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

An executive at a litigation funding company, Signal, resigned to start a competing business and sought legal advice from Signal’s outside counsel, Sugar Felsenthal Grais & Helsinger LLP. Signal sued the law firm and several of its attorneys, alleging legal malpractice, breach of contract, breach of fiduciary duty, and fraud. The district court dismissed some claims and granted summary judgment in favor of the defendants on the remaining claims. Signal appealed these rulings.The United States District Court for the Northern District of Illinois dismissed Signal’s breach of fiduciary duty claim and part of its fraud claim, allowing the legal malpractice, breach of contract, and fraudulent misrepresentation claims to proceed. The court also struck Signal’s request for punitive damages. During discovery, the court denied Signal’s motion to compel production of a memorandum prepared by one of the defendants. The district court later granted summary judgment in favor of the defendants on all remaining claims.The United States Court of Appeals for the Seventh Circuit reviewed the case and affirmed the district court’s rulings. The appellate court agreed that Signal failed to establish proximate cause and damages for its legal malpractice and breach of contract claims. The court also found that Signal waived its challenge to the summary judgment ruling on the fraudulent misrepresentation claim by not adequately addressing it on appeal. Additionally, the court upheld the district court’s decision to deny Signal’s motion to compel production of the memorandum, as Signal did not demonstrate that the document influenced the witness’s testimony. The appellate court concluded that the district court’s dismissal of the fraudulent concealment theory was harmless error and denied Signal’s motion to certify a question to the Illinois Supreme Court as moot. View "Signal Funding, LLC v Sugar Felsenthal Grais & Helsinger LLP" on Justia Law

George and Maria Dernis borrowed money from Premier Bank, which was involved in fraudulent lending practices. The loans were secured by mortgages on their personal real estate. After Premier Bank collapsed, the FDIC was appointed as receiver and sold some of the bank's loans, including the Dernises' loans, to Amos Financial in 2014. The Dernises claimed that the FDIC was aware of the fraudulent nature of the loans and failed to take remedial action. They filed a lawsuit against the FDIC, which was dismissed by the district court. They then filed an amended complaint against the United States under the FTCA, alleging various torts based on the FDIC's conduct.The United States District Court for the Northern District of Illinois dismissed the amended complaint, determining that most of the claims were not timely exhausted under 28 U.S.C. § 2401(b). The court also found that the sole timely claim was barred by the FTCA’s intentional torts exception under 28 U.S.C. § 2680(h). The court dismissed the action with prejudice and entered final judgment.The United States Court of Appeals for the Seventh Circuit reviewed the case and affirmed the district court's decision. The appellate court agreed that the Dernises failed to timely exhaust their administrative remedies for most of their claims. The court also held that the only timely claim was barred by the FTCA’s intentional torts exception, as it involved misrepresentation, deceit, and interference with contract rights. The court rejected the Dernises' argument that the FDIC’s "sue-and-be-sued" clause provided a broader waiver of sovereign immunity, noting that the United States was the sole defendant and the FTCA provided the exclusive remedy for tort claims against the United States. View "Dernis v United States" on Justia Law

Plaintiffs Republic Technologies (NA), LLC and Republic Tobacco, L.P. manufacture and market OCB brand organic hemp rolling papers, while defendant BBK Tobacco & Foods, LLP (HBI) markets RAW brand rolling papers. Republic sued HBI in 2016 for a declaration that OCB’s trade dress did not infringe RAW’s trade dress and later added false advertising claims. HBI counterclaimed, alleging that OCB’s trade dress infringed RAW’s trade dress. A jury trial in 2021 resulted in a mixed verdict, and the district court issued a permanent injunction against some of HBI’s advertising practices.The United States District Court for the Northern District of Illinois found HBI liable under Illinois law for false advertising but not under the federal Lanham Act. The jury also found that OCB’s trade dress for its 99-cent promotional pack infringed RAW’s trade dress, but not the full-priced pack. Republic’s motions for judgment as a matter of law and for a new trial were denied.The United States Court of Appeals for the Seventh Circuit reviewed the case. The court affirmed the district court’s decision, holding that the district court did not abuse its discretion in responding to the jury’s question about the definition of “consumer” and in denying Republic’s motion for a new trial. The court also upheld the jury’s finding of trade dress infringement, noting that sufficient evidence supported the jury’s verdict. Additionally, the court affirmed the district court’s permanent injunction, rejecting HBI’s arguments that the injunction was vague, overbroad, and improperly applied nationwide. The court concluded that the injunction was appropriately tailored to provide complete relief to Republic. View "Republic Technologies (NA), LLC v BBK Tobacco & Foods, LLP" on Justia Law

Matthew Cargo, a federal prisoner, attempted to file a notice of appeal after being sentenced on July 20, 2020. He had until August 3, 2020, to file the notice, with a possible extension to September 2, 2020. Cargo, while temporarily held in an Oklahoma jail, prepared the notice on July 22, 2020, and handed it to a correctional officer. However, he incorrectly addressed the envelope, leading to its return by the U.S. Postal Service as undeliverable. Cargo did not learn of the error until November 2024, after which he promptly resent the notice.The United States District Court for the Northern District of Illinois received the notice in November 2024, four years after the deadline. The government moved to dismiss the appeal as untimely, and Cargo argued that he had complied with the prison-mailbox rule, which deems a notice of appeal filed when handed to prison officials for mailing.The United States Court of Appeals for the Seventh Circuit reviewed the case. The court held that Cargo's addressing error precluded him from benefiting from the prison-mailbox rule. The rule requires that the notice be properly addressed to ensure it reaches the district court. Since Cargo's notice was returned as undeliverable, it did not meet the requirements of the rule. Consequently, the court dismissed Cargo's appeal as untimely, emphasizing that proper addressing is crucial for the prison-mailbox rule to apply. The court also noted that Cargo could have avoided this outcome by instructing his counsel to file the notice of appeal. View "USA v Cargo" on Justia Law

Jacques Rivera, after being released from over 20 years in prison for a wrongful murder conviction, sued the City of Chicago and several police officers under 42 U.S.C. §1983 for civil rights violations. A jury awarded him over $17 million, and his attorneys sought more than $6 million in fees and costs. The case was settled for $18.75 million, including at least $3.75 million for attorneys' fees and costs. Chicago, which had an insurance policy with Starstone Insurance SE covering liabilities between $15 and $20 million, sought indemnity for the $3.75 million. Starstone refused, claiming their policy only covered damages, not attorneys' fees and costs, and filed for a declaratory judgment.The United States District Court for the Northern District of Illinois ruled in favor of Chicago, determining that the insurance policy covered the entire $18.75 million settlement as an "ultimate net loss" that Chicago was legally obligated to pay. Starstone appealed this decision.The United States Court of Appeals for the Seventh Circuit reviewed the case. The court first addressed whether Starstone, a Societas Europaea (SE) based in Liechtenstein, qualified as a "corporation" under 28 U.S.C. §1332 for diversity jurisdiction purposes and concluded that it did. On the merits, the court found that the insurance policy's language covered the entire settlement amount, including attorneys' fees and costs, as part of the "ultimate net loss" Chicago was legally obligated to pay. The court affirmed the district court's decision, holding that the policy's terms included indemnity for attorneys' fees and costs awarded under statutory provisions. View "Starstone Insurance SE v City of Chicago" on Justia Law

John Nawara, a former correctional officer at Cook County Jail, had several altercations with other county employees. As a result, the Cook County Sheriff's Office required him to undergo a fitness-for-duty examination and sign medical information release forms. Nawara initially resisted but eventually complied. Before doing so, he sued Cook County and Sheriff Thomas Dart, alleging that the examination requirement and inquiry into his mental health violated § 12112(d)(4) of the Americans with Disabilities Act (ADA).The United States District Court for the Northern District of Illinois found in favor of Nawara, but the jury awarded him zero damages. Nawara filed a post-trial motion requesting back pay, lost pension benefits, and restoration of his seniority. The court granted the restoration of seniority but denied the request for back pay, concluding that the violation of § 12112(d)(4) could not support an award of back pay. Nawara appealed the denial of back pay, and the Sheriff cross-appealed the restoration of seniority.The United States Court of Appeals for the Seventh Circuit reviewed the case. The court affirmed the district court's decision to restore Nawara's seniority, finding that it could still benefit him in his current role as a police officer within the Sheriff's Office. However, the court reversed the district court's denial of back pay. The Seventh Circuit held that a violation of § 12112(d)(4) of the ADA constitutes discrimination on the basis of disability, thus entitling Nawara to request back pay. The case was remanded for further proceedings consistent with this opinion. View "Nawara v Cook County Municipality" on Justia Law

Susan Kinder, a white woman, was employed by the Marion County Prosecutor’s Office (MCPO) and alleged racial discrimination when she was reassigned to a new role. She claimed violations of Title VII and the Equal Protection Clause. Kinder had conflicts with a black colleague, Lydia Richardson, who accused her of making racially insensitive remarks. An investigation found the animosity was mutual. The prosecutor decided to reassign both employees, but Kinder viewed her new role as a demotion.The Equal Employment Opportunity Commission (EEOC) issued a right-to-sue letter on April 28, 2022, but Kinder’s counsel could not access it until July 6, 2022. Kinder filed her complaint on October 4, 2022, alleging Title VII and Equal Protection Clause violations. The MCPO moved for summary judgment, arguing the Title VII claim was untimely and that the office was not a suable entity under 42 U.S.C. § 1983. The United States District Court for the Southern District of Indiana granted summary judgment to the MCPO, finding the Title VII claim was filed outside the 90-day window and that the MCPO was an arm of the state, immune from § 1983 claims.The United States Court of Appeals for the Seventh Circuit affirmed the district court’s decision. The court held that the 90-day period for filing the Title VII claim began when Kinder’s counsel was notified on June 15, 2022, that the right-to-sue letter was available, making the October 4 filing untimely. The court also held that the MCPO is an arm of the state and not a suable “person” under § 1983, as the office is financially interdependent with the state and enjoys state indemnification for employment-related actions. View "Kinder v Marion County Prosecutor's Office" on Justia Law

Valerie Thomas received a notice claiming she owed $187, which she disputed. Resurgent Capital Services notified TransUnion about the debt before opening Thomas's letter and reported the dispute 29 days later. Thomas sued under the Fair Debt Collection Practices Act, seeking statutory damages for the delay. A jury awarded her $250. The clerk delayed entering the judgment, which was eventually entered on June 11, 2024. Resurgent filed a notice of appeal four days earlier, narrowly avoiding missing the appeal deadline.The United States District Court for the Northern District of Illinois concluded that Resurgent should have notified TransUnion earlier. Resurgent appealed, arguing that Thomas lacked standing because the delay did not injure her. District Judge Bucklo initially ruled that Thomas was injured as a matter of law, referencing Ewing v. Med-1 Solutions, LLC, which treated the absence of a dispute notice as defamation. However, the court noted that injury must be proven and not assumed.The United States Court of Appeals for the Seventh Circuit reviewed the case. It found that Thomas did not provide evidence of injury before or during the trial. She did not attempt to show that her credit score or insurance costs were affected by the delay. Judge Bucklo had precluded Thomas from introducing evidence of actual injury, and Thomas did not challenge this ruling or seek a new trial. The appellate court held that Thomas lacked standing to sue due to the absence of evidence showing injury. Consequently, the judgment of the district court was reversed, and the case was remanded with instructions to dismiss for lack of a justiciable controversy. View "Thomas v LVNV Funding, LLC" on Justia Law

Suzanne Wolf suffered multiple pelvic fractures in a car accident caused by an underinsured motorist. After receiving $100,000 from the at-fault driver’s insurance, she filed claims for underinsured motorist benefits with her personal automobile insurer and her employer’s general commercial liability insurer, Riverport Insurance Company. Wolf settled with her personal insurer for $150,000 and eventually settled with Riverport after four years of negotiations and arbitration, which awarded her $905,000. Riverport paid the award, less the amounts received from the other insurers.Wolf filed a lawsuit against Riverport in the Circuit Court of Cook County, alleging unreasonable delay in payment under section 155 of the Illinois Insurance Code. Riverport removed the case to the United States District Court for the Northern District of Illinois, invoking diversity jurisdiction. The district court granted Riverport’s motion for judgment on the pleadings under Rule 12(c) of the Federal Rules of Civil Procedure, finding that Wolf lacked a viable legal theory to support her claim. The court also denied Wolf’s discovery request.The United States Court of Appeals for the Seventh Circuit reviewed the case. The court held that the insurance policy did not impose a duty on Riverport to investigate and settle Wolf’s claim in good faith. The court found that the policy’s provision granting Riverport discretion to investigate and settle claims applied only to defending insureds against third-party claims, not to first-party claims by insureds against Riverport. Consequently, Wolf’s breach-of-contract theory failed, and the district court’s judgment was affirmed. The appellate court also upheld the district court’s discovery decision, as Wolf could not show actual and substantial prejudice from the denial of additional discovery. View "Wolf v. Riverport Insurance Company" on Justia Law

In December 2015, sixteen-year-old Isaiah Taylor was stopped by Milwaukee police officers Justin Schwarzhuber and Jasen Rydzewski while running through his neighborhood to deliver a turkey. The officers frisked him, searched his bag, and detained him in their police car to check for outstanding warrants and recent robberies. Taylor later sued the officers under 42 U.S.C. § 1983, claiming an unreasonable search and seizure in violation of the Fourth Amendment and racial profiling in violation of the Equal Protection Clause of the Fourteenth Amendment.The United States District Court for the Eastern District of Wisconsin granted qualified immunity and summary judgment to the officers on Taylor’s Fourteenth Amendment claim and on the Fourth Amendment claim regarding the initial stop and frisk. However, the court denied qualified immunity on the issue of Taylor’s continued detention, sending it to trial. The jury found the officers not liable, and the court denied Taylor’s motion for post-trial relief under Federal Rule of Civil Procedure 59.The United States Court of Appeals for the Seventh Circuit reviewed the case. The court affirmed the grant of summary judgment on Taylor’s Fourteenth Amendment claim, finding insufficient evidence of racial profiling. However, it vacated the summary judgment on the Fourth Amendment claims related to the initial stop and frisk, concluding that the officers lacked reasonable suspicion for the stop and frisk based on clearly established law. The court also vacated the jury verdict on the continued detention issue, as it was intertwined with the initial stop's constitutionality, and remanded the case for a new trial on all Fourth Amendment claims. View "Taylor v. Schwarzhuber" on Justia Law