In the
United States Court of Appeals
For the Seventh Circuit

No. 99-1976

Rixson Merle Perry,

Plaintiff-Appellant,

v.

Globe Auto Recycling, Inc., William
J. Zuccaro, William M. Zuccaro, Robert
Zuccaro, and Daniel Carmin Tarry,

Defendants-Appellees.



Appeal from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 98 C 4092--William T. Hart, Judge.


Argued January 4, 2000--Decided September 19, 2000



  Before Cudahy, Kanne, and Diane P. Wood, Circuit
Judges.

  Diane P. Wood, Circuit Judge. Rixson Perry is a
well- known user of this court’s services. See
Perry v. Sheahan, Nos. 99-1079, 99-2741, 2000 WL
1006950 (7th Cir. July 21, 2000); Perry v.
Sullivan, 207 F.3d 379 (7th Cir. 2000); Perry v.
Village of Arlington Heights, 186 F.3d 826 (7th
Cir. 1999); Perry v. Pogemiller, 16 F.3d 138 (7th
Cir. 1993); and Perry v. Federal Bureau of
Investigation, 759 F.2d 1271 (7th Cir. 1985), on
rehearing en banc, 781 F.2d 1294 (7th Cir. 1986).
The present case arises out of his challenges to
the ordinances maintained by the Village of
Arlington Heights, Illinois, regarding the
seizure of abandoned automobiles. (His standing
to pursue some of these claims was at issue in
the earlier Arlington Heights litigation, 186
F.3d 826, supra.) In the course of challenging
the vehicle seizure ordinances, Perry claimed to
have discovered evidence of municipal corruption
that prompted him to sue Daniel Tarry, a Village
employee, and Globe Auto Recycling (Globe) under
the civil RICO provisions, 18 U.S.C. sec.
1964(c).

  Perry’s own RICO case was dismissed with
prejudice and is not now before us. Instead,
Perry purchased for $100 the claims of another
Arlington Heights resident, Roy Lahucik, and is
now pursuing those claims. The district court
dismissed the case on the ground that it was
barred by claim preclusion. This, we conclude,
was error. It is possible that the Lahucik claims
may be barred by the RICO statute of limitations,
but the record as it now stands is not developed
enough for us to make a judgment on that point.
We therefore remand the case to the district
court for further proceedings.

  Perry’s crusade against the Arlington Heights
vehicle seizure ordinance began on October 27,
1992, when Arlington Heights Code Enforcement
Officer Daniel Tarry ordered the seizure of
Perry’s 1975 Ford LTD. The Village ordinance then
permitted seizure of abandoned vehicles without
prior notice to the owner of record. In order to
get his vehicle back, Perry had to pay certain
fees, despite the fact that he was not given the
opportunity to have a hearing concerning the
validity of the seizure in the first place. Perry
sued both the Village and Tarry, claiming that
his federal due process rights have been violated
by the Village’s procedure. The district court
agreed, to the extent of granting partial summary
judgment in Perry’s favor on the question whether
the practice was unconstitutional. In the damages
phase of the case, however, Perry failed to
comply with various discovery requests, and
eventually the judge dismissed the action as a
sanction.

  Down but not out, Perry responded with a number
of actions based on the civil provisions of the
Racketeer Influenced and Corrupt Organizations
Act, more commonly known as RICO. He believed
that Tarry and Globe, the company that the
Village used to provide towing services, were
engaged in a corrupt conspiracy to violate the
rights of the hapless individuals who left their
cars unattended on the streets of Arlington
Heights. This group of cases, exemplified by
Perry v. Tarry, No. 96-C-7027, 1997 WL 361453
(N.D. Ill. June 20, 1997), arose out of the
seizure of Perry’s own car. At least one of the
later cases was dismissed on res judicata
grounds, and an exasperated district judge
ordered that "in any civil litigation commenced
by Perry within this circuit against the
defendants involved in this motion, the
defendants may ignore his filing unless the court
explicitly orders them to respond." Perry v.
Tarry, No. 96-C-7027, slip op. at 9-10 (N.D. Ill.
Apr. 16, 1997).

  Determined to right the wrongs he perceived,
Perry then went out and paid Roy Lahucik $100 for
"all claims, demands, and causes of action of
whatever kind and nature" arising out of the
seizure and towing of Lahucik’s 1984 Chevy
Suburban. The assignment was dated July 1, 1998,
but the record does not reveal when the Suburban
was towed. On July 2, 1998, Perry was back in
court, suing in his capacity as Lahucik’s
assignee, again raising the RICO theory that had
failed in his own lawsuits. The district court
dismissed in a brief order relying on res
judicata. The order stated that "[t]he assignment
of the claim does not preclude privity," found
that all the requirements for claim preclusion
were satisfied, and bounced the case out.

  It is impossible to fault the district judge
for having the reaction he did to this case. At
least with respect to the towing claims, Perry
has been an abusive litigant, and it is easy to
see why the judge concluded that the expedient of
persuading other individuals to assign their
claims to him should not be enough to avoid the
ban on Perry’s own filings. But we are concerned
with the breadth of the judge’s rationale, which
we think would--if generalized--cast doubt on
many legitimate assignments that occur every day
in the world of civil litigation. There are other
ways to control the misuse of judicial processes
by a person like Perry, which the court will be
free to consider on remand.

  The court’s claim preclusion rationale properly
focused on the three elements of federal claim
preclusion: identity of claims, identity of
parties, and a prior final judgment on the
merits. See, e.g., Roboserve, Inc. v. Kato Kagaku
Co., 121 F.3d 1027, 1034 (7th Cir. 1997). The
only element at issue here is identity of
parties; Perry concedes that the claims were
exactly the same (in the sense that they arose
out of exactly the same ordinances and procedures
used by the Village) and that there was a prior
final judgment on the merits in his own case. But
what about the parties? Globe argues that if
Lahucik himself had brought the present case he
too would be claim precluded, because of the
"virtual representation" theory, but that is
wrong. Indeed, one of the cases on which Globe
relies is the district court’s opinion in Tice v.
American Airlines, Inc., 959 F. Supp. 928 (N.D.
Ill. 1997), which this court later reversed in
Tice v. American Airlines, Inc., 162 F.3d 966
(7th Cir. 1998), expressly finding that the idea
of "virtual representation" cannot override an
individual’s right to his own day in court unless
the facts show a strong reason why the first
litigant was, in effect, a real representative
(not a virtual one) of the second. See also
DeBraska v. City of Milwaukee, 189 F.3d 650, 653
(7th Cir. 1999) (noting that this circuit takes
a "dim view of preclusion by virtual
representation in suits other than class
actions"). Perry was not Lahucik’s representative
in any sense of the term, and thus Lahucik would
have been fully entitled to bring the present
litigation on his own.

  The question thus becomes whether Lahucik’s
decision to assign his claim to Perry transforms
the claim from one that could be brought to one
that is barred by Perry’s earlier unsuccessful
efforts. We see no reason why this should be so.
Indeed, it is routine for institutions like banks
or insurance companies to take assignments of
large numbers of claims arising out of a single
transaction or occurrence, and given the vagaries
of litigation they undoubtedly win some and lose
some. The more common problem arises when the
assignor tries to evade claim preclusion by
selling the claim to another party; in that
situation, the district court’s statement that
assignment does not prevent a finding of privity
is certainly true. As the Supreme Court put it
long ago in Postal Telegraph Cable Co. v. City of
Newport, 247 U.S. 464, 474-75 (1918), "[t]he
ground upon which, and upon which alone, a
judgment against a prior owner is held conclusive
against his successor in interest, is that the
estoppel runs with the property, that the grantor
can transfer no better right or title than he
himself has."

  But we have the opposite situation here. The
applicable rule is therefore the one holding that
"the assignee stands in the shoes of the assignor
and assumes the same rights, title and interest
possessed by the assignor." Plumb v. Fluid Pump
Service, Inc., 124 F.3d 849, 864 (7th Cir. 1997)
(internal quotation marks and citations omitted).
So, even though Perry could receive no more than
Lahucik had, it is also true that he received no
less. Since Lahucik had the right to bring his
own claim, that is what he conveyed to Perry in
the assignment. See also Kane v. Magna Mixer Co.,
71 F.3d 555, 563 (6th Cir. 1995) (holding that
assignee is bound by assignor’s waiver); Rhode
Island Hospital Trust Nat’l Bank v. Ohio Casualty
Ins. Co., 789 F.2d 74, 82 (1st Cir. 1986) (noting
that where judgment precedes assignment, assignee
is precluded in same manner as assignor).

  Globe also argues that Perry could have brought
Lahucik’s claim as part of his earlier
litigation, but that is also not correct.
Ordinarily, of course, people have no standing to
assert the rights of third parties. See, e.g.,
Retired Chicago Police Ass’n. v. City of Chicago,
76 F.3d 856, 862 (7th Cir. 1996). None of the
exceptions to that rule that permit jus tertii
litigation would have permitted Perry, without a
hint of consent from Lahucik, to litigate
Lahucik’s claims. And there is definitely no rule
(and never will be one, as far as we are
concerned) under which strangers to a lawsuit
might be precluded in a later action just because
the first litigant hypothetically could have
tried to persuade a court to certify a class.

  Thus, the specific ground on which the district
court dismissed Perry’s action in his capacity as
Lahucik’s assignee was not correct. That does not
mean, however, that district courts are powerless
to prevent this genre of abuse. Even as an
assignee, Perry was subject to the normal
strictures of Rule 11 of the Federal Rules of
Civil Procedure, under which both parties and
their lawyers can be sanctioned for bringing
frivolous lawsuits. The string of defeats Perry
knew that he had suffered in his own suits gave
him a very good idea of the likelihood of success
another person would have on precisely the same
question. In addition, if the district court is
concerned that its earlier order attempting to
prevent Perry from cluttering up the court with
frivolous litigation was inadvertently too
narrow, it can always craft a broader injunction
that would cover the possibility of assignments.

  Last, Globe has vaguely argued that the Lahucik
claim is barred by the four-year RICO statute of
limitations. It has not developed that argument
in any detail, but given the district court’s
prior order telling Globe that it need not
respond to Perry at all, we do not think it
appropriate to find waiver on Globe’s part. The
greater problem with the limitations argument is
the lack of facts in the record that would permit
us to rule on it right now. The Supreme Court has
recently made clear the fact that the RICO
limitations period runs from "discovery of the
injury, not discovery of the other elements of a
claim." Rotella v. Wood, 120 S. Ct. 1075, 1081
(2000). The injury here would be the towing of
Lahucik’s Suburban. Even though Lahucik would not
have known at the time whether the towing was
wrong, the examples in Rotella drawn from the
area of medical malpractice demonstrate that this
makes no difference. He would have known that
something amounting to injury in fact had
occurred, and it would have been up to him to
inquire further to see if this was also a legal
wrong. Here, we know that Perry filed Lahucik’s
claim on July 2, 1998, but we have no idea when
the vehicle was towed. On remand, the district
court will be free to explore this defense if it
remains relevant to the litigation.

  We therefore REVERSE and REMAND this case to the
district court for further proceedings consistent
with this opinion. Costs on appeal will be taxed
against Perry.
  Cudahy, Circuit Judge, concurring in the
judgment. I cannot agree that the essential
element of identity of parties is absent here.
Nonetheless, because I believe that the two
claims may not be identical, I concur in the
result.

  The majority cites the following as the
applicable rule: "the assignee stands in the
shoes of the assignor and assumes the same
rights, title and interest possessed by the
assignor." Slip Op. at 5, quoting Plumb v. Fluid
Pump Service, Inc., 124 F.3d 849, 864 (7th Cir.
1997). From this rule, the majority reasons that,
when Perry took the assignment of Lahucik’s
claim, Perry also took Lahucik’s right to bring
the claim. However, whether Perry bought a valid
claim from Lahucik--which be doubtless did--does
not resolve whether the parties in the previous
case and in this case are identical. The
inescapable fact is that Perry was the plaintiff
in the previous case and Perry is the plaintiff
in the present case. Federal Rule of Civil
Procedure 17(a) states that "every action shall
be prosecuted in the name of the real party in
interest." Further, "[t]he federal courts . . .
and all of the state courts . . . have been in
full accord in holding that the unconditional
assignee of a complete chose in action is the
real party in interest . . . ." Overseas
Development Disc Corp. v. Sangamo Construction
Co., Inc., 686 F.2d 498, 505 n. 17 (7th Cir.
1982) (quoting 3A James Wm. Moore et al., Moore’s
Federal Practice para. 17.09(1.-1) at 17-84) (now
found at 4 James Wm. Moore et al., Moore’s
Federal Practice sec. 17.11[1][a] (3d ed. 1998)).
Hence, the claim in the present case belonged to
Lahucik, but the party in the present case is
Perry. Put another way, Perry bought Lahucik’s
claim, but he did not buy his identity.

  The majority intimates two policy justifications
for grounding the reversal in a lack of identity
between parties. First, every individual has a
right to his day in court, and barring Perry
because of an identity of claims might impair
Lahucik’s right. But that cannot be so; the
majority correctly states that, regardless of
Perry’s initial failure on his claim, Lahucik was
entitled to bring his own claim in his own name.
At most, barring Perry from bringing the suit
because of his prior failure would reduce by one
the number of people interested in buying
Lahucik’s claim.
  The majority also states that banks and
insurance companies routinely take assignments of
large numbers of claims arising out of a single
transaction or occurrence, "and given the
vagaries of litigation they undoubtedly win some
and lose some." Slip Op. at 5. However, banks and
insurance companies must buy the bulk of their
claims before litigating them. If a bank bought
a single claim, litigated it and lost, one might
argue that the bank is (or should be) precluded
from rustling up a second case to try its luck
again. The situation seems different when a bank
buys claims without any forewarning that the
claims lack merit and then pursues them
simultaneously to mixed results. In such cases,
as well as here, it may be more appropriate to
deny claim preclusion because the claims
themselves are different in some respects.

  In spite of the fact that an identity of
parties is present here, the result reached by
the majority is sustainable under another
analysis that seems to be more consistent with
the basic principles of claim preclusion. Beyond
the question of identity of parties lies the need
for identity of claims, and here the requirements
of claim preclusion may not be met. The present
RICO suit involves allegations of predicate acts
of acceptance of bribes and conspiracy. Since
Perry appears to have alleged a later terminal
date for the conspiracy than in his previous
complaints, he seems to have alleged new
predicate acts of bribery. Consequently, even
though Perry may have made a concession on this
point, there may well be different claims here.
So, even though the same party is bringing both
claims, the second claim may still survive
preclusion. However, on remand, Perry’s claim
should be limited to only the new dates of
conspiracy he has alleged.
