Farrokh Yassan v. J.P. Morgan Chase , 708 F.3d 963 ( 2013 )

In the
United States Court of Appeals
For the Seventh Circuit
No. 12-2313
F ARROKH Y ASSAN,
Plaintiff-Appellant,
v.
J. P. M ORGAN C HASE and C OMPANY, et al.,
Defendants-Appellees.
Appeal from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 1:12-cv-01298—Suzanne B. Conlon, Judge.
A RGUED O CTOBER 26, 2012—D ECIDED F EBRUARY 28, 2013
Before E ASTERBROOK, Chief Judge, and C UDAHY and
T INDER, Circuit Judges.
T INDER, Circuit Judge. Farrokh Yassan brought suit in
the Cook County Circuit Court against his former em-
ployer, J.P. Morgan Chase & Co. (hereinafter, Chase),
approximately nineteen months after the termination of
his employment. In his complaint, Yassan alleged that
Chase had terminated him in violation of both the
Age Discrimination in Employment Act (ADEA),
2 No. 12-2313
29 U.S.C. § 621 et seq., and public policy. Yassan further
alleged that Chase had committed fraud against him
by inducing him to sign a severance agreement through
“explicit and false representation[s].”
Shortly after filing suit—but before Chase’s deadline
to answer the complaint—Yassan’s counsel failed to
appear at a status hearing. As a result, the Cook County
Circuit Court judge dismissed the case for want of prose-
cution. Unaware of this dismissal, Chase filed a notice
to remove the case to federal district court the following
day. The parties brought this potential removal problem
to the district court’s attention, but the district court
concluded that the removal after dismissal constituted
a procedural defect that had been waived by Yassan’s
failure to object within thirty days. The district court
then granted Chase’s motion to dismiss under Fed. R.
Civ. P. 12(b)(6), finding that Yassan had failed to state
a claim. Yassan filed a timely appeal with our court,
arguing that the district court’s dismissal was improper.
Although Chase’s removal after dismissal for want of
prosecution creates a jurisdictional question a little
more complicated than the district court recognized,
we ultimately find that removal of the case to federal
court was properly accomplished. With jurisdiction
before both the district court and our court secure, we
affirm the decision of the district court.
I
Because the district court decided this case on a Fed. R.
Civ. P. 12(b)(6) motion to dismiss, we review Yassan’s
No. 12-2313 3
complaint de novo, construing it in the light most fa-
vorable to Yassan. Tamayo v. Blagojevich, 526 F.3d 1074, 1081
(7th Cir. 2008). At the time of his termination, Yassan
was employed by Chase on an at-will basis as a Field
Operation Technician. Admittedly, Yassan’s termination
on May 14, 2010 was not wholly unexpected; Yassan
acknowledges in his complaint that he began re-
ceiving negative performance reviews as early as 2008
(although he argues that these negative reviews were
an unmerited “response to [Yassan’s] practice of calling
management’s attention to the unfair workplace
practices engaged in by [his] management team”). Still,
Yassan alleges in his complaint that Chase told him
his “position was being eliminated for a lack of work.”
Under the impression that his termination was not per-
sonal, but simply due to lack of work, Yassan agreed
to sign a release in exchange for twenty-five weeks
of severance pay from Chase.
The terms of the release discharged Chase from “all
liability for any claims or potential claims relating to
[Yassan’s] employment,” including (but not limited to)
“any claims under . . . the Age Discrimination in Employ-
ment Act of 1967 . . . [and] any claims under . . . tort
(including . . . wrongful or abusive discharge . . . [and]
fraud).” The release explicitly defined the term “claims”
to include “claims I know about and claims I do not
know about, as well as the continuing effects of anything
that happened before I sign below.” Certainly, the
release drafted by Chase was broad, but Chase allowed
Yassan forty-five calendar days to evaluate it, consult
an attorney (if desired), and decide whether to sign it.
4 No. 12-2313
Moreover, the terms of the release permitted Yassan
to change his mind, allowing Yassan to revoke the
release within seven calendar days of signing it.
Yassan signed the release on May 13, 2010, forty-three
calendar days after Chase gave it to him, and never
attempted to revoke the agreement thereafter. (Yassan
now asserts that “he is ready, willing, and able to
[revoke and] tender the full amount of the severance
settlement” back to Chase.) Two months after signing
the release, however, Yassan learned that another Chase
employee, Spiro Maros, had been offered Yassan’s former
job. This discovery angered Yasaan; while his termination
from Chase initially appeared to be simply part of a
reduction in force, it now seemed much more per-
sonal—that is, discriminatory and retaliatory. As a result,
Yassan filed the present suit in Cook County Circuit Court
on December 15, 2011. Chase was served with Yassan’s
complaint on January 25, 2012, which gave Chase
until February 23, 2012 to respond.
On February 8, 2012, Yassan’s attorney did not appear
for a status hearing, leading the Cook County Circuit
Court judge to dismiss Yassan’s case for want of prosecu-
tion on February 22, 2012—the day before Chase’s dead-
line to respond. On the day of Chase’s deadline,
unaware that Yassan’s case had been dismissed for want
of prosecution, Chase filed a notice of removal in
federal district court. Only later did the parties learn
that the dismissal order and the notice of removal had
“crossed in the mail.” The parties pointed out this
timing issue, which they referred to as a potential
No. 12-2313 5
removal defect, to the district court judge, but the
district court judge characterized the situation as a mere
“procedural defect.” Furthermore, since “neither party
object[ed] to the case proceeding” in federal district
court, and since the “state court dismissal d[id] not affect
[the federal court’s] subject matter jurisdiction, which
[wa]s supplied by 28 U.S.C. § 1331 based on the ADEA
claim,” the district court deemed this “procedural de-
fect” waived under 28 U.S.C. § 1447(c). Finding that it
had jurisdiction to adjudicate Yassan’s case, the district
court turned to Chase’s motion to dismiss, which Chase
had filed on March 1, 2012. On May 3, 2012, the district
court dismissed the case for failure to state a claim
under Fed. R. Civ. P. 12(b)(6) because it found that
Yassan, by signing the release, had discharged Chase
from all ADEA, wrongful discharge, and fraud lia-
bility related to Yassan’s employment.1 Even if Chase had
1
Note that Chase had filed a motion to dismiss under both Fed.
R. Civ. P. 12(b)(1) and 12(b)(6). The district court never ad-
dressed Chase’s 12(b)(1) motion because it found adequate
grounds to dismiss the case under 12(b)(6). The district court’s
failure to address jurisdiction before addressing the merits
constituted error. In Steel Co. v. Citizens for a Better Env’t, 523
U.S. 83, 93 (1998), the Supreme Court held that it was
improper for courts to skip over jurisdictional issues in order
to reach the merits, even when “the merits question is more
easily resolved.” Still, had the district court addressed Chase’s
motions to dismiss in the proper order, we find that it should
have denied Chase’s 12(b)(1) motion (and moved onto Chase’s
(continued...)
6 No. 12-2313
disingenuously represented that Yassan’s termination
was due to “lack of work,” the district court found that
such a representation fell squarely under the terms of
the release signed by Yassan. Citing New York law—
which, according to the release’s choice-of-law provision
(and both parties agree), governs this case—the district
court pointed out:
A party that settles a claim of fraudulent induce-
ment cannot revisit that settlement by asserting
that the alleged defrauding party did not make a
full disclosure of its own fraud. This is so even
if the defrauding party has an independent duty
to disclose, and even when the release was exe-
cuted without knowledge of certain specific frauds.
1
(...continued)
12(b)(6) motion, as it did already). Chase argues that Yassan’s
fraud claim should be dismissed for lack of jurisdiction
because it is pre-empted by the Illinois Human Rights Act
(IHRA). This argument lacks merit for three reasons. First, 775
Ill. Comp. Stat. 5/8-111, the section of the IHRA that allegedly
pre-empts Yassan’s fraud claim, governs the jurisdiction only
of “court[s] of this state”—not federal courts. Cf. Rodriguez v.
Cook Cnty., Ill., 664 F.3d 627, 632 (7th Cir. 2011) (reminding
courts that “Congress, not the states, determines the jurisdic-
tional authority of the federal courts”). Second, both parties
agree that New York, not Illinois, law governs Yassan’s case.
Third, even if Illinois law did govern his case, Yassan does not
allege a violation of the IHRA in his complaint. The IHRA
prohibits age discrimination, but Yassan only alleges a viola-
tion of the ADEA in his complaint.
No. 12-2313 7
Nycal Corp. v. Inoco PLC, 988 F. Supp. 296, 306 (S.D.N.Y.
1997) (citations omitted), aff’d, No. 98-7058, 166 F.3d
1201 (2d Cir. Dec. 9, 1998).
After the district court’s dismissal for failure to state a
claim, Yassan filed a timely appeal with this court. We
review de novo the district court’s determination that it
had subject matter jurisdiction over Yassan’s case.
Village of DePue, Ill. v. Exxon Mobil Corp., 537 F.3d 775,
782 (7th Cir. 2008). Because we conclude in the next
section that the district court did indeed have jurisdic-
tion, we review Yassan’s case on the merits de novo as
well, construing Yassan’s complaint in the light most
favorable to him, accepting all well-pleaded facts as
true, and drawing all inferences in his favor. Tamayo,
526 F.3d at 1081.
II
We are obliged to inquire into the existence of federal
jurisdiction whenever any concerns arise. Tylka v. Gerber
Prods. Co., 211 F.3d 445, 447 (7th Cir. 2000). The parties
were apparently unconcerned about the existence of
federal court jurisdiction when the matter came to us on
appeal, but at oral argument, we raised questions about
it upon reviewing the case’s procedural posture. In par-
ticular, two concerns trouble us, so we must satisfy our-
selves that these two concerns are unsubstantiated
before addressing the merits of Yassan’s case.
First, we are concerned that the jurisdictional require-
ments of 28 U.S.C. § 1441, the removal statute, prohibit
8 No. 12-2313
the federal court from hearing this case. Defendants may
remove a “civil action” from state court to the federal
district court located in “the place where such action is
pending,” as long as the federal district court had “orig-
inal jurisdiction” over the case. 28 U.S.C. § 1441(a).
Here, there is no question that the federal district court
had original jurisdiction over Yassan’s case: 28 U.S.C.
§ 1331 supplied subject matter jurisdiction over Yassan’s
ADEA claim, while 28 U.S.C. § 1367(a) supplied jurisdic-
tion over his fraud and wrongful termination claims.
But the removal of Yassan’s case runs into problems
with other parts of 28 U.S.C. § 1441(a): namely, the re-
quirement that his case was “pending” at the time of
removal. Removal of Yassan’s case was only permissible
if a case dismissed for want of prosecution on the
previous day in state court can still be considered “pend-
ing” there.
Second, even if this case was “pending” at the time
of removal, we are concerned that the jurisdictional
requirements of the U.S. Constitution prohibit the
federal court from hearing this case. Regardless of how a
case ends up in federal court, U.S. Const. art. III only
allows federal courts to adjudicate live cases or contro-
versies. See, e.g., Allen v. Wright, 468 U.S. 737, 750 (1984)
(“Article III of the Constitution confines the federal
courts to adjudicating actual ‘cases’ and ‘controversies.’ ”)
Neither the Illinois state court judge nor the federal
district judge explicitly reinstated this case after its dis-
missal for want of prosecution. Consequently, we must
determine whether a case previously dismissed by a
state court for want of prosecution remains a live case
No. 12-2313 9
or controversy. If this case remained live even after the
state court dismissal, we must then determine if it was
still live at the time of the district court dismissal. If
Yassan’s case was dead—that is, no longer a live case or
controversy—before removal, or if Yassan’s case died at
any point between removal and the district court’s dis-
missal, then Article III prohibits us from reaching the
merits.
Turning first to our concern regarding 28 U.S.C.
§ 1441(a), whether a case dismissed for want of prosecu-
tion can be considered still “pending” ultimately hinges
on the meaning of the word “pending.” The term
pending is not defined within 28 U.S.C. § 1441. More-
over, we cannot find a federal case that authoritatively
defines the term pending for the purposes of 28 U.S.C.
§ 1441(a). Nonetheless, the meaning of this term has
been discussed several times in the context of 28 U.S.C.
§ 2244(d)(2), which clarifies the limitation period
during which a prisoner can seek federal habeas relief.
Although a petition for federal habeas relief is a very
different type of matter from the civil action we have
before us, we still find it helpful to consider the
approach taken by courts to understand the term
pending when it is statutorily undefined.
28 U.S.C. § 2244(d)(2) states that the “time during
which a properly filed application for State post-convic-
tion or other collateral review . . . is pending” does not
count toward the one-year limitation period defined
in § 2244(d)(1). Faced with applications for habeas relief
that were potentially time-barred, the Supreme Court
10 No. 12-2313
and several circuit courts have been forced to wrestle
with the meaning of the term pending. In Carey v. Saffold,
536 U.S. 214, 219 (2002), the Supreme Court looked to
the definition in Webster’s Third New World Dictionary,
which defined pending as “in continuance” or “not
yet decided.” From this definition, the Supreme
Court concluded that an application was pending until
it had “achieved final resolution.” Id. at 220.
Relying on Carey, the Eleventh Circuit later elaborated
that “ ‘pending’ refers to the continuation of the process,
or the time until the process is completed. . . . [T]he
claim remains pending until the time to seek review
expires.” Cramer v. Sec’y, Dep’t of Corr., 461 F.3d 1380, 1383
(11th Cir. 2006); cf. Barnett v. Lemaster, 167 F.3d 1321, 1323
(10th Cir. 1999) (recognizing that “pending” meant some-
thing broader than “remain[ing] unresolved by a state
district court”). Likewise, when considering the time
limit for a criminal appeal, our circuit suggested in
United States v. Rollins, 607 F.3d 500, 501 (7th Cir. 2010),
that a case is pending in the district court until “the
district judge is really finished with the case.”
Outside the criminal and habeas contexts, other
circuits have held that pending cases can include cases
that have resulted in a final district court order—so long
as the parties are still actively contesting the order in
the court system. For example, in Beverly Community
Hospital Association v. Belshe, 132 F.3d 1259, 1264 (9th
Cir. 1997), the Ninth Circuit had to interpret what Con-
gress meant when it decreed that new amendments to
the Medicare Act, 42 U.S.C. § 1395 et seq., would be ap-
plicable to lawsuits “pending as of . . . the date of the
No. 12-2313 11
enactment.” The court concluded that the law applied
“not only [to] undecided cases at the District Court
level but also [to] actions pending on appeal.” Id.; see
also de Rodulfa v. United States, 461 F.2d 1240, 1253 (D.C.
Cir. 1972) (holding that a “suit is pending until the
appeal is disposed of, and until disposition any judg-
ment appealed from it is still sub judice” (quotations
and citations omitted)).
Informed by these previous discussions, we conclude
that a state civil action is “pending” for the purposes of
28 U.S.C. § 1441(a), and therefore removable, as long as
the parties are still actively contesting the case in the
state court system. So long as the parties continue to
contest the case in the state court system—whether
they are contesting the case in the state trial court or
on appeal—the case has not “achieved final resolution.”
Carey, 536 U.S. at 220.
Although we now have a working definition of what
it means for a civil action to be pending in a state court
under 28 U.S.C. § 1441(a), we still cannot determine
whether Yassan’s action was pending in Illinois state
court on the date of removal without additional steps.
Our understanding of pending tells us that Yassan’s
action was pending in the Illinois state court system
as long as his case had not achieved final resolution
there. We know that a state trial judge had dismissed
Yassan’s case for want of prosecution, but we must
inquire further as to whether this dismissal constituted
a final resolution of his case. Although our concern is
with the federal removal statute, such an inquiry
12 No. 12-2313
requires us to consider the effect of a dismissal for
want of prosecution under Illinois law.
Illinois courts have inherent authority to dismiss a case
for want of prosecution, and this authority “exists inde-
pendent of any statute.” Bejda v. SGL Indus., Inc., 412
N.E.2d 464, 467 (Ill. 1980) (quotation and citation omit-
ted). Illinois courts recognize this authority as “necessary
to prevent undue delays in the disposition of causes . . .
and also to empower courts to control their dockets.”
Sander v. Dow Chem. Co., 651 N.E.2d 1071, 1080 (Ill. 1995).
Still, despite this interest in promoting efficiency,
Illinois courts prefer resolution of a case on the merits,
and a dismissal for want of prosecution in Illinois is not
a dismissal on the merits. Keilholz v. Chicago & Nw. Ry.
Co., 319 N.E.2d 46, 47-48 (Ill. 1974). For this reason,
when an Illinois court dismisses a case for want of pros-
ecution, as here, the dismissal can become a final order,
but it does not become one immediately.
When a dismissal for want of prosecution becomes a
final order is dictated by 735 Ill. Comp. Stat. 5/13-217,
which allows Illinois plaintiffs whose cases are dis-
missed for want of prosecution to “commence a new
action within one year or within the remaining period
of limitation, whichever is greater, after such judgment
is reversed or entered against the plaintiff.” The
Illinois Supreme Court has deemed § 5/13-217 a “savings
statute, with the purpose of facilitating the disposition
of litigation on the merits.” S.C. Vaughan Oil Co. v.
Caldwell, Troutt & Alexander, 693 N.E.2d 338, 342 (Ill.
1998). With this purpose in mind, the Illinois Supreme
No. 12-2313 13
Court has held that a dismissal for want of prosecution
“is not a final and appealable order” as long as the
plaintiff can still refile the case under § 5/13-217. Wold
v. Bull Valley Mgmt. Co., Inc., 449 N.E.2d 112, 114 (Ill.
1983); see also Flores v. Dugan, 435 N.E.2d 480, 482 (Ill.
1982) (holding that the “order or judgment in this case,
dismissing the cause for want of prosecution, is not a
final order since the plaintiffs had an absolute right to
refile the action against the same party or parties and
to reallege the same causes of action”). Only once the
§ 5/13-217 limitation period has expired do Illinois
courts recognize a case dismissed for want of prosecution
as “effectively terminated” and a “final judgment.” S.C.
Vaughan Oil Co., 693 N.E.2d at 344; see also Progressive
Universal Ins. Co. v. Hallman, 770 N.E.2d 717, 719 (Ill. App.
Ct. 2002) (holding that “a DWP [dismissal for want of
prosecution] is interlocutory as long as the option to
refile is still available to the plaintiff”).
When Chase purported to remove Yassan’s suit to
federal court on February 23, 2012, only one day had
passed since the suit’s dismissal for want of prosecution.
Under § 5/13-217, Yassan had at least 364 more days to
refile his suit in the Cook County Circuit Court. Conse-
quently, the Cook County judge’s order to dismiss was
“not a final and appealable order” on the day of removal.
Wold, 449 N.E.2d at 114. It was merely an interlocutory
order. Progressive, 770 N.E.2d at 719.
Furthermore, even if the Cook County judge’s dis-
missal order had been final and appealable, the order
was so recent that it could have been easily vacated had
14 No. 12-2313
the case remained in Illinois state court. 735 Ill. Comp.
Stat. 5/2-1301(e) allows Illinois courts to set aside a
final order or judgment within thirty days after entry.
Indeed, at oral argument, both sides acknowledged
an informal practice of “almost automatically” vacating
dismissals for want of prosecution under § 5/2-1301(e)
within thirty days of issuance in Illinois state courts. At
the time immediately prior to Chase filing a notice of
removal, Yassan’s case could have benefitted from
this informal practice.
In sum, Yassan’s case was unresolved in Illinois state
court immediately prior to Chase’s filing a removal
notice. Yassan’s case was not subject to a final and
appealable order; it was both refileable and reinstatable
in Illinois state court. With a better grasp of this case’s
status in Illinois state court prior to removal, we return
to see whether this status fits with our federal under-
standing of a “pending” state civil action under 28 U.S.C.
§ 1441(a). We determined that a state court action was
pending for the purposes of § 1441(a), and therefore
removable, as long as it had not “achieved final resolu-
tion.” Carey, 536 U.S. at 220. Illinois case law makes
clear that Yassan’s case had not achieved final resolution
in Illinois state court. Yassan’s case was subject to an
interlocutory order dismissing the case for want of prose-
cution, but not a final order. After the issuance of this
interlocutory order, both parties actively continued to
contest the case, as evidenced by Chase’s filing of a re-
moval petition the next day. And had Chase opted to
fight Yassan’s case in state court—instead of filing a
notice of removal to federal court—the Illinois state
No. 12-2313 15
court would have almost automatically reinstated
Yassan’s case. As a result, Yassan’s case was still
pending in Illinois state court on the date of removal, and
thus, was capable of being removed under 28 U.S.C.
§ 1441(a). Accord Suraleb, Inc. v. Prod. Ass’n “Minsk Tractor
Works,” Republic of Belarus, 2010 WL 2605356, at *1 (E.D.
Wis. June 25, 2010) (finding a case removable under
almost identical facts because the “proper analysis in
determining whether a removable case existed does not
examine whether the order was final at the time
entered, but whether the order was still subject to the
state court’s modification or jurisdiction at the time
of removal”) (quotations and citations omitted).
Having satisfied ourselves that the case was pending
in Illinois state court at the time of removal, we must
further satisfy ourselves that Yassan’s case was live at
the time of removal—and has remained live throughout
its pendency in federal court. U.S. Const. art. III
demands “a live case or controversy at the time that a
federal court decides the case.” Burke v. Barnes, 479
U.S. 361, 363 (1987). It is not enough that Yassan’s case
was live in the Cook County Circuit Court or live
upon removal; it must still be live today. Id.When a defendant successfully removes a case to
federal court, the “federal court inherits a removed case
in its procedural posture on the date of removal.” LaPlant
v. Nw. Mut. Life Ins. Co., 701 F.3d 1137, 1142 (7th Cir.
2012). At first glance, it appears that when Chase
removed this case to federal court on February 23, 2012,
the federal court inherited a case that was still pending,
16 No. 12-2313
but needed to be reinstated before further proceedings.
But Yassan’s case was never explicitly reinstated. The
Cook County Circuit Court could have reinstated his
case before removal under 735 Ill. Comp. Stat. 5/2-1301(e),
and the federal district court could have reinstated his
case after removal under either Fed. R. Civ. P. 59(e)
or 60(b). Neither court ever did.
We know from our earlier review of Illinois case law
that, had Yassan’s case remained in the Cook County
Circuit Court untouched and without reinstatement,
the interlocutory order dismissing the case for want of
prosecution would have become final once the 735 Ill.
Comp. Stat. 5/13-217 refiling period ended. Once
the dismissal order became final, the time clock to file a
timely appeal would have begun, and once that clock
expired, the case would have ceased to be live. Yet,
as we know from the procedural posture, Yassan’s case
did not remain in the Cook County Circuit Court, and
while it was never explicitly reinstated, it certainly
did not remain untouched. On the contrary, after
Yassan’s case was dismissed for want of prosecution
in Cook County Circuit Court, the case was removed by
Chase, argued by both parties on a motion to dismiss,
and appealed by Yassan in federal court. Both parties’
behavior is inconsistent with a dismissal, and both par-
ties’ behavior is consistent with the case remaining
a live case or controversy. Still, just because both
parties believe that Yassan’s case has remained live—and
just because both parties desire the case to remain
in federal court—does not mean that Yassan’s case is
live in reality. See General Ins. Co. of Am. v. Clark Mall
No. 12-2313 17
Corp., 644 F.3d 375, 378 (7th Cir. 2011) (reminding
parties that they “cannot consent to this court’s jurisdic-
tion”). Nonetheless, three considerations weigh in favor
of finding that Yassan’s case has remained a live case
or controversy, despite never being explicitly reinstated.
First, Yassan’s case does not present the typical live
case or controversy problem. Generally, when once-
live cases become dead during the course of litigation,
mootness is to blame. Years of litigation sometimes
outlast the natural course of the contested conduct.
When it does, the federal court becomes “unable to
grant any effectual relief,” and the case becomes moot.
Medlock v. Trs. of Ind. Univ., 683 F.3d 880, 882 (7th Cir.
2012). Moot cases run afoul of the live case or con-
troversy requirement under U.S. Const. art. III because
they have developed a substantive flaw; the expiration
of the complained-of conduct has transformed a once
“distinct and palpable injury” to a mere “abstract pro-
position[]” existing “purely in the hypothetical.” Protestant
Mem’l Med. Ctr., Inc. v. Maram, 471 F.3d 724, 728-29 (7th
Cir. 2006). In contrast, a procedural flaw is the root of
the live case or controversy problem in Yassan’s case.
Neither the Cook County Circuit Court nor the federal
district court explicitly reinstated Yassan’s case after
dismissal, but at all times throughout the course of this
litigation, Yassan has continued to complain of an
active injury that both courts are capable of redressing.
The injury of which Yassan complains is as fresh as ever;
at no point during this litigation has Yassan been re-
hired or otherwise compensated by Chase. The fact
that Yassan retains “a legally cognizable interest in the
18 No. 12-2313
outcome” of his case weighs in favor of finding that
his case—despite its procedural flaw—satisfies the live
case or controversy requirement. Stotts v. Cmty. Unit
Sch. Dist. No. 1, 230 F.3d 989, 990 (7th Cir. 2000) (quoting
Powell v. McCormack, 395 U.S. 486, 496 (1969)).
Second, even though the Cook County Circuit
Court judge never explicitly reinstated this case before
removal, we believe there is a good argument that the
case was implicitly reinstated as soon as Chase filed a
removal petition. Illinois appellate courts recognize the
equitable doctrine of revestment, which implicitly rein-
states a matter that was never explicitly reinstated
after dismissal. As one Illinois appellate court explained it:
It is axiomatic that when a case is dismissed, the
parties are out of court and any further proceed-
ings are unauthorized until the judgment of dis-
missal is vacated and the cause reinstated. How-
ever, an exception to the general rule arises
where the parties actively participate in further
proceedings or where the party in whose favor
dismissal was entered otherwise conducts
himself in a manner inconsistent with the order
of dismissal. Such action operates to nullify the
order of dismissal and revests the trial court with
jurisdiction.
Governale v. Nw. Cmty. Hosp., 497 N.E.2d 1318, 1322 (Ill.
App. Ct. 1986) (quotations and citations omitted). Chase,
the party in whose favor dismissal was entered, certainly
conducted itself in a manner inconsistent with the order
of dismissal for want of prosecution. It filed a notice of
No. 12-2313 19
removal to continue the case in the federal district court.
Chase’s behavior after dismissal satisfies the require-
ments for revestment in Illinois, so this case was
arguably reinstated in the Cook County Circuit Court
before it was formally removed to the federal district court.
Third, even if Yassan’s case were not equitably
reinstated in Cook County Circuit Court before re-
moval, we believe there is a good argument that the
federal district judge implicitly reinstated Yassan’s case
after removal. As the federal district court judge noted
in her order dismissing the case, both Chase and Yassan
brought the dismissal for want of prosecution to the
district court’s attention. By bringing the dismissal to
the district court’s attention, Chase and Yassan did all
they could to remedy the situation; only the district
court judge had the power to reinstate the case. Once
the district court judge became aware of the dismissal,
the judge could have explicitly reinstated the case; how-
ever, the judge viewed the situation as a procedural
error in removal and, as a result, did not believe an
explicit reinstatement was necessary. Still, by deciding
that the prior dismissal did not raise a jurisdictional
issue and by subsequently moving on to decide the
merits, the federal district court judge implicitly rein-
stated Yassan’s case.
For these three reasons, we believe that Yassan’s case
has at all times remained a live case or controversy
under U.S. Const. art. III, despite never being explicitly
reinstated after its dismissal for want of prosecution.
Because Yassan’s civil action is a live case or controversy
20 No. 12-2313
that was pending in Cook County Circuit Court at the
time of removal, we have jurisdiction to adjudicate it.
We turn now, at last, to consider the merits of
Yassan’s case.
III
At the center of Yassan’s case is the release prepared by
Chase and signed by Yassan after forty-three days of
consideration—a release that was a prerequisite to Yassan
receiving a severance package equivalent to almost six
months’ salary. The release contains a choice-of-law
clause providing that disputes about the release will be
governed by New York law. We enforce choice-of-law
provisions as long as they are reasonable. Kuehn v.
Childrens Hosp., Los Angeles, 119 F.3d 1296, 1301 (7th Cir.
1997). Because Chase’s principal place of business is
in New York, and because neither party objects to the
application of New York law, we apply New York law
to Yassan’s allegations about the release.
Chase drafted the release, and the release is unquestion-
ably broad; however, Chase gave Yassan forty-five days
to consider the agreement, more than ample time to
consult with a lawyer. Yassan does not allege that Chase
forced him to sign the release. On the contrary, Yassan
was an at-will employee; with his signature, Yassan
explicitly acknowledged that he “was signing this
Release in exchange for benefits to which [he] would
not otherwise be entitled.” Despite the fact that Yassan
received valuable consideration for agreeing to release
Chase from all potential claims (both known and un-
No. 12-2313 21
known), Yassan argues that Chase fraudulently induced
him to sign the release.2 But this argument completely
ignores the unambiguous waiver provisions of the
release agreement.
Chase gave Yassan a severance package solely in
return for his agreement to waive all claims against
Chase, including “claims he kn[e]w about and claims [he
did] not know about.” (emphasis added). There was no
other reason for Chase to pay Yassan six months’
salary after his termination. Yassan knew this when he
signed the release. Chase may have misrepresented its
reasons for terminating Yassan, and Chase may have
had ulterior motives for terminating Yassan. But Yassan
explicitly released Chase from all tort claims, including
fraud. Yassan should have considered the possibility
that Chase was lying to him before he signed a release
waiving any claims that arose out of Chase lying to him.
The terms of the release plainly bar all of Yassan’s
claims, but Yassan could still have a case if New York
2
Yassan focuses on the argument that Chase fraudulently
induced him to sign the release. But Yassan also appears to
argue in his brief that Chase fraudulently induced him to
give up his job, stating, “[Yassan] relied on [Chase’s] lies to
give up a job he liked with health insurance and other benefits
and with status.” This argument contradicts Yassan’s own
complaint, which states, “On March 31, 2010, Plaintiff was
informed by his manager, Tully, that Plaintiff’s job was
being eliminated as of May 14, 2010.” Consequently, it appears
that Yassan would have lost his job with Chase no matter
what, and any suggestion otherwise is disingenuous.
22 No. 12-2313
courts were reluctant to enforce a release this broad.
In reality, New York courts enforce releases liberally,
giving a “general release . . . its full literal effect where
it is directly or circumstantially evident that the purpose
is to achieve a truly general settlement.” Mangini v.
McClurg, 249 N.E.2d 386, 389-90 (N.Y. 1969); see also
Lucio v. Curran, 139 N.E.2d 133, 136 (N.Y. 1956) (finding
a general release defeats “not only . . . controversies and
causes of action between the releaser and releasees
which had, by that time, actually ripened into litigation,
but . . . all such issues which might then have been ad-
judicated as a result of pre-existent controversies, . . . even
though no such litigation had then been instigated”).
Releases of claims unknown at the time of signing
(like the release signed by Yassan) are enforceable
under New York law. Mangini, 249 N.E.2d at 391
(holding that if “there was a conscious and deliberate
intention to discharge liability from all consequences of
an accident, the release will be sustained and bar any
future claims of previously unknown injuries”). More
specifically, releases of fraud claims unknown at the time
of signing are enforceable under New York law—even
if the alleged defrauder did not disclose his fraud to the
party signing the release. Bellefonte Re Ins. Co. v. Argonaut
Ins. Co., 757 F.2d 523, 527 (2d Cir. 1985) (rejecting the
argument that parties “cannot be bound by a settle-
ment agreement unless the alleged defrauder has made
full disclosure to the other party prior to settlement”).
According to the New York Court of Appeals:
[A] release may encompass unknown claims,
including unknown fraud claims, if the parties
No. 12-2313 23
so intend and the agreement is fairly and know-
ingly made. . . . [A] party that releases a fraud
claim may later challenge that release as fraudu-
lently induced only if it can identify a separate fraud
from the subject of the release. Were this not the
case, no party could ever settle a fraud claim
with any finality.
Centro Empresarial Cempresa S.A. v. Am. Movil, S.A.B. de
C.V., 952 N.E.2d 995, 1000 (N.Y. 2011) (emphasis added)
(quotations and citations omitted).
Consequently, Yassan’s release is fully enforceable
under New York law unless Yassan can identify a fraud
that is separate from the terms of the release. A separate
fraud might include Chase deceiving Yassan about
what he was signing. But Chase did just the opposite
here: Chase gave Yassan forty-five days to consider
the release, encouraged Yassan to consult with an at-
torney, and made it clear that Yassan’s severance
package hinged on his signing the release. No matter
what prior representations Chase had made about its
reasons for terminating Yassan, Chase was forthcoming
with Yassan about the terms of the release-severance
package deal. Yassan had ample opportunity to review
and digest the terms of the deal before he agreed to it.
The fraud that Yassan alleges is not a separate fraud,
but a fraud that “falls squarely within the scope of the
release.” Centro, 952 N.E.2d at 1001. As long as plain-
tiffs like Yassan are given sufficient time to evaluate
the scope of the release, New York law rejects any later
attempts “to be relieved of the release on the ground
24 No. 12-2313
that [the plaintiffs] did not realize the true value of
the claims they were giving up.” Id. As a result, we have
no trouble concluding that Yassan’s age discrimination,
wrongful discharge, and fraud claims all fail because
Yassan explicitly waived his right to make these claims
when he agreed to sign a sweeping release in exchange
for a severance package.
IV
In addition to his substantive arguments, Yassan
makes a procedural argument that the district court’s
dismissal of his action on a 12(b)(6) motion was
improper because it “required an analysis of the facts
surrounding Yassan’s departure from Chase . . . on
which discovery is needed to adequately flush [sic] out.”
Yassan is correct that the district court relied on facts
outside his complaint in dismissing his case; indeed,
the district court relied heavily on the text of the release,
which Chase attached to its motion to dismiss.
At the dismissal stage, the court is typically confined
to the pleadings alone, but “[i]t is . . . well-settled in this
circuit that ‘documents attached to a motion to dismiss
are considered part of the pleadings if they are referred
to in the plaintiff’s complaint and are central to his
claim.’ ” 188 LLC v. Trinity Indus., Inc., 300 F.3d 730, 735
(7th Cir. 2002) (citing Wright v. Assoc. Ins. Cos. Inc., 29
F.3d 1244, 1248 (7th Cir. 1994)). Because Chase attached
a copy of the release to its motion to dismiss, and
because Yassan’s complaint repeatedly referenced the
release, it was proper for the district court to consider
the text of the release in dismissing this case.
No. 12-2313 25
What was not proper was the rule under which the
district court dismissed this case. The problem with
Yassan’s case is not that he failed to state a claim; the
problem is that he signed a release waiving the right
to make a claim. As a result, the district court judge
dismissed Yassan’s case on the basis of the release (and
not the complaint’s failure to state a claim). A release is
an affirmative defense under Fed. R. Civ. P. 8(c)(1). Dis-
missing a case on the basis of an affirmative defense
is properly done under Rule 12(c), not Rule 12(b)(6).
See, e.g., Brownmark Films, LLC v. Comedy Partners, 682
F.3d 687, 690 n.1 (reminding that even “though district
courts have granted Rule 12(b)(6) motions on the basis
of affirmative defenses and this court has affirmed
those dismissals, we have repeatedly cautioned that
the proper heading for such motions is Rule 12(c), since
an affirmative defense is external to the complaint”).
Therefore, the district court made the right decision—
dismissing the case—but under the wrong rule.
Nevertheless, Yassan argues that dismissal under
any rule was inappropriate because he needed the op-
portunity for discovery to develop his case more fully.
But his argument falls short because—even if the
district court allowed discovery, and everything Yassan
alleged proved to be true—Yassan’s case would still
fail under the terms of the release. As explained in
Section III, if Chase knowingly lied to Yassan about
its reasons for terminating him, Yassan’s case fails
because he subsequently released Chase from all “po-
tential claims . . . [of] fraud.” If Chase deliberately termi-
nated Yassan because it was angry about his whistle-
blowing activities (although it is not clear from Yassan’s
26 No. 12-2313
complaint that he ever blew the whistle about anything
illegal), Yassan’s case fails because he subsequently
released Chase from all “potential claims . . . [of] wrongful
or abusive discharge.” Even if Chase purposefully discrim-
inated against Yassan on the basis of his age, Yassan’s case
fails because he subsequently released Chase from all
“potential claims . . . [under] the Age Discrimination in
Employment Act of 1967.” In exchange for all these re-
leases, Yassan received valuable consideration to which
he was not otherwise entitled. Yassan’s procedural argu-
ment fails, just as his substantive arguments fail.
V
As we have stated previously, “a deal’s a deal.” Indus.
Representatives, Inc. v. CP Clare Corp, 74 F.3d 128, 132
(7th Cir. 1996). Yassan believes he has made a bad deal,
but “a court cannot improve matters by intervention
after the fact. It can only destabilize the institution of
contract, increase risk, and make parties worse off.” Id.
at 131-32. Yassan had plenty of time to consider the
repercussions of his deal, but he still decided to accept
it. He agreed to waive a long list of current and future
claims against Chase, and in return, Chase gave him
almost six months’ salary. Everything Yassan agreed
to waive was spelled out in the plain language of the
release. We will not ignore the plain language of the
release just because Yassan failed to appreciate the
extent of what he was waiving. For that reason, we
A FFIRM the district court’s dismissal of Yassan’s suit.
2-28-13