February 24, 2020

February 24, 2020

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Coming Up Short: When There Aren't Enough Judges Eligible To Rehear A Case En Banc

Every now and then we see something in the reported decisions of the U.S. Court of Appeals for the Seventh Circuit that seems noteworthy because we’ve never seen it before. The following is one such example.

Seventh Circuit Rule 40(e) is entitled “Rehearing Sua Sponte before Decision,” and it provides, in relevant part, that a soon-to-be-issued opinion, if it takes a position that would overrule prior decisions of the circuit, or if it creates a circuit split, “shall not be published unless it is first circulated among the active members of this court and a majority of them do not vote to rehear en banc the issue of whether the position should be adopted.”

Rubin v. Islamic Republic of Iran, No. 14-1935 (7th Cir. July 19, 2016), written by Judge Diane Sykes and joined by Judge William Bauer and Judge Michael Reagan (of the Southern District of Illinois, sitting by designation), met both Rule 40(e) prerequisites. It overruled prior circuit law and created a split with a recent 9th Circuit decision.

Rubin concerned a long-running dispute involving the victims of a 1997 Hamas bombing in Jerusalem and their attempts to collect default judgments entered against Iran as a state sponsor of terrorism. The Iranian assets located in the 7th Circuit are historical artifacts on loan to the University of Chicago and the Field Museum.

The court held that a provision of the Foreign Sovereign Immunities Act, 28 U.S.C. § 1610(g), does not create a freestanding exception to the general prohibition on executing a judgment against a foreign state, thus limiting the plaintiffs to executing against property that Iran uses commercially in the U.S. Because the artifacts in the Chicago museums are not “used commercially,” Iran secured a victory (of sorts) on appeal.

The remarkable part about the opinion is that Chief Judge Wood and Circuit Judges Posner, Flaum, Easterbrook, and Rovner (five of the nine active judges on the 7th Circuit) had to recuse themselves from the 40(e) process. Thus, it became impossible to reconsider the panel’s opinion en banc because “a majority” of the active judges could not vote to rehear the case.

Judge Hamilton (one of the judges in regular active service who was not recused and who had not otherwise participated in the decision) filed a dissenting opinion from the denial of en banc review, explaining that he thought it was a “mistake” for the court to overrule its earlier decisions and to create a circuit split. Given the “rare situation” that prevented en banc review in this case, he argued that the panel’s decision “should not be treated as settling the legal issue in this circuit,” as a later panel decision normally does when it overrules an earlier one.

We’re not aware of any legal authority that has called into question an opinion’s validity under circumstances such as these (and Judge Hamilton, not surprisingly, cited none), but it will be interesting to see how courts, including the Seventh Circuit, deal with Rubin‘s precedential value in the future.

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About this Author

Eric G Pearson, Business Litigation Attorney, Appellate, malpractice, Foley
Senior Counsel

Eric G. Pearson is a business litigation lawyer with Foley & Lardner LLP, where his practice involves counseling and litigating in a variety of areas, including appellate litigation, professional-malpractice cases, and financial- and accounting-related controversies. In addition, he has represented clients in internal investigations and enforcement-defense actions in the financial, health care, and sports industries. Mr. Pearson is a member of the firm’s Appellate, Business Litigation & Dispute Resolution, and Government Enforcement, Compliance & White Collar...