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

The Patient Protection and Affordable Care Act requires almost everyone to have health insurance and is enforced by a tax that most businesses must pay if they fail to provide insurance as a benefit, or that anyone not covered by an employer’s plan must pay in lieu of purchasing insurance, 26 U.S.C.4980H, 5000A. The Internal Revenue Service has stated that it will collect the tax in 2014 from uninsured persons, but not from certain businesses. Plaintiffs, a physician and an association of physicians, claimed violation of the separation of powers and the Tenth Amendment. Because they did not complain about their own taxes, the district court dismissed for lack of standing. The Seventh Circuit affirmed. Rejecting an argument that the challenged policies change demand for plaintiffs’ services, the court noted that plaintiffs “appear to believe” that insurance is free to workers--that wages do not adjust to reflect pensions, insurance, and other benefits. By the same logic, they could litigate any tax policy. In a market economy everything is connected to everything else through the price system. To allow a long, intermediated chain of effects to establish standing is to abolish the standing requirement. The Constitution’s structural features are not open to litigation by persons who do not suffer particularized injuries. Plaintiffs, who do not accept insured patients, want to reduce, not increase the number of persons who carry health insurance. Someone else would be more appropriate to argue that the IRS has not done what it should to accomplish the statute’s goal of universal coverage.View "Ass'n of Am. Physicians & Surgeons, Inc. v. Koskinen" on Justia Law

Satkar owns Schaumburg, Illinois hotel and was mentioned in blog posts and a television news report as having made a large donation to a local politician and later won a property-tax appeal. In response, the Cook County Board of Review revoked Satkar’s property-tax reduction and opened an inquiry. Satkar sued the Board, its members and staff, the blog, the television station, and reporters, under 42 U.S.C. 1983, and for defamation and false light. The district court dismissed the 1983 claims against the Board and the officials. The Seventh Circuit affirmed. The court separately dismissed the state-law claims against the media defendants, applying the Illinois Anti-SLAPP statute. Because the section 1983 claims were still pending, the judge entered final judgment under FRCP 54(b) to permit appeal of the SLAPP issue. Later, the judge orally invited Satkar to ask for a Rule 54(b) judgment on the SLAPP dismissal, forgetting that he had already entered final judgment. Satkar did not correct the judge, did not seek clarification, and did not file a notice of appeal. After the deadline to appeal expired, Satkar sought an extension, claiming that the judge’s comment created confusion. The judge granted the extension, relying on the defunct “unique circumstances” doctrine. The Seventh Circuit dismissed an appeal, noting that the Supreme Court has disavowed the unique circumstances doctrine and Satkar has not otherwise demonstrated excusable neglect. View "Satkar Hospitality, Inc.v. Fox Television Stations, Inc." on Justia Law

The Plaintiffs sued Payday Financial, Webb, an enrolled member of the Cheyenne River Sioux Tribe, and other entities associated with Webb, alleging violations of civil and criminal statutes related to loans that they had received from the defendants. The businesses maintain several websites that offer small, high-interest loans to customers. The entire transaction is completed online; a potential customer applies for, and agrees to, the loan terms from his computer. The district court dismissed for improper venue, finding that the loan agreements required that all disputes be resolved through arbitration conducted by the Cheyenne River Sioux Tribe on their Reservation in South Dakota. Following a limited remand, the district court concluded that, although the tribal law could be ascertained, the arbitral mechanism detailed in the agreement did not exist. The Seventh Circuit held that the action should not have been dismissed because the arbitral mechanism specified in the agreement is illusory. Rejecting an alternative argument that the loan documents require that any litigation be conducted by a tribal court on the Cheyenne River Sioux Tribe Reservation, the court stated that tribal courts have a unique, limited jurisdiction that does not extend generally to the regulation of nontribal members whose actions do not implicate the sovereignty of the tribe or the regulation of tribal lands. View "Jackson v. Payday Fin., LLC" on Justia Law

The herbicide atrazine is banned in the European Union but widely used in the U.S. Municipalities and water boards charged with filtering public drinking supplies sued Syngenta, which manufactures and distributes the chemical. Those claims were settled. During discovery Syngenta produced many documents. Two environmental groups intervened to assert that the public is entitled to see them. In a flawed attempt to comply with a protective order shielding discovery materials, plaintiffs had filed a response to Syngenta’s motion to dismiss and its exhibits under seal, but the protective order did not apply to materials filed in connection with a dispositive motion. The district court eventually unsealed 123 of the exhibits, preserving the seal on 242 that are either legitimately confidential or had not been cited in plaintiffs’ papers. Having decided not to read these documents, the judge observed that they could not have affected his decision and held that they need not be disclosed to the public. The Seventh Circuit affirmed. Fed. R. Civ. P. 53 and 28 U.S.C.636(b)(2) permit the appointment of special masters to sort through swollen filings and identify material that does not belong in the record. The district judge in this case appropriately referred to a magistrate judge the question whether some documents, properly in the record, are legitimately confidential. View "City of Greenville v. Syngenta Crop Prot., LLC" on Justia Law

Former employees of an Indiana city sued the mayor and the city under 42 U.S.C. 1983, claiming that the mayor had fired them because of their political affiliations, in violation of their First Amendment rights. The mayor responded that political affiliation was a permissible qualification for their jobs. The district judge granted summary judgment in favor of the mayor with respect to nine of the 11 plaintiffs, on the ground that his argument concerning political qualification for their jobs was sufficiently arguable to entitle him to qualified immunity, but declined to certify interlocutory appeal with respect to the other two plaintiffs. The Seventh Circuit stayed proceedings pending interlocutory appeal of the issue of qualified immunity, reasoning that whether a job is one for which political affiliation is a permissible criterion presents a question of law. Qualified immunity is an entitlement not to stand trial or face the other burdens of litigation. The privilege is an immunity from suit rather than a mere defense to liability; like an absolute immunity, it is effectively lost if a case is erroneously permitted to go to trial.View "Allman v. Smith" on Justia Law

Illinois insurance regulators permitted WellPoint to acquire RightCHOICE health insurance. WellPoint caused RightCHOICE Insurance to withdraw from the Illinois market. WellPoint offered the policyholders costlier UniCare policies as substitutes. Those who chose not to pay the higher premiums had to shop for policies from different insurers, which generally declined to cover pre-existing conditions. Former RightCHOICE policyholders filed a purported class action. The district court declined to certify a class and entered judgment against plaintiffs on the merits. No one appealed. Absent certification as a class action, the judgment bound only the named plaintiffs. Their law firm found other former policyholders and sued in state court. Defendants removed the suit under 28 U.S.C. 1453 (Class Action Fairness Act); the proposed class had at least 100 members, the amount in controversy exceeded $5 million, and at least one class member had citizenship different from at least one defendant. Plaintiffs sought remand under section 1332(d)(4), which says that the court shall “decline to exercise” jurisdiction if at least two-thirds of the class’s members are citizens of the state in which the suit began and at least one defendant from which “significant relief” is sought is a citizen of the same state. The district court declined remand, declined to certify a class, and again rejected the case on the merits. The Seventh Circuit affirmed, stating that “Counsel should thank their lucky stars that the district court did not sanction them under 28 U.S.C. 1927 for filing a second suit rather than pursuing the first through appeal."View "Phillips v. Wellpoint Inc." on Justia Law

KDC had cash flow problems and, in 2004, hired Johnson. Johnson retained the law firm (GPM) of his acquaintance, Tenenbaum. GPM sent KDC an engagement letter that included conflict‐waiver language regarding Johnson and a company affiliated with Johnson. Johnson soon resigned and joined First Products. GPM resigned as KDC’s counsel. KDC filed for Chapter 11 bankruptcy. Its assets were purchased at auction by First Products. No other bids were received; the bankruptcy court approved the sale. The bankruptcy was later converted to a Chapter 7 liquidation proceeding. The bankruptcy trustee hired Sullivan as special counsel. Sullivan had filed a shareholder derivative action before KDC filed for bankruptcy, alleging that directors and officers of KDC had conspired to defraud the company of its intellectual property by driving KDC out of business and purchasing its assets at bargain prices. In 2010, a Wisconsin state judge entered judgment, finding some defendants, including Johnson, had engaged in a civil conspiracy to defraud KDC and steal its assets. In 2012, KDC, through its bankruptcy trustee, brought claims against GPM, alleging involvement in the scheme to defraud KDC orchestrated by Johnson. On summary judgment, the district court determined that the remaining claims were barred by the six‐year Wisconsin statute of limitations because KDC was on notice of GPM’s alleged fraud by 2006, when Sullivan received KDC’s client file. The Seventh Circuit affirmed.View "KDC Foods, Inc. v. Gray, Plant, Mooty, Mooty & Bennett, P.C." on Justia Law

King was in custody awaiting a probable cause determination in 2007. After being rapidly tapered off psychotropic medication by jail medical staff, complaining of seizure-like symptoms, and being placed in an isolated cell for seven hours, King was found dead. His estate sued La Crosse County and individual employees. After a remand, six weeks before the trial date, King’s counsel asserted in a letter to the defendants that the correct standard for jury instructions was one of objective reasonableness, not the deliberate indifference standard that had been used by both parties in the pleadings, the summary judgment briefing, the subsequent appeal, and post-remand pretrial preparations. The assertion was correct, but defendants moved that King be precluded from arguing the applicability of the objective reasonableness standard because of her tardiness in asserting the argument. The district court ordered that the case be tried as scheduled under the deliberate indifference standard. The Seventh Circuit reversed, acknowledging that King’s long, unexplained delay in asserting the correct standard was puzzling and problematic, but stating that the district court failed to provide a sufficient explanation of how the defendants would suffer prejudice as a result of the delay. The court subsequently clarified that the reversal applied only to the individual defendants, not the county.View "King v. Kramer" on Justia Law

Spencer stopped paying her mortgage in 2008. In Wisconsin state court foreclosure proceedings, Spencer’s attorney, Nora, adopted an “object-to-everything litigation strategy and buried the state court in a blizzard of motions.” While a hearing on a summary judgment motion was pending in state court, Nora removed the case to federal court. Finding no objectively reasonable basis for removal, the district court remanded the case and awarded attorney’s fees and costs to the lender, 28 U.S.C. 1447(c). The Seventh Circuit dismissed Spencer’s appeal as frivolous; the district court did not order her to pay anything. The court affirmed the award as to Spencer “because she has not offered even a colorable argument that removal was reasonable” and ordered Nora to show cause why she should not be sanctioned for litigating a frivolous appeal. View "PNC Bank, N.A. v. Spencer" on Justia Law

Plaintiff filed a wrongful death action against Union Pacific in state court after his parents were killed when a Union Pacific train derailed and caused a bridge to collapse. Union Pacific removed to federal court based on diversity jurisdiction where plaintiff's parents were domiciled in Illinois and Union Pacific is a Delaware corporation with its principal place of business in Nebraska. On appeal, Union Pacific challenged the district court's grant of plaintiff's request for leave to amend his complaint to add claims against two Illinois residents. The court held that, because the order granting leave to amend can be reviewed in state court, mandamus relief is neither necessary nor appropriate. In this instance, Union Pacific's appeal and request for a writ of mandamus must be dismissed. View "Lindner v. Union Pacific Railroad Co." on Justia Law