Farrokh Yassan v. J.P. Morgan Chase
2013 U.S. App. LEXIS 4131
| 7th Cir. | 2013Background
- Yassan, an at-will employee of Chase, sued in Illinois state court alleging ADEA discrimination, wrongful discharge, and fraud.
- Chase allegedly induced signing a broad release in exchange for severance; release waived all claims including unknown ones.
- Yassan signed the release after 43 days of consideration; release allowed revocation within seven days, which he did not exercise.
- Yassan later learned another Chase employee was offered his former job, prompting renewed discrimination/retaliation concerns.
- State court dismissed for want of prosecution; removal to federal court occurred the next day, cross-mentioned as potential defect.
- District court dismissed under Rule 12(b)(6) because release barred the claims; appeal followed challenging jurisdiction and merits.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Was removal proper after state dismissal for want of prosecution? | Yassan argues removal violated 28 U.S.C. § 1441(a). | Chase contends removal was proper because federal jurisdiction existed and dismissal was not final. | Removal proper; district court had jurisdiction over the live case. |
| Was the Illinois case still pending and live at removal under Article III? | Case remained pending in Illinois and alive because it could be reinstated and actively contested. | Case could be treated as moot or non-live after dismissal; not properly removable. | Case remained pending and live; jurisdiction intact. |
| Does New York law govern the enforceability of the broad release and bar the ADEA/fraud claims? | Plaintiff contends release should not bar fraud/ADEA claims. | Release is broad and NY law enforces such releases when knowingly made with adequate consideration. | New York law enforces the release; claims barred. |
| Was dismissing under Rule 12(b)(6) appropriate given the release, or should Rule 12(c) have been used as an affirmative defense? | Yassan argues discovery could prove fraud; dismissal under Rule 12(b)(6) was improper. | Dismissal based on release; can be treated as affirmative defense; Rule 12(c) more appropriate. | Dismissal was proper but under Rule 12(c) rather than 12(b)(6). |
| If the release is enforceable, do remaining factors negate relief on the merits? | Fraud/age claims not waived or fully proven by the release terms. | Release covers all known and unknown claims; cannot circumvent via fraud claim. | All claims fail due to release and consideration; district court’s merits affirmed. |
Key Cases Cited
- Nycal Corp. v. Inoco PLC, 166 F.3d 1201 (2d Cir. 1998) (fraudulent disclosure not required to revisit settlement)
- Carey v. Saffold, 536 U.S. 214 (U.S. 2002) (pending means not yet decided; final resolution required)
- United States v. Rollins, 607 F.3d 500 (7th Cir. 2010) (pending in district court until matter concluded)
- Bejda v. SGL Indus., Inc., 412 N.E.2d 464 (Ill. 1980) (Illinois inherent authority to dismiss for want of prosecution)
- S.C. Vaughan Oil Co. v. Caldwell, Troutt & Alexander, 693 N.E.2d 338 (Ill. 1998) (look to savings statute for dismissal w/o finality under §5/13-217)
- Mangini v. McClurg, 249 N.E.2d 386 (N.Y. 1969) (general release enforces unknown claims when intended and fairly made)
- Centro Empresarial Cempresa S.A. v. American Movil, S.A.B. de C.V., 952 N.E.2d 995 (N.Y. 2011) (releases may include unknown fraud claims if intended and fair)