Articles Posted in U.S. 7th Circuit Court of Appeals

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KDC had cash flow problems and, in 2004, hired Johnson. Johnson retained the law firm (GPM) of his acquaintance, Tenenbaum. GPM sent KDC an engagement letter that included conflict‐waiver language regarding Johnson and a company affiliated with Johnson. Johnson soon resigned and joined First Products. GPM resigned as KDC’s counsel. KDC filed for Chapter 11 bankruptcy. Its assets were purchased at auction by First Products. No other bids were received; the bankruptcy court approved the sale. The bankruptcy was later converted to a Chapter 7 liquidation proceeding. The bankruptcy trustee hired Sullivan as special counsel. Sullivan had filed a shareholder derivative action before KDC filed for bankruptcy, alleging that directors and officers of KDC had conspired to defraud the company of its intellectual property by driving KDC out of business and purchasing its assets at bargain prices. In 2010, a Wisconsin state judge entered judgment, finding some defendants, including Johnson, had engaged in a civil conspiracy to defraud KDC and steal its assets. In 2012, KDC, through its bankruptcy trustee, brought claims against GPM, alleging involvement in the scheme to defraud KDC orchestrated by Johnson. On summary judgment, the district court determined that the remaining claims were barred by the six‐year Wisconsin statute of limitations because KDC was on notice of GPM’s alleged fraud by 2006, when Sullivan received KDC’s client file. The Seventh Circuit affirmed. View "KDC Foods, Inc. v. Gray, Plant, Mooty, Mooty & Bennett, P.C." on Justia Law

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Moon was a 26-year-old mother who had worked as a cashier, bank teller, and certified nursing assistant. She suffered from documented back and joint problems, mild sleep apnea, depression, and migraine headaches. Most of these problems are related to exceptional obesity: at a height of 5’5”, she weighs more than 400 pounds. In support of her application for disability benefits, Moon submitted extensive medical records. Her migraine headaches were diagnosed as early as 2005 and she saw doctors about her headaches many times. She was taking Imitrex and Motrin at the time of her May 2010 hearing. In his written decision denying benefits, the ALJ went through the standard five-step analysis and found that Moon was no longer engaged in substantial gainful activity and that her combination of impairments qualified as “severe,” but that she was still capable of doing sedentary work if she would be permitted to sit or stand at will. The ALJ relied on the opinions of two doctors who had reviewed medical records but had not examined Moon. The ALJ referred to “alleged headaches” dismissively. The Appeals Council and the district court upheld the denial. The Seventh Circuit reversed. The ALJ improperly discounted evidence of chronic migraine headaches. Because Moon is receiving disability benefits based on a later application, the only issue on remand will be whether she was disabled between August 2008 and the later date from which benefits have been paid. View "Moon v. Colvin" on Justia Law

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Jitka Vesel was shot with a handgun that was illegally purchased by Demetry Smirnov who found the weapon available for purchase on Armslist.com, a website that facilitates the sale of guns between private owners. Plaintiff filed suit on behalf of Jitka, alleging that Armslist's negligence in facilitating the sale proximately caused Jitka's death. The court concluded that plaintiff failed to allege any cognizable negligence claim for which Armslist could be held responsible for Smirnov's acts where no special relationship exists between the parties nor has one been alleged in the complaint; the district court did not err in denying plaintiff's motion to reconsider; the district court did not abuse its discretion in denying plaintiff leave to amend; and, therefore, the court affirmed the district court's dismissal of the complaint for failure to state a claim. View "Vesely v. Armslist LLC" on Justia Law

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After Janet Hahn died of diabetic ketoacidosis when she was a pretrial detainee at a correctional center, her husband and the administrator of her estate filed suit alleging that various government officials and private contractors failed to provide her adequate medical treatment. The district court dismissed some of plaintiffs' claims and granted summary judgment in favor of defendants on the remaining claims. The court concluded that the district court correctly dismissed the wrongful death claim but erred in dismissing it with prejudice where plaintiffs produced insufficient evidence to permit their claims against Sheriff Walsh and the jail's medical contractor to survive summary judgment. Therefore, the court reversed the district court's judgment insofar as it dismissed the wrongful death claim with prejudice. The court affirmed in all other respects. View "Hahn, et al. v. Walsh, et al." on Justia Law

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Plaintiff filed suit against the United States under the Federal Tort Claims Act, 28 U.S.C. 2671 et seq., after he was attacked by a fellow prisoner which resulted in blindness in one eye and serious impairment in the other eye. Plaintiff was released from prison while his suit was pending and failed to notify the court of his new address. Consequently, the suit was dismissed for failure to prosecute. Plaintiff, through counsel, later sought to set aside the dismissal twice and the district court denied his motion both times. Given the unusual gravity of plaintiff's injuries, the absence of any suggestion of prejudice to defendant from the delay in suing, and the district court's cursory treatment of the issue of equitable tolling, the court vacated and remanded to the district court for further consideration of the tolling issue. View "Hill v. United States" on Justia Law

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Plaintiff filed a wrongful death action against Union Pacific in state court after his parents were killed when a Union Pacific train derailed and caused a bridge to collapse. Union Pacific removed to federal court based on diversity jurisdiction where plaintiff's parents were domiciled in Illinois and Union Pacific is a Delaware corporation with its principal place of business in Nebraska. On appeal, Union Pacific challenged the district court's grant of plaintiff's request for leave to amend his complaint to add claims against two Illinois residents. The court held that, because the order granting leave to amend can be reviewed in state court, mandamus relief is neither necessary nor appropriate. In this instance, Union Pacific's appeal and request for a writ of mandamus must be dismissed. View "Lindner v. Union Pacific Railroad Co." on Justia Law

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Edmund Carman died after crashing his car into the back of a commercial pickup truck. His estate filed suit alleging state negligence claims in federal district court against the truck's driver (Daniel Tinkes), the driver's employer, and the truck's owner, invoking the court's diversity jurisdiction. The court affirmed the district court's grant of summary judgment in favor of defendants where a jury could find that Tinkes had illegally passed the other truck on the right but that a jury could not find that Tinkes's violation caused Carman to crash into his truck from the rear in the lane that Tinkes was leaving. View "Estate of Edmund M. Carman v. Tinkes, et al." on Justia Law

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In 2012 the Drug Enforcement Administration seized over $110,000 worth of smokable “incense products” from the Smoke Shop, a Delavan, Wisconsin retailer. At the time of seizure, the DEA believed that the incense products, which contained synthetic cannabinoids, were controlled substance analogues and illegal under federal drug laws. Smoke Shop sought return of its inventory in federal district court. Later, the substances in the incense products were scheduled by the Attorney General, rendering them contraband and eliminating Smoke Shop’s hopes of recovering the goods, so it brought a conversion action for damages under the Federal Tort Claims Act. The district court dismissed, finding that the government enjoyed sovereign immunity under the detained-goods exception to the FTCA, and, alternatively that Smoke Shop failed to exhaust its administrative remedies because it did not submit a claim for damages to either the DEA or the Department of Justice before filing suit. The Seventh Circuit affirmed on both grounds. View "Smoke Shop, LLC v. United States" on Justia Law

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Davis retained Fenton to represent her in a home foreclosure proceeding. Davis later sued Fenton for malpractice. Davis claimed that, although she paid Fenton several thousand dollars, he did virtually nothing to help her and that he targeted her for inferior service based on her race, in violation of the Fair Housing Act, 42 U.S.C. 3601. That case is stayed pending arbitration. Fenton brought his own lawsuit in state court, against Davis’s lawyers: Dudley and Sidea, alleging that they intentionally spread false information about him to clients and business associates. Fenton also alleged that Sidea, who had previously worked at Fenton’s law office, had improperly obtained confidential information about Fenton’s clients and shared it with Dudley. The complaint claimed conversion, tortious interference with a business relationship, and defamation. Dudley and Sidea filed a notice of removal in federal court, citing the general removal statute, 28 U.S.C. 1441, and the civil rights removal statute, 28 U.S.C. 1443. Days later, despite the ongoing removal proceedings, the Cook County Court entered an ex parte preliminary injunction against Dudley and Sidea. The district court found that the case did not meet the removal requirements under either 28 U.S.C. 1441 or 1443 and remanded, The Seventh Circuit affirmed. View "Fenton v. Dudley" on Justia Law

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JAB designs, manufactures, and sells men’s clothing and accessories and has 31 Illinois retail locations. In July 2012, Camasta went to the Deer Park JAB store. Before making his purchases, Camasta contends that he saw an advertisement about “sale prices.” At the time of Camasta’s visit, JAB customers were offered a promotion: “buy one shirt, get two shirts free.” Camasta paid $79.50 for one shirt getting two similar shirts for free, and bought another shirt for $87.50 allowing him to receive two more shirts for free. After this purchase, Camasta claims that he learned the JAB “sale” was not actually a reduced price, but was the JAB practice to advertise normal prices as temporary price reductions. Camasta asserts that but for his belief that the advertised sale was a limited time offer, he would not have purchased the six shirts. On behalf of himself and a putative class, Camasta filed a complaint, accusing JAB of violating the Illinois Consumer Fraud and Deceptive Business Practices Act and the Uniform Deceptive Trade Practices Act based on the company’s “sales practice of advertising the normal retail price as a temporary price reduction.” The district court dismissed. The Seventh Circuit affirmed, noting Camasta's "sparse" and "conclusory" allegations. View "Camasta v. Jos. A. Bank Clothiers, Inc." on Justia Law