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

The Patient Protection and Affordable Care Act, 42 U.S.C. 18002, provides $5 billion to reimburse employers and their proxies for outlays on early retirees’ medical care. WEA, which administers health-care programs on behalf of Wisconsin school districts, told them that it would collect on their behalf. It decided to use the money to reduce future premiums. The school districts claim that WEA should have rebated premiums for the years in which the retirees received the medical care that led to the federal payments. The difference matters to school districts that want to switch carriers. WEA’s plan to cut future rates, rather than provide rebates, gave it a competitive advantage. Districts filed suit, characterizing WEA’s choice to allocate no money to districts, that switch carriers as a form of conversion. All of the claims arise under state law and all litigants are citizens of Wisconsin. WEA removed to federal court, contending that the Act and its implementing regulations are the crux of the litigation. The Seventh Circuit ordered the case returned to state court, reasoning that the suit does not necessarily raise any issue of federal law and that the McCarran-Ferguson Act, 15 U.S.C. 1011–15, gives states preeminence in the domain of insurance regulation. View "Hartland Lakeside Joint No. 3 Sch. Dist. v. WEA Ins. Corp." on Justia Law

The Gagnards built a house in Los Altos, California, then sold the home to Goldman in January, 2004. Since then, Goldman has sued the Gagnards and those involved with the construction and sale of the house in various tribunals. In 2011, Goldman registered a foreign arbitral award in Illinois. She then sought citations to discover and collect assets. The district court issued denied reconsideration motions and granted a turnover order. After filing an appeal, the Gagnards paid $1.3 million to Goldman in satisfaction of the judgment. Goldman accepted the payment, and refunded money she had collected in excess of the judgment balance. The district discharged all pending citations and allowed the Gagnards to file a counterclaim against Goldman, claiming unjust enrichment, but subsequently dismissed the counter-complaint. The Seventh Circuit affirmed, based on the failure, by the Gagnards to act in a timely manner. View "Goldman v. Gagnard" on Justia Law

Stein ran legitimate companies for which he maintained bank accounts. In need of capital for construction projects, he approached his Wiley, a part-owner of currency exchanges, and proposed that Stein write checks from (underfunded) bank accounts to cash at the exchanges in order to have use of money for a few days to run his business. At the end of that period, if his business had turned the necessary profit, the checks would clear; if not, he could write more checks, cash them, deposit proceeds to cover the earlier checks, and have money to continue operations. Stein ran the check-kiting scheme for five months. To clear previous checks and obtain capital for the next period, he had to write larger (or more) checks each cycle. Each time a check was cashed, the exchange also charged a fee, so the balance was spiraling upward. Eventually Stein was injured and not physically able to continue the scheme. The Wiley exchanges lost $440,000 from checks that did not clear. Another exchange lost $250,000. Stein pleaded guilty to wire fraud, 18 U.S.C. 1343. After a remand, the district court revised the loss amount, and again gave a below-guidelines sentence of 21 months’ imprisonment, but still entered a restitution amount of over one million dollars. The Seventh Circuit affirmed, rejecting an argument that the loss to Wiley’s exchanges should not be incorporated into restitution because of Wiley’s complicity in the scheme. View "United States v. Stein" on Justia Law

Garrett was convicted of possessing with intent to distribute 50 or more grams of crack cocaine and sentenced to 190 months in prison. The Seventh Circuit affirmed his conviction, but vacated the sentence. The district court properly denied his motion to suppress post-arrest statements and information recovered from a search of his cell phone; intercepted phone calls, eyewitness testimony, and recovery of money and drugs establish that the officers had probable cause for arrest. The district court reasonably found that Garrett consented to a search of his cell phone. The court rejected an argument that it was error to allow the investigating agent to testify as an expert in the drug trade, noting that the judge did not permit reference to the officer as an expert before the jury. In instructing the jury not to consider potential punishment, the court did not misstate the law or mislead the jury. Use of an outdated verdict form did not prejudice Garrett; he received the benefit of the Fair Sentencing Act’s reduced penalties at sentencing. In calculating the appropriate Guidelines range for Garrett’s drug offense, however, the court did not clearly state the drug quantity that it found attributable to Garrett or adequately indicate the evidence it found reliable in determining his relevant conduct. View "United States v. Garrett" on Justia Law

West Side Christian Church applied to the City of Evansville, Indiana, for a permit to set up its “Cross the River” display, consisting of 31 six-foot tall decorated crosses on four blocks of public Riverfront. After Evansville approved the application, residents sought an injunction, claiming that the display violated their First Amendment rights. The district court agreed. The City did not appeal, but West Side, which was an intervenor in the district court, did. The Sixth Circuit dismissed, finding that West Side did not have standing to appeal. The court could not redress any injury West Side might have suffered because Evansville was not party to this appeal and could prohibit the display regardless of any order issued. Any First Amendment injury West Side might have suffered from the injunction was not fairly traceable to, or caused by, Evansville. View "Cabral v. City of Evansville" on Justia Law

A Regional Transmission Organization is a voluntary association primarily of utilities that either own electrical transmission lines that comprise a regional electrical grid or generate electricity that is transmitted to the customers in the region. Members of a Regional Transmission Organization and the Illinois Commerce Commission, on behalf of the largest electrical utility in Illinois, (collectively PJM) obtained a remand of an order of the Federal Energy Regulatory Commission in 2009. That order allocated costs for certain new high‐voltage network transmission lines that are part of a regional grid that includes the western utilities, but are all located in PJM’s eastern region and primarily benefit that region. Unhappy with the order issued on remand, PJM returned to court. The Seventh Circuit again remanded, acknowledging that the benefits of new facilities to the utilities may be unquantifiable because they depend on the likelihood and magnitude of outages and other contingencies. The order should not shift a grossly disproportionate share of costs to western utilities, given that the projects will confer only future, speculative, and limited benefits to those utilities.View "IL Commerce Comm'n v. Fed. Energy Regulatory Comm'n" on Justia Law

Parmalat, a large Italian food and dairy company, entered bankruptcy in Italy and Bondi was appointed “extraordinary commissioner,” the equivalent of a bankruptcy trustee. In 2004 Bondi instituted, in New York, a proceeding under the since-repealed section 304 of the U.S. Bankruptcy Code to enjoin any action against Parmalat with respect to property involved in the Italian bankruptcy, to consolidate claims against the company. Months later, Bondi filed suit in Illinois, against Thornton, an accounting company, claiming that Thornton contributed to the collapse of Parmalat by conducting fraudulent audits of in violation of Illinois tort law. The case was removed to federal court. The New York district court declined to abstain in light of the Illinois suit and granted Thornton summary judgment, on the ground that the doctrine of in pari delicto barred Parmalat’s claim against the accounting company. The Second Circuit vacated and remanded with instructions to remand to Illinois state court. The Illinois district court declined to remand to state court and upheld the in pari delicto ruling. The Seventh Circuit held that the district court was required to remand to the state court, but noted that the New York litigation remained unresolved. View "Bondi v. Grant Thornton Int'l" on Justia Law

Johnson was charged with distributing crack cocaine, 21 U.S.C. 841(a)(1) and 841(b)(1)(C), and being a felon in possession of a firearm, 18 U.S.C. 922(g). The panel of prospective jurors consisted of 33 people: 16 male, and 17 female. Circuit Judge. After a jury convicted him, Johnson received a 210-month sentence. The Seventh Circuit affirmed, vacating one condition of supervised release. The government exercised peremptory challenges against two female prospective jurors, but Johnson failed to show a prima facie case of discrimination on the basis of gender so the court did not need to evaluate the reasons for the strikes. In imposing the sentence, which was largely driven by his career offender status, the district court understood Johnson’s request for a below-guidelines sentence but rejected it in light of his criminal history. The special condition of supervised release requiring that Johnson participate in a sex offender treatment program was not supported by the 18 U.S.C. 3553(a) factors. Johnson’s only sex-related offense was 15 years earlier when he received a misdemeanor conviction and a probation-only sentence because, at the age of 17, he had sex with a girl over 13 and less than 17 years old. View "United States v. Johnson" on Justia Law

Spaine was a seasonal employee from 2008 until 2011, helping low-income and disabled persons register for housing assistance. Spaine alleges that she was harassed and unfairly disciplined because of her race and that she was told, when her 2011 employment ended, that instead of being reinstated automatically as in the past, she would have to reapply the next year. Spaine interpreted this as termination. She filed suit under 42 U.S.C. 1981 alleging that she was harassed and eventually fired because she is African American. Months after filing that complaint, Spaine filed a petition under Chapter 7 of the bankruptcy code. Spaine was represented by counsel in the discrimination suit, but was without a lawyer in the bankruptcy case. On a schedule of personal property, Spaine was required to list contingent and unliquidated claims of all types. She listed nothing. In the separate financial statement, Spaine was required to list lawsuits to which she was party within the preceding year. She listed two eviction suits, but did not list her discrimination suit. A transcript of the creditors’ meeting shows that Spaine told the bankruptcy trustee about her discrimination lawsuit at the first opportunity after filing her incomplete schedules. Spaine also subsequently filed an affidavit indicating that she told the bankruptcy judge about the suit. The employer alleged that Spaine was trying to conceal the suit. Spaine successfully moved to reopen her bankruptcy. The discrimination suit was dismissed on estoppel grounds. The Seventh Circuit reversed, finding that material facts remained in dispute. View "Spaine v. Kane-Richards" on Justia Law

Gienapp worked at Harbor Crestnursing care facility. In January 2011 she told Chattic, its manager, that she needed leave to care for her daughter, who was being treated for thyroid cancer. Chattic granted leave under the Family and Medical Leave Act, 29 U.S.C. 2612(a)(1). While on leave, Gienapp submitted an FMLA form, leaving blank a question about the leave’s expected duration. Harbor Crest did not ask her to fill in the blank, nor did it pose written questions as the 12-week period progressed. A physician’s statement on the form said that the daughter’s recovery was uncertain, and that if she did recover she would require assistance at least through July 2011. Chattic inferred from this that Gienapp would not return by April 1, her leave’s outer limit, and hired a replacement. When Gienapp reported for work on March 29, Chattic told her that she no longer had a job. The district court entered summary judgment, ruling that Gienapp had forfeited her FMLA rights by not stating exactly how much leave she would take. The Seventh Circuit reversed. Gienapp could not give a firm date; Department of Labor regulations call her situation “unforeseeable” leave, governed by 29 C.F.R. 825.303, which does not require employees to tell employers how much leave they need. View "Gienapp v. Harbor Crest" on Justia Law