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

Jaworski provided construction services to Master Hand, an Illinois general contractor, over several years. Some of these services went unpaid. Jaworski alleged violations of the federal Fair Labor Standards Act, the Illinois Minimum Wage Law, the Illinois Wage Payment and Collection Act, and the Employee Classification Act, which makes it unlawful for construction firms to misclassify an employee as an independent contractor. The Classification Act presumes that the complainant is an employee unless the contractor proves otherwise; a misclassified employee is entitled to double “the amount of any wages, salary, employment benefits, or other compensation denied or lost to the person by reason of the violation.” The judge held that Master Hand had misclassified Jaworski and was entitled to the compensation guaranteed by the Minimum Wage Law and Wage Payment and Collection Act without having to prove that he is an employee. Those statutes do not include the presumption that plaintiffs are employees. The judge rejected Master Hand’s insolvency defense and ordered Master Hand to pay $200,000 in damages, plus $150,000 in attorneys’ fees. The Seventh Circuit affirmed, adding attorneys’ fees for the frivolous appeal. The court declined to review the rulings challenged by Master Hand, as a sanction for failure to follow court rules. View "Jaworski v. Master Hand Contractors, Inc." on Justia Law

Vexol, a Mexican company that provides plastic and shrink wrap to end users in Mexico, filed suit in the Southern District of Indiana against Berry Plastics, a Delaware corporation that allegedly does business in Mexico through its subsidiary, Pliant, Vexol alleged that Pliant sold shrink wrap to Vexol and that Vexol’s customers complained about the quality and returned their purchases to Vexol. Vexol sought to return the unsatisfactory product to Pliant, which would not issue a refund, but claimed that Vexol owed it money pursuant to a fabricated “pagare,” the Mexican equivalent of a promissory note. Pliant allegedly caused another Mexican entity, Aspen, to enforce the pagare in the Mexican Mercantile Court. Vexol alleged that Pliant also filed a criminal complaint against Vexol for fraud. Vexol claimed violation of Indiana tort law and Mexico’s Federal Civil Code. Citing choice‐of‐law principles, the district court dismissed with prejudice the Indiana law claims and dismissed without prejudice the Mexican law claims. The Seventh Circuit affirmed. The complaint "plainly" does not describe anything that Berry did in Mexico. Plaintiffs alleging fraud must state particularly “the who, what, when, where, and how” of the circumstances. Vexol’s complaint satisfied none of those requirements. View "Vexol S.A. de C.V. v. Berry Plastics Corp." on Justia Law

The district court ordered Jackson to pay Cooke the death benefit on her husband’s life insurance policy and to reimburse Cooke’s legal expenses. The court concluded that her husband died before the end of a grace period allowed for late premium payments and that Jackson should have expedited the litigation by attaching documents to its answer and by making some arguments sooner. The court’s order granted Cooke summary judgment but stated: This case is hereby dismissed with prejudice. The Seventh Circuit dismissed an appeal for lack of jurisdiction under the final-decision rule, 28 U.S.C. 1291. The order is contradictory and does not provide relief. It states that a motion has been granted and an award made, but it does not say who is entitled to what; it “transgresses almost every rule applicable to judgments.” A second document avoided the internal contradiction but lacked vital details and the judge’s signature. The court later entered an order specifying that Jackson must pay $191,362.06 on the insurance policy, plus 10% per annum simple interest, which Jackson paid, but did not specify the amount of attorneys’ fees. A declaration of liability, including an award of attorneys' fees, lacking an amount due is not final and cannot be appealed. View "Cooke v. Jackson National Life Insurance Co." on Justia Law

Mann attacked his coworker, Baylay, a British citizen. The men, members of an Etihad Airways (incorporated in Abu Dhabi) flight crew, were at a Chicago hotel on a layover. Baylay sued Etihad, Mann, and the hotel’s corporate entities. The district court dismissed Baylay’s claims against Etihad, stating that they should be heard by the Illinois Workers’ Compensation Commission, and later dismissed Baylay’s remaining claims, reasoning that it had no original jurisdiction over the claims and declining to exercise its supplemental jurisdiction. The Seventh Circuit affirmed. The Foreign Sovereign Immunities Act imposes liability on the foreign state “in the same manner and to the same extent as a private individual under like circumstances,” 28 U.S.C. 1606. If the foreign state is not immune from suit, “plaintiffs may bring state law claims that they could have brought if the defendant were a private individual.” Baylay failed to show that his injuries would not be compensated under Illinois law. After Etihad’s dismissal, Baylay’s remaining claims included state-law claims against Mann and the hotel’s corporate entities. The corporate entities’ third-party contribution claims are entirely dependent on the resolution of the underlying state-law negligence claim against them. Baylay’s state-law claims substantially predominate; the district court’s decision to decline to exercise supplemental jurisdiction was not an abuse of discretion in light of 28 U.S.C. 1367(c). View "Baylay v. Etihad Airways P.J.S.C." on Justia Law

Heraeus sought to obtain discovery from Biomet to use in its trade secret misappropriation case against Biomet in Germany, citing 28 U.S.C. 1782, which allows a party to file a petition in a federal district court to obtain discovery for use in a foreign proceeding. Biomet produced discovery subject to stipulated protective orders that limited Heraeus’s ability to use or disseminate materials outside of the German proceeding and the section 1782 action. The German court ruled in Heraeus’s favor and enjoined Biomet from manufacturing or distributing products developed using the misappropriated information. That court quoted several documents that were produced in the 1782 proceeding, subject to the stipulated protective orders. Suspicious that Biomet was continuing to sell products made with Heraeus’s trade secrets outside of Germany, Heraeus brought actions in other European countries and moved to modify the section 1782 protective orders, to exclude the documents that the German court relied upon and/or to restrict Biomet’s internal use of those documents. The Seventh Circuit upheld the denial of the motions, concluding that it lacked jurisdiction with respect to the first two denials because Heraeus failed to timely appeal those denials. The district court did not abuse its discretion in denying the third request to impose restrictions on Biomet’s internal use of the documents it produced. View "Heraeus Kulzer GMBH v. Biomet, Inc." on Justia Law

The plaintiffs formed the Fredericksburg partnership to search for oil and contracted with Kraft for management services. The IRS began a criminal investigation of the partnership, Kraft, and Kraft principals Valeri and Blum. In 2003, the plaintiffs and the IRS settled allegations against the partnership in exchange for the payment of taxes for the tax year 1994. The statute of limitations for 1994 tax liability had expired, but the IRS had obtained a waiver from Valeri. The plaintiffs allege that the IRS did not sign the agreement and Valeri could not waive the statute of limitations on plaintiffs’ behalf, 26 U.S.C. 6229(a)–(b); that the IRS never sent the plaintiffs required notices that the IRS had begun an administrative proceeding, 26 U.S.C. 6223(a); and that plaintiffs did not discover these alleged violations until 2009. The plaintiffs never sent formal refund claims but filed suit in 2012. The Seventh Circuit affirmed dismissal of the refund claims for lack of jurisdiction for failure to exhaust administrative remedies and claims for damages because they alleged IRS errors only in assessing taxes, not in collecting them, and were outside the scope of section 7433. The court rejected claims to exceptions under the “informal claim doctrine,” noting that the plaintiffs never perfected their claims. View "Goldberg v. United States" on Justia Law

Ariel Investments, based in Illinois and doing business nationally, and Ariel Capital, based in Florida, both manage money for clients. Investments has used its name since 1983; Capital only since 2014. In a suit under the Lanham Act, 15 U.S.C. 1125(a), the district court found that Capital was infringing Investments’ trademarks. The Seventh Circuit reversed, finding that the court lacked jurisdiction. Capital does not have a client, property, or staff in Illinois, does not advertise in Illinois, and never has had an agent even visit Illinois. The Lanham Act does not authorize nationwide service of process, so personal jurisdiction depends on state law. A defendant’s knowledge and intent concerning a resident of a state do not justify compelling that person to defend himself there. A state may assert specific jurisdiction, based on a particular transaction, only if the defendant has “a substantial connection with the forum State” that is of the defendant’s creation. ”No matter how one might characterize the relation between Ariel Investments and Ariel Capital, it is easy to describe the relation between Illinois and Ariel Capital: none.” If infringement happened, it occurred in Florida, or some state where people who wanted to do business with Investments ended up dealing with Capital because of the similar names. View "Ariel Investments, LLC v. Ariel Capital Advisors LLC" on Justia Law

The Milchteins have 15 children. The two eldest refused to return home in 2011-2012 and were placed in foster care by Wisconsin state court orders. In federal court, the Milchteins argued that state officials violated the federal Constitution by either discriminating against or failing to accommodate their views of family management in the Chabad understanding of Orthodox Judaism. Those children now are adults. State proceedings with respect to them are closed. The Seventh Circuit affirmed the dismissal of the Milchteins’ suit as moot, rejecting arguments the district court could have entered a declaratory judgment because the Milchteins still have 12 minor children, who might precipitate the same sort of controversy. The Milchteins did not seek alteration of the state court judgment, so the Rooker-Feldman doctrine did not block this suit but it is blocked by the requirement of justiciability. The Milchteins want a federal judge to say where a state judge erred but not act on that error: “a naked request for an advisory opinion.” If Wisconsin again starts judicial proceedings concerning the Milchteins’ children, the "Younger" doctrine would require the federal tribunal to abstain. Younger abstention may be inappropriate if the very existence of state proceedings violated the First Amendment but the Milchteins do not contend that it is never permissible for a state to inquire into the welfare of a religious leader’s children. View "Milchtein v. Chisholm" on Justia Law

The Milchteins have 15 children. The two eldest refused to return home in 2011-2012 and were placed in foster care by Wisconsin state court orders. In federal court, the Milchteins argued that state officials violated the federal Constitution by either discriminating against or failing to accommodate their views of family management in the Chabad understanding of Orthodox Judaism. Those children now are adults. State proceedings with respect to them are closed. The Seventh Circuit affirmed the dismissal of the Milchteins’ suit as moot, rejecting arguments the district court could have entered a declaratory judgment because the Milchteins still have 12 minor children, who might precipitate the same sort of controversy. The Milchteins did not seek alteration of the state court judgment, so the Rooker-Feldman doctrine did not block this suit but it is blocked by the requirement of justiciability. The Milchteins want a federal judge to say where a state judge erred but not act on that error: “a naked request for an advisory opinion.” If Wisconsin again starts judicial proceedings concerning the Milchteins’ children, the "Younger" doctrine would require the federal tribunal to abstain. Younger abstention may be inappropriate if the very existence of state proceedings violated the First Amendment but the Milchteins do not contend that it is never permissible for a state to inquire into the welfare of a religious leader’s children. View "Milchtein v. Chisholm" on Justia Law

Apple Leisure specializes in packaged travel sales and resort management. In 2011 Scott and Natasha Mueller purchased an Apple all-inclusive honeymoon trip to Secrets Resort in Punta Cana, Dominican Republic, through a Fond du Lac, Wisconsin travel agent. The contract attached to their travel vouchers explains in boldface type that “[t]he exclusive forum for the litigation of any claim or dispute arising out of … [this] trip shall be the Court of Common Pleas of Delaware County, Pennsylvania.” While on her honeymoon, Natasha became ill after Secrets Resort served her contaminated fish. She was diagnosed with Ciguatera poisoning, a foodborne illness caused by eating certain reef fish infected with Ciguatera neurotoxins. The Muellers sued in the Eastern District of Wisconsin. The district judge applied the doctrine of forum non conveniens and dismissed the case based on the forum-selection clause. The Seventh Circuit affirmed. The judge’s decision was procedurally and substantively sound. A forum-selection clause channeling litigation to a nonfederal forum is enforced through the doctrine of forum non conveniens; only an exceptional public-interest justification can displace a contractual choice of forum. The Muellers have not identified any public interest to justify overriding the forum-selection clause in their travel contract. View "Mueller v. Apple Leisure Corp." on Justia Law