7th Circuit Court of Appeals
Civil – Judge Dismissal
Robertson Fowler III v. Keith Butts, superintendent, New Castle Correctional Facility
The 7th Circuit Court of Appeals ruled that a federal judge in Indianapolis should have excused herself from hearing a man’s petition regarding his sentence because she was the one who sentenced him while she was a judge in state court. In doing so, the federal appellate court overturned two lines of decisions.
Robertson Fowler pleaded guilty to unlawful possession of a firearm charge and a habitual offender enhancement in Marion Superior Court. He was sentenced to 30 years, 15 years for the possession offense and an extra 15 on account for his criminal history, by Judge Jane Magnus-Stinson. While his case was pending on appeal, the Indiana Supreme Court ruled that a prior conviction used to establish status as a “serious violent felon” can’t also be used to establish status as a habitual offender.
Fowler’s appellate attorneys did not bring up Mills v. State, 868 N.E.2d 446 (Ind. 2007). The Court of Appeals affirmed, and later upheld the denial of post-conviction relief, noting that his plea agreement waived the benefit of Mills.
Fowler then filed a petition in federal court claiming ineffective assistance of counsel. That petition was heard by Magnus-Stinson, who moved to the federal bench, first as a magistrate judge in 2007, then as an Article III judge in 2010. She denied his petition for the same reasons as the COA.
The 7th Circuit, in an opinion authored by Judge Frank Easterbrook, focused on the procedural issue with Magnus-Stinson hearing the case. A federal judge is always disqualified from hearing a collateral attack on a judgment he or she entered or affirmed as a state judge, he wrote. She should have turned this proceeding over to another judge.
The case led the Circuit Court to look at United States v. Balistrieri, 779 F.2d 1191, 1204-05 (7th Cir. 1985), which made a distinction between 28 U.S.C. sections 455(a) and (b). Based on Balistrieri, the 7th Circuit refuses to consider Section 455(a) arguments on appeal. That section says a judge shall disqualify himself in any proceeding in which his impartiality might be reasonably questioned. Section 455(b) outlines other circumstances where a judge may disqualify himself, such as serving as a lawyer on the case previously or any kind of financial interest in the subject matter or party in the proceeding.
Easterbrook noted the 7th Circuit is the “odd circuit out,” and decided to overrule Balistrieri and its successors to the extent they hold that arguments under Section 455(a) cannot be raised on direct appeal.
The Circuit Court also overruled its line of cases in United States v. Ruzzano, 247 F.3d 688, 694 (7th Circ. 2001) and United States v. Johnson, 680 F.3d 966, 979 (7th Cir. 2012) to the extent that they forbid appellate review of judicial-disqualification issues in the absence of a motion in the District Court. Fowler did not file a motion in the federal court seeking to disqualify Magnus-Stinson. Easterbrook pointed out that the U.S. Supreme Court has allowed litigants to seek disqualification despite the absence of a protest in the court where the disqualification judge sat. Cases from that court treat the participation of a disqualified judge as a form of structural error, which may be noticed at any time.
This opinion was circulated to all active judges on the 7th Circuit and none favored a hearing en banc. It was remanded for a decision by a different District judge.
Criminal – Supervised Release/Modification
United States of America v. Carey Ray
The 7th Circuit Court of Appeals declined to overrule recent precedents in a man’s appeal involving his supervised release conditions and instead adopted a rule of practice for the Circuit.
Carey Ray, 29, was convicted in federal court in Hammond of knowingly transporting a minor across state lines to engage in criminal sexual activity. He met “Alexia,” a 14-year-old girl, online and took her to Illinois on their second meeting. He rented a hotel room, gave her marijuana and alcohol, and had sex with her despite her protests.
He was sentenced to more than 20 years in prison and the judge imposed certain conditions regarding his supervised release. Since his sentencing, the 7th Circuit has pronounced both procedural and substantive requirements for permissible conditions of supervised release, Judge Frank Easterbrook wrote, citing United States v. Thompson, 777 F.3d. 368 (7th Cir. 2015).
The U.S. government acknowledged that nine of the conditions needed addressed or corrected, so the government asked the District Court to fix the problem while Ray’s appeal was pending before the 7th Circuit. Circuit Rule 57 requires the lower court to request permission from the 7th Circuit to modify a judgment while an appeal is pending. But the District Court did not do so, relying on 28 U.S.C. Section 3583(e)(2), which says the conditions of supervised release may be modified at “any time.”
Ray then filed a new appeal because he challenged four of the conditions even after revision, believing they are out of compliance with Thompson and it successors. Ray wanted the 7th Circuit to revisit and overrule United States v. Ramer, 787 F.3d 837 (7th Cir. 2015) and United States v. Taylor, 796 F.3d 788 (7th Cir. 2015). Ramer concluded the “at any time” language in the statute supersedes the normal rule that only one court at a time has jurisdiction. Taylor reached the same conclusion about conditions of probation.
The 7th Circuit declined and instead held that whether or not a District Court possesses jurisdiction to revise the conditions of supervised release while an appeal is pending, it should not exercise that jurisdiction without receiving permission under Circuit Rule 57. It should also not seek that permission in the absence of strong reasons, reasons which are lacking in Ray’s case, Easterbrook noted.
“Waiting for the outcome of the appeal before taking up a request under §3583(e)(2) usually is much the best course. It isn’t as if there were a need for a speedy rewrite. Ray will spend more than 20 years in prison before his supervised release begins,” Easterbrook wrote. “Only when the term of imprisonment is short, and supervised release might commence before the appeal ends, would it be prudent to modify the conditions while the appeal is pending.
“And when the district judge believes that this is so, the procedure laid out by Circuit Rule 57 would allow this court to decide whether an expedited decision of the appeal would be a better solution.”
Easterbrook noted that the opinion was circulated among all active judges since it adopted a rule of practice, and none of the judges favored a hearing en banc.
The judges affirmed Ray’s conviction but vacated his sentence and sent the case back to the lower court for resentencing.
Indiana Court of Appeals
Mortgage Foreclosure – Surplus Funds
Manee Edler v. Regions Bank, and Jenner Properties, LLC
A trial court misapplied the law regarding disbursement of surplus sale proceedings from a sheriff’s sale when it ordered the full surplus to the bank that owned the first mortgage on the home, the Indiana Court of Appeals held. The law requires the surplus to go to the mortgage debtor.
John and Manee Edler had two mortgages through Regions Bank on their Bloomington home, the first mortgage was on the property; the second mortgage was related to a home equity line of $30,000.
In June 2013, Regions Bank alleged the Edlers were in default on the second mortgage only, with a balance of $22,933.56. The complaint did not allege any default regarding the first mortgage. In a foreclosure decree, the judge stated the second mortgage is superior to all other liens and claims, except the first mortgage. The decree ordered the home sold in a sheriff’s sale, which David Jenner bought for $82,600.
Regions petitioned for a portion of that amount to cover the second mortgage and then the rest of the surplus to be applied to the first mortgage. The court granted the full $82,600 to Regions. The Edlers filed a motion to correct, which was denied, seeking the surplus. John Edler passed away while this appeal was pending.
Judge Michael Barnes turned to Indiana Code 32-30-10-14, which governs mortgage foreclosure sales and surplus sales proceeds. This statute requires surplus directed to the “mortgage debtor, mortgage debtor’s heirs, or other persons assigned by the mortgage debtor.” The COA also cited two cases from the 19th century to support its reversal.
“This case is slightly unusual in that Regions obviously had notice of the foreclosure action on the second mortgage but chose to make no effort to foreclose on the first mortgage or otherwise have its rights adjudicated with respect to the first mortgage. Having chosen this course of action, Regions could not essentially reverse course by seeking the surplus sales proceeds, in clear contravention of the foreclosure statutes and relevant case law,” Barnes wrote.
The case was remanded with instructions to distribute the surplus sale proceeds to Manee Edler.
Criminal – Feticide/Neglect
Purvi Patel v. State of Indiana
See page 1.
Civil Plenary – Manager Bonuses/Life Insurance Proceeds
Gregg Appliances, Inc., and HHGregg, Inc. v. Dwain Underwood, on behalf of himself and all others similarly situated
HHGregg senior managers are not entitled to share in $40 million in life insurance proceeds from the 2012 death of executive chairman of the board Jerry Throgmartin, the Indiana Court of Appeals ruled, reversing a trial court ruling in the managers’ favor.
Dwain Underwood brought a class action on behalf of senior managers at Indianapolis-based HHGregg, claiming Throgmartin’s life insurance proceeds should have factored in earnings that serve as the basis for various levels of bonuses under the company’s annual incentive plan.
Court of Appeals Judge Melissa May overturned a trial court ruling that the managers were entitled to a share of the proceeds under Gregg’s bonus scheme based on 2012 earnings before interest, taxes, depreciation and amortization (EBITDA).
“As the life insurance proceeds Gregg received that year were properly excluded from EBITBA, Gregg was not obligated to pay the bonuses. We reverse and direct entry of summary judgment for Gregg,” May wrote.
“As the parties could not have intended the EBITDA on which the (Total Rewards Statement) was based would include a one-time event in the form of insurance proceeds that did not reflect the company’s performance, Gregg was entitled to summary judgment,” May wrote.
Criminal – Seat Belt Violation/Motion to Suppress
Lisa R. Harris v. State of Indiana
A state trooper’s recollection of a woman’s name on a national drug registry does not provide an independent basis of reasonable suspicion justifying him to investigate more than a seat belt violation that initiated the traffic stop, the Indiana Court of Appeals held in a 2-1 decision. As such, the judges reversed the woman’s motion to suppress evidence that led to a drug charge.
Indiana State Police Trooper Mike Organ, while parked at a gas station in Clinton in 2014, saw a driver and passenger ride by without wearing seat belts. He stopped the car driven by Lisa Harris. When he learned her name, he recognized it from National Precursor Log Exchange reports, which he checked daily. Her license was valid and she did not have any outstanding warrants. The NPLEx indicated she had purchased pseudoephedrine nine times in the past year. This led to him having Harris get out of her car and asking her if she had recently purchased any cold medicine with pseudoephedrine. She admitted to selling the pills for $20. She consented to his search of her car, and he found what turned out to be meth in her purse.
The state charged Harris with possession of methamphetamine as a Level 6 felony. She filed a motion to suppress, which was denied.
“Harris contends the trial court erred in denying her motion to suppress because Trooper Organ’s investigation above and beyond the seat belt violation contravened Indiana’s Seatbelt Enforcement Act. We agree,” Judge Margret Robb wrote for the majority. The Act bars a search or detainment of a driver or passenger solely because of a violation of the Act. Circumstances must arise after the stop that independently provide the officer with reasonable suspicion of other crimes.
“In short, Trooper Organ’s recollection of Harris’s name appearing on NPLEx did not provide an independent basis of reasonable suspicion that would justify further investigation,” Robb wrote.
Judge Edward Najam dissented, writing the majority opinion failed to take into account numerous facts relied on by the trial court in denying Harris’ motion to suppress.
“Trooper Organ recognized Harris from the frequency with which her name appeared on the NPLEx, and our precedent expressly permits an officer in a seatbelt stop to take reasonable steps to investigate a driver based on the officer’s actual knowledge of the driver’s identity. The majority declares that the NPLEx is of no probative value to criminal investigations unless it demonstrates on its face illegal pseudoephedrine purchases or attempted purchases. I cannot wholly agree,” he wrote.
“[W]hile a traffic stop for a seatbelt violation cannot be turned into a fishing expedition, the Act does not vitiate an officer’s authority to investigate circumstances that become known to the stopping officer after he has initiated the traffic stop.”
Juvenile - CHINS
In the Matter of: S.K., R.K., M.K., and A.K., Ja.K. (Father) and Je. K. (Mother) v. Ind. Dept. of Child Services
The Indiana Court of Appeals reversed the findings that four sisters are children in need of services, noting none of their parents’ actions or inactions endangered the children.
Father Ja. K. and mother Je. K. had four daughters together while married; they filed for divorce in 2011, but that action was later dismissed and a final custody determination was never entered. Father was awarded temporary custody and kept the children until 2015, when he lost his job. He had to move into a hotel with his father and the girls, but when his father lost his job, Ja. K. took the girls to live with their mother instead of becoming homeless. The girls had also lived with an aunt and uncle at some point that year because of father’s unstable housing issues.
The girls often changed school districts because of housing issues, but always maintained above-average grades.
The Department of Child Services received a report in June 2015 that mother’s boyfriend was using illegal drugs. The three oldest children never saw any drug use; the youngest said the man took a lot of pills for his back. The family case manager took drug samples from the adults but left the children in their mother’s care. Mother’s drug screening came back positive for meth and amphetamine; a screening four days later was positive, but with a lesser amount. Subsequent screenings came back clean.
DCS filed a CHINS petition. Father testified he wanted the girls back and they could live with him, his girlfriend, and their 5-month-old son. The girls were at that point living with an aunt and uncle.
The juvenile court adjudicated the sisters as CHINS, noting the unstable housing situation, mother’s positive drug tests, that the children often changed schools, and that the girls did not get along with father’s girlfriend, among other things.
“To be a CHINS, a child must be seriously impaired or endangered ‘as a result of the inability, refusal, or neglect of the child’s parent’ to provide necessary care. Ind. Code §31 -34 -1-1,’” Chief Judge Nancy Vaidik wrote. “Children cannot become CHINS by the mere happenstance of a family’s economic misfortune; the statute requires an action or failure to act by the parent that leads to serious endangerment of the children as a result of the lack of necessary care. In this case, the children were not endangered by the acts or omissions of the parents. In fact, the parents took deliberate actions to avoid placing the children in the endangering condition of homelessness. We therefore conclude that the juvenile court’s determination that the children are CHINS was clearly erroneous.”
Criminal – Burglary/Mental Health
Anthony J. Wampler v. State of Indiana
Indiana Court of Appeals Judge Paul Mathias again used an opinion to highlight problems he sees in the criminal justice system when dealing with defendants with mental health issues.
Anthony Wampler was charged with two counts of burglary and alleged to be a habitual offender after he was arrested for entering K.S.’ home and taking a beer and an inspirational note off of the refrigerator. Wampler also stood and watched who he believed was K.S. sleep for a while. He later referenced drinking the stolen beer and the note in one of his Facebook posts. Wampler had known K.S. since elementary school in the 1970s and had developed a crush and obsession with him. In 1995, he began keeping a notebook on K.S. That same year he also stopped taking medication for his mental illness issues.
He started leaving notes for K.S. and taking things off his property. After the burglary, Wampler thought perhaps the person leaving the notes may be connected and called a phone number left on a note. Wampler answered and admitted to breaking in.
At first, Wampler was found incompetent to stand trial, but was later restored to competency and convicted as charged. The judge entered only one conviction on double jeopardy concerns, leading to a sentence of 18 years on the burglary conviction, enhanced by 15 years for being a habitual offender.
The majority, made up of Judges Michael Barnes and Chief Judge Nancy Vaidik, affirmed Wampler’s sentence, the only matter he appealed. While they acknowledged his lifelong struggle with mental health problems, he stopped using psychiatric drugs from 1995 until he was placed in an inpatient facility during this case. He also has several criminal convictions, including Class D felony criminal mischief from 1995 and misdemeanor possession of drug paraphernalia in 2013.
Mathias dissented, as he has in at least four other cases dealing with defendants with mental health issues.
“Wampler was seriously mentally ill for years before this eerie and bizarre burglary. In all likelihood, he was also so mentally ill at the time of the crime that he could not have formed the requisite scienter so as to be criminally responsible for his behavior. Had his psychiatric examination been directed to his mental health at the time of the crime, rather than to his ability to assist his counsel at trial, he could have been, and should have been, civilly committed to a state mental health institution, rather than charged with a crime,” Mathias wrote. “This is a clear case of punishing someone for mental illness rather than having any interest in humanely recognizing the difference between mental illness and criminal behavior. We Hoosiers are better than that, and indeed, I believe that Article 1, Sections 15, 16 and 18 of the Constitution of Indiana expect us to be better than that.”
He also said the “real tragedy” is that Wampler was not tried as “insane at the time of the behavior charged or as someone who was guilty but mentally ill.”
Mathias would reverse the sentence and remand with instructions to impose the minimum sentence of six years with a 10-year habitual offender enhancement.•