Court Opinion

ID: 3000492
Source: CourtListenerOpinion
Date Created: 2015-09-24 20:05:32.37639+00
Date Added: 2024-06-11T11:45:41.633146
License: Public Domain

In the
 United States Court of Appeals
              For the Seventh Circuit
                         ____________

No. 06-2060
LINDSEY ROSS, by and through her parents and
next friends, MICHAEL and DIANE ROSS,
                                           Plaintiffs-Appellants,
                                v.

BOARD OF EDUCATION OF TOWNSHIP HIGH SCHOOL
DISTRICT 211, et al.,
                                   Defendants-Appellees.
                      ____________
           Appeal from the United States District Court
      for the Northern District of Illinois, Eastern Division.
            No. 05 C 6111—Paul E. Plunkett, Judge.
                         ____________
    ARGUED JANUARY 3, 2007—DECIDED MAY 11, 2007
                   ____________

 Before EASTERBROOK, Chief Judge, and WOOD and
WILLIAMS, Circuit Judges.
  WOOD, Circuit Judge. In this case, as in its companion
Board of Education of Township High School District 211
v. Ross, No. 05-3700 (“Ross I”), decided today, Lindsey
Ross and her parents ask us to consider Lindsey’s claim
that Township High School District 211 violated her rights
in various ways during her high school years. Lindsey,
who is afflicted with Rett syndrome, a neurodevelop-
mental disorder that strikes girls almost exclusively,
claims here through her parents that she is not bound by
2                                              No. 06-2060

a settlement agreement that her parents signed on her
behalf when she was a minor. If she were freed from the
strictures of that agreement, which figures in Ross I, she
believes that she would be entitled now to assert claims
against the District and Dr. Daniel E. Cates, the District’s
Director of Special Education, under the Americans with
Disabilities Act (ADA), 42 U.S.C. § 12132; section 504 of
the Rehabilitation Act of 1973, 29 U.S.C. § 794; and the
Civil Rights Act, 42 U.S.C. § 1983. She has also raised
state law claims against Dr. Bennett L. Leventhal, an
outside expert who participated in her treatment plan, for
medical malpractice, battery, and violation of the Illinois
Mental Health and Disabilities Code, 405 ILCS 5/2-107.
  Lindsey’s current effort foundered at the outset when the
district court found that, settlement or no settlement, the
new set of claims against the District and Dr. Cates
was barred under the doctrine of claim preclusion. After
dismissing the federal claims, the district court elected to
dismiss the state supplemental claims without prejudice.
See 28 U.S.C. § 1367(c)(3). Lindsey has appealed, claiming
that she is not bound by anything that occurred in Ross I,
and thus that her new claims cannot be barred. We
conclude, to the contrary, that her current claims could
and should have been brought in the first action and that
nothing about the settlement agreement changes that
fact. We therefore affirm the district court’s judgment
dismissing her federal claims with prejudice and her
state claims without prejudice.

                             I
  We limit our discussion of the facts to those that are
important to Lindsey’s ability to pursue the present case.
A more detailed account of her experience in District 211’s
Conant High School appears in Ross I. The earlier case
centered on the question whether District 211 had fulfilled
No. 06-2060                                                 3

its obligation under the Individuals with Disabilities
Education Act (IDEA), 20 U.S.C. § 1414, to provide
Lindsey with a free and appropriate public education in
the least restrictive environment. It reached the district
court when, on August 27, 2002, District 211 filed a
complaint seeking to enjoin Lindsey’s parents from
invoking the “stay put” provision of the IDEA, under
which the District would have been required to keep
Lindsey in her current placement while the school and the
parents resolved differences of opinion about the optimal
placement for her. See 20 U.S.C. § 1415(j); Rodiriecus L. v.
Waukegan Sch. Dist. No. 60, 90 F.3d 249, 252 (7th Cir.
1996). Negotiations between Lindsey’s parents and the
District were at least temporarily successful, insofar as
they resulted in the settlement agreement at issue in the
present case on November 5, 2002. The parties to the
agreement were the District and “Michael and Diane Ross,
on their own behalf and on behalf of Lindsey Ross.”
  In that agreement, the Rosses agreed, among other
things, to
    fully and forever release and discharge the School
    District and its Board members, employees and agents
    from any and all claims . . . which have or may have
    arisen as a result of the past actions or inactions of the
    School District, its current and former Board members,
    employees and/or agents . . . including those arising
    under the IDEA[,] . . . Section 504 of the Rehabilita-
    tion Act of 1973, 29 U.S.C. § 794, the Americans with
    Disabilities Act, 42 U.S.C. § 12101 et seq., their respec-
    tive implementing regulations, and 42 U.S.C. § 1983,
    up through and including the effective date of this
    Agreement.
In exchange, the District promised to use its resources
and work with an expert panel to create a plan to help
Lindsey return to Conant. Unfortunately, her return was
4                                               No. 06-2060

ultimately unsuccessful, and after a final meeting that
included Lindsey’s parents, members of the expert panel,
and her “individualized educational plan” or IEP team on
November 5, 2003, the District returned to the court with
another emergency petition to block “stay put” relief.
  At that point, Lindsey filed an answer and a counter-
claim against the District; the counterclaim detailed a
number of ways in which the District had allegedly failed
to meet its obligations under the IDEA. After a year in
which an administrative hearing took place, the result of
which was to uphold the District’s placement decision,
Lindsey filed a First Amended Cross-Complaint [sic]
against District 211. The new pleading (which, because it
was against an opposing party, should have been labeled
a counterclaim, see FED. R. CIV. P. 13(a), (b), rather than
a cross-claim, see FED. R. CIV. P. 13(g)) challenged the
state hearing officer’s decision and added new claims
against District 211 under the IDEA, the ADA, and section
504 of the Rehabilitation Act. The district court granted
summary judgment in favor of District 211, a ruling that
we affirm today in Ross I.
  Approximately a month after she filed her notice of
appeal in Ross I, Lindsey filed the present suit against
District 211 and Dr. Cates. This time she relied exclu-
sively on the ADA, the Rehabilitation Act, and the Civil
Rights Act as the theories under which she asserted a
right to recover. The district court held that her new action
was barred by res judicata, or claim preclusion, because
her claims arise out of the same basic events as those
underlying the first suit. Insisting that the court should
have relieved her of the broad release contained in the
November 2002 settlement agreement (because at this
point she is no longer a minor), that she has a right to
relitigate many of the issues resolved in Ross I, and that
some of her claims involve matters that occurred after
the settlement agreement was signed, Lindsey asks this
court to reverse.
No. 06-2060                                                 5

                             II
  The similarities between Ross I and the present case
are striking enough that the common-sense question
arises why a second lawsuit should be permitted after
the first one apparently resolved the dispute between the
parties. The common-sense response that it ordinarily
should not be goes more formally by the name of claim
preclusion or res judicata. In Montana v. United States,
the Supreme Court described the doctrine concisely as
follows:
    A fundamental precept of common-law adjudication,
    embodied in the related doctrines of collateral estoppel
    and res judicata, is that a “right, question or fact
    distinctly put in issue and directly determined by a
    court of competent jurisdiction . . . cannot be disputed
    in a subsequent suit between the same parties or their
    privies . . . .” Southern Pacific R. Co. v. United States,
    168 U.S. 1, 48-49, 18 S.Ct. 18, 27, 42 L.Ed. 355 (1897).
    Under res judicata, a final judgment on the merits
    bars further claims by parties or their privies based on
    the same cause of action. Cromwell v. County of Sac,
    94 U.S. 351, 352, 24 L.Ed. 195 (1877); Lawlor v.
    National Screen Service Corp., 349 U.S. 322, 326, 75
    S.Ct. 865, 867, 99 L.Ed. 1122 (1955); 1B J. Moore,
    Federal Practice ¶ 0.405[1], pp. 621-624 (2d ed.
    1974) . . . ; RESTATEMENT (SECOND) OF JUDGMENTS § 47
    (Tent. Draft No. 1, Mar. 28, 1973) (merger); id., § 48
    (bar).
440 U.S. 147, 153 (1979). This court has identified three
requirements that a party asserting claim preclusion must
satisfy: (1) identity of the claim, (2) identity of parties,
which includes those in “privity” with the original parties,
and (3) a final judgment on the merits. See Perry v. Globe
Auto Recycling, Inc., 227 F.3d 950, 952 (7th Cir. 2000);
Roboserve, Inc. v. Kato Kagaku Co., 121 F.3d 1027, 1034
(7th Cir. 1997).
6                                               No. 06-2060

   The federal law of claim preclusion applies here be-
cause the earlier judgment was rendered by a federal
court. See Schor v. Abbott Labs., 457 F.3d 608, 615 (7th
Cir. 2006); Barnett v. Stern, 909 F.2d 973, 977 (7th Cir.
1990); RESTATEMENT (SECOND) OF JUDGMENTS § 87 (1982).
In order to decide whether the two cases involve the same
claim, we ask whether they arise out of the same transac-
tion. If they did, whether or not they were actually raised
in the earlier lawsuit, they may not be asserted in the
second or subsequent proceeding. It is critical, therefore,
to define what falls within the single transaction or
litigation unit encompassed by the first case. We took a
functional approach to that task in Perkins v. Board of
Trustees of University of Illinois:
    What is a single transaction? The usual answer—
    “common core of operative fact,” see Car Carriers,
    Inc. v. Ford Motor Co., 789 F.2d 589, 593 (7th
    Cir. 1986)—poses questions of its own. Because the
    function of res judicata is to require the joinder of all
    legal challenges to a wrong, and all claims for relief
    arising out of those events, without compelling the
    joinder of claims arising from separate wrongs, we
    concluded in Herrmann v. Cencom Cable Associates,
    Inc., 999 F.2d 223, 226 (7th Cir. 1993), that claims
    “based on the same, or nearly the same, factual allega-
    tions” must be joined. . . . But if the supposedly wrong-
    ful events are separated by time and function,
    multiple suits are permissible (even though not desir-
    able).
116 F.3d 235, 236-37 (7th Cir. 1997). As the district court
correctly observed, both of Lindsey’s lawsuits deal with
District 211’s placement decisions, the services it offered
her, and its response to her disability. The fact that the
suits differ in some respects, including the legal theories
that Lindsey is advancing and some of the facts she
No. 06-2060                                                7

intends to use to prove her right to relief, is not enough to
defeat a finding that these cases rely on the same funda-
mental transaction or series of transactions. Thus, even
though the IDEA claim focuses on the type of educational
plan the District developed for her and the extent to
which it was prepared to leave her with the general
student population, and the ADA and Rehabilitation Act
claims assert out-and-out discrimination based on her
disability, the underlying allegedly wrongful events are
the same.
  A comparison of the allegations in the complaint in the
present case and in Lindsey’s “First Amended Cross-
Complaint” in Ross I erases any doubt that one might
have about the identity of the transactions underlying
these two lawsuits. Lindsey argues here that the settle-
ment agreement prevented her parents from litigating any
matters that arose “pre-settlement,” but it is plain that
they (for themselves and on behalf of Lindsey) were
effectively doing just that in their challenge to the con-
clusion reached by the state hearing officer, and also that
they raised every claim about the post-settlement period
that Lindsey’s current complaint sets forth against the
District and Dr. Cates. (We discuss her new complaint
against Dr. Leventhal later.) Moreover, the time at which
claim identity must be assessed is at the outset of a
lawsuit. The fact that a party may have chosen to settle
some or all of its claim later on says nothing about
which potential claims fell within the same transaction
that gave rise to the suit or which additional theories
could have been asserted.
   It is worth recalling, in this connection, that Lindsey
filed a counterclaim raising ADA and Rehabilitation Act
claims in the first suit. That was a wise decision, given the
language of FED. R. CIV. P. 13(a), which makes compulsory
all counterclaims that arise “out of the transaction or
occurrence that is the subject matter of the opposing
8                                               No. 06-2060

party’s claim . . . .” Again, these counterclaims are “compul-
sory” only in the sense that a failure to include them in
the suit means that they are thereafter barred. See Baker
v. Gold Seal Liquors, Inc., 417 U.S. 467, 469 n.1 (1974);
6 Wright, Miller & Kane, Federal Practice and Procedure
§ 1417 (2d ed. 1990). Just as for the “same claim” require-
ment of claim preclusion, there is no formalistic test for
determining whether suits arise out of the same transac-
tion or occurrence. Instead, we have held that courts
“should consider the totality of the claims, including the
nature of the claims, the legal basis for recovery, the law
involved, and the respective factual backgrounds.”
Burlington Northern R. Co. v. Strong, 907 F.2d 707, 711
(7th Cir. 1990). Taking that approach, we have no trouble
finding that the claims Lindsey is now trying to assert
were compulsory counterclaims in the original suit.
Although the settlement agreement was reached in
November 2002, the litigation went on long after that.
Lindsey’s own amended answer was filed after the Novem-
ber 2003 break-down between the parties.
   The third element of claim preclusion requires a final
judgment on the merits in the first case. The district court
issued its final judgment in Ross I on August 15, 2005;
Lindsey, through her parents, commenced this case on
October 21, 2005, a little more than a month after she
filed her notice of appeal in Ross I. There is no question
that the district court’s Ross I decision was a final judg-
ment for purposes of 28 U.S.C. § 1291. This is normally
enough to assure finality for preclusion purposes also. In
particular, the fact that an appeal was lodged does not
defeat the finality of the judgment. See 18A Wright, Miller
& Cooper, Federal Practice and Procedure § 4433 at 78-79
& n.11 (2d ed. 2002) (citing Deposit Bank v. Frankfort, 191
U.S. 499 (1903)). As the Supreme Court said in Federated
Department Stores, Inc. v. Moitie, “A judgment merely
voidable because based upon an erroneous view of the
No. 06-2060                                                 9

law is not open to collateral attack, but can be corrected
only by a direct review and not by bringing another action
upon the same cause [of action].” 452 U.S. 394, 398 (1981)
(quoting Baltimore S.S. Co. v. Phillips, 274 U.S. 316, 325
(1927)).
  The element of claim preclusion that Lindsey contests
most vigorously, at least implicitly, is the identity of party
requirement. In her view, Ross I was brought by her
parents during the time when she was a minor. (She
turned 18 years old in October 2004.) Her parents, she
continues, were under a special obligation when they
entered into the settlement agreement, and their decisions
could not bind her beyond her minority without an inde-
pendent decision by the court ensuring that the agree-
ment fairly promoted her interests. As support for that
proposition, they cite Dacanay v. Mendoza, 573 F.2d 1075,
1079 (9th Cir. 1978), as well as Evans ex rel. Husted v.
General Motors Corp., 732 N.E.2d 79, 87 (Ill. App. Ct.
2000) (setting forth state law—not binding for federal
claim preclusion—on the subject).
  If circumstances in this case were different, and Lindsey
had been represented by her parents earlier solely be-
cause of her minority and she were now proceeding
independently, we would need to explore this question
more thoroughly. Because of her disability, however, the
fact is that the parties to the present case (excluding, once
again, Dr. Leventhal) and the earlier case are literally
identical. In Ross I, the defendants and cross claimant
were initially named as “Michael R. and Diane R., individ-
ually and as next friends of Lindsey R., a minor.” In the
present case, the plaintiff-appellant is described as
“Lindsey Ross, by and through her parents and next
friends, Michael and Diane Ross.” Unfortunately, because
of her disability Lindsey is no more able to proceed
independently now than she was prior to the time she
reached the age of majority. There is nothing in this rec-
10                                            No. 06-2060

ord to suggest that her parents have not, throughout
these proceedings, faithfully and firmly represented her
interests. We therefore conclude that this element of claim
preclusion is also satisfied, and thus that the district
court correctly ruled that the present case, insofar as it
involves claims between Lindsey, on the one hand, and
District 211 and Dr. Cates, on the other, is barred by
the earlier litigation.

                           III
  That leaves only Lindsey’s complaint against Dr.
Leventhal, who was an expert from the University of
Chicago who became involved at one point in evaluating
Lindsey’s abilities and recommending a proper placement
for her. See Ross I. The district court correctly observed
that Lindsey asserts only state-law claims against Dr.
Leventhal, using theories of medical malpractice, battery,
and violations of the Illinois Mental Health Code, 405
ILCS 5/2-107. After the district court decided that
Lindsey’s federal claims had to be dismissed on claim
preclusion grounds, it exercised its discretion to dismiss
without prejudice the state-law claims against Dr.
Leventhal. Those claims depended upon the court’s
supplemental jurisdiction, see 28 U.S.C. § 1367, and the
statute permits a court to dismiss such claims if “the
district court has dismissed all claims over which it has
original jurisdiction.” Id. § 1367(c)(3). We review the
court’s decision to relinquish jurisdiction under an abuse
of discretion standard. See Williams Electronics Games,
Inc. v. Garrity, 479 F.3d 904, 906 (7th Cir. 2007). Lindsey
offers no reason why we should find such an abuse here,
especially given the fact that her federal claims were
dismissed at such an early stage on a purely legal ground.
                         * * *
No. 06-2060                                               11

  While we understand that Lindsey’s parents feel strongly
that District 211 and its officials did not handle her
education properly, and indeed that they engaged in
prohibited discrimination against her based on her dis-
ability, this does not entitle them to multiple opportunities
to present these claims in court. Our opinion in Ross I
concludes that the District did not run afoul of any law
presented in that action. The present case, apart from the
part Dr. Leventhal plays in it, is functionally the same
as the earlier round of litigation. For that reason, the
district court properly dismissed it under the doctrine of
claim preclusion. As for Dr. Leventhal, nothing that
occurred in the district court or this court prevents her
parents from pursuing whatever state remedies may be
available to them against him at this point.
  The judgment of the district court is AFFIRMED.

A true Copy:
      Teste:

                        ________________________________
                        Clerk of the United States Court of
                          Appeals for the Seventh Circuit

                   USCA-02-C-0072—5-11-07