Ortega v. Chicago Board of Education/Chicago Public Schools et al
Filing
210
MEMORANDUM Opinion and Order: For the foregoing reasons, Defendant's Motion for Final Judgment Under Rule 54(b) and Motion to Stay Judgment Under Rule 62, R. 207 , is denied. Further, an Amended Final Judgment along the lines discussed herein shall be entered in the case. Signed by the Honorable Thomas M. Durkin on 1/3/2018:Mailed notice(srn, )
UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
LINDA ORTEGA,
Plaintiff,
v.
CHICAGO BOARD OF EDUCATION,
Defendant.
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Case No. 11-CV-8477
Judge Thomas Durkin
MEMORANDUM OPINION AND ORDER
On November 21, 2017, the Court entered a memorandum opinion and order
regarding the equitable relief to which Plaintiff Linda Ortega is entitled. See R. 192
(Ortega v. Chi. Bd. of Educ., __ F. Supp. 3d __, 2017 WL 5593350 (N.D. Ill. Nov. 21,
2017)) (hereinafter “the Equitable Relief Order”). Currently before the Court is a
motion filed on December 20, 2017 by Defendant Chicago Board of Education (“the
Board”) for “Final Judgment Under Rule 54(b)” and “To Stay Judgment Under Rule
62.” R. 207. For the reasons that follow, the Board’s motion is denied, but the Final
Judgment entered by the Court on November 21, 2017, R. 194, will be amended to
reflect the Court’s ruling herein.
BACKGROUND
Included in the equitable relief the Court awarded Ortega was an award of
lost pension benefits in the amount of $216,716. In addition to making this award,
the Court stated that it would retain jurisdiction for three months beyond the May
1, 2021 anticipated vesting date for Ortega’s pension from her current employment
with the state government. Should future events lead to Ortega’s state pension not
vesting by that date, the Court stated that Ortega could then file a motion with the
Court seeking an additional lost pension benefit award to make up for the state
pension benefits she ultimately would not be receiving due to the fact that her state
pension failed to vest. Although the Court did not state the amount of that
additional pension benefits award in the Equitable Relief Order, its intention as to
that amount should be clear from the opinion. To the extent that it is not, then the
Court now clarifies that the additional amount to which Ortega would be entitled
should her state pension not vest is $299,184, representing the difference between
the amount of lost pension benefits to which Ortega’s actuarial witness testified
($515,900) and the amount the Court already awarded in its Equitable Relief Order
($216,716). See Equitable Relief Order, R. 192 at 85-88 (2017 WL 5593350, at *35).
The Board filed a notice of appeal from the Final Judgment Order on
December 13, 2017. See R. 199. On December 14, 2017, the Seventh Circuit entered
an order stating that “[a] preliminary review of the short record indicates that the
order and judgment appealed from may not be final and appealable within the
meaning of 28 U.S.C. § 1291.” Ortega v. Chi. Bd. of Educ., Appeal No. 17-3542, Doc.
2. After quoting from that portion of the Court’s Final Judgment in which the Court
stated that it was retaining jurisdiction until sixty days past Ortega’s anticipated
state pension vesting date, the Seventh Circuit observed that the Board’s appeal
“may be premature because the amount of damages has not been fully and finally
determined.” Id. The Seventh Circuit therefore ordered that the Board “file, on or
2
before December 29, 2017, a brief memorandum stating why this appeal should not
be dismissed for lack of jurisdiction,” while indicating that “[a] motion for voluntary
dismissal pursuant to Fed. R. App. P. 42(b) will satisfy this requirement.” Id. The
Board chose the latter option and filed a Motion to Voluntarily Dismiss Appeal. On
December 18, 2017, the Seventh Circuit granted that motion, id., Doc. 5-1, and
remanded the case to this Court, id., Doc. 5-2 and R. 205, 206.
The Board then filed the current motion. That motion seeks two forms of
relief. The first is an order amending the Final Judgment to include a finding for
purposes of Rule 54(b) of the Federal Rules of Civil Procedure that “there is no just
reason for delay.” R. 207 at 1-2. The second is an order pursuant to Rule 62(d) of the
Federal Rules of Civil Procedure staying the Final Judgment without requiring the
posting of bond.
DISCUSSION
A.
RULE 54(b) CERTIFICATION
The Seventh Circuit questioned the appealability of this Court’s Final
Judgment based on the Court’s retention of jurisdiction over the pension benefits
award. Although the Board does not specifically say in its motion, presumably the
Board is asking the Court to make a finding that there is no just reason to delay an
appeal on the damages claims addressed in the Equitable Relief Order other than
the lost pension benefit award on the theory that the lost pension benefit award
lacks the required finality to be appealed.
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Rule 54(b) applies to a judgment on multiple claims or involving multiple
parties, and provides that
[w]hen an action presents more than one claim for relief—
whether as a claim, counterclaim, crossclaim, or thirdparty claim—or when multiple parties are involved, the
court may direct entry of a final judgment as to one or
more, but fewer than all, claims or parties only if the
court expressly determines that there is no just reason for
delay. Otherwise, any order or other decision, however
designated, that adjudicates fewer than all the claims or
the rights and liabilities of fewer than all the parties does
not end the action as to any of the claims or parties and
may be revised at any time before the entry of a judgment
adjudicating all the claims and all the parties’ rights and
liabilities.
The Seventh Circuit has said that “trial judges do not have carte blanche to
certify partial dispositions for immediate appeal under Rule 54(b),” and “[t]he rule
itself makes clear that a district judge may enter an appealable judgment only if it
disposes of a ‘claim for relief’ that is ‘separate’ from the claims not disposed of.”
Jack Walters & Sons Corp. v. Morton Bldg., Inc., 737 F.2d 698, 701 (7th Cir. 1984).
Although the Supreme Court has not “attempt[ed] any definitive resolution of the
meaning of what constitutes a claim for relief within the meaning of the Rules,” it
has said that “a complaint asserting only one legal right, even if seeking multiple
remedies for the alleged violation of that right, states a single claim for relief.”
Liberty Mut. Ins. Co. v. Wetzel, 424 U.S. 737, 744 n.4 (1976) (emphasis added); see
also Local P-171, Amalgamated Meat Cutters & Butcher Workmen of N. Am. v.
Thompson Farms Co., 642 F.2d 1065, 1069 (7th Cir. 1981) (Rule 54(b) requires that
the district court action “encompass multiple parties or multiple claims for relief,
rather than a single claim resting on multiple theories or a single claim with
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alternative requests for relief”) (emphasis added). Thus, the Court does not have
authority under Rule 54(b) to certify for appeal its Final Judgment as to all but the
lost pension benefits award. As stated in Wright & Miller, 10 Fed. Prac. & Proc. Civ.
§ 2657, “when [a] plaintiff is suing to vindicate one legal right and alleges several
elements of damage or seeks multiple remedies, only one claim is presented and
subdivision (b) [of Rule 54] does not apply.” See, e.g., Reyher v. Champion Int’l
Corp., 975 F.2d 483, 487 (8th Cir. 1992) (multiple remedies in ADEA cases do not
transform a single claim of intentional age discrimination into multiple claims);
Ariz. State Carpenters Pension Tr. Fund v. Miller, 938 F.2d 1038, 1040 (9th Cir.
1991) (when liability rests on the same transaction or series of transactions, a count
for punitive damages, although of a different order than compensatory damages,
does not constitute a separate claim for Rule 54(b) purposes); Sussex Drug Prods. v.
Kanasco, Ltd., 920 F.2d 1150, 1154 (3d Cir. 1990) (“An order that eliminates two of
several elements of damages flowing from a single claim does not qualify for Rule
54(b) certification.”); Stearns v. NCR Corp., 195 F.R.D. 652, 654 (D. Minn. 2000)
(the court’s determination that the employer was liable to the employees for breach
of contract was not distinct from the employees’ claim for injunctive relief and
restitution, and thus the court could not enter final judgment on the issue of
liability before resolving the other issues).
The Board states that it has filed its motion for Rule 54(b) certification
because it “wishes to appeal the ‘Final Judgment’ without waiting several years for
finality with respect to pension benefits.” R. 207 at 2 (¶ 4). The Board, however, has
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assumed that the Court’s Final Judgment is not immediately appealable based
simply on the fact that the Seventh Circuit questioned whether it was and directed
the Board either to address the issue by filing a short brief explaining why an
immediate appeal from the Final Judgment was proper or to voluntarily dismiss the
appeal. The Board voluntarily dismissed the appeal rather than defend the
immediate appealability of the Court’s Final Judgment. Presumably, the Board is of
the opinion that it cannot present any arguments to the Seventh Circuit defending
the appealability of the Final Judgment without a Rule 54(b) certification. If that is
the Board’s position, then it is wrong. The Final Judgment is in fact an immediately
appealable order, notwithstanding the Court’s retention of jurisdiction until the
state pension fund vesting issue is resolved by future, as yet-unknowable events.
The reason the Final Judgment is an appealable order is set forth in Parks v.
Pavkovic, 753 F.2d 1397 (7th Cir. 1985), where the Seventh Circuit concluded that
an “order directing the state to reimburse (in an as yet undetermined amount) the
parents of the class members” was properly before that court, not because of a Rule
54(b) certification (id. at 1402 (the court’s conclusion regarding appealability “owes
nothing to Rule 54(b)”)), but instead because “nothing remains pending in the
district court except calculating the actual amount owed each class member.” Id.
The calculation, the court said, was “not the resolution of a separate claim but
merely the disbursement stage following what [the court] . . . determined to have
been the final judgment on damages.” Id. The Seventh Circuit explained its
reasoning more fully as follows:
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Normally an order that merely decides liability and leaves
the determination of damages to future proceedings does
not finally dispose of any claim; it is just a preliminary
ruling on the plaintiff’s damage claim. But if the
determination of damages will be mechanical and
uncontroversial, so that the issues the defendant wants to
appeal before that determination is made are very
unlikely to be mooted or altered by it—in legal jargon, if
only a “ministerial” task remains for the district court to
perform—then immediate appeal is allowed. For if the
further proceedings in the trial court are quite unlikely to
make the appeal moot or even affect the issues on appeal,
there is no reason to delay the appeal while they are
resolved; and the delay may be a source of cost.
Id. at 1401-02 (citations omitted). While noting that “[t]he line between the
ministerial and the substantial is a very dim one,” the Seventh Circuit held that the
order at issue in that case fell on the ministerial side because “all that remains to be
done in the district court is for the members of the class to submit receipts or other
evidence showing what they have paid or still owe the institutions; and the district
judge made clear that the defendant agencies would be jointly and severally liable
to the class members for whatever amounts are shown to be due.” Id. at 1402. The
court explained why this satisfied the ministerial test:
Although computing the money owed each class member
is not automatic, it is mechanical, is unlikely to engender
dispute or controversy, and will require no analytic or
judgmental determinations that might affect the
questions now before us or give rise to other appealable
questions . . . . But at the same time, the processing of the
individual class members’ claims will not be costless, so
that if this appeal is allowed and the state persuades us
that no damages should be awarded, an expensive
computation involving thousands of bills will be avoided.
If the district court’s order is upheld, still nothing will
have been lost by the appeal. For in the unlikely event
that any appealable issues arise in computing each class
member’s damage entitlement, they will not be factually
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similar to those raised by the present appeal, so there will
be no judicial diseconomy if they are considered in a
separate appeal.
Id.; see also McMunn v. Hertz Equip. Rental Corp., 791 F.2d 88, 90-91 (7th Cir.
1986) (holding that entry of judgment against third-party indemnitor was
immediately
appealable
under
ministerial
exception
notwithstanding
that
adjudication of the main claim that would determine the amount, if any, to be
indemnified, had not yet occurred).
The rationale for the exception applied in Parks is even greater in this case.
In Parks, computing the amount of each reimbursement owed to the parents was
“not automatic,” although it was “mechanical,” “unlikely to engender dispute or
controversy,” and would “require no analytic or judgmental determinations that
might affect the questions” on appeal. Parks, 753 F.2d at 1402. Here, computing the
additional amount of lost pension benefits to which Ortega would be entitled is
automatic. As the Court indicated earlier in this opinion and the amended Final
Judgment will reflect, should Ortega’s state pension not vest, the additional amount
Ortega can recover is $299,184. See McMunn, 791 F.2d at 90 (“The relevance of a
second appeal’s being unlikely is that the main reason for forbidding interlocutory
appeals is to prevent the same case from generating more than one appeal. An order
to indemnify fits the exception because the amount to be indemnified will be
determined automatically by the judgment on the main claim.”) (emphasis added).
In addition, the other factors discussed by the Parks court are satisfied here
as well. First, the retention of jurisdiction will not “affect the issues on appeal.”
Parks, 753 F.2d at 1402. Inasmuch as the Final Judgment ruled in favor of the
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Board on the question of whether the amount of Ortega’s lost pension benefits
should be offset by her state pension benefits, that question will only be before the
appellate court if Ortega were to file a cross-appeal. Thus, the issue of an off-set for
state pension benefits will either be decided in the present appeal (if Ortega files a
cross-appeal 1) or foreclosed for any future appeal (if she does not). Regardless of
whether Ortega files a cross-appeal on that issue, further proceedings in this Court
on the state pension issue after the appellate court’s ruling will not lead to further
appeals. At most, a ruling in favor of Ortega on the off-set issue would lead to entry
of judgment in favor of Ortega for the full amount of her lost pension benefits, and
the need for this Court to retain jurisdiction will be short-circuited. If Ortega does
not file an immediate cross-appeal, it is possible (though unlikely) that an
appealable issue might be raised once the contingency of pension vesting ripens. In
that event, the appealable issue “will not be factually similar to those raised by the
present appeal, so there will be no judicial diseconomy if they are considered in a
separate appeal.” Id.
Second, the Court’s retention of jurisdiction has no potential to moot the
Board’s appeal. See McMunn, 791 F.2d at 90 (“[T]he word ‘final’ is not self-defining;
its meaning depends on practical considerations such as that the federal courts of
appeals do not have time to decide appeals that may become moot because the order
sought to be appealed is conditional on an event that may never come to pass. A
The filing deadline for a cross-appeal from the Final Judgment was fourteen days
after December 13, 2017 (the date on which the Board filed its notice of appeal), or
December 27, 2017. See Fed. R. App. P. 4(a)(3). The record does not reflect that
Ortega filed a notice of appeal within that time.
1
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contingent judgment is not final till the contingency materializes.”). The
contingency at issue in the Court’s Final Judgment relates to additional, not yet
awarded, damages; it does not affect any ruling from which the Board seeks an
appeal.
Moreover, in McMunn, the Seventh Circuit rejected a mootness objection to
allowing an immediate appeal of the district court’s order granting a third-party
claim prior to a determination of liability on the indemnitee for which the thirdparty might be responsible under the district court’s order. It found instead that the
appeal was “saved” despite the mootness objection:
by the fact that the judgment granting the third-party
claim is only partially contingent on the success of the
main claim and will therefore not be moot even if the
main claim is dismissed. For the indemnity clause not
only requires Eichleay to make good any damages that
McMunn may collect from Hertz; it requires Eichleay to
pay Hertz the expenses of defending against McMunn’s
suit. Those expenses will be incurred—some of them have
been incurred already—whether or not McMunn wins his
suit. It is true that if he loses after Hertz has incurred
only modest expenses in defense, the amount that Hertz
can realize on the judgment on its third-party complaint
may be so small that Eichleay may not consider the
judgment worth appealing. In this sense an element of
contingency pervades the entire appeal even though the
judgment imposes an unconditional obligation on
Eichleay. . . . .
Nevertheless the unconditional element prevents us from
dismissing the appeal. . . . [A] judgment that is only
partially contingent should be held to be . . . appealable to
us as a matter of right . . . .
Id. at 91.
Like the judgment at issue in Munn, the Final Judgment here is at most only
partially contingent, for regardless of the outcome on the state pension vesting
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issue, the Board is liable under the Final Judgment for at least $216,716 in lost
pension benefits. In the Seventh Circuit own words, this “unconditional element
prevents” that court from dismissing the Board’s appeal. 2
A final issue that needs to be addressed concerns the dismissal “without
prejudice” aspect of the Court’s Final Judgment. Both in the Equitable Relief Order
and in the Final Judgment Order, the Court specified that the case was dismissed
without prejudice with retention of jurisdiction through August 1, 2021, and that if,
by that date, no motion had been filed by Ortega seeking additional lost pension
benefits, the dismissal without prejudice would be replaced with a dismissal with
prejudice.
In Lynch, Inc. v. Samatason Inc., 279 F.3d 487 (7th Cir. 2002), the district
court judge “ordered the litigation dismissed with prejudice but stated in the order
that he was retaining jurisdiction to enforce the settlement agreement.” Id. at 489.
The Board’s voluntary dismissal of its notice of appeal under the belief that the
appellate court lacked jurisdiction over the appeal raises the question of whether a
second notice of appeal would be untimely if the Board turns out to be incorrect over
the appellate court’s lack of jurisdiction over the first notice of appeal. Federal Rule
of Appellate Procedure 4(a)(1)(A) requires that the notice of appeal be filed within
30 days after entry of the judgment or order appealed from. The Final Judgment
was entered on November 21, 2017. So if that Judgment was indeed appealable, the
notice of appeal was due December 21, 2017. The Board filed within that deadline
but then voluntarily dismissed that timely filed notice of appeal. The Court’s entry
herewith of an amended Final Judgment pursuant to the terms set forth in this
opinion may or may not start the clock running again. To the extent that it does not,
however, Federal Rule of Appellate Procedure 4(a)(5) allows the district court to
extend the time to file a notice of appeal if the party so moves no later than 30 days
after the time prescribed in Rule 4(a)(1)(3) expires and that party shows excusable
neglect or good cause. If the Board must rely on Rule 4(a)(1)(3) to file a timely
second notice of appeal, then it would have to file a motion for extension of time on
or before January 20, 2018 and establish in that motion excusable neglect or good
cause within the meaning of that rule.
2
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The Seventh Circuit held that the district court’s “purported retention” of
jurisdiction “had no significance” unless jurisdiction “is retained (meaning that the
suit has not been dismissed with prejudice.” Id. (emphasis in original). Hence, the
Court’s dismissal without prejudice in the Final Judgment was necessary in order
for the Court to retain jurisdiction to award further damages if it became proper to
do so after the state pension vesting date.
But in Shapo v. Engle, 463 F.3d 641 (7th Cir. 2006), the Seventh Circuit
posed the question of “what a judge should do who wants to enter a final judgment
in order to preclude further litigation of the same claim between the same parties,
by operation of the doctrine of res judicata, but to retain jurisdiction over some
incidental matter that may take years to resolve.” Id. at 646. 3 The court stated that
“the district court should state that judgment is being entered in order to allow the
parties to enforce it and that the ‘without prejudice’ language shall not allow them
to reopen issues resolved by the judgment.” Id.
The Court will amend the Final Judgment to add the additional language
suggested by the Shapo opinion. In addition the Final Judgment will be amended to
specify the amount of additional damages to which Ortega will become entitled if
her state pension does not vest ($299,184).
B.
RULE 60(h)
Under Rule 62(d), the Board may obtain a stay of enforcement of the
judgment appealed from if it posts a bond:
The issue was raised in the context of a settlement agreement, and hence the
question of immediate appealabilty of such an order was not before the Court.
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(d) Stay with Bond on Appeal. If an appeal is taken, the
appellant may obtain a stay by supersedeas bond, except
in an action [not relevant here] . . . . The bond may be
given upon or after filing the notice of appeal or after
obtaining the order allowing the appeal. The stay takes
effect when the court approves the bond.
The Board seeks an order waiving the requirement of a bond in order to stay
enforcement of the Final Judgment pending appeal. The Board cites Rule 62(h) as
authority for waiving of the bond requirement. That rule provides that:
(h) Stay with Multiple Claims or Parties. A court may
stay the enforcement of a final judgment entered under
Rule 54(b) until it enters a later judgment or judgments,
and may prescribe terms necessary to secure the benefit
of the stayed judgment for the party in whose favor it was
entered.
Rule 62(h) by its terms applies to the stay of a judgment rendered appealable
by Rule 54(b). Because the Court has found that Rule 54(b) does not provide a basis
for appealing any portion of the Final Judgment, Rule 62(h) does not apply.
The Board has not cited any other authority on which a waiver of the bond
requirement of Rule 62(d) could be based. Nevertheless, “the law in this area is
clear.” Dillon v. City of Chicago, 866 F.2d 902, 905 (7th Cir. 1988). In the alternative
to obtaining an automatic stay of execution of judgment pending appeal by posting a
bond pursuant to Rule 62(d),
the appellant may move that the district court employ its
discretion to waive the bond requirement. When
determining whether to waive the posting of bond, the
district court may look to several criteria enumerated by
this court: (1) the complexity of the collection process;
(2) the amount of time required to obtain a judgment after
it is affirmed on appeal; (3) the degree of confidence that
the district court has in the availability of funds to pay
the judgment; (4) whether “the defendant’s ability to pay
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the judgment is so plain that the cost of a bond would be a
waste of money”; and (5) whether the defendant is in such
a precarious financial situation that the requirement to
post a bond would place other creditors of the defendant
in an insecure position.
Id. at 904-05 (citations omitted); see also N. Ind. Public Serv. v. Carbon Cnty. Coal,
799 F.2d 265 (7th Cir. 1986) (waiving the requirement of bond pending appeal
where the appellant was a solvent public utility, with net worth well in excess of the
judgment); Lightfoot v. Walker, 797 F.2d 505 (7th Cir. 1986) (establishing guidelines
for determination of when waiver of bond is appropriate, and denying waiver in that
case because “procedure for collecting a judgment against the State [of Illinois] is
not only cumbersome and time consuming, but uncertain in outcome, since the
judgment cannot be paid unless and until the State legislature votes to appropriate
the money necessary to pay it”); Olympia Equip. v. W. Union Tele. Co., 786 F.2d 794
(7th Cir. 1986) (modifying and affirming the district court’s alternative security to
posting a supersedeas bond).
Although the Board has provided the Court with a sworn declaration stating
that the Board is able to pay the Final Judgment even if it increases to as much as
$2,000,000, see R. 207-3, ability to pay, standing alone, is not the only consideration
for the Court’s exercise of discretion to waive the bond requirement. As the Board
has not offered any argument or legal authority as to any of the other factors
discussed in the above cited case law, the Board’s request is denied.
CONCLUSION
For the foregoing reasons, Defendant’s Motion for Final Judgment Under
Rule 54(b) and Motion to Stay Judgment Under Rule 62, R. 207, is denied. Further,
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an Amended Final Judgment along the lines discussed herein shall be entered in
the case.
Thomas M. Durkin
United States District Judge
Dated: January 3, 2018
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