Weekly Case Digests September 27, 2021 October 1, 2021.

Byline: Derek Hawkins

7th Circuit Digests

7th Circuit Court of Appeals

Case Name: Algozine Masonry Restoration, Inc., v. Local 52 Chicago Area Joint Welfare Committee for the Pointing, Cleaning and Caulking Industry, et al.,

Case No.: 20-3384

Officials: WOOD, ST. EVE, and KIRSCH, Circuit Judges.

Focus: Bankruptcy Priorities

Employee benefit plans come in many shapes and sizes. Broadly speaking, some focus on retirement, and others focus on welfare benefits such as health care and disability. If the sponsoring employer falls on hard times and files for bankruptcy, section 507 of the Bankruptcy Code affords priority status up to a specified point to certain types of unsecured claims, including claims for unpaid contributions to an employee-benefit plan. 11 U.S.C. 507(a)(5). The question before us concerns whether the priority limitation found in section 507(a)(5) applies to each fund that seeks unpaid contributions, or if the claims of all funds sponsored by the bankrupt employer must be aggregated.

Affirmed

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7th Circuit Court of Appeals

Case Name: Gorgi Talevski, et al., v. Health and Hospital Corporation of Marion County, et al.,

Case No.: 20-1664

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

Focus: Failure to State Claim

For Gorgi Talevski, living with dementia went from difficult to worse during his stay at Valparaiso Care and Rehabilitation, a state-run nursing facility near his family home in Indiana. Through his wife, Ivanka Talevski, he sued Valparaiso Care, the Health and Hospital Corporation of Marion County (HHC), and American Senior Communities, LLC (ASC) under 42 U.S.C. 1983 for violations of the Federal Nursing Home Reform Act (FNHRA), see 42 U.S.C. 1396r et seq. (We refer to the defendants collectively as Valparaiso Care unless the context requires otherwise.) The district court dismissed the action for failure to state a claim on which relief can be granted, based on its finding that FNHRA does not provide a private right of action that may be redressed under 42 U.S.C. 1983.

This is a difficult area of law, no doubt, and we appreciate the careful attention that both this district court and several others within our circuit have given to this issue. See Terry v. Health & Hospital Corporation, 2012 U.S. Dist. LEXIS 43702 (S.D. Ind. Mar. 29, 2012); Schwerdtfeger v. Alden Long Grove Rehab. & Health Care Ctr., Inc., No. 13 C 8316, 2014 WL 1884471 (N.D. Ill. May 12, 2014); Fiers v. La Crosse County, 132 F. Supp. 3d 1111 (W.D. Wis. 2015). We conclude, however, in keeping with the views of two of our sister circuits, that the court erred. See Grammer v. John J. Kane Reg'l Centers-Glen Hazel, 570 F.3d 520 (3d Cir. 2009); Anderson v. Ghaly, 930 F.3d 1066 (9th Cir. 2019); see generally Maine v. Thiboutot, 448 U.S. 1, 4 (1980) ("[T]he [section] 1983 remedy broadly encompasses violations of federal statutory as well as constitutional law."). We therefore reverse and remand for further proceedings.

Reversed and remanded

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7th Circuit Court of Appeals

Case Name: Alan D. Halperin, et al., v. Mark R. Richards, et al.,

Case No.: 20-2793

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

Focus: ERISA Breach of Fiduciary Duty

We consider in this case whether the Employee Retirement Income Security Act (ERISA) preempts certain state-law claims brought by bankruptcy creditors on behalf of a company against its directors and officers and others alleged to have inflated the company's stock value to conceal the company's decline and to benefit corporate insiders. We hold that ERISA does not preempt the plaintiffs' claims against the company's directors and officers.

ERISA expressly contemplates parallel corporate liability against directors and officers who serve dual roles as both corporate and ERISA fiduciaries. We also hold, however, that ERISA preempts the plaintiffs' claims against the former ERISA trustee of the employee benefit plan and its nonfiduciary contractor. Corporation-law aiding and abetting liability against these defendants would interfere with the cornerstone of ERISA's fiduciary dutiesthe exclusive benefit rule in Section 404, 29 U.S.C. 1104(a)(1)(A).

Affirmed in part. Reversed and remanded in part.

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7th Circuit Court of Appeals

Case Name: Michael L. Millis v. M. Segal

Case No.: 20-1520

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

Focus: Sentencing Guidelines

In 1994, Michael Millis was found guilty of several crimes related to a pair of armed robberies in the Eastern District of Kentucky. At sentencing, Millis's previous convictions qualified him as a career offender under the then-mandatory Sentencing Guidelines. Millis received a total sentence of 410 months' imprisonment and since his confinement, he has sought post-conviction relief at least a dozen times.

Millis does so again here. Attempting to benefit from intervening legal changes that affect his career offender designation, Millis invokes what is often known as the "savings clause" of 28 U.S.C. 2255(e), which would allow him to petition for a writ of habeas corpus under 28 U.S.C. 2241. But the savings clause is a narrow exception to the general rule that a federal sentence must be collaterally attacked under 28 U.S.C. 2255. Millis's sentence on his guidelines counts fell within the range for a non-career offender, so the district court held that his career offender designation had not resulted in a miscarriage of justice, the third element of this court's savings clause test. We agree and affirm the denial of his habeas petition.

Affirmed

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7th Circuit Court of Appeals

Case Name: Bukola Lomi Omowole v. Merrick B. Garland

Case No.: 20-2285

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

Focus: Immigration Removal Order

Bukola Lomi Omowole seeks review of an order of the Board of Immigration Appeals sustaining the findings of two immigration judges that she is both removable from the United States for having procured an entry visa by fraud and not entitled to asylum or withholding of removal. Because the decision of the Board rests on the immigration judges' adverse findings as to Omowole's credibility and that of her ex-husband, and those findings are supported by substantial evidence, we deny the petition for review.

Petition denied

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7th Circuit Court of Appeals

Case Name: Tawanna Ware, et al., v. Best Buy Stores, L.P.,

Case No.: 20-1641

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

Focus: Magnuson-Moss Warranty Act Written Warranty Jurisdiction

This appeal raises a question of first impression about the definition of "written warranty" provided in the Magnuson-Moss Warranty Act, 15 U.S.C. 2301 et seq., a consumer protection statute. But the federal courts lack subject-matter jurisdiction and therefore cannot resolve the issue in this case.

Vacated and remanded

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7th Circuit Court of Appeals

Case Name: Dr. Robert L. Meinders, D.C., Ltd., v. United Healthcare Services, Inc., et al.,

Case No.: 20-2832

Officials: MANION, ST. EVE, and KIRSCH, Circuit Judges.

Focus: Insurance Claim Provider Agreement Arbitration

In 2013, Dr. Robert L. Meinders, D.C., Ltd., received a single fax advertisement from United Healthcare Services, Inc., a company with whom Meinders had done business for around seven years. Meinders believed that, by sending the fax, United violated the Telephone Consumer Protection Act. Accordingly, Meinders sued, and after seven years of litigation, a threshold question remains: Should the litigation proceed in federal court, or should United be allowed to force Meinders to arbitrate? The answer to that question turns primarily on resolving whether United assumed the duties that a related company, American Chiropractic Network, Inc., promised to perform for Meinders in a provider agreement.

The district court held that United had assumed ACN's obligations and as a result could enforce an arbitration clause Meinders had agreed upon with ACN. We agree with the district court, and thus affirm.

Affirmed

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7th Circuit Court of Appeals

Case Name: United States of America v. Keenan Rollerson

Case No.: 20-2258

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

Focus: Sentencing Guidelines

A jury convicted defendant Keenan Rollerson on drug and firearm charges but acquitted him on other drug charges. He appeals only his sentence, arguing that the district court erred by increasing his Sentencing Guideline range based on drug activity for which he was either acquitted or never charged. Specifically, Rollerson claims that the prosecution did not present sufficiently reliable information that he sold heroin and fentanyl to an informant during four controlled drug buys for which he was not charged. He also asserts that those uncharged controlled buys and other drugs for which he was acquitted were not "part of the same course of conduct scheme or plan" as his offenses of conviction. U.S.S.G. 1B1.3(a)(2). We affirm Rollerson's sentence because the conduct at issue was supported by sufficiently reliable information and was relevant to his convictions. To be sure, the record at sentencing on the controlled buys was sparse. But at least in the absence of contradictory evidence, a police officer's affidavit attesting that the buys actually occurred provided the "modicum of reliability" that is needed to find by a preponderance of the evidence that Rollerson committed those additional crimes. See United States v. Helding, 948 F.3d 864, 871 (7th Cir. 2020).

Affirmed

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7th Circuit Court of Appeals

Case Name: United States of America v. Marjory Dingwall

Case No.: 20-1394

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

Focus: Motion in Limine Expert Testimony

Marjory Dingwall was charged with three counts of robbery and three counts of brandishing a firearm during a crime of violence. She admits the robberies but claims she...