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

Rymtech, a mortgage reduction program, purported to provide financial assistance to homeowners facing foreclosure. Daniel, its Vice President, recruited homeowners to place their properties in the program and instructed them to sign over title to straw purchasers called “A buyers.” Homeowners were told that title would be placed in trust, that A buyers would obtain financing to pay off the mortgage, and that they would regain clear title in five years. Daniel instructed loan officers to prepare fraudulent loan applications on behalf of A buyers. Even if Rymtech had invested all of the owners’ equity, implausibly high rates of return would have been required to make the mortgage payments. The equity was actually primarily used to operate Rymtech. When its finances started to disintegrate, Daniel continued to recruit homeowners. After the program failed Daniel was convicted of wire fraud, 18 U.S.C. 1343 and mail fraud, 18 U.S.C. 1341. The Seventh Circuit affirmed, rejecting a challenge to the sufficiency of the evidence and an argument that the court erred in rejecting his proposed instruction, requiring the jury to agree unanimously on a specific fraudulent representation, pretense, promise, or act. Unanimity is only required for the existence of the scheme itself and not in regard to a specific false representation. View "United States v. Daniel" on Justia Law

South Bend police responded to a report that Davis was being held against her will at the Henderson house. Winfield showed Sergeant Wolff text messages from Davis. Wolff confirmed that the woman sending the texts was in Henderson’s house, called the SWAT team, and set up a perimeter of officers and spotlights. Winfield got a text: “he’s got the door bolted, I can’t get out.” The officers did not attempt direct contact, but set up a loudspeaker and demanded that Henderson exit the house. Several minutes later, Davis came out and stated that all the exits had keyed deadbolts and the keys were in Henderson’s possession and that Henderson threatened her with a handgun. About 30 minutes later, Henderson voluntarily left the house, locking the door behind him. Officers did not find any weapons in his possession. Unable to unlock the door, officers forced entry and conducted a five-minute protective sweep. They did not find anyone else in the house, but saw remnants of a marijuana growing operation and firearms in plain view. Police then obtained a warrant and found crack cocaine, powder cocaine, marijuana, and five firearms. Charged as a drug user in possession of firearms, 18 U.S.C. 922(g)(3), Henderson unsuccessfully moved to suppress the firearms. Convicted, he was sentenced to 39 months. The Seventh Circuit affirmed. View "United States v. Henderson" on Justia Law

Conrad, the “Banana Lady,” a self‐employed singer and dancer, performs in a giant banana costume. After performing a “singing telegram” at a credit union trade association event, she sued, charging infringements of intellectual property rights. Although Conrad claims that she stated that her performance was not to be recorded, except for “personal use,” photos were posted on websites. The district judge dismissed, finding most of the claims precluded by an earlier Wisconsin state court suit, also dismissed. The judge rejected a claim of copyright infringement, over which federal courts have exclusive jurisdiction, on the merits. The Seventh Circuit affirmed, first questioning Conrad’s copyright on the costume, because similar costumes are a common consumer product. The performance was not copyrightable, not being “fixed in any tangible medium of expression,” 17 U.S.C. 102(a). While she has the exclusive right to create or license reproductions of and derivative works from works that she has validly copyrighted, 17 U.S.C. 106(1), (2), it is unlikely that the photos and videos were derivative works. The Act forbids unauthorized recording of a musical performance, 17 U.S.C. 1101(a), and unauthorized display of copyrighted musical or choreographic work, section 106(5), but she did not cite either provision. The court noted Conrad’s “incessant filing of frivolous lawsuits” and suggested that the lower courts “consider enjoining her from filing further suits until she pays her litigation debts.” View "Conrad v. AM Cmty Credit Union," on Justia Law

Aurora hired Gosey as a chef’s assistant in 2008. In September 2009 she applied for an open position as food-services manager at the hospital. The job posting stated a preference for someone with “five to seven years of progressively responsible experience in managing a food service operation,” including experience in managing “staff, budgets and multiple human resources functions.” There were more than 150 applicants. Aurora interviewed Gosey, but ultimately hired a white woman. Gosey filed a charge of discrimination with the Equal Employment Opportunity Commission and the Wisconsin Department of Workforce Development, alleging that she had been denied the promotion, was assigned extra duties, and disciplined for sham infractions because of her race. She accused Aurora’s managers of trying to manufacture an excuse to fire her by altering her attendance records. Two months later, Aurora fired her. Gosey sued, alleging violations of Title VII of the Civil Rights Act, 42 U.S.C. 2000e-2(a)(1), 2000e-3(a). The district court granted Aurora summary judgment. The Seventh Circuit affirmed with respect to claims of harassment and failure to promote, but concluded that further proceedings are necessary on claims that Aurora fired Gosey because of race and in retaliation for her complaints of discrimination.View "Gosey v. Aurora Med. Ctr." on Justia Law

Bey and three others conspired to rob Associated Bank, where one of them (Thompson) worked. Bey gave Schoenhaar a pellet gun for use in the robbery and waited in a getaway car with Gregory, while Schoenhaar entered the bank, displayed the gun, and demanded money. Thompson and a (coerced) coworker retrieved $221,000 from the vault and gave the money to Schoenhaar, who led the two to a bathroom while pointing the gun and saying he would kill them if they left the bathroom. He left the bank, but found that Bey and Gregory had gotten cold feet and fled. All four conspirators were apprehended, and charged with bank robbery and with conspiracy to commit that offense, 18 U.S.C. 371, 2113(a). Bey, entered an “Alford plea,” maintaining his innocence, but hoping for a lighter sentence. The district judge imposed a 92‐month sentence. After his lawyer advised the court that he could find no nonfrivolous ground for appealing the sentence, the Seventh Circuit allowed him to withdraw and dismissed the appeal. View "Unted States v. Bey" on Justia Law

VLM, a Canadian agricultural supplier, sold frozen potatoes to Illinois Trading, a reseller. VLM sued Illinois Trading for $184,000 owed on the contract, with counts based on the Perishable Agricultural Commodities Act, which creates a trust in favor of the seller when a buyer purchases agricultural goods on short-term credit, 7 U.S.C. 499e(c)(2). To protect the trust assets, VLM sought a preliminary injunction. Illinois Trading had obtained loans from TAB Bank, giving a security interest in its assets. By the time VLM filed suit, TAB had seized Illinois Trading’s assets. The PACA-created trust made VLM’s claim superior to TAB’s security interest. VLM added a claim against TAB for seizing PACA trust assets. Before the amendment, VLM had successfully moved for consolidation of the preliminary-injunction hearing with trial on the merits. The consolidated hearing pertained only to counts against Illinois Trading, not Count V, pertaining to TAB. The court, however, issued an opinion resolving Counts I through IV and also entered judgment for TAB on Count V, because VLM had not presented evidence on that claim. The district court awarded VLM attorney’s fees and interest on the unpaid balance based on provisions in VLM’s invoices. The Seventh Circuit reversed with respect to Count V; held that the United Nations Convention on Contracts for the International Sale of Goods, was controlling not the Illinois Uniform Commercial Code; and reversed and remanded with respect to attorney’s fees and interest View "VLM Food Trading Int'l, Inc. v. Transp. Alliance Bank,Inc." on Justia Law

A class action complaint, filed in state court, alleged that Pushpin acted as an unlicensed debt collector in violation of the Illinois Consumer Fraud Act and filed 1100 Illinois small‐claims suits, all fraudulent, but that the class (defendants in those suits) sought “no more than $1,100,000.00 in compensatory damages and $2,000,000.00 in punitive damages,” and would ‘incur attorneys’ fees of no more than $400,000.00,” below the $5 million threshold for removal of a state‐court class action to a federal district court under the Class Action Fairness Act. Pushpin removed the case to federal court under the Act, 28 U.S.C. 1453(b), but the district court remanded to state court. The Seventh Circuit reversed, reasoning that the plaintiff did not irrevocably commit to obtaining less than $5 million for the class, and Pushpin’s estimate that the damages recoverable by the class could equal or exceed that amount may be reliable enough to preclude remanding the case to the state court. The lower court’s reasoning that most of the claims were barred by the Rooker‐Feldman rule was a mistake as was a statement that “there is a strong presumption in favor of remand” when a case has been removed under the Class Action Fairness Act. View "Pushpin Holdings, LLC v. Johnson" on Justia Law

Since 1994, Harper has served as Fulton County Treasurer, an elected position with a four-year term. The 21-member County Board sets salaries for elected officials. From 1983–2002, the County Treasurer and County Clerk were paid the same salary. When Rumler, the County Clerk, announced his retirement, the board increased his salary in order to allow him to receive greater retirement benefits. From 2003–2006, the County Clerk’s salary exceeded the County Treasurer’s salary. After Rumler’s retirement, the new County Clerk, James Nelson, and the County Treasurer were paid the same salary from 2007–2010. In the meantime, disputes between Harper and the Board apparently prompted the Finance Committee to recommend against increasing the County Treasurer’s salary in 2010. The Board adopted the recommendation, 10–8, but voted (16–2) to give the County Clerk annual pay raises. Harper filed a 42 U.S.C. 1983 action, alleging sex discrimination in compensation. The district court granted summary judgment in favor of the county. The Seventh Circuit affirmed. Harper failed to show that the Board’s concerns about the content and timeliness of her reports were merely excuses covering sex discrimination. View "Harper v. Fulton Cnty." on Justia Law

Bryn Mawr Chicago nursing home, a Medicaid provider, is subject to Illinois Department of Public Health (IDPH) inspections. In 2010, IDPH inspected the facility following allegations that a resident had been sexually assaulted. Bryn Mawr was eventually cited for three deficiencies, 42 C.F.R. 488.301, two based on sexual abuse and one based on failure to sufficiently monitor a resident. Bryn Mawr challenged the findings by Informal Dispute Resolution, which involved exchange of written information without a live hearing. IDPH simultaneously conducted internal review and found that the deficiencies based on allegations of sexual abuse were not sufficiently supported by credible evidence, but the third party upheld the deficiency findings. Ultimately IDPH maintained the deficiency findings. Meanwhile, Bryn Mawr also engaged in a parallel process to “correct” deficiencies. At the follow-up inspection, IDPH determined that the deficiencies had been corrected, so that remedies would not be imposed. IDPH passed the deficiency findings on to the Centers for Medicare and Medicaid Services, which published them on its website and factored them into its 5-Star Rating System. Bryn Mawr’s rating was supposed to fall from five to four stars because of the deficiencies, but CMS mistakenly reduced it to two stars. Regardless of a partial correction, Bryn Mawr was displeased that it had not had the opportunity to challenge the findings at a hearing and sued to compel a hearing. The district court granted summary judgment to defendants. The Seventh Circuit affirmed. View "Bryn Mawr Care, Inc. v. Sebelius" on Justia Law

May and Collier sold crack cocaine to an FBI informant three times. For each sale, May and the informant discussed quantity and price and May told the informant to pick up the cocaine at Collier’s house. May instructed Collier to accept payment and waited outside until each sale was complete. Collier turned the money over to May, who gave Collier a share but kept a larger portion for himself. May pleaded guilty to conspiracy to possess with intent to distribute crack cocaine, 21 U.S.C. 841(a)(1), 846. The plea agreement noted that May satisfied four of five requirements for safety-valve relief under 18 U.S.C. 3553(f), but noted the parties’ disagreement over whether May was an “organizer, leader, manager, or supervisor,” eligible for a two-level adjustment under U.S.S.G. 3B1.1. The probation officer argued for the safety-valve reduction, so that May would not be subject to the 10-year statutory minimum, 21 U.S.C. 841(b)(1)(A). The district court found that May held a supervisory role in the offense and applied the adjustment, holding that May did not qualify for the safety-valve provision. The Seventh Circuit affirmed, finding that May was a supervisor and rejecting an argument that the safety valve remains available to a defendant who supervised only one person. View "United States v. May" on Justia Law