author: BAUER, Circuit Judge.

text:
    Christopher W. NEUMANN, Plaintiff-Appellant, v. Eurial K. JORDAN, Administrator, Division of Probation and Parole, and James Doyle, Attorney General for the State of Wisconsin, Defendants-Appellees.
    No. 95-3253.
    United States Court of Appeals, Seventh Circuit.
    Argued Feb. 13, 1996.
    Decided May 28, 1996.
    Stephen M. Glynn and Robert R. Henak (argued), Shellow, Shellow & Glynn, Milwaukee, WI, for petitioner-appellant.
    Sally L. Wellman (argued), Office of Atty. Gen., Wisconsin Dept, of Justice, Madison, WI, for respondent-appellee Jordan.
    James E. Doyle, Office of Atty. Gen., Wisconsin Dept, of Justice, Madison, WI, for respondent-appellee Doyle.
    Before CUMMINGS, BAUER, and MANION, Circuit Judges.
   BAUER, Circuit Judge.

Christopher Neumann appeals the district court’s denial of his 28 U.S.C. § 2254 petition for a writ of habeas corpus. We affirm.

BACKGROUND

The facts of the case, as related by the Wisconsin Appellate Court, are not in dispute. Given that the following analysis is fact-intensive, we will describe them in detail. Neumann was convicted of two counts of sexually assaulting J.H., a woman he had been dating for two years. The relationship was intimate and Neumann and J.H. had engaged in consensual sexual intercourse pri- or to the night of the assault. At the time of the assault, both Neumann and J.H. were college students. The relationship was somewhat rocky and the couple was prone to loud arguments. However, prior to the assault, Neumann had never physically abused J.H.

On the night of November 9, 1990, Neu-mann and J.H. attended a formal fraternity dance, at which Neumann became heavily intoxicated. At a post-dance party at a nearby hotel, Neumann began yelling at J.H. and then instigated a fistfight with another party goer. A short time later, Neumann was removed from the party by a hotel security guard. Neumann called J.H. from the lobby, but she refused to leave with him. At trial, another fraternity member, Marty Karrels, testified that his girlfriend asked him to give J.H. a ride home from the party because J.H. was afraid of Neumann. Karrels escorted J.H. to the lobby where they encountered Neumann. J.H. was visibly frightened of Neumann. To avoid a fight with Neumann, Karrels agreed to give Neumann a ride home. Neumann sat in the backseat, while J.H. was in the front between Karrels and his girlfriend.

When they arrived at Neumann’s apartment, Neumann got out of the two-door car and then reached across Karrels’ girlfriend, grabbed J.H.’s arm, and pulled her out of the car with such force that Karrels’ girlfriend and J.H. ended up on the ground. When Karrels got out to confront Neumann, J.H. began running away without her purse or shoes. Neumann ran after J.H., but Karrels and his entourage got back in the car and drove home. Upon arriving home, they called the police to report the incident.

Meanwhile, Neumann caught J.H., forced her back to his apartment building, and dragged her up the stairs to his second floor unit. One of Neumann’s roommates, James Shaw, testified that Neumann and J.H. came into the apartment around 3:00 a.m. and that they were arguing. He had seen them argue before, but this was “different.” According to Shaw, Neumann was a big guy who became aggressive when drunk. Shaw heard Neumann tell J.H. in a stern voice to go into his bedroom. After the bedroom door was closed, the arguing got louder so Shaw or one of the other roommates turned up the volume on the stereo.

J.H. testified that once in the bedroom, she ran to the window and screamed for help. Neumann sat on her to restrain her (he outweighed her by almost 100 pounds), and threatened to break her jaw — J.H. was a flutist — if she did not keep quiet. He also bit her hand in order to prevent her from playing the flute. Then, Neumann started kissing J.H. and told her that he was going to humiliate her. He took her pants off, and forcefully penetrated her vagina, first with his finger, and then with his penis.

After the assault, J.H. thought she could escape when Neumann fell asleep. He eventually did, but J.H. also drifted off because she was so exhausted by the struggle. When she awoke, she thought about running outside, but she was only wearing underwear and a t-shirt. She tried to wake up Neu-mann’s roommates and went to the phone to call for help. Before she could dial 911, Neumann grabbed her and dragged her back to his bedroom. She eventually fell back asleep.

When Shaw awoke in the living room, he heard more arguing and loud noises coming from Neumann’s room. He saw J.H. open the door and try to crawl out of the room wearing only underwear and a t-shirt. J.H. pleaded with Shaw to help her. Neumann was lying on the floor behind J.H. holding onto her leg. According to Shaw, J.H. looked distressed and upset and obviously had been crying. Neumann asked his roommates if they wanted to see J.H. naked and lifted her shirt. Shaw testified that although he had seen them argue before, this was “something different.” Finally, Shaw and the other roommates got involved and Neu-mann allowed J.H. to leave.

A friend of J.H., Lisa B., testified that J.H. arrived at Lisa’s apartment that morning looking “beat up.” Her face was red, she had multiple bruises, and she had teeth marks on her hands. Lisa and her boyfriend wrapped J.H. in a blanket, comforted her, and then took her to the police station. Later that same day, Shaw asked Neumann about what had happened. Neumann said that he had tried to Mss J.H. and that she started to scream rape. Shaw testified that he had seen J.H. “joke around” before, but that she was not joking that morning.

Neumann was the only defense witness. He testified that he had practically no memory of the events in question. He did not remember leaving the dance, or the events that followed. He did not even remember discussing the events with Shaw the next day. He testified, however, that he never would have sexually assaulted J.H. because he loved her and believed that they would someday marry.

Prior to trial, the court ruled that evidence of Neumann and J.H.’s prior sexual relation-sMp was admissible at trial on the issue of consent. This was correct under the Wisconsin rape shield law. Wis. Stat. § 972.11(2)(b)(l). However, after the close of evidence, the judge instructed the jury that they could not consider the couple’s prior sexual relationsMp in deciding whether J.H. had consented to sex with Neumann. This was error under Wisconsin law. State v. Neumann, 179 Wis.2d 687, 508 N.W.2d 54, 60 (Wis.App.1993), rev. denied, — Wis.2d -, 513 N.W.2d 406 (1994). The jury returned a guilty verdict on both counts of sexual assault. The court sentenced Neu-mann to four years imprisonment to be followed by four years of probation. On appeal, the Wisconsin Appellate Court held that the pertinent instruction had been error, but that it was harmless. Id., 508 N.W.2d at 61. Neumann’s federal habeas petition followed.

ANALYSIS

Federal courts are authorized to grant a writ of habeas corpus when a person is held in custody under a state court judgment in violation of the United States Constitution. 28 U.S.C. § 2254. In reviewing the state court proceedings, we presume that the factual findings of the state court are correct if those findings follow a hearing on the merits and are fairly supported by the record. See Kavanagh v. Berge, 73 F.3d 733, 735 (7th Cir.1996). We review the district court’s findings of fact under a clearly erroneous standard. Id. We review the merits of the district court’s legal conclusions de novo. Id.

A. Erroneous Rape Shield Instruction

Neumann concedes that the fact that the Wisconsin Appellate Court found the trial court’s instruction erroneous under Wisconsin law is not dispositive for purposes of this ease because a violation of state law does not necessarily violate the Constitution. Estelle v. McGuire, 502 U.S. 62, 67, 112 S.Ct. 475, 479, 116 L.Ed.2d 385 (1991). However, a state law violation may be so extreme as to rise to the level of a due process violation “if it created a serious risk of convicting an innocent person.” Eaglin v. Welborn, 57 F.3d 496, 501 (7th Cir.) (en banc), cert. denied, — U.S. -, 116 S.Ct. 421, 133 L.Ed.2d 338 (1995), citing Estelle, 502 U.S. at 72, 112 S.Ct. at 482.

As a general matter, the trial court’s instruction very well could create a risk of convicting an innocent person. The issue at rape trials often comes down to the credibility of the victim against that of the defendant. Where the victim and defendant had a prior sexual relationship, the issue of consent especially may be highlighted. Assuming a defendant raises the defense of consent and introduces evidence of a prior sexual relationship between the defendant and the victim, it is highly destructive to the defense to eliminate such evidence from the jury’s consideration. But that is only in the abstract. Neumann’s case was very different.

After carefully reviewing the record, we conclude that the trial court’s state law error did not create a risk of convicting an innocent man. In other words, the evidence against Neumann was overwhelming. First, in contrast to many “date-rape” prosecutions, Neumann’s defense was not actually that the victim had consented. Instead, Neumann testified that he did not remember any of the events of the night in question because he had been too drunk. Nevertheless, he testified that he never would have raped the victim because he loved her and planned on marrying her. Neumann argues now that the prior sexual relationship was crucial to the case because “it was not at all uncommon for them to fight like cats and dogs and soon thereafter engage in consensual, non-violent sexual intercourse.” The Wisconsin Appellate Court rightly rejected this argument by pointing out that “no evidence was presented which could reasonably support such a depiction of the couple’s prior sexual relationship.” Neumann, 508 N.W.2d at 61.

Neumann takes issue with the district court’s finding that the evidence of the couple’s prior sexual relationship was not “vital” to Neumann’s defense and therefore the faulty instruction was not unconstitutional. Neumann points us to a line of cases which he says indicates that any state court eviden-tiary ruling that excludes evidence relevant to a defendant’s defense is unconstitutional. See Washington v. Texas, 388 U.S. 14, 19, 87 S.Ct. 1920, 1923, 18 L.Ed.2d 1019 (1967). This is simply wrong. First, this case does not involve the exclusion of evidence but a faulty jury instruction. Second, the faulty instruction limited the jury’s consideration of the couple’s prior sexual relationship only in so far as it related to consent. The trial court permitted the jury to consider the evidence with respect to the issues of force or violence. The Wisconsin Appellate Court considered this factor to be dispositive in its harmless error analysis because there was no evidence that J.H. had ever consented to sex under the use or threat of violence prior to the assault. Neumann, 508 N.W.2d at 61. We consider this significant in reaching our conclusion that the erroneous jury instruction did not rise to the level of a constitutional violation.

Finally, and most importantly, the Supreme Court, as well as this court, has been resolute in- ruling that errors of state law, especially errors based on a trial court’s evi-dentiary rulings or jury instructions, do not, in and of themselves, violate the Constitution. See, e.g., Estelle, 502 U.S. at 67, 112 S.Ct. at 482; Eaglin, 57 F.3d at 501. At bottom, Neumann’s claim fails because the jury instruction precluded the jury from considering evidence that was only marginally significant when compared to the overwhelming weight of contrary evidence. J.H.’s prior consent does not imply, by itself, that she consented on the night in question. Tyson v. Trigg, 50 F.3d 436, 448-49 (7th Cir.1995), cert. denied, — U.S.-, 116 S.Ct. 697, 133 L.Ed.2d 655 (1996). Neumann failed to present any evidence that contradicted the compelling testimony of the various witnesses about the incident. Neumann’s argument that the case really came down to his word against the victim’s is worthless. “As in most rape cases, the key witness, and only eyewitness ... was the victim of the alleged rape.” Sandoval v. Acevedo, 996 F.2d 145, 148 (7th Cir.), cert. denied, — U.S. -, 114 S.Ct. 307, 126 L.Ed.2d 255 (1993). But here, there was more — much more. The prosecution presented the compelling testimony of disinterested witnesses who observed Neumann’s behavior before and after the rape. Their testimony buttresses J.H.’s testimony. Neumann did not contradict this evidence, he merely claimed that he was too drunk to remember. Even if the jury had been permitted to consider the allegedly “vital” evidence of the couple’s prior sexual conduct vis-a-vis consent, the jury would have returned with the identical verdict. The trial court’s instruction did not rise to the level of constitutional error.

CONCLUSION

For the foregoing reasons, we affirm the judgment of the district court.

AFFIRMED.


source: Caselaw Access Project

author: COFFEY, Circuit Judge.

license: Public Domain

text:
    CENTRAL STATES, SOUTHEAST AND SOUTHWEST AREAS PENSION FUND, Central States, Southeast and Southwest Areas Health and Welfare Fund and Howard McDougall, Trustee, Plaintiffs-Appellees, v. CENTRAL CARTAGE COMPANY, a Michigan Corporation, Defendant-Appellant.
    No. 95-2406.
    United States Court of Appeals, Seventh Circuit.
    Argued Jan. 3, 1996.
    Decided May 28, 1996.

      Albert M. Madden and Thomas M. Weith-ers (argued), Central States, Southeast & Southwest Areas Pension Fund, Rosemont, IL, for Plaintiffs-Appellees.
    Grady B. Murdock, Jr., Neal & Associates, Chicago, IL, ■ Patrick A. Moran (argued), Scott T. Stirling and Eric A. Parzianello, Evans & Luptak, Detroit, MI, for Defendant-Appellant.
    Before COFFEY, MANION and KANNE, Circuit Judges.
   COFFEY, Circuit Judge.

Central States, Southeast and Southwest Areas Pension Fund (collectively the “Pension Fund”) filed suit against Central Cartage Company pursuant to section 515 of the Employee Retirement Income Security Act (ERISA), 29 U.S.C. § 1145, claiming that Central Cartage had failed to fulfill its contractual obligation to pay employer contributions to the plaintiffs’ pension fund. Nearly a year after the suit was filed, Central Cartage moved to dismiss the case and compel alternative dispute resolution. The district court denied the motion, finding that Central Cartage had waived its rights to arbitration or alternative dispute resolution. • Central Cartage appeals; we dismiss for lack of appellate jurisdiction.

I. Background

Central Cartage is a Michigan corporation engaged in primarily local trucking. The company (along with other trucking companies) entered into a nationwide collective bargaining agreement (known as the National Master Freight Agreement, or “NMFA”) with the International Brotherhood of Teamsters, spanning the period April 1, 1991 to March 31, 1994. Central Cartage also entered into a supplemental agreement with the Union specifically covering all “truck drivers, helpers, dockmen, warehousemen, checkers, power-liffc operators, hostlers, and such other employees ... engaged in local pickup, delivery and assembling of freight.”

The supplemental agreement contains a provision obligating Central Cartage to contribute to the Pension Funds for Central Cartage’s employees. The agreement also provides for alternative dispute resolution:

Disputes or questions of interpretation concerning the requirement to make contributions on behalf of particular employees or classifications of employees shall be submitted directly to the Conference Joint Area Committee by either the Employer, the Local Union, or the Trastees.

In February 1994, the Pension Funds filed suit against Central Cartage pursuant to the provisions of ERISA: The Pension Funds alleged that Central Cartage had intentionally misclassified certain employees as “casual” instead of “regular” employees (which lowered the required level of contribution to the pension funds) and had failed to pay employer contributions owed to the Pension Fund on behalf of these employees.

In April 1994, Central Cartage answered the complaint, alleging eleven affirmative defenses, including the Pension Fund’s failure to exhaust administrative remedies. In a status report to the district court in July 1994, Central Cartage noted an unresolved issue of whether the Pension Fund had failed to exhaust its administrative remedies.

In anticipation of trial the parties conducted discovery. Although the record is not clear whether discovery proceedings were completed, in January 1995, Central Cartage filed a motion in district court to dismiss the case and compel alternative dispute resolution, as provided for in the supplemental agreement to the collective bargaining agreement. The district court ruled that Central Cartage had waived its contractual right to any alternative dispute resolution because the company had failed to “promptly” invoke the provision in the agreement “until nearly a year after this case was filed,” conducting discovery, and filing status reports. See Cabinetree of Wis. v. Kraftmaid Cabinetry, Inc., 50 F.3d 388, 390-91 (7th Cir.1995) (holding that failure of a party to promptly move for arbitration after litigation has been commenced against that party is presumptive evidence that it has waived any contractual right to arbitration). Central Cartage made a motion for reconsideration; the court denied it. Instead of proceeding to trial, Central Cartage appeals the decision of the district court denying its motion to dismiss the lawsuit and compel alternative dispute resolution.

II. Analysis

A threshold issue raised by the Pension Funds is our jurisdiction to review the appeal. Normally, only final judgments may be appealed. 28 U.S.C. § 1291; Carson v. American Brands, Inc., 450 U.S. 79, 83, 101 S.Ct. 993, 996, 67 L.Ed.2d 59 (1981). However, Central Cartage has asserted two grounds for appellate jurisdiction: 28 U.S.C. § 1292(a)(1) (jurisdiction to review certain interlocutory decisions) or in the alternative 9 U.S.C. § 16 (appellate jurisdiction under the Federal Arbitration Act). Each will be considered in turn.

A. Review of Interlocutory Decisions

Central Cartage asserts that the district court’s action, denying the motion to compel arbitration, constituted in effect a refusal to order an injunction. Title 28 U.S.C. § 1292(a)(1) provides, with emphasis added:

(a) [T]he courts of appeals shall have jurisdiction of appeals from:
(1) Interlocutory orders of the district courts of the United States, .. i or of the judges thereof, granting, continuing, modifying, refusing or dissolving injunctions, or refusing to dissolve or modify injunctions, except where a direct review may be had in the Supreme Court;

However, “[a]n order by a federal court that relates only to the conduct or progress of litigation before that court ordinarily is not considered an injunction and therefore is not appealable under § 1292(a)(1).” Gulfstream Aerospace Corp. v. Mayacamas Corp., 485 U.S. 271, 279, 108 S.Ct. 1133, 1138, 99 L.Ed.2d 296 (1988).

Historically, district court orders refusing to compel alternative dispute resolution (most commonly arbitration) could fall within the ambit of section 1292(a)(1) under one of two theories: the Enelow-Ettelson doctrine, or the rationalization that the order had the practical effect of ruling upon an injunction. See Matterhorn, Inc. v. NCR Corp., 727 F.2d 629, 630 (7th Cir.1984).

Initially arising from the old division between courts of law and courts of equity, the Enelow-Ettelson doctrine provided that an order staying legal proceedings (such as a suit for damages for a contract breach) in district court so as to rule upon an equitable defense (such as fraud in the formation of the contract) is analogous to an equity chancellor enjoining the proceedings before a law judge; thus orders refusing to stay the legal proceeding in favor of an equitable defense is analogous to an equity court’s refusal to grant an injunction: which provides the grounds for appeal under § 1292(a)(1). Enelow v. New York Life Ins. Co., 293 U.S. 379, 55 S.Ct. 310, 79 L.Ed. 440 (1935); Ettelson v. Metropolitan Life Ins. Co., 317 U.S. 188, 63 S.Ct. 163, 87 L.Ed. 176 (1942). Some courts reasoned that a district court’s refusal to stay litigation in favor of arbitration is equivalent to a court of equity refusing to enjoin a legal proceeding; the refusal of the injunction thus provides a basis for appellate jurisdiction. See e.g. B & R Assoc. v. Dependable Ins. Co., 835 F.2d 526, 528 (4th Cir.1987) (citing eases). However, our court refused to extend the doctrine to include orders refusing to compel arbitration. Ohio-Sealy Mattress Mfg. Co. v. Duncan, 714 F.2d 740, 743 (7th Cir.1983), cert. denied, 464 U.S. 1044, 104 S.Ct. 712, 79 L.Ed.2d 176 (1984). The conflict over the application of the doctrine was rendered moot by Gulfstream Aerospace Corp. v. Mayacamas Corp., 485 U.S. 271, 108 S.Ct. 1133, 99 L.Ed.2d 296 (1988), which abolished the Enelow-Ettelson doctrine.

Apart from the Enelow-Ettelson doctrine, appellate review of interlocutory orders may be obtained under § 1292(a)(1) if the order has both the effect of an injunction and has “serious, perhaps irreparable, consequences.” Carson v. American Brands, Inc., 450 U.S. 79, 83-84, 101 S.Ct. 993, 996-97, 67 L.Ed.2d 59 (1981) (“Unless a litigant can show that an interlocutory order of the district court might have a ‘serious, perhaps irreparable, consequence,’ and that the order can be effectively challenged only by immediate appeal, the general congressional policy against piecemeal review will preclude interlocutory appeal.”).

However, this court has refused to extend this theory to orders refusing to stay or dismiss district court proceedings in favor of arbitration. Ohio-Sealy, 714 F.2d at 743 (“The effect of the order in this case [refusing to stay district court proceedings in favor of arbitration] was merely to determine in which forum the claims would be heard. Thus, because [the appellant] has failed to establish that the denial is likely to have ‘serious, perhaps irreparable’ consequences as required in Carson v. American Brands, Inc., 450 U.S. 79, 101 S.Ct. 993, 67 L.Ed.2d 59 (1980), this order is non-appealable at this stage of the litigation.”); Matterhorn, Inc. v. NCR Corp., 727 F.2d 629, 631 (7th Cir.1984) (“the denial of a motion to compel arbitration pending a trial on the existence of an arbitration agreement does not have serious or irreparable consequences.”); Matterhorn, Inc. v. NCR Corp., 763 F.2d 866, 870 (7th Cir.1985) (“Despite its resemblance to a mandatory injunction, an order to arbitrate is assimilated rather to a procedural order, such as a discovery order. Hence making or refusing to make such an order is not appeal-able under § 1292(a)(1).”).

The appellant, Central Cartage, argues that Gulfstream altered the face of appellate jurisdiction and requires us to ignore our prior decisions and evaluate, on a clean slate, our jurisdiction to review interlocutory orders denying motions to compel arbitration. In support, the appellant urges us to follow two recent cases from the Fourth and Eighth Circuits holding that such orders have the practical effect of refusing to grant an injunction. Kansas Gas & Elec. Co. v. Westinghouse Elec. Corp., 861 F.2d 420, 422 (4th Cir.1988) (holding that orders denying arbitration have an injunctive effect and serious consequences because they force parties to undergo the expense of trial before being able to appeal); Nordin v. Nutri/System, Inc., 897 F.2d 339 (8th Cir.1990) (same). See also Abernathy v. Southern California Edison, 885 F.2d 525, 527 n. 9 (9th Cir.1989) (holding that orders granting arbitration are not appealable, but observing that orders denying arbitration may come within the exception noted by Gulfstream and applied by the Fourth Circuit in Kansas Gas & Elec. Co.).

However, although Gulfstream overruled the Enelow-Ettelson doctrine, it specifically preserved the alternate route under 1292(a)(1), identified in our caselaw of Ohio-Sealy, Matterhorn et al. See Gulfstream, 485 U.S. at 287-88, 108 S.Ct. at 1142-43 (“Section 1292(a)(1) will, of course, continue to provide appellate jurisdiction over orders that grant or deny injunctions and orders that have the practical effect of granting or denying injunctions and have ‘serious, perhaps irreparable, consequences.’ ”) (quoting Carson, 450 U.S. at 84, 101 S.Ct. at 996-97). Indeed, our court has recently noted and reaffirmed the analysis underlying Ohio-Sealy, refusing to treat the denial of a stay in favor of arbitration as an injunction:

Searching for an injunction in orders controlling the progress of litigation has an artificial quality. Every decision to proceed or wait imposes costs, but none resolves the merits. If potential costs of procedural decisions make for appellate jurisdiction then many interlocutory orders are appealable — a step the Supreme Court has told us to resist. See Digital Equipment Corp. v. Desktop Direct, Inc., — U.S. -, 114 S.Ct. 1992, 128 L.Ed.2d 842 (1994). Cf. In re Springfield, 818 F.2d 565 (7th Cir.1987) (order that imposes costs but does not affect ultimate disposition of the merits is not appealable as an “injunction”). It is, after all, established that the costs of litigation are not “irreparable injury.” If a district court errs in conducting a lawsuit when a contract calls for arbitration, that mistake may be corrected on appeal from a final decision;....

Briggs & Stratton Corp. v. Local 232, 36 F.3d 712, 714 (7th Cir.1994) (internal citations omitted), cert. denied, — U.S. -, 115 S.Ct. 1998, 131 L.Ed.2d 1000 (1995).

Accordingly, we decline to follow the Fourth and Eighth Circuits and reaffirm our holding in Ohio-Sealy et al. As noted in Briggs & Stratton, litigation costs are not irreparable harm and appellants have failed to show that the district court’s order has the practical effect of refusing to grant an injunction.

B. The Federal Arbitration Act

Central Cartage asserts, in the alternative, that the Federal Arbitration Act provides appellate jurisdiction to review the district court’s denial of a motion to compel arbitration.

In the wake of Gulfstream, in 1989, Congress amended the Arbitration Act, specifying which interlocutory orders concerning arbitration are appealable and which are not. Specifically, 9 U.S.C. § 16(a) provides in part:

An appeal may be taken from—
(1) an order—
(A) refusing a stay of any action under section 3 of this title,
(B) denying a petition under section 4 of this title to order arbitration to proceed.

Thus, under § 16(a)(1)(A) and (B), appellants argue, we may review the district court’s denial of its motion to compel arbitration.

This argument is correct, with one major flaw: section 1 of the Arbitration Act specifically excludes coverage — including the jurisdiction rules of § 16 — for “contracts of employment of seamen, railroad employees, or any other class of employees engaged in foreign or interstate commerce.”

Although several circuits have interpreted the language of § 1 to preclude the application of the Arbitration Act to all collective bargaining agreements, see e.g. Amalgamated Ass’n of Street, Elec. Ry. & Motor Coach Employees v. Pennsylvania Greyhound Lines, Inc., 192 F.2d 310 (3d Cir.1951); United Elec., Radio & Mach. Workers v. Miller Metal Prod., Inc., 215 F.2d 221 (4th Cir.1954), our circuit has limited § 1 to the transportation industries. Briggs & Stratton, 36 F.3d at 714-15 (citing Pietro Scalzitti Co. v. Operating Engineers, 351 F.2d 576, 579-80 (7th Cir.1965)). See also Matthews v. Rollins Hudig Hall Co., 72 F.3d 50, 53 n. 3 (7th Cir.1995) (“The Seventh Circuit, however, has held that this [sec. 1] exclusion is limited to transportation workers, or in other words, workers actually engaged in the movement of goods in interstate com-merce_”); Miller Brewing Co. v. Brewery Workers Local Union No. 9, 739 F.2d 1159, 1162 (7th Cir.1984). Thus, for disputes involving collective bargaining agreements covering transportation workers, the Arbitration Act does not provide jurisdiction for interlocutory appeals from a district court’s denial of a motion to compel arbitration. Briggs & Stratton, 36 F.3d at 714-15.

The appellant, Central Cartage, is primarily engaged in local trucking and occasionally transports cartage across state lines. We hold that the workers of Central Cartage (covered in the collective bargaining agreement at issue between Central Cartage and the Pension Fund) therefore qualify as “transportation” workers. Because the Arbitration Act does not apply to “transportation” workers, see § 1, Central Cartage’s NMFA (the collective bargaining agreement) for its workers is not covered by the Act. Thus the jurisdictional provisions of § 16 of the Act are not applicable to Central Cartage’s appeal.

III. Conclusion

The appeal is dismissed for lack of appellate jurisdiction.

      . Further, Central Cartage’s own actions in delaying nearly a Ml year before filing its motion to compel arbitration tends to demonstrate that prompt arbitration was not of vital interest to Central Cartage. See South Bend Consumers Club, Inc. v. United Consumers Club, Inc., 742 F.2d 392, 394 (7th Cir.1984) ("[Appellant’s] failure to promptly and actively seek injunctive relief 'is a good indication that the status quo can continue until the ultimate conclusion of the litigation without interlocutory appellate review.' ”) (quoting Shirey v. Bensalem Township, 663 F.2d 472, 476 (3d Cir.1981)).

      . The district court specifically refused to compel "alternative dispute resolution.” We will assume for purposes of the following analysis that the contractual dispute mechanism specified in the collective bargaining agreement (referring disputes to a "Joint Area Committee" for final resolution) is "arbitration" within the meaning of the Arbitration Act.

      .Section 3 of the Arbitration Act provides that if a dispute is "referable to arbitration under an agreement in writing” the court must "stay the trial of the action until such arbitration has been had in accordance with the terms of the agreement, providing the applicant for the stay is not in default in proceeding with such arbitration.”

      . Section 4 of the Act states that a "party aggrieved by the alleged failure, neglect, or refusal of another to arbitrate under a written agreement for arbitration” may petition a district court "for an order directing that such arbitration proceed in the manner provided for in such agreement.”

      . The Pension Fund has asked us to overturn Pietro Scalzitti and to hold that § 1 of the Arbitration Act excludes coverage for all collective bargaining agreements and not just those involving transportation workers. Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 25 n. 2, 111 S.Ct. 1647, 1651 n. 2, 114 L.Ed.2d 26 (1991), noted the issue but declined to resolve it. The question of overruling Pietro Scalzitti and its progeny was presented to this court in Matthews, 72 F.3d at 53 n. 3, but we saw "no reason to overturn these well-established precedents.” Id. Following Matthews, we similarly decline to apply the § 1 exclusion to all collective bargaining agreements.


author: DIANE P. WOOD, Circuit Judge.

text:
    Judy REALES and Antonio Reales, as Individuals and Co-Administrators of the Estate of Melissa J. Hill, deceased, Plaintiffs-Appellants, v. CONSOLIDATED RAIL CORPORATION, Defendant-Appellee.
    No. 95-2268.
    United States Court of Appeals, Seventh Circuit.
    Argued Dec. 12, 1995.
    Decided May 30, 1996.

      John A. DeMato (argued), DeMato & Associates, Hamond, IN, for plaintiffs-appellants.

      Harold Abrahamson, Michael C. Adley (argued), Abrahamson, Reed & Adley, Hammond, IN, for defendant-appellee.
    Before POSNER, Chief Judge, and ESCHBACH and DIANE P. WOOD, Circuit Judges.
   DIANE P. WOOD, Circuit Judge.

Attempting to cross the railroad tracks ahead of an oncoming Conrail train, fifteen-year old Melissa Hill maneuvered her bicycle around the automatic gates and onto the tracks. Her cousin, who had done the same thing seconds before, crossed the tracks successfully; she was not so lucky. She hesitated for a split second, and then she was struck by the train and killed. Her parents, Judy and Antonio Reales, brought this wrongful death action alleging that Conrail had negligently failed to install warning devices at the crossing and had negligently operated the train. After the Reales failed three times to meet the court’s deadline for responding to a motion for summary judgment that Conrail filed, the court granted Conrail’s motion and denied the Reales’ motion to accept a one-day late filing and to reconsider the summary judgment. Because we find that the district court did not abuse its discretion in its handling of the motion, we affirm.

The fatal accident occurred in Chesterton, Indiana, at the intersection of Fourth Street, which runs in a north-south direction, and two sets of railroad tracks, which run east-west. The Fourth Street crossing is protected by automatic crossing gates and flashing lights. At the time of the accident, the undisputed facts properly before the district court showed that the gates were down, the flashers were operating, and the train was sounding its horn. Indeed, even in this Court plaintiffs have not suggested that they would have been able to present any facts that cast doubt on this much of the story. They claim in their Reply Brief only that they would have disputed the speed of the train, the precise location where Melissa was struck, and the general lack of enforcement in Chesterton of laws regarding train crossings. These points do not raise factual issues about the protective measures Conrail took, nor are they properly before this Court in any event, since they were not raised in the Reales’ opening brief. Brooks v. United States, 64 F.3d 251, 257 (7th Cir.1995).

The Reales filed their wrongful death action on July 1, 1994. In it, they alleged that Conrail was negligent in four respects: (1) it failed to install adequate safeguards at the Fourth Street crossing; (2) it operated the train at an excessive speed; (3) it failed to sound the train’s horn in a timely fashion; and (4) it failed to maintain the gates and safety equipment at the crossing, so that local residents were lulled into believing no trains were coming even though the gates were down. On August 26, 1994, the district court ordered that all discovery had to be completed by February 27, 1995, and the case was set for trial beginning June 5,1995.

After the discovery period was closed, on March 15, 1995, Conrail filed a motion for summary judgment with supporting materials. Under Local Rule 7.1 of the Northern District of Indiana, the Reales had until April 1, 1995, or fifteen days after service of Conrail’s motion in which to respond. April 1 came and went without a word from the Reales. On April 11, they filed their first motion for an extension of time, stating that they had been unaware of the time period in Rule 7.1. They requested that they be given until April 15, 1995, to file their response, citing a variety of practical problems counsel was facing. The court entered no order at that point, and on April 17 plaintiffs filed a second motion for more time, which they entitled a “Verified Motion for Final Extension of Time.” In that motion, they requested an extension until April 21, which the district court granted on April 20. No response was forthcoming on the 21st either. Instead, the Reales came in with yet another motion for a “final” extension of time. In this motion, counsel asserted that the office copy machine had run out of toner and had stopped working, which prevented him from compiling the necessary materials. He also stated that no area companies had toner in stock, and that no area copy services could process his order on such short notice.

Once again, the court granted the motion, this time fixing an April 24, 1995 deadline. On April 24, once again, the Reales neither filed a response nor did they notify the court or the clerk’s office that they were prevented from making a filing. Consequently, on April 25, 1995, the court issued an order granting Conrail’s summary judgment motion. Based on the undisputed testimony, the court found that the train was operating below the federally prescribed speed limit and that there was no genuine issue of material fact challenging the conclusion that Melissa Hill was more than 50 percent at fault. The first conclusion required judgment for Conrail on the first theory of the complaint, and the comparative negligence finding entitled Conrail to judgment on the other three. See Indiana Comparative Fault Act, Ind. Code § 34-434.

Shortly after the district court issued this order, at approximately 10:00 a.m. on April 25, the Reales filed a verified motion to accept a filing one day late. To justify the late filing, the Reales explained that they failed to meet the April 24 deadline because of “surprise and unexpected circumstances” — new mechanical problems with the copying machine. Counsel’s copier was out of service until late in the afternoon of April 24, counsel had been in trial most of the day, and the staff did not finish copying the response until 4:55 p.m. They tried to file the response then, but the clerk’s office was closed. The district court denied the motion, and then denied two motions for post-judgment relief.

On appeal, the Reales present two issues: (1) may a district court grant summary judgment “solely as a result of the nonmoving party’s failure to file a timely response,” and (2) did the district court abuse its discretion in refusing to accept the one-day late response, “when the late filing was due to unforeseen circumstances beyond Plaintiffs’ control.” We first address the second question, and then the first.

The second question challenges the district court’s ability to establish and enforce deadlines for the filing of motions and other papers. It is plain that they have, and must have, this power. The Federal Rules of Civil Procedure contain numerous deadlines, and Rule 83 entitles each district court to adopt local rules of practice and procedure that are consistent with statutes and rules adopted under the two Enabling Acts, 28 U.S.C. §§ 2072 and 2075. Rule 56(c) permits a party to file a motion for summary judgment up to ten days before the time fixed for the hearing. The Northern District of Indiana has supplemented Rule 56 with more particular time periods governing the remainder of summary judgment practice, including Rule 7.1, which requires a response within fifteen days of the motion.

Federal Rule of Civil Procedure 6 specifies precisely how the time periods are to be calculated (Rule 6(a)) and discusses the circumstances under which an enlargement of a time period may be granted (Rule 6(b)). If a request for enlargement of time is received within the period that had been prescribed, the court for “cause shown” may grant the request; if the motion is made after the time has expired, the court must be satisfied that the failure to act was the result of excusable neglect. Although Rule 6(b) sets forth a number of time periods that may not be extended except as specified in other rules, Rule 56 is not one of them.

The district courts must manage a burgeoning caseload, and they are under pressure to do so as efficiently and speedily as they can, while still accomplishing just outcomes in every civil action. See Rule 1; Civil Justice Reform Act of 1990, 28 U.S.C. §§ 471-482; Judicial Conference of the United States, Long Range Plan for the Federal Courts at 66 (1995). Part of that job means that they are entitled — indeed they must— enforce deadlines. Necessarily, they must have substantial discretion as they manage their dockets. Consequently, this Court reviews decisions such as the district court’s refusal here to grant the Reales a fourth extension of time only for abuse of discretion. See Spears v. City of Indianapolis, 74 F.3d 153, 157 (7th Cir.1996) (presenting a factual scenario remarkably like the one before us here); Wienco, Inc. v. Katahn Assocs., 965 F.2d 565, 567 (7th Cir.1992); United States v. Kasuboski, 834 F.2d 1345, 1352 (7th Cir.1987).

The account of the case given above shows that Judge Lozano did not take a precipitous step when he denied plaintiffs’ final effort to extend the time. Far from it; he had granted several extensions, even though nothing at all had been filed during the period prescribed by Rule 7.1, and even though the reasons that plaintiffs’ lawyer was offering seemed more like routine problems of office management than something that could not have been anticipated. The judge was therefore well within his discretion in concluding that the Reales had not demonstrated good cause for obtaining a fourth extension of time.

The judge also acted within his discretion when he set Conrail’s motion for summary judgment on the calendar for early on April 25. Given plaintiffs’ record in the case, he had no way of knowing that they would try to file later that morning. For nearly a month, the ease had been ready for decision as far as the Northern District of Indiana Rules were concerned. There was no reason to wait any longer. See also Rule 56(e) (permitting court to enter summary judgment “if appropriate” if the opposing party files no response).

The Reales’ first question proceeds on the faulty assumption that the sole reason the district court granted summary judgment was their failure to file a timely response. The district court’s opinion makes it clear that this is not a case where judgment is entered as some kind of sanction, nor would it have been proper to do so. Tobey v. Extel/JWP, Inc., 985 F.2d 380, 332 (7th Cir.1993). The only effect of their failure to file was to limit somewhat the materials in front of the judge that indicated whether there were genuine issues of material fact or not. As we noted above, it is unclear to what extent the Reales were prepared to proffer Rule 56(e) materials in opposition to the summary judgment that might have demonstrated such issues, but the judge was entitled to proceed on the record as it was before him at the open of business on April 25. See Resolution Trust Corp. v. Gold, 30 F.3d 251, 254 (1st Cir.1994); Johnson v. Gudmundsson, 35 F.3d 1104, 1112 (7th Cir.1994).

The standard of review that we apply to the summary judgment here is, as always, a de novo standard, see Thiele v. Norfolk & Western Ry. Co., 68 F.3d 179, 181 (7th Cir.1995), asking “whether, if the record of the summary judgment proceeding were the record of a trial, a reasonable factfinder, whether judge or jury, could find in favor of the party opposing the motion.” Gudmundsson, 35 F.3d at 1112 (internal quotations and citations omitted). The only argument the Reales have raised properly before this Court is that an issue of material fact exists about the degree of Melissa Hill’s fault, for her death. Even though, as the district court recognized, comparative fault is normally an issue for the jury in Indiana, summary judgment is still appropriate if “there is no dispute in the evidence and the factfin-der is able to come to only one logical conclusion.” Thiele, 68 F.3d at 184 (internal quotations and Indiana citations omitted).

On the record before the district court, no reasonable finder of fact could have found that Conrail’s fault was equal to or greater than Melissa’s. All of the eyewitnesses testified that before the accident, the crossing gates were down and the- flashers were activated. Several witnesses heard the train sound its horn as it approached the crossing. Witnesses saw Melissa go around the gates and onto the tracks. Melissa hesitated, but proceeded anyway. On the other side, it is hard to imagine what precaution the railroad could have taken that it did not, on these facts. And, as we noted above, even the information proffered in the Reply Brief does not contradict the key points here. The district court correctly found, and we agree, that the undisputed facts show that. Melissa was more than 50 percent responsible for the fatal accident. This finding, in turn, entitled Conrail to judgment as a matter of law.

We therefore Affirm the judgment of the district court.


author: POSNER, Chief Judge.

text:
    OLD REPUBLIC INSURANCE COMPANY, Plaintiff-Appellee, Cross-Appellant, v. CHUHAK & TECSON, P.C., Edwin Josephson, and Michael Kearns, Defendants-Appellants, Cross-Appellees. OLD REPUBLIC INSURANCE COMPANY, Plaintiff-Appellant, v. CHUHAK & TECSON, P.C., Edwin Josephson, and Michael Kearns, Defendants-Appellees.
    Nos. 95-1638, 95-1663, 95-1779 and 95-4093.
    United States Court of Appeals, Seventh Circuit.
    Argued April 17, 1996.
    Decided June 3, 1996.

      Robert F. Daley, Phelan, Cahill & Quinlan, Chicago, IL, Steven D. Pearson (argued), Bates, Meckler, Bulger & Tilson, Chicago, IL, for Old Republic Ins. Co., in Nos. 95-1638 and 95-1779.
    Alan R. Dolinko (argued), Cary S. Fleischer, Thomas W. Hargrove, Chuhak & Tecson, Chicago, IL, for Chuhak & Tecson, P.C. and Edwin I. Josephson.
    Robert F. Daley, Phelan, Cahill & Quinlan, Chicago, IL, Bruce R. Meckler, Steven D. Pearson (argued), Bates, Meckler, Bulger & Tilson, Chicago, IL, for Old Republic Ins. Co., in No. 95-1663.
    Jeffrey M. Goldberg, Lawrence R. Kream (argued), Goldberg & Associates, Chicago, IL, for Michael Kearns.
    Steven D. Pearson (argued), Anne L. Blume, Bates, Meckler, Bulger & Tilson, Chicago, IL, for Old Republic Ins. Co., in No. 95-4093.
    Before POSNER, Chief Judge, and CUMMINGS and COFFEY, Circuit Judges.
   POSNER, Chief Judge.

We have consolidated for argument and decision the appeals in two cases, virtually identical, mysteriously assigned to two different judges of the same district court — who reached opposite results, the second judge disagreeing so violently with the first that he imposed sanctions on the plaintiff in the second ease for relying on the first judge’s opinion.

The cases are diversity suits governed by Illinois law. They involve a dispute between an insurance company, Old Republic, on the one hand, and, on the other, a lawyer named Josephson; the law firm, Chuhak & Tecson, of which he was a member; and an individual named Michael Kearns, who has sued Josephson for legal malpractice. A narrative of the events leading up to the district judges’ decisions will quickly disclose the proper disposition of the appeals.

Kearns, injured in a construction accident in 1986, retained Josephson, who was then a partner in the law firm of Mass, Miller and Josephson, to prosecute a tort claim estimated by Kearns to be worth several hundred thousand dollars. In 1989 Josephson left Mass, Miller and Josephson and became a partner in Chuhak & Tecson. Old Republic had insured Chuhak & Tecson, along with any person, such as Josephson, “who is or becomes a partner, officer, director or employee” of Chuhak & Tecson, against liability claims made during the policy period that arose out of professional services rendered by such persons “in connection with [Chuhak & Tecson’s] practice of law.”

In 1991, Kearns brought a suit for malpractice against Josephson in an Illinois state court, claiming that Josephson had failed to file suit on Kearns’s tort claim within the two-year statute of limitations for filing such a suit, which had expired in 1988. Josephson tendered the defense of the claim to Old Republic. Old Republic responded by filing a suit in federal district court against Josephson, Chuhak & Tecson, and Kearns, seeking a declaration that it was not required to defend Josephson because his alleged malpractice in failing to file a timely suit on Kearns’s behalf had occurred before he joined Chuhak & Tecson and hence could not have arisen out of professional services in connection with that firm’s practice of law. This, the first of the two suits that these appeals bring before us, was assigned to Judge Norgle. Defending against the suit, Chuhak & Tecson pointed out that Kearns’s complaint, was probably in error in alleging that the applicable statute of limitations was two years; it was four. This would mean that the claim for malpractice had not arisen until 1990 (when the time for filing Kearns’s suit expired), by which time Josephson was practicing with Chuhak & Tecson. Judge Norgle nevertheless granted summary judgment for Old Republic. His ground was that there had been no showing that Kearns had ever become a client of Chuhak & Tecson; and if he had not, then Josephson’s alleged malpractice was not “in connection with” the firm’s practice of law and so was not covered by the policy. The defendants appealed, while Old Republic filed a conditional cross-appeal complaining of an order by Judge Norgle that had prevented it from conducting discovery aimed at uncovering the details of Josephson’s employment contract with Chuhak & Tecson. These are the appeals numbered 95-1638, 95-1663, and 95-1779 in this court.

Judge Norgle rendered his decision in 1994. The following year Kearns dismissed the state court suit against Josephson that he had filed in 1991, but within a few days he filed a fresh suit, much like the old, against Josephson. The new suit acknowledged the applicability of the four-year statute of limitations, thus pushing the alleged malpractice into the period in which Josephson was a member of Chuhak & Tecson, and alleged “that after his association with the firm of Chuhak & Tecson, defendant, Edwin Josephson, committed the acts or omissions described in this complaint as an agent and/or employee of the firm of Chuhak & Tecson.” Josephson tendered the defense of Kearns’s new suit to Old Republic, which responded by filing its second declaratory judgment suit, relying on Judge Norgle’s decision in the first suit. This second suit was randomly assigned to Judge Shadur, who turned down Old Republic’s motion to transfer it to Judge Norgle on the ground that although the suits were related, the rules of the U.S. District Court for the Northern District of Illinois forbid assigning a related case to the same judge if the case before that judge is no longer “pending.” N.D. Ill. R. 2.31(b)(1). But the first suit was pending, albeit in our court rather than in the district court. (We have found no case discussing the meaning of “pending” in the rule.) Having refused to relinquish the case, Judge Shadur, emphasizing the language that we have quoted from the complaint in Kearns’s new suit, quickly disposed of it, holding that Old Republic is obligated to defend Josephson against the suit and sanctioning Old Republic for filing the second declaratory judgment action in bad faith. Old Republic appeals from both the judgment on the merits and the imposition of sanctions. This is the appeal numbered 95-4093.

Primarily as a result of Judge Shadur’s refusal (arguably under compulsion of the district court’s rule) to transfer the second ease to Judge Norgle, we have had to wade through 286 pages of briefs in a straightforward dispute over the obligation to defend under an insurance policy. And we have had to endure the spectacle of one judge imposing sanctions on a party for relying on the opinion of another judge of the same court in a nearly identical case. A procedure at once so redundant and so unseemly mocks the efforts of the federal judiciary to reassure skeptics that we are trying with some success to achieve expedition and economy in the judicial process. The doctrine of collateral estoppel, which requires only a judgment that is final in the court rendering it, and not a judgment that is final after exhaustion of appellate remedies, Prymer v. Ogden, 29 F.3d 1208, 1213 n. 2 (7th Cir.1994); Williams v. Commissioner, 1 F.3d 502, 504 (7th Cir.1993), might have abbreviated the second suit; but Old Republic has not pleaded collateral estoppel, so the issue is waived.

The appeals from Judge Norgle’s decision in Old Republic’s first declaratory judgment suit may appear to be moot because the suit that Josephson wanted Old Republic to defend, Kearns’s 1991 suit against him, has been dismissed. There is no longer anything to defend. But Josephson argues that he incurred substantial costs of defending the suit before it was dismissed. If Old Republic had a duty to defend that suit, it has a duty to reimburse Josephson for those costs. So Old Republic’s suit, while moot insofar as any further duty to defend against Kearns’s 1991 suit is concerned, is not moot concerning responsibility for the costs of defense already incurred.

We think that Old Republic did have a duty to defend that suit, and hence that Judge Norgle’s decision to the contrary was erroneous. The duty to defend imposed by liability insurance contracts that obligate the insurer to bear the expense of defending as well as indemnifying the insured against claims of liability has been interpreted to be broader than the duty to indemnify. Crum & Forster Managers Corp. v. Resolution Trust Corp., 156 Ill.2d 384, 189 Ill.Dec. 756, 762, 620 N.E.2d 1073, 1079 (1993); Transcontinental Ins. Co. v. National Union Fire Ins. Co., 278 Ill.App.3d 357, 214 Ill.Dec. 934, 942, 662 N.E.2d 500, 508 (1996). If the suit against the insured contains claims arguably covered by the policy, the insurance company must defend. The burden on the insured would be great if he had to pay a lawyer both to defend himself against the liability claim and litigate close questions of coverage with the insurer.

Kearns’s 1991 suit named as the defendant a lawyer employed by Chuhak & Tecson and hence presumptively insured under the policy that Old Republic had issued to the firm. The suit seemed, however, to relate to an act of malpractice committed in 1988 and hence before the defendant joined Chuhak & Tecson, for by 1988 two years had elapsed from the date of Kearns’s accident without Josephson’s having sued on his behalf, and a claim for malpractice based on failing to sue within the statute of limitations accrues when the period allowed by the statute of limitations for suit expires.

Old Republic therefore had a solid basis for seeking a declaration that it had no duty to defend because the alleged malpractice was clearly beyond the scope of the policy. But when the insured countered with evidence that the applicable statute of limitations was four years, not two, the picture changed. Kearns could easily amend, and could be expected to amend, his complaint to change the date of the alleged malpractice from 1988 to 1990, after Josephson became an insured under the policy. In fact Kearns did this, in an amended complaint filed in the 1991 suit before he, for reasons that are unclear to us, dropped that suit and instituted a new one in 1995. All that Old Republic was left to argue was that maybe Josephson, even after joining Chuhak & Tecson, hadn’t represented Kearns “in connection with” Chuhak & Teeson’s business. Maybe representation of Kearns was a frolic of Josephson’s own. Maybe. But a maybe doesn’t cancel the duty to defend. The administration of legal malpractice insurance would be greatly encumbered if every time an employee of an insured firm, and hence an additional insured, tendered a defense to the insurer, the insurer filed a declaratory judgment suit to explore the (remote) possibility that the employee had not been acting within the scope of his employment when he committed the alleged act of malpractice. And not only malpractice insurance. If a truck driver while driving one of his employer’s trucks runs down a pedestrian and the employer tenders the defense of the pedestrian’s claim to its liability insurer, the latter will not be warranted in filing a declaratory judgment action to determine whether the driver might have been on a frolic or detour of his own, unless there is a good reason to suspect that. (Oddly, there is authority in Illinois that an automobile liability insurance policy covers frolics and detours, Farmers Automobile Ins. Ass’n v. Iowa Mutual Ins. Co., 77 Ill.App.2d 172, 221 N.E.2d 795 (1966); Harry W. Kuhn, Inc. v. State Farm Mutual Automobile Ins. Co., 201 Ill.App.3d 395, 147 Ill.Dec. 45, 49, 559 N.E.2d 45, 49 (1990); U.S. Fidelity & Guaranty Co. v. Millers Mutual Fire Ins. Co., 396 F.2d 569, 572 (8th Cir.1968) (applying Illinois law), though none of the parties to the present suits argues that the malpractice policy that Old Republic issued to Chu-hak & Tecson did.)

The policy does not exclude claims arising out of legal services filed before an additional insured joined the firm. Nor is there any indication that Josephson had tail coverage from the liability insurer of his old firm. Old Republic never has explained why it suspected that Josephson may not have been working for Chuhak & Tecson when he was representing Kearns after joining the firm. Nothing is more common nowadays than for a lawyer to leave one firm for another, carrying his clients from his old firm to the new. Indeed, a lawyer who comes to a new firm without any clients is a much less attractive commodity. Chuhak & Tecson might not have hired Josephson as a partner unless he brought his clients with him.

Against this it can be argued—it is the basis of Old Republic’s conditional cross-appeal—that the insurer should be entitled to engage in pretrial discovery to learn the details of Josephson’s relationship with Chu-hak & Tecson. Maybe Josephson was permitted to retain Kearns as his “private” client, rather than as a firm client. The question could be resolved definitively by pretrial discovery. But this would put Josephson in the awkward position of having to retain counsel to defend himself, in what might be protracted fact-intensive litigation, against the very insurer to whom he is looking to pick up the tab for his defense against Kearns. Instead of litigating one suit at Old Republic’s expense he would be litigating two suits at his own expense. The insurer can without liability put the insured into this uncomfortable position if it has a strong reason to believe, prior to conducting pretrial discovery, that the insured really isn’t insured against the particular claim whose defense he’s tendered to the insurer. The insurer must be allowed to show that the so-called insured is a stranger to the policy, 1 Allan D. Windt, Insurance Claims & Disputes: Representation of Insurance Companies and Insureds para. 4.05 (3d ed.1995), and this will sometimes require discovery to obtain necessary evidence. But no one reading Kearns’s complaint would so doubt that Josephson had represented Kearns in the course of Josephson’s employment by Chu-hak & Tecson as to be justified in putting Josephson and the law firm to the expense of responding to requests for discovery.

A further reason not to permit discovery and hence not to go behind the complaint to find out whether Josephson is really covered by Old Republic’s policy is that discovery might well undermine possible defenses by Josephson and by the other partners of Chu-hak & Tecson against Kearns’s suit for malpractice. True, Kearns’s complaint does not name the law firm or its members as defendants. That may be why Kearns’s lawyer wants to establish Old Republic’s coverage badly enough to join in this litigation, as he is, however, authorized to do. But we cannot think of any reason for Kearns’s having alleged in his new suit that Josephson was acting within the scope of his employment by Chuhak & Tecson unless he wants, perhaps by an amendment to the complaint (he amended his complaint in the earlier suit three times before dropping it), or by post-judgment collection proceedings, to go against Chuhak & Tecson or its partners as well as Josephson. Chuhak & Tecson is a professional corporation, and under Illinois law the liability of a professional corporation for the conduct of its agents is governed by the principles applicable to ordinary corporations rather than by partnership principles. 805 ILCS 10/8. Professional corporations engaged in the practice of law, however, must provide in their articles of incorporation that their partners (technically, “shareholders or members”) shall be jointly and severally liable for acts or omissions of other shareholders or members “arising out of the performance of professional services by the corporation.” Ill. S.Ct. R. 721(d); see 805 ILCS 10/16.

Whether Kearns, if he develops any doubts about Old Republic’s coverage, goes after the law firm itself under the doctrine of respon-deat superior, or its partners under Rule 721(d), in order to be sure of being able to collect any judgment he obtains (Chuhak & Tecson appears to be a substantial firm, with, at last count, 37 lawyers), he will have to prove that Josephson was acting within the scope of his employment by the firm when he committed the alleged malpractice. If Kearns proceeds in this fashion and doubts persists regarding Old Republic’s duty to indemnify Chuhak & Tecson or its members (a duty that, remember, is narrower than the duty to defend), the firm may wish to defend against Kearns’s suit by trying to prove that Josephson was not acting within the scope of his employment when he dropped the ball in 1990. This defense might be shipwrecked if the pretrial discovery that the insurer wanted to conduct turned up evidence that Josephson had indeed been acting within the scope of his employment by the firm.

This analysis confirms the good sense of the general rule that the insurer’s declaratory judgment suit is not a proper vehicle for resolving factual issues in the underlying suit against the insured. 2 Windt, supra, para. 8.04. That rule implies, a fortiori, strict limits on the scope of pretrial discovery in such suits.

Judge Shadur was correct to think Old Republic’s second declaratory judgment suit even weaker than the first. Kearns’s 1995 suit explicitly alleged that Josephson had committed malpractice within the scope of his employment—no other meaning can be assigned to the allegation that Josephson “committed the acts or omissions described in this complaint as an agent and/or employee of the firm of Chuhak & Tecson.” The allegation was merely implicit in the 1991 suit. But so what? All that is necessary to trigger the duty to defend is that the claim be within the arguable scope of the insurance policy, which the first claim was once it became clear that a four-year rather than a two-year statute of limitations was applicable to Kearns’s tort claim.

Old Republic makes the further contention that Josephson’s representation of Kearns falls within an exclusion in the policy for claims arising out of the conduct of any “organization”—other than the insured firm itself—of which the additional insured is an owner, partner, manager, or employee, or which he controls. Kearns had another lawyer besides Josephson, and the two lawyers agreed to divide any fees that might result from their representation of Kearns in his tort claim against his injurer. Old Republic argues that the fee-splitting arrangement created an “organization,” consisting of the two lawyers, which, since Josephson was a member, fell within the exclusion. If this were what the policy meant, it would exclude coverage of Kearns’s claim even if Kearns were an old Chuhak client whom the firm had assigned to Josephson, at the same time agreeing to split fees with Kearns’s other lawyer. The consequence of the interpretation urged by Old Republic would be a huge gap in Chuhak’s insurance coverage, with no basis in the customs or economics of liability insurance that has been suggested or that we can think of.

Although the second suit brought by Old Republic (notice how Kearns’s tort claim has spawned four separate lawsuits— the fertility of the American legal system is certainly remarkable) was weaker than the first, we do not think that Judge Shadur acted reasonably in punishing Old Republic for having sued in bad faith. At the time the suit was filed, Judge Norgle had just held that Old Republic had no duty to defend Josephson because Josephson had faded to establish that he was acting within the scope of his employment by Chuhak & Tecson when he committed the alleged malpractice. Kearns’s new suit did not establish—it merely alleged—that Josephson had been acting within the scope of that employment, so if, as Old Republic hoped, its second suit was assigned to Judge Norgle, it could expect to prevail once again. So similar are the two cases that, despite Judge Shadur’s emphatic disclaimers, the award of sanctions against Old Republic for relying on Judge Norgle’s decision came perilously close to pronouncing Judge Norgle’s decision sanctionable. Although decisions by district judges do not have the force of precedent, Mueller v. Reich, 54 F.3d 438, 441 (7th Cir.1995); Anderson v. Romero, 72 F.3d 518, 525 (7th Cir.1995), a plaintiff who sues in reliance on an unreversed district judge’s decision in a closely related and in fact nearly identical case will rarely be open to an accusation of having acted in bad faith, or, more precisely, since Illinois law defines the bad faith of an insurance company in litigating with its insured, as having been “vexatious and unreasonable.” 215 ILCS 5/155(1). Old Republic’s argument for the “organization” “exclusion was frivolous (and not endorsed by Judge Norgle), but was not the basis for the sanctions award and is too short a tail to wag this litigation, which we hereby declare at an end.

The judgment in favor of Old Republic is reversed and the judgment against it affirmed. Old Republic’s conditional cross-appeal is dismissed as moot. The order awarding sanctions is reversed. Costs in this court will be awarded to the defendants.

So Ordered.


author: FLAUM, Circuit Judge.

text:
    UNITED STATES of America, Plaintiff-Appellee, v. Roland Felix EYOUM, Defendant-Appellant.
    No. 95-2781.
    United States Court of Appeals, Seventh Circuit.
    Argued Feb. 8, 1996.
    Decided June 5, 1996.

      Barry Rand Elden, Chief of Appeals, Juanita S. Temple (argued), Office of the U.S. Atty., Criminal Appellate Division, Chicago, IL, for U.S.
    Mary M. Rowland, Andrea E. Gambino (argued), Office of the Federal Defender Program, Chicago, IL, for Roland F. Eyoum.
    Before ESCHBACH, FLAUM, and MANION, Circuit Judges.
   FLAUM, Circuit Judge.

Roland Eyoum pled guilty to knowing receipt, concealment, and sale of illegally imported merchandise, specifically pancake tortoises, in violation of 18 U.S.C. § 545. He challenges the enhancement of his sentence under the Sentencing Guidelines (U.S.S.G.) § 2Q2.1(b)(3)(A) for the value of the tortoises and the additional enhancement under U.S.S.G. § 2Q2.1(b)(2) for the creation of a significant risk of infestation or disease. We affirm the district court’s calculation of his sentence.

I.

Eyoum was involved in the illegal importation of pancake tortoises from Tanzania. Specifically, Eyoum pled guilty to illegally importing 131 pancake tortoises in December of 1994. At the time of the offense, it was unlawful to import pancake tortoises into the United States without a valid export certificate from the country of origin. Since 1992, however, Tanzania has banned the exportation of these tortoises and will not issue export papers. Thus Eyoum’s tortoises were imported illegally.

The tortoises were sent to Eyoum from his brother in Tanzania and were to be picked up at O’Hare International Airport. They were sent over in secret compartments in four crates. Import documents stated that these crates only contained other exotic animals, specifically ten springhares and two genets. When the crates arrived at O’Hare on December 9, 1994, they were transferred to a “wildlife rehabilitator” because protruding nails inside the crates had injured some of the springhares and genets, and they were bleeding. On December 14, three of the four crates were returned to O’Hare (one remained with the rehabilitator), where Eyoum took custody of them and one day later shipped them to an organization called “The Reptile Service,” in Deerfield Beach, Florida. On December 22, agents of the United States Fish and Wildlife Service (USFWS) discovered the illegally imported tortoises at The Reptile Service and were told by Rian Gitt-man, a reptile wholesaler and the principal officer of the business, that the tortoises had all come from Eyoum. Some of these tortoises were less than four inches in carapace (shell) length, the commercial importation of which has been prohibited since 1975 for public health reasons. 42 C.F.R. § 71.52. In total, the USFWS agents discovered 81 tortoises at The Reptile Service that had been originally imported by Eyoum. A letter from The Reptile Service to Eyoum, subsequently recovered by Florida USFWS agents, revealed that Eyoum and the store had agreed to a price of $50 each for the tortoises.

On January 13, 1995, the Florida agents notified the Wildlife Inspector of Chicago that Eyoum had smuggled pancake tortoises into the United States via false compartments in the crates received at O’Hare in December. By January 14, 1995, when the inspector examined the fourth crate at the home of the wildlife rehabilitator, the 51 pancake tortoises secreted therein were all dead. Of these tortoises, 27 had a carapace length of less than four inches.

On April 14, 1995, Eyoum pled‘guilty to the second count of a two-count indictment against him. He pled guilty to knowingly receiving, selling; and facilitating the transportation, concealment, and sale of imported pancake tortoises, knowing that they had been imported unlawfully, in violation of 18 U.S.C. § 545. At his sentencing Eyoum received an enhancement under U.S.S.G. § 2Q2.1(b)(3)(A), based on the market value of the illegally imported tortoises. The district court found that the fair-market retail price of the tortoises was $298 each, resulting in a total market value of $39,038 for the 131 tortoises and a four-level enhancement. Ey-oum also received a two-level enhancement under U.S.S.G. § 2Q2.1(b)(2) for committing an offense that created a significant risk of infestation or disease. Eyoum was sentenced to twelve months and one day imprisonment, with three years of supervised release. He challenges both enhancements.

II.

Eyoum’s challenge to the four-level market value enhancement under § 2Q2.1(b)(3)(A) has two parts. First, he argues that the market value enhancement should have been calculated using the $50 amount for which he agreed to sell the tortoises. This price would have resulted in a market value of $6550 for the tortoises and an enhancement of only two levels, rather than four. Second, Eyoum argues that, even accepting the government’s approach to calculating market value, the $298 price used by the district court was inflated because it was arrived at by averaging price lists that included prices for tortoises that were worth more than the tortoises he imported.

Because the meaning of “market value” within § 2Q2.1 (b)(3)(A) involves a legal determination of the meaning of Guidelines language, we review the district court’s interpretation of this term de novo. United States v. Hayes, 5 F.3d 292, 294 (7th Cir.1993); United States v. Cojab, 978 F.2d 341, 343 (7th Cir.1992). The district court rejected the $50 price negotiated by Eyoum and instead determined the “market value” of the illegally imported tortoises by averaging the prices of Florida reptile dealers (and one Texas dealer). Eyoum argues that since he only received $50 apiece for the tortoises, it is unfair to sentence him according to a price of $298 apiece. He maintains that the most appropriate way of calculating the “market value” of the tortoises under § 2Q2.1(b)(3)(A) is to look to the price agreed upon by a willing seller (himself) and a willing buyer (The Reptile Service).

This argument has logical force and initially seems plausible. Unfortunately for Eyoum, it runs squarely against the meaning of “market value” under § 2Q2.1(b)(3)(A). Application Note 4 to this section states as follows: “When information is reasonably available, ‘market value’ under subsection (b)(3)(A) shall be based on the fair-market retail price. Where the fair-market retail price is difficult to ascertain, the court may make a reasonable estimate using any reliable information, such as the reasonable replacement or restitution costs_” U.S.S.G. § 2Q2.1 App. Note 4 (emphasis added). Ey-oum offers no argument that this commentary violates the Constitution or a federal statute, or that it is an inconsistent or plainly erroneous reading of the Guidelines language; and we do not find that the commentary suffers from any of these defects. Consequently, the language of Application Note 4 is authoritative and constitutes a binding interpretation of the meaning of “market value” within § 2Q2.1(b)(3)(A). Stinson v. United States, 508 U.S. 36, 37-39, 113 S.Ct. 1913, 1915, 123 L.Ed.2d 598 (1993); United States v. Krzeminski, 81 F.3d 681, 684 (7th Cir.1996).

Eyoum does not argue that the $50 price he negotiated with The Reptile Service represents the fair-market retail price for pancake tortoises at the time. He essentially admits that this was a “smuggler’s price,” which one would expect to be less than both the wholesale and the retail prices for the same goods. Thus the application note precluded the district court from calculating the market value of the tortoises as the $50 smuggler’s price, rather than the fair-market retail price. Eyoum relies heavily on United States v. Brookins, 52 F.3d 615 (7th Cir.1995), where we affirmed the use of a “thieves’ market” price in the calculation of the market value of stolen goods under 18 U.S.C. § 659. In that case the statute required that the stolen goods be worth more than $100, and the evidence revealed that persons involved in the theft of the video camera had stated to would-be purchasers that it’s value was between $350 and $600. Brookins himself had said that he could get at least $400 for the video camera. We found that these statements by the thieves were enough to establish that the value of the stolen video camera was greater than $100. A precise determination of the market value of the stolen goods was not necessary in that case, so there was no comparison of this “thieve’s price” with a retail price— which could not be precisely determined because the video camera was never recovered. The use of the thieve’s price in Brookins, which the defendants in that case opposed, does not imply that the district court would have been required to use that price if the retail price had been available and an exact market value determination had been necessary. Furthermore, our Brookins discussion of “market value” under 18 U.S.C. § 659 does not determine the meaning of “market value” under U.S.S.G. § 2Q2.1(b)(3)(A), which is specifically given the meaning of “fair-market retail value” under the application notes.

In United States v. Clark, 986 F.2d 65 (4th Cir.1993) (upholding use of defendant’s own estimate of market value of illegal tiger skin rugs for calculating market value under § 2Q2.1(b)(3)(A)), and United States v. Atkinson, 966 F.2d 1270 (9th Cir.1992) (upholding use of defendant’s price for illegal hunting expedition for calculating market value of animal killed during guided hunt under § 2Q2.1 (b)(3)(A)), cert. denied, 507 U.S. 1004, 113 S.Ct. 1644, 123 L.Ed.2d 266 (1993), defendants were held responsible (over their own objections) for the illegal price at which they had offered the illegal goods. In those cases distinct retail prices were not reasonably available, and the district court was entitled to estimate the market value prices by the information that was available. See U.S.S.G. § 2Q2.1 App. Note 4 (“Where the fair market retail price is difficult to ascertain, the court may make a reasonable estimate using any reliable information ... ”). The fact that poachers, thieves, and smugglers can be held accountable at sentencing for the price at which they value their own merchandise does not mean that a court cannot determine that the fair-market retail price of the illegal goods was greater than the price such persons personally received for the goods. The price the crook received may be a floor at sentencing, but it is not a ceiling. See also United States v. Borden, 10 F.3d 1058, 1063 (4th Cir.1993) (looking to market value of the illegal goods, rather than the defendant’s profit in selling them).

Eyoum also complains that the district court’s calculation of the market value of the tortoises resulted in an inflated price. We review such factual findings only for clear error. United States v. Banks, 78 F.3d 1190, 1208 (7th Cir.1996); United States v. Hickok, 77 F.3d 992, 1007 (7th Cir.), cert. denied, — U.S. -, 116 S.Ct. 1701, 134 L.Ed.2d 800 (1996). The district court’s finding that the pancake tortoises were worth $298 each was determined by averaging the pancake tortoise prices from the price lists of five reptile dealers—four in Florida and one in Texas. In addition, Special Agent Bepler of the Miami USFWS testified that $298 was a fair retail price for pancake tortoises in Florida. Eyoum did not offer any price lists beyond those put forward by the government, choosing to rely instead on his argument that $50 was the proper market value.

Eyoum complains that the $298 price determination was clearly erroneous because the price lists that were averaged 1) included prices for pancake tortoises that were “captive raised” and “captive bred,” 2) included non-retail prices, and 3) included a price list from a Texas dealer, though Eyoum never sold any tortoises to Texas dealers. “Captive bred” tortoises are tortoises that were hatched and raised in captivity. “Zoo raised” and “captive raised” tortoises are tortoises that may have been born in the wild, but have been raised in captivity. Eyoum maintains that such tortoises are substantially more expensive than tortoises that are simply caught, imported, and sold because the imported tortoises were not fed and cared for from a young age and are more likely to be scarred or irregular in markings. There are two major problems with Eyoum’s argument. First, the government put on evidence at sentencing that advertising imported tortoises as “captive bred” was a common ruse among reptile dealers for selling tortoises for which they did not have legal papers, in order to avoid detection of illegal importation activities and garner higher prices. In fact, Agent Bepler testified that when he investigated Rian Gittman of The Reptile Service, to whom Eyoum had sold his tortoises, Gitt-man admitted that though he advertised captive bred tortoises, he sold only imported tortoises and had never bred pancake tortoises or purchased captive bred tortoises. Second, even if the court had looked only to the price list of The Reptile Service itself, at which adult pancake tortoises were advertised at $175 each (with certain volume discounts), the overall market value of 131 tortoises at this price would be $22,925, i.e., still in the four-level enhancement range.

Eyoum’s argument that some of the prices used were wholesale prices, rather than retail prices, is a strange one, since he does not deny that wholesale prices are generally lower than retail prices. Thus the use of wholesale prices could only have decreased the overall average price, potentially benefitting Eyoum by resulting in a lower overall market value and corresponding enhancement range.

Finally, the use of the price list from the Texas dealer had no impact on Eyoum’s sentencing enhancement and so did not prejudice him. If the average pancake tortoise price is calculated using only the Florida dealers, the overall market value would still have been in the $20,000-$40,000 range, resulting in the same four-level enhancement. Furthermore, Eyoum did not propose any alternative prices lists or an alternative fair-market retail price. We conclude that the district court’s calculation of the four-level market value enhancement under U.S.S.G. § 2Q2.1(b)(3)(A) was proper and not clearly erroneous.

Eyoum also challenges the two-level enhancement of his sentence under U.S.S.G. § 2Q2.1(b)(2), which states: “If the offense (A) involved fish, wildlife, or plants that were not quarantined as required by law; or (B) otherwise created a significant risk of infestation or disease transmission potentially harmful to humans, fish, wildlife, or plants, increase by 2 levels.” The district court found that Eyoum’s importation of tortoises with a carapace length of less than four inches created a significant risk of infestation or disease to humans. The court based this finding on 42 C.F.R. § 71.52, the public health regulation prohibiting the importation of viable turtle eggs and live turtles with a carapace length of less than four inches. The regulation went into effect in 1975, after it was determined through epidemiological studies that small pet turtles were a significant source of Salmonella and Arizona bacteria. These studies estimated that some 280,-000 human cases of salmonellosis per year were turtle associated. Mitchell L. Cohen et al., Turtle-Associated Salmonellosis in the United States: Effect of Public Health Action, 1970 to 1976, 243 JAMA 1247 (1980). Children were found to be particularly susceptible to sickness due to Salmonella and Arizona bacteria carried by their pet turtles. The federal public health regulation, which followed various local and state attempts to regulate the sale of turtles as pets, id., was designed to address this serious health problem.

The district court relied on the 42 C.F.R. § 71.52 prohibition to find that Eyoum’s offense created a significant risk of infestation or disease under U.S.S.G. § 2Q2.1(b)(2). Ey-oum objects to the two-level enhancement of his sentence under this section, arguing that the government did not establish that his offense created such a risk. He points out that the under-four-inch tortoises he imported were not actually tested for Salmonella or Arizona bacteria and that if they did not carry any such bacteria, they did not pose any risk of infestation or disease — let alone a significant risk of infestation or disease. He maintains that the district court improperly focussed on potential rather than actual risk.

We conclude that U.S.S.G. § 2Q2.1(b)(2) does not require the government to establish that the specific animals or wildlife involved were actually diseased or infested. Where a federal public health regulation forbids the importation of a whole category of animals due to the substantial risk that they will spread illness-causing bacteria, a district court can reasonably conclude that the illegal importation of such animals creates a significant risk of infestation or disease. This interpretation corresponds with the language of § 2Q2.1(b)(2), which refers to the creation of “a significant risk of infestation or disease transmission potentially harmful to humans, fish, wildlife, or plants” (emphasis added). Accordingly, the government need not prove that the offense conduct actually resulted in disease transmission or that it was necessarily harmful or dangerous to people, plants, or animals. The public health regulation itself represents an administrative finding that the commercial importation of small turtles — because they are likely to be sold as pets for children— creates a significant risk of disease to humans. The district court was entitled to rely on this regulatory conclusion to support the two-level enhancement in Eyoum’s sentence.

For the foregoing reasons, we Affirm the district court’s enhancement of Eyoum’s sentence under U.S.S.G. § 2Q2.1(b).

      . Since February of 1995 the importation of pancake tortoises into the United States has been totally banned, due to their endangered status.

      . A springhare is a large, rabbit-like but short-eared animal that resembles a large gerbil. A genet is a small carnivorous animal related to the civet cat and is characterized by a long body and short legs. Both animals are indigenous to Africa.

      . The relevant language of 18 U.S.C. § 545 states as follows:
      Whoever fraudulently or knowingly imports or brings into the United States, any merchandise contrary to law, or receives, conceals, buys, sells, or in any manner facilitates the transportation, concealment, or sale of such merchandise after importation, knowing the same to have been Imported or brought into the United States contrary to law ... [s]hall be fined under this title or imprisoned not more than five years, or both.

      .Under U.S.S.G. § 2Q2.1(b)(3)(A), the sentencing court is directed to increase the base offense level according to the table in U.S.S.G. § 2F1.1 "if the market value of the fish, wildlife, or plants [involved in the offense] exceeded $2000.” According to the § 2F1.1 table, the enhancement is one level for amounts from $2000-$5000, two levels for amounts from $5000-410,000, three levels for amounts from $10,000-$20,000, four levels for amounts from $20,000-$40,000, etc.

      . Charles Bepler, a Special Agent for the USFWS in Miami, Florida, who was involved in investigating the illegal importation and sale of pancake tortoises in Florida, testified at Eyoum's sentencing hearing that the prices for smuggled animals (and pancake tortoises in particular) rise as they go from smuggler to wholesaler to retailer.

      . In addition, Eyoum acknowledges in his brief that when demand is high and supply is low, the market value of imported tortoises may equal that of captive bred tortoises.

      . The Reptile Service advertised captive born babies at only $150 each, but Eyoum can hardly ask us to look to this price when he objects to the use of other price lists that advertise captive bred and captive raised tortoises.

      . "Turtles'' is defined in the regulation to include turtles, tortoises, and terrapins. 42 C.F.R. § 71.52(a). The regulation allows for the legal importation of viable eggs and live turtles under four inches in carapace length only 1) in lots of less than seven for non-commercial purposes and 2) for bona fide scientific and educational purposes, when accompanied by a permit. A permit application must include, among other things, “the precautions to be undertaken to prevent infection of members of the public with Salmonella and Arizona bacteria.” 42 C.F.R. § 71.52(d). And a permit will be issued only upon a finding that the holder of the permit will implement adequate precautionary health measures in this regard. 42 C.F.R. § 71.52(e).

      . The notice in the Federal Register announcing the requirements of the new regulation stated that "[t]he sole objective of this regulation is to protect the public, especially children, from contaminated pet turtles.” 40 Fed.Reg. 22543 (May 1975) (codified at 42 C.F.R. § 71.52).


author: FAGG, Circuit Judge.

text:
    Cynthia J. McNEILL, formerly known as Cynthia J. Franke, Appellant, v. William E. FRANKE, doing business as Gannon Partnership 19, L.P.; Gannon Partnership 19, L.P.; Kevin W. Kelly; Pentad Properties, Inc., formerly known as Kemmons Wilson Properties, Inc., doing business as St. Louis Associates Limited Partnership, formerly known as St. Louis Associates, Ltd.; St. Louis Associates Limited Partnership, formerly known as St. Louis Associates, Ltd.; Phillip J. Paster; Department of Housing and Urban Development, agent Jack Kemp; West Pointe Limited Partnership; Northwest Village Limited Partnership; Grandview Hills Limited Partnership; Park Ridge Apartments Limited Partnership; Lamplite Limited Partnership, Appellees.
    No. 95-1235.
    United States Court of Appeals, Eighth Circuit.
    Submitted Dec. 11, 1995.
    Decided May 29, 1996.

      Thomas 6. Berndsen, St. Louis, MO, argued (Charles F. Dufour, on the brief), for appellant.
    Joe D. Jackson, St. Louis, MO, argued (F. Guthrie Castle, Jr., Martin M. Green and Mitchell A. Margo, on the brief), for appel-lees.
    Before FAGG, HEANEY, and WOLLMAN, Circuit Judges.
   FAGG, Circuit Judge.

Cynthia J. McNeill appeals the district court’s dismissal of her action for declaratory relief and judicial foreclosure, and the denial of her motion for summary judgment. We reverse the dismissal and remand for further proceedings.

This case involves a $57.3 million promissory note and deed of trust allocated between McNeill and her former spouse, William E. Franke, in a February 1988 Missouri divorce decree. The note was on the sale of five apartment complexes to St. Louis Associates, Ltd. (SLA). A deed of trust on the apartments secured the note’s repayment. In turn, Franke and McNeill owed almost $40 million on an insurance company loan and industrial bonds. The divorce decree awarded McNeill a 20% undivided ownership interest in the note as a tenant in common with Franke. W.E.F. v. G.J.F., 793 S.W.2d 446, 459 (Mo.Ct.App.1990). The decree stated McNeill’s interest extended to all rights of ownership in the apartments in the case of foreclosure. Thus, McNeill’s 20% interest included the security provided by the deed of trust. The decree ordered the parties to divide receipts of principal and interest on the note in proportion to their percentage interests, after making payments on the underlying debt. Because on its face the note was payable only to Franke, the decree ordered Franke to pay McNeill 20% of the net principal and interest payments received each month. The divorce decree prohibited Franke and McNeill from changing the note’s terms and conditions, including the provisions about the amount, terms, and method of payment, without each other’s written consent. McNeill filed a notice with the appropriate deed recorder to warn all persons of her ownership interests in the note, deed of trust, and apartment complexes.

Despite the divorce decree’s terms, Franke never paid McNeill any part of the monthly note receipts. In addition, between November 1988 and February 1989, Franke refinanced all indebtedness on the property without McNeill’s consent. As part of the refinancing transactions, record title to the apartments was transferred from SLA to five limited partnerships, for which SLA was the sole limited partner. The partnerships obtained a new loan from a predecessor in interest to the Department of Housing and Urban Development (HUD), and the underlying debt was paid off. Franke signed deeds of release stating the apartment complexes no longer secured the note’s repayment, and deeds of trust on the apartment complexes were given to HUD’s predecessor to secure the new loan. As part of the refinancing, Gannon Management Company of Missouri, .a company owned by Franke, was awarded a twenty-year contract to manage the apartment complexes.

To enforce Franke’s payment obligation under the divorce decree, McNeill sued Franke for contempt, and in February 1992, a state court held Franke wilfully violated the decree by failing to turn over McNeill’s share of the note receipts and by refinancing the note without McNeill’s consent. The court held Franke in contempt, but stated Franke could purge his contempt by paying McNeill her share of the receipts before refinancing, plus $20,000 a month until McNeill had received the value of her 20% interest in the note after refinancing, estimated by Franke at $2,472,838. Franke has failed to make all the required monthly payments.

The five limited partnerships that bought the apartment complexes from SLA filed for voluntary bankruptcy. Franke proposed a reorganization plan that was eventually accepted and confirmed by the bankruptcy court in June 1992. As a result, Gannon Partnership 19, L.P. (GP19), a Missouri limited partnership in which Franke is the sole general partner, was given title to the apartments.

In October 1992, McNeill brought this action against the parties with claims to the apartment complexes: the current titleholder of the apartment complexes, GP19; the sole general partner of GP19, William Franke; the former titleholders, SLA, West Pointe Limited Partnership, Northwest Village Limited Partnership, Grandview Hills Limited Partnership, Park Ridge Apartments Limited Partnership, and Lamplite Limited Partnership; the two general partners of SLA and the limited partnerships, Kevin W. Kelly and Pentad Properties, Inc.; the trustee under the deed of trust, Phillip J. Paster; and the current lienholder, HUD. See 28 U.S.C. § 2410(a) (1994) (providing federal jurisdiction over actions affecting property on which the United States has a lien). McNeill seeks a declaratory judgment that the appellees’ claims to the property are subordinate to her rights, title, and interests under the note and deed of trust. McNeill also seeks judicial foreclosure on the property to collect her 20% share of the balance due on the note, as if the refinancing transactions had not occurred. The district court concluded McNeill was seeking to relitigate claims decided in the contempt proceeding, and thus dismissed the action as res judicata. At the same time, the district court denied McNeill’s summary judgment motion as moot.

On appeal, McNeill asserts neither res judicata nor collateral estoppel bars this lawsuit. We must give the same preclusive effect to the Missouri contempt judgment that a Missouri court would give the judgment. 28 U.S.C. § 1738 (1994); Kremer v. Chemical Constr. Corp., 456 U.S. 461, 466, 102 S.Ct. 1883, 1889, 72 L.Ed.2d 262 (1982). Under Missouri law, res judicata, also known as claim preclusion, bars the same parties from relitigating the same cause of action. Oates v. Safeco Ins. Co. of Am., 583 S.W.2d 713, 719 (Mo.1979); Curnutt v. Scott Melvin Transp. Inc., 903 S.W.2d 184, 191 (Mo.Ct.App.1995). The doctrine applies when four things are the same in both lawsuits: the subject matter, the cause of action, the parties, and the status in which the defendant is sued. King Gen. Contractors, Inc. v. Reorganized Church of Jesus Christ of Latter Day Saints, 821 S.W.2d 495, 501 (Mo.1991); Barkley v. Carter County State Bank, 791 S.W.2d 906, 910 & n. 4 (Mo.Ct.App.1990). When two lawsuits present the same cause of action, res judicata precludes consideration of matters that were actually decided and matters that could properly have been raised and decided in the earlier lawsuit. Curnutt, 903 S.W.2d at 191; see King, 821 S.W.2d at 501. Collateral estoppel, also known as issue preclusion, ' prevents a party from relitigating the same precise issue. Oates, 583 S.W.2d at 719; King, 821 S.W.2d at 500.

We conclude res judicata does not preclude litigation of this lawsuit. First, the contempt lawsuit did not present the same cause of action as this lawsuit. Although the refinancing transactions are a common fact in both lawsuits, the suits do not “arise out of the same act, contract or transaction” or require the same “parties, subject matter and evidence” to sustain the claims. King, 821 S.W.2d at 501. The contempt lawsuit was an action to enforce the divorce decree against McNeill’s former husband, and this lawsuit is an action to enforce the note and deed of trust against later lienholders and titleholders. The issue in the contempt lawsuit was whether Franke’s refinancing transactions wilfully violated the language of the divorce decree, and the issue in this lawsuit is the legal effect of the refinancing transactions on McNeill’s property rights, which depends on a tenant in common’s ability to convey property interests without the consent of a cotenant under state property law. Contrary to the appellees’ assertion, McNeill does not merely seek to relitigate the value of her interest in the deed of trust, but instead asks the court to decide the legal status of her security interest in the apartments, and the priority of her interest versus the interests of the later titleholders and lienholders.

We reject the appellees’ assertion that the contempt court decided McNeill’s interest in the deed of trust was legally released as a lien and is no longer enforceable. The contempt order did not alter McNeill’s ownership interest received in the divorce decree. Instead, the contempt court simply stated that by executing the deeds of release, Franke allowed the refinancing to occur and thereby violated the divorce decree’s terms. The divorce decree established McNeill’s ownership interest, McNeill recorded her interest with the deed recorder, and the Missouri Court of Appeals affirmed the award of her ownership interest. In affirming the award, the Missouri Court of Appeals noted the divorce decree created a tenancy in common ownership, which could not be alienated by either party’s sole action. W.E.F. v. C.J.F., 793 S.W.2d at 459. Thus, neither the contempt order nor Franke’s attempt to convey the apartments without McNeill’s consent displaced McNeill’s ownership interest.

Second, the contempt lawsuit did not involve most of this lawsuit’s defendants, who are necessary parties to the property issues, and the only common defendant, Franke, is not sued in the same capacity in both lawsuits. In the contempt proceeding, McNeill sued Franke individually as a party to the divorce judgment. In this lawsuit, Franke is sued only as the sole general partner of the apartment complexes’ current owner, GP19. Because at least two res judicata requirements are not satisfied, the doctrine does not bar this lawsuit. Barkley, 791 S.W.2d at 910, 913.

As for collateral estoppel, the doctrine is inapplicable because the issues in this lawsuit are not identical to the issues decided in the contempt proceeding. Oates, 583 S.W.2d at 719.

McNeill also contends the district court should have granted her motion for summary judgment because the appellees’ response to her motion was inadequate. The appellees filed a motion to stay consideration of summary judgment pending discovery, however, and the district court denied the summary judgment as moot because of the dismissal. Having reversed the dismissal that mooted McNeill’s summary judgment motion, we leave McNeill’s summary judgment motion to the district court’s consideration on remand.

We thus reverse and remand for further proceedings.