Muro v. Target Corp.

Decision Date31 August 2009
Docket NumberNo. 08-1256.,08-1256.
Citation580 F.3d 485
PartiesChristine MURO, Plaintiff-Appellant, v. TARGET CORPORATION, et al., Defendants-Appellees.
CourtU.S. Court of Appeals — Seventh Circuit

David J. Piell, Attorney (argued), Buffalo Grove, IL, for Plaintiff-Appellant.

Brian Melendez, Attorney (argued), Faegre & Benson, Minneapolis, MN, for Defendants-Appellees.

Before RIPPLE, ROVNER and EVANS, Circuit Judges.

RIPPLE, Circuit Judge.

After receiving an unsolicited Target Visa card in the mail, Christine Muro brought this action, on behalf of herself and all others similarly situated, against Target Corporation, Target National Bank and Target Receivables Corporation (collectively "Target"). Ms. Muro alleged that Target had violated sections 127 and 132 of the Truth in Lending Act ("TILA"), 15 U.S.C. §§ 1637(a) & (c), 1642.1 The district court granted summary judgment in favor of Target and denied Ms. Muro's motion for class certification of her TILA claims. For the reasons stated in this opinion, we affirm the judgment of the district court.


The basic facts of this case are straightforward. In light of the procedural posture of this case, we must construe them in the light most favorable to Ms. Muro. See Stephens v. Erickson, 569 F.3d 779, 786 (7th Cir.2009).

Under its Autosubstitution Program, Target mailed unsolicited Visa Cards, along with an updated credit agreement, to Target Guest Card holders.2 Guest Card holders had the option of activating their Visa Cards upon receipt. Once a Visa Card was activated, the corresponding Guest Card immediately was deactivated and any balance remaining on the Guest Card was transferred to the Visa Card.

Ms. Muro applied for and received a Guest Card on April 4, 1998. In December 1999, she paid the balance owed on her Guest Card and requested that her account be closed. She received no further correspondence from Target for nearly five years. In August 2004, however, Ms. Muro received an unsolicited Visa Card in the mail. She did not activate the Visa Card and did not incur any charges or fees associated with the card. She subsequently brought this action against Target on behalf of herself and all others similarly situated. The district court's treatment of each claim will be described in our discussion of that claim. In summary, Ms. Muro settled her claim under section 1642 of TILA, and the district court denied class certification on that claim. On the claims under section 1637 of TILA, the court granted summary judgment to Target and denied class certification.

A. The Section 1642 Claim

In Count I of her complaint, Ms. Muro alleged that the unsolicited issuance of Visa Cards to Guest Card holders violated section 1642 of TILA. This section provides, in pertinent part, that "[n]o credit card shall be issued except in response to a request or application therefor. This prohibition does not apply to the issuance of a credit card in renewal of, or in substitution for, an accepted credit card." 15 U.S.C. § 1642.

Ms. Muro brought her section 1642 claim on behalf of "[a]ll persons who were mailed a `Target VISA' card by Target without first requesting or applying for said card, including Target Guest Card cardholders who received a `Target VISA' without requesting a `Target VISA.'" R.6 at 2; R.102 at 21. The district court concluded that this proposed class included at least two distinct groups: Those who, like Ms. Muro, had cancelled their Target Guest Card or otherwise did not have an open Guest Card account prior to receiving a Visa Card,3 and those who held an open Guest Card account at the time they received the Visa Card. The district court concluded that, for a person with an open Guest Card account, the substitution of Visa Cards for Guest Cards did not violate section 1642. The court also held, however, that Ms. Muro's individual claim remained viable because she had alleged that she closed her Guest Card account prior to receiving a Visa Card.

The court then denied the motion for class certification on the section 1642 claim. The district court concluded that the class proposed by Ms. Muro should not be certified because Ms. Muro's claims were not typical of the claims of the proposed class; unlike most of the proposed class members, Ms. Muro had alleged that she had closed her Guest Card account.4 In the district court's view, the class that Ms. Muro would be capable of representing would consist of

[a]ll persons who were mailed a Target Visa Card without first requesting or applying for said card, and who did not at the time hold any active Target-branded credit card, including Target Guest Card holders who had cancelled their Guest Card[s] prior to issuance of the Visa Card.

R.102 at 21. The court determined, however, that certification of this alternative class also would be improper because Ms. Muro had failed to demonstrate that such a class was "so numerous that joinder of all members [was] impracticable." Williams v. Chartwell Fin. Servs., Ltd., 204 F.3d 748, 760 (7th Cir.2000) (citing Fed.R.Civ.P. 23(a)). Accordingly, the district court denied Ms. Muro's motion for class certification.

Ms. Muro subsequently settled her individual section 1642 claim, while reserving her right to appeal the class certification issue. The merits of Ms. Muro's claim, therefore, are not properly before us. Having accepted an offer of judgment, Ms. Muro has no cognizable interest in our evaluation of the district court's decision on that issue. The question of whether she nevertheless can appeal the district court's decision not to certify the proposed class is more complex; we now turn to that issue.


At the outset, we pause to make clear the narrow issue presented by this case. This case does not present the more frequently encountered situation that we confronted in Wiesmueller v. Kosobucki, 513 F.3d 784, 786 (7th Cir.2008). There, we noted that, if a plaintiff's individual claim becomes moot while his appeal of the denial of his motion for class certification is pending, that appeal is not moot "because unless and until the appellate court affirms the denial of the motion to certify a class, there may be people other than the plaintiff with a legally protected interest in the suit." Id. at 786. In Wiesmueller, the plaintiff's individual claim was mooted by intervening events, rather than the plaintiff's voluntary settlement of his claim; here, by contrast, we are confronted with the question of whether a named plaintiff in a putative class action can settle her own claim and still appeal the court's denial of her motion for class certification. The Supreme Court recognized that this was an open question in United States Parole Commission v. Geraghty, 445 U.S. 388, 404 n. 10, 100 S.Ct. 1202, 63 L.Ed.2d 479 (1980), and it declined to answer the question at that time.

In exploring this issue, our starting point must be the Supreme Court's decision in Geraghty. There, the Court made clear that the named plaintiff in a putative class action possesses, in effect, dual rights: (1) his personal substantive rights; and (2) his rights as a member of a class in the putative class action. As we have just mentioned, however, the Court did not answer, although it noted, the problem of whether a plaintiff who has settled his substantive claim should be permitted to appeal the court's refusal to certify the class.

The Court's decision in Deposit Guaranty National Bank v. Roper, 445 U.S. 326, 100 S.Ct. 1166, 63 L.Ed.2d 427 (1980), decided the same day as Geraghty, is our next guidepost. In that case, holders of credit cards issued by the defendant bank sued the bank for damages and sought to represent their own interests as well as those of a class of similarly situated customers. They claimed that the bank had violated the National Bank Act, 12 U.S.C. §§ 85 & 86, by charging the plaintiffs and the class they sought to represent usurious finance charges. The district court denied class certification on the ground that the class did not meet all of the requirements of Federal Rule of Civil Procedure 23(b)(3), but certified its ruling on that issue for discretionary appeal under 28 U.S.C. § 1292(b). The court of appeals, however, denied the card holders' interlocutory appeal. The bank then tendered to each named plaintiff the maximum amount that each would have recovered had the suit been successful. The card holders refused the tender. The district court nevertheless entered judgment for the card holders in the amount of the tender, which was later deposited in the court's registry, and dismissed the case.

The card holders then appealed the district court's refusal to certify the class. The court of appeals held that the case had not been mooted by the entry of judgment in favor of the card holders. The Supreme Court agreed. It held that neither the tender offer, nor the entry of judgment in the card holders' favor by the district court, prevented the card holders from appealing the adverse ruling on the class certification issue. Central to the Court's holding was its statement that, in order to appeal, a party must be able to demonstrate that it retains a stake in the appeal of the class certification requirement that is sufficiently concrete to satisfy the case-or-controversy requirement of Article III. Id. at 334, 100 S.Ct. 1166. Here, observed the Court, the card holders had such a concrete interest because they had asserted, throughout the litigation, a continuing individual interest in shifting part of the cost of litigation to the class members. Id. at 336, 100 S.Ct. 1166.

While Roper certainly sheds light on the path before us, it does not provide us with an answer to the precise question presented in this case: whether an individual who settles her individual claim nevertheless may appeal the denial of a motion for class certification. As our colleagues in the Fifth Circuit remarked in Dugas v. Trans...

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