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

CASTILE v. ASTRUE (August 13, 2010)

Barbara Castile filed her application for Social Security disability benefits in 2002. She asserted that her disability began in 2001 and was a result of the combined effects of fibromyalgia, arthritis, chronic fatigue, obesity, and a host of other maladies. Her application was denied, denied again after reconsideration, denied again after an administrative hearing, and denied again after a supplemental evidentiary hearing. The denial was affirmed by the Appeals Council. Castile filed suit for judicial review and then-District Judge Hamilton (S.D. Ind.) affirmed. Castile appeals.

In their opinion, Chief Judge Easterbrook and Judges Posner and Kanne affirmed. The Court first addressed Castile's argument that the ALJ erred in not considering her chronic fatigue syndrome as a severe impairment. It found not only the presence of substantial evidence to support that finding, but also noted that any error would have been of no consequence. The ALJ did find other severe impairments and was required to (and did) consider the cumulative effect of all impairments, severe and non-severe. His severity finding with respect to chronic fatigue did not matter. Next, the Court concluded that the Castile did not carry her burden in proving the combination of impairments rendered her disabled because of absenteeism. She failed to present any medical evidence on that issue. Next, the Court noted that the record did not support Castile's claim that the ALJ failed to properly consider her obesity. The Court noted the ALJ's careful consideration and thorough discussion of the evidence. Similarly, the Court concluded that the ALJ's assessment of her credibility was amply supported by the record and the result of careful consideration.

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ROMANELLI v. SULIENE (August 11, 2010)

Ron Romanelli was incarcerated at the Columbia County Jail. He claims that he was in desperate need of medical attention while incarcerated and that Dr. Suliene and Sgt. Kuhl violated his rights to adequate medical care. The district court granted Romanelli leave to proceed on his § 1983 claim but denied his motion for court-appointed counsel as premature. The court denied a second motion a few months later, concluding that Romanelli was capable of representing himself. After the court denied the defendant's motions for summary judgment, it also denied Romanelli's third request for counsel. The court concluded that the case was not complex, that Romanelli had successfully defeated the summary judgment motions, and that the Romanelli was provided with detailed trial instructions. The case proceeded to trial before Magistrate Judge Crocker. The Magistrate Judge ruled that the defendants were permitted to impeach Romanelli with evidence of prior convictions for issuing worthless checks, bail jumping, and sexual assault -- he did not permit impeachment with evidence of Romanelli's convictions for resisting/obstructing an officer and failure to report as a sex offender. A jury concluded that Romanelli did not suffer from a serious medical condition. The court entered judgment in favor of the defendants. Romanelli appeals.

In their opinion, Judges Ripple, Kanne, and Sykes affirmed. The Court first noted the absence of any right to counsel in a civil case but added that a district court has discretion under 28 U.S.C. § 1915(e)(1) to appoint counsel. In exercising that discretion, the court should examine whether the plaintiff is indigent, whether the plaintiff has made reasonable attempts to retain counsel, whether the case is complex, and whether the plaintiff is capable of representing himself. The Court concluded that the district court applied that proper standard and did not abuse its discretion in denying court-appointed counsel to Romanelli. The court acted within its discretion in denying a) the first motion -- it was too early for the court to make the necessary determinations, b) the second motion -- exceptional circumstances were absent and the court made a threshold determination that Romanelli was capable of representing himself in a relatively simple case, and c) the third motion -- Romanelli had proven himself capable of his own representation. The Court added that Romanelli had a very weak case on the facts and suffered no obvious prejudice due to the lack of professional representation. With respect to the evidence of prior convictions, the Court also concluded that the trial court did not abuse its discretion. The Court relied on the facts that almost all of the evidence relating to Romanelli's prior convictions was brought into the record by Romanelli himself and that the court included limiting instructions to the jury. Finally, the Court also noted that any evidentiary error would have been harmless given Romanelli's lack of credibility and the dearth of corroborating evidence.

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CASANOVA v. AMERICAN AIRLINES (August 5, 2010)

Bruce Casanova, an American Airlines baggage handler, reported an on-the-job injury to his supervisor toward the end of his shift on a Monday. The injury, however, is alleged to have occurred the preceding Friday. His supervisor sent him to the medical center and reported his injury to the firm that handles workers compensation claims for the airline. The medical staff instructed Casanova not to use his arm pending further examination. His supervisor was suspicious: Casanova claimed to be in too much pain to debrief her on the injury but had waited 72 hours to even report it and had worked most of a full shift in the meantime. She also noticed him using his left hand, apparently without pain. The airline decided to put him under surveillance. He was observed using his left arm frequently. American demanded an "Article 29F" hearing, an employer inquiry proceeding pursuant to the collective bargaining agreement. Casanova failed to cooperate at the hearing, answering "I don't recall" most questions. He did affirmatively deny any use of his left arm after the injury. Casanova also refused to provide a written explanation of the injury. American fired Casanova for lying and insubordination. Casanova brought suit, claiming that his discharge was in retaliation for his claim for workers' compensation benefits. At trial, a jury awarded over $1 million (mostly punitive damages). Judge Guzmán (N.D. Ill.) denied American's post trial motions. American appeals.

In their opinion, Chief Judge Easterbrook and Judges Kanne and Sykes reversed. The Court concluded that the district court erred in finding that Casanova prevailed because the injury (and his implied future claim for workers' compensation benefits) was a but-for cause of the later discharge. The injury claim was, in fact, a necessary condition of Casanova's discharge -- but it was not a sufficient condition. The record is clear that American fired Casanova for his lying and insubordination. Casanova did not even try to offer evidence suggesting that American's reason was pretextual. Instead, he attacked American’s use of the Article 29F procedure. Without any material dispute on an absence of pretext, America was entitled to judgment as a matter of law.

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LEONARD v. EASTERN ILLINOIS UNIVERSITY (May 26, 2010)

For almost 20 years, Robert Leonard worked in a janitorial position at Eastern Illinois University. Leonard was of Native American descent and was very outspoken and active on those issues. In particular, Leonard was very critical of the use by the University of Illinois (since discontinued) of a Native American mascot called “Chief Illiniwek.” In March 2005, Leonard applied for a promotion. He interviewed before a panel of six supervisors, two of whom wore shirts picturing Chief Illiniwek. Although the University of Illinois basketball team was scheduled to play a collegiate championship game that very night, Leonard was offended by the shirts and believed them to be a statement regarding Leonard's criticism of the mascot. Neither Leonard nor any other applicant was promoted as a result of the March 2005 interviews. In April, Leonard complained to the school's Office of Civil Rights. As a result of his complaint, the supervisors were requested not to wear clothing depicting the Chief Illiniwek when dealing with Leonard. In October of 2005, Leonard and seven others applied for another promotion. They all interviewed before the same six supervisors without incident. The University promoted the three applicants who scored the highest -- Leonard was seventh of the eight. Leonard brought suit against the University under Title VII. He alleged that the University failed to promote him in retaliation for his earlier complaint. Judge McCuskey (C.D. Ill.) granted summary judgment to the University. Leonard appeals.

In their opinion, Judges Bauer, Evans, and Tinder affirmed. Leonard had proceeded in the trial court under the direct method of proof, which requires him to prove, among other things, a causal connection between a protected activity and an adverse job action. The Court found no such evidence. There was no evidence that the supervisors reacted negatively to his complaint or that the results of the scoring showed any bias. All six supervisors scored Leonard in the bottom half of the candidates. A causal link cannot be inferred from "suspicious timing" because of the six-month gap between the complaint and the interviews. The Court also rejected Leonard's attempt to use 10-year-old statements of allegedly anti-Native American bias to support an inference of retaliation.

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WALLACE v. MCGLOTHAN (MAY 26, 2010)

Tracey Wallace had trouble reading small print and driving at night. She decided to have surgery so that she would not need to wear contacts or glasses. She went to Dr. McGlothan for LASIK surgery. Unfortunately, the surgery was not successful. A complication arose first during the procedure on her right eye. Notwithstanding the complication, Dr. McGlothan nevertheless performed the same procedure on her left eye -- with the same result. Wallace sought treatment from Drs. Connor and Price. They treated her for years, with some improvement. She continues, however, to suffer the effects of the unsuccessful surgery. The Indiana Medical Review Panel concluded that McGlothan was negligent but only with respect to the left eye. Wallace and her husband brought suit. Judge McKinney (S.D. Ind.) granted partial summary judgment. He relied on the Panel’s opinion in finding that McGlothan violated the standard of care with respect to her left eye but was not liable for any damage to her right. A jury trial was held on damages. The defendant moved for judgment as a matter of law at the close of the evidence, arguing that Wallace failed to prove the permanence of the injury. After a jury verdict of approximately $700,000, McGlothan renewed his motion with respect to the permanence of the injury and also addressed an allegedly undisclosed pre-existing condition. The court denied the motion. McGlothan appeals.

In their opinion, Chief Judge Easterbrook and Judges Kanne and Tinder affirmed. First, the Court rejected Wallace's argument that McGlothan waived the pre-existing condition argument by failing to include it in his pre-verdict motion. The Court agreed that McGlothan improperly included in his Rule 50 (b) motion an argument that was not included in his pre-verdict motion. Although the plaintiffs could have objected, they did not. They therefore waived their waiver argument. The Court then proceeded to uphold the decision on the merits. First, it concluded that the objections to the expert testimony were forfeited. Second, it found the testimony of the experts sufficient for the jury to conclude that the damage was permanent. Third, it concluded that the testimony of the experts was sufficient for the jury to find a causal link between the surgery and Wallace's condition, unrelated to a pre-existing condition. Fourth, it concluded that the evidence linking the condition to the left eye as opposed to the right eye, although sparse, was sufficient. Finally, the Court rejected defendant's complaints about discovery abuse and perjury.

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AMERICAN HONDA MOTOR CO. V. ALLEN (April 7, 2010)

American Honda Motor Co. ("Honda") manufactures motorcycles. One such motorcycle, the Gold Wing GL1800, is the subject of a class action lawsuit. The plaintiffs, purchasers of the GL1800, allege that the motorcycle has a design defect. The defect, they allege, results in excessive shaking of the steering assembly. The plaintiffs moved for class certification. They relied on a report prepared by Mark Ezra for support for their allegation of the predominance of common issues. In his report, Ezra had developed a standard for the dissipation of steering oscillation in motorcycles. He tested one GL 1800 and concluded that it did not meet this standard. Honda argued that the report did not meet the Daubert standard. The district court expressed its concern that the standard was not supported by empirical evidence and was not generally accepted by the engineering community and that his sample size of one was inadequate. Nevertheless, it refused to strike the report and granted the motion for class certification. Honda petitioned for leave to appeal.

In their opinion, Judges Posner, Evans, and Tinder granted the petition, vacated the denial of the motion to strike and the order certifying a class, and remanded. The Court acknowledged that it had not yet considered the specific question of whether a Daubert challenge must be resolved prior to class certification. It has, however, held that a district court must make all legal and factual determinations necessary to ensure that class requirements are met. The Court thus held that a district court must conclusively resolve challenges to an expert report if the report is critical to class certification. Here, the district court started the correct analysis but never actually decided the question. Instead, it simply decided not to exclude the entire report at what it referred to as the "early stage of the proceedings." The district court abused its discretion in doing so. In fact, the Court went on to conclude that the Ezra report should have been excluded under a Daubert analysis. Applying the Daubert factors, the Court noted the lack of evidence that the standard has been generally accepted or that any tests have been performed to support it. The Court also stated that the sample size of one would rarely be sufficient to extrapolate its results to an entire fleet of motorcycles. Without the report, the plaintiffs cannot meet the predomination requirement of class certification.

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BROWN v. CITY OF CHICAGO (March 30, 2010)

Chicago police officers Blackman and Long were on a plain-clothes detail in a Chicago neighborhood when they observed what they believed was an illegal drug transaction. During their pursuit of the suspects, Blackman came across Arthur Brown. According to Blackman, Brown was holding a gun. When he failed to follow the officer's orders to drop it, Blackman shot him several times. According to Brown and another witness, he did not have a gun. Instead, Brown claims that Blackman shot him in the back and then planted a gun in his hand. Brown was charged and convicted of several counts of aggravated assault, aggravated unlawful use of a weapon, and unlawful possession of a weapon. His conviction was affirmed. Nevertheless, Brown brought a § 1983 complaint against Blackman, alleging that Blackman's conduct amounted to the excessive use of force in violation of the Constitution. The district court granted summary judgment to Blackman, concluding that the complaint was barred by collateral estoppel. Brown appeals.

In their opinion, Chief Judge Easterbrook and Judges Manion and Tinder affirmed. The Court noted that Brown conceded that the elements of collateral estoppel existed in the case. Instead, he argued that two exceptions to the rule applied: that he was denied a fair hearing and that new evidence made the rule’s application unfair. The Court agreed that Brown's exceptions to the application of collateral estoppel were recognized in Illinois. However, the Court rejected their application in this case. First, with respect to the fair hearing exception, the Court concluded that the two evidentiary issue rulings at his criminal trial did not deny Brown a fair hearing. The third ground on which he based his “fair hearing” argument was the accusation by the prosecutor that Brown and his attorney made up a theory of conspiracy by police officers in order to “cash in” in a civil action against the City. The state appellate court found the remarks improper but did not reverse the conviction. Likewise, the Court found that the remarks, though improper, did not amount to the deprivation of a fair hearing. Second, with respect to the new evidence exception, the Court concluded that any discrepancy between a witness’ testimony in Brown's criminal trial and his deposition testimony in the § 1983 case was not significant enough to create the type of injustice that would bar the application of collateral estoppel.

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DEKOVEN v. PLAZA ASSOCIATES (March 17, 2010)

Plaza Associates is a well-known debt collection agency. It sent two collection letters to DeKoven stating that it had the authority to offer a lump-sum settlement but that the offer would only be "valid for a period of thirty-five (35) days." In a different letter to a plaintiff in a related suit, Plaza Associates included the DeKoven statement and also stated that a recipient who disputed the validity of the debt with "satisfactory proof" should provide that information to Plaza. The plaintiffs filed suit under the Fair Debt Collection Practices Act. They complained about the "35 day" language and the "satisfactory proof" language. The former, they complain, might be construed by some as a final offer -- when in fact it is not. The latter, they complain, might be construed by some that a recipient must have "proof" to dispute the validity of the debt. Both plaintiffs retained the same survey expert. The expert conducted a survey but the judges in both cases considered it inadmissible. In both cases, the court below entered summary judgment for Plaza Associates. In both cases, the plaintiff appeals.

In their opinion, Judges Posner, Flaum, and Williams affirmed. The Court reviewed the circumstances of the survey. The expert surveyed 160 people in a shopping mall near Chicago. One half of the people were given the letter with both challenged clauses -- the others (the “control group”) were shown a letter with neither clause. The survey respondents were then asked a series of questions about the letters. The Court agreed with the district court in finding numerous flaws in the survey: the composition of the response group, the content of the original oral questions, and the content of the "control group" letter, among others. The Court noted that many Fair Debt Collection Practices Act cases fail because of survey flaws. It suggested that district courts consider exercising their authority to use a court-appointed expert in FDCPA cases.

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WHITLOCK v. BROWN (February 24, 2010)

The Whitlocks were camping with their daughter at the Indiana Dunes State Park in July of 2005. They came across some personal property at what appeared to be a deserted camp site. They put the items in their vehicle and told a neighboring camper that they would turn it in to park rangers. Instead of turning it in immediately, however, they left the park and went shopping. Upon their return, they left a voicemail for the property owner (having obtained his number from information found in the property) advising him that they had his property and were going to leave it with the park ranger. The owner of the property had already reported it missing and park authorities were investigating. When the Whitlocks eventually turned in the property, they were accused of theft. The investigation confirmed the Whitlocks' explanation. State investigator Brown prepared a case report and an "Affidavit for Probable Clause." He sent the affidavit to the local county prosecutor's office, and there is a dispute over whether he attached his case report to it. The Whitlocks were charged with conversion and an arrest warrant was issued. When they were stopped for a traffic violation a month later, they were arrested and held in jail for four days before the prosecutor dropped the charges. The Whitlocks sued Brown under § 1983, specifically alleging that he withheld their explanation for why they held the property for so long from his case report or application for a warrant. The district court concluded that Brown did violate their Fourth Amendment rights by withholding the exculpatory information but also concluded that he was entitled to qualified immunity because a reasonable officer could have believed that probable cause to arrest the Whitlocks existed. The Whitlocks appeal.

In their opinion, Circuit Judges Posner and Sykes and District Judge Dow affirmed. Qualified immunity, stated the Court, involves two inquiries: whether there is a constitutional violation and whether a reasonable officer, considering clearly established law, would have known his actions were unconstitutional. Here, the claim is that Brown intentionally or recklessly withheld exculpatory information from the prosecutor, which could overcome the general presumption of the validity of the warrant. The information omitted, however, must be material to the existence of probable cause. The Court first addressed the alleged withholding of the case report itself. The district court had concluded that Brown withheld the report, inferring so from its absence from the prosecutor's file. The Court disagreed. Brown testified that he had submitted the case report. Although self-serving, the testimony was not speculation and was based on Brown's personal knowledge. In contrast, the Whitlocks presented no evidence or reasonable inference that the report was not sent. Although therefore concluding that the report itself was not withheld, the Court also considered an omission in the report -- Brown's failure to include the Whitlock's innocent explanation for why they did not turn in the property immediately. The Court turned to the materiality of that missing information. The statute upon which the warrant was based prohibits "unauthorized control over property" of another. It does not require an intent to permanently deprive. Although the Court hypothesized a situation in which the explanation could be material under a theory of implied consent from the owner of lost property, it found no such theory recognized under Indiana law. The Court concluded that a reasonable officer would not have known if the innocent explanation was material to probable cause and that Brown was therefore entitled to qualified immunity.

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TURNER v. THE SALOON (February 8, 2010)

Paul Turner was a waiter at The Saloon restaurant. After working there for several years, Turner and one of his supervisors carried on a sexual relationship that lasted for about nine months. According to Turner, the supervisor retaliated against him after she ended the relationship. He alleges that she changed his table assignments, disciplined him without cause, and sexually harassed him on a number of specific occasions. Turner also alleges that he was discriminated against because of his psoriasis. He wears no underwear as a result of that condition and therefore occasionally exposes himself while changing clothes. He claims that his supervisors failed to accommodate his condition. Instead, he was forced to change in a “vile” men’s room. One day, in the middle of a shift and with no other waiters on duty, Turner left the restaurant to run an errand. When he returned, he was fired. Turner sued the restaurant and several managers for gender and disability discrimination under Title VII and the Americans with Disabilities Act. He also made a claim for overtime. The court granted summary judgment to the defendants. Turner appeals.

In their opinion, Judges Manion, Rovner, and Sykes reversed and remanded in part in affirmed in part. The Court first addressed the Title VII sexual harassment claim. It concluded that the district court erred in not considering most of the alleged acts of harassment because they occurred outside the limitations period. Under the Supreme Court's decision in Morgan, whether an alleged act of harassment is considered by a court depends on whether the claim is for employment discrimination or for hostile work environment. In an employment discrimination claim, discrete acts outside the limitations period should not be considered. However, in a hostile work environment claim, all acts can be considered as long as one act contributing to the hostile environment took place during the limitations period. Taking all the alleged acts into account, the Court had little difficulty in finding that they were sufficient to survive summary judgment. The Court noted the presence of at least five discrete acts, three of which were aggressively physical. Since the district court did not reach the issue of employer liability, the Court left the issue for remand. The court next addressed Turner's claim that his termination was in retaliation for his complaints about the harassment. The Court concluded that Turner was unable to establish a prima facie case under either the direct or indirect method. It noted a series of at least ten serious reprimands in the eight or nine months preceding his termination as well as the fact that he left his job in the middle of the shift. The serious performance problems as well as the passage of time since his harassment complaint belie a causal connection between the complaint and his termination. The Court summarily rejected Turner's ADA discrimination claim -- his psoriasis is not a disability under the Act since it does not limit any major life activity. The fact that he is not disabled does not preclude his ADA retaliation claim. Since he did raise such a claim with his employer, his employer is not allowed to retaliate. He does not prevail on that claim, however, for the same reasons he could not prevail on his Title VII retaliation claim. Finally, the Court rejected Turner's wage claims as wholly unsupported by the evidence presented.

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GAYTON v. MCCOY (January 28, 2010)

India Taylor had a life-threatening heart condition. She took six different medications to treat the condition. The six drugs were not the only drugs Taylor took – she was also a heroin user. Taylor was arrested on four different occasions in the summer of 2003. As a result, personnel at the Peoria County Jail became very familiar with her condition and her medications. Both her medical history and her prescriptions became part of her file. She was arrested again in October. Because she complained of chest pain, she was taken for a medical examination. Nurse Radcliffe knew her history and medications and asked her brother to bring her medications to the jail. She also made a notation that Taylor should see the doctor the next day if her medications did not arrive. The next day, Taylor complained of nausea on multiple occasions. By mid-afternoon, she was vomiting violently. The guards called the nurse, and even collected her vomit in a bag. Nurse Hibbert suspected that Taylor was faking her symptoms in order to get drugs and refused to see her. Although her name was on the list to see the doctor the next day, she died during the night. Lester Gayton, her brother and administrator of her estate, brought a wrongful death action pursuant to §1983. He named the sheriff, the jail superintendent, the doctor, three nurses, and the outsourced health care provider at the jail. The district court excluded the testimony of the plaintiff's medical expert and granted summary judgment to the defendants. Gayton appeals.

In their opinion, Judges Flaum and Williams and District Judge Lawrence affirmed in part and reversed in part. The Court started with the district court’s exclusion of the medical expert, Dr. Weinstein. First, the Court concluded that the lower court erred in finding Weinstein unqualified to opine on the cause of death. In fact, Weinstein did not testify as to cause of death -- he simply adopted the other experts' conclusion that Taylor died of nonspecific heart failure. Next, the Court stated that the fact that Weinstein was not a cardiologist did not make him unqualified. Finally, with respect to the reliability of his specific conclusions, the Court considered each conclusion individually: a) the lower court properly barred the conclusion that Taylor might have lived had she been given her medication since he gave no basis for his opinion and claims no specific expertise regarding the medication, b) the court improperly barred his testimony that the combination of her vomiting and certain medications might have contributed to her heart failure since that opinion requires no specialized expertise, and c) although the court did not address it, Weinstein is an expert in prison healthcare and is qualified to give his opinion that prison medical personnel fell short of accepted standards of medical care.

The Court next addressed summary judgment. A cause of action for failure to provide adequate medical care requires a showing of a serious medical condition, deliberate indifference, and causation. The deliberate indifference element itself requires knowledge of the health risk and a disregarding of that risk. Given Taylor's serious heart condition, her complaints of chest pain and nausea, and her excessive vomiting, the Court had little difficulty in finding enough evidence of a serious medical condition to overcome summary judgment. On the issue of deliberate indifference, the Court analyzed each defendant separately: a) summary judgment was proper for the sheriff, the doctor, and the superintendent since they had no contact with Taylor and did not know of her request for medical attention, b) summary judgment was proper for the outsourced medical care organization since the plaintiff conceded that the medical policies were sufficient, thus precluding Monell liability, c) summary judgment was proper for two of the three nurses in that one acted reasonably and the other, although negligent, was not deliberately indifferent, and d) summary judgment in Nurse Hibbert’s favor was improper since a jury could find that her refusal to see Taylor despite strong indications that she was in need of medical treatment amounted to deliberate indifference. Finally, the Court also found sufficient evidence in the record on which a jury could find proximate causation between Nurse Hibbert’s conduct and a delay in treatment that exacerbated Taylor’s suffering.

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MILAM v. DOMINICK'S FINER FOODS (December 7, 2009)

Ahmad Milam is one of several African-American produce clerks at a Chicago Dominick's grocery store. Each week, Dominick's posts the produce clerks’ schedule of hours for the upcoming week. A more-senior produce clerk is allowed to "claim" the hours of a less-senior clerk. Milam and five other African-American produce clerks filed suit against Dominick's, claiming that it was guilty of race discrimination when it classified two more junior white women as produce clerks but did not include them on the schedule. The court granted summary judgment to Dominick's on the ground that plaintiffs had no evidence of damages. Plaintiffs appeal.

In their opinion, Judges Posner, Kanne and Rovner affirmed. The Court was quite critical of the district court's handling of the case. It noted that one of the women at issue was actually never a produce clerk. Although she had been offered and accepted a promotion to produce clerk, she changed her mind and never was scheduled to work as one. Dominick's presented evidence years ago that the failure to list the second woman on the produce clerk schedule was an innocent mistake. Plaintiffs never challenged the evidence as pretextual. The court should have granted summary judgment to Dominick's. With respect to the eventual order of the district court, the Court agreed that the plaintiffs presented insufficient evidence of either actual or probabilistic injury. The Court conceded that the plaintiffs' probabilistic injury theory was a proper damages theory. It requires, however, evidence of the expected benefit – which was never presented. In the end, the Court termed the case frivolous.

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SENSKE v. SYBASE, INC. (December 3, 2009)

Robert Senske joined Sybase as a Strategic Account Manager in 2002. He was 55 years old at the time. For two years, Senske's performance was marginal at best in most areas. He did outperform his financial goal in 2004, but only because he got partial credit for two large deals on which he had little input or contribution. He was particularly criticized for excessive tardiness and incomplete paperwork completion. In early 2005, he was put on a performance improvement plan. He was told to improve his business skills, to be more responsive, and to complete his paperwork in a timely manner. Instead of showing improvement, Senske's performance deteriorated during the performance improvement period -- and he was fired. Senske sued Sybase under the Age Discrimination in Employment Act, alleging that he was fired as a result of his age. The district court granted summary judgment to Sybase. Senske appeals.

In their opinion, Judges Bauer, Kanne and Evans affirmed. Instead of enumerating the elements of a prima facie case under the indirect method, the Court proceeded directly to address the question of pretext. If Senske is unable to show that Sybase's stated reasons for his termination are pretextual, he also would not be able to establish that he was meeting his employer's legitimate expectations. The Court reviewed, in some detail, the evidence in the record of Senske's history of performance and Sybase's stated reasons for his termination. The Court concluded that Senske failed to present any evidence that the reasons given by Sybase for his termination were not sincere.

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THOMAS v. COOK COUNTY SHERIFF'S DEPARTMENT (December 1, 2009)

Norman Smith was arrested by the Chicago police on April 23, 2004. He was delivered to the Cook County Jail on April 24, where he was scheduled to remain until his trial date. An intake medical examination showed elevated blood pressure but no other medical problems. Smith showed symptoms of something more serious, however, from that first day. He was dizzy and vomiting. His symptoms became more serious over the next several days. Despite repeated requests by Smith and by other detainees on his behalf for medical assistance, he received none. On April 30, his cellmate discovered Smith convulsing on the floor. The cellmate reported it immediately to the officer on duty. There was a significant delay before Smith received any treatment. He died that morning of pneumococcal meningitis. His mother, Marlita Thomas, brought a § 1983 case against a number of individual correctional officers, the Cook County Sheriff and Cook County. A jury awarded Thomas $4,450,000 against the County, the Sheriff and three correctional officers. The jury then allocated the damages amongst the defendants. The court denied the defendants' motions for judgment as a matter of law or for a new trial. The defendants appeal.

In their opinion, Judges Flaum, Wood and Williams affirmed in part and reversed and remanded in part. The Court first addressed the verdict against the individual officers. In order to prevail, the Court stated that a plaintiff must demonstrate that a medical condition is objectively serious, that the defendant has subjective knowledge of the health risk and the defendant disregarded the risk. The Court concluded that there was sufficient evidence in the record to allow a jury to conclude that the individual officers knew about Smith's health risk and ignored it. Thus, the verdict is affirmed. The Court next addressed the verdict against the County. The County can be liable only if the unconstitutional act is the result of an official policy or a widespread practice or custom or is caused by an official with policy-making authority. The Court refused to adopt a bright-line test on how widespread a policy need be, but noted that it must be more than a random event. The Court concluded that there was sufficient evidence of a widespread policy: a failure to review medical requests, a failure to collect medical requests, keeping request forms in a locked box, etc. Thus, the verdict against the County was affirmed. The Court next addressed the verdict against the Sheriff. The basis for imposing liability under Monell against the Sheriff was his policy of severely understaffing the jail. In order to sustain the verdict, there must be a causal link between the policy and the unconstitutional act. Here, the individual officers were found liable based on their deliberate indifference to Smith's medical needs. The Court found no relationship between the officers' conduct and the understaffing. The Court concluded that the understaffing theory was too remote to support the verdict. Thus, the Court reversed for entry of judgment in the Sheriff's favor. After rejecting several evidentiary arguments of the defendants, the Court addressed the verdict. On the verdict form, the jury entered $150,000 against the officers, $3 million against the County, and $1 million against the Sheriff. This allocation was improper, in that the defendants were jointly and severally liable for one indivisible injury. It raised the question of whether the total damages is the sum of all of the damage awards, or the highest single assessment. The Court presumed that the jury followed instructions to not award duplicate damages and concluded that adding the damage awards would be proper. Under that analysis, the award against the Sheriff ($1 million) remains as part of the verdict against the County and individual officers, notwithstanding the reversal of the verdict against the Sheriff. Finally, the Court rejected the defendants' argument that the award was excessive.

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MUSCH v. DOMTAR INDUSTRIES (November 25, 2009)

Alan Musch is an hourly maintenance employee at one of Domtar's paper mills in Wisconsin. Because he is regularly exposed to hazardous chemicals during a shift, he must shower and change his clothes before leaving the mill. He is not compensated for that time. He brings an action on behalf of himself and the other maintenance employees under the Fair Labor Standards Act and Wisconsin state law for overtime compensation. The court entered summary judgment for Domtar. The class appeals.

In their opinion, Judges Bauer, Kanne and Evans affirmed. The FLSA does require an employer to pay its employees for all their work. Although an employer is generally not required to compensate an employee for activities (such as cleaning up) at the end of the workday, compensation may be required if the activity is an integral part of the employment. The Court agreed with the district court's findings that the class failed to establish that chemical exposure was so pervasive that cleanup was required at the end of each day. The Court also noted that Domtar had a policy requiring maintenance employees to shower and change clothes whenever they were exposed to hazardous chemicals, even if not at the end of their shift. The Court concluded that the activities were non-compensable.

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FORD v. MINTEQ SHAPES AND SERVICES (November 24, 2009)

Dennis Ford has been employed as a forklift operator for Minteq for many years. Throughout those years, he has been the only African-American employee at his facility. In 2007, Ford brought a race discrimination claim against Minteq. He complained that a coworker referred to him as "black man," that a supervisor called him a guerrilla, that he was not allowed to bring his grandchildren to a holiday party and that he was retaliated against for seeking outside medical attention for an on-the-job injury. The district court granted summary judgment to Minteq. Ford appeals.

In their opinion, Judges Bauer and Wood affirmed. The Court noted that Ford's racial harassment claim required proof of an abusive work environment. The factors to be considered in determining whether the employer's conduct is severe and pervasive are the frequency and severity of the conduct, whether it is physically threatening and whether it interferes with the complainant's job. The Court concluded that Ford's complaints, individually and in the aggregate, did not rise to that level. Specifically with respect to the "black man" comments, the fact that Ford complained only once and never followed up with his employer on that complaint would not allow a reasonable juror to find that it rose to the level of harassment. The Court also concluded that Ford failed to present sufficient evidence on his disparate pay and retaliation claims to reach a jury.

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WALSH v. CHEZ (October 21, 2009)

Jason Walsh was diagnosed with autism early in his life. His parents took him to Dr. Michael Chez for treatment. Chez prescribed a daily dosage of 50 mg of prednisone. One side-effect of prednisone is its negative impact on the body's ability to fight infection. A short time after the beginning of his prednisone treatment, Jason developed pneumonia. Dr. Chez reduced the prednisone treatment from 50 mg per day to 50 mg twice a week. A few months later, Jason died. Jason's parents brought a medical malpractice case against Dr. Chez. The Walshes submitted expert reports supporting their theory that the abrupt dosage reduction was the cause of their son's death. The district court excluded the reports on the ground that they failed to articulate a standard of care. The court dismissed the case. The Walshes appeal.

In their opinion, Judges Cudahy, Flaum and Wood reversed and remanded. The Court focused on the Rule 26 duty to disclose information regarding an expert's testimony. The purpose of the rule is to allow an opposing party a reasonable opportunity to address the expert's opinion. Examining the reports of the two experts, the Court concluded that each expressed an opinion that the conduct of Dr. Chez was not consistent with the standard of care. Dr. Chez was on notice of the Walshes' theory of malpractice. The fact that there may have been numerous ways of properly weaning Jason from the prednisone does not affect the experts' opinions that Dr. Chez' approach fell below the standard of care.

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MCGOWAN v. DEERE & CO. (September 11, 2009)

William McGowan, an African-American male, had over 20 years of employment at Deere & Company when he injured his back. He eventually underwent surgery. He returned to work with a 25-pound weight restriction imposed by the company doctor. His surgeon and physical therapist both cleared him, on separate occasions, to return to work with less onerous restrictions. The weight restriction prevented him from returning to his prior job and also disqualified him from two other positions. McGowan brought an action under Title VII and § 1981, complaining of Deere's refusal to reinstate him and refusal to select him for the other positions. The district court granted summary judgment to Deere. McGowan appeals.

In their opinion, Judges Flaum and Williams and District Judge Lawrence affirmed. The Court first noted that the elements and proof necessary for Title VII and § 1981 are essentially identical. McGowan proceeded under the indirect approach, in which he had to prove, among other things, that other persons similarly situated but not in his protected class were treated more favorably. The similarly situated test, said the Court, is a flexible test. The purpose is to identify a sufficient number of common factors between the claimant and others in order that a meaningful comparison can be made. The critical comparators here are job duties and weight restrictions. The court concluded that McGowan did not provide sufficient evidentiary basis for either job duties or weight restrictions on the employees that the proffered as similarly situated. He therefore failed to make a prima facie case. Alternatively, the Court concluded that McGowan failed to produce any evidence that Deere's stated reasons for its decisions were discriminatory.

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CICIORA v. CCAA, INC. (September 4, 2009)

Lela Ciciora went to Burrito Jalisco one winter day in Chicago to pick up her lunch. She parked in the lot and used the sidewalk to get to the store. It had snowed earlier but the snow had been removed from the sidewalk. A store employee had also salted the sidewalk that morning. Nevertheless, Ciciora slipped on a small patch of ice and fractured her ankle. She brought a personal injury lawsuit against the owner of the premises and CCAA, who ran the restaurant. The district court granted summary judgment to the defendants. Ciciora appeals.

In their opinion, Judges Kanne, Rovner and Evans affirmed. The Court started with the general rule that a property owner has no duty to remove natural accumulations of snow and ice. A duty may exist, however, if one is contractually obligated to do so or if one voluntarily does so. Here, the restaurant owner voluntarily cleared and salted the sidewalk regularly. The Court noted that a volunteer could be liable if her actions resulted in an unnatural accumulation or increased an existing hazard in some other manner. There was simply no evidence presented, however, of an unnatural accumulation or of an aggravation of existing hazard. Ciciora relied on mere speculation. The district court properly granted summary judgment. Similarly, the court concluded that Ciciora failed to present any evidence that the owner of the premises failed to exercise reasonable care in its obligation to maintain the sidewalks.

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INTERNATIONAL PRODUCTION SPECIALISTS v. SCHWING AMERICA, INC. (SEPTEMBER 2, 2009)

North Shore Sanitary District (NSSD) entered into a contract with Voest-Alpine Industries to build a wastewater treatment plant. Voest-Alpine in turn contracted with Schwing America to supply and install five silos and associated equipment. Schwing in turn agreed to pay International Production Specialists (IPS) almost $700,000 to fabricate and install the five silos. The original schedule provided that the silos were to be delivered by December of 2001, approximately 4 months after Schwing and IPS entered into their agreement. NSSD suspended work on the project prior to the delivery dates. Schwing instructed IPS to continue its fabrication effort with respect to the two silos with the earliest installation dates but to cease any work on the site. NSSD restarted the project two years later -- but changed the physical location of the plant. The change in location resulted in a dispute between Schwing and IPS. In fact, IPS advised Schwing that it would not complete the project. After further negotiations, the project was back on. Schwing advised IPS of a new schedule requiring installation of the first two silos in August of 2004 and the other three in December of 2004. Although IPS completed the installation of the first two silos almost on time, the other three became a problem. When the silos were still not delivered by February of 2005, Schwing terminated the contract and completed the work through other subcontractors at significant cost. IPS sued for breach of contract -- Schwing countersued. After a trial, the court concluded that Schwing both did not breach and was justified in terminating the contract. The court awarded damages of almost $500,000. IPS appeals.

In their opinion (PDF), Judges Flaum, Rovner and Williams affirmed in part and reversed in part. The Court noted that Schwing terminated the contract because of IPS's failure to satisfactorily complete the work within a specified time. If IPS's performance within a particular time was required and its failure destroyed an essential element of the contract, it would be a material breach. Under Wisconsin law, a material breach would release Schwing from its continuing performance. The Court looked to the contract. It concluded that the original agreement contained an expectation for performance within a particular time. Of course, the time frame was eliminated when NSSD put the project on hold. After the project started back up, a layout schedule contained expectations for completing the project. Considering the complexity of the project and the number of subcontractors, the Court concluded that the time frames in the layout schedule were reasonable contractual expectations. Alternatively, the Court stated that the law would imply a reasonable time for performance if the contract is silent. Given the original schedule of delivery and installation as well as the later layout schedule, the Court concluded that the schedule reflected a reasonable time for performance. Therefore, the Court agreed with the district court that IPS materially breached and that Schwing was entitled to damages. The Court also concluded that the district court did not err in its computation of damages, with one exception. At the time of IPS's breach, Schwing still owed approximately $50,000 on the contract. To put Schwing in an equivalent, but no better, position then it would have been without a breach requires it to credit IPS for the $50,000.

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MONCEF LAOUINI v. CLM FREIGHT LINES, INC. (August 20, 2009)

Moncef Laouini, an Arab from Tunisia, worked as a truck driver for CLM until he was fired in 2006. He sued the company under Title VII for race and national-origin discrimination. He alleges that he filed a charge with the EEOC on April 12, 2007 (a date that both parties agree was the deadline). The EEOC's record of the charge indicates that it was not processed until April 16. CLM moved to dismiss the complaint as untimely. Laouini responded with an affidavit from his lawyer. The affidavit indicated that either the lawyer or his assistant faxed the charge to the EEOC on April 12. Laouini also submitted a printout of the confirmation from his lawyer’s fax machine indicating that a three-page document had been transmitted to the EEOC's fax number on April 12. The district court converted the motion to dismiss into a motion for summary judgment and granted summary judgment to CLM. Laouini appeals.

In their opinion, Judges Flaum, Kanne and Wood vacated and remanded. The Court began by noting that the failure to file a charge in a timely manner is an affirmative defense and the burden is on CLM to demonstrate an absence of a genuine issue of material fact. The Court moved on to the significance of the fax confirmation, an issue not yet addressed by the Court. The Court noted that several other courts have concluded that a fax confirmation creates a rebuttable presumption that the fax was, indeed, received by the intended recipient. Other courts have stopped short of that, but treat the fax confirmation as creating an issue of fact on the question of receipt. The Court concluded that the fax confirmation was strong evidence of receipt and that CLM presented no evidence to the contrary. Summary judgment was therefore inappropriate.

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VALENTINO v. SOUTH CHICAGO HEIGHTS (July 30, 2009)

Sandra Valentino worked for the Village of South Chicago Heights for several years. In 2001, she became suspicious of Mayor David Owen's hiring practices. She was aware that the Village employed many of the mayor's friends and family members. She believed that many of these employees were on a “ghost payroll,” i.e., being paid for work they did not perform. She shared her concerns with William Bramanti, a former village employee who quit as a result of a dispute with the mayor. Bramanti submitted a FOIA request to the village for employee time records. At the same time, Valentino began to make copies of the daily employee sign-in sheets. In February of 2003, Bramanti accused the mayor publicly of ghost payrolling. The very next business day, the Village Administrator searched Valentino's desk, found the copies, and fired Valentino when she arrived for work. Valentino filed a § 1983 action against the Village, the mayor and others. She alleged retaliation in violation of her First Amendment rights. The district court granted summary judgment to the defendants. Valentino appeals.

In their opinion, Judges Rovner, Evans and Williams reversed and remanded. The Court first looked to whether Valentino's speech was constitutionally protected, i.e., whether she spoke as a private citizen on a matter of concern. The Court found it "well-established" that speech which protests government waste is entitled to constitutional protection. Although the Court recognized that Valentino had a private interest in determining whether she was receiving proper compensation, it concluded that her speech was protected since she was not motivated solely by those personal interests. The Court next addressed whether there was evidence that the protected speech was a motivating factor in her termination. The Court found the circumstantial evidence -- knowledge of her relationship with Bramanti, the search of her desk, the search and firing the day after Bramanti's public accusations, and a comment by the mayor threatening her employment -- sufficient to take that issue to a jury. That same evidence, as well as the fact that the sign-in sheets were on public display and were simply copied by Valentino, was enough for the Court to conclude that a jury could also find the village's stated reason for her termination pretextual. Thus, the Court reversed the summary judgment for the defendants. With respect to the Monell claim, the Court stated that the Village could be liable for the constitutional violation if it was caused by an individual with final policymaking authority. The question for the Court was whether Owens had final authority on matters of hiring and firing. The Court concluded that the evidence was conclusive that Mayor Owen made personnel decisions for the village without any meaningful oversight, and thus had final authority. The Court reversed the district court with respect to the village's liability under Monell. Finally, the Court rejected defendants' argument that the Illinois Tort Immunity Act immunized them. That Act immunizes village officials from certain discretionary policy decisions. The decision to fired Valentino was not a policy decision -- the defendants are not entitled to immunity.

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TRADE FINANCE PARTNERS, LLC v. AAR CORP. (July 16, 2009)

Trade Finance Partners ("TFP") is, in essence, a broker that arranges business relationships for its clients. It charges a fee on any business it secures. AAR, an aviation support company, was a TFP client. The companies began working together in late 2004, and entered into a contract in January 2005. The contract allowed TFP to secure business from any "target accounts" which were identified by AAR in a written Request for Information ("RFI"). Just prior to and separate from its relationship with TFP, AAR responded to a Northwest Airlines Request for Proposal for an aircraft maintenance and repair contract. TFP alleges that AAR identified Northwest as a target account, even though they did not complete an RFI. Northwest and TFP did communicate in early 2005. In February, Northwest reissued its Request for Proposal and AAR updated its submission, all without the knowledge or involvement of TFP. Northwest selected AAR for the maintenance contract. TFP filed suit, alleging that its efforts caused Northwest to award the contract to AAR. The district court granted summary judgment to AAR. TFP appeals.

In their opinion, Judges Kanne, Wood and Sykes affirmed. The Court rejected each link in TFP's argument chain: a) the initial overtures between TFP and Northwest related only to a landing gear proposal and are not relevant to the maintenance contract inquiry, b) the record does not support TFP's assertion that there was a “barrier” of some sort between Northwest and AAR before its intervention, c) the record evidence does support the conclusion that Northwest rejected TFP's business model and independently awarded the maintenance contract to AAR, and d) the record does not support TFP's claims that it was responsible for Northwest's visit to AAR's facility or that the visit was relevant to the award of the contract. The Court conceded that it must construe the evidence and its inferences in TFP's favor -- but it found nothing but speculation. The Court also rejected TFP's claims that AAR's failure to complete an RFI was a breach of the contract, that AAR's intention not to fulfill its promise constituted fraud, or that it could recover in quantum meruit.

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APEX DIGITAL, INC. V. SEARS, ROEBUCK & COMPANY (July 16, 2009)

Apex brought a breach of contract claim against Sears, alleging Sears owed it in excess of $80 million. Sears moved to dismiss for a lack of subject matter jurisdiction. It asserted that Apex lacked standing because it had assigned away its rights in the Sears receivables. Sears attached to its motion a letter from Apex attesting to that fact. When Apex offered no response, the district court granted Sears' motion. Apex appeals.

In their opinion, Judges Posner, Ripple and Kanne affirmed. The plaintiff, said the Court, bears the burden of establishing standing, an essential component of any case. The Court agreed with Apex that a sufficient standing allegation is enough to overcome a facial challenge. With respect to a factual challenge, however, where the challenger accepts the sufficiency but challenges the truth of the allegation, the district court is permitted to look beyond the complaint and view any evidence submitted. Because Apex failed to proffer any evidence to rebut its own statement in the letter offered by Sears, the district court did not err in dismissing the complaint.

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GICLA v. UNITED STATES (July 15, 2009)

David Gicla fractured his right ankle in a motorcycle accident when he was 20. Twenty years later, experiencing pain and swelling, he went to the Westside VA Medical Center in Chicago for treatment. He had ankle implant surgery. Unfortunately, the surgery was not successful. More unfortunately, additional treatment and surgeries were also unsuccessful and doctors had to amputate Gicla's right leg below the knee. Gicla brought this malpractice action under the Federal Tort Claims Act. After a bench trial, the court found in favor of the United States. Gicla appeals.

In their opinion, Judges Bauer, Posner and Rovner affirmed. Gicla's principal argument was that the court should have stricken the testimony of the government's medical expert for a Rule 26 disclosure violation. The expert had testified at his deposition that he had not reviewed a series of x-rays in reaching his opinion. On the day of his testimony, however, he did review the x-rays. Gicla's counsel did not learn of that fact until the he cross-examined the expert. The Court agreed with Gicla that Rule 26 requires disclosure of any information considered by an expert in forming an opinion, and requires a party to supplement that disclosure. The Court also agreed that Rule 37 provides for the exclusion of expert testimony in the case of a disclosure violation. But the Court also noted that Rule 37 provides that exclusion is not appropriate if the failure to disclose was harmless. Here, the only real impact of the violation was that Gicla could no longer cross examine him on his failure to examine the x-rays. The court allowed Gicla's counsel a recess to reassess his cross-examination, or to contact his own expert, or to demonstrate actual prejudice to the court. The Court concluded that the lower court did not abuse its discretion when it determined that the violation was harmless. 

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MISTER v. NORTHEAST ILLINOIS COMMUTER RAILROAD CORP. (July 9, 2009)

Gary Mister, an employee of Northeast Illinois Commuter Railroad Corp. ("Metra"), was returning to his parked car on a January day in 2005 when he slipped on the ice and fell. Kirk Kroner, Metra's Safety Officer, investigated the accident. At the hospital, he discussed it with two of Mister's supervisors. According to his written report, a similar incident had occurred at the same location a week prior. At trial, the court excluded the report and all related testimony. After a jury found for Metra, Mister appealed.

In their opinion, Judges Bauer, Ripple and Wood affirmed. The Court first addressed the hearsay issue. The Court recognized the party admission exception to the hearsay rule that applies if the statement is made by a party's agent, during the period of agency, and within the subject matter of the agency. The Court found that the report met the party admission exception requirements. Here, the district court excluded the report because she found the statement inherently unreliable. Disagreeing with the district court, the Court noted that reliability was not required for the report to be an admission. Finding a party admission did not end the Court’s inquiry. Under Rule 403, a court may balance the probative value of evidence with its prejudicial effect. Here, although the report was not hearsay, it was based on multiple layers of hearsay and there was no basis to conclude that the accidents did in fact occur in the same place. The Court concluded that the lower court did not abuse its discretion in excluding the report under Rule 403.

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TRUSTEES OF THE CHICAGO PLASTERING INSTITUTE PENSION TRUST v. CORK PLASTERING COMPANY (July 1, 2009)

G&J Plastering Company is a plastering contractor in the Greater Chicago area. Between 1993 and 2002, three different labor unions represented the plastering employees of G&J, including Local 5 of the Journeymen Plasterers' Protective and Benevolent Society of Chicago. The collective bargaining agreements of each union required G&J to make contributions to various union trust funds. Local 5 required the company to contribute based on an employee’s union, regardless of where the work was performed. One of the other unions required the company to make contributions based on work location, not the employee’s union. A union election conducted in 2002 resulted in the termination of Local 5’s representation of the company. In an exit audit, the company disclosed that it had been making contributions based on union membership rather than work location and had no records showing where work was performed. Given this absence of data, Local 5 instructed its auditors to compute the amount owed based on a set of assumptions and a review of the company’s payroll records. The auditors concluded that the company owed in excess of $800,000. Local 5 filed suit. After a three-day bench trial, the court awarded $1.1 million for unpaid contributions plus interest but disallowed the union's request to recover $45,000 in audit costs. Both sides appeal.

In their opinion, Judges Bauer, Rovner and Evans affirmed. The Court considered three issues on appeal: a) the admissibility of the audit report, b) the admissibility of testimony about the report by one of the auditors, and c) the court's refusal to award audit costs. The Court first upheld the admissibility of the audit report. The report itself was not hearsay -- it was merely a summary of the company's payroll data. The assumptions the auditors applied to the data were not secret, were required because of the company's failure to keep records, and were considered by the lower court and accepted in part and rejected in part. The Court also found that the testimony in support of the report proper. The witness, although he was not a field auditor, was in regular contact with them, reviewed their work, and reviewed the final report. His testimony was not an audit opinion and he did not have to be qualified as an expert. Finally, with respect to the audit costs, the Court concluded that the lower court was within its discretion to deny the request when the union failed to provide sufficient supporting documentation (hours spent, individuals performing the work, qualifications of individuals, hourly rates, etc.).

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GERHARD VON DER RUHR v. IMMTECH INTERNATIONAL, INC. (June 30, 2009)

Gerhard Von der Ruhr founded Immtech and Septech, both medical technology companies. Immtech patented a human protein product. Septech claims it has a worldwide license and a right to purchase the product from Immtech. Septech claims that Immtech breached the agreement, resulting in lost profits. Septech offered the lay opinion testimony of Von der Ruhr that, had Immtech not breached: a) Septech would have partnered with a major, undetermined pharmaceutical company, b) the pharmaceutical company would have developed and received FDA clearance of the product at its cost, c) the product would have immediately captured half of the target market, and d) Septech would have received 5% of sales proceeds. He would have testified that Septech’s lost sales amount to $42 million. The district court did not allow the testimony and precluded the lost profits claim. Septech appeals.

Von der Ruhr had an option to purchase 24,390 shares of Immtech stock at $.34 a share, exercisable in whole or in part by May 1, 2001. He attempted to exercise the options in April of that year and sent a check in an amount equal to the number of shares times $.34. The company never issued the shares. Instead, relying on the fact that the option price was really $. 3409594, returned the check. A jury found that Immtech breached the contract and also found that three individual officers were guilty of tortious interference with the contract. The individuals appeal.

In their opinion, Judges Bauer, Flaum and Wood affirmed. With respect to the lay opinion testimony, the Court recognized that lay opinion testimony is permissible in limited situations when the witness has particularized, personal knowledge. Von der Ruhr had no such knowledge – he never entered into the kind of licensing agreement he described, he never brought a pharmaceutical to market, he never even made a profit in the business, and he had no knowledge of the market. The Court found no abuse of discretion in disallowing the testimony.

With respect to the tortious interference, the Court conceded that there was evidence to support the defendants’ assertions of innocence. However, a jury found otherwise and the Court concluded that their decision was not irrational based on other evidence -- Von der Ruhr was treated differently, they originally authorized the share transfer, only $23.40 was at stake, there was a history of tension and strife, etc.

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STEPHENS v. ERICKSON (June 30, 2009)

Lesley Stephens, an African American, has worked for the City of Chicago since 1979, except for a disability leave from 1988-1993. He has been a truck driver, an acting foreman, and an accident adjuster, all within the Department of Fleet Management. He filed a lawsuit against the City in 1997, alleging that it engaged in racially discriminatory hiring and promotion practices. Shortly after he settled the lawsuit in 2004, Stephens applied for four promotions. He was passed over each time. He again brought suit, alleging violations of § 1981 and Title VII. He claims that the City retaliated against him for his earlier lawsuit and his complaints of discrimination. The district court granted summary judgment to the City. Stephens appeals.

In their opinion, Judges Kanne, Wood and Sykes affirmed. The Court stated that it would apply the same elements to the claims under § 1981 and Title VII. Stephens chose to establish his retaliation claim under the direct method of proof. The principal issue on appeal was the causal connection between Stephens' protected activity and the City's failure to promote him. The Court set out the promotion procedure in detail – and stated that Stephens produced no evidence that any of the several employees who interviewed him for the promotions even knew of the earlier lawsuit or his prior complaints of discrimination. The Court noted that in each case, the City interviewed several applicants, rated the applicants on the same criteria, and recommended the applicant with the highest score. The Court also rejected Stephens' argument that the head of the department retaliated against him by pre-selecting his preferred candidate by choosing him for an "acting" position, leading the interviewers to a predetermined selection. Nothing in the record linked the department head to any of the interviews or any of the interviewers. The Court concluded that Stephens simply had not produced evidence sufficient to create an inference of retaliation. The Court also concluded that the retaliation allegations other than failure to promote (menial job assignments, intimidation, segregation, etc.) would not dissuade a reasonable employee from making a charge of discrimination and were therefore not "materially adverse" and actionable.

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CUNNINGHAM v. MASTERWEAR CORP. (June 23, 2009
 

The Cunninghams owned a building in Martinsville, Indiana in which they operated a photographic studio from 1986 until 2004. The building next door contained a dry cleaning establishment. Soon after the Cunninghams made the building their residence, they both began to experience headaches and other physical maladies. They moved out as soon as the EPA advised them that high levels of perchloroethylene (PCE), a chemical used in dry cleaning, in their home posed a potential health risk. The Cunninghams brought an action for common law nuisance, seeking damages for both their physical injuries and their loss of property value. The court disqualified their only medical expert and barred them from testifying regarding appraisals of their property. The court then granted summary judgment to the defendant. The Cunninghams appeal.

In their opinion, Judges Posner, Manion and Kanne affirmed. Although the expert had concluded that all of the Cunningham’s symptoms were caused by exposure to PCE, the Court noted that he was not a toxicologist, and he presented no scientific theory that linked the Cunningham’s exposure level to their symptoms. The Court concluded, therefore, he presented no evidence upon which a trier of fact could rely to conclude that the exposure was the cause of the ailments. With respect to the valuation of the property, the Court stated that a property owner can testify about the value of his property if he is an expert on property values or if he has personal knowledge. Cunningham simply wanted to repeat others’ assessments of the property’s value. The Court concluded that the testimony was properly disallowed as hearsay. The Court added that, even if the testimony was allowed, there was no evidence regarding the cause of any loss in value. Since the Cunningham’s were entitled only to the loss of value that could be fairly attributed to the PCE, as opposed to market forces or otherwise, they could not have prevailed even with the testimony.

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MUHA v. ENCORE RECEIVABLE MANAGEMENT, INC. (March 10, 2009)

Charlotte Muha, representing a class of credit card debtors, brought an action under the Fair Debt Collection Practices Act ("FDCPA") against Encore Receivable Management, Inc. The complaint alleged that Encore violated the FDCPA by stating, in a debt collection letter, that "your original agreement with the above mentioned creditor has been revoked." Plaintiffs allege that that statement is false. The plaintiffs also claim that the statement is misleading and confusing and sought to introduce a survey to support that allegation. The lower court excluded the survey and granted summary judgment to Encore. Plaintiffs appeal.

In their opinion, Judges Posner, Kanne and Tinder affirmed in part, reversed in part and remanded. The Court first upheld the lower court's exclusion of the survey. It concluded that the survey was improper both because the questions and answers were leading and because there was no control group that was shown the letter without the language in question. Notwithstanding the exclusion of the survey (and notwithstanding the admission at oral argument that plaintiffs could not prove damages without the survey), the Court held that plaintiffs could be entitled to statutory damages. The plaintiffs have the burden of proving that the statement was misleading. Although a survey may be the best evidence of that, is not the only potential evidence. The recipients of the letter itself may testify, allowing the judge to infer that the letter is misleading within the meaning of the FDCPA. The Court then addressed the merits of the falsity argument. The issue, it stated, was not the falsity of the statement. The Court concluded that the statement obviously meant that the credit card privileges of the recipient have been revoked. Nevertheless, the plaintiffs are entitled to attempt to prove that the statement is misleading. The Court found that the statement was confusing and noted that confusing language can have an intimidating effect on an unsophisticated consumer. It did not think the evidence was so clear on that point so as to entitle the plaintiff to summary judgment, however. It reversed and remanded for further proceedings. 

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GREENE v. POTTER (March 5, 2009)

Mary Alice Greene worked for the post office. She worked five days a week and was allowed to volunteer for overtime on her days off. Each quarter, the post office generated a list of employees who wanted overtime. The assignments were supposed to rotate according to seniority, but the post office was not required to schedule an employee for more than one overtime shift a week. Greene’s off days were Sunday and one weekday. She always requested overtime on both of her off days, although she preferred Sunday overtime. During a two-year period, Greene was offered 22 overtime shifts, only five of which were Sundays. Greene brought an action against the post office for gender discrimination. She claimed that her supervisor favored his male friends to the detriment of the female employees in scheduling the more desirable Sunday overtime. During Greene's case-in-chief, the court granted the post office's motion for judgment as a matter of law. Greene appeals.

In their opinion, Judges Bauer, Ripple and Evans affirmed. The Court first addressed Greene's argument that the entry of judgment in the middle of her case-in-chief was improper. The Court noted that FRCP 50 allows a court to grant a motion for judgment as a matter of law once "a party has been fully heard." The Court recognized that the common practice may be to wait until a party has concluded its case-in-chief. Nevertheless, it concluded that it is proper to enter judgment prior to the close of the plaintiff's case if it has become apparent that the plaintiff cannot prove her case. Here, on the merits, Greene relied on the indirect method of proving illegal discrimination. The Court assumed, for purposes of the appeal, that Greene could have satisfied the elements of the indirect method. It proceeded to address whether Greene presented a genuine issue regarding the post office’s reason for its actions. In order to prevail, Greene had to show that the post office reasons were a pretext for gender discrimination. Greene presented evidence that her supervisor did not schedule overtime according to the post office's policies. The evidence in fact demonstrated that the supervisor manipulated the system to benefit a few of his friends. Greene’s evidence showed conclusively that there was a nondiscriminatory reason for her supervisor's decisions. Since her own evidence that was submitted and that she planned to submit actually defeated her claim, the court acted properly in entering judgment as a matter of law during her case-in-chief.
 

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SOLIS V. CURRENT DEVELOPMENT CORP. (March 5, 2009)

George Klein is the president and sole shareholder of Current Development Corporation (CDC). CDC sponsored two employee benefit plans. The Department of Labor objected to the way Klein ran the plans and filed suit in District Court. In a settlement by consent order, Klein agreed to terminate both plans and distribute their assets -- a vacant parcel of land and almost $900,000 in cash. Klein allowed the plan participants to choose to take their shares in cash or in an ownership interest in the property. Almost everyone selected the cash option. Klein and his wife, themselves plan participants, were left with a 97% interest in the land. While Klein was winding up the plans, unbeknownst to the participants, he was negotiating the sale of the property. He used a property value of $1.7 million in calculating the participants' shares, even though he had already rejected a $2.3 million purchase offer. The Department of Labor found out about these negotiations and returned to court. The court concluded that Klein had breached his duty of loyalty to the participants and removed him as trustee. The court also appointed an independent fiduciary, who soon sold the property for $2.6 million. The independent fiduciary concluded, after a review of CDC's books and records, that Klein owed the plan another $170,000. The court ordered Klein to repay the money, with prejudgment interest. The independent fiduciary then calculated the final asset distribution figures, which the court adopted. Klein appeals.

In their opinion, Judges Bauer, Rovner and Evans dismissed in part and affirmed in part. The Court first addressed the jurisdictional issue. Klein filed two notices of appeal -- one after the court's denial of his motion to reconsider the order of prejudgment interest, and one after the court’s final payment determination. The Court noted that the consent decree itself was a final order. All orders after that were post-judgment orders. The Court compared a post-judgment proceeding to a freestanding lawsuit. In determining its scope of appeal, an appellate court will look for the nature of the proceeding and a final determination of the issues. Here, the Department of Labor began the proceedings when it filed its motion seeking Klein's removal as trustee and disgorgement of his gains. Thus, the proceeding was not final until both those issues were decided. The Court concluded that the post-judgment proceedings were final upon the court's determination of the distribution amounts. Since Klein filed a timely notice of appeal from that decision, the Court concluded that it had appellate jurisdiction of the matters presented during the proceedings. The Court dismissed Klein’s first appeal. The Court then addressed the standard of proof. Klein attempted to characterize the proceeding as one for civil contempt – with an accompanying clear and convincing standard of proof. The Court rejected that conclusion, holding that the proceeding was merely one for violation of the consent order. On the merits, the Court had little difficulty dismissing Klein's arguments: a) he waived his right to evidentiary hearing, b.) he should have disclosed the ongoing negotiations for the sale of the property to the plan's participants, c.) the court authorized the investigation into his operation of the plan, and d) the lower court's order for Klein to return money he took from the plan's assets in violation of ERISA and the final determination order were not clearly erroneous.

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WISCONSIN ELECTRIC POWER COMPANY v. UNION PACIFIC RAILROAD COMPANY (March 2, 2009)

Wisconsin Electric Power Company (WEPCO) and the Union Pacific Railroad Company (UP) entered into a contract for the transportation of coal from Colorado coal mines to WEPCO during the years 1999 -- 2005. The rate that UP could charge WEPCO depended on whether UP was able to reload its empty railcars with shipments of iron ore destined for a steel mill in Utah. The contract provided that UP could charge the higher rate if "an event of force majeure" prevented it from reloading its rail cars with iron ore. The steel mill was bankrupt when the parties entered into the agreement, though still operating. It shut down in 2001, but did not close for good until 2004. UP declared an "event of force majeure" after the mill’s final closure in 2004. WEPCO sued UP for breach of contract, alleging that it was not liable for the higher rate under the contract and that UP failed to perform its contractual obligation to ship requested tonnage to WEPCO. The District Court granted summary judgment to UP. WEPCO appeals

In their opinion, Judges Posner, Ripple and Rovner affirmed. The Court first rejected WEPCO’s argument that UP waived its rights by not providing the “prompt notice” required by the contract. UP did not assert its rights upon the plant’s first closing. But the contract included a “no waiver” clause, which provided that a party did not waive a right by not insisting upon it. A no-waiver clause can itself be waived, said the Court, but only with clear and convincing evidence. Such evidence was not present in the case. The Court also noted the lack of any evidence that WEPCO was harmed by the late notice. There was no dispute over the existence of the plant’s closing and WEPCO presented no evidence that it could have developed less expensive alternatives had it been put on notice. The Court even noted that WEPCO saved $7 million due to UP’s decision not to give notice of force majeure in 2001.

The Court also rejected WEPCO’s claim that UP’s failure to ship 100% of its requested tonnage was a breach of the agreement. The contract required UP to make “good faith reasonable efforts” to meet WEPCO’s demand. The Court concluded that UP’s decision to ship to other customers, even ones who might be paying more for the shipments, did not constitute a lack of good faith. A lack of good faith requires evidence of lack of diligence, a willful failure to perform, abuse of power, or interference with performance – none of which were presented here.
 

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SECURITIES AND EXCHANGE COMM. v. KOENIG (February 26, 2009)

James Koenig was the Chief Financial Officer of Waste Management, Inc. In the early 1990s, after years of acceptable growth, the company’s financial performance began to suffer. Koenig devised several accounting strategies that made the company appear more profitable than it was. Koenig resigned in January of 1997. In October of 1997, the company disclosed in a press release that its financial statements were inaccurate and unreliable. The SEC filed a complaint against Koenig in March of 2002. At trial, the jury found that his accounting strategies were fraudulent. The court imposed a $2.1 million civil penalty, ordered the disgorgement of almost $1 million in bonuses, imposed $1.2 million in pretax interest, and enjoined Koenig from serving as a director of a public company. Koenig appeals.

In their opinion, Chief Judge Easterbrook and Judges Manion and Wood affirmed in part, reversed in part and remanded. The Court first addressed Koenig's statute of limitations argument. Although recognizing that the statute is five years and that more than five years passed between Koenig's resignation and the filing of the complaint, the Court rejected Koenig's argument. Instead, the Court noted that there has long been a special rule for statutes of limitations in fraud cases. A victim of fraud has the full statutory time to file, beginning from the date the wrong came to light or would have with due diligence. Since Koenig's accounting misdeeds were not public until the company issued its press release and Koenig never claimed that the SEC could have known earlier, the complaint was timely. The Court then addressed several trial management objections. It concluded that the lower court did not err in allowing the SEC to put on evidence of the motives of the company's new management. Although originally denying the SEC's motion in limine, the lower court admitted motive evidence after Koenig "opened the door." The court had warned Koenig that it would allow the evidence if Koenig made motive at issue. Second, the Court approved of the trial court’s practice of allowing the jurors to submit questions for witnesses and found no abuse of discretion. Third, the Court found no violation of the discovery or notice rules in the SEC's calling as its witness Koenig’s own expert, whom he did not call. Koenig also complains that the $2.1 million penalty was greater than allowed by the statute. The statute limits a penalty to no greater than the greater of $100,000 or the defendant’s pecuniary gain. The court included pre-judgment interest in its calculation of pecuniary gain. The Court approved of this formula. It held that pecuniary gain is the amount the defendant obtained as a result of his fraudulent accounting practices plus any return he could have made by investing that sum, until its disgorgement. The Court did disagree with the district court's computation of Koenig's bonuses. The company awards bonuses based on increases in the company's earnings over the prior year. Based upon the testimony of the SEC's expert, the Court concluded that the company’s corrected earnings increased from 1991 - 1992. The Court remanded for a recalculation of Koenig’s bonuses and, if necessary, a recalculation of the penalties.

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LINDQUIST FORD v. MIDDLETON MOTORS (February 25, 2009)

The Hudson brothers owned and operated Middleton Motors, Inc. (“Middleton”), a Ford dealership. The company was experiencing significant financial difficulties and sought assistance from Lindquist Ford, a dealership in a neighboring state. They discussed the possibility that Craig Miller, Lindquist’s manager, could help manage the operation. They also discussed the possibility of a cash infusion from Lindquist. In April 2003, the parties agreed that Miller would begin working at Middleton on a part-time basis and, in fact, he began working at Middleton on April 21. The parties had not yet reached an agreement although there was an understanding that Miller’s compensation would be based on net profits. Further discussions continued regarding a cash infusion by Lindquist and an understanding of Miller’s compensation but an agreement was never reached. Middleton fired Miller almost a year after he started – without any compensation having been paid or any cash infusion by Lindquist. Lindquist brought an action for quantum meruit and unjust enrichment. After a bench trial, the court found for Lindquist on both counts and awarded $152,332 in damages. Middleton appeals.

In their opinion, Chief Judge Easterbrook and Judges Sykes and Tinder reversed and remanded. The Court first noted some confusion in Wisconsin case law on unjust enrichment and quantum meruit and reviewed the fundamentals of the claims. Both quantum meruit and unjust enrichment are quasi-contractual remedies applicable only when there is no enforceable contract. Both are governed by equitable principles in Wisconsin. The elements of unjust enrichment are: a) a benefit to the defendant by the plaintiff, b) appreciation by the defendant of the benefit, and c) retention of the benefit where it would be inequitable to retain it without payment. The measure of damages is the value of the benefit. Quantum meruit, on the other hand, does not require a benefit to be conferred on the defendant and damages are determined by the reasonable value of plaintiff’s services. Its elements are: a) proof that the defendant asked for the services of plaintiff, and b) proof that plaintiff reasonably expected compensation. The Court also discussed the Wisconsin case law regarding implied-in-fact contracts, which are different from quantum meruit and unjust enrichment, because it believed the trial court’s confusion stemmed from it. With respect to the quantum meruit claim, the Court concluded that the district court improperly relied on Wisconsin implied-in-fact contract principles. For example, the court excluded evidence of the contract negotiations, deeming them irrelevant because it was not a contract case. The Court disagreed, holding that, although not a contract case, evidence of the negotiations was relevant to the reasonable expectations of the plaintiff. With respect to the unjust enrichment claim, the lower court did properly identify the elements of the claim but the Court determined that it misapplied the equity element. The lower court looked only at the fact that Miller worked for eleven months without pay. The Court concluded that the inquiry should be much broader – the parties had significant negotiations about their expectations for Miller’s compensation and the need for a cash infusion. Again, much of the relevant evidence was disallowed by the court.

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GOLDEN YEARS HOMESTEAD v. BUCKLAND (February 19, 2009)

Golden Years Homestead, Inc. (“Golden Years”) operates a nursing facility in Fort Wayne, Indiana. In early 2000, the Indiana Department of Health (“IDH”) conducted an annual certification inspection, as required by Golden Years’ participation in the Medicaid program. The inspection took place over a span of ten days. At some point during the inspection, the inspection team became upset with the conduct of the Golden Years’ team. From then on, the inspection team became loud, overly critical, hostile and accusatory. The team left information favorable to Golden Years out of its report. Golden Years was cited for seventeen violations. After a six-day evidentiary hearing and administrative appeals, all but one of the citations was reversed. Golden Years brought a lawsuit against the inspectors under 42 U.S.C. § 1983 for constitutional violations and state law claims for abuse of process and malicious prosecution. The district court granted summary judgment for the inspectors. Golden Years appeals the dismissal of the state law claims.

In their opinion, Judges Bauer, Rovner and Sykes affirmed. The Court first addressed Golden Years’s complaint that the court dismissed the state law claims sua sponte. The Court disagreed. Although the inspectors did not specifically address the state law issues in their motion, they did ask for all counts to be dismissed. Furthermore, Golden Years actually addressed the state law counts in its response. The lower court acknowledged the general rule that a court will decline to exercise jurisdiction over state law claims if all federal claims are dismissed before trial. The Court approved the lower court’s invocation of the exception to the rule when the state law claims are meritless. On the substance of the malicious prosecution claim, the Court stated that Golden Years was required to prove malice. Although it seemed to accept that the inspectors’ conduct was overzealous and unprofessional, the Court concluded that the evidence did not support personal animosity or malice. Similarly, the Court concluded that the evidence of hostility and rancor was insufficient to establish the ulterior motive requirement for abuse of process.

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SCHMUDE v. TRICAM INDUSTRIES, INC. (February 17, 2009)

Kevin Schmude, a 350-pound man, was working on a construction project. He climbed an 8-foot ladder manufactured by Tricam Industries, Inc. (Tricam) to in order to inspect electrical connections in the space above a ceiling. He and the ladder collapsed onto the floor. One of the rivets designed to secure the rear leg was found on the floor. The leg itself had separated from the ladder. A jury found for Schmude and awarded $677,000 in damages. Tricam appeals.

In their opinion, Judges Posner, Ripple and Rovner affirmed. The Court first summarily rejected Tricam’s arguments concerning a minor discrepancy between plaintiff’s expert’s report and testimony and the expert’s demonstration using the ladder. The Court gave greater consideration to Tricam’s objection to the limitations the trial court put on its ability to impeach Schmude with evidence of a prior conviction. Schmude had been convicted in 1995 of the sale, by a felon, of firearms without a license. F.R.E. 609(b) allows evidence of the conviction of a felony more than ten years old for impeachment purposes only when the probative value outweighs the possible prejudice. The trial court ruled that Tricam could impeach Schmude with evidence of the conviction, but would not allow evidence that the felony was actually predicated on yet another, earlier felony. The Court appreciated the significance of the issue – Schmude’s testimony was the only direct evidence of the cause of the fall and the extent of his pain. The Court also appreciated the trial court’s dilemma – without approaching the issue the way he did, the jury would either hear evidence that Schmude had been convicted of two felonies or would hear no evidence of a conviction. The Court concluded that the trial judge made a reasonable choice under the circumstances. Finally, the Court also upheld the trial court’s refusal to allow Tricam to put on certain evidence of Schmude’s anti-social personality. The Court agreed that the evidence in question had no probative value and would have been extremely prejudicial to Schmude.

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FRIENDS OF MILWAUKEE’S RIVERS v. MILWAUKEE METROPOLITAN SEWERAGE DISTRICT (February 13, 2009)

Friends of Milwaukee’s Rivers (“FMR”) filed a citizen suit under the Clean Water Act (“CWA”) against the Milwaukee Metropolitan Sewerage District (“MMSD”). FMR alleged that MMSD sewer overflows violated the CWA and MMSD’s permit. Wisconsin sued the MMSD the very same day. MMSD and Wisconsin settled their case soon thereafter. The settlement provided that MMSD would spend over $900 million in upgrades to its sewer system. On MMSD’s motion, the court dismissed FMR’s suit on two bases: the CWA itself and res judicata. On appeal, the Seventh Circuit reversed and remanded. The Court held that the CWA did not bar the suit because FMR filed first. With respect to res judicata, the Court held that the privity requirement depended on whether the settlement constituted “diligent prosecution,” defined as whether it was “calculated to result in compliance.” The Court remanded to the district court for that determination. After an evidentiary hearing and briefing, the district court found for the MMSD and dismissed the complaint on res judicata grounds. FMR appeals.

In their opinion, Judges Bauer, Cudahy and Wood affirmed. FMR’s main argument on appeal was that the lower court failed to give adequate weight to post-settlement evidence. Principally, FMR argued that massive sewer overflows in 2004 were evidence that the 2002 settlement terms did not result in compliance. The Court first looked at the “central” evidence – i.e., the evidence that existed at the time of the settlement. When the parties act in good faith and address all the known problems and foreseeable consequences, diligent prosecution exists without regard to later events. Turning its attention to post-settlement evidence, the Court found little authority and identified several problems with the consideration of post-settlement evidence. However, it also recognized that post-settlement evidence could be particularly probative of the adequacy of an agreement. The Court rejected the notion that it was wholly irrelevant, but refused to identify any bright-line test for its use. The admissibility and weight of post-settlement evidence will depend on the circumstances of a case. The Court determined that the district court did give adequate consideration to the post-settlement overflows. The district court merely believed the evidence presented by the MMSD that the overflows would not have been violations and that the settlement improvements would have prevented the overflows. The Court also determined that the lower court gave adequate consideration to the post-settlement enforcement activities of Wisconsin.

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GILES v. WYETH, INC. (February 12, 2009)

Coal miner Jeff Giles suffered a serious neck injury in the 1990s, which continued to cause him pain and limited his mobility for years. In 2002, the mine laid him off. Soon after, he had neck surgery, from which he failed to heal properly. Then, the mine announced its permanent closure. In late 2002, Giles’ doctor diagnosed him as having major depression. He prescribed Effexor, made by Wyeth, Inc. After taking Effexor for two days, Giles committed suicide. Effexor did contain a warning at the time. It recommended close supervision, “good patient management,” and the smallest dosage. In the following years, both Wyeth and the FDA learned more about a potential relationship between antidepressants and an increase in suicidal thinking in teens and adolescents. The FDA required stronger warnings of suicide risks in young people, eventually including persons up to the age of twenty-five. Giles’ widow brought a wrongful death action against Wyeth. The court granted a Wyeth motion in limine and excluded evidence of post-2002 suicide warnings. A jury found for Wyeth. Jacquelyn Giles appeals.

In their opinion, Judges Manion, Rovner and Williams affirmed. First, the Court resolved a dispute between Giles and Wyeth as to the basis for the district court’s ruling on the exclusion of the warnings. After reviewing the pre-trial and trial record, the Court concluded that the judge relied on Rule 403, weighing the evidence’s probative value against the danger of confusion, and not Rule 407. In analyzing the application of Rule 403 to the evidence, the Court determined that the court below did not abuse its discretion. Several factors contributed to that finding: a) the warnings applied only to children, adolescents, and, to some degree, adults under the age of twenty-five (Jeff Giles was forty-six at the time of his death), b) the warnings actually disclaimed increased risk of suicide in adults, c) the 2002 warnings already addressed the general risk of suicide, and d) there is no evidence that the later warnings were based on information that Wyeth knew or should have known in 2002. Finally, the Court rejected Giles’ argument that the lower court should not have admitted post-2002 scientific evidence, particularly in light of its ruling to exclude the later warnings. The Court distinguished between the probative value of the two based on the issue in the case – whether Effexor caused Giles to commit suicide. The later warnings are not relevant to that determination; the later scientific evidence is.

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HASAN v. FOLEY & LARDNER (December 15, 2008)

Zafar Hasan is a Muslim of Indian descent. In 2000, he joined the law firm of Foley & Lardner (“Foley”) as an associate. (The following are facts construed in a light most favorable to Hasan.) During his first year at the firm, he received mostly positive reviews and maintained high billable hours. The events of September 11, 2001 changed Hasan’s standing in the firm. Hasan’s billable hours dropped considerably and he received much less positive reviews. At a meeting in October of 2002, Foley decided to fire Hasan. The firm notified Hasan in December that he was being terminated. He filed suit in 2004, alleging that Foley violated Title VII of the Civil Rights Act. The district court granted Foley’s motion for summary judgment. Hasan appeals.

In their opinion, Judges Coffey, Ripple and Manion reversed and remanded. The Court noted that Hasan proceeded under the “direct method” of proving discrimination. Under the direct method, a plaintiff must present evidence, direct or circumstantial, that points to a discriminatory reason for the action of the employer. Courts accept three types of circumstantial evidence in a direct method case. Hasan relies on two types: a) suspicious timing, ambiguous statements, or comments directed at others in the same group, and b) evidence that the employer’s stated reasons for its conduct is not worthy of belief. Hasan’s evidence included: a partner’s anti-Muslim comments, suspicious timing in Hasan’s downturn in billable hours, the financial health of the firm, Foley’s treatment of other Muslim associates, and a changing justification for Foley’s conduct once it located Hasan’s performance reviews. The Court disagreed with the district court’s treatment of some of the evidence. It concluded, for example, that: a) evidence of an anti-Muslim comment by a partner who was not Hasan’s supervisor was valid nonetheless because the partner attended the meeting at which Foley decided to terminate Hasan (and, in fact, may have instigated the decision), b) evidence of an anti-Muslim remark made a year before the decision to terminate may nonetheless be valid circumstantial evidence when it was made at about the time when Foley began to assign work elsewhere, which in turn became a stated reason for his termination, and c) evidence regarding Foley’s treatment of other Muslims is not per se irrelevant but may be relevant depending on how closely tied it is to Hasan’s circumstances. The Court rejected Foley’s argument that Hasan failed to produce evidence of its treatment of similarly situated employees. The direct method of proof does not require such evidence. Finally, the Court noted that Foley initially claimed that it fired Hasan for poor performance but changed its stance when early, positive performance reviews were discovered and produced. They then claimed that Hasan was fired because the firm did not have enough work to keep all associates busy. The Court held that a reasonable jury could have believed both reasons to be pretext. The Court held that the totality of the evidence and possible inferences precluded summary judgment for Foley and remanded to the district court.

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BOIM v. HOLY LAND FOUNDATION FOR RELIEF AND DEVELOPMENT (December 3, 2008)

David Boim was a Jewish teenager living in Israel. He had dual Israeli/American citizenship. In 1996, he was killed by gunfire near Jerusalem. Boim’s parents brought suit under 18 U.S.C. § 2333(a). They alleged that defendants Muhammad Salah, Holy Land Foundation for Relief and Development (“HLF”), the American Muslim Society (“AMS”) and the Quranic Literacy Institute (“QLI”) all provided financial support to Hamas and that their son had been killed by Hamas gunmen. The district court rejected the argument that financial assistance was not international terrorism under § 2333(a) in denying defendants’ motion to dismiss. On an interlocutory appeal, the Seventh Circuit affirmed. The district court granted summary judgment on liability to plaintiffs with respect to Salah, HLF and AMS. A jury found QLI liable and assessed damages against all defendants of $52 million before trebling. On appeal, a Seventh Circuit panel vacated and remanded to redetermine liability. The plaintiffs petitioned for rehearing en banc, which was granted.

In their opinion, the Court affirmed in part, reversed in part and remanded. The Court first addressed whether the statute even applies to defendants who are alleged only to have provided financial support to those engaged in terrorism. The statute does not specifically mention secondary liability and the Supreme Court in Central Bank of Denver held that a statute that did not mention secondary liability did not create secondary liability. Instead of resolving that issue directly, however, the Court explored an alternative approach. It parsed the language of sections 2331, 2332, 2333 and 2339. Section 2333 creates a cause of action for a person injured “by reason of an act of international terrorism.” Section 2331 includes in the definition of international terrorism “acts dangerous to human life” that violate the U.S. criminal law. The Court concluded that financial assistance to Hamas is an “act dangerous to human life” and violates section 2339. Section 2339 was enacted in 1994 and makes it a crime to provide “material support” knowing that it could be used in carrying out a violation of section 2332. Section 2332 criminalizes the killing of an American citizen outside the U.S. The Court followed this chain to determine that a mere financial contribution to a terrorist organization could violate section 2333. Having determined that the defendants could be liable, the Court proceeded to examine the cause of action and its elements. On the element of intent, the Court held that the defendants must either have known or been deliberately indifferent to whether the organization they funded committed terrorist acts. Given the extreme conduct of the terrorist groups, the Court concluded that it was enough to know the character of the organization. With respect to causation, the Court held that the knowing contributors could not avoid liability on causation because, as a whole, they significantly increased the possibility that Boim would be a target of a Hamas terrorist act.

Applying these principles to the facts of the case, the Court addressed each defendant’s liability. It reversed with respect to HLF. The district court had erroneously applied principles of collateral estoppel from earlier litigation to the liability of HLF. The Court remanded for an analysis of HLF’s liability in light of its opinion. The Court reversed outright the findings as against Salah. Salah had been in custody during the period between the enactment of section 2339(a) and the shooting of Boim and could not have provided material support to Hamas during that time. The Court affirmed the findings as against defendants AMS and QLI. It found sufficient evidence that AMS knew that Hamas was a terrorist organization and that it provided material support to Hamas. QLI had elected not to participate in its trial and therefore could not object to the jury instructions or findings.

Finally, the Court addressed the lower court’s determination that the men who killed Boim were members of Hamas. The principle evidence on that point was the affidavit of an expert witness, Dr. Paz. Paz, an expert on terrorism, based his conclusion on terrorist internet sites, notes from a U.S. foreign service officer, and an Islamic-language document purporting to reflect the conviction of one of the murderers. The Court conceded that much of the evidence on which Paz relied was inadmissible. Noting that experts are not limited to admissible evidence in forming their opinions, the Court concluded that the type of evidence on which Paz relied is relied on by security and terrorism experts generally. The Court also noted that the defendants did not introduce any evidence to the contrary. The Court found no error in the lower court’s consideration of the affidavit.

Judge Rovner wrote separately, concurring in part and dissenting in part. Judge Rovner took principal exception to the majority’s conclusions with respect to causation and the Paz affidavit. She believed that the majority practically eliminated a causation requirement. She would have at least required expert testimony regarding the financial structure of Hamas and the various organizations it controlled. With respect to Paz, she criticized the majority for not only allowing the affidavit based on unproven evidence but for allowing it to support summary judgment. She noted that the defendants are not required to rebut factual propositions on which plaintiff has the burden of proof and has not properly supported. Judge Rovner would remand with respect to all defendants.

Judge Wood also wrote separately, concurring in part and dissenting in part. Judge Wood principally criticized the majority for its treatment of causation with respect to AMS and QLI. She concedes that “but-for” causation is sometimes not necessary, but she noted that the majority also eliminated the requirement for “sufficient” cause and apparently put little limitation on the remoteness of liability. Judge Wood would require at least proof that AMS and QLI contributed a “non-trivial” sum of money to an organization that was sufficiently connected to Hamas that the money indirectly supported Hamas’ terrorist mission. She also would impose a proximate cause limitation on the acts of the defendants, which the majority did not do. Judge Wood also disagreed with the majority’s statements on the scope of liability under the statute, calling it “awfully vague.” Finally, she disagreed with the treatment of the Paz affidavit and would remand to allow plaintiffs to meet the threshold requirements of Rule 702.

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