author: SYKES, Circuit Judge.

text:
    LANDMARK AMERICAN INSURANCE COMPANY, Plaintiff-Appellant, v. Peter HILGER, Defendant-Appellee.
    No. 15-2566
    United States Court of Appeals, Seventh Circuit.
    Argued February 10, 2016
    Decided September 22, 2016

      Eric Blanchard, Bridget DiBattista, Attorneys, Walker Wilcox Matousek LLP, Chicago, IL, for Plaintiff-Appellant.
    Karl L. Mulvaney, Attorney, Bingham Greenebaum Doll, LLP, Indianapolis, IN, Jeffrey Robert Moran, Jr., Thomas A. Vickers, Attorneys, Vanek, Vickers & Ma-sini, P.C., Chicago, IL, for Defendant-Ap-pellee. ,
    Before BAUER, FLAUM, and SYKES, Circuit Judges.
   SYKES, Circuit Judge.

Peter Hilger faces two separate lawsuits alleging that he and several codefendants persuaded credit unions in Michigan and Tennessee to fund loans by overstating the value of the life-insurance policies that would serve as collateral. Hilger tendered his defense to Landmark American Insurance Company under a professional liability policy held by one of his codefendants, O’M and Associates LLC (“O’MA”). Although Hilger is not a named insured under O’MA’s policy, the policy defines “covered persons and entities” to include O’MA’s. independent contractors; Hilger sought coverage as.such.

Landmark responded by filing this action for a declaratory judgment that it-has no duty to defend Hilger. The insurance company argued that Hilger did not perform the professional services at issue in the Michigan and -Tennessee suits as an O’MA independent contractor and is therefore not covered under O’MA’s policy. The district court, sitting in diversity and applying Illinois law, disagreed and entered judgment on the- pleadings for Hilger. Landmark now appeals, arguing that it is entitled to take discovery and offer evidence regarding the true nature of Hil-ger’s relationship to O’MA.

We agree with Landmark that judgment on the pleadings was inappropriate. Under Illinois law an insurer that seeks a declaration of its duty to defend may offer evidence outside the underlying complaint for purposes of establishing that no duty exists. While the insurer may not use a declaratory-judgment action to litigate liability in the underlying lawsuit, that limitation is inapplicable to this case. Accordingly, we reverse the judgment and remand for further proceedings.

I. Background

Peter Hilger is the president of Allied Solutions, LLC, a company that provides customized products to financial institutions. In 2013 he was named as one of several codefendants in two separate lawsuits brought by credit unions in Michigan and Tennessee. Hilger’s codefendants include Michael O’Malley, who sells life insurance through O’MA, and Daniel Phillips, who brokers the sale of life-insurance policies to third parties through Berkshire Group, LLC, and Capital Lending Strategies, LLC. The credit unions allege that Hilger, O’Malley, and Phillips persuaded them to fund loans used to pay life-insurance premiums by overstating the value of the policies that would serve as collateral for the loans.

Hilger and his codefendants face a host of claims in these lawsuits. The Michigan complaint alleges fraud, innocent and negligent misrepresentation, breach of contract, and conspiracy against all of the defendants in their individual capacities. It also advances theories of joint-venture liability against Allied, Capital Lending Strategies, and O’Malley; individual liability against Hilger and Phillips for the acts of Allied and Capital Lending Strategies; and respondeat superior liability against Allied and Capital Lending Strategies for the conduct of Hilger and Phillips. The Tennessee complaint alleges negligence, negligent misrepresentation, and unjust enrichment against Hilger, O’Malley, Phillips, and their respective companies. Together, the credit unions claim losses in excess of $1 million.

Both O’MA and Hilger tendered their defense to Landmark under O’MA’s Insurance Agents and Brokers Liability Policy. The policy obligates Landmark to pay damages arising out of any negligent act, error, or omission committed in O’MA’s rendering of professional services as an insurance agent and broker, including facilitation of insurance-premium finance loans. Section I.E of the policy defines “Covered Persons and Entities” to include “[a]ny present or former principal, partner, officer, director, employee or independent contractor of the Named Insured, but only as respects professional services rendered on behalf of the Named Insured.” O’MA sought coverage as the policy’s named insured, while Hilger claimed that the Michigan and Tennessee lawsuits pertained to professional services that he rendered as an O’MA independent contractor. Landmark denied both tenders and filed this action for a declaratory judgment that it has no duty to defend either O’MA or Hilger. O’MA and Hilger counterclaimed, seeking a declaration that Landmark does owe them a duty to defend. They then moved for judgment on the pleadings, see Fed. R. Civ. P. 12(c), which the district court granted. Only the judgment in favor of Hilger is at issue on appeal.

In granting Hilger’s motion, the judge observed that the complaints in the underlying lawsuits “paint an ambiguous picture” of Hilger’s relationship with O’MA: while certain allegations suggest that Hil-ger acted at all times as an agent of Allied, other allegations are consistent with the assertion that Hilger acted as an independent contractor for O’MA. In light of the requirement under Illinois law that this type of ambiguity be resolved in favor of the insured, see,, e.g., Gen. Agents Ins. Co. of Am., Inc., v. Midwest Sporting. Goods Co., 215 Ill.2d 146, 293 Ill.Dec. 594, 828 N.E.2d 1092, 1098 (2005), the judge concluded that Landmark is required to defend Hilger. On Landmark’s motion for reconsideration, see Fed. R, Civ. P. 54(b), the judge rejected the argument that discovery was required to determine the true nature of Hilger’s relationship with O’MA. Relying on our decision in Old Republic Insurance Co. v. Chuhak & Tecson, P.C., 84 F.3d 998 (7th Cir.1996), the judge held that any consideration of evidence outside the underlying complaints was inappropriate absent a “strong reason to believe” that Hilger was not in fact an insured under O’MA’s policy. The judge denied reconsideration. Landmark now appeals.

II. Discussion

We review a judgment on ■ the pleadings de novo, using the same standard that applies'to a Rule 12(b)(6) motion to dismiss for failure to state a claim. Buchanaw-Moore v. County of Milwaukee, 570 F.3d 824, 827 (7th Cir. 2009). “Thus, we view the facts in the complaint in the light most favorable to the nonmov-ing party and will, grant the motion ‘only if it appears beyond doubt that [Landmark] cannot prove any facts that would support [its] claim for relief.’ ” Id. (quoting N. Ind. Gun & Outdoor Shows, Inc. v. City of South Bend, 163 F.3d 449, 452 (7th Cir. 1998)). Neither party has raised the issue of which state’s substantive law governs this diversity action, so we apply the law of Illinois, the forum state. Santa’s Best Craft, LLC v. St. Paul Fire & Marine Ins. Co., 611 F.3d 339, 345 (7th Cir. 2010).

The oft-repeated refrain of Illinois insurance law is that an insurer’s duty to defend is “much broader” than its duty to indemnify. Crum & Forster Managers Corp. v. Resolution Tr. Corp., 156 Ill.2d 384, 189 Ill.Dec. 756, 620 N.E.2d 1073, 1079 (1993). “If the facts alleged in the underlying complaint fall within, or potentially within, the policy’s coverage provisions, then the insurer has a duty to defend the insured in the underlying action.” Id.; see also Amerisure Mut. Ins. Co. v. Microplastics, Inc., 622 F.3d-806, 810-11 (7th Cir.- 2010). As a practical matter, this means that an insurance company taking the position that it has no duty to defend usually cannot “simply refuse to defend the insured.” Emp’rs Ins. of Wausau v. Ehlco Liquidating Tr., 186 Ill.2d 127, 237 Ill.Dec. 82, 708 N.E.2d 1122, 1134 (1999). As long as the underlying complaint even “potentially alleg[es] coverage,” the insurer must either defend the suit under a reservation of rights or seek a declaratory judgment that there is no coverage. Id.; see also Edward T. Joyce & Assocs., P.C. v. Prof'ls Direct Ins. Co., 816 F.3d 928, 932 (7th Cir. 2016). “If the insurer fails to take either of these steps and is later found to have -wrongfully denied coverage, the insurer is estopped from raising policy defenses to coverage.” Ehlco Liquidating Tr., 237 Ill.Dec. 82, 708 N.E.2d at 1135.

Hilger thinks that the broad scope of an insurer’s duty to defend means that in all duty-to-defend disputes, the court is limited to a review of the allegations in the underlying complaint. That’s true when an insurer tries to deny coverage imthout seeking a declaratory judgment or defending under a reservation of rights. In that situation the relevant question is whether the insurer justifiably refused to defend the action based solely on the allegations in the complaint, so the court’s inquiry is necessarily limited to those allegations. See MFA Mut. Ins. Co. v. Crowther, Inc., 120 Ill.App.3d 387, 75 Ill.Dec. 903, 458 N.E.2d 71, 73 (1983) (“An insurer may not justifiably refuse to defend an action against its insured unless it is clear from the face of the complaint that the allegations fail to state facts which bring the claim within, or potentially within, the policy’s coverage.”).

But Landmark did seek a declaratory judgment, so that limitation doesn’t apply here. “[W]hen an insurer has elected to either defend under a reservation of rights or file a declaratory judgment action, .,. the insurer may'present evidence beyond the underlying complaint, so long as it does not tend to determine an ultimate issue in the underlying proceeding.” Fid. & Cas. Co. of N.Y. v. Envirodyne Eng’rs, Inc., 122 Ill.App.3d 301, 77 Ill.Dec. 848, 461 N.E.2d 471, 474-75 (1983) (citation omitted), cited with approval in Pekin Ins. Co. v. Wilson, 237 Ill.2d 446, 341 Ill.Dec. 497, 930 N.E.2d 1011, 1020 (2010). An “ultimate issue” is. one that would collaterally estop the plaintiff in the underlying lawsuit from raising a theory of recovery or be crucial to the insured’s liability. Id., 77 Ill.Dec. 848, 461 N.E.2d at 475.

The extra latitude afforded to insurers in this situation makes sense given the Illinois Supreme Court’s long-standing directive in duty-to-defend disputes between an insurer and its insured:

When the underlying complaint against the insured allege[s] facts within or potentially within the scope of policy coverage, the insurer taking the position that the complaint is not covered by its policy must defend the suit under a reservation of rights or seek a declaratory judgment that there is no coverage.

Midwest Sporting Goods Co., 293 Ill.Dec. 594, 828 N.E.2d at 1098. If the inquiry in the ensuing declaratory-judgment action were limited to the four corners of the underlying complaint and asked only whether the complaint’s allegations fall potentially within the'policy’s coverage, the proceedings would be “little more than a useless exercise possessing no attendant benefit.” Envirodyne Eng’rs, 77 Ill.Dec. 848, 461 N.E.2d at 474..

In granting' Hilger’s motion for judgment on the -pleadings,' the judge assumed that all duty-to-defend issues “are analyzed by comparing the four corners of the underlying complaint-to the insurance policy.” As we’ve explained, that proposition is inapposite in the context of a declaratory-judgment action. Because Landmark seeks a declaration of its duty to defend Hilger, it may offer evidence' outside the Michigan and Tennessee 'complaints that Hilger did not render the professional services in question as an O’MA independent contractor provided that doing so will not decide an “ultimate issue” in the underlying actions. There’s no indication that it would. The claims against Hilger in the Michigan and Tennessee suits consist primarily of misrepresentation and breach-of-contráct claims, none of which “hinge[ ] upon” Hil-ger’s status as an independent contractor. Id. 77 Ill.Dec. 848, 461 N.E.2d at 476.

We note that the judge also relied heavily on our decision in Old Republic Insurance Co. v. Chuhak & Tecson, P.C., for the proposition that a court may only look beyond the underlying complaint in a declaratory-judgment action if the insurer provides a “strong reason to believe” that it has no duty to defend. But Old Republic predates Pekin Insurance Co. v. Wilson, 237 Ill.2d 446, 341 Ill.Dec. 497, 930 N.E.2d 1011 (2010), in which the Illinois Supreme Court clarified the law on this point. See Gen. Ins. Co. of Am. v. Clark Mall Corp., 644 F.3d 375, 378 (7th Cir. 2011). To reiterate, an insurer seeking a declaratory judgment on its duty to defend is entitled to introduce evidence outside the underlying complaint so long as it does not implicate an “ultimate issue” in the underlying action. To the extent that Old Republic suggests that additional limitations apply, it is inconsistent with Illinois insurance law. Cf. Envirodyne Eng’rs, 77 Ill.Dec. 848, 461 N.E.2d at 474 (“The only time such evidence should not be permitted is when it tends to undermine an issue crucial to the determination of the underlying lawsuit ... .”).

Illinois law permits Landmark to offer evidence outside the Michigan and Tennessee complaints that Hilger isn’t covered as an independent contractor under O’MA’s policy. We therefore Reverse the judgment in favor of Hilger and Remand for further proceedings.

      . Specifically, the judge noted that both the Michigan and Tennessee complaints expressly attribute all alleged acts and omissions to Hilger in his capacity as an agent of Allied. On the other side of the equation, the judge cited assertions in both complaints that Hil-ger either collaborated with or acted through O’MA.

      . Hilger argues that the question whether he participated in a joint venture with O'MA constitutes an “ultimate issue” in the Michigan and Tennessee suits. See Clarendon Am. Ins. Co. v. B.G.K. Sec. Servs., Inc., 387 Ill.App.3d 697, 326 Ill.Dec. 749, 900 N.E.2d 385, 393 (2008) (holding that the putative insured’s participation in a joint venture was an ultimate issue because the existence of a joint venture would give rise to joint and several liability for the conduct of codefendants under Illinois law). But Landmark hasn’t asked the court to decide whether Hilger participated in a joint venture, only whether he rendered the services in question in the Michigan and Tennessee suits as an independent contractor for O’MA.


source: Caselaw Access Project

author: KANNE, Circuit Judge.

license: Public Domain

text:
    UNITED STATES SOCCER FEDERATION, INC., Plaintiff-Appellant, v. UNITED STATES NATIONAL SOCCER TEAM PLAYERS ASSOCIATION, Defendant-Appellee.
    No. 15-3402
    United States Court of Appeals, Seventh Circuit.
    Argued March 31, 2016
    Decided September 22, 2016
    Rehearing and Rehearing En Banc Denied Oct. 31, 2016

      Russell F. Sauer, Jr., Attorney, Latham & Watkins LLP, Los Angeles, CA, Melissa Arbus Sherry, Attorney, Latham & Watkins LLP, Washington, DC, for Plaintiff-Appellant.
    Mark Steven Levinstein, Allison B. Jones, Attorneys, Williams & Connolly LLP, Washington, DC, for Defendant-Ap-pellee.
    Before MANION and KANNE, Circuit Judges and PEPPER, District Judge.

       The Honorable Pamela Pepper, United States District Court for the Eastern District of Wisconsin, sitting by designation.

   KANNE, Circuit Judge.

Soccer is called “the beautiful game,” but the collective-bargaining process behind the sport can be ugly. This case matches Plaintiff United States Soccer Federation, Inc. (“US Soccer Federation”); the national governing body for soccer in the United States, against Defendant United States National Soccer Team Players Association (“Players Association”), the labor union for members of the Men’s National Team, in a dispute over their current collective bargaining agreement (“CBA”) and uniform player agreement (“UPA” and collectively with CBA, “CBA/UPA”).

The present case kicked off in 2013, when the Players Association disapproved the US Soccer Federation’s proposed tequila poster advertisement, which contained player images. Counterattacking, the US Soccer Federation issued a notice, declaring that the CBA/UPA does not require Players Association approval for use of player likenesses for six or more players in print creative advertisements by sponsors, based on the express terms of the agreement. Crying foul, the Players Association filed a grievance and demanded arbitration, arguing that the CBA/UPA does require this, based on the past practice of the parties.

The arbitrator issued an award in favor of the Players Association. The district court confirmed the arbitrator’s award and granted summary judgment for the Players Association. The US Soccer Federation appealed. We reverse.

I. Background

We begin with a brief synopsis of the relevant provisions of the CBA/UPA for this case. Then, we summarize the pertinent factual background and procedural history.

A. Key Provisions in the CBA/UPA

Since 1997, US Soccer Federation and the Players Association have negotiated and executed four CBAs. The current CBA was established in 2011, revised in 2013, and expires in 2018. (R. 41 Ex. B [hereinafter CBA].)

Article IV of the CBA incorporates the UPA, which binds all members of the Players Association, including the Men’s National Team. (R. 41 Ex. B [hereinafter UPA].)

The current CBA/UPA is constrained by integration and no-modification clauses, as well as a non-waiver provision. The integration and no-modification clauses provide that the CBA/UPA is “deemed the complete agreement between the parties” and “no understanding contained in this Agreement shall be modified, altered or amended, except by a writing signed by the party against whom enforcement is sought.” UPA § 13(a); CBA § 7.1. The non-waiver provision states that “failure of either party to insist, in any one or more instances, on the performance of any terms or conditions of this Agreement shall not be construed as a waiver or relinquishment of any rights granted” by the CBA/UPA. UPA § 13(c).

Article V of the CBA outlines the grievance and arbitration procedure for resolving disputes arising frtim the “interpretation or application of, or compliance” with the CBA/UPA, The scope of the arbitrator’s authority is expressly delineated:

The decision of the Impartial Arbitrator will constitute full, final and complete disposition of the grievance, as the case may be, and will be binding upon the Player(s) involved and the parties to this Agreement; provided, however, that the Impartial Arbitrator will not have the jurisdiction or authority to add to, subtract from, or alter in any way the provisions of this Agreement or any Uniform Player Agreement. Furthermore, the Impartial Arbitrator will not have the jurisdiction or authority to add to, subtract from, or alter in any way the provisions of any exhibit to this Agreement or any exhibit to the Uniform Player Agreement unless there is a conflict or inconsistency between the provisions of the exhibit and this Agreement or any Uniform Player Agreement, in which case the Impartial Arbitrator may conform the exhibit to this Agreement or the Uniform Player Agreement. In resolving grievances,' the Impartial Arbitrator has the authority to interpret, apply and determine compliance with any provision of this Agreement, or Uniform Player Agreement or exhibit thereto and to award monetary damages and/or declaratory or injunctive relief.

CBA § 5.8. In short, an arbitrator “has the authority to interpret, apply and determine compliance with [the CBA/UPA],” but he cannot “add to, subtract from, or alter in any way the provisions of [the CBA/UPA].” Id.

Finally, the substantive provision at issue in this case is Section 6 of the UPA, which governs the use of player likenesses taken or created during US Soccer Federation activity. Under Section 6(b), “[e]x-cept as set forth below, [the US Soccer Federation] may not use or allow others to use Player’s Likeness without the agreement of Player or Player’s representative.” One such exception occurs in Section 6(f)(i), which governs sponsor use of player likenesses for groups of six or more players:

Six or More Players—Use by . Federation Sponsor. If Player’s Likeness is used by a “Partner” of the Federation (as defined in 6(h)) for any Noncommercial Use or in a Partner’s advertising or promotions, and if the advertising, promotion, or Non-commercial Use includes six (6) or more members of any Federation national team (e.g., team poster or collage),.Federation will request, but not require, the Partner to make a contribution in an amount to be determined in the Partner’s sole and absolute discretion to the applicable Player Pool(s), provided however, with respect to any use by a Partner in a ‘Spot’ (as defined in 6(h)), prior to such use, Federation shall provide a copy of such Spot to the Players Association for its approval, which approval shall be considered in good faith. Such uses by Partners specifically exclude any Licensing Purposes.

Section 6(f)(i) divides the úse of player likenesses into two categories: (1) non-Spot, which includes non-commercial video and print creatives, and (2) Spot, which is defined as commercial video. For non-Spot advertisements, Section 6(f)(i) provides that the US Soccer Federation “will request, but not require” a sponsor donation to a player pool. For Spot advertisements, Section 6(f)(i) provides that the US Soccer Federation “shall provide a copy of such Spot to the Players Association for its approval.”

B. Factual Background and Procedural History

From approximately 2001 until 2013, the US Soccer Federation voluntarily submitted print creatives to the Players Association for review, before authorizing sponsor use.

In 2013, the Players Association disapproved a proposed print creative submitted by the US Soccer Federation—a poster advertisement for el Jimador, a popular mid-shelf tequila brand. The US' Soccer Federation initially responded by filing a grievance and demanding arbitration under the CBA/UPA, but later withdrew the action. On February 20, 2014, the US Soccer Federation issued a declaration to the Players Association, stating that it had “no contractual obligation to submit print/digital creative pieces ’ containing the likeness of six (6) or more national team players to the. Players Association (PA) for' its advance approval” and would no longer be doing so in the'future. (R. 44 at 11.)

On February 27, 2014, the Players Association filed a grievance and demanded arbitration under the CBA/UPA, claiming that the US Soccer Federation’s declaration constituted an anticipatory breach of the CBA/UPA.

Following six days of hearings, on September 12, 2014, the arbitrator found for the Players Association, framing the issue before, him as follows:

Whether the. United States Soccer Federation, under the terms of the Collective Bargaining Agreement and the Uniform Players Agreement, is required by the terms of the Agreements or past dealings: between the parties to submit to the United States National Soccer Team Players Association for its advance review and approval non-video print and digital creatives containing the likenesses of six (6) or more players to be used by [the US Soccer Federation] or its sponsors in noncommercial or advertising and promotional materials?

(R. 41-7 at 5-6.)

Opening his discussion, the arbitrator declared that “an arbitrator only needs to construe the meaning of a collective bargaining agreement when the contract language is indefinite or ambiguous.” (Id. at 19.) He continued, “[i]f the language is clear and unambiguous, meaning the ordinary reading of the language cannot reasonably be construed with more than one meaning, arbitrators will apply its plain meaning and not look outside the four-corners of the contract to ascertain the intentions of the parties.” (Id.)

Turning to the CBA/UPA, the arbitrator asserted that the agreement “makes clear that there is no specific contractual provision that requires [the US Soccer Federation] to submit print creatives of six (6) or more players to the Players Association for its' approval.” (Id. at 21.) Then, he determined that the CBA/UPA is “silent as to this point” because “[t]here is no explicit contract language that requires [the US Soccer Federation] to submit to such an approval process, just as there is no language laying out another process for the review of print creatives.” (Id.) Additionally, the arbitrator noted that “the UPA clearly contemplates that [the US Soccer Federation’s] sponsors might make use of print creatives.” (Id.)

After acknowledging that he cannot create “new rights in the parties’ CBA/UPA,” the arbitrator determined that the agreement was ambiguous and interpreted it in accordance with the parties’ past practice:

It is the role of the Impartial Arbitrator to interpret the meaning of the contract when there is ambiguity, as there is here when the contract is silent as to the procedure for the approval of print creatives submitted by sponsors, which Section 6 of the UPA certainly anticipates. ... [0]ne cannot ignore that [the US Soccer Federation] has openly and repeatedly forwarded print creatives to the Players Association for its review and approval for more than a decade. It would defy sound judgment to draw a conclusion as to the intent of the parties by considering only actions they did not take but refusing to look squarely at actions they did take. The arbitrator’s only goal is to shed light on the intent of the parties, which may be reflected by their actions and a mutually acted upon custom or past practice, which is perhaps the most widely used standard or lens relied upon by arbitrators to interpret contractual ambiguity.

{Id. at 40.) Continuing, the arbitrator found that his consideration of the parties’ past practice did not violate the CBA/ UPA’s arbitration, integration, and no-modification provisions because he was interpreting the contract by resolving an ambiguity. {Id. at 52-53.) In conclusion, the arbitrator held that “[t]he long-standing practice of submitting print creatives to the Players Association for its approval is an implied term of the CBA/UPA by virtue of a bona fide past practice” and entered an award in favor of the Players Association. {Id. at 53.)

Subsequently, the US Soccer Federation filed suit in federal district court to vacate the arbitrator’s award, pursuant to § 301 of the Labor Management Relations Act, 29 U.S.C. § 185, arguing that the arbitrator exceeded his authority by relying on the parties’ past practice instead of the express terms of the CBA/UPA. The Players Association counterclaimed for enforcement of the award. Both parties moved for summary judgment.

On September 29, 2015, the district court denied the US Soccer Federation’s motion and granted the Players Association’s motion, confirming the arbitrator’s award. United States. Soccer Fed’n, Inc. v. United States Nat’l Soccer Team Players Ass’n, 140 F.Supp.3d 738, 741 (N.D. Ill. 2015). The district court began by “emphasizing its extremely limited aüthority to review the decisions of arbitrators.” Id. at 747. The district court found that the “arbitrator considered the CBA/UPA, interpreted the CBA/UPA, and reached a conclusion. He- did exactly what the parties bargained for under the CBA/UPA.” Id. at 748. The district • court explained that although “the arbitrator did not expressly state that the agreement’s silence on this point created an ambiguity” and “the arbitrator’s interpretation may have been unsound, at times invoking the terms ‘silence’ and ‘ambiguity far too cavalierly,” this was “not enough” to overturn the award under the applicable standard of review. Id. at 749-50. Accordingly, the district court could not conclude “that the arbitrator’s reliance.on past practice fell outside his authority to interpret and apply the terms of the parties’ CBA/UPA.” Id. at 750. The US Soccer Federation appealed.

II. Analysis

This court reviews “de novo a district court’s decision on cross-motions for summary judgment, meaning that we review the arbitrator’s decision as if we were the court of first decision.” United Food & Commercial Workers, Local 1516 v. Illinois Am. Water Co., 569 F.3d 750, 754 (7th Cir. 2009) (citations omitted).

“Judicial review of arbitration awards is extremely limited.” Johnson Controls, Inc., Sys. & Servs. Div. v. United Ass’n of Journeymen, 39 F.3d 821, 824 (7th Cir. 1994) (collecting cases). The Supreme Court has held that, “[a]s long as the arbitrator’s award ‘draws its essence from the collective bargaining agreement,’ ... the award is legitimate.” United Pa- perworkers Int’l Union v. Misco, Inc., 484 U.S, 29, 36, 108 S.Ct. 364, 98 L.Ed.2d 286 (1987) (quoting United Steelworkers v. Enter. Wheel & Car Corp., 363 U.S. 593, 597, 80 S.Ct. 1358, 4 L.Ed.2d 1424 (I960)). In other words, the question presented to “a federal court asked to set aside an arbitration award ... is not whether the arbitrator or arbitrators erred in interpreting the contract; it is not whether, they clearly erred in interpreting the contract; it is not whether they grossly erred in interpreting the contract; it is whether they interpreted the contract.” Hill v. Norfolk & W. Ry. Co., 814 F.2d 1192, 1194-95 (7th Cir. 1987).

Judicial deference to arbitration, however, is not unlimited." “[A]n arbitrator is confined to interpretation and application of the collective bargaining agreement; he does not sit to dispense his own brand of industrial justice.” Enter. Wheel & Car Corp., 363 U.S. at 597, 80 S.Ct. 1358. “When the arbitrator’s words manifest an infidelity to this obligation,' courts have no choice but to refuse'enforcement of the award.” Id. A court is empowered to vacate an arbitrator’s award if “the arbitrator had exceeded the powers delegated to him by the parties.” Dexter Axle Co. v. Int’l Ass’n of Machinists, 418 F.3d 762, 768 (7th Cir. 2005) (citing Enter. Wheel & Car Corp., 363 U.S. at 597, 80 S.Ct. 1358 and Ethyl Corp. v. United Steelworkers of Am., 768 F.2d 180, 184 (7th Cir. 1985)). Because the arbitrator is typically limited to interpreting the contract, if “there is no possible interpretive route to the award,” then .a “noncontractual basis can be inferred and the award set aside.” Chicago Typographical Union No. 16 v. Chicago Sunr-Times, Inc., 935 F.2d 1501, 1505-06 (7th Cir. 1991).

On appeal, the US Soccer Federation argues the arbitrator’s award should be vacated. Specifically, it argues that, with regard to sponsor use in print ereatives of player likenesses for six or more players, the terms of the CBA/UPA are clear and unambiguous and the arbitrator exceeded his authority in interpreting the agreement to require Players Association approval, based on past practice. We agree.

As an initial matter, the arbitrator erred in his determination that “there is ambiguity .,. here when the contract is silent as to the procedure for the approval of print ereatives submitted by sponsors, which Section 6 of the ÜPA certainly anticipates.” (R. 41-7 at 40.)

This court has defined "ambiguity,” in a collective bargaining agreement context, as “something that makes it possible to interpret a document reasonably in more than one way,” Rossetto v. Pabst Brewing Co., 217 F.3d 539, 542 (7th Cir. 2000); see also Young v. N. Drury Lane Prods., Inc., 80 F.3d 203, 205 (7th Cir. 1996) (“[w]e must enforce the terms of a collective bargaining agreement when those terms are unambiguous .[i]f the language of such an agreement lends itself to one reasonable interpretation only, it is not ambiguous.”). Furthermore, this court has held that “there must be either contractual language on which to hang the label of ambiguous or some yawning void ... that cries out for an implied term. Extrinsic evidence should not be used to add terms to a contract that is plausibly complete without them.” Bidlack v. Wheelabrator Corp., 993 F.2d 603, 608 (7th Cir. 1993).

Here, the arbitrator erred. We echo the district court’s observation that the arbitrator “at times invoke[ed] the terms ‘silence’ and ‘ambiguity’ far too cavalierly.” United States Soccer Fed’n, 140 F.Supp.3d at 749. Contrary to the arbitrator’s determination, the CBA/UPA is not silent as to the approval procedure for.sponsor use of print ereatives: ■ the agreement explicitly provides that, for sponsor use of print creatives with player likenesses for six or more players, the US Soccer Federation “will request, but not require, the [sponsor] to make a contribution ... to the applicable Player Pool(s).” UPA § 6(f)(i). Moreover, the applicable terms of the CBA/UPA are clear and unambiguous because they can be reasonably construed only in one way—that the US Soccer Federation “will request, but not require” a sponsor contribution to a player pool. There is no other reasonable interpretation, much less one that includes a requirement for Players Association approval. In other words, with regard to sponsor use of print creatives in the CBA/UPA, there is no “yawning void” or “contractual language on which to hang the label of ambiguous.” Bidlack, 993 F.2d at 608. And the arbitrator’s determination of ambiguity, as well has his ensuing interpretation based past practice, “add[ed] terms to a contract that is plausibly complete without them.” Id.

For context, we provide a more detailed discussion of the relevant provisions of the CBA/UPA. As discussed, Section 6(f)(i) of the UPA separates sponsor use of the likenesses of six or more players into two categories: (1) non-Spot, which includes non-commercial video and print creatives, and (2) Spot, which is defined as commercial video. For non-Spot advertisements, Section 6(f)(i) expressly states that the US Soccer Federation “will request, but not require” a sponsor contribution to the applicable player pool. In contrast, for Spot advertisements, Section 6(f)(i) expressly declares that the US Soccer Federation “shall provide a copy ... to the Players Association for its approval.” Immediately subsequent, Section 6(f)(ii), provides an explanation for the Spot “approval” requirement—“[w]ith respect to Spots, the Players Association has expressed concern that there is a greater likelihood of an impermissible implied endorsement in Spots.” The Spot “approval” requirement is then confirmed in Section 6(h), which governs Spot advertisements for five or more players—“[notwithstanding any other provision in this Agreement, the Players Association shall approve video commercial spots.”

These, pontractual provisions are clear and unambiguous, establishing that the parties contemplated and anticipated the use of player likenesses for six players or more in both non-Spot and Spot mediums. First, for non-Spot advertisements, the parties agreed only to “request, but not require” a sponsor contribution to the applicable player pool, nothing more or less. And the CBA/UPA contain no other terms that contradict this “request, but not require” condition for non-Spot advertisement. Second, for Spot advertisements, the parties agreed only to “approval” by the Players Association, nothing more or less. Not only do Sections 6(f)(ii) and 6(h) confirm the “approval” requirement for Spot advertisements, but neither provision suggests extension of this requirement to non-Spot advertisements.

To recap, the relevant provisions of the CBA/UPA are clear, unambiguous, and not silent because they expressly provide that for non-Spot advertisements, which include print creatives, the US Soccer Federation “will request, but not require” a sponsor contribution to the applicable player pool. UPA § 6(f)(i). There is no basis for any other interpretation and thus “no possible interpretive route to the award” that requires Players Association approval. Chicago Typographical Union, 935 F.2d at 1506.

Having established that the relevant provisions of the CBA/UPA governing sponsor use of print creatives are clear and unambiguous, it easily follows that the arbitrator “exceeded the powers delegated to. him by the parties.” Ethyl Corp., 768 F.2d at 184. The CBA/UPA expressly provides that the arbitrator “will not have the ... authority to add to, subtract from, or alter” the agreement. CBA § 5.8. Therefore, the arbitrator exceeded his authority by interpreting the CBA/UPA to require Players Association approval for print creatives, even though the agreement’s clear and unambiguous terms include only to “request, but not require” a sponsor donation to a player pool, UPA § 6(f)(i).

The present cáse is analogous to our decisions in Tootsie Roll Indus., Inc. v. Local Union No. 1, 832 F.2d 81 (7th Cir. 1987) and Anheuser-Busch, Inc. v. Beer Workers Local Union 714, 280 F.3d 1133 (7th Cir. 2002).

In Tootsie Roll, in a dispute between an employer and an employee fired for excessive absenteeism, the arbitrator issued an award for the employee, applying the employer’s more lenient “general absenteeism policy,” even though the employee had specifically entered into a stricter “letter agreement.” 832 F.2d at .85. The district court vacated the award and this court affirmed. This court held that the arbitrator “failed to follow the clear requirements of the agreement” and noted that “if the parties had intended the regular policy to apply, there would have been no reason for spelling out the very specific ... requirements contained in the letter agreement.” Id. at 84. The Tootsie Roll court further held that “the law of thé shop cannot be relied upon to modify clear and unambiguous provisions.” Id. Applying this principle, this court concluded that the letter agreement “is unambiguous and a deliberate modification of the general absenteeism policy” and that the “arbitrator inappropriately applied the law of the shop to [the letter agreement] to alter its clear meaning and impact.” Id.

In Anheuser-Busch, in a collective bargaining agreement dispute between an employer and a union over the applicable commission rate, the arbitrator issued an award for the union, adopting a previous agreement’s one-tier commission structure because of past practice, even though the current agreement contained a two-tier commission structure, as well as a zipper (or integration) clause. 280 F.3d at 1135-37. The district court upheld the award, and this court reversed. This court declared that “this contract required . no interpretation: the zipper clause was unambiguous; the arbitration clause was unambiguous; and the commission-rates clause was unambiguous.” Id. at 1140. The Anheuser-Busch court also noted that “[cjarefully written, well-reasoned, and thoroughly negotiated contracts are presumptively complete” and “[t]he conduct of the parties is absolutely irrelevant in situations like this involving a dual zipper-clause-arbitration clause.” Id. at 1141. Ultimately, the Anheuser-Busch court held that “the contract was clear and unambiguous and needed no interpretation. Accordingly, we are convinced that the arbitrator, not the parties, modified the contract and thereby exceeded his authority.” Id. at 1142; see also id. at 1145 (Rovner, J. concurring) (writing that “[t]he unambiguous terms of [the current] agreement also .barred the arbitrator from looking to practices predating the agreement ... as a source of new or modified contract terms”).

The principles that govern Tootsie Roll and Anheuser-Busch also control the present case. Like in Tootsie Roll, here, the “law of the shop cannot be relied upon to modify clear and unambiguous provisions” of the CBA/UPA, which provide only for the US Soccer Federation to “request, but not require” a sponsor donation to a player pool for the use of print creatives. 832 F.2d at 84. Similar to Anheuser-Busch, in this case, the CBA/UPA “required no interpretation: the zipper clause was unambiguous; the arbitration clause was unambiguous; and the [substantive provision at issue] was unambiguous” and therefore the arbitrator “reurrote the contract and inscribed his own language upon the contract; something that he was not authorized to do.” 280 F.3d at 1140. In both Tootsie Roll and Anheuser-Busch, this court vacated the arbitrators’ awards because they ignored and contradicted the clear and unambiguous terms of the underlying agreements. And here, we vacate this award for thé same reasons.

In defense of the arbitrator’s ambiguity determination, the Players Association contends the following: the arbitrator, not the court, determines whether the contract language is ambiguous and “only a decision to ignore or act contrary to language that the arbitrator [himself] found ... to be ambiguous and binding would allow the Court to vacate an award.” (Appellee Br. 26 (internal citations and quotations marks omitted).) For support, the Players Association relies primarily on International Union of Operating Engineers, Local 139 v. J.H. Findorff & Son, Inc., 393 F.3d 742 (7th Cir. 2004) and United Food & Commercial Workers, Local 1516 v. Illinois Am. Water Co., 569 F.3d 750 (7th Cir. 2009).

The Players Association’s contention is overly broad. Such a sweeping rule would undercut any meaningful judicial review of arbitrator awards that “dispense [the arbitrator’s] own brand industrial justice.” Amax Coal Co. v. United Mine Workers of Am., 92 F.3d 571, 575 (7th Cir. 1996). According to the Players Association, so long as the arbitrator declared that the agreement was ambiguous and did not contradict his own statement, then his award is completely insulated from judicial review. Such a result, however, runs contrary to this court’s well-established holding that “the arbitrator cannot dress his policy desires up in contract interpretation clothing.” Northern Indiana Public Service Co. v. United Steelworkers of America, 243 F.3d 345, 347 (7th Cir. 2001); see also Ethyl Corp., 768 F.2d at 187 (“This is not to say that simply by making the right noises—noises of contract interpretation— an arbitrator can shield from judicial correction an outlandish disposition of a grievance.”).

Moreover, the Players Association’s reliance on International Union of Operating Engineers is misplaced. In International Union of Operating Engineers, in a collective-bargaining dispute between an employer and union of engineers, the arbitrator issued an,award in favor of the employer, after concluding that under the agreement, use of skid-steer loaders was not exclusive to the engineers. 393 F.3d at 744. The district court vacated the arbitrator’s award, finding that the arbitrator “neglected the collective bargaining agreement’s plain language.” Id. This court reversed, holding that “misinterpretation of contractual language, no matter how ‘clear,’ is within the arbitrator’s powers; only a decision to ignore or supersede language conceded to be binding allows a court to vacate the award. There is a big difference—a clear difference, a plain difference—between misunderstanding and ignoring contractual language.” Id. at 745.

International Union of Operating Engineers is inapplicable to the present case because here, the arbitrator ignored, rather than misunderstood, the express terms of the CBAAJPA. As discussed, for sponsor use of print creatives, the CBA/UPA provides for the US Soccer Federation to “request, but not require” a sponsor donation to a player pool. The arbitrator, however, determined that the CBA/UPA was “silent” as to the approval process for print creatives. This is the very definition of “ignoring contractual language.” Id. at 745. In comparison, an example of the arbitrator “misunderstanding” contractual language would be if he had determined that print creatives required a mandatory sponsor payment. We have held that, “[t]here is a big difference ... between misunderstanding and ignoring contractual language,” id. and in the present case, the arbitrator ignored, rather than misunderstood, the contractual language because he determined that the CBA/UPA was “silent” with regard to the procedure for print creatives, even though the agreement expressly provides that the US Soccer Federation “request, but not require” a donation to a player pool. And then he impermissibly “add[ed] to, subtracted] from, or alter[ed]” the CBA/UPA by requiring Player Association approval for sponsor use of print creatives. CBA § 5.8.

Nor does United Food & Commercial Workers support the Players Association’s contention. In United Food & Commercial Workers, in an employment contract dispute between an employer and union over a terminated employee, the arbitrator issued an award in favor of the union, after concluding that the contract, called the last chance agreement (“LCA”), did not provide for the employee’s termination in the circumstance of a good-faith challenge to the LCA itself. 569 F.3d at 753. The district court and this court confirmed the arbitrator’s award. This court held that “[t]he arbitrator did not disregard the contractual language ... [i]nstead, the arbitrator confronted a situation that was not expressly contemplated by the parties, interpreted the agreement, and reached a conclusion.” Id. at 755. This court further held that “[w]hat matters is not whether this court believes the LCA language to be ambiguous, but whether the arbitrator found it ambiguous ... only a decision to ignore of supersede language conceded to be binding allows a court to vacate the award.” Id. at 755-56 (citing Int’l Union of Operating Eng’rs, 393 F.3d at 745).

United Food & Commercial Workers is also inapplicable to the instant case. There, the arbitrator’s ambiguity determination rested on the fact that the situation “was not expressly contemplated by the parties.” 569 F.3d at 755. In contrast, here, as the arbitrator acknowledged, “the UPA clearly contemplates that [the US Soccer Federation’s] sponsors might make use of print creatives.” (R. 41-7 21.) Indeed, the same underlying facts of the present case distinguish it from both International Union of Operating Engineers and United Food & Commercial Worker—here, parties clearly contemplated sponsor use of print creatives and expressly included only an unambiguous “request” term in the CBA/UPA, which the arbitrator ignored (by finding the agreement silent and ambiguous) and contradicted (by requiring Players Association approval), thereby exceeding his authority— Accordingly, neither case supports the Players Association’s overly broad contention.

Next, the Players Association argues that “an arbitrator may find ambiguity created by the silence of the agreement on the particular question at issue,” relying mainly on Northern Indiana Public Serv., 243 F.3d at 347. (Appellee Br. 27 (internal quotation marks omitted).) Northern Indiana Public Serv. addressed a collective bargaining dispute between an employer and union over a PRP chart that tied pre-tax operating income to bonus percentage and depicted a range from 346 million dollars (corresponding to 0.0 percent bonus) up to 382 million dollars (corresponding to 6.0 percent bonus). 243 F.3d at 346. That year, the pre-tax operating income was 391 million dollars, causing the parties to submit the following issue to arbitration: “if the ... operating income went off the chart would the bonuses go off the chart as well?” Id. The arbitrator issued an award for the union, after finding that the agreement “expressly provided a floor for bonuses, but was silent as to a cap” and examining extrinsic evidence “[t]o clear up any ambiguity created by the silence.” Id. at 347. The district court and this court confirmed the award, holding that “the arbitrator engaged in contract interpretation. And, although the arbitrator was not empowered under the CBA to add terms to the PRP, arbitrators are empowered to fill gaps left in contracts.” Id. at 348.

The Players Association’s argument-is without merit, and Northern Indiana Public Service does not apply here. In Northern Indiana Public Service, the PRP chart was “silent” as to the bonus associated with 391 million dollars of operating income because it was “literally ... off the chart,” id. at 348, thereby resulting in an ambiguity or gap for the arbitrator to fill via contract interpretation. In contrast, as discussed, the CBA/UPA was not silent with regard for sponsor use of print creatives; it expressly provided that the US Soccer Federation “request, but not require” a sponsor donation to a player pool. Therefore, there was no ambiguity or gap for the arbitrator to fill,, and the Players Association’s argument fails.

The Players Association’s remaining arguments are merely additional attempts to characterize the arbitrator’s award as falling within his authority under the CBA/ UPA. But as we have already established, the arbitrator s award exceeded his authority, pursuant to CBA § 5.8, because he ignored and contradicted the clear and unambiguous terms of the agreement.

In conclusion, we recognize that a goal of arbitration is to provide the parties with “swift, inexpensive and final decisions,” but “this does not vitiate judicial review of an arbitrator’s decision.” Anheu-ser-Busch, 280 F.3d at 1144. Here, just as the parties agreed to arbitration, they also agreed “to limit the arbitrator’s authority and preserven their right to challenge decisions when the arbitrator had reached out and rendered a decision that stray[ed] beyond his delegated authority and is barred by the negotiated contract.” Id.

III. Conclusion

For the foregoing reasons, the judgment of the district court is REVERSED. This case is REMANDED with instructions to VACATE the award of the. arbitrator and enter judgment in favor of the US Soccer Federation.

      , Pelé with Robert L. Fish, Pelé, My Life and the Beautiful Game (1977).

      . The integration clause is also called a merger clause or zipper clause.

      . Section 6(h) defines "Partners” as "sponsors or partners of [the US Soccer Federation].

      . Section 6(h) defines "Spots” as "video com.mercial spots (which includes videos to be broadcast or disseminated or posted in any medium including television commercials).”

      . The “law of the shop” refers to "the body of past practices between the parties.” Tootsie Roll Indus., 832 F.2d at 84.


author: POSNER, Circuit Judge. EASTERBROOK, Circuit Judge,

text:
    O.B. et al., individually and on behalf of a class, Plaintiffs-Appellees, v. Felicia F. NORWOOD, in her official capacity as Director of the Illinois Department of Healthcare and Family Services, Defendant-Appellant.
    No. 16-2049
    United States Court of Appeals, Seventh Circuit.
    Argued September 7, 2016
    Decided September 23, 2016

      Robert Hugh Farley, Jr., Attorney, Na-perville, IL, Shannon Marie Ackenhausen, Attorney, Thomas D. Yates, Attorney, LEGAL COUNSEL FOR HEALTH JUSTICE, Chicago, IL, Martha Jane Perkins, Attorney, NATIONAL HEALTH LAW PROGRAM, Carrboro, NC, for Plaintiffs-Appellees O.B., by and through his parents Garland Burt and Julie Burt, C.F., by and through his mother, Kristen Fisher, J.M. and S.M., by and through his/her parents, Dan McCullough and Michele McCullough.
    Robert Hugh Farley, Jr., Attorney, Naperville, IL, Martha Jane Perkins, Attorney, NATIONAL. HEALTH LAW PROGRAM, Carrboro, NC, for Plaintiffs-Appellees SA. S. and SH. S., by and through his/her mother, Sheila Scaro.
    Linda Boachie-Ansah, Attorney, OFFICE OF THE ATTORNEY GENERAL, Civil Appeals Division, Chicago, IL, for Defendant-Appellant.
    Before WOOD, Chief Judge, and POSNER and EASTERBROOK, Circuit Judges.
   POSNER, Circuit Judge.

This appeal by the Illinois Department of Healthcare and Family Services (“HFS”) (Norwood, the nominal defendant-appellant, is sued only in her official capacity as the department’s director) challenges Judge Kocoras’s grant of a preliminary injunction. The appeal requires us to interpret provisions of the Medicaid Act, with which Illinois as a participant in Medicaid is required to comply; HFS is the agency charged with carrying out the state’s duty of compliance.

The Act defines “medical assistance” as including “early and periodic screening, diagnostic, and treatment services [EPSDT] ... for individuals ... under the age of 21” (to simplify we’ll refer to all such persons as “children”), 42 U.S.C. § 1396d(a)(4)(B), and requires the state to “mak[e] medical assistance available” to all eligible individuals. § 1396a(a)(10)(A). A related provision, § 1396a(a)(43)(C), requires the state to “provide for ... arranging for (directly or through referral to appropriate agencies, organizations, or individuals) corrective treatment the need for which is disclosed by such child health screening services.” (Corrective “treatment” is “T” in the acronym “EPSDT.”) Another provision, 42 U.S.C. § 1396a(a)(8), requires that medical assistance “shall be furnished with reasonable promptness to all eligible individuals.”

One. of the EPSDT treatment services is “private duty nursing services,” 42 U.S.C. § 1396d(a)(8), . which we’ll abbreviate as “home nursing”; it means that the child lives at home rather than in a hospital or other medical-care facility and is attended by a nurse or series of nurses for the number of hours allowed by HFS, which pays the nurses at rates determined by the agency.

The children whom HFS approves for home nursing tend to be in very poor health; we can take O.B., the first named plaintiff,.as representative and so the only class member we need discuss. He is .two years old, enrolled in Medicaid, approved by HFS for home nursing, and diagnosed with Down Syndrome, lung disease, and cardiac abnormalities. Ventilator-dependent for breathing, he also cannot digest normally or take any of the oral nutrition supplements designed to help people who have difficulty digesting to get nourishment.

At the age of nine months he’d been hospitalized in Peoria for respiratory failure, and while he was there-HFS approved a $19,718 monthly budget to- pay nurses for up- to 18 hours a day to take care of him-at home. But when he was ready to be sent home to receive the home-nursing care that had been prescribed for him, his parents had first to arrange for that care. For while HFS had approved and agreed to pay for it up to the budgetary limit specified, it had left it to the parents to find the nurses, which they couldn’t do before they knew when their son would be ready to be released by the hospital—and it wasn’t safe for him to leave the hospital until his parents hired the nurses needed to take care of him at home. It took the parents almost a year to obtain an adequate home-nursing staff, and only then was O.B. sent home.

The suit charges HFS with violating the Medicaid statute by failing to arrange for (or even, so far as appears, attempting to arrange for), with the requisite reasonable promptness, for home nursing to which it acknowledges O.B. and the other class members are entitled by the Medicaid Act.

The district judge certified a class consisting of Illinois children who have been approved for home nursing but whose parents or guardians haven’t been able to hire nurses for the hours of nursing to which the state entitles the parents or guardians. And convinced that there is a high likelihood of the plaintiffs’ succeeding at trial in proving HFS’s statutory violation, the judge issued a preliminary injunction (which is the ruling that the state is appealing). The essential provision of the injunction requires defendant Norwood (which is to say HFS) to “take immediate and affirmative steps to arrange directly or through referral to • appropriate agencies,' organizations, or individuals, corrective treatment of in-home shift nursing services to Plaintiffs and such similarly situated Medicaid-eligible children under the age of 21 in the State of Illinois who also have been approved for in-home shift nursing services, but who are not receiving [those] services at the level approved by [HFS], as required by the Medicaid Act.” Although the state claims that the injunction is too vague to be enforceable, the order granting the injunction gave reasons for it, stated its terms, and described in “reasonable detail” the “acts ... required” by the state, and thus complied with FRCP 65(d)(1) (also (d)(2), but that is not contested by the state). All it tells the state to do is take prompt measures to obtain home nursing for the class members, and that is a reasonably clear directive.

Remember that although O.B. had been approved for home nursing for which HFS had agreed to pay, he was denied it for almost a year because HFS, so far as it appears, made no attempt to find nurses for him. That left the search to be conducted by parents who .apparently lacked the knowledge or experience required to hire the needed number of nurses without a painfully protracted search.

The plaintiffs seek a permanent injunction, and a trial will be required to determine whether they’re entitled to it. But Judge Kocoras was on solid ground in predicting, as the basis for granting the preliminary injunction sought by the plaintiffs, that they are likely to prevail at trial. Certainly the defenses thus far advanced by HFS are weak. The primary defense is that nothing in the Medicaid statute “required [HFS] to ensure- that Plaintiffs would receive medical care from nurses in their homes.” But it was HFS that decided that home nursing was the proper treatment for G.B., the other named plaintiffs, and the other members of the class.

Apparently it’s not easy to find nurses for children with health problems as serious as those of O.B. and the other members of the class, for HFS does not criticize- O.B.’s parents for the time it took them to find nurses for their child. Adding to the difficulty is the fact that most, maybe all, of the parents of the plaintiff children and of the other members of the class are poor. For with rare exceptions a child is eligible for Medicaid in Illinois only if his or her family income exceeds the federal poverty line by no more than 42 percent. See Center for Medicare & Medicaid Services, Medicaid & CHIP in Illi nois, https://www.medicaid.gov/medicaid-chip-program-information/by-state/ stateproiile.html?state=illinois (visited Sept. 12, 2016, as were the other websites cited in this opinion). For a household of four persons the ceiling is $34,506—a very modest income for a household of that size. See U.S. Dep’t of Health & Human Services, Poverty Guidelines 01/25/2016, https://aspe.hhs.gov/poverty-guidelines. And some, maybe many—we’re not told how many—members of the class live in southern Illinois, which is the poorest region in the state and has the fewest nurses per capita. See Illinois Center for Nursing, “Registered Nurse Workforce Survey 2014” 17-18 (December 2014), http:// nursing.illinois.gov/PDF/2015-05-04_icn_ rnws2014_report.pdf; “Licensed Practical Nurse Workforce Survey Report 2015” 16-17 (March 2016), http://hursing.illinois.gov/ PDF/2016-03-09_ICN_LPN_2015_ Survey_Report_Final.pdf.

One might think that hospital personnel would be able to advise parents of patients such as O.B. where to find nurses able and willing to provide the required care for the children at HFS’s payment ceiling. But there is no indication of this. HFS delegates the coordination of the care necessary for children like O.B. to the Division of Specialized Care for Children (DSCC) of the University of Illinois at Chicago, see http://dscc.uic.edu/, which “help[s] children and youth with special healthcare -needs connect to services and resources.” But there is no indication that when as in O.B.’s case adequate nursing staff is not within the easy reach of the parents of children entitled to home nursing, HFS, whether by itself or in conjunction with UIC, assists the parents in their search. As far as the record shows, or we are able to determine, the hospitals from which children like O.B. are to be sent home to receive home nursing do not participate in the search for nurses. And because many nursing agencies do not offer pediatric home nursing -and most private insurance doesn’t cover such service, few hospitals may be able to help parents find home nursing for their children. See American Academy of Pediatrics, “Policy Statement: Financing of Pediatric Home Health Care,” 118 Pediatrics 834 (2006), http:// pediatrics.aappublications.org/content/U8/ 2/834.1ong.

HFS doesn’t argue that home nursing is inappropriate for O.B. or any other member of the class; it couldn’t argue that, because it decided it was appropriate for him (and the others). As far as we can glean from the sparse record, HFS has given up on searching (if it ever did) for nurses for children whom the' agency deems entitled to home nursing. It’s left the search to parents many or even most of whom may not be competent to conduct a timely and effective search for multiple nurses (no nurse is going to work 18 hours a day, day in and day out). If this is true, as Judge Kocoras found, HFS has violated the Medicaid Act.

The state argues that “if nurses are not able to fully staff [the plaintiffs’] hours [presumably the reference is to the hours that HFS has agreed to pay for], Plaintiffs can receive eare elsewhere at the State’s expense.” The “elsewhere” probably means hospitals. But it’s the state that decided that home nursing was right for the plaintiffs’ children. So far as appears, the only alternative would be the indefinite confinement of O.B. and the other class members in hospitals. The state has yet to provide any evidence that alternatives to home nursing, such as hospitalization, are adequate to the children’s needs. It argues that HFS “simply cannot guarantee that enough nurses will be. .available to care- for Plaintiffs in their homes,” which is doubtless true. But the plaintiffs aren’t, asking for a guarantee; they’re asking for the nurses, and there is no indication that HFS will (unless compelled by the courts) lift a finger to .find nurses to provide home nursing for children in O.B.’s situation. Indeed HFS denies having any obligation to do so. It argues that the preliminary injunction “improperly asserts that [HFS] should take affirmative steps to provide in-home nursing care, without identifying those steps or acknowledging the many steps already taken, and includes erroneous assumptions about what the Medicaid Act requires.” But surely HFS knows what those “affirmative steps” are—that is implicit in its claim to have taken many steps already. In asking the plaintiffs to tell it what those steps are, the state is asking the plaintiffs to substitute themselves for HFS. And the preliminary injunction should be understood simply as a first cut: as insisting, that the state do something rather than nothing to provide in-home nursing care for these children. The adequacy of what it does can then be evaluated, perhaps leading to modification or even abrogation of the preliminary injunction.

The state’s reference to “many steps already taken” is unsubstantiated in its briefs, and its reference to “erroneous assumptions” is a misunderstanding of the law, as we’ll show. But we want first to note that the state has not told us what “steps” it has taken to provide in-home nursing care for children with the afflictions involved in this case. Has it made active efforts to recruit nurses for such children? There is no indication that it has, and certainly no evidence. It hasn’t told us how many nurses (if any) it has ever recruited to provide home nursing care for afflicted children, or even how many nurses there are in Illinois (163,000, according to The Henry J. Kaiser Family Foundation,- State Health Facts, “Total Number of Professionally Active Nurses,” April 2016, http://kff.org/other/state-indicator/total-registered-nurses/? currentTimeframe=0 & sortModel=#% 22colId% 22:% 22Loca-tion% 22,% 22sort% 22:% 22asc% 22% 7D). Nor are we told how many nurses in other states might be recruited at reasonable cost to provide care for the children of the plaintiffs and other class members, should it be difficult to recruit Illinois nurses.

This is not to suggest that the district court could order nurses to be removed from positions caring for other people and transferred to the homes of the members of the plaintiff class. The state argues that there is a nurse shortage in Illinois, and implicitly that there is nothing the state can do about it; and this may be true. (And if the shortage is of nurses willing to work at the reimbursement rates set by HFS, we could not order the agency to eliminate the shortage by raising those rates. Armstrong' v. Exceptional Child Center, — U.S. -, 135 S.Ct. 1378, 1385, 191 L.Ed.2d 471 (2015). But the nurse-shortage argument was not made in the district court until after the preliminary injunction was issued, and while repeated in the state’s briefs in this court no particulars are offered and no supporting evidence cited. The reason appears to be the state’s “erroneous assumptions” argument, which is that all that Medicaid requires of a participating state is payment for medical services, not the services themselves; that while the statute requires the state and hence HFS to “mak[e] medical assistance available” to the plaintiffs, 42 U.S.C. § 1396a(a)(10)(A), “medical assistance” just -means either the provision of “the care and services” needed by the patient or the “payment of part or all of [their] cost.” § 1396d(a). In other words, the state argues that it gets to choose whether to pay for services.or to provide services, though of course if it fails to provide services and no one fills the gap, it won’t have to pay either.

But in giving two meanings to “medical assistance” the statute need not be read to authorize HFS to decide which meaning shall govern in each case. In fact the statute can’t be read so, because, for example, it states that a “State plan for medical assistance must provide for ... arranging for (directly or through referral to appropriate agencies, organizations, or individuals) corrective treatment the need for which is disclosed by such child health screening services.” § 1396a(a)(43)(C) (emphases added). See, e.g., Katie A. ex rel. Ludin v. L.A County, 481 F.3d 1150, 1158-59 (9th Cir. 2007), and cases cited there; see also Centers for Medicare and Medicaid Services, State Medicaid Manual, chs. 4 and 5, https://www.cms.gov/ Regulations-and-Guidanee/Guidance/ Manuals/Paper-Based-Manuals-Items/ CMS021927.html?DLPage=1 & DLEn-tries=10 & DLSort=0 & DLSortDir=as-cending). And remember that the Medicaid Act requires the state to provide the required services with reasonable promptness.

In arguing that all the Act requires of HFS is financial contribution, HFS relies on Bruggeman ex rel. Bruggeman v. Blagojevich, 324 F.3d 906, 910 (7th Cir. 2003), which called “Medicaid ... a payment scheme, not a scheme for state-provided medical assistance.” At that time the statute defined “medical assistance” only as “payment of part or all of the costs of’ enumerated care. 42 U.S.C. § 1396d(a) (2009). But Congress amended this definition by the Patient Protection and Affordable Care Act in response to Bruggeman and the decisions that followed it. And as explained in A.H.R. v. Washington State Health Care Authority, 2016 WL 98513, at *12 (W.D. Wash. Jan. 7, 2016) (internal quotation marks omitted), by doing this “Congress intended to clarify that where the Medicaid Act refers to the provision of services, a participating State is required to provide (or ensure the provision of) services, not merely to pay for them.”

We note a final oddity in HFS’s appeal. The state was willing to pay $19,178 a month for home nursing services for O.B. (at the estimated requirement of 18 hours of nursing service per day, equal to 540 hours per month, the average hourly cost would be $35.51). But O.B.’s hospitalization cost the state roughly $78,000 a month— four times the expense of home nursing. And surely HFS could scour the state for nurses willing to work for $35.51 an hour (not a bad wage—it equates to an annual wage of $71,020 a year for a nurse who works 2000 hours a year) more rapidly and efficiently and productively than the parents of these unfortunate children. HFS does not remark this anomaly in its briefs.

The district judge’s grant of the preliminary injunction is

Affirmed.

EASTERBROOK, Circuit Judge,

concurring.

Although I join the court’s opinion, I remain concerned by the language of the district court’s injunction.

The injunction requires Director Nor-wood to “take immediate and affirmative steps to arrange directly or through referral to appropriate agencies, organizations, or individuals, corrective treatment of in-home shift ■ nursing services to Plaintiffs and; such similarly situated Medicaid-eligible children' under the age of 21 in the State of Illinois who also have been approved for in-home shift nursing services, but who are not receiving in-home shift nursing services at the level approved by Defendant, as required by the Medicaid Act.” What steps, in particular? The injunction does not say. Yet Fed. R. Civ. P. 65(d)(1)(C) tells us that an injunction must “describe in reasonable detail'.. the act or acts restrained or required.” This injunction does not supply any detail. The Supreme Court has reversed injunctions that read like this one. See, e.g., Schmidt v. Lessard, 414 U.S. 473, 94 S.Ct. 713, 38 L.Ed.2d 661 (1974).

Some, of the district court’s opinion suggests that the judge .thought particulars unnecessary because the goal is to produce a defined result: children get the nursing services authorized for them. Since the Department of .Healthcare and Family Services knows the desired end, the judge implied, it must know the means to produce that end.

That is a non-sequitur. If as the Department asserts there is a shortage of nurses, then the end cannot be achieved without taking medical care away from other de-serying persons, and the district judge did not suggest that rationing of nursing care is either required by the Medicaid Act or an appropriate use of the court’s equitable powers. Raising reimbursement rates might induce nurses to supply additional services, but Armstrong v. Exceptional Child Center, — U.S. -, 135 S.Ct. 1378, 191 L.Ed.2d 471 (2015), holds that judges cannot change reimbursement rates in private suits. Yet if the judge cannot command Illinois, to pay more money, it may not be possible to achieve the end that the judge thought required by the statute.

The injunction in a ease of this kind should be designed to specify those steps (other than raising promised rates of payment) that the Department must take in order to find nurses for the plaintiff class—-if, .as class counsel, believe, there are nurses to be found. The principal problem with drafting such an injunction is one my colleagues mention: we do not know what will work. We shouldn’t expect class counsel to- have this knowledge; lawyers are not professional healthcare administrators. Nor should we expect the judge to know what the Department ought to do. The Department itself may not know what will suffice; it is so committed to the idea that all it need do is offer to pay for services that it may never have tried any other approach.

Perhaps a declaratory judgment would have been a better starting point, but the Department is not complaining about the use of an injunction rather than a declaratory judgment. All a district court can do in a situation such as this is require the defendant to start trying. Rule 65(d) requires “reasonable” detail, not more detail than is possible under the circumstances. Last May the Department sent the judge a letter with a list of some options it could pursue. As long as the Department starts working through this list, or takes some other step that seems to have a prospect of success, it has complied with the injunction. It would be out of the question for the district court to hold the Department in contempt for trying one or more approaches that turn out poorly. As long as the injunction is detail-free, the most the judge can demand is that the Department do something—and if the first one or two somethings fails, try something else.

The district judge should keep tabs on what is happening and adjust the injunction as appropriate. If the Department turns out to be right about the supply of nurses, the judge also must ensure that the interests of other persons, competing with the class for scarce resources, are adequately protected. Not unless the Department defies a command far more specific than the one issued so far would be it permissible (or sensible) to consider, taking punitive steps.