Court Opinion

ID: 4410489
Source: CourtListenerOpinion
Date Created: 2019-06-26 20:00:41.327035+00
Date Added: 2024-06-11T07:49:57.172218
License: Public Domain

In the

    United States Court of Appeals
                 For the Seventh Circuit
                     ____________________
No. 18‐3342
JOSEPH S. MCGREAL,
                                                                Plaintiff,
                                 v.

VILLAGE OF ORLAND PARK, et al.,
                                               Defendants‐Appellees,

APPEAL OF:
   JOHN P. DEROSE, Counsel for the Plaintiff,
                                                            Appellant.
                     ____________________

         Appeal from the United States District Court for the
           Northern District of Illinois, Eastern Division.
          No. 12 C 5135 — Joan Humphrey Lefkow, Judge.
                     ____________________

       ARGUED MAY 29, 2019 — DECIDED JUNE 26, 2019
                ____________________

   Before KANNE, SYKES, and BRENNAN, Circuit Judges.
    KANNE, Circuit Judge. The Village of Orland Park fired po‐
lice oﬃcer Joseph McGreal in 2010. McGreal sued, alleging
that the Village fired him in retaliation for remarks he made
2                                                  No. 18‐3342

at a community board meeting. The district court granted
summary judgment for the defendants, finding that McGreal
had advanced only speculation to support his claims. We af‐
firmed and also remarked on the dearth of evidence to sup‐
port McGreal’s allegations.
    After we aﬃrmed summary judgment, the district court
granted the defendants’ motion for attorney fees and directed
John P. DeRose—McGreal’s attorney—to pay $66,191.75 to
the defendants. DeRose now appeals that order. Because the
district court did not abuse its discretion, we aﬃrm.
                         I. BACKGROUND
    Our 2017 opinion provides a summary of McGreal’s suit.
See McGreal v. Vill. of Orland Park, 850 F.3d 308, 310 (7th Cir.
2017). Suﬃce to say, the Village of Orland Park fired McGreal
from the police force after he spoke at a November 2009 vil‐
lage board meeting. At the meeting, he suggested several so‐
lutions to a budgetary shortfall facing the Village. McGreal’s
recommendations would have protected junior oﬃcers from
layoﬀs by eliminating benefits enjoyed by more senior oﬃc‐
ers. McGreal believes that these suggestions motivated his
June 2010 termination. But the Village contends that it fired
McGreal because he repeatedly engaged in misconduct dur‐
ing late 2009 and early 2010.
   McGreal contested his termination through arbitration.
The arbitrator sustained 75 of the 76 disciplinary charges in
McGreal’s record and concluded that the Village fired
McGreal for just cause.
    In June of 2012, McGreal commenced a federal lawsuit, pro
se, against the Village and several members of the police de‐
partment. On October 19, 2012, attorney John DeRose
No. 18‐3342                                                  3

appeared as plaintiﬀ’s counsel. He promptly filed an
amended complaint on McGreal’s behalf. After the defend‐
ants filed a motion to dismiss, the court dismissed most claims
but permitted several (significantly narrowed) claims to pro‐
ceed.
    DeRose aggressively pursued discovery: he took twelve
depositions, made 294 document requests, and filed three mo‐
tions to compel. During discovery, defense counsel asked
DeRose on multiple occasions to end the litigation. On Febru‐
ary 3, 2014, defense counsel sent DeRose an email requesting
dismissal of several individual defendants because discovery
had revealed no evidence to support the claims against them.
Then in July 2014, defense counsel sent DeRose a letter ad‐
vancing similar arguments. Defense counsel threatened Rule
11 sanctions in both communications.
    After discovery, McGreal voluntarily dismissed six de‐
fendants but defended against summary judgment on the re‐
maining four defendants. The district court granted judgment
for defendants. The court began by noting that DeRose’s sum‐
mary judgment filings did not comply with Northern District
of Illinois Local Rule 56.1 (which provides guidelines for sub‐
mitting a statement of facts at summary judgment). “[T]he
motion could have been granted by simply rejecting plaintiﬀ’s
Local Rule 56.1 submissions,” but the court opted to resolve
the summary judgment motion on its merits. The court ex‐
plained that the defendants had oﬀered evidence to support
their theories of defense, and McGreal’s arguments and evi‐
dence to the contrary were speculative.
   On June 6, 2016, McGreal appealed. Several weeks later,
the defendants filed a motion for attorney fees. The defend‐
ants spent most of the motion arguing that the court should
4                                                     No. 18‐3342

award fees under the 42 U.S.C. § 1988 fee‐shifting provision.
They also argued that the court should sanction DeRose pur‐
suant to Federal Rule of Civil Procedure 11.
    On March 6, 2017, we aﬃrmed the judgment for the de‐
fendants. 850 F.3d 308. Like the district court, we found that
McGreal had “oﬀered no admissible evidence showing that
he [was] entitled to relief.” Id. at 310. Several months later, the
district court granted the defendants’ motion for fees. Instead
of relying on § 1988 fee‐shifting, the court concluded that “un‐
der Rule 11, McGreal’s counsel’s summary judgment filings
were not well grounded in fact or warranted by existing law
or a good faith argument for the extension, modification, or
reversal of existing law.” Ultimately, the court ordered
DeRose to pay $66,191.75 in fees (the amount defendants in‐
curred in preparing their Rule 11 letters, seeking summary
judgment, and requesting attorney fees). DeRose promptly
appealed.
                            II. ANALYSIS
    We review the imposition of Rule 11 sanctions for abuse of
discretion. N. Illinois Telecom, Inc. v. PNC Bank, N.A., 850 F.3d
880, 883 (7th Cir. 2017). “An abuse of discretion may be estab‐
lished if the district court based its decision on an erroneous
view of the law or a clearly erroneous evaluation of evidence.”
Id. Rule 11 requires attorneys to certify that every court filing
advances arguments warranted by existing law or a nonfriv‐
olous argument for extending the law. Fed. R. Civ. P. 11(b)(2).
Similarly, the factual contentions attorneys advance must
have evidentiary support or be likely to have evidentiary sup‐
port after a reasonable opportunity for further investigation.
Id. at 11(b)(3).
No. 18‐3342                                                      5

    In his brief on appeal, DeRose first argues that the defend‐
ants did not follow the Rule 11 procedures for seeking sanc‐
tions. Specifically, Rule 11(c)(2) specifies that a party may file
a “motion for sanctions,” “but it must not be filed or be pre‐
sented to the court if the challenged paper, claim, defense,
contention, or denial is withdrawn or appropriately corrected
within 21 days after service or within another time the court
sets.” In other words, Rule 11(c)(2) creates a safe‐harbor. The
moving party must serve the motion on the alleged violator
and permit twenty‐one days to remedy the violation.
    DeRose correctly notes that defense counsel never served
him with a motion before seeking sanctions. Rather, they sent
him letters and emails raising their concerns and threatening
sanctions. A letter is not a motion, and, under the law of eight
circuits, these informal communications would not satisfy the
Rule 11(c)(2) requirements. See Penn, LLC v. Prosper Bus. Dev.
Corp., 773 F.3d 764, 768 (6th Cir. 2014) (explaining that the Sec‐
ond, Third, Fourth, Fifth, Sixth, Eighth, Ninth, and Tenth Cir‐
cuits all require strict compliance). The Seventh Circuit, how‐
ever, interprets Rule 11(c)(2) diﬀerently.
    In Nisenbaum v. Milwaukee Cty., we held that the defend‐
ants “complied substantially” with Rule 11(c) when they sent
opposing counsel “a ‘letter’ or ‘demand’ rather than a ‘mo‐
tion.’” 333 F.3d 804, 808 (7th Cir. 2003). We are the sole circuit
to adopt this “substantial compliance” theory, and other cir‐
cuits have subsequently criticized our analysis as cursory and
atextual. See, e.g., In re Pratt, 524 F.3d 580, 588 (5th Cir. 2008)
(“[T]he Seventh Circuit provided little analysis and cited no
authority for its holding.”); Roth v. Green, 466 F.3d 1179, 1193
(10th Cir. 2006) (similar); see also Manrique v. United States, 137
S. Ct. 1266, 1272 (2017) (indicating that, if properly raised,
6                                                   No. 18‐3342

mandatory claim‐processing rules are “unalterable” (citation
omitted)); In re Wade, No. 18‐2564, 2019 WL 2482413, at *3 (7th
Cir. June 14, 2019) (applying Manrique to claim‐processing
rules in bankruptcy cases).
    DeRose’s argument that the defendants should have
served him with their Rule 11 motion—not just emails and
letters—is directly foreclosed by our holding in Nisenbaum.
And DeRose does not ask us to overrule Nisenbaum—he re‐
peatedly disavowed that argument at oral argument. Even if
DeRose did advance this argument, he’s waived it. He didn’t
argue before the district court that the defendants failed to
comply with Rule 11(c)(2) until his motion for reconsideration
of the order imposing sanctions. Laserage Tech. Corp. v. La‐
serage Labs., Inc., 972 F.2d 799, 804 (7th Cir. 1992) (explaining
that raising issues or arguments for the first time in a motion
for reconsideration do not preserve them for appeal) (citing
Bally Export Corp. v. Balicar, Ltd., 804 F.2d 398, 404 (7th Cir.
1986))). Accordingly, we leave any reconsideration of Nisen‐
baum for another day. See also N. Ill. Telecom, Inc., 850 F.3d at
887–88.
    DeRose also argues that the district court abused its dis‐
cretion because he agreed to represent McGreal in good faith
and after careful consideration. That argument is inadequate
for two reasons. First, the district court sanctioned DeRose for
his decision to defend against summary judgment. The court
didn’t question DeRose’s decision to represent McGreal or
seek discovery. The sanctionable behavior was DeRose’s de‐
cision to continue litigating after discovery revealed no evi‐
dence to support McGreal’s claims.
   Second, “Rule 11 requires counsel to study the law before
representing its contents to a federal court. An empty head
No. 18‐3342                                                              7

but a pure heart is no defense.” Thornton v. Wahl, 787 F.2d
1151, 1154 (7th Cir. 1986). The test is objective. An attorney
cannot avoid sanctions by claiming subjective good faith if a
reasonable inquiry into the facts and law would have revealed
the frivolity of the position. Cuna Mut. Ins. Soc. v. Oﬃce &
Prof’l Emp. Intʹl Union, Local 39, 443 F.3d 556, 560 (7th Cir.
2006); Harlyn Sales Corp. Profit Sharing Plan v. Kemper Fin.
Servs., Inc., 9 F.3d 1263, 1270 (7th Cir. 1993).
     In other words, DeRose’s duty to conduct a reasonable in‐
vestigation into the law and facts supporting McGreal’s
claims did not end after he chose to represent McGreal. That
duty renews at each stage of the litigation, including sum‐
mary judgment. In fact, the duty compounds. An attorney
might reasonably believe that discovery will reveal eviden‐
tiary support. After discovery, an attorney may proceed only
if that hypothetical evidence has materialized.
   And the district court did not abuse its discretion when it
found that DeRose violated Rule 11 by opposing summary
judgment. The district court found that McGreal lacked evi‐
dence to support at least one element of each claim. And we
agreed, finding that McGreal hadn’t produced any admissible
evidence on the claims he appealed. 850 F.3d at 310.
    DeRose didn’t just disregard the complete lack of evi‐
dence. The district court found that DeRose’s “responses to
defendants’ statements of material facts were laden with dis‐
ingenuous and misleading statements.” And, as already men‐
tioned, DeRose’s statement of facts did not comply with the
Local Rule 56.1 standards.1 Viewed in totality, DeRose’s

1 That failure is particularly difficult to understand because the district
court, in its standing order, directs counsel to read Malec v. Sanford, 191
8                                                           No. 18‐3342

summary judgment submissions fell short of the Rule 11 re‐
quirements. The district court did not abuse its discretion by
imposing sanctions.
                             III. CONCLUSION
   Attorneys must satisfy Rule 11’s requirements during the
entire pendency of the litigation. Discovery revealed an utter
lack of evidentiary support for McGreal’s claims, but DeRose
defended against summary judgment anyway. Accordingly,
we AFFIRM the district court’s sanctions against DeRose.

F.R.D. 581 (N.D. Ill. 2000), before submitting statements of fact under Lo‐
cal Rule 56.1. And the court in Malec admonished DeRose himself for fail‐
ure to comply with the same local rule. Id. at 582–87.