Summaries for September 5, 2015
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AutoNation, Inc. v. Nat'l Labor Relations Bd.
Libertyville Toyota is a 140-employee car dealership with an 80-person service department. In 2011 Libertyville’s owner, AutoNation, became aware of interest in unionization and held meetings with the affected staff, the last of which was surreptitiously recorded. Around the same time, Libertyville suspended an automotive painter, Huerta, after receiving an anonymous voicemail accusing Huerta of promoting the union cause and of receiving a charge of driving under the influence. Huerta was ultimately fired. The Union filed charges with the National Labor Relations Board. An administrative law judge concluded that certain comments by the AutoNation executives at the recorded meeting violated the National Labor Relations Act, but did not uphold the accusation that AutoNation had unlawfully suspended and discharged Huerta because of his union activity. The Board affirmed as to the meeting but reversed as to Huerta’s discharge. The Seventh Circuit determined that the decision was supported by substantial evidence and entitled to enforcement.
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Avila v. CitiMortgage, Inc.
Avila bought his Chicago home with a $100,500 CitiMortgage loan. Five years later, a fire made the house uninhabitable. Avila’s insurance carrier paid out $150,000. CitiMortgage took control of the proceeds and paid $50,000 to get the restoration underway. CitiMortgage later inspected the work and found that it needed to be redone. By then Avila had missed several mortgage payments. CitiMortgage applied the remaining $100,000 toward Avila’s outstanding mortgage loan. Avila’s home was not repaired. CitiMortgage never claimed that restoration was economically infeasible or would reduce its security interest. Nor had any of three special conditions described in the mortgage occurred. Avila sued, alleging breach of fiduciary duty and the mortgage contract, seeking to represent a class of defaulting CitiMortgage borrowers whose insurance proceeds had been applied to their mortgage loans rather than repairs. The district court dismissed, reasoning that the allegations did not support a fiduciary duty on CitiMortgage’s part and Avila was barred from pursuing his contract claim because he had materially defaulted on his own obligations. The Seventh Circuit agreed that allegations of a fiduciary relationship were inadequate as a matter of law, but held that a claim that the mortgage agreement remained enforceable after his missed payments was plausible in light of the agreement’s structure and the remedies it prescribes in the event of default.
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Grace Schools v. Burwell
Religious, not-for-profit organizations challenged the “contraceptive mandate” of the Patient Protection and Affordable Care Act of 2010 (ACA), 42 U.S.C. 300gg-13(a)(4), arguing that the ACA’s accommodations for religious organizations impose a substantial burden on their free exercise of religion, and that the ACA and accompanying regulations are not the least restrictive means of furthering a compelling government interest, in violation of the plaintiffs’ rights under the Religious Freedom Restoration Act of 1993 (RFRA), 42 U.S.C. 2000bb. The district court entered a preliminary injunction. The Seventh Circuit reversed, stating: It is the operation of federal law, not any actions that the plaintiffs must take, that causes the provisions of services that the plaintiffs find morally objectionable. The accommodation has the legal effect of removing from objectors any connection to the provision of contraceptive services.
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United States v. Latin
Anzaldi, DeSalvo, and Latin concocted an $8 million fraudulent tax scheme based on a sovereign citizen-type theory that the U.S. government holds hidden bank accounts for its citizens that can be accessed through various legal maneuvers. By filing false tax returns, the three requested more than $8 million for themselves and others in tax refunds. The IRS accepted five of their returns, paying out more than $1 million in refunds before catching onto the scheme. A jury convicted all three of conspiracy to file false claims, 18 U.S.C. 286 and filing false claims upon an agency of the United States, 18 U.S.C. 287. Anzaldi and Latin appealed their convictions. The Seventh Circuit affirmed, rejecting Anzaldi’s claim that the court should have ordered a competency examination pursuant to 18 U.S.C. 4241(a) before allowing her to represent herself pro se; upholding admission of evidence of how Anzaldi structured her fees to be under $10,000; and rejecting a claim that the court erred by not instructing the jury that willfulness was required to convict, and instead instructing that the defendants had to have acted “knowingly.”
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Fontaine v. Metropolitan Life Ins. Co
In 1989, the Supreme Court held that courts should apply de novo review in suits challenging denials of employee benefits governed by the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1132(a)(1), but if the benefit plan provided expressly for a different, more deferential standard of review, that specific provision would control over the default rule of de novo review. Insurance companies and plan sponsors began including such provisions in most benefit plans, typically saying the insurer or plan administrator would exercise discretionary judgment in interpreting a plan or deciding whether to pay benefits. Courts would then apply a deferential standard of review under which a denial would stand unless it was “arbitrary and capricious.” Later, state laws were adopted to protect employees and plan beneficiaries from abuse of such discretion. An Illinois insurance law, prohibited provisions “purporting to reserve discretion” to insurers to interpret health and disability insurance policies. The Seventh Circuit rejected a preemption challenge and applied the state law in a case involving a challenge to an insurance provider’s definition of “disability,” The court did not address whether the denial of benefits was arbitrary and capricious.
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Showing posts with label U.S. Court of Appeals for the Seventh Circuit. Show all posts
Showing posts with label U.S. Court of Appeals for the Seventh Circuit. Show all posts
Saturday, September 05, 2015
U.S. Court of Appeals for the Seventh Circuit
Tuesday, August 18, 2015
U.S. Court of Appeals for the Seventh Circuit
Summaries for August 18, 2015
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Kramer v. United States
In 1988, Kramer was convicted of conspiring to distribute marijuana, 21 U.S.C. 846, and engaging in a Continuing Criminal Enterprise (CCE), 21 U.S.C. 848(b). Based on a motion filed under 28 U.S.C. 2255, Kramer’s section 846 conviction was vacated in 1998. His section 848 convictionwas affirmed. The Seventh Circuit acknowledged that a section 846 charge could not be counted as one of the section 848 “continuing series” offenses, but held that any error in allowing the jury to consider the section 846 count was harmless, because Kramer had been charged with many additional drug offenses. In 2014, Kramer filed another motion under section 2255, challenging his CCE conviction. The district court dismissed Kramer’s petition, concluding that it lacked subject matter jurisdiction over Kramer’s claim. It characterized Kramer’s motion as successive and barred by section 2255’s prohibition of subsequent petitions. The Seventh Circuit affirmed. The Supreme Court’s 1999 holding in Richardson v. United States invalidated the very jury instruction that was employed in Kramer’s case. If Kramer were tried today, the jury would be required to unanimously agree on the three predicate felonies used to make up the “continuing series” of CCE violations, but the district court properly characterized the petition as successive.
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Hart v. Mannina
The Indianapolis Metropolitan Police Department participated in a reality television program, The Shift. The film crew followed homicide detectives investigating a deadly 2008 home invasion. Police eventually arrested Hart, in the final episode of the program’s first season. After Hart spent nearly two years in jail awaiting trial, the charges were dismissed. The Shift’s audience was not informed. Hart sued detectives and the city under 42 U.S.C. 1983, claiming that he was arrested without probable cause and that the lead detective made false or misleading statements in her probable cause affidavit for his arrest. The court rejected all claims before trial. The Seventh Circuit affirmed, but noted “many troubling aspects of IMPD’s investigation, and this case should warn police departments about having their detectives moonlight as television stars.” A reasonable trier of fact could not find that police lacked probable cause to arrest Hart. Nor could a reasonable jury find that the lead detective made false or misleading statements in her affidavit. Four surviving witnesses from the home invasion separately identified Hart as one of the men who attacked them. None of the police had any reason to doubt these identifications when they arrested Hart.
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Doe v. Teamsters Local Union
In 1999, detainees at the Cook County Juvenile Temporary Detention Center claimed that Center personnel abused detainees. Eight years into the certified class action, the court appointed a “Transitional Administrator” to run the Center in compliance with state and federal requirements. State law, effective in 2008, moved the Center’s management from the county’s political branches to the Circuit Court of Cook County, 55 ILCS 75/3(b), and required the Chief Judge to appoint a new head within 180 days. When the case was argued in 2011, the appointment had not been made. In 2009 the Transitional Administrator proposed reorganization, which would terminate about 225 union employees. The union for Center employees intervened. The district court rejected its position that the proposal would violate several statutes and authorized the implementation, stating that collective-bargaining rights must give way, as a matter of Illinois law, when necessary to effective management. The Seventh Circuit reversed, noting that the judge did not find that overriding the right to bargain was essential to solve any constitutional problem at the Center or about the necessity for a particular remedy to cure any violation. The plan has been in effect for years, and restoring union members to their old positions is not possible.
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United States v. Black
Black repeatedly tried to pay off a more than $5 million tax debt with checks drawn on checking accounts that he knew were closed to prevent the IRS from collecting taxes from him. A jury convicted Black of one count of obstructing and impeding the IRS from collecting taxes and four counts of passing and presenting fictitious financial instruments with intent to defraud. The district court sentenced Black to 71 months in prison. The Seventh Circuit vacated and remanded for resentencing, agreeing that the district court erred in determining his sentencing range under U.S.S.G. 2T1.1, by improperly calculating the tax loss by aggregating the face value of the fraudulent checks and by including penalties and interest in the calculation. The court upheld refusal to consider audit errors and apply available deductions because Black could not establish that he was entitled to any reduction in taxes owed.
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Friday, July 24, 2015
U.S. Court of Appeals for the Seventh Circuit
Summaries for July 24, 2015
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United States v. Newman
More than 20 years ago, Newman was sentenced to 540 months’ imprisonment for drug offenses, including distributing 40-50 kilograms of cocaine. Congress and the Sentencing Commission have several times reduced permissible sentences for sellers of crack cocaine, but none of the changes affected persons who distributed powder cocaine, until Amendment 782 to the Sentencing Guidelines effected an across-the-board reduction of two offense levels in the drug-quantity table at U.S.S.G. 2D1.1. Because the Sentencing Commission made that change retroactive, 18 U.S.C. 3582(c)(2) allows district judges to reduce the sentences of persons already in prison. Newman argued ed that his revised sentencing range was 292 to 365 months (the original was 360 months to life), and the prosecutor agreed. The prosecutor recommended a reduction to 472 months, observing that Newman’s criminal history included violence as well as drug sales. The district court initially cut the sentence to 348 months, twice stating that 472 months would be too long, but later rearranged which sentences run concurrently to which others, producing a sentence of 472 months, without explanation. The Seventh Circuit vacated, stating that the court lacked the authority to increase Newman’s sentence by an order entered more than 14 days after December 30, 2014.
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Sinovel Wind Grp. Co., Ltd v. Crabb
The United States delivered a criminal summons to the office of Sinovel Wind (USA) in Texas in order to serve process on Sinovel Wind Group, a Chinese corporation and the owner of 100% of the shares of Sinovel (USA), which had been indicted for criminal copyright infringement, wire fraud and trade secret theft. The charges arose from Sinovel’s alleged scheme to steal computer source code from American Superconductor for use to assist in operating Sinovel’s wind turbines. Sinovel contested jurisdiction and moved to quash service. Concluding that Sinovel USA was the alter ego of Sinovel and that service on Sinovel USA was proper, the district court denied Sinovel’s motion. The Seventh Circuit concluded that it had no jurisdiction to hear Sinovel’s appeal and that the case did not meet the high standards for issuance of a writ of mandamus. The court rejected arguments that U.S. criminal proceedings against Sinoval could interfere “with ongoing civil litigation in Chinese courts” over the same dispute and that this was an exceptional case in which the importance of the particular value at stake is sufficiently great that an immediate appeal must be allowed to protect that value.
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Robinson v. Sweeny
Attacked by a fellow prisoner while being transported from a court hearing to an Illinois jail, Robinson, pro se, filed suit under 42 U.S.C. 1983, claiming that guards were deliberately indifferent to his safety in failing to protect him. On December 30, 26 days after the court entered final judgment dismissing the suit, Robinson moved to extend the 28-day deadline for filing a motion under Fed. R. Civ. P. 59(e) to alter or amend the judgment. Rule 6(b)(2) prohibits extending the time for filing a Rule 59(e) motion, Robinson missed the deadline. A month later the judge issued an order construing the motion as a Rule 59(e) motion and gave Robinson another 30 days to supplement it, since the motion stated no grounds for relief but just asked for more time. Two weeks after the 30-day deadline the judge denied the ‘Rule 59(e) motion.’ Robinson filed another such motion 12 days later. The judge construed it as a Rule 60(b) motion because the deadline for filing a Rule 59(e) motion had passed. Rule 60(b) lists six grounds for relief from judgment, including “any other reason.” The judge denied Robinson’s Rule 60(b) motion. The Seventh Circuit dismissed an appeal, stating no relief was available.
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Billhartz v. Comm'r of Internal Revenue
Billhartz left more than $20 million to his four children when he died. His estate tax return claimed a deduction for more than $14 million because the amounts paid to the children through a trust were paid pursuant to Billhartz’s contractual obligation under a marital settlement agreement with his first wife. The IRS disallowed the deduction in full and issued a notice of deficiency. The Estate filed suit. Before trial the Estate and the IRS settled; the IRS conceded 52.5% of the claimed deduction. Soon after the settlement, Billhartz’s children sued the Estate in state court, claiming that they were entitled to a larger portion of their father’s fortune and that their prior acceptance of a lesser amount had been obtained fraudulently. The Estate asked the Tax Court to vacate the settlement on the basis that, were the children to prevail, the settlement would bar the Estate from claiming an estate tax refund for any additional amount paid to the children. The Tax Court rejected the Estate’s arguments, and entered a decision reflecting the terms of the settlement agreement. The Seventh Circuit affirmed. The Tax Court did not abuse its discretion by refusing to set aside the settlement.
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Carter v. Homeward Residential, Inc.
Carter lost his home in Crete, Illinois, after its mortgage foreclosed. He sued the financial institutions involved in making, servicing, or foreclosing his mortgage, alleging constitutional claims based on the fact that the “foreclosing entity” (not identified) did not hold the note or mortgage at the time of the foreclosure. The district court dismissed the suit as frivolous. The Seventh Circuit agreed that the suit and a similar pending suit are “indeed frivolous” and affirmed dismissal. In neither case did the complaint allege anything that might support an inference that the defendants were state actors under 42 U.S.C. 1983. A claim must be dismissed “if it is clear beyond any reasonable doubt that a case doesn’t belong in federal court, the parties cannot by agreeing to litigate it there authorize the federal courts to decide it.”
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United States v. Pickering
Pickering was mailed a summons for federal jury duty, and later was sent a reminder. When she neither responded nor appeared, the judge asked the Justice Department to institute criminal contempt proceedings. The government sought a rule to show cause. Defendant testified that she had received the summons but had forgotten about it; she had been five months pregnant with her first child, with a complicated pregnancy involving modified bed rest to reduce the risk of miscarriage. She was also taking intermittent leave under the Family and Medical Leave Act, to care for her mother, who was undergoing a total knee replacement and suffering from angioedema. She testified that she is not opposed to serving on a jury—she had appeared for jury duty twice in the state courts. The government declined to cross-examine her. The judge declared her guilty of willful contempt beyond a reasonable doubt, without explaining the basis of his conclusion. He imposed a fine of $250 and placed a criminal conviction on her record, “not a good thing for a bank employee.” The Seventh Circuit reversed, stating that the litigation has been mishandled by the court and the Justice Department, noting that the judge addressed the defendant by her first name.
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Friday, July 10, 2015
U.S. Court of Appeals for the Seventh Circuit
Summaries for July 10, 2015
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Collins v. Lochard
Plaintiff, a civil detainee in Illinois, appealed an adverse jury verdict in his deliberate indifference suit under 42 U.S.C. 1983 against a facility physician. Plaintiff alleged that the district court should have declared a mistrial after the physician violated a pretrial ruling by the court by mentioning to the jury that plaintiff was incarcerated for 26 years. Plaintiff also challenged the strength of the evidence supporting the jury’s verdict. The court concluded that the district court did not abuse its discretion in not declaring a mistrial where the jury could already infer from plaintiff's testimony and the medical issues that plaintiff had dating back to 2002 that plaintiff had spent a long in prison. Because plaintiff did not preserve his second argument, the court cannot reach the issue. Accordingly, the court affirmed the judgment.
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United States v. Metropolitan Water Reclamation
This appeal concerns the District's construction of an ambitious project to impound water until it can be cleaned up and released safely: the Tunnel and Reservoir Plan (TARP). The United States and the State of Illinois jointly filed suit, under sections 301 and 309 of the Clean Water Act, 33 U.S.C. 1311, 1319, seeking an order that the District improve the TARP’s performance, accelerate its completion date, and do more to contain and mitigate overflows in the interim. The Alliance was permitted to intervene. The district court entered a proposed consent decree that accompanied the complaint and rejected the Alliance's protest of the proposal. The district judge also concluded that the settlement binds the Alliance. The Alliance appealed, arguing that it cannot be bound by the consent decree - essentially a contract - to which it did not agree. The court concluded that the consent decree that the district court has approved is reasonable in light of the current infrastructure, the costs of doing things differently (no one proposes to build a new sewer system or redo the Deep Tunnel project), and the limits of knowledge about what will happen when the system is completed. Because the decree is the outcome of diligent prosecution, it binds would-be private litigants such as the Alliance. Accordingly, the court affirmed the judgment.
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United States v. Jones
Jones and others pickpocketed wallets and bought stolen wallets to create counterfeit driver’s licenses and checks, producing at least 60 counterfeit documents. With stolen checkbooks belonging to at least 26 people, they made checks payable to match the fraudulent identification documents. “Writers” presented the forged checks and documents to banks to withdraw cash, while Jones waited outside. The scheme resulted in a loss of approximately $770,000. Jones recruited six and trained all eight writers. He furnished fraudulent IDs, decided which banks to target, provided transportation, and divided the proceeds. Jones was charged with 10 counts of bank fraud, 18 U.S.C. 1344, and aggravated identity theft, 18 U.S.C. 1028A(a)(1). While on bond, Jones was arrested again for stealing wallets and making fraudulent credit card purchases. Jones pleaded guilty, without a plea agreement, to one bank fraud count and aggravated identity theft. The court calculated 12 criminal history points and applied a four-level enhancement for possession or use of device-making equipment and production of counterfeit devices, a two-level enhancement for having more than 50 victims, and a four-level enhancement as a leader of criminal activity involving five or more participants, for a guidelines range of 151–188 months, and imposed a sentence of 160 months plus a statutorily-mandated consecutive 24- month term for aggravated identity theft. The Seventh Circuit affirmed.
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Saturday, July 04, 2015
U.S. Court of Appeals for the Seventh Circuit
Summaries for June 30, 2015
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Stanbridge v. Scott
Stanbridge is confined in a secured facility under the Illinois Sexually Violent Persons Commitment Act, 725 Ill. Comp. Stat. 207/1, which allows for civil commitment of individuals who have been convicted of a sexually violent offense and who suffer from a mental disorder that predisposes them to future acts of sexual violence. Stanbridge sought a writ of habeas corpus, challenging his 2005 criminal conviction for aggravated criminal sexual abuse. Stanbridge had already served his full sentence for his 2005 conviction. The district court, therefore, dismissed Stanbridge’s petition, concluding that it lacked jurisdiction to consider claims related to Stanbridge’s criminal conviction. The Seventh Circuit affirmed, rejecting Stanbridge’s argument that he remains “in custody” pursuant to his sexual abuse conviction because that conviction serves as a necessary, though not sufficient, predicate for his current confinement. Stanbridge’s civil commitment is merely a collateral consequence of his criminal conviction, insufficient to render Stanbridge in custody pursuant to that conviction.
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Valley Forge Ins. Co. v. King Supply Co., LLC
In 2009, CE filed a class action suit under the Telephone Consumer Protection Act, 47 U.S.C. 227, against King. King had commercial general liability and umbrella policies from three insurance companies, but all three disclaimed any obligation to defend or indemnify, based on provisions in the policies that appeared to exempt liability under the Telephone Consumer Protection Act from coverage. The district court certified the class. On remand, CE and King agreed to settle the case for $20 million, the limit of the insurance policies. Their agreement, approved by the district court, provided that only one percent of the judgment ($200,000) could be executed against King. Upon learning of the proposed settlement, the insurers sought a state court declaratory judgment. A state court ruled that the insurance policies do not cover liability under the Act, but CE is appealing that decision. After the settlement agreement in the federal case, but before its approval, the insurers moved to intervene under Fed.R.Civ.P. 24(a), (b), hoping to delay approval of the settlement until there was a state-court determination. The Seventh Circuit affirmed denial of the motion to intervene as untimely.
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United States v. Kielar
Kielar, a pharmacist, got many patients from Dr. Barros, whose office was in the same building, and began defrauding two insurance companies. Kielar forged prescriptions for Procrit under Barros’s name and submitted them for payment, knowing that Procrit had neither been prescribed, nor provided, to the individuals under whose policies he sought reimbursement. The insurers lost $1,678,549. Kielar was indicted for health care fraud, 18 U.S.C. 1347, with a forfeiture allegation, 18 U.S.C. 982(a)(7) that identified properties subject to forfeiture, including a Florida property. Kielar asserted that he needed the proceeds of its sale to pay legal fees. The court granted a motion to release lis pendens and ordered that the proceeds of the sale be placed in escrow with the U.S. Marshals Service. Kielar unsuccessfully requested that the court allow him to use the sale proceeds “for taxes, legal fees and other expenses.” He was convicted of six counts of health care fraud; three counts of aggravated identify theft, 18 U.S.C. 1028A(a)(1); and of using false records to impede a federal investigation, 18 U.S.C. 1519. The Seventh Circuit affirmed, rejecting arguments that the court erred in failing to hold a hearing on his request to release his escrowed funds, by limiting cross-examination of Barros, and by preventing Kielar from calling a former patient as a defense witness.
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Bell v. Taylor
Bell, a lawyer and photographer, alleged that three small Indianapolis business owners violated federal copyright laws and an Indiana theft statute by publishing on the internet a photo that he took of the Indianapolis skyline without his authorization. In August 2013, the district court set a deadline for filing motions for leave to amend the pleadings. Bell sought to amend his complaint (for a fourth time) eight months after the cut-off after learning that defendant Taylor had not actually used the photo at issue but had displayed a different photo belonging to Bell. The district court denied Bell’s motion, citing undue delay and his own carelessness. The district court granted defendants summary judgment on the damages issue, finding that Bell cannot demonstrate how they caused him financial harm and was not entitled to monetary recovery. The Seventh Circuit dismissed for lack of jurisdiction. Although the court purported to issue a “final judgment” after ruling on the summary judgment motion, it did so in error; the issue of injunctive relief was never adjudicated. Because Bell’s copyright claim was not entirely disposed of by the ruling, the judgment was not final.
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Intercon Solutions, Inc. v. Puckett
Intercon, which provides electronic recycling services, engaged BAN to evaluate its business for certification as environmentally friendly. BAN concluded that Intercon shipped hazardous waste to companies in China that use disposal methods that violate policy in Illinois, where Intercon operates and were inconsistent with Intercon’s public representations. BAN reported its conclusion to state and federal agencies. Intercon sued for defamation. BAN asserted an Anti-SLAPP (strategic lawsuit against public participation) defense. The district court declined to dismiss, the remedy under the state Anti-SLAPP law, reasoning that a special motion to strike was inconsistent with the Federal Rules of Civil Procedure. The Seventh Circuit affirmed, concluding that the Washington State Anti-SLAPP law cited by BAN would require the judge to resolve jury questions.
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