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

BIVENS v. TRENT (January 6, 2010)
 

In his position as an officer in the Illinois State Police, Jimmy Bivens was responsible for the operations of an indoor firing range. He performed his job well. He greatly improved the conditions at the range and was commended for his work. After a few months of working at the range, however, Bivens began to feel quite ill. He was concerned that his symptoms were related to lead exposure at the range. Blood tests revealed highly elevated levels of lead. Bivens filed a union grievance, alleging unsafe working conditions. Within days, the range was tested and closed for remediation. Bivens' blood lead levels returned to normal within a few weeks and he returned to work. He only worked for one week, however, claiming that he continued to experience health problems. The State Police arranged for independent examinations by a neurologist and psychiatrist. Both found Bivens' health to be normal and approved his return to work. The State Police terminated Bivens' disability benefits. Bivens brought suit pursuant to §1983, alleging that his superiors violated the First Amendment by retaliating against him for filing the union grievance. The district court granted summary judgment to the defendants on the ground that his speech was not protected because it was part of his official duties. Bivens appeals.

In their opinion, Judges Posner, Manion and Evans affirmed. One of the several elements of Bivens' §1983 claim is that he engaged in speech protected by the Constitution. The Court agreed with the district court that Bivens had an obligation, as part of his job, to report his concerns about lead contamination. It also agreed that any such reports to his superiors would not be protected under the Supreme Court's Garcetti decision. Here, however, the speech was not through Bivens' chain of command but as a union grievance. The Court was unwilling to conclude, because of the availability of an alternative holding, that the union grievance could not be protected speech. To be protected, the speech must also address a matter of public concern. The Court looked to the content, the context and the form to determine whether the speech addressed a matter of public concern. The court concluded that the context -- Bivens' own illness -- and the form -- an internal union grievance -- were more consistent with the vindication of a private, rather than a public, interest. Although the content referenced a subject of potential public interest, the Court concluded that Bivens was not attempting, by his speech, to bring this safety issue into the open. Being purely private, the speech was not protected and retaliation claim fails. 

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SALMERON v. ENTERPRISE RECOVERY SYSTEMS (August 27, 2009)

Rhonda Salmeron was fired by Enterprise Recovery Systems ("ERS"). Thereafter, she brought a qui tam action, alleging that ERS engaged in fraud related to its student loan debt collection practices. Jorge Sanchez represented Salmeron. During the three years the suit was pending in district court, Sanchez missed numerous deadlines, failed to appear in court and repeatedly failed to live up to his promises. Sanchez' conduct ultimately led the trial court to dismiss the case. On Sanchez' motion, the court reopened the case -- but warned Sanchez that it was "the final warning." Within weeks, confidential documents produced by the defendants in the case appeared on the Internet. Although no confidentiality order was in place at the time, the defendants emphasized to Sanchez that they intended the documents to be confidential and the parties agreed to keep them so. The principal reason the confidentiality agreement was not in place was because Sanchez never provided any comments or changes. Sanchez admitted leaking the document to numerous outside sources. The court dismissed the case with prejudice, finding that Sanchez violated the agreement with defendants' counsel to keep the documents confidential. Salmeron appeals.

In their opinion, Judges Ripple, Manion and Tinder affirmed. The Court first expressed its agreement with the district court that Sanchez had agreed to keep the documents confidential, pending the entry of a protective order. The Court next concluded that Sanchez' disclosure of the document to a member of the press was sufficient to support the court's finding of willfulness. The Court went on to reject the additional arguments: Sanchez had fair warning of the possibility of dismissal, defendants' failure to obtain the protective order earlier does not excuse Sanchez’ conduct, a showing of prejudice to the defendants is not required, and the government's interest in the case does not warrant a different result. In short, the Court found no clear error or abuse of discretion.

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DURABLE MANUFACTURING CO. v. UNITED STATES DEPARTMENT OF LABOR (August 18, 2009)

Congress has specified a process under which an employer is allowed to obtain a visa for an alien worker. Before the government can issue a visa to such an alien, it must have issued a labor certification. A labor certification is a statement by the Secretary of Labor that there are insufficient qualified workers available to perform specific work and that the hiring of an alien to perform the work will not adversely affect wages and working conditions. In the past, labor certifications were generally valid indefinitely. The regulations were amended, effective July 2007, to provide that a labor certification was only valid for 180 days from the date of the certification. A number of employers who had received labor certifications and the aliens who were to be hired filed suit, alleging that the agency acted beyond its authority in amending the regulation or, alternatively, that it should not have been applied retroactively. The district court granted summary judgment to the government. The employers and aliens appeal.

In their opinion, Judges Manion, Rovner and Tinder affirmed. The Court looked to both the language of the statute and its purpose in order to determine whether the agency acted within its authority in amending the regulation. Here, the statute actually requires the Secretary of Labor to certify the labor supply "at the time of" the visa application. The earlier version of the regulation did not address this temporal requirement -- the amendment does. The amended regulation also promotes the purposes of the statutory scheme by ensuring that the visa determinations are based on current labor market indicators. The Court concluded that the agency was within its authority in promulgating the amendment. With respect to the argument that the amendment was an illegal retroactive rulemaking, the Court concluded that the amendment did not, in fact, have retroactive application. Under the Supreme Court's decision in Landgraf, an amendment only has retroactive effect if it "would impair rights a party possessed when he acted, increase a party's liability for past conduct, or impose new duties with respect to transactions already completed." Some of the certifications at issue were not approved until after the effective date of the amendment -- the amendment had no retroactive application with respect to them. With respect to the applications that were approved prior to the amendment, the plaintiffs possessed a right -- the right to a certification of "indefinite" validity. Their right was to a certification that was valid until the agency fixed a different period of validity. The amendment did nothing more and thus does not operate retroactively.

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POLLOCK v. UNITED STATES DEPARTMENT OF JUSTICE (August 13, 2009)

For almost 100 years, the United States government has operated a gun range on the shores of Lake Michigan just north of Chicago. Bullets and shotgun pellets ended up in the lake. These bullets and pellets contain lead, a toxic substance potentially harmful to human health. Steven Pollock is an attorney who lives approximately 13 miles from the range. He is also the executive director of an environmental group interested in the protection of Lake Michigan. Pollock and the environmental group brought a suit against the United States, alleging that the release of lead into the lake violated several federal environmental laws. The plaintiffs supported their standing by submitting the affidavits of Pollock and another group member. They stated that they enjoyed watching birds and visiting parks in the general vicinity of the range, they drank water from the lake and they ate fresh and saltwater fish. The district court dismissed the complaint for lack of standing. Plaintiffs appeal.

In their opinion, Judges Cudahy, Manion and Tinder affirmed. The only issue before the Court was standing. The Court recited the general standing requirements -- a concrete threat of injury, an injury that is actual and not hypothetical, an injury traceable to the defendant's conduct, and an injury likely to be redressed through a favorable decision of a court. After reviewing some of the Supreme Court jurisprudence on standing, the Court addressed each of the injuries listed in the affidavits. First, the fact that Pollock drinks water from the lake does not support standing. He failed to carry his burden of showing that any alleged pollution affected his particular water supply. Second, Pollack’s statement that he eats "fresh water and ocean" fish does not even implicate Lake Michigan and does not support standing. Third, his general allegations that he enjoys "watching wildlife" and enjoys the "public areas" in and near Lake Michigan are not specific enough geographically to support standing. Since Pollock cannot establish his own standing, the environmental group cannot either.

Judge Cudahy concurred in a separate opinion. He criticized the Supreme Court for developing an "injury in fact" test that was "hopelessly confusing" to apply. Although he concurred, he found the alleged injury relating to drinking water to be a much closer question than the majority. Instead of relying on the failure of the allegations to create standing, Judge Cudahy looked at the evidence presented. Instead of a mere facial challenge to standing, the defendants here challenged the factual basis for Pollock's alleged injury. Judge Cudahy cited the government’s evidence that Pollock's community draws its drinking water from outside the area of the lake affected by the range and that the community has attributed the small amount of lead in its drinking water to pipes, not bullets. Relying on that evidence, Judge Cudahy concurred.

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VRENI BUCHEL-RUEGSEGGER v. BUCHEL (August 6, 2009)

Vreni Buchel-Ruegsegger and Georg Buchel were married in Wisconsin in 1951, where they lived until they moved to Switzerland in approximately 1990. Vreni Buchel-Ruegsegger is a dual citizen of the United States and Switzerland -- Georg Buchel is a dual citizen of the United States and Lichtenstein. In April of 2000, Buchel executed his final will and directed that his estate be divided according to Swiss law. Two months later, however, he ordered his bank to transfer 200,000 Swiss francs to his son John. John lived in Wisconsin with his family. Buchel died two days later. A Swiss court appointed Buchel-Ruegsegger as Buchel's personal representative, pursuant to which she sought to rescind the gift. The Swiss court ruled that she was entitled to 100,000 of the francs and that their daughter was entitled to 50,000 of the francs. When Buchel-Ruegsegger attempted to collect the money from her son, he refused. She filed suit in Wisconsin, alleging a conversion under state law. The district court concluded that John had converted the funds, since a Swiss court had determined that the gift was unlawful. John appeals.

In their opinion, Judges Manion, Rovner and Tinder vacated and remanded. The Court never reached the merits. It never got beyond jurisdiction. The statute under which Buchel-Ruegsegger brought the suit grants jurisdiction to claims between "citizens of a State and citizens or subjects of a foreign state." Here, a dual citizen of the United States and Switzerland has brought suit against a United States citizen. The Court cited its previous decision in Sadat, which held that a court should consider only the American nationality of a citizen of both the United States and a foreign country. Applying that rule, the court concluded that Buchel-Ruegsegger and John Buchel are both United States citizens and jurisdiction does not arise under § 1332(a)(2). The Court also considered whether it could have jurisdiction from another source. The only possible source here is diversity jurisdiction. Since an American citizen living abroad is not a citizen of any particular state for diversity purposes, that statute fails to provide jurisdiction as well. The court vacated with instructions to dismiss without prejudice.

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R. R. STREET & CO. v. VULCAN MATERIALS CO. (June 25, 2009)

R. R. Street has been the exclusive distributor for a dry cleaning solvent manufactured by Vulcan since 1961. Street alleges that Vulcan promised, in 1992, to and indemnify and defend Street for claims brought with respect to the solvent. Several lawsuits of that type are now pending against both Street and Vulcan. Several of Vulcan's insurers, including National Union, brought suit in California for a declaration that they are not required to defend Vulcan. National Union is also Street's insurer and has been defending Street in those lawsuits because Vulcan has refused to do so. Street and National Union sued Vulcan for breach of contract, promissory estoppel and indemnity. In addition, they asserted a claim for a declaration that Vulcan must defend and indemnify Street. Vulcan moved to either dismiss or stay the case pending resolution of the California case. The district court dismissed the case pursuant to theWilton/Brillhart doctrine. Vulcan appeals.

In their opinion, Judges Manion, Rovner and Tinder reversed and remanded. The Court noted that the relief provided in the Declaratory Judgment Act is discretionary. In Wilton and Brillhart, the Supreme Court held that district courts had much discretion in deciding whether to even entertain a declaratory judgment action. It is undisputed, the Court continued, that a district court can dismiss a complaint where only declaratory relief is requested. Here, however, plaintiffs seek both declaratory and non-declaratory relief. The Court noted that it had never ruled on that issue -- although several other courts of appeal had. The Fifth Circuit holds that Wilton/Brillhart is inapplicable when a non-frivolous claim for non-declaratory relief is present. The Second, Tenth and Fourth Circuits endorse similar results. The Ninth Circuit, on the other hand, rejects a bright line rule. It first asks whether non-declaratory claims exist that are independent of the declaratory relief requested. Independent claims are those that have a separate basis for jurisdiction and that can be resolved without the declaratory relief. If these independent claims exist, at least in the Ninth Circuit, the district court has almost no discretion to refuse to entertain them. The Court, upon reflection, thought the Ninth Circuit's approach was preferable and adopted a test whereby a district court should first determine whether the non-declaratory claims are independent of the declaratory claims. The Court defined "independent claim" as one which has its own jurisdictional basis and is viable without regard to the declaratory claim. If the non-declaratory claims are independent, Wilton/Brillhart doctrine should not be applied and the court should hear the claims. A court should also retain the declaratory claims for the sake of efficiency. Here, the non-declaratory claims are independent -- the district court would have diversity jurisdiction over the claims and declaratory relief is not a prerequisite for the resolution of the claims. The district court should have retained both the non-declaratory and declaratory claims.

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BODENSTAB v. COUNTY OF COOK (June 22, 2009)

Dr. Philip Bodenstab was an anesthesiologist at Cook County Hospital from 1993 until 2002. In February of 2002, Bodenstab, recently diagnosed with cancer, had a telephone conversation with a friend during which he threatened to kill his supervisor and co-workers. The friend contacted theFBI and Chicago police. The FBI and police contacted the director of the hospital and told him that the threats were credible. The hospital suspended Bodenstab with pay. Over the next several months, Bodenstab went through a series of assessments, evaluations and treatments. After his discharge from treatment and evaluation by the hospital's own psychiatrist, the hospital conducted a pre-disciplinary hearing on the major infraction of threatening to kill coworkers. The hearing officer concluded that the infraction warranted discharge. The hospital fired him. Bodenstab brought an action against Cook County and several individuals seeking to overturn the administrative decision and bringing affirmative allegations that his discharge violated the Americans with Disabilities Act, the First Amendment and due process. The district court granted summary judgment to the defendants. Bodenstab appeals.

In their opinion, Chief Judge Easterbrook and Judges Flaum and Manion affirmed. The Court rejected each of Bodenstab's arguments in turn. The ADA disparate treatment claim failed because Bodenstab presented no evidence challenging the sincerity of the hospital's belief that he threatened to harm his co-workers. Even if they were mistaken, the Court held that Bodenstab could not show pretext if they reasonably believed the threats. The ADA failure to accommodate claim failed because there is no obligation to accommodate conduct -- and conduct was the reason Bodenstab was fired. The First Amendment claim failed for the same reason the ADA disparate treatment claim failed. Bodenstab was fired because he threatened to kill coworkers -- not because of his speech -- and Bodenstab introduced no evidence otherwise. The Court next rejected Bodenstab's common-law certiorari claim to review the administrative decision on the merits. That claim presents the question of whether the record contains any evidence which fairly tends to support the findings -- it does. Finally, the Court concluded that Bodenstab was afforded adequate notice and a pre-termination hearing that complied with the mandates of due process.

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HEALTH CARE INDUSTRY LIABILITY INSURANCE PROGRAM v. MOMENCE MEADOWS NURSING CENTER, INC. (May 20, 2009)

The Health Care Industry Liability Insurance Program (the "Insurer") issued a commercial general liability policy to Momence Meadows Nursing Center, Inc. (“Momence”). The policy included commercial general liability coverage and professional liability coverage. After the policy was issued, two former employees brought an action against Momence for violations of the False Claims Act and the Illinois Whistleblower Reward and Protection Act ("IWRPA"). The suit alleged that Momence submitted false claims to the United States and the State of Illinois and that the employees were retaliated against for bringing the charges. The basis for the false claims charge was that Momence improperly certified that it was meeting the Medicare and Medicaid standards of care. The complaint alleged numerous instances of improper care, inadequate nutrition, and injuries to patients. The insurer brought this action for a declaration that it had no duty to defend or indemnify Momence. The court granted summary judgment to the insurer on the duty to defend and held that the issue of indemnification was not ripe. Momence appeals.

In their opinion, Judges Manion, Rovner and Sykes affirmed. The Court first addressed Momence's argument that the district court’s rulings on the issues of duty to defend and indemnification were inconsistent. The Court actually agreed with Momence but disagreed on the outcome. In Illinois, the duty to defend its broader duty to indemnify. Therefore, a finding of no duty to defend precludes a finding of a duty to indemnify. Instead of allowing the lower court’s decision on indemnity to reopen its decision on a duty to defend, the Court simply concluded that there was no duty indemnify if the district court properly held there was no duty to defend. The Illinois rule on duty to defend is that if any portion of a complaint is potentially within the scope of coverage, an obligation exists. The Court rejected Momence's argument that the allegations of physical injury underlying the false claims and IWRPA counts fell within the "bodily injury" coverage of the policies. The Court concluded that the damages sought by those counts of the complaint resulted from the allegations of false filings, not from allegations of bodily injury. The Court could find no theory of recovery in the complaint that required proof of bodily injuries. The Court also summarily rejected Momence's arguments that the retaliation counts were somehow included within the policies’ coverage.

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 WALKER v. CALUMET CITY (May 15, 2009)

Calumet City passed an ordinance under which real property had to pass an inspection and be in compliance with city codes before it could be sold. Ayanna Walker sued the City. She alleged that the ordinance unreasonably restrained her ability to sell her property, that the ordinance violated procedural due process, and that the ordinance prevented her from selling her “non-conforming" property. While the complaint was pending, the property was inspected under a different city ordinance. Once the property was certified as in compliance, the City moved to dismiss the case as moot. The district court dismissed the case as moot and also awarded Walker her attorney fees. The City appeals the award of fees.

In their opinion, Judges Flaum, Manning and Rovner reversed. The Court recognized the prior rule that a court may award attorney fees if a defendant voluntarily provides the relief sought by the plaintiff. In Buckhannon, however, the Supreme Court held that courts may not award fees unless there is a "material alteration" in the relationship of the parties. The Supreme Court gave two examples: a) when the plaintiff has a judgment on the merits, and b) when the plaintiff obtains a consent decree from the court. The Court first noted that Walker's case did not fit within the "judgment on the merits" prong of Buckhannon. With respect to the second prong, the Court, citing its own precedent, concluded that it may allow an award in the case of a settlement agreement if: a) it was mandatory, b) it was captioned "Order", c) it was signed by a judge, and d) it provided for judicial enforcement. Although Walker attempted to fit her award into this framework, she failed to do so and was not entitled to a fee award.

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COLE v. STATE OF ILLINOIS (April 7, 2009)

Dynetta Cole was a receptionist for the State of Illinois. Her first year on the job was marked with many complaints about her performance, attendance and personality. After she was injured in a car accident, she took FMLA medical leave. She returned to work on a part-time basis after several weeks. Her performance and attendance issues continued. Cole’s supervisors ultimately presented her with an "employee improvement plan." The plan identified her attitude, her attendance and her performance as targeted areas for improvement. The plan required her to communicate more frequently about her schedule, become more aware of her tone and plan her daily schedule more efficiently. Her supervisors told Cole that she would be fired if she did not sign the plan. Cole refused to sign the plan -- Cole was fired. Cole brought suit against the State and her supervisors alleging retaliation for exercising her FMLA rights. The district court granted summary judgment to the defendants. Cole appeals.

In their opinion, Judges Manion, Evans and Tinder affirmed. The FMLA, stated the Court, makes it unlawful to terminate an employee for using FMLA leave. Cole chose the direct method of proof which required either an admission of discrimination or a "convincing mosaic" of circumstantial evidence that would allow the jury to infer discrimination. The Court agreed with the district court that Cole presented no evidence to suggest that her termination was anything more than her supervisors’ response to her refusal to sign the plan. Although her termination followed shortly after her leave, the Court noted that proximity in time by itself is rarely enough to create a material fact dispute. The court also rejected Cole's argument that the improvement plan itself constituted an adverse employment action. An adverse employment action must be one that would dissuade a reasonable employee from exercising her rights under the FMLA. Here, the improvement plan was merely her employer’s reasonable approach to improve her attitude and performance.

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CAROLINA CASUALTY v. ESTATE OF KARPOV (March 17, 2009)

Stanislaw Gill was driving his tractor-trailer on the Indiana Toll Road when he rear-ended a stopped car. More collisions followed. Eventually, four persons died and many others were injured. Carolina Casualty insured Gill and his employer. The policy provided a limit of $1 million of coverage for any one accident. Carolina Casualty filed an interpleader action, naming Gill, his employer, and everyone who had filed a claim arising out of the accident. Carolina Casualty deposited $1 million with court and sought a declaration that $1 million was the limit of its liability. The court granted summary judgment to Carolina Casualty. Margarita Karpov appeals individually and as administratrix of the estate of Dimitry Karpov.

In their opinion, Judges Cudahy, Manion and Williams affirmed. The sole issue on appeal was whether the Motor Carrier Act (“MCA”) and the endorsement issued by Carolina Casualty verifying compliance with the MCA establish coverage limits of $750,000 per person. The Court agreed that the MCA, in § 31139(b), establishes a $750,000 minimum level of financial responsibility. Appellants cite § 13906 for the proposition that the $750,000 level was a per-person, rather than a per-accident, threshold. Section 13906 provides: “The security must be sufficient to pay not more than the amount of the security, for each final judgment against the registrant for bodily injury to, or death of, an individual resulting from the negligent operation, maintenance, or use of motor vehicles, . . . .” Appellants rely on the “for each final judgment” language to argue that the limit was per person. The Court found little authority on the subject. Two district courts have relied on the “not more than” language to hold that § 13906 creates a limit of coverage from a single accident. One of the decisions was affirmed, albeit in an unpublished opinion. The Court agreed with the rationale of the district courts and held that the MCA did not create a per-person limit. The Court also rejected appellants’ argument that the policy endorsement itself created a per-person limit, on several grounds: a) the endorsement merely verifies compliance with the MCA, which does not adopt a per-person limit, b) the endorsement specifically refers to the per-accident limits in the policy itself, and c) the language of the endorsement is provided in a government regulation and states the limits “for each accident.” Finally, the Court found nothing in legislative history or public policy that supported a different conclusion.

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A.T.N., INC. v. MCAIRLAID’S VLIESSTOFFE GMBH & CO. (February 25, 2009)

Yossi Azaraf is the sole shareholder of A.T.N. Azaraf became interested in products manufactured by McAirlaid’s Vliesstoffe GmbH & Co. (“McAirlaid’s”) and its related enterprises. After some negotiations, Azaraf and McAirlaid’s entered into an agreement. The agreement provided that Azaraf wished to develop sales of McAirlaid’s in the U.S., would install manufacturing equipment in the U.S., and would use its best efforts to create a market for McAirlaid’s products in the U.S. In return, A.T.N. got the exclusive right to manufacture the products in the U.S. The agreement also provided that A.T.N.’s customers would “remain exclusive” to A.T.N. as long as A.T.N. purchased product from McAirlaid’s. A.T.N. never set up a manufacturing facility in the U.S. but did procure a customer. After about a year, McAirlaid’s notified A.T.N. that it would no longer provide the product. It then notified the customer that it would have to purchase the product directly from McAirlaid’s. A.T.N. brought suit, alleging breach of contract and unjust enrichment. The lower court granted summary judgment to McAirlaid’s. A.T.N. appeals.

In their opinion, Judges Manion, Evans and Tinder affirmed. The Court noted the dispute regarding the meaning of the “remain exclusive” clause but concluded that it need not decide that issue. Under Illinois law, a contract that lacks a duration term is generally terminable at will by either party. The agreement between A.T.N. and McAirlaid’s did lack such a term and is therefore terminable at will. The Court recognized one exception to that general rule – when a contract is terminable upon the occurrence of an event. Here, either party could end the contract simply by not performing. Either party’s non-performance is not the kind of specific event that would bring the contract out of the terminable at will category.

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

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

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

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JONES V. CITY OF SPRINGFIELD (January 26, 2009)

The police department of Springfield (the “City”) uses a promotion eligibility list to determine which officers can be promoted to sergeant. The list takes into account written and oral test scores, seniority and military service. The list is typically updated every two years but its life can be extended by a year. A list was due to be updated in October 2003 but was extended a year. At least one reason for the extension was to help one particular black officer (Ralph Harris) obtain a promotion. A few days before the new expiration date, the top three officers on the list were promoted, including Harris. Alan Jones, a white male, was fourth on the list. Once the new list was created, he dropped to twelfth place. He was not promoted until December 2006. Jones sued the City, claiming a violation of Title VII of the Civil Rights Act of 1964. He alleged that he was passed over for promotion because of his race. Jones conceded that there were no open positions but asserts that the City knew there would be a vacancy in a very short time and could have promoted him early – and would have promoted him early if he were black. The district court granted summary judgment to the City. Jones appeals.

In their opinion, Judges Bauer, Posner and Manion affirmed. The Court noted that Jones elected to proceed under both the direct and indirect methods of proof. Under the direct method, the plaintiff must prove that the adverse employment action was taken based on a discriminatory reason. The Court rejected Jones’ argument that he and Harris were similarly situated and Harris was treated more favorably. Since Harris was ranked higher on the list, they were not similarly situated. The Court also rejected Jones’ argument that the jury could have found that the City would have promoted him early had he been black. The Court referred to the absence of any evidence regarding the early promotion practice other than that the practice existed. Under the indirect method, Jones must show that there was an open position. The Court criticized the district court for treating the availability of an open position as part of a pretext argument. The Court emphasized that a plaintiff must make a prima facie case before any pretext argument even arises – and a prima facie case requires proof of an open position. Jones’ inability to show that an open position existed precludes him from establishing a prima facie case.

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CAMP v. TNT LOGISTICS CORPORATION (January 14, 2009)

Lola Camp was a truck driver in the employ of Transport Leasing Company (“TLC”). TLC in turn provided her services to DeKeyser Express (“DeKeyser”), a transport company. One of DeKeyser’s customers was TNT Logistics Corporation (“TNT”). TNT provided transportation logistics services to shippers. In January 2003, TNT directed DeKeyser to pick up a shipment of automobile parts from Trelleborg YSH, Inc. (“Trelleborg”) for delivery to a Mitsubishi automobile plant. DeKeyser assigned the job to Camp. When Camp arrived and surveyed the shipment, consisting of three pallets of parts, she concluded that the only way to fit them onto the truck was to stack one of the pallets on top of one of the others. She was concerned that such a load might not be safe. She advised Trelleborg, DeKeyser and TNT of her concern. TNT personnel advised DeKeyser and Camp that it understood the risk. TNT advised Camp to go ahead with the shipment. TNT released Trelleborg and Camp of any liability for cargo damage. When Camp arrived at her destination, she opened the truck door. The pallet started to fall – she injured herself while trying to prevent the fall. Camp brought an action against TNT and Trelleborg for negligence. The court granted summary judgment to TNT and Trelleborg. Camp appeals.

In their opinion, Judges Ripple, Manion and Sykes affirmed. The Court started with the elements of a negligence claim in Illinois – duty, breach of the duty, and an injury proximately caused by the breach. The Court found it necessary to discuss only the duty requirement. It understood Camp’s claim to be one for common-law negligence based on two alternate theories of duty – statutory and common-law. Camp alleged that the statutory duty claim arose from TNT’s and Trelleborg’s violation of the Federal Motor Carrier Safety Regulations (“FMCSR”). The Court disagreed. It noted that the regulations applied only to “motor carriers.” It held that TNT was not a motor carrier (Camp conceded that Trelleborg was not.) The Court distinguished between a “motor carrier,” defined as a “person engaged in the transportation of goods,” and a “broker,” defined as one who “provid[es] . . . or arrang[es]” for transportation by motor carriers. Even though “transportation” includes “services related to” the movement of property, the Court determined that TNT’s activities were that of a broker and did not rise to the level of providing services relating to the transportation. Also with respect to the statutory duty claim, the Court held that Camp could not recover from TNT or Trelleborg for aiding and abetting the violation of FMCSR. Camp herself violated the FMCSR. Illinois law does not allow a plaintiff to recover from a defendant for adding or abetting the plaintiff’s own tortious conduct.

With respect to the common-law duty claim, the Court identified the factors under Illinois law that courts consider to determine the existence of a duty: a) reasonable foreseeability of an injury, b) likelihood of an injury, c) magnitude of the burden of protecting against the injury and d) the consequences of placing this burden on the defendant. The Court concluded that neither TNT nor Trelleborg owed a duty of care to Camp -- Camp was aware of the risk, a reasonable person would have avoided the danger, TNT and Trelleborg knew of no particular reason why Camp would be compelled to act otherwise, Camp was in a better position to avoid the injury, it would be a burden to impose the obligation to avoid the injury on TNT or Trelleborg, and placing the burden on TNT and Trelleborg would result in significant resources devoted to preventing the injury. Having found no duty, Camp cannot establish negligence.

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520 SOUTH MICHIGAN AVENUE ASSOC. v. SHANNON (December 15, 2008)

520 South Michigan Avenue Assoc. does business as The Congress Plaza Hotel & Convention Center (“Congress Hotel”) in Chicago, Illinois. It employs approximately 130 room attendants (the employees who clean guest rooms). Unite Here Local 1 union (“Unite Here”) represents these employees. Congress Hotel and Unite Here had a collective bargaining agreement (“CBA”) that expired in 2002. Congress Hotel has agreed to abide by the expired CBA while the parties negotiate a new one. During the negotiations, the Illinois legislature passed the Hotel Room Attendant Amendment (the “Attendant Amendment”) to the One Day Rest in Seven Act. In relevant part, the Attendant Amendment: a) mandates two 15-minute break periods and a 30-minute meal period each day, b) provides a penalty of three times an employee’s wages for a daily violation, c) creates a rebuttable presumption that any adverse employer action after an employee’s exercise of rights under the section constitutes retaliation, and d) provides for an award of attorney’s fees and costs to a prevailing party in an enforcement action. The Attendant Amendment applies only to employees in Cook County, Illinois. Congress Hotel filed suit for a permanent injunction prohibiting enforcement of the Attendant Amendment. It argued that the Attendant Amendment was preempted by the National Labor Relations Act (“NLRA”). The district court granted the motions of the Illinois Department of Labor and Unite Here to dismiss the case. Congress Hotel appeals.

In their opinion, Judges Manion, Kanne and Tinder reversed and remanded. The Court noted that preemption can be either express or implied. Since the NLRA contains no express preemption provision, the question is whether the state statute conflicts with federal law or frustrates a federal scheme, or whether Congress intended to occupy the field. The Court identified two different NLRA preemption doctrines from Supreme Court cases. The Court stated that Congress, in approaching collective bargaining and unions, took a multi-pronged approach. It prohibited some conduct; it protected some conduct; and it specifically left some conduct to the forces of the free market. Garmon preemption seeks to prevent conflict between local regulation and the NLRA’s scheme of regulation. In contrast, Machinists preemption seeks to prevent local regulation of conduct that Congress intended not to be regulated. The Court first addressed Machinists preemption. Three propositions have been established by the Supreme Court in its post-Machinists cases of Metropolitan Life and Fort Halifax: a) the NLRA is more concerned with an equitable bargaining process than its substantive terms, b) the NLRA does not preempt a state law that regulates a mandatory subject of bargaining, and c) the NLRA does not preempt a state law that establishes a minimum labor standard that does not intrude upon the bargaining process. The Court went on to address the defendants’ argument that the Attendant Amendment is simply a minimum labor standard. The Court decided that it is not because: a) it is not a statute of general application (it applied to only one job in one industry in one county), b) it did not provide a low-threshold (i.e., minimum) standard but rather established a term of employment that would be hard to bargain for, and c) it included provisions creating a cause of action, shifting the burden of proof and creating a presumption of retaliation that interfered with and overrode the dispute resolution mechanisms already in place. Since the Court thus found the statute preempted by the Machinists doctrine, it did not reach the Garmon doctrine or consider the Congress Hotel’s equal protection or due process arguments.

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SCOTT AIR FORCE BASE PROPERTIES, LLC v. COUNTY OF ST. CLAIR (November 14, 2008)

Scott Air Force Base Properties, LLC (“Scott”) entered into a 50-year lease with the United States for property located on Scott Air Force Base. The lease was entered into pursuant to the Military Housing Privatization Initiative (“MHPI”), under which private companies can lease military land for the purposes of constructing, maintaining, and operating rental housing for military personnel. The County of St. Clair, in which the property is located, added the leaseholds to its tax rolls and assessed an ad valorem tax on each parcel. Scott filed a suit for a declaratory judgment that the leasehold interest and all transactions under the MHPI were exempt from state taxation. Scott asserted that the assessment violated the U.S. Constitution, federal law, and state law. The district court dismissed for lack of subject matter jurisdiction because of the Tax Injunction Act (“TIA”). Scott appeals.

In their opinion, Judges Ripple, Manion, and Sykes affirmed. The Court stated that the TIA bars federal jurisdiction of any suit in which the relief sought would reduce state tax revenue. It prevents both injunctive and declaratory relief. It applies even where the basis of the relief sought is a constitutional claim. The bar is expressly conditioned, added the Court, on the availability of a “plain, speedy, and efficient remedy” in state court. Scott has the burden of demonstrating the failure of the state remedy under the TIA test. Here, the Court found that Scott was clearly seeking to avoid paying state taxes. The TIA applied unless an adequate remedy was not available to Scott in the Illinois courts. Scott only challenged the “efficiency” of the Illinois remedy. Scott asserts that the Illinois remedy does not meet the TIA test because it requires that Scott pursue both an exemption application and a valuation protest. The Court rejected the argument, while conceding that a more efficient procedure might exist than the one provided by Illinois. The TIA does not require the most efficient remedy. The Court also noted that Scott will be able to raise its constitutional and federal statutory challenges to the tax in state court. Given a remedy in state court that meets the TIA test, the Court agreed that it lacked subject matter jurisdiction.

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BUSINESS SYSTEMS ENGINEERING, INC. v INTERNATIONAL BUSINESS MACHINES CORP. (November 10, 2008)

International Business Machines Corp. (“IBM”) contracted with the Chicago Transit Authority (“CTA”) to install a new computer system. The CTA conditioned IBM’s contract on IBM’s use of “disadvantaged business enterprises” as subcontractors to complete at least 30% of the dollar value of the contract. IBM entered into an agreement with Business Systems Engineering, Inc. (“BSE”) under which BSE would be one of those subcontractors. IBM and BSE first entered into a contract with standard terms and conditions that would generally govern their relationship. The contract described the procedures whereby IBM would identify tasks to be done and authorize BSE to perform those tasks. It specifically limited IBM’s obligation to authorized projects. IBM also was required to submit a schedule to the CTA that described BSE’s involvement in the project. IBM's final schedule listed BSE as being “prepared to provide” $3,624,550 in services. It also stated that IBM and BSE would enter into a formal contract for the work. During the course of the project, IBM “advertised” its needs to one or more of the approved subcontractors. When a subcontractor presented a suitable candidate to perform the work, IBM followed the procedure set forth in the standard terms and conditions by presenting a statement of work and work authorization. These documents described the task and the effort required, described the condition under which the project would be considered completed, and authorized payment for the task. IBM authorized statements of work for BSE totaling approximately $2.2 million. BSE filed suit alleging that IBM breached its contract with BSE by not paying the full $3.6 million listed in the final schedule. The district court dismissed on the ground that the schedule was not binding, but merely a document describing the parties’ anticipated future contracts. BSE amended its complaint by alleging that other documents, in addition to the contract and schedule, “evidence[d] the written agreement.” The court denied IBM’s renewed motion to dismiss but later granted summary judgment to IBM. It found no written contract for $3.6 million, holding that the collection of documents submitted by BSE were too vague and incomplete to establish a binding contract. The court also rejected BSE’s oral contract argument. BSE appeals.

In their opinion, Judges Manion, Wood, and Tinder affirmed. The Court found that the original contract, in conjunction with the work authorizations and purchase orders it contemplated, was the only contractual relationship between the parties. That agreement was clear that IBM was only responsible for services provided in response to statements of work specifically authorized by IBM. The Court rejected BSE’s oral agreement theory as well. The Court noted that the only term of the oral contract alleged by BSE is the $3.6 million price term. For a contract to be enforceable, a court must be able to look at agreed-upon terms to determine the obligations of the parties. The Court found the description of the services to be provided for the $3.6 million in the schedule and proffered e-mail too vague and generic to form the basis of an enforceable agreement.  

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MAHER v. CITY OF CHICAGO (October 31, 2008)

Jerome Maher, a Naval Reservist, went to work for the City of Chicago in 1990. Although he alleges that he was promised an “assistant commissioner” position, his initial position involved managing accounts receivable and developing a computer system in the Aviation Department. In February of 1991, Maher was called to active duty. He alleges that his supervisor was displeased. Upon Maher’s return in September of the same year, he was named “Director of Revenue” at an increased salary. He alleges that his supervisor continued to criticize and threaten his employment because of his military obligations. He also was forced to report to a former subordinate. Maher filed, but later withdrew, a formal complaint with the Department of Labor. He alleged that he had been denied advancement and subjected to humiliation because of his military service. After an internal reorganization in 1993, Maher was named “Manager of Finance.” He received another salary increase and a larger staff. Maher alleged that his office was unusable for a week and that other supervisors harassed and were critical of him and his service. The Navy again called Maher to active duty from August 1996 to May of 1997. The City initially refused to assign Maher to his former duties upon his return. Following complaints and meetings, Maher was given his former responsibilities in July of 1997, although two former staff members were reassigned to work for his supervisor. In January, 1998, the City transferred Maher to its Landside Operations, a division of the Aviation Department that handles ground transportation at the city’s airports. In this position, Maher developed a high-speed rail system and an intermodal facility, operated the parking facilities, and supervised snow removal. Maher sued the City in 2003. He alleged that he suffered adverse employment consequences as a result of his military service on three separate occasions: a) when the City did not give him an assistant commissioner title in 1991, b) when the City named him Manager of Finance in 1993 but again did not give him an assistant commissioner title, and c) when the City transferred him to the Landside Division in 1998. He alleged a violation of the Uniformed Services Employment and Reemployment Rights Act (“USERRA”). The magistrate judge granted summary judgment to the City on the 1991 and 1993 claims, concluding that Maher produced no evidence that he was hired as an assistant commissioner and produced insufficient evidence that the City’s actions were motivated solely by his military commitment. The magistrate also ruled that laches barred the 1991 action. Maher’s 1998 claim went to trial. The magistrate ruled that evidence of the 1991 and 1993 claims could not be presented at that trial. After one hung jury, a second jury found for the City. Maher appeals: a) the summary judgment on the 1991 claim, b) the exclusion of evidence of the 1991 and 1993 claim from the jury, and c) the jury verdict on the 1998 claim.

In their opinion, Judges Manion, Wood, and Williams affirmed. On the 1991 claim, the Court noted that Maher challenged only the magistrate’s laches ruling. He did not challenge the magistrate’s alternative holding that there were no genuine issues of material fact and the City was entitled to judgment as a matter of law. When a lower court provides more than one independent ground for a holding, the appellant’s failure to challenge one of them is a waiver of any claim of error with respect to the entire holding. Notwithstanding the Court’s finding of a waiver, it did also address the laches argument on the merits. The Court agreed with the magistrate. Laches requires an unreasonable lack of diligence and prejudice. Maher points to both his Department of Labor complaint and his internal complaints as evidence of his due diligence. The Court noted that the Department of Labor complaint was withdrawn eleven years before the suit was filed. One informal complaint was made five years into that eleven year period. The Court found that the two complaints did not amount to reasonable diligence. The Court also found prejudice to the City. The person who hired Maher testified that he had very little recollection of the circumstances of Maher's hiring.

The Court next addressed the magistrate’s exclusion of the evidence of the 1991 and 1993 incidents at the second trial of the 1998 incident. The Court found that the magistrate did not abuse his discretion. Neither incident was relevant to any alleged adverse employment action in 1998 and both took place before the 1998 decision-maker was in charge.

Finally, Maher challenged the sufficiency of the evidence at the 1998 trial. The Court concluded that Maher’s challenge was procedurally defective. Maher did not file either a FRCP 50(a) or 50(b) motion, both of which are required before challenging the sufficiency of the evidence on appeal. Maher conceded as much at oral argument. Nevertheless, the Court proceeded to analyze his argument under the “heavy burden” of a sufficiency of the evidence challenge. Under the USERRA, Maher must establish that he suffered an adverse employment action motivated at least in part by his military service. The Court found against Maher on both points. Maher relied on the facts that he lacked a staff, was not using his CPA qualifications, had a supervisor with less college education, and was responsible for snow removal. The Court held that none of these establish the existence of an adverse employment action. In his new position, he was responsible for large-scale projects involving hundreds of millions of dollars and handled millions of dollars of billing. An adverse employment action must be more disruptive than just a change in responsibilities. Maher also did not establish that a reasonable juror must have found that hostility toward his service was the reason for his transfer. Maher relied on the promotions of others ahead of him, but the person who transferred Maher to Landside was not the same person who promoted the others. When different decision –makers are involved, said the Court, one should not conclude that the difference in their actions was the result of discrimination. The jury had the opportunity to make the inferences that Maher argued – but it didn’t. They were not required to on the record in the case.

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BURRUS V. STATE LOTTERY COMMISSION  (October 6, 2008)

Indiana created the State Lottery Commission of Indiana (the “Commission”) in 1989 to operate lottery games in the state. The legislature set it up to operate as a “separate body politic and corporate” from the rest of state government. The legislature authorized up to $18 million in start up costs. The Commission only used $6 million and repaid that within the year. The lottery has been quite successful. It has generated over $3 billion in profits since its inception. The governor appoints the director and five commissioners who operate the lottery. The Commission has the authority to sue and be sued. It operates independently of the state, although it is heavily regulated by the state.  The Commission deposits all of its revenue into a fund separate from the state’s general revenue fund. The funds are first used to pay for the prizes and operating costs. Each quarter, the remaining funds are disbursed to the credit of the state teachers’ retirement fund ($7.5 million) and the pension relief fund ($7.5 million). Any quarterly surplus is transferred to a fund which is used to support local and state capital projects.

Between January and May of 2005, seven employees of the Commission were fired. They all sued the Commission under 42 U.S.C. § 1981 and Title VII of the Civil Rights Act of 1964. Each alleged that he or she was fired as a result of his or her race. The Commission moved to dismiss the § 1981 claims on the grounds of sovereign immunity. The district court denied the motion. The Commission appeals.

In their opinion, Judges Bauer, Ripple, and Manion affirmed. The appeal raised only one issue – whether the Eleventh Amendment shields the Commission from the §1981 claims. The Court began with the basic proposition that unconsenting states, and their agencies, are immune from federal lawsuits under the Eleventh Amendment. Here, the parties simply disagreed over whether the Commission is a state agency. The Court listed the two factors that generally determine that issue. The first, and most important, is the degree of financial autonomy from the state. The other factor is the general legal status of the entity. The Court observed that the Commission’s complete lack of financial reliance on the state and the total lack of responsibility by the state for any of the Commission’s obligations strongly weighed against finding the Commission to be an agency of the state. While it is true that a judgment against the Commission would deprive the state of revenues it otherwise would have received but for the judgment, the panel noted that the Supreme Court had rejected that “state-benefit” theory of financial dependence.

The second prong of the test, general legal status, also supports the Court’s conclusion that the Commission is not an agency of the state. The Court pointed to a number of factors to support its conclusion: a) it sets its own budget, b) it controls its day-to-day operations, c) it sues in its own name, and d) it enters into contracts in its own name. The fact that the governor appoints the commissioners was given little weight by the Court given the Commission’s financial independence. Finally, the Court noted that the fact that the lottery is the subject of much state regulation does not change the result that the Commission is not an agency of the state and not immune from suit.

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