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

McCormick bought a single-premium variable life-insurance policy that permits borrowing against its cash value. Loans are secured by moving an equivalent amount from sub-accounts that the policyholder can invest to a “general account” that draws 4% interest. The policyholder owes 4.7% on any borrowed sums, so the net is 0.7% per annum, plus foregoing the opportunity to exercise discretion about how to invest the borrowed sum. If the owner does not pay the annual interest, “it will be added to the principal of the loan and will bear interest.” McCormick borrowed against cash value and did not pay interest. Independence, the insurer, added the unpaid interest “to the principal of the loan” (which caused additional sums to be moved from investments into the general account) and charged interest on the higher indebtedness. Compound interest has increased the debt by $44,000, which, if not repaid, will reduce the death benefit. McCormick sought a declaration that the $44,000 is not owed, because, when unpaid interest was added to principal and moved to the general account, it was “paid” automatically. The court entered judgment for Independence. The Seventh Circuit vacated with instructions to dismiss. Removal rested on diversity of citizenship, and $75,000 is the minimum amount in controversy for that jurisdiction. View "McCormick v. Independence Life & Annuity Co." on Justia Law

Varga, now 42, had a 1994 medical discharge from the military because of severe endometriosis (a condition which causes pelvic pain). She then worked as a correctional officer, and later an office worker, at the Federal Correctional Institute (FCI) in Oxford, Wisconsin. She left the FCI in 2005 because of her continuing physical and mental impairments and has not worked since March 2006, when her application for disability retirement under the Federal Employees Retirement System was approved. She applied for disability insurance benefits in 2006, alleging she had been disabled since 2005. Between 2005 and 2011, Varga was diagnosed with: PTSD, endometriosis, major depression, irritable bowel syndrome, and fibromyalgia. An Administrative Law Judge denied her application. The district court, affirmed. The Seventh Circuit reversed, agreeing that the ALJ erred by failing to include her mental limitations in the areas of concentration, persistence, and pace in the hypothetical question that he posed to the vocational expert. The flawed hypothetical led the vocational expert and the ALJ to erroneously conclude she was not disabled. View "Varga v. Colvin" on Justia Law

Pickering was mailed a summons for federal jury duty, and later was sent a reminder. When she neither responded nor appeared, the judge asked the Justice Department to institute criminal contempt proceedings. The government sought a rule to show cause. Defendant testified that she had received the summons but had forgotten about it; she had been five months pregnant with her first child, with a complicated pregnancy involving modified bed rest to reduce the risk of miscarriage. She was also taking intermittent leave under the Family and Medical Leave Act, to care for her mother, who was undergoing a total knee replacement and suffering from angioedema. She testified that she is not opposed to serving on a jury—she had appeared for jury duty twice in the state courts. The government declined to cross-examine her. The judge declared her guilty of willful contempt beyond a reasonable doubt, without explaining the basis of his conclusion. He imposed a fine of $250 and placed a criminal conviction on her record, “not a good thing for a bank employee.” The Seventh Circuit reversed, stating that the litigation has been mishandled by the court and the Justice Department, noting that the judge addressed the defendant by her first name. View "United States v. Pickering" on Justia Law

Carter lost his home in Crete, Illinois, after its mortgage foreclosed. He sued the financial institutions involved in making, servicing, or foreclosing his mortgage, alleging constitutional claims based on the fact that the “foreclosing entity” (not identified) did not hold the note or mortgage at the time of the foreclosure. The district court dismissed the suit as frivolous. The Seventh Circuit agreed that the suit and a similar pending suit are “indeed frivolous” and affirmed dismissal. In neither case did the complaint allege anything that might support an inference that the defendants were state actors under 42 U.S.C. 1983. A claim must be dismissed “if it is clear beyond any reasonable doubt that a case doesn’t belong in federal court, the parties cannot by agreeing to litigate it there authorize the federal courts to decide it.” View "Carter v. Homeward Residential, Inc." on Justia Law

Billhartz left more than $20 million to his four children when he died. His estate tax return claimed a deduction for more than $14 million because the amounts paid to the children through a trust were paid pursuant to Billhartz’s contractual obligation under a marital settlement agreement with his first wife. The IRS disallowed the deduction in full and issued a notice of deficiency. The Estate filed suit. Before trial the Estate and the IRS settled; the IRS conceded 52.5% of the claimed deduction. Soon after the settlement, Billhartz’s children sued the Estate in state court, claiming that they were entitled to a larger portion of their father’s fortune and that their prior acceptance of a lesser amount had been obtained fraudulently. The Estate asked the Tax Court to vacate the settlement on the basis that, were the children to prevail, the settlement would bar the Estate from claiming an estate tax refund for any additional amount paid to the children. The Tax Court rejected the Estate’s arguments, and entered a decision reflecting the terms of the settlement agreement. The Seventh Circuit affirmed. The Tax Court did not abuse its discretion by refusing to set aside the settlement. View "Billhartz v. Comm'r of Internal Revenue" on Justia Law

Trovare sought to purchase an affiliated group of family-owned companies. The parties executed a Letter of Intent that included a provision requiring the companies, if they terminated negotiations in writing before a certain date, to pay Trovare a breakup fee of $200,000. Trovare demanded that fee more than a month before the termination date, claiming that the companies intentionally scuttled the deal before the termination date, and then engaged in sham “negotiations” to avoid paying the breakup fee. The companies never sent written notice of termination. Following a remand, the district court concluded and the Seventh Circuit affirmed that the companies had not terminated negotiations before the termination date, and that Trovare was therefore not entitled to the breakup fee. View "Trovare Capital Grp., LLC v. Simkins Indus., Inc." on Justia Law

Attacked by a fellow prisoner while being transported from a court hearing to an Illinois jail, Robinson, pro se, filed suit under 42 U.S.C. 1983, claiming that guards were deliberately indifferent to his safety in failing to protect him. On December 30, 26 days after the court entered final judgment dismissing the suit, Robinson moved to extend the 28-day deadline for filing a motion under Fed. R. Civ. P. 59(e) to alter or amend the judgment. Rule 6(b)(2) prohibits extending the time for filing a Rule 59(e) motion, Robinson missed the deadline. A month later the judge issued an order construing the motion as a Rule 59(e) motion and gave Robinson another 30 days to supplement it, since the motion stated no grounds for relief but just asked for more time. Two weeks after the 30-day deadline the judge denied the ‘Rule 59(e) motion.’ Robinson filed another such motion 12 days later. The judge construed it as a Rule 60(b) motion because the deadline for filing a Rule 59(e) motion had passed. Rule 60(b) lists six grounds for relief from judgment, including “any other reason.” The judge denied Robinson’s Rule 60(b) motion. The Seventh Circuit dismissed an appeal, stating no relief was available. View "Robinson v. Sweeny" on Justia Law

The United States delivered a criminal summons to the office of Sinovel Wind (USA) in Texas in order to serve process on Sinovel Wind Group, a Chinese corporation and the owner of 100% of the shares of Sinovel (USA), which had been indicted for criminal copyright infringement, wire fraud and trade secret theft. The charges arose from Sinovel’s alleged scheme to steal computer source code from American Superconductor for use to assist in operating Sinovel’s wind turbines. Sinovel contested jurisdiction and moved to quash service. Concluding that Sinovel USA was the alter ego of Sinovel and that service on Sinovel USA was proper, the district court denied Sinovel’s motion. The Seventh Circuit concluded that it had no jurisdiction to hear Sinovel’s appeal and that the case did not meet the high standards for issuance of a writ of mandamus. The court rejected arguments that U.S. criminal proceedings against Sinoval could interfere “with ongoing civil litigation in Chinese courts” over the same dispute and that this was an exceptional case in which the importance of the particular value at stake is sufficiently great that an immediate appeal must be allowed to protect that value. View "Sinovel Wind Grp. Co., Ltd v. Crabb" on Justia Law

More than 20 years ago, Newman was sentenced to 540 months’ imprisonment for drug offenses, including distributing 40-50 kilograms of cocaine. Congress and the Sentencing Commission have several times reduced permissible sentences for sellers of crack cocaine, but none of the changes affected persons who distributed powder cocaine, until Amendment 782 to the Sentencing Guidelines effected an across-the-board reduction of two offense levels in the drug-quantity table at U.S.S.G. 2D1.1. Because the Sentencing Commission made that change retroactive, 18 U.S.C. 3582(c)(2) allows district judges to reduce the sentences of persons already in prison. Newman argued ed that his revised sentencing range was 292 to 365 months (the original was 360 months to life), and the prosecutor agreed. The prosecutor recommended a reduction to 472 months, observing that Newman’s criminal history included violence as well as drug sales. The district court initially cut the sentence to 348 months, twice stating that 472 months would be too long, but later rearranged which sentences run concurrently to which others, producing a sentence of 472 months, without explanation. The Seventh Circuit vacated, stating that the court lacked the authority to increase Newman’s sentence by an order entered more than 14 days after December 30, 2014. View "United States v. Newman" on Justia Law

A man robbed Standard Bank in Hammond, wearing thigh-length leather coat, sneakers with red stitching, and a green Chicago Bulls baseball cap. He approached employees with a note demanding money. They turned over $5,000. The robber exited, headed toward Amtech, a nearby business, climbed into a blue Ford Explorer with Illinois plates, and drove off. The vehicle was captured on Amtech surveillance video. Law enforcement refined the image so that all but one digit on the license plate became legible, and searched the Illinois registration database. One possible combination matched a Ford Explorer registered to Miller, who lived nearby. The FBI conducted surveillance. Only Miller and his girlfriend, Loggins, were seen driving the vehicle. Agents searched Miller’s home with Loggins’s consent and recovered a black leather jacket and Miller’s sneakers, which featured red stitching. Loggins’s daughter stated that Miller and Loggins owned green Bulls baseball caps. After Miranda warnings, Miller explained that he had thrown the cap into a dumpster. This conversation was not recorded; Miller did not sign a confession. After Miller’c conviction, the Seventh Circuit affirmed denial of his motion for a new trial, rejecting arguments that an FBI agent offered false testimony and that trial counsel provided ineffective assistance by failing to seek suppression of in-court identification and to challenge the credibility of the FBI agent. Neither purported error affected the outcome. View "United States v. Miller" on Justia Law