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

From 2005-2008, Arojojoye and seven codefendants operated an identity theft and bank fraud operation that resulted in over a million dollars in losses to financial institutions and adversely impacted people whose identities were stolen. Arojojoye acquired information, including social security numbers, and manufactured false identification documents and created fictitious businesses. He opened fraudulent credit card accounts and bank accounts, and completed fraudulent transactions. He bought valid credit card numbers from internet hackers and ran up fraudulent charges using credit card processing machines provided to him on the mistaken belief that he was operating legitimate businesses, created false invoices, and stole checks. Arojojoye was arrested after presenting a stolen credit card and fraudulent driver’s license to purchase money orders and prepaid phone cards at Wal‐Mart. An inventory search of his Mercedes produced voluminous evidence of fraud and identity theft. A grand jury returned a 42‐count indictment, Arojojoye pleaded guilty to one count of bank fraud under 18 U.S.C. 1344 and to one count of aggravated identify theft under 18 U.S.C. 1028A(a)(1). The district court imposed a below‐Guidelines sentence of 85 months’ imprisonment on the bank fraud count and 24 months on the identity theft count, to be served consecutively. The Seventh Circuit affirmed.View "United States v. Arojojoye" on Justia Law

A 2006 class action against Pella, a window manufacturer, alleged that certain windows had a design defect that allowed water to enter behind exterior aluminum cladding and damage the wooden frame and the house itself. The district judge certified a class for customers who had already replaced or repaired their windows, seeking damages and limited to six states, and another for those who had not, seeking only declaratory relief nationwide. Initially, there was one named plaintiff, Saltzman. His son-in-law, Weiss, was lead class counsel. Weiss is under investigation for multiple improprieties. The Seventh Circuit upheld the certifications. Class counsel negotiated a settlement in 2011 that directed Pella to pay $11 million in attorneys’ fees based on an assertion that the settlement was worth $90 million to the class. In 2013, before the deadline for filing claims, the district judge approved the settlement, which purports to bind a single nation-wide class of all owners of defective windows, whether or not they have replaced or repaired the windows. The agreement gave lead class counsel “sole discretion” to allocate attorneys’ fees; Weiss proposed to allocate 73 percent to his own firm. Weiss removed four original class representatives who opposed the settlement; their replacements joined Saltzman in supporting it. Named plaintiffs were each compensated $5,000 or $10,000 for their services, if they supported the settlement. Saltzman, as lead class representative, was to receive $10,000. The Seventh Circuit reversed, reversed, referring to “eight largely wasted years,” the need to remove Saltzman, Weiss, and Weiss’s firm as class representative and as class counsel, and to reinstate the four named plaintiffs. View "Riva v. Pella Corp." on Justia Law

Clay’s supervised release began in May 2013, after he served a seven-year sentence for possession with intent to distribute cocaine base and using a gun during a drug-trafficking crime. In June, Clay fled on foot during a traffic stop and tried to hide a bag of marijuana in his sister’s house. He pleaded no contest to obstructing a police officer and received a suspended sentence. In September, Clay was arrested again during a traffic stop and was issued a municipal citation. Between May and October, Clay continued using drugs, failed to take three drug tests, lied about his whereabouts, did not make a good-faith effort to find a job, did not cooperate with child support enforcement, failed to submit monthly supervision reports, and continued associating with felons. The district court held that Clay’s conviction for obstructing an officer was a Grade B violation because Clay faced up to two years’ imprisonment as a repeat offender. The court revoked Clay’s supervised release and sentenced him to 24 months, relying on a factor from the sentencing statute: “the need for the sentence imposed … to reflect the seriousness of the offense, to promote respect for the law, and to provide just punishment,” that is not listed in the statute governing post-revocation sentencing, 18 U.S.C. 3583(e). The Seventh Circuit affirmed, joining the majority of circuits that have addressed the question and holding that consideration of 18 U.S.C. 3553(a)(2)(A) in revoking supervised release is not a procedural error. View "United States v. Clay" on Justia Law

One defendant in consolidated appeals was convicted of child sexual abuse. His conditions of supervised release, imposed for life, included a ban on possession of legal or illegal material that “contains nudity” and the use any mood-altering substance, and a requirement that he undergo a sexual-offender treatment program. The other was convicted of distributing illegal drugs. His conditions, imposed for eight years after his release from prison, included a ban on the use of mood-altering substances and on excessive use of alcohol, and a requirement that he undergo substance-abuse treatment and cognitive behavioral therapy. Apart from a few conditions required by the Sentencing Reform Act, section 3583(d), and U.S.S.G. 5D1.3(a), conditions of supervised release are discretionary, but must comply with policy stated in 18 U.S.C. § 3553(a), considering: the seriousness of the offense, promoting respect for the law, just punishment, deterrence, protecting the public, and providing the defendant with needed educational or vocational training, medical care, or other correctional treatment in the most effective manner. The Seventh Circuit vacated, recommending five “best practices” for conditions of supervised release: Require the probation service to communicate recommendations to defense counsel at least two weeks before the sentencing hearing; Make an independent judgment regardless of the opinions of the prosecutor, defense counsel, and defendant; Determine appropriateness with reference to the particular conduct, character, etc., of the defendant, rather than based on generalizations about the crime and criminal history, and where possible, refer to criminological literature; Make sure that each condition is simply worded; Require that before release, the defendant attend a hearing to be reminded of the conditions and consider changed circumstances brought about by the defendant’s prison experiences. View "United States v. Norfleet" on Justia Law

In 2006 Iroanyah obtained first and second mortgage loans of $192,000 and $36,000. The Disclosure Statement for each displayed the repayment schedule, including the number of payments, the amount due for each, and the due dates for the first and last payments. Neither disclosure included the dates on which each payment was due, nor did they include the frequency with which payment should be made. The Iroanyahs admitted that they understood that payments were to be made monthly. They stopped making payments in 2008. In response to foreclosure proceedings in state court, the Iroanyahs sent a rescission notice for the first loan, citing deficient disclosure statements in violation of the Truth in Lending Act. The lender denied violation, but agreed to rescind the loan upon payment of $169,015.30. The Iroanyahs sent rescission notices for the second loan, to which there was no response They filed suit. The court agreed that the disclosures violated TILA, which extended the right of rescission to three years; statutory damages were denied under a one year limitation period. The court held that failure to respond to the rescission notices violated TILA, triggering an award of statutory damages for failure to respond and actual damages for attorneys’ fees. The Iroanyahs sought awards of $38,812 and $33,849. The district court awarded fees and costs in the amount of $16,433 against one lender and $13,433 against the other. The Seventh Circuit affirmed. View "Iroanyah v. Bank of America, N.A." on Justia Law

Bunn, who is legally blind, quit his job at a Dairy Queen franchise and sued the franchisee under the Americans with Disabilities Act, 42 U.S.C. 12112. Bunn believed that the employer failed to accommodate his disability and subjected him to illegal disparate treatment when it reduced his scheduled hours during the winter months. The district court granted the employer summary judgment on all claims. The Seventh Circuit affirmed. The employer did reasonably accommodate Bunn’s disability by giving him a regular work station, unlike other employees who were required to rotate stations. The undisputed facts show that he was suspended due to insubordinate conduct towards a supervisor, that his hours decreased following the suspension, and that the restaurant saw decreased demand during the cold weather months and adjusted many employee schedules accordingly. View "Bunn v. Khoury Enters., Inc." on Justia Law

Averhart, formerly a guard at the Cook County Jail, was suspended without pay in 2001 and fired in 2003. She had filed an EEOC charge of discrimination in 2000 and was investigated for smuggling drugs and contraband to prisoners. She had been arrested for shoplifting. She claimed retaliation for her corroboration of a coworker’s claims of sexual harassment and filed her first of four federal lawsuits in 2001. She has lost them all, along with two state suits. The district court dismissed the fourth suit as barred by the earlier decisions. The Seventh Circuit affirmed, finding the suit frivolous. The court noted that she was never an employee of the Merit Board, which approved her firing; that a claim against the Sheriff’s Department was filed almost a decade beyond the statute of limitations; and that new theories of race and sex discrimination do not avoid preclusion, which requires all legal theories that concern the same events to be brought in a single suit. The court gave Averhart 14 days to show cause why it should not impose sanctions under Fed. R. App. P. 38, possibly including a financial penalty and an order revoking her privilege of proceeding in forma pauperis. View "Averhart v. Cook Cnty. Sheriff" on Justia Law

In 1971 Cannon was convicted of murder. He was paroled and was a general in the El Rukn street gang when he became involved in a second murder and was arrested by the Chicago Police Department’s Violent Crimes division. He was threatened and tortured until he confessed that he was driving the car in which the murder occurred. Immediately after leaving police custody, Cannon recanted his confession and complained to the Office of Professional Standards. The complaint was dismissed. Cannon's confession was used at his 1984 trial; he was convicted and sentenced to life in prison. In 1986, Cannon filed a federal complaint, asserting torture. By this time, there had been news reports of other incidents but it was not known that the abuse against African American men was pervasive and occurred with the complicity of then-commander Burge. In 1988, on his attorney’s advice, Cannon settled for the $3000 nuisance value offered by the defendants and signed a broad release of his claims. Cannon also appealed his conviction. By the time of a second remand, the judge who originally ruled on Cannon’s motion to suppress was caught accepting bribes and there was evidence that the officers who procured his confession regularly used torture. In 2001, Cannon agreed to plead guilty, without admitting guilt, to armed violence and conspiracy to commit murder, in exchange for a sentence of 40 years’ imprisonment. Ultimately, the state dismissed the 1983 murder charges solely because neither side anticipated the effect of the plea agreement on Cannon’s parole status for the 1971 conviction. By the time a court ordered a new hearing on that issue, Cannon had been in prison for 23 years for the 1983 murder. Cannon filed suit under 42 U.S.C. 1983. The court dismissed, based on the release in the 1986 case. The Seventh Circuit affirmed, acknowledging that the case “casts a pall of shame” over the city, the officers, and the trial judge, but also on Cannon. Cannon settled knowing that the defendants were lying. There was no evidence that, at the time he settled, the purposefully concealed a broader scandal. View "Cannon v. Burge" on Justia Law

Arnold, a former officer of two corporate defendants, held significant stock in each. In 1999, Arnold sued both in Illinois state court, claiming shareholder oppression. In 2006, the parties allegedly agreed to settle, but never executed settlement documents. The defendants have not paid any of the $207,500 purportedly required. The court dismissed without deciding whether the case had been settled. A month later, Arnold agreed to sell his stock to KJD for $290,000. KJD advanced $100,000; Arnold represented that he had good title. KJD notified the defendants that it had purchased the stock and wished to inspect the corporate books. They did not respond, but moved to vacate the dismissal, alleging that, under the alleged settlement, Arnold had transferred his stock to the corporations. They also filed suit before a different judge, resulting in a default judgment ordering Arnold to execute settlement papers and comply with the agreement. The Appellate Court affirmed. KJD was never joined as a party. The court stayed proceedings in the original action. Arnold filed a FRCP Rule 22 interpleader action, naming the corporations and KJD, stating that he made no claim to continued ownership and was willing to transfer the stock to whichever defendant the court determined to have superior right. Invoking the Rooker-Feldman doctrine, the district court dismissed, but ordered Arnold to return the $100,000 advance payment. The Seventh Circuit vacated and remanded, reasoning that the interpleader action does not attack the state court judgment itself, so further proceedings are necessary.View "Arnold v. KJD Real Estate, LLC" on Justia Law

Fuqua, a computational linguist, was hired by SVOX in 2009 to help market linguistic products. A few months later, SVOX approached Fuqua with a new employment contract that contained an inventions assignment clause that required Fuqua to disclose and assign to SVOX intellectual property that he made, conceived, or developed in the past and required assignment of his rights to patents, copyrights, trademarks, trade secrets, and royalties to SVOX. Fuqua believed that the disclosure required by the new agreement would violate state and federal laws and refused to sign the contract. SVOX terminated Fuqua’s employment. Fuqua filed a complaint with the Office of Inspector General of the Department of Defense (OIG), alleging violation of the American Recovery and Reinvestment Act of 2009, which prohibits reprisals for disclosures of wrongdoing relating to covered funds under the act. The OIG found that SVOX did not receive Recovery Act funds and declined to investigate further. The district court dismissed, finding that SVOX did not receive covered funds. The Seventh Circuit affirmed. View "Fuqua v. SVOX USA, Inc." on Justia Law