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

Pine Top, an insurer, sued Banco, an entity wholly owned by Uruguay, claiming that Banco owes $2,352,464.08 under reinsurance contracts. The complaint sought to compel arbitration but alternately proposed that the court enter judgment for breach of contract. Pine Top moved to strike Banco’s answer for failure to post security under Illinois insurance law. The district court denied the motion and later denied the motion to compel arbitration. The Seventh Circuit affirmed, citing the Foreign Sovereign Immunities Act, which prohibits attaching a foreign state’s property, thereby preventing application of the Illinois security requirement, 28 U.S.C. 1609. Banco did not waive its immunity in the manner allowed by that law and Pine Top forfeited contentions that the McCarran-Ferguson Act allows a state rule to govern. On the arbitration question, the court held that denials of motions to compel arbitration under the Panama Convention are immediately appealable under 9 U.S.C. 16(a)(1)(B), but that the contract language, reasonably read, does not transfer the right to demand arbitration. View "Pine Top Receivables of IL, LLC v. Banco de Seguros del Estado" on Justia Law

Winston sued under 42 U.S.C. 1983, alleging that Officer O’Brien used excessive force while detaining Winston at a Chicago police station, tasering him repeatedly and punching him while he was in handcuffs. Winston’s attorneys sought $ 20,000 in compensatory damages and an unspecified amount of punitive damages. The jury found that O’Brien was liable for $1 in compensatory damages and $7,500 in punitive damages. Winston then sought $336,918 in attorney’s fees under section 1988. The district court found that Winston’s “victory was real, not Pyrrhic,” that Winston’s attorneys could recover fees for all their requested hours but sought too high of an hourly rate, and granted a reduced fee award of $187,467. Winston filed a petition for indemnification and motion for writ of execution against the city. The district court concluded that the city was liable for the fees under the Governmental and Governmental Employees Tort Immunity Act, 745 ILCS 10/9-102. The Seventh Circuit reversed. The language of the statute gives the city discretion in deciding to indemnify attorney’s fees associated with an award of compensatory damages, and the collective bargaining agreement with the police union did not convert it into a mandate to pay fees. View "City of Chicago v. Winston" on Justia Law

The Chabad branch of Hasidic Judaism emphasizes mysticism over legalism. There are Chabad emissaries on many college campuses where they manage Chabad houses. Tannenbaum Chabad House, near Northwestern University’s Evanston campus, has been run by Rabbi Klein since 1985. Northwestern paid Sodexo to provide food for its students and Sodexo paid Klein for rabbinic supervision of its provision of kosher food. Northwestern reimbursed Sodexo . In 2001 the university learned that underage students had vomited after excessive consumption of alcohol at Tannenbaum; one was hospitalized. In 2005, at a university dining hall, alcohol was served to underage students, although Klein had assured officials that no alcohol would be served. Although the chaplain warned Klein, hard liquor continued to be served to students on Jewish holidays and Friday evenings. Klein made no effort to limit consumption and drank with the students. After another rabbi complained, the university informed Klein that unless he was replaced, the university would terminate Chabad House's recognition. Klein remained and, in 2012, the university terminated recognition, access to various Northwestern facilities and services, and the Sodexo contract. In a suit under 42 U.S.C. 1981 and 42 U.S.C. 2000d, the district court granted the defendants summary judgment. The Seventh Circuit affirmed. View "Lubavitch-Chabad of IL v. Northwestern Univ." on Justia Law

Doe settled his sexual abuse claims against the Archdiocese of Milwaukee for $80,000 after participating in a voluntary mediation program. He later filed a claim against the Archdiocese in its bankruptcy proceedings for the same sexual abuse. Doe responded to the Archdiocese’s motion for summary judgment by contending that his settlement was fraudulently induced. The argument depends upon statements made during the mediation, but Wisconsin law prohibits the admission in judicial proceedings of nearly all communications made during mediation. Doe argued that an exception applies here because the later action is “distinct from the dispute whose settlement is attempted through mediation,” Wis. Stat. 904.085(4)(e). The Seventh Circuit affirmed summary judgment in favor of the Archdiocese. Doe’s bankruptcy claim is not distinct from the dispute settled in mediation. The issue in both proceedings, which involved the same parties, is the Archdiocese’s responsibility for the sexual abuse Doe suffered. Doe sought damages in both the mediation and bankruptcy for the same sexual abuse; he did not seek separate or additional damages for the alleged fraudulent inducement. View "Doe v. Archdiocese of Milwaukee" on Justia Law

Jones was murdered, leaving no will. He owned a life insurance policy through his employer. He did not designate a beneficiary. The policy provided that the proceeds ($307,000) would go first to a surviving spouse (Jones never married), second to surviving children, third to surviving parents, and fourth to his estate. Quincy claimed to be Jones’s son; Moore, claimed to be his daughter. The insurance company filed an interpleader action. After paying $24,000 for funeral expenses and $137,000 to Quincy, the company deposited the remainder with the court. Jones’s biological sister also claimed the proceeds, arguing that Jones was homosexual and had not fathered children. Jones’s income tax returns showed that he had claimed various children as dependents, sometimes omitting Quincy. A DNA test established that Moore was not his daughter. The district judge declined to order a test for Quincy because Jones had held Quincy out as his biological son and had signed an order in 1996 acknowledging Quincy (then six years old) as his son. The judge awarded Quincy the deposited funds.. The Seventh Circuit affirmed. Rule 35 would have allowed, but did not require, the judge to order a DNA test, given the presumption of paternity under Illinois law.View "MN Life Ins. Co. v. Jones" on Justia Law

The Everetts formerly operated a PDRI franchise. After that franchise was terminated, they violated a non-compete clause. Only Mr. Everett and the Everetts’ corporation actually signed the franchise agreement. PDRI sought to bind Ms. Everett to an arbitration award pursuant to the franchise agreement. Although Everett was a non-signatory to the franchise agreement, PDRI asserted she was subject to arbitration under the doctrine of direct benefits estoppel. The district court determined that the benefits Everett received were filtered through her ownership interest in their corporation or through her husband and were therefore indirect. The Seventh Circuit reversed, holding that Everett did receive a direct benefit. It is clear that the Everetts’ corporation was formed to gain the benefit of the franchise agreement and was used only to conduct the business of the franchise; Ms. Everett had a 50% ownership and played an active role in running the corporation.View "Everett v. Paul Davis Restoration, Inc." on Justia Law

Meade wrote a letter to the League for Innovation in the Community College about her employer, Moraine Valley Community College. Meade, an adjunct faculty member, alleged that poor treatment of adjuncts harmed students. She signed the letter as president of the adjunct faculty union. Two days later, Moraine Valley fired Meade, sending her written notice explicitly citing Meade’s letter. A few weeks later, the college warned Meade that it would regard her further presence on campus as criminal trespass. Believing that Moraine Valley retaliated against her for exercising her right to freedom of speech and violated her due process rights, Meade sued the college under 42 U.S.C. 1983. The district court dismissed, reasoning that Meade’s letter did not address matters of public interest and could not serve as the basis of a First Amendment retaliation claim. It rejected Meade’s due process claim for lack of a cognizable property interest in her employment. The Seventh Circuit reversed. Meade may not pursue a due process claim based on the deprivation of a liberty interest, but pleaded enough to go forward on the theory that the college deprived her of a protected property interest. She also stated a claim for First Amendment retaliation.View "Meade v. Moraine Valley Cmty. Coll." on Justia Law

In 2009, Illinois State Police Officer Zeigler pulled over Mordi’s vehicle. A trained dog discovered drugs in the car. Zeigler arrested Mordi, took him to the station, and left him in an interrogation room. Other officers interviewed Mordi. Mordi is a Nigerian national. Nigeria and the U.S. are parties to the Vienna Convention on Consular Relations Convention. Mordi told Zeigler that his name was Nigerian, but Mordi does not recall mentioning that he was a Nigerian national. Zeigler listed Mordi’s place of birth as Nigeria, but asserts that he was unaware of Mordi’s citizenship. Mordi did tell the interviewing officers about his citizenship. Immigration and Customs Enforcement filed a detainer notice and federal authorities took over the prosecution. Mordi was represented by a federal public defender, who was aware of his nationality. Mordi pleaded guilty to unlawful possession of a controlled substance and is serving a sentence. At no point during criminal proceedings was he informed about his right under the Convention to have the Nigerian consulate notified about his status. He did not learn about the Convention until a year later, from another inmate. He wrote to the Nigerian consulate, but did not follow through. Mordi instituted, but dismissed, habeas proceedings, arguing ineffective assistance. He filed suit under 42 U.S.C. 1983. The district court denied summary judgment motions by Zeigler and the interviewing officers, based on qualified immunity. The Seventh Circuit reversed, finding that the specific legal principle on which this case turns was not clearly established.View "Mordi v. Zeigler" on Justia Law

Welton buys, sells, and rents residential real estate and, from 1994-2001, maintained a collateralized line of credit with the NBI. In 2002, NBI declined to extend that line of credit and gave him 90 days to pay off the account. Initially, Welton was unable to make payments, but by 2006 he reached an agreement with NBI. Under that agreement, Welton sent monthly checks to NBI. Those checks were never cashed. In 2007, realizing the checks remained uncashed, Welton sent a certified check in the amount of the uncashed checks. Keely, NBI’s Vice President, contacted Indianapolis Police Officer Anderson to initiate a criminal investigation. After meeting with Keely, Anderson submitted an affidavit in support of probable cause charging Welton with theft and fraud on a financial institution. Welton was arrested, processed, and released. After a trial in 2011, Welton was found not guilty. In 2013, Welton filed suit under 42 U.S.C. 1983, claiming that several of Anderson’s statements were knowingly false and that Keely provided many of the statements, resulting in a malicious prosecution and denial of his rights under the Fourth and Fourteenth Amendments. The Seventh Circuit affirmed the district court’s dismissal, holding that Welton’s Fourth Amendment malicious prosecution claim was foreclosed by circuit precedent; that there is no constitutional right not to be prosecuted without probable cause and that bare allegations of “fundamental unfairness” were insufficient to implicate the Due Process Clause.View "Welton v. Anderson" on Justia Law

Hennessy, a car parts manufacturer, beset by asbestos-related personal injury claims, sought coverage by National Union. The companies entered into a cost sharing agreement in 2008. As claims occurred, Hennessy asked National Union to indemnify its settlement and defense costs. To resolve their differences about what was owed, Hennessy demanded arbitration under the agreement, which instructs arbitrators to apply Illinois law. Hennessy filed suit under the Illinois Insurance Code 215 ILCS 5/155(1), which provides that, in cases involving vexatious and unreasonable delay, the court may award reasonable attorney fees, other costs, plus an additional amount. Hennessy claimed that National Union’s delays in providing coverage were vexatious and unreasonable. The district judge declined to dismiss, acknowledging a provision that “the arbitrators shall not be empowered or have jurisdiction to award punitive damages, fines or penalties,” but expressing a belief that Hennessy’s claim arose under statutory law rather than under the cost-sharing agreement. National Union appealed under 9 U.S.C. 16(a)(1)(A), (B), the Federal Arbitration Act. The Seventh Circuit reversed. Hennessy waived any right to ask the arbitrator to award punitive damages, fines, or penalties for an allegedly unreasonable delay. Having submitted a dispute to arbitration that explicitly excludes a particular remedy, a party cannot sue in court for that remedy.View "Hennessy Indus., Inc. v. Nat'l Union Fire Ins. Co." on Justia Law