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

An Indiana inmate, alleging mistreatement during a shakedown, was denied permission to proceed in forma pauperis because his three previous suits had been dismissed (28 U.S.C. 1915(g)). The Seventh Circuit reversed dismissal of his suit for failure to pay fees. His previous filings had been dismissed for failure to prosecute, after the judge deemed his allegations unintelligible, and not as frivolous, malicious, or failing to state a claim. That they might have or even should have been dismissed on those grounds is irrelevant.

The defined-contribution pension plan allows participants to choose among 32 options, including 24 mutual funds that are open to the public. These funds are no-load vehicles that do not charge a fee to buy or sell shares. Purchases and sales occur at net asset value, calculated daily. A no-load fund covers its expenses by deducting them from the assets under management. Plan participants contend that administrators violated fiduciary duties under the Employee Retirement Income Security Act, 29 U.S.C. 1104(a), by offering retail mutual funds, in which participants get the same terms (and thus bear the same expenses) as the general public and by requiring participants to bear the those expenses themselves, rather than having the plan cover costs. Plaintiffs contend that there should be access to wholesale or institutional investment vehicles. The district court dismissed. The Seventh Circuit affirmed. The plan offers a menu of high-expense, high-risk, and potentially high-return funds, together with low-expense index funds that track the market, and low-expense, low-risk, modest-return bond funds; it leaves the choice to the people most interested in the outcome. The district court acted within its discretion in awarding about $42,000 in costs.

In attempting to enroll his infant daughter, a covered employee failed to complete parts of the form indicating whether the child resided with employee, was dependent upon employee for more than 50 percent support and maintenance, and whether the child qualified to be claimed as a tax exemption on employee's federal tax return. The plan made several inquiries before sending a notice that coverage was denied. The employee did not appeal. The plan sued under the Employee Retirement Income Security Act , 29 U.S.C. 1001, to recover $472,357.84 paid to the medical college and $1,199,538.58 paid to the hospital on behalf of the child. The district court dismissed. The Seventh Circuit affirmed dismissal of the ERISA claim. The plan reserves the right to recover against "covered persons" if it has paid them or any other party on their behalf. Neither the treating entities nor the child are covered persons. Because the plan is not implicated, state law claims were not preempted; the court reversed dismissal of those claims. Plaintiffs' position was not unreasonable; the district court abused its discretion in awarding attorney fees.

Returning to work after 12 weeks of FMLA leave (29 U.S.C. 2615) to receive treatment for gastroesophageal reflux, employee was assigned to a different position. He received the same pay and benefits, but considered the change a demotion. Weeks later, he took additional leave for esophageal surgery. A few months later, he took leave to undergo total esophagectomy. He never returned and was terminated. He alleged that the esophagectomy was necessary because a supervisor caused him to suffer stress, high blood pressure, and reflux, which exacerbated his pre-existing medical condition. Following a 2008 Seventh Circuit decision, employee waived all claims except for retaliation by way of harassment between his second and third leaves. The judge barred evidence of a causal connection between the medical conditions and employer's alleged misconduct and held that employee exhausted his FLMA leave during his first leave. The Seventh Circuit affirmed. The cause of an injury is irrelevant under the FMLA, and, in any case, the employee exhausted his FMLA rights before the alleged misconduct. Another employee, who accepted a settlement on an FMLA retaliation claim, was not entitled to an award of attorney's fees that would be triggered by a judgment.

In 2004 HD contracted with plaintiff, to develop an inventory classification system, called a taxonomy,for HD’s database. Plaintiff would own the intellectual-property rights and would license HD to use it at no-cost as long as plaintiff remained HD's data-pool vendor and HD continued paying for services. In 2008 HD began to develop an in-house database, incorporating the taxonomy that plaintiff had created. Plaintiff learned of the plan and registered a copyright. HD sent notice terminating the relationship, with a check for $100,000 to purchase a perpetual license, pursuant to the contract. HD notified suppliers to transmit their product data to its in-house system rather than to plaintiff, which returned the check and filed suit. The district judge dismissed. The Seventh Circuit affirmed, concluding that HD did not violate copyright law and that the case did not belong in federal court. HD acted in accordance with its contract rights.

In 2007 employee retired when the steel plant, at which he had worked for 42 years, shut down. Under a plan negotiated by the union, his pension payment, without any offset, was $688.13 a month. Employee was told that payment of his pension would be deferred for more than 10 years because the plan required that employee pay back workers' compensation settlements that he had received after sustaining on-the-job injuries in 2005 and 2006. The plan refers to offset for payments for "disability in the nature of a permanent disability for which the Company is liable." The district court entered judgment for the employee. The Seventh Circuit reversed. The committee's decision was within its discretion; the plan's specific mention of workers' compensation supports its characterization.

Debtor, a limited liability company, was formed by five members, who made up a Board of Managers. Forte had a 12% interest. After his requests to inspect of business records were denied, Forte sued Lynch, the member with the highest percentage interest. In the six months before filing for Chapter 11 bankruptcy, the company paid Forte $215,000 as part of the settlement. The bankruptcy court found that Forte qualified as an "insider" (11 U.S.C. 547(b)(4)(B)) and that the trustee could void and recover the transfers. The district court and Seventh Circuit affirmed. Insider status is not just a matter of title; Forte retained voting rights in the company, held a formal position on the Board, and did not resign until after he received the transferred funds.

Defendant, a non-profit company that blocks unwanted bulk e-mail, maintains a list of internet protocol addresses of spam distributors, which internet service providers use to block e-mails originating from those addresses. Plaintiff, a now-defunct internet marketing company, sued for tortious interference with contractual relations, tortious interference with prospective economic advantage, and defamation. The district court granted default judgment and awarded $11,715,000 in damages. When defendant changed strategy, the Seventh Circuit affirmed default judgment but vacated the award. On remand, the court awarded a total of $27,002. The Seventh Circuit vacated and remanded with instructions to enter judgment in the nominal amount of three dollars. The district court properly struck most of plaintiff's evidence, either as an appropriate discovery sanction or for proper procedural reasons. The evidence did not support an award of $27,000 in actual damages because plaintiff based its damage calculations on lost revenues rather than lost profits.

Citizens of Jordan received visitor visas and came to the U.S. in the 1990s. The family stayed beyond the expiration of the visas because a child born in the U.S. had health problems. Wife was told that, because of rumors of adultery spread by her sister-in-law, wife's brother planned to kill her when she returned to Jordan in order to restore the family's honor. An immigration judge denied asylum and other relief and the BIA affirmed. The Seventh Circuit reversed. Withholding of removal is mandatory if an applicant establishes that it is more likely than not that she would be persecuted in the country of removal because of race, religion, nationality, membership in a particular social group, or political opinion, 8 U.S.C. 1231(b)(3). To obtain protection under the Convention Against Torture, one must show that it is more likely than not that one would be tortured if removed. Wife is a member of the group of women in Jordan who have, allegedly, flouted moral norms, and who face a high risk of honor killing. It is more likely than not that brother will severely harm or murder wife if she is returned. The agency ignored strong evidence of governmental toleration of, or indifference to, honor crimes.

A longtime employee of the Illinois Secretary of State's office, the only African-American on a crew of 27 maintenance workers, was fired after incidents concerning his knowledge of private use of state property and an off-the-books leave policy. He was reinstated after arbitration. He brought suit under the Civil Rights Act of 1964, 42 U.S.C. 2000e and under 42 U.S.C. 1981 and 1983, claiming that two white managers targeted him because he is black. The district court granted summary judgment for the defendants. The Seventh Circuit vacated, based on evidence that the employee engaged in the same conduct as his supervisor but was disciplined more harshly. Formal job titles and rank are not dispositive; an employer cannot insulate itself from claims of racial discrimination by making formalistic distinctions between employees.