Federal Civil Practice

Dist. Ct. erred in granting defendant-insurance company’s motion to dismiss plaintiff-insured’s breach of contract claim arising out of defendant’s failure to defend plaintiff in underlying intellectual-property action, under circumstances where plaintiff had previously prevailed in state-court action under declaratory-judgment statute (735 ILCS 5/2-701(c)) that concerned similar duty to defend plaintiff in same underlying action, and where plaintiff had received certain incidental relief in prior action. Record showed that: (1) prior declaratory action did not allow plaintiff to receive consequential damages or certain fees arising out of defendant’s failure to defend plaintiff in underlying lawsuit; (2) plaintiff subsequently filed in state and federal courts similar breach of contract claims that sought consequential damages arising out of defendant’s failure to defend plaintiff in same underlying action; and (3) state court eventually granted plaintiff’s voluntary motion to dismiss state-court action and expressly reserved plaintiff’s ability to proceed on his federal court breach of contract action. While Dist. Ct. granted defendant’s motion to dismiss on claim and issue preclusion grounds, claim preclusion did not apply, where second state-court action expressly reserved plaintiff’s ability to proceed on instant breach of contract action. Moreover, issue preclusion did not apply, where certain consequential damages and fees sought in instant breach of contract claim could not have been asserted in prior declaratory relief action.

Plaintiff lacked standing to pursue his Fair Credit Reporting Act (FCRA) claim against defendant-bank, alleging that defendant had failed to investigate two credit reporting disputes regarding plaintiff’s loan payments. Plaintiff was required to show injury that was something more than statutory violation for purposes of Article III standing, and plaintiff’s alleged injury in form of lower credit score was not traceable to defendant’s alleged failure to investigate, where subject disputes arose from notices that were issued in January of 2012, while plaintiff’s alleged drop in credit score occurred in November of 2011. Also, Dist. Ct. could properly grant defendant’s summary judgment motion with respect to plaintiff’s breach of contract and breach of fiduciary claims, where plaintiff’s proffered evidence of his damages was only speculative.

Dist. Ct. did not err in only partially granting plaintiff’s request for $200,000 in attorney’s fees as prevailing party in Fair Labor Standards Act claim, where Dist. Ct. awarded only $70,000 in fees. Dist. Ct. could properly reduce plaintiff’s counsel’s requested billing rate of $450 per hour to $350 per hour and could properly strike time spent by counsel in: (1) litigating counsel’s ability to act as class counsel; (2) time spent generating second motion for summary judgment; and (3) performing paralegal work in calculating damages. Also, Dist. Ct. could reduce lodestar figure to reflect fact that plaintiff’s counsel failed in lawsuit’s primary goal of obtaining judgment on behalf of class and collective. Ct. further noted that additional reduction in fee award was reasonable, where plaintiffs recovered only $60,000 out of $103,500 sought in claimed damages.

Ct. of Appeals lacked jurisdiction on lack of finality grounds to consider propriety of Dist. Ct.’s order denying company’s motion to quash administrative warrant issued by Dist. Ct. at request of Occupational Safety and Health Administration (OSHA) seeking to inspect company’s premises after employee of company made telephonic complaint about forklift accident. Record showed that Dist. Ct.’s denial of motion to quash was not final under 28 USC section 1291, where there remained pending in Dist. Ct. OSHA’s motion for contempt against company regarding company’s failure to comply with warrant, as well as OSHA’s motion to toll limitations period. Ct. rejected company’s claim that exception to finality rule applied, where Ct. observed that company had opportunity to raise propriety regarding issuance of warrant in pending contempt proceeding.

Dist. Ct. did not err in granting defendants-jail probation officers’ motion for summary judgment in plaintiff-pretrial detainee’s section 1983 action, alleging that defendants violated his due process rights by authorizing his continued detention for period of four days after they were either aware or should have been aware that he was not person identified in 2015 arrest warrant that formed basis of his detention. Record showed that plaintiff’s brother had lied to police in 2015 and identified himself by giving them name and birth date of his brother (plaintiff), and 2015 arrest warrant was subsequently issued in plaintiff’s name when his brother failed to report for probation. Plaintiff was subsequently arrested on unrelated offense, but was held on 2015 arrest warrant. On next day, plaintiff’s girlfriend told defendants that they had wrong person in custody, that plaintiff’s brother was actual person subject to warrant, and that plaintiff was on parole in Pennsylvania at time of issuance of 2015 arrest warrant in Wisconsin. While defendants did not release plaintiff until 4 days later, plaintiff failed to show any due process violation, where: (1) defendants took steps to investigate girlfriend’s claim, and (2) plaintiff failed to show that defendants ignored evidence, and defendants otherwise could properly take steps to verify girlfriend’s information. Fact that defendants might have been negligent in delaying confirmation that plaintiff was wrong person in custody was insufficient to establish due process claim.

Dist. Ct. did not err in denying plaintiff’s motion to remand its breach of contract action back to state court that had been removed to federal court and then granting defendants’ motion to dismiss instant case based on arbitration clause contained in said contract. Dist. Ct. could properly reject plaintiff’s claim that removal, which occurred months after case had been filed and certain discovery had occurred, was untimely, where: (1) complaint did not specify amount in controversy; (2) instant removal occurred seven days after plaintiff’s counsel emailed defendants' counsel with statement that plaintiff was seeking $250,000 in damages; and (3) said email was first notice that case was removable, and thus removal was timely, since it occurred within 30 days of said notice. Fact that defendants filed in state court motion to dismiss and began discovery prior to removing case did not constitute waiver of any right to remove case. Also, Dist. Ct. did not err in dismissing case based on arbitration clause, where plaintiff’s claims came within scope of said clause. Moreover, plaintiff’s contention that defendants had fraudulently misrepresented subject-matter of contract did not require different result, where plaintiff never claimed that it was fraudulently induced into agreeing to arbitrate said issue.

Dist. Ct. did not err in granting defendants-police officials’ motion for summary judgment in plaintiff’s section 1983 action, alleging that defendants violated decedent’s 4th Amendment rights by using excessive force during decedent’s encounter with defendant-officer, where record showed that: (1) while officer was investigating reports at 3:30 a.m. that someone was stealing items from cars, decedent picked up hunting knife and approached officer; (2) officer instructed decedent to put knife down and stand still; (3) decedent instead held up knife and came within three feet of officer; (4) decedent threw knife at officer and hit him in arm with knife; and (5) officer fired gun and fatally shot decedent in torso. While plaintiff asserted that decedent posed no danger to officer at time officer shot decedent, physical evidence, such as bullet track, supported officer’s version of simultaneous actions of decedent throwing knife and officer firing gun. Moreover, plaintiff cannot withstand summary judgment by merely doubting officer’s version of events without presenting evidence to support its theory of case, since mere disbelief of only witness to encounter would mean that record is “empty,” and empty record means that plaintiff loses, because plaintiff had burden of production and persuasion. Ct. further observed that officer’s use of force remained reasonable after decedent deployed weapon, did not surrender and remained dangerous when advancing on officer.

In section 1983 action by plaintiff-prisoner, alleging that defendants-police officials violated his 4th Amendment rights by providing false information to obtain search warrant and by executing warrant in unreasonable manner, Dist. Ct. erred in dismissing certain defendants, who had been misidentified or identified through code in original complaint, where Dist. Ct. held improper belief that it was too late for plaintiff to attempt to substitute properly identified defendants. While plaintiff must complete substitution prior to expiration of stature of limitations, said period was tolled by time spent by Dist. Ct. screening plaintiff’s complaint under section 1915A. Moreover, Dist. Ct. improperly attributed said time to plaintiff. Also, remand was necessary for determination under Rule 15(c)(1)(C) as to whether newly identified defendants knew or should have known that they would have been party to plaintiff’s lawsuit but for mistake in filing original complaint.

Dist. Ct. did not err in dismissing for failure to state cause of action plaintiff-pretrial detainee’s complaint, alleging that defendant-City’s policy of selling or throwing away property surrendered by pre-trial detainees upon entry into jail, where detainee fails to make arrangements to have said property claimed within 30 days after entry into jail, violated his 4th Amendment and due process rights. Plaintiff’s arguments had previously been rejected in Conyers, 10 F.4th 704, where court held that 4th Amendment did not regulate disposition of seized property, and that due process clause was not violated, where defendant provided notice and opportunity to reclaim detainee’s property. Ct. rejected plaintiff’s contention that defendant must serve as unpaid custodian of his property for as long as it takes for him or his designee to retrieve his property.

Ct. of Appeals dismissed as moot appeal by defendant (plaintiff’s father) of Dist. Ct.’s order that remanded back to state court plaintiff’s state court action that had been removed by defendant to federal court, where instant removal had occurred more than one year after state court action had been filed. State court action concerned plaintiff’s attempt to obtain both constructive trust over defendant’s voting shares in corporation, as well as injunction to stop defendant from voting his shares in way that would adversely affect corporation or plaintiff’s interest in said corporation. During pendency of appeal, defendant died. As such, appeal became moot, where: (1) defendant’s death precluded any need for constructive trust, where agreement by plaintiff’s parents required defendant to transfer his shares in corporation to plaintiff at defendant’s death; and (2) there was no longer any need to enjoin defendant from taking any action that might adversely affect corporation.