Kasalo v. Harris
| Decision Date | 26 August 2011 |
| Docket Number | No. 10–2755.,10–2755. |
| Citation | 656 F.3d 557 |
| Court | U.S. Court of Appeals — Seventh Circuit |
| Parties | Mariana KASALO, Plaintiff–Appellant,v.HARRIS & HARRIS, LTD., Defendant–Appellee. |
OPINION TEXT STARTS HERE
John Nicolas Albukerk, Attorney, Law Office of Albukerk & Associates, James J. Gay (argued), Attorney, Law Office of James J. Gay, Chicago, IL, for Plaintiff–Appellant.Stephen R. Swofford (argued), Attorney, Hinshaw & Culbertson, Chicago, IL, for Defendant–Appellee.Before ROVNER, WOOD, and EVANS *, Circuit Judges.WOOD, Circuit Judge.
Mariana Kasalo sued Harris & Harris, Ltd., a collection agency, for violations of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq. The parties agree that Harris attempted to collect an overdue hospital bill from Kasalo in a way that violated the Act and that Kasalo is entitled at least to statutory damages of $1,000. See 15 U.S.C. § 1692k(a)(2)(A). A modest sum, to be sure, but one that Congress has deemed necessary to deter abusive collection practices and to compensate victims. Given the parties' agreement, one might expect that the case would have been resolved long ago; and, indeed, the parties made clear to the district court at the very start of the litigation that they intended to settle Kasalo's individual claim. Yet here we are with an appeal from the district court's decision to dismiss the case for want of prosecution. We have reached this point because Kasalo's lawyer endeavored to transform the case into a class action, and the district court, frustrated by this effort, grew impatient and dismissed the whole action. The district court chose this course without considering its other options for whittling down claims or resolving the case outright. We are sympathetic to its view of the proposed class action, but we conclude that its decision to dismiss for want of prosecution was an abuse of discretion.
Kasalo's lawyer, J. Nicolas Albukerk, saw the potential for a class action in Kasalo's assertion that Harris had engaged in unlawful debt collection. He included in Kasalo's complaint two class counts, which charged that various materials used by Harris to collect debts—specifically the company's envelopes and payment reminders—violated the harassment, false representation, and unfair practices provisions of the Act. See 15 U.S.C. §§ 1692d, 1692e, and 1692f. We have no way of knowing whether Albukerk included these class counts based on a genuine belief that they had merit or because he hoped for a more substantial settlement from Harris. What we do know is that the district court and Albukerk disagreed from the start about the possibility of moving the class claims forward.
After granting Harris an extension to answer the complaint, the district court held an initial status hearing. At that hearing the parties announced that they intended to settle Kasalo's individual claim; the district judge expressed doubt that it would ever certify a class; and Albukerk was granted a month to take depositions to explore whether either proposed class allegation was worth pursuing. After the hearing, Harris decided that rather than submit to depositions, it would provide Albukerk with affidavits and exhibits that it hoped would convince him that the unlawful effort to collect money from Kasalo was an aberration and that Harris's usual practices conformed to the Act.
At a second status hearing, the parties agreed that the first of the two class counts in the complaint was not going anywhere. Albukerk told the judge that he still thought that the second class count had promise, and he said that he had discovered a third class theory that he hoped to explore. Again the district court expressed deep skepticism that it could certify a class, and it said it was concerned that the class claims were so amorphous that class discovery would be unduly burdensome for Harris. But again the court gave Albukerk additional time. It ordered briefing on the class claims, so that it could see what shape they might take and what discovery Albukerk would need to assess their potential merit. “It's a preliminary class certification issue,” the district judge said, “I want to know where you're going before we get to doing discovery and then determining if you've discovered a class or not.” The court set a deadline of March 31, 2010, for Albukerk's brief, with Harris's response due two weeks after that.
On the due date for his brief, Albukerk filed a motion to amend the complaint to add a third class theory and a separate motion for an extension of time to file what he called a motion for class certification. The latter request apparently referred to the brief that the district court had ordered on the scope of class discovery. Importantly, the court had never said that this brief should also include a motion for class certification or even address that topic more comprehensively. The district court granted the motion to amend and the extension, setting a new due date of April 7, 2010, for Albukerk's brief.
Once again, Albukerk failed to meet the court's deadline. He explains to us now that he had become convinced by April 7 that both of the class claims included in the original complaint were dead in the water, presumably because the evidence Harris had provided convinced him that its effort to collect from Kasalo was a mistake and not a normal business practice. We cannot understand why Albukerk did not at least file a brief statement with the district court on April 7 explaining this, but he did not. Instead he decided unilaterally to focus on the new class claim from that point forward. He said nothing about this to the district court. Nothing happened in the case for nearly two months—no party filed any motion, and the district court did not enter any orders.
On May 21, 2010, the district court set a third status hearing for May 28. Five days later, the court reset the hearing for June 18 at 9:30 a.m. Two days before the hearing, the time was changed from 9:30 a.m. to 8:30 a.m. On the appointed day, Albukerk arrived in the courtroom 16 minutes late. Just before he got there, his case was called. Harris's attorney informed the judge that nothing had happened in the case, that Kasalo's individual claim had merit, and that Harris thought that none of the class claims should move forward. The court asked, “What do you suggest I do?” To which Harris's attorney answered, “Whatever you'd like to do.” Then the district court said:
That's the best suggestion I've had in a month, maybe even longer.
Well, I think what I'd like to do is dismiss this case for want of prosecution. We have given this plaintiff multiple opportunities to file his petition for class certification. As you say, he's quite adamant that this is a class action. He's filed it as such. He's failed to proceed. He's failed to advance the case, and he's not even here today, with no excuse or explanation given. The case is dismissed for want of prosecution.
When Albukerk showed up minutes later, the district court informed him that his case had just been dismissed. The court asked why a motion for class certification had not been filed, and Albukerk responded that he no longer thought the class counts in the original complaint had merit. He explained that he wished to pursue the third class theory that he had mentioned in connection with his motion to amend the complaint, though he admitted that he had yet to file the new complaint with the court. The district court decided that the dismissal would stand, and it told Albukerk to file a motion for reconsideration explaining why he had been dragging his feet if he wanted the case to continue. Albukerk did so promptly, but the district court denied the motion, saying,
Albukerk is guilty of poor lawyering, and the district court's exasperation with his dogged determination to invent a class action was justified. Nonetheless, we must conclude that the court dismissed the case as a whole too hastily. Albukerk's conduct, which related entirely to the class allegations, was not so inexcusable that dismissal for want of prosecution without any advance warning was appropriate. The district judge had more reasonable options before it for addressing Albukerk's unprofessional behavior. Contrary to the flippant suggestion made by Harris's attorney, the district courts do not have the power to do “whatever they'd like to do.”
Dismissal for want of prosecution “is an extraordinarily harsh sanction that should be used only in extreme situations, when there is a clear record of delay or contumacious conduct, or where other less drastic sanctions have proven unavailing.” Gabriel v. Hamlin, 514 F.3d 734, 736 (7th Cir.2008) (internal quotation marks and citations omitted). The appropriateness of this measure depends on all the circumstances of the case. See National Hockey League v. Metropolitan Hockey Club, 427 U.S. 639, 641–42, 96 S.Ct. 2778, 49 L.Ed.2d 747 (1976); Link v. Wabash R. Co., 370 U.S. 626, 633, 82 S.Ct. 1386, 8 L.Ed.2d 734 (1962). We have suggested a number of factors that are relevant to the district court's decision: the frequency of the plaintiff's failure to comply with deadlines; whether the responsibility for mistakes is attributable to the plaintiff herself or to the plaintiff's lawyer; the effect of the mistakes on the judge's calendar; the prejudice that the delay caused to the defendant; the merit of the suit; and the consequences of dismissal for the social objectives that the litigation represents. Aura Lamp & Lighting Inc. v. International Trading Corp., 325 F.3d 903, 908 (7th Cir.2003); Ball v. City of Chicago, 2 F.3d 752, 755 (7th Cir.1993).
Most of these factors weighed against dismissing Kasalo's individual case. Most strikingly,...
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