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Weekly Case Digests — March 23-27, 2015

By: WISCONSIN LAW JOURNAL STAFF//March 27, 2015//

Weekly Case Digests — March 23-27, 2015

By: WISCONSIN LAW JOURNAL STAFF//March 27, 2015//

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CIVIL

U.S. Court of Appeals For the Seventh Circuit
Bankruptcy – Tort claims

It was error for the district court to cap a discharged debtor’s tort claim at the amount of discharged debt.

“Whether Matichak tried to hide the claim in the bankruptcy is a question more appropriately addressed to the bankruptcy judge, who can decide (if the Trustee prevails in this tort suit) what disposition to make of any proceeds that remain after paying counsel and the creditors. Allowing the tort suit to proceed without a damages cap will ensure that the creditors receive their due—for the full stakes will allow the Trustee to hire counsel to take the suit on a contingent fee. If it turns out that Matichak was trying to deceive his creditors, the bankruptcy judge may decide to give the creditors a bonus, or perhaps to return any excess to the defendants in this tort suit. Either way, the creditors will escape injury at Matichak’s hands because it will remain economically feasible to prosecute the tort suit.”

Reversed.

14-8030 Metrou v. M.A. Mortenson Co.

Appeal from the United States District Court for the Northern District of Illinois, Marovich, J., Easterbrook, J.

Wisconsin Supreme Court
Civil Procedure – Arbitration

Timeliness and estoppel defenses against arbitration are to be determined in the arbitration proceedings, not by a court in a proceeding under Wis. Stat. § 788.03 to compel arbitration.

“In sum, Howsam, BG Group, and Kimberly Area School District demonstrate that a court’s role in an action to compel arbitration is limited.  If the arbitration agreement could cover the subject matter of the dispute, which is an issue of substantive arbitrability, the court must order arbitration and resolve all doubts as to the scope of the agreement in favor of compelling arbitration.  Issues like timeliness or estoppel are matters of procedural arbitrability to be determined during the arbitration process, not by a court, unless the parties agreed otherwise.”

Reversed and Remanded.

2013AP1205 First Weber Group, Inc., v. Synergy Real Estate Group, LLC

Ziegler, J.

Wisconsin Court of Appeals
Education – school lunches

APPEAL from an order of the circuit court for Milwaukee County:  JEFFREY A. CONEN, Judge.  Affirmed.

DISTRICT I; Milwaukee; JEFFREY A. CONEN, Curley, P.J., Kessler, J., Thomas Cane

2014AP000889 Young Minds Christian Preparatory School v. Wisconsin Department of Public Instruction

U.S. Supreme Court
Employment – Pregnancy Discrimination Act

An individual pregnant worker who seeks to show disparate treatment through indirect evidence may do so through application of the McDonnell Douglas framework.

An individual pregnant worker who seeks to show disparate treatment may make out a prima facie case under the McDonnell Douglas framework by showing that she belongs to the protected class, that she sought accommodation, that the employer did not accommodate her, and that the employer did accommodate others “similar in their ability or inability to work.” The employer may then seek to justify its refusal to accommodate the plaintiff by relying on “legitimate, nondiscriminatory” reasons for denying accommodation. That reason normally cannot consist simply of a claim that it is more expensive or less convenient to add pregnant women to the category of those whom the employer accommodates. If the employer offers a “legitimate, nondiscriminatory” reason, the plaintiff may show that it is in fact pretextual. The plaintiff may reach a jury on this issue by providing sufficient evidence that the employer’s policies impose a significant burden on pregnant workers, and that the employer’s “legitimate, nondiscriminatory” reasons are not sufficiently strong to justify the burden, but rather—when considered along with the burden imposed—give rise to an inference of intentional discrimination. The plaintiff can create a genuine issue of material fact as to whether a significant burden exists by providing evidence that the employer accommodates a large percentage of nonpregnant workers while failing to accommodate a large percentage of pregnant workers. This approach is consistent with the longstanding rule that a plaintiff can use circumstantial proof to rebut an employer’s apparently legitimate, nondiscriminatory reasons, see Burdine, supra, at 255, n. 10, and with Congress’ intent to overrule Gilbert.

707 F. 3d 437, vacated and remanded.

12-1226 Young v. United Parcel Service, Inc.

Breyer, J.; Alito, J., concurring; Scalia, J., dissenting; Kennedy, J., dissenting.

U.S. Court of Appeals For the Seventh Circuit
Employment – Race discrimination

Where, during a large scale layoff, an employee who was released had objectively better qualifications that an employee in the same position who was retained, the district court’s grant of summary judgment on the former employee’s race discrimination claim must be reversed.

“A reasonable jury could credit Hutchens’ evidence while rejecting Rivera’s and Cushing’s, and impressed by Hutchens’ credentials, her seniority over Glowacki, her earlier receipt of National Board Certification, her other credentials superior to Glowacki’s, her writing skills, and her toughness in teaching inmates of Cook County Jail year after year, could conclude that she was better qualified for the job than Glowacki. It’s true that having found all these facts in favor of Hutchens, that reasonable jury might nevertheless deem Hutchens a victim not of racism but of error, ineptitude, carelessness, or personal like or dislike, unrelated to race. Certainly the Professional Development Unit seems to have been poorly managed, with little effort at recordkeeping despite the befuddled recollections of key members of the unit; Hutchens may have been a victim of incompetence rather than of racism.”

“But equally (so far as one can judge from a record limited to evidence obtained in pretrial discovery) a reasonable jury might deem Rivera’s and Cushing’s testimony a tissue of lies (the polite term is “pretext”), Hutchens distinctly better qualified for retention than Glowacki (about whom the record contains little information), and the latter’s being retained instead of Hutchens a consequence (for why else all the lies?) of a preference for a person of the same race, by the persons who testified against Hutchens.”

Affirmed in part, and Reversed in part.

13-3648 Hutchens v. Chicago Board of Education

Appeal from the United States District Court for the Northern District of Illinois, Chang, J., Posner, J.

U.S. Supreme Court
Equal Protection – Voting Rights Act

A District Court’s analysis of a racial gerrymandering claim as referring to the State “as a whole,” rather than district-by-district, was legally erroneous.

This Court has consistently described a claim of racial gerrymandering as a claim that race was improperly used in the drawing of the boundaries of one or more specific electoral districts, see, e.g., Shaw v. Reno, 509 U. S. 630, 649 (Shaw I), and has described the plaintiff ’s evidentiary burden similarly, see Miller, supra, at 916. The Court’s district-specific language makes sense in light of the personal nature of the harms that underlie a racial gerrymandering claim, see Bush v. Vera, 517 U. S. 952, 957; Shaw I, supra, at 648.

The District Court found the fact that racial criteria had not predominated in the drawing of some Alabama districts sufficient to defeat a claim of racial gerrymandering with respect to the State as an undifferentiated whole. But a showing that race-based criteria did not significantly affect the drawing of some Alabama districts would have done little to defeat a claim that race-based criteria predominantly affected the drawing of other Alabama districts. Thus, the District Court’s undifferentiated statewide analysis is insufficient, and the District Court must on remand consider racial gerrymandering with respect to the individual districts challenged by appellants.

989 F. Supp. 2d 1227, vacated and remanded.

13-895 Alabama Legislative Black Caucus v. Alabama

Breyer, J.; Scalia, J., dissenting; Thomas, J., dissenting.

Wisconsin Court of Appeals
Insurance – bad faith

APPEAL from a judgment of the circuit court for Polk County:  MOLLY E. GALEWYRICK, Judge.  Affirmed.

DISTRICT III; Polk; MOLLY E. GALEWYRICK, Hoover, P.J., Stark, Hruz, JJ.

2014AP001296 Bruce Muller v. General Casualty Insurance Company

U.S. Supreme Court
Intellectual Property – Trademarks – issue preclusion

So long as the other ordinary elements of issue preclusion are met, when the usages adjudicated by the TTAB are materially the same as those before a district court, issue preclusion should apply.

Hargis claims that the standards are different, noting that the registration provision asks whether the marks “resemble” each other, 15

U. S. C. §1052(d), while the infringement provision is directed towards the “use in commerce” of the marks, §1114(1). That the TTAB and a district court do not always consider the same usages, however, does not mean that the TTAB applies a different standard to the usages it does consider. If a mark owner uses its mark in materially the same ways as the usages included in its registration application, then the TTAB is deciding the same likelihood-of-confusion issue as a district court in infringement litigation. For a similar reason, the Eighth Circuit erred in holding that issue preclusion could not apply because the TTAB relied too heavily on “appearance and sound.”

716 F. 3d 1020, reversed and remanded.

13-352 B&B Hardware, Inc., v. Hargis Industries, Inc.

Alito, J.; Ginsburg, J., concurring; Thomas, J., dissenting.

Wisconsin Supreme Court
Professional Responsibility – Suspension

Where attorney Naomi Dawn Isaacson made numerous false and harassing statements towards judges and others involved in litigation, a one year suspension is appropriate.

“We agree that Attorney Isaacson’s misconduct warrants a one-year suspension of her license to practice law in Wisconsin.  She repeatedly made frivolous and harassing personal attacks and discriminatory statements in numerous documents filed in various matters.  She continued to make false statements about members of the judiciary and others after being formally sanctioned for her conduct.  Based on the record presented, we are satisfied that a one-year suspension is sufficient in view of the seriousness of her professional misconduct and will serve to deter similar behavior and protect the public from similar misconduct in the future.”

2014AP495-D OLR v. Isaacson

Per Curiam.

Wisconsin Court of Appeals
Property – Eminent domain

Even though a property owner mistakenly inserted the word “dedication” on a certified survey map rather than the intended word “reservation,” the State is not free to take that property without payment of any compensation to the property owner.

“The major fault in the State’s argument is that statutory dedication requires compliance with statutory procedure.  See Vande Zande v. Town of Marquette, 2008 WI App 144, ¶8, 314 Wis. 2d 143, 758 N.W.2d 187.  For the State to rely on WIS. STAT. § 236.29(1) to convey Somers’ property via the CSM, the property first has to be properly dedicated in accordance with WIS. STAT. § 236.34(1m)(e).  Under that statute,

[a] certified survey map may be used for dedication of streets and other public areas … when owners’ certificates and mortgagees’ certificates which are in substantially the same form as required by [WIS. STAT. §] 236.21(2)(a) have been executed and the city council or village or town board involved have approved such dedication or grant.  Approval and recording of such certified surveys shall have the force and effect provided by [§] 236.29.

Sec. 236.34(1m)(e).  No governmental board involved in Somers’ development approved any road dedication or land grant for inclusion in the CSM.  Therefore, the CSM lacked the force and effect required to convey the property to the State.  Furthermore, ‘[i]ntent to dedicate to the public is an essential component of either [common law or statutory] dedication,’ Vande Zande, 314 Wis. 2d 143, ¶8, and it is undisputed that Somers never intended to dedicate the property for public use, cf. Cohn v. Town of Randall, 2001 WI App 176, ¶7, 247 Wis. 2d 118, 633 N.W.2d 674.”

Affirmed.

Recommended for publication in the official reports.

2014AP1092 Somers USA, LLC, v. DOT

Dist. II, Kenosha County, Schroeder, J., Reilly, J.

Wisconsin Court of Appeals
Property – foreclosure

APPEAL from a judgment of the circuit court for Milwaukee County:  MICHAEL GOULEE, Judge.  Affirmed.

DISTRICT I; Milwaukee; MICHAEL GOULEE, Kessler and Brennan, JJ., Thomas Cane

2013AP002182 Nationstar Mortgage, LLC v. Thomas G. Henk, Jr.

U.S. Supreme Court
Securities – Registration statements – opinions

If a registration statement omits material facts about the issuer’s inquiry into, or knowledge concerning, a statement of opinion, and if those facts conflict with what a reasonable investor, reading the statement fairly and in context, would take from the statement itself, then §11’s omissions clause creates liability.

For purposes of §11’s omissions clause, whether a statement is “misleading” is an objective inquiry that depends on a reasonable investor’s perspective. Cf. TSC Industries, Inc. v. Northway, Inc., 426 U. S. 438, 445. Omnicare goes too far by claiming that no reasonable person, in any context, can understand a statement of opinion to convey anything more than the speaker’s own mindset. A reasonable investor may, depending on the circumstances, understand an opinion statement to convey facts about the speaker’s basis for holding that view. Specifically, an issuer’s statement of opinion may fairly imply facts about the inquiry the issuer conducted or the knowledge it had. And if the real facts are otherwise, but not provided, the opinion statement will mislead by omission.

An opinion statement, however, is not misleading simply because the issuer knows, but fails to disclose, some fact cutting the other way. A reasonable investor does not expect that every fact known to an issuer supports its opinion statement. Moreover, whether an omission makes an expression of opinion misleading always depends on context. Reasonable investors understand opinion statements in light of the surrounding text, and §11 creates liability only for the omission of material facts that cannot be squared with a fair reading of the registration statement as a whole. Omnicare’s arguments to the contrary are unavailing.

719 F. 3d 498, vacated and remanded.

13-435 Omnicare, Inc., v. Laborers District Council Construction Industry Pension Fund

Kagan, J.; Scalia, J., concurring; Thomas, J., concurring.

Wisconsin Court of Appeals
Torts – negligence – automobile accidents

APPEAL from a judgment of the circuit court for Winnebago County:  SCOTT C. WOLDT, Judge.  Reversed.

DISTRICT II; Winnebago; SCOTT C. WOLDT, Neubauer, P.J., Reilly, Gundrum, JJ.

2014AP001490 Eric A. Dante v. 1st Auto & Casualty Ins. Co.

CRIMINAL

U.S. Court of Appeals For the Seventh Circuit
Bribery – Sufficiency of the evidence

Where the defendants believed an undercover officer was a county official willing to accept a bribe, the evidence was sufficient to convict them of conspiracy to commit bribery.

“There is also abundant evidence in the record that, regardless of which entity or entities employed the fictional corrupt official, the conspirators reasonably believed Castro’s claims that the official could act on behalf of Los Angeles County. The allure of the deal and the reason for paying the agreed bribe were precisely that this corrupt official could guarantee approval for the sizeable contract by the county’s Board of Supervisors. And by definition, a person qualifies ‘as an agent of an entity’ when he is ‘authorized to act on behalf of that entity.’ United States v. Keen, 676 F.3d 981, 990 (11th Cir. 2012). The jury heard sufficient evidence to support its finding that the $10,000 element was satisfied beyond a reasonable doubt.”

Affirmed.

14-1278 and 14-1100 U.S. v. Buenrostro

Appeals from the United States District Court for the Northern District of Illinois, Tharp, J., Hamilton, J.

Wisconsin Court of Appeals
Criminal Procedure – right to counsel

APPEAL from a judgment of the circuit court for Milwaukee County: DAVID L. BOROWSKI, Judge.  Affirmed.

DISTRICT I; Milwaukee; DAVID L. BOROWSKI, Curley, P.J., Brennan, J., Thomas Cane

2014AP000342-CR State v. Johnny Jerome Jones

Wisconsin Court of Appeals
Criminal Procedure – ineffective assistance

APPEAL from a judgment and an order of the circuit court for Milwaukee County:  TIMOTHY G. DUGAN, Judge.  Affirmed.

DISTRICT I; Milwaukee; TIMOTHY G. DUGAN, Kessler, Brennan, JJ., Thomas Cane

2014AP001053-CR State v. Tyron James Powell

Wisconsin Court of Appeals
Criminal Procedure – ineffective assistance

APPEAL from an order of the circuit court for Milwaukee County:  JEFFREY A. WAGNER, Judge.  Affirmed.

DISTRICT I; Milwaukee; JEFFREY A. WAGNER, Curley, P.J., Brennan, Kessler, JJ.

2014AP001103 State v. Matthew Richard

U.S. Court of Appeals For the Seventh Circuit
Habeas Corpus – Presumption of innocence

Where a state court judge found a defendant guilty based on facts not in evidence, the conviction must be reversed.

“We are mindful that only clearly established violations of a defendant’s constitutional rights permit us to reverse a state court decision challenged in a federal habeas corpus proceeding. Nevada v. Jackson, 133 S. Ct. 1990 (2013). But there’s no question that the right to have one’s guilt or innocence adjudicated on the basis of evidence introduced at trial satisfies that exacting standard. That is clear from the Supreme Court decisions in Holbrook, Taylor, and Estelle, and our own Garcia and Moore decisions, from all of which we quoted earlier. It’s true that we know of no case identical to this one—unsurprisingly, given the combination of weak proof with a verdict based on groundless conjecture. But identity can’t be required. The Supreme Court has made clear in the cases we’ve cited and quoted from that a judge or a jury may not convict a person on the basis of a belief that has no evidentiary basis whatsoever. Just imagine that the judge in our case had said ‘I know there’s no evidence of guilt, but I also know that prosecutors in the City of Mark-ham never prosecute an innocent person.’ The defendant would be entitled to relief in a habeas corpus proceeding even though that precise statement had never been uttered by a judge before.”

Reversed and Remanded.

14-1419 Owens v. Duncan

Appeal from the United States District Court for the Northern District of Illinois, Durkin, J., Posner, J.

Wisconsin Court of Appeals
Search and Seizure – search warrants – Franks motions

APPEAL from a judgment and an order of the circuit court for St. Croix County:  EDWARD F. VLACK III, Judge.  Affirmed.

DISTRICT III; St. Croix; EDWARD F. VLACK III, Hoover, P.J., Stark, Hruz, JJ.

2014AP001339-CR State v. Christopher Wayne Haakenstad

Wisconsin Court of Appeals
Search and Seizure – warrantless searches – automobiles

APPEAL from a judgment of the circuit court for Sheboygan County:  TERENCE T. BOURKE, Judge.  Affirmed.

DISTRICT II; Sheboygan; TERENCE T. BOURKE, Brown, C.J., Neubauer, P.J., Reilly, J.

2014AP001430-CR State v. Antwan D. Hopson

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