Mayes v. City of Hammond, Ind.
| Decision Date | 15 August 2008 |
| Docket Number | No. 2:03-CV-379-PRC.,2:03-CV-379-PRC. |
| Citation | 631 F.Supp.2d 1082 |
| Parties | Larry MAYES, Plaintiff, v. CITY OF HAMMOND, INDIANA, et al., Defendants. |
| Court | U.S. District Court — Northern District of Indiana |
Barry C. Scheck PHV, Jennifer E. Laurin PHV, Nick J. Brustin PHV, Cochran Neufeld & Scheck LLP, New York, NY, John L. Stainthorp PHV, People's Law Office, Chicago, IL, for Plaintiff.
David C. Jensen, Karol A. Schwartz, Robert J. Feldt, Eichhorn & Eichhorn, William Joseph O'Connor, William J. O'Connor Attorney at Law, Hammond, IN, Steven A. Kurowski, Law Office of Steven A. Kurowski, Schererville, IN, for Defendants.
This matter is before the Court on an order from the United States Court of Appeals for the Seventh Circuit [DE 546], issued on July 15, 2008, and filed with this Court on July 17, 2008. The Court of Appeals has remanded this case for the limited purpose of allowing this Court to inform the Court of Appeals whether it is inclined to vacate the jury verdict and judgment entered in this case. On August 8, 2008, upon order of the Court, the parties filed with this Court a Joint Brief in Support of the Parties' Request for Vacatur of the Verdict and Judgment as Condition Precedent to Settlement.
Having balanced the equities of the private and public interests implicated by the instant request for vacatur, the Court now ADVISES the United States Court of Appeals for the Seventh Circuit that it is inclined to grant the joint request of the parties to vacate the August 22, 2006 jury verdict and the August 25, 2006 judgment in this case as a condition of their proposed settlement agreement. The basis for the Court's decision is set forth below.
Plaintiff Larry Mayes filed his civil rights Complaint with this Court on September 3, 2003. On July 5, 2006, the Court issued an Order granting in part and denying in part the City of Hammond's Motion for Summary Judgment, granting Defendant Raymond Myszak's Motion for Summary Judgment, granting Defendant Frank DuPey's Motion for Summary Judgment, and granting in part and denying in part Defendant Michael Solan's Motion for Summary Judgment.
A jury trial was held, and on August 22, 2006, the jury returned a verdict in favor of Mr. Mayes and against Defendants City of Hammond and Solan in the amount of $9 million. Immediately following the jury verdict, the Court ordered the Clerk of Court to enter judgment on the verdict, which the Clerk of Court entered on August 25, 2006.
Cross appeals were then filed with the United States Court of Appeals for the Seventh Circuit, the appeals were consolidated, the parties fully briefed the appeals, and oral arguments were heard by the panel. On March 10, 2008, the parties informed this Court during a telephonic conference that a settlement had been reached among the parties in the amount of $4.5 million. On March 25, 2008, an order from the Court of Appeals was docketed in this case, granting a joint motion to stay the appellate proceedings as a result of the settlement.
On June 26, 2008, the parties filed a Joint Motion to Vacate the Underlying Judgment and Jury Verdict with the Court of Appeals. In the motion, the parties represented that they have reached a preliminary settlement of all matters in the consolidated appeal subject to three conditions precedent: (1) the Court of Appeals refraining from issuing an order on the pending appellate briefs; (2) an order from the Court of Appeals vacating the jury verdict and judgment in the district court; and (3) the approval of the settlement and the issuance of a bond by the Hammond Common Council in the amount of the settlement. The parties also represented that the Hammond Common Council approved two ordinances regarding the settlement and the issuance of a bond to fund the settlement and that the settlement funds are now available.
On July 10, 2008, the parties filed a Notice of Status with the Court of Appeals, requesting that the Court of Appeals continue to stay the appeal pending resolution of the Joint Motion to Vacate.
On July 15, 2008, the Court of Appeals issued an order denying the parties' Joint Motion to Vacate and remanding to this Court "for the limited purpose of allowing the district court to inform us if it is inclined to vacate the judgment and jury verdict." Order, docket entry 546. The order was docketed with this Court on July 17, 2008.
On July 29, 2008, this Court issued an Order setting forth the standard for vacatur of a district court judgment as a condition of settlement during the pendency of an appeal, articulating numerous issues contemplated by the Court in balancing the private and public interests in such a vacatur in the instant case, and ordering the parties to file a joint brief setting forth the law and facts addressing not only the Courts' concerns but any other relevant issues. The parties filed their joint brief on August 8, 2008.
In the joint brief, the parties provided additional factual background regarding the steps taken to effectuate the settlement in this case. The Mayor of and Corporation Counsel for the City of Hammond, with Hammond's litigation attorneys, mediated with Mr. Mayes' attorneys at their request several months after oral argument before the Court of Appeals. The Mayor had authority to bind the City of Hammond, subject to the approval of the Hammond Common Council. This approval process required several public hearings before the Hammond Common Council. Two ordinances were drafted and proposed; one ordinance addressed the settlement itself and the other addressed the issuance of a bond to fund the settlement. The two ordinances had three public readings at successive public hearings before the Hammond Common Council, and they eventually were passed. In addition, the bond issue required approval by the Local Government Tax Control Board of the State of Indiana Department of Local Government Finance. After an additional public hearing in Indianapolis, the Board also approved the bond issue. The bond sale to finance the settlement proceeded in mid June 2008, and the settlement funds then became available. During the time these various hearings were pending, the parties negotiated and executed a lengthy and detailed release/settlement agreement document that includes a structured settlement portion at Mr. Mayes' request.
The issue on remand from the Court of Appeals is whether this Court is inclined to vacate the jury verdict and judgment as a condition of the settlement agreement negotiated pending the appeal. In this posture on remand, the Court is not bound by the exceptional circumstances test for vacatur applied by a court of appeals but rather must balance the equities of public and private factors to determine whether vacatur is appropriate. The Court finds that the unique factual circumstances of this case meet the requirements of both tests and that vacatur is appropriate under Federal Rule of Civil Procedure 60(b).
In 1950, the United States Supreme Court established the "happenstance test" for vacatur of a judgment in a federal civil case rendered moot on its way to the Supreme Court or pending the Supreme Court's decision, explaining that "[t]he established practice of this Court . . . is to reverse or vacate the judgment below and remand with a direction to dismiss." United States v. Munsingwear, Inc., 340 U.S. 36, 39, 71 S.Ct. 104, 95 L.Ed. 36 (1950). The vacatur "clears the path for future relitigation of the issues between the parties and eliminates a judgment, review of which was prevented through happenstance." Id. at 40, 71 S.Ct. 104.
In the context of vacatur on appeal as a condition settlement, however, the Supreme Court observed special judicial and public policy concerns and refined the test in U.S. Bancorp Mortgage Co. v. Bonner Mall Partnership, 513 U.S. 18, 29, 115 S.Ct. 386, 130 L.Ed.2d 233 (1994). In Bonner Mall, the Court was faced with the issue of the scope of its authority under 28 U.S.C. § 2106 to vacate, following settlement by the parties, a published decision of the Court of Appeals affirming a bankruptcy court's interpretation of the Bankruptcy Code in a manner contrary to the interests of the respondent—a vacatur request that was opposed by the petitioner. The Court considered two primary equitable factors—the public interest in judgments and the economy of judicial resources—that according to the Court typically counseled against vacatur in the event of settlement. Noting that "`[j]udicial precedents are . . . not merely the property of private litigants and should stand unless a court concludes that the public interest would be served by a vacatur,'" id. at 26-27, 115 S.Ct. 386 (quoting Izumi Seimitsu Kogyo Kabushiki Kaisha v. U.S. Philips Corp., 510 U.S. 27, 40, 114 S.Ct. 425, 126 L.Ed.2d 396 (1993) (Stevens, J., dissenting)), and expressing concern that the availability of vacatur as a remedy on appeal might, in at least some cases, deter settlement at earlier stages in litigation, id. at 27-28, 114 S.Ct. 425, the Court held that "mootness by reason of settlement does not justify vacatur of a judgment under review" by an appellate court except in "exceptional circumstances." Id. at 29, 114 S.Ct. 425.1 The Court further expressed that "[i]t should be clear . . . that those exceptional circumstances do not include the mere fact that the settlement agreement provides for vacatur. . . ." Id.
Providing an optional procedural vehicle for dealing with the request for vacatur on appeal, the Court counseled that "[o]f course, even in the absence of, or before considering the existence of, extraordinary circumstances, a court of appeals presented with a request for vacatur of a district-court judgment may remand the case with instructions that the district court consider the request, which it may do pursuant to ...
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