Seventh Circuit Court of Appeals Commentary : In Their Opinion : Lawyer & Attorney Michael E. Rigney : Kelley Drye & Warren Law Firm

BROWN v. COLUMBIA SUSSEX CORP. (December 15, 2011) 

James Piggee runs the organization Giving Education Meaningful Substance. For two decades, he has organized an annual trip that exposes African-American high school students to predominately black universities. The destination for the Spring 2008 trip was Louisiana and Texas. The group reserved 41 rooms at the Marriott Hotel in Baton Rouge Louisiana. Within a few days, the hotel canceled the reservation. Piggee, the students, and the chaperones (268 in all) filed suit against Marriott, alleging that the cancellation was racially motivated. In the district court, Marriott served discovery requests on the plaintiffs in December of 2009. Several deadlines came and went. A motion to compel was granted and ignored. The district court sanctioned the plaintiffs for their delay. Finally, almost a year after the discovery was served, Chief Judge Simon (N.D. Ind.) dismissed the case pursuant to Rule 37(b) with respect to the 200 or so plaintiffs that had not responded to discovery. Plaintiffs appealed.

In their opinion, Seventh Circuit Judges Posner, Flaum, and Sykes affirmed. The Court first addressed its jurisdiction. After the original appeal, the Court ordered briefing on jurisdiction since it appeared that the district court had not entered a final judgment. During the time for briefing, the appellant's returned to the district court and obtained a Rule 54(b) final judgment -- but did not file a new notice of appeal. In FirsTier, the Supreme Court concluded that a notice of appeal was timely when it followed a district court's decision but preceded its entry of judgment. In that case, however, the only thing that followed the notice was the actual entry of the judgment. Here, the plaintiffs had to move for and support a Rule 54 judgment. The Court identified two alternate readings of FirsTier. Under one reading, a premature notice of appeal is allowed if it is followed only by the ministerial task of entering judgment. Under another reading, a premature notice of appeal is allowed if, with respect to the claim being appealed, the only thing remaining is the entry of the judgment. The Court concluded that the latter interpretation was the correct one and held the notice timely. On the merits, the Court seemed to have little difficulty in finding the dismissal sanction, although serious, not inappropriate. Plaintiffs’ counsel missed numerous discovery deadlines, violated court orders, did not have the resources to handle the case, had not even spoken with many of the plaintiffs, and was warned that the court had given its "final extension." No more is necessary.

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BIELSKIS v. LOUISVILLE LADDER (November 18, 2011)

Raymond Bielskis was an acoustical ceiling carpenter employed by International Decorators. Although International Decorators usually supplied Bielskis with scaffolding necessary for his projects, he did own a mini-scaffold manufactured by Louisville Ladder that he used occasionally. One of those occasions was in March 2005. He was in the middle of a project when one of his co-workers borrowed the scaffold he was using. He brought in his mini-scaffold from his car, inspected it, and began to use it. He used it for several hours without incident. Then, without warning, it collapsed and he fell to the floor, sustaining injuries. He inspected the scaffold and noticed that one of the wheel stems had broken. Bielskis brought suit against Louisville Ladder, alleging counts based on strict liability and negligence. Louisville Ladder filed a third-party complaint against International Decorators for contribution. Bielskis retained Neil Mizen as his expert. In his report, Mizen concluded that the wheel stem failed because of a "brittle fracture" caused by excess tensile stress due to over tightening the stem. He further opined that the fracture could have been avoided with an alternative mechanism or by simply not tightening it as much. Louisville's expert examined the fracture surface carefully and did extensive testing and reconstruction. He also concluded that the stem failed because of a brittle fracture. He concluded, however, that the wheel was too loose, not too tight. Louisville moved to exclude Mizen's testimony. Judge Leinenweber (N.D. Ill.) agreed, concluding that Mizen's testimony failed under the Daubert factors. He excluded the testimony and granted summary judgment to Louisville. Bielskis appeals.

In their opinion, Seventh Circuit Judges Cudahy, Rovner, and Evans (who, as a result of his death, took no part in the decision) affirmed. The Court first addressed and resolved a jurisdictional matter. The district court’s order did not resolve the third party complaint brought against International Decorators and thus was technically not a final judgment. The Court concluded, however, that the summary judgment order in Louisville's favor resolved Louisville's third-party claim for all practical purposes and concluded the district court litigation. The Court turned to the merits. Under Federal Rule of Evidence 702, the district court must ensure that an expert's methodology is scientifically reliable. Daubert set out a number of factors addressed to an expert’s theory: has it been tested, has it been subjected to peer review, what is its rate of error, and what is its level of acceptance. The district court's evaluation is reviewed under an abuse of discretion standard. The Court conceded that it was a close question, but ultimately found no abuse of discretion. It relied on several facts: plaintiff’s expert made no attempt to test his theory (Louisville's expert tested extensively), Mizen presented no evidence of the level of acceptance or rate of error of his conclusion, and his proposed alternatives were not supported by any engineering principles. In short, Mizen's opinion was long on speculation and short on fact. The Court went on to conclude that the district court did not err in denying Bielskis’ motion for continuance to obtain a new expert. Again, the Court considered it a close call but concluded that the district court did not abuse of discretion in managing its docket that way. Finally, the Court affirmed the grant of summary judgment to Louisville. Although acknowledging that expert testimony may not be necessary in all product liability cases, it was required here. The scaffold had been in Bielskis’ control for years and there was no evidence regarding its condition when it left Louisville. There was also little evidence of its use while under Bielskis’ control. Bielskis could not prevail without expert testimony on those issues.

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PALKA v. CITY OF CHICAGO (October 18, 2011)

In early 2007, Assistant Deputy Superintendent Matthew Tobias recommended that Peter Palka be terminated from his position as a Chicago probationary police officer. Matthew's father, Tadeusz, himself a Cook County Deputy Sheriff, complained to Tobias and sought Peter’s reinstatement. Tobias refused. A few months later, an unidentified person placed a suspicious call to the school attended by Tobias' children. Tadeusz was accused of making the call. After an investigation concluded that he was responsible, he took early retirement. He later brought suit against the County and others alleging violations of his constitutional rights. The district court dismissed his complaint and the Seventh Circuit affirmed (opinion and intheiropinion). At about the same time, Peter filed a § 1983 suit against the City and Tobias, alleging discrimination based on his Polish ancestry. He sought reinstatement and back pay. The district court granted summary judgment to the City on the ground that Tobias was not a policymaker under a Monell analysis. Magistrate Judge Nolan (N.D. Ill.) then ruled that Peter was not entitled to reinstatement on the grounds that Tobias, the only defendant, lacked any authority to grant reinstatement. Peter moved for voluntary dismissal. The magistrate judge dismissed the City claims with prejudice and the Tobias claim without prejudice. Peter appealed. In the meantime, Tadeusz and Peter both received EEOC right to sue letters and filed yet a third case based on Title VII against the City (by Peter) and the Sheriff’s Department (by Tadeusz). Judge Kendall (N.D. Ill.) dismissed the claims on res judicata grounds. The Palkas appeal. The appeals were consolidated.

In their opinion, Seventh Circuit Judges Ripple, Kanne, and Sykes affirmed. The Court addressed Peter's appeal first. Normally, a dismissal without prejudice is not considered final and appealable. Here, however, the statute of limitations on Peter's § 1983 claim has expired. Since the case cannot be refiled, the judgment below is considered final. With respect to the judgment in favor of the City, the Court found no Monell liability and affirmed. It concluded that the two allegations of discrimination could not amount to a widespread pattern or practice and that Tobias was not a final policymaker, since his decisions were subject to review. Turning to the availability of a reinstatement remedy, the Court refused to consider Peter's argument. Since Peter requested and received dismissal of his claim against Tobias, he cannot complain about the earlier interlocutory order barring the reinstatement remedy. The Court next considered the Title VII claims dismissal. It found that the case was a "quintessential example of claim splitting." The cases involve the same parties and the same cause of action (albeit under different theories) and were litigated through final judgment. The Court rejected the Palkas' arguments to the contrary.

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GENERAL INSURANCE COMPANY OF AMERICA v. CLARK MALL CORP. (May 4, 2011)

Discount Mega Mall in Chicago was damaged in a major fire in the fall of 2007. It filed a claim with its commercial general liability carrier, General Insurance. It also tendered to General the defense of claims brought by its tenants. General filed a declaratory judgment action against Clark Mall Corporation d/b/a Discount Mega Mall Corporation as well as its principals and tenants seeking an order that it had no duty to defend or indemnify. The defendants asserted five counterclaims for: a) an order that defense and indemnity was required, b) damages for breach of contract, c) damages for a vexatious refusal to defend, d) damages for a violation of the Illinois Consumer Fraud and Deceptive Business Practices Act, and e) damages for fraud. The defendants moved for judgment on the pleadings with respect to the duty to defend. Magistrate Judge Cole (N.D. Ill.) ruled that General failed to produce evidence establishing the exclusion on which they based their denial of coverage and concluded that it had a duty to defend. Although the magistrate judge originally concluded that the refusal to defend was not vexatious, he later explained that he had not rejected the argument conclusively. At General's request, the magistrate judge entered his ruling as a final judgment under Rule 54(b). General appeals.

In their opinion, Chief Judge Easterbrook and Judges Rovner and Sykes dismissed for want of appellate jurisdiction. The Court made a few comments on the merits presented by the appeal but moved quickly to consider appellate jurisdiction. Rule 54(b) requires that an order be final and that there is no just reason to delay an appeal. In order for in order to be final, it must be the final disposition of a claim in the case. A court must compare the issue resolved in the claim on appeal with those that remain. That comparison here shows that the judgment was not final. The vexatious refusal to defend claim still pends. The common law fraud claim still pending includes allegations relating to General's refusal to defend. Since several of the counterclaims still pending are intertwined with the judgment on the duty to defend, the judgment was not final and the Court has no appellate jurisdiction.

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ABCARIAN v. MCDONALD (August 13, 2010)

Dr. Herand Abcarian was a senior surgeon at the University of Illinois College of Medicine and the University of Illinois Medical Center in Chicago. Over time, he clashed frequently with co-employees over issues like recruitment, compensation, risk management, and benefits. He alleges that several of these co-employees conspired to defame him and deprive him of his constitutional rights. In particular, he alleges: a) they caused the University to settle a malpractice claim against him for almost $1 million, b) the reported the malpractice settlement to federal and state databanks, and c) they caused the malpractice plaintiff's attorney to file suit against Abcarian only to then have it dismissed as a result of the settlement. Abcarian brought suit pursuant to § 1983, alleging constitutional violations of his right to free speech, equal protection, and procedural due process. Judge Der-Yeghiayan (N.D. Ill.) dismissed for failure to state a claim. He also denied Abcarian's requests to amend the judgment and to amend his complaint. Abcarian appeals.

In their opinion, Judges Kanne, Williams, and Hamilton affirmed. The Court first addressed his First Amendment claim that he was retaliated against for his speech. Garcetti dealt with an employer's retaliation and the Court noted that it had already reserved judgment once about whether that rule applied to a co-employee's retaliation. Again, the Court ducked the question whether Garcetti applies to all employees but did conclude that it applies to employees whose actions are advancing the interests of their employer. The Court also concluded that a practical view of the speech, keeping in mind Abcarian's role and the content and context of the speech, lead to the conclusion that he spoke as a public employee under Garcetti, not as a private citizen. His speech was therefore not protected. Abcarian's equal protection claim was a "class-of-one" claim under which a plaintiff need not allege a suspect classification. The plaintiff must, however, allege arbitrary treatment without a rational basis. The basis of Abcarian's claim is that the defendants reported the malpractice settlement. But they had no discretion in the matter. Federal and state law required the report and would have exposed them to punishment had they failed to report. The Court concluded that the lack of discretion precluded an equal protection claim. Abcarian's third constitutional claim was a procedural due process claim based on the defendants' defamation. In order for defamation to rise to the level of a due process violation, a plaintiff must allege that was stigmatized by publicly disclosed information and that he suffered a loss of employment opportunities. The Court concluded that Abcarian could not meet this test because he still maintains his same positions at the Medical Center and College of Medicine. One cannot be thought to have been deprived of something that one still possesses. Finally, the Court concluded that Abcarian could not and did not meet the test for a Rule 59(e) motion. Since a post-judgment amendment would only be allowed if his Rule 59(e) motion was granted and it was clear that the district court had entered a final judgment, Abcarian was also not entitled to amend his complaint.

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