Deborah O. Cooney, Plaintiff Appellant, Cross Appellee,
Rhonda Casady, et al., Defendants Appellees, Cross Appellants.
Argued September 18, 2012
Appeals from the United States District Court for the Northern District of Illinois, Eastern Division. No. 1:09-cv-01920 — Elaine E. Bucklo, Judge.
Before Flaum, Sykes, and Tinder, Circuit Judges.
Tinder, Circuit Judge.
This case arises out of Deborah O. Cooney's administrative appeal of the Illinois Department of Children and Family Services' (DCFS) indicated finding against her of mental injury and substantial risk of harm to her children. Cooney claims that Rhonda Casady and Andrew Sosnowski, counsel for DCFS in that administrative appeal, conspired with Lesley Magnabosco who was hired by DCFS to transcribe the administrative appeal hearing to deprive Cooney of her due process rights by altering the transcripts of those proceedings. Cooney appeals the district court's grant of summary judgment to the defendants, and the defendants appeal the denial of their petition for attorneys' fees and costs under 42 U.S.C. § 1988 and Federal Rule of Civil Procedure 11. They also seek an award of their costs and attorneys' fees under Federal Rule of Appellate Procedure 38. We affirm the district court's judgments and order Cooney to show cause why an award under Rule 38 should not be entered against her.
Cooney divorced her husband and obtained sole custody of their two minor sons. A few years later, the ex-husband petitioned for change of custody in Illinois state court. A court- appointed expert diagnosed Cooney as having "Munchausen [Syndrome] by Proxy, " "in which 'an individual produces or feigns physical or emotional symptoms in another person under his or her care. Usually the victim is a young child, and the person producing the symptoms may be the child's parent or caretaker, most often the mother.'" Cooney v. Rossiter, 583 F.3d 967, 969 (7th Cir. 2009) (citations omitted), cert. denied, 130 S.Ct. 3322 (2010). A therapist hired by the ex-husband for the children reported to DCFS that Cooney was abusing the children; as a result, DCFS commenced an administrative proceeding against Cooney. After an investigation, DCFS entered an indicated finding of mental injury against her. 
Cooney filed an administrative appeal of the indicated finding. Casady and Sosnowski represented DCFS in the appeal, which was heard by Administrative Law Judge Daniel Baechle. The ALJ recorded the proceedings on microcassettes (and he was the only one who operated the recorder, changed the tapes, and maintained the tapes). Cooney, however, retained a private court-reporting company to transcribe the hearing as it occurred, creating the "Fishman transcripts." DCFS denied Cooney's appeal based on the ALJ's findings and recommendations, and Cooney filed a complaint for administrative review in the state circuit court.
Once the petition for administrative review was filed, Magnabosco began transcribing the administrative-appeal recordings. The parties agree that Magnabosco was not a certified shorthand reporter. Cf. Cooney v. Magnabosco, 943 N.E.2d 290, 296 (Ill.App.Ct. 2011) (rejecting Cooney's contention "that anyone who uses shorthand to report a proceeding in this state is automatically practicing as a 'certified shorthand reporter' or holding herself out as such"), appeal denied. Magnabosco was an independent contractor for Benedia Certified Court Reporting, which had a contract with DCFS to provide official transcripts of the tape-recorded administrative hearings. She transcribed the proceedings by listening to the recordings on the microcassettes. She was the only person who transcribed Cooney's DCFS administrative proceedings (but there is no evidence that Casady or Sosnowski knew this).
In early May 2007, Magnabosco completed transcripts from September 2006 proceedings; DCFS representatives had access to them on that same date (and could have known that Magnabosco had transcribed them). Cooney does not claim that these transcripts were "altered, " however. (Cooney uses the term "alter" in sort of a special way, as we will explain below, and we use it as she does.) Thereafter, Magnabosco prepared transcripts for the proceedings held on October 25, 26, and 27, 2006, January 30, 2007, and February 13, 2007. These are the transcripts that were allegedly "altered." When Cooney reviewed them, she compared them with the Fishman transcripts and found discrepancies, which form the basis of her complaint here. Because of these discrepancies, the parties agreed to have the Fishman transcripts, rather than Magnabosco's transcripts, serve as the official transcripts of the administrative hearings. Four other prehearing conferences in the administrative appeal had not been transcribed by Fishman; the audiotapes from those proceedings were sent to DiGiovanni Court Reporters for transcription. Apparently, these DiGiovanni transcriptions also contained discrepancies when compared to Magnabosco's transcriptions.
Cooney filed a two-count complaint against the defendants. Count I alleged that they conspired to deprive her of her due process rights in violation of 42 U.S.C. § 1983. Count II alleged a state-law claim for intentional infliction of emotional distress. With respect to her § 1983 claim, her theory is that the DCFS transcripts were "altered" by Magnabosco at Casady's and Sosnowski's direction, and that this caused extensive delay and expense on Cooney's part to convince the circuit court to use the Fishman transcripts as the official record.
The district court denied the defendants' motions to dismiss the complaint, concluding that the complaint stated a § 1983 claim and a claim for intentional infliction of emotional distress. Cooney v. Casady, 652 F.Supp.2d 948, 958–59 (N.D. Ill. 2009). The court held that Cooney was not required to plead a meeting of the minds and was required only to indicate "the parties, general purpose, and approximate date, so that the defendant has notice of what he is charged with." Id. at 957 (quotation and citation omitted). The court also concluded that Cooney alleged a sufficient constitutional injury, namely, a violation of her right to procedural due process by undermining her right to a fair hearing and delaying her ability to obtain a meaningful remedy in state court. Id. However, the court stated: "Let there be no mistake: plaintiff's conspiracy allegations have a distinctly paranoid gestalt, and it is unlikely that her claims have merit." Id. at 958. The defendants' motion for reconsideration was denied. Cooney v. Casady, 680 F.Supp.2d 942, 943 (N.D. Ill. 2010).
Following discovery, the district court granted the defendants summary judgment on the § 1983 conspiracy claim and the claim for intentional infliction of emotional distress. Cooney v. Casady, 746 F.Supp.2d 973 (N.D. Ill. 2010). The court reasoned:
[P]laintiff has put forward no direct or sufficient circumstantial evidence of a conspiracy [among defendants]. Defendants have put forward undisputed evidence that neither Casady nor Sosnowski ever met Magnabosco, ever spoke to Magnabosco, or had any kind of communication with her whatsoever. Plaintiff's assertions that Casady and Sosnowski could have known Magnabosco's identity and contacted her is not supported by any evidence that they did so.
Id. at 975. The court rejected Cooney's claim that a jury should determine whether the discrepancies between the Fishman and Magnabosco transcripts evidenced a conspiracy among the defendants, explaining:
Taking all these discrepancies together (and I have reviewed all of those listed in Exhibit 3 in detail), I cannot conclude that these discrepancies are sufficient to prove a conspiracy, especially given the circumstances under which the Magnabosco transcripts were created (via microcassette tapes) and, most importantly, when there is no evidence that the three defendants ever met or communicated with each other. Based on this evidence, no reasonable jury could conclude that the defendants conspired together to alter the official transcript.
Id. at 976–77. Because the claim for intentional infliction of emotional distress was based on the same underlying conduct, the court concluded that summary judgment for the defendants was proper because Cooney had "no proof of any conduct by defendants that was 'extreme and outrageous.'" Id. at 977–78 (citation omitted).
The district court denied the defendants' subsequent motion for attorneys' fees under 42 U.S.C. § 1988 and for fees and costs under Rule 11. Orlando-Cooney v. Casady, No. 09-C- 1920, 2011 WL 995817 (N.D. Ill. Mar. 21, 2011). In addressing § 1988, the court noted that it "was an extremely close call" and concluded that Cooney's complaint, though meritless, was not frivolous because she had engaged "in some, albeit limited, investigation into this matter by engaging in a word-for-word comparison of the two transcripts." Id. at *2. The court rejected the defendants' contention that, even if Cooney's claim was not frivolous at the outset, it became frivolous when she failed to dismiss once discovery was completed. Finally, the court declined to award Rule 11 sanctions because none of the additional ten ...