Sonii, Abraham v. v. Gen'l Electric Co ( 2004 )

In the
United States Court of Appeals
For the Seventh Circuit
____________
No. 03-2818
ABRAHAM V. SONII and RUFUS JONES,
Plaintiffs-Appellants,
v.
GENERAL ELECTRIC COMPANY,
Defendant-Appellee.
____________
Appeal from the United States District Court for
the Northern District of Illinois, Eastern Division.
No. 95 C 5370—Joan B. Gottschall, Judge.
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ARGUED JANUARY 23, 2004—DECIDED FEBRUARY 13, 2004
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Before EASTERBROOK, DIANE P. WOOD, and WILLIAMS,
Circuit Judges.
EASTERBROOK, Circuit Judge. This employment-dis-
crimination case was settled in October 2000, at a time
when it was widely believed that settlement made the
plaintiff a “prevailing party” entitled to attorneys’ fees.
Seven months later, Buckhannon Board & Care Home,
Inc. v. West Virginia Department of Health & Human
Resources, 532 U.S. 598 (2001), disapproved the view that
a plaintiff “prevails” by being a catalyst for change, and
a footnote adds that achieving a settlement likewise falls
short of prevailing unless the settlement yields a consent
2 No. 03-2818
decree or some equivalent form of judicial imprimatur.
532 U.S. at 604 n.7. We held in T.D. v. LaGrange School
District, 349 F.3d 469, 478-79 (7th Cir. 2003), that a dispo-
sition similar to a consent decree—e.g., mandatory lan-
guage entered as a judgment, or the judge’s signature in
lieu of the litigants’—may suffice to confer prevailing-party
status, but that a private settlement followed by dismissal
of the lawsuit does not. The district judge held that the
settlement in today’s suit is on the private-contract side of
this line and denied the plaintiffs’ request for legal fees.
2003 U.S. Dist. LEXIS 9701 (N.D. Ill. June 10, 2003).
Plaintiffs immediately appealed, but there are two juris-
dictional obstacles. The first is that the district court has
yet to enter a final judgment. The settlement contemplated
that the complaint would be dismissed with prejudice,
but that step has not been accomplished. Although post-
judgment decisions on requests for attorneys’ fees are
appealable independently of the merits, see Budinich v.
Becton Dickinson & Co., 486 U.S. 196 (1988), appellate
review of pre-judgment decisions about fees is deferred until
the litigation is over. See, e.g., Cunningham v. Hamilton
County, 527 U.S. 198 (1999).
Sometimes a court will proceed as if a promised dispo-
sition had been entered, see Bankers Trust Co. v. Mallis,
435 U.S. 381 (1978); Otis v. Chicago, 29 F.3d 1159 (7th
Cir. 1994) (en banc), but this is not an appropriate occasion
for that treatment, because we cannot be sure what the
dismissal order would have provided, yet its details could
affect the question whether plaintiffs are prevailing parties.
The parties agreed that the suit eventually would be
dismissed with prejudice. The parties’ stipulation says that
this would be done only after all questions about attorneys’
fees had been resolved, and perhaps this implies that
appeal must precede the final disposition, but litigants
cannot manipulate appellate jurisdiction in this fashion.
No. 03-2818 3
Dismissal must come first, and it is the district judge’s
responsibility to enter an appropriate order.
The district judge could have implemented the parties’
agreement in at least three ways: (1) a one-line order of
dismissal; (2) a dismissal reserving jurisdiction to enforce
the underlying contract; (3) a dismissal incorporating the
settlement contract as a judgment of the court. These would
have different consequences under Buckhannon and T.D.:
the first would not make the plaintiffs prevailing parties;
the third would do so; and the second would be ambiguous,
for neither Buckhannon nor T.D. definitively resolves the
consequences of an order that suffices to preserve federal
jurisdiction to enforce the pact, see Kokkonen v. Guardian
Life Insurance Co. of America, 511 U.S. 375 (1994), but still
treats it as a private contract rather than a judgment.
Which option the district court chooses could depend in part
on whether the judge deems it appropriate to enter a form
of judgment that vindicates pre-Buckhannon expecta-
tions—if the parties had any, a question itself best an-
swered by the district judge rather than an appellate court.
That the judge denied plaintiffs’ request for fees suggests
that she had in mind option (1) rather than option (3), but
a mental assumption falls short of a final decision. Plain-
tiffs have briefed the appeal on the assumption that the
judge’s inaction equates to option (2), but all this shows is
that loose ends need to be tied up before anything happens
in this court.
The second obstacle to appellate jurisdiction is that ad-
ditional disputes about attorneys’ fees remain pending in
the district court. Plaintiffs sought fees on two theories:
that they were prevailing parties and hence entitled to
reimbursement of all legal expenses, and that General
Electric engaged in discovery abuse so that plaintiffs are
entitled to recompense under Fed. R. Civ. P. 37, see Rickels
v. South Bend, 33 F.3d 785 (7th Cir. 1994), for the incre-
mental legal expenses. The district judge rejected the first
4 No. 03-2818
contention but agreed with the second and directed the
plaintiffs to file a statement of the attorneys’ fees incurred
as a result of General Electric’s misconduct. Instead of
doing this, plaintiffs filed a notice of appeal. This means
that the fees owing under Rule 37 have not been quantified,
and while questions about attorneys’ fees remain pending
an appeal is premature in this case. See In re Modern
Textile, Inc., 900 F.2d 1184 (8th Cir. 1990). Cf. Liberty
Mutual Insurance Co. v. Wetzel, 424 U.S. 737 (1976) (no
appeal is possible when a district court has determined
liability but has yet to award damages).
At oral argument plaintiffs’ counsel stressed that the dis-
trict judge had finally rejected one theory of fees, but this
does not make the decision final. Fees for legal work done
in discovery are a subset of plaintiffs’ claim for all legal
fees, and an appeal must wait until the amount due has
been toted up. A plaintiff who seeks to recover 10X, and
is told that the award will be only X (which remains to
be computed), cannot appeal immediately on the theory that
the district judge has “finally” rejected the claim to 9X.
Entertaining that appeal now would create a risk of
sequential appeals: first we would decide the prevailing-
party question, then the district judge would make the Rule
37 award, and then both sides might appeal again, contest-
ing either the award (for General Electric may believe that
it is in the right) or the amount (plaintiffs may want more,
and General Electric may believe that the award is exces-
sive). It is to prevent cumulative appeals of this kind that
the final-decision rule requires the litigants to wait until
the entire dispute has been resolved.
The appeal is dismissed for want of jurisdiction. The
district judge should proceed with dispatch to (1) enter a
final judgment dismissing the suit with prejudice in con-
formity with the settlement; (2) determine whether that
judgment makes plaintiffs prevailing parties under the
standards of Buckhannon and T.D.; and (3) make a defini-
No. 03-2818 5
tive award of legal fees allowed by Rule 37. Once all three
steps have been completed, any adversely affected party
will be entitled to appeal. Any further appeals by these
litigants on the subject of attorneys’ fees will be submitted
to this panel under Operating Procedure 6(b).
A true Copy:
Teste:
________________________________
Clerk of the United States Court of
Appeals for the Seventh Circuit
USCA-02-C-0072—2-13-04