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

Nelson spent six months as the Director of Education at Sanford‐Brown College, a for‐profit educational institution in Milwaukee. After he resigned, Nelson initiated suit under the False Claims Act (FCA), 31 U.S.C. 3729. Based on its receipt of federal subsidies from the U.S. Department of Education, Nelson alleges that the college’s recruiting and retention practices resulted in the transmission of thousands of false claims to the government, potentially subjecting the college and its corporate parent to hundreds of millions of dollars in liability. After the United States declined to intervene, the district court ultimately entered summary judgment in favor of Sanford‐Brown. The Seventh Circuit affirmed. The district court did not err by holding that its subject matter jurisdiction was limited to the period of time when Nelson was employed by SBC (2008-2009). FCA liability is not triggered by an institution’s failure to comply with Title IV Restrictions after its entry into a Program Participation Agreement, unless the relator proves that the institution’s application to establish initial Title IV eligibility was fraudulent. Sanford-Brown entered into its PPA in 2005. View "United States v. Sanford-Brown, Ltd." on Justia Law

Locke, a parolee, sued Haessig, a state official, under 42 U.S.C. 1983 for violating the Equal Protection Clause, based on how Haessig responded to Locke’s complaint that her subordinate, a parole officer, was sexually harassing Locke. Locke provided evidence that Haessig was told of the harassment, failed to intervene or investigate, and then threatened to retaliate against Locke for complaining. The district court denied Haessig’s motion for summary judgment on the basis of qualified immunity. The Seventh Circuit affirmed, rejecting Haessig’s claim that she lacked the required intent to discriminate. Accepting Locke’s version of the facts, a reasonable jury could return a verdict for Locke. Haessig was told of Locke’s complaints, but never met with him to discuss the allegations or tried to protect him from further harassment. According to Locke, after hearing of his complaint, Haessig expressed anger toward Locke and said he would never get off of his electronic ankle monitor until he was discharged from parole. A reasonable jury could infer intent to discriminate. That was clearly established law in 2008 when the events took place. Haessig had reasonable notice that her alleged actions were unlawful and so is not entitled to qualified immunity. View "Locke v. Haessig" on Justia Law

After a sleepover at the Aleshire house, a nine-year-old girl reported to her mother having a “dream” that Aleshire had pulled down her pajama bottoms and photographed her “privates.” Her mother called the police. Aleshire admitted entering the room where the girls (including Aleshire’s daughter) were sleeping, but he denied moving any girl’s clothing. Aleshire stated he was searching for his daughter’s headphones. Executing a state court warrant, police found child pornography, which Aleshire had created. He conditionally pleaded guilty to violating 18 U.S.C. 2251 and appealed denial of his motion to suppress, arguing that probable cause depends on facts rather than dreams. The judge had reasoned that the girl’s use of “dream” may have been a euphemism selected because she was uncomfortable. The Seventh Circuit affirmed. A warrant-authorized search must be sustained unless it is clear that the judge who issued the warrant exceeded constitutional bounds. It was permissible to understand the word “dream” as a euphemism. The affidavit relayed a statement by the girl’s mother that the girl had used the word “dream” to describe real events before; Aleshire’s admission that he had entered the girls’ sleeping area; and that he had been convicted of sex crimes. View "United States v. Aleshire" on Justia Law

Mintz started at Caterpillar in 2005. In 2007, Mintz was promoted to manufacturing engineer: an intermediary between the design department and the production floor, supervised by Turpen. Mintz moved to a different assembly line and, in 2011, began reporting to Rumler. Mintz’s duties included managing “grief” and engineering change orders; grief refers to discrepancy between what was ordered and what employees are scheduled to build. Mintz’s 2010 evaluation, prepared by Turpen, included an overall rating of “3B-Valued Performance.” The section that involved grief and change orders stated “does not meet.” His first review of 2011 resulted in a lower “3C” rating. Mintz, the only African American engineer working in the area at Caterpillar, believed that his rating was based on race. For the third quarter, Mintz received a “4-Needs Improvement,” indicating potential termination. Rumler assigned others to assist Mintz in resolving deficiencies. He allowed Mintz to work overtime and during a shutdown. Mintz’s 2011 year-end evaluation was “4”with a “does not meet” assessment of grief and change orders. His performance had worsened, causing tear down hours and assembly line down time. Mintz claimed racial discrimination. The year-end evaluation resulted in a $9,500 difference in his bonus payment. Mintz had no evidence of any race-related comments or jokes. He did not identify any Caterpillar employee that he believes was treated better than him. In 2012, Mintz transferred to another department where he remains employed. In his suit, claiming violation of Title VII, the Seventh Circuit affirmed judgment in favor of Caterpillar. Mintz was not meeting legitimate expectations and had no evidence that his complaint of race discrimination caused his evaluation. View "Mintz v. Caterpillar, Inc." on Justia Law

Engstrand, a former dairy farmer, applied for Disability Insurance Benefits and Supplemental Security Insurance because of pain caused by diabetic neuropathy and osteoarthritis, in July 2010, when he was 47. He alleged an onset of disability in July 2007, more than a year before his date last insured in September 2008. The ALJ concluded that his account of his limitations was not credible, that the opinion of his treating physician was not entitled to deference, and that Engstrand was not disabled. The Seventh Circuit reversed and remanded, stating that the ALJ wrongly evaluated the significance of his daily activities and did not explain his rejection of the doctor's testimony. View "Engstrand v. Colvin" on Justia Law

To fix a 2004 Teamsters election, Bania and the union president diverted ballots by changing members’ addresses in the database. They collected those ballots and cast falsified votes. After an investigation, they employed the same fraud during a second election. Bania was convicted of conspiracy to commit mail fraud and theft from a labor organization (18 U.S.C. 371), four counts of mail fraud (13 U.S.C. 1341 and 1346), and six counts of embezzling, stealing, and unlawfully and willfully abstracting and converting property and other assets of a labor organization (29 U.S.C. 501(c)). In 2009, the court sentenced Bania to concurrent 40-month terms, departing from the low-end of the guidelines, 97 months, and ordered Bania to pay $900,936 in restitution, reflecting salaries paid to co-defendants and expenses of the second election. The court later rejected Bania’s 28 U.S.C. 2255 motion, alleging ineffective assistance of counsel in disregarding Bania’s instruction to appeal. In 2012, Bania completed his prison term. In 2013, the district court denied Bania’s motion for early termination of supervised release because of his outstanding financial obligation. Bania did not challenge that rationale, but argued that the restitution calculation improperly totaled the loss he intended to cause, rather than the loss actually caused. The Seventh Circuit affirmed the decision not to terminate supervised release. Bania filed an unsuccessful “Motion to Terminate Order of Restitution and Order of Forfeiture.” The Seventh Circuit affirmed; the court lacked jurisdiction to hear Bania’s motion. The time to appeal his sentence has long passed. View "United States v. Bania" on Justia Law

Since 1989 Sveum and his brother owned a Wisconsin home-building company, Kegonsa. Kegonsa’s creditor, Stoughton Lumber had sued Sveum and his brother and Kegonsa under Wisconsin law, alleging breach of contract and theft by contractors. Under Wisconsin law, money paid to a contractor by an owner for improvements, constitutes a trust fund in the hands of the contractor until all claims have been paid. The use of such money by a contractor for any other purpose until claims have been paid, is theft by contractor. The suit settled for $650,000. Sveum violated the settlement agreement. Stoughton sued again and obtained a $589,638.10 default judgment. Sveum filed for Chapter 7 bankruptcy, seeking to discharge his debts, including the debt to Stoughton. Stoughton responded with an adversary proceeding, claiming that Sveum’s debt to Staughton was not dischargeable. The bankruptcy judge agreed and denied discharge. The district court affirmed. The Seventh Circuit affirmed, noting Sveum’s false representations and use of funds held in trust for Stoughton to pay other creditors ahead of Stoughton. The Bankruptcy Code forbids discharge of a debt under those circumstances, 11 U.S.C. 523(a)(4).“ View "Stoughton Lumber Co., Inc. v. Sveum" on Justia Law

Stern worked at St. Anthony’s Health Center (SAHC) as Chief Psychologist, with supervisory, administrative, and clinical responsibilities. In 2010, Stern received an annual performance evaluation that assigned an overall score of 2.54/4, citing concerns over administrative responsibilities. Weeks later, a subordinate resigned and, during her exit interview, said Stern had “cognitive issues.” There had been patient complaints. Other coworkers expressed similar concerns about “possible dementia.” SAHC required Stern to undergo a fitness-for-duty evaluation and placed him on a paid leave of absence. SAHC agreed to Stern’s choice of the Chief of Clinical Neuropsychology at Washington University Medical School, for the evaluation. The final report indicated short-term memory deficiencies, with a level of memory functioning below expectation and stated “Stern is not believed to be fit for duty in his current position.” Stating that it could not provide a position with reduced responsibilities, SAHC terminated Stern. Stern sued under the Americans with Disabilities Act. The district court granted SAHC summary judgment. The Seventh Circuit affirmed, stated that it was troubled that SAHC failed to engage in an interactive process to find reasonable accommodations to permit Stern to continue his employment, but that Stern failed to create an issue of fact as to whether he was able to perform the essential functions of his job with or without reasonable accommodation. View "Stern v. St. Anthony's Health Ctr." on Justia Law

Over four years, Dade, a former licensed real estate agent, with co-defendants, facilitated loans to purchase residential real estate by knowingly providing lenders with false statements and documents. Dade referred potential buyers to loan officers and provided false payroll stubs and W-2 forms from fake companies. Dade (with help) refinanced a mortgage on his own Chicago property, stating that he was paying monthly rent of $1,450 (he did not live in the house), and provided a rental verification from “Jireh,” which did not exist. Dade received a $156,000 loan. He was charged with bank fraud, 18 U.S.C. 1344, wire fraud, section 1343, and mail fraud, section 1341. He pleaded guilty to bank fraud, based on the fraudulent refinancing; the remaining charges were dismissed. The government sought a 2-level upward adjustment for his role as an organizer, leader, manager, or supervisor in the offense, U.S.S.G. 3B1.1(c). When preparing the presentence report, however, the probation officer concluded that a 4-level upward adjustment would be appropriate, stating that the scheme had involved five or more participants and Dade had organized the scheme. The government adopted that position, recounting the facts underlying the charges dismissed as part of Dade’s plea agreement. The Seventh Circuit affirmed his 20-month sentence, upholding the upward adjustment. View "United States v. Dade" on Justia Law

Durukan America, a Texas candy company, sued Rain Trading, an Illinois wholesaler, and its president, Canbulat, breach of contract and deceptive practices for allegedly refusing to pay for $86,000 in merchandise. To prove service, Durukan filed with the court two affidavits from a process server. After a month passed without an answer from the defendants, the district court entered a default judgment for Durukan. About a year later, after Canbulat was arrested for failing to respond to a citation to discover evidence, the defendants moved to vacate the default judgment, submitting an affidavit and records to show that they were never served. Canbulat provided corroboration that he was not at the location where service purportedly occurred. Without holding a hearing to address the dueling affidavits, the district court denied the motion. The Seventh Circuit vacated and remanded, holding that the district court should have held a hearing to resolve the factual conflict in the affidavits. View "Durukan Am., LLC v. Rain Trading, Inc." on Justia Law