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

A pharmaceutical company participated in a federal program that required it to report the average price it received for drugs sold to wholesalers, which in turn affected the rebates it owed the government under Medicaid. From 2005 to 2017, the company sold drugs to wholesalers at an initial price, but if it raised the price before the wholesaler resold the drugs to pharmacies, it required the wholesaler to pay the difference. The company reported only the initial price as the average manufacturer price (AMP), excluding the subsequent price increases, which resulted in lower reported AMPs and thus lower rebate payments to the government. The company justified this exclusion by categorizing the price increases as part of a bona fide service fee to wholesalers, even though the increased value was ultimately paid by pharmacies.The United States District Court for the Northern District of Illinois reviewed the case after a qui tam action was filed by a relator, who alleged that the company’s AMP calculations were false and violated the False Claims Act (FCA). The district court granted summary judgment to the relator on the issue of falsity, finding the AMP calculations and related certifications were factually and legally false. The issues of scienter (knowledge) and materiality were tried before a jury, which found in favor of the relator and awarded substantial damages. The company appealed, challenging the findings on falsity, scienter, and materiality, while the relator cross-appealed on the calculation of the number of FCA violations.The United States Court of Appeals for the Seventh Circuit affirmed the district court’s judgment. The court held that the company’s exclusion of price increase values from AMP was unreasonable and contradicted the plain language and purpose of the relevant statutes, regulations, and agreements. The court also held that the jury reasonably found the company acted knowingly and that the false AMPs were material to the government’s payment decisions. The court rejected the cross-appeal on damages, finding the issue was not properly preserved for appeal. View "Streck v Eli Lilly and Company" 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

Tyree M. Neal, Jr. was indicted for conspiracy to distribute cocaine under federal law. After evading arrest in a high-speed chase and carjacking, he was eventually apprehended. The government sought a sentencing enhancement based on Neal’s prior Illinois conviction for unlawful delivery of cocaine, which, if applied, increased his statutory maximum sentence from 20 to 30 years. Neal pleaded guilty, represented by several attorneys during plea negotiations and sentencing. At sentencing, the district court found the enhancement applicable and imposed the 30-year maximum. Neal appealed, arguing his guilty plea was involuntary and lacked a factual basis, but did not challenge the enhancement. The United States Court of Appeals for the Seventh Circuit affirmed his conviction.Subsequently, Neal filed a motion under 28 U.S.C. §2255 in the United States District Court for the Southern District of Illinois, claiming ineffective assistance of counsel. He argued that his appellate, sentencing, and plea counsel were deficient for failing to raise the argument that his Illinois cocaine conviction could not support the federal enhancement, an argument that later succeeded in United States v. Ruth. The district court denied relief, finding that counsel were not deficient for failing to anticipate a change in law, and held an evidentiary hearing regarding appellate counsel’s performance. The court concluded appellate counsel was not ineffective, as the unraised argument was not “obvious nor clearly stronger” than those presented.On appeal, the United States Court of Appeals for the Seventh Circuit affirmed the district court’s judgment. The court held that, although later precedent established the categorical approach to such enhancements, counsel’s failure to raise the argument did not constitute ineffective assistance under Strickland v. Washington. The court found that none of Neal’s attorneys performed below an objective standard of reasonableness given the law at the time, and thus denied collateral relief. View "Neal v USA" on Justia Law

A former sales representative for a pharmaceutical company alleged that the company engaged in an aggressive campaign to market one of its drugs, Vraylar, for uses not approved by the Food and Drug Administration (FDA), specifically for substance abuse and major depressive disorder (MDD). The representative, who was responsible for promoting the drug to medical providers, claimed that the company trained its sales force to encourage off-label prescriptions and incentivized providers to prescribe Vraylar for these unapproved uses. He further asserted that he faced adverse employment actions, such as loss of promotion and increased workload, after raising concerns internally about the legality and compliance of these marketing practices.After the representative filed a qui tam action under the False Claims Act (FCA) in the United States District Court for the Northern District of Indiana, the government declined to intervene. The plaintiff then amended his complaint, dropping his direct fraud claim and proceeding solely on a theory of retaliation under 31 U.S.C. §3730(h). The district court dismissed the complaint with prejudice, finding that the plaintiff’s internal complaints to the company focused on regulatory noncompliance rather than fraud against the government, and thus did not put the employer on notice of protected activity under the FCA.The United States Court of Appeals for the Seventh Circuit reviewed the case de novo. The court held that, to state a claim for FCA retaliation, an employee must plausibly allege that the employer was on notice that the employee was attempting to prevent fraud against the government, not merely regulatory violations. Because the plaintiff’s communications only referenced regulatory and policy concerns, and did not suggest government fraud, the court found the notice requirement unmet. The Seventh Circuit affirmed the district court’s dismissal and found no abuse of discretion in denying leave to amend. View "Lewis v AbbVie Inc." on Justia Law

The case concerns a defendant who was arrested at a gas station mini-mart after officers, investigating an earlier robbery, observed him enter a single-occupancy restroom marked “Out of Order.” The defendant did not lock the door. Officers entered the restroom shortly after and found him standing on the handicap bars, reaching into the ceiling. A firearm was recovered from the ceiling area, and a subsequent search of the defendant revealed cash and various controlled substances. The government conceded that the officers lacked probable cause or reasonable suspicion to believe the defendant had committed a crime at the time they entered the restroom.The United States District Court for the Northern District of Illinois, Eastern Division, denied the defendant’s motion to suppress the evidence, finding he lacked a reasonable expectation of privacy in the out-of-order restroom. The court also found sufficient evidence to convict him of unlawful possession of a firearm by a felon and possession with intent to distribute a controlled substance following a bench trial. The defendant appealed, challenging the denial of the suppression motion, the sufficiency of the evidence for the firearm conviction, and sought to preserve a constitutional challenge to 18 U.S.C. § 922(g).The United States Court of Appeals for the Seventh Circuit affirmed the district court’s decision. The appellate court held that the defendant did not have a subjective or objectively reasonable expectation of privacy in the unlocked, out-of-order restroom, so the officers’ entry did not constitute a search under the Fourth Amendment. The court also found that sufficient evidence supported the conviction for unlawful possession of a firearm by a felon, based on constructive possession. Finally, the court held that the defendant waived his constitutional challenge to § 922(g) by failing to present any legal argument on appeal. View "United States v. Scott" on Justia Law

Miguel Salinas-Salcedo pled guilty to conspiracy to commit money laundering, admitting that over a two-and-a-half-year period he helped Mexican drug cartels launder nearly $3 million through 24 transactions. His role was to connect cartel members with individuals in the United States who could deposit and transfer large sums of cash into bank accounts without attracting government attention. Salinas-Salcedo acted as the intermediary, relaying instructions, authenticating transactions, and confirming deposits, ultimately earning over $44,000 in commissions. Unbeknownst to him, some of his contacts were undercover law enforcement agents.The United States District Court for the Northern District of Illinois, Eastern Division, sentenced Salinas-Salcedo after applying a four-level enhancement under U.S.S.G. §2S1.1(b)(2)(C) for being “in the business of laundering funds.” Salinas-Salcedo argued that he was merely a “middleman” and not in the business of laundering funds as contemplated by the guidelines. The district court rejected this argument, finding his participation integral to the conspiracy and imposing a below-guidelines sentence of 96 months.On appeal, the United States Court of Appeals for the Seventh Circuit reviewed the district court’s interpretation of the Sentencing Guidelines de novo, as the facts were undisputed. The appellate court held that Salinas-Salcedo’s conduct fell squarely within the scope of the “business of laundering funds” enhancement, as defined by the guidelines and relevant statutes. The court found that his regular, multi-year involvement, substantial earnings, and discussions with undercover agents satisfied the enhancement’s factors. The Seventh Circuit also rejected Salinas-Salcedo’s claim of procedural error, concluding that the district court adequately addressed his objections. The judgment was affirmed. View "United States v. Salinas-Salcedo" on Justia Law

Christopher Hill was charged with possession with intent to distribute methamphetamine after law enforcement, acting on information from a confidential informant, arranged a controlled purchase and arrested him en route to the meeting location. During the arrest, officers recovered approximately 100 grams of methamphetamine, a handgun, other drugs, and cash. Hill claimed the drugs were for personal use. He was indicted four days later and the case proceeded to a jury trial.During jury selection in the United States District Court for the Southern District of Indiana, two prospective jurors with family ties to law enforcement were questioned. Juror 53, who had been married to a sheriff’s officer and knew an officer involved in the case, expressed concerns about impartiality and was excused for cause. Juror 55, whose sons were in law enforcement, initially expressed concern about her ability to be impartial but ultimately stated she could judge the case based on the evidence and give equal weight to all testimony. The district court denied the motion to strike Juror 55 for cause, and she served on the jury. The jury found Hill guilty, and he was sentenced to 188 months in prison.On appeal, the United States Court of Appeals for the Seventh Circuit reviewed whether Hill’s right to an impartial jury was violated by the district court’s decision to seat Juror 55. Applying an abuse of discretion standard, the appellate court held that the district court did not err in crediting Juror 55’s assurances of impartiality, distinguishing her responses from those of Juror 53. The Seventh Circuit concluded that the trial judge acted within her discretion and affirmed Hill’s conviction. View "United States v. Hill" on Justia Law

A professional musician employed by the Indianapolis Symphony Orchestra was placed on furlough in March 2020 due to the COVID-19 pandemic. In December 2020, she developed severe symptoms, including dizziness and tinnitus, after contracting COVID-19, which rendered her unable to perform. She was rehired by the orchestra in September 2021 but soon went on sick leave because her symptoms persisted. In February 2022, she applied for long-term disability benefits under her employer’s group policy, stating that her last day of work was in March 2020 and that her disability began in December 2020.The insurance company denied her claim, reasoning that she was not an “active, full-time employee” at the time her disability began, as required by the policy. The claimant appealed internally, submitting new information that she had returned to work in September 2021 but was again unable to perform due to her illness. The insurer treated this as a fundamentally different claim, maintaining its denial and advising her to file a new application based on the later date.She then filed suit under the Employee Retirement Income Security Act (ERISA) in the United States District Court for the Southern District of Indiana. Both parties moved for summary judgment, and the district court granted summary judgment in favor of the insurer, finding that she was not eligible for benefits based on her initial application and that her new information constituted a separate claim for a different loss.On appeal, the United States Court of Appeals for the Seventh Circuit reviewed the case de novo and affirmed the district court’s judgment. The court held that the claimant was not eligible for benefits for a disability beginning in December 2020, and that her subsequent information regarding a September 2021 onset constituted a new claim, requiring exhaustion of administrative remedies before judicial review. View "Moratz v. Reliance Standard Life Insurance Co." on Justia Law

Three Illinois residents who hold concealed carry licenses challenged a provision of the Illinois Firearm Concealed Carry Act that prohibits carrying loaded and accessible firearms on public transportation, such as buses and trains, with exceptions for unloaded and properly stored firearms. The plaintiffs argued that this restriction violated their Second Amendment rights, as they wished to carry firearms for self-defense while using public transit but refrained from doing so due to the law’s threat of arrest and prosecution.The case was first heard in the United States District Court for the Northern District of Illinois, Western Division. The district court found that the plaintiffs had standing, as they faced a credible threat of prosecution under the challenged statute. On the merits, the district court applied the Supreme Court’s test from New York State Rifle & Pistol Ass’n, Inc. v. Bruen and concluded that the public transit firearm restriction was not sufficiently supported by the nation’s historical tradition of firearm regulation. The court granted summary judgment for the plaintiffs, declaring the restriction unconstitutional as applied to them.On appeal, the United States Court of Appeals for the Seventh Circuit reviewed the district court’s decision de novo. The Seventh Circuit held that Illinois’s restriction on carrying loaded and accessible firearms on public transportation is consistent with the Second Amendment, as it fits within a longstanding tradition of regulating firearms in sensitive and crowded, confined places. The court found that such regulations are analogous to historical restrictions in places like schools, legislative assemblies, and other crowded venues, and that the temporary disarmament required by the law is justified by public safety concerns unique to public transit. The Seventh Circuit reversed the district court’s judgment and remanded the case for further proceedings. View "Schoenthal v. O'Neill Burke" on Justia Law

A special education teacher with a long and distinguished career in an Illinois public school district was involuntarily transferred from one elementary school to another at age 52. After the transfer, she alleged that she was subjected to a hostile work environment at her new school. She claimed that she was assigned a disproportionate number of challenging students, unfairly criticized, denied adequate classroom support, and intimidated by an administrator. She believed these actions were motivated by her age, although she acknowledged that no one made any explicit age-related remarks.After she filed a complaint under the Age Discrimination in Employment Act (ADEA), the United States District Court for the Central District of Illinois granted summary judgment in favor of the school district. The district court found that she had not produced evidence from which a reasonable juror could conclude that the alleged harassment was either objectively hostile or based on her age.On appeal, the United States Court of Appeals for the Seventh Circuit reviewed the grant of summary judgment de novo. The appellate court assumed, without definitively deciding, that hostile work environment claims are cognizable under the ADEA. However, it held that the teacher failed to present sufficient evidence that any of the conduct she experienced was motivated by age-based animus. The court found her assertions to be speculative and unsupported by direct or circumstantial evidence. As a result, the Seventh Circuit affirmed the district court’s judgment, holding that there was no reasonable basis to infer age-based workplace harassment under the ADEA. View "Blumenshine v. Bloomington School District No. 87" on Justia Law