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

Davis learned that the government was suspending sale of new 30-year bonds.The information was embargoed until 10 AM. He passed the information to traders, who bought futures contracts with an eight-minute head start and reaped profits. The brokerage settled SEC charges. PPP sought to represent a class of traders who held short positions in futures when the brokerage took the long side. The district judge concluded that such a class would be unrelated to trading that occurred during eight minutes of October 31, 2001 and denied certification. Investors, all of whom held short positions during the eight minutes, filed their own suit. The court dismissed because the two-year limitations period (7 U.S.C. 25(c)), had expired, rejecting an argument that claims did not accrue until the SEC filed its complaint. Meanwhile PPP's proposal for a reduced class was rejected. PPP accepted an offer of judgment under Fed. R. Civ. P. 68. The court rejected PPP's proposal to continue the suit. The investor suit plaintiff sought to intervene as class representative. The district court denied that motion. The Seventh Circuit affirmed. With respect to the limitations period, the court noted when the investors were aware of their harm. There cannot be a class action without a viable representative and there was no such representative involved in the appeal.

Plaintiffs want to represent a class of more than 100 people with stakes of more than $5 million and invoked federal jurisdiction under 28 U.S.C. 1332(d)(2), the Class Action Fairness Act. They claim that the company violates the Illinois Consumer Fraud Act prohibition on pyramid schemes, 815 ILCS 505/2A(2). The company's customers sell each other the right to act as travel agencies, as well as selling travel services to the public. The district court did not decide whether the operation is a pyramid scheme, but ruled that transactions with residents of states other than Illinois are outside the Act, dismissed the non-Illinois plaintiffs, and decided that the suit is an intra-state controversy that belongs in state court. The Seventh Circuit vacated. Section 1332(d)(4) requires the court to decline jurisdiction when at least two-thirds of the members of the proposed class reside in the same state as the principal defendant. The class that plaintiffs propose is nationwide. Subject-matter jurisdiction depends on the state of things when suit is filed; what happens later does not detract from jurisdiction already established. While the pleadings do not establish that Illinois law does apply, they do not defeat the application of that law.

Plaintiff found a $20 parking citation on his windshield and initiated a class action, claiming that the inclusion of personal information, such as his driver's license number, address, and weight, violated the Driver's Privacy Protection Act, 18 U.S.C. 2721, which generally makes it unlawful to disclose personal information contained in a motor vehicle record. The district court dismissed and the Seventh Circuit affirmed. While the citation did amount to a "disclosure," the Act includes an exception for service of process.

Employees filed a proposed class action in state court, alleging violations of the minimum wage law. The employer removed to federal court. The district court found that the employer failed to show that the amount in controversy exceeds $5,000,000, as required for jurisdiction under the Class Action Fairness Act, 28 U.S.C. 1453(c)(1). The Seventh Circuit reversed and remanded. After the employer explained its calculations showing that the amount in controversy exceeded $5 million, in order to hold that there was no jurisdiction, the district court had to find that it was legally impossible for plaintiffs to recover that much. The employer's calculations regarding the accrual of the statutory penalty are a reasonable interpretation of the Illinois Minimum Wage Law statutory language.

Defendants faxed unsolicited advertisements to plaintiff and others, violating the Telephone Consumer Protection Act, 47 U.S.C. 227. One of the recipients filed a proposed class action in Wisconsin, but dismissed its complaint after the four-year limitations period had run, but before the class was certified. Plaintiff's motion to intervene was denied. The district court denied a motion to dismiss plaintiff's subsequent complaint, reasoning that the limitations period was tolled by the state court filing. The Seventh Circuit affirmed on interlocutory appeal.

In 1995 the city gave an examination for positions in its fire department and rated applicants on a scale between highly qualified and not qualified, based on scores. "Qualified" applicants were told that they were unlikely to be hired. From 1996 through 2001, the city hired random batches from the well-qualified pool. In 1997 a person in the qualified pool filed a charge of discrimination, claiming disparate impact on African-American applicants (42 U.S.C. 2000(e)). After receiving right-to-sue letters from the EEOC, applicants filed a class action in 1998. After a trial, the court rejected a business necessity defense and ruled in favor of the plaintiffs. On remand, after the Supreme Court held that most of the claims were timely, the Seventh Circuit affirmed. The city conceded that the cut-off score in the ranking system had a disparate impact, so each "batch" hiring had a similar impact. While hiring according to a list, perhaps hiring highest scorers first, might have served a business necessity, the random selection of batches amounted to repeated "use" of a tool that created disparate impact.

Purchasers of common stock brought a class action alleging violations of federal securities laws; the case settled for $190,000,000. The same underlying facts resulted in an action by employees and former employees under ERISA; the company's 401(k) profit-sharing plan claimed a share of the settlement. The district court rejected the claim and the Seventh Circuit affirmed. Although individual plan participants did not purchase publicly-traded stock, the plan itself did so and is not excluded from the class definition of persons who purchased publicly traded common stock. The definition does, however, exclude any âaffiliateâ of the company and the plan is an affiliate. Plan administrators are either directors of the company or appointed by directors.

Employees filed a class action in Illinois state court, concerning violations of wage and hour laws. The company removed the case, pursuant to the Class Action Fairness Act, 28 U.S.C. 1453(c)(1). The federal district court remanded to state court. The Seventh Circuit reversed, holding that the company presented plausible evidence that the case satisfied the jurisdictional amount in controversy requirement ($5,000,000) and the employees did not demonstrate that it was legally impossible for them to recover that amount.