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

Holocaust survivors and the heirs of victims sued the Hungarian national railway, the national bank, and private banks for the roles they played in the World War II genocide against Hungarian Jews. In 2012 appeals, the Seventh Circuit held that the national railway and national bank, instrumentalities of the government, could be sued in a U.S. federal court if the plaintiffs could demonstrate that they had exhausted any available Hungarian remedies or had a legally compelling reason for failure to do so. The court mandated dismissal of claims against two private banks for lack of personal jurisdiction, but denied requests by Erste Bank to review denial of its motion to dismiss. On remand, the district court dismissed the claims against the national defendants for failure to prove exhaustion of Hungarian remedies and dismissed Erste Bank on forum non conveniens grounds. The Seventh Circuit affirmed the dismissals, without prejudice. While international law does not require exhaustion of domestic remedies before plaintiffs can say that international law was violated, principles of international comity require that these plaintiffs attempt to exhaust domestic remedies before foreign courts can provide remedies. If plaintiffs find that attempts to pursue remedies in Hungary are frustrated unreasonably or arbitrarily, a U.S. court could hear the claims. View "Albert v. Magyar Nemzeti Bank" on Justia Law

Visteon, a worldwide manufacturer headquartered in Michigan, sued National Union, from which it had purchased liability insurance between 2000 and 2002. The policy excluded liability resulting from pollution caused by Visteon, except liability arising from a “Completed Operations Hazard.” In 2001, the toxic solvent TCE that was used to clean machinery in Visteon’s Connersville, Indiana plant was discovered to have leaked into the soil and groundwater. Neighboring landowners sued Visteon. National Union has refused to indemnify or defend. Indiana does not enforce standard pollution-exclusion clauses. Michigan law does enforce the more general kind of pollution-exclusion clause found in the policy. The district court ruled that Michigan law governed and held that Visteon was not entitled to coverage under the Completed Operations Hazard clause. The Seventh Circuit affirmed. The risk materialized in Indiana, but that could not have been foreseen. The Indiana victims were compensated by Visteon, and it is unclear what benefit the state would have derived from reimbursement of Visteon’s costs by National Union.” The court rejected Visteon’s argument that its “work” was “completed” each time a contract to supply products made at the plant was performed and concluded that the exception did not apply. View "Visteon Corp. v. Nat'l Union Fire Ins. Co. of Pittsburgh" on Justia Law

The owners of multifamily housing rental projects in Wisconsin that are assisted by the U.S. Department of Housing and Urban Development program under Section 8 of the Housing Act, 42 U.S.C. 1437f sued the Wisconsin Housing and Economic Development Authority (WHEDA), alleging WHEDA breached certain Housing Assistance Payments (HAP) contracts by failing to approve annual rent increases,as required by federal law, and by requiring the owners to submit rent comparability studies as a prerequisite to receiving rent increases. WHEDA filed a Third-Party Complaint against HUD, alleging that, if WHEDA is found to have breached the HAP contracts, then those breaches resulted from WHEDA following congressional and HUD directives. The district court dismissed for lack of subject-matter jurisdiction. The Seventh Circuit reversed, noting that the district court’s order was entered without the benefit of the parties’ full briefing on jurisdiction. While state law may create the breach-of-contract causes of action, the only disputed issues involve the proper interpretation of Section 8 and HUD’s implementing guidance. The issues are “capable of resolution in federal court without disrupting the federal-state balance approved by Congress.” View "Wis. Hous. & Econ. Dev. Auth. v. Castro" on Justia Law

Garcia and Salgado, drivers for Latino Express, solicited signatures from other drivers to certify the Union. Owners and managers began efforts to undermine the Union activity and the two were eventually terminated. They filed claims with the NLRB alleging that Latino Express had violated the National Labor Relations Act, 29 U.S.C. 158(a)(1) and (3) by interfering with their organizing activities. The NLRB Regional Director sought interim injunctive relief pending the Board’s remedial action under section 10(j), alleging that Latino created the impression that the union or other concerted activities were under surveillance; granted improved benefits in response to the organizing campaign; instructed employees not to speak with each other about the company’s accident reimbursement policy; announced that union representation was never going to happen; interrogated employees about union activity and threatened discharge; and solicited employee grievances. The Director requested interim reinstatement for Garcia and Salgado. The district court granted relief as requested. Latino sought an extension of time, claiming that its employees had withdrawn their recognition of the union and that a decertification petition was forthcoming. The court found Latino in civil contempt. The Seventh Circuit affirmed, agreeing that the status of the union was irrelevant to compliance. View "Ohr v. Latino Express, Inc." on Justia Law

Swanigan was arrested and jailed for more than 50 hours by Chicago police officers who mistakenly thought he was a serial bank robber. Following his release, Swanigan sued individual officers and the city alleging constitutional violations under 42 U.S.C. 1983 and state-law claims. Swanigan’s “Monell” policy-or-practice claim against the city became a separate lawsuit, which was stayed while the suit against the individual officers proceeded. A jury awarded $60,000 in damages. Swanigan moved to lift the stay and to amend his complaint in light of the jury’s verdict. The judge interpreted the motion as a waiver of all but two of Swanigan’s Monell theories and held that the remaining claims were not justiciable, based on the city’s promise to indemnify its officers and to pay nominal damages of $1 for any Monell liability. The judge dismissed the Monell suit. The Seventh Circuit remanded: the judge wrongly assumed that Swanigan was waiving all but two Monell theories and, under FRCP15(a)(1)(B), Swanigan was entitled to amend his complaint within 21 days of a responsive pleading, which would have been the next step after the stay was lifted. A sua sponte dismissal for failure to state a claim, a merits adjudication was improper. View "Swanigan v. City of Chicago" on Justia Law

Rojas sued under 42 U.S.C. 1983, claiming that Cicero fired him because he supported a political opponent of the town president. A jury awarded him $650,000 in damages, but the judge granted a new trial, concluding that Kurtz, Rojas’s lawyer, had engaged in misconduct by making misleading statements, eliciting hearsay responses to prejudice the defendants even though the judge would strike them, arguing in a way that informed the jury about excluded evidence, and undermining the credibility of a defense witness by asking questions that presented him in a bad light, without a good-faith basis for the questions. The parties settled, providing Rojas with $212,500 compensation for the discharge and Kurtz with fees of $287,500. The settlement did not resolve motions for sanctions under 28 U.S.C. 1927, which authorizes sanctions against lawyers who needlessly multiply proceedings, and under FRCP 26(g)(3) based on not revealing bankruptcy proceedings that could have affected whether Rojas was a proper plaintiff. The judge denied sanctions, reasoning that Rojas and Kurtz lost about $400,000 apiece when the settlement replaced the verdict. The Seventh Circuit affirmed with respect to section 1927, but vacated with respect to the rule, which does not afford judges the same discretion. View "Rojas v. Town of Cicero" on Justia Law

Kuznar left Poland and moved to the United States, leaving his wife, Emilia, and son Thomas. In the U.S., he married Anna without divorcing Emilia. Anna collected spousal pension benefits after his 1995 death. In 1997, Thomas, now living in the U.S., opened probate in Illinois state court, on his mother’s behalf. The probate court ordered Anna to pay Emilia the amount she had collected from Mitchell’s pension fund. Emilia died before judgment entered; the Appellate Court remanded. In 2011 Thomas opened administration of Emilia’s estate and renewed his motion for summary judgment in the 1997 case, on behalf of Emilia’s estate. Anna filed notice of removal. Thomas filed notice of voluntary dismissal under FRCP 41(a)(1)(A)(i). Anna then argued that she had removed the 1997 case, not the 2011 case, and that no dismissal could be valid unless it dismissed the 1997 case entirely. The district judge reasoned that Anna’s submissions indicated that she was attempting to remove a “new action” filed in the 2011 probate case. The Seventh Circuit held that the dismissal was effective. Thomas was entitled to accept Anna’s “doubtful” characterization of his motion and voluntarily dismiss the supposed “new action” rather than dispute Anna’s shifting characterization of his filings. View "Kuznar v. Kuznar" on Justia Law

Jonas and his wife purchased life insurance: each owned the policy on his or her life, with the other as beneficiary. When they divorced, the court reassigned ownership: Troy owned the policy on Jennifer’s life. Each policy provided that change in ownership “does not change the Beneficiary Designation.” Troy thought it unnecessary to redesignate himself as beneficiary. Jennifer died. Troy claimed the proceeds ($1 million). State Farm did not pay, concerned that the proceeds might belong to the children (named secondary beneficiaries) or to Jennifer’s estate under Tex. Family Code 9.301, which provides that if a divorce occurs after one spouse has designated the other as beneficiary of an insurance policy, the designation lapses. Texas law requires an insurer to pay within 60 days of receiving a claim and provides for “damages” at 18% a year plus reasonable attorneys’ fees. An insurer that receives “notice of an adverse, bona fide claim” may defer payment and file an interpleader action not later than the 90th day. State Farm did not receive any other claim, but filed an “interpleader” before the 60 days had run. The district court treated concerns about the potential rights of the children and Jennifer’s estate as equivalent to a claim and disbursed the money to Troy, who argued on appeal that he was entitled to attorneys’ fees and interest at 18%. The Seventh Circuit vacated for dismissal. When the litigation began, there was no justiciable controversy. View "State Farm Life Ins. Co. v. Jonas" on Justia Law

Morjal sued Chicago and individual police officers under 42 U.S.C. 1983, alleging unlawful search and seizure, excessive force, conspiracy, false imprisonment, assault and malicious prosecution. Morjal accepted an offer of judgment under FRCP 68(a), which provided that the “Defendants offer to allow judgment to be taken against them … [$10,001.00] … plus reasonable attorney’s fees and costs accrued to date.” The parties were unable to reach agreement as to the amount of attorneys’ fees. Morjal sought $22,190.50. After contentious litigation the district court awarded $17,205.50. Morjal then sought additional attorneys’ fees of $16,773.00 for time spent in litigating the fee petition. The defendants responded that Morjal was bound by the terms of the offer of judgment, which limited fees to those “accrued to date.” The district court concluded that, in some instances opposition to fees was “overly aggressive” and “arbitrary with no objective standard provided,” but awarded only $2,000 “to compensate for time spent responding to challenges to the fees that were unsupported and improper.” The Seventh Circuit affirmed; the court had authority to award fees under section 1988, and did so only as to conduct of the defendants that fell outside the provisions of the offer of judgment. View "Morjal v. City of Chicago" on Justia Law

Stuhlmacher’s parents purchased a ladder from Home Depot so that their son, Kurt, a millwright technician, could work on the roof of a cabin he was building for them in Indiana. Kurt was using the ladder for the first time when it fell, causing him to fall. Kurt sued Home Depot and the ladder’s manufacturer, Tricam. The Stuhlmachers’ expert, Dr. Conry, testified that the ladder was defective, likely causing Kurt to sense instability and involuntarily shift his weight. The magistrate judge struck Dr. Conry’s testimony, finding that his explanation of how the accident occurred did not “square” with Kurt’s testimony that the ladder shot out to his left. Because the testimony was stricken, the Stuhlmachers did not have any evidence showing causation, so the judge entered judgment as a matter of law for the defendants. The Seventh Circuit reversed. An expert’s testimony qualifies as relevant under Rule 702 so long as it assists the jury in determining any fact at issue in the case. Experts are allowed to posit alternate models to explain their conclusions. View "Stuhlmacher v. Home Depot U.S.A., Inc." on Justia Law