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

The Commodity Futures Trading Commission settled a civil action against Kraft. The consent decree includes a provision: Neither party shall make any public statement about this case other than to refer to the terms of this settlement agreement or public documents filed in this case, except any party may take any lawful position in any legal proceedings, testimony or by court order. The Commission issued a press release announcing the suit’s resolution. Kraft asked the judge to hold the Commission and Commissioners in contempt of court for issuing the press release and concurring statements. The judge scheduled a hearing and directed Chairman Tarbert, two Commissioners, the Commission’s Director of Enforcement, and other employees to appear and testify under oath. The judge stated that he would administer Miranda warnings to these witnesses in preparation for a finding of criminal contempt and would demand that the witnesses explain the thinking behind the press release and the separate statements. The Seventh Circuit granted mandamus relief, in part. There is neither need nor justification for testimony by the Chairman, any Commissioners, or any members of the agency’s staff. Under 7 U.S.C. 2(a)(10)(C), every member of the Commission has a right to publish an explanation of his vote, so the consent decree could not operate to silence individual Commission members. The court declined to order the district court to close the contempt proceeding. View "Commodity Futures Trading Commission v. Blakey" on Justia Law

For nearly 30 years, Chicago Studio operated the only film studio in Chicago. In 2010, Cinespace opened a new studio. Cinespace rapidly expanded its studio to include 26 more stages and 24 times more floor space than Chicago Studio’s facility. Chicago Studio subsequently failed to attract business and stopped making a profit. Chicago Studio sued the Illinois Department of Commerce and Economic Opportunity, Illinois Film Office, and Steinberg (state actors responsible for promoting the Illinois film industry), alleging that the Defendants unlawfully steered state incentives and business to Cinespace in violation of the Sherman Act and equal protection and due process protections. The Seventh Circuit affirmed the rejection of those claims. The Sherman Act claim was properly dismissed because Chicago Studio failed to adequately plead an antitrust injury but merely alleged injuries to Chicago Studio, not to competition. The complaint does not plausibly allege that Defendants conspired to monopolize or attempted to monopolize the Chicago market for operating film studios. The district court properly granted summary judgment on the equal protection claim. Chicago Studio and Cinespace are not similarly situated, and there was a rational basis for Steinberg’s conduct. Cinespace consistently reached out to Steinberg for marketing support; Chicago Studio rarely did and it was rational for Steinberg to promote the studios based on production needs. View "Chicago Studio Rental, Inc. v. Illinois Department of Commerce & Economic Opportunity" on Justia Law

Tracking a fugitive, Deputy Marshal Linder interrogated the fugitive’s father. Another deputy saw Linder punch the father. Linder was indicted for witness tampering and using excessive force and was put on leave. McPherson, the U.S. Marshal for the Northern District of Illinois, instructed other deputies not to communicate with Linder or his lawyers without approval. The indictment was dismissed as a sanction. Linder returned to work. Linder filed a “Bivens action,” against McPherson and a suit against the government under the Federal Tort Claims Act, 28 U.S.C. 1346(b). The district court dismissed all of Linder’s claims. The Seventh Circuit affirmed against the government alone. Section 2680(a) provides that the Act does not apply to “[a]ny claim ... based upon the exercise or performance or the failure to exercise or perform a discretionary function or duty on the part of a federal agency or an employee of the Government, whether or not the discretion involved be abused.” In deciding when federal employees needed permission to talk with Linder or his lawyer, McPherson exercised a discretionary function. The court rejected arguments that the discretionary function exemption does not apply to malicious prosecution suits. “Congress might have chosen to provide financial relief to all persons who are charged with crimes but never convicted. The Federal Tort Claims Act does not do this.” View "Linder v. McPherson" on Justia Law

Brown is the sole owner and operator of a credit-monitoring service. Brown’s websites used a “negative option feature” to attract customers, offering a “free credit report and score” while obscuring in much smaller text that applying for this “free” information automatically enrolled customers in a $29.94 monthly “membership” subscription for Brown’s credit-monitoring service. Customers learned this information only when he sent them a letter after they were automatically enrolled. Brown’s most successful contractor capitalized on the confusion by posting Craigslist advertisements for fake rental properties and telling applicants to get a “free” credit score from Brown’s websites. The FRC sued Brown under the Federal Trade Commission Act, 15 U.S.C. 53(b). The district judge found that Brown was a principal for his contractor’s fraudulent scheme and that the websites failed to meet certain disclosure requirements in the Restore Online Shopper Confidence Act (ROSCA), 15 U.S.C. 8403. The judge entered a permanent injunction and ordered Brown to pay more than $5 million in restitution to the Commission. The Seventh Circuit affirmed as to liability and the issuance of a permanent injunction but, overruling precedent, vacated the restitution award. Section 13(b) authorizes only restraining orders and injunctions. The FTCA has two detailed remedial provisions that expressly authorize restitution if the Commission follows certain procedures. Adherence yp stare decisis should not allow the Commission to circumvent these elaborate enforcement provisions. View "Federal Trade Commission v. Credit Bureau Center, LLC" on Justia Law

NFA is a self‐regulatory organization registered under the Commodity Exchange Act, subject to the authority of the Commodity Futures Trading Commission (CFTC), 7 U.S.C. 21, including review of NFA disciplinary actions. Effex, a closely held, foreign‐currency trading firm controlled by Dittami, is not subject to NFA regulation. NFA determined that its member, FXCM, had violated NFA rules. NFA released several documents related to a settlement, including allegations that Effex was involved in FXCM's misconduct. The press release did not specifically reference Effex but directed the public to the NFA’s website. Effex alleged that NFA’s findings are false and that their publication was defamatory. NFA had not contacted Effex or provided Effex notice of the investigation. CFTC conducted its own investigation, subpoenaed documents from Effex, and took the depositions of Dittami and other Effex employees. Effex alleged that NFA obtained documents from CFTC despite Effex’s request that its responses as a third party be kept confidential. CFTC issued its decision, finding that FXCM had concealed an improper trading relationship with a “high‐frequency trader” and the trader's company (HFT). Although not explicitly named, HFT is Effex. CFTC found materially the same facts as NFA did regarding Effex. The Seventh Circuit affirmed the dismissal of the suit. The Commodity Exchange Act regulates comprehensively all matters relating to NFA discipline, so a federal Bivens remedy is unavailable, and preempts Effex’s state law claims. View "Effex Capital, LLC v. National Futures Association" on Justia Law

Crump applied for social security disability benefits based on her long history of numerous mental health impairments, including bipolar disorder and polysubstance abuse disorder. An administrative law judge denied benefits, finding that Crump, despite her severe impairments, could perform work limited to simple and repetitive tasks. The district court affirmed. The Seventh Circuit vacated. The ALJ did not adequately account for Crump’s difficulties with concentration, persistence, or pace in the workplace. An ALJ generally may not rely merely on catch-all terms like “’simple, repetitive tasks’” because there is no basis to conclude that they account for problems of concentration, persistence or pace. In addition, observing that a person can perform simple and repetitive tasks says nothing about whether the individual can do so on a sustained basis. Beyond disregarding the Vocational Expert’s opinion in response to a second hypothetical, the ALJ gave short shrift to the medical opinions of Crump’s treating psychiatrist. View "Crump v. Saul" on Justia Law

Chronis visited the University of Illinois Health Center for an examination that included a pap smear. Chronis alleges the procedure caused her pain and bruising. She claims that the Center did not return her calls or allow her to make a follow‐up appointment. Chronis filed an unsuccessful complaint with the Center’s grievance committee, requesting $332 for expenses that she incurred because of the injury. Chronis then sent a letter to the Centers for Medicare and Medicaid Services, requesting assistance concerning documented ignorance of policy and procedures. Though her letter mentioned her injuries, it focused on the Center’s lack of responsiveness. She included a general statement that she wanted assistance in “receiving the restitution.” Chronis attached roughly 60 pages of documents, one of which mentioned that Chronis had previously sought $332. CMS directed her to the Illinois Department of Financial and Professional Regulation to file a formal complaint and invited Chronis to follow up for additional assistance. Six months later, Chronis filed a pro se complaint, alleging malpractice. Because the Center receives funds from the Public Health Service, the United States substituted itself as the defendant and removed the case to proceed under the Federal Tort Claims Act, 42 U.S.C. 233; 28 U.S.C. 1346. The Seventh Circuit affirmed the dismissal of the case because Chronis had not exhausted her administrative remedies in that she had failed to first present her claim to the appropriate federal agency. Her letter to CMS did not meet this requirement of making an administrative demand. View "Chronis v. United States" on Justia Law

Krell, a former ironworker, applied for Social Security disability benefits. Krell was notified that a vocational expert would testify at his hearing and that Krell had the right to request a subpoena for documents or testimony “that you reasonably need to present your case.” Krell’s counsel requested a subpoena to require the vocational expert to produce documents upon which the expert may rely in forming opinions, including statistics, reports, surveys, summaries, work product, and a description of the methodologies used by publishers or compilers of the statistics. The ALJ did not respond. At the hearing, the ALJ denied the request, reasoning that it had not specified what the documents would show and why these facts could not be shown without a subpoena and that counsel could challenge the testimony post‐hearing. During cross‐examination, the vocational expert stated that to determine available job numbers, he relied on Wisconsin occupational projections produced by the Department of Workforce Development. Krell made no post‐hearing challenge. The ALJ found that Krell was disabled and entitled to benefits, but only as of 2014, rather than 2011. Based on the expert’s testimony, the ALJ concluded that up to 2014, Krell was able to perform work existing in significant numbers in the economy. The Social Security Appeals Council denied review. The district court concluded that the ALJ had erred in denying Krell’s subpoena request. The Seventh Circuit reversed. While Krell’s case was pending, the Supreme Court held (Biestek) that a vocational expert is not categorically required to produce his supporting data. Krell advanced no reason why it was necessary for the expert to produce his underlying sources. View "Krell v. Saul" on Justia Law

In 2005 Paramount leased a parcel of highway-adjacent property in Bellwood, Illinois, planning to erect a billboard. Paramount never applied for a local permit. When Bellwood enacted a ban on new billboard permits in 2009, Paramount lost the opportunity to build its sign. Paramount later sought to take advantage of an exception to the ban for village-owned property, offering to lease a different parcel of highway-adjacent property directly from Bellwood. Bellwood accepted an offer from Image, one of Paramount’s competitors. Paramount sued Bellwood and Image, alleging First Amendment, equal-protection, due-process, Sherman Act, and state-law violations. The Seventh Circuit affirmed summary judgment in favor of the defendants. Paramount lost its lease while the suit was pending, which mooted its claim for injunctive relief from the sign ban. The claim for damages was time-barred, except for an alleged equal-protection violation. That claim failed because Paramount was not similarly situated to Image; Paramount offered Bellwood $1,140,000 in increasing installments over 40 years while Image offered a lump sum of $800,000. Bellwood and Image are immune from Paramount’s antitrust claims. The court did not consider whether a market-participant exception to that immunity exists because Paramount failed to support its antitrust claims. View "Paramount Media Group, Inc. v. Village of Bellwood" on Justia Law

American, a Cincinnati-based title insurance company, is owned by attorneys Yonas and Rink. The Indiana Department of Insurance randomly audited American and found hundreds of code violations, none of which American denies. Examiners recommended a fine of $70,082 plus $42,202 in consumer reimbursements after deviating upward from the guidelines recommendation. After negotiation, the examiners refused to adjust the fines and added a new sanction: the owners would lose their licenses to do business in Indiana. The Department’s attorney informed American that it could seek administrative review but could face the maximum fine of $9.5 million. American agreed to the recommended sanctions, “voluntarily and freely waive[d] the right to judicial review,” and paid the fees. Yonas and Rink gave up their licenses. Months later, American sued the Department’s Commissioner, Robertson, alleging that the Department imposed higher penalties because American is based in Ohio, not Indiana. American’s equal-protection case rested on expert testimony based on a statistical analysis that found that when the Department audits out-of-state companies, it tends to deviate more from its guidelines than when it audits in-state companies; a comment by a Department examiner made during a recorded phone call; and that Robertson was unable to say definitively during his deposition that no one in his department was motivated by in-state bias. The Seventh Circuit affirmed summary judgment for Robertson without reaching the equal protection claim. American offered no meaningful reason to ignore the agreed order. View "American Homeland Title Agency, Inc. v. Robertson" on Justia Law