August 27, 2004

Indiana Decisions - 7th Circuit Issues Five Today

Reliance Insur Co v. Raybestos Products (SD Ind., Judge Young)

Before FLAUM, Chief Judge, and DIANE P. WOOD and WILLIAMS, Circuit Judges.
DIANE P. WOOD, Circuit Judge. Once again, we confront a case in which parts of a complex situation are arguably subject to arbitration, while other parts are not. The district court thought that the arbitration agreements at issue did not encompass one part of the dispute, and thus that judicial proceedings should proceed in parallel to the arbitral proceedings. In our view, however, this construes the agreement to arbitrate too narrowly. We therefore reverse and remand for entry of an order directing the controversy in question to be submitted to arbitration. * * *

We are not unsympathetic to the concerns that motivated the district court’s decision. Busy courts do not welcome the idea of duplicative proceedings, whether before several different judicial bodies, or before some courts and some arbitral bodies. But, opposed to that concern is the right of parties to agree to alternative methods of dispute resolution, and the strong message from the Supreme Court that these agreements must be honored. If there is to be a duplicative proceeding exception, it is for Congress to add it to the FAA; it is not for us to create because one party may have put itself in a bad position. Because arbitration is a creature of agreement, parties often find ways to minimize the risk of inconsistent results through contractual provisions that either provide an exception to the duty to arbitrate for multi-party situations, or otherwise to find ways to coordinate duplicative proceedings.

In this case, however, Raybestos must live up to its bargain and arbitrate its claims against USF&G and Westchester. The order of the district court refusing to compel arbitration is REVERSED and the case is REMANDED to the court for entry of such an order.

Thomas, Carl E. v. Guardsmark Inc. (ND Ill.)

Before POSNER, DIANE P. WOOD, and EVANS, Circuit Judges.
DIANE P. WOOD, Circuit Judge. On November 16, 2001, Guardsmark, Inc. indefinitely suspended its employee, security officer Carl Thomas, after he suggested in a televised interview that Guardsmark did not adequately screen its employees for prior felony convictions. Almost a year later, Thomas filed suit against Guardsmark, alleging retaliatory discharge in violation of Illinois public policy. After removing to federal district court, Guardsmark successfully moved for judgment on the pleadings pursuant to FED. R. CIV. P. 12(c). Guardsmark argued, and the district court agreed, that Thomas was "effectively discharged" at the time he was suspended, and thus his action was barred by a six-month limitations period found in his Employment Agreement with Guardsmark. For the reasons discussed below, we reverse and remand to the district court for development of the record regarding Thomas's employment status after Guardsmark indefinitely suspended him in November 2001.
K-Mart Corporation v. Simmons, Wilhemina (ND Ill.)

Question of timely filing of bankruptcy claim. Affirmed.

Sternes, Jerry v. Rodriquez, Neftaly (ND Ill.)

Before EASTERBROOK, DIANE P. WOOD, and WILLIAMS, Circuit Judges.
EASTERBROOK, Circuit Judge. Several months prior to Neftaly Rodriguez’s trial for murder, the prosecutor filed a motion to disqualify Joseph Brent as one of his lawyers. Brent also represented detective John McMurray in an unrelated real estate deal. The prosecutor told the judge that McMurray was an “integral part of the case” against Rodriguez because he had participated in the investigation of one of Rodriguez’s co-defendants. According to the prosecutor, Brent’s simultaneous representation of Rodriguez and McMurray created a “per se conflict of interest”. * * * The court prevented Brent from rendering Rodriguez any further assistance. When trial arrived, however, the prosecutor failed to call McMurray as a witness. Rodriguez was convicted and on appeal argued that Brent had been disqualified improperly.
Biondo, Peter v. City of Chicago (ND Ill.)
Before EASTERBROOK, MANION, and WILLIAMS, Circuit Judges.
EASTERBROOK, Circuit Judge. [This case concerns the City of Chicago’s use of race in making promotional decisions. The main opinion concludes ...] Perhaps what we have said will lead the litigants to resolve these remaining issues (and the remaining firefighters’ claims) amicably rather than slug it out again in the courtroom. We hope so; this dispute is approaching its third decade. The judgments are vacated, and the case is remanded for proceedings consistent with this opinion. [Judge Williams writes a separate opinion, concurring in the result.]

Posted by Marcia Oddi at August 27, 2004 01:19 PM