Class Action Litigation Update

New Weapon to Fend off Copycat Class Actions: The Seventh Circuit recently granted an injunction to Sears under the All Writs Act to block a copycat class action filed in federal court in California. The opinion, Thorogood v. Sears, Roebuck & Co., is notable for several reasons. First, it extends relief under the All Writs Act to a defendant faced with a similar class action in another jurisdiction. Second, Judge Posner used biting language in discussing the plaintiff bars’ tactic of filing such follow-on actions to leverage a quick settlement. Finally, it allows a defendant to seek an injunction stopping the new action at the outset rather than having to assert collateral estoppel as a defense and possibly having to face discovery in the interim.

The initial case, brought in Illinois federal court, involved consumer fraud allegations that certain Kenmore dryers were falsely represented as having drums that were “100% stainless steel.” The plaintiff persuaded the trial court to certify a consumer-fraud class, but the Seventh Circuit reversed it on a Rule 23(f) appeal, finding there were no common issues justifying certification. It later affirmed the denial of attorneys’ fees after Sears made an offer of judgment to the named plaintiff.

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Published In: Civil Procedure Updates, Civil Remedies Updates, Securities Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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