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

A self-funded, multiemployer health and welfare fund that provides benefits nationwide challenged an Arkansas regulation, Rule 128, which applies to health plans operating in that state. The regulation has two main features: it authorizes the Arkansas Insurance Commissioner to require health plans to pay additional dispensing fees to pharmacies if existing payments are deemed not “fair and reasonable,” and it requires health plans to report certain compensation-related information. The fund, which covers participants in Arkansas, argued that the Employee Retirement Income Security Act of 1974 (ERISA) preempts both aspects of Rule 128 because they interfere with uniform plan administration and reporting requirements set by federal law.The United States District Court for the Northern District of Illinois, Eastern Division, heard the fund’s claims and granted the Insurance Commissioner’s motion to dismiss. The court held that the Dispensing Fee Requirement regulated only the cost of benefits and did not dictate substantive plan choices, relying on the Supreme Court’s decision in Rutledge v. Pharmaceutical Care Management Association. The court also found that the Reporting Requirement was merely incidental to enforcing cost regulation and did not constitute an impermissible intrusion into plan administration under ERISA, as discussed in Gobeille v. Liberty Mutual Insurance Company.On appeal, the United States Court of Appeals for the Seventh Circuit reviewed the district court’s dismissal de novo. The Seventh Circuit affirmed the dismissal, holding that ERISA does not preempt Rule 128’s Dispensing Fee Requirement because it is a permissible cost regulation and does not force plans to adopt a specific benefit structure. The court also concluded that the Reporting Requirement is incidental and necessary to enforce the cost regulation, and thus does not impermissibly intrude upon ERISA’s uniform reporting scheme. View "Central States SE & SW Areas Health & Welfare Fund v. McClain" on Justia Law

The defendant was charged with producing, distributing, and possessing AI-generated images that depicted minors engaged in sexually explicit conduct, as well as transferring such material to a minor. The images were alleged to be created using Stable Diffusion, a text-to-image generative AI program, and did not involve real children. Law enforcement linked the defendant to these images after a report by Meta Platforms, which found the material sent to a minor on Instagram. A search of the defendant’s devices revealed hundreds of similar AI-generated images.In the United States District Court for the Western District of Wisconsin, the defendant moved to dismiss the count charging him with knowing possession of obscene virtual child sexual abuse material (CSAM) in violation of 18 U.S.C. § 1466A(b)(1). The district court granted the motion as to the possession charge, concluding that the statute was unconstitutional as applied in this context. The court reasoned that, under Stanley v. Georgia, individuals have a First Amendment right to possess obscenity in their homes, and that this right extends to virtual CSAM, especially in light of the Supreme Court’s decision in Ashcroft v. Free Speech Coalition, which distinguished virtual CSAM from material involving actual children. The court left the production and distribution charges intact.The United States Court of Appeals for the Seventh Circuit reviewed the district court’s dismissal de novo. The Seventh Circuit held that Supreme Court precedent—specifically Stanley v. Georgia and Ashcroft v. Free Speech Coalition—controls the as-applied challenge. The court found that, because the images did not depict real children, the government’s justifications for banning their possession in the home had been expressly rejected by the Supreme Court. Accordingly, the Seventh Circuit affirmed the district court’s judgment, holding that 18 U.S.C. § 1466A(b)(1) is unconstitutional as applied to the defendant’s in-home possession of obscene virtual CSAM. View "USA v Anderegg" on Justia Law

Richard Highbaugh, a Black man aged 60, worked for Exelead, Inc., a pharmaceutical manufacturer, for nearly three decades in various warehouse roles. In 2022, after a vacancy arose for a Materials Manager position, Highbaugh, who had experience as a supervisor and as a Sampling Specialist, expressed interest in the promotion. However, he did not apply during the internal posting period, instead submitting his materials to his supervisor, Aaron Mendez, about two months after the internal posting closed. Mendez ultimately hired an external candidate, a white man in his thirties, citing the external candidate’s experience with larger scale management and skills relevant to the position. Highbaugh believed he was passed over due to his race and age and filed charges with the EEOC before bringing suit.The United States District Court for the Southern District of Indiana granted summary judgment to Exelead. The district court concluded that Highbaugh failed to raise a genuine issue of material fact that Exelead’s stated reason for not promoting him—concerns about his qualifications and suitability for the manager role—was a pretext for discrimination.On appeal, the United States Court of Appeals for the Seventh Circuit reviewed the grant of summary judgment de novo and affirmed the lower court’s decision. The Seventh Circuit held that, even assuming Highbaugh established a prima facie case of discrimination under Title VII, § 1981, and the ADEA, Exelead provided a legitimate, non-discriminatory reason for its decision, and Highbaugh did not produce evidence sufficient for a reasonable jury to find this reason was pretextual. The court found no evidence of shifting or inconsistent explanations, nor that Highbaugh was so much better qualified that discrimination could be inferred. Accordingly, the judgment for Exelead was affirmed. View "Highbaugh v Exelead, Inc." on Justia Law

In September 2020, Microsoft and Google each reported to the National Center for Missing and Exploited Children (NCMEC) that images suspected to be child sexual abuse material (CSAM) were uploaded from the same IP address to their platforms. The images were not viewed by the companies or by NCMEC; instead, they were flagged by automated systems after matching hash values of known CSAM. NCMEC forwarded these reports to the Wisconsin Department of Justice, which traced the IP address to Peter Braun's residence. Special Agent Aaron Koehler viewed the images without a warrant, conducted surveillance, and obtained a prior report from 2015 indicating Braun had been observed chatting online with very young girls. Based on this information, Koehler applied for and obtained a state search warrant for Braun’s home, leading to charges of producing CSAM.The United States District Court for the Eastern District of Wisconsin, after referral to a magistrate judge, granted Braun’s motion to suppress the evidence from the search. The district court found that Agent Koehler’s warrantless viewing of the images was unlawful, and that, excluding his descriptions of the images, the warrant affidavit did not establish probable cause. The court also determined that the good-faith exception to the exclusionary rule did not apply. The government appealed this decision.The United States Court of Appeals for the Seventh Circuit reviewed the case, applying de novo review to legal conclusions and clear error review to factual findings. The Seventh Circuit held that, even without the descriptions of the images obtained from the unlawful search, Agent Koehler’s affidavit contained sufficient information—such as the reliability of the reporting sources, the incriminating file name, and corroborating evidence regarding Braun’s prior behavior—to establish probable cause for the search. The court concluded that the decision to seek the warrant was not prompted by the unlawfully obtained information. Accordingly, the Seventh Circuit reversed the district court’s order suppressing the evidence. View "USA v. Braun" on Justia Law

Merchants Bank of Indiana lent substantial amounts to two entities for the purchase of assisted living facilities in Arkansas and Tennessee. The loans were secured by mortgages on the properties as well as personal guaranties executed by three individuals. When the borrowers defaulted on the loans, Merchants initiated federal lawsuits against the guarantors to collect the outstanding debts and, after dismissing the borrowers from those suits, later began foreclosure actions on the mortgaged properties in state courts. Receivers were appointed for the properties, but Merchants had not recovered the loan amounts.After Merchants moved for summary judgment in the United States District Court for the Southern District of Indiana, the guarantors argued that Indiana’s “One Action” statute (Indiana Code § 32-30-10-10) barred simultaneous suits on the guaranties and foreclosures. The district court, acting on its own, granted summary judgment to the guarantors, finding that the statute applied to guaranties and rendered the waivers in the guaranty contracts unenforceable as contrary to Indiana public policy.On appeal, the United States Court of Appeals for the Seventh Circuit found that the scope of Indiana’s One Action statute and the enforceability of waivers in this context were unsettled under Indiana law. Recognizing the ambiguity and the lack of controlling precedent, the Seventh Circuit certified two questions to the Indiana Supreme Court: whether the statute prohibits a lender from foreclosing while simultaneously suing on guaranties in separate proceedings, and, if so, whether such protections may be waived by guarantors. The Seventh Circuit stayed further proceedings in the case pending the Indiana Supreme Court’s response. View "Merchants Bank of Indiana v. Craik" on Justia Law

An inmate incarcerated at an Indiana prison was twice transported by correctional officers between the facility and a hospital in June 2019. During the first transport, after a medical appointment, the inmate was placed in a van in restraining gear that prevented him from buckling his seatbelt, and the officers refused to buckle it for him. One of the officers then drove the van in a manner the inmate described as reckless, resulting in a sudden stop that threw the inmate to the floor and caused a broken collarbone. The inmate alleged the officers made threatening remarks referencing his prior grievances against staff and later colluded to create consistent incident reports. On the second transport, after surgery, the inmate was buckled in but not placed in the more secure area he requested. Officers drove in a way that jostled his recent injuries, deliberately drove over rough terrain and railroad tracks, and laughed in response to his pain.The United States District Court for the Southern District of Indiana allowed the inmate’s Eighth Amendment claims against three officers to proceed, along with First Amendment retaliation claims. At summary judgment, the district court granted qualified immunity to all three officers on the Eighth Amendment claims, finding that the law was not clearly established for the conduct alleged, and entered judgment for the officers. The court analyzed the claims under both deliberate indifference and excessive force standards, depending on the officer’s role and the facts alleged.On appeal, the United States Court of Appeals for the Seventh Circuit affirmed in part and vacated in part. The court held that the officer who failed to buckle the inmate’s seatbelt and did not intervene during reckless driving on the first transport was not entitled to qualified immunity, as it was clearly established that subjecting a restrained inmate to reckless driving without a seatbelt posed a substantial risk of serious harm. However, the court affirmed summary judgment for the officers involved in the second transport, finding the law was not clearly established that their conduct—though troubling—violated the Eighth Amendment under the specific facts presented. The case against the first officer was remanded for further proceedings. View "Smith v. Price" on Justia Law

A nonprofit organization dedicated to election integrity requested a copy of Wisconsin’s voter registration list, seeking access under the National Voter Registration Act (NVRA). Wisconsin, however, is exempt from the NVRA because it has permitted same-day polling-place registration since before August 1, 1994. The state processed the request under its public-records law, which required redaction of birth dates and imposed a fee of $12,500 due to the size of the list. The organization objected to both the fee and the redactions, arguing that Wisconsin’s exemption from the NVRA was unconstitutional.The United States District Court for the Western District of Wisconsin dismissed the case. The district judge held that the plaintiff’s claims—asserting violations of the “equal state sovereignty” principle from Shelby County v. Holder and the “congruence and proportionality” requirement from City of Boerne v. Flores—were not supported by law. While the judge found that the plaintiff had Article III standing due to the alleged financial injury, he expressed doubt about prudential standing but decided the case on the merits, concluding that neither cited Supreme Court decision undermined the validity of Wisconsin’s exemption.The United States Court of Appeals for the Seventh Circuit reviewed the dismissal de novo. The court agreed that the plaintiff had Article III standing but questioned prudential standing, as the legal theories invoked state, rather than individual, rights. Nonetheless, the court bypassed this issue, holding that the NVRA’s exemption for states like Wisconsin does not violate equal state sovereignty or the congruence and proportionality standard. The court emphasized that the exemption relieves, rather than imposes, federal regulatory burdens and that Congress acted under its Elections Clause authority, making City of Boerne inapplicable. The Seventh Circuit affirmed the district court’s dismissal. View "Public Interest Legal Foundation, Inc. v. Wolfe" on Justia Law

The Village of Schaumburg owns a hotel and convention center that it alleges has defective exterior walls. In February 2022, it initiated a lawsuit in the United States District Court for the Northern District of Illinois, Eastern Division, against several parties for fraud, breach of warranty, and products liability. In November 2022, the Village added Permasteelisa North America, a subcontractor, as a defendant. About eight months later, the Village sought to compel arbitration of its dispute with Permasteelisa, even though it had not previously requested arbitration in its complaint or before filing suit, and the arbitration clause was contained in a contract between Permasteelisa and the general contractor, not the Village directly.The District Court concluded that by filing a lawsuit and then delaying its request for arbitration, the Village presumptively waived any right to arbitrate it might have had. The Village argued that the lawsuit was filed to avoid the statute of limitations expiring, but the District Court responded that the Village should have requested arbitration at the outset or, at the latest, soon after Permasteelisa’s motion to dismiss was filed. The court found that the combination of filing suit and substantial delay amounted to waiver of any right to arbitrate and denied the Village’s motion to compel arbitration.On appeal, the United States Court of Appeals for the Seventh Circuit reviewed the District Court’s decision for abuse of discretion. The appellate court held that the District Court did not err in concluding that the Village waived any right to arbitrate by acting inconsistently with that right through both initiating litigation and delaying the arbitration request. The Seventh Circuit also rejected the argument that a contractual anti-waiver clause could override federal procedural rules governing litigation conduct. The judgment of the District Court was affirmed. View "Village of Schaumburg v Permasteelisa North America" on Justia Law

The plaintiff received two pre-recorded telemarketing calls from a vacation property company, which he alleged were made without his consent in violation of the Telephone Consumer Protection Act. The company had used third-party vendors to conduct a large-scale telemarketing campaign, targeting individuals whose phone numbers had been obtained from opt-in websites. The plaintiff, on behalf of himself and a proposed class, filed suit against the company in April 2019, asserting that these calls violated federal law.In the United States District Court for the Northern District of Illinois, the defendant engaged in extensive litigation over the course of four years. It filed answers with affirmative defenses, participated in class-related discovery, and litigated several motions, including opposing class certification and filing for summary judgment. Notably, the defendant did not assert arbitration as a defense until after the class was certified and significant litigation had occurred. When it finally raised arbitration—claiming that many class members had agreed to arbitrate through opt-in websites—the district court refused to allow the late amendment to add this defense, finding that it was too late and that the right to arbitrate had been waived. The district court later denied the defendant’s motion to compel arbitration, granted summary judgment to the plaintiff and the class, and ordered further settlement negotiations.Upon appeal, the United States Court of Appeals for the Seventh Circuit clarified the appropriate standard of review for orders denying motions to compel arbitration, holding that legal rulings with precedential effect are reviewed de novo, while the ultimate waiver determination is reviewed for clear error. The court further held that a defendant’s conduct prior to class certification is relevant in assessing waiver of the right to arbitrate. Finding no clear error in the district court’s conclusion that the defendant waived its arbitration rights by failing to timely assert them, the Seventh Circuit affirmed the judgment. View "Moore v Club Exploria, LLC" on Justia Law

A pretrial detainee housed in the Milwaukee County Jail alleged that, during a medical emergency involving COVID-19 symptoms, two correctional officers failed to provide adequate medical attention. He claimed that despite using his in-cell intercom to request help for chest pain and shortness of breath, the officers did not respond. Later, a nurse administered a COVID-19 test, but the detainee was never informed of the results, and his condition worsened until he eventually passed out and was hospitalized.After recovering, the detainee followed the jail’s grievance procedure by submitting a grievance through the electronic kiosk, updating it as his symptoms persisted, and eventually receiving a response from jail staff that closed the grievance. He did not appeal the grievance. The detainee later filed a lawsuit under 42 U.S.C. § 1983 in the United States District Court for the Eastern District of Wisconsin, alleging violations of his Fourteenth Amendment rights. Before discovery, the defendants moved for summary judgment, arguing that the detainee failed to exhaust his administrative remedies as required by the Prison Litigation Reform Act (PLRA). The district court granted summary judgment for the defendants, concluding that the detainee did not appeal his grievance and that the remedies were available to him, dismissing his assertion that the process was unavailable.Reviewing the appeal, the United States Court of Appeals for the Seventh Circuit held that a genuine dispute of material fact existed as to whether the jail’s grievance appeals process was actually available to the plaintiff. The Seventh Circuit vacated the district court’s summary judgment, finding that the detainee’s sworn declaration provided sufficient evidence to require further fact-finding, either through an evidentiary hearing or a jury trial if the exhaustion issue is intertwined with the merits. The case was remanded for further proceedings. View "Burns v Polk" on Justia Law