by
BankDirect and Capital make loans to finance insurance premiums. In 2010, Capital, having exhausted the line of credit, approached BankDirect, which was willing to purchase Capital's loans and pay Capital to service those loans. BankDirect had a right to purchase Capital’s business after five years. If BankDirect did not purchase Capital, either party could extend the term by notice before January 4, 2016; otherwise, the agreement would terminate on January 31, 2016. Any extension could not go beyond June 1, 2018. BankDirect exercised the option in November 2015, but Capital refused to honor it. BankDirect sued. Capital sought an injunction to require BankDirect to continue purchasing loans and paying it to service them. BankDirect continued the arrangement through May 1, 2017, when it seized several Capital accounts and stated that it would no longer buy Capital's loans. BankDirect withdrew its request for specific performance. The district court concluded that Capital was entitled to a preliminary injunction so that the purchase‐and‐service arrangement would continue pending a judgment but did not address the 2018 terminal date or other disputes; failed to enter an injunction as a separate document under Fed. R. Civ. P. 65(d)(1)(C); and did not require Capital to post a bond (Rule 65(c)). The Seventh Circuit declined to address the merits or Rules 65(c) and (d), stating that the “injunction” should have contained a terminal date: June 1, 2018, and remanded for a determination of whether damages are available. View "Bankdirect Capital Finance, Inc. v. Texas Capital Bank National LLC" on Justia Law

by
In November 2016, two plaintiffs sued Metra and several of its employees, alleging racial discrimination under 42 U.S.C. 1983. An amended complaint named 11 plaintiffs and 10 defendants, with additional claims of racial discrimination and a claim under the Americans with Disabilities Act; it described instances in which African-American employees were treated differently than white employees. Defendants asserted it was impossible to discern the alleged acts attributable to the individual defendants, and that the amended complaint contained incorrect numbering and failed to assert wrongdoing against five defendants. The plaintiffs did not respond. Plaintiffs then submitted the wrong version of a second amended complaint. After a hearing, the plaintiffs filed an amended second amended complaint, with claims by 12 plaintiffs against Metra and 11 employees, alleging racial discrimination; hostile work environment; disparate treatment; negligent and intentional infliction of emotional harm; discrimination under the Fourteenth Amendment; discrimination under Title VII, the Illinois Civil Rights Act, and the ADA; retaliation; and breach of contract. Defendants claimed the breach of contract claim was preempted by the Railway Labor Act, the Illinois Act has no application in employment law, and that Title VII and the ADA only authorize suits against employers, not individuals. The court denied the plaintiffs’ motion to file a third amended complaint. The Seventh Circuit affirmed. The plaintiffs had ample opportunity to address the deficiencies and waived their arguments in opposition to the motion to dismiss. View "Lee v. Northeast Illinois Regional Commuter Railroad Corp." on Justia Law

by
In 1977, Peoria police officers arrested 14-year-old Savory for the rape and murder of Cooper and the murder of Cooper’s 14-year-old brother. Savory claims that officers subjected him to an abusive 31-hour interrogation; fabricated evidence; wrongfully coerced a false confession; suppressed and destroyed exculpatory evidence; fabricated incriminating statements from alleged witnesses; and ignored evidence pointing to other suspects. Savory was tried as an adult. His conviction for first-degree murder was overturned. He was convicted again in 1981 and was sentenced to 40-80 years in prison. Savory exhausted state remedies; he unsuccessfully sought federal habeas corpus relief. He repeatedly sought clemency and DNA testing. He was paroled in 2006. In 2011, the governor commuted the remainder of Savory’s sentence, terminating his parole but leaving his conviction intact. In 2015, the governor issued a pardon that “acquitted and discharged” Savory’s conviction. Less than two years later, Savory sued the city and police officers under 42 U.S.C. 1983. Under Supreme Court precedent (Heck), Savory could not bring suit until he obtained a favorable termination of a challenge to his conviction; he had to file suit within two years of accrual. The defendants asserted that the Heck bar lifted when Savory’s parole was terminated in 2011. The Seventh Circuit reversed the dismissal of the claims as untimely. Savory’s claims, which closely resemble malicious prosecution claims, could not accrue until “the conviction or sentence ha[d] been reversed on direct appeal, expunged by executive order, declared invalid by a state tribunal … or ... by a federal court’s issuance of a writ of habeas corpus.” View "Savory v. Cannon" on Justia Law

by
In 2008, Fisker, a manufacturer of luxury hybrid electric cars, became part of a trend in venture capital investments toward green energy technology start-ups. The Department of Energy advanced Fisker $192 million on a $528.7 million loan, secured with assistance from the Kleiner venture capital firm, a Fisker controlling shareholder. Tech-industry rainmakers and A-list movie stars invested in Fisker, which was competing with another emerging player, Tesla. In 2009, before sales began on its first-generation vehicles, Fisker announced that its second-generation vehicles would be built in Delaware. Delaware agreed to $21.5 million in state subsidies. Vice President Biden and Delaware Governor Markell participated in Fisker’s media unveiling of the collaboration. Riding this publicity, Fisker secured funding from additional venture capital firms and high net worth investors, including the five plaintiffs, who collectively purchased over $10 million in Fisker securities. In 2011, Fisker began selling its flagship automobile. In 2012, it stopped all manufacturing. In April 2013, Fisker laid off 75% of its remaining workforce; the U.S. Government seized $21 million in cash for Fisker’s first loan payment. The Energy Department put Fisker’s remaining unpaid loan amount ($168 million) out to bid. Fisker filed for bankruptcy. In October 2016, the plaintiffs filed a class action, alleging fraud, breach of fiduciary duty, and negligent misrepresentation. The Seventh Circuit affirmed the dismissal of plaintiffs’ claims as precluded by Illinois law’s three-year limitations period. Those claims accrued no later than April 2013. View "Orgone Capital III, LLC v. Daubenspeck" on Justia Law

by
Chicago police officers stopped a Toyota after it sped out of an alley. The driver fled, leaving several passengers. Officer Morlock pursued the driver. The Toyota rolled and wedged itself against Flaherty’s squad car. Passenger Grant tried to escape but his legs got stuck between the cars. Flaherty ordered the other passengers to “quit moving.” Brown, age 13, attempted to flee but stopped hanging out of a window. Officers Proano and Habiak arrived. Proano had his weapon cocked and aimed at the Toyota. Seconds later, passenger Bates reached over the console, put the car in reverse, and pressed the gas pedal. The Toyota moved and a BB gun fell out. No one was in its path. Habiak picked up the gun. Proano fired shots as the Toyota pivoted and rolled into a light pole. Ten of Proano’s 16 bullets entered the Toyota; one hit Bates’s shoulder, others grazed his face. Two bullets hit another passenger in his leg and foot. No other officer fired shots. Proano reported that he shot because of an “imminent threat of battery.” Proano did not identify the BB gun as a contributing factor. Proano was convicted for willfully depriving the passengers of their right to be free from unreasonable force, 18 U.S.C. 242. The Seventh Circuit affirmed, rejecting Proano’s arguments regarding the admission of training and policy evidence and the jury instruction on willfulness. The court upheld the denial of a “Garrity” motion. Under Garrity, when a public official must choose between cooperating in an internal investigation or losing his job, his statements during the investigation cannot be used against him in a criminal trial. Federal prosecutors were never exposed to Proano’s protected statements. A dashcam video, other witnesses, and police reports all provided independent bases from which they could have learned the facts. View "United States v. Proano" on Justia Law

by
Yafai and Ahmed were born, raised, and married in Yemen. Yafai became a naturalized U.S. citizen in 2001 and successfully filed I‐130 petitions on behalf of his wife and several of their children. Ahmed and her children subsequently applied for visas. The consular officer denied Ahmed’s visa application, citing 8 U.S.C. 1182(a)(6)(E), which provides that “[a]ny alien who at any time knowingly has encouraged, induced, assisted, abetted, or aided any other alien to enter or to try to enter the United States in violation of law is inadmissible.” The denial stated that she attempted to smuggle two children into the U.S. using the identities Yaqub and Khaled. Yafai and Ahmed apparently argued that Ahmed could not be guilty of smuggling, because the children whom she had allegedly smuggled were deceased. Ahmed provided: vaccination records, Khaled’s school records, hospital bills, hospital birth records, the police report from the drowning accident, Khaled’s passport, and family photos. An embassy fraud prevention manager found the their testimony not credible and initiated an investigation. Several months later, the consular officer reaffirmed the prior visa denial. The Seventh Circuit affirmed the dismissal of a suit by Yafai and Ahment. The decision is facially legitimate and bona fide, so the doctrine of consular nonreviewability applies. View "Yafai v. Pompeo" on Justia Law

Posted in: Immigration Law

by
Neilitz purchased $125,000 worth of ECS stock; Rawah Partners invested $350,000. In 2008, Corrigan, ECS’s President and CEO, negotiated a sale of ECS. Because of the worldwide financial downturn, the sale fell through. Shortly thereafter, ECS's board authorized Corrigan to manage ECS as he saw fit. Corrigan was negotiating another sale when ECS began to suffer cash flow problems. ECS had difficulty paying expenses and officers’ compensation. It closed its Chase Bank account and opened a new LaSalle Bank account that excluded the Vice President from its signatories. ECS's employee healthcare policy was canceled in January 2009, for nonpayment. Corrigan began soliciting Neilitz and Rawah for additional investments announcing that ECS was close to closing a sale but needed funds for healthcare insurance premiums. Per Corrigan’s instructions Neilitz and Rawah each wired $50,000 to an account which, unbeknownst to them, was Corrigan’s personal account. Corrigan spent the funds for personal expenses. Corrigan was terminated from ECS in 2011. Corrigan contacted Neilitz and Rawah, attempting to buy back the fraudulently sold stock but reaffirmed his original lie. Corrigan was convicted on four counts of wire fraud, 18 U.S.C. 1343. The Seventh Circuit affirmed his conviction and an order of restitution in the full amount of the investments. The indictment adequately alleged a scheme to defraud; the evidence supported the conviction. View "United States v. Corrigan" on Justia Law

by
Mitchell enrolled in an Elgin Community College online criminal-justice course. The instructor, an Elgin police officer, eventually advised her that she was failing the course. Soon after, the police department received anonymous threats and a harassing email targeting the officer. Another officer swore out a complaint accusing Mitchell of electronic communication harassment. She was arrested, immediately bonded out, and two years later was acquitted. Mitchell sued the city and several officers seeking damages for wrongful prosecution. A district judge dismissed the case, concluding that the federal claims were either untimely or not cognizable. Mitchell appealed. The Supreme Court’s 2017 decision, Manuel v. Joliet, overturned circuit precedent that defeated Mitchell’s Fourth Amendment claim below, clarifying that pretrial detention without probable cause is actionable under the Fourth Amendment, via 42 U.S.C. 1983. The Court did not decide when the claim accrues. A Seventh Circuit panel then held that a Fourth Amendment claim for unlawful pretrial detention accrues when the detention ends. The court did not determine the timeliness of Mitchell’s claim because the parties did not adequately address whether and under what circumstances a person who is arrested but released on bond remains “seized” for Fourth Amendment purposes or what conditions of release, if any, were imposed on Mitchell when she bonded out. View "Mitchell v. City of Elgin" on Justia Law

by
The Seventh Circuit previously concluded that people whose property is taken into custody by Illinois under its Disposition of Unclaimed Property Act, 765 ILCS 1026/15-607, are entitled to receive the time value of their property (interest or other earnings), less reasonable custodial fees. On remand the district court declined to certify a proposed class, ruling that owners are entitled to compensation for the time value of money only if the property was earning interest when the state took it into custody, which meant that the class had internal divisions that made certification inappropriate. The Seventh Circuit vacated. The Supreme Court has held that the Takings Clause protects the time value of money as much as it does money itself. What the property earns in the state’s hands does not depend on what it had been earning in the owner’s hands; cash has time value even if not invested. The Takings Clause does not set up a situation in which someone who wanted to be “in cash” bears the risk of loss as market conditions change without any prospect of offsetting gain. On remand, Illinois can argue that it does not owe interest on small amounts, such as the $100 at issue, because of administrative costs. View "Goldberg v. Frerichs" on Justia Law

by
Hagen was convicted twice under Illinois law for failing to get her children to school (Guardian Allows Child Truancy). She later pleaded guilty in federal court for conspiring to distribute methamphetamine. The district court counted her two convictions for allowing child truancy toward her criminal history score. The Seventh Circuit reversed, applying a five‐factor test to confirm that Guardian Allows Child Truancy is similar to, but less serious than, the offense of non‐support (failing to provide for a child’s basic needs); Sentencing Guidelines section 4A1.2(c)(1) therefore required its exclusion from the criminal history score. Non‐support bears so many obvious similarities to Guardian Allows Child Truancy that the court plainly ought to have considered it; the court committed plain error, affecting a substantial right. View "United States v. Hagen" on Justia Law

Posted in: Criminal Law