International College of Surgeons v. City of Chicago

• Decision Date: 06 August 1998
• Docket Number: 95-1315,Nos. 95-1293,s. 95-1293
• Parties: INTERNATIONAL COLLEGE OF SURGEONS, a not-for-profit corporation, United States section of the International College of Surgeons, a not-for-profit corporation, Robin Construction Corporation, a for-profit corporation, Plaintiffs-Appellants, v. CITY OF CHICAGO, a municipal corporation, Commission on Chicago Landmarks, Administrative Agency of the City of Chicago, Peter C.B. Bynoe, Commission Chairman, et al., Chicago Plan Commission, and its Commissioners, Reuben L. Hedlund, et al., Defendants-Appellees.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 356

153 F.3d 356

INTERNATIONAL COLLEGE OF SURGEONS, a not-for-profit corporation, United States section of the International College of Surgeons, a not-for-profit corporation, Robin Construction Corporation, a for-profit corporation Plaintiffs-Appellants, v. CITY OF CHICAGO, a municipal corporation, Commission on Chicago Landmarks, Administrative Agency of the City of Chicago, Peter C.B. Bynoe, Commission Chairman, et al. Chicago Plan Commission, and its Commissioners, Reuben L Hedlund, et al., Defendants-Appellees.

Nos. 95-1293, 95-1315.

United States Court of Appeals, Seventh Circuit.

Argued Nov. 6, 1995.

Decided Aug. 1, 1996.

On Remand from the Supreme Court of the United States, Dec.

15, 1997.

Argued on Remand June 3, 1998.

Decided Aug. 6, 1998.

Richard J. Brennan (argued), Kimball R. Anderson, Darcy J. Bogenrief, Thomas C. Cronin, Winston & Strawn, Chicago, IL, David B. Love, Seyfarth, Shaw, Fairweather & Geraldson Daniel L. Houlihan, Houlihan & Associates, for Plaintiffs-Appellants.

Lawrence Rosenthal, Benna R. Solomon (argued), Anne Berleman Kearney, Sonja D. Rajkovich, Brian L. Crowe, Office of the Corporation Counsel, Appeals Div., Chicago, IL, for Defendants-Appellees.

Jeffrey M. Glass, Reuben L. Hedlund, Hedlund & Hanley, Chicago, IL, for Amici Curiae.

Before BAUER, EASTERBROOK and RIPPLE, Circuit Judges.

RIPPLE, Circuit Judge.

This case is before the court on remand from the Supreme Court of the United States. In our earlier opinion, we reversed the judgment of the district court and remanded the case with instructions that it be remanded to state court on the ground that the district court lacked jurisdiction. See International College of Surgeons v. City of Chicago, 91 F.3d 981 (7th Cir.1996). The Court reversed our decision and held that the district court had jurisdiction over this case. See City of Chicago v. International College of Surgeons, 522 U.S. 156, 118 S.Ct. 523, 139 L.Ed.2d 525 (1997). The Supreme Court then remanded the case to this court and directed us to consider whether abstention principles required the district court to decline to exercise jurisdiction over this case and whether the district court should have exercised its discretion to decline to exercise supplemental jurisdiction over this case pursuant to 28 U.S.C. § 1367(c). In their statement filed pursuant to Circuit Rule 54, the parties requested that we permit rebriefing and oral argument. We accepted that recommendation and the new briefs have been considered and the case heard at oral argument. We conclude that, under prevailing principles, the district court was not required to abstain from exercising jurisdiction over this case. In addition, we hold that the appellants, International College of Surgeons ("ICS") and Robin Construction Corporation, have waived their contention that the district court should have declined to exercise supplemental jurisdiction pursuant to 28 U.S.C. § 1367(c); that contention was not raised in the district court. Accordingly, we reach the merits of this case and affirm the judgment of the district court.

I BACKGROUND

We shall assume familiarity with the facts set out in our earlier opinion, see International College of Surgeons, 91 F.3d at 985-86, and in the opinion of the Supreme Court, see International College of Surgeons, 118 S.Ct. at 527-29. We shall limit our rendition here to the matters at hand.

ICS seeks to demolish its two buildings on Lake Shore Drive in Chicago. The City denied ICS' requests for demolition permits. ICS then filed two lawsuits in state court contesting the City's denial on the ground that the City's actions violated both the state and federal constitutions. In addition, ICS sought on-the-record review of the determinations of the City's Landmarks Commission with respect to its application for demolition permits.

The City removed those actions to federal court. Those actions ultimately were consolidated with a declaratory judgment action filed by ICS in federal district court. On December 30, 1994, the district court entered summary judgment in favor of the City. The court held that the City ordinance at issue did not violate either the federal or state constitution and that the findings of the City's Landmarks Commission were supported by the evidence and were not arbitrary and capricious. The district court dismissed the declaratory judgment case with prejudice as moot but with leave to reinstate if the district court's judgments in the other two cases were reversed or remanded on appeal.

In our earlier opinion, we held that a federal district court lacked jurisdiction over a case containing state law claims for on-the-record review of local administrative action. See International College of Surgeons, 91 F.3d at 986-94. Accordingly, we reversed the judgment of the district court with instructions to remand the case to the Circuit Court of Cook County. See id. at 994. The Supreme Court, however, held that a case containing claims that local administrative action violates federal law, but also containing state law claims for on-the-record review of the administrative findings, can be removed to federal district court because such state law claims fall within the federal courts' supplemental jurisdiction under 28 U.S.C. § 1367(a). See International College of Surgeons, 118 S.Ct. at 529-33. The Court therefore reversed our earlier judgment and remanded the case to this court for further proceedings. On remand, the Court has directed us to consider two alternative contentions raised by ICS: (1) whether the district

court should have abstained from exercising jurisdiction over ICS' state law claims under either the Burford ¹ or Pullman ² abstention doctrines; and (2) whether the district court should have exercised its discretion to decline supplemental jurisdiction pursuant to 28 U.S.C. § 1367(c).

II DISCUSSION

A.

We turn first to ICS' contention that the district court should have abstained from adjudicating this matter under either the Burford or Pullman abstention doctrines. As an initial matter, we note that the Supreme Court has recently stressed that the federal courts have a strict duty to exercise the jurisdiction conferred upon them by Congress. See Quackenbush v. Allstate Ins. Co., 517 U.S. 706, 716, 116 S.Ct. 1712, 135 L.Ed.2d 1 (1996). For this reason, the doctrine of abstention is "an extraordinary and narrow exception to the duty of a District Court to adjudicate a controversy properly before it" and may be invoked only in those "exceptional circumstances" in which surrendering jurisdiction "would clearly serve an important countervailing interest." County of Allegheny v. Frank Mashuda Co., 360 U.S. 185, 188-89, 79 S.Ct. 1060, 3 L.Ed.2d 1163 (1959). We review a district court's decision whether to abstain from exercising jurisdiction for an abuse of discretion. See A.G. Edwards & Sons, Inc. v. Public Bldg. Comm'n, 921 F.2d 118, 121 (7th Cir.1990).

1. Waiver

In the City's view, we need not reach the merits of ICS' abstention arguments because ICS has waived those arguments. ICS urged the district court to abstain only when seeking remand of the first of its two state court complaints. The district court declined to reach the merits of ICS' abstention arguments at that nascent stage. ICS did not renew those arguments in the district court; nor did it invoke abstention principles before this court in its earlier appeal. Instead, it next raised its abstention arguments before the Supreme Court. As we noted earlier, the Court directed us to consider those arguments on remand. ³

It is well established that this court may raise the doctrines of Burford and Pullman abstention sua sponte and that the failure of the parties to raise those doctrines at any point in the proceedings is no impediment to our consideration of the applicability of those doctrines. ⁴ See Bellotti v. Baird, 428 U.S. 132, 143-44 n. 10, 96 S.Ct. 2857, 49 L.Ed.2d 844 (1976); Barichello v. McDonald, 98 F.3d 948, 955 (7th Cir.1996); In re McCarthy Bros. Co., 83 F.3d 821, 830 (7th Cir.), cert. denied, --- U.S. ----, 117 S.Ct. 361, 136 L.Ed.2d 253 (1996); General Ry. Signal Co. v. Corcoran, 921 F.2d 700, 709 (7th Cir.1991); Waldron v. McAtee, 723 F.2d 1348, 1351 (7th Cir.1983). Under Pullman abstention, a court abstains in order to avoid unnecessary constitutional adjudication. See infra Part II.A.3. Accordingly, when a court abstains under that doctrine, "it is not seeking to protect the rights of one of the parties; it is seeking to promote a harmonious federal system by avoiding a collision between the federal courts and state (including local) legislatures." Waldron, 723 F.2d at 1351. Like the Pullman doctrine, the Burford doctrine is not concerned with the rights of the parties in the case at hand but rather is inspired by concerns of federalism. Under that doctrine, the federal courts will abstain from deciding unsettled questions of state law that relate to a complex state regulatory scheme. See infra Part II.A.2. Therefore, in light of the important institutional concerns that imbue the Pullman and Burford doctrines, we may consider the appropriateness of abstention under either doctrine sua sponte and the failure of a party to raise these issues in the district court will not necessarily operate as waiver. We now turn to the merits of ICS' abstention arguments.

2. Burford Abstention

ICS first contends that the district court abused its discretion by failing to abstain under the Burford abstention doctrine. That doctrine has its genesis in the Supreme Court's holding in Burford v. Sun Oil Co., 319 U.S. 315, 63 S.Ct. 1098, 87 L.Ed. 1424 (1943). In Burford, the Sun Oil Company filed a lawsuit in federal court attacking the validity of an order of the Texas Railroad Commission granting Burford a permit to drill four oil wells in an East Texas oil field. Sun Oil sought to enjoin the commission's order as a denial of due process and as a violation of...