Federal Civil Practice

Dist. Ct. erred in dismissing for failure to prosecute plaintiff-prisoner’s section 1983 action alleging deficient health care/conditions of confinement, as well as use of excessive force, where plaintiff had failed to comply with one deadline calling for filing of third-amended complaint. Record showed that plaintiff had history of mental illness, and that plaintiff had asked Dist. Ct. three times for appointment of counsel. With respect to third request for appointed counsel, Dist. Ct. improperly directed plaintiff to personally ask proposed counsel to represent him, and Dist. Ct. otherwise failed to consider plaintiff’s competency to represent himself in light of his mental illness and complexity of medical evidence at issue in his lawsuit. As such, Dist. Ct.’s denial of request for appointed counsel failed to meet “reasonableness standard.” Moreover, appointment of counsel would have significantly changed outcome of case, where said counsel could have complied with Dist. Ct.’s pleading requirements. Also, dismissal based on failure to meet one deadline was harsh, where plaintiff had twice attempted to file proper amended complaint, and where plaintiff at same time was requesting appointment of counsel.

Dist. Ct. denied defendants’ motion for recusal under 28 USC section 455(a), even though defendants alleged that Dist. Ct.’s daughter was employed at public interest entity, under circumstances where plaintiff’s law firm provided funds for same public interest entity and donated lawyer time to said entity for legal cases undertaken by entity. Defendants thereafter sought review of said denial via petition for writ of mandamus filed in Ct. of Appeals. Ct. of Appeals noted that mandamus petition had been traditional means to seek recusal of Dist. Ct. judge under section 455(a) after recusal motion had been denied by Dist. Ct., but that after Fowler, 829 F.3d 788 (2016), party can seek review of denial of recusal motion through appeal of final judgment. As to merits of recusal question, Ct. of Appeals found that there was no reasonable basis to question Dist. Ct.‘s impartiality with respect to its consideration of issues in underlying section 1983 action alleging that defendants violated plaintiff’s constitutional rights arising out of plaintiff’s eventual acquittal in murder trial, where: (1) there was no evidence of judge shopping when underlying case was filed before different Dist. Ct. judge; (2) defendants made no suggestion of any apparent partiality when case was reassigned to instant Dist. Ct. judge; and (3) record showed that Dist. Ct.’s daughter has been screened from involvement in cases before instant Dist. Ct. judge. Ct. further rejected notion that daughter’s employment with public interest entity, by itself, created appearance of impropriety in eyes of objective observer. It also found that Dist. Ct.’s attendance at fundraiser for “Innocence Project” during which plaintiff in underlying lawsuit was cited did not require recusal of Dist. Ct. judge.

Dist. Ct. did not err in finding that defendant’s policy limiting prisoners to three books per cell, when plaintiff-prisoner had 30 books in his cell, did not violate plaintiff’s First Amendment rights, where: (1) defendants allowed plaintiff to read as many books as he wanted; and (2) instant limitation represented valid penal interest of curtailing labor intensive search of contraband capable of being hidden in books. However, Dist. Ct. erred in granting defendant’s motion for summary judgment with respect to plaintiff’s claim that defendants violated his due process right when they destroyed excess books without his permission and without asking him which three books he wished to retain. In this respect, defendants failed to establish that books are “contraband” that would support defendants’ decision to destroy excess books without notice. As such, remand was required to allow plaintiff to establish that defendants had policy of destroying excess book and to determine what choices were offered to plaintiff when guards discovered excess books.

Dist. Ct. did not err in granting plaintiff’s motion for summary judgment in plaintiff-class action alleging that defendants violated Telephone Consumer Protection Act (TCPA) by sending fax advertisement to 11,422 different numbers from recently acquired customer list without having obtained customers’ permission to do so. Defendants conceded that fax was advertisement that lacked any disclaimer explaining how to opt out of future faxes, and thus defendants could not rely on safe-harbor provisions of TCPA to avoid liability. Moreover, defendants could not avoid liability based on prior express permission send fax advertisements, where affidavits from customers on list stated only that it generally gave permission to seller of customer list to send fax advertisements, that said customers would have given permission to send fax advertisements, or that customers had agreed to receive product information from seller of customer list, since defendants needed to show that permission to send fax advertisements was given prior to sending of fax. Ct. further found that seller of customer list could not transfer to another entity any customer permission to send fax advertisements. Also, Dist. Ct. could properly calculate statutory damages without conducting evidentiary hearing where, as here, there was no dispute with respect to number of fax advertisements sent by defendants.

Ct. of Appeals lacked jurisdiction over defendant’s appeal of Dist. Ct. order finding that defendants must arbitrate any dispute with plaintiff before National Futures Association (NFA), as opposed to FINRA, pursuant to agreement signed by both parties. Instant order in plaintiff’s action seeking declaratory judgment to require defendants to arbitrate their disputes before NFA, was not final and appealable pursuant to section 1291 of Judicial Code, where Dist. Ct. had yet to resolve arbitration venue, grounds for any permanent injunction, time needed for defendants to comply with arbitration order and attorney’s fees. Ct. rejected defendants’ argument that order was appealable under 9 USC sections 16(a)(2) and (a)(3) as “injunction against arbitration” or under 28 USC section 1292(a)(1) as order granting injunction, where record showed that Dist. Ct. did not enter any injunction. Moreover, Ct. likened instant Dist, Ct. order to entry of pro-arbitration decision that was coupled with stay of remainder of case, which was unappealable under Moglia, 546 F.3d 835, in absence of section 1292(b) certification.

Dist. Ct. did not err in overruling defendant-law firm’s objection to different law firm’s petition to adjudicate and enforce its attorney’s lien in amount of $126,663.66, under circumstances where: (1) law firm had represented defendant for three-month period in underlying attorney’s fee dispute arising out of $4.2 million settlement; and (2) basis for law firm’s withdrawal was fact that, unknown to law firm at time it had agreed to represent defendant, defendant had previously given to different law firm security interest in defendant’s interest in recovery of fees from underlying $4.2 million settlement, which was same source of funds that would have been used for payment of instant law firm’s fees. Law firm could properly pursue its claim under quantum meruit theory, where defendant’s contingency agreement with law firm had terminated at time law firm withdrew as counsel for defendant. Moreover, law firm's withdrawal from representing defendant was reasonable, where: (1) law firm was faced with reality that it would not be paid for its continued representation of defendant due to existence of superior security interest in defendant’s interest in fees from underlying $4.2 million settlement; (2) client’s refusal/inability to pay attorney’s fees during course of litigation is good cause to withdraw from case; and (3) defendant never contested law firm’s claim that irreconcilable differences prevented it from continuing its representation of defendant. Also, law firm’s legal services played vital role in defendant’s recovery of fees in underlying $4.2 million settlement.

Dist. Ct. did not err in instant interpleader action in finding pursuant to contingency fee agreement that plaintiff-attorney and defendant-attorney were entitled to only one-third of $4.2 million settlement as attorney's fees in underlying RICO action, where settlement agreement made no mention of attorney’s fees award to said attorneys, and where contingency fee agreement called for said attorneys to receive one-third of settlement proceeds. Moreover, record supported Dist. Ct.’s award of 60 percent of said fees to defendant-attorney and 40 percent to plaintiff-attorney based upon: (1) co-counsel agreement that, in part, proportioned any fee award based on number of hours worked; and (2) defendant’s failure to document time spent on case so as to establish his claim for greater percentage of said fees. Ct. rejected and found frivolous defendant-attorney’s claim that fee award in underlying action should have been $2.5 million based on alleged oral agreement that was separately negotiated and included in $4.2 settlement figure. Too, Dist. Ct. did not err in sanctioning defendant-attorney for raising frivolous claim that fee award should have been $2.5 million, where said claim was made in spite of clear language to contrary in contingency fee agreement, and where there was no mention of alleged $2.5 agreement in settlement award. Dist. Ct. also did not err in sanctioning defendant attorney for vexatious conduct under 28 USC section 1927, where defendant-attorney: (1) caused continuance of hearing, where defendant-attorney sought permission to appear at said hearing, but could not participate due to ambient noise at location where he made said call; (2) filed second amended counterclaim that contained numerous substantive changes in violation of Dist. Ct.’s order; and (3) made last-minute continuance motion, where defendant waited 58 days to make said motion, and where defendant explained that motion was necessary to obtain hearing transcript.

Dist. Ct. did not err in granting defendants-Sheriff and County’s motion for summary judgment in plaintiff-pre-trial detainee’s section 1983 action, alleging that defendant’s practice of ignoring medically necessary lower bunk prescriptions violated his 8^th amendment rights, where: (1) plaintiff had such prescription to accommodate his medical condition; (2) defendant nevertheless placed plaintiff in upper bunk bed; and (3) plaintiff subsequently fell off upper bunk bed and injured himself. Plaintiff needed to establish that his injuries arose out of execution of defendant’s policy or custom, and plaintiff failed to establish existence of said policy or custom, where plaintiff could only cite to three to five similar incidents over seven-year period, where inmate who had lower bunk prescription incurred injuries after being placed in upper bunk bed.

Dist. Ct. did not err in dismissing for lack of standing action filed by plaintiffs-consultants providing services to nursing homes and long-term care facilities, where plaintiffs alleged on behalf of class of nursing home residents obtaining Medicaid benefits in said homes and facilities that defendants had failed to process timely payments for claims submitted by said nursing homes/facilities to Medicaid managed care organizations. Plaintiffs did not maintain that they had standing to bring instant claims in their own right. Moreover, while plaintiffs argued that it had standing to assert residents rights under 42 C.F.R. section 435.923, Dist. Ct. could properly find that said regulation did not allow plaintiffs to bring civil lawsuit on behalf of residents, and that said regulation only allowed plaintiffs to assist residents in submitting Medicaid applications or renewal applications for said benefits and receiving on behalf of said residents only documents and agency communications regarding Medicare eligibility-related matters.

Dist. Ct. erred in dismissing for lack of personal jurisdiction plaintiff’s Lanham Act, Illinois Consumer Fraud and Deceptive Practices Act, and Illinois Uniform Deceptive Trade Practices Act claims, arising out of defendant’s 2016 marketing of its “Diesel Test Red Series” sports nutritional supplement that plaintiff asserted infringed on its “Diesel Test” dietary nutritional supplement that plaintiff had first manufactured in 2005. While defendant asserted that personal jurisdiction was lacking because it was not licensed to do business in Illinois, had no place of business, telephone or mailing address in Illinois, and had no employees or real or personal property in Illinois, Ct. of Appeals found that defendant had formed sufficient minimum contacts in Illinois so as to allow plaintiff proceed on his cause of action, where record showed that: (1) defendant had sold its Diesel Test product to 767 Illinois residents through its website; (2) defendant’s website required consumers to select Illinois among its “ship to” options; and (3) Illinois residents purchasing defendant’s products received thank-you emails for purchasing defendant’s Diesel Test product. Ct. further noted that defendant’s contacts in Illinois related to plaintiff’s infringement claims, and that it would not be unfair to require defendant to defend instant lawsuit in Illinois, where defendant conducted business at nationwide level through its website.