Charles Baker v. F & F Investment, Sidney Clark v. Universal Builders, Inc.

420 F.2d 1191
CourtCourt of Appeals for the Seventh Circuit
DecidedMarch 5, 1970
Docket17815, 17816, 17750, 17751
StatusPublished
Cited by144 cases

This text of 420 F.2d 1191 (Charles Baker v. F & F Investment, Sidney Clark v. Universal Builders, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Seventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Charles Baker v. F & F Investment, Sidney Clark v. Universal Builders, Inc., 420 F.2d 1191 (7th Cir. 1970).

Opinion

CUMMINGS, Circuit Judge.

These consolidated appeals concern statute of limitations rulings of the dis *1193 trict court with respect to two related class actions brought by Negro purchasers of new and used residential real estate in Chicago. The purchases were on installment contracts allegedly containing terms less favorable to Negroes than would have been available to whites. Count I of each complaint was based principally on Section 1982 of the Civil Rights Act of 1866 (42 U.S.C. § 1982), as construed in Jones v. Alfred H. Mayer Co., 392 U.S. 409, 88 S.Ct. 2186, 20 L.Ed.2d 1189. Count II of the Baker complaint alleged violations of the federal antitrust laws, and Count III of the Baker complaint alleged violations of the Illinois antitrust laws. 1

The district court held that the Illinois 5-year statute of limitations governing civil actions not otherwise provided for (Ill.Rev.Stat. (1967) ch. 83, § 16) is applicable to Count I of both complaints and that the 4-year statutes of limitations contained in the federal and Illinois antitrust laws (15 U.S.C. § 15b and Ill.Rev.Stat. (1967) ch. 38, § 60-7) are respectively applicable to Baker Counts II and III. However, the court held that the statutes of limitations run from the date the real estate installment contracts terminate rather than from the date they were executed, as defendants had contended. Accordingly, the court concluded that the plaintiff classes must be redefined to eliminate the purchasers whose contracts terminated prior to the periods of limitations. 2 Defendants have brought interlocutory appeals from the district court’s decision and plaintiffs were given leave to cross appeal. These interlocutory and cross appeals require us to decide whether the doctrine of laches is applicable. If not, we must determine what statutes of limitations, if any, are applicable to Counts I of each complaint and to Baker Counts II and III, and when they began to run.

The Doctrine of Laches Is Inapplicable.

As to Count I based on the Civil Rights Act, plaintiffs and the United States as amicus curiae urge that the claims are governed by laches rather than by the statutes of limitations. They would be correct if the claims were solely equitable. Russell v. Todd, 309 U.S. 280, 60 S.Ct. 527, 84 L. Ed. 754; Holmberg v. Armbrecht, 327 U.S. 392, 66 S.Ct. 582, 90 L.Ed. 743. However, the complaints seek money damages, both actual and punitive, and cannot be deemed exclusively equitable. Therefore, as we recently held in Morgan v. Koch, 419 F.2d 993 (7th Cir., 1969), the doctrine of laches does not apply to the Count I claims. 3

State Statutes of Limitations Apply to Federal Civil Bights Actions.

Despite long settled rulings to the contrary, plaintiffs assert that no state statute of limitations bars federal civil rights actions. Ever since the 1915 decision of the Supreme Court in O’Sullivan v. Felix, 233 U.S. 318, 34 S. Ct. 596, 58 L.Ed. 980, the courts have uniformly held that state limitations statutes are to be applied to federal civil rights actions other than those based upon Section 1986 of the 1871 Act (42 U.S.C. § 1986). See, e. g., Francis v. Crafts, 203 F.2d 809 (1st Cir. 1953), certiorari denied, 346 U.S. 835, 74 S.Ct. 43, 98 L.Ed. 357; Swan v. Board of Higher Education of City of New York, *1194 319 F.2d 56, 59 (2d Cir. 1963); Hileman v. Knable, 391 F.2d 596, 597 (3d Cir. 1968); Beard v. Stephens, 372 F.2d 685, 688 (5th Cir. 1967); Crawford v. Zeitler, 326 F.2d 119, 121 (6th Cir. 1964); Smith v. Cremins, 308 F.2d 187, 189, 98 A.L.R.2d 1154 (9th Cir. 1962). Our decision in Wakat v. Harlib, 253 F. 2d 59 (7th Cir. 1958), is to the same effect and requires our rejection of plaintiffs’ argument that no statute of limitations bars Count I of these complaints.

Plaintiffs, however, argue that these decisions rest upon a faulty application of the Rules of Decision Act (28 U.S.C. §■ 1652). 4 They contend that the original purpose of that statute was to reassure opponents of diversity jurisdiction that state law would be applied by federal courts in diversity cases. They argue that any limitation on federally based actions is properly a matter of federal law and that the exception in the Rules of Decision Act covers this case. They urge that civil rights actions demand uniform federal rules in all particulars and that the failure of Congress to enact a statute of limitations applicable to Section 1982 of the Civil Rights Act evidences an intent that no statutory limitation should bar relief. We are unable to accept this position.

Regardless of the intended effect which the Rules of Decision Act was to have upon diversity jurisdiction, it was soon firmly applied to those gaps in federal law for which no uniform, common law was felt by the courts to be necessary. More than 30 years before the enactment of the Civil Rights Act, the Supreme Court held in McCluny v. Silli-man, 28 U.S. (3 Pet.) 270, 7 L.Ed. 676, that under the Rules of Decision Act the federal courts must apply state statutes of limitations to federal causes of action in the absence of a special provision by Congress:

“Under this statute [the Rules of Decision Act] the acts of limitations of the several states, where no special provision has been made by Congress, form a rule of decision in the courts of the United States, and the same effect is given to them as is given in the state courts.” 28 U.S. (3 Pet.) at p. 277, 7 L.Ed. 676. 5

This rule has never been seriously challenged. Moreover, since Erie Railroad Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188, overruled the doctrine of Swift v. Tyson, 41 U.S. (16 Pet.) 1, 10 L.Ed. 865, adoption of state statutes to fill gaps in federal law has continued as a prime function of the Rules of Decision Act.

Nor does that Act’s exception to state rules which conflict with federal law apply to statutes of limitations. Limitations on the period within which a right may be redressed do not conflict with the existence of that right. Cf. the Virginia Coupon Cases, 114 U.S. 269, 303, 5 S.Ct. 903, 29 L.Ed. 185.

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420 F.2d 1191, Counsel Stack Legal Research, https://law.counselstack.com/opinion/charles-baker-v-f-f-investment-sidney-clark-v-universal-builders-inc-ca7-1970.