author: ROVNER, Circuit Judge.

text:
    UNITED STATES of America, Plaintiff-Appellee, v. James M. KRUGER, Defendant-Appellant.
    No. 15-3203
    United States Court of Appeals, Seventh Circuit.
    Argued September 16, 2016
    Decided October 5, 2016

      Peter M. Jarosz, Timothy M. O’Shea, Attorneys, Office of the United States Attorney, Madison, WI, for Plaintiff-Appel-lee.
    Johanna M. Christiansen, Thomas W. Patton, Attorneys, Office of the Federal Public Defender, Peoria, IL, for Defendant-Appellant.
    Before POSNER, RIPPLE, and ROVNER, Circuit Judges.
   ROVNER, Circuit Judge.

Defendant-appellant James M. Kruger was arrested in 2013 after a day-long crime spree in southwestern Wisconsin during which he robbed his uncle, kidnapped a 69 year-old farmer, stole multiple vehicles, and drove over rural roads at speeds exceeding 100 miles per hour in an ultimately unsuccessful effort to elude capture by the authorities. He pleaded guilty to being a felon in possession of firearms and ammunition, in violation of 18 U.S.C. § 922(g)(1), and the district court ordered him to serve a prison term of 180 months. Kruger appeals the sentence, contending that the district court committed plain error in applying the Sentencing Guidelines when it found that he “otherwise used” a firearm to commit a kidnapping, see U.S.S.G. §§ 1B1.1, comment. (n.l(I)) & 2A4.1(b)(3), comment, (n.2), and assigned several points to his criminal history. We find no plain error in the enhancement for use of a firearm, and because any potential error in the calculation of his criminal history did not affect his advisory Guidelines sentencing range, we do not reach that issue.

I.

Kruger has led a troubled life. He was born into a broken, dysfunctional family and placed in foster care at the age of 12. He began drinking at age 8 and smoking marijuana and crack cocaine at age 16. Psychiatric problems emerged during his adolescence. He was homeless from the ages of 18 to 25. He has a lengthy criminal history dating back to age 17 that includes multiple prior felony convictions. As a result of those convictions, during the time period relevant to this case, Kruger could not legally possess a firearm or ammunition in interstate commerce. § 922(g)(1).

On June 6, 2013, Kruger arranged to purchase a .22 caliber rifle and a 1,600-round canister of .22 caliber ammunition at a Gander Mountain store in Deforest, Wisconsin. Bonnie Forseth purchased these items at Kruger’s behest; he told her that he was going to give the rifle to his father as a gift. Following the purchase, she placed the rifle in his truck and did not see it again. Kruger’s father would later tell investigators that Kruger did, in fact, give the gun to him. But at one or more points during the period of August 14 to August 28, 2013, both the rifle and the ammunition were in Kruger’s possession.

On August 28, individuals who shared a residence with Kruger in Madison, Wisconsin spoke to a police detective and advised him that Kruger was selling cocaine from the residence and had threatened one of them with a rifle on the prior evening. Kruger reportedly was using both cocaine and methamphetamine to deal with his mental difficulties, and his behavior had become increasingly violent. His roommates indicated that they had first seen the rifle about two weeks earlier. They showed the detective an empty box for the rifle, which contained the June purchase receipt from Gander Mountain. They also advised the detective that the rifle itself was located behind the seat in Kruger’s truck (one of them had placed it there at Kruger’s instruction). The truck was located and impounded later that same day. Two days later, the truck was searched pursuant to a warrant. Inside was documentation confirming that Kruger was the registered owner of the truck. Also found was the rifle along with the 1,600 rounds of ammunition and another receipt from Gander Mountain. Kruger was arrested on an unrelated charge on September 3, but he was evidently released on a signature bond by mistake.

At approximately 6:30 on the morning on September 10, 2013, Kruger arrived at the home of his uncle, Keith “Dale” Kruger (“Dale”). Kruger was agitated and behaving irrationally. He pointed a gun to Dale’s head and threatened to kill Dale and other family members. When Dale pushed the gun away, the two struggled and Kruger grabbed his uncle’s neck and began to choke him, repeating the threat to kill him. Telling Dale that he needed money, Kruger demanded that he open a safe in the basement. Eventually, Dale was able to open the safe and Kruger took a small amount of money from within. Kruger also broke into a gun cabinet and took a rifle, semi-automatic handgun, and a shotgun. Dale eventually escaped to a neighbor's house and called the police. Kruger, in the meantime, fled the scene in his car.

Kruger drove to a farm in rural Cass-ville, Wisconsin, owned by Walter and Linda Reidl. Linda saw the car arrive , on the property and pull into or behind a shed. As she approached the shed, Kruger pointed a handgun at her. She told him to put the gun down. Walter arrived on the scene at that moment from elsewhere on the piop-erty driving a truck and cattle trailer and Linda flagged him down. When Walter exited the truck, Kruger pointed the gun at his own head. The Reidls engaged Kruger in conversation about religion, during which Kruger advised them that he was a disciple of God. Yet, Kruger threatened to kill both the Reidls and himself. Walter had been planning to take a cow he had loaded onto the trailer to Bloomington, Wisconsin, for slaughter. Hoping to protect Linda, he suggested that he leave the farm with Kruger in the truck and drop him in Bloomington; Linda would remain behind. Kruger agreed. He changed his clothes and took a cap and a pair of sunglasses from Walter, and Linda retrieved two cans of soda from the house for him. Kruger then ordered Walter into the passenger seat of the Reidls’ truck, placed a shotgun in the cab, took a seat behind the wheel, placed the handgun he had previously pointed at Linda in his lap, and departed the farm with the cow in tow. Kruger told Walter that he also had explosives with him.

Kruger took Walter on a meandering two-hour journey to Dodgeville, Wisconsin, never stopping in Bloomington. Twice during the journey, Kruger put a crushed pill into one of the soda cans, lit the pill, and inhaled the smoke, telling Walter that it calmed him. At one point, Walter asked Kruger to let him go, but Kruger refused. Eventually, when the two reached Dodge-ville, Walter persuaded Kruger to let him telephone his wife and tell her he was alright. Kruger gave Walter some money and directed him to see if he could buy some more soda from a taxidermy shop. Walter walked into Rickey’s Ridge Taxidermy Studio, locked the front door behind him, told the proprietor that he was being held hostage, and asked him to call the police.

When Kruger heard sirens approaching, he sped away from the scene in the truck. (The trailer and cow had been ditched earlier.) Multiple squad cars gave chase, but Kruger initially managed to shake their pursuit. By this time, an advisory bulletin had been issued, local schools had been locked down, and area residents had been warned to stay in their homes; sheriffs deputies from four different counties and a state patrol aircraft were involved in the effort to capture Kruger. Kruger stopped at two other residences where he, among other things, confronted another resident with a gun, trimmed off his goatee, and stole another vehicle. He was ultimately captured following another high-speed pursuit when police placed “spike strips” in his path and the tires of the stolen car were punctured, causing it to overturn. He was arrested and charged with multiple state offenses, but his use of firearms promptly brought him to the attention of the federal authorities as well.

In a superseding indictment, a federal grand jury charged Kruger with three counts of being a felon-in-possession in violation 922(g)(1). Count One was premised on Kruger’s possession of the .22-caliber shotgun and the ammunition that Bonnie Forseth had purchased for him from Gander Mountain at his behest on June 6, 2013. Count Two charged that Kruger had possessed the same shotgun and ammunition between August 14 and August 28, 2013. Count Three arose from the lengthy crime spree of September 10, 2013, and charged him with the possession of three separate firearms during the course of that day.

Kruger pleaded guilty to Counts Two and Three pursuant to a written plea agreement. At the change of plea hearing, Kruger professed some uncertainty as to when exactly, during the two-week period in August 2013 referenced in Count Two of the indictment, he had possessed the .22-caliber rifle and ammunition he had purportedly purchased for his father. The government’s proffer focused on the end of that period, when police learned from Kruger’s housemates that he was in possession of the rifle and impounded the truck in which he had stored it. When the court questioned Kruger about Count Two, he admitted that he was in constructive possession of the ,22-caliber ammunition, “probably multiple times” between August 14 and August 28 but could not recall precisely when. R. 146 at 22. He also acknowledged that, at different times during that same period, he had also possessed (or constructively possessed) the rifle; but, again, he could not specify when. R. 146 at 21, 22-23.

At sentencing, Kruger’s offense level, criminal history, and advisory sentencing range were calculated using the November 2014 Sentencing Guidelines. Counts II and III were grouped together for that purpose. Because Kruger had possessed one or more of the firearms in connection with other felony offenses (including the robbery of his uncle and the kidnapping of Walter Reidl), his offense level was ultimately calculated using the kidnapping guideline, which produced the highest offense level. See U.S.S.G. §§ 2K2.1(c)(l); 2X1.1; 2A4.1. Among other enhancements, the district court imposed a two-level enhancement for use of a dangerous weapon in conjunction with the kidnapping. § 2A4.1(b)(3). The district court specifically found that “the defendant used a dangerous weapon, here a nine millimeter handgun[,] to force [Walter Reidl] to remain in the truck while the defendant drove.” R. 140 at 6; see also R. 138 at 4. Kruger was assigned a total of six criminal history points, which placed him into a criminal history category of III. Two points were imposed pursuant to section 4Al.l(d) on the basis that Kruger was still serving probation on a state disorderly conduct charge when he engaged in the offense conduct underlying the indictment in this case. R. 127 ¶ 87; R. 138. at 4; R. 140 at 4-5. Kruger was also assessed one criminal history point for the state offense of operating a motor vehicle under the influence of a controlled substance on September 10, 2013. R. 127 ¶ 84. With an adjusted offense level of 38, the Category III criminal history produced a sentencing range of 292 to 365 months. However, because the statutory maximum term was twenty years (ten years for each of the two counts to which Kruger had pleaded guilty), a term of 240 months became the Guidelines range. See U.S.S.G. §§ 5Gl.l(a), 5G1.2(d).

After hearing from counsel for both parties and from Kruger himself, the district court ordered Kruger to serve a below-Guidelines sentence of 180 months. Among other mitigating factors, the court took note of Kruger’s difficult childhood, his polysubstance drug abuse, and his history of mental health problems. On the other hand, the court observed that Kruger’s psychiatric problems were not as bad as he made them out to be, that Kruger did not comply with his prescribed regime of medication, and instead resorted to narcotics in an ill-advised effort to self-medicate. The court also noted that Kruger’s offenses were serious, that his criminal behavior reflected a pattern of escalation, and that he was a dangerous individual from whom the public needed to be protected. That said, the court was not convinced that a sentence as long as that called for by the Guidelines was necessary to achieve specific deterrence.

II.

Kruger’s appeal challenges the calculation of his advisory sentencing range under the Guidelines. It is the court’s first task at sentencing to properly calculate that range. E.g., Molina-Martinez v. United States, — U.S.-, 136 S.Ct. 1338, 1342, 194 L.Ed.2d 444 (2016). Although the Guidelines no longer bind the court after United States v. Booker, 543 U.S. 220, 125 S.Ct. 738, 160 L.Ed.2d 621 (2005), the court nonetheless “must consult those Guidelines and take them into account when sentencing.” Molina-Martinez, 136 S.Ct. at 1342 (quoting Booker, 543 U.S. at 264, 125 S.Ct. at 767). The failure to properly apply the Guidelines and to correctly calculate a defendant’s sentencing range thus amounts to a- “significant procedural error,” id. at 1346 (quoting Gall v. United States, 552 U.S, 38, 51, 128 S.Ct. 586, 597, 169 L.Ed.2d 445 (2007)), because the Guidelines continue to serve as “ ‘the framework for sentencing and ‘anchor ., -, the district court’s discretion,’ ” id. at 1345 (quoting Peugh v. United States, — U.S.-, 133 S.Ct. 2072, 2083, 2087, 186 L.Ed.2d 84 (2013)).

Kruger’s first contention focuses on the two-point increase in his offense level pursuant to Guidelines section 2A4.1(b)(3). Kruger contends that it was error for the court to find that he “otherwise used” a dangerous weapon in the course of kidnapping Walter Reidl, see U.S.S.G. § 1B1.1, comment. (n.1(I)); in Kruger’s view, he at most brandished a firearm. Second, Kruger contends that three criminal history points were assigned to him in error and that his criminal history category should have been II rather than III. These issues were not raised below, and consequently our review is limited to a search for plain error. Fed. R. Crim. P. 52(b); United States v. Olano, 507 U.S. 725, 731, 113 S.Ct. 1770, 1776, 123 L.Ed.2d 508 (1993). We conclude that the district court did not plainly err in finding that Kruger “otherwise used” a firearm for purposes of the kidnappirig guideline. And because any error with respect to the calculation of Kruger’s criminal history would not have affected his advisory sentencing range, we need not decide; whether the district court committed plain error in assigning the particular criminal history points that Kruger challenges.

We begin with the enhancement for use of a weapon in connection with the kidnapping. In order to show that the district court committed plain error which entitles him to relief, Kruger bears the burden of showing that the district court (1) committed error; (2) that is plain, in the sense that it is obvious in retrospect, Olano, 507 U.S. at 734, 113 S.Ct. at 1777; United States v. Hamad, 809 F.3d 898, 904 (7th Cir. 2016); and (3) that the error affects his substantial rights, in the sense that it made a difference to the outcome (in this case, his sentence), Olano, 507 U.S. at 734, 113 S.Ct. 1777-78; Hamad, 809 F.3d at 904. If he satisfies those criteria, then we as the reviewing court must consider whether the error “seriously affects the fairness, integrity, or public reputation of judicial proceedings,” such that it warrants the exercise of our discretion to correct the error. Olano, 507 U.S. at 732, 113 S.Ct. at 1776 (internal bracketing, quotation marks, and citations omitted); see also United States v. Ramirez, 182 F.3d 544, 547 (7th Cir. 1999). See also Molinar-Mar-tinez, 136 S.Ct. at 1343.

Guidelines section 2A4.1(b)(3) calls for a two-point enhancement if a dangerous weapon was used in connection with a kidnapping. Application note 2 to this guideline states, “ ‘A dangerous weapon was used’ means that a firearm was discharged, or a ‘firearm’ or ‘dangerous weapon’ was ‘otherwise used’ (as defined in the Commentary to § 1B1.1 (Application Instructions)).” There is a parallel provision in the robbery guideline that likewise references section 1B1.1. See U.S.S.G. § 2B3.1(b)(2)(D) & comment. (n.l). Application note 1(1) to section 1B1.1 in turn instructs that “otherwise used” in conjunction with a firearm “means that the conduct did not amount to the discharge of a firearm but was more than brandishing, displaying, or possessing a firearm or other dangerous weapon.” The term “brandished” is in turn defined to “mean[ ] that all or part of the weapon was displayed, or the presence of the weapon was otherwise made known to another person, in order to intimidate that person, regardless of whether the weapon was directly visible to that person.” § 1B1.1, comment. (n.l(C)). As we noted above, when Kruger kidnapped Walter Reidl, he took both a shotgun and handgun with him in the truck, placing the handgun in his lap. Kruger argues that the placement of the gun in his lap at worst amounted to brandishing of the firearm (and possibly only displaying) but did not rise to the level of “use” of the firearm.

The district court committed no obvious error in finding that Kruger otherwise used a firearm in kidnapping Walter. As we have previously acknowledged, the language of the relevant guidelines and the accompanying commentary provides no clear guidance on what will distinguish mere brandishing of a weapon from other use, short of actual discharge of the weapon, that will qualify for the enhancement. United States v. Eubanks, 593 F.3d 645, 650 (7th Cir. 2010) (citing United States v. Hernandez, 106 F.3d 737, 741 (7th Cir. 1997)). Our cases have looked for conduct that “create[s] a personalized threat of harm,” Eubanks, 593 F.3d at 651 (quoting United States v. Warren, 279 F.3d 561, 563 (7th Cir. 2002)) (bracketing ours); see also United States v. Taylor, 135 F.3d 478, 483 (7th Cir. 1998), as when the defendant levels a gun at a specific individual and in some way conveys a threat, explicit or implicit, that he will inflict harm on that person if she does not cooperate with him, Hernandez, 106 F.3d at 741. See Eubanks, 593 F.3d at 651 (defendant pointed gun at specific jewelry store employee and forced employee to ground); Warren, 279 F.3d at 563 (defendant grabbed bank teller by arm, put gun in her back, ordered her into vault room, and told her he did not wish to hurt her); Taylor, 135 F.3d at 483 (defendant poked bank teller in back with gun after he told her to open safe and she hesitated); Hernandez, 106 F.3d at 741 (defendant and his accomplices forcibly kidnapped victim and held him at gunpoint); United States v. Seavoy, 995 F.2d 1414, 1422 (7th Cir. 1993) (defendant pointed firearm at faces and heads of bank tellers and customers and ordered them to ground, and was overheard threatening their lives to an accomplice).

In this case, one could plausibly conclude that Kruger’s actions leading up to and during the kidnapping created a specific threat of harm to Walter Reidl in order to secure his cooperation. True, there is no evidence that, as Kruger and Walter left the farm in Walter’s truck or at any point thereafter, Kruger pointed the gun specifically at Walter and/or expressly threatened to shoot him if he did not follow Kruger’s orders. But as we pointed out at argument, it is inappropriate to isolate the kidnapping phase of the encounter between Kruger and the Reidls from the broader res gestae. On arrival at the Reidls’ farm, Kruger had pointed the gun at Mrs. Reidl, implicitly threatening her life. After Walter arrived on the scene and the three of them were discussing religion, Kruger expressly threatened to kill both Mr. and Mrs. Reidl as well as himself. It was against that backdrop that Walter suggested he go with Kruger to Blooming-ton—he wanted Kruger to leave his wife behind in safety. Kruger agreed, but he took both the rifle and the handgun with them in Walter’s truck, and kept the handgun at the ready in his lap. Given what had transpired, Walter would have understood that his life remained in danger as the two departed the farm. More to the point, Walter (and anyone in his position) would have understood the visible presence of the gun in Kruger’s lap as communicating a continuing threat to harm him if he did not cooperate. There is no question that Kruger had Walter under his control: Walter at one point asked to be let go and Kruger refused. Only when he took refuge in the taxidermy shop after being sent to obtain more soda for Kruger was he able to escape. Under these circumstances, the district court committed no obvious error in finding that Kruger did not simply brandish a weapon during the kidnapping, but overtly used the firearm to intimidate Walter and convey an implicit threat to harm him (echoing the express threats he had made earlier) if Walter attempted to escape or did not comply with Kruger’s orders.

With that point settled, we turn to the criminal history points that Kruger maintains were assigned to him in error. As we noted above, Kruger was assessed one criminal history point for a Wisconsin case in which Kruger was convicted of operating a motor vehicle on September 10, 2013, while under the influence of a controlled substance. R. 127 ¶ 84. He argues that this was erroneously treated as part of his prior criminal history when, in fact, the underlying conduct was part of the offense of conviction in this case. Kruger was assessed an additional two points pursuant to Guidelines section 4Al.l(d) because the offense conduct charged in Count Two—the possession of the rifle and ammunition between August 14 and August 28, 2013— occurred while he was still serving a criminal justice sentence (including probation) on a prior conviction. R. 127 ¶ 87; see R. 138 at 4; R. 140 at 4-5. This was error, Kruger maintains, because he was discharged from probation on the prior offense (a disorderly conduct conviction) on August 16, 2013, and the record does not confirm that any portion of the offense charged in Count Two—or anything that might, qualify as relevant conduct—actually occurred prior to August 16.

Even if Kruger were correct that all three of these points were assigned in error, however, it would have no effect on his advisory sentencing range. Recall that Kruger’s adjusted offense level of 38, coupled with a criminal history category of III, produced a sentencing range of 292 to 365 months. But because that range exceeded the statutory maximum term of 240 months, the statutory maximum became the Guidelines sentencing range. U.S.S.G. §§ 5Gl.l(a); 5G1.2(d). As the parties agree, only if Kruger were to succeed on all of the issues he has raised in this appeal would the advisory Guidelines range drop even partially below 240 months. (If his adjusted offense level were 36, and his criminal history category II, the range would be 210 to 262 months, with the statutory maximum capping the upper end of that range at 240 months.) But we have already concluded that it was not plainly erroneous for the district court to apply the two-level enhancement for use of a weapon in conjunction with the kidnapping; and that is the only challenge that Kruger has made to his offense level. Even if we went on to find error with respect to each of the three criminal history points he has challenged, such that his criminal history category would drop to II, his sentencing range, although it would drop to 262 to 327 months, would remain substantially above the statutory maximum. Consequently, his advisory sentencing range would remain at 240 months— precisely the same range that the district court consulted in arriving at an appropriate sentence for Kruger. The district court of course imposed a sentence substantially lower than that (180 months); but the point is that its reference point—the advisory Guidelines range—was exactly the same as it would have been if Kruger’s criminal history category were II rather than III.

In short, Kruger has not shown that he was prejudiced by any error in the assessment of his criminal history category. As any such error did not affect the advisory sentencing range, there is no likelihood that he would have received a different sentence absent the error. Compare Molinor-Martinez, supra, 136 S.Ct. at 1345 (application of incorrect sentencing range resulting from forfeited error normally is sufficient by itself to establish substantial prejudice); and United States v. Paz-Giron, 2016 WL 4376495, at *3 (7th Cir.-Aug. 17, 2016) (miscalculation of sentencing range is ordinarily sufficient to establish prejudice for purposes of plain-error review); with United States v. Fletcher, 763 F.3d 711, 718 (7th Cir. 2014) (any ex post facto error that district court may have committed in relying on more punitive version of Guidelines post-dating defendant’s offense to calculate his sentencing range was harmless; “[bjecause the court was constrained by the statutory maximum under either version of the guidelines, any error in calculating the range for Count I could not have affected the district court’s choice of a sentence ... ”).

III.

For the foregoing reasons, we AFFIRM Kruger’s sentence.

      . Hours earlier, Kruger had been spotted driving in the wrong direction on a one-way street in Platteville, Wisconsin. A police officer made an effort to pull him over, but Kruger sped away without stopping.

      . The definition concludes with the observation that "although the dangerous weapon does not have to be directly visible, the weapon must be present.” § 1B1.1, comment. (n.1(C)).

      .In his written challenges to the pre-sentence report, Kruger did offer a "clarification,” noting that the basis for the additional two history points emanated from relevant conduct rather than from the conduct charged in Count II itself. R. 125 at 2 ¶ 86. (The district court characterized this clarification as an objection, R. 138 at 4; R. 140 at 5, but that is .not how Kruger himself labeled it.) Kruger now argues on appeal that the conduct charged in Count I of the superseding indictment, relating to his purchase and possession of the rifle and ammunition in June, does not constitute relevant conduct vis-á-vis his possession of the same gun and ammunition the following August as charged in Count II, as the district court evidently assumed. This was not an argument he made below. Even if we deemed his clarification (and the district court’s treatment of it) sufficient to have preserved this point, it would not be necessary for us to resolve his argument on its merits, for the same reasons we discuss below,

      ."CT]he Guidelines are to be the sentencing court’s 'starting point and ... initial benchmark.’ ” Molina-Martinez, supra, 136 S.Ct. at 1345 (quoting Gall, supra, 552 U.S. at 49, 128 S.Ct. at 596).


source: Caselaw Access Project

author: POSNER, Circuit judge.

license: Public Domain

text:
    UNITED STATES of America, Plaintiff-Appellee, v. Justin WYKOFF, Defendant-Appellant.
    No. 16-1307
    United States Court of Appeals, Seventh Circuit.
    Submitted September 7, 2016
    Decided October 6, 2016

      Debra G. Richards, Shelese M. Woods, Attorneys, Office of the United States Attorney, Indianapolis, IN, for Plaintiff-Ap-pellee.
    Justin Wykoff, Federal Prison Camp, Montgomery, AL, for Defendant-Appellant.
    Before WOOD, Chief Judge, and POSNER and EASTERBROOK, Circuit Judges.
   POSNER, Circuit judge.

Justin Wykoff pleaded- guilty to wire-fraud charges growing out of his having solicited bribes and kickbacks while a Bloomington, Indiana, official. The district judge sentenced him to 55 months in prison and to pay restitution of $446,335 to Bloomington and a $1,100 assessment, with both payments “to begin immediately.” The judge added what she called a “special instruction”: “Any unpaid restitution balance during the term of supervision [i.e., the period following release from prison when the defendant would be subject to the conditions of supervised release imposed by the judge at sentencing] shall be paid at a rate of not less than 10% of the defendant’s gross monthly income.”

Soon after the entry of judgment, the government applied to the judge for a writ of garnishment pursuant to 28 U.S.C. § 3205(b)(1). The judge issued the writ to the Indiana pension system because it had an account in Wykoff s name (for remember that he’d been an Indiana official) worth $47,937. Wykoff requested a hearing under 28 U.S.C. § 3202(d) to determine whether any of the money in the account was exempt. In addition he opposed garnishment on the ground that he had already forfeited two of his homes and the government had seized money from his prison account, and although these assets were not enough to pay all the restitution he owed he argued that the balance should be deferred to his release. He based the argument on the judge’s “special instruction,” which he interpreted as limiting his restitution payments to 10 percent of his monthly income. But the instruction doesn’t say that; it says that 10 percent is the minimum amount he must pay to complete restitution. United States v. Fariduddin, 469 F.3d 1111, 1113 (7th Cir. 2006).

In fact he has no legal leg to stand on. The federal criminal code requires that restitution be paid immediately unless the district court provides otherwise, 18 U.S.C. § 3572(d)(1), which it did not. In United States v. Sawyer, 521 F.3d 792, 795 (7th Cir. 2008), we pointed out that at the start of incarceration “any existing assets should be seized promptly. If the restitution debt exceeds a felon’s wealth, then the Mandatory Victim Restitution Act of 1996, 18 U.S.C. §§ 3663A, 3664, demands that this wealth be handed over immediately.” This is an important rule—for who knows what might happen to Wykoffs assets during his years of imprisonment. He or members of his family or for that matter the Indiana state pension fund might decide that there are better things to do with those not inconsiderable assets than give them to Bloomington.

In short, his claim is groundless, and so the district court’s judgment is

AFFIRMED.


text:
    Daniel DIEDRICH and Natalie Diedrich, Plaintiffs-Appellants, v. OCWEN LOAN SERVICING, LLC, Defendant-Appellee.
    No. 15-2573
    United States Court of Appeals, Seventh Circuit.
    Argued January 5, 2016
    Decided October 6, 2016

      Briane F. Pagel, Jr., Attorney, Kerkman & Dunn, Milwaukee, WI, for Plaintiffs-Appellants.
    Emilie K. Edling, Attorney, Houser & Allison, APC, Portland, OR, for Defendant-Appellee.
    Before WOOD, Chief Judge, and KANNE and ROVNER, Circuit Judges.
   ROVNER, Circuit Judge.

The Real Estate Settlement Procedures Act (RESPA) sets forth specific procedures that a mortgage lender or mortgage servicing company must follow in response to a borrower’s request for information. Ocwen Loan Servicing, LLC failed to follow the letter of the procedure when responding to the plaintiffs Daniel and Natalie Diedrichs’ request for information. The Diedrichs sued, but the district court granted summary judgment for Ocwen, finding that the Diedrichs had failed to set forth sufficient facts, which, if taken as true, would establish that they were injured by the RESPA violation. The Died-richs appealed and we affirm.

I.

In 2007, Natalie and Daniel Diedrich executed a note to Decision One Mortgage Company in the amount of $184,000. To secure the note, they executed a mortgage. At the time of the relevant events, Ocwen serviced the Diedrichs’ loan. Ocwen began foreclosure proceedings in September, 2010. The Diedrichs dispute that they defaulted under the terms and conditions of the note and mortgage, but that is not the subject of the dispute in this case. Ocwen and the Diedrichs entered into a loan modification agreement dated May 20, 2011, which was to be implemented beginning July 1, 2011. After the Diedrichs began making payments pursuant to the loan modification agreement, they alleged that they became concerned about whether their escrow account was being correctly administered and whether they were being charged improper litigation fees.

On or around February 22, 2013, the Diedrichs sent Ocwen a letter in which they requested eight types of standard information about them account including the names of employees working on their account, the history of payments made from their escrow account including the date, amount and payee, a statement of interest rates applied to their account, and other general inquiries. (R. 37-3, p.35). Neither party disputes that this letter constituted a qualified written request for information under RESPA, 12 U.S.C. § 2605(e)(1)(B). In a letter dated March 7, 2013, Ocwen responded to the Diedrichs’ request with a form letter that set forth its policies regarding how and when it would respond to requests for information, but it did not directly respond with the information requested. Id. p.38. Ocwen sent another later dated March 30, 2013, stating that it would take another fifteen days, as permitted by RESPA, to review the inquiry. Id. p.39. Finally, on April 22, 2013, Ocwen sent the Diedrichs a letter stating that it could not identify a problem with their account and asking the Diedrichs to send another letter identifying which month and report they disputed, the explanation for the dispute, and all evidence showing that payment for the month was received on time or that the information reported was incorrect. Id. p.40.

Based on Ocwen’s failure to respond to their request for information, the Died-richs filed a complaint against Ocwen alleging violations of Wisconsin laws regarding mortgage loans (Wise. Stat. § 224.77 and § 138.052) and the federal Real Estate Settlement Procedures Act, 12 U.S.C. §§ 2605(e)(1) & (2), which sets forth in specific detail how a mortgage servicer such as Ocwen must respond to such an information request. The parties consented to disposition by the magistrate judge who granted Oewen’s motion to dismiss the claim under Wisconsin statute, § 138.052(7s)(a) and 12 U.S.C. § 2605(e)(1). That left in play RESPA § 2605(e)(2) and Wisconsin statutes § 224.77(1), and § 138.052(7) which became the subjects of dueling cross motions for summary judgment before a second magistrate judge.

RESPA § 2605(e)(2) requires a lender to respond to a qualified written request for information from a borrower within a particular time frame and in a particular manner. Wisconsin statute § 224.77(1) essentially points back to the alleged RES-PA violation by prohibiting mortgage bankers and brokers from violating any federal statute that regulates their practice. Wise. Stat. § 224.77(l)(k). Both parties moved for summary judgment on these remaining claims, and the magistrate judge granted Ocwen’s motion for summary judgment on all counts. The district court found that Ocwen’s responses to the written inquiries were insufficient and therefore violated the RESPA requirements, but the court determined that the Diedrichs’ allegations of damages were “conclusory and vague” and that they had “failed to come forth with any evidence that would connect their alleged [injury] to Ocwen’s failure to respond to their qualified written request for information.” Order at 14 (R. 59, p.14). The district court also dismissed the claim under Wisconsin law for the same reason, that is, that the Diedrichs failed to establish they were an aggrieved party as required under the Wisconsin statute. Order at 19 (R. 59, p.19). After filing an unsuccessful motion for reconsideration pursuant to Federal Rules of Civil Procedure 59(e) and 60(b)(6), the Diedrichs appealed and we affirm.

II.

A.

We begin, as we always must, with the question of standing. The jurisdiction of federal courts is limited to “Cases” and “Controversies” as described in Article III, Section 2 of the Constitution. There is' no case or controversy if the plaintiff lacks standing to challenge the defendant’s alleged misconduct. Lujan v. Defenders of Wildlife, 504 U.S. 555, 560, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992). In order to have standing, “[t]he plaintiff must have (1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to be redressed by a favorable judicial decision.” Spokeo, Inc. v. Robins, — U.S. -, 136 S,Ct. 1540, 1547, 194 L.Ed.2d 635 (2016) (citing Lujan, 504 U.S. at 560-61, 112 S.Ct. 2130).

The plaintiff has the burden of establishing these elements and must support éach element “with the manner and degree of evidence required at the successive stages of the litigation.” Lujan, 504 U.S. at 561, 112 S.Ct. 2130. The Supreme Court elaborated as follows:

At the pleading stage, general factual allegations of injury resulting from the defendant’s conduct may suffice, for on a motion to dismiss we “presum[e] that general allegations embrace those specific facts that are necessary to support the claim.” In response to a summary judgment motion, however, the plaintiff can no longer rest on such “mere allegations,” but must “set forth” by affidavit or other evidence “specific facts,” which for purposes of the summary judgment motion will be taken to be true.

Lujan, 604 U.S. at 561, 112 S.Ct. 2130 (internal citations omitted). In short, for purposes of demonstrating whether the plaintiffs have standing to assert their claims before this court, we look to see whether they have set forth sufficient factual allegations supporting their claim that they suffered an injury in fact, that was fairly traceable to Ocwen’s violation of the RESPA statute. See Id. at 560-61, 112 S.Ct. 2130.

Whether raised by the parties or not, a court must assure itself that the plaintiff has standing, such that there exists a case or controversy as required by Article III of the Constitution. See Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 94, 118 S.Ct. 1003, 140 L.Ed.2d 210 (1998). Consequently, we asked the parties to submit supplemental briefing on the issue of standing in light of the Supreme Court’s recent decision in Spokeo, Inc. v. Robins, — U.S.-, 136 S.Ct. 1540, 194 L.Ed.2d 635 (2016),.which was issued after the completion of briefing in this case. In Spokeo, the Supreme Court clarified the requirements for standing set forth in Lu-jan and noted that the injury must be concrete—that is “de facto ... it must actually exist.” Spokeo, 136 S.Ct. at 1548. The' Court elaborated that “concrete” is not necessarily “tangible,” but a plaintiff cannot “allege a bare procedural violation, divorced from any concrete harm, and satisfy the injury-in-fact requirement of Article III.” Id. at 1549.

In order to survive dismissal for lack of standing, the plaintiffs’ complaint must contain sufficient factual allegations of an injury resulting from the defendants’ conduct, accepted as true, to state a claim for relief that is plausible on its face. Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009), citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). The alleged injury must be concrete and not just a procedural violation divorced from any harm. Spokeo, 136 S.Ct. at 1548.

The requirement of facial plausibility means “enough to raise a right to relief above the speculative level.” Twombly, 550 U.S. at 555, 127 S.Ct. 1955. “The plausibility standard is not akin to a ‘probability requirement,’ but it asks for more than a sheer possibility that a defendant has acted unlawfully.” Iqbal, 556 U.S. at 678, 129 S.Ct. 1937. “[A] well-pleaded complaint may proceed even if it strikes a savvy judge that actual proof of those facts is improbable, and that a recovery is very remote and unlikely.” Twombly, 550 U.S. at 556, 127 S.Ct. 1955 (internal .citations omitted). Legal conclusions or bare and conclusory allegations, however, are insufficient to state a claim. Iqbal, 556 U.S. at 678, 680, 129 S.Ct. 1937. Nevertheless, even with the heightened pleading requirements of Iqbal and Twombly, Dae pleading requirements to survive a challenge to a motion to dismiss remain low.

In this case, the injury requirement for standing overlaps with the injury requirement under the statute. In other words, as the court explained in Spokeo, the plaintiffs must have suffered 'a concrete injury in order to allege standing as a constitutional matter. Spokeo, 136 S.Ct. at 1548. And in this case, the statute does not grant statutory damages for bare procedural violations; it requires an actual injury. Consequently, there is no need to perform a separate Spokeo analysis to demonstrate whether a procedural injury alleged under the statute is sufficiently concrete to pass muster for Article III standing. The injury must be “actual,” both for standing purposes and for purposes of the statute.

The RESPA section at issue, 12 U.S.C. § 2605, imposes a duty on loan servicers to respond to borrower inquiries. The district court found that Ocwen “violated RE SPA by failing to properly respond to the Diedrichs’ qualified written request for information.” Order at 19 (R. 59, p. 19). Ocwen does not dispute this portion of the court’s finding. The district court, however, found that “the Diedrichs have failed to put forth evidence of damages stemming from the violation.” Id. If they have no injury under the statute, then they fail the first part of the requirement for standing.

The remedy portion of the statute indicates that the statute was intended to redress actual .damages caused by the failure of the loan servicer to provide information to the borrower. It states as follows:

(f) Damages and costs
Whoever fails to comply with any provision of this section shall be liable to the borrower for each such failure in the following amounts:
(1) Individuals
In the case of any action by an individual, an amount equal to the sum of—
(A) any actual damages to the borrower as a result of the failure; and
(B) any additional damages, as the court may allow, in the case of a pattern or practice of noncompliance with the requirements of this section, in an amount not to exceed $2,000.

12 U.S.C. § 2605(f).

In this case, the Diedrichs alleged in their complaint the following:

34. As a direct result of the pattern of errors and negligence that culminated in Ocwen’s failure to provide a timely answer to the Diedrichs’ borrower inquiry, the Diedrichs have suffered damage to their credit. Additionally, they have been forced to pay Ocwen more money and higher interest rates than they were required by law or by the terms of their loan modification agreement to pay.
⅜ ⅜ ⅜
46. As a direct result of Ocwen’s failure to keep the Diedrichs informed of their account information and reasonably investigate the errors in their account, the Diedrichs suffered damage to their credit. Additionally, they have been forced to pay Ocwen greater payments and a higher interest rate than that negotiated in their loan modification. .

(R. 1, p.5 & 6-7).

These are allegations of a concrete injury stemming from the defendant’s conduct and therefore the complaint meets the bare minimum requirement to allege standing and avoid dismissal on the pleadings. See Twombly, 550 U.S. at 570, 127 S.Ct. 1955; Spokeo, 136 S.Ct. at 1548. The plaintiffs have met the minimal requirements for pleading even if it strikes us “that actual proof of those facts is improbable, and that a recovery is very remote and unlikely.” Twombly, 550 U.S. at 556, 127 S.Ct. 1955. In other words, they have sufficiently alleged an injury for purposes of standing, even if those allegations are not sufficient to survive summary judgment.

Ocwen points us to a New York district court decision that considered the same section of RESPA (although a different subsection on the merits, the remedy section was the same) and concluded that the plaintiffs injury was a mere procedural violation unlinked to actual damages. Dolan v. Select Portfolio Servicing, No. 03-CV-3285 PKC AKT, 2016 WL 4099109, at *5 (E.D.N.Y. Aug. 2, 2016). In Dolan, the plaintiff alleged a violation of a different subsection of RESPA—section 2605, subsections (b) and (c), which require mortgage loan servicers to provide certain information in so-called “hello” and “goodbye” letters when a loan is transferred. The remedy section for a violation of that subsection is the same remedy section for this case, § 2605(f). The holding in Dolan, however, supports our holding here, as that court held that “the plain language of Section 2605 indicates that an allegation of actual damages is necessary to state a claim for liability.” Dolan, 2016 WL 4099109, at *5. Unlike in this case, however, the plaintiff borrower in Dolan made clear that his claims were based solely on the bare procedural statutory violations of sections 2605(b) and (c). His lawyer stated at oral argument that his client “gets to recover solely based on the violation of the RESPA statute that [he is] alleging” and “[he] do[es]n’t have to [] show any injury beyond that.” Dolan, 2016 WL 4099109, at *6. After Spok-eo, this is clearly no longer the case; a plaintiff must allege a concrete injury for standing purposes.

In this case, however, the plaintiffs have alleged that they have suffered damage to their credit and been forced to pay Ocwen greater payments and a higher interest rate. These are allegations of concrete injuries and as such are sufficient to allege standing under Twombly, Iqbal and Spok-eo. Whether the allegations are sufficient to overcome a motion for summary judgment is a different matter entirely.

B.

The Diedrichs have adequately alleged an injury for purposes of standing. This opens the door of the courtroom to them, but no more. Alleging injury for purposes of standing is not the same as submitting adequate evidence of injury under the statute to survive a motion for summary judgment. Upon a motion for summary judgment, we examine the record in the light most favorable to the Diedrichs and grant the motion if there are no genuine disputes of material fact and Ocwen is entitled to judgment as a matter of law. Yahnke v. Kane Cty., Illinois, 823 F.3d 1066, 1070 (7th Cir. 2016). It is the Diedrichs’ burden to produce evidence sufficient to demonstrate a violation of the statute. “To survive summary judgment, the nonmoving party must show evidence sufficient to establish every element that is essential to its claim and for which it will bear the burden of proof at trial.” Life Plans, Inc. v. Sec. Life of Denver Ins. Co., 800 F,3d 343, 349 (7th Cir. 2015) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct 2548, 91 L.Ed.2d 265 (1986)). The Diedrichs, therefore, had to come forward with evidence sufficient to support an award of actual damages to pursue their RESPA claims. Catalan v. GMAC Mortgage Corp., 629 F.3d 676 (7th Cir. 2011). In other words, taking the Diedrichs’ facts as true, they must allege enough to demonstrate, not just that Ocwen was responsible for these injuries, but specifically, that Ocwen’s failures to comply with RESPA section 2605(e)(2) caused their injury. We review the district court’s decision to grant a motion for summary judgment de novo. Yahnke, 823 F.3d at 1070.

The Diedrichs set forth a number of allegations about injury—that their credit was damaged, that they were denied credit, and that they were unable to seek refinancing. For these propositions, they cited to the deposition testimony of Daniel and Natalie Diedrich. Natalie Diedrich testified to her damages as follows:

Q. What is your injury as a result of Ocwen’s actions?
A. As a result of Ocwen’s actions over the whole time period?
Q. Since the implementation of the loan modification.
A. They have harmed my ability to take out any loans. They’ve ruined my chances of helping my kids through college.
Q. Why are you unable to take out other loans?
A. I’m unable to take out any loans due to this—my credit being destroyed.
Q. And then beyond the credit reporting and your inability to take out loans, what are other injuries that you’ve sustained? It doesn’t mean—a broad term meaning—
A. Multiple. Financial burden, the whole having the legal issues, the stress of dealing with this every single month. There’s multiple things.

(R. 37-3 p.ll) (Natalie Diedrich Dep. p.39:12-41:8). Daniel Diedrich added the following:

We have things we need to fix on our home that I can’t afford to fix now. We needed a new vehicle; we’re paying high interest on that because of our credit rating. Our children’s college funds that we’re not able to help with. No vacation because I can’t miss work, because I need to work because I don’t get paid vacations ... dealing with [my wife] because of what she’s going through becomes very stressful on our relationship.

(R. 49-4, p. 5) (Daniel Diedrich Dep. p.15: 14-24).

Even taking all of the Diedrichs’ facts as true, however, they simply have not alleged any causal connection between the injury they allege, including the claim for emotional damages, and Ocwen’s failure to respond to the qualified written request for information, as opposed to the foreclosure on their loan, the loan modification process, or the litigation in general. In fact, Natalie testified that her negative credit reporting was due to the foreclosure action:

Q. Was your credit, the negative credit reporting, due to prior to [sic] the loan modification?
A. Due to them foreclosing on my home.
Q. Okay. Or the foreclosure action?
A. Yeah.

(R. 37-3 p.ll) (Natalie Diedrich Dep. p.39:25~40:4). Likewise, her other testimony implied that the loan foreclosure process, the loan modification process, and the litigation were primarily to blame, or at the very least it was the “whole entire issue with Ocwen,” Id. at 12, (Natalie Diedrich Dep. p.42:15-16). Even in its most helpful parts, Natalie Diedrich’s testimony says nothing about how Ocwen’s failure to provide the specific information requested under RESPA § 2505(e)(2) (as opposed to the lawsuit or the foreclosure) caused the injury:

Q. So what are your damages based on? What calculation?
A. Based on all the things I’ve been denied since this whole thing started. Based on the stress and everything that this whole entire issue with Ocwen has caused us over the last three years.
* * *
Q. And then you indicate in your initial disclosures that you have $250,000 in distress and suffering. What is the basis for that amount?
A. The basis is everything that Ocwen has put us through over the three years of this lawsuit.
⅜ * *
Q. Do you have any documentation that quantifies your $250,000 in distress and suffering?
A. Yes.
Q. What is that?
A. There would be multiple things. Loan denials; like I said, being unable to support my two children in helping with their college education due to this; being unable to take out any loans to even repair our home or do anything since this all started. And, like I said, the stress and the having to constantly worry about this monthly, and to have to have an attorney continuously for every day of my life.

(R. 37-3 pp.12-13) (Natalie Diedrich Dep. p.42:ll~16, p.45:2-7, and p.45:16-p.46:3).

Daniel testified that the damages were for “missing work” and “stress” but that the number was not based on any specific actual expenses, but simply a number decided upon by himself, his wife, and their attorney. (R. 49-4, p. 5-6) (Daniel Diedrich Dep. p.l6:18-20, p,17:22-p.l8:14).

In fact, Oewen’s response to the January 2012 inquiry demonstrated that the Diedrichs’ loan was reported as current. (R. 37-1, p.53). And so “Everything that Ocwen has put [them] through” is most likely to include the foreclosure proceedings, the loan modification process, and the lawsuit. The Diedrichs have not set forth any allegations of wrongdoing related to foreclosure proceedings or the loan modification process, and as the district court concluded, “simply having to file suit, however, does not ‘suffice as a harm warranting actual damages.’ ” Order at 17 (R. 59, p.19) (citing Lal v. Am. Home Servicing, Inc., 680 F.Supp.2d 1218, 1223 (E.D. Cal. 2010); Konieczka v. Wachovia Mortgage Corp., No. 11 C 0071, 2012 WL 1049910, at *3 (N.D. Ill. Mar. 28, 2012)).

The Catalan case, upon which the Died-richs rely heavily does not help them, as it says nothing about the manner and extent to which a plaintiff must link her damages to a covered entity’s failure to respond to a qualified request for information. Catalan, 629 F.3d at 676. In Catalan, the district court did indeed find that the plaintiffs’ self-reports of emotional distress stemming from the mortgage company’s actions were sufficient- to survive - a motion for summary judgment. Id. at 696. But the court could not yet determine whether that emotional distress was sufficiently linked to the mortgage company’s-failure to properly respond to the request for information (as opposed to other actions of the mortgage company), as it left it for the district court to determine on remand whether there had, in fact, been a violation of 12 U.S.C. § 2605(e)(2). Id. at 690. (“we leave it to the district court to resolve on remand whether. GMAC Mortgage satisfied its obligations to investigate and respond under 12 U.S.C. §§ 2605(e)(1)(A) and 2605(e)(2)”). Catalan does not, therefore, reveal what amount of evidence is sufficient to link an injury to a mortgage company’s failure to respond properly to a qualified request for information. But whatever amount ■ is required,, surely a statement that the injury was caused by “everything that Ocwen has put us through over three years of this lawsuit,” (R. 37-1, p. 12, Natalie Diedrich Dep. at 45:5-7) is not sufficient, particularly when Ocwen may have taken multiple actions that the Diedrichs might allege are damaging, but that might nevertheless be perfectly legal, such as initiating a foreclosure action, increasing interest rates, initiating a loan modification procedure, and the like.

The district court did not err in determining that, even accepting the Diedrichs’ alleged factual claim that they suffered damages, they failed to put forth evidence sufficient to establish every element that is essential to their claim and for which they would bear the burden of proof at trial. Specifically, they failed to demonstrate the essential element that they were injured specifically by Ocwen’-s inadequate response to a request for information under RESPA § 2605(e)(2).

C.

For the same reasons, the claim under the Wisconsin statute goes down with the federal claim’s ship. Wisconsin statute § 224.77(1) prohibits mortgage bankers and the like from engaging in specific activities. The Diedrichs point specifically to the following three subsections of the statute and argue that it was a violation for Ocwen to:

(k) Violate any provision of this sub-chapter, ch. 138, or any federal or state statute, rule, or regulation that relates to practice as a mortgage banker, mortgage loan originator, or mortgage broker.
(L) Engage in conduct that violates a standard of professional behavior which, through professional experience, has become established for mortgage bankers, mortgage loan originators, or mortgage brokers.
(m) Engage in conduct, whether of the same or a different character than specified elsewhere in this section, that constitutes improper, fraudulent, or dishonest dealing.

Wis. Stat. Ann. § 224.77(l)(k)-(m). Pursuant to Wis. Stat. § 224.80(2), a person “aggrieved” by an act of a mortgage broker that is prohibited under Wisconsin Statute § 224.77(1) can bring a cause of action for damages. Wis. Stat. § 224,80(2). The Wisconsin Supreme Court has clarified that an “aggrieved party” is “one having an interest ... which is injuriously affected.” Liebovich v. Minn. Ins. Co., 310 Wis.2d 751, 751 N.W.2d 764, 775 (2008).

For the very same reasons enunciated in our consideration of the RESPA claim, the district court properly concluded that the Diedrichs had not set forth sufficient evidence to overcome a motion for summary judgment on the state law claim. The Diedrichs failed to meet them burden of setting forth sufficient evidence, taken as true, to demonstrate an injury under Wisconsin law. The district court properly granted Ocwen’s motion for summary judgment on this claim as well as the federal claim and therefore the entire judgment of the district court is AFFIRMED.

      . The parties refer to this alternatively as a borrower information request (Plaintiffs' brief, p.2) or a qualified written request for information (Defendant's brief, p.2).

      . Wise. Stat. § 138.052(7) addresses permissible interest rates. The Diedrichs did not appeal the grant of summary judgment to Ocwen on this claim.

      . The Court dismisses a claim sua sponte under Federal Rule 12(b)(6) using the same standards applied as if it had been a motion to dismiss from the opposing party. See, e.g., Ledford v. Sullivan, 105 F.3d 354, 356 (7th Cir. 1997).

      . The statute, 12 U.S.C.A. § 2605(e)(2), states as follows:
      (e) Duty of loan servicer to respond to borrower inquiries
      (2) Action with respect to inquiry
      Not later than 30 days (excluding legal public holidays, Saturdays, and Sundays) after the receipt from any borrower of any qualified written request under paragraph. (1) and, if applicable, before taking any action with respect to the inquiry of the borrower, the servicer shall—
      (A)make appropriate corrections in the account of the borrower, including the crediting of any late charges or penalties, and transmit to the borrower a written notification of such correction (which shall include the name and telephone number of a representative of the servicer who can provide assistance to the borrower);
      (B) after conducting an investigation, provide the borrower with a written explanation or clarification that includes—
      (i) to the extent applicable, a statement of the reasons for which the servicer believes the account of the borrower is correct as determined by the servicer; and
      (ii) the name and telephone number of an individual employed by, or the office or department of, the servicer who can provide assistance to the borrower; or
      (C) after conducting an investigation, provide the borrower with a written explanation or clarification that includes—
      (i) information requested by the borrower or an explanation of why, the information requested is unavailable or cannot be obtained by the servicer; and
      (ii) the name and telephone number of an individual employed by, or the office or department of, the servicer who can provide assistance to the borrower.


author: POSNER, Circuit Judge.

text:
    ILLINOIS TRANSPORTATION TRADE ASSOCIATION, et al., Plaintiffs-Appellants, v. CITY OF CHICAGO, Defendant-Appellee, and Dan Burgess, et al., Intervening Defendants-Appellees.
    Nos. 16-2009, -2077, & -2980
    United States Court of Appeals, Seventh Circuit.
    Argued September 19, 2016
    Decided October 7, 2016

      Edward W. Feldman, William J. Katt, Melissa Bema Pryor, Michael L. Shakman, Attorneys, Miller, Shakman & Beem LLP, Chicago, IL, for Plaintiffs-Appellants.
    Kerrie Maloney Laytin, Attorney, Office of the Corporation Counsel, Appeals Division, Chicago, IL, Benna Ruth Solomon, Attorney, City of Chicago Law Depart ment, Chicago, IL, for Defendan1>-Appel-lee.
    Robert McNamara, Attorney, Institute for Justice, Arlington, VA, Anthony Brian Sanders, Attorney, Institute for Justice, Minneapolis, MN, for Intervenors-Appel-lees.
    Before POSNER, WILLIAMS, and SYKES, Circuit Judges.
   POSNER, Circuit Judge.

This case, closely parallel to Joe Sanfelippo Cabs, Inc. v. City of Milwaukee, No. 16-1008, also decided today, involves constitutional challenges to the endeavor of a city (Chicago in this case, Milwaukee in the other) to stimulate greater competition in the “for-hire auto transportation market.” That is the market composed of owners of taxicabs that one hails on the street, of lively services, which are usually summoned by phone (as for that matter taxis sometimes are), and of the newer auto-transport services for hire, of which the best known is Uber (the second best known is Lyft); generically these services are known either as Transportation Network Providers (TNPs) or as ridesharing services.

Because the acronym TNPs is not well known, nor the term ridesharing services, but Uber is very well known, we’ll focus on Uber, which “at its core ... is just an app that you download to your smartphone and use to get a nearby Uber driver to come pick you up. While some taxi services are getting on board with these newfangled apps most for-rent cars still wait at the taxi stand or require you to give the service dispatch center a call in advance. Uber doesn’t do that. ... You can only hitch an Uber ride via the service’s app.” Kristen Hall-Geisler, “5 Ways Uber Is Really Different from a Regular Taxi,” http://auto.howstuffworks.com/tech transport/5-ways-uber-really-different-from-regular-taxil.htm (visited Oct. 6, 2016, as was the other website in this opinion). (However, Uber has now added a feature that allows customers to schedule an Uber pickup in advance. See Uber.com, “Scheduled Ride for Extra Peace of Mind,” www.uber.com/infb/scheduled-rides/.) There are other differences, which many consumers consider advantages of Uber over taxis: the storage of payment information, so that one does not need to be carrying cash or a credit card; the ability to see a time estimate of how long a pickup will take and also a driver’s rating by past users; and the ability to request a ride from wherever one is (e.g., from the comfort of home, inside during the rain rather than by hailing on a street).

The plaintiffs are companies that own and operate either taxicabs or livery vehicles in Chicago or that provide services to such companies, such as loans and insurance. Taxi companies are tightly regulated by the City regarding driver and vehicle qualifications, licensing, fares, and insurance; livery companies are also tightly regulated, but we won’t need to discuss them separately. Uber (which remember we’re treating as representative of the TNPs) is less heavily regulated than the taxi and livery companies (until 2014 it wasn’t regulated at all) and has a different business mpdel. For example, you can’t hail an Uber vehicle on the street; you must use a smartphone app to summon an Uber car. Since 2014 Uber and the other TNPs have been governed by an ordinance, but it is different from the ordinances governing taxi and livery services.and more permissive; for example, it allows the companies to set their own fares, and in this and other ways allows them to do by contract some of the things that Chicago ordinances require taxi and livery companies to do.

The plaintiffs challenge the ordinance on seven grounds, of which four are based on the U.S. Constitution and the other three on Illinois law. The district judge dismissed all but the two claims that accuse the City of denying the equal protection of the laws by allowing the TNPs to compete with taxi and livery services without being subject to all the regulations governing those services. The plaintiffs appeal the district judge’s dismissal of five of their claims and the City appeals the judge’s refusal to dismiss the other two as well.

All seven of the plaintiffs’ claims are weak. The first is that allowing the TNPs into the taxi and livery markets has taken away the plaintiffs’ property for a public use without compensating them. A variant of such a claim would have merit had the City confiscated taxi medallions, which are the licenses that authorize the use of an automobile as a taxi. Confiscation of the medallions would amount to confiscation of the taxis: no medallion, no right to own a taxi, Boonstra v. City of Chicago, 214 Ill.App.3d 379, 158 Ill.Dec. 576, 574 N.E.2d 689, 694-95 (1991), though the company might be able to convert the vehicle to another use. Anyway the City is not confiscating any taxi medallions; it is merely exposing the taxicab companies to new competition—competition from Uber and the other TNPs.

“Property” does not include a right to be free from competition. A license to operate a coffee shop doesn’t authorize the licensee to enjoin a tea shop from opening. When property consists of a license to operate in a market in a particular way, it does not carry with it a right to be free from competition in that market. A patent confers an exclusive right to make and sell the patented product, but no right to prevent a competitor from inventing a noninfringing substitute product that erodes the paten-tee’s profits. Indeed when new technologies, or new business methods, appear, a common result is the decline or even disappearance of the old. Were the . old deemed to have a constitutional right to preclude the entry of the new into the markets of the old, economic progress might grind -to a halt. Instead of taxis we might have horse and buggies; instead of the telephone, the telegraph; instead of computers, slide rules. Obsolescence would equal entitlement.

Taxi medallions authorize the owners to own and operate taxis, not to exclude competing transportation services. The plaintiffs in this case cannot exclude competition from buses or trains or bicycles or liveries •oí chartered sightseeing vehicles or jitney buses or walking; indeed they cannot exclude conlpetition from taxicab newcomers, for the City has reserved the right (which the plaintiffs don’t challenge) to issue additional tax medallions. Why then should the plaintiffs be allowed' to exclude competition from Uber? To this question they offer no answer.

All that the City give's taxi-medallion owners is the right to operate taxicabs in Chicago, see Municipal Code of Chicago § 9-112-020(b) (a parallel provision, § 9-114-020(b), governs liveries). That isn’t' a right to exclude competitive providers of transportation. As pointed out in Boston Taxi Owners Ass’n, Inc. v. City of Boston, 180 F.Supp.3d 108, 117, 2016 WL 1274631, at *5 (D. Máss. March 31, 2016), “if a person who wishes to operate a taxicab without a medallion is prevented from doing so, it is because he or she would violate municipal regulations, not because he or she would violate medallion owners’ property rights.” Section 9-112-020(b) of the Municipal Code, cited above, which has been on the books since 1963, entitles the medallion owners to be the exclusive providers of taxi service, but not to exclude alternatives to the service they offer. The City has created .a property right in taxi medallions; it has not created a property right in all commercial transportation of persons by automobile in Chicago.

The plaintiffs continue to receive some insulation from competition, because they alone are permitted to operate taxicabs in Chicago. Taxicabs are preferred to Uber and other TNPs by many riders, because you don’t have to use an app to summon them—you just wave at one that drives toward you on the street—and also because the fares are. fixed by the City.

The plaintiffs argue that the City has discriminated against them by failing to subject Uber and the other TNPs to the same rules about licensing and fares (remember that taxi fares are set by the City) that the taxi ordinance subjects the plaintiffs to. That is an anticompetitive argument. Its premise is that every new entrant into a market should be forced to comply with every -regulation applicable to incumbents in the market with whom the new entrant will be competing.

■Here’s an analogy: Most cities and towns require dogs but not cats to be licensed. There are differences between the animals. Dogs on average are bigger, stronger, and more aggressive than cats, are feared by more people, can give people serious bites, and make a lot of noise outdoors, barking and howling. Feral cats generally are innocuous, and many pet cats are confined indoors. Dog owners, other than those who own cats as well, would like cats to have to be licensed, but do not argue that the failure of government to require that the “competing” animal be licensed deprives the dog owners of a constitutionally protected. property right, or alternatively that it subjects them to unconstitutional discrimination. The plaintiffs in the present case have no stronger argument for requiring that Uber and the .other TNPs be subjected to the same licen-sure scheme as the taxi owners. Just as some people prefer cats to dogs, some people prefer Uber to Yellow Cab, Flash Cab, Checker Cab, et al. They prefer one business model to another. The City wants to encourage this competition, rather than stifle it as urged by the plaintiffs, who are taxi owners.

So there is no merit to the plaintiffs’ claim that the City has taken property from them without compensation, and there is also no need to discuss four of their six other claims, which whether based on the Constitution or on Illinois common law add nothing to the takings claim. The two additional claims we do need to discuss are the equal protection claims, because those are the claims that the district judge thought had sufficient potential merit to survive a motion to dismiss. She ruled that the City, by failing to place as many regulatory burdens on the TNPs as on the taxicab companies, might have denied the latter the equal protection of the law. But this was taking equal protection literally, and it should not be taken so. Otherwise prospective entrants to a market who had lower costs than incumbent firms would not be allowed to enter the market unless some regulatory entity burdened the new entrants with regulations, whether or not necessary or even appropriate, that eliminated any cost advantage the new entrants would otherwise have in competing with the incumbent firms. The imposition of such an impediment to competition and disservice to consumers would be absurd.

The proper question to ask regarding equal protection is whether the regulatory differences between Chicago taxicabs and Chicago TNPs are arbitrary or defensible, and the City makes a compelling case that they’re the latter. Taxis but not TNPs are permitted to take on as passengers persons who hail them on the street. Rarely will the passenger have a prior relationship with the driver, and often not with the taxicab company either; and it makes sense therefore for the City to try to protect passengers by screening the taxi drivers to assure that they’re competent and by imposing a uniform system of rates based on time or distance or both. So taxi service is regulated by the City of Chicago, but so is TNP service, though differently because the service is different from taxi service. A major difference is that customers, rather than being able to hail an Uber car, must sign up with Uber before being able to summon it, and the sign up creates a contractual relationship specifying such terms as fares, driver qualifications, insurance, and any special need of the potential customer owing to his or her having a disability. Unlike taxicab service Uber assumes primary responsibility for screening potential drivers and hiring only those found to be qualified, and the passengers receive more information in advance about their prospective rides—information that includes not only the driver’s name but also pictures of him (or her) and of the car. Furthermore, the TNPs use part-time drivers extensively, and it is believed that these part-timers drive their cars fewer miles on average than taxicab drivers, who are constantly patrolling the streets in hope of being hailed; and the fewer miles driven the less likely a vehicle is to experience wear and tear that may impair the comfort of a ride in it and even increase the risk of an accident or a breakdown.

There are enough differences between taxi service and TNP service to justify different regulatory schemes, and the existence of such justification dissolves the plaintiffs’ equal protection claim. Different products or services do not as a matter of constitutional law, and indeed of common sense, always require identical regulatory rules. The fallacy in the district judge’s equal protection analysis is her equating her personal belief that there are no significant differences between taxi and TNP service with the perception of many consumers that there are such differences—a perception based on commonplace concerns with convenience, rather than on discriminatory or otherwise invidious hostility to taxicabs or their drivers. If all consumers thought the services were identical and that there was therefore no advantage to having a choice between them, TNPs could never have gotten established in Chicago.

Suppose the district judge happened to think dogs and cats interchangeable, and on that ground ruled that requiring dogs but not cats to be licensed (the law in Chicago) was a violation of equal protection. The proper response would be that she is entitled to her opinion but not entitled to impose it when the market perceives, and as we noted earlier has reasonable and nondiscriminatory grounds for perceiving, a rational difference between the competing animals that she does not perceive. Her belief that taxis and TNPs are interchangeable is similarly not shared by the entire relevant consumer market.

A “legislature, having created a statutory entitlement, is not precluded from altering or even eliminating the entitlement by later legislation. Were the rule otherwise, ‘statutes would be ratchets, creating rights that could never be retracted or even modified without buying off the groups upon which the rights had been conferred.’” Dibble v. Quinn, 793 F.3d 803, 809 (7th Cir. 2015), quoting Pittman v. Chicago Board of Education, 64 F.3d 1098, 1104 (7th Cir. 1995); see also Wisconsin & Michigan Ry. Co. v. Powers, 191 U.S. 379, 387, 24 S.Ct. 107, 48 L.Ed. 229 (1903) (“the legislature is not making promises, but framing a scheme of public revenue and public improvement”).

Beginning in the 1970s a deregulation movement swept the country, powered by the belief that competition is often a superior alternative to regulation. Entire agencies vanished, such as the Civil Aeronautics Board, which had greatly limited competition in the airline industry. Many cities loosened the regulatory limitations on taxi services—and this well before there were any TNPs. See Adrian T. Moore & Ted Balaker, “Do Economists Reach a Conclusion on Taxi Deregulation?” 3 Econ Journal Watch 109, 111 (2006). The deregulation movement has surged with the advent of the TNPs. Chicago, like Milwaukee in our companion Sanfelippo case, has chosen the side of deregulation, and thus of competition, over preserving the traditional taxicab monopolies. That is a legally permissible choice.

The judgment- of the district court is affirmed in all but that court’s ruling on the plaintiffs’ equal protection claims; that ruling is reversed with instructions to dismiss those claims with prejudice.