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

DEGUELLE v. CAMILLI (December 15, 2011)

Michael DeGuelle worked for S. C. Johnson & Son, Inc. in its tax department. In the early 2000s, he came to believe that the company was submitting false income tax reports to the IRS. He discussed his concerns with several others within the company to no avail. He complained to Human Resources that Global Tax Counsel Wenzel was creating a hostile work environment by instructing him to engage in what he considered illegal activity. Wenzel criticized DeGuelle for taking his complaints outside the department, even becoming physically aggressive, and gave DeGuelle a negative performance review. The tension between the two continued for months. Finally, DeGuelle indicated that he was going to file a whistleblower complaint with the Department of Labor. The company offered to pay some of his attorney's fees if he would sign a release and confidentiality agreement. He declined and filed the complaint, attaching financial documents and internal communications. He continued to press the issue internally at the company as well. He provided company counsel with a lengthy memorandum detailing his concerns. The company offered one-year severance if he resigned and signed a confidentiality agreement. DeGuelle refused. A few weeks later, the company began an investigation of DeGuelle relating to the documents he disclosed in his complaint. He was eventually terminated for disclosing company documents. The company filed suit in state court for breach of contract and for the recovery of documents. DeGuelle filed suit in federal court, alleging RICO violations, breach of contract, wrongful termination, and defamation. Judge Stadtmueller (E.D. Wis.) dismissed the RICO claims with prejudice and declined to exercise jurisdiction over the state law claims. DeGuelle appeals.

In their opinion, Seventh Circuit Judges Flaum, Kanne, and Hamilton reversed and remanded. The Court addressed the RICO pleading requirements. Under §1964(c), DeGuelle must allege that he was injured by reason of a § 1962 violation. DeGuelle alleged violations of subsections 1962(c) and 1962(d). Subsection (c) requires a "pattern of racketeering activity" allegation. Northwestern Bell requires that the alleged predicate acts of racketeering be related to each other and that there is a continuing threat. Finally, subsection (c) requires "but for" causation between the racketeering activity and the plaintiff's injury. Since DeGuelle’s alleged injuries were related only to the retaliation and since the retaliatory attacks were not themselves a pattern of racketeering activity, the Court concluded that the retaliatory activity must be related to the tax fraud activity. The Court found the district court erred in concluding that they were unrelated because they involved different people, motives, and victims. The retaliatory conduct was inherently related to the scheme that DeGuelle exposed. Specifically relying on the Sarbanes-Oxley whistleblower provisions, the Court stated that courts must examine the facts in each case to determine if the retaliation is related to the underlying wrongdoing. The Court concluded, on the record before it, that DeGuelle satisfied the Northwestern Bell test for his subsection (c) allegation. DeGuelle also alleged a subsection (d) claim. Under subsection (d), DeGuelle must allege an agreement to commit at least two predicate acts. The Court concluded that DeGuelle adequately alleged an agreement among the tax department defendants. Again, since DeGuelle's alleged injury was related only to the retaliatory conduct, the Court inquired whether DeGuelle adequately alleged an agreement between the participants in the tax fraud and the participants in the retaliation. It concluded that the complaint adequately, although sparsely, alleged that the retaliatory actors aided the tax fraud actors in concealing their conduct and thus were part of the original tax fraud conspiracy.

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WILLIAMS v. ROHN AND HAAS PENSION PLAN (September 2, 2011)

In 2002, Gary Williams filed a class action against the Rohm and Haas Pension Plan, alleging that his lump-sum distribution should include cost-of-living adjustments. The district court granted summary judgment to the class. The Seventh Circuit affirmed and remanded for a damages calculation. On remand, the Plan took the position that class members who took early retirement were entitled to no damages. The parties reached a settlement before the issue was adjudicated. One group of class members objected to the settlement on the ground that it discriminated against early retirees, who (they maintained) should have been given separate counsel. The group also objected to the amount of fees awarded. Another objector claimed that the settlement released his unrelated claims and that he should have been allowed to opt out. Judge Barker (S.D. Ind.) approved the settlement. The objectors appeal.

In their opinion, Seventh Circuit Judges Bauer, Kanne, and Evans (who, as a result of his death, took no part in the decision) affirmed. First, the Court affirmed the district court's fairness finding with respect to the early retirees. The Court noted that the early retirees received $60 million as part of the settlement on a claim that rested on unsettled law. The district court had already heard arguments on the issue and was well positioned to assess the settlement's fairness. Her decision was not clearly erroneous. Likewise, her decision not to create a separately represented subclass was not an abuse of discretion. With respect to the individual objector, the Court concluded that the settlement only released pension plan related claims. The district court did not abuse its discretion in denying his opt out. Finally, with respect to the fee award, the Court stated that, given the district court's application of the correct methodology and intimate familiarity with the litigation, it did not abuse its discretion in the fee award.

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EVERETT v. COOK COUNTY (August 24, 2011)

Cook County, Illinois faced a severe budget crisis in 2006. The County President instructed the Chief of the Bureau of Health to submit budget cut recommendations. One of the Bureau of Health functions was the Cermak Health Services, which provided medical and dental services to Cook County Jail inmates. The budget team identified Cermak’s dental program as a good source of some budget cuts. The Bureau Chief agreed to a recommendation that reduced the number of dentists from five to one. In deciding whom to keep among the five, the County looked for management experience, flexibility, productivity, and skills. The County ultimately chose Dr. Ronald Townsend as the dentist who best met those criteria. One of the five dentists who was not chosen was Dr. Carol Everett, a Caucasian woman who had been with Cermak for almost 25 years. Dr. Everett filed an appeal, which was denied. Everett filed suit under Title VII, alleging ethnicity discrimination, and under § 1983 and the Shakman decree, alleging political discrimination. Judge Kendall (N.D. Ill.) granted summary judgment to the County. Everett appeals.

In their opinion, Seventh Circuit Judges Kanne, Evans (who, due to his death, did not participate in the decision), and Sykes affirmed. The Court first addressed and rejected Everett's spoliation argument that the County destroyed certain documents containing notes concerning the layoffs. First, she did not identify any evidence of bad faith, a requirement before a negative inference is imposed. Second, the record does not support a conclusion that the documents were destroyed to eliminate adverse evidence. On the merits, the Court first addressed her political activity discrimination claim, in which she alleges that the decision to retain Everett was due to his political donations. The Shakman decree and the First Amendment prohibit firing an employee for political reasons. Under both theories, however, the plaintiff must show a causal relationship between the employment decision and the political considerations. Everett relied on procedural irregularities in the process to establish that causal relationship. The Court concluded, however, that her evidence was insufficient to establish such a relationship. Even if such a relationship had been established, however, Everett would still fall short because there is no evidence in the record that the decision-makers were aware of the political activity -- or lack thereof -- of either Everett or Townsend. The Court turned to the ethnicity discrimination claim. It concluded that Everett failed to show pretext. Although she provided some evidence of her possible superiority to Townsend in some areas, it was insufficient to show that the reasons the County gave for selecting Townsend were suspect. At most, they could show that the County made a hurried, poorly researched, and possibly poor decision. That is not enough to show pretext.

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HICKS v. AVERY DREI, LLC (August 17, 2011)

Chance Felling owned and operated Avery Drei, LLC, a hotel management company. In 2006, Avery Drei was constructing a hotel near Indianapolis, Indiana. Lisa Hicks began working as a security guard at the hotel construction site in July of 2006. The hotel opened in October and she became a front desk clerk. During her stint as a security guard, Felling paid her in cash. Once she became a desk clerk, she received her regular wages by check. After Hicks' employment was terminated, she brought suit against Avery and Felling. She sought overtime wages and accrued vacation pay. The case languished for several years until February of 2010, when the district court set a June 2010 trial date. In February, Hicks asked Felling and Avery to supplement certain discovery responses. The defendants failed to respond until ordered to do so by the court in May. Then, they supplemented their answers to the requests identified by Hicks and also supplemented their response to an interrogatory that asked them to identify all cash payments to Hicks. Their original response identified seven cash payments, all while Hicks was working as a security guard. Their supplemental response added six additional payments, all while Hicks was working as a desk clerk. Hicks moved to bar any evidence of the additional payments, claiming the late notice was “trial by ambush.” The district court denied the request. At trial, Judge Magnus-Stinson (S.D. Ind.) granted a directed verdict on the vacation pay claims and on the security guard part of her overtime claim. The jury returned a verdict against Hicks on the desk clerk part of her overtime claim. At Hicks' request, the court waived transcription fees relating to the overtime claim but refused to waive with respect to that portion of the record relating to the vacation pay claim. Hicks appeals.

In their opinion, Seventh Circuit Judges Cudahy (concurring in part and concurring in the judgment), Flaum, and Kanne affirmed. On appeal, Hicks challenges the directed verdict on the vacation pay claim, challenges the partial directed verdict on the security guard overtime claim, and challenges the district court's refusal to exclude the evidence of additional cash payments. The Court concluded that the vacation pay claim was frivolous. Hicks admitted that she and Felling had an agreement that she would earn vacation time only after she had worked for a year. Her contention that Indiana law requires pro-rata vacation pay from day one in the absence of a written company policy to the contrary is simply wrong. Any agreement to the contrary, which is admittedly present here, is sufficient. The Court turned to the cash payment evidence. It noted that it would normally review such a ruling for abuse of discretion. Here, however, Hicks did not provide transcripts of the argument or ruling on the motion in limine. Without a meaningful basis on which to review the ruling, the Court concluded that Hicks forfeited her challenge. It also chose not to conduct a full plain error review, since it could identify no prejudice -- no extraordinary circumstances -- no miscarriage of justice. The Court turned to the security guard overtime claim. In order to prevail, Hicks had to prove that her employer was covered by the Fair Labor Standards Act. The district court concluded that she was "engaged in commerce" while a desk clerk, and therefore covered by the Act, but was not while working as a security guard. Hicks argued that she was covered because Felling's operation of several businesses made him an "enterprise engaged in commerce" under the Act. The test for enterprise coverage is that the businesses must be engaged in related activities, under a unified operation, have a common business purpose, and engage in $500,000 of business annually. The district court found that Hicks’ proffered common business purpose -- a profit motive -- did not satisfy the Act's requirements. The Court noted that Hicks advanced a different theory on appeal. It found that argument forfeited. With respect to the profit motive argument, the Court agreed with the district court that it was not enough to amount to enterprise coverage. Finally, the Court rejected the argument that the jury should have been allowed to decide whether Felling Hotels had earnings above the $500,000 threshold because Felling testified that it was possible. Felling Hotels was not a defendant, Felling Hotels was not her employer, and Hicks presented no affirmative evidence of its gross revenue.

Judge Cudahy thought that Felling’s admission against interest that Felling Hotel could have had revenue exceeding $500,000 should have been enough to avoid the directed verdict. But since Hicks never explained how Felling Hotels being subject to the FLSA related to the defendants’ liability, he concurred in the result.

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GOMEZ v. ST. VINCENT HEALTH (August 15, 2011)

St. Vincent Health operates a number of hospitals and health care facilities in central Indiana and employs thousands of people. Federal law obligates it to give timely notice to any qualified person who leaves it employ of his or her right to extended health insurance coverage under COBRA. St. Vincent uses a third-party administrator to manage the process of sending out these COBRA notices. To monitor and ensure its compliance with this requirement, St. Vincent also established an oversight system, pursuant to which an outside accounting firm audited its program, and a call center, where current and former employees can get benefits questions answered. Notwithstanding these safeguards, three former employees filed a class-action against St. Vincent in February of 2006 alleging that many employees received their COBRA notices late or not at all. St. Vincent conducted an internal investigation and concluded that over 200 individuals in the preceding 21 months failed to receive timely notices. It provided notices to each of those individuals, allowed a retroactive benefits selection, and even offered a payment plan if the individual had trouble becoming current with premium payments. Meanwhile, the district court declined to certify the class for several reasons, including inadequate class counsel, and granted summary judgment to St. Vincent on the individual claims. The plaintiffs filed an appeal, but later withdrew it. Undaunted, plaintiffs' counsel solicited new class representatives from information it acquired in the first case and filed a new, almost identical, class action. The two named plaintiffs are Blanca Gomez and Joan Wagner-Barnett. Gomez received her COBRA notice 17 months late but she testified that she would not have elected to extend her benefits. Wagner-Barnett also received notice 17 months late, testified that she would have extended coverage, and contends that she incurred almost $1000 in out-of-pocket expenses that she would not have otherwise incurred. Judge Barker (S.D. Ind.) denied class certification on inadequacy of counsel grounds. On the individual claims, the district court concluded that the circumstances did not warrant a statutory penalty, that Gomez suffered no damage since she would not have elected extended coverage anyway, and awarded Wagner-Barnett $396 in damages, the difference between her out-of-pocket prescription costs and the premium she would have paid. Gomez and Wagner-Barnett appeal.

In their opinion, Seventh Circuit Judges Cudahy, Kanne, and Tinder affirmed. The appeal raises three issues: the amount of Wagner-Barnett’s damages, the propriety of a statutory penalty, and class certification. The Court first questioned the propriety of any damages. ERISA’s enforcement provision does not authorize compensatory damages -- only equitable relief and "such other relief" as is proper. Here, the district court followed a practice used by other district courts (and at least condoned by Courts of Appeals) to include, as "such other relief," a party's medical expenses less the premiums that would have been paid. Although "reticent" to condone such an approach, the Court found no error. The amount was small, it did not contradict ERISA’s plain language, and St. Vincent did not appeal on that ground. With respect to Wagner-Barnett’s request for additional medical expenses, the Court concluded that the district court did not abuse its discretion in denying those expenses. The Court turned to statutory penalties. Under the statute, the district court could have imposed as much as $110 a day in statutory penalties. The Court found no error in the district court's approach. It considered the right factors, including any prejudice to the former employee and the nature of the company’s conduct. There is no evidence of bad faith or gross negligence on the part of St. Vincent. Furthermore, there is no evidence of any prejudice to the plaintiffs. When same Vincent discovered its noncompliance, it contacted the former employees, provided notice, allowed for a retroactive election, and even offered a payment plan to catch up on the unpaid premiums. Finally, the Court turned to the class certification issue. Again, it found no error. It noted that counsel did not even address much of the district court's rationale with respect to his diligence, respect for judicial resources, and promptness. 

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BURNELL v. GATES RUBBER CO. (July 27, 2011)

Eddie Burnell, an African-American male, worked in Gates Rubber Co.'s tool room from 1993 to 1996. He claims that he was subjected to racial discrimination during this time. After several years elsewhere, he returned to the tool room in 2003. In December of 2006, his supervisor instructed him to perform a task. When he did not do so, the supervisor issued a written warning. Burnell refused to accept the warning, claiming that he did not have time to perform the task. Burnell complained to the plant manager that the warning was inappropriate. His principal excuse was that he did not have time to complete the task. He later added that he had safety concerns. At a later meeting, the plant manager accused Burnell of "playing the race card." The employee relations manager convinced the plant manager not to fire Burnell if he signed a commitment letter. They presented Burnell with a commitment letter that implied that he was guilty of insubordination and dishonesty. He refused to sign the letter. He was fired. Burnell brought suit, alleging Title VII discriminatory discharge and retaliatory discharge claims and a § 1981 discrimination claim. Judge Kapala (N.D. Ill.) granted summary judgment to Gates. Burnell appeals.

In their opinion, Seventh Circuit Judges Kanne, Rovner, and Sykes affirmed in part and reversed and remanded in part. The Court first addressed his Title VII discriminatory discharge claim along with his § 1981 claim, which the Court noted are nearly identical. The Court rejected Burnell's claim under the direct method. Most of Burnell's circumstantial evidence related to the 1993-1996 period. The sum of his circumstantial evidence would not permit a rational jury to make a causal connection between Burnell’s termination and race discrimination. The Court also rejected the claim under the indirect method since he could satisfy neither the “met expectations” nor the "similarly situated" prongs of the test. The Court turned to his Title VII retaliatory discharge claim. Burnell clearly suffered a materially adverse employment action and engaged in statutorily protected activity. In fact, he complained quite regularly about what he felt were discriminatory practices in the workplace. To succeed on his retaliation claim, therefore, he needed only to connect his termination with his complaints. The Court relied almost exclusively on the plant manager's "playing the race card" comment, along with the history of discrimination complaints, to conclude that his claim should have survived summary judgment.

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TROVARE CAPITAL GROUP v. SIMKINS INDUSTRIES (July 20, 2011)

In late 2006, Leon Simkins decided to sell the family owned folding carton business and its affiliates, in which he was a controlling shareholder. He engaged Mesirow Financial to act as broker. Trovare Capital Group was interested and contacted Mesirow. In late May of 2007, Simkins and Trovare entered into a letter of intent ("LOI"). The agreement was generally nonbinding but did give Trovare a 90-day exclusivity period and obligated Simkins to pay a $200,000 fee if it breached the exclusivity period or gave Trovare written notice of a unilateral termination of the negotiations. The LOI included a termination date of September 30, 2007, after which neither party any obligations. Shortly afterward, the negotiations went south. Trovare's environmental consultant concluded that all real properties involved needed further environmental testing. Simkins and his family became more and more concerned about their own liabilities that would arise from a sale. At one point, Simkins told his own negotiating team that he did not want to go through with the deal. Although the parties continued to communicate, both Mesirow and Trovare began doubting the sellers’ sincerity. Trovare even demanded the breakup fee as early as August. After the communications stopped, Trovare brought suit against Simkins for the $200,000 fee. Judge Gettleman (N.D. Ill.) granted summary judgment to the defendants, concluding that the undisputed facts established that they did not terminate the negotiations and that they negotiated in good faith. Trovare appeals.

In their opinion, Circuit Judges Kanne and Evans and District Judge Clevert reversed and remanded. The Court quickly dispensed with Trovare's argument that it was entitled to the contractual $200,000 fee. The LOI imposed that obligation on the sellers only if they breached the exclusivity period or gave written notice of the termination of negotiations. Neither occurred here. Trovare also alleged, however, a breach of the implied covenant of good faith and fair dealing. The Court noted that Trovare could prevail on that claim if it proved that the sellers had decided to terminate negotiations but simply refused to provide a written notice. The Court disagreed with the district court that the undisputed record showed continued good faith negotiations beyond the termination date. The Court concluded that a reasonable trier of fact could conclude that the continued communications were not actually negotiations. The Court pointed to several parts of the record, including: a) Simkins’ statement that he “definitely" did not want to consummate the deal, b) Simkins later willingness to negotiate only if Trovare agreed to five demands, and c) the sellers’ misrepresentations that the second phase environmental inspections had already begun. Summary judgment for the defendants was error.

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CARDENAS v. CITY OF CHICAGO (July 20, 2011)

Chicago Police Officer Alejandro Gallegos obtained a search warrant that authorized a search of Maria Cardenas' apartment. Gallegos and other officers executed the warrant on December 14, 2007. According to Cardenas' complaint, the officers entered without knocking, threatened Cardenas and others with guns, and searched recklessly. They found nothing and left. Cardenas and the other apartment occupants filed suit against Gallegos and the City of Chicago. The Cook County Sheriff successfully served the City. They attempted to serve Gallegos through the Police Superintendent's Office but the summons was returned unserved in May 2008. In November, plaintiffs’ counsel wrote to the City’s counsel and asked the City to waive service on Gallegos or to provide his home address. In a telephone conversation in December, the City’s counsel informed plaintiffs’ counsel did it could not do the former and would not do the latter. The City and Gallegos moved to dismiss in September of 2009. Gallegos sought dismissal because he had never been served. The City sought dismissal under the Tort Immunity Act on the grounds that the City could not be liable for Gallegos's actions where Gallegos himself is not liable. Plaintiffs opposed the motion and also obtained an alias summons that they served properly through the Police Department’s Office of Legal Affairs on November 9. Judge Norgle (N.D. Ill.) granted the motions to dismiss. He concluded that plaintiffs had not served Gallegos in a timely manner and found no good cause that would support an extension. He also agreed with the City that there was no municipal liability without Gallegos in the case. Plaintiffs appeal.

In their opinion, Judges Posner, Kanne, and Hamilton affirmed. Any person that files a lawsuit has 120 days within which to serve a copy of the summons and complaint on each defendant. A district court judge has the discretion to extend the 120-day period if there is a showing of good cause. The Court noted that it reviewed such decisions on an abuse of discretion standard. The Court first rejected plaintiffs' contention that the May 2008 attempted service on the Superintendent was sufficient. That attempt occurred before the case was removed so Illinois law applies. Under Illinois law, service on a defendant’s employer is not sufficient. Next, the Court found no abuse of discretion in the denial of an extension. It is clear that the district court considered a number of factors, including the fact that the expiration of the statute of limitations would bar a refiling of the suit. The plaintiffs did not perfect service for over a year and a half after filing the suit, they took very few steps to attempt to do so, and they knew of the consequences of the failure to do so. The Court could not conclude that the district court abused its discretion in failing to grant an extension. Finally, the Court conceded that a dismissal of this type is usually made without prejudice. Here however, where the statute of limitations has run, a dismissal with prejudice is appropriate.

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BANK OF AMERICA v. VELUCHAMY (June 16, 2011)

Pethinaidu and Parameswari Veluchamy owed Bank of America $39 million. When they defaulted, the Bank brought suit and obtained a judgment. The Bank began post-judgment proceedings to locate assets to satisfy the judgment. The Veluchamys were not very cooperative during those proceedings. They were slow in providing some information and refused to provide other information, asserting a Fifth Amendment privilege. Meanwhile, mostly through other sources, the Bank learned that the Veluchamys had transferred almost $20 million out of U.S. banks and into Indian banks. The Bank sought an emergency order requiring the Veluchamys to produce the transferred funds and to surrender their passports until they did so. Judge Shadur (N.D. Ill.) granted the Bank's request and ordered the Veluchamys to relinquish their passports. The Veluchamys appeal.

In their opinion, Judges Posner, Kanne, and Tinder affirmed. The Court first addressed its jurisdiction since the order obviously was not a final judgment. The Court concluded that it met the requirements for the collateral order exception -- it conclusively determined a question, the question is separate from the merits, and the decision would be unreviewable after a final judgment. A district court's powers in a post-judgment proceeding are governed by state law. Illinois law provides a number of tools, including the power to compel a party to produce funds under its control. The Court concluded that the power to compel a party to produce funds implied a power over the party itself. The Court emphasized that the such power is minimal and should be exercised only when necessary. Here, the Veluchamys had transferred most of their funds out of the country, they seemed to have significant assets in India and elsewhere, and they were reluctant to provide information about their assets. The Court concluded that this was the rare case where an order to surrender passports was warranted.

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MOORE v. VITAL PRODUCTS (May 25, 2011)

Raymond Moore delivered and installed medical equipment for Vital Products. He claims that other Vital employees, including his supervisor, exposed him to sexual paraphernalia and pictures and made unwelcome sexual remarks. Vital suspended Moore for poor performance in January of 2005. On February 16, shortly after his return from the suspension, Moore injured his back. He has not worked at Vital since. Vital sent a COBRA notice to Moore on February 21. The contents of the letter suggested that Moore was no longer employed at Vital. Moore filed an EEOC charge on December 7, 2005. The charge included allegations of hostile work environment based on race and gender but did not include allegations of unlawful discharge. Moore brought suit pursuant to Title VII, alleging a hostile work environment, discriminatory discharge, and retaliatory discharge. He also alleged retaliatory discharge under the Illinois Workers' Compensation Act. Magistrate Judge Schenkier (N.D. Ill.) granted summary judgment to Vital but denied its request for sanctions. Moore appeals -- Vital cross-appeals the denial of sanctions and seeks sanctions on appeal.

In their opinion, Chief Judge Easterbrook and Judges Kanne and Wood affirmed in part, reversed in part, and remanded. The Court first affirmed the dismissal of the hostile work environment claim. Since Moore filed his EEOC charge on December 7, he must present evidence of a hostile work environment within the 300-day window, or after February 10. He failed to present any evidence of hostile work environment between February 10 and February 16, his last day on the job. The Court next affirmed the dismissal of his Title VII discriminatory discharge claim. A Title VII plaintiff can only bring claims that were included in his EEOC charge, or at least reasonably related to the contents of the charge. Moore did not include in his EEOC charge any allegations relating to his discharge. In fact, he stated in his charge that he was on medical leave, not discharged. The Court reversed, however, summary judgment on the Illinois Workers' Compensation Act claim. It is not clear whether Moore: a) is an employee on leave, b) abandoned his job in February 2005, or c) was discharged. The Court found genuine issues of fact with respect to Moore's status and, if he was discharged, whether the discharge was motivated by his intention to file a workers' compensation claim. Finally, the Court affirmed the district court's sanctions ruling and declined to impose its own.

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STONE v. BOARD OF ELECTION COMMISSIONERS FOR THE CITY OF CHICAGO (May 4, 2011)

The City of Chicago requires that mayoral candidates collect 12,500 registered voter signatures over a 90 day period in order to be listed on the ballot. A number of individuals brought suit in federal court, alleging constitutional violations. In late 2010, the plaintiffs moved for a preliminary injunction. They sought to prohibit enforcement of the signature requirement for the February 2011 election. Judge Dow (N.D. Ill.) denied their request for an injunction. Plaintiffs appeal.

In their opinion, Judges Kanne, Rovner, and Sykes dismissed. The Court noted that the February 2011 election had taken place two months before the appeal was even argued. The only relief plaintiffs sought in their motion for a preliminary injunction related to that election. The relief they seek is no longer available. The Court noted that it lacks the power to decide questions that cannot affect litigants’ rights. The Court noted the familiar "capable of repetition, yet evading review" mootness exception. But that exception does not apply here. The plaintiffs' claims will not evade review. Their underlying suit challenging the constitutionality of Chicago's signature requirement remains pending.

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UNITED STATES v. GEORGE A. WHITING PAPER CO. (May 4, 2011)

The Fox River flows through central and eastern Wisconsin. The river is heavily contaminated with PCBs. The most prevalent PCB is Aroclor 1242 but the river also contains Aroclor 1254 and 1260. The United States brought suit under CERCLA against 11 potentially responsible parties, including Appleton Papers Inc. and NCR, in 2009. Appleton and NCR are currently involved in a cleanup at the river and are seeking contribution from many other PRPs. The United States filed suit against several de minimis defendants and provided notice of proposed settlements. Appleton and NCR objected. After revising one settlement upward based on the objection, the United States moved for approval of the settlements. Appleton and NCR intervened. Judge Griesbach (E.D. Wis.) approved the settlements. Appleton and NCR appeal.

In their opinion, Circuit Judges Kanne and Tinder and District Judge Herndon affirmed. The Court first noted its "double dose" of deference. The district judge should approve the settlement if it is fair and reasonable and consistent with CERCLA. The Court, in turn, reviews that decision for an abuse of discretion only. The Court first concluded that there was a substantial amount of information in the record which provided a rational basis for the district court's conclusion. The Court then rejected, simply because it was false, appellants' contention that the government's comparative fault analysis did not include all PCB discharges. Finally, the Court concluded that Appleton and NCR failed to meet their "heavy burden" of showing that the government was wrong in its toxicity calculations. The district court did not abuse its discretion in finding those calculations reasonable.

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HUSS v. IBM MEDICAL AND DENTAL PLAN (April 13, 2011)

Eileen Huss was an IBM employee and participated in the IBM Medical and Dental Plan. Huss’ son Joseph had a mental disability and was entirely dependent on Huss and her husband for his support. In 2005, Joseph was 24 years old and enrolled in his father's medical plan. But Huss wanted him enrolled in her plan at the time of her anticipated retirement at the end of 2006. Plan representatives told her that her son would be eligible to enroll at that time and that she need not take any additional steps until her retirement. In January of 2007, a month after her retirement, a Plan representative told her that Joseph was ineligible because she had not submitted a written application years earlier (60 days before he turned 23). Huss requested a summary of the plan and any relevant material. A plan representative responded that the 2006 Summary Plan Description (SPD), which Huss already had, was the only relevant document. Huss specifically requested plan language that was in effect in 2004, the year Joseph turned 23. Huss retained a lawyer who asked for reconsideration and again requested plan language and documents from the earlier years. Plan administrator R. A. Barnes denied relief based on language from the 2006 SPD. Barnes did provide some of the earlier language. Huss made her final appeal based on the 2004 SPD language, which did not require a written request. Barnes again denied eligibility. Huss brought suit pursuant to ERISA against both the Plan and Barnes. She sought benefits and statutory damages for failure to provide documents. Judge Zagel (N.D. Ill.) granted summary judgment to Huss on both counts, assessed statutory penalties of over $15,000, and awarded fees and expenses of over $86,000. Defendants appeal.

In their opinion, Judges Kanne, Williams and Tinder vacated and remanded on the claim for benefits, affirmed in part and reversed in part on the statutory penalties, and vacated and remanded the award of fees and expenses. The Court began with the eligibility issue. Since the administrator has discretion under the Plan’s language, Barnes' decision is reviewed under an arbitrary and capricious standard. The Court recognized Hackett's "sweeping language" to the effect that the plan in effect at the time a claim is denied is the plan that controls. But the Court noted that the type of dispute in Hackett was quite different and concluded that the nature of the dispute dictates whether earlier language might control. Here, where the Plan's denial is based on failure to satisfy a condition precedent, the controlling plan language must be that which was in effect when the claimant's ability to satisfy the condition precedent expired. In this case, that is the language in effect in 2004. Barnes' exclusive reliance on the 2006 SPD makes her actions arbitrary and capricious. With respect to eligibility under the earlier language, the Court found the earlier language ambiguous regarding the need for a parent's request for coverage continuation. Because of the ambiguity and the a plan administrator’s broad discretion, the Court concluded that Barnes’ interpretation -- that an employee had to make a request within 60 days of the dependent’s 23rd birthday -- was not unreasonable. A genuine issue of fact existed, however, with respect to whether Huss actually made that request. The Court remanded to the administrator for further development of the record and other proceedings. The Court next addressed the statutory penalty award. It affirmed the penalties associated with the Plan's original failure to send Huss the 2003 plan documents. The Court had already determined that this was the controlling document and the Plan did not produce it within the statutory time period. The district court’s second statutory penalty, however, related to defendant’s failure to produce a number of SPDs published between 2004 and 2007. Although the Court conceded that these documents would show the evolution of the condition precedent language and may have been helpful to Huss, it concluded that they did not fall within the category of documents that ERISA required defendants to produce. The district court therefore abused its discretion in awarding those penalties. Finally, the Court turned to the fee award. It noted that the Supreme Court had recently concluded, contrary to prior Seventh Circuit jurisprudence, that an ERISA plaintiff may still be awarded fees if her case is remanded to the administrator if she shows "some degree of success." The Court expressed its disagreement with some of the district court's findings but ultimately decided simply to vacate the award, given its treatment of the merits. The district court will have another opportunity to consider a fee award after remand.

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MARCUS & MILLICHAP INVESTMENT SERVICES OF CHICAGO v. SEKULOVSKI (March 23, 2011)

Marcus & Millichap Real Estate Investment Services (M&M) is a national commercial real estate brokerage firm with subsidiaries operating in several states. The subsidiaries operate independently, as distinct entities, and enter into their own contracts with their salespersons as independent contractors. The subsidiaries are required to incorporate M&M's independent contractor policies into these agreements. Tony Sekulovski worked as a salesperson with M&M’s Ohio subsidiary from 1999 until 2005, when he moved to Chicago and began working with the company's Illinois subsidiary. Contrary to the policy, Sekulovski never entered into a written independent contractor agreement. Salespeople were not paid a salary but were compensated with commissions. Generally, a salesperson and the subsidiary divide project commissions evenly. A salesperson can enjoy up to a 70/30 split, however, as he reaches certain annual sales thresholds. In addition, if more than one salesperson is involved in a deal, they split the salesperson's side of the commission based on an allocation reflecting the contribution each made to the deal. In 2006, Sekulovski and another agent, Mark Luttner, collaborated on many deals. Throughout most of the year, they shared the salespersons' commission equally. Once Sekulovski reached his commissions target, however, they began submitting allocations that attributed a much higher portion of the commission to Sekulovski. M&M claims that he did so in order to increase the salespersons' share of the total commission and that he kicked back an appropriate allocation to Luttner. Smith left M&M Chicago in June 2007. Before he did so, he directed two commissions be paid to him rather than the company. He also later retained commissions for deals that began while he was in Chicago but did not close until later. The company sued Sekulovski for breach of contract, unjust enrichment, conversion, fraud, and tortious interference. Sekulovski counterclaimed for breach of contract, unjust enrichment, unlawful withholding of wages, and tortious interference. At trial, Luttner testified that he and Sekulovski artificially inflated Sekulovski’s allocation in order to maximize the salespersons' commissions. Judge Leinenweber (N.D. Ill.) granted judgment as a matter of law to M&M on Sekulovski’s statutory wage claim and a jury found for M&M and against Sekulovski on all other claims. Sekulovski appeals.

In their opinion, Chief Judge Easterbrook and Judges Bauer and Kanne affirmed. As a preliminary matter, the Court concluded that the parties had an implied contract and that the terms of M&M’s independent contractor policy governed. The Court then addressed Sekulovski’s arguments on appeal, which it placed in four categories: evidentiary rulings, jury instructions, the Illinois Wage Payment and Collections Act, and post-trial motions. The evidentiary objections went principally to the district court's limitation on Sekulovski’s ability to cross-examine Luttner on bias. Although the Court conceded that witness bias is generally admissible for impeachment purposes, it concluded that the district court did not abuse its discretion. The district court found some of it to be of little value, some that would cause confusion, and some that was inadmissible hearsay. The Court added that the jury heard plenty of evidence of Luttner's hostility toward Sekulovski. The only jury instruction objection that Sekulovski preserved was his argument that M&M’s damages should have been calculated based on its loss rather than Sekulovski’s overpayments, arguing that part of the overpayments would have rightfully gone to Luttner. The Court concluded that the appropriate measure of damages was the amount of commissions that Sekulovski received that he would not otherwise have received but for his fraud. With respect to the Wage Payment Act, the Court questioned the district court's finding of fact that Sekulovski was an independent contractor rather than an employee. Notwithstanding its lack of confidence in the district court's rationale, the Court affirmed the dismissal on the basis of the jury's finding that Sekulovski was not due the commissions he claimed were due him under the Act. Finally, the Court found that the district court did not abuse its discretion in denying Sekulovski's post trial motions.

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KATHREIN v. EVANSTON (March 11, 2011)

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

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

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SUTHERLAND v. WALMART STORES (January 21, 2011)

Arturo Aguas and Maria Sutherland worked together in the deli section of a Walmart store in Seymour, Indiana. They had worked together for years without incident -- but that changed on December 11, 2006. On that day, Aguas assaulted Sutherland in the deli cooler. He kissed her and fondled her and gave her an inappropriate Christmas card. Sutherland reported the incident to her supervisor the following day. A Walmart manager interviewed one co-worker on that day and another co-worker the following day. They continued their investigation throughout December, while Aguas was on vacation. When confronted upon his return, Aguas admitted some inappropriate conduct but denied the most serious allegations. The company decided that it could not substantiate all the allegations but disciplined Aguas severely for those that they could substantiate. The company also adjusted both employees' time schedules so that they rarely worked at the same time and also assigned them to workstations almost 80 feet apart when they did work together. Not satisfied with the company's response, Sutherland filed a police report. The police investigation was more successful than the company's. Aguas ultimately admitted the allegations and pled guilty to a sexual battery charge. Walmart revisited its investigation and terminated Aguas' employment. Sutherland took medical leave shortly thereafter for stress. Walmart terminated her employment when she failed to return to work, even after her leave expired. Sutherland brought suit against Walmart, alleging a hostile work environment and negligent infliction of emotional distress. Judge Lawrence (S.D. Ind.) granted summary judgment to Walmart. Sutherland appeals.

In their opinion, Seventh Circuit Judges Cudahy, Flaum, and Kanne affirmed. The Court assumed that the harassment was severe enough to create a hostile work environment and addressed only the issue of employer liability. Sutherland presented two theories -- a failure to prevent the assault theory based on an incident two or three years earlier in which Aguas was accused of harassment and a failure to investigate theory. The Court rejected the first theory based on its opinion in Longstreet in which it found no employer liability on very similar facts (one prior incident, probably not rising to the level of actionable harassment, properly investigated). On the second theory, the Court conceded that employer liability can arise when its investigation is not prompt and adequate. Here, the Court found that Walmart's investigation was prompt and adequate and that its corrective actions were reasonably likely to end the harassment. There is, therefore, no basis for employer liability and summary judgment was proper. The Court also rejected Sutherland's "underdeveloped" negligent infliction of emotional distress claim. To the extent the claim is based on pre-assault actions, it fails because Walmart was not on notice that Aguas was likely to assault her. To the extent that the claim is based on post-assault actions, it fails because Sutherland has not even alleged a physical impact, a requirement of Indiana law.

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ALLORD v. ASTRUE (January 13, 2001)

Gary Smith served as a Marine in Vietnam. He now suffers from post-traumatic stress disorder. He applied for disability benefits in October of 1996. He asserted that he suffered from the disability since his retirement from the Marine Corps in 1987. Since he was last eligible for Social Security benefits in December of 1992, he had to show that he was disabled at that time. He is entering his fifteenth year of trying to do just that. A local agency denied his claim, an ALJ denied his claim, the agency stipulated on review to a remand for consideration of additional evidence, a different ALJ denied his claim, a district court affirmed the denial, the Seventh Circuit reversed and remanded to the Agency, a third ALJ denied his claim, and a district court has reversed and remanded. Judge Crabb (W.D. Ill.) identified two errors in the last ALJ decision. First, he failed to follow the directions from the Seventh Circuit in assessing a witness's credibility. Second, he did not adequately explain his reasons for discounting a treating physician's opinion and adopting the opinion of another. Nevertheless, the district court declined Smith's request to remand with instructions to award benefits. Smith appeals.

In their opinion, Seventh Circuit Judges Kanne, Williams, and Tinder affirmed. The only issue on appeal is whether the record below requires a finding that Smith was disabled in December 1992. The Court first noted that it would apply an abuse of discretion standard rather than the de novo review typically applied in a Social Security benefits case. That is because it is the claimant appealing the district court's refusal to remand for the award of benefits. The Court found no abuse of discretion. First, although Smith is correct that the ALJ erred in not adequately describing why he discounted the treating physician's testimony, the record does not support the conclusion that he could not do so. In fact, the district court itself noted that contradictory inferences could be drawn from the testimony and Smith does not challenge that reasoning. Second, the Court rejected Smith's argument that the agency’s "obduracy" is sufficient reason to award benefits. The record must provide the reason to award benefits. Third, the Court rejected Smith's argument that a remand would be futile. He expressed confidence that the agency would not continue to ignore its directions and those of the district court.

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TRINITY HOMES LLC v. OHIO CASUALTY INSURANCE CO. (December 22, 2010)

Literally thousands of hopeful Indiana homeowners entered into contracts with Trinity Homes, an Indiana general contractor, to construct residential housing. Trinity, in turn, delegated the actual construction of the homes to a number of subcontractors. A significant number of the homes had structural damage. Many of the homeowners sued Trinity. Trinity turned to its insurance carriers. It had multiple CGL policies as well as an umbrella policy with Cincinnati Insurance Co. When none of the insurers recognized an obligation to defend, Trinity brought suit for a declaration of coverage. Most of the CGL carriers then settled. Under the terms of the settlements, each carrier paid at least 75% of its policy limit and Trinity agreed to cover the balances. Two carriers held out. Ohio Casualty Insurance Co., a CGL carrier, argued that the damage to the homes was not "property damage" caused by an "occurrence." Cincinnati Insurance Co., the umbrella insurer, argued that the umbrella coverage was not triggered because a number of the underlying policies were not exhausted. Judge Barker (S.D. Ind.) granted both insurers' motions for summary judgment. Trinity appeals.

In their opinion, Seventh Circuit Judges Cudahy and Kanne and District Judge Darrah reversed and remanded. The Court first addressed the ruling in Ohio Casualty’s favor. In that ruling, the district court distinguished between damage to a home being built and damage to property other than the home. Relying on the Indiana Appellate Court opinion in Sheehan, it stated that the former was not covered by a standard CGL policy, while the latter was. The district court also ruled that the faulty workmanship did not constitute an "occurrence." Subsequent to the district court's ruling, the Indiana Supreme Court issued its opinion in Sheehan and reversed, holding that a standard CGL policy does cover damage to a home caused by faulty workmanship. The Court therefore reversed for reconsideration in light of Sheehan. The Court then turned its attention to the Cincinnati Insurance umbrella policy. The district court had granted summary judgment on two grounds -- first, that the settlements under the policy limits did not exhaust the underlying policies and therefore did not trigger the umbrella coverage and second, that Trinity failed to show that certain other underlying policies were unavailable. The Court disagreed on both points. With respect to the settlements, the Court concluded that the Cincinnati policy was ambiguous. As such, it must be construed in Trinity's favor. Cincinnati could have used language that made it clear that an underlying policy was not exhausted until the full policy limit was paid by the insurer. The Court found that the actual language used was susceptible to an interpretation that the policy was exhausted when the carrier paid a significant percentage of the policy limit and the insured took responsibility for the rest. Although the Court found no Indiana precedent on point, it relied on cases from the Second and Third Circuits as well as Indiana public policy encouraging settlements. With respect to the unavailability of two other CGL policies, the Court noted that Trinity offered a declaration that referred to those policies and explained the circumstances giving rise to their unavailability. The declaration was based on the declarant's personal knowledge and provided significant detail. The Court concluded that the declaration was sufficient to establish a genuine issue of fact, notwithstanding its self-serving nature.

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KARL SCHMIDT UNISIA, INC. v. INTERNATIONAL UNION, UNITED AUTOMOBILE, AEROSPACE, AND AGRICULTURAL IMPLEMENT WORKERS OF AMERICA (December 17, 2010)

Karl Schmidt Unisia and the Union representing its workers negotiated a Collective Bargaining Agreement (CBA). It contains several provisions relevant to this case: a "Thirty and Out" provision providing enhanced retirement benefits to employees who reach a certain age and seniority, a provision stating that the retirement plan would remain in effect during the term of the CBA, and a four-step dispute resolution process ending in arbitration. In early 2007, the Company announced its intention to lay off employees at its Fort Wayne facility. The Union initiated the dispute resolution process because of its belief that the Company intended to deny "Thirty and Out" provisions to eligible employees. The Company and the Union exhausted the first three stages of the dispute resolution process. The Union proceeded to arbitration and added a grievance on behalf of two affected employees. The Company filed suit seeking a declaratory judgment that the grievances were not arbitrable. The Union counterclaimed to compel arbitration. Judge Van Bokkelen (N.D. Ind.) granted summary judgment to the Union and ordered arbitration. The Company appeals.

In their opinion, Seventh Circuit Judges Posner, Kanne, and Sykes affirmed. The Court first noted the care it would take in not addressing the merits and set forth some general principles regarding arbitration -- there is a federal policy favoring arbitration, a party cannot be compelled to arbitrate unless it has contractually agreed to do so, and a presumption of arbitrability arises from a broad arbitration clause. Here, the Court had little difficulty in finding the presumption. The CBA states that the dispute resolution process is the "sole and exclusive remedy" for a grievance and that the Union may grieve any alleged violation of the CBA. In order to overcome this presumption, the Court stated, the Company must come forward with either an express exclusion or the "most forceful evidence" of an intent to exclude the issue from arbitration. The Court first rejected the Company's express exclusion argument, concluding that it distorted the Union's claim. The Company offered several "most forceful evidence" arguments -- that the answer to the underlying dispute lies in the Pension Plan and not the CBA, that the provisions in dispute were never negotiated, and that the issue is governed by the Pension Plan's dispute resolution process. The Court concluded that none of these arguments were supported by the record or the case law. 

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VAN ANTWERP v. CITY OF PEORIA (December 6, 2010)

Gene Van Antwerp served as a Peoria patrol officer for 18 years. The Police Department announced two vacancies in the Crime Scene Unit, one immediate and one a few months later, in September 2006. Van Antwerp applied. The Department offered the immediate slot to Officer Tuttle. They offered the delayed slot to Van Antwerp. The decision-makers actually believed that Officer Wong was a better candidate but they selected Van Antwerp because Wong was a month shy of the required seniority. A few months later, the Department rescinded Van Antwerp's offer. It reposted the same job several months later and offered it to Wong, who now had the requisite seniority. Although the Department offered no explanation at the time, it later stated that the vacancy was delayed because the incumbent's promotion was delayed. Van Antwerp, who was 50 years old at the time of his application, brought suit against the City of Peoria, alleging that its conduct violated the Age Discrimination in Employment Act (ADEA). Judge McDade (C.D. Ill.) granted summary judgment to the City. Van Antwerp appeals.

In their opinion, Seventh Circuit Judges Posner, Kanne, and Williams affirmed. ADEA makes it illegal to discriminate against a person because of his age. However, in order to prevail on such a claim, the plaintiff must establish that age played a role in and actually motivated the decision. The Court analyzed Van Antwerp's claim under the direct method of proof -- and found it lacking. First, the Court concluded that he offered insufficient evidence of pretext. Even his strongest evidence would not allow an inference that the Department lied. It might allow an inference of error, but that is not enough to show pretext. The Court added that Van Antwerp's claim would fail even if he successfully established pretext. He had to show that the Department's made its decision because of his age. There is actually no evidence in the record that age was the reason the Department rescinded his transfer. The Court briefly considered Van Antwerp's claim under the indirect method. The claim fails under that method both because Van Antwerp waived it and because he was unable to show pretext.

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GRIGSBY v. LAHOOD (December 6, 2010)

Brian Grigsby worked with for the FAA at the Indianapolis Center from 1991 until 1997. He entered as part of a learning program while he finished his degree and continued as a developmental Air Traffic Controller. In that role, he was trained and certified as a radar associate and was in the middle of his radar controller training when he asked for a transfer. Although he never made a formal complaint, it appears that Grigsby requested a transfer to escape hostile comments from his coworkers directed at his then-recent discovery of and pride in his Native American heritage. The FAA granted his transfer request. From 1997 until 2005, Grigsby worked at and became fully certified at the Terre Haute, Indiana automated center. Unfortunately, the FAA privatized the Terre Haute Center in 2005 and eliminated Grigsby's job. Grigsby applied for each of several different vacancies at the Indianapolis Center. On several occasions, he met with the Assistant Air Traffic Manager at the center. He alleges that, at their last meeting, she "bristled" and abruptly ended their meeting when he mentioned that he was Native American. The FAA did not offer Grigsby any of the positions. Each of the successful candidates was a Certified Professional Controller and was familiar with the technology at the Indianapolis Center, which had changed drastically since Grigsby's transfer. Grigsby brought a claim against the FAA pursuant to Title VII of the Civil Rights Act, alleging Native American origin discrimination. Judge Young (S.D. Ind.) granted summary judgment to the FAA. Grigsby appeals.

In their opinion, Seventh Circuit Judges Posner, Kanne, and Wood affirmed. The Court addressed the claim under both the direct and indirect methods. It first rejected the claim under the indirect method because Grigsby's only evidence, direct or circumstantial, of discriminatory animus is the alleged reaction of the assistant manager to his statement regarding his heritage. Such "subtle indicia of distaste" falls short of establishing a case under the direct method of proof. With respect to his indirect proof case, the Court concluded that he could not prevail for several reasons. First, he was not qualified for the positions. Each position required a certified controller familiar with the Indianapolis Center operations -- Grigsby was neither. Next, even if he was qualified, he failed to show that the positions were filled by candidates with similar or less qualification.Each of the successful candidates was a Certified Professional Controller. Even if his qualifications were similar, which he alleges, each of the successful candidates was also operationally current at the Indianapolis Center. Again, Grigsby was neither. Finally, even if he met his prima facie case, he failed to show that the FAA's reason was pretext. The FAA has shown a legitimate reason for its decisions. Grigsby's allegations of pretext are not supported by the record. Grigsby also sought to proceed under a mixed-motive theory, as well. That theory of liability also requires proof of discrimination, direct or circumstantial. He has none and his mixed-motive theory fails as well.

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MONTGOMERY v. AMERICAN AIRLINES (November 19, 2010)

Anthony Montgomery has been an American Airlines employee for over 20 years, all but five months of it as a Fleet Service Clerk. It is the events of those five months, however, that matter in this case. Late in 2006, Montgomery asked for and was granted a transfer to a mechanic's position. The collective bargaining agreement required and defined a six-month probationary period, toward the end of which Montgomery would have to pass a tool inspection and qualification test. Montgomery took his test in April of 2007. Two company supervisors and a union representative were present. Montgomery failed the test and was returned to his prior position. Nearly 3 months later, Montgomery complained to American that he was subjected to racial harassment and discrimination during his probationary period. In the initial meeting with a company representative, he never stated that he had complained to his supervisors at the time. The company conducted an investigation and concluded that it could not substantiate the allegations. The results of the investigation were that the test was administered fairly, that the few employees who became mechanics without passing the test fell into different categories, and that any tension in the workplace was not based on race. Montgomery filed suit. He alleged a hostile work environment in violation of § 1981 and Title VII and racial discrimination, also in violation of § 1981 and Title VII, for his return to the clerk position. Judge Der-Yeghiayan (N.D. Ill.) granted summary judgment to American. Montgomery appeals.

In their opinion, Seventh Circuit Chief Judge Easterbrook and Judges Bauer and Kanne affirmed. The Court first addressed the hostile work environment claim, noting that the analysis under the two statutes is the same. The Court found triable issues of fact with respect to three of the four elements of the claim. In order to recover against an employer, however, Montgomery had to establish that American either participated in the harassment or was negligent in finding and correcting it. His only allegation of participation referred to a coworker and thus does not satisfy the participation prong. In order to satisfy the second prong, Montgomery had to establish either that he informed his supervisors of the harassment or that it was so obvious that it amounted to constructive notice. The record does not support either conclusion. The only person he reported his concerns to was his crew chief, a non-management coworker. America cannot be liable for the harassment without clear and direct reporting from the employee. Even if the harassment had been reported, the Court stated that American would have avoided liability because of its prompt and appropriate investigation. The Court turned to the discrimination claim, which Montgomery pursued under both the direct and indirect method of proof. Again, the analysis is the same under both statutes. Under the direct method, Montgomery asserted that non-African-Americans were not required to take the test. The Court rejected this as proof. Even if true, it did not allow the inference of discriminatory motive. Under the indirect method, Montgomery had to establish that similarly situated employees were treated more favorably. He alleged that three individuals became mechanics without passing the test. But the Court concluded that none of the three was similarly situated to Montgomery -- one became a mechanic before the test rule was enforced, one became a mechanic when a recalculation of his probationary time put him past the time limit for taking the test, and Montgomery presented no admissible evidence with respect to the third individual. The Court concluded that Montgomery cannot prevail on his claim that the test requirement was discriminatory. Montgomery also claimed that the test itself was discriminatory. On that claim, the Court concluded that Montgomery simply presented no evidence. Finally, although Montgomery failed to make out a prima facie case, the Court also addressed pretext. It found that American had a legitimate reason for its actions and that Montgomery provided no evidence otherwise.

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PARKEY v. SAMPLE (October 27, 2010)

Indiana State Trooper Jason Sample was the Marijuana Eradication Coordinator in his northeastern Indiana police district. He was quite knowledgeable about marijuana, its use, and its growth. In early 2005, several things raised his suspicion about the activities of Hammond resident James Parkey: a) the DEA told him that Parkey received shipments from a company known to sell marijuana growing supplies, b) Parkey had a criminal record, and c) Parkey's basement windows were covered. Based on this suspicion, Sample inspected the trash containers behind Parkey's residence on two occasions. On each occasions, he discovered marijuana stems, marijuana cigarette remnants, and discarded mail addressed to Parkey. Sample obtained a search warrant based on the DEA tip, the trash inspection results, and Parkey's criminal record. The search resulted in the seizure of 10 marijuana plants. Although charges were filed against Parkey, they were later dismissed. Parkey filed suit pursuant to § 1983, alleging a violation of his Fourth Amendment right against unreasonable search and seizure. Judge Lee (N.D. Ind.) granted summary judgment to Sample. Parkey appeals.

In their opinion, Judges Posner, Kanne, and Sykes affirmed. Parkey principally attacks the veracity of the affidavit. But, the Court stated, there is a presumption of validity that attaches to the affidavit. In order to avoid summary judgment on that issue, Parkey must have evidence that Sample made misstatements "knowingly or intentionally or with a reckless disregard for the truth." He must also show that the misstatements were necessary to the determination of probable cause. The Court concluded that he did neither. Parkey does not contest the Sample received a tip from the DEA and that he found the stems and remnants in his trash. Instead, he asserts that Sample failed to prove that the remnants were his or that Sample researched his criminal history. Attacking the lack of evidence supporting a warrant affidavit is not sufficient to defeat summary judgment. The Court added that Parkey loses even if Sample misrepresented Parkey’s criminal record. The criminal record was not necessary to the finding of probable cause.

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REYNOLDS v. CB SPORTS BAR (October 22, 2010)

Loretta Reynolds (according to her complaint) had car trouble while leaving Jerzey’s Sports Bar in O’Fallon, Illinois. The bartender told her no cabs were available and suggested she get a ride from another patron. Two other patrons agreed to give her a ride but first bought her several drinks (and possibly drugged her). Reynolds realized while in their car that they were not driving her to her hotel but were intent on sexually assaulting her. She managed to escape but, in the process, was hit by a car and severely injured. She brought suit against the two other patrons and CB Sports, the establishment’s owner. She alleged alternatively that the bartender “knew or should have known” that the patrons were getting her drunk in order to sexually assault her or that the bar and bartender intentionally aided the patrons in doing so. Judge Gilbert (S.D. Ill.) dismissed the complaint against CB Sports, finding no duty under the circumstances. Reynolds appealed. While her appeal was pending, the court entered a default judgment against one of the individual defendants and held a hearing on damages. At the hearing, Reynolds presented additional facts with respect to the night in question – including that two different bartenders refused her request for a phone book, told her that no taxis were available, and vouched for the character of the two other patrons.

In their opinion, Judges Posner, Ripple (dissenting), and Kanne reversed and remanded. The Court first considered the significance of the testimony at the damages hearing. Prior to Iqbal and Twombly, a plaintiff was free to offer an unsubstantiated version of the events on appeal in support of its position as long as it was consistent with the complaint. The Court concluded that Iqbal and Twombly raised the bar with respect to the content of the complaint but did not limit a plaintiff’s ability to argue facts outside the complaint to show that a complaint should not have been dismissed. Next, to the extent the complaint alleged an intentional tort, the Court noted that CB Sports could not be liable. It turned to the negligence claim and, specifically, the existence of a duty. Under Illinois law, the general rule is that a business owner is liable for foreseeable criminal attacks while an invitee is on the premises. Generally, liability does not attach for an attack off the premises. The Court noted, however, that Illinois courts have recognized some exceptions to the off-premises rule. Illinois courts have extended liability to off-premises attacks In Shortall, Osborne, and Haupt – but in each case the attack took place just off the premises. Here, the attack was over a mile away. Nevertheless, it was the foreseeability of the attack that the courts considered in Shortall, Osborne, and Haupt. And here, taking the facts alleged as true, the attack was foreseeable. Foreseeability is not enough, however. The Court also considered the likelihood of the injury, the burden on the establishment owner, and the consequences of that burden. Here, the likelihood is high given the intentional scheme at play. The burden and consequences of imposing that duty are not high. The Court emphasized that this was not a burden to investigate – only a burden to protect when it was aware of an intent to injure. The Court was satisfied that Reynold’s allegations sufficiently pled a duty. Finally, the Court declined to find an absence of proximate cause as a matter of law and emphasized that it was not accepting Reynold’s “voluntary undertaking” theory of liability.

Judge Ripple dissented. Although he recognized the Illinois courts’ expansion of off-premises business invitee liability, he disagreed with the Court’s further extension of the principle. On the one hand, Reynold’s complaint alleges an intentional act. Judge Ripple would not extend negligence principles to the situation where the employee is a participant in the execution of the planned attack. As for the alternate allegation that the bartender “should have known,” Judge Ripple believed the burden imposed by the panel opinion on the establishment is too great. He saw no facts alleged in the complaint upon which to base a “should have known” conclusion. Either way, Judge Ripple thought the panel opinion extended Illinois law beyond where the Illinois Supreme Court would go.

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ILLINOIS v. HEMI GROUP (September 14, 2010)

Hemi Group is located in New Mexico but sells cigarettes throughout the United States (except New York - maybe this is why) through several interactive websites as well as by phone, mail, and fax. Hemi pays the federal tax on the cigarettes it sells but it directs its customers to investigate their own state tax liability. Hemi is not registered to do business in Illinois, has no offices or employees in Illinois, and does not advertise in print media in Illinois. An Illinois Department of Revenue agent purchased hundreds of packs of cigarettes from Hemi in 2005 and 2007. Illinois brought suit in state court against Hemi, alleging numerous violations of law. After removing the case to federal court, Hemi moved to dismiss for lack of personal jurisdiction. Judge Scott (C.D. Ill.) denied the motion. Hemi appeals.

In their opinion, Judges Bauer, Kanne, and Evans affirmed. The Court briefly considered, but rejected, the argument that the Illinois Constitution is more restrictive than the federal constitution in its personal jurisdiction requirements. The Court therefore conducted its analysis with respect to the due process clause of the federal constitution. Since Hemi does not have general, systematic business contacts in Illinois, the Court considered only specific jurisdiction and found that it existed. First, Hemi's contacts with Illinois satisfy due process: a) Illinois customers could buy cigarettes on their many interactive websites, b) they held themselves out as ready to do business in Illinois , c) their refusal to sell to New York residents showed that they were aware of the ramifications of selling into a particular state, and d) they shipped cigarettes into Illinois. The Court emphasized that it was not using the Zippo sliding scale approach that other circuits have adopted for Internet jurisdiction cases. Second, the relatedness requirement for specific jurisdiction is satisfied -- the claims arise out of Hemi's contacts. Finally, the exercise of jurisdiction here "does not offend traditional notions of fair play and substantial justice." Hemi set up a nationwide, online commercial venture. It wanted to do business nationwide and has customers throughout the nation. The Court cautioned against exercising jurisdiction over a company simply because it has an interactive website accessible in the forum state. Here, additional voluntary contacts with the state make the exercise of jurisdiction permissible.

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FLYING J, INC. V. VAN HOLLEN (September 3, 2010)

A Wisconsin statute requires a minimum markup on gasoline sold in the state. The statute itself provides the formula with which to calculate the markup. The statute also authorizes a state agency to sue violators, issue cease and desist orders, and seek injunctions. It also provides for a private cause of action. Despite receiving over 1500 complaints of violations between 2003 and 2008, the agency did not prosecute one case. Flying J, a Wisconsin gasoline retailer, brought suit to enjoin the state from enforcing the minimum markup provisions. It alleged that the statute was preempted by the Sherman Act. Judge Randa (E.D. Wis.) agreed and issued a permanent injunction. When the state defendants elected not to appeal, the Wisconsin Petroleum Marketers and Convenience Store Association moved to intervene. The Court, in an earlier opinion (intheiropinion), reversed the District Court's denial of the intervention motion and accepted the Association as the appellant.

In their opinion, Judges Posner, Ripple, and Kanne reversed, dissolved the injunction, and remanded. In order to be preempted by the Sherman Act, a statute must mandate or authorize illegal conduct or place "irresistible pressure" to violate the law. Flying J's argument that the statute allows gasoline retailers to collude on prices is not enough -- the statute does not on its face mandate or authorize that conduct. Furthermore, there was no evidence in the record of actual collusion. The Court thought the outcome controlled by the Supreme Court's decision in Fisher. Flying J also argued that the statute was preempted as a "hybrid" statute (in which a government enforces prices set at the discretion of private parties). The Court concluded that the statute is not a hybrid statute. In hybrid statute cases, private parties -- not the state -- set the prices. Here, the state sets the minimum price. The fact that the statute includes a private cause of action and a “meet competition” exception does not make it a hybrid.

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WEBER v. UNIVERSITIES RESEARCH ASSOCIATION (September 2, 2010)

Katherine Weber had been employed at Universities Research Association (URA) for almost twenty years when she received a negative performance review. She believed the review was unfair and filed a grievance. The grievance was ultimately resolved in her favor and the negative review was removed from her record. Weber claims that a number of bad things began to happen to her after the grievance, ultimately including the elimination of her position in early 2004. She accepted another position with the organization under a new supervisor. Weber had difficulty with her new supervisor from the beginning. She complained that she was the victim of retaliation and that her new supervisor treated her differently than other employees. Her supervisor complained that she was not getting her work completed and became suspicious of her computer usage. URA decided to monitor her Internet usage. The results of its trace showed that Weber spent more than 16 hours in one workweek visiting websites unrelated to her work. Her usage included accessing dog-related sites and her personal e-mail accounts in connection with her dog training business. URA terminated Weber's employment for violating its policies: a) requiring disclosure and authorization of outside employment and b) prohibiting the use of URA computer equipment in connection with outside employment. Weber brought suit pursuant to Title VII for gender discrimination and retaliation. Judge Andersen (N.D. Ill.) granted summary judgment to URA. Weber appeals.

In their opinion, Judges Bauer, Kanne, and Tinder affirmed. The Court first concluded that Weber waived both claims under the direct method of proof by not sufficiently developing them in the district court. Since Weber does not challenge the district court's decision with respect to the retaliation claim under the indirect method, the only other issue before the Court was the discrimination claim under the indirect method. Weber attempted to meet the "similarly situated" element of her prima facie case by identifying a number of male co-workers who had unauthorized outside employment, who accessed the Internet for personal and outside employment use, and who accessed the Internet to view pornography. The Court concluded that Weber did not meet the "similarly situated" element. To meet that requirement, she must identify employees who engaged in similar conduct in the absence of circumstances that would distinguish their conduct from hers. The Court acknowledged that she identified multiple instances of policy violations but distinguished those violators. Weber presented no evidence that the violators had trouble finishing their work or that any of them violated a company policy "with the same reckless abandon" as Weber.

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MEYERS v. NATIONAL RAILROAD PASSENGER CORP. (AMTRAK)(August 30, 2010)

Greg Meyers was an Amtrak pipe fitter for years. It was a difficult job -- requiring lifting, twisting, reaching, etc., frequently in confined spaces. Meyers' size (approximately 350 pounds) made the job even more difficult. He started experiencing problems in 2004. He was referred to Dr. Rosseau, a neurosurgeon, who diagnosed him with cervical spondylosis and carpal tunnel syndrome. Rosseau performed carpal tunnel surgery in 2004 and back surgery in 2008. Dr. Tonino, an orthopedic surgeon, operated on his right shoulder in 2007. Meyers brought suit against Amtrak under the Federal Employers' Liability Act ("FELA"). He alleged that his injuries were caused by Amtrak's failure to use ordinary care. He relied on the Rosseau and Tonino expert reports and a report by his expert ergonomist. Judge Der-Yeghiayan (N.D. Ill.) granted partial summary judgment to Amtrak on statute of limitations grounds but then struck the reports of both doctors and the ergonomist. Without those reports and testimony, Meyers was unable to establish the elements of the offense. The court granted full summary judgment. Meyers appeals.

In their opinion, Judges Kanne, Williams, Hamilton affirmed. The Court addressed only the doctor expert issue. It stated that a party offering an expert witness who was retained to provide expert testimony in a case must comply with the requirements of Rule 26(a)(2). Those requirements include disclosing the bases of the expert's opinions and the reasons for them, which Meyers did not. The Court noted that it had never ruled on whether a treating physician is required to comply with those disclosure requirements if the subject of the opinion was not determined at the time of treatment. It concluded that a treating physician should be held to the same disclosure requirement if the physician is offered for testimony regarding the cause of injury and that testimony is based on a conclusion that was not made at the time of treatment. The testimony of Meyers' two doctors fits that definition and was properly excluded. Without those reports, there is no evidence of causation and summary judgment was appropriate.

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HILL v. POTTER (August 30, 2010)

Carla Hill has been an employee of the United States Postal Service in Hazel Crest, Illinois for several years. In the early 2000s, she filed a number of EEO complaints against her supervisors for discrimination. In late 2002, Hill hurt her back in a work related injury and went on "limited duty" status. Limited duty status employees are paid for a full day's work even if no qualifying work is available. Just as her limited duty status period was about to end, Hill claimed that she reinjured her back and reapplied. Her supervisor, Patrick Kavanaugh, wrote a letter to Dale Schultz of the Office of Workers' Compensation Programs. He communicated his belief that Hill’s injury was not as serious as she claimed. Schultz put Hill on "light duty" status. Light duty status employees are not guaranteed a full day's pay if qualifying work is not available. Hill lost 618 hours of pay while on light duty status -- even while other employees worked in excess of 800 hours of overtime. Hill, who was a letter carrier, also wanted a position as a window clerk. She submitted written applications in 2000 and 2003 and again documented her interest in 2004. Clerk positions became available in 2005, 2006, and 2007. She did not submit written applications at any of those times. On each of those occasions, the Postal Service offered the job to someone who had submitted a written application. Hill brought an action against the Postmaster General, alleging that the lost hours and failure to promote were in retaliation for her protected activities (her EEO complaints). Judge Coar (ND. Ill.) granted summary judgment to the defendant. Hill appeals.

In their opinion, Judges Flaum, Kanne, and Evans affirmed. The Court noted that Hill proceeded under the indirect method of proof -- which requires proof of a statutorily protected activity, a materially adverse job action, satisfactory job performance, and treatment worse than a similarly situated employee. The elements at issue here are whether there was an adverse job action (on the reduction in hours claim) and whether Hill was treated differently from similarly situated employees (on the failure to promote claim). The Court first addressed adverse job action. Although a reduction in hours can be an adverse job action, the reduction here came as a result of her light duty status. It does not amount to an adverse job action without other evidence. The Court rejected Hill's claim that Kavanaugh's letter to Schultz somehow imputed a retaliatory motive to Schultz under a "cat's paw" theory. There was no evidence in the record that the letter had any effect on Schultz -- let alone a dispositive one. Therefore, Hill's light duty assignment itself was not an adverse job action. The Court also concluded that sending her home without pay was also not an adverse job action. Although there was evidence in the record that other employees worked overtime, there was no evidence in the record that that overtime work fell within her work performance limitations. Finally, the Court rejected Hill's failure to promote theory of liability. In order to prevail, she had to establish that she properly applied for the promotion. The Postal Service presented evidence that its unofficial policy required an application in writing -- even though that unofficial policy was inconsistent with the written policy and the Postal Service presented no documentary evidence that supported it. Nevertheless, the Court concluded that Hill had not met her burden of establishing pretext. She failed to come forward with any evidence from which an inference could be drawn that the Postal Service evidence was not credible.

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CASTILE v. ASTRUE (August 13, 2010)

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

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

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ROMANELLI v. SULIENE (August 11, 2010)

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

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

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TINDLE v. PULTE HOME CORP. (June 9, 2010)

Terry and Diane Tindle moved into their new home in West Dundee, Illinois in late 2003. Their home was part of a subdivision developed by Pulte Home Corp. Soon after moving in, the Tindles noticed holes developing in both their front and rear yards. They complained about the holes in the front yard. Although Pulte considered them normal, they did repair the holes. For months, the Tindles used their rear yard without incident. In the summer of 2004, however, Terry Tindle stepped into a concealed hole in the rear yard. He suffered serious injuries to his leg. Tindle brought suit against Pulte. Judge Manning (N.D. Ill.) granted summary judgment to Pulte. Tindle appeals.

In their opinion, Judges Flaum, Kanne, and Evans affirmed. The Court noted that Illinois law generally excuses a vendor of real property from liability for personal injury after transfer of possession. Section 353 of the Restatement (Second) of Torts, also the law in Illinois, creates a five-pronged exception to the general rule. A vendor can be liable if a) it knew of a hazardous condition that created an unreasonable risk, b) it concealed or failed to disclose the condition, c) it had reason to believe the purchaser would not discover the condition, d) physical harm resulted from the condition before the purchaser knew of the condition and risk, and e) the purchaser did not have an opportunity to protect against the risk. The Court concurred with the district court that Tindle could not meet his § 353 obligations both because of the state of his knowledge and that of Pulte. First, Tindle was well aware of the dangerous condition created by the holes in his yard. That knowledge defeats any recovery under § 353. Second, Tindle presented no evidence that Pulte was aware of the dangerous condition at the time of the sale. That lack of knowledge independently defeats recovery under § 353.

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UNITED STATES v. 5443 SUFFIELD TERRACE (June 9, 2010)

Customs officials first discovered Richard Connors smuggling Cuban cigars in 1996. They confiscated over 1100 cigars from him as he attempted to enter the United States. He continued to smuggle. He continued to get caught. On March 15, 1997, local police confiscated more cigars from Connors' home at 5443 Suffield Terrace in Skokie, Illinois. They turned them over to federal officials the following day. Finally, in late 1999, federal officials again seized hundreds of cigars from the Suffield Terrace home. Connors was convicted of several offenses. On March 14, 2002, the United States filed a civil forfeiture action to seize Connors' house. They alleged two grounds: that the house was paid for with proceeds of the smuggling operation and that the house was used to facilitate the smuggling operation. Connors moved to dismiss, arguing that the five-year statute of limitations began to run in 1996, when the United States first discovered his smuggling activity. Judge Gettleman (N.D. IL) denied the motion and granted summary judgment to the United States. Connors appeals.

In their opinion, Judges Posner, Kanne, and Rovner affirmed. The civil forfeiture statute requires that an action be filed within five years "after the time when the alleged offense was discovered." The Court found the meaning of "alleged offense" unambiguous. It refers to the offense that gives rise to the right of forfeiture. Where there are several such offenses, nothing in the statute prohibits a forfeiture action when at least one of the offenses falls within the five-year period of limitations. The civil forfeiture action in this case is based on the March 15, 1997 offense. The action is therefore not time-barred. On the merits, the Court found that Connors waived the argument that he had additional sources of income not considered by the court because he failed to raise it properly below.

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LEVAN v. GEORGE (April 28, 2010)

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

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

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WHITTINGTON v. INDIANAPOLIS MOTOR SPEEDWAY FOUNDATION (April 13, 2010)

DonWhittington and his brother Bill used to race cars. In fact, they (with a third driver) won the famous Le Mans 24-hour endurance race in 1979 driving a Porsche 935 K3 (finishing just ahead of Paul Newman). A few years later, the K3 was transferred to the Indianapolis Motor Speedway Foundation and has since been on display in the Foundation's Hall of Fame Museum. In 2004, after Whittington requested the car’s return, the Foundation sent a letter claiming ownership of the car. Whittington filed a complaint for tortious conversion and replevin. He alleged that he has always owned the Porsche and only loaned it to the Foundation. Neither party had any documentary evidence in support of its position and at least one principal witness has since died. After a one-day bench trial, the court found in favor of the Foundation. Whittington appeals.

In their opinion, Judges Bauer, Ripple, and Kanne affirmed. The Court noted that Indiana law requires a replevin plaintiff to establish a prima facie case of personal possession before any burden shifts to the defendant. Similarly, under Indiana law, a conversion plaintiff must establish a property right. The Court noted the lack of documentation and the conflicting evidence and inferences in the court below. Each party presented evidence in support of its respective position. The Court concluded that the district court did not clearly err in its conclusion that Whittington failed to establish a prima facie right of possession.

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NATIONAL INSPECTION & REPAIRS v. GEORGE S. MAY INTERNATIONAL (April 9, 2010)

National Inspection & Repairs (“NIR”) is a trucking company located in Topeka, Kansas. When one of its employees accidentally caused its accounting systems to crash, NIR sought help from George S. May International (" May"), a business consulting firm. The parties entered into a consulting agreement. The agreement required NIR to approve any effort recommended by May. It also prohibited NIR from hiring any May employee for a year after the date of the agreement. May submitted five progress reports over the course of the three-week engagement. Each report was approved by NIR. As soon as the engagement was complete, NIR hired the May project manager as its Controller. NIR alleges that the project manager embezzled hundreds of thousands of dollars from NIR while acting as its Controller. NIR brought a breach of contract action against May. It alleged that May breached the contract by failing to "implement" its duties and for negligently hiring and supervising the project manager. The district court granted summary judgment to May. NIR appeals.

In their opinion, Chief Judge Easterbrook and Judges Kanne and Sykes affirmed. They Court first quickly addressed its appellate jurisdiction. The district court had dismissed without prejudice a claim brought by each of the parties, which made its order non-final. The Court noted its own precedent the lifts the jurisdictional bar when each party agrees at oral argument to treat the dismissals as with prejudice. Here, the parties were not explicit at oral argument. However, they were explicit in post-argument briefing. The Court concluded that that was sufficient to lift the jurisdictional bar. On the merits of the "failed to implement" allegation, the Court noted that NIR cannot prevail because it never pointed to a specific obligation or provision of the agreement that May is alleged to have failed to implement. On the merits of the negligent hiring claim, the Court concluded that it was NIR that in fact breached the contract by hiring the project manager. Finally, the Court addressed NIR's breach of implied warranty and negligence claims. NIR has a tort claim under Kansas law only if there is a violation of a duty imposed by law, as opposed to by agreement. Since Kansas law does not impose any duty on the parties to a consulting services agreement, there is no action for breach of a duty.

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OJEDA v. GOLDBERG (March 25, 2010)

Gail and Ronald Goldberg were in the business of making high risk loans. They made such a loan in the amount of $600,000 to Ernest and Beverly Ojeda. The Ojedas provided stock valued at $800,000 as collateral. The original loan agreement was executed in August of 1998, with an original maturity date of October of 1998. The maturity date was extended many times, and the Ojedas continued to pay monthly interest until January of 2006. In late 1999, the company whose stock secured the original loan executed a reverse stock split, significantly reducing the number of shares and value of the collateral. At the time of one of the loan extensions in late 2001, two entities owned by the Ojedas, both of which owned McDonald's restaurants, guaranteed the note. Another maturity date came and went – and the Ojedas continued to make the monthly interest payments. In 2004, the Ojedas sold their interest in the McDonald's restaurants and used the proceeds to pay off creditors and to buy a pizza franchise. The Ojedas ultimately defaulted on the note in January of 2006, the pizza franchise failed a month later, and the Ojedas entered bankruptcy. In the bankruptcy proceeding, the Goldbergs asserted that the Ojedas’ liability on the $600,000 loan should be non-dischargeable pursuant to 11 U.S.C. § 523(a)(2)(A). The bankruptcy court concluded that the Goldberg's were not justified in relying either on the value of the stock or the ownership in the restaurants and further concluded that, if there was reliance, the only amount excluded from discharge would be attorney's fees and unpaid interest. The district court reversed, concluding that reliance on the restaurant ownership was justified and that the entire amount was excepted from discharge. The Ojedas appeal.

In their opinion, Judges Kanne, Rovner, and Williams affirmed. The Court first set forth the elements of a discharge exception under § 523(a)(2)(A): a debtor’s false representation, the debtor's knowledge of the falsity or reckless disregard for the truth, an intent to deceive, and justifiable reliance. The first three elements were not seriously contested. With respect to justifiable reliance, the Court noted that it is a lower standard than reasonable reliance, and only requires that one not rely "blindly" on a false representation if the falsity would have been obvious upon cursory investigation. Applying that test, the Court found no clear error in the bankruptcy court's determination that the Goldberg's reliance on the stock shares was not justified. Ronald Goldberg was an experienced businessman and he was aware of the company's troubles. He therefore should have made inquiry before continuing to extend the note. The Court found error, however, in the bankruptcy court's conclusion that the Goldberg's reliance on the Ojeda’s restaurant ownership was not justifiable. The Court concluded that the Goldbergs had no information that would have alerted them to the sale of the restaurants. Even though the restaurants did not secure the debt, the companies that owned the restaurants did guarantee the note. The sale of the restaurants materially affected each company's ability to perform as guarantors. Next, the Court concluded that the fraudulently induced forbearance fit within the definition of an "extension" or "renewal" of credit under § 523. Finally, the Court addressed the issue of the extent to which the forbearance was obtained by false pretenses. The test is whether the creditor: a) had collection remedies at the time of the false representation, b) did not take advantage of the remedies because of the false representation, and c) the remedies lost value during the extension period. The Court concluded that the Goldbergs met the test since the Ojedas had significant assets in 2004 that no longer existed at the time of default. Since the Goldberg's forbearance applied to the entire debt, the Court concluded that the entire debt was excepted from discharge, notwithstanding that the original loan involved no deception.

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WILLIAMS v. FLEMING (February 26, 2010)

Jessie Williams had several million dollars of loans from Family Bank & Trust Company. As of late 2005, Williams' loans were in good standing -- he had never even been late with a payment. The FDIC conducted a routine examination of Family Bank in late 2005. Jerry Fleming was the Associate Examiner in charge. Williams alleges that Fleming made racially disparaging remarks about him, the city of Harvey, and the Bank's practice of lending to African-Americans. Williams also alleges that Fleming instructed the Bank not to lend to him anymore. Williams brought a Fifth Amendment claim against Family Bank, an Illinois Human Rights Act claim against the Bank and the United States, and a Fifth Amendment Bivens claim against Fleming. The district court: dismissed Family Bank because it is not a state actor, dismissed the United States on sovereign immunity grounds and because the FDIC did not act as a financial institution (an element of the Illinois Human Rights Act claim), and dismissed Fleming pursuant to the Federal Tort Claim Act's judgment bar. Williams appeals only the dismissal of Fleming.

In their opinion, Judges Kanne, Rovner, and Williams affirmed. The general rule, noted the Court, is that one may not sue the United States for torts committed by it or its agents. The Federal Tort Claims Act was enacted to allow suits against the United States under certain circumstances and with certain limitations. One of the limitations is the judgment bar, which provides that a judgment in one action bars a claim arising from the same subject matter against the government employee allegedly responsible for the tortious act. The issue here was whether the dismissal of the United States was such a judgment that barred the action against Fleming. Although the district court labeled its dismissal as one for lack of subject matter jurisdiction, thereby raising the issue of whether a judgment must be on the merits to trigger the judgment bar, the Court disagreed. Although it recognized that its view was the minority position, the Court reiterated its approach to the statutory exceptions to waiver. The Federal Tort Claims Act authorizes federal courts to hear tort claims against the United States. If the tort claim falls within one of the exceptions to the Act's waiver of sovereign immunity, the claim is dismissed because the United States has a defense -- not because the court is deprived of jurisdiction. The dismissal below was therefore on the merits, and the judgment bar applies.

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GASTINEAU v. WRIGHT (January 19, 2010)

James and Christy Gastineau were plaintiffs in a Fair Debt Collection Practices Act (FDCPA) case. They were represented by Robert Duff. Although Duff was not their original counsel and did not become so until about three years into the case, he did negotiate the settlement of the case on the first day of trial. He asked for attorney's fees of approximately $140,000. The district court judge awarded approximately $50,000, reducing both the number of hours and the hourly rate in setting that amount. Duff appeals.

In their opinion, Judges Kanne and Tinder and District Judge Griesbach affirmed. The Court first noted that an award of attorney's fees is reviewed on a "highly deferential" version of the already deferential abuse of discretion standard. The district court concluded that Duff’s hours were excessive. He noted that Duff was inexperienced in FDCPA cases and became involved fairly late in the case, after most of the discovery and motion practice had been completed. Much of the time spent was learning the law. The court also concluded that Duff’s rate was excessive for the subject matter. He relied on an affidavit of an experienced lawyer in the area who believed that to be so. The Court found no impediment to the combined reduction of both hours and rate. Having found no abuse of discretion, the Court affirmed.

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SRAIL v. VILLAGE OF LISLE (December 7, 2009)

The Oak View subdivision was built in the 1950s. Since its earliest days, a private utility company has provided its residents with water. The Village of Lisle developed its municipal water system in 1967. The municipal system has grown as developers have donated water mains serving new projects. Lisle also purchased a private water utility in 1980. Although both the municipal system and the Oak View system receive their water from the DuPage Water Commission, the Oak View system has insufficient pressure for firefighting. Residents of Oak View sued the Village, alleging that the Village violated the Equal Protection Clause by providing municipal water to some residents and not others. The court granted summary judgment to the Village. The residents appeal.

In their opinion, Judges Ripple, Kanne and Sykes affirmed. The Court first noted that the residents are not members of a suspect class and they do not allege an infringement of a fundamental right. Therefore, the Court's review is on the rational basis test. Although the Court identified issues with the plaintiffs' status as a "class of one" and with an illegitimate animus requirement, it found it unnecessary to reach either issue. Citing the Supreme Court's decision in Engquist, the Court stated that government activity which involves discretionary decision-making based on a number of objective criteria need not treat all persons equally. The Village's decisions over the years to build and extend its system were based on individual assessments made at those times. There is no clear standard that the Village used and that the Court could use to judge any departures therefrom. The Court concluded that it was doubtful that the residents' claim would survive the Engquist test. The Court went on, however, and concluded that the residents failed to establish an equal protection violation. First, they were unable to establish the existence of an appropriate comparator. Second, the cost of extending the system, the apparent lack of interest on the part of most residents, and the Village's desire to avoid competition with the private utility amounted to a rational basis for its conduct.

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AMERICAN BOAT COMPANY v. UNITED STATES OF AMERICA (October 1, 2009)

David Jump is a wealthy, St. Louis businessman with a variety of business interests. In 1996, he consulted with a Chicago attorney to develop an estate plan. The attorney created a family trust and reorganized many of Jump's businesses into limited partnerships. He also recommended a tax shelter, and provided the firm's opinion of its validity. A few years later, one of Jump’s towboats caused an accident that almost resulted in damages that could have exceeded his insurance coverage. He again sought advice from his Chicago lawyer, this time on how to limit his liability. The lawyer again designed and executed a restructuring of his companies. He again also recommended a series of tax shelter transactions. Beginning in 1999, Jump claimed substantial tax benefits. Over time, other lawyers and accountants became familiar with these transactions and raised no objections. The IRS eventually caught wind of these shelters and determined them to be illegal. It discovered the involvement of one of Jump's partnerships during its investigation and determined that the shelter was invalid. It issued a Notice of Final Partnership Administrative Adjustment, adjusting the partnership's basis of its towboats, and imposed an accuracy-related penalty of forty percent. On judicial review, the court agreed with the IRS that the transactions were invalid but held that the penalty should not have been imposed. The penalty can only be imposed if the partnership had no reasonable cause for its underpayment. The court found reasonable cause. The United States appeals the latter ruling.

In their opinion, Judges Bauer, Flaum and Kanne affirmed. The Court first addressed the issue of the district court's jurisdiction, because of a recent decision in the Court of Federal Claims holding that the reasonable cause exception relied on by the district court cannot be considered during a partnership-level proceeding, which that was. Although agreeing with the fundamental premise that a partner may not raise a partner-level defense at a partnership-level proceeding, the Court concluded that a partnership can raise reasonable cause on behalf of the partnership. Thus, the Court found that the district court had jurisdiction to consider the partnership's claims that it had reasonable cause for its position. On the merits, the Court stated that reasonable cause depends on all the facts and circumstances, including the taxpayer's efforts to properly assess its liability. The Court first rejected the government's position that it is always unreasonable to rely exclusively on a financial advisor who incorporates a tax shelter into a plan for restructuring. Considering the facts and circumstances, the Court concluded that the district court did not clearly err in finding reasonable cause: Jump sought advice from a reputable (at the time) attorney, he had no reason to believe the advice was wrong, the tax shelters were component parts of larger corporate restructurings, two reputable accounting firms raised no objections, and he had engaged in a similar transaction a few years earlier without IRS objection. Calling it a "close case," the Court found no clear error.

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MACH v. WILL COUNTY SHERIFF (September 1, 2009)

Michael Mach was a Will County Deputy Sheriff assigned to the traffic division. For years, he maintained a satisfactory performance record. That changed after 2003. Because of budget pressure, the department notified the deputies in the traffic division that they could be temporarily assigned to the patrol division. Mach and other deputies were not happy. He started acting out, failing to follow directives, disregarding instructions, and neglecting his duties. After reprimands and warnings, he was permanently transferred to the patrol division. Mach brought an action pursuant to the Age Discrimination in Employment Act (ADEA). In addition to his transfer, he stated five other grounds for his claim. In response to the defendants’ opening briefing on summary judgment, he abandoned all five of those other grounds. The court granted summary judgment to the Sheriff and also awarded fees of 5/6 of the costs of preparing the summary judgment motion, reflecting effort that went into attacking the "worthless" claims. Mach appeals.

In their opinion, Judges Bauer, Flaum and Kanne affirmed. On the merits, Mach relied on the direct method of proof, which required him to produce evidence that he was transferred because of his age. The Court noted an absolute lack of evidence in the record supporting any such inference. His poor job performance was well documented by the department. The only circumstantial evidence of age discrimination was one stray comment made by an individual who had no influence on the transfer decision. Mach's ADEA claim fails. With respect to the fee award, the Court noted a prior holding that ADEA does not preclude an award of fees to a prevailing defendant if a plaintiff litigates in bad faith. Here, the Court concluded that the district court did not abuse its discretion in ruling that Mach litigated the five claims in bad faith. The Court noted its belief that such sanctions would be rare -- here the district court explicitly held that the five claims were "worthless."

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MIDDLETON v. CITY OF CHICAGO (August 24, 2009)

From 1960 until 1989, Charles Middleton served in the Air Force. On two occasions in the early 1990s, he applied for positions with the City of Chicago. He was not hired for either position. In 2007, Middleton sued the City pursuant to the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA). He alleged that the City refused to employ him on account of his military service. The district court applied the four year "catch-all" statute of limitations in 28 U.S.C. § 1658 (a) and dismissed his complaint. Middleton appeals.

In their opinion, Judges Kanne, Rovner and Wood affirmed. The Court considered not only the application of § 1658 (a) to the claim but also the provisions of the Veterans' Benefits Improvement Act (VBIA), enacted after the appeal. Section 1658 was enacted in 1990. Its purpose, said the Court, was to minimize the borrowing of state statutes of limitations for federal causes of action. It provided a four-year statute of limitations for any federal claim brought under a later-enacted statute, if the statute had no expressed limitations period. USERRA was enacted four years later and contained no expressed statute of limitations. The Court concluded, based on the plain meaning of the statute, that the four-year limitations applied. In doing so, it rejected the Middleton's arguments that: 1) the section did not apply because USERRA was simply an amendment of an earlier-enacted statute, and 2) the legislative history indicated Congress' intent that no statute of limitations apply. The Court turned its attention to the VBIA. The VBIA eliminates any limitations period for a USERRA cause of action. The Court noted the "well-established" rule that a statute should not be applied retroactively unless Congress' intent is clear. Nothing in the statute addresses retroactivity. The Court concluded that the statute should not be given retroactive effect. Finally, the court rejected Middleton's argument that the VBIA was merely a clarification of existing law.

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BENTZ v. CITY OF KENDALLVILLE (August 14, 2009)

The local police arrived at the home of Dr. Bernard Leonelli, responding to reports of a domestic dispute. An officer observed a large fire on the front lawn and was told by bystanders that a fight was taking place inside the home. The officer approached Leonelli, who was standing on his front porch, and asked to speak with him. Instead, Leonelli walked into the house, where the officer observed him reaching for something. The officer entered the house, arrested Leonelli and searched the premises for a possible victim of domestic abuse. Leonelli brought an action against the city under § 1983, alleging that both the arrest and the search were unreasonable and unlawful. The district court granted summary judgment to the defendants. Leonelli appealed -- but died before the appeal was heard. His personal representative seeks to continue the appeal on his behalf.

In their opinion, Judges Cudahy, Posner and Kanne granted the defendants’ motion to dismiss the appeal. Section 1983 is silent on whether a claim survives death. Instead, the Court stated, the state’s survival statute applies. A court must first characterize the § 1983 claim and decide which state tort is most analogous. With respect to the arrest claim, the Court noted that the plaintiff had to establish the fact of a seizure and its unreasonableness. The Court concluded that the closest Indiana tort was false imprisonment, the elements of which are almost identical to those for false arrest. Since an Indiana tort of false imprisonment does not survive the death of the plaintiff, neither does Leonelli's false arrest claim. With respect to the unlawful entry and search, the Court stated that the facts of the case were closely analogous to both a state trespass claim, which does survive, and a state invasion of privacy claim, which does not survive. The proper analysis, however, focuses on the elements of the federal claim, not the specific facts of the case. Looking at it from that perspective, the Court concluded that an expectation of privacy is the core of the unreasonable search claim. The federal claim is more analogous to invasion of privacy than it is to trespass. The claim does not survive.

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SCHUR v. L.A. WEIGHT LOSS CENTERS, INC. (August 14, 2009)

Pamela Hoppe, an Illinois citizen, joined a weight loss program at her local L.A. Weight Loss Center ("Center"). After just several months of diet and nutritional supplements, Hoppe died of acute liver hepatitis. Her estate filed suit in state court against the Center alleging a variety of state law claims. The Center removed the case to federal court on diversity grounds, where the parties conducted discovery for just over one year. The estate then amended its complaint, adding claims against two Center employees, both Illinois residents. The estate then moved to remand the case to state court because of the new lack of diversity. On the Center's motion, the court struck the amended complaint on the grounds that the new defendants were fraudulently joined. Later, the court granted summary judgment to the Center. The estate appeals.

In their opinion, Judges Bauer, Kanne and Sykes vacated and remanded. The Court addressed the jurisdictional issue first. It noted that 28 U.S.C § 1447(e) applies when a plaintiff seeks to join a non-diverse party that would eliminate subject matter jurisdiction. A district court has two options -- it can deny the joinder and keep the case or it can allow the joinder and remand the case. It should not do what the court did here – allow the joinder and keep the case. The Court then adopted a framework of factors a lower court should consider in exercising its discretion on joinder: the plaintiff's motive, the timeliness of the request, the harm to the plaintiff if denied, and other equitable considerations. Before addressing these factors, the Court “detoured” to address whether the district court had the authority to reverse the joinder decision, further complicated by the fact that a magistrate judge had granted the motion to amend. In the particular posture of this case, the Court concluded that the district court was permitted to reconsider the magistrate's order. Because the motion was granted as a routine matter without any indication of its jurisdictional significance, the Court joined several other courts in concluding that a district court may reconsider a prior joinder decision when it was unaware that joinder would defeat diversity. Finally, the Court proceeded to examine the lower court's exercise of its discretion. The lower court had relied on the doctrine of fraudulent joinder in striking the amended complaint. It found that it was unlikely that the estate could prevail against the individual defendants. The Court concluded that the district court misapplied Illinois law in reaching that conclusion. Although vicarious liability can result in employer liability for employees' misconduct when the acts were committed within the scope of employment, it does not affect the employees' direct liability. The Court found that it was error to conclude that it was unlikely for the state to succeed against the individual employees. With respect to the plaintiff’s delay in adding the individual employees, the Court acknowledged that the amendment followed a year of discovery but emphasized that the amendment came within a few months of the estate learning of each employee's role in the events prior to Hoppe's death. Thus, the Court concluded that the lower court abused its discretion in denying the remand. Since it had no jurisdiction, it should not have reached the merits and neither did the Court.

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CARLISLE v. DEERE & COMPANY (August 7, 2009)

Carlisle and his partner operated an excavating business. In 2002, they purchased a used heavy-duty tree grinder called the Beast. The Beast already had a history. It was originally manufactured and purchased in 1999. The original owner replaced the engine with one manufactured by Deere & Co. From the moment Carlisle purchased the Beast, it was anything but. It lacked power, overheated, and generally underperformed. After many inquiries, Carlisle was eventually told to check the Performance Programming Connector (PPC), a component in the Beast's control mechanism. The PPC is also manufactured by Deere but sold separately from its engines. Carlisle discovered that a wire had been installed that limited the engine's rotations. Carlisle cut the wire with immediate effect -- the Beast was again worthy of its name. Carlisle sued Deere for breach of the warranty it inherited when it purchased the Beast. The district court granted summary judgment to Deere. Carlisle appeals.

In their opinion, Judges Kanne, Evans and Dow affirmed. The issue for the Court on appeal was whether the deficiency noted by Carlisle was covered by the warranty. The warranty covered "defective workmanship" but excluded from its coverage components that were not installed by Deere. Because the PPC is meant to be configured in a number of possible ways depending on the use of the engine it controls, it is manufactured and shipped by Deere in an unconfigured state. The Court concluded, therefore, that the unwanted wire could not be considered defective workmanship. Deere could still be liable if it installed, and configured, the PPC. The only admissible evidence in the record supported Deere's contention that it did not. Carlisle attempted to prove otherwise with his statement that the engine installer had told him that Deere configured the wiring. The Court concluded that the statement was classic hearsay and rejected Carlisle's contention that the installer was either authorized to make the statement or was an agent of Deere's under Rule 801(d).

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MILWAUKEE DEPUTY SHERIFF'S ASSOCIATION v. CLARKE, JR. (July 21, 2009)

In mid-2005, possibly in response to public criticism of his use of police officers as escorts, Milwaukee County Sheriff Clarke posted a message on the department bulletin board: "If you are afraid or have lost your courage, you may go home, otherwise you will ruin the morale of others." Michael Schuh, a veteran police officer, was offended. He submitted a statement to the union newsletter: "If you are afraid or you have lost your courage and need two deputies and a sergeant to escort you every time you fly in and out of the airport and patrol deputies to drive by your house when you're out of town you should resign and go home! Then you would lift the morale of this whole department (a.k.a. office)." A few days later, Sheriff Clarke assigned Schuh to a newly-created patrol in the most dangerous part of the town -- in full uniform, without a partner, and without a car. At about the same time, Sheriff Clarke issued a revised departmental confidentiality policy. The policy required employees to keep "official agency business" confidential and not to speak on behalf of the department. Officer Schuh and the union brought suit, alleging violations of state law as well as First Amendment retaliation under § 1983. The suit also challenged the confidentiality policy as an unlawful prior restraint. The district court granted summary judgment to Sheriff Clarke on the federal claims. Schuh and the union appeal.

In their opinion, Judges Kanne, Rovner and Evans affirmed. The Court applied the three-step First Amendment retaliation analysis. The only step in dispute was whether Schuh's speech was constitutionally protected. To be protected, the speech must be of public concern. The Court considered the content, form and context of Schuh's statement. The Court noted that the form, a union newsletter, and the content, the Sheriff's abuse of department resources, could weigh in favor of constitutional protection. The context of the statement, however, led the Court in a different direction. The Court concluded that the context of the speech showed that it was a purely private matter. It did not focus on the fiscal repercussions of the Sheriff's conduct but rather on the personal impact of his original statement. Since the speech is not protected, Schuh's retaliation claim fails. With respect to the prior restraint claim, the Court first looked to whether the confidentiality policy applied to protected speech – i.e., the speech of a citizen on a matter of public concern. Since the policy on its face applied only to "official agency business," the Court concluded that it must apply only to speech related to an employee's professional duties. Since it did not regulate protected speech, it was not an unlawful prior restraint.

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

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

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

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

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

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

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STEPHENS v. ERICKSON (June 30, 2009)

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

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

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 UNITED FOOD AND COMMERCIAL WORKERS v. ILLINOIS-AMERICAN WATER COMPANY (June 26, 2009)

Glenn Williams was a wastewater treatment operator for Illinois-American Water Company ("IAWC"). IAWC discovered that Williams was operating without a required Illinois EPA license. Because it was Williams' second offense, it was punishable by termination. Instead of firing Williams, however, IAWC offered him a Last Chance Agreement ("LCA"). Under the LCA, Williams was suspended without pay for 30 days, he was required to obtain his license within six months, and he was required to repay the extra compensation he received as a result of IAWC's belief that he was licensed properly. The LCA also provided that failure to comply would result in Williams' immediate termination and any disputes regarding the agreement would be resolved through the collective bargaining agreement’s arbitration procedure. The United Food and Commercial Workers Union, which represented Williams, filed a grievance contesting the LCA's validity. When Williams failed to make repayment arrangements, IAWC terminated his employment. The union filed a second grievance. The grievances were consolidated and brought before an arbitrator. The arbitrator ruled against the union on the validity of the LCA but ordered Williams reinstated. He concluded that the termination was improper because of the pending, good faith challenge to the LCA itself. On review, the district court confirmed the arbitration award. The union appeals.

In their opinion, Judges Posner, Kanne and Wood affirmed. The Court identified its limited role in reviewing arbitrator's awards. As long as an arbitrator bases his decision on an interpretation of the agreement, the court will enforce the award. Here, the arbitrator confronted a situation that he thought was not covered by the agreement. One provision gave IAWC the absolute right to terminate Williams' employment. Another provision gave the union the right to challenge the validity of the LCA. The arbitrator concluded that the agreement contained an implied term – that Williams' employment could not be terminated during the pendency of a good faith grievance over the validity of the agreement itself. Since his award was based on an interpretation of the agreement, the Court affirmed.

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INTERNATIONAL UNION OF OPERATING ENGINEERS, LOCAL 150 v. WARD (April 16, 2009)

Local 150 represents over 22,000 union members in Illinois, Indiana and Iowa. Joseph Ward was its treasurer 1986 until 2007. In 1994, the president of the local asked Ward to purchase property adjacent to the local’s headquarters. Instead of purchasing the property for the union, however, Ward participated in the purchase of the property by an investment group. The group sold the parcel several years later at a substantial profit. Local 150 filed a complaint against Ward, alleging violations of § 501 of the Labor-Management and Reporting Disclosure Act of 1959 (the “Act”) and breaches of fiduciary duty. The district court dismissed the complaint, concluding that § 501 does not allow a labor union to bring a private cause of action. Local 150 appeals.

In their opinion, Judges Kanne, Williams and Sykes reversed and remanded. The Court started with the language of the Act. Section 501(a) imposes fiduciary duties, including a duty of loyalty, on a union’s officers and agents. Section 501(b) creates a federal cause of action for individual union members. Damages recovered under § 501 (b) inure to the benefit of the union itself. Before a union member may sue, she must make a demand that the union take appropriate action and then must receive the court’s permission, on a showing of good cause, to proceed. The Act is silent on a union’s ability to bring an action. On that threshold question, the Court first found no express cause of action under a plain reading of the Act. With respect to whether the Act contains an implied cause of action, the Court noted a split of authority between the Ninth in Eleventh Circuits. Relying on the Supreme Court’s holding in Alexander, the Court concluded that its task was to determine whether Congress intended to create both a private Right and a private remedy. The Court's analysis of the text and structure of § 501 led it to conclude that Congress did intend to create both a federal right and a federal remedy for a union.

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LEWIS v. CITGO PETROLEUM CORP. (April 6, 2009)

Michael Lewis and Tammy Livingston, employees of Philip Services Corporation, were performing maintenance work at a CITGO refinery when they were allegedly exposed to a hazardous gas. Emergency personnel responded, they went to the hospital, they received a full medical examination, they were released, and they returned to work the next day. Several years later, Lewis and Livingston asserted common-law negligence claims against CITGO. Livingston also asserted a negligent infliction of emotional distress claim. Their claims were supported by two physicians -- -- Dr. Jordan Fink, a doctor of internal medicine, and Dr. Norman Kohn, a psychiatrist and neurologist. The court granted summary judgment to CITGO, holding that the plaintiffs had failed to satisfy their burden of demonstrating the reliability of the expert testimony. Lewis and Livingston appeal.

In their opinion, Judges Ripple, Kanne and Tinder affirmed. The Court first addressed the question of whether Livingston was a "bystander" or a "direct victim" for purposes of the emotional distress claim under Illinois law. Concluding that she was a "direct victim," the Court noted that the plaintiffs' burden on both the common-law negligence and negligent infliction claims were to demonstrate a duty on the part of defendant and a breach that proximately caused the injury. The Court turned to causation and the lower court’s exclusion of the expert testimony. The Court approved the lower court’s application of Rule 702 and Daubert. It is the burden of the proponent, said the Court, to establish both the qualifications and the methodology of its experts. CITGO challenged Dr. Fink on both qualifications and methodology -- it challenged Dr. Kohn only on methodology. Although the Court recited some of the problems relating to the experts, it ultimately relied on the fact that plaintiffs failed to advance any substantive arguments in support of their experts’ qualifications. The Court concluded that the lower court was well within its discretion to exclude the evidence. Without this testimony, neither Lewis nor Livingston could provide evidence of causation with respect to the common law negligence claims. With respect to Livingston's claim for negligent infliction of emotional distress, however, one of CITGO's own experts did testify that Livingston experienced "relatively mild" anxiety as a result of the exposure. The Court agreed with the lower court’s conclusion that the injury did not reach the threshold of severity to be compensable and was properly dismissed.

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HAMPTON v. FORD MOTOR COMPANY (April 6, 2009)

Collette Hampton worked the night shift Ford's Chicago assembly plant. In the summer of 2004, she allegedly experienced sexual harassment and discrimination on her job. She filed a charge of discrimination in late 2005. While awaiting a resolution of her charge, she learned that Ford was offering a buyout package to eligible employees. The program was system wide, with the goal of reducing Ford's hourly workforce. The buyout came with a lump sum payment of $100,000 in exchange for a waiver of "all rights or claims" against Ford and a promise "not to institute any proceedings of any kind" against Ford. Hampton, knowing that she was scheduled to be laid off in 2006 anyway, applied for the package. She received a written description of the program, was invited to an informational meeting, and was instructed to consult with the company or her union if she had any questions. Hampton received and cashed Ford's check and left Ford's employ. Meanwhile, however, after she applied for the program and signed the release but before she received the check, she brought an action against Ford, alleging sexual discrimination and harassment in violation of Title VII. The district court granted summary judgment to Ford, holding that Hampton had released her Title VII claims as a matter of law. Hampton appeals.

In their opinion, Judges Kanne, Evans and sites affirmed. The Court first addressed Hampton’s argument that she never intended to waive her Title VII claims. The Court found no ambiguity in the waiver language. Relying on the principle, that an unambiguous contract must be enforced as written, the Court concluded that both the waiver language and the covenant language covered and barred her Title VII claims. Next, the Court addressed Hampton’s argument that her waiver was not knowing and voluntary. The Court agreed that the release of a federal right must be knowing and voluntary but concluded that Hampton failed to present enough evidence in support of her assertion. The Court relied on Hampton’s education, the clarity of the document, the time she had to consider it, her concurrent representation by counsel and the explanations provided or offered in concluding that her waiver was knowing and voluntary.

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THE CORNUCOPIA INSTITUTE v. UNITED STATES DEPARTMENT OF AGRICULTURE (March 26, 2009)

The Cornucopia Institute submitted three separate FOIA requests to the United States Department of Agriculture ("USDA"). When the USDA failed to respond within the required time period, Cornucopia filed suit for injunctive relief, a writ of mandamus and attorneys fees. While the suit was pending, the USDA produced the responsive documents. The court dismissed the case as moot. The court also denied the request for fees on the grounds that Cornucopia had not "substantially prevailed." Cornucopia appeals.

In their opinion, Judges Manion, Kanne and Kendall affirmed. First, the Court rejected Cornucopia's argument that the lower court’s ability to still grant declaratory relief renders the case not moot. Declaratory relief is appropriate only when the ruling would have an impact on the parties. Cornucopia has failed to make such a showing. The Court concluded that a case must be dismissed when it is impossible for the court to grant any effectual relief – as is the case here.

With respect to attorneys’ fees, the district court concluded that Cornucopia was not a prevailing party under Buckhannon because it obtained no judicial relief. The Court pointed out that Buckhannon’s requirement of judicial relief was eliminated in the OPEN Government Act of 2007 (enacted while the appeal was pending). Because Cornucopia waived any argument that the Act applies retroactively, however, the Court concluded that the district court acted within its discretion in denying the request for fees.

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MALONE v. RELIASTAR LIFE INSURANCE CO. (March 12, 2009)

Gordon Beeler disappeared in January of 1998, leaving behind a wife of 30 years, four children, a business partner and $2.6 million in life insurance policies. A trust was the beneficiary of the policies. The insurance companies denied benefits in 2003, and again in 2005, citing evidence that Beeler may have been alive. The beneficiaries brought suit against the insurance companies, seeking death benefits and punitive damages. The district court granted summary judgment to the insurance companies on the punitive damages claim. The breach of contract claim was tried to a jury. The trustee presented evidence that Beeler had been missing since the date of his disappearance, that the family had conducted numerous investigations into his disappearance, and that he had not been in communication with his family or friends since the day of his disappearance. The insurance companies presented evidence of a troubled family situation, a strained marriage, and witnesses who claimed to have seen Beeler after the date of his disappearance. The jury returned a verdict in favor of the defendants. The district court denied the trustee’s Motion for a New Trial. The trustee appeals.

In their opinion, Judges Kanne, Williams and Sykes affirmed in part, vacated in part and remanded for a new trial. On the punitive damages issue, the Court concluded that there was a good-faith dispute over coverage. Under Indiana law, a good-faith coverage dispute precludes punitive damages. The Court affirmed the district court. With respect to the death benefits claims, however, the Court found that the district court had erred. In Indiana, a claimant may prove an insured’s death in two different ways. It can present evidence, direct or circumstantial, that the insured is, in fact, dead. Alternatively, it can seek a common law presumption of death by showing that the individual has been "inexplicably absent" for seven years, that the individual has not communicated with close family and friends and that the individual cannot be found despite diligent search. That presumption can be rebutted by proof of facts inconsistent with the presumption. The Court found two errors in the district court's approach to the trial. First, the district court erred in instructing the jury that "inexplicably absent" meant that Beeler’s absence was "unexplained by circumstances other than those suggesting death." The Court concluded that the presumption arises when the plaintiff proves a seven-year absence, a lack of communication, and an inability after diligent search to find the person. Any evidence offered to explain the disappearance is relevant only to rebutting the presumption. Second, the Court found error in the special verdict form. The jury was asked three questions: whether the plaintiff raised the presumption of death, whether the defendants rebutted the presumption of death, and whether plaintiff proved that Beeler was, in fact, dead. The special verdict form instructed the jury to conclude its deliberations if it answered no to the first question. The jury did answer no to the first question, it did conclude its deliberations, and it never considered whether plaintiff proved that Beeler was, in fact, that. The Court conceded that either of the two errors, standing alone, might not have required a reversal. Considered together, however, they amounted to reversible error.

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HANSEN v. BOARD OF TRUSTEES (December 23, 2008)

Hamilton Southeastern High School (“HSHS”) hired Dmitri Alano as a teacher and assistant band director in 1988. Prior to his hiring, the Hamilton Southeastern School Corporation (“HSSC”) conducted its normal pre-hire process, which included an application and questionnaire, interviews, reference checks, and license and background checks. Alano began a sexual relationship with a student in 2000. The student concealed the relationship from her family and friends. A couple of years after the relationship ended, the student revealed the relationship to her therapist. Her parents and the police were informed. HSHS suspended Alano; he ultimately resigned. The student’s parents (the Hansens) brought federal claims under Title IX and 42 U.S.C. § 1983 and several state law claims against Alano and HSSC. The court granted summary judgment on two of the seven counts with respect to Alano. The court granted summary judgment on all seven counts with respect to HSSC and entered a Rule 54 (b) final judgment. The Hansens appeal the dismissal of the Title IX claim and the state law claims.

In their opinion, Chief Judge Easterbrook and Judges Kanne and Tinder affirmed. The Court first addressed the Title IX claim. In order for the Hansens to establish a Title IX claim against HSSC for Alano’s conduct, it must prove that an official with authority to adopt corrective measures either had actual knowledge of the teacher’s misconduct or was deliberately indifferent. The Court concluded that the evidence did not establish that any HSSC official had such knowledge. The Court next rejected the Hansens’ claim that the district court should have declined to exercise jurisdiction over the state law claims once it had dismissed the federal claims. The Court found that the district court properly exercised jurisdiction in the first place – the claims are all based on a common set of facts. The court’s discretion under 28 U.S.C. § 1367(c) was never triggered since it maintained jurisdiction over the federal claim against Alano. Even if it had, the lower court considered a balance of the proper factors (judicial economy, convenience, fairness, comity).

The Court considered the state law claims in two categories: direct claims against HSSC for its own negligence and respondeat superior claims under which HSSC could be responsible for Alano’s conduct. On the former, the Court noted that Indiana does recognize a cause of action for the negligent hiring, supervision or retention of an employee. Although the Court noted the confusion over whether Indiana applies an “actual knowledge” or a “knew or should have known” standard, it did not matter. Hansen failed to satisfy even the lesser standard. On the respondeat superior claims, the Court stated that HSSC would be responsible for the tortious acts of Alano if they were committed within the scope of his employment. Indiana courts have held that an employee’s sexual misconduct is within the scope of his employment only when the employment itself involves extensive physical contact. Alano’s duties did not involve any physical contact. The respondeat superior claims must fail as well. Finally, the Court held that Indiana does not recognize a non-delegable duty for the safekeeping of its students.

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GIRL SCOUTS OF MANITOU COUNCIL v. GIRL SCOUTS OF THE UNITED STATES OF AMERICA (December 15, 2008)

Juliette Low founded the Girl Scouts of the United States of America (“GSUSA”) in 1912. GSUSA is run by a national council and its board of directors. In its almost 100 years of existence, GSUSA has developed a large network of local girl scout councils. GSUSA first chartered Girl Scouts of Manitou (“Manitou”) as a council in 1950. As of 2005, there were over 300 local councils. Each council has a charter issued by GSUSA that defines the relationship between the two and grants the council the right to maintain scouting throughout its jurisdiction. In 2005, GSUSA announced a plan to consolidate councils. It planned to reduce the number of councils to just over one hundred. Each council would be larger and, GSUSA hoped, more efficient. The plan would have required Manitou to merge 60% of its territory with six other nearby councils and cede 40% of its territory to two other councils. Manitou decided not to go along. It filed suit in February 2008 against GSUSA. It alleged breach of contract, tortious interference and a violation of the Wisconsin Fair Dealership Law. It sought to permanently enjoin GSUSA from altering its territory. The district court denied Manitou’s request for a preliminary injunction without a hearing. The court held that Manitou had failed to demonstrate that it would suffer irreparable harm in the absence of the injunction. Manitou appeals.

In their opinion, Judges Posner, Kanne and Tinder reversed and entered the requested order enjoining GSUSA. The Court led off with the familiar two-phase test for a preliminary injunction. A movant must demonstrate: a) irreparable harm, b) inadequate legal remedy, and c) a likelihood of success. The movant who succeeds in that first phase enters a second phase in which the court balances the injury to the plaintiff, its likelihood of success, the possible injury to the defendant if the injunction issues, and the public interest. The court uses a balancing test in which the greater the plaintiff’s likelihood of success, the less the balance of harm needs to be in its favor. Applying that test, the Court first addressed irreparable harm, the only of the first-phase factors addressed by the district court. The Court disagreed with the court below. It found that Manitou’s loss of jurisdiction would severely affect its ability to generate revenue and harm its goodwill. That harm would not be rectified if a final judgment were entered in its favor and the loss of jurisdiction reversed. The Court also disagreed with the court below on the application of the Wisconsin Fair Dealership Law, under which a “dealer” in Manitou’s circumstances enjoys a statutory presumption of irreparable harm. The Court found that Manitou fit within the statutory definition of “dealer” in the act.

Having found that Manitou established irreparable harm and also noting that the record contained sufficient information to address the rest of the two-phase analysis without remand, the Court proceeded to do so. The Court found that the timing of and difficulty in calculating a damages award established that Manitou’s legal remedies were inadequate. On the likelihood of success factor, the Court noted that it only had to find a “better than negligible” chance of success to satisfy this prong. The Court evaluated only the Wisconsin Fair Dealership Law claim and found that Manitou satisfied that minimal standard.

In addressing the balancing portion of the test, the Court found a “drastic imbalance” in favor of Manitou. The Court noted that the national GSUSA program to consolidate regions was not even scheduled to be completed for a year. Any delay in the Wisconsin part of that plan would not lead to any harm to GSUSA. In addition, any harm to GSUSA could be rectified later. The Court did not feel the need to conduct a deeper analysis of Manitou’s likelihood to succeed given the imbalance of the harm.

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