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Steven J. Thorogood v. Sears

April 18, 2011

STEVEN J. THOROGOOD, PLAINTIFF,
v.
SEARS, ROEBUCK AND CO., DEFENDANT.



The opinion of the court was delivered by: Hon. Harry D. Leinenweber

MEMORANDUM OPINION AND ORDER

This case is before the Court pursuant to the Seventh Circuit's directive to issue Defendant Sears, Roebuck and Co. (hereinafter, "Sears") an injunction pursuant to the All Writs Act, 28 U.S.C. § 1651. Thorogood v. Sears, Roebuck & Co., 624 F.3d 842 (7th Cir. 2010) (hereinafter, "Thorogood III"). The parties disagree as to the terms of the injunction and have submitted briefs on the issue. For the reasons contained herein, this Court will enter Sears' Proposed Order granting it a permanent injunction, in the record as Exhibit H to Sears' Reply Brief.

I. BACKGROUND

The instant lawsuit, formerly a 29-jurisdiction class action complaint against Sears, has taken a tortured path through the judicial system. The suit was brought by Plaintiff Steven J. Thorogood ("Thorogood"), who alleged that Sears misled its customers by advertising its Kenmore dryers as containing stainless steel drums, when, in fact, part of the drum was made of ceramic-coated "mild" steel. After this Court certified the class, the Seventh Circuit reversed, finding that there were no common questions of law and fact so as to allow class treatment of the claims. Thorogood v. Sears, Roebuck and Co., 547 F.3d 742, 746--47 (7th Cir. 2008) ("Thorogood I").

On remand to this Court, Sears sought to dismiss Thorogood's individual claim based on its $20,000 offer of judgment, and this Court granted the motion. The Seventh Circuit affirmed. Thorogood v. Sears, Roebuck and Co., 595 F.3d 750 (7th Cir. 2010) ("Thorogood II"). Subsequently, Martin Murray ("Murray"), an unnamed member of the class, brought a new suit in California based on largely the same allegations. That suit, filed by the same attorneys who represented Thorogood, named Sears and Electrolux Home Products, Inc. ("Electrolux"), the manufacturer of the clothes dryers.

Sears filed a Motion in this Court seeking to enjoin that suit, as well as any other class action suits based on the same allegations and brought by members of the decertified class and their lawyers. After this Court denied the motion, the Seventh Circuit reversed, finding that the defense of collateral estoppel would not adequately protect Sears from what it described as "vexatious litigation." Thorogood III, 624 F.3d at 850. In fact, the district judge in California hearing Murray's case, after first determining that collateral estoppel barred the suit, ultimately rejected that defense and ordered Sears to respond to what the Seventh Circuit described as "extravagant discovery requests." Id. at 851. The Seventh Circuit noted, "[i]f the refusal to enjoin Murray's suit sticks, there is nothing standing in the way of [class counsel's] filing carbon-copy class actions against Sears in other states as well." Id. at 850. Because there is no way for Sears to recoup its discovery expenses in Murray's suit, or the cost of pursuing preclusion defenses in the other class action suits the appeals court was sure would follow, the Seventh Circuit held that an injunction was warranted. Id. at 851.

All that is left is for this Court to work out the details of that injunction. The parties have submitted proposed orders to this Court. Unsurprisingly, they disagree as to the breadth and phrasing of the injunction. The primary areas of dispute are whether the injunction should be broad enough to encompass class action claims against Electrolux and whether former members of the class should be allowed to pursue class-wide discovery against Sears as a non-party. Additionally, Sears has moved to file under seal a document titled "Universal Terms and Conditions" ("UTC"), which reflects Electrolux's obligations to indemnify Sears for Sears' representations regarding the dryers. Thorogood opposes the motion to file the document under seal.

II. ANALYSIS

In issuing its ruling, the Seventh Circuit directed this Court to look for guidance to similar injunctions granted in In re Bridgestone/Firestone Tires Products Liab. Litig., 271 F.Supp.2d 1080 (S.D. Ind. 2003), In re Prudential Ins. Co. of Am. Sales Practice Litig., 261 F.3d 355, 360-361 (3d Cir. 2001) and Wood v. Santa Barbara Chamber of Commerce, Inc., 705 F.2d 1515, 1523 (9th Cir. 1983). The Court has reviewed those rulings.

A. Claims Against Electrolux and Discovery from Sears

Thorogood interprets the Seventh Circuit's ruling as allowing Murray's suit against manufacturer Electrolux to proceed, while Sears argues that the injunction should cover "all class action suits challenging representations, in Sears existing advertising, labeling, and other marketing that the stainless steel drums in Kenmore dryers are made of stainless steel." Def.'s Rep. at 3--4 (quoting Thorogood III, 624 F.3d at 853) (emphasis added). At issue is the observation from the Seventh Circuit in Thorogood III that Electrolux "is not a party to the proceeding under the All Writs Act or to this appeal and is therefore entitled to no relief." Thorogood III, 624 F.3d at 852. Arguing that this admonition means that class claims against Electrolux should not be foreclosed by the injunction, Thorogood proposes the following language:

Any and all members of the class defined in and certified by this Court's November 1, 2007 Memorandum Opinion and Order (ECF No. 80) and decertified by Thorogood I (thereinafter "Class Members"), their attorneys and anyone acting on behalf of or in concert or participation with any of them are restrained and permanently enjoined from litigating or relitigating, - whether by commencing, filing, continuing, or intervening in any lawsuit, complaint, or cause of action in any jurisdiction - on a class-wide basis any claims for damages, or for any recovery or relief whatsoever, in contract, in tort or in equity, under statute, or otherwise, arising out of representations, advertising, labeling or other marketing regarding or relating to the stainless-steel composition of dryer drums for the Kenmore dryer models involved in the instant action (hereafter "Kenmore Dryers") against Sears, Roebuck and Company only. Pl.'s Resp., Ex. A., ¶1. (emphasis added).

Sears, by contrast, asks the Court to order that:

[a]ny and all members of the class defined in and certified by this Court's November 1, 2007 Memorandum Opinion and Order (ECF No. 80) and decertified by Thorogood I (hereinafter "Class Members"), their attorneys and anyone acting on behalf of or in concert or participation with any of them are restrained and permanently enjoined from litigating or relitigating - whether by commencing, filing, continuing, or intervening in any lawsuit, complaint or cause of action in any jurisdiction - on a class-wide basis any claim for damages, or for any recovery or relief whatsoever, in contract, in tort or in equity, under statute, or otherwise, arising out of representations, advertising, labeling or other marketing regarding ...


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