Keeton v. Morningstar, Inc.

• Decision Date: 13 January 2012
• Docket Number: No. 11–2298.,11–2298.
• Citation: 95 Empl. Prac. Dec. P 44403,114 Fair Empl.Prac.Cas. (BNA) 269,667 F.3d 877
• Parties: Doris KEETON, Plaintiff–Appellant, v. MORNINGSTAR, INC., Defendant–Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

114 Fair Empl.Prac.Cas. (BNA) 269

667 F.3d 877

95 Empl. Prac. Dec. P 44,403

Doris KEETON, Plaintiff–Appellant,

v.MORNINGSTAR, INC., Defendant–Appellee.

No. 11–2298.

United States Court of Appeals, Seventh Circuit.

Argued Dec. 8, 2011.Decided Jan. 13, 2012.

Armand LaValle Andry, Sr. (argued), Attorney, Chicago, IL, for Plaintiff–Appellant.

Lisa Anne McGarrity, Abizer Zanzi (argued), Attorneys, Franczek Radelet P.C., Chicago, IL, for Defendant–Appellee.

Before MANION, ROVNER and TINDER, Circuit Judges.

ROVNER, Circuit Judge.

Doris Keeton filed an employment discrimination suit against her employer, Morningstar, Inc., alleging race discrimination and retaliation in violation of 42 U.S.C. § 1981 and 42 U.S.C. § 2000e, et seq. Keeton failed to file a timely response to Morningstar's motion for summary judgment, and the court granted judgment in favor of Morningstar. Keeton contends that the court erred in refusing to accept her late filing of a response to Morningstar's motion, and that Morningstar was not entitled to summary judgment. We affirm.

I.

Because Keeton failed to file a response to Morningstar's Local Rule 56.1 statement of facts in the district court, we credit Morningstar's uncontroverted version of the facts to the extent that it is supported by evidence in the record. FTC v. Bay Area Business Council, Inc., 423 F.3d 627, 634 (7th Cir.2005) (when a party fails to comply with the local rule requiring a response to a statement of undisputed material facts, the court may rely on the opposing party's statement to the extent that it is supported by citations to relevant evidence in the record). Morningstar is a company that provides independent investment research. Keeton, who is African–American, began working for the company in August 2002 as a “Compliance Consultant” in the legal department. The company also employed two other Compliance Consultants, Lisa Derner and Rita Bentzler, who are both white. All three reported to Morningstar's Chief Compliance Officer, Scott Schilling. Each Compliance Consultant was assigned to one of Morningstar's three subsidiaries. Keeton was assigned to Ibbotson Associates. As a Compliance Consultant, Keeton was charged with ensuring that Ibbotson complied with all federal securities laws.

When hiring new employees, Morningstar determines its initial salary offers based on market factors, including the availability of qualified candidates and their salary requirements. The company does not have formal policies in place for determining salaries of Compliance Consultants, but generally does not factor seniority into salary decisions. All three Compliance Consultants were lateral hires with several years of experience at other firms before coming to Morningstar. All three were offered higher base salaries than they were making with their former employers. Derner was the last of the three to join Morningstar. At the time of Derner's hiring in April 2008, Keeton had a base salary of $68,000 and Bentzler was earning $65,000. Derner, who earned $68,000 per year at her former employer, demanded a base salary of $70,000, and Morningstar met the demand.

In February 2010, Morningstar's General Counsel sought Schilling's input regarding potential salary increases for the three Compliance Consultants. Based on their 2009 performance evaluations, Schilling recommended salary increases for all three women, but suggested to the General Counsel that Keeton receive the smallest increase because her performance review identified several areas for improvement. As of July 2010, Keeton's base salary was raised to $70,000, Derner's salary was increased to $73,000 and Bentzler's salary was set at $70,150. Keeton thus went from the middle of the group to the bottom by $150 per year.

In February 2010, Keeton and Bentzler each complained to company management about the other. Keeton first reported to Schilling and to Morningstar's human resources director, Cathi Rezy, that Bentzler was watching her and keeping track of her activities on a yellow notepad. Rezy investigated the complaint and interviewed Bentzler but never found the notepad. Subsequently, Bentzler complained that Keeton was engaged in workplace misconduct. Rezy did not interview Keeton regarding Bentzler's allegations, but no action was ever taken against Keeton because of Bentzler's complaint. Morningstar resolved the dispute between the two employees by allowing them to work away from each other, with personnel from their assigned subsidiaries rather then with the compliance team. Keeton believed that Morningstar's management displayed favoritism towards Bentzler during these incidents by spending more time speaking with her and consoling her. Keeton also found the workplace more tense after these incidents.

Approximately one month later, in March 2010, Keeton went on disability leave for a medical problem unrelated to the lawsuit. In June 2010, Keeton filed a complaint with the Equal Opportunity Employment Commission (“EEOC”), alleging for the first time that the company discriminated against her on the basis of race by paying her less than a non-minority co-worker who had less seniority and fewer qualifications. After receiving her right-to-sue letter from the EEOC, Keeton filed this lawsuit in August 2010. In her complaint, Keeton alleged that Morningstar discriminated against her by paying her less than similarly situated white employees, and that the company retaliated against her when she complained about being treated differently than her white co-workers. In November 2010, Keeton responded to a discovery request by producing documents to Morningstar. The documents included a number of private, confidential emails among and between other Morningstar employees, including attorney-client privileged documents. Morningstar conducted an investigation to determine how Keeton came to be in possession of these documents. In January 2011, in response to questions from an internal auditor at Morningstar, Keeton stated that she came across the emails while using Morningstar's email surveillance software for legitimate business purposes. Morningstar concluded its investigation with a determination that, although Keeton did not have the authority to access the emails and had used poor judgment in her use of the surveillance software, she had not intended to violate company policy. Morningstar therefore took no disciplinary action against Keeton on the basis of this incident. Keeton amended her complaint after this incident to add a count for retaliation based on Morningstar's actions in investigating the email matter.

On March 25, 2011, after the close of discovery, Morningstar moved for summary judgment. The district court set a briefing schedule that required Keeton to respond to the motion by May 3, 2011, and Morningstar to reply by May 17, 2011. The deadline that the court set for Keeton's response came and went with no acknowledgement or action from Keeton. Nine days later, on May 12, the district court contacted Keeton's attorney to determine whether Keeton intended to file a response. Keeton's attorney assured the court that a response would be filed the following day, May 13. No brief was filed on May 13. Ten days later, on May 23, the district court entered judgment in favor of Morningstar. Twenty-three minutes before the court entered its order granting judgment, Keeton filed a motion for leave to file her summary judgment response instanter. Later that afternoon, the court denied Keeton's motion as moot. Keeton appeals.

II.

On appeal, Keeton contends that the district court erred in denying as moot her motion for leave to file her summary judgment response instanter. Keeton also contests the court's judgment on the merits.

A.

Keeton argues that the court clearly erred when it ruled that her motion for leave to file her summary judgment response was moot. She contends that a case is moot only when there are no live issues. Her case was not moot, she continues, because her motion was filed before the court granted judgment in favor of Morning-star. It is true that a case is moot when the issues presented are no longer live or the parties lack a legally cognizable interest in the outcome. United States Parole Commission v. Geraghty, 445 U.S. 388, 396, 100 S.Ct. 1202, 63 L.Ed.2d 479 (1980); Gates v. City of Chicago, 623 F.3d 389, 413 (7th Cir.2010). But Keeton fundamentally misunderstands the district court's action and the meaning of the court's words. The court did not find that the case was moot in the sense that it was non-justiciable or that the court lacked jurisdiction over the claims. Indeed, the court decided the case on the merits.

The court found instead that Keeton's motion was moot in the procedural sense because it came too late. The court's entry of the judgment and Keeton's filing of her motion occurred virtually simultaneously. The docketing of the motion and the docketing of the court's judgment were separated by a mere twenty-three minutes. Although there is no way to tell from the docket whether the court became aware of Keeton's motion before or after the entry of the judgment, the end result is the same. The parties agree that the motion was filed before the judgment was entered. “Final judgment necessarily denies pending motions[.]” Dunn v. Truck World, Inc., 929 F.2d 311, 313 (7th Cir.1991). Thus, Keeton's motion to file a summary judgment response was implicitly denied by the final judgment. The court's Memorandum Opinion and Order may also be read as denying Keeton's motion and disposing of any pending motions. See Keeton v. Morningstar, Inc., 2011 WL 1990448 (May 23, 2011) (hereafter “Opinion”). The court granted Morningstar's motion for summary judgment and “dismisse[d] this lawsuit in its entirety.” Opinion, at *1. Moreover, in a footnote, the court specified that it would deem admitted the defendant's Local Rule 56.1(a)(3) statement of facts because Keeton had failed to file a Local ...