MacGregor, Margaret v. Rutberg, David A. ( 2007 )

In the
United States Court of Appeals
For the Seventh Circuit
____________
No. 06-2829
MARGARET MACGREGOR,
Plaintiff-Appellant,
v.
L. DAVID RUTBERG,
Defendant-Appellee.
____________
Appeal from the United States District Court
for the Central District of Illinois.
No. 06-CV-3018—Jeanne E. Scott, Judge.
____________
ARGUED JANUARY 12, 2007—DECIDED FEBRUARY 27, 2007
____________
Before POSNER, WOOD, and SYKES, Circuit Judges.
POSNER, Circuit Judge. The parties to this diversity
suit governed by Illinois law are neurosurgeons. Rutberg
testified as an expert witness for a patient of MacGregor’s
in a malpractice suit that the patient had brought against
MacGregor in an Illinois state court. In the present case,
MacGregor is suing Rutberg, complaining that his testi-
mony in the malpractice suit was defamatory and a breach
of contract. The district court dismissed MacGregor’s suit
for failure to state a claim, and she appeals.
MacGregor had performed an anterior cervical
discectomy on the patient who later sued her for mal-
2 No. 06-2829
practice. That is an operation in which a herniated disk in
the part of the spine that is at the back of the neck is
removed through an incision made in the front. In the
course of the operation the patient’s esophagus was
punctured. Her suit alleged that the puncture was due to
the negligence of Dr. MacGregor. Dr. Rutberg testified by
deposition that MacGregor had indeed failed to exercise
due care and that the failure had been responsible for the
puncture. He testified that she had placed the surgical
retractors—instruments that hold the esophagus, trachea,
arteries, and other soft tissue away from the incision to
prevent their being damaged by the surgeon’s knife—in the
wrong position.
The state court granted summary judgment for
MacGregor, paving the way for the present suit, in which
she alleges—and in the procedural posture of the case
we must assume the truth of her allegations—that Rut-
berg failed to disclose in his deposition that he was offer-
ing a medical opinion at variance with the consensus of
neurosurgeons and failed even to review the depositions of
MacGregor and of the patient, which would have con-
firmed that MacGregor had put the retractors in the right
place. She claims that Rutberg defamed her by his testi-
mony and in addition violated a rule of the professional
association to which both of them belonged when he
testified—a rule that she argues constituted a contract
between Rutberg and her.
Illinois like other states recognizes an absolute privilege
for statements in testimony or pleadings in a judicial
proceeding. Ritchey v. Maksin, 376 N.E.2d 991, 993 (Ill.
1978); Spaids v. Barrett, 57 Ill. 289, 291 (1870); McNall v. Frus,
784 N.E.2d 238, 239-40 (Ill. App. 2002); Jurgensen v.
Haslinger, 692 N.E.2d 347, 349-50 (Ill. App. 1998). What a
No. 06-2829 3
witness testifies to cannot be made the basis of a suit
against him, except a criminal prosecution for perjury or
for a crime to which he confessed in the course of testify-
ing. The privilege mainly protects against suits for def-
amation; however reckless or dishonest the testimony,
the witness cannot be sued because of its defamatory
content.
A number of states, including Illinois, see, e.g., Spaids
v. Barrett, supra, 57 Ill. at 291; Starnes v. Int’l Harvester Co.,
539 N.E.2d 1372, 1374 (Ill. App. 1989); McGranahan v. Dahar,
408 A.2d 121, 129 (N.H. 1979); see also Briscoe v. LaHue,
460 U.S. 325, 331 and n. 11 (1983), have carved an excep-
tion for cases in which the defamatory testimony is
unarguably irrelevant to the case in which it was
given—suppose that in the trial of an antitrust case a
witness, wanting to take advantage of the privilege, blurted
out: “And by the way, my ex-husband is a murderer, a
thief, a deadbeat, and a purveyor of child pornography.”
See Macie v. Clark Equipment Co., 290 N.E.2d 912, 913-15 (Ill.
App. 1972); Parker v. Kirkland, 18 N.E.2d 709, 712-13 (Ill.
App. 1939); Burdette v. Argile, 94 Ill. App. 171, 175-77 (1901);
Sherwood v. Powell, 63 N.W. 1103, 1104 (Minn. 1895).
MacGregor wants another exception—an exception for
expert testimony.
Now it is true that the privilege is especially designed for
the protection and encouragement of disinterested lay
witnesses. Since they have no stake in the case and can-
not be paid more than a nominal fee for testifying, they
would be highly reluctant to testify if the threat of a
defamation suit hung over their heads. See Murphy v. A.A.
Matthews, 841 S.W.2d 671, 674 (Mo. 1992); cf. McNall v. Frus,
supra, 784 N.E.2d at 239. It would be cruel to force them by
testifying to assume that risk. Expert witnesses, in contrast,
4 No. 06-2829
could be paid to assume the risk. See Jurgensen v. Haslinger,
supra, 692 N.E.2d at 349-50; Murphy v. A.A. Matthews,
supra, 841 S.W.2d at 674. Nevertheless they are not ex-
cepted from the privilege, McNall v. Frus, supra, 784
N.E.2d at 239-40, and that is sensible. Litigation is costly
enough without judges’ making it more so by throwing
open the door to defamation suits against expert wit-
nesses. That would not only tend to turn one case into
two or more cases (depending on the number of expert
witnesses), but also drive up expert witnesses’ fees; ex-
pert witnesses would demand as part of their fee for
testifying compensation for assuming the risk of being
sued because of what they testified to.
The pressure to allow such suits in order to keep expert
testimony honest has actually diminished in recent years
because of enhanced awareness of the potential abuses
involved in such testimony. Courts do much more than
they used to do to screen out expert testimony that does
not satisfy reasonable standards of scientific accuracy. Fed.
R. Evid. 702; Kumho Tire Co. v. Carmichael, 526 U.S. 137, 147
(1999); Wilson v. City of Chicago, 6 F.3d 1233, 1238-39 (7th
Cir. 1993). The screening is imperfect. But it is a better
check on the abuses than allowing every unsuccessful
lawsuit to be turned into two or more lawsuits as the
winner goes after the expert witnesses who testified
unsuccessfully against him.
That a privilege is absolute does not define its scope; it
merely protects the holder of the privilege from a suit
based on deliberate or reckless misconduct (“malice,” as
the defamation cases say, cf. Matheny v. United States,
469 F.3d 1093, 1097 (7th Cir. 2006)), as distinct from a
suit based merely on negligence or mistake. E.g., Zych v.
Tucker, 844 N.E.2d 1004, 1008 (Ill. App. 2006); Murphy v.
No. 06-2829 5
A.A. Matthews, supra, 841 S.W.2d at 675. We gave one
example of a scope limitation earlier. California has lim-
ited its scope further in cases in which a witness spills a
trade secret or violates a confidentiality agreement. E.g.,
Wentland v. Wass, 25 Cal. Rptr. 3d 109, 113-16 (App.
2005); ITT Telecom Products Corp. v. Dooley, 262 Cal. Rptr.
773, 779-81 (App. 1989). Illinois has not followed suit,
however, and perhaps wisely, since there is another, and
generally effective, way of protecting trade secrets in
litigation—requiring testimony that reveals a trade secret
to be given at a hearing from which the public is ex-
cluded and the transcript of the testimony sealed.
Noting that the cases affirming the breadth of the privi-
lege in Illinois come from the state’s intermediate ap-
pellate court rather than from its supreme court, which
has not been heard from on the question since Ritchey v.
Maksin, supra, a quarter of a century ago, MacGregor asks
us to predict that if seised of the issue the supreme court
would carve out an exception either for all expert testi-
mony or for testimony in breach of contract cases. (The
plaintiff’s contract claim is discussed below; we shall
see that it doesn’t depend on the scope of the privilege.)
But we have explained in previous cases that a person
who wants a novel ruling of state law should sue in
state court rather than federal court. Doe v. City of Chicago,
360 F.3d 667, 672 (7th Cir. 2004); Haynes v. Alfred A. Knopf,
Inc., 8 F.3d 1222, 1234 (7th Cir. 1993); Chang v. Michiana
Telecasting Corp., 900 F.2d 1085, 1087-88 (7th Cir. 1990); cf.
In re C-T of Virginia, Inc., 958 F.2d 606, 611-12 (4th Cir.
1992). Of course if she does that and the defendant removes
the case to federal court we must try as best we can to
determine whether the state supreme court would adopt
the novel ruling. But this is not such a case. The plaintiff
6 No. 06-2829
sued in federal court though there was nothing to stop her
from suing in an Illinois state court. Had she done that,
Rutberg could have removed the case to federal court,
but it is not certain that he would have done so.
Moreover, the fact that the Supreme Court of Illinois has
not weighed in on the scope of the witness privilege does
not mean that that court is likely, should it ever do so, to
reject the consensus of the intermediate appellate judges.
On the contrary, its reticence suggests, if anything, con-
tentment with that consensus.
At argument, MacGregor’s lawyer proposed for the
first time that we certify the issue of the scope of the
privilege to the Supreme Court of Illinois. The proposal is
unfortunate as well as belated, in suggesting rather an
excessive taste for litigation on MacGregor’s part. For
just as her malpractice suit became two suits with the
decision to go after the losing party’s expert witness, we
are invited to split the present suit in two, one piece
retained in this court and the other sent to Illinois’s su-
preme court. That might be unavoidable if MacGregor
had been dragged into federal court against her will and
if the validity of her state-law claim were profoundly
unclear, but neither condition is satisfied.
We turn to the breach of contract claim. MacGregor
belongs, and Rutberg when he gave his deposition in the
malpractice suit belonged, to the American Association
of Neurological Surgeons, as nearly 95 percent of board-
certified neurosurgeons do. The association’s rules include
norms for expert testimony by members, among them that
“the neurosurgical expert witness shall represent and
testify as to the practice behavior of a prudent neurological
surgeon giving different viewpoints if such there are” and
“shall identify as such any personal opinions that vary
No. 06-2829 7
significantly from generally accepted neurological prac-
tice.” The validity of these sensible-seeming norms is not
questioned. Dr. Rutberg was expelled from the association
for violating them, and the validity of his expulsion is
not before us. See Austin v. American Association of Neuro-
logical Surgeons, 253 F.3d 967 (7th Cir. 2001). The absolute
privilege does not forbid basing disciplinary proceedings,
public or, even more clearly, private, on testimony given
in a judicial proceeding. Bushell v. Caterpillar, Inc., 683
N.E.2d 1286, 1289-90 (Ill. App. 1997).
One can imagine a professional association using ex-
pulsion to resurrect the old “conspiracy of silence”—the
gentlemen’s agreement among doctors not to testify against
one another. But there is no suggestion of that. Nor
would such a suggestion strengthen—it would weaken—
MacGregor’s case. For if she won, the effect would be to
add suits for defamation and breach of contract to any
other sanctions for violating the association’s rules
constraining testimony by expert witnesses.
MacGregor claims that by joining the association,
Rutberg waived the witness’s absolute privilege. Like
other privileges, this one can be waived. Baravati v.
Josephthal, Lyon & Ross, Inc., 28 F.3d 704, 707-08 (7th Cir.
1994). And it was waived, at least in the limited sense
that by agreeing to abide by rules that regulate members’
testimony, Rutberg disclaimed any right to block, by
claiming that court testimony is sacrosanct, expulsion
from the association for violating its rules; that would have
made his agreeing to abide by those rules empty. Anyway,
as we noted earlier, the absolute privilege is not applicable
in a disciplinary proceeding, as distinct from a lawsuit.
But it would not follow that he had consented to be
sued for breach of contract. Whether he did or not is the
8 No. 06-2829
question on which MacGregor’s contract claim turns. It
is a question of contract interpretation rather than of the
scope of the absolute privilege.
Our Austin case was a suit for breach of contract, and
the contract was the same set of AANS rules on which
MacGregor’s contract claim is based. But the association
was the enforcer, not a member of the association. Now
whether the “contract” is enforceable by one member’s
suing another is not, as the parties think, an issue of third-
party beneficiary status—not obviously, in any event (the
significance of this qualification will appear shortly). Third-
party beneficiaries are nonparties to a contract who are
nevertheless allowed to sue to enforce it because the parties
intended them to have that right. E.g., A.J. Maggio Co. v.
Willis, 738 N.E.2d 592, 599 (Ill. App. 2000); Swaveley v.
Freeway Ford Truck Sales, Inc., 700 N.E.2d 191, 185 (Ill. App.
1998); A.E.I. Music Network, Inc. v. Business Computers, Inc.,
290 F.3d 952, 955 (7th Cir. 2002) (Illinois law). Members of
the AANS are bound by its rules. They are not third
parties. But the question is whether they are entitled to
enforce the rules against each other, or whether just the
association’s management is authorized to enforce the
rules. The question is similar to that of a third party’s right
to sue to enforce a contract, however, because it is a
question about the intentions of the parties concerning who
should be able to enforce the contract or selected parts of it.
One could bring this case within the orbit of the doctrine
of third-party beneficaries by saying that the rules create
a separate contract between each member and the as-
sociation, and that the question therefore is whether
each member is a third-party beneficiary of the contracts
between the other members and the association. So
MacGregor would be deemed to be suing to enforce
No. 06-2829 9
Rutberg’s contractual obligations to the association. That
approach would tilt the case even further against
MacGregor. For ordinarily a person’s entitlement to sue
to enforce a contract to which she’s not a party must be
expressed in the contract rather than implied. Johnson Bank
v. George Korbakes & Co., 472 F.3d 439, 441 (7th Cir. 2006)
(Illinois law). “Parties to contracts are naturally reluctant
to empower a third party to enforce their contract,” id.,
and so courts hesitate to infer such a power. But with or
without a presumption against enforcement, MacGregor’s
claim of breach of contract fails.
This is true even though rules of a private association
are sometimes enforceable by members—an example
would be a rule that required that disputes between
members be arbitrated. Golden Seed Co. v. Funk Seeds Int’l,
Inc., 315 N.E.2d 140, 141 (Ill. App. 1974); cf. Uehara v.
Schlade, 603 N.E.2d 646, 648-50 (Ill. App. 1992). The rule
would be for the direct benefit of the disputants and not
the rest of the membership, and so they would be the
logical enforcers of it. This is not true with regard to the
rule governing expert testimony by members. Its logical
enforcer is the association’s management, cf. Knolls Condo-
minium Association v. Harms, 781 N.E.2d 261, 265 (Ill. 2002),
and the logical remedy if it determines that there has
been a violation is to expel the violator. Pacaud v. Waite,
75 N.E. 779, 782 (Ill. 1905); Pitcher v. Board of Trade, 13 N.E.
187, 189 (Ill. 1887); Austin v. American Ass’n of Neuro-
logical Surgeons, supra, 253 F.3d at 968-69 (Illinois law).
The existence of this remedy is another reason why it
is unnecessary to allow suits against expert witnesses;
Dr. Rutberg’s expulsion surely reduced his employabil-
ity as an expert witness. But there is no indication that in
joining the AANS, neurosurgeons think they’re exposing
themselves to damages suits by other members, or for
10 No. 06-2829
that matter by the association, should they ever have the
temerity to testify against another member. When you
join a club or other association you assume the risk of be-
ing expelled for violating its rules, but you hardly expect
to be suable, whether by the association or by other mem-
bers, for infractions of the association’s rules in general.
You do expect to be suable (in some cases by the associa-
tion, in some cases by other members) for violating a
rule requiring arbitration or for defaulting on financial
obligations such as payment of dues and assessments; it
is apparent that such rules are intended to create enforce-
able rights against members. But consenting to be sued for
violating any of the association’s rules would make join-
ing an association a perilous venture indeed, and so
would be against the association’s interest and therefore
is not plausibly regarded as an implied term of the mem-
bership agreement.
AFFIRMED.
A true Copy:
Teste:
_____________________________
Clerk of the United States Court of
Appeals for the Seventh Circuit
USCA-02-C-0072—2-27-07