Weekly Case Digests June 28, 2021 July 2, 2021.

Byline: Derek Hawkins

7th Circuit Digests

7th Circuit Court of Appeals

Case Name: Mesa Laboratories, Inc., v. Federal Insurance Company

Case No.: 20-1983

Officials: EASTERBROOK, KANNE, and SCUDDER, Circuit Judges.

Focus: Insurance Claim Duty to Defend TCPA Violation

Mesa Laboratories, Inc., was sued for sending unsolicited fax advertisements, but when it sought a defense from its insurer, its claim was denied. In support of the denial, the insurer cited an exclusion in the policy barring coverage for any claims "arising out of" the Telephone Consumer Protection Act ("TCPA") of 1991.

The question in this case is straightforward: When an insurance policy provides that the insurer has no duty to defend its insured against any claim "arising out of" the TCPA, does that exclusion extend to common-law claims arising from the TCPA-violating conduct? The district court said yes, and we agree. We therefore affirm the district court's decision granting judgment on the pleadings in favor of the insurer.

Affirmed

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7th Circuit Court of Appeals

Case Name: MAO-MSO Recovery II, LLC, et al., v. State Farm Mutual Automobile Insurance Company, an Illinois Company.

Case No.: 20-1268

Officials: SYKES, Chief Judge, and HAMILTON and SCUDDER, Circuit Judges.

Focus: Medicare Act Standing to Sue

For the second time in as many years we affirm the district court's dismissal of a lawsuit brought under the Medicare Act by entities seeking to collect on healthcare receivables assigned to them by so-called Medicare Advantage Organizations. The Medicare Act may authorize the lawsuit but, regardless, the district court rightly recognized that identifying a federal cause of action satisfies only half of the inquiry necessary to establish subject matter jurisdiction. The half left unsatisfied is Article III standing the same shortcoming that resulted in the dismissal of the analogous lawsuit two years ago. Despite ample opportunity, the plaintiffs once again were unable to show any injury in fact. They failed to find within their basket of assigned receivables an example of a concrete and definite amount owed them by the defendant, State Farm Mutual Automobile Insurance Company. In affirming, we sound a word of caution. This lawsuit mirrors scores like it filed in federal courts throughout the country that have all the earmarks of abusive litigation and indeed have drawn intense criticism from many a federal judge. The plaintiffs should think hard before risking a third strike within our Circuit.

Affirmed

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7th Circuit Court of Appeals

Case Name: Rexing Quality Eggs, v. Rembrandt Enterprises, Inc.,

Case No.: 20-1726; 20-1727

Officials: RIPPLE, KANNE, and ROVNER, Circuit Judges.

Focus: Damages

On August 16, 2017, Rexing Quality Eggs and owners Joseph and Leo Rexing (collectively "Rexing") filed a declaratory judgment action in Vanderburgh County, Indiana. They sought a ruling that Rexing was excused from its obligations to purchase eggs under a contract that it had with Rembrandt Enterprises, Inc. ("Rembrandt"). Rembrandt removed the action to federal district court, answered the complaint, and filed a counterclaim seeking damages for Rexing's repudiation of the contract. Rembrandt requested damages, attorneys' fees, and interest.

Following discovery, Rembrandt moved for summary judgment on Rexing's claims as well as on its own counterclaim. The district court granted Rembrandt's motion on liability, but concluded that there were genuine issues of triable fact as to the damages Rembrandt had suffered because of Rexing's repudiation.

After a trial on the damages issue, a jury awarded Rembrandt $1,268,481 for losses on eggs it had resold and another $193,752 for losses on eggs that it was not able to resell. Rembrandt then requested that the court award it interest, attorneys' fees, and costs. The district court denied the request; it determined that the interest term in the parties' agreement was usurious, and, as a result, Rembrandt was not entitled to contractual interest or to attorneys' fees. The district court therefore entered final judgment in the amount of $1,522,302.61. Rexing appealed the damages award in favor of Rembrandt, and Rembrandt cross-appealed the denial of contractual interest and attorneys' fees.

We now affirm the district court's judgment on the damages award. The district court properly concluded that the resale remedy under Iowa's version of the Uniform Commercial Code ("UCC"), Iowa Code 554.2706, was the appropriate mechanism for calculating Rembrandt's damages. Moreover, Rexing waived its arguments challenging the jury's damage award by not presenting them to the district court in a postverdict motion. As for Rembrandt's counterclaim for interest and attorneys' fees, Rembrandt is correct that the parties' agreement fell within the "Business Credit Exception" to Iowa's usury statute, Iowa Code 535.5(2)(a)(5). We therefore reverse the district court's denial of Rembrandt's request for interest and fees, and we remand for further proceedings on these matters.

Affirmed in part. Reversed and remanded in part.

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7th Circuit Court of Appeals

Case Name: Alice L. Gedatus v. Andrew M. Saul

Case No.: 20-1753

Officials: SYKES, Chief Judge, and MANION and ST. EVE, Circuit Judges.

Focus: ALJ Error Disability Benefits

Alice Gedatus seeks social security disability benefits. She alleged many medical conditions, including lumbar degenerative disc disease, sciatica, leg pain, knee pain, wrist difficulties, tremors, and residual effects from a head hemorrhage. Over the years, she underwent multiple surgeries and other treatments. After a hearing, the Administrative Law Judge agreed with Gedatus about several issues, but concluded she could perform light work with some limits, so she was not disabled. No doctor opined she needed more limits than the ALJ determined. The district judge affirmed. Gedatus appeals, raising myriad errors collected in two clusters. First, she argues errors permeate the ALJ's symptom evaluation. Second, she argues the ALJ erred by not setting forth an assessment of her limited sitting tolerance or tremors. We conclude substantial evidence supports the ALJ's decision, and the ALJ did not otherwise reversibly err. So we affirm.

Affirmed

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7th Circuit Court of Appeals

Case Name: Design Basics, LLC, et al., v. Signature Construction, Inc., et al.,

Case No.: 19-2716

Officials: SYKES, Chief Judge, and WOOD and HAMILTON, Circuit Judges.

Focus: Copyright Infringement

Copyright law strikes a practical...