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

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In 1880, the Sisters, a Roman Catholic organization, founded OSF, which provides healthcare to indigent patients. The Sisters maintain authority through OSF’s governing documents and canonical and civil guidelines pertaining to church property. OSF merged with another Catholic hospital with the permission of the Holy See. Both offered employee pension plans before the merger. The Plans, with 19,285 participants, are now closed to new participants. Smith, a former employee and OSF plan participant, sued, claiming that the plans are not eligible for the church plan exemption under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001 because they are administered by Committees that are not “principal-purpose organizations” and that the exemption itself is unconstitutional. She alleged that OSF allowed the plans to become severely underfunded; failed to follow notice, disclosure, and managerial requirements; and breached its fiduciary duties. The district court granted the defendants summary judgment despite plaintiff’s Federal Rule of Civil Procedure 56(d) motion to postpone the decision so that she could complete further discovery. The Seventh Circuit vacated. The summary judgment motion was filed long before discovery was to close; plaintiff was pursuing discovery in a diligent, sensible, and sequenced manner; and the pending discovery was material to summary judgment issues. The court’s explanation for denying a postponement overlooked earlier case-management and scheduling decisions and took an unduly narrow view of relevant facts. View "Smith v. OSF Healthcare System" on Justia Law

Posted in: Civil Procedure, ERISA

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Columbia students Jane and John had a sexual encounter. Weeks later Jane alleged she had not consented to the encounter. Columbia investigated. John did not provide any exculpatory evidence. Columbia’s Title IX coordinator reviewed the investigative report and notified John that there was sufficient evidence for a hearing panel. John responded that the allegations were false and that he had been physically assaulted and verbally harassed by Jane and her friends. Campus safety identified the student who struck John and addressed the issue. Columbia addressed each of his concerns, reminded John that he could submit evidence, including evidence of bias by a Columbia employee, and identified an academic advisor who could approve any accommodations John might need. John responded with screenshots of text messages, his earlier letter, and a toxicology report. The hearing panel found by a preponderance of the evidence that John violated Columbia’s student sexual misconduct policy and suspended him for the academic year. Columbia's appeals officer upheld the findings and discipline. John filed suit, alleging violations of Title IX, 20 U.S.C. 1681, breach of contract, promissory estoppel, negligent and intentional infliction of emotional distress, and negligence. The district court dismissed. The Seventh Circuit affirmed. John failed to allege particularized facts that could lead to a reasonable inference that Columbia denied him an educational benefit because of his sex. Columbia responded quickly and diligently to his complaints and gave him multiple opportunities to present evidence. View "Doe v. Columbia College Chicago" on Justia Law

Posted in: Education Law

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Sterling owed Southlake Health Club outstanding fees ($250). In 2001, Southlake's counsel, Austgen, instituted a state court collection action. A federal bankruptcy court discharged Sterling’s debt to Southlake in 2010. Although Sterling notified Southlake of the discharge, no one notified Austgen or the Indiana court. Sterling failed to appear in the state-court collection proceedings; that court issued a warrant for her arrest. A year later, Sterling was arrested and jailed for two days. Southlake and Austgen dropped pursuit of the debt. Sterling instituted adversary proceedings in bankruptcy court, seeking to have Southlake and Austgen held in contempt for continuing to collect a debt that had been discharged, 11 U.S.C. 524. The bankruptcy court and the district court ruled against Sterling. The Seventh Circuit affirmed in part; Austgen’s lack of knowledge of the discharge prevents it from being held in contempt. Southlake, however, must be held liable for the actions taken by counsel on its behalf. Southlake, a sophisticated party, had knowledge of the discharge yet turned a blind eye to the progress of Sterling’s case. Holding otherwise “would create a loophole in the law through which creditors could avoid liability simply by remaining ignorant of their agents’ actions or by failing to notify their agents of debtors’ bankruptcy proceedings.” View "In re: Sterling" on Justia Law

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Paul Koh, 22, was found in a pool of blood next to a knife in his home, having been stabbed in the throat and chest. Officers initially noted a possibility of suicide. Paul's parents' requests to see Paul, get medicine and cell phone, and to go to the hospital were denied. They were taken to the police department and not allowed to make calls. Officer Kim, who spoke Korean socially, served as a translator but did not translate everything. Mr. Koh was questioned for 150 minutes. Koh claims Officer Graf “told me that the only person I could see was a lawyer... I didn’t have any phone numbers, so that was the end” and that Kim advised that he did not need an attorney. His Miranda warnings were in English. Some of Koh's responses were confusing or nonresponsive. Koh denied any involvement in Paul’s death. There was evidence suggesting a struggle and of tension in the family. During a second interview, officers pressed harder, stating, “We can be here for days” and asking questions at a rapid pace, with mistranslations. Koh gave short responses that could be interpreted as agreeing with Graf’s self-defense theory. Koh, acquitted on state murder charges after four years in the Cook County Jail, sued under 42 U.S.C. 1983. The district court denied the defendants summary judgment on false arrest claims, but held that Koh’s false arrest ended when the officers later had probable cause to arrest him; denied summary judgment on Koh’s coerced confession, conspiracy and failure to intervene, and municipal liability false arrest claims. The court granted the defendants summary judgment on Koh’s malicious prosecution, substantive due process, evidence-fabrication. and pretrial detention (Fourth Amendment) claims. The Seventh Circuit dismissed appeals on the issue of qualified immunity concerning coerced confession as inseparable from the questions of fact identified by the district court. View "Koh v. Ustich" on Justia Law

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In 2015, Brazier, Fields, and Mzembe kidnapped, shot, and ruthlessly beat Harris as he left his home. Charged with federal kidnapping and firearms crimes, the three were tried and sentenced separately. Their appeals were consolidated. The defendants did not challenge their convictions for the underlying crimes of kidnapping or holding Harris for ransom; the two defendants convicted of being felons in possession of firearms did not challenge those convictions. Defendants Fields and Mzembe challenged their convictions and sentencing under 18 U.S.C. 924(c) for using and discharging firearms during a crime of violence. The Seventh Circuit reversed those section 924(c) decisions, citing later decisions by the Supreme Court, establishing that the underlying offenses do not qualify categorically as crimes of violence. Under the categorical analysis that applies to both the elements and residual clauses of section 924(c)'s definition of crimes of violence, Mzembe’s and Fields’ convictions for kidnapping and demanding ransom cannot support the mandatory consecutive sentences. The categorical method focuses on the essential elements of the counts of conviction, requiring courts to focus on the least culpable conduct that could violate the relevant statutes, without considering the actual facts of the defendants’ conduct. In resentencing Mzembe and Fields on the remaining charges, however, the court can consider their actual conduct in exercising its discretion under 18 U.S.C. 3553(a). View "United States v. Mzembe" on Justia Law

Posted in: Criminal Law

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Pretrial detainees at the Lake County Adult Correctional Facility allege that for approximately three days, jail officials shut off all water in their jail without any warning. The shutdown was apparently conducted in order to replace a pump. With no running water, the detainees were provided with five bottles of water for their personal and sanitation uses and with a communal barrel of water for each pod in the jail. As a result, they became ill and feces built up and festered in the jails’ toilets, attracting insects. When plaintiffs asked for more water, they were locked down in their cells as punishment. The detainees filed a putative class action, alleging violations of their Fourteenth Amendment due process rights. The district court denied the defendants’ motion for summary judgment on the basis of qualified immunity. The Seventh Circuit affirmed. The rights that plaintiffs identify—to have enough water for drinking and sanitation, and not to be forced to live surrounded by their own and others’ excrement—are clearly established. Regardless of the legitimacy of the jail’s objective, taking as true the conditions described in the complaint, with plausible inferences, the conditions of confinement were objectively unreasonable and “excessive in relation to” any legitimate non-punitive purpose. View "Hardeman v. Wathen" on Justia Law

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In 2008, Deerfield’s employee, Graff, had an automobile accident with Keeping. Deerfield had a primary commercial automobile insurance policy through American that covered it for up to $1 million in liability. Deerfield's broker, Gallagher, also helped Deerfield obtain an excess insurance policy from Landmark, to kick in after Deerfield’s liability exceeded $1 million. After Graff’s accident, Deerfield informed American and Gallagher through an intermediary company, Laurus. No one notified Landmark, even after Keeping filed suit. American assumed the defense and hired attorney Olmstead. American never offered the full policy value to settle the suit. More than a year before trial, Keeping made a $1.25 million demand, which was high enough to trigger Deerfield’s excess insurance coverage. American counter-offered $75,000. In 2014, weeks before trial, Landmark learned about Keeping’s lawsuit. Its claims adjuster evaluated the case at $500,000-$750,000. Before trial, Landmark was receiving regular updates as a passive bystander. Before the verdict was announced, American assumed that the jury had sided with the defense and did not resume settlement negotiations. Deerfield did not know about the negotiations, although Olmstead was involved. Landmark knew and advised that American should settle within the primary policy limit. The jury reached a verdict that remitted to $2.3 million. Landmark sought a declaratory judgment that it did not have to cover the loss. The Seventh Circuit affirmed summary judgment for Landmark, holding that Deerfield’s notice was unreasonably late as a matter of law. View "Landmark American Insurance Co. v. Deerfield Construction, Inc." on Justia Law

Posted in: Insurance Law

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Chicago Officers stopped Martin for non-functioning tail and brake lights. Martin claims he had not committed any traffic violations. Martin explained that he did not have his driver’s license. The officers asked Martin to step out of the car as additional officers arrived. Martin claims the officers forced him from the car, conducted a pat-down search, handcuffed him, put him into a police car, then searched his car, where they recovered a semiautomatic handgun with a defaced serial number and a baggie of crack cocaine. Martin had previously been convicted of first-degree murder and unlawful use of a weapon by a convicted felon. Martin was charged with various crimes under Illinois law and spent 65 days incarcerated. The state court granted Martin’s motion to suppress the evidence. The charges were dismissed. Martin filed suit under 42 U.S.C. 1983. The officers argued that even if the stop was unlawful, once officers saw the handgun and cocaine, they had probable cause for Martin’s arrest, which limited Martin’s damages to the period between his stop and his arrest. The district court agreed. The jury awarded him $1.00. The Seventh Circuit affirmed. The jury concluded that the officers unlawfully seized Martin without reasonable suspicion, but found against Martin on the claim that officers either arrested him or searched him or his car without probable cause. The only Fourth Amendment injury being redressed is the brief initial seizure before officers asked for Martin's license. View "Martin v. Marinez" on Justia Law

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Hudson, a 39-year employee of Consolidated Communications, was discharged due to strike-related misconduct. Hudson had blocked a company vehicle while moving in traffic during the strike. Following an appeal to the D.C. Circuit Court, the National Labor Relations Board issued a supplemental decision concluding that Consolidated did not violate the National Labor Relations Act, 29 U.S.C. 158(a)(3). The Board found that Hudson’s actions were calculated to intimidate the non-striking employees and were inherently dangerous. The Seventh Circuit affirmed, rejecting the union’s argument that Hudson’s conduct was not intended to intimidate or endanger the Consolidated employees and that she only intended to follow them to set up an ambulatory picket. That suggestion is belied by the fact that she was following them from the front and purposely impeded their progress. These acts illustrate a thorough plan to do more than follow the work vehicle and are not “animal exuberance” which the Board can and does excuse. View "Local 702, International Brotherhood of Electrical Workers v. National Labor Relations Board" on Justia Law

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Ahmed co‐owned an LLC that owned a condominium building. Ahmed recruited individuals to pose as buyers for the building's units and to submit fraudulent loan applications to lenders, including Fifth Third. The participants split the loan proceeds; no payments were made on the loans. Kaufman was the seller's attorney for every closing. The closings were conducted by Traditional Title at Kaufman’s law office. Traditional received closing instructions from Fifth Third to notify it immediately of any misrepresentations and to suspend the transaction if “the closing agent has knowledge that the borrower does not intend to occupy the property.” Kaufman concealed the buyers’ misrepresentations and instructed closing agents to complete closings even when buyers were purchasing multiple properties. Ahmed and Kaufman extended the scheme to other buildings. Although Kaufman testified that he was not aware of the fraud, Ahmed testified that Kaufman knew the buyers were part of the scheme. Two closing agents testified that they informed Kaufman about misrepresentations in loan applications. The Seventh Circuit affirmed a fraud judgment for Fifth Third. Kaufman participated individually in each closing as counsel and personally directed Traditional’s employees to conceal the fraud from Fifth Third, for his personal gain. The judgment against Kaufman was not derived solely from Traditional’s liability, based on his membership in the LLC, so the Illinois LLC Act does not bar his liability. Kaufman is not shielded by being the attorney for the seller in the fraudulent transactions. View "Fifth Third Mortgage Company v. Kaufman" on Justia Law