Justia Civil Procedure Opinion Summaries

Deb contracted with an Indian moving company, Allied Lemuir, to move his belongings from Calcutta, India to St. John’s, Canada, but the company demanded more money and his belongings never left India. After filing suit in Canada, Deb sued two U.S. companies, SIRVA and Allied Van Lines, in Indiana, asserting a “joint venture” theory. The district court dismissed, concluding that U.S. federal courts were not the proper venue for his claim. The Seventh Circuit vacated. The district court did not hold the defendants to their burden of demonstrating that India was an available and adequate forum for the litigation, The parties never addressed Canada as a forum for resolution of the dispute. View "Deb v. Sirva Inc." on Justia Law

The creditors of a Chapter 7 bankruptcy debtor filed an adversary complaint, arguing that assets held by the debtor’s wife and business (defendants) rightfully belonged to the estate under 11 U.S.C. 542(a). The bankruptcy court recommended, and the district court granted, judgment on the pleadings, saying that the defendants were alter egos of the debtor and the corporate veils should be pierced and the assets “brought into the Debtor’s bankruptcy estate.” Three weeks later, the defendants, having failed to timely appeal the bankruptcy court’s turnover order, appealed the district court’s order remanding the case to the bankruptcy court to implement the district court’s ruling requiring that the defendants’ assets be turned over to the debtor’s estate. The defendants cited 28 U.S.C. 157(c)(1), arguing that the turnover claim was not a “core proceeding,” so only the district court could enter a final order resolving the claim. The Seventh Circuit dismissed their appeal. Core proceedings involve bankruptcy law; non‐core proceedings are proceedings that relate to a bankruptcy but arise under some other body of law. The turnover of the defendants’ assets to the debtor’s estate and their liquidation for the benefit of the defendants is a core proceeding; the limitations on the bankruptcy court’s authority are irrelevant. View "Gemini Int'l, Inc. v. BCL-Burr Ridge, LLC" on Justia Law

Five months after Chicago police arrested Janusz, a court found that the officers’ stated reasons for approaching and arresting Janusz at a gas station were implausible. Janusz had lost his job because of the charges. Janusz sued in Illinois state court, alleging breach of employment contract, defamation, and intentional infliction of emotional distress, and separately sued the city and officers in federal court, alleging violations of his Fourth Amendment rights. The state court jury awarded Janusz $3,177,500. While appeals were pending, the parties executed a settlement. Janusz executed a release in exchange for $3 million; the parties stipulated that the defendants “ha[d] paid [Janusz] all monies due and owing him as the result of the Judgment previously entered.". In the federal suit, the city defendants sought summary judgment as to damages, arguing that Illinois’s single‐recovery rule prevented Janusz from recovering any damages relating to lost wages and emotional injuries for which the state settlement had compensated him. The district court granted the motion. The Seventh Circuit affirmed. Both lawsuits involve a single, indivisible set of injuries for which Janusz has already received compensation. Janusz is judicially estopped from arguing that the judgment in the state action was not fully satisfied. View "Janusz v. City of Chicago" on Justia Law

Chicago Police officers pulled over a car driven by Rosado for failing to use a turn signal. After stopping the car, the officers “claimed to have seen” a badge, handcuffs, and a handgun in plain view “between the brake lever and center console.” They arrested Rosado for unlawful possession of a weapon by a felon and for violating the armed habitual criminal statute. Another officer approved the report as establishing probable cause. Rosado spent about 18 months in jail before receiving a copy of the dash cam video recorded when he was arrested, which, contrary to the officers’ accounts, showed that Rosado had used an operable turn signal. The state court dismissed the charges. Rosado filed suit under 42 U.S.C. 1983. The court dismissed Rosado’s false‐arrest claim as barred by the two‐year statute of limitations. Because his claims of conspiracy and failure to intervene arose from the false‐arrest claim, those were also dismissed. The court dismissed Rosado’s due‐process and respondeat‐superior claims on the merits. The Seventh Circuit affirmed. Rosado did not promptly file. He knew the officers had fabricated probable cause by February 2014, when he received the video, and still had seven months to timely file suit. Rosado’s unexplained failure to timely file precluded equitable tolling. View "Rosado v. Gonzalez" on Justia Law

The Seventh Circuit held, in 2012, that the plaintiffs, injured by a 2007 flood in Bagley, Wisconsin, had forfeited an argument concerning Wis. Stat. 88.87, which concerns liability for negligent design and maintenance of a railroad grade that causes an obstruction to a waterway. Plaintiffs’ counsel identified new plaintiffs and refiled the same litigation in Arkansas state court to pursue that argument. The new suit was removed to the Western District of Wisconsin, which dismissed. 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 2012 decision, they were not frivolous. The Seventh Circuit affirmed the dismissal, 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. On rehearing, the Seventh Circuit noted its inherent authority to sanction willful abuse of the judicial process. Stombaugh long had notice of the conduct on which BNSF sought sanctions, and had multiple opportunities make his case against the award of sanctions. View "Boyer v. BNSF Ry. Co." on Justia Law

Teledyne terminated Shekar’s employment; 10 days later Teledyne sought injunctive relief, alleging that Shekar had accessed or attempted to access Teledyne’s servers, containing confidential information. There was a large data transfer between a Teledyne server and Shekar’s laptop computer on the day he was terminated. Before his termination, Shekar emailed Teledyne’s confidential information to his personal email addresses and saved it on his computers. Shekar refused to return electronic equipment provided by Teledyne for Shekar’s use at home. Teledyne asserted violations of the Computer Fraud and Abuse Act, the Illinois Trade Secrets Act, and the Illinois Uniform Deceptive Trade Practices Act. The district court issued a temporary restraining order requiring Shekar to return Teledyne’s electronic information and equipment and later granted Teledyne’a preliminary injunction, noting Shekar’s failure to comply with the TRO. The injunction required Shekar to provide “unrestricted access” to all of his devices that were capable of storing electronic information. The court later found Shekar in contempt for not producing several devices, not accounting for Teledyne’s electronic information, and not providing complete and truthful answers to interrogatories. The Seventh Circuit dismissed for lack of jurisdiction over Shekar’s appeal of his motion to vacate the preliminary injunction, which the court characterized as a “belated appeal” of the preliminary injunction. Since Shekar cannot appeal the preliminary injunction, he cannot appeal the contempt order while the underlying litigation remains pending. View "Teledyne Techs. Inc. v. Shekar" on Justia Law

A Wisconsin state prison inmate filed suit, in forma pauperis (28 U.S.C. 1915(a)), against prison doctors, alleging deliberate indifference to the plaintiff’s medical needs, in violation of 42 U.S.C. 1983, and medical malpractice. The defendants learned that in seeking permission to litigate in forma pauperis the plaintiff had failed to disclose that he had approximately $1400 in a trust account outside the prison. The district court dismissed, with prejudice on that basis. The Seventh Circuit affirmed, noting that, on appeal, the plaintiff had not argued that the dismissal should have been without prejudice and that such a dismissal would have had a different impact because the statute of limitations for section 1983 claims in Wisconsin is six years, not three. The decision to dismiss with prejudice was proper, however, and sends a strong message to all litigants, particularly to the prison population, that dishonesty to the court will not be tolerated. View "Kennedy v. Huibregtse" on Justia Law

In 2012, U.S. Bank, which has its main office in Ohio, filed a diversity suit asking for a foreclosure judgment on the mortgage of a residential property owned by the Fullers, citizens of Illinois, and named, as a defendant KeyBank, which held a junior mortgage on the property. After KeyBank was discovered also to be a citizen of Ohio, the district court granted U.S. Bank’s motion for voluntary dismissal. The court also dismissed claims that the Fullers had asserted against Litton Loan Servicing, a nonparty, because it had not been served with the third‐party complaint. The Seventh Circuit affirmed. Dismissal eliminated the prejudicial impact and inefficiency of forcing U.S. Bank to litigate its dispute over the same property in both federal and state court in order to obtain an adequate judgment. Whether Litton had actual notice of the claims against it is only one factor the district court may consider when deciding whether to extend the time for service. The court was free to determine, as it did, that the Fullers’ failure over two years to pursue their claims against Litton ruled out an extension. View "U.S. Bank Nat'l Ass'n v. Collins-Fuller T." on Justia Law

On behalf of Lightspeed, which operates websites purveying online pornography, attorneys Hansmeier, Steele, and Duffy sued a John Doe defendant in Illinois state court under the Computer Fraud and Abuse Act, 18 U.S.C. 1030, then served ex parte subpoenas, demanding that Internet service providers (ISPs), provide personally identifiable information of more than 6,600 “co‐ conspirators.” They filed similar actions in several states, apparently hoping to extract quick settlements from individuals whose personal information was revealed. The ISPs removed the Illinois case to federal court. Meanwhile, a California court imposed sanctions on the attorneys in a similar case; they began voluntarily dismissing cases. After the Lightspeed case was dismissed, a defendant sought attorney’s fees. The court imposed sanctions of $261,025.11, jointly and severally, against the attorneys. They failed to pay. The court scheduled a show‐cause hearing. The attorneys, who claimed insolvency, did not comply with interrogatories and requests for production. After the attorneys attempted to interfere with their financial institutions’ compliance with subpoenas, the court held them in contempt. The Seventh Circuit affirmed. The attorneys continued their "shenanigans." The Lightspeed defendants discovered efforts to hide assets; the district court again imposed contempt and discovery sanctions. The Seventh Circuit dismissed Hansmeier’s appeal, noted that Duffy is now deceased, and affirmed the discovery sanction, but vacated the contempt sanction for Steele. View "Lightspeed Media Corp. v. Smith" on Justia Law

Caudill, the owner of a real estate brokerage, sued Keller Williams for breach of a 2001 franchise contract. Caudill's position as Regional Director of Keller Williams was terminated in 2010; her franchise was terminated in 2011. The suit settled with an agreement including a prohibition against disclosure of its terms, except to tax professionals, insurance carriers, and government agencies; those recipients had to promise to keep them in confidence. Any violation entitled the victim to damages of $10,000. Months later, Keller Williams issued an FDD (Franchise Disclosure Document) to about 2000 existing or potential franchisees and other parties, describing Caudill’s lawsuit in detail. The FDD was not required by the Federal Trade Commission under 16 C.F.R. 436.2(a). Caudill sought $20 million (2000 x $10,000) in damages. The district judge rejected her claim, noting that under Texas law a liquidated damages clause is enforceable only if “the harm caused by the breach is incapable or difficult of estimation and … the [specified] amount of liquidated damages is a reasonable forecast of just compensation.” The Seventh Circuit affirmed. It is unreasonable to suppose, without evidence, that the dissemination of the FDD caused Caudill a $20 million loss. Although the burden of proving that a liquidated damages clause is actually a penalty clause is on the defendant, Keller Williams established that there was no basis for the requested damages. View "Caudill v. Keller Williams Realty, Inc." on Justia Law