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

Emerald had an Illinois gaming license to operate in East Dubuque. Emerald operated profitably in 1993 but then struggled to compete with an Iowa casino. By 1996, Emerald had closed the casino and was lobbying for an act that would allow it to relocate. The Board denied Emerald’s license renewal application. While an appeal was pending, 230 ILCS 10/11.2 was enacted, permitting relocation. In 1998, before the enactment, defendants met with Rosemont’s mayor and representatives of Rosemont corporations about moving to Rosemont. After the enactment, the parties memorialized the terms of Emerald’s relocation. Emerald did not disclose the agreements as required by Illinois Gaming Board rules. By October 1999, Emerald had contracts with construction companies and architecture firms but had not disclosed them. Emerald altered its ownership structure; several new “investors” had connections to Rosemont’s mayor and state representative. stock transfers occurred without required Board approval. In 2001, the Board voted to revoke Emerald’s license. Its 15-month investigation was apparently based on a belief that Emerald had associated with organized crime but the denial notice focused on inadequate disclosures. The Board listed five counts but did not list who was responsible for which violation. Illinois courts affirmed the revocation but held that the Board had not proven an association with organized crime. Emerald was forced into bankruptcy. The trustee sued the defendants, asserting breach of contract and breach of fiduciary duty. The district court dismissed the breach‐of‐fiduciary‐duty claim as time-barred. The Shareholder’s Agreement required that shareholders comply with IGB rules; the court held that each defendant had violated at least one rule, calculated damages by valuing Emerald’s license, and held all but one defendant severally liable for the loss. The Seventh Circuit concluded that the defendants should be held jointly and severally liable, but otherwise affirmed. View "Estate of Pedersen v. Gecker" on Justia Law

Plaintiffs purchased Illinois nursing homes and obtained new state licenses and federal Medicare provider numbers. Most of the residents in the 10 homes qualify for Medicaid assistance. The Illinois Department of Healthcare and Family Services (IDHFS) administers Medicaid funds under 42 U.S.C. 1396-1396w-5, reimbursing nursing homes for Medicaid-eligible expenses on a per diem basis. The rate must be calculated annually based on the facility's costs. When ownership of a home changes, state law requires IDHFS to calculate a new rate based on the new owner’s report of costs during at least the first six months of operation. The Medicaid Act requires states to use a public process, with notice and an opportunity to comment, in determining payment rates. The owners allege that IDHFS failed to: recalculate their reimbursement rates; provide an adequate notice-and-comment process; and comply with the state plan, costing them $12 million in unreimbursed costs. The Seventh Circuit affirmed denial of a motion to dismiss. Section 1396a(a)(13)(A) confers a right that is presumably enforceable under 42 U.S.C. 1983; it benefits the owners and is not so amorphous that its enforcement would strain judicial competence. While the Eleventh Amendment may bar some of the requested relief, if it appears that owners have been underpaid, that does not deprive the court of jurisdiction over the case as a whole. View "BT Bourbonnais Care, LLC v. Norwood" on Justia Law

South Bend’s Police Department records some of the desk phones supplied to officers. Bishop’s phone was added to those being recorded, at his request. In 2010, Richmond took Bishop’s former office. Richmond kept his phone number, so the Line was switched to a vacant office. Young then moved to that office, not knowing that the phone was recorded. In 2011 the recording system crashed. While listening to recordings to make sure that restoration had been done correctly, DaPaepe heard Young say things that she thought inappropriate. DaPaepe gave Chief Boykins tapes of calls. Boykins used the information to make threats. Federal and state investigations ended without charges. Boykins was demoted. The City’s Common Council demanded the tapes, issued a subpoena to the city’s executives, and sought state court enforcement. The city, believing that releasing the tapes would violate wiretap statutes, 18 U.S.C. 2510–22, sought a declaratory judgment. The district court ruled that it had subject-matter jurisdiction although the Declaratory Judgment Act, 28 U.S.C. 2201, normally cannot be used to present a federal defense to state litigation. Before the Common Council moved to dismiss, five individual defendants in the city’s suit had become plaintiffs, seeking damages based on federal statutes. The Seventh Circuit vacated the district court's holding without addressing the merits, noting that the suit began as a claim by the city's executive branch against the legislative branch, that the damages issues have settled, and that the issue of the Council’s access to the tapes is in state court. View "City of South Bend v. South Bend Common Council" on Justia Law

In 2009, Lanigan injured his back at his job and hurt his neck in a car accident; in 2011 he was diagnosed with diabetes. Since then his medical impairments have been complicated by mental illness. Lanigan applied for Supplemental Security Income and Disability Insurance Benefits in 2012 when he was 38 years old. At a hearing, the ALJ asked a vocational expert to assess whether competitive employment would be available to a person: capable of performing low-stress jobs constituting light work if those jobs involve only routine tasks; do not require more than occasional interaction with coworkers or the public; do not involve piece work or a rapid assembly line; is limited to occasional stooping, crouching, kneeling, or crawling; and can be off task up to 10% of the workday in addition to regularly scheduled breaks. The ALJ did not explain the source of the 10% figure. The ALJ found his impairments to be severe but not disabling and denied benefits. The Appeals Council denied review. The district court upheld the ALJ’s decision. The Seventh Circuit remanded for further proceedings because the ALJ misinformed a vocational expert about Lanigan’s residual functional capacity, thus undermining the expert’s testimony that Lanigan could engage in competitive employment. View "Lanigan v. Berryhill" on Justia Law

By 2009 Vanprooyen’s physician had prescribed Xanax to treat her panic attacks. She was treated for anxiety, depression, and bipolar disorder. She had a history of addiction. In 2010, Vanprooyen, then age 26, fell down a flight of stairs and suffered a brain hemorrhage. She claimed post-traumatic stress disorder, short-term memory loss, attention-deficit hyperactivity disorder, seizures, and fibromyalgia. She was prescribed medication for pain, migraine headaches, and seizures. Vanprooyen applied for Disability Insurance Benefits and Supplemental Security Income. An administrative law judge found her impairments to be severe but not disabling and denied benefits. The district court upheld the ALJ’s decision. The Seventh Circuit reversed, finding “serious deficiencies” in the ALJ’s analysis, which failed to mention that a state consultative examiner who had given Vanprooyen a mental-status examination concluded that she was unable to manage her own money because of her “emotional adjustment and medical difficulties,” although at least two of the three jobs that the ALJ found that Vanprooyen could do involve handling money. Without explanation, the ALJ gave substantial weight to the opinions of consulting physicians who had never examined Vanprooyen. An ALJ can reject an examining physician’s opinion only for reasons supported by substantial evidence; a contradictory opinion of a non-examining physician does not, alonef, suffice. View "Vanprooyen v. Berryhill" on Justia Law

National manufactures battery packs, including the lithium battery packs at issue (Batteries), which were regulated as hazardous materials. A Federal Aviation Administration agent inspected National’s Chicago facility and discovered that National made 11 air shipments of the Batteries to customers in California and Canada that did not comply with multiple hazardous material regulations (HMRs). The FAA filed a complaint. National’s vice president testified that he believed, without supporting evidence, the Batteries were exempt from testing because they were similar to previously tested batteries. The shipping papers indicated that each shipments conformed tp the International Civil Aviation Organization’s Technical Instructions for the Safe Transport of Dangerous Goods. National’s office manager, certified each shipment, but her hazardous materials training was Department of Transportation specific and did not include training on the ICAO Technical Instructions. Because the Batteries were untested lithium batteries, they should have been packed according to the more stringent standards. An ALJ found that National knowingly violated the HMRs. The FAA assessed a civil penalty of $66,000 based on 49 U.S.C. 5123(c). The Seventh Circuit denied a petition for review. A reasonable person in National’s position would have been aware of its violations; the penalty was within statutory limits, and rationally related to National’s multiple offenses View "National Power Corp. v. Federal Aviation Administration" on Justia Law

Baker, sued (Freedom of Information Act (FOIA), 5 U.S.C. 552(a)(4)(B)) to obtain records connected to an FBI investigation into a protection racket run by Chicago police officers. The FBI gave him redacted records. He sought disclosure of the names of FBI agents involved in the investigation, Chicago police officers who assisted them, and officers who were investigated but not charged. He argued that the light sentences relative to the magnitude of the criminal activity reflected inadequate investigation. The FBI invoked FOIA exemptions for “personnel and medical files and similar files the disclosure of which would constitute a clearly unwarranted invasion of personal privacy” and for records and other information compiled for law enforcement purposes if their disclosure “could reasonably be expected to constitute an unwarranted invasion of personal privacy.” The FBI’s concern was that public identification could endanger individuals by identifying them to gangsters still involved in the racket and would unfairly stigmatize officers. The Seventh Circuit ruled in favor of the FBI, noting that it is purely an investigatory agency and does not make charging decisions sentencing suggestions. Baker’s theory that release of the names would enable the public to determine whether the Bureau had adequately staffed the investigation was farfetched. View "Baker v. Federal Bureau of Investigation" on Justia Law

Vidmar, Manney, and Gomez were discharged from the Milwaukee Police Department, for cause, by Police Chief Flynn. Their benefits and pay stopped immediately. They appealed their terminations to the Board of Fire and Police Commissioners, which rejected their appeals. They were permanently discharged. The former officers claimed that their employment did not end when they were discharged by the chief because they were entitled to employment until the conclusion of their appeals. They alleged that they were denied constitutional due process and wages. The district court rejected their claims and granted judgment on the pleadings. The Seventh Circuit affirmed. Under Wisconsin law, the former officers had no property interest in employment once they were discharged for cause by Chief Flynn. They were provided a full and adequate appellate process, and their discharges were upheld in accordance with Wisconsin law. They were not entitled to wages for the period of time between their discharge and the conclusion of their appeal under Wisconsin law as they were not employed during that time. View "Milwaukee Police Association v. Flynn" on Justia Law

Indiana’s alcohol regulatory scheme, like that of many states, divides the market into three tiers of the distribution chain (producers, wholesalers, and retailers) and three kinds of alcohol (beer, liquor, and wine). With limited exceptions, Indiana prohibits any person who holds a permit in one tier of the distribution chain from also holding an interest in a permit in another tier. For example, anyone who holds an interest in a retailing permit is generally prohibited from having any interest in a manufacturer’s or wholesaler’s permit of any type. Indiana also restricts the issuance of wholesaling permits by type of alcohol. The law allows some wholesaling permits to be combined: a beer wholesaler can get a permit to wholesale wine; a liquor wholesaler can get a permit to wholesale wine, but a beer wholesaler may not acquire an interest in a liquor-wholesaling permit and vice versa. Monarch holds permits to wholesale beer and wine and would like to wholesale liquor. Monarch sued, alleging that this aspect of the law facially discriminates against beer wholesalers in violation of the equal protection guarantee. The district court and Seventh Circuit upheld the law as surviving “rational basis” review. Monarch could not identify a similarly situated class that receives better treatment under the statute and reducing liquor consumption is a legitimate governmental interest. View "Monarch Beverage Co., Inc. v. Grubb" on Justia Law

Smith was transported from the Rock Island County Jail to the federal courthouse for arraignment. U.S. marshals took Smith to an interview room to meet his lawyer. The Marshals Service inspects the interview rooms weekly. On the detainee’s side of the room, there is a metal stool attached to the wall by a swing-arm. According to Smith, when he sat on the stool it “broke,” causing him to fall and strike his head; he saw that bolts were missing. A nurse examined Smith and noted that his speech was slurred. She had him taken to the emergency room. He was treated for a stroke and continues to suffer adverse effects. Smith filed an administrative tort claim, which was denied. Smith then brought suit under the Federal Tort Claims Act, 28 U.S.C. 2671, relying on the doctrine of res ipsa loquitur to impute negligence to the government. The district court rejected the theory, noting that Smith’s fall occurred at 11 a.m., so it was possible that others could have already damaged the seat or that Smith fell without the stool having malfunctioned. The Seventh Circuit reversed. The fact that a detainee is left alone to confer with his lawyer does not defeat the notion that the room and its contents remain within the control of the government. The sort of malfunction that Smith has described is the kind of hazard that the government may be expected to guard against. View "Smith v. United States" on Justia Law