“And it is well settled that, in interpreting a statute, the court will not look merely to a particular clause in which general words may be used, but will take in connection with it the whole statute ... and the objects and policy of the law....”
How later courts described this case
- “And it is well settled that, in interpreting a statute, the court will not look merely to a particular clause in which general words may be used, but will take in connection with it the whole statute ... and the objects and policy of the law....”
- questions of first impression are contestable
- state fraud claims fall outside the exception
Written by the judges who cited it.
The opinion
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
R. DAVID YOST, )
)
Plaintiff, ) No. 20 C 5393
)
v. ) Magistrate Judge Jeffrey Cole
)
MORGAN CARROLL, )
)
Defendant. )
MEMORANDUM OPINION AND ORDER
The defendant, Morgan Carroll, has filed a Petition to Certify for Immediate Appeal Judge
Lefkow’s Order denying his Motion to Dismiss for Lack of Subject Matter Jurisdiction. [Dkt. #20].
The facts relevant to a decision on the Petition are set forth below.
A.
This case is about some seemingly rather unusual and extravagant transactions between the
plaintiff and his daughter and her soon to be former husband, who is the defendant in this case. It
appears that over the years, plaintiff transferred to his daughter and her husband over $7 million. The
transactions were claimed in the Complaint by Mr. Yost to have been loans – not gifts. They were
evidenced by (purported) “notes,” dated April 30, 2015, and November 15, 2016. The money was
used for the purchase of first one home and then another. As payors, the couple “promised” in the
notes to repay the principal and interest, “collectively and individually.” The notes called for
interest to accrue on the principal at the rate of four percent (4%) per annum until April 30, 2020,
at which time the payors would begin paying monthly installment payments of $5,000 until all
principal and interest were repaid. Both notes were payable on demand. [Dkt. #1]. But, according
to the defendant’s Motion to Dismiss the Complaint, [Dkt. #9], the father made the “loans” secured
by notes to his daughter and her husband “so that the money provided [was] not considered a gift
taxable at 40%.” [Dkt. #9, Page 26/26]. The obligors on the “notes” never made any payments –
neither principal nor interest – on either “note.” [Dkt. #1]. Nor were they asked to by Mr. Yost. But,
then came the divorce action, followed by the present suit against Mr. Carroll.
One of the payors, Anne Yost Carroll, is the daughter of the plaintiff. She filed for divorce
on June 16, 2020. The soon-to-be-ex-father-in-law made his first ever demand for payment on the
two “notes” not long thereafter on August 28, 2020. No demand for repayment was made on Mr.
Yost’s daughter. (One is reminded of Justice Frankfurter’s quip: “The mind of justice, not merely
its eyes, would have to be blind to attribute such an occurrence to mere fortuity.” Avery v. State of
Georgia, 345 U.S. 559, 564 (1953)(Frankfurter, J., concurring).
Mr. Yost then filed suit two weeks later on September 11, 2020. The case was assigned to
Judge Lefkow. On November 10, 2020, the defendant filed a Motion to Dismiss the Complaint,
claiming lack of jurisdiction. The motion argued that the dispute fell within the so-called “domestic
relations” exception to federal jurisdiction. [Dkt. #10]. Judge Lefkow had the parties brief the
matter, [Dkt. #11], and thereafter took it under advisement. The motion was ultimately denied on
August 18, 2021. [Dkt. #18].
In her two-page ruling, Judge Lefkow explained that the “domestic relations” exception has
both a core and a penumbra. Her explanation left no doubt of her analysis and assessment of the
issues as they pertained here:
The penumbra of the exception consists of ancillary proceedings, such as a suit for
the collection of unpaid alimony, that state law would require be litigated as a tail to
the original domestic relations proceeding.
This case does not fall within the core of the domestic relations exception because
the court is not being asked to issue a decree as to divorce, alimony, or child custody.
2
Nor does this case fall under the penumbra of the domestic relations exception
because it does not require an ancillary proceeding. While there are domestic
undertones in this litigation, the claim before the court is a straight-forward breach
of contract based on unpaid promissory notes, the resolution of which is unrelated
to the domestic issue pending in state court. A case does not fall within the
exception merely because the plaintiff’s allegations “touch on the subject of
marriage.” See Arnold v. Villarreal, 853 F.3d 384, 387 n.2 (7th Cir. 2017) (state
fraud claims fall outside the exception); Loubser v. Thacker, 440 F.3d 439, 440–42
(7th Cir. 2006) (same); Friedlander [v. Friedlander, 149 F.3d [739,] 739–41 (7th
Cir. 1998) (same for state claims for intentional infliction of emotional distress).
[Dkt. #18, at 2 ].
Three weeks later, on September 7, 2021, the defendant filed with Judge Lefkow a Petition
to Certify an Interlocutory Appeal Under 28 U.S.C. § 1292(b), [Dkt #20], which provides:
When a district judge, in making in a civil action an order not otherwise appealable
under this section, shall be of the opinion that such order involves a controlling
question of law as to which there is substantial ground for difference of opinion and
that an immediate appeal from the order may materially advance the ultimate
termination of the litigation, he shall so state in writing in such order.
Judge Lefkow set a briefing schedule on the Petition on September 9, 2021, with the first
brief being due on September 21, 2021. [Dkt. #21]. However, on September 16, five days before the
first brief was due, the parties jointly consented in writing to my jurisdiction. [Dkt. #22]. Thereafter,
the plaintiff filed his response brief in opposition to the Petition for Certification. [Dkt. #26]. The
reply brief was filed in a timely manner thereafter. [Dkt. #28].
B.
Before turning to the merits, there are certain questions that should be addressed: the first
is whether a “magistrate judge” has the power to enter (or deny) a § 1292(b) certification, since the
statute provides in terms that the certification is to come from the “district judge” who, “shall be of
the opinion” that the contested order involves a controlling question of law as to which there is a
substantial ground for difference of opinion and that an immediate appeal from that order, etc.
3
The first question is the simplest. It is can the certification only come from a “district judge”
or can a magistrate judge certify a matter for interlocutory appeal. We need not resort to the
principle that statutes no less than private documents are often to be interpreted by the spirit which
vivifies and not by the letter which killeth, for § 1292(b) has not been construed in a way that
requires that the Order come from a “district judge” – i.e. an Article III judge. No case of which we
are aware suggests, let alone holds, that a magistrate judge – even though not an Article III
appointee – lacks the authority to make a § 1292(b) certification. The cases are clear that a
magistrate judge overseeing a case by unanimous consent of the parties has authority under §
1292(b). See, e.g., Pozo v. McCaughtry, 286 F.3d 1022 1023 (7th Cir. 2002)(Easterbrook, J.);
Chelettt v. Harris, 229 F.3d 684, 686 (8th Cir. 2000); Vitols v. Citizens Banking Co., 984 F.2d 168,
169 (6th Cir. 1993). See also LeVick v. Skaggs Cos., Inc., 701 F.2d 777, 778 n. 1 (9th Cir. 1983);
Central Soya Co., Inc. v. Voktas Inc., 661 F.2d 78 (7th Cir. 1981).1
Nor is it an impediment to proceeding under § 1292(b) that the judge who made the Order
from which an interlocutory appeal is sought is not the judge who is asked to make a § 1292(b)
certification. If the statute were read literally, only the district judge who originally issued the
challenged order could issue a § 1292(b) certification. Such a restrictive, hyper-literal reading of
§ 1292(b) would be at odds with the way courts routinely function. The inescapable reality is that
judges die, retire, and recuse themselves – all of which require reassignment of the case to a new
judge. If read literally, any reassignment to a new judge would foreclose the ability of that successor
to rule on a § 1292(b) request for interlocutory review. But blind literalness is not conducive to a
sound reading of any statute. The Supreme Court has repeatedly warned against the dangers of an
1 Neither party has objected to my proceeding under § 1292(b).
4
approach to statutory construction which confines itself to the bare words of the statute. Bob Jones
University v. United States, 461 U.S. 574, 586 (1983)(“And it is well settled that, in interpreting a
statute, the court will not look merely to a particular clause in which general words may be used, but
will take in connection with it the whole statute ... and the objects and policy of the law....”); Lynch
v. Overholser, 369 U.S. 705, 710 (1962)(“‘literalness may strangle meaning.’”). See also Desanto
v. Pennsylvania, 273 U.S. 34, 43 (1927) in which Justice Brandeis famously said: “The logic of
words should yield to the logic of realities."
In short, a successor judge is not precluded from ruling on a request under § 1292(b) even
though the Order which is under consideration was made by a predecessor judge regardless of
whether that judge had expressed an opinion on the question of interlocutory appealability. At least
two courts have held that reassignment to a second judge does not prevent that judge from ruling
on a § 1292(b) request to certify for interlocutory review an order of a prior judge. See Penthouse
Owner Assoc., Inc. v. Certain Underwriters at Lloyds, London, 612 F.3d 383, 385-86 (5th Cir. 2010);
Alliance Health Group, LLC v. Bridging Health Options, LLC, 553 F.3d 397, 398-99 (5th Cir. 2008).
C.
In interpreting court orders, we look to the objective intent of the Order sought. Bramhall
v. Salt Lake District Attorneys Office, 804 F. Appx. 935, 937-38 (10th Cir. 2020); Brown v.
McDonalds, USA, LLC, 430 F.Appx 700, 702 (10th Cir. 2011). It is not difficult to conclude that
Judge Lefkow was “of the opinion” that her Order did not involve a controlling question of law as
to which there is a substantial ground for difference of opinion. Judge Lefkow’s concise, emphatic
Order, clearly demonstrates that she would be of the opinion, if the parties had not consented to
transfer here, that there was not substantial ground for difference of opinion on the question on
5
which interlocutory appeal is sought and that an immediate appeal from her Order would not
materially advance the ultimate determination of the litigation. My independent analysis comes to
the same conclusion: I conclude that the Petition to Certify for Immediate Appeal Judge Lefkow’s
ruling denying the Motion to Dismiss for Lack of Subject Matter Jurisdiction [Dkt. #20] should be
denied.
D.
There are four statutory criteria governing the granting or denial of a § 1292(b) petition:
there must be a question of law, it must be controlling, it must be contestable, and its resolution must
promise to speed up the litigation. Ahrenholz v. Board of Trustees of Univ. of Illinois, 219 F.3d 674,
675 (7th Cir. 2000). Unfortunately, what should be a rather simple process is often not, because “the
criteria . . . are not as crystalline as they might be.” Id. at 676. That “there must be a question of
law” is a perfect example. Just because something technically presents a question of law – the
denial of a motion for summary judgment or the interpretation of a contract, for example – does not
mean it is a question of law under § 1292(b). The Seventh Circuit has explained that the statute
uses:
“question of law” in much the same way a lay person might, as referring to a “pure”
question of law rather than merely to an issue that might be free from a factual
contest. The idea was that if a case turned on a pure question of law, something the
court of appeals could decide quickly and cleanly without having to study the record,
the court should be enabled to do so without having to wait till the end of the case.
Ahrenholz, 219 F.3d at 676–77.
Defendant’s Petition to Certify Grounds for Appeal Under 28 U.S.C. § 1292(b) incorrectly
assumes – relying on a 35-year-old district court case that also simply assumed – that subject matter
jurisdiction is automatically a controlling question of law. [Dkt. #20-1, at 1-2]. Hill v. Norfolk &
6
Western Ry. Co., 814 F.2d 1192, 1198 (7th Cir.1987). Accord, Fred A. Smith Lumber Company v.
Edidin, 845 F.2d 750, 753 (7th Cir.1988). But, there is “controlling” and there is “question of law,”
as Ahrenholz sought to make clear. Ahrenholz is a Seventh Circuit case – and thus controlling
precedent in this Circuit – that made plain that “question of law” means something different in this
context. The Seventh Circuit has reminded district judges – and litigants – “that ‘question of law’
means an abstract legal issue.” Ahrenholz, 219 F.3d at 677. At one point in his Reply Brief,
defendant goes so far as to argue that the resolution of this issue – and thus his Petition – turns on
varying interpretations of what a domestic relations court judge said at a hearing. [Dkt. #28, at 2-3].
That is the opposite of something that can be decided “quickly and cleanly without having to study
the record.” Ahrenholz, 219 F.3d at 676-77. And even if it did not, the meaning of what was said
may be anything but certain and may well be subject to varying interpretations.
Defendant had to come to grips with Ahrenholz and not simply ignore it in favor of an
isolated 35-year-old district court case. [Dkt. #20-1 at 2]. It is inappropriate to ignore potentially
adverse precedent. Hill v. Norfolk & Western Ry. Co., 814 F.2d 1192, 1198 (7th Cir.1987), United
Auto. Ins. Co. v. Veluchamy 2010 WL 889980, 3 (N.D.Ill.2010). After all, a party seeking relief
under §1292 has a heavy burden to convince the district court to certify an interlocutory appeal.
White v. Nix, 43 F.3d 374, 376 (8th Cir. 1994); Lakeview Collection v. Bank of Am., 2010 WL
11713276, at *1 (N.D. Ill. 2010); Jones v. Douglas, 2008 WL 11515948, at *1 (N.D. Ill. 2008);
Hollinger Intern., Inc. v. Hollinger, Inc., 2005 WL 327058, *2 (N.D. Ill. 2005). Interlocutory
appeals, it must be remembered, are “frowned on in the federal judicial system,” Sterk v. Redbox
Automated Retail, LLC, 672 F.3d 535, 536 (7th Cir. 2012), and are allowed only “sparingly, lest
interlocutory review increase the time and expense required for litigation.” Asher v. Baxter Int'l Inc.,
7
505 F.3d 736, 741 (7th Cir. 2007).
Defendant’s argument also fails in terms of whether there is “substantial ground for
difference of opinion,” § 1292(b), whether the issue is “contestable.” Ahrenholz, 219 F.3d at 675.
A question of law is contestable if there are substantial, conflicting decisions regarding the claimed
controlling issue of law or the question is not settled by controlling authority, and there is a
substantial likelihood that the district court ruling will be reversed on appeal. See, e.g., Boim v.
Quranic Literacy Inst. & Holy Land Found. For Relief And Dev., 291 F.3d 1000, 1007 (7th Cir.
2002)(questions of first impression are contestable); 880 S. Rohlwing Rd., LLC v. T&C Gymnastics,
LLC, 2017 WL 264504, at *6 (N.D. Ill. 2017); United States v. Moglia, 2004 WL 1254128, at *3
(N.D.Ill. 2004); In re Kmart Corp., 2004 WL 2222265, at *2 (N.D. Ill. 2004). See also Shah v.
Zimmer Biomet Holdings, Inc., 2019 WL 762510, at *8 (N.D. Ind. 2019)(“Certification pursuant to
Section 1292(b) was not intended to cover every legal issue in which there is not binding precedent
or let alone every legal issue as to which reasonable minds could differ.”). Defendant has not met
his burden here.
The defendant argues that Judge Lefkow’s finding was wrong because she was being asked
to find that the defendant/son-in-law “is solely liable for the purported debt outside of a pending
divorce, which would run afoul of the domestic relations exception.” [Dkt. #20-1, at 2]. I disagree.
The plaintiff’s Complaint seeks to enforce promissory notes that defendant signed “individually
and/or collectively” – along with his then wife. That is all the relief that is sought by the Complaint.
I agree with Judge Lefkow’s analysis that it does not determine the eventual allocation of marital
assets. And her finding in this regard, with which I independently agree, could not have been more
succinct. It was based on well-settled law regarding the core and the penumbra of the “domestic
8
relations” exception. Routine applications of well-settled legal standards to facts alleged in a
Complaint are inappropriate for interlocutory appeal. In re Text Messaging Antitrust Litig., 630 F.3d
622, 626 (7th Cir. 2010).
The defendant’s contention that plaintiff's claims fall within the penumbra of the domestic
relations exception for federal jurisdiction is founded on a case that is analytically dissimilar from
what we have here. In Dawaji v. Askar, 618 Fed. App’x 858, 860 (7th Cir. 2015), the Seventh
Circuit found that the district court had no jurisdiction in a § 1983 suit brought by the wife that
charged the husband and special prosecutor with having coerced the plaintiff/wife into accepting a
settlement in her divorce proceeding by bringing a criminal contempt action against her for violating
the couple’s custody agreement. Obviously, if the federal court adjudicated the §1983 suit, “it
would have to determine the merits of her request for larger payments for child support and
maintenance and additional marital assets.” Jd. at 860. Deciding whether Mr. Carroll is liable on
the notes at issue here does not present a comparable situation. What the defendant has pled is that
what were denominated “promissory notes” were executed at the time the supposed “obligors” were
married. Accordingly, defendant has not shown that this is a situation where an interlocutory appeal
should be allowed. Compare Mannix v. Machnik, 2006 WL 566447, at *3 (N.D. II. 2006)(denying
a §1292(b) petition, because “lack of subject matter jurisdiction over domestic relations matters [is
a| well-settled principle[] bound by controlling precedent in this Circuit.”). The Petition [Dkt. #20]
is denied. □□
ENTERED: Ua
ITED STATES MAGISTRATE JUDGE
DATE: 1/20/21