In the
United States Court of Appeals
For the Seventh Circuit
No. 11-2066
C HICAGO T RIBUNE C OMPANY,
Plaintiff-Appellee,
v.
B OARD OF T RUSTEES OF THE U NIVERSITY OF ILLINOIS,
Defendant-Appellant.
Appeal from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 10 C 568—Joan B. Gottschall, Judge.
A RGUED S EPTEMBER 30, 2011—D ECIDED M AY 24, 2012
Before E ASTERBROOK, Chief Judge, and P OSNER and
W ILLIAMS, Circuit Judges.
E ASTERBROOK, Chief Judge. Beginning in 2009, the
Chicago Tribune published a series of articles col-
lectively known as “Clout Goes to College.” The Tribune
revealed that the University of Illinois had a special
process for reviewing the applications of persons with
well-placed supporters. Many applicants considered
through this process were admitted even though they
2 No. 11-2066
would not have been under the University’s normal
criteria. The President of the University system, the
Chancellor of one campus, and seven of the nine
members of the University’s Board of Trustees
eventually resigned. Wikipedia collects some of this
information in an entry entitled “University of Illinois
clout scandal”.
The Tribune sought additional information through
the Illinois Freedom of Information Act, 5 ILCS 140/1 to
140/11.5. The University is covered by this statute and
therefore must make requested documents available,
unless an exemption applies. 5 ILCS 140/1.2, 140/3. The
Tribune requested, for every applicant in “Category I”
(one of the categories of clout-heavy applicants), the
names and addresses of the applicants’ parents and
the identity of everyone “involved in such applicants’
applications.” In response, the University invoked
Exemption 1(a), which provides that agencies will with-
hold “[i]nformation specifically prohibited from dis-
closure by federal or State law or rules and regulations
implementing federal or State law.” 5 ILCS 140/7(1)(a). It
pointed to 20 U.S.C. §1232g(b)(1), part of the Family
Education Rights and Privacy Act of 1974 (FERPA or “the
1974 Act”), as the federal statute that in the University’s
view specifically prohibits the disclosure. It provides:
No funds shall be made available under any ap-
plicable program to any educational agency
or institution which has a policy or practice
of permitting the release of education records
(or personally identifiable information contained
No. 11-2066 3
therein other than directory information, as de-
fined in paragraph (5) of subsection (a) of this
section) of students without the written consent
of their parents to any individual, agency, or
organization . . . .
Section 1232g(b)(1) has some exceptions, but none
covers what the Tribune wants. The University asserted
that even though the Tribune sought the identities
of applicants’ parents rather than students, identifying
parents necessarily would disclose “education records”
or “personally identifiable information” about many
students—which after all is the Tribune’s goal. The news-
paper’s articles were about persons admitted despite
not meeting the University’s normal criteria rather
than people whose applications were turned down.
The University added: “[W]e would anticipate that
additional exemptions of the Illinois FOIA likely would
apply if all of the responsive records were gathered
and reviewed. For example, we would expect that re-
sponsive documents would contain information
exempt from disclosure pursuant to several provisions
of the Act, including the following: section 7(1)(b)(i)
(’files and personal information maintained with re-
spect to . . . students . . . receiving . . . educational . . .
services . . . from . . . public bodies’); section 7(1)(b)
(unwarranted invasion of personal privacy); and
section 7(1)(f) (drafts/predecisional deliberative com-
munications).” The Tribune asked for review within
the University’s administrative hierarchy. A letter from
the University’s President rejected the Tribune’s appeal.
4 No. 11-2066
The Tribune’s claim of access to these documents
arises under Illinois law, so one would have expected
the next step to be a suit in state court. The parties are
not of diverse citizenship, and anyway it is not possible
to sue an arm of state government in federal court to
vindicate a claim under state law. See Pennhurst State
School & Hospital v. Halderman, 465 U.S. 89 (1984). Yet
instead of seeking the documents through state litiga-
tion, the Tribune asked a federal district court for a declar-
atory judgment that the University misunderstands
FERPA. The district court granted the Tribune’s motion
for summary judgment, 781 F. Supp. 2d 672 (N.D. Ill.
2011), after concluding that the phrase “prohibited from
disclosure by federal or State law” in 5 ILCS 140/7(1)(a)
means only statutes that directly forbid disclosure.
The 1974 Act, by contrast, tells the Secretary of
Education when it is lawful to grant federal money to
a unit of state government. The district judge under-
stood §1232g(b)(1) to take state law or policy as a given
and provide or withhold federal funds accordingly.
The University, by contrast, proposes to take the
federal grant as a given and treat the conditions as if they
were statutory, rather than as terms of state-federal
cooperation. As the district court saw things, Illinois
may commit a breach of contract if it releases the infor-
mation the Tribune requested, but no federal law “pro-
hibits” disclosure within the meaning of 5 ILCS 140/7(1)(a).
The briefs of both sides in this court contend that
28 U.S.C. §1331, the federal-question jurisdiction, sup-
plies subject-matter jurisdiction for this suit. The district
judge must have assumed likewise. But the United
No. 11-2066 5
States, whose brief as amicus curiae supports the
University’s understanding of the 1974 Act, also ob-
serves that there is serious doubt about subject-matter
jurisdiction, because the Tribune’s claim to the docu-
ments arises under state rather than federal law. The
University may have a federal defense to the Tribune’s
claim, but it is blackletter law that a federal defense differs
from a claim arising under federal law. See, e.g., Merrell
Dow Pharmaceuticals Inc. v. Thompson, 478 U.S. 804 (1986).
And although the University, as the natural defendant
in state court, might have been able to seek a federal
declaratory judgment under the mirror-image doc-
trine applicable to declaratory litigation, see NewPage
Wisconsin System Inc. v. United Steel Workers, 651 F.3d
775 (7th Cir. 2011) (collecting authority), the Tribune
rather than the University commenced this suit. The
Tribune is the natural plaintiff and cannot use 28 U.S.C.
§2201, the declaratory-judgment statute, to have a
federal court blot out a potential federal defense to its
own potential state-law suit. See, e.g., Franchise Tax
Board v. Construction Laborers Vacation Trust, 463 U.S. 1, 16
(1983); Skelly Oil Co. v. Phillips Petroleum Co., 339 U.S.
667 (1950).
We asked the parties to file supplemental briefs ad-
dressing subject-matter jurisdiction. Both sides contend
that jurisdiction is proper under the approach of Grable
& Sons Metal Products, Inc. v. Darue Engineering & Manu-
facturing, 545 U.S. 308 (2005). Yet Empire Healthchoice
Assurance, Inc. v. McVeigh, 547 U.S. 677 (2006), shows
that Grable does not alter the rule that a potential federal
defense is not enough to create federal jurisdiction under
6 No. 11-2066
§1331. See also Bennett v. Southwest Airlines Co., 484 F.3d
907, rehearing denied, 493 F.3d 762 (7th Cir. 2007). Some
of the language in Grable could be read to say that all
important federal issues should be resolved in a federal
forum, but Empire Healthchoice concluded that Grable
should not be so understood.
Indeed, Grable has nothing to do with using federal
defenses to move litigation to federal court. In Grable
the federal issue was part of the plaintiff’s own claim.
The Internal Revenue Service had seized real property
to satisfy a tax lien and sold the property to Darue.
Grable, the taxpayer, filed a quiet-title action in state
court, asserting that Darue’s title was invalid because
the IRS had given notice of the seizure in the wrong
way (by certified mail rather than a process server). The
Supreme Court had to decide whether a claim “arises
under” federal law for the purpose of §1331 when
one element of a claim depends on state law and
another on federal law. It concluded that the claim
is federal when “a state-law claim necessarily raise[s]
a stated federal issue, actually disputed and substantial,
which a federal forum may entertain without disturbing
any congressionally approved balance of federal
and state judicial responsibilities.” 545 U.S. at 314. This
formulation can lead to problems in application, see
Samuel C. Johnson 1988 Trust v. Bayfield County, 649 F.3d
799 (7th Cir. 2011), though often matters will be straight-
forward. In Empire Healthchoice, for example, the Court
observed that Grable depended on the fact that the
dispute “centered on the action of a federal agency
(IRS) and its compatibility with a federal statute, the
No. 11-2066 7
question qualified as ‘substantial,’ and its resolution
was both dispositive of the case and would be con-
trolling in numerous other cases.” 547 U.S. at 700. Take
away those ingredients—none was satisfied in Empire
Healthchoice—and there is no federal jurisdiction.
Here, unlike Grable, the claim for the documents arises
under state law, and only state law; the Tribune’s
request for the information does not depend on even a
smidgeon of federal law. No federal agency’s decision
has been contested. The University has a potential
defense under §7(1)(a), but even that may depend on
state rather than federal law. (We expand on this ob-
servation below.) The §7(1)(a) exemption is not neces-
sarily dispositive. Recall that the University’s letter re-
jecting the Tribune’s request mentioned §7(1)(b)(i),
which entitles student records to protection. It is not
clear to us that the 1974 Act and the implementing reg-
ulations forbid disclosure of any document that is
outside the scope of the §7(1)(b)(i) exemption. A state
court therefore might rule in the University’s favor
wholly as a matter of state law—which suggests that
the federal issue not only is not “necessarily” presented,
but may never be presented at all, rendering a federal
court’s decision nothing but an advisory opinion. The
University has other potential state-law defenses as well.
Let us return to the question whether the University’s
reliance on §7(1)(a) creates a question of federal law.
The Tribune assumes that availability of Exemption 1(a)
depends entirely on §1232g(b)(1). The meaning of §1232g
is a question of federal law, to be sure. But before a
8 No. 11-2066
court reaches any federal issue, it must resolve the mean-
ing of §7(1)(a) itself, and that’s a question of Illinois
law. It provides, recall, that “[i]nformation specifically
prohibited from disclosure by federal or State law” is
exempt from the Illinois Freedom of Information Act.
What does it mean to say that information is “specifically
prohibited from disclosure by federal . . . law”? The
1974 Act does not by itself forbid any state to disclose
anything. It says that the Secretary of Education must
not make grants to state bodies whose policy allows
the disclosure of student records. Any state can turn
down the money and disclose whatever it wants. The
most one can say about federal law is that, if a state
takes the money, then it must honor the condi-
tions of the grant, including nondisclosure. See Owasso
Independent School District v. Falvo, 534 U.S. 426, 428
(2002); United States v. Miami University, 294 F.3d 797
(6th Cir. 2002). Honoring a grant’s conditions is a
matter of contract rather than a command of federal law.
It is of course possible that information is “specifically
prohibited from disclosure by federal . . . law” when
the state has entered into a contractual commitment
with the federal government under which disclosure
is forbidden as long as the contract lasts. But it is also
possible that for the purpose of §7(1)(a) information
is “specifically prohibited from disclosure by federal . . .
law” only when federal law is unconditional—when
there is nothing the state can do (such as turning
down proffered funds) to honor the pro-disclosure
norm in the Illinois FOIA.
This is not just a semantic quibble. Illinois cannot
avoid the effects of its commitment to the federal gov-
No. 11-2066 9
ernment by giving a narrow reading to “specifically
prohibited from disclosure by federal . . . law”. Even
if Illinois law purports to command the disclosure of
particular information, the Supremacy Clause means
that federal law prevails. The University thus can assert
a defense directly under federal law independent of
§7(1)(a). But that “pure” argument about the meaning
of the 1974 Act belongs in federal court only in a suit by
the United States. Gonzaga University v. Doe, 536 U.S.
273 (2002), holds that §1232g, on which the University
relies, does not support a private right of action in
federal court. See also Astra USA, Inc. v. Santa Clara
County, 131 S. Ct. 1342 (2011) (third-party beneficiaries
of federal funding contracts cannot sue in federal court
to enforce the conditions). Section 1232g can be enforced
defensively (as a matter of contract) in state court, or in
a federal suit by the United States. That’s how Miami
University came to federal court; the United States filed
its own suit to enforce the conditions the state
university had accepted with the federal grants.
What happened in this case is hard to reconcile
with Gonzaga University. The Tribune, a stranger
to the contract between the University of Illinois and
the Department of Education, filed a suit in which
(on the Tribune’s view) the only issue is the
effect of §1232g(b)(1). Doe, the private party in Gonzaga
University, was at least a student and thus a beneficiary
of the 1974 Act’s privacy protections. If a student cannot
file suit in federal court to enforce §1232g(b)(1), why
would a non-beneficiary of the statute (and non-party to
the contract) be entitled to a judicial ruling on its scope?
10 No. 11-2066
To put this differently, it was important in Grable that
the question at hand—how must the Commissioner of
Internal Revenue notify a taxpayer whose property is
about to be confiscated to satisfy a tax debt?—is one
that federal courts are supposed to resolve, for the
benefit of both federal taxpayers and the national gov-
ernment. By contrast, under Gonzaga University, the
question the Tribune wants to raise—what privacy
protections follow from states’ decisions to accept
funds under the 1974 Act?—is one the federal courts
are supposed not to resolve, unless the United
States sues in its own name to enforce the conditions of
the grant.
Grable held that federal jurisdiction does not depend
on the existence of a private right of action for damages,
so we do not hold that Gonzaga University has a juris-
dictional effect. What we do conclude is that Grable
does not overrule the holdings of Skelly Oil and many
later decisions that the natural plaintiff in a claim
arising under state law cannot use a declaratory-judg-
ment action to litigate an anticipated federal defense
in federal court. The Tribune accordingly must proceed
in a court of Illinois.
There is a substantial public interest in the informa-
tion the Tribune seeks. There is also a substantial
public interest, under both §1232g(b)(1) and 5 ILCS
140/7(b)(1), in protecting the legitimate privacy of
students and their families. Because the Tribune’s claim
to the information arises under Illinois law, the state
court is the right forum to determine the validity of
whatever defenses the University presents to the
No. 11-2066 11
Tribune’s request. We do not express any opinion on
whether the information the Tribune seeks relates to
student records within the meaning of the 1974 Act
and the implementing regulations. The district court’s
judgment is vacated, and the case is remanded with in-
structions to dismiss for want of subject-matter jurisdic-
tion.
5-24-12