Unity Ventures v. County of Lake

• Decision Date: 29 January 1990
• Docket Number: No. 89-1122,89-1122
• Citation: 894 F.2d 250
• Parties: 1990-1 Trade Cases 68,911 UNITY VENTURES, an Illinois Partnership, LaSalle National Bank, as Trustee under Trust 103331 and William Alter, Plaintiffs-Appellees, v. COUNTY OF LAKE, Village of Grayslake, Norman C. Geary, George Bell and Edwin M. Schroeder, Defendants-Appellants.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 250

894 F.2d 250

1990-1 Trade Cases 68,911

UNITY VENTURES, an Illinois Partnership, LaSalle National Bank, as Trustee under Trust 103331 and William Alter, Plaintiffs-Appellees, v. COUNTY OF LAKE, Village of Grayslake, Norman C. Geary George Bell and Edwin M. Schroeder, Defendants-Appellants.

No. 89-1122.

United States Court of Appeals Seventh Circuit.

Argued Oct. 23, 1989.

Decided Jan. 29, 1990.

Merle L. Royce, James H. Ryan, Keck, Mahin & Cate, Thomas H. Neuckranz, Williams & Montgomery, James P. Chapman (argued), Alan S. Mills, Chapman & Associates, Robert Zaideman, Jerry A. Esrig, Epstein, Zaideman & Esrig, Chicago Ill., Helen Rozenberg, Gary Neddenriep and Gerald P. Callaghan, Asst. States Attys., Waukegan, Ill., for plaintiffs-appellees.

Robert C. Newman, Clifford L. Weaver (argued), Charles D. Knight, Burke, Bosselman & Weaver, Chicago, Ill., Rudolph F. Magna, Jr., Gurnee, Ill., for defendants-appellants.

Before CUDAHY, POSNER and KANNE, Circuit Judges.

CUDAHY, Circuit Judge.

After obtaining a judgment notwithstanding the verdict, Lake County ¹ petitioned the district court for attorney's fees, alleging that William Alter had brought his antitrust and civil rights action in bad faith. The district court denied the petition; Lake County now asks us to reverse that decision.

I.

The facts of this case have been twice recorded by federal courts. See 631 F.Supp. 181 (N.D.Ill.1986), aff'd, 841 F.2d 770 (7th Cir.), cert. denied, --- U.S. ----, 109 S.Ct. 226, 102 L.Ed.2d 216 (1988). A complete recitation of the facts may be found in the prior opinions of the district court and the court of appeals. For present purposes, however, only a brief summary is necessary.

In the early 1970s, William Alter obtained an option to purchase 585 acres of farmland, known as the Unity property, in unincorporated Lake County, Illinois. The Unity property was located south of Grayslake and southeast of Round Lake Park; Alter decided to enter into an annexation agreement with Round Lake Park to develop the property. On October 21, 1976, Alter exercised his option to purchase the Unity property.

At this point, Alter needed to connect the Unity property to a regional sewer interceptor pipeline so that sewage generated on the property could be transported to a regional treatment plant. Two Lake County regional interceptor pipelines were located in the vicinity of the property: the Northwest Central Interceptor (which served Round Lake Park and its surrounding communities) and the Northeast Central Interceptor (which served Grayslake and its surrounding communities). Unbeknownst to Alter, Lake County and Grayslake had agreed earlier that Lake County would "preserve the function of County [Northeast Central] interceptors located within the sphere of influence of the Village ... by not permitting any direct connection hereto by any person, firm, corporation or municipality unless the Village consents in writing to such direct connection." Unity Ventures v. County of Lake, 631 F.Supp. at 185.

Alter drafted plans to connect the Unity property to the Northeast Interceptor, which he submitted to the County in August 1978; Martin Galantha, the Director of the Lake County Public Works Department, approved the plans and sent them to Grayslake Mayor Edwin M. Schroeder for his consideration (pursuant to the "sphere of influence" agreement). Mayor Schroeder then met with Round Lake Park Mayor Walter Bengson and others to discuss the connections to the Unity property; at the conclusion of the meeting, Mayor Schroeder refused to consent to the development.

As a result of Mayor Schroeder's refusal, Alter persuaded neighboring Round Lake Park to obtain a variance from the Illinois Pollution Control Board that would permit the construction of an independent sewage treatment plant to serve the Unity property. Two years later, in December 1980, the Grayslake Board of Trustees adopted a resolution that would allow Alter to connect the Unity property to the Northeast Interceptor, provided that Round Lake Park agreed not to annex a 2500-acre parcel, known as the Heartland property, also located in Lake County. Round Lake Park refused and authorized the annexation of the Heartland property; as a result, Grayslake rescinded its offer and filed objections to the construction of the proposed independent sewage treatment plant with the Illinois Environmental Protection Agency.

Alter brought suit, alleging, in addition to antitrust claims, that Lake County had "conspired to prevent the development of [plaintiffs'] land by a series of wrongful acts, including denying access to sanitary sewer service, in violation of plaintiffs' rights under the due process and equal protection clauses of the Fourteenth Amendment and the Civil Rights Act of 1871, 42 U.S.C. Sec. 1983." 631 F.Supp. at 185.

On January 12, 1984, a jury returned a verdict in favor of Alter and other plaintiffs, awarding them $9.5 million in damages (which was later trebled) on the antitrust and civil rights claims. Upon Lake County's timely motion, Judge Bua reconsidered the case and--basing his decision on state action immunity under antitrust law and qualified immunity from civil rights suits for damages--granted Lake County's request for judgment notwithstanding the verdict. 631 F.Supp. 181 (N.D.Ill.1986). A panel of this circuit affirmed on other grounds, holding that Alter's failure to make a formal application for sewer connections to Grayslake or Lake County--and his corresponding failure to receive a final decision from the County--meant that his claim was not ripe for adjudication. 841 F.2d 770 (7th Cir.1988).

Fresh from its legal victory, Lake County asked the district court to consider its motion for attorney's fees. The district court denied the motion, and Lake County now asks us to reverse that decision.

II.

This is not the first time Lake County has requested us to award attorney's fees in this case. Shortly after this court affirmed the district court's judgment notwithstanding the verdict, Lake County filed a motion for an award of attorney's fees incurred in defending its case on appeal. The panel denied that motion on June 22, 1988; Alter now argues that our denial of Lake County's motion has become the "law of the case" and precludes us from granting the attorney's fees which are now requested.

It has long been established that " 'matters decided on appeal become the law of the case to be followed ... on second appeal, in the appellate court unless there is plain error of law in the original decision.' " Appleton Elec. Co. v. Graves Truck Line, Inc., 635 F.2d 603, 607 (7th Cir.1980) (quoting Kaku Nagano v. Brownell, 212 F.2d 262, 263 (7th Cir.1954)), cert. denied, 451 U.S. 976, 101 S.Ct. 2058, 68 L.Ed.2d 357 (1981). Of course, the doctrine can be applied only if a party attempts to reargue the same matter on second appeal. That is not the case here. In its earlier motion, Lake County asked us to award "attorney's fees incurred in the defense of th[e] appeal." Appellees' Motion for Attorney's Fees at 1 (emphasis supplied). Our decision, then, not to award fees was based solely on the justification for the appeal; it had little to do with the justification for the original lawsuit.

The Eleventh Circuit reached a similar conclusion in Sherry Manufacturing Co. v. Towel King of Florida, 822 F.2d 1031 (11th Cir.1987). There, Sherry Manufacturing obtained a judgment against Towel King in the district court for copyright infringement and unfair competition. The court of appeals reversed and remanded, but denied Towel King's motion for attorney's fees incurred on its appeal. On remand, the district court approved a magistrate's recommendation that attorney's fees be awarded to Towel King for work at trial. Sherry Manufacturing challenged this determination on appeal, arguing (like Alter) that the appellate court's previous denial of attorney's fees established the binding law of the case. The court of appeals disagreed: "Our determination that Towel King is not entitled to attorney's fees for the work it did in perfecting its earlier appeal to this court does not foreclose the district court's independent determination that fees are appropriately awarded for work undertaken by Towel King in preparation for trial." Id. at 1033 n. 1. Cf. Studiengesellschaft Kohle mbH v. Eastman Kodak Co., 713 F.2d 128, 131 (5th Cir.1983) (court of appeals's assessment of appellate costs is unrelated to district court's assessment of trial costs). ² Likewise, we conclude that the law of the case does not preclude us from considering the fees denied by the district court. ³

III.

Lake County argues that the district court abused its discretion in denying attorney's fees. Lake County contends that Alter brought his action in bad faith--that he falsely claimed he applied for a connection to the Northeast interceptors, that he falsely claimed he was denied access to both the Northeast and Northwest Central interceptors and that he knew he could not prove injury or damages. Further, Lake County contends that it is entitled to attorney's fees as the prevailing defendant under 42 U.S.C. section 1988.

Generally, litigants in the United States must pay their own attorney's fees. Alyeska Pipeline Serv. Co. v. Wilderness Soc'y, 421 U.S. 240, 247, 95 S.Ct. 1612, 1616, 44 L.Ed.2d 141 (1975). Of course, there are exceptions to this rule: "It has long been established that even under the American common-law rule attorney's fees may be awarded against a party who has proceeded in bad faith." Christianburg Garment Co. v. EEOC, 434 U.S. 412, 98 S.Ct. 694, 54 L.Ed.2d 648 (1978). And Congress has provided other exceptions. 42 U.S.C. section 1988, for example, authorizes courts to award attorney's fees incurred in civil rights litigation conducted pursuant to 42 U.S.C. section 1983: "[T]he court, in its discretion, may allow the prevailing party, other than the United States, a reasonable...