Thomas v. Guardsmark, LLC

Decision Date05 June 2007
Docket NumberNo. 05-3865.,05-3865.
Citation487 F.3d 531
PartiesCarl E. THOMAS, Plaintiff-Appellee, v. GUARDSMARK, LLC, Defendant-Appellant.
CourtU.S. Court of Appeals — Seventh Circuit

Timothy Huizenga (argued), Legal Assistance Foundation of Metropolitan Chicago, Chicago, IL, for Plaintiff-Appellee.

Arthur J. Howe (argued), Schopf & Weiss, Chicago, IL, for Defendant-Appellant.

Before EASTERBROOK, Chief Judge, and RIPPLE and ROVNER, Circuit Judges.

ROVNER, Circuit Judge.

On the heels of the terrorist attacks of September 11, 2001, Channel 2 news in Chicago ran a story about lax regulation of security guards in Illinois. Carl E. Thomas, a security officer for Guardsmark, LLC (then Guardsmark, Inc., hereinafter "Guardsmark"), appeared in that story and stated that once, while working as a security guard at an oil refinery, he had worked alongside a fellow guard who boasted of having a criminal record. Guardsmark suspended and then fired Thomas for speaking to the media. Thomas brought suit for retaliatory discharge and a jury awarded him back pay and damages. Guardsmark unsuccessfully moved for judgment as a matter of law on several grounds, including the one on appeal—that Mr. Thomas' claim should have been dismissed because it did not satisfy the requirements of the Illinois Whistleblower Act. We affirm.


As in any case involving diversity jurisdiction, before proceeding to the merits, this court must independently determine whether the parties meet the diversity and amount in controversy requirements of 28 U.S.C. § 1332. Camico Mut. Ins. Co. v. Citizens Bank, 474 F.3d 989, 992 (7th Cir.2007). Guardsmark's opening brief stated only that the district court had jurisdiction "due to the diversity of citizenship of the parties." Thomas' brief incorrectly affirmed that Guardsmark's jurisdictional statement was complete and correct.

We hope to make it clear once and for all (if such a wish for finality were possible) that an appellant's naked declaration that there is diversity of citizenship is never sufficient. Our Circuit Rule 28 requires more. It states, in no uncertain terms, that if jurisdiction depends on diversity of citizenship, the statement shall identify the citizenship of each party to the litigation. It then goes on to say, "[i]f any party is a corporation, the statement shall identify both the state of incorporation and the state in which the corporation has its principal place of business. If any party is an unincorporated association or partnership the statement shall identify the citizenship of all members." Cir. R. 28(a)(1). We have repeatedly warned that when one party to the litigation is someone other than a natural person suing in her own capacity, "a jurisdictional warning flag should go up" and the parties should carefully scrutinize the requirements of Circuit Rule 28(a)(1). Cosgrove v. Bartolotta, 150 F.3d 729, 731 (7th Cir.1998). In this case, Guardsmark was, at the time of removal, a limited liability company. For diversity jurisdiction purposes, the citizenship of an LLC is the citizenship of each of its members. Camico Mut. Ins. Co. v. Citizens Bank, 474 F.3d 989, 992 (7th Cir.2007). Consequently, an LLC's jurisdictional statement must identify the citizenship of each of its members as of the date the complaint or notice of removal was filed, and, if those members have members, the citizenship of those members as well. In its opening brief, Guardsmark failed to identify the citizenship of any of its members. And in its Notice of Removal before the district court, Guardsmark incorrectly identified itself as a corporation rather than an LLC. (R. at 1).

When this court determined that both the appellant's and the appellee's jurisdictional statements were deficient, it issued an order directing the parties to submit corrected statements. In that order the court not only cited Circuit Rule 28(a)(1), but went two steps further; it specifically ordered the appellant to "provide a complete disclosure of its members' identities and citizenships and, if necessary, the members' members' identities and citizenships." March 27, 2006 Order. The order then cited three Seventh Circuit cases to which the appellant could turn for guidance regarding the level of specificity required (and, parenthetically, for a fair warning of the fate of those who fail to comply).

In response to the order, Guardsmark filed a supplemental jurisdictional statement revealing that the LLC had two members, one, a corporation, and the other, a partnership. Despite the clear instructions in the order, Guardsmark's corrected jurisdictional statement neglected to identify the partnership or the names of the partners in that partnership. "Once the court sounds the alarm, the litigants must be precise," America's Best Inns, Inc. v. Best Inns of Abilene, 980 F.2d 1072, 1073 (7th Cir.1992), and the court can no longer take on faith the lawyer's blanket declaration that the partners are citizens of another state.

The normal course of events at this point is to dismiss for want of subject matter jurisdiction. See Guar. Nat'l Title Co. v. J.E.G. Assoc., 101 F.3d 57, 59 (7th Cir.1996); America's Best Inns, Inc., 980 F.2d at 1074. In this case we gave the parties a more-than-generous third opportunity by order of April 10, 2006, and their response satisfies the requirements of diversity jurisdiction. Had we done otherwise, Guardsmark would have received a windfall—having the verdict against it vacated and the case dismissed for want of jurisdiction, due to its own failure to correctly identify the source of diversity jurisdiction. See Guar. Nat'l Title Co., 101 F.3d at 59; America's Best Inns, Inc., 980 F.2d at 1074. Thomas, who recovered a verdict below, should not now lose that verdict based on the faulty lawyering of his opponent.1 Guardsmark's additional opportunity to correct the jurisdictional statement, however, comes with a loud and close shot across the bow. The next time our cannons may not be aimed so high. As for this case, we order Guardsmark to pay the court $1,000 as a sanction for violations of this court's rules and orders as described above.


Having scraped by that hurdle, we can begin our analysis of the merits of the case which will be aided by a more detailed description of the facts. In October 2001, a news reporter in Chicago approached Thomas for a story about lax regulation of security guards in Illinois. It was then that Mr. Thomas told the reporter that he had worked alongside another newly hired Guardsmark security guard who told Thomas he had a criminal record. The reporter asked Thomas if he would be willing to be interviewed on camera. Thomas contacted his supervisor for permission, before agreeing to the on-air interview. One week after the interview aired, on November 16, 2001, the Chicago regional manager of Guardsmark summoned Thomas to his office and suspended him pending further investigation into whether he had proper authorization to appear on the telecast. From that time until some time in fall 2002, Thomas' employment status was unclear. Guardsmark did not initiate the paperwork to terminate Mr. Thomas until just before he filed his lawsuit in October 2002.

After a jury award in Thomas' favor, Guardsmark raised numerous claims of error, all of which the district court judge rejected. In a motion for judgment as a matter of law filed two weeks after the jury verdict, Guardsmark argued for the first time that Mr. Thomas' claim should have been dismissed because it did not satisfy the requirements of the Illinois Whistleblower Act, 740 Ill. Comp. Stat. 174/1-35. Thomas countered that he had never alleged a claim under the Act and that its similarity to common law retaliatory discharge claims did not convert his tort claim into a claim under the new Act. The district court agreed with Thomas emphasizing simply that "Thomas did not assert an Illinois Whistleblower Act Claim." (R. at 111, p. 4). That is the sole issue on which Guardsmark seeks our de novo review. See Pearson v. Welborn, 471 F.3d 732, 737 (7th Cir.2006) (appellate court applies de novo review to the district court's denial of judgment as a matter of law).

The Illinois Whistleblower Act prohibits an employer from "retaliat[ing] against an employee for disclosing information to a government or law enforcement agency, where the employee has reasonable cause to believe that the information discloses a violation of a State or federal law, rule, or regulation." 740 Ill. Comp. Stat. 174/15. The tort of retaliatory discharge under Illinois common law is a narrow exception to the at-will employment doctrine and can be established if a plaintiff shows that (1) she has been discharged; (2) in retaliation for her activities; and (3) the discharge violates a clear mandate of public policy. Zimmerman v. Buchheit of Sparta, Inc., 164 Ill.2d 29, 206 Ill.Dec. 625, 645 N.E.2d 877, 881 (Ill.1995).

On appeal, Guardsmark argues that the Illinois common law tort of retaliatory discharge has been codified—and thus superseded—by the Illinois Whistleblower Act, 740 Ill. Comp. Stat. 174/1-35, and that Thomas failed to state a cause of action for retaliatory discharge because he did not engage in activity protected by the Whistleblower Act. Thomas counters that the Whistleblower Act did not abrogate the common law cause of action for retaliatory discharge but merely gave employees additional protection for whistle-blowing activities. Thomas further argues that even if the Whistleblower Act did abrogate the common law claim, the Whistleblower Act could not be applied to a lawsuit brought over a year before the effective date of the Act. Guardsmark terminated Thomas some time between November 15, 2001 and October 2002, for conduct which occurred in November 2001.2 The Illinois Whistleblower Act went into effect on January 1, 2004. Because the entirety of Guardsmark's appeal hangs on the question of whether Thomas stated a...

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