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

Kelerchian was a licensed firearms dealer. His co-conspirators were Kumstar, the Deputy Chief of the Lake County, Indiana, Sheriff’s Department, and Slusser, a patrolman who was the armorer for the department’s SWAT team. The trio defrauded firearms manufacturer H&K and the laser sight producer Insight into selling them machine-guns and laser sights restricted to law enforcement and military use. After many fraudulent transactions, the three were indicted. Kumstar and Slusser pleaded guilty. Kelerchian was convicted on four counts of conspiracy and four counts of making false writings. The Seventh Circuit affirmed. A machine-gun counts as a firearm for purposes of 18 U.S.C. 924, so Kelerchian was properly charged with conspiracy to violate the Act by submitting documents falsely telling H&K that the buyer of all the machineguns would be the Lake County Sheriff’s Department. Kelerchian was properly charged with a violation of 18 U.S.C. 371. There was sufficient evidence to prove the charges involving the “demonstration letters” that enabled Kelerchian to buy machine-guns for his personal collection and the money-laundering conspiracy charge. The court rejected challenges to jury instructions and a claim of “constructive amendment” of the indictment. View "United States v. Kelerchian" on Justia Law

Janusiak called 911 to report that Payten, a friend’s baby in her care, was not breathing. Paramedics took Payten to the hospital while officers talked to Janusiak. The police returned about eight hours later, and Janusiak, then eight months pregnant, agreed to go to the police station for an interview. Police questioned her about Payten’s death for about seven hours. Toward the end of the interrogation, Janusiak made statements about what happened to Payten that were used to impeach her testimony at trial. After Peyten died Janusiak was convicted of first‐degree intentional homicide. On direct appeal, Wisconsin courts rejected her argument that statements she made during the interrogation were involuntary and should have been suppressed. The Seventh Circuit affirmed the denial of her petition for habeas corpus relief, 28 U.S.C. 2254. The court rejected Janusiak’s arguments that her statements were coerced by comments that law enforcement made to her about keeping access to her children, the length and other features of the interrogation, and her vulnerability as a pregnant woman and mother. The state appellate court reasonably applied the correct standard to determine that Janusiak’s statements were voluntary. View "Janusiak v. Cooper" on Justia Law

For two years, Alliance was unable to obtain a license from the Indiana State Department of Health to open a South Bend clinic to provide medication abortion care. After two unsuccessful applications, a statutory amendment, and a “moving target of wide-ranging requests for information,” Alliance concluded that its attempts were futile and sought a preliminary injunction. The district court granted preliminary relief, holding that Alliance has shown a likelihood of success on the merits of its claim that Indiana’s requirement of licensure for clinics that provide only medication abortions (induced exclusively by taking pills), as applied to Alliance's clinic, violates the Due Process and the Equal Protection Clauses.The Seventh Circuit held that the district court’s broad condemnation of Indiana’s licensing scheme runs contrary to Supreme Court precedent. While this litigation is pending, the state may, for the most part, administer that system. The court expressed concerns about the handling of Alliance’s application. Indiana may use licensing as a legitimate means of vetting and monitoring providers, but, to the extent that Indiana is using its licensing scheme to prevent the South Bend clinic from opening simply to block access to pre-viability abortions, it is acting unconstitutionally. The district court must modify the injunction to instruct Indiana to treat the Alliance’s South Bend facility as though it were provisionally licensed. View "Whole Woman's Health Alliance v. Hill" on Justia Law

Brown is the sole owner and operator of a credit-monitoring service. Brown’s websites used a “negative option feature” to attract customers, offering a “free credit report and score” while obscuring in much smaller text that applying for this “free” information automatically enrolled customers in a $29.94 monthly “membership” subscription for Brown’s credit-monitoring service. Customers learned this information only when he sent them a letter after they were automatically enrolled. Brown’s most successful contractor capitalized on the confusion by posting Craigslist advertisements for fake rental properties and telling applicants to get a “free” credit score from Brown’s websites. The FRC sued Brown under the Federal Trade Commission Act, 15 U.S.C. 53(b). The district judge found that Brown was a principal for his contractor’s fraudulent scheme and that the websites failed to meet certain disclosure requirements in the Restore Online Shopper Confidence Act (ROSCA), 15 U.S.C. 8403. The judge entered a permanent injunction and ordered Brown to pay more than $5 million in restitution to the Commission. The Seventh Circuit affirmed as to liability and the issuance of a permanent injunction but, overruling precedent, vacated the restitution award. Section 13(b) authorizes only restraining orders and injunctions. The FTCA has two detailed remedial provisions that expressly authorize restitution if the Commission follows certain procedures. Adherence yp stare decisis should not allow the Commission to circumvent these elaborate enforcement provisions. View "Federal Trade Commission v. Credit Bureau Center, LLC" on Justia Law

U.S. Customs Officer Parra spent December 8, 2010 “cracking open containers” at a warehouse near the Los Angeles seaport. Opening one from South Korea to inspect its freight, Parra found a fully assembled, five-foot-tall industrial turbo blower. A placard riveted to the side read, “Assembled in USA.” The discovery led to a federal investigation that traced back to Lee. Prosecutors charged Lee with executing a scheme to defraud local governments by falsely representing that his company manufactured its turbo blowers in the U.S. The Seventh Circuit affirmed his wire fraud convictions, reasoning that Lee’s misrepresentations were material under the American Recovery and Reinvestment Act, 123 Stat. 115 (2009), which includes a “Buy American” provision. The evidence adequately supports Lee’s participation in a scheme to defraud and his intent to do so. Lee used interstate wires as a part of that scheme. The indictment afforded Lee ample notice of the case the government presented at trial and included specific details of the crimes alleged to avoid double jeopardy risk; no impermissible constructive amendment or variance occurred. The court also upheld Lee’s smuggling convictions under 18 U.S.C. 545. The mislabeling served an important function in Lee’s broader scheme to deceive customers about the origin of the turbo blowers. View "United States v. Lee" on Justia Law

Simon was stopped for failing to signal sufficiently ahead of turning. A drug-sniffing dog alerted on Simon’s car. Officers searched it. They did not find drugs, but found a gun. The government charged Simon as a felon-in-possession. The Seventh Circuit affirmed the denial of Simon’s motions for recusal, suppression, and supplementation. The court rejected an argument that the judge should have recused himself because, before he was a judge, he supervised a prior prosecution of Simon. The district court properly assessed credibility and found that the officers had probable cause to initiate the traffic stop and did not prolong the stop to allow for the dog sniff. The mere absence of drugs does not undermine the probable cause to search for drugs, provided there was probable cause in the first place. The judge conducted the proper Harris evaluation and concluded the dog’s satisfactory certification and training provide sufficient reason to trust his alert. The judge did not abuse his discretion in denying a motion to supplement the record, after the denial of the suppression motion, with a nighttime video. The nighttime video would not capture the actual visual capabilities of the officers, who credibly testified about how close Simon was to the intersection when he signaled. View "United States v. Simon" on Justia Law

Sullivan, a graphic design artist, produced 33 illustrations for Flora, an herbal supplement company, to use in two advertising campaigns. Upon noticing that Flora was using the illustrations in other ads, Sullivan brought suit for copyright infringement and opted to pursue statutory damages to maximize her potential payout by classifying each of her 33 illustrations as “one work” within the meaning of section 504(c)(1) of the Copyright Act. Flora argued that the illustrations were part of two broader compilations. The district court instructed the jury that Sullivan could recover separate awards of statutory damages for 33 acts of infringement on 33 separate illustrations. The jury returned a statutory damages award of $3.6 million. The Seventh Circuit vacated. The district court committed error in permitting separate awards of statutory damages unaccompanied by any finding that each or any of the 33 illustrations constituted “one work” within the meaning and protection of section 504(c)(1). View "Sullivan v. Flora, Inc." on Justia Law

During his probationary employment period, Smith challenged and failed to follow directions, was confrontational, engaged in unsafe conduct, and received unsatisfactory evaluations. He filed internal and union complaints, alleging abusive language, docking his hours, and racial discrimination. The Illinois Department of Transportation discharged Smith. Smith sued the Department under Title VII, arguing that it had subjected him to a hostile work environment and fired him in retaliation for his complaints about racial discrimination. The district court granted the Department summary judgment. The Seventh Circuit affirmed. The district court was within its discretion in concluding that Smith’s expert witness testimony was inadmissible as not based on “sufficient facts or data” under Federal Rule of Evidence 702(b). An affidavit sworn by one of Smith’s supervisors was inadmissible because it lacked a proper foundation and was “replete with generalized assertions." Given the extensive evidence that Smith was not meeting his employer’s legitimate expectations, a reasonable jury could not find that the Department fired him because of his protected activity rather than for his poor performance nor could a reasonable jury have resolved the hostile work environment claim in Smith’s favor. View "Smith v. Illinois Department of Transportation" on Justia Law

Hopper, part of a community of methamphetamine users and sellers in southern Illinois, was charged with conspiracy to distribute methamphetamine, 21 U.S.C. 841(a)(1), 841(b)(1)(B), 846 and 18 U.S.C. 2. Several charged individuals signed proffer letters, agreeing to provide testimony against Hopper in exchange for leniency. At Hopper’s trial, the government presented the testimony of approximately 20 witnesses. The court denied Hopper’s motion for disclosure of the proffer letters. The jury found that the conspiracy involved an amount of 50 grams or more. Based on interviews with other conspiracy participants, the probation officer determined that Hopper’s relevant conduct involved 1.968 kilograms of ice methamphetamine. The court applied a two-level sentence enhancement for maintaining a residence for the purpose of distributing methamphetamine; calculated a guidelines imprisonment range of 235-293 months; and sentenced Hopper to 235 months. The Seventh Circuit affirmed. The district court did not err when it denied Hopper’s motion for disclosure of the proffer letters and properly concluded that Hopper was subject to the two-level sentence enhancement. However, the court plainly erred when it calculated Hopper’s relevant conduct and corresponding guidelines range. In their separate interviews, two witnesses were describing the same transactions. By including the amounts described by both in the calculation of Hopper’s relevant conduct, the presentence report erroneously double-counted those drug quantities. View "United States v. Hopper" on Justia Law

Plaintiffs own cats with health problems. Their veterinarians prescribed Hill’s cat food. They purchased this higher-priced cat food from PetSmart stores using their veterinarian’s prescriptions before learning that the Prescription Diet cat food is not materially different from non-prescription cat food and no prescription is necessary. Plaintiffs filed a class-action lawsuit under the Illinois Consumer Fraud and Deceptive Business Practices Act. The district judge dismissed the claim as lacking the specificity required for a fraud claim and barred by a statutory safe harbor for conduct specifically authorized by a regulatory body (the FDA). The Seventh Circuit reversed. The safe-harbor provision does not apply. Under the Food, Drug, and Cosmetic Act, 21 U.S.C. 301, pet food intended to treat or prevent disease and marketed as such is considered a drug and requires FDA approval. Without FDA approval, the manufacturer may not sell it in interstate commerce and the product is deemed adulterated and misbranded. FDA guidance recognizes that most pet-food products in this category do not have the required approval and states that it is less likely to initiate an enforcement action if consumers purchase the food through or under the direction of a veterinarian (among other factors). The guidance does not specifically authorize the conduct alleged here, so the safe harbor does not apply. Plaintiffs pleaded the fraud claim with the particularity required by FRCP 9(b). View "Vanzant v. Hill's Pet Nutrition, Inc." on Justia Law