Civil Procedure — class actions — collateral estoppel

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United States Court of Appeals For the Seventh Circuit

Civil

Civil Procedure — class actions — collateral estoppel

A person who was never a party to a previous class action that was dismissed cannot be enjoined from filing a class action based on the same claim.

The Supreme Court noted in Smith v. Bayer Corp. that ‘Bayer’s strongest argument [for enjoining the Murray-type class action in that case] comes not from established principles of preclusion, but instead from policy concerns relating to use of the class action device.’ 131 S. Ct. at 2381. Indeed it’s a strong argument because the policy concerns are acute, as explained at length and with many references in our previous opinions in this and other cases. But the Court rejected ‘this form of argument’ (policy) as a justification for enjoining class action suits by class members who had never become parties because it ‘flies in the face of the rule against nonparty preclusion.’ Id. The Court, which not infrequently bases decision on policy concerns, for they are legitimate tools for making rules of law, 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. 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.”

Vacated.

5-1-1210-2407 & 11-2133 Thorogood v. Sears, Roebuck & Co.

Appeals from the United States District Court for the Northern District of Illinois, Leinenweber, J., Posner, J.