Justia Civil Procedure Opinion Summaries

Dells Hospitality borrowed $12,600,000 to purchase the Lake Delton Hilton Garden Inn. Dells’ owner and president, Sobsczak-Slomczewski, agreed to indemnify the lender against all losses.. Dells defaulted. The lender filed a foreclosure action. Sobsczak‐Slomczewski directed the hotel’s independent management company to transfer $677,000 to a corporate entity he owned. After a foreclosure sale, the lender amended the complaint to add claims for theft and conversion. The district court found that Sobsczak-Slomczewski had converted and embezzled the $677,000. Sobsczak‐Slomczewski then petitioned for bankruptcy. The lender filed an adversary proceeding seeking to have the $677,000 debt found non‐dischargeable. The bankruptcy court granted the lender summary judgment, citing 11 U.S.C. 523(a)(4) and (a)(6). The district court dismissed Sobsczak‐Slomczewski’s appeal, filed 15 days after the bankruptcy court order, holding that Rule 8002(a)’s 14‐day deadline was jurisdictional. Rejecting Sobsczak‐Slomczewski’s assertion that he did not receive notice until the day of the deadline, the court explained that there are no equitable exceptions to a mandatory jurisdictional rule. The Seventh Circuit affirmed after considering recent Supreme Court pronouncements The court joined other circuits in holding that the 14‐day deadline to file a notice of appeal is rooted in the jurisdiction statute, 28 U.S.C. 158, which expressly includes a timeliness condition. Sobsczak‐Slomczewski did not timely seek additional time from the bankruptcy court. View "In re: Sobczak-Slomczewski" on Justia Law

The Seventh Circuit held, in Irish v. BNSF (2012), that the plaintiffs, injured by a 2007 flood in Bagley, Wisconsin, had forfeited an argument concerning the scope of Wis. Stat. 88.87. The statute concerns liability for negligent design and maintenance of a railroad grade that causes an obstruction to a waterway or drainage course. Plaintiffs’ counsel assembled a new group of plaintiffs and refiled the same litigation in Arkansas state court to pursue that argument. The new suit was removed and transferred to the Western District of Wisconsin, which dismissed it for failure to state a claim. The defendant asked the court to sanction plaintiffs’ counsel under FRCP 11 or 28 U.S.C. 1927 for pursuing frivolous claims and engaging in abusive litigation tactics. The court denied that request, reasoning that although the claims were all but foreclosed by the decision in Irish, they were not frivolous. The Seventh Circuit affirmed the dismissal of the complaint but reversed the denial of sanctions. The record indicated that counsel unreasonably and vexatiously multiplied the proceedings by filing suit in Arkansas, which had no connection to the case. Pursuant to section 1927, the defendant is entitled to its fees and costs for removing the case and successfully seeking its transfer. View "Boyer v. BNSF Ry. Co." on Justia Law

The Commodity Futures Trading Commission regulates contracts concerning commodities for future delivery when offered on margin or another form of leverage, 7 U.S.C. 2(c)(2)(D), with an exception for contracts that “results in actual delivery within 28 days or such other longer period as the Commission may determine by rule or regulation based upon the typical commercial practice in cash or spot markets for the commodity involved”. The CFTC began investigating whether Monex's precious-metals business was within this exception. Monex refused to comply with a subpoena, arguing that since 1987, when it adopted its current business model, the CFTC has deemed its business to be in compliance with all federal rules and that, because it satisfies the exception, the Commission lacked authority even to investigate. The district court enforced the subpoena. Monex turned over the documents. Monex appealed, seeking their return and an injunction to prevent the CFTC from using them in any enforcement proceeding. The Seventh Circuit affirmed, stating that Monex was impermissibly using its opposition to the subpoena to get a judicial decision on the merits of its statutory argument, before the CFTC makes a substantive decision. The propriety of an agency’s action is reviewed after the final administrative decision. Contesting the agency’s jurisdiction does not change the rules for determining when a subpoena must be enforced. View "Commodities Futures Trading Comm'n v. Monex Deposit Co." on Justia Law

As part of a malicious prosecution lawsuit against Chicago, the plaintiffs sought by subpoena to discover documents from the Cook County State’s Attorney’s Office. Lawyers representing the Office, including McClellan, stated that the files no longer existed. A year later, the Presiding Judge ordered the Office to allow the plaintiffs’ lawyers to inspect 181 boxes of documents stored in a warehouse. The documents at issue were quickly found. Plaintiffs moved to sanction McClellan and others for obstructing discovery. After the tort suit ended in the plaintiffs’ acceptance of an offer of judgment, the judge granted the motion and ordered McClellan and the State’s Attorney’s Office to pay fees and costs ($35,522.94) that their misconduct had imposed on the plaintiffs, based on a finding of attorney misconduct under 28 U.S.C. 1927 and the inherent authority of a federal court to punish attorney misconduct in a case before it. The Seventh Circuit affirmed, characterizing the criticisms of McClellan as “apt and accurate” and, because the sanction had been paid, holding that a district court order imposing a sanction on a lawyer for misconduct in a case before the court can be appealed even if the sanction lacks a monetary component. View "Martinez v. City of Chicago" on Justia Law

Houston sued Hyatt and C.G. for breach of contract, intentional misconduct, and negligence in connection with injuries she sustained after falling at the downtown Indianapolis Hyatt hotel during a hotel‐sponsored New Year’s Eve party in 2010 and sought damages in excess of one million dollars. Discovery revealed that Hyatt had used C.G.’s security services for years. The district court granted Hyatt’s summary judgment motion in February 2014, but delayed ruling on C.G.’s motion due to Houston’s filing of three motions for sanctions against C.G. for discovery matters. A magistrate found that C.G. had engaged in a pattern of obstreperous discovery behavior by testifying falsely about its documents and discovery efforts, failing timely to correct false representations regarding its discovery, falsifying documents, and impeding the fair conduct of depositions. The district court nonetheless granted C.G summary judgment, butt declined to enter final judgment pending a determination as to the amount of sanctions to be levied against C.G. The court later adopted the magistrate’s recommendation and ordered C.G. to pay Houston $118,925.00 in attorney’s fees and $16,498.91 in costs. The Seventh Circuit affirmed, finding “ample evidence of C.G.’s attempts to impede, delay, and frustrate Houston’s discovery efforts.” View "Houston v. C.G. Sec. Servs., Inc." on Justia Law

Seeing an internet advertisement for a 1997 FLTHTC Harley‐Davidson motorcycle, Hahn visited City Limits dealership, test‐drove a 2004 motorcycle, took pictures, and made a downpayment. Days later, Hahn returned, paid the balance, and drove the 2004 motorcycle home. The bill of sale listed the VIN, year, and mileage for the 1997 motorcycle. The newer model had half that mileage. The next day, Hahn tried to purchase insurance and discovered the discrepancy. Hahn thought this was a scrivener’s error and called City Limits, which demanded more money and eventually called the police. After being contacted by an officer, Hahn took the motorcycle to the police station. Hahn claims that City Limits has not returned the $7,626.66. He filed suit, alleging that the police violated the Fourteenth Amendment by depriving him of property without due process and that the business violated the Illinois Consumer Fraud and Deceptive Business Practices Act. The Seventh Circuit affirmed dismissal. There is no allegation that the officer violated any state law by making telephone calls or by facilitating the return of the motorcycle; even with such an allegation, the federal constitution is not automatically violated every time the police fail to follow state or local rules. The court correctly declined jurisdiction over the state law claims. View "Zappa v. Smith" on Justia Law

Consumer Health Information sued Amylin Pharmaceuticals,alleging copyright infringement. 17 U.S.C. 101, concerning patient-education materials Consumer Health developed for Amylin’s use in marketing its diabetes drug Byetta. The parties’ contract, executed in 2006, unambiguously assigns the copyright to Amylin. Consumer Health alleged that the contract was induced by fraud or economic distress and sought rescission. The district court dismissed the suit as untimely. The Seventh Circuit affirmed. Consumer Health assigned the copyright to Amylin in 2006 but did not file this suit until 2013, several years too late under either a four-year limitations period that applies to claims for contract rescission under California law, or under the Copyright Act’s three-year statute of limitations, 17 U.S.C. 507(b). Consumer Health’s cause of action accrued when the contract was executed; at that point Consumer Health knew that Amylin owned the copyright, and the limitations clock on a suit to reclaim ownership started ticking. View "Consumer Health Info. Co v. Amylin Pharma., Inc." on Justia Law

Nettles-Bey travels to assist African-American youths. El-Bey invited Nettles-Bey to South Holland, offered accommodations at “his house," and gave Nettles-Bey a garage-door opener. Nettles-Bey entered the house;. El-Bey, however, was a squatter, with no lawful interest in the house. The property owner arrived while Nettles-Bey was present and called the police, reporting a trespass. On arriving, officers discovered literature referring to Moorish Science. The officers contend that they take into custody anyone who is the subject of a trespass complaint, so they arrested Nettles-Bey as a matter of routine. Nettles-Bey says that the officers remarked on his status as a Moor and congratulated themselves on detaining another member of that troublesome sect. Nettles-Bey sued under 42 U.S.C. 1983, alleging that the officers assumed from his name that he is a Moor and would not have arrested a Christian or an atheist. The court denied the officers’ motion for summary judgment. The Seventh Circuit dismissed for lack of jurisdiction. When the argument concerns facts, rather than legal uncertainty, an appeal must await a final decision. The district judge had no doubt about the law, deeming it clearly established that an officer may not arrest someone believed to hold certain religious beliefs, when in otherwise-identical circumstances the officer would not arrest a person holding different beliefs. The judge denied the motion because of doubt about what reasonable jurors would infer about why the officers arrested Nettles-Bey. View "Nettles-Bey v. Williams" on Justia Law

P.F. Chang’s restaurant company announced that its computer system had been breached and some consumer credit- and debit–card data had been stolen. Kosner had dined at a P.F. Chang’s and paid with his debit card. Four fraudulent transactions were made with the card he had used; he cancelled it and purchased, for $106, a credit monitoring service to protect against identity theft, including against use of the card’s data to open new accounts in his name. Lewert used a debit card at the same restaurant (thought to be not among those breached) and had no fraudulent transactions, but claims that he spent time and effort monitoring his card statements and his credit report. Lewert and Kosner sought to represent a class of all similarly situated customers, under the Class Action Fairness Act, 28 U.S.C. 1332(d)(2). The district court dismissed for lack of standing, finding they had not suffered the requisite personal injury. The Seventh Circuit reversed. At least some of the injuries alleged qualify as immediate and concrete injuries sufficient to support Article III standing; all class members should be allowed to show that they spent time and resources tracking down possible fraud, changing automatic charges, and replacing cards as a prophylactic measure. View "Lewert v. P.F. Chang's China Bistro, Inc" on Justia Law

In 2009, Tolliver agreed to deliver drugs for Tyson. Tolliver left Tyson's house with cocaine. A confidential informant had described Tolliver’s car and a drug packaging operation at Tyson’s house. Two officers, in plain clothes, stopped Tolliver, exited their unmarked car, and pointed a gun at Tolliver. According to Tolliver, he backed up about a car length. Tolliver, who was unarmed, then realized that he was dealing with police. He claims that he did not want the officer to think that he was reaching for a gun, so he sat motionless, with his hands on the steering wheel, and his foot on the brake. He claims that the officer shot him while he was in that position and that he became unable to control the car, which rolled toward the officers. The officers fired 14 times and Tolliver was struck by seven bullets. He pled guilty to aggravated battery of a peace officer and possession of a controlled substance with intent to deliver, but then sued for excessive force. The Seventh Circuit affirmed summary judgment in favor of the officers. A convicted criminal may not bring a civil suit questioning his conviction until the conviction has been set aside. Tolliver’s suit rests on a version of the event that completely negates the basis for his conviction. View "Tolliver v. City of Chicago" on Justia Law