Justia Government & Administrative Law Opinion Summaries

Articles Posted in US Court of Appeals for the Seventh Circuit
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The Consumer Financial Protection Bureau (CFPB) brought an action against Townstone Financial, Inc. and its CEO, Barry Sturner, alleging that they discouraged black prospective applicants from applying for mortgage loans, violating Regulation B of the Equal Credit Opportunity Act (ECOA). The CFPB cited several statements made by Townstone on their radio show that it claimed would discourage black applicants. These statements included derogatory comments about predominantly black areas and other racially insensitive remarks. The CFPB also provided statistical evidence showing that Townstone received fewer mortgage applications from black applicants compared to its peers.The United States District Court for the Northern District of Illinois granted Townstone's motion to dismiss. The court held that the ECOA does not authorize liability for discouraging prospective applicants, focusing on the ECOA’s definition of "applicant" as someone who has applied for credit. The court concluded that the ECOA’s protections do not extend to prospective applicants who have not yet applied for credit.The United States Court of Appeals for the Seventh Circuit reviewed the case and reversed the district court's decision. The appellate court held that the ECOA, when read as a whole, does authorize the imposition of liability for discouraging prospective applicants. The court found that the ECOA’s broad purpose of preventing discrimination in credit transactions includes actions taken before an application is submitted. The court also noted that the ECOA’s text and legislative history support the interpretation that discouraging prospective applicants is prohibited. The case was remanded for further proceedings consistent with this opinion. View "Consumer Financial Protection Bureau v. Townstone Financial, Inc." on Justia Law

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Cassandra Socha, a patrol officer with the Joliet Police Department (JPD), sent a text message to her neighbor criticizing her for testifying in the criminal trial of Socha’s boyfriend. A prosecutor recommended that Sergeant Edward Grizzle secure a search warrant for Socha’s cell phone, which he did, obtaining authority to search for any and all data related to electronic communications. Socha turned over her phone, expressing concerns about personal content. JPD detectives used forensic software to extract all data from her phone. Rumors later surfaced that explicit content from her phone had been seen by JPD members, with two detectives admitting to viewing such content.Socha sued the City of Joliet, Sgt. Grizzle, and others, bringing multiple claims under federal and Illinois law. The United States District Court for the Northern District of Illinois granted summary judgment to Sgt. Grizzle on the § 1983 claim, finding he was entitled to qualified immunity. The court also granted summary judgment to the City on the intrusion upon seclusion claim, rather than relinquishing supplemental jurisdiction over the Illinois law claim.The United States Court of Appeals for the Seventh Circuit reviewed the case. The court agreed that Sgt. Grizzle was entitled to qualified immunity and affirmed the summary judgment on the § 1983 claim. However, the court disagreed with the district court on the intrusion upon seclusion claim, concluding that a reasonable jury could find that Detective McKinney accessed Socha’s photograph intentionally and without authorization. Therefore, the court reversed the grant of summary judgment on that claim and remanded the case for further proceedings. The court also noted that the district court should decide whether to exercise supplemental jurisdiction over the state law claim on remand. View "Socha v. City of Joliet" on Justia Law

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The case revolves around Larry Sapp, an Army veteran with a history of felony drug convictions, who was elected to the Sauk Village Board of Trustees in Illinois. However, his felony convictions came to the attention of the Cook County State’s Attorney’s Office, which used two Illinois statutes to remove him from his position. These statutes bar certain felons from holding public office. Sapp challenged the constitutionality of these statutes, arguing that they violated the Eighth Amendment's clauses on Cruel and Unusual Punishment and Excessive Fines by barring him from public service and depriving him of the income a career in public service would generate.The Cook County Circuit Court rejected Sapp's arguments, ruling that the statutes' enforcement did not violate the Eighth Amendment. The court held that Sapp was ineligible to serve as a Board Trustee and removed him from his position. Sapp then filed a federal lawsuit against Illinois Governor J.B. Pritzker and State’s Attorney Kimberly Foxx, seeking to bar the Cook County State’s Attorney from enforcing either statute against him in future elections. He reiterated his Eighth Amendment arguments and added a new one, claiming that enforcing the statutes against him would violate the Cruel and Unusual Punishment Clause.The United States Court of Appeals for the Seventh Circuit affirmed the dismissal of Sapp’s complaint. The court did not reach the merits of Sapp's constitutional arguments, instead ruling that they were foreclosed by Illinois principles of collateral estoppel and res judicata. The court held that Sapp's federal lawsuit arose from the same group of operative facts as the State’s Attorney’s quo warranto action in Cook County Court, and thus constituted the same "cause of action" under Illinois law. As a result, Sapp was barred from raising arguments in the federal suit that were available to him in the quo warranto action. View "Sapp v. Foxx" on Justia Law

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The case revolves around Huazhi Han, who was convicted on charges of money laundering and related offenses. Han used his electronic goods business to launder drug proceeds for Mexican drug traffickers. The Drug Enforcement Administration (DEA) and Chicago Police Department (CPD) began investigating a money laundering organization in Chicago, in which Han played a key role. Han received cash proceeds from a drug trafficker, Rafiq Roman, on multiple occasions. After Roman's arrest, he cooperated with the authorities, leading to Han's arrest. The officers found a loaded firearm, approximately $200,000 in cash, and lookalike currency in Han's car. They also searched Han's home, where they found nearly $1.3 million in cash, a money counter, rubber bands, and firearms.Han was indicted on four charges, including conspiracy to commit money laundering and operating an unlicensed money transmitting business. Before trial, Han moved to suppress the evidence seized from his home, arguing that the officers searched his home without a warrant or consent. The district court denied the motion, finding that Han's wife had voluntarily consented to the search. The case proceeded to a jury trial, where Han was convicted on all counts.On appeal, Han argued that the district court erred in denying his motion to suppress, admitting threat evidence, and denying his motion for a mistrial based on the government’s closing argument. The United States Court of Appeals for the Seventh Circuit found no error and affirmed the district court's decision. The court held that Han's wife had voluntarily consented to the search of their home, the threat evidence was admissible as it was directly related to Han's crimes, and the prosecutor's remarks during closing arguments did not result in an unfair trial. View "United States v. Huazhi Han" on Justia Law

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The case involves Roland Black, who was convicted of attempting to possess with intent to distribute a controlled substance, specifically furanyl fentanyl. Law enforcement intercepted a package addressed to Black, believing it contained narcotics. After obtaining a warrant, they found the substance, replaced it with sham narcotics, and delivered the package to Black's residence. Black was arrested after the package was opened and he was found with luminescent powder from the sham narcotics on his hands.Prior to his trial, Black had unsuccessfully moved to dismiss the indictment and suppress all evidence derived from the seizure of the package. He argued that the officers lacked reasonable suspicion to seize the package and requested an evidentiary hearing to resolve related factual disputes. The district court denied these motions, ruling that the totality of the circumstances supported the officers' reasonable suspicion determination.In the United States Court of Appeals for the Seventh Circuit, Black appealed his conviction, raising four arguments. He contended that the officers lacked reasonable suspicion to seize the package, the jury instruction about his requisite mens rea was erroneous, the jury’s verdict was not supported by sufficient evidence, and the court erred in denying his motion to dismiss based on the court’s treatment of furanyl fentanyl as an analogue of fentanyl.The Court of Appeals affirmed the lower court's decision. It found that the officers had reasonable suspicion to seize the package, the jury instruction accurately stated the law, the jury’s verdict was supported by more than sufficient evidence, and Black's motion to dismiss argument was foreclosed by precedent. View "USA v. Black" on Justia Law

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Mario Giannini and Robert Czernek were involved in a series of fraudulent schemes in Bloomingdale Township, Illinois. Giannini worked for Bulldog Earth Movers, a contractor owned by his girlfriend, Debra Fazio. Czernek, the Township's Highway Commissioner, approved inflated invoices from Bulldog, and the excess funds were split between Czernek and Bulldog. Giannini, Czernek, and Fazio were indicted on counts of wire and honest services fraud. Czernek cooperated with the government and pleaded guilty, while Giannini and Fazio proceeded to trial. However, Fazio was acquitted on all counts after the government's case-in-chief.The district court had previously denied Giannini's motion for a mistrial based on the government's late disclosure of investigating agents' notes regarding an inculpatory statement he made to Czernek. Giannini also argued that the court erred in allowing the prosecutors to discuss Fazio's conduct in closing arguments, despite her acquittal.The United States Court of Appeals for the Seventh Circuit affirmed the district court's decision. The court found that the district court did not abuse its discretion in denying the motion for a mistrial, as the late disclosure of the agents' notes did not sufficiently prejudice Giannini. The court also found no error in allowing the prosecutors to discuss Fazio's conduct, as it was highly relevant to the charges against Giannini. The court concluded that even if it was error to allow the comments, it was harmless given the overwhelming evidence against Giannini. View "United States v. Giannini" on Justia Law

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The case revolves around a former coal miner, Richard McLain, who developed a serious lung condition after working underground for nearly two decades. McLain filed a claim under the Black Lung Benefits Act, alleging that his years of mine work had left him totally disabled from a pulmonary perspective. His former employer, Old Ben Coal Company, had been liquidated through bankruptcy, so Liberty Mutual Insurance Company, the surety guaranteeing Old Ben’s debts under the Act, contested liability on the coal company’s behalf.The case was initially heard by an administrative law judge (ALJ), who determined that McLain was disabled within the meaning of the Black Lung Benefits Act. The ALJ's decision was based on a thorough review of the medical record and a set of medical findings regarding how to distinguish between lung disorders arising from coal dust and those arising from tobacco smoke. Old Ben appealed the ALJ’s decision to the Benefits Review Board, arguing that the ALJ erroneously treated the 2001 preamble as if it were binding law and made factual findings unsupported by the medical record. The Review Board affirmed the benefits decision in full.The case was then brought before the United States Court of Appeals for the Seventh Circuit. The court affirmed the decision of the Benefits Review Board, emphasizing the broad discretion ALJs enjoy when evaluating competing medical theories, the weight ALJs may properly attribute to the perspective of the Department of Labor on such issues, and the significant deference owed to ALJs’ medical findings and scientific judgments on appeal. The court found no error in the ALJ's application of a regulatory preamble or in the factual findings that were challenged by Old Ben. View "Safeco Insurance/Liberty Mutual Surety v. OWCP" on Justia Law

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The case revolves around Gerald Sewell, who responded to a post on Craigslist, seeking a sexual encounter. The post was made by an undercover FBI agent posing as a 15-year-old girl. The conversation between Sewell and the agent quickly turned sexual, with plans to meet later the same day. Sewell drove from Missouri to Illinois to meet the supposed minor, only to be arrested upon arrival.Sewell was indicted for attempted enticement of a minor and for traveling across state lines with intent to engage in illicit sexual conduct. He pleaded not guilty and requested a jury instruction on entrapment. The district court denied this request, finding no evidence of persistent persuasion by the undercover agent or reluctance by Sewell. The court concluded that the government had used the sting operation to solicit the crime without inducing Sewell. Sewell was convicted on both counts and sentenced to concurrent ten-year sentences.In the United States Court of Appeals for the Seventh Circuit, Sewell appealed the district court's denial of an entrapment instruction. The court, after reviewing the case, found no evidence of inducement, only solicitation of the crime, which is insufficient to put the entrapment defense before the jury. The court noted that it was Sewell who encouraged the supposed minor to meet for a sexual rendezvous, and he set aside any misgivings he may have had to drive across state lines to meet her. The court concluded that the government had furnished Sewell the ordinary opportunity to commit the charged crime, and he eagerly took it. The court affirmed the district court's decision, denying Sewell's requested entrapment instruction. View "USA v. Sewell" on Justia Law

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The case revolves around Morgan Morales, who appealed against an administrative law judge's (ALJ) decision that she was not disabled and hence, not entitled to Social Security disability benefits. Morales claimed to suffer from several conditions, including bipolar disorder, depression, anxiety, ADHD, and narcolepsy. After being treated at a mental health center and starting on prescription medications, Morales reported that her conditions were in remission. The ALJ, however, denied her application for benefits, finding that her mental impairments were mild and did not limit her ability to perform basic work activities, including her past job as a material handler.Morales challenged the ALJ's decision in the United States District Court for the Southern District of Indiana, Indianapolis Division. She criticized the ALJ's decision about her functional capacity to work but failed to provide evidence compelling the conclusion that the adverse disability decision lacked substantial support in the record. The District Court upheld the ALJ's decision, stating that Morales had not carried her burden of proof and that the ALJ's decision was supported by substantial evidence.The case was then brought to the United States Court of Appeals for the Seventh Circuit. The court affirmed the lower court's decision, stating that Morales had misunderstood the burden she bore on appeal. The court noted that it was not enough to criticize the ALJ's decision; Morales needed to point to evidence compelling the conclusion that the adverse disability decision lacked substantial support in the record. The court also dismissed Morales's criticism of the District Court's decision, stating that the District Court had conducted an adequate review of the ALJ's determination and correctly applied the law. The court concluded that the ALJ's determination was reasonable and supported by substantial evidence, and therefore, affirmed the decision. View "Morales v. O'Malley" on Justia Law

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The case involves Asif Sayeed and three associated healthcare companies who were found liable for violating the Anti-Kickback Statute and False Claims Act, resulting in a nearly $6 million judgment. Sayeed owned a healthcare management company, Management Principles, Inc. (MPI), which managed two smaller companies that provided home-based medical services to Medicare recipients in Illinois. Sayeed's companies received a significant amount of their business from the Healthcare Consortium of Illinois. In December 2010, Sayeed devised a scheme to bypass the Consortium’s referral process by directly soliciting its clients for additional services. MPI signed a Management Services Agreement with the Consortium, which gave MPI full access to its clients’ healthcare data. MPI used this information to identify and directly solicit Medicare-eligible seniors who might want or need additional healthcare services.The district court held a bench trial in July 2019 and found that Sayeed and his companies had not violated the Anti-Kickback Statute or False Claims Act because they had paid the Consortium with the intent to obtain information, not patient referrals. The plaintiff appealed, and the court of appeals reversed the decision, concluding that the defendants' conduct qualified as a form of indirect referral giving rise to an unlawful kickback scheme.On remand, the district court found the defendants liable under both the Anti-Kickback Statute and False Claims Act. The court imposed $5,940,972.16 in damages, which it calculated by trebling the value of the Medicare claims it deemed false and then adding a per-claim penalty of $5,500. The defendants appealed, challenging both the damages award and the underlying finding of liability. The United States Court of Appeals for the Seventh Circuit affirmed the judgment of liability but reversed in part to permit the district court to clarify which Medicare claims, all or some, resulted from the defendants’ illegal kickback scheme. View "Stop Illinois Health Care Fraud, LLC v. Sayeed" on Justia Law