Best Business And Class Action Lawyers Near Chicago

Plaintiff Sanctioned for Refusing to Answer Jurisdictional Discovery in Court Order Granting Motion to Compel Responses

April 27, 2021 | Peter S. Lubin and Patrick Austermuehle

In a recent order issued in the case of PNC Capital LLC v. TCode, Inc., the trial court swatted down the plaintiff’s excuses for refusing to answer jurisdictional discovery sought by the defendant and ultimately awarded sanctions against the plaintiff after finding that it lacked any substantial justification for its refusal to respond to essential jurisdictional discovery in order to thwart plaintiff’s constitutional right to remove the case to federal court based on diversity of citizenship. The order provides a cautionary tale for plaintiffs who wish to object to discovery issued by another party.

On September 4, 2020, the plaintiff in the case, PNC Capital LLC, which does business under the names Procuretechstaff Consulting Services and PTS Consulting Services, filed a three-count complaint against the defendant, TCode, Inc., in the Cook County state court alleging Breach of Restrictive Covenant (Count I), Tortious Interference with Contract (Count II), and Breach of Non-compete Agreement (Count III). The plaintiff has sought monetary damages of $104,000.

In response, the defendant requested that the plaintiff disclose the plaintiff’s members’ identity and state of citizenship. The purpose of the discovery was to determine if the case was eligible for removal to federal court. To be eligible for removal, the defendant would need to establish a valid basis for federal jurisdiction. In this case, the defendant sought to determine if the requirements for diversity jurisdiction under 28 U.S.C. §1332 were met. This requires establishing that the parties are completely diverse (i.e. citizens of different states) and an amount in controversy of more than $75,000. Plaintiff refused to comply, relying on a purported agreement with the defendant’s former counsel to exclusive jurisdiction in state court and venue in the Circuit Court of Cook County.

The requirements for removal of a lawsuit from state court to federal court are found in 28 U.S.C. §1446 and provides that a defendant seeking removal must file its notice of removal within 30 days following service of the complaint. However, if the pleadings do not make it clear whether the requirements for removal are met, a defendant must promptly investigate whether the case may be removed. Under such circumstances, the 30-day clock for removal does not begin to count down until the defendant receives information “from which it may first be ascertained that the case is one which is or has become removable.” 28 U.S.C. § 1446(b)(3).

In this case, the plaintiff was a limited liability company. For the purposes of invoking federal diversity jurisdiction, the citizenship of a limited liability company is based on the citizenship of each of its members. Thus, determining whether the case was removable required the defendant to identify each of the plaintiff’s members and their respective citizenships. Jurisdictional discovery is designed to obtain just this sort of information. A plaintiff is not at liberty to conceal facts necessary to the determination of whether the suit is removable or engage in a scheme to preclude the defendant’s timely removal. Rooflifters, LLC v. Nautilus Ins. Co., 13 C 3251, 2013 WL 3975382, at *3–6 (N.D. Ill. Aug. 1, 2013). Continue reading ›

Plaintiffs Who Failed to Opt-Out of Settlement on Time Denied Opportunity to Opt-Out After Settlement Approved

April 21, 2021 | Peter S. Lubin and Patrick Austermuehle

A truck manufacturer was agreed to a settlement after it was sued for selling trucks with defective engines. Two members of the litigation class had filed separate suits against the company in state court. After the settlement was finalized, the manufacturer sought to have those suits dismissed. The plaintiffs attempted to intervene in the court where the settlement was approved, seeking to opt-out of the terms of the settlement. The district court refused and the plaintiffs appealed. The appellate panel affirmed the decision of the district court. The panel found that the plaintiffs had not shown that their decision to refrain from timely objecting to the settlement was an excusable one. The panel determined that the plaintiffs were attempting to obtain the benefit of both the settlement and their separate litigation, as a way of receiving whichever of the judgments was larger. The panel found that the district court did not abuse its discretion in binding the plaintiffs to the terms of the settlement.

A class of owners accused Navistar of selling trucks with defective engines. The suit was settled for $135 million. In June 2019, the district court gave the settlement its preliminary approval. Before the approval could become final, the court had to notify class members of their right to opt out, and it needed to consider any substantive objections by class members who elected to be bound by the settlement. In August 2019 such a notice was sent to all class members. The court held a fairness hearing in November 2019 and rejected some objections to the settlement. In January 2020 the court entered a final judgment implementing the settlement. Continue reading ›

Judge Grants Final Approval to $25M Settlement in BIPA Class Action against ADP

April 15, 2021 | Peter S. Lubin and Patrick Austermuehle

A Cook County judge recently granted final approval to a $25 million class-action settlement to end a sweeping class-action lawsuit accusing well-known HR technology and service company, ADP, of violating the Illinois Biometric Information Privacy Act (BIPA) in the way it supplied equipment and support to employers requiring employees to scan their fingerprints when punching the clock at work.

According to class counsel, more than 40,000 people filed claims under the settlement. According to the terms of the settlement, these individuals will receive a prorated portion of the settlement fund equal to about $375 each. The judge approved an award of $8.75 million in attorney’s fees for class counsel or one-third of the total settlement funds.

The litigation resulting in this settlement dates back to 2017 when the first lawsuit was filed against ADP. In 2018, two additional class-action lawsuits were filed against ADP, all centered on nearly identical allegations. The three cases were eventually consolidated into one proceeding before Judge Atkins prior to the settlement. Continue reading ›

Consumer Class Action Lawsuit Alleges Flea and Tick Collars Cause Harm and Death

April 14, 2021 | Peter S. Lubin and Patrick Austermuehle

Fleas and ticks can carry Lyme disease, making them dangerous, and even potentially fatal, to us all, but especially to dogs who spend a lot of time outside and in whose fur fleas and ticks like to burrow. But when it comes to a certain flea and tick collar, could the protection against fleas and ticks be worse than the dangers posed by the bugs themselves?

Elanco Animal Health is an Indiana-based pharmaceutical company that makes medications and vaccines for animals, including Seresto flea and tick collars. After almost 1,700 incidents of pet deaths and about 900 humans harmed, all of which were reported as having been linked to the Seresto flea and tick collars, Elanco is now facing a class action lawsuit filed by consumers who allege their dogs were either harmed or killed by the collars, as well as a congressional investigation. Continue reading ›

McDonald’s Is Suing Former CEO to Return His $37 Million Severance Package

March 7, 2021 | Peter S. Lubin and Patrick Austermuehle

By now, we’ve all gotten used to hearing stories of high-level executives of huge corporations getting fired for misconduct, and while some people might be glad to see some signs of accountability, it’s usually bittersweet when it gets announced that they received a severance package worth tens of millions of dollars. But now McDonald’s is suing their former CEO, Steve Easterbrook, to return the $37 million he was paid as part of his severance package, claiming his misconduct was more extensive than they realized at the time they negotiated his severance package.

Easterbrook was removed as CEO back in November of 2019 for having a personal relationship with a female colleague. The relationship was apparently consensual and consisted of nothing more than text messages and video calls, but it violated company policy, and as a result, Easterbrook was fired from his position as CEO without cause.

Only after Easterbrook had been fired, and had negotiated his severance package with the company, did the company receive information from an anonymous source claiming Easterbrook had had sexual relations with at least three other women at the company. In one instance, Easterbrook allegedly approved a discretionary stock grant worth hundreds of thousands of dollars to be granted to one of the women while they were involved. Continue reading ›

State Court is Proper Forum for Biometric Privacy Case Against AI Company

February 1, 2021 | Peter S. Lubin and Patrick Austermuehle

An AI company harvested publicly available photographs from social media sites across the internet and then used those photographs to derive a biometric facial scan of each individual in the photograph. The company sold this database to law enforcement agencies to use in identifying persons of interest or unknown individuals. A woman sued in a class action, arguing that the harvesting of biometric data violated Illinois’ Biometric Information Privacy Act. The company removed the case to federal court, and the federal court ruled that the plaintiffs’ claims lacked standing under Article III. The appellate court agreed with the district court and affirmed, ordering that the case be remanded to state court.

Clearview AI is in the business of facial recognition tools. Users may download an application that gives them access to Clearview’s database. The database is built from a proprietary algorithm that scrapes pictures from social media sites such as Facebook, Twitter, Instagram, LinkedIn, and Venmo. The materials that it uses are all publicly available. Clearview’s software harvests from each scraped photograph the biometric facial scan and associated metadata, which it stores in its database. The database currently contains billions of entries.

Many of Clearview’s clients are law enforcement agencies. The clients primarily use the database to find out more about a person in a photograph, such as to identify an unknown person or confirm the identity of a person of interest. Users upload photographs to Clearview’s app, and Clearview creates a digital facial scan of the person in the photograph and then compares the new facial scan to those in its database. If the program finds a match, it returns a geotagged photograph to the user and informs the user of the source social-media site for the photograph.

In the wake of a New York Times article profiling Clearview, Melissa Thornley filed suit in Illinois state court under the Illinois Biometric Information Privacy Act (BIPA). BIPA provides robust protections for the biometric information of Illinois residents. Thornley’s complaint, filed on behalf of herself and a class, asserted violations of three subsections of BIPA. Clearview removed the case to federal court. Shortly after removal, Thornley voluntarily dismissed the action. Thornley then returned to the Circuit Court of Cook County in May 2020 with a new, significantly narrowed, action against Clearview. The new action alleged only a single violation of BIPA and defined a more modest class. Continue reading ›

Company Who Failed to Receive Assurance of Performance from Supplier Entitled to Purchase Goods Elsewhere Under Contract

January 25, 2021 | Peter S. Lubin and Patrick Austermuehle

A plastics company purchased ingredients from a producer of rubber products for many years under a series of short-term agreements. A few years after signing a long-term agreement, the rubber producer attempted to unilaterally raise the price of the products it was selling to the plastics company. When the plastics company protested that this was not allowed under the agreement, the rubber producer failed to make scheduled deliveries on time. The plastics company then sought an alternate source of rubber and sued the producer for the difference in cost it paid. The district court determined that the rubber company failed to adequately assure the plastics manufacturer of its ability to perform under the contract, and the plastics company was therefore entitled to seek supplies elsewhere and recoup damages. The appellate panel affirmed, finding that the plastic company’s actions were reasonable under the Uniform Commercial Code.

BRC Rubber & Plastics, Inc. designs and manufactures rubber and plastic products, primarily for the automotive industry. Continental Carbon Company manufactures carbon black, an ingredient in many rubber products. Before 2010, BRC bought all the carbon black it needed from Continental, though the two companies did not have a long term supply contract.

In 2009, BRC solicited bids from several suppliers of carbon black, seeking a long-term contract to ensure continuity of supply. Continental won the bidding, and in late 2009 the two companies signed a five-year contract to run to Dec. 31, 2014. Continental agreed to supply BRC with approximately 1.8 million pounds of prime furnace black annually in equal monthly quantities. The contract listed baseline prices for three types of carbon black which were to remain firm throughout the agreement. The contract also included instructions for calculating the feedstock price adjustment to account for fluctuations in the price of oil and gas. Continue reading ›

The Seventh Circuit Orders Disgorgement of Objectors’ Side Settlements

January 7, 2021 | Peter S. Lubin and Patrick Austermuehle

When a class action settles, class members generally have three options: (1) remain a part of the class, (2) opt-out of the settlement, or (3) object to the settlement. Many courts have bemoaned a perceived rise in the abuse of the third option by class members using a technique commonly referred to as “objector blackmail.” Objector blackmail involves class members filing frivolous objections to a class settlement, appealing decisions approving the settlement over such objections, and then seeking to obtain a side payment from the defendant in exchange for dismissal of their appeals. A recent Seventh Circuit opinion may spell the beginning of the end of this practice.

The issue of objector blackmail was front and center in the case of Pearson v. Target Corp. The plaintiffs in Pearson filed a putative class action alleging that the retailer Target, among others, made false claims about dietary supplements they manufactured and distributed. In March of 2013, the parties reached a settlement and asked the district court to approve it. After the first settlement was thrown out on appeal, the parties then reached a second settlement. Following the district court’s preliminary approval of the second settlement, three class members objected to the settlement. The objections ran the gamut from the number of class counsel’s fees to the failure of the defendants to admit liability under a statute they had not been accused of violating in the case. Continue reading ›

Illinois Court Affirms Dismissal of Terminated Employee’s Retaliatory Discharge and Intentional Infliction of Emotional Distress Claims

December 29, 2020 | Peter S. Lubin and Patrick Austermuehle

Terminating an employee can be a difficult thing for an employer. It can become even more difficult if the former employee decides to sue her former employer. An Illinois appellate court recently addressed such a situation and ultimately found that the trial court had properly granted summary judgment in favor of the employer on the former employee’s claims of retaliatory discharge and intentional infliction of emotional distress.

The plaintiff, Rita DiPietro began working for GATX Corporation, a Chicago-based equipment finance company, in July 2016 as a customer service representative. During her employment, the plaintiff took sick leave occasionally to care for her mother. Her manager told her to record this time off in the company’s timekeeping program. The program only accepted time recorded in half-day increments. As a consequence, even when the plaintiff took leave of fewer than four hours, the timekeeping program would reflect that she had taken four hours of leave.

When the plaintiff discussed the issue of the timekeeping program overstating the amount of sick time she had used, her manager allegedly told her to continue using the system to track her leave time. The plaintiff later complained about the sick time issue to both her manager’s manager and someone in the human resources department. She allegedly asked that her manager not be informed about the complaints because her manager had warned her not to complain to human resources or her manager’s manager about the issue. Nonetheless, her manager was informed of the plaintiff’s complaints.

Upon learning that the plaintiff had gone over her head, the plaintiff’s manager allegedly began contacting the plaintiff’s coworkers to question them about the plaintiff, seeking negative information that could be used to justify terminating the plaintiff. Approximately six weeks after making her complaint to HR and her manager’s manager, the plaintiff was terminated.

When the plaintiff requested a copy of her personnel file from GATX, it allegedly contained handwritten notes from the plaintiff’s manager that falsely documented counseling sessions with the plaintiff and back-dated documents that purported to criticize the plaintiff. The plaintiff denied that her manager or anyone else told her that her performance was deficient, counseled her in any respect, or took away any of her responsibilities. Instead, she asserted that she frequently received praise from upper management and attached emails representing a portion of those accolades to her pleadings. She also pointed to the fact that she received a rating of “solid achievement” on her only performance review and was given an above-average performance bonus in response. Continue reading ›

Edelson Law Firm Seeks Enforcement of Order Stopping Real House Wife Erika Jayne From Selling Off All Her Expensive Designer Clothing to Protect Lion Air Crash Victims

December 18, 2020 | Peter S. Lubin and Patrick Austermuehle

The Edelson law firm filed a motion to protect its Lion Air Crash victims’ settlement monies from alleged selling off by Erika Jayne of her expensive designer clothing suspecting she would allegedly spend the proceeds in violation of the Court’s order. The Motion states in relevant part:

On information and belief, some and likely all of the property offered for sale is community property in which Tom Girardi has an interest, and is therefore among his assets. For example, one of the items offered for sale is a $1,000 dress from Australian label Ellery. Ellery was founded during the Girardis’ marriage and the dress therefore could not have been acquired prior to the marriage. Further, while Edelson is unaware of the exact relationship between Vestiaire Collective and Erika Girardi, Erika Girardi may be attempting to move Tom Girardi’s assets outside the United States by selling them through a French company. Although Erika Girardi is not herself a party to the asset freeze order, she is bound by it. “[A]n injunction is binding on the parties to the proceeding; their officers, agents, and employees (acting in that capacity); and nonparties with notice who are either ‘legally identified’ with a party or who aid and abet a party’s violation of the injunction.” Nat’l Spiritual Assembly of Baha’is of U.S. Under Hereditary Guardianship, Inc. v. Nat’l Spiritual Assembly of Baha’is of U.S., Inc., 628 F.3d 837, 840 (7th Cir. 2010). “[T]he ‘legal identity’ justification for binding nonparties is limited to those who have notice of the injunction and are so closely identified in interest with the enjoined party that it is reasonable to conclude that their rights and interests were adjudicated in the original proceeding.” Here, Erika Girardi has notice of the injunction, because a copy of it was sent to her attorney. And even though divorce proceedings have been initiated, Erika Girardi could not be more closely associated with Tom Girardi. The property she is attempting to sell likely belongs, in part, to Tom Girardi, and she is only permitted to manage or sell it as a fiduciary to Tom Girardi. In addition, Edelson PC suspects that Tom Girardi and Erika Girardi have acted and continue to act in concert to divert money from Girardi Keese for their personal use. Tom Girardi’s creditors attested to $20 million in “loans” advanced to Erika Girardi’s company by Girardi Keese. Given the opacity of Tom Girardi and Girardi Keese’s finances, there is every reason to believe that Erika Girardi has client money. Simply put: the Court froze all of Tom Girardi’s assets, and that means all community property is frozen too. Erika Girardi must stop selling her clothes.

Here is the motion filed by the Edelson firm regarding stopping Erika Jayne from selling off her expensive clothing. Continue reading ›