In Re Sears, Roebuck & Company Tools Marketing and Sales Practices Litigation

Filing 116

MEMORANDUM Opinion Signed by the Honorable John F. Grady on 7/11/2011.(mjc, )

05-4742.011-JCD

July 11, 2011

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
IN RE SEARS, ROEBUCK & CO.
TOOLS MARKETING AND SALES
PRACTICES LITIGATION

)
)
)
)

MDL-1703
No. 05 C 4742

MEMORANDUM OPINION
Before the court is the motion of defendant Sears, Roebuck &
Co. (“Sears”) for an order “permanently enjoining all members of
the uncertified putative classes in this case, their lawyers, and
anyone else acting in concert with any of them, from seeking to
certify a class to prosecute any claims based on, related to, or
involving the facts and circumstances and claims underlying this
Court’s denial of Plaintiffs’ Motion for Class Certification,
specifically including, but not limited to, any attempts to seek
class

certification

or

pursue

any

non-individual

claim

in

Greenfield v. Sears, Roebuck & Co. . . . and Santamarina, et al. v.
Sears, Roebuck & Co. . . . .” (Def.’s Mot. at 1.)
Sears’s motion is based on the recent Seventh Circuit decision
in Thorogood v. Sears, Roebuck & Co., 624 F.3d 842 (7th Cir. 2010),
which, coincidentally, also involves Sears.

In Thorogood, the

Court of Appeals held that Sears was entitled to an order enjoining
all members of the plaintiff Thorogood’s class and their lawyers
from filing class action suits that are “indistinguishable” from

- 2 -

Thorogood’s.

624 F.3d at 853.

The case has a lengthy history.

Thorogood’s class, which consisted of purchasers (in twenty-eight
states and the District of Columbia) of Kenmore dryers that had
been advertised as having stainless-steel drums, had originally
been certified by the district court here in Illinois.

The Court

of Appeals reversed and decertified the class. After the class was
decertified, Sears made Thorogood a Rule 68 offer of judgment of
$20,000 inclusive of attorney’s fees, with the parties agreeing
that

the

maximum

damages

Thorogood

applicable state’s law were $3,000.
and the

district

court dismissed

could

recover

under

the

Thorogood refused the offer,
the suit

because

the

offer

exceeded the amount in controversy and the case was thus moot.
Thorogood appealed, arguing that he had incurred attorneys’ fees of
$246,000.

The Court of Appeals affirmed the dismissal and denial

of fees, explaining that the effort to certify a large class had
been a “flop” and that Sears should not have to bear the entire
cost of the flop.

Thorogood v. Sears, Roebuck & Co., 595 F.3d 750,

753 (7th Cir. 2010).
Thorogood’s counsel found another plaintiff, Martin Murray,
and filed a similar class-action suit in California state court
seeking to certify a class of California purchasers.
removed to federal district court.
rejected

Sears’s

discovery to begin.

defense

of

The case was

The California district court

collateral

estoppel

and

ordered

One of Murray’s lawyers sent a letter to Sears

- 3 -

threatening, in so many words, substantial litigation expenses if
Sears was not amenable to settlement.

Sears moved the district

court in Illinois for an order enjoining Murray’s suit, and the
court denied the motion.

Sears appealed.

In reversing and remanding for entry of an order enjoining
further

class

action

suits

concerning

the

dryers

(including

Murray’s suit), the Court of Appeals found that the California
district court had erroneously rejected Sears’s collateral estoppel
defense, and it stated: “[B]ecause of the cost of responding to
discovery, and the erroneous but unappealable ruling permitting
discovery in Murray’s suit, Sears has no adequate remedy at law
against a litigation aimed at coercing a settlement by running up
Sears’s discovery expense.”

624 F.3d at 852.

The Court held that

Sears was entitled to an injunction pursuant to the All Writs Act,
28 U.S.C. § 1651, devoting considerable attention to the particular
terms

of

the

injunction.

Id.

(“[W]e

must

precisely who and what are to be enjoined.”).

be

careful

about

In pertinent part,

the Court explained:
The members of Thorogood’s class must be enjoined as well
as the lawyers so that additional Murrays don’t start
popping up, class action complaint in hand, all over the
country, represented by other members of the class action
bar.
It is true as we recall that an unnamed class
member can be bound by the judgment in a class action
suit only “if she was adequately represented by a party
who actively participated in the litigation.”
But
Thorogood did participate actively in seeking class
certification, and his representation by lawyer Krislov
was adequate . . . .

- 4 -

Id. at 853 (quoting Taylor v. Sturgell, 553 U.S. 880, 884 (2008)).
At the conclusion of the Thorogood opinion, the Seventh
Circuit addressed a “final wrinkle,” the pendency in the Supreme
Court of Smith v. Bayer Corp., a case that involves interpretation
of the Anti-Injunction Act, 28 U.S.C. § 2283. The Court noted that
one of the issues presented in Smith is “[w]hether a district court
that previously denied class certification nonetheless has personal
jurisdiction over the absent putative class members such that it
may enjoin them from seeking class certification in state court.”
624 F.3d at 853.
The Supreme Court recently issued its decision in Smith, 131
S. Ct. 2368 (June 16, 2011), answering no to this question and
reversing the judgment of the Court of Appeals for the Eighth
Circuit.

The Eighth Circuit had affirmed the district court’s

entry of an injunction against state-court proceedings brought
against Bayer by Keith Smith.

Smith had been an unnamed member of

a putative class action brought in federal court against Bayer by
a different plaintiff, George McCollins, whose class-certification
motion had been denied by the federal district court.
Bayer defended the lower courts’ decisions “by arguing that
Smith--an unnamed member of a proposed but uncertified class-qualifie[d] as a party to the McCollins litigation.” 131 S. Ct. at
2379.

Alternatively,

Bayer argued

that

the

judgment

in

the

McCollins litigation bound Smith under the recognized exception for

- 5 -

members of class actions to the rule against nonparty preclusion.
The Supreme Court rejected both contentions.

Smith did not count

as a party, and principles of nonparty preclusion did not help
Bayer, either; the Court held that although unnamed members of a
class action can be bound even though they are not parties to a
suit, there were no “members” of a class action in the McCollins
case because the district court had denied class certification.
Id. at 2380.

The Court acknowledged Bayer’s “strongest argument,”

a policy-based contention (echoing the Seventh Circuit’s concerns
in Thorogood) that “serial relitigation of class certification” can
force defendants to “buy litigation peace by settling.”
2381.

Id. at

But the argument was rejected; the Court concluded that the

“right approach” does not lie in binding nonparties to a judgment
and that abuse of the class-action device can be mitigated through
“principles of stare decisis and comity.”

Id.

On June 27, the Supreme Court issued a summary order in
Thorogood,

vacating

the

judgment

of

the

Seventh

Circuit

and

remanding the case for further consideration in light of Smith.
No. 10-1087 (U.S. June 27, 2011).
Now back to the instant case--actually, cases.

There are

seven “member cases” that are or were part of this multidistrict
litigation filed in or transferred to this court for pretrial
proceedings.1
1/

Four of them--Cyr (05 CV 2627), Chatham (05 CV

The “lead case number” is 05 CV 4742.

- 6 -

2852),

Hutson

(05

CV

voluntarily dismissed.

4745),

and

Tidwell

(05

CV

5881)--were

We remanded another--Santamarina (05 CV

4743)--to the California state court.
Most of the rulings we have issued have been in Anderson (05
CV

2623).2

In

December

2007,

we

issued

an

opinion

plaintiffs’ first motion for class certification.

denying

In re Sears,

Roebuck & Co. Tools Mktg. & Sales Practices Litig., Nos. 05 CV 4742
& 05 CV 2623, 2007 WL 4287511 (N.D. Ill. Dec. 4, 2007).
defined

the

putative

class

as

“[a]ll

persons

Plaintiffs

and

entities

throughout the United States” who purchased one or more Craftsman
tools that were not all or virtually all made in the United States.
They sought certification of a nationwide class for their unjust
enrichment claims and an undefined set of classes or subclasses
under

the

laws

of

seven

states--Alabama,

Ohio,

Pennsylvania,

Indiana, Connecticut, Texas, and Minnesota--for their consumer
fraud claims.3

We denied certification for a number of reasons,

including

overbreadth

the

of

the

proposed

typicality, and lack of predominance.
again

amended

their

complaint,

and

classes,

lack

of

Subsequently, plaintiffs
after

some

of

the

named

plaintiffs were dismissed, the remaining plaintiffs were Stephen

2/

Because Charles Chatham voluntarily dismissed his separate complaint
and became the first-named plaintiff in the Anderson case, and because Anderson
did not pursue his claims, we have also referred to Anderson, 05 C 2623, as
Chatham.
3/
We rejected an “eleventh-hour effort” by plaintiffs to expand their
consumer fraud subclasses to persons residing in twenty-eight states and the
District of Columbia. 2007 WL 4287511 at *4 n.3.

- 7 -

Jolley, a Pennsylvania citizen, and Curtis Oates, an Indiana
citizen.

Jolley moved for certification of a Pennsylvania class,

and Oates moved for certification of an Indiana class.
2009, we issued an opinion denying those motions.

In October

In re Sears,

Roebuck & Co. Tools Mktg. & Sales Practices Litig., Nos. 05 CV 4742
& 05 CV 2623, 2009 WL 3460218 (N.D. Ill. Oct. 20, 2009).
rejected

the

identical

to

proposed
the

classes

classes

because

plaintiffs

they

had

were

We

materially

previously

proposed,

plaintiffs made no attempt to distinguish our prior ruling, and
none of plaintiffs’ new arguments were persuasive.

Some months

later, Jolley and Oates reached a settlement with Sears, and by
agreement of the parties, we entered an order on August 16, 2010
dismissing those two plaintiffs’ claims with prejudice.
Plaintiffs’ counsel then shifted their efforts to Greenfield
(05 CV 4744), the seventh case pending in the MDL; it had been
dormant since its filing in 2005.

Greenfield, who seeks to

represent classes of Florida purchasers of Craftsman tools, filed
an amended complaint on August 18, 2010.
instant motion for injunctive relief.4

Sears then filed the
Sears contends that we

should exercise our power under the All Writs Act and the AntiInjunction Act to permanently enjoin members of the uncertified
putative classes in this proceeding from seeking to certify a class

4/

claim.

Sears also filed a motion for dismissal of Greenfield’s Magnuson-Moss

- 8 -

or classes to pursue claims based on or related to the claims
underlying our denial of class certification, including attempts to
seek class certification in Greenfield as well as Santamarina,
which is still pending in the California state court. Sears points
out that this court has already determined, not once but twice,
that class treatment is not an appropriate method for litigating
plaintiffs’ claims regarding the advertising of Craftsman tools as
“Made in USA,” and maintains that the intent of plaintiffs’ counsel
is “to continue relitigating class certification and burdening
Sears with additional hefty, mounting expenses and the threat of
inconsistent judgments.”

(Def.’s Mem. in Supp. of Mot. at 3.)

Among other arguments, Sears asserts that we should enjoin
“absent unnamed putative class members” because they were “fully
and adequately represented by Plaintiffs,” quoting the following
language from Thorogood:
[A]lthough normally one is not bound by a judgment in
personam in a litigation in which he is not designated as
a party or to which he has not been made a party by
service of process, in a class action, for example, a
person not named as a party may be bound by a judgment on
the merits of the action, if she was adequately
represented by a party who actively participated in the
litigation. Representative suits with preclusive effect
on nonparties thus include properly conducted class
actions.
624 F.3d at 848 (internal quotation marks, brackets, and citations
omitted).

Sears does not take a clear position on whether the

putative class members should be considered parties or nonparties
to Anderson; it covers its bases by suggesting that they have the

- 9 -

“status of parties.”
Greenfield

and

Santamarina,

residents

of

Florida

and

California, respectively, cannot be considered members of the
proposed classes for plaintiffs’ consumer fraud claims. Plaintiffs
never adequately proposed classes or subclasses that included
Florida or California purchasers, see supra n.2.

And although

Greenfield and Santamarina could be considered members of the
proposed

nationwide

class

for

unjust

enrichment

claims,5

the

Supreme Court’s ruling in Smith forecloses the relief that Sears
seeks.

In rejecting Bayer’s argument that the district court’s

decision denying class certification should be given preclusive
effect, the Court explained that Smith could not be bound either as
a party or a nonparty to McCollins’s suit:
The definition of the term “party” can on no account be
stretched so far as to cover a person like Smith, whom
the plaintiff in a lawsuit was denied leave to represent.
. . .
Because the District Court found that individual issues
predominated, it held that the action did not satisfy
Federal Rule 23’s requirements for class proceedings. In
these circumstances, we cannot say that a properly
conducted class action existed at any time in the
litigation. Federal Rule 23 determines what is and is
not a class action in federal court, where McCollins
brought his suit.
So in the absence of a certification
under that Rule, the precondition for binding Smith was
not met. Neither a proposed class action nor a rejected
class action may bind nonparties. What does have this
effect is a class action approved under Rule 23. But
McCollins’ lawsuit was never that.
. . .

5/
We note that
Santamarina does not.

only

Greenfield

brings

an

unjust

enrichment

claim;

- 10 -

[A] “properly conducted class action,” with binding
effect on nonparties, can come about in federal courts in
just one way--through the procedure set out in Rule 23.
131 S. Ct. at 2379, 2380, 2381.

We denied the named plaintiffs in

Anderson leave to represent any classes of purchasers of Craftsman
tools.

The putative class members cannot be considered “parties,”

and they cannot be bound as nonparties either because no “properly
conducted class action” existed at any time in these proceedings.
It

is

true

that

the

Court

in

Smith

dealt

exclusively

with

relitigation of the class-certification issue in state court.

But

the Court’s ruling that denials of class certification are not
binding

on

putative

class

members

relitigation in federal court.

is

equally

applicable

to

Accordingly, we must deny Sears’s

motion.
We are sympathetic to Sears’s complaint about being subjected
to a series of similar class-certification motions. But Greenfield
is the last remaining named plaintiff, so these MDL proceedings are
nearing the end. And because this is plaintiffs’ third bite at the
apple, we intend to keep the briefing on Greenfield’s anticipated
class-certification motion to a minimum.

Perhaps we will forgo

ordering briefs and instead have oral argument.
CONCLUSION
The motion of defendant Sears, Roebuck & Co. for a permanent
injunction

[382]

is

denied.

Defendant’s

motion

to

dismiss

Greenfield’s Magnuson-Moss claim remains under advisement.

A

- 11 -

status hearing is set for July 20, 2011 at 11:00 a.m. to discuss
the next steps in this litigation.

DATE:

July 11, 2011

ENTER:

_________________________________________________
John F. Grady, United States District Judge