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

Fourteen plaintiffs, including pilots, a physician, a nurse, and an attorney, were required to undergo alcohol testing to maintain their employment and professional licenses. The tests, developed by United States Drug Testing Laboratories, Inc. (USDTL), indicated positive results for alcohol consumption, leading to significant professional harm. The plaintiffs alleged that the tests were unreliable and sued USDTL and its officers under the Racketeer Influenced and Corrupt Organizations Act (RICO) and state law. They also sued Choice Labs Services (CLS) and its owners, who provided the tests to the administrators.The plaintiffs initially filed suit in the Southern District of Florida, asserting claims for fraud and negligence. The district court dismissed the case without prejudice, finding the complaint insufficient. The plaintiffs then filed a second amended complaint, adding CLS as defendants. The case was transferred to the Northern District of Illinois, where the district court dismissed the RICO claims under Rule 12(b)(6) and denied supplemental jurisdiction over the state law claims. The plaintiffs' motion to alter or amend the judgment was also denied.The United States Court of Appeals for the Seventh Circuit reviewed the case de novo and affirmed the district court's decision. The court held that the plaintiffs failed to establish proximate causation for their RICO claims, as they did not adequately allege a direct link between USDTL's alleged misrepresentations and their professional injuries. The court also found that the plaintiffs did not meet the heightened pleading requirements for fraud under Rule 9(b). Consequently, the RICO claims were dismissed with prejudice, and the state law claims were dismissed without prejudice. View "Ratfield v United States Drug Testing Laboratories, Inc." on Justia Law

An executive at a litigation funding company, Signal, resigned to start a competing business and sought legal advice from Signal’s outside counsel, Sugar Felsenthal Grais & Helsinger LLP. Signal sued the law firm and several of its attorneys, alleging legal malpractice, breach of contract, breach of fiduciary duty, and fraud. The district court dismissed some claims and granted summary judgment in favor of the defendants on the remaining claims. Signal appealed these rulings.The United States District Court for the Northern District of Illinois dismissed Signal’s breach of fiduciary duty claim and part of its fraud claim, allowing the legal malpractice, breach of contract, and fraudulent misrepresentation claims to proceed. The court also struck Signal’s request for punitive damages. During discovery, the court denied Signal’s motion to compel production of a memorandum prepared by one of the defendants. The district court later granted summary judgment in favor of the defendants on all remaining claims.The United States Court of Appeals for the Seventh Circuit reviewed the case and affirmed the district court’s rulings. The appellate court agreed that Signal failed to establish proximate cause and damages for its legal malpractice and breach of contract claims. The court also found that Signal waived its challenge to the summary judgment ruling on the fraudulent misrepresentation claim by not adequately addressing it on appeal. Additionally, the court upheld the district court’s decision to deny Signal’s motion to compel production of the memorandum, as Signal did not demonstrate that the document influenced the witness’s testimony. The appellate court concluded that the district court’s dismissal of the fraudulent concealment theory was harmless error and denied Signal’s motion to certify a question to the Illinois Supreme Court as moot. View "Signal Funding, LLC v Sugar Felsenthal Grais & Helsinger LLP" on Justia Law

Ronald Norweathers was convicted by a jury and sentenced to 250 months’ imprisonment for possessing and distributing child pornography. He claimed that he was acting under the direction of an FBI agent, Joseph Bonsuk, who misled him into collecting and forwarding child pornography as part of a nonexistent undercover operation. The jury rejected his defense, and his post-trial motions and direct appeal were unsuccessful. Norweathers then moved to vacate his conviction and sentence under 28 U.S.C. § 2255, claiming ineffective assistance of counsel for failing to request certain jury instructions and for not calling a computer forensics expert as a witness. The district court denied his motion without a hearing.The United States District Court for the Northern District of Illinois denied Norweathers’s § 2255 motion, finding that his claims lacked merit. The court concluded that the failure to request an apparent authority or entrapment by estoppel jury instruction was immaterial because Norweathers’s testimony did not establish reasonable reliance on a government agent’s authority. The court also dismissed his claim regarding the computer forensics expert, deeming it insufficiently cogent to suggest constitutional error.The United States Court of Appeals for the Seventh Circuit reviewed the case and affirmed the district court’s decision. The court held that Norweathers’s ineffective assistance of counsel claims were without merit. It found that his testimony did not support a reasonable reliance on Bonsuk’s authority, making the jury instructions irrelevant. Additionally, the court determined that the decision not to call the computer forensics expert was a strategic choice within the wide range of reasonable professional assistance. The court concluded that Norweathers failed to demonstrate a substantial likelihood of a different result had the expert testified, and thus, the district court did not abuse its discretion in denying the motion without an evidentiary hearing. View "Norweathers v USA" on Justia Law

Members of a local union sued their national parent organization for imposing an illegal trusteeship. The plaintiffs, members of NABET-CWA Local 41, claimed that the national union imposed the trusteeship in bad faith following a local officer election. The district court agreed with the plaintiffs and issued a temporary restraining order, later converting it into a preliminary injunction. The parties eventually settled, resulting in a consent judgment that dissolved the trusteeship and required the national union to pay Local 41 approximately $26,000 in trusteeship costs. The only unresolved issue was whether the plaintiffs were entitled to attorneys' fees.The United States District Court for the Northern District of Illinois denied the plaintiffs' request for attorneys' fees. The court acknowledged its broad discretion and the American Rule, which presumes against fee shifting. It considered two exceptions: bad faith and common benefit. The court found that while the national union acted in bad faith in imposing the trusteeship, both parties litigated the dispute in good faith, thus not justifying fee shifting. Additionally, the court recognized that the plaintiffs conferred common benefits on Local 41 and the national union but concluded that these benefits were not substantial enough to merit an award of attorneys' fees.The United States Court of Appeals for the Seventh Circuit reviewed the district court's decision for abuse of discretion. The appellate court affirmed the district court's ruling, finding that the lower court had appropriately applied the American Rule and its exceptions. The district court's decision to deny attorneys' fees was deemed reasonable and within its broad discretion, as it provided a sound explanation for its conclusions. The appellate court emphasized the highly deferential standard of review for such decisions and upheld the district court's judgment. View "Siddiqui v National Association of Broadcast Employees & Tec" on Justia Law

William Hudson was convicted in Wisconsin state court of conspiracy to commit first-degree intentional homicide and conspiracy to commit arson. The convictions stemmed from an agreement Hudson made with another inmate, Scott Seal, to kill Seal’s ex-girlfriend and commit arson in exchange for payment. Seal, however, was an informant. After Hudson was released, he met with an undercover officer posing as Seal’s defense attorney, accepted an envelope with $6,000 and the targets' addresses, and was arrested. Hudson claimed he never intended to commit the crimes but was trying to scam Seal to support himself and his sister, Dana Hudson.Hudson filed a direct appeal alleging outrageous governmental conduct and ineffective assistance of trial counsel for not arguing the government’s conduct. The Wisconsin circuit court denied postconviction relief, and the Court of Appeals of Wisconsin affirmed. The Supreme Court of Wisconsin denied review. Hudson then filed a postconviction motion under Section 974.06, claiming ineffective assistance of trial counsel for not calling Dana as a witness and not investigating her testimony. The Wisconsin circuit court held evidentiary hearings and denied relief, finding counsel’s performance was not deficient. The Court of Appeals of Wisconsin affirmed, and the Supreme Court of Wisconsin denied review.Hudson filed a habeas petition in federal court, claiming ineffective assistance of trial counsel and postconviction counsel. The district court denied the petition, holding that the state court had not misapplied Strickland v. Washington and that trial counsel’s performance satisfied Strickland’s deferential standard. The United States Court of Appeals for the Seventh Circuit affirmed the district court’s decision, concluding that even if counsel’s performance was deficient, Hudson failed to demonstrate that the deficiencies prejudiced the outcome of the case. View "Hudson v DeHaan" on Justia Law

Bellin Memorial Hospital hired Kinsey & Kinsey, Inc. to upgrade its computer software. Kinsey failed to implement the agreed-upon software, leading Bellin to sue Kinsey in Wisconsin state court for breach of contract and other claims. Bellin also sued Kinsey’s president and a senior product consultant. Kinsey’s insurer, Philadelphia Indemnity Insurance Company, provided a defense under a professional liability insurance policy. During the trial, Bellin and Philadelphia Indemnity entered into a partial settlement, resolving some claims and specifying the conditions under which Bellin could collect damages from Kinsey. Bellin prevailed at trial and was awarded damages.The Wisconsin circuit court ruled that the limited liability provision in the Agreement did not apply due to Kinsey’s material breach. The court granted a directed verdict on the breach of contract claim against Kinsey, leaving the question of damages to the jury. The jury awarded Bellin $1.39 million, later reduced to $750,000 plus costs. The jury found Kinsey and its president not liable for intentional misrepresentation and misleading representation.Philadelphia Indemnity filed a declaratory judgment action in the United States District Court for the Northern District of Illinois, seeking a declaration that the state court’s judgment was covered by the insurance policy and that the $1 million settlement offset the $750,000 judgment. The district court ruled for Bellin, concluding that the state court judgment was not covered by the insurance policy.The United States Court of Appeals for the Seventh Circuit affirmed the district court’s decision. The court held that the insurance policy covered only negligent acts, errors, or omissions, and the state court’s judgment was based on a breach of contract, not negligence. Therefore, the $1 million set-off provision did not apply, and Bellin could recover the full amount of the judgment. View "Philadelphia Indemnity Insurance Co. v Kinsey & Kinsey, Inc." on Justia Law

Correctional officers at an Illinois state prison brutally beat inmate Larry Earvin, who later died from his injuries. Todd Sheffler and two others were charged with various federal crimes related to the killing and its cover-up. After a mistrial, Sheffler was retried and found guilty by a jury.In the United States District Court for the Central District of Illinois, Sheffler was convicted on five counts, including conspiracy to deprive civil rights, deprivation of civil rights, conspiracy to engage in misleading conduct, obstruction-falsification of documents, and obstruction-misleading conduct. Sheffler argued that there was no reasonable likelihood that his incident report and interview with state police would reach federal officials, challenging his convictions under 18 U.S.C. § 1512 and § 1519. He also contended that the district court erred in ruling he breached a proffer agreement and allowed a biased juror to sit on his trial. Additionally, he claimed prosecutorial misconduct during the rebuttal closing argument.The United States Court of Appeals for the Seventh Circuit reviewed the case. The court held that sufficient evidence supported Sheffler’s convictions, as it was reasonably likely that his false statements would reach federal officials, given the severity of the crime and the cooperation between state and federal authorities. The court also found no clear error in the district court’s conclusion that Sheffler breached the proffer agreement by making false statements during FBI interviews. Furthermore, the court determined that the district court did not abuse its discretion in handling the juror bias issue or in denying Sheffler’s motion for a new trial based on alleged prosecutorial misconduct.The Seventh Circuit affirmed the district court’s denial of Sheffler’s motion for a new trial and upheld his convictions. View "USA v Sheffler" on Justia Law

Attorney Stephen Eberhardt filed a 102-page, 19-count complaint against 11 defendants, including the Village of Tinley Park, its officials, attorneys, and residents, alleging a scheme to prevent him from making public comments at Village board meetings and on Village-related Facebook pages, violating his constitutional rights. He also brought claims against the Village’s outside counsel, Patrick Walsh, under the Illinois Open Meetings Act. The district court dismissed the complaint without prejudice for being too lengthy and jumbled. Eberhardt then filed an amended complaint, which was also dismissed, and the court entered final judgment.Following the judgment, Walsh’s attorney filed a motion for sanctions under Rule 11 of the Federal Rules of Civil Procedure, arguing that Eberhardt’s claims were frivolous and filed in bad faith to harass Walsh. The district court granted the motion, ordering Eberhardt to pay $26,951.22 in attorneys’ fees, finding that his claims were frivolous and brought with inadequate investigation into the relevant law and facts. The court noted Eberhardt’s history of filing numerous lawsuits and motions, which indicated bad faith.Eberhardt appealed to the United States Court of Appeals for the Seventh Circuit, challenging the district court’s decision to sanction him and its denial of his motion to reconsider. The Seventh Circuit reviewed the case and found no abuse of discretion in the district court’s decisions. The court affirmed the sanctions order, agreeing that Eberhardt’s claims were frivolous and brought in bad faith, and that a hearing was not necessary as the record was adequate to determine the need for sanctions. The court also affirmed the denial of the motion to reconsider, finding no manifest errors of law or fact. View "Eberhardt v. Walsh" on Justia Law

Clarence Bonds, serving a 71-month sentence for transporting a firearm in interstate commerce as a felon, sought a reduced sentence based on Amendment 821 to the U.S. Sentencing Guidelines. This amendment, which applies retroactively, reduced Bonds's criminal history category from IV to III, thereby lowering his advisory Guidelines range from 57–71 months to 46–57 months. Bonds requested the district court to reduce his sentence accordingly. The district court acknowledged the amendment's impact but declined to reduce his sentence, citing the need for deterrence, incapacitation, public protection, and Bonds's extensive criminal history, which included numerous violent crimes with firearms.The United States District Court for the Northern District of Indiana denied Bonds's motion for a sentence reduction. The court recognized the amendment's effect on Bonds's criminal history category and advisory range but exercised its discretion to maintain the original sentence. The court emphasized Bonds's long criminal history and the serious nature of his offenses as reasons for not reducing the sentence.The United States Court of Appeals for the Seventh Circuit reviewed the case. The court affirmed the district court's decision, finding no abuse of discretion in denying Bonds's motion for a sentence reduction. The appellate court agreed that the district court had adequately considered the relevant factors under 28 U.S.C. § 3553(a) and provided a sufficient explanation for its decision. Additionally, the appellate court addressed whether the Criminal Justice Act authorized the appointment of appellate counsel for Bonds in his effort to challenge the district court's ruling. The panel was divided on this issue, with each judge providing a separate opinion. Ultimately, the court affirmed the district court's denial of Bonds's motion on the merits. View "United States v. Bonds" on Justia Law

A family of six Mexican citizens entered the United States without authorization and were subsequently placed in removal proceedings. They hired an attorney to help them apply for asylum. Despite having nearly fifteen months to prepare, the attorney requested a continuance only eight days before the hearing, citing the government shutdown as a reason for her lack of preparation. The Immigration Judge (IJ) denied the continuance and, due to the attorney's unpreparedness, deemed the asylum applications abandoned, ordering the family's removal. The Board of Immigration Appeals (BIA) affirmed the IJ's decision.The family appealed to the United States Court of Appeals for the Seventh Circuit. The court dismissed the cases of two family members due to lack of jurisdiction, as their removal proceedings had been terminated after they received special immigrant status. The remaining four family members argued that the IJ erred in denying the continuance and that their attorney was ineffective. The court found that the IJ did not abuse his discretion in denying the continuance, as the attorney had ample time to prepare and failed to do so. The court also noted that the attorney's unpreparedness did not violate the family's due process rights.Regarding the ineffective assistance of counsel claim, the court acknowledged the attorney's failure to prepare but noted that the family did not present this claim to the BIA, thus failing to exhaust administrative remedies. Consequently, the court could not consider the ineffective assistance claim. The court suggested that the family could seek to reopen the proceedings through a motion to reopen or by requesting equitable tolling of the deadline.The United States Court of Appeals for the Seventh Circuit dismissed the petitions of two family members and denied the petitions for review of the remaining four family members. View "Bustos-Millan v. Garland" on Justia Law