In the
United States Court of Appeals
For the Seventh Circuit
____________________
No. 12‐2958
VICTORIA KATHREIN and
MICHAEL L. KATHREIN,
Plaintiffs‐Appellants,
v.
CITY OF EVANSTON, ILLINOIS, et al,
Defendants‐Appellees.
____________________
Appeal from the United States District Court for the
Northern District of Illinois, Eastern Division.
No. 1:08‐cv‐00083 — Ronald A. Guzman, Judge.
____________________
ARGUED SEPTEMBER 10, 2013 — DECIDED MAY 15, 2014
____________________
Before KANNE, WILLIAMS, and TINDER, Circuit Judges.
TINDER, Circuit Judge. This appeal is the second occasion
for our court to consider the suit by Michael and Victoria
Kathrein against the City of Evanston, its mayor, and nine
aldermen, pursuant to 42 U.S.C. § 1983. Originally, the dis‐
trict court dismissed the case for want of subject matter ju‐
risdiction. A panel of this court then affirmed in part, re‐
versed in part, and remanded for further proceedings. But in
2 No. 12‐2958
light of an intervening decision of this court sitting en banc,
the district court revisited the question of subject matter ju‐
risdiction and dismissed the remaining claims for a second
time. Because the decision of the en banc court did effect an
intervening change in the law, we agree with the district
court and now affirm. We also decline to revisit the part of
the district court’s original decision that we have already af‐
firmed, despite the change in the law, because the Kathreins
failed to preserve that issue for review.
I
The Kathreins first filed suit in January of 2008, claiming
that Evanston’s Affordable Housing Demolition Tax violates
the Fifth and Fourteenth Amendments of the United States
Constitution, as well as provisions of the Illinois Constitu‐
tion and other state law. The facts leading to this lawsuit and
the first appeal were described in this court’s initial panel
decision. See Kathrein v. City of Evanston, Ill., 636 F.3d 906,
909–10 (7th Cir. 2011). To summarize, the Demolition Tax re‐
quires, with certain explicit exceptions, a property owner
seeking to demolish any residential building to first pay the
City $10,000 per building, or $3,000 per residential unit
(whichever is greater). The ordinance establishing the tax
states that the measure is designed to “provide a source of
funding for the creation, maintenance, and improvement of
safe and decent affordable housing in the City of Evanston.”
Evanston, Ill., Code § 4‐18‐1. It accomplishes this goal by di‐
recting the proceeds of the exaction to the city’s Affordable
Housing Fund, which helps low‐ and moderate‐income resi‐
dents find and keep affordable housing. Id. § 4‐18‐3(A). In
the relevant time period, the law generated approximately
$90,000 a year.
No. 12‐2958 3
The Kathreins alleged that they owned a property con‐
taining a single‐family house in Evanston in 2007, when a
real estate investor and developer agreed to purchase the
land for $225,000. But once the prospective buyer learned of
the Demolition Tax, he lowered his bid to reflect the extra
cost of razing the house. The sale fell through, and the
Kathreins state that they have since dropped any plans to
sell the property.
Instead, the Kathreins sued in federal court. Their case hit
an obstacle, however, in the Tax Injunction Act (TIA), 28
U.S.C. § 1341, which forbids federal courts to “enjoin, sus‐
pend, or restrain the assessment, levy or collection of any tax
under State law,” so long as there exists “a plain, speedy and
efficient remedy” available in state court. The Kathreins
therefore amended their complaint to add a new Count One,
which alleged that the TIA is unconstitutional.1 The district
court nevertheless granted the defendants’ motion to dis‐
miss. The court held that the Demolition Tax was a tax, and
that the Kathreins were attempting to interfere with its col‐
lection.2 Kathrein v. City of Evanston, Ill., No. 08 C 83, 2009 WL
1 They did not, however, inform the Attorney General of their challenge
to a federal statute, as required under Federal Rule of Civil Procedure
5.1.
2 The district court also held that the Kathreins lacked standing to chal‐
lenge the Demolition Tax, because they had never paid it and had no
current intention of demolishing the house on their property. The court
found that the doomed sale of the property was insufficient to establish
that they had suffered any financial injury, and stated that any attempt
to quantify the injury caused by the tax would rely on “speculation.”
2009 WL 3055364, at *5–6. The original panel in this case reversed that
holding and found that the Kathreins did have standing. 636 F.3d at 913–
15. Because we now hold that the TIA bars this court from hearing the
4 No. 12‐2958
3055364, at *4–5 (N.D. Ill. Sept. 18, 2009). As to the constitu‐
tionality of the TIA itself, the district court held that the
Kathreins lacked standing to bring that claim, because the
Act barred them only from federal court, and did not stop
them from challenging the Demolition Tax in state court. Id.
at *5. Therefore, the court reasoned, the Kathreins could not
show that the TIA injured them.
A panel of this court reversed the district court’s decision
in part. Employing a multi‐factor analysis, the panel held
that the Demolition Tax was a regulatory device, not a tax
within the meaning of the TIA, because it provided an effec‐
tive deterrent against the demolition of residential buildings,
and because it raised relatively little revenue. Kathrein v. City
of Evanston, Ill., 636 F.3d 906, 912–13 (7th Cir. 2011). And with
the Demolition Tax no longer considered a tax, the TIA
posed no obstacle to the Kathreins’ claims against it, and the
case could move forward. Id. at 916. But by the same token,
the Kathreins could not demonstrate that the TIA inflicted
any injury upon them. For that reason, the panel affirmed
the dismissal of the constitutional challenge to the TIA for
lack of standing. Id. at 913. The case was remanded to the
district court for further proceedings.
But before the district court could resolve the remaining
claims, this court issued its en banc ruling in Empress Casino
Joliet Corp. v. Balmoral Racing Club, Inc., 651 F.3d 722 (7th Cir.
2011). In that decision, the full court rejected the multi‐factor
approach to identifying a tax taken by the panel in the first
appeal in this case, stating, “We do not agree with that deci‐
challenge to the Demolition Tax, we will not revisit the panel’s judgment
on that issue.
No. 12‐2958 5
sion.” Id. at 730. Instead, the court held that an “exaction[]
designed to generate revenue” was a tax, contrasting such an
exaction with fines “designed … to punish,” and fees that
“compensate for a service that the state provides to the per‐
son or firms on whom … the exaction falls.” Id. at 728.
Upon learning of this court’s en banc decision, the de‐
fendants again moved to dismiss the Kathreins’ claims. Alt‐
hough the panel’s earlier ruling that the Demolition Tax was
not a tax was the law of the case, the defendants argued that
Empress Casino effected an intervening change in the law that
permitted the district court to depart from this court’s earlier
mandate. The Kathreins opposed the defendants’ motion,
arguing that the panel’s decision was still good law after Em‐
press Casino and that it still governed this litigation.
The district court agreed with the defendants. The court
read the Empress Casino case to say that the full court “would
conclude that the Demo[lition] Tax was a tax within the
meaning of the TIA.” Kathrein v. City of Evanston, Ill., No. 08
C 83, 2012 WL 3028331, at *2 (N.D. Ill. July 24, 2012). Alt‐
hough the en banc court did not “expressly overrule
Kathrein” the district court concluded that it could not ignore
“an opinion by the majority of the court stating that an earli‐
er panel decision was wrong.” Id. The Kathreins’ remaining
claims challenging the Demolition Tax were dismissed.
Notably, neither the district court nor the litigants dis‐
cussed what should happen to Count One, the Kathreins’
constitutional challenge to the TIA. To be sure, the district
court had already dismissed that claim in its first decision,
and the panel affirmed the dismissal, albeit on different
grounds. But that was before Empress Casino unsettled the
law of the case. If the TIA now bars the Kathreins’ suit, why
6 No. 12‐2958
were they still unable to show injury sufficient to establish
Article III standing? This question was left unanswered, be‐
cause it went unasked.
In the instant appeal, the Kathreins restate their argu‐
ments that the original panel decision still governs this case
even after Empress Casino. But they also argue in the alterna‐
tive that, if the Demolition Tax is now to be considered a tax,
they should be allowed to press forward with the constitu‐
tional challenge to the TIA in the district court.
II
We review a district court’s dismissal for want of subject
matter jurisdiction, whether due to the TIA or a lack of
standing, de novo. Hager v. City of W. Peoria, 84 F.3d 865, 868
(7th Cir. 1996); Doe v. Cnty. of Montgomery, Ill., 41 F.3d 1156,
1158 (7th Cir. 1994). We accept all well pleaded allegations in
the complaint as true, and draw all reasonable inferences in
favor of the plaintiff. Hager, 84 F.3d at 868–69; Doe, 41 F.3d at
1158. This appeal turns on the legal interpretation of the Em‐
press Casino decision, and not on any disputed factual find‐
ings of the district court.
A. Law of the Case
The Kathreins understandably maintain that our original
determination that the Demolition Tax was a regulatory de‐
vice is now the law of the case. According to the law of the
case doctrine, “a ruling made in an earlier phase of a litiga‐
tion controls the later phases unless a good reason is shown
to depart from it.” Tice v. Am. Airlines, Inc., 373 F.3d 851, 853
(7th Cir. 2004). Indeed, by finding the Demolition Tax was a
tax, the district court effectively reentered a judgment that
we had reversed on appeal. “The most elementary applica‐
No. 12‐2958 7
tion of [law of the case] doctrine is that when a court of ap‐
peals has reversed a final judgment and remanded the case,
the district court is required to comply with the express or
implied rulings of the appellate court.” Waid v. Merrill Area
Pub. Sch., 130 F.3d 1268, 1272 (7th Cir. 1997) (internal quota‐
tion marks omitted).
However, the law of the case doctrine is not “hard and
fast,” and we find that the district court had ample “good
reason” to depart from it in this instance. Tice, 373 F.3d at
853–54. In general, the “unusual circumstances” that justify
abandonment of the law of the case “include (1) substantial
new evidence introduced after the first review, (2) a decision
of the Supreme Court after the first review that is incon‐
sistent with the decision on that review, and (3) a conviction
on the part of the second reviewing court that the decision of
the first was clearly erroneous.” Chi. & N.W. Transp. Co. v.
United States, 574 F.2d 926, 930 (7th Cir. 1978). The second
item in that list is an example of a generally accepted occa‐
sion for disturbing settled decisions in a case: when there has
been an intervening change in the law underlying the deci‐
sion. See United States v. Thomas, 11 F.3d 732, 736 (7th Cir.
1993) (Law of the case doctrine permits “a court to revisit an
issue if an intervening change in the law, or some other spe‐
cial circumstance, warrants reexamining the claim.”).3
3 Moreover, even if we were to disagree with the district court’s view
that the underlying law has changed, we would nevertheless permit it to
reexamine an already settled legal issue if it “reasonably concluded that
there has been a relevant change in the law.” E.E.O.C. v. Sears, Roebuck &
Co., 417 F.3d 789, 796 (7th Cir. 2005). If the district court had made a rea‐
sonable error, we would be free to review that issue on appeal without
being constrained by the law of the case. Id.
8 No. 12‐2958
Although the intervening decision here came not from
the Supreme Court, but from this very court sitting en banc,
we have little trouble concluding that it worked a change in
the law. Empress Casino did not explicitly overrule the panel’s
decision in this case, but it did clearly alter the law underly‐
ing the decision. “When sitting en banc, the full court has the
power to change general rules stated in previous cases.” Mo‐
jica v. Gannett Co., 7 F.3d 552, 557 (7th Cir. 1993). This court in
Empress Casino changed the general understanding of what a
tax is for purposes of the TIA. Its holding is flatly “incon‐
sistent” with the prior decision of the Kathrein panel, Chi. &
N.W. Transp. Co., 574 F.2d at 930, and the opinion for the
court said as much. See Empress Casino, 651 F.3d at 730 (“We
do not agree with that decision.”). The en banc majority also
criticized “a number of decisions under the [TIA]” that
“have flirted with open ended, multifactor tests—open‐
ended because the relative weights of the factors are left to
judicial discretion.” Id. at 727. The Kathrein panel decision
employed just such a multifactor test in evaluating the Dem‐
olition Tax. Based on our reading of Empress Casino, we con‐
clude that the district court correctly departed from the law
of the case in this instance. Reasonable minds can disagree
about the proper boundary between a tax and other exac‐
tions in applying the TIA, but the bright‐line test announced
in Empress Casino is binding on all courts in this circuit going
forward.
The Kathreins respond by noting, as did the dissent in
Empress Casino, that the en banc decision confronted a private
racketeering suit rather than the Section 1983 “public law”
suit presented in this case. They contend that Empress Casino
could not overrule the prior panel decision in this case be‐
cause the two decisions did not involve the same legal issue.
No. 12‐2958 9
However, in both cases the decision rested on whether the
disputed exaction was a tax, and, as a result, whether the
TIA applied. Thus, the announcement of a new legal rule in
Empress Casino necessarily disturbed the law set out in the
earlier, inconsistent panel decision.
B. The Demolition Tax
The next question is whether, under the new Empress Ca‐
sino standard, the Demolition Tax is a tax. It clearly is. First,
in disagreeing with the panel’s original decision in Kathrein,
the en banc majority indicated that the Demolition Tax, as de‐
scribed by the panel decision, was a tax. “The tax would de‐
ter demolitions and the modest fund generated by it …
would be used to subsidize those poor people” who were in
danger of losing their homes. Id. at 730. The Empress Casino
majority concluded that “[t]axes that seek both to deter and
to collect revenue when deterrence fails … are common‐
place,” and that the Evanston ordinance was an example of a
“sin tax.” Id.
Even had the en banc court not already explicitly catego‐
rized the Demolition Tax, we would still hold that the new
rule squarely describes the exaction here as a tax. The Em‐
press Casino decision divided exactions into three categories:
fines, fees, and taxes. It noted that a fine is “designed … to
punish,” and that fees “compensate for a service that the
state provides to the person or firms on whom … the exac‐
tion falls.” Id. at 728. The Demolition Tax is not designed to
punish property owners for demolishing buildings, nor was
it enacted with “the hope … that the punishment [would]
deter” its citizens from tearing down houses and essentially
cease all demolition of residential buildings. Id. The practice
of demolishing residences is not “completely forbidden.” Id.
10 No. 12‐2958
at 729. The City of Evanston obviously expects and hopes
that houses requiring demolition will continue to be torn
down in the future, albeit perhaps at a slower rate. Nor is the
ordinance a fee. It does not compensate for a state‐provided
service offered to homeowners who demolish a residential
unit. Paying the tax gives the owner permission to demolish
a structure, but a grant of permission is not a service. In fact,
the exaction applies to those who perform the demolitions
themselves, without utilizing any of the City’s resources. The
ordinance therefore imposes a tax.
The Kathreins respond that the ordinance does not im‐
pose a tax because the property owner can be exempt from
paying—for instance, one who has owned and occupied a
residence for three years, and who, following the demolition
of that residence, lives in the new dwelling for three years
following the demolition. See Evanston, Ill., Code § 4‐18‐
4(A), D(1). However, tax laws commonly carve out exemp‐
tions. See, e.g., 26 U.S.C. §§ 151, 501(c)(3). The existence of
exemptions has no bearing on the bright‐line rule an‐
nounced in Empress Casino. The Kathreins also note that rev‐
enue for the tax is directed toward a separate fund rather
than the general treasury. But that, too, is a distinction with‐
out a difference. The court in Empress Casino observed that a
tax “earmarked for a particular purpose is hardly unusual”
and dealt with just such a tax in that case. Empress Casino,
651 F.3d at 731.
The purposes of the exaction in this case, as the en banc
court observed, are 1) to slow the rate of demolitions
through a financial disincentive, and 2) to use the revenue
from the demolitions to support poor homeowners. This du‐
No. 12‐2958 11
al motive clearly places the exaction in the category of a tax
under Empress Casino’s bright‐line test.
C. Application of the TIA
Because the Demolition Tax is properly considered a tax,
the TIA bars the Kathreins’ challenge to the exaction.4 The
TIA is the state‐tax analogue to the Tax Anti‐Injunction Act,
26 U.S.C. § 7421(a), which bars suits designed to enjoin the
collection of federal taxes. It furthers a healthy respect for
federalism by preventing federal courts from interfering
with the vital state function of collecting taxes. Admittedly,
the text of the Act refers only to efforts “to enjoin, suspend,
or restrain the assessment, levy or collection of any tax un‐
der State law,” whereas the Kathreins seek damages. 28
U.S.C. § 1341. But the Supreme Court, invoking the principal
of comity, has interpreted the prohibition announced in the
statute to bar all Section 1983 suits directly contesting the va‐
lidity of state tax schemes. Fair Assessment in Real Estate
Assʹn, Inc. v. McNary, 454 U.S. 100, 116 (1981) (“[T]axpayers
are barred by the principle of comity from asserting § 1983
actions against the validity of state tax systems in federal
courts.”). The Court reasoned that “damages actions, no less
than actions for an injunction, would hale state officers into
federal court every time a taxpayer alleged the requisite el‐
ements of a § 1983 claim.” Id. at 115. The Court’s ruling in
McNary dooms the Kathreins’ challenge, and the district
court correctly dismissed those remaining claims. See Em‐
4 The Kathreins effectively concede that Illinois courts provide a “plain,
speedy, and effective remedy” for their state and constitutional claims
against the Demolition Tax, so that statutory requirement is easily met.
See App. Br. at 10 (“Plaintiffs admit they can object to the constitutionali‐
ty of defendants’ municipal ordinance in state court.”).
12 No. 12‐2958
press Casino, 651 F.3d at 725 (“[T]he duty of federal courts to
cede litigation seeking to enjoin state tax statutes to the state
courts (a ‘duty of comity’—that is, of respect for another
sovereign) extends beyond the limits of the Tax Injunction
Act.”).
D. The Constitutional Claim (“Count One”)
The final question is what to do about the Kathreins’ con‐
tention that the TIA is unconstitutional. The district court
originally dismissed this count of the Kathreins’ complaint,
and the panel affirmed that aspect of the decision on the
ground that the Kathreins lacked standing to challenge the
TIA because the Demolition Tax was not a tax. As we have
explained, the principle upon which the affirmance rested is
no longer good law. The Kathreins therefore request that
they be allowed to press forward in the district court with
their constitutional claim.
Unfortunately, the Kathreins never moved for reconsid‐
eration of Count One before the district court. Unlike their
other claims, which were still live following remand and
thus susceptible to the defendants’ renewed motion to dis‐
miss, Count One was dismissed in a final judgment of the
district court. This court affirmed the dismissal order on dif‐
ferent grounds, and its mandate issued. See Freeman v. Chan‐
dler, 645 F.3d 863, 870 (7th Cir. 2011) (The court of appeals
“may affirm on any grounds present in the record.”). The
claim was therefore no longer part of the case, and the dis‐
trict court could not revisit it sua sponte. See United States v.
Polland, 56 F.3d 776, 777 (7th Cir. 1995) (“The mandate rule
requires a lower court to adhere to the commands of a high‐
er court on remand.”). As a result, Count One is not before
No. 12‐2958 13
this court, and there is no decision of the district court to re‐
view regarding that claim.
If the Kathreins had wished for the district court to re‐
consider the dismissal following the mandate, they should
have moved for relief from the final judgment pursuant to
Federal Rule of Civil Procedure 60(b).5 See LSLJ P’ship v. Fri‐
to‐Lay, Inc., 920 F.2d 476, 478 (7th Cir 1990) (“[A] district
court has jurisdiction to address a change in law [pursuant
to Rule 60(b)] without flouting the mandate of the appellate
court.”) (quotation marks omitted). The Kathreins did not do
so. At oral argument in this appeal, the Kathreins conceded
that they had considered Count One to be closed following
the remand. It does not matter that the defendants, in their
motion, also remained silent as to what effect Empress Casino
might have on the Kathreins’ constitutional challenge. That
claim had been dismissed from the case by a final judgment,
and absent a Rule 60(b) motion the defendants had no rea‐
son to think it would revive. It is important both for litigants
and the judicial system that claims already decided remain
that way, barring an appropriate motion for reconsideration
or to set aside the judgment. See Cincinnati Ins. Co. v. Flanders
Elec. Motor Serv., Inc., 131 F.3d 625, 628 (7th Cir. 1997) (“[T]he
need for the finality of judgments is an overarching con‐
cern.”).
Instead of filing an appropriate motion to reconsider, the
Kathreins, in their responses to the post‐Empress Casino mo‐
tion to dismiss before the district court, argued exclusively
5 The Kathreins also did not file a motion to amend the judgment under
Rule 59(e) within the required 28‐day window, so any such motion now
would be untimely.
14 No. 12‐2958
that this court’s earlier panel ruling was binding law of the
case. In other words, they maintained that, for purposes of
this litigation, the Demolition Tax should not be considered a
tax and the TIA should not apply. The Kathreins also re‐
sponded with a separate motion to refile Count Two of their
amended complaint—a takings claim that had been dis‐
missed by stipulation and without prejudice. Crucially, they
did not file any such motion regarding Count One. This was
a purposeful strategic choice; as a result, the Kathreins have
waived any argument made on appeal that the Evanston or‐
dinance does impose a tax, and that they have standing to
challenge the TIA.6 “[A] party who fails to adequately pre‐
sent an issue to the district court has waived the issue for
purposes of appeal.” Fednav Intʹl Ltd. v. Contʹl Ins. Co., 624
F.3d 834, 841 (7th Cir. 2010). “It is not the district courtʹs job
to flesh out every single argument not clearly made.” Wil‐
liams v. Dieball, 724 F.3d 957, 963 (7th Cir. 2013). By the same
token, it is also not the district court’s responsibility to craft
arguments in the alternative for the parties. The Kathreins
decided to place all their eggs in the law of the case basket,
and they had no ground to complain when that strategy
backfired. Even if we were inclined to interpret the
Kathreins’ responses to the defendants’ motion to dismiss as
6 Although the Kathreins filed this suit pro se and litigated the instant
appeal themselves, Victoria Kathrein was represented by counsel follow‐
ing the remand to the district court, and counsel filed both the motion to
refile Count II and a response to the motion to dismiss following Empress
Casino. Victoria Kathrein therefore cannot be excused from her failure to
argue the constitutional claim because of her pro se status. And as to Mi‐
chael Kathrein, pro se litigants “are in general subject to the same waiver
rules that apply to parties who are represented by counsel.” Provident
Sav. Bank v. Popovich, 71 F.3d 696, 700 (7th Cir. 1995).
No. 12‐2958 15
a Rule 60(b) motion—and we are not—any argument regard‐
ing the constitutionality of the TIA has been waived.7
The Kathreins argue that they should have the oppor‐
tunity to relitigate the dispute over the constitutionality of
the TIA, despite their failure to move for relief from final
judgment, because the ruling that the Evanston ordinance
levies a tax, by logical necessity, grants them standing to
challenge the TIA. According to this contention, the district
court’s second ruling automatically, or “by default,” resur‐
rected the constitutional claim. This argument is unavailing,
for at least three reasons.
First, Rule 60(b) requires a party to file a motion to dis‐
turb a final judgment, and it restricts the time in which a
party may do so. A motion for relief from a judgment on any
ground included in Rule 60(b)(1)–(3) must be made “no
more than a year after the entry of judgment.” Fed. R. Civ. P.
60(c)(1). The district court’s original decision in this case
came in 2009, so any such Rule 60(b) motion would now be
untimely, even if the Kathreins had some colorable claim
under those provisions. Likewise, any other Rule 60(b) mo‐
tion must be made “within a reasonable time.” Id. The
Kathreins have not moved to set aside the district court’s
judgment even now, long after the defendants put them on
notice that Empress Casino worked an intervening change in
the law. This delay is unreasonable. Therefore, the Kathreins
7 Procedural infirmities aside, the Kathreins’ attack on the TIA’s consti‐
tutionality was not promising. See Gass v. Cnty. of Allegheny, Pa., 371 F.3d
134, 141 (3d Cir. 2004) (rejecting a constitutional challenge to the TIA as
“baseless”). But we do not reach the merits of the claim here.
16 No. 12‐2958
have missed their chance to seek relief from the district
court’s final judgment.
Second, the Kathreins have failed to show the district
court that they have standing to pursue their constitutional
claim. The district court’s initial decision did, like the en banc
court, correctly view the Demolition Tax as a tax. It neverthe‐
less dismissed the Kathreins’ constitutional challenge for
lack of standing. The court reasoned that “[t]hough the TIA
bars federal courts from adjudicating state tax challenges, it
leaves plaintiffs’ state‐court remedies intact.” 2009 WL
3055364, at *5. In its judgment, the Kathreins could not show
that the TIA injured them—they were still capable of secur‐
ing relief in the state courts. We do not express any opinion
here as to whether this standing decision was correct, but
suffice it to say that “[t]he plaintiff, as the party invoking
federal jurisdiction, bears the burden of establishing the re‐
quired elements of standing.” Lee v. City of Chi., 330 F.3d 456,
468 (7th Cir. 2003); see Lujan v. Defenders of Wildlife, 504 U.S.
555, 561 (1992) (“The party invoking federal jurisdiction
bears the burden of establishing” standing.). Empress Casino
clearly endorsed the district court’s view that the Evanston
exaction was a tax, but it said nothing to indicate that the
district court’s initial decision dismissing their constitutional
claim was wrong. Without a Rule 60(b) motion, the district
court had no reason to revisit its judgment that the Kathreins
lacked standing to make their constitutional challenge, even
if the TIA barred their claims against the exaction in federal
court.
The third and final reason a motion was necessary is that
Rule 60(b) requires more than a showing that the district
court’s earlier decision has been undermined by intervening
No. 12‐2958 17
law. “Rule 60(b) relief is an extraordinary remedy and is
granted only in exceptional circumstances.” Cincinnati Ins.
Co., 131 F.3d at 628. The Kathreins failed to show exceptional
circumstances, and the reasons to reconsider the district
court’s ruling were not self‐evident, even after Empress Casi‐
no. See McKnight v. U.S. Steel Corp., 726 F.2d 333, 336 (7th Cir.
1984) (“[A] change in the applicable law after entry of judg‐
ment does not, by itself, justify relief under [Rule] 60(b).”);
see also Agostini v. Felton, 521 U.S. 203, 239 (1997) (“Interven‐
ing developments in the law by themselves rarely constitute
the extraordinary circumstances required for relief under
Rule 60(b)(6).”). By foregoing the Rule 60(b) motion to argue
exclusively for maintaining the law of the case, the Kathreins
failed to preserve any opportunity to demonstrate excep‐
tional circumstances. The portion of the district court’s deci‐
sion that the original panel affirmed still binds the parties.
III
This case presents the rare instance in which an en banc
decision creates an intervening change in the law that per‐
mits the district court to deviate from the law of the case.
The defendants realized that the law had changed and
properly moved for relief pursuant to the new legal rule. The
Kathreins did not, so they must live with the consequences.
The decision of the district court is AFFIRMED.