                                        In the

         United States Court of Appeals
                       For the Seventh Circuit
                            ____________________  

No.  15-­‐‑1206  
ALLIANCE  FOR  WATER  EFFICIENCY,  
                                                                Plaintiff-­‐‑Appellee,  
                                           v.  

JAMES  FRYER,  
                                                           Defendant-­‐‑Appellant.  
                            ____________________  

              Appeal  from  the  United  States  District  Court  for  the  
                Northern  District  of  Illinois,  Eastern  Division.  
                No.  14  C  115  —  Jeffrey  Cole,  Magistrate  Judge.  
                            ____________________  

   ARGUED  SEPTEMBER  9,  2015  —  DECIDED  DECEMBER  22,  2015  
                  ____________________  

        Before  EASTERBROOK,  KANNE,  and  WILLIAMS,  Circuit  Judg-­‐‑
es.  
     EASTERBROOK,  Circuit  Judge.  Alliance  for  Water  Efficiency  
engaged  James  Fryer  to  analyze  how  urban  water  agencies’  
programs   affect   the   elasticity   of   demand   for   water   during  
droughts.   The   Alliance   agreed   to   coordinate   several   spon-­‐‑
sors  of  Fryer’s  analysis.  Fryer  prepared  a  draft  report,  which  
left  the  Alliance  dissatisfied,  and  it  filed  this  suit  in  an  effort  
to  prevent  Fryer  from  publishing  the  report.  But  the  Califor-­‐‑
2                                                              No.  15-­‐‑1206  

nia   Department   of   Water   Resources,   one   of   the   project’s  
sponsors,  is  happy  with  Fryer’s  work  and  willing  to  present  
his  findings  under  its  auspices.  
      The   parties   consented   to   final   decision   by   a   magistrate  
judge.  See  28  U.S.C.  §636(c)(3).  After  settlement  negotiations,  
the  parties  agreed  to  go  their  separate  ways.  Fryer  promised  
to  remove  the  Alliance’s  name  from  his  report  and  to  issue  it  
under  California’s  sponsorship.  He  also  promised  to  provide  
his  data  to  the  Alliance,  which  would  issue  a  separate  report  
in   its   own   name.   During   a   hearing   on   March   13,   2014,   the  
judge  stated  (without  objection  from  the  litigants)  that  “[t]he  
parties   have   decided   that   they   have   a   binding   settlement  
agreement  today  even  though  there  will  be  a  written  agree-­‐‑
ment  [later].”  Counsel  then  proceeded  to  “put  on  the  record  
the  material  terms  of  the  settlement.”  The  first  and  foremost  
of  these  is  that  “James  Fryer  may  prepare  his  own  report  for  
DWR  [California]  provided  he  removes  all  references  to  the  
Alliance  for  Water  Efficiency,  AWE,  in  his  report.  Converse-­‐‑
ly,  AWE  will  prepare  its  own  report  for  the  remaining  fund-­‐‑
ing   participants   of   the   Project   Advisory   Committee   exclud-­‐‑
ing  DWR.”  
    Acrimony  resumed  when  Fryer  declined  to  sign  the  more  
elaborate   written   text   that   the   Alliance’s   counsel   prepared.  
Fryer  contended  that  the  Alliance  had  introduced  terms  be-­‐‑
yond   those   agreed   on   March   13.   Drafts   and   counterdrafts  
were   circulated;   complete   written   agreement   was   never  
reached.   That   left   the   March   13   exchange   as   the   definitive  
settlement.  See,  e.g.,  PFT  Roberson,  Inc.  v.  Volvo  Trucks  North  
America,   Inc.,   420   F.3d   728   (7th   Cir.   2005)   (agreement   on  
some  terms  does  not  allow  a  court  to  fill  in  contested  terms).  
No.  15-­‐‑1206                                                                3  

     The  Alliance  protested  to  the  court  when  Fryer  circulated  
a   new   draft   report   that   identified,   as   providers   of   data   and  
assistance,   some   of   the   organizations   that   had   participated  
through   a   committee   that   the   Alliance   had   organized.   The  
Alliance   maintained   that   naming   any   organization   that   had  
dealt  with  Fryer  through  the  Alliance  would  imply  that  the  
report   had   the   Alliance’s   imprimatur.   Fryer,   by   contrast,  
contended  that  the  organizations  wish  to  be  identified  in  his  
report  and  that  a  consultant  is  entitled  to  name  sponsors  and  
collaborators.  
     The   magistrate   judge   concluded   that   paragraphs   1.0(3)  
and   1.1   of   the   Alliance’s   proposed   draft   (which   Fryer   had  
not   signed)   commits   Fryer   to   remove   from   his   report   any  
reference   to   entities   that   worked   with   him   through   or   in  
connection   with   the   Alliance,   unless   those   entities   take   the  
initiative   to   contact   him   and   say   that   he   can   mention   their  
names.   The   judge   wrote   an   opinion   to   that   effect,   2014   U.S.  
Dist.   LEXIS   150176   (N.D.   Ill.   Oct.   22,   2014),   and   entered   a  
judgment   that   reads   in   full:   “Parties   shall   comply   with   the  
Memorandum  Opinion  and  Order  [50]  issued  by  this  Court  
on   10/22/14   along   with   this   Court’s   Memorandum   Opinion  
and  Order  dated  1/7/15  [61]”  (brackets  in  original).  
    Although   the   magistrate   judge   appeared   to   contemplate  
injunctive  relief,  this  document  does  not  comply  with  Fed.  R.  
Civ.  P.  65(d)(1),  which  requires  every  injunction  to  “state  its  
terms   specifically”   and   to   “describe   in   reasonable   detail—
and   not   by   referring   to   the   complaint   or   other   document—
the  act  or  acts  restrained  or  required.”  After  oral  argument,  
at  which  members  of  this  court  pointed  out  the  problem,  the  
parties   asked   the   magistrate   judge   to   enter   a   self-­‐‑contained  
4                                                                              No.  15-­‐‑1206  

order  detailing  their  obligations.  The  judge  then  entered  this  
injunction:  
      1.  Mr.  Fryer  is  enjoined  from  and  cannot  state  in  his  separate  Re-­‐‑
      port   for   himself   and   the   California   Department   of   Water   Re-­‐‑
      sources   that   his   Report   has   been   sponsored   by   any   member   of  
      the  Project  Advisory  Committee,  which  is  composed  of  the  Met-­‐‑
      ropolitan   Water   District   of   Southern   California;   Irvine   Ranch  
      Water   District;   Inland   Empire   Utilities;   San   Antonio   Water   Sys-­‐‑
      tem;  City  of  Boulder,  Colorado;  Sonoma  County  Water  Agency;  
      and  Walton  Family  Foundation  (through  a  grant  to  Alliance  for  
      Water  Efficiency  (“AWE”))  to  support  or  sponsor  his  Report  ex-­‐‑
      cept  as  provided  below.  
      2.   Mr.   Fryer   shall   remove   from   his   Report   all   references   to:   (1)  
      AWE   and   its   employees,   including   any   reference   in   the   Ac-­‐‑
      knowledgment   section   of   the   Report;   (2)   Anil   Bamezai,   PhD  
      (“Dr.   Bamezai”);   (3)   all   funding   sources   other   than   California  
      Department  of  Water  Resources  (“DWR”),  unless  provided  with  
      permission   from   member   [sic]   of   the   Project   Advisory   Commit-­‐‑
      tee.  

      3.   Mr.   Fryer   is   enjoined   from   and   cannot   solicit   any   member   of  
      the   Project   Advisory   Committee   to   sponsor   or   support   his   Re-­‐‑
      port  without  the  member’s  prior  permission.  
      4.   AWE   shall   promptly   notify   its   funding   sources   and   PAC  
      members  that  a  settlement  has  been  reached  in  this  case  and  that  
      Mr.  Fryer  has  the  right  to  complete  his  Report  on  behalf  of  DWR.  
      5.   As   part   of   that   notification,   AWE   shall   provide   Mr.   Fryer’s  
      contact   information   (phone   number   and   email   address)   and   in-­‐‑
      form  the  recipient  that  if  he/she/it  is  interested  in  discussing  Mr.  
      Fryer’s  Report  or  participating  in  its  preparation,  sponsorship  or  
      issuance  they  are  free  to  contact  Mr.  Fryer.  
      6.  Should  any  of  those  notified  choose  to  participate  in  the  prep-­‐‑
      aration,  funding  or  sponsorship  of  Mr.  Fryer’s  Report,  nothing  in  
      this  injunction  shall  prevent  Mr.  Fryer  from  noting  that  sponsor-­‐‑
      ship  or  participation  in  his  Report.  
No.  15-­‐‑1206                                                                                5  

    7.  AWE  is  enjoined  from  and  cannot  state  in  its  separate  Report  
    that  it  was  prepared  on  behalf  of  or  sponsored  by  anyone  other  
    than  AWE  and  the  members  of  the  Project  Advisory  Committee.  
    8.   AWE   is   enjoined   from   and   shall   not   contact   DWR   regarding  
    sponsorship  or  participation  in  AWE’s  Report.  
    9.  AWE  shall  not  utilize,  in  whole  or  in  part,  the  exact  language  
    used   in   Mr.   Fryer’s   Report   and   shall   utilize   a   different   cover  
    page,   and   different   graphs   and   charts   from   those   used   in   Mr.  
    Fryer’s  Report.  
    10.   Nothing   in   any   provision   of   this   injunction   shall   require   ei-­‐‑
    ther  AWE’s  or  Mr.  Fryer’s  Report  to  arrive  at  any  particular  re-­‐‑
    sult,  or  use  any  particular  mode  of  analysis  or  methodology.  

Fryer   contends   that   this   injunction   creates   a   prior   restraint  
that   violates   the   First   Amendment.   Before   we   tackle   that  
subject,  however,  we  must  decide  whether  the  suit  is  proper-­‐‑
ly  in  federal  court.  
    The   Alliance’s   complaint   invoked   federal-­‐‑question   juris-­‐‑
diction,  28  U.S.C.  §1331,  via  the  Copyright  Act.  The  Alliance  
claimed  to  be  a  copyright  proprietor  that  needed  judicial  as-­‐‑
sistance   to   prevent   Fryer   from   infringing   its   rights.   Accord-­‐‑
ing   to   the   Alliance,   the   report   is   a   “work   made   for   hire”  
within   17   U.S.C.   §101,   so   that   the   Alliance   owns   the   copy-­‐‑
right   even   though   Fryer   wrote   all   the   words.   Yet   to   come  
within  that  definition  the  work  must  be  either  the  output  of  
an  employee—and  Fryer  is  not  employed  by  the  Alliance—
or  produced  under  “a  written  instrument  signed  by  [the  par-­‐‑
ties]   that   the   work   shall   be   considered   a   work   made   for  
hire”.   The   Alliance   did   not   allege   that   Fryer   had   agreed   in  
writing  that  his  report  would  be  a  work  for  hire.  Fryer  chal-­‐‑
lenged  the  copyright  claim  in  the  district  court,  and  the  Alli-­‐‑
ance   never   alleged,   let   alone   showed,   that   the   statutory   re-­‐‑
6                                                                   No.  15-­‐‑1206  

quirements  have  been  satisfied.  Federal-­‐‑question  jurisdiction  
therefore  is  unavailable.  
    Diversity   jurisdiction   under   28   U.S.C.   §1332   is   the   other  
possibility.  The  Alliance  is  incorporated  and  has  its  principal  
place   of   business   in   Illinois;   Fryer   is   a   citizen   of   California.  
The  amount  in  controversy  exceeds  $75,000.  But  Fryer  main-­‐‑
tains   that   the   Alliance   is   just   a   conduit   for   the   donors   that  
sponsored   Fryer’s   report,   and   that   none   of   the   grants   indi-­‐‑
vidually   exceeds   $75,000.   Because   separate   persons’   claims  
cannot   be   aggregated   to   reach   the   jurisdictional   threshold,  
see  Snyder  v.  Harris,  394  U.S.  332  (1969),  Fryer  contends  that  
§1332  does  not  supply  jurisdiction.  
      Yet  the  Alliance  contends  that  it,  rather  than  the  funders,  
arranged   with   Fryer   for   the   report.   A   corporation   exists   in-­‐‑
dependently  of  its  investors—and  of  its  sponsors.  Where  the  
Alliance  got  the  money  to  pay  Fryer  is  neither  here  nor  there  
for   jurisdictional   purposes.   Nor   does   it   matter   whether   the  
contract   is   oral   rather   than   written.   Fryer   might   have   been  
able  to  argue  that  he  does  not  owe  any  contractual  obligation  
to   the   Alliance,   as   opposed   to   the   sponsors,   but   that   would  
have  been  a  defense  on  the  merits—and  a  claim’s  failure  on  
the  merits  does  not  divest  a  district  court  of  jurisdiction.  See  
Bell  v.  Hood,  327  U.S.  678  (1946).  Instead  of  defending,  how-­‐‑
ever,   Fryer   struck   a   bargain.   Given   diversity   of   citizenship  
and  the  amount  in  controversy,  an  action  to  enforce  the  set-­‐‑
tlement  contract  is  independently  within  federal  jurisdiction,  
even   if   the   original   suit   would   have   failed   on   the   merits   or  
should   have   been   dismissed.   See   Kokkonen   v.   Guardian   Life  
Insurance  Co.,  511  U.S.  375  (1994).  
   Now   for   the   merits,   and   we   can   be   brief.   The   district  
court’s  injunction  has  the  classic  attribute  of  a  prior  restraint:  
No.  15-­‐‑1206                                                                  7  

It   tells   Fryer   what   he   must   or   must   not   say   in   some   future  
publication.   Even   an   express   promise   not   to   speak,   such   as  
the   one   between   secret   agents   and   the   CIA,   normally   is   en-­‐‑
forced  by  damages  or  restitution  after  the  fact  rather  than  a  
prior  restraint.  See  Snepp  v.  United  States,  444  U.S.  507  (1980).  
No   one   contends   that   national   security   or   some   other   com-­‐‑
pelling  interest  is  at  stake  here,  and  the  district  court  did  not  
give  any  reason  for  resorting  to  a  prior  restraint  as  opposed  
to,  say,  a  declaratory  judgment  that  might  set  up  a  claim  for  
damages  if  the  Alliance  could  show  some  concrete  injury.  
   But  courts  should  not  decide  constitutional  issues  unnec-­‐‑
essarily,   and   we   need   not   consider   the   effect   of   the   First  
Amendment.   The   district   court’s   injunction   goes   beyond  
what  the  parties  agreed  on  March  13,  2014.  It  takes  the  Alli-­‐‑
ance’s   later   drafts   as   if   they   were   a   signed   contract,   which  
they  aren’t.  On  March  13  Fryer  promised  to  remove  the  Alli-­‐‑
ance’s  name  from  his  report.  He  did  not  promise  to  omit  the  
sponsors’  names.  
     The   Alliance   contends,   and   the   magistrate   judge   found,  
that  unless  Fryer  is  forbidden  to  mention  any  person  or  enti-­‐‑
ty  that  participated  in  the  Project  Advisory  Committee,  some  
readers   may   associate   Fryer’s   report   with   the   Alliance   even  
though  the  Alliance’s  name  and  logo  don’t  appear.  Granted.  
But  that’s  the  nature  of  a  compromise.  Neither  side  gets  eve-­‐‑
rything   it   wants.   The   Alliance   did   not   get   everything   it  
wanted  even  in  the  injunction,  ¶6  of  which  permits  Fryer  to  
name  suppliers  of  data,  advice,  and  financial  support  if  they  
call  him  first.  
    The   district   court’s   injunction   is   vacated   because   it   con-­‐‑
tains   terms   on   which   the   parties   have   not   agreed.   If   Fryer  
should  violate  any  provision  of  the  March  13  settlement,  the  
8                                                              No.  15-­‐‑1206  

Alliance  can  pursue  a  remedy  in  damages—in  federal  court  
if   the   injury   exceeds   $75,000,   and   otherwise   in   state   court.  
(The   March   13   agreement   specifies   venue:   the   Alliance   will  
sue  Fryer  only  in  California,  and  Fryer  will  sue  the  Alliance  
only  in  Illinois.  This  means  that  the  Alliance  cannot  return  to  
the  Northern  District  of  Illinois  with  any  further  contention  
that  Fryer  has  failed  to  keep  his  promises.)  
    Some  of  the  magistrate  judge’s  language  suggests  that  he  
wanted  Fryer  to  turn  additional  data  over  to  the  Alliance  or  
a  consultant,  but  no  such  requirement  appears  in  the  injunc-­‐‑
tion  or  in  any  judgment  satisfying  Fed.  R.  Civ.  P.  58.  Fryer  is  
therefore   under   no   obligations   beyond   those   undertaken   in  
the  settlement  agreement.  
                                                                  REVERSED  
