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

Sgouros purchased a “credit score” package from TransUnion. Armed with the number TransUnion gave him, he went to a car dealership and tried to use it to negotiate a favorable loan. The score he had bought, however, was useless: it was 100 points higher than the score pulled by the dealership. Sgouros filed suit, asserting that TransUnion violated the Fair Credit Reporting Act, 15 U.S.C. 1681g(f)(7)(A); the Illinois Consumer Fraud and Deceptive Business Practices Act, 815 ILCS 505/1; and the Missouri Merchandising Practices Act, Mo. Rev. Stat. 407.010, by misleading consumers by failing to inform them that the formula used to calculate their purchased credit scores was materially different from the formula used by lenders. TransUnion moved to compel arbitration, asserting that the website through which Sgouros purchased his product included an agreement to arbitrate. The district court concluded that no such contract had been formed and denied TransUnion’s motion. The Seventh Circuit affirmed after evaluating the website and concluding that TransUnion had not put consumers on notice of the terms of agreement, as required by Illinois law, but actually distracted them from noticing those terms. View "Sgouros v. TransUnion Corp." on Justia Law

Fidlar develops software to manage public land records and licenses its software to the counties. Counties contract with users who want access to the records. In 2010, LPS contracted with 82 of Fidlar’s county customers to gain access to their land records. LPS designed a “web-harvester,” and downloaded county records en masse; it sent the records to India, where select records were entered, into LPS’s database. LPS’s web-harvester did not disrupt Fidlar’s services to other users or alter any content in the middle tier or county databases. The counties allegedly lost print fees as a result of the bulk download. Fidlar concluded that LPS was using a web-harvester instead of its software to obtain records and sued, alleging violations of the Computer Fraud and Abuse Act and the Illinois Computer Crime Prevention Law, and trespass to chattels. The Seventh Circuit affirmed summary judgment for LPS, holding that Fidlar failed to show that LPS acted with intent to defraud or caused damage under the CFAA. The court rejected Fidlar’s argument that LPS knew or had reason to know that it might cause loss as required by the CCPL. View "Fidlar Techs v. LPS Real Estate Data Solutions, Inc." on Justia Law

Two mothers and their sons alleged that Internet gambling websites owe them the money that the men lost in gambling. An Illinois statute imposes criminal penalties on anyone who “knowingly establishes, maintains, or operates an Internet site that permits a person to play a game of chance or skill for money or other thing of value by means of the Internet or to make a wager upon the result of any [such] game,” 720 ILCS 5/28-1(a)(12) and “any person who knowingly permits any premises or property owned or occupied by him or under his control to be used as a gambling place.” It provides that “any person who by gambling shall lose to any other person, any sum of money or thing of value, amounting to the sum of $50 or more ... may sue for and recover ... in a civil action against the winner thereof.” The Seventh Circuit affirmed dismissal. The sons, who used the websites, failed to sue within six months of their losses. The government shut down the sites in 2011. The mothers, who never gambled on the sites, have timely claims, but the defendants are not the winners of any game that their sons played, but are the sites that hosted the gambling. View "Fahrner v. Tiltware, LLC" on Justia Law

Fridman paid her mortgage electronically, using the online payment system on the website of her mortgage servicer, NYCB. By furnishing the required information and clicking on the required spot, she authorized NYCB to collect funds from her Bank of America account. Although Fridman filled out the form within the grace period allowed by her note, NYCB did not credit her payment for two business days, causing Fridman to incur a late fee. Fridman filed suit on behalf of herself and a putative class, alleging that NYCB’s practice of not crediting online payments on the day that the consumer authorizes them violates the Truth in Lending Act (TILA), 15 U.S.C. 1601. The district court granted NYCB summary judgment. The Seventh Circuit reversed. An electronic authorization for a mortgage payment entered on the mortgage servicer’s website is a “payment instrument or other means of payment.” TILA requires mortgage services to credit these authorizations when they “reach[] the mortgage servicer.” View "Fridman v. NYCB Mortgage Co. LLC" on Justia Law

Lightspeed operates online pornography sites and sued a defendant, identified only Internet Protocol address, which was allegedly associated with unlawful viewing of Lightspeed’s content, using a “hacked” password. Lightspeed identified 6,600 others (by IP addresses only) as “co‐conspirators” in a scheme to steal passwords and content. Lightspeed, acting ex parte, served subpoenas on the ISPs (then non‐parties) for the personally identifiable information of each alleged coconspirator, none of whom had been joined as parties. The ISPs moved to quash and for a protective order. The Illinois Supreme Court ultimately ruled in favor of the ISPs. Lightspeed amended its complaint to name as co‐conspirator parties the ISPs and unidentified “corporate representatives,” alleging negligence, violations of the Computer Fraud and Abuse Act, 18 U.S.C. 1030 and 1030(g), and deceptive practices. Lightspeed issued new subpoenas seeking the personally identifiable information. The ISPs removed the case to federal court. The district judge denied an emergency motion to obtain the identification information. After several “changes” with respect to Lightspeed’s lawyers, the court stated that they “demonstrated willingness to deceive … about their operations, relationships, and financial interests have varied from feigned ignorance to misstatements to outright lies … calculated so that the Court would grant early‐discovery requests, thereby allowing [them] to identify defendants and exact settlement proceeds.” After granting Lightspeed’s motion for voluntary dismissal, the court granted attorney’s fees under 28 U.S.C. 1927, stating that the litigation “smacked of bullying pretense.” Failing to pay, the lawyers were found to be in civil contempt and ordered to pay 10% of the original sanctions award to cover costs for the contempt litigation. The Seventh Circuit affirmed.View "Duffy v. Smith" on Justia Law

Daoud, an 18-year-old American citizen, had an email conversation with undercover FBI employees posing as terrorists who responded to messages that he had posted online. Daoud planned “violent jihad” and discussed his interest in committing attacks in the U.S, using bomb-making instructions that he had read in Inspire magazine, an English-language organ of Al Qaeda, and online. Daoud selected a Chicago bar as the target of a bomb that the agent would supply. The agent told him the bomb would destroy the building and would kill “hundreds” of people. Daoud replied: “that’s the point.” On September 14, 2012, Daoud parked a Jeep containing the fake bomb in front of the bar. In an alley, in the presence of the agent, he tried to detonate the fake bomb and was arrested. In jail, he tried to solicit someone to murder the undercover agent with whom he had dealt. The government notified Daoud, under the Foreign Intelligence Surveillance Act (FISA), 50 U.S.C. 1801, that it intended to present evidence derived from electronic surveillance conducted under the Act. His attorney sought access to the classified materials submitted in support of the government’s FISA warrant applications. The government supplied a heavily redacted, unclassified response and a classified version, accessible only to the court with a statement that disclosure “would harm the national security.” The harm was detailed in a classified affidavit signed by the FBI’s Acting Assistant Director for Counterterrorism. The district judge ordered the materials sought by defense counsel turned over. In an interlocutory appeal, the Seventh Circuit reversed, stating that in addition to having the requisite security clearance the seeker of such information must establish need to know. View "United States v. Daoud" on Justia Law

Seitz and Welter were partners in Wasco, a property management company. Greg was also a police officer. Elgin’s police chief confronted Greg with the emails showing that Greg had used the Law Enforcement Agencies Data System (LEADS) to research cars parked in front of Wasco properties. Illinois limits use of LEADS to criminal justice purposes. The chief notified Gregg of a misconduct investigation regarding his use of LEADS. The city allegedly received its information after Tamara, Greg’s then wife and a fellow police officer, and Beeter accessed Greg’s email account and conveyed print-outs to the corporation counsel under cover of anonymity. Greg and Seitz sued Tamara and Beeter, alleging violations of the Federal Wiretap Act (FWA), the Stored Communications Act (SCA), and the Computer Fraud and Abuse Act, and state law claims. They sued Elgin under the FWA. The district court dismissed the complaint against the city, concluding that the FWA, 18 U.S.C. 2511(1) prohibits “persons” from intercepting communications, but does not extend its definition of “person” to municipalities. The Seventh Circuit affirmed. A 1986 amendment permits suit against governmental units by adding “entity” to the text, but only for substantive provisions that identify an “entity” as a potential violator of that provision. View "Seitz v. City of Elgin" on Justia Law

Allegedly in retaliation for Modrowski’s unwillingness to skimp on building repairs, defendants fired him, withheld $11,000 in wages, had Modrowski jailed, and locked Modrowski out of his personal Yahoo email account. Modrowski sued, challenging the refusal to relinquish control over his email account. The district court issued a temporary restraining order, but Modrowski discovered that years’ worth of personal correspondence had vanished. Modrowski claimed violation of the Stored Wire and Electronic Communications Act (18 U.S.C. 2701), the Federal Wire Tapping Act (18 U.S.C. 2511), and the Computer Fraud and Abuse Act (18 U.S.C. 1030). The district court dismissed the first two claims because Modrowski acknowledged that he voluntarily linked his personal account with the defendants’ business account. The district court dismissed without prejudice the Computer Fraud Act claim for failure to allege an injury of at least $5,000. When Modrowski returned his first amended complaint, defendants moved for summary judgment. The window for fact discovery had closed and neither party had sought an extension. Modrowski responded by attacking perceived deficiencies of the defendants’ motion. Noting Modrowski’s failure to offer “any evidence in response to defendants’ motion, let alone evidence sufficient to raise a triable issue of fact,” it granted defendants’ motion. The Seventh Circuit affirmed. View "Modrowski v. Pigatto" on Justia Law

Plaintiff, an active genealogist and animal rights activist, claimed that her name had commercial value and that search engines generated revenue as a result of internet searches of her name. She specifically alleges that various features of Google’s search engine violate her right of publicity by using her name to trigger sponsored links, ads, and related searches to medications, including Levitra, Cialis, and Viagra, all of which are trademarks of nationally advertised oral treatments for male erectile dysfunction. The district court dismissed her suit alleging common law misappropriation and violation of the state right-of-privacy law, Wis. Stat. 995.50(2)(b). The Seventh Circuit affirmed, citing the public interest and incidental use exceptions. View "Stayart v. Google Inc." on Justia Law

Keskes owned and managed Asena, a resale operation that sold goods on its own website, eBay, and Amazon.com. Between 2006 and 2009, Keskes sold more than $3.5 million in merchandise and disbursed more than $12.2 million but none of its checks was written to manufacturers of products sold. Instead, Keskes wrote checks totaling $3.1 million to “Cash” and another $2.1 million to individuals. FBI agents searched Keskes’s warehouse and seized enough merchandise to fill 350 large boxes. Many items still had security tags or store price tags on them. No documents were found to indicate a legitimate source. Convicted of six counts of wire fraud and five counts of mail fraud, Keskes was sentenced to 78 months’ imprisonment. The Seventh Circuit affirmed, rejecting arguments that the district court erred in denying a mistrial based on the prosecutor’s comment that a judge had issued a search warrant for Keskes’s warehouse, that the court erred in admitting testimony about “gypsies” being thieves and testimony about statements attributed to a man named “Robert,” and that the court erred at sentencing by relying on his silence as a sign of a lack of remorse and by relying on an inaccurate fact. View "United States v. Keskes" on Justia Law