Argued October 8, 2014.
Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 12 C 2921 -- Sharon Johnson Coleman, Judge.
For Orlando Brown, Plaintiff - Appellant: Denise M. Mercherson, Attorney, Law Office of Denise M. Mercherson, Chicago, IL.
For City of Chicago, Defendant - Appellee: Kerrie Maloney Laytin, Attorney, Office of The Corporation Counsel, Appeals Division, Chicago, IL.
For Chicago Police Board, Defendant - Appellee: Michael V. Casey, Attorney, Varga, Berger, Ledsky, Hayes & Casey, Chicago, IL.
Before POSNER, FLAUM, and SYKES, Circuit Judges.
Posner, Circuit Judge.
The plaintiff, a former Chicago police officer, is black; claiming to have been
discriminated against by his white supervisor, he filed suit against the City of Chicago in state court, charging racially motivated harassment, and retaliation for complaining about the harassment, all in violation of the Illinois Human Rights Act. While that suit was pending, the Chicago Police Board fired him--in retaliation, he alleges, for the internal complaints about harassment that he had made before he filed suit. Rather than amend his state court complaint to add a charge that his firing had constituted harassment and retaliation, he filed the present suit in federal district court, alleging that the City and the Police Board (and members of the Board, whom we can ignore) had fired him on racial grounds (Count I) and also in retaliation for his earlier complaining about discrimination (Count II), all in violation of 42 U.S.C. § 1981. The complaint also contains (in Count III) a state-law claim against the Police Board under the Illinois Code of Civil Procedure, Administrative Review, 735 ILCS 5/3-101 et seq., challenging the Board's decision to fire him, and a federal due process claim.
The district judge stayed the federal suit while the state court suit was pending. That court had already dismissed Brown's claim of harassment, leaving the claim of retaliation pending. Brown moved the state court to dismiss that claim as well, thus terminating his state court suit, but asked that the dismissal be without prejudice. The court obliged. The docket sheet terms the dismissal a " Voluntary Dismissal W[ith] Leave to Refile-Allowed."
With the state court suit dismissed, the district judge lifted the stay of Brown's federal suit. The judge then dismissed Count III on the ground that there was no federal subject-matter jurisdiction because it was purely a state-law claim (she seems to have overlooked the federal due process claim that was also alleged in the count). The dismissal was with prejudice. It should not have been. The judge was not deciding the merits of the claim or finding that it had been filed in bad faith and therefore that Brown should be forbidden to refile it in any court.
Later the judge dismissed Brown's other two claims--retaliation and racial discrimination (the latter claim Brown had called harassment in his state court suit, but the factual allegations were the same)--on the merits, as barred by res judicata. But in the same order she amended her earlier order dismissing the state-law Administrative Review claim to say that if perchance she had supplemental jurisdiction over that claim (rather than lacking subject-matter jurisdiction, as she had ruled), she was relinquishing jurisdiction to the state courts pursuant to 28 U.S.C. § 1367(c)(3), which would be a dismissal without prejudice.
Whether the dismissal of the retaliation and discrimination claims by the state court is res judicata in Brown's federal suit is an issue of Illinois state law. 28 U.S.C. § 1738. He argues that under that law a voluntary dismissal is not res judicata because it is not a judgment on the merits and only judgments on the merits are res judicata. That is indeed the general rule, in Illinois as elsewhere. Rein v. David A. Noyes & Co., 172 Ill.2d 325, 665 N.E.2d 1199, 1204, 216 Ill.Dec. 642 (Ill. 1996). But there is an exception for cases in which the dismissal follows the rejection of all or some of the ...