Chicago Business Litigation Lawyer Blog

Sam’s Club is a members-only retail warehouse that features a section for clearance items, called “as-is” items. Items may be designated “as-is” for various reasons and may be damaged or undamaged. Every as-is item is marked with an orange sticker; when a cashier scans the item, the original price appears and the cashier must perform a manual override. The software records the fact that a price override was performed, but does not include the reason. Overrides can occur for reasons other than “as-is” designation. Sam’s contracted with NEW to sell extended warranties for items sold in the store. NEW will not cover some “as is” products, including some purchased by Hayes. On each occasion, Sam’s employees offered and Hayes purchased a NEW warranty. The store provided Hayes with a manual and remote missing from a television he purchased and offered to refund the warranty price. Hayes declined. Hayes sued, on behalf of himself and all other persons who purchased a warranty for an as-is product from Clubs in New Jersey since 2004, asserting violation of the state Consumer Fraud Act, breach of contract, and unjust enrichment.

The trial court certified a Rule 23(b)(3) class. The Third Circuit vacated and remanded for consideration of Rule 23’s class definition, ascertainability, and numerosity requirements in light of its recent decision of Marcus v. BMW of North America, LLC, 687 F.3d 583 (3d Cir. 2012). The Third Circuit reasoned:

Because the able trial court here did not have the benefit of Marcus’s guidance, it did not consider whether it would be administratively feasible to ascertain class members. In discussing numerosity, however, the court noted that Sam’s Club had no method for determining how many of the 3,500 price-override transactions that took place during the class period were for as-is items. The court did not see this as a barrier to class certification, reasoning that plaintiff should not be hindered from bringing a class action because defendant lacked certain records. But the nature or thoroughness of a defendant’s record keeping does not alter the plaintiff’s burden to fulfill Rule 23’s requirements. Nor has plaintiff cited any statutory or regulatory authority obligating Wal-Mart to create and maintain a particular set of records. … Given the trial court’s finding that Wal-Mart lacks records that are necessary to ascertain the class, to be successful on remand, plaintiff must offer some reliable and administratively feasible alternative that would permit the court to determine: (1) whether a Sam’s Club member purchased a Service Plan for an as-is item, (2) whether the as-is item was a “last one” item or otherwise came with a full manufacturer’s warranty, and (3) whether the member nonetheless received service on the as-is item or a refund of the cost of the Service Plan. … To summarize, plaintiff must show by a preponderance of the evidence that there is a reliable and administratively feasible method for ascertaining the class.

You can view the full Third Circuit opinion here
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Johnson, an African-American woman, was employed at Koppers’ plant from 1995 until her termination in 2008. She had been disciplined for sleeping at her desk in the laboratory, for smoking in the lunch room, for not punching out on the time clock, for fighting with a security guard, and for an altercation with a white male co-worker, O’Connell. Without interviewing Johnson, the plant manager determined that both O’Connell and Johnson were at fault and decided that Johnson should be punished more severely because of her disciplinary history and O’Connell’s allegations of racial harassment. The plant manager warned Johnson that future incidents would lead to termination. O’Connell received a less severe warning letter. The Union filed a grievance on Johnson’s behalf and Johnson’s warning was reduced to a memo that summarized her work obligations and employment status. Johnson was fired after another altercation with O’Connell. A witness indicated that Johnson shoved O’Connell, who filed a police report.

Johnson filed suit, alleging discrimination on the basis of her race and gender in violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C. 2000e, and 42 U.S.C. 1983. Johnson argued that her claim should succeed under the cat’s paw theory because her co-worker, O’Connell, harbored discriminatory animus against her race and gender. As O’Connell had no power to terminate Johnson himself, Johnson argued that O’Connell falsely reported that she called
him racial and gender-based slurs on one occasion and pushed him following a separate verbal altercation, in order to induce the plant manager to terminate Johnson’s employment at
Koppers.

The trial court granted summary judgment in favor of the the employer, Koppers and reject Johnson’s claims holding a false report by O’Connell, standing alone, is insufficient to establish discriminatory animus. While it is clear from the record that O’Connell and Johnson did not like each other, Johnson has provided no evidence to indicate that O’Connell’s animosity was motivated by discriminatory bias against her race or gender.

The Seventh Circuit affirmed summary judgment in favor of Koppers. In affirming the trial court, the Seventh Circuit held:

In order to succeed under the cat’s paw theory, Johnson needs to show that O’Connell, motivated by discriminatory animus, concocted a false story about Johnson, and that
O’Connell’s story was the proximate cause of Johnson’s termination. See Jajeh v. Cook County, 678 F.3d 560, 572 (7th Cir. 2012). That simply is not the case here. The proximate cause of
Johnson’s termination was actually the April 2008 physical altercation between Johnson and O’Connell that was witnessed by an independent third party. … Johnson’s claim fails because she cannot prove that she met Koppers’ legitimate job expectations, or that Koppers’ non-discriminatory reason for termination was pretextual. While Johnson correctly points out that there is no evidence to suggest that she had not been adequately performing her duties as a lab technician, her termination stemmed from a specific incident of insubordination, not a failure to perform her daily tasks. Johnson’s insubordination—pushing a co-coworker—clearly does not meet Koppers’ legitimate job expectations, even if she was an otherwise satisfactory lab technician.

You can view the Seventh Circuit opinion here
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Cicero Town President Larry Dominick claims he knows how to avoid sex harassment: “You’re not supposed to touch ‘em, talk dirty, all kinds of stuff like that.”
However, Cicero has agreed to pay very large settlement of $675,000 to settle a sexual harassment case against Dominick. This is not the first such settlement.

Dominick allegedly requested that a former cop and another woman engage in a threesome. Dominick denies he ever harassed the former cop.

In his deposition in the case, Dominick says learned how to avoid harassing women employees: “You’re not supposed to touch ‘em, talk dirty, all kinds of stuff like that, you know, general things that most people should understand.”
In her lawsuit, the former cop, Lujano says Dominick “on a constant basis” made sexually explicit comments, including calling Lujano’s breasts “gazangas.” She claims Dominick reached out and touched her breasts.

She also claims Dominick whispered in her ear that “he wanted to have a threesome with her and another woman.” She alleges he offered to take her to the sexy getaway “Sybaris and, if not her, then her mother … because he liked her mother too.”
This is not the only time Cicero has had to pay up for alleged sex harassment by Dominick.

In 2011, Cicero paid the former head of the town animal shelter $500,000.

In that case, Sharon Starzyk claimed that Dominick groped her. She claimed on one occasion, when she and Dominick were in a car together, he allegedly passed gas and then groped her. Starzyk also alleged that Dominick sent her emails requesting a threesome with two of Dominick’s friends.

You can view part of Dominick’s deposition below.

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Odometer rolled back on car for sale

AOL reports:

Buying a used car is already risky business, and this story of fraud in New York will have you double checking your paperwork.

Matin Jarmuz used Craigslist.com to sell his 1992 Toyota Camry. According to Jarmuz’s Craigslist post, at 21-years-old and 200,000 miles the Camry still had a smooth, quite ride. He sold the car quickly to Chris Sciolino for $900 cash. Jarmuz thought he had made a good deal, until other Craigslist users alerted him that his old Camry was up for sale again by the same man he just sold it to, only this time listed at $1,800 and with 79,000 miles.

Odometer fraud is a serious problem in the U.S. In a 2002 study the National Highway Traffic Safety Administration determined that close to half a million cars are sold each year with false odometer readings, at a cost of more than of $1 billion dollars annually. Since the study was done, the Office of Odometer Fraud Investigations has seen an escalation in cases. Fixing an odometer is a federal crime, one made much easier on newer cars where, instead of cracking open a dashboard, sellers just need to hack the onboard computer.

Our Chicago auto fraud lawyers have spoken with many consumers who have been cheated through an odometer roll-back. A car with a odometer roll-back is generally considered unmerchantable as the real mileage can not be verified.

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Plaintiffs claim that Lockheed breached its fiduciary duty to its retirement savings plan, under the Employee Retirement Income Security Act, 29 U.S.C. 1132(a)(2). The Plan is a defined-contribution plan, (401(k)); employees direct part of their earnings to a tax-deferred savings account. Participants may allocate funds as they choose. Among the investment options Lockheed offered was a “stable-value fund” (SVF). SVFs typically invest in a mix of short- and intermediate-term securities, such as Treasury securities, corporate bonds, and mortgage-backed securities. Holding longer-term instruments, SVFs generally outperform money market funds. For stability, SVFs are provided through “wrap” contracts with banks or insurance companies that guarantee the fund’s principal and shield it from interest-rate volatility. Plaintiffs allege that the Lockheed SVF was heavily invested in short-term money market investments, with a low rate of return that did “not beat inflation by a sufficient margin to provide a meaningful retirement asset.”
The district court granted Lockheed summary judgment with respect to some claims. The SVF claim survived.

The district court initially certified two classes under FRCP 23(b)(1)(A). On remand, the court declined to certify further narrowed classes. The Seventh Circuit reversed, reasoning that the plaintiffs carefully limited the class to plan participants who invested in the SVF during the class period and employed reasonable means to exclude from the class persons who did not experience injury. The Court held:

To conform to Spano’s warning that the class must not be “defined so broadly that some members will actually be harmed” by the relief sought, Plaintiffs limited their definition of the SVF class to those who suffered damages as a result of Lockheed’s purportedly prudent management of the fund. … [T]his court has never held, and Spano did not
imply, that the mere possibility that a trivial level of intra-class conflict may materialize as the litigation progresses forecloses class certification entirely. … We conclude both that
Spano poses no bar to the proposed SVF class and that the district court’s reservations about the class were unfounded.

You can view the full 7th Circuit opinion here

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Ever since the invention of the internet, it has been wreaking havoc on our Constitution’s First Amendment. People say hurtful and insulting things, particularly about people in the media, without ever considering the consequences of their words. This is especially true when people are able to make these statements anonymously. Frequently, there are no consequences but countless defamation lawsuits have been filed over things that have been said online and the decisions reached by the court are usually hotly debated. Another such case has recently emerged from a federal court in Covington, Kentucky.

The case involves Sarah Jones, a former Cincinnati Bengals cheerleader, and Nik Richie, the operator of thedirty.com, a gossip website. The jury found that posts about Jones on the website were substantially false. Additionally, the jury found that Nik Richie acted with malice or reckless disregard when he posted anonymous submissions to his website.

One such post claimed that Jones had sex with every Bengal player. Another said that she probably had two sexually transmitted diseases. In her lawsuit, Jones said that these comments were false and caused her severe mental anguish.

In his defense, Richie denied any malice in posting the comments and maintained that he was not required to fact-check anonymous submissions before posting them. David Gingras, Richie’s defense attorney, argued that Richie’s website and others like it are protected by the Communications Decency Act. That law was created in part to provide protection to website operators like Richie from liability for content which is originated by third parties.

Eric Deters, the attorney representing Jones, argued that Richie acknowledged that he screens submissions and decides which comments to post and he adds his own comments. This fact separates his website from others such as Facebook where people post their own comments without any sort of regulation.

The judge maintained that the Communications Decency Act does not protect thedirty.com in this case. The jury sided with Jones and awarded her $338,000 in damages.

As with many cases, the decision of this court could have far-reaching consequences. “I think it could put some limits on the ability of a website operator to feel free to post comments that might be offensive or controversial or even just critical,” said Jack Greiner, who specializes in media and free speech issues. “People might err on the side of caution and not take a risk, even if comments are acceptable.”

The decision reached by the judge has been highly contested. Gingras, who has won similar lawsuits, has said that, “There’s no question that his ruling is wrong”.
Nate Cardozo is a staff attorney with the Electronic Frontier Foundation, a nonprofit foundation which focuses on civil liberties and privacy issues in the digital age. He agrees with Gingras and said that the judge “got it dead wrong”. According to Cardozo, Jones could sue over the false statements, but “she can only sue the person who made the statements”. That becomes difficult however, when comments are posted anonymously, as is the case here.

Deters is happy with the verdict, saying he hopes that it will “reduce the number of defamation comments made on these types of websites.” Richie plans to appeal the ruling.

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