# United States Court of Appeals

For the Seventh Circuit Chicago, Illinois 60604

Submitted December 02, 2014 * Decided April 9, 2015

Before

DANIEL A. MANION, Circuit Judge

MICHAEL S. KANNE, Circuit Judge

DAVID F. HAMILTON, Circuit Judge

No. 14-2979

ERIC C. ONYANGO, Plaintiff-Appellant

,

v

.

NICK & HOWARD, LLC, et al., Defendants-Appellees

. Appeal from the United States District
Court for the Northern District of Illinois, Eastern Division.

No. 13 C 6256

Sharon Johnson Coleman, J udge

.

O R D E R

Eric Onyango, who is black, sued a night club owner and two others, alleging violations of 42 U.S.C § 1981 and state law. Th e district court dismissed with prejudice the § 1981 claims and two of the claims for in tentional infliction of emotional distress. The court then declined to exercise suppl emental jurisdiction over the remaining

* This appeal is successive to case no. 13-3825 and is being decided under Operating Procedure 6(b) by the same panel. After examining the briefs and record, we have concluded that oral argument is unnece ssary. Thus the appeal is submitted on the
briefs and record. See F ED

. R. A PP

. P. 34(a)(2)(C). NONPRECEDENTIAL DISPOSITION
To be cited onl y in accordance with Fed. R. A pp . P. 32.1No. 14-2979 Page 2

state-law claims. Onyango appeals, and because Onyango states no plausible § 1981 or emotional-distress claims, we affirm the judgment.

Onyango complains about two sets of even ts at The Underground night club in Chicago. He names as defendants Nick & How ard (the company that owns the club), the club’s lawyer (Douglas Wexler), and Wexl er’s own lawyer, Samuel Manella. According to his complaint, the first set of events began when Onyango and a friend were at the club in December 2012. Carlos Rosales, a fr equent club patron, made racist remarks to Onyango and told him to “get out.” Onyang o left the club, and a few weeks later he complained to the club about Rosales and thre atened litigation. When he returned to the club sometime later, bouncers enforced policies that discouraged him from entering: He
saw that black customers waited in line lo nger than white customers, bouncers lied about wait times, and they “selectively en force[ed] nonarticulable dress codes while making exceptions for rappers and drug dealers.” Onyango labels this race
discrimination.

The second set of events involves accu sations of sexual misconduct. Onyango alleges that while he and a friend were wa iting to enter The Un derground in August 2013, the club patron Rosales approached him and, for racially hostile reasons, loudly and falsely called him a “sexual assailant.” Rosales then spoke to the bouncer, who denied Onyango entry into the club. Onyango complained to Nick & Howard about this new incident and reprised his threat to su e. He later spoke about the incident with Wexler, the club’s lawyer, who began to investigate. Wexler first contacted Rosales, who asserted that Onyango had once been asked to leave the club for groping a woman, and said a woman named Marcella Acosta would be able to confirm that Onyango was aggressive. Wexler contacted Acosta, told her that Onyango had sexually assaulted women, and asked her to lie and confirm th at Onyango had inappr opriately touched her and other women. Upon learning about this conversation, Onyango reported Wexler to the FBI and Illinois Attorney Registration and Disciplinary Commission to complain
about Wexler’s lies. Wexler hired Mane lla, who represented him in the ARDC proceedings.

In this suit, Onyango raises claims of race discrimination and retaliation under 42 U.S.C. § 1981. He contends that the club co mmitted race discrimination (1) when Rosales told him to “get out” in December 2013, (2 ) when it denied him entry in August 2013 based on Rosales’s racially motivated accu sation of sexual misconduct and, more generally (3) by enforcing its club-admission policies. Onyago next asserts that, seven months after he complained in January 2013 ab out Rosales’s racist remarks, the club andNo. 14-2979 Page 3

Wexler retaliated against him by responding to the allegations of sexual misconduct. Finally, he accuses the defendants of in tentional inflicting emotional distress, defamation, and other state-law violations.

The district court dismissed the case. First, it denied Onyango’s motion to enjoin the defendants from defaming him, a ruling that this court upheld on interlocutory appeal. Onyango v. Nick & Howard, et al. , 559 F. App'x 571 (7th Cir. 2014). A few months later the district court granted the defendants ’ motions to dismiss. It first addressed the § 1981 discrimination claim. The court explaine d that Nick & Howard could not be liable for Rosales’s racially motivated conduct and Onyango’s allegations about the club-admission policies were too vague to stat e a race claim. Second, the judge dismissed his § 1981 retaliation claims because Onyang o did not specifically allege that his complaint to the club about Rosales in Ja nuary 2013 was the reason that, seven months later, Rosales called him a “sexual assailant” and the club investigated him for sexual misconduct; in addition, the investigatio n was not sufficiently adverse to deter complaints about discrimination. Next, the judge granted both Wexler and Manella’s
motions to dismiss the claims for intentional infliction of emotional distress based on litigation privilege. The judge declined to ex ercise supplemental jurisdiction over the remaining state-law claims. Onyango moved for reconsideration under Federal Rule of Civil Procedure 59(e), and the dist rict court denied his motion.

On appeal Onyango first asserts that the district court erred by dismissing his § 1981 claims against Nick & Howard. We begin with his argument that, because Rosales wanted him removed from the club for racially hostile reasons, Nick & Howard is liable
for race discrimination. To state a race- discrimination claim under § 1981 Onyango needs to allege that the club refused to contract with him because of his race. See Black Agents & Brokers Agency, Inc. v. Near N. Ins. Brokerage, Inc. , 409 F.3d 833, 837 (7th Cir. 2005); Bagley v. Ameritech Corp. , 220 F.3d 518, 521–22 (7th Cir. 2000). And because Onyango wants to base Nick & Howard’s lia bility on Rosales’s animus, he needs to allege a basis for holding the club liable for Rosales’s conduct. To do that he must allege that Rosales was an agent of the club and that Nick & Howard knew about and endorsed his conduct by forcing him to leave or refusing him entry. See Daniels v. Dillard's, Inc. , 373 F.3d 885, 888 n.4 (8th Cir. 2004); Berger v. Iron Workers Reinforced Rodmen Local 201 , 843 F.2d 1395, 1430 (D.C. Cir. 1988). But Onyango never specifically alleged that the club
removed him because it knew that Rosales opposed Onyango’s entry for racial reasons and adopted his animus.No. 14-2979 Page 4

Onyango replies that agency and knowle dge are not needed to hold Nick & Howard liable for Rosales’s conduct. He argues that in Dunn v. Washington County Hospital , 429 F.3d 689, 691 (7th Cir. 2005), we supposedly held a business is “directly” liable for a contractor’s discriminatory conduct. But in that case a nurse at a hospital
stated a claim for a hostile work environment because she alleged that the hospital knew of but did not stop ongoing sexual harassmen t by a doctor who worked at the hospital.
Id. Here Onyango does not allege that Nick & Howard knew about the racial motivation
for Rosales’s accusation of sexual misconduct. See Daniels , 373 F.3d at 888 n.4; Berger , 843 F.2d at 1430. Accordingly this theory of race discrimination unde r § 1981 fails. (Onyango argues for the first time in his reply brief th at Nick & Howard is liable on a negligence theory, but he has waived that argument because it comes too late. See Feldman v. C.I.R.

, No. 12-3144, 2015 WL 759250, at *11 n.10 (7th Cir. Feb. 24, 2015).)

We also agree with the district court that Nick & Howard is not liable for race discrimination based on its own admission “policies” because Onyango’s allegations about those policies are too conclusory to su pport an inference of discrimination. He asserts that he was discouraged from enteri ng the club because black customers have waited longer in line than whites, bouncers have lied to some black customers about wait times, and the bouncers have unevenly enforced dress codes. He concludes that any
difference in treatment must be the result of a club policy of racial exclusion. But a conclusion like Onyango’s that is based on “facts that are ‘merely consistent with’ a defendant’s liability” is legally insufficient. See Ashcroft v. Iqbal , 556 U.S. 662, 678 (2009) (quoting Bell Atlantic v. Twombly , 550 U.S. 544, 557 (2006)).

We turn next to Onyango’s § 1981 retaliati on claims against Nick & Howard and Wexler. To state a claim for retaliation under § 1981 Onyango must allege that he engaged in protected activity, suffered a mate rially adverse action, and that there is a
causal connection between the two. See Smith v. Bray , 681 F.3d 888, 896 (7th Cir. 2012). We have so far applied § 1981’s retaliation pr ovision only in the employment context.
See Carter v. Chi. State Univ. , No. 13-3367, 2015 WL 544881, at *4 (7th Cir. Feb. 11, 2015). But even if we assume that the provision app lies outside of that context, the claim fails because causation is missing. On yango alleges that seven months after he complained to
Nick & Howard about Rosales’s conduct in December 2012, the club denied him entry and its lawyer investigated Rosales’s charge of sexual assault. But Onyango does not plausibly allege that the complaint and the investigation were causally connected. Indeed it is implausible to infer that Rosa les, who was not a club employee, even knew about the Onyango’s complaint from seve n months earlier. And the seven-month interval is, without more, too long to support an inference of retaliation. Porter v. City ofNo. 14-2979 Page 5

Chicago , 700 F.3d 944, 958 (7th Cir. 2012); Wallscetti v. Fox , 258 F.3d 662, 669 (7th Cir. 2001); Tyler v. Univ. of Ark. Bd. of Trs. , 628 F.3d 980, 986 (8th Cir. 2011).

We are left with the state-law claims. On yango argues that the district court erred by exercising supplemental jurisdiction ov er his claims against the two lawyers for
intentional infliction of emotional distress. He contends that the dismissal of the claims against the lawyers will preclude his emotio nal-distress claim against Nick & Howard (which was dismissed without prejudice), and therefore the court should not have decided those claims. Retention of jurisdicti on to decide a supplemental state-law claim is appropriate when resolution of a state-law claim is clear. See In re Repository Techs., Inc.

, 601 F.3d 710, 725 (7th Cir. 2010); Wright v. Associated Ins. Cos., Inc. , 29 F.3d 1244, 1251–52 (7th Cir. 1994). The prospect that the ruling in favor of the lawyers will preclude the claim against Nick & Howard might have required that the district court retain the emotional-distress claim against Nick & Howard, rather than dismiss it without prejudice. See In re Repository Techs. , 601 F.3d at 725; Miller Aviation v. Milwaukee County Bd. of Supervisors , 273 F.3d 722, 731 (7th Cir. 2001). So if anything Onyango got a break. But Nick & Howard has not cross-appealed th e decision to relinquish that claim, so we
leave alone the decision to dismi ss that claim without prejudice. See Greenlaw v. United
States, 554 U.S. 237 (2008).

On the merits, the district court corre ctly dismissed Onyango’s claims for
intentional infliction of emotional distre ss against the lawyers Wexler and Manella. Onyango disputes the district court’s conclu sion that their statements were privileged, but they were privileged because they arose in anticipation of judicial or quasijudical proceedings. See Atkinson v. Affronti , 861 N.E.2d 251, 255 (Ill. App. Ct. 2006). In particular, Wexler’s private conversation with Acosta, a potential witness, as part of a preliminary investigation is privileged. See id . at 255. And Manella wrote a private letter to the ARDC in response to its pending investigation, so his communication likewise was privileged. See Lykowski v. Bergman , 700 N.E.2d 1064, 1070–71 (Ill. App. Ct. 1998); Parrillo, Weiss, &
Moss v. Cashion , 537 N.E.2d 851, 856 (Ill. App. Ct. 1989). In any case, the actions of Wexler and Manella did not go “beyond a ll possible bounds of decency.” Duffy v. Orlan Brook
Condo. Owners' Ass'n , 981 N.E.2d 1069, 1079 (Ill. App. Ct. 2 012). Thus these claims easily fail.

Finally, Onyango argues that the district court abused its discretion by denying his motion under Rule 59(e). He asserts that the judge erred by relying on our original order affirming the denial of his injunction rather than the amended version we issued shortly thereafter. But the differences in th e amended version are ne gligible and did not change any legal analyses or conclusions. Onyango also says he discovered new cases,No. 14-2979 Page 6

but these were available to him at the time he filed his motion to dismiss. See In re Res. Tech. Corp. , 624 F.3d 376, 388 (7th Cir. 2010) (Rule 59 re quires showing that moving party
discovered new information that could not ha ve been discovered by exercising due diligence before judgment.) In any case, we have considered all of his arguments.

Accordingly, we AFFIRM the judgment of the district court.