James Reilly v. Will County Sheriff's Office

In the

United States Court of Appeals

For the Seventh Circuit

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No. 23-3167

JAMES REILLY,

Plaintiff-Appellant,

v.

WILL COUNTY SHERIFF’S OFFICE and MICHAEL KELLEY, Will

County Sheriff,

Defendants-Appellees.

____________________

Appeal from the United States District Court for the

Northern District of Illinois, Eastern Division.

No. 1:23-cv-02411 — Robert W. Gettleman, Judge.

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ARGUED NOVEMBER 6, 2024 — DECIDED JULY 8, 2025

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Before BRENNAN, KOLAR, and MALDONADO, Circuit Judges.

MALDONADO, Circuit Judge. Deputy James Reilly alleges

that his employer, the Will County Sheriff’s Office, and his

boss, Sheriff Michael Kelley, retaliated against him in viola-

tion of the First Amendment. Reilly contends that Sheriff Kel-

ley passed him over for promotion to sergeant because he crit-

icized the sheriff while running against him in the county

sheriff election. The defendants moved to dismiss Reilly’s

2 No. 23-3167

complaint, arguing that it was untimely because Reilly filed

the complaint over two years after his eligibility for a promo-

tion expired. The district court agreed that Reilly was out of

time, granted the defendants’ motion to dismiss, and entered

judgment in their favor. Reilly requested that the district court

set aside its judgment under Federal Rule of Civil Procedure

59(e) and allow him to amend his complaint. The district court

denied leave to amend, believing that Reilly needed to pre-

sent extraordinary circumstances to justify relief and failed to

do so.

In reaching its conclusion, the district court mistakenly ap-

plied a heightened standard to Reilly’s Rule 59(e) motion, re-

quiring Reilly to present extraordinary circumstances instead

of applying the liberal standard for amending pleadings. The

court further erred in denying Reilly’s request for leave to

amend his complaint. We conclude that Reilly’s proposed

amended complaint states a plausible claim upon which relief

may be granted, and that he has not pled himself out of court

based on the statute of limitations. In doing so, we do not pre-

clude the defendants from raising the statute of limitations

defense later in the case on a more complete factual record.

We therefore vacate the judgment of the district court and re-

mand the case for further proceedings.

BACKGROUND

I. Facts

James Reilly joined the Will County Sheriff’s Office as a

deputy in 2013. With a background in law enforcement,

Reilly’s performance was very strong, and he was named

Deputy of the Year in 2016.

No. 23-3167 3

Looking to take his career to the next level, in February of

2017, Reilly announced his campaign for Will County Sheriff

in the upcoming 2018 election. Reilly’s opponent in the elec-

tion was his boss, Sheriff Michael Kelley, who was first elected

as the county sheriff in 2014. During Reilly’s campaign, he

publicly criticized Sheriff Kelley and his performance as sher-

iff. Reilly’s campaign proved unsuccessful, and Kelley won

the 2018 election.

Before the election, in late 2017, Reilly took an exam to de-

termine his eligibility for promotion to sergeant. But passing

the exam was just one factor for Reilly’s eligibility; the promo-

tion decision was ultimately up to Sheriff Kelley. Reilly fin-

ished at the top of his class on the exam and was placed first

on the “Sergeant Promotional List,” meaning that not only

was Reilly eligible for a promotion to sergeant, but he was also

considered one of the most fit to be promoted. Reilly, how-

ever, was never selected for the promotion.

To better understand the central dispute of this case, back-

ground on the promotion process is necessary. The Merit

Commission, a five-person body which oversees the promo-

tion process, “certifies” the Sergeant Promotional List. Ac-

cording to the Commission’s rules, the sheriff can select any

deputy listed on the Sergeant Promotional List for promotion

regardless of exam scores. If, however, Sheriff Kelley selected

a candidate for promotion who ranked lower than the first

three individuals on the list, he was required to justify this

decision to the Merit Commission in writing. Conversely, if

Sheriff Kelley selected any of the first three candidates, he was

not required to provide any explanation for his decision.

Between November 11, 2018, and July 26, 2019, while

Reilly was eligible for a promotion, five other candidates were

4 No. 23-3167

promoted to sergeant. At the time of their promotions, each of

the candidates was ranked as one of the top three on the pro-

motional list, meaning they were presumptively qualified for

the promotion and Sheriff Kelley was not required to explain

his decisions.

Reilly ran for Will County Sheriff again in the 2022 elec-

tion. During this campaign, in July of 2022, Sheriff Kelley

stated publicly that he had not promoted Reilly to sergeant

because of Reilly’s criticism during the 2018 campaign, add-

ing: “Why would I promote him? Who would do that?” Sher-

iff Kelley was reelected later that year.

II. Procedural History

On April 18, 2023, about nine months after Sheriff Kelley’s

statement about refusing to promote Reilly, Reilly filed this

lawsuit against Kelley and the Sheriff’s Office, bringing one

claim for First Amendment retaliation under 42 U.S.C. §

1983. 1 Reilly alleges that Sheriff Kelley and the Sheriff’s Office

retaliated against him for criticizing Sheriff Kelley during

Reilly’s first campaign by failing to promote him to sergeant.

The defendants moved to dismiss Reilly’s complaint un-

der Federal Rule of Civil Procedure 12(b)(6). Rather than ar-

gue that Reilly’s complaint failed to state a claim, they raised

the affirmative defense that Reilly’s claim was barred by the

1 Reilly conceded below that naming both Sheriff Kelley and the Will

County Sheriff’s Office as defendants was duplicative because Reilly

brought his claim against Sheriff Kelley in his official capacity. See Ken-

tucky v. Graham, 473 U.S. 159, 165–66 (1985). Because the Will County Sher-

iff’s Office entered an appearance on appeal, we refer to it with defendant

Kelley collectively as “defendants.” On remand, the district court should

dismiss the Sheriff’s Office as a party and update the caption accordingly.

No. 23-3167 5

two-year statute of limitations applicable to his § 1983 claim.

The defendants argued that Reilly knew of his injury no later

than November of 2019, over two years before he brought his

claim.

In opposing the motion to dismiss, Reilly argued that he

could not have known that his constitutional rights were vio-

lated until Sheriff Kelley’s public remarks on July 13, 2022.

Reilly further contended that if he had brought his case before

Sheriff Kelley made the public statements, his claim would

have been overly speculative and would not have survived

dismissal.

The district court agreed with the defendants that Reilly’s

claims were untimely and granted the motion to dismiss with

prejudice. Relying on our decision in Thelen v. Marc’s Big Boy

Corp., 64 F.3d 264 (7th Cir. 1995), the district court explained

that Reilly’s injury accrued when he was passed over for pro-

motion, which occurred at least five times between 2017 and

2019. The court thus found that Reilly’s claim accrued no later

than November of 2019, and his April 2023 complaint was

therefore brought outside the two-year statute of limitations.

The district court found no ground for equitable tolling be-

cause it concluded that a reasonable person in Reilly’s posi-

tion would have believed that he was not promoted because

of his protected activity.

In granting the defendants’ motion to dismiss, the district

court took the unusual step of simultaneously entering final

judgment in favor of the defendants, thereby precluding

Reilly from filing an amended complaint. Accordingly, Reilly

filed a motion under Rule 59(e) to alter or amend the judg-

ment and for leave to file an amended complaint under Rule

15(a)(2), with a proposed amended complaint attached. Reilly

6 No. 23-3167

asserted that new allegations in his proposed amended com-

plaint cured any defect in his original complaint and demon-

strated that his claim was timely. Specifically, he pointed to

new allegations that the other deputies who were promoted

were presumptively qualified, that those promotions com-

plied with the Merit Commission’s rules, and that the last pro-

motion of another deputy occurred over two years after Reilly

announced his first candidacy. Reilly therefore argued that he

had no reason to suspect a constitutional injury.

The district court denied Reilly’s 59(e) motion and request

for leave to file an amended complaint. In declining to set

aside the judgment, the court found that Reilly had failed to

clearly establish that the court committed a manifest error of

law or fact, or that newly discovered evidence precluded en-

try of judgment. The court also concluded that the new alle-

gations in Reilly’s proposed amended complaint were prem-

ised on information Reilly already had but failed to present in

responding to the defendants’ motion to dismiss. Accord-

ingly, the court denied Reilly’s Rule 59(e) motion and motion

for leave to file an amended complaint.

DISCUSSION

Reilly appeals the district court’s denial of his Rule 59(e)

motion. 2 We hold that the district court abused its discretion

by applying a heightened standard in denying Reilly’s Rule

2 For purposes of our review, the district court’s ruling on Reilly’s

Rule 59(e) motion merges with its prior order granting defendants’ Rule

12(b)(6) motion. See Banister v. Davis, 590 U.S. 504, 509 (2020). But because

Reilly does not raise on appeal any argument challenging the district

court’s order dismissing his original complaint, we do not independently

review that order.

No. 23-3167 7

59(e) motion. We further conclude that Reilly’s proposed

amended complaint is legally sufficient because, at this stage,

we cannot hold as a matter of law that it is barred by the rele-

vant statute of limitations.

I. Reilly’s Rule 59(e) Motion

At the outset of our analysis, a few words are necessary to

address the unique procedural posture of this case.

In the usual course, a plaintiff whose complaint has been

dismissed at the pleading stage should be given at least one

opportunity to amend. Runnion ex rel. Runnion v. Girl Scouts of

Greater Chicago & Nw. Ind., 786 F.3d 510, 519 (7th Cir. 2015);

see also Fed. R. Civ. P. 15(a) (“The court should freely grant

leave when justice so requires.”). But when a district court en-

ters a final judgment of dismissal, amendment of the com-

plaint under Rule 15 is not available unless the judgment is

set aside or modified under Rule 59(e). Id. at 521. We review

a district court’s decision on a Rule 59(e) motion for abuse of

discretion. Cincinnati Life Ins. Co. v. Beyrer, 722 F.3d 939, 953

(7th Cir. 2013).

Relief under Rule 59(e) is generally reserved for “extraor-

dinary cases,” Runnion, 786 F.3d at 521, and for a motion to be

successful, the movant must clearly establish: “(1) that the

court committed a manifest error of law or fact, or (2) that

newly discovered evidence precluded entry of judgment.”

Cincinnati Life, 722 F.3d at 954. But when, as here, a district

court dismisses a complaint with prejudice and is confronted

with a Rule 59(e) motion to set aside the judgment, the district

court “must still apply the liberal standard for amending

pleadings under Rule 15(a)(2)” and “need not find other

8 No. 23-3167

extraordinary circumstances” to grant the relief requested.

Runnion, 786 F.3d at 521.

In denying Reilly’s Rule 59(e) motion, the district court

failed to consider our instructions in Runnion. Because the

court entered judgment at the same time it granted the de-

fendants’ 12(b)(6) motion, it should have applied the liberal

standard for amending pleadings and did not need to find ex-

traordinary circumstances in order to grant Reilly’s requested

relief.

The district court relied on our decision in Environmental

Barrier Co., LLC v. Slurry Systems, Inc., to conclude that the

new allegations added to Reilly’s proposed amended com-

plaint were insufficient to qualify as newly discovered evi-

dence and denied relief under Rule 59(e) on this basis. 540

F.3d 598, 608 (7th Cir. 2008). But this Court reviewed the de-

nial of a Rule 59 motion in Environmental Barrier under much

different circumstances. There, we reviewed the district

court’s order denying the plaintiff’s Rule 59 motion to set

aside an arbitration award on the grounds that newly discov-

ered evidence came to light after the award was entered. Id.

The district court reviewed the newly discovered evidence

and determined that it had no effect on the propriety of the

arbitration award, and we affirmed on those grounds. Id. at

608–09. Here, by contrast, there was no “newly discovered ev-

idence” to put forward after final judgment was entered;

Reilly simply should have been given an opportunity to cure

any perceived defects in his complaint. Runnion, 786 F.3d at

523 (“[A] plaintiff who receives a Rule 12(b)(6) motion and

who has good reason to think the complaint is sufficient may

… choose to stand on the complaint and insist on a decision

without losing the benefit of the well-established liberal

No. 23-3167 9

standard for amendment with leave of court under Rule

15(a)(2).”). Reilly only filed a Rule 59(e) motion because the

district court simultaneously entered judgment with its order

granting the motion to dismiss. We have said that “a district

court cannot nullify the liberal right to amend under Rule

15(a)(2) by entering judgment prematurely at the same time it

dismisses the complaint that would be amended.” Runnion,

786 F.3d at 522. Thus, the more liberal standard set forth in

Runnion must apply here.

The district court applied the wrong standard in deciding

Reilly’s Rule 59(e) motion and therefore abused its discretion

in denying the motion. But to determine the practical effect of

this abuse of discretion, we must answer whether Reilly’s pro-

posed amended complaint states a claim such that the lawsuit

can proceed. We find that it does.

II. Reilly’s Proposed Amended Complaint

Our analysis of whether Reilly’s amended complaint is le-

gally sufficient is guided by Federal Rule of Civil Procedure

8(c)(1), which makes clear that an affirmative defense should

be raised in a responsive pleading. Typically, affirmative de-

fenses, like timeliness, are not properly resolved at the plead-

ing stage. Vasquez v. Indiana Univ. Health, Inc., 40 F.4th 582, 588

(7th Cir. 2022).

Plaintiffs are not required to anticipate or refute potential

affirmative defenses in the complaint. Luna Vanegas v. Signet

Builders, Inc., 46 F.4th 636, 640 (7th Cir. 2022). In the “rare”

circumstance in which the complaint pleads facts that conclu-

sively establish that the plaintiff’s claim is time-barred, dis-

missal at the pleading stage can be appropriate. Id. But be-

cause timeliness issues are heavily fact-dependent, those

10 No. 23-3167

questions are best left for summary judgment or trial so that

the court may rule on them with a complete factual record.

Sidney Hillman Health Ctr. of Rochester v. Abbott Labs., Inc., 782

F.3d 922, 928 (7th Cir. 2015). It follows that a claim will survive

dismissal “[a]s long as there is a conceivable set of facts, con-

sistent with the complaint, that would defeat a statute-of-lim-

itations defense ….” Id.

Denials of leave to amend are typically reviewed for abuse

of discretion. Runnion, 786 F.3d at 524. But when the basis for

denial is futility, as is the case here, we apply the legal suffi-

ciency standard of Rule 12(b)(6) to determine whether the

proposed amended complaint fails to state a claim. Id. (citing

Gen. Elec. Cap. Corp. v. Lease Resolution Corp., 128 F.3d 1074,

1085 (7th Cir. 1997)). Effectively, we are reviewing Reilly’s

proposed amended complaint for legal sufficiency de novo.

Id.

A complaint should only be dismissed at the pleading

stage with prejudice if the court is “certain” from the facts al-

leged that any amendment would be futile. Id. at 520. Here,

the district court found that this was one of the rare circum-

stances where Reilly had pleaded himself out of court by al-

leging facts that established that his claim was time-barred.

But in reviewing Reilly’s proposed amended complaint, we

are not certain that amendment would be futile.

The parties do not dispute that the relevant statute of lim-

itations for Reilly’s § 1983 claim is two years. Hileman v. Maze,

367 F.3d 694, 696 (7th Cir. 2004). Federal law governs the ac-

crual date for a § 1983 claim, which begins when the plaintiff

“knows or should know that his or her constitutional rights

have been violated.” Id. This is a fact-intensive inquiry “in

which both the surrounding circumstances and the claims

No. 23-3167 11

plaintiff [himself] is trying to raise are critical.” Id. at 697

(quoting Kelly v. City of Chicago, 4 F.3d 509, 511 (7th Cir. 1993)).

For a plaintiff bringing a First Amendment retaliation

claim, the claim accrues, and the statute of limitations begins

to run, “‘immediately after the retaliatory act occurred’ … so

long as the plaintiff ‘knows or should know that his or her

constitutional rights have been violated ….’” Towne v. Don-

nelly, 44 F.4th 666, 671 (7th Cir. 2022) (quoting Gekas v. Vasili-

ades, 814 F.3d 890, 894 (7th Cir. 2016)).

The defendants contend that Reilly should have known

his constitutional rights were violated when he was passed

over for promotion no less than five times. Defendants rely on

Thelen, which the district court also relied on in dismissing

Reilly’s complaint. 64 F.3d 264 (7th Cir. 1995). We held in The-

len that the statute of limitations for the plaintiff’s ADEA

claim began to run when he was terminated, and not when he

discovered that a younger employee took over his job duties.

Id. at 267. Reasoning by analogy, the defendants argue that

Reilly should have known he was injured at the time he was

passed over for promotion and he had engaged in a protected

activity by criticizing Sheriff Kelley. In other words, the de-

fendants contend that Reilly already had sufficient infor-

mation to know that he was injured by November 2019, not

when Sheriff Kelley later publicly stated his unlawful motive.

Reilly argues that this case is more like Hileman. There, the

plaintiff, who was running for office, did not know that phony

absentee ballots voting for her opponent had been commin-

gled with valid ones, and therefore counted in the election,

even after the police had alerted her to the existence of the

phony ballots. Hileman, 367 F.3d at 695. The plaintiff brought

a § 1983 claim against the county clerk alleging constitutional

12 No. 23-3167

violations. Id. at 696. We reversed the district court’s dismissal

of the complaint on statute of limitations grounds and con-

cluded that a reasonable plaintiff could have believed that

once the police discovered the ballots, the situation would

have been resolved. Id. at 697–98. But because of an “inexpli-

cable decision” to return the ballots to the county clerk, the

phony ballots were still counted. Id. at 698. The plaintiff there-

fore could not reasonably have known that she suffered a con-

stitutional injury until she was made aware of the commin-

gling, which occurred within the statute of limitations. Id.

Reilly argues that he similarly did not know, and could

not have known, that Sheriff Kelley’s failure to promote him

was retaliatory until Sheriff Kelley admitted so. Reilly empha-

sizes the amended complaint’s allegations that all five of the

candidates promoted to sergeant between 2017 and 2019 were

among the top three on the promotional list, meaning Sheriff

Kelley was not required to justify their promotion. Further,

“none of the promotions were close in time to Reilly’s pro-

tected speech,” and Reilly understood that one of the candi-

dates was a “personal friend” of Sheriff Kelley’s.

This case falls somewhere between Thelen and Hileman,

but closer to Hileman. The defendants’ argument that Reilly

should have suspected a potential constitutional violation

when he was not selected for promotion is viable. But so is

Reilly’s argument that he did not have sufficient information

to bring his lawsuit at the time. Perhaps Reilly is an optimistic

sort and to punish him for not jumping to the worst-case sce-

nario for his lack of promotion would be unreasonable on the

part of this Court. From the limited factual record before us,

we cannot conclude, as a matter of law, that Reilly was on suf-

ficient notice that he may have suffered a constitutional

No. 23-3167 13

injury. Because the amended complaint pleads that Sheriff

Kelley followed the appropriate procedures, was not required

to justify his decisions, and that the promotions were not sus-

piciously close in time to Reilly’s speech, it may have been

reasonable for Reilly to believe there was nothing improper

about the decision not to promote him.

For these reasons, the allegations in Reilly’s proposed

amended complaint at the very least state a plausible claim

that a reasonable person would not have known of a potential

constitutional injury until Sheriff Kelley admitted to his retal-

iatory motive. See Clark v. City of Braidwood, 318 F.3d 764, 768

(7th Cir. 2003) (holding that if the plaintiff could prove that a

reasonable person would not have discovered the injury ear-

lier, he would have a defense to the timeliness defense raised

by the defendant). Accordingly, Reilly’s proposed amended

complaint states a claim, and dismissal on statute of limita-

tions grounds was premature.

To be sure, defendants are not precluded from raising

timeliness as a defense in the future on a complete factual rec-

ord. Reilly, similarly, is not precluded from raising other re-

sponses to the statute of limitations defense, such as the doc-

trine of equitable tolling.

CONCLUSION

The district court applied the wrong standard in review-

ing Reilly’s Rule 59(e) motion to set aside its judgment dis-

missing Reilly’s complaint. Reilly’s proposed amended com-

plaint states a claim, and, on the limited facts before us, we

cannot with certainty hold that his claim is time-barred. The

final judgment of the district court is therefore VACATED,

14 No. 23-3167

and the case is REMANDED for further proceedings con-

sistent with this opinion.