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

Sterling Bank purchased Damian Services. The stock purchase agreement set up a two-million-dollar escrow to resolve disputes arising after the purchase and established comprehensive rights, obligations, remedies, and procedures for resolving disputes. After the purchase, a former Damian employee called some of Damian’s clients to tell them of a billing practice that the sellers had instituted years earlier. When Sterling learned of the situation, it investigated with the help of a forensic accountant. Sterling concluded that under the sellers’ management, Damian had overcharged its clients by over one million dollars. Sterling refunded the overpayments to its current clients, then unsuccessfully demanded indemnification from the escrow, claiming that the sellers had misrepresented Damian’s liabilities and vulnerability to litigation.The district court granted the sellers summary judgment, reasoning that Sterling missed the deadline for claiming indemnification under the stock purchase agreement. The court denied the sellers’ request for statutory interest on the escrow money.The Seventh Circuit reversed. Whether Sterling’s demand for indemnification was late depends on disputed facts. Even if the demand was late, however, the agreement’s elaborate terms provide that any delay could be held against Sterling only “to the extent that [sellers] irrevocably forfeit[] rights or defenses by reason of such failure.” Undisputed facts show that the sellers have not irrevocably forfeited any claims or defenses. View "Sterling National Bank v. Block" on Justia Law

Kellogg testified that when the Indiana Academy hired her as a teacher in 2006, its director, Dr. Williams, told her that she “didn’t need any more [starting salary, $32,000], because he knew [her] husband worked.” In 2017, Kellogg complained to the Dean of Ball State’s Teacher’s College, which oversees the Academy, that she received less pay than her similarly-situated male colleagues. The Dean responded that “[t]he issue [wa]s salary compression, which means those who [we]re hired after [Kellogg] began at a higher salary.” The Dean also noted that Kellogg’s salary increased by 36.45% during her time at the Academy while her colleagues’ salaries increased by less. In Kellogg’s 2018 lawsuit, the district court granted the Academy summary judgment, reasoning that there were undisputed gender-neutral explanations for Kellogg’s pay.The Seventh Circuit reversed. Williams’s statement contradicts the Academy’s explanations for Kellogg’s pay and puts them in dispute. It does not matter that Williams uttered the statement long ago, outside the statute of limitations period. Under the paycheck accrual rule, Williams’s statement can establish liability because it affected paychecks that Kellogg received within the limitations window. Kellogg can rely on Williams’s statement to put the Academy’s explanations in dispute. View "Kellogg v. Ball State University" on Justia Law

McAllister began working for Innovation in 2014. In June 2016, an automobile accident left McAllister with serious head and back injuries. On her Family and Medical Leave Act, 29 U.S.C. 2601, application her doctor wrote she could not perform “any & all” functions and estimated that McAllister could not return to work until September 2016. McAllister was granted short-term disability benefits. According to McAllister, Innovation indicated that “all restrictions had to be lifted before [she] could return to work.” Thereafter, her doctors extended the date for her return to work. Her FMLA leave expired. At an October 2016 meeting, Innovation told McAllister that an employee unable to return to work after six months of leave would be terminated but granted her additional leave, to expire upon her November neuro-psychological evaluation. Her doctors failed to complete the required testing.Innovation terminated her in December. McAllister was granted long-term disability benefits, which ended in October 2018 when the insurer determined she no longer had “functional deficits," and Social Security Disability Insurance benefits, retroactive to the date of her accident. McAllister sued for failure to accommodate her under the Americans with Disabilities Act (ADA, 42 U.S.C. 12111(8)). The Seventh Circuit affirmed summary judgment in favor of Innovation. McAllister was not “qualified” under the ADA; there was no genuine dispute of material fact that she could perform another job with or without accommodations. View "McAllister v. Innovation Ventures, LLC" on Justia Law

O’Donnell, represented by attorney Horn, challenged the Social Security Administration’s (SSA) denial of her application for disability insurance benefits. A magistrate remanded the case, awarding O’Donnell $7,493.06 in Equal Access to Justice Act (EAJA), 28 U.S.C. 2412(b), fees, paid to Horn. On remand, an ALJ found that O’Donnell was disabled. SSA determined that she was eligible for benefits dating back several months and withheld 25% of O’Donnell’s past-due benefits, $14,515.37, for possible future payment of fees under 42 U.S.C. 406(a), which authorizes SSA to award a “reasonable fee” to persons who successfully represent claimants in administrative proceedings.Horn filed an unopposed motion for authorization to collect $14,515.37 in section 406(b) fees; having already received the $7,493.06 EAJA award, Horn proposed to keep the EAJA fee, with SSA to pay the balance ($7,022.31), leaving $7,493.06 with SSA for future payment of section 406(a) fees. The magistrate’s order stated that Horn was awarded $14,515.37 under section 406(b), payable by the SSA from the past-due benefits and that “Horn will refund" to O'Donnell $7,493.06, equal to the EAJA award, so that Horn would have to look to O’Donnell, not SSA, to satisfy any future section 406(a) fees. An ALJ subsequently awarded Horn $4,925.21 under section 406(a); he had to seek that amount from O’Donnell. The Seventh Circuit affirmed. No statute requires that the court order netting; the Savings Provision contemplates a refund by the attorney. View "O'Donnell v. Saul" on Justia Law

Ramirez crashed his car into a truck and fled from the police. Speeding off, he hit a passenger who had jumped from his car. He ran a red light, drove around other cars in parking lots “at a high rate of speed,” then fled on foot. A search of his car revealed a loaded revolver and ammunition, which Ramirez confessed were his. Ramirez pleaded guilty (without an agreement) to possessing a firearm as a felon, 18 U.S.C. 922(g). The PSR factored in Ramirez’s flight and acceptance of responsibility and his criminal history, which included a drive-by shooting from 19 years earlier, burglary, theft, drug use, aggravated battery, resisting arrest, and parole violations, resulting in a guidelines range of 46-57 months’ imprisonment.The court addressed the 18 U.S.C. 3553(a) factors and concluded a two-level enhancement for reckless endangerment during his flight did not adequately account for the severity of his conduct, which endangered many people, and that Ramirez’s criminal history score understated his true history because it excluded some older convictions. Ramirez argued that he had aged out of crime at age 44, but admitted that he had spent much of his life in prison. The court concluded that a sentence within the guidelines range would not effectively deter him from endangering others. The Seventh Circuit affirmed his 72-month sentence. The district court appropriately handled the “aging out” argument as no data supported it, and reasonably justified its above-guidelines sentence. View "United States v. Ramirez" on Justia Law

Barrera sold a handgun to a fellow Latin Kings gang member, who was actually a government informant wearing a wire. Barrera, who had prior felonies, was indicted for unlawful possession of a firearm, 18 U.S.C. 922(g)(1). An order barred Barrera from disclosing any discovery because of the risks that the video’s dissemination posed to further law-enforcement efforts and the informant’s safety. Barrera, while released on bond, posted the video to Snapchat, naming the informant and sending the posts to fellow Latin Kings. The government moved to revoke Barrera’s pretrial release. The defense argued that Barrera would not receive adequate treatment for his skin and lung cancer and a recent stroke and relayed Barrera’s intent to plead guilty. The court advised Barrera of the potential guideline range, explained that the range was only advisory, accepted his guilty plea, and, given assurances that the corrections facility could care for Barrera’s medical conditions, revoked his release. The court subsequently imposed a 110-month prison term, based on a 110-120 months guideline range.The Seventh Circuit affirmed. The court adequately explained the sentence in light of the 18 U.S.C. 3553(a) factors, noting Barrera’s post-arrest conduct; that trafficking guns to gang members often leads to the deaths and injuries of innocents; and Barrera’s history and characteristics, including his medical needs. The judge’s comments were relevant in assessing the nature and circumstances of Barerra’s offense and the need to protect the public and deter unlawful conduct. View "United States v. Barrera" on Justia Law

Stamps sold methamphetamine to police informants. Police executed a search warrant at his apartment. In one bedroom, police found two bags of methamphetamine, each containing over 25 grams. In the other bedroom, police found a loaded handgun under Stamps’s mattress with his wallet and $1,079 in cash. Stamps confessed to having sold drugs for five years. Stamps later admitted owning a handgun, but for self-defense after receiving threats based on his wrongful implication in a murder investigation. Someone had fired shots into his apartment. Stamps pled guilty to one count of possession of methamphetamine with intent to distribute 50 grams or more (21 U.S.C. 841(a)(1)). The PSR recommended a two-level increase under U.S.S.G 2D1.1(b)(1) based on the firearm and did not recommend Stamps receive safety-valve relief (18 U.S.C. 3553(f)). The court agreed, stating that “it is not clearly improbable that ... handgun … was connected with the defendant’s relevant drug trafficking conduct,” calculated a 70-87-month guideline range with a 60-month mandatory minimum, and sentenced Stamps to 60 month's imprisonment.The Seventh Circuit vacated. Rather than evaluating whether Stamps had shown by a preponderance of the evidence that the gun was unrelated to his drug offense, the court found only that Stamps could not prove that it was “clearly improbable” that the gun was connected to his drug offense, imposing a higher burden than required for Stamps to prove safety valve eligibility. The error was not harmless. View "United States v. Stamps" on Justia Law

The defendants played active roles in a cross-country drug organization: Castro-Aguirre served as the head of operations; Ramirez-Prado handled logistics, including providing cars and hotels for distributors and couriers; Rojas-Reyes coordinated sales in Indianapolis; and Carrillo-Tremillo conducted sales in the northeast. A jury found each of 12 defendants guilty of conspiracy to distribute the controlled substances (methamphetamine and cocaine), 21 U.S.C. 841(a)(1) & 846, and conspiracy to launder money., 18 U.S.C. 1956(h)) Castro-Aguirre and Rojas-Reyes were also convicted on several additional charges.The Seventh Circuit affirmed their convictions and sentences, including one life sentence, with the exception of vacating Carrillo-Tremillo’s conviction for conspiracy to launder money. The court upheld the denial of a motion to suppress cell-site location information; the government, following the procedures set forth in the Stored Communications Act, gathered it in good faith. The court also upheld the denial of a motion in limine to suppress evidence of their gang membership and evidence that the Sinaloa Cartel was behind the kidnapping and murder of the defendants’ supplier. Although the evidence of the kidnapping and murder was highly prejudicial and its connection to the charged conduct was tenuous, any error was harmless in light of the other evidence. View "United States v. Rojas-Reyes" on Justia Law

Two days after Wisconsin certified the results of its 2020 election, the President invoked the Electors Clause of the U.S. Constitution and sued the Wisconsin Elections Commission, Governor, Secretary of State, and several local officials. The district court concluded that the President’s challenges lacked merit, as he objected only to the administration of the election, yet the Electors Clause only addresses the authority of the State’s Legislature to prescribe the manner of appointing its presidential electors. The court concluded that the President’s claims would fail even under a broader, alternative reading of the Electors Clause that extended to a state’s conduct of the presidential election.The Seventh Circuit affirmed. Wisconsin lawfully appointed its electors in the manner directed by its Legislature. The President’s claim also fails because of the unreasonable delay that accompanied the challenges the President now wishes to advance against Wisconsin’s election procedures. The Supreme Court has indicated that federal courts should avoid announcing or requiring changes in election law and procedures close in time to voting. The President had a full opportunity before the election to pursue challenges to Wisconsin law underlying his present claims; he cannot now—after the election results have been certified as final— seek to bring those challenges. View "Trump v. Wisconsin Elections Commission" on Justia Law

Meza, deep in debt, fell for fraudulent international trading programs promising incredible profits. He then tricked people he knew into investing in these programs. The scam involved ridiculous promises. The district judge called the dupes “the most improbable victims” she had ever seen. Meza was acquitted on one count of wire fraud and acquitted on another The judge sentenced him to 19 months in prison and ordered him to pay $881,500 in restitution. The Seventh Circuit affirmed. The trial court adequately explained its reasons for aggregating losses and excluded all losses around the time of the wire supporting the acquitted count: $295,000. The sentencing hearing covered the misrepresentations and losses in detail. Meza’s restitution did not include unconvicted and acquitted conduct. View "United States v. Meza" on Justia Law