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

Grayson does business under the name Gire Roofing. Grayson and Edwin Gire were indicted for visa fraud, 18 U.S.C. 1546 and harboring and employing unauthorized aliens, 8 U.S.C. 1324(a)(1)(A)(iii). On paper, Gire had no relationship to Grayson as a corporate entity. He was not a stockholder, officer, or an employee. He managed the roofing (Grayson’s sole business), as he had under the Gire Roofing name for more than 20 years. The corporate papers identified Grayson’s president and sole stockholder as Young, Gire’s girlfriend. Gire, his attorney, and the government all represented to the district court that Gire was Grayson’s president. The court permitted Gire to plead guilty on his and Grayson’s behalf. Joint counsel represented both defendants during a trial that resulted in their convictions and a finding that Grayson’s headquarters was forfeitable. Despite obtaining separate counsel before sentencing, neither Grayson nor Young ever complained about Gire’s or prior counsel’s representations. Neither did Grayson object to the indictment, the plea colloquy, or the finding that Grayson had used its headquarters for harboring unauthorized aliens.The Seventh Circuit affirmed. Although Grayson identified numerous potential errors in the proceedings none are cause for reversal. Grayson has not shown that it was deprived of any right to effective assistance of counsel that it may have had and has not demonstrated that the court plainly erred in accepting the guilty plea. The evidence is sufficient to hold Grayson vicariously liable for Gire’s crimes. View "United States v. Grayson Enterprises, Inc." on Justia Law

Bentley, the owner of Trucking, rear-ended the Kolchinskys’ car while driving a tractor-trailer through Illinois. The Kolchinskys were severely injured. Bentley's deliveries had been arranged by WD, which instructed Bentley to transport milk from Indiana to its destination. His route was up to him. Trucking’s agreement with WD provided that Bentley was an independent contractor. When Trucking accepted a job from WD, it agreed to call the broker daily with a status update, protect the freight, notify the broker of any damage, and inform the broker of delivery. Tucking was responsible for determining delivery times; WD reserved the right to withhold any resulting damages. The agreement required Trucking to pay its employees and provide and maintain its own tractor, fuel, insurance, licenses, and permits. The Kolchinskys sued Bentley; citing theories of respondeat superior and vicarious liability, the Kolchinskys also sued Trucking and WDThe judge granted the defendants judgment, concluding that the driver was an independent contractor so the Kolchinskys could not hold the companies responsible for his alleged negligence. The Seventh Circuit affirmed. Courts applying Illinois law consistently have declined to find an agency relationship when a company hires an independent driver to deliver a load to designated persons at designated hours but does not reserve the right to control the manner of delivery. WD had no part in the transaction leading to Bentley’s fateful trip View "Kolchinsky v. Western Dairy Transport, LLC" on Justia Law

T-Mobile customers can participate in “T-Mobile Tuesdays,” a promotional service, offering free items and discounts. Customers who no longer wish to receive marketing communications may opt-out by contacting T-Mobile’s customer service. T-Mobile user Warciak received a text message: This T-Mobile Tuesday, score a free 6” Oven Roasted Chicken sub at SUBWAY, just for being w/ T-Mobile. Ltd supply. Get app for details. The message came from T-Mobile. Warciak was not charged for the text. Warciak sued Subway claiming Subway engaged in a common-law agency relationship with T-Mobile, and that Subway’s conduct violated the Telephone Consumer Protection Act (TCPA). T-Mobile is not included in the lawsuit. The court dismissed the complaint as lacking sufficient support for claims of actual and apparent authority: control over the timing, content, or recipients of the text message. The court also found that the wireless carrier exemption applied so that no underlying TCPA violation exists ( 47 U.S.C. 227(b)(2)(C)). Prior written consent is not required for calls to a wireless customer by his wireless carrier if the customer is not charged. The Seventh Circuit affirmed. The only alleged conduct by Subway is its contractual relationship with T-Mobile. Warciak’s complaint lacks sufficient facts showing Subway manifested to the public that T-Mobile was its agent. He relied on T-Mobile’s conduct. Statements by an agent are insufficient to create apparent authority without also tracing the statements to a principal’s manifestations or control. View "Warciak v. Subway Restaurants, Inc." on Justia Law

A New York owner of a fast-food property in Illinois, which was rented by an Arizona tenant, sold the property to buyers in California (Abellan). The tenant declared bankruptcy and never paid rent to its new landlord. Abellan sued. A jury found the purchase agreement rescindable for mutual mistake and the sellers liable for fraud and breach of contract and awarded damages of more than $2 million. The Seventh Circuit affirmed. The sellers warranted to Abellan that there was “no default by Seller, or to Seller’s knowledge ... under the Lease.” A critical provision of the lease required the tenant to operate its restaurant business continuously. the jury had sufficient evidence to find a breach of the no-default warranty “to Seller’s knowledge” and Abellan reasonably relied on the no-default warranty. The court rejected claims of waiver and that the jury’s findings on damages and reliance were contrary to the weight of the evidence. View "Abellan v. Lavelo Property Management, LLC" on Justia Law

Yama Seiki, a California manufacturer of machine tools, sent PMT, a Wisconsin corporation, an exclusive letter of dealership, requiring sales of $1,000,000 or 15 machines in a year and stocking one machine on PMT’s showroom floor. PMT rejected the letter, believing it could not reach the sales requirements. Weeks later, PMT offered to take stock of two machines in exchange for an exclusive-dealer agreement. PMT responded with an application for dealership status and a proposal to negotiate further. Wang, a Yama Seiki manager with whom PMT had negotiated, did not address the offer but responded that he was “not sure if you are aware that you are in ‘exclusive’ status.” PMT never took stock of any machines, but it facilitated sales by soliciting customers, negotiating prices, and connecting customers with Yama Seiki,j who paid Yama Seiki under its usual sales terms. PMT was responsible for installation and warranty work. In 2015-2018, PMT derived 74% of its profits from Yama Seiki sales. More than a year after Wang's “exclusive status” statement, PMT discovered that others were selling Yama Seiki machines in Wisconsin. PMT sued, alleging violations of Wisconsin’s Fair Dealership Law. The Seventh Circuit affirmed summary judgment for Yama Seiki. PMT failed to show that it had any dealership agreement with Yama Seiki, much less an exclusive one. PMT never stocked any of its products, collected money for sales, or made more than de minimis use of Yama Seiki’s logos. View "PMT Machinery Sales, Inc. v. Yama Seiki USA, Inc." on Justia Law

For nearly 30 years, Chicago Studio operated the only film studio in Chicago. In 2010, Cinespace opened a new studio. Cinespace rapidly expanded its studio to include 26 more stages and 24 times more floor space than Chicago Studio’s facility. Chicago Studio subsequently failed to attract business and stopped making a profit. Chicago Studio sued the Illinois Department of Commerce and Economic Opportunity, Illinois Film Office, and Steinberg (state actors responsible for promoting the Illinois film industry), alleging that the Defendants unlawfully steered state incentives and business to Cinespace in violation of the Sherman Act and equal protection and due process protections. The Seventh Circuit affirmed the rejection of those claims. The Sherman Act claim was properly dismissed because Chicago Studio failed to adequately plead an antitrust injury but merely alleged injuries to Chicago Studio, not to competition. The complaint does not plausibly allege that Defendants conspired to monopolize or attempted to monopolize the Chicago market for operating film studios. The district court properly granted summary judgment on the equal protection claim. Chicago Studio and Cinespace are not similarly situated, and there was a rational basis for Steinberg’s conduct. Cinespace consistently reached out to Steinberg for marketing support; Chicago Studio rarely did and it was rational for Steinberg to promote the studios based on production needs. View "Chicago Studio Rental, Inc. v. Illinois Department of Commerce & Economic Opportunity" on Justia Law

For the 100th Indianapolis 500 race in 2016, organizers engaged Karma, an event-planning company, to host a ticketed party. The party was a disappointment. Poor ticket sales prevented Karma from covering its expenses. Karma sued the racetrack for breach of contract, accusing it of failing to adequately promote the party. Karma sought $817,500 in damages, a figure apparently gleaned from conversations with Speedway officials who speculated that the party would generate $1 million in gross revenue “from ticket and table sales only.” The Speedway filed a counterclaim alleging that Karma failed to place the promised banner advertisement on Maxim’s website or provide marketing support on Maxim’s social-media channels. Karma is a licensee of Maxim’s, a men’s magazine. The district judge rejected Karma’s claim at summary judgment, ruling that the damages theory rested on speculation. A jury found Karma liable on the counterclaim, awarding $75,000 in damages. The Seventh Circuit affirmed. Karma’s evidence of damages was speculative, so its claim failed under Indiana law. The jury could award objectively foreseeable damages; it didn’t need to hear testimony on the subjective expectations of Speedway officials before awarding damages. View "Karma International, LLC v. Indianapolis Motor Speedway, LLC" on Justia Law

The debtor obtained a commercial loan from Bank. The agreement dated March 9, 2015, granted Bank a security interest in substantially all of the debtor’s assets, described in 26 categories of collateral, such as accounts, cash, equipment, instruments, goods, inventory, and all proceeds of any assets. Bank filed a financing statement with the Illinois Secretary of State, to cover “[a]ll Collateral described in First Amended and Restated Security Agreement dated March 9, 2015.” Two years later, the debtor defaulted and filed a voluntary Chapter 7 bankruptcy petition. Bank sought to recover $7.6 million on the loan and filed a declaration that its security interest was properly perfected and senior to the interests of all other claimants. The trustee countered that the security interest was not properly perfected because its financing statement did not independently describe the underlying collateral, but instead incorporated the list of assets by reference, and cited 11 U.S.C. 544(a), which empowers a trustee to avoid interests in the debtor’s property that are unperfected as of the petition date. The bankruptcy court ruled that ”[a] financing statement that fails to contain any description of collateral fails to give the particularized kind of notice” required by UCC Article 9. The trustee sold the assets for $1.9 million and holds the proceeds pending resolution of this dispute. The Seventh Circuit reversed, citing the plain and ordinary meaning of the Illinois UCC statute, and how courts typically treat financing statements. View "First Midwest Bank v. Reinbold" on Justia Law

The Mathews purchased an RV from a dealer which came with a warranty from the manufacturer, REV, which limited both express and implied warranties to one year from the purchase date. The warranty stated that “[i]f the repair or replacement remedy fails to successfully cure a defect after [REV] received a reasonable opportunity to cure the defect[], your sole and exclusive remedy shall be limited to Warrantor paying you the costs of having an independent third party perform repair(s).” The Mathews were told about the warranty when they bought the RV, but they were not initially given a hard copy. The Mathews say that they encountered problems with the RV almost immediately and several times thereafter. Dealerships completed some repairs; REV completed others and issued an extended goodwill warranty. The Mathews did not report all of the problems but eventually asked REV to buy back the RV. REV declined and they filed suit, alleging breaches of express and implied warranties and violations of the Indiana Deceptive Consumer Sales Act and the Magnuson–Moss Warranty Act. They claimed that REV had failed to fix numerous problems,15 U.S.C. 2310(d)(1). The Seventh Circuit affirmed summary judgment in favor of REV. Although the Mathews “bought a lemon,” they have not shown that REV failed to honor its warranties or that the warranty provisions were unconscionable, View "Mathews v. REV Recreation Group, Inc." on Justia Law

In 2005 Paramount leased a parcel of highway-adjacent property in Bellwood, Illinois, planning to erect a billboard. Paramount never applied for a local permit. When Bellwood enacted a ban on new billboard permits in 2009, Paramount lost the opportunity to build its sign. Paramount later sought to take advantage of an exception to the ban for village-owned property, offering to lease a different parcel of highway-adjacent property directly from Bellwood. Bellwood accepted an offer from Image, one of Paramount’s competitors. Paramount sued Bellwood and Image, alleging First Amendment, equal-protection, due-process, Sherman Act, and state-law violations. The Seventh Circuit affirmed summary judgment in favor of the defendants. Paramount lost its lease while the suit was pending, which mooted its claim for injunctive relief from the sign ban. The claim for damages was time-barred, except for an alleged equal-protection violation. That claim failed because Paramount was not similarly situated to Image; Paramount offered Bellwood $1,140,000 in increasing installments over 40 years while Image offered a lump sum of $800,000. Bellwood and Image are immune from Paramount’s antitrust claims. The court did not consider whether a market-participant exception to that immunity exists because Paramount failed to support its antitrust claims. View "Paramount Media Group, Inc. v. Village of Bellwood" on Justia Law