Tuesday, March 13, 2018

Seventh Circuit Summarily Affirms District Court and Imposes Sanctions for Filing an Improper Appendix and a Frivolous Appeal

By Kimberly Glasford
Law Clerk to Hon. Terrence J. Lavin, Illinois Appellate Court, First District

In Jaworski v. Master Hand Contractors, Inc., No. 16-3601 (7th Cir. Feb. 15, 2018), several plaintiffs filed an action against several defendant contractors for unpaid services. The district court found the defendants failed to pay their workers and the United States Court of Appeals for the Seventh Circuit found the defendants failed to fulfill their obligations to the court.

The district court in Jaworski entered a partial summary judgment, finding the defendants violated the Employee Classification Act (the ECA) (820 ILCS 185/1 et seq.) by misclassifying the plaintiffs as independent contractors. The court also found that damages under the ECA included the compensation guaranteed by the Illinois Minimum Wage Law (820 ILCS 105/1 et seq.) and the Illinois Wage Payment and Collection Act (820 ILCS 115/1 et seq.), notwithstanding that the burdens of proof under those laws differed.

Following a bench trial, the court also found the defendants violated the two Illinois wage statutes as well as the Fair Labor Standards Act (29 USC § 201 et seq.). The defendants appealed.

First, the Seventh Circuit found that the defendants failed to comply with Circuit Rule 30 (Cir. R. 30), which requires that an appellant append to its opening brief the judgment under review, the pertinent factual findings, the relevant legal conclusions, and any other opinions or orders involved in the issues raised on appeal. Rule 30 also requires an appellant to certify that it has complied with the rule’s requirements. Cir. R. 30(d). The Seventh Circuit further observed that the failure to meticulously comply with this unambiguous rule might result in sanctions.

The Seventh Circuit observed that the defendants challenged the district court’s posttrial judgment but did not provide that court’s factual findings and legal conclusions. The defendants also failed to provide orders being challenged on appeal.

Moreover, the defendants falsely certified that they had appended all of the district court rulings necessary to decide the appeal. The Seventh Circuit noted that the defendants had not explained why they tendered a false certification. The court also recognized, however, that the clerk’s office would not accept a brief that lacked a Rule 30 certification. Consequently, the reviewing court summarily affirmed the district court’s judgment.

The Seventh Circuit also granted the plaintiffs’ motion for sanctions under Rule 38 of the Federal Rules of Appellate Procedure (Fed. R. App. P. 38), agreeing that the defendants’ appeal was frivolous.

That rule states: “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 appellee.” Id. The defendants in Jaworski never responded to the sanctions motion.

The Seventh Circuit found that, while the defendants argued the record contained several examples of activities showing the plaintiffs were not employees, the defendants did not actually identify any examples. The defendants also failed to address two of the ECA’s three requirements for an employer to show a claimant is not an employee.

The defendants similarly failed to support their conclusion that the district court erred by finding that ECA claimants did not have the burden of proving their status as employees to be compensated under the Illinois wage acts. Nor did the defendants address the district court’s reasons for finding otherwise. In any event, that court had also found the claimants demonstrated independent violations of the Illinois wage acts. Finally, the Seventh Circuit found it was frivolous to assert that the defendants’ insolvency discharged their obligations to the plaintiffs under the ECA.

In light of the foregoing, the Seventh Circuit ordered the defendants to pay the plaintiffs’ costs and attorney fees in pursuing the appeal.

Several tips can be found in Jaworski. Don’t certify compliance with Rule 30 just to get past the clerk’s office. If the appellee moves for Rule 38 sanctions, respond. Last but not least, it’s better to forgo an appeal than risk sanctions for filing a frivolous one.

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