621 F. App'x 348
7th Cir.2015Background
- Wendy Adelson bought a Michigan home in 2006; her loan was later serviced by Ocwen and foreclosed on by HSBC after payment disputes.
- Adelson sued Ocwen and HSBC in Michigan state court raising only state-law claims (breach, wrongful foreclosure, consumer statutes, etc.).
- Defendants removed to federal court in Michigan and then obtained transfer to the MDL in the Northern District of Illinois (Ocwen MDL), where Adelson’s case was assigned and remand was denied; the case then sat largely dormant.
- A separate MDL class action against Ocwen was certified and settled; Adelson was a class member who did not opt out and received a late-fee credit; the settlement released many claims against Ocwen but expressly excepted foreclosure-related claims.
- Adelson filed a motion styled under Fed. R. Civ. P. 60(b) seeking to vacate the class judgment as to her so she could proceed with her individual suit; the district court denied the motion and interpreted the settlement as precluding further litigation of claims arising from her complaint.
- The Seventh Circuit held there was no final judgment resolving Adelson’s individual suit (settlement did not extinguish all claims or claims against non-class defendants), so it dismissed the appeal for lack of appellate jurisdiction.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Adelson’s Rule 60(b) motion was properly brought in her individual case | Rule 60(b) relief is available to vacate the class judgment as to her so she can proceed | The motion sought relief from the class settlement and was properly denied | Treated as a motion in Adelson’s individual case; Rule 60(b) applies only to parties and her motion was premature absent a final judgment |
| Whether the class settlement extinguished Adelson’s individual claims | Settlement released claims arising from MDL but plaintiff contends she retained foreclosure and related claims | Ocwen argued the release barred further litigation of claims based on her complaint | Settlement did not extinguish all claims; it exempted foreclosure-related claims and did not bind non-class defendants like HSBC |
| Whether appellate jurisdiction exists to review denial of the Rule 60(b) motion | Adelson appealed the denial as a final, appealable order | Defendants treated the denial as reviewable | No jurisdiction: underlying individual suit is not finally resolved, so Rule 60(b) relief was premature and appeal dismissed |
| Proper procedural route for an absent class member who wants relief from a class settlement | Adelson sought Rule 60(b) relief after settlement credit and nonparticipation | Defendants pointed to Rule 60(b) as inapplicable or untimely | Court noted absent class members are generally nonparties to the class action and suggested other steps (e.g., Rule 6(b) to extend opt-out time) instead of Rule 60(b) |
Key Cases Cited
- Minn. Life Ins. Co. v. Kagan, 724 F.3d 843 (7th Cir. 2013) (appellate courts must ensure jurisdiction sua sponte)
- Devlin v. Scardelletti, 536 U.S. 1 (2002) (absent class members are generally nonparties and have limited post-settlement remedies)
- Wheeler v. Talbot, 770 F.3d 550 (7th Cir. 2014) (treatment of filings and captions when determining proper procedural posture)
- In re Four Seasons Sec. Litig., 525 F.2d 500 (10th Cir. 1975) (participation requirement for unnamed class members seeking Rule 60(b) relief)
- Mintz v. Caterpillar Inc., 788 F.3d 673 (7th Cir. 2015) (Rule 60(b) relief is available only from a final decision)
- Stanek v. St. Charles Cmty. Unit Sch. Dist. #303, 783 F.3d 634 (7th Cir. 2015) (court may interpret settlement documents independently)
- In re Am. Express Fin. Advisors Sec. Litig., 672 F.3d 113 (2d Cir. 2011) (procedural options for absent class members who miss opt-out deadlines)
- Taylor v. Brown, 787 F.3d 851 (7th Cir. 2015) (orders that resolve some but not all claims are not final judgments for appeal purposes)
- Morton Int’l, Inc. v. A.E. Staley Mfg. Co., 460 F.3d 470 (3d Cir. 2006) (partial dismissals without Rule 54(b) certification are not final appeals)