# United States Court of Appeals

For the Seventh Circuit Chicago, Illinois 60604

December2,2010Before

R ICHARDA. P OSNER
,CircuitJudge

M ICHAELS. K ANNE
,CircuitJudge

T ERENCET. E VANS
,CircuitJudge

No.10–2407S TEVENJ. T HOROGOOD
, individuallyandonbehalfofallotherssimilarlysituated,PlaintiffAppellee

,v

.S EARS
, R OEBUCKANDC OMPANY
,DefendantAppellant.AppealfromtheUnitedStatesDistrictCourtfortheNorthernDistrictofIllinois,EasternDivision.No.06C1999HarryD.Leinenweber,Judge

.ORDERTheplaintiffappelleefiledapetitionforpanelrehearing,andrehearingenbanc,onNovember16,2010.Allthejudgesonthepanelhavevotedtodenythepetition,andnojudgehasrequestedavoteonrehearingthecaseenbanc.Butinviewoftheaccusationsleveledinthepetitionbytheplaintiff’slawyer,ClintonA.Krislov,againstthepanel’sdecision,wehavedecidedthatafurtherstatement,beyondmerelyreportingthedenialofthepetition,wouldbehelpfultoreadersofthepanelopinion(2010WL 4286367,Nov.2,2010;ourearlieropinionsinthisprotractedlitigationarereportedat547F.3d742and595F.3d759),readersofthepetitionforrehearing—andperhapsevenMr.Krislov,whoseaccusationsareoverthetop,asweshallnowexplain,andwhomaywishtomoderatehisfury.Thepetitionexpressesintonesofoutrage(1)disagreementwiththemeritsofourdecision,includingthescopeoftheinjunctionthatweorderedthedistrictcourttoenter;and(2)outrageatthepanel’scharacterizationofKrislov’sandBoling’slitigationtactics.MarkBolingisKrislov’scocounselintheCaliforniacopycatclassactionsuitthatweorderedenjoinedonthe2

authorityoftheAllWritsAct.Krislovisthecolorfulattorney(andIllinoispolitician 1 )whointheoralargumentofthefirstappealinthis lawsuitaboutallegedruststainsinclothesdryerssoldbySearsRoebuckaskedustoquizourwivesastowhethertheyworrythata“stainlesssteel“clothesdryermightcauseruststainsontheclothesbeingdriedunlessthedryer’sdrumwasmadeentirely ofstainlesssteel.Thewivesunanimouslyanswered“no.”GivenKrislov’schallenge(askyourwives),thatshouldhaveendedthislitigation.(Andspeakingofgender,wenoteKrislov’sremarkattheoralargument:“Nottobesexist,yourhonor,butmaybeweshouldhavethisenbancsosomeofthefemalejudgesonthiscourtcouldsitandmightweighin.”Thismaybeanunacknowledgedgroundonwhichheisseekingnotonlypanelrehearingbutrehearingenbanc.)Thepetitionnotesatensionbetweenourinjunction(againsttheCaliforniaclassaction),andoursimilarinjunctioninInreBridgestone/Firestone,Inc.TiresProductsLiabilityLitigation ,333F.3d763(7thCir.2003),ontheoneh and,andtheSupremeCourt’sdecisionsinTaylorv.Sturgell

,553U.S.880(2008),andPhillipsPetroleumCo.v.Shutts ,472U.S.797(1985),ontheotherhand.ButitsfailuretoacknowledgethegrantofcertiorariinSmithv.Bayer,131S.Ct.61(2010)(discussedinouropinion),istelling:theholdingsinthecasesthatKrislovcitesdonotrisetothelevelofa“cleardirective”fromtheSupremeCourt.Insteadacircuitsplithasdevelopedconcerningwhetherandwhenclasscertificationorderscanserveasthebasisforcollateralestoppelinotherforums.OuropinionnotesthistensionandthepossibilitythatthemeritsdecisioninSmithv.Bayer,whenitisissued,maywarrantmodificationoftheinjunctionthatwehaveordered.Thepetitionignorestheprincipalreasonsouropiniongaveforenjoiningthecopycatclassaction.ItsaysvirtuallynothingabouttheAllWritsAct,thoughthatwastheverygroundofourdecision,andmakesanumberofdisingenuousstatementssuchasthat“ratherthanseekinginterlocutoryreviewintheNinthCircuit,SearsfiledanAllWritsAct,28U.S.C.§1651(‘AllWritsAct’)petitionintheclosedThorogoodcaseintheNorthernDistrictofIllinoisseekingtoenjointhepreviousunnoticedclassmembersfrombringingclassclaimselsewhere.”Searscouldnot appealtheCaliforniacourt’sorderbecauseitwasnotanappealableorder.Thepetitionignoresourpointthatclasscertific ationisimpropergiventhenatureoftheruststainsclaim,whichdoesnotpresent“commonissuesoflaworfact”thatcansupportaclassaction.ItignoresourpointthatMurray’ssuitisindeedacopycat.Itignoresourcriticismsofthetwodistrictcourtopinions.Itsaysthat“thePanel...orderedthedistrictjudgetoenjoinclassmembersfrompursuingcausesasaclassactionagainstSears,anywhere,”yetignoresthattheopinionisexplicitthatindividual claimsarenottobeenjoined.Evenclassactions“againstSears,anywhere”arepermitted,providedtheyarenotbasedontheoriesrejectedinour1 As he explains in the petition, “ “Whileitmaybethatsomenumber ofattorneyswhobringclassa ctionsseekmerelytofattentheirpocketsattheexpenseoftheir clients,counselhereincannotbecountedamongthem.Since1983—overthecourseofalmostfortyyears [actuallyjust27years]—Plaintiff’scounselhas takenontoughbattlesagainstdifficultdefendantsondifficultissuesinclass,derivative,andpublicinterestcases....Moreo ver,Ihaverunforpublicoffice,always,onplatformsthatchallengedthestatusquoinourstate,andwhenIhavesucceeded financially,Ihaveusedthatforthepublicgoodaswell....In2009,Ifoundedandfundedthe CenterforOpenGovernm entlawclinicatIITChicagoKentCollegeofLaw,whichuniquelyassistsindividualsingainingaccesst otheirgovernment,generallyundertheFreedomofInformationandOpenMeetingsActs,wherecurrentlysix casesareproceeding”(emphasisinoriginal).3

decision.AnditignoresthatthepressuresonSearstosettleinthefaceofKrislov’sonslaughtoflitigationamountstoirreparableharm;weexplainedthat“thereisnowayinwhichSearscanrecouptheexpenseofrespondingtoMurray’sextravagantdiscoveryrequestsandoffilingpreclusiondefensesagainstduplicativeclassactionsinotherstates.Theharmitfacesfromthedenialoftheinjunctionisirreparableanditsremedyatlawagainstsettlementextortionnonexistent.”Thepetitionstates,withoutsubstantiation,that“thiscasewasbroughtbyahighlyeducatedmetallurgicengineer,StevenThorogood(‘Thorogood’),whocarefullyevaluatedhisclaimsagainstSearsbeforetakingaction.”Evenifthisistrue,thereisnosuggestionthatMurray,thenamedplaintiffinthecopycataction,hasanyrelevantbackgroundthatmighthavehelpedhimto“carefullyevaluatehisclaimsagainstSearsbeforetakingaction.”ThefocusofKrislov’sconcernislanguageinouropinionthatheregardsasadhominem.Heinsiststhat“thetoneandrampantmischaracterizationsoftheopinionmustbemodifiedeveniftheconclusionremains,becausetheopinionunjustifiablyportraysthecaseasmeritless,lawyerdrivenlitigation,anaccusationthoroughlybeliedbytherecordandthedistinguishedcareersofthelawyersinvolved....[T]hemeritsoftheclaims,thesuitabilityofcertifyingthecaseasaclassactionandtherefusaltoenjoinplaintiff’sCaliforniaonlystateclassactionhavebeenlegitimizedbytwoindependentfederaldistrictcourts.Thus,todisparagethemeritsorprofessionalmotivationsofthepartiesortheircounsel[i.e.,KrislovandBoling]isunjustifiedandmustbecorrectedbecauseitrunsafouloftheCodeofConductforUnitedStatesJudges.”Hisspecificconcerniswiththephrases“settlementextortion,”“nearfrivolous,”“pugnacious,”“pertinacioustoafault,”and“anuisance”thatappearintheopinion.Heignorestheevidenceandanalysisthatsupportsthesecharacterizations,andsimilarcharacterizationsbyotherjudges,andcommentators,concernedwithclassactionsthatarebelievedtobeabusive.Heignorestherightandindeedthedutyofjudgestocriticizelawyerswhotrythepatienceofothermembersofthebar,andthecourts.Krislovcriticizeswhathecalls“thePanel’schoicetopersonallyattackPlaintiff’scounsel[himself],inlieuofrecognizingthesounddiscretionoftwo federaldistrictcourts”(emphasisinoriginal).TheopinionexplainsthatthedistrictjudgeinIllinois,whosedecisionwewerereviewing,appearedtohaveoverlookingseveralrelevantconsiderations:“Heseemstohavebelievedthatpleadingresjudicataorcollateralestoppelalways providesadequatereliefagainstvexatiouslitigation.Thiscaseshowsthatitdoesnot,asdothesimilarcaseswecitedearlierandthecasesthatsaythatenjoiningvexatiouslitigationispreferabletotheharassmentofanexpensive,timeconsumingproceduretoprove[adefendant’s]resjudicataorestoppelclaimsinanothercourt.”AndthedistrictjudgeinCalifornia—whoseruling,torepeat,cannotbeappealed,eventhough,ifitstands,itforcesSearstoengageincostlydiscovery,asemphasizedbyBolinginurgingasettlementfavorabletotheclass—wasconfusedabouttherecord,asouropinionexplains.Krislovsaysthat“Sears’resorttothisCircuitforthepreclusiveshotistransparentforumshopping,lookingforthisCourt’sderisoryviewoftheclaimtoinfluenceitintobindingallclassmembersnationwide,becausetheNinthCircuit’sstandardsaredecidedlymorefavorabletoplaintiffs’claims.”Thisiswhatisknownaschutzpah ,sinceKrislovbroughthiscopycatsuitinCaliforniabecause,ashesaysunguardedly,“theNinthCircuit’sstandardsaredecidedlymore4

favorabletoplaintiffsclaims.”Searswasnotengagedinforumshopping.Onlyoneforumofferedthepossibilityofrelief.BecauseitcouldnotappealtheinterlocutoryorderoftheCaliforniajudge,theonlyplacetogotoseekreliefagainstbeingsuedalloverthecountryonfrivolousgroundsaimedatsecuringasettlement wasthedistrictcourtinIllinois.Krislovsays:“IfthelogicofRhonePoulenc [ InreRhonePoulencRorer,Inc .,51F.3d1293(7thCir.1995)]remainsaccurate,thenSearshadanadequateremedytoseekmandamusintheNinthCircuit,overtheNorthernDistrictofCalifornia’sdenialofDefendants’MotiontoStrike.”Thismissesthepoint:theAllWritsActpermitscourtstoissueinjunctiverelieftoprotectandeffectuatetheirownjudgments,sothatwinningpartieswillnot beforcedtolitigateadefenseofcollateralestoppel(orseekmandamusorders)ineverysubsequentforuminwhichtheyareharassedwiththesamelegalclaimuntiltheycry“Uncle!”Hesays:“Justasthecourtisentitledtobetreatedwiththerespect[ sic ]bylitigantsandtheircounsel,litigantsandtheircounselareentitledtobetreatedwithrespectbythecourt.”Well,hedoesn’ttreatuswithmuchrespect,statinginthepetitionforrehearingenbancthathefiledafterourfirstopinion:“thePanel’sopinionreadsmorelikeapostinginitsauthor’swellknownblog(www.beckerposnerblog.com),declaringitsviewofclassactions,mischaracterizingclasscounselasbeinginherentlycorruptedbytheinducementtoselloutitsclients’smallclaimsforitsownfeesobtainedthroughacollusivesettlement....[T]hepanelopinionblatantlyignoredtherecordevidenceandsubstitutedtheauthoringjudge’spersonaleconomictheoriesandbaselessfactualdeclarationsforthedevelopedrecord.”Andinhiscurrentpetitionhesaysthat“theCourt’sclearlyprejudicedopinionpresentsanunsupported,opedstyleportrayalofclassactionattorneysthatpaintswithabrushsobroadthatitdemonizesallclassactionattorneysasinherently motivatedtosellouttheirclientsforsmallrecoveries,toobtainlargefees,andgoeswelloverthetopinitscharacterizationofundersignedcounsel’sactionsandmotivation.Moreover,itappearstorunafoulofCanon3oftheCodeofConductforUnitedStatesJudges....Indeed,thePanel’sroleastheselfassuredSimonCowelloftheCircuitsdemeansnotjustus,buttheCourtaswell”(emphasisinoriginal).(Who,youask,isSimonCowell?Hewasthecantankerousjudgeon“AmericanIdol.”Seewww.youtube.com/watch?v=a3cTEQFP3VQ(visitedDec.1,2010).)AttorneyKrislovsaysthatthepanel’s“exceedinglyfacileapproachdisregardsthehighlydesirableroleofpersuasiveauthorityanditsunderlyingreasoningintheAmericanlegalsystem....Intherealworld,whicheverwaythefirstdecisiongoesstandsassomepersuasiveauthorityforsubsequentones.Cumulatively,thedecisionaltideofopinionswouldtrendtowardonecompetingtheoryuntiloneortheotherwasultimatelyacceptedaseitherconsensus,orsimplycorrect,orcorrectinthatjurisdiction.”Translated,thismeansthatKrislov’sstrategyistobringidenticalorsimilarsuitsindifferentjurisdictionsuntilhewinsone,thenusethejudgmentinthatsuitasresjudicataorcollateralestoppelinthenextsuit,andthenext,andthenext,untilSearsgivesup.Aswenotedinouropinion,Krislovwantedajudgment(ratherthandismissalongroundsofmootness,SearshavingofferedanuisancesettlementwellinexcessofthemaximumamountofmoneythatThorogood’sindividualclaimwasworth)sothathecoulduseittoblockSearsfromdefendingthenextsuit,whichturnedouttobetheCaliforniasuit.5

“Zestingtosmeartheplaintiff’scounsel,”saysKrislov,”thePanel’scharacterizationoftheletter[thereferenceistococounselBoling’slettertoSears,whichwereprintedasanappendixtoouropinion]as‘settlementextortion’lackssupportintherecord,sameasthePanelauthor’sdeclarationthatMr.Boling’s‘olivebranch’lettersoughttosellouttheclass....Thelettersimplydetailsthatthecaseisgoingforward,discoverywilllikelyproducemoredamagingevidence,whichcouldgenerategreaterdamages,andplaintiffsareofferingan‘olivebranch,’exploringdefendants’appetitefornegotiatinganagreedresolution.Thereisnothingimplyingasellout.Instead,theletterproposesdiscussingasolutionthatwouldbeinthebestinterestofbothsides—preciselywhatcounselareoftendirectedtodobycourtsalloverthecountry.”Thisisajoke.Bothpartiesknowtheletterisademandforfavorablesettlementterms.TheletteritselfcontradictsKrislov’sclaim.Itdeclaresthat“discoverywilllikelyproducemoredamagingevidence,whichcouldgenerategreaterdamages....[I]fplaintiffissuccessfulonamotionforclasscertification,thecourtasthegatekeeperwilldemandamoresignificantrecoveryforresolution.”Krislovisconcernedwithharshlanguageinouropinion,butoverstatesthecasewhenhedecries“characterizationofplaintiffclassactionlawyersasinherentlycorruptandmotivatedprimarilytosellouttheclassinordertogainlargefees.”WhatwesaidwasthatthestructureofclassactionsunderRule23ofthefederalrulesgivesclassactionlawyersanincentive tonegotiatesettlementsthatenrichthemselvesbutgivescantrewardtoclassmembers,whileatthesametimetheburdenofrespondingtoclassplaintiffs’discoverydemandsgivesdefendantsanincentive toagreetoearlysettlementthatmaytreattheclassactionlawyersbetterthantheclass.Classactionattorneyshavean“inherentmotivation”toenrichthemselvesattheexpenseoftheclass(andwiththeconnivanceofdefendants),butmotivationisnotasynonymforaction;anyactualcorruptionorsellingoutisgaugedcasebycase.TheBolingletterissomeindicationthatthepresentcaseissuchacase.Thecriticismsinouropinionofthetacticsemployedbysomeclassactionlawyersarenotcriticismsmadebyjudgesalone,letalonebyjudgesoftheSeventhCircuitaloneormembersofthispanelalone.Ouropiniongavesomeexamples:“Thedefendantwantstominimizeoutflowofexpendituresandtheclasscounselwantstoincreaseinflowofattorneys’fees.Bothcanachievetheirgoalsiftheycolludetosacrificetheinterestsoftheclass.”ChristopherR.Leslie,“TheSignificanceofSilence:CollectiveActionProblemsandClassActionSettlements,”59Fla.L.Rev.71,79–81(2007)(footnoteomitted);seealsoJohnC.Coffee,Jr.,“LitigationGovernance:TakingAccountabilitySeriously,”110Colum.L.Rev.288,326–27(2010).TwooftheexampleswereopinionsbyJudgeHenryFriendly,theveryrespectedSecondCircuitjudge:Saylorv.Lindsley ,456F.2d896,900–01(2dCir.1972);AlleghanyCorp.v.Kirby ,333F.2d327,347(2dCir.1964)(dissentingopinion).Wegaveadditionalexamplesinourfirstopinionintheclothesdryerlitigation:Parkerv.TimeWarnerEntertainmentCo.,L.P .,331F.3d13,22(2dCir.2003);

### Newtonv.MerrillLynch,Pierce,Fenner&Smith,Inc

.,259F.3d154,165–68(3dCir.2001);JeffreyW.Stempel,“ClassActionsandLimitedVision,”83Wash.U.L.Q. 1127,1213–14(2005);BruceL.Hay&DavidRosenberg,“’Sweetheart’and‘Blackmail’SettlementsinClassActions,”75NotreDameL.Rev.1377,1389–92(2000);BruceL.Hay,“AsymmetricRewards:WhyClassActions(May)SettleforTooLittle,”48HastingsL.J. 479,485–89(1997);SusanP.Koniak&GeorgeM.Cohen,“UnderCloakofSettlement,”82Va.L.Rev .1051,1053–57(1996)(describing theclassactionas“lawyer6

selfdealingonagrandscale,”id .at1053);JonathanR.Macey&GeoffreyP.Miller,“ThePlaintiff’sAttorney’sRoleinClassActionandDerivativeLitigation,”58U.Chi.L.Rev .1,22–26(1991).Andthecriticismscanbefoundinotheropinionsofthiscourt.See,e.g.,

### Szabov.BridgeportMachines,Inc .,249F.3d672(7thCir.2001);Blairv.EquifaxCheckServices,Inc

.,181F.3d832,834(7thCir.1999);Vollmerv.Selden ,350F.3d656,660(7thCir.2003);InreRhonePoulencRorer,Inc

.,supra ,51F.3dat1298–99.Wantmore?Thereisplentymore,includingreferencesinSupremeCourtaswellascourtofappealsopinionstothedangerofcollusionbetweenclassactionlawyersanddefendants’lawyers.StoneridgeInvestmentPartners,LLCv.ScientificAtlanta ,552U.S.148,163–64(2008);Ortizv.FibreboardCorp. ,527U.S.815,852–53(1999);AmChemProducts,Inc.v.Windsor ,521U.S.591,621–22(1997);BlueChipStampsv.ManorDrugStores ,421U.S.723,740–41(1975);Sullivanv.DBInvestments,Inc. ,613F.3d134,149–50(3dCir.2010);InreGeneralMotorsCorp.PickUpTruckFuelTankProductsLiabilityLitigation ,55F.3d768,802(3dCir.1995);Weinbergerv.GreatNorthernNekoosaCorp. ,925F.2d518,524(1stCir.1991);InreAgentOrangeProductLiabilityLitigation ,818F.2d216,223–25(2dCir.1987);Piambinov.Bailey ,757F.2d1112,1139andn.68(11thCir.1985);Sheltonv.Pargo,Inc. ,582F.2d1298,1306–07(4thCir.1978);Pettwayv.AmericanCastIronPipeCo. ,576F.2d1157,1169(5thCir.1978).Therearealsoreferencestosettlementextortion:JonesMotorCo.v.Holtkamp,Liese, Beckemeier&Childress,P.C. ,197F.3d1190,1193(7thCir.1999); Byrnev.Nezhat ,261F.3d1075,1129 –31(11thCir.2001);Duhaimev.JohnHancockMutualLifeIns.Co.

,183F.3d1,6–7(1stCir.1999).Neitherthejudgesonthispanelnorotherfederaljudgessofarasweareawarehavedeniedthattheclassactionisaworthwhiledevice,andindeedisindispensableforthelitigationofmanymeritoriousclaims.Butlikemanyothergoodthingsitissubjecttoabuse.Ithasbeenabusedinthestainlesssteelclothesdryerlitigation.Thepetitionforrehearingis denied.Nojudgeofthiscourtinregularactiveservicehavingrequestedavoteonthepetitionforrehearingenbanc,rehearingenbancisalsodenied.