Coleman v. Labor & Industry Review Commission

POSNER, Circuit Judge,

dissenting.

The plaintiff, proceeding pro se and seeking in forma pauperis status (that is, seeking permission to commence a civil suit without prepaying the court’s filing fee), filed suit against a Wisconsin agency complaining of racial discrimination in employment, and consented to a magistrate judge’s exercising jurisdiction over the suit. When a plaintiff who is not a prisoner (and the plaintiff in this case is not) seeks in forma pauperis status, normally the district judge or magistrate judge assigned to the case will conduct an initial screening of the complaint to determine whether the plaintiff really is too poor to pay the fees, or whether, though he is, his suit is frivolous, malicious, fails to state a claim, or seeks monetary relief against an immune defendant. 28 U.S.C. § 1915 (e)(2). The plaintiff in this case did not serve the defendant before the initial screening, consistent with the guidance document of the Eastern District of Wisconsin for pro se litigants which advises that serving the defendant is the next step after screening.

*476 The defendant, whether or not aware of the suit (as it may have been despite not being served), did not express consent to a magistrate judge’s exercising jurisdiction over it. But because the plaintiff had consented to a magistrate judge’s handling the case, that judge screened the complaint, and concluding from the screening that it failed to state a claim entered final judgment in favor of the defendant, dismissing the suit.

The plaintiff appeals on the ground that 28 U.S.C. § 636 (c)(1) requires “consent of the parties” for the entry of a final judgment by a magistrate judge, and in this case only one party—the plaintiff—consented. Agreeing with the plaintiff that “consent of the parties” means consent by both plaintiff and defendant, the majority opinion orders the judgment entered by the magistrate judge vacated on the ground, that because the statute uses the singular “party” in other contexts, the plural “parties” must refer to all the parties to a case and therefore a magistrate judge can’t enter a final judgment of dismissal unless the defendant consents—consents explicitly, even to a judgment in its favor. Yet in such a case, which is this case, the defendant’s consent can of course be presumed, the magistrate judge having thrown out the case against it, as the judge was entitled to do because the plaintiff had consented to his adjudicating the case.

The majority opinion bases its insistence that the defendant’s consent to dismissal of the case must to be effective be explicit on concern that a “constitutional problem ... would arise” if the consent of the plaintiff alone were sufficient for a magistrate judge to screen a complaint. The “constitutional problem” alleged is that if the statute required only implicit consent by the defendant this would violate the provision in Article III, section 1 of the Constitution that “the judicial Power of the United States, shall be vested in one supreme Court, and in such inferior Courts as the Congress may from time to time ordain and establish,” with the “Courts” to be composed of judges who “shall hold their offices during good behaviour” and receive salaries that may not be diminished. Magistrate judges are not such judges—that is, are not Article III judges.

Yet we know that litigants may consent to adjudication by a magistrate judge and that such consent need not be express. Wellness Int’l Network Ltd. v. Sharif, — U.S. -, 135 S.Ct. 1932, 1947-48 , 191 L.Ed.2d 911 (2015); Roell v. Withrow, 538 U.S. 580, 586-91 , 123 S.Ct. 1696 , 155 L.Ed.2d 775 (2003). The plaintiff in this case consented to adjudication by a magistrate judge—expressly—and the defendant consented implicitly, because the adjudication ended the litigation against the defendant, leaving no possible reason for the defendant to try to revive the litigation. Whoever heard of a defendant saying to a district judge or magistrate judge “I know you’ve dismissed the plaintiffs case against me, but would you please reinstate it so that I can file a statement agreeing to the dismissal?”

A bigger waste of time than sending this case back to the district court is thus hard to imagine, as well as creating tension with the Supreme Court’s rulings in the Wellness and Roell cases, cited above, that a defendant’s consent to a magistrate judge’s adjudication of a suit against him need not be express. To repeat, the defendant’s consent to the magistrate judge’s exercise of jurisdiction in this case up to and concluding final judgment can be taken for granted because the defendant has no interest in having the case continue and could therefore have no quarrel with the magistrate judge’s dismissing it, at least where as in this case the dismissal was a final judgment, precluding a refiling of the *477 complaint. At this stage of the litigation, the best outcome for the defendant is for the case simply to be dismissed, and the worst outcome would be to allow the case to proceed.

Yet since the majority insists on a remand, though with no justification that I can see, we can expect that on remand the magistrate judge will reissue his order, retitled as a “proposed order,” and a district judge will sign off on it and the plaintiff will again appeal—placing the case again before us with nothing for us to do but affirm. Such a waste of time can be avoided—without any negative consequences for anyone—simply by interpreting the requirement in 28 U.S.C. § 636 (c)(1) of “consent of the parties” as satisfied by the plaintiffs consenting to a magistrate judge’s exercising jurisdiction at the screening stage and the defendant’s not objecting, in which event the defendant’s consent to the procedure can be presumed at least when, as in this case, the suit is dismissed; for that outcome will delight the defendant.

If the suit is not dismissed but instead allowed to proceed, the defendant will be served and have an opportunity to defend. Cf. Hains v. Washington, 131 F.3d 1248 , 1249 and n. 2 (7th Cir. 1997) (per curiam). If the defendant doesn’t consent explicitly or implicitly to a magistrate judge’s adjudicating the case, the “consent of the parties,” explicit or implicit, to such adjudication will not have been obtained and the case will proceed in the ordinary way, with any final decision in the district court being made by a district judge (or a jury) rather than by a magistrate judge.

The majority opinion argues that our Hains decision, cited above as authority for the approach I’m advocating, can’t be reconciled with an earlier decision of our court, Geaney v. Carlson, 776 F.2d 140 (7th Cir. 1985), which according to the majority opinion in this case held that a magistrate judge could enter a final judgment dismissing a case only if both parties consented. But unlike the present case, Geaney did not involve initial screening and does not say that the defendant’s consent to a magistrate judge’s dismissal of a suit against him during an initial screening can never be presumed—and in a case such as this the presumption is inescapable. For why, to return to what seems to me the only sensible interpretation of the consent requirement, would a defendant ever refuse to consent to the dismissal of a suit against him?

In summary we should affirm, not order a futile remand.

Easterbrook, Circuit Judge, with whom Sykes, Circuit Judge, joins, dissenting from the denial of rehearing en banc. I agree with the panel that Hains v. Washington, 131 F.3d 1248 , 1249 & n.2 (7th Cir. 1997), conflicts with Geaney v. Carlson, 776 F.2d 140, 142 (7th Cir. 1985), and that one or the other must be overruled. The panel overrules Hains , but I think that Geaney should be the one to go. We should align ourselves with Neals v. Norwood, 59 F.3d 530, 532 (5th Cir. 1995), which holds that an un-served defendant is not among the “parties” for the purpose of 28 U.S.C. § 636 (c), rather than Henry v. Tri-Services, Inc., 33 F.3d 931, 933 (8th Cir. 1994), which holds the opposite.

As the panel sees matters, “parties” in § 636(c) means all persons named in the complaint. That’s linguistically possible, though § 636(c) works just fine if “parties” means “every party bound by the judgment” rather than “every party named in the complaint.” I distinguish between persons bound by a judgment (in the sense that the person can be saddled with an adverse decision) and everyone named in a complaint. Un-served defendants cannot be adversely affected by a judgment. Mc *478 Donald v. Mabee, 243 U.S. 90, 92 , 37 S.Ct. 343 , 61 L.Ed. 608 (1917).

The panel opens with a reminder that magistrate judges lack the tenure and salary protections of Article III (op. 465-66) and later uses this as a doubt resolver (op. 473-74). Article III means that only litigants who consent to decision by an Article I officer (or for that matter a private arbitrator) can be denied the benefits of an Article III judge. But Coleman did so consent, and he is the only person adversely affected by the outcome. See Omni Capital International, Ltd. v. Rudolf Wolff & Co., 484 U.S. 97, 104 , 108 S.Ct. 404 , 98 L.Ed.2d 415 (1987). There’s no constitutional problem with binding consenting plaintiffs to adverse decisions by magistrate judges. Article III does not place a thumb on the scale against the possibility that “parties” in § 636(c) means “all litigants bound by an adverse judgment.”

A different principle does create a helpful presumption: the principle that someone named as a defendant does not become a party until served with process. See Murphy Brothers, Inc. v. Michetti Pipe Stringing, Inc., 526 U.S. 344, 350 , 119 S.Ct. 1322 , 143 L.Ed.2d 448 (1999). Murphy Brothers arose from a statute providing that “defendants” have only 30 days to remove cases filed in state court. 28 U.S.C. § 1446 (b). That statute starts the time from each defendant’s receipt of a copy of the complaint “through service or otherwise”. One defendant got a faxed copy and did not remove within 30 days of its receipt. The Justices concluded that this did not matter because only parties have duties in the litigation, and one does not become a party until served with process. This approach—that the number of parties grows as defendants are served—is incompatible with the panel’s approach to § 636(c), under which the number and identity of “parties” is fixed the moment the complaint is lodged in the district court.

By the standard of Murphy Brothers, there was only one “party” when the magistrate judge dismissed Coleman’s complaint. He consented under § 636(c). It follows that the magistrate judge’s decision was authorized by statute.

The panel’s majority replies that Murphy Brothers interprets § 1446(b) rather than § 636(c) and therefore does not compel us to read the latter statute any particular way. That’s true enough. Yet Murphy Brothers did not suggest that its understanding of the role of service in making a defendant a party depended on anything peculiar to § 1446(b). Other circuits apply Murphy Brothers beyond § 1446(b). For example, they have held that un-served defendants are not parties for purposes of Fed. R. Civ. P. 54(b), and, by extension, 28 U.S.C. § 1291 . See Cambridge Holdings Group, Inc. v. Federal Insurance Co., 489 F.3d 1356 , 1361 & n.1 (D.C. Cir. 2007) (collecting cases). The panel brushes these decisions aside on the ground that they, too, do not concern § 636(c), but this treats Murphy Brothers as a sport rather than as the instantiation of a principle. Murphy Brothers reads like a principle applicable to federal civil procedure, not like dogma good for one statute only.

For the same reason I find the majority’s opinion unpersuasive, I do not adopt the dissent’s view. It is not sound to say that un-served defendants have consented—implicitly, constructively, or in any other way. Decision by a magistrate judge depends on consent. That consent may be inferred from action (such as litigating before a magistrate judge without protest) but must be real, and treating non-action of non-parties as consent dispenses with the need for consent of any kind. It is the sort of make-believe that gives the phrase “legal fiction” its bad odor.

*479 Language in both the majority and the dissent suggests that this appeal is about whether magistrate judges can dismiss prisoners’ complaints under § 1915(e) before defendants have been served. It is indeed about that, but the decision has broader scope. The panel holds that a magistrate judge cannot preside unless all defendants named in the complaint, plus all plaintiffs, have consented in writing.

Suits may linger in a district court with one or more defendants un-served—in-deed, with one or more defendants identified only by pseudonym (for example, a police officer who is said to have used excessive force in making an arrest). Sometimes a defendant’s identity is known but he can’t be found to be served. For example, prisons don’t want to reveal the current addresses of former guards, and defendants who reside abroad can be especially hard to serve.

The suit A v. B & C could go on for years before C is finally dismissed or discovered to be nonexistent; why can’t A and B agree in the meantime that their dispute will be resolved by a magistrate judge? It would be weird if, after final decision, either A or B could have the judgment upset on appeal—despite having consented under § 636(c)—just because C was never found or served. There’s no constitutional impediment to consent by A and B; both waived their right to an Article III judge. But under the majority’s approach every suit with an un-served or unknown defendant must be handled by a district judge even if all of the real litigants prefer a magistrate judge. That is not sound judicial administration. Murphy Brothers offers a way to solve this problem.

The panel’s majority dismisses these possibilities (op. 471) by suggesting that “parties” in § 636(c) may mean only the plaintiff plus at least one defendant. That comes out of the blue. The bulk of the majority’s Part II.C is devoted to contending that “parties” means everyone named in a complaint. That is a plausible (though I think incorrect) reading. But the word “parties” cannot possibly mean “plaintiffs plus one defendant, but not other defendants.” That ad hoc treatment is disconnected from the opinion’s rationale.

If “parties” means “all named litigants,” then problematic examples in multi-party suits are legion. (1) C moves to dismiss for lack of personal jurisdiction, and a district judge grants that motion; A and B then consent to decision by a magistrate judge. (2) C moves to dismiss under Fed. R. Civ. P. 12(c) because of a person-specific defense such as release, and a district judge grants that motion; A and B then consent to decision by a magistrate judge. (3) Same as example (2) except that C moves to dismiss for improper joinder, because A v. C has nothing to do with A’s claim against B, and a district judge grants that motion; A and B then consent to decision by a magistrate judge. The panel’s decision means that all of these consents by A and B are invalid, because C, having been named in the complaint, is a “party” who did not consent. Yet I cannot see why A and B should be forbidden to advance their own interests by consenting to decision by a magistrate judge, who may be able to give the case immediate attention that a district judge cannot provide.

By using these examples I do not suggest that practical concerns justify overriding statutory text. But nothing in the text of § 636(c) implies.a departure from the principle of Murphy Brothers, under which “party” status depends on service. And we know from Devlin v. Scardelletti, 536 U.S. 1 , 122 S.Ct. 2005 , 153 L.Ed.2d 27 (2002), that people can be “parties” for some purposes while they aren’t for others. So the fact that defendants are parties for the purpose of filling the blanks in a *480 summons (which the panel discusses at op. 473) does, not tell us that they are parties under § 636(c) too.

All statutory language must be read against background norms. One norm is that ambiguous statutes should not be understood to create mischief—losses to some litigants with no offsetting gains to others (or to society as a whole). Depriving litigants of their preferred forum produces losses with no offsetting gains. Murphy Brothers provides another norm. When read in light of those norms, § 636(c) requires no more than the consent of the party or parties who will be bound by an adverse judgment.