Court Opinion

ID: 767917
Source: CourtListenerOpinion
Date Created: 2012-04-18 08:46:13+00
Date Added: 2024-06-11T17:55:31.755470
License: Public Domain

205 F.3d 1015 (7th Cir. 2000)
Federal Election Commission,    Plaintiff-Appellant,v.Al Salvi for Senate Committee  and Stephanie Mustell, as Treasurer,    Defendants-Appellees.
Nos. 99-1508 and 99-2183
In the  United States Court of Appeals  For the Seventh Circuit
Argued December 8, 1999Decided March 8, 2000

Appeal from the United States District Court for the  Northern District of Illinois, Eastern Division.  No. 98 C 4933 and No. 98 C 1321--George W. Lindberg, Judge.
Before Harlington Wood, Jr., Coffey and Flaum, Circuit  Judges.
Flaum, Circuit Judge.

1
The Federal Election  Commission ("Commission") appeals an order of the  United States District Court for the Northern  District of Illinois denying the Commission's  motion under Rules 60(b)(1) and (b)(4) for relief  from an order dismissing a civil enforcement  action the Commission had brought against the Al  Salvi for Senate Committee and its treasurer,  Stephanie Mustell, (collectively, "defendants")  for violations of the Federal Election Campaign  Act. The Commission also appeals the dismissal,  and refusal to alter or amend the judgment, of a  subsequent action, which the district court held  was barred by the first dismissal under res  judicata. For the reasons stated below, we  affirm.

Background

2
On March 3, 1998, the Commission filed a  complaint in the district court alleging that the  defendants violated the Federal Election Campaign  Act of 1971 by failing to properly report  campaign contributions. At the time it filed the  complaint, the Commission had no attorneys on the  case who were members of the Northern District of  Illinois Bar, and the Commission had neither  designated local counsel for service, as required  by the district court's General Rule 3.13, nor  filed a petition for admission pro hac vice under  General Rule 3.12.

3
On April 2, 1998, the Commission filed an ex  parte motion for waiver of the local counsel and  admission requirements. On April 7, the district  court issued an order denying the Commission's  motion for failure to comply with General Rule  15(B), which requires that an ex parte motion be  supported by an affidavit showing cause. The  front side of the order stated, at the bottom of  the page, that further details were printed on  the reverse side. On the reverse side, the order  indicated that the court had considered and  rejected the merits of the Commission's motion  for waiver of the court's requirements: "evenif  the requirements of 15(B) had been met and even  if the court had determined plaintiff's motion  was appropriate for consideration ex parte, the  motion would have been denied."

4
Due to a recording error at the court clerk's  office, the Commission's counsel only received  notice of the April 7 order on May 8, 1998. At  that time, the Commission's counsel only copied  and read the front side of the order, and were  therefore unaware that the court had considered  and rejected the merits of the Commission's April  2 motion. Consequently, the Commission refiled  its motion for waiver of the court's local  counsel and admission requirements.

5
On June 10, 1998, the district court again  denied the Commission's motion, and this time  struck all documents filed by the Commission for  failure to designate local counsel. The June 10  order also noted that the Commission's counsel  had, in failing to do so, directly violated the  court's previous, April 7 order. On July 8, 1998,  the court, sua sponte, entered an order pursuant  to Federal Rule of Civil Procedure 41(b)  dismissing the Commission's action.

6
According to the Commission, it had begun  compliance with the court's directives upon  receipt of the June 10 order by obtaining local  counsel, petitioning for admission pro hac vice,  and filing an amended complaint, appearance form,  and summonses. Following dismissal of its case,  on August 10, 1998, the Commission refiled its  case against the defendants, and this second case  was assigned to the same district court judge as  the first action. The Commission did not move to  alter or amend the July 8 dismissal order nor did  it file a notice of appeal of the court's ruling  in the original action. On November 30, 1998, the  court granted the defendants' motion to dismiss  the second action with prejudice on the ground  that it was barred by the doctrine of res  judicata, because the original action was  dismissed with prejudice.

7
Upon learning from the court's November 30  order that the court's first dismissal was with  prejudice, the Commission filed a motion under  Federal Rule of Civil Procedure 60(b) to vacate  the July 8 order dismissing the first action and  to thereby permit the Commission to file a  complaint to replace the one stricken by the  court in June. The Commission argued that the  dismissal was void as a matter of law; that it  was based on the court's mistaken belief that the  Commission had failed to comply with previous  orders; and that any delay in complying with  prior orders was the result of "excusable  neglect." The Commission concurrently filed a  motion under Rule 59(e) to alter or amend the  judgment in the second action, arguing that the  second action was not barred by the first action  because, to the extent the earlier dismissal  constituted a final judgment, it was void. The  court denied these motions. The Commission now  appeals the district court's denial of its Rule  60(b) motion as well as the judgment dismissing  the Commission's second action.

Discussion

8
Although we are asked today to review several  decisions by the district court stemming from two  separate actions, the Commission ultimately seeks  to revisit the district court's sua sponte  dismissal with prejudice of the first action. We  are somewhat sympathetic to the Commission--  though it seems clear that this case is before us  because the Commission's counsel repeatedly  failed to heed clear directives from the district  court--because, as explained below, we believe  the district court abused its discretion in  dismissing the first action with prejudice.  However, the procedural posture of this case  leaves us no choice but to affirm the decisions  on which this appeal is based.

A.

9
The Commission argues that the district court  erred in concluding that the sua sponte dismissal  of the first action barred the second action  under res judicata. The Commission contends that  when the court dismissed the first action for  failure to satisfy local counsel and admission  requirements, the court did not purport to  address the merits and did not specify whether  the dismissal was with or without prejudice to  the Commission's refiling its complaint. The  defendants respond that the district court's  dismissal of the first action was not based on  technical, procedural shortfalls. Rather, they  argue, the district court ordered the first  action dismissed as a sanction for the  Commission's violation of court orders. While the  July 1998 order of dismissal did not address the  merits of the first action, Rule 41(b)  establishes a presumption that such an order  operates as an adjudication of the merits. Any  later suit with the same allegations was  therefore subject to dismissal based on res  judicata.

10
The district court in the second action  resolved this dispute in favor of the defendants,  stating that its July 1998 dismissal was a  sanction for what amounted to lack of  prosecution. In its order dated November 30,  1998, dismissing the second action as barred by  res judicata, the district court stated that the  first action "was involuntarily dismissed as a  sanction for plaintiff's violation of this  court's rules and violation of a court order. .  . . The dismissal of the prior action was not for  lack of jurisdiction, improper venue, or failure  to join a party under Rule 19. Therefore, since  the order of dismissal did not otherwise specify,  dismissal of the prior action operated as  adjudication on the merits of the claims brought  in that action." The heart of the Commission's  appeal is that the district court's dismissal "on  the merits" was improper.

11
Although the local counsel rule, Northern  District of Illinois General Rule 3.13,  specifically indicates that a party's documents  may be stricken as a sanction for failure to  obtain local counsel, the language of the rule  does not preclude alternative remedies when  necessary. Moreover, a federal court is granted  authority to dismiss an action pursuant to Rule  41(b) for failure to comply with a prior court  order. Fed.R.Civ.P. 41(b). Finally, courts have  discretion to impose sanctions to protect the  judicial process, Chambers v. Nasco, Inc., 501 U.S. 32, 44-45 (1991), and the authority of a  court to dismiss cases sua sponte for lack of  prosecution has long been considered an "inherent  power" that is "necessarily vested in courts to  manage their own affairs so as to achieve the  orderly and expeditious disposition of cases."  Link v. Wabash Railroad Co., 370 U.S. 626, 630-31  (1962).

12
We appreciate the district court's frustration  with the Commission's lack of diligence and its  failures to comply with court directives in the  first action. We also recognize that district  courts must have wide discretion to manage  litigation. "Because district judges have a  better understanding of their litigants and their  docket, review of managerial decisions such as  this one are appropriately deferential." Johnson  v. Kamminga, 34 F.3d 466, 468 (7th Cir. 1994). In  this case, however, we believe the district court  acted beyond its discretionary authority in  dismissing sua sponte the first action.

13
In Link, the Supreme Court held that the  absence of express notice prior to a sua sponte  dismissal with prejudice for failure to prosecute  is not an automatic denial of due process. 370 U.S. at 632. However, in Ball v. City of Chicago,  2 F.3d 752 (7th Cir. 1993), we restricted a  district court's dismissal powers in this regard  by requiring the court to provide "due warning"  to plaintiff's counsel. Although we recognized in  Ball that there may be extreme circumstances in  which an explicit warning is unnecessary before  sua sponte dismissal is used as a sanction, id.  at 756; see also Johnson, 34 F.3d at 468  (encouraging, but not requiring, a warning before  dismissing a case for failure to prosecute where  the plaintiff repeatedly delayed the litigation  and finally failed to attend the trial without  sufficient excuse), we have repeatedly emphasized the general rule that explicit warning must be  given to a plaintiff's counsel prior to  dismissal. See Williams v. Chicago Bd. of Educ.,  155 F.3d 853, 858 (7th Cir. 1998). "[D]ismissals  without warning are appropriate in only the most  extreme cases, where it is clear that counsel  must have expected his actions (or inaction) to  be answered with dismissal." In re Bluestein &  Co., 68 F.3d 1022, 1026 (7th Cir. 1995).

14
Although we do not excuse the Commission's  conduct--indeed, we are puzzled that the  Commission put itself in this position at all--it  is hard to see how the recitation of the local  rules in the April order would have highlighted  the possibility of sanctions far beyond those  authorized by the rules themselves. Under Ball,  the district court's actions in this case amount  to abuse of discretion.

B.

15
Nevertheless, despite our conclusion that the  district court abused its discretion in  dismissing the first action with prejudice, that  decision itself is not so squarely before us.  Presumably because the Commission's counsel did  not realize that the dismissal was on the merits  until after the time limit for doing so expired,  the Commission did not bring a direct appeal.  Rather, it brought a second suit, and now asks us  to review the district court's dismissal of that  suit as barred by the first one, as well as the  district court's refusal to vacate the first  judgment under Rule 60. None of these avenues  provides relief in this case.

16
The Commission first relies on two subdivisions  of Rule 60(b), which enables the district court  to "relieve a party or a party's legal  representative from a final judgment, order or  proceeding." Fed.R.Civ.P. 60(b). The Commission  argues that the district court should have  vacated the first dismissal judgment under Rule  60(b)(4), which applies to void judgments, or  alternatively under Rule 60(b)(1), which applies  to adverse judgments stemming from excusable  neglect. The district court denied the  Commission's Rule 60 motion, finding the  Commission's pleas meritless.

17
The Commission argues that it was entitled to  relief under Rule 60(b)(4) because the dismissal  of the first action is void. A judgment is void  within the meaning of Rule 60(b)(4) where it is  entered by the court without jurisdiction or in  contravention of due process, Wesco Products Co.  v. Alloy Automotive Co., 880 F.2d 981, 984 (7th  Cir. 1989), and we review denials of 60(b)(4)  motions de novo to the extent they turn on errors  of law. Grun v. Pneumo Abex Corp., 163 F.3d 411,  423 (7th Cir. 1998). The Commission contends that  the dismissal violated due process because the  court failed to give it adequate notice that the  court was contemplating dismissal of the  Commission's action. However, Link made it clear  that failure to notify a party of the possibility  of dismissal does not necessarily render an  involuntary dismissal void. 370 U.S. at 632.  While we believe the district court's failure to  warn of the impending dismissal constituted abuse  of discretion, under the facts of this case it  cannot be said that the district court's  discretionary abuse rose to the level of due  process deprivation. Although a warning would  have been appropriate, this case was not  dismissed entirely out of the blue, over an issue  that the Commission was never apprized of. See,  e.g., Grun, 163 F.3d at 423-24 (holding that the  plaintiff was denied due process when his case  was dismissed for failure to appear at trial,  when he did not receive notice of the trial  date). To the contrary, the district court made  clear its intention to enforce the local rules  strictly in its orders, which at every turn the  Commission chose to read in the light affording  it the most flexibility. We agree that the  dismissal should not have been vacated under Rule  60(b)(4) as void. See Link, 370 U.S. at 633  ("[W]hen circumstances make such an action  appropriate, a District Court may dismiss a  complaint for failure to prosecute even without  affording notice of its intention to do so or  providing an adversary hearing before acting.  Whether such an order can stand on appeal depends  not on power but on whether it was within the  permissible range of the court's discretion.").

18
The Commission also contends that the district  court's July order dismissing the action should  have been vacated pursuant to Rule 60(b)(1).  Under this subsection, a court may vacate a final  judgment based on mistake, inadvertence,  surprise, or excusable neglect. Fed.R.Civ.P.  60(b)(1). Unlike the Rule 60(b)(4) inquiry, this  one focuses not on the dismissal itself but on  the conduct that gave rise to it. The Supreme  Court explained in Pioneer Investment Services  Co. v. Brunswick Associates, 507 U.S. 380 (1993),  that attorney carelessness can constitute  excusable neglect, but 60(b)(1) relief remains a  discretionary safety valve, and our review under  Rule 60(b)(1) is extremely deferential. United  States v. Golden Elevator, Inc., 27 F.3d 301, 303  (7th Cir. 1994). Our review of the district  court's denial of the Rule 60(b) motion convinces  us that the district court adequately considered  the Commission's explanations for its delays in  complying with court orders as well as delays  resulting from the court clerk's own errors.  Although the circumstances of this case might  arguably constitute excusable neglect permitting  relief, they certainly do not compel that  conclusion. See id. (stating that a Rule 60(b)(1)  motion stands "unless no reasonable person could  have acted as the judge did"). Accordingly, we  affirm the district court's denial of the  Commission's Rule 60(b) motion.

19
In addition to appealing the Rule 60 motion  pertaining to the first action, the Commission  appeals the district court's judgment in the  second action, which dismissed the case as barred  under res judicata by the first dismissal, and  the Commission also appeals the district court's  denial of the Commission's Rule 59(e) motion to  alter or amend that second judgment. This  challenge rests on the assumption that the first  judgment was not on the merits, for it is  undisputed that a decision on the merits would  bar relitigation of the same claim by the  Commission. See People Who Care v. Rockford Bd.  of Educ., 68 F.3d 172, 177 (7th Cir. 1995).  However, we have already found that the first  action was dismissed with prejudice, and that the  sua sponte dismissal in that case (though an  abuse of discretion) therefore operated as  adjudication on the merits. Faced with the  dismissal of its first suit, the Commission could  have taken the customary paths of seeking  reinstatement of its first suit, moving for  amendment of that judgment under Rule 59(e), or  directly appealing. By filing the second action,  and now appealing the dismissal of that action as  barred by res judicata, the Commission is  pursuing what amounts to an impermissible  collateral attack on the first judgment. See  Hudson v. Hedge, 27 F.3d 274, 276 (7th Cir. 1994)  (holding that a plaintiff "cannot use a new suit  to contend that the disposition of the first was  mistaken"). The Commission cannot use review of  the dismissal of the second action to revisit  decisions in the first action that it should have  challenged directly. Accordingly, we find no  error in the district court's disposition of the  second action.

Conclusion

20
For the reasons stated herein, we AFFIRM the  rulings of the district court