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

Senne parked his car on the street in front of his Palatine, Illinois house in violation of an ordinance. A police officer stuck a parking ticket face down under the windshield wiper; it included Senne’s name, birthdate, sex, height, weight, driver’s license number, and address (outdated), plus the vehicle’s description and vehicle identification number. Senne filed a purported class action under the Driver’s Privacy Protection Act, 18 U.S.C. 2721, which forbids knowing disclosure of personal information obtained in connection with a motor vehicle record, “except as provided in subsection (b).” Subsection (b) permits “disclosure” “in connection with any civil, criminal, administrative, or arbitral proceeding”” and “use by any government agency, including any court or law enforcement agency, in carrying out its functions.” After a remand, the court rejected his claims. The Seventh Circuit affirmed, noting that there was no evidence that anyone has ever taken a parking ticket from a windshield in Palatine and used personal information on the ticket. There has never been a crime or tort, resulting from personal information placed on traffic tickets. Had the Village made parking ticket information publicly available over the Internet, or included highly sensitive information such as a social security number, the risk of a nontrivial invasion of privacy would be much greater and might outweigh the benefits to law enforcement. View "Senne v. Village of Palatine" on Justia Law

From 1998 to 2012 Abbott marketed the anticonvulsant medication Depakote for applications that had not been FDA-approved (off-label uses). Physicians may prescribe drugs for off-label uses, but pharmaceutical companies are generally prohibited from marketing drugs for those same applications. Qui tam actions were filed under the False Claims Act. In 2009, Abbott disclosed in an SEC filing that the Department of Justice was investigating its marketing. Abbott pleaded guilty to illegally promoting Depakote from 2001 through 2006 and agreed to pay $1.6 billion to settle the criminal and qui tam actions. Employee benefits funds filed suit 15 months later, alleging that Abbott misrepresented Depakote’s safety and efficacy for off-label uses, paid kickbacks to physicians, established and funded intermediary entities to promote the drug for off-label uses, and concealed its role in these activities, in violation of the Racketeer Influenced and Corrupt Organizations Act. The district court dismissed, finding that the statute of limitations for the RICO claim began to run in 1998, when the funds initially reimbursed a prescription for off-label use. The court refused to toll the limitations period until the guilty plea, finding that Abbott’s concealment efforts were not designed to hinder potential lawsuits. The Seventh Circuit reversed, finding that dismissal was premature without an opportunity for discovery into when a reasonable fund should have known about its injuries from off-label marketing. View "Sidney Hillman Health Ctr. of Rochester v. Abbott Labs., Inc." on Justia Law

The district court certified a nationwide class action, alleging that Nestlé and Waggin’ Train sold dog treats that injured the dogs. The parties reached a settlement, to which the district court has given tentative approval pending a fairness hearing under Fed. R. Civ. P. 23(e). That hearing is scheduled for June 23, 2015. The order tentatively approving the settlement enjoins all class members from prosecuting litigation about the dog treats in any other forum. One case affected by this injunction has been pending for two years in Missouri, and was certified as a statewide class action before the federal suit was certified as a national class action. Curts, the certified representative of the Missouri class, intervened to protest the injunction, citing 28 U.S.C. 2283, the AntiInjunction Act. The Seventh Circuit stayed the injunction, noting that the district judge did not explain why he entered the injunction. Fed. R. Civ. P. 65(d)(1)(A) provides that every order issuing an injunction must “state the reasons why it issued.” An injunction that halts state litigation is permissible only if it satisfies section 2283 in addition to the traditional factors. The district judge was silent about everything that matters. View "Adkins v. Nestle Purina PetCare Co." on Justia Law

Accretive provides cost control, revenue cycle management, and compliance services to non-profit healthcare providers. Accretive and Fairview entered into a Revenue Cycle Operations Agreement (RCA), accounting for about 12% of Accretive’s revenue during the class period, and a Quality and Total Cost of Care (QTCC) contract, promoted as the future for healthcare services. In 2012, the Minnesota Attorney General sued Accretive for noncompliance with healthcare, debt collection, and consumer protection laws. Accretive wound down its RCA contract short of its term, expecting a loss of $62 to $68 million. The AG released a damaging report on Accretive’s business practices. Fairview cancelled its QTCC contract. Accretive’s stock fell from over $24 to under $10 per share. Plaintiffs filed a class action under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, alleging that Accretive concealed its practices to artificially inflate its common stock. The parties negotiated a settlement of $14 million: $0.20 per share ($0.14 with attorneys’ fees and expenses deducted). Notice was sent to 34,200 potential class members. Only one opted out; only Hayes filed an objection. At the fairness hearing, the district court granted approval, awarding attorneys’ fees of 30% and expenses of $63,911.14. Hayes did not attend. The Seventh Circuit affirmed. View "Hayes v. Accretive Health, Inc." on Justia Law

Defendants manufacture vitamins and nutritional supplements, including glucosamine pills, designed to help people with joint disorders, such as osteoarthritis. Several class action suits were filed under the Class Action Fairness Act, 28 U.S.C. 1332(d)(2), claiming violations of states’ consumer protection laws by making false claims. Eight months later, class counsel negotiated a nationwide settlement that was approved with significant modifications. The settlement requires Rexall to pay $1.93 million in fees to class counsel, plus $179,676 in expenses, $1.5 million in notice and administration costs, $1.13 million to the Orthopedic Research and Education Foundation, $865,284 to the 30,245 class members who submitted claims, and $30,000 to the six named plaintiffs ($5,000 apiece) Class members, led by the Center for Class Action Fairness, objected. The Seventh Circuit reversed, characterizing the settlement as “a selfish deal between class counsel and the defendant.” While most consumers of glucosamine pills are elderly and bought the product in containers with labels that recite the misrepresentations, only one-fourth of one percent of them will receive even modest compensation; for a limited period the labels will be changed, in trivial respects. The court questioned: “for conferring these meager benefits class counsel should receive almost $2 million?” View "Pearson v. NBTY, Inc." on Justia Law

Smith sued Greystone, a debt collector, alleging violation of the Fair Debt Collection Practices Act, 15 U.S.C. 1692–92p, and seeking statutory damages and compensatory damages for emotional distress. The district judge certified it as a class action, but the suit was transferred and the new judge decertified the class. Another judge dismissed, ruling that it had been moot since November 2009, when Greystone offered Smith $1,500 plus costs and attorneys’ fees. The Seventh Circuit vacated. A controversy exists when the plaintiff wants more, or different, relief than the defendant is willing to provide. The district judge decided that Smith’s compensatory damages could not exceed $500, but, while an excessive demand may lead to sanctions for frivolous litigation, it does not diminish the court’s jurisdiction. A court must resolve the merits unless the defendant satisfies the plaintiff’s demand. An offer that the defendant or the judge believes sufficient, but which does not satisfy the plaintiff’s demand, does not justify dismissal. View "Smith v. Greystone Alliance LLC" on Justia Law

The Seventh Circuit consolidated class action appeals filed under the Fair and Accurate Credit Transactions Act (FACTA), 15 U.S.C. 1681c(g), which provides that “no person that accepts credit cards or debit cards ... shall print [electronically] more than the last 5 digits of the card number or the expiration date upon any receipt provided to the cardholder at the point of the sale.” Willful violation entitles a consumer who sustains no harm to statutory damages, but a consumer harmed by the violation can obtain actual damages by showing that the violation was the result of negligence. Consumers who bought products at RadioShack stores paid with credit or debit cards, and received electronically printed receipts that contained the card’s expiration date. The parties settled; each class member who responded positively was to receive a $10 coupon that could be used at any RadioShack store. The face value of all the coupons was $830,000. RadioShack was to pay class counsel $1 million. The Seventh Circuit reevaluated the value of the settlement to class members and the benefits of costs incurred and, noting Radio Shack’s fragile financial condition, stated ”A renegotiated settlement will simply shift some fraction of the exorbitant attorneys’ fee awarded class counsel in the existing settlement that we are disapproving to the class members. While Radio Shack’s violation was willful, given earlier litigation, Shoe Carnival had no previous violation to alert the company. Instead of omitting the entire expiration date from credit‐card receipts, Shoe Carnival omitted just the year The Seventh Circuit concluded that there was sufficient ambiguity in the statute to justify the district court’s determination that Shoe Carnival had not willfully violated FACTA. View "Aliano v. RadioShack Corp." on Justia Law

Before the patents expired (2012) for the individual coffee pods used in Keurig coffeemakers, defendants wanted to enter the market for Keurig‐compatible pods. In 2010 they introduced a product that used the external K‐Cup design, but did not contain a filter so that use of fresh coffee grounds was impossible. They used small chunks of freeze‐dried brewed coffee that dissolve and are reconstituted when hot water is added. The packaging stated in small font that it contained “naturally roasted soluble and microground Arabica coffee”; it never explained that soluble coffee is instant coffee or that the pods contained 95% instant coffee. The package included a warning: “DO NOT REMOVE the foil seal as the cup will not work properly in the coffee maker and could result in hot water burns.” Except to ensure that the user did not view the contents of the pod, this made no sense. Customers began to complain and were told that the pods were “not instant coffee” but “a high quality coffee bean pulverized into a powder so fine that [it] will dissolve,” which was largely false. Consumer protection lawsuits were consolidated. The district court refused to certify a class and granted summary judgment. The Seventh Circuit reversed. Plaintiffs’ claims and those of the class they propose all derive from a single course of conduct. The court overlooked genuine issues of fact when it granted summary judgment.View "Suchanek v. Sturm Foods, Inc." on Justia Law

Illinois insurance regulators permitted WellPoint to acquire RightCHOICE health insurance. WellPoint caused RightCHOICE Insurance to withdraw from the Illinois market. WellPoint offered the policyholders costlier UniCare policies as substitutes. Those who chose not to pay the higher premiums had to shop for policies from different insurers, which generally declined to cover pre-existing conditions. Former RightCHOICE policyholders filed a purported class action. The district court declined to certify a class and entered judgment against plaintiffs on the merits. No one appealed. Absent certification as a class action, the judgment bound only the named plaintiffs. Their law firm found other former policyholders and sued in state court. Defendants removed the suit under 28 U.S.C. 1453 (Class Action Fairness Act); the proposed class had at least 100 members, the amount in controversy exceeded $5 million, and at least one class member had citizenship different from at least one defendant. Plaintiffs sought remand under section 1332(d)(4), which says that the court shall “decline to exercise” jurisdiction if at least two-thirds of the class’s members are citizens of the state in which the suit began and at least one defendant from which “significant relief” is sought is a citizen of the same state. The district court declined remand, declined to certify a class, and again rejected the case on the merits. The Seventh Circuit affirmed, stating that “Counsel should thank their lucky stars that the district court did not sanction them under 28 U.S.C. 1927 for filing a second suit rather than pursuing the first through appeal."View "Phillips v. Wellpoint Inc." on Justia Law

Purchasers of organic asphalt roofing shingles in many states sued IKO and affiliated firms, contending that it falsely told customers that the shingles met an industry standard (ASTM D2250 and that compliance had been ascertained by use of a testing protocol (ASTM D228). What distinguishes an “organic” asphalt tile is inclusion of a layer made from felt or paper; tiles that include a fiberglass layer are not called organic, even though asphalt itself has organic components. In 2009 the Panel on Multidistrict Litigation transferred all of the federal suits to the Central District of Illinois for consolidated pretrial proceedings under 28 U.S.C. 1407. Plaintiffs asked the court to certify a class that would cover IKO sales in eight states since 1979. The court declined. After determining that subject matter jurisdiction existed despite the district court’s error in transferring the matter to a judge without approval of the Panel, the Seventh Circuit vacated, While not required to certify the proposed class, the district court denied class certification under a mistaken belief that “commonality of damages” is legally indispensable. View "Zanetti v. IKO Mfg Inc." on Justia Law