Frankle v. Best Buy Co., Inc.
Filing
139
ORDER granting 132 Motion to Enforce Settlement; granting 132 Motion for Permanent Injunction (Written Opinion). Signed by Judge John R. Tunheim on February 6, 2015. (DML)
UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
ASHLEIGH FRANKLE, individually and
on behalf of all others similarly situated,
Plaintiff,
v.
Civil No. 08-5501 (JRT)
ORDER GRANTING
DEFENDANT’S MOTION TO
ENFORCE SETTLEMENT
BEST BUY STORES, L.P.,
Defendant.
Barbara Quinn Smith, MADDOX HARGETT & CARUSO, PC, 9853
Johnnycake Ridge Road, Suite 302, Mentor, OH 44060; T. John Kirk,
Thomas K. Caldwell, and Thomas A. Hargett, MADDOX HARGETT &
CARUSO, PC, 10100 Lantern Road, Suite 150, Fishers, IN 46037;
Corey D. Holzer, Marshall P. Dees, Michael I. Fistel, Jr., and William W.
Stone, HOLZER, HOLZER & FISTEL, LLC, 200 Ashford Center
North, Suite 300, Atlanta, GA 30338; Paul J. Geller, Cullin A. O’Brien,
and Stuart A. Davidson, ROBBINS GELLER RUDMAN & DOWD,
LLP, 120 East Palmetto Park Road, Suite 500, Boca Raton, FL 33432;
David P. Meyer and Matthew R. Wilson, DAVID P. MEYER &
ASSOCIATES CO., LPA, 1320 Dublin Road, Suite 100, Columbus, OH
43215; and Garrett D. Blanchfield, Jr., REINHARDT WENDORF &
BLANCHFIELD, 332 Minnesota Street, Suite E-1250, St. Paul, MN
55101, for plaintiff.
Elliot S. Kaplan, Anne M. Lockner, Brent L. Reichert, Jennifer M.
Robbins, and Ochen D. Kaylan, ROBINS KAPLAN LLP, 800 LaSalle
Avenue, Suite 2800, Minneapolis, MN 55402, for defendant.
This matter is before the Court on a motion to enforce settlement and injunction by
Best Buy Stores, L.P. (“Best Buy”). On November 9, 2010, the Court entered an Order
and Final Judgment approving the parties’ proposed settlement in this class action, which
dismissed with prejudice all remaining claims in the class action against Best Buy. This
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Court retained jurisdiction over all matters related to the Frankle class action. Best Buy
has now moved to enforce that Order against Kenneth Jackson, a Frankle Class member,
and his subrogee State Farm Fire and Casualty Company (“State Farm”), in the action
Jackson filed against Best Buy in Louisiana state court. Because Jackson is a Class
member who received notice of the settlement barring him – and consequently, State
Farm as his subrogee – from relitigating these claims against Best Buy, the Court will
grant Best Buy’s motion and order State Farm to dismiss with prejudice its claims against
Best Buy in the Louisiana action.
BACKGROUND
I.
CLASS ACTION PROCEEDINGS
On October 14, 2008, Ashleigh Frankle filed a complaint, individually and on
behalf of all others similarly situated, against Best Buy for failure to install clothes dryers
with a heavy metal vent. (Compl., Oct. 14, 2008, Docket No. 1.) Frankle alleged that if
the dryers were improperly installed, such as with a foil vent, they posed a serious fire
risk to customers. (Id. ¶¶ 34-36.) She further alleged that Best Buy sold and then
installed (or arranged for the installation of) such dryers with metal foil transition ducts or
vents. (Id. ¶¶ 7-13, 16.) Following a final fairness hearing, the Court entered an Order
granting final class certification and approval of the parties’ proposed settlement. (Order
Granting Final Approval of the Proposed Settlement, Final Certification of the Settlement
Class, and Approval of Attys’ Fees and Expenses (“Order Granting Final Approval”),
Nov. 9, 2010, Docket No. 127.)
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In the Order granting final settlement approval, the Court certified the following
Class:
All persons who purchased a clothes dryer from Best Buy from October 14,
2002 to January 12, 2009, who entered into a contract with Best Buy to
install or arrange for the installation of the dryer, and whose dryer was
installed with a metal foil transition duct/vent and not at the direction of the
Class member.
(Id. at 2.) In the same Order, the Court approved the form and content of the settlement
notice and claim form. (Id. at 3-5.) Additionally, the Court entered final judgment
dismissing with prejudice all claims alleged in the Class Action Complaint. (Id. at 8.) In
doing so, the Court “specifically refer[red] to and invoke[d] the Full Faith and Credit
Clause of the United States Constitution and the doctrine of comity and request[ed] that
any court in any other jurisdiction reviewing, construing, or applying [the] Judgment
implement and enforce its terms in their entirety.” (Id.) Further, the Court “expressly
retain[ed] jurisdiction over all matters relating to the adjudication of claims and the
payment of Valid Claims as provided . . . by this Order, as well as all other matters
relating to the administration and consummation of the Settlement.” (Id. at 8-9.)
The notice was mailed to all Class members, including Kenneth Jackson, in 2010.
(Decl. of Theresa Collins (“Collins Decl.”) ¶ 2, June 4, 2014, Docket No. 136.) Jackson
was sent a follow-up reminder one month after the initial notice was sent. (Id. ¶ 3.) He
did not submit a claim form or opt-out notice. (Id. ¶ 4.)
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II.
KENNETH JACKSON’S LOUISIANA STATE COURT ACTION
Kenneth Jackson is a resident of Prairieville, Louisiana. (Id. ¶¶ 1-2; Decl. of
Ochen D. Kaylan (“Kaylan Decl.”), Ex. 1 ¶ 2, June 4, 2014, Docket No. 135.) On
February 1, 2012, Kenneth Jackson and his wife Nickeshia filed a complaint against Best
Buy in the 19th Judicial District Court in the Parish of East Baton Rouge in Louisiana.
(Kaylan Decl., Ex. 1.) In his complaint, Jackson alleges that he is entitled to damages for
a fire that occurred due to a clothes dryer installed with a foil transition duct. (Id. ¶¶ 3-5,
8-10, 13-17.) He states that he purchased the clothes dryer from Best Buy on August 25,
2007. (Id. ¶ 5.) Jackson also acknowledges in the complaint that Best Buy was subject
to the Frankle class action for precisely the same type of injury that he suffered. (Id.)
State Farm petitioned to intervene (Kaylan Decl., Ex. 2), and Jackson
subsequently voluntarily dismissed his claims. (Kaylan Decl., Ex. 3.) Best Buy now
seeks dismissal of State Farm’s subrogated claims to recover its fire damage payments.
ANALYSIS
I.
RES JUDICATA
Res judicata operates to bar subsequent litigation when “(1) the earlier claim
involved the same set of factual circumstances; (2) the earlier claim involved the same
parties or their privies; (3) there was a final judgment on the merits; [and] (4) the
estopped party had a full and fair opportunity to litigate the matter.” Minch Family LLLP
v. Buffalo–Red River Watershed Dist., 628 F.3d 960, 966 (8th Cir. 2010) (citing
Hauschildt v. Beckingham, 686 N.W.2d 829, 840 (Minn. 2004)). The first factor is
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satisfied if the subsequent claim arises out of “the same nucleus of operative facts as the
prior claim.” Banks v. Int’l Union Elec., Elec., Technical, Salaried & Mach. Workers,
390 F.3d 1049, 1052 (8th Cir. 2004) (internal quotation marks omitted); see also Costner
v. URS Consultants, Inc., 153 F.3d 667, 673 (8th Cir. 1998) (“Regarding the ‘same claims
or causes of action’ element of claim preclusion, we have stated that whether a second
lawsuit is precluded turns on whether its claims arise out of the ‘same nucleus of
operative facts as the prior claim.’” (quoting United States v. Gurley, 43 F.3d 1188, 1195
(8th Cir. 1994))).
Res judicata “bars the relitigation of issues which were actually
litigated or which could have been litigated” in the first action so long as the party
against whom the earlier decision is being asserted had a “full and fair opportunity to
litigate the issue.”
Lovell v. Mixon, 719 F.2d 1373, 1376 (8th Cir. 1983) (internal
quotation marks omitted); see also State v. Joseph, 636 N.W.2d 322, 327 (Minn. 2001).
“Generally, principles of res judicata, or claim preclusion, apply to judgments in class
actions as in other cases.” Twigg v. Sears, Roebuck & Co., 153 F.3d 1222, 1226 (11th Cir.
1998).
In this case, all elements of res judicata are met.
The Frankle class action
involved the same set of factual circumstances – improperly-installed clothes dryers,
purchased from Best Buy during a specific period of time – and the same parties, as
Jackson was a Frankle Class member. Not only was Jackson initially a Frankle Class
member, but he took no steps to opt out of the class after he was sent the Class notice.
(Collins Decl. ¶¶ 2-4.) The Court entered a final judgment incorporating the parties’
settlement in the Frankle class action, and “[i]t is widely agreed that an earlier dismissal
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based on a settlement agreement constitutes a final judgment on the merits in a
res judicata analysis.” Ford-Clifton v. Dep’t of Veterans Affairs, 661 F.3d 655, 660 (Fed.
Cir. 2011); Larken, Inc. v. Wray, 189 F.3d 729, 732 (8th Cir. 1999) (“When the parties to
a previous lawsuit agree to dismiss a claim with prejudice, such a dismissal constitutes a
‘final judgment on the merits’ for purposes of res judicata.”). Finally, the Court found
that the parties in the Frankle action had a full and fair opportunity to litigate their claims
and that the Settlement Notice to Class members, including Jackson, fairly and
adequately notified them of the settlement and the steps they should take to obtain
compensation.
Because all elements of res judicata are met, claims based on Jackson’s injury
from the improperly-installed dryer purchased at Best Buy in 2007 would be precluded.
The Court will turn next to whether State Farm’s subrogated claims are also barred by
res judicata.
II.
SUBROGATED CLAIMS
A “party entitled to subrogation[] stands in the shoes of the plaintiff, and can be
subrogated to no greater rights than the one in whose place he is substituted.” Iowa Elec.
Light & Power Co. v. Mobile Aerial Towers, Inc., 723 F.2d 50, 53 (8th Cir. 1983)
(internal quotation marks omitted). “[O]nce the injured person settles a claim and thus
extinguishes his own right to further pursuit of that claim, the rights of the party with the
subrogation interest in the claim are extinguished as well.” Hamanne v. Cent. States, Se.
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& Sw. Areas Health & Welfare Fund, 11 F. Supp. 2d 1065, 1069 (D. Minn. 1998)
(quoting Shell v. Amalgamated Cotton Garment, 43 F.3d 364, 366 (8th Cir. 1994)).
Because res judicata precludes Jackson from asserting an extinguished claim based
on the improper dryer installation, and State Farm brings its claims against Best Buy
solely as a subrogee of Jackson’s claims, the Court concludes that State Farm is also
barred by res judicata. State Farm stands in Jackson’s shoes and cannot assert a right to
pursue claims for an injury on which Jackson himself would be barred from recovering.
Accordingly, the Court will grant Best Buy’s motion and order State Farm to dismiss
with prejudice its claims against Best Buy pending in the 19th Judicial District Court,
Parish of East Baton Rouge in Louisiana.1
ORDER
Based on the foregoing, and all the files, records, and proceedings herein, Best
Buy’s Motion to Enforce Settlement and Injunction [Docket No. 132] is GRANTSED.
Accordingly, IT IS HEREBY ORDERED that:
1.
State Farm shall dismiss with prejudice its claims in subrogation against
Best Buy, before the 19th Judicial District Court, Parish of East Baton Rouge, State of
Louisiana, Case No. 608859.
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The Court “expressly retain[ed] jurisdiction over all matters relating to the adjudication
of claims” in the Order entering final judgment and approving the final settlement in the Frankle
action. (Order Granting Final Approval at 8.) Under the All Writs Act, the Court thus has the
authority to “issue all writs necessary or appropriate in aid of [its] respective jurisdiction[].” 28
U.S.C. § 1651(a). “Under this statute, the Supreme Court ‘has repeatedly recognized the power
of a federal court to issue such commands . . . as may be necessary or appropriate to effectuate
and prevent the frustration of orders it has previously issued in its exercise of jurisdiction
otherwise obtained.’” Adams v. S. Farm Bureau Life Ins. Co., 493 F.3d 1276, 1284 n.4 (11th Cir.
2007) (quoting United States v. N.Y. Tel. Co., 434 U.S. 159, 172 (1977)).
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2.
Kenneth Jackson and State Farm shall be ENJOINED from filing or
maintaining any action against Best Buy in any forum based on Jackson’s released
claims.
3.
Best Buy shall provide a copy of this Order to counsel for State Farm Fire
and Casualty Company.
4.
The Court shall retain jurisdiction for the enforcement of the terms of this
5.
The Clerk of Court is respectfully directed to mail a copy of this Order to
Order.
the 19th Judicial District Court, Parish of East Baton Rouge, 222 Saint Louise Street
#179, Baton Rouge, LA 70801.
LET JUDGMENT BE ENTERED ACCORDINGLY.
DATED: February 6, 2015
at Minneapolis, Minnesota.
____s/
____
JOHN R. TUNHEIM
United States District Judge
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