Valpo Law Blog

Analysis of current legal issues and cases in the Seventh Circuit Court of Appeals

Legal Malpractice and Violations of Professional Rules Now Have Significant Bankruptcy Consequences

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Azariah Jelks
Juris Doctor Candidate, 2016
Valparaiso University Law

Lawyers will now have more reasons to avoid committing malpractice. In Estate of Cora v. Jahrling, the Seventh Circuit held that a lawyer filing for bankruptcy could not discharge a malpractice judgment if it constituted defalcation while acting in a fiduciary role.

Illinois attorney John Jahrling represented ninety-year-old Stanley Cora in a real estate transaction to sell his home. Unfortunately, Mr. Cora only spoke polish, and Jahrling was unable to communicate with his client. However, the opposing attorney was conversant in Polish so Jahrling relied on him to translate and communicate with his client.

The transaction ended in a windfall for the adverse parties, with Mr. Cora agreeing to sell his home for a mere $35,000. The home was actually valued at $106,000 and the buyers eventually resold the home for $145,000. Mr. Cora also believed one term of the transaction gave him a life estate that would allow him to live in the upstairs apartment of the house free of charge. This agreement was lost in translation either intentionally or accidentally, and it was not included in the sale contract.

Mr. Cora sued in state court for malpractice, but passed away before the suit could take place. His estate then continued the lawsuit on his behalf. The estate eventually received a malpractice award of $26,000 plus costs.

Jahrling later filed for Chapter 7 bankruptcy, and Mr. Cora’s estate argued that the judgment was not dischargeable in bankruptcy under 11 U.S.C. 523(a)(4), which prohibits discharging debts obtained “for fraud or defalcation while acting in a fiduciary capacity”. The bankruptcy court found in favor of Mr. Cora’s estate, holding that his conduct not only amounted to a defalcation of a fiduciary duty, but that he clearly disregarded a risk that he would violate this duty by relying on an adverse party to meet his client’s interests.

“Defalcation” is an abstruse term that courts have been struggling to define. The Seventh Circuit noted that it is, “a word only lawyers and judges could love”. But generally, it refers to the misappropriation of money when someone breaches a fiduciary duty.

The Seventh Circuit applied Supreme Court precedent Bullock v. Bank Champaign, which held that debts occurring from defalcation while acting in fiduciary manner are not dischargeable. Bullock also established the state of mind required to show whether defalcation occurred. Under Bullock, defalcation requires gross recklessness or knowledge of the improper nature of the fiduciary behavior.

The Seventh Circuit affirmed the bankruptcy court’s analysis under Bullock that Jahrling’s violation of the professional rules of conductwas circumstantial evidence that he acted with gross recklessness. The fact that Jahrling made no effort to communicate with Mr. Cora except through adverse counsel despite the obvious risks associated with this conduct was also sufficient circumstantial evidence of his recklessness.

Committing malpractice and violating rules of professional responsibility have now become even more significant through this ruling. Unlike with legal malpractice cases, violations of professional responsibility are not proof of legal breaches of duty. Nonetheless, both violations have been held to be permissible circumstantial evidence of recklessness that ultimately may leave bankrupt lawyers on the hook for non-dischargeable judgments.

Even a Simple Contractual Mistake Can Lead to a Disastrous Outcome for Businesses

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Elias Awaad
Juris Doctor Candidate, 2016
Valparaiso University Law

It is not uncommon for a business to rely on one manufacturer to provide them with a majority or a certain amount of one product to resell to the public. Often, these businesses and manufacturers enter into contracts with one another, but sometimes one party does not truly understand what they agreed to. As illustrated in BRC Rubber & Plastics Inc. v. Continental Carbon Company, a mistaken belief in a contract can have a potentially devastating impact on all parties involved.

BRC Rubber & Plastics Inc. entered into a contract with Continental Carbon Company for Continental to supply BRC with carbon black. Continental was unable to complete orders for BRC in April 2011 based on high demand for carbon black and refused to fill additional orders by BRC. BRC subsequently filed suit, alleging breach of contract. Continental was under the belief that as long as they shipped approximately 1.8 million pounds to BRC annually, as the contract provided, they did not have to accept and fill each and every order from BRC. BRC, on the other hand, believed that Continental had to fill every order. BRC’s belief was based on its view that the parties’ agreement was a requirements contract, where a purchaser agrees to buy all of its needs of a specified material exclusively from a particular supplier, and the supplier agrees, in turn, to fill all of the purchaser’s needs during the period of the contract. Because the parties’ agreement is governed by Indiana law, an unambiguous contract is interpreted by giving the terms their ordinary meanings while reading the contract as a whole, with the ultimate goal of determining the parties’ intent.

The District Court agreed with BRC that the companies had a requirements contract, reasoning that Continental’s refusal to confirm and ship some orders was a breach and repudiation of the agreement. BRC was awarded nearly $1 million in damages. However, the 7th Circuit Court of Appeals vacated the judgment, holding the lower court erred in ruling in favor of BRC after finding the agreement between the companies was a requirements contract.

Although the parties’ agreement did provide that BRC would purchase a specific amount of carbon black from Continental each year, according to the 7th Circuit Court of Appeals, the parties’ agreement did not qualify as a requirements contract. To constitute a requirements contract, BRC would not only have had to be obligated to buy some amount of carbon black from Continental but also be prohibited from buying carbon black from any other seller. Judge Williams, in vacating the judgment, stated, “In our view, neither condition is met, so we hold that the parties’ agreement was not a requirements contract.” This case has been remanded back to the District Court, who will need to make a decision that isn’t premised on the agreement being a requirements contract.

Based in the foundations of American law, we are free to contract with one another; however, as evidenced by BRC Rubber & Plastics Inc. v. Continental Carbon Company, the 7th Circuit reminds us that it is imperative that we fully understand any contract before agreeing to it and that we must contract within the law.

Seventh Circuit’s Decision Discourages the Code of Silence

By: Duke Truong
J.D. Candidate, 2017
Valparaiso University School of Law

Who can serve as witnesses in police brutality cases? On January 28, 2016, the Seventh Circuit Court of Appeals provided an answer with its decision in United States v. Smith, Nos. 14-3744, 14-3721.

In September 2012, Putnam County Officer Terry Joe Smith punched a handcuffed Cletis Warren in the face. The ambulance took Warren to the hospital to stop the profuse bleeding. Fellow officers at the scene heard Smith say, “I guarantee I broke that mother fucker’s nose.”

Several months later, Smith arrested Jeffrey Land for domestic violence. After Smith handcuffed Land, he lifted Land in the air, dropped him, and drove his knee into Land’s sternum, causing Land to defecate on himself. Smith bragged about the incident to a fellow officer and took pride that it was not the first time.

These two incidents of police brutality are but a small sample of the ills of police misconduct plaguing our society.

A jury found that Smith violated 18 U.S.C. § 242 by subjecting Warren and Land to the intentional use of unreasonable and excessive force in violation of their constitutional rights. Smith was sentenced to 14 months in prison and two years of supervised release.

Both Smith and the government appealed to the Seventh Circuit: Smith appealed his conviction, and the government appealed the lenient sentencing. The panel ruled for the government, upholding the conviction and requiring the district judge to resentence Smith based on the guidelines.

Officers who witnessed Smith’s assaults testified that his use of force was unjustified because neither Warren nor Land were resisting. In the court’s words, the officers testified to Smith’s “violent, gratuitous, and sadistic batteries of Warren and Land.”

Smith’s lawyer objected to the officer’s testimony by asserting that they were unqualified expert witnesses under Federal Rule of Evidence 702. Writing for the panel, Judge Posner upheld the trial court’s rejection of that objection under Rule 701. Under Rule 701, a non-expert witness can give an opinion based on the witness’s perception to help determine the fact in issue that isn’t based on scientific, technical, or specialized knowledge.

Police use of excessive force has been nothing short of controversial. In a 2010 annual report by the Cato Institute, excessive force complaints made up 56.9 percent of cases that involved the physical use of force by peace officers. On July 17, 2014, a plainclothes police officer applied a chokehold to Eric Garner while a swarm of officers tried to pin him to the ground. Garner gasped for air and uttered his final words, “I can’t breathe.” Mr. Garner’s death serves as a prime example of excessive force and many Americans’ worst fears when they have face-to-face contact with the police.

With this decision, the Seventh Circuit discourages the code of silence that exists within the police community. The officers stood up despite the misconception that they were turning their backs on one of their own.

Obstacles to Age Discrimination Claims

Ashley Merritt
J.D. Candidate, 2017
Valparaiso University School of Law

Age discrimination involves the unfair treatment of an employee because of his or her age. By law, it is illegal for employers to discriminate on the basis of age in during decisions about hiring, firing, layoffs, benefits, promotions, and other conditions of employment. However, it can sometimes be very difficult to determine whether an individual was fired as a result of age discrimination. This was the case when principal Lionel Bordelon’s long-running contract was not renewed in 2011.

Bordelon began his career as principal of Chicago’s Kozminiski Community Academy in 1993. Although the Board of Education of the City of Chicago supervises schools in the Chicago school system, the Local School Council is responsible for hiring, evaluating, and renewing contracts for principals in the locality. The Board also employs a Chief Area Officer to supervise principals assigned to his or her certain area.

In the fall of 2009, the Board hired Judith Coates to serve as the Chief Area Officer for Area 15, becoming Bordelon’s supervisor. When she began her job, Coates was handed down a list of “principals to be disciplined” from her predecessor and Bordelon was on this list. In 2010, another principal in the area who was fired by the Board testified that she “just felt that the Board wanted someone younger and brighter.”

A few months later, Coates sent Bordelon a notice of pre-discipline hearing based on several allegations, including failing to respond to a parent issue, failing to schedule a meeting with a parent, and failing to respond to Coates’s email regarding these matters.

After evaluating Bordelon and meeting with the Council, Coates sent another letter to Bordelon in December 2010 reassigning him to home with full pay pending the outcome of an investigation of his alleged misconduct, including: (1) improperly replacing asbestos-containing tile at the school; (2) purchasing irregularities; and (3) tampering with school computers in a way that prevented access to school records by the Board. The general counsel for the Board also said that he was prepared to dismiss Bordelon depending on the results of the investigation.

In January 2011, the Council voted not to renew Bordelon’s employment contract based on several reasons, such as Bordelon’s failure to provide adequate principal reports, low evaluation scores, not satisfying the requirements for a safe and effective school, low test scores, and disciplinary problems.

On February 28, 2011, Bordelon submitted his official notice of retirement which became effective in June at the end of his non-renewed contract. Nine months later, he filed suit against the Board, claiming discrimination on the basis of age. He was 63 years old at the time.

The Age Discrimination in Employment Act (ADEA) prohibits employment discrimination against anyone who is 40 and older. 29 U.S.C. § 623. In order to prove discriminatory intent under the ADEA, the plaintiff can use either a direct method of proof or an indirect method of proof.

Because Bordelon chose to proceed under the direct method of proof, he had to provide admissible evidence of Coates’s discriminatory motivation based on age. The Seventh Circuit held that a key piece of Bordelon’s evidence was inadmissible due to the hearsay rule. Therefore, he did not meet his evidentiary burden and his motion for summary judgment was denied. The Court also reasoned that the Board had independent reasons for not renewing his contract, such as his disciplinary problems and low test scores at the school.

Even if Bordelon had presented enough evidence to prove a discriminatory intent based on age, there are still a number of difficulties associated with age discrimination claims. Although an employer can justify its policies or practices using a reasonable factor other than age, they may still have a disparate impact on older individuals. Take, for example, a school district that will not hire any with more than 10 years of experience. Although the school district can claim that hiring an employee with more than 10 years’ experience is costlier, this policy has a disparate impact on older workers.

At-will employment can also allow employers to get away with age discrimination. Essentially, at-will employment means that employers can terminate someone for any reason, such as age, or for no reason at all. Therefore, at-will employees may be discouraged from taking legal action when they feel their employer has discriminated against them due to their age.

Plaintiffs bringing an age discrimination claim may have higher obstacles to climb compared to their employers, even if they have a valid claim. Perhaps this means it’s time to reassess how our society perceives ageism in the workplace.

Too Close to the Sun

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Zach Melloy
Juris Doctor Candidate, 2016
Valparaiso University Law

In the airline industry, it’s not uncommon for an airline that sells international tickets to arrange for another airline to handle service over part of the route. But if that bridge airline experiences a substantial delay, who is responsible for the resulting damages to the passengers?

On February 4, 2016, the Seventh Circuit Court of Appeals consolidated two appeals dealing with this exact situation in Baumeister v. Deutsche Lufthansa, AG. Both cases dealt with the liability stemming from bridge carriers, and in both cases the plaintiffs’ appeals were denied.

In the first case, German plaintiff Baumeister had purchased a ticket from Lufthansa Airlines to fly from Stuttgart, Germany to San Francisco, California. He also had a connecting flight to Munich, Germany, operated by a now-defunct regional German airline called Augsburg Airways. The Ausburg flight was cancelled, however, and Lufthansa was forced to substitute transportation for the passengers.

Baumeister finally made it to San Francisco, but 17 hours later than expected. He then sued in the United States District Court for the Northern District of Illinois, claiming that under a certain European Union regulation, Lufthansa was contractually obligated for the damages arising from the flight’s delay.

Judge Richard Posner viewed the regulation (comically citing to Wikipedia), and determined that even if Baumeister could sue to enforce a foreign regulation in the United States, he had sued the wrong company. The European Regulation placed liability on the operating carrier whose flight was delayed or cancelled, which in this case was Augsburg, not Lufthansa. As a result, Baumeister had no claim against Lufthansa, and the Seventh Circuit affirmed the lower court’s grant of summary judgment.

The second case involved an American couple (the Varsamises) who purchased roundtrip tickets from Dallas, Texas to Venice, Italy, whose connecting flight in Rome was delayed. The company that sold the tickets was American Airlines, but the operating airline for the delayed flight was a Spanish airline named Iberia. The Varsamises eventually made it back to Dallas 21 hours later than expected, and sued Iberia in the United States District Court for the Northern District of Illinois.

The Varsamises claimed that Iberia had breached their contract by allowing the flight to be delayed, and as a result they were entitled to damages from that delay. However, as Judge Posner noted, the contract was between the Varsamises and American Airlines, not Iberia. As a result, the Varsamises had no reason or standing to sue Iberia for breach of contract. The Seventh Circuit then affirmed the lower court’s decision granting summary judgment.

These two cases demonstrated the difficulty of determining liability, especially when that liability is affected by foreign and international regulations. And in an ever-increasingly globalized society, cases involving airline liability will likely only get murkier, so it’s important to stay informed when your next flight may be delayed.

Who Protects the People When the Court Protects the Badge?

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Macey Albert
Juris Doctor Candidate, 2017
Valparaiso University Law

Remember the saying “you do the crime, you do the time”? But what if the sentence does not fit the crime? Judge Posner wrote the opinion for a three-judge panel that questioned the amount of time given for a crime committed in United States v. Smith .

Terry Joe Smith, a police office in Putnam County, Indiana was convicted and charged in federal court for violating 18 U.S.C. § 242 , which deprives a person of rights under color of law. Smith deprived two people of their constitutional rights not to be subject to intentional use of unreasonable and excessive force.

In September, Officer Smith along with other officers set out to arrest Cletis Warren whom an arrest warrants was outstanding. Before being arrested, Warren exited his vehicle and jumped into the bed of his truck. Several officers got him out from the bed of the truck and handed him down to officers on the ground. The officers gained control of Warren. Smith punched Warren, while he was handcuffed, in the face making a sound of a tomato hitting a concrete wall. Warren’s face immediately swelled and bled extensively and was carried off in an ambulance to hospital. Smith stated to another officer “I guarantee I broke that [vulgar language] nose and he deserved it”

This was not officer Smith’s only incident of using excessive force. Several months later the officers were summoned to a domestic dispute. Smith handcuffed the man involved, Jeffery Land, and escorted him to the car. Smith raised Land in the air with Land’s body horizontal to the ground dropped him, and drove his knee into Land’s sternum causing him to defecate. He later bragged about the event that happened.

Fed. R. Evid. 701 permitted the police officers to testify at trial. Officer Smith was convicted for violating Warrens and Lands rights. The court found that the amount of force used was unjustified because neither Warren nor Land resisted arrest. Smith was only given 14 months for both situations, which was less than half the bottom of the range. The Judge recognized that Smith used his official position to commit civil rights abuse, and there were no excuses for abusing people who were in handcuffs. The judge, however, gave smith a light sentence because the judge believed if Smith could control his anger, there was little risk of re-offense.

This is a perplexing case. In similar and less offensive cases, police officers received 27 to 208 months in prison. Yet this case questions the very standards of police officers when they wrongly use their status as a police officer. The court system gives people more time for brutality against dogs. Should a person with a police badge be treated differently for brutality against human beings? Police officers are like regular people and should be treated as such when they abuse their duty to apply force to criminals.

The Seventh Circuit ruled that imposing a sentence contingent on if officer Smith could control his anger the risk of reoffending would be slight, was no reason for a light sentence. A sentence that is dramatically far, or farther below the bottom of the range is not said to unreasonable, but the further down the judge goes the more important it is that he gives cogent reasons for rejecting the thinking of the Sentencing Commission. The judged imposed the standard conditions of supervised release without stating the conditions in the hearing was also an error. The entire sentence must have been given orally. The case was remanded for full resentencing. Did the Seventh Circuit go far enough or not?

Religious “Conviction”: A Prisoner’s Struggle to Practice His Faith Behind Bars

Ashley Merritt
J.D. Candidate, 2017
Valparaiso University School of Law

For the Muslim community, Ramadan is a month-long celebration filled with peace and patience. But in 2010, Michael Thompson’s Ramadan was anything but peaceful. Thompson sued prison officials at the Waupun Correctional Institution in Wisconsin for violating his First Amendment right to freely exercise his religion, and he recently won his appeal before the Seventh Circuit.

Each day during the month of Ramadan, Muslims do not eat or drink anything between sunrise and sunset. The prison normally accommodates this practice by providing Muslim prisoners with “meal bags”. Each Ramadan meal bag contains two meals: the post-sunset dinner and the next morning’s pre-sunrise breakfast. According to the prison’s policies, a prisoner who eats in the cafeteria during Ramadan forfeits his or her right to receive meal bags for the rest of the month.

On August 11, 2010 – the first day of Ramadan – Thompson began his month-long fast and received his meal bags on time for several weeks. However, on August 21, certain events interrupted their delivery. While on his way back to his cell early that day, Thompson was handed a meal bag from a prison guard. Upon arriving at his cell, Thompson found another meal bag waiting for him. Because Thompson could not leave his cell to return the extra bag, he left one of the bags unopened for a guard to retrieve. However, one prison guard claims to have seen Thompson eating from both meal bags. After accidentally receiving two meal bags in one day, Thompson did not receive a meal bag on August 21 or 22, even though he remained on the list of eligible inmates. In effect, he began to suffer from hunger pains, fatigue, and exhaustion, and thus felt pressured to eat at the cafeteria. However, he knew that if he did, he would give up his meal bag privileges. Sometime during these two days, Thompson also missed one of his morning prayers because he felt so ill. As a result of these events, he was not able to properly observe Ramadan.

Thompson filed a lawsuit under 42 U.S.C. § 1983 against the prison officials that he felt were responsible for violating his First Amendment rights. After A magistrate judge granted the defendants’ motion for summary judgment, and Thompson appealed.

Ultimately, the Seventh Circuit vacated the previous judgment and remanded the case back to the lower court to make factual determinations, such as the reason for withholding Thompson’s meal bags and whether or not he remained on the meal bag list. The Court also held that there was enough evidence from which a reasonable jury could rule in favor of Thompson.

In its analysis, the Court considered whether the denial of meal bags placed a substantial burden on Thompson’s free exercise rights. Essentially, the Court defined a “substantial burden” as one that “put[s] a substantial pressure on an adherent to modify his behavior and to violate his beliefs.” Using this definition, the Court held that Thompson’s free exercise rights were substantially burdened when he did not receive his meal bags because without them, he was forced to choose between foregoing adequate nutrition or violating a central pillar of his religion. In other words, forcing an inmate to choose between daily nutrition and religious practice is a substantial burden. Writing for the three-judge panel, Judge Rovner further reasoned that in addition to not receiving a meal for more than 55 hours, Thompson had no idea whether he would be put back on the Ramadan meal bag list and get regular food. This uncertainty contributed to the pressure on him to go to the cafeteria and left him so anxious that he was unable to practice Ramadan in its entirety.

How should society feel about the religious rights of inmates? From one point of view, many people believe that inmates have forfeited their rights when they are convicted of committing a crime. And some claim that allowing religious freedoms in prisons could open a can of worms where inmates use religious accommodation as an excuse for other, spurious requests. On the other hand, it can be argued that prisoners should be encouraged to practice their religious faith while incarcerated for its intrinsic value. Faith may provide them with a sense of purpose and could also help reintegrate prisoners who will eventually be released back into public communities. Certainly there are legitimate restrictions on the religious rights of prisoners, but as long as that practice does not compromise a prison’s security, inmates should be entitled to freely exercise their constitutional rights.

Online Gambling Lawsuit Flops Under the Illinois Loss Recovery Act

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Azariah Jelks
Juris Doctor Candidate, 2016
Valparaiso University Law

Gambling losers Casey Sonnenberg and Daniel Fahrner, continued their losing streak after the Seventh Circuit ruled they could not recoup their gambling losses from online gambling websites in Fahrner v. Tiltware, LLC. The two Illinois men each lost at least $50 on various online gambling sites including one operated by the defendant, Tiltware, LLC.

Gambling is a crime under Illinois law, but the state allows gamblers to recover their losses in a civil suit against the winner under the Illinois Loss Recovery Act (ILRA). The statute of limitations under the act is six months, but if parties do not file a timely lawsuit, third parties may bring a claim on their behalf. In this case, the mothers of the two men sued the website operator after Sonnenberg and Fahrner failed to sue within the statute of limitations period.

The trial court originally dismissed the suit in 2015, after the plaintiffs failed to specify exactly how much money was lost and who the winner of the money was. Naming the website operator as the winner proved to be an unsuccessful argument with the Seventh Circuit, as the court reasoned that operating the site and taking some of the money as a website maintenance fee was not enough for the defendant to be classified as a winner. The Court opined, “A winner would be a person whom a player had played with and lost to.”

The plaintiffs also attempted to convince the court to build a civil cause of action into the criminal statute that would targets operators of illegal gambling sites. However, the Seventh Circuit noted that the full range of criminal penalties available under the law suggested legislators likely did not intend for that type of action to exist. In addition, the court discussed the disastrous legal and economic consequences the civil remedy could have on the gambling industry by inviting a flood of lawsuits from gamblers.

According to the court, creating legal remedies for gambling losses is not a proper deterrent against gambling because gamblers are aware of the risk of losing at the outset. Judge Posner, the author of the opinion, made sure to wrap up his analysis in true Posner fashion by ending with a facetious quote in reference to gambling losers, “I’d rather have won, but $50 wasn’t too high a price to pay for a night of gambling, and en route to losing $50 I did after all win some nice pots and get compliments from the guys I was playing with.”

Several cases arising under the ILRA have been dismissed, partially for failing to name a specific winner or loser, as in Langone v. FanDuel, a case involving a fantasy sports website.  Other states also have similar versions of the Loss Recovery Act. Although Sonnenberg and Fahrner cannot seem to win in or outside the courtroom, this case is certainly a win for the gambling industry. The Seventh Circuit’s ruling effectively insulates gambling website owners and operators from liability under the ILRA, further protecting the industry from being sued into oblivion. It may also be precedent for the growing strain of fantasy sports ILRA cases in the jurisdiction, and influential case law in other states with Loss Recovery Acts.

Claims of Age-related Bias in the Workplace

By: Duke Truong
J.D. Candidate, 2017
Valparaiso University School of Law

According to the Bureau of Labor Statistics, 1 in 5 workers in the U.S. is age 55 or older and of those surveyed, 64 percent of workers have experienced age discrimination in the workplace. Age discrimination (29%) doubled the claims for sex discrimination (14%) and nearly tripled the claims for race discrimination (11%) from 2007 to 2008, an increase from 19,103 to 24,582 claims. On January 20, 2016, U.S. District Judge, John J. Tharp, Jr. issued a ruling in one such case, Victor v. Village of Hoffman Estates.

Like many towns during the great recession of 2008, the Village of Hoffman Estates felt the pangs of the economic downturn. Budget shortfalls and revenues falling below projected levels forced management to scale back employees’ hours. Barbara Victor worked full-time as the Human Resource (HR) Generalist with the Village. Worried about being laid off, Barbara became emotionally distressed and took a long medical leave of absence. Barbara never returned to work in HR, so the Village assigned another employee, D’Ann Granger – nine years younger than her – to take over her duties.

On June 12, 2009, Barbara filed a grievance, claiming that superiors harassed and retaliated against her. She alleged her superiors refused to meet with her as scheduled to inform her of her employment status. Barbara sued the Village in the U.S. District Court, N.D. of Illinois, Eastern Division for age discrimination and retaliation for having filed or made grievances. Defendant moved for summary judgment.

Judge Tharp granted summary judgment in favor of defendant. When there is no genuine issue of material fact from the admissible evidence, the moving party is entitled to summary judgment as a matter of law.

First, the Age Discrimination in Employment Act (ADEA) prohibits employers from discriminating against an individual based on age. Barbara claimed the Village reduced her hours because she was 57 years old. The court turned to a four-prong indirect method test to assess the validity of the claim. It requires the plaintiff to show that she: (1) is a member of a protected class; (2) who met her employer’s business expectations; but (3) suffered an adverse employment action; and (4) employees outside of the protected class (i.e., younger employees) were treated more favorably.

Judge Tharp pointed out that Barbara’s pay rate rose since she first got hired in 1998. She went from part-time to full-time in 2004 working 37.5 hours, and she eventually worked 40 hours when she became HR Generalist in 2007. Because Barbara failed to prove that her age, pay rate, or seniority was ever an issue, the court dismissed the age discrimination claim.

Secondly, Judge Tharp dismissed the retaliation claim under a three-prong direct method test. Barbara filed numerous internal grievances and met the first element of engaging in statutorily protected activity. The second element was not met because her claims consisted of generalities rather than specific instances. For example, she claimed her employer used “hostile treatment, less favorable evaluations, and non-selection for various positions.” Thus, she was unable to make a causal connection in order to meet the final element. Her failure to exhaust all administrative remedies with the Equal Employment Opportunity Commission (EEOC) to challenge unfair employment practices under Title VII also did not work in her favor.

If your employer has discriminated against you in Indiana, you may file a claim of age-related bias in the workplace with either the state administrative agency, the Indiana Civil Rights Commission, or the federal administrative agency, the EEOC. There is no place in this world for discrimination and there is no room in the workplace for age-related bias either.

 

Justice Is Never Free… In Regard to Attorney’s Fees

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By: Jeremy M. Schmidt
J.D. Candidate, 2017
Valparaiso University School of Law

Goesel v. Boley International (H.K.) Ltd., et al., is a very unfortunate case involving a minor child that suffered a life changing injury resulting from a negligently designed and produced toy robot. This case never made it to trial because the two parties settled the day before the trial was set to start.

Goesel, who was five years old at the time of the incident, was playing with a toy robot that was designed and produced by Boley International (Boley). The toy robot shattered which lead to pieces of the robot piercing Goesel’s right eye lens. This injury resulted in irreversible damage, and caused him great pain and suffering. Goesel’s parents hired the law firm of William, Bax & Saltzman to sue Boley for the damage they caused to their son.

This case came before the Seventh Circuit on appeal because of a disagreement between Goesel’s counsel and the presiding judge on how much the attorney’s fees would be. The parties settled on the amount of $687,500 to be paid to Goesel by Boley for the injury he sustained. Personal injury cases are, traditionally, taken on by attorneys on a contingency fee basis. This means that the attorney will only get paid if the plaintiff were to win the case. If the plaintiff were to lose the case, then the attorney will not get paid for the services provided. This is exactly the type of arrangement that was agreed upon in this case. The retainer agreement stipulated that if Goesel won the case then the firm would receive one-third (1/3) of the settlement, and all litigation expenses were to be paid by Goesel from the settlement. This type of retainer is common practice for firms that take on personal injury cases.

The seventh circuit decided that Goesel’s counsel was entitled to all of the attorney’s fees under the retainer agreement, which was reasonable, and that the trial judge was wrong in the ruling. The seventh circuit awarded the attorney’s fees saying that they were reasonable. The fees ended up being about 58% of the settlement leaving Goesel with only about 42% of the settlement. Opinions will be different on whether or not this amount was fair; however, the key principle to remember is that there is an expectation (and an obligation) for an attorney to work endless hours to get the best result for their clients. Therefore, they not be compensated reasonably and fairly.

 

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