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

Taxpayers petitioned the Tax Court for a redetermination of $18,030 in deficiencies and penalties for tax years 2009 through 2011. On the trial date, the IRs Commissioner submitted a “Stipulation of Settled Issues” signed by the parties. The document states that it “reflects” the parties’ “agreement as to the disposition of adjustments,” but contained no mention of agreement concerning the fact or amount of a deficiency for any of the relevant tax years. At the Commissioner’s request, the Tax Court granted the parties 30 days to file “decision documents” in lieu of trial. The Commissioner calculated a total deficiency of $12,252 and a penalty of $0. When the couple refused to agree to this amount, the Commissioner asked the Tax Court to enter a decision adopting the Commissioner’s figures. The taxpayers sought more time to produce an agreement, but the Tax Court granted the Commissioner’s motion on the ground that “the parties’ computations for decision and proposed decisions consistent with their settlement agreement” were overdue. The Seventh Circuit vacated. In light of the parties’ disagreement over the taxpayers’ liability, the Tax Court erred by entering a judgment without holding a trial. View "Hussain v. Comm'r of Internal Revenue" on Justia Law

SGI sued Yogi’s, alleging trademark infringement. Attorney Harris filed trademark applications for Yogi’s. SGI served Harris with a subpoena, for his deposition. The deposition did not take place. The court ordered Harris to be deposed at his office at noon on October 29. SGI sent Harris, who did not attend the hearing, a copy of the order by mail and facsimile on October 23. On October 29, SGI’s attorney, Park, arrived at the office. Harris was not there. The two spoke by phone. According to Park, Harris stated that he was aware of the order, but that it would take him at least an hour to arrive. Park told Harris that if he did not arrive by 1:00 p.m. it would be treated as a “no show.” The deposition did not occur. Harris faxed a letter stating his intention to comply and willingness to be deposed telephonically or by video. SGI did not respond or attempt to reschedule, but moved to hold Harris in contempt, seeking fees and expenses of $6,800. Harris filed an affidavit, explaining that during the week of October 22, he was in New York, and that he first became aware of the court order on October 29, when speaking with Park. On November 6, Harris sent Park a letter via email, facsimile, and certified mail, stating that he was available for deposition. On November 8, Harris called Park to reschedule. Park did not return the call; Harris sent another email. There was no response. On December 17, the court ordered SGA to take Harris’ deposition that same day. SGI complied. The court declared the motion for contempt and sanctions moot. SGI filed a renewed motion. The Seventh Circuit affirmed its denial. View "Sik Gaek, Inc. v. Harris" on Justia Law

The Illinois Business Brokers Act of 1995 requires brokers for the sale of businesses in the state to register. Brokerage agreements must be in writing. Promises to pay unregistered brokers for their services are unenforceable. Global Technology, apparently unaware of the statute, orally agreed with Satyam Computer Services (based in India) to act as a broker in the purchase of Bridge Strategy, an Illinois business. Global brokered the acquisition, but Satyam refused to pay. Global sued, seeking a 3% commission ($600,000). Satyam contended that Bridge had compensated Global for its services as an intermediary and that it had never promised any additional compensation. When the litigation was four years old, Satyam moved for summary judgment with a new argument: that Global is not registered under the Act. Global argued that the Act is an affirmative defense, which under Fed. R. Civ. P. 8(c) had to appear in Satyam’s answer. Finding that Global had not suffered prejudice, the court excused Satyam’s delay and entered judgment in its favor. The Seventh Circuit affirmed. Rule 8(c) does not provide a consequence for delay. District judges have authority to authorize a litigant to assert an affirmative defense despite its omission from the answer. View "Global Tech. & Trading, inc. v. Tech Mahindra Ltd." on Justia Law

Plaintiff, once a standout high school basketball player, sued 942 U.S.C. 1983) Valley View Community School District, and the Illinois High School Association, raising claims of First Amendment retaliation, equal protection, substantive due process, unconstitutional policy, section 1983 conspiracy to violate constitutional rights, and indemnification under the Illinois Tort Immunity Act. He alleged that the District and IHSA singled him out for residency investigations, which rendered him ineligible to participate in basketball for 10 days, because his mother complained to the District. The district judge determined that plaintiff failed to comply with local Rule 56.1 and deemed admitted all of the defendants’ properly supported facts and disregarded plaintiff’s additional facts that lacked evidentiary support. Rule 56.1(a)(3) requires a party moving for summary judgment to include with that motion “a statement of material facts as to which the moving party contends there is no genuine issue and that entitle the moving party to a judgment as a matter of law,” organized by numbered paragraphs and referring to supporting materials that substantiate the asserted facts. The district judge entered summary judgment for the defendants. The Seventh Circuit affirmed. The defendants complied; plaintiff, in opposing summary judgment, was required to, but did not comply. View "Friend v. Valley View Cmty Unit Sch. Dist." on Justia Law

The City of Milwaukee is defending several lawsuits brought by scores of plaintiffs alleging that its police officers conducted unconstitutional stops and searches, including strip‐searches and body‐cavity searches. Judge Stadtmueller was assigned to preside over several cases. Milwaukee, asserting that some of the judge’s comments in opinions and conferences in the related cases raise questions about his impartiality, moved for recusal under 28 U.S.C. 455(a). The judge declined. Milwaukee sought a writ of mandamus. The Seventh Circuit denied the motion. The five challenged statements were made during the course of litigation; “opinions formed by the judge on the basis of facts introduced or events occurring in the course of the current proceedings, or of prior proceedings, do not constitute a basis for a bias or partiality motion unless they display a deep‐seated favoritism or antagonism that would make fair judgment impossible.” Judge Stadtmueller is presiding over several of these cases. It is not surprising that he might draw conclusions about the nature of the issue or problem. He is expected to look for and consider common threads and possible systemic problems to manage the cases effectively and decide them fairly. Even considering all the challenged statements together, nothing reasonably suggests deep-seated antagonism. View "City of Milwaukee v. Stadtmueller" on Justia Law

At 4:15 p.m. on Friday, March 8, the plaintiff’s attorney in a civil-rights case opened an electronic case file in the Southern District of Illinois by e-mailing the complaint and civil cover sheet to the clerk’s office as required by the local court rules. The clerk received the e-mail, opened a new case file in the Case Management/ Electronic Case Filing system (CM/ECF), and at 5:11 p.m. notified the attorney that it was available to receive uploads. On the next business day (Monday) the attorney’s assistant tried to upload the complaint but encountered problems with the electronic payment system. On Tuesday, March 12, she paid the filing fee and uploaded the complaint. The deadline to sue was Monday, March 11, and under local rules, the complaint was not “filed” until it was uploaded into CM/ECF. The district court dismissed. The Seventh Circuit remanded for reinstatement. Under the Federal Rules of Civil Procedure, “[a] civil action is commenced by filing a complaint with the court,” and a paper is “filed” by “delivering it … to the clerk.” Although the filing process was not complete under the local rules until the complaint was uploaded, transmitting the complaint via e-mail effectively “delivered” it to the clerk for purposes of Rule 5(d)(2). View "Farley v. Koepp" on Justia Law

Durukan America, a Texas candy company, sued Rain Trading, an Illinois wholesaler, and its president, Canbulat, breach of contract and deceptive practices for allegedly refusing to pay for $86,000 in merchandise. To prove service, Durukan filed with the court two affidavits from a process server. After a month passed without an answer from the defendants, the district court entered a default judgment for Durukan. About a year later, after Canbulat was arrested for failing to respond to a citation to discover evidence, the defendants moved to vacate the default judgment, submitting an affidavit and records to show that they were never served. Canbulat provided corroboration that he was not at the location where service purportedly occurred. Without holding a hearing to address the dueling affidavits, the district court denied the motion. The Seventh Circuit vacated and remanded, holding that the district court should have held a hearing to resolve the factual conflict in the affidavits. View "Durukan Am., LLC v. Rain Trading, Inc." on Justia Law

Humphrey sued under the Federal Tort Claims Act on behalf of her daughter Teniscia, alleging that medical malpractice during Teniscia’s 2008 birth left her permanently disabled. Teniscia’s father, Lee, participated in the litigation, but did not ask to be joined as a party. Humphrey and Lee are not married; Teniscia lives with Humphrey, but both are Teniscia’s legal custodians. The case was settled for $13 million, used to buy an annuity to provide care over the course of Teniscia’s life. Porter, who represents Lee, demanded a share of the 25% contingent fee that had been negotiated between Humphrey and her lawyer, who opposed this request, arguing that Lee was not a party and that Porter had not performed any of the legal work that led to the settlement. After the settlement Lee moved to file an amended complaint naming himself as a plaintiff. The district court denied Lee’s motion, stating that Lee not only had approved the settlement but also had not filed an administrative claim, as the FTCA requires. Lee then moved to intervene. The court denied that motion as untimely. Porter unsuccessfully sought fees notwithstanding Lee’s non-party status. The Seventh Circuit affirmed, concluding that the district court could not have allowed intervention even on a timely motion. View "Lee v. United States" on Justia Law

After Pajian filed for bankruptcy, Lisle Savings Bank, a creditor, filed a proof of claim ($330,472.19) in the bankruptcy court, but missed the bankruptcy court’s filing deadline (set under FED. R. BANKR. P. 3002(c)) by several months. The Bank argued that Rule 3002(c) applies only to unsecured creditors; as a secured creditor, it asserted, it was entitled to file a proof of claim at any time until plan confirmation. The bankruptcy court agreed with the Bank. The Seventh Circuit reversed, holding that a secured creditor must file its proof of claim by the 90-day deadline specified by Rule 3002(c). View "Pijian v. Lisle Savings Bank" on Justia Law

Plaintiff, a Vietnam veteran, was diagnosed with schizophrenia, bipolar disorder, and depression. In 2004 the VA declared him 100 percent disabled. Nonetheless, the Illinois Department of Human Services hired him that year as a “certified nurse assistant residential case worker” and assigned him to a residential facility. Two years later, he claims, a resident and members of the resident’s family assaulted plaintiff with an iron pipe and baseball bats. The Department suspended him on the complaint of the resident’s family and allegedly subsequently discharged him on the basis of an investigation by the Department of Children and Family Services that resulted in a preliminary finding that he had committed child abuse and neglect. The finding of child abuse was retracted. In 2014 he sued, alleging violation of the Rehabilitation Act, 29 U.S.C. 794(a), which forbids discrimination on the basis of disability by agencies that receive federal money. The district judge dismissed, finding that plaintiff failed to state a claim and that his claim was untimely. The Department was not served with process. The Seventh Circuit reversed in part, noting that it is not clear when plaintiff was discharged and that it can take a long time for a discharge to ripen. View "Rutledge v. Ill. Dept, of Children & Family Servs." on Justia Law