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

ERISA-covered employee benefit funds filed suit to hold a newly formed, family-run plumbing company liable for an existing ERISA judgment on the basis that it stepped into the predecessor family company’s obligations. The funds cited the federal common law doctrine of successor liability and contended that was enough to show their claim arose under federal law and raised a federal question properly in federal court under 28 U.S.C. 1331. The district court agreed, proceeded to the merits, and concluded it would be inequitable to hold the new entity responsible for the other’s unpaid plan contributions on a theory of successor liability.The Seventh Circuit vacated, stating the suit must be dismissed. The reliance on federal common law alone does not suffice to show a claim “arising under” federal law for purposes of establishing federal question jurisdiction. Supreme Court precedent indicates that in these circumstances the funds needed to identify a source of law supplying them a federal cause of action—a federal law authorizing them to sue in federal court on their claim. Section 1331, the federal question jurisdiction statute, does not itself create or supply that cause of action here. Nor have the funds identified any other statute authorizing their action in federal court. View "East Central Illinois Pipe Trades Health & Welfare Fund v. Prather Plumbing & Heating, Inc." on Justia Law

Linda and her husband Milton set up an estate plan with the help of attorney Roth. Milton created a trust and designated himself as sole trustee. Upon his death, Linda and his accountant, Sanders, would become cotrustees. Milton’s assets included a $1.5 million Vanguard account. Milton later changed the Vanguard account and other accounts to transfer on death directly to Linda as the sole primary beneficiary. Milton died in 2016. Linda believed that Roth was still her attorney. Roth and Sanders convinced Linda to waive her rights as co-trustee and to disclaim her interest in the Vanguard account; they suggested that she had acquired these interests through wrongdoing. Roth then transferred the disclaimed Vanguard account directly to Milton’s son, David, instead of to the trust. David sued Linda and obtained an Indiana state court judgment that she exerted undue influence on Milton and that the trust was the proper owner of certain assets Milton had transferred to Linda.Linda sued in federal court, asserting fraud, conspiracy, and malpractice against Roth and Sanders, claiming the two “duped” her into disclaiming certain assets and that Roth committed malpractice by transferring the account to David rather than the trust. The Seventh Circuit affirmed the dismissal of the suit; issue preclusion based on the Indiana judgment foreclosed Linda’s claims because the Indiana jury’s finding of undue influence showed that Roth and Sanders’s advice to disclaim her illegally-obtained interests was neither negligent nor fraudulent. View "Bergal v. Roth" on Justia Law

The Vermilion Power Station operated until 2011, burning coal and generating coal ash that was mixed with water and deposited into unlined pits, close to the Middle Fork of the Vermilion River, navigable water protected by the Clean Water Act. A National Pollutant Discharge Elimination System permits the discharge of wastewater from the station’s operations into the Middle Fork, 33 U.S.C. 1342(b). PRN, a nonprofit environmental group, sued, alleging the permit does not authorize the coal ash seepage into the groundwater, which then enters the Middle Fork. Because PRN’s individual members “live near, study, work, and recreate in and around, the Middle Fork, including in the vicinity of the Vermilion Power Station,” PRN maintains it has an interest in stopping and remedying these alleged discharges, which degrade the Middle Fork’s water quality and its “aesthetic beauty and ecological vitality.” The district court held that the Act does not regulate groundwater discharges, even when that groundwater connects to regulated surface waters. The Seventh Circuit stayed PRN’s appeal pending the Supreme Court’s 2020 “County of Maui” decision, which established a multi-factor test to determine whether groundwater discharges fall under the Clean Water Act’s ambit. The court then declined to assess "Maui’s" reach, concluding that PRN lacks standing. PRN has more than 1000 members yet fails to show that at least one of those individuals has standing. Associational standing requires more specificity. View "Prairie Rivers Network v. Dynegy Midwest Generation, LLC" on Justia Law

Daza worked as a geologist for INDOT from 1993 until the agency fired him in 2015. In 2017, he sued, citing 42 U.S.C. 1981 and 1983, the First and Fourteenth Amendments, the Age Discrimination in Employment Act, 29 U.S.C. 621, and the Americans with Disabilities Act, 42 U.S.C. 12101. He alleged that INDOT and its officials had discriminated against him based on race, color, age, and political speech and had retaliated against complaints he made regarding the alleged discrimination.Days after the district court granted INDOT summary judgment in 2018, Daza filed a second action, again alleging discrimination and retaliation based on race, color, age, and political speech, contending that INDOT’s failure to rehire him for the vacancy left after INDOT dismissed him was an independent act of discrimination and retaliation because INDOT filled his position with a young and inexperienced white man. In the first suit, Daza had expressly contended that INDOT’s failure to rehire him and its decision to hire an unqualified replacement proved that INDOT was attempting to cover up its discrimination and retaliation. The Seventh Circuit again affirmed summary judgment in favor of INDOT. Claim preclusion barred the second case. View "Daza v. Indiana" on Justia Law

The Loughrans defaulted on their home mortgage in 2011. In the ensuing foreclosure litigation, the Loughrans pursued procedural delay tactics; they remain in possession of their home despite not having made a mortgage payment in nine years. In 2019, with their state‐court foreclosure litigation more than seven years old, the Loughrans accused U.S. Bank and its counsel of committing fraud in the course of those proceedings. Months later, sensing that their fraud claim was going nowhere, the Loughrans went to federal court, with a complaint that copied and pasted large swaths of text from their state‐court filings.The district court stayed the federal proceedings, noting the practical identity between the federal and state actions. The Seventh Circuit affirmed, first concluding that it had appellate jurisdiction because the stay order was entered with the expectation that the state litigation would “largely” resolve the federal litigation. The district court properly stayed the case; the state action will likely “dispose of a majority of the factual and legal issues,” so a stay saved judicial resources. At the time of the order, the state‐court proceedings were well advanced, The Loughrans essentially were asking the federal judiciary to monitor and discipline how parties conduct themselves in state court. View "Loughran v. Wells Fargo Bank, N.A." on Justia Law

Page, a former advisor to the Trump Presidential Campaign, sued the Democratic National Committee, a subsidiary DNC Corporation, the Perkins law firm, and two Perkins partners. Page alleged defamation based on news stories published in 2016 concerning contacts between the campaign and Russian officials. Having advanced only violations of state law, and alleging that no defendant is a citizen of his home state of Oklahoma, Page relied on diversity jurisdiction. The district court dismissed the case for lack of personal jurisdiction.The Seventh Circuit affirmed, citing the lack of subject matter jurisdiction on the basis that Perkins (with a few of its U.S.-based partners working and living abroad) does not qualify as a proper defendant for purposes of diversity jurisdiction under 28 U.S.C. 1332. Though complete diversity typically hinges on whether any parties on both sides of a lawsuit share citizenship, all parties must fall within the jurisdiction created by the diversity statute. If a party cannot sue or be sued under a provision of the diversity statute, the suit lacks complete diversity. Stateless citizens—because they are not (by definition) a citizen of a state, as section 1332(a) requires—destroy complete diversity just as much as a defendant who shares citizenship with a plaintiff. View "Page v. Democratic National Committee" on Justia Law

After plaintiff was injured from a slip and fall in a Home Depot parking lot, he filed suit against the store claiming that he sustained substantial injuries and alleging that his injuries required multiple surgeries, as well as physical and occupational therapy.The Seventh Circuit concluded that plaintiff's appeal is limited to the district court's denial of his second post-judgment motion filed under Rule 60(b). The court noted that, as a practical matter, that conclusion changes very little because plaintiff's appeal is all and only about whether the district court abused its discretion in dismissing his case for lack of prosecution. The court explained that the district court's denial of the Rule 60(b) motion effectively amounted to reinforcing and standing by its original dismissal decision. In this case, the court concluded that the district court acted well within its discretion dismissing plaintiff's suit where plaintiff's counsel missed many conferences. Because plaintiff chose counsel as his agent, he bears the consequences of counsel's actions. Accordingly, the court affirmed the district court's refusal to reopen the case. View "Krivak v. Home Depot U.S.A., Inc." on Justia Law

In 1986 Deibel, Hoeg, and Steffen founded Hy-Pro Corporation. Deibel, its president, received 2,500 shares, representing 12.5% of the authorized stock. Deibel guaranteed Hy-Pro’s payment of a $100,000 debt to a bank. Within a year Deibel demanded that Hoeg leave. When Hoeg refused, Deibel quit but held onto his stock even. A state court suit settled, but the settlement was not reduced to writing. Deibel insists that under the settlement Hy-Pro would pay $15,000 and arrange with the bank to release his guarantee. Hoeg and Steffen assert that Deibel was also to surrender his shares.Almost 30 years later, Deibel filed a federal suit. HyPro was sold in 2017 for about $20 million; a 12.5% share would exceed $2.5 million. Indiana has a two-year period of limitations for such claims. The Seventh Circuit affirmed the dismissal of the suit as untimely, rejecting Deibel’s claims that he was still an investor when the firm was sold, and, if not, that a firm’s refusal to recognize him as an investor was a “continuing wrong.” When Deibel did not return his shares, Hy-Pro canceled Deibel’s stock. Deibel has not been on the company’s books as a shareholder since 1992. Deibel received multiple letters from various parties, including the IRS, notifying him of that fact; his claim accrued no later than 1998. View "Deibel v. Hoeg" on Justia Law

Medicredit sent Markakos a letter seeking to collect $1,830.56 on behalf of a creditor identified as “Northwest Community 2NDS” for medical services. Markakos’s lawyer sent Medicredit a letter disputing the debt (because the medical services were allegedly inadequate). Medicredit then sent a response that listed a different amount owed: $407.00. Markakos sued Medicredit for allegedly violating the Fair Debt Collection Practices Act, 15 U.S.C. 1692g(a)(1)–(2), by sending letters to her that stated inconsistent debt amounts and that unclearly identified her creditor as “Northwest Community 2NDS”—which is not the name of any legal entity in Illinois.The Seventh Circuit affirmed the dismissal of the case without prejudice. Markakos lacks standing to sue Medicredit under the Act because she did not allege that the deficient information harmed her in any way. She admits that she properly disputed her debt and never overpaid. Markakos’s only other alleged injury is that she was confused and aggravated by Medicredit’s letter. Winning or losing this suit would not change Markakos’s prospects; if Markakos lost, she would continue disputing her debt based on the inadequacy of the services and if she won, she would do the same. Not a penny would change hands, and no word or deed would be rescinded. View "Markakos v. Medicredit, Inc." on Justia Law

After an allegation that Bush had choked his son, the Illinois Department of Children and Family Services (DCFS) began an investigation. Bush’s then-wife, Erika, obtained a court order suspending Bush’s parenting time. Bush filed a federal lawsuit under 42 U.S.C. 1983 on behalf of himself and his children, alleging violations of their First and Fourteenth Amendment rights and claiming that DCFS employees’ conduct set off events culminating in a state court order infringing on his and his kids’ right to familial association.The district court dismissed, finding that Bush and his children lacked standing to bring a constitutional challenge to the Illinois Marriage and Dissolution of Marriage Act and that the Younger abstention doctrine barred the court from ruling on the remaining constitutional claims. The Seventh Circuit affirmed.. Bush failed to allege facts sufficient to establish standing for his First Amendment claim. Adhering to principles of equity, comity, and federalism, the court concluded that the district court was right to abstain from exercising jurisdiction over the remaining claims. View "J.B. v. Woodard" on Justia Law