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

Wanting to retire from the trucking business, the owner entered into employment contracts so that the plaintiffs would act as CEO and vice president and a stock purchase agreement. The relationship broke down while they were negotiating a buy-sell agreement. The owner fired the plaintiffs and paid benefits specified in the employment contract. The plaintiffs did not purchase stock or place $750,000 into an escrow, as they were entitled to do to secure their position. The district court ruled in favor of the owner. The Seventh Circuit affirmed, holding that neither party violated a clause in the stock purchase contract that required that they use "best efforts" to enter into a buy-sell agreement. The plaintiffs retained the right to purchase stock, but chose not to do so, which entitled the owner to terminate their employment. The owner took full advantage of his rights under the contracts, but did not exploit the plaintiffs.

Defendants, based in Romania and Chicago, operated an internet scam using E-bay. The Seventh Circuit addressed appeals by defendants convicted of wire fraud (18 U.S.C. 1343). The court upheld a sentence of 63 months imprisonment, at the high end of the guidelines, that did not include credit for time served on related state charges or in custody of immigration officials. The court properly allowed the defendant's attorney to withdraw and declined to appoint new counsel. Another defendant's appeal was barred by his plea agreement. The court properly considered the foreseeability of losses caused by co-schemers in sentencing a third defendant, who also pled guilty to receipt of stolen funds in interstate commerce (18 U.S.C. 2315). With respect to the only defendant to go to trial, the court vacated a conviction for aggravated identity theft (18 U.S.C. 1028A), finding the evidence insufficient to show that he knew that the passport he used belonged to a real person and was not a purely fictitious document; affirmed his conviction for money laundering (18 U.S.C. 1956(h)),stating that the court did not commit plain error in not limiting jury consideration of âproceedsâ to the net profits of the internet fraud scheme; and vacated his 324-month sentence.

The United States has a $60 million judgment against the defendant, who fled the country, for Medicare and Medicaid fraud. The government served a writ of garnishment (28 U.S.C. 3205) against his interest in a Georgia company, which paid secured creditors, liquidated its assets, and placed slightly more than $4 million in escrow for the claim. Creditors of the Georgia company claimed $175,000. The district court ruled in favor of the government because the creditors had not obtained a writ. The Seventh Circuit vacated and remanded, reasoning that the creditors' claim was against the Georgia company, not against the defendant, and that the defendant's equity interest in the company (which was reachable by the government) may have been subordinate to the interests of creditors. The court noted many unanswered questions about the creditors' interest in the company.

In 2004 the bank made a loan secured by a mortgage and all rents from the property. Three years later the borrower defaulted. The IRS filed a tax lien against the property. A receiver, appointed at the request of the bank, rented the property and collected $82,675. The district court held that the IRS lien had priority. The Seventh Circuit reversed and remanded. The bank had perfected its security interest in the rents under Indiana law; 26.U.S.C. 6323 gives such an interest priority over a federal tax lien if the property subject to the interest was "in existence" when the federal tax lien was filed. The property at issue is the real estate, not the rental income, and was in existence at the time the lien was filed.

The Commodity Futures Trading Commission sued operators of commodity trading pools for fraud and related violations of the Commodity Exchange Act. Following earlier proceedings in the Seventh Circuit, the district court entered judgment against remaining defendants. Defendantâs assets of $104 million, 39% of the amount owed the investors in the pools, were placed in the control of a receiver. The district court approved the receiverâs proposed allocation of the assets among the investors, which excluded a claim filed by an Andorran bank as untimely and rejected a valuation claim by GAMAG. The Seventh Circuit affirmed. The district court acted within its discretion in disallowing the bankâs claim, based on the bankâs neglect in pursuing its claim and the difficulty in recalculating the shares of the investors. GAMAGâs claim to be a creditor, rather than a shareholder, was properly rejected; its funds were commingled with and managed with the funds of the other investors and there was no difference in the level of risk.

Plaintiff, assigned to a bridge crew in 2002, informed his supervisor of his fear of heights. He performed most job functions and the crew accommodated him by swapping assignments. In 2006 he was required to work in a lift bucket, unsecured by a safety line. Days later, required to lean over a bridge beam, he suffered a panic attack and was transported by ambulance; it was the only time the plaintiff was unable to complete an assignment. He was placed on non-occupational disability leave. A doctor described him as unable to work in an exposed, extreme position above 20-25 feet. The department denied an accommodation that was supported by psychiatric reports. The plaintiff stated that he would like to knock his supervisor's teeth out; the department discharged him, but, after arbitration, returned him to work. The district court dismissed claims under the Americans With Disabilities Act, 42 U.S.C. 12112. The Seventh Circuit reversed and remanded. The plaintiff offered sufficient evidence from which a reasonable jury could conclude that the department regarded him as precluded from a substantial class of jobs; that the tasks he was unable to perform were not essential to the job and that the requested accommodation was reasonable in light of the crew history of job swapping; and that the reason for discharge was pretextual.

For many years the owners of the original bridal shop allowed family members to operate similar businesses under the same name. The owners sold one of their own shops and the buyer agreed to pay $75,000 per year for the use of the name and marks. When the agreement expired in 2002, the buyer continued to use the name and marks, without paying. The district court dismissed a 2007 claim under the Lanham Act, 15 U.S.C. 1117, 1125. The Seventh Circuit affirmed, holding that the owners abandoned their mark by engaging in "naked licensing:" allowing others to use the mark without exercising reasonable control over the nature and quality of the goods, services, or business on which the mark is used. It was not enough that the owners had confidence in the high quality of the buyer's operation; they retained no control.

The defendant entered a plea of guilty to being a felon in possession of a firearm and was sentenced to 120 months. The Seventh Circuit declined to consider the merits of his appeal because the defendant had waived his right to appeal both the conviction and the sentence in return for the prosecutionâs promise to recommend a sentence at the low end of the guidelines. The prosecution did not make that recommendation because the defendant lied under oath; the defendant'. The defendant had not moved to vacate his plea.

The defendant was convicted of possession of cocaine with intent to distribute. The Seventh Circuit affirmed. The district court correctly conducted a "Batson" inquiry into the intent of the prosecution in using a peremptory challenge to strike an African-American potential juror. The government's assertions that the woman knew two potential witnesses; that her daughter's name was known to law enforcement; that she responded "not applicable" to a question on the juror questionnaire; and that she never looked the government attorneys in the eye included race-neutral justifications. Even if the court abused its discretion in allowing portions of an interview with a witness to be read into evidence, the error was harmless. The evidence was unnecessary to give the jury a complete view of the witnessâs testimony.

The petitioner overstayed her visa. At a removal hearing she asserted a Fifth Amendment claim and would not answer questions, but did not request asylum or indicate any fear of return to Pakistan. Following a removal order, she remained. She moved to reopen her case seven years later. The Board of Immigration Appeals rejected a "changed conditions" argument for asylum. The Seventh Circuit affirmed. The Board correctly assessed both the claim of changed conditions in Pakistan and the merits of the petitioner's case and did not deprive her of due process. Her claims concerning her status as an unmarried, "westernized" woman were too speculative.