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

Big Shoulders sued the railroads (SLRG), with federal jurisdiction ostensibly based on diversity of citizenship, and requested that the district court appoint a receiver to handle SLRG’s assets. That court did so, which brought the case to the attention of several creditors. One of them, Sandton, intervened and challenged the appointment of the receiver and the district court’s jurisdiction. Sandton alleged that Big Shoulders failed to join necessary parties who, if added, would destroy diversity of citizenship. Meanwhile, other creditors (Petitioning Creditors) filed an involuntary bankruptcy petition on behalf of SLRG in federal bankruptcy court in Colorado. The receiver objected. Because the judicially approved receivership agreement contained an anti-litigation injunction, the district court initially concluded that the bankruptcy petition was void. On reconsideration, however, the district court determined that it did not have the authority to enjoin the bankruptcy. The bankruptcy continued. After Big Shoulders refused to continue to fund the receivership, the district court approved its termination.The Seventh Circuit consolidated several appeals, each of which involved questions of standing or mootness. The court concluded that those justiciability questions required the dismissal of all but Sandton’s appeal. As for Sandton’s argument that diversity jurisdiction is lacking, the court remanded to the district court for an application in the first instance of the “nerve center test” to determine if SLRG and Mt. Hood are citizens of Illinois. View "Sandton Rail Company LLC v. San Luis & Rio Grande Railroad, Inc." on Justia Law

PRA hired Wadsworth and, in its offer letter, described a signing bonus: $3,750 payable after 30 days of employment, followed by another $3,750 after 180 days of employment. If Wadsworth voluntarily ended her employment or PRA fired her for cause within 18 months, she was obligated to repay the full bonus. Wadsworth collected both signing payments, but after she completed one year of employment, PRA fired her. Kross, a debt-collection agency, attempted to recover the bonus payments. Kross mailed Wadsworth a collection letter and a Kross employee called Wadsworth by telephone four times. Wadsworth sued Kross claiming that its letter and phone calls violated the Fair Debt Collection Practices Act, 15 U.S.C. 1692, by failing to provide complete written notice of her statutory rights within five days of the initial communication and because the caller never identified herself as a debt collector.The district court entered summary judgment for Wadsworth. The Seventh Circuit reversed and remanded with instructions to dismiss for lack of subject-matter jurisdiction. The alleged violations did not cause Wadsworth any concrete harm and allege nothing more than “bare procedural violation[s],” which Article III precludes courts from adjudicating. View "Wadsworth v. Kross, Lieberman & Stone, Inc" on Justia Law

Andrade owns a Hammond, Indiana apartment building. Hammond inspected and issued a notice that the building was unsafe. After a hearing, the Hammond Board of Public Works ruled in favor of Hammond. The Lake Superior Court reversed because Andrade did not have proper notice of the hearing. A year later, Hammond re-inspected and issued a new notice. The Board scheduled another hearing. Andrade received proper notice; he served the Chief of Inspection a subpoena requesting that he bring to the hearing all “regulations, ordinances, and/or statutes” that the Chief relied upon during the first hearing. Hammond did not comply with the subpoena. The Board ordered Andrade to remedy the unsafe conditions. The Lake Superior Court and the Indiana Court of Appeals affirmed; the Indiana Supreme Court and U.S. Supreme Court declined to review the case.Andrade filed suit under 42 U.S.C. 1983 and 1985, alleging that the defendants violated and conspired to violate Andrade’s due-process rights by making “intentional false representations of opinion testimony” before the Board, “fail[ing] to comply with a lawfully-issued subpoena without justification,” and pursuing an “unannounced policy to deny subsidized residential units in more desirable neighborhoods.” The district court dismissed Andrade’s complaint, citing the Rooker-Feldman doctrine; appellate review of state-court judgments is reserved exclusively to the U.S. Supreme Court. The Seventh Circuit reversed. Andrade’s claims concern the defendants’ actions separate from any state-court judgment. View "Andrade v. Hammond Board of Public Works" on Justia Law

Stark had surgery in 2007 to implant a pelvic mesh device. The surgery was not successful, and she had follow-up surgeries that also were not successful. In 2018, she learned for the first time that her problems with the pelvic mesh device might have resulted from a defect in the product itself. She consulted a lawyer and later that year filed this suit against the manufacturer. The district court concluded that Stark should have realized much earlier that the product might have been defective and granted summary judgment based on the two-year statute of limitations.The Seventh Circuit reversed. The statute of limitations began to run only when Stark should have realized that her mesh-related complications might have been wrongfully caused by another person. As a general rule, the failure of a medical procedure or product to cure a patient does not necessarily signal that anyone acted wrongfully, particularly when the patient experiences known complications that do not necessarily result from tortious actions. In addition here, Stark’s medical history included Ehlers-Danlos syndrome, which two of her doctors told her could explain her continued problems. The combination of that general principle and her specific circumstances could allow a reasonable jury to decide that this suit was timely. View "Stark v. Johnson & Johnson and Ethicon, Inc." on Justia Law

Onfido provides biometric identification software that is incorporated into its customers’ products and mobile apps for verifying users’ identities. Onfido partnered with OfferUp—an online consumer marketplace—to verify users’ identities. Sosa verified his identity with OfferUp using the technology provided by Onfido—the app’s TruYou feature. To complete the verification process, Sosa uploaded a photograph of his driver’s license and a photograph of his face. Sosa alleges that Onfido then used biometric identification technology without his consent to extract his biometric identifiers and compare the two photographs.Sosa brought class action claims against Onfido under the Illinois Biometric Information Privacy Act. Onfido moved to stay the case and to compel individual arbitration based on an arbitration provision in OfferUp’s Terms of Service. The district court rejected each of Onfido’s nonparty contract enforcement theories and denied Onfido’s motion. The Seventh Circuit affirmed. Onfido failed to establish that there was an outcome-determinative difference between Illinois and Washington law, and the district court properly applied Illinois law—the law of the forum state—to determine that Onfido failed to establish that it was a third-party beneficiary of the Terms of Service or that it could otherwise enforce the contract’s arbitration provision either as an agent of OfferUp or on equitable estoppel grounds. View "Sosa v. Onfido, Inc." on Justia Law

Herrera, an Illinois state prisoner, filed a 42 U.S.C. 1983 action against three correctional officers of the Cook County Jail for failing to protect him from assault and denying him prompt medical care. In his timely filed original complaint, Herrera named each of the defendants “John Doe” as a nominal placeholder until he could ascertain the proper identities of the officers. Herrera then twice amended his complaint to include their actual names—but did so outside of the two-year limitations period set by Illinois law.The district court denied a motion to dismiss, reasoning that suing “John Doe” defendants constituted a “mistake” under Federal Rule of Civil Procedure 15(c)(1)(C)(ii), so that Herrera’s amended complaint “related back” to his original complaint. The Seventh Circuit reversed. Knowingly suing a John Doe defendant is not a “mistake” within the meaning of Rule 15(c). Whether Herrer satisfies the factual test for equitable tolling is beyond the scope of an interlocutory appeal and should be considered on remand. View "Herrera v. Cleveland" on Justia Law

In 2013, a Chicago Best Buy store's manager warned the Plaintiffs that plasma‐screen televisions frequently experienced longevity problems, and encouraged them to buy a five‐year extended warranty, the “Geek Squad Protection Plan.” They bought a Samsung 64‐inch plasma‐screen television for $3,119.99 and the Plan for another $519.99. The television broke down after four years. Best Buy could not repair it. The Plan provided that if the television could not be repaired, Best Buy could elect either to replace the television or to compensate the consumer with a gift card. Best Buy provided a gift card, the value of which was keyed to the current market price of a new television of similar quality to the one purchased in 2013.The Plaintiffs filed a purported class action under the Magnuson‐Moss Warranty Act, 15 U.S.C. 2301, which requires that if a warrantied consumer good cannot be repaired, the written warranty must give the consumer a choice of remedy: either a replacement or a refund of the purchase price, less reasonable depreciation. They argued that the Plan is a full “written warranty” and that Best Buy’s unilateral decision to provide the gift card failed to provide consumers with the choice. The Seventh Circuit affirmed the dismissal of the case. For purposes of diversity jurisdiction, the Wares have not met the amount‐in‐controversy requirement. View "Tawanna Ware v. Best Buy Stores" on Justia Law

Talevski, living with dementia, was a patient at Valparaiso Care, a state-run Indiana nursing facility. His wife filed suit under 42 U.S.C. 1983 for violations of the Federal Nursing Home Reform Act (FNHRA), 42 U.S.C. 1396r, which establishes the minimum standards of care to which nursing-home facilities must adhere in order to receive federal funds in the Medicaid program. Some of the requirements relate to residents’ rights, including two cited by Talevski, the right to be free from chemical restraints imposed for purposes of discipline or convenience rather than treatment and the right not to be transferred or discharged unless certain criteria are met.The district court dismissed the action, finding that FNHRA does not provide a private right of action that may be redressed under 42 U.S.C. 1983. The Seventh Circuit reversed. The section 1983 remedy broadly encompasses violations of federal statutory as well as constitutional law. The court noted the express rights-creating language in the statute and that FNHRA is not the type of comprehensive enforcement scheme, incompatible with individual enforcement. The right protected by the statute is not so vague and amorphous that its enforcement would strain judicial competence. View "Talevski v. Health and Hospital Corp. of Marion County" on Justia Law

Under the Indiana Video Service Franchises Act of 2006, anyone offering “video service” must enter into a franchise agreement with the Indiana Utility Regulatory Commission in exchange for use of a public right-of-way. For years, traditional cable and communications companies like Comcast and AT&T have signed the franchise agreements and paid the required fees to government “units,” including counties, municipalities, or townships within the provider’s service area. Recently, traditional cable television has been supplanted in many ways by on-demand streaming platforms like Netflix; some cities concluded that streaming platforms offer “video service” within the meaning of the Act. The streaming platforms have not done so and have avoided the Act’s fee obligations.In 2020, several cities filed a putative class action against Netflix, Disney, Hulu, DIRECTV, and DISH Network, seeking a declaration that the defendants are subject to the Act and must pay past and future franchise fees. The defendants removed the case to federal court under 28 U.S.C. 1441 and 1453. . Invoking the comity abstention doctrine articulated by the Supreme Court in Levin v. Commerce Energy (2010), the district court remanded. The Seventh Circuit affirmed. Indiana courts are well-positioned to interpret (for the first time) the state’s Video Service Franchises Act and to resolve any federal defenses raised by the streaming platforms. View "City of Fishers, Indiana v. DIRECTTV" on Justia Law

Smith worked for PTI, a company that transports railroad crews to and from their workplaces. Believing that her position was misclassified under the Fair Labor Standards Act and that she was not receiving proper overtime wages, she filed a collective action 29 U.S.C. 216(b). Unlike a class action under FRCP 23(b)(3), an FLSA collective action requires group members to affirmatively opt-in to participate. Her suit was within the two-year limitation period. The district court’s docket sheet shows numerous putative group members consenting to opt-in.PTI noted that Smith had not filed anything except her complaint indicating that she herself wished to participate in the group action. The court held that Smith’s group action could not “commence” until such consent was filed, 29 U.S.C. 256, but the limitations periods had run. The court concluded that Smith’s complaint also failed to allege timely individual claims, and dismissed the case. Smith’s appeal concerned only her individual action. The Seventh Circuit vacated. The court erred by refusing to allow Smith to proceed on her individual claims. Read in the light most favorable to Smith, the complaint contained sufficient factual allegations related to her individual claims to put PTI on notice that she intended to sue it both in an individual and a representative capacity. She explicitly stated as much in the caption. View "Smith v. Professional Transportation,Inc." on Justia Law