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

The debtors borrowed money secured by mortgages on real estate. The mortgages were recorded by the lenders to ensure the priority of their liens. The recorded mortgages did not state the maturity date of the secured debt or the interest rate. Those terms were included in the promissory notes, which were incorporated by reference in the mortgages. The debtors filed for bankruptcy. The trustees filed adversary complaints under 11 U.S.C. 544(a)(3), seeking to avoid the mortgages because they did not state the maturity dates or interest rates. In one case, the bankruptcy court granted summary judgment in favor of the trustee, but the district court reversed and granted judgment for the lender. In the other case, the bankruptcy court granted summary judgment in favor of the lender. The Seventh Circuit held that the trustee’s so-called “strong-arm” power to “avoid … any obligation incurred by the debtor that is voidable by—a bona fide purchaser of real property … from the debtor” could not be used to avoid the mortgages under a 2013 amendment to the Illinois statute on the form for recorded mortgage, 765 Ill. Comp. Stat. 5/11. View "Bruegge v. Farmer State Bank of Hoffman" on Justia Law

After receiving complaints of drug trafficking, police arranged an undercover controlled purchase of crack cocaine from a lower level apartment in Rockford. Days later, they obtained a warrant to search the “lower apartment.” The police knew that hours earlier, a shooting occurred at the residence and that aggressive pit bulls lived on the premises. After knocking and receiving no response, investigators forced their way into a foyer with two open doors: one led to the first floor apartment, the other led to ascending stairs. A dog ran from officers and up a few steps, before turning and charging the officer, who shot and killed the dog and proceeded up the stairs to perform a protective sweep. As he ran through the upper kitchen, he saw large chunks of an off-white substance on the counter with scales. In the bedroom he discovered Starnes. The officer detained and escorted him downstairs. While other officers were seeking a warrant for the upper apartment, other detectives searched the lower apartment and seized semi-automatic rifles, ammunition magazines, a loaded hand gun, and drug paraphernalia. After executing a warrant on the second floor, they seized Starnes’ photo identification cards, 290 grams of cocaine, 72.5 grams of cocaine base, $36,186 in cash, and more drug paraphernalia. The court declined to suppress evidence from the second floor; Starnes entered a conditional plea to possession with intent to distribute cocaine, 21 U.S.C. 841(a)(1), possessing a firearm as a felon, 18 U.S.C. 922(g)(1) and possessing a firearm in furtherance of a drug trafficking offense, 18 U.S.C. 924(c)(1)(A). The Seventh Circuit affirmed.View "United States v. Starnes" on Justia Law

The Seventh Circuit considered appeals by Illinois and Illinois counties and a Wisconsin county of district court holdings that those governmental bodies cannot levy a tax on sales of real property by Fannie Mae (Federal National Mortgage Association) and Freddie Mac (Federal Home Loan Mortgage Corporation). Although both are now private corporations, the relevant statutes provide that they are “exempt from all taxation now or hereafter imposed by any State … or local taxing authority, except that any real property of the corporation shall be subject to State … or local taxation to the same extent as other real property,” 12 U.S.C. 1723a(c)(2), 12 U.S.C. 1452(e). The Seventh Circuit affirmed. A transfer tax is not a tax on realty. After 2008 Fannie Mae owned an immense inventory of defaulted and overvalued subprime mortgages and is under conservatorship by the Federal Housing Finance Agency. The states essentially requested the court to “pierce the veil,” in recognition of the fact that if the tax is paid, it will be paid from assets or income of Fannie Mae or Freddie Mac, but their conservator is the United States, and the assets and income are those of entities charged with a federal duty. View "Milwaukee Cnty v. Fed. Nat'l Mortg. Ass'n" on Justia Law

Immunosciences developed and sold medical tests and testing materials. In 2007, NeuroSciences wanted to expand its offerings. Immunosciences and NeuroScience decided to collaborate, but the relationship fell apart within two years. Immunosciences sued. In the first trial, a jury rejected a claim that NeuroScience did not pay what it had contracted to pay for medical testing materials, but the district judge ordered a new trial, concluding that the verdict was undermined by flawed special verdict questions. The jury in the second trial found for Immunosciences but awarded much less money than it was seeking. NeuroScience appealed, claiming that the court’s grant of a new trial was an abuse of discretion. Immunosciences argued that the court abused its discretion by allowing NeuroScience to argue in the new trial that the parties had orally modified their written contract and that NeuroScience breached a separate confidentiality agreement by continuing to use Immunosciences’ testing methods after the parties ended their business relationship. The jury in the first trial had awarded nearly $1.2 million on that claim, but the district court granted judgment as a matter of law for NeuroScience, explaining that Immunosciences had relied on an impermissible damages theory. The Seventh Circuit affirmed. View "Vojdani v. Pharmasan Labs, Inc." on Justia Law

In 2008 the EEOC received a charge of discrimination from a woman who claimed Mach Mining had denied her applications for coal mining jobs because of her gender. After investigation, the agency determined there was reasonable cause to believe Mach had discriminated against a class of female job applicants at its Johnston City site and notified the company of its intention to begin informal conciliation. The parties did not reach agreement. In 2011, the EEOC told Mach that further efforts would be futile and filed a complaint two weeks later. Mach asserted failure to conciliate in good faith. The district court certified for interlocutory appeal the question whether an alleged failure to conciliate is subject to judicial review in the form of an implied affirmative defense to an EEOC suit. The Seventh Circuit disagreed with other circuits and responded that it is not. Title VII of the Civil Rights Act directs the agency to try to negotiate an end to an employer’s unlawful employment practices before seeking a judicial remedy, 42 U.S.C. 2000e-5(b), but finding the requirement to create an implied failure-to-conciliate defense would add an unwarranted mechanism by which employers could avoid liability for unlawful discrimination. Such a defense would be contrary to the statutory prohibition on using what was said and done during conciliation “as evidence in a subsequent proceeding.” View "Equal Emp't Opportunity Comm'n v. Mach Mining, LLC" on Justia Law

Riding as a prisoner in the back of a patrol van, Fluker was injured when the van stopped short to avoid a collision and he tumbled off his seat. Roy and his wife filed suit, alleging various injuries. The district court granted summary judgment in favor of the defendants for failure to exhaust administrative remedies under the Prisoner Litigation Reform Act, 42 U.S.C. 1997e(a) by filing a grievance, and alternatively, because the Flukers’ suit could not succeed on the merits. The Seventh Circuit affirmed. View "Fluker v. Kankakee Cnty." on Justia Law

Horsfall worked as a real estate agent for First Weber, 2001-2002, and was the listing agent on First Weber’s contract with Call, who was trying to sell property. The contract gave First Weber exclusive rights collect commissions for sale of the property during the listing period and an exclusive right to collect commissions from sales to defined “protected buyers” for one year after the listing expired. The Acostas made an offer on the property and became “protected buyers.” Call’s contract with First Weber ended in August and at the same time, Horsfall left First Weber to establish his own brokerage, Picket Fence. In October, the Acostas contacted Horsfall. Without involving First Weber, Horsfall resuscitated the transaction with Call. The Acostas and Call executed a sales contract for the Call property. Picket Fence received a $6,000 commission, inconsistent with Horsfall’s status as First Weber’s agent under the earlier contract and in violation of Wisconsin real estate practice rules. Six years later, First Weber sued Horsfall in state court, asserting r breach of contract, tortious interference, and unjust enrichment. The state court entered a judgment against Horsfall for $10,978.91. Horsfall filed for Chapter 7 bankruptcy, listing First Weber as a creditor. First Weber responded that its judgment was non‐dischargeable under 11 U.S.C. 523(a)(6), as involving “willful and malicious injury.” The bankruptcy court, district court, and Seventh Circuit found the debt dischargeable. View "First Weber Grp., Inc. v. Horsfall" on Justia Law

Dalton worked in coal mine jobs from 1957 until 1991 and was exposed to substantial coal and rock dust. He developed trouble breathing; he quit his job and was never employed again. In 1999 Dalton sought benefits under the Black Lung Benefits Act, 30 U.S.C. 901‐45. In 2003, an ALJ awarded benefits, finding that Dalton was a “miner,” that Frontier was the “responsible operator,” and that Dalton had established clinical pneumoconiosis, based on the opinions of pulmonary experts, but could not determine the date of onset of total disability, so Dalton’s benefits began in 1999. The Board vacated, finding that the ALJ had not properly evaluated CT scans. The ALJ again awarded benefits beginning in 1999. In 2007, the case was again remanded. A new ALJ reweighed the evidence and ordered benefits to begin in 1999. Dalton died in 2007. The ALJ denied a motion by Dalton’s children to substitute as claimant. The Board dismissed an appeal and a cross‐appeal. The District Director returned the case to its third ALJ, who allowed the children’s motion, modified the date for commencement of benefits to 1991, and awarded attorneys’ fees and expenses. The Board vacated with respect to the onset date. The Seventh Circuit remanded for entry of the 1991 onset date, rejecting a claim that the children lacked standing. Substantial evidence supported the ALJ’s finding that 1991 marked the time of onset for Dalton’s total disability on account of pneumoconiosis. View "Dalton v. Office of Workers' Compensation Programs" on Justia Law

In 2013, the Governor of Wisconsin signed into law a statute that prohibits a doctor, under threat of heavy penalties, from performing an abortion unless he has admitting privileges at a hospital no more than 30 miles from the clinic in which the abortion is performed. Wis. Stat. 253.095(2). Planned Parenthood and others challenged the law under 42 U.S.C. 1983. The district court entered a preliminary injunction against enforcement of the law. The Seventh Circuit affirmed. The court noted that the seven doctors affected by the law had applied for, but after five months, had not been granted, admitting privileges; that all Wisconsin abortion clinics already have transfer agreements with local hospitals to facilitate transfer of clinic patients to the hospital emergency room. A hospital emergency room is obliged to admit and to treat a patient requiring emergency care even if the patient is uninsured, 42 U.S.C. 1395dd(b)(1). Had enforcement of the law, with its one-weekend deadline for compliance, not been stayed, two of the state’s four abortion clinics would have had to shut down and a third clinic would have lost the services of half its doctors. View "Planned Parenthood of WI v. Van Hollen" on Justia Law

Charleston began his fourth year at the College of Medicine in 2010, having finished his Obstetrics and Gynecology clinical rotation in June. In September, Charleston’s preceptors submitted a complaint, asking that Charleston be required to repeat the rotation, alleging that Charleston had committed errors in written work (including plagiarism), did not complete quizzes until after the rotation’s conclusion, did not have required signatures in his case log, spent four weeks without a preceptor, and he did not perform well enough to pass. The Student Progress Committee held a meeting; Charleston was not permitted to attend, but submitted a letter. The Committee recommended that Charleston be assigned a mentor in the future. Without notice to Charleston, the complaint and Charleston’s letter were forwarded to the Executive Committee with a new letter from Hall, Associate Dean for Student Affairs for the College of Medicine, alleging that in 2008, Charleston had acted “unprofessionally” while serving as a teaching assistant. Charleston had no opportunity to address Hall’s allegation, which, he claims, was false. The Executive Committee decided that Charleston should be dismissed. Internal appeals failed. His suit under 42 U.S.C. 1983, claiming procedural due process, substantive due process, and equal protection violations, was dismissed for failure to plead sufficient facts to establish a protected property interest in his continued education, nor to demonstrate that the university singled him out for unfavorable treatment. The Seventh Circuit affirmed.View "Charleston v. Bd. of Trs. of the Univ. of IL" on Justia Law