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

Illinois legalized riverboat casino gambling in 1990. Since then, the state’s once‐thriving horseracing industry has declined. In 2006 and 2008, former Governor Blagojevich signed into law two bills that imposed a tax on in‐state casinos of 3% of their revenue and placed the funds into a trust for the benefit of the horseracing industry. Casinos filed suit under the Racketeering Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. 1964, alleging that defendants, members of the horseracing industry, bribed the governor. On remand, the district court granted summary judgment for the racetracks, finding sufficient evidence from which a reasonable jury could find that there was a pattern of racketeering activity; that a jury could find the existence of an enterprise‐in‐fact, consisting of Blagojevich, his associates, and others; sufficient evidence that the defendants bribed Blagojevich to secure his signature on the 2008 Act; but that the casinos could not show that the alleged bribes proximately caused their injury. The Seventh Circuit reversed in part. Viewing the evidence in the light most favorable to the plaintiffs, there was enough to survive summary judgment on the claim that the governor agreed to sign the Act in exchange for a bribe. View "Empress Casino Joliet Corp. v. Johnston" on Justia Law

Moon was a 26-year-old mother who had worked as a cashier, bank teller, and certified nursing assistant. She suffered from documented back and joint problems, mild sleep apnea, depression, and migraine headaches. Most of these problems are related to exceptional obesity: at a height of 5’5”, she weighs more than 400 pounds. In support of her application for disability benefits, Moon submitted extensive medical records. Her migraine headaches were diagnosed as early as 2005 and she saw doctors about her headaches many times. She was taking Imitrex and Motrin at the time of her May 2010 hearing. In his written decision denying benefits, the ALJ went through the standard five-step analysis and found that Moon was no longer engaged in substantial gainful activity and that her combination of impairments qualified as “severe,” but that she was still capable of doing sedentary work if she would be permitted to sit or stand at will. The ALJ relied on the opinions of two doctors who had reviewed medical records but had not examined Moon. The ALJ referred to “alleged headaches” dismissively. The Appeals Council and the district court upheld the denial. The Seventh Circuit reversed. The ALJ improperly discounted evidence of chronic migraine headaches. Because Moon is receiving disability benefits based on a later application, the only issue on remand will be whether she was disabled between August 2008 and the later date from which benefits have been paid.View "Moon v. Colvin" on Justia Law

Irwin, a holding company, entered bankruptcy when its two subsidiary banks failed. The FDIC closed both in 2009. Their asset portfolios were dominated by mortgage loans, whose value plunged in 2007-2008. Irwin’s trustee in bankruptcy sued its directors and officers (Managers). The FDIC intervened because whatever Irwin collects will be unavailable to satisfy FDIC claims. Under 12 U.S.C. 821(d)(2)(A)(i), when taking over a bank, the FDIC acquires “all rights, titles, powers, and privileges of the insured depository institution, and of any stockholder, member, accountholder, depositor, officer, or director of such institution with respect to the institution and the assets of the institution.” The claims assert that the Managers violated fiduciary duties to Irwin by not implementing additional financial controls; allowing the banks to specialize in kinds of mortgages that were especially hard-hit; allowing Irwin to pay dividends (or repurchase stock) so that it was short of capital; “capitulating” to the FDIC and so that Irwin contributed millions of dollars in new capital to the banks. The district judge concluded that all claims belong to the FDIC and dismissed. The Seventh Circuit affirmed in part, but vacated with respect to claims that concern only what the Managers did at Irwin: supporting the financial distributions, informing Irwin about the banks’ loan portfolios, and causing Irwin to invest more money in the banks after they had failed. View "Levin v. Miller" on Justia Law

Black Beauty contested a citation issued by an inspector of the Mine Safety and Health Administration, but the ALJ upheld the citation. Black Beauty now petitions for review of the ALJ's order again upholding the citation on remand. The court found substantial evidence to credit the ALJ's conclusion that Black Beauty violated 30 C.F.R. 77.1605(k) by failing to maintain a berm on two tenths of a mile of a bench; there was no reason to disturb the ALJ's conclusion that Black Beauty's violation was significant and substantial; and substantial evidence supported the ALJ's conclusion that Black Beauty's failure to follow the regulation constituted more than ordinary negligence and was thus "unwarrantable." Accordingly, the court denied the petition for review. View "Black Beauty Coal Co. v. Secretary of Labor, et al." on Justia Law

Boley sought Social Security disability benefits. The agency denied her request initially and on reconsideration. A person dissatisfied with such a decision has 60 days to request a hearing. Boley took about nine months because SSA had notified Boley but not her lawyer (as required by 20 C.F.R.404.1715(a)). Boley was ill at the time, preparing for a double mastectomy, and did not know, until it was too late, that her lawyer was unaware of the decision. An ALJ dismissed an untimely hearing request, finding that Boley lacked “good cause” because she had received notice and could have filed a request herself. A district judge dismissed her petition for judicial review, based on 42 U.S.C. 05(g), which authorizes review of the agency’s final decisions made “after a hearing.” The Seventh Circuit vacated and remanded, with instructions to decide whether substantial evidence, and appropriate procedures, underlie the decision that Boley lacks “good cause” for her delay in seeking intra-agency review. In doing so, the court overruled its own precedent and noted a divide among the circuits. View "Boley v. Colvin" on Justia Law

In 2012 the Drug Enforcement Administration seized over $110,000 worth of smokable “incense products” from the Smoke Shop, a Delavan, Wisconsin retailer. At the time of seizure, the DEA believed that the incense products, which contained synthetic cannabinoids, were controlled substance analogues and illegal under federal drug laws. Smoke Shop sought return of its inventory in federal district court. Later, the substances in the incense products were scheduled by the Attorney General, rendering them contraband and eliminating Smoke Shop’s hopes of recovering the goods, so it brought a conversion action for damages under the Federal Tort Claims Act. The district court dismissed, finding that the government enjoyed sovereign immunity under the detained-goods exception to the FTCA, and, alternatively that Smoke Shop failed to exhaust its administrative remedies because it did not submit a claim for damages to either the DEA or the Department of Justice before filing suit. The Seventh Circuit affirmed on both grounds. View "Smoke Shop, LLC v. United States" on Justia Law

Plaintiff, a former laborer, applied for social security disability benefits, claiming he was unable to work a full 40-hour week because of acute lower back pain that radiates into his right leg. He has had various treatments and takes several medications such as oxycodone and percocet. His application was denied; the Appeals Council and district court affirmed. The Seventh Circuit reversed and remanded, reasoning that the administrative law judge was likely mistaken in believing that one physician’s report refuted the findings of the other physician. What was relevant was not the cause of the pain and numbness but the severity of these symptoms and whether they disabled plaintiff from working full time. Both physicians diagnosed radiculopathy. If the administrative law judge remains skeptical of the claim, he can order a further examination of the plaintiff by a qualified physician instructed to offer a medical opinion (if possible) on the plaintiff’s physical ability to engage in full-time work. The court stated references to the credibility of the applicant are “a recurrent feature of the government’s defense of denials of social security disability benefits” that constitutes “professional misconduct and if it continues we’ll have to impose sanctions.” View "Hanson v. Colvin" on Justia Law

The Educational Rate Program, a subsidy program authorized by the Telecommunications Act of 1996, is implemented by the FCC, which established USAC, a private non-profit corporation, to administer the Program. USAC provides subsidies to eligible school districts for the cost of telecommunication services. FCC regulations require that providers offer schools the “lowest corresponding price” (LCP) for their services: the “lowest price that a service provider charges to non-residential customers who are similarly situated to a particular school, library, or library consortium for similar services.” Heath operates a business that audits telecommunications bills and was retained by Wisconsin school districts. Heath found that certain schools paid much higher rates than others for the same services. As a result, many districts did not receive the benefit of LCP and the government paid subsidies greater than they should have been. Heath informed Wisconsin Bell of the discrepancy, but it refused to provide the more favorable pricing. Heath also learned of an even lower price charged to the Wisconsin Department of Administration (DOA). Heath filed a qui tam lawsuit. The government declined to intervene. The district court dismissed for lack of subject matter jurisdiction, finding that the public disclosure bar applied and that Heath was not saved by the original source exception, because the DOA pricing was on its website. The Seventh Circuit reversed, stating that the claim was not based on the DOA website information and that Heath was not an opportunist plaintiff who did not contribute significant information. View "Heath v. WI Bell, Inc." on Justia Law

Bormes, an attorney, tendered the filing fee for a lawsuit via pay.gov, which the federal courts use to facilitate electronic payments. The web site sent him an email receipt that included the last four digits of his credit card’s number, plus the card’s expiration date. Bormes, claiming that the Fair Credit Reporting Act (FCRA), 15 U.S.C. 1681c(g)(1) allows a receipt to contain one or the other, but not both, filed suit against the United States seeking damages. In an earlier appeal the Supreme Court held that the Little Tucker Act, 28 U.S.C. 1346(a)(2), does not waive sovereign immunity on a suit seeking to collect damages for an asserted violation of FCRA and remanded for determination of “whether FCRA itself waives the Federal Government’s immunity to damages under 1681n.” The Seventh Circuit held that although the United States has waived immunity against damages actions of this kind, it did not violate the statute on the merits. The statute as written applies to receipts “printed … at the point of the sale or transaction.” The email receipt that Bormes received met neither requirement. View "Bormes v. United States" on Justia Law

The linkage of the Mississippi River system to the Great Lakes and the effort to control weeds in southern aquatic farms by importing Asian carp, a voracious non-native fish, have combined to create a situation in which two species of carp have overwhelmed the Mississippi River and its tributaries and threaten to migrate into the Great Lakes. Plaintiffs, five states bordering the Great Lakes and an Indian tribe assert that the Asian carp either will soon invade, or perhaps already have invaded, the Great Lakes and are poised to inflict billions of dollars of damage on the ecosystem. Plaintiffs sued the U.S. Army Corps of Engineers and the Metropolitan Water Reclamation District of Greater Chicago, seeking a preliminary injunction that would require aggressive interim measures to maximize the chances of preventing the spread of the carp. The district court denied that motion; the Seventh Circuit affirmed. The district court then dismissed the case. The Seventh Circuit affirmed, finding that the plaintiffs did not allege facts showing that the Corps and the District are operating in a manner that is likely to allow the Asian carp to reach Lake Michigan. View "State of Michigan v. U.S. Army Corps of Eng'rs" on Justia Law