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

POWERS v. USF HOLLAND, INC. (December 15, 2011)

USF Holland is a large regional trucking company. Drivers at its South Bend, Indiana, terminal are classified as either city or road drivers. City drivers have local routes and frequently assist in dock work, i.e., loading and unloading. Road drivers, on the other hand, drive much longer distances and engage in much less dock work. Keith Powers was a Holland road driver in 2004 when his wife became pregnant. He asked Holland to switch him to city driver status in order to be home more often. Holland granted the request. Within a month, Powers regretted the move. He started experiencing discomfort and lack of mobility as a result of the additional dock work he was required to do is a city driver. Holland rejected his request to return to his prior assignment, citing a restriction in the collective bargaining agreement. Powers' condition worsened and he went on unpaid medical leave in August 2004. In December 2005, he asked to return to work. His physician imposed medical restrictions, including "limited hours of dock work" and "road driver work only." Two Holland supervisors told Powers that he could not return to work until he could work without restrictions. A Human Resources manager told Powers said that she needed clarification regarding the restrictions and also asked him to have his physician fill out a "Request for Accommodation" form. Powers never completed the form. Instead, he brought suit against Holland under the Americans with Disabilities Act. He alleged that Holland violated the ADA by enforcing a "100% healed policy" and thatt Holland discriminated against him and retaliated against him. Judge Van Bokkelen (N.D. Ind.) granted summary judgment to Holland. Powers appeals.

In their opinion, Seventh Circuit Judges Cudahy, Posner, and Manion affirmed. The Court noted that, although Powers brought several distinct claims, each claim required proof that Powers was disabled under the ADA. To be ADA-disabled, a person must have an impairment that "substantially limits one or more of the major life activities," or must have a record of such an impairment, or must be regarded as having such an impairment. The only major life activity at issue in the appeal was working. Powers made claims under both the “having an impairment” and “regarded as having an impairment” prongs. The Court first addressed whether Powers had an impairment. In order to meet that condition, Powers had to show that he was significantly restricted in his ability to work compared to others. The Court concluded that the evidence did not support that conclusion. Powers line of work is truck driving. The only restrictions noted by his physician related to the dock work associated with the truck driving. In fact, Powers testified that he was physically capable of driving. The fact that he is unable to perform a job where the driving is accompanied by significant dock work does not make him significantly restricted in truck driving. The Court turned to the "regarded as" prong. Under that prong, a person can be ADA-disabled if his employer believes that he has a substantial impairment in a major life activity. The Court found no such evidence in the record. In so concluding, the Court rejected Powers' contention that the company's "100% healed policy" supported that position. That policy does not violate the ADA (at least the pre-2008 ADA that applies in this case) unless the person is actually disabled.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

ABUELYAMAN v. ILLINOIS STATE UNIVERSITY (December 13, 2011)

Illinois State University classifies its professors in two ways. First, a professor is ranked either as an assistant professor, an associate professor, or a full professor. The University's expectations of a professor depend on his or her ranking. Professors are also classified as tenured, probationary tenure-track, or nontenure-track. The University conducts fairly rigorous annual evaluations to assess its faculty members’ performance. The University hired Eltayeb Abuelyaman, an Arab Muslim, as a probationary tenure-track associate professor in 2001. The University's evaluation committee gave Abuelyaman low performance scores for several years and elected not to reappoint him in March 2006. Abuelyaman filed a complaint with the EEOC alleging race, religion, and national origin discrimination. He cited several bases for his allegation. First, he complained several times to Dr. Dennis that Dennis' decision to give greater weight to student evaluations disadvantaged foreign born professors. Second, Abuelyaman supported another professor’s complaint that the professor had been discriminated against with respect to his non-renewal. Third, Abuelyaman was involved in the investigation of another professor’s complaint that Dr. Dennis improperly used his authority on a Search Committee to steer the committee to a candidate that Dennis preferred. Abuelyaman filed suit pursuant to Title VII for 1) discrimination, 2) retaliation for backing his fellow professor’s discrimination claims, and 3) retaliation for participating in the Dr. Dennis complaint. Judge Mihm (C.D. Ill.) granted summary judgment to the University on the discrimination claim and the first retaliation claim. He granted a motion for judgment as a matter of law at the close of plaintiff’s case on the second retaliation claim. Abuelyaman appeals.

In their opinion, Seventh Circuit Judges Ripple, Manion, and Sykes affirmed. The Court first addressed and rejected the University's argument that the district court abused its discretion in granting Abuelyaman an extension of time to file the notice of appeal. Abuelyaman’s attorney attempted to file the notice of appeal electronically before the filing deadline and thought she had done so. When she realized, six days later, that her filing had not been successful, she promptly filed a motion for an extension. The district court did not abuse its discretion in finding excusable neglect under Rule 4(a)(5). On the merits, Abuelyaman proceeded under the direct method of proof. His principle argument was that he was treated differently from other, similarly situated faculty members. The Court agreed with the district court that Abuelyaman fell far short of meeting his burden. First, his comparisons to tenured faculty members did not meet the "similarly situated" test. Second, the Court found that the University’s treatment of underperforming non-tenured faculty members was very similar to their treatment of Abuelyaman. With respect to his retaliation claims, Abuelyaman had to show that he was engaged in protected activity and that there was a causal relationship between the activity and his non-renewal. His first claim, that the University retaliated against him for his complaints about discrimination directed at a fellow faculty member, fails both because he did not raise it in time in the district court and because there is no evidence in the record that the decision-makers knew of his involvement in that matter when they decided not to renew his contract. The second claim, that the University retaliated against him for his involvement in the Dennis investigation, fails because Abuelyaman was not engaged in protected activity. The Dennis investigation did not involve any allegations of discriminatory conduct. Abuelyaman’s involvement was therefore not protected under Title VII.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

HARRIS v. QUINN (September 1, 2011)

The Illinois Department of Human Services runs two programs that provide in-home care to Illinois residents. One is operated by the Division of Rehabilitation Services and the other is operated by the Division of Developmental Disabilities. In both programs, eligible individuals work with program counselors to develop individual service plans. In the Rehabilitation Program, once a service plan is in place, the eligible individual may select any qualified personal assistant to implement the plan. The individual and the assistant enter into employment agreement, the terms of which are dictated by the Department. In 2003, after the Illinois legislature passed a law designating the personal assistants as state employees for collective bargaining purposes, a majority of the Rehabilitation Program personal assistants voted to unionize. A majority of the Disability Program personal assistants rejected unionization. The collective bargaining agreement between the Rehabilitation Program Union and the State contains a "fair share" provision that requires personal assistants who are not members of the union to pay a proportionate share of the collective bargaining costs. In 2010, personal assistants from both programs filed suit against the Governor and the unions. They alleged that the fair share fees violated the First Amendment. The Disability Program personal assistants alleged that they were harmed by the threat of a future agreement. Judge Johnson-Coleman (N.D. Ill.) dismissed the Rehabilitation Program claim for failure to state a claim and dismissed the Disability Program claim on jurisdictional grounds. The personal assistants appeal.

In their opinion, Seventh Circuit Judges Manion, Wood, and Hamilton affirmed and remanded. The Court first addressed the Rehabilitation Program plaintiffs. It remarked that there is a long line of Supreme Court cases approving fair share agreements. The Court rejected plaintiffs' contention that the Supreme Court cases were not controlling because the personal assistants are employees of the patients, not the state. The Court relied on the ordinary definition of employer -- one who directs the activities of a worker under a contract and pays his wages -- as well as the concept that an employee can have more than one employer. The Court gave the legislative designation no weight but, instead, looked at the State's relationship to the personal assistants. It concluded that the state has significant control -- it sets qualifications, defines job responsibilities through the service plan, and pays the wages, among other things. The Court concluded that this significant amount of control made the State an employer. It also rejected plaintiffs' argument that the Supreme Court cases should not apply because of their unique circumstances. The Court turned to the Disabilities Program personal assistants’ claim. It agreed with the district court that that claim was not ripe in that it rested on future events that may or may not occur. The Court did conclude that the district court erred in dismissing the Disability Program claim with prejudice. A claim dismissed on ripeness grounds is typically dismissed without prejudice. The Court remanded for the proper dismissal.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

TENNY v. BLAGOJEVICH (August 25, 2011)

An Illinois statute regulates prison commissaries’ sale of goods to inmates. Except for tobacco products, it prohibits any markup over cost in excess of 25%. A 2006 Illinois Inspector General audit concluded that the Illinois Department of Corrections was violating the statute and recommended corrective action. The Department rejected the recommendations and maintained its pricing. Several inmates at the Stateville Correctional Center in Joliet filed grievances. The grievances were denied. The inmates filed two separate lawsuits in federal district court pursuant to § 1983, alleging violations of their Fourteenth Amendment procedural due process rights and violations of the Illinois Constitution. Judges Norgle and Pallmeyer (N.D. Ill.) dismissed the complaints for failure to state a claim. Plaintiffs appeal.

In their opinion, Seventh Circuit Judges Manion, Wood, and Hamilton affirmed and remanded. A procedural due process claim requires that the plaintiff allege a protected property interest, or legitimate claim of entitlement, under state law. Here, the Court assumed, without deciding, that the Illinois statutory cap created such a property interest. Even if there is a property interest, the inmates are not entitled to pre-deprivation review if it would be ineffectual. The Court concluded that no "process" would have prevented the Department from imposing its allegedly unlawful pricing policy. In this situation, an adequate post-deprivation remedy may satisfy due process. The inmates have not even alleged the inadequacy of a post-deprivation remedy. In fact, the Court concluded that the prison grievance procedures, a possible Court of Claims claim, and the availability of a state court claim were adequate post-deprivation remedies. Because both district courts dismissed the complaints with prejudice but neither district court addressed the state constitutional claim, the Court remanded the cases for dismissals of the state claims without prejudice.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

CLEARY v. PHILIP MORRIS INC. (August 25, 2011)

A class-action complaint brought against Philip Morris in 1998, and later amended, sought disgorgement of profits under an unjust enrichment theory, alleging that Philip Morris concealed facts about the dangers of cigarettes in its marketing and advertising. The complaint alleged three classes: an "addiction" class consisting of Illinois residents who purchased cigarettes between 1953 in 1965, a "youth marketing" class consisting of Illinois residents who first purchased cigarettes as minors, and a "lights" class consisting of Illinois residents who purchased Marlboro Lights. The class plaintiffs withdrew the "lights" class allegations because of another similar pending case. That "lights" case was ultimately unsuccessful in Illinois state court but a 2008 United States Supreme Court case breathed new life into the theory. The class plaintiffs therefore amended their complaint again, reinserting a "lights" class claim. The amended complaint added as defendants other companies who manufactured light cigarettes, including Lorillard Tobacco Company, and also added allegations regarding other brands of light cigarettes manufactured by Philip Morris. Lorillard removed the case to federal court under the Class Action Fairness Act. The district court rejected plaintiffs request to remand on the grounds that the new "lights" claim did not relate back to the original complaint, then dismissed Lorillard on statute of limitations grounds, and then again rejected a request to remand on the ground that Lorillard, the reason for the removal, was no longer a defendant. Later, the district court dismissed as time-barred all claims against the other non-Philip Morris defendants and limited the claims against Phillip Morris to the original Marlboro Lights claims. Ultimately, Judge Kennelly (N.D. Ill.) dismissed the unjust enrichment claims as a matter of law. The class appeals.

In their opinion, Seventh Circuit Judges Cudahy, Manion, and Hamilton affirmed. Before turning to the merits of the unjust enrichment claim, the Court briefly addressed the district court's refusal to remand after the Lorillard dismissal and its limitation of the "lights" claim to Marlboro Lights. With respect to the former, the Court stated that jurisdiction under CAFA is determined at the time of removal. Therefore, Lorillard's dismissal after removal did not affect the court's jurisdiction. With respect to the latter, the Court noted that an amendment relates back to an earlier complaint only when it arises out of the same occurrence. Here, the expansion of the allegations to include other Phillip Morris light cigarette brands would add additional class members and encompass numerous additional transactions. The additional allegations, therefore, do not arise out of the same occurrence and do not relate back. Turning to the unjust enrichment allegations, the Court recognized some tension in Illinois law as to whether unjust enrichment is an independent cause of action or must be tied to a separate claim. It ultimately decided that it did not have to resolve the tension, given its conclusion that the class allegations did not state a cause of action. An unjust enrichment claim must allege defendant's unjust retention of a benefit to the plaintiffs detriment and that the retention was unjust. The only detriment plaintiffs allege, however, is a violation of their right to be informed of the actual dangers and risks inherent in cigarettes. Under plaintiffs' theory, the class would include consumers for whom that alleged violation was not a detriment -- the consumers who would have acted no differently had they known the truth. Without any allegations of harm or that they would have acted differently, the class allegations cannot support a claim of unjust enrichment.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

CARTER v. PENSION PLAN OF A. FINKL & SONS COMPANY FOR ELIGIBLE OFFICE EMPLOYEES (August 15, 2011)

A. Finkl & Sons is a large, Chicago-based steel company. Until 2006, it offered its employees a defined benefit pension plan. It was then that it decided to terminate the Plan. Because the plan was an ERISA-qualified plan, the termination process was rather complicated and involved many steps. Finkl began the involved process, after receiving permission to do so from the Pension Benefit Guarantee Corporation. The Plan notified the employees of the termination and adopted Amendment 1, which provided that all Plan participants, even current employees, could elect to receive their pension benefits as an immediate annuity upon Plan termination. The Plan even distributed election forms for employees to indicate whether they wanted an immediate annuity or wait for retirement. Ultimately, Finkl decided not to terminate the Plan. It advised its employees and the PBGC of that decision. The PBGC approved the company's actions and the Plan adopted Amendment 2, which deleted Amendment 1. A group of employees demanded that the Plan go ahead with the termination and distribution and also demanded that the Plan revise the way benefits were calculated as it related to bonuses. The plaintiffs claimed that they were unaware of the distinction between regular bonuses (which were credited to an employee’s retirement calculation) and special bonuses (which were not credited to an employee’s retirement calculation). The Plan denied both claims and plaintiffs filed suit under ERISA. Judge Pallmeyer (N.D. Ill.) granted summary judgment to the Plan. She concluded that Amendment 2 violated neither ERISA’s anti-cutback provision or the Plan’s anti-cutback clause. She also concluded that plaintiffs could not prevail on their benefit recalculation argument. Plaintiffs appeal.

In their opinion, Seventh Circuit Judges Manion, Wood, and Williams affirmed. The Court agreed with plaintiffs that ERISA prohibits a plan from decreasing beneficiaries' protected benefits. Likewise, a Plan can include a clause that protects beneficiaries' benefits. It is these "anti-cutback" provisions the plaintiffs claim were violated in this case. The Court first addressed the statutory claim. The ERISA anti-cutback clause applies only to benefits tied to a participant’s actual retirement. The Amendment 1 benefit is not tied to retirement and is therefore not protected. The Court turned to the Plan language. That language protects "pension benefits already accrued." When the Plan denied plaintiffs' claim, it concluded that Amendment 1 conferred a protected benefit only upon the Plan's termination and thus was not subject to the anti-cutback clause. The Court concluded that the Plan’s interpretation was reasonable. It also rejected plaintiffs' argument that the benefit was protected because the plan had, in fact, terminated. The Court reiterated the number of required steps in the approval process before statutory termination. The record does not support plaintiffs' conclusion. With respect to the second claim, regarding the inclusion of bonuses in the benefit calculation, the Court concluded that there was no evidence in the record creating a material issue of fact. Even if plaintiffs were unaware of the distinction used by the company, summary judgment was still appropriate.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

UNION PACIFIC RAILROAD CO. v. CHICAGO TRANSIT AUTHORITY (July 25, 2011)

The Union Pacific Railroad Company owns a 2.8 mile right-of-way running between Chicago and Oak Park, Illinois. UP itself operates three railroad tracks on the right-of-way. Since the early 1960s, UP has leased approximately 40% of the right-of-way to the Chicago Transit Authority. The CTA runs two railroad tracks parallel to UP’s. A written lease has defined the rights and obligations of UP and CTA over the years. For example, CTA must maintain its tracks in good condition, is limited to providing passenger transportation, and must reimburse UP 40% of any joint maintenance expenses. UP, on the other hand, maintains the right-of-way and all joint facilities and has agreed to use non-standard inspection and maintenance procedures because of the proximity of the lines to each other. The CTA pays monthly rent to UP, recalculated every 10 years under a formula contained in the lease. The monthly rent increased from approximately $25,000 to approximately $90,000 when it was recalculated for the 2002-2012 lease period. The parties discussed a one-time permanent easement fee instead of a monthly rent but did not reach an agreement. In 2006, CTA issued an ultimatum. It offered approximately $7.5 million for a perpetual easement or, if that was not acceptable, it would condemn the property. UP declined and, making good on its threat, the CTA instituted condemnation proceedings. UP brought suit for an injunction, maintaining that the Interstate Commerce Commission Termination Act preempted the condemnation. Judge Dow (N.D. Ill.) granted summary judgment to UP, concluding that the condemnation was both categorically preempted and preempted "as applied." The CTA appeals.

In their opinion, Seventh Circuit Judges Flaum, Manion, and Evans affirmed. The Court addressed the underlying legal principles. Under the Supremacy Clause, federal law preempts state law that interferes with it. Congress enacted the Interstate Commerce Commission Termination Act in 1995, which gave the Surface Transportation Board exclusive jurisdiction over railroad transportation regulation. "Transportation" includes a railroad's property, facilities, and equipment that are related to the movement of passengers or property. The Court found it clear that UP and the right-of-way were covered by the statute. In addressing whether the condemnation was preempted by the statute, the Court discussed the Board's two approaches to preemption. Some state action is preempted on its face, notwithstanding its rationale. That is referred to as categorical preemption. Other state action may be preempted depending on the degree of interference with railroad operations, which is referred to as "as applied" preemption. The district court adopted the Board's approaches and found the condemnation preempted under both approaches. The Court, on the other hand, concluded that the categorical preemption approach should be used only when looking at a rule of general applicability. A condemnation is not such a rule. By definition, it relates to a specific parcel of property and each instance has a different factual setting. The Court found support for its conclusion in the Board's cases. Applying the "as applied" analysis, the Court agreed with the district court. The CTA argued that is already using the right-of-way and its condemnation is defined as being coextensive with the lease. Therefore, it argues, the condemnation can not be considered an interference at all. In fact, it is nothing more than maintaining the status quo. The Court found the CTA's logic flawed. First, the CTA’s use of the property significantly interferes with UP transportation. The fact that UP agreed to that interference, in return for significant monthly rent, does not change the nature of interference. Preemption only comes into play when the interference is forced by regulation, not when it is agreed to by contract. Second, the Court disagreed with the CTA’s assertion that the condemnation is coextensive with the lease. For example, the lease has a termination clause. If the CTA stops using the tracks for passenger transportation or otherwise fails to live up to its obligations under the lease, the lease terminates. There would be no such provision after a condemnation.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

WACKETT v. CITY OF BEAVER DAM (June 13, 2011)

Daniel Wackett worked for the Department of Public Works in Beaver Dam, Wisconsin from 1972 until his retirement in 2009. In 2003, he was responsible for evaluating three bids for a front-end loader needed by the City. At a Board of Public Works meeting, he and his supervisor, the Director of Public Works, both recommended the John Deere front-end loader. The Board voted to recommend to the City Council the more expensive Caterpillar front-end loader. Wackett spoke out against the decision. He even claimed that the Board was improperly influenced. He persuaded a local businessman to write a letter criticizing the recommendation. The local newspaper printed the letter. After numerous citizen complaints, the Board changed its recommendation and the City purchased the John Deere front-end loader. After that incident, the Board refused to promote Wackett. Twice, they appointed someone else Director. From 2004 to 2009, Smith actually served as Acting Director but the Board refused to appoint him to the position. Wackett brought suit pursuant to § 1983. He alleged that the City and Board retaliated against him on account of his speech. Judge Griesbach (E.D. Wis.) granted summary judgment to the defendants. Wackett appeals

In their opinion, Chief Judge Easterbrook and Judges Manion and Williams affirmed. There are three prongs to a First Amendment retaliation claim: a) constitutionally protected speech, b) but-for causation, and c) a deprivation. With respect to the first prong, the Supreme Court in Garcetti held that a public employee's statements in his official capacity are not protected speech. Here, most of Wackett's speech was made in his official capacity and is not protected. To the extent he engaged in protected speech in conversations with the businessman and other citizens, he presented no evidence that the defendants were aware of that speech. With respect to that speech, therefore, he cannot establish causation.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

MERRYMAN EXCAVATION v. INTERNATIONAL UNION OF OPERATING ENGINEERS (March 21, 2011)

Merryman Excavation and Local 150 of the International Union of Operating Engineers entered into a Memorandum of Agreement in 2000. The agreement basically adopted the terms of Local 150's Collective Bargaining Agreement. In addition to setting wages and describing working conditions, the agreement provided that all disputes were to be resolved by an informal process. The final phase of this process was a hearing before the joint grievance committee. The committee is comprised of an equal number of employer and union members. A majority decision of the committee on a dispute is final and non-appealable. On two different occasions in 2006, a joint committee heard a total of 13 grievances initiated against Merryman. Some of the grievances were settled, some resulted in a committee deadlock, and some were resolved in the union's favor. In total, Merryman was ordered to pay almost $100,000. At the two hearings, Merryman objected to the committee's jurisdiction, objected to proceeding with only two voting members on each side, objected to proceeding before an attempt to settle, and objected to "unbiased" committee members on the union side. Merryman brought suit pursuant to § 301 of the Labor Management Relations Act. The complaint alleged violations of the agreement and sought to set aside the awards. Local 150 counterclaimed for enforcement of the awards. Judge Kendall (N.D. Ill.) granted summary judgment to Local 150. Merryman appeals.

In their opinion, Chief Judge Easterbrook and Judges Manion and Hamilton affirmed. The Court first identified some confusion in the briefing and even in its own jurisprudence. It pointed out that the joint committee proceeding is not an arbitration subject to the Federal Arbitration Act and its impartiality requirements. Rather, it is a creature of contract -- a failure to honor a valid award is simply a breach of contract. The Court categorized Merryman's arguments into three categories: procedural errors, orders to pay the union assistance fund instead of union members, and bias. The Court quickly disposed of the alleged procedural errors. First, most of the alleged "errors" were contract disputes and the joint committee had the absolute authority to resolve them without appeal. Second, with respect to the composition of the committee and whether a quorum was required, the Court concluded that Merryman received all the procedures to which it was entitled under the agreement. With respect to the awards to the assistance fund, the Court also concluded that the issue involved construction of the agreement and was within the joint committee's authority to resolve without appeal. Finally, with respect to bias, the Court conceded that bias is one of the few grounds to attack the decision of a supposedly unbiased arbitrator or panel. But the agreement here does not require a neutral committee members. Instead, it strives to achieve achieves fairness by requiring an equal number of voting members from each camp. There is no evidence that that requirement was not met in this case. Whether any particular voting individual lacked impartiality is irrelevant.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

O’ROURKE v. PALISADES ACQUISITION XVI (March 17, 2011)

Michael O'Rourke accumulated several thousand dollars of debt on his credit card but never paid it. In fact, he assumed the statute of limitations barred any payment obligations. So, when lawyers for Palisades Acquisition XVI, the debt's owner, sent him a collection notice, he ignored it. Palisades filed suit in state court and attached an exhibit that appeared to be, but was not, a credit card bill issued by Palisades to O'Rourke. Palisades eventually dismissed the state court case. O'Rourke brought suit against Palisades in federal court, alleging that the exhibit violated the Fair Debt Collection Practices Act. His theory was that Palisades included the exhibit in order to mislead the state court judge into thinking that it was an accurate statement of the actual debt. Judge Norgle (N.D. Ill.) granted summary judgment to Palisades. O’Rourke appeals.

In their opinion, Judges Flaum, Manion, and Tinder (concurring in the result) affirmed. The Court stated that the Act prohibits both the false representation of a debt's "character, amount, or legal status" and the use of deceptive means to collect a debt. On its face, the Act does not say whether it includes statements made to a state court judge. The Court concluded that it did not. The Act is intended to protect consumers. Courts have extended its protection to third parties only when there is a special relationship (e.g., attorney, executrix) with a consumer. The Court held that the Act only applies to statements directed to consumers, and those with a special relationship to a consumer. Since a state court judge is an impartial decision-maker, the exhibit is not a covered communication.

Judge Tinder concurred in the result but disagreed with the Court’s rationale. He noted that the language of the Act is quite expansive, that its goal is to reduce abusive debt collection practices, and that state judges are powerful participants in the debt collection process. Why, then, should a false and misleading court submission not be a violation of the Act? Judge Tinder did not answer that question because he did not believe it necessary or prudent. Even assuming that the Act applies to communications to judges, O'Rourke loses. Because the exhibit was not misleading on its face, O'Rourke was required to submit extrinsic evidence. Although he submitted an expert report, the trial court excluded it. Without any extrinsic evidence, O'Rourke is unable to establish a genuine issue of material fact and summary judgment for Palisades was proper.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

ACTIVE DISPOSAL v. DARIEN (March 14, 2011)

Many Illinois municipalities have exclusive contracts for waste removal. These contracts limit the choices that consumers of waste removal services have and prevent other waste removal providers from competing for their business. Groups of waste removal companies and businesses wanting more choices banded together and brought suit against these municipalities, alleging violations of federal antitrust laws. Judge Kennelly (N.D. Ill.) dismissed the suit, concluding that the municipalities' actions were protected by the state-action exception to federal antitrust law. The plaintiffs appeal.

In their opinion, Circuit Judges Manion and Williams and District Judge Clevert affirmed. The Court first had to determine the provenance of the municipalities' power to contract with waste haulers. In the Illinois statute governing municipalities’ powers, § 1 (titled "Contracts") grants the power to make contracts relating to the "disposition . . . of garbage." Section 5 (titled "Method Of Disposition") grants the power to dictate an exclusive method for the "disposition of garbage," and adds that items intended to be recycled are not garbage. Plaintiffs argued that the municipality's power to enter into exclusive waste hauling contracts arose from § 5 and that the recycling exclusion prevented an exclusive contract when the waste material included recyclables. The Court rejected that argument for several reasons: a) § 5 never mentions contracts, b) the term "exclusive" refers to disposal methods , not contracts, and c) the titles of the sections are inconsistent with plaintiffs' argument. The Court also rejected plaintiffs' argument that the recycling exclusion in § 5 limited the power granted in § 1. Applying standard rules of statutory construction, the Court concluded that plaintiffs' proposal would lead to confusion, create anomalies, and render certain statutory terms superfluous. Having decided that § 1 covered the municipalities' contracting power, the Court applied the state-action doctrine test. Under that test, the Court asks if the statute authorizes the conduct and whether the anti-competitive effects were foreseeable. Both questions must be answered affirmatively for the state-action exemption to apply. Here, the Court already answered the first question affirmatively -- § 1 authorizes the garbage collection contracts. The Court also answered the second question in the affirmative. The power to contract implies a power to exclusively contract. Garbage collection is a traditional municipal concern. When a legislature grants contract authority to a municipality, it is certainly foreseeable that a municipality will enter into an exclusive contract that will affect competition. The state-action doctrine therefore applies.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

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

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

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

• Email This
• Print
• Comments
• Trackbacks
• Share Link

LAWSON v. VERUCHI (January 28, 2011)

A June, 2007 confrontation inside a Target store in Rockford, Illinois spilled out into the parking lot and down the street where Kimberly Colvin was assaulted by an unknown man. She reported the matter the next day to Rockford police She described the man and provided the license plate number of the car he was driving. A follow-up investigation on the plate led Detective Veruchi to Jeffrey W. Lawson ("JW"). JW's mother told Smith that she would have JW call him. Veruchi also received a call from a courtroom bailiff, who knew JW and knew that he had had an altercation in the Target. Veruchi even received a call from JW who originally agreed to come to the station but later reconsidered and referred Veruchi to his lawyer. In the meantime, Veruchi arranged a photo array with the victim and another witness. Veruchi obtained what he thought was JW's photograph from the county jail system. What he got, however, was a picture of Jeffery A. Lawson ("JA"). What happened at the photo array is disputed. Veruchi claims that the victim and witness both identified JA's picture as the attacker. Both the victim and witness denied that they positively identified JA as the attacker. Nevertheless, Veruchi relied on his version of the facts in an affidavit for a warrant. JA was arrested on the warrant and held in custody for 34 days before his release. JA brought suit against Veruchi and the City of Rockford under § 1983, alleging that his arrest was without probable cause and that municipal liability attached because Rockford had no policy to prevent his arrest. Judge Kapala (N.D. Ill.) granted summary judgment to Veruchi and the City. JA appeals.

In their opinion, Judges Posner, Manion, and Hamilton reversed and remanded. In order to prevail on a claim of unconstitutional arrest, a plaintiff must establish the absence of probable cause. In most cases, the issuance of a warrant will shield an officer from liability even if the arrest is later determined to be without probable cause. But if the warrant is issued on an affidavit that contains statements that the affiant knows are false or made with reckless disregard for the truth, the warrant does not shield the officer. Here, JA presented sufficient evidence of just that situation. The district judge erred when he discounted the victim's testimony (that is a question for the jury) and found the plaintiffs theory incredible (it is not). Considering the evidence in the light most favorable to JA, a jury could find that Veruchi intentionally provided false information in order to obtain the warrant and that probable cause to arrest JA did not exist. Since the district court's ruling in favor of the City was based on its dismissal of the underlying claim against Veruchi, the Court also reversed that decision and remanded for further consideration.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

AMES v. HOME DEPOT (January 6, 2011)

Diane Ames had a five-year, incident free employment record with Home Depot when she asked her store manager for the company's assistance with her alcohol problem. She enrolled in the company's employee assistance program and was put on paid leave. She was told that she could return when she had a treatment plan, passed a drug and alcohol test, and obtained return authorization. She did so and returned to work within a month. The following month, however, she was arrested for driving under the influence. When Home Depot found out, it required her to schedule an alcohol treatment evaluation. The company gave her several extensions within which to schedule the evaluation. In the meantime, she sought scheduling accommodations from her manager so she could attend her Alcoholics Anonymous meetings, she provided her manager a treatment note from her physician, and she shared many of her other personal difficulties with her manager. During a regularly scheduled shift on December 23, an assistant manager suspected that she was under the influence of alcohol. She was immediately tested. When the company learned that she tested positive for alcohol, it decided to terminate her for substance abuse. Her manager scheduled a meeting with her on January 2 to notify her. She missed the meeting because she began drinking more and checked herself into a hospital on January 1. Home Depot mailed Ames a letter on January 10 informing her of the termination of her employment. Ames filed suit pursuant to the Family and Medical Leave Act and the Americans with Disabilities Act. Judge Coar (N.D. Ill.) granted summary judgment to Home Depot on those claims. Ames appeals.

In their opinion, Judges Manion, Tinder, and Hamilton affirmed. On her claim under the FMLA that Home Depot interfered with her leave rights, Ames was required to establish (among other things) that she was entitled to leave under the Act. An employee is entitled to live under the FMLA only if she is suffering from a "serious health condition," which is defined as an illness that involves inpatient care or continuing treatment. Substance abuse can qualify as a serious health condition but only if it meets the inpatient care or continuing treatment standard. The record contains no evidence of either. She did check into a hospital, but that was after her employment was terminated. Therefore, no reasonable juror could conclude that she had a serious health condition -- her FMLA interference claim fails. Ames also asserted an FMLA retaliation claim, pursuant to which she had to establish that she engaged in a protected activity, that she suffered an adverse job action, and that there was a causal connection between them. The Court addressed only the causal connection prong. Here, the record contains no evidence that Home Depot's decision to fire Ames was related to any alleged request for FMLA leave – her FMLA retaliation claim fails. Lastly, the Court rejected Ames' ADA claim. In order to prevail on that claim, she had to establish that she had a disability. Alcoholism can be a disability under the ADA but only if it "substantially limits" a major life activity. Ames offered no evidence that her alcoholism even adversely affected her life's activities. In fact, the only evidence on that score was her testimony that it did not affect her performance on the job. Her ADA claim fails.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

MYERS v. ILLINOIS CENTRAL RAILROAD CO. (December 15, 2010)

Timothy Myers joined the Illinois Central Railroad (now part of CN Southern) right after his high school graduation. He worked for the Railroad for over 30 years in a number of jobs. All of his jobs were physically demanding and dangerous. Over his career. Myers injured an ankle, both knees, an elbow, and his back. He had surgeries on his back (twice) and on his left elbow and his right knee. He brought suit against the Railroad under the Federal Employers' Liability Act (FELA). He alleged that his physical problems were caused by the Railroad's failure to provide a safe workplace. Myers listed four experts -- three treating physicians and an ergonomist. Chief Judge McCuskey (C.D. Ill.) struck all four experts and granted summary judgment to the Railroad. Myers appeals.

In their opinion, Seventh Circuit Judges Manion, Sykes, and Hamilton affirmed. FELA is not a strict liability scheme -- negligence and causation are both required. Sometimes, expert testimony is unnecessary because a layperson can understand the causal link between particular conduct and an injury. Here, however, Myers does not allege a specific injury. He alleges gradual deterioration. The Court stated that the general rule in such cases is that expert testimony on causation is required. That general rule applies here. Although Myers proffered four experts, none of them can satisfy this requirement. The ergonomist can testify about the dangerous conditions in a rail yard but cannot link those conditions to any specific injury. The treating physicians were prepared to offer an opinion that the working conditions were the cause of Myers' injuries. However, the Court concluded that those opinions were general medical opinions that were not the product of any particular acceptable methodology. Indeed, the treating physicians simply made causation assumptions. The district court did not err in striking the experts, nor in granting summary judgment. 

• Email This
• Print
• Comments
• Trackbacks
• Share Link

SHERMAN v. KOCH (October 15, 2010)

In 1969, the Illinois legislature authorized, but did not require, public school teachers to "observe a brief period of silence" to be used as "an opportunity for silent prayer or for silent reflection." The legislature added a section to the act in 2002 declaring a student's right to exercise religion freely and to be free from State pressure regarding the exercise or non-exercise of religion. In 2007, the legislature made the brief period of silence mandatory. Dawn Sherman, a public high school student, brought suit through her father under § 1983. She brought a facial challenge under both the First and Fourteenth Amendments. Judge Gettleman (N.D. Ill.) granted a preliminary injunction, certified a plaintiff class of state public school students, certified a defendant class of state public school districts, granted summary judgment to the plaintiff class, and permanently enjoined the statute’s implementation. He concluded that the statute violated the First Amendment in that it failed the first two prongs of the Lemon test (it had no secular purpose and its primary effect was to advance religion). He also concluded that the statute was unconstitutionally vague under the Fourteenth Amendment. The defendants appeal.

In their opinion, Judges Ripple, Manion, and Williams (dissenting) reversed. The Court briefly addressed and rejected the argument that Sherman lacked standing because she suffered no damage (since she was only subjected to silence). Sherman alleged that the practice violates the First Amendment. Her status as a student is enough for standing. On the merits, the Court applied the Lemon test. Under Lemon, a statute: a) must have a secular legislative purpose, b) must not primarily advance or inhibit religion, and c) must "not foster an excessive government entanglement with religion." The Court first concluded that the statute had a secular legislative purpose under the first Lemon prong. It relied on the plain meaning of the statute, its context, its legislative history, and the events leading to its passage. It concluded that each of those factors supported the articulated legislative purpose of providing a moment of silence at the beginning of a school day in order to calm the students. The record was very different from the record in Wallace, in which the Supreme Court held that Alabama's similar statute lacked any secular purpose. In fact, the Court found support for its view in the Wallace concurring opinions of Justices O'Connor and Powell. With respect to the second Lemon prong, the Court concluded that the statute's primary effect was not to advance or inhibit religion. The Court relied principally on the statute's language. The statute expressly provided that the brief period of silence could not be conducted as a religious exercise -- and thus did not advance religion. It also expressly provided that the moment of silence was an opportunity for prayer or silent reflection -- and thus did not inhibit religion. Since no one raised the third Lemon prong, the Court concluded that the statute met the test and did not violate the Establishment Clause. The Court briefly considered the facial Fourteenth Amendment vagueness challenge. The Due Process Clause does not require perfection and precision, particularly where criminal penalties are not at issue and particularly in a school setting. Although the statute does not provide any details regarding the moment of silence’s logistics, testimony in the record indicates that school districts are quite capable of providing that detail. The facial challenge fails.

Judge Williams dissented from the panel's opinion with respect to the First Amendment challenge. Her view can be gleaned from one sentence in her opinion: ([L]et’s call a spade a state -- statutes like these are about prayer in schools." Notwithstanding the deference that should be shown to the legislature's stated purpose and the fact that there are statements of secular purpose in the record, Judge Williams believed they were pretextual. She relied principally on two things: the specific reference to prayer and the inclusion of prayer as one of (and the first of) two available alternatives for the moment of silence. She believed that the statute endorsed religion and thereby violated the Establishment clause.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

STAYART v. YAHOO! (September 30, 2010)

Beverly Stayart sounds like a bit of a renaissance woman. Self-described as "sophisticated, well-educated, and highly intelligent," she has a University of Chicago M.B.A, engages in humanitarian efforts in support of baby seals and wolves and wild horses, researches genealogy, has published scholarly papers on the Internet, and writes poetry. One day, she conducted a Yahoo! Search on her own name. That search, and others that followed, produced troubling results. In addition to the links about herself and her activities, she found links to pharmaceutical companies, pornographic websites, and much more. She demanded that Yahoo! remove the offensive links. Yahoo! declined. Stayart brought suit alleging a violation of § 43(a) of the Lanham Act. Judge Randa (E.D. Wis.) dismissed the complaint on the grounds that she had no commercial interest in her name. Stayart appeals.

In their opinion, Circuit Judges Manion and Williams and District Judge Darrah affirmed. The Court noted that Stayart did not challenge the well-established rule that § 43(a) requires a showing of commercial interest. Instead, she argued that her extensive and varied activities and presence on the Internet established a commercial interest in her name. The Court disagreed. Section 43(a) is a remedy for a commercial plaintiff who seeks to protect its commercial interest. Stayart's activities may be laudable -- they are not commercial.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

MARSHALL JOINT SCHOOL DISTRICT v. C.D. (August 2, 2010)

Minor student C.D. was a kindergarten student when he was diagnosed with EDS, a genetic disease affecting the joints. He had poor upper body strength and stability accompanied by chronic pain. The school district evaluated him pursuant to the Individuals with Disability Education Act (“IDEA”) and began providing special education services to C.D. in his gym class. The district developed an Individualized Education Program ("IEP") pursuant to which C.D. received adaptive physical education, physical and occupational therapy, and other aids and programming modifications. The following year, the district developed a new IEP. Among other changes, the new IEP required regular consultation between his adaptive gym teacher and his regular gym teacher. When C.D. reached second grade, the district again reevaluated his entitlement to special education and determined that he no longer met the criteria -- that he had an ailment that adversely affects his educational performance and that he needs special education. The district concluded that he met neither criterion. C.D.'s parents sought administrative review. After a lengthy administrative hearing, the administrative law judge (ALJ) concluded that C.D. was still eligible for special education. Judge Crabb (W.D. Wis.) affirmed. The school district appeals.

In their opinion, Judges Cudahy (concurring), Manion, and Williams reversed and remanded. The Court first took some care in identifying the precise issue on appeal in what it viewed as a complicated case. The Court specifically noted that, notwithstanding significant discussion and attention to C.D.'s academic performance, the only issue was whether he was entitled to special education in his gym classes. In order to qualify as a "child with a disability" under the Act, C.D. must have a health condition that adversely affects his educational performance and thus requires special education. The Court found little evidence in the record addressing the first prong and indications that the ALJ misapplied the test. There was evidence in the record that C.D.'s health condition could affect his educational performance and the ALJ did conclude that C.D.'s health condition could affect his educational performance. But there was little probative evidence that it actually did affect his performance – which is what the Act requires. The Court thus concluded that C.D. was unable to satisfy the first prong of the Act's test. Alternatively, the Court addressed the second prong of the test -- whether C.D. needed special education. The Court reviewed in detail the evidence presented on that issue and concluded that the ALJ impermissibly discounted testimony of C.D.’s special education gym teacher and that the record lacked substantial evidence or a reasoned basis for the finding that C.D. needed special education in gym.

Judge Cudahy concurred. Although he joined in the majority's result, he expressed the need for caution in overruling findings of fact based on witness reliability and in balancing the weight to be given medical professionals versus education professionals.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

AUTO-OWNERS INSURANCE CO. v. MUNROE (July 22, 2010)

Joshua Munroe was driving his tractor-trailer northbound on an Illinois highway when he approached three southbound tractor-trailers, all owned by Wayne Wilkins Trucking. The middle truck attempted to pass but was unable to do so successfully. Munroe's truck first struck the middle truck and then collided head on with the trailing truck. Munroe suffered very serious burns and injuries. The southbound trucks were all insured under a single policy issued by Auto-Owners Insurance Company. The policy had a $1 million per occurrence limit and included a combined limit provision which limited its liability to $1 million per occurrence regardless of the number of vehicles involved in the accident. Munroe settled with the insurers for the million dollar limit, less the amount paid in property damage. The insurance company agreed to file a declaratory judgment action -- Munroe reserved the right to seek additional damages if they court ruled that coverage exceeded the million dollars. Judge Baker (C.D. Ill.) granted summary judgment to Auto-Owners. Munroe appeals.

In their opinion, Judges Ripple, Manion, and Sykes affirmed. The Court had no difficulty in first concluding that the insurance policy was not ambiguous and limited coverage to $1 million per occurrence. Only if there were multiple occurrences would the coverage exceed $1 million. Illinois uses the "cause theory" in analyzing the number of occurrences. Under that theory, there must be multiple "separate and intervening human acts" to create multiple occurrences. Here, although Munroe alleged that each of the three drivers was individually and separately negligent, the accident was a single, uninterrupted event without intervening causes. It was thus a single occurrence. The Court also rejected Munroe's argument that the Motor Carriers Act and the MCS-90 endorsement required combined coverage of $2.25 million. The Court was "skeptical" of the argument that the endorsement applied on a per vehicle basis but found it unnecessary to decide that question. By its own terms, the endorsement is triggered only by a final judgment. With no final judgment, the endorsement does not apply.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

DOCTORS NURSING & REHABILITATION CENTER v. SEBELIUS (July 16, 2010)

Doctors Nursing & Rehabilitation Center (“DNRC”) is a nursing home located in Salem, Illinois. The Medicare program reimburses DNRC for certain procedures on a per procedure basis. DNRC has a dispute with the program regarding the proper rate at which it was reimbursed for pulse-oximetry tests. A pulse-oximetry test is a noninvasive procedure for measuring blood oxygen levels, usually by placing a sensor on a patient's fingertip. DNRC presented its claims through the proper administrative channels, first through a fiscal intermediary and then through a “Qualified Independent Contractor.” Both levels of review rejected DNRC's challenge. It brought suit for underpayment of benefits. Health and Human Services, the agency that administers the Medicare program, decided to reopen the administrative proceedings. In the district court, it moved to dismiss for lack of jurisdiction on the ground that there was no longer final agency action. Judge Scott (C.D. Ill.) granted the motion and dismissed the case. DNRC appeals.

In their opinion, Judges Posner, Manion, and Hamilton reversed and remanded. A party may seek judicial review of a "final decision" in any case that arises under the Medicare Act. Here, the dismissal by the Qualified Independent Contractor satisfies that final decision requirement. For several reasons, the Court concluded that an agency is not able to divest a court of its jurisdiction by simply reopening an administrative proceeding. First, it relied on the general rule that jurisdiction is analyzed at the time of filing. Second, it noted that the controlling statute contains a specific provision allowing an agency to request a court, before answering and for good cause, to remand the case to the agency. The provision would make no sense if an agency had that power on its own. Finally, the Court noted that an inferior tribunal generally transfers authority over a matter at the time of an appeal. The Court also rejected the agency's request to remand the case to the district court with instructions to remand the case to the agency. The Court left that decision to the district court in the first instance.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

ENVISION HEALTHCARE v. PREFERREDONE INSURANCE CO. (May 12, 2010)

PreferredOne, a health insurance company, entered into a contract with Envision Healthcare, a wholesale insurance broker, for the marketing and sales of its insurance products. Envision sold one of those insurance products to Bradley Romer. Romer had two knee surgeries, with serious complications, that resulted in a hospital bill in excess of $100,000. Upon receiving the hospital bill, PreferredOne did a little investigating into Romer's application. It concluded that he omitted a pre-existing condition. It then rescinded the policy and refused to pay the balance of the hospital bill. Romer brought a breach of contract suit in state court against PreferredOne. PreferredOne filed a third-party complaint against Envision for indemnification. Envision then filed suit against PreferredOne in federal court seeking a declaration that it had no duty to indemnify. It then unsuccessfully sought to dismiss the state court third-party complaint on the grounds that it involved the same legal issue. PreferredOne moved to dismiss the federal action. Concluding that the federal and state cases involved the same parties and presented the same legal issue, the district court dismissed the case under the Wilton/Brillhart doctrine of abstention. Envision appeals.

In their opinion, Judges Bauer, Manion, and Tinder affirmed. The Court first noted that its standard of review of the district court's decision to abstain is for abuse of discretion. Applying that standard, the Court found no abuse. In fact, it noted that the case presented a "classic example" of the proper use of the Wilton/Brillhart doctrine -- only declaratory relief is sought and a parallel state court action, between the same parties and addressing the same issue, is proceeding.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

GRATZL v. OFFICE OF THE CHIEF JUDGES (April 7, 2010)

Jeanne Gratzl has suffered from incontinence for several years. It has interfered with her ability to perform certain jobs and undertake normal commutes. All seemed well when she was hired by DuPage County for a “control room” court reporting position. Unlike most court reporting positions that require attendance at trials and in courtrooms, her position allowed her to manage her condition well. In fact, she managed it so well that her colleagues and superiors were not aware of it. In 2006, all that changed. The Chief Judge of DuPage County redefined the position of a court reporter – and required all court reporters to do the same job. That meant that all court reporters had to rotate through the control room and the courtrooms. Gratzl disclosed her condition to the Chief Judge. The parties engaged in a series of conversations attempting to reach an accommodation. The only accommodation Gratzl would accept was a full-time assignment to the control room. The Chief Judge offered several accommodations; including no trial assignments, assignments to courtrooms nearest the restrooms, and allowing her to use a hand signal to indicate to a presiding judge that she needed a break. When she rejected these accommodations, the County terminated her employment. Gratzl brought suit under the Americans with Disabilities Act and the Rehabilitation Act. The district court granted summary judgment to the County on the ground that Gratzl was not disabled. Gratzl appeals.

In their opinion, Judges Bauer, Manion, and Williams affirmed. The Court noted the similar requirements of both the ADA and the Rehabilitation Act. A plaintiff must show that she is a qualified individual, with a disability, of which the defendant is aware, and for which the defendant failed to reasonably accommodate. Although the Court briefly addressed whether Gratzl had a disability, which was the basis of the district court's ruling, it ultimately decided it did not have to resolve that issue. Instead, it addressed whether Gratzl was a "qualified individual," meaning whether she was able to perform the essential functions of the job with or without reasonable accommodations. The Court focused on the employer's legitimate description of the functions of the job. Here, that included rotating through the control room and the courtrooms. The fact that Gratzl was able to perform the functions of her prior job was not the issue. The County eliminated that job for legitimate reasons. It is not required to maintain a job, for which an employee is qualified, that it no longer believes is necessary or appropriate. Since Gratzl basically concedes that she cannot perform the job as it is now defined, she is not a “qualified individual.” As an alternative ground, the Court concluded that the accommodations offered by the County were reasonable under the ADA. Her only real objection to the accommodations was that the disruption to the courtrooms necessitated by her frequent breaks would be an embarrassment to her. She is not entitled to reject a reasonable accommodation for that reason.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

ACE AMERICAN INSURANCE CO. v. RC2 CORP. (April 5, 2010)

RC2 produces and markets children's toys. In 2007, it recalled some of its wooden train sets that had been manufactured in China and sold in the United States. The recalled trains contained lead. A number of class-action suits were filed. RC2 looked to its insurers. It first filed a claim with its domestic insurer. That insurer denied coverage because its policies expressly excluded damages caused by lead paint. RC2 turned to its international insurer, ACE American Insurance Co. ACE denied coverage as well, on the grounds that its policies excluded damages from occurrences that took place in the United States. ACE sought a declaration that it had no duty to indemnify or defend – RC2 counterclaimed for declaratory relief and damages. The district court granted summary judgment to RC2 and awarded $1.6 million in defense costs. ACE appeals.

In their opinion, Judges Posner, Manion, and Hamilton reversed and remanded. The Court first looked at the language of the policies to determine if any ambiguity existed, giving the words their ordinary meaning. The policies cover bodily injury and property damage caused by an "occurrence" that takes place in the “covered territory" (which is defined as anywhere in the world other than the United States). "Occurrence" is further defined as "an accident, including continuous or repeated exposure to substantially the same general harmful conditions.” The Court found that this language, particularly the connection between the accident and the exposure, supported ACE’s position that the occurrence took place in the United States. Nevertheless, it concluded that the use of the word "accident" in the policy itself might be considered ambiguous. An otherwise ambiguous term in the policy, however, can be rendered unambiguous when considered against the interpretation of that term by the courts over the years. Applying that principle, the Court concluded that Illinois and most other courts take a consistent approach -- that it is the location of the injury, not the location of some precipitating negligent act, the determines the location of an accident for insurance purposes. The Court rejected RC2's position that Illinois' adoption of the "cause theory" is dispositive. The "cause theory" is relevant only to a determination of the number of occurrences, not the location of occurrence. Therefore, the accident occurred were all the factors combined to create the force that inflicted the injury – and that is the United States.  

• Email This
• Print
• Comments
• Trackbacks
• Share Link

LONDON v. RBS CITIZENS (April 1, 2010)

After Chase Bank obtained a judgment against Andrew and Carolyn London, it issued a Citation to Discover Assets to Charter One Bank. The citation prohibited Charter One from allowing any transfer or disposition of the London’s property "not exempt from execution." Included with the citation was a specific notice indicating that Social Security benefits were exempt funds. Charter One froze the London's accounts, including one into which Social Security benefits were deposited electronically. The Londons demanded that Charter One release the exempt funds -- Charter One refused. Over the course of the next several weeks, additional Social Security deposits were made to the account. They also were frozen and their release denied. The Londons filed suit under § 1983, claiming that the bank violated their constitutional right to due process under the Fourteenth Amendment as well as 42 U.S.C. § 407(a). The district court granted Charter One's motion to dismiss, concluding that the temporary freeze did not violate § 407(a) and that the Londons were afforded adequate process by a post-deprivation hearing in state court. The Londons appeal.

In their opinion, Chief Judge Easterbrook and Judges Manion and Evans affirmed. In order to state any claim under § 1983, stated the Court, a plaintiff must allege the deprivation of a right guaranteed by the Constitution or laws and that the deprivation occurred at the hands of a person acting "under color of state law." Under that standard, private persons may not be sued for purely private conduct. Instead, for a private party to be held accountable under § 1983, the deprivation must be caused by the exercise of a right created or imposed by the state. Here, to the contrary, the bank was not following any state-imposed right or rule of conduct. The citation itself restricted its order to funds that were not exempt from execution and provided a notice that Social Security benefits were exempt. The bank's misapplication of the state law directive does not amount to conduct taken "under color of state law."

• Email This
• Print
• Comments
• Trackbacks
• Share Link

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

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

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

• Email This
• Print
• Comments
• Trackbacks
• Share Link

MILWAUKEE METROPOLITAN SEWERAGE DISTRICT v. AMERICAN INTERNATIONAL SPECIALTY LINES INSURANCE CO. (March 10, 2010)

The Milwaukee Metropolitan Sewerage District ("District") provides wastewater treatment services and performs flood control work in the Milwaukee area. As part of its flood control responsibilities, the District developed a plan to control flooding on the Lincoln Creek. Execution of the plan required the District to purchase a nineteen-acre parcel of land along the Creek. The District decided to procure environmental liability insurance before purchasing the property. The District met in late 1998 with its insurance broker, Sedgwick of Illinois. The District discussed obtaining insurance for property it referred to as "Lincoln Creek" but provided very little information about the actual parcel. Sedgwick contacted Crump Insurance Services of Illinois, a wholesale broker, and inquired about coverage. In February of 1999, the District authorized Sedgwick to obtain insurance for five separate properties, including Lincoln Creek. Each of the properties other than Lincoln Creek was identified with a specific address. Lincoln Creek was not. Crump forwarded the order of insurance to AISLIC. Although AISLIC confirmed that it had bound coverage, it listed only the four properties that had specific addresses. When Crump noticed the absence of Lincoln Creek, it added the parcel to the binder and forwarded it to both Sedgwick and AISLIC. AISLIC objected to the inclusion and stated that it was not including Lincoln Creek as an insured property. After its receipt of the formal application, which included Lincoln Creek, AISLIC again stated that it was not willing to include Lincoln Creek. Crump informed Sedgwick that AISLIC was not including Lincoln Creek both because of the absence of an actual address and because the property was not then owned by the District. AISLIC eventually issued a policy for the four identified properties and a fifth added property. Although the District noticed the absence of Lincoln Creek, Sedgwick told the District that the fifth property was actually a reference to Lincoln Creek. The District proceeded with its purchase and discovered significant environmental contamination. It submitted a claim to AISLIC for over $700,000 for its cleanup of the contamination. AISLIC denied the claim. The District sued AISLIC for reformation of the contract. AISLIC brought a third-party indemnification action against Crump. After a bench trial, the district court granted reformation of the contract, concluding that Crump was AISLIC’s agent and that it was Crump’s failure to obtain necessary that led to the parcel being excluded from coverage. The court entered judgment for the District against AISLIC and for AISLIC against Crump. AISLIC and Crump appeal.

In their opinion, Judges Flaum, Manion, and Wood reversed and remanded the judgment against AISLIC and vacated the judgment against Crump. Applying Wisconsin law, the Court stated that an insurance policy can be reformed to reflect a prior agreement if: a) there is clear and convincing proof of a prior meeting of the minds, and b) the failure of the agreement to reflect the prior agreement results from either a mutual mistake or a mistake by the party seeking reformation combined with some inequitable conduct by the other. Here, the Court found both elements absent. The clearest description of the parcel ever given to AISLIC was its name and that it was located somewhere along several miles of the Creek. The Court found that evidence insufficient to identify the property for which the District sought coverage and that the evidence as a whole failed to amount to clear and convincing evidence of a prior agreement. In addition, the Court found that the evidence supported the proposition that the District knew the parcel was never covered. The District’s agent was well aware that AISLIC required an address before including the parcel and, in fact, refused to include the parcel because it was not owned by the District. Therefore, the District could not satisfy that it was operating under a mistake.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

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. 

• Email This
• Print
• Comments
• Trackbacks
• Share Link

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.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

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.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

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.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

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.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

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.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

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.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

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.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

 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.

• Email This
• Print
• Comments
• Trackbacks
• Buckhannon">Share Link

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.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

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.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

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.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

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.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

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.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

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.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

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.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

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.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

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.  

• Email This
• Print
• Comments
• Trackbacks
• Share Link

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.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

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.

• Email This
• Print
• Comments
• Trackbacks
• Share Link