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

In a national emergency, the Department of Defense can augment its own capabilities with aircraft drawn from the "Civil Reserve Air Fleet," composed of aircraft owned by commercial carriers but committed voluntarily for use during emergencies. The Fleet is divided into teams of airlines. The Department awards mobilization value points; the more points a member has, the more non-emergency Department air transportation the member can bid on. Points are transferrable within teams. Members of defendant's team have a contract with a one-year term and a separate three-year agreement concerning distribution of business among members. Plaintiff's suit is based on a 2006 three-year agreement in the form of a letter. A change from what members of the team had been doing ultimately led to plaintiff's withdrawal from the team. Plaintiff subsequently went into bankruptcy. Plaintiff won a jury verdict of almost $66 million. The Seventh Circuit reversed, holding that the "agreement" did not include crucial terms and was so indefinite as to be unenforceable. The court also criticized the regression analysis on which the award was calculated. A promissory estoppel claim, while not preempted, failed on the facts.

Under the Multiemployer Pension Plan Amendments Act of 1980, all "trades or businesses" under "common control" are treated as a single employer for purposes of determining withdrawal liability. 29 U.S.C. 1301(b)(1). SCOFBP incurred withdrawal liability for unfunded pension benefits in 2001 when it ceased operations and paying into a union pension fund. The district court held that the solvent MCRI and MCOF, which were part of a complex set of entities and trusts under control of a single businessman (who went through personal bankruptcy in 1999), were both trades or businesses that were under common control with insolvent SCOFBP at the relevant times, so that both are liable for SCOFBP's withdrawal liability. The Seventh Circuit affirmed, rejecting arguments that MCRI and MCOF were only passive investment vehicles rather than trades or businesses and that the businessman's personal bankruptcy disrupted what had been common control of the three entities.

In 1995, defendant signed a 10-year lease with plaintiff's predecessor and occupied about 20% of the building. In 1999, defendant's corporate parent decided to consolidate operations and needed up to an additional 60,000 square feet. During negotiations, defendant's CEO allegedly asserted that defendants should not rent to anybody else. Negotiations failed. Defendant ultimately vacated the building but paid rent and looked for a sublessor until December 2000, when it sent notice that it was cancelling the lease. Plaintiffs sued in state court for breach of lease, breach of guaranty, consequential damages and fraud. Defendants prevailed. In 2004, while the corporate suit was pending, plaintiffs filed the individual suit, alleging fraud against defendants; CEO and general counsel. The suit was dismissed. In 2010, plaintiffs filed a diversity suit in federal court, bringing claims for breach of lease, breach of guaranty, and fraud. The district court dismissed, based on res judicata. The Seventh Circuit affirmed, holding that the the individual suit barred the federal suit.

Class actions charged defendant, a credit-reporting agency, with violating the Fair Credit Reporting Act, 15 U.S.C. 1681, by selling consumer credit information to advertisers. The actions were consolidated and settled for $75 million. Class counsel appealed approval of a settlement with members of the class who filed individual claims in state court, that allowed defendant, after paying the settlements, to be reimbursed out of the $75 million class settlement fund. The law firm (Watts) that represented the individual claimants, did nothing to create the fund out of which the settlements will be paid, but stands to receive from $10 to $15 million in attorneys’ fees out of the class settlement fund. Class counsel argued that it should receive a portion of Watts' fees on the ground that class counsel contributed to the creation of the fund. The Seventh Circuit deemed Watts' motion as one to add it as a party and granted the motion. Watts wants to be an appellee to defend its right to attorneys' fees from the fund that its clients (individual claimants) agreed to pay, according to the court, but doesn't want to be a party that could be ordered to disgorge some of the fees, should class counsel prevail.

Defendant and coconspirators stole clientele books from department stores and used personal information, including credit card numbers, to order merchandise, which was intercepted and sold or returned. She pleaded guilty to conspiracy to commit access device fraud, 18 U.S.C. 1029(b)(2), attempted possession of access devices, id. 1029(a)(3), and aggravated identity theft, id. 1028A(a)(1) (Count III). The district court calculated a four-level increase in her offense level because her crime had more than 50 victims, resulting in a guidelines range of 120-150 months. The court imposed a sentence of 120 months on Counts I and II (to run concurrently) and a consecutive 24-month sentence on Count III as required by 18 U.S.C. 1028A(b). The Seventh Circuit affirmed. Because the court sentenced defendant using the November 2009 guidelines, it included in the count of victims 40 stores and credit card companies that sustained actual loss as well as 65 victims whose credit cards were used, regardless of monetary loss. The court acted within its discretion in rejecting her argument that there was no evidence that cardholders were actually harmed or expended significant time or effort cancelling their credit cards and that the guidelines resulted in a sentence that was greater than necessary.

The Mexican nationals in consolidated cases re-entered the U.S. without authorization, having been removed following conviction of crimes. Charged with being in the U.S. after having been deported (8 U.S.C. 1326(a)), they requested reductions in sentence because the district did not have a "fast track" program under which they could receive leniency in exchange for a guilty plea. The Seventh Circuit affirmed the district court's rejection of the argument. A district court need not address the argument unless the defendant has shown that he is similarly situated to those who would actually receive the benefit in a fast-track district. A defendant must promptly plead guilty, agree to the factual basis proffered by the government, execute an enforceable waiver of specific rights before or during the plea colloquy, establish that he would be eligible for a fast‐track sentence in at least one district offering the program, and submit the likely imprisonment range in that district.

Defendant and 16 others, was charged with crimes arising out of a conspiracy to distribute cocaine and marijuana across several states. A jury found him guilty of 16 out of 19 charged counts. The Seventh Circuit affirmed, finding sufficient evidence to support the conviction. The trial court properly admitted statements by a co-conspirator, despite the co-conspirator's previous status as a DEA informant, because he was acting as a co-conspirator and furthering the goals of the conspiracy when he made the statements. The court did not abuse its discretion in rejecting a "Brady" claim, concluding that the strength of the remaining evidence rendered the suppressed evidence evidence immaterial.

In 2002 the city amended its ordinance to allow police to impound vehicles and impose a $500 fine on persons driving without a valid license or proof of insurance. The ordinance generated protests that it applied more harshly against minorities. The city had an outdoor assembly ordinance, requiring written application for a permit 20 days in advance, and providing discretion to require the event organizer to pay a cash deposit as a condition of permit issuance. In addition to enforcing the permit ordinance, city officials barred one protestor from speaking at a city council meeting concerning the towing ordinance. Plaintiffs sued the city, its mayor, and its police chief under 42 U.S.C. 1983, alleging violations of their First Amendment rights of free speech, of assembly, and to petition government for redress of grievances. The district court denied the mayor and police chief's claims of qualified immunity as to the First Amendment claims. The Seventh Circuit affirmed in part and reversed in part. The mayor barred anything and everything one of the protestors proposed to say at a public meeting, in retaliation for the protestor's prior statements. Other claims of immunity require resolution of factual issues.

Plaintiff had filed a state suit against the corporation, which owned and operated a shopping center, alleging that he was entitled to a percentage of profits under a written agreement. After the bankruptcy petition, a stay automatically issued against the state-court litigation, 11 U.S.C. 362(a). Plaintiff filed a notice of claim with the bankruptcy court; he argued that a lis pendens that he filed in connection with his state-court lawsuit made his claim a secured one. The bankruptcy court disagreed and later disallowed the claim in its entirety, reasoning that plaintiff could have nothing more than an equity interest, which would necessarily be subordinate to all other creditors' claims and thus worthless. The Seventh Circuit dismissed an appeal, noting plaintiff's failure to obtain a stay of the sale of the debtor's property pending appeal, as required under 11 U.S.C. 363(m), and his failure to file a notice of appeal that challenged the bankruptcy court order approving the joint liquidation plan that distributed the sales proceeds.

Parents disagreed with the school system's assessment of appropriate services for their four-year-old, who had suffered traumatic brain injuries. The Indiana Board of Special Education Appeals affirmed on most points, concluded that the parents failed to show that any procedural violation significantly impeded their opportunity to participate in the decision-making process or caused a deprivation of educational benefits, and confirmed that the child did not require a full-time kindergarten program in order to receive a free appropriate public education. The district court entered summary judgment in favor of the school district. The Seventh Circuit affirmed. The child's rights under the Individuals with Disabilities Education Act, 20 U.S.C. 1400-1491 were not affected by any procedural errors. The record supports the conclusion that the child was making progress toward his Individual Education Plan goals Because the school conducted its evaluation of the child within 60 instructional days of receiving parental consent, it fully complied with its "child find" obligations. The parents were not entitled to reimbursement for their costs of placing the child in a private school or for attorney fees.