Seventh Circuit Review

In American Needle Inc. v. National Football League, the Seventh Circuit was presented with the question of whether the National Football League and its affiliates should be held liable for a violation of the Sherman Act as a result of the league’s exclusive apparel licensing contract with Reebok. This article traces the evolution of the Supreme Court’s intra-enterprise conspiracy doctrine, which stated that even a parent company and its wholly owned subsidiary could conspire in such a way as to invoke the Sherman Act. The intra-enterprise conspiracy doctrine was overturned in Copperweld Corp. v. Independence Tube Corp. in 1984, and since then, courts have continued to expand the exemption from antitrust liability created by Copperweld and, in some circumstances, have extended it to affiliated companies. This article details the Seventh Circuit’s decision in American Needle Inc. and explains how the court made the right call by (1) taking an incremental look at antitrust exemptions for affiliated companies and (2) finding that the NFL and its affiliates should be treated as a single entity for the purposes of trademark licensing and therefore should not be held to have violated the Sherman Act as a result of the exclusive licensing contract.

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The Seventh Circuit has a reputation for being harshly critical of attorneys who fail to follow the court’s procedural rules. Whether by sanction, written opinion, or oral rebuke, the attorney who fails to abide by the court’s rules can be sure of some disciplinary action. In Smoot v. Mazda Motors, the court asked whether the judges responsible for the strict enforcement of these rules are simply being “fusspots and nitpickers.”

This Note will address the court’s question through an empirical survey of the manner and frequency by which attorneys are disciplined for failing to follow the court’s rules. The Seventh Circuit’s propensity to sanction attorneys for their behavior will be compared to that of the U.S. Courts of Appeals as a whole. Additionally, the Note will explore potential statistically significant correlations between the quantity of sanctions and the make-up of each of the U.S. Courts of Appeals.

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The Seventh Circuit has recently decided a trilogy of cases in which stockholders or creditors attempted to hold a business’s professionals—such as financial advisors and investment bankers—liable for the losses they suffered as a result of the business’s bankruptcy or financial demise. In all three of the cases, Fehribach v. Ernst & Young LLP, The HA2003 Liquidating Trust v. Credit Suisse Securities (USA) LLC, and Joyce v. Morgan Stanley & Co., the Seventh Circuit declined to hold the professionals liable, thereby eliminating a potential “deep pocket” for the creditors or stockholders. The outcomes of these cases were consistent despite the fact that the cases were brought under varying causes of action, including negligence, constructive fraud, breach of contract, and using the ever-controversial damages theory of deepening insolvency. This Note explores the various causes of action brought against these professionals in other circuits and lower federal courts—specifically highlighting deepening insolvency and standard tort theories—before considering the Seventh Circuit’s treatment of these claims in Fehribach, The HA2003 Liquidating Trust, and Joyce. This Note concludes that the Seventh Circuit’s unwillingness to hold a business’s professional liable on a third-party claim could be more easily applied through the use of a general analytical framework in which to evaluate these claims and proposes that the framework applied should look something similar to the three-prong test as applied to lenders in the context of equitable subordination.

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While the Eighth Amendment holds that a convicted inmate may be punished if that punishment is not “cruel and unusual,” due process requires that a pretrial detainee not be punished at all. In 1979, the Supreme Court declared that the rights of a pretrial detainee are “at least as great” as those afforded a convicted prisoner. The Seventh Circuit’s recent decision Klebanowski v. Sheahan illustrates the modern trend of using the same “deliberate indifference” standard used to analyze convicted prisoners’ § 1983 claims when analyzing pretrial detainees’ § 1983 claims. By scrutinizing the way modern courts assess pretrial detainees’ § 1983 claims against prison officials for failure to safeguard inmates from other inmates, this article will assert that the American justice system has strayed dangerously far from the important distinction between convicted prisoners and pretrial detainees. That the state does not acquire the power to punish until after it has secured a formal adjudication of guilt is a rudimentary American principle in danger of extinction. Employing the deliberate indifference standard created for convicted prisoners’ § 1983 claims to analyze pretrial detainees’ claims amounts to punishment of the pretrial detainee.

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In its recent decision Hall v. Nalco, the Seventh Circuit became the first Federal Circuit Court of Appeals to recognize a Title VII claim arising from adverse employment action following from a woman’s pursuit of in vitro fertilization, a type of infertility treatment. The Seventh Circuit’s decision creates a possible conflict with the Eighth and Second Circuits, which have both refused to recognize a cognizable Title VII claim where an employer excludes infertility treatments from insurance benefits plans. Furthermore, the Seventh Circuit’s reasoning articulates a murky distinction between childbearing capacity and fertility—although discrimination based on childbearing capacity violates Title VII as amended by the Pregnancy Discrimination Act, discrimination based on fertility does not. Nevertheless, the Seventh Circuit correctly determined that adverse employment action based on an employee’s pursuit of infertility treatments is gender discrimination under the Pregnancy Discrimination Act.

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In Chicago Lawyers’ Committee for Civil Rights Under Law, Inc. v. Craigslist, Inc., the Seventh Circuit held that Craigslist, Inc., could not be held liable under the Fair Housing Act’s ban on discriminatory advertisements for over 120 discriminatory housing advertisements complained about by the Chicago Lawyers’ Committee that were posted on Craigslist’s website. The court held that although newspapers and virtually every other publishing medium are consistently found liable under the Fair Housing Act’s ban on discriminatory advertisements, interactive computer service providers, such as Craigslist, are afforded civil immunity as a publishers or speakers of third-party content under the Communications Decency Act of 1996.

This Note argues that the Seventh Circuit erred by following a line of cases that misinterpret the Communications Decency Act. Properly interpreted, in light of the textual construction and legislative history, the Communications Decency Act should provide immunity to an interactive computer service provider as a “publisher” or “speaker” of third-party material only when it screens its services for inappropriate and illegal content. Furthermore, this Note argues that even if the court’s interpretation of the Communications Decency Act’s immunities was proper, Craigslist still should have been found liable under the Fair Housing Act’s ban on discriminatory advertisements because the Fair Housing Act’s coverage is broader than the Communications Decency Act’s supposed immunity.

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In United States v. Khattab, the Seventh Circuit identified a split between the circuits as to the mens rea required by the statute that criminalizes possessing or distributing precursor chemicals to illegal drugs. The relevant mens rea is “knowingly, or having reasonable cause to believe[.]” While the Tenth Circuit interprets “having reasonable cause to believe” to mean that a defendant must have something close to actual subjective knowledge that a chemical will be used to manufacture methamphetamines, the Eighth, Ninth, and Eleventh Circuits interpret “having reasonable cause to believe,” to mean that an objective standard can be applied. The Seventh Circuit declined to interpret the standard, finding that Khattab had actual knowledge the pseudoephedrine he sold would be used to manufacture methamphetamines. Nonetheless, this Comment explores the rationales of all the Circuits. It recommends that the Seventh Circuit, and the Supreme Court if applicable, side with the Tenth Circuit and interpret the mens rea requirement strictly. It further argues that only the strict interpretation is appropriate given the purpose of mens rea in our legal system.

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In the bedrock student speech case Tinker v. Des Moines Independent School District, the Supreme Court ruled that students do not shed their First Amendment rights at the schoolhouse gate and that a school cannot prohibit student speech absent a “substantial disruption.” The Supreme Court defined “substantial disruption” as speech that “materially and substantially disrupt[s] the work and discipline of school.” In 2008, the Seventh Circuit adopted a new definition of “substantial disruption” in Nuxoll v. Indian Prairie School District No. 204, a case where a student challenged his school’s prohibition of the t-shirt slogan “Be Happy, Not Gay.” A split-panel Seventh Circuit found that a “substantial disruption” occurs if there is reason to believe that a student’s speech “will lead to a decline in students’ test scores, an upsurge in truancy, or other symptoms of a sick school.” This Note will explore how the majority opinion in Nuxoll will allow school administrators to restrict a wide variety of student speech. This Note will also dispute the Seventh Circuit’s interpretation of Supreme Court precedent in defining “substantial disruption.”

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