text:
    Gayle LINKLETTER, Plaintiff-Appellant, v. WESTERN & SOUTHERN FINANCIAL GROUP, INC.; Kim Chiodi, Defendants-Appellees.
    No. 16-3265
    United States Court of Appeals, Sixth Circuit.
    Argued: January 24, 2017
    Decided and Filed: March 23, 2017
    Rehearing En Banc Denied May 16, 2017

      ARGUED: Ted L. Wills, Cincinnati, Ohio, for Appellant. Deborah S.. Adams, FROST BROWN TODD LLC, Cincinnati, Ohio, for Appellees. ON BRIEF: Ted L. Wills, Cincinnati, Ohio, Jennifer L. Branch, GERHARDSTEIN & BRANCH CO. LPA, Cincinnati, Ohio, for Appellant. Deborah S. Adams, Neal Shah, FROST BROWN TODD LLC, Cincinnati, Ohio, for Appellees.
    Before: MERRÍTT, CLAY, and DONALD, Circuit Judges.
   OPINION

MERRITT, Circuit Judge.

In this Fair Housing Act case that was dismissed for failure to state a valid claim, the plaintiff, Gayle Linkletter, signed an online petition supporting a Cincinnati women’s shelter, the Anna Louise Inn, after she had accepted a position with the defendant, Western & Southern. Western & Southern rescinded its employment agreement with Linkletter because she signed the petition while the company was engaged in a lengthy real estate dispute with the women’s shelter over its location in the neighborhood. Residents of the shelter had previously sued Western & Southern in federal court under the Fair Housing Act, particularly 42 U.S.C. § 3617. As a result of that earlier litigation, Western & Southern reached a settlement with the shelter and purchased the property. After Linkletter’s employment contract was rescinded she sued Western & Southern and its employee, Kim Chiodi, under § 3617 and the state analog in the Ohio Civil Rights Act. Section 3617 states in the part relevant to this case as follows:

It shall be unlawful to ... interfere with any person ... on account of his having aided or encouraged any other person in the exercise or enjoyment of, any right granted or protected by section 3603, 3604, 3605, or 3606 of this title.

42 U.S.C. § 3617. Specifically, Linkletter claims her petition-signing encouraged the residents of the women’s shelter in their rights granted by § 3604, involving discrimination in the rental or sale of housing:

[I]t shall be unlawful ... (a) To refuse to sell or rent ... or to refuse to negotiate for the sale or rental of, or otherwise make' unavailable or deny, a dwelling to any person because of ... sex.... (b) To discriminate ... in the provision of services or facilities in connection therewith, because of ... sex.... (c) To make, print, or publish ... any notice, statement, or advertisement, with respect to the sale or rental of a dwelling that indicates any preference, limitation, or discrimination based on ... sex.... (d) To represent to any person because of ... sex ... that any dwelling is not available for inspection, sale, or rental when such dwelling is in fact so available .... (e) For profit, to induce or attempt to induce any person to sell or rent any dwelling by representations regarding the entry or prospective entry into the neighborhood of a person or persons of a particular ... sex....

42 U.S.C. § 3604(a)-(e).

We conclude that Linkletter presents a plausible claim for relief. Taking the facts in a light most favorable to the non-moving party, Linkletter’s petition-signing supporting the shelter fits within the meaning of the phrase “aided or encouraged” and the defendants’ rescission of their employment agreement constitutes an “interference” with that encouragement. Accordingly, the district court was in error when it granted the defendants’ motion to dismiss, and we reverse the judgment'.

I. Background

Western & Southern Financial Group, Inc. is an insurance company located in the Lytle Park neighborhood of Cincinnati, Ohio. Between 1997 and 2006, Linkletter worked as an employee of Western & Southern. The parties ended the first employment relationship amicably. In May 2014, Linkletter’s former colleague at Western & Southern contacted her about a job opportunity at the company as a Senior Corporate Communications specialist. After several interviews, Linkletter accepted the position.

On September 8, 2014, before Linkletter began working, Western & Southern’s Senior Vice President of Human Resources, Kim Chiodi, called Linkletter to notify her that Western & Southern had rescinded the employment offer. Linklet-ter claims that Chiodi justified the rescission due to Linkletter having taken “a position that was contrary to Western & Southern.” Specifically, Chiodi mentioned Linkletter’s support for the Anna Louise Inn.

Western & Southern had been in a controversial real estate dispute with the Anna Louise Inn women’s shelter since 2011. See Cooper v. Western & Southern Financial Group, Inc., 847 F.Supp.2d 1031, 1032-33 (S.D. Ohio 2012). The shelter, whose mission is “to provide women with safe, decent, and affordable housing, without regard to their economic condition, race, or lack of employment,” was located in Lytle Park, the same neighborhood as Western & Southern. Id. at 1033. The residents of the shelter accused Western & Southern of violating the Fair Housing Act and the Ohio Civil Rights Act by attempting to illegally pressure them out of the neighborhood. The presence of the shelter interfered with Western & Southern’s “master plan for [that] end of town,” and the company was frustrated in attempting to buy the land where the shelter stood. In December 2010, the president of the company that controls Western & Southern’s real estate holdings sent a letter to Cincinnati’s mayor, arguing that the shelter was “not appropriate for the Lytle Park neighborhood” and objecting to “85 low-income permanent housing units for women” and “housing for up to 25 recovering prostitutes.”

After the shelter refused to sell, Western & Southern engaged in a campaign to force a sale of the property and get the Anna Louise Inn out of the neighborhood, and the shelter’s residents sued. When Western & Southern filed a motion to dismiss the complaint pursuant to Fed. R. Civ. P. 12(b)(6), the district court denied the motion, stating that the residents had sufficiently pled the elements of a § 3617 claim. Cooper, 847 F.Supp.2d at 1040. In its decision, the district court cited allegations that Western & Southern pursued frivolous appeals of zoning decisions affecting the renovation of the Inn, photographed residents of the shelter without their permission, and falsely accused residents of engaging in criminal activity and other inappropriate behavior. Id. at 1039. The court found that “[t]hese actions could be construed as intimidating, harassing, and threatening to the residents of the Inn.... In addition, plaintiffs allege facts that, if accepted as true, are sufficient to support a finding that Western & Southern has exercised its powers with a discriminatory animus.” Id. The parties eventually reached a settlement in which Western & Southern bought the property and removed the shelter from the Lytle Park neighborhood, and the suit was dismissed.

On February 21, 2012, while the dispute between the shelter and Western & Southern was ongoing, Linkletter signed a petition expressing support for the shelter. The petition was titled, “The Anna Louise Inn has my Support!” and the text stated, “I support the mission of the Anna Louise Inn, which has provided safe and affordable housing for women for 102 years in its current location.” As a signor, Linkletter also stated that she appreciated “that women in Cincinnati have an option for permanent supportive housing,” and that “[the] Anna Louise Inn should remain where it is and continue its mission of providing safe and affordable housing for single women.” The Inn posted the petition online with the names of the signors, including Linkletter.

After the termination of her employment contract in 2014, Linkletter sued Western & Southern and its employee, Kim Chipdi. At the district court, Linkletter claimed that the rescission of her contract in response to her supporting the housing rights of the Inn’s female residents violated § 3617 of the Fair Housing Act. Linkletter argued that by rescinding the contract, the defendants interfered with her employment because she encouraged the women of the Anna Louise Inn in the exercise of their rights under §§ 3603-06. Specifically Linkletter claimed she encouraged the rights in § 3604(a)-(e) pertaining to anti-discrimination in the rental or sale of housing. 42 U.S.C. § 3604. The provision Linkletter sued under, Section 3617, protects individuals who “aided or encouraged” the rights protected by § 3604. 42 U.S.C. § 3617.

The defendants moved to dismiss the complaint pursuant to Fed. R. Civ. P. 12(b)(6). The district court granted the motion, finding that Linkletter did not state a claim for relief. Without engaging in a trial or a fact-finding process, the district court agreed with the defendants that Linkletter did not “aid or encourage” the women of the Anna Louise Inn as contemplated by the statute, that the housing rights protected by § 3604 were not at issue, and that the defendants as “non-houser employers” did not fall within the scope of the statute.

The district court also dismissed Link-letter’s Ohio Civil Rights Act claims under O.R.C. § 4112.02(H)(12) and O.R.C. § 4112.02(1). The language in O.R.C. § 4112.02(H)(12) is nearly identical to the federal statute, and the district court dismissed the § 4112.02(H)(12) claim for the same reasons it articulated while analyzing the federal Fair Housing Act. The district court’s dismissal of Linkletter’s claim under O.R.C. § 4112.02(1) appears in a footnote, holding that Linkletter never established she engaged in activity protected under the statute. See Linkletter v. Western & Southern Financial Group, Inc., No. 1:15-cv-162, 2016 WL 659136 at *n.7 (S.D. Ohio Feb. 18, 2016).

Linkletter now appeals, demanding damages, reinstatement to employment with Western & Southern, and a declaration that Western & Southern utilized an illegal employment screening practice by disqualifying potential employees that advocate for the Fair Housing Act and the Ohio Civil Rights Act.

II. Standard of Review

We review a district court’s grant of a motion to dismiss de novo. Winget v. JP Morgan Chase Bank, N.A., 537 F.3d 565, 572 (6th Cir. 2008). When reviewing the decision to grant a Fed. R. Civ. P. 12(b)(6) motion, we accept the facts in the light most favorable to the non-moving party, taking all well-pleaded factual allegations as true. Gunasekera v. Irwin, 551 F.3d 461, 466 (6th Cir. 2009). The plaintiff must plead sufficient facts to state a claim to relief that is plausible on its face. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). A plausible claim “pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009).

III. Fair Housing Act

The purpose of the Fair Housing Act is “to provide, within constitutional limitations, for fair housing throughout the United States.” 42 U.S.C. § 3601. To that end, the Act prohibits discrimination against “any person because of race, color, religion, sex, familial status, or national origin” in the rental or sale of housing. 42 U.S.C. § 3604(a). In keeping with the law’s overarching purpose, 42 U.S.C. § 3617 protects plaintiffs who “aided or encouraged” the housing rights enumerated in the statute. Id. Essentially, § 3617 allows a plaintiff to step into the shoes of the victims of certain types of housing discrimination when the plaintiff faces retribution for providing encouragement to the victims. As part of a remedial statute, the language of § 3617 should be broadly interpreted and applied with the Fair Housing Act’s purpose in mind. See Mich. Prot. and Advocacy Serv., Inc. v. Babin, 18 F.3d 337, 347 (6th Cir. 1994); see also Trafficante v. Metropolitan Life Ins. Co., 409 U.S. 205, 209, 93 S.Ct. 364, 34 L.Ed.2d 415 (1972), abrogated on other grounds by Thompson v. N. Am. Stainless, LP, 562 U.S. 170, 131 S.Ct. 863, 178 L.Ed.2d 694 (2011). (“The language of the Act is broad and inclusive.”).

“The plain meaning of legislation should be conclusive, except in the ‘rare cases [in which] the literal application of a statute will produce a result demonstrably at odds with the intentions of the drafters.’ ” United States v. Ron Pair Enters., Inc., 489 U.S. 235, 242, 109 S.Ct. 1026, 103 L.Ed.2d 290 (1989) (quoting Griffin v. Oceanic Contractors, Inc., 458 U.S. 564, 571, 102 S.Ct. 3245, 73 L.Ed.2d 973 (1982)). Linkletter claims that by signing a petition she “encouraged” women to pursue their right to- be free from sex discrimination in the rental or sale of housing under § 3604, and that the defendants illegally retaliated by “interfering” with her employment. She does not accuse them of discriminating against her or illegally interfering with her housing rights. Rather, she claims that the defendants interfered with her employment because she aided or encouraged women in the exercise of their housing rights under § 3604.

A. “Interfere with”

The rescission of an employment contract can qualify as “interference” within the meaning of the statute. See Walker v. City of Lakewood, 272 F.3d 1114, 1128-30 (9th Cir. 2001) (explaining that interference refers to “hampering an activity or process” including frustrating the renewal of employment contracts). The complaint states that Linkletter and Western & Southern reached an employment agreement. After Linkletter accepted the job, Western & Southern’s employee Chiodi terminated that employment agreement. It would be an understatement to say that the defendants’ actions “hampered” Link-letter’s employment process. See id. The defendants’ interference left Linkletter with a distinct and palpable injury. See Havens Realty Corp. v. Coleman, 455 U.S. 363, 372, 102 S.Ct. 1114, 71 L.Ed.2d 214 (1982).

The Department of Housing and Urban Development has also interpreted the Fair Housing Act in a manner consistent with the proposition that “interference” can refer to employment disputes. It is illegal to “[t]hreaten[ ] an employee or agent with dismissal or an adverse employment action, or [to] tak[e] such adverse employment action, for any effort to assist a person seeking access to the sale or rental of a dwelling or seeking access to any residential real estate-related transaction, because of the ... sex ... of that person....” 24 C.F.R. § 100.400(c)(3).

Moreover, the language “interfere with” should be broadly interpreted to reach all practices which have the effect of interfering with housing rights. See Babin, 18 F.3d at 347 (citing United States v. Am. Inst. of Real Estate Appraisers, 442 F.Supp. 1072, 1079 (N.D. Ill. 1977)). Therefore the scope of the statute extends to employers who cancel contracts in retaliation for Fair Housing Act advocacy. See Walker, 272 F.3d at 1126. As the interference alleged in the present case fits this description, it appears to be covered by the statute.

B. “Aided or Encouraged”

To qualify for a § 3617 claim, a defendant’s “interference” must still be in retaliation for a plaintiff having “aided or encouraged” another’s enjoyment of the housing rights protected by §§ 3603-06. 42 U.S.C. § 3617. Linkletter’s action, signing a petition, is seemingly innocuous. However the language and timing of the petition demonstrate that it existed to encourage the women to remain in their residence in opposition to the alleged discrimination by Western & Southern. The defendants point out that the petition did not specifically mention Western & Southern. But while the petition did not explicitly mention the dispute with Western & Southern, the context suggests that the litigation with Western & Southern was the basis for the petition. The petition supported keeping the shelter at the “current location” in “Lytle Park,” and that “[the] Anna Louise Inn should remain where it is and continue its mission of providing safe and affordable housing for single women.” For purposes of analyzing the defendants’ motion to dismiss, the court should assume that Link-letter signed the petition to “encourage” the women in their dispute with Western & Southern.

The district court noted that this act of encouragement by Linkletter is minor comparatively speaking. See Linkletter, 2016 WL 659136 at *5. However, the defendants fail to explain why a petition-signing is not encouragement beyond vague assertions that the action lacks “concreteness” or “directness.” The allegations in the complaint show that the action was concrete and important enough to alert Linkletter’s future employer to her public support, and result in her termination. If the encouragement.is sufficiently concrete to lead to an individual’s firing, it is sufficiently concrete to state a plausible claim.

Looking to the “structure, history, and purpose” of the statute, Abramski v. United States, — U.S. -, 134 S.Ct. 2259, 2267, 189 L.Ed.2d 262 (2014), section 3617 was meant to protect assistance and advocacy for Fair Housing Act rights. A plain-meaning understanding of the word “encouraged” clearly covers the act of signing a petition advocating support for a women’s shelter. Therefore, interpreting “encouraged” to include ’Linkletter’s action is in keeping with both the plain meaning of the word and the overall purpose of the Fair Housing Act. See Ron Pair Enters., Inc., 489 U.S. at 241-42, 109 S.Ct. 1026.

C. Nexus to 42 U.S.C. § 3604

Section 3617 requires a nexus with the rights protected by §§ 3603-06, without requiring an actual violation of the underlying provisions. See Hidden Village, LLC v. City of Lakewood, Ohio, 734 F.3d 519, 528 (6th Cir. 2013). In the present case, Linkletter claims her signing the petition implicated the rights of women against discrimination in the rental or sale of housing under § 3604. The litigation between the women’s shelter and Western & Southern is well documented in the Cooper case, which described the housing dispute that motivated Linkletter’s petition-signing. 847 F.Supp.2d at 1039-40. Just as the female residents of the Anna Louise Inn in the Cooper case stated a plausible § 3617 claim for relief based on their own § 3604 rights, so too Linkletter states a plausible claim for relief in facing retaliation for encouraging those rights. See id. at 1040 (finding the shelter’s residents had “alleged facts from which the Court may plausibly infer that Western & Southern is in a position directly to disrupt [the residents’] federally-protected rights to reside at the Inn ... and that Western & Southern ha[d] exercised its powers with a discriminatory animus.”).

The defendants argue that even if they fired Linkletter because she signed the petition, Western & Southern’s motivation in the underlying dispute with the women’s shelter was motivated by economics rather than by sex discrimination. In the past the Sixth Circuit has required a showing of “discriminatory animus” for § 3617 claims. See Babin, 18 F.3d at 347. Discriminatory animus requires plaintiffs “to put forth ‘some evidence of discriminatory effect or intent on the [defendant’s] part.’ ” to survive summary judgment. Campbell v. Robb, 162 Fed.Appx. 460, 474 (6th Cir. 2006) (citing Babin, 18 F.3d at 347) (emphasis added).

Western & Southern’s actions against the shelter as alleged in the complaint only affected one class of people— women. The defendants assert that the motivation for attempting to remove the shelter from the neighborhood was “economic,” not “sex,” and that financial motives exclude the case from the type of sex discrimination forbidden by the Fair Housing Act. But a violation of the Fair Housing Act can be shown either by proof of discriminatory animus or by proof of disparate impact or effect. See Inclusive Cmtys. Project, Inc. v. Tex. Dept. of Hous. and Cmty. Affairs, 747 F.3d 275, 280 (5th Cir. 2014). The existence of economic (or religious or moral) motivations does not protect the defendants from housing discrimination claims when their actions had a clear discriminatory effect. Economic motivation does not cleanse discrimination. The facts alleged by Linkletter, and detailed in the underlying Cooper case, are sufficient to state a valid claim that Western & Southern discriminated against the women of the shelter. See 847 F.Supp.2d at 1039-40.

There is also no requirement in § 3617 that the defendant-employer here operate the housing facility at issue to violate the statute. See Farmer v. City of Cincinnati, No. 1:04-CV-080, 2006 WL 3762131 at *8 (S.D. Ohio Dec. 21, 2006) (Fair Housing Act claims can go forward against non-housers where they, “though not owners or agents, are in a position directly to deny a member of a protected group housing rights.” (quoting Babin, 18 F.3d at 344)). Section 3617 requires only that the plaintiff “encourage” a housing right protected by § 3604 and face retaliatory “interference” for the encouragement. See Hidden Village, LLC, 734 F.3d at 528-29 (“[Defendant] threatened [plaintiff] because [plaintiff] had encouraged [victim] to protect himself against discrimination relating to housing. The statute requires no more.”). According to the complaint in the present case, the defendants sought to remove housing designated for a protected class from the neighborhood. As a non-houser that has allegedly denied housing rights to women, Western & Southern falls within the scope of the Fair Housing Act.

Taking the complaint in the light most favorable to the plaintiff, we do not agree with the district court that the petition-signing did not sufficiently implicate opposition to housing discrimination. A factfin-der could conclude that through the campaign against the shelter, Western & Southern interfered with housing rights under § 3604, and that Linkletter encouraged those same rights under § 3617. Accordingly, Linkletter states a plausible claim for relief under the Fair Housing Act, and her claim should not have been dismissed.

IV. Ohio Civil Rights Act

Linkletter also appeals the district court dismissal of her state claims. O.R.C. § 4112.02(H)(12); O.R.C. § 4112.02(1). The Ohio Civil Rights Act- contains a provision that mirrors the federal Fair Housing Act, making it unlawful to “[c]oerce, intimidate, threaten, or interfere with any person ... on account of that person’s having exercised or enjoyed or having aided or encouraged any other person in the exercise or enjoyment of, any right granted or protected by division (H) of this section[.]” O.R.C. § 4112.02(H)(12). The statute also contains a provision that specifically outlaws retaliation for opposition to unlawful discrimination. O.R.C. § 4112.02(1). On appeal, neither Linkletter nor the defendants distinguish arguments on the federal claim from the state claims. In granting the motion to dismiss, the district court cited Ohio Civil Rights Comm’n v. Harlett for the proposition that “[w]hen interpreting O.R.C. Chapter 4112, Ohio courts have looked to analogous federal statutes and case law for guidance.” 132 Ohio App.3d 341, 724 N.E.2d 1242, 1244 (1999). Consequently, the dismissal of Linldetter’s state claims is reversed in accordance with the reversal of her federal Fair Housing Act claim.

The judgment of the district court is REVERSED, and we REMAND the case for further proceedings.

      . Section 3617 reads in full: "It shall be unlawful to coerce, intimidate, threaten, or interfere with any person in the exercise or enjoyment of, or on account of his having exercised or enjoyed, or on account of his having aided or encouraged any other person in the exercise or enjoyment of, any right granted by section 3603, 3604, 3605, or 3606 of this title.” 42 U.S.C. § 3617.

      . At the district court and in her brief, Link-letter highlights more than just her petition-signing as evidence of her "public support” for the Anna Louise women. Linkletter believes that the § 3617 analysis should include her annual financial contributions to the Inn and an incident when she thanked a man on the street who was holding a sign in support of the Inn. There is no specific allegation that the defendants were aware of these actions, even accepting the facts pled in a light most favorable to the plaintiff. Since Linkletter fails to explain why these other actions should be included in the analysis, they will not be considered.

      . The subsections of division (H) in O.R.C. § 4112.02 generally involve discrimination in the rental or sale of housing.

      . O.R.C. § 4112.02(1) makes it an unlawful "[flor any person to discriminate in any manner against any other person because that person has opposed any unlawful discriminatory practice defined in [§ 4112.02].”


source: Caselaw Access Project

author: HAMILTON, Circuit Judge.

license: Public Domain

text:
    ESTATE OF William J. BURFORD, Plaintiff-Appellant, v. ACCOUNTING PRACTICE SALES, INC. and Gary L. Holmes, Defendants-Appellees.
    No. 16-1871
    United States Court of Appeals, Seventh Circuit.
    Argued January 12, 2017
    Decided March 13, 2017

      David Patrick Hall, Attorney, Springfield, IL, for Plaintiff-Appellant.
    John F. Grady, Attorney, Grady Bell LLP, Chicago, IL, for Defendants-Appel-lees.
    Before BAUER, SYKES, and HAMILTON, Circuit Judges.
   HAMILTON, Circuit Judge.

Defendant Accounting Practice Sales (APS) terminated its brokerage contract with William Burford after he failed, in his exclusive territory for APS, to meet his minimum yearly sales volume for four consecutive years. Burford sued. APS defended on the grounds that Burford failed to meet his sales requirement and that his contract was terminable at will. The case was tried after an earlier appeal in the case, and the jury ruled in favor of APS. While this appeal by Burford was pending, he passed away. His estate has carried on the appeal, arguing that the district court erred by permitting APS to defend on the basis of Burford’s'failure to meet his sales volume requirement, by refusing to admit an exhibit, and by refusing to order a new trial on the theory that the jury verdict was contrary to the weight of the evidence as to whether APS waived its right to terminate the contract. None of these arguments warrants a new trial. We affirm the judgment of the district court in favor of APS.

I. Factual and Procedural Background

Defendant APS acts as a broker for the purchase and sale of accounting practices. APS works through brokers who are treated as independent contractors and are assigned exclusive sales territories for APS. The brokers and APS share commissions for successful sales. Plaintiff Burford became a broker for APS in 2003, and over the next several years, he and APS agreed to add additional states as part of his exclusive territory. Burford’s contract included a “minimum yearly sales volume” requirement. On appeal, the parties do not dispute that Burford did not meet this requirement for four consecutive years.

In March 2010, APS owner Gary Holmes spoke with Burford about his poor performance. Burford acknowledged that he needed to improve, but he failed to meet his minimum yearly sales volume requirements again in 2010 and 2011. In 2012, APS terminated Burford’s contract and reassigned his sales territory.

Burford brought suit in an Illinois state court, claiming that APS breached his contract by terminating it without the required good cause. He also sought to pierce the corporate veil to hold Holmes personally liable for the breach. The district court granted summary judgment in favor of the defendants on the theory that Burford’s contract with APS was terminable at will. In the earlier appeal, we reversed on that point, finding that the contract’s provision that “APS cannot terminate this agreement unless it is violated by Burford” meant that the contract was not terminable at will. Burford v. Accounting Practice Sales, Inc., 786 F.3d 582, 587-88 (7th Cir. 2015). We remanded for trial on the contract claim. The jury found for APS, and the district court entered judgment on the verdict.

On appeal, Burford raises three issues. First, he claims that the trial court erred by supposedly allowing APS to change the legal theory for its defense in violation of the “mend-the-hold” doctrine in Illinois law. Second, Burford argues that the district court abused its discretion by denying admission of an exhibit. Third, he claims that the jury’s verdict was contrary to the weight of the evidence on whether APS waived its right to enforce the minimum sales requirement.

II. Analysis

A. “Mend the Hold”

Burford’s first argument on appeal is that APS should not have been allowed to assert its defense that it terminated Burford’s contract for good cause since he had missed his minimum sales requirements for several years. Burford’s theory is a variation of the “mend-the-hold” doctrine in Illinois law. That doctrine, which takes its name from a nineteenth-century wrestling phrase, is less a set of rules than a flexible concept of equity. It prevents one party to litigation, especially in contract disputes, from trying to change its position or theories at such a late stage in the dispute as to cause unfair prejudice to the opposing party. See Harbor Ins. Co. v. Continental Bank Corp., 922 F.2d 357, 362 (7th Cir. 1990) (“[W]here a party gives a reason for his conduct and decision touching any thing involved in a controversy, he cannot, after litigation has begun, change his ground, and put his conduct upon another and a different consideration. He is not permitted thus to mend his hold.”), quoting Ohio & Mississippi Railway Co. v. McCarthy, 96 U.S. 258, 267-68, 24 L.Ed. 693 (1877); see also Ryerson Inc. v. Federal Ins. Co., 676 F.3d 610, 614 (7th Cir. 2012) (collecting cases); Horwitz-Matthews, Inc. v. City of Chicago, 78 F.3d 1248, 1251 (7th Cir. 1996); FHP Tectonics Corp. v. American Home Assurance Co., 404 Ill.Dec. 816, 57 N.E.3d 575, 587-88 (2016) (declining to apply doctrine in absence of unfair surprise or arbitrariness). The doctrine seems to correlate fairly closely to federal courts’ approach to efforts to amend pleadings under Federal Rule of Civil Procedure 15. The doctrine also lies close to the boundary between matters of substance and procedure for purposes of Erie Railroad Co. v. Tompkins. See Harbor Insurance, 922 F.2d at 363-65.

Whatever the scope of the mend-the-hold doctrine, and whether it is procedural or substantive, it does not help Burford in this case. From its earliest discovery responses, APS advanced two central arguments in defense: first, it terminated Bur-ford’s contract for good cause because he failed to meet his minimum yearly sales volume, and second, the agreement was terminable at will. Dkt. No. 129, Ex. 1 at 4 (response to interrogatories).

Burford bases his mend-the-hold argument on the strategy APS pursued, but that strategy was perfectly reasonable and not unfair in any way to Burford. It is easy to imagine that a motion for summary judgment based on Burford’s failure to meet his sales volume requirements could quickly bog down in disputes about accounting, waiver, and competing equities. APS chose instead to move for summary judgment on the narrow ground that its contract with Burford was terminable at will. There was nothing unfair or unsound about that strategic choice, and the district court granted summary judgment for APS on that basis. We reversed in the earlier appeal, holding that the contract was not terminable at will. Burford, 786 F.3d at 588.

It is not unusual or unfair for a defendant who believes he has a solid legal defense to assert that defense first in a Rule 12(b)(6) motion or summary judgment motion in the hope of winning an early and relatively inexpensive victory. Filing either sort of motion simply does not waive other defenses that may be available to that party. (Consider for a moment the consequences of a contrary ruling on that point, treating as waived a substantive defense that the defendant did not include in a summary judgment motion. That rule would create powerful incentives for defendants to load up summary judgment motions with all of their defenses, including theories that would have no hope on summary judgment even though they might be winners at trial. Imagine the costs and burdens for civil litigation, in return for no apparent benefit. And Rule 56 has no such waiver rule, as compared to Rule 12(h).)

In the trial after remand, APS pursued its alternative, more fact-centered defense, arguing that it had good cause to terminate the contract because Burford had failed for several years to meet his minimum yearly sales volume. Burford attempted to block this route, arguing in a motion in limine that APS could not assert any defense other than the terminable-at-will, defense without violating the “mend-the-hold” doctrine. The district court denied that motion. Burford’s claim went to trial, and the jury returned a verdict in favor of APS.

Even the most aggressive versions of the mend-the-hold doctrine would not block APS from proving it had good cause to terminate Burford’s contract. APS did not change its defense.- APS maintained two defense theories from the start, and they are not inconsistent with each other (though a party is allowed to pursue even inconsistent theories for its claims or defenses, see Fed. R. Civ. P. 8(d)). In addition, there was no prejudice to Burford, who was not surprised by APS’s argument that it terminated him for cause. See Dkt. No. 73 at 3 (transcript from Nov. 1, 2013 pretrial conference where Burford’s counsel identified cause to terminate as a key issue); see also Ryerson Inc., 676 F.3d at 614 (“When there is no prejudice to the opposing party, invoking the doctrine of mend the hold to bar a valid defense is overkill.”). The district court did not err by allowing APS to defend its termination for cause.

B. Trial Exhibit IS

Burford next argues that the district court erred when it did not admit his Exhibit 13, which was a document that Gary Holmes sent to APS brokers in 2010 to answer frequently asked questions about APS’s proposed transition into a franchise operation. One answer in the document said: “There will be a minimum production requirement. This has been discussed but never really enforced. But it is time that territories all be productive. This will not affect all brokers but will some.” While Burford had rejected APS’s franchise overtures, he argues the document was nonetheless relevant to show that APS had waived its right to enforce its minimum yearly sales requirement. We review such an evidentiary ruling only for abuse of discretion. Morgan v. City of Chicago, 822 F.3d 317, 338 (7th Cir. 2016).

The district court did not abuse its discretion by denying admission of Exhibit 13. Federal Rule of Evidence 403 provides: “The court may exclude relevant evidence if its probative value is substantially outweighed by a danger of ... undue delay, wasting time, or needlessly presenting cumulative evidence.” While Exhibit 13 may have been relevant, its exclusion was not an abuse of discretion because it would have been needlessly cumulative.

Burford sought to introduce Exhibit 13 to prove that APS had not previously enforced the minimum sales volume requirement in his contract. His theory was that APS had waived its right to terminate for such failures. Burford argued that Exhibit 13 “related only to what APS had admittedly done previously in not enforcing any minimum production requirement.” However, this point was not in real dispute. The issue at trial was not whether APS had enforced the minimum yearly sales volume in the past; it clearly had not. Gary Holmes himself readily testified to this effect. The real dispute at trial was whether APS’s earlier failure to enforce the sales requirement amounted to an implicit waiver of its right to enforce the sales requirement later.

Burford himself acknowledged that APS’s past non-enforcement was well established at trial: “there was ample and conclusive testimony at trial to establish that APS had waived the minimum yearly sales volume.” Whether the earlier failure to enforce minimum sales requirements amounted to a waiver was controversial, but not the point from Exhibit 13 that the requirements had not been enforced in the past. Since this point was already established, it was not unreasonable for the court to exclude Exhibit 13 as cumulative under Rule 403, and Burford’s substantial rights were not affected by the exclusion. See Fed. R. Civ. P. 61.

C. Sufficiency of the Evidence

Finally, Burford argues that the jury’s verdict was contrary to the weight of the evidence because there was “overwhelming and indisputable evidence of waiver.” Waiver is “the intentional relinquishment of a known right, [and it] can arise either expressly or by conduct inconsistent with an intent to enforce the right.” Wald v. Chicago Shippers Ass’n, 176 Ill.App.3d 607, 125 Ill.Dec. 62, 529 N.E.2d 1138, 1147 (1988) (Illinois contract law). Burford sought to establish waiver by showing that APS could have terminated him sooner but did not do so.

We review for abuse of discretion the district court’s ruling on a Rule 59 motion for a new trial. Davis v. Wisconsin Dep’t of Corrections, 445 F.3d 971, 979 (7th Cir. 2006), citing Latino v. Kaizer, 58 F.3d 310, 314 (7th Cir. 1995). A new trial should be granted “only when the record shows that the jury’s verdict resulted in a miscarriage of justice or where the verdict, on the record, cries out to be overturned or shocks our conscience.” Id., citing Latino, 58 F.3d at 314.

There was sufficient evidence here for the jury to find that APS did not waive its right to terminate Burford. The contract gave APS the option to terminate its contract with Burford if he failed to meet certain thresholds. It did not require APS to fire Burford in such instances. When we last considered this contract, we said: “APS could terminate the contract only if Burford violated it. There is a decisive difference between saying that A may terminate if B breaches and saying that A may terminate only if B breaches.” Bur- ford, 786 F.3d at 587. At that point, we made this distinction to show that APS could fire Burford only for cause, not at will.

Those same terms in the contract illustrate a different but equally valid point: saying that A may terminate if B breaches does not mean A must do so immediately or else lose forever the right to terminate. Adopting Burford’s theory of this contract would lead to perverse results. In any case of material breach, the non-breaching party would need to terminate the contract promptly or forever waive the right to terminate. Such a draconian approach would destabilize commercial relationships where breaches may be tolerated for a host of reasons, from the difficulty in finding substitutes to recognizing headwinds from macroeconomic troubles, or to humane reasons like excusing Burford’s failure to record any sales in a year when he had serious health problems.

At trial, APS’s Holmes testified to such reasons. He said he did not terminate Burford’s contract earlier because he “wanted to be fair”, and wanted “to give him a chance” to improve his performance. Holmes noted that Burford had received surgery in one year, and that 2008 was a bad economic time for everyone. During another year, Burford was involved in a lawsuit, which had evidently taken up much of his time. For these reasons, Holmes testified, APS gave Burford multiple chances to improve his performance. When Burford continued to struggle, Holmes ultimately had a “heart-to-heart” with him in 2010 before terminating his contract at the beginning of 2012. The jury was not required to accept APS’s explana-, tion, but given this and other evidence offered at trial, the jury’s verdict that APS had not waived its right to terminate Bur-ford was certainly not contrary to the weight of the evidence.

This result is entirely consistent with our reasons for reversing in the earlier appeal and finding that the contract was not terminable at will. It made good sense for the parties to agree that Burford would have an exclusive territory and that his contract could be terminated only for cause. Otherwise, APS could have watched while Burford built up his territories and then terminated his contract, grabbing for itself all the fruits of his labors. 786 F.3d at 587-88. At the same time, if a manufacturer or other upstream company like APS agrees to give a sales representative an exclusive territory, its right to terminate for poor performance is critical. Without that right, it risks effectively abandoning the territory, unable to replace the poor performer in his exclusive territory. For that reason, neither courts nor juries should quickly find waiver when the manufacturer or upstream company tolerates poor performance but' ultimately loses patience and terminates the contract for the exclusive territory.

The judgment of the district court is AFFIRMED.


author: EASTERBROOK, Circuit Judge.

text:
    Randy Joseph NETZER, Plaintiff-Appellant, v. OFFICE OF LAWYER REGULATION and Matthew F. Anich, Defendants-Appellees.
    Nos. 16-3236 & 16-3713
    United States Court of Appeals, Seventh Circuit.
    Submitted March 8, 2017
    Decided March 13, 2017
    Rehearing and Rehearing En Banc Denied April 12, 2017

      Randy Joseph Netzer, Pro Se.
    Sean Michael Murphy, Attorney, OFFICE OF THE ATTORNEY GENERAL, Wisconsin Department of Justice, for Ap-pellees.
    Before BAUER, EASTERBROOK, and ROVNER, Circuit Judges.
   EASTERBROOK, Circuit Judge.

Randy Netzer, a debtor in bankruptcy, asked the court to discharge a debt to Wisconsin’s Office of Lawyer Regulation. Bankruptcy Judge Furay concluded in-this adversary proceeding that the approximately $9,200 the Supreme Court of Wisconsin imposed as costs in a disciplinary proceeding against a member of the state’s bar is a “fine, penalty, or forfeiture” under 11 U.S.C. § 523(a)(7) and therefore is not dischargeable. 545 B.R. 254 (Bankr. W.D. Wis. 2016).

The bankruptcy court entered its decision on February 3, 2016, and Netzer had 14 days to appeal. Fed. R. Bankr. P. 8002(a)(1). He took 41, filing a notice on March 15. He asked the district judge to excuse his tardiness, contending that until a few days earlier he had not known of the bankruptcy court’s decision. But the district court dismissed the appeal as untimely. 2016 U.S. Dist. Lexis 84260 (W.D. Wis. June 29, 2016), reconsideration denied, 2016 U.S. Dist. Lexis 129476 (Sept. 22, 2016). The judge stated that he lacks authority to extend the time on equitable grounds, because the 14-day period is jurisdictional.

In re Sobczak-Slomczewski, 826 F.3d 429 (7th Cir. 2016), holds that the 14-day period in Rule 8002(a)(1) is jurisdictional, and Bowles v. Russell, 551 U.S. 205, 213-14, 127 S.Ct. 2360, 168 L.Ed.2d 96 (2007), holds that there cannot be equitable exceptions to jurisdictional rules. The grant of review in Hamer v. Neighborhood Housing Services of Chicago, 835 F.3d 761 (7th Cir. 2016), cert. granted, No. 16-658 (U.S. Feb. 27, 2017), which poses the question whether Fed. R. App. P. 4(a)(5)(C) sets a jurisdictional time limit, suggests that the Supreme Court may soon decide how far rules about the times for appeal, as opposed to statutory limits, can affect a court’s jurisdiction. See also Kontrick v. Ryan, 540 U.S. 443, 124 S.Ct. 906, 157 L.Ed.2d 867 (2004) (time limit in Fed. R. Bankr. P. 4004 is not jurisdictional); Eberhart v. United States, 546 U.S. 12, 126 S.Ct. 403, 163 L.Ed.2d 14 (2005) (time limit in Fed. R. Crim. P. 33(a) is not jurisdictional); United States v. Neff, 598 F.3d 320 (7th Cir. 2010) (time limit in Fed. R. App. P. 4(b) is not jurisdictional).

We need not hold these appeals for Hamer, however, or revisit the issue resolved in Sobczak-Slomczewski. For whether or not a given rule is “jurisdictional” it is still a rule, and when invoked it must be enforced. Appellees have claimed the benefit of the 14-day limit for bankruptcy appeals. Bankruptcy Rule 9022(a), which requires bankruptcy courts to notify litigants of judicial orders, also provides: “Lack of notice of the entry does not affect the time to appeal or relieve or authorize the court to relieve a party for failure to appeal within the time allowed, except as permitted in Rule 8002.” This takes us to Rule 8002(d), which specifies the conditions under which a bankruptcy judge may extend the time for appeal. Rule 8002(d)(1) permits a bankruptcy judge to allow a belated appeal if application is made within 35 days after the order’s entry. Netzer missed that deadline — and, even if he had asked in time, still the power to decide would have belonged to the bankruptcy judge, not to the district judge or the court of appeals.

Courts lack an “equitable” power to contradict the bankruptcy statutes and rules. Law v. Siegel, — U.S. -, 134 S.Ct. 1188, 188 L.Ed.2d 146 (2014); In re Kmart Corp., 359 F.3d 866, 871 (7th Cir. 2004). Rule 9022(a) says that lack of notice authorizes additional time only to the extent allowed by Rule 8002, and Rule 8002(d)(1) sets a limit of 35 days from the decision for such a request to be made. Those rules promote expeditious resolution of bankruptcy appeals. Litigants have only to check the court’s electronic docket once a month in order to protect their interests; this step will ensure that, even if notice miscarries, a request for additional time can be made within the 35 days allowed by Rule 8002(d)(1).

Affirmed