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

Atkinson filed suits against Kenray. Kenray filed a separate action against Hoosier, seeking insurance coverage for Atkinson’s claims. Atkinson and Kenray settled their suits. Kenray agreed to entry of judgments in favor of Atkinson. Atkinson agreed not to execute the judgments if Kenray pursued the coverage action against Hoosier. Kenray assigned claims against its insurance agent to Atkinson. State courts entered judgment in favor of Hoosier. Meanwhile, Atkinson sued Kenray’s insurance agent asserting errors and omissions claims. The agent obtained summary judgment. Atkinson returned to the district court that presided over the original suits to set aside the settlement covenant. Atkinson claimed fraudulent inducement: that it entered the agreement based upon Kenray’s representations that its agent had confirmed that Kenray had insurance coverage for Atkinson’s claims. The court held that, because the covenant contained an unambiguous integration clause, parol evidence could not be considered, but that if Atkinson could prove fraud in the inducement specific to the integration clause, it might prevail. Atkinson conceded that it could not establish fraudulent inducement as to the integration clause itself. The court declined to set aside the agreement. The Seventh Circuit reversed, holding that Indiana law does not impose the bright-line rule applied by the trial court. View "Judson Atkinson Candies, Inc. v. Kenray Assocs., Inc." on Justia Law

A former Illinois state prison inmate filed suit under 42 U.S.C. 1983 in 2001, alleging that he was subjected to improper strip searches intended to humiliate him in retaliation for his grievances complaining about the earlier searches. Following a remand, a jury returned a verdict in favor of the defendants. The Seventh Circuit reversed and remanded. The trial judge put the burden of proof on the wrong party by instructing the jury that “to prevail on his claim of retaliation, the plaintiff must prove that the grievances … were the sole cause of the particular strip search.” View "Mays v. Springborn" on Justia Law

The federal government sought forfeiture of cash seized in searches of an apartment, vehicles, and storage units, possessed or occupied by Unsworth and Pillsbury, who were suspected of drug trafficking. The state court prosecution of the two collapsed after the court suppressed evidence. Unsworth and Pillsbury submitted, as permitted by Rule G(5)(a)(i), claims to the cash, signed under penalty of perjury, identifying the specific property and the claimant’s interest in the property. They moved to stay the forfeiture proceeding on the ground that it would undermine their right not to incriminate themselves in the pending state proceeding (18 U.S.C. 981(g)(2)). The district court denied the motion without explanation and required the claimants to respond to special interrogatories. They objected and refused to answer several, including one that asked for the sources of the cash and whether the cash was proceeds of sales of illegal drugs. The district judge struck their claims on the ground that, by failing to answer all the interrogatories, the claimants had failed to “establish” Article III jurisdiction. The Seventh Circuit reversed and remanded, holding that, at this stage, Article III jurisdiction need only be alleged, not proven, and that the government had given no reason for opposing a stay. View "United States v. Funds in the amount of $574,840" on Justia Law

Natale,a vascular surgeon, was compensated by Medicare for repairing a patient’s aortic aneurysm. Another doctor reviewed the post-surgical CT scan, which did not match the procedure Natale described in his operative reports. After an investigation, Natale was indicted for health care fraud related to his Medicare billing, mail fraud, and false statements related to health care. A jury acquitted Natale on the fraud counts but convicted him of making false statements, 18 U.S.C. 1035. The trial court used jury instructions that seemingly permitted conviction for false statements completely unrelated to Medicare reimbursement. The Seventh Circuit affirmed, finding the error harmless, but clarified that under the statute, even conviction for false statements made in connection with items or services still must relate to a “matter involving a health care benefit program.” View "United States v. Natale" on Justia Law

Indiana police recovered $ 574,840, cash in a search of the home of Johnson, a suspected drug dealer, and turned the money over to the federal government. The Justice Department filed forfeiture proceedings under 18 U.S.C. 983(a)), claiming that the cash was proceeds of illegal drug activity, 21 U.S.C. 881(a)(6). The state constitution requires that criminal fines and all forfeitures be paid to the Common School Fund, rather than law enforcement. By allowing the federal government to conduct civil forfeiture, local law enforcement can attempt to receive a share of the forfeited proceeds and avoid payment to the Fund. Johnson filed a claim of ownership, which the district judge dismissed as noncompliant with Rule G(5)(a)(i). The Rule requires that the claim be signed under penalty of perjury, served on the government, and “identify the specific property claimed ... and state the claimant’s interest in the property,” but the judge held that the claimant must state “how he obtained possession of the currency … the date of receipt, the place of the receipt, and a description of the transaction which generated the currency.” The Seventh Circuit reversed and remanded, reasoning that the claim may be frivolous, but met the requirements of the Rule. View "United States v. Johnson" on Justia Law

Johnson filed an employment discrimination claim against Chicago public schools. The district court granted her motion to proceed in forma pauperis and set a date for a status hearing, warning Johnson that failure to appear could result in immediate dismissal. Johnson did not appear; the judge dismissed her suit. Johnson immediately moved to reinstate, claiming that she had not been notified of the hearing. The judge denied the motion, noting that Johnson had agreed to receive electronic notice of orders and decisions. The court had provided electronic notice of the dismissal, an order Johnson admittedly received. The Seventh Circuit reversed, reasoning that the trial judge had not explained why a single missed conference produced immediate dismissal; “the punishment must fit the crime.” View "Johnson v. Chicago Bd. of Educ." on Justia Law

Munoz pled guilty to distributing and possessing cocaine with intent to distribute, but fled to Mexico before sentencing. After five years he was found and extradited. The district court sentenced him to 181 months, which was below the advisory sentencing guideline range. The Seventh Circuit affirmed rejecting arguments that the prosecution breached the plea agreement by advocating a higher base offense level than agreed-to in the plea agreement and recommending a sentence in the middle of the guidelines range rather than at the bottom. The court stated that Munoz materially breached an implied term of the plea agreement, so that the prosecution could treat the plea agreement as rescinded. View "United States v. Munoz" on Justia Law

Control of most of the U.S. electrical grid is divided among Regional Transmission Organizations, voluntary associations of utilities that own interconnected transmission lines. Power plants and other electrical companies involved with the regional grid can also be RTO members. An RTO sought approval from the Federal Energy Regulatory Commission (FERC) to impose a tariff on its members to pay for construction of new high-voltage power lines that will primarily transmit electricity generated by remote wind farms. Every state in the region, except Kentucky, encourages or mandates that utilities obtain a percentage of their electricity supply from renewable sources. The cost of the project is to be shared by utilities drawing power from the grid according to each utility’s share of the region’s total wholesale consumption of electricity. The RTO previously allocated the cost of expanding or upgrading the grid to utilities nearest a proposed transmission line, on the theory that they would get the most benefit. FERC approved the rate design and pilot projects. The RTO negotiated a rate with another RTO to share the costs of some upgrades with mutual benefits. Members of the RTO challenged the approval and the agreement and some announced their departure from the RTO. The Seventh Circuit affirmed the orders, but dismissed as premature the claims of departing members concerning their liability and remanded with respect to export pricing in connection with the agreement. View "Am. Mun. Power, Inc. v. Fed. Energy Regulatory Comm'n" on Justia Law

Prince was the general contractor for construction of an apartment building. Rybaltowski was an employee of a waterproofing company. His boss took Rybaltowski to the project site to perform an unpaid demonstration of the proposed caulking of windows. While Rybaltowski was at the site, a beam supporting masonry equipment fell on him. Less than an hour after the accident, Prince signed a subcontract with the waterproofing company. The insurance policy at issue was a Commercial General Liability Insurance policy with an exclusion from coverage for bodily injury to any contractor arising out of or in the course of the rendering or performing services of any kind or nature whatsoever by such contractor. “Contractor” was defined to include employees of subcontractors. The district court entered judgment in favor of the insurer, finding it had no duty to defend. The Seventh Circuit reversed and remanded, reasoning that the policy can be interpreted so that services are not provided until the contractor begins compensated work on the project. View "Atl. Cas. Ins. Co. v. Prince Contractors, Inc." on Justia Law

The defendant’s sentence, under the heading “additional imprisonment terms,” states that the “defendant is to be turned over to the proper immigration authorities for deportation proceedings upon completion of term of incarceration. If deported, defendant is to remain outside the United States and is not to return without the written consent of the Secretary of the U.S. Department of Homeland Security.” The Seventh Circuit struck the provision as unauthorized. Only an immigration judge may order removal, 8 U.S.C. 1229a(a)(3), unless the prosecutor and immigration officials request that the district judge hold a removal hearing, a request not made in this case. A district judge may order, as a condition of supervised release, that a defendant be turned over to immigration officials, but if there is no order of supervised release, as here, imposition of such a condition is ultra vires. The court noted that there is no need for the “added measure” in this case, because the defendant is an aggravated felon. An aggravated felon who is an alien is removable upon the completion of his prison sentence, removal proceedings must be begun before the end of his prison term, and he must be detained until completion, 8 U.S.C. 1226(c)(1)(B), 1228(a)(1)-(2), (3)(A). View "United States v. Zamudio" on Justia Law