Jack Cooper v. Retrieval Masters Creditors, 42 F.4th 688

Background

Plaintiff Jack Cooper sued Retrieval‑Masters Creditors Bureau (RMCB) in March 2016 (Cooper I) under the FDCPA; while that case was pending Cooper filed a second suit in January 2017 (Cooper II) alleging RMCB's website imposed a $4.95 online "convenience fee" discovered in December 2016.
RMCB moved to dismiss Cooper II as improper claim‑splitting and for lack of standing; the district court dismissed Cooper II with prejudice and Cooper did not appeal that dismissal.
After prevailing on the merits, RMCB sought sanctions under Fed. R. Civ. P. 11 and 28 U.S.C. § 1927; the district court sanctioned Cooper's attorneys (Celetha Chatman and Michael Wood) and their firm, ordering payment of $7,888.13, citing a misleading complaint, a pattern of claim‑splitting across other cases, and failures to identify related cases.
Chatman, Wood, and their firm appealed the sanctions; the Seventh Circuit first addressed whether the notice of appeal adequately invoked appellate jurisdiction over counsel.
On the merits, the Seventh Circuit reviewed whether the district court abused its discretion in imposing sanctions based on (1) a misleading complaint, (2) claim‑splitting (including a supposed pattern), and (3) failure to identify related cases.
The Seventh Circuit reversed the sanctions order, concluding the district court misread testimony on the website visit, misapplied claim‑splitting law (especially after intervening precedent), and that procedural omissions about related‑case notices alone did not justify monetary sanctions.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Appellate jurisdiction over counsel's appeal	Notice of appeal made counsel's intent to appeal clear despite not naming them; Foreman allows harmless omission	Omission of counsel's names in caption/body deprives appellate court of jurisdiction	Court exercised jurisdiction under Rule 3(c)(7) and Foreman; joint/several liability meant Wood was effectively included despite not signing notice
Whether Cooper II complaint was misleading/inconsistent with prior testimony	Cooper's testimony did not preclude that he viewed RMCB's website in Dec 2016; attorneys could have assisted him	Complaint contradicted Cooper's deposition/trial statements and therefore misled the court	Seventh Circuit found district court clearly erred: testimony was ambiguous and did not show counsel knowingly made false allegations; no sanctions on this ground
Claim‑splitting (Cooper II) — was filing a second suit improper	The convenience‑fee claim accrued after Cooper I was filed; newly accrued discrete harms may be litigated in a new action	Second suit duplicated claims and should have been litigated in Cooper I; dismissal with prejudice was appropriate	Court held counsel reasonably pursued a new suit for a claim that likely accrued later; choosing that path was not the kind of reckless conduct warranting Rule 11 or § 1927 sanctions
Pattern of claim‑splitting and failure to identify related cases	Failure to mark related cases on civil cover sheets is procedural and insufficient alone for monetary sanctions; other cited suits involved distinct debts	Counsel had a regular practice of splitting claims and disregarding local related‑case rules, supporting sanctions	Court held the district court erred: other cited cases did not demonstrate wrongful pattern (and Horia undermined that view) and mere non‑designation of related cases doesn't justify monetary sanctions absent aggravating conduct

Key Cases Cited

Smith v. Barry, 502 U.S. 244 (jurisdictional requirements for notices of appeal)
Becker v. Montgomery, 532 U.S. 757 (harmless defects in notices of appeal)
Foreman v. Wadsworth, 844 F.3d 620 (7th Cir. 2016) (exercise of jurisdiction where notice otherwise made counsel's intent clear)
Halim v. Great Gatsby's Auction Gallery, Inc., 516 F.3d 557 (7th Cir. 2008) (declining jurisdiction where counsel neither named nor participated in appeal filing)
Stifle v. Marathon Petroleum Co., 876 F.2d 552 (7th Cir. 1989) (joint and several liability principles)
Northern Illinois Telecom, Inc. v. PNC Bank, N.A., 850 F.3d 880 (7th Cir. 2017) (abuse of discretion standard for sanctions review)
Allison v. Dugan, 951 F.2d 828 (7th Cir. 1992) (Rule 11: callous disregard standard)
Burda v. M. Ecker Co., 2 F.3d 769 (7th Cir. 1993) (§ 1927: serious and studied disregard standard)
Doe v. Allied‑Signal, Inc., 985 F.2d 908 (7th Cir. 1993) (newly accrued claims may be brought in a subsequent suit)
Arrigo v. Link, 836 F.3d 787 (7th Cir. 2016) (consequences of denied motions to amend and decision to file a second action)
Horia v. Nationwide Credit & Collection, Inc., 944 F.3d 970 (7th Cir. 2019) (FDCPA: discrete subsequent acts give rise to separate claims; per‑case statutory cap creates incentive to file multiple suits)