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

The Chicago-area law firms (Anderson) represent plaintiffs in class action lawsuits under the Telephone Consumer Protection Act-Junk Fax Prevention Act, which authorizes $500 in damages for faxing an unsolicited advertisement, 47 U.S.C. 227(b)(1)(C), (b)(3). This award triples upon a showing of willfulness, and each transmission is a separate violation. Advertisers would pay a fee, and B2B would send an ad to hundreds of fax numbers without obtaining permission from the recipients. When Anderson learned that defendants in four cases under the Act had contracted with B2B, B2B records became the focus of discovery. Despite obtaining all information necessary to certify classes in the four cases, Anderson continued pushing for B2B, and, at a deposition at which B2B was represented by Ruben, obtained the names of other B2B clients, and sent solicitation letters. Anderson attempted to give Ruben $ 5000. Defendants in new cases learned that Anderson had promised B2B confidentiality and unsuccessfully challenged class certification. The Seventh Circuit affirmed, stating that when an ethical breach neither prejudices an attorney’s client nor undermines the integrity of judicial proceedings, state bar authorities are generally better positioned to address the matter through disciplinary proceedings, rather than the courts through substantive sanction in the underlying lawsuit. View "Reliable Money Order, Inc. v. McKnight Sales Co., Inc." on Justia Law

The class consists of chemical companies that purchase sulfuric acid as one of the inputs into their production of chemicals. The defendants own smelters that process nonferrous minerals such as nickel and copper. They also produce sulfuric acid and sell or sold it to the members of the class. The class was certified, but the suit, alleging violation of the Sherman Act, 15 U.S.C. 1, was dismissed on the merits. The district judge ruled that the case could not go to trial on a theory of per se liability. The plaintiffs could have gone to trial on a theory of liability under the rule of reason, but chose to appeal the dismissal. The Seventh Circuit affirmed, rejecting an argument based on how the defendants organized their operations. The court stated that: “ If there were no joint venture, there would still be no per se violation for there would still be the legitimate business reasons for the defendants to have cooperated.” View "In re Sulfuric Acid Antitrust Litigation" on Justia Law

The district court certified a class consisting of more than 4000 participants in the Meriter pension plan who allegedly were not credited with all benefits to which the plan entitled them. Some members received benefits 23 years ago. Some are current, the rest former, participants. The plan has been amended several times, so claims were divided into 10 groups, each of which was certified as a separate subclass having a different representative under Fed. R. Civ. P. 23(b)(2), which authorizes class action treatment if the defendant “has acted or refused to act on grounds that apply generally to the class, so that final injunctive relief or corresponding declaratory relief is appropriate respecting the class as a whole.” Each subclass in the ERISA action seeks a declaration of the rights of its members under the plan and an injunction directing that the plan’s records be reformed to reflect those rights. Admonishing the attorneys for failing to adequately describe the plan, the Seventh Circuit affirmed. The court rejected arguments concerning conflicts of interest among class members and that class members who are no longer participants in the plan are not entitled to declaratory or injunctive relief because such relief is forward looking. View "Boyd v. Meriter Health Servs. Emp. Ret. Plan" on Justia Law

Northwestern sold an annuity to approximately 36,000 persons: about 3,000 live in Wisconsin. In 1985 Northwestern changed its calculation of the annual dividend. In a 2001 suit by annuitants in Wisconsin state court, the judge declined to certify the class, ruling that a claim for damages creates individual issues that make class treatment imprudent, and a national class is not manageable given differences in applicable state laws. A second suit initially proposed a class limited to Wisconsin annuitants and sought only a declaratory judgment that the 1985 change is invalid. The suit was certified as a class action and the judge declared that Northwestern violated the contracts, breached fiduciary duties, and should pay substantial damages. The class then amended to seek damages for annuitants in every state. Contending that the amendment implicated the Class Action Fairness Act, 28 U.S.C. 1332(d), 1453, Northwestern filed notice of removal. The district court remanded the suit. The Seventh Circuit vacated and remanded, reasoning that the doctrine of law of the case does not apply on appeal and that it will review the state trial court decision on the merits as it would, had the identical decision been made initially by the federal district judge. View "Laplant v. NW Mut. Life Ins. Co." on Justia Law

The underlying suits arise from alleged defects in Kenmore-brand Sears washing machines sold in periods beginning in 2001 and 2004. One asserted a defect that causes mold; the other asserted a defect that stops the machine inopportunely. The district court denied certification of the class complaining of mold and granted certification of the class complaining of sudden stoppage. The Seventh Circuit affirmed certification of the stoppage claims and reversed denial of certification for the mold claims. Rule 23(b)(3) conditions maintenance of a class action on a finding “that the questions of fact or law common to class members predominate over any questions affecting only individual members.” The basic question in the litigation is: were the machines defective in permitting mold to accumulate and generate noxious odors? The question is common to the entire mold class, although the answer may vary with the differences in design. The individual questions are the amount of damages owed particular class members. It is more efficient for the question whether the washing machines were defective to be resolved in a single proceeding than for it to be litigated separately in hundreds of different trials View "Butler v. Sears, Roebuck & Co." on Justia Law

In 2010-2011 several hundred plaintiffs filed 10 lawsuits in Illinois state courts against Abbott, for personal injuries they allege were caused by Depakote, a prescription. Plaintiffs moved the Supreme Court of Illinois to consolidate and transfer their cases to St. Clair County, pursuant to Illinois Supreme Court Rule 384; the Supreme Court has not ruled. Abbott removed each of the cases to federal court, asserting that the motion to consolidate brought the cases under the “mass action” provision of the Class Action Fairness Act, 28 U.S.C. 1332(d)(11)(B)(i), which allows the removal of any case where 100 or more people propose to try their claims jointly. Cases filed in St. Clair and Madison counties were removed to the Southern District of Illinois and cases filed in Cook County were removed to the Northern District; plaintiffs moved to remand in both courts. The Northern District denied plaintiffs’ motion to remand. The Seventh Circuit held that removal was proper, rejecting plaintiffs’ argument that they did not propose a joint trial because their motion to consolidate did not address how the trials of the various claims in the cases would be conducted, other than proposing that they all take place in St. Clair County.View "Abbott Labs., Inc. v. Alexander" on Justia Law

In 2008, plaintiffs were inmates at the Indianapolis jail, which was operated by CCA under contract with the Marion County Sheriff’s Department. They claimed that the jail provided inadequate medical care and exposed inmates to inhumane living conditions so egregious that they amounted to cruel and unusual punishment in violation of the Eighth Amendment. The district court certified a class, but dismissed claims that the jail failed to provide adequate medical care, that the conditions of confinement inside the jail were inhumane, and that the procedures in the jail violated inmates’ rights under the Health Insurance Portability and Accountability Act and later entered summary judgment for CCA on the remaining issues. The Seventh Circuit affirmed, noting that CCA had produced an affidavit indicating that complained-of problems had been resolved. View "Kress v. CCA of TN, LLC" on Justia Law

In 2005 brokers sued Merrill Lynch under 42 U.S.C. 1981 and Title VII raising claims of racial discrimination and seeking to litigate as a class. They alleged that the firm’s “teaming” and account-distribution policies had the effect of steering black brokers away from the most lucrative assignments and prevented them from earning compensation comparable to white brokers. That litigation is ongoing. Three years later, Bank of America acquired Merrill Lynch, and the companies introduced a retention-incentive program that would pay bonuses to Merrill Lynch brokers corresponding to their previous levels of production. Brokers filed a second class-action suit. The district court dismissed. The court held that the retention program qualified as a production-based compensation system within the meaning of the section 703(h) exemption and was protected from challenge unless it was adopted with “intention to discriminate because of race.” 42 U.S.C. 2000e-2(h). The court then held that the complaint’s allegations of discriminatory intent were conclusory. The Seventh Circuit affirmed. It is not enough to allege that the bonuses incorporated the past discriminatory effects of Merrill Lynch’s underlying employment practices. The disparate impact of those employment practices is the subject of the first lawsuit, and if proven, will be remedied there. View "McReynolds v. Merrill Lynch & Co. Inc." on Justia Law

Holocaust survivors and heirs of other Holocaust victims sued, alleging that the Hungarian National Bank and Hungarian National Railway participated in expropriating property from Hungarian Jews during the Holocaust. Railway plaintiffs claimed subject matter jurisdiction under the expropriation exception to the Foreign Sovereign Immunities Act, 28 U.S.C. 1605(a)(3), and assert: takings in violation of international law, aiding and abetting genocide, complicity in genocide, violations of customary international law, unlawful conversion, unjust enrichment, fraudulent misrepresentation, and accounting. Bank plaintiffs claimed subject matter jurisdiction under the FSIA expropriation and waiver exceptions, 28 U.S.C. 1605(a)(1) and assert: genocide, aiding and abetting genocide, bailment, conversion, constructive trust, and accounting. They sought certifications as class actions, seeking to have the railway held responsible for approximately $1.25 billion, and the bank held jointly and severally responsible with private banks for approximately $75 billion. The district court declined to dismiss. The Seventh Circuit held that it had appellate jurisdiction under the collateral order doctrine and remanded with instructions that plaintiffs either exhaust available Hungarian remedies identified by defendants or present a legally compelling reason for failure to do so. The court should allow jurisdictional discovery with respect to whether the railway is engaged in “commercial activity” in the U.S. View "Abelsz v. Magyar Nemzeti Bank" on Justia Law

Holocaust survivors and heirs of other Holocaust victims sued, alleging that defendant banks participated in expropriating property from Hungarian Jews during the Holocaust. Invoking subject-matter jurisdiction under the Foreign Sovereign Immunities Act, 28 U.S.C. 1330(a), the Alien Tort Statute, 28 U.S.C.1350, and federal question jurisdiction, 28 U.S.C. § 1331, they alleged: genocide, aiding and abetting genocide, bailment, conversion, constructive trust, and accounting. Plaintiffs sought certification as a class action and asked that each bank be held jointly and severally responsible for damages of approximately $75 billion. This case and a parallel case against the Hungarian national railway have produced nine appeals and mandamus petitions. The district court declined to dismiss for lack of personal jurisdiction. The Seventh Circuit, noting that such a decision would ordinarily not be reviewable, stated that: “This is the rare case, however, in which it is appropriate for this court to exercise its discretion to issue a writ of mandamus to confine the district court to the exercise of its lawful jurisdiction” The court cited the extraordinary scale of the litigation, the inherent involvement with U.S. foreign policy, and the “crystal clarity” of the lack of foundation for exercising general personal jurisdiction over the banks. View "Abelesz v. OTP Bank" on Justia Law