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

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

During a decade as a member of USA Gymnastics, J.J. was one of the hundreds of gymnasts sexually assaulted by Larry Nassar, the organization’s physician. In response to the claims based on Nassar’s conduct, USA Gymnastics filed for bankruptcy. The bankruptcy court set a deadline for filing proofs of claim. USA Gymnastics mailed notices to all known survivors who had filed or threatened to file lawsuits, had reported abuse, had entered into a settlement agreement, or had received payment as a result of an allegation of abuse--more than 1,300 individuals. USA Gymnastics also emailed copies of the notice to more than 360,000 current and former USA Gymnastics members, and placed information about the bar date on its website, social media pages, in USA Today, and in gymnastics journals, podcasts, and websites J.J. did not receive actual notice and filed her proof of claim five months late.The bankruptcy court treated her claim as untimely. The district court and Seventh Circuit affirmed. J.J. argued that she was entitled to actual notice; she claimed USA Gymnastics should have known that she was a potential claimant because it needed to retain medical records under Michigan law and should have known that she had seen Nassar for medical care. The court found no evidence that USA Gymnastics had these records; J.J.’s argument that Michigan law required retention of any relevant documents “is dubious.” View "Jane Doe JJ v. USA Gymnastics" on Justia Law

A southern Illinois outpatient surgery clinic accused the area’s largest hospital system and its largest health insurer (Blue Cross) of violating federal and state antitrust laws by entering into contracts that designate the hospital but not the clinic as a Blue Cross preferred provider (in-network provider). A district judge granted judgment in favor of Blue Cross, reasoning that insurers are customers and cannot be liable for the practices of sellers with market power. The clinic and the hospital agreed that a magistrate judge could handle the rest of the case and enter a final judgment, 28 U.S.C. 636(c). Discovery followed. After reviewing a special master’s report, a magistrate granted the hospital summary judgment on the ground that the clinic had not been injured.The Seventh Circuit affirmed, first noting that Blue Cross had not consented to a magistrate having final authority. However, Blue Cross received a district judge's decision and impliedly consented to the magistrate by submitting documentation. Neither federal nor state law prohibits preferred provider agreements; the agreements are not exclusive dealing or tie-in arrangements. The clinic "scarcely tries to show that it has been injured by reduced output or higher prices," nor does it allege that there is any historical link between the hospital’s insurance-contracting practices and either prices or output. View "Marion HealthCare, LLC. v. Southern Illinois Healthcare Services" on Justia Law

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