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Judge reverses ATM fee class decertification; suggests any award go to charity

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The 7th Circuit Court of Appeals court didn’t exactly call an Indiana appeal a small-change case, but it suggested the few dollars each member of a class might receive could be more usefully given to charity.

David Hughes is the lead plaintiff in a class-action lawsuit over automated teller machines in two Indianapolis bars that he alleged failed to comply with a now-repealed federal law that required ATMs to carry a disclosure of fees both onscreen and on a sticker affixed to the machine. The sticker is no longer required, and the machines he used carried the onscreen disclosure of a $3 transaction fee.

Judge Jane Magnus-Stinson decertified the class in the U.S. District Court for the Southern District of Indiana, and Hughes appealed, winning a reversal Wednesday that at most could win for the class $10,000 under penalties for violation of the Electronic Funds Transfer Act, 15 U.S.C. § 1693b(d)(3). There are at least 2,700 people in the class in David Hughes v. Kore of Indiana Enterprise Inc., et al., 13-8018.

In reversing the District Court, Circuit Judge Richard Posner concluded for the panel, “We hold only that the judge’s opinion decertifying the class does not provide adequate grounds for her ruling. There may be such grounds. And our extended discussion of
how to distribute damages was not meant to imply that Kore must be liable in this case. For all we know, it has good defenses.”

But Posner wrote that the prospect of thousands of plaintiffs getting perhaps $3 raises questions about the process and remedies. “Since distribution of damages to the class members would provide no meaningful relief, the best solution may be what is called (with some imprecision) a “cy pres” decree. Such a decree awards to a charity the money that would otherwise go to the members of the class as damages, if distribution to the class members is infeasible.

“A foundation that receives $10,000 can use the money to do something to minimize violations of the Electronic Funds Transfer Act; as a practical matter, class members each given $3.57 cannot,” the court reasoned.

Kore, which owned and operated ATMs in bars including Average Joe’s in Broad Ripple and another establishment the court described as “said to be popular with college students” did not file a brief on appeal to the 7th Circuit, the opinion noted, and the court opined that perhaps that meant the defendants favored class status against the potential risk of individual suits.

But Posner mused that didn’t seem likely, noting no apparent individual claims had been filed. “Although one reason for the paucity of litigation may be unfamiliarity with the law, another may be the difficulty of finding a lawyer willing to handle an individual suit in which the stakes are $100 or an improbable maximum of $1000,” he wrote.

“But what is a reasonable attorney’s fee for obtaining a $100 judgment? More than one might think, if the judge thought that the suit had broadcast a needed warning about compliance with the Electronic Funds Transfer Act (albeit the specific provision that Kore is charged with violating has been repealed); but enough to interest a competent lawyer? The paucity of litigation suggests not.”


 

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  1. Bob Leonard killed two people named Jennifer and Dion Longworth. There were no Smiths involved.

  2. Being on this journey from the beginning has convinced me the justice system really doesn't care about the welfare of the child. The trial court judge knew the child belonged with the mother. The father having total disregard for the rules of the court. Not only did this cost the mother and child valuable time together but thousands in legal fees. When the child was with the father the mother paid her child support. When the child was finally with the right parent somehow the father got away without having to pay one penny of child support. He had to be in control. Since he withheld all information regarding the child's welfare he put her in harms way. Mother took the child to the doctor when she got sick and was totally embarrassed she knew nothing regarding the medical information especially the allergies, The mother texted the father (from the doctors office) and he replied call his attorney. To me this doesn't seem like a concerned father. Seeing the child upset when she had to go back to the father. What upset me the most was finding out the child sleeps with him. Sometimes in the nude. Maybe I don't understand all the rules of the law but I thought this was also morally wrong. A concerned parent would allow the child to finish the school year. Say goodbye to her friends. It saddens me to know the child will not have contact with the sisters, aunts, uncles and the 87 year old grandfather. He didn't allow it before. Only the mother is allowed to talk to the child. I don't think now will be any different. I hope the decision the courts made would've been the same one if this was a member of their family. Someday this child will end up in therapy if allowed to remain with the father.

  3. Ok attorney Straw ... if that be a good idea ... And I am not saying it is ... but if it were ... would that be ripe prior to her suffering an embarrassing remand from the Seventh? Seems more than a tad premature here soldier. One putting on the armor should not boast liked one taking it off.

  4. The judge thinks that she is so cute to deny jurisdiction, but without jurisdiction, she loses her immunity. She did not give me any due process hearing or any discovery, like the Middlesex case provided for that lawyer. Because she has refused to protect me and she has no immunity because she rejected jurisdiction, I am now suing her in her district.

  5. Sam Bradbury was never a resident of Lafayette he lived in rural Tippecanoe County, Thats an error.

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