Federal Civil Practice

Dist. Ct. erred in denying plaintiffs-current and former policyholders’ motion for remand back to state court their four claims, alleging breach of contract, Illinois Consumer Fraud and Deceptive Practices Act, unjust enrichment and breach of fiduciary duty against defendants-mutual insurance company and its current and former Board members and officers, where defendants had removed said claims to federal court under Class Action Fairness Act (CAFA). Instant case qualified for internal affairs exception to removal under section 1332(d)(9)(B) of CAFA, where: (1) each claim essentially alleged that defendants accumulated and retained excess surplus from policy premiums  of $3.2 billion and in turn failed to provide plaintiffs with insurance policies at cost, and (2) allegations of complaint satisfied said exemption, where plaintiffs alleged that defendants exercised discretion to set capital levels and to distribute dividends in impermissible ways. Ct. further found that home-state exemption to removal under CAFA also applied, where record showed that: (1) two-thirds of proposed class members and 45 out of 46 defendants were citizens of Illinois; and (2) sole defendant, who was insurance company’s chief fiscal officer and citizen of Massachusetts, was not “primary defendant,” or “real target” of plaintiffs’ lawsuit.

Dist. Ct. did not err in dismissing for failure to state valid claim, plaintiff-attorney’s section 1983 action, alleging that defendant-ARDC’s suspension of plaintiff, as well as ARDC’s alleged defamatory description of said suspension on its website violated his equal protection and substantive due process rights. Basis of 90-day and until further notice suspension was fact that: (1) plaintiff, who held New York law license, had applied for Illinois law license, but was turned down; (2) between 2004 and 2019, plaintiff nevertheless maintained active law practice in Illinois based on series of successful pro hac vice motions; (3) ARDC charged plaintiff with misconduct for representing that he was licensed to practice law in Illinois; and (4) defendant-ARDC administrator successfully moved Illinois Supreme Court to impose instant suspension. Ct. of Appeals rejected plaintiff’s argument that any Dist. Ct. judge, as licensed Illinois lawyer, was biased against him, and thus could not act on instant complaint. Ct. further found that suspension decision of Illinois Supreme Court could not be collaterally attacked via instant civil action. Moreover, plaintiff could not use section 1983 action to seek money damages against ARDC because ARDC, as state agency, was not “person” for section 1983 action purposes. Also, plaintiff could not bring defamation claim under section 1983 against defendant-ARDC administrator, since defamation action is not cognizable Constitutional claim under either equal protection or due process clauses. Ct. also issued rule to show cause as to why plaintiff should not be sanctioned for bringing instant action.

Dist. Ct. did not err in denying plaintiffs' motion for issuance of preliminary injunction in plaintiffs' claim, alleging dormant Commerce Clause challenge to residency provisions of licensure of cannabis dispensaries under Illinois Cannabis Regulation and Tax Act, where plaintiffs-unsuccessful out-of-state applicants for said licenses alleged that rules for 2021 issuance of said licenses heavily favored applicants who were residents of Illinois. Denial of preliminary injunction, which sought stoppage of completion of licensing process for 2021 and 2022 licenses, was appropriate, even though plaintiffs had established likelihood of success on their dormant Commerce Clause claim, where, to extent some form of unwinding relief was possible: (1) plaintiffs waited too late to bring instant cause of action, i.e. from 2019 enactment of said rules to March 2022 when it brought instant lawsuit, where 2021 licenses had been awarded on conditional basis in September of 2021; and (2) plaintiffs’ challenge to issuance of 2022 licenses was unripe, since state agency had not issued final rules for issuance of said licenses. Ct. further noted that residency preferences for issuance of 2022 licenses had since been withdrawn. Also, portion of plaintiffs’ appeal was now moot, where denial of preliminary injunction cleared way for issuance of 2021 licenses.

Dist. Ct. erred in dismissing on collateral estoppel grounds portion of plaintiff’s section 1983 action, alleging that defendants-police officials unlawfully searched and seized firearms from his hone, where seizure of said firearms eventually led to filing of series of criminal charges, and where plaintiff eventually pleaded guilty to charge of aggravated discharge of weapon. While Dist. Ct. believed that plaintiff’s search and seizure claim was collaterally estopped due to unfavorable ruling in prior action, said prior action did not concern any search and seizure claim, but rather pertained only to plaintiff’s contention that State of Illinois and Cook County Dept. of Corrections were holding him under false pretenses. Moreover, prior action did not resolve whether instant warrantless search of defendant’s home and seizure of his property were justified. Dist. Ct., though, properly dismissed plaintiff’s unlawful detention claim, where: (1) said claim is Heck-barred because it would necessarily imply invalidity of his conviction; and (2) plaintiff lacked standing to pursue claim that his five-year pre-trial detention was unlawful, where said period was credited to his valid sentence on his conviction for aggravated discharge of weapon, and where section 1983 plaintiff could not receive damages for time spent in custody that was credited to valid sentence.

In class action alleging that defendant engaged in price fixing in broiler chicken market, Dist. Ct. erred in awarding class counsel attorney’s fees totaling $57.4 million, following plaintiff-class’s settlement of action for $181 million, where award represented one third of settlement amount, excluding expenses and incentive awards. While Dist. Ct.’s assessment of attorney’s fees is normally accorded deference, remand was required for new consideration of fee award, where: (1) Dist. Ct. was required when calculating attorney’s fee awards to calculate fees in accordance with hypothetical ex ante bargain; and (2) when calculating instant fee award, Dist. Ct. improperly failed to consider bids made by class counsel in auction of other claims, as well as fee awards received by class counsel obtained in cases originating outside of Seventh Circuit Ct. of Appeals. Ct. of Appeals also directed Dist. Ct to reconsider defendant’s request to obtain discovery from plaintiff’s experts who rendered opinion of plaintiff’s fee request.

In action alleging that defendant violated Driver’s Privacy Protection Act (Act) by establishing online “instant quote” feature on its auto insurance website that disclosed applicant’s driver’s license number in its auto-fill program, where applicant merely supplied name and address, Dist. Ct. did not err in finding that plaintiffs lacked standing, where plaintiffs could not identify concrete injury arising out of said disclosure of their driver’s license numbers. While one plaintiff asserted that she was required to purchase credit-monitoring service because of said disclosure, and another plaintiff asserted that fraudulent brokerage account was registered in his name after said disclosure, plaintiffs failed to show how disclosure of driver’s license number played any role either in their credit or in opening of brokerage account. Moreover, plaintiffs’ allegation that said disclosure caused them worry and anxiety was insufficient to establish concrete injury. Similarly, plaintiff could not establish concrete injury arising out of fact that two bogus unemployment claims were generated in New York after said disclosure, where there was no showing that said claims required disclosure of driver’s license number. Fact that Act allows “liquidated damages” did not confer standing on instant plaintiffs. (Dissent filed.)

Dist. Ct. did not err in granting defendants-police detective and prosecutor’s motion for summary judgment on qualified immunity grounds in plaintiff’s section 1983 action, alleging that defendants subjected him to false arrest on sexual assault of minor charge, where: (1) said charge was eventually dismissed; and (2) defendants withheld certain facts in criminal complaint that, according to plaintiff, would have negated any finding of probable cause to support his arrest. Dist. Ct. could properly find that defendants were entitled to qualified immunity, where no reasonable jury could find that it would be clear to reasonable officer that information omitted from complaint would have negated probable cause to arrest plaintiff. This is so, Ct. of Appeals determined, because 15-year-old victim gave clear account of alleged assault and any inconsistencies between statements by victim and victim’s mother were minor, and because defendants lacked any indication that victim and her mother had any motive to lie. Also, plaintiff failed to cite to any analogous case that clearly established that sort of facts omitted by defendants, such as certain inconsistencies in versions of assault given by victim and her mother and lack of video evidence to corroborate claim of sexual assault, was material to probable cause determination.

Dist. Ct. did not err in granting defendants-Indiana election officials’ motion for summary judgment in plaintiffs-Indiana voters’ section 1983 action, alleging that state’s actions in allowing voters 65 years old and older to vote by mail, but failing to allow same privilege for voters under age 65, who failed to qualify for one of twelve other categories of voters who also could vote by mail, violated their rights under 26th Amendment. Plaintiffs failed to establish that Indiana’s extension of absentee voting to elderly imposed any unconstitutional burden on right of those under sixty-five years old to vote, especially where all voters could vote on election day, as well as vote at certain locations up to 28 days prior to election day. As such, plaintiffs failed to establish any “abridgement” of their right to vote as that term is contemplated in Supreme Court case law. (Partial dissent filed.)

Dist. Ct. did not err in dismissing on Article III standing grounds plaintiff’s action under Fair Debt Collection Practice Act (FDCPA). In said action, plaintiff alleged that he incurred injury arising out of receipt of false, misleading and deceptive letter from defendants regarding whether defendants would seek statutory attorney’s fees in underlying state-court collection action, and that plaintiff lost sleep over attorney’s fee issue and hired attorney to ascertain actual amount owed and paid appearance fee in state-court action. Dist. Ct. could properly find that plaintiff lacked standing, where: (1) plaintiff’s decisions to hire attorney and to pay appearance fee are insufficient to establish standing; and (2) plaintiff’s lost sleep was not concrete harm that would support plaintiff’s standing. Also, plaintiff’s confusion as to attorney’s fees issue, which led to hiring of his attorney, was insufficient to establish his standing to bring instant lawsuit. (Dissent filed.)

Dist. Ct. erred in granting defendant-prison clinical services supervisor’s motion for summary judgment in plaintiff-prisoner’s section 1983 action, alleging that defendant violated his First Amendment rights by retaliating against him for refusing to sign release form, when defendant directed that disciplinary ticket be issued to him. Record showed that on day plaintiff was scheduled to be released from prison and go on mandatory supervised release, defendant gave plaintiff instant electronic monitoring form that stated it was to be signed by only sex offenders, (where plaintiff was not sex offender), and that defendant directed that disciplinary ticket be issued against plaintiff, (which resulted in plaintiff being placed in segregation), after plaintiff refused defendant’s directive to sign said form on four occasions. Issuance of said ticket ultimately resulted in revocation of his supervised release and imposition of additional 18-month prison sentence. Illinois law, though, did not require plaintiff’s signature on said form, and defendant did not seek guidance from either supervisor or legal authority on applicability of form to plaintiff and refused to answer plaintiff’s question as to why he had to sign said form. Defendant could not prevail on her summary judgment motion, where record showed that: (1) defendant was sufficiently involved in issuance of disciplinary ticket and resulting placement of plaintiff into segregation that formed basis of adverse act; (2) plaintiff’s refusal to sign form was protected activity under First Amendment, where plaintiff was merely seeking explanation for why form applied to him; and (3) there is material dispute as to defendant’s motivation as to why disciplinary ticket was issued. (Dissent filed.)