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

Edward Johnson filed for bankruptcy relief under Chapter 13 and made payments to the bankruptcy trustee, Marilyn O. Marshall, under his proposed repayment plan. However, the bankruptcy court never confirmed his plan due to his inability to address an outstanding loan and his domestic support obligations, and ultimately dismissed his case for unreasonable delay. Before returning Johnson's undisbursed payments, the trustee deducted a percentage fee as compensation. Johnson filed a motion requesting that the trustee disgorge her fee, which the bankruptcy court granted, reasoning that the trustee did not have statutory authority to deduct her fee because Johnson's plan was not confirmed. The trustee appealed this decision.The United States Court of Appeals for the Seventh Circuit reviewed the case de novo. The court analyzed the statutory text and agreed with the Ninth and Tenth Circuits that the United States Bankruptcy Code requires the Chapter 13 trustee to return her fee when the debtor's plan is not confirmed. The court found that neither of the two exceptions in § 1326(a)(2) of the Bankruptcy Code applied to the trustee's fee. The court also rejected the trustee's argument that § 1326(b) authorized her to keep her fee when making pre-confirmation adequate protection payments to creditors, as this provision only addresses payments made after a plan has been confirmed. The court further found that the trustee had no right to keep her fee under 28 U.S.C. § 586(e)(2), which only addresses the source of funds that may be accessed to pay standing trustee fees.The court concluded that the Chapter 13 trustee must return her fee when the debtor's plan is not confirmed, affirming the decision of the bankruptcy court. View "Marshall v. Johnson" on Justia Law

The case involves Asif Sayeed and three associated healthcare companies who were found liable for violating the Anti-Kickback Statute and False Claims Act, resulting in a nearly $6 million judgment. Sayeed owned a healthcare management company, Management Principles, Inc. (MPI), which managed two smaller companies that provided home-based medical services to Medicare recipients in Illinois. Sayeed's companies received a significant amount of their business from the Healthcare Consortium of Illinois. In December 2010, Sayeed devised a scheme to bypass the Consortium’s referral process by directly soliciting its clients for additional services. MPI signed a Management Services Agreement with the Consortium, which gave MPI full access to its clients’ healthcare data. MPI used this information to identify and directly solicit Medicare-eligible seniors who might want or need additional healthcare services.The district court held a bench trial in July 2019 and found that Sayeed and his companies had not violated the Anti-Kickback Statute or False Claims Act because they had paid the Consortium with the intent to obtain information, not patient referrals. The plaintiff appealed, and the court of appeals reversed the decision, concluding that the defendants' conduct qualified as a form of indirect referral giving rise to an unlawful kickback scheme.On remand, the district court found the defendants liable under both the Anti-Kickback Statute and False Claims Act. The court imposed $5,940,972.16 in damages, which it calculated by trebling the value of the Medicare claims it deemed false and then adding a per-claim penalty of $5,500. The defendants appealed, challenging both the damages award and the underlying finding of liability. The United States Court of Appeals for the Seventh Circuit affirmed the judgment of liability but reversed in part to permit the district court to clarify which Medicare claims, all or some, resulted from the defendants’ illegal kickback scheme. View "Stop Illinois Health Care Fraud, LLC v. Sayeed" on Justia Law

John Feeney, a convicted felon, was charged with unlawfully possessing two pistols and carrying explosives, specifically modified fireworks shells, during the commission of that felony. Feeney pleaded guilty to both offenses. During sentencing, the court and the parties disagreed on the applicable base offense level under the Sentencing Guidelines for Feeney’s conviction of being a felon in possession of a firearm. The court sided with the government and applied a higher base offense level to Feeney’s sentence.The district court calculated the total offense level for the firearm possession conviction to be 15, which combined with a criminal history category of IV, yielded a guideline range of 30 to 37 months of imprisonment. The court imposed a within-guidelines sentence of 30 months for the firearm possession offense and a mandatory consecutive sentence of 120 months for the offense of carrying explosives while committing a felony.Feeney appealed his sentence, arguing that the district court erred when it applied a base offense level of 18 under the Sentencing Guidelines instead of a base offense level of 14. He contended that the court's decision resulted in him being punished twice for the same conduct, which is prohibited by the Sentencing Guidelines.The United States Court of Appeals for the Seventh Circuit agreed with Feeney's interpretation of the relevant guideline and application note. The court found that the district court had erred in applying a higher base offense level based on Feeney's possession of an explosive. The court concluded that such an application constituted an "enhancement" prohibited by the Sentencing Guidelines, which aim to prevent duplicative punishment. The court vacated Feeney's sentence and remanded the case for resentencing. View "United States v. Feeney" on Justia Law

Scott and Gayla Moore, a married couple, claimed a tax credit under Section 41 of the Internal Revenue Code for research expenses for the 2014 and 2015 tax years. The Moores treated the salary and bonus of Gary Robert, the President and COO of Nevco, Inc., as Section 41 expenses. Nevco, a Subchapter S corporation, was solely owned by Gayla Moore, and thus all of its tax attributes flowed to her. The Moores argued that Robert spent a significant amount of time conducting or supervising research.The United States Tax Court held a trial and found that the record did not support the Moores' claim that Robert spent any given fraction of his time conducting or directly supervising "qualified" research. The court noted that Robert lacked written records of how he spent his time, which is a requirement under 26 C.F.R. §1.41–4(d). Furthermore, Robert could not estimate how much of his time was devoted to "qualified" research, as defined by Section 41(d)(1). The court also found that Robert did not engage in either "direct supervision" or "direct support" of Nevco’s director of engineering, whose salary the Commissioner of Internal Revenue was willing to treat as a "qualified research" expense.The United States Court of Appeals for the Seventh Circuit affirmed the Tax Court's decision. The Court of Appeals found that the Tax Court's inability to answer the questions of whether Robert's research was "qualified" and how much time he devoted to it was not a legal error, but a factual finding. The Court of Appeals reviewed this finding for clear error and found none. The Court of Appeals also noted that the Moores bore the burdens of production and persuasion, and thus the Tax Court's conclusion was dispositive against them. View "Moore v. Commissioner of Internal Revenue" on Justia Law

The case revolves around Denny Anderson, who was sentenced in 2012 for possessing a firearm as a felon, after shooting at a man and using racial slurs. The maximum penalty for the illegal-possession offense is typically 10 years, but the Armed Career Criminal Act (ACCA) mandates a 15-year minimum sentence for anyone with three prior convictions for a "violent felony." Anderson was sentenced to an agreed-upon term of 180 months (15 years) in prison. He was resentenced in 2021, following a successful habeas petition he filed in 2013. The government maintained that he was subject to a 15-year minimum sentence due to his prior convictions.The district court agreed that Anderson's convictions for burglary, robbery, and Florida aggravated assault qualified as violent felonies, triggering a 15-year minimum sentence. Anderson did not object to his designation as an armed career criminal. The court then resentenced him to 188 months in prison.The United States Court of Appeals for the Seventh Circuit reviewed the case and concluded that Anderson’s Florida conviction in 2001 is not a predicate violent felony and that the government may not substitute one of Anderson’s other prior convictions as an alternative predicate offense. Because Anderson does not have three predicate convictions, the ACCA enhancement was improper. The court vacated the judgment and remanded the case for resentencing. View "United States v. Anderson" on Justia Law

The case revolves around John Sabo, who was sentenced to a probation term that exceeded the maximum limit set by Wisconsin law. After his probation should have ended, he was imprisoned for violating its conditions. Sabo sued two groups of defendants under 42 U.S.C. § 1983: Sheri Hicks and Debra Haley, officials from the Wisconsin Department of Corrections who failed to correct his unlawful probation term, and Megan Erickson and Barb Hanson, the probation officers who enforced it. Sabo alleged that all four defendants violated his right of due process and showed deliberate indifference to his unjustified imprisonment.The district court dismissed all claims against Hicks and Haley, and most against Erickson and Hanson, before entering summary judgment for Erickson and Hanson on the deliberate indifference and unreasonable seizure claims. Sabo appealed the dismissal of his claims against Hicks and Haley.The United States Court of Appeals for the Seventh Circuit found that Sabo's complaint stated claims of deliberate indifference against Hicks and Haley. The court held that assuming all facts and inferences in Sabo’s favor, the record did not compel a finding of qualified immunity for Hicks and Haley. Therefore, the court vacated the district court’s dismissal of those claims. However, the court affirmed the district court's decision in all other respects, including the summary judgment for Erickson and Hanson on the deliberate indifference and unreasonable seizure claims. View "Sabo v. Erickson" on Justia Law

A German citizen, Asli Baz, filed a suit under the International Child Abduction Remedies Act (ICARA) to compel Anthony Patterson, a U.S. citizen, to return their six-year-old son, A.P., from Illinois to Germany. The couple had previously lived together in Chicago, but after their relationship ended, they continued to cohabit and share custody of their son. Baz later moved to Germany with A.P., with Patterson's consent. However, Patterson later took A.P. from his school in Germany and brought him back to the U.S., refusing to return him to Germany.The U.S. District Court for the Northern District of Illinois found that A.P.’s habitual residence at the time he was retained was in Germany, where he had lived with Baz for over a year, and that the retention in Illinois violated Baz’s rights of custody under German law. It thus granted Baz’s petition and ordered the child’s return. Patterson appealed, challenging both the jurisdiction of the district court and its rulings on the merits of the petition.The United States Court of Appeals for the Seventh Circuit affirmed the district court's decision. The court rejected Patterson's argument that the district court lacked jurisdiction due to a provision in the Illinois Allocation Judgment, which stated that the Circuit Court of the State of Illinois had exclusive jurisdiction over the case. The court also found that the district court did not err in determining that A.P.'s habitual residence was Germany, and that Baz was exercising her rights of custody at the time of the retention. The court emphasized that its decision did not touch on any matters of custody, which should be resolved by the courts of the child's habitual residence. View "Baz v. Patterson" on Justia Law

The case involves Thomas Brooks, II, who was charged with and pleaded guilty to possessing a firearm as a convicted felon. The incident occurred when Brooks was leaving an apartment complex and saw police officers waiting outside to arrest him due to several outstanding warrants. Brooks began to run and during the chase, he threw a loaded firearm and an extended magazine into the grass. The police apprehended him and retrieved the discarded items.Prior to his sentencing, the United States Probation Office prepared a Presentence Investigation Report, which calculated an offense level of 19 and a criminal history category VI, yielding an advisory guidelines range of 63 to 78 months in prison. Brooks argued that the reckless endangerment enhancement should not apply because the government could not demonstrate that his actions created a substantial risk of serious bodily harm. The district court disagreed and applied the two-level reckless endangerment enhancement.On appeal to the United States Court of Appeals for the Seventh Circuit, Brooks challenged his sentence on three grounds: the application of a two-level enhancement for reckless endangerment while fleeing from police, the district court's failure to address one of his key mitigation arguments, and the district court's decision to sentence him above the Guidelines range. The Court of Appeals affirmed the district court's decision, finding that the district court did not err in its application of the enhancement, adequately addressed Brooks's mitigation arguments, and provided a sufficient explanation for the above-Guidelines sentence. View "United States v. Brooks" on Justia Law

Monica Rongere, a former Diversity Procurement Officer for the City of Rockford, Illinois, sued the city after her employment was terminated. Rongere claimed that she was overworked and underpaid compared to her male colleagues, and that her termination was due to her complaints about this disparity. She brought claims under the Equal Pay Act, Title VII of the Civil Rights Act of 1964, the Illinois Human Rights Act, the Illinois Whistleblower Act, and Illinois common law, alleging equal pay, sex discrimination, hostile work environment, and retaliation.The district court ruled in favor of the City on the Equal Pay Act, Title VII, and Illinois Human Rights Act claims, and relinquished jurisdiction over the remaining state-law claims. Rongere appealed this decision.The United States Court of Appeals for the Seventh Circuit affirmed the district court's decision. The court found that Rongere failed to identify adequate comparators for her equal pay and sex discrimination claims, did not show that she engaged in protected activity based on an objectively reasonable belief for her retaliation claim, did not present sufficient evidence of a hostile work environment, and did not explain how the district court abused its discretion in relinquishing jurisdiction over the remaining claims. The court also found that Rongere did not hold an objectively reasonable belief that the City paid male employees more than female employees for the same work, which was necessary for her retaliation claims. View "Rongere v. City of Rockford" on Justia Law

This case involves a dozen gas stations in the Green Bay, Wisconsin area, who alleged that Costco Wholesale Corporation violated a Wisconsin law prohibiting the sale of gasoline below a statutorily defined cost. The plaintiffs sought an injunction to prevent Costco from selling gasoline below that level and damages of over half a million dollars each. Costco argued that it lowered its prices to match a competitor's price, which the statute allows, and that the plaintiffs failed to establish the causal element of the statutory claim.The case was initially heard in the United States District Court for the Eastern District of Wisconsin, which sided with Costco and awarded it summary judgment. The plaintiffs appealed this decision, challenging both the summary judgment and an evidentiary ruling made earlier in the proceedings.The United States Court of Appeals for the Seventh Circuit affirmed the lower court's decision. The court found that for 238 of the 256 days in question, Costco was immune from liability under the "meeting competition" exception in the Wisconsin law. For the remaining 18 days, the court found that the plaintiffs failed to show that they were injured or threatened with injury as a result of Costco's actions. The court also upheld the lower court's denial of the plaintiffs' request to supplement their expert report. View "Pit Row, Inc. v. Costco Wholesale Corporation" on Justia Law