The Seventh Circuit Affirms That You Should Be Careful What You Wish For
Movie villains are fueled by clichés. For example, in American cinema, villains tend to be foreign (particularly during the Cold War). See Die Hard (1988); Red Dawn (1984). Movie villains also typically have a side-kick muscleman, who traditionally, kills using a gimmick. See any James Bond film (but specifically Goldfinger (1964)). However, one of the greatest, and most implausible clichés, still remains the classic, “The villain is never dead until the second or third time he’s killed.” See Aliens (1986); any movie using the word “Halloween” or “the 13th” in the title. The Seventh Circuit’s recent decision in Espenscheid v. DirectSat, LLC, Case No. 12-1943 (Aug. 6, 2012), fits into this latter category when the Court gave the three plaintiff satellite television technicians a movie-quality resurrection when it permitted them to appeal a case that, from DirectSat’s point of view, was settled and done.
Eagle-eyed readers of this blog (or at least those with good memories) may recall that we wrote about the lower court’s decision in this matter over a year ago. If you’ll recall, at that point in time, the court decertified the plaintiffs’ class a mere two weeks before trial and converted the trial to one only on the individual plaintiffs’ claims.
Flash-forward a year, and the landscape has changed.
First, plaintiffs settled their lawsuits, and the case was dismissed. More importantly, however, the settlement reserved the plaintiffs’ right to appeal on the ground that the plaintiffs had suffered no injury as a result of the denial of certification. And then, just as the shattered T-1000 recollected his parts after being frozen and broken in Terminator 2, the plaintiffs sprang back to life and appealed the decertification to the Seventh Circuit. DirectSat argued that the appeal should be dismissed because the decertification caused no injury to the employees who settled their claims. The employees, however, maintained that they still had a financial stake via the incentive rewards to confer standing for appeal.
The Seventh Circuit agreed with the plaintiffs and held that if it did now allow the settling plaintiffs to appeal decertification, judicial economy will “rarely be served,” as it would allow an unnamed class member to “pick up the fallen spear and bring his own class action suit.” By granting the appeal here, it enabled the court to determine the viability of the class action suit at the earliest opportunity.
The Bottom Line: Much like arresting the bad guy and leaving the key to his cuffs right there on his lap, DirectSat provided plaintiffs with the very means to appeal their decertification by failing to close all of the loopholes in their settlement agreement. Sometimes being too clever by half can wind up being a total loss.