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

DIRECTV v. BARCZEWSKI (May 13, 2010)

David Barczewski and Jonathan Wisler purchased electronic equipment that was actually marketed for its ability to intercept DirecTV signals. They both also participated in discussion groups whose purpose was to exchange advice about intercepting and decrypting those signals. When DirecTV sued them, a jury found that Wisler had intercepted signals without authorization for 435 days and that Barczewski had distributed four unauthorized decryption devices. The court imposed a statutory penalty of $44,000 against Barczewski and $43,500 against Wisler. Barczewski and Wisler appeal.

In their opinion, Chief Judge Easterbrook and Judges Flaum and Sykes affirmed in part and vacated and remanded in part. The Court first summarily rejected defendants' contentions that DirecTV did not have a private right of action under 18 U.S.C. § 2520 or 47 U.S.C. § 605. It noted that every court of appeals that had considered the questions agreed. It also quickly disposed of their argument that an exception in the statute for an "aeronautical communication system" applied because a DirecTV witness at trial stated that DirecTV was such a system. Whatever the witness meant, the Court interpreted the statute and concluded that DirecTV is not the kind of system referred to in the exception. Finally, the Court addressed the issue of the penalty. Although it affirmed the calculation of Barczewski’s penalty, it vacated the award of the penalty against Wisler. The statute provides that a court "may” assess the greater of a) the sum of the plaintiff's damages and the violator's profits, or b) the greater of $100 per day of violation or $10,000. In 1990, the Court held, in Rodgers v. Wood, that the imposition of the highest penalty under that calculation was mandatory. Part of the Rodgers rationale was that Congress changed the statute and replaced “shall” with “may” without any explanation for a change from mandatory to discretionary. Rodgers was also the first Court of Appeals decision interpreting that section. Since Rodgers, each of the four other circuits that have addressed the question has disagreed – and concluded that the language is permissive. Upon a careful review of the statutory language, the rationale of Rodgers, the analyses from the other circuits, and the policy considerations, the Court overruled Rodgers' holding that the maximum penalty was mandatory. It vacated the award and remanded to the district court.

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GOELZER v. SHEBOYGAN COUNTY (May 12, 2010)

Dorothy Goelzer began her employment with Sheboygan County, Wisconsin in 1986. In 1999, she became the full-time assistant to Adam Payne, the Administrative Coordinator for the County. For several years, she received consistently favorable performance reviews. Her health deteriorated beginning in 2002. She used over 300 hours of FMLA leave in 2002, over 175 hours in 2003, and almost 100 hours in 2004. Although her health improved in 2005, she continued to take intermittent FMLA leave to care for her mother. Her significant use of FMLA leave was noted negatively in each of her performance reviews and salary discussions during this time. In May of 2006, Goelzer requested two months of FMLA leave for a foot surgery. Although the County approved her request on August 8, she was fired on September 8. Payne had been promoted to the new position of County Administrator on August 15 and, for the first time, had been given the power to fire Goelzer. Goelzer filed an action against the County and Payne. She alleged violations of the FMLA for the County's failure to restore her to her position and for discrimination. The district court granted summary judgment to the defendants. Goelzer appeals.

In their opinion, Judges Bauer, Wood, and Williams reversed. The Court noted two fundamental principles of the FMLA: the right to be restored to one's position (or an equivalent one) upon return from a leave and the right not to be discriminated against for using leave. The only contested issue in Goelzer's interference claim was whether she was terminated to prevent her from being reinstated. Although Payne's stated rationale was his desire for a greater skill set, the Court concluded that there was sufficient evidence for a jury to decide in Goelzer’s favor. That evidence included the many references by Payne over the years to her use of sick leave. The Court next addressed the retaliation claim, which differs from the interference claim by requiring proof of discriminatory intent. Again, the Court concluded that the record supported two possible explanations for Payne's decision to terminate Goelzer. Goelzer was entitled to have a jury select one.

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ENVISION HEALTHCARE v. PREFERREDONE INSURANCE CO. (May 12, 2010)

PreferredOne, a health insurance company, entered into a contract with Envision Healthcare, a wholesale insurance broker, for the marketing and sales of its insurance products. Envision sold one of those insurance products to Bradley Romer. Romer had two knee surgeries, with serious complications, that resulted in a hospital bill in excess of $100,000. Upon receiving the hospital bill, PreferredOne did a little investigating into Romer's application. It concluded that he omitted a pre-existing condition. It then rescinded the policy and refused to pay the balance of the hospital bill. Romer brought a breach of contract suit in state court against PreferredOne. PreferredOne filed a third-party complaint against Envision for indemnification. Envision then filed suit against PreferredOne in federal court seeking a declaration that it had no duty to indemnify. It then unsuccessfully sought to dismiss the state court third-party complaint on the grounds that it involved the same legal issue. PreferredOne moved to dismiss the federal action. Concluding that the federal and state cases involved the same parties and presented the same legal issue, the district court dismissed the case under the Wilton/Brillhart doctrine of abstention. Envision appeals.

In their opinion, Judges Bauer, Manion, and Tinder affirmed. The Court first noted that its standard of review of the district court's decision to abstain is for abuse of discretion. Applying that standard, the Court found no abuse. In fact, it noted that the case presented a "classic example" of the proper use of the Wilton/Brillhart doctrine -- only declaratory relief is sought and a parallel state court action, between the same parties and addressing the same issue, is proceeding.

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FINCHER v. SOUTH BEND HERITAGE FOUNDATION (May 10, 2010)

The South Bend Housing Authority (SBHA) evicted Marshall Fincher from one of its public housing units. Fincher then requested tenancy, under Section 8 of the United States Housing Act, in a building owned by the South Bend Heritage Foundation (SBHF). Based on the eviction, SBHF denied his application without a hearing. Fincher brought suit against SBHF. The district court granted summary judgment to SBHF, concluding that Fincher did not have a property interest in any specific SBHF housing and that he failed to identify any contract term between SBHF and HUD for which he was a claimed third-party beneficiary. Fincher appeals.

In their opinion, Circuit Judges Flaum and Wood and District Judge St. Eve affirmed. The Court noted that its 1984 decision in Eidson v. Pierce held that there was no property interest for a Section 8 applicant for a housing unit. Considering Fincher's request that Eidson be overruled, the Court reviewed the analysis of the case and noted that another circuit had expressly adopted its reasoning. The only circuit to squarely contradict the case did so in 1982 -- and its reasoning was considered and rejected in Eidson. The Court distinguished the few other cases brought forth by Fincher. Finding that Eidson was well reasoned and seeing no significant changes in the law since its publication, the Court declined to overturn it. With respect to the third party beneficiary claim, the Court agreed with the district court that Fincher cited no contract term or federal housing regulation that gives rise to any enforceable right.

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EVERROAD v. SCOTT TRUCK SYSTEMS (May 10, 2010)

David Scott owned and operated Scott Truck Systems, a commercial trucking company. Sherry Hantzis, his wife, was its general manager. In 2004, on Hantzis’ recommendation, Scott hired 51-year-old Diana Everroad as a dispatcher. Things did not go very well -- her supervisor complained, two large customers complained, and she had several run-ins with her coworkers. On the other hand, she was the target of several gender-based derogatory comments from those coworkers, one of which came during a conversation she secretly recorded. Within months, Scott and Hantzis created a new job for Everroad as a "data administrator." The hours and the pay were identical to her dispatcher job, but she had to share an office. Her officemate had a habit of making lengthy personal phone calls. Everroad’s complaints resulted in a meeting with Scott, Hantzis, and the officemate in an attempt to resolve the conflict. The meeting lasted a long time and became very tense. Everroad again secretly recorded much of the meeting. There was shouting, crying, eye-rolling, and accusations -- but the meeting did end with some constructive proposals. Scott and Hantzis were upset with Everroad's conduct during the meeting and considered it insubordinate. They were still considering their options when, upon arrival at the office the next morning, Everroad ignored Hantzis' greeting and overreacted to Scott's greeting. Scott terminated her employment at the end of that workday. Everroad sued Scott Truck for gender discrimination and retaliation under Title VII and for age discrimination and retaliation under the Age Discrimination in Employment Act (ADEA). The district court granted summary judgment to Scott Truck. Everroad appeals.

In their opinion, Chief Judge Easterbrook and Judges Bauer and Rovner affirmed. The Court first rejected Everroad's complaint that the district court erred in refusing to consider the transcripts of her secretly recorded conversations. First, Everroad never actually submitted the tapes themselves, only the transcripts. Second, the Court found the transcripts demonstrated that the conversations were, in large part, incomprehensible. Addressing the merits, the Court accepted as fact that Everroad could establish that she was a member of a protected class and that she suffered an adverse employment action for both the gender and age discrimination claims. The Court nonetheless rejected her discrimination claims: a) because of her insubordination, she was unable to meet the job performance prong of the test and she was unable to identify a similarly situated employee (i.e., another insubordinate employee), and b) she was unable to present evidence undermining the sincerity of Scott's nondiscriminatory reason for terminating her (her insubordination). The Court also rejected her retaliation claims: a) her claim that she was transferred because of her complaints about some derogatory comments fails because she never raised it in the district court, the transfer was not an adverse employment action, and there was no evidence that she complained to Scott or Hantzis, and b) her claim that she was terminated for complaining about a different derogatory remark fails because the remark was made a year prior to her termination and she presented no evidence establishing a causal connection between the two.

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KODISH v. OAKBROOK TERRACE FIRE PROTECTION DISTRICT (May 10, 2010)

Brian Kodish began work as a full-time firefighter and paramedic for Oakbrook Terrace in June of 2003. The Illinois Fire Protection Act prohibits the termination of a firefighter without just cause after the firefighter has "held that position for one year." In March of 2004, Kodish went on leave for a knee surgery. While he was out, he received a letter indicating that the District was going to extend his 12-month probationary period for 90 days. Although the evaluations he had received in his first nine months contained some positive remarks, Kodish was evaluated as "fair" in most categories. He was criticized for a lack of motivation, poor communication skills, and an inability to follow authority. Kodish returned from leave on July 24. On August 11, the District Board decided to terminate his employment. He filed suit against the District under § 1983, alleging a violation of his due process rights. He also alleged that he was fired in retaliation for speaking out on union issues. The district court granted summary judgment to the defendants. Kodish appeals.

In their opinion, Chief Judge Easterbrook and Judges Ripple and Rovner reversed. The Court first addressed the existence of a property right, a prerequisite for the federal due process claim. Of course, Kodish had passed his one-year anniversary before he was fired -- but, because of his four-month leave, he only actually worked a little over ten months. The Court looked to Illinois law to determine whether Kodish was protected. No Illinois court has interpreted the "held that position" language of the Act. The Court looked to Illinois decisions with respect to analogous statutes and concluded that the Illinois Supreme Court would read the plain language of the Act to impose a simple twelve-month employment requirement for the creation of the property interest. The Court rejected defendants' other arguments based on the Illinois Municipal Code and the District’s own Wage and Benefit Policy as either in applicable (in the case of the Code) or not controlling (in the case of the Policy) -- and reversed the district court's conclusion that Kodish had no property interest in continued employment. The Court then addressed Kodish's First Amendment claim. It quickly concluded that Kodish met two of the three requirements of the claim -- that the speech was protected speech and that he suffered a deprivation. In addressing the third requirement -- whether he would have been terminated but for his speech -- the Court reviewed his mixed employment evaluations as well as the evidence of the fire chief's opinion of Kodish's speech. The Court disagreed with the district court's conclusion that the only reasonable conclusion for his discharge was his employment record. Although the Court found that theory "plausible," it also found the alternate theory -- that he was fired for his speech -- one that a reasonable jury could adopt. In concluding that the First Amendment claim should have survived summary judgment, the Court also concluded that Kodish presented sufficient evidence that the fire chief's animus should be attributed to the District under either the "singular influence" or the "motivating factor" test.

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WRAGG v. VILLAGE OF THORNTON (May 7, 2010)

In 1997, Thornton Village President Jack Swan received an anonymous complaint that a village police officer had molested a minor boy. A few months later, with Swan's knowledge, the officer resigned and sought treatment for a cocaine habit. A few years later, Swan appointed that same officer the Village's fire chief. Soon thereafter, he was found molesting another minor boy, a member of the Village’s fire cadet program. The chief's propensities were the subject of much conversation throughout the department. A few years later, the chief was arrested for molesting yet another boy, also a fire cadet. Swan removed the chief from his post. The cadet sued the Village under § 1983, asserting that the Village retained the fire chief knowing his history of molesting minors and that their deliberate indifference violated his substantive due process rights. The court granted summary judgment to the Village. The cadet appeals.

In their opinion, Chief Judge Easterbrook and Judges Bauer and Wood affirmed. The Court acknowledged that the fire chief was a state actor and the cadet had a substantive due process right not to be harmed by him. Whether the Village was liable under Monell, however, depends on whether the injury was caused by an express policy or a widespread practice, or by a "person with final policymaking authority." Because the cadet alleged neither an express policy or widespread practice, the Court focused on whether the injury was caused by a person with final policymaking authority. The Court identified an issue of fact with respect to that inquiry. The Board of Trustees certainly had final power to appoint and remove the fire chief. The Court found it unclear, however, whether Swan had final authority to retain him. Either way, however, the claim failed. With respect to the board, the cadet presented evidence only with respect to one member. Municipal liability under Monell cannot be based on the isolated act of one member of a multi-member board. With respect to Swan, the Court concluded that the evidence was insufficient for a reasonable jury to find that Swan was on notice that the retention of the chief posed a substantial risk to the cadet. The Court conceded that there were "storm warnings" regarding the fire chief -- but found none of them sufficient to establish the deliberate indifference necessary for municipal liability.

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AMERICAN LAND HOLDINGS v. JOBE (May 6, 2010)

Peabody Energy Corporation is engaged in the strip mining of coal in Sullivan County in southwestern Indiana. Unfortunately for them, the owners of 62 acres of farmland right in the middle of the mining area are getting in the way. Peabody owns the coal beneath those 62 acres pursuant to a 1903 deed. Under that deed, the owners of the property transferred ownership of the coal and the right to mine it to Peabody. The deed also granted the use of the surface "as may be necessary" for certain mining operations and granted an option to purchase such surface area "as may be necessary" for the location of railroad tracks and buildings and other operations necessary for carrying on the mining business. Other parts of the deed limit Peabody's use of the surface to mining operations. Peabody brought an action for a declaration that it has a right to strip mine the land and for specific performance of its option to purchase. After a bench trial, the court entered judgment for the defendants. Peabody appeals.

In their opinion, Judges Posner, Rovner, and Tinder affirmed. The Court agreed with the district court that the deed was ambiguous in that it both granted the right to mine all the coal but put significant limits on Peabody's use of the surface. Because the deed is ambiguous, a court is allowed to look to extrinsic evidence to determine its intended meaning. Here, the district court heard evidence that, at the time of the deed, strip mining did not exist in Sullivan County and probably not in the United States. The Court concluded that the district court did not err in relying on that testimony in holding that the deed did not grant a right to strip mine – it only granted the right to mine the coal by underground mining and the right to use the surface for structures and activities related to the underground mining.

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STUART v. RECH (May 5, 2010)

Federal officers executed a search warrant at a company owned by James Stuart. Stuart filed a pro se motion seeking the return of property seized during the execution of the warrant. The matter was assigned to the magistrate judge who issued the warrant. The judge denied the motion, which he had treated as a Rule 41(g) motion for the return of property. A few months later, Stuart filed a second pleading naming only the agent who had applied for the warrant. In that pleading, Stuart sought damages for what he alleged was the unconstitutional seizure of chemical formulas worth millions of dollars. The district court denied the request on the ground that it was the equivalent of the earlier pleading. Stuart appeals.

In their opinion, Judges Bauer, Posner, and Evans affirmed. The Court began, as an aside, by noting that the magistrate judge who denied the original pleading likely had no authority to do so. The appeal, however, related only to the denial of the second pleading. The Court concluded that the district court erred in treating that pleading as an equivalent to the 41(g) motion. The second pleading is nothing more or less than a common law action for damages against a federal officer who is alleged to have violated the Constitution -- more commonly known as a Bivens action. The complaint should not have been dismissed on res judicata grounds. Notwithstanding the lower court’s mistake, the Court affirmed the dismissal on other grounds. The only basis for Stuart’s claim of unconstitutionality is the “frivolous squared” theory that the federal government has no authority outside of federal property. It has no possible merit.

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THOMAS v. COOK COUNTY SHERIFF'S DEPARTMENT (May 3, 2010)

In their opinion of December 1, 2009, Judges Flaum, Wood, and Williams affirmed in part and reversed and remanded in part a $4.45 million jury verdict awarded to the mother of a young man who died while in custody of the Cook County Jail (refer to the panel opinion and to my post). Cook County and the individual defendants petitioned for rehearing and rehearing en banc. With respect to the petition of the individual defendants, the panel unanimously voted to deny rehearing and no judge in regular active service requested a vote on the petition en banc. With respect to the petition of the County, however, three judges voted to grant the rehearing en banc with respect to the issue of damages. In consideration of the petition and the votes to grant the rehearing, the panel amended its opinion.

In their amended opinion, Judges Flaum, Wood, and Williams refined their analysis of the damages issue and provided some general prophylactic guidance regarding verdict forms. The panel reaffirmed its original decision upholding the verdict, notwithstanding the confusion apparent in the instructions and the verdict form.

Judge Sykes, joined by Judges Posner and Tinder, dissented from the denial of the County's petition for rehearing en banc. The principal claims in the case sought compensation for a single injury -- Norman Smith's suffering and death while in the custody of the Cook County Jail. Because liability is joint and several, the jury should not have been asked to assess damages by claim or by defendant. The dissent criticizes the panel for approving the district court's discretion to choose between the "ceiling" and the "cumulative" approaches to the confusion verdict. In the dissent's view, neither approach is supported by the Circuit's precedent. Finally, Judge Sykes is critical of the panel's reliance on the general proposition and presumption that jurors follow their instructions. Given the "bewildering hodgepodge" of instructions and the backwards verdict form, the Court cannot have any confidence that the jury acted properly. Judge Sykes would have granted the petition to address the treatment of the damage award.

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VINCE v. ROCK COUNTY (May 3, 2010)

Scot Vince had long been a confidential informant for Rock County law enforcement. Vince brought a civil rights action against the County and others after he was beaten while in the Rock County Jail. He alleged a violation of his constitutional rights by being placed in the jail's general population, considering his prior cooperation with law enforcement. Summary judgment was entered against him. His Rule 59 motion was denied on February 10, 2010. Vince's counsel filed a notice of appeal on March 12, the last day to do so. The clerk's office advised Vince's counsel that he used the wrong event code on his notice of appeal and asked that he re-file a notice with the proper code. He did so on March 18. The Seventh Circuit staff questioned the timeliness of the notice.

In their opinion, Judges Bauer, Posner, and Evans concluded that the appeal was timely. The Court relied on three rules of appellate jurisdiction to resolve the issue: a) FRCP Rule 83(a)(2) cautions that a non-willful failure to comply with a local form requirement should not cost a party a right, b) FRCP Rule 5(d)(4) directs a clerk to accept papers notwithstanding a nonconformity with local rules, and c) FRAP Rule 3(c)(4) prohibits an appeal's dismissal for "informality" of the form or title on the notice. The Court concluded that Vince's failure to include the proper event code was an error of form and was the only error on the notice. As such, and in conformity with the Court's earlier decision in Carelock, the appeal is timely. The Court concluded with an admonishment to counsel generally to be very careful with electronic transmissions so as to avoid any adverse affects on their appeals.

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LEVAN v. GEORGE (April 28, 2010)

It all started when Michael Levan got a parking ticket in Peoria. He missed a scheduled hearing and a default judgment was entered. A motion to vacate the default was filed by his attorney. On the day he thought it was scheduled to be heard, Levan went to the courthouse and engaged the city's attorney in conversation. When she advised him that the motion was not scheduled for that day, a confrontation ensued. The parties disagree about how the confrontation escalated. It is undisputed, however, that two court security officers handcuffed and pepper-sprayed Levan, and took him to a holding cell. Levan was later acquitted of disorderly conduct charges. He brought suit against the county and the security officers for false arrest and excessive use of force. A magistrate judge denied summary judgment on qualified immunity grounds, finding genuine issues of material fact. The officers and the County appeal.

In their opinion, Judges Kanne, Wood, and Hamilton dismissed the appeal. The Court first recognized that, although not a final judgment, a denial of qualified immunity at the summary judgment stage can sometimes be appealable. A denial is not appealable, however, when it rests on factual rather than legal grounds. As the Supreme Court stated in Johnson, an appeal is allowed to challenge the "clearly established" law part of the qualified immunity analysis when the legal issues are separable from the factual issues underlying the claim. Here, the magistrate Judge found genuine issues of material fact both with respect to probable cause to arrest and probable cause to use force. The individual defendants' entitlement to qualified immunity turns on the resolution of those issues of fact. The denial is therefore not appealable.

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NATIONAL CASUALTY CO. v. MCFATRIDGE (April 28, 2010)

Randy Steidl was convicted of murder in Edgar County, Illinois in the late 1980s. The Edgar County State's Attorney at the time, Michael McFatridge, conducted the prosecution. More than fifteen years later, a federal court issued a writ of habeas corpus invalidating the conviction. Steidl brought suit against McFatridge and the County, as well as several police officers. Steidl alleged that McFatridge framed him by threatening witnesses and concealing exculpatory evidence at trial -- and that McFatridge continued his campaign long after he left office. He brought claims under § 1983 for false arrest, false imprisonment, malicious prosecution, conspiracy, and intentional infliction of emotional distress. The County tendered the complaint to its insurers. The insurers sought a declaration that they had no duty to defend. The court granted summary judgment to the insurers. McFatridge and the County appeal.

In their opinion, Chief Judge Easterbrook and Judges Bauer and Rovner affirmed. The Court first stated the well-settled rule in Illinois that an insurer has a duty to defend if the complaint alleges facts potentially within the coverage of the policy. At issue in the case were four policies: a law enforcement liability policy and three CGL policies, one per year from mid-1997 until mid-2000. First addressing the law enforcement policy, the Court agreed with the district court that it did not cover the County's liability. The principal insured under that policy was the County of Edgar Sheriff's Department. Although the County itself was an additional insured, it was so only with respect to liability arising out of the activities of the Sheriff's Department. The allegations of the complaint directed at McFatridge and the County were unrelated to any activities of the Sheriff's Department. The Court also relied on the definition of "occurrence" and the fact that McFatridge was not a County employee in affirming the coverage denial under the law enforcement policy. On the other hand, the CGL policies did insure the County and its elected officials for liability arising from offenses like false arrest and imprisonment. The Court also affirmed coverage denial under these policies, however. McFatridge was not an elected official during any of the three policy years and none of the alleged wrongs occurred during the policy years. The federal and state claims relating to false arrest and false imprisonment offenses accrued at the time of Steidl’s original arrest, long before the first policy year. The federal and state claims relating to the wrongful conviction, on the other hand, did not accrue until after Steidl’s conviction was invalidated, long after the last policy year.

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DEXIA CREDIT LOCAL v. ROGAN (April 26, 2010)

Peter Rogan went to Dexia Credit Local to guarantee the bond repayment for his Edgewater Medical Center. He did not tell Dexia that he was involved in a Medicare and Medicaid fraud scheme. Dexia sued Rogan and obtained a default judgment of over $100 million after Rogan absconded to Canada. Dexia served Rogan's wife Judith with a citation to discover assets and filed an ex parte motion for a Temporary Restraining Order to freeze certain of her assets. Dexia alleged that Judith was helping Rogan conceal his assets. The court granted the TRO and prohibited Judith from transferring certain of Rogan's assets. Judith objected to the TRO on several grounds but the court denied relief, stating that it would consider her arguments at a later hearing on a preliminary injunction. Judith presented evidence at the preliminary injunction hearing -- but later withdrew all of it. The district court granted the preliminary injunction. Judith appealed. During the pendency of the appeal, Judith discovered that complete diversity was absent in the original action brought by Dexia against Rogan. She returned to the district court and moved to dismiss the citation. The district court denied - it instead dismissed the non-diverse defendants, concluding that they were not necessary parties.

In their opinion, Chief Judge Easterbrook and Judges Rovner and Sykes affirmed. The Court upheld the jurisdictional ruling on two alternative grounds: a) once a final decision is entered, Judith cannot collaterally attack the lack of subject matter jurisdiction in the district court, and b) Federal Rule of Civil Procedure 21 allows a district court to dismiss non-diverse, unnecessary parties before or after final judgment. On the merits of the preliminary injunction, the Court rejected each of Judith's objections: the order was sufficiently precise in its prohibitions and the court was sufficiently complete in its reasoning to satisfy Rule 65(d), the court's oral recitation of its findings was sufficient to satisfy Rule 52, the injunction was sufficiently tailored to address Judith’s alleged broad misconduct, and the fact that she was not a party to the underlying lawsuit did not prevent the court from entering the injunction.

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EGONMWAN v. COOK COUNTY SHERIFF'S DEPARTMENT (April 22, 2010)

Iyare Egonmwan was a black male jail guard at the Cook County Jail. In 2001, he was transferred into the women's division. The following year, the female superintendent of the division disciplined him for conduct that had occurred prior to his transfer. Several days later, Egonmwan accused the superintendent of sexual harassment. The claim was investigated and determined to be unfounded. In 2003, during a general investigation into allegations of sexual misconduct between guards and prisoners, a female detainee informed the investigators that she and at least one other prisoner had had a sexual encounter with Egonmwan. Although Egonmwan was acquitted of criminal charges in 2004, an administrative hearing board terminated his employment in January of 2005 for violation of institutional rules. Egonmwan brought suit against, among others, Cook County and the Sheriff's Department. He alleged § 1981 race discrimination and § 1983 gender and race discrimination. The district court granted summary judgment to the defendants. Egonmwan appeals.

In their opinion, Judges Cudahy, Evans, and Sykes affirmed. The Court first affirmed the summary judgment on the gender discrimination claim. Egonmwan proceeded under the direct method but presented only a few isolated remarks by the women's division superintendent. The Court noted that isolated remarks may be sufficient to establish a discriminatory motive, but they must be made by the decision-maker, at the time of the decision, and regarding the decision. Here, the Court doubted (but did not decide) that the superintendent could be considered the decision-maker. It upheld the summary judgment because of the seven to ten month lag between the remarks and the action and the fact that the remarks did not refer to Egonmwan's termination. With respect to the race discrimination claim, the Court concluded that Egonmwan was unable to show that similarly situated non-blacks were treated more favorably or that the defendants' reasons for his termination were not legitimate.

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SWEARNIGEN-EL v. COOK COUNTY SHERIFF'S DEPARTMENT (April 22, 2010)

Swearnigen-El was a black male guard in the women's division at the Cook County Jail. He had a run-in with the head of the division, who wanted the correctional staff in the women's division to be comprised totally of women. Swearnigen-El thought that belief was discriminatory and he reported his concerns to other supervisors. Shortly thereafter, Swearnigen-El found himself in trouble when a female prisoner's allegations that male guards were engaged in sexual activity with female prisoners launched an investigation. The Sheriff's Police conducted the initial investigation, followed by an investigation by the State's Attorney’s office. Several prisoners reported that Swearnigen-El was having sex with a female prisoner. The prisoner herself admitted the activity. Swearnigen-El was de-deputized and transferred for violating a General Order that forbids "activities unbecoming" an employee. He was later charged with sexual misconduct and suspended with pay. Before he had a termination hearing with the merit board, Swearnigen-El resigned. After he was acquitted of the criminal charges, he filed a complaint alleging gender discrimination, race discrimination, Title VII retaliation, First Amendment retaliation, malicious prosecution, and intentional infliction of emotional distress. The district court dismissed the Title VII retaliation claim and granted summary judgment to the defendants on all other claims. Swearnigen-El appeals.

In their opinion, Judges Wood, Evans, and Sykes affirmed. The Court first upheld summary judgment on all gender and race discrimination claims because there was no adverse employment action. Swearnigen-El was de-deputized and transferred after a internal investigation demonstrated evidence of misconduct. His pay was not affected and there was no evidence that the conditions were intolerable. The Court concluded that no reasonable jury could find a constructive discharge under those circumstances. Alternatively, the Court found that Swearnigen-El a) failed to establish sufficient evidence of race or gender discrimination to create a triable issue, and b) was not meeting his legitimate job expectations. Next, the Court considered the First Amendment retaliation claim. The principal speech at issue was Swearnigen-El's disagreement with his superior regarding the staffing of the women's division and his subsequent complaints to other officials that her actions constituted discrimination. The Court concluded that the speech was not protected -- Swearnigen-El was speaking not "as a citizen" but as a public employee under Garcetti. Again, the Court came to the alternative conclusion that no reasonable juror could find the defendants' actions pretextual. On the claim of malicious prosecution, the Court found sufficient evidence of misconduct after the investigation to establish probable cause. Since the absence of probable cause is an element of a malicious prosecution claim, Swearnigen-El's claim must fail. Finally, the Court agreed that there was no "outrageous" conduct that would amount to an intentional infliction of emotional distress claim and upheld the district court's dismissal of the Title VII retaliation claim on the ground that Swearnigen-El failed to include it in his EEOC charge.

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INDIANA PROTECTION AND ADVOCACY SERVICES v. INDIANA FAMILY AND SOCIAL SERVICES ADMINISTRATION (April 22, 2010)

In 1986, Congress enacted the Protection and Advocacy for Individuals with Mental Illness Act (the "Act"). The general purpose of the Act was to protect the rights of individuals with mental illnesses and specifically to assist states in operating protection and advocacy systems for those individuals. States are entitled to federal funds if they create such a protection and advocacy system. The system can be either a private entity or an independent state agency. Indiana created Indiana Protection and Advocacy Services ("Services"), an independent agency. The Act gives Services the authority to investigate instances of abuse and requires that Services have access to patient records. In 2006, Services opened investigations into two instances of possible abuse or neglect at the LaRue Carter Memorial Hospital. LaRue Carter is a psychiatric hospital operated by the Indiana Family and Social Services Administration ("FSSA"). In both investigations, Carter withheld patient records requested by Services. Services brought an action against the State of Indiana, FSSA, and three state officials in their official capacities. The complaint sought only injunctive and declaratory relief. The district court granted the relief. A panel of the Seventh Circuit reversed. The panel concluded that Services did not have a private right of action under the Act, could not sue under § 1983 because it was not a "person" under that section, and that the Eleventh Amendment barred the suit. Services sought rehearing en banc.

In their opinion, Chief Judge Easterbrook (dissenting) and Judges Posner (concurring), Flaum, Kanne, Rovner, Wood, Williams, Sykes, and Hamilton affirmed the judgment of the district court as modified to provide relief only against the named state officials. The Court first held that the Eleventh Amendment did not bar the suit. Although that amendment typically prevents a state or its agencies and officials from being sued in federal court by its own citizens, there are exceptions. Under the Ex parte Young exception, a state official who violates a federal law is considered to be acting outside his or her authority and not immune from suit. The required inquiry is whether the complaint seeks prospective relief for an ongoing violation of federal law. The Court found that inquiry satisfied with respect to the individually named state officials, although not with respect to the state and FSSA. Next, the Court concluded that the Act authorized Services’ suit. The Court undertook an analysis of whether Congress intended to create a private right and private remedy in the Act. Citing several provisions of the Act and interpreting the language, structure and purpose of the Act, the Court concluded that Congress did create a private right of action for access to patient records for protection and advocacy systems such as Services. In doing so, it rejected the defendants' arguments that the Act is simply an exercise of Congress's spending power, that the obligation to provide access to patient records is simply a condition inherent in accepting federal funding, and that the only remedy for the violation is to cut off the funding. Finally, on the merits, the Court had little difficulty in rejecting defendants' argument that the peer review records sought by Services were not "records" under the Act. It simply adopted the unanimous treatment given the question by the four circuits that have addressed the issue.

Judge Posner joined the Court's opinion "without reservation" but wrote separately on whether the Act provided a private cause of action. He wrote of several practical considerations that he believed supported the conclusion that the Act contained a private right of action.

Chief Judge Easterbrook dissented. Although he agreed with the conclusion that the Ex parte Young exception to Eleventh Amendment immunity applied, he disagreed with the conclusion that Services had a private cause of action. With respect to § 1983, Services is not a "person" and therefore cannot sue under that section. With respect to the Act itself, Chief Judge Easterbrook concluded that the Supreme Court's cases do not support the conclusion that a right of action can be implied in the Act.

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HAPPEL v. WALMART STORES (April 19, 2010)

Heidi Happel was diagnosed with multiple sclerosis in the early 1990s. In 1993, her primary care physician prescribed a pain reliever for an unrelated condition. In fact, she was allergic to the medication. Her physician phoned the prescription to a Walmart pharmacy were Happel typically filled her prescriptions. Despite the fact that Walmart's computer system and Happel's husband both alerted the pharmacist to her allergy, he filled the prescription anyway. Happel immediately went into anaphylactic shock. Her general health quickly deteriorated. She and her husband sued Walmart -- Happel brought a negligence claim and her husband brought a loss of society claim. The Happels listed the original diagnosing physician as a witness but did not disclose him as an expert or tender an expert report. They did list a neurologist as their expert. Just before trial, the Happels attempted to add the diagnosing physician as an expert. The district court denied their request. The court also excluded much of the neurologist’s testimony. In its instructions, the court included the loss of society claim within the negligence claim. It then submitted to the jury a verdict form that contained only a single line for an award of damages. The jury awarded $465,400. The court reduced the award by $150,000 because of a settlement before trial with the primary care physician. The Happels appeal.

In their opinion, Judges Flaum, Williams, and Sykes reversed and remanded. The Court first addressed the expert issues. With respect to the diagnosing physician, the Court noted that the Happels only addressed his qualifications – but that was not the basis for the lower court's exclusion. The Court found no abuse of discretion in the lower court's excluding the diagnosing physician as an expert when plaintiffs failed to disclose him as such during discovery. With respect to the neurologist, the district court excluded his testimony regarding Happel's multiple sclerosis because he had very little experience with multiple sclerosis. The Court found no abuse of discretion. With respect to the damages verdict, the Court noted that the lower court treated the loss of society claim as simply one aspect of the overarching negligence claim. Although the court instructed the jury to return separate verdicts for each of the plaintiffs, the verdict form it provided had only a single line for a damages award. The Court concluded that the jury instructions and the form of verdict were ambiguous. As a result, it is impossible to determine Although it was error to give the instruction and use the form, the Court noted that it still had to find prejudice before granting a new trial. It found prejudice in reference to the set-off amounts. Each individual plaintiff had settled with the primary care physician for $75,000 each. If the jury intended to award each of the plaintiffs more than $75,000, the $150,000 ($75,000 from each) set off is correct. However, if the jury's intent was to award either plaintiff less than $75,000, that plaintiff's set-off would be capped at the amount of the award and the total set-off would then be less than $150,000. Having found prejudice, the court reversed for new trial on damages.

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IN RE: ALTHEIMER & GRAY (April 15, 2010)

Mark Berens practiced law at Altheimer & Gray, a Chicago-based international law firm. He was a capital partner at the firm -- he invested capital, he voted, he was listed on the articles of partnership, and his compensation was based on the firm's profits. He qualified as a partner under the definition of the Uniform Partnership Act. In 1999, he withdrew from the partnership and signed a contract pursuant to which he gave up any right to the profits of the firm. In lieu, he agreed to a salary. Under the practice at the law firm at the time, he was still called a "partner." In 2003, the firm, which had been in existence for almost 100 years, entered involuntary bankruptcy. The firm and its creditors agreed to a liquidation plan under which any firm debt to a "partner" was subordinated to other debts. The plan defined "partner" to include both the firm's "unit partners" and the "non-unit partners." Within the firm, "unit partners" were those who shared in the profits. "Non-unit partners" were the salaried, or contract, partners. Berens filed a claim for over $300,000 that he claimed was owed to him by the firm. When the trustee failed to pay the claim, Berens filed a motion in the bankruptcy court for relief. The bankruptcy court denied the motion and the district court affirmed. Berens appeals.

In their opinion, Chief Judge Easterbrook and Judges Bauer and Hamilton affirmed. The question presented to the Court was whether Berens was a "partner" under the liquidation plan and therefore subordinate to other creditors. The Court agreed with Berens that his position with the firm after 1999 did not qualify as a "partner" under the Uniform Partnership Act. The plan of dissolution, however, had its own definition of "partner" and did not adopt or refer to the definition contained in the Uniform Partnership Act. There is nothing in the bankruptcy law that requires a dissolution plan to adopt any particular definition of a term. In fact, as Chief Judge Easterbrook pointed out in his opinion, the plan could have used a word from a nonsense poem (can you say “borogrove”?) instead of “partner” as long as it defined it properly. Berens was clearly a partner as that term is defined in the dissolution plan -- therefore his claim is subordinate to the claims of other creditors.

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