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

The patent for Lexapro, an anti-depressant, was expiring, creating a potentially lucrative opportunity to sell a generic version, escitalopram. BioPharm, a generic drug manufacturer, and Antrim planned to sign an updated version of the terms for a previous venture, but never signed a contract for the escitalopram venture. The FDA approved Antrim’s Abbreviated New Drug Application for escitalopram. Bio-Pharm manufactured the first batch but never shipped it to Antrim because the companies never signed a new agreement. Antrim sued Bio-Pharm for breaching an oral contract. Bio-Pharm counterclaimed, arguing promissory estoppel or breach of the claimed oral contract. Antrim unsuccessfully argued the court should preclude testimony by Bio-Pharm’s expert on how the FDA regulates ANDA holders. BioPharm successfully argued the court should preclude testimony by Antrim’s expert on industry practices and how Bio-Pharm’s alleged breach impaired the value of Antrim’s business. The court rejected Antrim’s proposed Jury Instruction that under FDA policy an ANDA holder owns the product underlying that ANDA and denied Antrim’s motion to bar Bio-Pharm from requesting lost profits in its counterclaim, despite missing the Rule 26(a)(1) disclosure deadline.A jury ruled in favor of Bio-Pharm on Antrim’s claim and in favor of Antrim on Bio-Pharm’s counterclaim. Neither party was awarded damages. The Seventh Circuit affirmed, rejecting Antrim’s challenges to the jury instructions, evidentiary rulings, and allowing Bio-Pharm to request lost profits. View "Antrim Pharmaceuticals LLC v. Bio-Pharm, Inc." on Justia Law

Phillips injured his ribs while playing with his grandchildren. For two weeks, he called his employer, United, to report he would miss work. Phillips stopped calling in and did not appear for work on three consecutive days so United fired him. He sued, alleging United failed to properly notify him of his rights under the Family Medical Leave Act (FMLA), 29 U.S.C. 2617, and that he was fired in retaliation for attempting to exercise his right to seek FMLA leave.The Seventh Circuit affirmed the rejection of the retaliation claim but remanded Phillips’s interference claim. A reasonable jury could find that Phillips’s injury constituted a serious health condition. If United failed to train its personnel to recognize FMLA-qualifying leave, that may factor into deciding whether Phillips provided sufficient notice of his need for leave. A jury must decide the factual question of whether the nature and amount of information he conveyed put United on notice and required United to notify Phillips whether the leave would be designated as FMLA leave. His wife attested had Phillips known United offered FMLA leave, he would have taken it. Other than that, the record does not reflect whether Phillips would have acted differently had United provided the requisite information Even if Phillips engaged in a protected activity and United took adverse employment action against him, Phillips failed to establish any causal connection between his alleged attempt to seek FMLA relief and his discharge. View "Lutes v. United Trailers, Inc." on Justia Law

Jacobsen’s former wife, Lemmens, embezzled $400,000 from her employer, income that was not reported on the couple’s jointly filed income taxes. After Lemmens was convicted, the IRS audited the couple’s joint tax returns for 2010 and 2011 and proposed total net adjustments attributable to omitted embezzlement income of over $300,000, with corresponding deficiencies and accuracy-related penalties of over $150,000. Jacobsen sought relief under the tax code’s “innocent spouse” provision, 26 U.S.C. 6015(b), and equitable relief provision, section 6015(f). The Tax Court granted Jacobsen innocent spouse relief for 2010 but denied all relief for 2011. The Seventh Circuit affirmed. Jacobsen acknowledged that with the exception of his knowledge for 2011, the Tax Court correctly assessed the positive, negative, or neutral impact of each of the seven factors listed in Revenue Procedure 2013-34 and acknowledged that he had “reason to know” of the embezzlement income by the time he filed their 2011 tax return. He argued that the Tax Court erred when it concluded that he had actual knowledge of the unreported income for 2011. While the Tax Court could have easily decided that Jacobsen was entitled to equitable relief, nothing in the record indicates the Tax Court misapprehended the weight to be accorded Jacobsen’s knowledge or treated it as a decisive factor barring relief. View "Jacobsen v. Commissioner of Internal Revenue" on Justia Law

As a result of a 2009 stroke, Perry, serving a long sentence for murder, suffers from aphasia, which impairs his ability to speak, write, and understand words. Perry pursued direct and collateral review in Indiana’s courts. On collateral attack, an appointed lawyer abandoned the case. Five months after dismissing the state proceeding in order to obtain assistance, he refiled it. The state judge dismissed the renewed application, ruling that the original dismissal was with prejudice. Perry then filed a federal petition under 28 U.S.C. 2254, which was summarily dismissed as untimely. Time during which a properly-filed state collateral attack is pending is excluded from the one year available to file in federal court, 28 U.S.C. 2244(d)(2), but the federal judge determined that Perry’s second state proceeding was not properly filed because a second or successive collateral attack in Indiana requires judicial permission that Perry did not seek. The court declined to apply equitable tolling: Perry displayed all of the diligence needed for tolling but did not encounter any extraordinary circumstance that blocked timely filing because aphasia is not an “external” obstacle, The Seventh Circuit vacated. The record does not permit a determination of whether Perry’s difficulties stem from a brain injury that left him unable to understand or use language well enough to protect his interests or from his failure to do enough legal research to understand which time in state court would be excluded under section 2244(d)(2). View "Perry v. Brown" on Justia Law

Grayson does business under the name Gire Roofing. Grayson and Edwin Gire were indicted for visa fraud, 18 U.S.C. 1546 and harboring and employing unauthorized aliens, 8 U.S.C. 1324(a)(1)(A)(iii). On paper, Gire had no relationship to Grayson as a corporate entity. He was not a stockholder, officer, or an employee. He managed the roofing (Grayson’s sole business), as he had under the Gire Roofing name for more than 20 years. The corporate papers identified Grayson’s president and sole stockholder as Young, Gire’s girlfriend. Gire, his attorney, and the government all represented to the district court that Gire was Grayson’s president. The court permitted Gire to plead guilty on his and Grayson’s behalf. Joint counsel represented both defendants during a trial that resulted in their convictions and a finding that Grayson’s headquarters was forfeitable. Despite obtaining separate counsel before sentencing, neither Grayson nor Young ever complained about Gire’s or prior counsel’s representations. Neither did Grayson object to the indictment, the plea colloquy, or the finding that Grayson had used its headquarters for harboring unauthorized aliens.The Seventh Circuit affirmed. Although Grayson identified numerous potential errors in the proceedings none are cause for reversal. Grayson has not shown that it was deprived of any right to effective assistance of counsel that it may have had and has not demonstrated that the court plainly erred in accepting the guilty plea. The evidence is sufficient to hold Grayson vicariously liable for Gire’s crimes. View "United States v. Grayson Enterprises, Inc." on Justia Law

Under the Medicaid program, 42 U.S.C. 1396, states must ensure that certain medical assistance is available to all eligible beneficiaries. Illinois administers its Medicaid program through HFS. For managed care programs, HFS contracts with Medicaid managed care organizations (MCOs), which a flat monthly fee per patient. The MCOs pay providers for services rendered to Medicaid beneficiaries. Plaintiffs, consultants who offer business services to Illinois nursing homes and supportive living facilities, sued on behalf of a class of nursing home residents entitled to Medicaid benefits, alleging violations of Title XIX of the Social Security Act, the Americans with Disabilities Act, the Rehabilitation Act, and the Due Process and Equal Protection Clauses. They alleged that the MCOs failed to process timely payments for claims submitted by nursing homes—the plaintiff‐consultants’ clients—to the MCOs, putting the resident‐beneficiaries at risk of being discharged from the facilities. The Seventh Circuit affirmed the dismissal of the case for lack of subject matter jurisdiction. The regulation cited by plaintiffs does not permit authorized representatives to bring civil lawsuits on behalf of Medicaid beneficiaries so the plaintiffs lacked standing. The residents would be unlikely to benefit if the plaintiffs won; they apparently filed suit in an effort to push the state to pay outstanding bills owed to the consultants’ clients. View "Bria Health Services, LLC v. Eagleson" on Justia Law

Two men entered a Sprint store with a gun, threatened and zip‐tied all witnesses, grabbed merchandise, and fled the store in two vehicles. Williams, a getaway driver, was indicted for obstruction of commerce by robbery, 18 U.S.C. 1951. Judge Bruce presided over his jury trial. Williams was convicted. Months later, it became public that Judge Bruce had engaged in ex parte communications with members of the U.S. Attorney’s Office. All criminal cases assigned to Judge Bruce were reassigned. Judge Darrow presided over Williams's sentencing hearing and sentenced him to 180 months’ imprisonment. The Seventh Circuit affirmed. Judge Bruce did not violate Williams’s due process rights on these facts. Although Judge Bruce’s conduct created an appearance of impropriety violating the federal recusal statute, there is no evidence of actual bias in this case to justify a new trial. Williams does not qualify as a career offender, but the district court’s finding otherwise was not plain error. Judge Darrow thoroughly considered the section 3553(a) factors, made clear that she would impose the same sentence even if the career offender provision did not apply, and explained her reasons for that position. There was sufficient evidence regarding the use of a firearm;Al the district court did not err in applying a firearm enhancement. View "United States v. Williams" on Justia Law

In 2011-2016, Collins was the executive director of the Kankakee Valley Park District. The Park District, which is not tax-exempt, works with the Kankakee Valley Park Foundation, which does have tax-exempt status and raises funds for Park District programs. Collins served as treasurer for the Foundation. It came to light that he had been lining his own pockets with the Park District and Foundation’s money. He pleaded guilty to mail and wire fraud, 18 U.S.C. 1341 and 1343, and was sentenced to concurrent terms of 42 months’ imprisonment, two-year terms of supervised release, and overall restitution of $194,383.51. The Seventh Circuit affirmed, concluding that the district court did not err in calculating his sentencing range and that Collins forfeited the right to complain about the restitution because he failed to file a timely notice of appeal from the district court’s amended judgment. The actual loss amount easily exceeded $150,000, which is the amount associated with a 10-level boost in the base guideline level for U.S.S.G. 2B1.1. More than a guilty plea is necessary before a district court ought to award a discount for acceptance of responsibility. The court fully supported its factual finding that Collins had not fully acknowledged his crimes. View "United States v. Collins" on Justia Law

In 2011 Wells Fargo entered into a loan and security agreement with hhgregg to provide the retailer with operating credit. Wells Fargo had a perfected first-priority, floating lien on nearly all of hhgregg’s assets. In 2017, hhgregg petitioned for Chapter 11 bankruptcy, owing Wells Fargo $66 million. Wells Fargo agreed to provide debtor-in-possession (DIP) financing in return for a priming, first-priority security interest on substantially all of hhgregg’s assets, including existing and after-acquired inventory and its proceeds. The bankruptcy judge approved the DIP financing agreement and the super-priority security interest. Whirlpool had long delivered home appliances to hhgregg on credit for resale. Three days after the approval of the DIP financing, Whirlpool sent a reclamation demand seeking the return of $16.3 million of unpaid inventory delivered during 45 days before the petition date and filed an adversary complaint, seeking a declaration that its reclamation claim was first in priority as to the reclaimed goods. Reorganization proved unsuccessful. The bankruptcy judge authorized hhgregg to sell its inventory—including the Whirlpool goods—in going-out-of-business sales and entered summary judgment for Wells Fargo.The Seventh Circuit affirmed. Reclamation is a limited remedy that permits a seller to recover possession of goods delivered to an insolvent purchaser, subject to significant restrictions, 11 U.S.C. 546(c). A seller’s right to reclaim goods is “subject to the prior rights of a holder of a security interest in such goods or the proceeds thereof.” Whirlpool’s later-in-time reclamation demand is “subject to” Wells Fargo’s prior rights as a secured creditor; its reclamation claim is subordinate to the DIP financing lien. View "Whirlpool Corp. v. Wells Fargo Bank, N.A." on Justia Law

A supplier hired Guzman-Ramirez and Gonzalez to import cocaine into Wisconsin. Gonzalez was to haul the cocaine to Chicago. Guzman-Ramirez would help remove the cocaine from a hidden compartment and, with assistance, bring half of the cocaine to Milwaukee and store it at Guzman-Ramirez’s house or auto-body shop. The supplier asked another associate (a DEA informant) to assist. During the Chicago meeting, Guzman-Ramirez expressed familiarity with the amount of cocaine and how the secret compartment worked. Because of complications, Guzman-Ramirez returned to Milwaukee without the drugs. The next day, officers searched the semi-trailer and removed 50.12 kilograms of cocaine.Guzman-Ramirez pled guilty to conspiracy to possess with intent to distribute five kilograms or more of cocaine, 21 U.S.C. 841(a)(1), 846. Gonzalez also pled guilty. A probation officer concluded that Guzman-Ramirez did not have an aggravating role in the conspiracy but that his role was significant. Guzman-Ramirez unsuccessfully sought a two-level reduction because he agreed only to transport and store the drugs and had no decision-making authority. Applying the safety-valve provisions (18 U.S.C. 3553(f)) resulted in a guidelines range of 87-108 months’ imprisonment; the court imposed a sentence of 72 months. A different judge sentenced Gonzalez to 48 months. The Seventh Circuit affirmed, rejecting arguments that the court should have applied a minor-role adjustment and that, compared to his coconspirator’s sentence, Guzman-Ramirez’s sentence was unreasonable. The court was not required to consider a sentence that had not yet been imposed. View "United States v. Guzman-Ramirez" on Justia Law