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After a spectator at a Chicago Cubs game, who was hit in the face by a baseball, sued, the team and MLB moved to compel arbitration. The Illinois trial court rejected the motion, finding that the arbitration provision was procedurally unconscionable and therefore unenforceable. The Illinois appellate court agreed, pointing to the fact that the fine print on the back of the ticket failed to include all of the arbitration terms and conditions, and that expecting a ticketholder to access a separate website to view the full terms and conditions while navigating the commotion of a baseball game was so onerous that it could not be said that the plaintiff had fairly agreed to the conditions.

Laiah Zuniga was hit in the face by a foul ball while attending a Chicago Cubs baseball game at Wrigley Field. Zuniga obtained entry to the ballpark by presenting a paper ticket created by the Cubs’ ticket office. Zuniga had been given the ticket earlier that day by her father, who won it in a raffle at his workplace. The front of the ticket contained artwork depicting one of the Cubs players; information about the opponent, the date and time of the game, the seat location, the ticket price, a barcode, and small print that stated that the ticket was subject to terms/conditions on the reverse side.

On the back of the ticket was an advertisement as well as six paragraphs of fine print. The fine print made reference to terms and conditions available either on the Cubs’ website or available at the Cubs administrative office. The ticket did not specify where the administrative office could be found. The fine print contained a warning that baseballs could be hit into the stands and that spectators should stay alert and disclaimed liability for any injuries resulting from such occurrences. The final paragraph specified that any disputes would be resolved by binding arbitration. Continue reading ›

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While the government was quick to hand out Business Interruption Grants to businesses across the country struggling from the effects of the pandemic-induced shutdown, company’s applying for the grant did have to meet certain criteria. The companies needed to be able to prove they had been financially impacted by COVID-19, and that they would use the money from the grants for necessary business expenses, such as payroll. What was less widely discussed was the fact that recipients of grants also needed to abide by all city, state, and federal labor laws applicable to their business, something Tank Noodle allegedly failed to do.

The Vietnamese restaurant was asked to return the grant money it received after federal investigators found they were in violation of several labor laws, including allegedly withholding wages from their employees. Tank Noodle also received two loans from the Payment Protection Program totaling almost $400,000, although it is not yet clear whether they will be made to pay back that money in addition to the grant money they received.

Poor working conditions for very little pay is a systemic and long-standing problem throughout the restaurant industry, and it’s not limited to fast-food restaurants. High-end restaurants are equally likely to ignore labor laws, and white employees are just as often subject to very low pay as their minority coworkers (although white servers do tend to receive larger tips).

In the summer of 2020, amidst the nationwide social unrest and calls for racial justice, several Chicago restaurants were accused of abusing their staff, including allegations of racism. Some of those restaurants were forced to permanently shut down as a result of the accusations, but Tank Noodle managed to keep its kitchen open.

Tank Noodle, a Vietnamese restaurant located in the Uptown neighborhood of Chicago, hired a Vietnamese server in 2018, explaining the server could start right away, but that the only pay they would receive would be in tips. The server took the job because they needed the money, not realizing how low the pay would be or the lack of transparency at the restaurant when it came to tips. Continue reading ›

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A former teacher at a high school who was fired later sued the school, alleging he was fired because he was an atheist. After the teacher was dismissed, the school published a press release on its website stating that the teacher had been terminated. The teacher and the school entered into a settlement agreement that included a nondisparagement clause. The teacher later sued the school a second time, arguing that it violated the nondisparagement clause by keeping the press release active on its website. The district court granted summary judgment for the school, and the teacher appealed. The appellate panel affirmed the decision of the district court, finding that the settlement agreement clause was only forward-looking and that the teacher could have negotiated for the removal of the existing press release but failed to do so. The panel rejected the teacher’s argument that each time a person accessed the press release online a new breach occurred.

In August 2013, Middlebury Community Schools hired Kevin Pack to teach high school German. Pack’s employment was terminated less than a year later, in April 2014. Soon after the termination, the school published a press release about Pack on its website criticizing Pack. The press release remains publicly available on the school’s website. In January 2015, Pack sued the school, claiming that it fired him because he was an atheist. Continue reading ›

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A startup employee advised his employer that it could withhold his and others’ wages until it secured future funding. The employee was a lawyer and drew up contracts to reflect this agreement. The employee later left the company on bad terms and demanded arbitration to recover his back wages. An arbitrator ruled for the employee, determining that the company had violated the Illinois Wage Payment and Collection Act because it had withheld wages beyond the statutorily allowed time period. The company later sued the employee, arguing that it was the employee’s own advice that led to the company’s liability. The district court granted the employee’s motion to dismiss, and the company appealed. The appellate panel affirmed the decision of the district court, finding that the company’s CEO had failed to show that the employee owed her a duty, and that the company had failed to show that the employee’s advice was the proximate cause of its actions.

UFT is a commercial finance company founded by Joanne Marlowe in 2008. Richard Fisher worked as a consultant with UFT from February 2013 to September 2013 and then became employed by UFT as its chief legal officer in October 2013. While he was employed at UFT, Fisher was the sole source of legal counsel to UFT and Marlowe regarding the company’s operations. Fisher also drafted the employment agreements between UFT and its employees, including both Marlowe’s and his own. The employment agreements included mandatory arbitration clauses.

During this time period, UFT’s revenues were inconsistent. The company therefore failed to pay Marlowe, Fisher, and all other employees their agreed salaries when they were due. Fisher and other employees continued to work at the company because they believed in its potential. At various times, Fisher recommended and drafted “supplemental agreements” allowing for the accrual of wages owed to various employees who could not be paid on schedule due to UFT’s revenue shortfalls. Continue reading ›

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While most securities fraud lawsuits accuse the defendant of manipulating their stock prices to keep them artificially high, the current lawsuit against Goldman Sachs alleges the company lied to maintain its high stock prices, rather than lying to cause the prices to rise. It’s a unique allegation, and one the U.S. Supreme Court has not yet recognized, but two lower courts have already upheld it as a valid claim.

Goldman appealed the decision made by the district court and the Second U.S. Circuit Court of Appeals to the Supreme Court. The company alleges that, if the Supreme Court were to allow the securities lawsuit against it to proceed, the result would be devastating for public companies all over the country.

Goldman is arguing that the allegations against it are too weak to be valid. The allegations made by the shareholders rely on Goldman’s advertising claims that included words like “honesty” and “integrity” and claimed the company always prioritized the interests of its clients, when the opposite turned out to be true.

According to Goldman, the statements cited by the lawsuit are too vague to make the basis of a securities-fraud case. The company has also denied the statements had any effect on its stock price. If the lawsuit is allowed to proceed through the courts, the bank alleges it will allow shareholders to file securities-fraud lawsuits in the future simply by pointing to any kind of aspirational statement that nearly all companies make in their marketing materials. Continue reading ›

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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 ›

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Major League Baseball’s efforts to end a lawsuit filed by a woman struck by a foul ball at Wrigley Field hit a snag when an Illinois appellate court ruled recently that the injured fan can move ahead with her lawsuit. In its ruling affirming the decision of the trial court, the First District appellate court held that the plaintiff was not required to arbitrate her case with the MLB per the terms of the arbitration agreement printed on the back of her ticket.

The case stems from events that took place during the Chicago Cubs’ August 27, 2018 home game, where the plaintiff, Laiah Zuniga, was hit in the face by a foul ball while at the game played at Wrigley Field, the Chicago Cubs home ballpark. Zuniga received her ticket on the day of the incident from her father who won it in a raffle at his workplace. The paper ticket would be familiar to anyone who has attended sporting or entertainment events. The front of the ticket included artwork depicting one of the Cubs players; information about the opponent, the date and time of the game, the seat location, and ticket price; a barcode; and small print that stated, “Event date/time subject to change. No refund. No exchange. Subject to terms/conditions set forth on the reverse side.”

A large portion of the back of the ticket was taken up by an advertisement. Next to the advertisement were six paragraphs of fine print. The first paragraph provided that by using the ticket, the individual “agrees to the terms and conditions available at www.cubs.com/ticketback (the ‘Agreement’), also available at the Chicago Cubs administrative office. Key terms of the Agreement are summarized below (the Agreement controls in the event of any conflict).” The third paragraph included a sentence in all capital letters stating that baseballs might be hit into the stands, that spectators should stay alert, and that the Cubs and other entities would not be liable for resulting injuries.

Important to the plaintiff’s lawsuit, the fifth paragraph of text stated, in regular type, “Any dispute/controversy/claim arising out of/relating to this license/these terms shall be resolved by binding arbitration, solely on an individual basis, in Chicago, Illinois.” Zuniga attested in an affidavit that she never read the fine print or visited the URL printed on the back of the ticket where the terms and conditions supposedly accompanying her ticket could be viewed. Had she done so, she would have found a much longer and more detailed arbitration agreement, which the Court reproduced verbatim and which spanned more than 3.5 pages of the Court’s opinion. Continue reading ›

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Almost as soon as reality TV gained prominence in our popular culture, it ceased to be reality. Producers and showrunners end up with hours and hours of footage that has to be edited down to fit the time frame of the TV show, but it didn’t take long for them to realize they could also edit the footage to tell a story … even a story that wasn’t there.

Donovan Eckhardt, one of the co-hosts of the hit HGTV show “Windy City Rehab”, alleges the network and the producers sought to create a story for their viewers by making him appear to be the villain in the story of the breakup of his professional relationship with his co-host, Alison Victoria, but Eckhardt alleges they went further than just editing raw footage.

According to the lawsuit, the show filmed scenes when Eckhardt was not present that made it look like Eckhardt was embezzling funds from their rehab projects. The camera would show Victoria looking as though she was trying to figure out where the money had gone, but Eckhardt insists every bill was cleared by Victoria and that she knew their company’s financial situation throughout every step of the process.

The allegations that Victoria was acting when she appeared to be puzzling over financial statements that didn’t add up make one wonder what else she did on the show that was acting for the benefit of the camera and not based in any reality. In one scene in the second season of the show, she teared up while discussing her rocky business relationship with Eckhardt, whose lawsuit alleges the tears were fake. Continue reading ›

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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 ›

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As our world becomes increasingly digital, we’ve been able to buy more and more things online, and that trend has only increased since everyone has been stuck at home due to COVID-19. One of the last things to make the switch to buying online was cars. Rather than going to a car dealership and test driving a car that who knows how many people have already been in, many people feel safer just ordering a car from a website and having it delivered to their door, but is that legal?

While it is legal for auto dealers to sell cars online (and some dealers have gone that route) electronic vehicle manufacturers have allegedly created a problem by trying to use the internet to sell their cars directly to consumers, rather than going through a licensed auto dealer as required by Illinois law. This direct-to-consumer tactic is the basis of a lawsuit recently filed in Cook County Circuit Court by the Illinois Automobile Dealers Association, as well as other trade associations, and various auto dealers.

The lawsuit was filed against Rivian, a startup that makes electronic trucks and is converting a Mitsubishi plant in Normal, IL into a factory for its own electronic trucks and SUVs. The company plans on opening a showroom in Chicago’s Fulton Market district later in 2021, but in the meantime, it has already begun taking advance orders of its electronic vehicles online. Continue reading ›

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