Seventh Circuit Court of Appeals Commentary : In Their Opinion : Lawyer & Attorney Michael E. Rigney : Kelley Drye & Warren Law Firm

INTERACTIVE INTELLIGENCE, INC. v. KEYCORP (October 24, 2008) 

For seven years, KeyBank provided foreign exchange currency conversion services to Interactive Intelligence, Inc. (“Interactive”). The parties operated without a written contract for three years. They signed a written agreement in 2001, but the agreement was silent on how Interactive was going to compensate KeyBank. Apparently, Interactive believed it paid a service fee on each transaction. In fact, KeyBank charged Interactive a percentage mark-up on each transaction. The amount of the mark-up increased over time. Adam Ravens was the KeyBank employee who managed the Interactive account. Ravens never told Interactive that he was applying a spread. Interactive, on a couple of occasions, was troubled by the difference between the market rates for the transactions and what they were paying KeyBank. They inquired but never received an adequate response. Interactive brought this action against KeyBank to recover more than $2 million in alleged overcharges. The district court granted summary judgment to KeyBank. Interactive appeals. 

In their opinion, Judges Ripple, Rovner, and Evans affirmed. The Court first addressed Interactive’s principal argument that it was a third-party beneficiary of a contract between Raven and KeyBank. There was no employment contract between Raven and KeyBank of which Interactive could be a beneficiary. Although Raven did sign a Code of Ethics, which he allegedly breached, the Court observed that it would be against public policy for customers to be considered a third-party beneficiary of an ethics code. The Court was concerned that such an approach would encourage companies to weaken or eliminate codes of conduct. Thus, the district court properly granted summary judgment on this claim. Next, the Court upheld the court below on the negligent supervision, breach of fiduciary duty, and breach of contract claims. The Court held that: a) since Ravens had no duty to Interactive, KeyBank could not have been negligent, b) Ravens had no fiduciary duty to Interactive, and c) the oral contract that left the price term to be negotiated was too vague to be enforceable.  

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LEISTER v. DOVETAIL, INC.  (October 23, 2008)

Sandra Leister and Michelle and Evan Peterson worked together at a company that provided employee assistance programs to employers. In 1997, the Petersons purchased some of their employer’s program contracts and formed Dovetail to administer those contracts. They hired Leister, a psychologist, to work for Dovetail. As one of the benefits of employment, they agreed to deposit a percentage of her salary into a 401(k) account. They complied with their promise for about a year and then began diverting Leister’s money to their own benefit. They also refused to provide Leister with documentation of her rights under the plan. Leister brought this action under ERISA to recover the contributions that Dovetail was obligated to make to her account and for statutory penalties. The district court found a willful breach of the defendants’ fiduciary duties and awarded Leister $82,741 for the contributions not made. The court declined to impose statutory penalties for the Peterson’s failure to provide plan documents, relying on their dire financial circumstances. The defendants and Leister each appeal.

In their opinion, Judges Bauer, Posner, and Williams affirmed in part, reversed in part, and remanded. The Court first addressed two preliminary matters – whether there was enough of a writing to satisfy ERISA and the impact of Leister’s failure to name the plan as a defendant – and resolved each of them in Leister’s favor. It then proceeded to the statute of limitations issue. ERISA complaints are governed by two limitations provisions. Complaints for breach of a fiduciary duty under sections 1101 to 1114 must be brought within the shorter of six years from the breach or three years from the date when the plaintiff had actual knowledge of the breach. Complaints for benefits due under the plan pursuant to section 1132(a)(1)(b) are governed by the most analogous state limitations period, in this case Illinois’ ten-year statute for breach of a written contract. Leister sought relief under both sections 1104 and 1132(a)(1)(b), but the district court based its judgment only on section 1104. Since Leister’s complaint was filed more than six years after the defendants’ first breach, her recovery would be limited under 1104. The Court found that a) she was entitled to relief under both sections, b) she was entitled to more relief under section 1132(a)(1)(b), and c) she met the ten-year statute of limitations. Under 1132(a)(1)(b), Leister was entitled to the unpaid contributions as well as a reasonable estimate of their investment growth over time. The Court accepted Leister’s cross-appeal argument that the district court erred in not considering the tax-free status of the contributions. It directed the court to recalculate the benefits on remand.

Leister also “shoehorn[ed]” a claim for sales commissions into her ERISA claim. The Court found that the district court erred in treating it as an ERISA claim even though Leister alleged that she would have deposited the commissions into her 401(k) account. Nevertheless, the Court noted that the claim was also pleaded as a state law claim and would be considered in that context on remand. The Court offered guidance to the district court on the state law claim: a) it has a shorter limitations period than the ERISA claims because it is not a written contract, b) Leister cannot recover tax benefits as if she would have deposited the money into her 401(k), and c) an Illinois statute may allow for an award of attorneys’ fees. Lastly, the Court addressed Leister’s argument that the court erred in not awarding statutory penalties. The Court observed that penalties, in whatever form, are meant to deter. Although deterrence can be achieved with smaller awards against poorer defendants, an award of no penalties against a solvent defendant who commits a willful breach is unreasonable. The district court’s decision was an abuse of discretion.

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ORTH v. WISCONSIN STATE EMPLOYEES UNION  (October 22, 2008)

Ron Orth retired in 1998. The collective bargaining agreement covering his employment required his employer to provide health insurance to retirees. It also required the employer to pay 90% of the premium. Finally, it stated that the monetary value of an employee’s unused sick leave upon retirement, if any, would be used to pay the employee’s share of the premium. Notwithstanding these provisions, the benefits plan of Orth’s former employer deducted all of the premium amounts from Orth’s sick leave account, using it up in eight years. Orth brought this action, with his wife, against his former employer and its benefits plan, alleging that they violated ERISA. The defendants admitted that the terms of the written plan were as alleged by the Orths but maintained that the plan had been modified through the conduct of the parties over time. The district court granted summary judgment to the Orths and awarded attorneys’ fees. The defendants appeal.

In their opinion, Judges Bauer, Posner, and Williams affirmed. The Court observed the general rule that a contract can be modified by the subsequent dealings of the parties. ERISA, however, requires that plans be in writing. The Court held that amendments to plans must be in writing as well. The ERISA plan, therefore, could not be amended by conduct. The Court went on to consider whether the fact that the plan was a creature of a collective bargaining agreement made a difference. Collective bargaining agreements are often modified orally or by subsequent dealings. Employees are not even parties to the agreements. A collective bargaining agreement can be modified without an employee’s consent, as it was here. The union does owe a fiduciary duty to its members, but the Orths do not complain of a breach of the union’s fiduciary duty. But, the Court went on, the welfare plan also owes a fiduciary duty to its participants. Although the plan can be changed without the consent of the participants, the change in this case was made without notice to the participants. That, said the Court, is a violation of the plan manager’s fiduciary duty to the participants (as well as a violation of law).

The defendants also quarrel with the award of damages and fees. The Court agreed that ERISA does not allow consequential damages, but it declined defendants’ invitation to characterize the award of premiums the Orths paid to maintain coverage after their sick leave account was drained as consequential damages. The Court roundly rejected defendants’ argument that the district court erred when it awarded fees on a finding of “no substantial justification” for their position. To the contrary, the Court said, it questioned whether the district court was even correct in its opinion that the defendants acted in good faith. Finally, the Court found no merit in defendants’ argument that the $41,000 fee award was excessive given that the damages awarded to the Orths was about the same. The Court found no error, remarking that one reason fee awards exist is to allow people with small losses the ability to recover those losses.

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SYCAMORE INDUSTRIAL PARK ASSOC. v. ERICSSON  (October 20, 2008)

Ericsson used to manufacture wiring and cable at its 28-acre, nine-building facility in Sycamore, Illinois. The buildings were heated by two large steam boilers and a network of piping. Most of the system is insulated. In January of 1983, Ericsson ceased its operations and decided to sell the property. Michael Kreiger, Ericsson’s property manager at the site, decided to buy the property and operate it as an industrial park. Between December of 1984 and the spring of 1985, Ericsson installed natural gas heaters throughout the property and discontinued the use of the steam boiler system. Meanwhile, Kreiger agreed to buy the building and formed Sycamore Industrial Park Associates (“Sycamore”) to hold title to the property after the purchase. The sale closed in May of 1985 and the property was immediately assigned to Sycamore. Sycamore discovered asbestos in the insulation of the boilers and associated piping. Sycamore brought an action against Ericsson based on CERCLA and RCRA to compel it to remove the asbestos. The court granted summary judgment for Ericsson, holding that the abandonment of the insulation in place was neither a CERCLA “disposal” nor a RCRA “handling, storage, treatment, transportation, or disposal.” Sycamore appeals.

In their opinion, Judges Flaum, Williams, and Sykes affirmed. The Court first addressed the CERCLA claim. To prevail, Sycamore had to show that Ericsson owned the facility at the time it “discharged, deposited, injected, dumped, spilled, or leaked” a solid or hazardous waste. The Court referred to its prior decision in G.J. Leasing for the proposition that asbestos abandoned in place in a structure does not create CERCLA liability, even when the structure is sold. CERCLA “disposal” requires a threat that the asbestos will be emitted or discharged into air or water. Here, all of the asbestos is enclosed and not a threat to enter the environment. The Court found no CERCLA liability and proceeded to address the RCRA count. To prevail on its RCRA count, the Court stated that Sycamore had to show that Ericsson “handled, stored, treated, transported, or disposed of” solid or hazardous waste. Because RCRA and CERCLA use the same definition of disposal, the Court adopted its analysis of the CERCLA claim to conclude that there was no RCRA disposal either. The district court properly entered judgment for Ericsson on the both counts. 

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AMRHEIN v. HEALTH CARE SERVICE CORP.  (October 20, 2008)

Kitsy Amrhein was a group specialist in Health Care Service Corp.’s (“HCSC”) Springfield office. Her principal duty was to service employers that have Blue Cross/Blue Shield Insurance. Amrhein and Scott Redpath became group specialists at the same time. In addition to Amrhein and Redpath, the group consisted of six other women. The group all reported to Benner, who reported to Marquedant, who reported to Woods. In late 2002, Amrhein became convinced that Redpath was performing at a lower level than she but receiving preferred treatment. She made her opinion known to others, including Benner, and continued to do so throughout 2003. HCSC disciplined Amrhein twice in 2003, once for disclosing competitive information and once for excessive personal phone use. After the discipline for the telephone use, things started to heat up.

• Amrhein, Brenner, and Marquedant met in early December to discuss the telephone issue. At that meeting, Amrhein first said that she was considering filing an EEOC complaint.
• In December, Marquedant initiated a human resources investigation in response to an Amrhein e-mail complaint. In January of 2005, Amrhein met with Marquedant and the human resources representative. The human resources representative reported that the investigation revealed no evidence of gender discrimination towards Amrhein. Again, Amrhein said she was going to file an EEOC complaint.
• In January, Marquedant monitored a phone conversation where Amrhein revealed what Marquedant believed was confidential information.
• In early February, Woods asked her supervisor for help in dealing with Amrhein. She referred to Amrhein as a “huge challenge,” “disruptive,” and “costing a huge amount of time and resources.”
• At a meeting in February regarding personal time, Amrhein complained about her inability to use some accrued time. Marquedant told Amrhein that she had opened a “can of worms” and that she should not have “made the complaint.” Witnesses stated that Amrhein became very argumentative with Marquedant, but Amrhein denies it.

HCSC terminated Amrhein on March 1 for her insubordination at the February meeting and the improper confidential information disclosure in January. Amrhein brought an action pursuant to Title VII of the Civil Rights Act of 1964. She alleged that HCSC discriminated against her on the basis of gender and that HCSC retaliated against her because of her complaints about the discrimination. The district court granted summary judgment for HCSC. Amrhein appeals.

In their opinion, Judges Bauer and Wood affirmed. Judge Rovner dissented. Amrhein did not appeal the judgment on the discrimination itself so the Court addressed only the retaliation claim. The majority observed that an employee can establish discrimination for opposing an unlawful business practice in two ways. In the first (the direct method), she must show a) a statutorily protected activity, b) the employer’s materially adverse action, and c) a causal connection. The majority concluded that Amrhein’s circumstantial evidence was insufficient to support an inference that her termination was related to her threat to file an EEOC complaint. The Court agreed that the timing of events can provide that inference, but found that the almost three month period between Amrhein’s first “threat” to file a complaint and her termination was too attenuated to do so. In the second (the indirect method), an employee can show a) a protected activity, b) her performance meeting legitimate employment expectations, c) an adverse employment action, and d) less favorable treatment than a similarly situated employee who did not engage in the protected activity. The Court concluded that Amrhein did not identify a similarly situated individual. Such an individual need not be identical, but must be comparable in material respects. None of the three individuals suggested by Amrhein had comparable disciplinary histories. The Court added that even if Amrhein had met her indirect method burden, there was ample evidence to support HCSC’s proffered reasons for the termination.

Judge Rovner dissented, admitting that it was a close case. She focused on the statements of Woods and Marquedant in February, just before the decision to terminate. She believed that they implied a retaliatory intent and that the Court should treat the case as a mixed motive case. In such a case, the employer must prove that it would have made the same decision had it not considered the protected activity. Judge Rovner noted that mixed motive cases are rarely summary judgment cases. Because of the questions of fact regarding whether HCSC would have fired Amrhein absent their unlawful motive, she would remand the case for trial.

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CLASSIC CHEESECAKE CO. v. JP MORGAN CHASE BANK  (October 17, 2008)

Classic Cheesecake Co. (“Classic”) is a bakery that successfully generated some interest from several Las Vegas casinos and hotels in its products. It needed additional capital to fund its expansion. In July of 2004, Classic’s principals made a pitch to Dowling, a vice president at JP Morgan Chase Bank (“Bank”). After receiving documentation, Dowling assured Classic that its loan would be approved, provided that one of its principals repaid an old student loan. Dowling continued to provide assurances to Classic as late as September 19. Meanwhile, as early as August 19, Dowling’s superior at the Bank advised her that he was “still declining” the request for funds. Dowling finally advised Classic on October 12 that the loan was not approved. [These are allegations of the complaint, taken as true.] Classic brought suit under the Equal Credit Opportunity Act (“ECOA”) and for breach of contract under Indiana law. It alleged losses of more than $1 million. The district court resolved the ECOA claim in Classic’s favor (with only modest relief) but dismissed the breach of contract claim.  Classic appeals. 

In their opinion, Judges Posner, Flaum, and Evans affirmed. The Court first rejected Classic’s attempts to cast the controversy as one of simple promissory estoppel or fraud. It limited Classic to its breach of contract remedy. The Court turned to the Indiana statute of frauds. Although the statute of frauds requires that contracts to lend money be in writing, Indiana courts have created an exception. Oral agreements unenforceable under the statute of frauds will be enforced if a failure to enforce the agreement would create an “unjust and unconscionable injury and loss” that is independent of the benefit of the bargain. The Court’s task was to decide whether the allegations of Classic’s complaint could meet that standard. The task was not an easy one, given the “vague . . . and redundant” nature of the test and the relative dearth of case law. The Court explored some history of the exception to the statute of frauds:

• The California Supreme Court’s (Traynor, J.) 1950 decision in Monarco that first allowed promissory estoppel as a defense to the statute of frauds but only if “unconscionable injury or unjust enrichment” would otherwise result
• Restatement (Second) of Contracts section 139(1) which allows promissory estoppel as a defense if “injustice” is avoided but which Indiana has not embraced
• The only two cases (Madison Tool & Die and Keating) that survived summary judgment under the Indiana formula

The Court noted that Monarco contained an element of unjust enrichment but neither Madison nor Keating did. Each of the cases contained significant “reliance” losses beyond the loss of the contract bargain, but the Court said that simple reliance losses (i.e., promissory estoppel) certainly does not meet the Indiana test. The Court held that the Indiana test, a compromise between the policy behind the statute of frauds and the desire to protect reasonable reliance, requires proof of "enhanced" reliance. The common thread among Monarco, Madison, and Keating was a time factor. In each case, the reliance continued for a longer time (20, 3, and 1.5 years) than the few months at issue for Classic. The Court also observed that Classic’s reliance may not have been totally reasonable. The Court concluded that Classic did not meet the enhanced promissory estoppel test and the complaint was properly dismissed.

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CHAUDHRY v. NUCOR STEEL  (October 15, 2008)

Subhash Chaudhry has worked at Nucor, which manufactures rolled steel sheets, since 1988. In 2007, he worked as a Quality Control Inspector (“QCI”). [The following are allegations of the complaint, taken as true.] His responsibilities included inspecting the rolled steel sheets produced at the temper mill. Nucor increased the pay grades of some QCIs in 2003, but not those, like Chaudhry, who worked at the temper mill. Chaudhry’s complaints fell on deaf ears. Chaudhry complained that some of his co-workers made fun of him and called him names. Those complaints were ignored as well. Chaudhry also tried to improve his salary through a program in which QCIs who attended a training session and made four customer visits in a year could qualify for a pay grade increase. Chaudhry frequently asked for opportunities to make a customer visit.  Nucor controlled the visits and never gave him such an opportunity. On July 28, 2006, Chaudhry filed a charge of discrimination with the EEOC. He alleged that Nucor’s failure to give him the pay raise that they gave other QCIs amounted to discrimination against him on account of his race, religion, and national origin in violation of Title VII of the Civil Rights Act of 1964. He further stated that Nucor had prevented him from making customer visits and qualifying for a pay grade increase. In a later letter to the EEOC, he complained of the harassment. On February 7, 2007, Chaudhry filed suit alleging that Nucor violated Title VII by: a) raising the salaries of other QCIs whose jobs required less effort, b) informing other QCIs of customer visit opportunities, and c) failing to control the employees’ harassment of him. Nucor initially answered the complaint. A few months later, however, the Supreme Court decided Ledbetter. Nucor, relying on Ledbetter, asked the district court to dismiss the complaint. The court agreed and dismissed the pay discrimination claim. It also dismissed the harassment claim, holding that it was not a part of the EEOC charge and Chaudhry’s letter did not expand the scope of the charge. The court then dismissed the case and entered final judgment (the same day) without addressing the customer visit charge. Chaudhry attempted to amend his complaint to add a § 1981 claim. Nucor objected because judgment had already been entered. In his reply, Chaudhry asked the court to treat his motion as a motion to amend the judgment. The court apparently did so but treated the date of the reply brief as the date of the motion and denied it as untimely. Chaudhry appeals.

In their opinion, Judges Bauer, Flaum, and Williams reversed and remanded. The Court began its analysis with Title VII and Ledbetter. Before filing a Title VII complaint, an employee must file a charge with the EEOC. The charge must be filed within 300 days of the alleged unlawful employment practice. The alleged unlawful employment practice, under Ledbetter, is the single, discrete unlawful act at issue, even if the effects of the act continue with each paycheck. The Court agreed with the conclusion of the district court that the discrete act with respect to the raise claim was Nucor’s June, 2003 decision to give raises to the other QCIs. Since Chaudhry did not file his charge within 300 days of that date, the district court correctly dismissed this claim.

With respect to the customer visit claim, however, the same analysis produced a different result . The Court observed that Chaudhry’s EEOC charge and complaint alleges that Nucor denied him a raise every year by preventing him from participating in customer visits. Each of those decisions was a new violation. Since Chaudhry filed his charge within 300 days of the last of those acts, his customer visit claim is not time-barred by Ledbetter. The Court also rejected Nucor’s claim that its alleged failure to notify Chaudhry of a customer visit opportunity was not a materially adverse employment decision. The failure to notify deprived Chaudhry of compensation which he would have earned, at least as the complaint reads, but for the failure.

The Court commented on the pleading amendment dispute as well, although the remand eliminated any need to decide the issue. The Court criticized the district court, referring to its actions in entering judgment on the same day it granted the motion to dismiss as “unorthodox” and its handling of the motion to reopen as “hyper-technical.”

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LASKOWSKI v. SPELLINGS  (October 14, 2008)

In 1999, Congress appropriated $500,000 to the Department of Education (“DOE”) for a grant to the University of Notre Dame to support a teacher quality program. Notre Dame applied for the grant, indicating that the money would support its Alliance for Catholic Education (“ACE”) program. ACE places and trains teachers in Catholic schools in poor neighborhoods. DOE awarded the grant. Laskowski and Cook, two federal taxpayers, sued the Secretary of the DOE, alleging that the appropriation violated the Establishment Clause. The plaintiffs sought to enjoin the award of the money but did not seek preliminary injunctive relief. Notre Dame intervened. By the time the court heard the case, the DOE had already paid the full amount of the grant to Notre Dame. The court dismissed the case as moot. The plaintiffs appealed, conceding their request for injunctive relief was moot but contending that other remedies were available. The Seventh Circuit panel agreed that the court could not order the DOE to attempt to recover the money from Notre Dame but split on whether the court could order Notre Dame to repay the disbursed funds, if the appropriation violated the Establishment Clause. The majority reversed the dismissal, holding that it could so order. The United States Supreme Court granted certiorari, vacated the judgment, and remanded for reconsideration in light of their decision in Hein v. Freedom From Religion Found.

In their opinion, Judges Posner, Evans, and Sykes affirmed. The only issue facing the Court was whether the plaintiff taxpayers had standing to seek restitution of the grant money from Notre Dame to the U.S. Treasury. The panel began with the general standing rule that payment of taxes is a very generalized interest and usually not enough to establish standing to challenge the constitutionality of government activity. The Court focused on the one exception to the rule. The Supreme Court decided in Flast that a taxpayer could seek to enjoin a specific appropriation of Congress as a violation of the Establishment Clause if the appropriation was made pursuant to Congress’ Article 1, Section 8 taxing and spending power.  

Hein presented a slightly different twist to the standing issue. The Hein taxpayers brought an Establishment Clause challenge to an Executive Branch program funded out of its own general appropriations.  A divided panel of the Seventh Circuit found standing.  The Supreme Court reversed. A three-justice plurality declined to extend the Flast exception beyond the congressional action facts present in the case but also stopped short of overruling Flast, a result preferred by the two-justice concurrence. After the decision in Hein, the panel noted, the Flast exception is now strictly limited to its facts. The only relief for which the taxpayers have standing is injunctive, which is no longer available here. The case is moot and was properly dismissed.

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LINEBACK v. SPURLINO MATERIALS  (October 8, 2008)

Spurlino Materials (“Spurlino”) produces and sells concrete. In 2005, several employees began a union representation effort. Spurlino management allegedly campaigned heavily against the union. Notwithstanding those efforts, the company employees voted to be represented by the union. The NLRB certified the union and it began negotiating its first contract with Spurlino in early 2006. The parties continued to negotiate through early 2007, but were unable to agree on contract terms (and apparently still have not). Attendance at union meetings declined during this period, possibly because of fears of retaliation by Spurlino. Spurlino management allegedly continued an intense harassment campaign against the union.

Spurlino historically used a seniority-based dispatch procedure. Spurlino sent out each of its drivers in order of seniority until each had been given one assignment. The rest of the assignments for each day were dispatched in order of each driver’s return from his or her original assignment.  In December of 2005, Spurlino was awarded a large contract to provide concrete for the construction of a new football stadium for the Indianapolis Colts. A separate labor agreement covered the stadium project. Stadium contractors paid higher wages under the separate agreement than Spurlino normally paid its employees. Thus, Spurlino drivers preferred the stadium work over other Spurlino assignments. The union alleges that Spurlino used the opportunities provided by the stadium contract to retaliate and discriminate against the leaders of the union movement. It claims that Spurlino a) manipulated the seniority dispatch system to keep the union leaders from the preferred jobs at the stadium, b) changed the way work was assigned when it built a temporary, portable plant, and c) instituted a thirteen-factor performance review to discriminate against union leaders. In August of 2006, the union filed a series of unfair labor practice charges against Spurlino. They were consolidated into an NLRB complaint that alleged that Spurlino: a) discriminated against union leaders because of their activities, b) changed pre-existing work assignment policies without negotiation, and c) implemented an evaluation procedure without negotiation. The ALJ commenced a hearing. During a hearing recess, in May of 2007, the NLRB requested injunctive relief from the district court pending a final Board decision. In June, the court entered an order enjoining Spurlino from a) retaliating against union members, b) acting unilaterally to change the terms and conditions of employment, c) refusing to bargain in good faith, and d) interfering with employees’ exercise of their rights. Spurlino appeals. Shortly after Spurlino’s appeal, the ALJ issued its order. It concluded that Spurlino had discriminated against union leaders and had unilaterally changed the terms and conditions of employment. That order is on appeal before the NLRB.

In their opinion, Judges Bauer, Ripple, and Manion (concurring) affirmed. The Court noted that the National Labor Relations Act authorizes injunctive relief, pending resolution of an NLRB claim, in “just and proper” circumstances. The factors are the same as those that apply to injunctive relief in other contexts: a) no adequate remedy at law, b) irreparable harm that outweighs harm to the employer, c) the public interest, and d) likelihood of success on the merits. The Court addressed each in turn. NLRB proceedings are frequently slow, potentially allowing time for employers to “chill” union activities. Especially in the case of new union representation, there is a risk that no remedy at law will adequately address the harm. On the issue of irreparable harm, the lower court had clear evidence of Spurlino’s hostility toward the union and continued discrimination toward the union and its leaders. The public interest was served by an order prohibiting an unfair labor practice. The district court had found “strong showings” of likelihood of success on the discrimination and unilateral changes in the terms of employment charges and “at least a substantial showing” on the good faith bargaining charge. The Court concluded that the district court considered the right factors and it found no error in its evaluation of them. It did not abuse its discretion.

The Court next addressed the scope of the injunction entered by the district court. Spurlino argued that each of the four paragraphs of the injunction was overbroad. The Court addressed each paragraph in turn under the FRCP 65(d) requirement that injunctions be specific and “describe in reasonable detail” the acts enjoined. The Court also noted that a court may enjoin acts a) which are similar to acts it has found to be unlawful and b) whose commission, if not enjoined, can fairly be anticipated from the defendant’s past conduct. Spurlino argued that paragraphs 1 and 2 were overbroad. Paragraph 1 enjoins retaliation against “all” union members, even though the complaint alleges retaliation against a few named leaders. Paragraph 2 enjoins “all” unilateral actions to change terms and conditions of employment, though the complaint’s allegations were less broad. The Court relied on the district court’s finding of a “continuous and deliberate” effort by Spurlino to undermine the union in holding that these paragraphs were not overbroad. Paragraph 3 enjoins Spurlino from refusing to bargain in good faith. The complaint’s allegation of refusal to bargain was limited to the portable plant. The Court also upheld this paragraph, relying on the district court’s finding that Spurlino engaged in a pattern of refusals to bargain and that further refusals were likely to occur, if not enjoined. Paragraph 4 of the injunction broadly enjoined Spurlino from “in any like manner interfering with, restraining, or coercing employees’ exercise of their rights.” The Court observed that the provision was similar to a provision struck by the Supreme Court in NLRB v. Express Pub. Co.. However, it relied on the addition of the word “like,” not present in the Express injunction, to uphold the paragraph as within the power of the court to enjoin related unlawful acts.

Judge Manion concurred. He wrote separately to emphasize that the injunction against refusing to bargain in good faith does not enjoin “any” refusals to bargain. It only enjoins refusals that are similar to the refusals alleged by the NLRB and found by the district court.

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TATE v. EXECUTIVE MANAGEMENT SERVICES  (October 10, 2008)

Alshafi Tate started working for Executive Management Services (“EMS”) as a commercial building cleaner in August, 2002. Dawn Burban was his immediate supervisor. Tate alleges, and Burban denies, that he and Burban began a long, consensual sexual relationship almost immediately. Tate also alleges, and Burban denies, that when he tried to end the relationship in late 2003, Burban threatened that he would lose his job if he did so. They both agree that they had a heated argument in Burban’s office in January 2004. Tate claims that it occurred when he finally insisted that he was ending the relationship. Burban claims it resulted from Tate’s refusal to perform a proper work assignment. Burban called her supervisor, who told Burban to tell Tate to go home. Burban also called her district manager and reported Tate for insubordination. Tate tried to reach both the supervisor and district manager the next day to relate his side of the story. Instead, he was told he was fired for insubordination. Tate filed suit, alleging both sexual harassment and retaliation in violation of Title VII of the Civil Rights Act of 1964. The jury found for EMS on the sexual harassment claim and in Tate’s favor on the retaliation claim. The district court denied EMS’ FRCP 50(b) motion on the retaliation claim. EMS appeals.

In their opinion, Judges Bauer, Posner, and Williams reversed. The Court laid out the elements of Tate’s Title VII retaliation action: a) a statutorily protected activity, b) the employer’s adverse action, and c) a causal relationship. To show he engaged in protected activity, the Court stated that Tate had to show a reasonable belief that he opposed a practice that violated Title VII. There is a split in the circuits on the issue of whether the rejection of a supervisor’s sexual advances could amount to protected activity. The Court decided that it did not have to take a position on the issue. Instead, it found no evidence that Tate actually believed Burban’s conduct was unlawful. The Court recognized that Tate protested Burban’s actions. But it found that the evidence supported the conclusion that his protests were personal, not because he believed that Burban’s behavior was unlawful. Title VII exists to protect employees from retaliation for protesting discrimination they, in good faith, believe they have suffered. Tate does not meet the protected activity element.

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HAYES v. SNYDER  (October 9, 2008)

Floyd Hayes, a Vietnam War veteran, was serving a ten-year sentence at the Hill Correctional Center (“Hill”) in Illinois. In 2000, Hayes developed testicular cysts. Tests revealed that the cysts were benign. A Hill physician determined that neither a biopsy nor urological referral were indicated. Hayes’ condition worsened and he began to experience more pain. He requested a urology referral in 2001. Hill personnel declined. In September, he began receiving an antibiotic and over-the-counter pain medication. Beginning in October, he saw Dr. Hamby twice and then started seeing Dr. Shute. Dr. Shute wanted to refer Hayes to a urologist and administer prescription pain medication but Hamby refused to approve. Hayes complained to Hill personnel. He sent letters to the Director and to his staff. He described in significant detail his condition and the extreme swelling and pain he experienced. He complained that he needed to see a specialist but that Hamby would not approve. The Hill staff investigated Hayes’ complaint by seeking information from the medical staff. Hamby himself responded to the inquiry by the staff with a lengthy e-mail. He confirmed that Hayes had two cysts but concluded that they were stable but for “self-reported swelling and occasional tenderness.” Hayes and the non-medical staff continued their correspondence. The staff continued to base its responses to Hayes on communications from Hamby that nothing further needed to be done. Hayes filed a formal grievance complaining of inadequate treatment for his pain. The grievance officer denied his grievance, relying on Hamby’s assurance that Hayes was “treated and tested” appropriately.

Upon his release from Hill, Hayes went directly to a nearby VA hospital. Although he complained of testicular pain, the hospital referred him to the psychiatric ward. They allowed Hayes only a few minutes with a urologist. It seems that the Hill staff had called the hospital to warn them that Hayes might be coming and to advise them that his problems were principally psychiatric. Hayes was released after ten days. He went to his home in Kentucky where he visited the local VA hospital there. He received an evaluation, an ultrasound, and a urology referral. Hayes was diagnosed with Peyronie’s disease, a connective tissue disorder that is often painful. The disease is not easily recognized or well understood, even by urologists. Hayes was referred to and is still being treated by a pain management specialist.

Hayes filed suit under 42 U.S.C. § 1983 against Dr. Hamby for his failure to treat his condition and against the non-medical staff at Hill for their failure to respond to his condition properly. The district court granted summary judgment to the defendants on the merits and on the basis of qualified immunity. Hayes appeals.

In their opinion, Judges Bauer, Ripple, and Wood reversed in part and affirmed in part. The Court started with the rule and the test. The defendants are liable if they displayed “deliberate indifference” to Hayes’ medical needs. Hayes must establish that the condition itself, objectively, is sufficiently serious. Then he must establish that the prison officials knew of and disregarded an excessive health risk. The Court first addressed the objective prong of the test. In finding that a reasonable trier of fact could find in Hayes' favor on the objective test, the Court relied on Hayes’ complaints of extreme pain and swelling and Hamby’s refusal to refer Hayes to a specialist. It disregarded the fact that the disease was quite rare and hard to diagnose, given Hamby’s refusal to even make a referral.

The analysis of the subjective element of the test required separate approaches for Dr. Hamby and the non-medical defendants. The Court relied on several facts in the record to conclude that Hayes could meet the test with respect to Hamby.  Hamby a) refused to approve the urology referral, b)may have stopped minimal treatment of ice-packs and non-prescription pain medication in retaliation for Hayes' complaints, c)  testified that he would never prescribe pain medication for a prisoner, and d) was dismissive of Hayes' needs in his deposition testimony. The Court found these to be sufficient facts to establish that a reasonable trier of fact could conclude that Hamby’s conduct constituted deliberate indifference.

Addressing the non-medical personnel, the Court stated that non-medical personnel are generally justified in believing that a prisoner is being adequately cared for if he is in the hands of medical personnel. Here, the non-medical personnel investigated Hayes’ complaints. They were entitled to rely on the professional judgment of the medical professionals. The Court held that Hayes could not establish his claims against the non-medical personnel.
 

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JEFFERSON v. UNITED STATES  (October 8, 2008)

Charles Jefferson served as the voluntary, uncompensated president of the board of directors of New Zion Day Care Center (“Center”). Velma Hayes was the paid director of the Center and ran its day-to-day operations. Jefferson had authority to direct the financial affairs of the Center. The United Way provided financial support to the Center . In early 1998, the United Way informed Jefferson that the Center was not paying its payroll taxes properly. The board ordered Hayes to pay any taxes due to the IRS. By 2000, the Center was in severe financial trouble. It did not pay income and FICA taxes from early 2000 through mid-2001. Hayes reported to the board at its monthly meetings that the Center was delinquent in its bills and tax liabilities. The United Way ceased its support of the Center, in part because of the tax issue. Jefferson arranged for the Center to borrow money to pay the delinquent taxes. In August, 2000, Jefferson co-signed two checks to the IRS for penalties and interest. In 2002, the IRS made assessments against both Hayes and Jefferson for the delinquent taxes. Jefferson filed suit to recover the $41,432 he paid pursuant to the assessment. The district court granted the United States’ motion for summary judgment. Jefferson appeals.

In their opinion, Judges Bauer, Williams, and Sykes affirmed. The Court addressed each of Jefferson’s arguments in turn: a) that he was not a “responsible person” under the statute, b) that his conduct was not willful, c) that he was exempt as an honorary board member, d) that the IRS was estopped because of its failure to develop explanatory materials as required by statute, and e) that the IRS failed to disclose evidence. The Court stated that a “responsible person” under Section 6672(a) of the Internal Revenue Code is a person who has enough authority over the organization’s finances to determine which debts will be paid. Jefferson had significant involvement in the Center’s financial affairs. The Court found that Jefferson was a “responsible person,” relying on his position on the board, his review of finances at monthly meetings, his securing of the loan to pay IRS penalties and interest, and his direction to Hayes to pay the taxes. On the “willful” issue, the Court observed that a person acts willfully when he acts in reckless disregard of a known risk that taxes are going unpaid. The Court recognized that the board had directed Hayes to pay the taxes but found that Jefferson had taken no steps to make sure that the taxes were, in fact, paid or that effective controls were in place. This made Jefferson’s conduct willful, even if he did not actually know the taxes were still unpaid. The Court rejected Jefferson’s honorary board member argument, noting that the statutory exemption only applied to board members who did not participate in the financial operations of the organization. Jefferson’s estoppel argument is that the government is required by law to develop explanatory materials relating to the circumstances under which a board member of a non-profit organization could be held liable for tax delinquencies. The Court agreed that the materials are required by law and that they were never developed. However, it refused to adopt a blanket rule that would make the assessment invalid as a result. Instead, the Court required a showing of prejudice, which it said Jefferson could not make. The Court rather summarily rejected Jefferson’s evidence argument, citing the substantial evidence of his liability and the fact that the evidence was relevant, if at all, only to collateral issues (e.g., his knowledge of the delinquencies).

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KOZUSZEK v. BREWER  (October 8, 2008)

Nicole Kozuszek and her brother Wesley lived with their parents and were registered to vote in Porter, Indiana. About a month before the 2003 general election, Wesley reported his car stolen in the neighboring town of Chesterton. The police met him at an apartment he rented in Chesterton. The police report of the theft lists the apartment as the residence of  Wesley and Nicole. Wesley was scheduled to be a poll-watcher in Chesterton on election day. At a pre-election training session, Chesterton Police Chief Nelson noticed a document on which Wesley had asked that his fee for poll-watching be sent to the Porter address. Nelson recalled the theft incident and the Chesterton address Wesley gave the police. He mentioned the discrepancy to Dale Brewer, an election official. Brewer did nothing with the information until election day. She and Wesley were both at the Chesterton polls. Brewer asked Wesley if he liked living in Chesterton. Wesley responded that he did not live in Chesterton, at least on a regular basis. Brewer did not question Wesley further about the address discrepancy . Instead, she consulted with the other election board members. All of them agreed that Wesley’s vote should be challenged if there was a residence conflict. Brewer learned from election officials in Porter that Nicole and Wesley had both voted by absentee ballot in Porter. Brewer challenged both ballots.  The Porter poll inspector spoiled the ballots.  The Kozuszeks brought a § 1983 claim, alleging that Nelson and Brewer violated their right to vote. The district court granted the defendants’ motion for summary judgment. The Kozuszeks appeal.

In their opinion, Judges Kanne, Williams, and Tinder affirmed. They observed that the parties agreed that the votes should not have been spoiled.  To be successful on their § 1983 cliam, however, the Kozuszeks had to prove that Nelson and Brewer willfully acted to spoil the ballots. Willfulness requires an intent to undermine the electoral process. Addressing Wilson, the Court found that he did nothing wrong. He merely reported a voting record discrepancy to an elected official. With respect to Brewer, the Kozuszeks rely on a) the fact that Brewer waited until election day to challenge the vote, leaving no time to resolve the issue pre-election, and b) the fact that Brewer neglected to tell the Porter poll inspector about the information (Wesley's statement to Brewer and the pay voucher) that would have supported Wesley's Porter registration.  The Court determined that neither of these facts amounted to willfullness on Brewer's part.  The Court also relied on the fact that there was no evidence that the poll inspector did not exercise independent judgment.  The Court held that no reasonable jury, particularly because Brewer had reasonable explanations for her actions, could find that Brewer acted willfully.

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OVERMAN v. ASTRUE  (October 7, 2008)

Gerald Overman is a 58-year old high school graduate. For years, he worked as an unskilled maintenance worker and repairman at a golf course. He was able to work, even though he suffered from diabetes, hypertension, and some fairly serious vision problems. He began to experience more serious problems. He became tired and overheated very easily and lost quite a bit of weight. He was diagnosed with Graves’ disease and anemia. Overman began radioactive iodine therapy for the Graves' disease. The treatment was somewhat successful but his physician had a difficult time finding the correct dosage.  Overman's vision was also worsening.  His physician's conclusion was that “any” visual task would be difficult for Overman and that his eyesight was continuing to deteriorate.  Overman applied for social security benefits.  An ALJ conducted a hearing in 2005. Overman testified regarding his condition and disabilities. He said he tired easily, could not see well, could not be in extreme temperatures, and could not lift much weight. The agency medical consultant testified that Overman could not perform work that required reading or fine visual determination, or that involved extreme temperatures or heavy lifting. A Vocational Expert (“VE”) also testified. He testified that Overman could not continue in his prior field of work, primarily because of the temperature extremes. He did testify, however, that he could perform two jobs: a material packaging job and a keg-filling job. The VE also testified that his testimony was consistent with the Dictionary of Occupational Titles (“DOT”). On cross-examination, the VE admitted that both jobs he said Overman could perform would be eliminated if Overman was not capable of fine visual discrimination or reading. The ALJ found that Overman could do either of the two jobs identified by the VE. He gave great weight to the VE’s testimony on direct. The ALJ believed the testimony on cross-examination merely confirmed the VE’s conclusion about other jobs he had eliminated. Overman sought review in the district court . The court upheld the ALJ’s decision. Overman appeals.

In their opinion, Judges Posner, Sykes, and Tinder (in a per curiam opinion) reversed. The Court observed that the VE’s testimony about the two available jobs did, in fact, conflict with the DOT. Both jobs require a degree of visual acuity and reading ability that Overman does not have. The Commissioner concedes as much but argues that remand is unnecessary. The Court pointed out that a Social Security Ruling requires the ALJ to confirm that the VE’s testimony is consistent with the DOT and further requires a ALJ to inquire further if an apparent conflict exists. Overman’s counsel did not bring the conflicts to the attention of the ALJ. Therefore, the Court stated, the conflicts must be obvious enough to cause the ALJ to notice them without assistance. The Court found that the conflicts with respect to vision and reading capabilities should have been apparent to the ALJ. The Court also held that the ALJ’s ruling was not supported by substantial evidence because of the flawed VE testimony.  

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MOORE v. TULEJA  (October 6, 2008)

On the evening of April 8, Frederick Grady was in a serious accident in his van. He escaped with minor injuries but his van flipped and was badly damaged. Despite the warnings of emergency personnel, Grady reached into his van to retrieve some carpentry tools. He cut his hand badly. The on-scene emergency personnel treated the wound and recorded its occurrence. Later that evening, Grady trespassed on the lot where his damaged van had been taken, in another vain attempt to retrieve his tools. He was arrested. The arresting officer noticed his bandaged hand but did not mention it in his report. The report prepared at the lockup also neglected to mention a hand injury. He was photographed and taken to jail. The photograph showed no signs of injury to his head. The prisoner in the adjacent cell noticed the bandage on his hand. Jail guards noticed Grady sitting in his cell at about 1:30 the next afternoon. A few minutes later, the prisoner in the adjacent cell heard an unusual noise. Shortly thereafter, jail personnel found Grady on the floor of his cell, unconscious. He was pronounced dead at the hospital. An autopsy determined that he died of a heart attack. It also revealed a number of injuries to his body. His estate filed an action under 42 U.S.C. §1983, claiming that various officers and jail personnel deprived Grady of his constitutional rights by using excessive force and depriving him of medical care. The case was based almost exclusively on inferences drawn from the nature of the injuries to Grady’s body. After seven days of testimony from almost every individual who interacted with Grady after his accident, the jury found for defendants. Plaintiffs appeal the denial of their motion for a new trial.

In their opinion, Judges Cudahy, Posner, and Tinder affirmed. The Court first noted plaintiffs' heavy burden on appeal. They will set aside the verdict only if “no rational jury” could have rendered the verdict. The panel moved on to a review of the evidence. All three medical experts agreed that the cause of death was a heart attack. The question for the jury was what triggered the attack. Plaintiffs’ expert opined that the nature of the hand laceration, two head abrasions, and scrapes on Grady’s wrist indicated that Grady had likely been beaten. The Court analyzed each individual injury in turn. They found reasonable bases in the record for the jury's conclusions that a) the hand injury arose from the post-accident event, b) the head abrasions occurred when he collapsed onto the floor of his cell, and c) the wrist scrapes resulted form the short time he was in handcuffs or even from the original accident.  Plaintiffs did not meet their burden. 

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BURRUS V. STATE LOTTERY COMMISSION  (October 6, 2008)

Indiana created the State Lottery Commission of Indiana (the “Commission”) in 1989 to operate lottery games in the state. The legislature set it up to operate as a “separate body politic and corporate” from the rest of state government. The legislature authorized up to $18 million in start up costs. The Commission only used $6 million and repaid that within the year. The lottery has been quite successful. It has generated over $3 billion in profits since its inception. The governor appoints the director and five commissioners who operate the lottery. The Commission has the authority to sue and be sued. It operates independently of the state, although it is heavily regulated by the state.  The Commission deposits all of its revenue into a fund separate from the state’s general revenue fund. The funds are first used to pay for the prizes and operating costs. Each quarter, the remaining funds are disbursed to the credit of the state teachers’ retirement fund ($7.5 million) and the pension relief fund ($7.5 million). Any quarterly surplus is transferred to a fund which is used to support local and state capital projects.

Between January and May of 2005, seven employees of the Commission were fired. They all sued the Commission under 42 U.S.C. § 1981 and Title VII of the Civil Rights Act of 1964. Each alleged that he or she was fired as a result of his or her race. The Commission moved to dismiss the § 1981 claims on the grounds of sovereign immunity. The district court denied the motion. The Commission appeals.

In their opinion, Judges Bauer, Ripple, and Manion affirmed. The appeal raised only one issue – whether the Eleventh Amendment shields the Commission from the §1981 claims. The Court began with the basic proposition that unconsenting states, and their agencies, are immune from federal lawsuits under the Eleventh Amendment. Here, the parties simply disagreed over whether the Commission is a state agency. The Court listed the two factors that generally determine that issue. The first, and most important, is the degree of financial autonomy from the state. The other factor is the general legal status of the entity. The Court observed that the Commission’s complete lack of financial reliance on the state and the total lack of responsibility by the state for any of the Commission’s obligations strongly weighed against finding the Commission to be an agency of the state. While it is true that a judgment against the Commission would deprive the state of revenues it otherwise would have received but for the judgment, the panel noted that the Supreme Court had rejected that “state-benefit” theory of financial dependence.

The second prong of the test, general legal status, also supports the Court’s conclusion that the Commission is not an agency of the state. The Court pointed to a number of factors to support its conclusion: a) it sets its own budget, b) it controls its day-to-day operations, c) it sues in its own name, and d) it enters into contracts in its own name. The fact that the governor appoints the commissioners was given little weight by the Court given the Commission’s financial independence. Finally, the Court noted that the fact that the lottery is the subject of much state regulation does not change the result that the Commission is not an agency of the state and not immune from suit.

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MANNING v. UNITED STATES  (October 6, 2008)

Steve Manning is a former police officer and FBI informant. He was convicted of kidnapping in Missouri and murder in Illinois. Both convictions were overturned. Manning brought a §1983 Bivens action against two FBI agents, alleging that they violated his constitutional rights in their handling of both investigations and prosecutions. Specifically, he alleged that they fabricated evidence and withheld that fact from the prosecutors. He also sued the United States, in the same action, under the Federal Tort Claims Act (“FTCA”) for malicious prosecution and intentional infliction of emotional distress. The claims were tried together. Since FTCA claims cannot be tried to a jury, the jury heard only the Bivens claim. Simultaneously, the court heard the FTCA claim. The jury awarded Manning $6.5 million on the Bivens claim. A year and a half later, the court found against Manning on the FTCA claim. The Bivens defendants moved to vacate the judgment entered on the jury award, invoking the FTCA “judgment bar.” The district court granted the motion. Manning appeals.

In their opinion, Judges Bauer, Flaum, and Manion affirmed. The Court cited the established rule that the victim of a tort committed by a federal law enforcement officer can pursue a constitutional tort action (i.e., a Bivens action) or a common law tort claim against the United States under the FTCA. However, the FTCA provides that a judgment in an FTCA claim bars a direct action against the employee(s) whose act gave rise to the claim. Manning argued, alternatively, that the FTCA does not bar a judgment on a claim pursued in the same action or that the FTCA does not operate retroactively to bar a prior-entered direct judgment. On the “same action” argument, the Court relied on the unambiguous, plain language of the statute and the common meaning of the word “action” to reject Manning’s interpretation. Similarly, the Court found no support in the plain language of the statute for Manning’s retroactivity argument. The panel appreciated the “significant reversal of fortune” for Manning as a result of its holding. It observed that it was, of course, bound by the plain language of the statute. It also pointed to Manning’s strategic choices that led to the unfortunate (for Manning) result.

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EEOC v. LEE’S LOG CABIN  (October 6, 2008)

Korrin Stewart was diagnosed as HIV-positive when she was just fourteen years old. Shortly thereafter, she learned that it had actually developed into AIDS. At the age of eighteen, she applied for a server position at Lee’s Log Cabin (“Lee’s”). She was aware that the job had a 25-30 pound lifting requirement. Nevertheless, she stated on her application that she could lift no more than 10 pounds and that there were no accommodations that would allow her to perform that requirement of the job. After some time went by without a response from Lee’s, Stewart visited the restaurant and spoke with Zastrow, an assistant manager. In response to Zastrow’s question, Stewart admitted that she was the same person who had alleged that a prior employer had fired her when the employer learned that she was HIV-positive. Stewart also saw a copy of her application, on which appeared the notation “HIV+.” Lee’s did not offer the position to Stewart, ostensibly on the ground that she had no server experience and could not meet the lifting requirement. The EEOC filed suit, alleging that Lee’s violated the Americans With Disabilities Act (“ADA”). The EEOC alleged that Lee’s failed to hire Stewart because it learned that she was HIV-positive. About one month before trial, in response to Lee’s motion for summary judgment, the EEOC presented affidavits from Stewart and her doctors describing how AIDS affected her daily activities. The EEOC presented no separate evidence that HIV affected her daily activities. The district court refused to consider the affidavits because the EEOC had never pleaded the presence of AIDS. Without the affidavits, there was no evidence in the record of the effect of HIV on Stewart’s daily activities. The court granted summary judgment for Lee’s, also noting that a) there was no evidence that Lee’s knew Stewart had AIDS, and b) there was a question whether she met the “qualified individual” element of the statute because of the lifting requirement. EEOC appeals.

In their opinion, Judges Kanne and Sykes affirmed, Judge Williams dissenting. The majority started with the fundamentals. The ADA prohibits employment discrimination “against a qualified individual with a disability because of the disability.” Whether an individual is disabled is an individual inquiry into whether the impairment “substantially limits” the individual’s major life activities. The Court commented that the EEOC “complicated” the inquiry by attempting to refashion its claim as an AIDS claim late in the case. The Court called it a “major alteration” of the EEOC’s case. The Court focused on the Supreme Court’s Bragdon decision and its description of the development of the disease. Noting that there are significant symptomatic differences at different stages of the disease, the Court thought that whether Stewart was HIV-positive or had AIDS was highly relevant to the case. Once the Court concluded that the district court had not abused its discretion in disallowing the affidavits, it had little difficulty agreeing with the proposition that the record was devoid of evidence of the effect of HIV on Stewart’s major life activities.

The Court went on to address, as an alternative ground for affirming summary judgment, the issue of whether Stewart was a “qualified individual.” A “qualified individual” is a person who can perform the essential functions of the job, either with or without reasonable accommodations. The Court held that Stewart was not a “qualified individual,” given her statement in her application that she could not meet the lifting requirement of the job, even with an accommodation.

Judge Williams dissented. She pointed out that HIV and AIDS are not different conditions. Rather, AIDS is simply the final stage of a single disease – HIV. Different stages of the disease are also not necessarily accompanied by different symptoms. Stewart never ceased being HIV-positive. The evidence of the effect of AIDS on Stewart’s daily activities also described the effect of HIV on her activities. Judge Williams compared it to a cancer patient progressing through different stages of the disease. She believed that the EEOC had sufficiently presented evidence that Stewart’s disease substantially limited her major life activity. She also believed that there were questions of fact with respect to the “qualified individual” issue. There was a dispute as to whether the lifting requirement was truly an essential function of the job. Stewart’s testimony that her lifting restriction was temporary also raised a question of fact with respect to her application answers. 

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STEVO v. KEITH (October 1, 2008)

Allen Stevo would like to enter the 2008 race for a seat in the U.S. Congress from the Tenth Congressional District in Illinois as an independent candidate. Illinois law generally requires an independent candidate to submit with his or her petition a number of signatures equal to 5% of the number of votes cast in the district in the last election. This requirement does not apply, however, in the first election after each decennial census. Each census is followed by a redistricting, which prevents the application of the 5% rule since there is no prior voting history for the newly drawn districts. For these elections, Illinois requires a flat 5,000 signatures. The 2008 election is not such an election. A resident of the district challenged Stevo’s petition on the ground that it failed to meet the 5% requirement. Stevo admits that he does not meet the 5% target, but it is undisputed that he submitted in excess of 5,000 signatures. He filed suit, claiming that the 5% requirement denies equal protection of the laws and that the 5,000 signature requirement should be applied to all elections. The district court dismissed the complaint for failure to state a claim. Stevo appeals.

In their opinion, Judges Cudahy, Posner, and Flaum affirmed. The panel notes that Stevo does not challenge the 5% requirement in a vacuum. Instead, he argues that it is the acceptability of the 5,000 signature target in some circumstances that makes the 5% target arbitrary. Thus, the Supreme Court’s decision in Jenness v. Fortson, which held that a 5% requirement is permissible, does not control. The state’s position is that it must have a proxy for the 5% target after redistricting because it would be impossible to calculate in a newly drawn district. The Court, however, cited favorably to an Indiana procedure in which the votes from the individual precincts making up the new district are used to arrive at a fairly good approximation of the district vote. There are other reasons, however, for the state’s approach. The Court referred to the “disorienting” nature of a redistricting event, requiring both candidates and voters to adjust. It may be more difficult to get signatures in such an environment and thus Illinois imposes the reduced flat 5,000 signature requirement. The Court considered the approach Illinois took to reduce the signature requirement to be “crude.” In fact, in one district, the flat 5,000 signature requirement is actually more difficult to meet than the 5% would have been, because of the low number of voters in the district. Nevertheless, the Court considered Stevo’s solution at least as arbitrary, if not more so. The imperfect Illinois solution is now used only once in every ten years. Stevo would apply it to every congressional election. Not only is Stevo’s proposal not so far superior to the State’s as to implicate the Constitution, the Court found that is likely less superior.

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GUSTAFSON v. ZUMBRUNNEN  (October 1, 2008)

George Skille, a citizen of Wisconsin, left most of his estate to his grandchildren and appointed one of them, Georgia Gustafson, his personal representative. After his death, Gustafson sued Skille’s widow (his second wife) in state court to recover money from a joint bank account for the estate. That suit was settled. Gustafson then brought suit in federal court seeking the balance of the account, attorneys’ fees from the first suit, and punitive damages. The suit named Skille’s lawyer (and the lawyer’s firm) and the bank where Skille and his wife had a joint account. The suit alleged that the lawyer had “tortiously interfered” with the grandchildren’s expectation of inheritance and that the bank had been negligent. The defendants were all citizens of Wisconsin, but none of the grandchildren were. The defendants moved to dismiss for lack of diversity on the ground that a legal representative of an estate is treated as a citizen of the state in which the decedent was a citizen under 28 U.S.C. §1332(c)(2). Gustafson responded by seeking leave to amend her complaint to name each of the eight grandchildren as plaintiffs, but none in a representative capacity. Once she realized that that would result in the individual demands falling below the jurisdictional threshold, she instead filed an amended complaint in which only one grandchild (Susan Gustafson) was named as a plaintiff, suing on behalf of the estate but not as a legal representative. The district court dismissed for lack of federal jurisdiction. Susan Gustafson appeals.

In their opinion, Judges Bauer, Posner, and Wood affirmed. The Court noted that Wisconsin law allows suits for tortious interference in these circumstances. It also allows a person with an interest in an estate to sue on behalf of the estate to recover assets for the estate - but only in the situation in which the personal representative has failed to do so. In that case, the suit would not be a suit by a legal representative and §1332(c)(2) would not apply. Here, although Georgia removed herself from the suit and is “failing” to recover assets that allegedly belong to the estate, she is doing so in collusion with Susan and Susan’s suit is on behalf of the estate. The Court also held that 28 U.S.C. §1332(c)(2) is not limited in its application to one person. Instead, it treats any legal representative of an estate as having the citizenship of the deceased. If it were otherwise, the Court warned, any estate could artificially manufacture or destroy diversity by naming a representative with the correct citizenship – a result counter to the purpose of the statute.

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DOMINQUEZ v. HENDLEY (September 30, 2008)

Alejandro Dominguez was fifteen when a neighbor accused him of sexual assault. He was convicted of home invasion and sexual assault and spent four years in prison before he was paroled. Dominguez always maintained his innocence. He eventually proved his innocence through DNA testing. Not only did he succeed in getting his conviction vacated, the Governor pardoned him. Dominguez brought this action against an investigating police officer and the City of Waukegan under 42 U.S.C. §1983. He alleged that the officer (a) withheld exculpatory material from the prosecutor and defense, (b) conducted an improper and prejudicial identification, and (c) fabricated evidence. At trial, the jury returned a verdict in favor of Dominguez in excess of $9 million. Hendley and the City appeal.
 

In their opinion, Judges Bauer, Ripple, and Wood affirmed. The appellants raised numerous issues, none of which convinced the panel of reversible error.

• The Court rejected the Statute of Limitations argument as the complaint was filed within two years of the date the conviction was vacated. One who brings a §1983 claim for violation of due process based on denial of a fair trial must first have the conviction vacated. The limitations period runs from that date. The appellants’ argument that it should run from the arraignment would have merit only if the complaint was based on false arrest rather than unfair trial.
• The Court rejected the argument that Hendley was entitled to qualified immunity because Dominguez did not prove that Hendley proximately caused the alleged violations. In the eyes of the Court, the argument was not one of qualified immunity, but simply an attack on the sufficiency of the evidence of the violations. The Court found sufficient evidence to support the verdict.
• The Court found as irrelevant whether Dominguez proved that the arrest was without probable cause. Again, Hendley was misreading the complaint as one simply attacking the arrest.
• Appellants’ next argument was that Dominguez did not properly plead or prove that Hendley failed to provide exculpatory evidence. Any supposed flaw in the pleading was overcome by Hendley’s failure to object and presentation of affirmative evidence on the issue. The panel had no difficulty in finding sufficient evidence in the record to support the verdict.
• Appellants’ argued a number of errors in the instructions. Some were rejected because they were based on the appellants’ erroneous “false arrest” theory. Others were addressed to causation. The Court found that the district court’s instructions on proximate cause were sufficient.
• The appellants’ submitted a litany of supposed trial errors, the cumulative effect of which they claim deprived them of a fair trial. The Court never had to address the cumulative effect of any errors because, in fact, they held that not one of the items raised amounted to error.
   

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