Brown v. Mesirow Stein Real Estate, Inc.

• Decision Date: 19 June 1998
• Docket Number: No. 97 C 6906.,97 C 6906.
• Citation: 7 F.Supp.2d 1004
• Parties: Lori G. BROWN, Plaintiff, v. MESIROW STEIN REAL ESTATE, INC., Richard Stein, and Richard Hanson, Defendants.
• Court: U.S. District Court — Northern District of Illinois

Page 1004

7 F.Supp.2d 1004

Lori G. BROWN, Plaintiff, v. MESIROW STEIN REAL ESTATE, INC., Richard Stein, and Richard Hanson, Defendants.

No. 97 C 6906.

United States District Court, N.D. Illinois, Eastern Division.

June 19, 1998.

Fay Clayton, Robert Lawrence Margolis, Robinson, Curley & Clayton, P.C., Chicago, IL, for Plaintiff.

Joseph Michael Gagliardo, Maureen Ann Gorman, Thomas Stephen Bradley, Jennifer Anne Naber, Laner, Muchin, Dombrow, Becker, Levin & Tominberg, Ltd., Chicago, IL, for Defendants.

OPINION AND ORDER

NORGLE, District Judge.

Before the court is Defendants' Motion for Reconsideration or, Alternatively, for Certification for Interlocutory Appeal. For the following reasons, Defendants' motion is denied.

I. BACKGROUND

On October 2, 1997, Plaintiff, Lori Brown, filed a complaint, alleging a claim for gender discrimination in violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e-2, et seq., and several state claims. On December 1, 1997, Defendants, Mesirow Stein Real Estate, Inc. ("Mesirow Stein"), Richard Stein, and Richard Hanson, moved to dismiss Plaintiff's complaint for lack of subject matter jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(1).

Specifically, Defendants argued that the court lacks subject matter jurisdiction over Plaintiff's Title VII claim because Mesirow Stein was not Plaintiff's employer. In support of their argument, Defendants presented evidence to show that Plaintiff was an independent contractor, and not an employee. In response, Plaintiff presented evidence to show that she was in fact an employee for Mesirow Stein.

On April 20, 1998, the court found that the parties erroneously assumed that Mesirow Stein must meet the definition of "employer" for federal subject matter jurisdiction to exist under Title VII. Accordingly, the court converted Defendants' 12(b)(1) motion to dismiss into a 12(b)(6) motion to dismiss, and denied that motion.

On May 4, 1998, Defendants filed the present motion for reconsideration or, alternatively, for a certificate for an interlocutory appeal pursuant to 28 U.S.C. § 1292(b).

II. DISCUSSION

A. Motion for Reconsideration

"`Motions for reconsideration serve a limited function: to correct manifest errors of law or fact or to present newly discovered evidence.'" Caisse Nationale De Credit Agricole v. CBI Indus., Inc., 90 F.3d 1264, 1269 (7th Cir.1996) (citations omitted).

On April 20, 1998, the court concluded that Plaintiff was not required to show that Mesirow Stein qualified as her employer for subject matter jurisdiction to exist, and converted Defendants' 12(b)(1) motion into a 12(b)(6) motion. Plaintiff did not argue that Defendants mischaracterized the issue of whether Mesirow Stein was an employer as a jurisdictional issue. Nonetheless, the court did not find it prudent to proceed to the merits of Defendants' 12(b)(1) motion given the importance of "giving a full hearing to those who are attempting to raise claims in federal court, even if those claims are eventually unsuccessful." LaSalle Nat'l Trust, N.A. v. ECM Motor Co., 76 F.3d 140, 144 (7th Cir.1996). "From the more pragmatic side, the way in which the facts are handled under Fed.R.Civ.P. 12(b)(1) differs significantly from the correct approach for purposes of Rule 12(b)(6)" and Rule 56. Id.

In converting Plaintiff's 12(b)(1) motion into a 12(b)(6) motion, the court relied on Ost v. West Suburban Travelers Limousine, 88 F.3d 435 (7th Cir.1996). In Ost, the Seventh Circuit recognized that it has previously "characterized the issue of whether a defendant is an `employer' as a matter of a federal court's subject matter jurisdiction." Id. at 438, n. 1 (citing Rogers v. Sugar Tree Prods., Inc., 7 F.3d 577, 579 (7th Cir.1993)). However, the Seventh Circuit stated that it is clear after its recent decision in EEOC v. Chicago Club, 86 F.3d 1423 (7th Cir.1996), that "a plaintiff's failure to establish that a defendant is an `employer' does not divest federal courts of the power to hear the plaintiff's case. Rather, even when the defendant's status as an employer is in dispute, the case `is well within the statutory grant of federal question jurisdiction.'" Id. (quoting Chicago Club, 86 F.3d at 1428); see also Burnett v. Intercon Sec. Ltd., No. 97 C 3385, 1998 WL 142395, at *1 (N.D.Ill. March 24, 1998) (J. Norgle) ("As a preliminary matter, the court notes that contrary to [defendant's] assertion, [plaintiff's] failure to establish defendant as an `employer' under the ADEA does not divest the court of subject matter jurisdiction.").

Plaintiff argues that the court erroneously relied on Ost, and erroneously characterized the issue of whether Defendant is an "employer" as a non-jurisdictional issue. Plaintiff argues that it is well settled that one panel of the Seventh Circuit cannot overrule another panel of the Seventh Circuit; the court agrees. See Williams v. Chrans, 50 F.3d 1356, 1358 (7th Cir.1995) ("[T]he members of this panel are precluded by the doctrines of stare decisis and precedent from taking a position different from that articulated by [other] panels."). Plaintiff further argues that the Seventh Circuit's decision in Rogers, 7 F.3d at 579, which held that the court lacks subject matter jurisdiction unless the defendant falls within the definition of an "employer," is therefore still the law of this circuit.

However, "[f]or stare decisis to be applied, an issue of law must have been heard and decided. If an issue is not argued, ... the decision does not constitute a precedent to be followed in subsequent cases in which the same issue arises." James Wm. Moore et al., Moore's Federal Practice § 134.04[2] (3d ed.1997); see also Horwitz v. Alloy Automotive Co., 992 F.2d 100, 103 (7th Cir.1993) (In rejecting plaintiff's request to overrule a prior panel's decision, the Seventh Circuit stated that the prior "panel fully considered the issues, and no subsequent developments draw the reasoning into question.").

While it is true that the Seventh Circuit in Rogers opined that federal subject matter jurisdiction did not exist if plaintiff failed to show that defendant met the definition of an "employer," 7 F.3d at 579, it is questionable whether the Seventh Circuit actually "heard and decided" this issue of law. Neither the District Court or the Seventh Circuit explained why the issue of defendant's "employer" status is a jurisdictional prerequisite. See Rogers v. Sugar Tree Products, Inc. 824 F.Supp. 755 (N.D.Ill.1992), aff'd, 7 F.3d 577; see also EEOC v. St. Francis Xavier Parochial School, 117 F.3d 621, 623-24 (D.C.Cir. 1997).

In Rogers, the defendant filed a motion to dismiss for lack of subject matter jurisdiction. 824 F.Supp. at 758. There is no indication that the plaintiff argued that the defendant mischaracterized the issue as a matter of subject matter jurisdiction. Id. It is well settled in the Seventh Circuit that "[a] litigant who fails to press a point by supporting it with pertinent authority, or by showing why it is sound despite a lack of supporting authority ... forfeits the point." Speth v. Capitol Indem. Corp., 139 F.3d 902 (Table), 1998 WL 104653, at *1 (7th Cir. Mar. 4, 1998) (citation omitted). Accordingly, if the parties did not argue this issue of law, subsequent panels of the Seventh Circuit are not precluded by the doctrines of stare decisis and precedent from taking a position different from that articulated by the panel in Rogers.¹ Cf. Horwitz v. Alloy Automotive Co., 992 F.2d 100, 103 (7th Cir. 1993); see also James Wm. Moore et al., Moore's Federal Practice § 134.04[2] (3d ed.1997).

Furthermore, even assuming that stare decisis does apply, the court is not required to blindly follow Rogers in disregard of the more recent opinions of the Seventh Circuit. Cf. Olson v. Paine, Webber, Jackson & Curtis, Inc., 806 F.2d 731, 734 (7th Cir.1986) ("Ordinarily a lower court has no authority to reject a doctrine developed by a higher one.... If, however, events subsequent to the last decision by that court, or statutory changes — make it almost certain that the higher court would repudiate the doctrine if given a chance to do so, the lower court is not required to adhere to the doctrine.").

After Rogers, the Seventh Circuit in Chicago Club held that the plaintiff need not prove that defendant is an employer under Title VII for subject matter jurisdiction to exist. Chicago Club, 86 F.3d at 1428; see also Ost, 88 F.3d at 438, n. 1. This is consistent with other circuits. See, e.g., St. Francis Xavier Parochial School, 117 F.3d at 623-24 ("If the [defendants] are not covered under the ADA, this fact does not preclude the district court from asserting jurisdiction —although of course it would be fatal to the [plaintiff's] claim on the merits."); Garcia v. Copenhaver, Bell & Assocs., 104 F.3d 1256, 1261-64 (11th Cir.1997) ("[I]f an attack on subject matter jurisdiction also implicates an element of the cause of action, [e.g., defendant is an employer], then: `[T]he proper course of action for the district court ... is to find that jurisdiction exists and deal with the objection as a direct attack on the merits of the plaintiff's case....'").

In Chicago Club, the defendant argued:

The article III courts have federal question jurisdiction over cases or controversies "arising under the Constitution, laws, or treaties of the United States." Title VII applies to, among others, employers within the definition of § 2000e(b). If the [defendant] is not an employer under § 2000e(b), then it owes no fidelity to Title VII. Because no case or controversy involving the defendant can arise under Title VII, the article III courts lack federal question jurisdiction.

86 F.3d at 1428 (citations omitted).²

The Seventh Circuit disagreed, and concluded that the defendant's syllogism "proves unacceptable consequences." Id. The Seventh Circuit explained:

[The defendant's syllogism] suggests that a plaintiff must prove, as a matter of...