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

Most of the world's reserves of potash, a mineral used primarily in fertilizer, are in Canada, Russia, and Belarus. Defendants are producers with mines in those countries. Plaintiffs are direct and indirect potash purchasers in the U.S. They allege that producers operated a cartel through which they fixed prices in Brazil, China, and India, and that inflated prices in those markets influenced the price of potash in the U.S. Defendants moved to dismiss, arguing that the district court lacked jurisdiction under the Foreign Trade Antitrust Improvements Act, 15 U.S.C. 6a. The district court denied the motion. The Seventh Circuit affirmed. The world market for potash is highly concentrated and U.S. customers account for a high percentage of sales. This is not a “House-that-Jack-Built situation in which action in a foreign country filters through many layers and finally causes a few ripples” in the U.S. Foreign sellers allegedly created a cartel, took steps outside the U.S. to drive the price up of a product that is wanted in the U.S., and, after succeeding, sold that product to U.S. customers. The payment of overcharges by those customers was objectively foreseeable, and the amount of commerce is substantial.

Crown hired LMI to construct an office building. LMI subcontracted installation of windows and doors to Frontrunner. Frontrunner was required to maintain insurance that named LMI as an additional insured. Frontrunner purchased an occurrence-based commercial general liability policy from Consolidated that covered sums that insureds became legally obligated to pay because of property damage and requiring Consolidated to defend any suit seeking damages for covered property. Late in construction, Crown experienced water infiltration at numerous locations and other construction defects. Crown filed suit. LMI tendered defense to Consolidated, but Consolidated made no coverage decision for six months. Though LMI had not obtained a coverage decision, it settled with Crown. Although informed of all settlement talks, Consolidated participated in none and later denied coverage. The district court found in Consolidated’s favor. The Seventh Circuit affirmed. Under Illinois insurance law, Consolidated had no duty to defend because the underlying complaint failed to allege damage to any covered property. Where the underlying suit alleges damage to the construction project itself because of a construction defect, there is no coverage; where the complaint alleges that a construction defect damaged something other than the project, coverage exists.

Ekstrand taught kindergarten from 2000 to 2005. In 2005, she was reassigned to teach a first-grade class at her own request. She was relocated to a classroom with no exterior windows in a busy, loud area of the school. Ekstrand repeatedly requested a change of classroom. The principal worked to make the classroom more hospitable, but denied requests to switch rooms. After the school year began, Ekstrand experienced symptoms of seasonal affective disorder, a form of depression. Both her psychologist and her primary care physician recommended a leave of absence. Her initial leave was only three months, but the following winter, her doctor advised that Ekstrand would be unable to return to teach for the remainder of the 2005-06 term. The leave of absence was later extended to include the 2006-07 term. The district court granted the district summary judgment, but on remand, a jury returned a verdict in favor of Ekstrand under the Americans with Disabilities Act. The Seventh Circuit affirmed. There was sufficient evidence for a reasonable jury to decide that Ekstrand was a qualified individual with a disability and that the school district knew of that disability, but failed to accommodate her with a new classroom.

Sims pleaded guilty to possessing a firearm as a convicted felon, i18 U.S.C. 922(g). The district court sentenced Sims to 180 months’ imprisonment after it determined that three of his previous convictions triggered the Armed Career Criminal Act’s 15-year mandatory minimum. The Seventh Circuit affirmed, rejecting an argument that the ACCA should not apply because two of his three prior convictions (one for selling cocaine and the other for possessing cocaine with intent to deliver) were not committed “on occasions different from one another.” 18 U.S.C. 924(e)(1). The offenses were separated by a week.

Griffin, a futures commission merchant, went bankrupt in 1998 after one of its customers, Park, sustained trading losses of several million dollars and neither Park nor Griffin had enough capital to cover the obligations. The Bankruptcy Court first relied on admissions by the controlling Griffin partners that they failed to block a wire transfer, allowing segregated customer funds to be used to help cover Park’s (and thus Griffin’s) losses. On remand, the court reversed itself and held that the trustee failed to establish that the partners actually caused the loss of customer funds and failed to establish damages. The district court affirmed, applying the Illinois version of the Uniform Commercial Code to a series of transactions that was initiated by the margin call that caused Griffin’s downfall. The Seventh Circuit affirmed, stating that there is no reason why the transactions at issue (which involved banks in England, Canada, France, and Germany, but not Illinois) would be governed by Illinois law. The Bankruptcy Court’s first decision appropriately relied on the partners’ admission that they failed in their obligation to protect customer funds, which was enough to hold them liable for the entire value of the wire transfer.

Safeco issued plaintiffs a homeowner’s policy that went into effect when they closed on the property and covered all accidental direct physical loss to property, unless limited or excluded, “occurring during the policy period.” Before receiving the policy and first seeing its terms, but after beginning renovations, plaintiffs discovered severe inner wall water leaks and significant water infiltration on three exterior walls. A mold specialist found that the home had numerous construction deficiencies that existed long before they purchased the home, resulting in chronic water intrusion that damaged interior finished walls, insulation, external plywood sheathing, and other aspects of the structure. Safeco denied coverage, stating that the prepurchase inspection confirmed multiple areas of water damage that were in need of attention and that the loss qualified as a preexisting condition that occurred outside of the policy period. The district court held that Safeco was precluded from raising the exclusions because it did not notify plaintiffs the exclusions until after they discovered the damage, awarded $485,100.64, and held that Safeco lacked a reasonable basis for denial and demonstrated reckless disregard, entitling plaintiffs to damages resulting from bad faith. The Seventh Circuit affirmed.

A jury twice viewed a video of Wysinger’s interrogation by a Drug Enforcement Agencyagent. Wysinger challenged admission of the video on the grounds that the Miranda warning was inadequate and that the agent continued to interrogate him after he clearly and unequivocally invoked his right to counsel. He was convicted of conspiracy to distribute and possess with intent to distribute cocaine, 21 U.S.C.841(a)(1), 846 and 851 and aiding and abetting possession with intent to distribute cocaine, 21 U.S.C. 841(a)(1) and 851, and 18 U.S.C. 2. The Seventh Circuit vacated, holding that the video should have been suppressed and that the error was not harmless. After Wysinger asked, in the first minute, if he should call a lawyer, the agent told him that they were “going to talk about that,” and then read a potentially misleading version, putting Wysinger to the false choice of talking to a lawyer before questioning or having a lawyer with him during questioning. The agent magnified the mistake by implying that “questioning” had not begun, then told him he had two choices: cooperating or being charged with conspiracy. The agent failed to mention the right to remain silent, or to consult a lawyer immediately and to have one with him during interrogation.

Former inmates of Cook County Jail filed a class action under 42 U.S.C. 1983, charging that failure to provide more than a single dentist to 10,000 inmates constitutes cruel and unusual punishment, violating the Eighth Amendment and the due process clause. Although some are convicts, most are pretrial detainees, to whom the cruel and unusual punishments clause does not apply; the due process clause has been interpreted to provide equivalent protection. Two district judges denied class certification, but in a third materially identical suit, the judge granted certification after the Supreme Court held that "neither a proposed class action nor a rejected class action may bind nonparties." The Seventh Circuit granted the Rule 23(f) appeal from certification, limited to whether a district court, in deciding class certification, should "defer, based on the principles of comity, to a sister court's ruling on a motion for certification of a similar class." The court upheld the certification as not precluded, while noting that it could be incorrect. Without a rule of preclusion, class action lawyers can keep bringing identical class actions with new representatives until they draw a judge who is willing to certify the class, but preclusion is not the solution.

Plaintiff alleged that Courtcall, which gives notices to litigants; fellow tenants in his building; a police officer; the Dane County District Attorney; the Governor of Wisconsin; and a former Prime Minister of Singapore conspired to ruin plaintiff’s life. The district court dismissed the suit as fantastical, noting that plaintiff had bombarded the court with frivolous suits. Plaintiff had 30 days to appeal but took almost 90, telling the judge that he was out of the country. The court reopened the time for appeal. On remand, the judge concluded that plaintiff was truthful in asserting that he was out of the country, but that it does not matter when a litigant opens his mail or receives a copy of the judgment at all. Plaintiff then filed a motion to recuse the panel. The Seventh Circuit denied that motion as frivolous and otherwise dismissed for lack of jurisdiction. The time to appeal is limited by statute, 28 U.S.C.2107; the limit is jurisdictional. The judiciary is not entitled to add time just because a litigant fails to open or read his mail or for any other extra-statutory reason.

Plaintiffs were high school football players that earned scholarships to play for National Collegiate Athletic Association Division I football programs. Both suffered career-ending football injuries at college. Their athletic scholarships were good for one year. When injuries prevented them from playing football, their scholarships were not renewed. Plaintiffs challenge two NCAA regulations as having an anticompetitive effect, in violation of the Sherman Act. 15 U.S.C. 1: the cap on the number of scholarships given per team and the prohibition of multi-year scholarships. The district court dismissed, finding that plaintiffs failed to allege a relevant commercial market on which NCAA Bylaws had an anticompetitive effect. The Seventh Circuit affirmed. It was not clear whether plaintiffs believed that the Bylaws affect an overall market for degrees, which would impact scholarship athletes and non-athletes alike, or some market that only concerns athletes attempting to obtain education in exchange for athletic services. Plaintiffs claimed that they alleged that there was no practical alternative for students wishing to pursue an education in exchange for playing ability, but the complaint explained the lack of practical alternatives for colleges wanting to field teams outside of the NCAA framework, not the lack of alternatives for student-athletes.