Chicago Business Litigation Lawyer Blog

“Commonality” and “Numerosity” are two of a handful of factors that most courts consider in deciding whether to allow a toxic dumping lawsuit to proceed as a class action. In Doyle v. Fluor Corp., a Missouri appellate court explains these requirements and how they should be applied in a particular matter.

Plaintiffs brought the action alleging that Defendants, owners and operators of a smelting (the process by which metal is extracted from ore) business in Herculaneum, Missouri, released lead, heavy metals and other toxic substances into the air, which in turn caused damage to real property in the surrounding area. Plaintiffs sought damages under theories of negligence, private nuisance, strict liability, and trespass. The trial court granted Plaintiffs’ motion to certify the matter as a class action with the class representatives suing on behalf of nearly 400 people who “own and occupy” residential real property in the area near Defendants’ operation.

On appeal, the Court of Appeals for Missouri’s Eastern District upheld the decision to certify the class. A class may be certified under Missouri law where: 1) the class is so numerous that joinder of all members is impracticable; 2) common questions of law or fact exist among the class; 3) the claims or defenses of the representative parties are typical of that of the class; and 4) the representative parties are able to fairly and adequately protect the class' interest. In addition, a court considering certification must also determine that the common factual or legal questions "predominate over any questions affecting only individual members" and that a class action is more suitable than other methods to fairly and efficiently adjudicate the issue.

In affirming the trial court’s decision, the court noted that the “commonality” requirement does not mean that all issues in a particular action be common to all class members, but instead that the common issues predominate over the others. “A single common issue may be the overriding one in a matter, despite the existence of numerous remaining individual questions,” the court ruled. In this case, several of the action’s central issues were shared among the class, including whether Defendants were responsible for emitting toxic metals in to the air; whether such an act constitutes negligence; and whether the pollution caused property in Herculaneum to be contaminated.

Continue reading " The Commonality and Numerosity Requirements in Missouri Class Action Certification - Doyle v. Fluor Corp. " »

Earlier this year, the Appellate Court of Illinois handed down an opinion that has implications for businesses with leased premises. Our Aurora business attorneys found Bright Horizons Children's Centers LLC v. Riverway Midwest LLC, which is a dispute regarding a commercial lease that was initially filed in Cook County.

Bright Horizons is a company that operates day care facilities across the state of Illinois. The company entered into a ten year commercial lease agreement with Riverway for a property in Rosemont, Illinois. The lease agreement contained restrictive language allowed for the building to only be used for a child-care center. The agreement also contained a relocation provision which gave Riverway the right to relocate Bright Horizons, upon 180 day written notice, to a different property of equal quantity and quality to the original premises. The dispute between these two parties arose when Riverway sought to invoke the relocation clause less than one year into the lease.

Riverway attempted to exercise the relocation provision on three occasions. The first attempt was unsuccessful because the alternative premises allegedly presented to Bright Horizons did not meet the requirements of the lease agreement. Bright Horizons accepted the second space offered by Riverway, but Riverway withdrew their notice before renovating the new facilities to meet the requirements of the lease. Riverway then proposed a third relocation premises, and allegedly informed Bright Horizons that if they were unable to agree on an alternative space, Riverway would terminate the lease in 180 days from the date of the notice. This third property allegedly ran afoul of state licensing standards for child care facilities and the Illinois Administrative Code. Bright Horizons informed Riverway that the third property did not meet Illinois' licensing standards and could not be legally used as a child care facility. In response, Riverway informed Bright Horizons that they were in default of the lease and that Bright Horizons could cure their default by relocating to the third alternative premises.

Bright Horizons then filed for declaratory judgment requesting that the trial court find: 1) that they were not in breach of the lease, 2) that Riverway could not terminate the lease, and 3) that Riverway had failed to properly exercise the relocation clause of the lease agreement. Bright Horizons then filed for summary judgment on these issues, which was granted by the trial court. Riverway then appealed the trial court's ruling. On appeal the Appellate Court agreed with the trial court's grant of summary judgment in favor of Bright Horizons. In so ruling, the Court held that the lease allowed for one permitted use of the premises and required that Bright Horizons comply with all laws and regulations, including the state child-care licensing standards. The Court held that Bright Horizons' relocation to the proffered space would violate state regulations and cause Bright Horizons to be in breach of the lease due to their inability to operate a child-care. As such, the Court affirmed the ruling of the trial court granting summary judgment in favor of Bright Horizons.

Continue reading " llinois Appellate Court Rules that a Relocation Provision in a Commercial Lease Must Abide by State Regulations " »

In order to hold an employee or former employee liable under an agreement not to compete, an employer must offer the employee some form of consideration in exchange for the employee’s promise not to compete with the employer. The Northern District of Illinois tackles the difficult question of how much consideration is enough in LKQ Corporation v. Thrasher.

Plaintiff LKQ Corporation is a national automobile parts supplier. In January 2010, Plaintiff hired Defendant Corey Thrasher as a Sales Representative, handling accounts in the Northwest United States. Defendant signed a noncompete agreement shortly after he was hired, allegedly stating that he would not compete with Plaintiff nor solicit Plaintiff’s customers during his employment and for one year following the end thereof. The noncompete agreement also included a forum selection clause designating that any actions related to the contract be raised in Illinois and considered under Illinois law.

One year later, Defendant resigned from his position, effective February 2011. On the day he resigned, Defendant allegedly contacted a number of Plaintiff’s customers via email, telling them that he had taken a similar position with B&R Auto Wrecking, Inc. and that he was looking forward to continuing to work with these customers. Plaintiffs allege that Defendant has continued to solicit LKQ customers to purchase B&R merchandise and that several LKQ clients have decreased their business with LKQ as a result.

Plaintiff filed suit alleging that Defendant breached the non-compete agreement. The court denied Defendant’s motion to dismiss the action, in which he argued that the agreement lacked sufficient consideration to be enforceable. The court concluded that Plaintiff received continued employment for a "substantial period" following the execution of the agreement, which constituted adequate consideration, and therefore the agreement was enforceable.

In order for a contract to be enforceable, the promises therein must be given in exchange for consideration. Typically, consideration is anything of value received in exchange for a promise. In the employment context, however, a party seeking to enforce an noncompete agreement must prove that sufficient consideration was given in exchange for the promise not to compete because the simple benefit of continued employment is illusory: employment is at will and a person who signs a noncompete agreement can still be fired at any time. Thus, only continued employment for a “substantial period” or some other form of consideration is sufficient to support a noncompete agreement.

Continue reading " Consideration in Illinois Noncompete Agreements: How Much Is Enough? LKQ Corporation v. Thrasher " »

For many business owners, they operate their companies with the hopes that they will continue to be successful ventures long after they are gone. However, both low level and senior personnel eventually move on, and businesses may have obligations to their surviving family members. DiTommaso-Lubin is familiar with such agreements, and often times companies may not wish to honor those obligations after employees are no longer working for the company. Pielet v. Pielet is one case discovered by our Crystal Lake business litigation lawyers that addresses that very issue.

In Pielet v. Pielet, Arthur Pielet allegedly entered into a consulting agreement with Defendants that provided him lifelong monthly payments in exchange for his consulting services for Defendants scrap metal business, and should he pass on, those payments were to continue and be paid to his wife until her death. Arthur Pielet eventually died, and Defendants then allegedly ceased making payments to his widow, who filed suit alleging a breach of contract and successor liability among other causes of action. Plaintiff successfully filed a motion for summary judgment, and Defendants appealed the trial court's decision.

On appeal, Plaintiff argued that Defendant PBS One, a successor in interest to Pielet Corp. (the company who was originally obligated under the consulting agreement), was liable under the agreement because they had entered into a purchase and assignment agreement with Pielet Corp. In response, PBS One argued that a novation had occurred whereby Pielet LP had substituted for Pielet Corp. in the consulting agreement, which absolved PBS One of liability. PBS One supported their claims with deposition testimony that, in the absence of providing a defense, at least raised an issue of material fact as to the existence of the novation. Additionally, PBS One argued that because the company had dissolved four years prior to the cessation of payments (and the accrual of Plaintiff's claims), the applicable Illinois Survival Statute prevented Plaintiff's claim.

The Appellate Court began with its analysis of the Survival Statute, and found that the statute applies to “rights”, “liabilities”, and “causes of action.” Because the case at bar concerned Plaintiff's “right” to payment and Defendants' “liability” to pay, and Plaintiff raised her claim to payment within the five-year period allowed under the statute, her claim was allowed under the law. The Court went on to discuss Defendant's second argument regarding the existence of a novation that would place liability elsewhere. The Court did not make a finding of a novation, but the facts indicated that a novation could be inferred at two different points in time. Thus, the Court concluded that a triable fact question existed as to whether a novation occurred, and if there was a novation, at what point in time did it occur. In so holding, the Court reversed the trial court's grant of summary judgment on all of the appealed causes of action, and remanded the case.

Continue reading " Appellate Court Overturns Grant of Summary Judgment in Successor Liability Case " »

A noncompete agreement typically protects a business that discloses confidential information or business practices to another business or individual from having that information later used against it in competition. Such agreements are generally enforceable and even standard in a wide variety of industries. However, just because a business can prove that someone violated a noncompete agreement does not mean that the business can prevent that person or entity from continuing to do so. In EBN Enterprises, Inc. v. CL Creative Images, Inc., the Northern District of Illinois explains the additional hoops that a party to a noncompete agreement must jump through in order to get an injunction preventing another party from continuing to breach the agreement.

Defendants owned a hair salon and operated it under a franchise agreement with Plaintiffs, the owners of the “Fantastic Sams” salon trade name and operation. The 10-year agreement allegtedly allowed Defendants to use the Fantastic Sams name and trademarks for Defendants’ salon. In return, Defendants agreed to pay a weekly royalty fee and a portion of certain costs. Defendants also agreed that they would not have any connection with a hair care business located within five miles of any Fantastic Sams salon for two years following the agreement’s termination.

The parties allegedly repudiated the agreement shortly before its termination and Defendants continued to operate a salon – now under the name “Corda’s Hair Salon” - at the same location. Plaintiffs filed suit, seeking an injunction preventing Defendants from operating a hair salon within five miles of the Fantastic Sams salon that Defendants previously operated. In order to obtain such relief, the court stated that Plaintiffs must show that: 1) they will suffer irreparable harm without a preliminary injunction; 2) traditional legal remedies will not adequately remedy the harm; and 3) their claim has some likelihood of success on the merits.

Plaintiffs made the requisite showing of success on the merits – a “greater than negligible chance of winning,” according to the court – because Defendants’ continued operation of their salon is in an alleged breach of the franchise agreement. Nevertheless, Plaintiffs failed to show that they will be irreparably harmed unless Defendants are enjoined from operating the salon. The court declined to presume such harm based solely on the breach of the agreement. Instead, it found that Plaintiffs failed to show that the injunction was necessary to prevent use of Plaintiffs’ confidential information, unfair appropriation of other proprietary or unique aspects of Plaintiffs’ business or consumer confusion or to preserve any relationships Plaintiffs would have with customers. Accordingly, the court denied Plaintiffs’ injunction request.

Continue reading " Injunctive Relief for the Breach of a Noncompete Agreement in Illinois - EBN Enterprises, Inc. v. CL Creative Images, Inc. " »

A recent ruling out of Louisiana makes clear that in determining whether a group of plaintiffs in a toxic contamination case should be permitted to bring their claims as a class action, the question is not whether the plaintiffs can ultimately win the case, but whether they’ve simply met the basic requirements for class certification.

In Price v. Martin, Louisiana’s Third Circuit Court of Appeal affirmed a trial court's certification of the plaintiff class in an action alleging that the defendants - local railroad tie manufacturers – contaminated the property surrounding their operation, finding that the plaintiffs met the certification requirements regardless of the likelihood of their success on the merits of their claims.

The plaintiffs are persons residing in Alexandria, Louisiana, near the Dura-Wood Treating Company facility, owned by defendants at various times over a 66-year period. They claim that Dura-Wood's creosote-treated railroad tie operation contaminated soil, sediments, groundwater and buildings in the surrounding area, damaging the plaintiffs’ property. Following a flurry of motions, the trial court granted certification of the plaintiffs’ class action, allowing representative parties to sue on behalf of roughly 4,700 landowners in the allegedly contaminated area. The appeals court upheld the decision, finding that “[t]he trial court applied the correct legal standard in deciding to certify this class.”

The court quoted the state Supreme Court’s decision in Dukes v. Union Pacific R.R. Co. in describing the nature of class action lawsuits in Louisiana:

A class action is a nontraditional litigation procedure which permits a representative with typical claims to sue or defend on behalf of, and stand in judgment for, a class of similarly situated persons when the question is one of common interest to persons so numerous as to make it impracticable to bring them all before the court. Ford v. Murphy Oil U.S.A., Inc., 96-2913 (La. 9/9/97), 703 So.2d 542, 544. The purpose and intent of class action procedure is to adjudicate and obtain res judicata effect on all common issues applicable not only to persons who bring the action, but to all others who are "similarly situated." Id.

The court further determined that the plaintiffs satisfied Louisiana's numerosity, commonality, typicality, adequacy and class definition requirements for certification. Although the facility at issue had three owners who engaged in varying operations using different chemicals over the 66-year period during which the contamination allegedly took place, the court held that “one factual issue is common to the potential class—whether defendants' off-site emissions caused property damage to the residences in the area surrounding the plant. This issue will not be resolved by examining individual residences in the area. Rather, the elevated toxin levels must be shown on an area-wide basis as emanating from the defendants' facility.”

Continue reading " Class Action Certification in Toxic Pollution Cases: It's Not Whether You Will Win or Lose, but How You Will Play the Game - Price v. Martin " »

We recently had a win in the Illinois Appellate Court in S37 v. Advanced Refrigeration. The Appellate Court affirmed the trial court's decision to certifiy a class action regarding the claims in that. Advanced sells appliances to various businesses and added a charge on its invoices called government processing requirment. This fee was not required to be paid by the government and was not a government mandated fee. Advanced created the fee to recover costs it allegedly incurrs in complying with government requirements. The Class-Action Complaint alleged that the fee was deceptive in that it allegedly made a profit generating fee appear as if it were a government required fee. Advanced denied these allegations and opposed class-certification. The trial court denied Advanced's motion to dismiss and then certified the case as a class-action.

The Appellate Court granted leave for an appeal of the class-certification decision. Advanced argued that it disclosed the true nature of the fee to all customers and that such alleged disclosure gave rise to individual issues blocking class certification. The Class argued that this defense did not create invididual issues barring class-certification as the defense of full disclosure was common the entire class given Advanced's claim that it told all customers that the fee wasn't a government mandated fee or tax as the fee's name allegedly suggested it was.

The Appellate Court rejected Advanced's arguments and found that the trial court properly exercised its discretion in certifying the class-action.

The Appellate Court held:

We agree with the plaintiff that this case fits the pattern of cases routinely certified as class actions by Illinois courts. See Martin v. Heinold Commodities, Inc., 163 Ill. 2d 33, 643 N.E.2d 734 (1994) (resolved as a class action, the court held the commodity option contracts broker’s disclosure statement was misleading, in violation of the Illinois Consumer Fraud Act, because the “foreign service fee” to be charged investors was a commission from which it would receive compensation); Harrison Sheet Steel Co. v. Lyons, 15 Ill. 2d 532, 155 N.E.2d 595 (1959)(class action was proper where the defendant refused to refund illegal occupation taxes collected from its customers); P.J.’s Concrete Pumping Service, Inc. v. Nextel West Corp., 345 Ill. App. 3d 992, 1003, 803 N.E.2d 1020 (2004) (“The primary factual issue in this case is a uniform billing practice that allegedly violated the Consumer Fraud Act in the same manner as to all class members. The propriety of such a uniform practice is amendable to being resolved in a class action.”).

The Appelalte Court also noted that the brief of the National Association of Consumer Advocates (which filed a friend of the court submission) stated that class-actions provided a way for small claims like this to proceed to court and to obtain justice when small alleged wrongs in the aggregate allegedly harm many consumers:

“ ‘The policy at the very core of the class action mechanism is to overcome the problem that small recoveries do not provide the incentive for any individual to bring a solo action prosecuting his or her rights. A class action solves this problem by aggregating the relatively paltry potential recoveries into something worth someone’s (usually an attorney’s) labor.’ ” Amchem Products, Inc. v. Windsor, 521 U.S. 591, 617 (1997), quoting Mace v. Van Ru Credit Corp., 109 F.3d 338, 344 (7th Cir. 1997).

You can view the full opinion of the Appellate Court by clicking here.

Continue reading " Class Certification Order Affirmed By Appellate Court " »

Our Blog contained a post regarding the Illinois Appellate case Janowiak v. Tiesi. The post described the allegations in the pleadings recited in the Appellate Court opinion. Our blog writer at Justía did not intend and the post did not describe the facts of that case as anything other than allegations. However, we received a letter from counsel for the Janowiak parties stating that they believe the post states that the allegations are presented as facts. We have therefore deleted that post from the blog. Per the request of the Janowiak parties, we state that the allegations in that case are allegations not facts as stated in the Appellate Court opinion and as the blog post previously stated. To the extent the blog post can be misinterpreted as stating that the claims in Janowiak v. Tiesi are facts, we retract those statements and apologize to the Janowiak parties for the misunderstanding. We regret this misunderstanding. Our blog writer at Justía simply intended to report allegations in a case and had no intent to report those allegations as facts.

It doesn’t take a genius to understand that every person is different. Our daily routines; our likes and dislikes; our physical, spiritual, family and money situations; each of these differences make individuals individual. In the toxic dumping class action context, the Southern District of Illinois has made clear that while personal differences mean that some questions are not suitable for class action proceedings, it should not prevent the court from certifying a class on other common questions central to the action.

In Leib v. Rex Energy Operating Corp., Plaintiffs - residents of Bridgeport, Illinois - filed suit alleging that their properties were contaminated with unsafe levels of hydrogen sulfide (H2S), a poisonous gas, released into the air from the more than 100 nearby oil wells owned by defendant PennTex Resources Illinois, Inc. ("PennTex") and managed by defendant Rex Energy Operating Corporation ("Rex Energy"). Plaintiffs sought damages for injury to property, injunctive relief restraining Defendants from allowing further contamination and forcing them to abate the existing contamination, the establishment of a Court-administered fund for medical monitoring of class members, punitive damages, costs and fees.

Plaintiffs also filed a motion for class certification, seeking to certify a class of all persons and entities owning property or residing in the area surrounding the wells and including most of the towns of Bridgeport and Petrolia. The court determined that Plaintiffs satisfied the requirements for class certification on the question of whether and to what extent Defendants contaminated the Class Area with H2S, but not as to the question of individual property damage amounts.

The court found that the contamination question involves issues common to the entire class:

Plaintiffs' claims arise out of the same core of operative facts, that is, the allegation that [Defendants] allowed dangerous levels of H2S to contaminate the air in the Class Area. Such alleged behavior constitutes standardized conduct toward all prospective class members. Resolution of this question — whether and, if so, to what extent [Defendants] caused contamination in the Class Area — will certainly advance the litigation.

The court further found that Plaintiffs’ claims were sufficiently common to those of the proposed class, noting “[P]laintiffs need not allege the same exact injury or be free of factual distinctions so long as their claims are based on the same legal theory.”

Continue reading " Illinois Court Rules that Class Certification in Toxic Dumping Cases is Not an “All or Nothing” Decision - Leib v. Rex Energy Operating Corp. " »