February 2016 Federal Civil Practice Newsletter

Plaintiff filed a trademark infringement and counterfeiting action against dozens of e-commerce vendors, most of which, including the defendant, resided in China. The district court allowed plaintiffs to serve defendant in China by email by finding that the Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters (also known as the Hague Service Commission) permitted service in that manner. The district court then entered default judgment. Defendant eventually appeared and moved to vacate the judgment for lack of proper service. The district court denied the motion and defendant appealed. The Seventh Circuit reversed and remanded, explaining that the Convention prohibits email service in China and that the district court must decide whether the Convention applied at all to the matter. (JACKSON-AKIWUMI and PRYOR, concurring)

Plaintiff secured a loan from defendant by offering a mixed-use building as collateral. After one of the building’s largest tenants filed for bankruptcy, a dispute arose regarding how long the loan servicer could hold excess building revenue in a special account as additional security. The district court dismissed the plaintiff’s breach of contract claim and plaintiff appealed. The Seventh Circuit reversed and remanded, finding that the agreements in question were ambiguous and that a breach of contract claim cannot be resolved on a motion to dismiss where the language of a contract is ambiguous. (RIPPLE and ST. EVE, concurring)

Plaintiff filed a lawsuit against her employer and two other employees alleging discrimination. The lawsuit was stayed in favor of arbitration and after the arbitrator ruled in the defendants’ favor, plaintiff asked the district court to set aside the award. The district court instead confirmed it and plaintiff appealed. The Seventh Circuit affirmed, finding that plaintiff’s allegations regarding the entry and consideration of evidence during the arbitration did not constitute misconduct or misbehavior by the arbitrator. (ROVNER and SCUDDER, concurring)

Plaintiff, a towing company, filed a lawsuit against the defendant county after the county removed the plaintiff from a list of towing businesses that were available on a rotating basis to recover vehicles on public roads. Plaintiff alleged that the defendant violated its procedural due process rights. The district court dismissed the complaint by finding that it did not plausibly allege that it had a protected property interest in a spot on the county’s towing rotation list. The Seventh Circuit agreed and affirmed. (ST. EVE and PRYOR, concurring)

Plaintiffs filed a lawsuit against the Department of Homeland Security alleging that the department violated federal law by arresting non-citizens without reason to believe that they were likely to escape before warrants could be obtained. To resolve the lawsuit, the parties entered into a consent decree. On appeal, defendants did not challenge the validity of the consent decree or the authority of the district court to enter it, but objected to the district court’s decision to extend the consent decree by 118 days due to defendant’s substantial non-compliance and the district court’s order that the defendant release 13 class members as well as approximately 200 additional individuals whose arrests “potentially” violated the law. The Seventh Circuit affirmed the order extending the consent decree and affirmed the order for the release of class members to the extent that it ordered the release of class members for whom a determination was made that they were arrested without a warrant but reversed to the extent it required the release of “potential” class members. (PRYOR, concurring in part and concurring in judgment and KIRSCH, dissenting)