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Monday, September 13, 2004

Indiana Decisions - 7th Circuit posts five today

DFS Secured Healthca v. Caregivers Great Lakes, Inc. (ND Ind., Chief Judge Miller)

Before CUDAHY, RIPPLE, and ROVNER, Circuit Judges.
CUDAHY, Circuit Judge. This appeal involves a state law claim under Indiana’s Uniform Fraudulent Transfer Act (IUFTA), Ind. Code §§ 32-18-2-1 et seq. It has long been argued by some that diversity jurisdiction should be limited or even abolished. The proponents of this view argue that the federal courts are overburdened, that they lack expertise in matters of state law and that in most cases, the concern of hometown bias originally driving the establishment of diversity jurisdiction represents no real threat to the parties. While we express no opinion as to whether diversity jurisdiction should be limited generally, we have little doubt that this case would have been better brought in an Indiana state court. This case raises numerous novel questions of Indiana state law, upon which federal courts can provide no more than conjecture as to how the Indiana Supreme Court would hold. The appellee, in oral argument, made it clear that it did not want us to certify any question to the Indiana Supreme Court because of the inevitable delay that would follow. However, it was the appellee that chose to file its complaint in federal court and it was that complaint which sought novel remedies, never previously awarded under Indiana law. R. at 36 (Cplt. ¶ 51). Therefore, although we are not fans of delay, it is with limited sympathy that ultimately we must certify several of the questions raised in this appeal to the Indiana Supreme Court. See Stephan v. Rocky Mountain Chocolate Factory, Inc., 129 F.3d 414, 418 (7th Cir. 1997). * * *

[p. 29] In conclusion, we certify the following three questions to
the Indiana Supreme Court:

(1) Can an officer or director of a “first transferee” under the IUFTA who is found to have personally participated in the fraud be held personally liable under Indiana law on that basis alone?
(2) Is an award of monetary damages under the IUFTA available only where reconveyance of the fraudulently transferred property is impossible or where the subject property has depreciated in value?
(3) Are punitive damages available under the IUFTA?
We invite, of course, the Justices of the Indiana Supreme Court to reformulate our questions if they feel that course is appropriate. We do not intend anything in this certification, including our statement of the questions, to limit the scope of their inquiry. Further proceedings in this court are stayed while the Indiana Supreme Court considers this certification.
USA v. Schaefer, Ronald T. (SD Ind., Judge Barker)
Before CUDAHY, POSNER and KANNE, Circuit Judges.
CUDAHY, Circuit Judge. * * * In the wake of the Supreme Court’s
decision in Blakely v. Washington, 124 S.Ct. 2531 (2004) and our application of its principles to the federal sentencing guidelines in United States v. Booker, 375 F.3d 508 (7th Cir. 2004), cert. granted 2004 WL 1713654 (U.S. Aug. 2, 2004), Schaefer filed a supplemental brief arguing that resentencing is required because in calculating his sentence, the district court relied on facts not found by a jury.

These days it should come as no surprise that our discussion commences with the Supreme Court’s recent decision in Blakely and our reading of Blakely in Booker. As we recently observed, “the constitutional validity of the Guidelines is in doubt.” United States v. Shearer, 2004 WL 1795085, at *3 (7th Cir. August 12, 2004). We continued:

Under Blakely as interpreted in Booker, a defendant has the right to have a jury decide factual issues that will increase the defendant’s sentence. As Booker holds, the Guidelines’ contrary assertion that a district judge may make such factual determinations based upon the preponderance of the evidence runs afoul of the Sixth Amendment.
Id. In accordance with both Booker and Shearer, we must remand the present case to the district court for resentencing.

Although Blakely and Booker necessitate our remand of this case to the district court for resentencing, we will nonetheless address Schaefer’s arguments under the Guidelines relating to the loss calculations and upward departures employed by the district court. We do so in the interest of judicial economy in the event that the Supreme Court may subsequently decide some other fate for the federal Guidelines than that indicated in Booker. * * *

In light of Blakely and Booker, this case is remanded for resentencing. However, in the event that the Supreme Court decides that Blakely does not invalidate the federal sentencing Guidelines, we affirm Judge Barker’s loss calculation of $81,801 and two of Judge Barker’s three onelevel upward departures, and we reverse with respect to the third one-level upward departure for unrealized appreciation. Since the Guidelines level Judge Barker arrived at was 21, whereas Judge Dillin’s was 20, this would place Schaefer in the same sentencing range as Judge Dillin employed. Since we believe that Judge Barker would likely reimpose Schaefer’s sentence of 37 months for the same reason she (and Judge Dillin) have previously imposed that sentence, a remand for resentencing in light of the lower applicable Guidelines range is unnecessary. Cf. United States v. Emezuo, 357 F.3d 703, 710-11 (7th Cir. 2003); United States v. Wallace, 32 F.3d 1171, 1174-75 (7th Cir. 1994).* REVERSED and REMANDED for resentencing.
_____
*Schaefer has also requested immediate release under bond from incarceration, since he has already served what would presumably be his sentence if the Guidelines are invalid. Based on the present state of the law in this circuit, this seems to be a meritorious request, but we leave this decision to the district court on remand. In this regard, the district court might wish to take note of Schaefer’s earlier positions in this case with respect to unchallenged aspects of his sentence. See Booker, 375 F.3d at 510 (interpreting Blakely to allow sentences to be imposed based on “what the jury found or the defendant admitted or, as here, did not contest”) (emphasis added).


Utility Audit Inc v. Horace Mann Service (CD Ill.)
Before FLAUM, Chief Judge, and RIPPLE and ROVNER, Circuit Judges.
ROVNER, Circuit Judge. Horace Mann Service Corporation wanted to save money on its telephone bills. To that end, it hired Utility Audit, Inc. in January 2000 to review past bills for possible overbilling and to recommend ways of saving money in the future. In exchange, Horace Mann agreed to pay to Utility Audit a percentage of any savings realized. But Horace Mann refused to pay Utility Audit any part of the $1.2 million it stood to save after switching long-distance carriers, a move Utility Audit takes credit for recommending. Utility Audit sued, but the district court granted summary judgment to Horace Mann, concluding that under the terms of the parties’ contract, Utility Audit was not entitled to any of the savings that resulted from the switch in carriers. The court also denied Utility Audit’s attempt to amend its complaint to add a claim of unjust enrichment. We affirm.
Carter, Kevin C. v. Tennant Company (ND Ill.)
Before EASTERBROOK, DIANE P. WOOD, and WILLIAMS, Circuit Judges.
DIANE P. WOOD, Circuit Judge. As Kevin Carter discovered in this case, it rarely pays to lie. In applying for a position with Tennant Company, Carter completed a “Health History Questionnaire” that inquired about his prior workrelated injuries and medical care. Carter failed to report a back injury from an earlier job, an omission that Tennant discovered when Carter filed for workers’ compensation benefits after “re-aggravating” the injury while working for Tennant. Shortly thereafter, Tennant dismissed Carter. Carter sued, alleging both that Tennant had discharged him in retaliation for making his workers’ compensation claims and that Tennant’s health history questionnaire violated Illinois’s Right to Privacy in the Workplace Act (Privacy Act), 820 ILCS 55/1 et seq. The district court granted summary judgment for Tennant with respect to both of Carter’s claims. We affirm.
Midway Airlines v. Monarch Air Service (ND Ill.)
Before CUDAHY, COFFEY and ROVNER, Circuit Judges.
CUDAHY, Circuit Judge. Unfortunately lacking a crystal ball, in August 1990, defendant Monarch Air Service, Inc. (Monarch) entered into an agreement with Midway Airlines, Inc. (Midway) to provide fueling services for Midway’s aircraft. These services included, among other things, the management of Midway’s fuel storage tank farm. * * *

[This is a bankruptcy case that concludes:] We are, frankly, somewhat baffled by Monarch’s pursuit of this appeal, given the high costs of litigation and the relatively small amount in dispute. But although we cannot explain Monarch’s litigation strategy, we can express a hope that the resolution of this claim will bring Midway Airlines one step closer to terminating its long-standing bankruptcy estate. For the reasons stated above, the district court is AFFIRMED.

Posted by Marcia Oddi on September 13, 2004 01:57 PM
Posted to Indiana Decisions