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

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Biomet employed Yeatts in a role that included implementing compliance policies. In 2008, Biomet terminated its Brazilian distributor Prosintese, run by Galindo, after learning that Galindo had bribed healthcare providers, in violation of the Foreign Corrupt Practices Act, 15 U.S.C. 78dd-1. Prosintese still owned Brazilian registrations for Biomet’s products. Biomet could not quickly obtain new registrations, and, in 2009, agreed to cooperate with Prosintese and Galindo “to implement the new Biomet distributors.” A distributor that replaced Prosintese hired Galindo as a consultant. Yeatts communicated with Galindo in that new role. Biomet entered into a 2012 Deferred Prosecution Agreement with the Department of Justice, which required that Biomet engage an independent corporate compliance monitor. In 2013, Biomet received an anonymous whistleblower tip that Biomet continued to work with Galindo. Biomet informed the DOJ and the Monitor, terminated Yeatts, and included Yeatts on a Restricted Parties List. Biomet entered a second DOJ agreement that references Yeatts’s interactions with Galindo and paid a criminal penalty of $17.4 million. In Yeatts's defamation suit, the court granted Biomet summary judgment because Biomet’s statement that Yeatts posed a compliance risk was an opinion that could not be proven false and presented no defamatory imputation. Yeatts could not establish that Biomet made the statement with malice, so Biomet was protected by the qualified privilege of common interest and the public interest privilege. The Seventh Circuit affirmed, agreeing that inclusion of Yeatts on the Restricted Parties List conveyed no defamatory imputation of objectively verifiable or testable fact. View "Yeatts v. Zimmer Biomet Holdings, Inc." on Justia Law

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The Southern Illinois Drug Task Force investigated Jackson and his associates. After a confidential source (CS) completed three controlled drug purchases from Jackson, each recorded via an audiovisual device, agents obtained a warrant and raided Jackson’s residence. They found methamphetamine, other drugs, cash, scales, and multiple loaded firearms. Jackson had previously twice pleaded guilty to felony drug charges and faced a mandatory minimum sentence of life imprisonment on count 4. The government determined not to call the CS as a witness. The judge admitted into evidence the recordings showing the CS purchasing drugs from Jackson. In a pretrial hearing, the judge noted that he had no discretion to modify the mandatory life sentence for a conviction on count 4. Jackson stated that, contrary to his lawyer’s advice, he wished to proceed to trial. The jury found Jackson guilty of counts 1 through 4. The First Step Act, Pub. L. 115-391, then became law, reducing the mandatory minimum sentence for 21 U.S.C. 841(b)(1)(A)(viii) (Jackson’s count 4) from life to 25 years. The Seventh Circuit affirmed Jackson’s convictions and life sentence, rejecting arguments that the government failed to lay the appropriate foundation before the recordings were admitted; the investigators should not have been allowed to “narrate” portions of the recordings; and that admission of the recordings without the CS’s presence and testimony violated the Confrontation Clause. The First Step Act is not retroactive and Jackson’s sentence was not unreasonable. View "United States v. Jackson" on Justia Law

Posted in: Criminal Law
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Zacahua, a citizen of Mexico, lived as an unauthorized alien in the U.S. for over 20 years. Although he was employed by a Hilton hotel, Zacahua also transported heroin. Zacahua and codefendants were indicted for conspiracy to distribute heroin. During Zacahua’s bond hearing, the government invoked Zacahua’s immigration status to argue that he was a serious flight risk because he faced the likelihood of removal. The court held a Federal Rule of Criminal Procedure 11 hearing, advised Zacahua that he faced a 120-month mandatory minimum sentence, and informed Zacahua of his rights and the potential consequences of a felony conviction. The court never told Zacahua that he might be removed from the U.S. and denied future admission as a consequence of his guilty plea, as Rule 11(b)(1)(O) requires. During an interview with a Probation Officer, Zacahua acknowledged his unauthorized status and that he faced deportation. He expressed hopes of working at a Hilton hotel in Mexico and of caring for his ailing parents. At his subsequent sentencing hearing, the court acknowledged the likelihood of deportation and discussed Zacahua’s employment prospects in Mexico. Zacahua spoke of returning to Mexico as quickly as possible. The court sentenced him to the mandatory minimum: 120 months. The Seventh Circuit rejected his attempt to withdraw his plea based on the Rule 11 violation. Zacahua does not demonstrate a reasonable probability that, had the court provided the warning, he would not have pleaded guilty. View "United States v. Zacahua" on Justia Law

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Chapter 70 of the Wisconsin Tax Code governs the taxation of manufacturing and commercial companies aside from railroads and utilities. Chapter 76 governs the taxation of railroads and utilities, including air carriers, pipeline companies, and water conservation and regulation companies. The Code contains exemptions from the general property tax, including an exemption for “all intangible personal property,” which covers custom computer software. Manufacturing and commercial taxpayers generally qualify for the intangible personal property exemption; railroads and utilities do not and are the only taxpayers that Wisconsin requires to pay taxes on intangible property, including custom software. Union Pacific claimed the value of its custom software as exempt. The Department of Revenue audited Union Pacific and concluded that for the years 2014 and 2015, it owed $2,631,104.77 in back taxes and interest after disallowing that deduction. Union Pacific filed suit, arguing that the tax singles out railroads as part of an isolated and targeted group in violation of the Railroad Revitalization and Regulatory Reform Act of 1976, 49 U.S.C. 11501(b)(4). The Seventh Circuit affirmed summary judgment in favor of Union Pacific. The intangible property tax exempts everyone except for an isolated and targeted group of which railroads are a part. View "Union Pacific Railroad Co. v. Wisconsin Department of Revenue" on Justia Law

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Dr. Johnston, a prison psychologist, provided psychological services to Nigl, a Wisconsin Department of Corrections prisoner, serving a 100-year sentence. On Johnston’s last day of work, Nigl kissed her. The two began communicating by mail, email, and phone and became engaged. Johnston returned to employment with the Department and submitted a “fraternization policy exception request” but did not disclose their romantic relationship. Johnston’s supervisor never processed the request, but the two continued to have contact, in violation of Department policy. The Department learned about the relationship and terminated Johnston. Johnston later requested to visit Nigl. The request was denied under state rules because she had been a Department employee less than 12 months earlier. During investigations, staff found letters and photographs from Johnston in Nigl’s cell; some were sent under an alias. Some photographs depicted Johnston in sexually suggestive poses. Johnston had also set up a phone account under the alias and engaged in phone sex with Nigl. The Department reported the relationship to the Psychology Examining Board, which suspended Johnston’s license. Johnston submitted additional unsuccessful visitation requests. Nigl requested permission to marry Johnston and grieved the denial. The Seventh Circuit affirmed summary judgment, rejecting their 42 U.S.C. 1983 lawsuit. The denial was reasonably related to legitimate penological interests. Nigl and Johnston engaged in a pattern of rule-breaking and deception in furtherance of their relationship and the Psychology Examining Board concluded that Johnston violated rules designed to protect patients. The 2017 decision is not tantamount to a permanent denial. View "Nigl v. Litscher" on Justia Law

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The dealer had the exclusive right to sell the manufacturer's below-ground storm shelters in Missouri and Arkansas. The dealer created a wordmark—“Life Saver Storm Shelters”— and a logo using that name, which it affixed to the shelters. In 2006, the manufacturer obtained the dealer’s permission to use these marks on shelters marketed in Illinois. The manufacturer violated the limited license by using the marks on products sold throughout the country. The manufacturer's suit for trademark infringement, claiming prior use and ownership of the wordmark, was rejected on summary judgment. The dealer counterclaimed for trademark infringement and false endorsement under the Lanham Act. The district judge found for the dealer on all claims, entered a cease-and-desist order, and awarded $17 million in disgorged profits as damages but denied vexatious-litigation sanctions under 28 U.S.C. 1927 and attorney’s fees under the Lanham Act. The Seventh Circuit affirmed in part, rejecting the manufacturer's argument that the logo violated a statute that makes it a crime to use the American Red Cross emblem. The conclusion that the manufacturer engaged in trademark infringement on a vast scale was supported by the evidence. The court granted a limited remanded; although the judge reasonably concluded that section 1927 sanctions were not warranted, his summary denial of Lanham Act fees cannot be squared with his conclusions on the merits concerning infringement. View "4SEMO.COM, Inc. v. Southern Illinois Storm Shelters, Inc." on Justia Law

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In 1991 Daniels was sentenced to 35 years in prison for drug-trafficking crimes he committed while leading a violent Milwaukee street gang in the 1980s. Based on two of his many prior crimes, he was sentenced as a career offender under the then-mandatory Sentencing Guidelines but the designation did not affect his sentencing range: 360 months to life. More than two decades later, Daniels moved to vacate his sentence under 28 U.S.C. 2255 citing the Supreme Court’s 2015 Johnson decision, which invalidated the “residual clause” in the Armed Career Criminal Act as unconstitutionally vague. Daniels argued that the identically phrased residual clause in the career offender guideline is likewise unconstitutionally vague and that one of the predicate convictions for his career-offender status qualified only under the residual clause. The district judge disagreed, relying on the Supreme Court’s 2017 Beckles decision, which forecloses vagueness challenges to the post-Booker advisory Sentencing Guidelines. In the meantime, the Seventh Circuit held that defendants who were sentenced under the mandatory Guidelines may bring Johnson-based vagueness challenges to the career-offender guideline. The Seventh Circuit nonetheless affirmed Daniels’s sentence. Daniels was wrongly designated a career offender but the error was harmless because it did not affect his sentence. View "Daniels v. United States" on Justia Law

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Collins and others engaged in a scheme to defraud banks by submitting stolen and altered checks. The scheme netted $93,215.50. Collins pleaded guilty to bank fraud, 18 U.S.C. 1344. The presentence investigation report noted that Collins was eligible for up to five years of supervised release and recommended discretionary conditions requiring Collins to remain in the “jurisdiction” where he would be supervised, unless granted permission to leave and allowing a probation officer to visit him at work at “any reasonable time” and a special condition requiring Collins to perform at least 20 hours of community service per week at the direction of the Probation Office until gainfully employed, not to exceed 200 hours of service. Collins filed a memorandum objecting to several issues but did not dispute any of the conditions proposed in the PSR. The district court reviewed the PSR and imposed a sentence of 55 months’ imprisonment plus five years of supervised release. At sentencing, the court read the conditions, Collins asked questions about restitution but did not inquire about or object to the supervised release conditions. The Seventh Circuit upheld the imposition of the Jurisdiction, Visitation, and Community Service Conditions, noting that Collins had waived his objections. The court remanded with instructions for the district court to amend its written judgment to substitute the term “federal judicial district” for the word “jurisdiction” in the Jurisdiction Condition. View "United States v. Collins" on Justia Law

Posted in: Criminal Law
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Gardner was arrested after firing a gun at two vehicles thought to be driven by rival gang members. While in pretrial custody, he engaged in additional violent behavior. Before trial, Gardner was diagnosed with major depression, obsessive-compulsive disorder, and chronic posttraumatic stress syndrome; a second evaluation found that Gardner “appears to [have] borderline personality disorder traits, i.e., a propensity toward marked impulsivity and reactivity without sufficient forethought or moral compunction.” He pleaded guilty to possessing a firearm as a felon, 18 U.S.C. 922(g)(1). The district judge imposed an above-Guidelines sentence based in part on Gardner’s use of violence in a prior burglary, U.S.S.G. 2K2.1(a)(1)– (4). Gardner had a lengthy criminal history. The Seventh Circuit affirmed his 100-month sentence, rejecting an argument that the “categorical approach” applies when a judge exercises Booker discretion to impose an above-Guidelines sentence based on a defendant’s aggravating conduct in a prior crime. The sentencing judge may consider aggravating circumstances in a defendant’s criminal record without the constraints imposed by the categorical approach that usually applies to statutory sentencing enhancements and the determination of offense-level increases and criminal-history points under the Guidelines. Gardner waived arguments that the judge inadequately addressed his mental-health challenges and relied on inaccurate information in the presentence report. View "United States v. Gardner" on Justia Law

Posted in: Criminal Law
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In September 2011 Chicago Police Officers stopped and searched the plaintiffs without justification and took them to Homan Square, which was later exposed as a den of police misconduct. The officers interrogated them for several hours, omitting Miranda warnings and ignoring repeated requests for an attorney. The plaintiffs were denied food, water, and access to a bathroom. The officers tried to coerce false confessions and threatened to file false charges against the plaintiffs if they told anyone about their mistreatment. Fearing for their safety, the plaintiffs did not seek legal redress. In early 2015 a newspaper ran an exposé on Homan Square. In March the plaintiffs sued the city and the officers. The 42 U.S.C. 1983 lawsuit was dismissed under the two-year statute of limitations. A minute order issued on March 31, 2016. The judge issued her opinion on January 31, 2018, with a Rule 58 judgment. A week later, the plaintiffs filed their notice of appeal and docketing statement. By operation of Federal Rule 4(a)(7)(A), the time to file a notice of appeal expired 180 days after the minute order. The Seventh Circuit declined to dismiss an appeal but affirmed the dismissal. The defendants’ Rule 4(a) objection was untimely under Circuit Rule 3(c)(1) but the suit was untimely. Precedent forecloses the plaintiffs’ equitable estoppel theory. View "Vergara v. Chicago" on Justia Law