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

TABATABAI v. WEST COAST LIFE INSURANCE COMPANY (December 16, 2011)

Firouzeh Keshmiri submitted an application for a $500,000 life insurance policy to West Coast Life Insurance Company in 2006. She chose the "Super Preferred" classification and submitted her first $100 payment. She also signed a conditional receipt agreement, which provided that the insurance would not become effective until all tests were completed and would not be effective unless approved within 90 days. Keshmiri submitted to blood and urine tests. Her test results indicated that her cholesterol level was high as was her red blood cell count. West Coast asked its broker to request a second urine specimen. Before it did so,Keshmiri was diagnosed with a brain tumor and had surgery. As a result of the brain surgery, West Coast found her uninsurable. She died about a year later. Her husband, Habibollah Tabatabai, filed suit for breach of contract and breach of implied duty of good faith and fair dealing. His theory was that West Coast's delay in requesting the second urine specimen was the only reason Keshmiri was unable to complete the insurance application. Judge Stadtmueller (E.D. Wis.) granted summary judgment to West Coast. Tabatabai appeals.

In their opinion, Seventh Circuit Judges Bauer, Rovner, and Williams affirmed. The Court first addressed the doctrine of prevention. Under that doctrine, a failure to perform is excused if the other party to the contract hinders or prevents performance. Tabatabai argues that his wife would have completed performance of the condition under the insurance contract but for the actions of West Coast and that therefore they should be barred from relying on her failure to perform. But here, West Coast acted in good faith. The record contains evidence of several attempts to advise Keshmiri of the second test requirement. Without evidence of purposeful misconduct, the doctrine of prevention does not apply. The Court noted that there was an alternate ground for denying her application anyway. Her cholesterol level did not qualify for the "Super Preferred" classification. As for the duty of good faith and fair dealing, the Court pointed out that it exists only in contractual relationships. Here, no contract was ever formed because of Keshmiri's failure to submit the second urine specimen and because of her cholesterol test results.  

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BACKES v. VILLAGE OF PEORIA HEIGHTS (November 10, 2011)

David Backes is a veteran of the Persian Gulf War and suffers from post-traumatic stress disorder. In late 2006, he lived with his wife in East Peoria, Illinois. At the time, he was taking a number of medications. He also kept two shotguns at home. On the night of October 17, he and his wife argued. He left home and drove aimlessly. He called his wife on a number of occasions and at least one of them suggested that he might commit suicide. Eventually, he decided against it, parked his car in a park, took a sleeping pill, and fell asleep in the car. In the meantime, his wife had notified the police of the situation. The police dispatcher reported that Backes was suicidal, medicated, and had access to weapons. The Peoria Heights Police Department located his vehicle about 2:00 a.m.. Various officers kept surveillance over the vehicle for several hours at a safe distance. They saw that the drivers window was down and that Backes was mostly motionless in the driver’s seat. Fearing for his safety as well as that of others, the Peoria Heights Police Chief contacted the Central Illinois Emergency Response Team. Members of the team arrived at the site and formulated a plan to bring an end to the situation. They shot pepper balls into the car and immediately removed Backes and took him to a nearby hospital. Backes and his wife brought an excessive force complaint pursuant to § 1983, as well as state law claims for battery, against the Police Chief and the Village. Magistrate Judge Gorman (C.D. Ill.) granted summary judgment to the defendants. The Backes appeal.

In their opinion, Seventh Circuit Judges Bauer, Manion, and Kanne affirmed. In order to be liable for a § 1983 suit, a defendant must have been personally responsible for the allegedly unconstitutional behavior. A supervisor's direct participation is not required if he approves of the unconstitutional conduct. The conduct the Backes complain of, however, was carried out by the members of the emergency response team. The Police Chief was not involved in any way. The fact that he may have been consulted, and may have agreed with the proposed course of action, does not change the outcome. The Court turned to the state law battery claims asserted against both the Police Chief and the Village. Again, the Court concluded that the Police Chief's involvement in the operation was not enough to make him, or, in turn, the Village, liable for any battery.

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HUTCHINS v. CLARKE (October 24, 2011)

On May 17, 2007, callers to a popular Milwaukee radio call-in show were discussing the performance of Milwaukee County Sheriff David Clarke, and particularly his relationship with African-Americans. Deputy Sheriff David Hutchins criticized Clarke during his call. In response, Sheriff Clarke called the show and was critical of Hutchins. Specifically, he suggested that Hutchins held a grudge because Clarke had disciplined Hutchins years earlier for sexual harassment. Hutchins brought suit pursuant to § 1983, alleging that Clarke violated his First Amendment rights by retaliating against him. He also brought claims under Wisconsin's Open Records Law and Right of Privacy statute. Magistrate Judge Callahan (E.D. Wis.) granted summary judgment to Hutchins. Clarke appeals.

In their opinion, Seventh Circuit Judges Bauer, Flaum, and Williams (concurring) reversed. The Court first summarily disposed of the state Open Records Law claim. That law deals with access to government records and limits access to government employees' disciplinary records. Although this case is about a disciplinary record, there was no request for access to that record -- the law simply does not apply. The Court turned to the Right of Privacy statute. The statute creates a right of action for "invasion of privacy." But it explicitly excludes from its definition the communication of any information that is a matter of public record. The Court disagreed with the magistrate's conclusion that Hutchins’ disciplinary record was not a matter of public record. The district court never engaged in the balancing test required by the Open Records Law to determine whether the record is a public record. Since the balancing test is a matter of law, the Court engaged in its own analysis. Although it found factors in favor of both privacy and disclosure, it concluded that the public interest in disclosure was not outweighed by the interest in keeping it private. Thus, Hutchins’ disciplinary record should be considered a matter of public record and his Right of Privacy claim fails. Finally, the Court turned to the only federal claim, the First Amendment retaliation claim. One of the elements of the claim is that there be some retaliatory action, although it need not rise to the level of an adverse employment action. It must be enough of an action, however, to chill further speech. Here, the retaliatory action is itself speech, which also must be afforded some protection. The Court looked to other circuits and district courts within its circuit and agreed that for such speech to be retaliatory, it must be threatening, harassing, or intimidating. Concluding that Sheriff Clarke's speech was not, the Court reversed the First Amendment retaliation claim.

Judge Williams wrote separately, concurring in the opinion and expressing her views on the panel's disposition of the First Amendment retaliation claim. Judge Williams emphasized the Court's precedent that retaliatory speech that is likely to deter a person for exercising First Amendment rights may be actionable, even if not threatening, harassing, or intimidating.

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MARCAVAGE v. CITY OF CHICAGO (October 4, 2011)

In July of 2006, Chicago played host to the seventh annual Gay Games, which consisted of a number of athletic and cultural events over several days. A number of volunteers from Repent America, a Christian ministry, appeared at various Gay Game venues to share their particular message about homosexuality. On July 15, the volunteers demonstrated around Soldier Field, where the opening ceremonies were taking place. A Chicago police officer directed the group off a public sidewalk and onto an adjacent gravel field. On July 16, volunteers arrived at Navy Pier for a similar demonstration. Again, Chicago police officers directed the group away from Navy Pier and the adjacent Gateway Park because they did not have a permit. A few volunteers were ultimately arrested. On July 22, one of the volunteers paced back and forth on the sidewalk outside of Wrigley Field, where the closing ceremonies were taking place. A Chicago police officer arrested him when he refused to stop his demonstration and "keep walking." The Repent America volunteers filed suit against the City of Chicago, several police officers, and the Metropolitan Pier and Exposition Authority (which owns Navy Pier and Gateway Park). They alleged violations of the First Amendment, the Fourteenth Amendment’s equal protection clause, the Fourth Amendment, the Illinois Religious Freedom Restoration Act, and state law. Judge Shadur (N.D. Ill.) granted summary judgment to the defendants. Plaintiffs appeal.

In their opinion, Seventh Circuit Judges Bauer, Manion, and Hamilton affirmed in part and reversed in part. The Court first addressed the First Amendment and equal protection claims related to the activities at Soldier Field and Wrigley Field. The Court conceded that the public sidewalks outside these two venues are traditional public forums and that access could not be broadly denied. But the time, place, and manner of activities at those locations can be regulated if the regulation: a) is content neutral, b) is narrowly tailored in support of a significant government interest, and c) allows for alternatives. The Court found that the police conduct at Soldier Field and Wrigley Field met those requirements. Plaintiffs presented no evidence of any police hostility to their message and, at both venues, they were simply directed away from busy pedestrian sidewalks and into locations where they could, and did, deliver their message. There was no First Amendment violation. The Court also concluded that there was no equal protection violation, in that plaintiffs were unable to identify similarly situated individuals that received preferential treatment. The Court also concluded that the arrest at Wrigley Field was not a Fourth Amendment violation. There was probable cause to believe that the volunteer was committing the offense of disorderly conduct. The Court turned to the allegations concerning the demonstration at Navy Pier and Gateway Park. The MPEA has a written policy for public expression at those venues. The policy requires a permit. The Court upheld the policy with respect to Navy Pier. Navy Pier is principally a private enterprise with some public benefits. The Policy for permits is first-come, first-served and viewpoint neutral. The volunteers never applied for a permit and there is no evidence in the record that the MPEA was hostile toward their views. Unlike Navy Pier, Gateway Park is a traditional public forum. The policy must be considered under the content neutral, narrowly tailored, ample alternative test. The Court was particularly troubled by the requirement that a group as small as five had to apply for a permit and give seven days notice and that a group smaller than five (including, apparently, an individual) also had to apply for a permit but without any notice requirement. The Court noted that five of its sister circuits have found permit requirements for groups as small as 10 constitutionally suspect. Ultimately, the Court concluded that the constitutionality of the Gateway Park permit requirement had to be considered in light of all the facts and circumstances, which were not addressed below. It remanded the claim for further proceedings. For much the same reasons as applied to the Soldier Field and Wrigley Field claims, the equal protection and Fourth Amendment summary judgment orders relating to Navy Pier and Gateway Park were affirmed.

Judge Hamilton concurred with the parts of the opinion relating to Soldier Field, Wrigley Field, and Navy Peer. He dissented from that portion of the opinion remanding the Gateway Park claims to the district court. He posited that plaintiffs waived the argument by not presenting it in a timely manner in the district court.

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 IN RE: LONGVIEW ALUMINUM, L.L.C. (September 2, 2011)

Dominic Forte was one of five members of Longview Aluminum's Board of Managers. His relationship with the rest of the board was strained, however. In 2001 and 2002, his requests to inspect records were all denied. He actually sued the majority interest board member, alleging that he used his interest to prevent Forte from looking at records or participating in any decisions. The Board formally suspended Forte’s right to view any records in mid-2002. In November of 2002, Forte agreed to leave the Board in return for a $400,000 payment. Longview paid Forte $200,000 on November 7, 2002. In January of 2003, it paid him an additional $15,000 in attorneys fees. Longview filed for Chapter 11 bankruptcy relief in March 2003. The bankruptcy trustee sought the return of both payments. Forte conceded that the $15,000 payment was a preferential transfer since it occurred within 90 days prior to the bankruptcy filing. He resisted the demand for the $200,000, however. He challenged the trustee's application of the one-year preferential transfer window for an "insider." The bankruptcy court concluded that Forte was an insider and held for the trustee. Judge Der-Yeghiayan (N.D. Ill.) affirmed. Forte appeals.

In their opinion, Seventh Circuit Judges Bauer, Flaum, and Williams affirmed. The Court noted that the Bankruptcy Code defines an insider as a director, officer, person in control, partnership of a general partner debtor, general partner, or any relative of them. Courts have generally held that the list is not exhaustive and that the relevant inquiry is whether the relationship at issue has the same characteristics or is similar to the listed relationships. Under Delaware law, the members of a limited liability company are responsible for its management. The Court concluded that the district court did not err in finding that Forte, as an L.L.C. member, is akin to a director and thus qualifies as an insider. The Court cautioned, however, that one’s title is not dispositive if it does not reflect the reality of the individual’s relationship to the organization. The Court rejected Forte's argument that his inability to access the company's records or participate in any meaningful way in the company's management meant that he was not an insider. Forte had meaningful rights, including voting rights, until he received the first payment. He qualifies as an insider and the payment is a preferential transfer.

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BRENEISEN v. MOTOROLA (September 2, 2011)

Motorola employed James Breneisen in several different positions between 1994 2003. In early 2001, he took 12 weeks FMLA leave for gastroesophageal reflux treatment. Upon his return, although he retained his prior salary, he was assigned to a different position, which he considered a demotion. Just a few weeks later, he took another four months leave for esophageal surgery. He took his third and final leave in early 2002, from which he never returned. Motorola terminated his employment in 2003. Breneisen brought an FMLA claim against Motorola, alleging that his supervisor's conduct exacerbated his medical condition. The district court granted summary judgment against him. On appeal, the Seventh Circuit reversed and remanded. The only claims that remained on remand were Breneisen's discrimination and retaliation claims during the five months between his second and third leaves. At Motorola's request, Magistrate Judge Mahoney (N.D. Ill.) barred evidence of any causal relationship between Motorola's conduct and Breneisen's medical condition. The court then dismissed the case, finding that Breneisen’s requested relief was unavailable during the time when he was unable to perform his job, given that he had exhausted his FMLA leave during his first leave. Breneisen appeals.
     Anna Lineweaver also worked at Motorola. She also claimed that Motorola violated her FMLA rights when it denied her tuition reimbursement and retaliated against her for taking a leave. The Seventh Circuit also reversed and remanded the district court’s summary judgment ruling against her. On remand, Motorola tendered her twice the amount she claimed she was owed. Magistrate Judge Mahoney denied her request to convert Motorola’s tender to a judgment and dismissed the case as moot. Lineweaver appeals.

In their opinion, Seventh Circuit Judges Bauer, Kanne, and Evans (who, as a result of his death, took no part in the decision) affirmed. The Court first addressed Breneisen's claim and concurred with the lower court that the cause of one's injury is irrelevant under the FMLA. The Court added that, even if such was not the case, it would be irrelevant to Breneisen because his second leave was not pursuant to the FMLA. He was no longer protected by the statute when the alleged retaliation occurred. The Court turned to Lineweaver's claim. It noted that the only interest she has left is her claim for attorney's fees. It is well settled that a claim for attorney's fees, in and out itself, is not enough to constitute a case or controversy. The district court properly dismissed the case as moot. 

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ORTIZ v. WEBSTER (August 24, 2011)

Shortly after Arboleda Ortiz was incarcerated in the Terre Haute federal prison, an ophthalmologist diagnosed him with a pterygium, a thin film covering the eye, and recommended surgery. The prison denied the request. Someone wrote on the request "NO TOWN TRIPS." Over the next few years, two other doctors concurred with the surgery recommendation while a fourth doctor concluded that the condition was not serious enough for surgery. Dr. Thomas Webster, the prison medical director, reviewed Ortiz’ file and concluded that surgery was not medically necessary, but that it might be required within two years after further evaluation. Ortiz filed suit in 2005 under Bivens, alleging that Dr. Webster was deliberately indifferent to his medical needs. Ortiz eventually got the surgery while his lawsuit progressed. The district court originally granted summary judgment to Webster. On appeal, the Seventh Circuit reversed and remanded, identifying several fact disputes: a) the seriousness of Ortiz’ condition, given the several surgery recommendations, b) Dr. Webster's motivation, given that his stated reason for denying surgery was contrary to the medical record, and c) whether the "NO TOWN TRIP" reflected a prison policy against off-site trips for death row inmates. On remand, the author of the "NO TOWN TRIP" explained it away and Dr. Webster presented evidence that there was no prison policy against off-site medical treatment. Dr. Webster also presented expert testimony that his treatment was within the standard of care because surgical removal of the film is not necessary until there is corneal distortion. Judge McKinney (S.D. Ind.) granted summary judgment to Dr. Webster. Ortiz appeals.

In their opinion, Seventh Circuit Judges Bauer, Manion, and Kanne (dissenting) vacated and remanded. In order to prevail on summary judgment, Ortiz had to show both that his condition was objectively serious and that Dr. Webster knowingly disregarded it. The Court had no difficulty concluding that, at a minimum, there was a fact dispute as to whether the condition was objectively serious. The Court also concluded that Ortiz presented sufficient evidence to get to a jury on the deliberate indifference element. First, construing the evidence in Ortiz' favor, the conditions identified by the expert as requiring surgery actually existed when Dr. Webster refused surgery. Second, even when Dr. Webster refused surgery, he indicated the need for further evaluation and the possibility of the need for surgery within two years. But no further evaluation took place within the next two years. A jury could conclude that Dr. Webster's inaction unreasonably delayed the necessary surgery. Finally, the Court noted that the expert opinion that surgery was not necessary did not resolve the fact dispute -- it merely added one more opinion on the no-surgery side of the debate.

Judge Kanne dissented, taking issue with the majority’s treatment of the deliberate indifference prong. He pointed out that deliberate indifference in a medical context is especially hard to prove. A difference of opinion about a condition’s proper treatment is not enough. Judge Kanne saw nothing either in Dr. Webster's initial review of the file or his later treatment, even taking the facts in a light most favorable to Ortiz, that rose to the level of deliberate indifference.

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SCHULZ v. GREEN COUNTY (July 20, 2011)

Wisconsin law requires each county in the state to provide defined juveniles services through a juvenile-intake worker. Green County is a small Wisconsin County on the Illinois border. Due to its size, it can employ its juvenile-intake worker through its court system or its Human Services Department. The Green County Circuit Court employed Sheila Schulz as the County's juvenile-intake worker from 1997 to 2008. During that time, she supervised some part-time employees. She was making $26.99 per hour in 2008. As part of a cost-cutting effort, the Green County Board of Supervisors eliminated Schulz's job and created a new job within the Human Services Department with much the same responsibilities, except it did not include supervising other employees. The County hired Schulz to fill that position at an hourly rate of $19.28. Schulz brought suit against the County, alleging that its actions deprived her of a property interest without due process in violation of § 1983. Chief Judge Conley (W.D. Wis.) granted summary judgment to the County. Schulz appeals.

In their opinion, Chief Judge Easterbrook, Circuit Judge Bauer, and District Judge Young affirmed. The Court admitted the general rule that a government employee who can be removed from her position only for cause has a property interest in that position and may not be fired from it without due process. A corollary to the general rule, however, is the reorganization rule. If a government eliminates a position, there is no longer anything in which one can have a property interest. But the Court noted that the reorganization rule might not apply if the reorganization only affects a single person. In that case, the reorganization might simply be a pretext. The record in this case does not support the notion that the County's reorganization was a pretext to fire Schulz. First, the undisputed record shows nothing but that the County reorganized to save money. Second, if the purpose of the reorganization was to get rid of Schulz, the County would not have hired her to fill the new position.

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WOODS v. COMMISSIONER OF THE INDIANA DEPARTMENT OF CORRECTIONS (July 19, 2011)

In 2005, the Commissioner of the Indiana Department of Corrections suspected that inmates were using pen-pal internet sites to fraudulently obtain money. The Commissioner ordered an investigation. An investigator reviewed pen-pal websites, interviewed several pen-pals, read the online profiles of hundreds of inmates, and investigated the source of funds deposited into inmates' trust accounts. The investigation concluded that most inmates misrepresent themselves on pen-pal websites and that some pen-pals felt deceived by inmates but it was unable to substantiate any meaningful financial fraud. Nevertheless, the investigator recommended capping inmates' trust accounts, limiting the source of trust account funds to family members and other authorized individuals, and prohibiting inmates from soliciting money or advertising for pen-pals. The Department adopted the latter two recommendations. Inmates brought a class action suit against the Department, alleging that the regulations violated the First Amendment. Judge Magnus-Stinson (S.D. Ind.) granted summary judgment to the Department. The inmates appeal.

In their opinion, Judges Bauer, Posner, and Manion affirmed. The Court first noted that First Amendment rights can be curtailed more broadly in the present context than otherwise. A prison regulation need only be "reasonably related to legitimate penological interests" to be upheld. And even the plaintiffs concede that the department has a legitimate interest in preventing inmates from fraudulently soliciting money from pen-pals. The only question, therefore, is whether the limitations adopted by the Department are reasonably related to that objective. To be so, the regulation must have a valid and rational connection with the objective, the inmates must have alternative ways of exercising their rights, the impact on the rest of the prison community and staff must be considered, and there may not be a less restrictive alternative that achieves the same goal. The Court found the test met. First, the regulation is directly related to the goal of preventing fraud. Second, the inmates have alternative ways of exercising their First Amendment rights. They can still send and receive letters, they receive newspapers and magazines, and they can even develop pen-pals through groups that visit the prison. Third, it is reasonable to believe that lifting the ban would result in more inmate fraud and put a greater burden on prison staff. Finally, the Court rejected the inmates' contention that the source limitation for inmates' trust accounts was a sufficient alternative, without the additional pen-pal solicitation ban. It recognized that the source limitation could be very effective but deferred to the prison administrators' judgment that the ban was also required.

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LEWIS v. SCHOOL DISTRICT #70 (June 1, 2011)

After School District #70 fired Debra Lewis, she brought suit. She alleged, among other things, violations of the Family and Medical Leave Act. Although her employer prevailed in the district court, the Seventh Circuit reversed the FMLA and breach of contract counts. On April 25, 2009, on remand, the parties orally agreed to a settlement in the presence of a magistrate judge. Within weeks, however, Lewis learned that the school superintendent had been accused and was under investigation for child molestation. Lewis refused to sign the settlement agreement. Judge Stiehl (S.D. Ill.) granted defendants' motion to enforce the oral settlement and, when Lewis continued to refuse to sign the agreement, he dismissed the case with prejudice. Lewis appeals.

In their opinion, Circuit Judges Bauer and Williams and District Judge McCuskey affirmed. Illinois enforces oral settlement agreements if there is an offer, acceptance, and a meeting of the minds on its terms. Given the record in open court before the magistrate judge, the Court had no difficulty in finding each element. Lewis also argued that the agreement should be set aside because of the defendants' "fraud." The Court agreed that a contract could be set aside when there is evidence of fraud in the inducement but found the materiality element lacking here. Although the Court conceded that knowledge of the investigation could have given Lewis more bargaining power and possibly a more valuable settlement, it would have been unrelated to the defendants' conduct in terminating her employment. The Court turned to the sanction imposed by the district court. Although it believed the result "unfortunate" and noted that Lewis turned a substantial recovery into nothing, the Court found no abuse of discretion. The district court ordered Lewis to sign the settlement agreement several times and it warned her that not doing so could result in dismissal and sanctions. Only after eight months had passed did he dismiss the case.

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

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

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

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

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

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

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BETTENDORF v. ST. CROIX COUNTY (January 20, 2011)

John Bettendorf has owned a parcel of property in St. Croix County in west-central Wisconsin for decades. In the 1970s and early 1980s, Bettendorf operated a carpet sales business on the property although it was zoned agricultural-residential. In 1985, Bettendorf sought and received permission to use the property for commercial purposes. The ordinance granting permission also provided, however, that the permission was personal to Bettendorf and could not be transferred. Almost 20 years later, Bettendorf sought a declaration in state court that the limitations on the rezoning were void and should be stricken. Unfortunately, the state court declared the entire ordinance void. The County withdrew its permission for commercial operations. Bettendorf filed suit in federal court alleging an unconstitutional taking and violations of his procedural and substantive due process rights. Judge Crabb (W.D. Wis.) granted summary judgment to the County. Bettendorf appeals.

In their opinion, Judges Bauer, Flaum, and Hamilton (concurring in part and dissenting in part) affirmed. The Court first addressed the takings claim. It stated that Bettendorf had to establish that government action had deprived him of "all or substantially all" use of the property. The relevant factors are the nature of the regulatory scheme, the severity of the economic impact, and the degree of interference with the owner's investment opportunities. Here, there was no government intrusion or interference with investment opportunities because Bettendorf himself brought the state action that resulted in the declaration that the ordinance was void. Bettendorf also has not lost the use of the property. He is free to use the property for the agricultural and residential purposes for which it is zoned. The Court thus rejected the takings claim. On the substantive due process claim, the Court stated that Bettendorf would have to establish that the County's decisions were "arbitrary, oppressive, or unreasonable." But here, the County's actions were taken in response to a court order invalidating the ordinance. The Court rejected the substantive due process claim, finding that action utterly reasonable. Finally, the Court addressed and rejected Bettendorf's procedural due process claim. Bettendorf's due process claim is that he was not afforded the typical County appeals process in a rezoning case. The Court noted, however, that it was Bettendorf who chose to challenge the ordinance in state court in lieu of the local appeals process. Bettendorf was afforded adequate process in those state court proceedings. Even if the local appeals process was a superior method for resolving the issue, due process does not require superior process -- only constitutionally adequate process.

Judge Hamilton concurred with the majority's treatment of the due process claims but dissented from its treatment of the takings claim. He relied on the "vested rights" theory that the majority concluded was inadequately presented. Judge Hamilton surveyed the "long and winding history" of the concept in American law. Under the concept, an existing and lawful property use is a critical consideration in a takings claim. Judge Hamilton thus addressed the three factors quite differently than did the majority. First, the nature of the government interference is significant in that it prohibited a long time existing and lawful property use. Second, the economic impact appears to be significant although unclear on the pleadings. Third, although Bettendorf did agree to the condition, the withdrawal of permission substantially interfered with his investment expectations. Judge Hamilton recognized that his consent to the condition limited his expectations to continued commercial use only as long as he owns the property and would thus negatively affect any compensation due.

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PROTECTIVE LIFE INSURANCE CO. v. HANSEN (January 19, 2011)

B&K Enterprizes, a Wisconsin limited liability company, operated a gasoline service station in Manitowoc, Wisconsin. Richard McDonald was a founding member of B&K and managed the station’s day-to-day affairs. B&K purchased a $1 million life insurance policy on McDonald from Protective Life Insurance Co. It then financed the operations by assigning its interest in the insurance proceeds as security for several loans. After an audit established that McDonald had misappropriated funds from and mismanaged B&K, the other LLC members removed McDonald -- but it was too late. The members hired Michael Culligan to wind up operations and liquidate the company. Culligan submitted a form to Protective to transfer ownership of the insurance policy from B&K to McDonald. Because the policy erroneously identified B&K as a corporation, Protective returned the form to Culligan for a second officer’s signature (one signature was sufficient for an LLC). Culligan never resubmitted the form. Under the impression that he was the new owner of the policy, McDonald submitted a change of beneficiary form substituting Megan Hansen, a woman he had been dating, for B&K. McDonald then committed suicide. Protective filed an interpleader action naming both B&K and Hansen. Judge Griesbach (E.D. Wis.) entered judgment for B&K. Hanson appeals.

In their opinion, Seventh Circuit Judges Bauer, Wood, and Williams affirmed. The Court noted that Hansen presented a multi-layered argument. She first asked that the original contract be reformed to accurately indicate B&K’s status as a limited liability company instead of a corporation. She then asks that Culligan's request to transfer ownership to McDonald be effectuated on the theory that Protective's policy was to grant such a request from a limited liability company on one signature. Finally, she asks to give effect to McDonald's request to change beneficiaries. The Court assumed, without deciding, that Hansen could succeed in reforming the policy to reflect B&K’s accurate corporate form. It rejected, however, her additional requests. Reformation is available only if the document fails to reflect the parties' intent. Hansen's requests to give effect to Culligan’s request to change ownership and McDonald’s request to change beneficiaries do not fit within that legal theory – and the Court could identify no other theory that could achieve Hansen's goals. What matters is what happened – not what Hansen speculates would have happened if the policy properly identified B&K. The Court also rejected Hansen’s third party beneficiary argument. Finally, the Court noted its agreement with the district court's conclusion that reformation, as an equitable remedy, would be inappropriate even if all of its elements were satisfied. Here, the equities heavily favor being B&K and reformation would be improper.

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XODUS v. WACKENHUT CORP. (August 27, 2010)

Lord Osunfarian Xodus is a Rastafarian and Hebrew Israelite. He sports a dreadlocked hairstyle as a result of his religious beliefs. In mid-2004, his employer, a security firm, discharged him for his failure to comply with its grooming policy. He sought another security guard position and on July 7 interviewed at Allied Security and Wackenhut Corporation. Allied refused to hire him because of his dreadlocks. Later the same day, Wackenhut also refused to hire him. Xodus brought an action against Wackenhut, alleging religious discrimination. On summary judgment, Judge Walter (N.D. Ill.) concluded that genuine issues of fact existed and denied Wackenhut's motion. The case was tried to the court -- the only issue was whether Xodus brought to the interviewer's attention the fact that he had dreadlocks because of his religious beliefs. Xodus and the interviewer presented different versions of the day's events. Xodus testified that he specifically informed the interviewer that his refusal to cut his dreadlocks, which led to his earlier discharge, was based on his religious beliefs. The interviewer, on the other hand, testified that he raised the company's grooming policy as soon as he saw the dreadlocks and told Xodus that he would have to cut his hair in order to be hired. He further testified that Xodus never informed him of his specific religious beliefs, although he admitted that Xodus did make a single, innocuous reference to a "belief." The interviewer testified that he made no connection to a religious belief as a result of the remark. The court found for Wackenhut, concluding that the testimony of the interviewer was more credible. Xodus appeals.

In their opinion, Judges Bauer, Rovner, and Hamilton affirmed. The Court concluded that the district court's factual finding that the interviewer was not aware of Xodus’ religious beliefs was not clearly erroneous. A person's religion, unlike a person's gender or race, is not readily apparent. An employee or prospective employee, therefore, must advise his employer of particular religious practices or beliefs. The Court found that the district court's opinion, although brief, provided sufficient detail of the testimony and corroborating evidence that led to his conclusion that the interviewer's testimony was more credible.

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HALE v. CHU (August 9, 2010)

Plaintiffs Hale and others filed a derivative action against China Online, Victor Chu, and others. They alleged that the defendants breached certain fiduciary duties owed to China Online and its shareholders. Chu removed, asserting that diversity exists if China Online is ignored -- and China Online should be ignored because it was fraudulently joined. Plaintiffs moved to remand and Chu moved to dismiss. Judge Kendall (N.D. Ill.) denied the former and granted the latter. The court relied on the fact that the company’s dissolution terminated plaintiffs' status as shareholders and their ability to bring a derivative action. Alternatively, the court stated that it would dismiss for plaintiffs' failure to make the requisite demand or show futility. Plaintiffs appeal.

In their opinion, Judges Bauer, Flaum, and Tinder affirmed. On appeal, the plaintiffs conceded that they had no right to bring a derivative action in the name of China Online. For the first time, they asked the Court to treat the complaint as a direct claim brought by China Online against the same defendants. The Court refused to so. An issue not raised before the district court is waived on appeal. The Court noted that the plaintiffs failed to raise the argument even after the district court invited supplemental briefs on the issue of derivative actions and dissolved corporations.

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 SIEGEL v. SHELL OIL CO. (July 30, 2010)

Michael Siegel is a retail gasoline consumer. He brought a class action against several major oil companies. The complaint alleged that the oil companies violated the Illinois Consumer Fraud and Deceptive Business Practices Act ("ICFA") and were unjustly enriched as a result of their concerted effort to reduce the supply of gasoline, thereby increasing its price. Judge St. Eve (N.D. Ill.) denied class certification and entered summary judgment for the defendants. Siegel appeals.

In their opinion, Circuit Judges Bauer and Sykes and District Judge Griesbach affirmed. The Court noted that an Illinois claim for unfair conduct under the ICFA requires both a substantial injury that could not reasonably have been avoided and that the injury be the proximate result of defendants' conduct. Addressing first the class certification issue, the Court concluded that the district court did not abuse its discretion in finding that common issues of fact did not predominate over individual issues. For example, each class member's gasoline purchasing habits would have to be determined in order to establish causation. On the merits, the Court concluded that Siegel's own testimony precluded a finding of proximate causation. He testified that he could and did purchase gasoline from other oil companies, that he continued to purchase gasoline from the defendant oil companies, and that many factors were relevant to his buying decisions. Finally, an unjust enrichment claim is not a stand-alone claim. Here, Siegel’s claim rests on his allegation of unfair conduct. Having rejected the ICFA claim, the Court rejected the unjust enrichment claim as well.

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

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

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

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

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

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

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TULLY v. BARADA (March 17, 2010)

One night a resident of Rush County, Indiana, saw automobile headlights and another light near a bridge several hundred yards from his home. When he heard a shot coming from the same direction, he called the sheriff. He called the sheriff a second time when he heard a second shot. In responding to the report, Sheriff Chandler stopped a vehicle occupied by Michael Tully and a friend. There was a spotlight, a rifle, and a dead raccoon in the car. Both boys responded "yes" when Sheriff Chandler asked if they knew that shooting from a roadway is wrong. The county prosecutor, Paul Barada, charged both boys as juveniles with "shooting on or across a public highway." A trial court adjudicated Tully as a delinquent -- the appellate court reversed. Tully brought an action under § 1983 against Barada and the probation officer upon whose report his complaint was based. He alleged a constitutional right not to be summoned into court and prosecuted without probable cause. The district court granted defendants' motion to dismiss, concluding that there is no such right. Tully appeals.

In their opinion, Circuit Judges Bauer and Wood and District Judge Kennelly affirmed. The Court first noted that the Supreme Court has not spoken on the possibility of a right not to be prosecuted without probable cause. The Courts of Appeals that have spoken have taken various approaches. In fact, the issue is infrequently presented because prosecutors generally claim absolute immunity. Here, the Court noted that defendants waived not only their affirmative defense of absolute immunity, but also the affirmative defenses of the existence of probable cause and res judicata. Having been required to reached the merits, the Court concluded that there is no federal constitutional right under either the Fourth or Fourteenth Amendment not to be summoned into court and prosecuted without probable cause. Being summoned into court is not a "seizure" of Tully under the Fourth Amendment -- his state court vindication was due process under the Fourteenth Amendment.

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SERAFINN v. LOCAL 722 (March 12, 2010)

Mark Serafinn is a member of Local 722 of the International Brotherhood of Teamsters. In fact, he served three terms as its president. Serafinn is also a member of the Teamsters for a Democratic Union ("TDU"), a large and active dissident group opposed to the current international leadership. Serafinn alleges that the presidents of the union and the joint council, which is a group of leaders from locals in the same region, colluded to have internal disciplinary charges brought against him. The joint council suspended Serafinn and ordered restitution. Serafinn brought an action against both the local union and the joint council under the Labor Management Reporting and Disclosure Act. He alleged that the actions taken against him were taken without due process in retaliation for his exercise of free speech and assembly rights, all in violation of the Act. The district court granted summary judgment to the joint council. The claim against the local union proceeded to a jury trial, where Serafinn was awarded $50,000 in compensatory damages and $55,000 in punitive damages. After trial, the court denied a motion by Serafinn for relief from the summary judgment granted to the joint council on the grounds of newly discovered evidence. The court also awarded attorneys fees to Serafinn, but in a lesser amount than requested. The union local appeals. Serafinn cross appeals.

In their opinion, Judges Bauer, Evans, and Tinder affirmed. The Court first addressed the local's contention that the district court should have given a mixed-motive instruction. The district court had instructed the jury that Serafinn's exercise of free speech had to be a "but for" cause, not just a motivating factor. In that situation, the Court stated, a mixed-motive instruction would be inappropriate. The Court noted that some courts have approved of mixed-motive liability theories in cases under the Act but that the Supreme Court's decision in Gross overruled that approach. The Court then addressed the local's challenge to a limiting instruction with respect to a witness’ misdemeanor convictions. Although the convictions may be admissible for some purposes, Rule 609 prohibits their admission to attack general character for truthfulness. Here, the lower court properly allowed the convictions into evidence for some purposes but erred when it allowed the jury to consider them for improper impeachment purposes. Nevertheless, the Court found no prejudice from the error and declined to order a new trial. Addressing Serafinn's cross-appeal, the Court concluded that his "new evidence" was simply cumulative. Finally, the Court found no abuse of discretion in the district court's consideration and decision with respect to the award of attorney's fees.

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BUDDE v. KANE COUNTY FOREST PRESERVE (March 4, 2010)

Charles Budde enjoyed several glasses of wine at the Moose Lodge one night. He decided to drive home anyway and caused an accident that sent two people to the hospital. His blood-alcohol level at the time was nearly three times the legal limit. Budde was also the police chief for the Kane County Forest Preserve District. The district fired him, giving three reasons: errors in judgment, an inability to perform his duties, and engaging in below-standard conduct. Budde sued the District, alleging his termination violated the Americans with Disabilities Act. The district court granted summary judgment to the defendant, concluding both that he could not recover because he was terminated for misconduct, not a disability, and that he was not a "qualified individual with a disability" because he violated a District rule. Budde appeals.

In their opinion, Judges Bauer, Manion, and Tinder affirmed. One of the prerequisites for an ADA claim, noted the Court, is that the plaintiff can perform the "essential functions" of his job. The Court concluded that Budde could not meet that prerequisite for two reasons: he violated a workplace rule and he was unable to operate a motor vehicle. With respect to the former, the Court found sufficient evidence that Budde violated the rules that prohibited public intoxication and prohibited the violation of public laws. The Court noted that the District need not wait for the outcome of any criminal charges. With respect to the latter, the Court rejected Budde’s distinction between the ability to operate a motor vehicle and the ability to operate a motor vehicle legally (i.e., in possession of a valid drivers license). The essential function of the job is the ability to operate a motor vehicle legally -- which Budde is unable to do.

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COVELL v. MENKIS (February 8, 2010)

The Illinois Deaf and Hard of Hearing Commission (the "Commission") was created several years ago to provide services for and advocate on behalf of the hard of hearing. Gerald Covell served as its Director from 1998 until 2003. In July of that year, the Commissioners terminated him. Covell filed suit under § 1983, alleging that defendants violated both his property and liberty interests. Specifically, he alleged that he was let go without any pre-or post-termination process in violation of a property interest. He also alleges that defendants circulated false information about him, without providing him an opportunity to clear his name, in violation of his liberty interest. The district court granted summary judgment to the defendants, concluding that Covell had no property interest in this position and that he failed to demonstrate that any particular defendant circulated negative information. Covell appeals.

In their opinion, Judges Bauer, Manion and Williams affirmed. The Court first addressed the existence of a property interest. Although a property interest can arise from state law, a person must identify a specific statute, rule, or contract that limits the ability of the state to terminate him. The rules governing Covell's position states that he "shall serve at the pleasure of the Commission." The Court rejected Covell's position that an inconsistent right was somehow incorporated into the regulation by its reference to the Personnel Code. Since he had no property interest, he had no right to due process. With respect to his liberty interest claim, the Court stated that the plaintiff must show that he was stigmatized by publicly disclosed information and that he suffered a tangible loss. Specifically, the plaintiff must show that a named defendant made the public disclosure. Here, Covell contends only that the disclosure was made by someone in the government. Without evidence that the disclosure was made by a named defendant, Covell's claim fails.

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IN RE: MARCHFIRST (December 21, 2009)

CIT Communications Finance Corp. leased telephone equipment to marchFIRST beginning in 2000. After marchFIRST filed for bankruptcy in 2001, CIT sought the return of its equipment. The Trustee denied that marchFIRST held any CIT property. In 2002, CIT filed an administrative claim, asserting that the Trustee breached his fiduciary duty. In May of 2007, CIT filed a lawsuit against the Trustee for breach of fiduciary duty. The bankruptcy court, and the district court, both agreed that the suit was barred by the statute of limitations. CIT appeals.

In their opinion, Judges Bauer and Sykes and District Judge Simon affirmed. Everyone agreed that the claims were governed by the five-year statute of limitations -- they did not agree on when the claim accrued. The Court cited the general rule that tort claims accrue when a party sustains an injury but added that Illinois recognizes the discovery rule. That principle extends the time of accrual until the time when a party both knows he is injured and that the injury was wrongfully caused. Here, CIT begin demanding its equipment back as early as July of 2001 and the Trustee refused to return it as early as November of 2001. CIT was on notice of its injury and its claim. Even if the Trustee's breach of his fiduciary duty continued into the five-year period before the filing of the complaint, this is not the type of tort where a limitations period begins to run only after the cessation of the tortious conduct. When a tort arises out of a breach of contract, the statute begins to run at the time of the breach or its discovery.

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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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O'NEAL v. CITY OF CHICAGO (November 17, 2009)

Brenda O'Neal was a Chicago police officer. After ten years on the force, she was promoted to sergeant in 2001. In 2002, Neil sued the Chicago Police Department (CPD), alleging that a then-recent transfer violated Title VII. The district court granted summary judgment against her -- the Seventh Circuit affirmed. Since that lawsuit, the CPD has transferred her ten times into a total of seven different units of the department. O'Neal filed another lawsuit in 2007, alleging that the transfers amounted to discrimination and retaliation. The district court again granted summary judgment against her. O'Neal appeals.

In their opinion, Judges Bauer, Wood and Williams affirmed. The Court first emphasized that it would consider only the last two transfers because of the timing of O'Neal's EEOC complaint and that it would not consider the transfers as a whole because O'Neal failed to make the argument. One of the elements of O'Neal's retaliation claim is that the adverse action taken by the department must be causally connected to her protected activity. Here, her protected activity includes her 2002 lawsuit and a 2006 grievance. The Court concluded that there was insufficient evidence of a causal connection under either the direct or indirect methods of proof. Specifically, with respect to the indirect method, O'Neal failed to rebut the department's evidence that she was not meeting its legitimate expectations. The Court stated that her gender discrimination claim failed for the same reasons.

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KISWANI v. PHOENIX SECURITY AGENCY (October 16, 2009)

Ibrihim Kiswani was arrested for, and later acquitted of, an unlawful use of weapon charge. He filed an action against several police officers and the Phoenix Security Agency, alleging unlawful arrest and malicious prosecution, as well as other counts. Most of the counts were resolved prior to trial. Two counts against one individual officer were resolved at trial -- one on a motion for judgment as a matter of law and one by the jury. Judgment was entered on June 16, 2008. On June 24, Kiswani filed a renewed motion for judgment as a matter of law and a Rule 59 motion for a new trial. The magistrate judge denied the motions on August 20. On September 12, Kiswani moved for reconsideration of those motions. That motion was denied on September 24. Kiswani appeals (on September 29).

In their opinion, Judges Bauer, Rovner and Williams affirmed. First, in an order prior to argument, the Court limited the appeal only to a review of the September 12 motion for reconsideration. The August 20 order triggered the time for appeal of the merits judgment. The September 12 motion did not toll that time in that it was not filed within ten days of the judgment. On its review of Kiswani's September 12 motion for reconsideration, the Court stated that it should be considered a motion to alter or amend the judgment. That motion, under Rule 59(e), must be filed no later than 10 days after entry of judgment. Here, since the judgment was entered on June 16, the motion was not timely. The Court then turned to Rule 60(b), since an untimely Rule 59 motion automatically becomes a Rule 60(b) motion. The Court noted, however, that a Rule 60(b) motion must raise a new ground for collateral attack. Here, the motion raises the same argument as the earlier motions and is therefore inappropriate as a Rule 60(b) attack. Untimely under one rule and inappropriate under another – the Court affirmed.

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EKSTRAND v. SCHOOL DISTRICT OF SOMERSET (October 6, 2009)

Renae Ekstrand had been teaching successfully at Somerset Elementary School for several years when the school reassigned her to an interior classroom without natural light. Ekstrand had a disorder which limited her ability to function in an artificial light environment. She told the principal of her condition. She repeatedly requested a transfer to a room with natural light, two of which were available. The school addressed some of her concerns but refused to change her room assignment. Her condition deteriorated to the point where she had to seek medical attention and took a medical leave of absence. She continued to request a room reassignment during her leave. Ultimately, she left the school and brought an action pursuant to the Americans with Disabilities Act. The district court granted summary judgment to Somerset. Ekstrand appeals.

In their opinion, Chief Judge Easterbrook and Judges Bauer and Evans (concurring) reversed in part and affirmed in part. On the failure to accommodate claim, the Court stated that Ekstrand had to provide evidence that she had a disability, that the school was aware of the disability and that the school failed to reasonably accommodate her. The Court found evidence in the record that she was disabled and that the school was aware of her disability. The principal issue on appeal was whether the school accommodated her disability. The Court noted that a request for accommodation requires significant communication between the parties, particularly when the disability is a mental one. The Court found that the school did reasonably accommodate Ekstrand's disability in the early stages of their communication. During that time, Ekstrand identified a number of conditions in her classroom that exacerbated her depression but never provided direct evidence of the necessity of natural light. However, the court did find a time in November when Ekstrand's psychologist identified natural light as a key to her improvement. Once it was so advised, the Court concluded that the school could have given Ekstrand a room with natural light at a reasonable cost. The Court therefore disagreed with the lower court's finding that no reasonable jury could find in Ekstrand's favor. On the constructive discharge claim, the Court agreed with the district court that Ekstrand failed to show that her working conditions were so intolerable that her resignation was an appropriate response.

Judge Evans concurred in the judgment but wrote separately. He expressed his doubt whether Ekstrand could demonstrate that she was a "qualified individual" under the ADA given her condition and the fact that she was a first grade teacher. He suggested that the district court address that issue on remand.

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HARPER v. SHERIFF OF COOK COUNTY (September 8, 2009)

Robert Harper was arrested on September 29, 2005. The next afternoon, a judge found probable cause, set bond and remanded him to the custody of the sheriff. Apparently, Harper's wife was at the probable cause hearing and was willing and able to post a cash bond. She eventually posted it a few hours later but Harper was not released from custody until hours after that. During that time, he was in the custody of the sheriff undergoing pre-release processing. Harper brought an action against the Sheriff, alleging that the pre-release procedures are unconstitutional. The district court granted Harper's motion for class certification, although it found his class definition too broad and asked for a redefinition. The Sheriff appeals.

In their opinion, Judges Bauer, Sykes and Tinder vacated and remanded. The Court first clarified that it had jurisdiction, notwithstanding the lower court's request for a redefinition of the class. The open definition was of no consequence since the court certified the class. Before it addressed class certification, the Court first had to decipher the crux of the complaint. It noted that Harper complained of specific intake procedures as well as the general practice of holding detainees after bond had been posted. Relying specifically on representations at oral argument, the court focused on the latter of these two issues -- the post-bond detention. On the merits of that argument, however, the Court concluded that the reasonableness of the detention would depend on the specific facts and circumstances of each individual case. The Court cited a number of factors: time of day, number of detainees, collateral events, etc. The Court also addressed Harper's equal protection claim that persons with money or influence can avoid the detention. Without addressing the merits, the Court concluded that this claim, too, was not appropriate for class disposition.

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ANDERSON v. AB PAINTING AND SANDBLASTING (August 20, 2009)

Under its collective bargaining agreement, AB Painting and Sandblasting was required to make contributions to several union benefit plans. The trustee of the plans brought an action under ERISA to collect overdue contributions. The court granted summary judgment to the fund for the entire amount claimed ($6,500). The court awarded attorneys’ fees of only $10,000, however, on a request in excess of $50,000. The amount claimed, stated the district court, was “disproportionate” to the amount at stake. The trustee appealed.

In their opinion, Judges Bauer, Manion and Sykes reversed and remanded. The Court noted that ERISA requires an award of “reasonable” attorneys’ fees in a successful action to recover overdue contributions. The district court should begin with the “lodestar” (hours times a reasonable rate)and adjust it upon consideration of a number of factors, including the amount at stake and the results obtained. The Court cited its own jurisprudence, however, where it has rejected any requirement of proportionality between the result and the fee award. In fact, one of the policy reasons behind fee-shifting statutes is the promotion of meritorious claims that would not be brought otherwise. In a situation where Congress has spoken by including a fee-shifting provision in a statute, a court should only look at whether the time expended was a reasonable approach to the desired end. Here, the lower court did not opine on the reasonableness of the hours spent achieving the outcome. The Court remanded for such a recalculation.

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HOLLINS v. MILWAUKEE (July 31, 2009)

David Hollins is a freelance photographer. One June day in 2002, he was walking down a Milwaukee street. He came upon a scene where the Milwaukee Police were conducting a search of a home across the street. Hollins began taking pictures. A police officer noticed Hollins and asked him to move away from the area. Although he moved a short distance, Hollins eventually stopped and refused to move further. Police officers arrested Hollins and cited him for resisting an officer. The parties' versions of the events differ greatly with respect to the amount of force used by the officers and the attitude and language of the participants. Hollins was convicted and paid a fine. He later sued the city and the officers for violations of the First, Fourth and Fourteenth Amendments. He also brought a § 1983 claim against the City of Milwaukee for failure to train police officers properly. The court granted summary judgment to the defendants on the § 1983 claim and dismissed the free speech and due process claims as well. A jury found for the defendants on the unlawful arrest and excessive force claims. Hollins appeals.

In their opinion, Judges Bauer, Flaum and Evans affirmed. The Court first addressed the § 1983 claim for failure to properly train the police. The Court agreed that a failure to train police can lead to § 1983 liability if it amounts to a deliberate indifference of public rights. The Court further stated that Hollins had to present allegations of a specific pattern of incidents to prove that the constitutional deprivation resulted from an official policy or custom. Hollins, however, failed to offer any evidence that the city's failure to train amounted to the requisite deliberate indifference. The city, on the other hand, presented unrebutted evidence that it did offer significant training in the areas cited by Hollins. The Court also affirmed the dismissal of the free-speech claims, concluding that Hollins' allegations that he was arrested for taking pictures totally unsupported. With respect to the alleged trial errors, the Court concluded that the district court did not abuse its discretion when it: a) refused to ask a voir dire question on racial prejudice that had nothing to do with the law or facts, b) disallowed questioning on cross-examination that one of the defendants had been investigated for falsifying police reports when it had limited probative value, and c) refused to tender Hollins' jury instruction interpreting the ordinance under which he was cited when he offered no authority to support his interpretation and when the jury was not being asked to determine whether the ordinance had been violated.

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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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U.S. NEUROSURGICAL, INC. V. CITY OF CHICAGO (July 9, 2009)

The City of Chicago entered into a contract with Global Health Systems, Inc. ("Global"), the predecessor to U. S. Neurosurgical, Inc. Global agreed to design, install and manage a computer information system. The purpose of the system was to implement case management and billing for the City’s Department of Health. At the time of the contract, the system only processed hand-entered data. Global represented, however, that its system was capable of processing scanned data. The contract provided that Global would assist the City in assessing the scanning function and modify the hardware and software if the City so desired. The City did decide to include a scanning function. The implementation turned out to be much more difficult and costly than anticipated. Global billed the City for the extra work, even though it did not follow the correct contract procedures. When the City refused to pay, U.S. Neurosurgical sued. After a bench trial, the court concluded that the work was required by the contract and denied relief. Alternatively, the court concluded that the extra work was not properly authorized, was not in writing, and did not comply with the contract procedures. U.S. Neurosurgical appeals.

In their opinion, Judges Bauer, Evans and Williams affirmed. The Court stated that any party doing business with a government entity is presumed to know a contract cannot be enforced unless it meets statutory requirements and is authorized by an appropriate official. Here, the City's procurement officer was the only person authorized to approve the contract. The Court rejected the argument that the City delegated such authority to the project manager. In addition, the Court stated that both the contract and a statute prohibited an oral modification. Although the Court conceded that a written contract can be modified orally notwithstanding a contractual prohibition, the same is not true for a statutory prohibition. The Court also rejected U.S. Neurosurgical's claims for relief based on equitable estoppel and account stated.

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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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BUCHANAN-MOORE v. COUNTY OF MILWAUKEE (June 29, 2009)

Sidney Gray, a mentally ill man, was well known to the Milwaukee Police Department. In the 10 years preceding July of 2006, he was arrested at least 35 times. Many of those arrests stemmed from violent episodes. He was also committed to the county's mental-health facilities on several occasions. County doctors understood that certain medications reduced Gray's violent episodes. In a five-week episode in June and July of 2006, Gray was arrested, committed, released from commitment, arrested for home invasion, held without medication, released by mistake, arrested again for home invasion, held again without his medication, and again released without charges being filed. Shortly thereafter, Gray shot and killed Frank Moore after breaking into the house next door to Moore's. Moore's survivors brought a section 1983 suit against the County, alleging that Gray’s release after a 72- hour confinement in a county facility without his medication was a violation of Moore’s civil rights. The court entered judgment for the County. The survivors appeal.

In their opinion, Judges Bauer, Kanne and Sykes affirmed. The Court noted that the 14th Amendment generally does not impose on the state a duty to protect against harm by private individuals. An exception exists to not place one in a position of danger that otherwise would not have existed. Under this exception, the Court noted that the state must affirmatively create or increase the danger and the state's actions must be the proximate cause of the injury. Here, the Court held that the County's conduct was not proximate cause of Moore's death in that Moore was not a foreseeable victim of the County's actions. Gray was not known to carry a weapon, he did not pose a threat to any definable population, and any danger he posed was not of finite duration. The Court concluded that Moore's death was too remote a consequence to hold the County liable under section 1983.

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BAKERY MACHINERY & FABRICATION v. TRADITIONAL BAKING, INC. (June 29, 2009)

Bakery Machinery & Fabrication (BMF) retained attorney James Hinterlong to pursue Traditional Baking, Inc. (TBI) in a contract action in an Illinois court. TBI removed the action to federal court. Hinterlong failed to file an appearance, neglected to file Rule 26 disclosures on time, failed to respond to TBI's amended counterclaim, did not provide a copy of a sanctions order to his client as ordered by the court, and never answered a request for admission. The court ordered Hinterlong to file his appearance, pay a sanction, and pay past sanctions. The court warned Hinterlong that it would strike BMF's pleadings if he did not comply. He did not comply. The court struck BMF's pleadings, granted TBI's motion for default and entered judgment against BMF for $582,000. Some months later, BMF moved to substitute counsel and stay the proceedings. The court denied substitute counsel's motion to vacate the judgment. BMF appeals.

In their opinion, Judges Bauer, Ripple and Wood affirmed. The Court began by noting that a district court has substantial discretion in deciding a Rule 60 motion. Citing its prior jurisprudence, the Court stated that an attorney's misconduct is the problem of the client under the law of agency. Even when that misconduct rises above simple negligence or lack of diligence, it does not entitle the client to the "extraordinary" relief provided in Rule 60. Even here, where BMF sued Hinterlong and discovered he lacked malpractice insurance, the situation does not meet the exceptional circumstances test.

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UNITED STATES v. BENSON (April 6, 2009)

William Benson claims to believe that the 16th Amendment to the United States Constitution was never properly ratified and that, as a result, the federal income tax system is unconstitutional. Benson has written a book on the subject and promotes and sells a package of materials that he claims will allow citizens to refuse to file federal income tax returns and still avoid liability as a result. The United States brought an action against Benson in federal court pursuant to 26 U.S.C. § 6700. The United States sought an injunction preventing Benson from promoting and selling his tax avoidance materials and also sought a list of Benson's customers. The district court enjoined Benson from promoting and selling his package of materials but declined to order him to produce a list of his customers. Benson and the United States appeal.

In their opinion, Judges Bauer, Ripple and Evans affirmed in part, reversed in part and remanded. The Court affirmed the lower court's grant of injunctive relief. The Court first concluded that Benson's activities fit within the broad definition of a § 6700 "plan." Second, the Court concluded that Benson knew or should have known that many of the statements included in the materials were false. Finally, the Court concluded that the statements were material because they could have a substantial impact on a person's decision to purchase his package of materials. Next, the Court concluded that the United States met the injunctive relief threshold contained in the statute. Considering the totality of the circumstances, the court relied on the facts that Benson's violation was not isolated and that he was not likely to stop without the injunction. With respect to Benson's First Amendment claim, the Court concluded that the language of the injunction was specific enough to prohibit only false or deceptive commercial speech -- -- speech not protected by the First Amendment. Benson is still free to encourage political action, communicate a political message, and otherwise share his views about the 16th Amendment or the federal tax system. The Court reversed the lower court with respect to its decision on the customer list. A district court has the authority to issue orders that may be necessary for the enforcement of the tax laws. The Court noted that such an order would not harm Benson but would serve the public interest by allowing the government to both warn Benson's customers of the falsity of his claims and also to enforce the income tax laws of the United States.

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RUJAWITZ v. MARTIN (April 2, 2009)

Mark Rujawitz was an at-will employee of theIllinois Department of Transportation (IDOT) for thirteen years. When he violated an injunction requiring him to keep his distance from his ex-girlfriend, IDOT fired him. A disciplinary panel reviewed the discharge and recommended a lesser level of discipline. Rujawitz was reinstated and his discipline was changed to a suspension without pay. Rujawitz brought a § 1983 action against the secretary of IDOT, alleging that he was denied his substantive due process rights. The district court dismissed the complaint on the ground that Rujawitz had no property right in continued employment. Rujawitz appeals

In their opinion, Judges Bauer, Posner and Rovner affirmed. In order to establish a due process claim, the court stated, Rujawitz had to demonstrate a constitutionally protected property interest. The Court looked to state law for that determination. The Court could locate no ordinance, law or employment agreement that changed Rujawitz's status from an at-will employee to one with an expectation of continued employment. The Court rejected Rujawitz 's position that the presence and use of the disciplinary procedures established a property interest protectable under the Fourteenth Amendment.

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STAR INSURANCE CO. v. RISK MARKETING GROUP (March 31, 2009)

Star Insurance Company ("Star") and its co-plaintiffs registered a $2.4 million judgment in the Northern District of Illinois and began proceedings to collect it. Star also brought a separate action to pierce the corporate veil of defendants Risk Marketing and Cebcor Service Corp. In the collection proceedings, Star sought to set aside fraudulent transfers, to enjoin the disposition of assets, to appoint a receiver and to dissolve the corporate defendants. Instead of responding to Star’s requests, the defendants moved to consolidate the enforcement proceedings with the action to pierce the corporate veil. On August 31, 2007, the court enjoined the disposition of transferred assets and ordered the individual defendants to turn over certain assets in their possession. It also denied their motion to consolidate. On October 19, the court granted Star’s motion for judicial dissolution and the appointment of a receiver. On January 23, 2008 the court entered judgment for $2.4 million against the individual defendants. The defendants appeal the lower court's orders of August 31 and January 23.

In their opinion, Judges Bauer, Rovner and Evans affirmed. The Court first addressed its jurisdiction to review the August 31 order. The Court cited the general rule that an order is final and appealable if the decision ends the litigation on the merits and does not contemplate further activity. With respect to the August 31 order, the Court noted that the entire order was not immediately appealable. The decision contained separate orders arising from separate motions contained in the same document. Although the preliminary injunction order and turn-over order were immediately reviewable, the denial of the motion to consolidate was not appealable until the final judgment. The Court determined that it therefore had jurisdiction to review the earlier denial of consolidation.

On the merits, the Court found that the district court did not abuse its discretion in declining to consolidate. The Court recognized that there were similarities between the collection case and the piercing the veil case but noted that the two proceedings sought completely different results. The Court also held that the district court properly entered judgment against the individual defendants for failing to return the object of the fraudulent transfers. The lower court properly applied Illinois law to the collection proceedings, found that fraudulent transfers had been made, ordered the property returned, and entered judgment as a sanction against the individual defendants for violating the order.

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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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ANTONETTI v. ABBOTT LABORATORIES  (April 21, 2009)

Five technicians employed by Abbott Laboratories left in the middle of their shift one Saturday and went to breakfast. On the following Monday, Scott Antonetti (a white male), Jerald Fuhrer (a white male), Cindy Nadiger (a white female) and Marvin Gloria (a Filipino male) each told a supervisor that he or she had not taken a meal break. Relying on these statements, the supervisor overrode Abbott’s payroll system so that they would be paid as if they had not taken an unpaid break. Juan Luna (a Hispanic male), the fifth employee, did not work on Monday and did not have any communication that day with the supervisor regarding his Saturday shift. Nevertheless, the supervisor overrode the payroll system for Luna as well.

A few months later, Abbott began to investigate instances of employees leaving their weekend shifts for meals. When asked, Luna admitted that the five of them had left Abbott’s campus on that Saturday for breakfast. When the investigators questioned the other four, they stated they did not remember going to the off-site breakfast that day. Because working the Saturday overtime shift and leaving Abbott’s premises in the middle of a shift was unusual, the investigators found it implausible that the four employees did not remember going off-site for a meal during a Saturday overtime shift. In addition, they could remember other details about the Saturday overtime shift. Furthermore, one of them later changed his story and confessed, supposedly on behalf of all of them, to attending the off-site breakfast. Antonetti, Fuhrer, Nadiger and Gloria were terminated for time card fraud. Luna was not terminated. Antonetti, Fuhrer and Nadiger filed suit, claiming they were terminated on account of their race (Caucasian) and national origin (United States). Nadiger also claimed that she was terminated in retaliation for her complaints of sex discrimination. Gloria did not file suit. The district court entered summary judgment in favor of Abbott, finding the plaintiffs could not establish a prima facia case of race or national origin discrimination. The plaintiffs appealed.

In their opinion, Judges Bauer, Posner and Williams affirmed. The Court first addressed the elements necessary to present a prima facie case of discrimination under both Title VII and 42 U.S.C. § 1981. The Court stated that plaintiffs must prove that: 1) they are members of a protected class; 2) they were performing their jobs satisfactorily; 3) they suffered an adverse employment action; and 4) similarly situated employees outside of their protected class where treated more favorably. Focusing on the fourth element of the discrimination claim, the Court found that the non-terminated employee, Luna, was not similarly situated to the plaintiffs for two reasons. First, Luna never told his supervisor that he did not take a break on the Saturday in question. Second, and most importantly, Luna told the truth when he was approached by the investigator about the off-site meal. Since the plaintiffs could not point to a similarly situated employee who was treated more favorably, their claim failed.

Addressing Nadiger’s Title VII claims that she was terminated in retaliation for her past and possible future complaints of sex discrimination in relation to being denied a promotion, the Court stated that there must be a causal link between her complaints of sex discrimination and her termination. The Court found that even if Abbott was partially motivated by Nadiger’s complaints of sex discrimination, it would have nonetheless fired her for time card fraud. Since Abbott had an independent and legitimate reason for firing Nadiger, her separate claim fails as well.

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ZERENTE v DELUCA (February 9, 2009)

Maria Zerente was employed by the City of Chicago Heights from 1995 until 2003, during the two terms of Mayor Ciambrone. Several candidates vied for the mayoral position in 2003, after Ciambrone announced that he would not run for reelection. Anthony DeLuca won on a fiscal responsibility platform. DeLuca hired Dan Proft as Chief of Staff. They both concluded that one of the City’s biggest fiscal problems was a bloated workforce. They fired seventeen employees and did not fill another seventeen open positions. Proft also came to believe that Zerente’s department was underperforming. DeLuca fired Zerente and replaced her with the man who had been his campaign treasurer. Zerente brought a § 1983 action against DeLuca and Proft, alleging that her firing was due to her political affiliation. The district court granted summary judgment to DeLuca and Proft. Zerente appeals.

In their opinion, Chief Judge Easterbrook and Judges Bauer and Sykes affirmed. The Court laid out the elements of a prima facie case of political discrimination – constitutionally protected conduct and evidence that the conduct was a substantial and motivating factor in the firing decision. Zerente established the first prong with evidence of her support of Ciambrone, her involvement in the primary campaign of a DeLuca opponent, and her decision to remain neutral in the general election. The Court held that she failed to meet the second prong, however. She presented no evidence that DeLuca or Proft were even aware of her political activity. Her fallback position that it was her political inactivity (i.e., her neutrality during the general election) that resulted in her firing also fails. Although her neutrality is protected, she brought forth no evidence, other than that her replacement was not neutral, to establish that her neutrality was a motivating factor. That her replacement was involved in DeLuca’s campaign simply does not support her claim.

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DELTA CONSULTING GROUP v. R. RANDLE CONSTRUCTION (February 5, 2009)

R. Randle Construction Company and Ronald Randle (“Randle”) acted as a general contractor on a high school construction project. Disputes and delays resulted in Randle suffering a loss on the project. He retained Delta Consulting Group (“Delta”) to prepare and present a Request for Equitable Adjustment (“REA”). Delta estimated that the cost of their services would be $34,000. Delta prepared and presented an REA for $1.6 million. It was rejected. Delta prepared and submitted a second REA, this one for $1.7 million. Delta and Randle met with the school’s representatives to discuss the REA. Again, the school rejected the REA as unsupported by adequate documentary evidence. Randle met with the school once again, this time without Delta. He was again unsuccessful. Randle paid Delta’s periodic invoices through March 9, 2004, several days after this last meeting. Randle ultimately paid Delta a little more than $60,000 out of $144,000 billed. Randle and the school ultimately settled their dispute for $450,000. In October of 2004, Randle’s auditors sent a letter to Delta asking it to confirm an amount owed to Delta by Randle of $89,000. Delta replied to the letter – correcting the amount to $81,000. Randle did not object. When Delta sought to collect, Randle expressed his dissatisfaction with Delta’s services. Delta sued for the $81,000. Randle counterclaimed for breach of contract, alleging that Delta did not adequately present the REA. The district court granted summary judgment to Delta and awarded prejudgment and postjudgment interest. Randle appeals.

In their opinion, Judges Bauer, Wood and Tinder affirmed on the merits and remanded for recalculation of interest. The Court upheld the district court’s finding of an account stated. An account stated, said the Court, establishes the amount of a debt when two parties agree that an account exists representing the transaction between them. When one party states the amount and the other acquiesces by not objecting within a reasonable time, the amount is acknowledged and an agreement to pay is implied. The lower original estimate of Delta does not affect the outcome. Randle a) did not contract for the estimated amount, b) continued to pay invoices over the estimate, c) asked Delta to stop collection efforts while he tried to resolve the dispute through litigation, and d) asked Delta (through his auditors) to confirm the amount it believed it owed. Delta’s reply to the auditors’ letter and Randle’s failure to object is sufficient to create an account stated. The Court also rejected Randle’s argument that he was not personally liable. He never raised the defense in the district court and, in fact, counterclaimed in both his corporate and individual capacity. The Court concluded he waived any objection. The Court also agreed with the district court that Randle waived his breach of contract counterclaim, relying on the same facts and inferences – that Randle never objected to an invoice, never asked for the return of money, and continued to pay invoices. Finally, the parties agreed that the district court erred in applying Illinois, rather than federal, standards for postjudgment interest. The Court remanded for a recalculation.

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GIANT SCREEN SPORTS v. CANADIAN IMPERIAL BANK OF COMMERCE (January 20, 2009)

Giant Screen Sports (“GSS”) entered into an agreement with Sky High whereby GSS would distribute three Sky High films. GSS agreed to pay Sky High $3 million dollars over three years, after distribution. Sky High financed the production of one of the films through Canadian Imperial Bank of Commerce (“CIBC”). Although Sky High assigned its rights to the $3 million to CIBC, CIBC also required Sky High to obtain insurance from Export Development Canada (“EDC”) in the event of GSS’ default. EDC insisted on modifications to the distribution agreement between GSS and Sky High, including an accelerated payment schedule and a guarantee of Sky High’s obligation. In late 2002, Sky High provided contract documents to CIBC evidencing the changes and purportedly signed by GSS. GSS maintains that it did not sign and had no knowledge of the new agreements. In 2004, CIBC attempted to trigger the protections in the agreements. GSS notified CIBC that the signature was not that of the GSS officer. When presented by CIBC with the group of agreements, all purportedly bearing a GSS signature, GSS advised CIBC that it would cooperate with its investigation of forgery but only through legal process. CIBC did not tell CIBC that the signatures were forged but stated that CIBC “would not like” the answers to the questions of legitimacy. CIBC then filed an insurance claim with EDC, alleging a loss as a result of GSS’ failure to make the first payment under the agreements. In response to inquiries from EDC, CIBC stated that: a) GSS was in default, b) CIBC was unaware of any disputes that would impede payment, and c) CIBC knew of no reason why GSS did not pay. GSS brought an action against Sky High and CIBC. Against CIBC, GSS alleged that CIBC’s statements to EDC concerning GSS were defamatory per se. The district court granted summary judgment to CIBC on the ground that the statements were susceptible of an innocent construction. GSS appeals.

In their opinion, Judges Bauer, Cudahy (dissenting) and Wood reversed and remanded. The Court outlined Illinois law of defamation. To prevail on a defamation claim, a plaintiff must prove a false statement, an unprivileged publication to a third party, and damages. Illinois recognizes defamation per se, in which damages are presumed because of the obvious harm caused by the statements. Two kinds of statements constituting defamation per se are relevant to the case: those imputing an inability to discharge one’s duties and those that impute lack of ability in his or her business. Even statements meeting these criteria may be not actionable if they are reasonably capable of an innocent interpretation or are statements of opinion. The Court applied Illinois law to the three statements at issue: that GSS’ failure to pay resulted in a loss to CIBC, that GSS was still in default, and that CIBC was unaware of any dispute between GSS and Sky High that would affect GSS’ desire to pay. The Court believed that the district court’s conclusion put an undue strain on the statements’ meaning. The Court concluded that the statements, taken as a whole and in the context in which they were made, conveyed an untrue imputation that GSS was dishonest. The Court also concluded that the statements contained verifiable factual assertions and were not statements of opinion. Although GSS concedes that CIBC has a qualified privilege, the Court agreed with GSS that there existed genuine issues of fact as to whether CIBC abused the privilege – by failing to properly investigate the truth.

Judge Cudahy dissented. He believed that the majority gave only lip service to the innocent construction rule. He saw the statements of CIBC to be rather ordinary statements made during the course of a business dispute. Illinois precedent, in his view, holds that the mere statement of one’s failure to perform is not defamation per se. He would have affirmed the district court.

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HOUSKINS v. SHEAHAN  (November 25, 2008)

Virgean Houskins was an employee of the Cook County Department of Corrections. One September morning in 2001, she found herself sitting in her car in the parking lot of her place of employment, waiting for a parking space to open up. Correctional Officer Keith entered the lot and took what Houskins believed was her space. Houskins uttered some profanities about Keith (which he heard) and proceeded to park in another space. A verbal confrontation between the two ended with Keith striking Houskins in the face. Correctional Officer Calderone arrived a few moments later but did nothing. Houskins reported to work, filed an incident report, and also reported the incident to her supervisor, Tolbert. Tolbert took Houskins and Bowers to the Internal Affairs Division (“IAD”) to make out a complaint. Houskins also filed a police report. The IAD dismissed the charges against Keith and Calderone as not conclusive but upheld an obscene language charge against Houskins. Upon further department review, the finding against Houskins was upheld but the dismissal of the complaint against Keith and Calderone was reversed. Houskins filed a complaint pursuant to 42 U.S.C. § 1983 against the Sheriff and Cook County, alleging a) that the Sheriff retaliated against her for filing the complaints and charges against Keith, b) that a “code of silence” policy existed for correctional officers and those who violated it were subject to retaliation, and c) that the Sheriff employed a disciplinary system in which certain officers with clout were exempted from discipline. Houskins also brought pendant state court claims of assault and battery against Keith. At trial, the jury returned a verdict against the Sheriff and Keith. It awarded $240,000 against the Sheriff and $10,000 in compensatory and $50,000 in punitive damages against Keith. The Sheriff and Keith appeal.

In their opinion, Judges Bauer, Manion and Williams affirmed the judgment and damages award with respect to Keith and reversed and remanded with respect to the Sheriff. The Court first addressed two preliminary procedural issues. Houskins argued that the Sheriff could not appeal a denial of summary judgment after a jury verdict and also that the Sheriff waived the argument by not raising it in the final pre-trial order. The Court noted that while denials of summary judgments motions based on the sufficiency of the evidence are generally not reviewable, the Sheriff’s motion raised a question of law – whether Houskins’ speech was constitutionally protected – and was therefore appealable. The Court also held that the failure to raise it in the final pre-trial order did not constitute a waiver. On the merits of the speech issue, the Court looked to the Supreme Court’s Garcetti decision. Garcetti requires a court first to decide whether a plaintiff is speaking as a private citizen on a matter of public interest. Houskins complained of retaliation for two different instances of speech – her internal complaint and her police report. The Court concluded that her internal complaint was not protected speech. She was required to report misconduct as part of her official job responsibilities. With respect to the police report, the Court concluded that it was not part of her job responsibilities but that she was speaking about a matter of purely personal interest. Her purpose in filing the police report was not to air a grievance about conditions at the jail or her safety as an employee. The Court found that Houskins’ speech was not constitutionally protected and that the lower court therefore erred in denying the Sheriff’s motion for summary judgment. The Court added that Houskins’ Monell claims that the Sheriff had a policy of retaliation and selective discipline had to fail as well. A Monell claim cannot stand where the alleged official policy did not result in a constitutional violation.

With respect to the jury’s verdict for Houskins on her claims of assault and battery against Keith, the Court rejected each of Keith’s arguments on appeal. It held that a) the district court properly asserted supplemental jurisdiction over the state law claims since they pertained to the same set of circumstances alleged in the federal claim, b) the district court did not abuse its discretion in denying a separate trial for Keith, c) the judge’s comments to Keith’s counsel did not indicate bias, and d) the award of punitive damages was not excessive. The Court affirmed the judgment against Keith.

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

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

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

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

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

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

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MANNING v. UNITED STATES  (October 6, 2008)

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

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

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REID v. KOHL’S DEPARTMENT STORES, INC. (September 16, 2008)

On a December afternoon, Lenora Reid and a friend were shopping for men's shirts at Kohl’s Department Store. As they moved through the store from a carpeted section into a tiled section, she slipped and fell. Reid noticed a pink milkshake and cup lying in a pool on the floor. A manager arrived to assist and also noticed the spill. The manager had passed through the same area ten minutes earlier and had not seen a spill. Reid brought a negligence action against Kohl’s. On Kohl’s motion, the court granted summary judgment. The court found that (a) Kohl’s had no actual or constructive notice of the spill, and (b) the spilled shake was an open and obvious condition that created no duty on the part of Kohl’s. Reid appeals.

In their opinion, Judges Bauer, Wood, and Williams affirmed. The Court restated the Illinois law that business owners owe their invitees a duty to keep their physical premises in a reasonably safe condition. Liability is found for a slip-and-fall on a foreign substance if the invitee establishes that the business had actual or constructive knowledge of a dangerous condition. Reid attempted to establish constructive knowledge. The Court held that Reid needed to present evidence on how long the foreign substance had been on the floor. She presented evidence only of a photograph of the scene and her and her friend’s lay opinion testimony. The Court found none of that evidence strong enough to support even an inference of any measurable length of time. Conversely, the manager testified that she was in the area ten minutes before the fall and that the spill had not been there at the time. The Court observed that Illinois law does not employ a bright line test but considers the circumstances of the case to determine the existence of constructive notice. Considering the circumstances here, including Kohl’s internal procedures for monitoring for dangerous conditions and the actual monitoring done in an “almost empty” store, the Court held that no reasonable person could conclude that ten minutes is constructive notice.
 

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