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

LJM Partners, Ltd. and Two Roads Shared Trust, both involved in options trading on the Chicago Mercantile Exchange, experienced catastrophic losses on February 5 and 6, 2018, when volatility in the S&P 500 surged unexpectedly; LJM lost approximately 86.5% of its managed assets and the Preservation Fund (managed by Two Roads) lost around 80%. The plaintiffs alleged that eight defendant firms, acting as market makers, manipulated the VIX index by submitting inflated bid-ask quotes for certain SPX Options, which artificially raised volatility and resulted in inflated prices on the plaintiffs' trades, causing over one billion dollars in combined losses.After initially filing complaints against unnamed "John Doe" defendants in the United States District Court for the Northern District of Illinois, the plaintiffs pursued extensive discovery to identify the responsible parties. The cases were swept into a multidistrict litigation proceeding (VIX MDL), which delayed discovery. Eventually, after several rounds of amended complaints, the plaintiffs identified and named eight defendant firms. The defendants moved to dismiss. The district court found that LJM lacked Article III standing because it failed to allege an injury in fact, as the losses belonged to its clients, not LJM itself. For Two Roads, the district court held that its claims were time-barred under the Commodity Exchange Act’s two-year statute of limitations, and equitable tolling was denied due to lack of diligence.The United States Court of Appeals for the Seventh Circuit affirmed the district court’s judgment. It held that LJM’s complaint failed to establish Article III standing, as it did not allege that LJM itself—not just its clients—suffered actual losses. The court further held that Two Roads’s complaint was untimely and that the district court did not abuse its discretion in refusing equitable tolling. Both dismissals were affirmed. View "LJM Partners, Ltd. v. Barclays Capital, Inc." on Justia Law

Indiana amended its laws in 2022 to prohibit and criminalize the use of telehealth and telemedicine for abortions, requiring that abortion-inducing drugs be dispensed and consumed in person by a physician in a hospital or qualified surgical center. The Satanic Temple, a Massachusetts-based religious nonprofit, operates a telehealth abortion clinic serving only patients in New Mexico but seeks to extend these services to its Indiana members. It does not run, nor intends to operate, an in-person abortion clinic in Indiana or maintain ties to Indiana hospitals or surgical centers. The Temple filed suit against the Indiana Attorney General and Marion County Prosecutor, seeking to enjoin enforcement of the criminal statute (§ 16-34-2-7(a)) and to obtain declaratory relief under Indiana’s Religious Freedom Restoration Act.The United States District Court for the Southern District of Indiana reviewed the case and granted the defendants’ motion to dismiss for lack of standing. The court found that the Satanic Temple failed to identify any specific member who suffered an injury from the challenged law, thus lacking associational standing. It also held that the Temple itself lacked standing, as it could not show an injury in fact and could not demonstrate that favorable relief would redress its alleged harms due to other Indiana laws independently barring its intended conduct.On appeal, the United States Court of Appeals for the Seventh Circuit affirmed the district court’s dismissal. The Seventh Circuit held that the Satanic Temple lacked both associational and individual standing. The Temple failed to identify a specific injured member and relied only on statistical probabilities and generalized claims of stigmatic injury, which were insufficient. Additionally, the Temple did not present concrete plans to violate the law, and even if § 16-34-2-7(a) were enjoined, other statutes would independently prevent its telehealth abortion services in Indiana. Thus, the Seventh Circuit affirmed the dismissal for lack of subject matter jurisdiction. View "Satanic Temple, Inc. v Rokita" on Justia Law

Plaintiffs filed a class action against the Department of Homeland Security and Immigration and Customs Enforcement, alleging that the agencies were arresting noncitizens without a warrant in violation of 8 U.S.C. § 1357(a)(2). After years of litigation, the parties entered into a Consent Decree in 2021, approved by the United States District Court for the Northern District of Illinois in 2022. The Decree required the agencies to issue a policy statement, train officers, and document compliance with § 1357(a)(2). It also outlined procedures for enforcement and modification if violations were alleged.Prior to the Decree’s scheduled expiration in May 2025, Plaintiffs moved to enforce its terms and to extend its duration, asserting substantial noncompliance by Defendants. While these motions were pending, a DHS official declared the Decree terminated. On October 7, 2025, the district court found Defendants had violated the Decree, extended its term by 118 days, and ordered compliance-related relief. Later, Plaintiffs sought release or alternative detention for hundreds of individuals allegedly arrested in violation of the Decree. On November 13, 2025, the district court ordered the release of 13 individuals whom both parties agreed were arrested unlawfully, and additionally ordered release or alternatives for approximately 442 “potential class members,” pending determinations of violation.The United States Court of Appeals for the Seventh Circuit reviewed Defendants’ emergency motion to stay the district court’s October 7 and November 13 orders. The Seventh Circuit denied the request to stay the extension of the Consent Decree, holding that Defendants were unlikely to succeed on the merits of their argument that the extension violated 8 U.S.C. § 1252(f)(1). However, the court granted the stay as to the November 13 release order for those arrested pursuant to I-200 warrants and for “potential class members” pending individualized determinations under the Decree. The ruling sets forth the standards for stays and clarifies the limitations of § 1252(f)(1) in the context of class-wide injunctive relief and consent decree enforcement. View "Castanon Nava v. Department of Homeland Security" on Justia Law

Jerome and Shaun Cohen operated a Ponzi scheme through their companies, EquityBuild, Inc. and EquityBuild Finance, LLC, from 2010 to 2018. They solicited funds from individual investors and institutional lenders, promising high returns secured by real estate, primarily in Chicago. In reality, the Cohens used new investors’ funds to pay earlier investors and overvalued properties to retain excess capital. By 2018, the scheme collapsed, leaving over $75 million in unpaid obligations. The Securities and Exchange Commission intervened, obtaining a temporary restraining order and having a receiver appointed to liquidate assets and distribute proceeds to victims.The United States District Court for the Northern District of Illinois oversaw the receivership and determined how proceeds from the sale of two properties—7749 South Yates and 5450 South Indiana—should be distributed. Both a group of individual investors and Shatar Capital Partners claimed priority to the proceeds, with Shatar arguing its mortgages were recorded before those of the individual investors. The district court found that Shatar was on inquiry notice of the individual investors’ preexisting interests and thus not entitled to priority, limiting all claimants’ recoveries to their contributed principal, minus any amounts previously received.On appeal, the United States Court of Appeals for the Seventh Circuit reviewed the district court’s distribution order. The appellate court affirmed, holding that under Illinois law, Shatar was on inquiry notice of the individual investors’ interests in both properties at the time it invested, given multiple red flags about the properties’ financing and EquityBuild’s business model. As a result, the individual investors were entitled to priority in the distribution of proceeds. The court also found Shatar’s challenge to the distribution plan moot, as there were insufficient funds to benefit Shatar after satisfying the investors’ claims. View "Securities and Exchange Commission v. Duff" on Justia Law

Four property-specific limited liability companies owned real estate in Wisconsin, which was leased to skilled nursing facilities operated by Kevin Breslin through his company, KBWB Operations, LLC. Breslin and his co-guarantors executed personal guaranties ensuring payment and performance under the leases. The nursing facility tenants defaulted on their rent obligations starting in 2018 and subsequently lost their operating licenses after a court-appointed receiver moved residents out. The tenants also failed to complete a purchase option for the properties, triggering a liquidated damages clause. Plaintiffs later sold the properties at a loss.The plaintiffs sued Breslin, his company, and co-guarantors in the United States District Court for the Northern District of Illinois to enforce the guaranties and recover damages. During the litigation, plaintiffs discovered that one co-guarantor was a California citizen, which destroyed complete diversity and thus federal jurisdiction. Plaintiffs moved to dismiss this non-diverse defendant, arguing he was not indispensable because the guaranties provided for joint and several liability. The district court agreed and dismissed him. Breslin did not oppose the dismissal. Plaintiffs then moved for summary judgment; Breslin, facing criminal charges, invoked the Fifth Amendment and presented no evidence on liability or damages. The district court granted summary judgment to plaintiffs and awarded nearly $22 million in damages across several categories.On appeal, the United States Court of Appeals for the Seventh Circuit held that jurisdiction was proper because the dismissed co-guarantor was not an indispensable party under Rule 19, given joint and several liability. The court affirmed the district court’s findings on most damages but vacated the awards for accelerated rent under one lease (pending further consideration of its enforceability as a liquidated damages clause) and for liquidated damages related to the purchase option (finding it unenforceable as a penalty). The case was remanded for recalculation of damages consistent with these holdings. In all other respects, the judgment was affirmed. View "CCP Golden/7470 LLC v. Breslin" on Justia Law

The case concerns three heirs of Paul von Mendelssohn-Bartholdy, a Jewish German art collector persecuted by the Nazi regime, who seek to recover Vincent van Gogh’s painting “Sunflowers.” Mendelssohn-Bartholdy was forced to liquidate his art collection in the 1930s due to Nazi policies. The painting was sold through a Parisian dealer, later purchased at auction in London in 1987 by Yasuda Fire and Marine Insurance Company, which subsequently became Sompo Japan Insurance. The painting was exhibited briefly in Chicago and Amsterdam in 2001–2002 before returning to Japan, where it remains on display.The plaintiffs filed suit in the United States District Court for the Northern District of Illinois against Sompo Holdings and its affiliates, seeking the painting’s return or compensation, alleging various state and federal claims. The district court found it lacked subject matter jurisdiction over the federal claims because the Holocaust Expropriated Art Recovery Act (HEAR Act) does not create a federal cause of action, and the plaintiffs had not shown a conflict between state law and federal policy to justify federal common law claims. For the state law claims, the district court held (following a Pennsylvania district court’s reasoning in Holtzman) that the HEAR Act’s extension of limitations periods could confer federal question jurisdiction, but ultimately dismissed these claims for lack of personal jurisdiction over the defendants, finding insufficient connection to Illinois.On appeal, the United States Court of Appeals for the Seventh Circuit affirmed. The court held that the federal claims failed for lack of a federal cause of action or basis for federal common law. As for the state law claims, the Seventh Circuit declined to address subject matter jurisdiction and instead affirmed the dismissal for lack of personal jurisdiction, concluding the defendants’ contacts with Illinois were unrelated to the plaintiffs’ claims. The court also found no abuse of discretion in denying leave to file a further amended complaint. View "Schoeps v. Sompo Holdings, Inc." on Justia Law

An inmate at a Wisconsin correctional institution was attacked by another prisoner, resulting in serious injury. The inmate alleged that prison officials were aware of the risk of such an attack but failed to take preventive action. After the incident, medical staff did not arrange for the inmate to see a specialist within the recommended timeframe. The inmate claimed to have filed a formal complaint about both the lack of protection and inadequate medical care by placing a completed complaint form in his cell door for collection on January 2, 2017. He did not receive an acknowledgment of receipt and, after inquiring with a complaint examiner a month later, was told no complaint had been received. He then filed a new complaint, referencing his earlier attempt and supporting it with a journal entry and correspondence to other inmates.The United States District Court for the Western District of Wisconsin granted summary judgment to the defendants, concluding that the inmate failed to exhaust administrative remedies as required by the Prison Litigation Reform Act. The court relied on the Seventh Circuit’s decision in Lockett v. Bonson, finding that the inmate’s evidence was insufficient to show timely filing and that he should have followed up sooner when he did not receive an acknowledgment.The United States Court of Appeals for the Seventh Circuit reviewed the case de novo. The appellate court found that, unlike in Lockett, the inmate provided more than a mere assertion of timely filing, including a sworn declaration, a journal entry, and references in subsequent complaints. The court held that this evidence created a genuine dispute of material fact regarding whether a timely complaint was filed. The Seventh Circuit vacated the district court’s judgment and remanded the case for further proceedings, instructing the lower court to determine whether the exhaustion issue is intertwined with the merits, which could entitle the parties to a jury trial under Perttu v. Richards. View "Breyley v. Fuchs" on Justia Law

Several pilots were terminated by United Airlines after the company implemented a COVID-19 vaccine mandate. These pilots, represented by their union, the Air Line Pilots Association (ALPA), believed that the union did not do enough to oppose United’s vaccination policies. The pilots had previously filed grievances challenging the mandate, arguing that United’s actions violated the status quo required under the Railway Labor Act because the collective bargaining agreement had expired. ALPA did not support these grievances or file its own, but did file a separate grievance arguing that termination for being unvaccinated was not justified. The pilots’ termination grievances remain pending at their request.After their terminations, the pilots sued ALPA in the United States District Court for the Northern District of Illinois, Eastern Division, alleging that the union breached its duty of fair representation by failing to adequately oppose United’s vaccine mandate. ALPA moved to dismiss the complaint, arguing that the claim was unripe and failed to state a claim. The district court denied the motion to dismiss for lack of ripeness but granted the motion to dismiss for failure to state a claim. The court also denied the pilots’ request to file an amended complaint, finding that amendment would be futile.On appeal, the United States Court of Appeals for the Seventh Circuit reviewed the district court’s decisions de novo. The Seventh Circuit held that the case was ripe because the pilots’ alleged harm—termination—had already occurred. However, the court affirmed the dismissal, holding that the pilots failed to plausibly allege that ALPA’s actions were arbitrary, discriminatory, or in bad faith, as required to state a claim for breach of the duty of fair representation. The court also affirmed the denial of leave to amend, finding that the proposed amended complaint would not cure the deficiencies. The judgment of the district court was affirmed. View "Wickstrom v Air Line Pilots Association, International" on Justia Law

Dr. Padma Rao brought a defamation suit against JP Morgan Chase Bank and its employee, Keifer Krause, after Krause informed the administrator of her late mother’s estate that Rao, acting under a power of attorney, had designated herself as the payable on death (POD) beneficiary of her mother’s accounts. This statement led the estate administrator to accuse Rao of fraud and breach of fiduciary duty in probate court. The dispute centered on whether Rao had improperly used her authority to benefit herself, which would be illegal under Illinois law.The case was initially filed in Illinois state court, but Chase removed it to the United States District Court for the Northern District of Illinois before any defendant was served, invoking “snap removal.” The district court dismissed all claims except for defamation per se. On summary judgment, the court ruled in favor of the defendants, finding that Krause’s statements were not defamatory, could be innocently construed, and were protected by qualified privilege. Rao appealed both the dismissal of her consumer fraud claim and the grant of summary judgment on her defamation claim.The United States Court of Appeals for the Seventh Circuit first addressed jurisdiction, dismissing Krause as a party to preserve diversity jurisdiction. The court affirmed the dismissal of Rao’s consumer fraud claim, finding she had not alleged unauthorized disclosure of personal information. However, it reversed the summary judgment on the defamation per se claim against Chase, holding that Krause’s statements could not be innocently construed and that a qualified privilege did not apply, given evidence of possible recklessness. The case was remanded for a jury to determine whether the statements were understood as defamatory. View "Padma Rao v J.P. Morgan Chase Bank, N.A." on Justia Law

The petitioner, who entered the United States without authorization in 2006, lived with his wife and three children, all of whom are U.S. citizens. He was the primary financial provider for the family, earning significantly more than his wife and providing health insurance for the household. The family faced removal proceedings after the petitioner was arrested for driving on a suspended license and leaving the scene of an accident. The petitioner argued that his removal would cause his children exceptional and extremely unusual hardship, citing their emotional distress and the family’s financial dependence on him.An immigration judge found that the petitioner met all statutory requirements for cancellation of removal except for the “exceptional and extremely unusual hardship” standard. The judge determined that, while the family would experience financial and emotional difficulties, these did not rise above what is typically expected in removal cases. The petitioner appealed to the Board of Immigration Appeals, which affirmed the immigration judge’s decision, assuming for the sake of argument that all three children were qualifying relatives.The United States Court of Appeals for the Seventh Circuit reviewed the case, holding that it had jurisdiction to consider legal questions related to the application of the hardship standard. The court applied a deferential standard of review, as suggested by recent Supreme Court precedent, and concluded that the immigration judge’s findings were supported by substantial evidence and were not clearly erroneous. The court held that the petitioner had not demonstrated that his removal would result in hardship substantially beyond what is ordinarily expected in such cases. Accordingly, the Seventh Circuit denied the petition for review. View "Santos Mendoza v. Bondi" on Justia Law