Weekly Case Digests November 15, 2021 - November 19, 2021.

Byline: Derek Hawkins

7th Circuit Digests

7th Circuit Court of Appeals

Case Name: New West, L.P., et al., v. Marcia L. Fudge

Case No.: 21-1372

Officials: SYKES, Chief Judge, and EASTERBROOK and BRENNAN, Circuit Judges.

Focus: Breach-of-contract Conversion of Property

After the City of Joliet, Illinois, condemned a housing development managed by New West and New Bluff (collectively New West), and paid $15 million for the properties, the parties disagreed about the appropriate disposition of a fund worth roughly $2.7 million. This fund established under contracts between New West and the Department of Housing Development had a stated goal of ensuring that money would be available for maintenance and repair of the properties if New West defaulted on its obligations to tenants or the Department. New West maintains that, because it is no longer responsible for maintenance or repair, it should receive the money. But the Department has refused New West's demands for payment and is holding the money for the benefit of Joliet, which succeeded New West as the buildings' proprietor.

A dispute about the disposition of the reserve fund arose during the condemnation proceeding, but we held in Joliet v. New West, L.P., 921 F.3d 693 (7th Cir. 2019) (New West V), that the issue calls for a separate suit with the Department as defendant. This suit is the result. The district judge granted the Department's motion for summary judgment. 2021 U.S. Dist. LEXIS (N.D. I11. Feb. 4, 2021).

New West V reaches two conclusions pertinent to current suit: first, that 12 U.S.C. 1702 waives the Department's sovereign immunity to a claim based on a contract; second, that only a contract, rather than a statute or regulation, offers New West any prospect of success. The parties take these conclusions as given, so we need to resolve a dispute about the meaning of the contracts between New West and the Department.

To have a claim for tortious conversion of property, New West must first establish that the money in the reserve find is its property. In other words, to win a tort claim New West must first win its contract claim and if it had been able to prevail on the contract claim (which it didn't) New West would not have needed a conversion claim as a fallback.

Affirmed

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7th Circuit Court of Appeals

Case Name: Maximo Fernandez, et al., v. Kerry, Inc.,

Case No.: 21-1067

Officials: SYKES, Chief Judge, and EASTERBROOK and BRENNAN, Circuit Judges.

Focus: Collective Bargaining Agreement Arbitration

Five persons who used to work for Kerry, Inc., in Illinois filed this suit as a class action in state court. They seek damages under the state's Biometric Information Privacy Act (BIPA or the Act), 740 ILCS 14/5 to 14/25. The Act requires private entities to obtain consent before collecting or using biometric information, including fingerprints. (It has other provisions that we need not discuss.)

In 2011 Kerry began requiring workers to use fingerprints to clock in and out. Plaintiffs say that Kerry did not obtain their consent before doing so. Kerry removed the suit to federal court under 28 U.S.C. 1453, asserting that the class's total damages could exceed $5 million and that the statutory requirement of some diverse citizenship is satisfied. Plaintiffs do not deny these jurisdictional allegations. Kerry asked the district court to dismiss the suit as preempted by 301 of the Labor Management Relations Act, 29 U.S.C. 185, because resolution depends on interpretation of collective-bargaining agreements between Kerry and the union that represented plaintiffs while they worked there. Federal law prevents states from interfering in relations between unions and private employers. We held in Miller v. Southwest Airlines Co., 926 F.3d 898, 90305 (7th Cir. 2019), that provisions in the Railway Labor Act parallel to 301 prohibit workers from bypassing their unions and engaging in direct bargaining with their employers about how to clock in and out.

Anticipating that we would find Miller controlling, plaintiffs ask us to send this dispute to arbitration. Apart from the fact that plaintiffs did not make such a request in the district court, there is the fact that collective-bargaining agreements usually leave grievances to be worked out between the union and management. Counsel said at argument that the collective-bargaining agreements in question do not permit workers to demand arbitration if the union is content to forego that procedure, and they added that the unionLocal 781 of the Miscellaneous Warehousemen, Airline, Automotive Parts, Service, Tire and Rental, Chemical and Petroleum, Ice, Paper, and Related Clerical and Production Employees Unionhas not requested arbitration. We are not authorized to usurp the union's authority to decide whether a grievance with management needs an arbitrator's resolution (or, indeed, whether there is any grievance to resolve). And plaintiffs have not contended that Local 781's choices violate its duty of fair representation, nor have they joined it as a defendant.

Affirmed

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7th Circuit Court of Appeals

Case Name: Christos Dimas v. George Stergiadis

Case No.: 20-1196

Officials: EASTERBROOK, WOOD, and KIRSCH, Circuit Judges.

Focus: Breach of Contract Equalize Capital Contributions

Christos Dimas appeals a judgment ordering him to pay his former business partner, George Stergiadis, for capital contributions Stergiadis made to their failed business, 1600 South, LLC. Stergiadis's recovery effort began in 2008 when he sued Dimas and their other business partner, Dean Theo, in Illinois state court. But Dimas's bankruptcy filingsseven petitions in six yearsstalled the suit. Stergiadis filed a proof of claim in the most recent bankruptcy for the capital contributions. Dimas objected to the claim, but the bankruptcy court approved it in the amount of $618,974 after an evidentiary hearing. The court reasoned that, under Illinois law, the partners had an implied-in-fact contract to equalize capital contributions to the LLC, and Dimas thus owed Stergiadis the awarded amount to achieve equality. The district court affirmed.

On appeal, Dimas argues that the bankruptcy court misinterpreted 1600 South's operating agreement. Specifically, he insists that the operating agreement's plain language precludes an implied-in-fact contract to equalize capital contributions. He also contends that the bankruptcy court erred when it relied on extrinsic evidence to find an implied-in-fact contract existed among 1600 South's partners. We disagree, and thus affirm.

Affirmed

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7th Circuit Court of Appeals

Case Name: David Minnick v. Dan Winkleski, Warden,

Case No.: 20-3253

Officials: FLAUM, HAMILTON, and BRENNAN, Circuit Judges.

Focus: Ineffective Assistance of Counsel

David Minnick pleaded no contest in Wisconsin state court to several crimes that resulted from a violent confrontation involving his then-wife. He received sentences totaling 27 years of initial confinement. Since then, Minnick has brought a series of unsuccessful challenges to his convictions in state and federal courts.

The district court denied Minnick's request for federal habeas relief under 28 U.S.C. 2254. That court decided that Minnick's trial counsel was not ineffective for advising him that a term of not more than ten years of initial confinement was likely. The court also ruled that Minnick did not show that any reasonable trial counsel would have advised him of the possibility of withdrawing his no contest pleas before sentencing. So not offering that argument did not deny Minnick the right to effective postconviction counsel.

Although Minnick's claims could have been analyzed differentlyincluding whether the state court's decision on his trial counsel's sentencing advice warranted deference under the Antiterrorism and Effective Death Penalty Act (AEDPA), 28 U.S.C. 2254the correct result was reached. We affirm the denial of habeas relief.

Affirmed

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7th Circuit Court of Appeals

Case Name: Chicago Teachers Union, et al., v. Board of Education of the City of Chicago

Case No.: 20-1167

Officials: FLAUM, ROVNER, and WOOD, Circuit Judges.

Focus: Summary Judgment Title VII Violation

Citing an alleged budget deficit, the Board of Education of the City of Chicago ("the Board") laid off approximately 1,077 teachers and 393 paraprofessional educators in the summer of 2011. The Chicago Teachers Union and a class of teachers (collectively "CTU") filed suit against the Board alleging that the layoffs discriminated against African American teachers and paraprofessionals in violation of Title VII of the Civil Rights Acts of 1964 and the Civil Rights Act of 1991, 42 U.S.C. 2000e et seq. The district court granted summary judgment in favor of the Board on the parties' cross-motions for summary judgment. CTU appeals, but we affirm.

Affirmed

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7th Circuit Court of Appeals

Case Name: United States of America v. William A. Julius

Case No.: 20-2451

Officials: KANNE, HAMILTON, and ST. EVE, Circuit Judges.

Focus: Admission of Evidence Expert Testimony

A jury found that William Julius set fire to the building where his ex-girlfriend was living after she spurned his attempts to rekindle their relationship. On appeal Julius argues that the district court erred in allowing lay witnesses to offer expert testimony about the process of extracting data from his cellphone and in cutting off his cross-examination of one of those witnesses. We find no reversible errors and affirm.

Affirmed

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7th Circuit Court of Appeals

Case Name: Rock River Health Care, LLC, et al., v. Theresa A. Eagleson

Case No.: 19-2750

Officials: EASTERBROOK, MANION, and ROVNER, Circuit Judges.

Focus: Due Process Violation

Plaintiffs Rock River Health Care, LLC, International Nursing & Rehab Center, LLC, and Island City Rehabilitation Center, LLC, (collectively the "Providers") brought suit under 42 U.S.C. 1983 and the...