Opinion ID: 3219519
Heading Depth: 2
Heading Rank: 1

Heading: Taylor and Taylor Solutions

Text: We begin our analysis with a discussion of defendants Taylor and Taylor Solutions (collectively “Taylor”). Bell argues that the district court erred by granting summary judgment for Taylor in the 2013 Case, denying Bell’s motion for leave to amend his complaint a fourth time, and dismissing the 2014 Case against Taylor based on res judicata.
We review de novo the district court’s grant of summary judgment, construing all facts in the light most favorable to Bell, the nonmoving party, and drawing all reasonable inferences in Bell’s favor. Williams v. Brooks, 809 F.3d 936, 941 (7th 6 Nos. 15-2343, 15-3735, 15-3731 Cir. 2016). Summary judgment is proper when there is no genuine dispute of material fact and the movant is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a). In the 2013 Case, Bell’s third amended complaint accused Taylor of infringing on his copyright of the daytime photo. Taylor answered the complaint and denied posting the daytime photo on his website. The district court granted summary judgment for Taylor, stating that “Bell admits that [Taylor] did not use or infringe upon the copyright of the [daytime] Photo,” as alleged in the complaint. As explained above, Taylor had posted Bell’s nighttime photo, not the daytime photo. On appeal, Bell argues that Taylor should have notified him that he identified the wrong photo in his complaint. Bell contends that Taylor did not comply with Federal Rule of Civil Procedure 8(b), which states that “[i]n responding to a pleading, a party must … state in short and plain terms its defenses to each claim asserted against it[.]” Bell attempts to construe Taylor’s argument that he never infringed on Bell’s copyright of the daytime photo as an affirmative defense, and therefore contends that Taylor waived this “wrong photo defense” by not pleading it in his answer. Bell misunderstands both the definition of “affirmative defense” and a defendant’s obligations at the pleading stage of civil litigation. While Rule 8(c) directs parties to raise affirmative defenses in the pleadings, Taylor did not assert an affirmative defense. An affirmative defense “limits or excuses a defendant’s liability even if the plaintiff establishes a prima facie case.” Tober v. Graco Children’s Prods., Inc., 431 F.3d 572, 579 n.9 (7th Cir. 2005). In other words, an affirmative defense is “[a] defendant’s assertion of facts and arguments that, if Nos. 15-2343, 15-3735, 15-3731 7 true, will defeat the plaintiff’s … claim, even if all the allegations in the complaint are true.” Defense, BLACK’S LAW DICTIONARY (10th ed. 2014); see also Philadelphia Indem. Ins. Co. v. Chicago Title Ins. Co., 771 F.3d 391, 401 (7th Cir. 2014). In this case, Bell did not establish a prima facie case against Taylor, and Taylor’s answer did not assume that the allegations of Bell’s complaint were true. Rather, Taylor stated in his answer that he did not do what Bell accuses him of doing. This is not an affirmative defense but simply a denial of Bell’s allegations. Additionally, Taylor fulfilled his duties under Rule 8(b) by stating that he never used the photo alleged in the complaint. We have explained that “[t]he purpose of a responsive pleading is to put everyone on notice of what the defendant admits and what [he] intends to contest.” Edelman v. Belco Title & Escrow, LLC, 754 F.3d 389, 395 (7th Cir. 2014). Here, Taylor gave Bell adequate notice that he had not used the daytime photo. Taylor was not required to do more to inform Bell of his own error. Cf. Bell v. Lantz, No. 15-2341, 2016 WL 3361557, at  (7th Cir. June 17, 2016) (noting in one of Bell’s other copyright infringement suits that “Bell’s argument [that the defendant was obligated to do more than deny Bell’s allegations in his answer to inform Bell that he had sued the wrong defendant] comes very close in this case to imposing an affirmative burden on the defendant to disprove plaintiff’s case—an argument which lacks any support in precedent.”). Therefore, we affirm the district court’s grant of summary judgment in Taylor’s favor. 2. Motion For Leave to File a Fourth Amended Complaint Next, Bell argues that the district court erred by not granting him leave to amend his complaint several months after the deadline for amending pleadings. We review the denial of a 8 Nos. 15-2343, 15-3735, 15-3731 motion for leave to amend for an abuse of discretion. Runnion ex rel. Runnion v. Girl Scouts of Greater Chicago & Nw. Indiana, 786 F.3d 510, 524 (7th Cir. 2015). Under Federal Rule of Civil Procedure 15(a)(2), a court should grant leave to amend a pleading “when justice so requires.” However, the court “need not allow an amendment when there is undue delay [or] undue prejudice to the opposing party ….” Bethany Pharmacal Co., Inc. v. QVC, Inc., 241 F.3d 854, 861 (7th Cir. 2001). The district court found that Bell was not diligent in discovering his mistake regarding which photo Taylor had actually posted. During discovery in April 2013, Taylor sent Bell a copy of the nighttime photo that he had posted and stated in his interrogatory answers that he had never used the daytime photo. Thus, the district court found that Bell was on notice that Taylor had used the nighttime photo, not the daytime photo identified in the complaint. Yet Bell failed to act on this information until March 12, 2014, well after the July 15, 2013 deadline for amending pleadings had passed. Further, the court pointed out that Bell filed his motion to amend just four weeks prior to the dispositive motions deadlines and at the close of discovery. Thus, granting Bell’s motion would cause further delay and prejudice to defendants by affecting the summary judgment schedule and potentially creating a need to reopen discovery. For these reasons, the district court denied Bell’s motion to amend. On appeal, Bell argues that there was no undue delay on his behalf. He contends that it was Taylor who delayed the proceedings by not being forthcoming about why he was denying Bell’s allegations. This argument fails because Taylor gave Bell adequate notice that he had not used the daytime Nos. 15-2343, 15-3735, 15-3731 9 photo 2 and was not required to do more to help Bell correct his error. See Edelman, 754 F.3d at 395. Thus, we agree with the district court that Bell could have moved for leave to amend well before the deadline but failed to do so. See Hukic v. Aurora Loan Servs., 588 F.3d 420, 432 (7th Cir. 2009) (affirming district court’s denial of plaintiff’s motion for leave to file a second amended complaint “late in the game,” in part because plaintiff based his request on information available to plaintiff “long before he sought leave to amend”). Moreover, we have acknowledged that when a district court denies a motion for leave to amend filed after the deadline, “the generous standard in Rule 15(a)(2) for allowing amendments ‘is in some tension with’ Rule 16(b)(4), which governs scheduling orders and requires a showing of good cause to justify modifying time limits.” Adams v. City of Indianapolis, 742 F.3d 720, 734 (7th Cir. 2014), cert. denied, 135 S. Ct. 286 (2014) (quoting Alioto v. Town of Lisbon, 651 F.3d 715, 719 (7th Cir. 2011)). In this situation, the court is “entitled to apply the heightened good-cause standard of Rule 16(b)(4) before considering whether the requirements of Rule 15(a)(2) were satisfied.” Id. (citation and internal quotation marks omitted). 2 In fact, the record shows that Bell was aware that Taylor posted the nighttime photo as early as April 2011, several months before Bell even filed this suit. In an April 13, 2011 email, Taylor said to Bell: Ok, well I shall take down the photo and then go take my own photo of the Indianapolis skyline at night …. As for your website I see you have several images of Indianapolis at night and the same photo listed for sale …. (emphasis added). 10 Nos. 15-2343, 15-3735, 15-3731 In Adams, we upheld the denial of a motion for leave to amend filed six months after the deadline where the plaintiffs had not demonstrated good cause. Id. Similarly, Bell has not shown good cause for relief from the deadline, which passed nearly eight months before his attempt to amend his complaint a fourth time. Thus, the district court did not abuse its discretion in denying Bell’s request to amend his complaint. 3. Res Judicata Bell’s final argument involving Taylor is that the district court erred in dismissing Bell’s second lawsuit—the 2014 Case—against Taylor based on res judicata. We review de novo a dismissal based on res judicata. Bonnstetter v. City of Chicago, 811 F.3d 969, 974 (7th Cir. 2016). Res judicata, or claim preclusion, bars any claims that were litigated or could have been litigated in a previous action when three requirements are met: “(1) an identity of the causes of action; (2) an identity of the parties or their privies; and (3) a final judgment on the merits.” Roboserve, Inc. v. Kato Kagaku Co., Ltd., 121 F.3d 1027, 1034 (7th Cir. 1997) (internal citation and quotation marks omitted). We agree with the district court that all of the requirements for res judicata are present in this case. There is an identity of the causes of action because Bell’s two lawsuits against Taylor arise out of “a common core of operative facts”— namely, Taylor’s use of the nighttime photo, which Bell mistakenly identified as the daytime photo. Id. (internal quotation marks omitted); see also Czarniecki v. City of Chicago, 633 F.3d 545, 550 (7th Cir. 2011) (“Two claims are one for the purposes of res judicata if they are based on the same, or nearly the same, factual allegations.” (citation and internal quotation marks omitted)). Nos. 15-2343, 15-3735, 15-3731 11 Bell argues that the 2013 Case did not make any determination regarding the nighttime photo and that he did not have a full and fair opportunity to litigate the issue of the nighttime photo in the 2013 Case. These arguments fail because Bell had an opportunity to litigate infringement of the nighttime photo in the 2013 Case, but he did not do so. See Highway J Citizens Grp. v. U.S. Dep’t of Transp., 456 F.3d 734, 741 (7th Cir. 2006) (“[R]es judicata bars not only those issues which were actually decided in a prior suit, but also all issues which could have been raised in that action.” (citation and internal quotation marks omitted)). Bell attempted to amend his complaint to include the nighttime photo, but the district court appropriately denied this motion for the reasons discussed above. Bell cannot use a second lawsuit against Taylor to take another bite at the apple. See Roboserve, 121 F.3d at 1035 (“Once a transaction has caused injury, all claims arising from that transaction must be brought in one suit or lost.” (citation and internal quotation marks omitted)). It is undisputed that the parties are the same in the two cases, and thus we turn to the third res judicata requirement of finality. Bell argues that the judgment in the 2013 Case was not final when the district court invoked res judicata in the 2014 Case. Bell correctly points out that in Bell’s initial appeal, we held that the district court’s first summary judgment ruling was not final for purposes of appeal because the district court had only ruled on damages and had not yet ruled on injunctive and declaratory relief. Bell v. Taylor, 791 F.3d 745, 746 (7th Cir. 2015). However, our holding in Bell’s first appeal is not dispositive, as finality for purposes of appeal is not the same as finality for purposes of preclusion. See 18A CHARLES ALAN WRIGHT & ARTHUR R. MILLER, FEDERAL PRACTICE & PROCEDURE § 4432 (2d ed. 2016). 12 Nos. 15-2343, 15-3735, 15-3731 This Circuit has adopted the Second Circuit’s relaxed concept of finality, at least for purposes of collateral estoppel, or issue preclusion. See Miller Brewing Co. v. Joseph Schlitz Brewing Co., 605 F.2d 990, 996 (7th Cir. 1979), cert. denied, 444 U.S. 1102 (1980) (“To be ‘final’ for purposes of collateral estoppel the decision need only be immune, as a practical matter, to reversal or amendment. ‘Finality’ in the sense of [the finality required for appellate jurisdiction] is not required.”); Lummus Co. v. Commonwealth Oil Ref. Co., 297 F.2d 80, 89 (2d Cir. 1961), cert. denied, 368 U.S. 986 (1962) (“Whether a judgment, not ‘final’ in the sense of [finality for appeal under] 28 U.S.C. § 1291, ought nevertheless be considered ‘final’ in the sense of precluding further litigation of the same issue, turns upon such factors as the nature of the decision (i.e., that it was not avowedly tentative), the adequacy of the hearing, and the opportunity for review.”). Accordingly, we have held that a judgment can have the requisite finality for res judicata purposes even if it is not final for purposes of appeal. See Alexander v. Chicago Park Dist., 773 F.2d 850, 855 (7th Cir. 1985). However, as we acknowledged in EEOC v. Harris Chernin, Inc., there is tension in our case law regarding whether this relaxed concept of finality should in fact be extended to res judicata or if it should be limited to collateral estoppel. 10 F.3d 1286, 1290 n.5 (7th Cir. 1993); see also WRIGHT & MILLER § 4434 n.29. In the case at hand, the district court’s grant of summary judgment for Taylor in the 2013 Case was final for purposes of res judicata. Although the district court applied res judicata before it ruled on injunctive and declaratory relief as to the other defendants, the district court’s rulings pertaining to Taylor were final. There were no remaining claims against Taylor after the district court issued its first summary judgment Nos. 15-2343, 15-3735, 15-3731 13 opinion. And the court’s grant of summary judgment for Taylor was in no way affected by the court’s later rulings on injunctive and declaratory relief as to the other defendants. Further, our decision to affirm the district court on this issue aligns with the goals of res judicata. We have explained that res judicata “promotes predictability in the judicial process, preserves the limited resources of the judiciary, and protects litigants from the expense and disruption of being haled into court repeatedly.” Palka v. City of Chicago, 662 F.3d 428, 437 (7th Cir. 2011). After Bell’s initial appeal, he raised the same arguments against res judicata before the district court in a motion to amend judgment of the 2014 Case, and the district court appropriately denied his motion. The court explained that it had ruled on all claims and properly entered final judgment in the 2013 Case and that its grant of summary judgment for Taylor remained unchanged. 3 Thus, the district court found that allowing Bell to take advantage of the district court’s initial oversight in entering final judgment before ruling on injunctive and declaratory relief would be unfairly prejudicial to Taylor, especially because the oversight had since been addressed. We agree. Reversing the district court’s dismissal of the 2014 Case would have no practical effect. It is undisputed that at this point, the district court has entered final judgment for defendants. Thus, even if we were to remand the 2014 Case to the district court, the court could simply reissue the same opinion dismissing the 2014 Case based on res judicata. We 3 The district court denied Bell’s motion on December 8, 2015, four days after the district court ruled on Bell’s claims for injunctive and declaratory relief and entered final judgment for defendants. 14 Nos. 15-2343, 15-3735, 15-3731 decline Bell’s suggestion that we should use the limited resources of the judiciary in this manner. Therefore, we affirm the district court’s dismissal of the 2014 Case.