Subhadra Gunawardana v. American Veterinary Medical

NONPRECEDENTIAL DISPOSITION

To be cited only in accordance with FED. R. APP. P. 32.1

United States Court of Appeals

For the Seventh Circuit

Chicago, Illinois 60604

Submitted October 25, 2021*

Decided October 25, 2021

Before

WILLIAM J. BAUER, Circuit Judge

MICHAEL S. KANNE, Circuit Judge

MICHAEL B. BRENNAN, Circuit Judge

No. 21‐1330

SUBHADRA GUNAWARDANA and Appeal from the United States District

DAVID SEELY, Court for the Southern District of

Plaintiffs‐Appellants, Illinois.

v. No. 19‐cv‐96‐NJR

AMERICAN VETERINARY MEDICAL Nancy J. Rosenstengel,

ASSOCIATION, et al., Chief Judge.

Defendants‐Appellees.

* Defendants‐Appellees, the Educational Commission for Foreign Veterinary

Graduates and the Council on Education (both divisions of the American Veterinary

Medical Association), were not served with process and are not participating in this

appeal. We have agreed to decide the case without oral argument because the briefs and

record adequately present the facts and legal arguments, and oral argument would not

significantly aid the court. FED. R. APP. P. 34(a)(2)(C).

No. 21‐1330 Page 2

ORDER

Dr. Subhadra Gunawardana and her husband sued the American Veterinary

Medical Association after she failed a portion of its exam for certifying foreign‐educated

veterinarians. The district court granted the Association’s motion to dismiss. Because

the plaintiffs did not state any claim for relief that was not barred by the release that

Gunawardana signed when registering for the exam, we affirm.

After graduating from veterinary school in Sri Lanka, Gunawardana moved to

the United States, where she earned two graduate degrees in biological sciences and

established herself as a medical researcher. Wanting to become a practicing

veterinarian, she sought certification from the Association’s Educational Commission

for Foreign Veterinary Graduates. Nearly every U.S. jurisdiction requires this

certification before it will issue a veterinary license to a foreign graduate. In applying

for certification, Gunawardana released the Association from “all actions, suits,

obligations, damages, claims and demands arising out of, or in connections with, this

application, the grade or grades given with respect to the examinations or the failure of

[the Association] to issue to [her] a certificate.”

The final step of the certification process is a practical exam, which

Gunawardana failed three times. Five days before her second attempt, she was

diagnosed with osteoarthritis in her right hand and requested an accommodation. The

Association declined because it requires applicants to make such requests at least 90

days in advance. As a result, David Seely, her husband, traveled with her to the second

exam to ensure she minimized her physical exertion while traveling. Gunawardana did

not request an accommodation for her third attempt; by then, her arthritis was

“adequately controlled,” so an accommodation was unnecessary.

Acting pro se, Gunawardana and Seely sued the Association, its Educational

Commission for Foreign Veterinary Graduates, and another of its internal branches. The

complaint alleged that the Association wrongly denied Gunawardana a certificate

because she is Sri Lankan—in violation of (1) Title VII of the Civil Rights Act, 42 U.S.C.

§§ 2000e–2000e‐17; (2) 42 U.S.C. § 1981; (3) the Equal Protection and Due Process

Clauses of the Fourteenth Amendment; and (4) 42 U.S.C. § 1985(3). Gunawardana

further claimed that (5) the Association breached a contract with her in violation of the

Illinois Uniform Commercial Code, 810 ILCS 5/2‐101–5/2‐725; (6) the denial of an

accommodation violated Title III of the Americans with Disabilities Act, 42 U.S.C.

§§ 12181‐12189; and (7) the Association held a monopoly on veterinary certifications in

No. 21‐1330 Page 3

violation of the Sherman Act, 15 U.S.C. §§ 1–2. Seely asserted his own antitrust and

ADA claims. The district court granted the plaintiffs leave to amend their complaint in

response to the Association’s first motion to dismiss. (The plaintiffs had sought leave

more than 21 days after service of the motion. See FED. R. CIV. P. 15(a)(1)(B).)

More than five months after they did so, the Association filed a second motion to

dismiss. This filing came well past the 14‐day deadline set by Federal Rule of Civil

Procedure 15(a)(3). The plaintiffs moved to extend their time for responding but did not

otherwise object. During a status hearing, the district court noted that the Association’s

motion to dismiss was “pretty far out of time” and asked the plaintiffs to clarify that

they sought only an extension. The plaintiffs confirmed they could respond to the

motion if given extra time, and the district court obliged.

In their response brief, however, the plaintiffs sought for the first time to strike

the motion to dismiss as untimely. Then, over two months later and after the motion to

dismiss and the motion to strike were fully briefed, the plaintiffs moved for leave to file

a second amended complaint. The district court denied that motion, citing the

previously entered scheduling order and the prejudice that would result to the

Association from again allowing amendment instead of ruling on its motion to dismiss.

The court denied the request to strike, as well. The court explained that the plaintiffs

had waived their timeliness objection when they agreed to a briefing schedule at the

status hearing.

On the merits, the court dismissed the amended complaint with prejudice. It

ruled that the release blocked most of Gunawardana’s claims. (The court could consider

the release when ruling on the motion to dismiss because the plaintiffs had referenced it

in their pleadings. See Geinosky v. City of Chicago, 675 F.3d 743, 745 n.1 (7th Cir. 2012).)

The court also explained that the complaint did not state a claim, irrespective of the

release and, further, Seely lacked standing to raise independent claims.

On appeal, the plaintiffs first argue that the district court erred in accepting the

Association’s untimely motion to dismiss and then denying their motion to strike. At

the status hearing, the court appropriately accepted the motion to dismiss and entered a

briefing schedule—after pointing out the lateness of the motion to dismiss and

clarifying that the plaintiffs did not object, and sought only an extension of time. We

will not interfere with this exercise of discretion. See Aldridge v. Forest River, Inc.,

635 F.3d 870, 875 (7th Cir. 2011). Nor do we find an abuse of discretion in the denial of

the motion to strike, which was itself belated. The court properly determined that the

plaintiffs had waived those arguments in their motion when they did not object at the

No. 21‐1330 Page 4

status hearing. See Hamer v. Neighborhood Hous. Servs. of Chi., 897 F.3d 835, 839–40

(7th Cir. 2018).

The plaintiffs next challenge the district court’s conclusion that the release

Gunawardana signed is valid. Under Illinois law—which the parties agree controls—

prospective releases from liability are generally enforceable unless they violate settled

public policy. Horne v. Electr. Eel Mfg. Co., 987 F.3d 704, 718 (7th Cir. 2021) (quoting

Harris v. Walker, 519 N.E.2d 917, 919 (Ill. 1988)); Sanjuan v. Am. Bd. of Psychiatry &

Neurology, Inc., 40 F.3d 247, 252 (7th Cir. 1994). The plaintiffs argue that the release here

is an unfair contract of adhesion; Gunawardana had no choice but to sign it if she

wanted her certificate. Generally, this “generic ‘David and Goliath’ argument regarding

the relative bargaining positions of the parties is not the sort of disparity that violates

public policy under Illinois law.” Horne, 987 F.3d at 724. And we have applied Illinois

law to uphold a release of an applicant’s right to sue a professional‐certification

organization. See Sanjuan, 40 F.3d at 249.

Gunawardana counters that the release violates public policy because the

Association’s certification is necessary for her to earn a living as a veterinarian. See id.

True, when membership in a private association is an “economic necessity,” Illinois law

allows examination of its membership criteria. See, e.g., Brandner v. Am. Acad. of

Orthopaedic Surgeons, 760 F.3d 627, 628 (7th Cir. 2014) (citing Van Daele v. Vinci,

282 N.E.2d 728, 731 (Ill. 1972)); Gilyana v. Assyrian Am. Ass’n of Chi., 43 N.E.3d 164, 167

(Ill. App. Ct. 2014). But economic necessity does not invalidate all such criteria, such as

the release requirement here. The plaintiffs cite no authority suggesting that a release

violates public policy simply because it is a condition of a mandatory certification.

Because the plaintiffs have not demonstrated that the release is invalid, we must

enforce it on its terms. Platinum Supplemental Ins., Inc. v. Guarantee Tr. Life Ins. Co.,

989 F.3d 556, 563 (7th Cir. 2021); Horne, 987 F.3d at 718. This means that all

“claims … arising out of, or in connection with” Gunawardana’s application for

certification, the administration or grading of her exams, or the decision not to issue a

certificate are barred. That covers most of the plaintiffs’ complaint—at a minimum, the

claims for breach of contract and violation of Title VII, § 1981, and the Americans with

Disabilities Act. See E.E.O.C. v. CVS Pharmacy, Inc., 809 F.3d 335, 336 n.1 (7th Cir. 2015);

Hampton v. Ford Motor Co., 561 F.3d 709, 716 (7th Cir. 2009) (allowing release of federal

right if knowing and voluntary).

Like the plaintiffs in Sanjuan, the plaintiffs appear to contend that the release

does not extend to their claims that the Association violated Gunawardana’s rights to

No. 21‐1330 Page 5

due process and equal protection. Whether the constitutional claims are freestanding or

a way to avoid the release (their argument is not entirely clear), the district court

correctly concluded that the Association is not a state actor whose actions are subject to

constitutional scrutiny. See Hallinan v. Fraternal Order of Police of Chi. Lodge No. 7,

570 F.3d 811, 815 (7th Cir. 2009) (citing Nat’l Collegiate Athletic Ass’n v. Tarkanian,

488 U.S. 179, 191 (1988)). The plaintiffs argue that even though the Association is a

private organization, it functions as a state actor because its certifications are a

prerequisite for state licensure. But we have squarely rejected the argument that a

state’s decision to condition a professional license on a certification from a private party

converts the private party into a state actor. Sanjuan, 40 F.3d at 250.

As for Gunawardana’s claim that the Association conspired to violate her right to

equal protection in violation of 42 U.S.C. § 1985(3)—which does not require the

Association to be a state actor—it is a closer question whether the release applies. The

plaintiffs allege that the Association conspires with domestic veterinary schools and a

veterinary hospital system to stop foreign graduates from entering the practice. If

Gunawardana is challenging the existence of a separate certification process for foreign

graduates, it is arguably not covered by the release.

Either way, the plaintiffs do not state a claim under § 1985(3). Their allegations

do not plausibly suggest a conspiracy with the purpose of depriving any person or

group of equal protection. See Xiong v. Wagner, 700 F.3d 282, 297 (7th Cir. 2012).

Graduates of foreign veterinary schools are not a protected class cognizable based on

race or national origin. See Katz‐Crank v. Haskett, 843 F.3d 641, 650 (7th Cir. 2016)

(requiring “racial or class‐based animus” for a § 1985(3) claim). Any graduate of a

foreign veterinary school who seeks licensure in the United States, regardless of

nationality (including U.S. citizens), must go through the more onerous process.

Next, the plaintiffs contend that the court should have allowed Seely—who did

not sign a release—to proceed on an independent claim under the ADA. They argue

that he was forced to travel with Gunawardana and “do all carrying and lifting for her”

when the Association denied her an accommodation for the second attempt at the

practical exam. This, in turn, aggravated his own (unspecified) disabilities. But we agree

with the district court that Seely lacks standing to bring a claim based on the denial of

reasonable accommodation to his wife. Standing under Article III of the Constitution

requires an injury “fairly traceable” to a defendant’s actions. Clapper v. Amnesty Int’l

USA, 568 U.S. 398, 409 (2013). Here, the connection is too attenuated; the Association

No. 21‐1330 Page 6

took no action with respect to Seely, and his choice of what to do to assist his wife is

insufficient to generate standing for a separate claim. See id. at 417–18.

The plaintiffs next argue that the court erred in dismissing their antitrust claims

under sections 1 and 2 of the Sherman Act. 15 U.S.C. §§ 1–2. (These claims are not

covered by the release. Sanjuan, 40 F.3d at 250.) They argue that, as the sole accreditor of

veterinarians, the Association exclusively controls who enters the market and uses this

power to “flood[] the market” with graduates from domestic veterinary schools and to

crowd out the graduates of foreign schools.

To state an antitrust claim, however, the plaintiffs needed to allege that the

Association’s actions injured a relevant market—either through decreased output or

increased prices for consumers. Chi. Studio Rental, Inc. v. Ill. Dep’t of Com., 940 F.3d 971,

978 (7th Cir. 2019). They advance two theories, first, that Gunawardana was pushed out

of the veterinary market. But this type of injury against a producer of services “has

nothing to do with the antitrust laws,” because the plaintiffs do not plausibly link it to

any injury to consumers. Sanjuan, 40 F.3d at 251–52. Second, they assert that they pay

more as purchasers of veterinary services for their pets. Although increased prices can

be an antitrust injury, the thrust of their complaint alleges the opposite—that the

certification process creates a “surplus of veterinarians,” thus increasing competition.

See Chi. Studio Rental, 940 F.3d at 978. That is inconsistent with an antitrust injury.

The plaintiffs also challenge the district court’s denial of their motion for leave to

file a second amended complaint. The court denied the motion on the ground that

granting leave while the Association’s second motion to dismiss was pending, fully

briefed, would be prejudicial. We cannot say the court abused its discretion. After the

Association filed the motion to dismiss the original complaint, the plaintiffs amended

their complaint but did not address the deficiencies the Association had pointed out.

More than two months after the parties had fully briefed the motion to dismiss the

second amended complaint, the plaintiffs again requested a chance to amend. Such “cat

and mouse game[s] of motions to dismiss followed by a motion to amend,” need not be

allowed. Thompson v. Ill. Depʹt of Pro. Regul., 300 F.3d 750, 759 (7th Cir. 2002); see Liebhart

v. SPX Corp., 917 F.3d 952, 965–66 (7th Cir. 2019).

Lastly, the plaintiffs argue that the district court erred by dismissing their

complaint with prejudice instead of with leave to amend. But the district court did not

abuse its discretion. It had already afforded them one chance to amend after the first

motion to dismiss gave them a preview of their complaint’s shortfalls. See Sharif

Pharmacy, Inc. v. Prime Therapeutics, LLC, 950 F.3d 911, 919 (7th Cir. 2020). The pleadings

No. 21‐1330 Page 7

have been tested twice, and we do not require infinite opportunities to amend. Further,

when the plaintiffs asked for leave to amend after responding to the second motion to

dismiss, they did not explain how their proposed second amended complaint addressed

the legal and factual shortfalls of the first. See Gonzalez‐Koeneke v. West, 791 F.3d 801,

808–809 (7th Cir. 2015). On appeal, they still do not explain this. See id. Rather, they

baldly assert that “any conceivable defects in the [first amended complaint] were

rectified in the proposed second amended complaint.”

We have considered plaintiffs’ other arguments, but none has merit.

AFFIRMED