Cooper v. Retrieval-Masters Creditors Bureau, Inc.

42 F.4th 688

Jack W. COOPER, Plaintiff,

v.RETRIEVAL-MASTERS CREDITORS BUREAU, INC., Defendant-Appellee,Appeal of: Celetha C. Chatman, Michael J. Wood, and Community Lawyers Group, Ltd., Appellants.

No. 18-2983

United States Court of Appeals, Seventh Circuit.

Argued January 19, 2022

Decided July 29, 2022

Celetha Chatman, Attorney, Community Lawyers LLC, Chicago, IL, Seth McCormick, Attorney, Great Lakes Consumer Law Firm, LLC, Chicago, IL, for Plaintiff Jack W. Cooper, and Appellant Community Lawyers Group, Ltd.

Celetha Chatman, Attorney, Community Lawyers LLC, Chicago, IL, for Appellant Celetha C. Chatman.

Michael J. Wood, Attorney, Community Lawyers LLC, Chicago, IL, for Appellant Michael J. Wood.

David Spears, Nick Reck, Attorneys, Spears & Imes, New York, NY, for Defendant-Appellee.

Before Wood, Hamilton, and Jackson-Akiwumi, Circuit Judges.

Hamilton, Circuit Judge.

This appeal challenges sanctions imposed under Federal Rule of Civil Procedure 11 and 28 U.S.C. § 1927. It is related to our decision today in No. 18-2358, an appeal in a separate civil action between the same parties, Cooper v. Retrieval-Masters Creditors Bureau, Inc. ( Cooper I ). In Cooper I , plaintiff Jack Cooper sued defendant Retrieval-Masters Creditors Bureau (RMCB) for violations of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq. While that case was pending, Cooper filed this separate lawsuit against RMCB asserting an additional violation of the FDCPA arising from the same debt that was the subject of Cooper I .

The district court dismissed this Cooper II case with prejudice on the theory that the new claims were improperly split from Cooper I . Cooper v. Retrieval-Masters Creditors Bureau, Inc. , No. 17-cv-773, 2017 WL 11350966 (N.D. Ill. Oct. 10, 2017). Pursuant to Rule 11 and 28 U.S.C. § 1927, the district court also sanctioned Cooper's counsel, Celetha Chatman and Michael Wood, and their firm, the Community Lawyers Group, Ltd., for filing a misleading complaint and engaging in a pattern of improper litigation practices. Cooper v. Retrieval-Masters Creditors Bureau, Inc. , No. 17-cv-773, 2018 WL 8898621 (N.D. Ill. Aug. 14, 2018). Cooper's counsel have appealed the district court's sanctions order. We reverse.

I. Facts and Procedural Background

A. The Case on the Merits

In March 2016, plaintiff Jack Cooper sued RMCB after he received a letter from RMCB in February 2016 seeking to collect a consumer debt. Cooper alleged that the letter violated the FDCPA by falsely threatening to report his debt to credit bureaus. See 15 U.S.C. § 1692e(5) & (10). While that matter was pending, Cooper filed this separate action against RMCB in January 2017 claiming additional violations of the FDCPA arising from the same debt. The complaint in Cooper II alleged that, after Cooper I was filed and while it was pending, RMCB had misrepresented the amount of his debt and attempted to collect a fee that was not authorized by law or any agreement in violation of § 1692e(2)(a) & (10) and § 1692f(1). Cooper's complaint asserted that he visited RMCB's website in December 2016 and that the website included a notice that individuals who made payments by credit card or online had to pay a $4.95 "convenience fee."

RMCB moved to dismiss the Cooper II complaint, arguing both that it was improper claim splitting and that Cooper lacked standing to sue. The court granted RMCB's motion, reasoning that Cooper had improperly split his claims against RMCB over its misleading debt collection activities and there was "no good reason" to allow Cooper to continue with the second suit arising from the same dispute in Cooper I . Cooper II , 2018 WL 8898621, at *2. As a result, the court entered a judgment dismissing the action with prejudice. Cooper did not appeal that judgment.

B. Sanctions Decision

After winning that judgment on the merits, RMCB moved for sanctions under Federal Rule of Civil Procedure 11 and 28 U.S.C. § 1927, and for a fee award under 15 U.S.C. § 1692k(a)(3). RMCB contended that it was entitled to the fees and costs of defending against Cooper II because the suit involved unreasonable claim splitting and was based on false allegations. The court granted RMCB's motion in part and sanctioned Celetha Chatman, Michael Wood, and their firm, the Community Lawyers Group, Ltd., holding them jointly and severally liable. Cooper II , 2018 WL 8898621, at *1. The court (Judge Shah) ordered the sanctioned attorneys to pay $7,888.13, which was the sum of the attorney fees and costs awarded to Cooper and these same attorneys by Judge Feinerman in Cooper I . Id. at *3.

Judge Shah gave three reasons for his decision to impose sanctions in Cooper II . First, he said that attorneys Chatman and Wood included misleading allegations in the complaint. Second, he found that Chatman and Wood engaged in a regular practice of claim splitting. As evidence, the court cited not only the claim splitting between Cooper I and Cooper II but also several other lawsuits Chatman and Wood had filed on behalf of other plaintiffs that the court determined involved claim splitting. Third, the court found that Chatman and Wood consistently failed to follow the Northern District of Illinois's procedures for identifying related cases.

II. Appellate Jurisdiction

Before reaching the merits of this appeal, we must first address our appellate jurisdiction. Under Federal Rule of Appellate Procedure 3(a)(1), a party may appeal a district court's decision as of right "only by filing a notice of appeal." The notice of appeal must "specify the party or parties taking the appeal by naming each one in the caption or body of the notice." Fed. R. App. P. 3(c)(1)(A). Rule 3's requirements for the contents of a notice of appeal are jurisdictional and must be satisfied before an appeals court can review a case. Smith v. Barry , 502 U.S. 244, 248, 112 S.Ct. 678, 116 L.Ed.2d 678 (1992). At the same time, however, courts do not dismiss an appeal because of "imperfections" in the notice of appeal "where no genuine doubt exists about who is appealing, from what judgment, to which appellate court." Becker v. Montgomery , 532 U.S. 757, 767, 121 S.Ct. 1801, 149 L.Ed.2d 983 (2001). In other words, we will not dismiss an appeal "for failure to name a party whose intent to appeal is otherwise clear from the notice." Fed. R. App. P. 3(c)(7).

On its face, the notice of appeal here leaves a lot to be desired. Cooper's counsel, Chatman and Wood and their firm, assert that they are the parties appealing, but none are named in the caption or body of the notice of appeal. Because of this deficiency, RMCB argues, we do not have jurisdiction over this appeal.

In Foreman v. Wadsworth , 844 F.3d 620 (7th Cir. 2016), we considered whether the failure to name the plaintiff's counsel in the notice of appeal precluded our jurisdiction over the counsel's own challenges to the district court's decision, which had censured him. Id. at 625. The counsel in Foreman was not named in either the caption or body of the notice of appeal, but the body said in part that it presented an appeal of the district court's order censuring the plaintiff's counsel. Id. at 625–26. We exercised jurisdiction over the counsel's appeal because he was the only party who had an interest in the censure order. Id. at 626. As a result, his intent to appeal was sufficiently "otherwise clear from the notice," so that the failure to include his name was harmless. Id. , quoting what is now Fed. R. App. P. 3(c)(7).

As in Foreman , the caption and body of the notice of appeal do not mention the attorneys or their firm. The caption refers to plaintiff Jack Cooper "on behalf of himself [a]nd all others similarly situated." Also, the body of the notice says that "plaintiff Jack Cooper, appeals" the district court's judgment granting RMCB's motion for relief under Rule 11 and § 1927. Chatman, Wood, and their firm are not mentioned in the caption or the body of the notice of appeal.

Despite these deficiencies, we conclude under Foreman and Rule 3(c)(7) that we have jurisdiction to review the district court's sanctions order. The sanctions order applied to Chatman, Wood, and their law firm, the Community Lawyers Group, Ltd., but not to plaintiff Cooper. No one other than the attorneys and their firm has an interest in that order. Even though their names are not included in the caption or body of the notice of appeal, their intentions to appeal are otherwise evident from the notice.

There is a further complication regarding attorney Wood. He did not file or sign the notice of appeal. See Halim v. Great Gatsby's Auction Gallery, Inc. , 516 F.3d 557, 564 (7th Cir. 2008) (declining to exercise jurisdiction over the plaintiff's counsel's apparent challenge to the sanctions order against him where he was not named in the notice of appeal and did not take part in filing the notice or the appeal itself); cf. Retail Flooring Dealers of America, Inc. v. Beaulieu of America, LLC , 339 F.3d 1146, 1149 (9th Cir. 2003) (retaining jurisdiction over plaintiff's counsel's appeal of the sanctions order against him in part because his name appeared in the notice as the counsel for the plaintiff and he signed and filed the notice of appeal).

Although Wood did not file or sign this notice of appeal, the joint and several liability imposed by the district court's order resolves this complication. In tort law, when an injury results from the actions of several parties, "the entire liability attaches jointly and severally, each tortfeasor being responsible for the whole amount ... with a corresponding right to sue the other tortfeasors for contribution." Stifle v. Marathon Petroleum Co. , 876 F.2d 552, 556 (7th Cir. 1989) ; see also Schadel v. Iowa Interstate Railroad , 381 F.3d 671, 677 (7th Cir. 2004). Applied here, if we were to limit our jurisdiction to Chatman, who filed and signed the appeal on behalf of Cooper, and who identified herself as an attorney with Community Lawyers Group, the appeal might...