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

A new customer of the bank (Ott) obtained a loan to finance the purchase of a motor home from the dealership that Ott himself owned. Ott presented the certificate of origin and pledged the motor home as collateral. When Ott defaulted two years later, the bank discovered that the certificate of origin was a fake and the motor home did not exist. The bank’s insurer denied recovery because the fake certificate of origin did not meet the insurance bond definition of "Counterfeit." The district court ruled in favor of the insurer. The Seventh Circuit affirmed. The certificate of origin did not imitate an actual, original certificate of origin for a 2007 motor home because there never was an actual, valid, original certificate for the vehicle pledged as collateral: the manufacturer never produced the vehicle described.

Plaintiff received 24 parking tickets over a 14-month period. All arrived by mail, typically in batches. All were written by Chicago Police Department Unit 253. Some were inconsistent, implying that the Toyota was in two places at once or was simultaneously double-parked and parked on the sidewalk. All 13 tickets attributed to one officer issued on four dates, had sequential numbers, and recorded the time as 10:00 p.m. Four issued after plaintiff sold the Toyota. Because none were legitimate, all were dismissed, but plaintiff had to go to court seven times. Plaintiff complained to the supervisor, the Internal Affairs Division, and Independent Police Review, then contacted the Chicago Tribune, which ran several stories. The Internal Affairs Division began an investigation that resulted in a recommendation to fire several officers. The district court dismissed a 42 U.S.C. 1983 case. The Seventh Circuit affirmed with respect to a substantive due process claim, stating that plaintiff did not plead facts suggesting a deprivation that meets the high threshold for such claims. The court reversed dismissal of a class-of-one equal protection claim and related civil conspiracy claim, stating that the disturbing pattern, without reasonable explanation, adds up to deliberate and unjustified official harassment.

While on patrol, Officer Turner spoke to a man who reported that someone had just broken into his home and fondled his two daughters, who had been sleeping. A short time later, Turner interviewed the girls, who described the intruder as wearing camouflage cargo shorts and a dark baseball cap. Turner left the house and stopped a man walking a dog in an alleyway near the house (plaintiff). Plaintiff was wearing camouflage cargo shorts and a black baseball cap. No one else was in the area. Plaintiff agreed to stay in the police cruiser, Turner re-interviewed the girls, called the state's attorney's office for advice, arrested plaintiff, and conducted a "show-up," where the girls identified plaintiff as the intruder. The state court later dismissed charges for lack of evidence. The district court entered summary judgment for defendants in plaintiff’s suit under 42 U.S.C. 1983, and Illinois state law. The Seventh Circuit affirmed with respect to a false arrest claim against Turner and an indemnification claim against the county (Local Governmental Tort Immunity Act, 745 ILCS 10/1-101).

The company, formed in 2003 to franchise stores, was forced into reorganization bankruptcy under Chapter 11. The bankruptcy judge granted a motion to convert to Chapter 7 liquidation, over objection by a five percent shareholder who had been the company’s president (Wallis). The judge rejected allegations of fraud and a request that the court compel franchisees to pay what Wallis claimed they owed. The district court and Seventh Circuit affirmed, first holding that it had jurisdiction although the bankruptcy case has not been closed. The court rejected an argument that, because creditors’ claims were based on contracts that were subject to arbitration, they were outside the jurisdiction of bankruptcy court. The court noted that Wallis has filed eight appeals to the district court and five to the Seventh Circuit, "all pro se and frivolous. Enough is enough. The next time he files a frivolous appeal he will be sanctioned."

In 1996 defendant and his cousin formed companies that bought, stored, and sold grain, and provided farming services. In 1999, the cousins obtained bank loan by falsely representing that valuable contracts existed for future grain deliveries from one company to the other and inflating balances of bank accounts by writing bad checks between accounts. Charged with loan fraud and check-kiting (18 U.S.C. 1344) that cost the bank more than $2.5 million, the cousin pled guilty. Defendant testified that the transactions were in good faith, but was convicted and sentenced to 70 months in prison and restitution in the amount of $1,967,055.30, the outstanding balance on the loans. The Seventh Circuit affirmed, rejecting arguments that the indictment was multiplicitous; that there was insufficient evidence of guilt beyond a reasonable doubt; that sentencing under 2009 guidelines violated the ex post facto clause; that loss and restitution amounts were miscalculated; that an enhancement for obstruction of justice was improper; and that the disparity between defendant’s sentence and that of his cousin was improper.

Plaintiff is serving time in a state prison, but was transferred to county jail to attend court proceedings. During two stays, the jail applied a policy of making “nutriloaf” the exclusive diet of prisoners who had been in segregation at the time of transfer, regardless of behavior in the jail. After two days, plaintiff began vomiting and experiencing stomach pains and constipation. He stopped eating nutriloaf and subsisted for eight days on bread and water, losing 8.3 percent of his weight during two stays. A jail infirmary nurse gave him antacids and a stool softener. Upon return to prison he was diagnosed with an anal fissure. In response to his 42 U.S.C. 1983 suit, defendants submitted only a "preposterous affidavit from a sheriff's officer" indicating that nutriloaf is nutritious. The district court dismissed. The Seventh Circuit reversed, in part, noting that defendants' decision "to defy rather than to defend" make it impossible to know the part diet played in making plaintiff sick. It is possible that jail officials were aware that nutriloaf was sickening him yet decided to do nothing, showing deliberate indifference to a serious health problem in violation of the Eighth Amendment. The court suggested sanctions against defendants.

Defendant discarded a loaded handgun during a foot chase with police and was arrested for unlawfully possessing a firearm as a felon. He signed a Miranda waiver and began giving a statement, but soon invoked his right to counsel. Officers halted the interview and summoned a guard to take defendant to his cell. Defendant changed his mind and asked to speak without counsel present. The interview was recorded. After new Miranda warnings, officers asked if he wanted a lawyer. He replied, “Yeah, I do, but you ....” Officers reminded him that they could not talk if he was asking for counsel. After a long pause, defendant stated unambiguously that he wanted to continue without a lawyer and gave a statement. The district court denied a motion to suppress, defendant was convicted, and, based on designation as an armed career criminal because of three prior felony convictions, was sentenced to 252 months. The Seventh Circuit affirmed the conviction, but vacated the sentence. Officers did not violate the Miranda/Edwards rule. A conviction for the Illinois crime of making insulting or provoking physical contact with a peace officer is not a violent felony under the ACCA.

Plaintiffs were involved in a physical altercation with employees of a nightclub. Plaintiffs sustained visible injuries. Club employees took them outside, handcuffed them and called the police. The officers were apparently unwilling to listen to plaintiffs' side of the story; they were taken to a squad car and placed in the rear seat, though they were never told they were under arrest. Both were charged with assault and battery. Although there were surveillance cameras, tapes were never requested and were destroyed before plaintiffs filed their suit under 42 U.S.C. 1983 against the city, officers, the club, and its owner. The district court granted summary judgment in favor of all defendants, holding that the club and owner were not functioning as state actors; that plaintiffs failed to show a conspiracy between the city and the club; that there was probable cause to arrest plaintiffs; and that probable cause defeats a claim of malicious prosecution. The Seventh Circuit affirmed.

Plaintiff sued Allstate on behalf of a putative class, alleging a nationwide pattern or practice of sex discrimination in violation of Title VII of the Civil Rights Act, 42 U.S.C. 2000e, and the Equal Pay Act, 29 U.S.C. 206(d). She alleged gender-based earning disparities based on salary, promotion, and training policies that left significant discretion in the hands of individual managers. The district court denied class certification. In response to enactment of the Lilly Ledbetter Fair Pay Act of 2009, Pub L. No. 111-2, plaintiff again moved for class certification, focusing on Allstate's uniform compensation policies. The court again denied certification, citing lack of common issues. On appeal, plaintiffs argued disparate impact, claiming that a policy of awarding merit increases based on a percentage of base pay and of comparing salaries to its competitors caused gender-based disparities in earnings. The Seventh Circuit affirmed denial of class certification, stating that plaintiffs did not meaningfully develop the disparate impact claim before the district court, where plaintiffs argued only a pattern-or-practice claim, a type of intentional discrimination.

In 2008, defendant was in the U.S. illegally and, at the direction of another, purchased a house for the purpose of obtaining multiple home equity lines of credit. He submitted loan applications that contained false statements about citizenship, employment, and intent to reside in the house, and concealed other loan applications He pled guilty to engaging in a scheme to defraud financial institutions and to obtain monies and funds owned by and under the custody and control of the financial institutions by means of materially false and fraudulent pretenses, representations, promises, and omission, 18 U.S.C. 1344. He was sentenced to 51 months and ordered to pay $337,250 in restitution. The Seventh Circuit affirmed the restitution order, rejecting an argument that he could not be ordered to pay restitution for conduct to which he did not plead guilty. The transactions to which he pled guilty resulted in no actual loss because he was arrested before the loans were funded. The court noted that his plea declaration described the scheme as a whole and the ultimate loss to the lender.