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

UNITED STATES v. SUAREZ (December 16, 2011)

José Suarez, a Mexican native, became a permanent resident of the United States in 1978. Over the course of the next 20 years, he was arrested on a few occasions but the charges were always dismissed. In mid-1996, Suarez was engaged in marijuana distribution but was not immediately charged. In December of that year, he applied for naturalization. He disclosed his earlier charges but not the marijuana distribution activity just months earlier. He eventually became a United States citizen in May of 1998. A few months later, he was charged and convicted for marijuana trafficking. He was sentenced to 87 months in prison. A few years after his release, the United States sought to revoke his naturalization on the grounds that he lacked the good moral character required for citizenship and had illegally procured his naturalization. Judge Dow (N.D. Ill.) granted summary judgment to the United States. Suarez appeals.

In their opinion, Seventh Circuit Judges Kanne, Rovner, and Sykes affirmed. Good moral character is required for citizenship. The relevant statute lists several qualities that would disqualify a person under the moral character requirement. One of those is a conviction for a controlled substance offense if the offense was committed during the five-year period prior to the application filing. The Court concluded that the conviction for the offense need not occur prior to the application. Suarez’s citizenship was therefore properly revoked. However, because the Government did not share the Court's view on the conviction’s timing and argued, instead, that the statute’s catchall provision applied, the Court addressed it. Federal regulations, which here are entitled to Chevron deference, provide that an applicant lacks good moral character if he violates a controlled substance law during the statutory period. The regulation does not speak to a conviction. Therefore, the Court concluded that Suarez was ineligible for citizenship under the catchall provision as well. Finally, the Court provided a third route under which Suarez would be barred from citizenship. Another federal regulation provides that an applicant lacks good moral character if, absent extenuating circumstances, he committed unlawful acts and was later convicted. The Court noted its concurrence with the Eleventh Circuit that a conviction during the statutory period was not required. Since Suarez raised no issues of material fact guarding the "extenuating circumstances" exception, he is ineligible for citizenship and his citizenship was properly revoked.

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STEVENS v. HOUSING AUTHORITY OF SOUTH BEND (December 1, 2011)

Bridgett Stevens and her two sons moved into public housing in South Bend, Indiana in 2007. The lease she signed with the Housing Authority of South Bend provided that any involvement in criminal activity by Stevens, her household, or guests could result in immediate termination of the lease. In late 2007, two men were involved in a gunfight in the building's parking lot. One man was Stevens' daughter's boyfriend -- the other was the daughter's former boyfriend, the father of her children, and the invited guest of Stevens son. The Authority issued a notice to vacate the apartment by the end of January, 2008. Stevens filed suit alleging that the Authority violated the Fair Housing Act, that it interfered with her right to make a contract, that it breached its contract with HUD, and that it violated her equal protection and due process rights. The Authority filed a counterclaim for immediate possession of Stevens' apartment. Months later, the authority issued another 30-day notice to vacate. The second notice was based on October and November 2008 incidents of domestic abuse. The Authority issued a third notice in November based on yet another incident of domestic abuse. Stevens never challenged the second or third notices. She vacated the apartment in January 2009. Judge Lozano (N.D. Ind.) granted summary judgment to the Authority. Stevens appeals.

In their opinion, Seventh Circuit judges Posner, Kanne, and Rovner affirmed. The Court first addressed the district court's conclusion that her claims based on the first notice were moot as a result of her involuntary departure after the second and third notices. Her claim is moot if she no longer retains an interest in the outcome. First, she is not entitled to injunctive or declaratory relief because of her failure to challenge the later notices. Second, she does not claim any out-of-pocket losses. Third, although she does claim damages for emotional distress, the Court concluded that she did not meet the standard for proving emotional damages when her testimony is the only offered proof. In so concluding, the Court also rejected Stevens’ contention that the first notice was unlawful in that she had no control over the men who fought. The Court concluded that the Authority's notice was lawful. Under Rucker, no fault evictions based on the criminal activity of invited guests are lawful, even if the criminal activity was without the knowledge of the tenant. The Court turned to her Fair Housing Act claim that the Authority's decision on where to locate the apartment was an act of segregation. But Stevens' proof consisted entirely of her unsupported personal observations. The record is devoid of any evidence concerning the demographics of the community today or when the complex was built in 1961.
 

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DAMASCO v. CLEARWIRE CORPORATION (November 18, 2011)

Jerome Damasco brought a class action suit in state court against Clearwire Corporation. He alleged that Clearwire sent unsolicited text messages in violation of the Telephone Consumer Protection Act. He sought both injunctive relief and damages for the more than 1,000 people he estimated received the text messages. Clearwire offered to settle the case by paying Damasco (and up to 10 additional people) the maximum statutory penalty ($1,500) and agreed to stop sending the unsolicited messages. Damasco never responded. A few days later, Clearwire removed the case to federal court. Damasco moved for class certification almost immediately. Within a day, Clearwire moved to dismiss on the grounds that its settlement offer rendered the case moot. Judge Zagel (N.D. Ill.) agreed with Clearwire and dismissed, concluding that the Seventh Circuit's Holstein decision controlled. A complete settlement offer before a class certification filing moots the named plaintiff’s claim. Damasco appeals.

In their opinion, Seventh Circuit Judges Manion, Rovner, and Tinder affirmed. Article III of the Constitution requires federal courts to hear only live cases and controversies. As such, a party must maintain a personal stake in the litigation. Here, once Clearwire expressed its willingness to give Damasco everything to which he may have been entitled under the law, there is no more controversy. The Court has held in the past that a plaintiff cannot avoid mootness simply by moving to certify the class after the offer. Although the Court recognized that several other circuits have allowed plaintiffs to seek class certification after such a full offer, the Court reiterated its belief that such a rule violated Article III and declined to adopt it. A simple solution exists to any concern that defendants could frustrate class actions by simply offering each named plaintiff a full settlement. That solution is to move for class certification at the time the complaint is filed. The filing of the motion protects the plaintiffs and the class. The Court also noted that a plaintiff, to the extent he believes he is not ready to place the class certification issue to the court, can seek additional time for further investigation or discovery.

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BIELSKIS v. LOUISVILLE LADDER (November 18, 2011)

Raymond Bielskis was an acoustical ceiling carpenter employed by International Decorators. Although International Decorators usually supplied Bielskis with scaffolding necessary for his projects, he did own a mini-scaffold manufactured by Louisville Ladder that he used occasionally. One of those occasions was in March 2005. He was in the middle of a project when one of his co-workers borrowed the scaffold he was using. He brought in his mini-scaffold from his car, inspected it, and began to use it. He used it for several hours without incident. Then, without warning, it collapsed and he fell to the floor, sustaining injuries. He inspected the scaffold and noticed that one of the wheel stems had broken. Bielskis brought suit against Louisville Ladder, alleging counts based on strict liability and negligence. Louisville Ladder filed a third-party complaint against International Decorators for contribution. Bielskis retained Neil Mizen as his expert. In his report, Mizen concluded that the wheel stem failed because of a "brittle fracture" caused by excess tensile stress due to over tightening the stem. He further opined that the fracture could have been avoided with an alternative mechanism or by simply not tightening it as much. Louisville's expert examined the fracture surface carefully and did extensive testing and reconstruction. He also concluded that the stem failed because of a brittle fracture. He concluded, however, that the wheel was too loose, not too tight. Louisville moved to exclude Mizen's testimony. Judge Leinenweber (N.D. Ill.) agreed, concluding that Mizen's testimony failed under the Daubert factors. He excluded the testimony and granted summary judgment to Louisville. Bielskis appeals.

In their opinion, Seventh Circuit Judges Cudahy, Rovner, and Evans (who, as a result of his death, took no part in the decision) affirmed. The Court first addressed and resolved a jurisdictional matter. The district court’s order did not resolve the third party complaint brought against International Decorators and thus was technically not a final judgment. The Court concluded, however, that the summary judgment order in Louisville's favor resolved Louisville's third-party claim for all practical purposes and concluded the district court litigation. The Court turned to the merits. Under Federal Rule of Evidence 702, the district court must ensure that an expert's methodology is scientifically reliable. Daubert set out a number of factors addressed to an expert’s theory: has it been tested, has it been subjected to peer review, what is its rate of error, and what is its level of acceptance. The district court's evaluation is reviewed under an abuse of discretion standard. The Court conceded that it was a close question, but ultimately found no abuse of discretion. It relied on several facts: plaintiff’s expert made no attempt to test his theory (Louisville's expert tested extensively), Mizen presented no evidence of the level of acceptance or rate of error of his conclusion, and his proposed alternatives were not supported by any engineering principles. In short, Mizen's opinion was long on speculation and short on fact. The Court went on to conclude that the district court did not err in denying Bielskis’ motion for continuance to obtain a new expert. Again, the Court considered it a close call but concluded that the district court did not abuse of discretion in managing its docket that way. Finally, the Court affirmed the grant of summary judgment to Louisville. Although acknowledging that expert testimony may not be necessary in all product liability cases, it was required here. The scaffold had been in Bielskis’ control for years and there was no evidence regarding its condition when it left Louisville. There was also little evidence of its use while under Bielskis’ control. Bielskis could not prevail without expert testimony on those issues.

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COMMON v. CITY OF CHICAGO (October 20, 2011)

Chicago police officers Guy Nelson and Sean O'Brien responded to a call that a robbery suspect could be found in a south-side convenience store. As they approached the store, they saw three men that fit the description they had been given by the store owner leaving the store. Considering the inconsistent evidence in a light most favorable to the officers, a) Officer Nelson identified himself, b) Nelson ordered the three men to stop and show their hands, c) two of the three men complied, d) Michael Smith did not comply (even after repeated requests), e) Nelson removed a gun from his pocket, f) Smith grabbed for the wrist of Nelson's gun-hand, and g) Nelson fatally shot Smith. The medical examiner found five small bags of cocaine in Smith's chest and trachea and concluded that they made their way there through the upper airway. Smith's estate brought suit against the officers and the City, alleging excessive force. Judge Kennelly (N.D. Ill.) ruled, in limine, that the cocaine evidence was admissible. After trial, a jury found in favor of the defendants. Smith's estate appeals.

In their opinion, Seventh Circuit Judges Posner, Rovner, and Tinder affirmed. The question for the jury in this case was whether Officer Nelson's actions were objectively reasonable, given the facts and circumstances known to him at the time. The general rule is that the jury should not consider information that the officer did not know at the time of his actions. The Court noted two exceptions to the general rule -- to challenge the credibility of a witness 1) by attacking his capacity to observe, recall, or relate or 2) by pointing out contradictions in his testimony. Here, the testimony of the various witnesses was inconsistent. The estate's version was that Smith complied with the officers' request and stood quietly, with arms raised, when Officer Nelson shot him. The evidence that Smith possessed five small bags of cocaine makes it more likely that his conduct fit the description given by the officers rather than that of the other witnesses. It would, for example, explain why he was less willing to cooperate and why he did not want to face the officers and show his hands. It therefore fits within the exception to the rule that the jury should only consider what the officer knew. The Court added that the district court could have excluded the evidence on unfair prejudice grounds. Appellate review of a district court’s findings in this area is quite deferential. The Court concluded that the district court did not err in admitting the evidence.

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O'LEARY v. ACCRETIVE HEALTH, INC. (September 21, 2011)

Accretive Health is a Chicago-based firm that provides consulting services to hospitals. It hired Joseph O'Leary in early 2005. Although the firm was initially satisfied with O'Leary's performance, it started having reservations in mid-to-late 2006. It even replaced him at one of the hospitals for which he was responsible at the request of the hospital's CFO. In late 2006, O'Leary learned that one of his female reports had made sexually charged remarks at a company dinner. O'Leary reported the incident to his superiors. At the same time, O’Leary expressed his belief that the same female was treating an African-American subordinate in a harsh manner. A company investigation into the sexual remarks concluded that the employee exercised poor judgment but did not violate any company policy. She was reprimanded. In December of 2006, Accretive terminated O'Leary’s employment. O'Leary brought suit under Title VII and § 1981, alleging that his termination was in retaliation for his actions opposing sexual and racial discrimination. Judge Conlon (N.D. Ill.) granted summary judgment to Accretive. O'Leary appeals.

In their opinion, Seventh Circuit Judges Cudahy and Rovner and District Judge Adelman affirmed. Both Title VII and § 1981 prohibit retaliation against those who oppose the discriminatory practices made illegal by those statutes. The Court first addressed whether O'Leary established that he engaged in protected activity -- that is, that he took some action in opposition to prohibited discrimination. The Court concluded that he did not with respect to the sexual remarks. Given the relatively tame nature of those remarks and the facts that there was only one incident and that no one present felt harassed, O'Leary could not have reasonably believed that they constituted prohibited sexual harassment. The Court concluded that O'Leary did establish that he engaged in protected activity with respect to the employee’s treatment of her African American subordinate. Although the record is not very clear, the Court concluded that a fair reading supports that conclusion. O'Leary testified that he discussed his concern about race discrimination with his superiors, that his concern was based on more than one incident, and that the conduct resulted in the employee’s resignation. Satisfied that O'Leary met the protected activity requirement, the Court considered his claim under both the direct and indirect methods of proof. It easily rejected his claim under the direct method. O'Leary relied almost exclusively on the temporal proximity between his complaint and his discharge. But temporal proximity is rarely enough, by itself, and the timing in this case does not suggest retaliation. With respect to the indirect method, the Court concluded that O'Leary could neither show that he was meeting his employer’s expectations nor that Accretive's stated reasons for firing him were perpetual. Although there are issues of fact with respect to O'Leary's performance, the record contains sufficient undisputed facts to support the conclusion that he was discharged because of his performance.

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NELSON v. NAPOLITANO (September 15, 2011)

Herman Nelson and two other federal air marshals brought suit against the Department of Homeland Security, alleging age and race discrimination and retaliation. While the suit was pending, but before the DHS had answered the complaint, one of the plaintiffs was arrested and charged with sexual assault. Fearing that that fact might negatively affect their lawsuit, the plaintiffs voluntary dismissed their complaint under Rule 41(a)(1)(A). Nine months later, after the statute of limitations had run, the plaintiffs moved under Rule 60(b) to “reinstate the complaint.” Judge Dow (N.D. Ill.) denied the motion. Plaintiffs appeal.

In their opinion, Seventh Circuit Judges Kanne, Rovner, and Sykes affirmed. Although a voluntary dismissal under Rule 41 is generally treated as if the underlying case were never filed, the district court retains jurisdiction to consider a Rule 60(b) motion. So the district court did have jurisdiction to consider the motion. The Court concluded, however, that the district court did not abuse its discretion in denying it. Rule 60(b) allows the court to provide relief for several stated reasons. The plaintiffs never identified which basis it relied on – nor did it make any argument in support of any particular basis. In fact, plaintiffs' counsel mistakenly thought that federal practice mirrored Illinois practice. Under Illinois practice, he would have had a one-year safe harbor within which to refile his complaint. The district court was well within its discretion to determine that counsel's misunderstanding of federal practice did not justify Rule 60 relief.

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THE NATURE CONSERVANCY v. WILDER CORPORATION OF DELAWARE (September 1, 2011)

The Wilder Corporation of Delaware owned 6,660 acres of farmland in central Illinois. In 2000, it sold the property to The Nature Conservatory, which intended to use it as a nature preserve. As part of the agreement, Wilder promised to remove hazardous and toxic substances from the property. The Conservancy brought suit in early 2006 on a number of contract matters. During discovery, it discovered petroleum contaminated soil on the property and amended its complaint. Judge Mihm (C.D. Ill.) granted summary judgment to the Conservatory. Wilder appeals.

In their opinion, Seventh Circuit Judges Rovner, Wood, and Tinder affirmed. The only issue on appeal is Wilder's contention that the petroleum contamination claim should be barred by the equitable doctrine of laches because it was filed seven years after the property transfer and five years after Wilder vacated the property. The Court noted that, in Illinois, laches will bar equitable relief when a party fails to assert a right over a period of time and causes prejudice to the other party. Here, the Conservancy's claim for relief is not in equity but for damages. Although the Court conceded that Illinois’ distinction between law and equity has evolved over the years, it did not believe that an Illinois court would apply laches to a simple breach of contract case for money damages between private actors. It concluded that it did not have to definitively answer that question, however, as it found that Wilder's defense failed for lack of prejudice. The Court noted that the record was devoid of any evidence of prejudice. Although Wilder claimed that the delay prevented him from showing prejudice, he never attempted to discover any facts that would support his claim of prejudice, in discovery or otherwise.

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PEARSON v. VOITH PAPER ROLLS, INC. (August 25, 2011)

Voith Paper Rolls terminated Kenneth Pearson's employment after 14 years on the job. Because Pearson had a potential age discrimination claim against the company, Voith offered to negotiate a severance package with a release. Joseph Booth, Voith's Human Resources Manager and the administrator of the its Pension Plan, conducted the negotiations. At the negotiations, Booth provided Pearson with his benefit calculations and gave him a benefit election form with five options. One option was a lump-sum payment -- the other four options were different variations of payments over time. Unfortunately, the calculations were not entirely accurate. The lump-sum option was stated correctly but the other four options overstated Pearson's pension benefits. Pearson negotiated his severance package with the understanding, based on the inaccurate calculations, that he would receive a monthly pension benefit in excess of $1150. Pearson signed a severance agreement and made his pension benefit election. When the company re-checked the calculations, it caught the error and sent Pearson a new election form with the corrected numbers. The numbers on his option of choice declined from $1150 to approximately $700. Pearson brought suit against the Plan for promissory estoppel. Judge Griesbach (E.D. Wis.) granted summary judgment to the plan, concluding that the Seventh Circuit had never recognized a promissory estoppel claim against a single employer pension plan and that, even if it did, Pearson could not show a knowing misrepresentation, detrimental reliance, or economic harm. The court also concluded that any misrepresentation was made by the company, not the Plan. Pearson appeals.

In their opinion, Seventh Circuit Judges Rovner, Evans (who, due to his death, did not participate in the decision), and Williams affirmed. The Court decided not to resolve whether a promissory estoppel claim can lie against a defined benefit, funded pension plan. Instead, it resolved the appeal assuming that such a claim is viable. Estoppel will only lie in extreme circumstances, which are shown by a knowing misrepresentation in writing that the plaintiff reasonably relied on to his detriment. Here, Pearson fails to make that case. First, the record shows no evidence of the Plan’s intentional misrepresentation. Although Voith may have had an incentive to overstate the pension in order to negotiate a better severance package, the Plan had no such incentive. The Court refused to attribute the employer’s motivation to the Plan. Furthermore, if there was an incentive to overstate the numbers, there was an incentive to overstate all the numbers. The Court found it unbelievable that Booth would overstate four of the five options but communicate the fifth one accurately when he had no idea which option Pearson would elect. The best the evidence supports is negligence, which is not enough for a knowing misrepresentation. The Court also found no evidence of detrimental reliance. Detrimental reliance requires an economic harm. Pearson's contention that he would have achieved a better package had he known the real number is entirely speculative. Furthermore, he testified that he does not want to rescind his severance package and renegotiate it, further supporting the speculative nature of any economic harm.

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MENDEZ v. PERLA DENTAL (May 24, 2011)

Nereida Mendez was a Perla Dental employee. She alleges that she was subjected to severe verbal and physical sexual harassment and even physical abuse. She complained at several levels -- but it only made it worse. She eventually filed a police report concerning the physical abuse. Perla terminated her employment. Mendez brought suit, alleging Title VII claims for gender discrimination, hostile work environment, and retaliation. She also brought state law claims for assault and battery, intentional infliction of emotional distress, and retaliatory discharge. A jury found for Mendez and awarded compensatory and punitive damages. Perla appeals.

In their opinion, Judges Manion, Rovner, and Sykes affirmed. The only issue on appeal is whether the district court had subject matter jurisdiction. Perla argues that the Illinois Human Rights Commission had exclusive jurisdiction of the claim. The Court agreed that the Commission has exclusive jurisdiction of retaliation claims that are based on complaints of sexual harassment. The question is whether Mendez' retaliatory discharge claim was intertwined with her sexual harassment complaints. The answer to that question is found by examining whether the legal duty Perla allegedly violated arises from the Illinois Human Rights Act. Here, Mendez' claim is that she was fired for filing a police report. Defendants agree that such a claim is recognized by Illinois common law, without reference to the Act, but claim that Mendez abandoned that claim during the litigation. The Court rejected Perla’s argument. First of all, there is no factual basis for it. The evidence at trial included reference to the police report. The fact that a jury instruction might not have been complete does not support abandonment. Second, even if Mendez did abandon the claim, subject matter jurisdiction exists because it is decided at the time of the filing of the complaint.

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RADENTZ v. MARION COUNTY (April 5, 2011)

Prior to 2005, forensic pathologists at Indiana University performed certain services, including autopsies, for the Marion County Coroner's office under a contract. The contract terms were very favorable to the County, in that the University subsidized much of the cost. The contract expired on the last day of 2004, the day before Kenneth Ackles, an African-American chiropractor, became the new Coroner. Notwithstanding the contract expiration, the University continued to provide services at no cost for a few months but it eventually terminated the contract. The Chief Deputy Corner reached out to two of the University's pathologists who had been providing the services, Stephen Radentz and Michele Catellier. Radentz and Catellier formed a limited liability company and entered into a five-year contract with the County to provide forensic pathology services. Under the contract, the pathologists could perform autopsies for other counties, but Marion County had to furnish the supplies for those autopsies. With six months notice, either party could terminate the contract without cause and the County could amend the contract to eliminate permission for other county autopsies. In late 2005, Ackles replaced his deputy with Alfarena Ballew, an African-American woman. Ballew terminated the contract with Radentz and Catellier. They brought suit pursuant to § 1983 against the County, Ackles, and Ballew, alleging that the contract termination was based on race discrimination in violation of the Constitution. Judge Lawrence (S.D. Ind.) granted summary judgment to the defendants. Radentz and Catellier appeal.

In their opinion, Chief Judge Easterbrook and Judges Posner and Rovner reversed and remanded. The Court noted that the district court concluded that plaintiffs had met their prima facie indirect method burden, and that determination is not challenged on appeal. What is at issue is whether the defendants' nondiscriminatory reason given for the contract termination was pretextual. In order to prevail, the plaintiffs must do more than show that the decision was unwise. They must show that it was not honestly believed. There was evidence that Ballew and the County were concerned about the contract costs. Ballew was particularly concerned about the costs the County incurred providing supplies for the other county autopsies. The County received no income from these autopsies. The Court noted that the contract allowed the County to withdraw that permission with six months notice. The County never explained why it gave six months notice to terminate the contract rather than giving the six months notice to withdraw the other county autopsy permission. Their failure to explain their decision casts some doubt on it. The Court noted other evidence that was consistent with a race based decision: the County was satisfied with plaintiffs’ work, the County hired an African-American woman to replace the plaintiffs, Ackles was on record discussing his desire for more African-Americans in the Coroner’s office, the racial demographics of the office were changing, and the new hire provided no economic benefit to the County. On that record, the Court concluded that a factfinder would not have to believe the County. The factual disputes concerning the termination decision preclude summary judgment.

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SMITH v. MEDICAL BENEFIT ADMINISTRATORS GROUP (March 15, 2011)

Brenner Tanks of Fond du Lac, Wisconsin employs Jeffrey Smith. It also offers a group health plan, to which Smith belongs. Taking the allegations of the complaint as true: In 2006, Smith's doctors advised that he undergo gastric bypass surgery. Smith sought preauthorization for the surgery from the plan's third party claims administrator, Auxiant. Auxiant took four months to act on his request and authorized the surgery, but they later denied his claims based on a plan exclusion for obesity related surgeries. In fact, according to Smith, Auxiant routinely takes a long time in responding to authorization requests and routinely denies coverage for procedures that it has already preauthorized. Smith brought suit under ERISA, seeking damages, restitution, and other relief. Judge Randa (E.D. Wis.) dismissed the complaint, concluding that Smith was not entitled to the relief he sought under ERISA. Smith appeals.

In their opinion, Judges Flaum, Rovner, and Sykes affirmed in part and reversed and remanded in part. The Court first concluded that Smith had adequately alleged that Auxiant breached a fiduciary duty. Auxiant is an ERISA fiduciary, has a duty of loyalty, must exercise reasonable care, and must not mislead an insured. Accepting the factual allegations as true, the Court concluded that Auxiant’s preauthorization practices could be considered a breach of a fiduciary duty. But is Smith entitled to relief? The Court identified three possibilities. Under § 502(a)(1)(B), a plan beneficiary is entitled to recover benefits due him -- but Smith has conceded that Auxiant’s ultimate denial of benefits was proper under the plan terms. Under § 502(a)(2), a plan beneficiary is entitled to recover losses to the plan that result from a breach of fiduciary duty -- but Smith is seeking damages for himself, not the recovery of plan losses. The plan had no losses. Finally, under § 502(a)(3), a plan beneficiary may seek to enjoin an improper practice or obtain other equitable relief for ERISA or plan violations. Smith has a cause of action under (a)(3), but only for equitable relief. The Court concluded that Smith adequately requested such relief in his complaint. The Court warned that any such relief should be carefully crafted so as not to modify the plan terms.

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GROSS v. PPG INDUSTRIES (March 7, 2011)

PPG Industries has employed Eric Gross as an industrial technician since 1997. Gross is a member of the United States Marine Corps Reserve. He was called up for active duty in 2004. Before he left, he met with the PPG's human resources advisor, who explained his benefits. PPG’s policy guaranteed his return to his job and also paid him the differential between his PPG salary and his military salary. PPG computed the salary differential by subtracting his military monthly base pay from his PPG monthly base pay. When Gross returned from deployment, he submitted a complaint regarding the differential calculation. Since Gross was required to work more days per month in the military, he wanted PPG to: a) calculate a daily rate of pay for his military job, and b) subtract from his PPG salary his military salary for only those days he would have worked at PPG. PPG refused to apply that calculation retroactively, but did adopt it prospectively. Gross brought suit against PPG pursuant to the Uniformed Services Employment and Reemployment Act. Judge Stadtmueller (E.D. Wis.) granted PPG summary judgment. Gross appeals.

In their opinion, Judges Cudahy, Rovner, and Evans affirmed. The Court first addressed Gross' argument that the pay calculation violated the Act. Under § 4311, someone in Gross' position cannot be denied a "benefit of employment" because of his service obligations. The Court noted that it has very recently held (opinion and intheiropinion) that § 4311 does not require an employer to provide benefits to military personnel that it does not offer to other employees. Section 4311's purpose is to protect military personnel from discrimination, not to provide preferential treatment. The Court added that Gross would not be entitled to relief even if it accepted his argument that differential pay was a "benefit of employment." PPG did not deny Gross his differential pay. It just did not pay it under Gross' calculations -- nor was it required to. Next, the Court considered and rejected Gross’ retaliation claim. The Act only prohibits an adverse employment action against a person who has sought protection under the Act. Here, there was no adverse employment action. PPG paid Gross under a calculation that it was within its rights to use and denied him no pay. Even if the calculation constituted an adverse employment action, it could not amount to retaliation. All of the calculations and payments under the PPG formula took place before Gross made any complaints. They could not possibly been in retaliation for something that had not yet occurred.

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INTEGRATED GENOMICS v. GERNGROSS (February 24, 2011)

Integrated Genomics is in the business of mapping organisms' genomes and selling the data for commercial and noncommercial uses. In 2000, Tillman Gerngross, a Dartmouth College bioengineering professor, formed a private company to develop commercial uses for the genetic modification of yeast. In 2002, Gerngross sought to obtain a license to use data IG had developed regarding a species of yeast organism. The parties dispute whether Gerngross disclosed that he was seeking a license for commercial, rather than academic, purposes (the district court concluded that he had not). In any event, IG treated him as an academic customer. IG usually charges more to its commercial customers. Gerngross refused to sign IG's standard academic agreement, but did agree to some data publication restrictions. Merck acquired Gerngross’ company in 2006 for $400 million. IG accused Merck of using its data for commercial purposes. When Merck refused to compensate IG more generously, IG filed suit against Gerngross. It alleged that Gerngross fraudulently misrepresented his status when he acquired the license, breached an oral agreement to use the data for academic purposes only, and breach the written agreement that restricted publication. Judge Kennelly (N.D. Ill.) granted summary judgment to Gerngross on the oral contract claim (finding insufficient evidence of a contract), granted summary judgment to Gerngross on the written contract claim (concluding that internal data sharing was not publication), and entered judgment for Gerngross on the fraudulent misrepresentation claim after a bench trial (finding that Gerngross did not misrepresent the purpose of the data and that he had no duty to affirmatively volunteer its purpose, and concluding that IG failed to carry its burden that it would have made a difference). IG appeals the rulings with respect to the written agreement and fraudulent misrepresentation.

In their opinion, Judges Bauer, Rovner, and Hamilton affirmed. With respect to the written contract claim, the Court had to interpret Gerngross’ promise not to "publish" more than a certain amount of data per year. Applying state law, and particularly Illinois' rule to give contracts their plain meaning, the Court concluded that "publish" means disclosure to the public. Therefore, Gerngross’ sharing with Merck did not constitute a publication and was not a breach. With respect to the fraudulent misrepresentation claim, the Court concluded that there was sufficient evidence to support the district court's finding – and also sufficient evidence to support the finding urged by IG. The district court did not commit error in resolving the dispute as it did.

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PUNZIO v. ASTRUE (January 21, 2011)

Patricia Punzio's life has been difficult -- alcoholic parents, sexual abuse, attempted suicide, dyslexia, depression, and alcohol abuse all by the time she was 26. Although she stopped drinking at that time, she still had few job skills and had trouble maintaining employment. In 1998, at the age of 40, she sought psychiatric treatment. For the next several years, she participated in treatment and took medication. She was diagnosed with depression and bipolar disorder. Her condition and symptoms improved at times and, at other times, regressed. Her therapist, who saw her in weekly sessions in 2005 and 2006, concluded that she was incapable of holding down a job as a result of her mental illness. Punzio applied for disability benefits in 2005. At an ALJ hearing in 2007, she testified that her condition had improved with treatment but that she still had days when she could not leave the house, that she was still troubled by dyslexia and poor memory, that she mixes up numbers, that she has trouble remembering directions, and that she spends most of her time at home. In response to a question from the ALJ proposing certain limitations on Punzio's capacity to work, a vocational expert testified that Punzio could return to her prior work and would also be able to do factory work. Punzio's lawyer added additional restrictions to the question, including an inability to stay on task and to understand instructions and a likelihood to miss work three days a month. The vocational expert testified that any of those restrictions would eliminate any potential employment. The ALJ commented that the record did not support those added restrictions and asked for supplemental evidence. Punzio solicited an opinion from her treating psychiatrist. The psychiatrist submitted a report that supported the conditions suggested by Punzio's lawyer. The ALJ denied benefits, assigning no weight to the psychiatrist assessment because it was solicited by her attorney for purposes of the hearing and because it was inconsistent with other treatment notes. He also rejected the therapist’s opinion and Punzio's own testimony (as "not entirely credible"). Judge Darrah (N.D. Ill.) affirmed. Punzio appeals.

In their opinion, Judges Posner, Rovner, and Tinder reversed and remanded for the award of benefits. The Court first noted that the ALJ's failure to give any reason whatsoever for the belief that Punzio's testimony was not credible was grounds for reversal itself. The Court has commented several times recently on this unacceptable but frequent practice. (See Martinez, Spiva, and Parker). But another, more serious problem attracted the Court's attention. A treating physician's opinion is entitled to "controlling weight" if it is supported by competent evidence and not inconsistent with other evidence. Here, the ALJ rejected the treating physician's opinion, citing both that it contradicted her treatment notes and that it was solicited by her lawyer. The Court rejected both reasons. It found no contradiction between her diagnosis and her notes, when viewed as a whole, and criticized the ALJ’s “cherry-picking” the record to find an arguable, fleeting contradiction. As for the opinion being requested by the lawyer, the Court noted that the practice was endorsed by the agency's regulations and even encouraged on the agency's website. The Court recognized that sometimes treating physicians are not objective, but noted that the concern is addressed by the regulations. Given the treating physician's opinion and supporting evidence and the vocational expert's testimony that no jobs are available to someone with Punzio's mental condition, the Court concluded that a remand for further consideration was unnecessary. Instead, it remanded for an award of benefits.

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LEITGEN v. FRANCISCAN SKEMP HEALTHCARE (January 13, 2011)

From 1993 to 2006, Dr. Christine Leitgen was a physician in the Department of Obstetrics and Gynecology at a hospital owned by Franciscan Skemp Healthcare. She was one of the busiest and highest paid doctors in the department. She also served as chair of the Department from 1999 to 2004. The Hospital distributed the revenue it received for deliveries equally among the physicians in the department, regardless of the number of deliveries each performed. Since the female physicians usually performed more deliveries, they were generally unhappy about the Hospital's compensation scheme. Leitgen herself complained to the Department chair several times. The issue came up while Leitgen herself was the Department chair, as well. She chose not to address the issue for fear that it would affect morale. Leitgen and another female physician complained to Dr. Sandy, Leitgen's successor as chair. She claims that she identified the flaws in the compensation system as gender discrimination. The issue was discussed several times at department meetings but never voted on -- and never changed. Leitgen complained to the Hospital's CFO in August and September of 2006. Again, she alleges that she framed the issue as one of gender discrimination. Throughout her employment, Leitgen's was the subject of numerous complaints from both staff and patients. In fact, as early as 2003, one of the Hospital's managers recommended that she be fired. In her March 2006 performance review, Leitgen was told that she had shown "some improvement" in the area. In July of 2006, a nurse complained that Leitgen humiliated her in front of the patient. The complaint prompted Sandy to consider discipline. The complaints continued through September. In early September, Sandy and Leitgen's supervisor began to prepare a termination recommendation. The collected information about all the complaints. Sandy made a recommendation to the executive committee that Leitgen be terminated on October 31, 2006. On November 14, Leitgen was told to resign or be fired. She resigned the following day. She brought suit under Title VII of the Civil Rights Act, claiming that her termination was in retaliation for her complaints about gender discrimination. Judge Crabb (W.D. Wis.) granted summary judgment to the defendants. Leitgen appeals.

In their opinion, Judges Rovner, Sykes, and Tinder affirmed. As Leitgen proceeded under the direct method of proof, she was required to establish that she engaged in protected conduct, that she suffered an adverse employment action, and that there was a causal connection. In order to establish protected conduct, she need not prove that the Hospital’s compensation system was discriminatory, but she must prove that she had a reasonable and good faith belief that it was. At this summary judgment stage, the Court concluded that there was sufficient evidence that she had such a belief and that her conversation with the CFO was therefore protected conduct. With respect to the causal connection, however, the Court concluded otherwise. In order for her to meet that requirement, she must show that her complaints were a "substantial or motivating factor" in the Hospital's decision. Her reliance on the temporal proximity between the communication with the CFO and her termination did not persuade the Court. First, suspicious timing is almost never enough. Second, her conversation with the CFO was not the first time she raised the complaint. Third, the conversation was not even the first time she raised the complaint outside her department. Fourth, Sandy and Leitgen's supervisor began their discipline discussions before Leitgen's meeting with the CFO. Leitgen failed to establish the required causal connection and summary judgment was appropriate.

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FORMELLA v. UNITED STATES DEPARTMENT OF LABOR (December 10, 2010)

Don Formella has been driving a truck for more than four decades. In late 2005, he started driving for Schnidt Cartage, a small, local transportation company near Chicago. On a February morning in 2006, Formella arrived at work and discovered that he had been assigned to a different truck than he had been driving. Formella inspected the vehicle and discovered missing permits, non-operable lights, and mismatched tires. Formella was particularly concerned about the potential safety hazard of the mismatched tires. Formella complained to the company's vice president, Linda Marcus. Marcus' and Formella's versions of what happened next vary greatly. Formella claims it was a professional exchange, in which he indicated his belief that the truck was not in compliance with federal and state law -- after which Marcus fired him. Marcus, on the other hand claims that Formella was loud and volatile, that she listened to and made arrangements to correct each of his safety complaints -- and that she fired him only after he became more and more agitated and unstable. Other Schnidt employees confirmed several aspects of Marcus' account of the exchange. Formella filed a complaint with the Department of Labor, alleging that Schnidt fired him for in retaliation for his safety complaints, in violation of the Surface Transportation Assistance Act. After an evidentiary hearing, the ALJ found that Schnidt discharged Formella because of his volatile conduct, not in retaliation for his complaints. An administrative review board upheld the decision. Formella seeks review.

In their opinion, Seventh Circuit Judges Kanne, Rovner, and Williams denied review. The Surface Transportation Assistance Act prohibits an employer from taking any disciplinary action against a driver who refuses to drive a vehicle that does not comply with regulations. The statute was amended in 2007 to make it easier for a driver to sustain his burden. Prior to 2007, a driver had to show that his protected conduct was a but-for cause of the discipline. Since the amendment, a driver only has to show that his protected conduct was a contributing factor in the discipline. The employer then must demonstrate by clear and convincing evidence that it would have acted similarly even in the absence of the protected conduct. The ALJ considered the pre-amendment burden, since the amendment took effect after the conclusion of the hearing but before the decision. The Court rejected Formella's argument that it should consider his case under the amended statute. Because he asked neither the ALJ nor the review board to consider the amendments, Formella has forfeited that argument. On the merits, the Court accepted the ALJ's findings regarding Schmidt's reason for termination since they were supported by the record. The Court then noted that this case was, nevertheless, a close one. Employees are given some degree of latitude in expressing their safety complaints to their employers. Here, Formella assaulted no one, threatened no one, and prevented no one from doing his work. He did lose his temper and shout. Although it concluded that reasonable people could differ, the Court found that the review board was neither arbitrary nor illogical in concluding that Formella’s conduct exceeded that latitude. 

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NORMAN-NUNNERY v. MADISON AREA TECHNICAL COLLEGE (November 8, 2010)

Elvira Jimenez brought a race discrimination lawsuit in 2000 against Madison Area Technical College and three of its employees (Carol Bassett, Jackie Thomas, and William Stryker). Her lawyer was Willie Nunnery. The suit was dismissed as frivolous -- Nunnery was sanctioned and lost his law license for a period of time because of his involvement in the case. On two separate occasions in the following few years, Judy Norman-Nunnery applied for positions at the College. Norman-Nunnery is an African-American woman and is married to Willie Nunnery. In 2002, she made it through an initial screening but was not interviewed. In 2005, she was encouraged to apply for a different position by the College's minority recruiter and Eugene Fujimoto, its Diversity Coordinator. Carol Bassett screened the 77 applicants for minimum qualifications. Norman-Nunnery and 45 others advanced. At that point, a five-person selection committee chaired by Jackie Thomas developed a weighted scoring system with five criteria. Each committee member separately scored the remaining 46 candidates. The College selected the top 10 to interview. Norman-Nunnery was not in the top 10. In fact, only one minority candidate made the list. Under the College’s diversity policy, it added the next two highest-scoring minority candidates to the interview list. Norman-Nunnery was not one of those two, either. Fujimoto met with Basset, Thomas, and William Stryker to discuss why Norman-Nunnery did not make the cut. They told him that she did not score well on two of the five criteria. Although he advised Bassett, Thomas, and Stryker that her resume may not have accurately reflected her experience, they chose not to add her to the interview list. A white woman was hired for the job. Norman-Nunnery filed suit against the College as well as Bassett, Stryker, and Thomas. She alleged violations of Title VII, the 1st and 14th amendment, and § 1981 for discriminating against her on account of her race and her association with her husband. Judge Crabb (W.D. Wis.) granted summary judgment to the defendants on the ground that no rational jury could conclude that race or marital status was the motivation for the defendants' actions. Norman-Nunnery appeals.

In their opinion, Chief Judge Easterbrook and Judges Bauer and Rovner affirmed. The Court first addressed Norman-Nunnery's argument that she was entitled to a spoliation inference due to the unexplained loss of a number of documents relevant to her claim. It concluded that she was not. To be entitled to an inference that the missing documents would support her claim, she must show that the documents were intentionally destroyed in bad faith in order to hide adverse information. Here, the files were lost before any claim was made and there is no evidence that they were intentionally destroyed in order to cover up harmful evidence. The Court cited the fact that the office in which they were located had moved twice, that the filing system was haphazard, and that in fact most of the documents relevant to the claim were not lost. Without evidence of a bad-faith motive, Norman-Nunnery is not entitled to a favorable inference. On the merits, Norman-Nunnery proceeded under both the direct and indirect approaches. Her only claimed direct evidence, however, once the inference was rejected, is an unscientific study that concluded that the College's selection process favored internal candidates. Since most internal candidates were not minorities, the process therefore favored non-minorities. The Court stated that such a study cannot, by itself, meet the standard for a discrimination claim and rejected the claim under the direct method. In reviewing a case like this under the indirect method, the analysis of the prima facie case and the defendants' non-discriminatory reason response frequently overlap. Norman-Nunnery must show that she was qualified and that defendants rejected her in favor of someone of like qualifications. The defendants, on the other hand, assert as their non-discriminatory reason that Norman-Nunnery was not as qualified as those interviewed and as the individual who was hired. The undisputed facts in this case established that the defendants applied the same criteria to all applicants and made their decision based on the applicants' qualifications. Summary judgment on her race discrimination claim was appropriate. For much the same reason, the Court rejected her claim that she was discriminated against because of her husband. There was some evidence that at least some of the defendants knew who her husband was and continued to have negative feelings about him. There was no evidence, however, that the defendants made their hiring decisions because of him.

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BONTE v. U.S. BANK (October 19, 2010)

Travis and Jolene Bonte own a home in the small village of Woodville in west-central Wisconsin. In late 2005, they took out a third mortgage on the home. A few years later, the Bontes brought an action for rescission. They alleged that there were ten discrepancies between the HUD-1 settlement statement and the Truth in Lending Act (TILA) statement and disclosures. U.S. Bank, the mortgage holder, moved to dismiss for failure to state a claim. It argued that none of the errors alleged related to a “material” disclosure as required for TILA rescission. In response, the Bontes simply restated their allegations and the applicable legal standard. Judge Crocker (W.D. Wis.) dismissed the complaint, holding that the Bontes waived their opposition to the motion by failing to respond but also concluding that U.S. Bank was correct. The Bontes appeal.

In their opinion, Judges Posner, Rovner, and Sykes affirmed. The Court agreed with U.S. Bank’s statement of the applicable law – that rescission (at least after three days) requires proof of a “material” non-disclosure. Regulation Z identifies eighteen required disclosures and names five of them as material: the APR, the finance charge, the amount financed, the total of payments, and the payment schedule. The Court noted that the Bontes alleged that the ten errors related to the APR, the finance charge, and the amount financed. But U.S. Bank went through each of the errors and showed how they did not related to any material disclosure. The Bank provided citations and reasons why each did not qualify as a material disclosure. The Court noted that the Bontes failed to respond to any of the Bank’s arguments. Just as they did in the district court, they merely restated their conclusory allegation that the errors related to material disclosures. Iqbal requires a two-step approach. The Bontes meet the first step – a “short and plain statement” of their claim. But they failed, said the Court, to satisfy the second prong – demonstrating a plausible entitlement to relief. Just because they couched their allegation of materiality as a factual allegation, a court is not required to accept it as true. It is, in fact, a legal conclusion – not a factual allegation. By failing to respond to the Bank’s arguments, they have waived any argument that the errors related to material disclosures.

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GATES v. CITY OF CHICAGO (September 27, 2010)

Chicago police arrested Luster Nelson in February of 2004 on a narcotics charge -- and seized the $59 in cash that he had on his person at the time. Chicago police arrested Elton Gates in January of 2003 on a non-narcotics charge -- and seized the $113 in cash that he had on his person at the time. Gates and Nelson were each given a property inventory receipt that included instructions for the return of their property. Gates ultimately pled guilty and unsuccessfully sought the return of his $113. The charges against Nelson were dismissed. He also was unsuccessful in his attempt to retrieve his $59. Gates and Nelson brought a class action suit against the City and various individuals. They alleged due process violations in that the City: seized their property and kept it without instituting a forfeiture proceeding, misrepresented when their property would be available, kept their property after the conclusion of criminal proceedings, and maintained a policy designed to delay the return of property. They sought the return of their cash, damages, and attorney's fees. They also included state law claims for conversion, replevin, and unjust enrichment, among others. Shortly after they filed suit, the City sent each a check in the full amount of his alleged property loss and offered to pay interest. The plaintiffs returned the checks. The court certified two classes of individuals (one for narcotics arrestees, one for non-narcotics arrestees) who had had property taken from them during a particular period, whose criminal cases had been resolved, and who had not been able to recover their property. The Seventh Circuit affirmed the class certification. Judge Castillo (N.D. Ill.), on remand, granted summary judgment to the City on the federal claims, refused to certify a class on the state restitution claims, and dismissed those claims as moot. The plaintiffs appeal.

In their opinion, Judges Kanne, Rovner, and Wood affirmed in part and vacated and remanded in part. The Court first turned to the sufficiency of the notice. It looked to the Supreme Court decisions in West Covina and Memphis Light for guidance. In West Covina, the Supreme Court upheld a notice that did not give many specifics about the procedure for obtaining the return of one's property but the procedures were generally available in public sources. Conversely, in Memphis Light, the Supreme Court held that a public utility must give its customers notice of its internal procedure for resolving billing disputes because the procedure was not otherwise publicly available. Here, part of the procedure for property recovery is contained in Illinois statutes and is publicly available. However, the record shows that the police also use internal procedures that are not described in generally available documents. The Court concluded that the notice provided to the plaintiffs did not satisfy Memphis Light and violated due process. The Court referred to the City's instructions as a "model of misdirection" and concluded that summary judgment for the City was premature. The narcotics arrestee class also challenges the additional notice that is sent to the home of narcotics arrestees. Their position is that the City should check the sheriff's website to determine if the arrestee is incarcerated, either before sending the notice or at least upon return of an undelivered notice. A notice, under due process, must be reasonably calculated to inform interested parties. Generally, a notice mailed to the interested party's residence is sufficient -- unless, of course, there is reason to know it would be ineffective. The Court concluded that summary judgment for the City was premature with respect to the narcotics notice. The extra notice to narcotics arrestees is not just a notice -- it is a document required to recover property. The record is not clear regarding the burden on the City to check the website, either for all notices or for those returned undelivered. The City failed to meet its burden that the mailing of the notice meets the Mullane standard.

The Court moved to the consideration of the adequacy of the procedures themselves. Again, the Court concluded that summary judgment for the City was error. First, it identified a number of factual disputes regarding the actual procedure. Second, it discussed a series of Second Circuit cases (McLendon, Butler, and Alexandre) to clarify the difference between having procedures for the return of property and having remedies if the procedures fail. A post-deprivation remedy is not a defense to a § 1983 action if the deprivation is a result of established procedures. Here, the arrestees were apparently required to obtain an arresting officer's signature on a form, and the officer could refuse arbitrarily. This does not comply with due process requirements – and cannot be corrected with a simple post-deprivation remedy. As an aside, the Court noted that the significant amount of money and number of arrestees unable to reclaim their property are indications that the policy is suspect. Finally, the Court affirmed the district court's dismissal of the restitution claims. Those claims sought nothing more than a return of the plaintiff's property. The City's tender of the full amount of the claim is sufficient to make the plaintiff whole.

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MCCANN v. IROQOUIS MEMORIAL HOSPITAL (September 13, 2010)

Valerie McCann was forced out of her job as director of physicians' services at Iroquois Memorial Hospital in early February of 2006, most likely as part of a reorganization spearheaded by a new CEO. She was not happy. Dr. Leslie Lindberg provided radiology services to the Hospital. He also disapproved of the new administration and feared that the reorganization could put his opportunities at risk as well. McCann paid a visit to Dr. Lindberg at the Hospital later in February on unrelated business. At some point, the conversation turned to the subject of the Hospital. They were both critical of the Hospital, the CEO, and the Trustees. Unbeknownst to them, much of the conversation was recorded on Lindberg's dictation machine. Susan Freed, who oversaw the staff that transcribed dictated notes, learned of the conversation. She had it transcribed and she turned it over to the CEO. The CEO informed the trustees and provided the transcript to one of them. McCann and Lindberg brought suit against Freed, the CEO, the Hospital, and the trustees. They asserted claims under the Federal Wiretap Act as well as state law. Plaintiffs' theory is that Freed, while collecting some papers from Lindberg's office during his conversation with McCann, surreptitiously turned on his dictation machine to record the conversation. Freed denied doing so. Defendants’ theory is that Lindberg forgot to turn the machine off when McCann arrived. Judge Baker (C.D. Ill.) granted summary judgment to the defendants. McCann and Lindberg appeal.

In their opinion, Judges Flaum, Manion, and Rovner affirmed with respect to the CEO and the trustees but vacated and remanded with respect to the Hospital and Freed. The Court first addressed defendants' argument that it should not consider the McCann and Lindberg affidavits submitted in response to the summary judgment motion because they contradicted earlier testimony about the date of the conversation. The Court conceded that such a rule exists but cautioned that it does not apply when sufficient reasons are provided for any discrepancies. First of all, the Court thought the date to be immaterial. Second, and more important, the changes are easily explained here. The plaintiffs were originally mistaken about the date of the recorded conversation. Information that became readily available only after the complaint was filed (the timestamp on the recording, cell phone records, and canceled checks) all confirmed that the conversation took place on February 24 -- not February 10, as the plaintiffs originally believed. On the merits, the Court addressed the elements of the Wiretap Act claims. The Act prohibits intentionally "intercepting" a conversation or using or disclosing the contents of an interception, knowing that it was unlawful. The Court concluded that there were genuine issues of material fact when all facts and inferences were drawn in plaintiffs' favor. Even if one side's version of the facts or theory is more believable, summary judgment is not the stage to weigh evidence or make credibility determinations. The claims against Freed and the Hospital can proceed. On the other hand, the record contains no evidence on which to base the CEO’s or the trustees’ liability. The only allegation against the CEO is that he used or disclosed the interception -- but that Act requires that he do so with the knowledge that the interception was unlawful. The record does not support such a conclusion. With respect to the trustees, the only allegation is that one of them knew the interception was illegal -- but not that he used or disclosed the information. Even if true, his knowledge would not amount to a violation of the Act.

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SHLAHTICHMAN v. 1-800 CONTACTS (AUGUST 10, 2010)

In June of 2009, Eduard Shlahtichman purchased contact lenses from defendant 1-800 Contacts using the Internet. Shlahtichman used his credit card for the purchase. The company sent him an e-mail confirming his purchase. The e-mail contained the expiration date of his credit card. Shlahtichman brought suit pursuant to the Fair and Accurate Credit Transactions Act of 2003 ("FACTA"). FACTA prohibits a merchant from "print[ing]" a credit card expiration date on a receipt "provided to the cardholder at the point of the sale." That restriction applies only to electronically printed receipts. Judge Darrah (N.D. Ill.) dismissed the suit on two grounds: that an e-mail order confirmation does not constitute printing and that an e-mail order confirmation is not provided "at the point of the sale." Shlahtichman appeals.

In their opinion, Judges Bauer, Rovner, and Hamilton affirmed. Much of the appeal centers on the meaning of the word "print." Since it is not defined in the statute, the Court looked to its ordinary meaning. Although recognizing that a minority of courts have extended its meaning to computer displayed receipts, the Court concluded that the Act applies only to paper receipts. It relied on dictionary definitions, the overall context and content of the Act, the ready application of such an approach to face-to-face transactions versus a host of questions in the computer context, Congress' determination of the effective date of the Act using the year the printing device was first put into use, and the lack of any reference to Internet or e-mail in the Act in light of Congress' many such references in other statutes. Alternatively, the Court noted that dismissal was proper because Shlahtichman alleged no actual injury, statutory damages are available only for willful violations, and 1-800 Contacts' interpretation of the statute was reasonable, even if wrong, and could not support a finding of willfulness.

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URNIKIS-NEGRO v. AMERICAN FAMILY PROPERTY SERVICES (August 4, 2010)

Todd Lash owned American Family Property Services, a real estate appraisal firm. Although Lash was the only certified appraiser at the firm, he worked with associate appraisers, both independent and employed by the firm. In mid-2004, Lash hired Brenda Urnikis-Negro to help him review appraisal reports. Urnikis-Negro was hired at an annual salary of $52,000 with an understanding that her hours would probably fluctuate and not be limited to a 40-hour week. Urnikis-Negro's work at the firm turned out to be fundamentally clerical in nature and did not involve the exercise of judgment or discretion. Although no one kept track of her actual hours, the firm was very busy in 2004 and 2005 and Urnikis-Negro worked in excess of 40 hours per week. By the end of 2005, business was off and Urnikis-Negro was fired. She filed suit against the firm seeking overtime compensation pursuant to the Fair Labor Standards Act ("FLSA") and the Illinois Minimum Wage Law. After a bench trial, Judge Kennelly (N.D. Ill.) found that Urnikis-Negro's position was not exempt as an "administrative" position and that she was therefore entitled to overtime compensation. He also made a finding of willfulness which allowed Urnikis-Negro to recover overtime for the entire period of her employment. In calculating the amount of her overtime compensation, however, the district court rejected Urnikis-Negro's position that she should be treated as earning $1000 per 40-hour week. Instead, the court made its calculations based on an assumption that her fixed $1000 per week salary was her regular hourly rate compensation for every hour worked in each week. The court also made findings with respect to the totals hours worked during four different time periods of her employment. For each hour of overtime during her employment, the court awarded half of her hourly rate that applied during that period. Her total overtime compensation came to just over $12,000. The court awarded liquidated damages in an equal amount as well as attorney's fees. Urnikis-Negro appeals the calculation.

In their opinion, Judges Bauer, Rovner, and Williams affirmed. The Court first took exception to the district court's application of the fluctuating workweek ("FWW") method of calculating Urnikis-Negro's rate of pay. The FWW method is set forth in a rule promulgated by the Department of Labor. Under that method, an employee's rate of pay is derived by dividing the weekly wage by the total number of hours worked. If an employee works more than 40 hours per week, the method results in a lower hourly wage rate for the employee. Several aspects of the application of the FWW bothered the Court. First, the rule is a forward looking rule that provides a methodology for an employer to comply with the overtime obligations imposed by statute. Second, it is not remedial in nature. Third, it requires an understanding between the employer and employee that the fixed weekly wage is meant to cover regular pay for all hours worked. The Court noted a difference of opinion among the courts in the propriety of using the FWW method in calculating a remedy in an overtime case. The Court found the reasoning of the courts that have rejected the rule to be more persuasive. Having rejected the application of the Department of Labor rule adopting the FWW method, the Court nevertheless approved of the application of the same method based on the Supreme Court's decision in Missel. In Missel, the Supreme Court addressed the situation in which an employee was paid a fixed sum for any and all hours worked, worked substantial overtime, and was not compensated for that overtime. The correct approach in that situation is to calculate a rate of pay by dividing the weekly wage by the hours worked. The employee is entitled to an overtime premium for overtime hours of one half the hourly rate. The result is thus the same as the application of the FWW.

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KENSETH v. DEAN HEALTH PLAN (June 28, 2010)

In 1987, Deborah Kenseth decided to do something about her serious weight problem. She underwent a surgical procedure known as vertical banded gastroplasty (“VBG”) and shed 120 pounds. Kenseth joined Highsmith, Inc., a library furniture and supply distributor, in 1996. Kenseth elected to participate in the Dean Health Plan through her employer. The plan did not cover surgical treatment for gross obesity such as VBG. It also generally excluded any services "related to" a non-covered service. Several years later, Kenseth began to experience complications arising from the VBG. In 2004, she had a surgical procedure to address one of those complications. Notwithstanding the plan language, Dean paid for the procedure. The procedure, however, was not totally successful. Her physician recommended a gastric bypass procedure as a long-term solution to her situation. After the surgery was scheduled, the physician's office provided standard instructions to Kenseth. Included in the instructions was a direction to call her insurance company to check on coverage. Kenseth did just that. Kenseth described the procedure to the Dean customer service agent as one dealing with the "bottom of the esophagus." She did not disclose, she says unintentionally, that the procedure was related to her 1987 VBG surgery. The plan representative told her that the procedure would be covered. The day after the surgery, Dean made its initial decision to deny coverage. Its rationale was that the procedure addressed a complication arising from, and therefore related to, the VBG, a non-covered service. Kenseth unsuccessfully challenged Dean's decision internally. She then brought suit under ERISA and state law. She asserted that: a) Dean breached its fiduciary obligation because the plan was unclear both as to coverage and as to how she could determine coverage and because Dean failed to provide a pre-approval authorization procedure, b) Dean was collaterally estopped from denying benefits because of the representative's "approval," and c) Dean violated Wisconsin law on an insurer's ability to deny coverage for pre-existing conditions. Judge Crabb (W.D. Wis.) granted summary judgment to Dean on all counts. Kenseth appeals.

In their opinion (as amended), Judges Manion, Rovner, and Tinder affirmed in part, vacated in part, and remanded. First, the Court affirmed summary judgment on collateral estoppel. Kenseth failed to advise the Dean customer service agent of the connection between the procedure and her earlier surgery, even if unintentionally. Equitable estoppel should not be applied when the party being estopped is unaware of a material fact. Second, the Court also affirmed with respect to the state statutory argument. The Wisconsin statute deals with pre-existing conditions. The exclusion on which Dean relies focuses on the nature of the benefit, not whether it was pre-existing. Third, the Court addressed the breach of fiduciary duty claim. Such a claim requires a plan fiduciary, a breach, and harm. Dean is a plan fiduciary, not because it is the customer service agent's employer, but because it is a claims administrator with discretionary authority to assess a plan participant's entitlement to benefits. Thus, it owes the plan participants duties of loyalty and reasonable care. One core duty to beneficiaries is the duty to disclose all material information. That duty has a negative component (not to mislead or misrepresent) but also has an affirmative component (to communicate material facts). Here, on the record before the Court, it concluded that a fact finder could determine the Dean had a duty to a) advise callers to its customer service line that they were not entitled to rely on any advice recieved, and b) inform callers how to obtain a binding determination of coverage. Dean could have avoided that liability by providing plan beneficiaries with a clear and unambiguous statement of benefits. Although the Court concluded that Dean's statement of benefits was clear that a procedure like the VBG was not covered, it concluded that the "related to" exclusion was not clear. In addition to the fact that the language itself was not clear, the Court also referred to the fact that Dean had already paid for a procedure to address a complication of the original surgery. Finally, the Court had no difficulty in finding an injury caused by Dean's breach of its fiduciary duty. Having found a breach and an injury, the Court turned to the remedy. It emphasized that Kenseth's claim was not a denial of benefits claim under section 1132(a)(1)(B) nor was it a representative action under section 1109 (a). Instead, it was an individual action under section 1132 (a)(3). But that section allows only equitable relief, not damages. The Court remanded to allow Kenseth an opportunity to identify, if possible, an appropriate form of equitable relief.

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PARRA v. NEAL (June 23, 2010)

Ambrosio Medrano filed the necessary papers to get his name listed as a candidate for 25th Ward Chicago alderman on the February 2007 ballot. Several voters challenged his papers. They asserted that his prior felony conviction prevented him from holding office. The Election Board and the circuit court sided with Medrano. Paper and electronic ballots were prepared with his name. Just four days before the election, the Illinois Supreme Court reversed the circuit court. It ordered the Election Board to either remove Medrano’s name from the ballot or, if it remained, to disregard any votes cast for him. The Election Board had insufficient time to correct the ballots. Instead, it posted signs in three languages at all polling places and distributed individual notices to every voter in the ward in which his name was on the ballot. The signs and notices explained that a vote for Medrano would not be counted. Nevertheless, Medrano received 178 votes. Eight of those voters brought an action pursuant to § 1983 claiming that the Election Board violated equal protection by disregarding their votes. Judge Darrah (N.D. Ill.) granted summary judgment to defendants. Plaintiffs appeal.

In their opinion, Judges Manion, Rovner, and Tinder affirmed. The Court emphasized the reluctance of a federal court to become entangled in state election matters. A § 1983 action can therefore prevail only if the defendants acted willfully and intended to undermine the voting process or impair the plaintiffs' voting rights. The Court found no proof -- or even allegation -- of wrongdoing on the part of the Election Board. In fact, it did what it had to do by following the mandate of the Supreme Court.

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EVERROAD v. SCOTT TRUCK SYSTEMS (May 10, 2010)

David Scott owned and operated Scott Truck Systems, a commercial trucking company. Sherry Hantzis, his wife, was its general manager. In 2004, on Hantzis’ recommendation, Scott hired 51-year-old Diana Everroad as a dispatcher. Things did not go very well -- her supervisor complained, two large customers complained, and she had several run-ins with her coworkers. On the other hand, she was the target of several gender-based derogatory comments from those coworkers, one of which came during a conversation she secretly recorded. Within months, Scott and Hantzis created a new job for Everroad as a "data administrator." The hours and the pay were identical to her dispatcher job, but she had to share an office. Her officemate had a habit of making lengthy personal phone calls. Everroad’s complaints resulted in a meeting with Scott, Hantzis, and the officemate in an attempt to resolve the conflict. The meeting lasted a long time and became very tense. Everroad again secretly recorded much of the meeting. There was shouting, crying, eye-rolling, and accusations -- but the meeting did end with some constructive proposals. Scott and Hantzis were upset with Everroad's conduct during the meeting and considered it insubordinate. They were still considering their options when, upon arrival at the office the next morning, Everroad ignored Hantzis' greeting and overreacted to Scott's greeting. Scott terminated her employment at the end of that workday. Everroad sued Scott Truck for gender discrimination and retaliation under Title VII and for age discrimination and retaliation under the Age Discrimination in Employment Act (ADEA). The district court granted summary judgment to Scott Truck. Everroad appeals.

In their opinion, Chief Judge Easterbrook and Judges Bauer and Rovner affirmed. The Court first rejected Everroad's complaint that the district court erred in refusing to consider the transcripts of her secretly recorded conversations. First, Everroad never actually submitted the tapes themselves, only the transcripts. Second, the Court found the transcripts demonstrated that the conversations were, in large part, incomprehensible. Addressing the merits, the Court accepted as fact that Everroad could establish that she was a member of a protected class and that she suffered an adverse employment action for both the gender and age discrimination claims. The Court nonetheless rejected her discrimination claims: a) because of her insubordination, she was unable to meet the job performance prong of the test and she was unable to identify a similarly situated employee (i.e., another insubordinate employee), and b) she was unable to present evidence undermining the sincerity of Scott's nondiscriminatory reason for terminating her (her insubordination). The Court also rejected her retaliation claims: a) her claim that she was transferred because of her complaints about some derogatory comments fails because she never raised it in the district court, the transfer was not an adverse employment action, and there was no evidence that she complained to Scott or Hantzis, and b) her claim that she was terminated for complaining about a different derogatory remark fails because the remark was made a year prior to her termination and she presented no evidence establishing a causal connection between the two.

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KODISH v. OAKBROOK TERRACE FIRE PROTECTION DISTRICT (May 10, 2010)

Brian Kodish began work as a full-time firefighter and paramedic for Oakbrook Terrace in June of 2003. The Illinois Fire Protection Act prohibits the termination of a firefighter without just cause after the firefighter has "held that position for one year." In March of 2004, Kodish went on leave for a knee surgery. While he was out, he received a letter indicating that the District was going to extend his 12-month probationary period for 90 days. Although the evaluations he had received in his first nine months contained some positive remarks, Kodish was evaluated as "fair" in most categories. He was criticized for a lack of motivation, poor communication skills, and an inability to follow authority. Kodish returned from leave on July 24. On August 11, the District Board decided to terminate his employment. He filed suit against the District under § 1983, alleging a violation of his due process rights. He also alleged that he was fired in retaliation for speaking out on union issues. The district court granted summary judgment to the defendants. Kodish appeals.

In their opinion, Chief Judge Easterbrook and Judges Ripple and Rovner reversed. The Court first addressed the existence of a property right, a prerequisite for the federal due process claim. Of course, Kodish had passed his one-year anniversary before he was fired -- but, because of his four-month leave, he only actually worked a little over ten months. The Court looked to Illinois law to determine whether Kodish was protected. No Illinois court has interpreted the "held that position" language of the Act. The Court looked to Illinois decisions with respect to analogous statutes and concluded that the Illinois Supreme Court would read the plain language of the Act to impose a simple twelve-month employment requirement for the creation of the property interest. The Court rejected defendants' other arguments based on the Illinois Municipal Code and the District’s own Wage and Benefit Policy as either in applicable (in the case of the Code) or not controlling (in the case of the Policy) -- and reversed the district court's conclusion that Kodish had no property interest in continued employment. The Court then addressed Kodish's First Amendment claim. It quickly concluded that Kodish met two of the three requirements of the claim -- that the speech was protected speech and that he suffered a deprivation. In addressing the third requirement -- whether he would have been terminated but for his speech -- the Court reviewed his mixed employment evaluations as well as the evidence of the fire chief's opinion of Kodish's speech. The Court disagreed with the district court's conclusion that the only reasonable conclusion for his discharge was his employment record. Although the Court found that theory "plausible," it also found the alternate theory -- that he was fired for his speech -- one that a reasonable jury could adopt. In concluding that the First Amendment claim should have survived summary judgment, the Court also concluded that Kodish presented sufficient evidence that the fire chief's animus should be attributed to the District under either the "singular influence" or the "motivating factor" test.

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HELCHER v. DEARBORN COUNTY (February 9, 2010)

Cincinnati Bell Wireless provides wireless services to, among others, the people of Dearborn County, Indiana. In order to improve signal coverage in the area, Cincinnati Bell decided it needed a new cell phone tower. It selected a piece of agriculturally zoned property for the tower and applied for a conditional use permit. The company worked with two consultants to the local Zoning Board in completing its application. The consultants recommended that the granting of the permit, although it was the first time they had recommended the construction of a new tower over the co-location of transmitters onto existing structures. The Board met and heard from the consultants, Bell, and a number of local landowners who opposed the tower. The Board denied the application. At a later meeting, the Board denied Bell's request to reconsider the denial and approved the minutes of the earlier meeting. Bell sued the Board, alleging several violations of the Telecommunications Act of 1996. Specifically, Bell alleged that the decision was not based on substantial evidence, that the Board minutes did not constitute a sufficient written decision, that the Board unreasonably discriminated against Bell, and that the decision effectively denied wireless services. The district court granted summary judgment to the defendants. Bell appeals.

In their opinion, Judges Flaum, Rovner, and Wood affirmed. Bell raised the same four arguments. The Court started with the "in writing" requirement of the Telecommunications Act, a question of first impression in the Seventh Circuit. Other circuits' holdings range from allowing a "Denied" stamp on an application to demanding detailed conclusions linked to specific evidence. Noting that the purpose of the requirement is to ensure meaningful judicial review, the Court joined several other circuits in concluding that the requirement is met if there is a sufficient explanation of the Board's reasons to allow a court to evaluate the supporting evidence. Here, the "writing" is the seventeen pages of minutes. The Court concluded that they were sufficient under the Act. They described the issues, the evidence presented by both sides, the concerns of the Board, and the specific Ordinance provisions on which the Board based its denial. On the Court’s review of Bell’s argument that the denial was not supported by substantial evidence, it considered each of the three Ordinance provisions separately. Although the Court found the evidence in support of one of the Ordinance violations thin, it concluded that the other two were supported by substantial evidence. Finally, the Court rejected the “effectively prohibit” and “unreasonably discriminates” arguments. On the former, Bell failed to show that alternatives did not exist. On the latter, Bell presented no evidence of another carrier that was treated more favorably.

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SERWATKA v. ROCKWELL AUTOMATION, INC. (January 15, 2010)

Kathleen Serwatka was an employee of Rockwell Automation. Upon her discharge, she brought suit under the Americans with Disabilities Act (ADA). She alleged that she was discharged because her employer considered her to be disabled. At trial, the jury indicated its belief on a special verdict form that a) Rockwell terminated Serwatka because it believed her to be disabled and b) that Rockwell would have fired her anyway. Treating the verdict as a mixed-motive finding, the court awarded no damages but did grant declaratory and injunctive relief and awarded attorneys fees. Rockwell appeals.

In their opinion, Judges Rovner, Evans, and Van Bokkelen vacated and remanded. The Court began its analysis with the Supreme Court's decision in Price Waterhouse. In that case, the Supreme Court held the an employer could violate Title VII even if an improper motive was not the only motive for a termination decision. It also held, however, that an employer would escape liability if it could prove that it would have made the same decision in the absence of the improper motive. Courts applied that Title VII decision to other anti-discrimination statutes. A few years later, Congress codified the Price Waterhouse holding that an improper motive need not be the only motive for a plaintiff to recover. It provided limited remedies, not an absence of liability, in the situation where the employer proves that it would have made the same decision in the absence of the improper motive. Specifically, it allowed for declaratory relief, injunctive relief, and attorneys fees. The ADA incorporates by reference the mixed-motive remedy provisions of Title VII. It was on this basis that the district court fashioned its relief. While the case was on appeal, however, the Supreme Court issued its opinion in Gross. In Gross, the Supreme Court held, notwithstanding Price Waterhouse, that mixed-motive claims were not allowed under the Age Discrimination in Employment Act (ADEA). The Supreme Court concluded that Congress' decision to specifically incorporate the Price Waterhouse approach into Title VII and not to incorporate it into ADEA indicated its intent not to authorize mixed-motive claims under that statute. The "because of" language of the statute therefore required "but for" causation. Like ADEA, the ADA does not include an expressed mixed-motive provision and it uses the same "because of" language. The Court therefore concluded that an ADA plaintiff must establish that the employer would not have fired her absent the improper motive. The special verdict form below indicates that Serwatka failed to do so. The Court vacated and remanded with instructions to enter judgment in Rockwell's favor.

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BRUNKER v. SCHWAN'S HOME SERVICE (October 22, 2009)

Frank Brunker was employed as a Route Manager for Schwan's Home Service, a home-delivery food service company. Brunker sold and delivered the company's products to its customers. Beginning in early 2003, Brunker began experiencing shaking, dizziness, headaches, etc. -- later to be diagnosed as multiple sclerosis. On his doctor's advice, he took two months disability leave, returned to light duty for one month, and then returned to unrestricted work. Several months later, he decided to take some time off for additional tests and evaluation. Around that time, he was disciplined on several occasions for failure to run a route, failure to adhere to a dress code, and writing a check with insufficient funds. When Brunker returned with his diagnosis of multiple sclerosis, the company fired him for unsatisfactory performance, but backdated his termination to the day before he left. Brunker brought suit under the Americans with Disabilities Act. The court granted summary judgment to Schwan's. Brunker appeals.

In their opinion, Judges Cudahy, Flaum and Rovner affirmed in part, vacated and reversed in part and remanded. On the merits, the Court first addressed the issue of whether Brunker created a genuine issue of fact as to whether he was "disabled." Under the ADA, one is "disabled" if one has an impairment which substantially limits a major life activity -- or if one is regarded as having such an impairment. The Court agreed with the district court that Brunker failed to show a substantial limitation on a major life activity -- the evidence showed only an intermittent or occasional impairment. However, the Court concluded that the evidence, including the discipline and the backdating of his termination, was sufficient to show that Schwan's regarded Brunker as disabled. Thus, the Court remanded the discrimination claim for additional proceedings. The dismissal of the failure to accommodate claim, however, was affirmed by the Court. The Court found no issue of fact with respect to Schwan's offering of an accommodation. The Court also resolved numerous discovery and sanction disputes.

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GUNVILLE v. WALKER (October 9, 2009)

Robert Gunville and Richard Oakley had both worked for the Illinois Department of Corrections for over twenty years, all during Republican administrations, when a Democratic governor was elected in 2003. Both were laid off within months of the new administration’s inauguration. Gunville was an active member of the Republican Party while Oakley had a record of voting in Republican primaries. Gunville and Oakley brought suit, alleging a violation of their First Amendment rights. They also allege a violation of their Fourteenth Amendment rights as a result of their placement on a reemployment list for only their last county of employment. The district court granted summary judgment to the defendants. Gunville and Oakley appeal.

In their opinion, Judges Manion, Rovner and Sykes affirmed. In first addressing their First Amendment claim, the Court noted that there was no dispute that their speech was constitutionally protected and that they suffered a deprivation. The issue on appeal was whether the layoff came as a result of their political affiliation. In order to establish the unlawful motivation, the plaintiffs must first establish that the defendants knew of their political affiliation. After concurring with the district court's hearsay ruling on one particular statement, the Court concluded that there was a complete absence of evidence that the persons deciding which jobs to eliminate knew of plaintiffs' political affiliations. The Court came to the same conclusion with respect to the Fourteenth Amendment claims. The due process clause does not provide an opportunity to challenge the meaning of a regulation, the relief plaintiffs sought. To the extent that plaintiffs assert political retaliation, the due process argument suffers from the same complete absence of evidence as the First Amendment claim.

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TIDWELL v. SMITH (September 23, 2009)

When Dr. Bruce Smith filed a bankruptcy petition in 2004, plaintiffs had separate lawsuits pending against him in state court. Smith listed neither of them on his creditors schedule, although he did list their attorney. That petition was dismissed, however, and a second petition filed a year later listed neither the plaintiffs nor their attorney. Plaintiffs' claims were potentially non-dischargeable because they were based on an alleged sexual assault. Plaintiffs never received notice of the petition. However, in late December, just a few weeks before the deadline for objecting to the discharge, Smith's lawyers in the state court cases filed motions asking for transfers to the bankruptcy calendar. The motions were received in plaintiffs' lawyer's office on December 23. He was out of town and did not actually see them until January 4 of the next year, five days before the deadline. The motions provided very little information about the bankruptcy, other than its filing. The deadline came and went. The bankruptcy court entered an order of discharge. Almost a year later, plaintiffs sought relief from the bankruptcy court. After taking testimony, the court concluded that plaintiffs could proceed against Smith in state court. In doing so, the court specifically found that the omission of plaintiffs from the schedule was deliberate and that the notice, albeit received before the final discharge, was too late. The district court affirmed the decision of the bankruptcy court. Smith appeals.

In their opinion, Judges Rovner and Evans and District Judge Van Bokkelen affirmed. The Court first declined to even consider Smith's challenge to the finding of deliberateness. The bankruptcy court declined to grant relief under section 727, which requires fraud. Instead, it granted relief under section 523, which only requires that the debt was unscheduled and the creditors did not have notice. With respect to the notice, the Court agreed that it was untimely. Notice must be reasonably calculated to inform an interested party of the action and provide a reasonable time to respond. Given the timing of the notice as well as its content, the Court concluded that the service of the state court motions was insufficient.

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

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

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

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

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

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

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COFFMAN v. INDIANAPOLIS FIRE DEPARTMENT (August 20, 2009)

Tonya Coffman worked as a firefighter in Indianapolis for a few years without incident. In 2003, however, several of her coworkers began to express concern about her ability to drive safely because of her height (she is less than 5 feet tall). The department conducted a series of safety evaluations, which she passed. The concerns continued -- another round of evaluations followed. Her coworkers’ concerns expanded beyond safe driving into issues concerning her mood and interactions with others. Eventually, the department recommended a fitness-for-duty evaluation and a transfer to limited-duty status. The evaluation resulted in an individual therapy referral and more fitness evaluations. After one of those evaluations, she was approved for light duty and eventually returned to full active duty. Coffman sued the department and several individuals under Title VII. She alleged that the driving tests and fitness evaluations were gender discrimination and harassment. She also brought a claim alleging that the medical examinations violated the ADA. The district court granted summary judgment against Coffman on all claims. Coffman appeals.

In their opinion, Chief Judge Easterbrook and Judges Posner and Rovner affirmed. The Court first addressed her Title VII claim under the direct method of proof. Coffman asserted that the record established a "convincing mosaic" of evidence from which a jury could conclude that she was the victim of gender discrimination. To the contrary, the Court found an absence of any evidence in the record that the driving evaluations, the fitness evaluations or her reassignments occurred, even in part, because of her gender. Her failure to do so illustrates the correctness of the district court summary judgment ruling. On her hostile work environment claim, the court concluded that the conduct of the department did not amount to degrading or hostile behavior. In fact, the Court noted that much of the conduct she complains of was accompanied by offers of support and guidance. In addition, as with the discrimination claim, Coffman failed to create a causal link between the alleged hostile behavior and her gender. With respect to the ADA claim, the Court noted that the statute prohibits a covered employer from requiring a medical examination unless it is shown to be job related and a business necessity. Based on the special work environment of a fire department and its responsibility to the public at large, as well as the fact that the department experienced two suicides in the preceding months, the Court concluded that the examinations were consistent with the requirements of the statute.

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RAYBOURNE v. CIGNA LIFE INSURANCE COMPANY (August 6, 2009)

After 23 years on the job, Edward Raybourne went on long-term disability. He was about to have the first of four surgeries on the big toe of his right foot. His disability plan provided payments for 24 months upon a showing that he was unable to perform his regular job. After 24 months, he had to show that he was unable to perform any job in order to continue receiving benefits. After an independent medical examination concluded that Raybourne could return to work, Cigna terminated his long-term disability benefits. Raybourne's treating physician continued to state that he was unable to return to work. After his internal appeals were unsuccessful, Raybourne brought suit under ERISA. The district court granted summary judgment to Cigna, concluding that it had not abused its discretion. Raybourne appeals.

In their opinion, Judges Rovner, Wood and Williams vacated and remanded. An abuse of discretion standard, stated the Court, is appropriate when the plan administrator has discretionary authority. The Court found that Cigna had such authority, notwithstanding Raybourne's contention that the grant of discretion is not included in a plan document. Under that standard, an administrator's decision will be upheld as long as it is supported by evidence in the record and specific reasons are communicated to the claimant. Here, however, the Court noted that the Supreme Court released its opinion in Glenn just a few days before the district court's summary judgment decision. Glenn held that one factor in the abuse of discretion analysis is the structural conflict of interest when a plan administrator is both the arbiter of claims and the payor of successful claims. The Court concluded that the district court's passing reference to Glenn required a remand for a proper analysis of the structural conflict.

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CASNA v. CITY OF LOVES PARK (July 24, 2009)

From 1996 through 2003, Mary Casna worked for the City of Loves Park in two different positions. Though she had a serious hearing impairment, it did not interfere with her performance. In her second job, Casna and one of her superiors did not enjoy a good working relationship. The City transferred her to a temporary police clerk position for six months in order to evaluate her performance in a less volatile atmosphere. Casna's hearing impairment became an issue. In one particular episode, Casna explained to her supervisor, Kay Elliot, that she had not heard her make a request. Elliot snapped: "How can you work if you cannot hear?" Casna accused Elliot of being discriminatory. Elliot consulted with her supervisor and prepared a written performance evaluation, even though Casna was only two months into the job. At the police chief's request, and based on the negative evaluation, the Mayor fired Casna. Casna brought suit against the City, the Mayor and the Police Chief. She alleged that she was fired in retaliation for her complaints of discrimination. She also alleged that the City violated Due Process by discharging her without a hearing. The district court granted summary judgment to defendants. Casna appeals.

In their opinion, Judges Manion, Rovner and Sykes reversed and remanded. On the due process claim, the Court stated that Casna must establish a property interest that is guaranteed by the Constitution but found in Illinois law. Relying on Illinois’ civil service statute, the Court concluded that her first position was exempt but that her second job was not exempt (although the resolution appointing her said it was). Although the Court agreed that a temporary position (her third job) is normally exempt, the Court also concluded that the City could not transfer Casna out of a protected job into an unprotected job and then fire her without process. The Court also rejected the City’s reliance on the requirement that a protected employee obtain her job through the civil service process. Since it was the City that wrongfully tried to make the second position exempt, the Court held that it was estopped from relying on that requirement. Casna is entitled to prove her damages, if any, arising from the lack of process. The Court also reversed the lower court on the retaliation claim. It concluded that Casna’s single statement to Elliot complaining of discrimination, though informal, was sufficient to amount to “protected activity.” Finally, although the Court cautioned that suspicious timing is rarely enough to establish a triable issue on causation, it concluded that it did here, where the police chief recommended her termination the day after the protected activity.  

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CONSUMER PRODUCTS RESEARCH & DESIGN v. JENSEN (July 16, 2009)

Consumer Products Research & Design ("CPRD") holds a patent for a wireless smoke detector. CPRD entered into contracts with two companies owned, respectively, by a father and his son. One company, owned by the father, agreed to develop and market the product. The other, owned by the son, was responsible for its manufacturing. Unhappy with of the relationship, CPRD filed a complaint alleging fraudulent inducement and breach of contract. A jury awarded over $700,000 in damages. Defendants appeal.

In their opinion, Judges Cudahy, Flaum and Rovner affirmed. The Court rejected the defendants’ first argument, that the evidence was insufficient to support the verdict, because none of the defendants filed a motion for judgment as a matter of law after the verdict. The defendants did move for judgment as a matter of law under Rule 50 (a) after the liability phase of the bifurcated trial. The Court held, however, that a party's failure to comply with Rule 50 (b) after the verdict forfeits any claim on appeal challenging the sufficiency of the evidence. The Court also rejected defendants’ jury instruction argument. The defendants accepted the jury instructions without complaint in the court below and forfeited their objection. 

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GICLA v. UNITED STATES (July 15, 2009)

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

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

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UNITED STATES v. HERNANDEZ-ARENADO (July 6, 2009)

Pablo Hernandez-Arenado (Hernandez) was awarded immigration parole when he came to the United States from Cuba as part of the Mariel Boatlift. Four years later, Hernandez pled guilty to the sexual assault of a young boy and was sentenced to five years in state prison. He admitted to several hundred similar episodes. The Immigration and Naturalization Service (“INS”) revoked his parole and placed him in a Bureau of Prisons (“BOP”) facility after his release from state prison, pending deportation. Hernandez filed a petition for a writ of habeas corpus after 20 years in custody, after the Supreme Court ruled that the statute under which Hernandez was being held only allowed a reasonable period of custody pending removal. The petition was granted and his release was ordered. Before Hernandez was released, the government sought to civilly commit him as a sexually dangerous person pursuant to the Adam Walsh Act. The district court denied the petition, holding that the Adam Walsh Act applied only to individuals "in the custody of" the BOP and that Hernandez was in fact in the custody of Immigration and Customs Enforcement (“ICE”), the successor agency to INS. The government appeals.

In their opinion, Judges Ripple, Rovner and Evans affirmed. The Court stated that the Supreme Court has recognized different meanings for the word "custody" in different contexts. Here, for example, the BOP has physical custody of Hernandez but the ICE has legal custody. The Court went on to say that the Bureau of Persons has physical custody of many persons for whom it does not have legal custody and, in fact, has legal custody of many persons over whom it does not have physical custody. The Court did not believe that the applicability of the Act should turn on a factor, like physical custody, that is random and manipulable. Even the government refused to suggest a standard test for determining custody, and does not believe that every person in its physical custody is subject to the Act. The Court insisted on giving the term a meaning that applied beyond the narrow facts of the case. It rejected a physical custody trigger and instead adopted the interpretation that the Act applied to all federal offenders, whether they were in the physical custody of the Bureau of Prisons or not, but not to persons in the physical control of the BOP simply as a service to another agency.

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

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

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

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DEBARTOLO v. HEALTHSOUTH CORPORATION (June 26, 2009)

Hansel DeBartolo was a surgeon and a limited partner in a surgical center in Joliet. The partnership agreement required DeBartolo to certify each year that he earned at least one third of his medical income from Medicare-approved procedures and he performed at least one third of those procedures at the surgical center in Joliet. The purpose of the certification was to qualify for a "safe harbor" in the Anti-Kickback Act, an act that makes criminal certain referral payments to physicians. When DeBartolo was unable to meet his certification obligations, the general partner exercised the contractual right to buy his interest. DeBartolo initiated an action for declaratory relief, claiming that the certification requirements of the partnership agreement violated the Anti-Kickback Act and, thus, were unenforceable. The district court dismissed for failure to state a claim. DeBartolo appeals.

In their opinion, Chief Judge Easterbrook and Judges Ripple and Rovner vacated and remanded. Although both parties agreed that the district court had jurisdiction, the Court engaged in its own jurisdiction analysis. Section 1331 grants the power to hear matters "arising" under federal law. Here, DeBartolo cites the Anti-Kickback Act as a defense to an anticipated contract claim of the defendant. But, the Court said, a federal defense does not satisfy the "arising under" requirement of section 1331. When a party brings an action under the Declaratory Judgment Act, he must establish that the defendants have a claim "arising under" federal law. The Court vacated the dismissal order of the district court and remanded with instructions to dismiss for lack of jurisdiction.

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HALLINAN v. FRATERNAL ORDER OF POLICE OF CHICAGO LODGE NO. 7 (June 25, 2009)

Shawn Hallinan and Wayne Harej were Chicago police officers and members of the police union, the Fraternal Order of Police of Chicago Lodge No. 7 (the Union). They led an effort to unseat the Union’s president and his organization in early 2005. During the course of the campaign, they discovered that the president had underreported his income. They reported the matter to the Attorney General and discussed it publicly. The president was, nevertheless, reelected. The Union soon suspended, and then expelled, the two men from the Union. At the Union's request, the City of Chicago converted the two men into "fair-share payers." Fair-share payers are those members of the Police Department who are not Union members and do not pay Union membership dues but who contribute a "fair-share" for the Union's continued representation of them in matters concerning their wages, hours and working conditions. Hallinan and Harej brought an action against the Union under section 1983 alleging violations of the First and Fourteenth Amendments. The court dismissed the action for plaintiffs’ failure to plead state action. Plaintiffs appeal.

In their opinion, Judges Rovner, Wood and Sykes affirmed. The allegations of constitutional violations in the complaint, noted the Court, are actionable only against conduct of the government -- not against private conduct. Unions, of course, are not government actors. A deprivation of a constitutional right may be actionable against a private actor in certain limited circumstances. The Court noted several examples: when the state compels the action, when the private actor is only nominally private, when the state delegates its function to a private actor, etc. Here, the state action alleged is that the Union is the sole collective bargaining unit for the Chicago Police. However, the acts complained of were not taken in concert or in agreement with the City. They were exclusively internal actions. The Court concluded that there was not enough evidence of entanglement by the City to give rise to state action. Although the Court agreed with the district court that the claim should be dismissed for failure to allege state action, it corrected the district court’s categorization of it as a lack of subject matter jurisdiction. An absence of a proper allegation of state action is simply a failure to plead an essential element of the claim.

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HARP v. CHARTER COMMUNICATIONS, INC. (March 16, 2009)

Mary Harp was a supervisor in the audit department at Charter Communications, Inc. ("Charter"). She was responsible for ensuring that Charter’s outside contractors performed the services for which they were retained. In early 2004, she concluded that one of Charter’s outside contractors sought payment for services it did not perform. Harp was unhappy with the way Charter treated the situation. She complained to the company that her direct supervisor violated the company's ethics code by authorizing full payment to the contractor. Shortly thereafter, the entire audit department was eliminated as part of a reduction in force. Harp brought an action against Charter under the Sarbanes-Oxley Act, alleging that her termination was in retaliation for her whistle-blowing. The district court granted summary judgment to Charter. Harp appeals.

In their opinion, Judges Ripple and Rovner affirmed (Tinder dissenting). In order to prevail, the Court noted that Harp had to prove a) that she engaged in protected activity, b) that Charter knew she was engaged in protected activity, c) that she suffered an unfavorable personnel action, and d) that the protected activity was a contributing factor in the personnel action. In order to meet the “protected activity” element, Harp must have actually believed that her supervisor’s conduct was unlawful and her belief must have been reasonable. The Court concluded that Harp's allegation that her supervisor authorized full payment to a contractor for services not performed had no subjective or objective basis for belief. The Court noted that Harp relied on conversations with a coworker in coming to her conclusion and that her own conduct was inconsistent with the belief. Thus, Harp was unable to establish even the first element of the test. The Court added that her claim would fail even if she met that element. The fact that the entire department was eliminated as part of a reduction in force would prevent her from establishing that her complaint was a contributing factor in her termination.

Judge Tinder dissented. Judge Tinder agreed with the legal test laid out in the majority opinion but disagreed with the majority's analysis and application of the facts to the law. He believed that Harp had a subjective belief that the company was a victim of fraud at the time she submitted her complaint and that her complaint could be reconciled with her deposition testimony. He also thought the circumstances behind the reduction in force were questionable enough to allow Harp to proceed with her complaint. For example, Charter argued that the reduction in force was necessary to save $800,000 a month -- yet the salaries of the entire department amounted to less than $200,000 per month. Also, Harp's severance form indicated that she would not be eligible for rehire -- a fact Judge Tinder thought atypical of a reduction in force. Finally, Charter began rehiring for the audit department within two months of the reduction. Judge Tinder thought that Harp had presented enough evidence to allow her claim to go to the jury.

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CLEAR CHANNEL OUTDOOR, INC. v. INTERNATIONAL UNIONS OF PAINTERS AND ALLIED TRADES (March 12, 2009)

Clear Channel Outdoor ("CCO ") owns and maintains hundreds of billboards in and around Milwaukee. Patrick Rogney was a CCO crew chief. In April of 2003, Rogney was working with a crew on a billboard in Milwaukee. They were on a platform about 18 feet off the ground. At some point, he disconnected his safety harness from the cable. A company official, conducting a field inspection, observed Rogney at work without the connected harness. After observing for about eight minutes, he notified the operations manager by phone. CCO suspended Rogney that afternoon, and later discharged him. The union filed a grievance, alleging that the termination was without good cause. Pursuant to the collective bargaining agreement, the parties submitted the matter to an arbitrator. After an evidentiary hearing, the arbitrator determined that Rogney's discharge was without just cause and that an appropriate penalty was a six-month suspension without pay. The arbitrator interpreted "just cause" to require CCO to not only consider whether an offense allowing termination was committed but also to consider whether termination was warranted under the circumstances. CCO brought an action to vacate the arbitrator's award. The district court confirmed the arbitrator's decision. CCO appeals.

In their opinion, Judges Rovner, Wood and Williams affirmed. The Court emphasized its limited role in reviewing a labor arbitrator's decision -- only to determine whether the arbitrator exceeded the powers delegated to him. Here, the Court looked to whether the arbitrator's decision had a plausible foundation in the terms of the collective bargaining agreement. The Court noted that it did not necessarily agree with the arbitrator's construction of the contract. In fact, the collective bargaining agreement gave CCO discretion to fire an employee for a violation of the very safety rule that Rogney violated. Nevertheless, the Court concluded that the arbitrator "without question" interpreted the agreement. Since his decision drew its essence from the agreement, the Court let it stand and affirmed the district court.

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UNITED AIR LINES, INC. v. AIR LINE PILOTS ASSOCIATION (March 9, 2009)

United Air Lines, Inc. ("United") and the Air Line Pilots Association ("ALPA"), the collective bargaining representative for the pilots, have a long and contentious history of labor negotiations. The events of September 11, 2001 put additional pressure on that relationship. Their current collective bargaining agreement was negotiated in 2003 and amended in 2004 and 2005. In late 2006, ALPA attempted to reopen contract negotiations. According to United, ALPA took a number of coordinated measures in an attempt to pressure United. United sued ALPA in July of 2008 under Section 2, First of the Railway Labor Act (“RLA”). Shortly thereafter, ALPA agreed to direct its members not to engage in the disruptive activities. The district court, after an evidentiary hearing, granted United's request for a preliminary injunction. ALPA appeals.

In their opinion, Judges Rovner, Wood and Sykes affirmed. The Court addressed the four main issues on appeal: a) that the claim was barred by the six-month statute of limitations, b) that ALPA had made reasonable efforts under the RLA, c) that United failed to satisfy the requirements of Section 6 of the Norris-LaGuardia Act ("NLGA"), and d) that United failed to satisfy the requirements of Section 7 of the NLGA. With respect to the statute of limitations, the Court noted that the RLA borrows the six-month statute of limitations from the National Labor Relations Act. Although the court agreed that the conduct of ALPA began long before the suit was filed, it concluded that the action was not time-barred. ALPA engaged in unlawful action both before and during the six-month period and their actions created new injuries within the six-month period. The Court found no merit in ALPA'S argument that it made reasonable efforts to halt its members’ unlawful conduct. It relied on the district court's thorough findings of fact and accorded them substantial deference. With respect to the Section 6 requirement -- that United is required to prove that ALPA participated in or ratified the unlawful conduct -- the Court again relied heavily on the thorough findings of fact by the district court. It concluded that United’s statistical evidence, in combination with ALPA's coded communications, were sufficient to meet its burden. Finally, the Court rejected ALPA’s argument that the injunction was not necessary to prevent a violation of Section 2, First of the RLA. The Court conceded the general prohibition in the NLGA barring injunctions against labor unions, but noted an exception when there is a specific violation of a provision of the RLA. Even though ALPA had entered into an agreement to voluntarily cease its wrongful conduct, the district court found that it's conduct was inconsistent with its agreement. The Court concluded that the lower court was within its discretion to find that an injunction was the only way to ensure compliance with the RLA.

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MONDRY V. AMERICAN FAMILY MUTUAL INSURANCE COMPANY (March 5, 2009)

Sharon Mondry was an employee of American Family Mutual Insurance Company ("American Family") and participated in its health insurance plan. When her son needed speech therapy, she contacted the company to ascertain the extent of her benefits. After being referred to the Summary Plan Description ("SPD"), she enrolled her son in speech therapy in January 2003. In June 2003, CIGNA, the claims administrator, denied coverage. The letter indicated that the denial was based on CIGNA’s “Benefit Resource Tools guidelines” (“BRT”). The language used in the denial letter and the BRT was not consistent with the SPD, The SPD indicated that speech therapy is typically covered if performed by a certified therapist. Mondry began an effort that lasted over a year to get the documentation that was used by CIGNA to deny the coverage. For months, CIGNA and American Family either ignored or denied her requests. Mondry’s appeal of the denial was upheld in July of 2003. The letter upholding the denial again referenced a document that Mondry had never seen -- the Clinical Resource Tool (“CRT”). Mondry added the CRT to her document request. Her requests continued to go unanswered or denied. In September 2003, Mondry left her employment with American Family and elected not to continue her health coverage. She did continue her efforts to receive a complete set of plan documents and to reverse the denial of coverage. Mondry finally obtained copies of the CRT in July of 2004 in the BRT in October 2004. It became clear that the criteria contained in the CRT and the BRT were different from the criteria contained in the SPD. CIGNA reversed its position and authorized coverage of the speech therapy. Ten months later, CIGNA reimbursed Mondry for most of her out-of-pocket therapy expenses. Mondry filed suit against American Family and CIGNA pursuant to ERISA. She alleged that American Family and CIGNA failed to produce documents as required by the statute and that they both breached fiduciary duties owed to her. The district court dismissed the claims against CIGNA and entered summary judgment for American Family. Mondry appeals.

In their opinion, Judges Flaum, Kanne and Rovner affirmed in part and reversed in part. The court first addressed the failure to produce documents. ERISA requires a plan administrator to produce to a plan participant the Summary Plan Description and other documents, including "other instruments under which the plan is established or operated." The court affirmed the district court's dismissal of CIGNA with respect to this count because CIGNA is not the plan administrator. As the claims administrator, it is not subject to the requirement. The Court reversed, however, with respect to American Family. It held that American Family was required to produce the claims administration agreement as well as the BRT in the CRT. The Court had little problem in requiring the production of the claims administration agreement. Since it established the respective authorities and obligations of a plan administrator and claims administrator, it was a document on which the plan was operated. The Court found the BRT and the CRT closer questions. The Court stated that the catchall language should be narrowly construed to reach only documents that formally govern the establishment or operation of the plan. Since CIGNA treated the documents as authoritative sources -- in fact, the bases for their decision to deny the claim -- they are more than simply private guidelines. The Court emphasized the narrowness of its holding, only to apply to documents that are treated by the claims administrator as the equivalent of plan language. Finally, the Court held that the fact that American Family was not in possession of the documents was not relevant to its liability. If American Family did not have the right to obtain the documents from CIGNA, they certainly should have bargained for that right. The Court remanded to the district court for determination of the appropriate penalty.

The Court went on to address Mondry's claim that both American Family and CIGNA violated their fiduciary duties. Before addressing the existence of a fiduciary duty, the Court considered whether Mondry qualified for one of the statute’s limited range of remedies. The section of the statute upon which Mondry relies authorizes only equitable relief. The Court concluded that her claims for unreimbursed expenses and the expense she incurred as a result of her decision not to participate in COBRA were not authorized remedies. The Court did, however, concluded that Mondry had a viable claim for the time-value of the money she spent on the speech therapy. The Court noted that this was a restitutionary remedy -- sometimes considered a legal remedy and sometimes an equitable one. Restitution is equitable when it is sought as a result of a breach of fiduciary duty. Here, American Family had the interest-free use of the money and restitution by Mondry negate its gain. Having found relief to which Mondry may be entitled, the Court proceeded to address the fiduciary duty issue. ERISA imposes a duty of loyalty like that of a trustee and it creates a duty of care in executing that duty. The Court looked to a Fourth Circuit decision that concluded that a fiduciary breaches its fiduciary obligation when it fails to make the disclosures required by the statute. The Court concluded that there was sufficient evidence from which a fact-finder could determine that American Family breached its fiduciary duty to Mondry. With respect to CIGNA, however, the Court found so no such duty. CIGNA did not have the same obligation to produce documents, nor did profit from a refusal to do so. The Court affirmed the lower court's dismissal of all counts as against CIGNA and reversed with respect to both counts as against American Family. It remanded the claim for penalties for a determination of the appropriate amount and reversed the summary judgment on the fiduciary duty count and remanded for further proceedings.

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ARMSTRONG v. LASALLE NATIONAL BANK (January 13, 2009)

A number of lawsuits were initiated in several different federal district courts by participants in Amsted Industries, Inc.’s (“Amsted”) Employee Stock Ownership Plan (“ESOP”). The complaints allege violations of ERISA, breach of contract, breach of fiduciary duty and conversion. The Judicial Panel on Multidistrict Litigation (“Panel”) consolidated the cases for pretrial proceedings in the Northern District of Illinois. That court ordered the cases consolidated into two groups – retiree claims and non-retiree claims. The non-retirees added LaSalle Bank as a defendant. All the claims eventually were resolved except the non-retiree claims against LaSalle. The non-retiree plaintiffs and LaSalle participated in pretrial proceedings, including the setting of a trial date. A few weeks before the pretrial order was due, the plaintiffs moved to remand their claims. LaSalle objected. The court granted the remand, reluctantly and with some consternation. It also certified two questions under 28 U.S.C. § 1292(b): a) whether filing an amended complaint agreeing to jurisdiction and venue and adding a defendant that can only be sued in the transferee court constitutes consent to trial in the transferee court, and b) whether waiver of a right to remand under § 1407 requires evidence of a “deliberate relinquishment of a known right.” LaSalle appeals.

In their opinion, Judges Ripple, Rovner and Tinder affirmed. The Court began with the statute. Section 1407(a) provides that cases transferred and consolidated by the Panel “shall be remanded” to the transferor court after pretrial proceedings, unless otherwise terminated. The Court mentioned the Supreme Court’s emphasis on the plain meaning of the statute in Lexecon vs. Milberg Weiss, in which the Supreme Court struck down the practice of district courts transferring a case to itself. The analysis did not stop with Lexecon, however. The Court recognized that § 1407(a) is a venue statute. Since a party can consent to venue and waive its right to remand, the Court addressed waiver. The Court found no authority on the proper standard to apply in a § 1407(a) waiver context. It found its jurisprudence on the waiver of a right to arbitrate instructive. In Halim v. Great Gatsby’s Auction Gallery, the Court held that the standard to determine waiver of the right to arbitration is whether, under all the circumstances, the party alleged to have waived has acted inconsistently with that right. The focus should be on the party’s actions as a whole, not any one action. The Court suggested that the standard for a § 1407(a) waiver should be higher than for a right to arbitrate, noting the statutory source of the remand right as well as the mandatory language. The Court did not actually decide the issue since it concluded that LaSalle could not even get over the “acted inconsistently” hurdle. On the merits of the waiver, the Court stated that only two actions of the plaintiffs were cited as supporting a waiver – its statement in the consolidated complaint that venue was proper in the transferor court and its participation in pretrial proceedings in which trial dates were set. Neither, in the Court’s view, amounted to a waiver. With respect to the venue statement, the Court noted that the consolidated complaint was filed at the request of the court and that venue, in fact, was proper in that court. Nothing about the statement was inconsistent with a desire for a remand. With respect to the plaintiffs’ participation in pretrial proceedings in which trial dates were set, the Court admitted that much aggravation could have been avoided had the plaintiffs made their intentions more clear. However, the conduct was not inconsistent with a desire for a remand.

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LLOYD v. SWIFTY TRANSPORTATION (January 9, 2009)

Gerald Lloyd is a truck driver. Unfortunately, Lloyd lost much of his left leg in a motorcycle accident. Fortunately, he adapted fairly well to a prosthetic leg. He does experience some difficulties with the lining and develops occasional infections. He was able to get a limb waiver from the State of Indiana to return to his career as a truck driver. Swifty Transportation (“Swifty”) hired Lloyd as a night-shift driver in June 2008. Swifty delivers gasoline in its fleet of twelve trucks. Each truck has one lead driver on the day shift and two night-shift drivers. The lead drivers are generally paid more and have some additional responsibilities. In 2001, Swifty filled a lead-driver position without interviewing Lloyd, even though Lloyd had expressed his interest in the job. Lloyd filed an EEOC charge, alleging that Swifty denied him the job because of his disability. Swifty and Lloyd resolved the charge. Lloyd agreed not to bring suit. Swifty agreed to notify and interview Lloyd for any open lead-driver position. On three later occasions, Swifty filled open lead-driver positions with other applicants. In June 2003, they interviewed Lloyd but hired a more experienced driver. Lloyd filed a second EEOC complaint. In January 2004, Swifty again filed a lead driver position with a more experienced driver, this time without interviewing Lloyd. Lloyd was disciplined for the first time in January 2005 – for loading gasoline from the wrong supplier. Lloyd filed his third EEOC complaint. Subsequent to his last EEOC complaint, Lloyd was disciplined twice more. In May 2005, Lloyd resigned. He filed a complaint, alleging that Swifty a) failed to promote him, disciplined him, and paid him less than others, all on account of his disability and in retaliation for his EEOC charges and taking FMLA leave, b) created a hostile work environment, and c) breached the settlement agreement by not interviewing him for every job opening. The court granted summary judgment to Swifty.

In their opinion, Judges Cudahy, Ripple and Rovner affirmed. The Court concurred with the district court’s holding that Lloyd’s claims regarding the 2001 and 2003 openings were time-barred and that his FMLA claims were barred because Lloyd did not establish that Swifty had more than fifty employees. With respect to the ADA promotion claims, the Court noted that Lloyd proceeded under the “indirect” method of proof. That requires proof that a) he is disabled, b) he was meeting Swifty’s legitimate expectations, c) he suffered adverse employment action, and d) similarly situated employees without a disability were treated more favorably. The Court concluded that Lloyd never even established that he was a “qualified individual” under the ADA – i.e., that he was actually qualified to be a lead driver. Swifty established that a lead driver needed mechanical knowledge and a positive attitude. The uncontradicted testimony was that Lloyd had a negative attitude. With respect to the claims arising from Swifty’s discipline of Lloyd, the Court stated that the written reprimand was not an adverse employment action, the suspension came after and was unrelated to his final EEOC charge, and Lloyd had no personal knowledge that similarly situated drivers were not disciplined. The Court also affirmed the grant of summary judgment on Lloyd’s lower pay, hostile work environment, and breach of contract claims.

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BIELANSKI v. COUNTY OF KANE (December 18, 2008)

Kane County set up a Child Advocacy Center (“Center”) to coordinate the investigation and prosecution of child sexual abuse. The Child Advocacy Advisory Board (“Board”) is responsible for drafting the policies and procedures for those investigations and prosecutions. Kathryn Berg and David Byrne were a child protection investigator and police officer, respectively, assigned to the Center. [The facts that follow, given the posture of the appeal from a motion to dismiss, are taken from the complaint.] In mid-2001, Berg and Byrne interviewed a six-year old boy and his parents. The boy claimed he had been sexually abused by “Lorri.” Berg and Byrne failed to follow accepted techniques used in child victim interviews. They did not use techniques to identify the perpetrator and did not even ask the boy to describe her. Within days, Lorri Bielanski, a fifteen-year-old neighbor of the boy, was notified that credible evidence existed that she had sexually assaulted the boy. Sometime shortly after Berg and Byrne’s interview of the boy, they learned that: a) he was taking medication for Attention Deficit Hyperactivity Disorder, b) he was in special education classes, c) he was known, on two occasions, to have undressed with others and tried to get others to undress, d) his parents confronted him about the undressing incidents and punished him, and e) his parents suggested to him that he may have been sexually abused. Berg and Byrne did not disclose this information to the prosecutors or Bielanski. The county filed a Petition for Adjudication of Wardship, alleging the commission of two sexual assault felonies. As a result, Bielanski was forced to attend court hearings and an interview with a probation officer and was not allowed to travel out of the state without court permission. Bielanski was eventually acquitted of all charges and was successful in getting her record expunged. She filed a complaint against the County, the Center, the Board, Berg, and Byrne. Based on § 1983, she alleged: a) that the defendants violated her Fourth Amendment rights by compelling her to attend the court hearings and restricting her movement, and b) that Byrne and Berg violated her rights to a fair trial and due process by withholding the information they had about the boy. The district court granted defendants’ motion to dismiss. Bielanski appeals.

In their opinion, Judges Posner, Kanne and Rovner affirmed. The Court began with Bielanski’s Fourth Amendment claim. In order to make out such a claim, the plaintiff must allege a seizure and that it was unreasonable. Since Bielanski was not seized in the normal sense of an arrest, the Court reviewed Justice Ginsburg’s “continuing seizure” concurrence in Albright and other circuits’ approaches in similar situations. In Albright, Justice Ginsburg supported a Fourth Amendment analysis whereby a defendant who was arrested, released, and then summoned back to court based on the misleading testimony of a police officer could state a claim for unlawful seizure. No other Justice has adopted the analysis. The Court concluded that a summons, even when combined with travel restrictions and a forced probation officer interview, is an insufficient restraint on freedom to constitute a seizure. The Court then addressed the fair trial claim. The elements of that claim are that: a) the evidence is favorable to the accused, b) that it was suppressed by the government, and c) that it was material. The Court noted that materiality was the only element in dispute and that the Supreme Court had not addressed a case in which evidence was withheld and the defendant was later acquitted. Several other circuits have concluded that a Brady claim cannot survive an acquittal or dismissal of charges. The Court concluded that Bielanski had no Brady claim since earlier disclosure of the evidence would not have resulted in a dismissal of the charges.

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REYNOLDS v. UNITED STATES (December 9, 2008)

On an August afternoon in 2003, a security guard employed by General Security Services Corp. (“GSSC”) was on duty at the Federal Building in Indianapolis. (These facts are from Reynolds complaint, taken as true for purposes of the opinion.) Somehow, he ended up naked, on the roof of the building, and locked out of the building. Eventually, a colleague let him in. The two of them reported the incident (except for the naked part) to Maureen Reynolds, a GSSC officer. Several weeks later, Federal Protective Services (“FPS”) began an investigation. Two FPS investigators interviewed Reynolds. She told them what she knew. Although they knew that she was unaware of the nudity, the two investigators told the local prosecutor that she had lied. Reynolds was charged with false reporting and acquitted at trial. GSSC fired her because of the allegations of criminal conduct. Reynolds sued the United States under the Federal Tort Claims Act (“FTCA”). She alleged that the investigators had initiated a malicious prosecution. The district court dismissed for lack of subject matter jurisdiction. Reynolds appeals.

In their opinion, Judges Ripple, Rovner and Evans reversed and remanded. The Court addressed the requirements and exceptions to a FTCA action. The FTCA allows tort suits against the United States for torts committed by federal officials if those same acts would impose liability under state law for a private person. There are several exceptions to liability. The Court first corrected the district court’s treatment of these exceptions as limitations on jurisdiction. They are not. They are, instead, limitations on the right to recover and subject to a motion to dismiss for failure to state a claim. Although the district court relied on three different exceptions to the FTCA, the government only addressed one of Reynold’s arguments. The Court agreed that the district court was in error in its analysis of the “government employee” and “law enforcement” exceptions. It turned to the “discretionary function” exception. The Court noted the two requirements needed to establish the discretionary function exception: a) the conduct must involve an element of judgment, and b) the conduct must amount to a permissible exercise of policy judgment. The Court rejected the government’s argument that the conduct was akin to a prosecutor’s decision to prosecute. The Court agreed that a decision to prosecute is discretionary but held that the conduct in this case – knowingly providing false information to the prosecutor – is separable from that decision. A federal investigator’s decision to lie under oath does not meet the discretionary function test. Reynolds has alleged conduct that would amount to malicious prosecution under Indiana law and has therefore stated a claim under the FTCA.
 

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BINGHAM v. NEW BERLIN SCHOOL DISTRICT (December 4, 2008)

Sam Bingham was a Wisconsin high school student. His parents petitioned their school district to provide special education services for him. The district did not do so. Sam transferred to a private school. After Sam graduated, his parents filed a request for a hearing with the Wisconsin Department of Public Instruction. They alleged that the school district had failed to comply with the Individuals with Disabilities Education Act (“IDEA”). They asked for reimbursement of their private school tuition costs. Before a hearing was held, the district reimbursed the Binghams for the full amount they requested. The administrative law judge dismissed the petition as moot. The Binghams asked for a declaration that they had “prevailed” for purposes of seeking attorneys’ fees under IDEA. The administrative law judge refused. The Binghams appealed to the district court. The court concluded that the Binghams were not prevailing parties and denied their motion for attorneys’ fees. The Binghams appeal.

In their opinion, Judges Flaum, Rovner and Williams affirmed. In fact, the Court very quickly and easily resolved the sole issue presented by the appeal – whether the Binghams were entitled to attorneys’ fees under IDEA – against the Binghams. In Buckhannon, the Supreme Court in 2001 held that a voluntary monetary settlement by a defendant does not entitle a plaintiff to “prevailing party” status. The Court further noted that every circuit that has considered the issue has applied Buckhannon to IDEA cases.

The Court went on because it was troubled by the plaintiffs’ conduct. The plaintiffs and their counsel were well aware of Buckhannon and yet did not even cite it in their papers. The Court emphasized that it was not the fact that they appealed which was disturbing. Buckhannon has been the target of much criticism, especially when applied to IDEA. The Court allowed for the possibility that the Binghams could have elected to appeal solely for the purpose of preserving an argument for the Supreme Court. Having decided instead to ignore binding precedent, the Court ordered the Binghams and their counsel to show cause why they should not be ordered to pay the defendant’s costs and fees of the appeal. 

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POWERS v. RICHARDS December 2, 2008

Robert Powers was employed by the State of Illinois in 2002 as Deputy Director of the Department of Central Management Services. Powers is alleged to have been part of a scheme to help certain state employees keep their jobs. The employees had been appointed to their jobs for four-year terms. During those terms, they could not be fired but for cause. Instead of allowing their terms to expire shortly after the election of a new governor and risk being replaced, these employees voluntarily resigned before the election. They were then reappointed to new four-year terms. Powers signed the personnel forms that were necessary for the scheme to succeed. Powers did not have the authority to sign the forms and did so knowing that the Director would not. In October of 2002, Powers took a new job as Executive Secretary of the Civil Service Commission (“Commission”). The role of the Commission is to hear appeals of state employees regarding discharges and discipline, modify personnel rules, and investigate personnel violations. Powers’ role as Executive Secretary included drafting rules and regulations, making recommendations regarding resolution of disputes, and interpreting the Personnel Code, among others. When a new governor took office in January of 2003, he began an investigation into the late appointments. The governor’s office concluded that Powers was involved in the scheme and referred its findings to the Commission. The Commission suspended Powers and authorized its Chairman to conduct a hearing. The Chairman was authorized to fire Powers if he did not produce exculpatory evidence at the hearing. The Chairman notified Powers of his rights and held a hearing. The Chairman recommended that Powers be fired – and he was. Powers received a post-deprivation hearing before an ALJ. The ALJ concluded that the firing was warranted. Powers brought suit under 42 U.S.C. § 1983. He alleged that his firing was a deprivation of his right to association because it was on account of his party affiliation. He also alleged a lack of pre-deprivation procedural due process. The defendants conceded, for purposes of summary judgment, that Powers was fired because he was a Republican. The district court granted summary judgment to all defendants. Powers appeals.

In their opinion, Judges Manion, Rovner, and Evans affirmed. The Court stated that the First Amendment does not prohibit a firing based on party loyalty if that loyalty is necessary to properly perform the job. The considerations in determining that necessity include whether the position allows for meaningful input into government decision-making and involves political discretion. The Court reviewed Powers’ job description to decide whether the position was such a position. The Court recited the job’s numerous responsibilities and concluded that they did include broad discretion to make policy, interpret the law, and speak on behalf of the Commission. The position is therefore one into which an incoming administration can appoint someone of its own party. With respect to Powers’ procedural due process argument, the Court noted that when a person is afforded a full post-deprivation hearing, a pre-deprivation hearing satisfies due process if it includes notice, an explanation of the evidence, and an opportunity to be heard. Since Powers concedes that he had all that is required, he cannot prevail. Finally, the Court was not persuaded by Powers’ unsupported claim that the Commission had already decided to fire him before the hearing.

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BELL v. DAIMLERCHRYSLER CORP. (October 29, 2008)

In the late 1970s through 1980, DaimlerChrysler Corp. (“Chrysler”) laid off hundreds of workers at its New Castle, Indiana plant. The workers were members of the United Auto Workers (“the union”). The union and Chrysler were parties to a collective bargaining agreement and over seventy side letters. The side letters were collected in a so-called “Book of Letters.” The agreement between Chrysler and the union provided laid-off workers a preference over other applicants for job openings at any Chrysler facility within fifty miles of their former work locations. Later side letters expanded the area of preference to any opening within the same state as the employee’s last work location. From 1984 to 1987, Chrysler hired over seven hundred workers at its Kokomo, Indiana plant. It did not offer these jobs to the workers who had been laid off from the New Castle plant. In 2002, Local 371 of the union filed two grievances charging that Chrysler violated their labor agreements by not offering the Kokomo jobs to the laid-off workers. The grievances were filed pursuant to a multiple-step procedure defined by the labor agreements. Chrysler denied the grievances as untimely. Local 371 continued to pursue the grievances to the Appeal Board step of the procedure. At that step, the national union representative decide to withdraw the grievances. The basis for his withdrawal was twofold. First he believed that they were untimely. Second, they also presented significant proof problems due to the deaths and retirements of many necessary witnesses. A local or an individual union member can appeal a grievance withdrawal within thirty days. No appeal was taken of the withdrawal. Two groups of Chrysler employees filed suit in federal court pursuant to section 301 of the Labor Management Relations Act. They alleged that Chrysler breached its obligations under the labor agreements. After the two suits were consolidated, the district court granted summary judgment to Chrysler. The court held that the plaintiffs failed to exhaust their administrative remedies. The plaintiffs appeal.

In their opinion, Judges Flaum, Rovner, and Sykes affirmed. The Court noted the hybrid nature of a section 301 suit. Chrysler and the union have agreed to resolve their disputes privately. Union members must avail themselves of that process, up to and including binding arbitration. In a section 301 suit, the union member complains of an employer’s violation of the labor agreement but also complains of the union’s breach of its duty of fair representation with respect to that violation. A member cannot generally bring a section 301 suit until she has first exhausted all her available administrative appeals. There is no dispute in the case that the plaintiffs failed to exhaust available appeals. The Court noted that the Supreme Court, in Clayton v. UAW, has identified situations where that failure can be excused. They are: a) futility – where the union has displayed such hostility to the grievance that further appeals appear futile, b) inadequacy – where the procedure cannot lead to reinstatement of the grievance or result in full relief, and c) undue delay – where exhaustion of all appeals will result in undue delay. The plaintiffs take the position that futility and inadequacy excuse their failure to exhaust.

The Court first addressed plaintiffs' inadequacy argument. The plaintiffs argued that Chrysler should not be allowed to rely on one of the side letters because: a) Chrysler failed to raise it until its reply brief, and b) the collective bargaining agreement contained an integration clause. The Court rejected the arguments. It stated that: a) Chrysler’s reference to the side letter was in response to plaintiffs’ argument and properly appeared in their reply, and b) the plaintiffs could have filed a surreply to Chrysler’s reply, if they wanted an opportunity to address the document. The Court further held that the plaintiffs waived the integration clause argument by not raising it in the district court. The Court also rejected plaintiffs' argument that they are excused from further appeals because the appeals could not have provided them with full relief. The second Clayton factor of inadequacy excuses exhaustion only if neither reinstatement nor full relief is possible. Further appeals could have resulted in a reinstatement of the grievance. Plaintiffs’ final argument on the inadequacy factor is that they did not even know of the existence of the side letter. The Court conceded that plaintiffs did lack knowledge of the side letter. The Court concluded, however, that there was an insufficient record to excuse them from that knowledge. They knew of the existence of several side letters and made no showing that, with due diligence, they could not have discovered the letter.

With respect to the futility factor, the plaintiffs simply rely on one union representative’s comment that the appeal was a “dead issue” and the general lack of support or direction they received from the union. The Court noted that it had “repeatedly rejected” those kinds of statements as demonstrating the pervasive hostility required by the first Clayton factor. The district court did not abuse its discretion in granting summary judgment.

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ABENA v. METROPOLITAN LIFE INS. CO. (September 16, 2008)

Albert Abena worked as a dentist for American Dental Partners, Inc. (“ADP”). ADP provided long-term disability benefits to eligible employees through a plan administered by Metropolitan Life Insurance Co. (“MetLife”). An employee seeking benefits had to file a “Proof of Disability” within three months of the end of an “Elimination Period” (a ninety day period from the date of disability during which benefits were not paid). The Plan provided that no legal action could be filed before the sixtieth day after the filing of the Proof of Disability or after three years from the date Proof of Disability had to be filed. Abena submitted a Proof of Disability on October 23, 2000. He asserted that his disability commenced on May 16, 2000. MetLife approved the claim in early 2001 and began paying benefits. After learning that Abena was again working as a dentist, MetLife reviewed his claim and notified him on August 8, 2002 that his benefits would be terminated. Abena took advantage of an internal appeals process. MetLife affirmed its decision on April 16, 2003. Abena filed suit on April 17, 2006 under ERISA against ADP and MetLife. The district court granted summary judgment to the defendants on the ground that the suit was not timely filed. Abena appeals.

In their opinion, Judges Manion, Rovner, and Evans affirmed. The Court agreed with the court below that the issue was controlled by the Court’s 1997 decision in Doe v. Blue Cross Blue Shield United of Wisconsin. In Doe, the Court noted that ERISA did not contain a Statute of Limitations and that the normal practice would be to borrow a limitations period from a closely analogous statute. It also held that a shorter contractual limitations period would be enforced if it was reasonable. Doe dealt with an employer-sponsored health plan. Like the ADP plan, the Doe plan provided that a claimant had to file for reimbursement within ninety days of the date of service and that the claimant could not initiate a suit after three years from the last day a claim could be filed. The plan also required a claimant to pursue an internal appeals process. The appeals process in Doe was concluded with seventeen months left in the three year limitations period. Particularly given that the claimant was represented by counsel, the Court held that the seventeen months was reasonable and enforceable. In applying Doe to Abena’s situation, the three year period expired in November of 2003. MetLife notified him of its affirmance of termination of benefits in April of 2003. Abena, therefore, had seven months to file suit. Abena argues that Doe was an initial claim case and his is a denial of previously granted benefits and therefore distinguishable. The Court agreed that the limitations provision may be better suited to an initial claim but did not see that as a reason to depart from Doe’s holding. The Court also agreed with Abena that a situation could arise in which benefits were paid for thirty nine months before termination, leaving no time to bring suit. Unfortunately for Abena, the Court’s view was that the possibility of that result did not invalidate the limitations period or make a seven month period unreasonable – it merely would have made the application of the provision in that case unreasonable. Abena, too, was represented by counsel. In those circumstances, the Court held that a seven month period was reasonable and enforceable. 
  

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