The Seventh Circuit Court of Appeals, considering for the fourth time a case involving claims that Sears, Roebuck and Co. falsely states that its clothes dryer contains a stainless steel drum, has, on remand from the U.S. Supreme Court, decided that it cannot enjoin a copycat class action filed in a California state court by a member (Murray) of the initial class action (Thorogood) and then removed by Sears to federal court. Thorogood v. Sears, Roebuck & Co., Nos. 10-2407, 11-2133 (7th Cir., decided May 1, 2012). So ruling, the court ordered the district court to vacate the injunction that it had previously ordered the California court to impose, while refusing to change any of its criticism of the Thorogood claims or the attorney who represented both Thorogood and Murray.
After the Seventh Circuit issued its ruling to enjoin Murray’s suit, the U.S. Supreme Court held in an unrelated case that “neither a proposed class action nor a rejected class action may bind nonparties.” The Seventh Circuit had denied class certification in the initial class action filed by Thorogood before finding Murray collaterally estopped from bringing his claims. Applying the new Supreme Court decision, the Seventh Circuit states, “we think it implies that Murray never became a party to Thorogood’s suit, and that being neither a party nor in privity with one, he could not be bound by the judgment in that suit.”
Noting that the U.S. Supreme Court “could have changed the rule of nonparty preclusion but decided to stick with it, and instead listed alternatives to preclusion: stare decisis, comity, consolidation of overlapping suits by the Panel on Multidistrict Litigation (not—yet—available in the dryer saga, because Murray’s is the only pending suit, as far as we know, and available when filed in a state court only if the suit is removed to federal court, as Murray’s suit was), changes to the Federal Rules of Civil Procedure, and federal legislation,” the court concluded, “Sears will have to tread one or more of these paths if it wants relief from this copycat class action and perhaps more such actions to come; we can’t save it.”