Justia Legal Ethics Opinion Summaries

Articles Posted in US Court of Appeals for the Seventh Circuit
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Triplett pleaded guilty to three charges of human trafficking, pimping and pandering, and possession of a firearm by a felon, in exchange for the dismissal of 17 charges (including attempted first-degree homicide and kidnapping), which were to be “read-in” at sentencing (essentially allowing the judge to consider them as relevant conduct), Triplett’s total sentencing exposure was reduced from 354 years to a maximum of 47.5 years. The judge confirmed with defense counsel that the dismissed charges would be read-in. Defense counsel noted that Triplett did not admit the truth of the charges. In signing his plea agreement, Triplett acknowledged that “although the judge may consider read-in charges when imposing sentence, the maximum penalty will not be increased.” The judge ordered Triplett to serve 11 years in prison followed by nine years of supervision.Triplett unsuccessfully moved to withdraw his plea. Without conducting a hearing, the court determined that even if Triplett was given incorrect advice about the read-charges, Triplett was not prejudiced. The plea questionnaire and waiver of rights warned Triplett that the court could consider those charges. The court also represented that it had not considered the read-in charges at sentencing. Wisconsin's Court of Appeals and Supreme Court upheld the decision. The Seventh Circuit affirmed the denial of federal habeas relief. The Wisconsin court’s rejection of Triplett's ineffectiveness claim rests on an adequate, independent state ground--Triplett’s failure to allege objective facts in support of his claim of prejudice. View "Triplett v. McDermott" on Justia Law

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Thill was convicted of sexual contact with A.M.M., his ex‐girlfriend’s eight‐year‐old daughter. A.M.M. testified that Thill had sexually assaulted her; Thill’s semen was found on her underwear. Thill’s defense was that his jilted ex‐girlfriend framed him by saving his semen for over a year, planting it on her daughter’s underwear, and coaching her to make false accusations. While cross‐examining Thill and in closing arguments, the prosecutor referenced Thill’s failure to tell the police during his initial interview that he believed his ex‐girlfriend had the means or motivation to frame him. In postconviction proceedings, Thill argued that the prosecutor impermissibly used his silence after receiving Miranda warnings to impeach him and that his trial counsel was ineffective for failing to object. The Wisconsin Court of Appeals concluded Thill had not demonstrated prejudice.The Seventh Circuit affirmed, finding that conclusion not contrary to nor an unreasonable application of clearly established federal law. The state court correctly paraphrased Strickland’s prejudice standard and nothing in its analysis suggested it used a standard “‘substantially different’ from or ‘opposite to’” that standard. The state presented significant direct evidence of a specific sexual assault. Thill’s defense had significant holes that extended far beyond his failure to raise this defense to the police; it was “weak and unpersuasive” and largely rested on Thill’s “self‐serving testimony.” View "Thill v. Richardson" on Justia Law

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Rexing sought a ruling that Rexing was excused from its obligations to purchase eggs under its contract with Rembrandt. Rembrandt filed a counterclaim seeking damages for Rexing’s repudiation of the contract, attorneys’ fees, and interest. Following discovery, the district court granted Rembrandt summary judgment on liability but concluded that there were genuine issues of triable fact as to damages. A jury awarded Rembrandt $1,268,481 for losses on eggs it had resold and another $193,752 for losses on eggs that it was not able to resell. The court determined that the interest term in the parties’ agreement was usurious, so that Rembrandt was not entitled to contractual interest or attorneys’ fees.The Seventh Circuit affirmed the damages award. The district court properly concluded that the resale remedy under Iowa’s version of the Uniform Commercial Code, Iowa Code 554.2706, was the appropriate mechanism for calculating Rembrandt’s damages and Rexing waived its arguments challenging the award by not presenting them to the district court in a post-verdict motion. Reversing in part, the court held that the parties’ agreement fell within the “Business Credit Exception” to Iowa’s usury statute, Iowa Code 535.5(2)(a)(5), and remanded the denial of Rembrandt’s request for interest and fees. View "Rexing Quality Eggs v. Rembrandt Enterprises, Inc." on Justia Law

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Plaintiffs, a start‐up company and its founder (Marlowe), sued the company’s former chief legal officer, Fisher, to recover losses from an arbitration award that held them liable for years of unpaid wages owed to Fisher himself. The award comprised unpaid wages and statutory penalties totaling $864,976 and an additional $366,460 because Fisher did not receive written notice of his contract nonrenewal. Plaintiffs alleged that Fisher advised them to enter into what they now say was an illegal agreement to defer Fisher’s compensation until the company was able to secure more funding.The Seventh Circuit affirmed the dismissal of the suit. Even if Marlowe was Fisher’s client regarding her own compensation agreement and a decision not to purchase directors and officers insurance, the plaintiffs failed to plead any plausible malpractice claims arising from those matters. Plaintiffs did not allege that they would have opted against using the compensation agreements had Fisher fully advised them. The company violated the Illinois Wage Act by failing to pay Fisher as agreed. The agreement did not aggravate or add to those violations; it made sense as an interim measure to forestall litigation by acknowledging the obligation and committing the company to one way to satisfy it. View "UFT Commercial Finance, LLC v. Fisher" on Justia Law

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Now in his sixties, Bridges has been in and out of prison since he was a teenager. After staying out of trouble for eight years, Bridges got involved in drugs again and committed four robberies in two days in 2017. He netted scarcely $700. Charged with four counts of Hobbs Act robbery, 18 U.S.C. 1951, Bridges agreed to plead guilty, stipulating that he was subject to the career offender enhancement, U.S.S.G. 4B1.1, which could apply only if his crimes of conviction were “crimes of violence” under the Guidelines. The enhancement more than doubled his sentencing range. The court imposed a below-guideline sentence of 140 months.Bridges sought postconviction relief, alleging he was denied effective assistance of counsel because his lawyer failed to argue that Hobbs Act robbery did not qualify as a “crime of violence.” At the time, there was no Seventh Circuit precedent on that issue. The district court denied relief. The Seventh Circuit reversed for an evidentiary hearing on defense counsel’s performance, joining other circuits that have concluded that Hobbs Act robbery is not a Guidelines “crime of violence.” When Bridges pleaded guilty, the building blocks for a successful legal argument were in place. Effective counsel would have considered this important question; minimal research would have uncovered a Tenth Circuit decision holding that Hobbs Act robbery was no longer a crime of violence under a 2016 amendment to the Guideline definition of a crime of violence. View "Bridges v. United States" on Justia Law

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Charged in Wisconsin state court with armed robbery and false imprisonment, Saechao retained attorney Kronenwetter. The state charged Alonso-Bermudez and others, based on the same crimes. Those cases proceeded separately. The public defender did not know that Kronenweer was representing Saechao when it appointed him to represent Alonso-Bermudez. Kronenwetter told the judge in Saechao’s prosecution that he was concerned about a potential conflict of interests. After six weeks, he withdrew as Alonso-Bermudez’s lawyer. The public defender named Bachman as his replacement. The Saechao judge wanted an unconditional waiver of any conflict from both defendants. Saechao provided one; Alonso-Bermudez declined. The prosecutor listed Alonso-Bermudez as a potential witness in Saechao’s case; the judge disqualified Kronenwetter. By then Bachman had indicated that Alonso-Bermudez was willing to sign a general waiver but Alonso-Bermudez fired him; the judge thought that Bachman no longer could speak for Alonso-Bermudez. Saechao went to trial with a new lawyer and was convicted. Wisconsin’s appellate court affirmed, rejecting his argument that the judge had violated the Constitution by depriving him of his chosen lawyer. The Seventh Circuit affirmed the denial of federal habeas relief. Wisconsin’s Court of Appeals reasonably applied Supreme Court precedent. The judge had the discretion to disqualify counsel to avoid a serious risk of conflict. and had at least one good reason for disqualification, the fact that Alonso-Bermudez appeared on the prosecution’s witness list. View "Saechao v. Eplett" on Justia Law

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In 2002, GTL, a mutual reserve company that underwrites insurance policies, engaged Platinum to market its insurance products. After a customer sued both parties, GTL terminated the marketing agreement. In 2015, the lawsuit settled. GTL sued Platinum for breaching the marketing agreement. In 2017, in arbitration, GTL and Platinum entered a settlement agreement, resolving all the claims that had and could have been brought in that litigation and providing for “reasonably proportionate” attorneys fees to the prevailing party in any future litigation. Weeks before the parties executed the 2017 settlement, another customer sued GTL in Missouri. After the 2017 settlement agreement took effect, GTL filed a third-party complaint against Platinum in that Missouri lawsuit, claiming that Platinum breached the marketing agreement by failing to ensure its contractors’ compliance with regulations, GTL's guidelines, and requirements for advertising its insurance products, and GTL's Code of Ethical Market Conduct.Platinum sued GTL in federal court, arguing that the Missouri third-party complaint mirrored claims resolved by the 2017 settlement agreement and was therefore barred. The district court granted Platinum summary judgment and awarded $108,445.10 in attorneys fees (150% of the underlying damages award). The Seventh Circuit affirmed. The 2017 agreement bars the third-party complaint and the award of attorneys fees is “reasonably proportionate” to the underlying damages. View "Platinum Supplemental Insurance, Inc. v. Guarantee Trust Life Insurance Co." on Justia Law

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LHO owns a downtown hotel that it rebranded as “Hotel Chicago” in 2014. In 2016, Rosemoor renamed its existing westside hotel as “Hotel Chicago.” LHO sued Rosemoor for trademark infringement and unfair competition under the Lanham Act and for deceptive advertising and common-law trademark violations under Illinois law. The district court denied preliminary injunctive relief, finding that “LHO has failed, at this juncture, to show that it is likely to succeed in proving secondary meaning" and was unlikely to show that “Hotel Chicago” was a protectable trademark. LHO appealed but successfully moved to voluntarily dismiss its claims with prejudice before briefing.Rosemoor requested more than $500,000 in attorney fees, arguing that the case qualified as “exceptional.” The district court denied the request under the Seventh Circuit's “abuse-of-process” standard. The Seventh Circuit held that the district court should have evaluated Rosemoor’s attorney-fee request under the Supreme Court’s “Octane Fitness” holding. On remand, Rosemoor filed a renewed request for more than $630,000 in fees, arguing that the weakness of LHO’s position on the merits, LHO’s motives in bringing suit, and its conduct in discovery, made the case exceptional under Octane Fitness. The Seventh Circuit affirmed the denial of the request. The district court applied the Octane Fitness standard and reasonably exercised its discretion in weighing the evidence before it. View "LHO Chicago River, L.L.C. v. Rosemoor Suites, LLC" on Justia Law

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In 2005-2007, Merchant purchased Michigan hotel properties from NRB and financed the purchases through NRB, using corporate entities as the buyers. Merchant sold interests in those entities to investors. The hotels had been appraised at inflated amounts and sold for about twice their fair values. When the corporate entities defaulted on their loan payments, NRB foreclosed in 2009. Merchant claimed that NRB’s executives colluded with an appraiser to sell overvalued real estate to unsuspecting purchasers, wait for default, foreclose, and then repeat the process.In 2010, an investor sued Merchant, Merchant’s companies, NRB, and 12 others for investor fraud. In 2014 the FDIC took NRB into receivership and substituted for NRB as a defendant. Merchant and his companies brought a cross-complaint, alleging violations of the Racketeer Influenced and Corrupt Organizations Act (RICO) and state laws. A Fifth Amended Cross-Complaint raised 14 counts against 10 defendants, including two law firms that provided NRB’s legal work. The district court dismissed several counts; others remain active.The Seventh Circuit affirmed the dismissal of claims against the law firms. The counts under state law are untimely under Illinois’s statute of repose. The cross-complaint effectively admits that one firm played no role in NRB’s alleged fraud perpetrated against Merchant in 2005-2007. The cross-complaint failed to allege that either law firm conducted or participated in the activities of a RICO enterprise; neither firm could be liable under 18 U.S.C. 1962(c). View "Muskegan Hotels, LLC v. Patel" on Justia Law

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O’Donnell, represented by attorney Horn, challenged the Social Security Administration’s (SSA) denial of her application for disability insurance benefits. A magistrate remanded the case, awarding O’Donnell $7,493.06 in Equal Access to Justice Act (EAJA), 28 U.S.C. 2412(b), fees, paid to Horn. On remand, an ALJ found that O’Donnell was disabled. SSA determined that she was eligible for benefits dating back several months and withheld 25% of O’Donnell’s past-due benefits, $14,515.37, for possible future payment of fees under 42 U.S.C. 406(a), which authorizes SSA to award a “reasonable fee” to persons who successfully represent claimants in administrative proceedings.Horn filed an unopposed motion for authorization to collect $14,515.37 in section 406(b) fees; having already received the $7,493.06 EAJA award, Horn proposed to keep the EAJA fee, with SSA to pay the balance ($7,022.31), leaving $7,493.06 with SSA for future payment of section 406(a) fees. The magistrate’s order stated that Horn was awarded $14,515.37 under section 406(b), payable by the SSA from the past-due benefits and that “Horn will refund" to O'Donnell $7,493.06, equal to the EAJA award, so that Horn would have to look to O’Donnell, not SSA, to satisfy any future section 406(a) fees. An ALJ subsequently awarded Horn $4,925.21 under section 406(a); he had to seek that amount from O’Donnell. The Seventh Circuit affirmed. No statute requires that the court order netting; the Savings Provision contemplates a refund by the attorney. View "O'Donnell v. Saul" on Justia Law