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

Articles Posted in May, 2013
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SAMS contracted with Environs to provide architectural services for construction of a Homewood Suites hotel in Fort Wayne. Environs was to be paid a flat fee of $70,000. The contract stated: The Owner [SAMS] agrees that to the fullest extent permitted by law, Environs Architects/Planners, Inc. total liability to the Owner shall not exceed the amount of the total lump sum fee due to negligence, errors, omissions, strict liability, breach of contract or breach of warranty. The hotel was nearly complete when serious structural defects were discovered. The building department condemned the structure. Attempts to remedy failed; the hotel was demolished without opening. SAMS estimated its loss at more than $4.2 million. While SAMS’s suit against Environs was pending, the Indiana Supreme Court held that the “economic loss rule” applies to construction contracts under Indiana law: a party to a contract cannot be liable under a tort theory for any purely economic loss caused by negligent performance of the contract, absent any personal injury or damage to other property. The district court applied the rule to grant summary judgment rejecting SAMS’s negligence claim and held that SAMS’s recovery on its breach of contract claim would be limited to $70,000. The Seventh Circuit affirmed. View "Sams Hotel Grp., LLC v. Environs, Inc." on Justia Law

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Bitsin, a citizen of Bulgaria, entered the U.S. in 2005. Before his visitor’s visa expired, Bitsin applied for a student visa, assisted by an attorney recommended by the college. Bitsin claimed that he believed that he could “just stay,” but not work, while his application was pending and that he was unable to locate the attorney. In 2007 removal proceedings, Bitsin applied for asylum, withholding of removal, and relief under the CAT. Bitsin testified that his father, a retired Bulgarian military officer, owned a private security company that threatened the interests of the Galev Brothers crime syndicate, also in the security services business. Bitsin testified concerning a shooting incident and that his father was taken into protective custody, while other families left the country. The Galev Brothers were acquitted; to Bitsin’s knowledge, his father remains under protection. Another cooperating witness was murdered while in police custody and his father’s neighbors were killed when a bomb exploded in their garage. An IJ held that Bitsin’s application for asylum was time-barred and that Bitsin had not established that he was more likely than not to suffer persecution should he be returned to Bulgaria. The BIA affirmed. The Seventh Circuit rejected a petition for review. View "Bitsin v. Holder" on Justia Law

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A federal prisoner serving a term for unarmed robbery and confined in a two-person cell in the prison’s segregation unit because of a fight he’d had with another inmate, strangled his cellmate. He was convicted of first-degree murder, and sentenced to life in prison. The Seventh Circuit affirmed, rejecting an argument that he killed in “the heat of passion” and should have been convicted only of voluntary manslaughter. The jury had to find malice beyond a reasonable doubt in order to convict the defendant of murder, so evidence that he acted in the heat of passion and therefore without malice would, if believed, have required the jury to acquit him of the charge of murder. The heat of passion “defense” just puts the government to its proof. View "United States v. Delaney" on Justia Law

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A jury convicted Farmer of armed bank robbery, 18 U.S.C. 2113(a),(d), and 2, and use of a firearm during a crime of violence, 18 U.S.C. 924(c)(1)(A)(ii). Several days after the trial, an alternate juror contacted Farmer’s counsel and said that other jurors had made statements during the prosecution’s case indicating that they had discussed the evidence and had already decided Farmer was guilty, all before jury deliberations could have properly begun. Farmer moved for a new trial, arguing that this premature deliberation prejudiced her and violated her right to a fair trial. The district court denied the motion and imposed a sentence of 141 months in prison. The Seventh Circuit affirmed. The evidence was sufficient to support a guilty verdict, and the district court did not abuse its discretion by denying the motion for a new trial.The information, which did not indicate any external influence, came to the attention of the court only after the verdict was returned, when no corrective action could be taken and any inquiry into the effects of the comments would have run into Rule 606(b)’s bar on such inquiry. View "United States v. Farmer" on Justia Law

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While proceeding to the Stateville prison cafeteria, Navejar spoke to other inmates in their cells. Officer Iyiola ordered him to get out of the line because prison rules forbid inmates from stopping to speak to other inmates. Navejar disobeyed, became belligerent, and punched Iyiola. Other guards wrestled Navejar to the ground where he was handcuffed. Navejar claims that guards kicked him in the forehead, stomped his head against the ground, pepper-sprayed him, dragged him along the floor, and left him alone for a half-hour, while he screamed in pain, before he was allowed to wash off the pepper spray. The next morning a guard brought Navejar to Stateville’s health care unit, where nurses examined him. Before a doctor could provide attention, a guard escorted Navejar out, explaining that he was being transferred to Pontiac. At Pontiac, Navejar was examined by a physician, who concluded that he had suffered only bruises and scratches. In Navejar’s suit under 42 U.S.C. 1983, the district court denied motions to recruit counsel and entered summary judgment for the guards on Eighth Amendment claims. The Seventh Circuit reversed, finding that the court applied the wrong legal standard to Navejar’s motion and that lack of counsel prejudiced him. View "Navejar v. Iyiola" on Justia Law

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Beginning in 2003, Schmitz convinced financial institutions and others to lend him money, ostensibly for real estate development, by stating that he was the beneficiary of a multi-million dollar trust fund whose assets were available as collateral. There was no trust; Schmitz concocted a trail of paper and digital documents, even creating a phony financial services firm (with a website and virtual office space), and filing suit against fictitious employees of the (non-existent) firm claiming mishandling of the trust. Schmitz obtained more than $6 million from seven banks and two additional lenders. He used about half to pay off previous lenders, and the rest for personal expenses. Schmitz pleaded guilty to mail fraud affecting a financial institution, 18 U.S.C. 1341. Because Schmitz began the charged fraud in 2003, while on supervised release in connection with a prior state conviction, the advisory Guidelines range was 87 to 108 months in prison. The court imposed an 87-month sentence. The Seventh Circuit affirmed, rejecting arguments that “factor creep” in the Guidelines has inflated beyond reason the sentencing range for white collar frauds, particularly for someone of Schmitz’s age (60) and health and concerning the timespan of the fraud. View "United States v. Schmitz" on Justia Law

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The U.S. Commodity Futures Trading Commission served administrative subpoenas on Worth, a precious metal wholesaler, Mintco, a precious metal dealer, and DSD, a depository that stores precious metals, seeking documents relating to purchases and sales of precious metals, in connection with its investigation into whether those companies violated the Commodity Exchange Act, 7 U.S.C. 1. The companies handed over the requested documents, but redacted the names and contact information of the individual customers, retailers, and intermediaries, asserting that they (the companies) were covered by the Right to Financial Privacy Act, which requires that customers of a “financial institution” be given notice and the opportunity to object before any disclosures, 12 U.S.C. 3401, 3402(2), 3405. The district court held that the RFPA does not apply to the companies. The Seventh Circuit affirmed, finding that the nature of the businesses is readily distinguishable from that of the other entities listed in the RFPA’s definition of “financial institution.” View "Commodities Futures Trading Comm'n v. Worth Bullion Grp. Inc., " on Justia Law

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Harris was a registered representative with an affiliated broker of MetLife and sold insurance, annuities, and other financial products. Investigations by the Illinois Securities Division, MetLife, and the IRS revealed that for almost eight years, Harris had been diverting client funds, using deposit and accounting methods that substantially departed from MetLife’s standard practices. She manipulated software to generate account summaries that falsely displayed the investments that her clients intended to purchase. Harris received $10,938,986.58 in client funds from more than 50 but fewer than 250 clients, reinvested $4,055,945.73 on the clients’ behalf, and used the balance for personal purposes. MetLife settled with clients who suffered a loss, paying more than $7 million. Harris pled guilty to mail fraud, 18 U.S.C. 1341 and money laundering, 18 U.S.C. 1957. The court’s sentencing calculation included addition of 18 offense levels for a loss in excess of $2.5 million, four levels for the number of victims, two levels for sophisticated means, for a total offense level of 35. The final guideline range was 168 to 210 months; the court sentenced her to 210 months in prison plus $6,812,764.98 in restitution. The Seventh Circuit affirmed, rejecting an argument that the court erred in counting married couples as two separate victims. View "United States v. Harris" on Justia Law

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Earl was convicted of intentional homicide, jailed, and placed for five days onto “suicide watch” segregation where he was dressed in a “suicide-proof gown,” kept in continuous light for 24 hours, and constantly monitored. The jail says that suicide watch is required of every inmate convicted of a serious felony until he is examined by a mental-health expert. Earl claims that he was placed on suicide watch as punishment after an officer relayed false information that he had threatened other guards. Earl claimed an allergic reaction to the special gown and received medical attention. After a mental-health worker recommended that Earl be discharged from suicide watch, Earl was placed for 12 days in administrative segregation, apparently as punishment for initially refusing to wear the suicide gown, and afterwards was transferred to a Wisconsin state prison. Two years later Earl returned to the jail for a court appearance and again was housed in segregation. In his suit (42 U.S.C. 1983) the district court granted the defendants summary judgment, finding that Earl’s placement in segregation was too short to deprive him of a liberty interest and that conditions were not “unusually harsh.” Earl did not show delay in responding to his claim of allergic reaction. The Seventh Circuit affirmed. View "Earl v. Racine Cnty. Jail" on Justia Law

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Martin made images and videos depicting child pornography available on a file-sharing network. A search of his home uncovered hundreds more images and several videos of child pornography on computers. Martin pleaded guilty to possessing child pornography, 18 U.S.C. 2252(a)(4)(B). The presentence report calculated that sentencing guidelines yielded a range of 121 to 151 months. Given the ten-year statutory maximum sentence, Martin’s effective guidelines range was 120 months, U.S.S.G. 5G1.1(c)(1). The PSR noted that Martin had been diagnosed with major depressive disorder, dysthymia, alcohol and marijuana dependency, and polysubstance abuse, and had received a “possible, but doubtful” diagnosis of bipolar disorder. Martin had engaged in self-mutilation, had been hospitalized for mood disorders, and had attempted suicide, but was not receiving medication or treatment because he could not afford it. Martin did not object to the calculations, but argued that: his personal characteristics indicate a low likelihood of recidivism; the guidelines produce excessive sentences in possession cases: his contribution to the total harm of child pornography was negligible; and a shorter sentence was necessary to avoid disparities. The district court sentenced Martin to 120 months’ imprisonment, explaining that child-pornography offenders “are not rational thinkers in the first place.” The Seventh Circuit remanded for resentencing, because the court failed to address arguments concerning Martin’s personal characteristics and the goals of sentencing. View "United States v. Martin" on Justia Law