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

The Federal Trade Commission found that a merger between a health system and a hospital violated the Clayton Act, 15 U.S.C. 18. Plaintiffs sought treble damages and certification of a class of patients and third-party payors who allegedly paid higher prices for care. Under FRCP 23(b)(3), a class may be certified only if questions of law and fact common to members predominate over questions affecting only individuals in the class. Plaintiffs proposed to rely on economic and statistical methods used by the FTC and defendant's economic experts to analyze antitrust impact. The "difference-in-differences" method estimates price increases resulting from exercise of market power rather than from other factors. The district court denied certification, concluding that the expert had not shown that his methodology could address impact on a class-wide basis. The Seventh Circuit granted interlocutory appeal, vacated, and remanded. Although plaintiffs' expert initially believed that the health system did increase prices uniformly across all services, he acknowledged that it might not have done so, and explained how his methodology could show impact to the class despite such complications. The degree of uniformity the court demanded is not required; "it is important not to let a quest for perfect evidence become the enemy of good evidence."

Plaintiff filed an employment discrimination suit, alleging race discrimination and retaliation, 42 U.S.C. 1981 and 42 U.S.C. 2000e. She failed to file a timely response to her employer's motion for summary judgment and the court granted the motion. The Seventh Circuit affirmed, holding that the district court was within its discretion in denying an extension. Plaintiff's counsel offered no explanation for missing the filing date by more than a month. There was no direct evidence of discrimination or retaliation; there was evidence of legitimate, non-discriminatory reasons for any salary differences among workers in plaintiff's position. Plaintiff never complained to her employer that any actions taken against her by co-workers or by anyone at the company were related to race and nothing about cited incidents gave any hint that race was at issue.

Defendant Avery pled guilty to crack cocaine distribution, 21 U.S.C. 841(a)(1); he appealed the denial of his request to withdraw his guilty plea, calculation of the crack cocaine quantity attributed to him, and his 262-month sentence. Defendant Redmond pled guilty to crack cocaine distribution conspiracy, 21 U.S.C. 846, and appealed only his 240-month sentence. The Seventh Circuit affirmed, but remanded for the limited purpose of allowing the court to reconsider Redmond's sentence and determine whether it might be inclined to impose a different sentence, knowing the full extent of its discretion. Avery was not entitled to withdraw his guilty plea based on the crack cocaine quantity attributable to him, which was reasonably calculated, or on the enhancement for career offender status.

Petitioner, age 13, entered from Pakistan on a visitor's visa in 1979. The 1986 Immigration Reform and Control Act, allowed aliens who entered before 1982 and have remained continuously present to apply for legalization (8 U.S.C. 1255a). His 1987 attempt to apply was rejected because of a brief trip to Pakistan. The practice, "front-desking," was challenged in court. While litigation was pending, petitioner applied for amnesty and obtained work authorization. In 1992, he was convicted for possession of a concealed hunting knife. Returning from Canada while driving his truck route in 1995, petitioner was found to have a voter's registration stating that he was a citizen, but was allowed to reenter. He filed application under the Legal Immigration Family Equity Act, applicable to members of front-desking actions who establish continuous residence from 1982 to 1988. INS commenced deportation, aware of the pending amnesty application. The BIA dismissed an appeal. The Sixth Circuit denied review. In 2005 petitioner voluntarily appeared and was detained for four years. USCIS denied the 1997 amnesty application and the LIFE application. The AAO dismissed appeals; BIA reissued its 2001 deportation decision. The Seventh Circuit vacated. AAO failed to make an individualized decision about continuous presence and was not entitled to rely on the 1991 conviction as a ground to deny legalization.

The EEOC filed suit on behalf of two servers, alleging that the servers were sexually harassed (Title VII, Civil Rights Act of 1964, 42 U.S.C. 2000e) while employed at the franchise restaurant. A jury found hostile work environment and awarded compensatory damages to both and punitive damages to one plaintiff. The Seventh Circuit affirmed in part. A rational jury could have found: that plaintiff was subjected to severe and pervasive harassment; that defendants did not exercise reasonable care in instituting an effective sexual harassment policy with a reasonable complaint mechanism and in taking corrective action; that the policy was ineffective in advancing education and protection of employees rights; and that certain policy language was inserted to discourage complaints. Because the district court injected a new theory of the case after the time that defendants could present rebuttal evidence, and because the district court reserved ruling on an issue ultimately found to be a question for the jury, the district court’s ruling with respect to corporate liability was reversed and remanded.

The Postal Service terminated plaintiff's 32 years of employment as a clerk, claiming that it fired her because she told her psychiatrist she was having thoughts of killing her supervisor, and it believed she posed a danger to fellow employees. Plaintiff is an African-American woman and claimed discrimination and retaliatory discharge. In support of her disparate treatment claims she presented evidence that two white male employees at the same facility had recently threatened another employee at knife-point, yet received only one-week suspensions from the same manager who fired her. The district court granted the Postal Service summary judgment. The Seventh Circuit reversed, stating that the similarly-situated inquiry is flexible, common-sense, and factual. A reasonable jury could infer, in light of all the circumstances, that an impermissible animus motivated the firing. Plaintiff's evidence could also demonstrate pretext.

The title company provided real estate closing services. From 1984 through 1995, it served as exclusive agent for defendant and managed an escrow account that defendant contractually agreed to insure. The title company was not profitable and its managers used escrow funds in a "Ponzi" scheme. In 1989, there was a $26 million shortfall. To fill the hole, the managers began looting another business, Intrust, to pay defendant's policyholders ($40.9 million) and to pay defendant directly ($27 million), so that defendant was a direct and indirect beneficiary of the title company's arrangement with Intrust. In 2000 the state agency learned that the funds were missing, took control of Intrust and placed it in receivership. In July 2010, the Receiver filed suit for money had and received, unjust enrichment, vicarious liability), aiding and abetting breach of fiduciary duty, and conspiracy. The district court dismissed based on the statute of limitations. The Seventh Circuit affirmed. The Illinois doctrine of adverse domination does not apply. That doctrine tolls the statute of limitations for a claim by a corporation against a nonboard-member co-conspirator of the wrongdoing board members.

Debtor, a company that operated a tug boat service, filed for Chapter 11 bankruptcy and the bankruptcy court converted the case to a Chapter 7 liquidation. The principals were going through a divorce, and each sought ownership of real property used to operate the business. They reached a settlement that divided $911,620 from the sale of the property. The principals each received $229,126; the bankruptcy estate received $458,252. The principals paid the bankruptcy attorneys $65,000 from their personal shares. A financial services firm, a creditor of the estate that provided financial consulting services during the Chapter 11 proceedings, objected to the payout to the attorneys. The bankruptcy court rejected the claim. The district court and Seventh Circuit affirmed, finding the settlement to be in the best interests of the estate.

Defendant pled guilty to possessing crack cocaine with intent to distribute, 21 U.S.C. 841(a)(1), agreed to cooperate in exchange for a chance at a lower sentence, and waived the right to appeal "any and all issues." The district court sentenced him to life imprisonment, the statutory minimum given the amount of crack, prior convictions for felony drug offenses, and the government's decision not to move for a sentence below the mandatory minimum. The Seventh Circuit dismissed an appeal, finding the plea agreement enforceable and rejecting an argument that the government breached that agreement by not moving under 18 U.S.C. 3553(e) to reduce his sentence below the statutory minimum. There is nothing in the record indicating that the government harbored any improper motive or acted irrationally in declining to move for a sentence reduction. Although defendant had begun to cooperate, his efforts had not resulted in any charges or arrests.

After being attacked in his home by alleged co-conspirators in a prescription narcotics conspiracy, defendant stated, in open court, that he would shoot his former associates if he ever encountered them again. His prior felony conviction made it illegal for him to possess firearms, but he enlisted the help of an acquaintance, a confidential informant, in obtaining untraceable guns. In an Illinois parking lot, he purchased guns manufactured outside the state and was arrested as a felon in possession of a firearm (18 U.S.C. 922(g)(1)). The district court rejected an argument that ATF had removed the guns from the stream of interstate commerce when it took the guns off the private market and added them to its prop collection. He entered a conditional plea and was sentenced to 56 months. The Seventh Circuit affirmed, rejecting an argument that federal agents should not be permitted to federalize local gun-possession offenses by offering suspects interstate prop guns rather than letting them buy local.