Plaintiffs' Failure To Serve Defendant For 500+ Days Did Not Warrant Extension
CARDENAS v. CITY OF CHICAGO (July 20, 2011)
Chicago Police Officer Alejandro Gallegos obtained a search warrant that authorized a search of Maria Cardenas' apartment. Gallegos and other officers executed the warrant on December 14, 2007. According to Cardenas' complaint, the officers entered without knocking, threatened Cardenas and others with guns, and searched recklessly. They found nothing and left. Cardenas and the other apartment occupants filed suit against Gallegos and the City of Chicago. The Cook County Sheriff successfully served the City. They attempted to serve Gallegos through the Police Superintendent's Office but the summons was returned unserved in May 2008. In November, plaintiffs’ counsel wrote to the City’s counsel and asked the City to waive service on Gallegos or to provide his home address. In a telephone conversation in December, the City’s counsel informed plaintiffs’ counsel did it could not do the former and would not do the latter. The City and Gallegos moved to dismiss in September of 2009. Gallegos sought dismissal because he had never been served. The City sought dismissal under the Tort Immunity Act on the grounds that the City could not be liable for Gallegos's actions where Gallegos himself is not liable. Plaintiffs opposed the motion and also obtained an alias summons that they served properly through the Police Department’s Office of Legal Affairs on November 9. Judge Norgle (N.D. Ill.) granted the motions to dismiss. He concluded that plaintiffs had not served Gallegos in a timely manner and found no good cause that would support an extension. He also agreed with the City that there was no municipal liability without Gallegos in the case. Plaintiffs appeal.
In their opinion, Judges Posner, Kanne, and Hamilton affirmed. Any person that files a lawsuit has 120 days within which to serve a copy of the summons and complaint on each defendant. A district court judge has the discretion to extend the 120-day period if there is a showing of good cause. The Court noted that it reviewed such decisions on an abuse of discretion standard. The Court first rejected plaintiffs' contention that the May 2008 attempted service on the Superintendent was sufficient. That attempt occurred before the case was removed so Illinois law applies. Under Illinois law, service on a defendant’s employer is not sufficient. Next, the Court found no abuse of discretion in the denial of an extension. It is clear that the district court considered a number of factors, including the fact that the expiration of the statute of limitations would bar a refiling of the suit. The plaintiffs did not perfect service for over a year and a half after filing the suit, they took very few steps to attempt to do so, and they knew of the consequences of the failure to do so. The Court could not conclude that the district court abused its discretion in failing to grant an extension. Finally, the Court conceded that a dismissal of this type is usually made without prejudice. Here however, where the statute of limitations has run, a dismissal with prejudice is appropriate.
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Valero Energy Corp., a large U.S. refiner, acquired Ultramar Diamond Shamrock Corporation ("UDS”) in 2001. Prior to the transaction, Valero received relevant tax advice from Arthur Andersen. With Arthur Andersen's help, Valero initiated a complex set of transactions that resulted in tax deductible losses in excess of $100 million. The size of the deduction caught the eye of the IRS, which issued a summons to Arthur Andersen seeking documents relating to its tax analysis for Valero or UDS. Valero moved to quash the summons, in part based on the tax practitioner-client privilege. The government argued that the tax practitioner-client privilege did not apply because of the statutory exception for documents made in connection with the promotion of a tax shelter. The district court originally upheld Valero’s claim of privilege, concluding that the government failed to meet its burden. On a second round of document production, however, the government again challenged the privilege and supported its challenge with a detailed affidavit. This time the district court concluded the government met its burden with respect to some documents and ordered them produced. Valero appeals.