Simultaneous Decisions from the 7th Circuit: How the Later-Argued Case Became Binding Precedent

The Seventh Circuit is very serious about treating its panel decisions as the “law of the court” unless and until they are overruled by the en banc court or a higher authority. Hence, its Circuit Rule 40(e) requires a panel that contemplates issuing an opinion that would overrule a prior decision or create a conflict between or among circuits to circulate it among the active members of the court, affording a majority the chance to order the case reheard en banc.

A couple of months ago, we discussed Rubin v. Islamic Republic of Iran, the case in which the opinion of a Seventh Circuit panel arguably overruled a prior Seventh Circuit decision and created a circuit split, either of which would normally have precluded its publication without complying with Rule 40(e). But five of the nine active judges recused themselves from the case, so there could not be a majority to vote to rehear en banc and the panel decision was published as the law of the circuit. We mentioned this case again earlier this month, when the Supreme Court asked for the views of the Acting Solicitor General on whether the Court should grant certiorari.

Now another unusual sequence of events throws further light on the court’s commitment to following the law laid down by its first panel to decide an issue.

The court today issued two opinions about the same subject, whether a state-law claim is pre-empted by a provision of the Securities Litigation Uniform Standards Act, 15 U.S.C. § 78bb(f)(1)(a). The first of the cases to come to the court, Goldberg v. Bank of America, No. 11-2989 (Jan. 23, 2017), was argued five years ago, in January 2012. The original panel consisted of Judges Richard Cudahy, Frank Easterbrook, and David Hamilton. We suspect (we can’t prove it, but it’s the only scenario that makes sense) that the opinion was going to be 2-1 to reverse the district court’s dismissal of the case, with Judge Cudahy writing and Judge Easterbrook dissenting. The later of the cases, Holtz v. JP Morgan Chase Bank, No. 13-2609 (Jan. 23, 2017), was argued in April 2014 before a panel of Judges Easterbrook, Daniel Manion, and Diane Sykes. This panel apparently voted to affirm the district court’s dismissal of that case but, appropriately (and again, while we can’t prove it, this is almost certainly what happened), held its decision awaiting issuance of the previous panel’s opinion in Goldberg.

Judge Cudahy died in September 2015, without the panel majority’s having issued its Goldberg decision. After what was surely some discussion between the panels (facilitated, no doubt, by Judge Easterbrook’s being on both), the Goldberg panel, now evenly divided, was filled out in December 2016 by the random addition of Judge Joel Flaum. After reading the briefs and listening to the 2012 argument tape, he voted to affirm.

Today, the unanimous panel in Holtz issued its decision, written by Judge Easterbrook, and the Goldberg panel issued a per curiam affirmance based on the authority of Holtz. Judge Hamilton wrote a dissent in Goldberg. Thus did Holtz, rather than Goldberg, establish the law of the circuit.

This blog is made available by Foley & Lardner LLP (“Foley” or “the Firm”) for informational purposes only. It is not meant to convey the Firm’s legal position on behalf of any client, nor is it intended to convey specific legal advice. Any opinions expressed in this article do not necessarily reflect the views of Foley & Lardner LLP, its partners, or its clients. Accordingly, do not act upon this information without seeking counsel from a licensed attorney. This blog is not intended to create, and receipt of it does not constitute, an attorney-client relationship. Communicating with Foley through this website by email, blog post, or otherwise, does not create an attorney-client relationship for any legal matter. Therefore, any communication or material you transmit to Foley through this blog, whether by email, blog post or any other manner, will not be treated as confidential or proprietary. The information on this blog is published “AS IS” and is not guaranteed to be complete, accurate, and or up-to-date. Foley makes no representations or warranties of any kind, express or implied, as to the operation or content of the site. Foley expressly disclaims all other guarantees, warranties, conditions and representations of any kind, either express or implied, whether arising under any statute, law, commercial use or otherwise, including implied warranties of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Foley or any of its partners, officers, employees, agents or affiliates be liable, directly or indirectly, under any theory of law (contract, tort, negligence or otherwise), to you or anyone else, for any claims, losses or damages, direct, indirect special, incidental, punitive or consequential, resulting from or occasioned by the creation, use of or reliance on this site (including information and other content) or any third party websites or the information, resources or material accessed through any such websites. In some jurisdictions, the contents of this blog may be considered Attorney Advertising. If applicable, please note that prior results do not guarantee a similar outcome. Photographs are for dramatization purposes only and may include models. Likenesses do not necessarily imply current client, partnership or employee status.