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

Buyers of Sears washing machines complained of a defect that causes mold, others complained of a control unit defect that stops the machine inopportunely. The district court denied certification of the class complaining about mold and granted certification of the class complaining about the control unit defect. The Seventh Circuit reversed with respect to the mold claims. The Supreme Court remanded for reconsideration in light of Comcast Corp. v. Behrend, 133 S. Ct. 1426 (2013). The Seventh Circuit reinstated its prior order, stating that there was a single, central, common issue of liability: whether the washing machine was defective. Complications that arise from the design changes and from separate state warranty laws can be handled by creation of subclasses. View "Butlerl v. Sears, Roebuck & Co." on Justia Law

During the 1970s and 1980s, American Agri‐Corp organized several limited partnerships, for which the company served as general partner. American solicited high‐income individuals to serve as limited partners, investing in supposed agricultural ventures. According to the IRS, the actual purpose was to shelter the income of limited partners from taxation. Plaintiffs were each limited partners (or spouses) in at least one partnership that was audited by the IRS during the mid‐1980s. Several years later, the IRS concluded that the partnerships were, essentially, tax‐avoidance schemes .In 1990 and 1991, the IRS issued Final Partnership Administrative Adjusts for the partnerships and disallowed several listed farming expenses and other deductions for the 1984 or 1985 tax years. The Tax Court consolidated cases, held that the IRS action was not time‐barred, and determined that the partnerships had engaged in “transactions which lacked economic substance” that resulted in a substantial distortion of income and expense. The district court held that it lacked subject‐matter jurisdiction over the taxpayers’ claims that the assessments were untimely and improperly included penalty interest. The Seventh Circuit affirmed. The determinations at issue are attributable to partnership items over which courts lack subject‐matter jurisdiction. View "Acute Care Specialists II v. United States" on Justia Law

Scottie Pippen won six championship rings with the Chicago Bulls and was named to the National Basketball Association’s list of the 50 greatest players in its history. Since he retired in 2004, he has lost much of the fortune he amassed during his playing days through bad investments. He has pursued multiple lawsuits against former financial and legal advisors. The media learned of Pippen’s problems and several news organizations incorrectly reported that he had filed for bankruptcy. Pippen contends that the false reports have impaired his ability to earn a living by product endorsements and appearances. He filed suit, alleging that he was defamed and cast in a false light. The district court dismissed, finding that the falsehoods did not fit any of the categories of statements recognized by Illinois law to be so innately harmful that damages may be presumed and that the complaint did not plausibly allege that the defendants had published the falsehoods with knowledge the statement was false or reckless disregard of whether it was false, as required for a public figure such as Pippen to recover defamation damages. The Seventh Circuit affirmed. View "Pippen v. NBC Universal Media LLC" on Justia Law

Camarena, a Mexican citizen, was admitted to the U.S. for permanent residence in 1977, at age 10. He did not become a citizen. After a felony conviction for indecent solicitation of a minor, his permanent-residence status was revoked, and he was ordered removed. Camarena is homosexual and HIV positive and claims that gays are persecuted in Mexico and that gays infected by HIV face extra risk. Although he is not eligible for asylum, he applied for withholding of removal under 8 U.S.C. 1231(b)(3), and relief under the Convention Against Torture. The immigration judge granted his application, finding, on the basis of statistics and expert testimony that Camarena probably would be killed or injured in Mexico as a result of his sexuality and disease. The BIA remanded; the IJ adhered to his position. The BIA then reversed and, after a remand, adhered to its position. The BIA accepted the IJ’s findings of historical fact but disagreed about the risk implied by those facts. The Seventh Circuit again remanded, for the BIA to consider, not whether aggregate data imply that Camarena is likely to be killed, but whether the IJ clearly erred in finding that he is more likely than not to be persecuted. View "Rosiles-Camarena v. Holder" on Justia Law

After entry of a judgment of $650,000 in the Northern District of Texas as a sanction for failure to engage in discovery, Sharif filed for Chapter 7 bankruptcy in the Northern District of Illinois. WIN, a judgment creditor, filed an adversary complaint, seeking to prevent discharge of Sharif’s debts under 11 U.S.C. 727, and a declaratory judgment that a trust of which Sharif was trustee was actually Sharif’s alter ego. Sharif failed to respond to WIN’s and the bankruptcy trustee’s discovery requests. Sharif eventually tendered some discovery, far short of full compliance. The bankruptcy judge entered default judgment in WIN’s favor and awarded attorney’s fees. After entry of judgment but before briefing on an appeal, the Supreme Court held that a bankruptcy court lacked constitutional authority to enter final judgment on a state‐law counterclaim against a creditor, even though Congress had granted it statutory authority to do so. When Sharif finally raised the issue, the district judge held that Sharif’s failure to raise it earlier constituted waiver. The Seventh Circuit reversed, holding that the constitutional objection is not waivable because it implicates separation‐of‐powers principles. The bankruptcy judge lacked constitutional authority to enter a final judgment on the alter‐ego claim but had constitutional authority to enter final judgment on objections to discharge of Sharif’s debts. View "Sharif v. Wellness Int'l Network" on Justia Law

In 2009, a political blog and a Chicago television station began reporting that Illinois State Rep. Froehlich offered his constituents reductions in county property taxes in exchange for political favors. The reports highlighted Satkar Hospitality, reporting that it and its owners donated hotel rooms worth thousands of dollars to Froehlich’s campaign. Satkar Hospitality and Capra appealed their tax assessments for 2007 and 2008 and won reductions, but after the publicity about Rep. Froehlich, both were called back before the Board of Review for new hearings. They claim that in these second hearings, the Board inquired not into the value of their properties but into their relationships with Rep. Froehlich. The Board rescinded the reductions. Satkar and Capra sued the Board and individual members under 42 U.S.C. 1983. The district courts concluded that the individual defendants were entitled to absolute quasi‐judicial immunity and the Board itself is not. The Seventh Circuit affirmed, but also held that the damages claims against the Board cannot proceed. They are not cognizable in federal courts, which must abstain in suits for damages under 42 U.S.C. § 1983 challenging state and local tax collection, at least if an adequate state remedy is available. View "Satkar Hospitality, Inc. v. Rogers" on Justia Law

Safety National sold an excess liability insurance policy to TKK, to cover excess losses resulting from liability imposed “by the Workers’ Compensation or Employers’ Liability Laws” of Illinois. The widow of a former TKK employee sued, alleging that TKK’s negligence caused the employee to become ill with and die from mesothelioma. The claim was subject to an affirmative defense: the Illinois Workers’ Occupational Diseases Act bars common law claims by or on behalf of an employee against a covered employer “on account of damage, disability or death caused or contributed to by any disease contracted or sustained in the course of the employment.” After Safety National denied coverage, TKK filed suit. The district court granted TKK summary judgment for its costs in defending and settling the widow’s suit, reasoning that the reference to “Employers’ Liability Laws” included the common law negligence claim even if the claim ultimately must fail because of the statutory bar. The court denied TKK’s claim for attorney fees and costs in the coverage lawsuit itself, except a modest award for what the court considered a vexatious motion to reconsider. The Seventh Circuit affirmed. The key policy term, “Employers’ Liability Laws,” is broad enough to include claims under the common law, including “groundless” claims. View "TKK USA, Inc. v. Safety Nat'l Cas. Corp." on Justia Law

Okoro was arrested without a warrant on suspicion of a misdemeanor property crime. For unknown reasons, Okoro never received a “Gerstein hearing” to determine probable cause during his two months of incarceration. Okoro, then 23, had Type I diabetes, which he could control by monitoring his blood sugar levels. While he was in college, however, he was diagnosed with schizophrenia, which compromised his ability to care for his diabetes. Immediately after his arrest, Okoro’s relatives began calling to inform correctional employees and medical staff of his conditions. Okoro was detained in his cell, usually in isolation, and was dependent on jail employees and medical staff to monitor his blood sugar level and provide insulin shots. On December 23, 2008, Okoro collapsed in his cell. An autopsy revealed that Okoro’s death was the result of diabetic ketoacidosis, a buildup of acidic ketones in the bloodstream that occurs when the body runs out of insulin. A doctor and a nurse, employed by the healthcare company that contracts with the jail, moved for dismissal of the estate’s suit under 42 U.S.C. 1983. The district court denied their qualified immunity claims. The Seventh Circuit affirmed, stating that the record easily supports a finding of deliberate indifference to Okoro’s serious medical condition. View "Currie v. Chhabra" on Justia Law

In 2005, 10‐year‐old “Jessica” reported that she had been sexually assaulted by a man named “Ron” several years earlier. Based on her description, where she lived at the time, and the sleeping arrangements of the home, Jessica’s mother identified McElvaney, who had been her live‐in boyfriend and estimated that the assault occurred between August 2001 and February 2002. Based on additional information, McElvaney was charged with assaulting Jessica between September 26, 2001, and December 19, 2001. McElvaney’s attorney Celebre, moved to require the district attorney to indicate with greater particularity the time of the alleged assault and to prohibit modification of the time period at trial so that McElvaney could formulate an alibi and identify potential supporting witnesses. At a hearing, Celebre conceded that the state had authority to allege the three‐month date range. The trial court judge said that he would not allow the state to amend at trial. Convicted under Wisconsin law, McElvaney was sentenced to 15 years. Wisconsin courts rejected appeals asserting ineffective assistance of counsel based on Celebre’s failure to object to the way in which Jessica’s videotaped testimony was presented. State courts then denied post-conviction relief based on failure to pursue the more-specific-date issue. The Seventh Circuit affirmed the district court’s rejection of a federal habeas petition. View "McElvaney v. Pollard" on Justia Law

Norman Green was convicted of first-degree murder. While an inmate, Green decided to adopt a spiritual name: Prince Atum-Ra Uhuru Mutawakkil. Atum-Ra was an Egyptian deity representing a fusion of the gods Atum and Ra; uhuru is the Swahili word for freedom; and al-Mutawakkil was an Abbasid caliph who ruled in Samarra. The addition of “Prince” is a mystery. He does not contend that he chose the name as part of his devotion to a particular faith. Wisconsin’s current policy is to permit an inmate to use the name on the conviction (the committed name), or the committed name in conjunction with a second name, but not to use a second name by itself unless a court grants a petition for change of name. Green claims that he suffers injury because, for example, a letter addressed to “Prince Atum-Ra Uhuru Mutawakkil” will be returned to the sender, while a letter addressed to “Norman Green” or to both names will be delivered to him. The Seventh Circuit rejected an equal protection claim and a claim under the Religious Land Use and Institutionalized Persons Act, 42 U.S.C. 2000cc, finding that the policy does not create a “substantial burden.” View "Green. v. Huibregtse" on Justia Law