The Honorable Sandra Day O’Connor, Associate Justice of 

the United States Supreme Court (Ret.), sitting by designation

pursuant to 28 U.S.C. § 294(a).

In the

United States Court of Appeals

For the Seventh Circuit

No. 09-1107

PARVATI CORPORATION,

Plaintiff-Appellant,

v.

CITY OF OAK FOREST, ILLINOIS,

an Illinois Municipal Corporation, et al.,

Defendants-Appellees.

Appeal from the United States District Court

for the Northern District of Illinois, Eastern Division.

No. 1:06-cv-01772—Amy J. St. Eve, Judge.

ARGUED MAY 19, 2010—DECIDED DECEMBER 23, 2010

Before O’CONNOR, Associate Justice, and WILLIAMS 

and SYKES, Circuit Judges.

SYKES, Circuit Judge. This appeal arises from a zoning

dispute between Parvati Corporation and the City of
2 No. 09-1107

Oak Forest, Illinois, over a hotel in the city that Parvati

owned but wanted to sell. In 2004 Parvati contracted to

sell the property to Bethlehem Enterprise, Inc., contingent

upon the latter’s securing the City’s approval to

convert the hotel into a senior-living facility. The City’s

Zoning Commission denied approval because the proposed use was prohibited by a recently enacted zoning

ordinance. Parvati and its buyer then sought judicial

review in state court; they also asserted other claims

for relief against the City and several of its officials. The

suit was removed to federal court, and on July 20, 2007,

a district judge upheld the Zoning Commission’s decision. This resolved the administrative-review claim—

which was dismissed with prejudice—but left the other

claims pending. Parvati then moved for voluntary dismissal of its remaining claims. The motion was granted,

and the judge entered judgment terminating the case.

About a year later, Parvati, acting without Bethlehem,

moved for postjudgment relief under Rule 60(b)(3) of the

Federal Rules of Civil Procedure, claiming that the City

had misrepresented material facts during the zoning

proceedings. Parvati asked the judge to vacate her

July 20, 2007 order affirming the Zoning Commission’s

decision. By this time, however, Parvati no longer

owned the hotel; it had conveyed the property to its

mortgage lender to resolve foreclosure proceedings

initiated a few months earlier. In the meantime Parvati

filed a new lawsuit repleading the claims it voluntarily dismissed from this suit. The judge denied Parvati’s

Rule 60(b)(3) motion, and its Rule 59(e) motion for reconsideration as well, and Parvati appealed.
No. 09-1107 3

We cannot reach the merits. Based on the interim developments we have just described, this case is now moot.

The relief Parvati wants—a decision vacating the court’s

July 20, 2007 order and reversing the Zoning Commission’s

action—is a remedy that can benefit only the property

owner. Because Parvati no longer owns the property, it

lacks standing to challenge the Zoning Commission’s

decision. It is true that Parvati’s other claims—seeking

damages from the City and several municipal officials—do

not depend on its continued ownership of the property.

But they were dismissed at Parvati’s request and are

now the subject of the second lawsuit. To the extent that

the July 20, 2007 order—later reduced to a final merits

judgment—has preclusive effect on Parvati’s effort to resuscitate the dismissed claims in the second suit, that

injury is entirely self-inflicted; it is not fairly traceable

to the defendants’ conduct. As such, the potential preclusive effect of the July 20 order does not suffice to

supply standing; stated differently, it does not “unmoot”

this case.

I. Background

Parvati is an Illinois corporation owned by Balkrishna

Ambalal Patel and his wife Nirmala Balkrishna Patel.

For several years Parvati owned and operated a

Ramada Inn in the City of Oak Forest. In March 2004

Parvati agreed to sell the hotel to Bethlehem Enterprise, an Illinois corporation owned by the Bethlehem

Temporary Missionary Baptist Church. The sale of the

hotel was contingent upon Bethlehem receiving the
4 No. 09-1107

The exact nature of the business Bethlehem sought to 1

operate on the property is not entirely clear. The parties variously refer to it as a senior-living facility and an extendedstay hotel. The distinction is irrelevant to the disposition of

this appeal; we use the term “senior-living facility” throughout this opinion.

We use the term “City” to refer collectively to all defendants 2

unless the context requires otherwise.

City’s permission to operate the property as a seniorliving facility.1

On February 1, 2006, the City’s Zoning Commission

held a hearing to consider whether to grant Bethlehem a

commercial business license for this purpose. At that

hearing City officials explained that the City had

recently enacted Zoning Ordinance 2836, and under that

ordinance a senior-living facility was not a permissible

use of the property. On this basis the Commission

denied Bethlehem’s application for a business license.

Parvati and Bethlehem responded with this lawsuit

against the City, the Zoning Commission, and certain

city officials alleging a potpourri of federal and statelaw claims. The suit was filed in state court and

2

sought judicial review of the Zoning Commission’s decision pursuant to the Illinois Administrative Review Law,

see 735 ILL. COMP. STAT. 5/3-110, as well as money

damages for violation of 42 U.S.C. §§ 1981 and 1982;

the Fair Housing Act, 42 U.S.C. §§ 3601 et seq.; and the

guarantees of equal protection and due process under
No. 09-1107 5

The federal civil-rights claims alleged discrimination on 3

the basis of race and ethnicity. The Patels are of Indian descent;

the pastors and members of the Bethlehem Temporary Missionary Baptist Church are black.

By agreement of the parties, the district court also dis- 4

missed all claims against the Zoning Commission with prejudice.

the Fourteenth Amendment and 42 U.S.C. § 1983.3

The defendants removed the case to federal court. In

an order dated July 20, 2007, the district court affirmed the Zoning Commission’s decision and dismissed

the state-law administrative-review claim. Parvati and

Bethlehem then moved for voluntary dismissal of the

constitutional and statutory claims. On September 28,

2007, the district court granted the motion, dismissed

the remaining claims without prejudice, and entered a

judgment terminating the case.4

In early 2008 Parvati claims to have discovered information suggesting that the City and its officials misrepresented material facts at the hearing before the

Zoning Commission and in their filings in the district

court. Specifically, Parvati maintains that city officials

misrepresented the validity of Ordinance 2836 knowing

that the City had failed to follow the proper legal procedures when enacting the ordinance. Parvati contends

that because of these procedural anomalies, Ordinance

2836 is a nullity and Bethlehem’s license application

should have been evaluated under the prior zoning

ordinance.
6 No. 09-1107

Bethlehem is no longer interested in purchasing the property. 5

Accordingly, Parvati—acting without Bethlehem,

which is no longer a party to the case —moved for post5

judgment relief under Rule 60(b)(3) alleging “fraud . . . ,

misrepresentation, or misconduct by an opposing

party.” This motion was filed on July 14, 2008, nearly

a year after the district court entered its July 20, 2007

order affirming the Zoning Commission’s decision.

Parvati asked the district court to vacate its July 20, 2007

order and reevaluate the Zoning Commission’s action

under the prior zoning ordinance.

The City responded to the Rule 60(b)(3) motion on the

merits, but also maintained that Parvati lacked standing

to reopen the administrative-review claim because it

had transferred ownership of the property to Mutual

Bank, its mortgage lender, a few months earlier. Mutual

Bank had initiated foreclosure proceedings against

Parvati, and on March 18, 2008, the parties entered

into an “Agreement in Lieu of Foreclosure” whereby

Parvati conveyed the property to the bank in exchange

for a release from its obligations arising under the terms

of mortgage. That same day Parvati also executed a

warranty deed to the property in favor of Mutual Bank.

The district court acknowledged that Parvati’s conveyance of the property called into question its standing to

pursue postjudgment relief on the administrativereview claim. Parvati’s injury—its inability to sell the

property to Bethlehem—could no longer be redressed

by the sort of relief afforded by administrative review
No. 09-1107 7

of the Zoning Commission’s action. But the court determined that Parvati had standing by virtue of other intervening developments. On January 31, 2008, Parvati

had filed a new lawsuit reasserting the claims it had

voluntarily dismissed in the first suit and adding a

few others. The court held that the potential preclusive

effect of the July 20, 2007 order on the claims Parvati

was attempting to assert in the second suit gave Parvati

standing to seek relief from the judgment in the first.

The court then proceeded to the merits and reaffirmed

its July 20, 2007 order. More specifically, the court held

that the alleged misrepresentations did not prevent

Parvati from “fully and fairly presenting its case”

because early on in the litigation Parvati’s attorneys had

in their possession all the relevant documents necessary

to alert them to the possible invalidity of the ordinance.

As such, Parvati could have advanced a legal theory

challenging the ordinance at any time while the case

was pending. Because Rule 60(b) may not be used to

propound new legal theories that could have been

raised prior to entry of judgment, see Provident Sav. Bank

v. Popovich, 71 F.3d 696, 698 (7th Cir. 1995), the court

denied Parvati’s motion for postjudgment relief. Parvati

moved for reconsideration under Rule 59(e), which

was also denied.

II. Discussion

Our first question in this appeal—and as it turns out,

our last—is whether Parvati has standing to pursue

the particular relief it requests. Article III of the Constitu-
8 No. 09-1107

tion confines the federal courts to adjudicating actual

cases or controversies, U.S. CONST. art. III, § 2, and the

requirements of Article III case-or-controversy standing

are threefold: (1) an injury in-fact; (2) fairly traceable

to the defendant’s action; and (3) capable of being redressed by a favorable decision from the court. Lujan v.

Defenders of Wildlife, 504 U.S. 555, 560-61 (1992); Allen v.

Wright, 468 U.S. 737, 751 (1984). The asserted injury

must be both (a) concrete and particularized and (b)

actual or imminent, not conjectural or hypothetical.

Lujan, 504 U.S. at 560. Moreover, a plaintiff must demonstrate standing separately for each form of relief sought.

Friends of the Earth, Inc. v. Laidlaw Envtl. Servs. (TOC), Inc.,

528 U.S. 167, 185 (2000). Finally, standing must be present

at all stages of the litigation, including on appeal. See

Korczak v. Sedeman, 427 F.3d 419, 420 (7th Cir. 2005).

When a party with standing at the inception of the litigation loses it due to intervening events, the inquiry

is really one of mootness. See Friends of the Earth, 528

U.S. at 189. Mootness is “the doctrine of standing set in

a time frame: The requisite personal interest that must

exist at the commencement of the litigation (standing)

must continue throughout its existence (mootness).”

Id. (quotation marks omitted).

There is no question that when this litigation began,

Parvati had standing to seek judicial review of the

Zoning Commission’s decision. It owned the property

in question, and the Commission’s denial of Bethlehem’s

application for a license to operate a senior-living facility on the property scuttled the Parvati-Bethlehem deal

and prevented the sale. This was a concrete, actual injury,
No. 09-1107 9

The record contains a copy of the “Agreement in Lieu of 6

Foreclosure” memorializing Parvati’s promise to convey the

property to Mutual Bank, as well as a copy of the warranty

deed reflecting that Parvati in fact conveyed the property to

the bank on March 18, 2008.

Parvati notes that under Illinois law the grantee must accept 7

a deed before the conveyance is effective, see Seibert v. Seibert,

41 N.E.2d 544, 547 (Ill. 1942), and raises the possibility that

Mutual Bank might not have accepted the conveyance. This

is conjecture, and in any event is contradicted by the documentary evidence. The “Agreement in Lieu of Foreclosure”

and the warranty deed convincingly establish that Parvati’s

conveyance was effective; there is nothing in the record

to suggest otherwise.

traceable to the City’s conduct and redressable by the

requested administrative relief. But after the

district court issued its order affirming the Zoning Commission’s decision and thereafter entered judgment

dismissing the case, Parvati transferred ownership of the

property to its mortgage lender in lieu of foreclosure.6

Because Parvati no longer owns the property, it lost

standing to challenge the Zoning Commission’s decision. The type of relief available on the administrative- 7

review claim—an order directing the Zoning Commission

to issue a license for a senior-living facility—cannot

help Parvati now.

The district court found a different basis for Parvati’s

standing: the potential preclusive effect of the July 20,

2007 order on the second lawsuit Parvati filed against

the City. The new suit reasserted the constitutional and
10 No. 09-1107

statutory claims for money damages that Parvati had

voluntarily dismissed in the first suit, as well as other

claims stemming from the same set of facts. These

claims do not depend on Parvati’s continued ownership of the property. If the court were to vacate the judgment in the first suit and revisit and reverse the July 20,

2007 order, the threat of claim or issue preclusion in

the parallel case would be removed. The court held that

the “potential negative impact of the July 20, 2007

Order on the 2008 case is sufficiently concrete and imminent” to supply standing.

But there is another requirement for standing that

the court did not address: The injury must be fairly traceable to the conduct of the defendant. Under the circumstances here, the potential for preclusion was created

entirely by Parvati’s litigation conduct, not by any

action of the City or its officials. After failing to win

reversal of the Zoning Commission’s decision, Parvati

moved to dismiss its remaining claims rather than press

on with the litigation. The district court granted this

motion. Although the dismissal of the statutory

and constitutional claims was without prejudice, the

simultaneous entry of a final merits judgment on the

administrative-review claim had obvious preclusion

implications for any subsequent effort to refile those

claims. Now that Parvati has refiled them—along with

some previously unfiled claims arising from the same

core of operative facts—the doctrine of preclusion
No. 09-1107 11

As it turned out, the district court relied on preclusion 8

doctrine to dismiss some of the previously unfiled claims, i.e.,

those that Parvati asserted for the first time in the second case.

See Parvati Corp. v. City of Oak Forest, No. 08-cv-0702 (N.D. Ill.

Sept. 17, 2009) (order dismissing certain claims). It is not

clear why the preclusion defense is being raised piecemeal;

claims that are voluntarily dismissed without prejudice

do not necessarily escape a preclusion bar. See Muhammad v.

Oliver, 547 F.3d 874, 876-78 (7th Cir. 2008) (a party’s decision

to voluntarily dismiss claims in one case does not necessarily reserve a right to reassert those claims in a subsequent

case after the court renders a final judgment in the first).

hovers over the later-filed case. See generally H-D 8

Mich., Inc. v. Top Quality Serv., Inc., 496 F.3d 755, 760

(7th Cir. 2007) (collateral estoppel applies where a

litigated issue, essential to the final judgment in the

earlier case, is asserted against a party who had

the opportunity to litigate the issue in the earlier proceeding); Highway J Citizens Group v. U.S. Dep’t of

Transp., 456 F.3d 734, 741 (7th Cir. 2006) (res judicata

applies where a claim concerns the same core of operative facts, involves the same parties, and implicates a

previous final judgment on the merits).

This sort of procedural “injury,” however, is not traceable to the City’s alleged unlawful conduct. It is

entirely self-inflicted, resulting solely from Parvati’s

decision to split its claims. See Petro-Chem Processing, Inc. v.

EPA, 866 F.2d 433, 438 (D.C. Cir. 1989) (Ginsburg, R.B., J.)

(self-inflicted injuries break the causal chain linking

the defendant’s conduct to the asserted injury); 13A
12 No. 09-1107

CHARLES A. WRIGHT & ARTHUR R. MILLER, FEDERAL PRACTICE AND PROCEDURE § 3531.5, at 362 (3d ed. 2008) (same);

see also Diamond v. Charles, 476 U.S. 54, 70-71 (1986)

(a party’s liability for attorney’s fees was a consequence

of its own decision to intervene in the case and

therefore could not be fairly traced to the law challenged); Pennsylvania v. New Jersey, 426 U.S. 660, 664

(1976) (injuries to plaintiff states’ fiscs were “self-inflicted,” and “[n]o State can be heard to complain about

damage inflicted by its own hand”).

Had Parvati not voluntarily dismissed its claims for

monetary relief in the first case, it would have faced no

risk of preclusion; the district court would have considered all of Parvati’s grievances in one lawsuit. So long

as Parvati maintained standing to assert the claims (and

as we have noted, Parvati need not own the property

to benefit from a monetary remedy), the district court

would have been free to revisit the zoning determination in the continuing litigation. And of course the propriety of the district court’s ruling on the administrativereview claim could have been taken up on an appeal

from a final judgment in the case.

But Parvati chose to accept its loss on the administrative-review claim, dismissed its claims for damages,

and permitted final judgment to be entered on the merits

of the zoning challenge. Now that it no longer owns the

property, Parvati lacks standing to reopen the judgment

on that claim. This is so regardless of how that judgment

may affect the related litigation. If the potential preclusive

effect of a judgment in a subsequent case were enough
No. 09-1107 13

to avoid mootness, then no case would ever be moot.

See Commodity Futures Trading Comm’n v. Bd. of Trade,

701 F.2d 653, 656 (7th Cir. 1983). Such a rule would

impair judicial economy, see Muhammad v. Oliver, 547

F.3d 874, 877 (7th Cir. 2008), and create an impermissible end-run around the case-or-controversy requirements of Article III. Here, the possibility of preclusion is

not an injury fairly traceable to the City’s conduct or

the conduct of its officials. Instead, it was brought on

by Parvati’s litigation decisions.

Accordingly, for the foregoing reasons, we VACATE

the orders of the district court denying Parvati’s

Rule 60(b)(3) and Rule 59(e) motions on the merits and

REMAND with instructions to DISMISS them for lack of

jurisdiction.

12-23-10