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

Brothers Patrick and Thomas each owned one‐third of the stock of Commercial Light, a Chicago electrical contractor. Between 1982 and the 2008 sale of the company, Thomas was the CEO, board chairman, and president. The other officers were the company’s treasurer, and its executive vice‐president. The board of directors had only two members: Thomas and a lawyer. Patrick took no part in the company’s management. Patrick sued, claiming that when Morris became executive vice‐president in 1992, he, with Thomas’s approval, started jacking up the salaries and bonuses paid so that the compensation of the three officers soared, totaling $22 million between 1993 and 2000, and that the lawyer on the board rubber‐stamped Thomas’s compensation decisions. The Seventh Circuit affirmed a jury verdict finding breach of fiduciary duty. The jury did not have to find that the compensation was excessive in order to find a breach of fiduciary duty by concealment. Illinois allows as a remedy for breach of fiduciary duty a forfeiture of all the fiduciary’s earnings during the period of breach. The court speculated on why the highly-educated Patrick did not discover the concealment until several years after the sale, but noted that the appeal only concerned jury instructions. View "Halperin v. Halperin" on Justia Law

In 1998, a jury found Stevenson guilty of various counts relating to his possession of crack cocaine in connection with a Chicago drug ring. The district court treated the Guidelines as mandatory, found that he qualified as a career offender under U.S.S.G. 4B1.1, which would have made his offense level 34 had he not already exceeded it, and imposed a 292-month sentence. In 2010, Stevenson filed his first section 3582(c) motion, based on Amendment 706 to the Guidelines. The district court reduced his sentence to 262 months’ imprisonment, the low end of the sentencing range for an offense level of 34 and criminal history category of VI. Stevenson filed a second 3582(c) motion, based on Amendment 750. The district court denied the motion because Stevenson was a career offender. The Seventh Circuit affirmed, stating that it would contradict the Sentencing Commission’s policy statements to sentence Stevenson below the applicable career offender guideline. View "United States v. Stevenson" on Justia Law

Hill formed Blythe Corporation to acquire vacant lots in Chicago and was Blythe’s sole owner and employee. Blythe entered into a contract with Flawless Financial, which was to acquire the lots; Blythe agreed to pay legal fees of $50,000 to the attorney recommended by Flawless (DeAngelis) and deliver a $25,000 retainer fee. Blythe signed a representation agreement that had been drafted by DeAngelis, an employee of Brown Udell, on Brown Udell letterhead, but never informed Brown Udell of the representation. Blythe remitted a $25,000 check, payable to DeAngelis which was deposited into the “John A. DeAngelis Client Fund Account.” DeAngelis never shared fees received from Blythe with Brown Udell. Blythe investors transferred $250,000 to the DeAngelis Client Fund Account. Following Hill’s instructions, DeAngelis transferred $249,978 to a Flawless account. None of those funds were ever used to purchase lots on behalf of Blythe. Forte, a Blythe investor, contributed an additional $250,000. DeAngelis submitted an Application for Purchase of Redevelopment Project Area Property to obtain the vacant lots. The Department of Planning and Development reviewed the application and indicated steps necessary to move forward. Blythe, however made no effort to amend its application or to pursue necessary approvals. Blythe did not respond to inquiries by DeAngelis; Hill “[could] not recall” what happened to the funds received from Forte. Blythe sued DeAngelis and Brown Udell, claiming legal malpractice and unjust enrichment. The district court entered summary judgment for the defendants. The Seventh Circuit affirmed. View "Blythe Holdings, Inc. v. DeAngelis" on Justia Law

Based on a real estate financing fraud scheme during the housing bubble, Brunt, Farano, Murphy, and Scullark were charged with mail and wire fraud; Brunt and Scullark with money laundering and Farano with theft of federal government funds, 18 U.S.C. 641, 1341, 1343, 1957(a). The scheme involved buying HUD-owned properties at a discount by using a “front” nonprofit corporation that received kickbacks. The properties were resold, with false promises that the defendants would rehabilitate the properties and find tenants. The defendants obtained the mortgages for buyers by submitting false information regarding the conditions of the properties and buyers’ assets, income, employment, and intentions to occupy the properties. A loan officer and appraisers were bribed. The judge refused to severe the trials. A jury convicted the defendants, and the judge sentenced Brunt to 151 months in prison, Farano to 108, Murphy to 72, and Scullark to 78. He ordered them all to pay restitution. The Seventh Circuit affirmed except regarding an order of restitution to refinancing lenders, which it vacated for consideration of whether the refinancing banks that are seeking restitution had based their refinancing decisions on fraudulent representations by the defendants. The court expressed concern about how long the case has taken.View "United States v. Scullark" on Justia Law

Chicago police officers arrested Venson for possession of a controlled substance and solicitation of an unlawful act, and he spent 19 days in jail. After a preliminary hearing resulted in the dismissal of charges for want of probable cause, Venson sued the officers involved in his arrest for false arrest, illegal search, and malicious prosecution pursuant to 42 U.S.C. 1983. The parties had differing accounts of the events that resulted in the arrest, which apparently involved someone in the vicinity yelling “rocks.” A jury found in favor of the defendants. The Seventh Circuit affirmed. “This was a swearing contest, and nothing precluded the jury from crediting the defendants’ account of what occurred.” View "Venson v. Altamirano" on Justia Law

Wisconsin’s Act 10 significantly changed Wisconsin public‐sector labor law: it prohibited government employers from collectively bargaining with their general employees (not public safety employees) over anything except base wages and precluded general‐employee unions from using automatic payroll deductions and fair‐share agreements. Act 10 mandated that general‐employee unions submit to a recertification election every year (instead of remaining certified indefinitely) and certification requires affirmative votes from an absolute majority of the bargaining unit, not just those voting. Public‐employee unions and an individual union member sued, claiming that these changes infringe their First Amendment petition and association rights and deny union members the equal protection of the laws. The district court rejected the challenges. The Seventh Circuit, having previously held that Act 10’s prohibition on payroll deductions did not violate the First Amendment and that Act 10’s distinction between public safety and general employees was viewpoint‐neutral, affirmed. The court concluded that the law does not implicate the First Amendment and applied rational basis review. Its limitations on the scope of statutory collective bargaining are rationally related to a legitimate government interest: promoting flexibility in state and local government budgets by providing public employers more leverage in negotiations. View "Laborers Local 236, AFLO-CIO v. Walker" on Justia Law

Bryant, a cocaine‐running “general” in the Black P. Stones gang, was indicted in 2007 for conspiracy to distribute 50 grams or more of crack cocaine and 500 grams or more of cocaine; possession of 500 grams or more of cocaine with intent to distribute; possession of a firearm in furtherance of a drug trafficking crime; and possession of a firearm by a felon. Due to Bryant’s two prior drug felonies and the allegation that at least 50 grams of crack were involved, he faced mandatory life imprisonment without release, 21 U.S.C. 841(b)(1)(A)(iii). Bryant pled guilty in an effort to avoid that sentence. An agreement set forth Bryant’s plea and the government’s sentencing recommendation; a letter from the assistant U.S. attorney to Bryant’s lawyer immunized Bryant from the direct use of the statements he would provide in cooperating. Bryant also provided information to Illinois authorities under a separate agreement to which the U.S. was not a party. Illinois promised that his statements would not be used against him directly in “any criminal prosecution,” but required that he tell the truth. Bryant confessed to state authorities that he participated in a triple murder. Illinois shared Bryant’s statements with the U.S., which used the confessions directly, over his objection, to convict him of three murders. The Seventh Circuit affirmed denial of his pretrial motions, noting that the plain language shows that the U.S. never immunized statements Bryant would make in cooperation with other authorities.View "United States v. Bryant" on Justia Law

Saldana entered the U.S. at age 7, became a lawful permanent resident at 20, but was charged with removability at 34, in 2003, for committing an aggravated felony, 8 U.S.C. 1227(a)(2)(A)(ii), and a controlled-substance offense. He argued that mere possession of cocaine was not a drug-trafficking crime, and thus not an aggravated felony under 8 U.S.C. 1101(a)(43)(B) that would render him ineligible for discretionary relief. The IJ denied his application for cancellation of removal. Saldana did not appeal and was removed to Mexico. The agency precedent on which the IJ relied was overturned three years later by the Supreme Court. By then Saldana had reentered illegally and was again convicted of possessing cocaine. After his 2011 release Saldana was charged with illegal presence in the U.S. after removal, 8 U.S.C. 1326(a), (b)(1), but sought dismissal based on deficiencies in the underlying removal order. The district court denied the motion, finding that he had failed to exhaust administrative remedies; that his lawyer never promised to appeal; that Saldana did not take advantage of remedies available at the time (habeas corpus) and did not justify these failures other than asserting lack of legal knowledge; and that he could not show that removal was fundamentally unfair because he had no due-process right to apply for discretionary relief. The Seventh Circuit affirmed. Despite being informed of his rightsl, he did not file an appeal or ask his lawyer to do so, nor did he exhaust available remedies by a motion to reopen. View "United States v. Alegeria-Saldana" on Justia Law

The petitioner uses two names (Tarsem Singh and Simranjit Singh) and has used different birth certificate translations, listing birthdates that differ by as much as four years. He has passports showing both identities and has claimed three different dates of entry. In 1997, Singh was detained by INS. Singh asserts that he then spoke very little English and did not understand the agents. Charging documents indicate that he had counsel, but he claims that that and other information on the documents was incorrect. After his release, Singh’s father created a new identity for him. INS mailed notice of his immigration hearing to his employer’s address, but there is no evidence that Singh ever received it. Singh was ordered deported in absentia. In 2010, the immigration court granted Singh’s motion to reopen. Singh argued that, contrary to the I‐213, he was only 15 in 1997 so that his detention violated INS regulations and his due process rights and that he had been inspected and admitted into the U.S., so that he was eligible for adjustment of status, 8 U.S.C. 1255(a). The IJ ruled that Singh was removable. The BIA agreed, reasoning that even if Singh was 15 when he was detained, he was properly served with notice. INS regulations do not require service in the respondent’s native language, and personal service is effective for minors over age 14. The Seventh Circuit denied review. His claims hinged on establishing that he really was Tarsem and was 15 years old in 1997, which he could not do. Singh also could not establish that he was inspected and admitted when he entered this country.View "Singh v. Holder" on Justia Law

In 1998 Ambrose was charged with predatory criminal sexual assault (720 ILCS 5/12-14.1(a)(1)), based on his alleged sexual penetration of his five-year-old daughter and her friend. In 1999, the state successfully sought civil commitment of Ambrose under the Sexually Dangerous Persons Act, 725 ILCS 205/0.01-205/12, which allows for the indefinite commitment of a person who had not yet been convicted of a sexual offense by establishing that the person has a mental disorder that renders him sexually dangerous. Ambrose sought release by filing a recovery application in 2005. The state court denied that application in 2008. Ambrose filed a federal petition for habeas relief in 2010, alleging that his due process rights were violated when, at the hearing on his recovery application, evidence was admitted of allegations of abuse made against him in Arizona and Indiana, and that the ruling compromised his right to a fundamentally fair trial. The district court denied relief. The Seventh Circuit affirmed. Given that Ambrose failed to acknowledge the history that formed the basis for the commitment, and refused to participate in treatment for that disorder, there was no basis to conclude that, absent the reference to the out-of-state abuse allegations, the outcome of the proceeding would have been different. View "Ambrose v. Roeckeman" on Justia Law