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

Roe invented a nozzle that transforms gas into liquid. Roe assigned the nozzle to Nano Gas, in exchange for 20% equity in Nano and a board seat. The relationship floundered. Roe left Nano, taking a prototype machine and some of Nano’s intellectual property produced by Hardin, another employee, and continued to develop the technology.An arbitrator determined that Roe should compensate Nano ($1,500,000) but that Roe deserved compensation for his work ($1,000,000) in the form of an offset against Nano's award. The arbitrator noted that Roe remained a Nano shareholder and could benefit financially in the future, then ordered Roe to return the Hardin work-papers to Nano, or, if unable to do that, to pay Nano $150,000. Nano sought to enforce the award and obtained judgment for $650,000. Nano filed a turnover motion seeking Roe’s Nano stock, valued at approximately $117,000. Roe argued that the award explicitly stated he could pay the remaining amount “in such manner as Roe chooses,” and provided he would remain a shareholder.The district court reasoned that Roe could choose how to pay the $500,000 award, but ordered Roe to turn over the stock or identify other assets to satisfy the $150,000 award. The Seventh Circuit reversed regarding Roe’s discretion to satisfy the $500,000 award and affirmed the $150,000 award for the Hardin papers. The award is devoid of any language indicating Roe shall remain a shareholder indefinitely or that Roe has complete discretion to decide if, when, and how Roe pays the award. View "Nano Gas Technologies, Inc. v. Roe" on Justia Law

Smith was a passenger in Naylor’s car. Chicago police officers pulled them over for running a red light. Smith was “shaking.” Officer Holden asked Smith to step outside. Smith complied but immediately rested the front of his pelvis against the car. Holden asked Smith to step back, then performed an initial pat-down focused on Smith’s waistband, pockets, and lower leg. Holden did not find any contraband but placed Smith in handcuffs. Holden asked Smith to walk several steps. Smith “had that side-to-side walk, as if he was holding something in his crotch area.” Smith then rested his pelvis against the front of the police car. Holden performed the second pat-down by jiggling Smith’s pant legs. Nothing fell out. Holden then asked Smith to walk again and observed an exaggerated limp. About one minute later, Holden conducted the final pat-down, focusing on Smith’s groin area, and removed a loaded handgun from Smith’s underwear. Approximately 11 minutes elapsed between the initiation of the stop and the discovery of the gun.Smith was charged as a felon in possession of a firearm. The district court granted Smith’s motion to suppress certain statements but denied his motion to suppress the gun. The Seventh Circuit affirmed. Under the totality of the circumstances—a nighttime traffic stop of an individual who appeared very nervous, walked strangely, and repeatedly rested his pelvis against cars as if to prop something up— reasonable suspicion supported the final pat-down. View "United States v. Smith" on Justia Law

Outstanding debt for Chicago traffic tickets surpassed $1.8 billion last year. Under a 2016 Chicago ordinance, when a driver incurs the needed number of outstanding tickets and final liability determinations, Chicago is authorized to impound her vehicle and to attach a possessory lien. Many drivers cannot afford to pay their outstanding tickets and fees, let alone the liens imposed on their cars through this process. Mance incurred several unpaid parking tickets; her car was impounded and subject to a possessory lien of $12,245, more than four times her car’s value. With a monthly income of $197 in food stamps, Mance filed for Chapter 7 bankruptcy and sought to avoid the lien under 11 U.S.C 522(f). When a vehicle owner files for Chapter 7 bankruptcy, she can avoid a lien under 522(f) if the lien qualifies as judicial and its value exceeds the value of her exempt property (the car). If the lien is statutory, it is not avoidable under the same provision.The bankruptcy and district courts and the Seventh Circuit concluded that the lien was judicial and avoidable. The lien was tied inextricably to the prior adjudications of Mance’s parking and other infractions, so it did not arise solely by statute, as the Bankruptcy Code requires for a statutory lien. View "City of Chicago v. Mance" on Justia Law

The FBI conducted extensive surveillance, made more than 10 controlled purchases of heroin from Lottie, and secured court orders authorizing the interception of Lottie’s cellphone communications. Agents learned that Lottie agreed to a large heroin purchase. The supplier, who had recently suffered a leg injury, planned to arrive at a Rockford location to complete the transaction. To prepare for the deal, Lottie went to houses where he stashed drugs and money before returning to his residence. Shortly after, a white Corolla pulled into his driveway for 10-15 minutes before leaving. Law-enforcement officers followed the car and pulled it over after observing two traffic violations. Ochoa-Lopez was the driver; the suspected supplier was the passenger. One officer noticed that the passenger had a leg injury that required the use of an assistive device. Ochoa-Lopez claimed the two men were transporting the car for a company. Agents searched the vehicle and discovered a backpack containing $47,000 in cash.The Seventh Circuit affirmed the denial of a motion to suppress the evidence recovered during the warrantless search of the car. The agents had probable cause to search the car; based on the totality of the circumstances, there was a “fair probability that contraband or evidence of a crime” would be found there. View "United States v. Ochoa-Lopez" on Justia Law

In 2015-2019, Wood defrauded homeowners facing foreclosure, convincing them to "refinance" and make their mortgage payments to him. Wood convinced some clients to stall foreclosures by manipulating the bankruptcy process. A Wisconsin bankruptcy judge enjoined Wood from continuing his scheme. Wood disregarded that order, defrauding 73 victims of almost $400,000. Many were evicted from their homes. Wood was charged with six counts of wire fraud, 18 U.S.C. 1343; one count of mail fraud, section 1341; one count of bankruptcy fraud, section 157; and criminal contempt of court, section 401(3). Wood violated his pretrial supervision by contacting his victims and soliciting money for mortgage services. Wood pled guilty to wire fraud and bankruptcy fraud; his PSR recommended a sentence of 72 months, based on a Guidelines range of 70-87 months. The court expressed skepticism about Wood’s allocution, citing Wood’s previous fraudulent crimes, his “heartlessness,” and the profound, non-monetary harm to his victims and legitimate creditors. Concluding that the Guidelines inadequately accounted for Wood’s behavior, the court observed Wood’s “crime stands apart" and that the closest comparator was a fraudulent scheme in another case (Iriri). The court observed that Iriri was induced to commit fraud, whereas Wood committed his crime completely unprompted.The Seventh Circuit affirmed Woods' 144-month sentence. Wood’s sentence turned on the unique characteristics and qualities of his crime. That is not an abuse of discretion. The court’s reference to Iriri “is so limited as to flirt with irrelevance.” View "United States v. Wood" on Justia Law

Indiana University hired Palmer, who is Black, as a lecturer in Business Marketing in 2010. In 2013, Palmer inquired about his potential for early promotion to senior lecturer. His Department Chair said that it was rare for lecturers to apply for senior lecturer prior to their sixth year and suggested that Palmer wait. Palmer did not apply for early promotion. In 2016, IU promoted Palmer to senior lecturer. Palmer also served as Diversity Coach in the MBA program, for an additional $25,000 per year and a reduced course load; he resigned as Diversity Coach after the 2016–2017 school year. . In 2016, the Marketing Department hired Gildea, who is white, as a new lecturer and as Director of the Business Marketing Academy (BMA). Palmer complained that Gildea’s base salary nearly matched Palmer’s base salary. Palmer earned $98,750; Gildea earned $94,000, with no other lecturer or senior lecturer in their department earning over $90,000. Palmer also complained of discrimination.Palmer filed an EEOC charge, alleging race discrimination in violation of Title VII, 42 U.S.C. 2000e-2(a)(1), and subsequently filed suit. Palmer’s failure-to-promote claim is time-barred. His unequal pay claim fails on the merits. Palmer enjoyed higher pay than all of his colleagues, except Gildea, who is not a proper comparator. View "Palmer v. Indiana University" on Justia Law

Qin (from China) is among 165 foreign limited partners who collectively invested $82.5 million into the Colorado Regional Center Project Solaris LLLP (CRCPS), whose general partner is CRC-I (an LLC). The parent company of CRC-I is Waveland, which has a member (Deslongchamps) and a Milwaukee office. CRCPS was part of an approved U.S. EB-5 immigrant visa program through which Qin and others obtained permanent-resident visas as a result of their investment in a commercial enterprise in the United States. CRC-I invested CRCPS’s funds in a condominium project. The investment was a failure, allegedly due to CRC-I’s malfeasance. Qin, on behalf of a class of investors, wants to sue CRC-I in the Eastern District of Wisconsin. He filed a petition under Federal Rule of Civil Procedure 27, seeking leave to depose Deslongchamps, in order to identify CRC-1’s members.The district court denied the petition, reasoning that Qin’s request is not one to perpetuate testimony that is at risk of being lost. The Seventh Circuit affirmed. While Qin faces an obstacle to pursuing federal court relief, and the dilemma posed by the non-corporate association whose members (and their citizenship) the plaintiff cannot ascertain despite reasonable investigatory efforts has been noted and discussed elsewhere, the court concluded that addressing that issue would require an advisory opinion. View "Qin v. Deslongchamps" on Justia Law

Perez began work at Staples in 2011 and became a sales representative in 2015. Perez’s performance issues began five months later. His supervisor, Coha placed Perez on a “weekly activity plan.” Six months later Perez was still not meeting the company’s objectives, so Coha placed him on another plan. The two met weekly to discuss Perez’s work. In 2016, Staples divided its sales representatives into account managers, who targeted repeat local business and account developers, who targeted larger, multiple-location accounts with higher dollar amounts. Perez was classified as an account manager. Coha reassigned some of Perez’s accounts. Perez’s job performance continued to falter; he was placed on another plan. While Perez was on the plan, he served jury duty and voiced his discomfort with his company’s sale of a detergent banned in another state. In June 2016, Staples terminated Perez’s employment.Perez sued, alleging violations of the Illinois Jury Act and the Illinois Whistleblower Act, and common-law retaliatory discharge. The Seventh Circuit affirmed summary judgment in favor of Staples. Perez was terminated not in retaliation for protected activities but because of his poor sales production. Staples documented his poor performance before the detergent issue arose; no reasonable jury could conclude that Staples fired Perez because of his jury service. View "Perez v. Staples Contract & Commercial, LLC" on Justia Law

In 2012, Patlan pled guilty to conspiracy to distribute controlled substances. He began supervised release in April 2017. Because of violations, in January 2019, the court added six months of home confinement. After additional violations district court revoked his supervision and sentenced him to 18 months’ imprisonment plus three years of supervised release, including six months of home confinement. Patlan began his second period of supervised release in September 2020. In December 2020, he tested positive for drugs; in January he committed domestic battery. The Probation Office classified the drug possession as a Grade B violation, calculating his guidelines range as 18-24 months of imprisonment. Following Patlan’s concession of guilt, the court entertained Patlan’s “policy objection,” then sentenced Patlan to 18 months’ imprisonment (including 61 days of home confinement remaining when his supervision was revoked), plus 24 months of supervised release.The Seventh Circuit affirmed, rejecting arguments that the district court erred when it failed to recognize that it had the discretion to reject the inference that he possessed controlled substances from a positive drug test and to treat a failed drug screening as a Grade C violation, failed to provide justifications for the six‐month term of home confinement, and failed to pronounce that condition orally during the hearing. View "United States v. Patlan" on Justia Law

ECE's movie theaters lost money after North Carolina's Governor imposed statewide closures in response to COVID-19. ECE’s insurance policy with HCC provides: We will pay the actual loss of Business Income you sustain due to the necessary “suspension” of your “operations” during the “period of restoration.” The “suspension” must be caused by direct physical loss of or damage to property at premises that are described in the Declarations and for which a Business Income Limit of Insurance is shown in the Declarations. The loss or damages must be caused by or result from a Covered Cause of Loss. A “Civil Authority” provision covers “the actual loss of Business Income you sustain and necessary Extra Expense caused by action of civil authority that prohibits access to the described premises due to direct physical loss of or damage to property, other than at the described premises, caused by or resulting from any Covered Cause of Loss.”After HCC denied ECE’s claim, the district court dismissed ECE’s suit. ECE argued that the policy covered losses due to COVID-related closures because the virus rendered ECE’s property unsafe. The Seventh Circuit affirmed the dismissal. ECE alleged neither a physical alteration to property nor an accessor use-deprivation so substantial as to constitute physical dispossession. View "East Coast Entertainment of Durham, LLC v. Houston Casualty Co." on Justia Law