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

A dispute arose between neighbors in Illinois over a property line, with one party, Mr. Barker, seeking to quiet title to land upon which the Boettchers had built a garage. The Boettchers counterclaimed, asserting adverse possession and contesting the property’s boundaries. During this litigation, the Boettchers issued subpoenas to two employees of the United States Department of Agriculture for documents and testimony relating to farm acreage. The Department refused compliance, citing federal regulations, and when the Boettchers would not withdraw the subpoenas, the Department removed only the subpoena proceeding—not the entire case—to federal court under the federal officer removal statute.The Boettchers subsequently attempted to remove the entire state case to federal court, invoking both the general removal statute and federal question jurisdiction, arguing that federal law originally defined the disputed property lines. Mr. Barker moved to remand, arguing that the property dispute was governed by Illinois law. The United States District Court for the Central District of Illinois retained jurisdiction over the subpoena proceeding but remanded the property dispute to state court. The court later granted summary judgment to the Department of Agriculture, quashing the subpoenas.On appeal, the United States Court of Appeals for the Seventh Circuit held that it had jurisdiction to review the remand order under 28 U.S.C. § 1447(d), since federal officer jurisdiction was invoked. The court affirmed the district court’s decision, concluding that the Department’s removal of only the subpoena proceeding was proper under the statute, and that there was no independent federal jurisdiction over the property dispute. The court also held that the district court properly quashed the subpoenas, as neither the state nor federal court had jurisdiction to enforce them against federal employees under the circumstances. The judgment was affirmed. View "Barker v Boettcher" on Justia Law

Several landowners in Indiana, who acquired their properties subject to agreements made in 1959, sought to enroll their land in a federal conservation program. During the process, a title examination revealed that Trunkline Gas Company held easements over their properties, allowing it to construct and maintain pipelines. The landowners contended that Trunkline’s easement was limited to a fixed 66-foot corridor along the existing pipeline, which had been installed in 1960. Trunkline, however, asserted that the original agreements granted it rights to lay additional pipelines anywhere on the properties and to alter the route of the existing pipeline.The landowners filed suit in the United States District Court for the Northern District of Indiana, seeking a declaration that Trunkline’s easement was fixed and limited in scope. Trunkline counterclaimed, seeking confirmation of its broader, unexercised rights. The district court divided the litigation into two phases and, in both, granted partial summary judgment in Trunkline’s favor. The court concluded that the 1959 agreements created a floating or blanket easement, meaning the location for future pipelines was not fixed, and that Indiana law did not allow unexercised, future easement rights to be fixed to a defined location.On appeal, the landowners asked the United States Court of Appeals for the Seventh Circuit to certify a question to the Indiana Supreme Court regarding the fixity of floating easements, or, alternatively, to reverse the district court. The Seventh Circuit declined to certify, finding Indiana law sufficiently clear that unexercised, future rights under a floating easement are not fixed. The court affirmed the district court’s summary judgment, holding that Trunkline’s unexercised easement rights remain unfixed under Indiana law. View "Close Armstrong, LLC v Trunkline Gas Company, LLC" on Justia Law

Jerome and Shaun Cohen operated a Ponzi scheme through their companies, EquityBuild, Inc. and EquityBuild Finance, LLC, from 2010 to 2018. They solicited funds from individual investors and institutional lenders, promising high returns secured by real estate, primarily in Chicago. In reality, the Cohens used new investors’ funds to pay earlier investors and overvalued properties to retain excess capital. By 2018, the scheme collapsed, leaving over $75 million in unpaid obligations. The Securities and Exchange Commission intervened, obtaining a temporary restraining order and having a receiver appointed to liquidate assets and distribute proceeds to victims.The United States District Court for the Northern District of Illinois oversaw the receivership and determined how proceeds from the sale of two properties—7749 South Yates and 5450 South Indiana—should be distributed. Both a group of individual investors and Shatar Capital Partners claimed priority to the proceeds, with Shatar arguing its mortgages were recorded before those of the individual investors. The district court found that Shatar was on inquiry notice of the individual investors’ preexisting interests and thus not entitled to priority, limiting all claimants’ recoveries to their contributed principal, minus any amounts previously received.On appeal, the United States Court of Appeals for the Seventh Circuit reviewed the district court’s distribution order. The appellate court affirmed, holding that under Illinois law, Shatar was on inquiry notice of the individual investors’ interests in both properties at the time it invested, given multiple red flags about the properties’ financing and EquityBuild’s business model. As a result, the individual investors were entitled to priority in the distribution of proceeds. The court also found Shatar’s challenge to the distribution plan moot, as there were insufficient funds to benefit Shatar after satisfying the investors’ claims. View "Securities and Exchange Commission v. Duff" on Justia Law

Four property-specific limited liability companies owned real estate in Wisconsin, which was leased to skilled nursing facilities operated by Kevin Breslin through his company, KBWB Operations, LLC. Breslin and his co-guarantors executed personal guaranties ensuring payment and performance under the leases. The nursing facility tenants defaulted on their rent obligations starting in 2018 and subsequently lost their operating licenses after a court-appointed receiver moved residents out. The tenants also failed to complete a purchase option for the properties, triggering a liquidated damages clause. Plaintiffs later sold the properties at a loss.The plaintiffs sued Breslin, his company, and co-guarantors in the United States District Court for the Northern District of Illinois to enforce the guaranties and recover damages. During the litigation, plaintiffs discovered that one co-guarantor was a California citizen, which destroyed complete diversity and thus federal jurisdiction. Plaintiffs moved to dismiss this non-diverse defendant, arguing he was not indispensable because the guaranties provided for joint and several liability. The district court agreed and dismissed him. Breslin did not oppose the dismissal. Plaintiffs then moved for summary judgment; Breslin, facing criminal charges, invoked the Fifth Amendment and presented no evidence on liability or damages. The district court granted summary judgment to plaintiffs and awarded nearly $22 million in damages across several categories.On appeal, the United States Court of Appeals for the Seventh Circuit held that jurisdiction was proper because the dismissed co-guarantor was not an indispensable party under Rule 19, given joint and several liability. The court affirmed the district court’s findings on most damages but vacated the awards for accelerated rent under one lease (pending further consideration of its enforceability as a liquidated damages clause) and for liquidated damages related to the purchase option (finding it unenforceable as a penalty). The case was remanded for recalculation of damages consistent with these holdings. In all other respects, the judgment was affirmed. View "CCP Golden/7470 LLC v. Breslin" on Justia Law

The plaintiffs, a microbrewery and its owner, operated a seasonal business in a tourist town and became known for engaging in political advocacy. The business applied for various permits to operate both an indoor retail outlet and, later, an outdoor beer garden. Despite being granted permits that included specific conditions—such as restrictions on outdoor operations—the plaintiffs repeatedly violated these conditions, operated without proper permits, and explicitly stated their intention to continue doing so regardless of regulatory decisions. Throughout this period, the owner was vocal in criticizing local officials on social media.After several rounds of permit applications, denials, suspensions, and revocations, the plaintiffs’ most recent permit application for an outdoor beer garden was denied by the county committee, which cited the plaintiffs’ ongoing and willful violations of permit conditions and their declared intent to continue such violations. The plaintiffs appealed administrative actions to the Oneida County Board of Adjustment, which upheld the revocations. Subsequently, the plaintiffs filed a lawsuit in the United States District Court for the Western District of Wisconsin, asserting that the permit denials and revocations constituted retaliation for protected political speech, in violation of the First Amendment. They sought a preliminary injunction to reinstate their permit and prevent further alleged retaliation.The United States Court of Appeals for the Seventh Circuit reviewed the district court’s denial of the preliminary injunction and affirmed it. The Seventh Circuit held that, while the plaintiffs engaged in protected speech and suffered adverse permit actions, they failed to demonstrate a likelihood of success on the merits of their First Amendment retaliation claim. The court concluded that the permit denials and revocations were based on the plaintiffs’ repeated and admitted violations of permit conditions, not on retaliatory motives, and that the plaintiffs offered no evidence of disparate treatment or pretext. View "Minocqua Brewing Company LLC v Hess" on Justia Law

The case concerns three heirs of Paul von Mendelssohn-Bartholdy, a Jewish German art collector persecuted by the Nazi regime, who seek to recover Vincent van Gogh’s painting “Sunflowers.” Mendelssohn-Bartholdy was forced to liquidate his art collection in the 1930s due to Nazi policies. The painting was sold through a Parisian dealer, later purchased at auction in London in 1987 by Yasuda Fire and Marine Insurance Company, which subsequently became Sompo Japan Insurance. The painting was exhibited briefly in Chicago and Amsterdam in 2001–2002 before returning to Japan, where it remains on display.The plaintiffs filed suit in the United States District Court for the Northern District of Illinois against Sompo Holdings and its affiliates, seeking the painting’s return or compensation, alleging various state and federal claims. The district court found it lacked subject matter jurisdiction over the federal claims because the Holocaust Expropriated Art Recovery Act (HEAR Act) does not create a federal cause of action, and the plaintiffs had not shown a conflict between state law and federal policy to justify federal common law claims. For the state law claims, the district court held (following a Pennsylvania district court’s reasoning in Holtzman) that the HEAR Act’s extension of limitations periods could confer federal question jurisdiction, but ultimately dismissed these claims for lack of personal jurisdiction over the defendants, finding insufficient connection to Illinois.On appeal, the United States Court of Appeals for the Seventh Circuit affirmed. The court held that the federal claims failed for lack of a federal cause of action or basis for federal common law. As for the state law claims, the Seventh Circuit declined to address subject matter jurisdiction and instead affirmed the dismissal for lack of personal jurisdiction, concluding the defendants’ contacts with Illinois were unrelated to the plaintiffs’ claims. The court also found no abuse of discretion in denying leave to file a further amended complaint. View "Schoeps v. Sompo Holdings, Inc." on Justia Law

Amy Hadley’s home in South Bend, Indiana, was significantly damaged when law enforcement officers executed a search warrant in pursuit of a murder suspect they believed was inside her residence. The officers, acting on information that the suspect had accessed his Facebook account from Hadley’s IP address, obtained a warrant and forcefully entered the home, causing extensive property damage, including the use of tear gas and destruction of personal items. Hadley, who had no connection to the suspect, was denied compensation by both the City of South Bend and St. Joseph County for the $16,000 in damages.After her request for compensation was denied, Hadley filed suit in Indiana state court, seeking relief under 42 U.S.C. § 1983 for violations of her Fifth and Fourteenth Amendment rights, specifically invoking the Takings Clause. The case was removed to the United States District Court for the Northern District of Indiana, South Bend Division. The defendants moved to dismiss, arguing that Seventh Circuit precedent, particularly Johnson v. Manitowoc County, foreclosed her claim. The district court agreed and dismissed the complaint, finding that the Takings Clause did not entitle her to compensation for property damage resulting from the execution of a lawful search warrant.On appeal, the United States Court of Appeals for the Seventh Circuit affirmed the district court’s dismissal. The court held that, under its precedent in Johnson v. Manitowoc County, the Fifth Amendment does not require the government to compensate property owners for damage caused by law enforcement executing a valid search warrant. The court declined to overrule Johnson and found that Hadley’s arguments did not warrant revisiting the established rule. View "Hadley v. City of South Bend" on Justia Law

Elmer Miller, a general contractor and owner of a construction company, was cited by the Occupational Safety and Health Administration (OSHA) for failing to provide fall protection for workers. OSHA sent the citation by certified mail to an address (433 E. County Road, 100 North, Arcola, Illinois) that it had used for Miller in the past. The certified mail was twice refused at that address and returned. OSHA then resent the citation to the same address using UPS, which was marked as received by “Miller.” Miller later argued that the citation was not properly served because it was sent to the wrong address and that there was no proof he received it, claiming his correct address was 435 E. County Road, not 433.After Miller did not contest the citation within the statutory period, the citation became a final order. The Secretary of Labor petitioned the United States Court of Appeals for the Seventh Circuit for summary enforcement of the order. In response, Miller raised the issue of improper service, asserting that the Commission failed to prove adequate service because the citation was not sent to his correct address. The Secretary countered with public records and prior court documents showing Miller and his business had repeatedly used the 433 address for official purposes, including previous OSHA citations and court filings.The United States Court of Appeals for the Seventh Circuit held that OSHA’s service of the citation to the 433 address was reasonably calculated to provide Miller with notice, satisfying due process requirements. The court found that Miller’s history of using the 433 address and his prior acceptance of service there undermined his claim. The court granted the Secretary of Labor’s petition for summary enforcement and issued the enforcement decree pursuant to 29 U.S.C. §660(b). View "Chavez-DeRemer v. Miller" on Justia Law

Chosen Consulting, LLC, doing business as Chosen Healthcare, and other related entities (collectively "Chosen") filed a lawsuit against the Town Council of Highland, Indiana, the Highland Municipal Plan Commission, and the Town of Highland, Indiana (collectively "the Town"). Chosen alleged that the Town discriminated against patients with addiction-related ailments by refusing to provide a letter stating that Chosen’s proposed use of its property complies with local zoning requirements. Chosen claimed this discrimination violated the Americans with Disabilities Act (ADA) and the Rehabilitation Act of 1973, seeking compensatory, injunctive, and declaratory relief.The United States District Court for the Northern District of Indiana granted summary judgment to the Town. The district court held that Chosen's claim for injunctive relief under the ADA and the Rehabilitation Act was not ripe for adjudication because Chosen had not obtained a final decision from the local zoning authorities. The court indicated that Chosen needed to pursue its request for zoning approval through the Board of Zoning Appeals (BZA) and, if necessary, appeal any final decision entered by the BZA to the state courts before seeking an injunction in federal court.The United States Court of Appeals for the Seventh Circuit reviewed the case and affirmed the district court's decision. The Seventh Circuit held that Chosen's claim for injunctive relief was not ripe because Chosen had not satisfied the finality requirement set forth in Williamson County Regional Planning Commission v. Hamilton Bank of Johnson City. The court emphasized that Chosen needed to follow the local zoning procedures, including applying for a use variance or seeking a declaratory judgment in state court, to obtain a final decision from the Town. Until Chosen completed these steps, the dispute was not ripe for federal court review. View "Chosen Consulting, LLC v Town Council of Highland" on Justia Law

In 1997, William Brokaw Price’s parents entered into a contract with Carri Scharf Trucking, Inc. (CST) for surface-level mining on their property. The contract allowed CST to extract sand, gravel, and topsoil in exchange for royalty payments. As the contract neared its end in 2010, Bill Price, Brokaw’s father, communicated with CST about future plans for the property but passed away shortly after. Years later, Brokaw discovered that the property had not been reclaimed as required by the contract, leading to a dispute over CST’s reclamation obligations and alleged trespassing.The Prices sued CST for breach of contract, and CST counterclaimed for breach based on the Prices’ trespass accusations. The first trial ended in a mistrial, and the second trial resulted in a verdict for CST. The district court denied the Prices’ motion for judgment as a matter of law and rejected CST’s request for attorney’s fees under the contract’s fee-shifting provision.The United States Court of Appeals for the Seventh Circuit reviewed the case. The court affirmed the district court’s decision, holding that the contract did not set a firm deadline for reclamation and allowed for a jury to resolve factual disputes about the instructions given by Bill Price. The jury had a sufficient basis for its verdict in favor of CST. Additionally, the court held that CST was not entitled to attorney’s fees because the contract’s fee-shifting provision only applied to parties enforcing the contract’s terms, and CST’s successful defense did not trigger that provision. The court affirmed the judgment of the district court in all respects. View "Price v Carri Scharf Trucking, Inc." on Justia Law