Laura Mullen v. GLV, Inc. ( 2022 )

In the
United States Court of Appeals
For the Seventh Circuit
____________________
No. 20-3021
LAURA MULLEN,
Plaintiff-Appellant,
v.
GLV, INC.; RICK BUTLER; and CHERYL BUTLER,
Defendants-Appellees.
____________________
Appeal from the United States District Court for the
Northern District of Illinois, Eastern Division.
No. 18 C 1465 — Matthew F. Kennelly, Judge.
____________________
ARGUED OCTOBER 25, 2021 — DECIDED JUNE 23, 2022
____________________
Before EASTERBROOK, ROVNER, and WOOD, Circuit Judges.
EASTERBROOK, Circuit Judge. This suit has dwindled away.
It began as a nationwide class action on behalf of all custom-
ers of GLV, which operates in several states as Sports Perfor-
mance Volleyball Club. The district court certified a class lim-
ited to customers of GLV’s locations in Illinois. 330 F.R.D. 155(N.D. Ill. 2019). Later the judge concluded that Laura Mullen,
who asserts that GLV commi[ed fraud, is an unsuitable rep-
resentative of that class and invited her to find a substitute.
2 No. 20-3021
She didn’t. Although the class was never decertified, Mullen’s
counsel conceded at argument that this is now an individual
rather than a representative suit. She lost because the judge
concluded that she had not been injured—which made her a
bad representative to boot. 488 F. Supp. 3d 695 (N.D. Ill. 2020);
334 F.R.D. 656 (N.D. Ill. 2020). See also TransUnion LLC v.
Ramirez, 141 S. Ct. 2190 (2021) (injury is essential to recovery
in class litigation). Mullen also has dropped many of the sub-
stantive theories she presented in the district court.
This suit’s fade-out after the fashion of the Cheshire Cat
raised jurisdictional questions, because all litigants are citi-
zens of Illinois, the claim rests on state law, and the remaining
stakes are modest. The sole asserted basis of federal jurisdic-
tion is the Class Action Fairness Act, which applies to class
actions with more than 100 class members, stakes exceeding
$5 million, and minimal diversity of citizenship. 28 U.S.C.
§1332(d)(2). But when the claim is predominantly on behalf of
citizens of a single state, a district court often may or must
decline to exercise that jurisdiction. Given the class definition,
which is limited to customers who purchased services in Illi-
nois, we wondered whether these limitations apply. The dis-
trict court did not discuss the possibility, and the parties ig-
nored it, so we ordered the filing of supplemental briefs.
Section 1332(d)(4) says that “[a] district court shall decline
to exercise jurisdiction” when more than two-thirds of the
proposed class members “are citizens of the State in which the
action was originally filed” and other conditions are met.
“Shall” is a mandatory term, especially when contrasted with
§1332(d)(3), which says that district courts “may … decline to
exercise jurisdiction” in certain circumstances. Still, both
(d)(3) and (d)(4) say “decline to exercise jurisdiction”. These
No. 20-3021 3
subsections address how the jurisdiction granted by
§1332(d)(2) should be managed. This makes them more like
abstention doctrines than limitations on subject-ma[er juris-
diction. See Morrison v. YTB International, Inc., 649 F.3d 533,
536 (7th Cir. 2011); Graphic Communications Union v. CVS Care-
mark Corp., 636 F.3d 971, 973 (8th Cir. 2011). And, because they
are abstention rules, they need not necessarily be enforced by
a court of appeals on its own, when the parties have over-
looked them.
That they can be enforced without a request by a litigant
follows from their classification as abstention doctrines. The
Supreme Court has held that abstention “may be raised by the
court sua sponte.” BelloIi v. Baird, 428 U.S. 132, 143 n.10 (1976).
See also International College of Surgeons v. Chicago, 153 F.3d
356, 360–61 (7th Cir. 1998); Charles Alan Wright et al.,
17A Federal Practice and Procedure §4243 at 360 (“The court
may decide on its own motion to abstain”), §4245 at 411 (3d
ed. 2007).
As it happens, however, the litigation depicted in the ap-
pellate briefs is as the district judge shaped it—that is, as a
one-state class (with perhaps some people who drove into Il-
linois for volleyball, but surely more than two-thirds citizens
of Illinois). The initial pleading asked the district court to cer-
tify a national class, and perhaps half of GLV’s business is con-
ducted outside Illinois. Jurisdiction depends on the state of
ma[ers when a suit begins. See, e.g., Johnson v. WaIenbarger,
361 F.3d 991, 993 (7th Cir. 2004). This means that the require-
ments for jurisdiction under §1332(d)(2) have been satisfied.
See, e.g., In re Burlington Northern Santa Fe Ry., 606 F.3d 379,
381 (7th Cir. 2010).
4 No. 20-3021
If abstention under §1332(d)(4) also depends on the origi-
nal complaint, then it would be inappropriate to dismiss this
lawsuit. But does abstention follow the same date-of-filing
norm as the rule that controls the existence of subject-ma[er
jurisdiction, or does abstention depend on the class the dis-
trict judge certifies (if any) and other circumstances that may
change as the case proceeds? There appears to be a conflict
among the circuits on that question. Compare Cedar Lodge
Plantation, L.L.C. v. CSHV Fairway View I, L.L.C., 768 F.3d 425,
428 (5th Cir. 2014) (assessment of circumstances at the time
suit begins), with Kaufman v. Allstate New Jersey Insurance Co.,
561 F.3d 144 (3d Cir. 2009) (assessment of circumstances at the
time a court decides whether to abstain). Precisely because ab-
stention, even under §1332(d)(4), is discretionary when no
one asks the court to abstain, we mark this subject as one
needing a[ention—the parties did not address it, even in their
post-argument briefs—and move to decision on the merits.
Rick Butler is among the country’s most successful volley-
ball coaches. Literature and websites promoting Sports Per-
formance Volleyball Club (the Club) tout his success and as-
sert that other members of the staff are “extremely qualified.”
The Club’s teams and graduates have won multiple national
championships. Mullen does not contend that any of these
statements is false. Instead she observes that the Club’s pro-
motional material is silent about the conclusions of two bod-
ies—the Illinois Department of Children and Family Services
and USA Volleyball—that in 1981, 1984, and 1987 Butler had
sexual intercourse with at least three underage girls he was
training. The Department and USA Volleyball both found, in
reports issued in 1995, that the sexual relations were immoral
and unethical, whether or not they were lawful. Butler main-
tains that the girls were 18 and the encounters consensual.
No. 20-3021 5
Mullen contends that Illinois law requires GLV to notify all
potential customers that Butler is a rapist (as Mullen describes
the 1980s events), though he has never been charged with a
crime. Between 2013 and 2018 Mullen enrolled her two
daughters in programs conducted by the Club (some by But-
ler personally), and she maintains that she would not have
done this (or would not have paid as much) had the Club fea-
tured Butler’s sexual history with the same clarity as it trum-
pets the achievements of athletes he has trained.
Mullen lost on summary judgment, however, because she
concedes knowing about the Department’s and USA Volley-
ball’s findings. These reports were not buried in desk drawers
and forgo[en. They have been discussed in public repeatedly.
There is even a Wikipedia page devoted to the subject:
h[ps://en.wikipedia.org/wiki/Rick_Butler_sexual_abuse_al-
legations. The page links to many public airings of the accu-
sations and findings. Mullen herself participated in online
discussions of this topic, and she posted messages that boil
down to a view that the Club’s high-quality programs make
events of years ago less important. (No one has accused Butler
of any sexual misconduct since the 1980s, though he has
coached thousands of girls and women.) Mullen enrolled one
of her daughters in one of the Club’s programs in 2018, after
she filed this suit. All of this made Mullen a poor representa-
tive of parents who may have enrolled daughters in igno-
rance, the district judge thought, and ultimately scu[led Mul-
len’s substantive claims because she could not show injury.
Mullen replies that, although she knew about findings ad-
verse to Butler, she just didn’t believe them—and wasn’t pre-
pared to believe them unless Butler confessed on the Club’s
own website. Mullen does not say that she confronted Butler
6 No. 20-3021
or any employee of the Club with the findings and received a
false answer. Instead she says that Illinois law requires the
Club to proclaim Butler’s guilt as a condition of doing busi-
ness and that this principle entitles her to damages no ma[er
what she knew. The district judge was not persuaded, writing
that neither a state statute nor the common law requires a per-
son who disputes the accuracy of allegations made against
him to affirm his own guilt. The judge added that claims of
fraud, whether under a statute or the common law, require
proof of a guilty state of mind, and he found that the evidence
shows “that the Butlers subjectively believed that despite
Rick’s past, he was qualified to coach girls in volleyball, and
Mullen does not point to any evidence supporting a contrary
inference.” 488 F. Supp. 3d at 708.
Mullen’s principal argument on appeal is that, whatever
may be true for common-law claims, two statutes dispense
with both proof of scienter and any need to show detrimental
reliance on material omissions. She is right about the la[er
proposition. The Supreme Court of Illinois has held that the
Illinois Consumer Fraud Act does not require a plaintiff to
show reliance but does require the plaintiff to show that a
fraud proximately caused injury. Connick v. Suzuki Motor Co.,
174 Ill. 2d 482, 501 (1996). The need to show injury is in the
statute’s own text, for it limits recovery to loss that is “a result
of a violation of [the] Act.” 815 ILCS 505/10a(a). See also, e.g.,
Benson v. Fannie May Confections Brands, Inc., 944 F.3d 639, 647
(7th Cir. 2019); Zekman v. Direct American Marketers, Inc., 182
Ill. 2d 359, 372 (1998). That is equally true of the Illinois Phys-
ical Fitness Services Act, which provides a remedy for any
“customer injured by” a violation of the statute. 815 ILCS
645/11. Both laws thus require the plaintiff to show that she
was “in some manner, deceived” by a misrepresentation or
No. 20-3021 7
material omission. Oliveira v. Amoco Oil Co., 201 Ill. 2d 134, 155
(2002). A plaintiff can’t show deception just by contending
that she kept an open mind about formal findings of which
she was well aware; Mullen does not contend that she actually
believed the contrary of those findings, or that defendants ever
lied to her face, so she cannot show injury.
Like the district judge, we do not take any position on
whether the reports are right about what happened in the
1980s, let alone on whether Butler’s behavior was ethical even
if the girls had reached the age of 18. Nor do we decide
whether a parent who was unaware of the findings adverse to
Butler could state a claim under Illinois law. It is enough to
observe that no one who professed ignorance stepped in to
replace Mullen as a potential class representative. This class
was never decertified, but in practice this became an individ-
ual suit by Mullen alone. GLV’s other customers were not no-
tified and given an opportunity to opt out, so the judicial de-
cisions cannot affect them. Today’s outcome does not bind
any other person whose children a[ended the Club. On that
understanding, the judgment is
AFFIRMED.