Weekly Case Digests - November 12 - November 16, 2018.

Byline: Rick Benedict

7th Circuit Digests

7th Circuit Court of Appeals

Case Name: Francina Smith v. GC Services Limited Partnership

Case No.: 18-1361

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

Focus: FDCPA Violation Arbitration Agreement

Synchrony Bank hired GC Services Limited Partnership to collect a debt Francina Smith purportedly owed on her Sam's Club credit card. In response, Smith sued GC Services for alleged violation of the Fair Debt Collections Practices Act ("FDCPA"), 15 U.S.C. 1601 et seq. Eight months later, GC Services notified Smith that she signed an arbitration agreement with Synchrony Bank when she obtained the credit card. GC Services demanded arbitration. Smith promptly refused. Another five months passed before GC Services filed a motion to compel arbitration. The district court denied the motion after holding that GC Services could not enforce the arbitration agreement on Synchrony Bank's behalf and finding that GC Services waived any right to arbitration. Because of GC Services' gratuitous delay in seeking arbitration, we affirm the district court's decision.


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7th Circuit Court of Appeals

Case Name: Pamela Herrington, et al. v. Waterstone Mortgage Corporation

Case No.: 17-3609

Officials: BAUER, BARRETT, and ST. EVE, Circuit Judges.

Focus: Statutory Interpretation Collective Arbitration

Pamela Herrington filed class and collective actions against Waterstone Mortgage Corporation, her former employer, for wage and hour violations. The district court compelled arbitration pursuant to an agreement between Herrington and Waterstone, but it struck as unlawful a waiver clause that appeared to forbid class or collective arbitration of Herrington's claims. The arbitrator conducted a collective arbitration over Waterstone's objection and ultimately awarded more than $10 million in damages and fees to Herrington and 174 similarly situated employees.

A recent Supreme Court decision has now put this award in doubt. In Epic Systems Corp. v. Lewis, U.S. , 138 S. Ct. 1612 (2018), the Court upheld the validity of waiver provisions like the one in Herrington's agreement with Waterstone. If imposing collective arbitration on Waterstone violated that waiver, we must instruct the district court to vacate the award, which would put Herrington back at square one. But Herrington does not concede that the collective arbitration violated the waiver. In an attempt to save her award, she insists that her agreement with Waterstone affirmatively permits class or collective arbitration of her claims despite the presence of a valid waiver indicating otherwise. While this argument is weak, someone must evaluate itand we must decide who has that job. If the availability of class or collective arbitration is a threshold question of arbitrability, the district court has to decide it. Otherwise, it falls to the arbitrator.

For reasons we explain below, we conclude that the availability of class or collective arbitration is a threshold question of arbitrability. On remand, the district court, rather than the arbitrator, must evaluate Herrington's contract with Waterstone to determine whether it permits class or collective arbitration.


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7th Circuit Court of Appeals

Case Name: United States of America v. Tyree M. Neal, Jr.

Case No.: 17-2976

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

Focus: Plea Withdrawal

At sentencing Tyree M. Neal, Jr. asserted that he was not guilty of conspiring to distribute cocaine because the facts, as he saw them, did not demonstrate that he agreed with others to buy and sell cocaine. The district court responded by observing that Neal had already pleaded guilty and in doing so conceded that the government's factual proffer sufficed to prove the offense of conspiracy. So the court proceeded to sentencing and imposed a term of 30 years' imprisonment, reflecting the scale of the drug-distribution conspiracy as well as Neal's violent conduct while resisting arrest, obstruction of justice, and extensive criminal history. On appeal Neal contends that the district court should have treated the reservations he expressed at sentencing as a motion to withdraw his plea. We affirm, as the record shows not only that Neal voluntarily pleaded guilty, but also that there was a sufficient factual basis to support the plea.


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7th Circuit Court of Appeals

Case Name: Calvin Lindsey v. Vince Macias, et al.

Case No.: 17-2963

Officials: EASTERBROOK, KANNE, and BRENNAN, Circuit Judges

Focus: Court Error Abuse of Discretion

After the State of Illinois dismissed criminal charges against plaintiff-appellant Calvin Lindsey for unlawful possession of a weapon, he filed this civil action asserting claims for false arrest, excessive force, false imprisonment, and malicious prosecution under 42 U.S.C. 1983 and state law assault and battery. At trial, the jury returned a unanimous defense verdict on all counts.

On appeal, Lindsey seeks to vacate the judgment for two reasons. First, he contends the district court erred in refusing to modify its jury instruction on "possession" to stress that "mere proximity" to a gun is insufficient. Second, he asserts the district court abused its discretion by denying the jurors' request for a copy of a potentially impeaching interrogatory answer.

Neither of Lindsey's arguments warrants reversal. Our precedent rejects a requirement that a possession instruction include language expressly disclaiming the sufficiency of "mere proximity," and Lindsey presents no persuasive reason to reconsider those holdings or reach a different result here. And the district court was well within its discretion in refusing to send into the jury room a document not admitted into evidence. Therefore, we affirm.


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7th Circuit Court of Appeals

Case Name: Mark Fritz v. Tony Evers

Case No.: 17-2955

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

Focus: Probable Cause Judicial Review Department of Public Instruction

Wisconsin requires public officials to report certain events or suspicions about teachers to the Superintendent of Public Instruction. Wis. Stat. 115.31(3)(a). When a qualifying report is made, the state lists the teacher on a public website as "under investigation". Wis. Stat. 115.31(6)(b). Such a report was made about Mark Frid in March 2012. In August 2013 the Department of Public Instruction told Frid that the report about him was not supported by probable cause to believe that he had engaged in misconduct. His name was removed from the site. In this suit under 42 U.S.C. 1983 Frid alleges that schools would not hire him while he was under investigation. He contends that the state had to afford him a hearing before puging his name on the list of persons under investigation.

There's a further problem. Frid contends that the Constitution requires a hearing before public notice that a charge is under investigation. Yet our legal tradition is notice first, hearing later. Thus criminal charges are filed, whether by indictment or information, before the accused has an opportunity for a hearing. People are arrested, and criminal investigations begun, before adversarial hearings. If the arrest occurs in a public place, even an ex parte warrant is unnecessary. See United States v. Watson, 423 U.S. 411 (1976). A hearing occurs promptly after an arrest only if the suspect remains in custody. See County of Riverside v. McLaughlin, 500 U.S. 44, 5152 (1991). Civil proceedings also begin long before a hearing. Both civil and criminal charges are public, even though being under a cloud may make it hard for the defendant to get a new job while the proceedings are ongoing.

Probable cause is required to support custody, see Manuel v. Joliet, 137 S. Ct. 911 (2017), but not to support a public charge of crime. "[T]here is no such thing as a constitutional right not to be prosecuted without probable cause." Serino v. Hensley, 735 F.3d 588, 593 (7th Cir. 2013). A criminal trial may occur months if not years after charges become public, and in the interim the accused does not have a constitutional right to a hearing at which a judge will determine whether the grand jury should have issued an indictment. See Kaley v. United States, 571 U.S. 320 (2014).

Administrative investigations likewise precede hearings. The Federal Trade Commission or Securities and Exchange Commission may conduct a public investigation and defer a hearing until after it issues a charge and discovery has concluded...

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