Articles Posted in US Court of Appeals for the Seventh Circuit

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In 2008, Standard sued, on behalf of itself and “all others similarly situated," alleging that was injured when it “purchased several items of steel tubing [at an inflated price] indirectly … for end use," claiming that eight U.S. steel producers colluded to slash output to drive up the price of steel so that plaintiffs overpaid for steel sheets, rods, and tubing. Eight years later, the plaintiffs amended their complaint, asserting that they overpaid for end-use consumer goods, including vehicles, washing machines, and refrigerators, that were manufactured by third parties using steel. The district court dismissed the suit as time-barred because it redefines “steel products” to give rise to an entirely different, and exponentially larger, universe of plaintiffs, and, in the alternative, for not plausibly pleading a causal connection between the alleged antitrust conspiracy and plaintiffs’ own injuries. The Seventh Circuit affirmed. No reasonable defendant, reading the original complaint, would have imagined that plaintiffs were actually suing over the thousands of end-use household and commercial goods manufactured by third parties—a reading so broad that it would make nearly every person in the country a potential class member. The court further noted that it was unclear how to trace the effect of an alleged overcharge on steel through the complex supply and production chains that gave rise to consumer products. View "Supreme Auto Transport, LLC v. Arcelor Mittal USA, Inc." on Justia Law

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A class action stemming from Southwest’s decision to stop honoring drink vouchers for “business select” customers settled with the customers receiving replacement vouchers. The Seventh Circuit affirmed, holding that 28 U.S.C. 1712, the Class Action Fairness Act, allowed the court to award class counsel (Siprut) attorney fees ($1,365,882) based on the lodestar method rather than the value of the redeemed vouchers. On remand, Siprut sought supplemental fees. For its work on the motion to amend the fee award and the prior appeal, The court called the number of hours requested “grossly excessive,” stating that counsel was trying to reach “some of the originally hoped‐for $3,000,000 that Southwest agreed not to oppose.” The court awarded $455,294 plus expenses, then vacated so that the class would receive notice. In exchange for dismissal of an appeal, by objector Markow, Siprut agreed to take $227,647 plus $3,529.68 in expenses; Southwest agreed to issue two additional vouchers for each one claimed. The court was notified that the number of vouchers claimed under the original settlement was less than one-third what the parties earlier indicated and approved the new settlement. Southwest distributed the vouchers and paid Siprut. Markow then unsuccessfully moved for $80,000 in attorney fees and an incentive award of $1,000 from Siprut’s fee award. The Seventh Circuit reversed. Unless the parties to a class action settlement, including objecting parties, expressly agree otherwise, settlement agreements should not be read to bar objectors from requesting fees for their efforts in adding value to a settlement. View "Markow v. Southwest Airlines Co." on Justia Law

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Wheelchair-using detainees sued Cook County, alleging violations of the Americans with Disabilities Act and the Rehabilitation Act, based on purportedly inaccessible ramps and bathroom facilities at six county courthouses. The district court certified a class for purposes of injunctive relief. The named plaintiffs also sought damages individually for the same alleged violations. The district court held an evidentiary hearing on the equitable claims and entered a permanent injunction, finding that the defendants had violated the ADA. Relying largely on the same findings, the court granted the plaintiffs partial summary judgment on liability in their personal damage actions, then submitted the question of individual damage awards to a jury. The Seventh Circuit vacated in part. The district court improperly relied on its own findings of fact when it granted partial summary judgment to the plaintiffs on their damage claims. When equitable and legal claims are joined in a single suit, common questions of fact should be tried first to a jury unless there are extraordinary circumstances or an unequivocal waiver by all parties of their jury trial rights. The court upheld the class certification. View "Lacy v. Cook County, Illinois" on Justia Law

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Camp Drug Store filed a proposed class action, alleging that Cochran Wholesale had violated the Telephone Consumer Protection Act, 47 U.S.C. 227, by faxing unsolicited advertisements to class members. The parties entered into early mediation and reached a settlement. Cochran would “make up to $700,000.00 available” but was not required to create a separate account to hold the funds or to deposit them with the court. Each class member could submit a claim for $125; if the value of the claims exceeded the total available funds, each timely claim would be subject to a pro‐rata reduction. Any funds that were not claimed by class members were to be kept by Cochran. Each representative plaintiff was entitled to an incentive award of $15,000, and class counsel was to be paid one-third of the Settlement Fund ($233,333.33). The total Cochran actually paid to claimants was $220,625.00. The court approved the settlement but reduced the proposed attorney fee to $73,468.13 and incentive awards to $1,000. Camp argued that the settlement created a common fund against which the reasonableness of the fee award should be assessed. The Seventh Circuit affirmed, rejecting the “common fund” argument.. Given the early stage at which the litigation settled, the reductions in the fee and incentive awards were not an abuse of discretion. View "Camp Drug Store, Inc. v. Cochran Wholesale Pharmaceutic, Inc." on Justia Law

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In 2011-2012 a million people received phone calls asking them to take political surveys in exchange for a chance to go on a free cruise. Some recipients filed a class action under the Telephone Consumer Protection Act, 47 U.S.C. 227, seeking damages from defendants who had not placed the calls but had directed them. The district court certified a class and later granted plaintiffs partial summary judgment. The parties settled. Plaintiffs agreed to release their claims against all defendants and their agents. Defendants agreed to pay into a fund between $56 million and $76 million, depending on the number of approved claims submitted. Out of the fund will come payments to the class, incentive awards to the named representatives, about $2 million in administrative expenses, and attorneys’ fees. The class will receive payments in two rounds. If some claimants do not cash the checks during the second round, remaining funds will go to “an appropriate cy pres recipient.” Over the objections of a class member, the court approved the settlement, estimating that each claimant will receive $400. Class counsel will receive 36% of the first $10 million, 30% of the next $10 million, 24% of the next $36 million, and 18% of any additional recovery. The Seventh Circuit affirmed, rejecting arguments that the award of fees overcompensates class counsel and that the settlement’s approval was improper. View "McCabe v. Caribbean Cruise Line, Inc." on Justia Law

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This appeal arose after the district court approved a settlement in an action alleging that Target violated consumer protection laws by making false claims about the efficacy of glucosamine dietary supplements. Objector-appellant suspected that three objectors, in bad faith, voluntarily dismissed their appeals before appellate briefing began. Objector-appellant moved for a limited reopening of the case but the district court denied the motion. The Seventh Circuit reversed, holding that the district court mistook the scope of its discretion and the nature of the problem before it denied the motion. Therefore, the motion should have been granted. The court remanded for further proceedings. View "Frank v. Target Corp." on Justia Law

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In 2010, Hungarian survivors of the Holocaust filed a purported class action in the Northern District of Illinois, alleging that in 1944 the Hungarian national railway transported Fischer and up to 500,000 other Jews from Hungary to Auschwitz and other concentration camps. The Seventh Circuit concluded that the plaintiffs had neither exhausted remedies that may be available in Hungary nor established that the national railway is engaged in commercial activity in the U.S., as necessary to support the exercise of subject matter jurisdiction under the Foreign Sovereign Immunities Act (FSIA) expropriation exception. In 2016, Kellner, a member of the putative class, filed her own complaint against the Hungarian national railway in Budapest’s Capital Regional Court, which dismissed the case. In 2017, the district court received a “Motion to Reinstate” based on “class member” Kellner’s efforts to exhaust remedies in Hungary. The district court rejected the motion: [A]lthough there was a proposed class in this case and Kellner may have been a putative class member, … No class was certified …. Kellner ... is not a named party … and lacks any standing.” The Seventh Circuit held that it lacked authority to consider an appeal from a party not subject to the order sought to be challenged. View "Fischer v. Magyar Allamvasutak Zrt." on Justia Law

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In July 2014, Allen‐Gregory filed a putative class action alleging that Fortville violated class members’ due process rights by terminating their water service without a hearing. Fortville revised its procedures, instituting a hearing process effective November 2014. In December 2014, the plaintiffs again sought a preliminary injunction, alleging that the new procedures did not comport with due process. The parties agreed to a settlement. In September 2015, the court approved the settlement and dismissed the case with prejudice. The settlement stated that its purpose was to “fully, finally, and forever resolve, discharge and settle all claims released herein on behalf of the named plaintiffs and the entire class.” It defined the class as “[a]ll customers of the Town of Fortville ... from July 9, 2012 through October 31, 2014 who had their water service terminated and who paid a reconnection fee,” and included an expansive, global release of all claims. Kilburn‐Winnie, a member of the class, received settlement proceeds. In November 2015, Kilburn‐Winnie filed this case alleging that Fortville disconnected her water service again for failure to timely pay her water bill in March and April of 2015 and that the hearing procedures implemented in November 2014 were so complicated and burdensome that they violated her procedural due process rights. The court granted Fortville summary judgment. The Seventh Circuit affirmed; res judicata barred the claim because the parties settled a prior class action that involved the same claim. View "Kilburn-Winnie v. Town of Fortville" on Justia Law

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SP operates Dayton International Airport parking facilities and is headquartered in Chicago. Plaintiffs allege that they used these parking lots and received receipts that included the expiration date of their credit or debit cards, violating the Fair and Accurate Credit Transaction Act (FACTA), 15 U.S.C. 1681c(g)(1). They filed a class-action complaint in the Circuit Court of Cook County. The complaint did not describe any concrete harm that the plaintiffs had suffered. SP removed the action to federal court, arguing that the claim arose under a federal statute, then moved to dismiss for lack of Article III standing because the plaintiffs did not allege an injury in fact. Plaintiffs sought remand to state court, arguing that it was SP’s responsibility to establish subject-matter jurisdiction and that, without it, 28 U.S.C. 1447(c) required return of their case to state court. Because Article III does not apply in state court, they presumably hoped that their case could stay alive there despite their lack of a concrete injury. The district court denied the motion, determined that plaintiffs could not establish standing by stating only that the defendant had violated statutory requirements, and dismissed the case. The Seventh Circuit vacated and ordered a remand. The case was not removable, because the plaintiffs lack Article III standing—negating federal subject-matter jurisdiction. View "Collier v. SP Plus Corp." on Justia Law

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In 2012, hackers infiltrated the computer networks at Schnuck Markets, a large Midwestern grocery store chain based in Missouri, and stole the data of about 2.4 million credit and debit cards. By the time the intrusion was detected and the data breach was announced in 2013, the financial losses from unauthorized purchases and cash withdrawals had reached the millions. Financial institutions filed a class action, having issued new cards and reimbursed customers for losses as required by 15 U.S.C. 1643(a). They asserted claims under the common law and Illinois consumer protection statutes (ICFA). The Seventh Circuit affirmed the dismissal of the suit. The financial institutions sought reimbursement for their losses above and beyond the remedies provided under the credit-debit card network contracts; neither Illinois or Missouri would recognize a tort claim in this case, where the claimed conduct and losses are subject to these networks of contracts. Claims of unjust enrichment, implied contract, and third-party beneficiary also failed because of contract law principles. The plaintiffs did not identify a deceptive guarantee about data security, as required for an ICFA claim, nor did they identify how Schnucks’ conduct might have violated the Illinois Personal Information Protection Act. View "Community Bank of Trenton v. Schnuck Markets, Inc." on Justia Law