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

Med‐1 buys delinquent debts and purchased Suesz’s debt from Community Hospital. In 2012 it filed a collection suit in small claims court and received a judgment against Suesz for $1,280. Suesz lives one county over from Marion. Though he incurred the debt in Marion County, he did so in Lawrence Township, where Community is located, and not in Pike Township, the location of the small claims court. Suesz says that it is Med‐1’s practice to file claims in Pike Township regardless of the origins of the dispute and filed a purported class action under the Fair Debt Collection Practices Act venue provision requiring debt collectors to bring suit in the “judicial district” where the contract was signed or where the consumer resides, 15 U.S.C. 1692i(a)(2). The district court dismissed after finding Marion County Small Claims Courts were not judicial districts for the purposes of the FDCPA. The Seventh Circuit initially affirmed, but, on rehearing en banc, reversed, holding that the correct interpretation of “judicial district or similar legal entity” in section 1692i is the smallest geographic area that is relevant for determining venue in the court system in which the case is filed. View "Suesz v. Med-1 Solutions, LLC" on Justia Law

Indiana pawnbrokers must obtain license from the state’s Department of Financial Institutions (DFI). Saalwaechter, owns Fares Pawn in Evansville, Indiana. He applied for a license in 2009, but DFI denied his application, citing concerns about previous operations on the property and about his store manager’s criminal history. The property has been used as a pawnshop for about 20 years, but different businesses with overlapping ownership. Saalwaechter received a license after he signed an agreement to comply with certain conditions, in particular not employing the manager. Saalwaechter sued DFI, alleging violation of the Equal Protection Clause of the Fourteenth Amendment. Saalwaechter did not contend that DFI treated him unfavorably on account of some identifiable characteristic, such as age, sex, or race, but that the state had singled him out for disparate treatment without a rational basis. The district court granted DFI summary judgment on the “class of one” claim, finding that no reasonable jury could conclude that DFI treated Saalwaechter differently from similarly situated applicants without a rational reason. The Seventh Circuit affirmed. View "Fares Pawn, LLC v. IN Dep't of Fin. Insts." on Justia Law

Trump Tower Chicago is a 92-story building with 486 residential condominium units, 339 hotel condominium units, retail space, a health club, ballrooms, meeting rooms, restaurants, a hair salon, and other facilities. When the owner of a hotel condominium unit is not occupying the unit, building management can rent it to a visitor; rental income is divided with the owner’s share credited against his annual maintenance fee. Plaintiff, an 80-year-old CPA and financial planner, agreed to buy two hotel condominium units in 2006 for $2.2 million. She bought them as an investment and already owned other investment condominium units, including a residential unit in Trump Tower Chicago. The agreement gave TrumpOrg “the right, in its sole and absolute discretion, to modify the Condominium Documents.” Plaintiff asked TrumpOrg to give her the right to terminate the agreement and get her deposit back if she disapproved of any such changes. TrumpOrg refused. Plaintiff signed the agreement, even though TrumpOrg had already made three changes. The next year, TrumpOrg made changes that greatly curtailed owners’ rights in the hotel facilities. Plaintiff refused to close. TrumpOrg did not seek to compel her to close, but did not return her down payment, $516,000 and canceled the purchase agreement. Plaintiff sought damages under the common law of contracts, the Illinois Consumer Fraud and Deceptive Business Practices Act, the Condominium Property Act, and Illinois Securities Law. The district court ruled in favor of the defendants. The Seventh Circuit affirmed. View "Goldberg v. 401 N. Wabash Venture, L.L.C., " on Justia Law

A 2006 class action against Pella, a window manufacturer, alleged that certain windows had a design defect that allowed water to enter behind exterior aluminum cladding and damage the wooden frame and the house itself. The district judge certified a class for customers who had already replaced or repaired their windows, seeking damages and limited to six states, and another for those who had not, seeking only declaratory relief nationwide. Initially, there was one named plaintiff, Saltzman. His son-in-law, Weiss, was lead class counsel. Weiss is under investigation for multiple improprieties. The Seventh Circuit upheld the certifications. Class counsel negotiated a settlement in 2011 that directed Pella to pay $11 million in attorneys’ fees based on an assertion that the settlement was worth $90 million to the class. In 2013, before the deadline for filing claims, the district judge approved the settlement, which purports to bind a single nation-wide class of all owners of defective windows, whether or not they have replaced or repaired the windows. The agreement gave lead class counsel “sole discretion” to allocate attorneys’ fees; Weiss proposed to allocate 73 percent to his own firm. Weiss removed four original class representatives who opposed the settlement; their replacements joined Saltzman in supporting it. Named plaintiffs were each compensated $5,000 or $10,000 for their services, if they supported the settlement. Saltzman, as lead class representative, was to receive $10,000. The Seventh Circuit reversed, reversed, referring to “eight largely wasted years,” the need to remove Saltzman, Weiss, and Weiss’s firm as class representative and as class counsel, and to reinstate the four named plaintiffs. View "Riva v. Pella Corp." on Justia Law

Seven years after Plyler installed a Whirlpool microwave oven and eight hours after using that oven, a houseguest woke him because of a fire in the microwave. Firefighters extinguished the fire. Plyler claims that he injured his elbow and knee while he ran into and out of his house and that he experienced post-traumatic stress disorder. At trial on negligent recall and strict liability claims, a fire department investigator could not identify a specific cause of the fire. Plyler blamed the fire on a product defect that had led Whirlpool to recall microwaves in 2001. Whirlpool’s Director of Global Product Safety testified that the ovens posed a fire hazard only if they contained splattered food. uncleaned for an extended time, and were running at the time of the fire. After Whirlpool discovered that 1.8 million microwaves contained the defect, it issued a recall through the Consumer Product Safety Commission, mailed notices to owners who had submitted a product registration card, and released news announcements. Although the average recall leads to repair or replacement of 10 to 15 percent of affected units, Whirlpool repaired 75 percent of the recalled microwave. Plyler stated that he kept his microwave clean; that he never received notice; that he paid for it with a credit card; and that Whirlpool should have been able to contact him. The jury found in favor of Whirlpool. The Seventh Circuit affirmed, rejecting challenges to rulings that limited Plyler’s testimony to his observations and that allowed questions about the relationship between the fire and his divorce.View "Plyler v. Whirlpool Corp." on Justia Law

A class action complaint, filed in state court, alleged that Pushpin acted as an unlicensed debt collector in violation of the Illinois Consumer Fraud Act and filed 1100 Illinois small‐claims suits, all fraudulent, but that the class (defendants in those suits) sought “no more than $1,100,000.00 in compensatory damages and $2,000,000.00 in punitive damages,” and would ‘incur attorneys’ fees of no more than $400,000.00,” below the $5 million threshold for removal of a state‐court class action to a federal district court under the Class Action Fairness Act. Pushpin removed the case to federal court under the Act, 28 U.S.C. 1453(b), but the district court remanded to state court. The Seventh Circuit reversed, reasoning that the plaintiff did not irrevocably commit to obtaining less than $5 million for the class, and Pushpin’s estimate that the damages recoverable by the class could equal or exceed that amount may be reliable enough to preclude remanding the case to the state court. The lower court’s reasoning that most of the claims were barred by the Rooker‐Feldman rule was a mistake as was a statement that “there is a strong presumption in favor of remand” when a case has been removed under the Class Action Fairness Act. View "Pushpin Holdings, LLC v. Johnson" on Justia Law

A business that manages commercial real estate and its owners were sued in a purported class action under the Telephone Consumer Protection Act, 47 U.S.C. 227, for having paid a “fax blaster” (Business to Business Solutions) to send unsolicited fax advertisements. Aggregate statutory damages would be more than $5 million or, if the violation is determined to be willful or knowing, as much as three times greater. The Seventh Circuit denied leave to appeal class certification in the suit, which is more than five years old. The court noted that it had no knowledge of the value of the defendant-business and that, even if the defendants could prove that they will be forced to settle unless class certification is reversed, they would have to demonstrate a significant probability that the order was erroneous. Rejecting challenges concerning individual class members, the court noted that no monetary loss or injury need be shown to entitle junk‐fax recipient to statutory damages. The adequacy of the class representative was not challenged. View "Wagener Equities, Inc. v. Chapman" on Justia Law

Batson went to Live Nation’s Chicago box office and purchased a non‐refundable ticket to see a popular band. He later realized that the ticket price included a $9 parking fee for a spot he did not want. Believing that the bundled $9 fee was unfair, he sued on behalf of himself and a proposed class, citing the Class Action Fairness Act, 28 U.S.C. 1332(d)(1), and claiming that Live Nation had committed an unfair practice in violation of the Illinois Consumer Fraud and Deceptive Business Practices Act. The complaint referred to the 2010 merger between Live Nation and Ticketmaster (which was not blocked by the Department of Justice). The district court dismissed. The Seventh Circuit affirmed, stating that there are times when consumers must accept a package deal in order to get the part of the package they want. The relevant factors ask whether the practice offends public policy; is immoral, unethical, oppressive, or unscrupulous; or causes substantial injury to consumers.View "Batson v. Live Nation, Entm't, Inc." on Justia Law

Target Guest Cards only permit purchases only at Target. Target Visa Cards are all-purpose credit cards that can be used anywhere. Target used different underwriting criteria and agreements for the cards. Between 2000 and 2006, Target sent unsolicited Visas to 10,000,000 current and former Guest Card holders, with agreements and marketing materials to entice activation of the new card. If a customer activated a new Visa, its terms became effective and the Guest Card balance was transferred to the Visa. If the customer did not activate the Visa, Target closed the account. The materials did not suggest that keeping the Guest Card was an option, but customers could opt out. A Guest Card holder could call Target to reject the Visa but ask to keep the Guest Card. If a holder attempted to use the Guest Card after the Visa was mailed, she was informed that the account had been closed but that she could reopen it. The credit limits on the Autosubbed Visas were between $1,000 and $10,000, and Target could change the credit limit. New customers had to open a Target Visa through a standard application, and cards could have credit limits as low as $500. The Autosub materials did not indicate that credit limits were subject to change; customers often had their credit limits reduced after activation. The district court rejected a putative class action under the Truth in Lending Act, 15 U.S.C. 1642, which prohibits mailing unsolicited credit cards and requires credit card mailings to contain certain disclosures in a “tabular format.” The Seventh Circuit affirmed. View "Acosta v. Target Corp." on Justia Law

McMahon apparently did not pay a 1997 utility bill. In 2011, LVNV purchased the debt, then $584.98. LVNV retained a collection agency, Tate, which sent a letter that said nothing about when the debt was incurred or the four-year Illinois statute of limitations. The district court dismissed McMahon’s classwide allegations, but did not dismiss his individual claim. McMahon ignored two settlement offers. The court found that the proposed settlement offered McMahon complete recovery for his individual claim, that it was made prior to class certification, and that it had the effect of depriving McMahon of a personal stake in the litigation. The Seventh Circuit consolidated appeals and held that, in some circumstances, a dunning letter for a time‐barred debt could mislead an unsophisticated consumer to believe that the debt is enforceable in court, and thereby violate the Fair Debt Collection Practices Act, 15 U.S.C. 1692. The court also held that the McMahon case is not moot. View "McMahon v. LVNV Funding, LLC" on Justia Law