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

A 2015 Wired magazine article described a controlled hack of a Jeep Cherokee driven by one of the magazine’s journalists. Cybersecurity researchers exploited a vulnerability in the Jeep’s “uConnect” infotainment system, designed by Harman, for installation in vehicles manufactured by FCA (formerly Chrysler). FCA immediately issued a recall and provided a free software update to patch the vulnerability. Federal regulators supervising the recall determined that the patch eliminated the vulnerability. Other than the Jeep in the Wired test, no other vehicle was successfully hacked.Four plaintiffs sued FCA and Harman on behalf of every consumer who had purchased or leased a 2013–2015 Chrysler vehicle equipped with the uConnect infotainment system, asserting federal and state warranty and consumer-fraud claims. The plaintiffs argued that although the alleged defect never manifested again after the Wired hack, they paid more for their vehicles than they would have if they had known about the cybersecurity vulnerability. After discovery closed, faced with a factual challenge to standing, the plaintiffs failed to provide evidence in support of their claimed overpayment injury.The Seventh Circuit affirmed the dismissal of the case. When litigation moves beyond the pleading stage and Article III standing is challenged as a factual matter, plaintiffs cannot rely on mere allegations of injury; they must provide evidence of a legally cognizable injury in fact. These plaintiffs continued to rely on allegations and legal arguments. View "Flynn v. FCA US LLC" on Justia Law

After filing for bankruptcy, the Terrells proposed a plan that classified about $30,000 they owed to Wisconsin as a “priority debt,” 11 U.S.C. 507(a)(1)(B) based on an overpayment of public assistance. The existence of a priority debt meant that the Chapter 13 plan had to continue for 60 months, after which unpaid debts would be discharged. After the plan was confirmed, the Seventh Circuit held that public assistance debts are not entitled to priority status, which raised the possibility of cutting the duration of the Terrell plan to 36 months and reducing the amount they paid. The bankruptcy court eventually amended the plan accordingly.The Seventh Circuit reversed, noting that the Terrells waited almost two years after the confirmation of their plan to seek a modification. A bankruptcy court needs authority from a statute, a rule, or the litigants’ consent to modify a confirmed plan. The Terrells acted too late to use Rule 60(b), the best and possibly the only source of authority for the relief they sought. View "State of Wisconsin Department of Children and Families v. Terrell" on Justia Law

When the Indiana Department of Child Services identifies a situation that involves the apparent neglect or abuse of a child, it files a “CHINS” (Children in Need of Services) petition that may request the child’s placement with foster parents. Minors who are or were subject to CHINS proceedings sought an injunction covering how the Department investigates child welfare. The district court denied a request to abstain and declined to dismiss the suit. The Seventh Circuit reversed, noting that only two plaintiffs still have live claims and that it is improper for a federal court to issue an injunction requiring a state official to comply with existing state law. Indiana subsequently filed a bill of costs under Fed. R. App. P. 39(a)(3), against the next friends who represented the minors’ interests. The Seventh Circuit denied that petition. Next friends are not parties to suits in which they assist minors or incompetent persons. Rule 39(a) authorizes awards against losing litigants, not against their agents (which may include lawyers and guardians ad litem as well as next friends). The next friends in this litigation are neither the children’s natural parents nor their foster parents and are not generally responsible for the children’s expenses. View "Ashley W. v. Holcomb" on Justia Law

Rankins, a DHL employee, was seriously injured at work when a cable within a winch system snapped. Rankins received workers’ compensation benefits. The winch system was designed and installed by SSK. Rankins brought products-liability claims in state court against SSK. DHL lost the physical pieces of the winch system after the suit was removed to federal court. SSK brought a third-party suit against DHL seeking damages for the spoliation of evidence and seeking contribution under the Illinois Joint Tortfeasor Contribution Act. DHL settled with Rankins by waiving its workers’ compensation lien ($455,229.17) and paying an additional $87,500. DHL then argued that its good-faith contribution settlement with Rankins entitled it under state law to a full dismissal of all third-party claims stemming from Rankins’s injury. The district court rejected SSK’s argument that the settlement did not compensate SSK for its own spoliation-related difficulties and dismissed SSK’s third-party complaint.The court found that, under FRCP 54(b), there was no just cause for delaying SSK’s appeal of the dismissal of the spoliation claim. The Seventh Circuit dismissed the appeal for lack of jurisdiction. The spoliation and product liability claims are not factually and legally separable to the extent required by Rule 54(b), so there is no final judgment. View "Systems Solutions of Kentucky LLC, v. DHL Express (USA), Inc." on Justia Law

A 66-count, multi-defendant criminal indictment notified the defendants that the government would seek criminal forfeiture under 18 U.S.C. 982(a)(1), (a)(2)(A), (b) and 28 U.S.C. 2461(c) as part of any sentence imposed and would seek civil forfeiture under 18 U.S.C. 981(a)(1)(A), (a)(1)(C), (a)(1)(D), and 28 U.S.C. 2461(c). Furando and his companies pleaded guilty; Furando’s plea included agreed-upon forfeiture of personal property, assets, vehicles, funds, Saddle River, New Jersey real property, and proceeds from the sale of commercial real estate in Montvale. The subsequent preliminary forfeiture orders directed the government to give notice to potential third-party interest holders under 21 U.S.C. 853(n), which the government did.Furando’s wife and three companies (claimants) filed under 21 U.S.C. 853 to make their claim as innocent owners of the property. The district court denied the claimants’ petition to adjudicate the validity of their interest, granted the government’s motion for interlocutory sale of the Saddle River property, and denied the claimants’ section 853(n) petition without further explanation. The Seventh Circuit vacated in part. The district court erred in sua sponte denying the section 853(n) petition without a hearing or opportunity to amend. The government’s arguments that the claimants cannot prevail under 853(n)(6) and the arguments about prior vested interest are misplaced, because those statutory considerations are only relevant “after the hearing”—which never occurred. The court affirmed the order for an interlocutory sale. View "United States v. Furando" on Justia Law

Stevenson was injured in the course of his employment while moving a portable ladder in order to clean a component of a Windmoeller printing press. The ladder was supplied with the machine and was necessary to reach an interior printing plate. The ladder caught on the cable attached to the machine, which caused Stevenson to twist and injure his shoulder and back; he required surgery.Stevenson’s product-liability suit argued that the design of the machine, including the placement of the cable near the access door used to service the machine’s interior components, was defective and foreseeably gave rise to his injury. Stevenson asked the court to appoint an engineering expert. Fed. R. Evid. 706 codifies the power of a trial judge to appoint an expert to function as a neutral expert serving the court rather than any party. The district court denied this motion, reasoning Stevenson was really asking for the appointment of an expert to support his case, rather than a neutral expert. Stevenson contends that the month that the court allowed him to respond to a subsequent summary judgment motion was insufficient to hire his own expert, allow related discovery, and file his response.The Seventh Circuit affirmed summary judgment in favor of Windmoeller. Only an advocate expert could have filled the gap in Stevenson’s case. Stevenson could have asked for pre-authorization of the payment for such an expert from a court fund under Local Rule 83.40. View "Stevenson v. Windmoeller & Hoelscher Corp." on Justia Law

Fairway, co-owned by Johnson, who is African-American and Native-American, contracted with FedEx to deliver packages. FedEx later assigned Fairway's contract to another company. Johnson's suit under 42 U.S.C. 1981, alleged racial discrimination and breach of contract. A second complaint was voluntarily dismissed. According to FedEx, an arbitration settlement was reached, under which Johnson released all claims against FedEx. Johnson disputes that she was a party to any settlement.Johnson filed another suit against FedEx, claiming racial discrimination and that FedEx blocked a contract assignment to her as an individual and prevented an assignment to BN, a company of which she was the majority shareholder. The court dismissed her suit, rejecting Johnson’s argument that as Fairway’s business contact, she qualified as a party to the contract. Johnson was granted two weeks to amend her complaint, according to precise directions concerning the need for proof that Johnson asked FedEx to approve an assignment to Johnson. Johnson's amended complaint replaced herself as the plaintiff with a corporation, DJM, asserting she “was to be the majority shareholder” of DJM. The complaint did not allege that FedEx had blocked an attempted assignment to Johnson individually but alleged that FedEx blocked an assignment to DJM.The court dismissed, noting the “four-year statute of limitations for Johnson’s Section 1981 claim ha[d] elapsed.” The Seventh Circuit affirmed. “Given this procedural history, the district court could have done more than admonish Johnson.” FedEx could have been awarded its reasonable attorneys’ fees. View "DJM Logistics, Inc. v. FedEx Ground Package System, Inc." on Justia Law

Arrive and Tech, compete to help customers coordinate shipments. Six employees at Arrive departed for Tech despite restrictive covenants. Arrive sued the six individuals and Tech for injunctive relief under the Defend Trade Secrets Act, 18 U.S.C. 1836(b)(3), claiming irreparable harm because the individuals had breached their restrictive covenants and misappropriated trade secrets.The Seventh Circuit affirmed the denial of a preliminary injunction. Arrive has an adequate remedy at law for each of its claimed injuries, and faces no irreparable harm. Even if its argument were not forfeited, lost opportunities cannot support a showing of irreparable harm under these circumstances. The type of harm Arrive alleges would ultimately translate into lost profits, albeit indirectly, as in the end there is no economic value to opportunities that are not converted to sales. Given the balance of harms, the district court was within its discretion to deny injunctive relief. The court noted that the expiration of the time period of a former employee’s restrictive covenants does not render moot an employer’s request for an injunction to prevent the former employee from violating those restrictive covenants. A court could still grant Arrive effectual relief in the form of an injunction, even though certain individual defendants no longer work for Traffic Tech. View "DM Trans, LLC v. Scott" on Justia Law

The federal government may deny admission or adjustment of status to a noncitizen “likely at any time to become a public charge, 8 U.S.C. 1182(a)(4)(A). For decades, “public charge” was understood to refer to noncitizens “primarily dependent on the government for subsistence, as demonstrated by either (i) the receipt of public cash assistance for income maintenance or (ii) institutionalization for long-term care at government expense.” In 2019, the Department of Homeland Security expanded the meaning of “public charge” to disqualify a broader set of noncitizens from benefits. The Rule immediately generated extensive litigation.In 2020, the district court vacated the 2019 Rule under the Administrative Procedure Act (APA), 5 U.S.C. 701. In 2021, the federal government dismissed appeals defending the 2019 Rule in courts around the country. Several states subsequently sought to intervene in the proceedings, hoping to defend the 2019 Rule; they also moved for relief from judgment under Rule 60(b). The district court denied the motions, finding each untimely. The Seventh Circuit affirmed. The district court did not abuse its discretion with respect to timeliness. The court declined to address other issues. View "Cook County, Illinois v. State of Texas" on Justia Law

In a nationwide class action on behalf of all customers of GLV, which operates in several states as Sports Performance Volleyball Club, the district court certified a class limited to customers of GLV’s Illinois locations. Later, the judge concluded that Mullen, who asserts that GLV committed fraud by failing to disclose allegations of sexual abuse by a coach, was an unsuitable class representative because Mullen had not been injured and invited her to find a substitute. She did not. The class was never decertified.The Seventh Circuit affirmed the rejection of the suit on summary judgment after noting that abstention might have been appropriate. All of the litigants are citizens of Illinois, the claim rests on state law, and the remaining stakes are modest. The sole asserted basis of federal jurisdiction is the Class Action Fairness Act, which applies to class actions with more than 100 class members, stakes exceeding $5 million, and minimal diversity of citizenship. 28 U.S.C. 1332(d)(2). Illinois law requires the plaintiff to show that she was “in some manner, deceived” by misrepresentation or material omission. Mullen was aware of the allegations against the coach. The court noted that the outcome does not bind any other person whose children attended the Club. View "Mullen v. GLV, Inc." on Justia Law