New W., L.P. v. City of Joliet
891 F.3d 271
| 7th Cir. | 2018Background
- New West sued the City of Joliet in 2005 alleging interference with rent-setting under HUD’s mark-to-market program and violations of the Fair Housing Act and related federal statutes.
- In 2005 Joliet filed a state-court eminent-domain action to acquire and demolish Evergreen Terrace; New West removed that action to federal court and HUD intervened; this produced multiple appeals to the Seventh Circuit over several years.
- The Seventh Circuit earlier held (1) New West, not its tenants, owned the FHA-related claims, (2) federal financing does not bar state eminent-domain power, and (3) a later bench trial and jury award upheld the taking and fixed just compensation.
- At the lengthy condemnation trial New West litigated its FHA theories as defenses in the eminent-domain action; the district court resolved those defenses in a bench ruling and denied New West’s FHA claims.
- The district court then dismissed New West’s separate suit on collateral-estoppel grounds based on the condemnation judgment; New West appealed claiming Dairy Queen/Beacon required a jury trial regardless of preclusion.
- The Seventh Circuit affirmed, holding New West invited the bench resolution of the FHA issues and that Parklane controls, allowing preclusive effect from a prior bench trial where issues were actually litigated.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether New West’s Seventh Amendment right to a jury was violated when a bench trial on condemnation precluded later jury adjudication of FHA claims | Dairy Queen and Beacon require a jury trial on the FHA issues despite preclusion from the earlier bench decision | Parklane allows issue preclusion from a prior bench trial; no constitutional bar when issues were litigated earlier | Denied — Parklane controls; no constitutional prohibition on giving preclusive effect to earlier bench judgments |
| Whether Parklane applies when both matters were in federal court before the same judge (coordinated cases) | Judge should have stayed condemnation to allow jury trial on FHA claims because both suits were in same court | The court had directed condemnation proceed first; New West chose to litigate FHA as defenses in condemnation; coordination does not change Parklane’s rule | Denied — the fact cases were in same forum doesn’t create a constitutional right to reorder trials; New West’s choice led to bench resolution |
| Whether New West waived right to jury by litigating FHA issues as defenses in condemnation | New West argued it preserved jury rights and feared forfeiture if not raised in condemnation | Joliet argued New West elected to try FHA issues in condemnation; Joliet waived any argument that FHA had to be a defense because it objected and litigated the issues | Held New West is responsible for electing to litigate FHA issues in condemnation; it cannot now complain that the bench resolved them |
Key Cases Cited
- Dairy Queen, Inc. v. Wood, 369 U.S. 469 (1962) (discusses sequencing of jury and bench issues)
- Beacon Theatres, Inc. v. Westover, 359 U.S. 500 (1959) (addresses right to jury trial when factual issues are common to legal claims)
- Parklane Hosiery Co. v. Shore, 439 U.S. 322 (1979) (permits offensive nonmutual issue preclusion and holds sequencing decisions are discretionary, not constitutional)
- New West, L.P. v. City of Joliet, 491 F.3d 717 (7th Cir. 2007) (ownership of FHA-related claims)
- City of Joliet v. New West, L.P., 562 F.3d 830 (7th Cir. 2009) (federal financing does not block eminent-domain)
- New West, L.P. v. City of Joliet, 825 F.3d 827 (7th Cir. 2016) (affirming condemnation judgment and rejecting FHA violation)