Bluestein v. Central Wisconsin Anesthesiology, S.C.

In the

United States Court of Appeals

For the Seventh Circuit

Nos. 13-3724, 14-1256 & 14-1257

LINDA BLUESTEIN, M.D.,

Plaintiff-Appellant,

v.

CENTRAL WISCONSIN

ANESTHESIOLOGY, S.C.,

Defendant-Appellee.

and

APPEAL OF: JANET L. HEINS,

Attorney.

Appeals from the United States District Court for the

Western District of Wisconsin.

No. 3:12-cv-00322-bbc— Barbara B. Crabb, Judge.

ARGUED SEPTEMBER 17, 2014 — DECIDED OCTOBER 15, 2014

Before FLAUM, KANNE, and ROVNER, Circuit Judges.

ROVNER, Circuit Judge. Linda Bluestein, M.D., sued Central

Wisconsin Anesthesiology, S.C. (“Central Wisconsin”), for

2 Nos. 13-3724, 14-1256 & 14-1257

discrimination in violation of the Americans With Disabilities

Act, 42 U.S.C. §§ 12101 et seq.; the Rehabilitation Act of 1973, 29

U.S.C. §§ 701 et seq.; and Title VII of the Civil Rights Act of

1964, 42 U.S.C. §§ 2000e et seq. The district court concluded that

Bluestein, a full partner, shareholder, and member of the board

of directors of Central Wisconsin, was an employer rather than

an employee at the service corporation, and was thus ineligible

for the protections of those statutes. The court also found that

Bluestein’s claims would fail as a matter of law on the merits,

and so the court granted summary judgment in favor of

Central Wisconsin. The court also ordered Bluestein and her

attorney, Janet L. Heins, to pay attorneys’ fees to Central

Wisconsin for pursuing a frivolous lawsuit, pursuant to

42 U.S.C. § 2000e-5(k). Bluestein appeals the summary judg-

ment in favor of Central Wisconsin. Bluestein and Heins

appeal the award of attorneys’ fees. Central Wisconsin also

seeks attorneys’ fees and costs pursuant to Federal Rule of

Appellate Procedure 38 for defending this appeal. We affirm

the judgment and the award of fees in the district court. We

decline to award additional attorneys’ fees.

I.

Central Wisconsin is a service corporation organized under

Wisconsin law to engage in the practice of providing anesthe-

sia services. See Wis. Stat. §§ 180.1901 - 180.1921. Bluestein is an

anesthesiologist who began working for Central Wisconsin in

1996 on a part-time basis. Her initial employment agreement

identified her as an employee, and she worked in that capacity

for approximately two and a half years. As of January 1, 1999,

Bluestein became a full partner of Central Wisconsin as well as

a shareholder and member of the board of directors, which is

Nos. 13-3724, 14-1256 & 14-1257 3

comprised of all of the physician-shareholders. As a share-

holder, she had a vote on all matters coming before the board.

After a June 1999 board vote, Bluestein began receiving a

quarterly distribution equal to that of the other shareholders.

In 2000, she was elected to the position of secretary-treasurer

of the board, a post she held for approximately three years.

From 2007 to 2010, she served as the chair of the compliance

committee of the board.

The corporation was organized so that the physician-

shareholders shared profits and losses equally.1 Board- and

committee-approved policies applied uniformly to all of the

shareholders and covered everything from compensation to

vacation. Corporate bylaws provided when and how board

meetings were to be conducted. Most issues affecting the

shareholders were resolved by a majority vote. For example,

1

Although Bluestein denies in her briefs that profits were shared equally,

a review of her citations to the record reveals that she has no evidence to

support this assertion. Federal Rule of Civil Procedure 56 requires that a

party genuinely disputing a fact must support that assertion by citing to

particular parts of the record. Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986)

(in cases where the nonmoving party will bear the burden of proof at trial

on a dispositive issue, when a summary judgment motion was properly

made in reliance on the pleadings, depositions, answers to interrogatories,

and admissions on file, Rule 56(e) requires the nonmoving party to go

beyond the pleadings and by her own affidavits, or by the depositions,

answers to interrogatories, and admissions on file, designate specific facts

showing that there is a genuine issue for trial). Majors v. General Elec. Co.,

714 F.3d 527, 540 (7th Cir. 2013) (conclusory statements unsupported by the

record are insufficient to defeat summary judgment). We will not credit

those parts of Bluestein’s version of the facts that are not supported by any

evidence in the record.

4 Nos. 13-3724, 14-1256 & 14-1257

when Bluestein wished to change her part-time status from

80% to 90% in 2004, that change required approval from a

majority of the board. Bluestein participated in many meetings

where key company issues were decided by a majority vote,

including setting wage increases for non-physician staff,

setting anesthesia fees and policies, changing office computer

technology, changing the shareholders’ deferred compensation

and increasing paid vacation for the shareholders from ten

weeks to twelve weeks per year.

In the fall of 2009, Bluestein sustained injuries in a kayak

accident. She developed ischiogluteal bursitis, proximal

hamstring tendinopathy, sciatica and sacral nerve root cyst.

These conditions made it difficult for her to complete her work

as an anesthesiologist. Over the next several months, she

intermittently took approved time off to rest and recover but

she did not heal enough to return to work at full strength. In

August 2010, she sent her partners a letter setting forth her

status:

Dear colleagues:

As you are probably aware, I am continuing to

struggle with a condition with my hamstring ten-

don.

I have just finished my recommended month off to

allow for healing and recovery. Unfortunately, this

has not led to the improvement we had hoped for. I

have been advised by my treating doctor that the

best course of action at this time would be for me to

take an open ended medical leave of absence in

order that I may continue to pursue the necessary

Nos. 13-3724, 14-1256 & 14-1257 5

treatment options without exacerbating my condi-

tion further. At this time, my treating doctor and I

share in the realization that I am unable to meet the

physical demands of practicing anesthesia. I truly

apologize for any and all inconveniences that my

disabled condition has caused you.

Thank you for your understanding and patience. I

hope to return to work soon.

R. 45-33. After requesting this open-ended leave from her

fellow physician-shareholders, the board voted to deny the

request. The board then held a second vote, presenting

shareholders with two additional options. The first would have

granted Bluestein a four-month leave of absence on the

condition that she would be terminated if she could not

perform her duties as an anesthesiologist without restriction

upon her return. Under the second option, Bluestein would be

allowed to resign as of August 31, 2010, but would be termi-

nated if her letter of resignation was not received by September

16, 2010. Four shareholders voted in favor of the four-month

leave and twelve chose the latter option. When Bluestein did

not resign by September 16, 2010, she was terminated the next

day. Shortly thereafter, the board voted to give Bluestein her

deferred compensation as calculated by the firm’s deferred

compensation formula.

Bluestein sued Central Wisconsin for violations of the

Americans With Disabilities Act (“ADA”), the Rehabilitation

Act and Title VII. The district court granted Central Wiscon-

sin’s motion for summary judgment on multiple grounds.

First, the court concluded that Bluestein was an employer at

6 Nos. 13-3724, 14-1256 & 14-1257

Central Wisconsin rather than an employee, and thus was not

entitled to the protection of the statutes at issue. Although that

conclusion was fatal to all of Bluestein’s claims, the court also

considered each discrimination claim on its merits. The court

rejected Bluestein’s ADA claim because she had produced no

evidence to demonstrate that she had a substantial limitation

in any major life activity and thus was not disabled as that

term is defined by the statute. Moreover, she had notified her

colleagues that she was unable to perform the essential

functions of her job and therefore was not a qualified individ-

ual with a disability unless there was a reasonable accommo-

dation that would allow her to fulfill her job duties. The court

found that she failed to demonstrate that a four-month leave

would have enabled her to return to work and that the open-

ended leave request was unreasonable as a matter of law. The

court similarly concluded that her claim of sex discrimination

failed because she produced no evidence that the disabled

male colleague to whom she compared herself was similarly

situated. The court summarily rejected the Rehabilitation Act

claim because Bluestein lacked evidence that Central Wiscon-

sin receives federal financial assistance, a requirement for

recovery under that statute. In response to Central Wisconsin’s

motion for attorneys’ fees, the court agreed that Bluestein’s

lawsuit was “frivolous, unreasonable and without founda-

tion.” Bluestein v. Central Wisconsin Anesthesiology, P.C., 2014

WL 61157, *2 (W.D. Wis. Jan. 8, 2014). Acknowledging that an

award of fees should be rare in discrimination cases, the court

nevertheless concluded that fees were appropriate in this case

because “a reasonable amount of legal research should have

alerted counsel to the implausibility of success on any of

Nos. 13-3724, 14-1256 & 14-1257 7

plaintiff’s claims of discrimination.” Id. The court found that it

was unreasonable for Bluestein to think that she could prevail

on “clearly frivolous claims of discrimination” because she

should have known she was not an “employee” of Central

Wisconsin and because she had admitted to her colleagues that

she could not perform the essential functions of her job. Id. The

court therefore ordered Bluestein and her attorney to pay

Central Wisconsin’s attorneys’ fees. Bluestein and her counsel

appeal.

II.

On appeal, Bluestein contends that she was an employee

for the purposes of the statutes at issue. She also maintains that

she has raised genuine issues of material fact regarding her

disability and sex discrimination claims. Finally, she asserts

that the district court abused its discretion in awarding

attorneys’ fees to the defendant. We review the district court's

grant of summary judgment de novo, examining the record in

the light most favorable to Bluestein and construing all

reasonable inferences from the evidence in her favor. Anderson

v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986); Naficy v. Illinois

Dep't of Human Servs., 697 F.3d 504, 509 (7th Cir. 2012);

Norman–Nunnery v. Madison Area Technical Coll., 625 F.3d 422,

428 (7th Cir. 2010). Summary judgment is appropriate when

there are no genuine disputes of material fact and the movant

is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a);

Naficy, 697 F.3d at 509. Central Wisconsin sought and was

granted fees as a prevailing party pursuant to 42 U.S.C.

8 Nos. 13-3724, 14-1256 & 14-1257

§ 2000e-5(k).2 We review the district court’s grant of attorneys’

fees under that provision for abuse of discretion. Christiansburg

Garment Co. v. Equal Employment Opportunity Commission, 434

U.S. 412, 421 (1978); Munson v. Milwaukee Bd. of School Directors,

969 F.2d 266, 269 (7th Cir. 1992) (district courts are given wide

latitude to determine whether an award of fees to prevailing

defendants is appropriate in a given case, and we will reverse

a decision to award fees to a prevailing defendant only upon

a showing of abuse of discretion by the district court).

A.

The threshold question for Bluestein’s claims is whether she

is an “employee” protected by the statutes at issue. Each of the

statutes invoked by Bluestein protects employees (and others

not at issue here, such as job applicants) from discrimination

by employers. See 42 U.S.C. § 12112(a);3 29 U.S.C. § 794(d);4

2

That subsection provides, in relevant part: “In any action or proceeding

under this subchapter the court, in its discretion, may allow the prevailing

party … a reasonable attorney's fee … as part of the costs[.]”

3

The statute provides: “No covered entity shall discriminate against a

qualified individual on the basis of disability in regard to job application

procedures, the hiring, advancement, or discharge of employees, employee

compensation, job training, and other terms, conditions, and privileges of

employment.”

4

That section of the Rehabilitation Act directs that courts employ the

standards applied under the ADA to determine whether the Rehabilitation

Act has been violated in a complaint alleging employment discrimination.

Nos. 13-3724, 14-1256 & 14-1257 9

42 U.S.C. 2000e-2.5 But the definition of “employee” in each

statute is vague and circular. See 42 U.S.C. § 12111 (“The term

‘employee’ means an individual employed by an employer.”);

42 U.S.C. § 2000e(f) (same). See also Clackamas Gastroenterology

Associates, P.C. v. Wells, 538 U.S. 440, 444 (2003) (noting that the

definition of “employee” in the ADA is circular). “Employer”

is defined in the ADA as “a person engaged in an industry

affecting commerce who has 15 or more employees for each

working day in each of 20 or more calendar weeks in the

current or preceding calendar year, and any agent of such

person.” 42 U.S.C. § 12111(5)(A).

When faced with the question of determining the meaning

of the term “employee” in the context of the ADA, the Su-

preme Court reasoned that, when a statute does not provide a

working definition, the courts should turn to the common law

test for determining who qualifies as an employee. Clackamas,

538 U.S. at 444-45. Clackamas presented a scenario that was

remarkably similar to the circumstances at Central Wisconsin.

In that case, a bookkeeper sued a medical clinic for disability

discrimination under the ADA. Because the ADA applies only

to employers whose workforce includes fifteen or more

5

The statute provides: “It shall be an unlawful employment practice for an

employer– (1) to fail or refuse to hire or to discharge any individual, or

otherwise to discriminate against any individual with respect to his

compensation, terms, conditions, or privileges of employment, because of

such individual's race, color, religion, sex, or national origin; or (2) to limit,

segregate, or classify his employees or applicants for employment in any

way which would deprive or tend to deprive any individual of employment

opportunities or otherwise adversely affect his status as an employee,

because of such individual's race, color, religion, sex, or national origin.”

10 Nos. 13-3724, 14-1256 & 14-1257

employees, it was necessary to determine how many “em-

ployees” the clinic employed during the relevant time period.

This in turn depended on whether the “four physicians

actively engaged in medical practice as shareholders and

directors of a professional corporation should be counted as

‘employees.’” 538 U.S. at 442. The Court noted that it had

previously adopted the common law test to determine who

qualifies as an employee for the purposes of the Employee

Retirement Income Security Act of 1974 (“ERISA”). But the

defendant-clinic in Clackamas encouraged the Court to reject

the common law analysis in the ADA context and instead

conclude that the shareholder-directors were more analogous

to partners in a partnership than to shareholders in a corpora-

tion. Partners, the clinic argued, were employers rather than

employees. The Court rejected the clinic’s assertion, noting that

partnerships sometimes include hundreds of members, some

of whom would easily qualify as employees when control is

concentrated in a small number of managing partners. 538 U.S.

at 445-46.

Instead, the Court returned to the common law definition

of “servant” in determining whether an individual is an

employee. Clackamas, 538 U.S. at 448. Under the common law

definition, a servant is a person whose work is controlled or is

subject to a right to control by the master. Based on the

Restatement (Second) of Agency, §§ 2(2) and 220(2)(a), the

Court remarked that the element of control should be the

principal guidepost in assessing whether a person is an

employee. 538 U.S. at 448. The Court then adopted a non-

exclusive list of six factors designed to reflect the common law

element of control:

Nos. 13-3724, 14-1256 & 14-1257 11

Whether the organization can hire or fire the indi-

vidual or set the rules and regulations of the individ-

ual's work;

Whether and, if so, to what extent the organization

supervises the individual's work;

Whether the individual reports to someone higher in

the organization;

Whether and, if so, to what extent the individual is

able to influence the organization;

Whether the parties intended that the individual be

an employee, as expressed in written agreements or

contracts; and

Whether the individual shares in the profits, losses,

and liabilities of the organization.

Clackamas, 538 U.S. at 449-50. In contrast,

an employer is the person, or group of persons, who

owns and manages the enterprise. The employer can

hire and fire employees, can assign tasks to employ-

ees and supervise their performance, and can decide

how the profits and losses of the business are to be

distributed. The mere fact that a person has a partic-

ular title—such as partner, director, or vice

president—should not necessarily be used to deter-

mine whether he or she is an employee or a propri-

etor. … Nor should the mere existence of a docu-

ment styled “employment agreement” lead inexora-

bly to the conclusion that either party is an em-

ployee.

12 Nos. 13-3724, 14-1256 & 14-1257

538 U.S. at 450. When deciding whether shareholder-directors

were employees, no one factor should be decisive, the Court

emphasized, but all aspects of the relationship should be

considered. 538 U.S. at 451. See also Smith v. Castaways Family

Diner, 453 F.3d 971, 977 (7th Cir. 2006) (no one factor is disposi-

tive and a court must look to all aspects of the relationship

between the shareholder-director and the organization to

decide whether the shareholder-director exerts control or has

the right to exert control over the organization).

With those standards in mind, the question for Bluestein is

whether she raised a genuine issue of material fact on the issue

of her status as an employee. As we noted above, she was a

shareholder and member of the board of directors at Central

Wisconsin, entitled to vote on all issues coming before the

board and subject to the same board-and committee-approved

policies as every other physician-shareholder of the service

corporation. There were approximately sixteen physician-

shareholders at the time of Bluestein’s termination. Turning to

the first part of the first factor, whether the organization can

hire or fire the individual, the record demonstrated that hiring

and firing decisions were made collectively by the shareholder-

board members. Indeed, Bluestein herself voted on her own

termination. Clackamas, 538 U.S. at 450 (an employer can hire

and fire employees). That she was in the minority of that vote

does not diminish her right of control on hiring and firing; the

right to cast a vote equal to that of any other board member

unequivocally indicates that Bluestein was an employer rather

than an employee for the purposes of hiring and firing. Solon

v. Kaplan, 398 F.3d 629, 634 (7th Cir. 2005) (shareholder’s

contention that he was outvoted does not undermine conclu-

Nos. 13-3724, 14-1256 & 14-1257 13

sion that he was an employer when he had an equal right to

vote); Schmidt v. Ottawa Medical Center, P.C., 322 F.3d 461, 467

(7th Cir. 2003) (physician-shareholder with equal vote is

employer notwithstanding his repeated inability to secure the

majority opinion of his fellow shareholders).

Bluestein fares no better on the second part of the first

factor, namely, whether the organization set the rules and

regulations of the individual's work. Bluestein complains that,

under various policies adopted by the board and its subcom-

mittees, she could not unilaterally take a vacation day, set her

own schedule, assign cases to herself, or decide when she

could take her lunch or a break. Again, the undisputed record

demonstrates that it was not the “organization” but the

physician-shareholders who collectively voted at board

meetings on the rules and regulations that governed all of the

staff. Bluestein herself participated in board meetings and

committee meetings where she voted on issues relating to

compensation, vacation policy and other workplace issues.

Unlike the non-physician staff members at Central Wisconsin,

as a full board member, Bluestein was one of the decision-

makers who determined the rules and regulations that gov-

erned her own work and the work of others at the organiza-

tion. Moreover, under the bylaws, any physician-shareholder

who could secure the support of a sufficient number of board

members could challenge and change those policies.

Turning to the second factor, whether the organization

supervises the individual's work, Bluestein presented no

evidence that anyone at Central Wisconsin supervised her

work as an anesthesiologist. Bluestein asserts as evidence of

supervision that she could not change her part-time work

14 Nos. 13-3724, 14-1256 & 14-1257

schedule from 80% to 90% without board approval. Nor could

she unilaterally take a leave of absence or decide upon and

implement her own disability accommodations. We note first

that these are not matters relating to the supervision of her

work as an anesthesiologist but are more in the nature of the

general office rules and policies that we addressed in the first

factor. The salient point is that Bluestein could point to no

supervisor at Central Wisconsin who dictated how Bluestein

practiced anesthesiology. As a physician, she determined how

to complete the specific tasks of her work. Bluestein has

produced no evidence that anyone at Central Wisconsin had a

right to control the details of her work. See Clackamas, 538 U.S.

at 448 (in distinguishing between servants and independent

contractors, the extent of control one may exercise over the

details of the work of the other is a primary consideration);

Schmidt, 322 F.3d at 467 (where service corporation’s board

assigns patients to physicians, and physician then has absolute

authority for the treatment of those patients, the physician is an

employer rather than an employee, especially where the

physician exercises as much control over his employment as

any other member of the physician-shareholder board).

Bluestein thus fails to raise a genuine issue of material fact on

the question of supervision.

Bluestein treats the third factor—whether the individual

reports to someone higher in the organization—as essentially

co-extensive with the test for supervision. She asserts that one

physician, Dr. Mason, was the chair of the board for eleven

years, that he intimidated and discouraged others from

running for the post of chair, and that he failed to follow the

bylaws requirement of holding an election every two years.

Nos. 13-3724, 14-1256 & 14-1257 15

Bluestein claims that she was required to seek approval from

Mason or another physician for days off, and that a committee

of which she was not a member determined doctors’ schedules

and patient assignments. But all of this was the result of the

collective action (or inaction) of Bluestein’s fellow physician-

shareholders. That Bluestein was in a minority position on how

the service corporation organized schedules, patient assign-

ments and time off is irrelevant to her right to an equal vote on

these issues as a shareholder. None of this evidence addresses

whether she “reported to” someone higher in the organization.

Instead, the evidence demonstrates that each physician-

shareholder had an equal vote in matters affecting the organi-

zation. That some functions or control may have been dele-

gated to the board chair is irrelevant because Bluestein had an

equal vote in the delegation. Nor does it matter for the pur-

poses of determining her status as an employee that Dr. Mason

appeared to have great influence with his colleagues. Under

the bylaws, the shareholders were free to delegate authority to

one of their members and just as free to retract that delegation.

But each shareholder, including Bluestein, had an equal vote.

Once again, that she was in the minority view does not detract

from her right of control.

The fourth factor is whether and to what extent an individ-

ual is able to influence the organization. Bluestein asserts that

she had no authority, control or influence over the board. But

she bases this assertion on the same evidence that we found

inadequate above. She does not dispute on appeal that she was

a full member of the board and an equal shareholder entitled

to vote on all matters coming before the board. Instead, she

essentially alleges that she frequently found herself in the

16 Nos. 13-3724, 14-1256 & 14-1257

minority position on how her colleagues decided to run the

business. Not winning the vote is not the same as not having

a vote, however, and it is her opportunity for shared control

that counts when determining whether she was an employer

or employee. See Schmidt, 322 F.3d at 468 (“when an individual

claimant-shareholder enjoys the opportunity for shared control

of the closely held professional corporation, including the

opportunity to share in its profits, we will treat him or her as

a bona fide employer for purposes of the ADEA.”).

As the district court noted, Bluestein’s situation was

markedly different from that of the thirty-two partners

demoted from full partnership in EEOC v. Sidley Austin Brown

& Wood, 315 F.3d 696 (7th Cir. 2002). In that case, a large law

firm consisting of more than 500 partners demoted thirty-two

partners who then sued the firm under the Age Discrimination

in Employment Act. Unlike Central Wisconsin, the law firm

was controlled by a small, self-perpetuating executive commit-

tee that held the power to hire, fire, promote and determine the

compensation of the partners who were not on the committee.

Although all partners shared the firm’s liabilities in proportion

to their share of capital in the firm, profits were distributed

according to a formula determined by the executive committee.

All of the firm’s committees were subject to the control of the

executive committee, which appointed all of the members of

other committees. The partners did not elect the members of

the executive committee; instead, the executive committee

determined its own membership. The thirty-two demoted

partners thus had no voting power and no control over their

fate at the firm. The only issue on which the entire partnership

voted related to a merger with another firm. Otherwise, the

Nos. 13-3724, 14-1256 & 14-1257 17

executive committee controlled the running of the firm. We

held that not all partners should be deemed employers as a

matter of law. 315 F.3d at 702. Rather, some shareholders of a

professional corporation may be considered employees for the

purposes of federal anti-discrimination law. 315 F.3d at 703.

The manner of sharing profits and liabilities, the partners’

ability to control their own fates, and the amount of control

partners had to conduct their own work all contributed to the

analysis of whether these thirty-two partners were employers

or employees. We remanded to the district court to allow for

discovery on those issues.

In contrast, Central Wisconsin was run by a sixteen-

member board that consisted of all of the physician-sharehold-

ers, not some exclusive subset of them. All major decisions

were put to a vote and each shareholder had an equal vote.

Both profits and losses were shared equally. Bluestein enjoyed

the same right of control that every other physician-share-

holder possessed. She possessed no more or less of a right to

influence the organization than any other partner.

Turning to the fifth factor—whether the parties intended

the individual to be an employee, as expressed in written

agreements or contracts—we will assume that the contract

Bluestein signed before she became a full shareholder was still

in effect at the time of her termination from the service

corporation. That contract referred to Bluestein as an em-

ployee. Bluestein also notes that she received a W-2 form

indicating her wages annually. But the Clackamas Court

cautioned that “the mere existence of a document styled

‘employment agreement’ [should not] lead inexorably to the

conclusion that either party is an employee.” Clackamas, 538

18 Nos. 13-3724, 14-1256 & 14-1257

U.S. at 450-51. And we found that the physician-shareholder in

Schmidt was an employer even though he had an employment

agreement with the professional corporation that described

him repeatedly as an employee and even though he received

a base salary reported on a W-2. Schmidt was an employer, we

found, because he shared in the management and control of

the professional corporation throughout his career, and was a

shareholder, a corporate officer, a board member and a director

throughout his tenure. As a shareholder, he possessed an equal

vote in all matters put to a shareholder vote and had a voice in

all matters put before the board. 322 F.3d at 467. Like Bluestein,

he frequently found himself in the minority position on the

votes of his fellow shareholders but that did not alter the fact

that he had the right to exercise control with each vote and had

an opportunity to participate in revising and voting on board

plans with which he disagreed. Id. Like Bluestein, Schmidt did

not possess sole authority over the conditions of his employ-

ment but rather shared that authority in equal parts with other

members of the board. Like Bluestein, Schmidt exercised as

much control over his employment as any other shareholder.

322 F.3d at 467. These factors, considered as a whole, overcame

the simple labeling of Schmidt as an employee in the employ-

ment agreement. 322 F.3d at 468 (“when an individual claim-

ant-shareholder enjoys the opportunity for shared control of

the closely held professional corporation, including the

opportunity to share in its profits, we will treat him or her as

a bona fide employer for purposes of the ADEA”). Under our

reasoning in Schmidt, the language in Bluestein’s contract

cannot overcome the reality of her position in the professional

corporation.

Nos. 13-3724, 14-1256 & 14-1257 19

Finally, Bluestein failed to raise a genuine issue of material

fact on the sixth factor, whether an individual shares in the

profits, losses and liabilities of the organization. In addressing

the sixth factor, Bluestein baldly asserts in her brief that she did

not share equally in the profits and losses of Central Wisconsin.

But a review of her citations to the record reveals no evidence

in support of that assertion. She therefore raises no genuine

issue of material fact on the sixth factor. See supra note 1.

Taking all six factors as a whole, we conclude that Bluestein

was an employer as a matter of law. In sum, she was a full

physician-shareholder and board member in a small medical

professional corporation. She had an equal right to vote on all

matters coming before the board, shared equally in the firm’s

profits and liabilities, and participated in decisions to hire and

fire employees. She even voted on her own termination.

Although she was subject to general workplace policies

regarding her hours, vacation, scheduling and patient assign-

ments, all the physician-shareholders were subject to the same

policies, and all had an equal right to influence those policies.

She reported to no one and the details of her work as an

anesthesiologist were not supervised or controlled by anyone

at the firm. Although she often found herself in the minority

position among her fellow physician-shareholders, it is her

right of control that matters to the analysis. Our conclusion that

she was an employer is fatal to all of her discrimination claims.

We therefore need not consider the merits of the individual

discrimination claims and we affirm summary judgment in

favor of Central Wisconsin.

20 Nos. 13-3724, 14-1256 & 14-1257

B.

Bluestein and her lawyer also appeal the district court’s

award of attorneys’ fees pursuant to 42 U.S.C. § 2000e-5(k), a

determination that we review for abuse of discretion.

Christiansburg Garment, 434 U.S. at 421; Munson, 969 F.2d at

269. “[A] district court may in its discretion award attorney's

fees to a prevailing defendant in a Title VII case upon a finding

that the plaintiff's action was frivolous, unreasonable, or

without foundation, even though not brought in subjective bad

faith.” Christiansburg Garment, 434 U.S. at 421.

In analyzing the request for fees, the district court re-

counted its conclusions on summary judgment: (1) that the

undisputed facts demonstrated that Bluestein was an employer

rather than an employee; (2) that she failed to produce any

evidence that Central Wisconsin received financial assistance

from the federal government, a requirement for suits under the

Rehabilitation Act; (3) that she did not demonstrate that she

was disabled within the meaning of the ADA because she

produced no evidence of a substantial limitation in a major life

activity; (4) that she did not show what reasonable accommo-

dation the defendant could have provided her; (5) that she did

not demonstrate that she was a “qualified individual” under

the ADA and instead failed to acknowledge her admission to

her fellow shareholders that she was unable to meet the

physical demands of practicing anesthesia; (6) that she did not

establish that the extended or indefinite leave of absence she

requested was a reasonable accommodation in light of circuit

law to the contrary; and (7) that she did not raise a genuine

issue of material fact on her claim of sex discrimination. The

court also noted that a reasonable amount of legal research

Nos. 13-3724, 14-1256 & 14-1257 21

should have alerted counsel to the implausibility of success on

the merits of any of her claims. The combination of these

factors led the court to conclude that Bluestein’s suit was

frivolous, unreasonable and without foundation, and that an

award of fees was appropriate in this instance.

Bluestein cites “two glaring features” of the district court

record that she contends require reversal of the award of fees.

First, the district court denied Central Wisconsin’s motion to

dismiss the case, and second, neither the court nor the defen-

dant ever hinted prior to summary judgment that they consid-

ered the case frivolous. The motion to dismiss, however, was

based not on the merits of the suit but on the plaintiff’s failure

to cooperate with discovery. The court denied that motion

because it concluded that lesser sanctions would be adequate

to remedy the plaintiff’s discovery violations. There was no

reason for the court to address the merits of the suit at that

time. And Bluestein does not explain why it was improper for

the defendant to await the factual development of the case and

summary judgment before seeking fees. In any case, the

defendant alerted the plaintiff that it considered the suit

frivolous when it filed its answer to the complaint early in the

litigation. “Abuse of discretion exists only where the result is

not one that could have been reached by a reasonable jurist or

where the decision of the trial court strikes us as fundamen-

tally wrong or is clearly unreasonable, arbitrary, or fanciful.”

Greviskes v. Universities Research Ass'n, Inc., 417 F.3d 752, 758

(7th Cir. 2005). A reasonable jurist could conclude that

Bluestein’s suit was frivolous, unreasonable and without

foundation, and we therefore affirm the award of attorneys’

fees.

22 Nos. 13-3724, 14-1256 & 14-1257

C.

Finally, Central Wisconsin has moved for attorneys’ fees on

appeal pursuant to Federal Rule of Appellate Procedure 38.

That rule provides that if “a court of appeals determines that

an appeal is frivolous, it may, after a separately filed motion or

notice from the court and reasonable opportunity to respond,

award just damages and single or double costs to the appel-

lee.” Fed. R. App. P. 38. An appeal is frivolous within the

meaning of Rule 38 when it is prosecuted with no reasonable

expectation of altering the district court's judgment and for

purposes of delay or harassment or out of sheer obstinacy.

Wachovia Securities, LLC v. Loop Corp., 726 F.3d 899, 909-10 (7th

Cir. 2013); Giannopoulos v. Brach & Brock Confections, Inc., 109

F.3d 406, 412 (7th Cir. 1997); Flexible Mfg. Systems Pty. Ltd. v.

Super Products Corp., 86 F.3d 96, 101 (7th Cir. 1996). See also

Lorentzen v. Anderson Pest Control, 64 F.3d 327, 331 (7th Cir.

1995) (an appeal is frivolous for the purposes of Rule 38 when

the result is obvious or when the appellant's arguments are

wholly without merit; at times, we have also required some

evidence of bad faith before finding that sanctions should be

imposed). Rule 38 is permissive rather than mandatory, and so

we may decline to impose fees even if we find that an appeal

is frivolous. See e.g. Lorentzen, 64 F.3d at 331. Poor judgment

may have driven the appeal here but we see no evidence of

bad faith, harassment or obstinacy. Lorentzen, 64 F.3d at 331.

The sanctions below were substantial and no useful purpose

would be served in ordering the plaintiff to pay further

attorneys’ fees to Central Wisconsin. The plaintiff shall bear the

defendant’s costs on appeal. AFFIRMED.