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

The Seventh Circuit previously affirmed the convictions of members of a Chicago operation that trafficked heavily in various controlled substances, but ordered a limited remand asking whether the district court wanted to resentence in light of the 2007 Supreme Court decision, Kimbrough v. United States. On remand the district court lowered one sentence from 456 to 360 months and the other from 300 to 240 months. With respect to one defendant, the Seventh Circuit affirmed, finding that the district court did not err in calculating the drug quantity attributable to that defendant. The calculation was based on reliable evidence. The other defendant's appeal presented no nonfrivolous issues, so the court granted his counsel's Anders motion to withdraw and dismissed the appeal.

The current beneficiary of several discretionary trusts brought claims of legal malpractice and breach of fiduciary duty against the trustee and her lawyers. The district court dismissed with prejudice for lack of standing because she did not allege a likelihood that the trusts' corpus were insufficient to pay her discretionary distributions. The Seventh Circuit reversed. Looking to Illinois law, the court reasoned that plaintiff has an equitable interest in the trust property that gives her standing to enforce the trusts. There is a fiduciary relationship between her and the trustee that gives rise to equitable remedies.

A jury convicted the defendant of defrauding a large bank. The district judge sentenced him to 96 months in prison and ordered him to forfeit the money that he had obtained from the fraud, which the judge determined to be $16,241,202, plus property that he had bought with proceeds of the fraud, and to pay restitution to the bank also in the amount of $16,241,202. Defendant challenged the order of restitution. The Seventh Circuit reversed in part. Restitution, unlike forfeiture, is limited to the victim's loss, 18 U.S.C. 3664(f)(1)(A); the court remanded for determination of that loss. The court noted that loss has been limited by the government's decision to convey forfeited assets to the victim up to the limit of the loss.

Plaintiff entered into a two-year wireless service agreement with First Cellular in 2005. The company was acquired by defendant, which began dismantling and reorganizing. Plaintiff initially agreed to defendant's terms, but later filed a class action, claiming breach of contract for rendering his phone and equipment useless and refusing to honor the features and prices of the First Cellular Agreement. He also claimed deceptive rade practices under Illinois law and civil conspiracy. The district court denied defendant's motion to compel arbitration. The Seventh Circuit reversed, finding that defendant's arbitration clause applies because part of the claims are based on services and products received under defendant's contract. Defendant's contract unambiguously covers any dispute "arising out of" or "relating to the services and equipment." If a contract provides for arbitration of some issues, any doubt concerning the scope of the arbitration clause is resolved in favor of arbitration as a matter of federal law, 9 U.S.C. 2.

The debtor's single asset is a commercial building. The lender promptly started foreclosure proceedings in state court, prevailed, and a foreclosure sale of the property was scheduled, but was stayed when the debtor filed for bankruptcy, 11 U.S.C. 362(a)(4). The lender became a participant in the bankruptcy The bankruptcy court rejected the debtor's plan to exchange the mortgage for an "indubitable equivalent," lifted the stay, and dismissed the bankruptcy. The Seventh Circuit affirmed, noting that the lender has waited years to enforce its lien and that the court was not required to further stretch the wait. The lien on Treasury bonds proposed by the debtor would not be equivalent to the lender retaining its lien on the building.

Defendant sold heroin to an informant and was indicted for distribution of heroin, 21 U.S.C. 841(a)(1). He pleaded guilty and was sentenced to 216 months. The government agreed to request a reduced sentence if he provided assistance and later filed a Rule 35(b) motion requesting sentence reduction. The court reduced the sentence to 168 months. The Seventh Circuit affirmed. The defendant failed to request a reduced sentence at the hearing and therefore is unable to argue that the court erred by deviating from a requested reduction. Rule 35(b) hearings are not an opportunity for full resentencing, so the court cannot consider factors other than defendant's substantial assistance in deciding by how much to reduce the sentence if the reduction is less than the request, so the court properly declined to consider the 3553(a) factors.

The owner of retail liquor stores and two consumers challenged the constitutionality of an Indiana state law that prohibits shipment of wine to customers by motor carriers, such as UPS, Ind. Code. 7.1-3-15-3(d). The Seventh Circuit affirmed the district court's rejection of the challenges. The law may prevent the store from enlarging its sales area to encompass parts of Indiana remote from Fort Wayne; that is an effect on intrastate commerce, not interstate commerce. Plaintiffs did not establish even an incidental effect on interstate commerce The court also noted that the law is "within the Twenty-First Amendment's gravitational field," which includes matters relating to transportation of liquor.

A supervising building inspector was convicted of conspiracy to commit bribery, 18 U.S.C. 371, and two counts of making false statements to federal agents, 18 U.S.C. 1001(a)(2) and was sentenced to a total of 60 months' imprisonment. The Seventh Circuit affirmed. The district court properly allowed testimony about the 2005 gift list of a city businessman; the testimony was probative of intent and not so prejudicial as to cause the jury to decide the case on an improper basis. Although the court erred by admitting the list itself as a business record, the error was harmless. The court properly barred recordings between defendant and one of the witnesses who testified against him, which contained self-exculpatory statements. The court properly held defendant accountable for more than $112,500 in bribes, which resulted in an eight-level increase to the USSG offense level.

A former inmate sued an officer who ordered forcible shearing of plaintiff's dreadlocks (42 U.S.C. 1983). The district judge dismissed. In an opinion that included a picture of the the late musician Bob Marley (a Rastafarian), the Seventh Circuit reversed. Claims for damages under the Religious Land Use and Institutionalized Persons Act, 42 U.S.C. 2000cc, would fail based on sovereign immunity (official capacity) and because the Act does not create a personal capacity cause of action against state employees. Illinois inmates are allowed to have any length of hair that does not create a security risk, but the officer told plaintiff that only Rastafarians were allowed to have dreadlocks. A ban on long hair, even if motivated by sincere religious belief, would likely pass constitutional muster, but this was a case of "outright arbitrary discrimination" rather than failure to accommodate religious rights. There was no articulated ground for a Rastafarian exception. Even "Heretics have religious rights" and plaintiff claimed that dreadlocks are, for him, religious observance, though dreadlocks do not have symbolic significance for African Hebrew Israelites of Jerusalem as they do for Rastafarians. There is no suggestion that allowing plaintiff's dreadlocks would create a "wildfire of idiosyncratic observances," or that defendant acted on a reasonable belief of a security threat.

The County Sheriff terminated plaintiff's probationary employment as a deputy based on violations of standard operating procedures, failure to follow orders, and insufficient commitment to the job. He sued under Title VII of the Civil Rights Act of 1964, 42 U.S.C. 2000e and 42 U.S.C. 1981, claiming he was fired because he is black. The district court entered summary judgment for the Department. The Seventh Circuit affirmed. Plaintiff's circumstantial evidence of discrimination fell short of supporting an inference that he was terminated because of his race. No evidence suggests that the sheriff or other decision-makers participated in any of the alleged racially charged behavior: watching Blazing Saddles in the workplace and giving plaintiff racially tinged nicknames. Although plaintiff identified several white deputies who were retained despite performance problems during their probationary employment, their misconduct was not comparable to his, so they cannot be considered similarly situated.