Jacqueline Goldberg v. 401 N. Wabash Venture, L.L.C.

In the

United States Court of Appeals

For the Seventh Circuit

____________________

No. 13-3057

JACQUELINE GOLDBERG,

Plaintiff-Appellant,

v.

401 NORTH WABASH VENTURE LLC and TRUMP CHICAGO

MANAGING MEMBER, LLC,

Defendants-Appellees.

____________________

Appeal from the United States District Court for the

Northern District of Illinois, Eastern Division.

No. 09 C 6455 — Amy J. St. Eve, Judge.

____________________

ARGUED APRIL 14, 2014 — DECIDED JUNE 10, 2014

____________________

Before WOOD, Chief Judge, and POSNER and FLAUM, Circuit

Judges.

POSNER, Circuit Judge. Trump International Hotel and

Tower Chicago (we’ll call it “Trump Tower Chicago” for

short) is a 92-story building in downtown Chicago, complet-

ed in 2009. It contains 486 residential condominium units,

339 hotel condominium units (occupying floors 14 and 17

through 27 of the building)—the focus of the appeal—plus

2 No. 13-3057

retail space, a health club, ballrooms, meeting rooms, restau-

rants, bars, a hair salon, and other facilities commonly found

in conventional hotels. Some of these facilities, along with

structural features such as the roof and the elevators, are

what are called “common elements.” All common elements

are shared facilities. The condominium units are not com-

mon elements; they are owned individually, rather than by

the building’s owners or by the condominium association,

which is to say the units’ owners collectively. When the

owner of a hotel condominium unit is not occupying the

unit, the building management can rent it to a visitor, and

the rental income is divided with the owner, with the own-

er’s share of the income being credited against his annual

maintenance fee.

The developers and owners of Trump Tower Chicago—

the defendants in this lawsuit—are entities ultimately con-

trolled by Donald Trump. For simplicity we’ll ignore the

labyrinth of corporate forms and pretend there is a single

defendant called TrumpOrg. The plaintiff is a wealthy and

financially sophisticated Chicago businesswoman—a certi-

fied public accountant and certified financial planner—who

in 2006 signed an agreement to buy two hotel condominium

units in Trump Tower Chicago from TrumpOrg for some

$2.2 million. (To simplify exposition, we’ll pretend there was

one agreement, covering both units.) Goldberg wasn’t inter-

ested in staying in either of the units herself. She had bought

them as an investment, hoping their value would increase

and also that her income from the rental of the units by the

management of the condo hotel (the condo hotel is a compo-

nent of Trump Tower Chicago, which also as we noted con-

tains a residential complex) would reduce her annual

maintenance costs. She already owned other condominium

No. 13-3057 3

units—including a residential condominium unit in Trump

Tower Chicago—also as investments rather than as places in

which she might live or stay. Although she was 80 years old

when she signed the purchase agreement, there is no sugges-

tion that she was mentally impaired. She was 87 when she

testified at the trial of this case, and there was no indication

of any impairment then either.

The purchase agreement, in what the parties call the

“change clause,” gave TrumpOrg “the right, in its sole and

absolute discretion, to modify the Condominium Docu-

ments.” These are documents that among other things speci-

fy the rights in the common elements that the purchaser ac-

quires under the agreement along with the hotel condomini-

um unit itself—“provided that Seller shall notify Purchaser

or obtain the Purchaser’s approval of any changes in the

Condominium Documents … when and if such notice or ap-

proval is required by law.” After reviewing the purchase

agreement with her attorney, the plaintiff asked TrumpOrg

to give her the right to terminate the agreement and get her

deposit back if she disapproved of any changes that

TrumpOrg made in the agreement. TrumpOrg refused. The

plaintiff signed the agreement anyway, even though

TrumpOrg had already made three changes, one of which

modified common elements by adding meeting rooms and

ballrooms to, but removing the health club from, the com-

mon elements.

The year after she signed the agreement, TrumpOrg

made another set of changes (the “Fourth Amendment,” as

the parties term it), which greatly curtailed the owners’

rights in the hotel facilities. The plaintiff was furious. She

testified that she thought she’d been conned. She refused to

4 No. 13-3057

close; that is, she refused to pay the balance of what she

owed for the two units that she had agreed to buy, and take

title to them. TrumpOrg did not seek to compel her to close,

as by suing her for breach of contract and seeking specific

performance as a remedy. But neither did it return her down

payment, some $516,000. After protracted fruitless negotia-

tions, in January 2010 TrumpOrg canceled the purchase

agreement and claimed the earnest money as liquidated

damages, but left it in an escrow account in Deutsche Bank.

There it remains, pending the outcome of this litigation,

which the plaintiff had instituted in an Illinois state court in

2009. The suit sought damages not limited to the $516,000,

but in the millions of dollars, under a variety of Illinois laws

and also the Federal Interstate Land Sales Full Disclosure

Act, 15 U.S.C. §§ 1701 et seq.; but the claim under that Act

has been abandoned on appeal, so we’ll ignore it. Her Illi-

nois claims are based on the Illinois common law of con-

tracts; the Illinois Consumer Fraud and Deceptive Business

Practices Act, 815 ILCS 505; the Illinois Condominium Prop-

erty Act, 765 ILCS 605; and the Illinois Securities Law of

1953, 815 ILCS 5.

The parties being of diverse citizenship, the defendant

was able to remove the case to the federal district court in

Chicago and did so. Lengthy pretrial proceedings ensued, in

the course of which the district judge granted summary

judgment for the defendant on the securities-law claim, and

(after the summary judgment ruling, but shortly before trial)

dismissed the claim of “unfair” conduct because the plaintiff

had “not sufficiently alleged or pursued during discovery an

‘unfair practice’ claim.” (The consumer-fraud act, which

tracks the Federal Trade Commission Act, 15 U.S.C.

§ 45(a)(1), punishes “unfair” as well as “deceptive” acts or

No. 13-3057 5

practices. 815 ILCS 505/2.) Her other claims were tried—the

deceptive practice consumer-fraud act and federal Land Act

claims to a jury, the breach of contract and Condo Act claims

to the judge. The jury returned a verdict for the defendant on

the fraud and Land Act claims, and the judge rendered

judgment for the defendant on the breach of contract and

Condo Act claims. Thus the plaintiff obtained no relief, pre-

cipitating this appeal.

When as in this case some issues are to be tried by a jury

and some by the judge, the jury trial is conducted first and

the jury’s findings (unless invalidated) are binding in the

bench trial. E.g., Byrd v. Blue Ridge Rural Electric Cooperative,

Inc., 356 U.S. 525, 537–38 (1958); In re Rhone-Poulenc Rorer,

Inc., 51 F.3d 1293, 1303 (7th Cir. 1995). So we begin with the

trial of the claim of deception, as that was the only claim

(apart from the now-abandoned federal Land Act claim)

tried by the jury. The plaintiff’s theory was bait and switch:

that TrumpOrg had promised to prospective purchasers of

the hotel condominium units—in marketing materials, in

“Property Reports” (formal documents given to buyers

along with the purchase agreements and other condomini-

um documents), and in the original draft of the purchase

agreements—common-element rights in the hotel facilities,

and had specified the terms on which units would be rented

when the owners weren’t occupying them, but had planned

to eliminate most of the promised benefits by invoking the

“change clause.”

The plaintiff argues that just as in a conventional bait and

switch—in which for example a retail store advertises a

washing machine at a low price intending to attract consum-

ers who will be told that all the machines have been sold and

6 No. 13-3057

will be urged to buy a more expensive substitute—the list of

rights in the original draft of the purchase agreement was

intended to lure prospective investors like her into signing

the agreement, after which the rights would be watered

down. In effect a less valuable product would be substituted

for the product she was led to think she was getting. Bait

and switch is a deceptive practice because it involves the

seller’s making a representation to prospective customers

that he knows to be false.

There is considerable doubt, unnecessary to resolve how-

ever, whether this theory could support a finding of fraud in

the circumstances of this case, in which the seller declared

up front, in the change clause, that it might “switch.” It

would be a pretty innocuous bait and switch if the seller in

our example advertised the low-priced washing machines

but added “and by the way we may raise the price before

you arrive at the store.” With such warning, what decep-

tion?

Illinois law is clear that bait and switch is a form of fraud,

of deception, not any other type of improper act—that it oc-

curs, violating the state’s consumer-fraud act, when a seller

makes “an alluring but insincere offer to sell a product or

service which the advertiser in truth does not intend or want

to sell. Its purpose is to switch customers from buying the

advertised merchandise, in order to sell something else, usu-

ally at a higher price or on a basis more advantageous to the

advertiser.” Williams v. Bruno Appliance & Furniture Mart,

Inc., 379 N.E.2d 52, 54 (Ill. App. 1978), quoting 16 C.F.R.

§ 238.0 and quoted in Chandler v. American General Finance,

Inc., 768 N.E.2d 60, 69 (Ill. App 2002). The Chandler opinion

goes on to observe that a “common thread … [in the bait and

No. 13-3057 7

switch cases is that] the targets are unsophisticated custom-

ers.” Id. The plaintiff in our case was highly sophisticated.

Still, the plaintiff’s bait and switch theory was presented

to the jury—which rejected it. The defendant presented

plausible evidence that an employee of TrumpOrg who had

no experience with condominium hotels had at the outset of

the Trump Tower Chicago project decided to make the hotel

facilities common elements of the hotel condominium units,

but that later this employee had been replaced. His replace-

ment had the relevant experience and persuaded Donald

Trump that the predecessor employee’s idea had been terri-

ble because the hotel condominium association elected by

the owners of the hotel condominium units might well mis-

manage the hotel facilities.

The plaintiff argues that the district judge committed se-

rious procedural errors at the jury trial, notably by allowing

the defendant’s expert, Brent Howie, to testify about Donald

Trump’s state of mind. That is a distortion of Howie’s testi-

mony. He is the president of a company that manages con-

dominium hotels, and is therefore qualified to testify about

the problems that developers of this relatively recent type of

condominium project are likely to encounter. Donald Trump

is of course a highly experienced real estate developer, but

he is not infallible—he has had many successes in the real

estate business but also failures. See, e.g., Janice Castro,

“Trump Trips Up,” Time, May 6, 1991, pp. 46–47. Howie

admitted that he had never worked with Trump and had no

idea what Trump’s knowledge or state of mind was concern-

ing the Trump Tower Chicago project. He testified merely

that in his experience even sophisticated real estate develop-

8 No. 13-3057

ers often are unaware of the importance of excluding hotel

facilities from the common elements.

An expert witness is not permitted to parrot what some

lay person has told him and testify that he believes the per-

son was being truthful. In re James Wilson Associates, 965 F.2d

160, 172–73 (7th Cir. 1992); United States v. Pablo, 696 F.3d

1280, 1288 (10th Cir. 2012); Redman v. John D. Brush & Co., 111

F.3d 1174, 1179 (4th Cir. 1997); Jennifer L. Mnookin, “Expert

Evidence and the Confrontation Clause After Crawford v.

Washington,” 15 J. Law & Policy 791, 802–03 (2007). A busi-

ness expert can however testify about the state of knowledge

prevalent in a business that he has studied, and in Howie’s

case is also a member of. E.g., Stolt-Nielsen S.A. v. Animal-

Feeds Int’l Corp., 559 U.S. 662, 674–75 and n. 6 (2010); Bercke-

ley Investment Group, Ltd. v. Colkitt, 455 F.3d 195, 218 (3d Cir.

2006); cf. Frigaliment Importing Co. v. B.N.S. International Sales

Corp., 190 F. Supp. 116, 119–20 (S.D.N.Y. 1960) (Friendly, J.);

David L. Faigman, “Expert Evidence in Flatland: The Geom-

etry of a World Without Scientific Culture,” 34 Seton Hall L.

Rev. 255, 259–60 (2003).

The plaintiff complains about the judge’s refusal to in-

struct the jury that the “change clause” was not a complete

defense. For Donald Trump had, in the course of his pro-

tracted cross-examination by the plaintiff’s lawyer, said that

it was. We suggested earlier that it might indeed be a com-

plete defense in the circumstances of this case, considering

the plaintiff’s business savvy and professional advice. But

Trump was not competent to offer a legal opinion. No mat-

ter. TrumpOrg’s lawyer acknowledged in his closing argu-

ment that the plaintiff’s bait and switch theory was a valid

theory of consumer fraud that could override the change

No. 13-3057 9

clause (though, the lawyer added, it was factually unsup-

ported). He told the jury: “You have to find change plus, and

the plus is that at the time they [meaning the defendants]

put those common elements in, they never intended to keep

them in. They [now meaning the plaintiff’s lawyers] have to

prove that, not just that there was a change.” Given Trump’s

testimony about the change clause, the instruction requested

by the plaintiff’s lawyer would have been appropriate. But it

was not essential, given the acknowledgment to the jury by

the defendant’s lawyer; its omission was not a reversible er-

ror.

So the jury’s rejection of the bait and switch theory

stands, and we must consider the effect of that rejection on

other claims made by the plaintiff. Obviously one that it

wipes out is the deception facet of the charge that the de-

fendant violated the consumer-fraud act. Another is breach

of contract. There is no basis in the explicit terms of the pur-

chase agreement for inferring a breach of contract; and while

Illinois law reads into every contract a duty of good faith,

e.g., Northern Trust Co. v. VIII South Michigan Associates, 657

N.E.2d 1095, 1104 (Ill. App. 1995), the duty relates to the per-

formance of the contract, not to fraud in its inception. As ex-

plained in the case just cited, “problems involving the obli-

gation of good faith and fair dealing generally arise where

one party to a contract is given broad discretion in perfor-

mance. The covenant of good faith requires that a party

vested with contractual discretion exercise that discretion

reasonably, not arbitrarily, capriciously, or in a manner in-

consistent with the reasonable expectation of the parties.

Parties to a contract, however, are entitled to enforce the

terms of the contract to the letter and an implied covenant of

10 No. 13-3057

good faith cannot overrule or modify the express terms of a

contract.” Id. (citations omitted).

Although the plaintiff’s appeal challenges the judge’s re-

jection of the claim of breach of contract, the challenge is lim-

ited to a contention that the plaintiff was entitled to a jury

trial. The outcome would have been the same, since the find-

ing of no deception was the finding of a jury and would bar

relief on the contract claim just as on the consumer-fraud

claim. But we think it worth pointing out the error in the

plaintiff’s procedural contention. The relief sought for the

alleged breach of contract was rescission—that is, the nullifi-

cation of the contract and the restoration of the parties to the

position they would occupy had there been no contract. Re-

scission is an equitable, not a legal, remedy. This is true un-

der both Illinois law, e.g., 23–25 Building Partnership v. Testa

Produce, Inc., 886 N.E.2d 1156, 1163 (Ill. App. 2008); Barbers,

Hairstyling For Men & Women, Inc. v. Bishop, 132 F.3d 1203,

1204–05 (7th Cir. 1997) (Illinois law), and federal law. E.g.,

Grupo Mexicano de Desarrollo, S.A. v. Alliance Bond Fund, Inc.,

527 U.S. 308, 324–25 (1999); Arber v. Essex Wire Corp., 490

F.2d 414, 422 (6th Cir. 1974). And there is no right to trial by

jury in an equity case. Tull v. United States, 481 U.S. 412, 417–

18 (1987); Parsons v. Bedford, 28 U.S. (3 Pet.) 433, 446–47

(1830) (Story, J.).

There is, it is true, “legal” as well as equitable rescission.

Suppose a court orders rescission and one provision of the

order requires the defendant to return the plaintiff’s down

payment or earnest money (as sought by the plaintiff in this

case), and the defendant refuses. The plaintiff can ask the

court to hold the defendant in contempt, but alternatively he

can sue the defendant for the money; and that would be con-

No. 13-3057 11

sidered a suit for damages. Sherzer v. Homestar Mortgage Ser-

vices, 707 F.3d 255, 261 n. 4 (3d Cir. 2013); Williams v.

Homestake Mortgage Co., 968 F.2d 1137, 1140 (11th Cir. 1992).

But the court in this case did not order rescission, and so

there is no issue of the defendant’s owing the plaintiff mon-

ey and refusing to pay it. The plaintiff argues that because

her $516,000 in deposit money was held in escrow rather

than being in the defendant’s possession, her claim for its

return is a damages claim. The argument makes no sense. A

judgment of rescission would direct (if necessary order, after

joinder of the escrow agent as a defendant) the escrow agent

to return the money to the plaintiff. She isn’t entitled to the

money because she isn’t entitled to rescission.

We note for future reference (an issue discussed by the

parties though academic in light of our ruling on the deposit

money) that if the plaintiff were entitled to her $516,000 back

she would be entitled to interest on it. Under Illinois law in-

terest is recoverable if specified in a contract, Kouzoukas v.

Retirement Board of Policemen’s Annuity & Benefit Fund of City

of Chicago, 917 N.E.2d 999, 1015 (Ill. 2009); Tri-G, Inc. v. Burke,

Bosselman & Weaver, 856 N.E.2d 389, 410–11 (Ill. 2006), and

the purchase agreement provided for a return of Goldberg’s

earnest money, plus interest, as liquidated damages in the

event of a breach by TrumpOrg. The interest could be con-

siderable, depending on how it was calculated, a question

not discussed by the parties. One possibility would be the

yield on what would have been the plaintiff’s likeliest alter-

native investment. Another would be the default prejudg-

ment interest rate in Illinois, which is 5 percent. 815 ILCS

205/1, 205/2. A pretrial “itemization of damages” that the

plaintiff filed in the district court requested an interest rate

of between 3 and 6 percent, which is broadly consistent with

12 No. 13-3057

the default rate. Other possibilities are the Illinois Condo

Act’s disclosure provision, which specifies prejudgment in-

terest of 9 percent, the rate specified elsewhere in Illinois law

for interest on judgments, 765 ILCS 605/22; 735 ILCS 5/2-

1303, and the Illinois Securities Law’s prejudgment interest

rate, which is 10 percent unless the security provides other-

wise. 815 ILCS 5/13(A)(1). And in an equity case the court

can award whatever interest rate it chooses that would not

be an abuse of discretion. Finley v. Finley, 410 N.E.2d 12, 19

(Ill. 1980).

We add that if interest were awarded in a case like this, it

would not be a form of damages; it would be a means of

placing the parties in the positions they would have occu-

pied had there never been a contract, which is the objective

of rescission. The reason for adding interest would be that

the parties can’t actually be returned to the positions they

occupied back when the contract was signed. The past can-

not be recreated. Time runs in only one direction—and it’s

forward, not backward. Rescission aims to place the parties

where they would be today had there not been a contract be-

tween them.

We turn to the claims that the district judge dismissed

without a trial. One is that the alleged bait and switch was

an unfair act, whether or not it was deceptive. Section 2 of

the Illinois consumer-fraud act, 815 ILCS 505/2, like section

5(a)(1) of the Federal Trade Commission Act, 15 U.S.C.

§ 45(a)(1), on which section 2 is, as we noted, modeled, for-

bids unfair acts separately from deceptive ones. An example

is oppressive methods of debt collection, Robinson v. Toyota

Motor Credit Corp., 775 N.E.2d 951, 960–61 (Ill. 2002) (citing

FTC v. Sperry & Hutchinson Co., 405 U.S. 233 (1972)), which

No. 13-3057 13

need not (though they often do) involve deception. But until

the instructions conference the plaintiff’s only theory of con-

sumer fraud was bait and switch in its conventional sense.

The jury rejected it; advised by counsel and clearly informed

by the purchase agreement that by signing it she was in ef-

fect buying a pig in a poke, she made a risky investment by

agreeing to purchase a product that the seller had reserved

the right to change in a manner that might reduce its value

to her (though probably not by a great deal, as will become

clear). She had signed with her eyes open.

What is deceptive is also unfair. But to have instructed

the jury, as the plaintiff would have liked the judge to do,

that it could find the defendant’s conduct to have been either

deceptive or unfair, or both, would have been confusing. If

the conduct was deceptive, it violated the consumer-fraud

act. If it wasn’t, it didn’t, because the charge of unfairness

was a charge of deception by another name. As the district

judge explained in refusing the plaintiff’s eleventh-hour re-

quest for a jury instruction on unfairness distinct from de-

ception, “Plaintiff has never previously asserted a theory

based on the fairness of the elimination or the changes made

in and of themselves, but instead has consistently grounded

her recovery in Defendants’ misrepresentations, omissions

and concealment … which induced her to sign her Purchase

Agreements. Because Defendants were not on notice of this

theory and have not defended the case based on this theory,

Defendants will suffer unfair prejudice if Plaintiff can now—

on the eve of trial—pursue this new theory.”

We come next to the Illinois Securities Law of 1953,

which parallels the federal securities statutes and, so far as

bears on this case, requires registration with state authorities

14 No. 13-3057

of any “investment contract.” 815 ILCS 5/2.1, 5/5. The plain-

tiff argues that the purchase agreement she signed was an

investment contract, just as if it had been a contract to pur-

chase shares of stock in TrumpOrg, because she was invest-

ing in a pool of commingled assets—the health club, the

ballrooms, etc.

In all probability the claim is time barred. The applicable

statute of limitations is three years from the “date of sale.”

815 ILCS 5/13(D). The plaintiff signed the purchase agree-

ment in August 2006 but didn’t bring suit until September

2009—three years plus one month later. She argues that each

of the additional installment payments that she made, in Oc-

tober 2006 and February 2008 respectively, was a new “sale”

and therefore restarted the three-year limitations period.

This dubious theory, whereby “every step toward the com-

pletion of a sale [is] a sale,” was endorsed a half century ago

by Illinois’s intermediate appellate court, see Silverman v.

Chicago Ramada Inn, Inc., 211 N.E.2d 596, 599 (Ill. App. 1965),

but was abandoned in later decisions, which make the stat-

ute of limitations begin to run on the date of sale, provided

the parties’ rights were fixed at that time. Doll v. Bernard, 578

N.E.2d 1053, 1056 (Ill. App. 1991); Frantzve v. Joseph, 502

N.E.2d 396, 397–98 (Ill. App. 1986). The installment pay-

ments in this case didn’t alter any legal rights. Those rights

were fixed in the purchase agreement, and the date of that

agreement was therefore the date of sale and thus the date

on which the statute of limitations began to run.

The plaintiff’s security claim would fail even if timely for

the reason given by the district judge: the purchase agree-

ment wasn’t an “investment contract” and was therefore not

a security under Illinois law (which adopts federal law on

No. 13-3057 15

this point, Ronnett v. American Breeding Herds, Inc., 464

N.E.2d 1201, 1203 (Ill. App. 1984)), because it didn’t involve

a “common enterprise.” SEC v. W.J. Howey Co., 328 U.S. 293,

299 (1946). That means an enterprise in which “multiple in-

vestors … pool their investments and receive pro rata prof-

its.” Stenger v. R.H. Love Galleries, Inc., 741 F.2d 144, 146 (7th

Cir. 1984). “The owner of a condominium does not own an

undivided share of the building complex in which his con-

dominium is located. He owns his condominium, and if it is

rented out for him by the developer he receives the particu-

lar rental on that unit rather than an undivided share of the

total rentals of all the units that are rented out. The nature of

his interest thus is different from that of a shareholder in a

corporation that owns rental property.” Wals v. Fox Hill De-

velopment Corp., 24 F.3d 1016, 1018 (7th Cir. 1994); see also 2

Louis Loss et al., Securities Regulation § 3(A)(1)(d)(iv), pp.

987–90 (4th ed. 2007). The only thing that’s different about

this case is revenue-generating hotel facilities—but remem-

ber that TrumpOrg removed these facilities from the com-

mon elements.

And had the hotel facilities remained in the common el-

ements, the expected revenue from them to a condominium

owner (at least one who like the plaintiff owned no more

than two condominium units) was so small that the owner

couldn’t have “expect[ed to] earn a profit solely through the

efforts of” TrumpOrg’s administration of those facilities; and

without such an expectation the condominium units could

not be securities. SEC v. W.J. Howey Co., supra, 328 U.S. at

298. Had there been no change clause and so no changes to

the common elements in the Fourth Amendment, the plain-

tiff’s annual maintenance fees of $54,000 per unit would

have fallen by only between $1400 and $1700—at most 3

16 No. 13-3057

percent. “The possibility of some rental reduction is not an

‘expectation of profit’” that converts a real-estate contract

into a security. United Housing Foundation, Inc. v. Forman, 421

U.S. 837, 857 (1975) (emphasis added); see also SEC Release

No. 33-5347, “Offers and Sales of Condominiums or Units in

a Real Estate Development,” 38 Fed. Reg. 1735–36 (Jan. 18,

1973).

It’s not as if the plaintiff had been induced to buy the

condos because of the potential income from the common

elements; none of the marketing materials mentions this

possibility. See United Housing Foundation, Inc. v. Forman, su-

pra, 421 U.S. at 852; SEC v. W.J. Howey Co., supra, 328 U.S. at

300. She bought them as speculative real estate investments,

hoping also to earn some rental income from them, which is

different from sharing returns common to all the hotel con-

dominium owners.

Goldberg asks us to certify to the Supreme Court of Illi-

nois the question what is required to establish a “common

enterprise” in Illinois, without which as we noted her in-

vestment could not have been a security. We have said that

the “most important consideration” in deciding whether to

certify is whether we find ourselves “genuinely uncertain

about a question of state law that is vital to a correct disposi-

tion of the case.” State Farm Mutual Automobile Ins. Co. v.

Pate, 275 F.3d 666, 671 (7th Cir. 2001). Goldberg’s claim un-

der the Illinois Security Law fails on multiple grounds unre-

lated to the issue on which she has requested certification,

and so resolution of that issue is not vital to a correct dispo-

sition of this case. Nor is there any other reason for certifica-

tion.

No. 13-3057 17

The last issue presented by the appeal, and the most puz-

zling, is the claim that the changes made in the rights in the

shared facilities after the plaintiff signed the purchase

agreement violated a provision of the Illinois Condo Act re-

lating to information that must be provided to the prospec-

tive buyer of a condominium unit. The required information

includes “a projected operating budget for the condominium

unit to be sold to the prospective buyer, including full de-

tails concerning the estimated monthly payments for the

condominium unit, estimated monthly charges for mainte-

nance or management of the condominium property, and

monthly charges for the use of recreational facilities.” 765

ILCS 605/22(c). The required information would seem to en-

compass financial benefits that might accrue to the buyer

from the common elements of the condo hotel. But that in-

formation was provided to the plaintiff; her complaint is that

TrumpOrg violated the separate requirement in the Condo

Act that once the contract of sale is executed, “no changes or

amendments may be made in any of the items furnished to

the prospective buyer which would materially affect the

rights of the buyer or the value of the unit without obtaining

the approval of at least 75% of the buyers then owning inter-

est in the condominium … [and] failure on the part of the

seller to make full disclosure as required by this Section shall

entitle the buyer to rescind the contract for sale at any time

before the closing of the contract.” 765 ILCS 605/22.

Notice that two separate violations are specified—

changes that though they would materially affect a buyer’s

rights or the value of the unit bought are made without the

approval of 75 percent of the owners of units; and failure to

make all the required disclosures. A remedy (rescission) is

prescribed for the latter violation but not for the former. The

18 No. 13-3057

plaintiff points out that one of the things TrumpOrg failed to

disclose was that the change to the common elements was

made without obtaining the approval of 75 percent of the

condo owners. But information about whether that approval

was obtained isn’t among the items requiring full disclosure,

see 765 ILCS 605/22(a)–(e), so its omission can’t be a basis for

rescission. And unlike similar statutes in other states, see,

e.g., Hawaii Stat. § 514B-10(c); Neb. Stat. § 76-837(b); see also

Uniform Condominium Act § 4-117, the Illinois Condo Act

doesn’t contain a general provision creating remedies for vi-

olations of it; remedies are specified only for violation of

particular provisions—and the 75 percent requirement is not

one of them.

There are two other possible sources of private remedies

for violation of the 75 percent requirement, however. One is

the provision in the purchase agreement, quoted earlier, that

“Seller shall notify Purchaser or obtain the Purchaser’s ap-

proval of any changes in the Condominium Documents …

when and if such notice or approval is required by law.” The

75 percent approval is required by law—but not the pur-

chaser’s approval. So the contractual route is closed. The re-

maining possibility is that a private damages remedy is

available under another statute, namely the consumer-fraud

act. That act as we know forbids unfair as well as deceptive

acts, and a failure to seek a legally required approval for

withdrawing promised contractual benefits would seem to

be an unfair act. There might also be deception (of a kind not

litigated or determined in the jury trial in this case) in con-

cealing the failure from the other party to the contract.

The consumer-fraud act creates a private damages reme-

dy for violations of any provision of the Act, 815 ILCS

No. 13-3057 19

505/10a(a), and thus would reach an unfair or deceptive act

resulting from a violation of another statute, in this case the

Condo Act. That is a form of chain liability familiar in feder-

al law; for example, the prohibitions in 28 U.S.C. § 1981 are

enforced against state actors by suits under section 1983, be-

cause section 1981 does not provide remedies against state

actors for violation of its prohibitions. See, e.g., Jett v. Dallas

Independent School District, 491 U.S. 701, 731–32 (1989); Camp-

bell v. Forest Preserve District, 2014 WL 1924479 (7th Cir. May

15, 2014); McGovern v. City of Philadelphia, 554 F.3d 114, 120–

21 (3d Cir. 2009); Arendale v. City of Memphis, 519 F.3d 587,

598–99 (6th Cir. 2008). But this approach to the 75 percent

question was first mentioned at oral argument. Not having

been argued in the plaintiff’s opening brief or reply brief, it

has been forfeited.

With all avenues for relief seemingly closed, the plaintiff

argues that we should “imply” in the statute a right to bring

a private suit for damages. A more candid formulation

would replace “imply” with “create” or “interpolate.” The

defendant points out that such judicial interpolation is disfa-

vored in Illinois law. Fisher v. Lexington Health Care, Inc., 722

N.E.2d 1115, 1117–18, 1121 (Ill. 1999); Cuyler v. United States,

362 F.3d 949, 954–55 (7th Cir. 2004) (Illinois law). It is a na-

tional trend. Courts including the federal courts used to be

quick to interpolate such rights, but have backed off, partly

in response to business hostility to consumer litigation but

also because of recognition that the omission of such a rem-

edy need not be a legislative oversight but may instead re-

flect a compromise with opponents of a proposed regulatory

statute. See Rodriguez v. United States, 480 U.S. 522, 525–26

(1987) (per curiam); John F. Manning, “What Divides Textu-

alists from Purposivists?,” 106 Colum. L. Rev. 70, 103–05

20 No. 13-3057

(2006). Their acquiescence is induced by a watering down of

the remedies for a violation.

An oddity is that not only is no private remedy for viola-

tion of the 75 percent requirement specified, but there ap-

pears to be no public remedy either. The Consumer Fraud

and Deceptive Business Practices Act, in contrast, specifies a

public remedy. See 815 ILCS 505/7. The absence of any such

specification in the Condo Act is some evidence that there is

no public remedy for violation of that Act.

We need not decide, however, whether in these unusual

circumstances the Supreme Court of Illinois would interpo-

late a private damages remedy. The plaintiff forfeited the

issue by first raising the possibility of an implied statutory

remedy in her reply brief. That was too late. Fiala v. B & B

Enterprises, 738 F.3d 847, 853 (7th Cir. 2013); EIMSKIP v. At-

lantic Fish Market, Inc., 417 F.3d 72, 78 (1st Cir. 2005); 16AA

Charles A. Wright et al., Federal Practice & Procedure § 3974.3,

pp. 277–82 (4th ed. 2008).

The plaintiff makes some other arguments, but they are

too weak to warrant discussion. The judgment in favor of

the defendants on all counts in the complaint is

AFFIRMED.