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

Plaintiffs Republic Technologies (NA), LLC and Republic Tobacco, L.P. manufacture and market OCB brand organic hemp rolling papers, while defendant BBK Tobacco & Foods, LLP (HBI) markets RAW brand rolling papers. Republic sued HBI in 2016 for a declaration that OCB’s trade dress did not infringe RAW’s trade dress and later added false advertising claims. HBI counterclaimed, alleging that OCB’s trade dress infringed RAW’s trade dress. A jury trial in 2021 resulted in a mixed verdict, and the district court issued a permanent injunction against some of HBI’s advertising practices.The United States District Court for the Northern District of Illinois found HBI liable under Illinois law for false advertising but not under the federal Lanham Act. The jury also found that OCB’s trade dress for its 99-cent promotional pack infringed RAW’s trade dress, but not the full-priced pack. Republic’s motions for judgment as a matter of law and for a new trial were denied.The United States Court of Appeals for the Seventh Circuit reviewed the case. The court affirmed the district court’s decision, holding that the district court did not abuse its discretion in responding to the jury’s question about the definition of “consumer” and in denying Republic’s motion for a new trial. The court also upheld the jury’s finding of trade dress infringement, noting that sufficient evidence supported the jury’s verdict. Additionally, the court affirmed the district court’s permanent injunction, rejecting HBI’s arguments that the injunction was vague, overbroad, and improperly applied nationwide. The court concluded that the injunction was appropriately tailored to provide complete relief to Republic. View "Republic Technologies (NA), LLC v BBK Tobacco & Foods, LLP" on Justia Law

Plaintiffs David Vance Gardner and Gary Merchant filed a lawsuit against MeTV National Limited Partnership, alleging that MeTV violated the Video Privacy Protection Act (VPPA) by disclosing their personally identifiable information without consent. MeTV operates a website where users can watch classic TV shows. Users can sign up with their email addresses and zip codes to personalize their experience, which includes receiving reminders and using a channel finder feature. Plaintiffs claimed that MeTV embedded a "Meta pixel" in its videos, allowing Facebook to link users' viewing habits to their Facebook accounts for targeted advertising.The United States District Court for the Northern District of Illinois dismissed the plaintiffs' complaint, ruling that they were not "consumers" under the VPPA because they did not pay for MeTV's services. The court allowed the plaintiffs to file an amended complaint, which was also dismissed on the same grounds.The United States Court of Appeals for the Seventh Circuit reviewed the case and reversed the district court's decision. The appellate court held that the term "consumer" under the VPPA includes anyone who subscribes to services from a video tape service provider, regardless of whether they pay money. The court found that providing personal information, such as an email address and zip code, in exchange for personalized services constitutes a subscription. Therefore, the plaintiffs are considered "consumers" under the VPPA, and their complaint should not have been dismissed.The Seventh Circuit remanded the case for further proceedings consistent with its opinion, allowing the plaintiffs' claims to proceed. View "Gardner v MeTV" on Justia Law

Valerie Thomas received a notice claiming she owed $187, which she disputed. Resurgent Capital Services notified TransUnion about the debt before opening Thomas's letter and reported the dispute 29 days later. Thomas sued under the Fair Debt Collection Practices Act, seeking statutory damages for the delay. A jury awarded her $250. The clerk delayed entering the judgment, which was eventually entered on June 11, 2024. Resurgent filed a notice of appeal four days earlier, narrowly avoiding missing the appeal deadline.The United States District Court for the Northern District of Illinois concluded that Resurgent should have notified TransUnion earlier. Resurgent appealed, arguing that Thomas lacked standing because the delay did not injure her. District Judge Bucklo initially ruled that Thomas was injured as a matter of law, referencing Ewing v. Med-1 Solutions, LLC, which treated the absence of a dispute notice as defamation. However, the court noted that injury must be proven and not assumed.The United States Court of Appeals for the Seventh Circuit reviewed the case. It found that Thomas did not provide evidence of injury before or during the trial. She did not attempt to show that her credit score or insurance costs were affected by the delay. Judge Bucklo had precluded Thomas from introducing evidence of actual injury, and Thomas did not challenge this ruling or seek a new trial. The appellate court held that Thomas lacked standing to sue due to the absence of evidence showing injury. Consequently, the judgment of the district court was reversed, and the case was remanded with instructions to dismiss for lack of a justiciable controversy. View "Thomas v LVNV Funding, LLC" on Justia Law

James Hulce, on behalf of himself and others similarly situated, filed a putative class action suit against Zipongo Inc., doing business as Foodsmart. Hulce alleged that Foodsmart violated the Telephone Consumer Protection Act (TCPA) by making unsolicited calls and sending text messages to him, despite his number being on the national do-not-call registry. Foodsmart's communications were about free nutritional services offered through Hulce's state and Medicaid-funded healthcare plan, Chorus Community Healthcare Plans (CCHP).The United States District Court for the Eastern District of Wisconsin granted Foodsmart's motion for summary judgment. The court found that the calls and messages did not constitute "telephone solicitations" under the TCPA because they were not made for the purpose of encouraging the purchase of services. Instead, the communications were about services that were free to Hulce, with Foodsmart billing CCHP directly.The United States Court of Appeals for the Seventh Circuit reviewed the case de novo. The court affirmed the district court's decision, holding that the calls and messages did not fall within the definition of "telephone solicitation" under the TCPA. The court concluded that "telephone solicitation" requires the initiation of a call or message with the purpose of persuading or urging someone to pay for a service. Since Foodsmart's communications were about free services and did not encourage Hulce to make a purchase, they did not meet this definition. The court emphasized that the purpose of the call must be to persuade someone who makes the purchasing decision to buy the services, which was not the case here. View "Hulce v Zipongo Inc." on Justia Law

Eido Hussam Al-Nahhas, an Illinois resident, took out four loans from Rosebud Lending LZO, operating as ZocaLoans, with interest rates up to nearly 700%, far exceeding Illinois law limits. Al-Nahhas alleged that ZocaLoans was a front for two private equity firms, 777 Partners, LLC, and Tactical Marketing Partners, LLC, to evade state usury laws by claiming tribal sovereign immunity through the Rosebud Sioux Tribe. He sued ZocaLoans and the firms for violating Illinois usury statutes and the federal Racketeer Influence and Corrupt Organizations Act.The defendants participated in litigation for fourteen months, including filing an answer, engaging in discovery, and attending status conferences. They later sought to compel arbitration based on an arbitration provision in the loan agreements. The United States District Court for the Northern District of Illinois denied the motion, finding that the defendants had waived their right to compel arbitration by participating in litigation.The United States Court of Appeals for the Seventh Circuit reviewed the case. The court affirmed the district court's decision, holding that the defendants waived their right to arbitrate through their litigation conduct. The court also found that the case was not moot despite the settlement between Al-Nahhas and ZocaLoans, as punitive damages were still at issue. The court granted the parties' motions to file documents under seal. View "Hussam Al-Nahhas v 777 Partners LLC" on Justia Law

Michael Wood incurred credit card debt with Pentagon Federal Credit Union (PenFed) and defaulted. PenFed reported the debt to credit reporting agencies, but Wood disputed the debt in writing. PenFed investigated and concluded the debt was valid. Later, Security Credit Services, LLC (SCS) purchased Wood's debt from PenFed and reported it as delinquent to a credit reporting agency without noting Wood's dispute. Wood alleged that SCS violated the Fair Debt Collection Practices Act (FDCPA) by failing to communicate that he disputed the debt.The United States District Court for the Northern District of Illinois granted summary judgment in favor of SCS. The court found that Wood had standing to sue but concluded that PenFed reasonably interpreted Wood's lack of response to its letter as an indication that he no longer disputed the debt. Therefore, the court determined that SCS did not know and should not have known that Wood still disputed the debt.The United States Court of Appeals for the Seventh Circuit reviewed the case. The court held that Wood had standing because the harm he alleged was analogous to defamation, a recognized common law injury. The court also found that there was a genuine issue of material fact regarding whether SCS should have known about Wood's dispute. Specifically, the court noted conflicting evidence about SCS's understanding of what constitutes a disputed account and whether SCS shared PenFed's interpretation that Wood's silence meant he no longer disputed the debt. The court concluded that SCS's failure to communicate Wood's dispute could be considered negligent under the FDCPA. Consequently, the Seventh Circuit reversed the district court's summary judgment and remanded the case for further proceedings. View "Wood v. Security Credit Services, LLC" on Justia Law

Linda Thompson filed a putative class action against the Army and Air Force Exchange Service (the "Exchange") in Illinois state court, alleging that the Exchange printed her credit card’s expiration date on purchase receipts, violating the Fair and Accurate Credit Transactions Act (FACTA). The Exchange removed the case to federal court under 28 U.S.C. § 1442(a)(1), which allows federal agencies to remove cases to federal court. Thompson moved to remand the case to state court, arguing lack of Article III standing, while the Exchange moved to dismiss under Federal Rule of Civil Procedure 12(b)(1).The United States District Court for the Southern District of Illinois denied Thompson’s motion to remand and granted the Exchange’s motion to dismiss for lack of subject matter jurisdiction. The court held that the Exchange, as a federal entity, could remove the case without asserting a colorable federal defense and had an absolute right to litigate in federal court.The United States Court of Appeals for the Seventh Circuit reviewed the case. The court agreed that the Exchange did not need to present a federal defense to remove the case. However, it found that the district court erred in dismissing the suit. The Seventh Circuit held that under 28 U.S.C. § 1447(c), when a federal court lacks subject matter jurisdiction over a removed case, it must remand the case to state court. The court noted that Thompson’s lack of Article III standing did not preclude state court jurisdiction, as state courts are not bound by Article III constraints. Consequently, the Seventh Circuit vacated the district court’s judgment and remanded the case with instructions to remand it to state court. View "Thompson v Army and Air Force Exchange Service" on Justia Law

Day Pacer LLC and EduTrek L.L.C., along with their managing members, were responsible for millions of telemarketing calls to consumers on the National Do Not Call Registry. The Federal Trade Commission (FTC) brought a civil enforcement action against them, resulting in the district court finding the defendants liable on summary judgment and awarding over $28 million in civil penalties. The defendants appealed the court’s liability findings and damages award.The United States District Court for the Northern District of Illinois found the companies liable for violating the Telemarketing Sales Rule (TSR) by making calls to consumers on the registry without proper consent. The court also held the individual defendants liable, as they had control over the companies and knew or should have known about the illegal activities. The court substituted the estate of a deceased defendant, David Cumming, into the litigation, finding the penalties sought were remedial. The court awarded a $28.6 million penalty and issued a permanent injunction against the defendants.The United States Court of Appeals for the Seventh Circuit affirmed the district court’s finding of liability but reversed and remanded the decision to substitute Cumming’s estate and the damages award. The appellate court held that the penalties sought were penal, not remedial, and thus did not survive Cumming’s death. The court also found that the district court did not consider all mandatory statutory factors in calculating the damages award, constituting an abuse of discretion. The court affirmed the broad injunction against the defendants, prohibiting them from engaging in any telemarketing activities. View "FTC v. Day Pacer LLC" on Justia Law

Santanu Das, a sales associate at Tata Consultancy Services, participated in a compensation incentive plan that promised a bonus exceeding $400,000 for achieving certain sales targets. Das met the target but was paid less than $100,000. He sued Tata under Illinois law, which requires employers to pay all agreed-upon compensation. Tata argued that disclaimers in the incentive plan negated any agreement to pay the bonus. The district court dismissed Das’s complaint, leading to this appeal.The United States District Court for the Northern District of Illinois initially dismissed Das’s claims without prejudice. Das amended his complaint, adding breach of contract and fraudulent misrepresentation claims. The district court dismissed the repleaded claims with prejudice but allowed Das to replead the new claims. Das chose to appeal only the Wage Act and fraudulent misrepresentation claims. The district court found that the disclaimers in the incentive plan prevented the formation of an agreement to pay wages and that Das’s fraudulent misrepresentation claim lacked the necessary particularity.The United States Court of Appeals for the Seventh Circuit reviewed the case de novo. The court found that Illinois law does not treat disclaimers as necessarily preventing the formation of mutual assent to terms. The court noted that past practices between Das and Tata could establish mutual assent. The court concluded that Das had plausibly alleged that Tata agreed to pay him the full bonus, reversing the district court’s dismissal of the Wage Act claim. However, the court affirmed the dismissal of the fraudulent misrepresentation claim, as Das failed to allege a scheme to defraud.The Seventh Circuit reversed the district court’s decision on the Wage Act claim and remanded the case for further proceedings. The dismissal of the fraudulent misrepresentation claim was affirmed. View "Das v. Tata Consultancy Services Limited" on Justia Law

Pilar Domer placed an online order for a can of paint from Menards, selecting an in-store pickup option that incurred a $1.40 fee. Domer later filed a class action lawsuit against Menards, alleging that the company failed to disclose the pickup fee and used it to manipulate prices. Menards moved to compel arbitration based on an arbitration clause in their online terms of order. The district court granted Menards' motion, finding that Domer had agreed to the arbitration terms and that her claims fell within the scope of the arbitration agreement.The United States District Court for the Western District of Wisconsin ruled in favor of Menards, determining that the arbitration agreement was enforceable. The court found that Menards provided adequate notice of the terms and that Domer had unambiguously agreed to them by completing her purchase. The court also concluded that Domer’s claims were related to her purchase contract with Menards and thus fell within the scope of the arbitration agreement.On appeal, the United States Court of Appeals for the Seventh Circuit affirmed the district court's decision. The appellate court held that Menards' website provided reasonably conspicuous notice of the terms, and Domer unambiguously manifested her assent by submitting her order. The court also found that Domer’s claims, which included violations of consumer protection laws and unjust enrichment, arose from or related to her purchase contract with Menards. Therefore, the claims were within the scope of the arbitration agreement. The Seventh Circuit concluded that the arbitration agreement was valid and enforceable, and Domer’s claims must be arbitrated. View "Domer v. Menard, Inc." on Justia Law