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

In 1938, West’s predecessor granted Louisville Gas & Electric’s predecessor a perpetual easement permitting a 248-foot-tall tower carrying high-voltage electric lines. In 1990, Louisville sought permission to allow Charter Communication install on the towers a fiber-optic cable that carries communications (telephone service, cable TV service, and internet data); West refused. In 2000 Louisville concluded that the existing easement allows the installation of wires that carry photons (fiber-optic cables) along with the wires that carry electrons. West disagreed and filed suit, seeking compensation.The Seventh Circuit affirmed that the use that Louisville and Charter have jointly made of the easement is permissible under Indiana law. The court cited 47 U.S.C. 541(a)(2), part of the Cable Communications Policy Act of 1984, which provides: Any franchise shall be construed to authorize the construction of a cable system over public rights-of-way, and through easements, which is within the area to be served by the cable system and which have been dedicated for compatible uses, except that in using such easements the cable operator shall ensure…. The court examined the language of the easement and stated: “At least the air rights have been “dedicated” to transmission, and a telecom cable is “compatible” with electric transmission. Both photons and electrons are in the electromagnetic spectrum.” View "West v. Charter Communications, Inc." on Justia Law

Winemaster founded PSI in 1985 and served as Chairman, President, and CEO. In 2011, PSI became a publicly-traded company. Winemaster and his brother were PSI’s majority shareholders. The company’s early SEC filings noted that PSI’s “internal controls over financial reporting” suffered from “material weakness.” In 2013, PSI’s per-share price rocketed from $16.18 to $75.10. In 2015, PSI began making disclosures; its auditor resigned, its share price plummeted, and the government began investigating. PSI had improperly recognized millions of dollars in revenue. Winemaster resigned. As a result of a purchase agreement and resignations, six of PSI’s seven current directors were unaffiliated with the company during the period of alleged misconduct. Winemaster was charged with criminal fraud.Lawsuits followed, including this derivative complaint on behalf of PSI, alleging fiduciary breach and unjust enrichment against certain officers and directors. The parties executed a settlement, with a monetary award of $1.875 million from PSI’s insurers; plaintiffs' counsel would get half. The balance was earmarked for expenses related to the government’s investigations. The settlement required the formal enactment of 17 corporate governance reforms. The plaintiffs agreed to a release against the individual defendants, including Winemaster. The court granted preliminary approval. In the meantime, state derivative actions were dismissed as duplicative. In federal court, the state plaintiff unsuccessfully objected to Winemaster's release, argued that the monetary component was insufficient, and claimed that the proposed governance reforms lacked substance. The Seventh Circuit affirmed final approval. The district court adequately considered the propriety of the settlement’s terms. View "McFadden v. Dorvit" on Justia Law

Flameproof, a distributor of fire retardant and treated lumber (FRT lumber), maintained liability insurance through Lexington, covering liability for "property damage” that is “caused by an occurrence that takes place in the coverage territory.” “Occurrence” is defined as “an accident, including continuous or repeated exposure to substantially the same general harmful conditions.” “Property damage” is “physical injury to tangible property, including all resulting loss of that property,” or loss of use of property that is not physically injured. Three lawsuits arose from Flameproof’s sale of lumber to Minnesota-based contractors. The contracts called for FRT lumber meeting the requirements of the International Building Code (IBC). The complaints alleged that Flameproof “unilaterally” decided to deliver its in-house FlameTech brand lumber, which purportedly was not IBC-compliant. After the material was installed, the owners discovered that the lumber was not IBC-certified. Flameproof “admitted” that it had shipped FlameTech lumber rather than the FRT lumber advertised on its website and ordered. The FlameTech lumber was removed and replaced, damaging the surrounding materials. The lawsuits alleged negligent misrepresentation, fraudulent misrepresentation, deceptive business practices, false advertising, consumer fraud, breach of warranties, and breach of contract. Lexington sought a ruling that it owed no duty to defend Flameproof. The Seventh Circuit affirmed summary judgment for Lexington. The underlying complaints do not allege an “occurrence”—or accident—as required to trigger Lexington’s duty to defend under the policy. View "Lexington Insurance Co. v. Chicago Flameproof & Wood Specialties Corp." on Justia Law

Meriyu, now 49 years old, is an Indonesian citizen who is of Chinese descent and of the Buddhist faith. She came to the U.S. in 2000 on a nonimmigrant visa. Meriyu claims she was prompted to leave by her mistreatment, based on her religion and ethnicity, and by violence in Indonesia. In 2002, charged with removability under 8 U.S.C. 1227(a)(1)(B), Meriyu sought relief from removal based on fear of persecution on account of race and religion. She was ordered removed after she failed to appear at a hearing; 14 years later, she moved to reopen the proceedings. Meriyu is married and has a 12-year-old child. She claims she did not appear because she had sustained injuries to her ankle and foot. The BIA upheld an IJ’s ruling that the motion was untimely and that she could not show a material change in country conditions since the hearing. Her two subsequent motions to reopen were also denied. The Seventh Circuit denied a petition for review. When compared to the 2003 conditions described in the State Department reports, current conditions in Indonesia do not reflect any “new threshold” of human rights abuses. Meriyu’s evidence did not suggest any prospect of persecution if she returned to Indonesia. View "Meriyu v. Barr" on Justia Law

While confined in the Cook County Jail, Koger accumulated books in his cell. Guards removed more than 30. Prisoners may not have more than three books or magazines at a time (excluding religious and legal materials). On remand, the judge granted the defendants summary judgment, holding that the policy is valid under the First Amendment and that it is irrelevant whether the guards asked Koger which books he wanted to keep or what the Jail did with the confiscated books.The Seventh Circuit affirmed in part. The court noted Cook County’s stated reasons for the policy: books can be used for coded messages among prisoners, making it necessary to leaf through pages when doing a property search; books may be used to hide drugs, weapons, and other forbidden items. Curtailing the need for labor-intensive searches is a good reason for limiting the number of books in a cell. The court remanded in part. Koger lost a possessory interest in the books but he did not automatically lose his property interest. He was entitled to sell or ship the books, or reclaim them after his confinement. In addition to ascertaining the Jail’s policy, the district court must decide what choices, if any, were offered to Koger concerning the excess books and what became of them. View "Koger v. Cook County" on Justia Law

The cause of Cory's 2006 death was undetermined. The police later reopened the investigation. A grand jury indicted her husband, Lovelace, an Illinois criminal defense lawyer. Lovelace's first trial resulted in a hung jury. In his 2017 retrial, a jury found him not guilty. In a suit against under 42 U.S.C. 1983, Lovelace claimed that the defendants fabricated evidence, coerced witnesses, and concealed exculpatory evidence. The case was assigned to Judge Myerscough. A year later, the case was reassigned to Judge Bruce. Months later, the plaintiffs successfully moved to disqualify Bruce. The case was reassigned back to Myerscough, who informed counsel about circumstances that might seem relevant to her impartiality, her usual practice. Myerscough's daughter had just been hired as an Exoneration Project attorney. The plaintiffs’ law firm funds the Project and donates the time of its attorneys. The plaintiffs’ attorney stated that she worked with the judge’s daughter at the Project but did not supervise her and was not responsible for her compensation. Screening was implemented. Myerscough had recently attended a fundraiser for Illinois Innocence Project, where her daughter previously worked. The fundraiser recognized “exonerees,” including Lovelace. Defendants unsuccessfully requested that Myerscough disqualify herself under 28 U.S.C. 455(a).The Seventh Circuit denied a mandamus petition. There was no reasonable question as to Myerscough’s impartiality; no “objective, disinterested observer” could “entertain a significant doubt that justice would be done” based on the fundraiser. Section 455(b) requires recusal only if a judge’s close relative is “acting as a lawyer in the proceeding” or is known “to have an interest that could be substantially affected.” Nothing beyond the bare fact of the daughter’s employment poses a risk of bias. View "Gibson v. Myerscough" on Justia Law

The plaintiffs (Sharif Pharmacy, J&S) were members of the Prime pharmacy network, which is owned, in part, by Blue Cross Blue Shield. Under Medicare, Medicaid, and private health insurance plans, many patients had significant financial incentives to buy their prescription drugs from pharmacies within the network. Prime terminated both plaintiffs from the network after audits uncovered invoicing irregularities. The plaintiffs claimed that their terminations from the Prime network violated the Sherman Act, 15 U.S.C. 1 and 2. Three customers joined the suit, having had to switch to different, less convenient pharmacies. The plaintiffs alleged that the audits were pretextual and that Prime really terminated their participation in its network to get rid of competition with Walgreens, with whom it had entered a joint venture. Prime sent letters to both pharmacies’ customers saying that Sharif and J&S would no longer accept their insurance and recommending that customers have their prescriptions filled at a nearby Walgreens. Prime also retained funds from both pharmacies as a result of the audits. The Seventh Circuit affirmed the dismissals of the cases by two district courts. The individual plaintiffs lacked standing. The pharmacy could not identify an appropriate geographic market where a defendant had or threatened to have monopoly power. View "Sharif Pharmacy Inc. v. Prime Therapeutics LLC" on Justia Law

In February 2010, AMS sent a fax advertisement to 11,422 different numbers from a recently acquired customer list. PHI filed a putative class action suit asserting that those faxes violated the Telephone Consumer Protection Act of 1991 (TCPA), 47 U.S.C. 227. The district court subsequently certified the proposed class, granted PHI’s motion for summary judgment on liability against AMS and its CEO, entered a nearly $6 million judgment, and approved a distribution plan for that judgment. The Seventh Circuit affirmed. AMS conceded that the fax in question was an advertisement that lacked any kind of disclaimer explaining how to opt-out of future faxes. AMS did not meet its burden of proving that it had prior express invitation or permission to send faxes; even if the company from which it obtained the customer list had express permission to send faxes, that permission is not transferrable under the TCPA. View "Physicians Healthsource, Inc. v. A-S Medication Solutions, LLC" on Justia Law

Defendants, commodities futures investors, maintained trading accounts with FCStone, a clearing firm that handled the confirmation, settlement, and delivery of transactions. In 2018, extraordinary volatility in the natural gas market wiped out the defendants’ account balances with FCStone, leaving some defendants in debt. The defendants alleged Commodity Exchange Act violations against FCStone and initiated arbitration proceedings before the Financial Industry Regulatory Authority (FINRA). FCStone sought a declaratory judgment, claiming the parties must arbitrate their disputes before the National Futures Association (NFA), and that FINRA lacks jurisdiction over the underlying disputes. The district court ruled for FCStone, ordered arbitration and designated an arbitration forum, then stayed the case to address related issues, including the arbitration venue. The Seventh Circuit dismissed an appeal for lack of jurisdiction under 28 U.S.C. 1291 or the Federal Arbitration Act, ” 9 U.S.C. 16(a)(3). The district court’s decisions were non-final and no exception to the rule of finality applies. The court rejected an argument that the order amounted to an injunction prohibiting FINRA arbitration. A pro‐arbitration decision, coupled with a stay (rather than a dismissal) of the suit, is not appealable. The court noted that the district court did not decide whether the parties’ arbitration agreements relinquished defendants’ purported rights to FINRA arbitration. View "INTL FCStone Financial Inc. v. Farmer" on Justia Law

Viamedia sued Comcast under the Sherman Act, 15 U.S.C. 2, for using its monopoly power in one service market (Interconnect) to exclude competition and gain monopoly power in another service market (advertising representation) in the Chicago, Detroit, and Hartford geographic markets. Interconnect services are cooperative selling arrangements for advertising through an “Interconnect” that enables retail cable television service providers to sell advertising targeted efficiently at regional audiences. Advertising representation services assist those providers with the sale and delivery of national, regional, and local advertising slots. Viamedia’s evidence indicated Comcast used its monopoly power over the Interconnect to force its smaller retail cable television competitors to stop doing business with Viamedia; Viamedia’s customers for advertising representation (Comcast’s retail cable competitors) switched to Comcast because Comcast presented a choice: either start buying advertising representation services from us and regain access to the Interconnect or keep buying services from Viamedia and stay cut off from the Interconnect they needed to compete effectively. The strategy cost Comcast millions of dollars in the short run but eventually gave it monopoly power in these local markets for advertising representation services.The Seventh Circuit reversed the dismissal of Viamedia’s case. Giving Viamedia the benefit of its allegations and evidence, this is not a case in which Section 2 is being misused to protect weaker competitors rather than competition more generally. Viamedia has also adequately stated a claim that Comcast has unlawfully refused to deal with Viamedia and any cable competitor that bought advertising representation from Viamedia. View "Viamedia, Inc. v. Comcast Corp." on Justia Law