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

Since 1982 Chicago has provided free or subsidized health care to certain retirees who receive pension benefits. In 2013 the ordinance establishing those benefits expired. After being notified that they would have to pay more for medical coverage in 2014, the retirees filed suit, alleging that any reduction of health care or increase in the retirees’ contribution toward it violated Art. XIII 5 of the Illinois Constitution, which says that “[m]embership in any pension or retirement system of … any unit of local government … shall be an enforceable contractual relationship, the benefits of which shall not be diminished or impaired” and the Contracts Clause of the U.S. Constitution. Following removal, the district court dismissed the suit, ruling that the Illinois Pensions Clause does not apply to health care. While the case was on appeal, the Supreme Court of Illinois held that the Pensions Clause applies to health benefits. The Seventh Circuit vacated, noting that the Illinois case did not address the exact issue in this case. Because the Supreme Court of Illinois has granted review of a similar case and because this suit began in state court, relinquishing supplemental jurisdiction is preferable to certifying questions to the state judiciary. View "Underwood v. City of Chicago" on Justia Law

Nelson, a former employee of the Lake County Auditor’s office, brought suit under 42 U.S.C. 1983 against Katona, individually and as Lake County Auditor, and Lake County Indiana, claiming that she was unlawfully terminated from her job in retaliation for her political support of Barack Obama. After trial, the court entered judgment against Nelson in accordance with the jury’s verdict. The Seventh Circuit rejected Nelson’s appeal. Nelson failed to move for a judgment as a matter of law under Rule 50(a) before the case was submitted to the jury and did not make any motion pursuant to Rule 50(b) or Rule 59 after the verdict. Failure to comply with Rule 50(b) forecloses any challenge to the sufficiency of the evidence on appeal. A post‐verdict motion is necessary because “[d]etermination of whether a new trial should be granted or a judgment entered under Rule 50(b) calls for the judgment in the first instance of the judge who saw and heard the witnesses and has the feel of the case which no appellate printed transcript can impart.” View "Nelson v. Holinga-Katona" on Justia Law

When the dude ranch owned by a closely held Wisconsin corporation was sold, the shareholders planned to liquidate, but the asset sale had produced a sizable capital ($1.8 million) gain and the corporation faced significant federal and state tax liability. Midcoast proposed an intricate tax-avoidance transaction that involved Midcoast purchasing shares for offset against bad debts and losses purchased from credit card companies, purportedly financing the purchases with a loan. The shareholders implemented the plan. The taxes were never paid. The IRS sought to hold the former shareholders responsible for the tax debt as transferees of the defunct corporation under 28 U.S.C. 6901 and Wisconsin law of fraudulent transfer and corporate dissolution. The tax court ruled in favor of the IRS. The Seventh Circuit affirmed, agreeing with the tax court that the substance of the transaction was a liquidation. Midcoast did not actually pay the shareholders for their stock; instead, each shareholder received a pro rata distribution of cash on hand— the proceeds of the asset sale—making them “transferees” as that term is broadly defined in section 6901(h). View "Dugan v. Comm'r of Internal Revenue" on Justia Law

Nearly two years after he stopped using CIBA contact lenses, Kallal sued the company, claiming that a defect had hurt his eyes. CIBA itself had spotted a problem of poor permeability with some of its lenses and had issued a major recall. CIBA claimed that Kallal never used the recalled lenses. Noting that Kallal’s proof of defect relied entirely on the recall, and that the evidence showed that Kallal himself never purchased any of the recalled lenses, the district court granted judgment for CIBA. The Seventh Circuit affirmed. Once CIBA demonstrated that the lenses that it manufactured and Kallal used were not subject to the recall, the company was entitled to summary judgment View "Kallal v. CIBA Vision Corp." on Justia Law

Keirkhavash did not depart when her tourist visa lapsed. Two days before the statutory deadline, she sought asylum, contending that Iran would persecute her because she had supported a group (MEK) seeking overthrow of Iran’s government. She claimed she had been expelled from college, denied employment, imprisoned, kicked and denied food while confined, leading her to flee Iran in 1999. The IJ credited this testimony but denied the application because the State Department had classified MEK as a terrorist organization, which made Keirkhavash ineligible under 8 U.S.C. 1158(b)(2)(A)(v). The Board of Immigration Appeals remanded, concluding that she remained eligible for relief under the Convention Against Torture. Before the new hearing, Keirkhavash changed her story, claiming that some unknown person had forged her signature and that she and her father had given testimony consistent with the written statement because her lawyer told them to lie. She now claims that her former husband had accused her of adultery, which could lead to her being stoned in Iran and that Iran would persecute her because of her statement that she had supported MEK, despite the statement’s withdrawal. No corroboration was offered for either ground. The BIA and Seventh Circuit upheld denial of her petitions, characterizing Keirkhavash and her father as confessed liars. View "Keirkhavash v. Holder" on Justia Law

Hall, an aviation mechanic, was discharged in 2001 by the military because of pain from an ankle injury. He was deemed by the Department of Veterans Affairs to be 70 percent disabled and to be “unemployable” in “a substantially gainful occupation” and totally disabled, 38 C.F.R. 4.16. In 2010 he applied for social security disability benefits on the ground that pain from his ankle injury, plus back and knee pain and other ailments, had worsened and rendered him totally disabled under Social Security Act standards. From 2005-2011 he underwent physical examinations and diagnostic tests. Some results were normal but many were not, revealing torn ligaments, obesity, possible arthritis, an “alignment problem” in his back, and fibromyalgia. Hall testified about his pain and inability to perform normal functions. The Seventh Circuit reversed the denial of benefits. Several doctors noted that Hall had been in pain when examined, which was some corroboration of his testimony. The ALJ could have resolved her doubts by ordering an MRI or directing a further examination by a medical expert. In addition, her failure to analyze and weigh the VA determination that Hall is totally disabled was a further oversight. View "Hall v. Colvin" on Justia Law

Austin, an Indiana inmate, was assigned, for one day, to do construction work in the crawl space of a parole office near the prison. Austin was punished in a prison disciplinary proceeding for having attempted to traffic in tobacco. He lost 60 days of good-time credit, was demoted from “credit class 1” to “credit class 2” (inmates in the first class earn one day of good time credit for each day of imprisonment; in the second class they earn one day for every two days), was given 20 hours of extra work duty, and was denied access to the commissary for 25 days. The evidence consisted of a guard’s statement: shaking down the crawl spase [sic] at the Gary Parole Office … found 5 packs of Bugler cigarette papers, 1 ziploc bag that appears to have tobacco in it, 2 ziplock [sic] bags filled with more ziplock [sic] bags … Austin … was assigned to this area. Austin sought habeas corpus relief, 28 U.S.C. 2254. The district court denied relief, ruling that the evidence, though scanty, was adequate to prove “constructive possession” of tobacco. The Seventh Circuit reversed, stating that, convicted without evidence of guilt, Austin was denied due process of law. View "Austin v. Pazera" on Justia Law

Moslavac was convicted of possessing cocaine with intent to distribute, 21 U.S.C. 841(a)(1); (b)(1), and sentenced to 105 months imprisonment, with four years of supervised release. Three months before Moslavac’s supervised release was set to end, Moslavac was arrested. The government claimed that Moslavac: committed battery of two female victims; had a positive urine test for drugs; failed to report for drug testing; associated with persons using marijuana; failed to give advance notice of a change in residence; and failed to report to an appointment with his parole officer. Moslavac contested the battery allegations, but did not dispute the remaining claims. The government relied on statements by the victim’s nine-year-old daughter who allegedly witnessed the battery. The district court determined that her statements, as relayed by her father and by voicemail, were excited utterances, and were admissible hearsay, Fed. R. Evid. 803(2). The court did not engage in an interest balancing analysis under FRCP 32.1(b)(2)(C). The judge stated that he gave the statements “great weight.” The sentencing guidelines range was between six and 12 months imprisonment. The court sentenced Moslavac to nine months of imprisonment, with two additional years of supervised release. The Seventh Circuit reversed. It was not harmless error to fail to perform an interests analysis. View "United States v. Moslavac" on Justia Law

When the applicant was 15 years old, “Harrington rods” were inserted into his spine to correct a 57-degree curvature of the spine. He then developed chronic back pains. He also has cognitive difficulties. At age 20 he was determined to be eligible for social security disability benefits, but he later obtained a job at a nonprofit organization, driving disabled clients, helping with cooking and cleaning, and performing clerical tasks. The Social Security Administration determined in 1999 (when the applicant was 32) that he was not disabled and tried to recover the $65,000 in benefits. He declared bankruptcy. Three years later, he was fired because he could not keep up with the demands of the job. Two years later he reapplied for social security disability benefits. Several physicians and mental-health professionals diagnosed: chronic back pain; cubital tunnel syndrome; a somatoform disorder; depression, anxiety, panic attacks, agoraphobia, low intelligence, dizziness, migraine headaches, and deficient short-term memory. The applicant and his father testified to sleeplessness, loss of balance, blurred vision, and abdominal pain. The ALJ concluded that he was capable of unskilled light work of a routine and repetitive character and was not disabled. The Seventh Circuit reversed the denial of benefits, finding the opinion “riddled with errors.” View "Adaire v. Colvin" on Justia Law

McManus, on trial for murdering his wife and young daughters, decompensated during testimony. He had several panic attacks; his symptoms required two trips to the emergency room. He was treated with a combination of psychotropic drugs—including one that knocks out memory—and an opioid painkiller. He remained on mind-altering medications for the duration of the trial. The judge never ordered a competency evaluation, but focused on getting McManus “fixed up” enough to complete the trial, and sentenced him to death. The Indiana Supreme Court affirmed on direct appeal, but on post-conviction review the trial judge found McManus intellectually disabled and ineligible for the death penalty (IND. CODE 35-36-9-6). The Indiana Supreme Court disagreed and reimposed the death sentence. McManus sought federal habeas review. The district court denied relief. The Seventh Circuit reversed. While McManus is not entitled to habeas relief on his claim of categorical ineligibility for the death penalty, the powerful effect of the medications alone created substantial doubt about his fitness for trial. The approach taken by the trial judge failed to apply the correct legal framework for competency questions. The Indiana Supreme Court recited the correct legal standard but did not actually apply it. View "McManus v. Neal" on Justia Law