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

Surviving Mustang fighter planes are collectors’ items. In 1965 Vartanian bought a Mustang, serial number 44-74543 and kept it in a Fulton County New York hangar. In 1985 Vartanian's representative could not find it. Vartanian suspected Martin, who had promised to restore the plane. Vartanian’s lawyer unsuccessfully demanded that Martin return the plane. Vartanian complained to the FAA, the FBI, and local police. Martin denied taking Vartanian’s plane. Martin later registered with the FAA a Mustang, serial number 44-63655. Martin asserts that it was cobbled together using parts from a plane that crashed in Nicaragua plus components acquired from several sources. In 1998 Martin sold 44-63655 to Greenhill. Vartanian learned about this transaction in 2002 or 2003 by reading a magazine article that incorrectly identified it as 44-74543. Vartanian hired another lawyer, who died before filing suit. Vartanian did not follow up until after learning in 2013 that there were irregularities in the serial numbers of several of Martin’s planes. Vartanian demanded that Greenhill return the plane. Greenhill sought a declaratory judgment of ownership. Vartanian filed counterclaims. The Seventh Circuit affirmed that the counterclaims were untimely and that the aircraft is free of Vartanian's claim. Although federal law provides the registration system, state law supplies the rules for determining ownership, 49 U.S.C. 44108(c)(1). For conversion claims, Illinois law establishes a five-year limitations period that starts when the injured party “knows or reasonably should know” of the injury and its cause. Vartanian knew in 1985 that his Mustang had vanished; he suspected Martin immediately and knew long ago what serial number Martin was using. Even if Illinois would not apply a statute of limitations, the doctrine of laches would remain. View "Greenhill v. Vartanian" on Justia Law

Plaintiffs purchased land near a former GE manufacturing plant that had operated in Morrison, Illinois for 60 years. The plant leached toxic chemicals that seeped into the groundwater. The Illinois Environmental Protection Agency filed suit under state law against GE in 2004 and has been working with the company since then to investigate and develop a plan to address the contamination. In 2013, plaintiffs filed suit under the citizen suit provision of the Resource Conservation and Recovery Act, 42 U.S.C. 6901, seeking a mandatory injunction ordering GE to conduct additional investigation into the scope of the contamination and ordering the company to remove the contamination. The district court found the company liable for the contamination on summary judgment but denied injunctive relief because, despite the many opportunities, plaintiffs did not offer evidence establishing a need for injunctive relief beyond what the company had already done in the state action. The Seventh Circuit affirmed. The district court had the discretion to award injunctive relief under the RCRA but was not required to order relief after a finding of liability. Plaintiffs did not carry their burden to establish mandatory injunctive relief was necessary under the RCRA. View "Conway v. General Electric Co." on Justia Law

Anderson and Kaiser jointly borrowed about $700,000 from the Bank, secured by a mortgage. They did not pay; the Bank filed a foreclosure action in state court. That action was put on hold when Anderson commenced a bankruptcy proceeding. The Bank obtained relief from the automatic stay, 11 U.S.C. 362, to proceed with the foreclosure litigation. In state court, the Bank obtained approval to put the property up for auction. The sale was confirmed. The Bank then obtained a state court deficiency judgment against Kaiser; it did not appeal the omission of a deficiency judgment against Anderson. The state litigation ended in 2015. In the bankruptcy court, the Bank made a claim against Anderson for the same $650,000 shortfall that the state judge had awarded against Kaiser. On interlocutory appeal, the district court held that the absence of a deficiency judgment against Anderson in the state case blocks any further proceedings against him related to this loan. The Seventh Circuit affirmed, citing claim preclusion. The court rejected the Bank’s argument that the automatic bankruptcy stay deprived the state court of “jurisdiction” to make any decision at all, except to the extent allowed by the bankruptcy judge. View "BMO Harris Bank N.A. v. Anderson" on Justia Law

Telecommunications providers Peerless and Verizon entered into an Agreement, providing for lowered rates for certain switching services. If a contractual rate did not apply, Peerless billed Verizon its tariff rates, as filed with the FCC and state public utility commissions. The relationship failed. Verizon withheld payments. Peerless sued Verizon, alleging 12 counts, including breach of the Agreement and breach of tariffs. Verizon alleged that Peerless was an access stimulator and failed to reduce its rates as required by the FCC and that Peerless was billing certain services at inappropriate rates. The district court dismissed four counts and granted Verizon summary judgment on Count X. The district court referred the access stimulation and other counterclaim issues to the FCC under the primary-jurisdiction doctrine and stayed Verizon’s counterclaims. It nonetheless granted Peerless summary judgment on its breach-of-tariff claims, reasoning that Verizon’s defense could be adjudicated separately from the collection action; entered a partial final judgment on the breach-of-tariff claims pursuant to Federal Rule of Civil Procedure 54(b), finding that it would be “unjust” to make Peerless wait to collect the unpaid bills; and granted Rule 54(b) partial final judgment on claims regarding the breach of the Agreement, reasoning that Verizon had not disputed the breach, only the amount owed. The Seventh Circuit vacated in part. Rule 54(b) partial final judgment was improper, given the significant factual overlap with pending claims. A genuine issue of fact persists with respec breach-of-contract claims. View "Peerless Network, Inc. v. MCI Communications Services, Inc." on Justia Law

The plaintiffs, used car dealerships, were solicited by the defendant to enter into a “Demand Promissory Note and Security Agreement.” The defendant would issue a line of credit for the plaintiffs to access in purchasing used vehicles at automobile auctions. The plaintiffs claim defendant did not pay the auction house at the time that possession was delivered put paid only after it received the title to the vehicles purchased, which could take several weeks, but charged interest from the date of the initial purchase. The plaintiffs filed suit and sought class certification to sue on behalf of all other dealers who were subject to the same Agreement. The district court granted Rule 23(b)(3) class certification as to the breach of contract and substantive RICO claims. Weeks later, defendant filed a Motion to Reconsider, arguing that the plaintiffs had asserted in summary judgment briefing that the Agreements are ambiguous and that under such a theory courts must resort to extrinsic evidence on a plaintiff-by-plaintiff basis to determine intent. The court rescinded class certification. The Seventh Circuit vacated. Neither the categorization of the contract as ambiguous nor the prospect of extrinsic evidence necessarily imperils class status. The Agreement at issue is a standard form contract; there was no claim that its language has different meanings for different signatories. View "Red Barn Motors, Inc. v. NextGear Capital, Inc." on Justia Law

Reed alleged that she suffered discrimination on the basis of her disabilities while she was a patient at Columbia in March 2012. She contends that the hospital failed to accommodate her disabilities by deliberately withholding from her a device she used to speak and discriminated against her by putting her in a “seclusion” room to punish her, in violation of the Americans with Disabilities Act (ADA), 42 U.S.C. 12181, the Rehabilitation Act, 29 U.S.C. 794, and the Wisconsin Mental Health Act. The district court granted the hospital summary judgment, holding that the hospital did not need to comply with Title III of the ADA because it fell within the Act’s exemption for entities controlled by religious organizations and that the hospital’s alleged mistreatment of Reed was not premised solely on Reed’s disability. The Seventh Circuit reversed. The hospital raised its religious exemption affirmative defense to the ADA claims for the first time after discovery, in its motion for summary judgment; it was an abuse of discretion to excuse the hospital’s failure to raise this affirmative defense earlier. Reed’s Rehabilitation Act claims depend on disputed facts. View "Reed v. Columbia St. Mary's Hospital" on Justia Law

JCB, an Indiana state-chartered bank, had an agreement with INVEST, a registered broker-dealer, to offer securities to JCB customers. In 2017, JCB assigned DuSablon to assist in identifying and establishing an investment business with a new third-party broker-dealer. DuSablon failed to do so and abruptly resigned. JCB learned that DuSablon had transferred customers’ accounts from INVEST into his own name and had started a competing business. JCB sought a preliminary injunction, asserting violations of the Indiana Uniform Trade Secrets Act, breach of contract, breach of fiduciary duty, tortious interference, unfair competition, civil conversion, and computer trespass. DuSablon moved to dismiss, arguing that JCB lacked standing and that Financial Industry Regulatory Authority (FINRA) rules barred the suit; he removed the case, asserting exclusive federal jurisdiction under 15 U.S.C. 78aa and the Securities and Exchange Act. Although JCB did not plead a federal claim, DuSablon contended that JCB’s response to his motion to dismiss “raises a federal question as all of [JCB’s] claims ... rest upon the legality of direct participation in the securities industry which is ... regulated by the [Securities] Act.” The district court remanded,, concluding that it lacked jurisdiction and that removal was untimely, ordering DuSablon to pay JCB costs and fees of $9,035.61 under 28 U.S.C. 1447(c). The Seventh Circuit dismissed an appeal. DuSablon lacked an objectively reasonable basis to remove the case to federal court. View "Jackson County Bank v. DuSablon" on Justia Law

The Seventh Circuit previously remanded for a determination of whether May had submitted a notice of appeal on or before August 10, 2015, in compliance with Federal Rule of Appellate Procedure 4(c). The district court allowed discovery, held a hearing, heard the testimony of two witnesses and examined seven exhibits, then held that May had not carried the burden of establishing that he mailed his notice of appeal in a timely fashion. The court determined that May’s testimony lacked credibility and that the remaining evidence established that the notice of appeal was not filed until sometime around October 15, 2015. The Seventh Circuit then dismissed his appeal for lack of jurisdiction. Statutory timelines for appeal are jurisdictional and cannot be waived, forfeited, or excused. View "May v. Mahone" on Justia Law

In 2007, the Illinois Environmental Protection Agency (IEPA) brought charges before the Pollution Control Board against EOR Energy and AET Environmental under the Illinois Environmental Protection Act, 415 ILCS 5/1–5/58, for transporting hazardous‐waste acid into Illinois, storing that waste, and then injecting it into EOR’s industrial wells. EOR unsuccessfully argued in state courts that the IEPA and the Board did not have jurisdiction over EOR’s acid dumping. EOR asserted that it was not injecting “waste” into its wells but was merely injecting an acid that was used to treat the wells and aid in petroleum extraction so that the Illinois Department of Natural Resources had exclusive jurisdiction under the Illinois Oil and Gas Act, 225 ILCS 725/1. EOR then sought a federal declaratory judgment. The district court dismissed the case, citing the Eleventh Amendment and issue preclusion. The Seventh Circuit affirmed, “emphatically” rejecting the “undisguised attempt to execute an end‐run around the state court’s decision.” View "EOR Energy, LLC v. Illinois Environmental Protection Agency" on Justia Law

Allstate investigated suspicious trading on its equity desk and unearthed email evidence that portfolio managers were timing trades to inflate their bonuses at the expense of portfolios, including pension funds to which Allstate owed fiduciary duties. Allstate retained attorneys, who hired consultants. The consultants used an algorithm to estimate a potential adverse impact of $91 million. Allstate poured $91 million into the portfolios. Allstate fired four portfolio managers. Allstate's 2009 Form 10-K and an internal memo explained these events, without mentioning the fired portfolio managers. The former employees sued, alleging defamation and that Allstate violated 15 U.S.C. 1681a(y)(2), the Fair Credit Reporting Act, by failing to give them a summary of the attorneys' findings after they were fired. A jury awarded $27 million in damages. The judge added punitive damages and attorney’s fees. The Seventh Circuit vacated and subsequently ordered dismissal. The 10-K and internal memo were not defamatory per se and are actionable (if at all) only on a theory of defamation per quod, which requires proof of special damages causally connected to the publication. The plaintiffs testified that they could not find comparable work after being fired, but presented no evidence that any employer declined to hire them as a consequence of Allstate’s statements. The four lacked a concrete injury to support Article III standing on the FCRA claim. View "Rivera v. Allstate Insurance Co." on Justia Law