Fee-Chasing Attorneys Get Tongue-Lashing From 7th Cir.

By Perry Cooper

The Seventh Circuit railed against abusive class actions Dec. 20 when it affirmed the dismissal of a property dispute against the city of Chicago ( Manistee Apartments LLC v. City of Chicago , 2016 BL 422813, 7th Cir., No. 15-3113, 12/20/16 ).

The company wasn’t actually interested in recovering its $1,400 from the city; instead the suit was driven by lawyers seeking a large class action payout, Judge Daniel A. Manion wrote for the U.S. Court of Appeals for the Seventh Circuit.

“Beyond addressing the legal claims before us as we would in any ordinary case, we must frankly identify situations where we suspect the lawyers, rather than the claimants, are the only potential beneficiaries,” the court said. “This is one such case.”

Real Estate Deal

Chicago won a default judgment of $3,540 against Manistee Apartments LLC for violations of city code. When Manistee didn’t pay, the city imposed a lien against its real estate.

When Manistee wanted to sell the building, it sought to settle its bill with the city. The city demanded $5,655 for the original lien plus $720 in interest and $1,395 in collection costs and attorneys’ fees.

Manistee paid the full amount, but contested the $1,395 amount. Then it filed a class action against the city for violating its property interest without due process.

The trial court dismissed the suit and the Seventh Circuit affirmed. It found that Manistee voluntarily paid the city, which isn’t a property deprivation.

The court said it is unlikely that there were many other property owners in Manistee’s position, arguing Manistee just wanted to get a settlement from the city before class certification.

Judges Richard A. Posner and Joel M. Flaum joined the opinion.

Barone Law Group, Jenkins Law Group P.C., and John Robel P.C. represented Manistee.

The Office of the Corporation Counsel and the City of Chicago Law Department represented the city.

To contact the reporter on this story: Perry Cooper in Washington at pcooper@bna.com

To contact the editor responsible for this story: Steven Patrick at spatrick@bna.com

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