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

A jury awarded compensatory and punitive damages under 42 U.S.C. 1983 and 20 U.S.C. 1681 for failure by defendant,a middle school principal, to prevent sexual abuse of several female students by their band teacher. The band teacher pled guilty to multiple counts of aggravated kidnapping and aggravated criminal sexual abuse. The Seventh Circuit affirmed the awards. The awards of compensatory damages reflected consideration of the harm to each individual plaintiff; the award of punitive damages was justified in light of defendant's failure to act.

Defendant was convicted of eight counts of filing a false income tax return (26 U.S.C. 7206(1)). The Seventh Circuit affirmed. Although the district court applied the wrong standard in determining whether defendant could assert good faith, the error was harmless given overwhelming evidence of a lack of good faith. The court properly held that he could not present evidence of good faith unless he waived his Fifth Amendment rights and testified and relied on acquitted conduct concerning his sisters' tax returns in determining the sentence to be imposed.

Plaintiff and her husband divorced in 2002. He was an executive of defendant, a closely held corporation, a supermarket chain. The divorce decree transferred to wife some of his stock "until such time as [he] is first able to sell" them. He was to pay alimony until 2012 unless he sold the shares sooner and forwarded proceeds to wife. Wife claims that defendant's financial officer told her falsely that husband's shares could be sold only if he died, ceased to be employed by defendant, or ceased being employed in a position that entitled him to buy company stock. She claims she was induced to accept stock in lieu of a cash settlement and to agree that alimony payments would terminate as soon as husband was allowed to sell the stock. Less than two weeks after the earliest day on which husband could stop paying alimony, the company agreed to buy back the shares. The price was $908,000. Wife lost state court litigation and surrendered the shares in exchange $712,000. The district court dismissed, as untimely, wife's suit under the Securities Exchange Act of 1934, 15 U.S.C. 78j(b), and SEC Rule 10b-5. The Seventh Circuit affirmed, finding that any violation occurred with the 2002 misrepresentation, more than five years before suit was filed.

The district court certified a class in a suit under the Telephone Consumer Protection Act (as amended by the Junk Fax Prevention Act of 2005), 47 U.S.C. 227. The Seventh Circuit vacated and remanded for the court re-evaluate the gravity of class counsel’s misconduct and its implications for the likelihood that class counsel will adequately represent the class. The district court concluded that "only the most egregious misconduct" by the law firm representing the class "could ever arguably justify denial of class status." The court must weigh the firm's misleading statements and the risk that the firm is in this case purely for itself and not for the benefits that the suit if successful might confer on the class.

Petitioner sued under 42 U.S.C. 1983, claiming that Indiana prison officials violently roused him from his cell and in the process broke his arm. After a second remand, the district court resolved the factual disputes in favor of defendants and dismissed the suit for failure to exhaust administrative remedies by filing a complaint within 48 hours. The Seventh Circuit affirmed, finding that it was not convinced that it was clear error for the district court to disbelieve petitioner's account of events and that petitioner's own words belie any suggestion that he exhausted his administrative remedies.

After a four-year investigation by the Drug Enforcement Administration and Chicago Police Department, a grand jury indicted defendant and six codefendants for organized distribution of controlled substances. Defendant was convicted of conspiracy to distribute a controlled substance, 21 U.S.C. 846, and using a communication facility (a telephone) to distribute a controlled substance, 21 U.S.C. 843(b) and sentenced to 300 months, followed by 10 years of supervised release. The court imposed a fine of $1,000, to be paid through the Inmate Financial Responsibility Program. The Seventh Circuit affirmed, but modified the sentence because IFRP is voluntary. The district court was within its discretion in giving an instruction relating to the government’s use of deceptive investigative practices.

Defendant was convicted of tax evasion, a felony (26 U.S.C. 7201), and failure to file a tax return for the 2004 tax year, a misdemeanor (26 U.S.C. 7203). The Seventh Circuit affirmed in part. Defendant waived his claim under the Speedy Trial Act (18 U.S.C. 3162) by failing to move to dismiss the indictment prior to trial. Defendant presented no support for arguing a Sixth Amendment violation caused by the pretrial delay and waived a multiplicity challenge to his indictment. The convictions were supported by substantial evidence and the sentence was reasonable. The district court has authority to impose restitution as a condition of supervised release; the court vacated and remanded for a determination of whether it had done so.

Defendant was the pharmacy director of a medical center and had influence over decisions concerning which drugs to stock. Levato was the local business manager of a pharmaceutical company. Levato agreed to pay defendant $18,000 not to switch away from his company's drug, and made computer entries recording nine nonexistent speeches given by defendant for the pharmaceutical company; defendant later received another $14,000 for more fictitious speeches. After investigation by an FDA agent, Levato and defendant were indicted. Levato plead guilty and testified against defendant. Defendant was convicted of solicitation and receipt of kickbacks and sentenced to 22 months in prison. The Seventh Circuit affirmed. Memoranda prepared by the Department of Health and Human Services, discovered by the prosecution after trial, did not constitute exculpatory material withheld by the prosecution. The court noted that the documents would have strengthened the prosecution case.

Plaintiff provided day care in his home. When a sick child collapsed, he performed CPR and called 911. Police arrested plaintiff for aggravated battery and falsely told him that a doctor had stated that the baby's injuries were caused by shaking. Plaintiff signed a waiver, admitted shaking the baby, but stated that he did not cause the injury. The baby died. Plaintiff was charged with murder. The case fell apart when it came to light that the child had been sick and feverish and that the child's mother had a history of violence and abuse. Charges were dismissed. Plaintiff sued five officers and the village (42 U.S.C. 1983), alleging, among other things, that one of the officers shielded the mother and provided doctors with false information because of attraction to the mother. The district court granted summary judgment in favor of the officers and the village. The Seventh Circuit affirmed in part. The court reversed dismissal of a claim of wrongful interrogation against officers, who continued to "badger" plaintiff and employ trickery after he invoked his right to a lawyer. The court reversed dismissal of claims of false arrest and malicious prosecution for murder against the officer who was allegedly protecting the child's mother.

Plaintiff was banned from the senior center because she repeatedly violated the code of conduct by yelling, making threats, and making frivolous complaints to police. She sued the city under 42 U.S.C. 1983 claiming violation of free-speech and due-process rights and that the code is facially unconstitutional. A magistrate judge granted summary judgment for the city. The Seventh Circuit affirmed, noting that the director and board of the center are not final policymakers for purposes of enforcing the code of conduct. Under state and local law, plaintiff could ask the city council to overturn the expulsion. She had been informed of her right to appeal and failure to do so precludes municipal liability to the extent that claimed constitutional violations stem from the ban. The court stated that it was not imposing a requirement of exhaustion of administrative remedies under Section 1983, but recognizing the council's role as policymaker. The board has authority to make rules for the center, so the code of conduct itself is city policy. The court rejected a facial challenge to the code, which consists of reasonable "time, place, or manner" restrictions and is neither unconstitutionally vague nor overbroad.