Weekly Case Digests — March 14-18, 2016

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7^TH CIRCUIT DIGESTS 

7^TH Circuit Court of Appeals

Case Name: Orvil  Duane Hassebrock et al v. Robert G. Bernhoft, et al

Case No.: 14-2943

Officials: POSNER and SYKES, Circuit Judges, and SIMON, Chief District Judge.

Focus: Disclosure of Witnesses & Experts – Discovery

Appellants failure to provide witness list and expert list until after the close of discovery warrants summary judgment for defendant-respondent

“As the district judge saw it, the Hassebrocks’ delay was neither substantially justified nor harmless. The judge noted that the Hassebrocks could have raised the issue of their financial constraints much earlier, before the discovery deadline lapsed, but instead their April 9 motion assured the court that they would provide the necessary expert disclosures “well before” the May 10 deadline. The judge also noted that reopening discovery would prejudice the defendants because the case was old and had already moved to the summary-judgment stage. Reopening discovery would cause further delay and require the defendants to prepare new motions on potentially different grounds. This reasoning is sound in all respects. We find no abuse of discretion.”

Affirmed

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7^TH Circuit Court of Appeals

Case Name: United States of America v. Rex Black

Case No.: 13-3908

Officials: FLAUM, WILLIAMS, and HAMILTON, Circuit Judges.

Focus: Tax Evasion – Sentencing

Court misapplies tax loss definition to facts of the case, warranting resentencing.

“In this circuit, “[w]e take the phrase ‘the object of the offense’ to mean that the attempted or intended loss, rather than the actual loss to the government, is the proper basis of the tax‐loss figure.” United States v. Chavin, 316 F.3d 666, 677 (7th Cir. 2002). Here, the object of Black’s offense was the amount of money that he attempted to avoid paying, which is the actual amount of taxes, penalties, and interest that was due. Black owed the IRS unpaid taxes for 1997 and 1998 plus penalties and interest. The IRS filed a lien to satisfy the tax debt in the amount of $4,856,895.49. Black wrote a bad check in this amount. The IRS notified Black that he owed an additional $505,993.68 in penalties and interest, and Black wrote a bad check for this amount. At that point, Black owed the IRS $5,362,889.17. Diligent in its collection efforts, the IRS filed three additional liens for $1,467,168.33, $1,417,804.18, and $4,954,049.40—all to collect the same $5.3 million Black owed. Black responded by writing two bad checks and two fraudulent bills of exchange to satisfy the tax liens. The district court added the face value of each fraudulent instrument submitted to the IRS to determine the tax loss was over $14 million. Doing so was improper under § 2T1.1. From the record, it appears that the tax loss was only approximately $5.3 million.

Vacated and Remanded

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7^TH Circuit Court of Appeals

Case Name: United States of America v. James A. Thomas

Case No.: 15-1731

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

Focus: Due Process – Sentencing

Judge utilized proper procedure in calculating sentence for appellant.

“The Due Process Clause requires notice and an opportunity for a hearing. See, e.g., Jones v. Flowers, 547 U.S. 220 (2006). The procedure the district judge used gave Thomas more notice than Rule 32 requires, and more opportunities to be heard than Rules 32 and 43 require. It eliminated any dispute about the terms of supervised release, which have bedeviled district courts (and this court) in recent years. See, e.g., United States v. Orozco-Sanchez, No. 15-1252 (7th Cir. Feb. 26, 2016); United States v. Kappes, 782 F.3d 828 (7th Cir. 2015). The early announcement of an inclination to deduct two offense levels allowed everyone to prepare for a focused argument on just where in the 235- to 293-month range the sentence should fall, without extinguishing the prosecutor’s opportunity to argue for a sentence higher than 293 months or the defense’s opportunity to ask for fewer than 235 months. Both sides used that opportunity. The procedure made everyone better off. Philosophers and economists might call it a Pareto-superior, if not a Pareto-optimal, approach to sentencing. Other district judges may deem it worthy of emulation; it is enough for us to call it constitutional.”

Affirmed

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7^TH Circuit Court of Appeals

Case Name: United States of America v. Anthony Lomax, Demond Glover & Brandon Lomax

Case No.: 14-2811, 14-3189, 14-3684

Officials: ROVNER and WILLIAMS, Circuit Judges, and SHAH, District Judge

Focus: Court error – Sentencing

Court fails to instruct jury of buyer-seller relationship in heroin distribution conspiracy case, properly enhanced sentence of one appellant with two prior drug convictions, court commits harmless error sentencing when erroneously classified one appellant as career offender.

“But, there is also evidence that Anthony was merely Brandon’s customer. There is evidence that Anthony bought heroin from mostly Brandon, but also bought heroin at least once from Demond. Anthony would re-sell the heroin to his own customers, not at the direction of Brandon. Also, Johnson, one of Brandon’s customers, testified that Anthony tried to get him to buy heroin from Anthony instead of Brandon. This suggests that Anthony did not have a shared common goal with Brandon. Moreover, Kelley, Brandon’s supplier, testified that Brandon moved drugs with a cousin and his brothers. If a rational jury assumed Demond was the one cousin mentioned, then it could have excluded Anthony from the conspiracy.”

Affirmed Lomax & Glover conviction & Sentence

Vacate and remand Lomax conviction and remand for new trial

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7^TH Circuit Court of Appeals

Case Name: United States of America v. Vernado Malone

Case No.: 15-2400

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

Focus: Plea Agreement

Plea agreement explicitly laid out a waiver of appeal, so this appeal is dismissed accordingly.

“The absence of express language of stipulation as to the number of victims is telling in light of the fact that there is express language of stipulation in other parts of the plea agreement. The government and the defendant “stipulate[d] that the amount of the loss in this matter is $120,000,” and the government “agree[d]” to recommend a 2‐level reduction for acceptance of responsibility and to dismiss count two. That language stands in stark contrast to the factual basis of the plea agreement, which contained no language of stipulation or agreement. See United States v. Schilling, 142 F.3d 388, 397–98 (7th Cir. 1998) (contrasting the defendant’s admissions in the factual basis with sections where the government “agree[d]” to make certain sentencing recommendations). Instead, given the “one‐sided nature of the acknowledgment of criminal conduct” and the district court’s duty to determine, among other things, any victim‐related adjustments after input from the government, it is clear that the factual basis in the plea is not a stipulation to the number of victims. See O’Doherty, 643 F.3d at 217–18 (finding that factual basis where the defendant “acknowledge[d]” that the government could prove tax losses of $425,766 did not pre‐ vent the government from arguing at sentencing that there was a greater loss).”

Appeal Dismissed

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7^TH Circuit Court of Appeals

Case Name: William Bridge v. New Holland Logansport, Inc.,

Case No.: 15-1935

Officials: WOOD, Chief Judge, ROVNER, Circuit Judge, and SHAH, District Judge.

Focus: Age Discrimination

Company did not meet the definition of an “employer” by statute, warranting summary judgment for employer in age discrimination suit.

“It was Mike Stephenson, operations manager at Logansport, who fired Bridge. Stephenson, however, told Bridge that the decision was actually Straeter’s, so for purposes of summary judgment, we assume that Straeter was responsible. But in what capacity? Straeter was operations manager at Rochester, not Logansport, so Bridge contends that Straeter must have been acting on Rochester’s behalf when he directed that Bridge be let go. But Straeter was also an owner and director—of Rochester and of Logansport. Where the same officer or director works for two separate but commonly-owned entities, he at times represents one corporation and at times represents the other. That is, he “changes hats.” See Lusk v. Foxmeyer Health Corp., 129 F.3d 773, 779 (5th Cir. 1997) (citation omitted). There are no facts from which it may reasonably be inferred that, when Straeter told Stephenson to fire Bridge, Straeter was wearing anything but a Logansport hat. Straeter, a Logansport owner and director, instructed the Logansport manager (also a coowner and director of that corporation) to fire a Logansport employee. What has Rochester to do with it? Bridge emphasizes that Straeter had a Rochester email address, and that the meeting between Straeter and Stephenson occurred at Rochester; but there is no evidence that Straeter conducted only Rochester business at his office (his only office), and there is no dispute that Straeter had responsibilities with both companies. Neither the email address nor the location of the meeting signals anything about the company Straeter represented when he directed Bridge’s firing. To defeat summary judgment on an issue on which he bears the ultimate burden of proof, Bridge was required to present evidence on which a jury could rely to find in his favor. The email address and Straeter-Stephenson meeting are insufficient.

Affirmed

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7^TH Circuit Court of Appeals

Case Name: United States of America v. Rondell Freeman

Case No.: 15-1170

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

Focus: Conspiracy – Dismissal

Dismissal of conspiracy count did not necessitate dismissing the remaining counts within conspiracy consistent with Wilbourn.

“Although Williams certainly linked Freeman to the relevant drug scheme, Freeman’s participation in the predicate conspiracy was also clearly established by a wealth of additional evidence––including video and audio surveillance, recorded phone conversations, various witness accounts, and numerous seizures and garbage pulls––all of which demonstrated that Freeman actively oversaw the manufacture, packaging, and distribution of narcotics at Cabrini Green. The phone counts were based on Freeman’s recorded telephone conversations about the purchase of a firearm and the assessment of drug proceeds, while the gun count was based on a video recording that showed Freeman receiving a gun in the very location where he had packaged drugs with his accomplices earlier that day. These recordings, together with the other reliable evidence of record, suffice to establish beyond a reasonable doubt that Freeman used a phone and possessed a gun as alleged in the indictment, and that he did so in furtherance of the conspiracy charged in Count 1.

Affirmed

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7^TH Circuit Court of Appeals

Case Name: Vincent Rose v. Board of Election Commissioners For the City of Chicago, et al

Case No.: 15-1931

Officials: WOOD, Chief Judge, and MANION and ROVNER, Cir‐ cuit Judges.

Focus:

Suit stemming from Defendant-respondent failure to place appellant’s name on ballot for local election dismissed due to issue preclusion

“Finally, Rose’s state and federal actions are identical for claim‐preclusion purposes. In Illinois as elsewhere, separate claims are considered the same cause of action if “‘they arise from a single group of operative facts, regardless of whether they assert different theories of relief.’” Chicago Title Land Trust Co. v. Potash Corp. of Saskatchewan Sales, 664 F.3d 1075, 1079–80 (7th Cir. 2011) (quoting River Park, Inc. v. City of Highland Park, 703 N.E.2d 883, 893 (Ill. 1998)). See also Arlin Golf, LLC v. Vill. of Arlington Heights, 631 F.3d 818, 821 (7^th Cir. 2011) (internal marks omitted) (“The transactional test permits claims to be considered part of the same cause of action even if there is not a substantial overlap of evidence, so long as they arise from the same transaction.”). In both his state and federal action, Rose challenged the Illinois statute prescribing the four‐percent signature requirement for aldermanic elections. He also challenged the Board’s decision, based on the four‐percent requirement, not to print his name on the ballot for the February 2015 election for Chicago’s 7th Ward. Both the state and federal actions are clearly predicated on the same set of operative facts and are therefore the same cause of action under Illinois law.

Affirmed

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7^TH Circuit Court of Appeals

Case Name: Robert Formella v. Megan J. Brennan

Case No.: 15-1402

Officials: BAUER, FLAUM, and HAMILTON, Circuit Judges.

Focus: Employment Discrimination

Former USPS employee fails to articulate facts necessary to prove up discrimination claim.

“Formella’s reliance on Malin and Boumehdi is misplaced; those two cases are factually distinguishable from Formella’s case. In Malin, the employee was unjustifiably passed over numerous times for promotions and effectively demoted by the same supervisor who outwardly opposed her filing of a sexual harassment complaint. Malin, 762 F.3d at 558–59, 560. The supervisor who opposed her sexual harassment complaint controlled all raises and promotions, and single-handedly stalled the employee’s career. Id. In Boumehdi, the employee received an unjustified negative performance review and was repeatedly shorted on her pay after making a complaint to the human resources department about sexual harassment on the part of her supervisor. Boumehdi, 489 F.3d at 793. Also, the supervisor repeatedly referenced the employee’s complaint in a derogatory manner when speaking with her. Id.”

Affirmed

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7^TH Circuit Court of Appeals

Case Name: Official Committee of Unsecured Creditors of Great Lakes Quick Lube LP v. T.D. Investments I, LLP

Case No.: 15-2093

Officials: POSNER, FLAUM, and WILLIAMS, Circuit Judges.

Focus: Bankruptcy

Termination of leases before declaring bankruptcy raises questions as to validity by creditors – claims they should retain ownership of properties in bankruptcy.

“Another possible explanation for the terminations builds on the fact that Great Lakes may have expected to emerge from bankruptcy as a going concern—Chapter 11 is oriented toward reorganization rather than liquidation. And while the bankruptcy proceeding will not end until this adversary action between Great Lakes’ unsecured creditors and T.D. is resolved, Great Lakes has continued to operate its business, albeit in shrunken form—the number of stores it leased dropped from 107 at the company’s peak to 64 shortly after the bankruptcy. Once reorganized, it would be struggling for survival with its diminished number of stores. Still, a fresh start may be easier for Great Lakes’ management to obtain without its needing to deal with the irritating Theisen.”

Reversed and Remanded

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7^TH Circuit Court of Appeals

Case Name: United States of America v. Derrick Smith

Case No.: 15-2005

Officials: POSNER, FLAUM, and EASTERBROOK, Circuit Judges

Focus:

Appellants own acts and statements, not those of witness that failed to testify, convicted him.

“The Confrontation Clause, by contrast, affects only “testimonial” statements. See, e.g., Ohio v. Clark, 135 S. Ct. 2173 (2015); Crawford v. Washington, 541 U.S. 36 (2004). Indeed it covers only a subset of testimonial hearsay. Statements that would have been admissible at common law in 1793 (in other words, statements that are not hearsay or are covered by longstanding exceptions to the hearsay doctrine) are outside the Sixth Amendment, see Giles v. California, 554 U.S. 353, 358–59 (2008), as are all statements by witnesses who are available for cross-examination, see Crawford, 541 U.S. at 60 n.9. And Clark shows that the Court has not yet decided whether the Confrontation Clause covers testimonial statements by one private party to another. Thus if a statement is not hearsay, because not offered for its truth, it also is not “testimonial” for the purpose of the Confrontation Clause.”

Affirmed

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Wisconsin Court of Appeals

WI Court of Appeals – District I

Case Name: State of Wisconsin v. Beverly Reshall Holt

Case No.: 2013AP2738-CR

Officials: Curley, P.J., Brennan and Brash, JJ.

Focus: Sufficiency of Evidence

WI Court of Appeals – District III

Case Name: Warren Slocum v. Star Prairie Township Board et al.

Case No.: 2014AP2075; 20142894

Officials: Stark, P.J., Hruz and Seidl, JJ.

Focus: General Appeal – Tax

WI Court of Appeals – District III

Case Name: State of Wisconsin v. Edward Max Lewis

Case No.: 2015AP68

Officials: Stark, P.J., Hruz and Seidl, JJ.

Focus: Evidentiary Hearing

WI Court of Appeals – District I

Case Name: State of Wisconsin v. Todd Brian Tobatto

Case No.: 2015AP254-CR

Officials: Curley, P.J., Kessler and Brennan, JJ

Focus: Ineffective Assistance of Counsel

The State of Wisconsin appeals an order of the postconviction court granting a new trial to Todd Brian Tobatto. The postconviction court found that Tobatto’s trial counsel rendered ineffective assistance with respect to jury selection. Specifically, the postconviction court determined that counsel’s failure to remove a particular juror, Juror Number Ten (Juror 10), prejudiced Tobatto’s trial. We conclude that Juror 10 was not shown to be biased and therefore trial counsel was not ineffective. Therefore, Tobatto is not entitled to a new trial. We reverse.

WI Court of Appeals – District I

Case Name: City of Rhinelander v. Thomas V. Wakely

Case No.: 2015AP302

Officials: STARK, P.J.

Focus: Sufficiency of Evidence

WI Court of Appeals – District I

Case Name: State of Wisconsin v. Jesus C. Gonzalez

Case No.: 2015AP784-CR

Officials: Curley, P.J., Kessler and Brennan, JJ.

Focus: Court Error

WI Court of Appeals – District I

Case Name: State of Wisconsin v. Kevin B. Blackburn

Case No.: 2015AP952-CR

Officials: Curley, P.J., Brennan and Brash, JJ.

Focus: Ineffective Assistance of Counsel

WI Court of Appeals – District  III

Case Name: Warren Slocum v. Start Prairie Township, Board and Board of Review

Case No.: 2015AP1287

Officials: Stark, P.J., Hruz and Seidl, JJ.

Focus: Tax Assessments

WI Court of Appeals – District IV

Case Name: Patrick K. Finnegan v. Sheila A. Bissen et al

Case No.: 2014AP2500

Officials: LUNDSTEN, J.

Focus: Misunderstanding of Evidence – Money Owed – Small Claims

WI Court of Appeals – District IV

Case Name: 2015AP195-CR

Case No.: State of Wisconsin v. Steve C. Deterding

Officials: Lundsten, Higginbotham and Blanchard, JJ.

Focus: OWI – 4^th Amendment

During a lawful pat-down for weapons, an officer felt an object in one of Deterding’s pants pockets. The officer removed the object, which turned out to be a plastic bottle of urine that Deterding said was for workrelated drug testing. This discovery and a subsequent investigation led to evidence that Deterding was operating while under the influence of controlled substances, and to Deterding’s conviction for a fifth-offense operating while under the influence crime. Deterding argues that his Fourth Amendment rights were violated when the officer removed the then-unknown object from Deterding’s pants pocket. We disagree and conclude that, under the circumstances, it was reasonable for the officer to believe that the object might be a weapon. We affirm the judgment of conviction

WI Court of Appeals – District IV

Case Name: State of Wisconsin v. Stephen M. Kokesh

Case No.: 2015AP1650

Officials: KLOPPENBURG, P.J.

Focus: OWI – Motion to Suppress

Stephen Kokesh appeals the judgment of conviction for operating while intoxicated first offense in violation of WIS. STAT. § 346.63(1)(a). Kokesh argues that the circuit court erred in denying his motion to suppress evidence because, according to Kokesh, the arresting officer did not have reasonable suspicion to conduct a traffic stop. I conclude that the traffic stop was supported by reasonable suspicion and, therefore, the circuit court did not err in denying the motion to suppress evidence. Accordingly, I affirm the judgment.

Wisconsin Supreme Court Digests

WI Supreme Court

Case Name: OLR v. John O Waters

Case No.: 2015AP1649-D

Focus: Disciplinary Proceedings

Attorney license to practice law suspended for 3 years.

“The following facts are taken from the documents attached to the OLR’s amended complaint relating to the Michigan disciplinary proceedings. The Michigan suspension was based on Attorney Waters’ September 14, 2012 conviction for felony drug offenses, as well as a disciplinary complaint comprised of three separate counts of professional misconduct. These included: neglect of a legal matter entrusted to him, in violation of Michigan Rules of Professional Conduct (MRPC) 1.1(c); failing to act with reasonable diligence, in violation of MRPC 1.3; failing to adequately communicate with his client, in violation of MRPC 1.4(a); failing to refund unearned fees or release the client file upon being discharged from the representation of a client, in violation of MRPC 1.16(d); engaging in conduct prejudicial to the proper administration of justice, in violation of MRPC 8.4(c) and Michigan Court Rule (MCR) 9.104(1); engaging in conduct which exposes the legal profession or the courts to obloquy, contempt, censure, or reproach, in violation of MCR 9.104(2); engaging in conduct contrary to justice, ethics, or good morals, in violation of MCR 9.104(3); intentionally failing to respond to a lawful demand for information from a disciplinary authority, in violation of MRPC 8.1(a)(2); and failing to answer a request for investigation, in violation of MCR 9.104(7) and MCR 9.113(A) and (B)(2).”

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US Supreme Court Digests

US SUPREME COURT

Case Name: Americold Realty Trust v. ConAgra Foods, Inc.

Case No.: 14-1382

Focus: Diversity Citizenship

Citizenship for appellants, for purposes of diversity jurisdiction, are based on the citizenship of its members & shareholders.

Historically, the relevant citizens for jurisdictional purposes in a suit involving a “mere legal entity” were that entity’s “members,” or the “real persons who come into court” in the entity’s name. Bank of United States v. Deveaux, 5 Cranch 61, 86, 91. But for the limited exception of jurisdictional citizenship for corporations, see Louisville, C. & C. R. Co. v. Letson, 2 How. 497, 558, this Court continues to “adhere to [the] oft-repeated rule that diversity jurisdiction in a suit by or against the entity depends on the citizenship of ‘all [its] members,’ ” Carden v. Arkoma Associates, 494 U. S. 185, 195. Applying the rule here, Americold possesses the citizenship of all its members, who, under Maryland law, include its shareholders. See, e.g., Md. Corp. & Assns. Code Ann. §8–101(c).

Affirmed

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