Justia U.S. 7th Circuit Court of Appeals Opinion Summaries

Four defendants were convicted of conspiring to defraud the U.S. by impeding the functions of the IRS and of related fraud and tax offenses in connection with abusive trusts promoted by two Illinois companies. Although the system of trusts was portrayed as a legitimate, sophisticated means of tax minimization grounded in the common law, the system was in essence a sham, designed solely to conceal a trust purchaser’s assets and income from the IRS. It was promoted through a network of corrupt promoters, managers, attorneys, and accountants, but prospective customers who sought independent advice were routinely warned of its flaws. Defendants were sentenced to prison terms of 120 to 223 months. The Seventh Circuit affirmed. View "United States v. Vallone" on Justia Law

The Illinois inmate’s suit under 42 U.S.C. 1983 alleged that his cell was infested with mice and cockroaches, that a window pane was missing and rain came in through the window, and that a warden had seen the conditions, yet nothing had been done. The district judge dismissed on alternative grounds: that the defendants were immune from suit by virtue of the Eleventh Amendment and that the complaint failed to allege harm. The Seventh Circuit affirmed, after noting that the complaint alleged that allowing rain to enter the cell created a health hazard, adequately alleging harm. Depending on how extensive infestation is, what odors or bites or risk of disease the pests create, the prisoner’s known particular psychological sensitivities, and how long infestation continues, a trier of fact might reasonably conclude that the prisoner had been subjected to harm sufficient to support a claim of cruel and unusual punishment even if he had not contracted a disease or suffered any pain. The suit is against a state and a state agency and Congress did not abrogate states’ sovereign immunity under section 1983, as it could have done. A state and its agencies are not suable “persons” under section 1983. View "Thomas v. State of IL" on Justia Law

Gruenberg, who has accrued 230 misconduct reports since his incarceration for burglary in 1999, seized a set of keys from a prison guard and swallowed them. He was taken to a hospital, where an x-ray showed that the keys were lodged in his abdomen. A physician told the prison officials that Gruenberg would probably pass the keys naturally within five days. They returned him to the prison and kept Gruenberg naked and in restraints for five days until he passed the keys. After five days, Gruenberg had not yet passed them and surgery was needed to remove them. Gruenberg sued, claiming violation of his Eighth Amendment right to be free from cruel and unusual punishment. The district court granted summary judgment in favor of the defendants. The Seventh Circuit affirmed, citing qualified immunity. While the conditions were undoubtedly uncomfortable, there was no evidence that any member of the prison staff showed “deliberate indifference” to Gruenberg’s health or safety. Those conditions were a reasonable response to a “unique situation.” View "Gruenberg v. Gempeler" on Justia Law

Haight purchased an insurance policy that included underinsured motorist coverage for the named insured (him) and any family members. After his teenage daughter Nicole was injured while riding in a car driven by an acquaintance whose insurance did not fully compensate her, she made an underinsured motorist claim on her father’s policy. The insurance company maintained that Nicole is not entitled to coverage because she was not riding in a vehicle listed on her father’s policy when she was hurt. The district court ruled in favor of Haight. The Seventh Circuit affirmed. The policy provides underinsured motorist coverage to the named insured and his family members that does not require that they be occupying a vehicle listed on the policy during the accident. View "Grinnell Mut. Reins. Co. v. Haight" on Justia Law

Bontrager filed a putative class action complaint challenging Indiana’s $1,000 annual limit for dental services covered by Medicaid, 42 U.S.C. 1396. The district court granted a preliminary injunction, holding that Indiana is required to cover all medically necessary dental services, irrespective of the monetary cap. The Seventh Circuit affirmed. Bontrager has an enforceable federal right capable of redress through Section 1983. The monetary cap, which excludes medically necessary treatment, is not a utilization control procedure, but allows a state to shirk its primary obligation to cover medically necessary treatments. The court acknowledged that Bontrager’s victory may be short-lived if the state decides to end coverage for all dental services. View "Bontrager v. IN Family & Soc. Servs." on Justia Law

Spears created and sold counterfeit documents, including fake Indiana driver’s licenses and handgun permits. He was convicted of aggravated identity theft, producing a false identification document and unlawfully possessing five or more false identification documents, 18 U.S.C. 1028A(a). The Seventh Circuit affirmed as to aggravated identity theft. Spears sold his customer a fraudulent handgun permit bearing her own identifying information, which she then used in an attempt to buy a firearm, violating 18 U.S.C. 922(a)(6), a qualifying predicate felony for aggravated identity theft. The statute covers more than misappropriation of another person’s identifying information; a person commits aggravated identity theft when he “knowingly transfers, . . . without lawful authority, a means of identification of another person” during or in relation to a predicate felony. The Court also affirmed conviction for producing a false identification document. The fake driver’s license underlying this count was sufficiently realistic that a reasonable jury could conclude that it appears to be issued by the State of Indiana. A reasonable jury could also conclude that Spears’s production of the fraudulent driver’s license affected interstate commerce. The evidence was insufficient to sustain conviction for unlawful possession of five or more false identification documents. View "United States v. Spears" on Justia Law

Four defendants were convicted of: conspiracy to possess with intent to distribute five or more kilograms of cocaine, 21 U.S.C. 846 (Count One); attempted possession with intent to distribute five or more kilograms of cocaine, 21 U.S.C. 846 (Count Two); possession of four firearms during and in relation to a drug trafficking offense, 18 U.S.C. 924(c)(1)(A) (Count Three); and possession of a firearm after having been convicted of a felony,18 U.S.C.922(g)(1) (Count Four). The charges arose from an undercover sting operation carried out by the Bureau of Alcohol, Tobacco, Firearms and Explosives, involving a confidential informant who brought up the possibility of robbing a fictitious drug “stash house.” The Seventh Circuit affirmed, rejecting challenges to the sufficiency of the evidence, an entrapment argument, and challenges to sentencing enhancements. View "United States v. Kindle" on Justia Law

In 2007, CSI entered into a contract with Sunrise to install carpets, countertops, flooring, and wall tiles at a new condominium within the geographical jurisdiction of the union’s Local 13. Though CSI was not a signatory to a collective bargaining agreement with Local 13, most other workers at the job site were union members. The union became aware that Sunrise was using non-unionized workers and began picketing and a strike. A union organizer stated that Sunrise should get rid of CSI and that if it used CSI on other job sites in the future, Local 13 would set up pickets at those jobs as well. Due to the threat, Sunrise canceled another contract and moved CSI workers to night hours at the condominium project. CSI’s president claims that the union organizer attacked him at the job site and brought claims for lost profits, assault and battery, intentional infliction of emotional distress, and unfair labor practices (secondary pressure) under the Labor Management Relations Act, 29 U.S.C. 187. The district court ruled in favor of defendants Regional Council, Local 13, and the union organizer on all counts. The Seventh Circuit affirmed. View "Carpet Serv. Int'l, Inc. v. Chicago Reg'l Council of Carpenters" on Justia Law

In 2003, the Leibovitch family was traveling along the Trans-Israel highway near Kalkilya through an area bordering the West Bank. Agents of the Palestine Islamic Jihad crossed from the West Bank into Israel and fired upon the Leibovitchs’ minivan using pistols and a Kalishnikov rifle. The Leibovitchs’ seven-year-old child, an Israeli national, was killed by the gunshots. Her three-year-old sister, an American citizen, survived but was severely injured by bullets that shattered bones in her right wrist and pierced her torso. Two grandparents and two siblings were also in the van during the attack, but survived. In 2008, the Leibovitchs brought suit against the Islamic Republic of Iran and its Ministry of Information and Security under the terrorism exception of the Foreign Sovereign Immunities Act, 28 U.S.C. 1605A, for providing material support and resources to the organization that carried out the attacks. The district court entered default judgment against Iran on the claim for injuries sustained by the U.S. citizen child, but found no jurisdiction over intentional infliction of emotional distress claims by other family members, who are not citizens. The Seventh Circuit reversed and remanded, holding that the Act confers subject-matter jurisdiction over the claims. View "Leibovitch v. Islamic Republic of Iran" on Justia Law

Plaintiffs had a Home Depot credit card issued by Citibank. In 2005, Krahenbuhl, who also had a Citibank-Home Depot credit card, contracted with plaintiffs to build a log cabin for speculative resale. A log cabin package was purchased over the phone from Home Depot for $9,761.64 and charged to Krahenbuhl’s account. The materials were approved by, delivered to, and signed for by plaintiffs, who eventually built and sold the log cabin. The relationship between Krahenbuhl and plaintiffs deteriorated, and Krahenbuhl disputed the charge. Citibank transferred the charge from Krahenbuhl’s credit card to plaintiffs’ card. Krahenbuhl and plaintiffs reached a settlement through mediation, which plaintiffs thought included payment of the credit card charge. About one year later, they claim, they became aware that the $9,761.64 charge had been transferred to their account. Neither Citibank nor Home Depot would remove the charge; accrued interest has resulted in a total sum of approximately $21,000. Plaintiffs sued under the Wisconsin Consumer Act, Wis. Stat. 427.104(1)(j). Citibank was dismissed and the district court granted Home Depot summary judgment, finding that Home Depot had not acted either directly or indirectly in an attempt to collect a debt. The Seventh Circuit affirmed. View "Parent v. Home Depot U.S.A., Inc." on Justia Law