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

Dr. John Insall, an orthopedic surgeon, developed and patented knee replacement devices, which he licensed to Zimmer Biomet Holdings, Inc. In return, Zimmer agreed to pay royalties to Insall, and later to his estate after his death. When Insall’s last patent expired in 2018, Zimmer ceased royalty payments, claiming the obligation had ended. The dispute was submitted to arbitration, where the Estate prevailed. Zimmer then sought to vacate the arbitration award in district court, arguing that continuing royalty payments violated public policy. The district court confirmed the arbitration award.The United States District Court for the Northern District of Illinois reviewed the case. Zimmer argued that the arbitration award should be vacated based on public policy grounds, citing Supreme Court decisions in Brulotte v. Thys Co. and Kimble v. Marvel Entertainment, LLC, which prohibit collecting royalties on expired patents. The district court rejected Zimmer’s argument and confirmed the arbitration award, leading to Zimmer’s appeal.The United States Court of Appeals for the Seventh Circuit reviewed the case. The court emphasized the limited scope of judicial review over arbitration awards under the Federal Arbitration Act (FAA). The court found that the arbitration panel had correctly interpreted the 1998 amendments to the agreement, which untethered the royalty payments from the patents themselves, making them based on the marketing and branding of the NexGen Knee products. Consequently, the court held that the arbitration award did not violate public policy as outlined in Brulotte and Kimble. The Seventh Circuit affirmed the district court’s decision and confirmed the arbitration award in favor of Insall’s Estate. View "Zimmer Biomet Holdings, Inc. v. Insall" on Justia Law

Consolidated Grain and Barge Company (Consolidated) entered into multiple agreements with the Indiana Port Commission (Commission) to build new rail tracks at the Southwind Maritime Centre. In exchange, Consolidated received the right to perform rail switching services for other tenants, allowing it to recoup its investment through service fees. However, in 2021, the Commission hired a new rail service provider, Squaw Creek Southern Railroad, to maintain the tracks and perform rail services, prompting Consolidated to sue, alleging breach of contract.The United States District Court for the Southern District of Indiana dismissed the case, finding that the plain meaning of the agreements did not support Consolidated's claims. The court determined that the agreements did not grant Consolidated perpetual rights to perform its own switching services at no cost, especially after the Commission exercised its right to hire a new rail service provider.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 the 2008 New Storage Tracks Agreement unambiguously revoked Consolidated's lease rights over the storage tracks, and any right to perform switching services was tied to the now-expired 2006 Track Use Agreement. The court also found that the Commission had followed the proper procedure in hiring a new rail service provider, as stipulated in the agreements. Consequently, Consolidated's rights to perform its own switching services were extinguished in 2021, and the contracts were not ambiguous as a matter of law. The court also rejected Consolidated's promissory estoppel claim, as it was based on the interpretation of the existing contracts. View "Consolidated Grain and Barge Co. v. Indiana Port Commission" on Justia Law

The case revolves around a dispute over attorney's fees in a Social Security disability benefits case. The plaintiff, Christian Arnold, was represented by the law firm Binder & Binder. After Arnold was determined to be disabled and entitled to past-due benefits, the law firm requested attorney's fees under 42 U.S.C. § 406(b), based on a contingency fee agreement Arnold had signed. However, the district court reduced the requested fees by nearly sixty percent, arguing that the full request would result in a "windfall" for the law firm, which was prohibited by statute. Binder & Binder appealed this decision.The case was initially heard by an administrative law judge (ALJ) who concluded that Arnold was not disabled. Arnold appealed this decision to the district court, which remanded the case back to the ALJ. On remand, the ALJ ruled in Arnold's favor, and the Social Security Administration issued a Notice of Award to Arnold for past-due benefits. Binder & Binder then moved for attorney's fees in the district court under 42 U.S.C. § 406(b), based on their contingency fee agreement with Arnold. The district court, however, reduced the requested fees.The United States Court of Appeals for the Seventh Circuit reviewed the case and concluded that the district court had abused its discretion by not basing its analysis primarily on the contingency agreement before considering the reasonableness of the request. The Court of Appeals vacated the district court's decision and remanded the case for further proceedings consistent with its opinion. The court emphasized that the contingency fee agreement should be the starting point for determining reasonableness under § 406(b), and any reduction should be justified based on relevant factors such as the claimant's satisfaction with their attorney's representation, the attorney's expertise and efforts expended, and the uncertainty of recovery and risks of an adverse outcome. View "Arnold v. O'Malley" on Justia Law

The case revolves around a dispute between Zimmer Biomet, a medical-device manufacturer, and six of its former sales distributors. The dispute arose from a compensation agreement that guaranteed the distributors a lifetime of long-term commissions on all sales made within their distributorship after retirement. As the company grew and acquired competitors, a disagreement emerged over which product categories fell within the distributorship and were thus subject to the long-term commission agreement.The district court found the agreement ambiguous and sent the case to trial. The jury returned a split verdict, finding that Biomet owed long-term commissions on some products but not others. Biomet appealed the denials of its motions for summary judgment and judgment as a matter of law, and the distributors cross-appealed the dismissal of two counts of their complaint.The United States Court of Appeals for the Seventh Circuit affirmed the district court's decisions. The appellate court agreed that the distributorship agreement was ambiguous regarding the specific categories of products it covered. It also found that the trial record supported the jury’s verdict in favor of the distributors on their Indiana breach-of-contract claim. The court rejected Biomet's argument that the agreement unambiguously limited long-term commissions to reconstructive products, finding that the agreement did not provide clear guidance on which product categories were covered. The court also upheld the dismissal of two counts in the distributors’ complaint, finding that they either lacked a contractual basis or were duplicative of another count. View "Hess v. Biomet, Inc." on Justia Law

The case involves John Doe, a student who was expelled from Loyola University Chicago after the university concluded that he had engaged in non-consensual sexual activity with Jane Roe, another student. Doe sued the university under Title IX of the Education Amendments Act of 1972 and Illinois contract law, alleging that the university discriminates against men.The United States District Court for the Northern District of Illinois granted summary judgment in favor of Loyola. Doe appealed this decision to the United States Court of Appeals for the Seventh Circuit. The appellate court, however, raised questions about the use of pseudonyms by the parties and the mootness of the case, given that Doe had already graduated from another university and the usual remedy of readmission was not applicable.The Seventh Circuit Court of Appeals remanded the case back to the district court to address these issues. The court questioned whether compensatory damages were an option for Doe, and if not, the case may not be justiciable. The court also questioned the use of pseudonyms, stating that while anonymity may be common in Title IX suits, it must be justified in each case. The court noted that the public has a right to know who is using their courts and that a desire to keep embarrassing information secret does not justify anonymity. The court also raised concerns about whether revealing Doe's identity would indirectly reveal Roe's identity. The court concluded that these issues should be addressed by the district court. View "Doe v. Loyola University Chicago" on Justia Law

In 2003, the City of Chicago contracted with Walsh Construction Company to manage the construction of a canopy and curtain wall system at O’Hare International Airport. Walsh subcontracted with LB Steel, LLC to fabricate and install steel columns to support the wall and canopy. Several years into the project, the City discovered cracks in the welds of the steel columns and sued Walsh for breaching its contract. Walsh, in turn, sued LB Steel under its subcontract. Walsh also asked LB Steel’s insurers to defend it in the City’s lawsuit, but they never did. Walsh eventually secured a judgment against LB Steel, which led it to declare bankruptcy. Walsh then sued LB Steel’s insurers to recover the costs of defending against the City’s suit and indemnification for any resulting losses.The district court granted summary judgment in favor of the plaintiff insurers on both issues. The court reasoned that, because the physical damage at issue was limited to LB Steel’s own products, it did not constitute “property damage” as that term appears in the policies, thereby precluding coverage. As for the duty to defend, the court determined that the Insurers had none, because the City’s underlying claims did not implicate potential coverage under LB Steel’s policies.The United States Court of Appeals for the Seventh Circuit affirmed the district court's decision. The court concluded that the defects in the welds and columns do not constitute “property damage” under LB Steel’s commercial general liability (CGL) policies. The court also found that the insurers had no duty to defend Walsh in the City’s underlying suit. The court further affirmed the district court's denial of Walsh’s request for sanctions under § 155. View "St. Paul Guardian Insurance Company v. Walsh Construction Company" on Justia Law

The case involves Songie Adebiyi, a former Vice President of Student Services at South Suburban College in Illinois, who was terminated in 2019 due to alleged performance issues. Adebiyi claimed that her termination was in retaliation for filing a charge with the United States Equal Employment Opportunity Commission and the Illinois Department of Human Rights. She sued the college and its president, alleging racial discrimination and retaliation under 42 U.S.C. § 1981 and Title VII of the Civil Rights Act of 1964, as well as breach of contract.The United States District Court for the Northern District of Illinois granted summary judgment to the college and its president, ruling that Adebiyi failed to show a causal link between her charge of discrimination and her termination. The court found that the evidence did not support Adebiyi’s retaliation claim. Adebiyi appealed the decision, arguing that the district court erred in dismissing her Title VII retaliation claim and abused its discretion when it denied her motion to amend the complaint and seek more discovery.The United States Court of Appeals for the Seventh Circuit affirmed the judgment of the district court. The appellate court agreed with the lower court's finding that Adebiyi failed to demonstrate a causal link between her protected activity and the adverse employment action. The court found no evidence of pretext in the college's reasons for termination or suspicious timing between Adebiyi's filing of her EEOC and IDHR charge and her termination. The court also found no abuse of discretion in the district court's denial of Adebiyi's motion to file an amended complaint and take additional discovery. View "Adebiyi v. South Suburban College" on Justia Law

The United States Court of Appeals for the Seventh Circuit heard an appeal from Bulk Transport Corp. against Teamsters Union No. 142 Pension Fund and its Trustees. The dispute originated from two collective-bargaining agreements between Bulk Transport and Teamsters Local 142, active from 2003 to 2006. The Union insisted that Bulk Transport apply one such agreement, the Steel Mill Addendum, to non-steel mill work (LISCO work), which Bulk Transport initially did, subsequently making pension contributions on behalf of the LISCO workers. However, when Bulk Transport lost the LISCO contract, they ceased these contributions, leading to the Pension Fund assessing a withdrawal liability of about $2 million under the Multiemployer Pension Plan Amendments Act (MPPAA).After arbitration, Bulk Transport paid but demanded a review of the decision. The district court agreed with the arbitrator's ruling that Bulk Transport had adopted the Addendum by conduct, and thus the Pension Fund was entitled to the withdrawal liability. The district court also denied Bulk Transport's request for a refund.The Seventh Circuit, however, reversed the district court's decision. It held that the written agreement, not the practice or conduct, should dictate the terms of pension contributions to multi-employer plans. The written agreement in this case did not cover the LISCO work, and the court rejected the argument that Bulk Transport's conduct altered the substantive terms of the agreement. The court held that the writings were conclusive and that employers and unions could not opt-out of the requirements orally or through their course of conduct. The court affirmed the district court's denial of attorney's fees for the Pension Fund and remanded the case with instructions to order the Pension Fund to repay the withdrawal liability it collected from Bulk Transport. View "Bulk Transport, Corp. v. Teamsters Union Local 142" on Justia Law

The case concerns a dispute between LKQ Corporation and its former Plant Manager, Robert Rutledge, who resigned from the company and joined a competing firm. LKQ sought to recover proceeds Rutledge realized from multiple stock sales over many years, based on a forfeiture-for-competition provision in their Restricted Stock Unit Agreements.The key legal issue revolves around the applicability of Delaware law on forfeiture-for-competition provisions. These provisions require former employees to forfeit a monetary benefit upon joining a competitor. The Delaware Supreme Court held in a recent case that such provisions are not subject to a reasonableness review. However, the United States Court of Appeals for the Seventh Circuit found it unclear whether this ruling applies outside the context of highly sophisticated parties.The Court of Appeals affirmed the lower court's judgment in favor of Rutledge on the breach of the Restrictive Covenant Agreements and unjust enrichment claims. However, due to the complexity of the Delaware law issue, the Court decided to certify questions to the Delaware Supreme Court for clarification. Specifically, the certified questions ask whether the Delaware Supreme Court's ruling on forfeiture-for-competition provisions applies outside the limited partnership context and, if not, what factors inform its application. View "LKQ Corporation v. Rutledge" on Justia Law

This case involves a group of plaintiffs who were minors at the time their guardians purchased and activated DNA test kits from Ancestry.com. The plaintiffs, through their guardians, provided their DNA samples to Ancestry.com for genetic testing and analysis. The plaintiffs later sued Ancestry.com, alleging that the company violated their privacy rights by disclosing their confidential genetic information to another business. Ancestry.com moved to compel arbitration based on a clause in its Terms & Conditions agreement, which the plaintiffs' guardians had agreed to when they purchased and activated the test kits.The United States Court of Appeals for the Seventh Circuit, applying Illinois law, held that the plaintiffs were not bound to arbitrate their claims under the agreement between their guardians and Ancestry.com. The court reasoned that the plaintiffs neither signed the agreement nor created Ancestry.com accounts, and did not independently engage with Ancestry.com's services. Furthermore, the court refused to bind the plaintiffs to the agreement based on equitable principles, including the doctrine of direct benefits estoppel. The court noted that while the plaintiffs theoretically could benefit from Ancestry.com's services, there were no allegations that the plaintiffs had actually accessed their DNA test results.The court therefore affirmed the district court's decision denying Ancestry.com's motion to compel arbitration. The court's holding clarified that under Illinois law, a minor cannot be bound to an arbitration agreement that their guardian agreed to on their behalf, unless the minor independently engaged with the services provided under the agreement or directly benefited from the agreement. View "Coatney v. Ancestry.com DNA, LLC" on Justia Law