Articles Posted in Civil Procedure

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Edwards owns a taxicab in Milwaukee and gets referrals from Yellow Cab. Edwards leased the cab to Giri, who subleased some of the time to Chapman so that the cab could be in service much of the day. Chapman received fares and tips, paid rent to Giri, and kept the difference; he did not pay or receive anything from Yellow Cab. Chapman argued, in his suit under the Fair Labor Standards Act that he was a Yellow Cab “employee” and that, after he complained about not receiving the minimum wage, Mohamed, Yellow Cab's President, told Giri that Chapman was “fired” (would not be dispatched to passengers calling Yellow Cab). Giri then terminated the sublease. Chapman argued that Mohamed’s action violated the Act’s anti-retaliation clause, 29 U.S.C. 215(a)(3). His suit was dismissed with prejudice. The judge stated that Chapman had not addressed all of the relevant factors. The Seventh Circuit affirmed. While federal court plaintiffs need not plead all legal elements plus facts corresponding to each, Chapman’s claim was implausible because it did not allege any direct dealings between himself and Yellow Cab. When the court requested more, Chapman did not respond with a plausible claim. He failed to provide additional details, insisting that, because Yellow Cab affected his driving through the chain of leases, it must be his employer. View "Chapman v. Yellow Cab Cooperative" on Justia Law

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In 2007, a Palatine police officer issued Collins a parking ticket, placing the bright yellow ticket under his car’s wiper blades. The ticket listed his name, address, driver’s license number, date of birth, sex, height, and weight. Collins claims that the display of his personal information violated the Driver’s Privacy Protection Act (DPPA), 18 U.S.C. 2721. In 2016, he sued the village on behalf of himself and a proposed class. The DPPA’s statute of limitations is four years but a purported class action filed in 2010 (Senne’s case) tolled the statute for everyone in the proposed class. In 2010, before Senne filed a class certification motion, the district court dismissed for failure to state a claim. The Seventh Circuit reversed. The district judge again entered summary judgment and “terminated” a motion for class certification as moot. The Seventh Circuit affirmed. In November 2015, the Supreme Court denied certiorari; on the same day, Senne’s attorney, Murphy, filed a successor class action on behalf of himself and a proposed class as a placeholder. Murphy later filed this suit naming Collins as the class representative. The district court held that Collins’s claim was time-barred and denied the motion for class certification. The Seventh Circuit affirmed. Dismissal with prejudice strips a case of its class-action character. Tolling stops immediately when a class-action suit is dismissed—with or without prejudice—before the class is certified. View "Collins v. Village of Palatine" on Justia Law

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To track accounting, payroll, inventory, sales, parts, service, finance, and insurance, auto dealerships use computerized dealer‐management systems. Some systems use open architecture, under which third parties have some access to dealer‐originated data in the system. Others use closed architecture, under which that type of data scraping is forbidden under the license. One provider, CDK, decided to change from an open system to a closed system. CDK and another provider, Reynolds, entered into agreements to ease the transition, which allowed their subsidiaries (Authenticom’s competitors) continued access to the data. Authenticom, in the business of collecting data from dealer‐management systems and selling or using it for applications, sued under the Sherman Act, 15 U.S.C. 1. Because Authenticom’s loss of access to the data was imperiling its survival, it obtained preliminary injunctions. CDK and Reynolds took an interlocutory appeal. The Seventh Circuit vacated the injunctions, which did not focus on the agreements that are the focus of Authenticom’s lawsuit. Instead, they address the measures that the court believed necessary to “extend a lifeline to Authenticom, to maintain its viability until this case is finally decided on the merits.” The court ordered the defendants to enter into a new arrangement with Authenticom, rather than simply barring implementations of the challenged agreement. View "Authenticom, Inc. v. Reynolds and Reynolds Co." on Justia Law

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Fadden earned over $100,000 per year but did not submit tax returns. After an audit, the IRS garnished his wages. Fadden filed for bankruptcy, triggering an automatic stay. Fadden claimed that he had no interest in any real property nor in any decedent’s life insurance policy or estate. Fadden actually knew that he would receive proceeds from the sale of his mother’s home (listed by the executor of her estate for $525,000) and would receive thousands of dollars as a beneficiary on his mother’s life insurance policies. A week later, Fadden mentioned his inheritance to a paralegal in the trustee’s office and asked to postpone his bankruptcy. When Fadden finally met with his bankruptcy trustee and an attorney, he confirmed that his schedules were accurate and denied receiving an inheritance. The Seventh Circuit affirmed his convictions under 18 U.S.C. 152(1) for concealing assets in bankruptcy; 18 U.S.C. 152(3) for making false declarations on his bankruptcy documents; and 18 U.S.C. 1001(a)(2) for making false statements during the investigation of his bankruptcy. Counts 1 and 2 required proof of intent to deceive. Fadden proposed a theory-of-defense instruction based on his assertion that his conduct was “sloppiness.” The Seventh Circuit upheld the use of pattern instructions, including that “knowingly means that the defendant realized what he was doing and was aware of the nature of his conduct and did not act through ignorance, mistake or accident.” View "United States v. Fadden" on Justia Law

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DT&C, a Chicago ground transportation company, and its owners were sued by former employees and the Secretary of Labor for violating state wage‐payment laws and the Fair Labor Standards Act, 29 U.S.C. 201. After the defendants ignored court orders, the district judges entered default judgments for the plaintiffs. Eleven months later, the defendants moved to vacate both judgments, FRCP 60(b), arguing that the company had closed in 2015 and no longer received mail at the office address and that one of the owners was in poor health so that he did not keep in contact with the lawyer. The Sixth Circuit affirmed the denial of the motions. Because the defendants did not show good cause for the default, did not act quickly in filing motions to vacate, and failed to articulate any meritorious defenses, the district judges did not abuse their discretion. The default was the result of “inattention to the litigation” rather than illness, and the defendants had not shown that they had a legitimate defense. View "Krantz v. DT & C Global Management LLC" on Justia Law

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In 2011, Cosenza sought disability benefits on behalf of her minor son. An ALJ determined that J.M.F. was not disabled. The Appeals Council denied her request for review. Cosenza argued that the ALJ improperly found that her son’s autism and Asperger’s syndrome were not “medically determinable” impairments. The district judge granted Cosenza summary judgment and remanded under 42 U.S.C. 405(g); 5), terminating the case in the district court. On remand, another ALJ conducted a hearing in March 2016. In June Cosenza filed a motion in the closed federal case to hold the Commissioner in contempt “for not following court-ordered remand.” In July the ALJ ruled against Cosenza. Cosenza did not wait for the decision to become final but moved for summary judgment in the closed federal case and filed a letter with the Appeals Council requesting review. The district court granted the agency’s motion to strike, reasoning that it had relinquished jurisdiction over Cosenza’s first case; as to most recent decision, the administrative appeals process had not finished so no final decision existed for judicial review. Cosenza had not shown that the Commissioner violated the court’s remand order. The Seventh Circuit affirmed. A district court lacks jurisdiction under the Social Security Act to review an ALJ’s unfavorable decision until the agency’s decision is final; the Appeals Council has not yet decided whether to review the ALJ’s decision. View "Cosenza v. Berryhill" on Justia Law

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Cortina, a now-dissolved corporation, was wholly-owned by the Trust. The Trust’s beneficiaries lived in Illinois when the Trust was established; in the 1980s, they relocated to Arizona. In 2011, the Trust became an Arizona trust. Brook, an Illinois resident, was the president of Cortina and the Trust's trustee. In 2001, Brook retained an Arizona firm to represent Cortina in a lawsuit concerning a ground lease created when Cortina sold land in Arizona. The suit was dismissed in 2002. In 2005, and in 2013, Cortina sought additional legal advice from the firm related to the same lease. In 2014, Cortina requested that the firm initiate a nonjudicial foreclosure on the property. The firm decided that involvement in the foreclosure would pose a conflict of interest and declined the case. Throughout the firm’s 13 years representing Cortina, the parties exchanged phone calls and correspondence between Arizona and Illinois, but all in-person meetings occurred in Arizona. Cortina sued the firm in Illinois alleging legal malpractice, breach of contract, and breach of fiduciary duty. After the district court requested a jurisdictional statement, Cortina substituted Brook as the plaintiff. The Seventh Circuit affirmed dismissal for lack of personal jurisdiction. While the defendants entered into a business relationship with an Illinois plaintiff, the activities were strictly conducted in Arizona. There was no evidence that Defendants reached out to or solicited Cortina, the Trust, or Brook. View "Brook v. McCormley" on Justia Law

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Bernstein, an attorney appointed under the Criminal Justice Act, 18 U.S.C. 3006A, to represent an indigent defendant in federal district court, hired forensic expert Speckin to analyze evidence for the defense. Bernstein disregarded the Act’s rules and failed to obtain the court’s preapproval; he submitted a voucher for the expert’s services six months after his client was sentenced, requesting $15142.90, about six times the statutory cap. The judge would not approve it. Speckin sued Bernstein in a Michigan state court, which entered a default judgment against Bernstein. Bernstein then unsuccessfully asked the federal district judge to vacate the state-court judgment or enjoin its enforcement. The Seventh Circuit vacated and remanded with instructions to dismiss for lack of subject-matter jurisdiction. No statute authorized the district court to review the Michigan judgment. Bernstein hired Speckin outside the bounds of the CJA, so their dispute is one of private contract and governed by state law. The Anti-Injunction Act prohibits federal courts from granting an “injunction to stay proceedings in a State court except as expressly authorized by Act of Congress, or where necessary in aid of its jurisdiction, or to protect or effectuate its judgments,” 28 U.S.C. 2283. Nothing in the CJA comes close to authorizing an injunction of state-court proceedings. View "United States v. Alkaramla" on Justia Law

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In 1998, Dr. Wilson’s terminally ill patient was within hours of death. He was in pain and suffocating. Wilson concluded that the only possible palliation was unconsciousness. As Wilson was injecting a drug, the patient’s heart stopped. The coroner classified the death as murder. The Illinois Department of Financial and Professional Regulation summarily suspended Wilson’s medical license. The Department held a hearing in 2000. The coroner’s finding of homicide had been withdrawn; Wilson was not charged. His license was nonetheless suspended for five years. He sued in state and federal courts. Rather than staying proceedings, the federal court dismissed. Four times a state judge vacated the suspension. The Department reinstated its decision three times. Without a new hearing or explanation, the Department entered a new five-year suspension in 2007, and another in 2013. In 2014, the state court held that Wilson should not have been suspended for even one day. The Department did not reinstate Wilson’s license because he had not practiced during the last 17 years. In 2014 Wilson sought damages under 42 U.S.C. 1983. The district court held that the two-year statute of limitations had been running since 1998. The Seventh Circuit vacated. A federal challenge to a state administrative agency decision is not subject to an exhaustion-of-remedies rule but a claim never accrues until the plaintiff “has a complete and present cause of action”. The court noted the district court’s 1999 holding that Wilson could not litigate in federal court while state proceedings were ongoing; his section 1983 claim for damages did not accrue until 2014. View "Wilson v. Illinois Department of Financial and Professional Regulation" on Justia Law

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The Republican Party sued the Cook County Board of Election Commissioners, arguing that the Board must include on the ballot a candidate that the Party slated for the House of Representatives in the November 2016 election. The Board had never announced a plan to exclude the candidate. The district court entered an injunction compelling the Board to keep this candidate on the ballot. The Seventh Circuit remanded with instructions to dismiss for lack of subject matter jurisdiction. The Party’s dispute with two additional defendants, elected as ward committeemen, based on the Party’s refusal to seat them, is not a federal claim. The Party’s “anticipatory federal contention,” that ”if state law does not respect the Party’s eligibility rules, then Illinois violates the First Amendment,” was only a potential response to a potential contention by the committeemen that all elected ward committeemen must be seated on the Party’s central committee. The district judge did not consider the fact that public officials were not contesting the Party’s claims or the possibility that he was issuing an advisory opinion. If the committeemen had sued the Party, demanding membership on its central committee, their claim would have arisen under Illinois law. View "Cook County Republican Party v. Sapone" on Justia Law