Justia Class Action Opinion SummariesArticles Posted in U.S. Court of Appeals for the Seventh Circuit
Hays v. Berlau
In 2012 Walgreens acquired a 45 percent equity stake in Alliance, plus an option to acquire the rest of Alliance’s equity for a mixture of cash and Walgreens stock. Walgreens later announced its intent to purchase the remainder of Alliance and engineer a reorganization whereby Walgreens would become a wholly-owned subsidiary of a new corporation, Walgreens Boots Alliance. Within two weeks after Walgreens filed a proxy statement seeking shareholder approval, a class action was filed; 18 days later, less than a week before the shareholder vote, the parties agreed to settle. The settlement required Walgreens to issue several requested disclosures and authorized class counsel to request $370,000 in attorneys’ fees, without opposition from Walgreens. The Seventh Circuit reversed approval of the settlement, calling the supplemental disclosures “a trivial addition to the extensive disclosures already made in the proxy statement.” “The oddity of this case is the absence of any indication that members of the class have an interest in challenging the reorganization.... The only concrete interest suggested … is an interest in attorneys’ fees.... Certainly class counsel, if one may judge from their performance in this litigation, can’t be trusted to represent the interests of the class.” View "Hays v. Berlau" on Justia Law
Kleen Prods. LLC v. Int’l Paper Co.
The plaintiffs (purchasers of containerboard) filed suit under the Sherman Act, 15 U.S.C. 1, alleging that the defendants (producers and sellers of containerboard) agreed “to restrict the supply of containerboard by cutting capacity, slowing back production, taking downtime, idling plants, and tightly restricting inventory,” which led to an increase in the price of containerboard. The court certified a class under FRCP 23: All persons that purchased Containerboard Products directly from any of the Defendants or their subsidiaries or affiliates for use or delivery in the United States from at least as early as February 15, 2004 through November 8, 2010. The proposed definition carved out the defendants themselves, entities or personnel related to them, and governmental entities. The Seventh Circuit affirmed after examining: whether common questions predominate; whether antitrust injury can be proved using a common method; whether the amount of damages can be proved using a common method; and whether a class action is superior. The court noted that no defendant challenged the Purchasers’ experts and there were few factual disputes. A “smattering” of individual contract defenses did not undermine the superiority of the (b)(3) class action. View "Kleen Prods. LLC v. Int'l Paper Co." on Justia Law
Holtzman v. Turza
Attorney Turza sent fax advertisements to accountants. In 2013, the Seventh Circuit affirmed that these faxes violated the Telephone Consumer Protection Act (TCPA), 47 U.S.C. 227, but reversed a plan to distribute a $4.2 million fund to the class members and donate any remainder to charity. Meanwhile, Turza posted a $4.2 million supersedeas bond. Invoking the common-fund doctrine, the district judge awarded class counsel about $1.4 million. TCPA authorizes an award of up to $500 per improper fax. The court ordered two-thirds of that sent to every class member. If some members fail to cash their checks or cannot be found, there would be a second distribution. The maximum paid out per fax would be $500. If money remains, the residue returns to Turza. The Seventh Circuit reversed in part. This is not a common-fund case; suits under TCPA seek recovery for discrete wrongs. If a recipient cannot be located, or spurns the money, counsel are not entitled to be paid for that fax. TCPA is not a fee-shifting statute. Turza is not required to pay the class’s attorneys just because he lost the suit. Distributing more than $500 per fax ($333 to the recipient and $167 to counsel) would either exceed the statutory cap or effectively shift legal fees to Turza. The $4.2 million represents security for payment, so once the debt is satisfied, the surplus can be returned to Turza. View "Holtzman v. Turza" on Justia Law
Phillips v. Sheriff of Cook County
Plaintiffs, current and former detainees, brought a class action under 42 U.S.C. 1983 against Cook County, claiming that the level of dental care at the Jail demonstrated deliberate indifference in violation of the Eighth and Fourteenth Amendments. The court originally certified two classes of plaintiffs under FRCP 23, but later decertified one class and modified the other, finding that the Jail’s implementation of a consent order with the Department of Justice eliminated a common question concerning inadequate staffing and brought care into compliance with national standards. The court could not find another common factor among the claims, noting that “treatment of dental pain may fall below the deliberate indifference threshold for many reasons and at many stages.” The court then determined that the detainees’ motion for injunctive relief was moot. While an appeal was pending, the detainees unsuccessfully moved for a new trial (FRCP 60(b)) based on newly discovered evidence. The Seventh Circuit affirmed, upholding decertification of the classes because of the lack of a common issue of fact or law. The detainees’ questions do not point to the type of systematic and gross deficiency that would lead to a finding that all detainees are effectively denied treatment; they did not allege a specific policy that directly causes delay, nor a pattern of egregious delays across the entire class. Filing a Rule 60(b) motion during the interlocutory appeal was inappropriate; there was no final judgment in the case. View "Phillips v. Sheriff of Cook County" on Justia Law
Rocha v. Rudd
In 2005, FedEx delivery drivers, represented by Defendants (lawyers), filed suit, alleging that FedEx had misclassified them as independent contractors, citing the Illinois Wage Payment and Collection Act (IWPCA), 820 ILCS 115/1. In 2011, after the court granted partial summary judgment, holding that plaintiffs were IWPCA employees, Rocha joined the action. His agreement with Defendants limited the scope of representation because he was pursuing other claims against FedEx on behalf of his company with separate representation by Johnson (his spouse). The agreement affirmed Rocha’s right to accept or reject any settlement. In 2012, the parties notified the court of a tentative settlement. Defendants told Rocha and Johnson that FedEx required “a release of all claims against FedEx both individually and on behalf of any associated corporation,” but reasserted Rocha’s right to not join the settlement. After the court approved the settlement, it allowed Defendants to withdraw as Rocha's counsel, dismissed the case with prejudice for all named plaintiffs except Rocha, and dismissed Rocha's case without prejudice. Rocha was not required to pay attorney’s fees or expenses. The district court later dismissed Rocha’s separate suit. Before filing his state‐court complaint (still pending), Rocha sued Defendants, claiming breach of contract, malpractice, fraud, and violation of the Illinois Consumer Fraud and Deceptive Business Practices Act. The Seventh Circuit affirmed dismissal, finding no plausible grounds for relief. View "Rocha v. Rudd" on Justia Law
Paldo Sign & Display Co. v. Wagener Equities, Inc.
Wagener agreed to review proposed ads from MR, then received a fax from MR, including pricing and sample fax advertisements, and stating that MR would not send out ads unless Wagener returned an approved copy. During a follow-up call, Wagener stated that he did not like the samples. The caller agreed to provide a new sample and a list of potential recipients. Wagener wanted to verify that potential recipients were businesses that would be interested in his services and were located in the relevant geographical region. Wagener did not receive that list or a final ad and was surprised to find that a fax advertisement had been transmitted to thousands of recipients without his approval. Wagener immediately tried to contact MR but received no response. Wagener then learned that his employee had mistakenly mailed a check to MR. Wagener’s bank implemented a stop order. Wagener never heard from MR again. The Telephone Consumer Protection Act, 47 U.S.C. 227(b)(1)(C), subjects the sender of unauthorized faxes to a statutory penalty of $500 per violation. The ads at issue violated the Act. The district court certified a class of more than 10,000 plaintiffs. A jury found that Wagener had not “authorize[d] the fax broadcast transmission,” and did not “have direct, personal participation in the authorization of the fax broadcast transmission.” The Seventh Circuit affirmed, rejecting challenges to evidentiary rulings and jury instructions. View "Paldo Sign & Display Co. v. Wagener Equities, Inc." on Justia Law
Steimel v. Wernert
The Home and Community‐Based Care Waiver Program allowed states to diverge from the traditional Medicaid structure by providing community‐based services to people who would, under the traditional structure, require institutionalization, 42 U.S.C. 1396n. The Indiana Family and Social Services Administration operates the Aged and Disabled Medicaid Waiver Program (A&D waiver), the Community Integration and Habilitation Medicaid Waiver Program (CIH waiver), and the Family Supports Medicaid Waiver Program (FS waiver). Because Indiana has closed most of its institutional facilities, these waiver programs serve the vast majority of its people with disabilities. Until 2011, the Administration placed many people with developmental disabilities on the A&D waiver, which has no cap on services. The Administration then changed its policies, rendering many developmentally disabled persons ineligible for the A&D waiver. These people were moved to the FS waiver, under which they may receive services capped at $16,545 annually. The CIH waiver is uncapped, but not everyone qualifies for the CIH waiver. Plaintiffs argue that their new assignments violated the integration mandate of the Americans with Disabilities Act, 42 U.S.C. 12101 because it deprives them of community interaction and puts them at risk of institutionalization. The court granted defendants summary judgment on the integration‐mandate claims and denied class certification. The Seventh Circuit reversed, finding that there is a genuine dispute of material fact with respect to the individual claims based on the integration mandate. The court agreed that the proposed class is too vague. View "Steimel v. Wernert" on Justia Law
Johnson v. Pushpin Holdings, LLC
CIT, a large finance company, leased credit‐card processing machines to businesses and individuals. The leases describe themselves as business rather than consumer contracts and contain a forum‐selection clause that requires any disputes to be litigated in Cook County, Illinois and governed by Illinois law. Each lease also required a personal guaranty, by the lessee, an agent of the lessee, or someone else. The leases were ultimately assigned to Pushpin, which filed suits in small‐claims courts in Cook County against more than 3000 of the guarantors of defaulted leases. The guarantors filed a class-action, claiming that in invoking the forum‐selection clause Pushpin hoped to induce default judgments, in violation of the Illinois Consumer Fraud and Deceptive Business Practices Act, and related torts. After remands, the district court accepted jurisdiction under the Class Action Fairness Act, 28 U.S.C. 1453(b), and dismissed on the merits. The Seventh Circuit affirmed: Any forum‐selection clause will be an inconvenience to a nonresident signer of the contract, so that the challenge amounted to urging a blanket prohibition of such clauses. View "Johnson v. Pushpin Holdings, LLC" on Justia Law
Lewert v. P.F. Chang’s China Bistro, Inc
P.F. Chang’s restaurant company announced that its computer system had been breached and some consumer credit- and debit–card data had been stolen. Kosner had dined at a P.F. Chang’s and paid with his debit card. Four fraudulent transactions were made with the card he had used; he cancelled it and purchased, for $106, a credit monitoring service to protect against identity theft, including against use of the card’s data to open new accounts in his name. Lewert used a debit card at the same restaurant (thought to be not among those breached) and had no fraudulent transactions, but claims that he spent time and effort monitoring his card statements and his credit report. Lewert and Kosner sought to represent a class of all similarly situated customers, under the Class Action Fairness Act, 28 U.S.C. 1332(d)(2). The district court dismissed for lack of standing, finding they had not suffered the requisite personal injury. The Seventh Circuit reversed. At least some of the injuries alleged qualify as immediate and concrete injuries sufficient to support Article III standing; all class members should be allowed to show that they spent time and resources tracking down possible fraud, changing automatic charges, and replacing cards as a prophylactic measure. View "Lewert v. P.F. Chang's China Bistro, Inc" on Justia Law
Reid v. Unilever United States, Inc.
The class representatives in three suits had purchased the Smoothing Kit, a hair product that supposedly would smooth hair and coat it with Keratin, a protein found naturally in hair. The Smoothing Kit was a disaster. Its active ingredient is extremely corrosive; if left on long enough, can dissolve the hair and burn the scalp. Asserting claims for breach of warranty, violations of state consumer fraud and deceptive practices laws, and unjust enrichment, plaintiffs in several states filed class action lawsuits. The cases were consolidated in the Northern District of Illinois, resulting in a settlement agreement. Martin objected to its approval which would provide a one‐time payment of $10 per person (the cost of the Smoothing Kit) plus payment to who suffered bodily injury. The Seventh Circuit upheld the approval, rejecting Martin’s argument that the personal injury settlement’s value was too low because it failed to recog‐ nize that there are a number of different applicable laws. The district court reasonably concluded that it had enough data for an informed decision and that the dollar amounts were within a reasonable range and reasonably considered and rejected injunctive relief. View "Reid v. Unilever United States, Inc." on Justia Law