Bailey Thiele v. Board of Trustees of Illinois

In the

United States Court of Appeals For the Seventh Circuit ____________________

No. 21-3017 BAILEY THIELE and JACK MOYLAN, Plaintiffs-Appellants,

v.

BOARD OF TRUSTEES OF ILLINOIS STATE UNIVERSITY, LARRY DIETZ, and JULIE ANNETTE JONES, Defendants-Appellees. ____________________

Appeal from the United States District Court for the Central District of Illinois. No. 1:20-cv-01197-SLD-TSH — Sara Darrow, Chief Judge. ____________________

ARGUED MAY 19, 2022 — DECIDED MAY 27, 2022 ____________________

Before FLAUM, EASTERBROOK, and SCUDDER, Circuit Judges. EASTERBROOK, Circuit Judge. Illinois State University charges tuition and multiple fees. One of these, called the Mandatory Fee, covers the cost of on-campus facilities and programs. In March 2020, after the Governor of Illinois de- clared an emergency because of COVID-19 and issued an or- der forbidding many in-person gatherings, Illinois State Uni- versity did what every other college in the state had to do: it

2 No. 21-3017

shifted from in-person instruction to distance learning over a video system. The University remiTed some but not all of the Mandatory Fee, telling students that the remainder includes the expense of facilities that must be supported no maTer how the University provides educational services. Two students responded with this suit under 42 U.S.C. §1983, contending that collection or retention of any part of the Mandatory Fee violates both the Takings Clause of the Fifth Amendment (applied to the states by the Fourteenth Amendment) and the Due Process Clause of the Fourteenth Amendment. The argument offered for both claims is the same: the University told students that the Mandatory Fee pays for access to services on campus, and to collect it when the students cannot visit campus is to break a promise. In other words, the students contend that a public body’s breach of contract violates the Constitution. Plaintiffs also asserted claims under state law. The district court dismissed the amended complaint. 2021 U.S. Dist. LEXIS 188314 (C.D. Ill. Sept. 30, 2021). The judge wrote that the statements depicted as contractual do not cre- ate a property interest, which meant that all constitutional theories failed. The judge saw some other problems with the constitutional theories, including the unavailability of dam- ages as a result of sovereign immunity. That was a misnomer: the real obstacle to monetary awards against the University is that states and their agencies are not “persons” for the pur- pose of §1983. See Will v. Michigan Department of State Police, 491 U.S. 58 (1989). See also Lapides v. University of Georgia, 535 U.S. 613, 616–17 (2002). Plaintiffs sought to overcome that ob- stacle by naming as additional defendants both Larry Diee, then the University’s President, and Julie AnneTe Jones, then

No. 21-3017 3

the Chairperson of its Board. The judge held that neither is personally liable for repayment of the Mandatory Fee. Finally, the judge dismissed all state-law claims without prejudice to their renewal in state court. Plaintiffs’ principal argument on appeal is that the Univer- sity’s statements are specific enough to create property inter- ests. See Board of Regents v. Roth, 408 U.S. 564 (1972). We shall assume that this is so. That assumption does not help plain- tiffs, however, because the Constitution does not ensure that states keep all of their promises, any more than it ensures that states observe all of their laws. A violation of a state law or a state contract is just that—a violation of a state entitlement, for which the remedy lies under state law. See, e.g., Snowden v. Hughes, 321 U.S. 1, 11 (1944) (Equal Protection Clause); Davis v. Scherer, 468 U.S. 183, 192–96 (1984) (Due Process Clause); Nordlinger v. Hahn, 505 U.S. 1, 16 n.8 (1992) (Equal Protection Clause); Archie v. Racine, 847 F.2d 1211, 1215–18 (7th Cir. 1988) (en banc) (Due Process Clause); Tucker v. Chicago, 907 F.3d 487, 494–95 (7th Cir. 2018) (citing both due-process and equal-pro- tection decisions). See also Castle Rock v. Gonzales, 545 U.S. 748 (2005) (failure to enforce an order issued by a state court does not violate the Constitution). The Constitution can get involved because the Due Pro- cess Clause often entitles people to notice and an opportunity for a hearing before a public official may deprive someone of a property right. That’s what Roth and its successors are about. But the students do not want hearings. The University lacked authority to violate the Governor’s orders. On-campus education was not going to happen. No one contends that the Governor had to hold person-by-person hearings before issu- ing his closure orders. Nor was any student entitled to a

4 No. 21-3017

personal hearing before the University decided how much of the Mandatory Fee to remit. A ruling applicable to all students is a legislative rather than an adjudicative action, and the Due Process Clause does not require personal hearings for deci- sions that establish or interpret rules governing groups of people. See, e.g., Bi-Metallic Investment Co. v. Colorado Board of Equalization, 239 U.S. 441 (1915); Atkins v. Parker, 472 U.S. 115 (1985). What the students want is substantive—enforcement of their asserted right to a full refund of the Mandatory Fee— rather than notice and an opportunity for a hearing. This re- turns us to plaintiffs’ assumption that breach of contract vio- lates the Constitution. It does not, a point made repeatedly in this circuit. See, e.g., Mid-American Waste Systems, Inc. v. Gary, 49 F.3d 286 (7th Cir. 1995); Linear v. University Park, 887 F.3d 842 (7th Cir. 2018). The University relied on Mid-American Waste Systems; the district court also cited it; plaintiffs do not even try to distinguish it or any similar decision. Whether the students have a good contract claim is a ques- tion for the state judiciary. In Illinois this means the Court of Claims, which has exclusive jurisdiction of contract suits against public bodies. 705 ILCS 505/8(b). Suing Diee and Jones in their individual capacities did not solve plaintiffs’ problems. Nor was it an appropriate step by any standard. Plaintiffs appear to assume that public employ- ees can be vicariously liable for their institutions’ decisions. Yet there is no such thing as vicarious liability under §1983. See, e.g., Ashcroft v. Iqbal, 556 U.S. 662, 676 (2009). When vicar- ious liability exists under state law, it is the employer that bears responsibility for the employees’ actions, rather than the other way around. See Restatement (Third) of Agency §6.01 and

No. 21-3017 5

comment b (2006). If the State of Illinois were to cancel a con- tract to build a new office building, no court would order the Governor to pay damages out of his own pocket. The Board of Trustees made the decision about how much of the Mandatory Fee to remit. If any entity other than the University in its own name owes damages for breach of con- tract, it is the Board as a whole rather than individual mem- bers such as Jones, who is not alleged to have done anything wrong in either an official or a personal capacity. Ex-President Diee was not a member of the Board. He conveyed its deci- sion to the students by email, but shooting the messenger via liability in damages is a long way from a lawful response. Plaintiffs’ counsel should count themselves lucky that Diee and Jones did not seek sanctions for frivolous litigation under Fed. R. Civ. P. 11 or Fed. R. App. P. 38. Plaintiffs maintain that the district judge should have al- lowed them to amend their complaint a second time, but they did not tell the judge and do not tell us how an amendment could state a viable claim. The judge did not abuse her discre- tion. AFFIRMED