Justia Civil Procedure Opinion Summaries

Magruder bought 940,000 shares of Bancorp through his Fidelity account, paying $9,298. Years later he asked Fidelity for a certificate showing his ownership. When Fidelity did not comply, Magruder initiated arbitration through the Financial Industry Regulatory Authority. Magruder and Fidelity chose simplified arbitration, in which the arbitrator cannot award more than $50,000 in damages or order specific performance that would cost more than $50,000. Magruder had demanded $28,000 (actual plus punitive damages). The arbitrator directed Fidelity to deliver a stock certificate or explain why it could not do so. Fidelity explained that in 2005 the Depository Trust & Clearing Corporation, responsible for issuing Bancorp paper certificates, had placed a “global lock” on that activity as a result of Bancorp reporting that fraudulent shares bearing identification number 106 were flooding the market. In 2012 Bancorp offered to swap series 106 shares for new series 205 shares, but by then Bancorp had been delisted from stock exchanges and FINRA blocked the swaps. The arbitrator accepted this explanation. Magruder then filed suit. The district judge sided with Fidelity. The Seventh Circuit vacated for lack of jurisdiction. Even assuming that the parties are of diverse citizenship, the stakes cannot exceed $50,000, and the minimum under 28 U.S.C. 1332(a) is $75,000. View "Magruder v. Fidelity Brokerage Servs., LLC" on Justia Law

Plaintiff filed suit against Illinois and the Board after the Board refused to put plaintiff's name on the ballot for a local government election in 2015. The district court dismissed plaintiff's amended complaint. The court concluded that, in this case, all three requirements of claim preclusion are satisfied where the parties in the state and federal actions are the same, and the Circuit Court of Cook County's order dismissing plaintiff's petitions for judicial review are a final judgment on the merits. Nor is there any doubt that the state court was competent to resolve plaintiff's federal claims. Finally, both the state and federal actions are clearly predicated on the same set of operative facts and are therefore the same cause of action under Illinois law; the state court proceedings to which plaintiff voluntarily submitted were constitutionally adequate; and plaintiff had a fair opportunity to appeal the state court's decision. Accordingly, the court affirmed the judgment, concluding that plaintiff had a full and fair opportunity to litigate his claims in state court, and the minimum procedural requirements of the Due Process Clause were met. View "Rose v. Board of Election Commissioner" on Justia Law

Hassebrock hired the Bernhoft Law Firm in 2005 to help with legal problems, including a federal criminal tax investigation, a civil case for investment losses, and a claim against Hassebrock’s previous lawyers for fees withheld from a settlement. Hassebrock was ultimately found guilty, sentenced to 36 months in prison, and ordered to pay a fine and almost $1 million in restitution. In 2008, Hassebrock fired the Bernhoft firm. In a malpractice suit against the Bernhoft attorneys and accountants, Hassebrock waited until after discovery closed to file an expert-witness disclosure, then belatedly moved for an extension. The court denied the motion and disallowed the expert, resulting in summary judgment for the defendants. The Seventh Circuit affirmed, rejecting an argument that the judge should have applied the disclosure deadline specified in FRCP 26(a)(2)(D) rather than the discovery deadline set by court order. The disclosure deadline specified in Rule 26(a)(2)(D) is just a default deadline; the court’s scheduling order controls. It was well within the judge’s discretion to reject the excuses offered by Hassebrock to explain the tardy disclosure. Because expert testimony is necessary to prove professional malpractice, summary judgment was proper as to all defendants. View "Hassebrock v. Bernhoft" on Justia Law

The EEOC investigated Aerotek staffing agency for compliance with the Age Discrimination in Employment Act, 29 U.S.C. 621, and served a subpoena requesting information: about all persons that Aerotek referred from its Illinois facilities for employment by clients; regarding all job requisition requests by Aerotek clients nationwide; about persons hired into internal positions at Aerotek’s Illinois facilities; and documents related to Aerotek’s analysis of its workforce. Aerotek partially complied. EEOC’s initial review revealed hundreds of discriminatory job requests by clients at 62 of Aerotek’s 286 facilities. EEOC issued another request for information about individuals assigned to clients including names, dates of birth, contact information and the names of the clients to whom they were assigned. Aerotek again partially complied, excluding client names and the names and contact information for workers hired by those clients. Instead, Aerotek created a code system and supplied numerical identifiers for clients and workers. Aerotek refused to produce unredacted information. The Seventh Circuit affirmed an order to enforce the subpoenas. The inquiry is within the authority of the EEOC and the information sought is clearly relevant to its investigation of age-related discrimination. Aerotek did not claim that the request is too indefinite; production of this information would not impose an unreasonable or undue burden. View "Equal Employment Opportunity Comm'n v. Aerotek, Inc." on Justia Law

Debtor, a construction business, filed a voluntary Chapter 11 bankruptcy petition, which was converted to chapter 7. A The Bank holds a valid, first-priority security interest in all of the Debtor’s assets, including accounts receivable. The Trustee discovered that checks payable to the Debtor had been negotiated and deposited into the personal account of Hartford, the father of Debtor’s principal, totalling $36,389.89. Before initiating adversary litigation, the Trustee engaged in settlement talks with Hartford, who agreed to pay $36,389.89 to the estate and release the estate from all claims involving the transfers. While the Trustee was pursuing settlement., the Bank obtained an order modifying the automatic stay to allow it to exercise its state law remedies with respect to collateral, then filed suit to recover from Hartford the value of the checks. A state court entered judgment in favor of the Bank. The next day, the Trustee successfully moved for approval of the Hartford settlement. The Bank objected. The bankruptcy court rejected the Bank’s argument that the order granting relief from the automatic stay allowed it to pursue the fraudulent transfer action in state court. The district court affirmed. The Seventh Circuit dismissed for lack of jurisdiction, finding that the bankruptcy court entered no final judgment or appealable order. View "Schaumburg Bank & Trust Co. v. Alsterda" on Justia Law

A 2012 car accident rendered Hernandez a quadriplegic. He was convicted of aggravated driving under the influence involving an accident causing death. Hernandez was taken into custody while he was hospitalized for treatment of pressure wounds. Under Cook County Sheriff’s Office policy, officers must shackle one hand and one foot of a hospitalized pre‐trial detainee to his hospital bed. Hernandez was shackled and sent to Cook County Jail, then immediately transferred to Stroger Hospital, where he remained from March 14 to April 18, 2013; the shackling continued. Hernandez claims that doctors had instructed him to move every two hours to help his sores heal, and that the shackling stunted his recovery. Hernandez complained orally. The grievance process, described in a handbook that Hernandez did not receive, states that an inmate must file a written grievance within 15 days of the alleged incident. Hernandez never filed a written grievance. After discharge from Stroger, he entered the jail general population. Unable to write, he had other inmates write and file grievances, including an August 3, 2013, grievance stating that nursing staff refused to help him move between his chair and his bed. Hernandez received a response on September 11 and appealed. On February 19, 2014, Hernandez filed suit under 42 U.S.C. 1983, alleging excessive force and deliberate indifference to his medical needs. The district court stated that Hernandez’s oral complaints constituted a proper grievance but held that Hernandez had not exhausted his administrative remedies and dismissed. The Seventh Circuit remanded, finding that Hernandez did exhaust his remedies. View "Hernandez v. Dart" on Justia Law

Noboa, while living in Illinois, booked a trip to Mexico by using the Orbitz website. In the lobby of the Barcelo hotel, she booked an eco-tour, operated by Rancho. During the tour, the all-terrain vehicle in which Noboa was riding overturned. She died as a result of her injuries. The district court dismissed her estate's suit against Barcelo and Rancho, finding neither company subject to jurisdiction in Illinois. The Seventh Circuit affirmed, rejecting an argument that Noboa's death was connected to Illinois through a causal chain that began with her booking the trip while in Illinois. View "Noboa v. Barcelo Corp. Empresaria, SA" on Justia Law

Hedeen filed suit, alleging breach of contract and unjust enrichment against OzWest, Inc. and Zing, and against Cummings, the leading shareholder in those companies. Cummings is an Australian citizen who resides in Hong Kong and has never visited Wisconsin. The complaint identified him as a principal of OzWest, an Oregon company, and as OzWest’s signatory on the underlying license agreement. Hedeen served Cummings through office service under Oregon law by leaving a copy of the summons and complaint at OzWest’s Oregon office on March 31, 2014, and by mailing copies of those documents to the Oregon office address on June 4. OzWest served a motion to dismiss on July 7, but Cummings did not file any response.The district court declared that it appeared that Cummings was properly served and granted Cummings’ October 22 motion to dismiss for lack of personal jurisdiction, rejecting Hedeen’s argument that Cummings waived the right to challenge personal jurisdiction because he did not file a motion within 21 days of service (FRCP 12(h); 12(a)(1)). The Seventh Circuit affirmed. Under a straightforward reading of Rule 12, a challenge to personal jurisdiction may be asserted either in a responsive pleading filed within 21 days, or in a motion with no similar time limit specified. View "Hedeen Int'l, LLC v. Zing Toys, Inc." on Justia Law

Hampton's contracts with Window World, allowed Hampton to use WW trademarks. WW alerted Hampton that their dealings were subject to the Illinois Franchise Disclosure Act, and that Hampton had 35 days to elect between rescinding the contracts and signing a franchise agreement. Hampton did neither, but filed suit, alleging violation of the Act and fraud. WW sued under the Lanham Act (Suit 2). Hampton returned a waiver of service, but did not hire a lawyer for Suit 2. Hampton dismissed Suit 1, without prejudice, but did not respond to Suit 2. WW successfully moved for default, then for default judgment. All motions and notices were in the electronic filing system, but Hampton was not using that system and did not respond. The court entered a default judgment for $100,000 in damages and costs, and an injunction. Hampton continued calling his business Window World, but did not make payments or pay the judgment. Hampton closed the business, then filed Suit 3, presenting the same claims as Suit 1, and sought to reopen Suit 2 and set aside the judgment. The judge concluded that Hampton’s failure to follow the electronic filings, plus his professed belief that Suits 1 and 2 had been dismissed together, amounted to excusable neglect, but conditioned reopening of Suit 2 on payment of $33,000. Hampton did not pay. The court reinstated the default judgment. Suit 3 was dismissed; Hampton’s claims in Suit 3 were compulsory counterclaims in Suit 2. The Seventh Circuit affirmed. If the suits are separate, claim preclusion blocks Hampton’s current claims; if they are consolidated, law of the case leads to the same outcome. View "Window World of Chicagoland v. Window World, Inc." on Justia Law

VLM, a Montreal-based supplier, sold frozen potatoes to IT in Illinois. After nine successful transactions, IT encountered financial difficulty and failed to pay for the next nine shipments. Invoices sent after delivery included a provision purporting to make IT liable for collection-related attorney’s fees if it breached the contracts. VLM sued; the deadline for an answer passed. The court entered a default. On defendants' motion, the court vacated the default as to IT’s president only. All three defendants then filed answers, contesting liability for attorney’s fees. The judge applied the Illinois Uniform Commercial Code and found that the fee provision had been incorporated into the contract. The Seventh Circuit reversed, holding that the U.N. Convention on Contracts for the International Sale of Goods applied. On remand, the judge applied the Convention and held that the fee provision was not part of the contracts and that IT could benefit from this ruling, despite the prior entry of default. The Seventh Circuit affirmed. IT never expressly assented to the attorney’s fees provision in VLM’s trailing invoices, so under the Convention that term did not become a part of the contracts. VLM waived its right to rely on the default by failing to raise the issue until its reply brief on remand. View "VLM Food Trading Int'l, Inc. v. Ill. Trading Co." on Justia Law