Linda Reed v. Columbia St. Mary's Hospital , 782 F.3d 331 ( 2015 )

In the
United States Court of Appeals
For the Seventh Circuit
____________________
No. 14-2592
LINDA REED,
Plaintiff-Appellant,
v.
COLUMBIA ST. MARY’S HOSPITAL,
Defendant-Appellee.
____________________
Appeal from the United States District Court for the
Eastern District of Wisconsin.
No. 14-C-330 — Rudolph T. Randa, Judge.
____________________
SUBMITTED FEBRUARY 17, 2015 ∗ — DECIDED MARCH 30, 2015
____________________
Before BAUER, TINDER, and HAMILTON, Circuit Judges.
HAMILTON, Circuit Judge. Linda Reed sued Columbia
St. Mary’s Hospital alleging that the hospital discriminated
∗ The defendants were not served with process in the district court
and are not participating in this appeal. After examining the appellant’s
brief and the record, we have concluded that the case is appropriate for
summary disposition. See Fed. R. App. P. 34(a)(2).
2 No. 14–2592
against her on the basis of her disability during her stay
there. She alleges violation of Title III of the Americans with
Disabilities Act, 42 U.S.C. § 12182 (prohibiting disability dis-
crimination in public accommodations), and the Rehabilita-
tion Act, 29 U.S.C. § 794 (prohibiting disability discrimina-
tion by entities that receive federal funding). In this, her sec-
ond federal suit based on these facts, the district court dis-
missed her claims for two reasons. First, it concluded that
her claims were precluded by the dismissal of her earlier
suit. Second, even if her claims were not precluded, the dis-
trict court concluded that neither the ADA nor the Rehabili-
tation Act could offer her any remedy. We disagree on both
grounds and therefore vacate the judgment of the district
court and remand.
Reed alleged in her first complaint that she has tardive
dyskinesia, a neurological disorder that causes involuntary
facial and limb movements and makes speaking difficult.
During an inpatient stay at the hospital in March 2012, Reed
alleged, its staff ignored her requests, treated her poorly, re-
fused to consult with her regarding her care, and physically
injured her when she was forcibly discharged. Judge
Stadtmueller, the judge assigned to that first case, ruled that
the complaint did not contain “a short and plain statement”
of the claim as required by Federal Rule of Civil Procedure
8(a)(2), dismissed it, and invited Reed to amend. She did so.
The amended complaint repeated these factual allegations
and alleged an unelaborated claim of “retaliation,” a viola-
tion of Title III of the ADA, and several state-law claims.
Upon review of the amended complaint under 28 U.S.C.
§ 1915(e)(2), Judge Stadtmueller dismissed the action “with-
out prejudice.” He considered whether any of her claims as-
No. 14-2592 3
serted a violation of federal law, including the Rehabilitation
Act and the retaliation provision of the ADA, 42 U.S.C.
§ 12203. But for each potential federal violation, the judge
believed that Reed failed to state a claim for relief.
The judge then wrote that because Reed did not state a
violation of federal law, the court lacked jurisdiction and had
to dismiss the case without prejudice:
Having dismissed all of Ms. Reed’s claims
that could conceivably arise under federal law,
the Court lacks jurisdiction to hear this matter
under 28 U.S.C. § 1331. Likewise, the Court
lacks diversity jurisdiction under 28 U.S.C.
§ 1332. Therefore, lacking a basis for jurisdic-
tion over the potentially-federal claims, the
Court may not exercise supplemental jurisdic-
tion over the remaining state law claims under
28 U.S.C. § 1367.
The Court, accordingly, lacks jurisdiction
over this case entirely, and must dismiss it. The
Court will do so without prejudice.
Reed v. Columbia St. Mary’s Hosp., No. 14-C-145-JPS, 2014 WL
805919, at *4 (E.D. Wis. Feb. 28, 2014). The conclusion of the
order repeated that “for the reasons discussed above, Ms.
Reed’s federal claims . . . are hereby DISMISSED without
prejudice” but added that the reason is “for failure to com-
ply with Rule 8(a)(2).” Finally, the court reiterated that
“those claims having been dismissed, the Court lacks juris-
diction over this matter and therefore, this matter be and the
same is hereby DISMISSED without prejudice.” Id. In a sepa-
rate judgment entered the same day, see Fed. R. Civ. P. 58(a),
4 No. 14–2592
the court again stated that the dismissal was “without preju-
dice.”
Reed apparently took the dismissal “without prejudice”
at face value. Less than a month later, she filed in the same
court a new case that expanded on the allegations deemed
insufficient in the first case. The new case was assigned to
Judge Randa.
According to the complaint in this second case, the alle-
gations of which we must accept as true, see Arnett v. Web-
ster, 658 F.3d 742, 751 (7th Cir. 2011), Reed suffers from tar-
dive dyskinesia plus post-traumatic stress disorder, bipolar
disorder, and acute anxiety. Because tardive dyskinesia
makes speaking difficult, Reed uses a computer to com-
municate. Reed went to the hospital in March 2012 hoping to
receive alternative treatment for her disorders instead of the
psychotropic medications she was taking. On one occasion,
when Reed asked that staff bring the computer to her, they
refused to do so because of her disabilities. When she re-
peated her request, she alleges, the staff retaliated against
her by grabbing her and throwing her into a “seclusion
room.” Later, staff summoned Reed to a meeting with a doc-
tor to discuss her discharge, where, still without her com-
puter, she was unable to communicate. When the hospital
discharged Reed, she asked to call her case manager, but
hospital staff refused Reed’s request, again because of her
disabilities. To retaliate further they allegedly had Reed es-
corted out of the hospital by security guards, who injured
her in the process.
The complaint asserts claims of discrimination and retal-
iation under the ADA and the Rehabilitation Act, and it
seeks compensatory and punitive damages, injunctive relief,
No. 14-2592 5
and a declaratory judgment under those two laws. Finally,
the complaint alleges various constitutional violations
against the hospital under 42 U.S.C. § 1983.
Judge Randa dismissed Reed’s second case at screening,
see 28 U.S.C. § 1915(e)(2), concluding that, because her first
case had been dismissed for lack of subject-matter jurisdic-
tion, she was precluded from relying on the same facts to in-
voke the court’s jurisdiction in the current case. Alternatively,
Judge Randa concluded that neither the ADA nor the Reha-
bilitation Act offered Reed the relief she sought. First, he
stated that neither statute provided compensatory damages
for claims of discrimination. Second, Judge Randa thought
that retaliation claims under the Rehabilitation Act were not
available because this case did not involve employment dis-
crimination, and this court had not ruled whether the ADA
offers a remedy for retaliation claims that are not based on
employment. Third, he added, because she did not allege an
ongoing violation, she did not sufficiently plead a claim for
injunctive relief under either act. Finally, the judge conclud-
ed that Reed’s § 1983 claims failed because nothing in the
complaint suggested that the hospital was acting under the
color of state law.
Within 28 days of the dismissal, Reed moved the court to
vacate the judgment and reinstate the case. She explained
that she had thought Judge Stadtmueller’s order permitted
her to file a new case and that her new complaint stated a
claim. Judge Randa denied her motion without explanation.
She then appealed the dismissal of her first suit, but later
voluntarily dismissed that appeal after recognizing that she
appealed that dismissal too late. She also filed this timely
appeal from the dismissal of her second suit. Reed repeats
6 No. 14–2592
her arguments that the dismissal of the first suit did not pre-
clude her second suit and that she adequately stated claims
for relief.
We agree with Reed that both of Judge Randa’s reasons
for dismissing her second case are incorrect. First, Judge
Stadtmueller’s dismissal of Reed’s first case, professedly for
lack of subject-matter jurisdiction, does not preclude litiga-
tion of that issue in her second case because Judge Stadt-
mueller did not actually decide that issue. It is generally true
that a dismissal said to be without prejudice for lack of sub-
ject-matter jurisdiction can, through the doctrine of issue
preclusion, bar the invocation of a federal court’s subject-
matter jurisdiction in a second lawsuit based on the same
facts. See Hill v. Potter, 352 F.3d 1142, 1146–47 (7th Cir. 2003);
Okoro v. Bohman, 164 F.3d 1059, 1063 (7th Cir. 1999). But the
issue of subject-matter litigation must have been “actually
litigated” and decided in the first case. See Matrix IV, Inc. v.
American Nat’l Bank & Trust Co., 649 F.3d 539, 547 (7th Cir.
2011). To determine whether an issue was truly litigated and
decided, it is sometimes necessary to look beyond the judg-
ment in an earlier action. See La Preferida, Inc. v. Cerveceria
Modelo, S.A. de C.V., 914 F.2d 900, 907 (7th Cir. 1990).
We can see from Judge Stadtmueller’s reasoning in the
first case that he actually decided only that Reed failed to
state a claim. He did not decide that her claims did not en-
gage the court’s federal question subject-matter jurisdiction.
True, he thought that as a consequence of Reed’s failure to
state a federal claim, the court lacked jurisdiction. That was
not correct. Failure to state a claim does not deprive a court
of subject-matter jurisdiction unless the claim is “wholly in-
substantial and frivolous,” which is a much more stringent
No. 14-2592 7
standard that is rarely satisfied. See McCoy v. Iberdrola Re-
newables, Inc., 760 F.3d 674, 681 (7th Cir. 2014); Bovee v. Broom,
732 F.3d 743, 744 (7th Cir. 2013); see generally Bell v. Hood,
327 U.S. 678, 685 (1946). Nothing in the substance of Judge
Stadtmueller’s order suggests that he deemed Reed’s poten-
tial federal claims to be so frivolous that they would fail even
to invoke the court’s federal question jurisdiction. He simply
mischaracterized as jurisdictional the dismissal of Reed’s al-
legations for failure to state a claim.
When a court mischaracterizes its decision in that way, as
happened in Gogos v. AMS Mech. Sys., Inc., 737 F.3d 1170,
1172 (7th Cir. 2013), we can ignore the mischaracterization.
Because the issue of subject-matter jurisdiction was not “ac-
tually litigated,” it was incorrect for Judge Randa to con-
clude that Reed was precluded from invoking the court’s
subject-matter jurisdiction in her second suit.
The problem here is that, in substance, Judge Stadt-
mueller decided that Reed’s complaint failed to state a claim.
That sort of ruling is typically on the merits, see Paganis v.
Blonstein, 3 F.3d 1067, 1071 (7th Cir. 1993), but the terms of
his dismissal would not lead even a lawyer trained in federal
jurisdiction to believe that if Reed did not file a timely ap-
peal, she could not replead in federal court. The judge em-
phasized that the dismissal of Reed’s “claims” for failure to
state a claim was without prejudice, which suggests that the
faults of the complaint could be remedied with a new plead-
ing. See Paul v. Marberry, 658 F.3d 702, 704–05 (7th Cir. 2011).
The judge also wrote in the order that the “federal claims”
were dismissed for failure to comply with Rule 8(a)(2), a
disposition that also can permit repleading. See id. at 705;
E.E.O.C. v. Concentra Health Servs., Inc., 496 F.3d 773, 782 (7th
8 No. 14–2592
Cir. 2007). And to top it off, the judge repeated in both the
conclusion of his order and the Rule 58 judgment that the
court was dismissing “the matter” without prejudice.
We have emphasized that litigants may and should rely
on the specific wording of a Rule 58 judgment to determine
whether a judgment is final and appealable. See Hoskins v.
Poelstra, 320 F.3d 761, 763–64 (7th Cir. 2003), citing Furnace v.
Bd. of Trustees of Southern Illinois University, 218 F.3d 666, 669
(7th Cir. 2000). Here, given the multiple signals in Judge
Stadtmueller’s order and judgment that Reed could replead,
we are hard-pressed to find any language that would lead a
party (especially one acting pro se) to believe that the judg-
ment in her first suit would prevent her from trying again
and that her only route to pursue her claims was to appeal
immediately. See Luevano v. Wal-Mart Stores, Inc., 722 F.3d
1014, 1021 (7th Cir. 2013) (noting injustice that would occur if
burden were placed on pro se plaintiff to understand that
district court’s order “was final and therefore appealable
even when the district court itself did not understand it as
such”).
Because Reed’s second suit was not precluded, we turn to
the merits of the allegations in the complaint. Here the result
is mixed. We agree with Judge Randa that Reed failed to
state a viable claim under 42 U.S.C. § 1983. The hospital is a
private entity, and nothing in the complaint suggests that it
was acting under the color of state law. Judge Randa proper-
ly dismissed Reed’s claims under § 1983. See London v. RBS
Citizens, N.A., 600 F.3d 742, 746 (7th Cir. 2010); Rodriguez v.
Plymouth Ambulance Serv., 577 F.3d 816, 822–23 (7th Cir.
2009).
No. 14-2592 9
We also conclude, however, that Reed has stated viable
claims under the ADA and Rehabilitation Act, and that it is
premature to decide the types of relief that may be available
to her (including injunctive relief) if she prevails on the mer-
its.
Compensatory damages are available under the Rehabili-
tation Act, Barnes v. Gorman, 536 U.S. 181, 189 (2002), but
may be available only for claims of intentional discrimina-
tion. See CTL ex rel. Trebatoski v. Ashland Sch. Dist., 743 F.3d
524, 528 & n.4 (7th Cir. 2014). Reed’s allegations that the hos-
pital, with knowledge of her disability, purposely denied her
access to the computer that helps her communicate, permit
an inference of intentional discrimination sufficient to sup-
port a claim for compensatory damages. That claim is legally
sufficient, at least at the pleading stage. Whether evidence
will support Reed’s claim is a question for later in the case.
Second, Reed may also seek compensatory damages un-
der the Rehabilitation Act for retaliation based on her allega-
tion that the hospital threw her into a “seclusion room”
when she asked for her computer. The Act does not limit re-
taliation claims to the employment context. Section
794a(a)(2), which provides remedies for violations of the Re-
habilitation Act outside of employment, expressly incorpo-
rates the “remedies, procedures, and rights” available under
Title VI of the Civil Rights Act of 1964, 42 U.S.C. §§ 2000d to
2000d–7. Those provisions include that law’s anti-retaliation
provision. See 34 C.F.R. § 100.7(e). Barker v. Riverside County
Office of Educ., 584 F.3d 821, 825 (9th Cir. 2009); Weber v.
Cranston School Comm., 212 F.3d 41, 47–48 (1st Cir. 2000).
Other circuits have also recognized that the Rehabilitation
Act provides for retaliation claims outside the employment
10 No. 14–2592
context. See, e.g., D.B. ex rel. Elizabeth B. v. Esposito, 675 F.3d
26, 41 (1st Cir. 2012); Mershon v. St. Louis Univ., 442 F.3d 1069,
1074 & n.3 (8th Cir. 2006); Hoyt v. St. Mary’s Rehab. Ctr., 711
F.2d 864, 867 (8th Cir. 1983).
In reaching the opposite conclusion about claims for re-
taliation under the Rehabilitation Act, the district court cited
29 U.S.C. § 794(d) and Dyrek v. Garvey, 334 F.3d 590 (7th Cir.
2003), but neither the statute nor the case supports the
court’s conclusion. Section 794(d) provides only that com-
plaints that allege discrimination or retaliation in the em-
ployment context will be analyzed according to the stand-
ards of Title I of the ADA and other provisions of the ADA
(including the law’s prohibition against retaliation) as they
relate to employment. In Dyrek we simply paraphrased this
language of § 794(d). 344 F.3d at 597 n.3. Neither the statuto-
ry language nor our footnote implies that non-employment
retaliation claims are prohibited, nor would either one lead
us to split with our colleagues in other circuits on this issue.
Accordingly, the district court’s judgment dismissing
Reed’s suit for lack of subject-matter jurisdiction is
VACATED, and this case is REMANDED for further pro-
ceedings consistent with this opinion.