Articles Posted in Federal Court Procedure

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Bank of America (“Bank”) lost about $34 million when Knight Industries went bankrupt. In the Bank’s lawsuit under federal diversity jurisdiction, it was alleged that Knight’s directors and managers looted the company and that its accountants neglected to detect the fraud. The parties had agreed that Illinois law applied. The district court dismissed all of the Bank’s claims on the pleadings on a motion. 

The accounting firm, Frost, Ruttenberg & Rothblatt, P.C. were Knight’s accountants.The accountants sought to invoke the protection of Illinois law under 225 ILCS 450/30.1, which provides that an accountant is liable only if the accountant himself/herself committed fraud or “was aware that a primary intent of the client was for the professional services to benefit or influence the particular person bringing the action.”  The district court here concluded that the bank’s complaint did not allege plausibly that the accounts knew that Knight’s “primary intent” was to benefit the bank. 

The lawsuit alleged that the accountants knew that Knight furnished copies of the financial statements to its lenders, including the Bank. But the district court judge observed that auditors always know that clients send statements to lenders (existing or prospective). The statute would be ineffectual if knowledge that clients show financial statements to third parties were enough to demonstrate that the client’s “primary intent” was to benefit a particular lender.

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Peggy LeGrande, who worked as a flight attendant for Southwest Airlines, was injured when the plane she working in encountered severe turbulence. She brought a lawsuit against the United States under the Federal Tort Claims Act (FTCA), 28 U.S.C. §2674, claiming that the air traffic controllers employed by the Federal Aviation Administration (FAA) were negligent when they chose not to warn the flight’s captain that turbulence had been forecasted for the plane’s flight path.

At the federal district court level, the judge ruled that FAA employees did not breach any duty owed to Ms. LeGrande and granted summary judgment to the United States. On appeal to the Seventh Circuit Court of Appeals, the plaintiff sought reversal of the district court’s judgment.

On appeal and for the first time, Ms. LeGrande raised the issue that her injuries came from the negligence of a National Weather Service (NWS) meteorologist. Because the FAA breached no duty owed to Ms. LeGrande and because she failed to give NWS the written notice that the FTCA statute requires, the Court of Appeals affirmed the judgment of the district court.

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The Seventh Circuit Court of Appeals has found in favor of a truck driver, Billy Couch, employed by B&B Trucking, a U.S. Postal Service contractor that sued the government under the Federal Tort Claims Act (FTCA) for injuries he suffered. The court considered whether the postal service was immune under the Illinois Workers’ Compensation Act as a “borrowing employer.”

However, since this case was a federal matter, the federal courts have applied an alternate definition of “loaning employer.” Belluomini v. United States, 64 F.3d 299 (7th Cir. 1995), and Luna v. United States, 454 F.3d 631 (7th Cir. 2006).

In this case, Couch’s employer was a contractor engaged by the U.S. Postal Service, hauling mail to postal facilities. Couch was delivering a truckload of mail to an Elk Grove Village, Ill., facility. A federal employee allegedly ran over Couch’s foot with a forklift and injuring him. Couch died two years later from lingering complications stemming from that injury.

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Kurt Henriksen was driving westbound on Eagle Lake Road in Peotone, Ill., when a postal worker was driving northbound on 104th Street and pulled out from a stop sign directly in front of his vehicle. Henriksen had the right of way; a high-impact collision occurred involving the two cars.

The rural route postal carrier was delivering mail in her own car. Before the crash, Henriksen, 53, had a long history of low back and leg pain following a low back fusion. He had been treating with a pain management physician for over 12 years and managed his pain with medicine.

Following this crash, Henriksen developed increased back pain, increased left leg pain and pain radiating into his right leg and foot.

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Renardo Lynch was working as a mechanic for Metra when the top rail of a chain-link fence he was installing fell on him. He injured the back of his neck and shoulders. In a lawsuit that was filed under the Federal Employers’ Liability Act, 45 U.S.C. 51, (FELA), the lower court granted a summary judgment motion brought by Metra. Lynch took this appeal to the 7th Circuit Court of Appeals in Chicago.

Lynch was hired by Metra in 1987 in the track department but was moved to bridges and building where he held a number of different positions. When Lynch was injured, he was working as a bridge and building mechanic. Part of that job was installing fences at railroad crossings and depots. Although Metra did provide some training regarding these duties, no training was given to Lynch in installing fencing.

The installation of fences was a routine job done several times per month. When Lynch was injured, he was being assisted by a co-worker installing the mesh part of the fence; they were on their knees next to each other tightening brackets at the bottom of the fence post. The top rail of the fence fell, hitting Lynch across the back of his neck and shoulders. Lynch missed 28-30 days of work. Metra acknowledged that there was nothing Lynch or his co-workers did to cause the pole to fall.

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In all negligence cases, duty is an element that must be proved to a preponderance of the evidence by the plaintiff. In Choate v. Indiana Harbor Belt Railroad Co., the Illinois Supreme Court ruled that freight trains pose an obvious risk of harm to child trespassers, but the railroad would owe no duty of care to children for injuries suffered while trying to climb onto a moving train car. Furthermore, the Supreme Court found that whether there is such a duty under those facts exists as a matter of law for a judge to decide, not the jury, the fact-finder.

The Supreme Court’s unanimous decision reversed the trial court’s holding that the 12-year-old boy who had finished sixth grade, should have been smart enough to know the risks of trying to climb aboard a moving freight train. Even though the boy fell trying to board the moving train severing his foot above the toes, the Supreme Court determined that the railroad did not owe a duty of care to the child as a matter of law.

The Supreme Court raised the Second Restatement of Torts and case law going back as far as 1897. In citing these older decisions, the Supreme Court stated that, “[o]ur appellate court held long ago that it was not the duty of a railroad to keep watch and warn boys not to jump onto its cars because jumping from the ground upon a moving freight train is dangerous, and all men and ordinarily intelligent boys know it to be so.”

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A federal district court judge in Illinois has ruled that an expert’s testimony cannot be barred in the case of a truck driver who became ill while transporting chemicals.

The case stemmed from a suit filed by S.N. against the Valspar Corp. and one of its subsidiary companies. S.N. claimed that he became ill because of exposure to fumes from a defective drum of Dynaprime. He was transporting the chemical from Illinois to California.

The lawsuit claimed that toxic vapors were responsible for the death of S.N.’s dog, Boomer.

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A recent appellate court decision involving claims of violations by Chicago police officers has received a lot of media attention because of the severe nature of the resulting injuries suffered by the plaintiff. While the Chicago Police Department claimed that its officers had qualified immunity and could not be held responsible for the harm done to Christina Eilman, the Illinois Appellate Court disagreed. Paine v. Cason, 2012 U.S. App. LEXIS 8450 (7th Cir. Ill. Apr. 26, 2012).

Paine was brought by the mother of 21 year-old Christina Eilman against the City of Chicago and its police officers regarding the May 2006 arrest of Ellman. Officers were called to respond to a disturbance caused by Ellman as she attempted to board a plane at Chicago’s Midway Airport. Ellman was suffering from mental illness, but had not been taking her medications; as a result she was exhibiting disruptive behavior and needed to be escorted from the airport.

Police initially took Ellman to the 8th District Station, located on 63rd St., but then transferred her to the 2nd District Station, a woman-specific holding facility located on South Wentworth Ave. While at the 2nd District, Ellman was both maniac and calm, exhibiting behaviors typical of her diagnosed bipolar disorder. Despite her obvious mental illness, she was not given any medical treatment or a psychiatric evaluation. Instead, she was released two days after her initial arrest, still in an unstable mental condition.

The accusations in the complaint focus both on the lack of medical care offered while Ellman was in custody and on the manner of her release. Instead of returning Ellman to Midway Airport, or a similarly safe area, she was released directly from the 2nd District Station, which is located near the Robert Taylor Homes, a Chicago public housing project with an extremely high crime rate. In addition, Ellman was released without her cell phone, was scantily clad in short shorts and a bare midriff shirt, and was not in a mental condition that allowed her to appreciate the danger of her situation. Consequently, Ellman wandered into a vacant apartment with several young men, where she was raped at knife point. She then either jumped or was pushed out of a 7-story window, resulting in severe brain damage and other injuries.

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Earlier this year, online communities banded together to help shut down the Stop Online Privacy Act (SOPA), which sought to increase the government’s ability to fight online sharing of copyrighted intellectual property. Internet companies like Google, Wikipedia, and Craigslist opposed the bill on the basis that it could hold them responsible for any illegal sharing by its users. The Seventh Circuit Court of Appeals is set to consider a copyright infringement lawsuit that could have similar repercussions for internet companies, Flava Works, Inc. v. Marques R. Gunter d/b/a myVidster.com, No. 11-3190.

The plaintiff company, Flava Works, Inc., produces adult videos and claims that the defendant company has violated copyright laws by allowing its online users to upload and share material copyrighted by Flava Works. myVidster.com holds itself out to be a “social media bookmarking and backup service that lets you collect, share and search your videos.”
The basis of Flava Works’s claims was that myVidster.com’s business model was “largely dedicated to the repeated and exploitative unauthorized distribution and reproduction” of media, including videos owned by Flava Works. By providing users with a means of uploading, storing, and sharing copyrighted material that myVidsters.com had caused the plaintiff “irreparable harm.” Flava Works chief executive officer stated that by allowing users to post and share its videos with friends, “[myVidster.com] is sharing content that is copyrighted by Flava Works and promoting it.”
The case was filed in the U.S. District Court for the Northern District of Illinois, where Judge John F. Grady ruled that Flava Works’ claim for copyright warranted a preliminary injunction. It is this ruling that is being reviewed the the Seventh Circuit Court of Appeals. If the circuit court agrees with Judge Grady’s ruling, it could drastically change the rules for online sharing.

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While not every civil lawsuit requires a party to hire an expert, there are some instances where an expert’s opinion and testimony are vital to the case’s outcome. For example, if a plaintiff is making medical malpractice claims against a doctor or hospital, he or she will likely hire a medical expert to help support those claims. Likewise, in a product liability lawsuit, a party would generally need to hire some sort of expert to help prove that there was in fact a design or manufacturing defect. The vital nature of these experts’ testimony means that if for some reason those experts’ opinions are barred, the plaintiff will have an extremely difficult time proving the defendant’s negligence.

This is exactly what happened in the product liability lawsuit of Raymond Bielskis v. Louisville Ladder, Inc., No. 10-1194 (November 18, 2011). Bielskis filed a lawsuit against Louisville Ladder in which he claimed that its scaffolding design was defective and caused his work injury. In order to prove his claims, Bielskis’s attorneys had hired an engineering expert. After the trial court barred the engineering expert’s testimony, Bielskis filed an appeal in which he asked the court to reinstate his expert’s testimony.

Bielskis arose out of a fall Bielskis had while using a scaffold constructed by Louisville Ladder. Bielskis had originally purchased the scaffold in 1997 while working as an acoustical ceiling carpenter for R.G. Construction. During that time, Bielskis was responsible for providing the equipment and scaffolding for most of his jobs. However, in 2001, Bielskis began working for International Decorators, who generally supplied its workers with scaffolding equipment. As a result, Bielskis rarely used his Louisville Ladder scaffold after switching employers in 2001.

Then in 2005, Bielskis decided to use his Louisville Ladder scaffold on a job. Bielskis inspected the scaffold’s condition before using it; however, not noting any problems, Bielskis determined it was safe to use. But when he placed his weight onto one of the scaffold’s caster stems, the scaffold broke and collapsed. Bielskis fell and injured himself; that scaffolding injury is the subject of the current lawsuit.

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