Seventh Circuit Court of Appeals Commentary : In Their Opinion : Lawyer & Attorney Michael E. Rigney : GVC Ltd. Law Firm

KATHREIN v. EVANSTON (March 11, 2011)

Evanston, Illinois adopted a Demolition Tax as part of its policy to maintain affordable housing. Under the ordinance, every residential demolition carries with it a tax. There are exemptions if the owner replaces the building with an affordable housing, if the owner otherwise provides a affordable housing, or if the owner has lived in the building for three years and will continue to live in it for three years. Shortly after Michael and Victoria Kathrein agreed to sell their home in Evanston, the purchaser learned of the tax and demanded a reduction in the purchase price. The Kathreins refused and the sale was not consummated. The Kathreins brought suit pursuant to § 1983, alleging that the tax violated the United States and the Illinois Constitutions, as well as Illinois law. The Kathreins also challenged the constitutionality of the Tax Injunction Act (TIA). Judge Guzman (N.D. Ill.) granted Evanston's motion to dismiss. He concluded that he had no jurisdiction because of the TIA and that the Kathreins lacked standing to challenge either the TIA or the tax. The Kathreins appeal.

In their opinion, Judges Ripple, Kanne, and Sykes affirmed with respect to the TIA challenge but reversed and remanded in all other respects. The Court began with a discussion of the TIA. The TIA prevents a federal court from enjoining or restraining the collection of a state tax if a state court provides a speedy and efficient remedy. But it applies only to taxes, not to every payment to the state. The Court identified four kinds of payments that are not taxes, including what it called "regulatory devices." A regulatory device uses monetary incentives to regulate behavior -- behavior that the state wants to deter. The Court concluded that the Demolition Tax was a regulatory device, not a tax, after considering several factors: a) it was part of a complex scheme aimed at deterring only those demolitions considered harmful, b) the substantial amount of the tax ($10,000), given the price elasticity of the market, deters developers from demolishing less expensive homes, c) the tax raises an insubstantial amount of revenue relative to Evanston's total revenue, and d) the revenue does not go to the general fund but instead is used to promote affordable housing in the city in other ways. Because the Court noted that the TIA did not divest the court of jurisdiction, it also concluded that it caused no injury to the Kathreins. They therefore had no standing to challenge its constitutionality. The Court concluded, however, that the Kathreins did have standing to challenge the tax ordinance. After identifying several bases for standing set forth by the Kathreins and amicus that did not confer standing (e.g., their status as tax payers, the increased cost of demolishing their house, the failed real estate transaction), the Court identified one that did. The uncontradicted testimony of the Kathreins and the developer who wanted to purchase the property established that the tax decreased the market value of the property. This reduction in value is an "injury in fact" and confers standing, even if the Kathreins have no present intent to sell their home. The Court remanded for consideration of their challenge on the merits.

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CENTRAL STATES, SOUTHEAST AND SOUTHWEST AREAS PENSION FUND v. AUFFENBERG FORD, INC. (March 11, 2011)

Auffenberg Ford employs workers who are represented by Local 50 of the International Brotherhood of Teamsters. Auffenberg participated in a multi-employer pension fund for several years before withdrawing in 1997. It had to pay a $50,000 withdrawal liability at the time. A few years later, the Local's president encouraged Auffenberg to re-enter the fund. Auffenberg agreed to do so only if it could withdraw again after five years without any withdrawal liability. Auffenberg and the Local’s president orally agreed on that point, but the Collective Bargaining Agreement did not include that term. Instead, it provided that all of its terms would remain in effect until a new agreement was negotiated. The CBA expired in April of 2006 but negotiations for a new agreement continued into February of 2007. The Local's new president orally agreed to honor the 2001 commitment. Auffenberg advised the Fund of this new oral agreement by letter. Auffenberg and the Local agree that Auffenberg’s obligation to the Fund stopped when the CBA expired in April 2006. But the Fund disagreed. It filed suit under ERISA to collect what it considered unpaid contributions. Judge Gettleman (N.D. Ill.) granted summary judgment to the Fund, concluding that evidence of the 2001 oral agreement was barred by the parole evidence rule. Auffenberg appeals.

In their opinion, Judges Manion, Rovner, and Sykes affirmed. ERISA requires that benefit plan terms be "established and maintained" in a written instrument. Similarly, the Labor Management Relations Act requires that the basis of a benefit plan payment be described in writing. The only written agreement here, the 2001 CBA, required fund contributions until a new CBA was negotiated. The Court concluded that the 2001 oral agreement did not change the terms of the CBA, even though notice of the oral agreement was given in writing. The oral commitments of the Local's presidents are simply unenforceable.

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JOHNSON v. MANITOWOC COUNTY (March 10, 2011)

Steven Avery was convicted of rape in Wisconsin state court in 1986. After serving 18 years in jail, he was released in 2003 after DNA evidence suggested that he did not commit the crime. He filed a multi-million dollar lawsuit against Manitowoc County authorities. Avery lived in a trailer and garage rented  from Roland Johnson. A few years after his release, a magazine photographer disappeared after meeting with Avery on Johnson's property. An investigation ensued, with Avery a prime suspect. Several search warrants were executed at the trailer and garage. During the searches, the investigators broke up a portion of the concrete garage floor with a jackhammer, damaged the garage door, and damaged the trailer. They also seized a number of personal items. Johnson brought suit against County officials under § 1983, alleging violations of the Fourth, Fifth, and Fourteenth amendments. Judge Randa (E.D. Wis.) granted summary judgment to the defendants. Johnson appeals.

In their opinion, Judges Flaum, Rovner, and Evans affirmed. The Court first considered Johnson's argument that the use of the jackhammers violated the Fourth Amendment. The Fourth Amendment requires reasonableness, and measures it under the totality of the circumstances. The Court rejected Johnson' argument that the availability of a less invasive tool made the use of the jackhammers unreasonable. The Fourth Amendment does not require the least destructive approach to the execution of a search warrant. The Court concluded that the use of the jackhammers was reasonable under the circumstances. The Court turned to Johnson's claim that the Fifth Amendment Takings Clause entitles him to compensation. But the Takings Clause does not apply when the "taking" results from a government power other than the power of eminent domain. Here, any property seized or destroyed by government authorities was done so under its police power. The Court did note that Johnson may have some state remedies, both for compensation for damages and the return of his property – but he does not have a federal constitutional claim.

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ABNER v. SCOTT MEMORIAL HOSPITAL (March 9, 2011)

Plaintiffs Abner and Kendall brought suit against Scott memorial Hospital pursuant to the False Claims Act. In the district court, Chief Judge Young (S.D. Ind.) granted summary judgment to the Hospital. Plaintiffs appeal.

In their opinion, Judges Bauer, Posner, and Manion affirmed. The Court had little comment on the merits of the case. Instead, it noted that appellants' brief, although it contained the required 14,000 word certification, actually contained 18,000 words. When the appellee brought this fact to the Court's attention, the Court issued an order to appellant to show cause "why their brief should not be stricken and/or sanctions imposed." In response, appellants' lawyer conceded the error, claimed it was inadvertent, falsely claimed that appellee's counsel brought the matter to the Court's attention via an ex parte contact, and offered no persuasive grounds for leave to file the brief. The Court struck the brief and noted that it would have had no reason to go further had it been filed within an accurate certification. In fact, the severity of the offense here would justify dismissal of the appeal as a sanction. But the Court did not dismiss the appeal. Instead, the Court concluded that the appeal had no merit. The Court denied the motion for leave to file the oversize brief, summarily affirmed summary judgment for the defendants, and let its words stand as fair warning to future litigants.

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ALDRIDGE v. FOREST RIVER, INC. (March 8, 2011)

Linda Aldridge and her husband purchased a recreational vehicle manufactured by Forest River. The RV was equipped with a step controller, a device that expands and retracts the vehicle's steps. The step controller was manufactured by Specific Cruise Systems. During a Florida vacation, Linda Aldridge fell while descending the steps. Aldridge brought suit against Forest River and SCS, alleging theories of strict liability in that the step controller retracted without warning, causing her fall. Throughout motion practice, expert discovery, and interrogatory answers, Aldridge limited her theory of liability to the allegedly defective step controller. Shortly before trial, over Aldridge’s objection, the trial court granted Forest River's motion in limine to bar any argument that the RV itself was the defective product. At trial, Aldridge attempted to amend her complaint to allege that the RV was a defective product. The court denied her request. The trial court also amended Aldridge's jury instruction that would have asked the jury to determine if the RV was defective. The jury found in favor of the two defendants. Judge Bucklo (N.D. Ill.) denied the request for a new trial, concluding that Aldridge had maintained throughout the proceedings that the step controller was the cause of her injuries and expanding the theory of liability would prejudice the defendants. Aldridge appeals.

In their opinion, Circuit Judges Kanne and Tinder and District judge Herndon affirmed. The Court noted that it reviewed all of Aldridge’s contentions -that the district court erred in granting the motion in limine, denying the motion to amend, amending the jury instruction, and denying the motion for a new trial --- under an abuse of discretion standard. Not surprisingly, the Court was not persuaded by any of Aldridge's contentions. The grant of the motion in limine conformed to the expectations of the parties and prevented surprise. The denial of the motion to amend prevented the reopening of discovery and the addition of the new liability theory during trial. The amendment of the jury instruction conformed to the evidence presented during the trial and was not misleading or improper. The denial of the motion for new trial was proper when there was a reasonable basis to support the verdict.

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GROSS v. PPG INDUSTRIES (March 7, 2011)

PPG Industries has employed Eric Gross as an industrial technician since 1997. Gross is a member of the United States Marine Corps Reserve. He was called up for active duty in 2004. Before he left, he met with the PPG's human resources advisor, who explained his benefits. PPG’s policy guaranteed his return to his job and also paid him the differential between his PPG salary and his military salary. PPG computed the salary differential by subtracting his military monthly base pay from his PPG monthly base pay. When Gross returned from deployment, he submitted a complaint regarding the differential calculation. Since Gross was required to work more days per month in the military, he wanted PPG to: a) calculate a daily rate of pay for his military job, and b) subtract from his PPG salary his military salary for only those days he would have worked at PPG. PPG refused to apply that calculation retroactively, but did adopt it prospectively. Gross brought suit against PPG pursuant to the Uniformed Services Employment and Reemployment Act. Judge Stadtmueller (E.D. Wis.) granted PPG summary judgment. Gross appeals.

In their opinion, Judges Cudahy, Rovner, and Evans affirmed. The Court first addressed Gross' argument that the pay calculation violated the Act. Under § 4311, someone in Gross' position cannot be denied a "benefit of employment" because of his service obligations. The Court noted that it has very recently held (opinion and intheiropinion) that § 4311 does not require an employer to provide benefits to military personnel that it does not offer to other employees. Section 4311's purpose is to protect military personnel from discrimination, not to provide preferential treatment. The Court added that Gross would not be entitled to relief even if it accepted his argument that differential pay was a "benefit of employment." PPG did not deny Gross his differential pay. It just did not pay it under Gross' calculations -- nor was it required to. Next, the Court considered and rejected Gross’ retaliation claim. The Act only prohibits an adverse employment action against a person who has sought protection under the Act. Here, there was no adverse employment action. PPG paid Gross under a calculation that it was within its rights to use and denied him no pay. Even if the calculation constituted an adverse employment action, it could not amount to retaliation. All of the calculations and payments under the PPG formula took place before Gross made any complaints. They could not possibly been in retaliation for something that had not yet occurred.

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IN RE: BERGERON (MARCH 4, 2011)

Lucille Iacovelli was not happy with her plastic surgery. She allegedly posted several derogatory comments about the doctor on the Internet. The doctor brought suit for, among other things, defamation. The district court judge entered an injunction ordering that all such postings be removed. Rich Bergeron maintained some of the websites that contained the alleged defamatory postings and was, for purposes of the injunction, Iacovelli's agent. Judge Barker (S.D. Ind.) refused Bergeron's request for her to recuse herself, held him in contempt, and imposed a monetary sanction. The defamation suit remains pending in the district court and Bergeron's appeal from the sanctions order is pending in the appellate court. Here, Bergeron petitions for a writ of mandamus in order to remove Judge Barker.

In their opinion, Judges Posner, Williams, and Tinder denied the petition. The Court first distinguished between Bergeron's desire to remove the judge from the defamation case and his desire to remove her from the contempt proceedings. Bergeron is not a party to the defamation case. As such, he has no basis on which to seek Judge Barker's removal. He is obviously a party to the contempt proceedings and mandamus is a proper vehicle to bring the recusal issue to the Court's attention. But here, the judge is through with the case -- there is nothing to remove her from. The Court indicated that the result could have been different under two scenarios. First, Bergeron sought mandamus before the sanction was imposed. Had he also sought and been granted a stay of those contempt proceedings, the Court could have considered his arguments. Second, the Court indicated that it might have ordered a new proceeding in an "egregious case" of bias. The appearance of impropriety alleged here is not such a case.

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ARLINGTON LF, LLC v. ARLINGTON HOSPITALITY, INC. (March 3, 2011)

Arlington Hospitality, Inc. owned a number of hotels, mostly in the Midwest. Because of financial difficulties, Arlington filed for Chapter 11 bankruptcy in 2005. At about the same time, it entered into an agreement with a special-purpose entity, Arlington LF. Pursuant to the agreement, LF agreed to provide a $6 million revolving loan as well as other financing. Arlington agreed to two fees, "payable immediately" -- a $100,000 commitment fee and a $210,000 funding fee. The bankruptcy court approved the agreement with the caveat that LF had to give Arlington notice of any default and three business days to cure. A few weeks later, after Arlington had drawn down over $3 million of the loan, LF told Arlington's investment banker that it was unwilling to fund additional monies. LF also told the creditors’ committee did it would make no further loans. Only after those statements were made did tell LF actually send Arlington an invoice for the unpaid fees. When Arlington failed to pay, LF sent the required notice of default and gave Arlington three days to cure. Arlington still did not pay. Instead, with the court's approval, it sold its assets to a third party. It repaid the money it had borrowed from LF but not the fees. LF filed a motion in the bankruptcy court for its fees. The bankruptcy court denied the motion, ruling that LF was not entitled to the fees because it was guilty of an anticipatory breach. The district court reversed and remanded. It noted that, because the fees were "payable immediately," Arlington was already in default at the time of the breach. On remand, the bankruptcy court agreed with Arlington that it was not in default before LF’s breach because LF had not provided the required notice and opportunity to cure. It nevertheless felt bound by the district court's earlier opinion and awarded LF $842,000. The district court again reversed. It stated that the bankruptcy court had misunderstood the scope of its earlier ruling. It agreed that Arlington could not have been in default until it had an opportunity to cure. It remanded with instructions to enter judgment for Arlington. LF appeals.

In their opinion, Judges Bauer, Wood, and Williams affirmed. The Court concluded that it was faced with a rather simple question -- who breached the contract first? Under Illinois law, an unequivocal intent not to perform amounts to an anticipatory breach. The Court found no clear error (and, in fact, agreed with) the bankruptcy court's findings that the statements to the investment banker and the creditor's committee constituted just such a breach. Statements to the investment banker, Arlington’s agent, are the same as statements to Arlington. The Court also rejected LF's argument that the Statement of Account that it later sent to Arlington acted as a retraction of its breach. The only "retraction" was one line on the form indicating $2.5 million of available loan commitment. That statement is not sufficiently clear and unequivocal to constitute a retraction of the earlier breach. By the time LF provided the required notice, it was in breach. Its breach discharged Arlington's remaining obligations, including its obligation to pay the fees.

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AULT v. SPEICHER (March 3, 2011)

In late 2004, the Illinois Department of Children and Family Services received a tip that Dana Ault's boyfriend had physically abused one of her four children. Ault sent her children to live with her mother to prevent them from being placed in foster care. The Department assigned Leslie Speicher as Ault’s caseworker. Speicher developed a plan to which Ault agreed. Under the plan, the children would continue to reside with Ault's mother. In mid-2005, Speicher suggested to Ault's mother that she should attempt to gain legal custody of the children. In fact, Speicher told Ault that she would file for custody in court if Ault did not agree to transfer custody to her mother. Both Ault and her mother believed that Ault could retain custody only as long as they agreed to leave the children with the mother. When Ault refused to sign a subsequent plan, the Department sought an adjudication of wardship. The court denied the petition and Ault's children were allowed to return to her care. Ault filed suit against Speicher pursuant to § 1983, alleging violations of the First, Ninth, and Fourteenth Amendments. Judge Herndon (S.D. Ill.) granted summary judgment to Speicher, concluding that there was no constitutional violation and, alternatively, that Speicher was entitled to qualified immunity. Ault appeals.

In their opinion, Circuit Judges Bauer and Williams and District Judge McCuskey affirmed. The Court addressed only the qualified immunity issue and only the second prong of the familiar test, whether the constitutional right allegedly violated was clearly established at the time. In order to carry its burden, a plaintiff must either present case law well articulating the right and applying it in a similar factual circumstance or show that the conduct’s unconstitutionality was obvious. With respect to the case law, the Court stated that the plaintiff’s cases simply stood for the proposition that parents have certain constitutional rights in family choice issues. They are not at all similar to the factual circumstances here. Even the alleged violations of state law do not establish a violation of a clearly established constitutional right. The Court also concluded that Speicher’s acts were not obviously unconstitutional, given that Ault was still in a relationship with a man accused of child abuse and that she had earlier agreed to the children’s placement with her mother.

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On April 13, 2011, the Court granted petitions for rehearing en banc with respect to the Tax Injunction Act issue. On July 8, the en banc Court, in a 5-3 vote, disagreed with the panel and affirmed the district court’s conclusion that the Tax Injunction Act applied.

EMPRESS CASINO JOLIET CORP. v. BLAGOJEVICH (March 2, 2011)

In 2006, Illinois Governor Rod Blagojevich signed into law the 2006 Horse Racing Act. The Act required the state's four highest grossing casinos to pay 3% of their adjusted gross revenue into a fund. The fund was kept separate from other state funds and was not available to any state agency or program. Instead, the money in the fund was paid to five horseracing tracks in Illinois. The purpose of the Act, according to legislative findings, was to assist the horseracing industry, which had suffered financially after casinos were allowed to operate in Illinois. The casinos challenged the Act in state court. The Illinois Supreme Court upheld the Act against state and federal constitutional challenges. A few months later, the United States brought political corruption charges against Blagojevich. In an affidavit attached to the criminal complaint, an FBI agent described conversations in which Blagojevich discussed receiving money in return for his support of the Horse Racing Act. The casinos returned to state court and sought post-judgment relief based on this information. The state court denied relief, concluding that the legislature's motive in passing the Act was irrelevant to its constitutionality. The casinos then brought suit in federal court against Blagojevich, the racetracks, and the owner of two of the racetracks. The complaint alleged a RICO conspiracy and sought a constructive trust to prevent the racetracks from receiving any money. Blagojevich moved to dismiss on legislative immunity grounds. One or more of the defendants also moved to dismiss the RICO claim on res judicata and for failure to state a claim and moved to dismiss the constructive trust claim on several grounds: that it was barred by the Tax Injunction Act, that it was premature, that there was no unjust enrichment, res judicata, and Colorado River abstention. Judge Kennelly (N.D. Ill.) rejected the legislative immunity claim and denied the motions to dismiss the RICO claim, but dismissed the constructive trust claim on the grounds that the Tax Injunction Act eliminated jurisdiction. Blagojevich appealed the legislative immunity ruling and the casinos appealed the constructive trust ruling.

In their opinion, Judges Bauer, Posner (dissenting), and Sykes reversed both with respect to the legislative immunity claim and the constructive trust claim. With respect to legislative immunity, the Court cited Tenney for the proposition that state officials are absolutely immune from damages suits arising from their legislative activity. Although the Supreme Court has never applying that principle to a governor, the Court saw no reason that it would not apply and noted that other circuits have so extended the principle. The principle applies even when the legislative activity is illegal or improper. The Court rejected the casinos’ argument that Blagojevich’s immunity should be decided in reference to state law, relying on the Supreme Court's decision in Lake Country Estates. The Court also expressed its view that the Illinois Supreme Court's decision in Jorgensen (where it rejected Blagojevich’s claim of legislative immunity) would not control even if state law did apply. Jorgensen was not a damages case, but was a constitutional attack on Blagojevich's judicial pay raise veto. Therefore, Blagojevich is immune and the RICO claim should be dismissed. The Court moved on to consider the Tax Injunction Act argument. That Act prohibits a federal court from interfering with the collection of state taxes where there is a sufficient remedy in state court. The only real issue presented under the Act is whether the 3% casino surcharge is a tax. The Court concluded that it was not because it had none of the normal indicia of a tax. The Act never referred to as a tax, the only targets of the Act are four casinos, the only beneficiaries of the Act are five racetracks, the money is segregated from all state funds, the money is not available to any state program or agency, the Act has a regulatory purpose (protecting the racetracks from competition), and the Act was enacted under the state's police power, not its taxing power. Therefore, the Tax Injunction Act does not apply and the constructive trust claim can be considered. Given the Court's treatment of the Tax Injunction Act issue, it proceeded to consider the defendants’ alternate grounds to dismiss the constructive trust claim. First, it rejected the argument that the Illinois Supreme Court's decision on the casinos’ constitutional challenge had any preclusive effect on the case. Both the causes of action and the parties were different. Next, it rejected the argument that the state court’s denial of post-judgment relief had preclusive effect on the case. In fact, the state court denied relief because the allegations of corruption were unrelated to the constitutional challenge before the court. The Court rejected the collateral estoppel and Colorado River abstention arguments for much the same reason -- a constitutionality challenge is fundamentally different from a RICO claim. Finally, the Court rejected defendants' argument that their actions were not the proximate cause of the casinos' injuries.

Judge Posner dissented both with respect to the legislative immunity issue and the Tax injunction Act issue. With respect to immunity, he agreed that the general rule is that a state official is entitled to legislative immunity. But if Illinois grants its officials less than complete immunity, federal common law should do the same. There is no federal interest served in affording a state official more protection in federal court that he would enjoy in a state court. Because it was not clear in Jorgensen whether the Illinois Supreme Court would grant legislative immunity in a civil damages case, judge Posner would certify the question to that court. With respect to the Tax Injunction Act issue, Judge Posner agreed that the only question was whether the surcharge was a tax -- and he concluded that it was. He agreed that not every state receipt of money was a tax, but he distinguished between taxes and fees by asking whether the charge was based on a reasonable estimate of the cost of some service provided. The charge imposed on the casinos here is not a fee for a service but a subsidy for the racetracks. Therefore, it is a tax and the Tax Injunction Act applies.

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ZAMECNIK v. INDIAN PRAIRIE SCHOOL DISTRICT (March 1, 2011)

Heidi Zamecnik and Alexander Nuxoll were public high school students who opposed homosexuality on religious grounds. In response to a "Day of Silence" promoted by a group critical of those who harassed homosexuals, they participated in a "Day of Truth" the next following school day. Zamecnik wore a shirt bearing the phrase "Be Happy, Not Gay." A school official covered the words "Not Gay" and prohibited the phrase as a violation of the school’s rule against derogatory comments. Zamecnik and Nuxoll brought suit and sought a preliminary injunction. The district court denied the application for an injunction. Almost 3 years ago, the Court reversed. The Court reviewed the phrase as "only tepidly negative" and concluded that the school district presented insufficient facts to support a conclusion that the words would lead to substantial disruption under Tinker. Judge Hart (N.D. Ill.) eventually granted summary judgment to the plaintiffs, awarded each $25 in damages, and entered a permanent injunction. The permanent injunction is more expansive than the preliminary one in that it runs in favor of all students and includes not just shirts but also all clothing and personal items. The District appeals.

In their opinion, Judges Posner, Kanne, and Rovner affirmed. The Court first rejected the District's argument that injunctive relief was moot because Zamecnik had graduated and Nuxoll had finished his classes and was about to graduate. The Court noted that the injunction now runs in favor of all students, not just the named plaintiffs. Such an injunction is proper as long as the group is specified. The District then argued that it presented enough evidence to survive summary judgment. The Court considered the three types of evidence presented. The first was "negligible" -- an affidavit of a school official recounting statements by unidentified school officials themselves recounting statements by unidentified students purportedly identifying incidents of homosexual harassment. The second type was evidence of the harassment of Zamecnik. But statements that are otherwise permissible cannot be suppressed simply because they are met by violence or harassment by those who oppose the speaker's view. In addition, the harassment was not engendered by the T-shirt, but by the lawsuit. The third piece of evidence presented by the District was an expert report, of which the Court was particularly critical. The opinion section of the expert’s 38-page expert report consisted of 2 1/2 pages and, in the Court's view, failed to satisfy any of the Rule 702 requirements. In fact, the Court noted that his conclusion -- that the phrase at issue is "particularly insidious" in a public school setting -- "comes out of nowhere." The expert described no methodology or research and gave no indication that he is familiar at all with the school the plaintiffs attended. His opinions are nothing more than mere conclusions. The district court was correct in concluding that this evidence was insufficient to survive summary judgment. Finally, the Court affirmed the $25 damage awards as justified by the record.

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CAVOTO v. HAYES (February 28, 2011)

When Susan and Robert Cavoto were experiencing financial difficulties, they turned to Susan’s mother, Mary Hayes. Hayes allowed the couple to accumulate $30,000 in debt on her American Express credit card. Although the couple later separated, Cavoto told Hayes that he would repay her -- but he didn't. Hayes made unsuccessful attempts to recover the debt. So she took a bad debt deduction on her 2006 tax return and filed a 1099-C form, which identified the amount of the discharged debt and the debtor. The IRS notified Cavoto that he could be liable for additional taxes because of the discharged debt. Cavoto brought suit against Hayes under § 7434, which creates a cause of action against a person who "willfully files a fraudulent information return." Cavoto argued both that Hayes’ information return was fraudulent because the information was not accurate and because, even if the information was accurate, she was not required to file the form. Hayes counterclaimed for the $30,000. Judge Coar (N.D. Ill.) rejected the latter argument. Even if Hayes was not required to file the form, doing so accurately was not fraudulent. After a bench trial, the court found for Hayes on both the complaint and her counterclaim. Cavoto appeals.

In their opinion, Judges Bauer, Rovner, and Sykes affirmed -- but on different grounds. Section 7434 creates a cause of action for the filing of some, but not all, fraudulent information returns. The statute lists nine types of returns that are covered -- cancellation of indebtedness is not one of them. The court should have dismissed the complaint for failure to state a claim. With respect to the counterclaim, the Court found no clear error in the district court's decision.

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RABE v. UNITED AIR LINES (February 28, 2011)

United Air Lines hired Laurence Rabe as a flight attendant in 1993. Although United assigned her to fly out of Paris , she signed an employment agreement in Chicago. Pursuant to the terms of the agreement, she was to perform her work on United's aircraft, she was required to join the flight attendants' union in the United States, she agreed that her employment would be governed by United States law, and she agreed that only a United States court would have jurisdiction over any employment claim. Rabe transferred to Hong Kong in 1997. She was on leave between 2002 and 2005, when she returned to Hong Kong. She was fired in 2008 amid allegations that she had misused travel vouchers. Rabe brought suit pursuant to Title VII, the Age Discrimination and Employment Act, and the Illinois Human Rights Act. She alleged that the real reason for her termination was the fact that she was a lesbian. Judge Pallmeyer (N.D. Ill.) dismissed the complaint, concluding that she lacked subject matter jurisdiction because Rabe was a non-citizen working principally outside of the country. The court did not address United's argument that the claims were precluded or preempted by the Railway Labor Act. Rabe appeals.

In their opinion, Chief Judge Easterbrook and Judges Coffey and Hamilton reversed and remanded. The Court first corrected the nature of the issue. Although Title VII and ADEA generally do not protect non-citizens working outside the country, it is not because district courts lack subject matter jurisdiction. The Supreme Court, in Arbaugh, held that Title VII's minimum employee threshold is a merits question, not a jurisdictional one. That same analysis applies here. Therefore, the Court concluded that the district court should have treated United’s argument as a motion to dismiss for failure to state a claim. On that issue, the Court stated that whether Rabe was protected by the statutes was debatable. Her recent employment involved very few flights to or from the United States, but her earlier employment mostly involved United States flights. The Court also noted without deciding that the United States registration of the aircraft on which she worked might be enough to justify statutory protection. Ultimately, though, the Court concluded that United’s motion to dismiss should have been denied for other reasons. United elected to protect itself from the uncertainties associated with international employment by insisting, in the employment agreement, that Rabe's employment was to be governed by United States law. She agreed. Therefore, in addition to her colorable statutory claims, she has state law claims for breach of contract or promissory estoppel. She should have been allowed to proceed on those claims. The Court also decided to address the Railway Labor Act question, although the district court did not. It concluded that the claims were not precluded or preempted because they are not based on the collective bargaining agreement and will not require a construction of that agreement.

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HERNANDEZ v. COOK COUNTY SHERIFF'S OFFICE (February 24, 2011)

Several Cook County Jail inmates escaped in February of 2006. Jail authorities immediately suspected that the escapees had inside help. One guard admitted his involvement. Six additional guards came under suspicion. Internal and criminal investigations were conducted. Several of the guards were suspended with pay. The guards also claimed they were treated harshly during the investigation and discouraged from contacting the union or an attorney. Ultimately, one guard was suspended for five days and two left the department. Administrative charges were dropped against the other three. The six guards brought suit against the Sheriff's office alleging a violation of their First Amendment rights, and included state law intentional infliction of emotional distress and false imprisonment claims. They claimed that the investigation was in retaliation for their safety complaints (the plaintiffs allegedly complained about security and overcrowding problems in the jails) and political views (the head of their unit was running for Sheriff against the incumbent sheriff's Chief of Staff). The defendants moved to dismiss the constitutional claims on qualified immunity grounds and the state law claims on statutory immunity grounds. The court never ruled on that motion. The defendants later moved for summary judgment, but only briefly argued qualified immunity and did not argue statutory immunity in their opening brief. Judge Guzman (N.D. Ill.) a) granted summary judgment on the merits on the retaliation claim based on safety complaints, b) denied summary judgment on the retaliation claim based on political views, c) denied the request for qualified immunity, concluding that defendants had waived it, and d) denied summary judgment with respect to the state law claims. Defendants appeal only the denial of qualified immunity on the constitutional claims.

In their opinion, Judges Cudahy, Flaum, and Wood reversed and remanded. The Court noted that the denial of a motion for summary judgment is ordinarily not appealable. It is, however, when the requested grounds for summary judgment is qualified immunity and when the denial involves only legal issues. Since a finding of waiver is a legal issue, the Court has jurisdiction to entertain the appeal. The Court seemed to have little difficulty in concluding that the district court erred in finding waiver. Although an underdeveloped argument can amount to waiver, it does so only when it provides inadequate notice of the argument. Here, defendants have argued qualified immunity from the beginning of the case. They argued in their motion to dismiss, they argued unambiguously (albeit briefly) in their opening summary judgment brief in a section captioned "Qualified Immunity," and they argued it at length in their reply brief. Arguments raised for the first time in reply briefs are generally considered waived, but arguments more fully developed in reply briefs do not necessarily suffer the same fate. The plain fact is that plaintiffs were on notice of the argument and defendants treatment of it did not constitute a waiver. Finding no waiver, the Court addressed the merits of the argument. The familiar test has two prongs -- whether the defendants violated a constitutional right and, if so, whether that right was clearly established at the time. When the constitutional violation concerns a public employee's First Amendment rights, a court first must determine whether the speech involves a matter of public concern. If it does, the court applies a balancing test. If it does not, the employee is not entitled to constitutional protection. Based on the district court's findings on the safety complaint retaliation claims, the Court was able to determine as a matter of law that the speech did not involve a matter of public concern. The plaintiffs were acting in response to their duties as employees and are not entitled to constitutional protection. Therefore, there was no constitutional violation, and the defendants are entitled to qualified immunity. With respect to the political retaliation claim, however, the Court was unable to reach such a conclusion. The district court failed to identify the disputed and undisputed facts, nor did it make any findings regarding materiality. The Court remanded for that purpose.

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INTEGRATED GENOMICS v. GERNGROSS (February 24, 2011)

Integrated Genomics is in the business of mapping organisms' genomes and selling the data for commercial and noncommercial uses. In 2000, Tillman Gerngross, a Dartmouth College bioengineering professor, formed a private company to develop commercial uses for the genetic modification of yeast. In 2002, Gerngross sought to obtain a license to use data IG had developed regarding a species of yeast organism. The parties dispute whether Gerngross disclosed that he was seeking a license for commercial, rather than academic, purposes (the district court concluded that he had not). In any event, IG treated him as an academic customer. IG usually charges more to its commercial customers. Gerngross refused to sign IG's standard academic agreement, but did agree to some data publication restrictions. Merck acquired Gerngross’ company in 2006 for $400 million. IG accused Merck of using its data for commercial purposes. When Merck refused to compensate IG more generously, IG filed suit against Gerngross. It alleged that Gerngross fraudulently misrepresented his status when he acquired the license, breached an oral agreement to use the data for academic purposes only, and breach the written agreement that restricted publication. Judge Kennelly (N.D. Ill.) granted summary judgment to Gerngross on the oral contract claim (finding insufficient evidence of a contract), granted summary judgment to Gerngross on the written contract claim (concluding that internal data sharing was not publication), and entered judgment for Gerngross on the fraudulent misrepresentation claim after a bench trial (finding that Gerngross did not misrepresent the purpose of the data and that he had no duty to affirmatively volunteer its purpose, and concluding that IG failed to carry its burden that it would have made a difference). IG appeals the rulings with respect to the written agreement and fraudulent misrepresentation.

In their opinion, Judges Bauer, Rovner, and Hamilton affirmed. With respect to the written contract claim, the Court had to interpret Gerngross’ promise not to "publish" more than a certain amount of data per year. Applying state law, and particularly Illinois' rule to give contracts their plain meaning, the Court concluded that "publish" means disclosure to the public. Therefore, Gerngross’ sharing with Merck did not constitute a publication and was not a breach. With respect to the fraudulent misrepresentation claim, the Court concluded that there was sufficient evidence to support the district court's finding – and also sufficient evidence to support the finding urged by IG. The district court did not commit error in resolving the dispute as it did.

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COLE v. MILWAUKEE AREA TECHNICAL COLLEGE DISTRICT (February 24, 2011)

Milwaukee Area Technical College employed Darnell Cole as its president. His employment agreement, which ran through June of 2011, contained two termination provisions. Under one provision, the College could terminate his employment without cause by giving him 90 days notice and paying him all of this salary and vacation that he would have earned through the end of his contract term. Under another provision, the College could terminate his employment at the end of any month for performance or conduct "considered grounds for dismissal" by the College. In February of 2009, Cole was charged with driving under the influence of alcohol. In a February board meeting, the College decided to terminate Cole's employment effective February 28. Cole brought suit pursuant to § 1983 (the College is a creature of Wisconsin law), alleging a due process violation. Magistrate Judge Gorence (E.D. Wis.) granted the defendants' motion to dismiss. Cole appeals.

In their opinion, Circuit Judges Flaum and Wood and District Judge McCuskey affirmed. The threshold question in any due process case, stated the Court, relates to the existence of a property interest. If Cole has a property interest, it must come from his employment agreement and state law. Under Wisconsin law, due process attaches only when the employment agreement requires a "cause" for termination. The Court concluded that Cole’s employment agreement fell somewhere between an at-will employment agreement and a "cause" employment agreement. Although the College needed some reason to terminate Cole's employment without notice and without severance, their discretion to do so was not meaningfully restricted. The Court therefore concluded that Cole did not have a constitutionally protected property interest.

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REGEN CAPITAL I, INC. v. UAL CORP. (February 18, 2011)

AT&T Corp. was a creditor in United Air Lines’ bankruptcy, with a $4.9 million claim arising from defaulted telecommunications contracts. AT&T assigned the United claims to ReGen Capital I, a firm that purchases discounted claims against debtors. Under bankruptcy law, United would have to cure any default if it wanted to assume these executory contracts. In United's proposed reorganization plan, it listed the AT&T contracts on in "Assumed Executory Contracts" exhibit. The plan also allowed United to reject an executory contract within 15 days after the parties or the court established the cure amount. The bankruptcy court confirmed the plan. United treated the ReGen claim as a general unsecured claim and paid $626,000. ReGen submitted a cure claim, based on United’s inclusion of the contracts on its exhibit. United objected and also filed its notice of intent to reject the contracts. The bankruptcy court found for United on alternate grounds: that ReGen's rights to the claims did not include a cure right and that United properly rejected the contracts. Judge Darrah (N.D. Ill.) agreed. ReGen appeals.

In their opinion, Judges Kanne, Tinder, and Hamilton affirmed. The Court disagreed with the lower courts’ interpretation of ReGen’s rights under the AT&T assignment. The agreement between AT&T and ReGen assigned AT&T's pre-petition unsecured claims and "any actions, claims, lawsuits or rights of any nature" that arise out of those claims. That definition, the Court concluded, was broad enough to include the unsecured claims and any cure claims connected with them. The Court agreed with the lower courts, however, on their alternate basis for holding in United’s favor. The Court emphasized that its review was limited. When a bankruptcy court interprets a reorganization plan that it earlier approved, it is entitled to full deference. Here, the plan specifically gave United the right to reject an executory contract up to 15 days after the cure amount was established. That 15 day period never even started running. United's inclusion of the contracts on its exhibit and the court's approval of that exhibit as part of its plan amounted only to the court's approval of United's ability to assume the contracts. Neither the listing of the contracts nor the approval of the plan constituted an assumption of the contracts themselves. In fact, the contracts could not be assumed until there was a cure. The bankruptcy court did not abuse its discretion in concluding that United properly rejected the executory contracts.

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COMRIE v. IPSCO, INC. (February 18, 2011)

Ipsco, Inc. had an unfunded, supplemental pension plan for its top executives. The plan had a golden parachute provision under which an executive was eligible for benefits if he left the company's employ within two years of a change of control. John Comrie was an executive covered by the plan. He resigned shortly after Ipsco was acquired by a Swedish company. Under the plan, Comrie was entitled to 54% of his average annual compensation over the last five years of his employment. The plan specifically excludes a "bonus" from compensation. Comrie computed his benefits by excluding only that compensation that was specifically designated as a "bonus." The company, through the committee that administered the plan, computed his benefits by excluding all compensation that was linked to stock, even if it was not designated as a "bonus." Judge Darrah (N.D. Ill.) granted summary judgment to the defendants. He applied an arbitrary and capricious standard because the plan granted the committee interpretive discretion. Comrie appeals.

In their opinion, Chief Judge Easterbrook and Judges Cudahy and Rovner affirmed. The Court agreed with the district court's deferential review. It rejected Comrie's argument that the committee had a conflict of interest. And it concluded, relying on Firestone, that a contract conferring interpretive discretion on an  administrator, whether or not an ERISA fiduciary, must be honored. In so holding, the Court criticized the Third (Goldstein) and Eighth (Craig) Circuits. Applying the deferential standard, the Court concluded that the committee's decision was not arbitrary or capricious. Although it found nothing in the plan's language or other relevant evidence that answer the question definitively, the Court applied a common "business world" understanding of the term. The amount of Comrie's stock-linked income varied from year to year and was discretionary -- that sounded enough like a bonus to the Court to support the committee’s decision.

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LOUDERMILK v. BEST PALLET CO. (February 18, 2011)

Kevin Loudermilk, an African-American male, worked as a laborer at the Best Pallet Co. He came to believe that the company treated its Hispanic employees more favorably. He claims that he complained without success. He even talked about filing an EEOC charge. One day, he took some pictures of his work area. A supervisor, Dan Lyons, directed him to stop. Loudermilk again voiced his concerns about the discriminatory work environment. Lyons told him to put it in writing. When Loudermilk handed Lyons his written complaint the next day, Lyons immediately fired him. Loudermilk brought suit under Title VII, alleging that Best Pallet fired him for opposing its discriminatory practices. Judge Reinhard (N.D. Ill.) granted summary judgment to Best Pallet. He concluded that Loudermilk's only evidence, the timing of his discharge vis-à-vis the written complaint, was insufficient to establish causation. Loudermilk appeals.

In their opinion, Chief Judge Easterbrook and Judges Wood and Evans reversed and remanded. The Court rejected the district court's conclusion for several reasons. First, the court did not look at the evidence in the light most favorable to Loudermilk. Second, the several different reasons the company put forth for its actions (it told the EEOC that Loudermilk was let go as part of a reduction in force, it first told the court that Loudermilk resigned, and it later told the court that he was fired for taking pictures) could support an inference of pretext. Third, the Court rejected the notion that timing, by itself, can never support an inference of causation. It depends on the context. Here, the termination came immediately after a protected act. The Court concluded that the context could support a causation inference.

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BALTAZAR v. WARDEN (February 18, 2011)

Advanced Healthcare Associates hired chiropractor Kelly Baltazar in 2007. Within a very short period of time, Baltazar concluded that the AHA staff regularly submitted inflated bills to the federal government. Baltazar resigned and filed suit under the False Claims Act. Judge Norgle (N.D. Ill.) dismissed the suit on the ground that the allegations were based on already public disclosures. The court based its conclusion on several federal government reports that established "prevalent fraud" by chiropractors. Baltazar appeals.

In their opinion, Chief Judge Easterbrook and Judges Kanne and Wood reversed and remanded. The Court conceded that there had been numerous allegations of fraud with respect to chiropractors. In fact, the report relied upon by the district court concluded that over half of the claims reviewed for that particular study were inflated. But Baltazar's allegations were not based on the study or the report. They were based on her personal knowledge of the practices of AHA. In concluding that Baltazar could proceed with her suit, the Court noted that no appellate court has held that a report of widespread fraud in a particular industry forecloses a False Claims Act suit against every member of the industry.

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POLZIN v. GAGE (February 18, 2011)

Gerald Polzin pleaded guilty in 2005 to sexual abuse of two teenage boys. In connection with his presentence investigation, Polzin claimed he was himself a victim of sexual abuse as a boy at the hands of his uncle, an Appleton, Wisconsin police officer. The prosecutor asked the Wisconsin Department of Justice to investigate. The Appleton Police Department declined to conduct its own investigation. Although the prosecutor expressed doubts about the allegations, the trial judge considered it a mitigating factor in Polzin's sentence. Polzin a) filed a state civil suit against Appleton and several police officers which was resolved against him and affirmed on appeal, b) took an appeal from his sentence which was also affirmed on appeal, c) brought a state motion for postconviction relief, and d) brought a § 1983 suit against the prosecutor, the trial judge, the court reporter and the state investigators. In the § 1983 case, he alleged the falsification of evidence and the fabrication of the sentencing transcript. His motion for postconviction relief was pending when he filed his § 1983 claim. He asked the district court to stay the case because of the Supreme Court’s holding in Heck that a § 1983 challenge to a conviction cannot be made unless the conviction has been invalidated. Judge Griesbach (E.D. Wis.) denied the request for a stay, concluding that Polzin was not faced with a statute of limitations problem like Wallace. His claims were akin to malicious prosecution, which do not accrue until the prosecution terminates in his favor. The court therefore dismissed the complaint as barred by Heck. On a motion for reconsideration, however, the court added that Polzin also failed to state a claim on the merits. Specifically, the court ruled that the claims against the court reporter and trial court judge were frivolous in that neither had a role in the investigation and that his claims regarding the investigation did not amount to a constitutional violation. Polzin appeals.

In their opinion, Judges Coffey, Flaum, and Ripple affirmed in part and vacated and remanded in part. The Court held (for the first time) that a district court can ignore the Heck doctrine and proceed to the merits since Heck is not jurisdictional. On the merits, the Court concluded that a) the judge had absolute immunity with respect to the claims of falsifying the transcript, b) the court reporter is not liable because the transcript attached to the complaint showed that Polzin's allegations about the transcript were actually wrong, and c) the prosecutor is entitled to absolute immunity either as a prosecutor or as a witness at the sentencing hearing. Finally, the Court did point out that the district court did not specifically address Polzin's claims against the prosecutor and state investigators in their investigatory role. It remanded for further explanation or consideration of that claim.

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WHITELY v. MORAVEC (February 16, 2011)

Waste Reduction, Inc. laid off several workers at its Indiana facilities in 2006 and filed for bankruptcy. It paid the workers' wage claims through the bankruptcy proceedings but had insufficient assets to satisfy the statutory penalty claims. Former employees filed suit against the company's ten largest shareholders pursuant to New York (where Waste Reduction was incorporated) law imposing employer liability on shareholders in some circumstances. Then-Judge Hamilton (S.D. Ind.) concluded that the defendants were entitled to judgment but kept the case open until the bankruptcy court resolved the wage claims. Once no wage claims existed, the court entered judgment. The plaintiffs appeal.

In their opinion, Chief Judge Easterbrook and Judges Posner and Rovner affirmed. The Court first rejected the plaintiffs' argument that the district court abused its discretion in not remanding the case to state court once it decided the federal ERISA issues. On removal, a federal court has discretion to resolve both the federal and state issues, which is what the court did here. The Court turned to the merits. Under New York law, the ten largest shareholders of privately held companies are jointly and severally liable for "debts, wages or salaries . . . for services performed." The Court seemed to hold that the plaintiffs could not cobble together both the Indiana late wage penalty statute and the New York investor liability statute to create a hybrid statute (likening it to a jackalope or griffin). It decided the case on narrower grounds, however. The New York statute only imposes liability for debts "for services performed." The Indiana statutory penalty is not a debt "for services."

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KELLEY v. CHICAGO PARK DISTRICT (February 15, 2011)

In 1984, the Chicago Park District gave Chapman Kelley a permit to install a large wildflower display in Chicago’s Grant Park. Kelley was a nationally known painter at the time, known principally for landscapes and floral scenes. He had already, on two occasions, transferred his creativity from the canvas to the ground. The Chicago project covered 1.5 acres and consisted of 48-60 different species of wildflowers. The flowers were placed such that they bloomed at different times, changed colors throughout the season, and increased in brightness toward the center of the project. The project was a huge success. Kelley (and volunteers) continued to maintain the project until 2004, when the Park District reduced the project to less than half of its original size and made other changes. Kelley brought suit against the Park District under the Visual Artists Rights Act of 1990 ("VARA"). He also brought a breach of contract action based on a Park Commissioner's oral promise that the project could continue. After a bench trial, Judge Coar (N.D. Ill.) entered judgment for the Park District on the VARA claim. He concluded that the project qualified as a work of visual art but was insufficiently original under copyright law to merit the protection of VARA. Alternately, he concluded that VARA did not apply because the project was site-specific art. The court entered judgment for Kelley on the contract claim, but awarded damages of only one dollar. Kelley appeals. The Park District cross-appeals.

In their opinion, Judges Manion, Sykes, and Tinder affirmed in part and reversed and remanded in part. The court explained some of the background and history of VARA, dating back to 19th-century France, the European notion of artists' moral rights, the 1886 Berne Convention, and the 1988 Senate ratification of the treaty. After the treaty's ratification, Congress amended the copyright act with VARA. It provided artists with a limited set of moral rights, including the right to prevent modification of one's work. In order to be protected by VARA, however, a work must be “a painting, drawing, print or sculpture.” In addition, the statute explicitly excludes any work not subject to copyright protection. The statute also excludes from protection the modification of a work which is a “public presentation.” The Court discussed at some length but did not decide the public presentation issue (because it decided the case on other grounds) and the painting or sculpture issue (because the Park District did not challenge the district court's conclusion). Instead, it resolved the statutory issue on copyright grounds. In order to qualify for copyright protection, a work must have a human author and must possess fixation (that is, be reduced to tangible form). The Court found both of these elements missing in the wildflower project. It concluded that a wildflower garden is not authored – it is cultivated. It is also not stable enough to be fixed. In fact, its very essence is one of change and growth. Since the work is not subject to copyright protection, is not entitled to protection under VARA. They Court also briefly addressed the contract claim. Relying on the Chicago Park District Act and the Illinois Park District Code, the Court concluded that a single Park District Commissioner had no authority to bind the District. Therefore, the oral "contract" relied upon by Kelly is invalid.

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RIGHI v. SMC CORPORATION (February 14, 2011)

SMC Corporation employed Robert Righi as a sales representative from 2004 until 2006. Righi worked out of his home in Henry, Illinois, where he lived with a roommate and his ailing mother. His principal methods of communicating with his sales manager was his cell phone and e-mail. Righi was attending a training session in Indianapolis on July 11, 2006 when he received a call that his mother was in a coma. He immediately returned home. Although he advised a colleague of his plans and asked the colleague to inform others, he did not inform his sales manager of the situation until the next morning. In fact, he turned his cell phone off and missed several calls from his sales manager on July 11. He sent his sales manager an e-mail on the morning of July 12. He stated that he needed "the next couple days off" to care for his mother, that he had vacation time, or that "I could apply for the family care act, which I do not want to do at this time." Over the next several days, Righi's sales manager attempted to reach him by phone multiple times. Righi did not answer or return the calls. His roommate finally answered one of the calls and took a message that the sales manager needed to speak with Righi as soon as possible. Righi finally called his sales manager -- after nine days of silence. SMC terminated Righi's employment the next day for violating its leave policy. The leave policy required prior approval for a leave and provided that two days absence without notification was grounds for termination. Righi brought suit against SMC pursuant to the Family and Medical Leave Act, alleging that SMC interfered with his statutory rights. Judge McDade (C.D. Ill.) granted summary judgment to SMC on two grounds: that Righi was not entitled to FMLA protection because he stated in his e-mail that he did not want it, and that he was not entitled to FMLA protection because he did not comply with the Act's regulations requiring notification of a return date. Righi appeals.

In their opinion, Judges Flaum, Wood, and Sykes affirmed. In order to be entitled to protection under the FMLA, employee must notify his or her employer of a desire to take leave and of a projected return date. With respect to the former, the Court disagreed with the district court's conclusion. Very little is required of an employee to trigger the FMLA protection. Putting an employer on notice of a basis for leave is sufficient. An employee can waive FMLA protection, but only by a clear expression of intent to do so. The Court concluded that Righi met the notice requirements with his July 12 e-mail. It mentioned the “family care act” and left open, at least, the possibility that he could choose to use it. The Court also concluded that his expressed desire not to use it was not a clear expression of a waiver. The Court agreed with the district court, however, with respect to its alternate grounds for summary judgment. Righi was obligated under the FMLA and its regulations to keep SMC informed of his anticipated return date. The regulations require him to provide that information within two working days. Here, Righi never provided that notice and, in fact, ignored all of SMC's attempts to obtain additional information. He is not entitled to the FMLA's protection.

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KARTMAN v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY (February 14, 2011)

In early 2006, a severe hailstorm hit the Indianapolis, Indiana area, causing extensive property damage. Almost 50,000 area residents filed insurance claims under homeowners insurance policies with State Farm Fire and Casualty Company. State Farm adjusted and paid over $263 million on hose claims. The following year, however, several State Farm policyholders filed suit for breach of contract, bad faith denial of benefits, and unjust enrichment. The suit was brought as a class action and alleged that State Farm underpaid claims and failed to use a uniform standard for evaluating the hail damage. The class sought damages and an injunction ordering State Farm to reinspect the roofs under a uniform standard. Judge Lawrence (S.D. Ind.) refused to certify a Rule 23(b)(3) damages class because of the need for individual underpayment determinations. He did certify, however, a Rule 23(b)(2) class to address whether the class was entitled to an injunction requiring the uniform reinspections. State Farm sought interlocutory review of the certification order.

In their opinion, Judges Cudahy, Wood, and Sykes granted the petition of review, reversed, and remanded with instructions to decertify the class. The Court’s problem with the district court's approach was a basic one – what are the claims? An insurance policy is a contract. For its part, the insurer agrees to pay for covered losses. It does not agree to use a particular standard in evaluating any alleged damage. An insurance policy also implicates tort law as a result of the bad faith denial of benefits claim. But again, tort law does not consider the failure to use a uniform standard a breach of a duty of good faith. Neither contract law nor tort law imposed a separate duty on State Farm to use a particular method to evaluate an insured's loss. The district court’s treatment of the uniform standard claim as a separate claim was error. Having clarified the claims, the Court turned to Rule 23. Rule 23(b)(2) requires that class-wide injunctive relief be both appropriate with respect to the class as a whole and final. The Court found both requirements absent here. First, with respect to appropriate, the Court noted that the class could not even satisfy the most basic of equitable relief requirements -- irreparable harm. Whatever their loss, it can be adequately satisfied with damages. The balance of hardships is also inequitable. The cost of compliance would be enormous, with little benefit. The Court also found that the injunction would be an administrative challenge and impractical. Second, the injunction did not meet the Rule 23 finality requirement. The plaintiffs are not seeking uniform roof inspections as their final remedy. Even in their view, the inspections are merely stepping stones to further proceedings on liability. The injunction does not meet the Rule 23(b)(2) requirements -- the class should not have been certified.

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DELAPAZ v. RICHARDSON (February 14, 2011)

Pablo Delapaz and Michael Sarkauskas are both employees of the City of Chicago's Department of Streets and Sanitation (DSS). They are also both supporters of the Hispanic Democratic Organization. In 2001 in 2002, DSS Commissioner Al Sánchez appointed both men to temporary acting foremen positions in the Department. Michael Picardi replaced Sanchez as Commissioner several years later. Delapaz and Sarkauskas still occupied their temporary positions. Shortly after Picardi became Commissioner, he ordered the elimination of all acting foreman positions and the return of those employees to their prior positions. When Deputy Commissioner Richardson advised Delapaz that he would have to return to his prior position, he also remarked: "Your guy is gone." Both Delapaz and Sarkauskas assumed their prior positions in the summer of 2005, as did all the other acting foremen. Later that year, the Richardson appointed another man as an acting Foreman for snow removal purposes. That man was a contributor and volunteer for Chicago Alderman Richard Mell. Delapaz and Sarkauskas filed suit against Deputy Commissioner Richardson under § 1983, alleging that he violated their First Amendment rights of free association by demoting them because of their HDO affiliation. Judge Marovich (N.D. Ill.) granted summary judgment to Richardson. Delapaz and Sarkauskas appeal.

In their opinion, Circuit Judges Flaum and Evans and District Judge McCuskey affirmed. The Court agreed that a public employee’s firing or demotion because of his or her political affiliation is a First Amendment violation. But to state a claim against a particular defendant, a plaintiff must establish that the defendant participated or caused the deprivation. In their summary judgment response pursuant to local rule, plaintiffs admitted that Picardi ordered the demotions, not Richardson. Courts are entitled to rely on these admissions. In light of the admission, the plaintiffs cannot establish Richardson's liability. The Court did cite another reason why they could not prevail: they waived the Richardson liability argument by not addressing it in their response brief in the district court. And the Court cited yet a third reason why they could not prevail: the merits. The only evidence the plaintiffs presented that Richardson even knew of their HDO affiliation is the "your guy" remark he made to Delapaz, an apparent reference to Sanchez. But they presented no evidence that Sanchez was even affiliated with HDO or, if he was, that Richardson knew about it. And they presented no evidence at all that Richardson knew of Sarkauskas’ HDO affiliation -- only that the timing of his demotion (two weeks after Delapaz) was suspicious. Without a triable issue of fact on whether he knew of their party affiliation, Richardson is entitled to summary judgment.

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MUCHA v. VILLAGE OF OAK BROOK (February 14, 2011)

Randy Mucha was an Oak Brook, Illinois police officer. He began an internal investigation into potential police officer misconduct in 2004. He discovered that officers were frequently parked near the residence of Frances Gaik, a local woman who had organized a group that was critical of the Oak Brook Police Department. After he became suspicious that she had an internal Department phone list, he began investigating her. He infiltrated her group under a false identity and ran a criminal background check on her through the Law Enforcement Agencies Data System. Gaik discovered the background check only after she subpoenaed the Illinois State Police more than a year later. Police Chief Thomas Sheahan obtained a warrant and arrested Mucha, charging him with unlawfully requesting a background check. After the charges were dismissed, Mucha filed a § 1983 false arrest claim against the Village. Judge Hart (N.D. Ill.) granted summary judgment to the Village. Mucha appeals.

In their opinion, Judges Bauer, Wood, and Sykes affirmed. In order for Mucha to prevail, the Court noted he had the burden to prove that he was arrested without probable cause. Probable cause exists if the facts and circumstances known at the time support a belief by a prudent person that a crime has been committed. Here, Sheahan knew at the time of the arrest that Mucha did not approve of Gaik’s group and that he spied on her and the group, infiltrated their meetings, ran Internet searches, and did in fact run a criminal background check when Gaik was not the subject of any legitimate investigation. Given that knowledge, in the absence of any knowledge supporting a conclusion that the background check was legitimate, the Court concluded that probable cause existed. The existence of probable cause is also not affected by any improper motive on the part of Sheahan.

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SOW v. FORTVILLE POLICE DEPARTMENT (February 11, 2011)

Mouhamadou Sow, a Senegal native, traveled all over the United States selling African items at fairs and festivals. In November 2007, Sow tried to cash a $1000 money order at the Fortville, Indiana Post Office. He had purchased the money order at a United States Post Office in Columbus, Ohio. The postal clerk suspected that the money order was counterfeit and told Sow as much. After conferring with her supervisor, she told Sow that she did not have enough money to cash the money order and directed him to the nearby McCordsville Post Office. Once Sow left, a postal employee reported the suspected forgery incident to the Fortville police. The Fortville police notified the McCordsville police, who stopped Sow before he reached the post office. Fortville Officer Michael Fuller arrived at the scene. The police interrogated Sow for over an hour. Sow produced the money order but was unable to produce a receipt. He did produce other receipts and money orders. Both officers examined the money order and also believed that it was counterfeit. They called post office headquarters and a local postal inspector and described the money order and its serial numbers. Both postal employees told the officers that the money order was counterfeit. The officers did not call the Columbus Post Office where Sow told them he purchased the money order, even though they had its phone number. The police arrested Smith. The charges were ultimately dismissed. Smith brought suit under §§ 1983, 1985, and 1986 against the Fortville postal employees, the two police departments, and Officer Fuller. He alleged that he was unlawfully arrested, that he was physically mistreated, and that his handcuffs were too tight. Judge Young (S.D. Ind.) dismissed the postal employees and granted summary judgment to the police departments and Fuller. Sow appeals.

In their opinion, Circuit Judges Flaum and Evans and District Judge McCuskey affirmed. The Court first affirmed the dismissal of the two police departments. Section 1983 liability for local governments depends on state law. Indiana law does not allow municipal police departments to sue or be sued. Next, the Court rejected Sow's argument that the statements made to Fuller by the postal employees were inadmissible hearsay. Since the statements were offered not for their truth but because they constituted part of the facts and circumstances known to Fuller when he decided to arrest Sow, they were properly admitted. Third, the Court addressed Sow's unlawful arrest claim. That claim rests on the existence of probable cause. Here, although Fuller did not call the post office where Sow claimed to have purchased the money order, he received information from several third parties that supported the conclusion that the money order was a forgery. He had no reason to believe that the information he received was anything but truthful. Based on that information, the Court concluded that a reasonable person would believe that a crime had been committed -- probable cause therefore existed. Finally, the Court affirmed with respect to the racial profiling, excessive force, and conspiracy allegations.

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TINSLEY v. INTEGRITY FINANCIAL PARTNERS (February 11, 2011)

Integrity Financial Partners (IFP) is a debt collector and was trying to collect a debt from Christopher Tinsley. Tinsley retained a lawyer and had the lawyer send a letter to IFP advising them that Tinsley refused to pay the debt and had no assets. The lawyer further requested that all collection efforts cease and advised IFP to "direct all future communications to our office." When IFP called the lawyer and requested payment, Kinsley filed suit under the Fair Debt Collection Practices Act. Chief Judge Holderman (N.D. Ill.) granted summary judgment to the defendants. Tinsley appeals.

In their opinion, Chief Judge Easterbrook and Judges Manion and Hamilton affirmed. The Court began with § 1692(c)(c) of the Act. That section prohibits any communication by a debt collector with the “consumer" when it is advised that the consumer refuses to pay the debt or asks for no further communication on the debt. Tinsley argues that the prohibition on communicating with the consumer applies equally to communicating with the consumers attorney, his agent. Tinsley relies on the section of the Act that defines "communication" as conveying information directly or indirectly. Surely, he argues, communication with one’s lawyer is an indirect communication to the client. The Court noted that Tinsley's argument had been accepted by at least one district court and had apparently not been considered at the appellate court level. Although expressing some attraction to the argument at a superficial level, the Court reconsidered after it put the section in context. For example, subsections (a) and (b) of the Act are written in such a way that they would make no sense if a consumer and his lawyer were interchangeable. Furthermore, the Court noted that it is unlikely that Congress intended to prohibit all communication with a consumer’s lawyer. Finally, the Act’s definition of consumer does not include lawyer. Taking the Act as a whole, together with its purposes, the Court concluded that IFP's communication with Tinsley's lawyer was not prohibited by the Act.

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MILLER v. DOBIER (February 11, 2011)

Dale Miller is confined pursuant to the Sexually Violent Persons Commitment Act. While confined, he was disciplined on two separate occasions in 2007 and 2008. In 2007, he was accused of threatening a deputy sheriff. A disciplinary committee found him guilty of those charges and reduced his status within the institution. As a result, he lost certain privileges; including longer visitation, later access to the day room, and access to electronic equipment. In 2008, he was accused of damaging furniture, breaking a window, and threatening staff. Again, a disciplinary committee upheld the charges in a hearing. Miller was placed in "close" status for a month. His punishment again included lost privileges. He had an earlier curfew, no yard privileges, shorter visits, no access to special events, and no use of the library or exercise room. Miller brought suit against institution officials pursuant to § 1983 claiming a denial of procedural due process. Judge Baker (C.D. Ill.) granted summary judgment to the defendants. Miller appeals.

In their opinion, Chief Judge Easterbrook and Judges Posner and Wood affirmed. The Court never addressed Miller’s evidence of procedural deficiencies. Instead, it concluded that the due process clause was not even implicated. There is no constitutional due process requirement unless there is a deprivation of liberty or property. When a lawfully committed person is subjected to discipline, the due process clause is not implicated unless the institution substantially worsens the conditions of his confinement. Here, even while Miller was in "close" status, he had much freedom. The reduction in his status does not amount to a deprivation of a liberty interest.

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HURST v. HANTKE (February 10, 2011)

Joseph Hurst suffered a stroke while incarcerated in an Illinois prison. More than eight months later, he filed a grievance complaining of his treatment by the prison’s medical staff. The prison denied the grievance on the grounds that it was not filed within 60 days, as required by law. Hurst appealed the denial, contending that the stroke left him almost totally incapacitated "until just recently." The prison rejected his appeal on the ground that Hurst provided no justification. Hurst brought suit pursuant to § 1983 alleging deliberate indifference on the part of the prison’s medical staff. Judge Kapala (N.D. Ill.) granted summary judgment for the defendants on the ground that Hurst had failed to exhaust his internal prison remedies. Hurst appeals.

In their opinion, Judges Posner, Evans, and Hamilton affirmed. The Court concluded that the prison was wrong in denying Hurst's appeal. The law does not require an inmate to submit evidence in support of a claim of good cause any more than a plaintiff is required to submit evidence with a complaint. The prison could have insisted on additional substantiation, in which case Hurst would have had to supply it. Notwithstanding the error at the internal prison level, the Court nevertheless affirmed. Because when he sued, and when the defendants moved for summary judgment, Hurst was required to present evidence that he exhausted his administrative remedies -- that is, that he had filed a grievance as soon as he was reasonably able. He had an opportunity -- and an obligation -- at that stage to substantiate his good cause claim. Because he did not, summary judgment for defendants was appropriate.

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BUSSON-SOKOLIK v. MILWAUKEE SCHOOL OF ENGINEERING (February 10, 2011)

Dustin Busson-Sokolik attended the Milwaukee School of Engineering. In 1999, he signed a promissory note with the school in the amount of $3000. In the note, he promised to repay the money and to pay all reasonable collection costs. The School sued Busson-Sokolik in 2005 to recover the unpaid amount and obtained a default judgment of almost $6000. Busson-Sokolik filed for bankruptcy shortly thereafter. An adversary proceeding in the bankruptcy court determined that the debt was non-dischargeable. The School obtained a judgment of over $16,000 that included costs and fees. Busson-Sokolik appealed the decision to the district court, where the proceedings became rather contentious. Busson-Sokolik accused the School of false statements. The School moved to strike a portion of Busson-Sokolik's reply brief because it raised arguments not raised in the bankruptcy court or in his opening brief. Chief Judge Clevert (E.D. Wis.) denied Busson-Sokolik's motion for sanctions, granted the School's motion to strike portions of the brief and motion for costs and fees, and affirmed the bankruptcy court's judgment on the merits. He awarded over $80,000. Busson-Sokolik and his attorney appeal.

In their opinion Judges Power, Flaum, and Hamilton affirmed in all respects except that it reduced the sanction portion of the award by half. The Court noted that bankruptcy proceedings generally discharge all of a debtor's financial obligations. There are exceptions, however. One exception is for an educational loan under § 523(a)(8)(A). The Court rejected Smith's argument that the $3000 was not a loan. In order for there to be a loan, there must be a) a contract, b) the transfer of money, and c) a promise to repay the money at a later date. Those three elements are all present here. The Court also rejected Smith's argument that the loan was not educational. The Court acknowledged that some courts apply a "use" test while others apply a "purpose" test. It adopted the "purpose" test as being more consistent with the statutory language in the broader statutory goals. Here, the purpose test was satisfied because Smith was a student, he had to be a student to qualify for the loan, the money was deposited into his student account, and the loan was part of a total financial assistance package. The purpose of the loan was educational and the district court was correct in concluding that the loan was not discharged. The Court also affirmed the award of fees and costs. Although fees and costs are normally not awarded in American litigation, they are where there is a statute or a contract, unless otherwise prohibited. The promissory note contained Busson-Sokolik’s promise to pay these costs. That promise is enforceable. The Court did not consider Busson-Sokolik's arguments that fees and costs were improper under the merger doctrine. Smith did not raise that argument in either the bankruptcy court or in his initial district court brief. Thus, he has waived it twice and no exceptional circumstances exist that would compel the Court to overlook the waivers. The Court found no error in the denial of Busson-Sokolik's motion for sanctions, in that he failed to honor the safe harbor provision of Rule 9011. The Court also found ample evidence in support of the district court’s award of sanctions against Busson-Sokolik and his attorney. They ignored deadlines, filed baseless pleadings, ignored procedural requirements, and made duplicative filings. But they did not necessarily act in bad faith and the appeal was not necessarily frivolous. The merits of the merger argument was never considered because of waiver and it does have some basis in law. In light of all that and also considering Busson-Sokolik’s status as a student who has filed for bankruptcy, the Court exercised its discretion to reduce the sanctions by half.
 

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HUGHES v. UNITED AIR LINES (February 8, 2011)

United Airlines and its flight attendant union agreed that flight attendants retain seniority for only three years while on medical leave. When Constance Hughes' three-year deadline was near, United asked her to return to work. She received medical clearance and completed her requalification training. Unfortunately, a few days before her first assigned flight, she fell and injured herself so severely that she could not perform her duties. United terminated her employment. Hughes brought suit in Illinois state court, alleging that her discharge was in retaliation for filing a workers' compensation claim. Notwithstanding the complaint’s state law basis, United removed to federal court on federal question grounds. It contended that the Railway Labor Act completely preempts the field. Judge Bucklo (N.D. Ill.) agreed, based on the Seventh Circuit’s Graf decision, denied the motion to remand, and dismissed the complaint. Hughes appeals.

In their opinion, Chief Judge Easterbrook and Judges Cudahy and Posner vacated and remanded with instructions to remand to Illinois state court. The Court first distinguished between the "misleadingly named" doctrine of complete preemption and ordinary preemption. Ordinary preemption is an affirmative defense that must be raised in the court where the litigation was filed. Complete preemption, on the other hand, is not a defense. It is a theory under which federal law so controls a field that a state law claim is not possible. The Court turned to its own and the Supreme Court's jurisprudence on the issue. In Graf, the Court held that a retaliatory discharge case like Hughes' against an employer covered by the Railway Labor Act was completely preempted. It extended that principle to other employers the following year in Lingle. The Supreme Court reversed the Lingle decision, however, holding that a retaliatory discharge claim is preempted only if it requires construction of a collective bargaining agreement. The Supreme Court then extended that principle to a Railway Labor Act employer in Hawaiian Airlines. The Court concluded that Lingle and Hawaiian Airlines controlled and that Graf had to be overruled. Without diversity of citizenship, the case must be remanded to the state court. That is the appropriate forum for United to raise its claim of ordinary preemption on the ground that Hughes' claim requires interpretation and construction of the collective bargaining agreement.

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SCHANDELMEIER-BARTELS v. CHICAGO PARK DISTRICT (February 8, 2011)

Cathleen Schandelmeier-Bartels, a Caucasian, began working for the Chicago Park District in early 2006. She reported to Andrea Adams (an African-American) who reported to Alonzo Williams (an African-American) who reported to Megan McDonald (a Caucasian). [Taking the facts in a light most favorable to Smith] During the summer of 2006, Schandelmeier-Bartels was supervising summer camp. One day, she heard what she thought was the sound of flesh being struck and a child's screams. Upon investigation, she came upon a young African-American child who had been suspended from summer camp. The child's aunt was kneeling over him with her arm raised and a belt in her hand. The child was crying and had visible welts on his arm. When Schandelmeier-Bartels told the aunt to stop, the aunt and the child left. Schandelmeier-Bartels reported the incident to Adams. Adams stated that what happened was acceptable discipline in their culture. Schandelmeier-Bartels reported the incident to the Illinois Department of Children and Family Services and, on their advice, to the police. The next morning, Adams, in the company of the child's aunt, confronted Schandelmeier-Bartels. Adams screamed at her, criticized her for sending the police to the aunt’s house, repeated her statement about the acceptability of that type of discipline in her culture, and ordered Schandelmeier-Bartels out of her office. Adams immediately sent a memo to McDonald complaining of Schandelmeier-Bartels’ poor performance. She recounted several examples, including failure to supervise, failure to report an emergency, and poorly written incident reports. The last example she gave was the incident with the young child. The Park District fired Schandelmeier-Bartels by the end of the day. Schandelmeier-Bartels filed suit for race discrimination under Title VII. A jury awarded her $200,000 in compensatory damages. Judge Coar (N.D. Ill.) granted the Park District’s motion for judgment as a matter of law. He concluded that Adams' racial animus did not affect the termination decision. Schandelmeier-Bartels appeals. The Park District cross-appealed the court's conditional denial of its motion for a new trial (although the Court pointed out that the cross-appeal was unnecessary).

In their opinion, Judges Manion, Williams, and Hamilton affirmed in part and reversed in part. The Court first addressed Schandelmeier-Bartels’ appeal. It noted that the case was based on a "cat's paw" theory. There was evidence of a racial animus on the part of Schandelmeier-Bartels’ supervisor but not on the part of the decision-maker. The Court noted the lack of consistency in recent cases regarding what is necessary to bridge that causal gap. Is evidence that the biased employee exerted "singular influence" over the decision-maker required or will something less suffice? The Court concluded that it need not resolve that issue since it found that a reasonable jury could have found for Schandelmeier-Bartels even under the more stringent test. Viewing the evidence in a light most favorable to Schandelmeier-Bartels, the jury could have found that Adams' input was decisive and that neither McDonald nor the human resources representative conducted an independent investigation. The Court thus reinstated the jury's verdict on liability. It turned to the Park District’s motion for a new trial. First, it rejected the argument that the district court should have modified a jury instruction in response to a jury question during deliberations. The objection came too late in the proceedings and, given the entirety of the instructions, there was no plain error. Second, the Court addressed the admittedly improper suggestion by plaintiff’s counsel during closing argument that an important e-mail actually had been created after the fact. Although the suggestion was without merit and even baseless, the Court noted that closing argument remarks rarely require a new trial. This remark was no different -- it was not an abuse of discretion for the district court to deny the new trial. Finally, the Court addressed the amount of the compensatory damage award. Although the Court found a rational connection between the evidence and a significant compensatory damage award, it concluded that the evidence did not support the $200,000 award. It relied on similar cases from the circuit to reduce the award to $30,000 (noting that, but for the district court judge’s retirement, it would have remanded the issue to him for redetermination).

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JOREN v. NAPOLITANO (February 7, 2011)

Verlaine Joren was a security screener with the Transportation Security Administration (TSA) at Midway Airport in Chicago. At the age of 63, Smith claimed to have a condition that limited her ability to stand or walk. She asked her supervisor for accommodations, including a relocation to Florida and schedule modifications. Her supervisor was skeptical of her complaints and refused her requests. Joren claims that he even refused to reassign her a "safe distance" from an x-ray machine when she temporarily had a heart monitor without a doctor's clarification of "safe distance." Joren resigned her position in January 2004 after her supervisor confronted her regarding a Social Security claim she had filed. Joren filed suit pursuant to Title VII and the Rehabilitation Act, alleging age, gender, and disability discrimination and retaliation. Judge Bucklo (N.D. Ill.) dismissed the complaint, holding that Joren failed to state a cause of action under Title VII and that her Rehabilitation Act claim was foreclosed by the Aviation and Transportation Security Act (ATSA). Joren appeals

In their opinion, Judges Rovner, Evans, and Williams affirmed. First, the Court stated that the gender and age discrimination claims were properly dismissed because Joren's complaint did not suggest that gender or age motivated her employer's actions. Instead, the complaint linked those actions exclusively to her disability. Federal employees’ disability claims are generally governed by the Rehabilitation Act, but Congress passed the ATSA after the September 11 attacks. The ATSA established the TSA and gave the Under Secretary of Transportation for Security the authority to hire and fire "[n]otwithstanding any other provision of law." The Court agreed with the other circuits that have considered the question that the "notwithstanding" language meant that the Rehabilitation Act’s disability discrimination prohibitions did not apply to TSA employees.

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THE YORK GROUP v. WUXI TAIHU TRACTOR CO. (February 4, 2011

The York Group was involved in a lawsuit in federal district court in Texas. It wanted Daniel Benefield to provide evidence in that lawsuit, so it subpoenaed him. Benefield neither complied with the subpoena nor sought any protection from it. Benefield also ignored a district court order enforcing the subpoena and two contempt hearings. The district court found him in civil contempt, fined him $22,000, and ordered him to pay York's legal fees. Benefield continued to ignore the proceedings -- until York garnished his checking account. Benefield sought relief under Rule 60(b), arguing that he was never served with the subpoena. Judge Lindberg (N.D. Ill.) held an evidentiary hearing and concluded that he had been properly served. Benefield sought reconsideration under Rule 59(e), in which he presented some new arguments. The court denied the motion. Benefield appeals.

In their opinion, Chief Judge Easterbrook and Judges Posner and Tinder affirmed. The Court first had to decide which of the three orders (the contempt finding, the 60(b) order, and the 59(e) order) were reviewable. The contempt finding is not reviewable because it was a final order, the time for appeal has elapsed, and no post-judgment motion was filed in time to suspend its finality. The Rule 60 order, because it was not filed within the time to suspend the original judgment's finality, is treated as a new proceeding. Therefore, the timely Rule 59 motion deferred the time to appeal the Rule 60 order. Therefore, Benefield's notice of appeal on the Rule 60 order is timely and the Court has jurisdiction to consider it (and the Rule 59 motion arguments, if they are not waived). With respect to the Rule 60 motion, the district judge conducted an evidentiary hearing where he consider evidence from Benefield, a process server, and a next-door neighbor. The Court concluded there was clearly adequate evidence to support the district court's conclusion. The two new Rule 59 arguments, that the subpoena named both Benefield and his proprietorship and that the neighbor held a grudge against him, were forfeited. Both arguments should have been raised before or at the Rule 60 hearing. The Court did add that neither argument could be successful on the merits. The addition of the name of one's proprietorship on the face of a subpoena does not make it unenforceable. With respect to the neighbor, Benefield’s counsel rejected an opportunity to recess the hearing in order to rebut the affidavit.

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TRUSTMARK INSURANCE CO. v. JOHN HANCOCK LIFE INSURANCE CO. (U. S. A.) (January 31, 2011)

Trustmark Insurance Company agreed to reinsure certain risks underwritten by John Hancock Life Insurance Company. Their agreement contained a broad arbitration clause. When a dispute arose regarding one of the agreement's exclusions, the companies submitted it to arbitration. The arbitration panel consisted of one person selected by each company and a third person selected by the first two. The panel's award, which was affirmed by district court, supported Hancock. The parties entered into a confidentiality agreement that precluded them from discussing the proceedings or the award. When Trustmark refused to pay, Hancock instituted a second arbitration. Hancock named as its arbitrator the same person who had arbitrated the earlier dispute. The other two arbitrators were not involved in the earlier dispute. After the panel decided that it could consider the evidence and result from the first arbitration, but before it addressed the merits, Trustmark brought suit. It sought to enjoin any further arbitration while Hancock's chosen arbitrator remained on the panel. Its position was that the arbitration clause required "disinterested" arbitrators and that Hancock's arbitrator was not disinterested because of his knowledge of and participation in the first arbitration. Trustmark also argued that the panel could not interpret the confidentiality agreement from the first arbitration because that agreement did not contain its own arbitration clause. Judge Zagel (N.D. Ill.) issued the injunction. Hancock appeals.

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ROE v. ELYEA (January 28, 2011)

Hepatitis C is a disease that affects the liver. It is caused by the HCV virus and is transmitted through blood to blood contact. Many hepatitis C sufferers are asymptomatic while others develop cirrhosis or liver cancer. These conditions sometimes develop two or three decades after the initial infection. The virus is relatively common in the United States prison population. Edward Roe, Anthony Stasiak, Timothy Stephen, and Jonathan Walker are current or former Illinois prison inmates who suffer from the disease (Roe actually died in 2007). The plaintiffs brought suit against Dr. Willard Elyea, the former medical director of the Illinois Department of Corrections. They allege that the Department’s diagnosis and treatment protocols violated the Constitution. Their principal contention is that Elyea instituted a policy applicable to all inmates suffering from hepatitis C that deprived them of treatment unless they had a certain amount of time remaining on their sentences. The plaintiffs' damage claims were tried to a jury, which awarded to each plaintiff $20,000 in compensatory damages and $2 million in punitive damages. Judge Baker (C.D. Ill.) rejected Elyea’s qualified immunity claim but vacated the judgments in favor of Messrs. Stephen, Stasiak, and Walker on the ground that insufficient evidence supported the verdicts. He upheld the verdict and compensatory damages in favor of Roe but ordered a conditional remittitur, giving Roe the choice of $20,000 in punitive damages or a new punitive damages trial. When Roe made no choice, the court entered an order reducing the punitive damages to $20,000. Stephen, Stasiak, and Walker appeal the court's entry of judgment against them, Roe's estate appeals the remittitur, and Elyea appeals the qualified immunity ruling and the denial of judgment as a matter of law with respect to Roe, and also challenges the Court's jurisdiction to hear the appeal.

In their opinion, Seventh Circuit Judges Ripple and Rovner and District Judge St. Eve affirmed. The Court first addressed two jurisdictional issues. It rejected Elyea's argument that plaintiffs’ notice of appeal was ineffective because it was filed after the entry of the conditional remittitur order but before entry of the final judgment. The Court held that Federal Rule of Appellate Procedure 4(a)(2) applied to the remittitur order and the premature notice became effective when the final judgment was entered. The Court agreed with Elyea, however, that the remittitur order was not reviewable (a point Roe ultimately conceded). A party cannot appeal a judgment to which it has consented. The Court turned to qualified immunity and the merits. With respect to qualified immunity, the Court concluded that the district court properly denied qualified immunity. It was "clearly established" that an inmate had a right to adequate medical care that addressed his particularized need. The evidence in the record allowed a factfinder to conclude that Elyea's policy precluded certain treatment without regard to the inmate's particularized need. On the merits, the Court noted that the plaintiff's burden on an Eighth Amendment deliberate indifference claim is high. He must establish both an objectively serious medical need and that a prison official disregarded a known risk. Applying that test to each of the plaintiffs, the court concluded: a) Roe established the serious medical need and a denial of treatment without regard to his particular medical needs, and the record contained sufficient support for the jury's conclusion on causation, b) Walker failed to demonstrate Elyea's responsibility for his lack of treatment, c) Stasiak demonstrated a serious medical need but failed to demonstrate that the policy, as opposed to the time remaining on his sentence, resulted in any injury, and d) Stephen demonstrated a serious medical need but also failed to demonstrate that the policy, as opposed to the time remaining on his sentence, resulted in any injury.

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