Stone et al v. Pepmeyer, et al
Filing
103
OPINION by U.S. Magistrate Judge Byron Cudmore: The Parties Agreed Rule 19 Motion to Name the State as a Necessary Party 96 is DENIED. See written order. (LB, ilcd)
E-FILED
Thursday, 28 April, 2011 04:09:01 PM
Clerk, U.S. District Court, ILCD
IN THE UNITED STATES DISTRICT COURT
FOR THE CENTRAL DISTRICT OF ILLINOIS, PEORIA DIVISION
DEAN STONE,
MICHAEL KRAYCINOVICH, and
TRACY JONES,
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Plaintiffs,
v.
JOHN T. PEPMEYER et al.,
Defendants.
No. 07-CV-1198
BEFORE U.S. MAGISTRATE JUDGE BYRON CUDMORE:
ORDER
The remaining parties in this case—Plaintiffs and Defendants John T.
Pepmeyer and Knox County—have filed an agreed motion to name the
State of Illinois as a necessary party pursuant to Federal Rule of Civil
Procedure 19. However, the State does not so agree, and Eleventh
Amendment immunity protects it from being compelled to do so.
Accordingly, the motion will be denied.
ANALYSIS
The parties assert that the State has refused to participate in
settlement discussions because it is not a party to this lawsuit, which “may
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impede the Plaintiffs’ ability to obtain complete relief and may leave John
Pepmeyer and Knox County at risk of incurring double and/or inconsistent
obligations due to the two other proceedings currently pending based on
the same set of facts.” (d/e 97, p. 1).1 They argue that the State is a
necessary party because under state law “it should indemnify any judgment
in this case and/or may be otherwise financially responsible.” Id. They
contend that settlement attempts have been unsuccessful in part because
of the State’s refusal to participate. (d/e 97, p. 3).
These difficulties, though, cannot get the parties around the State’s
Eleventh Amendment immunity. The State has already been dismissed as
a party in part because of that immunity. (d/e 26, Judge Mihm’s Order
adopting this Court’s Report and Recommendation, p. 10). And, Plaintiffs
have already conceded that the Eleventh Amendment bars their § 1983
claims against the State. (d/e 19, p.10).
The parties assert that Eleventh Amendment immunity does not bar
injunctive or prospective relief against the State, which is true as a general
statement of law, but they do not explain what injunctive or prospective
1
According to the parties, Plaintiffs are pursuing an action in state circuit court
against the State for violation of the State Ethics Act and are also pursuing a claim
against Pepmeyer and the State’s Attorney’s Office before the Illinois Human Rights
Commission.
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relief they seek against the State. Plaintiffs do not seek prospective relief
against the State. They want to bring the State’s purse to the table to pay
a settlement or judgment, which directly implicates the Eleventh
Amendment. 2 See Edelman v. Jordan, 415 U.S. 651, 663 (1974)(“a suit
by private parties seeking to impose a liability which must be paid from
public funds in the state treasury is barred by the Eleventh Amendment.”);
Porco v. Trustees of Indiana University, 453 F.3d 390, 395 (7th Cir. 2006)
(suit against state for monetary compensation barred by Eleventh
Amendment). The parties hypothesize that the State could be liable for
pension benefits, wages and/or attorney’s fees if reinstatement is ordered,
but that again would be a claim against the State to pay money, not a claim
for injunctive or other prospective relief.
That the State may have to indemnify Pepmeyer or otherwise pay
Plaintiffs under state law does not diminish its Eleventh Amendment
immunity. Stoner v. Wisconsin Dept. of Agriculture, Trade and Consumer
Protection, 50 F.3d 481, 483 (7th Cir. 1995)(“Case law in this Circuit has
rejected the notion . . . that a state which chooses to indemnify its
employees for damages threatens its Eleventh Amendment immunity from
2
As the Court noted in its prior Recommendation, Plaintiffs did “not dispute the
State’s assertion that their request for injunctive relief is conjectural.” (d/e 20, p.17).
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suit.”); Mann v. Vogel, 2010 WL 5395631 * 2 (C.D. Ill., Judge Mihm)(not
reported in F.Supp.2d)(dismissing indemnity claim against State as barred
by Eleventh Amendment).
The parties cite Carver v. Sheriff of LaSalle County, 324 F.3d 947,
948 (7th Cir. 2003), but the State is correct that Carver does not apply
because Carver involved a county’s obligation to pay, not a State’s
obligation. The Eleventh Amendment does not apply to counties.
Pennhurst State School & Hosp. v. Halderman, 465 U.S. 89, 124 n. 34
(1984)(“We have held that the Eleventh Amendment does not apply to
‘counties and similar municipal corporations.’”)(quoted cites omitted).
The other cases cited by the parties do not support their argument
either. Lapides v. Board of Regents of the University System of Georgia,
535 U.S. 613 (2002), held that a State’s voluntary removal of a case to
federal court amounted to a waiver of Eleventh Amendment sovereign
immunity. The State did not remove this case nor has it otherwise waived
its Eleventh Amendment immunity. Kiersch v. Ogena, 230 Ill.App.3d 57,
64 (1992), another case cited by the parties, stands for the proposition that
a state lawsuit against a state employee in an individual capacity does not
become a Court of Claims suit simply because of the indemnification
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statutes. Kiersch did not involve Eleventh Amendment immunity nor did it
involve claims for indemnity.
Ryan v. Consentino, 793 F.Supp. 822 (N.D. Ill. 1992), also cited by
the parties, involved a plaintiff suing on behalf of the State, to recover funds
fraudulently taken from the State. The plaintiff in Ryan sought to bring in
the State as a nominal party, but the State objected on Eleventh
Amendment grounds. The court held that Eleventh Amendment immunity
was not an issue because the plaintiff was standing in the shoes of the
State, pursuing the State’s rights. The court reasoned that Eleventh
Amendment immunity did not apply because adding the State as a nominal
party would not restrain State action or target State funds. 793 F.Supp. at
824. Here, in contrast, the parties do seek to direct State action and to
access State funds, so Eleventh Amendment immunity does apply.
Thus, the Eleventh Amendment bars the State’s joinder. This is so
even if the State is a necessary party under Rule 19, which it is not.3 The
State is correct that “[t]he Parties attempt to equate the indemnification
provided by the State with liability in this matter. These are two separate
3
If the State were a necessary party, there would be only two options since the
State cannot be joined: 1) carry on without the State; or, 2) dismiss the action entirely.
Fed. R. Civ. P. 19(b)("When Joinder Not Feasible."). The parties do not seek dismissal
of the entire action.
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inquires.” (d/e 102, p. 9). The parties can pursue and defend the claims in
this action without any determination of the State’s indemnity and payment
obligations under state law. If Defendants lose or settle, and if the State
refuses to pay, Defendants can bring a state action to enforce the State’s
payment obligations. See, e.g., Braziel v. State, 35 Ill. Ct. Cl. 385
(1981)(plaintiff, as assignee of defendants’ indemnity rights, successfully
pursued claim against State to pay settlement).
An entity’s potential duty to indemnify does not make it a necessary
party. The Seventh Circuit recognized this in Askew v. Sheriff of Cook
County, 568 F.3d 632, 636-37 (7th Cir. 2009), when it rejected the argument
that a county is a necessary party in an individual capacity suit based on a
sheriff’s statutory duty to indemnify his officers:
Defendants argue that because, under state law, the County
will necessarily be the entity funding any judgment entered
against Lopez, this case is directly analogous to the Carver
cases and thus the County's joinder would be required even if
the case were solely against Lopez. This argument has some
superficial appeal: if this were a suit imposing liability on the
Sheriff for Lopez's actions, then there would be no escape from
Carver II. But it is not. . . . Any judgment entered would be
against Lopez alone, without regard to any collateral sources to
which Lopez might turn to fund that judgment.
A closer look at the Sheriff's argument reveals that it is
premature. If Askew wins against Lopez, and then if Lopez later
tries to collect from the Sheriff in supplemental proceedings, it
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would then be necessary to join the County as a party to those
later proceedings. But that day may never come. For the
present, the County does not become an “indispensable” party
just because it may need to indemnify the Sheriff in the future,
any more than an insurance company must be included as a
defendant in a suit against its insured. We conclude, therefore,
that the County is not a party that must be joined if feasible,
within the meaning of Rule 19, in a case brought against Lopez
in his individual capacity.
568 F.3d at 637. The parties appear to contend that part or all of this is
dicta, but Askew clearly holds that a county need not be joined under Rule
19 in an individual capacity case, even if the county might eventually be
liable for the judgment. This is the same kind of argument the parties make
here.
The parties attempt to distinguish Askew on the grounds that the
plaintiff in Askew had waived his claim against the sheriff’s office, while
Plaintiffs in this case originally named the State as a defendant. The Court
does not see the relevance. The above paragraph quoted from Askew
stands for the proposition that an entity’s potential duty to indemnify an
individual does not make it a necessary party. That is the situation here.
The fact that Plaintiffs have tried repeatedly to bring the State in as a
defendant does not change that proposition. The parties also argue that
Askew is distinguishable because the State is required to indemnify State
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officers sued in an individual capacity. Yet the relevant part of Askew
quoted above also involved a state statute that required the Sheriff to
indemnify claims against his officers in an individual capacity; the Court
sees no distinction.4 568 F.3d at 637, citing 745 ILCS 10/9-102. In any
event, as discussed above, these arguments ignore the State’s Eleventh
Amendment immunity.
In sum, Eleventh Amendment immunity prohibits the joinder of the
State as a necessary party in this action, even if the State’s absence
makes settlement difficult, and even if the State may at some point be
liable to pay a judgment or settlement. Nor is the State a required or
necessary party under Rule 19. Accordingly, this case will continue to
proceed without the State.
IT IS THEREFORE ORDERED THAT the parties’ agreed motion to
add the State as a necessary party is denied (d/e 96).
ENTER:
April 28, 2011
_____s/ Byron G. Cudmore_________
BYRON G. CUDMORE
UNITED STATES MAGISTRATE JUDGE
4
5 ILCS 350/2(d) requires the State to indemnify unless “the court or jury finds
that the conduct or inaction . . . was intentional, wilful or wanton . . . and was not
intended to serve or benefit interests of the State . . . .” The Court states no opinion on
whether the State is required to indemnify Defendant Pepmeyer under this statute.
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