In 2008, defendant faxed tens of thousands of unsolicited advertisements, violating the Telephone Consumer Protection Act, 47 U.S.C. 227. After defendant’s insurer intervened, a second proposed class action settlement was reached. The insurer, Continental, agreed to make $6.1 million available to class members. The total is approximately equal to the number of faxes sent (110,853) times per-fax damages offered by Continental ($55.03) with an attorney fee award of 1/3 the total amount: $2,033,333.33. The district court preliminarily approved the settlement and 24,389 of the 28,879 class members were successfully notified; five requested exclusion. None objected. Only 1,820 returned a claim form, seeking damages for 7,222 unlawful fax transmissions, so that Continental would pay out only $397,426.66 of the $6.1 million, with the remainder, less attorney fees and incentive awards, to revert. Despite the relatively meager final payout to class members, plaintiffs’ attorneys continued to demand more than $2 million. The district court employed the lodestar method, rather than the percentage method, applying a risk multiplier of 1.5 to arrive at a final fee award of $1,147,698.70. After arguments on appeal, the attorneys sought to dismiss. The Seventh Circuit declined to dismiss and affirmed the reduced fee award. View "Americana Art China Co., Inc. v. Foxfire Printing & Packaging, Inc." on Justia Law

Plaintiffs filed suit against Michaels on behalf of California store managers, alleging that Michaels had improperly classified the managers as exempt from overtime. After Michaels removed the case to federal district court under the Class Action Fairness Act (CAFA), 28 U.S.C. 1453, the district court remanded back to state court. The district court concluded that the amount-in-controversy requirement was not met because plaintiffs expressly disclaimed any recovery for the class over $4,999,999.99. In Standard Fire Insurance Co. v. Knowles, the Supreme Court held that attempted damages waivers, such as plaintiffs', were ineffective, and would not defeat removal under CAFA. Michaels then removed the case again under CAFA and the district court remanded on the basis that the removal ran afoul of CAFA's 30-day time limit. In the alternative, the district court held that Michaels failed to carry its burden to demonstrate that the amount-in-controversy exceeded $5,000,000. The court concluded that the case was not moot; because the two thirty-day removal periods were nonexclusive, Michael's second CAFA removal was timely; and the district court's finding that defendant failed to prove that the amount-in-controversey requirement was met was clearly erroneous under the preponderance of the evidence standard. Accordingly, the court reversed and remanded. View "Rea v. Michaels Stores" on Justia Law

Wellness filed a putative class action in state court seeking a declaration that the form language Allstate used in the class members' personal injury protection insurance policies did not clearly and unambiguously indicate that payments would be limited to the levels provided for in Fla. Stat. 627.736(5)(a). The district court subsequently granted Wellness' motion to remand, concluding that the value of the declaratory relief was too speculative for purposes of satisfying the Class Action Fairness Act's (CAFA), 28 U.S.C. 1332(d)(2), amount-in-controversy requirement because Allstate had failed to show that declaratory judgment in this case necessarily triggered a flow of money to plaintiffs. The court concluded, however, that Allstate had carried its burden of establishing an amount in controversy that exceeded $5 million and Wellness did not provide any evidence to rebut Allstate's affidavit or controvert its calculations. Here, the amount that would be put at issue is the amount that the putative class members could be eligible to recover from Allstate in the event that they obtain declaratory relief. Accordingly, the court reversed and remanded. View "South Florida Wellness, Inc. v. Allstate Ins. Co." on Justia Law

More than 13 years ago, lawyers around the country began class actions challenging the installation of fiberoptic cable on property without landowners’ consent. The cases began to settle on a state-by-state basis, leaving the lawyers to allocate awarded and expected attorney’s fees. The lawyers informally grouped themselves based on their negotiation and litigation positions. The Susman Group participated in mediation and agreed to a fee division, but balked at signing a written agreement, ostensibly because Susman disliked its enforcement terms. The district court held that Susman is bound by the agreement despite his failure to sign. The Seventh Circuit affirmed, reasoning that, given the parties’ lengthy course of dealing, Susman’s failure to promptly object to the written agreement can objectively be construed as assent. A finding that Susman’s refusal to sign was a case of “buyer’s remorse” rather than a genuine objection to the enforcement terms in the agreement was supported by the record. View "McDaniel v. Qwest Commc'ns Corp." on Justia Law

Plaintiff filed a putative class action suit against Home Depot alleging violations of California's Unfair Competition Law, Cal. Bus. & Prof. Code 17200; the California Consumer Legal Remedies Act, Cal. Civ. Code 1770; and common-law theories of unjust enrichment and money had and received. Plaintiff alleged that Home Depot automatically imposed a ten percent surcharge for a damage waiver on tool rentals in California stores, and although that fee was to be optional, Home Depot failed to inform customers of their ability to decline the surcharge. The court concluded that it had jurisdiction over the appeal despite plaintiff's stipulation on dismissal after the negative class action ruling. The court also concluded that the district court did not abuse its discretion in denying class certification because the record did not show that the requirements of Rule 12(b)(3) were satisfied where common questions did not predominate over individual issues in any of plaintiff's claims. Accordingly, the court affirmed the district court's denial of class certification. View "Berger v. Home Depot" on Justia Law

ComEd closed its Zion nuclear power plant in 1998. A decommissioned nuclear must be “decommissioned” and not be dangerously radioactive. Decommissioning is supervised by the Nuclear Regulatory Commission, which requires the operator to finance the decommissioning. The details of the trust fund are left to the state agency, in this case the Illinois Commerce Commission, which (220 ILCS 5/9‐201.5(a)), authorized ComEd to create a trust to be funded by $700 million in charges levied by ComEd on its customers. The Act entitles ComEd customers to the return of money not spent when the decommissioning is completed. In 2001, with the permission of the ICC, ComEd transferred ownership of the Zion plant and the trust assets, to ComEd’s parent, Exelon. Neither Exelon nor its subsidiary is a public utility. Ordinarily the utility (ComEd) would have owned the plant after shutting it down, but transaction costs would be reduced by uniting financing and decommissioning in the same company. After several transfers, plaintiffs brought suit, claiming that the trust funds are being misused in violation of the Illinois Public Utilities Act and common law of trusts. The district court, without deciding whether to certify a class, dismissed. The Seventh Circuit affirmed, noting that that none of the plaintiffs are beneficiaries of the trust. View "Pennington v. ZionSolutions LLC" on Justia Law

Scott alleged that Westlake repeatedly called her cell phone using an automated dialer in violation of the Telephone Consumer Protection Act, 47 U.S.C. 227, and sought, for herself and a putative class, statutory damages of $500 for each negligent violation and $1500 for each intentional violation, injunctive relief, and attorney fees. Before she moved for class certification, Westlake sent Scott’s attorney an offer to pay Scott $1500 (the statutory maximum) “for each and every dialer-generated telephone call made to plaintiff.” Westlake agreed to pay costs and to entry of an injunction. The message concluded by warning Scott that, in Westlake’s opinion, its offer rendered her case moot. The next day, Scott moved for class certification and declined the offer, stating that there was “a significant controversy” concerning how many dialer-generated calls Westlake had placed to her phone, so the offer was inadequate and did not render her case moot. The district court dismissed, finding that Westlake had offered Scott everything she sought, depriving the court of subject matter jurisdiction, but retained jurisdiction to enforce compliance with the offer and directed the parties to conduct discovery to determine how many calls Scott received from Westlake. The Seventh Circuit reversed, finding that the case is not moot. View "Scott v. Westlake Servs., LLC" on Justia Law

Beginning in 1998, consumer class actions were filed against Trans Union alleging violation of the Fair Credit Reporting Act, 15 U.S.C. 1681, by selling consumer information to target marketers and credit and insurance companies. The court approved a settlement. Trans Union agreed to give all class members “basic” credit monitoring services. Class members could also either claim cash from a $75 million fund or claim “enhanced” in-kind relief consisting of additional financial services. Trans Union was to provide $35 million worth of enhanced relief. The class was estimated at 190 million people. The Act authorizes damages of between $100 and $1000 per consumer for willful violations, so Trans Union faced theoretically possible liability of $190 billion. To persuade the court to approve the settlement, the parties agreed to an unusual provision that preserved substantive claims after settlement. Instead of releasing their claims, class members who did not get cash or enhanced in-kind relief retained the right to bring individual claims. Trans Union also partially waived the limitations period. The settlement authorized reimbursements from the fund to Trans Union itself “equal to any amounts paid to satisfy settlements or judgments arising from Post-Settlement Claims,” not including defense costs. There have been more PSCs than expected, depleting the fund. In a second appeal, the Seventh Circuit affirmed the orders authorizing disbursement of the remainder of the fund. View "Wheelahan v. Trans Union LLC" on Justia Law

About 150 property owners in a village near the Mississippi River claim that defendants’ refinery leaked benzene and other contaminants into the groundwater. They sued, alleging nuisance and related torts. The district court certified the class. The Seventh Circuit reversed. The court first rejected an argument that most class members had suffered no injury. How many class members have a valid claim is determined after certification. Predominance of issues common to all class members, like other certification requirements, goes to the efficiency of a class action as an alternative to individual suits. In this case, the alleged contamination occurred over a 90‐year period and involved different levels of contamination, caused by different polluters. Not every class member has experienced the same diminution in property value even if everyone had the same level of contamination. Plaintiff’s hydrogeologist, intended to measure contamination by the benzene levels in the groundwater beneath the plaintiffs’ properties, even though their water does not come from groundwater, but from an uncontaminated aquifer. It cannot be assumed that a decline in the value of property in the village is the result of proximity to a refinery. The district judge did not explore any of these issues, but treated predominance as a pleading requirement. View "Shell Oil Co. v. Parko" on Justia Law

The district court certified a class of waiters, bartenders, and other tipped employees at defendant restaurants. Under the Fair Labor Standards Act, 29 U.S.C. 203(d), and the Illinois Minimum Wage Law their employer is not required to pay tipped employees full federal or state minimum wage. If tipped employees also perform unrelated non‐tipped duties such as washing dishes, preparing food, or cleaning bathrooms, they are entitled to full minimum wage for time spent at that work. After the court amended the class definition to employees “who worked as tipped employees earning a sub‐minimum, tip credit wage rate,” the last remaining defendant sought permission to appeal for a second time. The Seventh Circuit denied the petition. While the definition is overinclusive because it says nothing about untipped work, the defendant did not challenge the definition. The change to the definition since denial of the previous petition does not open the door to a challenge to the initial grant of class certification on grounds derived from developments since that grant, including rulings by the district court. To justify a second appeal from grant or denial of class certification the order appealed from must have materially altered a previous order granting or denying certification. View "Smith v. Driver" on Justia Law