Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca7-15-02880/USCOURTS-ca7-15-02880-0/pdf.json

Nature of Suit Code: 160
Nature of Suit: Stockholder's Suits
Cause of Action: 

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United States Court of Appeals 

For the Seventh Circuit

Chicago, Illinois 60604

Submitted May 31, 2016*

Decided June 1, 2016

Before

FRANK H. EASTERBROOK, Circuit Judge

MICHAEL S. KANNE, Circuit Judge

ANN CLAIRE WILLIAMS, Circuit Judge

Nos. 15‐2877 & 15‐2880

MICHAEL H. WU and

CHRISTINE T. WU,

Plaintiffs‐Appellants,

v.

PRUDENTIAL FINANCIAL, INC., et al.,

Defendants‐Appellees.

Appeals from the United States District

Court for the Northern District of Illinois,

Eastern Division.

Nos. 14 C 5392 & 15 C 2238

Milton I. Shadur,

Judge.

O R D E R

Michael and Christine Wu are contumacious litigants. After they purchased a

Prudential variable annuity from a Citigroup representative in 2010, twice they brought

suits against Prudential, Citigroup, and a host of other financial‐services companies and

related individuals alleging fraudulent practices in the management of the annuity. The

first suit was dismissed after the Wus repeatedly failed to comply with pleading

requirements under the Federal Rules of Civil Procedure, leaving the district court and

                                                 

* After examining the briefs and the records, we have concluded that oral

argument is unnecessary. Thus the appeals are submitted on the briefs and the records.

See FED. R. APP. P. 34(a)(2)(C).

NONPRECEDENTIAL DISPOSITION

To be cited only in accordance with Fed. R. App. P. 32.1

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Nos. 15‐2877 & 15‐2880    Page 2

the defendants with little idea of the nature of their claims. The second was barred by

claim preclusion, after the district court expressed exasperation that the Wus had

dishonored a promise to hire counsel and seek arbitration rather than file another suit

pro se. The Wus appeal both judgments, and we affirm.

In July 2014 the Wus, proceeding pro se, brought a sprawling 52‐page complaint

that charged Prudential, Citigroup, and other financial‐services firms and their

representatives (30 defendants in all) with some 37 securities‐law violations concerning

transactions involving the annuity. The district court told the Wus that their complaint

was “literally impenetrable” and “so violative of pleading principles that it is somewhat

difficult to know where to start.” The court then dismissed the complaint without

prejudice for failure to provide a “short and plain statement of the claim showing that

the pleader is entitled to relief,” FED. R. CIV. P. 8(a)(2). Because the Wus had disclosed in

their request for recruitment of counsel that they possessed substantial assets, the court

recommended that they hire counsel to shape an acceptable complaint.   

Two weeks later, the Wus, still proceeding pro se, submitted an amended

complaint, which the judge deemed an “impenetrable mish‐mosh” and “little better than

the first one.” The judge admonished them that it was not his responsibility “to play the

role of a gold prospector” with their complaint and noted that they evidently had

disregarded his suggestion that they seek legal assistance. This time the judge dismissed

the suit with prejudice.

At a subsequent hearing on the Wus’ motion to allow a proposed second

amended complaint, the court granted their request to change the prior judgment to

dismissal without prejudice so that they could file a private arbitration claim with the

Financial Industry Regulatory Authority (FINRA).   

Rather than proceeding to arbitration, however, the Wus returned to federal court

and filed another complaint alleging the same operative facts as were pleaded in the

earlier complaint and adding a claim for breach of contract. The court, pointing out that

the Wus had represented that they planned to take their suit to arbitration, vacated the

dismissal without prejudice in the first suit under Rule 60, re‐entered a dismissal with

prejudice, and then dismissed this new complaint on the ground of claim preclusion.

The Wus then hired counsel and moved to amend the judgment under Rule 59(e)

in each of the two suits, but the court denied these motions because the Wus did not

timely submit a new proposed complaint showing that they could now, with counsel’s

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Nos. 15‐2877 & 15‐2880    Page 3

assistance, possibly state a claim, and, in any event, their belated submission appeared to

be advancing—impermissibly—new theories of relief under state law.

The Wus brief on appeal is hard to parse, but we understand them generally to

challenge the district court’s decisions to reinstate the dismissal with prejudice in their

first suit and dismiss their second.1 They maintain that in the second suit they

adequately stated a breach‐of‐contract claim against one of the Prudential subsidiaries,

Pruco Life Insurance Company, but, as the defendants point out, the Wus don’t even

specify which contract terms they allege to be violated. Moreover, the district court

properly assessed that all of the Wus’ claims in the second suit arose from the same

operative facts as the first and thus were precluded by the dismissal with prejudice in

the earlier case. See Matrix IV, Inc. v. Am. Nat. Bank & Trust Co. of Chi., Inc., 649 F.3d 539,

547 (7th Cir. 2011). And the district court acted within its discretion under Rule 60 in

vacating its order dismissing the first suit without prejudice, a dismissal that the Wus

had obtained through a false promise to take their case to arbitration.   

The Wus’ appeals are frivolous. We order them to show cause within 14 days why

the court should not impose sanctions under Federal Rule of Appellate Procedure 38 for

filing frivolous appeals. If the Wus fail to pay any fine imposed as a sanction, they may

be barred from filing any other litigation in this circuit until they have done so.

See Support Sys. Int’l., Inc. v. Mack, 45 F.3d 185 (7th Cir. 1995).

AFFIRMED.

                                                 

1 The defendants argue that the Wus’ two postjudgment motions were too

insubstantial to qualify as motions under Rule 59(e) that could toll the time to appeal the

underlying dismissals. We disagree with that argument because the Wus in their

motions did give at least some substantive reasons for the court to reconsider its

judgments. Carlson v. CSX Transp., Inc., 758 F.3d 819, 826 (7th Cir. 2014).

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