Articles Posted in Class Action

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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

Posted in: Class Action

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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

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Barnes & Noble discovered that its PIN pads, used to verify payment information, had been compromised. The hackers acquired customers’ names, card numbers and expiration dates, and PINs. Some customers temporarily lost the use of their funds while waiting for banks to reverse unauthorized charges; some spent money on credit-monitoring services; some lost the value of their time devoted to acquiring new account numbers and notifying businesses of these changes. Many people use credit or debit cards to pay bills automatically; every time the account number changes, they must notify merchants. Plaintiffs sought damages from Barnes & Noble. Jurisdiction was based on the Class Action Fairness Act, 28 U.S.C. 1332(d), because the proposed class contains at least 100 members, the amount in controversy exceeds $5 million, and minimal diversity of citizenship exists. The district court dismissed the complaint, ruling that it did not adequately plead damages. The Seventh Circuit vacated. Federal Rule of Civil Procedure 54(c) provides that the prevailing party receives the relief to which it is entitled, whether or not the pleadings have mentioned that relief. While it is not clear that the company is liable, dismissal was inappropriate. Under the federal rules, all this complaint needed to do was allege generally that plaintiffs have been injured. View "Dieffenbach v. Barnes & Noble, Inc." on Justia Law

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Plaintiffs brought a collective lawsuit against Jimmy John’s on behalf of all assistant store managers nationwide for violations of the Fair Labor Standards Act (FLSA). Jimmy John’s owns just 2% of their stores; the rest are operated by franchisees. Jimmy John’s claimed that it did not maintain employment records for franchisee-employees and did not have contact information for the vast majority of putative collective members. The parties ultimately agreed that Jimmy John’s would send a letter to the non‐party franchisees asking for contact information for their assistant managers. Eventually, about 600 franchisee and 60 corporate employees joined the suit. The court bifurcated discovery, with the first phase to focus on the joint-employer issue. Two years into the litigation, plaintiffs filed separate lawsuits against their franchisee employers in district courts nationwide, asserting the same claims, arguing that the FLSA statute of limitations was running continuously on those claims. The district court subsequently enjoined plaintiffs from pursuing their lawsuits against the franchisee employers until their claims against Jimmy John’s were resolved. The Seventh Circuit reversed, rejecting arguments that the injunction was authorized under the court’s inherent equitable powers or the All Writs Act because it was necessary to prevent duplicative litigation, avoid inconsistent rulings, and protect the court’s pretrial orders regarding discovery and notice procedures. View "Lucas v. Jimmy John's Enterprises, LLC" on Justia Law

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In 2007, Kaufman filed a class‐action lawsuit based on Amex’s sale of prepaid gift cards. The packaging declared the cards were “good all over.” Kaufman alleged that these cards were not worth their stated value and were not “good all over” because merchants were ill‐equipped to process “split‐tender” transactions when a holder attempted to purchase an item that cost more than the value remaining on his card. After 12 months Amex automatically charged a “monthly service fee” against card balances. Kaufman alleged Amex designed the program to make it difficult to exhaust the cards' balances. Following the denial of Amex’s motion to compel arbitration, settlement negotiations, and the entry of intervenors, the court certified the class for settlement purposes but denied approval of a settlement, citing the inadequacy of the proposed notice. Response to notices of a second proposed settlement was “abysmal.” A supplemental notice program provided notice to 70% of the class; the court again denied approval. After another round of notice, the court granted final approval in 2016, noting the small rate of opt‐outs and objectors. The court awarded $1,000,000 in fees and $40,000 in expenses to the Plaintiffs’ counsel, $250,000 to additional class counsel, and $700,000 in fees to intervenors' counsel: attorneys would receive $1,950,000. The court concluded the total value of the claims was $9.6 million, that, considering the number of claims and the value of supplemental programs, the total benefit to the class was $1.8 million, and that recovering $9.6 million was unlikely. The Seventh Circuit concluded that the court did not abuse its discretion, despite the settlement’s “issues.” View "Goodman v. American Express Travel Related Services Co., Inc." on Justia Law

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In 2007, a Palatine police officer issued Collins a parking ticket, placing the bright yellow ticket under his car’s wiper blades. The ticket listed his name, address, driver’s license number, date of birth, sex, height, and weight. Collins claims that the display of his personal information violated the Driver’s Privacy Protection Act (DPPA), 18 U.S.C. 2721. In 2016, he sued the village on behalf of himself and a proposed class. The DPPA’s statute of limitations is four years but a purported class action filed in 2010 (Senne’s case) tolled the statute for everyone in the proposed class. In 2010, before Senne filed a class certification motion, the district court dismissed for failure to state a claim. The Seventh Circuit reversed. The district judge again entered summary judgment and “terminated” a motion for class certification as moot. The Seventh Circuit affirmed. In November 2015, the Supreme Court denied certiorari; on the same day, Senne’s attorney, Murphy, filed a successor class action on behalf of himself and a proposed class as a placeholder. Murphy later filed this suit naming Collins as the class representative. The district court held that Collins’s claim was time-barred and denied the motion for class certification. The Seventh Circuit affirmed. Dismissal with prejudice strips a case of its class-action character. Tolling stops immediately when a class-action suit is dismissed—with or without prejudice—before the class is certified. View "Collins v. Village of Palatine" on Justia Law

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The FDA approved Depakote for treating seizures, migraine headaches, and conditions associated with bipolar disorder. Physicians may prescribe it for other "off-label" uses, but a drug’s manufacturer can promote it only as suitable for uses the FDA has found safe and effective. Abbott, which makes Depakote, encouraged intermediaries to promote Depakote’s off-label uses for ADHD, schizophrenia, and dementia, hiding its own involvement. Abbott pleaded guilty to unlawful promotion and paid $1.6 billion to resolve the criminal case and False Claims Act suits, 31 U.S.C. 3729–33. Welfare-benefit plans that paid for Depakote’s off-label uses sought treble damages under the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. 1964, for a class comprising all third-party payors. Following a remand, the court dismissed the suit on the ground that the plaintiffs could not show proximate causation, a RICO requirement. The Seventh Circuit affirmed, reasoning that the Payors are not the most directly, injured parties. Patients suffer if they take Depakote when it is useless and may be harmful and costly. Physicians also may lose, though less directly. Because some off-label uses of Depakote may be beneficial to patients, it is hard to treat all off-label prescriptions as injurious to the Payors; if they did not pay for Depakote they would have paid for some other drug. In addition, some physicians were apt to write off-label prescriptions whether or not Abbott promoted such uses. Calculation of damages would require determining the volume of off-label prescriptions that would have occurred absent Abbott’s unlawful activity. View "Sidney Hillman Health Center of Rochester v. Abbott Laboratories, Inc." on Justia Law