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

Flores was pulled over on an Illinois highway for driving with an obstructed license plate—his rear plate was affixed to his car by a standard frame that covered the plate’s periphery. After Flores consented to a search of his vehicle, police officers discovered over five kilograms of heroin, and Flores confessed to transporting it. He later moved to suppress, arguing that the officer did not have probable cause for the stop. The Seventh Circuit reversed denial of the motion, noting that the officer acknowledged that as he “got closer it appeared to read Baja California which is from Mexico.” The officer could not have reasonably believed that the “commonplace” license frame violated state law. View "United States v. Hernandez Flores" on Justia Law

Dunnet, a highway construction company, is prequalified to bid and work on Illinois Department of Transportation (IDOT) projects and competes for federally assisted highway construction contracts. Dunnet is owned and controlled by two white males. Between 2007 and 2009, its average annual gross receipts were over $52 million. To receive federal-aid funds for highway contracts, IDOT must have a “disadvantaged business enterprise” (DBE) participation program. A DBE is a for-profit small business concern that is at least 51% owned and controlled by one or more socially and economically disadvantaged individuals. There is a rebuttable presumption that women and members of racial minority groups are socially and economically disadvantaged, but an individual owner of any race or gender may qualify as “socially and economically disadvantaged.” A firm is not an eligible DBE if the firm (including affiliates) has had average annual gross receipts over its previous three fiscal years, greater than $22.41 million. Illinois has not met its DBE participation goals. Dunnet was denied a goal waiver and was not awarded a major expressway project. The Seventh Circuit affirmed summary judgment rejecting Dunnet’s claim that IDOT’s DBE Program discriminates on the basis of race, concluding that Dunnet lacked standing to raise an equal protection challenge based on race and that the Program survived the constitutional and other challenges. View "Dunnet Bay Constr. Co. v. Borggren" on Justia Law

MISO, an organization of independent transmission-owning utilities, has linked the transmission lines of its members into a single interconnected grid across 11 states. The Generators, which operate 150-megawatt wind-powered electric generation facilities in Illinois, wish to connect to the system run by MISO. The Federal Energy Regulatory Commission (FERC), acting under 16 U.S.C. 824(a), has standardized the process: the Generators submitted requests to MISO, which then produced studies (paid for by the Generators) to assess potential impact on the grid and calculate the cost of necessary upgrades. After the studies were complete and agreements signed, MISO notified the Generators of a “significant error” that failed to include certain upgrades and that the Generators would either have to agree to fewer megawatts or pay for additional upgrades estimated to cost $11.5 million. MISO presented superseding Agreements to both Generators. The companies refused to sign. FERC found that the Generators should pay for the additional network upgrades. The Seventh Circuit denied a petition for review. The record failed to show that the Generators relied on the original, mistaken studies or that reducing the output would have made their farms economically unsustainable. They also had an exit option. The court noted that the Generators apparently built their wind farms despite the dispute. View "Pioneer Trail Wind Farm, LLC v. Fed. Energy Regulatory Comm'n" on Justia Law

Bible defaulted on a loan under the Federal Family Education Loan Program, but entered into a rehabilitation agreement. She remains current on her reduced payments, but a guaranty agency assessed $4,500 in collection costs. Bible’s loan terms were governed by a Stafford Loan Master Promissory Note (MPN), approved by the Department of Education, incorporating the Higher Education Act, and providing for “reasonable collection fees and costs” in default, as defined by regulations promulgated under the Act. Bible sued, alleging breach of contract and violation of the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. 1961, arguing that federal regulations prohibit assessment of collection costs and that the guaranty agency committed mail fraud and wire fraud in assessing collection costs despite its representations that her “current collection cost balance” and “current other charges” were zero. The court dismissed, finding both claims “preempted” by the Higher Education Act, which permits collection costs and that Bible had not shown “a scheme to defraud; commission of an act with intent to defraud; or the use of mails or interstate wires in furtherance of a fraudulent scheme.” The Seventh Circuit reversed. The contract claim does not conflict with federal law. The Secretary of Education interprets the regulations to provide that a guaranty agency may not impose collection costs on a borrower who is in default for the first time and has complied with an alternative repayment agreement. Bible’s RICO claim is not preempted. View "Bible v. United Student Aid Funds, Inc." on Justia Law

Pust and Anderson ran a $10 million Ponzi scheme for over two years getting clients to invest in a phony low-income housing investment program in the Chicago area. Anderson pled guilty, but Pust proceeded to trial. He was convicted by a jury of four counts of wire fraud, 18 U.S.C. 1342, and was sentenced to 34 months’ imprisonment to run concurrently on each count. The Seventh Circuit affirmed, rejecting a claim that the evidence was insufficient to establish that he acted with intent to defraud the alleged victims, and upholding court’s decision to admit statements of a co-conspirator under Federal Rule of Evidence 801(d)(2)(E). The court noted that defense counsel responded “no objection” regarding the testimony and that other evidence included testimony by several victim-investors and numerous emails between Pust and Anderson, Pust and the victim-investors, and Anderson and the victim-investors. View "United States v. Pust" on Justia Law

Alaura, age 22, was struck in the back of his head by an assailant wielding a bar stool. The blow shattered his skull, necessitating emergency surgery to remove part of his brain and place a metal plate in his skull. During this craniotomy Alaura had a seizure. Alaura has repeatedly seen neurologists, complaining of headaches, dizziness, and confusion, and has been diagnosed with post-traumatic headaches, cognitive impairment, and occipital neuralgia, an injury to or inflammation of nerves that run from the spinal cord at the base of the neck up through the scalp. It causes piercing or throbbing pain in the neck, the back of the head, and the front of the head behind the eyes. A year later, Alaura still complained of daily headaches, “absence-type” seizures several times a week, and back and neck pain. The Seventh Circuit reversed denial of Alaura’s claim for social security disability benefits as premature, stating that the “long list” of severe impairments “don’t sound like trivial obstacles to being able to hold full-time employment.” The administrative law judge’s explanations were “thin,” he made no effort to consider the combined effects on Alaura’s ability to work of all his impairments and limitations. View "Alaura v. Colvin" on Justia Law

Black repeatedly tried to pay off a more than $5 million tax debt with checks drawn on checking accounts that he knew were closed to prevent the IRS from collecting taxes from him. A jury convicted Black of one count of obstructing and impeding the IRS from collecting taxes and four counts of passing and presenting fictitious financial instruments with intent to defraud. The district court sentenced Black to 71 months in prison. The Seventh Circuit vacated and remanded for resentencing, agreeing that the district court erred in determining his sentencing range under U.S.S.G. 2T1.1, by improperly calculating the tax loss by aggregating the face value of the fraudulent checks and by including penalties and interest in the calculation. The court upheld refusal to consider audit errors and apply available deductions because Black could not establish that he was entitled to any reduction in taxes owed. View "United States v. Black" on Justia Law

In 1999, detainees at the Cook County Juvenile Temporary Detention Center claimed that Center personnel abused detainees. Eight years into the certified class action, the court appointed a “Transitional Administrator” to run the Center in compliance with state and federal requirements. State law, effective in 2008, moved the Center’s management from the county’s political branches to the Circuit Court of Cook County, 55 ILCS 75/3(b), and required the Chief Judge to appoint a new head within 180 days. When the case was argued in 2011, the appointment had not been made. In 2009 the Transitional Administrator proposed reorganization, which would terminate about 225 union employees. The union for Center employees intervened. The district court rejected its position that the proposal would violate several statutes and authorized the implementation, stating that collective-bargaining rights must give way, as a matter of Illinois law, when necessary to effective management. The Seventh Circuit reversed, noting that the judge did not find that overriding the right to bargain was essential to solve any constitutional problem at the Center or about the necessity for a particular remedy to cure any violation. The plan has been in effect for years, and restoring union members to their old positions is not possible. View "Doe v. Teamsters Local Union" on Justia Law

The Indianapolis Metropolitan Police Department participated in a reality television program, The Shift. The film crew followed homicide detectives investigating a deadly 2008 home invasion. Police eventually arrested Hart, in the final episode of the program’s first season. After Hart spent nearly two years in jail awaiting trial, the charges were dismissed. The Shift’s audience was not informed. Hart sued detectives and the city under 42 U.S.C. 1983, claiming that he was arrested without probable cause and that the lead detective made false or misleading statements in her probable cause affidavit for his arrest. The court rejected all claims before trial. The Seventh Circuit affirmed, but noted “many troubling aspects of IMPD’s investigation, and this case should warn police departments about having their detectives moonlight as television stars.” A reasonable trier of fact could not find that police lacked probable cause to arrest Hart. Nor could a reasonable jury find that the lead detective made false or misleading statements in her affidavit. Four surviving witnesses from the home invasion separately identified Hart as one of the men who attacked them. None of the police had any reason to doubt these identifications when they arrested Hart. View "Hart v. Mannina" on Justia Law

In 1988, Kramer was convicted of conspiring to distribute marijuana, 21 U.S.C. 846, and engaging in a Continuing Criminal Enterprise (CCE), 21 U.S.C. 848(b). Based on a motion filed under 28 U.S.C. 2255, Kramer’s section 846 conviction was vacated in 1998. His section 848 convictionwas affirmed. The Seventh Circuit acknowledged that a section 846 charge could not be counted as one of the section 848 “continuing series” offenses, but held that any error in allowing the jury to consider the section 846 count was harmless, because Kramer had been charged with many additional drug offenses. In 2014, Kramer filed another motion under section 2255, challenging his CCE conviction. The district court dismissed Kramer’s petition, concluding that it lacked subject matter jurisdiction over Kramer’s claim. It characterized Kramer’s motion as successive and barred by section 2255’s prohibition of subsequent petitions. The Seventh Circuit affirmed. The Supreme Court’s 1999 holding in Richardson v. United States invalidated the very jury instruction that was employed in Kramer’s case. If Kramer were tried today, the jury would be required to unanimously agree on the three predicate felonies used to make up the “continuing series” of CCE violations, but the district court properly characterized the petition as successive. View "Kramer v. United States" on Justia Law