Robert R. Banks v. Preston Humphrey, LLC

United States Court of Appeals
For the Seventh Circuit
Chicago, Illinois 60604
Submitted April 21, 2015 *
Decided April 23, 2015
Before
WILLIAM J. BAUER, Circuit Judge
DIANE S. SYKES, Circuit Judge
JOHN DANIEL TINDER, Circuit Judge
No. 14-3766
ROBERT R. BANKS,
Plaintiff-Appellant,
v.
PRESTON HUMPHREY, LLC, et al.,
Defendants-Appellees.
Appeal from the United States District
Court for the Southern District of Illinois.
No. 13-cv-1336-JPG-PMF
J. Phil Gilbert,
Judge.
O R D E R
Robert Banks, a Louisiana prisoner, is suing Alok Kale, the court-appointed
attorney who represented him in a 2003 drug prosecution. Along with Kale, Banks has
also sued Kale’s former law firm, Preston Humphrey, LLC, and an unnamed insurance
company. He brings only state-law claims—breach of fiduciary duty, constructive fraud,
and fraudulent misrepresentation and concealment—and seeks damages. The district
* Two appellees were not served with process in the district court and are not
participating in this appeal. The third appellee participated in the district court, but
declined to participate in this appeal. After examining the appellant’s brief and the
record, we have concluded that oral argument is unnecessary. Thus the appeal is
submitted on the brief and the record. See FED. R. A PP. P. 34(a)(2)(C).
NONPRECEDENTIAL DISPOSITION
To be cited only in accordance with Fed. R. App. P. 32.1

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No. 14-3766 Page 2
court dismissed Banks’s claims against Kale and the insurance company without
prejudice for failure to serve, and dismissed the claims against Preston Humphrey with
prejudice for failure to state a claim. We conclude, however, that the district court lacked
subject-matter jurisdiction because Banks’s claims do not meet the amount in
controversy required for diversity jurisdiction. See 28 U.S.C. § 1332.
Banks bases his claims on a form that Kale used to request from the court
payment for representing Banks during the criminal proceedings. In seeking payment,
Kale checked “yes” to the question, “[o]ther than from the court, have you, or to your
knowledge has anyone else, received payment (compensation or anything of value) from
any other source in connection with this representation?” The criminal case ended with
Banks pleading guilty to several counts of conspiracy to distribute controlled substances.
He was sentenced to 360 months’ imprisonment. Banks’s later petition under 28 U.S.C.
§ 2255, asserting that his counsel was ineffective, was denied, see Banks v. United States,
No. 08-CV-00063-JPG (S.D. Ill. 2009), as was his request for a certificate of appealabililty
and his request for authorization to file a second or successive petition under 28 U.S.C.
§ 2244(b)(3)(A). See Banks v. United States, No. 09-1544 (7th Cir. 2009).
Nearly 10 years after Kale submitted his payment form, Banks filed this suit. He
alleges that, by answering “yes” and saying nothing more, Kale failed to disclose from
whom he was receiving compensation. Banks contends that Kale’s advice, which Banks
accepted, to plead guilty was compromised by the undisclosed source of funds.
Invoking only state law, he demands $40,000,000 in compensatory damages and
$80,000,000 in punitive damages.
Preston Humphrey filed a motion to dismiss that, among other things, challenged
Banks’s ability to satisfy the $75,000 amount-in-controversy requirement for diversity
jurisdiction. See 28 U.S.C. § 1332(a). Bypassing that argument, the district court
dismissed Banks’s claims against Preston Humphrey for failure to state a claim. It
explained that Banks had not articulated how Kale’s representation prejudiced him. The
court dismissed Kale and the insurance company after Banks was unable to serve them.
After the district court entered judgment, Banks filed a post-judgment motion that, in
part, asked the district judge to recuse himself because he had granted the defendant’s
motion to dismiss after it failed to comply strictly with the service-of-process rules.
Because Banks relied solely on the judge’s adverse judicial rulings to support his request
for recusal, the district court properly omitted any discussion of Banks’s request in
denying the post-judgment motion. See Liteky v. United States, 510 U.S. 540, 555 (1994).

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No. 14-3766 Page 3
On appeal Banks raises three arguments. First, he contends that the district judge
should have recused himself because he had presided over Banks’s criminal case and
approved the form that Kale submitted. Second, Banks asserts that the district court
erred in granting the defendant’s motion to dismiss because the defendant failed
properly to serve him with the motion. Finally, Banks insists that Kale was properly
served with the complaint in the district court, and thus, the court should not have
dismissed him from the lawsuit.
We need not address Banks’s arguments, however, because this case does not fall
within federal subject-matter jurisdiction. Jurisdiction is the first question in every
federal case. See Bender v. Williamsport Area Sch. Dist., 475 U.S. 534, 541 (1986);
Büchel-Ruegsegger v. Büchel, 576 F.3d 451, 453 (7th Cir. 2009). When Banks filed his
complaint, he invoked diversity jurisdiction, see 28 U.S.C. § 1332, and Preston Humphrey
challenged his allegation of the amount in controversy. To answer that challenge, Banks
may not rest on his complaint alone. See McMillian v. Sheraton Chi. Hotel & Towers, 567
F.3d 839, 844–45 (7th Cir. 2009); Meridian Sec. Ins. Co. v. Sadowski, 441 F.3d 536, 543 (7th
Cir. 2006). He “must come forward with competent proof that [he has] satisfied the
jurisdictional threshold and not simply point to the theoretical possibility of recovery for
certain categories of damages.” McMillian, 567 F.3d at 845. But when Banks responded to
Preston Humphrey’s motion to dismiss, he said only that he “contests” the defendant’s
challenge to the jurisdictional threshold and that a jury should decide it. He offered no
reason to believe that he could satisfy it.
This omission is both fatal and understandable. As a matter of law Banks may not
recover any damages in this suit for a wrongful conviction. Because Banks did not pay
Kale to represent him, the only plausible damages to Banks from Kale’s allegedly
compromised advice to plead guilty would be for the time that Banks has been wrongly
incarcerated. See Lafler v. Cooper, 132 S. Ct. 1376, 1384–85 (2012) (reiterating that two-part
Strickland v. Washington test for ineffective assistance applies to representation during
plea negotiations and prejudice is shown when there is reasonable probability that
defendant would not have pleaded guilty but for counsel’s errors); Hill v. Lockhart, 474
U.S. 52, 56–67 (1985) (explaining that defendant can assert ineffective assistance to attack
guilty plea as involuntary where he relied on advice of counsel that fell below objective
“range of competence”). But his conviction is intact. Therefore Heck v. Humphrey, 512 U.S.
477 (1994), eliminates the possibility of damages for a wrongful conviction because
prevailing on that claim would necessarily imply the invalidity of an intact conviction.
Id. at 486–87; see Northfield Ins. Co. v. City of Waukegan, 701 F.3d 1124, 1133 (7th Cir. 2012).

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We have considered whether Banks has asserted any claims that avoid Heck and
satisfy the amount-in-controversy requirement. He has not articulated any, and we
cannot see any in his complaint. Even if he did not contest the validity of his conviction
or seek actual damages arising from it, and pursued only punitive damages for Kale’s
alleged failure to disclose the source of third-party funds, Banks could not meet the
amount-in-controversy threshold. Punitive damages are not available under Illinois law
for legal malpractice unless the attorney’s omission was intentional. See 735 ILCS
5/2-1115; Scott v. Chuhak & Tecson, P.C., 725 F.3d 772, 783–84 (7th Cir. 2013); Cripe v. Leiter,
683 N.E.2d 516, 518–19 (Ill. App. Ct. 1997). And Banks has not alleged that Kale intended
to conceal information from Banks. He alleges only that Kale “failed to disclose” his
receipt of third-party funds. He uses labels like “fraud,” but legal conclusions are not
sufficient without a general allegation of intent, see FED. R. C IV. P. 9(b), and Banks raises
none. Accordingly Banks’s complaint suggests at most only a breach of professional
duty, not intentional misconduct, necessarily eliminating the theoretical possibility of
punitive damages to satisfy the amount-in-controversy requirement.
Accordingly, we AFFIRM the judgment of the district court but we MODIFY the
judgment so that all of Banks’s claims are dismissed without prejudice.

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