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

GEFT, a billboard company, sued under 42 U.S.C. 1983 because Monroe County did not allow the installation of a digital billboard along I-69. Receiving a sign permit required compliance with size limits, height restrictions, setback requirements, a ban on changeable-copy (or digital) signs, and a prohibition on off-premises commercial signs, The ordinance provided exceptions to the permit requirement for government signs and certain noncommercial signs. If a proposed sign was ineligible for a permit, the applicant could apply for a use variance, which required specific findings.The district court granted GEFT summary judgment and enjoined the permitting scheme and the variance procedures. The Seventh Circuit vacated in part, first declining to extend the injunction to encompass the entire ordinance. Monroe County’s substantive sign standards do not need a permitting scheme to function. Indiana law provides that local government entities can enforce their own ordinances through civil penalties or injunctions. The court reinstated the variance procedure. That procedure is a “prior restraint” but is not unconstitutional; it does not involve consideration of content, permits ample alternatives for speech, including displays of messages on signs, and it does not give the Board of Zoning Appeals so much discretion that it violates the First Amendment. View "GEFT Outdoor, LLC v. Monroe County Indiana" on Justia Law

Perry died from gunshot wounds sustained during a fight with Shirley. In 2008, Shirley was convicted of first-degree reckless homicide. Shirley uses a prosthetic device below his knee. Although he can walk, during his trial Shirley was in a wheelchair with his legs shackled. To prevent the jury from observing the shackles, fabric was draped over both counsel tables. During voir dire, Juror 34 stated, if he’s in cuffs, "he did something.” Juror 34 separately confirmed he had seen the restraints, had not mentioned them to other jurors, and that his observations did not bias him. Shirley and his counsel said they were satisfied with those responses and did not request accommodations to muffle the noise of the shackles while Shirley was on the witness stand.The Wisconsin Court of Appeals rejected claims that his presumption of innocence was violated because Juror 34 noticed his restraints, that being shackled inhibited his right to present a complete defense because it limited his ability to approach exhibits, make demonstrations and show the jury which leg his prosthesis was on. The court could not locate an explanation in for the restraint decision but found Shirley “had little difficulty communicating” in an “intelligent and articulate” manner from the witness stand. The Seventh Circuit affirmed the denial of Shirley’s petition for habeas relief. No Supreme Court case clearly establishes that the decision to shackle a criminal defendant while testifying violates the defendant’s constitutional rights. View "Shirley v. Tegels" on Justia Law

To claim the research tax credit under Section 41 of the Internal Revenue Code, a taxpayer must demonstrate that at least 80 percent of its research activities for a business component constituted elements of a process of experimentation. The Taxpayer, the parent of a shipbuilding company, claimed expenses for building 11 new vessels under the tax credit. The IRS disallowed the credit and assessed a tax deficiency.The Tax Court and the Seventh Circuit upheld the IRS determination. Although the Taxpayer never built a drydock before and the vessels were first-in-class, the Taxpayer claimed more tax credit than it could prove; it did not offer a principled way to determine what portion of the employee activities for each vessel constituted elements of a process of experimentation or research activities. The Taxpayer relied on arbitrary estimates and the newness of the vessels. To claim the credit, a taxpayer must adequately document that substantially all of such activities were research activities that constitute elements of a process of experimentation. Generalized descriptions of uncertainty, assertions of novelty, and arbitrary estimates of time spent performing experimentation are not enough. View "Little Sandy Coal Co., Inc v. Commissioner of Internal Revenue" on Justia Law

Police discovered a gun in Hatley’s possession during a Gary, Indiana traffic stop. Hatley pled guilty to being a felon in possession of a firearm, 18 U.S.C. 922(g)(1), which ordinarily carries a statutory maximum of 10 years. The government contended that Hatley’s criminal history exposed him to an enhanced sentence of at least 15 years under the Armed Career Criminal Act (ACCA) in particular under 18 U.S.C. 924(e), which applies to offenders with “three previous convictions … for a violent felony … committed on occasions different from one another.” Hatley’s criminal history included convictions for robbery and criminal battery under Indiana law, both violent felonies under 924(e), and eight separate federal convictions for Hobbs Act robberies committed on eight different occasions.The district court rejected an argument that those robbery convictions did not qualify as “violent felonies” and sentenced him to the 15-year minimum term mandated by 924(e). The Seventh Circuit affirmed. The court compared the elements of Hobbs Act robbery with the elements of a violent felony under ACCA. Hobbs Act robbery committed by using force against a person fits within ACCA’s force clause. The other way of committing Hobbs Act robbery—using force against property—does not fit within ACCA’s force clause but qualifies as a violent felony under ACCA’s enumerated definition of generic extortion. View "United States v. Hatley" on Justia Law

Kimball entered annexation agreements with Illinois municipalities and contracted separately with Fidelity as a surety to issue bonds securing performance on those obligations. Fidelity required Kimball to indemnify it. In 2008, Kimball filed for Chapter 11 bankruptcy relief before it satisfied its development obligations. The municipalities and Fidelity filed proofs of claim.Fidelity voted in favor of Kimball's reorganization plan. The confirmation order released the claims of every party that voted for the plan; an injunction prohibited those entities from seeking payment on their claims. Kimball’s assets, “free and clear of any and all liens, claims, encumbrances, and interests,” went into a trust that sold its development interests to TRG. The bankruptcy court later allowed the municipalities to sue Kimball to establish liability in order to recover the proceeds of the performance bonds.The municipalities sued Fidelity in state court to collect on the bonds. Fidelity interpleaded TRG. TRG asked the bankruptcy court to enforce the Kimball plan confirmation order and injunction against Fidelity and alleged “knowing and intentional violation of the confirmation order.” The bankruptcy court held Fidelity in contempt of that order, concluded that the order extinguished Kimball’s duty to indemnify Fidelity, and awarded TRG $9.5 million in sanctions, The district court and Seventh Circuit affirmed. The bankruptcy court undertook a careful and detailed analysis in finding Fidelity in contempt and assessing sanctions based on TRG's costs. There was no legal or factual error. View "Fidelity and Deposit Company of Maryland v. TRG Venture Two, LLC" on Justia Law

Stant is a manufacturer of products for automobile suppliers and automobile manufacturers, including vapor management systems, fuel delivery systems, and thermal management systems. The spread of COVID-19 in early 2020 and the ensuing government orders curtailing the operation of non-essential businesses resulted in the suspension or reduction in operations by Stant’s customers. Stant alleged that it suffered over $5.3 million in derivative financial losses.Stant sought to recover under an “all-risk” insurance policy sold by FM. Under the Contingent Time Element coverage in that policy, Stant argued it was entitled to coverage for lost income as a result of “physical loss or damage” at its customers’ properties. Stant claimed that the COVID-19 virus caused such “physical loss or damage” to its customers’ properties and that its resulting business interruption losses were covered under the policy. Stant sought a declaratory judgment that it was entitled to recover under a commercial insurance policy issued by FM. The Seventh Circuit affirmed the dismissal of the suit. The temporary loss of use or restrictions on use do not constitute “physical” damage or loss. View "Stant USA Corp. v. Factory Mutual Insurance Co." on Justia Law

Worthen, Darryl, and Harris planned to rob a gun store and, if necessary, shoot the store owner, Maxie. During the robbery, Darryl shot and killed Maxie. Worthen was charged with Hobbs Act robbery, 18 U.S.C. 1951(a), and discharge of a firearm resulting in death, 18 U.S.C. 924(j). Because Darryl directed the robbery and killed Maxie, Worthen was charged as an aider and abettor, 18 U.S.C. 2(a). For the 924(j) charge, the government needed to show the discharge of a firearm in the course of a “crime of violence” involving “as an element the use, attempted use, or threatened use of physical force against the person or property of another.” Worthen unsuccessfully argued that Hobbs Act robbery was not a crime of violence but did not mention accessory liability. Worthen then pled guilty to the 924(j) charge as an aider and abettor.On appeal, Worthen again argued that Hobbs Act robbery is not a crime of violence and argued, for the first time, that aiding and abetting a Hobbs Act robbery is not a crime of violence and that the 924(c) force clause was unconstitutionally vague. The Seventh Circuit rejected those arguments. Because the principal offense of Hobbs Act robbery satisfies the force clause, aiding and abetting a Hobbs Act robbery qualifies as a crime of violence. The “clear” meaning of physical force is “violent force—that is, force capable of causing physical pain or injury to another person.” View "United States v. Worthen" on Justia Law

In 1998 Williams, a leader of the Gangster Disciples, was indicted under 21 U.S.C. 841(a)(1), 846. Convicted, Williams was sentenced to concurrent sentences of 240 months on two counts and a life sentence on a third count; there was evidence that Williams directed a murder to further the gang’s drug dealing activities. Williams invoked the 2018 First Step Act, seeking to reduce his sentence to time served. Williams cited the revised penalty scheme for crack cocaine offenses in place before the 2010 Fair Sentencing Act, his advanced age, poor health, and record of good behavior in prison. The government argued that Williams remained affiliated with the Gangster Disciples and posed an ongoing risk to the public.The court held a hearing and reviewed photos of Williams posing in prison with other Disciples and investigative reports showing that Williams was helping distribute drugs for the gang within the prison. Williams disputed the extent of his involvement but admitted that he continued his association with the Disciples. The district court explained that Williams’s ongoing affiliation with the Disciples was “sufficient” to deny relief and found that Williams was still participating in drug dealing. The Seventh Circuit affirmed the denial of relief. The district court acted well within the bounds of its broad discretion. View "United States v. Williams" on Justia Law

At St. Vincent Hospital, police spoke to Banks. He told them he had been shot three times in the hip. Roland explained that he drove Banks to the hospital in his Buick, which was in the parking lot.” Officers found Roland’s Buick in the hospital parking lot and saw blood and firearms through the window. Sergeant Lewis provided all this information in his search warrant application. Pursuant to the warrant, Detective Shue searched Roland’s Buick. In addition to the visible blood and handguns, Shue and an evidence technician found ammunition in a duffel bag and a loaded magazine in the armrest console. Banks told Shue that he did not know who shot him, that he called Roland after being shot, and that Roland drove him to the hospital. None of this information appeared in the warrant application but comes from an affidavit Shue prepared to support Roland’s arrest as a felon in possession of a firearm.Roland waived his Miranda rights and stated that the car, handguns, and ammunition belonged to him. He had prior convictions for robbery and for possessing cocaine. Roland unsuccessfully moved to suppress the evidence seized from his Buick and his statements. The district court and Seventh Circuit rejected his arguments that there was not probable cause to issue the warrant and that the warrant application omitted material information that would have negated probable cause. View "United States v. Roland" on Justia Law

Fun's warehouse had a functional sprinkler system with a working water supply. In 2016, an inspector from Legacy found no problems. In 2017, the inspector found the system had no water pressure. South Bend Water Works could not explain the problem and had no record of shutting off the water. Two months later, Fun contacted the fire inspector, who did not know how to restore the water. Fun's owner again called the Water Works and was told there was no record of disconnection. He asked the operator to restore the water and “assumed that she was going to ... figure out what was going on.” Fun never heard from any Water Works personnel and did not check whether the water was restored. In 2018, another Legacy employee performed the inspection. Fun was not notified of any problems. A fire destroyed the warehouse in 2019. Fun claimed losses exceeding $7 million. The city apparently had capped the pipe supplying the sprinkler system in 2017 when the neighboring building was demolished. Fun's Frankenmuth insurance policy contained an exclusion for situations in which the insured knew of any suspension or impairment in any protective safeguard, including sprinkler systems, and failed to notify Frankenmuth.Frankenmuth obtained a declaratory judgment that it did not owe insurance coverage. The Seventh Circuit affirmed. Cao had knowledge in 2017 that the system had no water yet never reported that impairment nor determined that the problem was solved. View "Frankenmuth Mutual Insurance Co. v. Fun F/X II, Inc." on Justia Law