Articles Posted in US Court of Appeals for the Seventh Circuit

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The plaintiffs, used car dealerships, were solicited by the defendant to enter into a “Demand Promissory Note and Security Agreement.” The defendant would issue a line of credit for the plaintiffs to access in purchasing used vehicles at automobile auctions. The plaintiffs claim defendant did not pay the auction house at the time that possession was delivered put paid only after it received the title to the vehicles purchased, which could take several weeks, but charged interest from the date of the initial purchase. The plaintiffs filed suit and sought class certification to sue on behalf of all other dealers who were subject to the same Agreement. The district court granted Rule 23(b)(3) class certification as to the breach of contract and substantive RICO claims. Weeks later, defendant filed a Motion to Reconsider, arguing that the plaintiffs had asserted in summary judgment briefing that the Agreements are ambiguous and that under such a theory courts must resort to extrinsic evidence on a plaintiff-by-plaintiff basis to determine intent. The court rescinded class certification. The Seventh Circuit vacated. Neither the categorization of the contract as ambiguous nor the prospect of extrinsic evidence necessarily imperils class status. The Agreement at issue is a standard form contract; there was no claim that its language has different meanings for different signatories. View "Red Barn Motors, Inc. v. NextGear Capital, Inc." on Justia Law

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Reed alleged that she suffered discrimination on the basis of her disabilities while she was a patient at Columbia in March 2012. She contends that the hospital failed to accommodate her disabilities by deliberately withholding from her a device she used to speak and discriminated against her by putting her in a “seclusion” room to punish her, in violation of the Americans with Disabilities Act (ADA), 42 U.S.C. 12181, the Rehabilitation Act, 29 U.S.C. 794, and the Wisconsin Mental Health Act. The district court granted the hospital summary judgment, holding that the hospital did not need to comply with Title III of the ADA because it fell within the Act’s exemption for entities controlled by religious organizations and that the hospital’s alleged mistreatment of Reed was not premised solely on Reed’s disability. The Seventh Circuit reversed. The hospital raised its religious exemption affirmative defense to the ADA claims for the first time after discovery, in its motion for summary judgment; it was an abuse of discretion to excuse the hospital’s failure to raise this affirmative defense earlier. Reed’s Rehabilitation Act claims depend on disputed facts. View "Reed v. Columbia St. Mary's Hospital" on Justia Law

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JCB, an Indiana state-chartered bank, had an agreement with INVEST, a registered broker-dealer, to offer securities to JCB customers. In 2017, JCB assigned DuSablon to assist in identifying and establishing an investment business with a new third-party broker-dealer. DuSablon failed to do so and abruptly resigned. JCB learned that DuSablon had transferred customers’ accounts from INVEST into his own name and had started a competing business. JCB sought a preliminary injunction, asserting violations of the Indiana Uniform Trade Secrets Act, breach of contract, breach of fiduciary duty, tortious interference, unfair competition, civil conversion, and computer trespass. DuSablon moved to dismiss, arguing that JCB lacked standing and that Financial Industry Regulatory Authority (FINRA) rules barred the suit; he removed the case, asserting exclusive federal jurisdiction under 15 U.S.C. 78aa and the Securities and Exchange Act. Although JCB did not plead a federal claim, DuSablon contended that JCB’s response to his motion to dismiss “raises a federal question as all of [JCB’s] claims ... rest upon the legality of direct participation in the securities industry which is ... regulated by the [Securities] Act.” The district court remanded,, concluding that it lacked jurisdiction and that removal was untimely, ordering DuSablon to pay JCB costs and fees of $9,035.61 under 28 U.S.C. 1447(c). The Seventh Circuit dismissed an appeal. DuSablon lacked an objectively reasonable basis to remove the case to federal court. View "Jackson County Bank v. DuSablon" on Justia Law

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The Seventh Circuit previously remanded for a determination of whether May had submitted a notice of appeal on or before August 10, 2015, in compliance with Federal Rule of Appellate Procedure 4(c). The district court allowed discovery, held a hearing, heard the testimony of two witnesses and examined seven exhibits, then held that May had not carried the burden of establishing that he mailed his notice of appeal in a timely fashion. The court determined that May’s testimony lacked credibility and that the remaining evidence established that the notice of appeal was not filed until sometime around October 15, 2015. The Seventh Circuit then dismissed his appeal for lack of jurisdiction. Statutory timelines for appeal are jurisdictional and cannot be waived, forfeited, or excused. View "May v. Mahone" on Justia Law

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In 2007, the Illinois Environmental Protection Agency (IEPA) brought charges before the Pollution Control Board against EOR Energy and AET Environmental under the Illinois Environmental Protection Act, 415 ILCS 5/1–5/58, for transporting hazardous‐waste acid into Illinois, storing that waste, and then injecting it into EOR’s industrial wells. EOR unsuccessfully argued in state courts that the IEPA and the Board did not have jurisdiction over EOR’s acid dumping. EOR asserted that it was not injecting “waste” into its wells but was merely injecting an acid that was used to treat the wells and aid in petroleum extraction so that the Illinois Department of Natural Resources had exclusive jurisdiction under the Illinois Oil and Gas Act, 225 ILCS 725/1. EOR then sought a federal declaratory judgment. The district court dismissed the case, citing the Eleventh Amendment and issue preclusion. The Seventh Circuit affirmed, “emphatically” rejecting the “undisguised attempt to execute an end‐run around the state court’s decision.” View "EOR Energy, LLC v. Illinois Environmental Protection Agency" on Justia Law

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Allstate investigated suspicious trading on its equity desk and unearthed email evidence that portfolio managers were timing trades to inflate their bonuses at the expense of portfolios, including pension funds to which Allstate owed fiduciary duties. Allstate retained attorneys, who hired consultants. The consultants used an algorithm to estimate a potential adverse impact of $91 million. Allstate poured $91 million into the portfolios. Allstate fired four portfolio managers. Allstate's 2009 Form 10-K and an internal memo explained these events, without mentioning the fired portfolio managers. The former employees sued, alleging defamation and that Allstate violated 15 U.S.C. 1681a(y)(2), the Fair Credit Reporting Act, by failing to give them a summary of the attorneys' findings after they were fired. A jury awarded $27 million in damages. The judge added punitive damages and attorney’s fees. The Seventh Circuit vacated and subsequently ordered dismissal. The 10-K and internal memo were not defamatory per se and are actionable (if at all) only on a theory of defamation per quod, which requires proof of special damages causally connected to the publication. The plaintiffs testified that they could not find comparable work after being fired, but presented no evidence that any employer declined to hire them as a consequence of Allstate’s statements. The four lacked a concrete injury to support Article III standing on the FCRA claim. View "Rivera v. Allstate Insurance Co." on Justia Law

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Websites like Airbnb serve as intermediaries, providing homeowners a forum for advertising short-term rentals of their homes and helping prospective renters find rooms and houses for temporary stays. Chicago’s 2016 Shared Housing Ordinance requires interested hosts to acquire a business license; its standards include geographic eligibility requirements, restrictions on how many units within a larger building can be rented, and a list of buildings where such rentals are prohibited. Approved hosts are subject to health, safety, and reporting requirements, including supplying clean linens and sanitized cooking utensils, disposing of waste and leftover food, and reporting illegal activity known to have occurred within a rented unit. Keep Chicago Livable and six individuals challenged the Ordinance. The Seventh Circuit remanded for a determination of standing, stating that it was not clear that any plaintiff had pleaded or established sufficient injury to confer subject matter jurisdiction to proceed to the merits. The individual owners did not allege with particularity how the Ordinance (and not some other factor) is hampering any of their home-sharing activities; the out-of-town renters did not convey with sufficient clarity whether they still wish to visit Chicago and, if so, how the Ordinance is inhibiting them. All Keep Chicago Livable contends is that the alleged uncertainty around the Ordinance’s constitutionality burdens its education and advocacy mission; it does not allege that it engages in activity regulated by the Ordinance. View "Keep Chicago Livable v. Chicago" on Justia Law

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BankDirect and Capital make loans to finance insurance premiums. In 2010, Capital, having exhausted the line of credit, approached BankDirect, which was willing to purchase Capital's loans and pay Capital to service those loans. BankDirect had a right to purchase Capital’s business after five years. If BankDirect did not purchase Capital, either party could extend the term by notice before January 4, 2016; otherwise, the agreement would terminate on January 31, 2016. Any extension could not go beyond June 1, 2018. BankDirect exercised the option in November 2015, but Capital refused to honor it. BankDirect sued. Capital sought an injunction to require BankDirect to continue purchasing loans and paying it to service them. BankDirect continued the arrangement through May 1, 2017, when it seized several Capital accounts and stated that it would no longer buy Capital's loans. BankDirect withdrew its request for specific performance. The district court concluded that Capital was entitled to a preliminary injunction so that the purchase‐and‐service arrangement would continue pending a judgment but did not address the 2018 terminal date or other disputes; failed to enter an injunction as a separate document under Fed. R. Civ. P. 65(d)(1)(C); and did not require Capital to post a bond (Rule 65(c)). The Seventh Circuit declined to address the merits or Rules 65(c) and (d), stating that the “injunction” should have contained a terminal date: June 1, 2018, and remanded for a determination of whether damages are available. View "Bankdirect Capital Finance, Inc. v. Texas Capital Bank National LLC" on Justia Law

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In November 2016, two plaintiffs sued Metra and several of its employees, alleging racial discrimination under 42 U.S.C. 1983. An amended complaint named 11 plaintiffs and 10 defendants, with additional claims of racial discrimination and a claim under the Americans with Disabilities Act; it described instances in which African-American employees were treated differently than white employees. Defendants asserted it was impossible to discern the alleged acts attributable to the individual defendants, and that the amended complaint contained incorrect numbering and failed to assert wrongdoing against five defendants. The plaintiffs did not respond. Plaintiffs then submitted the wrong version of a second amended complaint. After a hearing, the plaintiffs filed an amended second amended complaint, with claims by 12 plaintiffs against Metra and 11 employees, alleging racial discrimination; hostile work environment; disparate treatment; negligent and intentional infliction of emotional harm; discrimination under the Fourteenth Amendment; discrimination under Title VII, the Illinois Civil Rights Act, and the ADA; retaliation; and breach of contract. Defendants claimed the breach of contract claim was preempted by the Railway Labor Act, the Illinois Act has no application in employment law, and that Title VII and the ADA only authorize suits against employers, not individuals. The court denied the plaintiffs’ motion to file a third amended complaint. The Seventh Circuit affirmed. The plaintiffs had ample opportunity to address the deficiencies and waived their arguments in opposition to the motion to dismiss. View "Lee v. Northeast Illinois Regional Commuter Railroad Corp." on Justia Law

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An April 2016 Chicago Police Accountability Task Force report indicated that the Chicago Police Department’s “response to violence is not sufficiently imbued with Constitutional policing tactics.” In January 2017, the U.S. Department of Justice released a report concluding that the Chicago Police Department exhibits a pattern or practice of the unconstitutional use of force. In August 2017, the state sued the city, alleging that the Chicago Police Department’s use-of-force policies and practices violate the federal constitution and Illinois law. Two days later, the parties moved to stay the proceedings while they negotiated a consent decree. Almost immediately, the Fraternal Order of Police, Lodge 7, publicly opposed any consent decree, citing fears that the decree might impair its collective bargaining rights. For months, the Lodge monitored the ongoing negotiations and met informally with the state’s representatives. The Lodge nonetheless waited until June 2018, to file a motion to intervene in the suit. The district court denied the motion to intervene as untimely. The Seventh Circuit affirmed. The Lodge knew from the beginning that a consent decree might impact its interests but delayed its motion for nearly a year; its allegations of prejudice are speculative. View "Illinois v. Chicago" on Justia Law