A Jurisdictional Twist: 7th Cir. Holds That District Court Had Supplemental Jurisdiction Over Federal Claim and Original Jurisdiction Over State Claim

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There’s nothing inherently unique about the substantive issues in Burzlaff v. Thoroughbred Motorsports, Inc., No. 13-2520 (July 10, 2014), a decision released yesterday by the Seventh Circuit. The plaintiff, Ronald Burzlaff, purchased what he alleged was a defective “Stallion” motorized tricycle from Thoroughbred Motorsports and then brought claims against Thoroughbred under the federal Magnuson-Moss Warranty Act, 15 U.S.C. § 2301 et seq., and Wisconsin’s Lemon Law, Wis. Stat. § 218.0171. A jury found for him on both claims.

But the case contains a unique jurisdictional twist—one that the Seventh Circuit (in an opinion written by Judge Hamilton) described as “turn[ing] the usual pattern of supplemental jurisdiction on its head.” Slip Op. 5. Oddly enough, given the facts of the case, the district court did not have original jurisdiction for the federal claim under the Magnuson-Moss Warranty Act, but did have original jurisdiction over the state-law claim under Wisconsin’s Lemon Law. It then exercised its supplemental jurisdiction—appropriately, the Seventh Circuit held—over the federal claim.

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It's Not a Federal Question: 7th Circuit Sends Case Involving Affordable Care Act Funds Back to State Court

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What is or what is not a federal question under Grable & Sons Metal Products, Inc. v. Darue Engineering & Manufacturing, 545 U.S. 308 (2005), is an issue that continues to perplex lawyers, judges, and law students alike. In Hartland Lakeside Joint No. 3 School District v. WEA Insurance Corp., No. 13-3787 (7th Cir. June 27, 2014), the Seventh Circuit (in an opinion written by Judge Easterbrook) remanded to Wisconsin state court a dispute between certain Wisconsin school districts and WEA Insurance, the former administrator of their health-care programs, because it failed to present a federal question.

The dispute concerned the school districts’ portion of $5 billion distributed by the federal government to employers across the country under section 1102 of the Patient Protection and Affordable Care Act, 42 U.S.C. § 18002, a section designed to reimburse employers for certain costs associated with early retirees. WEA Insurance applied for the funds on the districts’ behalf, but, in an effort to gain a competitive advantage, decided to use the funds to reduce premiums in future years, instead of, as the school districts argued, paying them to the districts that had incurred the costs that the program was intended to defray. Small difference, if a school district intended to continue with WEA Insurance, but for those districts that were changing insurers, it mattered quite a lot, because they would never receive the funds allotted for them.

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Too Little, Too Late: Seventh Circuit Reaffirms the Limits of a Registration Proceeding Under 28 U.S.C. § 1963

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In Goldman v. Gagnard, No. 12-2706 (June 27, 2014), the Seventh Circuit (in an opinion authored by Judge Tinder) waded into a long-running, continent-spanning dispute, which it characterized as “Dickensian” in character, arising out of water leaks in a California house that was sold ten years and five judicial proceedings ago. The court’s ultimate holding was that the sellers had waited too long to raise an error that a California state court allegedly made almost three years ago, and had thereby waived any error.

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Supreme Court Denies Cert in Elmbrook School District v. Doe

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In a somewhat surprising move, the U.S. Supreme Court today denied the Elmbrook (Wisconsin) School District’s petition for a writ of certiorari in Elmbrook School District v. Doe, No. 12-755, over the dissents of Justices Scalia and Thomas. The School District petitioned from the decision of an en banc panel of the United States Court of Appeals for the Seventh Circuit that Elmbrook violated the First Amendment Establishment Clause when it held graduation events for many years in the auditorium of Elmbrook Church. That en banc decision had in turn overturned the decision of the original panel in the case finding no Establishment Clause violation.

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The "Villain's" Reply: Judge Posner Defends His Experiment in Chambers

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We last wrote about Mitchell v. JCG Industries, No. 13-2115 (7th Cir. Mar. 18, 2014), in mid-March, when one judge on the panel (all suspected Judge Posner) confirmed his “intuition” that plaintiffs in a donning-and-doffing case overstated the time that it took to don certain articles of protective clothing by conducting an experiment in his chambers, recording and timing his clerks as they put on the same articles that the plaintiffs donned daily at their employer’s poultry-processing plant.

Yesterday the Seventh Circuit denied rehearing en banc in the case by a 6-4 vote. Judge Williams wrote an opinion dissenting from the denial, joined by Chief Judge Wood (who dissented from the panel decision too) and Judges Rovner and Hamilton. Judge Posner wrote an opinion concurring in the denial–a move “virtually unheard of”–where he admitted that he and his clerks conducted the experiment (freeing Judge Kanne from any untoward suspicion) and where he further defended the experiment, denying that it was “evidence” or “appellate factfinding.”

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