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

Spehar, hired by CMGT to assist in finding financing for its business, sued CMGT over a dispute related to this agreement and obtained a $17 million default judgment against CMGT, which had no assets. Spehar Capital devised a plan to: force CMGT into bankruptcy; convince the bankruptcy trustee to bring a malpractice action against CMGT’s law firm on the theory that but for the firm’s negligence, Spehar would not have obtained the default judgment; win the malpractice action or force a settlement; obtain a share of the payment to the bankruptcy estate. The bankruptcy trustee sued CMGT’s law firm, Mayer Brown. The district court granted Mayer Brown summary judgment, reasoning that the doctrine of judicial estoppel barred the inconsistencies in the suit, based on undisputed facts. The Seventh Circuit affirmed. If the trustee were to prevail, there would be a clear impression that a court was misled. It would be “absurd” for Spehar to recover when proving the causation element of malpractice would require the trustee to prove that Spehar was not entitled to prevail in the earlier suit. View "Grochocinski v. Mayer, Brown, Rowe & Maw, LLP" on Justia Law

Swanson purchased a lakeside home, next to the home of Whitworth, the elected mayor of Chetek. Swanson obtained a permit for “remodel-repair” and began work, including installation of a three-foot high fence between his property and Whitworth’s and along the street. Whitworth repeatedly told a building inspector that he should not have issued a permit; repeatedly entered the Swanson house without permission; used his influence to cause another inspector to delay a fence permit; told the fence installation team that Swanson was a drug dealer and unlikely to pay; and caused municipal prosecution of Swanson for construction of the fence in violation of a five-foot setback that did not apply to Swanson’s fence. Meanwhile, another neighbor of Swanson, installed a fence that encroached on part of Swanson’s property, without a permit, and was not prosecuted. Swanson filed a class-of-one equal protection suit and defamation and slander claims. The magistrate judge granted summary judgment for Whitworth, finding that Swanson did not show a similarly situated individual who received more favorable treatment. The Seventh Circuit reversed. A clear showing of animus, absent a “robust comparison” to a similarly situated individual, may sustain a class-of-one equal protection claim. View "Swanson v. Whitworth" on Justia Law

Union members, working at Navistar’s Indianapolis engine-manufacturing plant, were represented by a union and were subject to a collective-bargaining agreement. They claim that on unidentified dates they were laid off, ostensibly for lack of work, but that Navistar actually subcontracted their work to nonunion plants in violation of the CBA and that Navistar failed to recall them as work became available. They claim to have filed hundreds of grievances that were diverted or stalled. In 2009, Navistar closed the Indianapolis plant. The union members sued. When union members sue their employer for breach of contract under the Labor Management Relations Act, 28 U.S.C. 185, they must also claim breach of their union’s duty of fair representation. The district court dismissed, finding that the plaintiffs had failed to adequately plead the prerequisite union breach of fair representation. A separate interference-with-benefits claim under the Employment Retirement Income Security Act, 29 U.S.C. 1001, was resolved by summary judgment in favor of Navistar. The 29 remaining plaintiffs appealed only the LMRA claim. The Seventh Circuit affirmed, stating that all of the allegations concerning the duty of fair representation were conclusory, so that the complaint lacked the required factual content. View "Yeftich v. Navistar, Inc." on Justia Law

Loffredi’s securities brokerage firm offered investments in certificates of deposit, mutual funds, and Treasury bills. Instead of actually purchasing investments requested by customers, Loffredi diverted their money to his personal expenses and business debts. He fraudulently misappropriated about $2.8 million over four years. A customer alerted the Securities and Exchange Commission to irregularities in his financial statements. After an investigation, Loffredi was charged with five counts of mail fraud, 18 U.S.C. 1341. He pleaded guilty to one count. The judge applied a two-level upward adjustment under U.S.S.G. 2B1.1(b)(2)(A)(i) for an offense involving at least 10 victims and imposed a sentence of 78 months. The presentence report counted as victims each of the 14 defrauded customers whose funds Loffredi had misappropriated. Loffredi argued that the only victim of the offense was his broker-dealer parent firm, which had reimbursed the losses of 12 of the 14 customers (Loffredi reimbursed the other two). The Seventh Circuit affirmed, noting that Loffredi never asserted that his fraud was painless for his customers and rejecting his “all-or-nothing” defense that the customers cannot be victims if they were reimbursed. View "Unted States v. Loffredi" on Justia Law

Serrano pled guilty to attempted first degree murder and possession of cannabis in exchange for a total sentence of 15 years in prison. In an unrelated case, Villanueva pled guilty to first degree murder in exchange for a 25-year sentence. Each claims that the plea agreements did not mention supervised release even though Illinois imposes a mandatory three-year term of supervised release (MSR) on murder and attempted murder charges. At the time, Illinois law did not require listing MSR on the conviction and sentencing order. At both plea hearings, however, the state judges mentioned MSR and obtained the defendants’ understanding that the law imposed such a term. Illinois law now requires that the term of MSR be specified in the sentencing order. Serrano’s conviction became final in 2002; Villanueva’s conviction became final in 2004. The two claim to have learned of the MSR while in prison. After extensive proceedings, state courts denied their petitions for post-conviction relief, which argued that the state denied them the benefit of their plea bargains in violation of Santobello v. New York, 404 U.S. 257 (1971). The Supreme Court denied certiorari. The federal district court denied petitions for habeas corpus. The Seventh Circuit affirmed. View "Villanueva v. Anglin" on Justia Law

During a crack cocaine deal between a confidential informant and a known crack dealer (Blake), a concealed video and audio recording device captured Gulley, Blake’s driver, getting into the CI’s car and exchanging a bag of crack cocaine for $200. Charged with knowingly and intentionally distributing five or more grams of a mixture and substance containing crack cocaine, 21 U.S.C. 841(a) and 841(b)(1)(B), Gulley argued that he did not “knowingly or intentionally” deliver a controlled substance. The prosecution presented testimony that Gulley admitted to driving Blake to a drug deal with the CI two days after the charged offense and Gulley’s admission that he knew Blake was a crack dealer, that he frequently drove Blake, and that he had made a previous “delivery” for Blake. There was evidence that crack cocaine, ecstasy, and a firearm were found at Blake’s stash house on the day the two were arrested. The district judge sentenced Gulley to 327 months in prison, reasoning that precedent prohibited retroactive application of the Fair Sentencing Act of 2010. The precedent was subsequently overturned. The Seventh Circuit affirmed Gulley’s conviction, rejecting challenges to admission of certain testimony and evidence, but vacated his sentence. View "United States v. Gulley" on Justia Law

Findlay and his uncle, Howey, live on adjacent lots. Findlay found a surveillance camcorder set up near the property line and called the Sheriff’s Office to file an abandoned property report. Howey had set up the camera because he suspected Findlay of trespass and vandalism. Deputy Lendermon responded. With video running, Findlay made comments suggesting he had trespassed. Lendermon decided to confiscate the memory chip containing the statements as evidence. The memory chip separated from the camera and fell to the floor. Findlay says Lendermon tackled him as he reached for the chip. Lendermon says he simply grabbed Findlay’s arm to prevent him from picking up the chip. Findlay sued under 42 U.S.C. 1983, claiming excessive use of force. The district court denied Lendermon’s motion for summary judgment. The Seventh Circuit reversed. Findlay did not carry his burden of showing the violation of a clearly established right, so Lendermon is entitled to qualified immunity. View "Findlay v. Lendermon" on Justia Law

Richards was followed from the scene of a controlled drug buy conducted by an undercover officer and surveillance. Although the car did not commit any traffic violations, an officer stopped him, searched the car, and found 10 kilograms of cocaine in a backpack in the trunk. Richard claimed that the car belonged to his cousin, that he thought the backpack contained cash, and that he was the unwitting stooge of California drug dealers. The district judge denied his motion to suppress and his motion to exclude recorded phone calls in which Richard discussed unrelated drug activity; he was convicted of possession with intent to distribute. The Seventh Circuit vacated and remanded, holding that the government improperly relied on the phone calls to argue propensity. View "United States v. Richards" on Justia Law

In 1987, Kenseth underwent surgical gastric banding, covered by her insurer. About 18 years later Dr. Huepenbecker, advised another operation for severe acid reflux and other problems resulting from the first surgery. Her employer provided insurance through Dean, a physician-owned integrated healthcare system, specifically excluding coverage for “surgical treatment or hospitalization for the treatment of morbid obesity” and services related to a non-covered benefit or service. Plan literature refers coverage questions to the customer service department. Huepenbecker worked at a Dean-owned clinic, scheduled surgery at a Dean-affiliated hospital, and instructed Kenseth to call her insurer. Kenseth spoke with a customer service representative, who stated that Dean would cover the procedure. After the surgery, Dean declined coverage. Kenseth was readmitted for complications. Dean denied coverage for the second hospitalization. Kenseth pursued internal appeals to obtain payment of the $77,974 bill before filing suit under ERISA, 29 U.S.C. 1001, and Wisconsin law. The district court granted Dean summary judgment. The Seventh Circuit affirmed as to estoppel and pre-existing condition claims, but remanded concerning breach of fiduciary duty. After the district court again entered summary judgment for Dean, the Supreme Court decided Cigna v. Amara, clarifying relief available for a breach of fiduciary duty in an ERISA action. The Seventh Circuit remanded, stating that Kenseth has a viable claim for equitable relief. View "Kenseth v. Dean Health Plan, Inc." on Justia Law

Milwaukee police officer Cates sexually assaulted Lemons while responding to her 911 call and was convicted of violating the woman’s civil rights while acting under color of law, 18 U.S.C. 242. Cates reported problems with his attorney. The district court delayed sentencing. Two months after appointment of new counsel and five months after the deadline for filing post-conviction motions, Cates’ new attorney requested an extension of time to file post-conviction motions. The district court denied the motion and sentenced Cates to 288 months in prison. The Seventh Circuit affirmed, agreeing that the circumstances did not warrant a finding of excusable neglect. View "United States v. Cate" on Justia Law