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

The Indianapolis Land Bank was created to return tax-delinquent and other troubled properties into productive use. But, in 2011, Walton, the Land Bank’s manager, and Johnson began orchestrating the sale and resale of the city’s properties through a nonprofit loophole and pocketing the profits. The total loss to the city was $282,782.38. Johnson and Walton were convicted of honest services wire fraud, wire fraud, and conspiracy to engage in money laundering. Walton was also convicted of receiving bribes. The Seventh Circuit affirmed. The government provided substantial evidence that the two had specific intent, including evidence of kickbacks and making false statements, and provided to substantial evidence to support the money laundering convictions. Rejecting Walton’s argument that the court’s instruction on 10 U.S.C. 666 permitted the jury to convict him of accepting a gratuity and not a bribe, the court stated that the instruction and evidence made clear that Walton was convicted of accepting bribes, not gratuities. The convictions required proof of their bad intent (specific intent to commit fraud), so a good faith jury instruction was unnecessary. Both were properly subject to sentencing enhancements because their offenses involved a public official in a high-level decision-making position and they victimized vulnerable families. View "United States v. Johnson" on Justia Law

The Federal National Mortgage Association (Fannie Mae) and Federal Home Loan Mortgage Corporation (Freddie Mac) are federally-chartered, privately-owned corporations, created by Congress to bolster the housing market. In 2008, the Federal Housing Finance Agency (FHFA) was appointed as conservator for both. Both purchase mortgages from third-party lenders, bundle them and sell mortgage-backed securities. When a borrower defaults, Fannie Mae or Freddie Mac forecloses and takes title to the property securing the loan, for sale to a private buyer. In 2013-2014, the buyers purchased Chicago property from Fannie Mae. Chicago imposes a Real Property Transfer Tax on the purchaser. The supplemental “CTA portion” of the transfer tax is paid by the transferor, unless the transferor is legally exempt, in which case the transferee is held responsible. The Illinois Department of Finance ruled that each buyer was liable for the tax. The district court held that the tax was preempted by the federal exemption statutes. The Seventh Circuit reversed. In 2013, the Seventh Circuit held that state and local taxing authorities could not charge Fannie Mae, Freddie Mac, or FHFA with transfer taxes because such taxes are preempted by federal laws exempting these entities from all taxation, but that reasoning does not apply when the tax is imposed on the purchaser. View "Federal National Mortgage Association v. City of Chicago" on Justia Law

The Department of Housing and Urban Development (HUD), which implements the Fair Housing Act, offers insurance to mortgage lenders to decrease the risk borne by private industry and encourage lending. HUD maintains the viability of this scheme by prohibiting individuals with criminal records from owning or being employed by, a mortgage company. The government sued Luce under the False Claims Act (FCA), 31 U.S.C. 3729, and the Financial Institutions Reform, Recovery, and Enforcement Act, 12 U.S.C. 1833a, alleging that Luce falsely asserted that he had no criminal history so that his company could participate in the FHA’s insurance program. The district court granted the government summary judgment. The Seventh Circuit reversed. While rejecting arguments that the certifications were not material and that lingering issues of material fact precluded summary judgment, the court concluded that the Supreme Court’s 2016 “Escobar” decision required reconsideration of the traditional “but-for” FCA causation standard. Proximate cause is the appropriate test. Whether, under the proximate cause standard, the government can establish that Luce’s falsehood was the proximate cause of its harm, was not adequately addressed. View "United States v. Luce" on Justia Law

In 2011, Cosenza sought disability benefits on behalf of her minor son. An ALJ determined that J.M.F. was not disabled. The Appeals Council denied her request for review. Cosenza argued that the ALJ improperly found that her son’s autism and Asperger’s syndrome were not “medically determinable” impairments. The district judge granted Cosenza summary judgment and remanded under 42 U.S.C. 405(g); 5), terminating the case in the district court. On remand, another ALJ conducted a hearing in March 2016. In June Cosenza filed a motion in the closed federal case to hold the Commissioner in contempt “for not following court-ordered remand.” In July the ALJ ruled against Cosenza. Cosenza did not wait for the decision to become final but moved for summary judgment in the closed federal case and filed a letter with the Appeals Council requesting review. The district court granted the agency’s motion to strike, reasoning that it had relinquished jurisdiction over Cosenza’s first case; as to most recent decision, the administrative appeals process had not finished so no final decision existed for judicial review. Cosenza had not shown that the Commissioner violated the court’s remand order. The Seventh Circuit affirmed. A district court lacks jurisdiction under the Social Security Act to review an ALJ’s unfavorable decision until the agency’s decision is final; the Appeals Council has not yet decided whether to review the ALJ’s decision. View "Cosenza v. Berryhill" on Justia Law

In 2014, the Seventh Circuit held that the Attorney General has authority under 8 U.S.C. 1182(d)(3)(A)(ii) to waive an alien’s inadmissibility and to halt removal temporarily while the alien requests a U visa. In Sanchez’s case, the Board of Immigration Appeals held that IJs lack authority to grant such requests. The Seventh Circuit vacated and remanded. Delegation from the Attorney General to immigration judges is a matter of regulation; 8 C.F.R. 1003.10(a) states that “[i]mmigration judges shall act as the Attorney General’s delegates in the cases that come before them.” Disagreeing with the Third Circuit and the Attorney General, the Seventh Circuit held that IJs may exercise the Attorney General’s powers over immigration. On remand, the Board may consider whether 6 U.S.C. 271(b) and 557 transfer to the Secretary of Homeland Security all of the Attorney General’s discretionary powers under the immigration laws and may also address whether the power to grant a waiver of inadmissibility may be exercised only in favor of an alien who has yet to enter the United States. The Board must address and resolve those essential issues before the court can consider whether the disposition lies within the scope of the agency’s discretion. View "Baez-Sanchez v. Sessions" on Justia Law

Under Chicago’s 2014 “puppy mill” ordinance, pet retailers in the city “may offer for sale only those dogs, cats, or rabbits” obtained from an animal control or care center, pound, or kennel operated by local, state, or federal government or “a humane society or rescue organization.” Plaintiffs challenged the ordinance as exceeding the city’s home-rule powers and the implied limits on state power imposed by the Commerce Clause. The Seventh Circuit affirmed the dismissal of the case. The Illinois Constitution permits home-rule units like Chicago to regulate animal control and welfare concurrently with the state. The ordinance does not discriminate against interstate commerce, even in mild practical effect, so it requires no special cost-benefit justification under the Commerce Clause. The court found that the ordinance survives rational-basis review, noting the city’s concerns that large mill-style breeders are notorious for deplorable conditions and abusive breeding practices, including overbreeding, inbreeding, crowded and filthy living conditions, lack of appropriate socialization, and inadequate food, water, and veterinary care, causing pets to develop health and behavioral problems, creating economic and emotional burdens for pet owners and imposing financial costs on the city as owners abandon their pets. View "Park Pet Shop, Inc. v. City of Chicago" on Justia Law

In 1998, Dr. Wilson’s terminally ill patient was within hours of death. He was in pain and suffocating. Wilson concluded that the only possible palliation was unconsciousness. As Wilson was injecting a drug, the patient’s heart stopped. The coroner classified the death as murder. The Illinois Department of Financial and Professional Regulation summarily suspended Wilson’s medical license. The Department held a hearing in 2000. The coroner’s finding of homicide had been withdrawn; Wilson was not charged. His license was nonetheless suspended for five years. He sued in state and federal courts. Rather than staying proceedings, the federal court dismissed. Four times a state judge vacated the suspension. The Department reinstated its decision three times. Without a new hearing or explanation, the Department entered a new five-year suspension in 2007, and another in 2013. In 2014, the state court held that Wilson should not have been suspended for even one day. The Department did not reinstate Wilson’s license because he had not practiced during the last 17 years. In 2014 Wilson sought damages under 42 U.S.C. 1983. The district court held that the two-year statute of limitations had been running since 1998. The Seventh Circuit vacated. A federal challenge to a state administrative agency decision is not subject to an exhaustion-of-remedies rule but a claim never accrues until the plaintiff “has a complete and present cause of action”. The court noted the district court’s 1999 holding that Wilson could not litigate in federal court while state proceedings were ongoing; his section 1983 claim for damages did not accrue until 2014. View "Wilson v. Illinois Department of Financial and Professional Regulation" on Justia Law

The Republican Party sued the Cook County Board of Election Commissioners, arguing that the Board must include on the ballot a candidate that the Party slated for the House of Representatives in the November 2016 election. The Board had never announced a plan to exclude the candidate. The district court entered an injunction compelling the Board to keep this candidate on the ballot. The Seventh Circuit remanded with instructions to dismiss for lack of subject matter jurisdiction. The Party’s dispute with two additional defendants, elected as ward committeemen, based on the Party’s refusal to seat them, is not a federal claim. The Party’s “anticipatory federal contention,” that ”if state law does not respect the Party’s eligibility rules, then Illinois violates the First Amendment,” was only a potential response to a potential contention by the committeemen that all elected ward committeemen must be seated on the Party’s central committee. The district judge did not consider the fact that public officials were not contesting the Party’s claims or the possibility that he was issuing an advisory opinion. If the committeemen had sued the Party, demanding membership on its central committee, their claim would have arisen under Illinois law. View "Cook County Republican Party v. Sapone" on Justia Law

Schloesser worked for 23 years as a dry curer in a meat‐processing factory, regularly lifting more than 70 pounds. After undergoing rotator cuff surgery on his left shoulder in 2001 and then a lactimectomy (disc removal in his lower back) in 2002, Schloesser left the factory in 2003. Until 2009, he was self‐employed in construction, until his persistent shoulder and lower back problems prevented him from being able to regularly lift more than 50 pounds as required by his work. In 2012, Schloesser applied for disability insurance benefits under 42 U.S.C. 416(i). The Social Security Administration initially denied his application but an Administrative Law Judge found him disabled and granted benefits in 2014. One month later, sua sponte, the SSA Appeals Council commenced review and reversed the ALJ’s favorable decision. The district court affirmed the Appeals Council’s decision as supported by substantial evidence. The Seventh Circuit affirmed, upholding findings that Schloesser did not suffer from severe impairments of cervical radiculopathy, major joint dysfunction, and history of left shoulder surgery and that his residual functional capacity did not include being off‐task up to 10% of the workday or needing unscheduled breaks. View "Schloesser v. Berryhill" on Justia Law

Edwards is a naturalized U.S. citizen who emigrated from Mongolia in 1996. She was hired as an officer with Customs and Border Protection (CBP) in 2009. Edwards went through a federal background investigation in 2009 and reinvestigation in 2014. Asked whether she “EVER provided financial support for any foreign national,” and whether she “ever helped anyone enter or stay in the U.S. illegally,” Edwards answered no. Both answers were false. She was convicted of two counts of witness tampering, 18 U.S.C. 1512(b)(3) and two counts of making false statements on an official questionnaire for federal employment. 18 U.S.C. 1001(a)(2). The trial judge, skeptical about the strength of the government’s evidence and whether the case merited criminal prosecution, imposed a below‐guideline sentence of two years of probation and a $2,000 fine. The Seventh Circuit vacated in part, first rejecting arguments that the witness tampering statute was void for vagueness and that the evidence was insufficient to support the convictions. The jury instructions for the witness tampering charges were faulty, however; under section 1512(b)(3), Edwards could be convicted only if she “corruptly” attempted to persuade another person to hinder, delay, or prevent communication of information to federal criminal investigators. The instructions given at trial failed to include the corruption element. View "United States v. Edwards" on Justia Law