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

WISCONSIN RIGHT TO LIFE STATE POLITICAL ACTION COMMITTEE v. BARLAND (December 12, 2011)

The Wisconsin Right to Life's State Political Action Committee is an independent political committee that does not make contributions to candidates nor does it coordinate with any candidate or party. Wisconsin law places a $10,000 cap on an individual' s political contributions, whether they be to candidates, parties, or independent political committees. Two Wisconsin residents wished to make a $5,000 contribution to the PAC in 2010 but could not do so legally because of other contributions they had already made or planned to make. The PAC filed suit, alleging that the Wisconsin statute was unconstitutional to the extent it limited contributions to independent political committees. The PAC moved for a preliminary injunction, anticipating the fall 2010 elections. Instead, Chief Judge Clevert (E.D. Wis.), at defendants request, granted a Pullman abstention motion. The court based its ruling on the pendency of a case before the Wisconsin Supreme Court challenging an amended campaign finance rule. The PAC returned to the District Court in 2011, in anticipation of an unprecedented six state senator recall elections. The district court denied the motion. The PAC appealed and moved for an injunction pending appeal. A Seventh Circuit motions panel granted the motion and the Court expedited the appeal.

In their opinion, Seventh Circuit judges Posner, Flaum, and Sykes vacated the district court's abstention order and remanded with instructions to enter a permanent injunction. Before reaching the merits of the request for injunctive relief, the Court considered several preliminary challenges raised by the defendants. First, the Court concluded that the PAC had standing. The complaint alleged a proper pre-enforcement challenge. The PAC identified actual contributors who attested to their desire to make contributions in excess of the statutory limit. Second, the Court rejected the defendants' ripeness argument. The fact that the injunction pending appeal allowed the contributors freedom during the 2011 elections and their generalized desire to do so "in the future" does not establish a lack of ripeness. Future elections are only months away and the Court understood the contributors' "in the future" attestation to include those elections. Third, the Court rejected the contention that the conclusion of the 2011 recall elections made the claim moot. The Court noted that the claim probably could fit within the "capable of repetition yet evades review" exception but concluded that it need not decide that. The contributors’ claims were not limited to the 2011 recall elections. Fourth, the Court concluded that Pullman abstention was not appropriate. Although several aspects of the PAC’s case and the case pending before the Wisconsin Supreme Court overlap, the $10,000 contribution limit is not one of them. The state court's decision will therefore have no impact on the constitutional challenge to the $10,000 cap. The Court turned to the merits. It noted that laws limiting political speech are subject to strict review. The Supreme Court has drawn a distinction between limits on political campaign contributions, which are frequently upheld when the limitation is narrowly drawn to serve a important government interest, and limits on political expenditures, which are subject to strict scrutiny and are usually not upheld. Citizens United held that the only government interest at play is political corruption or the appearance of corruption. Since the kind of quid pro quo political corruption that the government is concerned about does not exist in the context of a independent political organization, a limitation on its expenditures cannot survive constitutional scrutiny. Even though the Wisconsin statute at issue addresses contributions, and not expenditures, the result is the same.

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BARTON v. ZIMMER, INC. (October 18, 2011)

Zimmer, Inc. sells artificial hips and knees. It employed Bruce Barton as part of its sales force since 1993. Andy Richardson became Barton's supervisor in 2004. Richardson eliminated many of Barton's duties over the course of the next year, most likely due to age discrimination (conceded, for purposes of argument, by Zimmer). Barton complained to Human Resources representative Richard Abel after a negative May 2005 performance review. Able investigated the situation, met with Barton and Richardson, and ultimately recommended that Richardson be fired for his divisive leadership. In the meantime, Barton had been on vacation,FMLA leave, and paid administrative leave. In September, Barton returned and began reporting to Sherri Milton. Barton complained about the assignments he received from Milton and filed an EEOC charge, alleging that the assignments were in retaliation for his earlier EEOC charge against Richardson. After Milton criticized his performance, Barton suffered a mental breakdown. He used up his FMLA leave, as well as his short and long-term disability benefits. The Social Security Administration granted a total disability benefits claim and Burton retired from Zimmer. Barton filed suit against Zimmer for ADEA discrimination and retaliation and FMLA interference. Judge Springmann (N.D. Ind.) granted summary judgment to Zimmer. In part, she concluded that Barton could not prevail on his ADEA claim because he was only seeking front pay, not reinstatement. Barton appeals.

In their opinion, Seventh Circuit Judges Evans (who, as a result of his death, took no part in the decision), Sykes, and Hamilton affirmed. The Court first addressed the Richardson ADEA claim. It disagreed with the district court's conclusion that front pay is not available because of the statute's compensatory damages exclusion. In Pollard, the Supreme Court held, in the context of Title VII, that front pay could be an appropriate substitute for reinstatement if the reinstatement remedy was not viable as a result of psychological injuries caused by the discrimination. The Court assumed that the Pollard Title VII approach would apply in an ADEA case but concluded that Barton was not entitled to it. Here, Barton’s psychological injuries that precluded his reinstatement arose out of the job assignments from Milton, not from Richardson. The Milton job assignments were not the result of any age discrimination. The Court turned to the ADEA retaliation claim. To prevail, Barton was required to show a statutorily protected activity, a materially adverse employment action, and a causal relation between the two. The Court concluded that Barton's challenging new job assignment was probably not a materially adverse employment action but that, even if it was, no reasonable jury could conclude that Milton assigned the task to him in retaliation for his protected activity. The project was important to the company and Barton's work history showed that he was qualified to complete it. Finally, the Court addressed the FMLA interference claim. The FMLA requires employers to restore an employee to his prior or equivalent position upon the termination of leave. It is true that Barton was not returned to his prior position since most of his duties had been eliminated and the few projects he had were completed. The record supports, however, the conclusion that Zimmer assigned him to the same duties he would have had he not taken leave. The FMLA requires no more.

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KASALO v. HARRIS & HARRIS, LTD. (August 26, 2011)

Mariana Kasalo brought suit under the Fair Debt Collection Practices Act against Harris & Harris. Her attorney included two class accounts in her complaint. Harris & Harris admitted that it violated the Act with respect to Kasalo, but denied that its normal practices violated the Act. The parties informed the district court judge that they intended to settle the individual claim. Although the court expressed skepticism with respect to the class claims, he allowed some discovery. Over the following months, status hearings were held, Kasalo's attorney abandoned two class theories but developed a third, and the attorney missed due dates and failed to inform the court of his intentions. When Kasalo's attorney showed up late for a May 2010 status hearing, Judge Guzmán (N.D. Ill.) dismissed the case for want of prosecution. When he showed up minutes later, the court instructed him to file a motion for reconsideration explaining why he had not been more diligent in prosecuting the case. The court later denied that motion. Kasalo appeals.

In their opinion, Seventh Circuit Judges Rovner, Wood, and Evans (who, as a result of his death, took no part in the decision) reversed and remanded. A dismissal for want of prosecution is an extremely harsh remedy and should only be used when, considering all the circumstances, less serious sanctions are unsatisfactory. The factors include the frequency of plaintiff's shortcomings, whether the shortcomings are attributal to the plaintiff or her lawyer, any prejudice, the impact on the court, and the merits of the suit. The Court noted that most of the factors weigh against an outright dismissal. Courts should consider less serious sanctions and normally should provide a warning to a party before dismissal. Here, the district court did neither. In fact, the Court specifically noted the presence of a much more appropriate remedy. The district court could have denied class certification and allowed the parties to settle the individual claim. The plaintiff then could have sought review of the class certification denial.

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EQUAL EMPLOYMENT OPPORTUNITY COMMISSION v. KONICA MINOLTA BUSINESS SOLUTIONS U.S.A. (April 29, 2011)

Konica Minolta Business Solutions hired Elliot Thompson, an African-American male, in early 2005. Konica assigned him to a Tinley Park, Illinois sales team. Thompson believe that he was being discriminated against because of his race and registered a complaint with Konica's Human Resources Department in late October. Konica fired him the very next day, Thompson filed a charge with the EEOC. He alleged that he was subjected to different terms and conditions of employment and was discriminated against on account of his race. Konica initially cooperated with the EEOC investigation. During its investigation, the EEOC learned that Konica had four Chicago area facilities, that only six of its 120 employees were African-American, that all six were assigned to the Tinley Park facility, and that five of the six were on the same sales team. The EEOC issued a comprehensive subpoena, requesting substantial information regarding Konica's hiring history at all four sites. Konica petitioned to revoke the subpoena. The EEOC denied the petition. Judge Manning (N.D. Ill.) granted the EEOC's application for an order enforcing the subpoena. Konica appeals.

In their opinion, Judges Cudahy, Flaum, and Wood affirmed. Although the EEOC has primary authority for enforcing Title VII and must investigate discrimination charges, its authority is limited to evidence relevant to the charge. The Supreme Court adopted a generous relevance standard in Shell Oil. The EEOC need only have a "realistic expectation" that the requested evidence will advance its investigation. Although Thompson's charge did not include any allegations relating to his hiring, the Court had no trouble finding that the EEOC subpoena met the relevance test. Any discrimination in hiring or team assignments would be relevant to the EEOC's investigation of Thompson’s treatment. The Court also concluded that Konica failed to adequately develop its burdensomeness argument.

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MEJIA v. COOK COUNTY (April 22, 2011)

Michael Mejia was an inmate at the Cook County Jail on October 9, 2005. There was an incident that day and Mejia suffered contusions, lacerations, and bruises. There are significant factual disputes about the incident and the cause of his injuries. Mejia brought suit pursuant to § 1983 against the County and a number of jail employees, alleging excessive force in violation of the Constitution. The case proceeded to trial, where a jury found for the defendants. Judge Lefkow (N.D. Ill.) denied Mejia's motion for a new trial. She concluded that the weight of the evidence supported Mejia but that she could not grant the motion unless a reasonable person could not believe the testimony "because it contradicts indisputable physical facts or laws." Mejia appeals.

In their opinion, Judges Kanne, Wood, and Sykes vacated and remanded. The question presented to the Court was whether the district court applied the proper standard in its ruling on the motion for a new trial. A district court has the power to grant a new trial and should do so when the jury's verdict is against the manifest weight of the evidence. That is not the standard the district court used. Instead, it used the "indisputable facts” standard. But that standard is only used when the district court, in assessing the weight of the evidence, wants to take a piece of evidence out of consideration entirely. The Court noted that applying the "indisputable facts" standard to the weighing process generally would inappropriately raise the bar for a motion for new trial. Having concluded that the district court applied the long standard, the Court considered the County's argument that a remand would be futile because granting the motion would be an abuse of discretion and Mejia's argument that remand would be futile because the district court already decided that the verdict was against the manifest weight of the evidence. The Court rejected both extremes. With respect to the County's argument, the Court declined to express an opinion on the correct outcome once the proper standard is applied. With respect to Mejia's argument, the Court noted that the district court concluded only that the evidence tended to favor Mejia, not that the verdict was against the manifest weight of the evidence.

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STAMAT v. NEARY (March 24, 2011)

Nicholas and Penny Stamat filed a joint petition for bankruptcy in May 2007. Nicholas is a pediatrician with his own practice. Penny is a college graduate and handles the billing for Nicholas' practice through her own billing company. The Stamat’s sought the discharge of over $1.5 million in debt. The couple's Statement of Financial Affairs (SOFA) was inaccurate with respect to their 2006 gross income, past investment interests, part-time employment, among other things. The Trustee objected to the discharge on the grounds that the Stamat's concealed property, made false oaths with fraudulent intent, and failed to explain the loss of substantial assets. After a bench trial, the bankruptcy court agreed and determined that the debts were not dischargeable. Judge Gottschall (N.D. Ill.) affirmed, relying solely on the false oath grounds. The Stamat's appeal.

In their opinion, Judges Rovner, Judge Evans, and Williams affirmed. The Court noted that the "fresh start" afforded by the Bankruptcy Code has exceptions. One of those exceptions is for the debtor who "knowingly and fraudulently" makes a false oath. In order for the exception to apply, the Trustee must prove, by a preponderance of the evidence: an oath, that is false, that the debtor knew was false, that was made with fraudulent intent, and that was materially related to the petition. The Stamats raised several arguments on appeal: a) that some of the alleged omissions disclosures were not required, b) that some of the transactions were "in the ordinary course" and did not require disclosure, c) that they had no fraudulent intent, d) that they amended their filings, and e) that the filings were not material. The Court rejected each of these arguments and affirmed, relying heavily on the bankruptcy court’s findings of fact and discussion of the Trustee’s evidence. The Court did hold that transactions outside the “ordinary course” were not limited to those where there was evidence of an intent to conceal or fraudulently convey. They can simply be not normal or ordinary.

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ELLIS v. DHL EXPRESS (January 11, 2011)

In late 2008, DHL announced that it was discontinuing its domestic shipping business. Five of its Chicago facilities were sure to close. The union successfully negotiated severance agreements. One agreement was available to full-time drivers and provided 10 weeks severance. The other agreements provided only four weeks. The drivers had less than a week to make their decisions. Other employees had between two and six weeks. Workers who were already laid off at the time the severance package was negotiated were nevertheless eligible for the four-week agreement. Eventually, 506 DHL employees accepted a package, resigned, and signed a release. The employees who did not accept a severance package received no severance but did retain seniority and recall rights and, of course, did not release the company from any claims. John Ellis and Timothy Price, both DHL drivers, brought suit against DHL alleging a violation of the Worker Adjustment and Retraining Notification (WARN) Act. Judge Kennelly (N.D. Ill.) granted summary judgment to DHL. He concluded that the WARN Act did not apply because a) the layoffs did not constitute a "plant closing" under the Act because the five facilities were not a single site, b) the employment losses were less than the Act’s 33% trigger, and c) the employees who accepted severance packages did so voluntarily and are therefore not counted as involuntary separations under the Act. Ellis and Price appeal.

In their opinion, Seventh Circuit Judges Wood, Evans, and Tinder affirmed. The Court stated that the WARN Act requires covered employers to provide 60-days notice of a plant closing or mass layoff. The Act does not apply if fewer than 33% of full-time employees are affected. Since the plaintiffs concede that the 33% threshold would not be met if the 506 employees who accepted the severance packages are not considered "affected," the Court confined its review to that issue. Although the Act excludes "voluntary" departures from its definition of employment losses, it does not define "voluntary." The Secretary of Labor has clarified the term, a clarification to which the Court gives significant weight. The clarification states that incentive retirement programs should normally be considered voluntary if the employer has not created a hostile environment or otherwise improperly induced employees. The Court rejected plaintiffs' argument that the economic uncertainties and narrow window within which to make decisions made those decisions involuntary. The agreements were negotiated by the union for the benefit of the employees and they were written clearly. The record contains no evidence that the company put any improper pressure on any employees. The Court recognized the narrow decision window but concluded that it did not transform the decisions into involuntary ones. The Court also rejected the argument that employees who were already laid off at the time they accepted a severance package could not have resigned "voluntarily." Although they were not working, the Court noted that they gave up valuable seniority and recall rights when they signed their agreements. Finally, the Court affirmed the District Court's decision to sua sponte grant summary judgment to DHL's German parent. The claims against the parent were identical to the claims against DHL.

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SECURITIES AND EXCHANGE COMMISSION v. WEALTH MANAGEMENT LLC (December 1, 2010)

As of mid-2009, investment firm Wealth Management LLC of Appleton, Wisconsin managed over $130 million in almost 450 client accounts. Until 2003, most of that money was held in low risk investments appropriate for Wealth Management's clients. Wealth Management's approach changed drastically that year. It began investing its client's funds in illiquid and risky ventures through six unregistered investment pools it established. By 2009, over 75% of its managed money was in these risky investments. Investors in one of the investment pools were informed in early 2008 that redemptions would be limited to 2% per quarter. Later in 2008, two of Wealth Management's offers officers admitted receiving kickbacks, the SEC began an investigation, and the company suspended redemptions and begin to liquidate. The SEC brought an enforcement action in 2009. The court froze the firm's assets and appointed a receiver. The receiver conducted an accounting of the company's funds and proposed a distribution plan. The accounting concluded that only $6.3 million was available for distribution. The receiver proposed a pro rata distribution with any redemptions after May 2008 (i.e., after the SEC investigation became public) offset against an investor's total distribution. Judge Griesbach (E.D. Wis.) approved the proposal over objection. Two of the objectors, Dr. Edwin Wilson and the James and Sandra Verhoeven Revocable Trust, appeal.

In their opinion, Seventh Circuit Judges Ripple, Kanne, and Sykes affirmed. The Court first addressed its jurisdiction. The order below is not appealable as a final order. If it is appealable, it is under the collateral order doctrine -- a question of first impression in the Circuit, although the Fifth and Six Circuits have allowed an appeal from a receiver's distribution plan. The Court concurred with its sister circuits, concluding that the appeal satisfied the collateral order doctrine's requirements: the order conclusively determined a disputed question, it resolved an important issue separate from the merits, and it was effectively unreviewable after final judgment. Addressing another minor procedural issue, the Court held that the appellants satisfied Federal Rule of Appellate Procedure 3(c), even though the Verhoevens objected below as individuals and appealed as the Verhoeven Trust. On the merits of the appellant's' challenge to the distribution plan, the Court noted that the district court has broad discretion in ensuring that the plan is fair and reasonable. Here, the plan treated all investors equally, an approach routinely endorsed by courts as fair and reasonable. The Court considered the claims of investors who tried to redeem their equity that their interest was different but ultimately concluded that the claims were the same as those who did not try to redeem. The Court rejected the appellants' claim that they were entitled to be treated differently under either federal or state law. With respect to the offset date challenge, the Court noted that the district court had several options: offset all redemptions, offset no redemptions, offset some redemptions based on a cutoff date, or offset some redemptions based upon an individual analysis of each redemption request. The individual analysis approach may have resulted in a more accurate distribution, but it would have been expensive and time-consuming. Each of the other approaches would penalize a different subset of investors. The district court did not abuse its discretion in selecting the cutoff date approach or in selecting the cutoff date.

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NIGHTINGALE HOME HEALTHCARE v. ANODYNE THERAPY (November 23, 2010)

Late last year, the Seventh Circuit affirmed summary judgment in favor of Anodyne Therapy and against Nightingale Home Healthcare (opinion and intheiropinion). The case involved Nightingale's purchase and later return of infrared lamps purchased from Anodyne. The Court affirmed on the grounds that Nightingale suffered no damages. After the affirmance, Judge Barker (S.D. Ind.) awarded $72,000 in attorneys' fees pursuant the Lanham Act’s allowance of such awards in "exceptional cases." Nightingale appeals.

In their opinion, Seventh Circuit Judges Posner, Kanne, and Rovner affirmed. The Court first described the surprisingly varied definitions courts apply to "exceptional cases." It found at least seven different interpretations in the different circuits, although it admitted that a closer analysis of the facts of individual cases would be required to determine if the different interpretations resulted in different outcomes. In the face of these different approaches, the Court looked to for the principle behind this exception to the general rule against awards of attorneys' fees. It concluded that the purpose of the exception was to prevent plaintiffs and defendants from using the Act for strategic purposes, especially when the other party was economically disadvantaged. The Court adopted an "abuse of process" test (i.e., the use of the legal system to accomplish a goal for which it was not designed) to reflect the concerns addressed by the Act. Applying that test in the procedural context of a fee motion, the Court concluded that an "exceptional case" is one in which a claim or defense was objectively unreasonable. Here, the Court had no difficulty finding that Nightingale met the test. The claim was not only without merit but was made for the specific purpose of getting a price concession from Anodyne. In addition to affirming the award below, the Court awarded fees for the appeal.

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JONES v. ASTRUE (October 22, 2010)

Jacklin Jones was injured in a car accident in 2001. Over the course of the next several years, she sought medical treatment as her condition worsened. She complained of lower back pain and numbness in her hands. The objective medical evidence, including the results of multiple MRIs, identified the principal problem as a mild, lower- back disc bulge. Her orthopedic surgeon advised her to discontinue the strong pain medication and instead to lose weight and begin physical therapy. She quit her job in November of 2003 because of her pain. She continued to see the orthopedic surgeon, who continued to tell her to lose weight and get into better condition. Jones sought disability benefits. At her hearing, she testified that she was in substantial pain, that she could not sit or stand for long periods, that her pain medication made her drowsy and nauseous, and that she had trouble holding onto objects. A vocational expert, responding to the ALJ's hypotheticals, testified that there were over 3000 jobs available for a person with Jones' conditions. The ALJ concluded that Jones was not disabled, finding that she could perform simple, routine, sedentary work. In reaching that conclusion, the ALJ found Jones' testimony about the intensity of her pain not credible. Judge Randa (E.D. Wis.) concluded that substantial evidence supported the decision and affirmed. Jones appeals.

In their opinion, Chief Judge Easterbrook and Circuit Judge Flaum and District Judge Hibbler affirmed. Jones' principal argument was that the ALJ's credibility determination was flawed. The Court noted that that determination is entitled to significant deference and would be overturned only if "patently wrong." Here, the ALJ credited a significant amount of Jones' testimony, there was substantial objective medical evidence in the record inconsistent with Jones' testimony regarding the extent of her pain, and Jones' treating physicians did not consider her disabled. An ALJ may not ignore subjective statements of pain simply because they are not supported by medical evidence. An ALJ may, however, consider subjective statements of pain as exaggerations when they are inconsistent with objective medical evidence. Here, the Court found that her testimony was inconsistent with objective medical evidence and concluded that substantial evidence supported the ALJ's findings.

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IN RE SPECHT (September 8, 2010)

Years ago, Eric Specht started a small business that he called Android Data Corporation. He registered "Android Data" as a trademark and registered the domain name “androiddata.com." Within a few years, however, he allowed the business to fold, the domain name registration to lapse, and the corporation to be dissolved. He must have had a change of heart several years later when Google came out with the Android operating system for cell phones. He tried to resurrect the corporation, he registered the domain name "android-data.com" –and then he sued Google and a number of other defendants for trademark infringement. The case was assigned to Judge Leinenweber. After the case had been pending for a year and as discovery was closing, he sought leave to add four defendants, including AT&T. Because his wife is on the AT&T board and together they own AT&T stock, Judge Leinenweber is never assigned a case in which AT&T is a party. Nevertheless, the judge decided to hear the motion. He denied the motion to amend and also refused to recuse himself. Specht petitioned for a writ of mandamus.

In their opinion, Chief Judge Easterbrook and Judges Kanne and Hamilton denied the petition. With respect to 28 U.S.C. §§ 455(b)(5) and 455(b)(6), the Court noted that disqualification depends on the relationship between a judge and a "party." Since AT&T is not a party, those sections do not require disqualification. The Court did conclude, however, that § 455(a)’s disqualification requirement when a judge's impartiality might be questioned comes into play. Although the Court expressly rejected the notion that the mere filing of the motion required recusal, it did conclude that a judge should not decide the merits of a motion if granting the motion would require his recusal. The proper procedure, said the Court, would have been for Judge Leinenweber to refer the underlying motion to another judge. If the uninterested judge denied the motion, Judge Leinenweber could continue to preside over the case. The Court nevertheless concluded that mandamus was unnecessary because it, as a disinterested panel, could decide the motion. Indeed, in the Court's view, granting the motion would be an abuse of discretion -- the case is a year old, discovery is closed, AT&T could have been named when the case was filed, and Google is the only necessary defendant for the relief requested.

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WICKENS v. SHELL OIL CO. (August 31, 2010)

Daniel and Pamela Wickens owned a small parcel of land in central Indiana that had previously been the site of a Shell gasoline station. During preparations for the sale of the parcel, they discovered that the soils were contaminated. Their attorney, Mark Shere, began negotiations with Shell -- under the Indiana Underground Storage Tank Act (the “Act”), a person who takes steps to remedy soil contamination caused by an underground storage tank may be reimbursed by the owner and may recover his attorneys' fees if he brings a successful suit. When a neighbor's property (also the site of a former gasoline station -- but not owned by Shell) was also found to be contaminated, the parties fought over the source and responsibility for the contamination. The Wickenses brought suit in early 2005. The district court denied Shell's summary judgment motion, concluding that it probably bore full responsibility for the contamination. Although the Wickenses continued to control the investigation and rack up remediation costs and attorneys' fees, the parties could not seem to reach a settlement. The court adopted a three month freeze on the parties' liability for each other's fees and costs in early 2007 in an attempt to foster a resolution. She also instructed the parties to select and retain an independent consultant to investigate the properties. Notwithstanding the court's order, the parties continued to incur substantial fees and costs during and after the freeze. The parties finally reached an agreement -- Shell purchased the property, made a payment for property damages, and agreed that the Wickenses were entitled to their costs and fees. They left the calculation up to the court. Judge Barker (S.D. Ind.) awarded all of the Wickenses' costs and fees up to the point of her freeze order, after which she disallowed all costs (with the exception of some corrective action costs pursuant to a state work plan) and fees. On post-judgment motions, the court a) deducted the amount of fees billed as attorney services by Shere’s wife, a non-attorney, and b) admonished Shere for concealing the fact that his fees were largely paid by an insurance company throughout the litigation but granted Shell no relief. Shell appeals. Shere (after being allowed to appear as a real party in interest) cross-appeals.

In their opinion, Circuit Judges Bauer and Wood and District Judge Kennelly affirmed in part and reversed and remanded in part. The only issues on appeal relates to the award of expert costs and attorneys' fees. The Court first concluded that the lower court correctly applied a statutory purpose test for calculating a fee award under the Act. Second, the Court ruled that the lower court did not abuse its discretion in concluding that the statutory purpose was satisfied as of January 2007. The Court rejected Shell's suggestions that an earlier date was appropriate and the Wickenses's suggestions that a later date was required. Next, the Court upheld (with a small clerical error reversed and remanded) the deduction for fees incurred by Shere’s wife. There was nothing wrong with the her time entries. They could have been billed as non-attorney time -- but were improperly billed as attorney time. Finally, the Court concluded that the district court did not clearly err in its award of expert costs after January 2007. On Shere’s cross-appeal, the Court a) found no abuse of discretion in denying prejudgment interest, b) concluded that Shell suffered no prejudice from Shere’s insurance concealment and found no error in the court's denial of relief, and c) refused to consider Shere’s complaint that the district court was unduly critical of his litigation conduct.

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CARMICHAEL v. VILLAGE OF PALATINE (May 21, 2010)

Palatine police officer Timothy Sharkey stopped an automobile being driven by Albert Carmichael and Keith Sawyer as they returned to their motel parking lot. Sharkey searched both Carmichael and the automobile. He found marijuana and cocaine. When asked why he had pulled them over, Sharkey stated that it was because the automobile lacked a front license plate and had tinted windows. After fellow officer Steve Bushore arrived, Sharkey conducted a search of Sawyer. In the motel parking lot, he pulled Sawyer's pants down and shined a flashlight into his underwear. The officers let Sawyer go but arrested Carmichael on drug charges. They also cited him for having no functioning taillights. In his report, Officer Sharkey made no mention of the tinted windows or absence of front license plate. At a hearing on a motion to suppress the evidence, Sharkey testified that the reason for his stop was the non-functioning tail lights, not the license plate or tinted window. Other testimony established that the tail lights were functioning at the time of the stop. The trial judge suppressed the evidence and all charges were dropped. Carmichael and Sawyer sued the Village and the officers under § 1983. They alleged unreasonable search and seizure, false arrest, and excessive force, as well as state law claims. Judge Kendall (N.D. Ill.) granted summary judgment to the defendants. She concluded, on the search and seizure claim, that the fact that a window was tinted and the front plate was missing provided probable cause. On Sawyer's unreasonable search claim, she concluded that it was constitutional without any detailed examination of the manner in which it was carried out. The court found the remainder of the claims waived. Carmichael and Sawyer appeal.

In their opinion, Judges Ripple, Manion, and Williams affirmed in part and reversed and remanded in part. A traffic stop is reasonable, said the Court, if the police have probable cause to believe that a violation has occurred. The inquiry is an objective one and focuses on what the officer knew at the moment of the stop. Here, the tinted window and missing license plate did constitute moving violations and could have supported a stop of the vehicle. However, the uncontroverted evidence is that Officer Sharkey was not aware of either violation at the time to stop. Therefore, probable cause did not exist. For much the same reason, the Court concluded that Sharkey was not entitled to qualified immunity. The Court also found summary judgment with respect to the search of Sawyer in error. Although the defendants purported to request summary judgment on all counts, they made no mention of this search in their brief in the district court. They bear the initial burden of demonstrating that the summary judgment requirements are met -- they failed to do so. Conversely, the district court was correct in concluding that the plaintiffs waived the remainder of their federal and state law claims because of their perfunctory response to the defendants' request for summary judgment on those issues.

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LINE CONSTRUCTION BENEFIT FUND v. ALLIED ELECTRIC CONTRACTORS (January 8, 2010)

Allied Electric Contractors has been a member of the National Electrical Contractors Association (NECA), an association of union employers, since 2002. It has been making employee benefit contributions to Line Construction Benefit Fund since the 1990s. In 2005, NECA entered into a Collective Bargaining Agreement (CBA) with the union. It set forth the terms of employer contributions to the Fund and increased the hourly contribution by a quarter. By its own terms, it bound all employers who signed a letter of consent. Although Allied did not sign a letter of consent until December of 2006, it continued to make the required contributions, including the extra quarter, until July 2006. It failed to make contributions for July, August, and December of 2006 as well as for January and February of 2007. The Fund brought suit under ERISA. The court denied Allied's motion to dismiss and granted summary judgment to the Fund. Allied appeals.

In their opinion, Judges Cudahy, Wood, and Tinder affirmed. The Court first addressed Allied's argument that the Fund had no cause of action under ERISA. It concluded that a multiemployer plan is authorized to bring suit under section 502(e) of ERISA as a plan fiduciary, reaffirming its holding in Vanguard Car Rental. The Court then rejected Allied's position that the CBA requirement of a signed letter of consent excused its nonpayment. Conduct manifesting consent, said the Court, is sufficient. Here the undisputed events, including the payments in early 2006 and the payments reflecting the additional quarter contribution, established that consent. Finally, the Court concluded that the CBA met the LMRA's requirement that an employer must have a written agreement before it makes contributions to employee benefit funds.

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CRICHTON v. GOLDEN RULE INSURANCE COMPANY (August 5, 2009)

For almost ten years, John Crichton purchased group health insurance from Golden Rule Insurance Co. He did so as a member of the Federation of American Consumers and Travelers ("Federation"). He filed a class action in 2002, alleging violations of the Illinois Consumer Fraud and Deceptive Business Practices Act ("ICFA"), class allegations under other states’ consumer fraud statutes, RICO and common law fraud. The basis of each of the claims was that Golden Rule failed to disclose, when it sold its insurance, that renewal premiums escalated dramatically. The district court dismissed the claims for failure to state a cause of action. Crichton appeals.

In their opinion, Judges Kanne, Evans and Sykes affirmed. With respect to the ICFA count, the Court relied on the Illinois Supreme Court's decision in Avery. Avery held that a non-resident of Illinois did not have a cause of action under the ICFA unless the transaction at issue occurred primarily and substantially in Illinois. Crichton lives in Florida and Golden Rule has its principal place of business in Indiana. Golden Rule is incorporated in Illinois and maintains an office in Illinois but that is not enough to support an ICFA claim. The Court also agreed with the district court that, to the extent Crichton was asserting a claim under Florida's statute, it failed because Florida does not allow suits against insurers. The Court then held that an element of the common law claim of fraudulent concealment was a duty to disclose. No such duty existed on the part of Golden Rule, either through its relationship with Crichton or its partial disclosures. Finally, the Court concluded that the RICO claim was properly dismissed. A RICO claim must identify the "enterprise." Crichton simply describes the marketing relationship between Golden Rule and the Federation. That relationship is insufficient to amount to an enterprise on which a RICO claim can be based. 

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