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

A Marion, Indiana small claims court entered a judgment against Kevin about $1,000. He did not pay, although he had agreed to the judgment’s entry. Almost 20 years later Steel, claiming to represent the judgment creditor, asked the court to garnish Harold’s wages. It entered the requested order, which Harold moved to vacate, contending that Steel had misrepresented the judgment creditor’s identity (transactions after the judgment’s entry may or may not have transferred that asset to a new owner) and did not represent the only entity authorized to enforce the judgment. He did not contend that the request was untimely. A state judge sided with Steel and maintained the garnishment order in force. Instead of appealing, Harold filed a federal suit under the Fair Debt Collection Practices Act, contending that Steel and his law firm had violated 15 U.S.C. 1692e by making false statements. The district court dismissed for lack of subject-matter jurisdiction, ruling that it was barred by the Rooker-Feldman doctrine because it contested the state court’s decision. The Seventh Circuit affirmed. Section 1692e forbids debt collectors to tell lies but does not suggest that federal courts are to review state-court decisions about whether lies have been told. View "Harold v. Steel" on Justia Law

JM Leasing purchased a brand‐new semi‐truck from PACCAR in 2007. Approximately four years and 3,000 miles later, JM concluded that the truck was a lemon and sought a refund from PACCAR under Wisconsin’s Lemon Law, Wis. Stat. 218.0171.1 PACCAR agreed to refund the purchase price, but a dispute arose over reimbursement of a $53.00 title fee and escalated into a debate over the “reasonable allowance for use” to which PACCAR was entitled . Ultimately JM won an interest‐bearing judgment of $369,196.06, plus $157,697.25 in attorneys’ fees. The Seventh Circuit affirmed, rejecting PACCAR’s claims that it complied with all relevant provisions of the Lemon Law and that the district court erred in calculating pecuniary loss. View "James Michael Leasing Co. v. Paccar, Inc." on Justia Law

Defendants manufacture vitamins and nutritional supplements, including glucosamine pills, designed to help people with joint disorders, such as osteoarthritis. Several class action suits were filed under the Class Action Fairness Act, 28 U.S.C. 1332(d)(2), claiming violations of states’ consumer protection laws by making false claims. Eight months later, class counsel negotiated a nationwide settlement that was approved with significant modifications. The settlement requires Rexall to pay $1.93 million in fees to class counsel, plus $179,676 in expenses, $1.5 million in notice and administration costs, $1.13 million to the Orthopedic Research and Education Foundation, $865,284 to the 30,245 class members who submitted claims, and $30,000 to the six named plaintiffs ($5,000 apiece) Class members, led by the Center for Class Action Fairness, objected. The Seventh Circuit reversed, characterizing the settlement as “a selfish deal between class counsel and the defendant.” While most consumers of glucosamine pills are elderly and bought the product in containers with labels that recite the misrepresentations, only one-fourth of one percent of them will receive even modest compensation; for a limited period the labels will be changed, in trivial respects. The court questioned: “for conferring these meager benefits class counsel should receive almost $2 million?” View "Pearson v. NBTY, Inc." on Justia Law

Redbox operates automated self‐service kiosks at which customers rent DVDs and Blu‐ray discs with a debit or credit card. Redbox outsources certain functions to service providers, including Stream, which provides customer service when, for example, a customer encounters technical problems at a kiosk and requires help from a live person. If resolution of the issue requires accessing that customer’s video rental history the Stream employee will do so. Redbox has granted Stream access to the database in which Redbox stores relevant customer information. Plaintiffs challenged Stream’s ability to access customer rental histories and Stream’s use of customer records during employee training exercises as violating the Video Privacy Protection Act, which prohibits “video tape service provider[s]” like Redbox from “disclos[ing], to any person, personally identifiable information concerning any consumer of such provider,” 18 U.S.C. 2710(b)(1). The Act includes an exception for disclosure incident to the video tape service provider’s ordinary course of business, defined as debt collection activities, order fulfillment, request processing, and the transfer of ownership. The district court granted Redbox summary judgment. The Seventh Circuit affirmed, concluding that Redbox’s actions fall within the exception for disclosures in the ordinary course of business: disclosures incident to “request processing.”View "Sterk v. Redbox Automated Retail, LLC" on Justia Law

The Seventh Circuit consolidated class action appeals filed under the Fair and Accurate Credit Transactions Act (FACTA), 15 U.S.C. 1681c(g), which provides that “no person that accepts credit cards or debit cards ... shall print [electronically] more than the last 5 digits of the card number or the expiration date upon any receipt provided to the cardholder at the point of the sale.” Willful violation entitles a consumer who sustains no harm to statutory damages, but a consumer harmed by the violation can obtain actual damages by showing that the violation was the result of negligence. Consumers who bought products at RadioShack stores paid with credit or debit cards, and received electronically printed receipts that contained the card’s expiration date. The parties settled; each class member who responded positively was to receive a $10 coupon that could be used at any RadioShack store. The face value of all the coupons was $830,000. RadioShack was to pay class counsel $1 million. The Seventh Circuit reevaluated the value of the settlement to class members and the benefits of costs incurred and, noting Radio Shack’s fragile financial condition, stated ”A renegotiated settlement will simply shift some fraction of the exorbitant attorneys’ fee awarded class counsel in the existing settlement that we are disapproving to the class members. While Radio Shack’s violation was willful, given earlier litigation, Shoe Carnival had no previous violation to alert the company. Instead of omitting the entire expiration date from credit‐card receipts, Shoe Carnival omitted just the year The Seventh Circuit concluded that there was sufficient ambiguity in the statute to justify the district court’s determination that Shoe Carnival had not willfully violated FACTA. View "Aliano v. RadioShack Corp." on Justia Law

Before the patents expired (2012) for the individual coffee pods used in Keurig coffeemakers, defendants wanted to enter the market for Keurig‐compatible pods. In 2010 they introduced a product that used the external K‐Cup design, but did not contain a filter so that use of fresh coffee grounds was impossible. They used small chunks of freeze‐dried brewed coffee that dissolve and are reconstituted when hot water is added. The packaging stated in small font that it contained “naturally roasted soluble and microground Arabica coffee”; it never explained that soluble coffee is instant coffee or that the pods contained 95% instant coffee. The package included a warning: “DO NOT REMOVE the foil seal as the cup will not work properly in the coffee maker and could result in hot water burns.” Except to ensure that the user did not view the contents of the pod, this made no sense. Customers began to complain and were told that the pods were “not instant coffee” but “a high quality coffee bean pulverized into a powder so fine that [it] will dissolve,” which was largely false. Consumer protection lawsuits were consolidated. The district court refused to certify a class and granted summary judgment. The Seventh Circuit reversed. Plaintiffs’ claims and those of the class they propose all derive from a single course of conduct. The court overlooked genuine issues of fact when it granted summary judgment.View "Suchanek v. Sturm Foods, Inc." on Justia Law

The Plaintiffs sued Payday Financial, Webb, an enrolled member of the Cheyenne River Sioux Tribe, and other entities associated with Webb, alleging violations of civil and criminal statutes related to loans that they had received from the defendants. The businesses maintain several websites that offer small, high-interest loans to customers. The entire transaction is completed online; a potential customer applies for, and agrees to, the loan terms from his computer. The district court dismissed for improper venue, finding that the loan agreements required that all disputes be resolved through arbitration conducted by the Cheyenne River Sioux Tribe on their Reservation in South Dakota. Following a limited remand, the district court concluded that, although the tribal law could be ascertained, the arbitral mechanism detailed in the agreement did not exist. The Seventh Circuit held that the action should not have been dismissed because the arbitral mechanism specified in the agreement is illusory. Rejecting an alternative argument that the loan documents require that any litigation be conducted by a tribal court on the Cheyenne River Sioux Tribe Reservation, the court stated that tribal courts have a unique, limited jurisdiction that does not extend generally to the regulation of nontribal members whose actions do not implicate the sovereignty of the tribe or the regulation of tribal lands. View "Jackson v. Payday Fin., LLC" on Justia Law

JAB designs, manufactures, and sells men’s clothing and accessories and has 31 Illinois retail locations. In July 2012, Camasta went to the Deer Park JAB store. Before making his purchases, Camasta contends that he saw an advertisement about “sale prices.” At the time of Camasta’s visit, JAB customers were offered a promotion: “buy one shirt, get two shirts free.” Camasta paid $79.50 for one shirt getting two similar shirts for free, and bought another shirt for $87.50 allowing him to receive two more shirts for free. After this purchase, Camasta claims that he learned the JAB “sale” was not actually a reduced price, but was the JAB practice to advertise normal prices as temporary price reductions. Camasta asserts that but for his belief that the advertised sale was a limited time offer, he would not have purchased the six shirts. On behalf of himself and a putative class, Camasta filed a complaint, accusing JAB of violating the Illinois Consumer Fraud and Deceptive Business Practices Act and the Uniform Deceptive Trade Practices Act based on the company’s “sales practice of advertising the normal retail price as a temporary price reduction.” The district court dismissed. The Seventh Circuit affirmed, noting Camasta's "sparse" and "conclusory" allegations. View "Camasta v. Jos. A. Bank Clothiers, Inc." on Justia Law

Bormes, an attorney, tendered the filing fee for a lawsuit via pay.gov, which the federal courts use to facilitate electronic payments. The web site sent him an email receipt that included the last four digits of his credit card’s number, plus the card’s expiration date. Bormes, claiming that the Fair Credit Reporting Act (FCRA), 15 U.S.C. 1681c(g)(1) allows a receipt to contain one or the other, but not both, filed suit against the United States seeking damages. In an earlier appeal the Supreme Court held that the Little Tucker Act, 28 U.S.C. 1346(a)(2), does not waive sovereign immunity on a suit seeking to collect damages for an asserted violation of FCRA and remanded for determination of “whether FCRA itself waives the Federal Government’s immunity to damages under 1681n.” The Seventh Circuit held that although the United States has waived immunity against damages actions of this kind, it did not violate the statute on the merits. The statute as written applies to receipts “printed … at the point of the sale or transaction.” The email receipt that Bormes received met neither requirement. View "Bormes v. United States" on Justia Law

Burzlaff bought a “Stallion” motorized tricycle from Thoroughbred Motorsports in 2009 for $35,000. When Burzlaff reported the first problems to Thoroughbred, the company instructed him to take his vehicle to a Ford dealer for warranty repairs. Burzlaff did so repeatedly. After the vehicle had been out of service for repairs for 71 days during the first year, Burzlaff demanded, under the Wisconsin Lemon Law, that Thoroughbred replace the vehicle or refund his purchase price. Thoroughbred refused. Further efforts to repair the vehicle at the Thoroughbred factory in Texas failed to correct the defects. Burzlaff sued Thoroughbred under the federal Magnuson-Moss Warranty Act, 15 U.S.C. 2301, and the Wisconsin Lemon Law, Wis. Stat. 218.0171. The district court awarded double damages plus costs and attorney fees for a total judgment of $95,000 under the more generous provisions of the state law. The Seventh Circuit affirmed, rejecting challenges to the jury instructions on the Lemon Law claim, the sufficiency of the evidence on that claim, and the submission of the Magnuson-Moss claim to the jury. View "Burzlaff v. Thoroughbred Motorsports Inc." on Justia Law