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

Delta Airlines contracted with Lands’ End to supply new uniforms for its employees, which were manufactured overseas and distributed to approximately 64,000 workers. After the uniforms were issued, many employees reported that the garments transferred dye onto other surfaces and caused a range of health symptoms, including skin irritation and respiratory issues. Two groups of Delta employees filed lawsuits: one group sought damages for property damage and breach of express warranty as intended beneficiaries of the contract between Delta and Lands’ End, while the other group pursued personal injury claims, alleging the uniforms were defectively manufactured or designed and that Lands’ End failed to warn of these defects.The United States District Court for the Western District of Wisconsin consolidated the actions and, after discovery, granted summary judgment in favor of Lands’ End on all claims. For the personal injury claims, the court excluded the plaintiffs’ expert testimony on defect and causation, finding the opinions unreliable under Federal Rule of Evidence 702 and Daubert v. Merrell Dow Pharmaceuticals, Inc. The court also found that the plaintiffs failed to present sufficient evidence that the uniforms were defective or that any defect caused their injuries. On the breach of warranty claim, the court determined that Lands’ End had not breached the contract’s satisfaction guarantee because plaintiffs had not returned their uniforms as required by the contract’s terms.On appeal, the United States Court of Appeals for the Seventh Circuit affirmed the district court’s judgment. The Seventh Circuit held that the exclusion of the plaintiffs’ expert testimony was not an abuse of discretion, as the experts failed to reliably establish defect or causation. The court also held that summary judgment on the breach of warranty claim was proper because the contract’s return requirement was reasonable and not an unlawful limitation on the express warranty. The district court’s judgment was affirmed in full. View "Gilbert v Lands' End, Inc." on Justia Law

In 2016, the Village of Schaumburg enacted an ordinance requiring commercial and multifamily properties to route fire alarm signals directly to a regional emergency-dispatch center. This ordinance aimed to reduce fire department response times and had financial benefits for the Village. Several alarm companies, which previously used a different model for transmitting alarm signals, claimed that the ordinance caused them to lose business and led to more expensive and lower-quality alarm services for customers.The alarm companies sued the Village, alleging that the ordinance violated the Contracts Clause and tortiously interfered with their contracts and prospective economic advantage. The United States District Court for the Northern District of Illinois initially dismissed the federal claims and relinquished jurisdiction over the state-law claims. On appeal, the Seventh Circuit reversed in part, allowing the Contracts Clause claim to proceed. However, on remand, the district court granted summary judgment for the Village, finding that the alarm companies failed to provide evidence that the ordinance caused customers to breach existing contracts or that the Village intended to interfere with their business relationships.The United States Court of Appeals for the Seventh Circuit reviewed the case and affirmed the district court's decision. The court held that the alarm companies did not present sufficient evidence to show that the ordinance caused customers to breach contracts or that the Village acted with the intent to harm the alarm companies' businesses. The court also found that the alarm companies' claims of tortious interference with prospective economic advantage failed because the Village's actions were motivated by public safety and financial considerations, not a desire to harm the alarm companies. View "Alarm Detection Systems, Inc. v. Village of Schaumburg" on Justia Law

Avanzalia Panamá and its parent company, Avanzalia Solar, built a solar plant in Panama and sought to connect it to the El Coco substation, owned by Goldwind USA's affiliate, UEPI. Avanzalia alleged that Goldwind tortiously blocked their access to the substation, preventing them from selling electricity. Avanzalia filed a complaint with Panama's Autoridad de Servicios Públicos (ASEP), which required them to submit updated electrical studies and obtain an access agreement with UEPI. Despite obtaining the agreement, Avanzalia faced further delays and was unable to connect to the substation until May 2020.The United States District Court for the Northern District of Illinois granted summary judgment to Goldwind. The court found that Avanzalia could not satisfy the Illinois state law requirement for tortious interference, which necessitates that the defendant's actions be directed at a third party. The court also applied collateral estoppel, concluding that ASEP's findings were binding and precluded Avanzalia's claims related to pre-access agreement delays.The United States Court of Appeals for the Seventh Circuit reviewed the case. The court affirmed the district court's decision to afford comity to ASEP's order and apply collateral estoppel, barring Avanzalia's claims related to pre-access agreement delays. However, the appellate court found that the district court erred in not considering the impossibility theory of tortious interference under Restatement (Second) of Torts § 766A. The court vacated the summary judgment on this issue and remanded for further proceedings to determine whether Goldwind wrongfully prevented Avanzalia from performing its contractual obligations. The judgment was affirmed in all other respects. View "Avanzalia Solar, S.L. v. Goldwind USA, Inc." on Justia Law

Clinton Mahoney, the sole member and manager of Mahoney & Associates, LLC, signed an agreement obligating the company to contribute to the Railroad Maintenance and Industrial Health and Welfare Fund, an employee benefit fund. When the Fund could not collect delinquent contributions from Mahoney & Associates, it sued Mahoney personally, citing a personal liability clause in the agreement. The district court granted summary judgment to the Fund, concluding that Mahoney was personally liable based on the clause.The United States District Court for the Central District of Illinois initially entered judgment on July 31, but it did not comply with Federal Rule of Civil Procedure 58. Mahoney filed a notice of appeal on September 26, and the district court later entered a corrected judgment on October 11. Mahoney filed a second notice of appeal the same day. The district court had awarded the Fund attorneys’ fees based on the trust agreement.The United States Court of Appeals for the Seventh Circuit reviewed the case de novo. The court found that there was a genuine dispute of material fact regarding Mahoney’s intent to be personally bound by the trust agreement, as he signed the memorandum in a representative capacity, which conflicted with the personal liability clause. The court concluded that this issue could not be resolved at summary judgment. The court also addressed Mahoney’s laches defense but found it waived due to his failure to address relevant complications. Consequently, the Seventh Circuit reversed the district court’s grant of summary judgment and vacated the award of attorneys’ fees, remanding the case for further proceedings. View "Railroad Maintenance and Industrial Health & Welfare Fund v. Mahoney" on Justia Law

In 1997, William Brokaw Price’s parents entered into a contract with Carri Scharf Trucking, Inc. (CST) for surface-level mining on their property. The contract allowed CST to extract sand, gravel, and topsoil in exchange for royalty payments. As the contract neared its end in 2010, Bill Price, Brokaw’s father, communicated with CST about future plans for the property but passed away shortly after. Years later, Brokaw discovered that the property had not been reclaimed as required by the contract, leading to a dispute over CST’s reclamation obligations and alleged trespassing.The Prices sued CST for breach of contract, and CST counterclaimed for breach based on the Prices’ trespass accusations. The first trial ended in a mistrial, and the second trial resulted in a verdict for CST. The district court denied the Prices’ motion for judgment as a matter of law and rejected CST’s request for attorney’s fees under the contract’s fee-shifting provision.The United States Court of Appeals for the Seventh Circuit reviewed the case. The court affirmed the district court’s decision, holding that the contract did not set a firm deadline for reclamation and allowed for a jury to resolve factual disputes about the instructions given by Bill Price. The jury had a sufficient basis for its verdict in favor of CST. Additionally, the court held that CST was not entitled to attorney’s fees because the contract’s fee-shifting provision only applied to parties enforcing the contract’s terms, and CST’s successful defense did not trigger that provision. The court affirmed the judgment of the district court in all respects. View "Price v Carri Scharf Trucking, Inc." on Justia Law

Epic Systems Corporation sued Tata Consultancy Services Limited and Tata America International Corporation for unauthorized use of confidential information. A jury awarded Epic $240 million in compensatory damages and $700 million in punitive damages. The district court reduced these amounts to $140 million and $280 million, respectively, and entered judgment in 2017. The Seventh Circuit affirmed the compensatory damages but limited the punitive damages to $140 million, leading to a new judgment in 2022. Tata agreed to pay postjudgment interest on the compensatory damages from 2017 but argued that interest on the punitive damages should start from 2022. The district court sided with Tata, and Epic appealed.The United States Court of Appeals for the Seventh Circuit reviewed the case. The court noted that both the 2017 and 2022 judgments included $140 million in compensatory damages and at least $140 million in punitive damages. The court referenced the Supreme Court's decision in Kaiser Aluminum & Chemical Corp. v. Bonjorno, which held that postjudgment interest should be based on the date when damages became ascertainable. The Seventh Circuit concluded that the $140 million punitive damages were ascertainable from the 2017 judgment, as neither the district court nor the appellate court had ever deemed this amount excessive.The Seventh Circuit reversed the district court's decision and remanded the case with instructions to award postjudgment interest on the $140 million punitive damages starting from October 3, 2017. View "Epic Systems Corporation v Tata Consultancy Services Limited" on Justia Law

Mullins Food Products, Inc. was sued in Illinois state court for violating the Biometric Information Privacy Act (BIPA). Mullins requested its liability insurer, Citizens Insurance Company of America, to defend the suit, but Citizens declined and instead filed a federal suit seeking a declaratory judgment that it had no duty to defend or indemnify Mullins based on exclusions in the commercial liability insurance policies issued to Mullins in 2015, 2016, and 2017. While the federal suit was pending, Mullins settled the state-court action.The United States District Court for the Northern District of Illinois agreed with Citizens that the policy exclusions relieved Citizens of the duty to defend or indemnify Mullins. Specifically, the court found that the Access or Disclosure of Confidential or Personal Information exclusion and the Recording and Distribution of Material or Information in Violation of Law exclusion barred coverage for BIPA claims. The district court also ruled against Mullins on its counterclaim for breach of contract, reasoning that Citizens' timely filing of the declaratory judgment action precluded a finding of breach.The United States Court of Appeals for the Seventh Circuit reviewed the case and vacated the district court's decision. The appellate court concluded that the Access or Disclosure exclusion in the 2016 and 2017 policies barred coverage for BIPA claims, but the Statutory Violations exclusion did not. Therefore, Citizens had a duty to defend and indemnify Mullins under the 2015 policy, assuming Mullins provided timely notice of the state-court action. The appellate court remanded the case for further proceedings to determine the timeliness of Mullins' notice and to address Mullins' claim for reimbursement of defense costs. View "Citizens Insurance Company of America v Mullins Food Products, Inc." on Justia Law

An executive at a litigation funding company, Signal, resigned to start a competing business and sought legal advice from Signal’s outside counsel, Sugar Felsenthal Grais & Helsinger LLP. Signal sued the law firm and several of its attorneys, alleging legal malpractice, breach of contract, breach of fiduciary duty, and fraud. The district court dismissed some claims and granted summary judgment in favor of the defendants on the remaining claims. Signal appealed these rulings.The United States District Court for the Northern District of Illinois dismissed Signal’s breach of fiduciary duty claim and part of its fraud claim, allowing the legal malpractice, breach of contract, and fraudulent misrepresentation claims to proceed. The court also struck Signal’s request for punitive damages. During discovery, the court denied Signal’s motion to compel production of a memorandum prepared by one of the defendants. The district court later granted summary judgment in favor of the defendants on all remaining claims.The United States Court of Appeals for the Seventh Circuit reviewed the case and affirmed the district court’s rulings. The appellate court agreed that Signal failed to establish proximate cause and damages for its legal malpractice and breach of contract claims. The court also found that Signal waived its challenge to the summary judgment ruling on the fraudulent misrepresentation claim by not adequately addressing it on appeal. Additionally, the court upheld the district court’s decision to deny Signal’s motion to compel production of the memorandum, as Signal did not demonstrate that the document influenced the witness’s testimony. The appellate court concluded that the district court’s dismissal of the fraudulent concealment theory was harmless error and denied Signal’s motion to certify a question to the Illinois Supreme Court as moot. View "Signal Funding, LLC v Sugar Felsenthal Grais & Helsinger LLP" on Justia Law

Dr. William Partin filed a lawsuit against Baptist Healthcare System, Inc. and Dr. Daniel Eichenberger after he resigned from his position. Partin alleged that Baptist and Eichenberger retaliated against him in violation of the Emergency Medical Treatment and Active Labor Act (EMTALA) and brought claims under Indiana law for breach of contract, tortious interference with contractual relations, and defamation. The dispute arose from Partin's treatment of a suicidal patient, J.C., in Baptist's emergency department, where Partin ordered procedures against J.C.'s will, leading to complaints from hospital staff.The United States District Court for the Southern District of Indiana granted summary judgment in favor of Baptist and Eichenberger. The court found that no reasonable jury could conclude that Partin engaged in EMTALA-protected activity or that he was retaliated against for such activity. The court also determined that Partin's breach of contract claim failed because the bylaws did not create a contractual relationship between Partin and Baptist, and his resignation was not under duress. Additionally, the court found no evidence to support Partin's claims of tortious interference with contract or defamation.The United States Court of Appeals for the Seventh Circuit reviewed the case and affirmed the district court's decision. The appellate court held that Partin did not engage in EMTALA-protected activity and that his belief in reporting a potential EMTALA violation was not objectively reasonable. The court also agreed that the bylaws did not create a contract between Partin and Baptist and that Partin's resignation was voluntary. Furthermore, the court found that Baptist's actions were justified and not malicious, and that the statements made by Eichenberger and Marksbury were protected by qualified privilege and not made in bad faith. View "Partin v Baptist Healthcare System, Inc." on Justia Law

Overhead Door Company of Indianapolis contracted with Blue Giant Equipment Corporation, a Canadian company, for the purchase of multiple dock levelers. After installation, Overhead experienced issues with the levelers and sued Blue Giant in federal court under diversity jurisdiction for breach of contract and warranty. Blue Giant moved to dismiss, citing a provision in its standard terms requiring arbitration in Ontario, Canada. The district court denied the motion, concluding that the standard terms were not incorporated into the parties' contract.The United States District Court for the Southern District of Indiana reviewed the case and denied Blue Giant's motion to dismiss. The court found that the mere reference to standard terms on a website was insufficient to incorporate those terms into the contract between Overhead and Blue Giant. Blue Giant appealed the decision.The United States Court of Appeals for the Seventh Circuit reviewed the case and reversed the district court's decision. The appellate court held that Blue Giant's reference to its Terms and Conditions on its website was sufficient to incorporate those terms into the contract. The court noted that the reference was conspicuous and provided Overhead with reasonable opportunity to take notice of the terms. The court concluded that the parties were obligated to resolve their dispute through arbitration in Ontario, Canada, as specified in the incorporated terms. The case was reversed and remanded for further proceedings consistent with this opinion. View "Garage Door Systems, LLC v Blue Giant Equipment Corp." on Justia Law