Katherine Cerajeski v. Greg Zoeller

794 F.3d 828, 2015 U.S. App. LEXIS 12813, 2015 WL 4496721
CourtCourt of Appeals for the Seventh Circuit
DecidedJuly 24, 2015
Docket15-1313
StatusPublished
Cited by1 cases

This text of 794 F.3d 828 (Katherine Cerajeski v. Greg Zoeller) 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
Katherine Cerajeski v. Greg Zoeller, 794 F.3d 828, 2015 U.S. App. LEXIS 12813, 2015 WL 4496721 (7th Cir. 2015).

Opinion

POSNER, Circuit Judge.

This appeal is a sequel to our decision reported at 735 F.3d 577 (7th Cir.2013), in which we held unconstitutional a provision of the Indiana Unclaimed Property Act, Ind.Code §§ 32-34-1-1 et seq. (Indiana’s version of the Uniform Unclaimed Property Act) that authorized the state to confis *830 cate private property without any compensation — let alone just compensation — to the owner.

The Act stated that “property” is “presumed abandoned if the owner or apparent owner has not communicated in writing with the holder concerning the property or has not otherwise given an indication of interest in the property” within a specified period varying according to the type of property. § 32-34-l-20(c). By filing a valid claim with the state the owner could reclaim the property at any time up to 25 years after it was delivered to the attorney general. § 3234-1-36. (After that, if still unclaimed, the property escheated to the state.) But he was entitled only to his principal and not to any interest earned on it. We held that the state’s retention of the interest was a taking that violated the Fifth Amendment’s just compensation clause (deemed applicable to actions by state governments by interpretation of the Fourteenth Amendment’s due process clause) because the owner was paid nothing for his lost interest.

Our opinion concluded by stating that “the judgment is reversed and the case remanded for further proceedings consistent with this opinion. The plaintiff is entitled to just compensation from the state when she files her claim to [Walter] Cerajeski’s account [remember that the plaintiff is his guardian], but the amount of that just compensation has yet to be determined. The plaintiff has also sought an injunction — why we don’t know; and in-junctive relief may well be unavailable in this case. ‘Equitable relief is not available to enjoin an alleged taking of private property for a public use.’ Ruckelshaus v. Monsanto Co., 467 U.S. 986, 1016, 104 S.Ct. 2862, 81 L.Ed.2d 815 (1984). The availability and propriety of injunctive relief are other issues to be resolved by the district judge in the first instance.”

So the case returned to the district court. Several months later the state, having in response to our decision amended its Unclaimed Property Act to provide for payment of interest on property to which the owner had made a valid claim, Ind.Code §§ 32-34-1-9.1, 32-34-1-30 (effective July 1, 2014), moved to dismiss the suit as moot. The plaintiff, objecting, asked the district court, pursuant to our judgment, to enter a declaratory judgment and also to award the attorneys’ fees incurred in prosecuting the appeal that had resulted in our judgment. (The plaintiff is not seeking an award of fees for any other part of the litigation in either the district court or this court.) The district judge refused, dismissed the suit as moot, and later denied the motion for attorneys’ fees primarily on the ground that, the suit having been dismissed, the plaintiff was not a prevailing party. The plaintiff has appealed.

The district judge was annoyed at the plaintiff because on remand from our court she’d asked permission to file an amended complaint that would have converted the suit to a class action. She did that because of intimations that the state would, despite our decision, compensate only the plaintiff, forcing the multitude of similarly situated creditors to bring their own suits. But she withdrew that request (as distinct from her request for an award of attorneys’ fees) when the state amended the Unclaimed Property Act. For the amendment mooted her federal claim for damages by entitling her to payment by the state of the interest that she had sought in her lawsuit.

By amending the statute the state conceded that it owed the interest to the plaintiff. But its concession could not deprive the plaintiff of her status as the prevailing party in the litigation. Our decision had preceded the amendment of the *831 statute and by bolding that she was entitled to damages equal to the unpaid interest had made her the prevailing party. See National Rifle Association of America, Inc. v. City of Chicago, 646 F.3d 992, 994 (7th Cir.2011). She would not have been the prevailing party had the state, as in Zessar v. Keith, 536 F.3d 788, 797 (7th Cir.2008), amended its law before our decision — that would have mooted the case and we would have had to dismiss it for want of jurisdiction, thus not deciding the merits and not ordering any relief.

“[Enforceable judgments on the merits ... create the ‘material alteration of the legal relationship of the parties’ necessary to permit an award of attorney’s fees” under federal statutes (in this case 42 U.S.C. § 1988(b)) that authorize such awards. Buckhannon Board & Care Home, Inc. v. West Virginia Dept. of Health & Human Resources, 532 U.S. 598, 604, 121 S.Ct. 1835, 149 L.Ed.2d 855 (2001). “[Rjelief need not be judicially decreed in order to justify a fee award under § 1988. A lawsuit sometimes produces voluntary action by the defendant that affords the plaintiff all or some of the relief he sought through a judgment — e.g., a monetary settlement or a change in conduct that redresses the' plaintiffs grievances.” Hewitt v. Helms, 482 U.S. 755, 760-61, 107 S.Ct. 2672, 96 L.Ed.2d 654 (1987). That is what happened in this case. It is not a case in which by filing a lawsuit a plaintiff prompts a change in law — the “catalyst theory” of prevailing-party status rejected in the Buckhannon case. 532 U.S. at 609-10, 121 S.Ct. 1835. Nor is it a case like Hewitt, in which the appellate court explicitly conditioned judgment in the plaintiffs favor on whether he could prove that the defendants were not entitled to official immunity. 482 U.S. at 758, 107 S.Ct. 2672.

At the oral argument of the current appeal, the state argued that the sovereign immunity conferred on it by the Eleventh Amendment would have barred the plaintiffs claim for damages or alternatively that the defendants, being sued in their official capacities (making this effectively a suit against the state), aren’t “person[s]” within the meaning of section 1983, the statute under which the plaintiff sued. The state briefed these alternative arguments in the district court but not in either appeal.

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Cite This Page — Counsel Stack

Bluebook (online)
794 F.3d 828, 2015 U.S. App. LEXIS 12813, 2015 WL 4496721, Counsel Stack Legal Research, https://law.counselstack.com/opinion/katherine-cerajeski-v-greg-zoeller-ca7-2015.