In the
 United States Court of Appeals
              For the Seventh Circuit
                        ____________

No. 06-1505
STEVEN J. ALEXANDER, KEITH
BALASH, CHARLES BERARD, et al.,
                                             Plaintiffs-Appellees,
                               v.

CITY OF MILWAUKEE, ARTHUR L. JONES,
Police Chief, WOODY WELCH, Chairman
of Milwaukee Board of Fire and Police, et al.,
                                         Defendants-Appellants.
                        ____________
           Appeal from the United States District Court
              for the Eastern District of Wisconsin.
            No. 03 C 611—Thomas J. Curran, Judge.
                        ____________
   ARGUED SEPTEMBER 28, 2006—DECIDED JANUARY 18, 2007
                        ____________


  Before POSNER, FLAUM and RIPPLE, Circuit Judges.
  RIPPLE, Circuit Judge. Seventeen current and former
members of the police force of the City of Milwaukee
(“City”) brought this action against the City, former
Chief of Police Arthur Jones, the Milwaukee Board of
Police and Fire Commissioners, and five of the Commis-
sioners in their personal and official capacities. The offi-
cers, all white males, alleged that the City, the Chief and
2                                                No. 06-1505

the Board had violated their statutory and constitutional
rights by engaging in discriminatory promotion practices
favoring women and minorities. The officers brought
their claims under Title VII, 42 U.S.C. § 2000e et seq., as
well as 42 U.S.C. §§ 1981 and 1983. Following a several-
week bifurcated trial, a jury found the defendants liable on
all counts; compensatory damages were awarded against
all defendants and punitive damages were awarded
against each of the individual defendants. Following a
bench trial on economic damages, the district court also
ordered back and front pay and costs. The defendants
timely filed this appeal, challenging both liability and
damages. For the reasons stated in the following opinion,
we affirm in part and reverse in part the judgment of
the district court.


                              I
                     BACKGROUND
A. Facts
   The plaintiffs in this action are seventeen police officers
who, during times relevant to this action, held the rank
of lieutenant on the City’s police force. From November
18, 1996 until November 18, 2003, defendant Arthur Jones
was the Chief of the Milwaukee Police Department. As
required by Wisconsin law, the City maintains a five-
member Board of Fire and Police Commissioners
(“Board”), a citizen oversight body charged with various
duties, including the responsibility to make certain gen-
eral policies and standards for the departments, the
authority over appointments on the police force and in the
fire department, and the duty to conduct disciplinary
hearings following referrals by department chiefs. See Wis.
No. 06-1505                                                3

Stat. § 62.50. By statute, commissioners serve staggered
five-year terms. 

62.50(1). Defendants, Commission-
ers Woody Welch, Carla Cross, Eric M. Johnson, Leonard
J. Sobczak and Ernesto A. Baca, all served for some portion
of Chief Jones’ tenure.
   The events at issue in this action revolve around a series
of forty-one promotions from the rank of lieutenant to
captain that occurred between 1997 and 2003. In accor-
dance with Wisconsin law, when a vacancy in the rank of
captain became available, Chief Jones nominated a can-
didate to fill it. The governing statute required that he
select candidates “already in the service [who have] proven
their fitness for the promotion.” Wis. Stat. §§ 62.50(7)(b),
62.50(9). The process for selecting nominees for promo-
tion in the relevant period was ill-defined: The City had
no written procedures, and Chief Jones testified that he
could not recall his thought processes with respect to the
nominations, that he did not post a position announce-
ment when a vacancy became open in the captain ranks
and that he did not keep any records regarding nomina-
tions, R.273 at 391-93. Instead, Chief Jones stated that he
personally evaluated potential candidates to determine
the candidate he thought would be “the most qualified to
fill [the] position.” R.273 at 409. In making this determina-
tion, Chief Jones said that he considered an individual’s
skills, abilities and knowledge and in some measure
also considered seniority. R.272 at 205, 228; R.273 at 394.
His conclusions were based on his “personal observa-
tions of the individual over some—in most instances a long
period of time,” R.272 at 228, and verbal recommendations
“from various individuals,” R.272 at 232. He denied that
race or gender was a factor in his decision, R.273 at 460,
4                                                    No. 06-1505

although the jury apparently disbelieved this statement.1
  Having selected his nominee through this fairly amor-
phous and private process, the Chief would then forward
the candidate’s name to the Board and would request that
the Board approve the appointment to the rank of captain
in accordance with Wisconsin law. Wis. Stat. § 62.50(2).
Along with the nomination, the Chief would forward the
candidate’s “hard card,” which contained information
from his or her service history and a resume, often pre-
pared for this purpose. The Commissioners testified that
they reviewed the documentation sent by Chief Jones and
interviewed the candidates before conducting a vote on
their approval of the appointment. They each specifically
testified that they did not consider race or gender when
approving promotions. They did, however, evaluate
Chief Jones on his ability to foster diversity; over the course
of an apparently deteriorating relationship in which his
marks in a variety of other categories plummeted, he was
determined consistently to be “exceed[ing] expectations”




1
   Some evidence was before the jury indicating that Chief Jones
had a rocky relationship with the Commission and other City
authorities on the subject of race relations and city employment.
He testified that, before his appointment to Chief, he had been
President of the League of Martin, an association of African-
American police and state patrolmen, that, along with the
United States, sued the City to challenge discriminatory prac-
tices with respect to assignments and promotions. That lawsuit
ended with the entry of consent decrees in 1984. See League
of Martin v. City of Milwaukee, 

(E.D. Wis. 1984);
United States v. City of Milwaukee, 

(W.D. Wis.
1984).
No. 06-1505                                                   5

in valuing and achieving diversity on the force.2 R.298,
Exs.59-64.
  During the relevant period, there were forty-one pro-
motional opportunities to the rank of captain. Chief Jones
submitted forty-one nominees, all of whom were approved,
and in all but one case, upon review of the record and
interview of the candidate, the approval was unanimous.3
  The Board kept records concerning the racial and gender
diversity of the police force in part because of court orders
issued in response to discrimination suits dating back to
the 1970s. R.298, Ex.40 at 1. In fact, a consent decree


2
   Chief Jones was evaluated in four general areas: “Crime
Prevention and Suppression,” “Leadership/Professional
Interaction,” “Organization and Management” and “Equal
Employment Opportunity/Valuing Cultural Diversity.” R.298
at 59-64. In the diversity category, the subcategories were: (1)
assisting the Commission in recruiting and hiring a diverse
work force; (2) ensuring a diversity of race, ethnic and gender
groups exhibited in assignment; (3) ensuring race and gender
harmony in the workforce; (4) providing all employees with
training and educational opportunities to prepare for promo-
tional opportunities; and (5) complying with existing court
orders and appropriate regulations and laws regarding hiring,
assignment, discipline and termination. 

re-
ceived a single score for his performance in the overall “valu-
ing diversity” category, inclusive of all subcategories; that
score was consistently the highest score the Board could assign
to his performance.
3
   The approval was not unanimous in the case of a candidate
with less than one year in the lieutenant rank offered for
promotion to captain. The Board requested additional informa-
tion from Chief Jones, who declined to provide it. The candidate
was approved over the objections of Commissioners Welch
and Sobczak.
6                                                No. 06-1505

governing affirmative action in hiring, but not promotions,
was still in place during the beginning of Chief Jones’
tenure. See R.298, Exs.537, 538. In 1996, on the twentieth
anniversary of the first court order, a report was prepared
by Joan Dimow, a researcher on the staff of the Fire and
Police Commission (“FPC”)4 and Kenneth Munson, Execu-
tive Director of the FPC, as a consultation paper to the
United States Commission on Civil Rights. In that report,
the authors discussed the affirmative action programs in
the Milwaukee police force and stated that they believed
that increased diversity on the force advanced two com-
plementary goals: creating a representative force and better
preparing all officers for culturally-diverse interaction in
the community they serve. R.298, Ex.40 at 1. That same
report noted continuing goals for diversity in recruiting
and hiring, but stated that there were “no affirmative
action goals for promotion,” and that, because a variety
of factors controlled a candidate’s success in receiving
promotions, the expected improvements in diversity
among management were slower to take root. 

In
2001, Dimow updated the findings in the earlier report, and
in a portion examining diversity in command-
staff rankings, noted that white men were under-repre-
sented at the rank of captain and higher, at just over forty-
four percent, while their proportion in the entire depart-
ment was nearly fifty-three percent, R.298, Ex.5 at 4;
African-Americans were identified as over-represented.5


4
  “The Fire and Police Commission (FPC) is the civil service
testing and hiring agency for the Milwaukee Fire and Police
Departments.” R.298, Ex.40 at 1.
5
  Dimow’s report deals in the small absolute numbers actually
present in the Milwaukee Police Department, with a command
                                                (continued...)
No. 06-1505                                                    7

These reports apparently were made available to the
Commissioners, although they were not discussed at a
Board meeting. Only Commissioner Welch recalls any
conversation regarding the reports. He testified that he
and Dimow discussed the statistics from the later report
and that he asked that the report be forwarded to Chief
Jones. R.275 at 759.
   Of the forty-one persons promoted to the rank of cap-
tain during the relevant period, the record shows that
at least some women and minorities were promoted
more quickly than white males, with four promoted dur-
ing their one-year probationary periods in the rank of
lieutenant. R.298 Ex.58. Of the twenty women and minori-
ties promoted during Chief Jones’ tenure, seventeen had


5
  (...continued)
staff total of only thirty-six individuals. In fact, the report
notes that, in consideration of the low absolute numbers,
although women were slightly over-represented in the com-
mand staff and Asians, Hispanics and Native Americans were
under-represented, a difference of one individual would re-
verse the percentages. Accordingly, Dimow cautioned that
they should not be considered “misrepresented” despite the
percentage discrepancies. R.298, Ex.5 at 4.
   The plaintiffs cite different record statistics to this court,
focusing on the proportion of white males in the command
staff to white males in the lieutenant ranks, from which all but
one candidate for promotion was drawn during Chief Jones’
tenure, as opposed to Dimow’s statistics, which use the depart-
ment as a whole as the relevant comparison group. See R.272 at
205. The plaintiffs’ statistics are much more marked in their
evidence of under-representation of white males, showing a
lieutenant rank that was roughly eighty percent white male
funneling into a captain rank of only forty-four percent white
males.
8                                                No. 06-1505

spent less than five years in the lieutenant rank, while
the same was true for only four of the twenty-one white
males promoted during the same period. 

plaintiffs in this action were, during the
period of the forty-one promotions, qualified lieutenants
eligible for promotion to the rank of captain. R.273 at 347.
They were not promoted despite, in many cases, having
seniority to a female or minority lieutenant selected for
promotion.


B. District Court Proceedings
  The plaintiffs brought this action in the Eastern District
of Wisconsin against the City, the Chief, the Board and the
Commissioners, alleging violations of 42 U.S.C. §§ 1981 and
1983, and Title VII. The plaintiffs’ theory was that Chief
Jones had intentionally discriminated against white male
members of the lieutenant ranks in promotions to
captain and that the Commissioners knew about the dis-
crimination and nevertheless approved every candidate
for promotion. In special verdicts, the jury found that the
City and Chief Jones had discriminated intentionally in
favor of women and minority candidates in the selection of
officers for promotion to captain and that the Commission-
ers had “personally participate[d]” in the discrimination.
R.149 at 4-5.
  In their initial answer, the defendants had raised a
defense of qualified immunity.6 At trial, they introduced



6
  The appellate record does not indicate that the matter of
qualified immunity was raised between the answer and the post-
judgment motion that references qualified immunity. See R.5
                                               (continued...)
No. 06-1505                                                 9

some evidence that there was a compelling interest in
diversity in a police force, but they did not further request
a ruling on their entitlement to qualified immunity until
filing a motion for judgment as a matter of law and a
renewed motion for judgment as a matter of law. R.140,
R.224. Both these post-trial motions were denied by the
district court.
  Following a verdict in favor of the plaintiffs on liability,
the jury calculated compensatory damages (ranging from
$9,500 to $50,000, not including lost wages and benefits),
and assessed $289,000 in punitive damages against each
of the Commissioners ($17,000 from each Commissioner
and Chief Jones to each of the 17 plaintiffs, each plaintiff
receiving $17,000 x 6, or $102,000 in punitive damages).
R.161 at 5. The court appointed a special master to deter-
mine the appropriate amounts of economic damages,
particularly lost wages and benefits. R.200. The court
instructed the special master to consider back pay from the
date of the onset of discrimination, as found by the jury,
and to “increase each Plaintiff’s salary until the point at
which the base pay reaches the highest base pay for the
rank of captain.” R.205 at 2. The defendants objected to
this method of damages calculation and to the special
master’s report, R.211, and filed motions to vacate the
punitive damages award and amend the compensatory
damages awards, or for a new trial on damages, R.218,
R.220. Their motions were denied. R.263, R.264.
  The Commissioners and the City then brought this
appeal, challenging liability and damages.


6
  (...continued)
(answer), R.140, R.223 (post-judgment motions). There was no
motion for summary judgment.
10                                                No. 06-1505

                              II
                       DISCUSSION
   On appeal, the City, the Board and the Commissioners
challenge four separate conclusions reached by the dis-
trict court: (1) The Commissioners challenge the district
court’s ruling that they are not entitled to qualified immu-
nity, insofar as their actions were not in violation of a
clearly established constitutional right of the plaintiffs; (2)
the City next challenges whether municipal liability is
appropriate under the circumstances; (3) all defendants
challenge the manner of calculation of compensatory
damages; and (4) the Commissioners challenge the avail-
ability and amount of punitive damages. We shall ad-
dress each of their arguments below.


A. Qualified Immunity
  The Commissioners assert that they are entitled to a
defense of qualified immunity and, therefore, that the
individual verdicts against them cannot stand.
  The parties dispute the availability of this defense as a
procedural matter. The defendant Commissioners first
asserted a defense of qualified immunity in their answer
and again in post-trial motions for judgment as a matter
of law. Ordinarily, a district court is required to address the
issue of qualified immunity at an early stage in the pro-
ceedings in order to ensure that public officials entitled
to its protection are saved not only from ultimate liability
for civil damages, but also from the burdens of litigation.
See Harlow v. Fitzgerald, 

, 818 (1982); Mitchell v.
Forsyth, 

, 526 (1985). In this case, however,
given the failure of the defendants to raise the issue in pre-
No. 06-1505                                                   11

trial or early trial motions for summary judgment, the
district court stated in ruling on the defendants’ motion for
judgment as a matter of law post-trial:
       The Defendants raised the affirmative defense of
    qualified immunity in their Answer, but they did not
    move for summary judgment on this or any other issue.
    Qualified immunity protects a public official sued
    in his or her personal capacity from suit. Once the trial
    has concluded, the opportunity for that protection is
    lost. Therefore, there is little reason to address the
    qualified immunity issue. In the case cited by the
    movants in support of their position, the court granted
    qualified immunity after trial without discussing
    timeliness. See Terry v. Richardson, 

, 784,
    787-88 (7th Cir. 2003). The jury has found that the
    Defendants’ conduct violated the constitutional rights
    of the Plaintiffs and those rights were firmly estab-
    lished at the time they acted. At this posttrial stage
    of these proceedings, the court will not delve further
    into this issue. See McNair v. Coffey, 

, 475
    (7th Cir. 2002).
R.262 at 2-3. The defendants claim this procedural ruling,
which we construe as a ruling that qualified immunity
had been forfeited, was error.
  We note that we have not determined with precision how
a defendant must preserve a qualified immunity defense.7



7
  In Cygnar v. City of Chicago, 

(7th Cir. 1989), we
considered a potential waiver and “decline[d] to hold that [a
defendant’s] failure to present the issue in a summary judgment
motion waived his right to assert the defense in a later JNOV
motion or on appeal.” 

n.16. In doing so, however, we
                                                   (continued...)
12                                                 No. 06-1505

However, we need not decide this question here because
we conclude that, in any event, the Commissioners are
not entitled to an immunity defense.8
   In determining whether a defendant is entitled to quali-
fied immunity, we engage in a two step analysis. Riccardo
v. Rausch, 

, 526 (7th Cir. 2004). We first ask
whether a constitutionally protected right has been vio-


7
  (...continued)
relied on the particular factual circumstances presented. The
district court had granted a JNOV motion on the basis of
qualified immunity, reversing a multi-million dollar punitive
damages verdict. 

stated that we considered the
circumstances presented so “exceptional” as to warrant flex-
ible application of waiver rules. 

plaintiffs submit what appears to be a second waiver
argument, namely that because at trial the defendants testified
that they had not discriminated on the basis of race, they
should not be permitted to now argue that they were engaged
in a constitutionally permissible race-conscious promotion
strategy. See Appellees’ Br. 10-15. The plaintiffs argue that a
qualified immunity defense “lacks a factual basis in this rec-
ord,” and should not be considered. 

   The plaintiffs note that every Commissioner, in his or her
testimony, denied taking race or gender into account in promo-
tional decisions. While this is certainly true, the defendants
also asked for and received an instruction regarding a com-
pelling interest in diversity and the parameters that such a
narrowly-tailored program must meet. Although these defenses
may seem facially incompatible, see 

, 836-
37, the defendants’ qualified immunity argument seems to be
that if they did willfully discriminate, they did not do so in a
manner clearly illegal at the time they acted. The defendants are
entitled to pursue alternate theories of defense.
No. 06-1505                                                 13

lated; if we determine that there has been such a violation,
we examine whether this right was clearly established at
the time of the violation. Saucier v. Katz, 

, 201
(2001); Payne v. Pauley, 

, 775 (7th Cir. 2003).
Because the jury has rendered a verdict against the Com-
missioners now seeking immunity, we must view the
facts in the light most favorable to the plaintiffs; because
the substance of a constitutional right is a question of
law and therefore not within the authority of the jury,
whether the acts done by the Commissioners violate
the Constitution and whether the law was clearly estab-
lished at the time of any violation are, as questions of law,
subject to our de novo review. 

;
Reynolds v. City of Chicago, 

, 527 (7th Cir. 2002);
McNair v. Coffey, 

, 466 (7th Cir. 2002).


  1. Violation of a Constitutional Right
   The jury found that the Commissioners “personally
participate[d] in discriminating against . . . the plaintiffs,”
R.149 at 5, and held the Commissioners liable under 42
U.S.C. § 1983 for violating the officers’ rights under the
Fourteenth Amendment to equal protection of the law. We
first must determine whether the acts found by the
jury indeed constitute a constitutional violation in this
context. See 

.
  The Equal Protection Clause of the Fourteenth Amend-
ment provides that “[n]o State shall . . . deny to any person
within its jurisdiction the equal protection of the laws.”
U.S. Const. Amend. XIV, § 1. The Clause protects the
right to be free from certain types of discrimination in
promotion in public employment absent justification of
constitutional proportion. Race-conscious employment
14                                                 No. 06-1505

decisions made by the state are presumptively uncon-
stitutional and will satisfy the requirements of equal
protection only where they are consistent with strict
scrutiny. Adarand Constructors, Inc. v. Pena, 

, 227
(1995); City of Richmond v. J.A. Croson Co., 

, 493-
94 (1989). To satisfy strict scrutiny, classification schemes
involving race must serve a compelling state interest and
be narrowly tailored to further that interest. 

.9 Although the ultimate burden of defeat-
ing a qualified immunity defense rests with the plaintiff
and thus it is the plaintiff’s burden to establish a con-
stitutional violation, Sparing v. Village of Olympia Fields,

, 688 (7th Cir. 2001), on review of an equal
protection challenge, we ordinarily require only that the
plaintiff establish a racial classification; it then becomes
the Government’s burden to prove that the classification
satisfies strict scrutiny, Johnson v. California, 

,
505 (2005).
  Neither the parties nor the district court appear to
dispute the compelling nature of the state’s interest in
diversity in law enforcement.10 See Jury Instruction 3,
R.164 at 18; Instruction Conference, R.284 at 2176;


9
  The defendants do not argue separately that their plan should
be upheld with regard to gender discrimination because it
would satisfy intermediate scrutiny. Instead, they exclusively
argue the compelling interest/narrowly tailored racial standard.
10
  We note that, while the defendants regularly refer to a
compelling interest in “diversity” writ large, they have at times
identified more specific goals associated with a diverse police
force, namely creating a truly representative force and better
preparing all officers for culturally-diverse interaction in the
community they serve. See R.298, Ex.40 at 1.
No. 06-1505                                                15

McNamara v. City of Chicago, 

, 1222 (7th Cir.
1998). Our precedent supports this view. See Petit v. City
of Chicago, 

, 1114 (7th Cir. 2003) (consider-
ing the Supreme Court’s decision in Grutter v. Bollinger,

, 327-31 (2003), and concluding that, in the
case of the City of Chicago, “there is an even more com-
pelling need for diversity in a large metropolitan police
force charged with protecting a racially and ethnically
divided major American city”); Wittmer v. Peters, 

, 919 (7th Cir. 1996) (stating that law enforcement is
among “the very clearest examples of cases in which
departures from racial neutrality are permissible” in
rejecting the plaintiffs’ claim that appointment of a black
correctional officer as a lieutenant in a young-offender
boot camp was discriminatory).
  However, as we noted earlier, in order for the defendants
to demonstrate that their actions comport with strict
scrutiny, they must demonstrate not only a compelling
state interest, but also evidence sufficient to establish that
they have narrowly tailored the remedy consistent with
that interest. 

. Upon examination of
the record, we must conclude that, in this case, the Com-
missioners have not made this second showing. The
evidence adduced at trial regarding the “plan” to increase
diversity in the command staff ranks was limited at best.
Although it had been subject in the past to court orders to
increase diversity in hiring and had been under one dur-
ing the first part of Chief Jones’ tenure, the City was
under no specific court orders directing it to increase
promotional opportunities for women and minorities.
Reports prepared by FPC staff expressly noted that there
were “no affirmative action goals” for the command staff
ranks. R.298, Ex.40 at 7. Each Commissioner in his or her
16                                                No. 06-1505

own testimony denied the use of race-conscious policies
in their votes to approve potential candidates for promo-
tion. The record therefore discloses no policy, no set
parameters and no means of assessing how race should
be weighed with other promotional criteria. Faced with
any evidence of a plan in the trial record, the defen-
dants are left to urge that the Commissioners’ testimony
demonstrates that, even though they considered each
candidate individually, they embraced a view of increas-
ing diversity. They contend that the Commissioners took
a flexible approach, in which diversity was important,
but under which the individual qualifications of each
candidate were considered before promotion. They fur-
ther contend that this approach is supported by evidence
that they undertook review of Chief Jones’ performance
and that his ability and successes in promoting diversity
were cornerstones of their review.
  Our cases approving of a race-conscious promotion
policy for a public employer as a narrowly tailored re-
sponse to a compelling governmental interest have never
approved such a loose and indeed effectively standard-
less approach. See, e.g., 

(approving
of a limited-time standardization of examinations scores
based on race for promotion to sergeant where the exami-
nation had an adverse racial impact); 

(noting that “promotions were made pursuant
to an affirmative action plan”); 

(noting the precise increase in minority promotions
identified as an affirmative action plan goal and the
manner in which it was achieved to have “the minimum
adverse impact on whites”); Billish v. City of Chicago, 

, 892 (7th Cir. 1993) (en banc) (identifying the
challenged plan’s goals, although ultimately not finding
No. 06-1505                                                 17

evidence sufficient to justify dismissal on the ground that
the plaintiffs had not stated a claim of discrimination). On
one occasion, we have approved a race-conscious promo-
tion without an admitted plan with appropriate standards,
see Wittmer, 

, but it is of little relevance in the
present case. In Wittmer, we evaluated the necessity of
appointing a single black officer to the rank of lieutenant in
a boot camp populated primarily by black inmates. By
contrast, the present situation stretches through several
years and dozens of promotions. 

  Therefore, we cannot say that the defendants’ actions
comport with the Constitution. There simply is no evidence
in the record of the actual content of their policies—policies
that we must examine under the most searching form of
judicial scrutiny. A race-conscious promotion system
with no identifiable standards to narrowly tailor it
to the specific, identifiable, compelling needs of the
municipal department in question cannot pass constitu-
tional scrutiny. Accordingly, we must proceed to determine
whether this deficiency was “clearly established” at the
time of the Commissioners’ actions.


  2. Clearly Established Law During the Relevant Period
  Qualified immunity protects officials from suit and
from liability for civil damages when, at the time of the
challenged action, the contours of the constitutional right
were not so defined as to put the defendant officials on
notice that their conduct amounted to a constitutional
violation. See Hope v. Pelzer, 

, 739 (2002) (equat-
ing the right of an official sued for damages under 42
U.S.C. § 1983 to fair notice to that of an official charged
with criminal liability under the § 1983 criminal counter-
18                                                No. 06-1505

part, 18 U.S.C. § 242). “The relevant, dispositive inquiry
in determining whether a right is clearly established is
whether it would be clear to a reasonable officer that his
conduct was unlawful in the situation he confronted.”

(citing Wilson v. Layne, 

,
615 (1999)). In order to determine whether the law is clearly
established, we must inquire whether, “in light of pre-
existing law, the unlawfulness [of the conduct was]
apparent.” 

(citing Anderson v. Creigh-
ton, 

, 640 (1987)).
  Accordingly, we must determine whether the state of
the law with respect to affirmative action during the
relevant period would have put a reasonable official on
notice that the approach taken by the Board was uncon-
stitutional. We have little difficulty in concluding that
the law was clear. Following the Supreme Court’s opin-
ions in City of Richmond v. J.A. Croson Co., 

(1989), and Adarand Constructors, Inc. v. Pena, 

(1995), it was clear that “all racial classifications, im-
posed by whatever federal, state, or local government
actor” must comport with strict scrutiny. 

. Our own precedent during the period in
question supports the view that the approach taken would
not pass constitutional muster. In Cygnar v. City of Chicago,

(7th Cir. 1989), we stated that the onus is on
state defendants to “fully and properly articulate the
factual predicate for their [affirmative action] ‘plan’.” 

Cygnar arose relatively early in the development of
affirmative action jurisprudence, at a time when courts
were more concerned with statistical evidence of past
discrimination to justify present remedial affirmative
action. Here, however, we are concerned with the
separate compelling interest in diversity as a justification.
No. 06-1505                                                   19

Nonetheless, we clearly placed the burden on defendants
who act in a racially discriminatory manner to do so only
on the basis of established facts demonstrating real neces-
sity.11 We ultimately affirmed the district court’s ruling
that the City was not liable for the constitutional violation
in Cygnar; we did so, however, by concluding that, al-
though the defendants’ conduct in using an insufficiently
justified affirmative action plan “may well violate today’s
established constitutional law standards,” the law in
1984 (at the time of the challenged transfers) was not
sufficiently clear to deny the defendants qualified immu-
nity. 

(emphasis in original).
  In Billish v. City of Chicago, 

(7th Cir. 1993) (en
banc) (reversing a district court’s dismissal of plaintiffs’
equal protection claims), we relied on our ruling in Cygnar
when we again evaluated Chicago’s attempt to remedy
past discrimination, an interest that, by then, the Supreme
Court had identified as sufficiently compelling under
some circumstances to justify a narrowly tailored remedy,
see City of 

. The city’s remedial
efforts involved a race-conscious promotion plan; in our
review, we stated that the measures adopted could sur-
vive only where they had been “carefully designed to avoid
unnecessary injury to white persons,” 

. Several years later, we further stated, in Wittmer, that
to demonstrate such careful crafting consistent with the
Constitution, the defendant must


11
  Incidentally, Cygnar v. City of Chicago, 

, 832 (7th
Cir. 1989), also recognized the inherent incompatibility of
presenting a defense of non-discrimination and a fall-back
position of lawful discrimination, such as the defendants in this
case have done.
20                                              No. 06-1505

     show that they are motivated by a truly powerful and
     worthy concern and that the racial measure that they
     have adopted is a plainly apt response to that concern.
     They must show that they had to do something and
     had no alternative to what they did. The concern and the
     response, moreover, must be substantiated and not merely
     

(emphasis added). Wittmer then approved of
the promotion of a single black staff member to lieutenant
because a compelling interest in some representation of
African-Americans on the command staff at a boot camp
with a predominantly African-American inmate popula-
tion had been shown and because a single promotion
was the least discriminatory remedial action the state
could take under the circumstances. 

  These cases clearly establish that narrow tailoring means
precisely what it says: Race-based preferences must be
constructed carefully to discriminate no more than neces-
sary to meet whatever compelling state interest is at issue.
Moreover, defendants must substantiate both the need
and the remedy sufficient to permit our meaningful re-
view. The defendants in this action had fair notice that
their actions were outside the permissible bounds of racial
preferences at the time that they acted.
  Because we conclude that the acts of the Commissioners,
as found by the jury, in participating in discrimination
against the plaintiffs, violated the constitutional rights
of the plaintiffs and because we conclude that, at the
time of their acts, the constitutional violation was
clearly established, we also must conclude that the de-
fendants are not entitled to qualified immunity. Accord-
ingly, we affirm the judgment of the district court with
No. 06-1505                                                    21

respect to the liability of the Commissioners under 42
U.S.C. § 1983.


B. Municipal Liability
  The City of Milwaukee challenges the finding of liability
against it for the actions of the Commissioners and the
Chief under §§ 1981 and 1983 and Title VII. The basis for
municipal liability under § 1983 is that the municipality
sanctioned or ordered, through official policy, the unlaw-
ful discriminatory conduct in issue. Pembaur v. City of
Cincinnati, 

, 479-80 (1986). Liability may be
found either with a widely-adopted policy, or for even
the single actions of municipal employees, if those em-
ployees had final policy making authority for the munici-
pality, a question of state law. Id.; City of St. Louis v.
Praprotnik, 

, 123-24 (1988) (plurality opinion).
Section 1981, like § 1983, also requires a plaintiff to demon-
strate an official policy or custom in order to allow for
municipal liability. Jett v. Dallas Ind. Sch. Dist., 

,
736-37 (1989). The jury was instructed that the Commis-
sioners were final policymakers for the City and found,
on the basis of their actions, that the City was liable. See
R.285 at 2273.
  As the defendants correctly note, under Monell v. Depart-
ment of Social Services, 

, 693 (1978), if the
final policymakers for the City did not engage in unlaw-
ful conduct, the City cannot be liable on the basis
of a municipal policy under § 1983; because we have
already concluded, however, that the Commissioners did
violate the plaintiffs’ constitutional rights because their
race-conscious promotion plan was not consistent with
strict scrutiny, this principle is of no assistance to the City
with respect to the actions of the Commissioners.
22                                                No. 06-1505

  We need not decide whether Chief Jones is a
policymaker, thus making the City liable under § 1981 and
§ 1983 for his actions. The City remains liable for his
actions under the respondeat superior theory of liability
embraced by Title VII. See Geier v. Medtronic, Inc., 

, 244 (7th Cir. 1996). Because the City has declined to
challenge whether the actions of Chief Jones violated the
plaintiffs’ constitutional rights, see Appellants’ Br. at 41-42
n.17, his actions form an appropriate basis for a valid
Title VII claim against the City as the employer.
  Accordingly, because we reject the City’s contention that
the actions of the Commissioners can withstand strict
scrutiny and because we conclude that, in any event,
the City is responsible for Chief Jones’ actions under
Title VII, we affirm the district court’s finding of liability
against the City.


C. Compensatory Damages
  The defendants next challenge numerous legal rulings
made by the district court with respect to the jury’s award
of compensatory damages. We review the challenged legal
determinations de novo and the factual determinations
made by the court for clear error. Todd v. Corp. Life Ins. Co.,

, 207 (7th Cir. 1991).


  1. Loss of a Chance Doctrine
  In Doll v. Brown, 

, 1206-07 (7th Cir. 1996), this
court commended “to the consideration of the bench and
bar” the loss of a chance doctrine for evaluating damages
due to a plaintiff in a competitive-promotion employ-
ment discrimination case; we then applied that rule in
No. 06-1505                                                  23

Bishop v. Gainer, 

, 1016-17 (7th Cir. 2001), and
in Biondo v. City of Chicago, 

(7th Cir. 2004). The
loss of a chance doctrine is a familiar doctrine in tort law,
and although not all jurisdictions accept it as a basis for
calculating damages, we have stated that, in our view, it is
basically sound. 

. We described the
usual application of the doctrine as follows:
    [Loss of a chance] is illustrated by cases in which, as a
    result of a physician’s negligent failure to make a
    correct diagnosis, his patient’s cancer is not arrested,
    and he dies—but he probably would have died any-
    way. The trier of fact will estimate the probability that
    the patient would have survived but for the physician’s
    negligence—say it is 25 percent—and will award that
    percentage of the damages the patient would have
    received had it been certain that he would have sur-
    vived but for the negligence.
      . . . . It is an extension of the routine practice in tort
    cases involving disabling injuries of discounting lost
    future earnings by the probability that the plaintiff
    would have been alive and working in each of the
    years for which damages are sought. It recognizes the
    inescapably probabilistic character of many injuries. It
    is essential in order to avoid undercompensation and
    thus (in the absence of punitive damages) under-
    deterrence, though to avoid the opposite evils of
    overcompensation and overdeterrence it must be
    applied across the board, that is, to high-probability as
    well as to low-probability cases. If the patient in our
    example was entitled to 25 percent of his full damages
    because he had only a 25 percent chance of survival,
    he should be entitled to 75 percent of his damages if
    he had a 75 percent chance of survival—not 100 percent
24                                                No. 06-1505

     of his damages on the theory that by establishing a 75
     percent chance he proved injury by a preponderance of
     the evidence. He proves injury in both cases, but in both
     cases the injury is merely probabilistic and must be
     discounted accordingly.

(internal citations omitted) (empha-
sis in original). As we have recognized when applying this
doctrine in other discriminatory promotion cases, it
appropriately quantifies each plaintiffs’ monetary loss
when what they in fact lost was a chance to compete on
fair footing, not the promotion itself. See 

.
  The parties in this case acknowledge that our precedent
supports the use of the loss of a chance method of calcu-
lating damages in the factual scenario at issue in this case.
They dispute, however, whether the district court appro-
priately applied the doctrine to the facts and whether, as
a consequence, it erroneously instructed the jury.
   At the damages phase of the trial, the defendants re-
quested a damages instruction that would take into account
all other lieutenants eligible for promotion at each of the
dates the jury found that the plaintiffs had been wrongfully
passed over for promotion. That instruction would have
required the jury to consider the entire number of officers who
were qualified for promotion to the position of captain at
the time of the discrimination. R.109 at 24. The district
court rejected the proposed instruction’s language and
ruled that it would eliminate all references to other quali-
fied candidates in the instruction, because there was no
mechanism by which the qualifications of other officers
was established. R.291 at 299-300. Specifically, the district
court stated that no evidence had been produced with
regard to other candidates seeking promotion and that,
No. 06-1505                                                  25

unlike the Biondo plaintiffs, the plaintiffs in this action were
not among a group that had pre-qualified and expressed
interest by virtue of sitting for a promotional examination.

The court apparently believed that, if other
candidates were qualified and interested, they necessarily
would have joined as plaintiffs in the present action. 

The court therefore instructed the jury by referenc-
ing only the probability that each individual plaintiff—-not
each officer eligible for promotion—would be promoted on
any particular date. R.165 at 5. A special verdict form asked
the jury only to determine the “percentage chance that each
Plaintiff would have been promoted to captain of police . . .
keeping in mind other qualified Plaintiffs” on each date of
discrimination. 

As instructed by the
district court, the Special Master used the dates of
discrimination and probabilities of promotion found by the
jury in calculating the economic damages owed to each
plaintiff. See R.209 at 2-4 (Special Master’s Report).
  We believe the district court’s approach was inconsis-
tent with the dictates of our lost-chance precedent. Al-
though our cases have evaluated situations in which the
administration of exams and other identifiable benchmarks
have resulted in a more definite and certain list of potential
promotees, it is not the case that, in the absence of such a
measure, the district court was entitled to assume that
each plaintiff was virtually assured promotion ahead of
any other available lieutenants. The district court believed
that our ruling in Biondo, which rejected as implausible a
jury’s findings of high probabilities of promotion for the
plaintiffs in that case, distinguishable; in Biondo, the
plaintiffs had rested on their desire for the promotion,
whereas, in the present case, the plaintiffs produced
evidence regarding their fitness for 

                                                 No. 06-1505

688. We acknowledge this distinction, but conclude that
it misapprehends the nature of the burdens in the lost-
chance damages inquiry. The district court treated the
issue as though once the plaintiffs had proved discrimina-
tion, the lost-chance doctrine was effectively a measure by
which the defendants could reduce their liability by
showing that the plaintiffs were not the likeliest candidates
for promotion in the absence of discrimination. See R.289 at
2531 (“[I]t seems to me at some point the shifting occurs.”).
Our mention of the absence of evidence of the plaintiffs’
qualifications in Biondo did not mean that a plaintiff is
entitled to rest on a presentation of his or her qualification.
Indeed, we noted that the Biondo plaintiffs had each chosen
to present “a non-comparative case,” a failing, on their
part, because potential promotees “do not strive to meet an
absolute standard; they compete against their colleagues.”

. We stated that the plaintiffs
should have demonstrated that they were better suited
than their rivals—indeed, much better suited, as the jury
in that case found the plaintiffs had a one hundred per-
cent chance of promotion absent discrimination—and
noted that the plaintiffs “suffer from the omission” of
appropriate comparative evidence and actual evidence of
how the plaintiffs subsequently fared in attempts toward
promotions against other candidates. Id.12


12
  The plaintiffs contend that once they “prove that the non-
white male promotees were not better qualified than they
were,” the defendants must provide a legitimate nondiscrim-
inatory reason for their actions. Appellees’ Br. at 31, citing
Grayson v. City of Chicago, 

, 748 (7th Cir. 2002).
Grayson, however, states the standard for demonstrating liability,
not the standard for proving lost-chance damages.
                                                 (continued...)
No. 06-1505                                                     27

  The plaintiffs bear the burden of establishing their losses,
and, in the case of promotional opportunities, it is the
plaintiffs’ burden to establish the probability that they
would be promoted over all other potential candidates.
Only in the face of evidence that they would have been
promoted over any other non-plaintiff candidates absent
discrimination would the district court have been justified
in instructing the jury to limit its consideration of the
plaintiffs’ lost chances to the consideration only of other
plaintiffs. Although the evidence in the record strongly
supports the conclusion that the lieutenant-plaintiffs
were qualified—indeed, that is uncontested—it necessarily
does not follow from our case law that the plaintiffs
were entitled to an instruction that treated them as though
they were the only qualified individuals.13
  We further conclude that the error in instructing the
jury on how to establish probabilities of promotion infected
more than the economic damages award to which the
percentages were directly applied. Specifically, although



12
  (...continued)
  The plaintiffs also argue that there are various other facts that
distinguish this case from Biondo. Appellees’ Br. at 29-30.
Although that may very well be the case, these distinguishing
facts do not present the comparative evidence that this court
in Biondo determined were necessary.
13
  On appeal, the defendants urge that the court should have
looked at Trial Ex.102, which lists all eligible promotees at the
date of each promotion, and made calculations based on
seniority as represented in that chart. There was, therefore, at
least some evidence in the record of other individuals who also
might have been promoted in the absence of discrimination.
See Appellants’ Br. at 45-46.
28                                                 No. 06-1505

the defendants asked the district court, in their motion
for remittitur, to apply the lost-chance percentages to the
compensatory damages as found by the jury, the district
court read this court’s opinion in Biondo as not requiring
a reduction in compensatory damages for emotional injury
on the basis of the probability of promotion. R.264 at 3. This
was error. As we have noted, the purpose of compensatory
damages is to compensate for what was lost, and under
the damages rubric that applies, what was lost is only
a chance. In Biondo, we vacated compensatory damages
awards that were not properly scaled to the lost chance.

. We acknowledged expressly that
compensatory damages for a lost chance must be linked
to promotional likelihood. 

we specifically
stated that “[a] change in the promotion probabilities and
dates requires everything else to be redone.” 

on remand, compensatory damages must be redeter-
mined taking into account the applicable probabilities of
promotion, consistent with this opinion.14


     2. Offsets for Overtime
  In addition to the claimed errors with respect to the
application of the lost-chance doctrine, the defendants


14
  The plaintiffs contend that the only necessary proportionality
analysis with respect to emotional distress awards in employ-
ment discrimination actions is in comparison to the statutory
cap in the 1991 Civil Rights Act, 42 U.S.C. § 1981a(b)(3). This
view is in direct contradiction to the plain language of Biondo,
which directs the district court to “see to it that any awards of
compensatory damages for mental distress are proportional to the
wrongs—and to the caps added by the 1991 

-
91 (emphasis added).
No. 06-1505                                               29

also contend that the district court erred in refusing to
offset certain interim earnings against back and front pay.
Although lieutenants were in a lower pay grade than
were captains, they were eligible for overtime, which was
often a source of substantial additional income for a
lieutenant. Instead of earning overtime, when captains
were required to work additional hours, they received no
additional compensation, but they could accrue flextime for
certain of those hours worked.
  Before the district court, and again on appeal, the defen-
dants urge that a captain’s base pay should be compared
to a lieutenant’s base pay plus overtime earnings. See
Appellants’ Br. at 48-54. The district court rejected this
method of economic damages assessment, concluding
that there was “no sure way, a way that this court could
be comfortable with in attempting to calculate a dollar
amount for either the flextime or the overtime.” R.291 at
303-04. Instead, the district court fixed the measure of
wage loss at the base pay of a lieutenant after completion
of the probationary period to the base pay of a captain.
R.291 at 304; R.205 at 2.
  We note that there is actual record evidence of the
amounts of overtime pay in the plaintiffs’ past earnings. See
R.298, Ex.565 (admitted payroll records). We also note that
the district court heard testimony regarding the relation-
ship of flextime to overtime, but struck the testimony
because the defendants had failed to comply with a
continuing discovery order for ongoing flextime records.
R.291 at 249-53. The defendants had produced evidence
that flextime would not produce additional compensa-
tion, except in rare circumstances involving retirement
before certain flextime rules were in place. R.291 at 289;
R.298, Ex.120. Accordingly, at least with respect to back
30                                                 No. 06-1505

pay, there were admitted amounts of overtime earnings,
and evidence that flextime would have treated those
extra hours as simply a reallocation of the hours a captain
was expected to work in the course of a salaried year
absent some application of the special retirement pay-out
rules. With respect to front pay, there was some testimony
regarding the tightening of overtime earnings that
would have drawn into question whether future rates of
overtime could be in any way comparable to past rates.
R.291 at 262-63.
  We believe that both overtime and flextime had economic
value and therefore must be considered in determining
economic damages. With respect to back pay awards and
overtime earnings, hard numbers are available, and the
simple fact that the economic value of flextime is more
difficult to quantify is simply not a justification for ignoring
both issues in determining compensatory damages. On
remand, the district court must take these matters into
consideration.15


     3. Determining a Cut-off Point for Front Pay Awards
  The defendants seek review of one final matter on the
measure of compensatory damages. Upon the district
court’s instruction, the Special Master considered front pay
awards to end on the earlier of the date of a plaintiff’s
retirement, or after two years of service as a captain. See
Special Master Report, R.209 at 2. The defendants submit


15
  The district court’s decision to preclude certain evidence as a
discovery sanction is not before us on appeal and therefore
remains the law of the case.
No. 06-1505                                                31

that the appropriate cut-off point should have been the
first unhindered opportunity for promotion.
  The defendants are correct that our ruling in Biondo sets
an end-point for front pay at the time of the first unim-
peded promotional opportunity, not a particular plaintiff’s
actual date of promotion. 

. This
approach reflects Biondo’s general application of lost
chance principles: The plaintiff who suffered discrimina-
tion in promotion did not lose a promotion, but some
quantifiable chance at a promotion; when that chance is
unimpeded by discrimination, the injury ceases.
   In this case, the district court erred in concluding that
the plaintiffs’ promotional opportunities would not be
“unhindered,” as Biondo requires, because they would be
placed back in the pool of eligible applicants, not given
preferential treatment for the first promotional opportuni-
ties. R.291 at 299 (“[W]hen I first read [about the unhin-
dered promotional opportunities claimed by the defen-
dants], I understood it to mean there would be no hin-
drance to them being the next promotion. Now from what
I have heard I’m inclined to believe that that does not
mean unhindered, it just means that they’re back in the
pool that is eligible.”); 

(“To argue [as defendants
have] that there are still other candidates seems to defeat
the defendants’ earlier argument that nine of the plaintiffs
will have unburdened promotional opportunities.”). On
remand, the district court must determine “the time a
reasonable person needs to achieve the same or an equiva-
lent position in the absence of discrimination,” 

, which in this context, as in Biondo itself,
means an opportunity to compete on equal footing with
other candidates of any race. We note that, because the
City promotes officers to captains only when a vacancy
32                                             No. 06-1505

in the rank of captain arises, the frequency of this avail-
ability should be among the relevant considerations in
determining when each of the seventeen plaintiffs, and
in particular, those who have not yet been promoted or
have not yet retired, would have an unimpeded promo-
tional opportunity.


D. Punitive Damages
  The individual defendants also challenge the punitive
damages awards assessed against them. Specifically, they
contend that there was insufficient evidence of malice to
submit the issue to the jury and that, in any event, the
punitive damages awards are excessive and cannot stand.
  In Smith v. Wade, 

, 56 (1983), the Supreme
Court enunciated the appropriate standard for the avail-
ability of punitive damages in an action under § 1983: “[A]
jury may be permitted to assess punitive damages in an
action under § 1983 when the defendant’s conduct is shown
to be motivated by evil motive or intent, or when it in-
volves reckless or callous indifference to the federally
protected rights of others.” This court reviews whether
the issue of punitive damages was properly submitted to
the jury for an abuse of discretion. Gentry v. Export
Packaging Co., 

, 851 (7th Cir. 2001).
  As the plaintiffs correctly note, there is some evidence
in the record that the defendants at times failed to require
the Chief to comply with their policies mandating that
he submit various paper records to the Board along with
a candidate for promotion. R.298, Ex.18 at 20 (requiring
written explanation of reasons for promotees); R.275 at 834
(noting an absence of information regarding assignments
for captains); R.275 at 770 (noting a lack of resumes).
No. 06-1505                                                33

During the liability phase, the jury found the personal
participation of the Commissioners in discrimination,
and this finding would suggest that the jury concluded
that the Commissioners had done more than simply
evaluate single candidates that had come before them, as
the statute requires. The plaintiffs’ also produced evi-
dence of the apparent racial animus of Chief Jones of which
the Commissioners were aware, and introduced the
2001 Dimow report. This evidence could be interpreted as
having put the Commissioners on notice that the promo-
tional policies in effect in the Police Department, over
which they had authority, were resulting in a quickly
changing racial make-up exhibiting an under-representa-
tion of white males on the command staff. Taking that
evidence in the light most favorable to the plaintiffs and
in light of the jury’s verdict, the Commissioners knew
about a problem, failed to act to control it, as the responsi-
bility of their office required them to do, and knowingly
participated in its continuance. This evidence permitted
a jury to find reckless or callous indifference to the feder-
ally protected rights of the plaintiffs, and we must there-
fore conclude that the district court did not abuse its
discretion in submitting the issue of punitive damages to
the jury.
  Finally, relying on the Supreme Court’s recent decision
in State Farm Mutual Automobile Insurance Co. v. Campbell,

, 418 (2003), the defendants submit that, if
the punitive damages stand as supported by the evidence,
they should be reduced because they exceed reasonable
limits. Although it is true that the Supreme Court ex-
pressed concern about some awards in excess of four
times compensatory damages, see 

(and here, ten
of the seventeen plaintiffs received punitive damages
awards of between 4 and 10.73 times their compensatory
34                                                   No. 06-1505

damages, R.215 at 2-3), the compensatory damages in this
case are relatively low; the Supreme Court has indicated
that greater punitive damages ratios may comport with
due process under that circumstance. State 

. Accordingly, State Farm does not require us to
reduce the award as excessive as a matter of law. See
Mathias v. Accor Economy Lodging, Inc., 

, 678
(7th Cir. 2003) (approving, post-State Farm, a $186,000
punitive damages award, a thirty-seven-fold increase
over the compensatory award of $5,000).16
   We note that the punitive damages award was equal
with respect to each Commissioner and with respect to
Chief Jones, apparently irrespective of the fact that some
Commissioners sat on the Board over a significantly
smaller number of promotions than others and the
concededly discriminatory acts of Chief Jones. “[P]unitive
damages should be proportional to the wrongfulness” of
each defendant’s actions. 

. Al-
though the jury was instructed to consider the
“reprehensibility of the Defendants’ conduct” and the
likelihood that a defendant would repeat the conduct
absent an award of punitive damages, R.165 at 3, it should


16
  The plaintiffs contend that we should not even consider the
defendants’ State Farm argument, because we have held that the
due process issue of excessive damages under State Farm is not
appropriately raised in the context of statutes which provide
their own limited damages caps, such as Title VII. Lust v. Sealy,

, 590 (7th Cir. 2004). However, Title VII, under
which the plaintiffs’ claimed damages cap applies, is not the
source of the punitive damages award assessed against the
Commissioners in their individual capacities (as it is a source
of liability only for an employer); thus, this argument is unavail-
ing.
No. 06-1505                                              35

have been more clearly instructed that each individual
defendant’s actions and fault must serve as the basis for
fashioning an appropriate punitive damages award.


                       Conclusion
  For the reasons stated above, we affirm the judgment of
the district court with respect to liability and reverse the
judgment of the district court as to damages. We remand
the case for further proceedings consistent with this
opinion. The parties shall bear their own cost on this
appeal.
                          AFFIRMED in part, and REVERSED
                                  and REMANDED in part

A true Copy:
       Teste:

                         _____________________________
                         Clerk of the United States Court of
                           Appeals for the Seventh Circuit




                   USCA-02-C-0072—1-18-07