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

Schock resigned from Congress in 2015, after disclosures about trips he took at public expense, the expense of his elaborate office furnishings, and how he had applied campaign funds. Schock was charged with mail and wire fraud, theft of government funds, making false statements to Congress and the Federal Elections Commission, and filing false tax returns. Schock moved to dismiss the indictment, arguing that the charges are inconsistent with the Constitution’s Speech or Debate Clause and with the House of Representatives’ constitutional authority to determine the rules of its proceedings. The Seventh Circuit affirmed the denial of the motion. The indictment arises out of applications for reimbursements, which are not speeches, debates, or any other part of the legislative process. Submitting a claim under established rules differs from the formulation of those rules. The foundation for Schock’s rule-making” argument—the proposition that if Body A has sole power to make a rule, then Body A has sole power to interpret that rule—does not represent established doctrine. “ Judges regularly interpret, apply, and occasionally nullify rules promulgated by the President or another part of the Executive Branch, as well as statutes enacted by the Legislative Branch; why would reimbursement rules be different?” View "United States v. Schock" on Justia Law

Quinn applied to become an Indianapolis firefighter. He passed the written examination, oral interview, and Certified Physical Agility Test and was placed on a ranked list for hiring consideration. The Department hired two academy classes from that ranked list, but Quinn was not selected. Quinn’s father (Rodney) filed a qui tam suit under the False Claims Act, 31 U.S.C. 3730(h)(1), alleging that the Department had made false statements of material fact to the federal government in order to receive federal grant funds. Rodney was a backup investigator in the Department’s arson unit. Quinn joined his father’s suit, alleging that the Department retaliated against him for his father’s complaint. The district court granted the Department summary judgment on Quinn’s retaliation claim. The Seventh Circuit affirmed. Quinn was ranked, at best, five spots too low to receive an automatic selection and every discretionary pick in both classes had more markers than Quinn, consistent with the Department’s policy for discretionary selections. There is no evidence from which a reasonable jury could conclude that Rodney’s suit was even a motivating factor in the decision not to hire Quinn. Even assuming that the meaning of “employee” under section 3730(h) is could encompass job applicants, there are no facts from which a jury could conclude that Quinn was retaliated against because of his father’s suit. View "Heath v. Indianapolis Fire Department" on Justia Law

In “Citadel” the Seventh Circuit held that “the district court did not abuse its discretion in dismissing [the] case [of certain securities firms] for failure to exhaust administrative remedies.” After that decision, Securities Firms filed a petition before the Securities and Exchange Commission (SEC) seeking damages, claiming the Exchanges improperly imposed fees under Payment for Order Flow programs. The SEC dismissed that petition for lack of jurisdiction. The Exchanges, citing CitadeI, maintained the SEC had jurisdiction under Section 19(h)(1) of the Securities Exchange Act because the petition sought a determination that the Exchanges had violated their own rules. The SEC reasoned that Section 19(d), which authorizes it to review allegations that a national exchange has unduly “prohibit[ed] or limit[ed] … access to services,” 15 U.S.C. 78s(d)(1), did not apply; the petition did not allege that the Exchanges had denied or limited access to any service. The SEC further stated that seeking damages was “incongruous with” the SEC’s Section 19(d) remedial authority and that section 78s(h)(1) does not authorize claims by private parties. The Seventh Circuit affirmed, “the Petition alleges, in effect, a billing dispute” between two private parties, and requests the SEC order the Exchanges to pay damages for improperly charging fees under their PFOF programs. View "Chicago Board Options Exchange v. Securities and Exchange Commission" on Justia Law

During the 2008 financial crisis, Congress created the Federal Housing Finance Agency and authorized it to place into conservatorship the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation (Fannie Mae and Freddie Mac), 12 U.S.C. 4617(a) and empowered the U.S. Treasury to purchase their “obligations and other securities” through 2009. In exchange for a cash infusion and fixed funding commitment for each enterprise, Treasury received senior preferred shares and extraordinary governance and economic rights, including the right to receive dividends tied to the amount of Treasury’s payments. As Fannie and Freddie’s capital needs grew, Treasury agreed to modify the original agreements. The First and Second Amendments primarily increased Treasury’s funding commitment. The third modification, made after Treasury’s purchasing authority expired, set Treasury’s dividend rights equal to the companies’ outstanding net worth. Plaintiffs, private shareholders of Fannie and Freddie, sued, claiming that the Agency violated its duties by agreeing to the net‐worth dividend and by unlawfully succumbing to the direction of Treasury and that Treasury exceeded its statutory authority and failed to follow proper procedures. The Seventh Circuit affirmed dismissal. Section 4617(f) bars “any” judicial interference with the “exercise of powers or functions of the Agency as a conservator.” The purpose of the conservatorship is the “reorganizing, rehabilitation, or winding up” of the companies’ affairs, not just the preservation of assets. Wiping out Treasury’s acceptance of the original agreements or the Third Amendment would undermine the conservatorships. View "Roberts v. Federal Housing Finance Agency" on Justia Law

The Byrne Memorial Justice Assistance Grant Program allocates substantial funds annually to provide for the needs of state and local law enforcement, including personnel, equipment, training. In 2017, the Attorney General tied receipt of the funds to the recipient’s compliance with conditions. Chicago, a “sanctuary city,” argued the conditions were unlawful and unconstitutional. The district court agreed and enjoined, nationwide, the enforcement of a condition mandating advance notice to federal authorities of the release date of persons in state or local custody who are believed to be aliens and a condition requiring the local correctional facility to ensure agents access to such facilities to meet with those persons. Compliance with those conditions would require the allocation of state and local resources, including personnel. The Seventh Circuit affirmed, noting that it was not assessing “optimal immigration policies” but enforcing the separation of powers doctrine. The statute precisely describes the formula through which funds should be distributed to states and local governments and imposes precise limits on the extent to which the Attorney General can deviate from that distribution. It “is inconceivable that Congress would have anticipated" that the Attorney General could abrogate the distribution scheme and deny funds to states and localities that would qualify under the Byrne JAG statutory provisions, based on a decision to impose conditions—the putative authority for which is provided in another statute (34 U.S.C. 10102(a)(6)). View "City of Chicago v. Sessions" on Justia Law

University Park hired Linear as its Village Manager through May 2015, concurrent with the term of its Mayor. In October 2014 the Village extended Linear’s contract for a year. In April 2015 Mayor Covington was reelected. In May, the Board of Trustees decided that Linear would no longer be Village Manager. His contract provides for six months’ severance pay if the Board discharges him for any reason except criminality. The Village argued that the contract’s extension was not lawful and that it owes Linear nothing. The district court agreed and rejected Linear’s suit under 42 U.S.C. 1983, reasoning that 65 ILCS 5/3.1-30-5; 5/8-1-7 prohibit a village manager's contract from lasting beyond the end of a mayor’s term. The Seventh Circuit affirmed on different grounds. State courts should address the Illinois law claims. Linear’s federal claim rests on a mistaken appreciation of the role the Constitution plays in enforcing state-law rights. Linear never had a legitimate claim of entitlement to remain as Village Manager. His contract allowed termination without cause. His entitlement was to receive the contracted-for severance pay. Linear could not have a federal right to a hearing before losing his job; he has at most a right to a hearing to determine his severance pay--a question of Illinois law. View "Linear v. Village of University Park" on Justia Law

The Mayor of Chicago appoints the city’s Board of Education, 105 ILCS 5/34-3. Until 1995, the Mayor needed the consent of the City Council; now the Mayor acts independently. Plaintiffs claimed that the system violated the Voting Rights Act, 52 U.S.C. 10301 (section 2). School boards elsewhere in Illinois are elected; plaintiffs say that failure to elect the school board in Chicago has a disproportionate effect on minority voters. The Seventh Circuit affirmed the dismissal of the complaint. Section 2(a) covers any “voting qualification or prerequisite to voting or standard” that results in an abridgment of the right to vote; it does not guarantee that any given public office be filled by election rather than appointment, a civil service system, or some other means. Whether having an appointed board is “good government” or good for pupils is irrelevant to the Act. While more minority citizens live in Chicago than in other Illinois cities and do not vote for school board members, neither does anyone else. Every member of the electorate is treated identically, which is what section 2 requires. View "Quinn v. Board of Education of the City of Chicago" on Justia Law

The Mayor of Chicago appoints the city’s Board of Education, 105 ILCS 5/34-3. Until 1995, the Mayor needed the consent of the City Council; now the Mayor acts independently. Plaintiffs claimed that the system violated the Voting Rights Act, 52 U.S.C. 10301 (section 2). School boards elsewhere in Illinois are elected; plaintiffs say that failure to elect the school board in Chicago has a disproportionate effect on minority voters. The Seventh Circuit affirmed the dismissal of the complaint. Section 2(a) covers any “voting qualification or prerequisite to voting or standard” that results in an abridgment of the right to vote; it does not guarantee that any given public office be filled by election rather than appointment, a civil service system, or some other means. Whether having an appointed board is “good government” or good for pupils is irrelevant to the Act. While more minority citizens live in Chicago than in other Illinois cities and do not vote for school board members, neither does anyone else. Every member of the electorate is treated identically, which is what section 2 requires. View "Quinn v. Board of Education of the City of Chicago" on Justia Law

Cannici was a Melrose Park firefighter for 16 years before being terminated for violation of the Residency Ordinance. Cannici and his family lived in Melrose Park until 2008 when they bought a home in Orland Park while retaining ownership of their Melrose Park home. During the week, Cannici’s wife and children lived in Orland Park, while Cannici lived in Melrose Park, spending weekends together in one of the homes. In 2013, Cannici rented the Melrose Park home out, reserving part of the basement for his exclusive use. He kept belongings in the home, paid utilities and taxes, and received all of his mail at the Melrose Park address, but slept in Orland Park between June 2013 and June 2016. In May 2016, the Village requested an interview to inquire about his residency. The Board of Fire and Police Commissioners issued a written Statement of Charges, seeking to terminate his employment. Before his hearing, Cannici filed an unsuccessful motion challenging purported ex parte communications between the prosecuting attorney and the Board’s attorney. The Seventh Circuit affirmed the dismissal of Cannici’s equal protection and due process claims. The Illinois statute does not provide full protection from termination; the Village afforded Cannici what the statute requires: written charges, a hearing, and the opportunity to present evidence. View "Cannici v. Village of Melrose Park" on Justia Law

The National Organic Standards Board, an advisory committee, has 15 members, all appointed by the Secretary of Agriculture, 7 U.S.C.6518(b), (c); its principal task is advising the Secretary what belongs on the “National List of approved and prohibited substances that shall be included in the standards for organic production and handling” Plaintiffs, who operate organic farms, asked the Secretary to appoint them to the Board, but the Secretary appointed Beck and Swaffar. Plaintiffs contend that Beck and Swaffar are ineligible to fill the seats to which they were appointed. The Seventh Circuit affirmed the dismissal of the suit for lack of standing. Beck and Swaffer, appointed to seats reserved for “individuals who own or operate an organic farming operation,” were office employees of agribusinesses that produce some organic products and some non-organic products. Plaintiffs argued that by deflecting the Board from making recommendations most likely to promote organic farmers’ interests, Beck and Swaffar have called organic-farming into disrepute and reduced organic sales; that is not the kind of person-specific loss needed to show standing. Any injury plaintiffs assert could not be redressed by a favorable decision. The Secretary has a statutory right to appoint Board members but no corresponding duty to evaluate any particular applicant. View "Cornucopia Institute v. United States Department of Agriculture" on Justia Law