Union Pacific Railroad Company v. Illinois Mine Subsidence Insurance Fund
Filing
63
ORDER and OPINION entered by Judge Sue E Myerscough on 6/4/2024. For the reasons stated, Plaintiff's Motion for Entry of Judgment (d/e 54 ) is DENIED. See full written Order. (VH)
IN THE UNITED STATES DISTRICT COURT
FOR THE CENTRAL DISTRICT OF ILLINOIS
SPRINGFIELD DIVISION
UNION PACIFIC RAILROAD COMPANY, )
)
Plaintiff,
)
)
v.
)
)
ILLINOIS MINE SUBSIDENCE
)
INSURANCE FUND,
)
)
Defendants.
)
No. 20-cv-3281
OPINION AND ORDER
SUE E. MYERSCOUGH, United State District Judge
Before the Court is Plaintiff Union Pacific Railroad Company’s
(“Union Pacific”) Motion for Entry of Judgment (d/e 54). Plaintiff’s
Motion (d/e 54) is DENIED.
I.
BACKGROUND
On August 25, 2022, Plaintiff Union Pacific filed its Second
Amended Complaint. See d/e 42. In Count I, Union Pacific seeks
declarations: (1) that claims Defendant Illinois Mine Subsidence
Insurance Fund (“Insurance Fund”) acquired before the entry of
judgment are barred by collateral estoppel (issue preclusion) and
res judicata (claim preclusion), consistent with the Court’s March
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31, 2022 opinion; (2) determining when a claim is “acquired”; and
(3) “that [Insurance Fund] is the real party in interest” and “that
[Insurance Fund] is in privity” once reimbursements are made.
Second Amended Complaint, d/e 42, ¶¶ 30, 31, 33. Count II seeks
a declaration regarding claims acquired by Insurance Fund after
entry of judgment by providing factual grounds showing that
nonparty preclusion is appropriate in this case. Id. at ¶¶ 38–49.
Count III clarifies Union Pacific’s request for an injunction in aid of
any declaration made in Count I and II as well as the injunction the
Court held Union Pacific was entitled to seek in its March 31, 2022
Opinion. Id. at ¶¶ 50–54.
On March 26, 2024, the Court granted in part and denied in
part Insurance Fund’s Motion to Dismiss (d/e 44). See d/e 47. In
the Court’s Opinion and Order, the Court dismissed Count II of
Union Pacific’s Second Amended Complaint in its entirety for failure
to state a claim upon which relief could be granted. Id. at pp. 21–
25. The Court also dismissed Count III in part, as it related to the
fully dismissed Count II of the Second Amended Complaint. Id. at
pp. 25–27. Count III remains to the extent it relates to Count I. Id.
On April 11, 2024, Union Pacific appealed the Court’s March 26,
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2024 Opinion, to the extent it denied Union Pacific’s request for an
injunction barring the Insurance Fund from bringing claims
acquired by the Insurance Fund after the entry of judgments in
prior matters litigated between the parties. See d/e 51.
On April 22, 2024, Union Pacific filed its Motion for Entry of
Judgment. See d/e 54. On May 6, 2024, Insurance Fund filed its
Response. See d/e 58. On May 16, 2024, Union Pacific filed a
Motion for Leave to File Reply. See d/e 61. On May 20, 2024,
United States Magistrate Judge Karen McNaught granted the
motion for leave to file a reply, and the Clerk docketed Union
Pacific’s Reply. See d/e 62.
Union Pacific asks the Court to direct entry of final judgment
on Union Pacific’s dismissed claims in the Court’s March 26, 2024
Opinion pursuant to Federal Rule of Civil Procedure 54(b). Union
Pacific also moves, pursuant to 28 U.S.C. § 1292(b), for certification
of two issues decided by the March 26, 2024 Opinion: (1) whether
the non-party preclusion rule of Taylor v. Sturgell, 533 U.S. 880
(2008), bars Insurance Fund from relitigating claims in cases that
arise after the decision and (2) whether issue preclusion bars such
relitigation on the basis that Perry v. Globe Auto Recycling, Inc.,
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227 F.3d 950 (7th Cir. 2000) applies only to claim and not issue
preclusion. See d/e 54.
II.
LEGAL STANDARD
A. Federal Rule of Civil Procedure 54(b)
“The general rule is that ‘appellate review must await final
judgment.’” Groves v. United States, 941 F.3d 315, 319 (7th Cir.
2019) (quoting Nutraceutical Corp. v. Lambert, 586 U.S. 188, 196
(2019)). Federal Rule of Civil Procedure 54(b) allows a district court
“dealing with multiple claims or multiple parties to direct the entry
of final judgment as to fewer than all of the claims or parties; to do
so, the court must make an express determination that there is no
just reason for delay.” Curtiss-Wright Corp. v. Gen. Elec. Co., 446
U.S. 1, 3 (1980). “Rule 54(b) permits entry of a partial final
judgment only when all of one party’s claims or rights have been
fully adjudicated, or when a distinct claim has been fully resolved
with respect to all parties.” R.D. Lottie v. W. Am. Ins. Co., 408 F.3d
935, 938 (7th Cir. 2005).
The Seventh Circuit has cautioned that “Rule 54(b) does not
give district judges carte blanche to make interlocutory orders final
and therefore appealable.” Estate of Drayton v. Nelson, 53 F.3d
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165, 167 (7th Cir. 1994). The Seventh Circuit has further
explained that “[t]he Rule 54(b) procedure, if misused, can generate
needless or duplicative appeals.” Bank of Lincolnwood v. Fed.
Leasing, Inc., 622 F.2d 944, 948 (7th Cir. 1980). District courts
have a great deal of discretion in determining whether it is
appropriate to certify an order for appeal, and there is no precise
test but “the standard against which a district court’s exercise of
discretion is to be judged is the interest of sound judicial
administration.” Id. at 949.
B. 28 U.S.C. § 1292(b)
If an order is not otherwise appealable under 28 U.S.C. § 1292
but the district court is “of the opinion that such order involves a
controlling question of law as to which there is substantial ground
for difference of opinion and that an immediate appeal from the
order may materially advance the ultimate termination of the
litigation,” the court “shall so state in writing in such order.” 28
U.S.C. § 1292(b). Doing so gives the Court of Appeals discretion to
permit an appeal from the order “if application is made to it within
ten days after the entry of the order.” Id. If a court does not
include a § 1292(b) certification in its original order, it may amend
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the order to include such a certification. See Fed. R. App. P. 5(a)(3).
The court should not certify an order for interlocutory appeal under
§ 1292(b) unless it involves “a question of law” that is “controlling”
and “contestable,” resolution of which would “promise to speed up
the litigation.” Ahrenholz v. Bd. of Trs. of Univ. of Ill., 219 F.3d
674, 675 (7th Cir. 2000).
III.
ANALYSIS
A. The Court Declines to Certify Union Pacific’s Dismissed
Claims Pursuant to Rule 54(b).
Rule 54(b) of the Federal Rules of Civil Procedure permits a
district court to “direct entry of a final judgment as to one or more,
but fewer than all, claims or parties” if the (1) action involves
“separate claims” and there is a “final judgment” as to one, and (2)
the district court determines that there is no just reason for delay.
Curtiss-Wright, 446 U.S. at 1; see also Cent. Laborers’ Pension
Fund v. AEH Constr., Inc., No. 14-3052, 2015 WL 5450350, at *2
(C.D. Ill. Sept. 15, 2015). The grant of Rule 54(b) certification is left
to the sound discretion of the district court. Curtiss-Wright, 446
U.S. at 10.
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This Court’s March 26, 2024 Opinion granted in part and
denied in part Insurance Fund’s Motion to Dismiss the Second
Amended Complaint. See d/e 47. The March 26, 2024 Opinion
denied the Motion to Dismiss as to Count I, finding that Union
Pacific had stated a claim for a declaration that mine subsidence
claims acquired by Insurance Fund before the Gillespie Cmty. Unit
Sch. Dist. No. 7 v. Union Pac. R.R., 2012 IL App (4th) 110142-U
and 2015 IL App (4th) 140877 (“Gillespie”), and Illinois Mine
Subsidence Ins. Fund v. Union Pac. R.R. Co., No. 16-CV-3199,
2019 WL 4015833 (C.D. Ill. August 29, 2019) (“2019 Opinion”), are
barred by issued preclusion and stated a claim for an injunction
(Count III) based on that declaration. Id. The March 26, 2024
Opinion further granted Insurance Fund’s motion to dismiss Union
Pacific’s claim for a declaration that Insurance Fund is barred from
bringing claims acquired after the Gillespie opinions and the 2019
Opinion and denied the request (under Count III) for an injunction
enforcing such a declaration.
Union Pacific appealed the Court’s March 26, 2024 Opinion to
the “extent it denied Union Pacific’s request for an injunction
barring the [Insurance] Fund from bringing claims acquired by the
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[Insurance] Fund after the entry of judgments in prior matters
litigated between the parties.” d/e 51. Specifically, Union Pacific’s
appeal seeks a ruling on whether: (1) non-party preclusion rule of
Taylor applies; and (2) Perry applies only to claim and not issue
preclusion. Union Pacific seeks entry of final judgment on its
dismissed claims.
1. Count I and Count II of the Second Amended Complaint
Constitute Separate Claims.
The Seventh Circuit has “insisted that Rule 54(b) be employed
only when the subjects of the partial judgment do not overlap with
those remaining in the district court.” R.D. Lottie, 408 F.3d at 938–
39. “Rule 54(b) allows appeal without delay of claims that are truly
separate and distinct from those that remain pending in the district
court, where ‘separate’ means having minimal factual overlap.” Id.
at 939. “The test for separate claims under the rule is whether the
claim that is contended to be separate so overlaps the claim or
claims that have been retained for trial that if the latter were to give
rise to a separate appeal at the end of the case the court would have
to go over the same ground that it had covered in the first appeal.”
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Id. The Court finds that the claims on appeal and the claims still
pending in the district court are separate for Rule 54(b) purposes.
All of Union Pacific’s claims against Insurance Fund arise from
the same general factual background. However, Count I and the
appealed Count II do not contain intertwined legal theories and,
instead, seek separate recoveries. Marseilles Hydro Power, LLC v.
Marseilles Land & Water Co., 518 F.3d 459, 464 (7th Cir. 2008)
(“Even if two claims arise from the same event or occurrence, they
may be separable for Rule 54(b) purposes if they rely on entirely
different legal entitlements yielding separate recoveries, rather than
different legal theories aimed at the same recovery.”).
In Count I, and the corresponding portions of Count III, of the
Second Amended Complaint, Union Pacific seeks a declaration and
injunction barring claims acquired by Insurance Fund before the
Gillespie opinions and the 2019 Opinion based on issue preclusion
and claim preclusion. In Count II, and the corresponding portions
of Count III, Union Pacific seeks a declaration and injunction
barring claims acquired after the 2019 Opinion based on nonparty claim preclusion and issue preclusion.
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Count I and Count II seek recoveries for different time periods.
Union Pacific’s appeal on the dismissed Count II involves only
claims acquired after 2019, while Count I, the claim remaining in
the district court, involves only claims acquired before 2019.
Moreover, the legal issues on appeal—non-party claim preclusion
and issue preclusion—do not overlap with the legal issues
remaining in District Court. This Court’s March 26, 2024 Opinion
found that Count I stated a plausible claim for relief on the grounds
of both claim and issue preclusion on mine subsidence claims
acquired by Insurance Fund before 2019. See d/e 47, pp. 14–21.
As a result, non-party and issue preclusion do not necessarily need
to be considered for claims acquired before 2019, and the claims
are separable for Rule 54(b) purposes.
2. The Court Finds That Just Reason for Delay Exists.
However, after considering “judicial administrative interests as
well as the equities involved,” the Court finds that just reason to
delay Union Pacific’s appeal exists. Curtiss-Wright Corp., 446 U.S.
at 8. “In determining whether there is no just reason for delay, the
district court may properly consider all of the consequences of a
final judgment or the lack thereof and balance the competing
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interests of the parties in the context of the particular case.” Bank
of Lincolnwood v. Fed. Leasing, Inc., 622 F.2d 944, 949 (7th Cir.
1980). A non-exclusive list of factors for the Court to consider was
given by the Seventh Circuit:
(1) The relationship between the adjudicated and
unadjudicated claims; (2) the possibility that the need for
review might or might not be mooted by future
developments in the district court; (3) the possibility that
the reviewing court might be obliged to consider the same
issue a second time; (4) the presence or absence of a claim
or counterclaim which could result in set-off against the
judgment sought to be made final; (5) miscellaneous
factors such as delay, economic and solvency
considerations, shortening the time of trial, frivolity of
competing claims, expense, and the like.
Id. at 949 (7th Cir. 1980).
Granting certification here would run counter to the
conservation of judicial resources. Certification here would split
this case into two separate cases. The Court of Appeals would be
required to examine the facts of this case for Union Pacific’s
interlocutory appeal, and a second time if the appeal is taken from
the ultimate determination of the entire case. This would place an
additional and unneeded burden on the limited resources of the
judiciary. The Court, in its discretion, therefore declines to certify
Union Pacific’s appeal pursuant to Rule 54(b).
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B. The Court Declines to Certify Issues for Appeal
Pursuant to 28 U.S.C. § 1292(b).
Union Pacific seeks certification pursuant to 28 U.S.C. §
1292(b) whether: (1) nonparty claim preclusion or (2) issue
preclusion apply to the instant case. For an order to be certified
under § 1292(b) for immediate appeal, five requirements must be
met: (1) there must be a question of law, (2) it must be controlling,
(3) it must be contestable, (4) the resolution must promise to speed
up the litigation, and (5) the petition must be filed in the district
court within a reasonable time after the order. Ahrenholz, 219 F.3d
at 675.
Union Pacific fails to satisfy the question of law requirement.
A question of law is a “question of the meaning of a statutory or
constitutional provision, regulation, or common law doctrine” and
should be “something the court of appeals could decide quickly and
cleanly without having to study the record.” Id. at 677. Here,
Union Pacific asks whether (1) the nonparty issue preclusion rule of
Taylor applies and (2) issue preclusion bars such relitigation on the
basis that Perry applies only to claim preclusion and not issue
preclusion. Both are issues that would require the Seventh Circuit
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to examine the record of the case, as well as the record of the
Gillespie opinions and the 2019 Opinion, to decide whether the
Court should have granted Insurance Fund’s Motion to Dismiss.
Because Union Pacific seeks to appeal the Court’s application of the
relevant facts to the law of issue and claim preclusion, Union
Pacific’s claim does not fit the standard under Section 1292(b). As
a result, the Court declines to certify its March 26, 2024 Opinion
pursuant to 28 U.S.C. § 1292(b).
IV.
CONCLUSION
For the reasons stated, Plaintiff’s Motion for Entry of
Judgment (d/e 54) is DENIED.
IT IS SO ORDERED.
ENTERED: June 4, 2024.
FOR THE COURT:
/s/ Sue E. Myerscough
SUE E. MYERSCOUGH
UNITED STATES DISTRICT JUDGE
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