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

Plaintiff contracted for satellite TV service. Equipment costs are amortized in monthly payments; a customer who discontinues service owes a fee to cover the unpaid portion of equipment cost. Plaintiff authorized a charge to her debit card should that occur. Plaintiff stopped paying the monthly charge. Defendant collected the termination fee via the debit card. Plaintiff argued that the Social Security Act, 42 U.S.C. 407(a), provides that benefits may not be assigned or subject to attachment or garnishment at the behest of creditors, and that, unbeknownst to defendant, all funds in her account came from Social Security benefits. The district court ruled in favor of defendant. The Seventh Circuit affirmed. Plaintiff's arrangement was consensual, unlike "legal process." The statute does not authorize private parties to sue for damages based on assignments of Social Security benefits.

ESBC, billing agent for the Fire Department, determined that each of the individual defendants owned a vehicle involved in a collision to which the Fire Department responded and each had insurance coverage, and billed response costs incurred for each collision. The defendants refused to pay and ESBC sought a declaration that defendants were liable under the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. 9601. Under CERCLA, the owner of a “facility” from which hazardous substances have been released is responsible for response costs that result from the release. Insurer-defendants counterclaimed for injunctive relief from ESBC’s billing practices and alleging violation of the Fair Debt Collection Practices Act, 15 U.S.C. 1692, unjust enrichment, unlawful fee collection, fraud, constructive fraud, and insurance fraud. The district court granted defendants judgment on the pleadings and dismissed counterclaims without prejudice. The Seventh Circuit affirmed. Motor vehicles for personal use fall under the "consumer product in consumer use” exception to CERCLA’s definition of facility

After a 1999 auto accident, plaintiff had severe back pains and was diagnosed with a Chiari malformation, a protrusion of brain tissue into the spinal canal. After three operations on her brain and spine, her vision and speech problems lessened, but she developed hydrocephalus, a buildup of cerebrospinal fluid in the brain that required installation of a shunt in her brain. She has not worked since the auto accident and was last insured for social security disability benefits in June 2005 (when she was 34 years old), so only if she was disabled from full-time work by that date is she eligible for benefits. An administrative law judge found her capable of sedentary work. The Seventh Circuit reversed, finding that the ALJ failed to bridge the gap between medical testimony and plaintiff's testimony and his conclusion.

Medicare Part A reimburses hospitals according to a Prospective Payment System (42 U.S.C. 1395ww(d), which uses a predetermined formula to calculate reimbursement for each patient discharge without regard to the actual cost incurred. The formula includes the average hourly wage of the employees in the geographic region, including paid lunch hours. Hospitals objected to the practice because some hospitals give paid lunch breaks, which depresses the average area hourly wage and, in turn, their Medicare reimbursements. The district court granted summary judgment for the government. The Seventh Circuit affirmed, reasoning that counting all paid hours, for the sake of administrative simplicity, is not arbitrary.

Defendant operated what appeared to be convenience stores, but in fact were fronts that rang up phony sales for food-stamp recipients to exchange their benefits for discounted amounts of cash. When federal investigators discovered the scheme at one location, he obtained government authorization to accept food stamps at a different address and continued the operation. Defendant eventually pleaded guilty to eight counts of wire fraud, 18 U.S.C. 1343, and was sentenced to 60 months' imprisonment and ordered to pay almost $1.7 million in restitution. The Seventh Circuit affirmed. The district court properly imposed a 16-level sentencing increase under 2B1.1(b)(1)(I) for a loss of more than $1 million because. If anything, the court underestimated the loss. The court properly assessed a 4-level increase under 3B1.1(a) for leadership in an "extensive" scam; defendant ran the scam from multiple locations, traded cash for benefits with "probably hundreds" of customers, and supervised employees at his stores.

Plaintiff entered into a lease with the housing authority in 2007 as "Resident" and named her two sons as "Household Members." The lease provided that certain criminal activities could lead to immediate eviction. Plaintiff received a notice to vacate a few weeks later, after a visit by her daughter led to a gunfight in the parking lot. While plaintiff's challenge was pending, second and third notices issued. Police had been called to her apartment and determined that plaintiff had stabbed her husband, who was living at the apartment and was high on cocaine. Officers found joints on the counter. Plaintiff vacated. The district court granted summary judgment in favor of the defendants on federal claims and declined to exercise jurisdiction over state law claims. The Seventh Circuit affirmed. The case is moot because plaintiff never contested the second and third notices and, therefore, cannot be restored to the apartment; there was evidence that she lied on her application and was never eligible for tenancy. She incurred no expenses and state court proceedings provided all the process that was due. The court rejected a claim of emotional distress and a claim that the complex constituted segregated housing.

Mother applied for supplemental security income on her daughter's behalf shortly before daughter's s eighteenth birthday, claiming that daughter was disabled by a combination of mental impairments (including bipolar disorder) and by physical impairments resulting from a 2005 car accident. An administrative law judge found the collective impairments severe but not disabling. The Seventh Circuit reversed and remanded. The ALJ did not properly analyze the opinion of a treating psychiatrist and did not adequately question vocational experts with respect to limitations on her concentration, pace, or persistence.

Following multiple surgeries for back injuries and multiple, unsuccessful, claims for disability benefits, the applicant asserted, in a 2008 hearing, that she had been disabled since 2004 and was still disabled but had returned to work because she needed the money. An ALJ found that she had been disabled by chronic back pain but after four years showed "medical improvement." and returned to full-time work.The ALJ awarded benefits for a closed period. The Seventh Circuit reversed and remanded. The ALJ never evaluated whether that work constituted an authorized, and encouraged, trial work period and, therefore, could not be labeled as substantial gainful activity.

Petitioner's claim for Social Security disability insurance benefits (42 U.S.C. 423(a)(1)(E)) and supplemental security income payments after suffering serious injuries in a motorcycle crash were denied by the Social Security Administration. An ALJ also denied the claim after conducting a hearing, finding that petitioner could perform a significant number of jobs. The district court the denial. The Seventh Circuit affirmed the denial as supported by substantial evidence that petitioner is qualified to work in positions that are available in substantial numbers.

Based on her part in billing Indiana Medicaid for ambulance service while running a car service to take patients to medical appointments, defendant was convicted of Medicaid fraud, 18 U.S.C. 1347, and conspiracy to defraud the U.S. government, 18 U.S.C. 371. She was sentenced to 33 months in prison and to pay restitution of $846,115. The Seventh Circuit affirmed. Data relating to time-stamping of bills, which may have established that multiple people submitted bills, was not concealed; the government simply failed to extract (before trial) information to which it and the defense had access. Even if the data was "Brady" material, it would not have changed the outcome. The judge did not err in telling the jury that a scheduled witness was ill without saying that the witness had refused treatment.