Justia U.S. 7th Circuit Court of Appeals Opinion Summaries

A class action filed against Dairy Farmers of America (DFA), a dairy marketing cooperative, Keller’s Creamery, a butter manufacturer, two DFA officers, and two Keller’s officers, alleged a conspiracy to purchase cheese traded on the Chicago Mercantile Exchange in order to help DFA and Keller’s manipulate the price of Class III milk futures. The parties named in the initial complaint reached a settlement (DFA Settlement), which the district court approved in 2014. In 2012, plaintiffs filed an amended class action complaint, adding Schreiber Foods as a defendant and alleging violations of sections 1 and 2 of the Sherman Act, the California Cartwright Act, the Commodity Exchange Act, and RICO. The district court dismissed the section 2 Sherman Act claims. In 2013, the court granted Schreiber summary judgment on the remaining claims. The Seventh Circuit affirmed, rejecting arguments that the district court abused its discretion by limiting discovery to only “high-level” employees and prohibiting the depositions of several employees and in including Schreiber in the DFA Settlement. View "Indriolo Distribs., Inc. v. Schreiber Food, Inc." on Justia Law

Bell alleged that her former employer, PNC Bank, failed to pay her overtime wages in violation of the Fair Labor Standards Act, 29 U.S.C. 201, and the Illinois Minimum Wage and Wage Payment and Collection Acts, and that the failure was not an isolated incident, but rather part of a PNC policy or practice that affected other employees. Bell claimed that she was evaluated, in part, based on how many new accounts she brought into the bank, and in order to generate new accounts she needed to spend “significant” time outside of her regular work hours visiting prospective clients. Some of the assignments to visit prospective clients came from a PNC vice president who did not work at the Bell’ branch. According to Bell, when she submitted time cards reflecting overtime work, her branch manager and a PNC regional manager told her that “PNC would not permit... overtime for the branch,” and “PNC expected its employees to handle their outside-the-branch work on their own time, without reporting any extra hours that they worked.” The Seventh Circuit affirmed certification of a class of plaintiffs. Many issues remain unanswered and the district court was correct to conclude that a class action would be an appropriate and efficient pathway to resolution. View "Bell v. PNC Bank" on Justia Law

In 2010, Southwest Airlines stopped honoring certain in-flight drink vouchers issued to customers who had bought “Business Select” fares. Customers filed suit, seeking to represent a class of similarly situated plaintiffs. The parties reached a settlement to provide replacement drink vouchers to all class members, and injunctive relief constraining how Southwest could issue future vouchers. The parties negotiated an agreement on fees for class counsel. The court certified the class and approved the settlement’s class relief components, but awarded counsel a smaller fee than requested. Two class members objected, arguing that the settlement was unfair to the class because it was too generous to class counsel. The Seventh Circuit affirmed. The “coupon settlement” provisions of the Class Action Fairness Act, 28 U.S.C. 1712, allowed the court to award attorney fees based on the lodestar method rather than the value of the redeemed coupons. While the fee aspects of the settlement include troublesome features, the settlement provides class members essentially complete relief. The financial and professional relationship between lead class counsel and one lead plaintiff created a potential conflict of interest that should have been disclosed, but another lead plaintiff had no conflict and the class received essentially complete relief, so there was no basis for decertification or rejecting the settlement. The court instead removed that plaintiff’s $15,000 incentive award and reduced the lawyer’s fee. View "Markow v. Southwest Airlines Co." on Justia Law

Burglars stole four desktop computers from Advocate Health and Hospitals Corporation’s Illinois administrative offices. The computers contained unencrypted private data relating to approximately four million Advocate patients. Six of those patients brought a putative class action alleging that Advocate did too little to safeguard their information, asserting claims for willful and negligent violations of the Fair Credit Reporting Act, 15 U.S.C. 1681. The district court dismissed the FCRA claims for failure to state a claim. It also found that four of the plaintiffs lacked standing to sue because their injuries were too speculative; the thieves had stolen their information but had not yet misused it. The Seventh Circuit affirmed. Using information internally does not count as “furnishing … to third parties,” so the Act’s reasonable‐procedures provision did not apply, and the FCRA claims were properly dismissed. View "Tierney v. Advocate Health & Hosp. Corp." on Justia Law

When the Chicago Board of Education deems a school to be deficient, it implements a reconstitution, replacing all administrators, faculty, and staff. A school may be subject to turnaround if it has been on probation for at least one year and has failed to make adequate progress . Under the collective bargaining agreement, tenured teachers are placed in a pool where they continue to receive a full salary and benefits for one school year. If a tenured teacher does not find a new position within that year, she is honorably terminated. Others are eligible for the cadre pool where they can receive substitute assignments, paid per assignment. From 2004-2011, the Board reconstituted 16 schools. In 2011, the Board identified 74 schools by removing schools that met the objective criteria related to standardized test scores and graduation rates. Brizard chose the final 10 schools. All were in areas where African Americans make up 40.9% of tenured teachers. No schools were selected from the north side, where only 6.5% of tenured teachers are African American. Of the teachers displaced, 51% were African American, despite comprising just 27% of the overall CPS teaching population. Teachers and the Union filed suit. The court declined to certify a class of: All African American persons … teacher or para-professional staff … subjected to reconstitution. The court found that the plaintiffs had not met established a common issue and had not adequately shown that common questions of law or fact predominated over individual claims. The Seventh Circuit reversed, finding that the class can be certified under both Rule 23(b)(2) and 23(b)(3). View "Chicago Teachers Union v. Bd. of Educ. of the City of Chicago" on Justia Law

Chapman, proposed to represent a class, under 47 U.S.C. 227, the Telephone Consumer Protection Act, who received faxes from First Index despite not having given consent. First Index responded that it always had consent, though it may have been verbal (during trade shows or phone conversations). Discovery was conducted and experts’ reports submitted. Chapman asked the judge to certify a class of all persons who had received faxes from First Index since August 2005 (four years before the complaint was filed) without their consent. The court declined, ruling that the difficulty of deciding who had provided oral consent made it infeasible to determine the class. Chapman proposed a different class: All persons whose faxes from First Index either lacked an opt-out notice or contained one of three specific notices that Chapman believes violated FCC regulations. The court declined to certify that class, finding that Chapman had known about the potential notice issue from the outset of the litigation but had made a strategic decision not to pursue it earlier. Changing the focus of the litigation almost five years into the case was impermissible. The Seventh Circuit affirmed the decision not to certify a class, but vacated with respect to Chapman’s personal claim. View "Chapman v. First Index, Inc." on Justia Law

The plaintiff alleged consumer fraud by the seller of a dietary supplement, and the district court certified a plaintiff class of individuals “who purchased Instaflex within the applicable statute of limitations of the respective Class States for personal use until the date notice is disseminated,” under Rule 23(a) and (b)(3). The court rejected defendant’s argument that Rule 23(b)(3) implies a heightened ascertainability requirement. The Seventh Circuit affirmed, noting an implicit requirement under Rule 23 that a class must be defined clearly and that membership be defined by objective criteria rather than by, for example, a class member’s state of mind. In addressing this requirement, courts have sometimes used the term “ascertainability.” Class definitions fail this requirement when they were too vague or subjective, or when class membership was defined in terms of success on the merits (fail-safe classes). This class satisfied “ascertainability” View "Mullins v. Direct Digital, LLC" on Justia Law

In 2013, hackers attacked Neiman Marcus and stole the credit card numbers of its customers. In December 2013, the company learned that some of its customers had found fraudulent charges on their cards. On January 10, 2014, it publicly announced that the cyberattack had occurred and that between July 16 and October 30, 2013, and approximately 350,000 cards had been exposed to the hackers’ malware. Customers filed suit under the Class Action Fairness Act, 28 U.S.C. 1332(d). The district court dismissed, ruling that the individual plaintiffs and the class lacked Article III standing. The Seventh Circuit reversed, finding that the plaintiffs identified some particularized, concrete, redress able injuries, as a result of the data breach. View "Remijas v. Neiman Marcus Group, LLC" on Justia Law

In 2009, CE filed a class action suit under the Telephone Consumer Protection Act, 47 U.S.C. 227, against King. King had commercial general liability and umbrella policies from three insurance companies, but all three disclaimed any obligation to defend or indemnify, based on provisions in the policies that appeared to exempt liability under the Telephone Consumer Protection Act from coverage. The district court certified the class. On remand, CE and King agreed to settle the case for $20 million, the limit of the insurance policies. Their agreement, approved by the district court, provided that only one percent of the judgment ($200,000) could be executed against King. Upon learning of the proposed settlement, the insurers sought a state court declaratory judgment. A state court ruled that the insurance policies do not cover liability under the Act, but CE is appealing that decision. After the settlement agreement in the federal case, but before its approval, the insurers moved to intervene under Fed.R.Civ.P. 24(a), (b), hoping to delay approval of the settlement until there was a state-court determination. The Seventh Circuit affirmed denial of the motion to intervene as untimely. View "Valley Forge Ins. Co. v. King Supply Co., LLC" on Justia Law

In a securities-fraud class action, plaintiffs won a verdict of $2.46 billion, apparently one of the largest to date, against Household International and three of its top executives. The suit was based on a dramatic increase (and subsequent collapse) in the price of Household’s stock that was driven by predatory lending practices and creative accounting to mask delinquencies. The Seventh Circuit ordered a new trial on two issues: whether plaintiffs failed to prove loss causation and instructional error concerning what it means to “make” a false statement in connection with the purchase or sale of a security. Plaintiffs’ expert’s testimony did not adequately address whether firm-specific, nonfraud factors contributed to the collapse in Household’s stock price during the relevant time period. View "Glickenhaus & Co. v. Household Int'l, Inc." on Justia Law