Justia Civil Procedure Opinion Summaries

NMEPT, a joint venture, was formed to sell environmental equipment in China. Nalco owned 55% of the venture, Chen 40%, and a third party 5%. When NMEPT encountered business problems, Nalco paid its creditor and sued Chen for his 40% share of the outlay. The district court awarded Nalco more than $2 million, rejecting Chen's counterclaim that Nalco’s subsidiary, NMI, had caused the joint venture to borrow $300,000 without Chen's approval, even though the agreement required all investors’ consent for borrowing. Chen also claimed that the creditor petitioned the joint venture into bankruptcy under Chinese law, on behalf of NMI, in an effort to avoid a clause requiring the investors’ unanimous consent for bankruptcy proceedings. Nalco wanted to wind up the unprofitable venture, but Chen preferred to keep it alive (if dormant) to protect its intellectual property. Chen did not appeal, but filed a new suit in China, against Mobotec. The Seventh Circuit affirmed an injunction, prohibiting Chen from pursuing the Chinese litigation. Rejecting an argument that Mobotec was not a party to and could not benefit from the Illinois judgment, the court stated: “That would be a questionable proposition even if Mobotec were a distinct entity, for federal courts no longer require mutuality in civil litigation.” The district court found that NMI and Mobotec are the same entity. View "Nalco Co. v. Chen" on Justia Law

Doctors replaced Dobbs’s hip with a DePuy ASR artificial hip, which was defective and caused Dobbs pain and other problems. Dobbs hired McLaughlin to represent him in the DePuy ASR Hip Implant Multidistrict Litigation for a 35 percent contingency fee. A year later, DePuy proposed a “Global Settlement,” offering represented parties $250,000 and unrepresented parties $165,000. McLaughlin advised Dobbs to accept the offer because going to trial would be expensive, time consuming, and risky. Dobbs stated that he wanted to register for the settlement but that he did not want to “waive any rights to a trial,” or “be forced to accept the present settlement offer.” Dobbs moved to remove McLaughlin. McLaughlin acknowledged that he no longer represented Dobbs and withdrew as counsel. Acting pro se, Dobbs accepted the settlement; because he was considered “represented,” Dobbs received $250,000. McLaughlin asserted a lien on the award and sought attorneys’ fees under a quantum meruit theory. The district court held that the full contingency fee was a reasonable award. The Seventh Circuit vacated. The court listed the factors relevant to quantum meruit under Illinois law, but did not consider evidence related to the factors. The only factor specifically addressed was that Dobbs “undoubtedly benefitted” from McLaughlin’s work. The court did not analyze: how many hours McLaughlin spent on Dobbs’s case; the difficulty of the underlying claim; the ordinary charge for such work; or McLaughlin’s skill and standing. View "Dobbs v. McLaughlin" on Justia Law

In 2014, the IRS attempted to collect $244,464 in unpaid taxes and penalties from Adolphson for tax years 2002 and 2006-2010. Adolphson claims he was unaware of the IRS’s collection efforts until the agency levied on his funds held by third parties (26 U.S.C. 6330). Rather than challenge the levies with the IRS, Adolphson filed a pro se petition, asking the tax court to enjoin the collection efforts and refund amounts already collected. Adolphson argued that the IRS had not mailed him the required Final Notice of Intent to Levy, so that he was deprived of a “collection due process hearing” (CDP) before the IRS Office of Appeals. Adolphson cited tax court decisions in which the tax court asserted that it lacked jurisdiction without an IRS notice of determination, yet nevertheless invalidated levies after finding that the taxpayer was prevented from requesting a CDP by failure to mail a Final Notice to the proper address. The IRS was unable to say “with certainty” whether the Final Notices were sent to proper addresses. Exhibits corroborated the dates on which the Final Notices were issued but did not show where the notices were mailed. The tax court dismissed, reasoning that it lacked authority to grant relief without a notice of determination. The Seventh Circuit affirmed. While Adolphson’s case is indistinguishable from the tax court precedent he cited, those decisions were unsound and reflect an improper extension of the tax court’s jurisdiction. View "Adolphson v. Commissioner of Internal Revenue" on Justia Law

Whitaker is a transgender boy whose high school will not permit him to use the boys’ bathroom. He sued, alleging violation of Title IX, 20 U.S.C. 1681, and the Equal Protection Clause. The defendants appealed denial of a motion to dismiss, arguing that appellate jurisdiction was proper under 28 U.S.C. 1292(b). The district court subsequently vacated its certification and the Seventh Circuit denied permission to appeal. The district court’s decision to withdraw certification destroyed jurisdiction to consider the petition under section 1292(b). View "Kenosha Unified School District v. Whitaker" on Justia Law

Plaintiff, a customer service representative, was in an automobile accident in 2011, after which she used a cane and limped. She was fired in 2012, allegedly because of a perceived disability that had required her to take time off and to use her health insurance. Represented by counsel, she filed suit under the Americans with Disabilities Act. The Seventh Circuit affirmed dismissal, citing failure to submit a charge of discrimination to the Equal Employment Opportunity Commission (EEOC) within the 300-day statutory deadline, 42 U.S.C. 2000e-5(e)(1), (f)(1). Six months after being fired she had filed with the Illinois Department of Human Rights (IDHR) a “Complainant Information Sheet” (CIS). A charge filed with IDHR is automatically cross-filed with EEOC. Despite the EEOC amicus curiae brief, arguing that the CIS was the equivalent of a charge, the court concluded that it was not. A charge is the administrative equivalent of a judicial complaint; a CIS is not unless it asks for relief. Without such a request the CIS is a pre-charge screening form, which does not prompt IDHR to notify the employer, launch an investigation, or sponsor mediation. Although the CIS form does say that IDHR will cross-file the complainant’s “charge of discrimination” with EEOC, it also says “THIS IS NOT A CHARGE,” followed by the statement that “if IDHR accepts your claim, we will send you a charge form for signature.” View "Carlson v. Christian Brothers Services" on Justia Law

Central States is a self-funded Employee Retirement Income Security Act (ERISA) plan that provides health coverage to participating Teamsters and their dependents. The plan’s trustee sought a declaratory judgment concerning student athletes who had medical coverage under both the Central States plan and independent insurers’ policies. The trustee alleged that the plan paid the beneficiaries’ medical bills in full (about $343,000) and the insurers owe reimbursement. The plan and the insurers’ policies have competing coordination-of-benefits clauses, and each side claims that its respective provision makes the other primarily liable for the beneficiaries’ medical expenses (29 U.S.C. 1132(a)(3)). The Seventh Circuit affirmed dismissal of the case. ERISA section 502(a)(3) does not authorize suits of this type because the relief sought is legal, not equitable. View "Central States, Southeast & Southwest Areas Health & Welfare Fund v. American International Group, Inc." on Justia Law

Wagner, a licensed attorney proceeding pro se, took both brand‐name and generic hormone therapy drugs as prescribed by her gynecologist to treat her post‐menopausal endometrial hyperplasia. After taking the drugs, Wagner developed breast cancer. Wagner sued multiple pharmaceutical companies that designed, manufactured, promoted and distributed the drugs she took, asserting Wisconsin state law tort claims, all based upon allegations that the defendants sold dangerous products and failed to adequately warn of their risks. Defendants moved for Rule 12(c) judgment on the pleadings, arguing that federal law preempted Wagner’s claims. In response, Wagner asserted, for the first time, that the defendants delayed updating their generic brand labels to match the updated, stricter labels on the brand‐name drug. The district judge granted the motion, finding that the Food, Drug, and Cosmetics Act, 21 U.S.C. 301, preempted the state law claims. The Seventh Circuit affirmed: Wagner’s complaint lacked the requisite factual allegations to support a failure to update theory and federal law preempts her Wisconsin state‐law claims. View "Wagner v. Teva Pharmaceuticals USA, Inc." on Justia Law

Schaefer’s employer, Brand Energy, was erecting scaffolding at a Dynegy power plant. Brand had complete control over the scaffold construction. Brand acquired the scaffold components from Universal, but Dynegy paid for the scaffolding and owned it. Brand workers had difficulties with the Universal components because faulty components would not readily lock. A bar popped loose and struck Schaefer on the head. Schaefer suffered serious injuries. In addition to bringing a workers’ compensation claim against Brand, Schaefer sued Universal. Because the piece of scaffolding that hit him was lost, he added claims for negligent spoliation of evidence against Brand and Dynegy. Schaefer also alleged construction negligence and failure to warn against Dynegy. The district court granted summary judgment for defendants, holding that without the missing piece, Schaefer could not prove his product liability claims; that Dynegy was not liable for any defects or negligence; and that Schaefer could not prove the spoliation claims because, without proof that the missing piece was defective, it was not possible to prove that its loss caused any damage. The Seventh Circuit affirmed in part, but reversed as to spoliation. Illinois law does not require a plaintiff to prove that he would have won his case but for the spoliation, it requires only that the plaintiff show a “reasonable probability” of success. Schaefer adduced evidence from which a jury could make this finding: the batch of scaffolding had a large number of defective pieces. View "Schaefer v. Universal Scaffolding & Equip., LLC" on Justia Law

Carlson, along with scholarly, journalistic, and historic organizations, sought access to grand-jury materials sealed decades ago. The materials concern an investigation into the Chicago Tribune in 1942 for a story it published revealing that the U.S. military had cracked Japanese codes. The government conceded that there are no interests favoring continued secrecy, but declined to turn over the materials, on the ground that Rule 6(e) of the Federal Rules of Criminal Procedure entirely eliminates the district court’s common-law supervisory authority over the grand jury and that no one has the power to release these documents except for the reasons enumerated in Rule 6(e)(3)(E). Carlson’s request is outside the scope of Rule 6(e). The Seventh Circuit upheld the district court’s ruling in favor of Carlson. The text and history of the Rules indicate that Rule 6(e)(3)(E) is permissive, not exclusive, and does not eliminate the district court’s long-standing inherent supervisory authority to make decisions as needed to ensure the proper functioning of a grand jury. While this inherent supervisory authority is limited to “preserv[ing] or enhanc[ing] the traditional functioning” of the grand jury, that includes the power to unseal grand jury materials in circumstances not addressed by Rule 6(e)(3)(E). View "Carlson v. United States" on Justia Law

In 2010, Trentadue’s ex‐wife sought to modify placement and child support, related to one of their six children. A three-year legal dispute over custody, placement, health insurance, and child support followed, involving substantial motion practice, requests for contempt findings, engagement of experts, and evidentiary hearings. The Wisconsin state court overseeing the litigation determined that Trentadue’s conduct resulted in excessive trial time to resolve the case and awarded Trentadue’s ex‐wife $25,000 in attorney’s fees for “overtrial,” to be paid to attorney Gay. Trentadue never paid Gay. Instead, he filed a chapter 13 bankruptcy petition. Gay countered by filing a $25,000 claim for the unpaid overtrial award and classified it as a nondischargeable, domestic support obligation entitled to priority. Trentadue objected that the obligation was imposed as a punishment, not a domestic support obligation. The bankruptcy court overruled his objection. The district court and Seventh Circuit affirmed, noting the restorative nature of the award. which “furthers two objectives, providing compensation to the overtrial victim for fees unnecessarily incurred and deterring unnecessary use of judicial resources.” The court also noted that Trentadue’s finances are “not so bleak,” including monthly income of six to seven thousand dollars. View "Trentadue v. Gay" on Justia Law