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

VRichards, an Indiana inmate, had complained since January 2008 about abdominal pain and blood in his stool; physicians in the prison system assured him that he was fine. In October 2008 they sent him to a hospital, where specialists diagnosed ulcerative colitis. By then it was too late to do anything but excise the colon and construct an ileo-anal pouch. Richards filed suit under 42 U.S.C. 1983 in December 2010, contending that defendants violated the eighth amendment by indifference to his serious medical condition. The district court dismissed the complaint as untimely. Richards concedes that his claim accrued in October 2008, but contends, however, that the time was tolled while he was physically unable to sue despite the exercise of reasonable diligence. The Seventh Circuit reversed and remanded for determination of Richards’ physical condition and his ability to file suit. View "Richards v. Mitcheff" on Justia Law

Nicholson was a sales associate for Pulte, a national homebuilder. When she failed to make her sales quotas for several months in a row, Pulte put her on a performance-improvement plan and later fired her when her sales did not improve. Nicholson claimed that her termination was related to her need to care for her ailing parents and sued under the Family and Medical Leave Act, 29 U.S.C. 2601, alleging that the company interfered with her statutory rights and retaliated against her in violation of the Act. The district court granted summary judgment for Pulte. The Seventh Circuit affirmed. Nicholson did not put Pulte on adequate notice that she needed FMLA-qualifying leave to care for her parents. At most, she made a few casual comments to her supervisors about her parents’ ill health. At the time the decision to terminate her employment was made, she had asked for only a single day off to attend a doctor’s appointment with her father, which her supervisor allowed. View "Nicholson v. Pulte Homes Corp." on Justia Law

EAR, a seller of manufacturing equipment, defrauded creditors by financing non-existent or grossly overvalued equipment and pledging equipment multiple times to different creditors. After the fraud was discovered, EAR filed for bankruptcy. As Chief Restructuring Officer, Brandt abandoned and auctioned some assets. Five equipment leases granted a secured interest in EAR’s equipment; by amendment, EAR agreed to pay down the leases ($4.6 million) and give Republic a blanket security interest in all its assets. Republic would forebear on its claims against EAR. The amendment had a typographical error, giving Republic a security interest in Republic’s own assets. Republic filed UCC financing statements claiming a blanket lien on EAR’s assets. After the auction, Republic claimed the largest share of the proceeds. The matter is being separately litigated. First Premier, EAR’s largest creditor, is concerned that Republic, is working with Brandt to enlarge Republic’s secured interests. After the auction, EAR filed an action against its auditors for accounting malpractice, then sought to avoid the $4.6 million transfer to Republic. The bankruptcy court approved a settlement to end the EAR-Republic adversary action, continue the other suit, divvy proceeds from those suits, and retroactively modify the Republic lien to correct the typo. First Premier objected. The district court affirmed. The Seventh Circuit affirmed. First Premier was not prejudiced by the settlement. View "First Premier Capital, LLC v. Republic Bank of Chicago" on Justia Law

The collapse of investment manager Sentinel in 2007 left its customers in a lurch. Instead of maintaining customer assets in segregated accounts as required by the Commodity Exchange Act, 7 U.S.C. 1, Sentinel pledged customer assets to secure an overnight loan at the Bank of New York, giving the bank in a secured position on Sentinel’s $312 million loan. After filing for bankruptcy, Sentinel’s liquidation trustee brought attempted to dislodge the bank’s secured position. After extensive proceedings, the district court rejected the claims. Acknowledging concerns about the bank’s knowledge of Sentinel’s business practices, the Seventh Circuit affirmed. The essential issues were whether Sentinel had actual intent to hinder, delay, or defraud and whether the bank’s conduct was sufficiently egregious to justify equitable subordination, and the district court made the necessary credibility determinations. Even if the contract with the bank enabled illegal activity, the provisions did not themselves cause the segregation violations. View "Grede v. Bank of NY Mellon Corp." on Justia Law

In 2000, TIN hired Pagel as an outside salesman. The position allows flexibility in scheduling sales calls. In 2006, Pagel began reporting to Kremer and was, for the first time, given performance evaluations. Kremer requested daily sales and two-week itinerary reports. Pagel experienced chest pain and labored breathing, and visited physicians in July 2006. Tests revealed a blockage in his heart. On August 24, Kremer met with Pagel to discuss his declining performance. On August 29, Pagel was admitted to the hospital for angioplasty and stent placement. The following week, Pagel’s symptoms returned and he was re-admitted. A CT scan revealed an unrelated mass in his lung. Pagel claims each absence was covered by the Family and Medical Leave Act, 29 U.S.C. 2601, and that he gave Kremer prior notification of each absence. While Pagel was in a clinic for a PET scan, Kremer called to say that he wanted to do a ride-along the next day. Pagel hastily attempted to schedule calls for September 19. The day went badly, Paget was terminated. The district court entered summary judgment for the company, rejecting claims under the FLMA. The Seventh Circuit reversed, finding that issues of material fact remained unresolved. View "Pagel v. TIN Inc." on Justia Law

Magnus was hired by the church in 2006 to work evenings and weekends. When the church was unwilling to accommodate her request to not work weekends, so that she could be with her daughter, who otherwise resided in an assisted living facility, Magnus alleged associational discrimination under the American with Disabilities Act, 42 U.S.C. 12112(b)(4). The church presented evidence that it terminated Magnus because of unsatisfactory performance and refusal to work weekends. The district court ruled in favor of the church. The Seventh Circuit affirmed.. Magnus’s true complaint is that the church, by mandating she work weekends, failed to accommodate her need to care for her disabled daughter. The ADA does not require employers to reasonably accommodate employees who do not themselves have a disability. View "Magnus v. St. Mark United Methodist Church" on Justia Law

Alexander, a criminal defense attorney, alleged that a local prosecutor, McKinney, conspired with FBI agents to manufacture false evidence and bring trumped-up charges of conspiracy to commit bribery against him. Alexander had frequently criticized McKinney. A jury acquitted Alexander of the charges, and he sued McKinney for violating his due process rights. The district court dismissed, finding McKinney entitled to qualified immunity because the complaint did not identify a deprivation of a cognizable constitutional right. The Seventh Circuit affirmed, stating that Alexander’s complaint was merely an attempt to recast an untimely false arrest claim into a due process claim. The Fourth Amendment, not the due process clause, is the proper basis for challenging the lawfulness of an arrest. The Supreme Court has made it clear that a substantive due process claim may not be maintained where a specific constitutional provision protects the right at issue. View "Alexander v. Freeman" on Justia Law

Garvey was convicted of four counts of distributing methamphetamine. The evidence at trial included testimony from a crime lab analyst, Nied, who testified that four plastic bags recovered from controlled buys at Garvey’s apartment contained methamphetamine. Nied was not the analyst who actually conducted lab tests on the white substance found in the bags—that analyst had left to take another job, and was not called as a witness. Nied was a supervisor at the same lab and had peer reviewed the analyst’s work. Garvey did not object to Nied’s testimony at trial. The Seventh Circuit affirmed, rejecting Garvey’s argument under the Confrontation Clause of the Sixth Amendment. Garvey did not demonstrate that any alleged error affected his substantial rights. View "United States v. Garvey" on Justia Law

Walsh is a nationwide builder; superintendents have discretion over hiring and pay of hourly workers. Walsh has rules against racial discrimination but superintendents are generally in charge. Plaintiffs worked for Walsh in 2002 and earlier and claimed that superintendents practiced, or tolerated, racial discrimination. Plaintiffs submitted a statistics indicating that black workers were less likely to work overtime; contended that some superintendents used words such as “nigger” or failed to prevent journeymen from doing so; and claimed that derogatory graffiti appeared in toilets or break sheds. Walsh claims that these were the work of subcontractors’ employees and that sites had different superintendents whose practices differed. The district court certified hostile work environment and overtime classes for the 262 Walsh sites in the Chicago area. The Seventh Circuit reversed. The 12 named plaintiffs cannot represent either class, since none worked for Walsh after 2002, but the classes extend into the indefinite future. The overtime class defined members as persons who did not earn more “because of their race.” Using a future decision on the merits to specify the scope of the class makes it impossible to determine who is in the class until the case ends. Plaintiffs may choose to propose site- or superintendent-specific classes. View "Bolden v. Walsh Constr. Co." on Justia Law

Wehrs alleged that his stock broker, Wells, violated federal securities and state laws by executing unauthorized trades on Wehrs’s account, causing significant losses. Wells never answered the complaint or appeared in court; default judgment entered. The court later vacated with respect to damages and granted summary judgment in favor of Wehrs. The Seventh Circuit affirmed, first upholding denial of the motion to vacate as to liability. Although Wells took quick action to correct the default, and alleged excusable neglect, asserting that his withdrawn counsel did not provide him notice of the date by which he had to respond, he did not set forth a meritorious defense. Wells implicitly admitted the allegations in contesting damages and only made a single conclusory statement that the transactions were authorized. To permit Wells to argue that Wehrs should have sold his shares at sooner to mitigate damages would allow Wells to contest liability, rather than the extent of damages. A defaulting party has no right to dispute liability. The duty to mitigate is an affirmative defense and Wells waived his right to this defense by not filing a responsive pleading and could not raise it under the guise of proximate cause. View "Wehrs. v. Wells" on Justia Law