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

The Fund appealed the dismissal of its challenge to Indiana’s prohibition on corporate contributions to political action committees (PACs) for independent expenditures. Following oral argument, the Fund filed a “Motion Requesting Judicial Notice,” explaining that Morales has succeeded Sullivan as Indiana’s Secretary of State and has replaced Sullivan as a party to the case. Under Fed.R.App.P. 43(c)(2) the substitution happens automatically without any motion. The Fund sought judicial notice of the fact that there is no record evidence that Morales has taken any steps to disavow enforcement of Indiana’s Election Code prohibition on corporate contributions to PACs for purposes of independent expenditures.The Seventh Circuit denied the motion as “unnecessary” and “improper.” Nothing about Morales becoming Secretary of State calls jurisdiction into question. Nor does it materially alter anything about the issues. The Fund’s motion seeks one of two things, neither of which would be an appropriate use of judicial notice. It may attempt to define the likelihood that Secretary Morales will enforce the Election Code or it might attempt to highlight what it sees as a gap in the evidentiary record—that Secretary Morales has yet to make a statement regarding state regulation of independent-expenditure PACs. Judicial notice is only permitted for adjudicative facts “not subject to reasonable dispute.” View "Indiana Right to Life Victory Fund v. Morales" on Justia Law

While working as a standup forklift operator, Anderson hit a bump and fell onto the floor. The forklift continued moving and ran over her leg; the resulting injuries necessitated its amputation. Anderson sued the forklift’s manufacturer, Raymond, alleging that the forklift was negligently designed. The parties disputed the admissibility of the testimony of Dr. Meyer, one of Anderson’s experts. Meyer believed that Raymond could have made several changes to its design that would have prevented Anderson’s accident. Meyer’s primary suggestion was a door to enclose the operating compartment, which would prevent operators from falling into the forklift’s path. Like other standup forklift manufacturers, Raymond offers doors as an option but does not fit doors to its forklifts as standard, claiming that a door could impede the operator’s ability to make a quick exit if the forklift runs off a loading dock or begins to tip over. The district court concluded that Meyer’s opinion about a door was inadmissible because it did not satisfy Federal Rule of Evidence 702 or the “Daubert” test but admitted Meyer’s opinions on other potential design improvements.The Seventh Circuit reversed a judgment in Raymond's favor. The exclusion of Meyer’s opinion was substantially prejudicial to Anderson’s case. Meyer has a “full range of practical experience," academic, and technical training and his methodology rested on accepted scientific principles, Raymond’s critiques go to the weight his opinion should be given rather than its admissibility. View "Anderson v. Raymond Corp." on Justia Law

Suspecting that Troconis-Escovar was involved in the illegal drug business, the DEA searched his vehicle. Agents found $146,000 in cash, which they believed represented drug proceeds. DEA notified Troconis-Escovar that it intended to effect an administrative forfeiture of the funds (to declare them to be government property). Illegal drug proceeds are eligible for civil forfeiture under 21 U.S.C. 881(a)(6), subject to the procedural safeguards of the Civil Asset Forfeiture Reform Act, 18 U.S.C. 983. Troconis-Escovar’s attorney tried to contest the forfeiture, but filed the wrong form—a “petition for remission” rather than a “claim.” Only a claim may be used to challenge a proposed forfeiture. After the mistake was discovered, DEA gave Troconis-Escovar an extra 30 days to supplement his petition for remission. Troconis-Escovar did not do so and lost the money. He filed a Motion for the Return of Property under Federal Rule of Criminal Procedure 41(g).The district court dismissed his lawsuit, finding that it lacked jurisdiction. The Seventh Circuit affirmed. The dismissal was correct, but not because jurisdiction was lacking. Troconis-Escovar does not explain why he should be able to obtain relief outside section 983 when Congress expressly conditioned relief from civil forfeiture on circumstances that do not apply to him. He did not explain his argument about the untimeliness or sufficiency of the DEA’s notice. View "Troconis-Escovar v. United States" on Justia Law

The Partnership filed a contract claim in a Chinese court against Wan, his company, and his brother. The Chinese court entered a default judgment against Wan after he failed to appear. A year later, the Partnership filed a complaint in the Central District of Illinois, seeking enforcement of the Chinese judgment under the Illinois foreign judgment recognition law, predicating subject matter jurisdiction on diversity of citizenship. The district court, determining that the Chinese judgment was enforceable under Illinois law, granted the Partnership summary judgment.The Seventh Circuit vacated, finding the factual predicates for the district court’s jurisdiction not established firmly in the existing record. The Partnership, which had the burden on the issue, failed to present “competent proof” of its citizenship; it did not present any evidence establishing its citizenship or the citizenship of its several partners. The Partnership submitted a declaration by its employee who stated simply that it “is and was domiciled in Yancheng City, Jiangsu Province, People’s Republic of China.” However, a partnership does not have a “domicile” for purposes of diversity jurisdiction. Rather, to establish subject matter jurisdiction based on diversity of citizenship, the citizenship of each partner must be established. There is no evidence to support a finding of complete diversity. View "Yancheng Shanda Yuanfeng Equity Investment Partnership v. Wan" on Justia Law

HyreCar is an intermediary between people who own vehicles and people who would like to drive for services such as Uber and GrubHub. Before leasing a car, HyreCar sends an applicant’s information, including a photograph, to Mitek, which provides identity-verification services. Johnson, a HyreCar driver, brought a putative class action, alleging Mitek used that information without the consent required by the Illinois Biometric Privacy Act. Mitek asked the district court to send the case to arbitration, citing an Arbitration Agreement in Johnson’s contract with HyreCar, applicable to drivers, HyreCar, and “any subsidiaries, affiliates, agents, employees, predecessors in interest, successors, and assigns, as well as all authorized or unauthorized users or beneficiaries of services or goods provided under the Agreement.The district court concluded that suppliers such as Mitek were not covered. The Seventh Circuit affirmed, rejecting Mitek’s claim that it is a “beneficiary of services or goods provided under the Agreement.” The “services or goods provided under the Agreement” are vehicles. Mitek cannot be classified as a “user” of HyreCar’s services or goods. Mitek has its own contract with HyreCar, but does not have a contract with any HyreCar driver. The Federal Arbitration Act, 9 U.S.C. 2 does not change the result. The court noted that claims under the Illinois Act cannot be litigated in federal court unless the plaintiff can show concrete harm. Johnson seeks only statutory damages. Johnson’s claim must be remanded to state court. View "Johnson v. Mitek Systems, Inc." on Justia Law

After the Illinois Department of Transportation (IDOT) terminated McHugh’s employment, he sued seven individuals under federal law, alleging due process violations, and sued IDOT under an Illinois statute, the Ethics Act. IDOT argued that sovereign immunity under the Eleventh Amendment barred the suit. The district court held that McHugh’s claim against IDOT could proceed in state court but not federal court, and entered judgment on the merits. The Seventh Circuit modified the judgment to dismissal for lack of jurisdiction. If a defendant enjoys Eleventh Amendment immunity from a claim and invokes that immunity, it deprives a federal court of jurisdiction over the claim. View "McHugh v. Illinois Department of Transportation" on Justia Law

Riegel, seeking to build a condominium development in Isla Mujeres, formed ISLA and borrowed millions of dollars from the Hovdes. The project failed. More than 10 years later, the Hovdes sued ISLA and Riegel.The district court granted the defendants summary judgment on the claim based on the Mortgage Note, citing the 10-year limitations period, and later holding that the limitations defense could be asserted against Riegel as the guarantor. The Seventh Circuit affirmed. An acceleration clause provided that if a Default occurred, the outstanding unpaid principal and interest would automatically become immediately due, triggering the 10-year limitations period. One such “Default” was an “Act of Bankruptcy,” defined to include admitting in writing the inability to pay debts as they mature. Two emails sent by Riegel to the Hovdes constituted an admission in writing of inability to pay debts: an August 7, 2008 email, asking for an advance to pay a tax bill, and a subsequent email indicating that all construction workers had been suspended. The language does not require actual insolvency; it merely requires an admission of an inability to pay the debts, whether or not true. The terms “continuing, absolute, and unconditional” are terms of art when used in guarantees and do not waive the limitations defense. View "Hovde v. ISLA Development LLC" on Justia Law

In 2012, a competitor sued Creation for trademark violations. Creation requested that Selective Insurance provide coverage. Selective refused. Creation’s settlement with its competitor prevented Creation from selling one of its primary lines. Creation struggled financially. Selective sought a declaration in Illinois state court that it had no duty to defend. Creation countersued and also alleged breach of the insurance policy. The Illinois court entered partial summary judgment for Creation on its duty-to-defend claim, limited to fees Creation incurred before the original trademark litigation was settled.In 2014—in the middle of the state-court litigation—Creation sued Selective in federal court for breach of contract and under the Illinois Insurance Code. In 2016, Creation voluntarily dismissed its state-court breach-of-contract claim with leave to refile. The Illinois court expressly reserved Creation’s right to maintain its federal action on its contract claim. After the 2017 state court award, the federal district court awarded Creation nearly $3 million in damages on the Insurance Code claim. After remand, Creation unsuccessfully sought to amend its complaint to seek punitive damages. The district court then concluded that the doctrines of claim and issue preclusion barred Creation’s remaining contract claim.The Seventh Circuit reversed, noting that the case is an “anomaly.” The state court expressly reserved Creation’s right to file the claim in federal court, so the suit is not precluded by its earlier state-court litigation. View "Creation Supply, Inc. v. Selective Insurance Co. of the Southeast" on Justia Law

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