(Newswire.net — October 24, 2013) Los Angeles, California —
Capstone Law’s Senior Counsel Glenn Danas, praises the Seventh Circuit’s decision to uphold the viability of consumer class actions in a new ruling authored by Judge Richard Posner. The Seventh Circuit’s decision follows the Supreme Court’s recent opinion in Comcast v. Behrend. Hughes v. Kore of Indiana Enterprise Inc. involved an appeal from an order decertifying a class action. The suit concerned the defendant’s alleged failure to post required notices of fees charged to users of its ATMs. During the relevant time period, at least 2800 ATM transactions were each saddled with a $3 fee. The lower court gave two reasons for decertifying the class of ATM users: (1) class members would theoretically be better off bringing individual suits, since they would then get statutory damages of between $100 and $1000 instead of just a few dollars to cover their ATM fees; and (2) individual notice to the class members was practically impossible.
The Hughes court rejected both of the district court’s reasons for decertifying the class. First, the court noted that individual suits would be extremely unlikely due to the difficulty of hiring counsel, since no lawyer “could expect the court to award an attorney’s fee commensurate with his efforts in the case, if the client recovered only $100.” Instead, the court found that the case should proceed as a class action, and that damages should be donated to a charity instead of being distributed to class members. Even if the class would not benefit from this, and the remedy were thus “purely punitive,” this would still be preferable to individual suits, since one of the goals of a class action is to prevent the defendant from “walking away from the litigation scot-free.”
The court also rejected the idea that the impracticality of individual notice defeats certification, holding that individual notice is required only if class members can be identified with reasonable effort. In this case, stickers placed on ATMs and publication notice in a newspaper and on a website was sufficient, in part because the small dollar value of the claims meant that there was little possibility that anyone would opt out.
Glenn Danas, Senior Counsel at Capstone Law, is hopeful about the impact this decision will have on class actions in general: “Judge Posner’s opinion in Hughes demonstrates that class actions have a critical utility for resolving small claims, and that some of the most respected federal appellate courts will continue to apply Rule 23 with a fidelity to the rule’s original purpose, notwithstanding the agenda of the Supreme Court’s narrow majority.”
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Stephen Gamber, Senior Counsel, Capstone Law: 1840 Century Park East, Suite 450, Los Angeles, California 90067.
Phone number: 310 556 4810; or Email: Stephen.Gamber@CapstoneLawyers.com.
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SOURCE: Capstone Law