Tonya Davis v. Ernest Fenton ( 2017 )

In the
United States Court of Appeals
For the Seventh Circuit
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Nos. 16-2121, -2165
TONYA DAVIS,
Plaintiff-Appellee and Cross-Appellant,
v.
ERNEST B. FENTON, et al.,
Defendants-Appellants and Cross-Appellees.
____________________
Appeals from the United States District Court for the
Northern District of Illinois, Eastern Division.
No. 13 C 3224 — Ruben Castillo, Chief Judge.
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ARGUED APRIL 7, 2017 — DECIDED MAY 26, 2017
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Before POSNER, RIPPLE, and SYKES, Circuit Judges.
POSNER, Circuit Judge. In 2013 Tonya Davis sued Ernest
Fenton (as well as Fenton’s law firms) in federal district
court asserting state malpractice and breach of contract
claims, as well as federal Fair Housing Act and Civil Rights
Act claims, all arising out of Fenton’s representation of Davis
in a mortgage foreclosure action in which Davis had lost her
home. Davis alleged that Fenton’s representation of her had
2 Nos. 16-2121, -2165
been deficient, and that he had targeted her for deficient rep-
resentation because of her race.
Fenton asked the district court to stay the lawsuit pend-
ing arbitration, because his contract with Davis to represent
her in the foreclosure action had required the parties to arbi-
trate any disputes arising from the representation; and the
Federal Arbitration Act, 9 U.S.C. § 3, provides that when the
parties to a dispute litigable in federal court have a written
agreement to arbitrate their dispute, either of the parties is
entitled to stay the trial of the action until the arbitration is
complete, provided that the applicant for the stay is not in
default of its obligations in the arbitration.
Agreeing that Fenton’s request for a stay was proper, the
district judge ordered the suit “stayed pending arbitration”;
the docket reflects that the lawsuit was “administratively
dismissed without prejudice subject to full reinstatement
upon the completion of the required arbitration,” which
awarded Davis $82,528.10 in damages for malpractice but
denied her other claims. Fenton then sued Davis in an Illi-
nois state court to have the arbitration award vacated or at
least reduced. Davis responded by moving the federal dis-
trict court to reinstate her suit because the arbitration had
been concluded, to confirm the arbitration award pursuant
to 9 U.S.C. § 9, and to permit her to file a new Fair Housing
Act claim against Fenton, accusing him of retaliating against
her for having filed her original Fair Housing Act claim.
When Fenton failed to appear at the hearing in the dis-
trict court on Davis’s motion, the judge entered a default
judgment granting the motion, reinstating the case, and con-
firming the arbitration award. He also permitted Davis to
file her new Fair Housing Act claim. Fenton moved the court
Nos. 16-2121, -2165 3
to vacate the default judgment and remand the case to state
court, on the ground that the district court lacked jurisdic-
tion because he (Fenton) had filed his state lawsuit challeng-
ing the arbitration award prior to Davis’s having moved the
district court to re-open the case. The district judge refused,
reminding the parties that “I was the one that enforced the
defendants’ request for arbitration and I sent the case for ar-
bitration. So it would seem to me, because I retained jurisdic-
tion, that any request to vacate the arbitration award that the
plaintiff won should have come to this Court and not to
some [state court] judge.” Fenton also moved the district
court to dismiss Davis’s retaliation claim; the court granted
the motion.
On appeal Fenton has renewed his challenge to the dis-
trict judge’s jurisdiction to confirm the arbitration award.
But the challenge is meritless—the judge had jurisdiction
over the case at the time it was filed, as it raised questions of
federal law, and the judge’s order staying the case (or,
equivalently, administratively dismissing it subject to rein-
statement at the conclusion of arbitration) retained jurisdic-
tion to confirm or vacate an arbitral award. Baltimore & Ohio
Chicago Terminal Railroad Co. v. Wisconsin Central Ltd., 154
F.3d 404, 407 (7th Cir. 1998).
This is true notwithstanding Magruder v. Fidelity Broker-
age Services LLC, 818 F.3d 285 (7th Cir. 2016), a case in which
an aggrieved customer of Fidelity had arbitrated his dispute
with the company, lost, filed a federal lawsuit asking the
court to overturn the arbitrator’s decision, and argued that
the court had jurisdiction to vacate the award because the
arbitrator had resolved a question of federal law. But we
ruled that “a federal issue resolved by the arbitrator does not
4 Nos. 16-2121, -2165
supply subject-matter jurisdiction for review or enforcement
of the award.” Id. at 288 (emphasis in original). Because there
was no other basis for subject-matter jurisdiction, the suit
should have been dismissed. Davis’s federal suit, in contrast,
preceded the arbitration and was stayed pending it; upon
completion of the arbitration she returned to the federal
court seeking confirmation of the award. Because her suit
had been stayed, not dismissed, the court, by virtue of hav-
ing jurisdiction over the original lawsuit, retained jurisdic-
tion not only over her request to confirm the award but also
over her federal-law claims.
One other issue needs to be resolved—Davis’s appeal of
the dismissal of her retaliation claim. In her original lawsuit
against Fenton she’d been represented by two lawyers,
whom after the lawsuit was filed Fenton sued in state court,
accusing them of having improperly acquired confidential
information, and spread false information, about his busi-
ness. See Fenton v. Dudley, 761 F.3d 770 (7th Cir. 2014). Fen-
ton asked the state court for an injunction against the law-
yers prohibiting them from speaking to Davis about her law-
suit against him, and the state court granted the injunction
(although it was eventually lifted). Davis now argues that
Fenton’s lawsuit was in retaliation against her for having
filed her original Fair Housing Act claim against him, and
was therefore a further violation of the Fair Housing Act.
The Act does prohibit retaliation against a person for exercis-
ing his or her rights under the Act; see 42 U.S.C. § 3617, also
Bloch v. Frischholz, 587 F.3d 771, 783 (7th Cir. 2009). But filing
a lawsuit, or asking for an injunction, can’t be considered re-
taliation, except perhaps in extraordinary circumstances not
present in this case.
AFFIRMED.