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

Plaintiff challenged the constitutionality of the Indiana Unclaimed Property Act, Ind. Code 32‐34‐1‐1, as authorizing confiscation of private property without compensation. The Act states that property is presumed abandoned if the apparent owner has not communicated in writing with the holder or otherwise indicated interest in the property within a specified period. When the presumption applied, the holder (here, a bank) is required to try to notify the owner and to submit, within 60-120 days after that, a report including the owner’s last known address to the state attorney general, and to simultaneously transfer the property to the attorney general. The following year, the attorney general must attempt notice by publication. Notice is also posted on an official website. The owner can reclaim the property from the state for 25 years after its delivery before it escheats to the state. An owner who files a valid claim is entitled only to principal, and not to any interest earned on it. Plaintiff’s ward had an interest‐bearing account. The presumption of abandonment applied in 2006, three years after the last communication. Because the statute does not require individualized notice if the value of the account is less than $50, plaintiff (guardian) did not learn about the account until 2011. The district court dismissed her challenge to the “taking” of interest on the account. The Seventh Circuit reversed. View "Cerajeski v. Zoeller" on Justia Law

Waupaca manufactures iron castings and provides its foundry employees with personal protective equipment (PPE), including hard hats, safety glasses, ear protection, steel-toed footwear, and a fire-retardant uniform. Waupaca requires these employees to wear PPE while working; failure to comply can result in discipline. Waupaca provides locker rooms with showers. Typically, foundry workers finish their shift, clock out and proceed to locker rooms, where they remove their PPE, shower, and change into street clothes. Because of hazards associated with chemicals and dust to which some workers are exposed, Waupaca recommends that employees shower and remove their PPE on-site. Not all employees do so. Employees, representing a class of more than 400 (an opt-in class, 29 .S.C. 216(b)) alleged that Waupaca violated the Fair Labor Standards Act, 29 U.S.C. 201, by not paying for time spent showering and changing clothes at work. The district court granted Waupaca summary judgment, ruling that those activities were not compensable under the FLSA because the Occupational Safety and Health Administration had not mandated that foundry workers shower and change clothes on-site. The Seventh Circuit reversed, reasoning that OSHA’s decision not to promulgate a rule requiring such activities does not bar a party from presenting evidence as to compensability under the FLSA and that factual disputes otherwise precluded summary judgment.View "DeKeyser v. Thyssenkrupp Waupaca, Inc." on Justia Law

Med‐1 buys delinquent debts and purchased Suesz’s debt from Community Hospital. In 2012 it filed a collection suit in small claims court and received a judgment against Suesz for $1,280. Suesz lives one county over from Marion. Though he incurred the debt in Marion County, he did so in Lawrence Township, where Community is located, and not in Pike Township, the location of the small claims court. Suesz says that it is Med‐1’s practice to file claims in Pike Township regardless of the origins of the dispute and filed a purported class action under the Fair Debt Collection Practices Act venue provision requiring debt collectors to bring suit in the “judicial district” where the contract was signed or where the consumer resides, 15 U.S.C. 1692i(a)(2). The district court dismissed after finding Marion County Small Claims Courts were not judicial districts for the purposes of the FDCPA. The Seventh Circuit affirmed.View "Suesz v. Med-1 Solutions, LLC" on Justia Law

Wells Fargo and Hindman were creditors of Clark, whose president and CEO was Hindman’s son. Wells Fargo agreed to extend credit to the companies if Hindman agreed to become a subordinated creditor. Hindman executed subordination agreements. In 2010 Hindman authorized a wire transfer of $750,000 from his personal investment account at Wells Fargo to Clark at the request of his son. By that time, however, his son purportedly had been stripped of authority to make business decisions by Clark. When authorized decision makers learned about the purported loan, they ordered Hindman’s son to reject the funds. Hindman’s son promptly instructed a Wells Fargo Bank vice‐president to stop the transaction, but $750,000 arrived in Clark’s accounts and was automatically used to pay down its Wells Fargo line of credit. Days later, the same Wells Fargo vice‐president transferred $750,000 from Clark’s account to Hindman’s account at a Florida bank at Hindman’s request. Wells Fargo claimed that Hindman’s receipt of the $750,000 violated subordination agreements because Clark repaid a debt to Hindman while it had outstanding obligations to Wells Fargo. Hindman maintained that a valid loan was never consummated because his son could not bind the company and authorized decision makers rejected the proposed loan. The Seventh Circuit vacated summary judgment, reasoning that the district court failed to explain its rejection of Hindman’s plausible arguments. View "Wells Fargo Bus. Credit v. Hindman" on Justia Law

Woodboro has about 750 residents on 21,857 acres, within Oneida County. Woodboro’s 1998 Land Use Plan encourages low density single family residential development for waterfront properties and maintaining rural character. The 2009 Woodboro Comprehensive Plan incorporates that language. There are 177 parcels on Squash Lake, all but seven zoned for single-family uses. The seven parcels zoned for business were pre-existing uses under initial zoning in 1976. In 2001, Woodboro voluntarily subjected itself to the Oneida County Zoning and Shoreland Protection Ordinance, under which religious uses are permitted throughout the County and Woodboro. Year-round recreational and seasonal camps are permitted in 36 and 72 percent of the County; churches and religious schools are allowed on 60 percent of the land in the County. Churches and schools are permitted on 43 percent of Woodboro land; campgrounds (religious or secular) on about 57 percent. Eagle Cove sought to construct a Bible camp on 34 acres on Squash Lake in Woodboro, asserting that their religion mandates that the camp be on the subject property and operate year-round. The property is zoned Single Family Residential and Residential and Farming. Woodboro recommended denial. The County denied rezoning based on conflict with single-family usage. The district court entered summary judgment in favor of the municipalities. The Seventh Circuit affirmed, rejecting arguments under the Religious Land Use and Institutionalized Persons Act, the First and Fourteenth Amendments of the U.S. Constitution, and the Wisconsin Constitution. View "Eagle Cove Camp & Conference Ctr., Inc. v. Town of Woodboro, WI" on Justia Law

Steidl and Whitlock were convicted of 1987 murders, largely based on testimony by two supposed eyewitnesses. Long after the convictions, an investigation revealed that much of the testimony was perjured and that exculpatory evidence had been withheld. The revelations led to the release of the men and dismissal of all charges. Steidl had spent almost 17 years in prison; Whitlock had spent close to 21 years. They sued. By 2013, both had settled with all defendants. Because the defendants were public officials and public entities, disputes arose over responsibility for defense costs. National Casualty sought a declaratory judgment that it was not liable for the defense of former State’s Attorney, McFatridge, or Edgar County, agreeing to pay their costs under a reservation of rights until the issue was resolved. The Seventh Circuit ruled in favor of National Casualty. In another case McFatridge sought a state court order that the Illinois Attorney General approve his reasonable expenses and fees; the Illinois Supreme Court rejected the claim. In a third case, National Casualty sought a declaratory judgment that another insurer was liable for costs it had advanced. The Seventh Circuit affirmed that the other company is liable. It would be inequitable for that company to benefit from National’s attempt to do the right thing, especially since it did not do the right thing and contribute to the defense costs under a reservation of rights. View "Nat'l Cas. Co. v. White Mountains Reinsurance Co." on Justia Law

Foster was charged with distributing crack cocaine and a separate conspiracy-to-distribute charge. Against the advice of appointed counsel, Kupsis, Foster rejected two proposed plea agreements, each of which would have resulted in a sentence of about 20 years imprisonment. Foster faced a possibility of a life sentence, if convicted of the conspiracy charge. The government filed an information, pursuant to 21 U.S.C 851, 10 days before trial, stating that Foster had a prior felony drug conviction, which increased the mandatory minimum penalty on each count from 10 to 20 years. Kupsis had not anticipated the information and had not advised Foster that it was a possibility. After receiving notice of the information, Kupsis suggested to Foster that they attempt to revive one of the earlier proposed plea agreements. Foster refused. Kupsis successfully defended Foster against the conspiracy charge, but he was convicted on the distribution count and sentenced to 20 years imprisonment. Foster filed a Section 2255 motion, arguing ineffective assistance of counsel. The district court held that Foster could not establish that he was prejudiced by Kupsis’ representation. The Seventh Circuit affirmed.View "Foster v. United States" on Justia Law

Through their companies, Pilon and her husband falsely represented that one investment program would generate significant returns that Pilon would use to pay off the investors’ mortgages within two years, and make a bonus cash payment to investors. Many investors refinanced mortgages to invest. With respect to another investment program, Pilon falsely represented that money would be invested in a high-yield fund and that investors would receive 100 percent on their investments within about 90 days. Pilon hinted at religious and humanitarian purposes. Pilon paid early investors’ mortgages with later investors’ money (a Ponzi scheme). About 40 people invested $4,000 to $110,000, losing a total of $967,702. The Illinois Department of Securities ordered Pilon to cease offering investments; she ignored the order. When the scheme unraveled and investors lost their homes, Pilon was indicted for wire fraud. Pilon, a member of a sovereign citizen movement, unsuccessfully moved to dismiss for lack of jurisdiction. Immediately before jury selection, Pilon stated her intent to plead guilty; when the government proffered the facts, Pilon denied everything. After testimony by eight government witnesses, Pilon admitted to the scheme and pleaded guilty. In calculating Pilon’s guideline range, the court applied an enhancement for abuse of a position of trust, declined to credit Pilon for acceptance of responsibility, and sentenced Pilon to 78 months’ incarceration, in the middle of the range, and imposed $967,702 in restitution. The Seventh Circuit affirmed. View "United States v. Pilon" on Justia Law

Mead Johnson, purchased a primary Commercial General Liability policy from National Union, with a limit of $2 million for liability for “personal and advertising injury” and an excess liability policy from Lexington, with a limit of $25 million. Mead’s main product, Enfamil infant formula, is sold worldwide. Mead’s competitor, PBM, sued Mead for false advertising and consumer fraud and Mead sued PBM for trade dress infringement. PBM claimed that Mead had falsely asserted that PBM’s generic formula lacked key fats that promote brain and eye development. The suit sought $500 million in damages for product disparagement, a tort that the policies cover as a form of “advertising injury.” Mead did not notify the insurers of the suit until December 2009, after the suit ended in the $13.5 million verdict against Mead. Mead wanted its insurers to pay that judgment, plus a $15 million settlement that it made to resolve the class action suit. The insurers obtained declaratory judgments that they were not required to pay. The Seventh Circuit reversed the summary judgment in favor of the insurers in the suit relating to the PBM litigation, but affirmed the judgment in favor of National Union in the suit arising from the class action against Mead. View "Nat'l Union Fire Ins. Co. v. Mead Johnson & Co., LLC" on Justia Law

Cornejo’s father came to the U.S. in 1983 and, in 1994, brought his family to this country without admission. At age 18, Cornejo began having trouble with the law, including charges of driving without a license, possession of a controlled substance and paraphernalia, first degree criminal trespass, theft and criminal mischief, and violation of probation. Between 2002 and 2005, Cornejo avoided legal problems, but in 2005 he was charged with domestic battery and criminal damage to property. In 2006 he pled guilty to aggravated unlawful use of a weapon after he brandished a firearm during an argument with a neighbor. During immigration proceedings, Cornejo had four domestic battery charges and was twice arrested for DUI. After his conviction for the weapons violation, DHS initiated removal based on his illegal presence and his conviction for a crime of moral turpitude. During proceedings, Cornejo married a citizen and a petition for an alien relative was filed on his behalf. The IJ determined that Cornejo had not shown that his removal would result in extreme hardship to a qualified relative and that, even if he had made a showing, he did not merit a favorable exercise of discretion. The BIA affirmed. Cornejo moved to reopen based on new evidence of hardship to his U.S.-citizen daughter. The BIA denied the motion. The Seventh Circuit denied review.View "Reyes-Cornejo v. Holder" on Justia Law