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Fontana v. Elrod


decided: August 19, 1987.


Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 85 C 2424 James B. Moran, Judge.

Coffey and Ripple, Circuit Judges, and Eschbach, Senior Circuit Judge.

Author: Ripple

RIPPLE, Circuit Judge

Appellants, former employees of the Cook County Sheriff's Office, are members of the class certified in Burns v. Elrod. After their petition to file a late claim in the class settlement was denied on the ground that the notice to the class of the settlement had been adequate, Burns v. Elrod, 757 F.2d 151, 154 (7th Cir. 1985), they commenced a new class action on behalf of former employees of the Sheriff's Office who were not included in or did not receive notice of the settlement in Burns. In this suit, the appellants sought the same relief as was requested in the original case. The district court dismissed the complaint. We affirm.



To understand the procedural history of this case, we must review the background and disposition of the original class action in Burns. In January and February 1971, the appellants were discharged from their positions with the Sheriff's Office after the appellee, Sheriff Elrod, a Democrat, replaced the incumbent Sheriff, a Republican, in December 1970. On March 10, 1971, other employees of the Sheriff's Office initiated a class action. They alleged that the Sheriff had discharged them for political reasons in violation of the first and fourteenth amendments. The complaint sought injunctive and declaratory relief, back pay, reinstatement and punitive damages. The district court dismissed the complaint. The dismissal was reversed by this court, Burns v. Elrod, 509 F.2d 1133 (7th Cir. 1975), and this court's decision was affirmed by the Supreme Court, Elrod v. Burns, 427 U.S. 347, 49 L. Ed. 2d 547, 96 S. Ct. 2673 (1976). On remand, the district court certified the class under Rule 23(b)(2) of the Federal Rules of Civil Procedure. The present appellants, while not named plaintiffs, were members of the class.

Prior to trial, a settlement agreement was reached which, while it somewhat narrowed the class, still included the present plaintiffs. The district court ordered that notice be sent to each member of the class.*fn1 The district court later determined that the best practicable notice had been provided and, following a fairness hearing, approved the settlement on June 26, 1981.

On January 25, 1983, more than a year and a half after the deadline, the appellants petitioned to file their late claims. After the petitions were denied by the district court on May 31, 1983, they appealed to this court on the ground that the notice of settlement provided to class members was inadequate. This court determined that the notice given the class was adequate and affirmed the district court's denial of the petition to file a late claim. Burns v. Elrod, 757 F.2d 151 (7th Cir. 1985).

The appellants then filed this action in the district court. The court dismissed the complaint on the ground of res judicata.*fn2 It held that the prior litigation, which determined that notice of the settlement had been adequate, barred the appellants from filing another suit. Fontana v. Elrod, No. 85 C 2424, mem. op. at 7 (N.D. Ill. Apr. 25, 1986); R.22 at 7 [hereinafter cited as Mem. op.].



The district court decided this case on the defendant's motion to dismiss. In reviewing the district court's dismissal, the factual allegations in the plaintiffs' complaint must be accepted as true. International Caucus of Labor Comm. v. City of Chicago, 816 F.2d 337, 340 (7th Cir. 1987). "Dismissal is therefore only proper where 'it appears beyond doubt that [the plaintiffs] can prove no set of facts in support of [their] claims which would entitle [them] to relief.'" Pryzina v. Ley, 813 F.2d 821, 822 (7th Cir. 1987) (per curiam) (quoting Fromm v. Rosewell, 771 F.2d 1089, 1091 (7th Cir. 1985), cert. denied, 475 U.S. 1012, 106 S. Ct. 1188, 89 L. Ed. 2d 304 (1986)). Accordingly, we review the district court's holding de novo.


In dealing with the situation presented by this litigation, the district judge hardly was faced with an "ordinary" problem in complex litigation. There is nothing "ordinary" about a case that endures for nearly two decades and produces the convoluted procedural history before us here. In resolving the dispute before him, the district judge had to work with rules crafted for far more "ordinary" situations and arrive at a solution that was in harmony with the purpose of those rules. We believe he was successful.

Analysis of the problem presented by this case becomes significantly easier when we recognize several basic factors. First, the appellants clearly are members of the class certified by the district court in 1980. Second, the district court required that all members of that class be given, to the extent it was possible, individual notice of the settlement. As the district court noted, "there cannot be much question that if the plaintiffs had received notice and if they thought the settlement was unfair, their only recourse would have been to raise objections at the fairness hearing and to pursue them on appeal if they were not sustained." Mem. op. at 5.

Appellants' failure to participate in the settlement and to raise whatever objections they had to the settlement at the fairness hearing was due, they allege, to the lack of notice. They brought their complaint with respect to the adequacy of notice to this court and this court held -- albeit in what it termed "a close one" -- that defendants' attempts at notice had been reasonable. 757 F.2d at 154.


The simple recitation of these factors should end the matter. The appellants are members of the Burns class and are bound by the terms of the settlement because notice to the class was reasonable. Nevertheless, the appellants submit that, at this late date, they can begin anew and commence a class action, making the same allegations as those made in the original action. In their view, the following analysis supports that conclusion. First, they note that the limitations period was tolled from the filing of the class action in the original Burns litigation. See Crown Cork & Seal Co. v. Parker, 462 U.S. 345, 76 L. Ed. 2d 628, 103 S. Ct. 2392 (1983); American Pipe and Constr. v. Utah, 414 U.S. 538, 38 L. Ed. 2d 713, 94 S. Ct. 756 (1974). Because they never received actual notice of the suit or its settlement, the limitations period continued to be tolled. This court's determination that they "are too late to participate in the settlement pie," Appellant's Br. at 12, does not, they contend, bar their bringing a new action. In support of this conclusion, they rely upon the following passage from this court's earlier opinion holding that the methodology for notifying the class was reasonable:

Petitioners finally argue that denial of their claims violates their due process rights. Due process requires that class members generally must receive notice of the terms of settlement. See Eisen, supra, 417 U.S. at 173-77, 94 S. Ct. at 2150-52; Simer v. Rios, 661 F.2d 655, 666-67 (7th Cir. 1981); Johnson v. General Motors Corp., 598 F.2d 432, 436-38 (5th Cir. 1979). Absent such notice, courts have held that the entry of judgment in a (b)(2)-type class action does not bar an unnotified class member from seeking damages in a later suit arising out of the same injuries complained of in the original class action. See Crowder v. Lash, 687 F.2d 996, 1008-09 (7th Cir. 1982) (dictum); Johnson, supra. Cf. Cotton v. Hutto, 577 F.2d 453, 454 (8th Cir. 1978); Jones-Bey v. Caso, 535 F.2d 1360, 1361-62 (2d Cir. 1976). But petitioners do not seek to file a new action; rather, they belatedly want to share in the settlement pie. Due process does not require this under the circumstances of this case.

Burns, 757 F.2d at 156 (footnote omitted).

In our view, the appellants make this passage, clearly dicta in the court's overall discussion, bear far more weight than it was ever meant to carry. Class actions under Fed. R. Civ. P. 23(b)(2), such as Burns, are primarily designed for injunctive and declaratory relief and, when employed in this fashion, do not require notice nor an opportunity to opt out of the class.*fn3 However, when monetary damages are sought in a (b)(2) class action, "due process does require notice before the individual monetary claims of absent class members may be barred." Johnson v. General Motors Corp., 598 F.2d 432, 433 (5th Cir. 1979). While the notice must be adequate, it is not necessary that each member of the class actually receive that notice. "An absent class member will be bound by any judgment that is entered if appropriate notice is given, even though that individual never actually received notice." 7B C. Wright, A. Miller & M. Kane, Federal Practice and Procedure ยง 1789, at 253 (2d ed. 1986).

Here, as the district court pointed out, "individual monetary recovery was both sought and obtained in the original action." Mem. op. at 7. Moreover, as this court determined in the earlier appeal, notice comporting with due process was given to members of the class. Burns, 757 F.2d at 156. We cannot reopen that determination at this point. Accordingly, under the circumstances of this case, the appellants cannot, at this late date, commence another action.


Because we conclude that the principle of res judicata bars the appellants from filing their class action suit, we affirm the judgment of the district court.




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