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

Linderman bought an Indianapolis house in 2004 and lived there with her ex-husband, their children, and her parents. In 2013, Linderman left and stopped paying the mortgage loan. The others left in 2014. The unoccupied structure was vandalized. U.S. Bank, which owns the note and mortgage, started foreclosure proceedings. The vandalism produced insurance money that was sent to the Bank. The city notified Linderman of code violations. Linderman hired a contractor. In 2015 the Bank disbursed $10,000 for repairs. The contractor abandoned the job. The house was vandalized twice more; a storm damaged the roof. Linderman has not hired a replacement contractor or asked the Bank for additional funds but inquired about the status of the loan and the insurance money. The Bank sent a response. Asserting that she had not received that response, Linderman sued under the Real Estate Settlement Procedures Act, 12 U.S.C. 2605(e)(1)(B). The Seventh Circuit affirmed the rejection of her claims. None of Linderman’s problems with her marriage and mental health can be traced to the Bank. Linderman does not explain how earlier access to the Bank’s record of the account could have helped her; some of her asserted injuries are outside the scope of the Act. The contract between Linderman and the Bank, not federal law, determines how insurance proceeds must be handled. Contract law also governs the arrangement between Linderman and the contractor. View "Floyd v. U.S. Bank National Association" on Justia Law

At age 56, Newman purchased a long-term-care insurance plan MetLife, opting for one of MetLife’s non-standard options for paying her insurance premiums, “Reduced-Pay-at 65.” From the outset, Newman paid the elevated premium associated with her Reduced-Pay option. When she reached age 65, her premium was cut in half. When Newman was 67 years old, she was startled to discover that MetLife that year more than doubled her insurance premium. The Seventh Circuit reversed the dismissal of Newman’s proposed class action, alleging breach of contract, deceptive and unfair business practices, and common-law fraud. The allegations raised in the complaint were enough to entitle Newman to prevail on the liability phase of her contract claim and to go forward on her remaining claims. The policy language is at least ambiguous, because it can be read reasonably to fix a person’s premium, if she had opted for the Reduced-Pay option. Illinois construes ambiguous contracts against the insurer. Newman’s complaint also alleged facts that plausibly show that MetLife’s policy was both deceptive and unfair under the Illinois Consumer Fraud Act and adequately alleged fraudulent concealment and reasonable reliance. View "Newman v. Metropolitan Life Insurance Co" on Justia Law

Credit One repeatedly called A.D.’s (a minor) cell phone about payments owed on her mother’s account. A.D., by and through her mother, Serrano, brought a putative class action under the Telephone Consumer Protection Act, 47 U.S.C. 227(b)(1)(A), seeking compensation for telephone calls placed by Credit One to her telephone number in an effort to collect a debt that she did not owe. During discovery, Credit One realized that its caller ID capture system had added A.D.’s phone number to its database when Serrano used A.D.’s phone to access her account. A.D. had apparently used the card, once, at her mother’s request, when she was 14 years old, in 2014. Credit One moved to compel arbitration and to defeat A.D.’s motion for class certification based on a cardholder agreement between Credit One and Serrano. The district court granted the motion to compel arbitration but certified for interlocutory appeal the question whether A.D. is bound by the cardholder agreement. The Seventh Circuit reversed the order compelling arbitration. A.D. is not bound by the terms of the cardholder agreement to arbitrate and has not directly benefited from the cardholder agreement such that equitable principles require the application of the arbitration clause against her. View "A.D. v. Credit One Bank, N.A." on Justia Law

Credit One repeatedly called A.D.’s (a minor) cell phone about payments owed on her mother’s account. A.D., by and through her mother, Serrano, brought a putative class action under the Telephone Consumer Protection Act, 47 U.S.C. 227(b)(1)(A), seeking compensation for telephone calls placed by Credit One to her telephone number in an effort to collect a debt that she did not owe. During discovery, Credit One realized that its caller ID capture system had added A.D.’s phone number to its database when Serrano used A.D.’s phone to access her account. A.D. had apparently used the card, once, at her mother’s request, when she was 14 years old, in 2014. Credit One moved to compel arbitration and to defeat A.D.’s motion for class certification based on a cardholder agreement between Credit One and Serrano. The district court granted the motion to compel arbitration but certified for interlocutory appeal the question whether A.D. is bound by the cardholder agreement. The Seventh Circuit reversed the order compelling arbitration. A.D. is not bound by the terms of the cardholder agreement to arbitrate and has not directly benefited from the cardholder agreement such that equitable principles require the application of the arbitration clause against her. View "A.D. v. Credit One Bank, N.A." on Justia Law

AT&T notified Walton that she owed $268.47 on her closed AT&T account number 119864170 and that failure to pay “may cause your account to be referred to an outside collection agency.” Walton did not pay the bill. She received a debt-collection letter from EOS, stating that she owed AT&T $268.47 on account 864119170. AT&T had swapped the first three digits with the second three in providing the information. Walton contacted EOS, acknowledged that her name and mailing address were correct, but falsely denied that the last four digits of her social security number matched those the representative gave to confirm her identity. After investigating, EOS sent Walton another letter stating it had verified that her name, address, and her social security number, and stating a balance of $268.47. EOS again listed an incorrect account number. EOS reported Walton’s debt to credit-reporting agencies, informing them that the account was disputed. Walton wrote to the agencies to dispute the debt; the agencies notified EOS. After learning that she disputed the account number, EOS advised the agencies to delete Walton’s debt record. Walton sued under the Fair Debt Collection Practices Act, 15 U.S.C. 1692, for not verifying her debt with the creditor, and the Fair Credit Reporting Act, 15 U.S.C. 1681, for not reasonably investigating the disputed information. The Seventh Circuit affirmed summary judgment, finding that EOS complied with its statutory obligations. View "Walton v. EOS CCA" on Justia Law

In this action challenging an insurance company’s doubling of Plaintiff’s insurance premium, the Seventh Circuit reversed the district court’s dismissal of Plaintiff’s complaint for failure to state a claim, holding that Plaintiff was entitled to relief on her contract claim and that the allegations Plaintiff raised were enough to permit her to go forward on her other theories.When Plaintiff was sixty-seven years old, she discovered that Metropolitan Life Insurance Company (MetLife) more than doubled her insurance premium. Plaintiff brought this lawsuit against MetLife on behalf of herself and a proposed class, alleging breach of contract, deceptive and unfair business practices, and common-law fraud. The district court granted MetLife’s motion to dismiss for failure to state a claim, concluding that the insurance policy unambiguously permitted MetLife to raise Plaintiff’s premium. The First Circuit disagreed, holding that the allegations raised in the complaint were enough to entitle Plaintiff to prevail on the liability phase of her contract claim and to go forward on her remaining claims. View "Newman v. Metropolitan Life Insurance Co." on Justia Law

Plaintiffs, Wisconsin residents, incurred and defaulted on debts for medical services. Plaintiffs’ creditors assigned these debts to FSGB, a collection agency. FSGB sent plaintiffs letters stating: As of the date of this letter, you owe $[a stated amount]. Because of interest, late charges, and other charges that may vary from day to day, the amount due on the day you pay may be greater. Hence, if you pay the amount shown above, an adjustment may be necessary after we receive your check. Plaintiffs filed a class action, alleging violations of the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. 1692–1692p, claiming that FSGB’s letter is false because, under Wisconsin law, FSGB cannot lawfully or contractually impose “late charges and other charges” and that the letter causes unsophisticated consumers to incorrectly believe that they will avoid such charges if they immediately send payment. FSGB argued that the statement tracks the Seventh Circuit's "safe harbor language" from its 2000 “Miller” decision and that it is entitled to charge interest. The district court dismissed, acknowledging that some of the safe harbor language did not “strictly” apply but finding FSGB’s letter conveyed “the crucial fact” that plaintiffs’ debts were variable. The Seventh Circuit reversed. Debt collectors cannot immunize themselves from FDCPA liability by blindly copying and pasting the Miller safe harbor language without regard for whether that language is accurate under the circumstances. View "Boucher v. Finance System of Green Bay, Inc." on Justia Law

In 2002, Toulon applied for Continental’s long-term care insurance policy. Continental provided a Long-Term Care Insurance Personal Worksheet to help Toulon determine whether the policy would work for her, given her financial circumstances. The Worksheet discussed Continental’s right to increase premiums and how such increases had previously been applied. Toulon did not fill out the Worksheet but signed and submitted it with her application. Toulon’s Policy stated that although Continental could not cancel the Policy if each premium was paid on time, Continental could change the premium rates. There was a rider, stating that premiums would not be increased during the first 10 years after the coverage date. In September 2013, Continental raised Toulon’s premiums by 76.5%. Toulon sued, on behalf of herself and a purported class. The Seventh Circuit affirmed dismissal, agreeing that Toulon failed to state claims for fraudulent misrepresentation because she did not identify a false statement or for fraudulent omission because Continental did not owe Toulon a duty to disclose. The court also properly dismissed Toulon’s claim under the Illinois Consumer Fraud and Deceptive Practices Act (ICFA) because she did not identify a deceptive practice, a material omission, or an unfair practice. The unjust enrichment claim failed because claims of fraud and statutory violation, upon which Toulon's unjust enrichment claim was based, were legally insufficient and an express contract governed the parties’ relationship. View "Toulon v. Continental Casualty Co." on Justia Law

In 2011, Roppo suffered serious injuries in an auto accident with Block, who was insured by Travelers. Travelers and the attorneys it retained for Block disclosed only the limits of Block’s automobile liability policy; they did not disclose the existence of his additional umbrella policy. Roppo eventually learned of the umbrella policy and then settled the case. She brought a proposed class action, challenging the company’s alleged practice of not disclosing the existence of umbrella policies. The case was removed to federal court under the Class Action Fairness Act, 28 U.S.C. 1332(d). The district court denied Roppo’s motion to remand to state court but allowed her to file a second amended complaint, which added Block’s defense attorneys as defendants. Her third amended complaint added a cause of action under the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. 1962(c). The Seventh Circuit affirmed dismissal with prejudice the complaint’s 11 counts, finding that the district court had jurisdiction and that her complaint did not sufficiently state claims of fraudulent misrepresentation, negligent misrepresentation, and negligence under Illinois law, or violations of the Illinois Insurance Code and the Illinois Consumer Fraud and Deceptive Business Practices Act. View "Roppo v. Travelers Commercial Insurance Co." on Justia Law

In 2013, an Australian teenager measured his Subway Footlong sandwich, which was 11 inches long. He photographed it alongside a tape measure and posted the photo on Facebook. It went viral. U.S. plaintiffs’ lawyers sued under state consumer-protection laws and sought class certification under FRCP 23. The suits were combined in a multidistrict litigation. Limited discovery established that Subway’s unbaked rolls are uniform; baked rolls rarely fall short of 12 inches. Minor variations occur due to natural variability in the baking process and cannot be prevented. No customer is shorted any food. With no compensable injury, the lawyers sought injunctive relief. Subway agreed to implement measures to ensure, to the extent practicable, that all Footlong sandwiches are at least 12 inches long. The parties agreed to cap class counsel's fees at $525,000. The court preliminarily approved the settlement. A class member and “professional objector to hollow class-action settlements,” argued that the settlement enriched only the lawyers and provided no meaningful benefits to the class. The judge certified the class and approved the settlement. The Seventh Circuit reversed. A class action that “seeks only worthless benefits for the class” and “yields [only] fees for class counsel” is “no better than a racket” and “should be dismissed out of hand.” View "Buren v. Doctor's Associates Inc." on Justia Law