Articles Posted in US Court of Appeals for the Seventh Circuit

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In 2007, Fendon borrowed money from Bank of America, secured by a home mortgage. A borrower may rescind such a transaction for any reason within three days and for some reasons within three years, 15 U.S.C. 1635. Fendon alleges that he notified BOA on August 15, 2008; April 16, 2009; and June 17, 2010, that he was rescinding the loan, and that BOA ignored the first two notices and rejected the third. In 2011, BOA filed a foreclosure action. In 2016, a state court entered a final judgment confirming the foreclosure sale. Fendon filed suit under the Truth in Lending Act after the sale. The Seventh Circuit affirmed dismissal. Federal district courts lack authority to revise the judgments of state courts. Even damages relief, which would not disturb the state judgment, is untimely under the Act. If Fendon had filed suit before the foreclosure action, he might have had a strong argument that rescission could be enforced at any time but he did not. After BOA ignored his notices of rescission, he ignored BOA. By 2016, when he filed suit, the only possible relief was damages. BOA did not say or do anything after September 2008 that established either equitable tolling or estoppel. View "Fendon v. Bank of America, N.A." on Justia Law

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In 2007, Kaufman filed a class‐action lawsuit based on Amex’s sale of prepaid gift cards. The packaging declared the cards were “good all over.” Kaufman alleged that these cards were not worth their stated value and were not “good all over” because merchants were ill‐equipped to process “split‐tender” transactions when a holder attempted to purchase an item that cost more than the value remaining on his card. After 12 months Amex automatically charged a “monthly service fee” against card balances. Kaufman alleged Amex designed the program to make it difficult to exhaust the cards' balances. Following the denial of Amex’s motion to compel arbitration, settlement negotiations, and the entry of intervenors, the court certified the class for settlement purposes but denied approval of a settlement, citing the inadequacy of the proposed notice. Response to notices of a second proposed settlement was “abysmal.” A supplemental notice program provided notice to 70% of the class; the court again denied approval. After another round of notice, the court granted final approval in 2016, noting the small rate of opt‐outs and objectors. The court awarded $1,000,000 in fees and $40,000 in expenses to the Plaintiffs’ counsel, $250,000 to additional class counsel, and $700,000 in fees to intervenors' counsel: attorneys would receive $1,950,000. The court concluded the total value of the claims was $9.6 million, that, considering the number of claims and the value of supplemental programs, the total benefit to the class was $1.8 million, and that recovering $9.6 million was unlikely. The Seventh Circuit concluded that the court did not abuse its discretion, despite the settlement’s “issues.” View "Goodman v. American Express Travel Related Services Co., Inc." on Justia Law

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After losing his job at Mutual Bank, Conner filed a qui tam action claiming that the defendants, primarily directors or officers of the bank, had defrauded the government in violation of the False Claims Act, 31 U.S.C. 3729–3733. The United States declined to take over the action, which Conner eventually settled. The Federal Deposit Insurance Corporation filed its own lawsuit against many of the same defendants. That case also settled. Conner claimed to be entitled to a share of the FDIC’s settlement proceeds and tried, unsuccessfully, to intervene in the FDIC’s case. He then filed a motion in his own suit action demanding part of the FDIC’s recovery. The district court denied that request on the ground that, because Conner’s attempt to intervene in the FDIC’s case was rejected, he is barred from litigating in this suit the question whether he has a cognizable interest in the settlement proceeds. The Seventh Circuit affirmed, holding that claim preclusion barred Conner’s recovery from the FDIC. View "Conner v. Mahajan" on Justia Law

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May, an Illinois prisoner, filed a pro se suit under 42 U.S.C. 1983, claiming that prison physicians failed to provide adequate medical care for his non-Hodgkins lymphoma. The district court entered summary judgment for the defendants on February 11, 2015. A separate judgment was never entered on the docket, so May had 180 days to file a notice of appeal (150 days until the judgment was deemed entered plus 30 days) to file a timely appeal by August 10. A document from May, mailed on September 5, 2015, requested an update on his “appeal,” claiming that he had mailed a notice of appeal on February 18. He attached copies of the purported notice, his inmate Legal Mail Card, a request that the clerk transmit the record on appeal, and an application to proceed in forma pauperis. On October 20, the district court docketed a second notice of appeal from May, dated February 20. The defendants argued that May was litigating several cases and that May’s evidence did not substantiate his assertions. The Seventh Circuit remanded, concluding that it lacked sufficient information to resolve whether the prison mailbox rule applied. The Mail Card does not describe the item mailed and on February 23 the district court docketed an unrelated submission from May in another case. Resolution of this matter will involve issues of credibility. View "May v. Mahone" on Justia Law

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Edwards owns a taxicab in Milwaukee and gets referrals from Yellow Cab. Edwards leased the cab to Giri, who subleased some of the time to Chapman so that the cab could be in service much of the day. Chapman received fares and tips, paid rent to Giri, and kept the difference; he did not pay or receive anything from Yellow Cab. Chapman argued, in his suit under the Fair Labor Standards Act that he was a Yellow Cab “employee” and that, after he complained about not receiving the minimum wage, Mohamed, Yellow Cab's President, told Giri that Chapman was “fired” (would not be dispatched to passengers calling Yellow Cab). Giri then terminated the sublease. Chapman argued that Mohamed’s action violated the Act’s anti-retaliation clause, 29 U.S.C. 215(a)(3). His suit was dismissed with prejudice. The judge stated that Chapman had not addressed all of the relevant factors. The Seventh Circuit affirmed. While federal court plaintiffs need not plead all legal elements plus facts corresponding to each, Chapman’s claim was implausible because it did not allege any direct dealings between himself and Yellow Cab. When the court requested more, Chapman did not respond with a plausible claim. He failed to provide additional details, insisting that, because Yellow Cab affected his driving through the chain of leases, it must be his employer. View "Chapman v. Yellow Cab Cooperative" on Justia Law

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In 2007, a Palatine police officer issued Collins a parking ticket, placing the bright yellow ticket under his car’s wiper blades. The ticket listed his name, address, driver’s license number, date of birth, sex, height, and weight. Collins claims that the display of his personal information violated the Driver’s Privacy Protection Act (DPPA), 18 U.S.C. 2721. In 2016, he sued the village on behalf of himself and a proposed class. The DPPA’s statute of limitations is four years but a purported class action filed in 2010 (Senne’s case) tolled the statute for everyone in the proposed class. In 2010, before Senne filed a class certification motion, the district court dismissed for failure to state a claim. The Seventh Circuit reversed. The district judge again entered summary judgment and “terminated” a motion for class certification as moot. The Seventh Circuit affirmed. In November 2015, the Supreme Court denied certiorari; on the same day, Senne’s attorney, Murphy, filed a successor class action on behalf of himself and a proposed class as a placeholder. Murphy later filed this suit naming Collins as the class representative. The district court held that Collins’s claim was time-barred and denied the motion for class certification. The Seventh Circuit affirmed. Dismissal with prejudice strips a case of its class-action character. Tolling stops immediately when a class-action suit is dismissed—with or without prejudice—before the class is certified. View "Collins v. Village of Palatine" on Justia Law

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To track accounting, payroll, inventory, sales, parts, service, finance, and insurance, auto dealerships use computerized dealer‐management systems. Some systems use open architecture, under which third parties have some access to dealer‐originated data in the system. Others use closed architecture, under which that type of data scraping is forbidden under the license. One provider, CDK, decided to change from an open system to a closed system. CDK and another provider, Reynolds, entered into agreements to ease the transition, which allowed their subsidiaries (Authenticom’s competitors) continued access to the data. Authenticom, in the business of collecting data from dealer‐management systems and selling or using it for applications, sued under the Sherman Act, 15 U.S.C. 1. Because Authenticom’s loss of access to the data was imperiling its survival, it obtained preliminary injunctions. CDK and Reynolds took an interlocutory appeal. The Seventh Circuit vacated the injunctions, which did not focus on the agreements that are the focus of Authenticom’s lawsuit. Instead, they address the measures that the court believed necessary to “extend a lifeline to Authenticom, to maintain its viability until this case is finally decided on the merits.” The court ordered the defendants to enter into a new arrangement with Authenticom, rather than simply barring implementations of the challenged agreement. View "Authenticom, Inc. v. Reynolds and Reynolds Co." on Justia Law

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Fadden earned over $100,000 per year but did not submit tax returns. After an audit, the IRS garnished his wages. Fadden filed for bankruptcy, triggering an automatic stay. Fadden claimed that he had no interest in any real property nor in any decedent’s life insurance policy or estate. Fadden actually knew that he would receive proceeds from the sale of his mother’s home (listed by the executor of her estate for $525,000) and would receive thousands of dollars as a beneficiary on his mother’s life insurance policies. A week later, Fadden mentioned his inheritance to a paralegal in the trustee’s office and asked to postpone his bankruptcy. When Fadden finally met with his bankruptcy trustee and an attorney, he confirmed that his schedules were accurate and denied receiving an inheritance. The Seventh Circuit affirmed his convictions under 18 U.S.C. 152(1) for concealing assets in bankruptcy; 18 U.S.C. 152(3) for making false declarations on his bankruptcy documents; and 18 U.S.C. 1001(a)(2) for making false statements during the investigation of his bankruptcy. Counts 1 and 2 required proof of intent to deceive. Fadden proposed a theory-of-defense instruction based on his assertion that his conduct was “sloppiness.” The Seventh Circuit upheld the use of pattern instructions, including that “knowingly means that the defendant realized what he was doing and was aware of the nature of his conduct and did not act through ignorance, mistake or accident.” View "United States v. Fadden" on Justia Law

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DT&C, a Chicago ground transportation company, and its owners were sued by former employees and the Secretary of Labor for violating state wage‐payment laws and the Fair Labor Standards Act, 29 U.S.C. 201. After the defendants ignored court orders, the district judges entered default judgments for the plaintiffs. Eleven months later, the defendants moved to vacate both judgments, FRCP 60(b), arguing that the company had closed in 2015 and no longer received mail at the office address and that one of the owners was in poor health so that he did not keep in contact with the lawyer. The Sixth Circuit affirmed the denial of the motions. Because the defendants did not show good cause for the default, did not act quickly in filing motions to vacate, and failed to articulate any meritorious defenses, the district judges did not abuse their discretion. The default was the result of “inattention to the litigation” rather than illness, and the defendants had not shown that they had a legitimate defense. View "Krantz v. DT & C Global Management LLC" on Justia Law

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In 2011, Cosenza sought disability benefits on behalf of her minor son. An ALJ determined that J.M.F. was not disabled. The Appeals Council denied her request for review. Cosenza argued that the ALJ improperly found that her son’s autism and Asperger’s syndrome were not “medically determinable” impairments. The district judge granted Cosenza summary judgment and remanded under 42 U.S.C. 405(g); 5), terminating the case in the district court. On remand, another ALJ conducted a hearing in March 2016. In June Cosenza filed a motion in the closed federal case to hold the Commissioner in contempt “for not following court-ordered remand.” In July the ALJ ruled against Cosenza. Cosenza did not wait for the decision to become final but moved for summary judgment in the closed federal case and filed a letter with the Appeals Council requesting review. The district court granted the agency’s motion to strike, reasoning that it had relinquished jurisdiction over Cosenza’s first case; as to most recent decision, the administrative appeals process had not finished so no final decision existed for judicial review. Cosenza had not shown that the Commissioner violated the court’s remand order. The Seventh Circuit affirmed. A district court lacks jurisdiction under the Social Security Act to review an ALJ’s unfavorable decision until the agency’s decision is final; the Appeals Council has not yet decided whether to review the ALJ’s decision. View "Cosenza v. Berryhill" on Justia Law