Articles Posted in Federal Jurisdiction

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Fortunee Massuda was an investor in a group of Panda Express restaurants in Chicago. The restaurants were owned by a joint venture, RC Partnership, made up of Panda Express Inc. and Rezko Concessions Inc. Massuda invested $4 million in the joint venture in exchange for an ownership interest of 11% in the joint venture. The joint venture also owned and controlled PE Chicago, a Delaware LLC. By the year 2001, the value of the RC Partnership was estimated to be $56.4 million.

By 2005, Rezko Concessions’ owner, Tony Rezko, was in deep financial and legal trouble. In April 2006, Massuda went to Panda and informed it of her intent to sue Rezko and asked whether Panda would be interested in buying her 11% share. Panda’s general counsel declined the offer and instead told Massuda that her stake was worthless.

In mid-May 2006, Rezko was urgently in need of money. In order to secure funds, Rezko offered to sell PE Chicago’s interest in RC Partnership to Panda. Panda agreed to pay Rezko $3 million, keep the deal between them secret and grant Rezko personally a buy-back option.

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Gamesa Technology Corp. entered into a contract with Minnesota-based Outland Renewable Energy to provide maintenance for Gamesa’s wind turbines. Iberdrola Renewables Inc. runs the Gamesa-made turbines at the Cayuga Wind Farm located in Livingston County, Ill.

While servicing a Cayuga turbine, one of Outland’s employees, Aaron McCoy, was electrocuted when the turbine unexpectedly re-energized. McCoy filed a personal injury lawsuit in state court against Iberdrola Renewables and Gamesa. The case was removed from state court to federal court on diversity of citizenship grounds. Iberdrola Renewables impleaded Outland Renewable Energy LLC, claiming indemnification based on the contract and the Illinois Joint Tortfeasor Contribution Act.

Outland then filed 22 counterclaims, which included indemnification raising federal and state anti-trust claims and other state law claims. Outland was not successful in seeking a preliminary injunction against Gamesa’s allegedly unfair competitive practices.

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The 7th Circuit Court of Appeals in Chicago has reversed a decision of a U.S. district court judge regarding whether a case should be remanded back to an Illinois state court. This case arises out of the bankruptcy of a company known as Parmalat. Parmalat was a large Italian food and dairy company that entered bankruptcy in Italy in 2013. Enrico Bondi was appointed “extraordinary commissioner,” which is the Italian version of a bankruptcy trustee.

In 2004, Bondi initiated in the Southern District of New York Bankruptcy Court, a proceeding under Section 304 of the U.S. Bankruptcy Code to “enjoin the commencement” of a lawsuit against Parmalat with respect to property involved in the Italian bankruptcy.

After filing the lawsuit in the Southern District of New York’s Bankruptcy Court, Bondi filed a separate lawsuit in the Circuit Court of Cook County against Grant Thornton International, an accounting firm. That lawsuit claimed that Grant Thornton was responsible for Parmalat’s collapse through its involvement in fraudulent audits of Parmalat’s books in violation of Illinois law.

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The federal court rules are different than those in Illinois. Lawyers who may be used to operating under the Illinois Code of Civil Procedure need to be aware of Federal Rule of Civil Procedure 59(a), which says, “A motion to alter or amend a judgment must be filed no later than 28 days after entry of the judgment.” Under the Illinois Code of Civil Procedure, 735 ILCS 5/2-1202(c) and 5/2-1203(a), one is allowed 30 days to ask a state court judge to reconsider a judgment.

Unfortunately for Patricia Banks and her lawyer, she may have been following the Illinois Code of Civil Procedure rather than Federal Rule 59 when she asked the federal district court judge to reconsider the summary judgment it entered against her and in favor of the defendants.

Banks sued her former employer, the Chicago Board of Education, and her former supervisor, Florence Gonzalez, alleging race discrimination and retaliation in violation of Title VII of the Civil Rights Act of 1964 and related violations of federal and state law. The case was filed in the U.S. District Court for the Northern District of Illinois.

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Advanced Tactical manufactures and sells PepperBall projectile irritants. The product, PepperBalls, resemble paintballs, but PepperBalls contain irritants and are designed to be used for crowd control by police, private security firms and similar organizations.

Advanced Tactical was headquartered in Indiana, though the company had at least one office in California. Advanced Tactical became the manufacturer of PepperBall items after it acquired trademark and other property in a foreclosure sale from a company called PepperBall Technologies Inc.

During the foreclosure sale, the chief operating officer of one of the PepperBall suppliers contacted Real Action Paintball Inc., a California company. The chief operating officer of this supplier asked Real Action whether it was interested in acquiring irritant projectiles. A deal was reached between the supplier and Real Action.

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The 7th Circuit Court of Appeals in Chicago has reversed a district court judge’s decision in a case involving an indemnification clause in a contract.

Robert Krien was an employee of Riley Construction.  Riley was the general contractor on a construction project located in Wisconsin.  Riley in turn, hired Harsco Corporation to supply the scaffolding for the construction work.  Krien was injured when he fell from the scaffolding after a plank broke beneath him.  The parties settled Krien’s injury claim for $900,000.

Before the settlement, Harsco had filed a third-party complaint against Riley seeking indemnification for any damages Harsco might pay by way of judgment or settlement.  Then the parties filed cross-motions for summary judgment, and the district court judge granted Riley’s motion.  Harsco took this appeal to the U.S. Court of Appeals in Chicago.

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This is a case in which the U.S. Court of Appeals for the 7th Circuit in Chicago found that the defendant had contracted with an out-of-state buyer. The court found that the buyer performed all contractual obligations in his own state; however, the required sufficient minimum contacts were not found to establish personal jurisdiction in the plaintiff’s state of Wisconsin.

Marvin Greving was a Wisconsin resident who lived and ran a farm in Walworth County, Wis., since April 1971.  Greving and his wife conducted their personal and business matters only in Wisconsin.  Greving has a Wisconsin driver’s license, Wisconsin insurance and pays taxes in that state. In addition, Greving purchased all of his supplies for his farm from Wisconsin vendors.

In 2003, Greving attended a meeting at an insurance agency in Rochelle, Ill. At that meeting, Greving met Tom Wilson, a grain originator from Northern Grain LLC.  Northern Grain is organized under Delaware law, but is located in Harmon, Ill.

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A Federal Trade Commission (FTC) lawsuit has been filed in the U.S. District Court for the Northern District of Illinois in Chicago naming several United States and Canadian companies as defendants.  The allegations in the complaint allege that these companies acted on a medical discount scam that targeted seniors. 

According to the FTC’s lawsuit, seniors in the United States were victims of deceptive telemarketing telephone calls that proposed phony discounts on prescription drugs.  Some of the calls even pretended to be associated with Social Security, Medicare or a medical insurance company.

According to the FTC, the telemarketing phone calls pitched a prescription drug discount card that would supposedly provide big discounts or even free subscription drugs for seniors.  Many of the victims believed they needed to purchase this card in order to continue to receive Social Security benefits, Medicare or other medical insurance.  The sale of the discount card was a part of the scam.  Discount cards that these companies were selling to seniors were actually free by simply calling a toll-free telephone number or visiting a website. 

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According to a recent Chicago U.S. District Court decision, a Maine aircraft repair company cannot be brought into a court in Illinois. The decision was based on an argument that because the company’s website can be accessed in Illinois, jurisdiction would lie in U.S. District Court.

In the written opinion issued by Chief U.S. District Court Judge Ruben Castillo, the lawsuit was dismissed.

Clover Technologies LLC, based in Ottawa, Ill., filed a lawsuit against Oxford Aviation Inc. of Oxford, Maine. 

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A confidential settlement agreement was reached just two weeks before the start of a bellwether case in a coordinated litigation in California regarding hip implants. The terms of the settlement agreement were not revealed. 

The trial had been scheduled to begin in the middle of October 2013.  The next bellwether trial is set to begin in January 2014 in Los Angeles.  Johnson & Johnson and its subsidiary, DePuy Orthopaedics Inc., face thousands of lawsuits at the federal and state levels regarding the ASR implants. 

In March 2013, a Los Angeles jury returned a verdict of $8.3 million in damages to a retired prison guard who claimed that he was injured by the device. This was the first such trial against the orthopedic company.

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