Mercer v. Magnant

• Decision Date: 17 November 1994
• Docket Number: 93-3410,Nos. 93-3255,s. 93-3255
• Citation: 40 F.3d 893
• Parties: Mary MERCER, et al., Plaintiffs-Appellees, Cross-Appellants, v. Suzanne MAGNANT, Administrator of the Indiana Department of Public Welfare, et al., Defendants-Appellants, Cross-Appellees, and Mike Espy, Secretary of Agriculture, Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 893

40 F.3d 893

Mary MERCER, et al., Plaintiffs-Appellees, Cross-Appellants, v. Suzanne MAGNANT, Administrator of the Indiana Department of

Public Welfare, et al., Defendants-Appellants,

Cross-Appellees,

and

Mike Espy, Secretary of Agriculture, Defendant-Appellee.

Nos. 93-3255, 93-3410.

United States Court of Appeals, Seventh Circuit.

Argued Oct. 5, 1994.

Decided Nov. 17, 1994.

Lowell K. Hull (argued), Legal Services of Northern Indiana, South Bend, IN, and Greta S. Friedman, Boklund, Yandt & Friedman, LaPorte, IN, for plaintiffs.

Pamela Carter, Asst. Atty. Gen., Jon Laramore (argued), Office of the Atty. Gen., Indianapolis, IN, Robert S. Greenspan, Christine N. Kohl (argued), Dept. of Justice, Civ. Div., Appellate Section, Washington, DC, and Clifford D. Johnson, Asst. U.S. Atty., Office of the U.S. Atty., South Bend, IN, for defendants.

Before POSNER, Chief Judge, and ENGEL ^* and EASTERBROOK, Circuit Judges.

EASTERBROOK, Circuit Judge.

Before Indiana sends out a tax refund, it checks to see whether the recipient owes anything to the state. If there is a debt, Indiana notifies the taxpayer of an intent to apply the tax refund to the outstanding indebtedness. The state offers a hearing on the question whether there is indeed such an obligation. After the time to request a hearing passes--or after the decision, if a hearing is requested--the state sets off the debts and remits only the balance in the taxpayer's favor. A district court has held that this tax intercept program, as applied to debts created by excess food stamp distributions, violates the due process and takings clauses of the Constitution. The court not only instructed Indiana to discontinue the tax intercept program but also told the state to refund with interest debts collected in prior years.

Both sides have appealed--Indiana because it believes the decision on the merits unwarranted and the relief a violation of the eleventh amendment, and the plaintiffs (a class of food stamp recipients) because they want additional relief, including the mailing of notices inviting other persons to make claims and an order compelling the Secretary of Agriculture to help them implement their victory over the state. Our first question is whether we have appellate jurisdiction.

Plaintiffs sought a declaratory judgment and an injunction; they got neither. The district court filed an opinion in March 1993 announcing that the plaintiffs are entitled to relief, but it did not enter a judgment specifying that relief. See Azeez v. Fairman, 795 F.2d 1296 (7th Cir.1986). Aside from a preliminary injunction entered in 1990--an injunction that the state has not sought to appeal--the record contains only two documents looking remotely like judgments. The first, entered on August 19, 1993, reads in full:

This court has examined the stipulation filed on August 2, 1993, in the context of the entire record in this case. This court's Memorandum and Order of March 10, 1993, means exactly what it said and the attempted spin thereon advanced by the Attorney General of Indiana is misplaced as to the constitutionality of I.C. 6-8.1-9.5-1 and 2. Those from whom tax refunds have been withheld or intercepted thereunder are entitled to have same restored with interest. The Eleventh Amendment of the Constitution does not bar the same. This process should proceed with all deliberate speed and all other proceedings now scheduled in this case are CANCELLED. Plaintiffs' counsel should advise the court as to compliance herewith by November 1 1993. This case is now considered closed subject to being reopened. SO ORDERED.

The second, entered two days later on the standard form for Rule 58 judgments, provides:

IT IS ORDERED AND ADJUDGED that all matters herein having been resolved and partial summary judgment having previsouly [sic] been entered in favor of the plaintiffs, this case is now closed.

Neither of these documents is an order appealable by the state, although the second might be appealable by the plaintiffs on the ground that it closes the case without affording them any of the relief to which the district judge believed them entitled. The document entered on August 21 does nothing at all; it supposes that some earlier document awarded the relief. The only candidate is the order of August 19, which is neither a final decision appealable under 28 U.S.C. Sec. 1291 nor an injunction appealable under 28 U.S.C. Sec. 1292(a)(1).

Although the order of August 19 says that members of the plaintiff class are entitled to tax refunds with interest, it neither specifies the principal amount of the award nor fixes the amount of interest. Each step is essential to a final decision. See Liberty Mutual Insurance Co. v. Wetzel, 424 U.S. 737, 96 S.Ct. 1202, 47 L.Ed.2d 435 (1976) (declaration of liability without computation of damages may not be appealed even if the district court enters a judgment under Fed.R.Civ.P. 54(b)); Osterneck v. Ernst & Whinney, 489 U.S. 169, 109 S.Ct. 987, 103 L.Ed.2d 146 (1989) (final resolution of all issues concerning prejudgment interest is essential to finality). Although a judgment establishing a formula that mechanizes the process of getting to a monetary amount may be appealable, Production & Maintenance Employees v. Roadmaster Corp., 954 F.2d 1397, 1401-02 (7th Cir.1992); cf. Gulf Refining Co. v. United States, 269 U.S. 125, 136, 46 S.Ct. 52, 53, 70 L.Ed. 195 (1925), the state concedes that the order of August 19 calls for more than ministerial calculations. For their part, the plaintiffs have complained to the district court about deficiencies they perceive in the defendants' process of computation. So the declaration that Indiana owes the plaintiffs money is not yet appealable.

Neither is the instruction to "proceed with all deliberate speed" in calculating the sums owed. This is just a preliminary step toward a judgment. Although it may be characterized as an order to do something, it is no more an "injunction" than is an order to turn over papers in discovery or submit to a physical examination. Only orders awarding relief on the merits, or effectively foreclosing some element of relief, may be appealed as injunctions. See Stringfellow v. Concerned Neighbors in Action, 480 U.S. 370, 107 S.Ct. 1177, 94 L.Ed.2d 389 (1987); Allendale Mutual Insurance Co. v. Bull Data Systems, Inc., 32 F.3d 1175 (7th Cir.1994); Reise v. University of Wisconsin, 957 F.2d 293 (7th Cir.1992); In re Springfield, 818 F.2d 565 (7th Cir.1987); Uehlein v. Jackson National Life Insurance Co., 794 F.2d 300 (7th Cir.1986). Orders to prepare plans that when adopted will be injunctions are not themselves injunctions, even if the process of preparation is extended and expensive. See Spates v. Manson, 619 F.2d 204 (2d Cir.1980) (Friendly, J.); Groseclose v. Dutton, 788 F.2d 356 (6th Cir.1986); Liddell v. St. Louis Board of Education, 693 F.2d 721 (8th Cir.1981).

Indiana believes that the eleventh amendment precludes any order to refund money to the plaintiffs, and we know from Puerto Rico Aqueduct & Sewer Authority v. Metcalf & Eddy, Inc., --- U.S. ----, 113 S.Ct. 684, 121 L.Ed.2d 605 (1993), that states may take interlocutory appeals to vindicate their constitutional protection from suit under this amendment. This raises the possibility that the August 19 order is appealable even though interlocutory. Defendants have not relied on Metcalf & Eddy, however, and for good reason. The foundation for the interlocutory appeal authorized by that case is the existence of a right not to be a litigant. Plaintiffs did not name the state as a party, and defendants do not deny that the litigation may proceed under the approach of Ex parte Young, 209 U.S. 123, 28 S.Ct. 441, 52 L.Ed. 714 (1908). They argue only that a particular remedy, damages, is off limits. Once the defendants concede that the litigation is proper, they undermine any claim of entitlement to an interlocutory appeal. A governmental party must wait for a final decision before taking an appeal on the question whether money damages is an available remedy. Pullman Construction Industries, Inc. v. United States, 23 F.3d 1166 (7th Cir.1994).

What the defendants want to appeal is not so much the order of August 19 as it is the opinion filed in March 1993, which said that the state's tax intercept program violates the fourteenth amendment, setting the stage for the parties' disputes about remedies. Yet the district court did not enter any relief in March. An opinion demonstrating that the district court has completed all of the tasks it plans to undertake may be appealable as a terminal order. Otis v. Chicago, 29 F.3d 1159 (7th Cir.1994) (en banc). An opinion not accompanied by an injunction does not comply with Fed.R.Civ.P. 65(d), and therefore cannot be enforced as an injunction, see Schmidt v. Lessard, 414 U.S. 473, 94 S.Ct. 713, 38 L.Ed.2d 661 (1974), but it is appealable if the circumstances demonstrate that it is the end of the line in the district court. Burgess v. Ryan, 996 F.2d 180 (7th Cir.1993); Alpine State Bank v. Ohio Casualty Insurance Co., 941 F.2d 554 (7th Cir.1991). Cf. Bates v. Johnson, 901 F.2d 1424 (7th Cir.1990). The opinion filed in March 1993 was not the end of the line. In August 1993 the district court entered further orders, and these orders contemplate still additional relief. Defendants are not yet entitled to appeal.

The plaintiffs' cross-appeal, by contrast, is within our jurisdiction. After the district court entered the orders of August 19 and 21, the plaintiffs filed motions seeking additional relief--in particular, an order directing the defendants to notify food stamp recipients that they may be entitled to remedies. See Green v. Mansour, 474 U.S. 64, 106 S.Ct. 423, 88 L.Ed.2d 371 (1985); Quern v. Jordan, 440 U.S. 332, 99 S.Ct. 1139, 59 L.Ed.2d 358 (1979). The district court refused to grant any more relief while the state's appeal is pending, which at a minimum denies plaintiffs' request...