Weekly Case Digests September 16, 2019 September 20, 2019.

Byline: WISCONSIN LAW JOURNAL STAFF

7th Circuit Digests

7th Circuit Court of Appeals

Case Name: Rajesh Gupta v. Morgan Stanley Smith Barney, LLC, et al.

Case No.: 18-3584

Officials: SYKES, BRENNAN, and SCUDDER, Circuit Judges.

Focus: Arbitration

This appeal presents a question of contract formation. After Rajesh Gupta sued his former employer Morgan Stanley for discrimination, retaliation, and defamation, the company moved to compel arbitration. Morgan Stanley contends Gupta agreed to arbitrate these claims after he did not opt out of the company's arbitration agreement. Gupta responds that during his employment he neither saw an arbitration offer nor agreed to arbitrate employment-related disputes. The district court sided with Morgan Stanley and sent the parties off to arbitration. Gupta appeals this ruling, and we affirm.

Affirmed

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7th Circuit Court of Appeals

Case Name: Christopher Regan, et al. v. City of Hammond, Indiana

Case No.: 18-3051

Officials: WOOD, Chief Judge, and BAUER and ROVNER, Circuit Judges.

Focus: Dormant Commerce Clause

The plaintiffs in this case press a dormant commerce clause challenge to a local ordinance that requires a residential property owner who wishes to make repairs to the residence either to obtain a license or to hire a licensed contractor; but a homeowner making repairs to the single-family residence he or she occupies is exempted from this requirement. The plaintiffs argue that this scheme discriminates against interstate commerce and to that extent is contrary to the dormant commerce clause. But the ordinance draws no distinction between in-state or out-of-state property owners and imposes no burden on interstate commerce. We therefore affirm the district court's entry of summary judgment against the plaintiffs.

Affirmed

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7th Circuit Court of Appeals

Case Name: Mark A. Campbell v. Kevin Kallas, et al.

Case No.: 18-2075

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

Focus: Qualified Immunity

Mark Campbell, also known as Nicole Rose Campbell, is an inmate in the Wisconsin prison system. In 2007 Campbell pleaded guilty to first-degree sexual assault of a child and is now serving a 34-year sentence. Campbell has been diagnosed with gender dysphoria; she is biologically male but identifies as female. Department of Corrections ("DOC") medical staff are treating Campbell's condition with cross-gender hormone therapy.

Beginning in September 2013, Campbell repeatedly requested a more radical intervention: sex-reassignment surgery. National standards of care recommend that patients undertake one year of "real life" experience as a person of their self-identified gender before resorting to irreversible surgical options. That preparatory period presents challenges for officials charged with the administration of sex-segregated prisons. DOC officials consulted an outside expert, who determined that Campbell was a potential surgical candidate. But the expert's cautious conclusion was conditioned on DOC officials developing a safe, workable solution to the real-life-experience dilemma. Citing these concerns and DOC policy, officials denied Campbell's request.

After filing grievances and exhausting administrative appeals, Campbell sued Dr. Kevin Kallas, the DOC Mental Health Director, and a host of other prison officials under 42 U.S.C. 1983. She alleged that the defendants were deliberately indifferent to her serious medical needs in violation of the Eighth Amendment and sought damages and injunctive relief. Both sides moved for summary judgment, and the defendants also claimed qualified immunity. The district court denied the motions. As relevant here, the judge rejected the claim of qualified immunity, concluding that caselaw clearly established a constitutional right to effective medical treatment.

We reverse. Qualified immunity shields a public official from suit for damages unless caselaw clearly puts him on notice that his action is unconstitutional. The judge's approach to the qualified-immunity question was far too general. The Eighth Amendment requires prison healthcare professionals to exercise medical judgment when making decisions about an inmate's treatment. And they cannot completely deny the care of a serious medical condition. But cases recognizing those broad principles could not have warned these defendants that treating an inmate's gender dysphoria with hormone therapy and deferring consideration of sex-reassignment surgery violates the Constitution. Moreover, it's doubtful that a prisoner can prove a case of deliberate indifference when, as here, prison officials followed accepted medical standards. The defendants are immune from damages liability.

Reversed

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7th Circuit Court of Appeals

Case Name: United States of America v. Steven A. Adams

Case No.: 18-2932

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

Focus: Sentencing Guidelines

Defendant Steven Adams pleaded guilty to being a felon in possession of a firearm. In this appeal, he challenges the district court's denial of his motion to suppress and its application of the Sentencing Guidelines to his case. We affirm. Probable cause supported the search warrant for Adams' house, and in any event the officers could rely on the warrant in good faith. Further, the district court properly calculated Adams' guideline range, taking into account his prior drug conspiracy conviction.

Affirmed

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7th Circuit Court of Appeals

Case Name: United States of America v. Curtis L. Johnson

Case No.: 18-2350

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

Focus: Sentencing Appeal Waiver

During an in-chambers conference among court and counsel, Curtis Johnson's attorney withdrew an objection to the restitution amount to be paid to the victims of his client's wire fraud. Johnson was not present. Then, in open court, Johnson confirmed he no longer disputed restitution, recognized the plea agreement included an appeal waiver, pleaded guilty, and was sentenced. Johnson now challenges his sentence, arguing he did not waive this appeal and his sentence is unconstitutional because he was not present when his attorney dropped the restitution objection. We uphold the appeal waiver and dismiss Johnson's appeal.

Dismissed

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7th Circuit Court of Appeals

Case Name: Holly B. Vanzant, et al. v. Hill's Pet Nutrition, Inc., et al.

Case No.: 17-3633

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

Focus: Restitution Unjust Enrichment

Holly Vanzant and Dana Land own cats with health problems. Their veterinarians prescribed cat food manufactured by Hill's Pet Nutrition, Inc., and sold under Hill's "Prescription Diet" brand. For several years Vanzant and Land purchased this higher-priced cat food from their local PetSmart stores using their veterinarian's prescriptions. They eventually learned, however, that the Prescription Diet cat food is not materially different from nonprescription cat food. And the prescription requirement is illusory; no prescription is necessary. Feeling deceived, Vanzant and Land filed a class-action lawsuit against Hill's and PetSmart, Inc., asserting claims under the Illinois Consumer Fraud and Deceptive Business Practices Act, 815 ILL. COMP. STAT. 505/1 et seq., and for unjust enrichment.

The district judge dismissed the Consumer Fraud Act claim for two reasons: (1) the complaint lacked the specificity required for a fraud claim; and (2) the claim is barred by a statutory safe harbor for conduct specifically authorized by a regulatory bodyhere, the U.S. Food and Drug Administration ("FDA"). The judge dismissed the unjust-enrichment claim because it was premised on the same conduct as the statutory claim.

We reverse. First, the safe-harbor provision does not apply. Under the Food, Drug, and Cosmetic Act, 21 U.S.C. 301 et seq., pet food intended to treat or prevent disease and marketed as such is considered a drug and requires approval of a new animal drug application. Without FDA approval, the manufacturer may not sell it in interstate commerce and the product is deemed adulterated and misbranded. The FDA issued guidance recognizing that most pet-food products in this category do not have the required approval; the guidance states that the agency is less likely to initiate an enforcement action if consumers purchase the food through or under the direction of a veterinarian (among other factors guiding the agency's enforcement discretion). But the guidance does not specifically authorize the conduct alleged here, so the safe harbor does not apply.

And the plaintiffs pleaded the fraud claim with the particularity required by Rule 9(b) of the Federal Rules of Civil Procedure. So the statutory claim may proceed. The unjust enrichment claim is more appropriately construed as a request for relief in the form of restitution based on the alleged fraud. In Illinois unjust enrichment is not a separate cause of action but is a condition brought about by fraud or other unlawful conduct. Toulon v. Cont'l Cas. Co., 877 F.3d 725, 741 (7th Cir. 2017). The request for restitution based on unjust enrichment therefore rests entirely on the consumer fraud claim, and it too may move forward.

Reversed

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7th Circuit Court of Appeals

Case Name: Federal Trade Commission v. Credit Bureau Center, LLC, et al.

Case No.: 18-2847; 18-3310

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

Focus: Restitution Award

Michael Brown is the sole owner and operator of Credit Bureau Center, a credit-monitoring service. (We refer to both collectively as "Brown.") Brown's websites used what's known as a "negative option feature" to attract customers. The websites offered a "free credit report and score" while obscuring a key detail in much smaller text: that applying for this "free" information automatically enrolled customers in an unspecified $29.94 monthly "membership" subscription. The...