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

Decedent was arrested on June 10, 2006, and pronounced dead at about 1:30 a.m. on June 12. She died of heart arrhythmia while in lockup. The evidence showed that she experienced severe abdominal pain throughout her confinement and that officers did not respond to pleas for help. A jury found that four police officers violated the Illinois Wrongful Death Act 740 ILCS 180, which requires proof of negligence, and the federal Constitution, 42 U.S.C. 1983, which requires proof of intentional wrong-doing or deliberate indifference to a serious medical need, by allowing decedent to suffer untreated pain. The award was $5,000,000 in compensatory and $4,000 in punitive damages. The Seventh Circuit affirmed as to liability, but vacated and remanded the award. The district court erred in excluding evidence of the decedent's addiction and criminal history to show her life prospects, relevant to calculation of damages.

Based on a scheme for laundering drug money, defendants were convicted of conspiring to engage in monetary transactions in criminally derived property (18 U.S.C. 1956); one was additionally convicted of engaging in a monetary transaction in criminally derived property(18 U.S.C. 1957). The Seventh Circuit affirmed on the conspiracy count, which was supported by a "plethora" of evidence, but reversed on the second. The transaction triggering the Sect. 1957 violation occurred when a defendant handed over $8,000 of drug cash to purchase property, not when that property was sold for about $47,000; the transaction involved less than the $10,000 minimum the statute requires. The judge properly instructed the jury concerning the duration of a conspiracy and the meaning of "knowingly" and properly refused to allow the defense to address the statute of limitations to the jury.

The company closed paper mills and eliminated a health-care subsidy for retirees. The union filed suit in Ohio under the Labor Management Relations Act, 29 U.S.C. 185, and the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1132. The company filed a declaratory judgment suit in Wisconsin; the district court dismissed for lack of jurisdiction. The Seventh Circuit vacated and remanded. Although the suit does not seek equitable relief as described in Sect. 502 of ERISA, Sect. 2201 does authorize declaratory relief. The court further reasoned that the district court acknowledged its jurisdiction over the LMRA suit and that the union's suit came within the 502 grant of jurisdiction, so this mirror-image suit by the planâs sponsor also is within federal subject-matter jurisdiction. In dismissing the Wisconsin litigation, the district judge assumed that the controversy would be resolved in Ohio. That is no longer true because the union mistakenly named a parent company that was not a party to the collective bargaining agreements; the case has been dismissed.

After being diagnosed with fibromyalgia, chronic pain, anxiety, and depression, plaintiff was awarded long-term disability benefits under an employee benefit plan issued and administered by defendant. Benefits were discontinued about 24 months later, when defendant determined that plaintiff had received all to which she was entitled under the planâs self-reported symptoms limitation. Because plaintiff had retroactively received social security benefits, defendant also sought to recoup equivalent overpayments as provided by the plan. The district court dismissed. The Seventh Circuit reversed in part and remanded for reinstatement. The self-reported symptom limitation violates ERISA, 29 U.S.C., 1022; the policy sets out that long-term benefits will be discontinued after 24 months if disability is due to mental illness or substance abuse, but does not mention that the time limitation applies if a participantâs disability is based primarily on self-reported symptoms. The Social Security Act does not bar recovery of overpayments occasioned by receipt of social security benefits.

Plaintiffs, 23 Liberian children, charge defendant with using hazardous child labor on its rubber plantation in violation of customary international law. The Alien Tort Statute, 28 U.S.C. 1350, confers on the federal courts jurisdiction over "any civil action by an alien for a tort only, committed in violation of the law of nations or a treaty of the United States." The district court dismissed. The Seventh Circuit affirmed, despite disagreeing with the district court holding that a corporation cannot be held liable under the statute. The court also stated that the plaintiffs were not required to exhaust remedies in which alleged violations occurred. Plaintiffs did not establish an adequate basis for inferring a violation of customary international law; the company does not employ children, they work to help their parents meet quotas, and there was no evidence about work expectations for Liberian children living off the plantation.

Defendant is one of several investors (underwriters) in a mortgage bankers blanket bond issued to plaintiff to insure against financial loss resulting from employee misconduct. One of plaintiff's employees engaged in a scheme by which, for a kickback, he caused plaintiff to fund mortgages below its standards. Not knowing the loans were substandard, plaintiff sold them, warranting that they met its standards. Plaintiff was forced to repurchase the loans. The underwriters denied the claim. The district court dismissed a suit, finding that the bond did not cover the loss. The Seventh Circuit affirmed. The fidelity bond at issue contains direct-loss causation language. A financial loss resulting from contract liability to third parties is not directly caused by employee misconduct, even if employee misconduct is the source of the contract liability. Plaintiff's loss resulted from its contractual repurchase obligations; the employee misconduct did not directly cause the eventual financial loss. In addition, a specific exclusion in the bond bars coverage for losses resulting from loan-repurchase obligations.

A citizen of Illinois brought personal-injury claims against the driver of a tractor-trailer and his employer, citizens of Indiana, shortly before expiration of the limitations period. Service of process on the employer occurred eight months later. After the driver notified the district court that he had filed for Chapter 13 bankruptcy, the district court stayed the case as to the driver, as required by the Bankruptcy Code, then dismissed the case against the employer with prejudice, finding that plaintiff failed to exercise reasonable diligence in serving process. The Seventh Circuit dismissed for lack of jurisdiction; dismissal of claims against the employer was not a final judgment because plaintiff continues to seek adjudication of his claims against the driver. The court noted that plaintiff has taken different positions with respect to the viability of the claim against the driver and has filed a state court suit against the driver.

Charged with conspiracy to possess and distribute at least five kilograms of cocaine and at least fifty grams of crack cocaine (21 U.S.C. 841), and for possession of a firearm in furtherance of a drug trafficking offense (18 U.S.C. 924), defendant retained private counsel. After receiving notice of a potential conflict of interests based on the possibility that the attorney could be called as a witness with respect to how he received payment, the court disqualified the attorney and appointed counsel. Defendant was sentenced to life imprisonment on the cocaine offenses and to 60 months for the firearm. The Seventh Circuit affirmed, rejecting a Sixth Amendment claim. The disqualification of counsel was not plain error. The prosecutor's closing argument did not amount to an impermissible "once a drug dealer always a drug dealer" statement, but simply questioned the defendant's credibility and character.

Subdivision residents claimed that a retention pond's problems with algae, mosquitoes, and flooding would be exacerbated by proposed expansion of the subdivision. The residents, most of whom are African-American, claimed that the town was unresponsive to their concerns, but responded to similar concerns from white residents of another subdivision. The district court rejected claims under 42 U.S.C. 1983. The Seventh Circuit affirmed, as modified. The residents did not have any evidence that a subdivision, similar except for the race of the residents, was treated differently, but relied solely on allegations. State law claims should have been dismissed, not remanded.

Convicted of conspiracy to possess with intent to distribute cocaine base (21 U.S.C. 841(a)(1) and 846, and 18 U.S.C. 2) and of distribution of cocaine base (21 U.S.C. 841(a)(1)), defendant was sentenced to the 240-month mandatory minimum for offenses involving 50 grams or more of a mixture containing cocaine base. The Seventh Circuit affirmed. Admission of testimony concerning gang affiliation was necessary to enable the jury to understand other testimony and was probative of the conspiracy issue. Any error would have been harmless in light of the overwhelming evidence of guilt. There was also sufficient evidence to support a finding of that cocaine base was involved; the term "cocaine base," as used in 841(b)(1), means not just "crack cocaine," but cocaine in its chemically basic form.