Greenfield v. Sears, Roebuck & Co.

Filing 87

MEMORANDUM OPINION Signed by the Honorable John F. Grady on 8/14/2012. Mailed notice(cdh, )

05-4742.122-JCD

August 14, 2012

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

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MDL-1703
No. 05 C 4742

----------------------------------JEFFREY GREENFIELD,
individually and on behalf of all
others similarly situated,
Plaintiff,
v.
SEARS, ROEBUCK & CO.,
Defendant.

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No. 05 C 4744

MEMORANDUM OPINION
Before
remaining

the

court

claims

of

is

defendant’s

plaintiff’s

first

motion

to

amended

dismiss
class

the

action

complaint with prejudice for lack of jurisdiction. For the reasons
discussed below, the motion is denied.
This case is part of a multidistrict litigation (“MDL”) in
which plaintiffs claim that defendant, Sears, Roebuck & Company
(“Sears”), deceptively advertised its line of Craftsman tools as
manufactured in the United States when in fact many of the tools
are foreign-made or contain significant foreign parts.

Plaintiff,

Jeffrey Greenfield, is a Florida resident who alleges that in 2004,
he bought a Craftsman ratcheting screwdriver from the Sears store

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in Aventura, Florida that “did not qualify to be marketed as Made
in the USA.”

(First Am. Compl. ¶¶ 6-7, 64.)

He asserts claims for

violation of the Florida Deceptive and Unfair Trade Practices Act
(“FDUTPA”) (Count I), breach of warranty under the Magnuson-Moss
Warranty Act (Count II), and unjust enrichment (Count III), and he
sought certification of a class of Florida plaintiffs.

In a

memorandum opinion dated March 22, 2012, we denied Greenfield’s
motion for class certification and granted Sears’s motion to
dismiss Count II, the Magnuson-Moss claim, with prejudice.
In a letter to Greenfield’s counsel dated April 26, 2012,
Sears offered “to settle Mr. Greenfield’s claims for the total sum
of $4,000.00, inclusive of any attorneys’ fees, costs and other
possible costs and expenses of any kind, provided that this matter
is dismissed with prejudice.”

The letter also stated Sears’s

belief that its offer “far exceed[ed] any maximum recovery Mr.
Greenfield could possibly obtain for his alleged $19.95 screwdriver
under the [FDUTPA] and under a theory of unjust enrichment . . . .”
(Def.’s Mot. to Dismiss, Ex. 1.)

Plaintiff’s counsel rejected the

offer by letter the next day, stating in essence that Sears’s offer
was unrealistic and disregarded its potential liability under the
FDUTPA. (Def.’s Mot., Ex. 3.)

Sears then filed the instant motion

on the ground that the rejection of Sears’s offer of “complete
relief” moots plaintiff’s claims and requires dismissal.
Mot. at 1, 4.)

(Def.’s

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“The doctrine of mootness stems from Article III of the
Constitution, which limits the jurisdiction of federal courts to
live cases or controversies. The doctrine demands that the parties
to a federal case maintain a personal stake in the outcome at all
stages of the litigation.”

Damasco v. Clearwire Corp., 662 F.3d

891, 894-95 (7th Cir. 2011) (citation omitted).

“Therefore, ‘once

the defendant offers to satisfy the plaintiff’s entire demand,
there is no dispute over which to litigate, and a plaintiff who
refuses to acknowledge this loses outright, under Fed. R. Civ. P.
12(b)(1),

because

he

has

no

remaining

stake.’”

Id.

at

895

(brackets omitted) (quoting Rand v. Monsanto Co., 926 F.2d 596, 598
(7th

Cir.

1991)).

The

offer

of

relief

must

be

complete:

“[O]bviously the rejection of an offer of less than the complete
relief sought by a suit does not prove that there is no dispute
between the litigants.” Greisz v. Household Bank (Ill.), N.A., 176
F.3d 1012, 1015 (7th Cir. 1999).
According to Sears, the most that plaintiff could possibly
recover in damages or disgorgement of profits on his FDUTPA or
unjust enrichment claim (keeping in mind that he cannot recover
twice for the same injury) is $19.95, plus perhaps some additional
small amount of sales tax.

It also contends that even though the

FDUTPA provides for a potential attorneys’ fees award, plaintiff
would not be entitled to these fees.

In Sears’s view, Greenfield

would not be a prevailing party due to the fact that he “achieved

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neither a

judgment

on

the

merits

nor

a

settlement

enforced through a court-ordered consent decree.”
Supp. of Mot. to Dismiss at 8.)

agreement

(Def.’s Mem. in

Alternatively, Sears argues, even

if Greenfield were entitled to recover fees under the FDUTPA as a
prevailing party, $0 would be the only reasonable fee award because
his relief would be merely technical or de minimis.
Plaintiff asserts that by failing to include any declaratory
or injunctive relief or a reasonable provision for attorneys’ fees,
Sears’s settlement proposal did not offer complete relief and
therefore did not moot this lawsuit.1

We agree with plaintiff that

Sears’s offer did not satisfy Greenfield’s entire demand.
FDUTPA,

which

prohibits

“[u]nfair

methods

of

The

competition,

unconscionable acts or practices, and unfair or deceptive acts or
practices in the conduct of any trade or commerce,”

Fla. Stat.

Ann. § 501.204, provides that “[i]n any action brought by a person
who has suffered a loss as a result of a violation of this part,
such person may recover actual damages, plus attorney’s fees and
court costs . . . .”

Fla. Stat. Ann. § 501.211(2).

The statute

also provides that “anyone aggrieved by a violation of this part
may bring an action to obtain a declaratory judgment that an act or
practice

violates

this

part

and

to

enjoin

a

person

who

has

violated, is violating, or is otherwise likely to violate this

1/
Plaintiff also argues that Sears’s settlement offer failed to preserve
his right to appeal this court’s dismissal of the Magnuson-Moss claim and denial
of the motion for class certification. We need not address that argument.

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part.” Fla. Stat. Ann. § 501.211(1). In his complaint, Greenfield
seeks

“actual

and/or

compensatory

damages,”

in

addition

to

attorneys’ fees and costs, injunctive relief, and other relief as
the court deems just and proper.

(First Am. Compl. ¶ 105.)

He

also seeks a declaration “that Sears has been misleading Plaintiff
[and others] who purchased Craftsman tools.”

(First Am. Compl.

Prayer for Relief.)
In its motion and accompanying memorandum, Sears does not
address

the

availability

of,

or

Greenfield’s

demands

for,

injunctive and declaratory relief. In its reply brief, Sears calls
Greenfield’s argument regarding the offer’s lack of declaratory
relief

“frivolous”

declaratory relief.”

because

the

“FDUTPA

claim

(Def.’s Reply at 3 n.5.)

does

not

seek

In our view, it is

Sears’s argument that borders on frivolous because Greenfield’s
demand for declaratory relief is included in his prayer for relief.
Sears’s offer did not include declaratory relief; therefore, it was
not complete.
Sears’s offer also failed to include injunctive relief. Sears
contends that to obtain this relief, Greenfield would have to prove
that he was “aggrieved by a violation” of the FDUTPA and he could
not do so because his only loss was approximately $19.95, he
rejected Sears’s offer to pay him more than 200 times that amount,
and “any case or controversy (including one for injunctive relief)
regarding that loss is moot.” (Reply at 5.) Regarding plaintiff’s

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demand

for

attorneys’

fees,

“Greenfield

achieved

neither

settlement

agreement

Sears

enforced

decree.

a

makes

judgment
through

a

a
on

similar
the

argument:

merits

court-ordered

nor a
consent

Instead, by rejecting Sears’s offer, Greenfield achieved

$0 . . . [and] is not a prevailing party entitled to recover
attorneys’ fees and costs.”

(Def.’s Mem. at 8.)

Sears’s arguments are akin to that made by the City of Chicago
in Gates v. Towery, 430 F.3d 429 (7th Cir. 2005).

In Gates, the

plaintiffs challenged the procedures that the City used for dealing
with property seized by police when making arrests. The plaintiffs
sought return of the property, prejudgment interest, compensatory
damages

attributable

to

loss

of

the

property’s

use,

and

compensation for the value of their time devoted to its retrieval.
430 F.3d at 431.

The City tendered each of the two plaintiffs a

check for the amount of cash that had been seized from him, with a
promise of interest to follow.

Plaintiffs’ counsel returned the

checks because the City had omitted costs and damages.

The City

appealed the district court’s subsequent certification of a class,
arguing pre-certification mootness.

The Court of Appeals agreed

with plaintiffs that the proferred relief was incomplete, stating:
A tender is insufficient unless it makes the plaintiff
whole and thus must include the filing fees and other
costs under 28 U.S.C. § 1920. And a promise of interest
tomorrow differs from cash today; Chicago has a history
of delay in payment, so a prudent litigant may attach a
steep discount to a promise unaccompanied by a check.
Especially because the City denies that interest is owed
but offers it only as a goodwill gesture.

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Then there is the matter of damages. Chicago contends
that neither the Constitution nor any statute entitles
anyone to damages. That’s not correct: a person whose
rights under the due process clause have been violated
receives nominal damages if he cannot show out-of-pocket
loss or other concrete injury. The City did not tender
even $1 for nominal damages.
Cash on the barrelhead to cover costs, interest, and
nominal damages still would not be enough, because
plaintiffs want compensatory damages (if not punitive
damages).
Chicago maintains
that
they
have not
established any compensable loss, but this gets the cart
before the horse. A court may resolve such an issue if
and only if there is a live controversy. A defendant
cannot demand and receive an opinion on the merits of
some aspect of plaintiffs’ claims, pay off the rest, and
then contend the whole suit is moot and must be
dismissed, consigning the opinion to advisory status. To
eliminate the controversy and make a suit moot, the
defendant must satisfy the plaintiffs’ demands; only then
does no dispute remain between the parties.
Chicago is unwilling to satisfy plaintiffs’ demands.
[Plaintiffs] and others similarly situated are entitled
to a judge’s decision on what if any relief (in addition
to return of the seized funds) is appropriate. Perhaps
the City is right in thinking that prejudgment interest
is all the compensation due and makes nominal damages
unavailable because interest represents actual damages
from loss of the property’s use. Still, this is a
question for the district judge to resolve on the merits.
A defendant cannot simply assume that its legal position
is sound and have the case dismissed because it has
tendered everything it admits is due. Mootness occurs
when no more relief is possible. That point has not been
reached.
To say, as Chicago does, that a class may not be
certified because no more relief is proper is to miss the
distinction between being in the right and the absence of
a case or controversy. By Chicago’s lights, unsuccessful
lawsuits should be dismissed as moot (because the
defendant owes nothing) rather than decided on the
merits. That’s not the way things work: A bad theory
(whether of liability or of damages) does not undermine
federal jurisdiction.
430 F.3d at 431-32 (citations omitted) (emphasis added).

Like the

City of Chicago, Sears has put the cart before the horse; it made

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an offer that satisfied only some of Greenfield’s demands and
argues

that

the

remainder

of

what

plaintiff

is

seeking

is

predicated on bad theories2 and that it was somehow rendered
unavailable by plaintiff’s rejection of the incomplete offer.
Sears has failed to demonstrate mootness.
We must address one final matter.

Plaintiff maintains that

Sears, by attaching to its motion plaintiff’s counsel’s response
letter of April 27, 2012 and by referring to the substance of the
two settlement agreements in another case in this MDL, has violated
Federal Rule of Evidence 408 and has waived the confidentiality
provisions in the settlement agreements.
we

strike

the

letter

and

the

Plaintiff requests that

references

to

the

settlement

agreements from Sears’s moving papers. The request is denied. The
settlement agreements (as quoted by plaintiff) contain a provision
stating that they are “subject to Federal Rule of Evidence 408 and
any other applicable confidentiality rule and as such shall not be
admissible in any proceeding.”
provides

that

evidence

of

(Pl.’s Opp’n at 19.)

settlements,

offers

to

Rule 408
settle,

or

statements made in settlement negotiations are inadmissible “either
to prove or disprove the validity or amount of a disputed claim or
to impeach by a prior inconsistent statement or a contradiction.”

2/
Sears’s contention that it would be “shield[ed] from both a damage award
and an award of fees or costs” under the FDUTPA’s “safe haven” for a retailer who
has in good faith engaged in the dissemination of a manufacturer’s or
wholesaler’s claim without actual knowledge that it violated the statute, Def.’s
Mem. at 8, is a prime example of a question that would have to be resolved on the
merits.

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Sears has not offered the letter or substance of the settlement
agreements for either purpose; thus, it has not violated Rule 408
or the confidentiality provision cited by plaintiff.
CONCLUSION
The motion of defendant Sears, Roebuck & Company to dismiss
plaintiff

Jeffrey

Greenfield’s

remaining

claims

for

lack

of

jurisdiction [72, 74] is denied.

DATE:

August 14, 2012

ENTER:

_________________________________________________
John F. Grady, United States District Judge