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

The case revolves around a patient, Tommy Harris, who contracted bacterial sepsis due to repeated infections from his dialysis treatment at a clinic in Belleville, Illinois. Harris filed a malpractice lawsuit against the operators of the clinic and later included a claim against Durham Enterprises, Inc., the janitorial company responsible for cleaning the facility. The case primarily concerns Durham’s insurance coverage. Durham submitted the lawsuit to Ohio Security Insurance Company, its insurer, which denied coverage based on the insurance policy’s exclusion for injuries caused by fungi or bacteria. Harris and Durham then negotiated an agreement in which Durham promised not to mount a defense and Harris promised to seek recovery only from the insurer. The state trial judge granted a motion to sever Harris's claim against Durham and set it for a bench trial. The judge held a short, uncontested bench trial and entered judgment against Durham for more than $2 million.Ohio Security was not a party to the state court proceedings and the insurance policy was not in the record. However, the consent judgment includes findings on insurance issues, notably, that the insurer breached its duty to defend and is estopped from asserting any policy defenses. After the judgment became final, Harris filed an amended complaint purporting to add Ohio Security as a defendant. Ohio Security removed the action to federal court and sought a declaration of its coverage obligations. The district court held that the bacteria exclusion precludes coverage.In the United States Court of Appeals for the Seventh Circuit, Harris and Durham jointly appealed, challenging the no-coverage ruling but also raising a belated challenge to subject-matter jurisdiction under the Rooker–Feldman doctrine. The court found the jurisdictional argument meritless, as the Rooker–Feldman doctrine does not block federal jurisdiction over claims by nonparties to state-court judgments. The court also affirmed the district court's ruling that the policy’s bacteria exclusion precludes coverage for this loss. View "Mitchell v. Durham Enterprises, Inc." on Justia Law

David Perez, while on federal supervised release, was recorded by a police surveillance camera holding what appeared to be a firearm. His conditions of release, as well as federal law, prohibited him from possessing a firearm. At a revocation hearing, the government presented the surveillance video as evidence. The district judge asked Perez's probation officer to narrate the video, to which Perez objected and requested to cross-examine her. The district court denied this request, asserting that the probation officer was not a witness and that the narration was only for the hearing transcript. Perez's counsel did not take up the judge's offer to suggest questions for the probation officer.Perez appealed, arguing that the probation officer was effectively an adverse witness and that his rights were violated by the refusal to allow cross-examination. He also contested the district court's finding that he possessed a firearm and the subsequent revocation of his supervised release.The United States Court of Appeals for the Seventh Circuit agreed that Perez should have been allowed to cross-examine the probation officer. However, the court found this error to be harmless, as the district court did not rely on the probation officer's testimony in its finding that Perez possessed a firearm. The video provided ample evidence of Perez's possession of a firearm, and the court did not abuse its discretion in revoking his supervised release. Therefore, the judgment of the district court was affirmed. View "USA v. David Perez" on Justia Law

The case involves a dispute between GeLab Cosmetics LLC, a New Jersey-based online nail polish retailer, and Zhuhai Aobo Cosmetics, a China-based nail polish manufacturer. The founders of GeLab, Xingwang Chen and Shijian Li, are both Chinese citizens. The dispute centers around the ownership of GeLab and allegations of trade secret theft. According to Chen, he and Li founded GeLab with Chen owning 60% and Li 40%. They entered a joint venture with Zhuhai, which was supposed to invest in GeLab for an 80% ownership stake. However, Chen alleges that Zhuhai never sent the money and instead began using low-quality materials for GeLab's products, selling knock-off versions under its own brand, and fraudulently claiming majority ownership of GeLab. Zhuhai, on the other hand, asserts that Chen was its employee and that it owns 80% of GeLab.The dispute first began in China, where Li sued Chen for embezzlement. Chen then sued Li, Zhuhai, and Zhuhai's owners in New Jersey state court, alleging that he had a 60% controlling interest in GeLab and that Zhuhai had no ownership interest. The state defendants counterclaimed, seeking a declaratory judgment that Zhuhai owns 80% of GeLab. GeLab then filed a second action in New Jersey against Li alone. The state court consolidated the two cases.While the New Jersey proceedings were ongoing, GeLab filed a federal lawsuit in the U.S. District Court for the Northern District of Illinois against Zhuhai and its owners, alleging violations of the federal Defend Trade Secrets Act and the Illinois Trade Secrets Act. The defendants responded that Zhuhai owns GeLab and that it cannot steal trade secrets from itself. The district court stayed the federal case, citing the doctrine of Colorado River Water Conservation District v. United States, reasoning that judicial economy favors waiting for the New Jersey court to determine who owns the company. GeLab appealed the stay.The United States Court of Appeals for the Seventh Circuit affirmed the district court's decision to stay the proceedings. The court found that the federal and state cases were parallel as they involved substantially the same parties litigating substantially the same issues. The court also found that exceptional circumstances warranted abstention, with at least seven factors supporting the district court's decision. These factors included the inconvenience of the federal forum, the desirability of avoiding piecemeal litigation, the order in which jurisdiction was obtained by the concurrent fora, the source of governing law, the adequacy of state-court action to protect the federal plaintiff's rights, the relative progress of state and federal proceedings, and the availability of concurrent jurisdiction. View "GeLab Cosmetics LLC v. Zhuhai Aobo Cosmetics Co., Ltd." on Justia Law

This case involves a dispute over unpaid rent for a department store in an Illinois mall. The store was operated by CPS Partnership, which leased the retail space from WEC 98C-3 LLC. Saks Inc. guaranteed that it would pay the rent if CPS could not. However, when CPS stopped paying rent, Saks did not make any payments to WEC. This led to WEC defaulting on its mortgage, and the property was purchased by 4 Stratford Square Mall Holdings, LLC (“Stratford”) at a foreclosure auction. Initially, WEC sued Saks for damages. Later, Stratford intervened with its own claim for damages. The district court ruled only on Stratford’s claim for unpaid rent, finding that it was entitled to payment from Saks.The district court's decision was appealed to the United States Court of Appeals for the Seventh Circuit. Saks argued that Stratford lacked standing to sue, that the district court erred in certifying its judgment for immediate appeal, and that the district court erred in rejecting Saks’s affirmative defenses. The appellate court found that Stratford did have standing to sue Saks, and the district court properly certified its judgment for appeal. On the merits, the appellate court concluded that Saks could not mount any of its desired defenses as it had waived its right to present affirmative defenses to liability in the guaranty that it signed. Therefore, the appellate court affirmed the district court’s judgment. View "WEC 98C-3 LLC v. SFA Holdings Inc." on Justia Law

The case involves William Campbell, who, along with his cousin, burglarized an Indiana home and stole over 25 firearms. They sold these firearms to another person. Law enforcement was able to recover eight of the stolen firearms, but the rest remain unaccounted for. Campbell was indicted for possessing the eight recovered firearms as a felon, in violation of 18 U.S.C. § 922(g)(1). He pleaded guilty and was sentenced to 96 months of imprisonment by the district court. The court, in its explanation for the sentence, remarked that the missing guns were likely in the hands of other felons, as they are the people who buy stolen guns.The district court adopted the presentence investigation report, which calculated an adjusted offense level of 29 and a criminal history category of III, resulting in an advisory Guidelines range of 108 to 120 months’ imprisonment. The court, however, decided to sentence Campbell to a below-Guidelines sentence of 96 months’ imprisonment. The court explained its sentence with reference to the 18 U.S.C. § 3553(a) factors, discussing the mitigating and aggravating circumstances of Campbell’s case.On appeal to the United States Court of Appeals for the Seventh Circuit, Campbell argued that the district court's statement about the missing guns being likely in the hands of other felons amounted to impermissible speculation, requiring the sentence to be vacated. The appellate court, however, disagreed. It reviewed the procedural challenge de novo and found that the district court did not rely on speculative or inaccurate information in imposing the sentence. The court's concern was that the firearms are now unaccounted for, somewhere in the public, where authorities cannot track their owners and whereabouts. The judgment of the district court was affirmed. View "USA v. Campbell" on Justia Law

The case involves Appvion, Inc., a Wisconsin-based paper company, which was sold to its employees through an Employee Stock Ownership Plan (ESOP) in 2001. The company declared bankruptcy in 2017. Grant Lyon, acting on behalf of the ESOP, filed a lawsuit against various individuals and corporations, alleging that they fraudulently inflated the price of Appvion in 2001 and that the price remained inflated until Appvion’s bankruptcy. The district court dismissed almost all the claims.On appeal, the United States Court of Appeals for the Seventh Circuit affirmed the dismissal of some claims and reversed and remanded others. The court affirmed the dismissal of claims related to actions before November 26, 2012, as they were time-barred under the Employee Retirement Income Security Act (ERISA). However, the court reversed the dismissal of claims related to actions after November 26, 2012, finding that the plaintiff had adequately alleged that the defendants breached their fiduciary duties under ERISA by failing to ensure that the company's valuations were sound. The court also reversed the dismissal of claims alleging that the defendants engaged in prohibited transactions and co-fiduciary liability. The court affirmed the dismissal of state-law claims against the defendants, finding them preempted by ERISA. View "Appvion, Inc. Retirement Savings and Employee Stock Ownership Plan v. Buth" on Justia Law

The plaintiff, Richard Rodgers, a prisoner with a history of scoliosis and back pain, had steel rods implanted in his back prior to his incarceration. During his time in prison, the rods broke, but this went undetected for over a year due to two radiologists misreading his x-rays. The prison's primary care physician, Dr. William Rankin, discovered the broken rods and arranged for corrective surgery. Rodgers sued the radiologists and Dr. Rankin, alleging violation of his Eighth Amendment rights.The district court dismissed Rodgers' claims against the radiologists, finding that he did not state a viable constitutional claim against them. The court allowed Rodgers to proceed against Dr. Rankin but eventually granted summary judgment in his favor. The court found that Rodgers had not provided evidence that would allow a reasonable jury to find that Dr. Rankin had violated the Eighth Amendment by acting with deliberate indifference toward Rodgers' serious medical condition.The United States Court of Appeals for the Seventh Circuit affirmed the district court's judgment. The court agreed that Rodgers' allegations against the radiologists amounted to no more than negligence, which is insufficient to state a viable Eighth Amendment claim. Regarding Dr. Rankin, the court found that the evidence would not support a reasonable finding that he acted with deliberate indifference to Rodgers' serious medical condition. The court noted that Dr. Rankin was the one who discovered the radiologists' errors and arranged for Rodgers' corrective surgery. View "Rodgers v. Rankin" on Justia Law

In October 2019, Randall Craft pleaded guilty to one count of conspiracy to distribute over fifty grams of methamphetamine. He was sentenced to 150 months in prison and five years of supervised release. The district court applied two sentencing enhancements: one for maintaining a premises for the purpose of manufacturing or distributing a controlled substance, and another for Craft's role as a manager or supervisor of the scheme.The district court's decision was appealed to the United States Court of Appeals for the Seventh Circuit. The appellate court found that the district court erred in applying the premises enhancement, as the record did not support the conclusion that Craft used his home for the primary or principal purpose of manufacturing or distributing drugs. However, the court agreed with the district court's application of the two-level role enhancement, given Craft’s extensive role in the conspiracy.Therefore, the United States Court of Appeals for the Seventh Circuit vacated Craft’s sentence and remanded his case to the district court for resentencing, taking into account the appellate court's findings regarding the two sentencing enhancements. View "USA v. Craft" on Justia Law

The case involves a class action lawsuit brought against the Illinois Department of Corrections (IDOC) by four parents who were convicted of sex offenses and were on mandatory supervised release (MSR). The plaintiffs challenged an IDOC policy that restricts contact between a parent convicted of a sex offense and their minor child while the parent is on MSR. The plaintiffs argued that this policy violates their Fourteenth Amendment rights to procedural and substantive due process.The district court upheld the policy, with two exceptions. It ruled that the policy's ban on written communications was unconstitutional and that IDOC must allow a parent to submit a written communication addressed to their child for review and decision within seven calendar days. The plaintiffs appealed, challenging the policy's restrictions on phone and in-person contact.The United States Court of Appeals for the Seventh Circuit affirmed in part and reversed in part. The court agreed with the district court that the policy does not violate procedural due process. However, it held that the policy's ban on phone contact violates substantive due process. The court found that call monitoring is a ready alternative to the phone-contact ban that accommodates the plaintiffs’ right to enjoy the companionship of their children at a de minimis cost to IDOC’s penological interests. View "Montoya v. Jeffreys" on Justia Law

The case involves Songie Adebiyi, a former Vice President of Student Services at South Suburban College in Illinois, who was terminated in 2019 due to alleged performance issues. Adebiyi claimed that her termination was in retaliation for filing a charge with the United States Equal Employment Opportunity Commission and the Illinois Department of Human Rights. She sued the college and its president, alleging racial discrimination and retaliation under 42 U.S.C. § 1981 and Title VII of the Civil Rights Act of 1964, as well as breach of contract.The United States District Court for the Northern District of Illinois granted summary judgment to the college and its president, ruling that Adebiyi failed to show a causal link between her charge of discrimination and her termination. The court found that the evidence did not support Adebiyi’s retaliation claim. Adebiyi appealed the decision, arguing that the district court erred in dismissing her Title VII retaliation claim and abused its discretion when it denied her motion to amend the complaint and seek more discovery.The United States Court of Appeals for the Seventh Circuit affirmed the judgment of the district court. The appellate court agreed with the lower court's finding that Adebiyi failed to demonstrate a causal link between her protected activity and the adverse employment action. The court found no evidence of pretext in the college's reasons for termination or suspicious timing between Adebiyi's filing of her EEOC and IDHR charge and her termination. The court also found no abuse of discretion in the district court's denial of Adebiyi's motion to file an amended complaint and take additional discovery. View "Adebiyi v. South Suburban College" on Justia Law