Court Opinion

ID: 2748212
Source: CourtListenerOpinion
Date Created: 2014-11-05 17:00:54.854117+00
Date Added: 2024-06-11T13:24:45.909743
License: Public Domain

NONPRECEDENTIAL DISPOSITION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

                United States Court of Appeals
                                  For the Seventh Circuit
                                  Chicago, Illinois 60604

                               Submitted November 4, 2014*
                                Decided November 5, 2014

                                          Before

                            RICHARD D. CUDAHY, Circuit Judge

                            MICHAEL S. KANNE, Circuit Judge

                            ANN CLAIRE WILLIAMS, Circuit Judge

No. 14-1731

TROY HENDERSON,                                    Appeal from the United States District
     Plaintiff-Appellant,                          Court for the Northern District of Illinois,
                                                   Eastern Division.
       v.
                                                   No. 13 cv 2621
JASON MARKER and
LTD COMMODITIES, LLC,                              Robert M. Dow, Jr.,
     Defendants-Appellees.                         Judge.

                                        ORDER

      Troy Henderson appeals from the dismissal of his lawsuit against former
employer LTD Commodities and a lawyer who filed a workers’ compensation claim on
his behalf. This is the latest of Henderson’s legal battles relating to his employment with

       *
       After examining the briefs and the record, we have concluded that oral
argument is unnecessary. Thus the appeal is submitted on the briefs and the record.
See FED. R. APP. P. 34(a)(2)(C).
No. 14-1731                                                                             Page 2

LTD. He previously accepted money to settle an accusation of racial discrimination and
a claim for workers’ compensation. He also lost a lawsuit against LTD and lawyers who
represented both him and the company in settling his allegation of discrimination. The
district court dismissed this action for a variety of reasons, including failure to state a
claim for relief under federal law. We uphold the dismissal.

      For purposes of this appeal, we accept as true the facts alleged in Henderson’s
complaint and incorporated exhibits. See Adams v. City of Indianapolis, 742 F.3d 720, 728
(7th Cir. 2014); Phillips v. Prudential Ins. Co. of Am., 714 F.3d 1017, 1019–20 (7th Cir. 2013).
Henderson began working as a maintenance mechanic for LTD in 2007. His coworkers
made racial slurs and assigned him the more-dangerous tasks because he was the only
African American on the maintenance team. One such task was repairing a conveyor
belt while it still was operating, leading to a knee injury and temporary disability for
which he collected workers’ compensation benefits beginning in 2008. Henderson
reported the discrimination to LTD’s personnel department and then retained a lawyer.
In 2009, the parties executed an $83,000 settlement that ended Henderson’s employment
with LTD but stipulated that he would waive all future claims against the company
except as relating to his unresolved demand for additional workers’ compensation. The
total payment to Henderson included $40,000 for emotional harm and other injuries
unrelated to lost wages. LTD recorded this amount on an IRS Form 1099 as
“nonemployee compensation.” Henderson wrote to the IRS, asking if it was correct to
classify the $40,000 as “nonemployee compensation.” He suspected that, by recording
the amount this way, LTD had represented to the IRS that he was a contract worker
instead of an employee, thus undermining his claim for workers’ compensation.

      Then in 2011 Henderson filed the first of his lawsuits against LTD, raising a
number of federal and state claims but principally seeking to nullify the 2009
settlement. Also named as defendants were the lawyers who represented him and LTD
in the settlement negotiations. The district court dismissed all of Henderson’s federal
claims sua sponte for failure to state a claim and declined to exercise supplemental
jurisdiction over his state-law claims. See Henderson v. Rauen, No. 11–cv–5787 (N.D. Ill.
Sept. 28, 2011). Henderson did not appeal the dismissal.

      Meanwhile, attorney Jason Marker negotiated on Henderson’s behalf to resolve
the workers’ compensation claim, which remained before the Illinois Workers'
Compensation Commission. Marker and counsel for LTD agreed on $140,000 in
addition to the workers’ compensation benefits Henderson already had received, but
the company, having just been sued by Henderson, apparently wanted from him a new
No. 14-1731                                                                        Page 3

release of all other, unrelated claims. Marker thus presented Henderson with proposed
settlements that would give him $140,000 for his workers’ compensation claim plus a
nominal $1 payment for a general release of any other claims against LTD. Henderson
balked because he suspected that Marker and LTD were trying to trick him into
waiving his workers’ compensation claim as part of the general release, even though
that claim was explicitly excluded from the general release. Henderson twice signed
and then revoked the general release, which prompted Marker to threaten to withdraw.
The appellate record does not disclose what became of the workers’ compensation claim
or the general release, but a search of the website of the Illinois Workers’ Compensation
Commission confirmed that the parties settled the workers’ compensation claim for
$140,000 in December 2011.

      In 2013 the IRS responded to Henderson’s concern that LTD had mischaracterized
the $40,000 from the initial settlement as “nonemployee compensation.” The IRS wrote
that LTD should have classified the amount as “other income” on the Form 1099. LTD
issued a corrected Form 1099, but a lawyer hired by Henderson (whose opinion is
attached as an exhibit to one of his submissions) advised that the difference in
characterization had no tax significance.

      Henderson then filed this action against LTD and Marker, asserting multiple
federal and state-law claims. He accused LTD and Marker of violating 42 U.S.C.
§ 1985(3) by conspiring to trick him into releasing his workers’ compensation claim for
$1, to deprive him of “statutorily protected proceedings,” and to interfere with his
workers’ compensation rights. He also claimed that, because of his race, the defendants
had interfered with his contract rights in violation of 42 U.S.C. § 1981 by misclassifying
his work status with the IRS and by retaliating against him for filing his first lawsuit.
Henderson also asserted a series of state-law claims, including negligent supervision
against LTD and breach of fiduciary duty against Marker. On the defendants’ motions,
the district court dismissed the federal claims based on claim preclusion and failure to
state a claim. The court declined to exercise supplemental jurisdiction over the state-law
claims.

      On appeal Henderson makes several arguments, but we need not elaborate on
them because we conclude that, affirmative defenses aside, his lengthy complaint states
no federal claim. Indeed, as the district court noted, many of Henderson’s principal
allegations are contradicted by his attachments. A claim arising under either § 1985(3)
or § 1981 would require proof that LTD and Marker acted because of Henderson’s race.
See Domino’s Pizza, Inc. v. McDonald, 546 U.S. 470, 476 (2006) (explaining that § 1981
No. 14-1731                                                                          Page 4

offers relief when racial discrimination interferes with contract rights); Bray v.
Alexandria Women’s Health Clinic, 506 U.S. 263, 267–68 (1993) (noting that § 1985(3)
requires proof of racial or other class-based animus); Muhammad v. Oliver, 547 F.3d 874,
878 (7th Cir. 2008) (discussing § 1981); Brokaw v. Mercer Cnty., 235 F.3d 1000, 1024 (7th
Cir. 2000) (discussing § 1985). In his complaint Henderson accuses LTD and Marker of
acting because of his race, but his 30-page complaint and almost 90 pages of
attachments come nowhere close to plausibly alleging discriminatory animus by LTD or
Marker. Similarly, Henderson claims retaliation under § 1981, but this conclusory
allegation is refuted by attachments showing that he suffered no ill effects from LTD’s
actions. See CBOCS West, Inc. v. Humphries, 553 U.S. 442, 457 (2008) (holding that § 1981
encompasses retaliation); Stephens v. Erickson, 569 F.3d 779, 786 (7th Cir. 2009)
(explaining that adverse action is an element of retaliation claim under § 1981).

      Simply reciting legal terms will not suffice to state a federal claim, so the district
court properly dismissed Henderson’s § 1985 and § 1981 claims. See Ashcroft v. Iqbal, 556
U.S. 662, 678, 681 (2009); Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555–56, 570 (2007);
Adams, 742 F.3d at 728, 733. And Henderson does not contest the district court’s choice
to decline to exercise supplemental jurisdiction over his state-law claims, so those
claims are abandoned. See Powers v. Richards, 549 F.3d 505, 512–13 (7th Cir. 2008);
Crestview Vill. Apartments v. U.S. Dep't of Hous. & Urban Dev., 383 F.3d 552, 555 (7th Cir.
2004).

     We have reviewed Henderson’s remaining contentions, and none has merit.

                                                                              AFFIRMED.