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

The Hazeltons sought sanctions against the University for collecting an educational debt after their debts were discharged in a Chapter 7 bankruptcy. The district court reversed a bankruptcy court holding that the debt was nondischargeable and remanded. The Seventh Circuit dismissed an appeal, citing its jurisdiction in bankruptcy cases under 28 U.S.C. 158(d)(1), which is limited to orders that resolve “discrete disputes” within the bankruptcy case. The district court did not resolve the dispute regarding sanctions but decided a subsidiary legal issue. View "Hazelton v. Board of Regents for the University of Wisconsin System" on Justia Law

Mussat, an Illinois professional services corporation, received unsolicited faxes from IQVIA, a Delaware corporation with its headquarters in Pennsylvania. These faxes failed to include the required opt-out notice. Mussat brought a putative class action in Illinois under the Telephone Consumer Protection Act, 47 U.S.C. 227, on behalf of itself and all persons in the country who had received similar junk faxes from IQVIA in the four previous years. The district court granted IQVIA's motion to strike the class definition, reasoning that under the Supreme Court’s 2017 “Bristol-Myers” holding, not just the named plaintiff, but also the unnamed class members, each had to show minimum contacts between the defendant and the forum state. Because IQVIA is not subject to general jurisdiction in Illinois, the court turned to specific jurisdiction and found that it had no jurisdiction over the claims of parties who were harmed outside of Illinois.The Seventh Circuit reversed, holding that Bristol-Myers does not apply to the case of a nationwide class action filed in federal court under a federal statute. Bristol-Myers did not reach the question of whether, in a Rule 23 class action, each unnamed class member must separately establish specific personal jurisdiction over a defendant. In such an action the lead plaintiffs earn the right to represent the interests of absent class members by satisfying Rule 23(a) and Rule 23(b) criteria. Absent class members are not full parties to the case for many purposes. View "Mussat v. IQVIA, Inc." on Justia Law

Dolin was prescribed Paxil, the brand-name version of the drug paroxetine, to treat his depression. The prescription was filled with a generic paroxetine product. Six days later, Dolin died by suicide. Federal law preempted an "inadequate labeling" state-law claim against the generic manufacturer. Mrs. Dolin sued GSK, the manufacturer of brand-name Paxil, arguing that GSK was responsible for the labeling for all paroxetine, no matter who made and sold it, and had negligently omitted an adult suicide risk. The Seventh Circuit reversed her jury verdict, based on preemption, citing the complex regulation of drug labels and of Paxil/paroxetine’s label in particular. GSK had attempted to change the Paxil label in 2007 to add an adult suicide warning. The FDA rejected that change. The court concluded that GSK lacked new information after 2007 that would have allowed it to add an adult-suicidality warning under the existing regulations.Eight days after denying Dolin certiorari, the Supreme Court decided another case, further explaining the “clear evidence” standard for impossibility preemption for prescription drug labels. Dolin filed an unsuccessful motion under FRCP 60(b)(6), arguing that the 2018 judgment should be set aside based on a change in law so that GSK could not establish its defense of impossibility preemption. The Seventh Circuit affirmed and did not impose sanctions. The Supreme Court provided important guidance but did not break new ground that would change the result in Dolin’s case. Her motion was not frivolous. View "Dolin v. GlaxoSmithKline LLC" on Justia Law

Donald and Lauretta Bauer purchased land from Donald’s parents and executed promissory notes and a mortgage. When Donald’s parents died, their interest in the notes transferred to Donald's siblings, who sought foreclosure. A state court entered a foreclosure judgment and a deficiency judgment. No judicial sale occurred. The Bauers tried to redeem the property by satisfying the judgment. The foreclosure plaintiffs issued citations to discover assets and sought additional interest. The state court found that the Bauers owed an additional $33,782.96 in interest. The Bauers paid; the plaintiffs filed a satisfaction of judgment. The Bauers then sued, alleging tampering with evidence and abuse of process by seeking to extort money through the issuance of citations to discover assets. The state appellate court upheld the dismissal of the case.The Bauers filed a federal suit, 42 U.S.C. 1983, alleging that the defendants, including the state-court judge, conspired to introduce a forged document into evidence during the foreclosure trial and that the judge and the clerk allowed the plaintiffs to issue baseless citations to discover assets. The district court dismissed the case under the Rooker-Feldman doctrine, which precludes federal district-court jurisdiction “over cases brought by state-court losers challenging state-court judgments rendered before the district court proceedings commenced.” The Seventh Circuit affirmed, rejecting the Bauers’ argument that they did not seek to set aside the state court’s order or judgment but only mean to challenge the “collection practices” of the defendants and their collusion. Any finding in favor of the Bauers would require the federal court to contradict the state court’s orders. View "Bauer v. Koester" on Justia Law

Defendants, commodities futures investors, maintained trading accounts with FCStone, a clearing firm that handled the confirmation, settlement, and delivery of transactions. In 2018, extraordinary volatility in the natural gas market wiped out the defendants’ account balances with FCStone, leaving some defendants in debt. The defendants alleged Commodity Exchange Act violations against FCStone and initiated arbitration proceedings before the Financial Industry Regulatory Authority (FINRA). FCStone sought a declaratory judgment, claiming the parties must arbitrate their disputes before the National Futures Association (NFA), and that FINRA lacks jurisdiction over the underlying disputes. The district court ruled for FCStone, ordered arbitration and designated an arbitration forum, then stayed the case to address related issues, including the arbitration venue. The Seventh Circuit dismissed an appeal for lack of jurisdiction under 28 U.S.C. 1291 or the Federal Arbitration Act, ” 9 U.S.C. 16(a)(3). The district court’s decisions were non-final and no exception to the rule of finality applies. The court rejected an argument that the order amounted to an injunction prohibiting FINRA arbitration. A pro‐arbitration decision, coupled with a stay (rather than a dismissal) of the suit, is not appealable. The court noted that the district court did not decide whether the parties’ arbitration agreements relinquished defendants’ purported rights to FINRA arbitration. View "INTL FCStone Financial Inc. v. Farmer" on Justia Law

Under the Medicaid program, 42 U.S.C. 1396, states must ensure that certain medical assistance is available to all eligible beneficiaries. Illinois administers its Medicaid program through HFS. For managed care programs, HFS contracts with Medicaid managed care organizations (MCOs), which a flat monthly fee per patient. The MCOs pay providers for services rendered to Medicaid beneficiaries. Plaintiffs, consultants who offer business services to Illinois nursing homes and supportive living facilities, sued on behalf of a class of nursing home residents entitled to Medicaid benefits, alleging violations of Title XIX of the Social Security Act, the Americans with Disabilities Act, the Rehabilitation Act, and the Due Process and Equal Protection Clauses. They alleged that the MCOs failed to process timely payments for claims submitted by nursing homes—the plaintiff‐consultants’ clients—to the MCOs, putting the resident‐beneficiaries at risk of being discharged from the facilities. The Seventh Circuit affirmed the dismissal of the case for lack of subject matter jurisdiction. The regulation cited by plaintiffs does not permit authorized representatives to bring civil lawsuits on behalf of Medicaid beneficiaries so the plaintiffs lacked standing. The residents would be unlikely to benefit if the plaintiffs won; they apparently filed suit in an effort to push the state to pay outstanding bills owed to the consultants’ clients. View "Bria Health Services, LLC v. Eagleson" on Justia Law

Curry, the founder of “Get Diesel Nutrition,” has paid for advertising for his products, including "Diesel Test," in national fitness magazines since 2002. In 2016, the defendants began selling a sports nutritional supplement, "Diesel Test Red Series." Like Curry’s product, the defendants’ product comes in red and white packaging with right-slanted all-caps typeface bearing the words “Diesel Test.” Curry alleges that he received messages indicating that customers were confused. The defendants concocted a fake ESPN webpage touting their product and conducted all their marketing online. In about seven months, they received more than $1.6 million in gross sales. At least 767 sales were to consumers in Illinois. After Curry demanded that the defendants cease and desist, both parties filed trademark applications for "Diesel Test." The Patent Office suspended both applications. Curry filed suit, alleging violation of the Illinois Consumer Fraud and Deceptive Practices Act, violations of the Lanham Act, 15 U.S.C. 1125, violation of the Anti-Cybersquatting Consumer Protection Act, filing a fraudulent trademark application, and violation of common law trademark protections. The district court dismissed for lack of personal jurisdiction.The Seventh Circuit reversed. Revolution’s activity can be characterized as purposefully directed at Illinois, the forum state, and related to Curry's claims. Physical presence is not necessary for a defendant to have sufficient minimum contacts with a forum state. Illinois has a strong interest in providing a forum for its residents to seek redress for harms suffered within the state by an out-of-state actor. View "Curry v. Revolution Laboratories, LLC" on Justia Law

In consolidated appeals, the Seventh Circuit gave the appellants seven days to file amended jurisdictional statements. The court acknowledged its “reputation as a jurisdictional hawk.” In each of the cases, a magistrate judge issued the final judgment from which the appeal has been taken. Circuit Rule 28(a)(2)(v) requires an appellant in such a case to include in its jurisdictional statement information about the magistrate judge’s involvement and also “the dates on which each party consented in writing to the entry of final judgment by the magistrate judge.” The court cited Circuit Rule 28(a)(2)(v), and the Seventh Circuit Practitioner’s Handbook for Appeals (2019 ed.), which explicitly refers to the failure to provide dates of consent to proceed before a magistrate judge as one of the recurring problems that the court encounters when performing jurisdictional screening. View "Lowrey v. Tilden" on Justia Law

Before 2008, Cook County ordinances required the Assessor to assess single-family residential property at 16%, commercial property at 38%, and industrial property at 36% of the market value. In 2000-2008, the Assessor actually assessed most property at rates significantly lower than the ordinance rates. In 2008, the Assessor proposed to “recalibrate” the system. The plaintiffs claim that their assessment rates may have been lawful but were significantly higher than the actual rates for most other property owners and that they paid millions of dollars more in taxes in 2000-2008 than they would have if they were assessed at the de facto rates. The taxpayers exhausted their remedies with the Board of Review, then filed suit in state court, citing the Equal Protection Clause, Illinois statutory law and the Illinois Constitution. Years later, their state suit remains in discovery.Claiming that Illinois law limits whom they can name as a defendant, what evidence they can present, and what arguments they can raise, the taxpayers filed suit in federal district court, which held that the Tax Injunction Act barred the suit. The Act provides that district courts may not “enjoin, suspend or restrain the assessment, levy or collection of any tax under State law where a plain, speedy and efficient remedy may be had in the courts of such State,” 28 U.S.C. 1341. The Seventh Circuit reversed, noting the County’s concession that Illinois’s tax-objection procedures do not allow the taxpayers to raise their constitutional claims in state court. This is the “rare case in which taxpayers lack an adequate state-court remedy.” View "A.F. Moore & Associates, Inc. v. Pappas" on Justia Law

Censke sought to bring a Federal Tort Claims Act (FTCA) suit for injuries he says he suffered at the hands of Indiana federal prison guards. The FTCA required Censke to give notice in writing to the Bureau of Prisons within two years of the incident, 28 U.S.C. 2401(b), by sending form SF-95 to the regional office in which the injury happened. The Bureau considers claims filed when first received by any of its offices. Censke moved prisons six times in the two years following the alleged incident and lost access to his legal materials. He contends that the prison staff ignored his requests for an SF-95 form. When he got the form, he was in Kentucky. Censke asked the staff for the address of the Bureau’s North Central Regional Office. He says they refused to help. Nine days before the end of the limitations period, Censke placed his SF-95 form in the outgoing mail, addressed to the Bureau's Central Office in Washington, D.C. The Bureau stamped it as received at the North Central Regional Office on February 16, 2016—over two months after Censke put it in the mail. The Bureau denied the claim on the merits, without mentioning timeliness. Censke filed suit under the FTCA. The court concluded that the mailbox rules apply and rejected Censke’s arguments for equitable tolling and delayed accrual. The Seventh Circuit reversed. The prison-mailbox rule applies to administrative filings under the FTCA. View "Censke v. United States" on Justia Law