Powers v. Lightner

• Decision Date: 16 January 1985
• Docket Number: No. 84-2312,84-2312
• Citation: 752 F.2d 1251
• Parties: Anne POWERS, Plaintiff, v. John T. LIGHTNER, d/b/a Lightner Auto Sales, Defendant, Third-Party Plaintiff-Appellee, v. Barry JONES and Bruce White, Third-Party Defendants-Appellants.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 1251

752 F.2d 1251

1 Fed.R.Serv.3d 1028

Anne POWERS, Plaintiff, v. John T. LIGHTNER, d/b/a Lightner Auto Sales, Defendant, Third-Party Plaintiff-Appellee, v. Barry JONES and Bruce White, Third-Party Defendants-Appellants.

No. 84-2312.

United States Court of Appeals, Seventh Circuit.

Argued Nov. 7, 1984.

Decided Jan. 16, 1985.

Douglas Letter, Dept. of Justice, Civil Division, Washington, D.C., for plaintiff.

John A. Dienner, III, Pierce, Lydon, Griffin & Montana, Chicago, Ill., for defendant, third-party plaintiff-appellee.

Before FLAUM and PELL, Circuit Judges, and WISDOM, Senior Circuit Judge. ^*

WISDOM, Senior Circuit Judge.

The question this case presents is the appealability of the denial of a request for summary judgment on qualified immunity grounds in favor of two federal officials sued in their individual capacities. The Circuits are evenly divided on this issue. Here the third party plaintiff seeks damages from two federal officials under 42 U.S.C. Sec. 1983 and the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. Secs. 1961-1968 (1982), for the defendants' actions in an FBI undercover operation. We conclude that qualified immunity protects government officials only against insubstantial lawsuits and that protection is adequately afforded when the district court has determined that the suit should proceed to trial, because the officials knew or reasonably should have known that the challenged action would violate constitutional rights clearly established at the time the action occurred. Harlow v. Fitzgerald, 457 U.S. 800, 102 S.Ct. 2727, 73 L.Ed.2d 396 (1982); Butz v. Economou, 438 U.S. 478, 98 S.Ct. 2894, 57 L.Ed.2d 895 (1978). We hold that such an interlocutory judgment is not appealable. Accordingly, we dismiss the appeal.

I.

From October 1980 through March 1982 the FBI conducted an undercover operation in St. Louis (Operation Recoupe) to penetrate and destroy several large-scale stolen car and resale criminal enterprises. ¹ As part of Recoupe, the FBI opened an auto salvage business near St. Louis and purchased auto wrecks at fair market value from cooperating insurance companies. These wrecks had valid titles and vehicle identification number (VIN) tags. The FBI then sold the wrecks with the VINs and titles--and sometimes only the VINs and titles--to targeted subjects suspected of running retagging operations.

The VIN and title purchasers stole cars that matched the description of the car originally associated with the VIN and placed the purchased VIN tags on the stolen cars, giving them a legitimate appearance. The retaggers then distributed the cars to auto brokers or auctioneers, and the cars were bought by used car dealers. The dealers sold the retagged stolen cars to unwitting members of the public.

In December 1980 the St. Louis FBI office also had an ongoing investigation of Leroy Morton, a St. Louis automobile dealer suspected of running a stolen car and retagging operation. David Lauck, a used car dealer, approached the FBI and offered to act as an informant regarding Morton's organization. The FBI and the St. Louis U.S. Attorney's Office decided to use Lauck because they thought that, in addition to providing evidence against Morton and his associates, he might be able to produce information helpful for Recoupe. Lauck was at all times unaware of Operation Recoupe.

Lauck sold a number of cars on Morton's instructions through G.T.O. Auto Brokers, Inc. in Missouri. G.T.O. then sold the cars through Tremont Auto Auction, Inc. in Illinois. Coincidentally, some of the cars Lauck distributed for Morton had VINs and titles originally provided by the FBI under Recoupe.

In June 1981, FBI Special Agent Barry Jones furnished a VIN tag and title for a Chevrolet Monte Carlo to Lauck. While the car was at Tremont Auto Auction for sale, an Illinois State Trooper noticed it and suspected that it was stolen. Lauck informed the FBI of the State Trooper's interest in the car. The FBI became concerned that seizure of the car would lead to suspicion of Lauck by Morton and his associates and would put Lauck's life in danger. FBI Special Agent Jones telephoned the Illinois state police and asked them to return the Monte Carlo to the auction site and to state that the car was not stolen. The state police complied.

Lightner Auto Sales purchased the Monte Carlo from Tremont Auto Auction, not knowing that the car was stolen, and then resold it to Anne Powers. The Monte Carlo was later seized and returned to its original owner. ² Powers sued Lightner for a refund. Lightner filed a third party action in state court against Tremont Auto Auction, the U.S. Attorney General, Special Agent Jones, Assistant U.S. Attorney Bruce White, Lauck, several Illinois police officers, and others, seeking damages under 42 U.S.C. Sec. 1983 for deprivation of property without due process of law and as a tort under state law. Lightner also alleged a cause of action against the federal defendants under RICO.

The federal defendants removed the action to federal court and moved to dismiss the third party complaint on several grounds. The district court granted the motion as to the Attorney General but denied it as to Special Agent Jones and Assistant U.S. Attorney White. ³ Jones and White thereafter filed a renewed motion to dismiss or for summary judgment. The court ruled that Jones and Smith were entitled to absolute immunity from the state tort law claims, but denied White's claim of absolute prosecutorial immunity. The court ruled that Jones and White were entitled only to qualified immunity on the federal claims, and denied their request for summary judgment with respect to those claims. The federal defendants appeal from those portions of the order denying their request for summary judgment on the ground of qualified immunity.

II.

This Court has not ruled upon the question whether one may take an interlocutory appeal from the denial of a claim of qualified immunity. Two Courts of Appeals--in the First and the D.C. Circuits--have held that all pretrial orders denying qualified immunity are immediately appealable. Krohn v. United States, 742 F.2d 24, 27-29 (1st Cir.1984); McSurely v. McClellan, 697 F.2d 309, 315-16 (D.C.Cir.1982). These courts concluded that the purpose of immunity articulated in Harlow v. Fitzgerald, 457 U.S. 800, 102 S.Ct. 2727, 73 L.Ed.2d 396 (1982)--to shield government officials from the risks of trial and the attendant distraction of officials from their governmental duties, inhibition of discretionary action, and deterrence of able people from public service--applies equally as strongly to officials entitled to qualified immunity as to those entitled to absolute immunity and that appellate review must be available in both cases to ensure that officials are fully protected against unnecessary trials. The Court of Appeals for the Eighth Circuit has concluded that denials of claims of qualified immunity are immediately appealable when the essential facts are not in dispute ⁴ and the determination whether the government official is entitled to immunity is solely a question of law. Evans v. Dillahunty, 711 F.2d 828, 830 (8th Cir.1983).

Courts of Appeals in two other circuits--the Third and the Fifth--have ruled that the summary denial of a claim of qualified immunity is not immediately appealable. Kenyatta v. Moore, 744 F.2d 1179, 1182-86 (5th Cir.1984); Forsyth v. Kleindienst, 729 F.2d 267, 273-74 (3d Cir.1984), petition for cert. granted, --- U.S. ----, 105 S.Ct. 322, 83 L.Ed.2d 259 (1984). These courts reasoned that unlike absolute immunity, which protects an official from any trial whatsoever, qualified immunity protects only against insubstantial claims, and such protection is adequately afforded by the trial court's consideration upon a pretrial motion whether the defendant official qualifies under the objective standard for immunity enunciated in Harlow. Both courts read Harlow as encouraging the summary disposition of insubstantial claims brought against government officials, but not as relaxing the general rule against interlocutory appeals. The Fourth Circuit dismissed an interlocutory appeal of a denial of qualified immunity in Bever v. Gilbertson, 724 F.2d 1083 (4th Cir.1984), cert. denied, --- U.S. ----, 105 S.Ct. 349, 83 L.Ed.2d 285 (1984) because the action also sought injunctive relief and a trial would therefore have been necessary regardless of qualified immunity and because the appeal did not present a serious and unsettled question of law. The Court noted, however, that "one must read much into [Harlow ] to conclude that the Supreme Court ... intended that denials of such motions should be immediately appealable". Id. at 1088.

Each of these cases turned on an examination of the scope and purposes of the doctrine of qualified immunity as revised by the Supreme Court in Harlow. We turn now to that case and consider its relation to the general rules regarding interlocutory appeals.

A.

Congress has vested the Courts of Appeals with "jurisdiction of appeals from all final decisions of the district courts of the United States ... except where a direct review may be had in the Supreme Court". 28 U.S.C. Sec. 1291 (1982) (emphasis added). This requirement of finality " 'is the dominant rule in federal appellate practice' ". Flanagan v. United States, --- U.S. ----, ----, 104 S.Ct. 1051, 1057, 79 L.Ed.2d 288, 298 (1984) (quoting 6 Moore, Federal Practice 113 (2d ed. 1953)). It embodies "a firm congressional policy against interlocutory or 'piecemeal' appeals". ⁵ Abney v. United States, 431 U.S. 651, 656, 97 S.Ct. 2034, 2038, 52 L.Ed.2d 651, 658 (1977).

The Supreme Court has recognized a narrow exception to this strict rule of finality, at least in "that small class [of orders] which finally determine claims of right separable from, and collateral to, rights asserted in the action, too important to be denied review and too independent of the cause itself to...