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

Kerry began requiring workers to use fingerprints to clock in and out. Plaintiffs, former employees, say that Kerry did not obtain their consent before doing so in violation of the Illinois Biometric Information Privacy Act.The Seventh Circuit affirmed the dismissal of the suit as preempted by the Labor Management Relations Act, 29 U.S.C. 185 because its resolution depends on the interpretation of collective-bargaining agreements between Kerry and the plaintiffs' union. Federal law prevents states from interfering in relations between unions and private employers. Whether a topic of bargaining is mandatory or permissive, the union is the workers’ agent. If labor and management want to bargain collectively about particular working conditions, they are free to do so. Workers cannot insist that management bypass the union and deal with them directly about these subjects. The use of biometric data is a topic for bargaining between unions and management. States cannot bypass the mechanisms of federal law and authorize direct negotiation or litigation between workers and management. View "Fernandez v. Kerry, Inc." on Justia Law

Stergiadis, Dimas, and Theo formed 1600 South LLC, executed an operating agreement, purchased land on which to build a fruit market, and began construction. The 2008 recession stopped construction and eventually led to the LLC’s 2009 dissolution. The partners disagreed about whether they impliedly agreed to equalize their capital contributions. The operating agreement provided that the three each held a one-third membership interest in the LLC; each member agreed to make an initial capital contribution on the date of execution but the amount was left blank. In 2008 Stergiadis sued Dimas in state court seeking to equalize the capital contributions. Dimas filed for bankruptcy, triggering the automatic stay. Dimas ultimately filed seven such petitions and received a discharge in 2016. The U.S. Trustee moved to reopen the bankruptcy to recover the value of an undisclosed property. The bankruptcy court agreed. Stergiadis filed a proof of claim in Dimas’s reopened bankruptcy seeking the same amount he was seeking in state court. The partners disputed the amounts of their respective contributions.The bankruptcy court allowed Stergiadis’s claim, awarding $618,974, finding that the members had an implied equalization agreement. The district court and Seventh Circuit affirmed, rejecting an argument that the LLC’s operating agreement precluded an implied equalization contract. The bankruptcy court properly relied on extrinsic evidence in finding such a contract. View "Dimas v. Stergiadis" on Justia Law

About 50 businesses that offer live adult entertainment (nude or nearly nude dancing) sought loans under the second round of the Paycheck Protection Program enacted to address the economic disruption caused by the Covid-19 pandemic. Congress excluded plaintiffs and other categories of businesses from the second round of the Program, 15 U.S.C. 636(a)(37)(A)(iv)(III)(aa), incorporating 13 C.F.R. 120.110. Plaintiffs asserted that their exclusion violated their rights under the Free Speech Clause of the First Amendment.The district court issued a preliminary injunction, prohibiting the Small Business Administration (SBA) from denying the plaintiffs eligibility for the loan program based on the statutory exclusion. The Seventh Circuit granted the government’s stay of the preliminary injunction and expedited briefing on the merits of the appeal. The SBA satisfied the demanding standard for a stay of an injunction pending appeal, having shown a strong likelihood of success on the merits. Congress is not trying to regulate or suppress plaintiffs’ adult entertainment. It has simply chosen not to subsidize it. Such selective, categorical exclusions from a government subsidy do not offend the First Amendment. Plaintiffs were not singled out for this exclusion, even among businesses primarily engaged in activity protected by the First Amendment. Congress also excluded businesses “primarily engaged in political or lobbying activities.” View "Camelot Banquet Rooms, Inc. v. United States Small Business Administration" on Justia Law

In each of two consolidated cases, a prisoner seeking a shorter sentence filed, within the time allowed for appeal, a motion asking the district judge to reconsider an adverse decision under the First Step Act of 2018. Each notice of appeal was filed within 14 days of the decision on the motion to reconsider but more than 14 days after the original decision.The Seventh Circuit affirmed the denial of the motions after declining to dismiss the appeals. A motion to reconsider a decision under the First Step Act suspends the decision’s finality and extends the time for appeal. The prisoners are not appealing from the imposition of their sentences but are invoking the First Step Act, which authorizes the reduction of a sentence long after the time allowed for appeal. Any prisoner serving a sentence for a covered crack-cocaine offense is entitled to ask a judge to treat him as if the Fair Sentencing Act of 2010 had been in force on the date of his original sentence. Resolution of a motion under a retroactive guideline is not a form of full sentencing; the procedures applicable to initial sentences do not govern. The court rejected the petitions on the merits, citing one prisoner’s plea bargain and prior felony conviction and noting that the other prisoner’s mandatory life sentence had already been commuted to 30 years’ imprisonment. View "United States v. Turner" on Justia Law

Robbins defaulted on a debt to a hospital for services provided to her children. After MED-1, hired to collect the debt, filed a small-claims action, Robbins paid the $1,499 debt but refused to pay $375 attorney’s fees as required by the agreement she signed with the hospital. MED-1 then incurred more attorney’s fees (fees-on-fees) attempting to recover the initial attorney’s fees. The Indiana small-claims court ordered Robbins to pay both the initial attorney’s fees and the fees-on-fees. Robbins’s appeal initiated a de novo proceeding, so MED-1 filed a new complaint.Robbins filed a federal suit against MED-1 under the Fair Debt Collection Practices Act, 15 U.S.C. 1692–1692p. A magistrate stayed the case pending the outcome of the state case, which was eventually dismissed for failure to prosecute. In federal court, Robbins raised res judicata, arguing that the state court’s dismissal precluded MED-1 from claiming that the contract required her to pay attorney’s fees and fees-on-fees. Alternatively, she advanced an argument that she was not required to pay fees-on-fees and that MED-1 violated the Act by trying to collect sums she did not owe. The Seventh Circuit affirmed judgment for MED-1. The Indiana court’s dismissal does not have preclusive effect. Because Robbins’s contract with the hospital required her to pay all collection costs, including attorney’s fees, MED-1 did not violate the FDCPA by attempting to collect fees-on-fees. View "Robbins v. Med-1 Solutions, LLC" on Justia Law

Following the 2018 merger between Vectren, an Indiana public utility and energy company, and CenterPoint, a public utility holding company, CenterPoint acquired all Vectren stock for $72.00 per share in cash. Several Vectren shareholders had filed suit alleging violations of the Securities Exchange Act of 1934, 15 U.S.C. 78a. The district court declined to enjoin the shareholder vote on the merger. The shareholders then filed an amended complaint alleging that Vectren’s Proxy Statement was misleading under Section 14(a) of the Act, arguing that the Proxy Statement should have included financial metrics used by Vectren’s financial advisor in its analysis leading to its opinion that the merger terms were fair to Vectren shareholders. The first omitted metric, Unlevered Cash Flow Projections, forecast the gross after‐tax annual cash flow for Vectren, 2018-2027. The second omitted metric, Business Segment Projections, showed separate financial projections for each of Vectren’s three main business lines.The Seventh Circuit affirmed the dismissal of the suit. The shareholders failed to allege adequately both materiality of the omissions and any resulting economic loss. The court noted that the plaintiffs did not allege the existence of a viable superior offer to support their allegations of economic loss. View "Kuebler v. Vectren Corp." on Justia Law

Plaintiff filed a class action complaint under the Employee Retirement Income and Security Act (ERISA) against the fiduciaries of the retirement plan offered by his former employer, Triad, for alleged financial misconduct.The Seventh Circuit concluded that the ERISA provisions that plaintiff invokes have individual and plan-wide effect. However, the arbitration provision in Triad's defined contribution retirement plan precludes relief that "has the purpose or effect of providing additional benefits or monetary or other relief to any Eligible Employee, Participant or Beneficiary other than the Claimant." Therefore, this provision prohibits relief that ERISA expressly permits. Accordingly, the court affirmed the district court's denial of Triad's motion to compel arbitration or, in the alternative, to dismiss. View "Smith v. Board of Directors of Triad Manufacturing, Inc." on Justia Law

Petitioner sought federal habeas corpus relief under 28 U.S.C. 2255, arguing that his counsel was ineffective by not challenging whether his prior drug convictions were predicates, as Indiana law defined cocaine isomers more broadly than federal law.The Seventh Circuit concluded that, although petitioner forfeited his theory of ineffectiveness in the district court, it is subject to plain error review. The court also concluded that, because it was objectively reasonable for petitioner's counsel not to advise risking a mandatory life sentence to pursue the isomer argument, the district court did not plainly err in ruling that counsel's performance was constitutionally adequate. Accordingly, the court affirmed the district court's denial of habeas relief. View "Harris v. United States" on Justia Law

The Seventh Circuit stayed an injunction barring Indiana from enforcing Ind. Code 16-34-2-1(a)(1), (2), 16-34-2-1.1(a)(1), (4), (b)(1), and 25-1-9.5-8(a)(4). The provisions subject to the injunction include a “physician-only law” applicable to medication abortions, a second-trimester hospital/ambulatory surgical center requirement, an in-person counseling requirement, an in-person physical examination requirement, and a telemedicine ban applicable to medication abortions. The court noted that all of the contested provisions have been in force for years, so a stay would preserve the status quo pending appellate resolution. Indiana has made the “strong showing” on the merits necessary to receive a stay. View "Whole Woman's Health Alliance v. Rokita" on Justia Law

During a funeral, Stevenson drew a revolver, fired one shot into the grave, waved the gun toward the crowd, and fled. Police officers quickly arrested Stevenson and recovered the gun. He pled guilty to possession of a firearm by a felon, 18 U.S.C. 922(g)(1); 924(e). The PSR applied the Armed Career Criminal Act, 18 U.S.C. 924(e), based on prior Illinois state convictions: a. 1989 conviction for attempted murder; a 1989 conviction for manufacture and delivery of cocaine; and a 2010 conviction for robbery. The guidelines range was 135-168 months but because Stevenson qualified as an armed career criminal—warranting a minimum 15-year sentence—the PSR recommended 180 months’ imprisonment. Stevenson claimed he received an Illinois Department of Corrections (IDOC) letter restoring his civil rights discharging him from his 1989 convictions. A former IDOC computer programmer testified “the restoration-of-rights discharge letters were generated when an offender ‘completed the term of parole.’”From Stevenson’s “convoluted” history of incarceration, parole, and re-arrest, the court concluded that Stevenson was not discharged from parole on either the drug trafficking charge or the attempted murder charge and sentenced Stevenson to 15 years’ imprisonment. The Seventh Circuit affirmed. The district court did not clearly err in concluding that Stevenson did not establish by a preponderance of the evidence that the letter in question pertained to those predicate convictions View "United States v. Stevenson" on Justia Law