United States District Court, N.D. Illinois, Eastern Division
July 20, 2004.
EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Plaintiff, and CATHERINE COPELLO and ALLISON KENNEDY, Plaintiffs-Intervenors,
CUSTOM COMPANIES, INC., CUSTOM EXECUTIVE GROUP, INC. and CUSTOM DISTRIBUTION NETWORK, INC. Defendants.
The opinion of the court was delivered by: HARRY LEINENWEBER, District Judge
MEMORANDUM OPINION AND ORDER
Before the Court is the EEOC's Motion for Entry of a Protective
Order and Motion to Compel Defendant to Produce a Witness
Pursuant to Rule 30(b)(6). Custom Companies has agreed to produce
the Rule 30(b)(6) witness, and thus that Motion is denied as
The EEOC moves for a protective order barring Defendants from
proceeding with state court litigation against a class member,
who will be identified as "Doe" in this opinion. The EEOC raises
two arguments in support of its motion. First, the EEOC claims
that the state court litigation is retaliatory and will cause
irreparable harm to Doe and the EEOC. Second, the EEOC contends
that the state court litigation violates the protective order in
The overall facts are undisputed. Doe performed services for
Custom from approximately October 2000 to November 2001. On
November 20, 2003, counsel for Custom sent a letter to the EEOC
requesting that Doe be dropped from the class because she
purportedly had been an independent contractor and not an
employee. The next day, on November 21, 2003, corporate counsel
for Custom sent a letter to Doe demanding return of approximately
$19,000, which Custom claimed was the excess amount that Doe had
drawn as an advance against commissions, but had failed to repay
when her work ended in November 2001. Custom apparently did not
request these funds at any point during the two years following
Doe's departure. In December 2003, the EEOC sent a letter to
counsel for Custom warning that it considered the threats of
litigation against Doe to be retaliatory and in violation of the
protective order. In May 2004, Custom filed suit against Doe in
Illinois state court, seeking return of the excess funds.
The EEOC's request for a protective order here is effectively a
demand for an injunction aimed at the state court proceedings.
Basic concepts of federalism, coupled with the controlling case law, instruct that only in the rarest of circumstances will a
federal court interfere with the right of a state court to
adjudicate state interests. A federal court may enjoin a
lawsuit if it is retaliatory and baseless. See, e.g., Bill
Johnsons' Restaurant v. NLRB, 461 U.S. 731 (1983). If the
lawsuit has any reasonable basis in fact or law, a federal court
cannot intrude in the state court proceedings. See id. at
748-749. In addition to demonstrating that the challenged
litigation is baseless, the party seeking an injunction must also
show "equitable entitlement to an injunction," including
irreparable harm. Ramsden v. Agribank, FCB, 214 F.3d 865, 869
(7th Cir. 2000).
The EEOC argues that the state court action at issue here is
retaliatory and groundless. The EEOC notes that Custom ignored
Doe's purported obligation until after the EEOC filed suit. In
addition, Custom filed suit only after it failed to convince the
EEOC to drop Doe from the class. The EEOC also claims that Custom
has never filed a similar suit against any of its previous sales
representatives. Finally, the EEOC notes that although the state
court action alleges a breach of contract, Custom fails to attach
any contract to the complaint.
This, alone, cannot justify the injunctive relief requested
here. There is no argument that Doe indeed drew an excess against
her commissions. Doe may have valid affirmative defenses, such as
waiver, laches, or estoppel, but nonetheless Custom's complaint on its face is not so devoid of all merit to allow this Court
to interfere with the state court proceedings.
This is not to say, however, that Doe or the EEOC are without
potential recourse in the present lawsuit. Although the authority
provided by the EEOC does not support the extreme act of
enjoining state court litigation, it does establish that the EEOC
may be able to use Custom's acts as evidence of impermissible
retaliation. The nature and timing of Custom's actions appear to
be, in charitable terms, somewhat curious. A jury may view these
actions in even less charitable light. The Court, of course,
expresses no opinion on the legal significance, if any, of
Custom's acts, but rather notes only that Custom proceeds at its
own peril in this litigation.
Finally, the EEOC also argues that the state court proceeding
violates the governing protective order in this case. The parties
disagree about the scope of the governing protective order.
Unfortunately, neither party attaches transcripts of any of the
court dates during which the parameters of the protective order
were discussed. In any event, even when considering the EEOC's
version of the protective order, the operative language there
does not support the type of relief that the EEOC requests. It
states, in pertinent part: "Defendant . . . shall not have any
contact with an identified class member regarding the
allegations or defenses raised in this case." EEOC Reply Br.,
Ex. B, par. 11 (emphasis added). The plain terms of this provision indicate that
Defendants are barred solely from any discussion with identified
class members regarding the claims and defenses in this matter.
This is not a wholesale prohibition against any and all
communications otherwise, it would operate as a de facto
injunction prohibiting Custom from pursuing any potential legal
action, irrespective of the merit of such action. As noted above,
this Court does not have such plenary powers.
For the foregoing reasons, the EEOC's Motion for a Protective
Order is DENIED. The Motion to Compel Defendant Custom
Companies to Produce a Witness Pursuant to Rule 30(b)(6) is
DENIED AS MOOT. IT IS SO ORDERED.
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