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

A 2015 Wired magazine article described a controlled hack of a Jeep Cherokee driven by one of the magazine’s journalists. Cybersecurity researchers exploited a vulnerability in the Jeep’s “uConnect” infotainment system, designed by Harman, for installation in vehicles manufactured by FCA (formerly Chrysler). FCA immediately issued a recall and provided a free software update to patch the vulnerability. Federal regulators supervising the recall determined that the patch eliminated the vulnerability. Other than the Jeep in the Wired test, no other vehicle was successfully hacked.Four plaintiffs sued FCA and Harman on behalf of every consumer who had purchased or leased a 2013–2015 Chrysler vehicle equipped with the uConnect infotainment system, asserting federal and state warranty and consumer-fraud claims. The plaintiffs argued that although the alleged defect never manifested again after the Wired hack, they paid more for their vehicles than they would have if they had known about the cybersecurity vulnerability. After discovery closed, faced with a factual challenge to standing, the plaintiffs failed to provide evidence in support of their claimed overpayment injury.The Seventh Circuit affirmed the dismissal of the case. When litigation moves beyond the pleading stage and Article III standing is challenged as a factual matter, plaintiffs cannot rely on mere allegations of injury; they must provide evidence of a legally cognizable injury in fact. These plaintiffs continued to rely on allegations and legal arguments. View "Flynn v. FCA US LLC" on Justia Law

In a nationwide class action on behalf of all customers of GLV, which operates in several states as Sports Performance Volleyball Club, the district court certified a class limited to customers of GLV’s Illinois locations. Later, the judge concluded that Mullen, who asserts that GLV committed fraud by failing to disclose allegations of sexual abuse by a coach, was an unsuitable class representative because Mullen had not been injured and invited her to find a substitute. She did not. The class was never decertified.The Seventh Circuit affirmed the rejection of the suit on summary judgment after noting that abstention might have been appropriate. All of the litigants are citizens of Illinois, the claim rests on state law, and the remaining stakes are modest. The sole asserted basis of federal jurisdiction is the Class Action Fairness Act, which applies to class actions with more than 100 class members, stakes exceeding $5 million, and minimal diversity of citizenship. 28 U.S.C. 1332(d)(2). Illinois law requires the plaintiff to show that she was “in some manner, deceived” by misrepresentation or material omission. Mullen was aware of the allegations against the coach. The court noted that the outcome does not bind any other person whose children attended the Club. View "Mullen v. GLV, Inc." on Justia Law

Following a False Claims Act lawsuit against Stericycle, customers were leaving and the price of Stericycle’s common stock dropped. On behalf of the company’s investors, Florida pension funds filed a securities fraud class action against Stericycle, its executives, board members, and the underwriters of its public offering, alleging that the defendants had inflated the stock price by making materially misleading statements about Stericycle’s fraudulent billing practices. The parties agreed to settle for $45 million. Lead counsel moved for a fee award of 25 percent of the settlement, plus costs. Petri, a class member, objected to the fee award, arguing that the amount was unreasonably high given the low risk of the litigation and the early stage at which the case settled. Petri moved to lift the stay the court had entered while the settlement agreement was pending so that he could seek discovery regarding class counsel’s billing methods, the fee allocation among firms, and counsel’s political and financial relationship with a lead plaintiff, a public pension fund.The district court approved the settlement and the proposed attorney fee and denied Petri’s discovery motion. The Seventh Circuit vacated. The district court did not give sufficient weight to evidence of ex-ante fee agreements, all the work that class counsel inherited from earlier litigation against Stericycle, and the early stage at which the settlement was reached. The court upheld the denial of the objector’s request for discovery into possible pay-to-play arrangements. View "Petri v. Stericycle, Inc." on Justia Law

In January 2019, Ali brought this civil rights action against Chicago and several police officers, alleging that the officers followed a city policy “of refusing to release on bond an arrestee taken into custody on an arrest warrant issued by an Illinois state court outside of Cook County.” Days before the deadline for completing fact discovery, Ali moved to certify a class. The district court granted the city’s motion to strike, noting that Ali had not added class allegations to his complaint. Ali sought leave to amend his complaint to include class allegations, arguing that he did not have evidentiary support for the existence of the city policy until a November 2019 deposition. The city replied that it had acknowledged the policy months earlier. The district court denied Ali's motion. Weeks later, Ali settled his case.On January 25, the district court dismissed the case without prejudice. Also on January 25, Miller moved to intervene under Rule 24, asserting that he was a member of Ali’s proposed class. With his motion to intervene pending, Miller filed a notice of appeal from the January 25 order. On March 24, with that appeal pending, the district court denied Miller’s motion to intervene as untimely. The Seventh Circuit affirmed. There was no operative class action complaint. Miller’s motion to intervene was untimely; he is not a party to the lawsuit and cannot pursue other challenges. View "Miller v. City of Chicago" on Justia Law

Inmates who were housed by three Illinois Department of Corrections centers between April-July 2014, alleged that the prison-wide shakedowns conducted violated their constitutional and statutory rights, 42 U.S.C. 1983. The shakedowns involved uniformed tactical teams called “Orange Crush” that operated according to a uniform plan, which involved a loud entry, strip searches, handcuffing, and other procedures involving allegedly humiliating physical contact. The inmates allege that the planning and execution of the shakedowns violated the Eighth Amendment because it was designed to inflict pain and humiliation.The Seventh Circuit affirmed class certification. The plaintiffs satisfied the “commonality” requirement because they alleged that the defendants acted pursuant to a common policy and implemented the same or similar procedures at each institution and that the challenge was to the constitutionality of that common plan as enacted. The claims require resolution of key common factual and legal questions, specifically: “whether Defendants developed and carried out a uniform policy and practice that had the effect of depriving the putative class members of their Eighth Amendment right to be free from cruel and unusual punishment; whether the shakedowns were executed in the manner Defendants contend or as Plaintiffs claim; whether Defendants engaged in a conspiracy to deprive the putative class members of their constitutional rights through the shakedowns; and whether the Defendants knew of, approved, facilitated and/or turned a blind eye to the alleged unconstitutional shakedowns.” Those questions do not require individualized consideration. View "Ross v. Gossett" on Justia Law

Gorss operated a Super 8 Motel as a franchisee of Wyndham. Gorss agreed to furnish the facility in accordance with Wyndham’s standards and to purchase supplies and equipment from approved vendors. Brigadoon sells fitness equipment and is an approved vendor for Wyndham franchisees. Wyndham periodically provided contact information for its franchisees, including fax numbers, to Brigadoon. Gorss also attended trade shows and personally provided contact information to Wyndham-approved suppliers. Gorss received a fax from Brigadoon advertising its fitness equipment. The fax was sent to more than 10,000 recipients. Brigadoon formulated the list of recipients from a variety of sources.Gorss filed a purported class action under the Telephone Consumer Protection Act, 47 U.S.C. 227(b)(1)(c), seeking statutory penalties. The district court declined to certify a class, finding that common issues did not predominate. The Seventh Circuit affirmed, rejecting Gorss’s argument that the court should have required Brigadoon to show with specific evidence that a significant percentage of the class is subject to the “prior permission” defense. Gorss offered no generalized class-wide manner to resolve the permission question. Brigadoon’s claim of permission was not speculative, vague, or unsupported; it was based on a multitude of contracts, relationships, memberships, and personal contacts. View "Gorss Motels, Inc. v. Brigadoon Fitness Inc." on Justia Law

A putative class of medical providers sued, alleging a conspiracy to drive up the prices of syringes and safety IV catheters (Products). Their first complaint, alleging a hub‐and‐spokes conspiracy ( Sherman Act, 15 U.S.C. 1) between manufacturer, BD, group purchasing organizations, and four distributors, was dismissed because the Providers failed to allege that the distributors coordinated with each other in furtherance of the conspiracy. In an amended complaint, the Providers abandoned their horizontal conspiracy allegations and alleged two vertical conspiracies, one between BD and McKesson and another between BD and Cardinal Health.The district court dismissed, noting that because the named plaintiffs do not purchase the Products directly from Cardinal, they lack “antitrust standing” to sue Cardinal. The Seventh Circuit affirmed. . The Providers cannot sue Cardinal under Article III because their injury is not fairly traceable to Cardinal’s conduct; precedent precludes the suit because they do not purchase the Products from either member of the BD‐Cardinal conspiracy. The Providers did not plausibly establish that vertical conspiracies involving just two distributors and BD could influence the prices that the Providers pay, regardless of which distributor they purchase from, and regardless of the fact that there are at least four major distributors. View "Marion Diagnostic Center, LLC v. Becton Dickinson & Co." on Justia Law

Schutte retained a law firm to seek compensation for personal injuries. The firm requested electronic copies of Schutte’s medical records. Ciox produced the electronic copies but charged “Per Page Copy (Paper)” charges of $59.23 and an “Electronic Data Archive Fee” of $2.00. A Wisconsin statute lists specific maximum charges for paper, microfiche, or microfilm copies, X-ray prints, and for certification of copies, shipping, and retrieval. The statute is silent regarding charges for electronic copies.Schutte filed a putative class action, claiming that the class includes “several thousand persons and entities.” In addition to compensatory damages, she sought exemplary damages up to $25,000 per claimant, as authorized by Wisconsin law for “knowing and willful” violations. Ciox removed the action to federal court under the Class Action Fairness Act (CAFA), arguing: Schutte’s proposed class has at least 100 members; there is at least minimal diversity of citizenship between Schutte and the defendants; and based on the complaint’s allegations, the amount in controversy exceeds $5 million, 28 U.S.C. 1332(d).The Seventh Circuit affirmed the denial of a motion to remand to state court. Ciox provided a “plausible good faith estimate” that the amount in controversy exceeds $5 million. The local controversy exception does not apply because the factual allegations in a recent Montana class action against Ciox were “identical” to Schutte’s. View "Schutte v. Ciox Health, LLC" on Justia Law

Simpson unsuccessfully applied to work as a Correctional Officer at the Cook County Department of Corrections four times in 2014-2017. Simpson believed the hiring practices underlying those rejections violated his rights—and those of other unsuccessful Black applicants—under Title VII of the Civil Rights Act, 42 U.S.C. 2000e-2(a)(1). Invoking disparate treatment and disparate impact theories, Simpson’s class action complaint alleged that, through the use of a five-step hiring process for correctional officers, the Department both intended to discriminate against Black applicants and succeeded in producing that result. The district court denied Simpson’s motion for class certification, finding that none of his proposed classes—a general class of all unsuccessful applicants and five subclasses of candidates dismissed at each step of the hiring process—satisfied Rule 23(a)(2)’s requirement that they present “questions of law or fact common to the class.”The Seventh Circuit vacated. The district court’s analysis apparently merged Simpson’s disparate impact claims with his disparate treatment claims for intentional discrimination. While disparate treatment claims may require a more searching commonality inquiry, disparate impact claims most often will not: the common questions are whether the challenged policy has in fact disparately impacted the plaintiff class and, if so, whether that disparate impact is justified by business necessity. The court did not clearly delineate its reasoning for declining to certify three of Simpson’s disparate impact subclasses. View "Simpson v. Dart" on Justia Law

In 2010, Leszanczuk executed a mortgage contract, securing a loan on her Illinois residence. The mortgage was insured by the FHA. After Carrington acquired the mortgage, Leszanczuk contacted Carrington by phone in December 2016 to make her December payment. Leszanczuk asserts that Carrington told her that her account was not yet set up in their system and that her account was in a “grace period.” In early 2017 Carrington found Leszanczuk to be in default and conducted a visual drive-by inspection of Leszanczuk’s property. Carrington charged Leszanczuk $20.00 for the inspection and disclosed the fee in her March 2017 statement. Leszanczuk claims Carrington knew or should have known that she occupied her property because of the phone conversation and Carrington mailed monthly mortgage statements to the property’s address.Leszanczuk sued Carrington for breach of the mortgage contract and for violations of the Illinois Consumer Fraud and Deceptive Business Practices Act, on behalf of putative nationwide and Illinois classes. She alleged that a HUD regulation limits the fees Carrington may charge under the contract and that the inspection fee was an unfair practice. The Seventh Circuit affirmed the dismissal of the complaint. The mortgage contract expressly permits the disputed fee. Leszanczuk has failed to adequately allege that the inspection fee offended public policy, was oppressive, or caused substantial injury. View "Leszanczuk v. Carrington Mortgage Services, LLC" on Justia Law