Weekly Case Digests October 12, 2020 October 16, 2020.

Byline: Rick Benedict

7th Circuit Digests

7th Circuit Court of Appeals

Case Name: Smart Oil, LLC, v. DW Mazel, LLC

Case No.: 19-2542

Officials: MANION, BARRETT, and BRENNAN, Circuit Judges.

Focus: Breach of Contract Summary Judgment

Smart Oil, LLC agreed to sell thirty parcels of land with gas stations and convenience stores to DW Mazel, LLC ("DWM"). DWM failed to close under the agreement, which by its terms granted Smart Oil the earnest money for the transaction as liquidated damages. But DWM never paid that money, and Smart Oil sued. DWM counter- claimed for breach of contract and fraudulent inducement.

The district court granted Smart Oil summary judgment, ruling that DWM breached the agreement by not paying the earnest money, which Smart Oil was entitled to as liquidated damages under Illinois law. The court also ruled that DWM's counterclaims for breach of contract and fraudulent inducement failed for the same reason. DWM appeals. The district court ruled correctly in all respects, so we affirm.

Affirmed

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7th Circuit Court of Appeals

Case Name: United States of America ex. rel. CIMZNHCA, LLC, v. UCB, Inc., et al.,

Case No.: 19-2273

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

Focus: Appellate Jurisdiction

The False Claims Act allows the United States government to dismiss a relator's qui tam suit over the relator's objection with notice and opportunity for a hearing. 31 U.S.C. 3730(c)(2)(A). The Act does not indicate how, if at all, the district court is to review the government's decision to dismiss. The D.C. Circuit has said not at all; the Ninth Circuit has said for a rational basis. Compare Swift v. United States, 318 F.3d 250 (D.C. Cir. 2003), with United States ex rel. Sequoia Orange Co. v. Baird-Neece Packing Corp., 151 F.3d 1139 (9th Cir. 1998). In this case, the district court said it agreed with the Ninth Circuit but applied something closer to administrative law's "arbitrary and capricious" standard and denied dismissal. The government has appealed. The relator contends we should either dismiss for want of appellate jurisdiction or affirm.

We find that we have jurisdiction and reverse. First, we interpret the Act to require the government to intervene as a party before exercising its right to dismiss under 3730(c)(2)(A). We think it best, however, to construe the government motion here as a motion to both intervene and dismiss. This solves the jurisdictional problem without needing to create a new category of collateral-order appeals. On the merits, we view the choice between the competing standards as a false one, based on a misunderstanding of the government's rights and obligations under the False Claims Act. And by treating the government as seeking to intervene, which it should have been allowed to do, we can apply a standard for dismissal informed by Federal Rule of Civil Procedure 41.

Reversed and remanded

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7th Circuit Court of Appeals

Case Name: United States of America v. Blair Cook

Case No.: 18-1343

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

Focus: Jury Instructions

A jury convicted Blair Cook of being an unlawful user of a controlled substance (marijuana) in possession of a firearm and ammunition. See 18 U.S.C. 922(g)(3) (proscribing possession of firearm by unlawful user of controlled substance), 924(a)(2)(specifying penalties for one who "knowingly" violates section 922(g)). Cook appealed his conviction, contending that the statute underlying his conviction is facially vague, that it improperly limits his Second Amendment right to possess a firearm, and that the district court did not properly instruct the jury as to who constitutes an unlawful user of a controlled substance. We affirmed Cook's conviction. United States v. Cook, 914 F.3d 545 (7th Cir. 2019). The Supreme Court subsequently held in Rehaif v. United States, 139 S. Ct. 2191, 2194, 2200 (2019), that the knowledge element of section 924(a)(2) requires the government to show that the defendant knew not only that he possessed a firearm, but that he belonged to the relevant category of persons barred from possessing a firearm. Consistent with the prior case law of this court, the superseding indictment in this case did not allege, nor the jury instructions advise the jury that it must find, that Cook knew he was an unlawful user of a controlled substance. Cook's petition for a writ of certiorari was pending at the time that Court was considering Rehaif, and Cook had suggested that if the Court in Rehaif expanded the knowledge requirement of section 924(a)(2) to include knowledge of one's status, the Court ought to remand his case for further proceedings. Petition for Writ of Certiorari at 2526, Cook v. United States, No. 18-9707 (U.S. June 12, 2019). The Court subsequently granted Cook's petition, vacated our decision sustaining his conviction, and remanded for reconsideration in light of Rehaif, as Cook had asked it to do. Cook v. United States, 140 S. Ct. 41 (Oct. 7, 2019).Upon reconsideration, we now reincorporate our previous decision, with minor modifications, rejecting Cook's vagueness and Second Amendment challenges to section 922(g)(3) along with his objection to the jury instruction on who constitutes an unlawful user of a controlled substance. But in light of Rehaif, we conclude that Cook is entitled to a new trial.

Reversed and remanded

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7th Circuit Court of Appeals

Case Name: Tim Jon Semmerling v. Cheryl T. Bormann, et al.,

Case No.: 19-3211

Officials: BRENNAN, Circuit Judge (in chambers).

Focus: Court Error Motion for Summary Affirmance

Appellee the United States asks this court to summarily affirm the district court's dismissal of appellant Tim Jon Semmerling's complaint because his appellate brief does not assert any error in the district court's decision.

Semmerling worked as a contractor for the U.S. Military Commissions Defense Organization as part of the legal team for a person charged as an al-Qaeda enemy combatant. Semmerling, who is gay, disclosed his sexuality to the lead attorney of that team, and Semmerling alleges that, despite promising secrecy, that attorney disclosed his sexuality to the client and told the client that Semmerling was infatuated with the client and was pursuing that interest.

Semmerling sued the lead attorney for state-law torts of defamation, negligence, and intentional infliction of emotional distress, and he sued the United States under the Federal Tort Claims Act, 28 U.S.C. 2674, for negligence and intentional infliction of emotional distress. Both defendants moved to dismiss the complaint for failure to state a claim, FED.R. CIV. P. 12(b)(6), and the district court granted their motions. Semmerling has appealed and by counsel submitted a seven-page brief that is light on factual details and legal analysis. The United States moves for summary affirmance. It highlights the sparseness of Semmerling's brief and asserts that summary affirmance is appropriate here because "[s]ummary affirmance may be in order when the arguments in the opening brief are incomprehensible or completely insubstantial." United States v. Fortner, 455 F.3d 752, 754 (7th Cir. 2006) (citing Lee v. Clinton, 209 F.3d 1025, 102527 (7th Cir. 2000), and Williams v. Chrans, 42 F.3d 1137, 1139 (7th Cir. 1994)). The co-appellee did not join the government's motion. She has filed a responsive brief in which she argues that Semmerling has waived any argument against the district court's order. She also defends the order on its merits.

The motion for summary affirmance is DENIED without prejudice to renewal of the arguments in the government's brief. Semmerling may, within seven days from this opinion, seek leave to strike his opening brief and to file a brief that complies with Rule 28. If he chooses to do so, this court will reset a briefing schedule, and the appellees may submit, along with their briefs, a request for reasonable attorney's fees paid by Attorney Wigellfor the work required to produce the first, unnecessary response.

Denied

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7th Circuit Court of Appeals

Case Name: Scott Hildreth v. Kim Butler, et al.,

Case No.: 18-2660

Officials: SYKES, Chief Judge, FLAUM, EASTERBROOK, KANNE, ROVNER, WOOD, HAMILTON, BARRETT, BRENNAN, SCUDDER, and ST. EVE, Circuit Judges.

Focus: Petition for Rehearing En Banc

On consideration of plaintiff-appellant's petition for rehearing and rehearing en banc, filed on June 16, 2020, a majority of the panel voted to deny rehearing. A judge in regular active service requested a vote on the petition for rehearing en banc. A majority of judges in regular active service voted to deny the petition for rehearing en banc. Judges Rovner, Wood, Hamilton, and Scudder voted to grant the petition for rehearing en banc.

Accordingly, the petition for rehearing and rehearing en banc is...