Opinion ID: 2708638
Heading Depth: 2
Heading Rank: 4

Heading: The Constitutional Claim (“Count One”)

Text: The final question is what to do about the Kathreins’ con‐ tention that the TIA is unconstitutional. The district court originally dismissed this count of the Kathreins’ complaint, and the panel affirmed that aspect of the decision on the ground that the Kathreins lacked standing to challenge the TIA because the Demolition Tax was not a tax. As we have explained, the principle upon which the affirmance rested is no longer good law. The Kathreins therefore request that they be allowed to press forward in the district court with their constitutional claim. Unfortunately, the Kathreins never moved for reconsid‐ eration of Count One before the district court. Unlike their other claims, which were still live following remand and thus susceptible to the defendants’ renewed motion to dis‐ miss, Count One was dismissed in a final judgment of the district court. This court affirmed the dismissal order on dif‐ ferent grounds, and its mandate issued. See Freeman v. Chan‐ dler, 645 F.3d 863, 870 (7th Cir. 2011) (The court of appeals “may affirm on any grounds present in the record.”). The claim was therefore no longer part of the case, and the dis‐ trict court could not revisit it sua sponte. See United States v. Polland, 56 F.3d 776, 777 (7th Cir. 1995) (“The mandate rule requires a lower court to adhere to the commands of a high‐ er court on remand.”). As a result, Count One is not before No. 12‐2958 13 this court, and there is no decision of the district court to re‐ view regarding that claim. If the Kathreins had wished for the district court to re‐ consider the dismissal following the mandate, they should have moved for relief from the final judgment pursuant to Federal Rule of Civil Procedure 60(b).5 See LSLJ P’ship v. Fri‐ to‐Lay, Inc., 920 F.2d 476, 478 (7th Cir 1990) (“[A] district court has jurisdiction to address a change in law [pursuant to Rule 60(b)] without flouting the mandate of the appellate court.”) (quotation marks omitted). The Kathreins did not do so. At oral argument in this appeal, the Kathreins conceded that they had considered Count One to be closed following the remand. It does not matter that the defendants, in their motion, also remained silent as to what effect Empress Casino might have on the Kathreins’ constitutional challenge. That claim had been dismissed from the case by a final judgment, and absent a Rule 60(b) motion the defendants had no rea‐ son to think it would revive. It is important both for litigants and the judicial system that claims already decided remain that way, barring an appropriate motion for reconsideration or to set aside the judgment. See Cincinnati Ins. Co. v. Flanders Elec. Motor Serv., Inc., 131 F.3d 625, 628 (7th Cir. 1997) (“[T]he need for the finality of judgments is an overarching con‐ cern.”). Instead of filing an appropriate motion to reconsider, the Kathreins, in their responses to the post‐Empress Casino mo‐ tion to dismiss before the district court, argued exclusively 5 The Kathreins also did not file a motion to amend the judgment under Rule 59(e) within the required 28‐day window, so any such motion now would be untimely. 14 No. 12‐2958 that this court’s earlier panel ruling was binding law of the case. In other words, they maintained that, for purposes of this litigation, the Demolition Tax should not be considered a tax and the TIA should not apply. The Kathreins also re‐ sponded with a separate motion to refile Count Two of their amended complaint—a takings claim that had been dis‐ missed by stipulation and without prejudice. Crucially, they did not file any such motion regarding Count One. This was a purposeful strategic choice; as a result, the Kathreins have waived any argument made on appeal that the Evanston or‐ dinance does impose a tax, and that they have standing to challenge the TIA.6 “[A] party who fails to adequately pre‐ sent an issue to the district court has waived the issue for purposes of appeal.” Fednav Intʹl Ltd. v. Contʹl Ins. Co., 624 F.3d 834, 841 (7th Cir. 2010). “It is not the district courtʹs job to flesh out every single argument not clearly made.” Wil‐ liams v. Dieball, 724 F.3d 957, 963 (7th Cir. 2013). By the same token, it is also not the district court’s responsibility to craft arguments in the alternative for the parties. The Kathreins decided to place all their eggs in the law of the case basket, and they had no ground to complain when that strategy backfired. Even if we were inclined to interpret the Kathreins’ responses to the defendants’ motion to dismiss as 6 Although the Kathreins filed this suit pro se and litigated the instant appeal themselves, Victoria Kathrein was represented by counsel follow‐ ing the remand to the district court, and counsel filed both the motion to refile Count II and a response to the motion to dismiss following Empress Casino. Victoria Kathrein therefore cannot be excused from her failure to argue the constitutional claim because of her pro se status. And as to Mi‐ chael Kathrein, pro se litigants “are in general subject to the same waiver rules that apply to parties who are represented by counsel.” Provident Sav. Bank v. Popovich, 71 F.3d 696, 700 (7th Cir. 1995). No. 12‐2958 15 a Rule 60(b) motion—and we are not—any argument regard‐ ing the constitutionality of the TIA has been waived.7 The Kathreins argue that they should have the oppor‐ tunity to relitigate the dispute over the constitutionality of the TIA, despite their failure to move for relief from final judgment, because the ruling that the Evanston ordinance levies a tax, by logical necessity, grants them standing to challenge the TIA. According to this contention, the district court’s second ruling automatically, or “by default,” resur‐ rected the constitutional claim. This argument is unavailing, for at least three reasons. First, Rule 60(b) requires a party to file a motion to dis‐ turb a final judgment, and it restricts the time in which a party may do so. A motion for relief from a judgment on any ground included in Rule 60(b)(1)–(3) must be made “no more than a year after the entry of judgment.” Fed. R. Civ. P. 60(c)(1). The district court’s original decision in this case came in 2009, so any such Rule 60(b) motion would now be untimely, even if the Kathreins had some colorable claim under those provisions. Likewise, any other Rule 60(b) mo‐ tion must be made “within a reasonable time.” Id. The Kathreins have not moved to set aside the district court’s judgment even now, long after the defendants put them on notice that Empress Casino worked an intervening change in the law. This delay is unreasonable. Therefore, the Kathreins 7 Procedural infirmities aside, the Kathreins’ attack on the TIA’s consti‐ tutionality was not promising. See Gass v. Cnty. of Allegheny, Pa., 371 F.3d 134, 141 (3d Cir. 2004) (rejecting a constitutional challenge to the TIA as “baseless”). But we do not reach the merits of the claim here. 16 No. 12‐2958 have missed their chance to seek relief from the district court’s final judgment. Second, the Kathreins have failed to show the district court that they have standing to pursue their constitutional claim. The district court’s initial decision did, like the en banc court, correctly view the Demolition Tax as a tax. It neverthe‐ less dismissed the Kathreins’ constitutional challenge for lack of standing. The court reasoned that “[t]hough the TIA bars federal courts from adjudicating state tax challenges, it leaves plaintiffs’ state‐court remedies intact.” 2009 WL 3055364, at . In its judgment, the Kathreins could not show that the TIA injured them—they were still capable of secur‐ ing relief in the state courts. We do not express any opinion here as to whether this standing decision was correct, but suffice it to say that “[t]he plaintiff, as the party invoking federal jurisdiction, bears the burden of establishing the re‐ quired elements of standing.” Lee v. City of Chi., 330 F.3d 456, 468 (7th Cir. 2003); see Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 (1992) (“The party invoking federal jurisdiction bears the burden of establishing” standing.). Empress Casino clearly endorsed the district court’s view that the Evanston exaction was a tax, but it said nothing to indicate that the district court’s initial decision dismissing their constitutional claim was wrong. Without a Rule 60(b) motion, the district court had no reason to revisit its judgment that the Kathreins lacked standing to make their constitutional challenge, even if the TIA barred their claims against the exaction in federal court. The third and final reason a motion was necessary is that Rule 60(b) requires more than a showing that the district court’s earlier decision has been undermined by intervening No. 12‐2958 17 law. “Rule 60(b) relief is an extraordinary remedy and is granted only in exceptional circumstances.” Cincinnati Ins. Co., 131 F.3d at 628. The Kathreins failed to show exceptional circumstances, and the reasons to reconsider the district court’s ruling were not self‐evident, even after Empress Casi‐ no. See McKnight v. U.S. Steel Corp., 726 F.2d 333, 336 (7th Cir. 1984) (“[A] change in the applicable law after entry of judg‐ ment does not, by itself, justify relief under [Rule] 60(b).”); see also Agostini v. Felton, 521 U.S. 203, 239 (1997) (“Interven‐ ing developments in the law by themselves rarely constitute the extraordinary circumstances required for relief under Rule 60(b)(6).”). By foregoing the Rule 60(b) motion to argue exclusively for maintaining the law of the case, the Kathreins failed to preserve any opportunity to demonstrate excep‐ tional circumstances. The portion of the district court’s deci‐ sion that the original panel affirmed still binds the parties.