Latest 6 Cases: United States v. Khan (Banking), Democratic Party of Wisconsin v. Vos (Civil Procedure), Fayemi v. Roberson (Civil Rights)

The Future of Faithless Electors and the National Popular Vote Compact: Part Two in a Two-Part Series

VIKRAM DAVID AMAR

In this second of a two-part series of columns about the U.S. Supreme Court’s recent decision in the “faithless elector cases, Illinois Law dean and professor Vikram David Amar describes some good news that we may glean from those cases. Specifically, Amar points out that states have many ways of reducing elector faithlessness, and he lists three ways in which the Court’s decision paves the way for advances in the National Popular Vote (NPV) Interstate Compact movement.

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Impoverishing Women: Supreme Court Upholds Trump Administration’s Religious and Moral Exemptions to Contraceptive Mandate

JOANNA L. GROSSMAN

SMU Dedman School of Law professor Joanna L. Grossman comments on the U.S. Supreme Court’s recent decision upholding the Trump administration’s religious and moral exemptions to the contraceptive mandate of the Affordable Care Act (ACA). Grossman provides a brief history of the conflict over the growing politicization of contraception in the United States and argues that the exemptions at issue in this case should never have been promulgated in the first place because they have no support in science or public policy.

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United States v. Khan

Dockets: 19-1745, 19-1734

Opinion Date: July 16, 2020

Judge: ROVNER

Areas of Law: Banking, Criminal Law, White Collar Crime

In 2006-2009,, Ghuman and Khan “flipped” 44 gas stations. Ghuman would recruit a buyer before they purchased the station. The buyers lacked the financial wherewithal to qualify loans. Ghuman and Khan's co-defendant, AEB loan officer Brahmbhatt, arranged loans based on fraudulent documentation. They also created false financial statements for the gas stations. Co-defendant Mehta, an accountant, prepared fictitious tax returns. The loans, which were guaranteed by the Small Business Administration, went into arrears. In 2008-2009 the SBA began auditing the AEB loans; the FBI began looking into suspected bank fraud. AEB ultimately incurred a loss in excess of $14 million. Khan cooperated and pled guilty to one count of bank fraud, 18 U.S.C. 1344, in connection with a $331,000 loan. Ghuman pleaded guilty to another count of bank fraud in connection with a $744,000 loan and to one count of filing a false tax return, 26 U.S.C. 7206. The district court denied Ghuman credit for acceptance of responsibility and imposed a below-Guidelines prison term of 66 months. The court ordered Khan to serve a 36-month prison term and ordered Ghuman to pay $11.8 million and Khan to pay $10.8 million in restitution. The Seventh Circuit affirmed the sentences with an adjustment to Ghuman’s term of supervised release.

Democratic Party of Wisconsin v. Vos

Docket: 19-3138

Opinion Date: July 16, 2020

Judge: Diane Pamela Wood

Areas of Law: Civil Procedure, Constitutional Law, Election Law

In 2018, Democrats were elected as the governor and attorney general of Wisconsin, replacing Republicans. Immediately after the election, the Republican-controlled legislature enacted Act 369 and Act 370, which strip the incoming governor and attorney general of various powers and vest legislative committees that remained under Republican control with formerly-executive authority. The changes include prohibiting the governor from re-nominating potential appointees who have been rejected once by the legislature; giving the legislature authority to suspend an administrative rule multiple times; removing the governor’s ability to appoint the CEO of the Wisconsin Economic Development Corporation; adding legislative appointees to the Economic Development Corporation; requiring that the attorney general obtain legislative approval before withdrawing from a lawsuit filed by the state government or settling a lawsuit for injunctive relief; and granting the legislature unrestricted rights to intervene in litigation to defend the constitutionality or validity of state law. The Seventh Circuit affirmed the dismissal of a suit under 42 U.S.C. 1983 claiming violations of the First Amendment, the Equal Protection Clause, and the Guarantee Clause of Article IV, Section 4 of the United States Constitution. The plaintiffs have not pointed to any concrete harms they have suffered or will suffer because of the Acts and are not entitled to any remedy under the Constitution. Any judicial remedy for the alleged harms must come from the courts of Wisconsin.

Fayemi v. Roberson

Docket: 19-1241

Opinion Date: July 16, 2020

Judge: Frank Hoover Easterbrook

Areas of Law: Civil Rights, Constitutional Law, Criminal Law

While in a hospital, Mintner entered a coma and seemed on the brink of death. Her blood and urine contained vastly more thallium than the natural concentration. Her fiancé, Fayemi had been providing some of her food, including in the hospital. Seven of Minter’s friends who occasionally ate with her also suffered from thallium poisoning. Her dog died of thallium poisoning after it ate table scraps. Fayemi had purchased enough thallium sulfate to kill about 50 people. Fayemi told the supplier that he needed the substance for research but later asserted that he and Minter wanted it to kill mice, a forbidden use, and that Minter had been careless with the poison. Fayemi often ate at Minter’s house without showing any traces of thallium poisoning. Thallium was found in a salt shaker in Fayemi’s kitchen. Fayemi had threatened to kill Minter if she left him. The jury convicted Fayemi of attempting to murder Minter plus seven counts of aggravated battery. The convictions were affirmed on appeal; a state court rejected a collateral attack. The Seventh Circuit affirmed the denial of his habeas corpus petition. Fayemi claimed that his lawyer was ineffective by telling the jurors, in his opening statement, that Fayemi would testify that Minter asked Fayemi to get the thallium for her. After the judge decided that some of his prior convictions, plus evidence that he had annotated a book about poisoning people, could come in on cross-examination, counsel persuaded Fayemi not to testify. Fayemi waived that right in open court. The state’s appellate judges reasonably concluded that there was no possibility of prejudice.

Carpenters Pension Trust Fund for Northern California v. Allstate Corp.

Docket: 19-1830

Opinion Date: July 16, 2020

Judge: HAMILTON

Areas of Law: Class Action, Securities Law

In 2013, Allstate announced a new strategy in its auto insurance business: attracting more new customers by “softening” its underwriting standards. Allstate disclosed that new and potentially riskier customers might file more claims and that Allstate would monitor and adjust business practices accordingly. Two years later, Allstate’s stock price dropped by more than 10 percent, immediately after Allstate announced that the higher claims rates it had experienced for three quarters had been fueled at least in part by the company’s recent growth strategy and that the company was “tightening" its underwriting parameters. The plaintiffs claim that Allstate initially intentionally misled the market by falsely attributing the increases to other factors. The Seventh Circuit vacated the certification of a plaintiff class after reviewing recent Supreme Court decisions concerning the fraud-on-the-market presumption of reliance, which allows plaintiffs to avoid proving individual reliance upon fraudulent misrepresentations and omissions. The issues of materiality, loss causation, and transaction causation are left for the merits but the court must consider evidence on those issues in deciding class certification using the presumption, if the defense offers it to show the absence of transaction causation (price impact). The district court granted class certification after admitting, but without engaging with, defense evidence offered to defeat the presumption--an expert opinion that the alleged misrepresentations had no impact on the stock price. Class certification may be appropriate here, but the district court must decide at the class stage the price impact issue. The court directed modification of any class certification to limit the class to buyers of Allstate common stock rather than any other securities.

Delgado v. United States Department of Justice

Docket: 19-2239

Opinion Date: July 16, 2020

Judge: HAMILTON

Areas of Law: Government & Administrative Law, Labor & Employment Law

Delgado, an agent with the Bureau of Alcohol, Tobacco, Firearms, and Explosives, sought relief under the Whistleblower Protection Act, 5 U.S.C. 1214(q)(1)(A), 2302(b)(8), for retaliation he suffered after reporting his suspicions that another ATF agent may have committed perjury during a federal criminal trial. In 2018, the Seventh Circuit held that the Merit Systems Protection Board had acted arbitrarily in dismissing his administrative appeal under the Act and that Delgado had properly alleged “a protected disclosure” and had exhausted his administrative remedies so that the Board had jurisdiction to evaluate his claim. On remand, the Board, acting only through an Administrative Judge (since 2017 the Board has lacked a quorum), denied relief. The Seventh Circuit remanded, only with respect to the relief Delgado is entitled-to. The Administrative Judge “paid only lip-service” to its earlier decision, “ignoring critical holdings and reasoning.” Delgado proved that he made a disclosure that was protected under the Act and proved retaliation for his protected disclosure, which affected decisions to deny him several promotions. Noting that it had “already remanded, only to be met by obduracy,” and that the government had the opportunity to offer evidence to support its affirmative defense, which fails as a matter of law, the court held that Delgado is entitled at least to pay and benefits as if he had been promoted effective March 2014.

McCray v. Wilkie

Docket: 19-3145

Opinion Date: July 16, 2020

Judge: ROVNER

Areas of Law: Labor & Employment Law

McCray worked at the Milwaukee VA Vet Center as a readjustment counselor, 1997-2000. After earning a Master’s degree, he returned to the VA in 2004 as a Mental Health Case Manager. McCray had served in the Army for eight years in the 1980s and sustained multiple physical and mental injuries. In 2013, his VA disability rating was 100 percent. McCray also suffers from hypertension, arthritis, diabetes, sarcoidosis (in remission), and PTSD. McCray alleges that the VA failed to accommodate his disabilities and that he suffered disparate treatment as an African-American man. The van McCray used to transport VA clients allegedly lacked adequate legroom and was unsafe; the VA waited 11 months before replacing it. In 2013, McCray experienced difficulty concentrating at work, which he attributed to discrimination and retaliation by co‐workers after he filed EEOC charges. After returning from a leave of absence and experiencing panic attacks, his reassignment request was denied. McCray indicated that he could probably continue working in an office on a lower floor. That request was denied, although there were vacant offices lower in the building. The district court dismissed his suit under the Rehabilitation Act of 1973, 29 U.S.C. 701. The Seventh Circuit reversed in part. McCray’s complaint presents a plausible claim for relief based on the delay in accommodating his disability with respect to the van. On remand, McCray can further develop his office space claim. McCray waived his disparate treatment claims.