Retired Chicago Police Ass'n v. City of Chicago

76 F.3d 856, 1996 WL 56964
CourtCourt of Appeals for the Seventh Circuit
DecidedFebruary 13, 1996
DocketNos. 94-1885, 94-2404, 94-2580, 94-2719, 94-2950 and 94-2965
StatusPublished
Cited by114 cases

This text of 76 F.3d 856 (Retired Chicago Police Ass'n v. City of Chicago) 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
Retired Chicago Police Ass'n v. City of Chicago, 76 F.3d 856, 1996 WL 56964 (7th Cir. 1996).

Opinion

KANNE, Circuit Judge.

This case concerns the propriety of the district court’s denial of the associational standing of the Retired Chicago Police Association (“RCPA”) to represent its members against the City of Chicago, several city officials, and the Policemen’s Annuity and Benefit Fund. Also at issue are the district court’s decisions to sanction the attorney for the RCPA, to enforce those sanctions through civil contempt, and to deny supplemental sanctions sought by the Fireman’s Annuity and Benefit Fund to compensate it for the costs of enforcing the sanctions award.

This is the second time this matter has been appealed to this court. See Retired Chicago Police Ass’n v. City of Chicago, 7 F.3d 584 (7th Cir.1993) (“RCPA J”). Our previous decision, as well as a related case brought in Illinois state court, City of Chicago v. Korshak, 206 Ill.App.3d 968, 151 Ill.Dec. 797, 565 N.E.2d 68 (1990), appeal denied, 139 Ill.2d 594, 159 Ill.Dec. 105, 575 N.E.2d 912 (1991), cert. denied, 503 U.S. 918, 112 S.Ct. 1291, 117 L.Ed.2d 515 (1992), contains many of the background facts of this dispute. In this opinion, we review only those facts pertinent to this appeal.

I

This case originally began as an action by the RCPA against the City of Chicago and several city officials (collectively the “City”) and the city’s four pension funds (“Funds”). The RCPA sought relief under 42 U.S.C. § 1983 on the grounds that a settlement entered into by the City and the Funds violated provisions of the United States and Illinois Constitutions. The RCPA further asserted breach of contract, estoppel, and breach of fiduciary duty claims.

The settlement that is at the center of this dispute was the result of a state declaratory judgment action brought by the City against the Funds, wherein the City sought both a declaration that it had paid more than it was legally obligated to pay for the health care of the Funds’ members and a determination of the City’s future obligations. City of Chicago v. Korshak, No. 87 CH 10134 (Chancery Div., Circuit Court Cook County, Dec. 12, 1989). The Funds counterclaimed, and several annuitants successfully intervened. The annuitants were certified as representatives of a class of annuitants that retired from City employment on or before December 31, 1987 (the “Korshak class”). The RCPA was not a party to this litigation; it had made motions [861]*861to intervene and for class certification, but those motions were denied.

Prior to the state court decision, the Funds and the City entered into a settlement under which they agreed to cosponsor legislation that would change the Illinois Pension Code. The legislation, which was eventually enacted, increased the amount the Funds would contribute to the health care premiums of their annuitants, required the City to pay at least 50 percent of the cost of the annuitants’ health care premiums through 1997, and made the annuitants responsible for paying the remaining portion of their premiums. The annuitants challenged the fairness of the settlement; they had wanted to compel the City to continue providing the prelitigation health care coverage and to preclude the City from raising the cost of that coverage. The trial court found the settlement to be fair, and the settlement was affirmed on appeal. Korshak, 151 Ill.Dec. at 801, 565 N.E.2d at 72.

During the pendency of the appeal, the RCPA filed a class action against the City and the Funds in federal court. The proposed class consisted of the annuitants from the four Funds who had begun participation in the City’s Healthcare Annuitant Plan after December 31, 1987 (the end date of the Korshak class) but before August 23, 1989 (the date that the settlement legislation became effective). A group of individuals participating in the Policemen’s Fund and a political action committee sought to intervene. The attorney for the RCPA, Clinton A. Krislov, also filed a separate complaint (one nearly identical to the RCPA complaint) on behalf of the same class that had intervened in the Korshak litigation (the “Ryan class”). The two cases were consolidated.

The district court dismissed the Ryan class on res judicata grounds and, after denying the RCPA’s motion for class certification, dismissed the remainder of the case on the ground that the RCPA lacked associational standing. The district court also denied motions for intervention and class certification filed by the would-be intervenors. The RCPA, the Ryan class, and the would-be intervenors appealed.

We affirmed the district court’s rulings on all of the issues appealed, except the denial of the RCPA’s associational standing. RCPA I, 7 F.3d at 609. We reversed and remanded that issue to the district court. The effect of our affirmance of the denial of class certification was to dismiss three of the four Funds from the litigation. The remaining Fund, the Policemen’s Annuity and Benefit Fund, remained in the litigation because members of the RCPA were participants in that fund.

While the case was on appeal to this court, the City and the Fireman’s Fund filed post-dismissal motions for sanctions against Kris-lov for alleged abuses that occurred during the litigation prior to appeal. The City sought sanctions under both Fed.R.Civ.P. 11 and 28 U.S.C. § 1927, and the Fireman’s Fund sought sanctions only under Rule 11. The district court referred the matter to a magistrate judge pursuant to 28 U.S.C. § 636(b)(1)(A). The magistrate judge issued an order that the City and the Fireman’s Fund were entitled to sanctions. Based on submissions from the City and the Fireman’s Fund, the magistrate judge issued a report recommending sanctions against Krislov of $42,003.34 to the City and $45,285.00 to the Fireman’s Fund. After rejecting objections from Krislov, the district court eventually ordered Krislov to pay all the sanctions recommended by the magistrate judge.

The district court’s order directed Krislov to pay the sanctions to the City and the Fireman’s Fund by February 22, 1994. After Krislov failed to meet that deadline, as well as successive deadlines, the district court held him in civil contempt. Krislov paid the sanctions and accrued fines after the district court granted a writ of body attachment filed by the Fireman’s Fund. The district court later denied the Fireman’s Fund’s request for supplemental sanctions for the costs it incurred in enforcing the sanctions award.

After remand of the associational standing issue, the district court again entered an order dismissing the case for lack of associational standing. The RCPA filed a Fed.R.Civ.P. 59(e) motion to alter or amend [862]*862the judgment,1 which the district court denied.

II

Prior to reviewing the RCPA’s challenge to the district court’s decision to dismiss the case for lack of associational standing, we must first ascertain the procedural mechanism by which standing was denied.

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