A private investigator involved in a controversial investigation of a wrongful conviction, who was later alleged to have employed improper investigative techniques in a book and a documentary, sued several defendants for defamation and false light. The appellate panel reversed the trial court in part, finding that the investigator’s claims were not time-barred.

In 1982, Jerry HIllard and Marilyn Green were murdered in Washington Park in Chicago. Anthony Porter was convicted for the murders and was sentenced to the death penalty. Professor David Protess and other members of Northwestern University’s Innocence Project investigated the case and identified another suspect, Alstory Simon. At some point, members of the Innocence Project came to believe that Simon and not Porter had really committed the murders.

Paul Ciolino was employed as a private investigator and did work for the Innocence Project. Ciolino and another investigator traveled to Milwaukee to meet with Simon. Simon claims that Ciolino pretended to be a police officer from Illinois, and that Ciolino was armed with a handgun at the time of their meeting. Ciolino told Simon that the Innocence Project had sworn statements from Simon’s ex-wife, Inez Jackson, and from an eyewitness to the murders. Ciolino also showed Simon a video that the Innocence Project had made with a paid actor pretending to be the eyewitness. Simon also alleged that Ciolino persuaded him to confess to the murders by promising him that he would receive a sentence of only a few years in prison, and that he would receive money from book and movie deals because of the intense publicity of the case.

The Innocence Project eventually succeeded in freeing Porter from prison, using Simon’s videotaped confession as well as statements from Simon’s ex-wife and her nephew, Walter Jackson. The Cook County State’s Attorney then indicted Simon for the murders. Simon eventually pled guilty and was sentenced to 37 years in prison. Still, many people felt that Simon was not actually responsible for the murders and began investigations of their own to determine whether he was innocent of the crimes.

Inez Jackson and Walter Jackson eventually recanted their statements. The two explained they had implicated Simon in their statements based on promises from Protess. They alleged that Protess and his team had given them food, cash, alcohol, and other things of value to induce them to make statements. Northwestern University later conducted an internal investigation into the journalistic and investigative practices of the Innocence Project under Protess, and he was separated from the University as a result. The Cook County State’s Attorney then investigated Simon’s case and determined that, due to the misconduct on the parts of Protess and Ciolino, the conviction was so tainted that it could not stand. Simon was eventually released from prison after serving 15 years. Continue reading ›

Two small pharmacies sued a pharmacy benefits manager for antitrust violations, alleging that the benefits manager had conspired with Walgreens to drive the small pharmacies from the benefits manager’s network and therefore harm their business. The district court ruled in favor of the benefits manager. After appealing, the 7th Circuit found that the pharmacies had not alleged that either the benefits manager or Walgreens had monopoly power in the relevant markets as required under Section 2 of the Sherman Act, and it, therefore, affirmed the decision of the district court.

Prime Therapeutics LLC is a pharmacy benefits manager. Sharif Pharmacy, Inc. and J&S Community Pharmacy, Inc. were both members of the Prime pharmacy network. Under Medicare, Medicaid, and private health insurance plans, patients had significant financial incentives to buy their prescription drugs from pharmacies within the network. Prime eventually terminated both Sharif and J&S from the network after audits uncovered irregularities in invoicing for prescription drugs.

Both Sharif and J&S filed suits against Prime, alleging violations of the Sherman Antitrust Act. Three customers who had to temporarily move their prescriptions to less convenient pharmacies also joined the suits. Both Sharif and J&S alleged that Prime’s decision to audit their pharmacies was pretextual, in an effort to eject competing pharmacies from the network after Prime entered into a joint venture with Walgreens in 2016. Sharif and J&S noted that Prime sent letters to both pharmacies’ customers saying that Sharif and J&S would no longer accept their insurance and recommending that customers have their prescriptions filled at a nearby Walgreens. Prime also retained funds from both pharmacies as a result of the audits. The district courts both ruled in favor of Prime, and Sharif and J&S appealed. The 7th Circuit consolidated then consolidated the appeals. Continue reading ›

Two property owners got into a dispute regarding a roof that encroached onto a neighboring property. The roof was constructed after the prior owners of both properties agreed and entered into a revokable license. The trial court found that the roof was an encroachment and granted summary judgment for the plaintiffs. The appellate panel disagreed, finding that the encroachment was unintentional, and the cost of replacing the roof was great while the benefit to the plaintiff of having the roof replaced was minimal. Therefore the panel determined that the trial court abused its discretion in finding for the plaintiff.

JCRE Holdings owns property in Peoria Heights. GLK Land Trust owns the neighboring property. Gary L. Kempf is the trustee of GLK Land Trust. The two properties share a common wall. In 1982, the prior owners of the properties entered into and recorded a “Party Wall Agreement.” The agreement designated the shared wall as a common support wall. In 1996, when two other sets of owners owned the properties, one received permission from the other to construct a sloped roof that hung over a portion of the wall onto the others’ property.

In 2014, JCRE sued GLK alleging that the overhanging roof constituted a trespass. The complaint sought injunctive and other relief. The parties filed cross-motions for summary judgment. The trial court denied both motions. After motions to reconsider, the trial court granted JCRE’s motion, finding that the agreement between the prior property owners constituted a revocable license that JCRE revoked. GLK then appealed. Continue reading ›

After a group of students who were part-time library employees of the University of Chicago attempted to unionize, the University fought the organization attempt. The students won before the National Labor Relations Board, but the University refused to bargain with the students’ chosen representatives. The students and their union sued, and the 7th Circuit affirmed the issuance of an enforcement order by the NLRB.

In May 2017, the International Brotherhood of Teamsters Union Local No. 743 filed a petition with the National Labor Relations Board. Local 743 sought to represent for collective bargaining purposes a unit of part-time student employees of the University of Chicago Libraries. The University responded with a “statement of position.” In it, the University contended that the proposed unit of student employees was not appropriate for collective bargaining. The University gave three reasons, one of which was that the students were temporary employees who did not manifest an interest in their employment terms and conditions that were sufficient to warrant collective-bargaining representation.

The University followed a procedure set out in 29 C.F.R. § 102.66(c) to submit an “offer of proof” – a description of the evidence the University would present to the Board to show that student employees were not entitled to collectively bargain. At a pre-election hearing on May 17, 2017, the Board’s hearing officer explained that after reviewing the proposed evidence and testimony that the University would put on to support its arguments, the Board would not take evidence because the evidence proposed and the testimony all dealt with established Board law.

The Board’s regional director echoed the hearing officer’s assessment, concluding that the evidence was insufficient to sustain the University’s contentions. The regional director ordered an election for the representation of the unit proposed by Local 743. The University asked the NLRB to stay the election and review the regional director’s decision. The Board denied that request, concluding that the facts asserted in the University’s offer of proof were insufficient to warrant the conclusion that the library clerks should be deemed ineligible as temporary or casual employees. Continue reading ›

After several former employees stole and destroyed internal data from their employer in order to found a competing business, and were sued, the trial court’s appointing of a third party to monitor the new company’s compliance with discovery and restraining orders was not error.

Shamrock Corporation has sold antifreeze, motor oil, and heat transfer fluids since 1974. Eventually, John Dreamer, Sr. became the sole shareholder of Shamrock. When John died, his wife, Annie Dreamer, became the sole shareholder. The entirety of Shamrock’s stock is held in a trust with Annie as the beneficiary.

Shamrock had five employees: John Dreamer, Jr., Les Kreifels, Steven Wroblewski, David Wells, and Chris England. The Dreamer family decided to sell Shamrock and offered Wroblewski and Wells the opportunity to make the first offer. The two submitted an offer that was financially acceptable but included collateral terms that the Dreamer family refused to accept. In August 2017 Shamrock made a counter-offer that revised some of the collateral terms.

In September 2017, Wroblewski and Wells abruptly resigned. England resigned four days later. Just prior to their resignations, the three had Beaver Shredding, Inc. destroy several boxes of documents at Shamrock’s headquarters. The three also deleted large amounts of data from Shamrock’s internal computer system. Prior to the deletion, Wroblewski had uploaded data from the computers to the digital storage site Dropbox. Continue reading ›

Two consumers initiated a class action suit against Fannie May alleging that they were deceived by the size of the candy boxes that they purchased. The consumers argued that the boxes contained an acceptable level of empty space, amounting to over a third of the volume of the boxes. The appellate panel found that though the company’s boxes correctly indicated the included weight and portion size of the candy, the consumers had sufficiently pled the initial elements of a claim for deceptive practice. However, the panel found that the consumers could not show that they suffered actual damages, because they could not demonstrate that the candy was worth less than the amount they paid, or that they could have purchased the same candy for cheaper elsewhere. The panel then affirmed the district court’s decision in favor of Fannie May.

Clarisha Benson and Lorenzo Smith each purchased an opaque, seven-ounce box of Fannie May’s chocolate for $9.99 plus tax. Benson purchased Fannie May’s Mint Meltaways, and Smith purchased Fannie May’s Pixies. Although the boxes accurately disclosed the weight of the chocolate within, and the number of pieces in each box, the boxes were emptier than either had expected. The box of Mint Meltaways contained approximately 33% empty space, and the box of Pixies contained approximately 38% empty space. Continue reading ›

When a film production equipment rental company in Chicago began losing business to a new competitor, it sought to blame a state economic development agency. The company sued the state agency, alleging that the agency conspired to steer state incentives to the new business in violation of the U.S. Constitution and the Sherman Antitrust Act. The appellate panel disagreed, finding that the actions of the state agency were not actionable, as the competitor had consistently reached out to the state agency for help, applied for grants and development programs that the plaintiff did not, and offered superior equipment and facilities for film production.

Since 1979, Chicago Studio has operated a film and television production studio in Chicago, Illinois. Chicago Studio has four studio stages measuring 62,000 square feet. Chicago Studio requires production companies to lease its production equipment for a 0.4% charge. The studio does not have installed air conditioning, but Chicago Studio provides industry-standard portable air conditioning units for an additional charge. Additionally, Chicago Studio does not have screen docks, which allow large trailers to unload equipment inside the studio.

Cinespace began operating a studio in Chicago around 2010. By the end of 2012, Cinespace had 600,000 square feet of floor space and 10 stages. The studio expanded to 1.5 million square feet of floor space and 30 stages by Januar 2015. Cinespace’s studio can accommodate two-story sets and includes air conditioning, inside breezeways and scene docks, concrete floors, sound-proof walls, and new offices. Cinespace permits production companies to use any equipment rentals they choose, including an unaffiliated equipment rental company called Cinelease that charges 0.2%.

Chicago Studio sought to put the blame for its failure to make a profit following Cinespace’s opening on the Illinois Department of Commerce and Economic Opportunity, Illinois Film Office, and Betsy Steinberg, a state employee responsible for promoting the Illinois film industry. Chicago Studio alleged that the defendants unlawfully steered state incentives and business to Cinespace in violation of the Sherman Act and equal protection and due process under the Fourteenth Amendment. The district court granted the defendants’ motions to dismiss the Sherman Act and due process claims. It later granted summary judgment on the equal protection claim to the defendants. Chicago Studio then appealed. Continue reading ›

As we have written about previously, one of the concerns with purchasing a minority stake in a closely held corporation is the potential for shareholder oppression. This concern is even more relevant when a non-family-member considers buying into a family-owned business. One minority shareholder found this out the hard way when he suffered a backlash after raising concerns about the conduct of the founder and majority shareholder of a closely held Illinois corporation.

In 1962, Kenneth Packer founded Packer Engineering Inc. (“PEI”) and its parent company, The Packer Group, Inc. (“TPG”), in Du Page County. Packer soon grew PEI into a well-respected professional engineering firm. Both PEI and TPG shared a number of the same officers and directors, including Packer who served as the board chairman for both companies.

In 1979, Edward Caulfield was hired by PEI as its director of mechanical engineering. In 2002, Caulfield became president and chief technical officer of PEI. Caulfield was offered a minority equity interest in TPG in addition to his base salary of $500,000. Continue reading ›

After a tradeshow exhibit vendor was stiffed on the payment of a contract by a middleman, it sued the tool manufacturer to recover its debt. At the same time, it filed a claim in the bankruptcy proceeding of the middleman. The district court ruled that the plaintiff could not pursue a claim against the manufacturer because it had a claim pending in the middleman’s bankruptcy proceeding. The 7th Circuit panel reversed, finding that there was no concept of judicial estoppel where a pending claim in a bankruptcy proceeding barred seeking the collection of a debt from a third party.

TRUMPF, Inc., the U.S. subsidiary of an international business, makes specialty tools such as precision laser cutters. TRUMPF sells many of its products at trade shows. It hired Lynch Exhibits to handle its appearance at the 2017 FABTECH show in Chicago. Lynch then subcontracted with CSI Worldwide to provide some of the necessary services.

CSI contended that it told TRUMPF that it was unsure of Lynch’s reliability. CSI stated that it would do the work only if TRUMPF paid it directly or guaranteed Lynch’s payment. According to CSI, TRUMPF assented. The two entities did not sign any undertaking to that effect. CSI did the work and then billed Lynch. Lynch did not pay. CSI filed an involuntary bankruptcy petition against Lynch, who then filed a voluntary bankruptcy petition. CSI claimed approximately $530,000 as a creditor, and also filed suit against TRUMPF under diversity jurisdiction, seeking $530,000 on theories including unjust enrichment and promissory estoppel. Continue reading ›

The restaurant industry has long been a notorious boys’ club, full of misogyny and sexual harassment. With men maintaining most of the power in the industry, women didn’t feel like they had a choice other than to put up with the constant groping and harassment from both male staff and patrons, but a new settlement in a New York sexual harassment case might change all that – or at least move the needle in the right direction.

At the end of 2017, the New York Times reported on multiple allegations made by 11 women working at the Spotted Pig in Manhattan that the owner of the restaurant, Ken Friedman, had repeatedly groped and sexually harassed them. The plaintiffs also allege that Friedman fostered a sexist environment in which they constantly felt unsafe and unwelcome and that he retaliated against them when they tried to speak out against the mistreatment.

The New York State attorney general’s office investigated the matter and recently ordered Friedman to pay the 11 plaintiffs a combination of $240,000, to be split among them and paid out over the next two years, as well as 20% of all his profits from the restaurant over the next ten years, including any money he makes off the sale of the restaurant (of which he currently owns 75-80%) if he decides to sell it. The women are unlikely to see any money from his profits since the restaurant has been in the red for a while, but the almost quarter-million-dollar settlement is nothing to sneeze at. Continue reading ›

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