201 F.3d 948 (7th Cir. 2000), 99-2401, O'Rourke Bros. Inc. v. Nesbitt Burns Inc.

Docket Nº:99-2401
Citation:201 F.3d 948
Party Name:O'ROURKE BROS. INC., an Iowa corporation, and JEFF O'ROURKE, Plaintiffs-Appellants, v. NESBITT BURNS, INC., a Canadian corporation, ANDREAS F. KIEDROWSKI, and JOHN C. DUNN, Defendants-Appellees.
Case Date:January 19, 2000
Court:United States Courts of Appeals, Court of Appeals for the Seventh Circuit

Page 948

201 F.3d 948 (7th Cir. 2000)

O'ROURKE BROS. INC., an Iowa corporation, and JEFF O'ROURKE, Plaintiffs-Appellants,


NESBITT BURNS, INC., a Canadian corporation, ANDREAS F. KIEDROWSKI, and JOHN C. DUNN, Defendants-Appellees.

No. 99-2401

In the United States Court of Appeals, For the Seventh Circuit

January 19, 2000

Argued December 3, 1999

Appeal from the United States District Court for the Central District of Illinois. No. 97-4136--Joe Billy McDade, Chief Judge.

Page 949

Before FLAUM, ROVNER, and EVANS, Circuit Judges.

EVANS, Circuit Judge.

This case alleging violations of the Illinois securities laws is brought under our diversity jurisdiction. 28 U.S.C. sec. 1332(a)(2). O'Rourke Bros. Inc. is an Iowa corporation operating out of Moline, Illinois, and Jeff O'Rourke is a citizen of Iowa; the defendants--Nesbitt Burns, Inc., Andreas F. Kiedrowski, and John C. Dunn-- are Canadian citizens. When the O'Rourkes failed to obtain service, the case was dismissed with prejudice for failure to prosecute, rather than without prejudice pursuant to Rule 4(m) of the Federal Rules of Civil Procedure.1 Therein lies the issue, which was not raised in the district court until the filing of a motion to reconsider the denial of a Rule 60 motion for relief from the judgment, a judgment which, by the way, was entered 7 months earlier and 233 days after the complaint was filed. Let's just say that the O'Rourkes' side did not seem to be paying much attention to this case, and that inattention severely limits the scope of review we can offer to this appeal.

The O'Rourkes filed the complaint on December 30, 1997, and mailed a summons to the president of Nesbitt Burns, Inc. at its offices in Toronto, Ontario, Canada, along with a request for a waiver of service pursuant to Rule 4(d). Counsel for the defendants, who was from the same city as plaintiffs' counsel--Rock Island, Illinois-- responded by letter, pointing out that in his view the complaint did not state a claim under the Illinois securities regulation at issue; the letter also confirmed an agreed extension of time to respond to the request for waiver of service. Counsel said:

You also indicated that we could have an extension of time in which to respond to the Request for Waiver of Service of Summons. After you have had a chance to review the information provided [regarding whether a valid cause of action was alleged], please let me know if you are still interested in pursuing this case. If you are, then we will in all probability return the Request for Waiver of Service of Summons and proceed with the appropriate motion or answer.

The O'Rourkes' counsel never responded to this letter, nor did he have a summons issued and served.

On May 7, 1998, 128 days after the complaint was filed, a magistrate judge set the case for a "lack of prosecution/status hearing" to be held on June 3. At the hearing, O'Rourke's counsel said he would obtain a summons, but he did not do so. Forty days later, on July 13, 1998 (195 days after the complaint was filed), the magistrate judge ordered plaintiffs to show cause in writing in 7 days why their case should not be dismissed. Again, no response.

On July 31, 1998, the magistrate issued a report and recommendation that the case be dismissed for lack of prosecution. The parties were given 10 days to object. No objections were filed. On August 21, 1998, 233 days after the complaint was filed, the district judge entered an order dismissing the case with prejudice. On August 24 a

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separate judgment was entered and mailed to the parties.

The O'Rourkes' counsel made no effort to have the dismissal transformed into one without prejudice, which could have been attempted, of course, with a motion to alter or amend the judgment, pursuant to Rule 59. Nor did the O'Rourkes appeal. In fact, they did nothing at all until March 16, 1999, when they filed a motion under Rule 60 claiming excusable neglect for being "remiss in failing to serve summons within 120 days, as required by Rule 4(m) . . . ." The delay in filing the Rule 60 motion was, as they put it, "[e]ither because they had not received a copy of the court's Order of August 21, 1998, or because they had not carefully reviewed that Order, plaintiffs' counsel were not aware of the dismissal 'with prejudice' until they received and reviewed a copy of it in late February 1999." The district court found it "somewhat...

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