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

Bass worked as a custodian. In 2002, she was assigned to work at a single-story elementary school. In 2003 a second story was added. A male was responsible for cleaning the second floor. In 2008–09, the District commissioned a study of custodial duties at 11 schools, which revealed that second floor took tasks more time than one shift permitted, while the first floor could be finished in less than one shift. While Bass was on leave, the District had the substitute custodian try a new arrangement. She was able to finish during her shift. The District reassigned second‐floor restrooms to Bass. The study also resulted in seven male custodians being assigned additional duties. Bass then had two suspensions without pay. She did not contest the suspensions; she had failed to complete her duties. Her work improved significantly. Before 2010, Bass had taken two leaves that exceeded the leave to which she was entitled under the collective bargaining agreement. Bass injured her back in August 2010 and again took leave. The District told Bass that she would have no more available leave as of November 3, and would be fired if she failed to return to work. Bass returned to work on November 4. She injured her back again 12 days later and was out for 2.5 days. The District issued a reprimand. On January 3, Bass again did not report to work. She provided a doctor’s note, but exceeded available leave time. When asked when she would be able to return without restrictions, Bass did not reply. She was fired on February 2, for job abandonment. Three male custodians lost their jobs between 2008 and 2011 on the same ground. The EEOC issued a Notice of Right to Sue on her sex discrimination claims. The district court dismissed her sit under Title VII of the Civil Rights Act, 42 U.S.C. 2000e. The Seventh Circuit affirmed. View "Bass v. Joliet Pub. Sch. Dist." on Justia Law

Morales operated IPS to defraud small businesses. His sales agents contacted business owners and offered to collect on bad checks for a small commission. The agents would tell the owners that they worked for another business, not IPS, and asked them for personal information and a voided check, ostensibly for wiring funds. With that data, IPS made unauthorized withdrawals from bank accounts through financial intermediaries, stating that the withdrawals covered payments for credit card processing equipment. IPS neither collected bad checks nor leased credit‐card processing equipment. IPS fraudulently withdrew $645,000. In 2004, a team led by Secret Service Agent Kane executed a search warrant on IPS’s office and found extensive evidence. Morales was indicted for mail fraud, 18 U.S.C. 1341. At trial, the government presented witnesses including 10 victims, forensic analysts, the IPS receptionist, and Agent Kane. Convicted, Morales was sentenced to nine years in prison. Three weeks after the trial, an assistant U.S. attorney sent Morales’s lawyer two emails from Agent Kane to government attorneys that had not previously been disclosed. One attached a screenshot from the laptop as it appeared when discovered in Morales’s office; the other responded concerning picking up a grand jury subpoena for Paulina Morales. The email included a threat to "taze" Morales’s pet, although that never happened. The court denied a motion for a new trial. The Seventh Circuit affirmed, finding any Brady violation harmless because evidence implicating Morales was overwhelming. View "United States v. Morales" on Justia Law

In 2006 Finkl, a Chicago steel producer, initiated termination of its defined benefit pension plan under the Employment Retirement Income Security Act, apparently anticipating merger with another company. The Plan was amended in 2008, to include Section 11.6, a special provision for distributions in connection with the contemplated termination, to apply if a participant “ha[d] not begun to receive a benefit under the Plan at the time benefits are to be distributed on account of termination of the Plan.” In May 2008, Finkl decided not to terminate the Plan. Section 11.6 was deleted. Finkl notified the IRS that the Plan was not going to terminate. Seven Finkl employees sued, alleging that they were entitled to an immediate distribution of benefits while they were still working for Finkl and that repeal of Section 11.6 violated the anti-cutback terms of the Plan, I.R.C. 411(d)(6), and ERISA, 29 U.S.C. 1054(g). The IRS sent Finkl a favorable determination letter that the Plan had retained its tax qualified status. In 2011, the Seventh Circuit affirmed the district court’s award of summary judgment to Finkl. The employees then pursued a claim in the Tax Court, which ruled that they were collaterally estopped by the Seventh Circuit decision from challenging the 2009, determination letter, which concluded that the Plan had not been terminated and continued to qualify for favorable tax treatment. The Seventh Circuit affirmed. View "Carter v. Comm'r of Internal Revenue" on Justia Law

Batson went to Live Nation’s Chicago box office and purchased a non‐refundable ticket to see a popular band. He later realized that the ticket price included a $9 parking fee for a spot he did not want. Believing that the bundled $9 fee was unfair, he sued on behalf of himself and a proposed class, citing the Class Action Fairness Act, 28 U.S.C. 1332(d)(1), and claiming that Live Nation had committed an unfair practice in violation of the Illinois Consumer Fraud and Deceptive Business Practices Act. The complaint referred to the 2010 merger between Live Nation and Ticketmaster (which was not blocked by the Department of Justice). The district court dismissed. The Seventh Circuit affirmed, stating that there are times when consumers must accept a package deal in order to get the part of the package they want. The relevant factors ask whether the practice offends public policy; is immoral, unethical, oppressive, or unscrupulous; or causes substantial injury to consumers.View "Batson v. Live Nation, Entm't, Inc." on Justia Law

Walker was involved in a mortgage fraud scheme involving at least 10 loans and seven Chicago-area properties. Walker served as both a fraudulent buyer and seller and used his then‐girlfriend as a straw purchaser in some transactions. The loans went into default and the properties were foreclosed on, causing an estimated $956,300 in loss to the lender. Walker’s attorney entered his appearance just weeks before trial and sought to investigate whether illegally-seized material from an unrelated state case (involving Walker’s arrest for possession of a gun and the ensuing search of his home) may have been the basis of the federal case The government maintained that its evidence came from lenders, title companies, financial institutions and eyewitness testimony, not from the state search. The government informed the district court that a suburban police department held the evidence and had affirmed it had no connection with or knowledge of the federal case. Walker did not attempt to obtain that evidence and was convicted of wire fraud, 18 U.S.C. 1343. The Seventh Circuit affirmed, rejecting arguments that failure to turn over the state case evidence constituted a Brady violation and that the court erred when it refused to give Walker’s proposed buyer‐seller jury instruction and in ordering restitution.View "United States v. Walker" on Justia Law

Through Amusements Inc., owned by Szaflarski, a criminal enterprise distributed “video gambling devices” to bars and restaurants. The machines allow customers to deposit money in return for virtual credits and are legal for amusement only. The enterprise and the establishments, however, permitted customers to redeem credits for cash. The devices were modified to track money coming in and payouts, so that establishment owners and the enterprise could divide the profits. When a rival company encroached on Amusements Inc.’s turf, the enterprise placed a pipe bomb outside the rival’s headquarters. In addition to gambling, the enterprise committed home and jewelry‐store robberies, fenced stolen items through Goldberg Jewelers, owned by Polchan, and dealt in stolen cigarettes and electronics. Sarno was at the top of the enterprise’s hierarchy, followed by Polchan. Volpendesto was a perpetrator of robberies. The three were indicted for conspiracy to violate the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. 1962(d). Sarno and Polchan were indicted for conducting an illegal gambling business, 18 U.S.C. 1955; and Polchan for additional counts, including use of an explosive device, conspiracy to do so, 18 U.S.C. 844(i) and (n), and conspiracy to obstruct justice, 18 U.S.C. 1512(k). Others indicted included Szaflarski and Volpendesto’s father, and two police officers. Most entered pleas. Volpendesto, Polchan, and Sarno were convicted. The Seventh Circuit affirmed, rejecting challenges to the sufficiency of the evidence, jury instructions, evidentiary rulings, and the sentences. View "United States v. Sarno" on Justia Law

In 2003, a joint venture formed between llcs, TABFG and NT Prop, to trade securities. TABFG was responsible for trading and was comprised of three individual traders. NT Prop was to fund the venture, and included two limited liability corporations: NT Financial and Pfeil Commodities. The sole member of Pfeil Commodities was Richard Pfeil, the “money man.” NT Prop was managed by Pfeil’s attorney, and another. NT Prop provided $2 million start-up money and the traders earned profits of $3.4 million. Before forming TABFG, the traders were employees of SIG and were subject to restrictive covenants. The Agreement provided for payment of attorneys’ fees and costs necessary to escape the restriction. The traders sought a declaratory judgment. SIG responded by adding TABFG and NT Prop to the lawsuit, seeking disgorgement of profits. SIG obtained an injunction covering nine months after their departure from SIG, ending the joint venture. The parties failed to agree to a final accounting, but TABFG needed funds for a defense in the SIG lawsuit. Pfeil caused NT Prop to distribute $360,000 to TABFG, $533,023.69 to NT Financial, and $2,742,182.02 to Pfeil Commodities. TABFG sued, alleging that Pfeil, who was not an officer, director or manager of NT Prop, engineered a distribution of the bulk of the joint venture funds to himself and tortiously caused NT Prop to breach its obligations to TABFG under the Agreement. The district court judge agreed and awarded $957,659.68. The Seventh Circuit affirmed. View "TABFG, LLC v. Pfeil" on Justia Law

Houston, age 44, was caught with more than 1,000 pornographic images of children on his computer; he pleaded guilty to possessing and transporting child pornography, 18 U.S.C. 2252A(a)(1), (a)(5)(B). The probation officer calculated a guidelines sentence of 360 months, the statutory maximum for the two counts. At the sentencing hearing, the government presented evidence that on four occasions Houston sexually abused a neighbor when she came over to play with his daughter. In a videotaped police interview the girl, then five years old, described how Houston touched his “private” to her “private,” made her touch his “private,” and then covered her stomach, crotch, and hands in a substance coming out of his “private” that she referred to as “wax.” She described Houston’s home and his appearance. She stated that these events happened when she was three or four years old. The government provided a chat log from his computer in which he asked someone to fulfill his “fantasy” by ejaculating on a picture of an unidentified young girl. A 12-year-old girl said that Houston exposed himself to her and a three-year-old boy reported that someone in Houston’s home licked his penis. The court imposed a sentence of 216 months. He appealed a five-level increase tied to the sexual abuse of a minor, U.S.S.G. 2G2.2(b)(5). The Seventh Circuit affirmed, rejecting Houston’s claim that the five-year-old girl’s statements were unreliable based on conflicting dates about when the girl informed her mother and different reasons for why the parents delayed in reporting the abuse. View "United States v. Houston" on Justia Law

The major political parties in Marion County, Indiana followed a tradition of “slating” candidates that have the financial and organizational backing of party leadership in the primaries. Indiana enacted an “anti-slating” statute, prohibiting distribution of a list endorsing multiple political candidates during a primary election unless all such candidates have given written consent, Ind. Code 3-14-1-2(a). More than 10 years ago, that law was challenged as violating the First Amendment, resulting in a federal injunction against its future enforcement and a consent decree in which all parties stipulated and the court declared that the law was facially unconstitutional. The Marion County Election Board was a defendant, but nonetheless enforced the statute against a candidate running for state representative in the 2012 primary. That candidate sought an injunction. The district court dismissed the case under the “Younger” abstention doctrine, citing a still-ongoing Election Board investigation. The Seventh Circuit reversed. The Election Board’s investigation is too preliminary a proceeding to warrant Younger abstention, at least in light of the Supreme Court’s 2013 decision, Sprint Communications, Inc. v. Jacobs. Even if Younger abstention were theoretically available, the previous final federal judgment against the Election Board would amount to an extraordinary circumstance making Younger abstention inappropriate. View "Mulholland v. Marion Cnty. Election Bd." on Justia Law

Abair emigrated from Russia in 2005 and married an American citizen. Abair owned an apartment in Moscow. After her divorce, Abair sold the apartment and deposited the proceeds with Citibank Moscow. She signed a contract to buy an Indiana home for cash. Citibank refused to transfer funds because her local account was in her married name and the Moscow account used her birth name. Over two weeks Abair withdrew the daily maximum ($6400) from Citibank ATMs and deposited $6400 to $9800 at her local bank. A deposit on Tuesday, May 31 followed the Memorial Day weekend and was posted with one made on Saturday, pushing her “daily” deposit over the $10,000 trigger for reporting, 31 U.S.C. 5313(a). Abair was charged with structuring financial transactions to evade reporting. IRS agents testified that during her unrecorded interview, Abair, who is not fluent in English, revealed knowledge of the reporting rules. Abair testified that she was aware of the limit when she spoke with the agents, but had learned about it after making the deposits, when she asked why identification was required. She said her deposit amounts were based on how much cash would fit in her purse. Abair was convicted and agreed to forfeit the entire proceeds. The Seventh Circuit remanded, finding that the government lacked a good faith basis for believing that Abair lied on tax and financial aid forms and that the court erred (Rule 608(b)) by allowing the prosecutor to ask accusatory, prejudicial questions about them. On the record, Abair is at most a first offender, according to the court, which expressed “serious doubts” that forfeiture of $67,000 comports with the “principle of proportionality” under the Excessive Fines Clause. View "United States v. Abair" on Justia Law