Alnoraindus Burton v. Partha Ghosh ( 2020 )

In the
United States Court of Appeals
For the Seventh Circuit
____________________
No. 19‐1360
ALNORAINDUS BURTON,
Plaintiff‐Appellant,
v.
PARTHA GHOSH and WEXFORD HEALTH SOURCES, INC.,
Defendants‐Appellees.
____________________
Appeal from the United States District Court for the
Northern District of Illinois, Eastern Division.
No. 1:12‐cv‐08443 — Andrea R. Wood, Judge.
____________________
ARGUED DECEMBER 3, 2019 — DECIDED JUNE 8, 2020
____________________
Before WOOD, Chief Judge, and HAMILTON and SCUDDER,
Circuit Judges.
HAMILTON, Circuit Judge. Almost seven years into this law‐
suit, after discovery had closed and with a summary judg‐
ment deadline looming, defendants raised the affirmative de‐
fense of res judicata for the first time, in an unexpected motion
to dismiss an amended complaint. When plaintiff responded
that the defense had been waived or forfeited, defendants ar‐
gued that our opinion in Massey v. Helman, 196 F.3d 727 (7th
2 No. 19‐1360
Cir. 1999), requires a district court to allow any and all new
affirmative defenses whenever a plaintiff amends a complaint
in any way. The district court agreed and granted defendants’
motion to dismiss.
We reverse and remand. The standard for amending
pleadings under Federal Rules of Civil Procedure 8(c) and 15
continues to govern the raising of new affirmative defenses
even when an amended complaint is filed. Massey held that a
defendant is entitled to add a new affirmative defense
prompted by an amended complaint that changes the scope
of the case in a relevant way. Massey does not, however, re‐
quire a district court to allow any and all new defenses in re‐
sponse to any amendment to a complaint, without regard for
the substance of the amendment and its relationship to the
new defenses. Rather, a district court must exercise its sound
discretion under Rules 8 and 15 in deciding whether to allow
the late addition of a new affirmative defense. In this case, the
late amendment to the complaint was minor and did not au‐
thorize a new res judicata defense that had been waived or
forfeited years earlier.
I. Factual and Procedural Background
Because Burton’s claim was dismissed under Federal Rule
of Civil Procedure 12(b)(6), we accept as true all well‐pleaded
allegations in the amended complaint, drawing all permissi‐
ble inferences in his favor. Fortres Grand Corp. v. Warner Bros.
Entertainment Inc., 763 F.3d 696, 700 (7th Cir. 2014). We may
also take judicial notice of the contents of filings in Burton’s
first federal case. Daniel v. Cook County, 833 F.3d 728, 742 (7th
Cir. 2016).
No. 19‐1360 3
A. Burton’s Injury and Treatment
Plaintiff Alnoraindus Burton injured his right knee in Feb‐
ruary 2009 while incarcerated in the Illinois Department of
Corrections (IDOC). Over the next year, he repeatedly sought
medical attention for this injury. Burton filed formal requests,
wrote letters, and even went on a hunger strike to get medical
attention.
Burton’s knee was not treated until March 2010, when he
was finally seen by defendant Dr. Partha Ghosh, who was the
Medical Director at the Stateville Correctional Center and
acted as Burton’s treating physician. Dr. Ghosh was em‐
ployed by Wexford Health Sources, Inc., a corporation that
contracted with IDOC to provide health care to its inmates.
An MRI taken on May 27, 2010 revealed that Burton had suf‐
fered a torn lateral meniscus and other damage.
After reviewing the MRI, Dr. Ghosh recommended a con‐
sultation with an orthopedic specialist outside of the prison.
Wexford approved the outpatient visit on July 22, and Burton
visited the orthopedist on October 4, more than a year and a
half after his initial injury. The surgery was finally performed
two weeks later, and Burton returned to the prison that day.
Burton’s discharge orders said that he should receive
physical therapy and pain medication. He alleges he received
neither. These needs were reiterated a week later when Bur‐
ton returned to the surgeon for a follow‐up appointment. But
Burton still was not given pain medication, and he was denied
physical therapy despite repeated letters to Dr. Ghosh inform‐
ing him of these needs and a formal grievance filed in late Oc‐
tober.
4 No. 19‐1360
Burton was finally referred to physical therapy in Decem‐
ber 2010 and began treatment in March 2011. Because of these
delays, Burton claims, he has suffered significant and perma‐
nent damage to his knee, experiencing discomfort when walk‐
ing and stiffness when sitting or standing.
B. Procedural History
In February 2011, Burton filed a pro se complaint against
many Wexford health‐care providers across different facili‐
ties, alleging deliberate indifference to serious medical needs
and retaliation in violation of the Eighth Amendment. The
case was assigned to Judge Gettleman, who dismissed the
complaint because it misjoined unrelated claims and defend‐
ants. Burton filed an amended complaint, this time naming
only Dr. Ghosh as a defendant. The court then recruited coun‐
sel for Burton. Dr. Ghosh was never served with a summons
for either of these two complaints, though.
Instead, Burton’s recruited counsel moved for leave to file
a new complaint, which the court granted. But the lawyer did
not actually file a new complaint as expected, so the second
pro se complaint was dismissed without prejudice on June 5,
2012, pursuant to Federal Rule of Civil Procedure 41(a)(2),
with permission to reinstate by August 6. Complicating mat‐
ters in ways that have surfaced here, years later, the dismissal
order added that the dismissal would become a final dismis‐
sal with prejudice if a motion to reinstate were not filed in time.
Burton and his lawyer did not file a motion to reinstate by
the deadline, nor did they ever file an amended complaint in
the original case. Instead, the same recruited lawyer for Bur‐
ton filed a new complaint on October 19, 2012. The new com‐
No. 19‐1360 5
plaint was docketed as an entirely new case and was not as‐
signed to Judge Gettleman, apparently because the lawyer
stated incorrectly on the civil cover sheet that the case was
“not a refiling of a previously dismissed action.” The case was
randomly assigned to Judge Lefkow and later reassigned to
Judge Wood. The new complaint also added Wexford as a de‐
fendant. Defendants filed their answers in May 2013. Over the
next four years, discovery proceeded.
In January 2018, after discovery was complete, and after
Burton’s original recruited lawyer had withdrawn and newly‐
recruited lawyers had taken the case, Burton was granted
leave to file an amended complaint. The amendments were
minor, clarifying some of Burton’s original factual allegations
and emphasizing the delays in his treatment. The court issued
a brief order instructing defendants to “answer or otherwise
plead to Plaintiff’s amended complaint.”
Instead of amending their answer or proceeding with the
briefing schedule for summary judgment, defendants filed a
motion to dismiss under Federal Rule of Civil Procedure
12(b)(6), raising the new affirmative defense of res judicata,
also known as claim preclusion. Defendants argued that the
dismissal of Burton’s first suit with prejudice in 2012 pre‐
cluded the second, and they asserted that they had become
aware of Burton’s earlier dismissed case only several days
earlier. Defendants further argued (incorrectly) that even if
only the claims against Dr. Ghosh should be dismissed on res
judicata, the claims against Wexford would have to be dis‐
missed because Burton could not support a deliberate indif‐
ference claim against a “municipal” defendant without prov‐
ing an underlying violation by its employee. In response, Bur‐
ton argued that defendants had waived or forfeited the new
6 No. 19‐1360
defense. Defendants replied that the amended complaint
opened the door to new affirmative defenses, regardless of
whether they had previously been waived or forfeited.
The district court granted the motion to dismiss this sec‐
ond suit. First, it concluded that the conditions for res judicata
were met. Second, the court rejected Burton’s waiver and for‐
feiture arguments, concluding that by filing an amended com‐
plaint, he had opened the door for the defendants to assert
new affirmative defenses. The court did not determine
whether the res judicata defense had been waived or forfeited
earlier, whether amendment of the answer was appropriate
under Rule 15, or whether there was any relationship between
the amendment to the complaint and the new defense. In‐
stead, the district court believed that language in our opinion
in Massey v. Helman, 196 F.3d 727 (7th Cir. 1999), required it to
allow the new defense and that it had no discretion to do oth‐
erwise. Finally, the court concluded that Burton had waived
any counter to defendants’ incorrect argument that if claims
against Dr. Ghosh were dismissed, then the claims against
Wexford ought to be dismissed as well because they depend
on an underlying constitutional violation by Dr. Ghosh.
Burton moved under Rule 59(e) for reconsideration. He re‐
peated his waiver argument. He also challenged the district
court’s reading of Massey and submitted evidence that de‐
fendants had in fact known of Burton’s first suit before they
answered the complaint in the second. The district court de‐
nied the motion, and Burton has appealed.
II. Analysis
We review de novo the district court’s decision to dismiss
Burton’s claim on grounds of res judicata. Czarniecki v. City of
No. 19‐1360 7
Chicago, 633 F.3d 545, 548 (7th Cir. 2011), citing Tartt v. North‐
west Community Hospital, 453 F.3d 817, 822 (7th Cir. 2006). We
review for abuse of discretion a district court’s discretionary
decision to allow late assertion of an affirmative defense, Reed
v. Columbia St. Maryʹs Hospital, 915 F.3d 473, 482 (7th Cir.
2019), but review de novo the underlying legal issues, United
States v. Knope, 655 F.3d 647, 660 (7th Cir. 2011). On appeal,
Burton does not argue that the elements of res judicata are not
met. Instead, he contends that defendants have waived or for‐
feited their res judicata defense and that the district court’s
decision to allow the late defense was based on a mistake of
law.
A. Pleading Res Judicata
Federal Rules of Civil Procedure 8(c), 12, and 15 prescribe
the processes for raising affirmative defenses and considering
untimely affirmative defenses. We start with Rule 8(c), which
states in relevant part: “In response to a pleading, a party
must affirmatively state any avoidance or affirmative defense,
including … res judicata.” The proper way to seek a dismissal
based on an affirmative defense under most circumstances is
not to move to dismiss under Rule 12(b)(6) for failure to state
a claim. Rather, the defendant should answer and then move
under Rule 12(c) for judgment on the pleadings. Carr v. Tillery,
591 F.3d 909, 913 (7th Cir. 2010), citing Forty One News, Inc. v.
County of Lake, 491 F.3d 662, 664 (7th Cir. 2007), and McCready
v. eBay, Inc., 453 F.3d 882, 892 n.2 (7th Cir. 2006); see also Amy
St. Eve & Michael A. Zuckerman, The Forgotten Pleading, 7 Fed.
Cts. L. Rev. 152, 172 (2013). The same goes for summary judg‐
ment. See Jackson v. Rockford Housing Auth., 213 F.3d 389, 392–
93 (7th Cir. 2000); Venters v. City of Delphi, 123 F.3d 956, 968
(7th Cir. 1997). Failure to follow this process may “deprive[]
8 No. 19‐1360
the opposing party of precisely the notice that would enable
it to dispute the crucial issues of the case on equal terms.” Har‐
ris v. Secretary, U.S. Depʹt of Veterans Affairs, 126 F.3d 339, 343
(D.C. Cir. 1997); see also Blonder‐Tongue Laboratories, Inc. v.
University of Illinois Foundation, 402 U.S. 313, 350 (1971) (pur‐
pose of Rule 8(c) is to give opposing party notice of affirma‐
tive defense and opportunity to contest it).
We have carved out a narrow and pragmatic exception if
the availability of a defense is apparent in the plaintiff’s com‐
plaint itself. E.g., Muhammad v. Oliver, 547 F.3d 874, 878 (7th
Cir. 2008); see also Charles Alan Wright & Arthur R. Miller, et
al., 5B Federal Practice & Procedure § 1357 (3d ed. 2019). Be‐
cause public records from previous litigation may be consid‐
ered in a motion to dismiss, General Electric Capital Corp. v.
Lease Resolution Corp., 128 F.3d 1074, 1080–81 (7th Cir. 1997), it
is sometimes possible to resolve a res judicata defense on a
Rule 12(b)(6) motion. E.g., Czarniecki, 633 F.3d at 548. That ex‐
ception does not apply here. The defendants had already an‐
swered the earlier complaint, there are factual disputes re‐
garding the timeliness of the defense, and the defense de‐
pends on evidence outside the pleadings.
B. Waiver and Forfeiture of Res Judicata
So what happens when an affirmative defense is not raised
in accordance with Rule 8(c)? An affirmative defense is
waived when it has been knowingly and intelligently relin‐
quished and forfeited when the defendant has failed to pre‐
serve the defense by pleading it. Reed, 915 F.3d at 478, citing
Wood v. Milyard, 566 U.S. 463, 470 & n.4 (2012). A district court
may, however, exercise its discretion to allow a late affirma‐
tive defense if the plaintiff does not suffer prejudice from the
delay. Global Technology & Trading, Inc. v. Tech Mahindra Ltd.,
No. 19‐1360 9
789 F.3d 730, 732 (7th Cir. 2015); Garofalo v. Village of Hazel
Crest, 754 F.3d 428, 436 (7th Cir. 2014); see also Fed. R. Civ. P.
15(a)(2) (courts should freely grant leave to amend pleadings
when justice requires).
An affirmative defense that is not raised in a defendant’s
first answer is not necessarily untimely and forfeited. Only
when the defense is asserted later than it should have been do
prejudice and the district judge’s discretion become relevant.
If a defendant could not have reasonably known of the avail‐
ability of an affirmative defense at the time of the answer, rais‐
ing that defense through later amendment should be consid‐
ered timely, and the district court should grant leave to
amend under Rule 15(a)(2). This will often be the case where
the basis for the defense is disclosed through discovery. See
Venters, 123 F.3d at 967–68. If the defense is raised promptly
after the basis for it becomes available, there will ordinarily
be no unfair prejudice to the plaintiff, and amendment under
Rule 15(a)(2) will be appropriate. See id. at 967.
But if the defense is untimely and the delay prejudices (i.e.,
significantly harms) the plaintiff, it is forfeited and normally
may not be considered by the court. Reed, 915 F.3d at 478–79.
Cf. Jackson, 213 F.3d at 393 (“As a rule, we have allowed de‐
fendants to amend when the plaintiff had adequate notice
that a statute of limitations defense was available, and had an
adequate opportunity to respond to it despite the defendant’s
tardy assertion.”), citing Venters, 123 F.3d at 968.1
1 Under certain circumstances, a court may invoke res judicata or
claim preclusion sua sponte to defend the institutional interests of the judi‐
ciary. Arizona v. California, 530 U.S. 392, 412–13 (2000). As described below,
these circumstances are absent here.
10 No. 19‐1360
By “prejudice,” we do not mean whether the defense will
succeed on the merits and cause the plaintiff to lose. We mean
unfair prejudice, meaning that the late assertion of the defense
causes some unfairness independent of the potential merits of
the defense. For example, in Reed v. Columbia St. Maryʹs Hos‐
pital, we held that a plaintiff was prejudiced by an untimely
defense first raised at summary judgment, based on infor‐
mation that had always been in the defendant’s control, be‐
cause the timing deprived her of notice and the opportunity
to prepare to meet the defense through discovery. 915 F.3d at
482. In Venters v. City of Delphi, we identified a more proce‐
dural form of prejudice: the way the defense was raised
harmed the plaintiff by impairing her ability to respond effec‐
tively. The defendant in Venters first raised its affirmative de‐
fense in its reply memorandum in support of a motion for
summary judgment. 123 F.3d at 969. Because the defense was
presented “at the eleventh hour, without excuse and without
adequate notice to the plaintiff,” we reversed the grant of
summary judgment and remanded for trial. Id.
C. Amended Complaints and Revival of Waived or Forfeited
Affirmative Defenses
Defendants argue that forfeiture, waiver, and prejudice do
not matter here because Massey v. Helman, 196 F.3d 727 (7th
Cir. 1999), requires district courts to allow new affirmative de‐
fenses whenever a plaintiff files an amended complaint. The
district court allowed defendants’ late res judicata defense
and dismissed the case based on this supposedly categorical
rule. But Massey did not adopt or apply such a categorical rule
and does not compel the revival of defendants’ untimely de‐
fense.
No. 19‐1360 11
In Massey, we concluded that an affirmative defense of fail‐
ure to exhaust administrative remedies was not waived when
it was asserted in response to an amended complaint that
changed the case substantially. 196 F.3d at 735. The initial
Massey plaintiff was a prisoner bringing an Eighth Amend‐
ment claim against prison officials. The defendants asserted
their exhaustion defense only after an amended complaint
added a prison doctor as a new plaintiff and added a new
First Amendment retaliation claim. Id. at 734–36. The new af‐
firmative defense was allowed after the plaintiffs had funda‐
mentally changed the scope of the case by adding an addi‐
tional plaintiff and new theory of recovery.
Defendants rely almost entirely on a single sentence of the
Massey opinion: “Because a plaintiff’s new complaint wipes
away prior pleadings, the amended complaint opens the door
for defendants to raise new and previously unmentioned af‐
firmative defenses.” Id. at 735. This sentence should not be
read in isolation. When read in context, it does not support
defendants’ proposed rule. We meant that the particular
amended complaint at issue opened the door for new affirmative
defenses because of how significantly it changed the scope of
the litigation.2 We explained: “To hold to the contrary would,
in essence, enable plaintiffs to change their theory of the case
while simultaneously locking defendants into their original
2 For support, this sentence cited Harris v. Secretary, U.S. Depʹt of Vet‐
erans Affairs, 126 F.3d 339, 343 n.2 (D.C. Cir. 1997), which is telling. The
cited text in Harris said that an affirmative defense may be waived or for‐
feited when a defendant fails to plead it properly. If the defense is for‐
feited, the defendant may be able to recover it through a Rule 15 amend‐
ment, which will “cure any problem of timeliness associated with the for‐
feiture.” But under Rule 15, such amendments are granted at the discre‐
tion of the district judge.
12 No. 19‐1360
pleading.” Id. To deny the affirmative defense under those cir‐
cumstances would “clearly contravene Federal Rule of Civil
Procedure 15(a)” because the interests of justice required
amendment. Id.
Massey is best understood as an application of Rule
15(a)(2): when an amended complaint fundamentally changes
the scope or theory of the case, the interests of justice will gen‐
erally allow a new, relevant affirmative defense to be asserted.
This is just a different articulation of the principle that an un‐
pleaded defense is not forfeited when raised promptly once
its availability becomes apparent.
Defendants assert that any amendment, regardless of its
scope, should open the door to any and all new defenses. A
changed name, a substituted party, correcting a typograph‐
ical error? According to defendants, even the slightest change
is enough. Defendants’ rule would drastically undermine dis‐
trict judges’ control over the pleading process under Rule 15
and would lose sight of Rule 1’s instruction to construe the
Rules to secure the just, speedy, and inexpensive resolution of
civil actions. In the usual course, the district judge should be
free to exercise discretion within the bounds established by
Rule 15, and Rule 15 does not require leave in every case. See
Park v. City of Chicago, 297 F.3d 606, 612 (7th Cir. 2002). For
example, the court “need not allow an amendment when
there is undue delay [or] undue prejudice to the opposing
party.” Bell v. Taylor, 827 F.3d 699, 705 (7th Cir. 2016), quoting
Bethany Pharmacal Co., Inc. v. QVC, Inc., 241 F.3d 854, 861 (7th
Cir. 2001); see also Wright & Miller, 5C Federal Practice & Pro‐
cedure § 1388 (“The filing of an amended complaint will not
No. 19‐1360 13
revive the right to present by motion defenses that were avail‐
able but were not asserted in timely fashion prior to the
amendment of the pleading.”).
Other circuits have adopted the approach we apply here.
In Krinsk v. SunTrust Banks, Inc., 654 F.3d 1194 (11th Cir. 2011),
the Eleventh Circuit held that a defendant should have been
allowed to rescind its waiver of its right to arbitration when
the plaintiffs amended their complaint to broaden the class
definition. Id. at 1203. The court based its decision not on the
mere fact of an amendment but explained that “when a plain‐
tiff files an amended pleading that unexpectedly changes the
shape of the case,” the case may be so altered that the defend‐
ant should be allowed to rescind its waiver. Id., citing Cabine‐
tree of Wisconsin, Inc. v. Kraftmaid Cabinetry, Inc., 50 F.3d 388,
391 (7th Cir. 1995). The defense was “revived” by the
amended complaint because “plain fairness” required it, id. at
1204, but the court did not imply that even a trifling amend‐
ment would have the same effect.3
This case is outside the bounds of the Massey teaching be‐
cause the amended complaint did not change the theory or
scope of the case in a way relevant to the new defense. Bur‐
ton’s amended complaint did not add a new cause of action,
change the theory of liability, change the parties, assert new
claims, or otherwise transform the litigation in any way. In‐
stead, it added detail to the existing factual allegations and
3 A frequently‐cited nonprecedential order, Manasher v. NECC Tele‐
com, 310 F. App’x 804, 807 (6th Cir. 2009), came to the same conclusion we
reach here, affirming a denial of arbitration because the defendant had
waived any right to arbitrate. The waived defense could not be revived in
response to an amended complaint that “did not substantially change the
theory or scope” of the case. Id.
14 No. 19‐1360
emphasized the delay in medical treatment as a part of Bur‐
ton’s deliberate‐indifference claim using information ob‐
tained from discovery. The minor amendments had nothing
to do with a res judicata defense. They could not support al‐
lowing this new affirmative defense so late in the case.
Defendants also argue that the district judge’s instruction
to “answer or otherwise plead to Plaintiff’s amended com‐
plaint” was an invitation to raise new affirmative defenses.
This argument is without merit. First, a new answer is required
when a complaint is amended. The district court merely com‐
plied with Rule 15(a)(3) by setting a 14‐day timeline for the
“required response” to the amended pleading. No one con‐
tends that defendants were not permitted to respond to the
amended complaint. But the invitation to answer an amended
complaint should be understood as permission to plead in re‐
sponse to the amendments, as contemplated by Rule 15(a)(3),
unless leave is expressly given to raise new defenses unre‐
lated to the amendments. In the usual course, this means re‐
sponding to the new substance of the amended complaint.4
4 Before 2007, Rule 15(a) specifically required that “[a] party shall
plead in response to an amended pleading.” (2006). Courts interpreting
this rule have understood this required responsive pleading to be limited
in scope by the substance of amendments to the first pleading. See St. Paul
Fire & Marine Insurance Co. v. Onvia, Inc., No. C06‐1056‐RSL, 2007 WL
1575955, at *1 (W.D. Wash. May 29, 2007) (allowing only responsive coun‐
terclaims following an amended complaint and noting that the approach
“is predominant in the caselaw and consistent with Rule 15’s requirement
that an amended pleading must ‘plead in response’ to the amended plead‐
ing”); E.E.O.C. v. Morgan Stanley & Co., Inc., 211 F.R.D. 225, 227 (S.D.N.Y.
2002) (“If every amendment, no matter how minor or substantive, allowed
defendants to assert counterclaims or defenses as of right, claims that
would otherwise be barred or precluded could be revived without cause.
No. 19‐1360 15
Second, the district judge made clear in granting defend‐
ants’ motion to dismiss that she was not exercising discretion.
Rather, the judge felt compelled by Massey to allow the new
affirmative defense. (Also, defendants did not actually “an‐
swer or otherwise plead” the affirmative defense but instead
raised the new defense in a motion to dismiss. See Fed. R. Civ.
P. 7 (distinguishing pleadings from motions). Confusing
pleadings and motions contributed to some of the problems
presented by this appeal.)
The district court erred in concluding that Massey required
it to allow defendants’ new affirmative defense. Because of
the limited scope of the amendments, Burton’s amended com‐
plaint was irrelevant to defendants’ late assertion of an affirm‐
ative defense. It did not wipe the slate clean and render irrel‐
evant the previous failure to raise it.
D. Forfeiture of Defendants’ Res Judicata Defense
We now consider whether the district court may, within
its discretion, consider the res judicata defense on remand.
Burton argues that the defense was waived or forfeited. We
agree that the defense was forfeited, at least, and we agree
with Burton that the untimely assertion of the defense preju‐
diced Burton. On this record, allowing defendants’ late res ju‐
dicata defense would be an abuse of discretion even under the
liberal standard of Rule 15(a)(2).
This would deprive the Court of its ability to effectively manage the liti‐
gation.”). We agree with this view. The Committee Notes on the 2007
Amendments to the Rules say that the changes to Rule 15 that gave it its
current wording were “intended to be stylistic only.”
16 No. 19‐1360
Burton first argues that defendants have waived the res ju‐
dicata defense. When moving for reconsideration of the dis‐
trict court judgment, Burton submitted a sworn declaration
from his first attorney, Joshua Grenard, who testified that he
informed Dr. Ghosh’s prior counsel, Patrick Halliday, of the
first case before Halliday even appeared in this new case. Hal‐
liday responded that he would not raise the untimely filing of
the new complaint after the prior dismissal as a defense, and
he filed an answer to the new complaint without raising res
judicata. If these facts are correct, they would show a knowing
and intelligent relinquishment—i.e., waiver by any defini‐
tion—of res judicata. See Wood, 566 U.S. at 470 n.4. This evi‐
dence was presented in the district court over a year before
defendants submitted their briefs on appeal. Defendants have
not contested this evidence. Instead, they have insisted that
their notice of the earlier lawsuit is “immaterial.” It is not. But
despite defendants’ repeated avoidance of this issue, we can‐
not settle the factual dispute now because it was not ad‐
dressed in the district court and the proper resolution of the
issue is not “beyond doubt.” Metropolitan Milwaukee Assʹn of
Commerce v. Milwaukee County, 325 F.3d 879, 884 (7th Cir.
2003), quoting AAR Intʹl, Inc. v. Nimelias Enterprises, S.A., 250
F.3d 510, 523 (7th Cir. 2001), quoting in turn Singleton v. Wulff,
428 U.S. 106, 121 (1976).
Beyond any factual dispute, however, defendants’ affirm‐
ative defense was untimely and forfeited. Defendants were
never served with the complaint and summons in the first
case. But the key information at issue—the existence of the
earlier lawsuit—was a matter of public record. Most im‐
portant, defendants were told about the previous case at sev‐
eral points during this second case. Burton referred to the ear‐
lier complaint during his deposition testimony in 2015, three
No. 19‐1360 17
years before defendants raised their defense. He explained
that he had filed an earlier complaint against another doctor
at an IDOC facility and that there was “one big complaint”
including that doctor, Dr. Ghosh, and others. Defense counsel
responded that “the only complaint I have right now naming
Dr. Ghosh … names Dr. Ghosh and Wexford Health Sources,
the employer,” and moved on.
Two years later, in June 2017, attorney Grenard moved to
withdraw. His motion stated specifically that he had been re‐
cruited by the court to serve as pro bono counsel to Burton and
cited the case number of the earlier matter. Even if these
events were not enough to show intentional waiver, when
combined with the six‐year history of the case, extensive dis‐
covery, and the public nature of the relevant information, they
establish that the defense was untimely in 2018.
We arrive at this conclusion even though the affirmative
defense focuses on omissions by Burton’s original counsel. He
missed the deadline for filing an amended complaint and then
said incorrectly on the civil cover sheet for the new case that
it was “not a refiling of a previously dismissed action.” If he
had correctly characterized the case as a refiling of the original
case, the case would have been assigned to Judge Gettleman
and any conflict with the earlier judgment could have been
resolved immediately. Still, given the information available to
defendants, six years is simply too long for this res judicata
defense to be timely.
Burton was prejudiced by the delay in raising the defense.
Burton proceeded for over six years in pursuing this claim,
including years of discovery. We have said that the expense
of conducting a suit does not count as prejudice. Global Tech‐
nology & Trading, Inc. v. Tech Mahindra Ltd., 789 F.3d 730, 732
18 No. 19‐1360
(7th Cir. 2015), citing Williams v. Lampe, 399 F.3d 867, 871 (7th
Cir. 2005), and Schmidt v. Eagle Waste & Recycling, Inc., 599 F.3d
626, 632 (7th Cir. 2010). But as this case shows, delay can dis‐
advantage a party in ways that go beyond mere cost.
If the res judicata defense had been timely raised in the
original answer, Burton would still have been able to seek re‐
lief from the earlier final judgment under Rule 60. The final
judgment in the earlier case resulted from the odd metamor‐
phosis of a dismissal without prejudice into a dismissal with
prejudice. This new case, in which a plaintiff filed a new com‐
plaint several months late, would certainly permit an argu‐
ment that the error amounted to “excusable neglect” that
would permit relief from judgment. Fed. R. Civ. P. 60(b)(1).
The case for allowing relief from judgment would have been
particularly strong because the lack of service in the first case
meant that defendants were not prejudiced at all. Conditions
imposed on voluntary dismissals are imposed to protect other
parties from prejudice, which was not necessary in this case
because the first case had been dismissed before these defend‐
ants even knew it existed. See Ratkovich v. Smith Kline, 951 F.2d
155, 158 (7th Cir. 1991).
Burton was further prejudiced by defendants’ improper
raising of res judicata in a late motion to dismiss. The events
here show why presenting affirmative defenses in a motion to
dismiss can be so troublesome. It allows a defendant to am‐
bush a plaintiff, distorting the process contemplated by the
Rules and impairing plaintiff’s ability to confront untimely
defenses. Ghosh and Wexford filed their Rule 12(b)(6) motion
after discovery had concluded and with a summary judgment
deadline looming. Burton’s attorneys were expecting to ad‐
No. 19‐1360 19
dress the merits of the case, not an untimely res judicata de‐
fense brought years into the litigation. They had limited time
to respond to an unexpected motion that required them not
only to address the defense on its merits but also to search
years of litigation history to determine whether the defense
had been waived or forfeited.
This procedural tactic thus gave defendants the benefit of
an amended pleading without having to address in their mo‐
tion whether amendment was appropriate. Defendants said
nothing in the motion about Rule 8(c), the timing of affirma‐
tive defenses, or the standard for amendment. They first ad‐
dressed the core issue—the propriety of the amendment—
only in their reply, after Burton correctly pointed out that the
motion to dismiss put the cart before the horse. And even
when they got there, defendants argued in reply, when it was
too late for plaintiff to be heard on the issue, that the district
court was required by case law to allow the new defense.
These tactics blindsided plaintiff. He had to both rebut the
substantive defense and bring to the court’s attention the pro‐
cedural issue that should have required its own motion for
leave to amend from defendants. And because defendants did
not raise the core issue until their reply, plaintiff was unable
to respond as effectively as if the issue of amendment had
been raised properly. The procedural errors created by de‐
fendants’ improper motion to dismiss unfairly prejudiced
Burton’s ability both to contest the merits of the res judicata
defense and to encourage the district court to exercise its dis‐
cretion to forbid amendment of the answer. This is the kind of
procedural prejudice that led us to reverse in Venters, 123 F.3d
at 968. Cf. Jackson, 213 F.3d at 393 (plaintiff was not prejudiced
20 No. 19‐1360
when district court permitted defendant to amend answer be‐
cause the court required defendant to request leave to amend,
required defendant to brief the motion separately, and gave
plaintiff opportunity for additional discovery to oppose mo‐
tion).5
This procedural prejudice is particularly striking here be‐
cause there were substantive questions about the applicability
of res judicata that needed to be fully addressed. Defendants
assert that they were not on notice of the first case because
they were never served. The lack of notice is essential to their
defense. If they were on notice, waiting almost six years to
raise the defense would amount to waiver. Yet if, as they say,
they were not on notice, none of the rationales for applying
res judicata apply. Preclusion doctrines serve to limit “the ex‐
pense and vexation attending multiple lawsuits, conserve[]
judicial resources, and foster[] reliance on judicial action by
minimizing the possibility of inconsistent decisions.” Walczak
v. Chicago Board of Education, 739 F.3d 1013, 1020 (7th Cir.
2014), quoting Matrix IV, Inc. v. American Nat’l Bank & Trust
5Defendants point out that plaintiff could have sought leave to file a
sur‐reply. Perhaps, but we will not hold against a party its decision not to
seek leave to file a sur‐reply. See Costello v. Grundon, 651 F.3d 614, 635 (7th
Cir. 2011) (“there is no requirement that a party file a sur‐reply to address
an argument believed to be improperly addressed”), quoting Hardrick v.
City of Bolingbrook, 522 F.3d 758, 763 n.1 (7th Cir. 2008). Ironically, defend‐
ants argue in their sur‐reply on appeal that they experienced prejudice be‐
cause Burton raised new arguments in his reply brief affording them “lit‐
tle opportunity to review the new arguments” and respond. Burton did
not present new arguments in his reply brief. He merely developed those
made in the opening brief, which is appropriate. The point is well taken,
however, with respect to prejudice Burton experienced in the district
court.
No. 19‐1360 21
Co., 649 F.3d 539, 547 (7th Cir. 2011), quoting in turn Montana
v. United States, 440 U.S. 147, 153–54 (1979) (alterations in Ma‐
trix IV). There is no unfairness, no vexation, no undue ex‐
pense, and no violation of reliance interests when defendants
must confront on the merits a claim whose predecessor went
completely unnoticed before it was dismissed. They did not
have to litigate the claim in the first place. This case is the sec‐
ond trip to court for Burton, but it is the first for Ghosh and
Wexford on his claims.6
These equitable considerations are reflected in the doc‐
trine. Courts still apply the mutuality requirement for claim
preclusion even though that requirement has been aban‐
doned for issue preclusion. Coleman v. Labor & Industry Review
Commʹn of Wisconsin, 860 F.3d 461, 469 (7th Cir. 2017), citing
Parklane Hosiery Co. v. Shore, 439 U.S. 322 (1979), and Blonder‐
Tongue Laboratories, Inc. v. University of Illinois Foundation, 402
U.S. 313 (1971); see also Wright & Miller, 18A Federal Practice
6 The judicial economy rationale is similarly weak here because the
district judge in the first lawsuit originally dismissed the case without
prejudice, expecting that the case would proceed once Burton filed a new
complaint. And inconsistent decisions will not result when the first case
was dismissed voluntarily at the pleadings stage. Courts should be partic‐
ularly cautious in raising res judicata sua sponte in such cases:
[I]f a court is on notice that it has previously decided the issue pre‐
sented, the court may dismiss the action sua sponte, even though the
defense has not been raised. … [But] [w]here no judicial resources
have been spent on the resolution of a question, trial courts must be
cautious about raising a preclusion bar sua sponte, thereby eroding the
principle of party presentation so basic to our system of adjudication.
Arizona v. California, 530 U.S. 392, 412–13 (2000) (citation and quotation
marks omitted). This is not a case in which it would be appropriate for the
district court to consider a preclusion defense sua sponte.
22 No. 19‐1360
& Procedure § 4464.1. Under the doctrine of mutuality, “nei‐
ther party c[an] use a prior judgment as an estoppel against
the other unless both parties were bound by the judgment.”
Parklane Hosiery, 439 U.S. at 326–27. To bind a person by an in
personam judgment, the court must acquire jurisdiction over
the that person by service of process. Taylor v. Sturgell, 553 U.S.
880, 884 (2008), quoting Hansberry v. Lee, 311 U.S. 32, 40 (1940),
citing in turn Pennoyer v. Neff, 95 U.S. 714 (1877). If a party has
not been served and is not under the court’s jurisdiction, then
the court’s judgment cannot bind it. If a party could not have
been bound itself, then mutuality would forbid that party
from invoking claim preclusion. The late affirmative defense
of res judicata is thus highly doubtful on the merits here. If
the affirmative defense had been raised properly, Burton
would have been better able to address these issues.
To sum up, defendants’ untimely res judicata defense pre‐
judiced Burton both substantively and procedurally, so it
would be an abuse of discretion to allow them to raise the de‐
fense on remand.
E. Separate Ground for Dismissal of Wexford
The district court gave an additional reason for dismissing
the claim against Wexford. Defendants argued before the dis‐
trict court that if Ghosh were dismissed, Burton would be un‐
able to prove an underlying constitutional violation, citing
Monell v. Depʹt of Social Services, 436 U.S. 658 (1978). Burton
failed to assert any defense to the argument, so Wexford was
dismissed on this ground as well.7
7 The district court further observed that the “amended complaint does
not appear to set forth a Monell claim against Wexford” (emphasis added).
Because this issue was not clearly resolved by the district court and was
No. 19‐1360 23
The claim against Dr. Ghosh is going forward, but defend‐
ants’ theory was also wrong as a matter of law. Individual li‐
ability is not a prerequisite for a Monell claim. E.g., Glisson v.
Indiana Department of Corrections, 849 F.3d 372, 378 (7th Cir.
2017) (en banc) (reversing summary judgment for corporation
on Monell claim for policies deliberately indifferent to serious
health needs of prisoners with complex, multiple illnesses,
despite absence of evidence that any one employee‐physician
was deliberately indifferent). Indeed, that is a central point of
Monell: the municipal entity is liable because of its own ac‐
tions, not merely because of the wrongful conduct of one of
its employees.
***
The judgment of the district court is REVERSED and the
case is REMANDED for further proceedings consistent with
this opinion.
not raised in defendants’ motion to dismiss, we will not treat it as an in‐
dependent ground for affirming dismissal. Referring to Wexford as a
“municipal entity” for purposes of Monell is a bit odd, since it is a for‐profit
corporation rather than a municipal governmental entity. Under circuit
law, though, it is permissible; we addressed the controversy involving
such treatment in another case involving Wexford in Shields v. Illinois Dep’t
of Corrections, 746 F.3d 782 (7th Cir. 2014), among other cases.