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

Mann operated a home day care center. While she was gone, her husband, a licensed day care provider, and Thompson, a newly-hired assistant, remained at the center. The children were left alone in the basement for about 10 minutes. One child hit another with a tray. A complaint was made to DCFS, which determined that Thompson was working without a background search or a medical evaluation. DCFS determined that Mann had failed to provide proper supervision, shut down the center, and prohibited Mann and her husband from providing child care pending full investigation. DCFS entered Mann’s name into the Illinois database concerning child abuse and neglect. DCFS concluded that the violation was “substantiated,” and after supervisory review, recommended license revocation. After another level of review, a corrective plan was recommend rather than revocation. Mann entered into a plan and had the report expunged and her name removed from the database. Mann sued DCFS employees under 42 U.S.C. 1983. The district court dismissed, finding that Mann was not unconstitutionally deprived of a protected liberty interest relating to imposition of the protective plan or deprived of due process when she was prohibited from running her facility during the investigation. The Seventh Circuit affirmed. View "Mann v. Vogel" on Justia Law

In 2010 the U.S. and Wisconsin sued, alleging that defendants polluted the Lower Fox River and Green Bay with PCBs, and had liability under the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. 9601, for response costs and destruction of natural resources, estimated at $1.5 billion. The Justice Department submitted a proposed consent decree, negotiated among the state, defendants (Brown County and the City of Green Bay), and Indian tribes. The U.S. offered $4.5 million because federal agencies might have contributed to the pollution. Menasha opposed the decree and counterclaimed against the U.S. for costs that Menasha would incur if found liable. Ordinarily a non-party to a consent decree is not bound by it, but approval of the consent decree would otherwise extinguish Menasha’s claims. Menasha sought information under the Freedom of Information Act, claiming that U.S. attorneys, being from defense and prosecution teams, actually have adverse interests, and that their communication concerning the case resulted in forfeiture of attorney work product privilege. The district court held that Menasha was entitled to the documents. The Seventh Circuit reversed, reasoning that Menasha’s claim actually amounted to assertion that the federal attorneys “ganged up” to reduce federal liability and that the documents are privileged. View "Menasha Corp. v. U.S. Dept. of Justice" on Justia Law

After a 2008 Indiana flood, the President authorized the Federal Emergency Management Agency to provide disaster relief under the Stafford Act, 42 U.S.C. 5121–5207. Columbus Regional Hospital was awarded approximately $70 million, but suit under the Tucker Act, 28 U.S.C. 1346, 1349, claiming that it was entitled to about $20 million more. The district judge granted FEMA summary judgment. In response to the Seventh Circuit’s questioning of subject-matter jurisdiction, the Hospital argued that the Court of Federal Claims was the right forum and requested transfer. FEMA argued that the district court had jurisdiction. The Seventh Circuit agreed with FEMA, holding that the suit was not for “money damages.” The Hospital wants money, but not as compensation for FEMA’s failure to perform some other obligation, but as “the very thing to which [it] was entitled” under the disaster-relief program. The court noted that only the district court can serve as a forum for all of the Hospital’s legal theories, then rejected all of those theories. View "Columbus Reg'l Hosp. v. Fed. Emergency Mgmt. Agency" on Justia Law

Borrowers obtained secured loans from InBank. Their promissory notes established that InBank would calculate annual interest rates by adding a predetermined amount, usually one percent, to a variable index rate set by InBank at “its sole discretion,” which could change up to once per day. InBank stated that it would set the rate “at or around the U.S. prime rate.” Borrowers compared loan statements and found that the rate was neither consistent across customers nor close to the prime rate. After borrowers filed suit, the Illinois Department of Financial and Professional Regulation took control of InBank and appointed the Federal Deposit Insurance Corporation as receiver. MB Financial purchased InBank accounts. The borrowers filed an amended class action against MB, claiming violations of the Interest Act, 815 ILCS 205/1, and the Consumer Fraud and Deceptive Practices Act, 815 ILCS 505/1. The court granted a motion to substitute the FDIC as defendant, then dismissed. The Seventh Circuit held that dismissal was proper for failure to exhaust remedies under the Financial Institutions Reform, Recovery, and Enforcement Act, 12 U.S.C. 1821(d)(3)-(d)(13). The claims relate to InBank’s alleged acts and omissions, not MB’s, and there is no support for an assumption of liability argument.View "Farnik v. Fed. Deposit Ins. Corp" on Justia Law

Plaintiffs controlled Mutual Bank. In an effort to save the bank from insolvency, at the request of FDIC-Corporate, they raised about $30 million mostly in the form of note purchases. In 2008, FDIC-Corporate requested another $70 million, which they were unable to raise. In 2009, regulators issued warnings about the bank. The bank’s board voted to redeem the notes and create deposit accounts for plaintiffs, essentially returning their money. Before FDIC-Corporate responded to a request for required approval, 12 U.S.C. 1821(i), the bank was declared insolvent and FDIC was appointed as receiver. Mutual Bank’s branches opened as branches of United Central Bank the next day. The plaintiffs filed proofs of claim, seeking to redeem the notes and obtain depositor-level priority in post-insolvency distribution scheme. FDIC Receiver rejected the claims and the plaintiffs filed suit, alleging that they had been misled into investing in the bank and prevented from getting their money back. The district court dismissed as moot. The Seventh Circuit affirmed, characterizing the claim as an unauthorized request for “money damages,” 5 U.S.C. 702. The plaintiffs did not first seek administrative review of what was essentially a challenge to the FDIC’s regulatory decision not to act on the redemption approval request. View "Veluchamy v. Fed. Deposit Ins. Corp." on Justia Law

Roddy, born in 1964, suffers from several serious medical problems, including severe lower back pain attributable to degenerative disc disease. When her pain became unbearable, she stopped working and applied for disability insurance benefits. She was unsuccessful before the Social Security Administration. An administrative law judge found that there were jobs in the national economy within her capabilities, although she no longer could perform her old job as a shift manager at a Taco Bell restaurant. The district court affirmed. The Seventh Circuit vacated and remanded. The ALJ improperly discounted the opinion of a physician and improperly considered Roddy’s testimony about her ability to do housework. View "Roddy v. Astrue" on Justia Law

The pharmaceutical consulting group failed to pay taxes. By 2005, it accumulated over $1 million in unpaid liabilities. Revenue Officer Johnson pursued collection efforts, levied the group’s accounts, and sought to recover taxes withheld from employees (trust fund taxes) from Gessert personally. Gessert was the group’s creator, sole shareholder, and CEO, and presumably behind the refusal to pay. The group and Gessert sued, seeking refunds and abatements, and pursued damages under I.R.C. 7433 for improper collection efforts. They claimed that the group directed Johnson to apply a few voluntary payments toward its trust fund liability, but that Johnson applied the payments to the non-trust fund portion, increasing Gessert’s personal liability; that Johnson violated Internal Revenue Code and Treasury provisions; and that she improperly levied the accounts. The district court rejected the claims. The Seventh Circuit affirmed. Gessert lacked standing under I.R.C. 7433 because Johnson sought collection from the group. The group failed to allege economic harm, prerequisite to standing under I.R.C. 7433. Concerning the refund claim, the district court properly concluded the group filed its administrative claim too late. Gessert’s refund-and-abatement claim failed because the group did not provide specific written direction to the IRS effectuating a directed payment. View "Gessert v. United States" on Justia Law

In 2011, BEST fired Aslin, a securities broker, to remain compliant with the Financial Industry Regulatory Authority “Taping Rule,” which requires securities firms to adopt monitoring measures when too many of their brokers have recently worked for “Disciplined Firms.” Instead of adopting such measures, the employer may terminate brokers. FINRA, a private corporation, is registered with the Securities and Exchange Commission as a “national securities association.” The Maloney Act provides for establishment of private self-regulatory organizations to oversee securities markets, 15 U.S.C. 78o. The SEC must approve FINRA’s rules and may abrogate, add to, and delete FINRA rules. Aslin filed suit alleging that FINRA violated his due process rights by including him on the list of brokers from Disciplined Firms without providing him the opportunity to challenge the designation. The district court dismissed, concluding that Aslin failed to state a claim because he was not deprived of a protected property or liberty interest. The Seventh Circuit affirmed Since Aslin sought only injunctive and declaratory relief to prevent application of the rule to him, the controversy ended in 2012, after which Aslin was no longer included on the list of brokers from Disciplined Firms and the case was moot. View "Aslin v. Fin. Indus. Regulatory Auth., Inc." on Justia Law

The government alleged, under the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. 9601, that API and seven other companies caused $1 billion in PCB contamination in the Fox River near Green Bay, Wisconsin, and hired a consultant to prepare reports on the companies’ percentages of responsibility. API unsuccessfully sought discovery of these reports by challenging a consent decree between the government and another company, then filed a Freedom of Information Act request seeking the material. The government refused under the FOIA exemption covering attorney work product. The district court ruled in favor of the government. The Seventh Circuit affirmed. The government used portions of its reports in two consent decrees, but that use does not waive work product immunity for all the related content. API misconstrued the privilege, erroneously suggesting that facts underlying the conclusions are unprotected.View "Appleton Papers Inc. v. Envtl. Prot. Agency" on Justia Law

Humphries applied to Milwaukee County to renew her child care provider certificate. Muniz reviewed her application, sent a standard inquiry to a state agency as part of the background check, learned that Humphries had a substantiated finding of child abuse from 1988, and, after conferring with his supervisor, Muniz denied Humphries’s application. Humphries claims that she was not aware of the finding; she had been certified as a child care provider in the past. The abuse finding was later overturned and Humphries was certified. In her suit under 42 U.S.C. 1983, the district court granted summary judgment to Muniz and his supervisor on the basis of qualified immunity. The Seventh Circuit affirmed, rejecting a due process claim. Muniz and his supervisor had no involvement in the investigation or determination of the 1988 finding of substantiated abuse and did not violate Humphries’s constitutional rights when they relied on that finding to deny her child care provider renewal application.View "Humphries v. Milwaukee Cnty." on Justia Law