Weekly Case Digests – November 11, 2019 – November 15, 2019

Listen to this article

7^th Circuit Digests

7^th Circuit Court of Appeals

Case Name: Union Pacific Railroad Company v. Wisconsin Department of Revenue

Case No.: 19-1741

Officials: FLAUM, ROVNER, and SCUDDER, Circuit Judges.

Focus: Property Tax Exemption

The Wisconsin Department of Revenue (the “Department”) disallowed the Union Pacific Railroad Company (“Union Pacific”) from claiming a property tax exemption for the value of its custom computer software, which under Wisconsin law is a type of intangible personal property. Union Pacific refused to pay the tax on its custom software and filed suit, arguing that the tax singles out railroads as part of an isolated and targeted group in violation of Section 306 of the Railroad Revitalization and Regulatory Reform Act of 1976 (the “4-R Act”), codified at 49 U.S.C. § 11501(b)(4) (“subsection (b)(4)”). The defendants contend that Wisconsin is permitted to grant non-railroads an exemption from its generally applicable ad valorem property tax scheme for intangible property, even if railroads do not qualify for the same exemption. The intangible property tax, however, exempts everyone except for an isolated and targeted group of which railroads are a part. The district court entered summary judgment for Union Pacific. We affirm.

Affirmed

Full Text

7^th Circuit Court of Appeals

Case Name: Paul Nigl, et al. v. Jon Litscher, et al.

Case No.: 19-1618

Officials: FLAUM, ROVNER, and SCUDDER, Circuit Judges.

Focus: 14^th Amendment Violation

Wisconsin Department of Corrections officials denied inmate Paul Nigl’s request to marry his former prison psychologist, Dr. Sandra Johnston. Nigl and Johnston filed suit, arguing that the denial violates their fundamental right to marry. The denial, however, was reasonably related to legitimate penological interests. Nigl and Johnston had engaged in a pattern of rule-breaking and deception in furtherance of their relationship leading up to the date of the marriage request, and the Psychology Examining Board concluded that Johnston had violated rules designed to protect patients in connection with her relationship with Nigl. The defendants also represent that the decision to deny the marriage request in January 2017 is not tantamount to a permanent denial. We therefore affirm the district court’s entry of summary judgment for the defendants.

Affirmed

Full Text

7^th Circuit Court of Appeals

Case Name: 4SEMO.com Inc., v. Southern Illinois Storm Shelters, Inc., et al.

Case No.: 18-1998; 18-2095

Officials: EASTERBROOK, SYKES, and BRENNAN, Circuit Judges.

Focus: Trademark Infringement

This appeal involves a long-running trademark dispute over ownership and misuse of a wordmark and logo for below-ground storm shelters. The story begins in 2005 when a Missouri-based home-remodeling firm known as 4SEMO.com Inc. began selling storm shelters manufactured by Southern Illinois Storm Shelters, Inc. (“SISS”), an Illinois company run by Robert “Bob” Ingoldsby and his brother Scott. The dealership agreement gave 4SEMO the exclusive right to sell SISS shelters in portions of Missouri and Arkansas. As part of its marketing campaign, 4SEMO created a wordmark—“Life Saver Storm Shelters”— and a logo using that name, which it affixed to the shelters. In 2006 the Ingoldsbys asked 4SEMO for permission to use these marks on shelters marketed in southern Illinois. 4SEMO granted a limited license for that purpose, but the Ingoldsbys violated it by using the marks on products sold throughout the country.

SISS sued 4SEMO for trademark infringement, claiming prior use and ownership of the “Life Saver” wordmark. That claim did not survive summary judgment. 4SEMO counterclaimed for trademark infringement and false endorsement under the Lanham Act, along with several state-law claims. The counterclaims were tried to the bench, and the district judge found for 4SEMO across the board, entered a cease-and-desist order, and awarded more than $17 million in disgorged profits as damages. The judge denied 4SEMO’s motion for vexatious-litigation sanctions under 28 U.S.C. § 1927 and attorney’s fees under the Lanham Act.

On appeal SISS does not contest the judge’s factual findings. It argues instead that 4SEMO’s logo violates a statute that makes it a crime to use the iconic emblem reserved to the American Red Cross: a red Greek cross on a white background. SISS also raises a novel legal argument to attack 4SEMO’s ownership of the wordmark. Finally, SISS challenges the eight-figure monetary award. In a cross-appeal 4SEMO seeks review of the denial of § 1927 sanctions and Lanham Act attorney’s fees.

We affirm for the most part. SISS’s statutory argument is meritless and its legal theory challenging 4SEMO’s ownership of the marks is new on appeal and thus is waived. We also reject the challenge to the damages award; the judge’s conclusion that SISS engaged in trademark infringement on a vast scale is well supported by the evidence. Finally, although the judge reasonably concluded that § 1927 sanctions were not warranted, his summary denial of Lanham Act fees cannot be squared with his factual findings and legal conclusions on the merits of the infringement claim. Because those findings and conclusions satisfy the Act’s standard for recovery of attorney’s fees, we remand for the limited purpose of determining a reasonable fee award.

Affirmed in part. Reversed and remanded in part.

Full Text

7^th Circuit Court of Appeals

Case Name: Alejandro Yeatts v. Zimmer Biomet Holdings, Inc.,

Case No.: 19-1269

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

Focus: Defamation Claim

Alejandro Yeatts became ensnared in a federal investigation of his employer, Zimmer Biomet Holdings, Inc. (“Biomet”), for violations of the Foreign Corrupt Practices Act because of his contacts with a distributor in Latin America who had bribed doctors. To resolve the criminal and civil charges against it, Biomet entered two deferred prosecution agreements with the Department of Justice in 2012 and 2017. Following the 2012 agreement, Biomet had to distribute a Restricted Parties List of individuals who posed a risk to Biomet’s compliance with anti-corruption and anti-bribery laws. The list included Yeatts and a notation regarding his suspension in connection with the corruption investigation of Biomet’s Latin American subsidiary. After Biomet terminated Yeatts, he sued his former employer for defamation based on his inclusion on the Restricted Parties List. The district court entered summary judgment for Biomet. Because Biomet’s inclusion of Yeatts on the Restricted Parties List conveyed no defamatory imputation of objectively verifiable or testable fact, we affirm.

Affirmed

Full Text

7^th Circuit Court of Appeals

Case Name: United States of America v. Dennis D. Jackson

Case No.: 18-3534

Officials: FLAUM, SYKES, and SCUDDER, Circuit Judges.

Focus: Sentencing Guidelines – Resentencing

Dennis Jackson was convicted of multiple drug charges and sentenced to mandatory life imprisonment. He appeals his convictions on the grounds that the district court erred in allowing certain recordings and testimony into evidence; he also challenges his sentence, seeking a reduction in light of the First Step Act. For the reasons stated below, we affirm the judgment of the district court.

Affirmed

Full Text

7^th Circuit Court of Appeals

Case Name: United States of America v. Sergio Marguerito Zacahua

Case No.: 16-4046

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

Focus: Plea Withdrawal

Defendant-Appellant Sergio Zacahua requests that we vacate his guilty plea because the district court failed to inform him of the potential immigration consequences of his plea, as Federal Rule of Criminal Procedure 11(b)(1)(O) requires. The government concedes, and we agree, that the district court failed to give Zacahua this admonishment. But because Zacahua does not demonstrate a reasonable probability that, had the district court provided this warning, he would not have pleaded guilty, we affirm.

Affirmed

Full Text

7^th Circuit Court of Appeals

Case Name: Christine Dancel v. Groupon, Inc.,

Case No.: 19-1831

Officials: BAUER, BRENNAN, and ST. EVE, Circuit Judges.

Focus: Class Action – Subject-matter Jurisdiction

We accepted Christine Dancel’s petition under Federal Rule of Civil Procedure 23(f) so that we could review the district court’s denial of class certification. Dancel, however, has proceeded as though we gave her a free ticket to redo her opposition to the removal of her suit from state court. Although we refuse to entertain the bulk of her arguments, she has drawn our attention to a critical hole in the notice of removal—it does not allege the citizenship of even one diverse member of the putative class. We therefore order a limited remand so that the district court can patch this hole, securing its jurisdiction over the case.

Limited Remand

Full Text

7^th Circuit Court of Appeals

Case Name: David McDaniel v. Progress Rail Locomotive, Inc.,

Case No.: 18-3565

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

Focus: ADEA Violation

Plaintiff-appellant David McDaniel alleges his former employer, defendant-appellee Progress Rail Locomotive, Inc., unlawfully discriminated against him on the basis of age and retaliated against him for complaining about a superior, in violation of the Age Discrimination in Employment Act (“ADEA”), 29 U.S.C. §§ 621–34. The district court ultimately granted summary judgment in favor of Progress Rail. We affirm.

McDaniel has not supplied evidence of any similarly situated employee that would allow a factfinder to determine whether any adverse employment action he experienced was the result of age discrimination or retaliation against him. Summary judgment was therefore appropriate.

Affirmed

Full Text

7^th Circuit Court of Appeals

Case Name: United States of America v. Darin Kaufmann

Case No.: 18-2742

Officials: EASTERBROOK, KANNE, and BRENNAN, Circuit Judges.

Focus: Sentencing Guidelines – Enhancement

For certain federal crimes involving sexual exploitation of minors, a federal statute— 18 U.S.C. § 2252(b)—increases the mandatory minimum sentence when the defendant has a prior conviction “under the laws of any State relating to,” among other things, “possession … of child pornography.” Darin Kaufmann pled guilty to two federal crimes involving sexual exploitation of a minor.

The district court imposed an enhanced mandatory minimum sentence under § 2252(b) because Kaufmann has prior convictions for possession of child pornography under an Indiana statute. Kaufmann challenged his sentence, arguing that his prior state convictions do not support a § 2252(b) enhancement because the Indiana statute of his convictions criminalized conduct broader than the federal version of possession of child pornography.

In United States v. Kraemer, we held that a § 2252(b) enhancement does not require the state statute of conviction to be the same as or narrower than the analogous federal law. 933 F.3d 675 (7th Cir. 2019). Rather, the words “relating to” in § 2252(b) expand the range of enhancement-triggering convictions. Id. at 679–83. Under Kraemer, Kaufmann’s Indiana convictions are ones “relating to … possession … of child pornography” and thus support the mandatory minimum enhancement. Adhering to our decision in Kraemer, we affirm Kaufmann’s sentence.

Affirmed

Full Text

7^th Circuit Court of Appeals

Case Name: Victor Brown v. Sue Peters, et al.,

Case No.: 19-1420

Officials: WOOD, Chief Judge, and SCUDDER and ST. EVE, Circuit Judges.

Focus: 8^th Amendment Violation – Deliberate Indifference

In Coleman v. Labor & Industry Review Commission, 860 F.3d 461 (7th Cir. 2017), we held that a magistrate judge does not have the authority to enter a final judgment in a case when only one party—in that case, the plaintiff—has consented to the magistrate judge’s jurisdiction. See 28 U.S.C. § 636(c). That rule holds, we said, even if the magistrate judge is engaged in nothing more than the screening process required for a case brought by a prisoner who wishes to proceed in forma pauperis. See 28 U.S.C. §§ 1915(e)(2)(B)(ii), 1915A. If the magistrate judge concludes that the case must be dismissed for failure to state a claim upon which relief can be granted, FED. R. CIV. P. 12(b)(6), that is a disposition on the merits, and therefore, in the absence of valid consents, the judge is empowered to do no more than submit a report and recommendation to an Article III judge for final resolution. Coleman, 860 F.3d at 475.

The present appeal presents a new wrinkle for cases at the screening stage: is it possible for the state defendant to consent in advance to the magistrate judge’s jurisdiction to conduct the initial case screening and, if the plaintiff has also filed his consent, to enter a final judgment dismissing the case with prejudice? That is exactly what the Wisconsin Department of Justice and the U.S. District Court for the Eastern District of Wisconsin have attempted to accomplish through a Memorandum of Understanding (MOU) that became effective in 2018, apparently in response to Coleman.

We hold that the “Limited Consent to Magistrate Judge Jurisdiction To Conduct Initial Case Screening” adopted by the U.S. District Court for the Eastern District of Wisconsin and the Wisconsin Department of Justice satisfies the requirement in 28 U.S.C. § 636(c) that both parties consent to magistrate judge authority to resolve a case with a final judgment. That includes the authority to decide that a prisoner’s complaint fails to state a claim upon which relief can be granted. In the present case, that is exactly what Magistrate Judge Duffin concluded. Only two named defendants were before him, and he had this to say about them: [T]he court notes that [Brown] names Sue Peters and Jean Lutsey as defendants but does not allege any facts supporting a claim that either of them violated his constitutional rights. Under section 1983, an individual can be liable only if that individual is personally responsible for a constitutional deprivation. … There is no supervisory liability, collective liability or vicarious liability under 42 U.S.C. § 1983. In other words, there is no liability unless the defendant is personally involved in the violation of plaintiff’s rights. … Therefore, Brown may not proceed against Sue Peters or Jean Lutsey. (Citations omitted.) With respect to the Doe defendants, the court added that it saw nothing in Brown’s allegations that would amount to deliberate indifference.

We agree with this assessment of Brown’s case. To state a claim, Brown needed to allege that the nurses were deliberately indifferent to his medical needs after he engaged in selfharm. See Estelle v. Gamble, 429 U.S. 97, 104–05 (1976); Palmer v. Franz, 928 F.3d 560, 563 (7th Cir. 2019). But no trier of fact could so find in light of Brown’s allegations. After he cut himself, a nurse saw him, checked his vital signs appropriately and found nothing amiss, verified how much blood was in the cell, and placed him on observation. The next morning, he was again examined by a nurse who checked his vitals, which were normal. When he later developed chest pain, he was sent to the emergency room. By Brown’s own account, the nurses used their medical judgment and thus did not act with deliberate indifference. See Jackson v. Kotter, 541 F.3d 688, 697 (7th Cir. 2008); Gutierrez v. Peters, 111 F.3d 1364, 1374 (7th Cir. 1997) (holding plaintiff pleaded himself out of court when complaint showed he has no claim for deliberate indifference). At most (and even this is a stretch), Brown alleged facts that show negligence, which is not enough to support an Eighth Amendment claim. See Estelle, 429 U.S. at 106; Guzman v. Sheahan, 495 F.3d 852, 857 (7th Cir. 2007). We AFFIRM the judgment of the district court.

Affirmed

Full Text

7^th Circuit Court of Appeals

Case Name: United States of America v. Reynold De La Torre, et al.

Case No.: 18-2009; 18-2218; 18-2286; 18-3303; 19-1299

Officials: FLAUM, SYKES, and ST. EVE, Circuit Judges.

Focus: Consolidated Appeals – Sentencing

The Zamudio drug organization distributed pounds of methamphetamine and cocaine through‐ out the Indianapolis, Indiana area. At the top sat Jose Zamudio, who imported the drugs from his suppliers in Mexico and oversaw his network of distributors here. Reynold De La Torre, Christian Chapman, Jeffrey Rush, and Adrian Bennett were four of those local distributors. Maria Gonzalez was Zamudio’s live‐in girlfriend. Besides permitting Zamudio to store and traffic drugs out of her home, Gonzalez helped launder Zamudio’s drug money and wired hundreds of thousands of dollars to Mexico and California.

Zamudio, Gonzalez, De La Torre, Chapman, Rush, and Bennett all eventually pleaded guilty and were sentenced to lengthy prison terms. Each separately appealed on different grounds, and we consolidated the appeals. We affirm the sentences of Gonzalez, De La Torre, and Bennett. We vacate the guilty pleas of Chapman and Rush and remand for further proceedings.

Vacated and remanded

Full Text

7^th Circuit Court of Appeals

Case Name: Jamie Swartz, et al. v. Heartland Equine Rescue, et al.

Case No.: 18-3260

Officials: FLAUM, SYKES, and SCUDDER, Circuit Judges.

Focus: Subject-matter Jurisdiction

The plaintiffs, Jamie and Sandra Swartz, allege a conspiracy among multiple state and private defendants to deprive them of their property, namely, several goats and horses. The district court dismissed the private defendants and later entered summary judgment in favor of the state defendants. We now vacate the district court’s rulings and remand this case for dismissal due to a lack of federal subject matter jurisdiction. The Swartzes’ claims are inextricably intertwined with state court judgments, requiring dismissal under the Rooker-Feldman doctrine.

Vacated and remanded

Full Text

WI Court of Appeals Digests

WI Court of Appeals – District III

Case Name: State of Wisconsin v. Larry W. Olson

Case No.: 2018AP1075-CR; 2018AP1076-CR

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

Focus: Sentencing – Conditional Release

In these consolidated cases, Larry Olson appeals from orders revoking his conditional release, pursuant to WIS. STAT. § 971.17(3)(e) (2017-18). The sole issue before us is whether the time limit set forth in § 971.17(3)(e) requiring that the Department of Health Services (the Department) “shall submit” a statement of probable cause and a petition to revoke an order for conditional release within seventy-two hours of detaining a person is directory or mandatory.

We conclude the seventy-two-hour time limit set forth in WIS. STAT. § 971.17(3)(e) is mandatory. Consequently, the Department’s undisputed failure to comply with the time limit in this case deprived the circuit court of competency to consider the Department’s petition to revoke Olson’s conditional release. We therefore reverse and remand with directions for the court to dismiss the Department’s petition.

Recommended for Publication

Full Text

WI Court of Appeals – District III

Case Name: State of Wisconsin v. Michael R. McGinnis

Case No.: 2018AP1388-CR

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

Focus: Probable Cause – Unlawful Entry

The State of Wisconsin appeals an order granting Michael McGinnis’s motion to suppress evidence obtained during his arrest. The State acknowledges that there was an unlawful entry into McGinnis’s residence, and that, as a result, the circuit court properly suppressed evidence and statements the police obtained while inside the residence. The State contends, however, that because the police officer possessed probable cause to arrest McGinnis at the time of the unlawful entry, evidence and statements police subsequently gathered while outside the residence need not be suppressed.

We agree with the State and conclude that at the time of the unlawful entry into McGinnis’s residence, law enforcement possessed probable cause to arrest McGinnis for operating a vehicle with a prohibited alcohol concentration (PAC). As a result, pursuant to New York v. Harris, 495 U.S. 14 (1990), and State v. Felix, 2012 WI 36, 339 Wis. 2d 670, 811 N.W.2d 775, the evidence police obtained outside of McGinnis’s residence following the unlawful entry is admissible against McGinnis in his criminal prosecution. We therefore reverse, in part, the order granting McGinnis’s suppression motion and remand for further proceedings consistent with this opinion.

Full Text

WI Court of Appeals – District I

Case Name: State of Wisconsin v. Robert C. Washington

Case No.: 2018AP1771-CR

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

Focus: Ineffective Assistance of Counsel

Robert C. Washington appeals a judgment of conviction, following guilty pleas, of one count of first-degree reckless homicide and one count of first-degree reckless injury. On appeal, Washington contends that: (1) trial counsel was ineffective for failing to advise Washington about the possibility of requesting instructions at trial for lesser-included offenses; (2) newly discovered evidence in the form of W.W.’s acknowledgment that he threw a basketball at Washington warrants plea withdrawal; and (3) alternatively, resentencing is warranted because counsel was ineffective at the sentencing hearing. We address each issue. We affirm.

Full Text

WI Court of Appeals – District III

Case Name: State of Wisconsin v. Jude W. Giles

Case No.: 2018AP1967-CR

Officials: STARK, P.J.

Focus: Exclusion of Evidence – Expert Testimony

Jude Giles appeals a judgment, entered following a jury trial, convicting him of operating a motor vehicle while intoxicated (OWI), as a second offense. Giles argues the circuit court violated his constitutional right to present a defense when it prohibited him from introducing at trial the results of a preliminary breath test (PBT), along with expert witness testimony that relied on those results. We conclude the court properly prevented Giles from presenting this evidence. The PBT results were clearly inadmissible under WIS. STAT. § 343.303, and our supreme court previously determined in a case involving similar facts that excluding expert testimony based on PBT results did not violate the defendant’s constitutional right to present a defense. See State v. Fischer, 2010 WI 6, 322 Wis. 2d 265, 778 N.W.2d 629, superseded by statute on other grounds, see State v. Jones, 2018 WI 44, ¶¶6-7, 381 Wis. 2d 284, 911 N.W.2d 97. We therefore affirm Giles’ judgment of conviction.

Full Text

WI Court of Appeals – District I

Case Name: State of Wisconsin v. Marcus Demond Anderson, Sr.,

Case No.: 2018AP2016-CR

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

Focus: Evidentiary Hearing

Marcus Demond Anderson, Sr. appeals a judgment of conviction, following guilty pleas, to two counts of delivering heroin. Anderson also appeals the order denying his motion for postconviction relief. Anderson argues that statements made at his sentencing hearing constituted an implicit request for new counsel and the circuit court erroneously exercised its discretion in failing to inquire about Anderson’s concerns. We agree and therefore reverse the circuit court’s postconviction order denying Anderson’s motion and remand the matter for a retrospective evidentiary hearing.

Full Text

WI Court of Appeals – District II

Case Name: State of Wisconsin v. Genevieve S. Thornberry

Case No.: 2018AP1578-CR

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

Focus: Abuse of Discretion – Sex Offender Registration

Genevieve S. Thornberry appeals an amended judgment convicting her of causing mental harm to a child, contrary to WIS. STAT. § 948.04(1) (2017-18), to the extent that it ordered her to register as a sex offender under WIS. STAT. § 301.45. The amended judgment resulted from a hearing the circuit court sua sponte called post-sentencing at which it ordered the sex-offender registration. She also appeals the order denying her postconviction motion that challenged the court’s authority to recall the case on its own.

We agree that it would have been within the court’s discretion at the initial sentencing to order sex-offender registration, even though the State did not request it. Ordering registration later upon its own initiative, however, strikes us as impermissible sentence-modification upon “reflection by the court.” We reverse and remand the matter to the circuit court with instructions to enter an amended judgment of conviction that does not require Thornberry to register as a sex offender.

Full Text

WI Court of Appeals – District IV

Case Name: Dane County Department of Human Services

Case No.: 2019AP1336; 2019AP1337; 2019AP1338

Officials: BLANCHARD, J.

Focus: Termination of Parental Rights

T.R. appeals the circuit court’s orders terminating her parental rights to three children, K.D., K.S., and A.S., on the petitions of the Dane County Department of Human Services (the County). She challenges only the circuit court’s rulings in the dispositional phase and makes no arguments regarding the grounds phase. She argues that the court erroneously exercised its discretion in three ways: (1) by failing to consider whether the children have substantial relationships with one another and whether termination of her parental rights would sever those child-to-child relationships in a harmful manner; (2) by failing to reflect adequate consideration of the factors pertinent to the disposition of a termination of parental rights case under WIS. STAT. § 48.426(3); and (3) by failing to adequately consider the potential consequences of T.R. losing her parental rights in light of the prospect of the father of K.S. and A.S. retaining his parental rights to both children. I reject T.R.’s arguments and affirm.

Full Text