Weekly Case Digests — August 6-August 10, 2018

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7^th Circuit Digests

7^th Circuit Court of Appeals

Case Name: Pension Trust Fund for Operating Engineers, et al. v. Kohl’s Corporation, et al.

Case No.: 17-2697

Officials: WOOD, Chief Judge, and ROVNER and HAMILTON, Circuit Judges

Focus: Class Action – False & Misleading Statements – Private Securities Litigation Reform Act

In September 2011, Kohl’s Corporation announced that it was correcting several years of its financial filings because of multiple lease accounting errors. Hard on the heels of that announcement came a putative class action complaint. The plaintiffs, led by the Pension Trust Fund for Operating Engineers, allege that Kohl’s and two of its executives defrauded investors by publishing false and misleading information in the lead-up to the corrections. (For ease of exposition, we refer to the putative class as the Pension Fund.) The Pension Fund took the position that one can infer that the defendants knew that these statements were false or recklessly disregarded that possibility at the time they were made, because Kohl’s recently had made similar lease accounting errors. Despite those earlier errors, it was pursuing aggressive investments in its leased properties, and at the same time, company insiders sold considerable amounts of stock.

The district court dismissed the complaint for failure to meet the enhanced pleading requirements for scienter imposed by the Private Securities Litigation Reform Act (PSLRA). The court entered that dismissal with prejudice, declining to give the Pension Fund even one opportunity to amend to cure the defects. The Pension Fund now appeals both the dismissal of the complaint and the district court’s decision to enter it with prejudice. Because the first complaint fell short and the Pension Fund has not been able to suggest how an amendment might help, we affirm.

Affirmed

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7^th Circuit Court of Appeals

Case Name: United States of America v. Dennis Franklin, et al.

Case No.: 16-1580; 16-1872

Officials: KANNE and HAMILTON, Circuit Judges.

Focus: Statutory Interpretation – ACCA

The defendant‐appellants’ petition for panel rehearing is GRANTED, and the opinion and judgment issued February 26, 2018, are VACATED. Pursuant to Circuit Rule 52 and Wis. Stat. § 821.01, we request that the Wisconsin Supreme Court answer a question of Wisconsin law that should control our decision in these appeals of federal sentences under the Armed Career Criminal Act, 18 U.S.C. § 924(e). See generally 884 F.3d 331 (7th Cir. 2018) (panel opinion).

The question concerns the location provisions of the Wisconsin burglary statute. Our question, see below is whether the different location subsections (a)–(f) identify alternative elements of burglary or instead only identify alternative means of committing burglary. See, e.g., State v. Hendricks, 379 Wis.2d 549, 565–72, 906 N.W.2d 666, 673–77 (Wis. 2018) (deciding similar question under child enticement statute, Wis. Stat. § 948.07. The question may seem obscure or even arcanely metaphysical, at least without a fair amount of background information about the federal Armed Career Criminal Act, its reference to burglary convictions, and several related cases. (See below.) But, despite the layers of federal sentencing precedent that frame this issue, this is at bottom a controlling question of State criminal law. The answer to this question controls not only the validity of these appellants’ federal sentences; it also affects how Wisconsin juries must be instructed, what jurors must agree upon unanimously, and how double jeopardy protections may apply.

We invite the Wisconsin Supreme Court to revise the question if it judges that to be appropriate. The facts of these two federal cases are set forth in our panel opinion, 884 F.3d 331 (7th Cir. 2018), and in the district court’s sentencing transcripts. We also submit to the Wisconsin Supreme Court the briefs and records in both of these appeals. While we await a response from the Wisconsin Supreme Court, we will keep these appeals pending in our court, subject to the pending petition for rehearing en banc.

Granted and Vacated

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7^th Circuit Court of Appeals

Case Name: Kelly J. Chavez v. Nancy A. Berryhill

Case No.: 17-2978

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

Focus: ALJ Error – Disability

When a person applies for disability benefits, the Social Security Administration evaluates that person’s capacity to work and, at the fifth and final step of the analysis, assesses whether significant numbers of jobs exist that someone with those abilities and limitations could perform. This determination is consequential: answering no means the claimant is disabled and entitled to supplemental income, whereas a yes answer results in a denial of benefits. At this final step, the agency bears the burden of showing that suitable jobs exist in significant numbers. The vocational expert enlisted by the agency to estimate the number of jobs suitable for Kelly Chavez offered two vastly different projections—testifying that for one particular job there were either 800 or 108,000 existing positions. The vocational expert preferred the larger estimate, and the administrative law judge who presided over Chavez’s hearing agreed with that choice. In the end, the ALJ denied Chavez’s claim for benefits, and the district court affirmed.

We vacate the ALJ’s decision at step five. The decision was not supported by substantial evidence because the ALJ failed to ensure that the vocational expert’s job estimates were reliable. To the contrary, the vocational expert offered no affirmative explanation for why his estimates (or the method that produced them) were reliable and instead reached that conclusion through a process of elimination—by determining that the estimates yielded by an alternative method seemed too low. By affording such broad deference to the vocational expert’s chosen estimates, the ALJ relieved the agency of its evidentiary burden at the final step of the disability analysis and impermissibly shifted the burden to Chavez.

Vacated and Remanded

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7^th Circuit Court of Appeals

Case Name: Amy Dunbar, et al. v. Kohn Law Firm, S.C., et al.

Case No.: 17-2134

Officials: SYKES and HAMILTON, Circuit Judges, and LEE, District Judge

Focus: FDCPA Violation

Amy Dunbar and Tammy Smith received collection letters offering to settle their debts at a significant discount. Both letters included the warning: “This settlement may have tax consequences.” In separate suits Dunbar and Smith claimed that this statement is misleading in violation of the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692e, because they were insolvent when they received the letters and therefore would not have incurred a tax liability for any discharged debts.

The courts below rejected that argument and dismissed the suits on the pleadings. We consolidated the appeals and now affirm. The challenged statement is not false or misleading because “may” does not mean “will” and insolvent debtors might become solvent before settling their debt, triggering the possibility of tax consequences.

Affirmed

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7^th Circuit Court of Appeals

Case Name: Isaac Owens v. Auxilium Pharmaceutics, Inc.

Case No.: 17-3416

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

Focus: Court Error – Expert Testimony

Isaac Owens used Testim, a topical gel containing 1% testosterone, sporadically for two years. During this time, he developed deep vein thrombosis. He sued Testim’s manufacturer, alleging that the drug caused the condition. To show causation—a necessary element of all of his claims—Owens planned to rely on the testimony of Dr. Jihad Abbas. The district court excluded Dr. Abbas’s testimony and, as a result, granted summary judgment in favor of the drug manufacturer. Owens appeals the district court’s decision to exclude his expert’s testimony and grant summary judgment. We affirm.

Affirmed

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7^th Circuit Court of Appeals

Case Name: Paul Lambert v. Nancy A. Berryhill

Case No.: 17-1627

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

Focus: ALJ Error – Disability

Paul Lambert appeals the denial of Disability Insurance Benefits for chronic back pain. The Social Security Administration denied his application initially and on reconsideration, and an administrative law judge (“ALJ”) concluded that Lambert suffers from degenerative disc disease that is severely impairing but not disabling. Lambert challenges the ALJ’s decision to give little weight to the most recent opinions of his treating neurosurgeon and to discredit his own testimony about the severity of his pain and extent of his limitations. We reverse and remand for further agency proceedings.

Affirmed

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WI Court of Appeals Digests

WI Court of Appeals – District III

Case Name: State of Wisconsin v. Ashley Dawn Baumann

Case No.: 2016AP2243-CR

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

Focus: Ineffective Assistance of Counsel

Ashley Baumann appeals a judgment, entered after a jury trial, convicting her of two counts of homicide by intoxicated use of a motor vehicle, contrary to WIS. STAT. § 940.09(1)(a) (2015-16),  one count of causing great bodily harm by intoxicated use of a motor vehicle contrary to WIS. STAT. § 940.25(1)(a), and one count of reckless driving causing great bodily harm contrary to WIS. STAT. § 346.62(4). She also appeals an order denying her postconviction motion seeking a new trial, based upon claimed ineffective assistance by her trial counsel. Baumann contends her trial counsel was ineffective by: (1) both failing to object to and also introducing at trial improper vouching evidence from investigating law enforcement officers; (2) failing to object to both an expert report and expert testimony that improperly relied on a lay witness’s statement; (3) failing to object to a testifying officer’s inadmissible statement that Baumann was the driver of the vehicle; and (4) failing to object to evidence that victim Nicole obtained money through a civil lawsuit. She also requests a new trial in the interest of justice.

We conclude that Baumann’s trial counsel did not perform deficiently in any of the above respects. We further conclude Baumann is not entitled to a new trial in the interest of justice. Accordingly, we affirm.

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WI Court of Appeals – District I

Case Name: State of Wisconsin v. Phillip T. Bailey

Case No.: 2016AP2398-CR

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

Focus: Sufficiency of Evidence

Phillip T. Bailey appeals a judgment of conviction entered after a jury found him guilty of possessing a firearm while a felon. The sole issue on appeal is whether the evidence was sufficient to sustain the conviction. We affirm.

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WI Court of Appeals – District I

Case Name: State of Wisconsin v. Josef K. Eibl

Case No.: 2017AP353-CR; 2017AP354-CR

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

Focus: Plea & Sentencing – Plea Withdrawal

Josef K. Eibl appeals judgments convicting him of stalking and felony bail jumping, both as acts of domestic abuse. He also appeals an order partially denying his postconviction motion. Eibl argues: (1) he should be allowed to withdraw his pleas because they were not knowingly, intelligently, and voluntarily entered; and (2) there is a new factor that entitles him to resentencing. We reject these arguments and we therefore affirm.

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WI Court of Appeals – District III

Case Name: Healthcare Services Group, Inc. v. Wisconsin Department of Revenue

Case No.: 2017AP567

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

Focus: Statutory Interpretation – Sales Tax

Healthcare Services Group, Inc., (HSG) appeals a circuit court order affirming a decision of the Wisconsin Tax Appeals Commission (the Commission). The issue on appeal is whether the Commission properly determined that services HSG provides to its customers qualify as “laundry services” under WIS. STAT. § 77.52(2)(a)6. (2015-16), and are therefore subject to a five percent sales tax. We conclude the statutory term “laundry services” is unambiguous, and the services at issue in this case plainly fall within that term. We further conclude that Manpower Inc. v. DOR, Wis. Tax Rep. (CCH) ¶401-223 at 36,413 (WTAC 2009)—the principal case on which HSG relies—is distinguishable. We therefore affirm the circuit court’s order upholding the Commission’s decision.

Recommended for Publication

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WI Court of Appeals – District I

Case Name: State of Wisconsin v. Terrance Lavone Egerson

Case No.: 2017AP797-CR

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

Focus: 6^th Amendment Violation

Terrance Lavone Egerson appeals from his judgment of conviction, entered upon a jury’s verdict, as well as an order of the trial court denying his postconviction motion. Egerson argues that his right to self-representation was violated when the trial court denied his request to proceed pro se during an exchange with the trial court at a motion hearing. The State argues that Egerson’s request was not clear and unequivocal and, therefore, he did not invoke his right to self-representation. Accordingly, the State contends that there was no violation and thus no error on the part of the trial court. We agree and affirm.

Recommended for Publication

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WI Court of Appeals – District III

Case Name: Cheryl L. Krause N/K/A Cheryl L. Fletcher v. Dale Krause

Case No.: 2017AP1434

Officials: SEIDL, J.

Focus: Court Error – Contempt of Court

Cheryl Krause (now known as Cheryl Fletcher) appeals an order in which the circuit court denied her motion to find her ex-husband, Dale Krause, in remedial contempt of court. Cheryl argues the court erroneously exercised its discretion by not finding Dale in contempt because Dale failed to provide her with his individual and business tax returns as required by their divorce judgment. We affirm.

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WI Court of Appeals – District I

Case Name: Mercedes-Benz USA, LLC, v. Michelle M. Hinkley

Case No.: 2017AP1467

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

Focus: Consumer Protection – Lemon Law

Mercedes-Benz USA, LLC (Mercedes-Benz), appeals an order denying its motions after verdict and granting judgment and costs to Michelle Hinkley in this lemon law action. Both parties filed actions against each other. The cases were consolidated in the trial court. We affirm.

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WI Court of Appeals – District I

Case Name: State of Wisconsin v. Demario D. Fleming

Case No.: 2017AP1851-CR

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

Focus: Sentence Modification

Demario D. Fleming appeals a judgment of conviction and the order denying in part and granting in part his postconviction motion for sentence modification. Fleming seeks modification of two separate parts of his sentence: pretrial detention credit and a condition of his extended supervision. First, regarding credit, he seeks pretrial incarceration credit against his intimidation of a witness sentence for time he spent in custody on four counts of armed robbery. The armed robbery counts were dismissed outright, without prejudice, and not as read-ins, at the time of his sentencing on the intimidation charges. He argues that he is entitled to the credit under WIS. STAT. § 973.155(1) (2015-16), State v. Floyd, 2000 WI 14, ¶27, 232 Wis. 2d 767, 606 N.W.2d 155, and State v. Straszkowski, 2008 WI 65, ¶5, 310 Wis. 2d 259, 750 N.W.2d 835. Second, he seeks a removal of the condition of no contact with M.H., the mother of his child.

The State opposes Fleming’s credit request on the grounds that WIS. STAT. § 973.155(1) and well-established case law in Wisconsin prohibits the credit. As to the no-contact condition, the State argues that it is a proper condition of supervision under State v. Stewart, 2006 WI App 67, ¶11, 291 Wis. 2d 480, 713 N.W.2d 165, and the trial court properly exercised its discretion in imposing it. Thus, the State argues the postconviction court’s order should be affirmed. We agree with the State and affirm.

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WI Court of Appeals – District III

Case Name: Patrick Humfeld, et al. v. State Farm Fire and Casualty Company, et al.

Case No.: 2017AP2522

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

Focus: Statutory Interpretation – Recreational Immunity

Patrick and Lisa Humfeld (collectively, Humfeld) appeal a summary judgment granted in favor of State Farm Fire and Casualty Company and the Estate of John Curtis Marsh, Sr. The circuit court concluded, as a matter of law, that Humfeld’s claims were barred by the recreational immunity statute, WIS. STAT. § 895.52 (2015-16).  On appeal, Humfeld contends there are genuine issues of material fact as to whether the social guest exception and the profit exception to recreational immunity apply. We conclude the undisputed facts demonstrate that neither of those exceptions is applicable. We therefore affirm the judgment dismissing Humfeld’s claims.

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WI Court of Appeals – District II

Case Name: State of Wisconsin v. Gary L. Taylor

Case No.: 2017AP4-CR

Officials: Neubauer, C.J., Reilly, P.J., and Hagedorn, J.

Focus: Improper Commentary

Gary L. Taylor appeals from a judgment entered upon a jury’s guilty verdict convicting him of repeated sexual assault of the same child. He contends that in the State’s rebuttal closing argument, the prosecutor improperly commented on Taylor’s decision not to testify. We disagree and affirm.

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WI Court of Appeals – District II

Case Name: State of Wisconsin v. Antwon D. Flint

Case No.: 2017AP276-CR

Officials: Reilly, P.J., Gundrum and Hagedorn, JJ.

Focus: Ineffective Assistance of Counsel

The trial court granted the State’s motion for a mistrial at Antwon D. Flint’s first jury trial after the jury was sworn. At his second trial, the jury convicted him of armed robbery, use of force, as a party to a crime (PTAC). As he did in his unsuccessful motion for postconviction relief, Flint contends the court erred in (1) ordering the mistrial because it placed him in double jeopardy, and (2) allowing the deliberating jury to watch a video of the robbery without court supervision. We review his claims through the lens of ineffective assistance of counsel. As Flint has not shown that he was prejudiced by his counsel’s actions, we affirm the judgment and order.

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WI Court of Appeals – District I

Case Name: State of Wisconsin v. Arthur Allen Freiboth

Case No.: 2015AP2535-CR

Officials: Sherman, Blanchard, and Kloppenburg, JJ.

Focus: Plea Colloquy

Arthur Freiboth appeals a judgment of conviction and a circuit court order denying, without an evidentiary hearing, his motion for post-sentencing plea withdrawal. Freiboth contends that the court had a duty to advise him as part of the plea colloquy about the DNA surcharges that he would be required to pay as a result of his pleas, and the court failed to so advise him, entitling him to withdraw his pleas. We conclude that this argument is foreclosed by the combined holdings of State v. Muldrow, 2018 WI 52, 381 Wis. 2d 492, 912 N.W.2d 74, and State v. Williams, 2018 WI 59, 381 Wis. 2d 661, 912 N.W.2d 373. Accordingly, we affirm.

Recommended for Publication

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WI Court of Appeals – District IV

Case Name: Kimberly A. Lueck v. Ryan Mansky, et al.

Case No.: 2016AP2164

Officials: Sherman, Blanchard and Fitzpatrick, JJ.

Focus: Special Verdict Questions

Ryan Mansky and his insurer, Integrity Property and Casualty Company of Wisconsin, (collectively, Mansky) appeal a money judgment in favor of Kimberly Lueck. Lueck sustained injuries while engaging in water activities behind a boat piloted by Mansky, and she brought the present negligence action against Mansky seeking to recover for those injuries. A jury found in favor of Lueck and the circuit court entered judgment upon that verdict. Mansky contends that the answer to one of two special verdict questions submitted to the jury should be changed, and that he is entitled to a new trial because the jury’s verdict is against the great weight and clear preponderance of the evidence.  We affirm.

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WI Court of Appeals – District IV

Case Name: M.S.G. v. J.L.H., et al.

Case No.: 2017AP1098

Officials: Lundsten, P.J., Sherman and Fitzpatrick, JJ.

Focus: Due Process Violation – Paternity Testing

B.H. appeals a circuit court order adjudicating M.S.G. the father of a child born to J.L.H. after B.H. and J.L.H. married. B.H. argues that his due process and statutory rights were violated by the failure to name or join him as a party prior to the time a court commissioner issued an order for genetic testing. We assume, without deciding, that B.H. has shown a violation of his rights. We conclude, however, that the circuit court provided a sufficient remedy for this asserted violation when the court joined B.H. as a party and gave him an opportunity to participate in the circuit court’s review of the court commissioner’s decision to order testing. B.H. also argues that the circuit court erred in its application of best interest factors. We disagree. The order is affirmed.

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WI Court of Appeals – District IV

Case Name: State of Wisconsin v. Darnell Hines

Case No.: 2017AP1424

Officials: Lundsten, P.J., Sherman and Fitzpatrick, JJ.

Focus: Sentencing

Darnell Hines appeals an order denying his postconviction motion to vacate his sentence. Hines argues that his sentence violates the prohibition in the United States and Wisconsin Constitutions against cruel and unusual punishments. We reject Hines’s argument and affirm the order of the circuit court.
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