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

A new owner informed paper mill employees that it was closing the mill with a likely shut-down date in late April. In March, plaintiffs received letters stating that their employment was being terminated effective May 2 and that, in exchange for a release, they would receive a severance package. Before plaintiffs submitted their executed release forms, the company indicated that it was no longer accepting release agreements and that it had decided to keep the plant open until October. Plaintiffs nonetheless signed and submitted the release and separation agreements they had received two weeks earlier. The company later stated that it would be extending a new severance offer and a bonus as an incentive to stay with the mill until October. Plaintiffs both stopped working at the mill on May 2 and started new jobs. The mill continued to operate. After leaving the mill and not receiving severance, plaintiffs requested it from the company’s severance plan. The plan administrator concluded that the two had voluntarily terminated their employment and denied their requests. Plaintiffs sued under the Employee Retirement Income Security Act, 29 U.S.C. 1132(a)(1)(B).. The district court granted the plan summary judgment. The Seventh Circuit affirmed. View "Reddinger v. SENA Severance Pay Plan" on Justia Law

The Equal Employment Opportunity Commission filed this employment discrimination case on behalf of Shepherd, a former sales clerk at AutoZone, alleging that AutoZone had violated the Americans with Disabilities Act. Shepherd had a back injury that was aggravated by mopping floors, and he claimed that AutoZone required him to mop floors despite his requests for relief. The EEOC alleged that AutoZone had failed to accommodate Shepherd’s disability. The magistrate judge initially granted AutoZone summary judgment on the accommodation claim. The Seventh Circuit reversed. On remand, a jury returned a verdict in Shepherd’s favor. The judge then approved $100,000 in compensatory damages, $200,000 in punitive damages, $115,000 in back pay, an injunction on AutoZone’s anti-discrimination practices, and the EEOC’s motion to vacate a prior award of costs to AutoZone from the first trial. The Seventh Circuit affirmed, but remanded the injunction for imposition of a reasonable time limit. The award of compensatory damages was not excessive when compared to Shepherd’s pain and suffering; the jury heard sufficient evidence of AutoZone’s reckless indifference to Shepherd’s federal employment rights and because the punitive damages award was not grossly excessive under the Due Process Clause. View "Equal Emp't Opportunity Comm'n v. Autozone, Inc." on Justia Law

The debtor owns a shopping center. Broadbent owns 98 percent of equity directly and two percent indirectly. EL-SNPR is its only secured lender; its note (interest at 8.37%) matured in 2010. The debtor did not pay, but commenced bankruptcy and proposed reorganization under which $300,000 of the $10 million secured debt would be paid and the balance written down to $8.2 million, with the difference unsecured. The loan would be extended and the interest rate cut to 6.25%. Unpaid creditors normally receive equity in a reorganized business. The plan cut creditors out of equity. Since the plan pays EL-SNPR less than its contractual entitlement, 11 U.S.C. 1129(b)(2)(B)(ii) provides that Broadbent cannot retain equity interest on his old investment; precedent requires an auction before he could receive equity on new investment. The plan nominally omitted Broadbent, but gave all equity to his wife for $375,000. Wife owns the company that manages the shopping center; Broadbent is CEO. The management contract would continue. The bankruptcy judge held that open competition was unnecessary because wife did not hold an equity interest. The Seventh Circuit reversed, stating that a new-value plan bestowing equity on a spouse can be as effective at evading the absolute-priority rule as a plan bestowing equity on the original investor. View "In the Matter of: Castleton Plaza, L.P." on Justia Law

Smith was arrested with narcotics on his person. Smith alleges and the officers deny that the officers stomped on his hand and beat him. When Smith arrived at the police station around he had an obvious finger injury. Officers delivered Smith to a hospital; a doctor determined that Smith’s finger needed to be moved back into place and that painkiller should be administered. Smith declined local anesthetic and instead requested “Dilaudid” (a morphine derivative similar to heroin). A doctor administered Dilaudid, and splinted Smith’s finger. Smith returned to the hospital days later; his finger was swollen and infected. It was no longer medically alive. The doctor told Smith that amputation might be necessary. Before Smith could return for another appointment, he was arrested and again alleged mistreatment (officers kneeling on and slapping his injured hand), which the officers again deny. After processing Smith at the station, officers returned him to the hospital, where the finger was amputated. At trial on Smith’s claims of excessive force and failure to provide medical attention, the district court allowed the defense to present evidence of Smith’s heroin use prior to one of the arrests. The jury found for the defendants. The Seventh Circuit affirmed. View "Smith v. Hunt" on Justia Law

In 2006, the DEA interviewed Bennett concerning transactions involving marijuana, ecstasy, and crack cocaine. Before the interview, the government agreed not to use Bennett’s statements against him, provided that Bennett not later take a position inconsistent with his statements. Bennett admitted that he had supplied all three drugs to a government informant. After the interview, Bennett fled. A grand jury later indicted him. In 2010, Bennett was arrested living under an assumed name in Georgia. During negotiations, Bennett, disavowed some of the proffer statements, but eventually pled guilty to possession of ecstasy and marijuana with intent to distribute. He was warned that the cocaine might be considered “relevant conduct” at sentencing. The probation office concluded that 33.9 grams of crack cocaine were part of the offense conduct, used it to calculate a recommended base guideline sentence, and recommended a two-level enhancement for being “an organizer, leader, manager, or supervisor” U.S.S.G. 3B1.1(c). The report did not recommend crediting Bennett for accepting responsibility. The district court overruled Bennett’s objections, finding that Bennett’s objections constituted a position inconsistent with his proffer statements and breached the proffer agreement, thereby unlocking the entire content of the interview for sentencing purposes. The Seventh Circuit affirmed. View "Unted States v. Bennett" on Justia Law

Patrick made his living as a pimp, trafficking minors and adult women. In 2010 he was arrested in connection with the shooting death of another Milwaukee pimp and was charged with sex trafficking under 18 U.S.C. 371 and 1591. Patrick pleaded guilty to four counts. The district court sentenced him to 360 months in prison, consecutive to a 20-year state court sentence that Patrick was serving. The Seventh Circuit vacated the sentence, holding that the district court committed procedural error by failing to discuss Patrick’s cooperation with the authorities . View "United States v. Patrick" on Justia Law

The railroad fired a locomotive engineer, Narron. The union filed a grievance, which eventually came before the National Railroad Adjustment Board, which ordered the railroad to reinstate Narron with back pay but authorized the railroad to offset the back pay by any earnings that he had obtained between his firing and his reinstatement. The union filed a petition in the district court challenging that part of the award. The district judge remanded for determination of whether Narron had had any such earnings and ordered the earnings-offset provision vacated. The Seventh Circuit vacated the order, holding that the district court exceeded its authority. A district court may set aside a Board order only “for failure of the division to comply with the requirements of [the Railway Labor Act]” or “to conform, or confine itself, to matters within the scope of the division’s jurisdiction,” or “for fraud or corruption by a member of the division,” 45 U.S.C. 153. View "Bhd of Locomotive Eng'rs & Trainment v. Union Pac. R.R. Co." on Justia Law

James has been an employee of Hyatt Regency Chicago since 1985. In 2007, James took a leave of absence due to an eye injury that occurred outside of work. James filed suit in 2009 claiming that Hyatt violated his rights under the Family Medical Leave Act, 29 U.S.C. 2601 and the Americans with Disabilities Act, 42 U.S.C.12101. During discovery, the district court denied James’ motions to compel and awarded Hyatt a portion of attorney’s fees it expended responding to motions. The court subsequently granted Hyatt summary judgment. The Seventh Circuit affirmed. In light of the limitations imposed by his doctors, Hyatt did not violate the FMLA or the ADA in refusing to allow James to return to work for “light duty” before doctors released him to perform functions essential to his position. James used discovery as a weapon, rather than as a tool to gather evidence. View "James v. Hyatt Regency Chicago" on Justia Law

A Lithuanian national, Smykiene entered the U.S. in 1995 on a visitor’s visa. Six months after it expired, she was arrested by Border Patrol officers in New York. The officers gave her an order to show cause why she should not be deported and also told her to provide an address. The Immigration Court sent certified mail to the address that Smykiene with her hearing notice. The Postal Service returned the mail with the notation “Attempted—Not Known.” There was no follow-up. Smykiene did not appear and the immigration judge ordered her deported. A year later she married a man who, two years after that, became a naturalized U.S. citizen. In 2010, when authorities located her, Smykiene swore that she had not received the notice and that at the time she was handed the order to show cause she couldn’t understand English. The Board of Immigration Appeals affirmed an order of removal. The Seventh Circuit remanded, stating that: “The government cites no authority for the proposition that an innocent mistake, especially of the kind likely to be made by a newcomer … from a non-English-speaking country, forfeits the right to reopen an order of removal in absentia.” View "Smykiene v. Holder" on Justia Law

The Hancock Center in Chicago is managed by Shorenstein (several related companies). Shorenstein hired an architectural firm, MCA, to design and oversee renovation of windows and exterior walls; MCA hired a general contractor. In 2002, a scaffold fell from the 42nd floor in a high wind and killed three people in cars, severely injuring several others. Shorenstein settled with plaintiffs in 2006 for a total of $8.7 million. MCA’s contract with Shorenstein had required MCA to obtain liability insurance covering the owner, Shorenstein, and any other party specified by the owner. MCA obtained the required insurance policy from AMICO, covering “any person or organization to whom [MCA is] obligated by virtue of a written contract.” There was a dispute concerning which Shorenstein entities were covered. Shorenstein was awarded $959,866.02 by the district court. The Seventh Circuit affirmed in part and reversed in part, holding that the court erred in apportioning the award among the Shorenstein entities. The court rejected AMICO’s arguments that the claim was barred by an exclusion of coverage for injuries “due to rendering or failure to render any professional service” by an insured and that Shorenstein gave up its right to indemnity by AMICO by asking its other insurer for indemnification. View "Nat'l Union Fire Ins. Co. of Pittsburgh v. Am. Motorists Ins. Co." on Justia Law