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

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Thermoflex Waukegan, a company that required its hourly workers to use handprints to clock in and out, was sued for allegedly violating the Biometric Information Privacy Act (BIPA) by not obtaining workers' written consent and using a third party to process the data. Thermoflex had multiple insurance policies, including three from Mitsui Sumitomo Insurance, which declined to defend or indemnify Thermoflex, leading to this suit.The district court ruled that an exclusion in the Basic policy made it inapplicable to any claim based on BIPA. The exclusion stated that the insurance did not apply to claims arising out of any access to or disclosure of any person’s or organization’s confidential or personal information. The court found this exclusion straightforward, as BIPA identifies biometric information as confidential.The Excess and Umbrella policy had two parts. Coverage E contained the same exclusions as the Basic policy, and the court agreed with the district court's ruling that it did not apply to claims under BIPA. Coverage U lacked an exclusion relating to nonpublic information. The district court found that none of the three arguably applicable exclusions to Coverage U clearly foreclosed a duty to provide Thermoflex with a defense in the state-court suit.The United States Court of Appeals for the Seventh Circuit affirmed the district court's decision. It agreed with the district court's interpretation of the Basic policy and Coverage E of the Excess and Umbrella policy. It also agreed that the three exclusions to Coverage U did not apply to BIPA. Therefore, it held that Mitsui owed Thermoflex a defense under the Umbrella policy, provided that the limits of another policy that applies to the BIPA claims, plus deductibles, have been exhausted. View "Thermoflex Waukegan, LLC v. Mitsui Sumitomo Insurance USA, Inc." on Justia Law

Posted in: Insurance Law
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The Equal Employment Opportunity Commission (EEOC) brought a Title VII employment discrimination action on behalf of black employees of Village at Hamilton Pointe, LLC, a long-term care facility in Indiana. The EEOC alleged that Hamilton Pointe and Tender Loving Care Management, LLC (TLC), which provides services to Hamilton Pointe, subjected the employees to racial harassment. The district court granted TLC’s motion for summary judgment with respect to some of the employees, ruling that TLC could not be considered an employer under Title VII. The court also granted Hamilton Pointe’s motion for partial summary judgment with respect to the claims of forty employees. Seven remaining employees proceeded to a jury trial, with damages awarded to one employee. The EEOC appealed the grant of summary judgment for TLC and Hamilton Pointe, and the jury’s verdict.The United States Court of Appeals for the Seventh Circuit affirmed the district court's judgment. The court found that the EEOC failed to establish that the employees were subjected to a racially hostile work environment that was so severe or pervasive as to alter the conditions of their employment. The court also found that the EEOC failed to establish that TLC was a joint employer of the claimants. The court emphasized that the federal law governing racial harassment proscribes conduct that is so severe or pervasive as to change the conditions of the victim’s employment, but does not ensure that the worker will have wise and skilled superiors with a sharply honed sense of social justice and a mastery of personnel management skills. View "EEOC v. Village at Hamilton Pointe LLC" on Justia Law

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The case involves Maria and Jose Jimenez, who were involved in an auto accident with Stephen Kiefer. After the accident, the Jimenezes requested $100,000 from Kiefer's auto insurer, Travelers Commercial Insurance Company, to settle their claim against Kiefer. Travelers refused the offer, leading the Jimenezes to sue Kiefer in Illinois court. The Jimenezes and Kiefer entered into an agreement where Kiefer stipulated to a judgment against himself and assigned his rights and claims against Travelers to the Jimenezes. In exchange, the Jimenezes agreed not to execute the judgment against Kiefer personally. The Jimenezes then initiated a citation proceeding against Travelers, seeking to discover whether it held any of Kiefer’s assets.Travelers removed the action to federal court and filed for summary judgment. The district court granted summary judgment for Travelers, finding that Kiefer and the Jimenezes (as his assignees) were entitled to nothing under the insurance policy and had no claim for breach of any duties Travelers owed Kiefer. The Jimenezes appealed this decision.The United States Court of Appeals for the Seventh Circuit affirmed the district court's decision. The court found that the citation proceeding was an independent, removable action. It also agreed with the district court that the Jimenezes, as Kiefer’s assignees, could not recover under the policy in light of the legally responsible provision. The court concluded that Travelers could hold Kiefer to the terms of the policy, and under a strict construction of those terms, Kiefer was not legally responsible for the judgment because the covenant not to execute precluded its enforcement. Therefore, the legally responsible provision bars the Jimenezes’ recovery as Kiefer’s assignees. View "Jimenez v. Travelers Commercial Insurance Company" on Justia Law

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Gustavo Colon, serving a life sentence for engaging in a continuing criminal enterprise (CCE) in violation of 21 U.S.C. § 848(a), appealed the denial of his motion for a reduced sentence under § 404 of the First Step Act of 2018. The district court denied his motion on the grounds that Colon’s CCE conviction was not a “covered offense” under the Act.Previously, Colon was found guilty of conspiring to distribute various drugs, engaging in a CCE, using a telephone in commission of his conspiracy, and distributing cocaine. The sentencing judge vacated Colon’s conspiracy conviction, determining that it violated the double jeopardy clause because conspiracy was a lesser-included offense of the CCE offense of which Colon was also convicted. The judge imposed a life sentence for the CCE conviction. In 2003, this court affirmed Colon’s conviction and sentence.In 2021, Colon moved for a sentence reduction under § 404 of the First Step Act, which allows a court to reduce the sentence of a “covered offense”—that is, an offense that had its statutory penalties modified by the Fair Sentencing Act of 2010. The district judge denied the motion, concluding that Colon’s CCE conviction was not a “covered offense” because the Fair Sentencing Act did not modify 21 U.S.C. § 848(a).The United States Court of Appeals For the Seventh Circuit affirmed the district court's decision. The court concluded that a CCE conviction under § 848(a) is not a “covered offense” under the First Step Act because its penalties—twenty years to life imprisonment—were not altered by the Fair Sentencing Act. Therefore, Colon was not eligible for a sentence reduction under the First Step Act. View "USA v. Colon" on Justia Law

Posted in: Criminal Law
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Donald Artz, an electric distribution controller at WEC Energy Group, retired due to multiple sclerosis (MS) and sought long-term disability benefits from a plan administered by Hartford Life and Accident Insurance Company. Hartford denied his claim, asserting that Artz was not "disabled" within the plan's definition. Artz filed a lawsuit under the Employee Retirement Income Security Act, alleging that Hartford's disability determination was arbitrary and capricious because it misconstrued the plan's terms and failed to provide a reasonable explanation for its decision.The case was initially heard in the United States District Court for the Eastern District of Wisconsin. The district court upheld the denial of benefits at summary judgment, concluding that Artz had placed too much emphasis on the duties of his specific position at WEC rather than the "essential duties" of his job in the general workplace as required by the company’s plan. The court also underscored the independent medical reviews commissioned by Hartford and found the medical evidence supported the conclusion that Artz’s MS did not prevent him from working a standard 40-hour week as a power-distribution engineer.The case was then appealed to the United States Court of Appeals for the Seventh Circuit. The appellate court affirmed the district court's decision, finding that Hartford had communicated rational reasons for its decision based on a fair reading of the plan and Artz’s medical records. The court concluded that the plan administrator provided sufficient process and that the Employee Retirement Income Security Act requires no more. The court noted that while Artz's condition was serious, the evidence did not show that the severity and persistency of his symptoms resulted in functional impairment as defined by the policy. View "Artz v. Hartford Life & Accident Insurance Company" on Justia Law

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This case revolves around a real estate Ponzi scheme run by Jerome and Shaun Cohen through their companies, EquityBuild, Inc. and EquityBuild Finance, LLC (EBF), from 2010 to 2018. The Cohens sold promissory notes to investors, each note representing a fractional interest in a specific real estate property. The properties were mostly located in underdeveloped areas of Chicago and were secured by mortgages. As the scheme became unsustainable, the Cohens began offering opportunities to invest in real estate funds. BC57, LLC, a private lender and investor, lent approximately $5.3 million to EquityBuild, allegedly in exchange for a first mortgage on five properties already owned by EquityBuild and subject to preexisting liens from individual investors.The Securities and Exchange Commission (SEC) filed suit against the Cohens, EquityBuild, and EBF after the scheme collapsed in 2018. A court-appointed receiver developed a plan for the recovery and liquidation of all remaining, recoverable receivership assets. The receiver sold the five properties and now holds the proceeds, over $3 million, pending the resolution of the claims process. The individual investors whose loans BC57’s investment purportedly paid off claim priority to those proceeds, arguing that they never received payment or released their interests, despite the releases signed by Shaun Cohen. BC57 disagrees and asserts that it has priority. The district court awarded priority to the individual investors, finding that the mortgage releases were facially defective and that EBF lacked the authority to execute them.The United States Court of Appeals for the Seventh Circuit affirmed the district court's decision. The court found that under the Illinois Mortgage Act, payment alone does not extinguish any pre-existing interest absent a valid release. The court also found that the releases purportedly executed by EBF were facially invalid. The court concluded that the individual investors maintain their interests in these five properties. View "SEC v. BC57, LLC" on Justia Law

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In 1996, Robert Pope was convicted of murder and sentenced to life imprisonment. He sought post-conviction relief, but his lawyer, Michael J. Backes, abandoned him and failed to take necessary steps to protect Pope's rights. After 14 months of inaction, Pope sought help from Wisconsin's public defender, who informed him that he first needed an extension from the court of appeals. However, the court of appeals denied his request, stating that he had waited too long. Pope then sought relief from the trial court, which also denied his request due to the appellate decision. Despite multiple attempts to reinstate his appeal rights, all were unsuccessful until 2016 when the state acknowledged his right to an appeal.The state court of appeals and the Supreme Court of Wisconsin reversed a 2017 decision granting Pope a new trial due to the absence of a trial transcript, which was not ordered by his lawyer and was later destroyed. The Supreme Court of Wisconsin held that a new trial based on the absence of a transcript is only appropriate if the defendant first makes a "facially valid claim of arguably prejudicial error" that requires a transcript to substantiate. Pope, not being a lawyer and barely remembering the events of 1996, was unable to do so.In the United States Court of Appeals for the Seventh Circuit, Pope filed a petition for collateral review under 28 U.S.C. §2254. The district court issued a conditional writ and directed the state to release Pope unless it set a retrial in motion within six months. The state appealed, leading to a deferral of the deadline. The Court of Appeals affirmed the district court's decision, modifying it to include deadlines for Pope's release on bail and unconditional release if a trial does not start within the specified timeframes. The court noted that Pope had suffered at least two violations of his constitutional rights: the right to assistance of counsel and the right to an appeal equivalent to that available to well-heeled litigants. View "Pope v. Taylor" on Justia Law

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The case revolves around Denis Navratil, his wife Dimple Navratil, and their business, Dimple’s LLC, who filed a lawsuit against the City of Racine and Mayor Cory Mason. The lawsuit was based on several constitutional claims and a defamation claim against Mason. The core of the claims was the city's decision not to grant an emergency grant to Dimple’s LLC because Denis had attended a rally protesting the statewide “Safer at Home Order” that limited public gatherings, travel, and business operations to combat the COVID-19 pandemic. The rally was a violation of the Safer at Home Order and a permit required for holding rallies at the State Capitol had been denied due to the pandemic.The case was initially heard by a magistrate judge who granted summary judgment for both defendants on all claims. The plaintiffs appealed this decision.The United States Court of Appeals for the Seventh Circuit affirmed the lower court's decision. The court found that Denis's attendance at the rally was not protected First Amendment activity because the rally was prohibited by two valid time, place, and manner restrictions—the Safer at Home Order and the state permit requirement. The court also rejected the plaintiffs' equal protection claims, finding no evidence of political animus or similarly situated comparators. The court further dismissed the plaintiffs' due process claims, finding no deprivation of any constitutionally protected property or liberty interest. Lastly, the court found that Mayor Mason's statements were substantially true or pure opinion and thus not actionable under defamation law. View "Denis Navratil v. City of Racine" on Justia Law

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The case involves John Doe, a student who was expelled from Loyola University Chicago after the university concluded that he had engaged in non-consensual sexual activity with Jane Roe, another student. Doe sued the university under Title IX of the Education Amendments Act of 1972 and Illinois contract law, alleging that the university discriminates against men.The United States District Court for the Northern District of Illinois granted summary judgment in favor of Loyola. Doe appealed this decision to the United States Court of Appeals for the Seventh Circuit. The appellate court, however, raised questions about the use of pseudonyms by the parties and the mootness of the case, given that Doe had already graduated from another university and the usual remedy of readmission was not applicable.The Seventh Circuit Court of Appeals remanded the case back to the district court to address these issues. The court questioned whether compensatory damages were an option for Doe, and if not, the case may not be justiciable. The court also questioned the use of pseudonyms, stating that while anonymity may be common in Title IX suits, it must be justified in each case. The court noted that the public has a right to know who is using their courts and that a desire to keep embarrassing information secret does not justify anonymity. The court also raised concerns about whether revealing Doe's identity would indirectly reveal Roe's identity. The court concluded that these issues should be addressed by the district court. View "Doe v. Loyola University Chicago" on Justia Law

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Edward Johnson filed for bankruptcy relief under Chapter 13 and made payments to the bankruptcy trustee, Marilyn O. Marshall, under his proposed repayment plan. However, the bankruptcy court never confirmed his plan due to his inability to address an outstanding loan and his domestic support obligations, and ultimately dismissed his case for unreasonable delay. Before returning Johnson's undisbursed payments, the trustee deducted a percentage fee as compensation. Johnson filed a motion requesting that the trustee disgorge her fee, which the bankruptcy court granted, reasoning that the trustee did not have statutory authority to deduct her fee because Johnson's plan was not confirmed. The trustee appealed this decision.The United States Court of Appeals for the Seventh Circuit reviewed the case de novo. The court analyzed the statutory text and agreed with the Ninth and Tenth Circuits that the United States Bankruptcy Code requires the Chapter 13 trustee to return her fee when the debtor's plan is not confirmed. The court found that neither of the two exceptions in § 1326(a)(2) of the Bankruptcy Code applied to the trustee's fee. The court also rejected the trustee's argument that § 1326(b) authorized her to keep her fee when making pre-confirmation adequate protection payments to creditors, as this provision only addresses payments made after a plan has been confirmed. The court further found that the trustee had no right to keep her fee under 28 U.S.C. § 586(e)(2), which only addresses the source of funds that may be accessed to pay standing trustee fees.The court concluded that the Chapter 13 trustee must return her fee when the debtor's plan is not confirmed, affirming the decision of the bankruptcy court. View "Marshall v. Johnson" on Justia Law