Chicago Business Litigation Lawyer Blog
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NY AG Files $40M Lawsuit Against Trump University
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NY Attorney General sues Trump University for alleged consumer fraud. Our Chicago consumer fraud and class action lawyers have successfully pursued class actions against trade schools in Illinois that have misrepresented the percentage of graduates who have obtained jobs in the field or omitted to disclose that very few graduates obtain jobs in the field. Illinois requires trade schools to disclose the percentage of graduates who obtain jobs in the field.
Our law firm is pursuing class actions and putative class actions against for profit vocational schools in the Chicago area. We have interviewed many students of for profit universities, colleges and vocational schools who believe that various for profit colleges and Universities have cheated them along with the government in getting the students to borrow money with government backed loans for essentially a worthless education.
3rd Circuit and 7th Circuit Federal Courts of Appeal Differ on the Standards For Class Certifification
Ever since the Supreme Court’s rulings in Walmart and Comcast, denying class certification in those cases, courts have had to increasingly deny plaintiffs class certification. Recently, a rift has appeared between federal courts with different interpretations of what should be acceptable for a class action to proceed. Traditionally, all that plaintiffs have needed to secure class certification is a class with well-defined limits, proof that the members of the proposed class have a common complaint against the defendant, evidence that the named plaintiffs are sufficient representatives of the entire class, and proof that the plaintiffs’ counsel can adequately represent the class in a court of law. Only after the class has achieved certification do the plaintiffs worry about trying to include all potential class members.
On one side of the argument is the 7th Circuit Court of Appeals, which has consistently made rulings on the belief that class actions are an efficient mode of determining the liability of a defendant, particularly when individual claims are small. This court has ruled in favor of class actions in such cases as the one against Sears and Whirlpool for moldy washing machines, as well as a case addressing lack of properly displaying warnings for ATM fees. Both of these cases have been discussed on this blog.
On the other side of the debate is the 3rd Circuit Court of Appeals which has recently ruled that class actions may not be certified until individual class members can be ascertained. This decision comes in the case of Carrera v. Bayer in which consumers allege that they were deceived by Bayer’s claim that green tea extract in its One-A-Day WeightSmart supplements would boost consumers’ metabolism. The district judge, Jose Linares of Newark, New Jersey, denied class certification on a nationwide basis, but granted the plaintiff’s subsequent motion for certification of a class of Florida purchasers under that state’s trade practices suit.
On appeal at the 3rd Circuit Court, Bayer’s attorneys argued that the class should not have been certified because it is impossible to discern everyone who bought the product. Consumers purchasing a widely-distributed over-the-counter product are unlikely to have kept packages or receipts or any kind of record that they purchased the product. Bayer’s representatives therefore argued that membership of the class cannot be ascertained and, on these grounds, the class should not be certified.
The legal counsel for the plaintiffs argued that there are three methods by which they can determine class membership: pharmacy membership programs that track members’ purchases; and screening of affidavits from consumers who claim to have bought One-A-Day WeightSmart to eliminate fraudulent or duplicate claims. They also pointed out that Florida’s consumer law does not require proof of individual reliance. Therefore Bayer’s potential $14 million exposure should not be affected by how big the class is or how the class is defined.
In its decision, the three-judge panel of the 3rd Circuit Court ruled that, unless the plaintiffs could determine a real plan for determining buyers, certifying the class and allowing the case to proceed would be to violate Bayer’s rights of due process. This, according to the 3rd Circuit Court, gives the defendant the right “to raise individual challenges and defenses to claims”. They therefore remanded the case until the plaintiffs could provide sufficient evidence that the class is “ascertainable” despite the fact that the plaintiffs had already laid out a very clear plan for identifying and finding class members.
In the brief filed for the plaintiffs’ motion to reconsider, the controversial status of the 3rd Circuit Court’s decision is laid out. The brief points out that Rule 23 (for determining class certification) “does not require a roll call (nor, for that matter, does due process). The brief also states that, “In the half-century since the creation of the modern class action, the panel’s decision is the first by any federal circuit court to hold that class certification may be defeated on the basis of ‘ascertainability’ even when the existence of a well-defined class is not in doubt and the full extent of potential liability is known. … If allowed to stand, the panel’s decision will effectively wipe out most class actions involving small-dollar consumer products – cases for which class treatment has always been recognized as most essential.”
You can view the very well done motion for en banc rehearing before the 3rd Circuit here.
6th Circuit Finds Trip Adviser List of Dirtiest Hotels to Be Protected From Libel Suits as a Statement of Opinion
With various sites on the internet giving ratings to businesses in all sorts of professions, the line between what is protected by the Constitution’s First Amendment and what is not can often get blurry, particularly when the reviews are unfavorable. The trial courts have seen defamation lawsuits pertaining to this again and again.
Recently, the Sixth Circuit Court in Cincinnati rejected a $10 million defamation lawsuit which had been filed by Kenneth Seaton, owner of the Grand Resort, a hotel in Pigeon Forge, Tennessee. The resort was ranked No. 1 on TripAdvisor’s 2011 list of “dirtiest hotels”. Next to the hotel’s top position was a picture of a ripped bedsheet and a quote from a user, claiming that “There was dirt at least 1/2″ inch thick in the bathtub which was filled with dark hair.” The website also included a thumbsdown sign next to the quote as well as a claim that “87% of reviewers do not recommend this hotel.”
According to the Court’s decision, “Seaton filed suit in Tennessee state court, alleging claims for defamation and false-light invasion of privacy.” After TripAdvisor filed a motion to dismiss the case, Seaton amended his complaint to include “trade libel/injurious falsehood” and interference with prospective business relationships. TripAdvisor responded by saying that the list was a statement of opinion and, as such, could not be proven true or false because the rankings on the list as well as the concept of “dirtiest” hotel are inherently subjective. A federal district court in Tennessee dismissed the case and Seaton appealed, landing the case in the lap of the Sixth U.S. Court of Appeals in Cincinnati.
At this point, Digital Media Law Project, in connection with Cyberlaw Clinic, filed an amicus brief in the case in support of TripAdvisor “because of the potential impact of Seaton’s argument on journalistic and academic research.” This is because Seaton’s claims could be construed as “challenging the methodology by which TripAdvisor reached its conclusions based on data collected from its users.” However, TripAdvisor’s systematic method of analyzing crowd sourced data to reach conclusions “echoes important techniques for academic research and data journalism” according to Jeff Hermes of Digital Media Law Project.
According to the Court’s decision, “On the webpage in which the list appears, TripAdvisor states clearly ‘Dirtiest Hotels – United States as reported by travelers on TripAdvisor.’ The implication from this statement is equally clear: TripAdvisor’s rankings are based on the subjective views of its users, not on objectively verifiable facts. With this, readers would discern that TripAdvisor did not conduct a scientific study to determine which ten hotels were objectively the dirtiest in America. Readers would, instead, understand the list to be communicating subjective opinions of travelers who use TripAdvisor.”
However, instead of analyzing the list as an opinion based on disclosed data, the court stated instead that the list was “rhetorical hyperbole.” The court further compared TripAdvisor’s list to other online polls and lists such as “Reader’s Digest’s poll of “100 Most Trusted People in America”. Such a comparison implies that TripAdvisor’s list is not only subjective, but frivolous. Hermes fears that, in doing so, the Court “seems to have confused (1) statements not intended to be taken literally and (2) statements intended to be taken literally that nevertheless reflect a subjective judgment. Both fall within the doctrine of opinion as statements that cannot be proven true or false.”
The Grand Resort closed in 2012 and was bought by a holding company.
You can view the Sixth Circuit’s opinion here.
EA Sports Settles With Ex-Players
ESPN reports:
While current NCAA players fight for their right to make money, a large group of former college football players scored a major victory Thursday.
Shortly after Electronic Arts announced it would stop producing a college football game beginning next year, the video game company — together with Collegiate Licensing Company, which holds the licensing rights to the trademarks of the majority of colleges and universities — filed papers to the U.S. District Court in Northern California that it had settled its case brought by former players.
Statements About Business Owner Did Not Constitute Slander or Libel, According to Illinois Appellate Court – Coghlin v. Beck
A business owner who had served as president of a trade association filed a lawsuit alleging slander per se and libel per se for statements made to members of that association and others. She named a former client and her successor as association president, among others, as defendants. After the court granted the defendants’ motion to dismiss, an Illinois appellate court affirmed the dismissal. Coghlan, et al v. Beck, et al, 984 N.E.2d 132 (Ill. App. 2013).
The plaintiff, Angelika Coghlan, was the managing partner of an information technology (IT) company, Catwalk Consulting, Inc. She served as the president of the Chicago chapter of the National Association of Women Business Owners (NAWBO-Chicago) from July 2008 until June 2010. In January 2010, Rebecca Busch, CEO of Medical Business Associates, Inc. (MBA), submitted a request for IT services to NAWBO-Chicago’s member listserv. Coghlan claimed that she contacted Busch directly about the request, then posted the request to the listserv, where all members could see it. Coghlan and Bush entered into an agreement for services, and Catwalk provided IT services to MBA for over a year, billing it more than $150,000. MBA notified Catwalk that it was terminating their contract in March 2011.
Valerie Beck succeeded Coghlan as NAWBO-Chicago president in July 2010, and Coghlan stayed on as a member of the board of directors. Beck prepared a written statement for the board’s April 2011 meeting making various claims against Coghlan. The statement called Coghlan a “corrupt Director,” accusing her of intercepting MBA’s listserv posting “for her own benefit,” and alleging other wrongdoing. Id. at 139. That month, Busch sent a letter to IBM’s Global Financing Division, which had financed the Catwalk contract, alleging that Catwalk never delivered. Id. at 140.
Mars Petcare Faces Class Action Lawsuit Filed by Its Factory Workers
Mars Petcare defends itself after some former workers in Southeast Kansas file a class action lawsuit. Mars Petcare makes Pedigree and other pet foods sold at many major retailers.
A former employee at one of Mars Petcare’s manufacturing facilities in Galena, Kansas doesn’t want his identity released.
“Retaliation from the company,” says the former worker. “It’s huge. It’s going to be the biggest thing to hit this area. It’s going to be a corporate killer.”
Court documents filed in Jasper County, Missouri claim the pet food company should have known about the danger condition of phosphine gas levels, but failed to warn of that condition or remove it.
“It causes respiratory and intestinal damage,” says the former worker. “We don’t know how much. We know there was stuff coming in that was fumigated and was not listed as being fumigated that went straight into making pet food.”
Judge Orders Yelp Review Down — We Defend Consumers Sued For Negative Reviews of a Business
Our business attorneys and consumer lawyers have successfully protected businesses from false reviews online and represented consumers wrongly sued to stop them from posting negative reviews about businesses that commit fraud or mistreat their customers.
4th Circuit Federal Appeals Court Rules Clicking Like Button on Facebook can be Protected Speech Under the First Amendment
Many of us have heard stories of people losing their jobs over things said or posted on Facebook. The way we communicate has changed dramatically with the invention and increased use of the internet and employers, employees, and the law are still struggling to catch up.
This blog has already discussed a case in which a sheriff fired six of his employees, allegedly for clicking the “Like” button on the Facebook page of his political opponent. One of those workers, Daniel Ray Carter, filed a lawsuit against B. J. Roberts, the sheriff who fired him. The lawsuit alleged that Carter’s First Amendment rights had been violated and it was filed on behalf of Carter and the five other employees who were fired, allegedly for the same reason. The lawsuit sought compensation for lost back pay and front pay or for a reinstatement in their former positions.
Roberts, after his successful 2009 campaign for sheriff’s office, failed to reinstate six of his employees, all of whom had expressed support for his opponent. Roberts claimed he let some of the workers go because he wanted to replace them with sworn deputies. Others, he said, he fired because of poor performance and because he believed that their actions “hindered the harmony and efficiency of the office.” Despite these allegations, the employees he claims to have fired for poor performance both had consistent evaluations of “above average” or “outstanding” and neither of their direct supervisors or second-level supervisors had ever indicated a performance problem.
U. S. District Judge Raymond Jackson in Norfolk ruled in April 2012 that the “Like” button on Facebook is not equivalent to a statement, and is therefore not protected by the First Amendment. He dismissed the case and the plaintiffs appealed.
In his ruling, Jackson admitted that there have been other courts which have ruled that Facebook posts are constitutionally protected speech. However, he argues that, in those cases the speech in question involved “actual statements” rather than simply clicking a button.
Jackson’s ruling was criticized by constitutional lawyers who argued that other speech conducted online, such as uploading a video, or donating money to a campaign, is protected under the First Amendment, despite the fact that they involve nothing more than the click of a button.
The three-judge 4th Circuit federal appeals court disagreed with Jackson’s decision, ruling instead that Carter’s use of the “Like” button was both “pure speech” and symbolic expression. U.S. Circuit Judge William Traxler compared clicking the button to posting a political campaign sign in a front yard, which is protected under the First Amendment. “On the most basic level,” said Traxler, “clicking on the ‘like’ button both literally causes to be published the statement that the User ‘likes’ something with is itself a substantial statement. That a user may use a single mouse click to produce that message that he likes the page instead of typing the same message with several individual key strokes is of no constitutional significance.”
The appeals court unanimously ruled that clicking Facebook’s “Like” button was protected speech. It therefore partially reversed the lower court’s ruling and reinstated the claims of Carter and two of the other employees who sued. It determined, however, that the three other employees had not provided sufficient evidence that their support of Roberts’s opponent was the reason they were not reinstated.
The court also ruled that Roberts is immune from any monetary judgment. As an “arm of the State” he is “immune from suit for claims against him in that capacity”. He is not immune, however, from the plaintiffs’ claims for reinstatement.
You can view the entire appellate decision here.