Federal Civil Practice

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.

Dist. Ct. erred in dismissing plaintiff’s qui tam action under False Claims Act (FCA), alleging that defendant submitted false claims for Skilled Nursing Facility (SNF) services at time when defendant was neither providing said services as required by its contract with Medicaid officials nor made said services available through any third party. While Dist. Ct. dismissed case on finding that defendant insufficiently alleged that defendant knew that SNF services were material to its contract with Medicaid program, Ct. of Appeals held that complaint adequately alleged that defendant, as sophisticated player in medical-services industry, was aware that SNF services played material role in delivery of Medicaid benefits, where: (1) complaint alleged that defendant enrolled new people in skilled nursing tier at time it was not providing SNF services, and thus said allegation was sufficient to allege direct factual falsity for purposes of FCA; (2) any promise made by defendant to provide SNF services during contract renewal process with government at time it was not providing said services was fraudulent on its face; and (3) instant complaint was sufficient to state claim for implied false certification, where defendant’s contract with government, indicating that there was large gap between defendant receiving $3,127 per month per person for SNF services and only $54 per month per person for less skilled services, supported finding of materiality with respect to false claims seeking payments for SNF services. (Dissent filed.)

Ct. of Appeals lacked jurisdiction to consider defendants-police officers’ interlocutory appeal of Dist. Ct.’s order denying their motion for summary judgment, alleging qualified immunity in plaintiff’s section 1983 action, alleging that defendant’s used excessive force in shooting him three times during their attempt to apprehend plaintiff during intense standoff that occurred after defendants received report that person matching plaintiff’s description had carried gun during fight with third-party. Appeal regarding sufficiency of evidence with respect to denial of qualified immunity is not eligible for interlocutory consideration, and record contained factual disputes as to how much threat plaintiff posed to defendants at time of shooting and how actively he was resisting. Moreover, said factual disputes could not be separated from resolution of whether constitutional right had been violated. Ct. further rejected defendants’ contention that plaintiff’s constitutional claim was not clearly established at time of plaintiff’s arrest, where existing case law allowed defendants to use deadly force only where immediate threat of serious harm to defendants was present. As such, appellate jurisdiction was not proper, where record, when viewed in light most favorable to plaintiff, indicated existence of factual dispute as to whether plaintiff posed immediate threat of serious harm. (Dissent filed.)

Dist. Ct. did not err in granting defendant-City’s motion for summary judgment in plaintiffs-jail detainees’ section 1983 claim that challenged defendant’s policy that required arrested individuals housed in Cook County Jail to retrieve within 30 days their property that had been seized upon their arrest (because said property was not allowed in jail) or else face prospect of having said property be deemed abandoned for purposes of allowing defendant to sell or destroy said property. Ct. rejected plaintiffs’ claim that instant seizure and disposal of their property violated Takings Clause, where record showed that: (1) defendants provided written notice to plaintiffs of how to retrieve their property; (2) defendant could treat as abandoned any property that was unclaimed after 30 days; and (3) because abandoned property belongs to no one, defendant could dispose of said property as it saw fit. Ct. further found that 30-day notice was adequate for purposes of due process clause, where: (1) 30-day period was reasonable based on defendant’s ability to store said property; (2) content on defendant’s webpage provided sufficient information to allow prisoner or his or her representative to retrieve prisoner’s property; (3) record showed that website was active during relevant period; and (4) record showed, as practical matter, that prisoners had access either personally or through correctional worker to defendant’s website.

Dist. Ct. erred in granting motion for summary judgment filed by plaintiffs (individuals residing in Indiana, who were convicted of sexual offender crimes prior to passage of Indiana Sexual Offender Act (SORA), and who were required to register as sex offenders in another state), in action alleging that SORA’s requirement that they register as sex offenders after they moved to Indiana based upon out-of-state registration requirement was unconstitutional, since it violated their right to travel under Privileges or Immunities Clause, their right to equal protection under 14th Amendment, and Article I’s prohibition on ex post facto laws. While plaintiffs argued that SORA violated their right to travel by treating them differently based on their length of residency in Indiana, Ct. of Appeals found that SORA does not discriminate based on residency where SORA obligated all sex offenders, both old and new residents, to register based on their prior convictions. Fact that registration obligation came from different state did not require different result. Ct. also found that SORA did not violate federal Ex Post Facto Clause because SORA is not punitive in nature, where: (1) SORA does not actually inflict what is historically and traditionally considered as punishment; (2) restrictions/restraints on plaintiffs residing in certain areas under SORA was not tantamount to banishment; and (3) aim of SORA of advancing public safety has rational connection to non-punitive purpose. Ct. remanded matter back to Dist. Ct. for reconsideration of plaintiff’s equal protection claim under rational basis standard, where Dist. Ct.’s strict scrutiny standard did not apply, since SORA did not violate any fundamental right such as right to travel. (Dissent filed.)

Dist. Ct. erred in dismissing plaintiffs’ lawsuit seeking to enforce $156 million judgment in action under federal Anti-Terrorism Act, alleging that several American nonprofit organizations aided Hamas, who killed plaintiff’s son while son was studying abroad in Israel. Instant lawsuit sought recovery against two different American entities and three individuals who, according to plaintiffs, were alter egos of now defunct original defendants, and thus were liable for remainder of $156 million judgment. Dist. Ct., though, after allowing only limited discovery, found that new defendants were not alter egos of original defendants and then dismissed instant action for lack of subject matter jurisdiction. Ct. of Appeals, however, in remanding matter to Dist. Ct., held that: (1) Dist. Ct’s finding on alter ego question constituted improper merits determination that went beyond proper jurisdictional inquiry; and (2) because instant action arises under section 2333(a) of Anti-Terrorism Act, where plaintiff had alleged that new entity merely operated under new name of one original defendant, Dist. Ct. had jurisdiction over matter and should have allowed case to proceed on its merits that was consistent with ordinary course of civil litigation. Ct. further noted that Dist. Ct., when resolving jurisdictional issue, improperly failed to presume truth of plaintiffs’ allegations or take facts in light most favorable to plaintiffs.