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

OSHA inspector Minett-Jackson attempted to conduct an inspection of AMC, a Chicago fruit and vegetable wholesaler. AMC considered the timing suspicious because AMC was scheduled to go to trial on another OSHA matter days later. AMC denied Minett-Jackson entry. OSHA applied for an ex parte inspection warrant. Minett-Jackson’s warrant application stated that it was “based upon a complaint from one of AMC’s current employees.” who had witnessed a forklift accident. Minett-Jackson stated that, based on her training and experience, she knew that the described situation might constitute violations of the Occupational Safety and Health Act, 29 U.S.C. 651. When Minett-Jackson returned to AMC with a warrant, she was again denied entry. AMC filed an emergency motion to stay the warrant and unseal the application and requested time to file a motion to quash the warrant on the ground that it was not supported by probable cause.The Seventh Circuit dismissed an appeal from the denial of the motion to quash, noting that the district court’s order was not final under 28 U.S.C. 1291. Significant ongoing proceedings in the district court afford the contesting party a full opportunity to object to the warrant in an adversarial context. Motions for contempt and to toll the statute of limitations are pending before the district court. View "Anthony Marano Co. v. Walsh" on Justia Law

In 2016, law enforcement agents, with a search warrant, broke open the doors and windows of Rodriguez’s home, threw a flash-bang grenade into the living room where his one-year-old daughter was sleeping, and searched for illegal drugs. Rodriguez was arrested and convicted in state court. Rodriguez sued 14 defendants under “Bivens” and 42 U.S.C. 1983, claiming they provided false information to the judge who issued the warrant and executed the search in an unreasonable manner. Two defendants were identified by codes that Rodriguez received in his criminal proceeding. The judge dismissed 13 defendants as not properly identified and granted the remaining defendant summary judgment.The Seventh Circuit vacated in part. A plaintiff who uses “placeholders” ordinarily must substitute identified defendants before the statute of limitations expires. A plaintiff may be able to replace or add defendants after the limitations period by using the relation-back doctrine of Fed.R.Civ.P. 15(c)(1)(C), which applies because “the amendment asserts a claim or defense that arose out of the conduct, transaction, or occurrence set out … in the original pleading.” Rule 4(m) requires service of the complaint and summons within 90 days after the complaint’s filing unless the plaintiff shows good cause for the delay. Not until the district court screened the complaint under 28 U.S.C. 1915A was service possible; by then the 90 days, and the statute of limitations, had expired. Delays required by section 1915A constitute “good cause” under Rule 4(m) for belated service, which increases the time for Rule 15(c) relation back. View "Rodriguez v. McCloughen" on Justia Law

Don and Greg were the only shareholders of their family company, XPAC, a closely held corporation. Greg held all the nonvoting shares (99%). Don held the voting shares (1%). Under the terms of Don’s divorce from Greg’s late mother, Don could only transfer his voting shares to Greg. Don sought to increase his monthly salary by $10,000. Greg filed a motion in Illinois state court seeking a constructive trust over Don’s shares and an injunction preventing Don from voting his shares in a way that would adversely affect XPAC, including by increasing his salary. Greg filed his motion in the 2002 state court case involving Don’s divorce from Greg’s mother. Don removed the case to federal court Greg did not object. The parties were diverse, with Don domiciled in Florida and Greg in Iowa, and the amount in controversy exceeds $75,000. The district court remanded the case to the state court because removal came more than a year after the initial divorce lawsuit, 28 U.S.C. 1446(c)(1).Don appealed. In April 2022—in the middle of the Seventh Circuit briefing schedule —Don died. The Seventh Circuit dismissed the case as moot. A constructive trust over Don’s voting shares or an injunction to stop Don from voting his shares in a way that would adversely affect XPAC would be meaningless. View "Ruggles v. Ruggles" on Justia Law

Sheehan emigrated from Ireland decades ago and currently lives in Winfield, Illinois. Sheehan obtained loans from an Irish bank to buy interests in an Irish medical company (Blackrock), and to purchase property located in Ballyheigue, Sheehan defaulted on both loans. Breccia, an Irish entity, acquired the loans and took steps to foreclose on the underlying collateral. Sheehan sued but an Irish court authorized Breccia to enforce its security interest in the Blackrock Shares and the Ballyheigue property. Breccia registered the Blackrock Shares in its name and appointed a receiver, Murran, to take possession of the Ballyheigue property. Sheehan filed a petition for Chapter 11 bankruptcy, triggering an automatic stay, 11 U.S.C. 362 (a)(3). Sheehan notified the Irish receiver, Murran, and Breccia of the automatic stay. Breccia continued, through Murran, to take the necessary steps toward selling the collateral, entering into a contract with IADC (another Irish company) to sell the Blackrock Shares.The bankruptcy court dismissed Sheehan's subsequent adversary complaint for lack of personal jurisdiction over the Irish defendants, as none of them conducted any activity related to the adversary claims in the U.S.; the only link between the defendants and the forum was the fact that Sheehan lived in Illinois. The email notice Sheehan provided the defendants was not sufficient process under the Hague Convention on the Service Abroad. The district court and Seventh Circuit affirmed. None of the defendants had minimum contacts with the United States. View "Sheehan v. Breccia Unlimited Co." on Justia Law

Innovel hired Diakon to take furniture from warehouses to customers’ homes. Plaintiffs, two of Diakon's drivers, were citizens of Illinois who drove out of Innovel’s Illinois warehouses and made deliveries to customers in Illinois, Indiana, and Missouri. They signed “Service Agreements” that classify the drivers as independent contractors yet include detailed expectations for the drivers, covering uniforms, business cards, truck decals, and how to perform deliveries and installations. The Agreements select Virginia law to govern the parties’ relations and authorize Diakon to deduct fees and penalties from the drivers’ pay for truck rental fees, insurance, workers’ compensation coverage, damaged merchandise, and customers’ refused deliveries.Plaintiffs sued, alleging that Diakon misclassified them as independent contractors when they were employees under Illinois law. Illinois courts apply a three-part test to determine employee status, which is more likely to classify workers as employees than is Virginia law, which would treat the plaintiffs as contractors. The Illinois Wage Payment and Collections Act allows deductions from pay only if the employee consents in writing at the time of the deduction.The district judge certified a class but ruled in favor of Diakon. The Seventh Circuit reversed. The plaintiffs’ claims arise from their work in Illinois, not from their contracts. The Illinois Act governs payment for work in Illinois regardless of what state’s law governs other aspects of the parties' relations. View "Timothy Johnson v. Diakon Logistics, Inc." on Justia Law

NBA Properties owns the trademarks of the NBA and NBA teams. In 2020, a Properties investigator accessed HANWJH’s online Amazon store and purchased an item, designating an address in Illinois as the delivery destination. The product was delivered to the Illinois address. Properties sued, alleging trademark infringement and counterfeiting, 15 U.S.C. 1114 and false designation of origin, section 1125(a). Properties obtained a TRO and a temporary asset restraint on HANWJH’s bank account, then moved for default; despite having been served, HANWJH had not answered or otherwise defended the suit. HANWJH moved to dismiss, arguing that the court lacked personal jurisdiction over it because it did not expressly aim any conduct at Illinois. HANWJH maintained that it had never sold any other product to any consumer in Illinois nor had it any “offices, employees,” “real or personal property,” “bank accounts,” or any other commercial dealings with Illinois.The Seventh Circuit affirmed the denial of the motion to dismiss and the entry of judgment in favor of Properties. HANWJH shipped a product to Illinois after it structured its sales activity in such a manner as to invite orders from Illinois and developed the capacity to fill them. HANWJH’s listing of its product on Amazon.com and its sale of the product to counsel are related sufficiently to the harm of likelihood of confusion. Illinois has an interest in protecting its consumers from purchasing fraudulent merchandise. HANWJH alleges no unusual burden in defending the suit in Illinois. View "NBA Properties, Inc. v. HANWJH" on Justia Law

In 2014, Helmstetter filed a state court lawsuit against his former employer, Kingdom. Kingdom filed counterclaims and a separate lawsuit. Helmstetter's 2019 bankruptcy petition automatically stayed the state court litigation. Helmstetter filed schedules of assets and liabilities under penalty of perjury, valuing his total assets at $8.5 million, which included his projected state court recovery at between $5-7.5 million. Helmstetter valued his liabilities at $6.5-$10.5 million. After Helmstetter filed his first amended schedules, bankruptcy trustee Herzog obtained approval of a settlement with Kingdom, which agreed to pay the estate $550,000. Subsequently, Helmstetter filed amended schedules, valuing his total assets at $43 million and his liabilities at $20 million; he included $16 million for the state court litigation. Helmstetter provided no evidence to support the estimates, and his accountants’ report did not explain the methodologies they used.The bankruptcy court approved the settlement agreement over Helmstetter’s objection. Without seeking a stay of the order, Helmstetter appealed. The district court dismissed. Herzog and Kingdom executed the settlement agreement and dismissed the state court litigation. The Seventh Circuit affirmed. Helmstetter failed to show how it is likely, not merely speculative, that his purported injury would be redressed by a favorable decision; he lacks Article III standing to appeal the decision. View "Helmstetter v. Herzog" on Justia Law

After IAC signed an Employment Agreement with Roston making him its CEO, the relationship soured. Roston disagreed with his employer about the value of his stock appreciation rights. He became the CEO of Bluecrew, another affiliate of IAC’s parent company, but the employment relationship deteriorated until Roston was terminated. His former employers later discovered that Roston had retained a company laptop, documents, and confidential data. The companies sought declarations that Roston was not entitled to more payments based on the stock appreciation rights and was not wrongfully terminated and alleged breach of contract.The Seventh Circuit affirmed the dismissal of the complaint by an Illinois district court, citing the forum non conveniens doctrine. The district court balanced the relevant public interest factors reasonably and noted little local Illinois interest. The Employment Agreement stated that it “shall be governed by and construed under and in accordance with the internal laws of the State of California without reference to its principles of conflicts of laws. Any such dispute will be heard and determined before an appropriate federal court located in the State of California in Alameda County … each party hereto submits itself and its property to the non-exclusive jurisdiction of the foregoing courts with respect to such disputes. Roston had filed suit in Alameda County Superior Court, alleging wrongful termination. View "IAC/InterActiveCorp v. Roston" on Justia Law

The Seventh Circuit affirmed the judgment of the district court granting the State's motion to dismiss this action brought by two Illinois counties challenging the 2021 passage of a law prohibiting State agencies and political subdivisions from contracting with the federal government to house immigration detainees, holding that the district court properly dismissed the action for failure to state a claim.In their complaint, Plaintiffs argued that the law at issue was invalid under principles of both both field and conflict preemption and that it violated the doctrine of intergovernmental immunity. The district denied relief. The Seventh Circuit affirmed, holding (1) because it was not preempted by federal immigration statutes the law was not invalid as a matter of field or conflict preemption; and (2) the law did not violate principles of intergovernmental immunity. View "McHenry County v. Raoul" on Justia Law

Lane was detained on state criminal charges at the LaPorte County, Indiana jail. Lane sued Person, a doctor at the jail, for deliberate indifference to Lane’s medical condition, 42 U.S.C. 1983. While in jail, Lane sought medical care for an acoustic neuroma (non-cancerous tumor). Person did not order surgical removal of the tumor, which Lane believes was required. He later had the surgery. Nelson, a doctor who also treated Lane, testified that Person appropriately addressed Lane’s condition by ordering multiple MRIs and a consultation with a specialist. Person prevailed at summary judgment and was awarded $4,000 in costs; $2,750 was a one-day witness fee for Nelson,The Seventh Circuit affirmed but modified. The court noted that more than 30 days passed between the denial of Lane's motion to reconsider the summary-judgment decision and his notice of appeal, so the appeal was limited to a review of the decision on costs. There is a presumption under Rule 54(d) that a prevailing party recovers costs that are enumerated in 28 U.S.C. 1920. Although section 1920 includes witness fees, another statute, 28 U.S.C. 1821, more specifically addresses the allowable amount to $40 per day, and no other authority allows more. Person may recover total costs of $1,307.59. View "Lane v. Person" on Justia Law