Tango Music v. Deadquick Music ( 2003 )

In the
United States Court of Appeals
For the Seventh Circuit
____________
No. 02-4396
TANGO MUSIC, LLC,
Plaintiff/Appellant,
v.
DEADQUICK MUSIC, INC., et al.,
Defendants/Appellees.
____________
Appeal from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 99 C 7331—John F. Grady, Judge.
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ARGUED SEPTEMBER 30, 2003—DECIDED OCTOBER 23, 2003
____________
Before BAUER, POSNER, and DIANE P. WOOD, Circuit
Judges.
POSNER, Circuit Judge. The plaintiff, Tango, appeals from
the dismissal of its suit against DeadQuick and two indi-
viduals for failure to prosecute the suit. It is a diversity
suit—and thereon hangs a tale. Tango is a limited liability
company, and for diversity purposes the citizenship of
such an entity is that of its members. Cosgrove v. Bartolotta,
150 F.3d 729, 731 (7th Cir. 1998). One of its members is
a citizen of New Jersey, another a citizen of the United
Kingdom. The principal defendant, DeadQuick, is a citizen
of Delaware and New York, but one of the individual
2 No. 02-4396
defendants is a citizen of the United Kingdom and the
other a citizen of either the United Kingdom or Virginia. So
while the U.S. parties are diverse, there are U.K. citizens on
both sides of the case, and we must decide whether that
destroys diversity jurisdiction.
We have held in previous cases that the presence of
foreigners on both sides of a diversity case does not de-
stroy diversity. Allendale Mutual Ins. Co. v. Bull Data Sys-
tems, Inc., 10 F.3d 425, 428 (7th Cir. 1993); Dresser Industries,
Inc. v. Underwriters at Lloyd’s of London, 106 F.3d 494 (3d
Cir. 1997); Transure, Inc. v. Marsh & McLennan, Inc., 766
F.2d 1297, 1299 (9th Cir. 1985). But neither our court nor
any other appellate court has decided whether it makes
a difference if there are foreigners from the same country
on both sides, though intimations that it does not can
be found in Dresser, 106 F.3d at 500, and in Karazanos v.
Madison Two Associates, 147 F.3d 624, 627 (7th Cir. 1998).
All but one of the district court cases to address the ques-
tion hold that it makes no difference. Zenith Electronics
Corp. v. Kimball Int’l Mfg., Inc., 114 F. Supp. 2d 764, 768-74
(N.D. Ill. 2000); Bank of New York v. Bank of America, 861
F. Supp. 225, 228-29 (S.D.N.Y. 1994); Clark v. Yellow Freight
System, Inc., 715 F. Supp. 1377, 1378 (E.D. Mich. 1989); K&H
Business Consultants Ltd. v. Cheltonian, Ltd., 567 F. Supp. 420,
422-24 (D.N.J. 1983). (The outlier is De Wit v. KLM Royal
Dutch Airlines, N.V., 570 F. Supp. 613, 617 (S.D.N.Y 1983).)
We agree.
The Judicial Code confers federal jurisdiction over suits
between “citizens of different States and in which citizens
or subjects of a foreign state are additional parties.” 28
U.S.C. § 1332(a)(3). That describes this case exactly. The
statute does not say “. . . citizens or subjects of different
foreign states,” and we cannot think of a reason to depart
in this instance from a literal reading. The reason that
No. 02-4396 3
complete diversity of citizenship is required in a suit that
does not have any foreign parties is that the presence
on opposite sides of the case of citizens of the same
state tends to neutralize any bias that a local court may
have in favor of a local resident; the fear of such bias is
the most commonly expressed rationale for diversity ju-
risdiction, see Bank of United States v. Deveaux, 9 U.S.
(5 Cranch) 61, 87 (1809) (Marshall, C.J.); Firstar Bank, N.A.
v. Faul, 253 F.3d 982, 991 (7th Cir. 2001); Dragan v. Miller,
679 F.2d 712, 714 (7th Cir. 1982); Lee v. American Nat’l
Ins. Co., 260 F.3d 997, 1005 (9th Cir. 2001); 13B Charles Alan
Wright, Arthur R. Miller & Edward H. Cooper, Federal
Practice and Procedure § 3601, pp. 337-38 (2d ed. 1987),
though there is some question how important it really was
in the thinking of the framers of the Constitution. See id.
at 337-43; 15 James Wm. Moore, Moore’s Federal Practice
§ 102App.03[1], pp. 4, 6 (3d ed. 2003); Henry J. Friendly,
“The Historic Basis of Diversity Jurisdiction,” 41 Harv. L.
Rev. 483 (1928). The neutralization argument does not
extend to the case in which a citizen of one state is suing
a citizen of another and there are citizens of the same
foreign state on both sides. Suppose that a citizen of Illi-
nois sues a citizen of Indiana in an Illinois state court and
the defendant wants to remove the case to federal court
because he is afraid that an Illinois court will be biased
in favor of the Illinois plaintiff. It would hardly be a com-
fort to him if there happened to be a French coplaintiff and
a French codefendant, since their citizenship would not
weigh with an Illinois court. To put this differently, it
would make no difference to such a court whether both
foreign parties were French or one was French and the
other was Italian, in which event, as we know, diversity
would be unaffected.
A reinforcing consideration is the desirability of promot-
ing international harmony (a consideration emphasized by
4 No. 02-4396
Hamilton, in Federalist No. 80, in justification of the alienage
jurisdiction; see also Kevin R. Johnson, “Why Alienage
Jurisdiction? Historical Foundations and Modern Justifica-
tions for Federal Jurisdiction Over Disputes Involving
Noncitizens,” 21 Yale J. Int’l L. 1, 10-12 (1996)) by giving
foreigners access to the national court system, where they
are less likely to encounter provincial prejudices when
litigating against U.S. citizens—as they are in this case,
even though they are also litigating against their own
conationals.
So there is jurisdiction and we proceed to the merits.
Tango (actually a predecessor, but we’ll suppress that
irrelevant detail) had made a contract with DeadQuick
whereby the latter licensed Tango to distribute record-
ings of the rock and roll star David Bowie. It turned out
that DeadQuick did not own the right to distribute them
and in 1999 Tango brought this suit, charging fraud. Months
after filing the suit Tango hadn’t served any defendant
and the district judge ordered it to do so within 30 days.
It dawdled for five months before serving anyone and
though given an extension until March 2001 failed to
serve two of the defendants by then. They were dismissed
and the remaining defendants filed motions to dismiss
to which Tango failed to file a timely response, missing
repeated extensions and finally drawing a warning from
the judge in August that “any failure in the future to pur-
sue this action diligently will result in a dismissal for want
of prosecution.” Tango missed the next deadline set by
the judge—to respond to the defendants’ motion to dis-
miss Tango’s third amended complaint—in March 2002.
When telephone messages both from the defendants’
lawyer and from the court went unanswered by Tango’s
lawyer, the judge in September carried out his threat
and dismissed the case for want of prosecution.
No. 02-4396 5
Tango filed a motion for reconsideration in which its
lawyer claimed that he had suffered severe depression
that had prevented him from attending to his professional
responsibilities. The district court denied the motion,
and Tango, represented by a different lawyer, though
from the law firm that had acquired the original lawyer’s
firm, appeals that denial.
The motion to reconsider was filed within the ten-day
period for filing a motion under Fed. R. Civ. P. 59(e) to
alter or amend the judgment, but Tango has consistently
represented its motion to be a Rule 60(b) motion to vacate
the judgment. That is a mistake, of course, since Rule 59(e)
brings up the underlying judgment for review, here the
judgment dismissing the suit, whereas an appeal from
the denial of a Rule 60(b) motion merely brings up the or-
der denying the motion, Foman v. Davis, 371 U.S. 178, 181
(1962); Kunik v. Racine County, 106 F.3d 168, 173 (7th
Cir. 1997); Cintrón-Lorenzo v. Departamento de Asuntos del
Consumidor, 312 F.3d 522, 525 n. 3 (1st Cir. 2002), and
also since the grounds for relief under Rule 60(b) are more
limited than those for relief under Rule 59(e). Helm v.
Resolution Trust Corp., 43 F.3d 1163, 1166 (7th Cir.
1995); Ball v. City of Chicago, 2 F.3d 752, 760 (7th Cir. 1993);
Feathers v. Chevron U.S.A., Inc., 141 F.3d 264, 268 (6th Cir.
1998); Lavespere v. Niagara Machine & Tool Works, Inc., 910
F.2d 167, 173-74 (5th Cir. 1990); cf. Wharf v. Burlington
Northern R.R., 60 F.3d 631, 637 (9th Cir. 1995). No matter;
whatever the precise scope or standard of review, it is
clear that the judge acted properly in dismissing the suit
for failure to prosecute after clearly warning the plaintiff’s
counsel that a further neglect of deadlines would lead
to that result. Kruger v. Apfel, 214 F.3d 784, 787 (7th Cir.
2000) (per curiam); In re Bluestein & Co., 68 F.3d 1022, 1026
(7th Cir. 1995) (per curiam); Ball v. City of Chicago, supra,6 No. 02-4396
2 F.3d at 755; Jackson v. City of New York, 22 F.3d 71, 75-76
(2d Cir. 1994).
Tango’s principal argument is that the lawyer’s depres-
sion was a good excuse for his neglecting his responsi-
bilities. We may assume that it was. But that is not the
issue. The issue is whether Tango had a good excuse for
failing to prosecute its case. It did not. It is a business
firm, not a hapless individual, and it has to take respon-
sibility for the actions of its agents, including the law-
yers whom it hires. “If the lawyer’s neglect protected the
client from ill consequences, neglect would become all
too common. It would be a free good.” United States v. 8136
S. Dobson St., 125 F.3d 1076, 1084 (7th Cir. 1997); see
also Pioneer Investment Services Co. v. Brunswick Associates
Limited Partnership, 507 U.S. 380, 397 (1993); Link v. Wabash
R.R., 370 U.S. 626, 633-34 (1962); Modrowski v. Mote, 322 F.3d
965, 968 (7th Cir. 2003); Gripe v. City of Enid, 312 F.3d 1184,
1189 (10th Cir. 2002); Community Dental Services v. Tani,
282 F.3d 1164, 1168 (9th Cir. 2002). The Modrowski deci-
sion applied this principle in a case of a lawyer’s medical
incapacity, just as in this case.
If a party’s lawyer is guilty of professional malpractice
(and mental illness is not a defense to a tort suit, Restate-
ment (Second) of Torts § 283C (1979)—certainly not in a case
of professional malpractice, Jones v. Chicago HMO Ltd., 730
N.E.2d 1119, 1130 (Ill. 2003)), the party has a remedy
against him, but it should not be permitted to shift the
burden of its agent’s neglect to the district court and the
defendants. United States v. 7108 West Grand Ave., 15 F.3d
632, 633 (7th Cir. 1994); Gripe v. City of Enid, supra, 312 F.3d
at 1189. Or so at least the district judge could decide with-
out being thought to have abused his discretion, let alone
his discretion squared: a district court’s decision under
Rule 60(b) not to reinstate a case dismissed for want of
No. 02-4396 7
prosecution is “discretion piled on discretion,” Brandon
v. Chicago Board of Education, 143 F.3d 293, 295 (7th Cir.
1998); Dickerson v. Board of Education, 32 F.3d 1114, 1117 (7th
Cir. 1994); Tolliver v. Northrup Corp., 786 F.2d 316, 319 (7th
Cir. 1986), since, as these cases explain, the standard for
appellate review of the dismissal of a suit for failure to
prosecute is also abuse of discretion. See also Aura Lamp
& Lighting, Inc. v. International Trading Corp., 325 F.3d 903,
907 (7th Cir. 2003); Pomales v. Celulares Telefónica, Inc., 342
F.3d 44, 48 (1st Cir. 2003); Shepherd v. Wellman, 313 F.3d 963,
970 (6th Cir. 2002).
AFFIRMED.
A true Copy:
Teste:
_____________________________
Clerk of the United States Court of
Appeals for the Seventh Circuit
USCA-02-C-0072—10-23-03