Federal Civil Practice

Ct. of Appeals granted defendants-federal officials’ motion to stay Dist. Ct.’s order that enjoined defendants from excluding plaintiffs-businesses that offered adult entertainment in form of nude or nearly nude dancing from second round of Paycheck Protection Program (Program), even though Congress excluded plaintiffs’ businesses and other categories of businesses from said Program. Ct. of Appeals found that defendants satisfied standards for obtaining stay of Dist. Ct.’s injunction pending appeal, where plaintiffs are unlikely able to show that denying them subsidized loans under Program violated Constitution. Ct. of Appeals further doubted plaintiffs’ claim that exclusion from Program violated their free speech, First Amendment rights, where Ct. observed that Congress’ exclusion of plaintiffs’ businesses from Program was not attempt to regulate or suppress plaintiffs’ adult entertainment businesses, but rather was choice not to subsidize them. Moreover, selective categorical exclusions from government subsidies do not offend First Amendment in absence of viewpoint or invidious discrimination. Also, defendant’s rationale for exclusion, i.e., to not subsidize deleterious secondary effects of sex-oriented businesses, satisfied rational-relation test and could provide rational basis for Congress to choose not to subsidize them.

Ct. of Appeals lacked jurisdiction to consider defendant-police officer’s interlocutory appeal from Dist. Ct.’s order, denying defendant’s motion for summary judgment that alleged qualified immunity in plaintiff’s section 1983 action, alleging that defendant used excessive force when arresting him. Although defendant’s dashcam captured defendant’s arrest of plaintiff, including moment when defendant tased plaintiff, record supported Dist. Ct.’s finding that when facts were viewed in light most favorable to plaintiff, one reasonable interpretation of dashcam video was that plaintiff was not actively resisting arrest when defendant tased him. Ct. of Appeals rejected defendant’s claim that dashcam video contradicted Dist. Ct.’s finding that video was open to interpretation, and while dashcam video could support defendant’s claim that plaintiff had actively resisted arrest moments before defendant had tased him, Ct. of Appeals’ review of dashcam video did not utterly discredit Dist. Ct.’s finding that there was factual dispute over whether plaintiff was actively resisting arrest when defendant had tased him. As such, instant factual dispute deprived Ct. of Appeals of jurisdiction to consider instant interlocutory appeal. Ct. further observed that Dist. Ct.’s finding did not foreclose availability of qualified immunity at trial.

Dist. Ct. did not abuse its discretion in dismissing under Rule 4(m) plaintiff’s personal injury action, where record showed that: (1) plaintiff filed instant action two days prior to expiration of limitations period; (2) plaintiff was warned that his lawsuit would be dismissed on March 5, 2019 if plaintiff had not filed proof of service by that date; (3) instead of filing proof of service by March 5, 2019, plaintiff filed motion for change of venue to Northern District of Indiana on that day; (4) after change of venue motion was granted, plaintiff was directed to serve copy of venue order on defendants within five days; (5) plaintiff served venue order, but did not serve summons and/or complaint on defendants at that time; (6) three months later, one defendant filed motion to dismiss case for, among other things, plaintiff’s failure to timely serve summons and complaint; and (7) summons and complaint were served on all defendants between 238 and 244 days after filing of complaint. Dist. Ct. could properly dismiss complaint, where plaintiff missed three opportunities to serve defendant, that included plaintiff’s failure to serve defendants by (1) original 90-day period prescribed under Rule 4(m); (2) March 5, 2019 deadline set by original Dist. Ct.; and (3) three-month period following change of venue. Record also showed that Dist. Ct. methodically considered factors set forth in Cardenas, 646 F.3d 1001 that pertained to instant motion to dismiss and made no factual findings that were clearly erroneous. As such, Dist. Ct.’s dismissal ruling was neither arbitrary nor unreasonable. Fact that instant dismissal essentially precluded plaintiff from filing any future complaint because limitations period had expired did not require different result.

In breach of contract action, remand was required for new consideration of intervenor’s motion to dismiss instant action for lack of diversity jurisdiction. Dist. Ct. correctly rejected intervenor’s contention that plaintiff improperly failed to join necessary parties that would destroy diversity jurisdiction, where Dist. Ct. observed that under Illinois law, plaintiff may sue any obligated party, but is not required to sue all obligated parties, and thus plaintiff could properly chose not to sue non-diverse potential defendants. However, record showed that: (1) while initially named parties were completely diverse, receivership was appointed for one defendant; (2) said receivership was expanded to include parent company of named defendants that had same Illinois citizenship as plaintiff; and (3) there were allegations that defendants’ parent company made all decisions for its subsidiaries. As such, Dist. Ct. on remand must use nerve center test to determine whether instant named defendants also had Illinois principal place of business on theory that Illinois is where “single enterprise” of defendants’ parent company is located. Ct. of Appeals also dismissed on mootness grounds appeals of certain creditors of defendants, who alleged that Dist. Ct. erred in improperly entering anti-litigation injunction that precluded them from filing involuntary bankruptcy petition against defendants. While said injunction was part of receivership agreement, said creditors filed involuntary injunction anyway, and although Dist. Ct. initially found bankruptcy petition void, it subsequently found it lacked authority to void said petition and declined to hold instant creditors in contempt of court. As such, appeals of creditors were dismissed as moot, where receivership was terminated, bankruptcy petition was allowed to proceed, and no injunction has been entered against instant creditors or any other interested party.

Dist. Ct. erred in dismissing plaintiff’s section 1983 and 1985 action, alleging that defendants-City and certain City employees violated plaintiff’s due process rights when making administrative determination regarding his rental property, where Dist. Ct. based its dismissal on Rooker-Feldman doctrine, which prohibits lower federal courts from reviewing state-court judgments. Rooker-Feldman doctrine did not apply, where plaintiff’s claims are not direct challenges to any state-court order, and where: (1) defendants’ challenged conduct, such as defying plaintiff’s subpoena and providing false testimony at hearing, occurred prior to any judicial involvement. Moreover, plaintiff’s federal claims, which could exist without any state-court judgment, were capable of being separated from instant state-court judgment. As such, Dist. Ct. may exercise jurisdiction over plaintiff’s case.

Dist. Ct. did not err in granting defendants-three prison officials’ motion for summary judgment in plaintiff-prisoner’s section 1983 action, alleging that defendants used excessive force during prison shakedown, where defendants asserted that plaintiff had failed to exhaust his administrative remedies by filing prison grievance prior to filing instant lawsuit. Although plaintiff claimed that grievance procedure was effectively not available to him because filing grievance would have resulted in additional abuse from abuser, plaintiff’s case against said defendants was properly dismissed, where record showed that: (1) filing of grievance would not have involved alleged abuser, and that plaintiff was aware of such procedure; and (2) plaintiff had filed three other grievances for incidents that allegedly happened on same day as shakedown. Dist. Ct. erred, though, in dismissing remainder of plaintiff’s case as sanction for plaintiff’s conduct in delaying identification of alleged John Doe defendant, where plaintiff had been aware of said defendant’s first name for over two years and failed to alert Dist. Ct.  Dismissal was improper, where Dist. Ct. had failed to make required finding that plaintiff willfully abused judicial process or otherwise conducted litigation in bad faith; (2) Dist. Ct. failed to consider any lesser sanction; and (3) Dist. Ct. failed to find that plaintiff acted or failed to act with degree of culpability that exceeded simple inadvertence or mistake.

Ct. of Appeals denied plaintiffs’ request for issuance of injunction that would preclude City from beginning construction on Obama Presidential Center in Jackson Park, Chicago during pendency of plaintiffs’ appeal of Dist. Ct.’s order that denied their request to enjoin City from beginning construction on said Center. Record showed that: (1) defendants had concluded that construction of Center at said site would have only insignificant effect on environment that would not require environmental impact statement, and that site constituted least damaging alternative with respect to environment; and (2) neither defendant-agency had authority with respect to decision to place Center in Jackson Park. Ct. of Appeals rejected plaintiffs’ claim that defendants should have made instant environmental assessment when considering possibility that Center could be placed at different site. It also concluded that: (1) it owed deference to defendants-agencies with respect to their determination of scope of project; and (2) neither defendant need make environmental assessment with respect to placement of project that was outside their authority. Also, Ct. held that plaintiffs were unlikely to overcome deference owed to defendants regarding their substantive judgments regarding environmental impact, especially where defendants reasonably determined that unaffected 500-plus acres of Jackson Park would provide wildlife with comfortable environment during construction of Center.