Federal Civil Practice

Dist. Ct. erred in dismissing for failure to state viable claim plaintiff-Trustee’s action alleging that defendant-law firm committed legal malpractice by failing to advise now insolvent investment fund to seek additional protections when lending fund’s money to third-party, who used said funds for improper Ponzi scheme and by failing to advise fund of possibility that third-party was committing fraud. Dist. Ct. improperly analyzed motion to dismiss from viewpoint of defendant and failed to address plaintiff’s main contention that defendant failed to alert fund that there was increased risk in allowing third-party to repay loan through himself rather through direct payment from more secure entity. Ct. rejected proposition that transaction lawyer never needs to supply client with legal information that affects degree of business risk associated with particular transaction and instead found that said lawyer must tell clients which different legal forms are available to carry out client’s business, and how any risks of that business differ with different legal forms.

Dist. Ct. did not err in denying defendant’s motion to vacate default judgment that had been entered after defendant’s original counsel had failed to file answer to complaint. Instant motion to vacate had been filed within six months of entry of final judgment, and thus “mistake, inadvertence, surprise or excusable neglect” standard applied under Rule 60(b)(1). Moreover, plaintiff failed to show that both its own conduct and conduct of its lawyer satisfied definition of “excusable neglect,” where: (1) defendant initially failed to tender complaint to its insurer when it received instant personal injury complaint; and (2) defendant failed to act promptly to protect itself after being alerted by co-defendant that defendant’s counsel had failed to file answer to complaint.

Dist. Ct. did not err in denying defendants’ motion to vacate default judgment entered against them in action alleging that defendants breached franchise agreement, even though defendants argued that they were victims of their original attorney’s failure to file answer to complaint or file more timely motion to vacate default judgment. Instant motion to set aside default judgment was filed more than one year after entry of final judgment, and thus defendants were required under Rule 60(b)(6) to establish existence of “extraordinary circumstances.” Moreover, defendants did not establish such standard where defendants merely alleged that their counsel committed malpractice. As such, while defendants had potential malpractice claim against their attorney, they could not reopen instant case, where plaintiff played no role with respect to any malpractice committed by defendant’s attorney. Ct. further observed that defendants could have taken steps to discover their attorney’s alleged inaction and could have taken more timely steps to retain substitute counsel.

Dist. Ct. did not err in denying plaintiff’s request for preliminary injunction in action alleging that defendants violated plaintiffs’ constitutional rights by requiring them to take annual drug tests as part of condition for plaintiffs being allowed to renew residential leases as tenants in certain housing buildings. Dist. Ct. could properly find that plaintiffs’ underlying claim lacked merit where source of instant drug-testing policy were defendants-private owners of said buildings rather than defendant housing authority, and where said policy would therefore be beyond reach of 4th Amendment. Moreover, while there was evidence that housing authority did not disapprove of drug testing in subject buildings and had requested that one private owner conduct said tests, record also showed that decisions to drug-test were made by building owners, and that housing authority did not coerce said owners to require drug testing of its tenants.

Dist. Ct. did not err in dismissing with prejudice plaintiff’s pro se second-amended complaint alleging violations of Title VII, as well as section 1981 and 1983, arising out of her termination as bus driver. Dist. Ct. identified certain deficiencies in plaintiff’s second-amended complaint, and plaintiff failed to indicate either in her post-trial motion or on appeal how any proposed third-amended complaint would cure said deficiencies. Ct. rejected plaintiff’s contention that she was entitled to file third-amended complaint because counsel who had assisted her in drafting original complaint was in process of “getting up to speed” on her case.

Dist. Ct. did not err in awarding only $303,000 in attorney fees to plaintiffs’ class counsel as part of plaintiffs’ claim that defendant had failed to timely notify class members of their COBRA rights. While class counsel contended that he was entitled to additional fees from instant class members under “common fund” theory, counsel was not entitled to any additional fees, where his initial fees were received pursuant to fee-shifting statute. Ct. further noted that additional fees would be unwarranted in instant case where class counsel: (1) had filed untimely notice of appeal as to other aspects of underlying case; and (2) sought remand of case based, in part, on claim that certain class members had received too much compensation.

Dist. Ct. did not err in granting defendants-police officials’ motion for summary judgment in section 1983 action alleging that plaintiff’s decedent was targeted and killed in retribution for his actions as police informant, and that defendants were liable for failing to protect him. Fourteenth Amendment imposes no general duty on state to protect individuals from harm by private actors, and plaintiff otherwise failed to establish any causation linking murder of plaintiff’s decedent by unknown assailant to any disclosure by defendants that decedent was police informant.

Ct. of Appeals lacked jurisdiction to consider plaintiff’s appeal of Dist. Ct. order that granted defendants’ motion for partial summary judgment in action alleging copyright infringement and seeking damages and injunctive relief that would prohibit use of certain photo. Dist. Ct. erroneously issued final judgment after ruling on defendants’ partial summary judgment motion, where issue of plaintiff’s injunctive relief was never adjudicated and remained pending.

Dist. Ct. did not err in denying insurance company’s motion to intervene in class action lawsuit under Telephone Consumer Protection Act (TCPA) action for purposes of challenging proposed settlement of lawsuit that called for payment of $20 million to plaintiffs-class members with defendant insured paying only $200,000, and with balance to be collected against instant insurance company if instant TPCA claim was covered under policy issued by insurance company. Insurance company’s intervention motion was untimely since it should have been brought at beginning of lawsuit approximately three years prior to filing of instant motion, even though insurance company, which had denied coverage in beginning stages of instant lawsuit, had cause to believe that insured and plaintiffs might collude to stick insurance company with excessive recovery through proposed settlement. Ct. further noted that insurance company was successful in first stage of state court proceeding seeking determination as to whether instant insurance policy provided coverage for TCPA claim.

Dist. Ct. did not err in dismissing plaintiff’s habeas petition challenging certain aspects of his 2005 criminal conviction for aggravated criminal sexual abuse, where plaintiff had already served his full sentence for his 2005 conviction, and where plaintiff was currently under civil confinement pursuant to Illinois Sexually Violent Persons Commitment Act. While defendant argued that Dist. Ct. had jurisdiction to consider his habeas petition because he still was “in custody” for purposes of his sexual abuse conviction because said conviction was necessary predicate for his current civil confinement, Dist. Ct. lacked jurisdiction to consider plaintiff’s habeas petition because plaintiff’s civil confinement was mere collateral consequence of his criminal conviction, and thus was insufficient to render him in custody pursuant to his 2005 conviction.