Court Opinion

ID: 8209080
Source: CourtListenerOpinion
Date Created: 2022-09-26 16:00:56.625561+00
Date Added: 2024-06-11T16:41:37.783774
License: Public Domain

In the

    United States Court of Appeals
                 For the Seventh Circuit
                     ____________________
No. 22-1138
GREGORY A. RUGGLES,
                                                   Plaintiff-Appellee,
                                 v.

JACQUELINE RUGGLES, Executor of the Estate of DONALD
RUGGLES,
                                       Defendant-Appellant.
                     ____________________

         Appeal from the United States District Court for the
                    Central District of Illinois.
           No. 4:21-cv-04058 — James E. Shadid, Judge.
                     ____________________

 ARGUED SEPTEMBER 13, 2022 — DECIDED SEPTEMBER 26, 2022
                ____________________

   Before FLAUM, BRENNAN, and SCUDDER, Circuit Judges.
    SCUDDER, Circuit Judge. Article III of the Constitution lim-
its federal courts to deciding live Cases or Controversies.
When a dispute becomes moot—when the court can no longer
provide relief to the plaintiff—the federal court loses its au-
thority to proceed further. That happened here. Greg Ruggles
was upset by actions taken by his father, Don Ruggles, with
their family company, so he went to court to stop Don’s
2                                                  No. 22-1138

moves. But Don died while this dispute was on appeal, and
his passing meant that Greg could no longer receive the relief
he sought in this lawsuit. In these circumstances, we no longer
have a Case or Controversy before us and have no choice but
to order dismissal of the matter as moot.
                               I
    For the last seven years Don and Greg Ruggles have been
the only two shareholders of their family company, a closely
held corporation called XPAC. Greg held all the nonvoting
shares (totaling 99% of the company’s stock), and Don held
all the voting shares (the remaining 1%). Under the terms of
Don’s divorce agreement with Greg’s late mother, Don could
only transfer his voting shares to Greg (or to Greg’s brother,
but Greg bought the future interest in his brother’s voting
shares in 2015).
    A corporate governance dispute arose last year after Don
sought to increase his monthly salary by $10,000. Greg filed a
motion in Illinois state court seeking a constructive trust over
Don’s shares and an injunction preventing Don from voting
his shares in a way that would adversely affect XPAC’s oper-
ations, including by increasing his own salary. Greg filed his
motion in a long-dormant state court case that had started in
2002 with Don’s divorce from Greg’s mother.
    That unusual procedural posture is what led to this ap-
peal. Don removed the case to federal court, and Greg did not
object. No one disputes that the basic requirements of federal
diversity jurisdiction are met: the parties were diverse at the
time of removal, with Don domiciled in Florida and Greg in
Iowa, and the amount in controversy exceeds $75,000. Even
so, the district court remanded the case to state court because
No. 22-1138                                                       3

Don’s removal to federal court came well over a year after the
initial divorce lawsuit began back in 2002. See 28 U.S.C.
§ 1446(c)(1). Don appealed the district court’s remand order,
which brought the case before us.
   But on April 9, 2022—in the middle of the briefing sched-
ule in our court—Don died. This event is of legal conse-
quence. Remember that Greg sought two forms of relief in the
motion that led to this appeal: a constructive trust over Don’s
voting shares in XPAC and an injunction to stop Don from
voting his shares in a way that would adversely affect XPAC
or Greg’s interest in the company. Don’s death renders these
two forms of relief meaningless—in a word, it makes them
moot.
                                 II
    The mootness doctrine implements Article III’s Case or
Controversy requirement by preventing federal courts from
resolving questions that cannot affect the rights of the parties
before them. See North Carolina v. Rice, 404 U.S. 244, 246
(1971); see also Chafin v. Chafin, 568 U.S. 165, 171–72 (2013).
This Article III limitation is not a one-and-done hurdle to
clear. Rather, the “case-or-controversy requirement subsists
through all stages of federal judicial proceedings, trial and ap-
pellate.” Lewis v. Cont’l Bank Corp., 494 U.S. 472, 477 (1990); see
also Watkins v. United States Dist. Ct., 37 F.4th 453, 457 (7th Cir.
2022) (“If intervening circumstances deprive the plaintiff of a
personal stake in the outcome, ‘the action can no longer pro-
ceed and must be dismissed as moot.’” (quoting Genesis
Healthcare Corp. v. Symczyk, 569 U.S. 66, 72 (2013))). When a
question about mootness arises, federal courts have a consti-
tutional obligation to address it—on our own if need be. See
Watkins, 37 F.4th at 457.
4                                                    No. 22-1138

   A matter is moot if it becomes impossible for a federal
court to provide “any effectual relief” to the plaintiff. Mission
Prod. Holdings, Inc. v. Tempnology, LLC, 139 S. Ct. 1652, 1660
(2019) (quoting Chafin, 568 U.S. at 172). And neither of the two
remedies that Greg sought in his motion—a constructive trust
and injunctive relief—is “effectual relief” after Don’s death.
    It is easy to see why. The terms of Don’s divorce agree-
ment with Greg’s mother require that Don transfer his XPAC
shares to Greg and no one else. If Don’s shares pass to Greg
(under Don’s will or otherwise), any need for a constructive
trust evaporates; if Don has attempted to will the shares to
someone else, the proper forum for challenging his will is in
probate court in Florida, where Don lived at the time of his
death. See Fla. Stat. § 733.101(1)(a). As for Greg’s requested
injunctive relief, there is no longer a need to enjoin Don from
taking any action that might adversely affect XPAC. And
“once the threat of the act sought to be enjoined dissipates,
the suit must be dismissed as moot.” Brown v. Bartholomew
Consol. Sch. Corp., 442 F.3d 588, 596 (7th Cir. 2006).
     Of course, the fact that these particular requests for relief
are moot does not mean that all disputes between the parties
disappear going forward. At oral argument the parties sug-
gested that Greg is considering a suit for monetary damages
from Don’s estate. And given that Don’s estate is currently in
probate, further disagreements—perhaps in one way or an-
other relating to Don’s XPAC shares—might arise during the
probate action. Any such disputes are not part of the matter
before us, though, and only time will tell what disagreements
(if any) will remain after Don’s estate is probated. All we can
and need say for certain today is that the present appeal is
moot.
No. 22-1138                                              5

    At oral argument we asked the parties whether Don’s
death mooted this appeal. With admirable candor, both sides
answered yes—even as they observed that other legal pro-
ceedings may prove necessary if the parties prove unable to
iron out other disputes between them. We thank both parties
for their forthrightness.
    For these reasons, we VACATE and REMAND with in-
structions to dismiss this matter as moot.