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

Defendants, including Adame were charged with drug conspiracy and cocaine distribution. Adame was also charged with illegal reentry of a previously deported alien following conviction for an aggravated felony. With a written plea agreement under FRCP 11(c)(1)(C), Adame sought to plead guilty to the conspiracy charge; the parties stipulated to a base offense level of 38. The government agreed not to file an information under 21 U.S.C. 851, which would have increased the mandatory minimum sentence due to a prior felony drug conviction. The guidelines range was 188-235 months; the parties agreed to a sentence of 204 months as appropriate. At sentencing, Adame denied that he personally delivered more than 150 kilograms of cocaine, and objected to a fact underlying an adjustment for his aggravated role. The prosecutor argued that this constituted breach of the agreement. At the end of the hearing, Adame asked whether he could abandon his objections and proceed with sentencing under the agreement, but the court denied his request. The judge reset a trial date; the grand jury later returned a second superseding indictment against Adame. Before the trial date, Adame filed an amended "Renewed Petition to Enter a Plea of Guilty.” Rather than indicating a desire to enter a guilty plea to the new indictment, it stated that Adame did not “wish to withdraw" his plea and requested a sentencing hearing. At a hearing, the judge indicated substantial confusion about the case, proceeded through a Rule 11 colloquy, later indicated that she “refused to accept his plea,” but later explained the implications of a plea. Asked how he pleaded, Adame said “guilty.” The court found him guilty of two counts and sentenced him to 300 months. The Seventh Circuit vacated and remanded with instructions to allow Adame to maintain his guilty plea and be sentenced under the terms of the parties’ original written plea agreement. View "United States v. Adame-Hernandez" on Justia Law

When purchasing a house, the defendants submitted loan documents containing false incomes and bank statements, and failed to disclose that husband’s company was selling and his wife was buying. The company received $750,000 and rebated money paid above that amount to husband. The $1 million in loans they received resulted in $250,000 extra that was not disclosed as going to the couple. They were able to sell the house four months later for the same inflated amount, without raising any concerns. They failed to disclose on the HUD-1 forms in the second transaction that they would be giving the buyer kickbacks. The buyer received $1,090,573.06 in loans, but defaulted without making a payment. The lender eventually sold the house for $487,500. Defendants were convicted of three counts of wire fraud, 18 U.S.C. 1343 and aiding and abetting wire fraud, 18 U.S.C. 2. The Presentence Investigation Report determined that the lender’s loss was $603,073.06 and recommended a 14-point enhancement under USSG 2B1.1(b)(1)(H). The Seventh Circuit affirmed the convictions but remanded for explanation of why the loss was “reasonably foreseeable” and why the sentencing enhancement was proper. Involvement in a fraudulent scheme does not necessarily mean it was reasonably foreseeable that all the subsequent economic damages would occur; there was no evidence that defendants knew they were selling to what turned out to be a fictional buyer. View "United States v. Domnenko" on Justia Law

The Indianapolis Metropolitan Police Department and the FBI conducted an investigation of a suspected cocaine-distribution organization, employing various investigative techniques, including interviews of confidential informants and suspects, surveillance, staged or controlled drug purchases, and consensual (on one side) recording of telephone conversations. The investigation also involved court-authorized pen registers of telephone traffic, wiretaps of telephone conversations, and interdiction stops of selected individuals, which were often initiated on the basis of information gleaned from the wiretaps. In January 2010, a series of searches and arrests were effectuated and 20 defendants, including Mockabee, Jones, Drake, and Young, were indicted. Mockabee pleaded guilty, the other three were convicted. The Seventh Circuit affirmed the convictions of Jones, Drake, and Young, but vacated the sentences of Mockabee, Jones, and Drake and remanded for resentencing under the Fair Sentencing Act of 2010, 124 Stat 2372. The court rejected Jones’s challenges to the warrant and to the sufficiency of the evidence; Drake’s challenges to admission of a detective’s opinion testimony interpreting drug code language, restrictions on her cross-examination of that detective Clark, claimed prosecutorial misconduct during rebuttal argument; and Young’s challenge to the sufficiency of the evidence.View "United States v. Mockabee" on Justia Law

KDC had cash flow problems and, in 2004, hired Johnson. Johnson retained the law firm (GPM) of his acquaintance, Tenenbaum. GPM sent KDC an engagement letter that included conflict‐waiver language regarding Johnson and a company affiliated with Johnson. Johnson soon resigned and joined First Products. GPM resigned as KDC’s counsel. KDC filed for Chapter 11 bankruptcy. Its assets were purchased at auction by First Products. No other bids were received; the bankruptcy court approved the sale. The bankruptcy was later converted to a Chapter 7 liquidation proceeding. The bankruptcy trustee hired Sullivan as special counsel. Sullivan had filed a shareholder derivative action before KDC filed for bankruptcy, alleging that directors and officers of KDC had conspired to defraud the company of its intellectual property by driving KDC out of business and purchasing its assets at bargain prices. In 2010, a Wisconsin state judge entered judgment, finding some defendants, including Johnson, had engaged in a civil conspiracy to defraud KDC and steal its assets. In 2012, KDC, through its bankruptcy trustee, brought claims against GPM, alleging involvement in the scheme to defraud KDC orchestrated by Johnson. On summary judgment, the district court determined that the remaining claims were barred by the six‐year Wisconsin statute of limitations because KDC was on notice of GPM’s alleged fraud by 2006, when Sullivan received KDC’s client file. The Seventh Circuit affirmed.View "KDC Foods, Inc. v. Gray, Plant, Mooty, Mooty & Bennett, P.C." on Justia Law

SFG, a Texas firm specializing in distressed‐asset investing, bought a loan portfolio from McFarland State Bank for $1.27 million (28.8% of the face value of the debt). Materials provided by McFarland’s agent indicated that the portfolio was secured by 19 real estate properties in Wisconsin. Both parties were well represented during negotiations. The Sale Agreement provided limited remedies in the event of a breach and disclaimed all other remedies. Soon after purchasing the portfolio, SFG learned that three of the 19 collateral properties that supposedly secured the loans had been released before the sale. SFG contacted McFarland; McFarland disputed liability. Months later, SFG sued, seeking damages beyond the remedies provided in the contract. Applying the contractual remedies limitation, a formula that resulted in zero recovery under the circumstances, the district court granted judgment for McFarland. The Seventh Circuit affirmed. Except in the most extraordinary circumstances, courts hold sophisticated parties to the terms of their bargain.View "S. Fin. Grp. LLC v. McFarland State Bank" on Justia Law

Illinois legalized riverboat casino gambling in 1990. Since then, the state’s once‐thriving horseracing industry has declined. In 2006 and 2008, former Governor Blagojevich signed into law two bills that imposed a tax on in‐state casinos of 3% of their revenue and placed the funds into a trust for the benefit of the horseracing industry. Casinos filed suit under the Racketeering Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. 1964, alleging that defendants, members of the horseracing industry, bribed the governor. On remand, the district court granted summary judgment for the racetracks, finding sufficient evidence from which a reasonable jury could find that there was a pattern of racketeering activity; that a jury could find the existence of an enterprise‐in‐fact, consisting of Blagojevich, his associates, and others; sufficient evidence that the defendants bribed Blagojevich to secure his signature on the 2008 Act; but that the casinos could not show that the alleged bribes proximately caused their injury. The Seventh Circuit reversed in part. Viewing the evidence in the light most favorable to the plaintiffs, there was enough to survive summary judgment on the claim that the governor agreed to sign the Act in exchange for a bribe. View "Empress Casino Joliet Corp. v. Johnston" on Justia Law

In 2007, Coleman pled guilty to possession with intent to distribute 121.989 grams of crack cocaine, which subjected him to a statutory imprisonment range of five to 40 years. With past convictions for possession with intent to distribute cocaine base and for sexual assault of a child, the court determined that he was a career offender, increased the sentencing range to 188-235 months, and imposed a sentence of 225 months. Subsequently, the Supreme Court’s 2008 decision, Begay v. United States, held that the residual clause of the crime-of-violence definition encompasses the types of crimes that categorically involve purposeful, violent and aggressive conduct. The Seventh Circuit then held, pursuant to Begay, that conviction for sexual assault under the relevant Wisconsin statute, which prohibits “sexual contact or sexual intercourse with a person who has not attained the age of 16 years,” is not a “crime of violence” under the career offender designation because it is a strict liability offense. The district court recalculated, excluding that career offender designation and finding that a reduction in the base offense level was appropriate because the Guidelines range for the drug offense had been lowered. The court sentenced Coleman to 120 months. The Seventh Circuit vacated, with instructions to reinstate the conviction and sentence. Error in applying the career offender provision in determining the advisory Guidelines range is not cognizable in a section 2255 motion. View "Coleman v. United States" on Justia Law

Fletcher pled guilty to one count of producing, two counts of receiving, and two counts of possessing child pornography, over a seven-year period. The district court sentenced him to a 30-year term of imprisonment, followed by a lifetime of supervised release. Because his crimes spanned years during which the guidelines for child pornography offenses underwent significant changes, his sentencing posed complex calculations and raised potential constitutional problems. The Seventh Circuit affirmed, holding that any errors the court made in calculating the guidelines sentence for Fletcher were harmless.View "United States v. Fletcher" on Justia Law

Moon was a 26-year-old mother who had worked as a cashier, bank teller, and certified nursing assistant. She suffered from documented back and joint problems, mild sleep apnea, depression, and migraine headaches. Most of these problems are related to exceptional obesity: at a height of 5’5”, she weighs more than 400 pounds. In support of her application for disability benefits, Moon submitted extensive medical records. Her migraine headaches were diagnosed as early as 2005 and she saw doctors about her headaches many times. She was taking Imitrex and Motrin at the time of her May 2010 hearing. In his written decision denying benefits, the ALJ went through the standard five-step analysis and found that Moon was no longer engaged in substantial gainful activity and that her combination of impairments qualified as “severe,” but that she was still capable of doing sedentary work if she would be permitted to sit or stand at will. The ALJ relied on the opinions of two doctors who had reviewed medical records but had not examined Moon. The ALJ referred to “alleged headaches” dismissively. The Appeals Council and the district court upheld the denial. The Seventh Circuit reversed. The ALJ improperly discounted evidence of chronic migraine headaches. Because Moon is receiving disability benefits based on a later application, the only issue on remand will be whether she was disabled between August 2008 and the later date from which benefits have been paid.View "Moon v. Colvin" on Justia Law

King was in custody awaiting a probable cause determination in 2007. After being rapidly tapered off psychotropic medication by jail medical staff, complaining of seizure-like symptoms, and being placed in an isolated cell for seven hours, King was found dead. His estate sued La Crosse County and individual employees. After a remand, six weeks before the trial date, King’s counsel asserted in a letter to the defendants that the correct standard for jury instructions was one of objective reasonableness, not the deliberate indifference standard that had been used by both parties in the pleadings, the summary judgment briefing, the subsequent appeal, and post-remand pretrial preparations. The assertion was correct, but defendants moved that King be precluded from arguing the applicability of the objective reasonableness standard because of her tardiness in asserting the argument. The district court ordered that the case be tried as scheduled under the deliberate indifference standard. The Seventh Circuit reversed, acknowledging that King’s long, unexplained delay in asserting the correct standard was puzzling and problematic, but stating that the district court failed to provide a sufficient explanation of how the defendants would suffer prejudice as a result of the delay. The court subsequently clarified that the reversal applied only to the individual defendants, not the county.View "King v. Kramer" on Justia Law