7th Circuit Property Law News - U.S. Seventh Circuit
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Recent Property Law Decisions

When Stephanie Miller proposed a condo development in the Madison suburb of Monona, Wisconsin, she soon discovered how quickly small town politics could get in her way. After a falling out with a former mayor over another development, her proposed condos suddenly faced a very rocky approval process. Miller found herself subject to a slew of roadblocks.

Eventually she went to court, alleging that she had been discriminated against as a "class-of-one." Miller alleged that she was being selectively prosecuted and that city officials had singled her out for unfavorable treatment, without a rational basis, when compared to similarly situated persons, such as the former major's son, whose developments had gone ahead without a hitch.

Insurance companies who lost billions after the September 11th terrorist attacks won't be able to recover that money from $6 million in seized terrorist accounts, the Seventh Circuit ruled last week. Though the Terrorism Risk Insurance Act (TRIA) authorizes the use of such assets to pay judgments against terrorists, these funds fall into one of the act's exceptions.

It's not all bad news for victims of terrorism, though. While the insurers won't be able to collect from these funds, the Seventh split with the Fifth and adopted a broad reading of TRIA's "notwithstanding any provision of law" clause, finding it allowed claimants to avoid innocent ownership requirements of civil forfeiture law.

When Elena Fridman authorized her mortgage payment online, she thought she'd met her obligations to pay on time. But her mortgage servicer, NYCB Mortgage Co., disagreed. Because it took NYCB two days to process her payment, they did not consider it received "on time" and charged Fridman a late fee. Fridman sued, and the Seventh Circuit recently ruled that her payment was valid on the day she authorized it.

Under the ruling, mortgage services must credit payments made on their websites at the time the borrower approves it, not at the point they actual electronic transfer of funds is completed.

In 1997, Hamas orchestrated a triple suicide bombing in Jerusalem that wounded 200 and killed five people. U.S. citizens who were wounded, suffered emotional distress, or lack of consortium sued Iran in federal court arguing that Iran was responsible for the bombings because Iran provided support and training to Hamas.

The plaintiffs were successful and won a $71.5 million judgment against Iran -- though in hindsight, that may have been the easiest part of this litigation.

Motorola has been involved in antitrust litigation for the past five years with AU Optronics, and other defendants, who are part of an alleged foreign price fixing cartel. In one fell swoop, Judge Posner eliminated 99% of Motorola's claim -- what will happen next remains to be seen.

The Sherman Act Claims

Motorola claims that it purchased over $5 billion worth of LCD panels to incorporate them into cell phone manufactured either by Motorola, or its subsidiaries. The breakdown of the claim is as follows: 1 % were bought by and delivered to Motorola in the U.S.; 42% were bought by Motorola foreign subsidiaries and incorporated into products that were shipped to Motorola for resale in the U.S.; and the remaining 57% were bought by foreign subsidiaries and never even entered the U.S. The only sales at issue are the 42%, and Motorola received a little benchslap from Posner when he noted that the inclusion of the 57% was "a frivolous element of Motorola's claim."

Chicago, though not the largest city in the U.S., leads the country in gun violence, according to Reuters. And, while Illinois and Chicago have taken big steps to limit gun rights, many of the laws on the state and city level have been struck down on Second Amendment grounds.

The series of setbacks began in 2010 when the Supreme Court ruled that Heller applied to state and local laws, and overturned Chicago laws that prohibited individuals from owning guns. Later, the Seventh Circuit ruled that a Chicago law banning firing ranges and an Illinois law banning gun owners from carrying a weapon in public were unconstitutional, and the Illinois Supreme Court followed suit.

This week, the District Court for the Northern District of Illinois may have handed down the last blow, though how the City of Chicago will proceed remains to be seen.

All states have different ways of handling abandoned, or unclaimed, property. Last week, the Seventh Circuit had to examine Indiana law, and reached a conclusion contrary to the district courts. In doing so, Judge Posner also pointed out an area of the law that may need additional legislation.

Lacey Phillips and Erin Hall are an unmarried couple who decided to purchase a home together in 2006. Their first application for a mortgage was rejected by Associated Bank. They next applied to Fremont Investment & Loan ("Fremont"), through a referral, Brian Bowling, one of Hall's clients. Unbeknownst to Phillips and Hall, Bowling was a "crook" (Judge Posner's words), "who brokered fraudulent loans."

Fremont accepted loan applications based on "stated income," that is, they didn't verify applicants' income. And you've probably heard the rest before: Hall and Phillips couldn't make loan payments, they defaulted and lost their home. What you've probably not heard before is this little twist: Bowling's testimony helped convict Hall and Phillips for mortgage fraud, in return for a smaller sentence.

Do bears poop in the woods?

The Seventh Circuit must assume so, because the court agreed with the Environmental Protection Agency that campsites with water sources should test their water for contaminants.

The EPA can regulate “public water systems,” and it turns out that putting “non-potable” on your spigots isn’t enough.

Dismissed: A Blunderbluss of Federal and State Claims

Everyone gets excited about clean energy sources these days. Who wants to be stuck in the coal age when there's wind power to be harnessed?

Several years ago, Winnebago County, Illinois answered the wind power siren song by making wind farms a permitted use within the zoning ordinance without the need for a special use permit.

Since no good deed goes unpunished, Patricia Muscarello sued the Winnebago County Board, the County Zoning Board of Appeals, and some County officials, (along with several affiliated companies that operate wind farms), to challenge the ordinance as a taking.

The courts and the defendants were left scratching their heads with the same question: What's her damage?