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

Paz defaulted on a $695 credit card debt. PRA, a debt collector, purchased the debt and attempted to collect but violated the Fair Debt Collection Practices Act by failing to report that Paz disputed the debt. Paz filed suit in June 2014. PRA invoked FRCP 68, offering to eliminate the debt and pay Paz $1,001 plus reasonable attorneys’ fees and costs as “agreed ... and if no agreement can be made, to be determined by the Court.” The agreement stated that “[t]his … is not to be construed as an admission that ... Plaintiff has suffered any damage.” Paz accepted PRA’s offer. Counsel agreed to attorneys’ fees of $4,500. PRA nonetheless continued to report Paz’s debt to credit reporting agencies, even confirming its validity in response to inquiries. Paz filed another lawsuit and unsuccessfully attempted to add class claims. PRA again invoked Rule 68, offering $3,501 on the same terms as the first settlement. Paz never responded. The court limited the claims allowed to go to trial. Days before trial, PRA offered Paz $25,000 plus attorneys’ fees and costs. Paz rejected the offer. A jury found for Paz but determined that Paz had sustained no actual damages, so his recovery was limited to $1,000 in statutory damages for his FDCPA claim. Paz sought $187,410 in attorneys’ fees and $2,744 in costs, 15 U.S.C. 1692(k)(a)(3). The Seventh Circuit affirmed an award of $10,875, reasoning that Paz’s rejection of meaningful settlement offers precluded a fee award so disproportionate to his recovery. View "Paz v. Portfolio Recovery Associates, LLC" on Justia Law

Fort Wayne Officer Hartman and others responded to an ongoing armed robbery at a Dollar General store, knowing that there had been several armed robberies at area Dollar General stores: two men would enter the store, display handguns, restrain employees, wait for the registers to open, and depart after collecting cash, cigarettes, and employees’ cell phones. Hartman crouched 10-15 feet from the store’s entrance; shelving blocked his view. Other officers positioned themselves beside the entrance. Officers at the back of the store radioed that suspects started to try to escape out the back but then retreated into the store. Video recordings from patrol cars show Hartman approaching the entrance as two men appeared. Johnson ran out of the entrance. Officers shouted to the suspects to get down. Hartman started to run toward Johnson, but then turned to Gant standing in the doorway with his left arm extended, holding the door open. Hartman fired two shots, striking Gant in the abdomen. Hartman believed Gant was preparing to shoot. Gant actually had not been holding anything in his hand. Gant pleaded guilty to armed robbery and filed a 42 U.S.C. 1983 excessive force action. The court granted summary judgment of qualified immunity for all defendants except Hartman, finding that a reasonable juror could conclude that Gant was obeying Hartman’s commands or did not have the opportunity to obey. The Seventh Circuit dismissed an appeal for lack of jurisdiction. Hartman’s argument is inseparable from the disputed facts identified by the district court. View "Gant v. Hartman" on Justia Law

Collins pleaded guilty to distributing cocaine and crack cocaine, 21 U.S.C. 841(a)(1). Because of a prior felony drug conviction, he faced a statutory minimum of ten years in prison, unless he qualified for the “safety valve,” 18 U.S.C. 3553(f)(5). On remand, the district court again determined that Collins did not qualify for the safety valve. The court focused on a statement in his proffer interview that he intended to use $40,000 cash found in his car at the time of his arrest, at least $15,000 of which were cocaine sales proceeds, to purchase a new car. Doubting the veracity of that claim, the court concluded that Collins had not established that he had “truthfully provided to the Government all information and evidence the defendant has concerning the offense or offenses that were part of the same course of conduct or of a common scheme or plan,” 18 U.S.C. 3553(f)(5). The Seventh Circuit affirmed. Although Collins provided ample correct information about his offenses, the court weighed the record and concluded that Collins had not established his eligibility because his explanations about the cash were not credible. This conclusion was not clearly erroneous. It was a difficult decision on disputed facts. View "United States v. Collins" on Justia Law

Milwaukee officers were patrolling an area known for drug trafficking, armed robberies, and gun violence. Around midnight, they saw Richmond walking toward them with his right hand in the “kangaroo” pocket on his T-shirt and saw “a significant bulge” in that pocket. After the officers passed Richmond in their marked squad, he changed direction, quickened his pace, crossed a lawn, and moved toward a front porch. Unknown to the officers, Richmond lived in the duplex. The officers parked, followed Richmond and, from 20-25 feet away, saw Richmond open the outer screen door, bend down, and place an object on the doorframe between the screen door and front door. They suspected Richmond hid a gun. Richmond closed the screen door and turned around. Richmond stated that he did not have a gun. Officers walked onto the porch, opened the screen door, and saw a handgun. Richmond confirmed he was a convicted felon, so they arrested and charged him under 18 U.S.C. 922(g)(1). The Seventh Circuit affirmed the denial of a motion to suppress. The officers knew specific, articulable facts which, together, fostered their reasonable suspicion of “criminal activity.” Police may search an area strictly limited to that necessary for the discovery of weapons if they have a reasonable and articulable suspicion that the investigation's subject may be able to gain access to a weapon to harm officers or others nearby. View "United States v. Richmond" on Justia Law

Dr. Sheth, a cardiologist, admitted in a plea agreement that he engaged in a scheme to overbill government and private insurers by approximately $13 million, in violation of 18 U.S.C. 1347. The scheme resulted in a loss to Medicare of about $9 million in payments for services Sheth did not render between 2002 and 2007, and a loss of about $4 million to private healthcare insurers for the same conduct. After the government detected the fraud, in June 2007, it initiated an administrative proceeding and seized funds from four Harris Bank accounts that the government believed were the proceeds of Sheth’s fraud. In his plea, Sheth agreed to forfeit $13 million in assets; the government would apply the proceeds of the forfeited property to any restitution judgment resulting from his conviction. Sheth disputed the valuation of some of the property applied to the restitution judgment. The Seventh Circuit affirmed the district court’s decision as to the valuation of Seth’s real property but remanded for consideration of the application of $225,000 in interest that had accrued on the Harris accounts to the restitution judgment. View "United States v. Sheth" on Justia Law

Sparre began working as a Norfolk locomotive engineer in 1999. In 2010, he reported a safety violation to the Federal Railroad Administration, which resulted in the assessment of an $8,000 civil penalty against Norfolk. In 2014, Norfolk terminated Sparre for excessively exceeding the speed limit while operating a locomotive. Sparre complained to the Occupational Safety and Health Administration, alleging Norfolk fired him in retaliation for reporting the safety concern in 2010, which would violate the Federal Railroad Safety Act, 49 U.S.C. 20109. OSHA dismissed Sparre’s complaint as without merit. Sparre requested a hearing before an administrative law judge. The parties engaged in years‐long, extensive discovery. In November 2017, the ALJ found there were no genuine issues of fact and granted Norfolk a summary decision. The decision, with instructions to petition for review, including the 14‐day timeline, was mailed to Sparre and his attorneys that same day. Thirty days later, Sparre appealed to the Board and filed a petition for judicial review. The Seventh Circuit remanded to the Board, which found that Sparre’s petition was untimely and he was not entitled to equitable tolling. Sparre filed a second appeal. The Seventh Circuit rejected the appeal for lack of jurisdiction. Sparre failed to timely exhaust his administrative remedies before appealing. View "Sparre v. United States Department of Labor" on Justia Law

Villa, a citizen of Mexico, originally entered the U.S. in 1988 without inspection. He adjusted his status to that of a lawful permanent resident in 1995. Approximately nine years later, he was convicted of possession of cocaine and sentenced to a year in prison. In 2005, the Department of Homeland Security (DHS) initiated removal proceedings under 8 U.S.C. 1227(a)(2)(A)(iii) because he had been convicted of an aggravated felony. The Notice listed an address for the hearing “on a date to be set,” and “at a time to be set.” The Immigration Court later served on him a Notice of the date and time. He appeared; the immigration judge entered an order of removal. Villa waived his right to appeal and was removed to Mexico. He reentered the U.S. sometime in 2007, on foot at an unspecified location. In 2018, DHS served him with a Notice of Intent/Decision to Reinstate Prior Order of Removal, 8 U.S.C. 1231(a)(5), which stated that Villa could contest the determination that he was removable under the prior order by oral or written statement but that he was not entitled to a hearing. The Seventh Circuit dismissed his petition for review for lack of jurisdiction, rejecting an argument that the 2005 Order was void because it was entered ultra vires and that the 2005 proceedings were never properly initiated because the original “Notice” was legally deficient. View "Serrano v. Barr" on Justia Law

In 2011 Caterpillar made serious inquiries about the possible acquisition of a Chinese mining company and its wholly‐owned subsidiary (Siwei). Caterpillar completed that acquisition in June 2012. Only after the closing did Caterpillar gain access to Siwei’s physical inventory and find that Siwei had overstated its profits and improperly recognized revenue. Caterpillar took a $580 million goodwill impairment charge just months after the acquisition. Plaintiffs, Caterpillar shareholders, filed a shareholder derivative suit alleging that several former Caterpillar officers breached their fiduciary duties by failing to conduct an adequate investigation of the Siwei acquisition, which caused Caterpillar’s loss. They made an unsuccessful demand that the Caterpillar Board bring the litigation. The district court dismissed the complaint for failure adequately to allege that the Board wrongfully refused to pursue the Plaintiffs’ claim. The Seventh Circuit affirmed. The Board’s decision not to litigate was protected by the “wide bounds of the business judgment rule.” The plaintiffs might come to a different conclusion about the strategic importance of the acquisition, the risk that litigation might cause disruption and excessive cost for Caterpillar, or the need to interview Siwei’s former CEO, but those types of business and investigative choices are exactly what the business judgment rule protects. View "Lowinger v. Oberhelman" on Justia Law

Lopez-Aguilar went to the Indianapolis Marion County Courthouse for a hearing on a misdemeanor complaint charging him with driving without a license. Officers of the Sheriff’s Department informed him that an ICE officer had come to the courthouse earlier that day looking for him. He alleges that Sergeant Davis took him into custody. Later that day, Lopez-Aguilar appeared in traffic court and resolved his misdemeanor charge with no sentence of incarceration. Sergeant Davis nevertheless took Lopez-Aguilar into custody. He was transferred to ICE the next day. Neither federal nor state authorities charged Lopez-Aguilar with a crime; he did not appear before a judicial officer. ICE subsequently released him on his own recognizance. An unspecified “immigration case” against Lopez-Aguilar was pending when he sued county officials under 42 U.S.C. 1983. Following discovery, the parties settled the case. The district court approved the Stipulated Judgment over the objection of the federal government and denied Indiana’s motion to intervene to appeal. The Seventh Circuit reversed. The state’s motion to intervene was timely and fulfilled the necessary conditions for intervention of right. The district court was without jurisdiction to enter prospective injunctive relief. The Stipulated Judgment interferes directly and substantially with the use of state police power to cooperate with the federal government in the enforcement of immigration laws. View "Lopez-Aguilar v. Indiana" on Justia Law

The district court found that Spectrum violated the Consumer Product Safety Act, 15 U.S.C. 2064(b)(3), when its subsidiary failed to timely report to the government a potentially hazardous defect in its Black & Decker SpaceMaker coffeemaker. In 2009, there were multiple complaints that the plastic handle on the coffeemaker’s carafe had broken. In one instance, the handle's failure caused a consumer to suffer a burn from the hot coffee in the carafe. Spectrum ordered design changes, but continued to sell the product and did not file a section 15(b) report with the Commission until April 2012. The court entered a permanent injunction, requiring Spectrum to adhere to its newly-implemented CPSA compliance practices and to retain an independent consultant to recommend additional modifications to those practices. The Seventh Circuit affirmed, rejecting Spectrum’s argument that the late-reporting claim was barred by the statute of limitations and that the court abused its discretion in awarding permanent injunctive relief, including the requirement that it engage the expert. Spectrum’s failure to report constituted a continuing violation that did not end until Spectrum finally submitted a report; the statute of limitations did not begin to run until 2012. Given the gravity of its failures and the delay in compliance, the district court justifiably concluded that there was a reasonable likelihood that Spectrum might again commit similar violations in the future. View "United States v. Spectrum Brands, Inc." on Justia Law