text:
    UNITED STATES of America, Plaintiff-Appellee, v. Rashid MINHAS, Defendant-Appellant.
    Nos. 15-3761 & 15-3763
    United States Court of Appeals, Seventh Circuit.
    Argued October 27, 2016
    Decided March 10, 2017

      Debra Riggs Bonamici, Attorney, Office of the United States Attorney, Chicago, IL, for Plaintiff-Appellee.
    Joshua T. Buchman, Krista Marie Pikus, Attorneys, McDermott, Will & Emery, Chicago, IL, for Defendant-Appellant.
    Before WOOD, Chief Judge, and BAUER and MANION, Circuit Judges.
   WOOD, Chief Judge.

Rashid Minhas used the Chicago-based travel agencies he operated to swindle customers and airlines out of hundreds of thousands of dollars. Minhas was convicted of wire and mail fraud in violation of 18 U.S.C. §§ 1341 and 1343 in two separate cases: one that proceeded to a bench trial in February 2014, and one in which Min-has pleaded guilty in 2015. At a consolidated sentencing hearing, the district court imposed two partially concurrent prison terms totaling 114 months. On appeal from the two judgments, Minhas challenges the district court’s application of the Sentencing Guidelines’ enhancement for causing “substantial financial hardship” to the two sets of - victims. U.S.S.G. § 2Bl.l(b)(2). Though we have seen stronger evidence, we are not convinced that the district court committed clear error in its assessment of the record, and so we affirm its judgment.

I

The first case (the “City Travel case”) arose from Minhas’s operation of City Travel & Tours. In 2008 and 2009, Minhas defrauded customers of City Travel and airlines through a scheme in which he collected payment for airline reservations that he canceled without his customers’ knowledge. By manipulating the two-tiered online ticket-reservation system, Minhas was able to make reservations for customers paying by cash or check, print paper tickets and itineraries, and then cancel the reservations prior to the airlines’ receipt of payment for the tickets. Because the customers had paper tickets in hand, many were not aware the tickets were void until they arrived at the airport. In some instances, customers were forced to purchase last-minute replacement tickets or forego their travel. In others, the airlines allowed the customers to travel on the voided tickets and received no compensation. All told, approximately 372 customers lost money through the City Travel scheme: five lost more than $7,000 apiece, 14 lost over $5,000, and 172 lost more than $1,000.

Minhas was charged in an indictment in case 13 OR 919 with seven counts of wire and mail fraud for the City Travel scheme. Undeterred by these charges, he swindled at least 50 additional customers while he was on pretrial release; this time, he used another of his travel agencies, Lightstar Hajj. Lightstar Hajj held itself out as specializing in travel packages to Saudi Arabia for the hajj (an Islamic pilgrimage to Mecca). In fact, it could not sell a complete package, because it lacked the ability to provide the necessary visas. Minhas sold over 50 of these fraudulent travel packages, for which he faced mail fraud charges in case 14 CR 731. About 54 victims lost money through the Lightstar Hajj scheme: 18 customers each lost over $10,000, 30 lost more than $7,000, and 45 lost more than $5,000. As we noted earlier, he was eventually convicted on all counts in the City Travel case, and he pleaded guilty to one count in the Lightstar Hajj case.

When the time came for sentencing, the two cases were consolidated before Judge Feinerman. The probation office prepared a total of five pre-sentencing reports: one in each of the two cases prior to their consolidation, and three supplemental reports thereafter. The district court held a sentencing hearing, at which it heard testimony from five victims: one from the City Travel case, two from Lightstar Hajj, and two from an uncharged fraud scheme. (Ten victims of the City Travel case had testified at trial.) The government also presented charts listing the victims and their loss amounts. Ten victims of the Lightstar Hajj case submitted impact letters to the district court.

A key topic at the hearing was whether to apply the Guidelines enhancement for causing “substantial financial harm” to victims — a provision' that had gone into effect earlier that month. U.S.S.G. § 2Bl.l(b)(2). The court noted that it was focusing on the victims’ financial losses in both cases as losses to a savings or investment fund, a factor Application Note 4(F)(iii) to the Guidelines directs courts to consider.

In the City Travel case, the district judge agreed with Minhas that the term “substantial” was relative to a victim. It reasoned that dollar losses in the mid-four figures would represent a substantial loss to a person of modest economic circumstances. It then inferred that Minhas’s victims fit this economic profile: they were “working” people “of modest means” who were “not rich.” In characterizing the victims this way, the district court explained that it was extrapolating from the evidence before it (ie., the testimony at trial and sentencing and from victim impact letters) and applying those characteristics to the group. The court then looked to a chart displaying the dollar losses for each victim and found at least 16 losses over $3000. Noting that it believed that losses below $2000 could still be substantial, as this was “a lot of money for a working person,” the court “err[ed] on the side of caution” and excluded from its tally victims who lost less than $2000. It ultimately applied the § 2Bl.l(b)(2)(B) four-level increase in the in the City Travel case, finding that between five and 25 victims suffered a substantial financial hardship as a result of Minhas’s fraud.

Similarly, in the Lightstar Hajj case, the district court relied on victim-impact letters and sentencing testimony to generalize about the group of victims, finding that they tended to save for years, that many were not able to make the Hajj because of Minhas’s fraud, and that it could also take years to recover the amounts of money they lost. The court then consulted the loss chart and counted at least 32 victims with dollar losses above the mid-four figures. It applied a six-level enhancement pursuant to § 2B1.1(b)(2)(C), finding that the fraud resulted in substantial financial hardship to more than 25 victims.

II

Minhas argues that the district court incorrectly applied the § 2Bl.l(b)(2) enhancement in both cases by relying on insufficient evidence, extrapolating from the evidence it did have, and aggregating the victims’ economic characteristics. Min-has contends that in order to apply the enhancement, the district court should have made individualized determinations and identified the factual basis underlying the finding of substantial financial hardship to each victim. Because Minhas objected to the enhancement in each case at sentencing, we review for clear error the district court’s factual determinations, and we consider de novo the appropriateness of the enhancement. United States v. Harris, 791 F.3d 772, 780 (7th Cir. 2015).

The Sentencing Guidelines provide for increased offense levels for crimes such as fraud that “result[ ] in substantial financial hardship” to victims. § 2B1.1(b)(2)(A)-(C). In addition to the text of the Guidelines, a court must also consider the Application Notes, which “are considered part of the Guidelines and not mere commentary on them.” United States v. Rogers, 777 F.3d 934, 936 (7th Cir. 2015). Application Note 4 specifies that when determining whether an offense resulted in substantial financial hardship, a court “shall consider, among other factors,” whether as the result of an offense a victim became insolvent; filed for bankruptcy; suffered a substantial loss of a retirement, education, or other savings or investment fund; made substantial changes to employment or living arrangements; or suffered substantial harm to the ability to obtain credit. § 2B1.1 cmt. n.4.

The enhancement for causing “substantial financial hardship” came into effect on November 1, 2015, as a result of amendments designed to “place greater emphasis on the extent of harm that particular victims suffer as a result of the offense.” Sentencing Guidelines for United States Courts, 80 FR 25782-01 (May 5, 2015). Previously, § 2B1.1(b)(2) had provided for an enhancement for offenses that involved total numbers of victims over certain thresholds, or that were committed by the use of mass marketing, but it did not include any provision for whether the offense caused victims substantial financial hardship. See U.S.S.G. § 2B1.1(b)(2) (Nov. 2014). The effect of the 2015 amendment is to require the district courts, when they apply § 2Bl.l(b)(2), to go beyond simply tallying the total number of victims (or deciding whether mass marketing was used), and to evaluate the substantiality of the financial hardship those victims suffered.

Because the amendments are relatively new, we have not yet had occasion to weigh in on the district courts’ interpretation and application of the “substantial financial hardship” provision. The 2015 amendment to § 2Bl.l(b)(2) introduces a measure of relativity into the inquiry. That is, whether a loss has resulted in a substantial hardship (or substantial loss to a savings account as in this case) will, in most cases, be gauged relative to each victim. The same dollar harm to one victim may result in a substantial financial hardship, while for another it may be only a minor hiccup. Much of this will turn on a victim’s financial circumstances, as the district court recognized when it noted that “[a] loss that may not be substantial to Bill Gates may be substantial to a working person.”

We recognize that reasonable people may disagree about the substantiality of a loss in a particular instance. The inclusion of the word “substantial” implies that the loss or hardship must be significant, meaning at least more than minimal or trivial. But between a minimal loss or hardship (occurring, perhaps, when a defendant fraudulently obtains five dollars a victim had intended to donate to a charity), and a devastating loss (occurring in the wake of a scheme to wipe out a victim’s life savings), there lies a wide range in which we rely upon the judgment of the district courts, guided by the non-exhaustive list of factors in Application Note 4. In the end, this is just one more determination of a fact that bears on the ultimate sentence; that determination is entitled to the normal deference that applies to all facts found at sentencing. See, e.g., United States v. Parolin, 239 F.3d 922, 926 (7th Cir. 2001) (“Determining whether a defendant’s victims were ‘unusually vulnerable’ is a question of fact that is reversible only for clear error.”).

Minhas urges that the district court committed clear error when it chose to consider the victims as a group rather than individually. In some instances, that would indeed pose a problem. It would be clear error for a district judge, for example, merely to divide a total loss amount by the number of victims without any information about the amount each individual victim suffered or the victim’s financial circumstances. But that is not what happened here. This district judge carefully consulted a chart that listed each victim’s individual losses. Inferring that each person was of modest economic circumstances, the judge then reasoned that losses above a certain threshold to each one were substantial.

A district court may draw reasonable inferences from the record. United States v. Melendez, 819 F.3d 1006, 1011 (7th Cir. 2016). Making an inference about an individual victim by virtue of his membership in a particular group is not necessarily problematic, so long as a district court has reason to believe that the victims are in similar economic circumstances. The question here is thus whether the court had sufficient evidence from which to infer that the victims were in similar economic positions.

In making its factual findings, a district court may draw conclusions from the testimony and evidence introduced at sentencing. United States v. Holliday, 672 F.3d 462, 475 (7th Cir. 2012). In the City Travel case, the district court indicated that he was doing just that, as he considered the evidence about Minhas’s customer base. That evidence revealed that they were not rich and that they were looking for discounted tickets in a Pakistani-American newspaper. The court also indicated in the City Travel case that he was relying on the testimony of victims at sentencing and at trial, and on the submitted victim impact statements. These people reported saving for long times for their trips. In the Lightstar Hajj case, the court indicated it was relying on evidence from impact statements and testimony that victims had saved for long periods to go on the hajj, or that they had spent their life savings to do so.

While Minhas notes that much of the testimony was “conclusory” and lacked “verifiable facts,” the evidentiary standards at sentencing are more relaxed than at trial, United States v. Harmon, 721 F.3d 877, 888 (7th Cir. 2013), and the district court is entitled to make credibility determinations about the witnesses and testimony presented. United States v. Smith, 308 F.3d 726, 746 (7th Cir. 2002). “[W]e require only that the information considered has sufficient indicia of reliability to support its probable accuracy.” United States v. Statham, 581 F.3d 548, 553 (7th Cir. 2009).

In addition to numerous victims who testified about the amounts of time that it took them to save enough money for their trip, another victim who testified at sentencing indicated that he and others were from the samé neighborhood, and that Minhas “took money from the poor people, hard-working people like [the victim].” The district court was familiar with victims who testified at trial and knew that Minhas’s schemes tended to target those looking for discounted travel. And while looking for discounted travel alone does not imply that a person is not rich, it is at least some evidence that he or she is not so wealthy as to be purchasing luxury airfare or travel packages. One can imagine stronger evidence showing that the victims shared similar economic circumstances. But that does not mean that the district court erred by relying on what was in front of it when it concluded that it was more likely than not that the necessary number of victims in each case suffered a substantial financial hardship.

It is also worth noting that the district court understood that, at least in the Lightstar Hajj case, the harm was not just the loss of money, but was also a spiritual injury inflicted when it became impossible for the victim to make the hajj. The hajj is an annual pilgrimage to Islam’s holiest site, Mecca, and making it is a religious duty to be performed at least once in a lifetime by every able-bodied Muslim who can afford the trip. See The Religion of Islam, The Fifth Pillar of Islam: The Pilgrimage (Hajj), at https://www.islam reIigion.com/articles/184/fifth-pillar-of-islam/ (last visited Mar. 10, 2017); see also Diaa Hadid, What Muslims Do on Hajj, and Why, The New York Times (Sep. 8, 2016), https://www.nytimes.com/2016/09/09/ world/middleeast/hajj-muslim-pilgrimage-mecea.html. (Those who have made the pilgrimage are often given the title “Hajji”, a term of respect.) While being deprived of this opportunity (for a year at the very least) may not constitute a financial loss in the traditional sense of losing dollars from a bank account, it is a significant alteration in life circumstances, as are many of the factors pertinent to interpreting “substantial financial hardship” that can be found in a non-exhaustive list in Application Note 4(F), such as making changes to employment or retirement plans or altering one’s housing situation. The existence of this loss reinforces the district court’s ultimate choice of sentence.

Minhas further, argues that the district court ought to have identified which of the particular victims it was including in its calculation, rather than concluding that at least a certain number of those on the list met the threshold. While listing each individual victim he was including to meet each threshold would have been helpful, it is not an end in itself. We look at the record as a whole, and in this case it is adequate.

We are bolstered in our decision to affirm Minhas’s sentence because we are convinced that any error that may have crept into the sentencing proceeding was harmless. Though a district court must seriously consider and carefully apply the Sentencing Guidelines, they are, in the end, only guidelines; sentencing is the responsibility of the district judge after careful consideration of the § 3553(a) factors. United States v. Lopez, 634 F.3d 948, 953-54 (7th Cir. 2011). Procedural errors do not warrant remand when we are convinced that returning the case to the district court would result in the same sentence. United States v. Abbas, 560 F.3d 660, 667 (7th Cir. 2009). We acknowledge that “[a] finding of harmless error is only appropriate when the government has proved that the district court’s sentencing error did not affect the defendant’s substantial rights (here — liberty).” Id. Nonetheless, “[a]n error in calculating the' Guideline range can still be harmless where the district judge makes clear that the sentence would have been the same absent the error.” United States v. Tate, 822 F.3d 370, 377 (7th Cir. 2016). We have suggested that when a district court faces a “tricky but technical issue” under the Guidelines, it should exercise its discretion under § 3553(a) and United States v. Booker, 543 U.S. 220, 125 S.Ct. 738, 160 L.Ed.2d 621 (2005) and spell out whether the resolution of the guideline issue matters or affects the final decision on the sentence. Lopez, 634 F.3d at 954.

The district court was aware that it could let the parties and the reviewing court know whether it would have given Minhas the same sentence if it had agreed with him on the guidelines issue. While the judge’s initial statement was somewhat inconclusive — he began by stating “I can’t say that I would have imposed the same 9-1/2 year sentence ...” (emphasis added)— he then discussed the seriousness of the offense and aggravating factors. He noted that he “would have imposed sentences at the upper end of those Guideline ranges [proposed by Minhas]” and that he “would have made less of [the sentence] concurrent and more of it consecutive.” This suggests to us that perhaps the judge simply misspoke when he said “can’t” instead of “can.”

In any event, the court finally concluded, “[t]his is a serious crime, and as I said, taking into account everything and even putting aside the technical calculation of the Guidelines range, I don’t think anything less than 9-1/2 years would be sufficient to fulfill the purposes of 3553(a).” This is a firm statement that after all was said and done, the court thought that a 9-1/2 year sentence was the correct one for Minhas. That is what the court ordered, and any error buried in the weeds of the Guidelines was thus harmless.

The judgments of the district court are Affirmed.


source: Caselaw Access Project

author: HAMILTON, Circuit Judge. POSNER, Circuit Judge,

license: Public Domain

text:
    NORTHERN ILLINOIS TELECOM, INC., Plaintiff, and Robert G. Riffner, Respondent-Appellant, v. PNC BANK, N.A., Defendant-Appellee.
    No. 15-2142
    United States Court of Appeals, Seventh Circuit.
    Argued January 18, 2017
    Decided March 10, 2017

      John M. Driscoll, Attorney, John M. Driscoll, P.C., Robert Glen Riffner, Attorney, Riffner Firm, P.C., Schaumburg, IL, for Appellant.
    James M. Crowley, Attorney, Crowley & Lamb, P.C., Chicago, IL, for Defendant-Appellee.
    Before WOOD, Chief Judge, and POSNER and HAMILTON, Circuit Judges.
   HAMILTON, Circuit Judge.

This appeal pivots on the procedural requirements of Federal Rule of Civil Procedure 11 for seeking sanctions against a party and its attorney for asserting a frivolous claim or defense. Rule 11(c)(2) requires a party seeking Rule 11 sanctions first to serve a proposed motion on the opposing party and to give that party at least 21 days to withdraw or. correct the offending matter. Only after that time has passed may the motion be filed with the court. To mix naval metaphors, the party seeking sanctions must first fire a warning shot that gives the opponent time to find a safe harbor.

In this case, the party who sought sanctions failed to comply with that procedure. It argued, however, that two letters it sent containing both settlement demands and threats to seek Rule 11 sanctions if its demands were not met amounted to “substantial compliance” with Rule 11(c)(2) and thus preserved its right to move for sanctions after the district court granted summary judgment in its favor. The district court accepted that argument and imposed sanctions. Northern Illinois Telecom, Inc. v. PNC Bank, NA (NITEL II), No. 12 C 2372, 2015 WL 1943271, at *9 (N.D. Ill. Apr. 29, 2015).

We reverse. Whether “substantial compliance” with the warning-shot/safe-harbor requirement of Rule 11(c)(2) can ever be sufficient is controversial. We are the lone circuit to say yes. Compare Penn, LLC v. Prosper Business Dev. Corp., 773 F.3d 764, 768 (6th Cir. 2014) (eight circuits reject substantial compliance theory), with Nisenbaum v. Milwaukee County, 333 F.3d 804, 808 (7th Cir. 2003) (substantial compliance with warning-shot requirement was sufficient to allow sanctions). Even assuming substantial compliance is sufficient, the defendant’s settlement demands in this case fell far short of substantial compliance. We therefore reverse the district court’s award of sanctions.

I. Factual and Procedural Background

A. Plaintiff’s Breach of Contract Claim

In 2007, a company called Nexxtworks contracted with two banks in the Chicago area to upgrade communications facilities. Northern Illinois Telecom, Inc. v. PNC Bank, NA (NITEL I), No. 12 C 2372, 2014 WL 4244069 (N.D. Ill. Aug. 27, 2014). Nexxtworks subcontracted with plaintiff NITEL to install data and telephone cable at four bank branches. NITEL performed the work, but Nexxtworks did not pay NITEL all that it thought it was owed. Nexxtworks asserted there had been quality problems that had required it to hire other subcontractors to redo or finish NI-TEL’s work. In 2009, before their dispute was resolved, Nexxtworks filed for bankruptcy protection in Florida and listed NI-TEL’s claim as a disputed debt. NITEL filed a proof of claim for $115,000, but the bankruptcy court disallowed it because it was filed too late.

In 2012, still seeking payment for what it thought it was owed, NITEL filed this breach of contract suit in an Illinois state court against PNC Bank, which by that time had acquired both of the original banks in whose branches NITEL had installed the cables. NITEL sought damages of $81,300, plus late fees, attorney fees, and costs. With the amount in controversy greater than $75,000, PNC Bank removed the case to federal court based on diversity of citizenship under 28 U.S.C. § 1332. The problem for NITEL was that it had no contract with PNC Bank, which moved for summary judgment on that basis. District Judge St. Eve granted summary judgment for PNC Bank. NITEL I, 2014 WL 4244069. NITEL did not appeal.

B. District Court Rule 11 Sanctions Order and Award

The present appeal stems from the district court’s post-judgment award of Rule 11 sanctions against both NITEL and its lawyer, appellant Riffner. Before discovery began and again before PNC Bank moved for summary judgment, PNC Bank’s lawyer sent letters to Riffner asserting that NITEL’s breach of contract claim was frivolous. Both letters proposed to settle the case by having NITEL dismiss its suit and pay PNC Bank its attorney fees. Both letters concluded by threatening to seek Rule 11 sanctions if NITEL did not agree to the demands within a few days. Riffner did not respond to those letters. Two months after final judgment, PNC Bank moved for sanctions under Rule 11. The case was reassigned to District Judge Bla-key.

Judge Blakey awarded sanctions against NITEL and Riffner, jointly and severally, for $84,325. The judge held that the contract claim was frivolous and asserted in bad faith. The court found “clear evidence that, in fact, NITEL knew Nexxtworks (and not PNC) was contractually obligated to pay for the work NITEL did at the branches, and even a cursory investigation would have shown that the Nexxtworks email and the work orders could not support a breach of contract claim.” NITEL and Riffner both appealed the sanctions order, but NITEL was later dismissed as an appellant. We have before us only Riff-ner’s appeal.

II. Analysis

We review a district court’s grant of Rule 11 sanctions for abuse of discretion. Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 409, 110 S.Ct. 2447, 110 L.Ed.2d 359 (1990); Mars Steel Corp. v. Continental Bank, N.A., 880 F.2d 928, 933 (7th Cir. 1989) (en banc). An abuse of discretion may be established if the district court based its decision on an erroneous view of the law or a clearly erroneous evaluation of evidence. Gastineau v. Wright, 592 F.3d 747, 748 (7th Cir. 2010).

Riffner raises both substantive and procedural objections to the district court’s award of sanctions. The substantive arguments are not persuasive, and Riffner’s attempt to walk away from his and NI-TEL’s earlier reliance on work orders to prove it had contracts with the banks is flatly contradicted by the record. The district court did not abuse its discretion in finding that,the breach of contract claim that Riffner pursued against PNC Bank on behalf of NITEL was objectively baseless because NITEL never had a contract with PNC Bank.

The problem with the sanctions award is procedural. PNC Bank simply failed to follow the requirements of Rule 11. To explain, we start with a word about the role of Rule 11 in federal civil litigation and then examine the amendments that led to the warning-shot/safe-harbor requirement.

In civil cases within our jurisdiction, federal courts exercise considerable discretion and great power. The proper exercise of that power can be essential in preserving the rule of law and the rights and liberties of the American people, in cases large and small, landmark and mundane. When a plaintiff invokes those powers in a civil case, it puts machinery in gear that can be powerful, intimidating, and often expensive. Those powers and machinery can be abused by litigants. Federal Rule of Civil Procedure 11 seeks to ensure that those powers and machinery are engaged only to address claims and defenses that have a reasonable basis in fact and law and that are asserted only for a proper purpose. Because Rule 11 can affect so powerfully the ability of parties to seek the protection of the federal courts, the details of its provisions have long been controversial.

In the current version of the rule, the substantive provisions are in subsection (b):

(b) Representations to the Court. By presenting to the court a pleading, written motion, or other paper — whether by signing, filing, submitting, or later advocating it — an attorney or unrepresented party certifies that to the best of the person’s knowledge, information, and belief, formed after an inquiry reasonable under the circumstances:
(1) it is not being presented for any improper purpose, such as to harass, cause unnecessary delay, or needlessly increase the cost of litigation;
(2) the claims, defenses, and other legal contentions are warranted by existing law or by a non-frivolous argument for extending, modifying, or reversing existing law or for establishing new law;
(3) the factual contentions have eviden-tiary support or, if specifically so identified, will likely have evidentiary support after a reasonable opportunity for further investigation or discovery; and
(4) the denials of factual contentions are warranted on the evidence or, if specifically so identified, are reasonably based on belief or a lack of information.

Subsection (c) then authorizes district courts to impose sanctions, including monetary sanctions, against parties, attorneys, and law firms who violate the substantive standards of subsection (b), as Riffner and NITEL did in this case. Subsection (c) provides:

(c) Sanctions.
(1) In General If, after notice and a reasonable opportunity to respond, the court determines that Rule 11(b) has been violated, the court may impose an appropriate sanction on any attorney, law firm, or party that violated the rule or is responsible for the violation. Absent exceptional circumstances, a law firm must be.held jointly responsible for a violation committed by its partner, associate, or employee.
(2) Motion for Sanctions. A motion for sanctions must be made separately from any other motion and must describe the specific .conduct that allegedly violates Rule 11(b). The motion must be served under Rule 5, but it must not be filed or be presented to the court if the challenged paper, claim, defense, contention, or denial is withdrawn or appropriately corrected within 21 days after service or within another time the court sets. If warranted, the court may award to the prevailing party the reasonable expenses, including attorney’s fees, incurred for the motion.
(3) On the Court’s Initiative. On its own, the court may order an attorney, law firm, or party to show cause why conduct specifically described in the order has not violated Rule 11(b).
(4) Nature of a Sanction. A sanction imposed under this rule must be limited to what suffices to deter repetition of the conduct or comparable conduct by others similarly situated. The sanction may include nonmonetary directives; an order to pay a penalty into court; or, if imposed on motion and warranted for effective deterrence, an order directing payment to the movant of part or all of the reasonable attorney’s fees and other expenses directly resulting from the violation.
(5) Limitations on Monetary Sanctions. The court must not impose a monetary sanction:
(A) against a represented party for violating Rule 11(b)(2); or
(B) on its own, unless it issued the show-cause order under Rule 11(c)(3) before voluntary dismissal or settlement of the claims made by or against the party that is, or whose attorneys are, to be sanctioned.
(6) Requirements for an Order. An order imposing a sanction must describe the sanctioned conduct and explain the basis for the sanction.

Our focus here is on the procedural requirements in Rule 11(c)(2) for a party’s motion for sanctions. Before filing a motion for sanctions, a party must first serve the motion on the challenged party, and the motion may not be filed with the court for 21 days. That gives the challenged party that time to withdraw or correct the challenged claim, defense, contention, or denial. This combination of a warning shot and a safe harbor was a critical change adopted in the 1993 amendments to Rule 11. A little history explains its importance.

As adopted in the original Federal Rules of Civil Procedure in 1938, Rule 11 required attorneys to sign all pleadings and treated the signature as a certificate that the lawyer had read the pleading and that, to the best of the lawyer’s 'knowledge, information, and belief, there was good ground to support it and it was not interposed for delay. While the rule authorized sanctions, it did so in only this vague language: “For a wilful violation of this rule an attorney may be subjected to appropriate disciplinary action.” Fed. R. Civ. P. 11 (1938), as promulgated at 308 U.S. 645, 676 (1938). The focus on the attorney’s subjective knowledge and the requirement of willful violation meant that sanctions were very rare before the rule was amended in 1983. Georgene M. Vairo, Rule 11: A Critical Analysis, 118 F.R.D. 189, 190-92, 205 (1988).

Growing impatience with lawsuits and litigation tactics perceived as frivolous led to the most controversial amendment to the Federal Rules of Civil Procedure since their adoption, the 1983 amendment to Rule 11. Id. at 190. The principal changes were to adopt an objective standard of reasonableness, to impose on counsel a pre-filing duty of inquiry, and to add language that the court “shall impose” sanctions when the rule was violated. Fed. R. Civ. P. 11 advisory committee’s note to 1983 amendment. The amendment left no room for an “empty head, pure heart” defense.

The newly amended Rule 11 quickly became a favorite weapon in litigators’ briefcases, often used and even more often brandished to threaten. Its use exploded in the late 1980s. One commentator wrote in 1988 that Rule 11 had become “the cottage industry of the litigation bar.” Vairo, 118 F.R.D. at 199. As it turned out, the 1983 amendments had been an over-correction. The new problems led to the 1993 amendments at the heart of this appeal. One unintended consequence of the threat of Rule 11 sanctions was that “parties were sometimes reluctant to abandon a questionable contention lest that be viewed as evidence of a violation.” Fed. R. Civ. P. 11 advisory committee’s note to 1993 amendment.

The 1993 amendments preserved the objective standard of reasonableness and the enhanced duty of pre-filing inquiry into the law and facts. The amendments sought, however, to constrain the imposition of sanctions and to “reduce the number of motions for sanctions presented to the court.” Id. The 1993 amendments were numerous. They included new procedural requirements to enhance due process and fair use of the rule, and they removed the “shall impose” language to restore trial judges’ discretion in deciding whether to impose sanctions at all.

One of the most important changes was to add the provision at issue in this appeal, the warning-shoVsafe-harbor procedure in Rule 11(c)(2). The Advisory Committee explained:

The rule provides that requests for sanctions must be made as a separate motion, ie., not simply included as an additional prayer for relief contained in another motion. The motion for sanctions is not, however, to be filed until at least 21 days (or such other period as the court may set) after being served. If, during this period, the' alleged violation is corrected, as by withdrawing (whether formally or informally) some allegation or contention, the motion should not be filed with the court. These provisions are intended to provide a type of “safe harbor” against motions under Rule 11 in that a party will not be subject to sanctions on the basis of another party’s motion unless, after receiving the motion, it refuses to withdraw that position or to acknowledge candidly that it does not currently have evidence to support a specified allegation. Under the former rule, parties were sometimes reluctant to abandon a questionable contention lest that be viewed as evidence of a violation of Rule 11; under the revision, the timely withdrawal of a contention will protect a party against a motion for sanctions.
To stress the seriousness of a motion for sanctions and to define precisely the conduct claimed to violate the rule, the revision provides that the “safe harbor” period begins to run only upon service of the motion. In most cases, however, counsel should be expected to give informal notice to the other party, whether in person or by a telephone call or letter, of a potential violation before proceeding to prepare and serve a Rule 11 motion.

Id. (emphasis added). A letter may thus warn about impending service of the motion, but a letter is not a substitute for a motion.

To return to the case at hand, PNC .Bank simply did not comply with this warning-shot/safe-harbor requirement. It did not prepare and serve a Rule 11 motion on NITEL and Riffner, nor did it allow 21 days for them to withdraw NI-TEL’s claims. The district court concluded that PNC Bank’s two settlement offers with Rule 11 threats to Riffner were sufficient warning shots under Rule 11(c)(2) on the theory that they substantially complied with the rule. NITEL II, 2015 WL 1943271, at *4. To support the substantial compliance approach, the court cited our decisions in Methode Electronics, Inc. v. Adam Technologies, Inc., 371 F.3d 923, 927 (7th Cir. 2004) (dicta), and Matrix IV, Inc. v. American National Bank & Trust Co. of Chicago, 649 F.3d 539, 552-53 (7th Cir. 2011).

Our line of cases on “substantial compliance” with the warning-shot requirement began with Nisenbaum v. Milwaukee County, 333 F.3d 804, 808 (7th Cir. 2003), where we concluded that where the failure to satisfy the warning-shot requirement was only “technical,” the moving party’s substantial compliancé with the warning-shot requirement entitled it “to a decision on the merits.” In Nisenbaum, we held that there was substantial compliance with Rule 11 because the defendants sent a letter — rather than a motion — that explained the grounds for sanctions and provided more than 21 days to remedy the problem. Insisting on a formal motion seemed unduly formalistic.

In Matrix IV, the moving party similarly sent a letter that explained the grounds for the sanctions and informed the opposing party it would seek Rule 11 sanctions if the claim were not dismissed voluntarily. 649 F.3d at 552. The letter explicitly asserted that it served “as notice” of the party’s intention to seek sanctions at the close of the case. We found that this warning also amounted to substantial compliance with the warning-shot requirement, though we ultimately decided the case on other grounds, finding that the sanctions were unwarranted on the merits. Id. at 553.

There are both legal and factual problems with this theory- of “substantial compliance” to save the sanctions order in this case. The legal problem is that the substantial compliance theory we adopted in Nisenbaum stands alone and is difficult to reconcile with the explicit requirements of the Rule and the clear explanation from the Advisory Committee. No other circuit has adopted this approach. See Penn, LLC v. Prosper Business Dev. Corp., 773 F.3d 764, 767-68 (6th Cir. 2014) (reviewing circuit split; Second, Third, Fourth, Fifth, Sixth, Eighth, Ninth, and Tenth Circuits have rejected “substantial compliance,” and only Seventh .Circuit has adopted it). Our colleagues in other circuits have been highly critical of the terse treatment of the issue in Nisenbaum. E.g., Cadle Co. v. Pratt (In re Pratt), 524 F.3d 580, 587-88 (5th Cir. 2008) CNisenbaum did not address language of Rule 11, Advisory Committee notes, or other Rule 11 jurisprudence); Roth v. Green, 466 F.3d 1179, 1193 (10th Cir. 2006) (same). As the Ninth Circuit explained in Barber v. Miller, “warnings were not motions” and “the Rule requires service of a motion.” 146 F.3d 707, 710 (9th Cir. 1998). The 1993 amendment “deliberately imposed” the requirement of service. Id. “It would therefore wrench both the language and purpose of the amendment to the Rule to permit an informal warning to substitute for service of a motion.” Id.

The Advisory Committee notes warn against treating anything less than formal service of a motion as sufficient to comply with the warning-shot/safe-harbor requirement: “To stress the seriousness of a motion for sanctions and to define precisely the conduct claimed to violate the rule, the revision provides that the ‘safe harbor’ period begins to run only upon service of the motion. In most cases, however, counsel should be expected to give informal notice to the other party, whether in person or by a telephone call or letter, of a potential violation before proceeding to prepare and serve a Rule 11 motion.” By treating a mere warning letter as sufficient, a standard of substantial compliance leaves the recipient unclear as to both whether the opposing party is serious and when the 21-day safe-harbor clock starts to run.

Despite the criticism, though, Ni-senbaum remains controlling circuit law on this point. We need not revisit here whether substantial compliance can ever satisfy the warning-shot requirement of Rule 11(c)(2). PNC Bank’s warning-shot letters fell far short of even the generous target of substantial compliance.

On July 31, 2012, before discovery began, PNC Bank’s lawyer sent a letter to Riffner offering to settle the case. The letter explained the defects in the breach of contract claim. We assume the explanation of those defects was sufficient. The problems in terms of substantial compliance were that the letter demanded dismissal of the suit within eight days, as well as payment to PNC Bank of $9,195 for its fees and costs. The letter also demanded within five days a written response agreeing to the demand. The letter concluded: “If I do not receive written confirmation by that date, please be advised that PNC will be seeking sanctions under Federal Rule 11 against NITEL and your firm....”

On April 2, 2013, shortly after the close of discovery and before moving for summary judgment, PNC Bank’s lawyer sent a second settlement offer. It again reviewed the serious problems with NITEL’s case and explained why the suit was frivolous. This letter proposed different settlement, terms, demanding that NITEL dismiss the complaint with prejudice and pay PNC Bank $24,000. The letter demanded written acceptance within six days. The settlement proposal concluded much as the earlier letter had: “If I do not receive written confirmation by that date, please be advised that PNC will seek sanctions under Federal Rule 11 against your firm and NITEL, for all fees and costs incurred by the bank in defending your client’s baseless and patently false complaint.”

The Rule 11 threats did not transform PNC Bank’s settlement offers into communications that substantially complied with the Rule 11(c)(2) warning-shot/safe-harbor requirements. Even if we treat the criticisms of NITEL’s case and litigation tactics as containing the equivalent of a Rule 11 motion, the letters simply did not offer NITEL or Riffner the 21-day safe harbor that was offered in Nisenbaum or Matrix IV. Substantial compliance requires the opportunity to withdraw or correct the challenged pleading within 21 days without imposition of sanctions. Neither PNC Bank letter offered that opportunity. PNC Bank was entitled, if it chose, to huff and puff about Rule 11 in its settlement demands for dismissal of baseless claims. But its posturing did not amount even to substantial compliance with the warning-shot/ safe-harbor provision, let alone to the actual compliance that other circuits demand.

The district court’s award of sanctions against Riffner is REVERSED.

POSNER, Circuit Judge,

dissenting.

Federal Rule of Civil Procedure 11(c)(2), captioned “Motion for Sanctions,” provides, so far as bears on this case, that such “a motion ... must not be filed or be presented to the court if the challenged paper, claim, defense, contention, or denial is withdrawn or appropriately corrected within 21 days after service.... ” Our court has held that “substantial compliance” with the rule is sufficient. Nisenbaum v. Milwaukee County, 333 F.3d 804, 808 (7th Cir. 2003); Methode Electronics, Inc. v. Adam Technologies, Inc., 371 F.3d 923, 927 (7th Cir. 2004); Matrix IV, Inc. v. American National Bank & Trust Co. of Chicago, 649 F.3d 539, 552-53 (7th Cir. 2011). And this case is a good example of substantial compliance, as the district judge found and my colleagues on this panel, enamored as they appear to be of legal technicalities, or reluctant to punish misbehaving lawyers, miss.

Lawyer Riffner, representing NITEL, filed this suit on NITEL’s behalf against PNC Bank, N.A., the appellee, in February 2012. The district judge correctly deemed the suit frivolous. Riffner’s irresponsible conduct of it was clearly sanc-tionable. PNC sent Riffner a letter in July 2012 explaining in detail the legal and factual problems with his lawsuit, demanding withdrawal of NITEL’s complaint, and advising Riffner that if it wasn’t withdrawn PNC would seek sanctions against him under Rule 11. This placed Riffner on notice that if his suit against PNC was indeed frivolous, as it was, he’d better withdraw it or face Rule 11 sanctions. He didn’t withdraw the complaint — boorishly, he didn’t even respond to the letter.

After conducting further discovery, which yielded additional evidence of the frivolousness of NITEL’s suit, PNC sent Riffner a second, similar letter in April 2013 outlining the evidence of its frivolousness in detail and threatening to file a Rule 11 motion for sanctions against him if he didn’t dismiss the suit. Not only did he not dismiss the suit, or withdraw any of the charges made in it; he didn’t even reply to the letter, thus repeating his earlier rudeness. Although PNC did not serve a formal Rule 11 motion on Riffner prior to filing the motion with the court, PNC’s letters were the equivalent of Rule 11 motions, and gave Riffner two opportunities to abandon or at least curtail his frivolous lawsuit without having to pay sanctions. Instead he signaled by his failure to answer either letter that he was persisting in his frivolous suit — that he really was a boor.

Because PNC’s letters constituted substantial compliance with Rule 11(c)(2), as permitted by the cases in this court that I cited earlier and that the majority opinion does not challenge, we should affirm the district court.

      . In its response to PNC Bank's motion for summary judgment, NITEL, through Riffner, said: "NITEL's allegations against MidAmeri-ca and National City are based on purported work orders for each of the Branches/’ and that “the Work Order acted as a contract for the work done.”

      . For detailed accounts of the problems encountered after the 1983 amendments, see the following sources cited by the Advisory Committee in 1993: New York State Bar Committee on Federal Courts, Sanctions and Attorneys’ Fees (1987); Thomas Willging, The Rule 11 Sanctioning Process (1989); American Judicature Society, Report of the Third Circuit Task Force on Federal Rule of Civil Procedure 11 (Stephen Burbank ed., 1989); Elizabeth Wiggins et al., Federal Judicial Center, Report on Ride 11 (1991). The 1993 committee also cited three book-length analyses of the case law: Gregory Josfeph, Sanctions: The Federal Law of Litigation Abuse (1989); Jerold Solovy, The Federal Law of Sanctions (1991); Geor-gene Vairo, Rule 11 Sanctions: Case Law, Perspectives and Preventive Measures (1991). A recent search of Westlaw showed that Rule 11 was cited in only five appellate decisions in 1978, but in 236 appellate decisions in 1988. For district courts, the comparable figures are 19 in 1978 and 615 in 1988.

      . For a broader review of the criticisms and process that led to adoption of the 1993 amendments, see Carl Tobias, The 1993 Revision to Federal Rule 11, 70 Ind. L.J. 171, 174-88 (1994)

      . Accord, Star Mark Management, Inc. v. Koon Chun Hing Kee Soy & Sauce Factory, LTD, 682 F.3d 170, 175-76 (2d Cir. 2012) (warning letter not sufficient; rule requires service of motion to trigger safe-harbor provision); Ettinger & Assocs., LLC v. Miller (In re Miller), 730 F.3d 198, 204 (3d Cir. 2013) (emphasizing importance of the safe-harbor provision in analogous bankruptcy context); Brickwood Contractors, Inc. v. Datanet Engineering, Inc., 369 F.3d 385, 389 (4th Cir. 2004) (Rule 11 “thus establishes conditions precedent to the imposition of sanctions under the rule. If those conditions are not satisfied, the Rule 11 motion for sanctions may not be filed with the district court.”); Gordon v. Unifund CCR Partners, 345 F.3d 1028, 1030 (8th Cir. 2003) (same).

      . It should not be difficult for a party who is serious about seeking Rule 11 sanctions to comply with Rule 11(c)(2). Parties and district courts that rely on a theory of substantial compliance should understand that, at least in the present landscape, they are inviting possible en banc and/or Supreme Court review of the question.


author: FLAUM, Circuit Judge.

text:
    Henry C. WEDEMEYER and Martha L. Wedemeyer, Plaintiffs-Appellants, v. CSX TRANSPORTATION, INC., Defendant-Appellee.
    No. 15-3580
    United States Court of Appeals, Seventh Circuit.
    Argued January 11, 2017
    Decided March 10, 2017

      • James E. Ayers, Attorney, Wernle, Ris-tine & Ayers, Crawfordsville, IN, for Plaintiffs-Appellants.
    Robert Dean MacGill, Counsel, Matthew Brian Barr, Alexander Pape Orlowski, Attorneys, Barnes & Thornburg LLP, Indianapolis, IN, Robert Eric Bilik, Robert Patrick Dover, Esq., Attorneys, McGuire-Woods LLP, Jacksonville, FL, for Defendant-Appellee.
    Before FLAUM, EASTERBROOK, and SYKES, Circuit Judges.
   FLAUM, Circuit Judge.

In 1989, CSX Transportation successfully petitioned the Interstate Commerce Commission (the “ICC”) to end CSX’s obligation to provide, common-carrier rail service on a portion of track in Putnam County, Indiana. The following year, CSX notified the ICC that it had abandoned that segment. Shortly thereafter, CSX leased a portion of its track, including the abandoned segment, for use by a grain-shipping company.

The Wedemeyers own property adjoining the abandoned track segment. They sued CSX seeking removal of the tracks and possession of the real property underlying the rail line. CSX moved for summary judgment, and the district court granted its motion, finding that the Wede-meyers’ claims were preempted under the Interstate Commerce Commission Termination Act (“ICCTA”), 49 U.S.C. § 10501(b). We affirm.

I. Background

CSX is one of the largest rail transportation companies in the United States and a “rail carrier” under the ICCTA. CSX’s rail network consists of approximately 21,-000 route miles spanning 23 states, including Indiana. Historically, CSX and its predecessors operated two primary rail lines through Putnam County, Indiana: (1) a north-south line running from Chicago, Illinois, to Cloverdale, Indiana; and (2) an east-west line between Indianapolis, Indiana, and Decatur, Illinois. These two lines intersected in Roachdale, Indiana. CSX acquired the portion of the east-west line at issue by a deed dated 1876 and an instrument of appropriation dated 1879 conveyed to CSX’s predecessor railway company. CSX has continuously operated trains through Roachdale over the east-west line since at least 1966.

In 1989, CSX filed a petition for an exemption with the ICC seeking to end CSX’s obligation to provide common-carrier rail service on a 26.73-mile segment of mainline track on the east-west line (from Milepost 132.45 near Mitchellville, just outside of Indianapolis, to Milepost 159.18 near Roachdale). The ICC granted CSX’s petition, thereby giving CSX conditional authority to end its obligation to provide common-carrier rail service on that track segment, which would no longer be “mainline track.” CSX then had several options with respect to this track, including continuing to utilize it as non-mainline track, e.g., as industry, spur, team, switching, or side track (collectively, “auxiliary track”); or physically removing the track. In 1990, CSX notified the ICC that it had “abandoned” the segment.

Since at least 1990, CSX has provided rail service to a Roachdale grain-shipping facility located adjacent to CSX’s track, to the east of the north-south line. Beginning in 1992, CSX leased a portion of the track to the grain shipper for use at its facility. The lease granted the grain shipper the right to use (1) the CSX mainline track west of Milepost 159.18, which connected to the north-south line at Milepost 159.80 (continuous mainline track), and (2) the abandoned track east of Milepost 159.18 (former mainline track). The leased track has been used for the storage and switching of empty inbound railcars and loaded outbound railcars. CSX also retained the right under the lease to switch railcars on the tracks as needed to conduct its own railroad operations, and to operate over the leased track with its own locomotives and rail equipment. Between 2001 and 2014, CSX transported more than 15,000 carloads from the grain facility using the tracks.

Henry (“Kit”) Wedemeyer and Martha Wedemeyer own real property in Roach-dale that adjoins approximately 2,588 feet of the former mainline (now auxiliary) track east of Milepost 159.18. The Wede-meyers were aware of the rail line and its active use when they took up residence on the property in 2008, accepted the deed to the property in 2005, and constructed their residence adjacent to the rail line. Kit also grew up on the property and recalls trains using the rail line adjacent to the property as far back as the late 1960s. The rail line remained in place and operational during the Wedemeyers’ entire period of residence and ownership.

The Wedemeyers first complained to CSX about the railroad operations on the track adjacent to their property on or about August 2, 2013. In or around September 2013, when the Wedemeyers learned that CSX claimed to control the uses of the track in question, Kit spoke by telephone to Leah Weider, the CSX Transportation Property Services Group Manager, and directed CSX to vacate and cease any further entry onto the property.

In November 2013, the Wedemeyers filed in Putnam Superior Court a “Complaint to Quiet Title and for Trespass and Ejectment and Permanent Injunction,” which sought “immediate and sole possession” of the real property underlying the rail line and demanded that CSX “remove its ties, rails, and ballast” from the rail line. The Wedemeyers’ complaint alleged that CSX had abandoned the track at issue in December 2003, pursuant to a settlement agreement and declaratory judgment filed in an Indiana state-court class action-Clark v. CSX Transp., Inc., No. 29D03-9308-CP-404 (Hamilton Cty. Super. Ct.). The declaratory judgment, which was filed in 2004, stated in relevant part:

4. Where the title held by CSX to that portion of the Settlement Corridor has been determined pursuant to the Settlement Agreement to be less than fee title, the designation of “Easement” appears in the column titled “Interest Status” in Exhibit A. With respect to these portions of the Settlement Corridor, the Court declares that the Settlement Class Member’s title to the portion of the Settlement Corridor adjacent to their property is superior to any claims of title by CSX, subject to any prior adjudication of title in a Court of law in which the Class Member’s title or the title of the Class Member’s predecessor in interest was determined not to be superior to the title of CSX.

The Wedemeyers’ predecessor-in-interest, Kit’s stepfather, had opted into the Clark class, and had filed affidavits of ownership with the Putnam County Recorder in 2004, stating that he held superior title to the property underlying the rail line. He later conveyed the property to the Wede-meyers.

CSX removed the case to federal court and later moved for summary judgment, arguing that the ICCTA preempted the Wedemeyers’ state-law claims and that their claims were barred as a matter of law by the applicable statute of limitations and by equitable doctrines. The Wedemey-ers failed to include a Local Rule 56.1 “Statement of Material Facts in Dispute” in their response to CSX’s motion for summary judgment. They contended, however, that their claims were not preempted because they sounded in contract (ie., the settlement agreement in Clark as confirmed by the declaratory judgment) and thus did not constitute a “regulation” under the ICCTA. They also argued that the statute of limitations did not begin to run until 2013, when Kit spoke with CSX.

The district court held that because the Wedemeyers sought to use state law to regulate (ie., terminate) CSX’s use of the easement, their claims were preempted under the ICCTA. The court concluded that “regulation” did not refer only to a state regulation or action, but rather, to controls or limitations of any kind on the use of rails. The court also rejected the Wede-meyers’ argument that the declaratory judgment was a contractual arrangement to which ICCTA preemption ought not apply, finding that the judgment “merely decided the nature of CSX[]’s property interest in the subject land” without “changing] the fact that the ICCTA preempts any attempt to regulate rail transportation.” This appeal followed.

II. Discussion

We review de novo a district court’s grant of summary judgment, construing all facts and drawing all reasonable inferences in favor of the non-moving party — here, the Wedemeyers. See C.G. Schmidt, Inc. v. Permasteelisa N. Am., 825 F.3d 801, 805 (7th Cir. 2016) (citation omitted). Summary judgment is appropriate if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a); C.G. Schmidt, 825 F.3d at 805. We also review de novo the district court’s determination of the preemptive effect of a federal statute. Union Pac. R.R. Co. v. Chi. Transit Auth., 647 F.3d 675, 678 (7th Cir. 2011).

The ICCTA abolished the ICC, transferring its functions to, and conferring “exclusive” jurisdiction over the regulation of railroad transportation on, the Surface Transportation Board:

The jurisdiction of the Board over—
(1) transportation by rail carriers, and the remedies provided in this part with respect to rates, classifications, rules (including car service, interchange, and other operating rules), practices, routes, services, and facilities of such carriers; and
(2) the construction, acquisition, operation, abandonment, or discontinuance of spur, industrial, team, switching, or side tracks, or facilities, even if the tracks are located, or intended to be located, entirely in one State,
is exclusive. Except as otherwise provided in this part, the remedies provided under this part with respect to regulation of rail transportation are exclusive and preempt the remedies provided under Federal or State law.

.49 U.S.C. § 10501(b). Congress defined “transportation” broadly to include railroad property, facilities, and equipment “related to the movement of passengers or property, or both, by rail, regardless of ownership or an agreement concerning use.” Id. § 10102(9). The Act does not define “regulation,” but we have observed that “Congress’s intent in the Act to preempt state and local regulation of railroad transportation has been recognized as broad and sweeping.” Union Pac. R.R. Co., 647 F.3d at 678 (collecting cases).

The STB has explained that there are two manners in which state or local actions could be preempted: (1) categorical, or per se, preemption, and (2) as-applied preemption. See CSX Transp., Inc.-Petition for Declaratory Order, STB Finance Docket No. 34662, 2005 WL 1024490, at *2-3 (S.T.B. May 3, 2005). “Categorical preemption occurs when a state ... action is preempted on its face despite its context or rationale,” such as when state preclearance could be used to deny a railroad the ability to conduct some part of its operations, or when a state regulates matters directly regulated by the STB (e.g., the construction, operation, and abandonment of rail lines). Union Pac. R.R. Co., 647 F.3d at 679 (citation omitted); id. at 679 n.3 (citation omitted). An' action may be preempted “as applied” based on the degree of interference that it has on railroad transportation — that is, if the action would- have the effect of preventing or unreasonably interfering with railroad transportation. Id. at 679 (citation omitted).

CSX argues, and the district court agreed, that because the Wedemeyers seek to end all rail transport on the track in question, their claims are preempted as applied. CSX relies on Union Pacific Railroad, in which we held that the Chicago Transit Authority’s condemnation action seeking to take possession of a portion of railroad property could be a form of regulation preempted by the ICCTA. 647 F.3d at 682-83. We noted that Black’s Law Dictionary defined “regulation” as the “act or process of controlling by rule or restriction,” 647 F.3d at 679 n.2 (citing Regulation, Black’s Law Dictionary (9th ed. 2009)); and concluded that because the CTA was seeking to control a piece of land through condemnation, its action constituted regulation of rail transportation and preemption obtained, id. at 683; see also Norfolk S. Ry. Co. & the Ala. Great S. R.R. Co.-Petition for Declaratory Order, STB Finance Docket No. 35196, 2010 WL 691256, at *3 (S.T.B. Feb. 26, 2010) (“using state eminent domain law to condemn railroad property or facilities for another use that would conflict with the rail use is exercising control — the most extreme type of control — over rail transportation as it is defined in [49 U.S.C. § ] 10102(9)”) (internal quotation marks omitted).

The Wedemeyers respond that their claims are not preempted because their right to ownership and control sounds in contract — that is, the settlement agreement entered into voluntarily by CSX and the Clark class, as confirmed by the declaratory judgment. They also cite to Union Pacific Rail Co., in which we cautioned:

Federal preemption does not apply to all situations where the use of property prevents or unreasonably interferes with railroad transportation; it applies to those situations where a regulation prevents or unreasonably interferes with railroad transportation. If a state or local government secures the use of property in a way that affects railroad transportation by contract or other agreement, there is no issue of federal preemption; but if it attempts to secure such use by regulation (in this case, by condemnation), then the possibility of federal preemption may arise.

647 F.3d at 682; see also PCS Phosphate Co. v. Norfolk S. Corp., 559 F.3d 212, 218-19 (4th Cir. 2009) (“Voluntary agreements between private parties, however, are not presumptively regulatory acts, and we are doubtful that most private contracts constitute the sort of ‘regulation’ expressly preempted by the statute.... Such a broad reading of the preemption clause would make it virtually impossible to conduct business, and Congress surely would have spoken more clearly, and not used the word ‘regulation,’ if it intended that result.”) (footnote omitted).

If the declaratory judgment did in fact memorialize CSX’s agreement to “release all claims to the right of way, and remove the track from use and abandon it,” as the Wedemeyers purport in their briefs, then their claims would likely escape preemption. The settlement, however, does not deal with the use of the track in question. Rather, the agreement in Clark, as memorialized by the declaratory judgment, appears to do no more than decide the nature of CSX’s property interest in the land (i.e., fee title versus easement), and the superiority of property interests as between CSX and the class members. The declaratory judgment and parties’ briefs confirm that CSX had only an easement with respect to the tracks at issue. However, the judgment does not establish that CSX ever gave up their right to enter and use the land. Although paragraph 1 of the judgment does reference “the abandoned railroad corridor,” this language appears to refer to CSX’s abandonment of common-carrier service on the track, not a wholesale abandonment of all rail service or use of the track.

The Wedemeyers seek to establish that CSX did in fact completely abandon its easement (and thus pull us into the merits of their claims) by citing to two Indiana cases: Consolidated Rail Corp. v. Lewellen, 666 N.E.2d 958 (Ind. Ct. App. 1996), opinion adopted, 682 N.E.2d 779 (Ind. 1997), and Howard v. United States, 964 N.E.2d 779 (Ind. 2012). In Lewellen, co-defendant Conrail had discontinued rail service over a corridor and removed the tracks and materials, and then attempted to transfer its property interest to Rails to Trails, Inc., a nonprofit that converted unused rail corridors into public trails. 666 N.E.2d at 960. Landowners filed a class-action suit alleging that Conrail’s easements had extinguished upon Conrail’s abandonment of the line, such that any rights of way reverted back to the landowners. Id. at 960-961. The court concluded that because Conrail held only a right-of-way easement in the railroad corridor, Conrail’s abandonment of the tracks triggered an extinguishment of the railroad’s interest, with ownership reverting to the fee simple owner. Id. at 961-63.

In Howard, another “rails to trails” case, the Indiana Supreme Court responded to a certified question from the Court of Federal Claims and explained that “[t]he extent of the easement interest is determined by the purpose served by the easement.” 964 N.E.2d at 781 (citing McCauley v. Harris, 928 N.E.2d 309, 314 (Ind. Ct. App. 2010); N.Y. Cent. R.R. Co. v. Yarian, 219 Ind. 477, 39 N.E.2d 604, 606 (1942)). The Indiana Supreme Court held that the original purpose of the easement at issue in Howard was the transportation of goods through operation of a railroad line, and thus, the easement could not be “recast for use as a public recreational trail without exceeding the scope of the easement and infringing the rights of the landowners.” Id. at 783; see also id. at 784 (“The transformation of a line of railway to a public trail imputes a different purpose. The operation of a railroad line is a commercial enterprise of transport. Whereas as [sic]' public trail is an activity of recreation, not transportation.”) (internal quotation marks and citation omitted).

The Wedemeyers claim that the original purpose of the track at issue in this case was for mainline rail service between Indianapolis and Decatur; thus, they contend, the shift in use to auxiliary track ought to extinguish the easement. However, the operative 1876 deed conveying the rail line states that its purpose is “for the right of way and the use and purpose of the construction of the Railway of said Company, and the use and purpose of the track and roadway of said Company.” This broad language is not limited to mainline or common-carrier service, and the current use of the line by CSX and the grain shipper for loading, unloading, and storing cars on the track falls within the scope of the easement. Moreover, as CSX correctly points out, both Lewellen and Howard dealt with reversionary property interests after all railroad operations had ceased and the tracks had been completely abandoned. See Lewellen, 666 N.E.2d at 960; Howard, 964 N.E.2d at 780. In contrast, the parties in our case agree that CSX has continued to use the track since ending common-carrier service.

As CSX has not lost its easement, and the declaratory judgment was limited to determining the nature of CSX’s and the class members’ property interests, the Wedemeyers’ state-law claims are not contractual in nature. Because the Wedemey-ers seek to control (terminate) use of the track in question through their lawsuit, their claims are preempted under the ICC-TA. See, e.g., Cipollone v. Liggett Grp., Inc., 505 U.S. 504, 521, 112 S.Ct. 2608, 120 L.Ed.2d 407 (1992) (“[State] regulation can be as effectively exerted through an award of damages as through some form of preventive relief. The obligation to pay compensation can be, indeed is designed to be, a potent method of governing conduct and controlling policy.” (quoting San Diego Bldg. Trades Council v. Garmon, 359 U.S. 236, 247, 79 S.Ct. 773, 3 L.Ed.2d 775 (1959))); Thomas Tubbs, Tr. of the Thomas Tubbs Revocable Trust & Individually, & Dana Lynn Tubbs, Tr. of the Dana Lynn Tubbs Revocable Trust & Individually-Petition for Declaratory Order, FD 35792, 2014 WL 5508153, at *4 (S.T.B. Oct. 29, 2014) (“damages awarded under state tort laws can manage or regulate a railroad as effectively as the application of any other type of state statute or regulation”); Tubbs v. Surface Transp. Bd., 812 F.3d 1141, 1146 (8th Cir. 2015) (holding that ICCTA preempted state-law tort claims, including trespass claim, that burdened rail transportation); Pace v. CSX Transp., Inc., 613 F.3d 1066, 1070 (11th Cir. 2010) (“The ICCTA expressly preempts state remedies involving the operation of the side track. Therefore, we will not permit landowners to circumvent that Congressional decision through state law nuisance claims.”).

The Wedemeyers attempt one more dodge of the ICCTA. They cite to The Atchison, Topeka & Santa Fe Ry. Co.-Abandonment Exemption-in Lyon Cty., KS, No. AB-52, 1991 WL 120344 (I.C.C. June 11, 1991), for the proposition that upon CSX’s abandonment of the track, the track was no longer “a rail line,” regardless of whether it was still in active use or not, and thus fell outside of the STB’s jurisdiction. The Wedemeyers did not make this argument in their opening brief, and thus it is forfeited. See, e.g., United States v. Alhalabi, 443 F.3d 605, 611 (7th Cir. 2006) (arguments raised for the first time in reply briefs are waived).

Because the Wedemeyers seek to eject CSX from land with active, ongoing rail operations, preemption obtains. While the Wedemeyers may present their ease before the Surface Transportation Board, they cannot do so here. Consequently, we need not address the merits of CSX’s additional and alternative arguments based on the statute of limitations or equitable doctrines.

III. Conclusion

For the foregoing reasons, we Affirm the district court’s judgment.

      . Section 10102(5) of Title 49 of the United States Code defines "rail carrier” as "a person providing common carrier railroad transportation for compensation, but ... not ... street, suburban, or interurban electric railways not operated as part of the general system of rail transportation.”

      . These terms refer to various private or secondary uses of track, such, as to serve a particular industrial site, to allow loading and unloading of railcars, or to order and organize rail traffic.

      . CSX included this explanation in its statement of undisputed material facts, to which the Wedemeyers failed to respond. To the extent that this statement sets forth a legal proposition rather than a factual statement, we note that it is nonetheless accurate, see, e.g., Fox v. Surface Transp. Bd., 379 Fed.Appx. 767, 771-72 (10th Cir. 2010) (discussing track reclassified as auxiliary yard track after abandonment); Union Pac. R.R. Co. — Abandonment Exemption — In Weld Cty., CO, No. AB-33, 2004 WL 2202235, at *1 (S.T.B. Sept. 30, 2004) ("After abandonment, the line will be converted to an industry track...."); The Atchison, Topeka and Santa Fe Ry. Co. — Abandonment Exemption — In Lyon Cty., KS, No. AB-52, 1991 WL 120344, at *3 (I.C.C. June 11, 1991) (concluding that track that was once part of a rail line cannot be unilaterally converted into a spur without appropriate abandonment authority); The Atchison, Topeka and Santa Fe Ry. Co. — Abandonment Exemption — Lawrence, KS, No. AB-52, 1988 WL 225784, at *1 (I.C.C. Feb. 1, 1988) ("Following the abandonment, [the railroad] will reclassify the track as spur and will continue to serve [the shipper]....").

      .The district court opinion, CSX's Local Rule 56.1 statement, and the parties' briefs on appeal simply state that CSX "abandoned” the track segment at this time. However, the declaration of Jo Ann Burroughs, Manager of Network Services for CSX, to which the briefs cite, clarifies at paragraph eight that when CSX seeks authority to "abandon” lines, such as the 26.73-mile segment from Roachdale to Mitchellville, the track segment is abandoned only for purposes of providing common-carrier rail service. This is in contrast to instances of complete abandonment, where any and all rail use ceases and/or the tracks are removed.

      . The current edition still defines ‘.‘regulation” as "[c]ontrol over something by rule or restriction.” See Regulation, Black’s Law Dictionary (10th ed. 2014).

      . CSX notes in a footnote in its response brief that the settlement agreement is not in the record on appeal, but does not appear to dispute that the Clark declaratory judgment is the result of a settlement agreement.

      . Exhibit A referenced in paragraph 4 of the declaratory judgment was not attached to the judgment or included in either parties' appendices; but CSX does not dispute the Wede-meyers’ claim that CSX had only an easement with respect to the track at issue.

      . Moreover, § 32 — 23—11—6(b) of the Indiana Code provides, "A right-of-way is not considered abandoned if: (1) rail service continues on the right-of-way; or (2) the railroad has entered into an agreement preserving rail service on the right-of-way.” Ind. Code. § 32-23-ll-6(b). CSX's lease agreement with the grain shipper and the resultant continued use of the track for storage, loading, and so forth, satisfies both provisions of § 32-23-1 l-6(b), which the Wedemeyers fail to address. Numerous cases also clarify that only complete abandonment (that is, cessation of operations) results in a track segment no longer being a rail line. See, e.g., Common Carrier Status of States, State Agencies & Instrumentalities, & Political Subdivisions, 363 I.C.C. 132, 135, 135 n.2 (1980) (explaining that "[w]hen a rail line has been fully abandoned, it is no longer [a] rail line,” but also that a line is only "fully abandoned after ... [among other things] operations have ceased”); Birt v. Surface Transp. Bd., 90 F.3d 580, 585 (D.C. Cir. 1996) ("several concrete actions ... may indicate an intent to abandon,” including “cessation of operations,” "salvage of the .track and track materials,” or "relinquishment of control over the right-of-way”) (citation omitted). And we have held that auxiliary tracks still in operation remain within the STB’s exclusive jurisdiction. See United Transp. Union-Ill. Legislative Bd. v. Surface Transp. Bd., 183 F.3d 606, 612 (7th Cir. 1999) ("transactions involving spur track do not call for the [STB’s] authorization ... but the Board nonetheless retains exclusive jurisdiction under § 10501(b)(2)”).


text:
    Amir JAKUPOVIC, Plaintiff-Appellant, v. Mark C. CURRAN, Jr., et al., Defendants-Appellees.
    No. 16-3374
    United States Court of Appeals, Seventh Circuit.
    Argued February 8, 2017
    Decided March 10, 2017

      Anthony J. Peraica, Jennifer M. Hill, Attorneys, Chicago, IL, for Plaintiff-Appellant.
    Beth Greenberg Prager, Attorney, Office of the State’s Attorney of Lake County, Waukegan, IL, for Defendants-Appel-lees.
    Before WOOD, Chief Judge, FLAUM, Circuit Judge, and CONLEY, Chief District Judge.

       Of the Western District of Wisconsin, sitting by designation.

   FLAUM, Circuit Judge.

Amir Jakupovic was charged in Lake County, Illinois with telephone harassment. Before trial, the state court ordered that Jakupovic first be detained and then released on electronic surveillance. Jaku-povic alleges that various state officials acted unlawfully in refusing to release him on electronic surveillance because he lacked a Lake County residence. The district court dismissed Jakupovic’s claims with prejudice. We conclude the claims are jurisdietionally barred and vacate and remand with instructions to dismiss without prejudice.

I. Background

Jakupovic resided in Cook County, Illinois. In September 2015, Jakupovic’s then-girlfriend filed a domestic battery report against him in Cook County. Around the same time, the girlfriend’s mother filed a telephone harassment report against Jaku-povic in Lake County. On September 25, the State charged Jakupovic with telephone harassment in Lake County. The trial court released Jakupovic after his brother posted bond, and, on October 22, Jakupovic pled not guilty. The trial court ordered that Jakupovic undergo an Ontario Domestic Assault Risk Assessment (“ODARA”), pursuant to 725 Ill. Comp. Stat. 5/110-5(0. On November 17, the trial court reviewed the ODARA report and ordered that Jakupovic first be taken into custody and then placed under pre-trial electronic surveillance.

The Lake County Sheriffs Department did not release Jakupovic under electronic surveillance. As alleged, the department required pre-trial detainees to have a Lake County residence in order to be monitored electronically. Lacking such a residence, Jakupovic failed to meet this condition. The next day, on November 18, Jakupovic filed an emergency motion, arguing that the electronic monitoring condition on his bond could not be satisfied because he was not a resident of Lake County, and that, as a result, he could be subject to indefinite custody. The trial court denied Jakupovic’s motion. It then refused to reconsider the order, concluding that having a Lake County residence for the purposes of electronic monitoring was one of the conditions of Jakupovic’s bond and his inability to meet that condition was insufficient grounds for reconsideration. So the Lake County Sheriffs Department continued to detain Jakupovic. Shortly thereafter, Jaku-povic filed a motion to modify his bond conditions. The trial court scheduled a hearing for November 25, but Jakupovic pled guilty on November 23. Jakupovic did not file any appeals in the state courts.

In March 2016, Jakupovic sued Mark Curran (Lake County Sheriff and Director of the Lake County Jail), Terrence Barrett (the jail’s Pretrial Unit Manager), Christine Hecker (Lake County’s Principal Probation Officer), and Joseph Fusz (a Lake County Assistant State’s Attorney) under 42 U.S.C. § 1983. Jakupovic alleged that his six-day detainment violated the Eighth and Fourteenth Amendments and constituted false imprisonment under Illinois law. The district court granted defendants-appellees’ motion to dismiss Jakupovic’s complaint with prejudice pursuant to Federal Rule of Civil Procedure 12(b)(6). This appeal followed.

II. Discussion

We review a district court’s grant of a motion to dismiss de novo. Voiling v. Kurtz Paramedic Servs., Inc., 840 F.3d 378, 382 (7th Cir. 2016) (citation omitted). Federal Rule of Civil Procedure 12(b)(6) permits a motion to dismiss a complaint for failure to state a claim upon which relief can be granted. Fed. R. Civ. P. 12(b)(6). “To properly state a claim, a plaintiffs complaint must contain allegations that plausibly suggest that the plaintiff has a right to relief, raising that possibility above a speculative level.” Kubiak v. City of Chi., 810 F.3d 476, 480 (7th Cir.), cert. denied sub nom. Kubiak v. City of Chi., Ill., — U.S. -, 137 S.Ct. 491, 196 L.Ed.2d 402 (2016) (citation and internal quotation marks omitted). “We accept as true all of the well-pleaded facts in the complaint and draw all reasonable inferences in favor of [appellants].” Id. at 480-81 (citation omitted).

“[W]e are required to consider subject-matter jurisdiction as the first question in every case, and we must dismiss this suit if such jurisdiction is lacking.” Aljabri v. Holder, 745 F.3d 816, 818 (7th Cir. 2014) (citing Ill. v. City of Chi., 137 F.3d 474, 478 (7th Cir. 1998); Fed. R. Civ. P. 12(h)(3)). We conclude that, under the Rooker-Feldman doctrine, we have no jurisdiction here. See Rooker v. Fid. Tr. Co., 263 U.S. 413, 415-16, 44 S.Ct. 149, 68 L.Ed. 362 (1923); D.C. Cir. v. Feldman, 460 U.S. 462, 486, 103 S.Ct. 1303, 75 L.Ed.2d 206 (1983). Simply put:

Lower federal courts are not vested with appellate authority over state courts. The Rooker-Feldman doctrine prevents lower federal courts from exercising jurisdiction over cases brought by state court losers challenging state court judgments rendered before the district court proceedings commenced. The rationale for the doctrine is that no matter how wrong a state court judgment may be under federal law, only the Supreme Court of the United States has jurisdiction to review it.

Sykes v. Cook Cty. Cir. Ct. Prob. Div., 837 F.3d 736, 741-42 (7th Cir. 2016) (citations omitted); see also Kelley v. Med-1 Sols., LLC, 548 F.3d 600, 603 (7th Cir. 2008) (“A state litigant seeking review of a state court judgment must follow the appellate process through the state court system and then directly to the United States Supreme Court.”) (citation omitted). The initial inquiry, then, “is whether the federal plaintiff seeks to set aside a state court judgment or whether he is, in fact, presenting an independent claim.” Taylor v. Fed. Nat’l Mortg. Ass’n, 374 F.3d 529, 532 (7th Cir. 2004) (citation and internal quotation marks omitted). To make this determination, we ask whether the federal claims either “directly” challenge a state court judgment or are “inextricably intertwined” with one. Id.

Claims that directly seek to set aside a state court judgment are de facto appeals that are barred without further analysis. Id. But even federal claims that were not raised in state court, or that do not on their face require review of a state court’s decision, may still be subject to Rooker-Feldman if those claims are inextricably intertwined with a state court judgment. Sykes, 837 F.3d at 742 (citation omitted); see also Feldman, 460 U.S. at 482 n.16, 103 S.Ct. 1303. While the latter concept is a “somewhat metaphysical” one, the crucial point is whether the district court is essentially being called upon to review the state court decision. Taylor, 374 F.3d at 533 (citation and internal quotation marks omitted). Ultimately, the “determination hinges on whether the federal claim alleges that the injury was caused by the state court judgment, or alternatively, whether the federal claim alleges an independent prior injury that the state court failed to remedy.” Sykes, 837 F.3d at 742; see also Long v. Shorebank Dev. Corp., 182 F.3d 548, 555 (7th Cir. 1999). If we determine that a claim is inextricably intertwined with a state court judgment — that is, that the former indirectly seeks to set aside the latter — then we must determine whether the plaintiff had a reasonable opportunity to raise the issue in state court proceedings. Taylor, 374 F.3d at 533 (quoting Brokaw v. Weaver, 305 F.3d 660, 668 (7th Cir. 2002)). If so, the claim is barred.

Notably, the Rooker-Feldman doctrine is a narrow one. Lance v. Dennis, 546 U.S. 459, 464, 126 S.Ct. 1198, 163 L.Ed.2d 1059 (2006) (citing Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280, 284, 125 S.Ct. 1517, 161 L.Ed.2d 454 (2005)). “[F]ederal jurisdiction does not terminate automatically on the entry of judgment in a state court,” Sykes, 837 F.3d at 742 (citation omitted), as independent claims are jurisdictionally firm, Kelley, 548 F.3d at 603 (citation omitted). For a federal claim to be barred, “there must be no way for the injury complained of by [the] plaintiff to be separated from [the] state court judgment.” Sykes, 837 F.3d at 742 (citations omitted).

Jakupovic’s claims do not directly seek to set aside the state trial court’s judgments regarding his electronic-surveillance bond condition. Thus, we must determine whether his claims are inextricably intertwined with those judgments, and if so, whether he had a reasonable opportunity to raise these issues in state court proceedings.

A. Inextricably Intertwined

Jakupovic argues that the Rooker-Feldman doctrine does not bar his claims, because he does not challenge the state court’s judgments keeping him detained for lack of a Lake County residence. Instead, he stresses, he challenges defendants-appellees’ “procedure which forced the Plaintiff to unnecessarily be detained in jail for [six] days.” However, when “the injury is executed through a court order, there is no conceivable way to redress the wrong without overturning the order of a state court. Rooker-Feldman does not permit such an outcome.” Sykes, 837 F.3d at 743.

Kelley and Sykes are instructive. In Kelley, the plaintiff argued that it was not the state court’s award of attorney’s fees that caused his injury, but rather the attorneys’ preceding fraudulent misrepresentations. 548 F.3d at 605. We concluded, however, that the plaintiff’s claims were inextricably intertwined with the state court’s judgment, despite the fact that the allegedly unlawful actions occurred prior to that judgment, because “[w]e could not determine that defendants’ representations ... related to attorney fees violated the law without determining that the state court erred by issuing judgments granting the attorney fees.” Id. Similarly, in Sykes, the plaintiff asserted that her Americans with Disabilities Act claims were independent from the state judge’s order denying the plaintiffs motion for reasonable accommodations, because they focused on the state judge’s wrongful conduct — interrogating the plaintiff about her service dog and banning the dog from the courtroom. 837 F.3d at 742. Nevertheless, although the judge’s conduct preceded the order, we found that we lacked jurisdiction to hear the claims, because “[i]f the judge violated the ADA by engaging in impermissible questioning or wrongly banning [the dog] from her courtroom, those alleged violations were also the basis of her order.” Id. at 743.

Jakupovic’s claims meet the same fate. As alleged, defendants-appellees executed the state court’s bond condition and order, and detained Jakupovic for six days. To find defendants-appellees’ conduct unlawful, we would have to determine that the state court erred in keeping Jakupovic detained for lacking a Lake County residence. As such, Jakupovic’s claims are inextricably intertwined with the state court’s judgments.

Jakupovic’s reliance on Burke v. Johnston, 452 F.3d 665 (7th Cir. 2006), is misplaced. There, the state court denied the plaintiff jail credit that he believed he was owed; but he did not challenge this decision, as he ultimately got the credit he sought by raising the issue with the state’s department of corrections. Id. at 668. The plaintiff instead filed a federal lawsuit against Department-of-Corrections officials for allegedly taking too long to administratively grant the plaintiff his credit. Id. That issue was neither presented to nor decided by the state court, so the plaintiffs claim was not inextricably intertwined with any state court judgment. Id. Thus, we concluded, Rooker-Feldman presented no jurisdictional bar. Id. Here, unlike in Burke, the argument Jakupovic now presents is in essence what he argued below: The residence requirement may lead to indefinite detention. And the state court rejected this argument; so defendants-appellees executed the state court’s bond condition and order and kept Jakupo-vic detained. Although Jakupovic alleges that defendants-appellees detained him under their own residence “policy,” we cannot find that policy unconstitutional without also concluding that the state court’s judgments, ordering the same residence requirement and detainment, were unlawful. See Kelley, 548 F.3d at 605. So Jakupo-vic’s claims and the state court’s judgments are inextricably intertwined.

B. Reasonable Opportunity to Raise in State Court

Although Jakupovic’s claims are inextricably intertwined with the state court’s judgments, the claims are barred under Rooker-Feldman only if he had a reasonable opportunity to raise the issues in state court proceedings. See Taylor, 374 F.3d at 534-35; see also Kelley, 548 F.3d at 605-06. “The ‘reasonable opportunity’ inquiry focuses not on ripeness, but on difficulties caused by ‘factor[s] independent of the actions of the opposing parties] that precluded’ a plaintiff from bringing federal claims in state court, such as state court rules or procedures.” Taylor, 374 F.3d at 534-35 (quoting Long, 182 F.3d at 558).

Jakupovic had at least three opportunities to raise in state court the issues he now raises on appeal. First, he filed an emergency motion challenging the state court’s bond condition, alleging that it. could lead to indefinite custody. The court denied that motion. Second, Jakupo-vic asked the state court to reconsider its ruling on the bond condition, but the court denied that motion, too, and explicitly ordered that Jakupovic continue to be detained because he did not have a Lake County residence. Finally, Jakupovic filed a motion to modify his bond conditions, and the state court scheduled a hearing for one week later, on November 25; before the hearing, however, Jakupovic pled guilty. That Jakupovic had a reasonable opportunity to present to the state court claims that are inextricably intertwined with that court’s judgments deprives us of subject-matter jurisdiction.

C. Dismissal Without Prejudice

The district court dismissed Jaku-povic’s claims with prejudice. Because we conclude that Jakupovic’s claims are juris-dictionally barred under Rooker-Feldman, the complaint should be dismissed without prejudice. See Frederiksen v. City of Lockport, 384 F.3d 437, 438-39 (7th Cir. 2004) (“When the Rooker-Feldman doctrine applies, there is only one proper disposition: dismissal for lack of federal jurisdiction. A jurisdictional disposition is conclusive on the jurisdictional question: the plaintiff cannot re-file in federal court. But it is without prejudice on the merits, which are open to review in state court to the extent the state’s law of preclusion permits.” (citing T.W. v. Brophy, 124 F.3d 893, 898 (7th Cir. 1997))).

III. Conclusion

For the foregoing reasons, we Vacate the judgment of the district court and Remand with instructions to dismiss Jaku-povic’s claims without prejudice for lack of subject-matter jurisdiction.