Cerajeski v. Zoeller

• Decision Date: 24 July 2015
• Docket Number: No. 15–1313.,15–1313.
• Citation: 794 F.3d 828
• Parties: Katherine CERAJESKI, Guardian for Walter CERAJESKI, Plaintiff–Appellant, v. Greg ZOELLER, Attorney General of the State of Indiana, et al., Defendants–Appellees.
• Court: U.S. Court of Appeals — Seventh Circuit

794 F.3d 828

Katherine CERAJESKI, Guardian for Walter CERAJESKI, Plaintiff–Appellant

v.Greg ZOELLER, Attorney General of the State of Indiana, et al., Defendants–Appellees.

No. 15–1313.

United States Court of Appeals, Seventh Circuit.

Argued June 2, 2015.

Decided July 24, 2015.

Terry Rose Saunders, Saunders Law Firm, Arthur Theodore Susman, Susman, Heffner & Hurst, Chicago, IL, for Plaintiff–Appellant.

Caryn M. Nieman, Assistant Attorney General, Frances Barrow, Attorney, Office of the Attorney General, Indianapolis, IN, for Defendant–Appellee.

Before POSNER, EASTERBROOK, and SYKES, Circuit Judges.

Opinion

POSNER, Circuit Judge.

This appeal is a sequel to our decision reported at 735 F.3d 577 (7th Cir.2013), in which we held unconstitutional a provision of the Indiana Unclaimed Property Act, Ind.Code §§ 32–34–1–1 et seq. (Indiana's version of the Uniform Unclaimed Property Act) that authorized the state to confiscate private property without any compensation—let alone just compensation—to the owner.

The Act stated that “property” is “presumed abandoned if the owner or apparent owner has not communicated in writing with the holder concerning the property or has not otherwise given an indication of interest in the property” within a specified period varying according to the type of property. § 32–34–1–20(c). By filing a valid claim with the state the owner could reclaim the property at any time up to 25 years after it was delivered to the attorney general. § 3234–1–36. (After that, if still unclaimed, the property escheated to the state.) But he was entitled only to his principal and not to any interest earned on it. We held that the state's retention of the interest was a taking that violated the Fifth Amendment's just compensation clause (deemed applicable to actions by state governments by interpretation of the Fourteenth Amendment's due process clause) because the owner was paid nothing for his lost interest.

Our opinion concluded by stating that “the judgment is reversed and the case remanded for further proceedings consistent with this opinion. The plaintiff is entitled to just compensation from the state when she files her claim to [Walter] Cerajeski's account [remember that the plaintiff is his guardian], but the amount of that just compensation has yet to be determined. The plaintiff has also sought an injunction—why we don't know; and injunctive relief may well be unavailable in this case. ‘Equitable relief is not available to enjoin an alleged taking of private property for a public use.’ Ruckelshaus v. Monsanto Co., 467 U.S. 986, 1016, 104 S.Ct. 2862, 81 L.Ed.2d 815 (1984). The availability and propriety of injunctive relief are other issues to be resolved by the district judge in the first instance.”

So the case returned to the district court. Several months later the state, having in response to our decision amended its Unclaimed Property Act to provide for payment of interest on property to which the owner had made a valid claim, Ind.Code §§ 32–34–1–9.1, 32–34–1–30 (effective July 1, 2014), moved to dismiss the suit as moot. The plaintiff, objecting, asked the district court, pursuant to our judgment, to enter a declaratory judgment and also to award the attorneys' fees incurred in prosecuting the appeal that had resulted in our judgment. (The plaintiff is not seeking an award of fees for any other part of the litigation in either the district court or this court.) The district judge refused, dismissed the suit as moot, and later denied the motion for attorneys' fees primarily on the ground that, the suit having been dismissed, the plaintiff was not a prevailing party. The plaintiff has appealed.

The district judge was annoyed at the plaintiff because on remand from our court she'd asked permission to file an amended complaint that would have converted the suit to a class action. She did that because of intimations that the state would, despite our decision, compensate only the plaintiff, forcing the multitude of similarly situated creditors to bring their own suits. But she withdrew that request (as distinct from her request for an award of attorneys' fees) when the state amended the Unclaimed Property Act. For the amendment mooted her federal claim for damages by entitling her to payment by the state of the interest that she had sought in her lawsuit.

By amending the statute the state conceded that it owed the interest to the plaintiff. But its concession could not deprive the plaintiff of her status as the prevailing party in the litigation. Our decision had preceded the amendment of the statute and by holding that she was entitled to damages equal to the unpaid interest had made her the prevailing party. See National Rifle Association of America, Inc. v. City of Chicago, 646 F.3d 992, 994 (7th Cir.2011). She would not have been the prevailing party had the state, as in Zessar v. Keith, 536 F.3d 788, 797 (7th Cir.2008), amended its law before our decision—that would have mooted the case and we would have had to dismiss it for want of jurisdiction, thus not deciding the merits and not ordering any relief.

“[E]nforceable judgments on the merits ... create the ‘material alteration of the legal relationship of the parties' necessary to permit an award of attorney's fees” under federal statutes (in this case 42 U.S.C. § 1988(b) ) that authorize such awards. Buckhannon Board & Care Home, Inc. v. West Virginia Dept. of Health & Human Resources, 532 U.S. 598, 604, 121 S.Ct. 1835, 149 L.Ed.2d 855 (2001). “[R]elief need not be judicially decreed in order to justify a fee award under § 1988. A lawsuit sometimes produces voluntary action by the defendant that affords the plaintiff all or some of the relief he sought through a judgment—e.g., a monetary settlement or a change in conduct that redresses the plaintiff's grievances.” Hewitt v. Helms, 482 U.S. 755, 760–61, 107 S.Ct. 2672, 96 L.Ed.2d 654 (1987). That is what happened in this case. It is not a case in which by filing a lawsuit a plaintiff prompts a change in law—the “catalyst theory” of prevailing-party status rejected in the Bu...