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

Brothers Daniel and John owned four companies that offered remodeling services to homeowners. They provided honest work on construction jobs for cash customers, but duped numerous people into refinancing their homes and paying the loan proceeds directly to their companies, then left the jobs unfinished. They targeted neighborhoods on the South and West sides of Chicago, using telemarketers who looked for “elderly, ignorant homeowners,” and had customers sign blank contracts. They referred homeowners to specific loan officers and required the homeowners to sign letters of direction, so the title companies sent checks directly to the companies. From 2002 to 2006, the brothers collected about $1.2 million from more than 40 homeowner-victims. They were convicted of wire fraud, 18 U.S.C. 1343. The district court found that the loss calculation was more than $400,000 but less than $1,000,000 and accordingly increased the offense level, then applied enhancements because the conduct involved: vulnerable victims; violation of a prior court order; sophisticated means; mass-marketing; and leadership or organization of the scheme. The district court sentenced each brother to 168 months’ imprisonment. The Seventh Circuit affirmed. The district court reasonably estimated the amount of loss and properly enhanced the offense level further for the other five aggravating factorsView "United States v. Sullivan" on Justia Law

Scrogham, then age 53, applied for disability benefits under the Social Security Act, submitting medical conditions including degenerative discs, spinal stenosis, sleep apnea, hypertension, arthritis, atrial fibrillation and restless leg syndrome. An ALJ denied the application and the Appeals Council denied his request for review. The district court affirmed, holding that the ALJ did not err in giving less weight to the opinion of a treating physician than to the opinions of nontreating physicians, that the ALJ permissibly found Scrogham not to be credible and that the ALJ’s decision otherwise was supported by substantial evidence. The Seventh Circuit reversed and remanded. The ALJ impermissibly ignored a line of evidence demonstrating the progressive nature of Scrogham’s degenerative disc disease and arthritis and inappropriately undervalued the opinions of Scrogham’s treating physicians, whose longitudinal view of Scrogham’s ailments should have factored prominently into the ALJ’s assessment of his disability status. Even considering only “the snapshots of evidence that the ALJ considered,” that limited evidence does not build the required logical bridge to her conclusions. The ALJ apparently misunderstood or at least considered only partially some of the evidence about Scrogham’s daily activities, rehabilitation efforts and physicians’ evaluations.View "Scrogham v. Colvin" on Justia Law

The family of Johnson’s girlfriend told police that after an argument, Johnson had returned to their home, wearing all black and pointing a gun. Johnson was not present when police arrived at the home, searched the alley, and discovered an Intratec TEC-9 handgun, its loaded high-capacity magazine, and a dark work glove a short distance from the house. Shortly thereafter, police stopped the vehicle in which Johnson, his girlfriend, and another man were riding. The police saw marijuana in the car. Johnson admitted possessing drugs and was arrested. Johnson was convicted as a felon in possession of a firearm, 18 U.S.C. 922(g). The Seventh Circuit affirmed the district court’s application of a four-level enhancement to his sentence under U.S.S.G. 2K2.1(b)(6)(B) for possessing a firearm on another’s property in connection with another felony. The court reversed and remanded that part of the sentence imposing conditions that were not orally announced at Johnson’s sentencing hearing and directed the district court to clarify Johnson’s conditions for supervised release.View "United States v. Johnson" on Justia Law

In 2003, Smith, serving a 90-year sentence for murder, walked behind another inmate and stabbed him several times with scissors. The victim required surgery and was in the hospital for 12 days. The attack was observed by several guards. Facing charges for attempted murder and aggravated battery in LaPorte County, Smith had a court-appointed public defender, Cupp. Smith himself composed numerous motions, which Cupp believed were meritless and did not file. During the next several months, Smith repeatedly complained about Cupp and attempted to act pro se. The trial proceeded over his objections Smith was convicted and sentenced to 34 years in prison, to be served consecutively to his current term. On direct review, the Indiana court of appeals held that “[d]efense counsel did not, for all practical purposes, mount a defense on Smith’s behalf” because he cross-examined only one witness and called none in defense, while objecting only to one potential prosecution exhibit, but that Smith he failed to show any prejudice. The Seventh Circuit affirmed denial of federal habeas relief, stating that Smith’s counsel was particularly deficient, but Smith failed to show how his lawyer’s substandard effort prejudiced his case in light of the overwhelming evidence against him. View "Roy Smith v. Richard Brown" on Justia Law

In 1999 Carroll was convicted in Illinois of aggravated sexual assault and sentenced to 28 years in prison. He obtained post-conviction relief and was resentenced, to 26 years. Neither the judge at sentencing nor the official copy of the judgment mentioned supervised release. Carroll learned that a three-year term of supervised release was required by statute, 730 ILCS 5/5-8-1(d). He filed a federal petition for habeas corpus, 28 U.S.C. 2254, asking the court to order him excused from having to serve supervised release, arguing that to impose punishment in excess of the sentence delivered by a judge violates clearly established federal law. Later Carroll indicated that what he really wanted was to have his prison term reduced to 23 years so that the aggregate time in prison and on supervised release would be 26 years. The district judge held that Carroll must serve 26 years in prison and three years on supervised release. The Seventh Circuit affirmed; any error was merely a departure from a customary but not a mandatory procedure. If ordered to resentence Carroll, the Illinois court would impose an identical sentence except that it would list the statutory conditions and duration of mandatory supervised release. Failure to mention supervised release in Carroll’s sentence did not deprive him of life, liberty, or property. View "Carroll v. Martin" on Justia Law

Before the patents expired (2012) for the individual coffee pods used in Keurig coffeemakers, defendants wanted to enter the market for Keurig‐compatible pods. In 2010 they introduced a product that used the external K‐Cup design, but did not contain a filter so that use of fresh coffee grounds was impossible. They used small chunks of freeze‐dried brewed coffee that dissolve and are reconstituted when hot water is added. The packaging stated in small font that it contained “naturally roasted soluble and microground Arabica coffee”; it never explained that soluble coffee is instant coffee or that the pods contained 95% instant coffee. The package included a warning: “DO NOT REMOVE the foil seal as the cup will not work properly in the coffee maker and could result in hot water burns.” Except to ensure that the user did not view the contents of the pod, this made no sense. Customers began to complain and were told that the pods were “not instant coffee” but “a high quality coffee bean pulverized into a powder so fine that [it] will dissolve,” which was largely false. Consumer protection lawsuits were consolidated. The district court refused to certify a class and granted summary judgment. The Seventh Circuit reversed. Plaintiffs’ claims and those of the class they propose all derive from a single course of conduct. The court overlooked genuine issues of fact when it granted summary judgment.View "Suchanek v. Sturm Foods, Inc." on Justia Law

The Plaintiffs sued Payday Financial, Webb, an enrolled member of the Cheyenne River Sioux Tribe, and other entities associated with Webb, alleging violations of civil and criminal statutes related to loans that they had received from the defendants. The businesses maintain several websites that offer small, high-interest loans to customers. The entire transaction is completed online; a potential customer applies for, and agrees to, the loan terms from his computer. The district court dismissed for improper venue, finding that the loan agreements required that all disputes be resolved through arbitration conducted by the Cheyenne River Sioux Tribe on their Reservation in South Dakota. Following a limited remand, the district court concluded that, although the tribal law could be ascertained, the arbitral mechanism detailed in the agreement did not exist. The Seventh Circuit held that the action should not have been dismissed because the arbitral mechanism specified in the agreement is illusory. Rejecting an alternative argument that the loan documents require that any litigation be conducted by a tribal court on the Cheyenne River Sioux Tribe Reservation, the court stated that tribal courts have a unique, limited jurisdiction that does not extend generally to the regulation of nontribal members whose actions do not implicate the sovereignty of the tribe or the regulation of tribal lands. View "Jackson v. Payday Fin., LLC" on Justia Law

After his employment with the town was terminated, the plaintiff sought benefits under the Illinois Unemployment Insurance Act. The town opposed his claim, arguing that he was ineligible for unemployment benefits because he had constructively resigned “without good cause” by failing to obtain a commercial driver’s license within one year of starting work, a condition of his employment. The department agreed with the town. The plaintiff unsuccessfully appealed. He then sued in federal court under 42 U.S.C. 1983, claiming that he was fired in violation of his rights to due process of law and freedom of speech. The district court dismissed the claim as barred by collateral estoppel. The Seventh Circuit reversed, reasoning that the Illinois statute, 820 ILCS 405/1900(B), denies collateral estoppel effect to rulings in unemployment insurance proceedings. View "Council v. Village of Dolton" on Justia Law

After leaving Gensler, an architectural firm with projects throughout the world, where he had been a Design Director, Strabala opened his own firm, 2Define Architecture. Strabala stated online that he had designed five projects for which Gensler is the architect of record. Gensler contends that Strabala’s statements, a form of “reverse passing off,” violated section 43(a) of the Lanham Act, 15 U.S.C.1125(a). The district court dismissed, ruling that, because Strabala did not say that he built or sold these structures, he could not have violated section 43(a), reading the Supreme Court decision Dastar Corp. v. Twentieth Century Fox (2003), to limit section 43(a) to false designations of goods’ origin. The Seventh Circuit vacated, reasoning that Gensler maintains that Strabala falsely claims to have been the creator of intellectual property.View "M. Arthur Gensler, Jr. & Assocs., Inc. v. Strabala" on Justia Law

The Developer converted a vacant building into a residential condominium by gutting and refitting it. The Developer purchased Commercial Lines Policies covering bodily injury and property damage from Nautilus, covering periods from June 1998 through June 2000. The policies define occurrence as “an accident, including continuous or repeated exposure to substantially the same general harmful conditions,” but do not define accident. The policies exclude damage to “that particular part of real property on which you or any contractors or subcontractors working directly or indirectly on your behalf are performing operations, if the ‘property damage’ arises out of those operations;” eliminate coverage for damage to “that particular part of any property that must be restored, repaired or replaced because ‘your work’ was incorrectly performed on it;” and contain an endorsement entitled “Exclusion—Products-Completed Operations Hazard.’ Construction was completed in 2000; the Developer transferred control to a board of owners. By May 2000, one homeowner was aware of water damage. In 2005, the Board hired a consulting firm, which found that the exterior brick walls were not fully waterproofed and concluded that the deterioration had likely developed over many years, even prior to the condominium conversion, but that the present water penetration was the result of inadequate restoration of the walls. The Board sued the Developer. Nautilus denied coverage and obtained a declaratory judgment. The Seventh Circuit affirmed, reviewing the policy and finding that the shoddy workmanship, of which the board complained, was not covered by the policies; that Nautilus did not unduly delay pursuing its declaratory suit; and that the alleged damage to residents’ personal property occurred after the portions of the building were excluded from coverage.View "Nautilus Ins. Co. v. Bd. of Dirs. of Regal Lofts Condo Ass'n" on Justia Law