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

Metroplex Communications, Inc., which operates several local news outlets in Illinois, earns revenue by selling advertising space. Meta Platforms, Inc., the owner of Facebook, also sells ads and competes for the same local advertisers. Metroplex, representing a putative class of small businesses that compete with Meta for advertisers, alleged that Meta engaged in unlawful, anticompetitive practices by misrepresenting the reach and effectiveness of its Facebook advertisements, thereby drawing advertisers away from other platforms. The suit is based on claims under the Lanham Act and the Illinois Uniform Deceptive Trade Practices Act, seeking disgorgement of profits Meta allegedly earned through misleading conduct. Although Metroplex had purchased Facebook ads in the past, its lawsuit was brought in its capacity as a competitor, not as an ad purchaser.Meta moved to compel arbitration in the United States District Court for the Southern District of Illinois, arguing that Metroplex’s prior ad purchases subjected it to an arbitration clause in Meta’s Commercial Terms. The district court denied the motion, reasoning that Metroplex’s claims arose from its status as a competitor and not from its own ad purchases or contractual relationship as an ad buyer. The court found the claims to be outside the scope of the arbitration clause.On appeal, the United States Court of Appeals for the Seventh Circuit reviewed the scope of the arbitration clause de novo, applying Illinois law. The court held that Metroplex’s unfair competition claims were not sufficiently connected to Metroplex’s ad purchases or Meta’s Commercial Terms to fall within the arbitration agreement. The claims centered on alleged anticompetitive conduct and public misrepresentations, unrelated to Metroplex’s own limited use of Meta’s ad services. The court affirmed the district court’s denial of Meta’s motion to compel arbitration, holding that the arbitration clause did not apply to Metroplex’s claims as a competitor. View "Metroplex Communications, Inc. v Meta Platforms, Inc." on Justia Law

The plaintiff received two pre-recorded telemarketing calls from a vacation property company, which he alleged were made without his consent in violation of the Telephone Consumer Protection Act. The company had used third-party vendors to conduct a large-scale telemarketing campaign, targeting individuals whose phone numbers had been obtained from opt-in websites. The plaintiff, on behalf of himself and a proposed class, filed suit against the company in April 2019, asserting that these calls violated federal law.In the United States District Court for the Northern District of Illinois, the defendant engaged in extensive litigation over the course of four years. It filed answers with affirmative defenses, participated in class-related discovery, and litigated several motions, including opposing class certification and filing for summary judgment. Notably, the defendant did not assert arbitration as a defense until after the class was certified and significant litigation had occurred. When it finally raised arbitration—claiming that many class members had agreed to arbitrate through opt-in websites—the district court refused to allow the late amendment to add this defense, finding that it was too late and that the right to arbitrate had been waived. The district court later denied the defendant’s motion to compel arbitration, granted summary judgment to the plaintiff and the class, and ordered further settlement negotiations.Upon appeal, the United States Court of Appeals for the Seventh Circuit clarified the appropriate standard of review for orders denying motions to compel arbitration, holding that legal rulings with precedential effect are reviewed de novo, while the ultimate waiver determination is reviewed for clear error. The court further held that a defendant’s conduct prior to class certification is relevant in assessing waiver of the right to arbitrate. Finding no clear error in the district court’s conclusion that the defendant waived its arbitration rights by failing to timely assert them, the Seventh Circuit affirmed the judgment. View "Moore v Club Exploria, LLC" on Justia Law

Several individuals who purchased and used Samsung smartphones and tablets alleged that the preinstalled Samsung Gallery app created and stored face templates by scanning photographs for facial geometry, thereby capturing biometric data. They claimed that Samsung’s proprietary algorithm measured unique facial features, and the resulting face templates were stored locally on their devices. Plaintiffs argued that Samsung controlled the biometric data, since users had no way to disable the facial recognition features, and Samsung’s privacy policy indicated it “may collect” such information. They further contended that Samsung lacked a written policy for retention and destruction of biometric data and failed to provide required disclosures or obtain releases, in violation of the Illinois Biometric Privacy Information Act (“BIPA”).The plaintiffs initially filed their suit in Illinois state court, seeking class certification for all Illinois residents whose biometric data was collected or stored by Samsung. Samsung removed the case to the United States District Court for the Northern District of Illinois under the Class Action Fairness Act. After several amended complaints and motions to dismiss, the district court ultimately granted Samsung’s third motion to dismiss with prejudice, finding that the plaintiffs failed to plausibly allege that Samsung possessed or exerted control over the biometric data stored on users’ devices.The United States Court of Appeals for the Seventh Circuit reviewed the district court’s dismissal de novo. The court held that under both Illinois law and BIPA, “possession,” “collection,” and “capture” require a degree of control by the company over the biometric data. Because the plaintiffs’ allegations did not plausibly show that Samsung itself controlled the facial geometry data generated by the app, the Court affirmed the district court’s judgment dismissing the complaint. View "G.T. v Samsung Electronics America, Inc." on Justia Law

The plaintiff purchased a portable speaker from a Wisconsin-based retailer, believing she was receiving a $30 discount off a regular price of $129.99. However, she later discovered that the retailer almost always sold the speaker at the “sale” price of $99.99 and rarely at the higher “regular” price. She claimed she would not have bought the speaker if she had known this, and brought suit on behalf of a proposed nationwide class, alleging the retailer had violated Wisconsin’s Unfair Trade Practices Act by using misleading price comparison advertising. The suit was filed in federal court, invoking the Class Action Fairness Act as the basis for subject matter jurisdiction.The United States District Court for the Western District of Wisconsin dismissed the complaint for lack of subject matter jurisdiction, finding that the plaintiff had not adequately alleged pecuniary loss under Wisconsin law. The court reasoned that, for damages under Wisconsin’s Unfair Trade Practices Act, the plaintiff must plead that the product was defective or worth less than the price paid, or otherwise did not receive the benefit of the bargain. Because the plaintiff did not make such allegations, the court concluded it was legally impossible for her to meet the required amount-in-controversy for class action jurisdiction.The United States Court of Appeals for the Seventh Circuit reviewed the dismissal de novo. It found Wisconsin law unclear on whether a consumer who was misled by false price comparison advertising, but received a product worth the purchase price, suffers a pecuniary loss. Noting a split in authority and uncertainty in Wisconsin precedent, the appellate court certified this question to the Wisconsin Supreme Court and stayed further proceedings pending an answer. View "Cortez Gomez v Kohl's Corporation" on Justia Law

In this case, the plaintiff executed a deed in lieu of foreclosure on her home in 2016 after defaulting on her mortgage, and subsequently received a Chapter 13 bankruptcy discharge in 2018. When she reviewed her credit report in 2022, the report stated that she had both a bankruptcy discharge and an outstanding balance on her mortgage account, along with a balloon payment due in the future. She argued that this combination of information was inaccurate or misleading, given her bankruptcy discharge and the deed in lieu of foreclosure.The United States District Court for the Northern District of Illinois dismissed her complaint. The district court determined that her claim depended on resolving legal questions—specifically, whether her mortgage was discharged in bankruptcy and the effect of the deed in lieu of foreclosure on her debt status. The court found that these were legal issues and that the Fair Credit Reporting Act (FCRA) does not require a consumer reporting agency to resolve such questions. Therefore, the court concluded that she failed to allege a factual inaccuracy that could support a claim under the FCRA.The United States Court of Appeals for the Seventh Circuit reviewed the dismissal de novo. It affirmed the lower court’s judgment, holding that the FCRA does not obligate credit reporting agencies to make legal determinations regarding the discharge status or enforceability of debts. The court reasoned that the alleged inaccuracy was not objectively apparent from the records available to the credit reporting agency, and resolving it would require legal analysis beyond the agency’s competency. Therefore, the plaintiff’s claim could not proceed, and the district court's dismissal was affirmed. View "Sykes v Experian Information Solutions, Inc." on Justia Law

Jason and Abigail Franco purchased a yogurt product marketed as “sugar free” by Chobani, LLC. The product, however, contained four grams per serving of allulose, a naturally occurring sweetener. The Francos alleged that Chobani’s labeling was deceptive and violated various state consumer protection laws. Their claims depended on whether allulose is considered a “sugar” under federal regulations; if so, Chobani’s labeling would violate federal standards, and the state-law claims could proceed. If not, the Federal Food, Drug, and Cosmetic Act (FDCA) would preempt the action.The United States District Court for the Northern District of Illinois reviewed Chobani’s motion to dismiss under Rule 12(b)(6), focusing on the issue of preemption. The court deferred to FDA enforcement guidance that excluded allulose from “total sugars,” found that the Francos’ claims were preempted by federal law, and dismissed the case.On appeal, the United States Court of Appeals for the Seventh Circuit applied de novo review. The court received input from the FDA, which clarified that the relevant regulation unambiguously includes all monosaccharides—including allulose—in the definition of “total sugars.” The court found the FDA’s interpretation persuasive and concluded that the regulation’s definition of “total sugars” encompasses allulose. As a result, the Francos’ claims, which sought to enforce requirements identical to federal standards, were not preempted.The Seventh Circuit also held that the Francos plausibly alleged consumer deception, as the complaint claimed Chobani labeled its product “sugar free” despite containing allulose. The court reversed the district court’s dismissal and allowed the Francos’ suit to proceed. View "Franco v Chobani, LLC" on Justia Law

The plaintiffs in this case are individuals who received marketing text messages and phone calls from a medical services company, promoting its home sleep tests. Despite their efforts to stop the communications—such as replying “STOP” to text messages and registering on the National Do-Not-Call Registry—they continued to receive unwanted texts and calls. They filed a consolidated class action complaint seeking monetary, injunctive, and declaratory relief for alleged violations of both the federal Telephone Consumer Protection Act (TCPA), 47 U.S.C. § 227, and the Florida Telephone Solicitation Act.The United States District Court for the Central District of Illinois reviewed the complaint after the defendant moved to dismiss the TCPA claims. The defendant argued that the relevant TCPA provision, § 227(c)(5), only provides a private right of action for unwanted telephone calls, not text messages. The plaintiffs did not argue that their suit could proceed based on calls alone. The district court agreed with the defendant, found that the plaintiffs failed to state a claim under the TCPA because their complaint focused on text messages, and declined to exercise supplemental jurisdiction over the state-law claim, ultimately dismissing the entire suit.The United States Court of Appeals for the Seventh Circuit reviewed the dismissal de novo. The main issue was whether § 227(c)(5)’s reference to “telephone calls” includes text messages. The court held that, based on the statute’s text, context, and the ordinary public meaning at the time of enactment, “telephone call” does not encompass text messages. The court also concluded that neither FCC interpretations nor prior decisions involving other TCPA provisions required a different outcome. The Seventh Circuit affirmed the district court’s dismissal. View "Steidinger v Blackstone Medical Services" on Justia Law

A lightning strike in October 2019 caused a destructive fire at a large mansion in southern Illinois owned by Wesley Gibson. Gibson had acquired the property nearly 30 years earlier as a family vacation home and, over time, extensively renovated it and filled it with valuable furniture, antiques, and artwork. Eventually, he transformed the mansion and surrounding properties into a commercial lodging and events venue, hosting weddings, corporate retreats, and other gatherings. Gibson’s family continued to use the mansion for about 70 nights per year, but the property’s primary use became commercial, as evidenced by tax filings and significant rental income.Following the fire, Gibson filed a claim with Chubb National Insurance Company under his homeowner’s policy, which provided $8.75 million for the dwelling and $3.5 million for its contents. Chubb paid the dwelling coverage in full but limited payment for the contents to $25,000, citing a business property exclusion in the policy that capped coverage for property used in business at that amount. Gibson sued Chubb in the United States District Court for the Northern District of Illinois for breach of contract and violations of Illinois insurance and consumer-fraud statutes. On cross-motions for summary judgment, the district judge found that the majority of the contents were used for business purposes and subject to the $25,000 limit, granting partial summary judgment to Chubb. The judge allowed Gibson’s claim to proceed only for certain items kept in areas not accessible to guests. After settling remaining issues, final judgment was entered.The United States Court of Appeals for the Seventh Circuit affirmed. The court held that under the terms of the policy and Illinois law, Chubb properly classified most of the mansion’s contents as business property and was only obligated to pay the $25,000 sublimit. The court also affirmed summary judgment for Chubb on the statutory claims. View "Gibson v Chubb National Insurance Company" on Justia Law

Clearview AI, Inc. developed technology that collects and analyzes photographs from public websites to create facial recognition profiles, which can reveal personal details about individuals. After a media exposé in January 2020, multiple putative class-action lawsuits were filed against Clearview and related defendants, alleging misuse of biometric data. The cases were consolidated in the U.S. District Court for the Northern District of Illinois, and plaintiffs asserted claims on behalf of a nationwide class and state-specific subclasses (Illinois, California, New York, and Virginia), each based on differing statutory and common law rights.The litigation was extensive, involving motions to dismiss and discovery, before settlement negotiations began. The initial settlement talks failed due to Clearview’s limited financial resources. A second round resulted in a proposed settlement that offered class members a share in Clearview’s future equity, with a larger stake for members of certain state subclasses compared to the nationwide class. No original class representatives endorsed the settlement, prompting lead counsel to appoint new representatives, all from the favored subclasses. The district court, after considering objections, including from members of the nationwide class, approved the settlement as fair, reasonable, and adequate.The United States Court of Appeals for the Seventh Circuit reviewed the objections of nationwide class members. The court found no inherent flaw in the lack of injunctive relief or in the structure of monetary relief (an equity stake in the defendant). However, it held that the settlement was procedurally deficient because no representative of only the nationwide class participated in or approved the allocation of benefits, raising concerns about fair and adequate representation. The Seventh Circuit vacated the district court’s approval of the settlement and remanded for further proceedings. View "Weissman v Clearview AI, Inc." on Justia Law

Robert Hossfeld received twelve telemarketing calls advertising Allstate Insurance products, despite having previously requested that Allstate not contact him. The calls were made by Atlantic Telemarketing Center, which had been subcontracted by Transfer Kings, a company retained by Allstate’s insurance agents, Fleming and Gilmond. Allstate’s internal do-not-call list included Hossfeld’s number months before the calls occurred. Neither Allstate nor its agents were aware that Atlantic was involved in marketing Allstate insurance until after Hossfeld initiated his lawsuit.Hossfeld sued Allstate in the United States District Court for the Northern District of Illinois, alleging violations of the Telephone Consumer Protection Act (TCPA) because Allstate failed to maintain an adequate do-not-call policy and permitted calls to be made to him after his request. He also sought class certification for other similarly affected individuals. The district court denied class certification, finding Hossfeld had not demonstrated that the proposed class was sufficiently numerous. On cross-motions for summary judgment, the district court ruled in Hossfeld’s favor, holding Allstate vicariously liable for Atlantic’s calls under agency law and awarding treble damages for willful violations.The United States Court of Appeals for the Seventh Circuit reviewed the case. The appellate court affirmed the denial of class certification, agreeing that Hossfeld failed to prove numerosity and impracticability of joinder. However, it reversed the district court’s summary judgment on liability, concluding that Hossfeld failed to show Allstate was liable for Atlantic’s calls under any theory of agency law, including subagency, apparent authority, or ratification. The Seventh Circuit clarified that the willfulness standard under the TCPA requires reckless or knowing conduct, not merely volitional acts. The court affirmed in part and reversed in part, directing judgment for Allstate. View "Hossfeld v Allstate Insurance Co." on Justia Law