Friday, December 31, 2010

Decision of Interest: Seventh Circuit Orders Injunction of "Copycat" Class Action

Last month, a Seventh Circuit panel ordered an Illinois district court to enjoin a class action that had been filed in California by the same attorneys whose earlier class action in Illinois was unsuccessful. The California judge had allowed the class action to proceed, rejecting the defendant’s argument that it was collaterally estopped by the unsuccessful Illinois class action. In Thorogood v. Sears, Roebuck & Co., 624 F.3d 842 (7th Cir. 2010), the Seventh Circuit wrote in an opinion authored by Judge Posner:

The judge in California thus was wrong; Murray's suit is barred by collateral estoppel. But because of the cost of responding to discovery, and the erroneous but unappealable ruling permitting discovery in Murray's suit, Sears has no adequate remedy at law against a litigation aimed at coercing a settlement by running up Sears's discovery expense.

Abuse of litigation is a conventional ground for the issuance of an injunction under the All Writs Act, e.g., In re Martin-Trigona, 737 F.2d 1254, 1262 (2d Cir.1984), because without an injunction a defendant might have to plead the defense of res judicata or collateral estoppel in a myriad of jurisdictions in order to ward off a judgment, and would be helpless against settlement extortion if a valid such defense were mistakenly rejected by a trial court.

The plaintiff’s petition for rehearing and rehearing en banc (which was denied) prompted a second order from the Seventh Circuit panel, available here or on Westlaw at 2010 WL 4890698. It begins:

[I]n view of the accusations leveled in the petition by the plaintiff's lawyer, Clinton A. Krislov, against the panel's decision, we have decided that a further statement, beyond merely reporting the denial of the petition, would be helpful to readers of the panel opinion (624 F.3d 842, 2010 WL 4286367, Nov. 2, 2010; our earlier opinions in this protracted litigation are reported at 547 F.3d 742 and 595 F.3d 759), readers of the petition for rehearing—and perhaps even Mr. Krislov, whose accusations are over the top, as we shall now explain, and who may wish to moderate his fury.


(Hat Tip: Shaun Shaughnessy)

Class Actions, Recent Decisions | Permalink


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