court

for the Northern District of West Virginia, at Wheeling.

Frederick P. Stamp, Jr., District Judge.

(CA-01-59)

Argued: February 24, 2003

Decided: July 16, 2003

2 AMERICAN RELIABLE INSURANCE v. STILLWELL

Before TRAXLER and SHEDD, Circuit Judges, and

C. Arlen BEAM, Senior Circuit Judge of the

United States Court of Appeals for the Eighth Circuit,

sitting by designation.

Affirmed by published opinion. Judge Traxler wrote the opinion, in

which Judge Shedd and Senior Judge Beam joined.

COUNSEL

ARGUED: Stephan Isaiah Voudris, JORDEN BURT, L.L.P., Miami,

Florida, for Appellants. Thomas Clark Schultz, Wheeling, West Vir-

ginia, for Appellees. ON BRIEF: Markham R. Leventhal, JORDEN

BURT, L.L.P., Miami, Florida; John Preston Bailey, BAILEY,

RILEY, BUCH & HARMAN, L.C., Wheeling, West Virginia; Kevin

S. Burger, MARGOLIS EDELSTEIN, Pittsburgh, Pennsylvania, for

Appellants. Don A. Yannerella, Wheeling, West Virginia, for Appel-

lees.

OPINION

TRAXLER, Circuit Judge:

Appellants American Reliable Insurance Company, American

Bankers Insurance Company of Florida, and Campbell Insurance Ser-

vices, Inc. (collectively "Appellants"), appeal the district court’s dis-

missal of their petition to compel arbitration of claims asserted against

them in West Virginia state court by Appellees Robert and Helen

Stillwell. See American Reliable Ins. Co. v. Stillwell, 212 F. Supp. 2d

621, 623-24 (N.D.W.Va. 2002). The district court dismissed Appel-

lants’ complaint on three alternative grounds: (1) the court lacked

jurisdiction pursuant to the Rooker-Feldman doctrine; (2) American

Reliable and Campbell had waived the right to arbitration; and (3)

abstention was appropriate under Colorado River Water Conservation

Dist. v. United States, 424 U.S. 800 (1976). On appeal, Appellants

AMERICAN RELIABLE INSURANCE v. STILLWELL 3

challenge all three bases offered by the district court in support of the

dismissal of their action to compel arbitration.

Appellants also appeal the district court’s refusal to impose Rule

11 sanctions against the Stillwells for seeking attorney’s fees and liti-

gation costs. The Stillwells cross appeal the district court’s denial of

their motion for attorney’s fees and costs. We affirm.

I.

In February 1999, the Stillwells purchased a homeowners policy

issued by American Reliable. The policy contained an arbitration

clause that provided, in part, as follows:

Any and all disputes, controversies or claims of any kind

and nature between you and us arising out of or in any way

related to the validity, interpretation, performance or breach

of any provisions of this policy, and upon which a settle-

ment has not been reached by you and us, shall be resolved

exclusively[,] by arbitration in accordance with the Federal

Arbitration Act (9 U.S.C. § 1 ET SEQ).

J.A. 91. Shortly thereafter, the Stillwells’ mobile home sustained

damage in a wind storm. After an initial dispute about whether the

loss was covered by the American Reliable policy, the parties settled

the Stillwells’ claim for property loss.

In February 2000, the Stillwells filed an action in state court

against American Reliable and Campbell Insurance for various claims

relating to the policy, alleging that American Reliable and Campbell

Insurance handled their claim under the policy in bad faith and vio-

lated certain West Virginia statutory provisions regarding the han-

dling of insurance claims.1 American Reliable and Campbell filed an

answer that included a number of affirmative defenses; however, the

answer did not invoke the arbitration clause. In April 2001, the Still-

wells amended the complaint to add American Bankers as a defendant

1

Campbell Insurance was named as a defendant based on its alleged

status as general agent for American Reliable.

4 AMERICAN RELIABLE INSURANCE v. STILLWELL

and to convert the lawsuit into a class action.2 For the first time, in

answering the amended complaint, Appellants invoked the arbitration

clause.

On May 1, 2001, after the state court proceedings had been in prog-

ress for 14 months, Appellants filed a joint motion in state court to

compel arbitration and stay judicial proceedings, pursuant to the Fed-

eral Arbitration Act ("FAA"). See 9 U.S.C.A. §§ 1-16 (West 1999 &

Supp. 2003). On June 11, 2001, the West Virginia state court denied

Appellants’ motion to compel arbitration and stay judicial proceed-

ings, concluding that the policy was "a contract of adhesion" and that

Appellants "proffered no evidence that the parties to this contract

knowingly bargained for an arbitration clause." J.A. 121-22.

On May 18, 2001, while Appellants’ motion to compel arbitration

was pending in state court, Appellants filed, but did not serve, this

action in federal court seeking to compel arbitration of the Stillwells’

state law claims — the same issue that Appellants had raised and ulti-

mately lost in state court. Appellants completed service of the federal

complaint only after the state court denied their motion to compel

arbitration three weeks later. Moreover, almost immediately after the

state court issued its decision, Appellants filed a motion in district

court to compel arbitration of the Stillwells’ state law claims. Appel-

lants argued that "the state court issued an erroneous ruling which

failed to follow Federal law under the FAA and which denied the

motion to compel arbitration" and urged the district court to rectify

the situation by "enforc[ing] Federal law under the FAA and . . .

enter[ing] an Order compelling the parties’ dispute to arbitration."

American Reliable, 212 F. Supp. 2d at 625. In response, the Stillwells

filed a motion to dismiss the federal action on numerous grounds,

including the Rooker-Feldman doctrine, the Younger abstention doc-

trine, and principles of res judicata and collateral estoppel.

While awaiting a decision from the district court, Appellants

attempted to obtain review of the state trial court’s denial of arbitra-

tion in the West Virginia appellate courts. First, Appellants moved

2

The Stillwells named American Bankers as a defendant because it

was the parent company for American Reliable and allegedly processed

the Stillwells’ claim under the policy.

AMERICAN RELIABLE INSURANCE v. STILLWELL 5

unsuccessfully in the state trial court for an order certifying the arbi-

tration question for interlocutory appeal to the West Virginia Supreme

Court of Appeals. Next, Appellants petitioned the West Virginia

Supreme Court for a Writ of Prohibition against the enforcement of

the trial court’s order denying arbitration, which the supreme court

refused to grant. Then, Appellants filed a petition seeking permission

to appeal the state trial court’s rejection of arbitration to the West Vir-

ginia Supreme Court, which was also denied. Ultimately, Appellants

unsuccessfully sought review of the denial of the petition for appeal

in the United States Supreme Court. See American Reliable Ins. Co.

v. Stillwell, 123 S. Ct. 112 (2002).

The district court concluded that Appellants’ federal lawsuit was

the "‘functional equivalent’ of an appeal from the June 11, 2001 state

court decision" denying arbitration — clearly demonstrated, the dis-

trict court reasoned, by Appellants’ "failure to actively pursue their

complaint and petition to compel arbitration until after the state court

ruling." American Reliable, 212 F. Supp. 2d at 627. Based on that

conclusion, the district court held that it was precluded by the Rooker-

Feldman doctrine from considering an identical motion to compel

arbitration and dismissed the action for lack of subject matter jurisdic-

tion.

Alternatively, the court found that Appellants, having "litigate[d]

the state court case for a period of 14 months before they even men-

tioned that they wished to enforce the arbitration provision in the con-

tract," waived the right to invoke the arbitration clause. Id. at 628.3

Additionally, the district court determined that even if the Rooker-

Feldman and waiver doctrines did not apply, federal court abstention

was appropriate under the Colorado River doctrine of abstention

because the federal "action was not filed until more than 14 months

after the state court case was filed, the defendants are challenging the

validity of the arbitration clause, which implicates state law, the state

court forum is adequate to protect the federal plaintiffs’ rights, and the

3

The district court’s waiver analysis did not apply to American Bank-

ers, which was not added as a defendant until the case had been pending

in state court for more than one year. See American Reliable, 212 F.

Supp. 2d at 629.

6 AMERICAN RELIABLE INSURANCE v. STILLWELL

state court has already ruled on the issue before this Court." Id. at

631.

On appeal, Appellants challenge each of the bases identified by the

district court in support of its order of dismissal. Because we agree

that the district court properly applied the Rooker-Feldman doctrine,

we do not reach Appellants’ additional arguments.

II.

A.

Under the Rooker-Feldman doctrine, a "party losing in state court

is barred from seeking what in substance would be appellate review

of the state judgment in a United States district court." Johnson v.

DeGrandy, 512 U.S. 997, 1005-06 (1994). We regard the doctrine as

jurisdictional. See Friedman’s, Inc. v. Dunlap, 290 F.3d 191, 196 (4th

Cir. 2002) ("Because the Rooker-Feldman doctrine is jurisdictional,

we are obliged to address it before proceeding further in our analy-

sis."); Plyler v. Moore, 129 F.3d 728, 731 (4th Cir. 1997) ("Under the

Rooker-Feldman doctrine, lower federal courts do not have jurisdic-

tion to review state-court decisions."); Jordahl v. Democratic Party

of Va., 122 F.3d 192, 197 n.5 (4th Cir. 1997) (noting that the Rooker-

Feldman doctrine is a jurisdictional matter that a court is empowered

to raise sua sponte). The notion that Rooker-Feldman is jurisdictional

"rests on two basic propositions of federal jurisdiction." Brown &

Root, Inc. v. Breckenridge, 211 F.3d 194, 198 (4th Cir. 2000). One

is that "Congress . . . vested the authority to review state court judg-

ments in the United States Supreme Court alone" under 28 U.S.C.

§ 1257(a). Id. at 198-99. The other is that "Congress has empowered

the federal district courts to exercise only original jurisdiction." Id. at

199. The Rooker-Feldman doctrine, therefore, preserves a fundamen-

tal tenet in our system of federalism that, with the exception of habeas

cases, appellate review of state court decisions occurs first within the

state appellate system and then in the United States Supreme Court.

See Plyler, 129 F.3d at 731. A litigant may not circumvent these juris-

dictional mandates by instituting a federal action which, although not

styled as an appeal, "amounts to nothing more than an attempt to seek

review of [the state court’s] decision by a lower federal court." Id. at

733; see Jordahl v. Democratic Party of Va., 122 F.3d 192, 202 (4th

AMERICAN RELIABLE INSURANCE v. STILLWELL 7

Cir. 1997) (explaining that a litigant "may not escape the jurisdic-

tional bar of Rooker-Feldman by merely refashioning its attack on the

state court judgment[ ] as a § 1983 claim"). For purposes of Rooker-

Feldman, "[t]he controlling question . . . is whether a party seeks the

federal district court to review a state court decision and thus pass

upon the merits of that state court decision." Jordahl, 122 F.3d at 202;

see Brown & Root, 211 F.3d at 202 ("[T]he pivotal inquiry is whether

the federal plaintiff seeks to set aside a state court judgment or

whether he is, in fact, presenting an independent claim." (alterations

and internal quotation marks omitted)).

We agree with the district court’s conclusion that Appellants’ fed-

eral action was the "‘functional equivalent’ of an appeal from the June

11, 2001 state court decision." American Reliable, 212 F. Supp. 2d at

627. Appellants sought a federal court order requiring the arbitration

of the Stillwells’ state claims, precisely the same ruling denied to

Appellants in state court. That is, Appellants were asking the federal

courts to reach the "correct" result that they believe was denied in

state court. Rooker-Feldman generally applies when a state-court liti-

gant "sues in federal district court to readjudicate the same issues

decided in the state court proceedings." Brown & Root, 211 F.3d at

201; see id. at 200 (applying Rooker-Feldman doctrine where the fed-

eral complaint sought "precisely the same relief denied by the state

trial court" and the briefs filed presented "an argument which the state

court had already rejected"); Plyler, 129 F.3d at 731 (explaining that

Rooker-Feldman principles bar district court consideration of "issues

actually presented to and decided by a state court"). Appellants’ fed-

eral complaint sought, in substance if not in form, to reverse the state

court’s decision and send the Stillwells’ claims to arbitration.

However, we need not rely only on the fact that Appellants are

seeking adjudication of precisely the same claim rejected by the state

court to apply Rooker-Feldman. Appellants submitted a brief to the

district court making it plain that the purpose of the federal action was

to correct the ruling of the state court:

[T]he state court issued an erroneous ruling which failed to

follow Federal law under the FAA and which denied the

motion to compel arbitration on the ground that the arbitra-

tion clause had not been separately "bargained for." . . . The

8 AMERICAN RELIABLE INSURANCE v. STILLWELL

state court’s decision denying arbitration is directly contrary

to binding United States Supreme Court authority under the

FAA, which firmly holds that a court may not discriminate

against an arbitration clause by enforcing all other provi-

sions of a contract but not its arbitration clause. Allied-Bruce

Terminix Cos. v. Dobson, 513 U.S. 265, 277 (1995).

Accordingly, the [Appellants] hereby move this Court to

enforce Federal law under the FAA and to enter an Order

compelling the parties’ dispute to arbitration.

American Reliable, 212 F. Supp. 2d at 625. The Rooker-Feldman bar

applies to claims such as this one where, "in order to grant the federal

plaintiff the relief sought, the federal court must determine that the

[state] court judgment was erroneously entered or must take action

that would render the judgment ineffectual." Jordahl, 122 F.3d at 202

(internal quotation marks omitted).

Thus, we conclude that Appellants’ federal action is the functional

equivalent of an appeal of the state court order denying arbitration

and is impermissible under the Rooker-Feldman doctrine.

B.

Appellants contend that the Rooker-Feldman doctrine cannot apply

here because, although the underlying state action had been pending

for more than one year, Appellants filed the federal action before the

state court rendered its decision on the motion to compel arbitration.

Appellants argue that because the Rooker-Feldman doctrine is consid-

ered jurisdictional, the critical time for determining whether it applies

is at the time that the federal action is commenced. See, e.g., Athena

Auto., Inc. v. DiGregorio, 166 F.3d 288, 290 (4th Cir. 1999) (explain-

ing that federal diversity jurisdiction "attaches at the commencement

of an action" and subsequent events do not destroy the federal court’s

"authority to decide the case"). According to Appellants, therefore, a

subsequent decision by the state court will not cause the federal court

to lose subject matter jurisdiction — even, presumably, if the federal

action raises precisely the same issue as that considered and disposed

of by the state court. Cf. Jamison v. Wiley, 14 F.3d 222, 239 (4th Cir.

1994) ("That the federal court ultimately rejects the federal defense

that supported removal under § 1442(a)(1) does not mean that it

AMERICAN RELIABLE INSURANCE v. STILLWELL 9

thereby loses subject matter jurisdiction over the removed action; the

jurisdiction of the federal courts over a properly removed action will

not be defeated by later developments in the suit." (internal quotation

marks omitted)).

We cannot agree that the sequence in which the federal plaintiff

files the action and the state court issues its judgment is absolutely

controlling for Rooker-Feldman purposes. We have previously

applied Rooker-Feldman despite the fact that the federal complaint

was filed before the state court rendered its decision without expressly

addressing the issue. See Friedman’s, 290 F.3d at 195-97. Other cir-

cuits have done likewise. See, e.g., In re Gen. Motors Corp. Pick-Up

Truck Fuel Tank Prods. Liab. Litig., 134 F.3d 133, 137-40, 143 (3d

Cir. 1998) (applying Rooker-Feldman doctrine where federal action

was commenced prior to state court’s decision without discussing the

filing sequence); Datz v. Kilgore, 51 F.3d 252 (11th Cir. 1995) (per

curiam) (same). With the issue now before the court, we conclude that

the order in which the federal action was filed and the state decision

issued is a relevant, but not controlling, consideration in answering

the key question of "whether a party seeks the federal district court

to review a state court decision and thus pass upon the merits of that

state court decision." Jordahl, 122 F.3d at 202.

To find otherwise would permit litigants to nullify the purpose of

Rooker-Feldman by precisely the kind of ploy used here by Appel-

lants. Appellants filed their federal action to compel arbitration prior

to the state court’s decision on Appellants’ identical motion in state

court. Appellants did not serve the Stillwells with the complaint, how-

ever, intending "to let the federal complaint sit in the Clerk’s office

without serving it while awaiting the state-court decision" and to pur-

sue it only if Appellants lost in state court. J.A. 386. And, in fact,

Appellants served process two days after the state court rendered

them an unfavorable decision, and immediately filed an identical

motion to compel arbitration in federal district court. In support of the

motion to compel arbitration, Appellants argued that the state decision

denying arbitration was erroneous. Clearly, Appellants were making

the functional equivalent of an appeal of the state decision in district

court; they should not be permitted to avoid Rooker-Feldman by pre-

paring a complaint raising claims identical to those in state court, i.e.,

10 AMERICAN RELIABLE INSURANCE v. STILLWELL

the "appeal", and filing it immediately prior to the state court decision

in preparation for an adverse determination.

Although we treat Rooker-Feldman as a jurisdictional doctrine,

there is undeniably substantial overlap between it and various doc-

trines of abstention and preclusion. See Vulcan Chem. Techs., Inc. v.

Barker, 297 F.3d 332, 343 (4th Cir. 2002) (recognizing that "our dual

system of government" is protected by "full faith and credit, the

Rooker-Feldman doctrine, the Erie doctrine, abstention, and other

similar doctrines"); see also United States v. Owens, 54 F.3d 271, 274

(6th Cir. 1995) (observing that Rooker-Feldman is "a combination of

the abstention and res judicata doctrines"); Barry Friedman & James

E. Gaylord, Rooker-Feldman, From the Ground Up, 74 Notre Dame

L. Rev. 1129, 1173-74 (1999) ("Rooker-Feldman . . . operates to plug

any gap in the Younger and preclusion doctrines when a party who

could have chosen to litigate in federal court instead chooses state

court and then in the course of litigation becomes unhappy with that

decision."). As the district court held, the application of abstention

under Colorado River might well have been appropriate if it were not

obvious that Appellants were effectively appealing the decision of the

state court — for example, if Appellants had filed and pursued the

federal petition to compel arbitration before or immediately after

moving in state court for arbitration. Cf. Vulcan, 297 F.3d at 338 n.2

(holding that district court abused its discretion by failing to abstain

from exercising its jurisdiction over an action to vacate an arbitration

award where it "obtained jurisdiction over . . . [the arbitration] claim

before the California court did.").

In sum, we hold that a party cannot avoid Rooker-Feldman merely

by filing a complaint in federal court immediately before the state

court renders its decision where it is patently obvious, as it was here,

that the federal action is intended to be nothing more than an appeal

of an unfavorable decision by the state court. The timing of the filing

of the complaint in federal court is a relevant consideration, but it is

not outcome determinative. This is consistent with the spirit of the

Rooker-Feldman doctrine which, by elevating substance over form,

preserves the independence of state courts as well as congressional

intent that an appeal from a state court decision must proceed through

that state’s system of appellate review rather than inferior federal

courts.

AMERICAN RELIABLE INSURANCE v. STILLWELL 11

C.

Appellants object to the district court’s application of Rooker-

Feldman on one additional ground. Appellants argue that the district

court erroneously applied Rooker-Feldman because the West Virginia

Supreme Court, in refusing to reconsider its denial of Appellants’

petition for appeal, stated that "an appeal of the merits of this matter

continues to be premature" because "it appears that issues of fact and

of state law have not been finally determined below, which issues

may determine the questions of when and to what extent the Federal

Arbitration Act applies." Stillwell v. American Reliable Ins. Co., No.

012231 (W. Va. March 13, 2002). Appellants contend that the lan-

guage used by the West Virginia Supreme Court in this order sug-

gested that the circuit court’s order denying arbitration was

"preliminary" and "subject to change after further development of the

factual record," Appellants’ Answering and Reply Br. at 9, and that

the application of Rooker-Feldman was therefore inappropriate.

Rooker-Feldman, however, "applies to interlocutory orders issued by

state courts . . . [because] [i]t cannot be the meaning of Rooker-

Feldman that, while the inferior federal courts are barred from

reviewing final decisions of state courts, they are free to review inter-

locutory orders." Brown & Root, 211 F.3d at 199 (internal quotation

marks omitted) (second alteration in original). Appellants’ argument

seems to suggest that, for purposes of Rooker-Feldman, there is a dis-

tinction between a preliminary order and one that is merely interlocu-

tory. The distinction is purely semantic. See Black’s Law Dictionary

815 (6th ed. 1990) (defining an "interlocutory order" as "one which

does not finally determine a cause of action but only decides some

intervening matter pertaining to the cause, and which requires further

steps to be taken in order to enable the court to adjudicate the cause

on the merits"). The state court rendered an adjudication on the merits

of the arbitration issue which the West Virginia Supreme Court left

standing. The fact that such an order may be theoretically subject to

modification does not impact the Rooker-Feldman analysis. It is suffi-

cient that a state court render a decision resolving an issue that is the

basis for the federal action, even if the decision comes in the form of

an interlocutory or preliminary order. See Campbell v. Greisberger,

80 F.3d 703, 707 (2nd Cir. 1996) (applying Rooker-Feldman where

state order denied federal plaintiff’s claim but indicated the court

would reconsider the issue if additional evidence was submitted);

12 AMERICAN RELIABLE INSURANCE v. STILLWELL

Port Auth. Police Benevolent Ass’n v. Port Auth. of N.Y. and N.J.

Police Dep’t, 973 F.2d 169, 178 (3d Cir. 1992) (finding Rooker-

Feldman applicable because "the preliminary injunction issued by the

New York trial court . . . resolved, at least for the moment, the dispute

between the parties which forms the basis of the federal complaint at

issue in this case"). Thus, we reject this argument as well.

III.

The Stillwells cross appeal the district court’s denial of their

motion for attorney’s fees and litigation expenses related to their

opposition to Appellants’ federal action seeking to compel arbitration.

In turn, Appellants challenge the district court’s denial of their motion

for sanctions under Rule 11 of the Federal Rules of Civil Procedure,

filed in response to the Stillwells’ motion for attorney’s fees.

Before the district court ruled on the issue of arbitration, the Still-

wells filed a motion for attorney’s fees and costs in the event that the

district court ruled in their favor. The district court denied this motion

because it found no statutory or common law basis permitting an

award of fees. In denying the Stillwells’ Rule 59(e) motion to alter or

amend its order, the court explained that neither federal nor state law

afforded a basis for recovery:

West Virginia law is quite clear: The American rule that

both sides of a civil controversy must pay their own attor-

ney’s fees remains the law in the absence of a statutory or

contractual provision providing for recovery of attorney’s

fees or case law that carves out an exception. Because there

is no statutory or contractual provision or case law that

carves out an exception, the American Rule must apply.

Further, there is no provision in the Federal Arbitration

Act . . . that awards attorney’s fees to a party who is suc-

cessful in pursuing a motion to compel arbitration or in

defeating a motion to compel arbitration. . . . [A]warding

attorney’s fees to a party who defeats a motion to compel

arbitration under the FAA would frustrate Congress’ inten-

tion to "rigorously enforce" arbitration agreements.

AMERICAN RELIABLE INSURANCE v. STILLWELL 13

American Reliable, 212 F. Supp. 2d at 633-34. Generally, we review

a district court’s decision awarding or denying attorney’s fees and

costs for abuse of discretion. See Hitachi Credit Am. Corp. v. Signet

Bank, 166 F.3d 614, 631 (4th Cir. 1999).

We conclude that the district court did not abuse its discretion in

denying the Stillwells’ motion for fees and costs. The Stillwells have

failed to identify any statutory or common law basis that would sup-

port an award of attorney’s fees, and there is no contractual provision

in the policy that would permit fee-shifting. See Alyeska Pipeline

Serv. Co. v. Wilderness Soc’y, 421 U.S. 240, 247, 263-64 (1975)

(explaining that without statutory authorization or contractual agree-

ment between the parties, the prevailing American rule is that each

party in federal litigation pays his own attorney’s fees); Helmick v.

Potomac Edison Co., 406 S.E.2d 700, 709 (W. Va. 1991) (same).

Although the Stillwells now suggest that a lower federal court has the

inherent power to award attorney’s fees as a sanction to control the

conduct of litigants, see Chambers v. NASCO, Inc., 501 U.S. 32, 43-

44 (1991), we decline to consider it because they failed to present this

argument to the district court. Moreover, in filing this action, Appel-

lants have not "acted in bad faith, vexatiously, wantonly, or for

oppressive reasons" such that the court abused its discretion in not

awarding attorney’s fees. Chambers, 501 U.S. at 45-46 (internal quo-

tation marks omitted). Because the district court correctly determined

that the Stillwells did not identify an appropriate basis for recovering

fees and costs, the court did not abuse its discretion in denying their

motion.4

We likewise conclude that the district court was within its discre-

tion in denying Appellants’ motion for sanctions pursuant Rule 11 of

the Federal Rules of Civil Procedure. See Bass v. E.I. DuPont de

Nemours & Co., 324 F.3d 761, 767 (4th Cir. 2003) (applying abuse

of discretion standard of review to the imposition or denial of Rule

11 sanctions). Appellants moved for sanctions on the grounds that the

Stillwells’ motion for attorney’s fees was frivolous and filed only as

an improper litigation tactic. The district court denied the motion "be-

4

As did the district court, we decline as unnecessary the Stillwells’

request that we certify the question of attorney’s fees to the West Vir-

ginia Supreme Court of Appeals. See W. Va. Code § 51-1A-3.

14 AMERICAN RELIABLE INSURANCE v. STILLWELL

cause the [Stillwells’] motion for attorney’s fees was not filed for any

improper purpose such as to harass or cause unnecessary delay or

needless increase in the cost of litigation." American Reliable, 212 F.

Supp. 2d at 631. Moreover, "[a]lthough this Court does not agree with

the defendants’ argument that attorneys’ fees should be granted, this

Court does not find that the defendants’ argument was frivolous." Id.

at 631-32. On the record before us, we cannot say that the district

court abused its discretion. Thus, we affirm the denial of Appellants’

motion for Rule 11 sanctions as well.

IV.

For the foregoing reasons, the judgment of the district court is

hereby affirmed.

AFFIRMED