Jack Cooper v. Retrieval Masters Creditors ( 2022 )

In the
United States Court of Appeals
For the Seventh Circuit
____________________
No. 18‐2983
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.
____________________
Appeal from the United States District Court for the
Northern District of Illinois, Eastern Division.
No. 1:17‐cv‐00773 — Manish S. Shah, Judge.
____________________
ARGUED JANUARY 19, 2022 — DECIDED JULY 29, 2022
____________________
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
2 No. 18‐2983
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‐Mas‐
ters 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 preju‐
dice 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). Pur‐
suant 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 Cred‐
itors 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 col‐
lect 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
No. 18‐2983 3
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 Decem‐
ber 2016 and that the website included a notice that individu‐
als 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, 2017 WL 11350966, 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 in‐
volved 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
4 No. 18‐2983
$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 reg‐
ular 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 Il‐
linois’s procedures for identifying related cases.
II. Appellate Jurisdiction
Before reaching the merits of this appeal, we must first ad‐
dress our appellate jurisdiction. Under Federal Rule of Appel‐
late 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 no‐
tice.” 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 (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 (2001). In other
words, we will not dismiss an appeal “for failure to name a
No. 18‐2983 5
party whose intent to appeal is otherwise clear from the no‐
tice.” Fed. R. App. P. 3(c)(7).
On its face, the notice of appeal here leaves a lot to be de‐
sired. 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 ap‐
peal 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 fail‐
ure 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 cap‐
tion or the body of the notice of appeal.
6 No. 18‐2983
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 Chat‐
man, 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 Deal‐
ers 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 be‐
cause 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 responsi‐
ble for the whole amount … with a corresponding right to sue
the other tortfeasors for contribution.” Stifle v. Marathon Petro‐
leum Co., 876 F.2d 552, 556 (7th Cir. 1989); see also Schadel v.
Iowa Interstate Railroad, 381 F.3d 671, 677 (7th Cir. 2004). Ap‐
plied here, if we were to limit our jurisdiction to Chatman,
No. 18‐2983 7
who filed and signed the appeal on behalf of Cooper, and who
identified herself as an attorney with Community Lawyers
Group, the appeal might have little point. For example, if we
reversed the sanctions order as to only Chatman and the firm,
under a theory of contribution Wood would still be entitled
to sue Chatman to recover a portion of the sanctions that he
paid. We have jurisdiction over Wood’s appeal even though
he did not file or sign the notice of appeal.
To be clear, the defects in this notice of appeal are at the
edge of errors we are willing to treat as harmless. Although
Rule 3 discourages dismissing an appeal for technical errors,
compliance with its requirements should not be difficult, even
in appealing a sanctions order against counsel. Failures like
this risk dismissal of the sanctions appeal for lack of jurisdic‐
tion.
III. Merits
We now turn to the merits of this appeal. We review for
abuse of discretion a sanctions order pursuant to Rule 11 and
28 U.S.C. § 1927. Northern Illinois Telecom, Inc. v. PNC Bank,
N.A., 850 F.3d 880, 883 (7th Cir. 2017); 4SEMO.com Inc. v.
Southern Illinois Storm Shelters, Inc., 939 F.3d 905, 913 (7th Cir.
2019). A party may establish an abuse of discretion “if the dis‐
trict court based its decision on an erroneous view of the law
or a clearly erroneous evaluation of evidence.” Northern Illi‐
nois Telecom, Inc., 850 F.3d at 883. Although we give deference
to the district court’s decision, our review is not an “automatic
affirmance,” and “‘we must also find a fair relationship be‐
tween the record and the district court’s perception of the pro‐
ceedings.’” Senese v. Chicago Area I.B. of T. Pension Fund, 237
F.3d 819, 824 (7th Cir. 2001), quoting In re Ronco, Inc., 838 F.2d
212, 218 (7th Cir. 1988).
8 No. 18‐2983
Sanctions pursuant to Rule 11 are appropriate when coun‐
sel’s actions reflect a “callous disregard for governing law or
the procedures of the court.” Allison v. Dugan, 951 F.2d 828,
834 (7th Cir. 1992). Similarly, we have upheld sanctions under
28 U.S.C. § 1927 when counsel acted unreasonably and with a
“serious and studied disregard for the orderly process of jus‐
tice.” Burda v. M. Ecker Co., 2 F.3d 769, 777 (7th Cir. 1993),
quoting Walter v. Fiorenzo, 840 F.2d 427, 433 (7th Cir. 1988).
As noted, the district court here relied on three concerns
to justify sanctions against the attorneys. First, it found that
Cooper’s complaint was misleading because there were in‐
consistencies between the complaint and his testimony dur‐
ing the Cooper I proceedings. Cooper II, 2018 WL 8898621, at
*1–2. Second, the district court determined that Chatman and
Wood had engaged in a regular pattern of claim splitting, as
shown in both the Cooper cases and a series of other cases they
had filed on behalf of other plaintiffs. Id. at *2. Third, the court
noted that Chatman and Wood consistently failed to identify
their related cases in accordance with the Northern District of
Illinois’s local rules. Id. We address these in turn.
A. Misleading Complaint
The district court determined initially that Cooper’s asser‐
tions in his complaint that he visited RMCB’s website in De‐
cember 2016 to view payoff options were false. Cooper II, 2018
WL 8898621, at *2. It also found that Chatman and Wood
knew the allegations in the complaint were false because they
visited RMCB’s website and they, not Cooper, had discovered
the convenience fee notice. Id. This was a clearly erroneous
reading of Cooper’s deposition and trial testimony during the
Cooper I proceedings. It does not support sanctions.
No. 18‐2983 9
Here are the assertions and testimony that the district
court referred to when reaching its conclusion that the Cooper
II complaint was inconsistent with Cooper’s prior testimony.
 Cooper’s complaint alleged that “On or
about December 9, 2016, Plaintiff logged into
his RMCB account to view pay‐off options
for the alleged debt.” Dkt. 1, ¶ 14.
 During Cooper’s deposition, he testified that
he made payments “by money order or
check,” and he “never paid anything
online.” He also explained that he did not
have the ability to make any payments to‐
wards the debt. Dkt. 33‐1 at 34:7–15; 70:21–
24; 71:1.
 At trial, Cooper reiterated that he never paid
his bills online and responded in the affirm‐
ative when asked “you never went to go
check what the status of a bill was online,
correct?” Dkt. 33‐2 at 18:4–17.
 During the trial, RMCB’s counsel also asked
Cooper: “You testified earlier, sir, that you
don’t go on to websites to look into options
for payment, correct,” and Cooper re‐
sponded “yes.” Dkt. 33‐2 at 25:23–25.
 As a follow up, RMCB’s counsel asked: “And
you testified earlier that you had absolutely
no money to be able to pay the debt off, cor‐
rect,” and Cooper responded “yes.” Dkt. 33‐
2 at 26:1–3.
10 No. 18‐2983
 Finally, RMCB’s counsel asked: “But you
went to [RMCB’s] website and accessed the
information, correct,” and Cooper re‐
sponded: “Through the help of the attor‐
neys.” Dkt. 33‐2 at 26:4–6.
We find two key errors in the district court’s account of the
facts. First, the court relied on RMCB’s lawyer’s paraphrase of
Cooper’s testimony during the Cooper I trial, which RMCB’s
lawyer in fact misstated, to find that the complaint’s assertion
that Cooper visited RMCB’s website to view his payment op‐
tions was false. Cooper II, 2018 WL 8898621, at *1. Cooper ex‐
plained in his deposition and trial testimony that he never
made payments online and he did not go online to check the
status of the bill. He also mentioned that he could not make
any payments toward the debt at that time. That testimony,
however, did not declare that Cooper had never even looked
at RMCB’s website to view his payment options. Yet that is
how Cooper’s testimony was presented when RMCB’s coun‐
sel asked: “You testified earlier, sir, that you don’t go on to
websites to look into options for payment, correct?” Dkt. 33‐2
at 25:23–24. That paraphrase by RMCB’s counsel is what cre‐
ated the impression of inconsistency with Cooper’s com‐
plaint.
That misstatement also led to the second error in the dis‐
trict court’s interpretation of the evidence. According to the
district court, attorneys Chatman and Wood knew that the as‐
sertions in Cooper’s complaint were false because when he
was asked at trial whether he visited RMCB’s website, Cooper
said “Through the help of the attorneys.” Dkt. 33‐2 at 26:6. The
court interpreted this response to mean that Chatman and
Wood, not Cooper, had visited RMCB’s website. Cooper II,
No. 18‐2983 11
2018 WL 8898621, at *2. Thus, the court concluded, Chatman
and Wood misled the court when they wrote otherwise in the
Cooper II complaint. Id.Cooper’s response was not a clear assertion that he was
not involved in the process of accessing RMCB’s website or
finding the convenience fee requirement. Chatman and Wood
could have offered “help” in a variety of ways, from directing
Cooper which buttons to click once he was on the website to
informing him that even if he could not make a payment at
that time, he could still view his options online. The district
court instead construed “help” to mean that Chatman and
Wood went on the website by themselves, without Cooper,
and noticed the convenience fee requirement. In deeming the
complaint misleading, the district court read too much into
the testimony and the complaint.
Although the district court expressed concern about the
allegations in Cooper’s complaint that it thought were mis‐
leading, it did not think they alone justified sanctions. Cooper
II, 2018 WL 8898621, at *2. Instead, what “crossed the line”
was the claim splitting in Cooper II and Chatman and Wood’s
general practice of claim splitting reflected in other cases. Id.We turn to that issue next.
B. Claim Splitting
1. Claim Splitting in Cooper II
Claim splitting draws on and is a subset of the doctrine of
res judicata. Scholz v. United States, 18 F.4th 941, 951 (7th Cir.
2021). Res judicata prevents parties from relitigating claims
that were or could have been raised in a prior action for which
there is now a final judgment on the merits. Barr v. Board of
Trustees of Western Illinois Univ., 796 F.3d 837, 839 (7th Cir.
12 No. 18‐2983
2015). In particular, res judicata blocks a subsequent lawsuit
“if there is (1) an identity of the parties in the two suits; (2) a
final judgment on the merits in the first; and (3) an identity of
the causes of action.” Id. at 840. The elements of claim splitting
are similar, except that a final judgment on the merits in the
first action is not required. Scholz, 18 F.4th at 952. Instead, the
question is “whether the first suit, assuming it were final,
would preclude the second suit.” Roumann Consulting Inc. v.
Symbiont Construction, Inc., No. 18‐c‐1551, 2019 WL 3501527,
at *6 (E.D. Wis. Aug. 1, 2019), quoting Katz v. Gerardi, 655 F.3d
1212, 1218 (10th Cir. 2011). We have recognized one important
practical difference between res judicata and claim splitting:
claim splitting allows a trial court to exercise discretion, while
res judicata does not. Scholz, 18 F.4th at 952.
The district court dismissed the Cooper II complaint with
prejudice for claim splitting. The court explained that Cooper
II was “about the same defendant attempting to collect the
same debt from the same plaintiff through a communication
that was set into motion by the same communication chal‐
lenged in the first lawsuit.” Cooper II, 2017 WL 11350966, at *2.
Because Cooper’s claims involved the same transaction, the
court determined that they should have been resolved to‐
gether in one action. Id. Cooper did not appeal the court’s
judgment dismissing Cooper II, so the merits are not before us.
But we must consider the merits of that finding to the extent
that the court relied on it to sanction Chatman and Wood.
Like most rules in the law, the general rule of res judicata
has limits and exceptions. One limit is that res judicata does
not apply to claims that accrued after the prior suit was filed.
Smith v. Potter, 513 F.3d 781, 783 (7th Cir. 2008). There is also
an exception for claims that were expressly reserved by the
No. 18‐2983 13
prior court for later adjudication. Central States, Southeast and
Southwest Areas Pension Fund v. Hunt Truck Lines, Inc., 296 F.3d
624, 629 (7th Cir. 2002); see also Sklyarsky v. Means‐Knaus Part‐
ners, L.P., 777 F.3d 892, 896 (7th Cir. 2015). We do not have an
express reservation here by the first district court, so we focus
on the limit for claims that accrued after the first action was
filed.
Claims arising from continuous violations of rights or new
discrete harms that occurred after the prior suit was filed are
exempt from res judicata’s bar. Smith, 513 F.3d at 783. We have
noted that “plaintiffs need not amend filings to include issues
that arise after the original suit is lodged.” Doe v. Allied‐Signal,
Inc., 985 F.2d 908, 915 (7th Cir. 1993). In the same vein, we
have affirmed district court denials of a plaintiff’s motion to
amend or supplement a complaint to add new claims because
those claims, which arose from a different act and time than
the first suit, could be raised in a subsequent lawsuit. E.g.,
Chaveriat v. Williams Pipe Line Co., 11 F.3d 1420, 1429 (7th Cir.
1993).
This treatment of newly accrued claims is an important
limit on res judicata. But it can be difficult for parties or their
lawyers to know whether it will apply until they file a second
lawsuit. For example, here, Cooper says he noticed RMCB’s
convenience fee requirement when he visited the RMCB web‐
site almost nine months after he filed his complaint in Cooper
I. Dkt. 1, ¶ 14. The record does not show whether the conven‐
ience fee notice was on RMCB’s website before or on March 3,
2016, when Cooper filed Cooper I. If the notice was not on
RMCB’s website at the time, then Cooper likely could not
have learned about it before he filed Cooper I and the excep‐
tion for newly accrued claims would apply. Cooper had two
14 No. 18‐2983
options for pursuing his new claim based on RMCB’s conven‐
ience fee: (1) move to supplement or amend Cooper I, or (2) file
a new lawsuit, which we have advised parties they may do
for newly accrued claims. Doe, 985 F.2d at 915. But there are
risks in relying on Doe and filing a new action. Recall that
claim splitting calls for an exercise of discretion in the trial
court. A court could allow the second suit or could determine
that the exception does not apply and that the second suit
should be barred. It’s also possible that a district court might
base its exercise of discretion on a legal error. As discussed in
the next section, an intervening decision by this court shows
that that occurred here.
The district court assumed that Cooper could have discov‐
ered the convenience fee requirement on RMCB’s website be‐
fore he filed his complaint in Cooper I. Cooper II, 2017 WL
11350966, at *2. As a result, it concluded, the limits for contin‐
uing violations and newly accrued claims did not save the
new case from res judicata. Cooper II, 2018 WL 8898621, at *2
n.4. The court also suggested that Cooper could have avoided
the consequences of claim splitting and res judicata by filing
a motion to amend his complaint in Cooper I. Id. at *1.
The district court’s alternative may not have fully appreci‐
ated the potential effects of a denied motion to amend or sup‐
plement, which we discussed in Arrigo v. Link, 836 F.3d 787(7th Cir. 2016). In Arrigo, the district court denied the plain‐
tiff’s motion to amend her complaint to add related claims be‐
cause her request was untimely. On appeal, we upheld that
decision. Id. at 798. Following that denial, but before a final
judgment was entered in the first lawsuit, the plaintiff had
filed a new action asserting the excluded claims. The district
court had also dismissed the new action. Id. at 799–800.
No. 18‐2983 15
Although the court acknowledged that there was not yet a fi‐
nal judgment in the first suit, it reasoned that it would be a
waste of judicial resources to wait for a final judgment to dis‐
miss the second suit, which was likely precluded by the first.
Id. at 799. Assuming that the plaintiff’s second suit was pre‐
cluded, we agreed with the district court’s position. Id. at 799–
800. We reasoned that allowing the plaintiff to continue with
her second suit would also result in the same prejudice and
inefficiency that justified the denial of her motion to amend,
so that dismissal was proper. Id. at 800.
Whichever path Cooper chose here—move to supplement
in Cooper I or file a new lawsuit—he faced uncertainty about
how res judicata might be applied. In the face of that uncer‐
tainty, his counsel chose to file the new lawsuit, Cooper II. It
may well be that the better option would have been for
Cooper to take his chances with a motion to supplement or
amend. But Chatman and Wood’s choice not to pursue that
course is not the sort of “callous disregard for governing law
or the procedures of the court,” Allison, 951 F.2d at 834, or “se‐
rious and studied disregard for the orderly process of justice,”
Burda, 2 F.3d at 777 (citation omitted), that could justify sanc‐
tions under Rule 11 or § 1927. Chatman and Wood took a
chance, hoping that the district court would apply the limits
for newly accrued claims. They were unsuccessful, but the
punishment of Cooper II being dismissed with prejudice was
sufficient. Sanctioning them for choosing one of two unpre‐
dictable paths goes beyond what is necessary to ensure re‐
spect for judicial procedures and the law.
We recognize that the FDCPA is structured to incentivize
claim splitting, and that district judges need to keep an eye
out for that prospect. The Act caps statutory damages for
16 No. 18‐2983
plaintiffs to $1,000 per action. 15 U.S.C. § 1692k(a)(2)(A). That
per‐action limit provides an incentive for debtors to file mul‐
tiple suits to maximize their total recovery even if the claims
arise from violations by the same debt collector. But addi‐
tional costs of that approach may cut into the ultimate award.
The $400 civil filing fee required for each action may deter
some debtors from filing such duplicative litigation.
2. General Pattern and Practice of Claim Splitting
In addition to its view of claim splitting in Cooper II, the
district court cited several cases that Chatman and Wood filed
on behalf of other plaintiffs that the court determined re‐
flected a pattern of claim splitting. Cooper II, 2018 WL 8898621,
at *2. The district court’s reliance on those cases as evidence
of claim splitting was erroneous in light of an intervening de‐
cision by this court—in one of the cited cases—on res judicata
and claim splitting under the FDCPA.
In Horia v. Nationwide Credit & Collection, Inc., 944 F.3d 970(7th Cir. 2019), we considered whether the plaintiff’s second
suit was precluded by the judgment in a prior suit, against the
same defendant for a similar violation of the FDCPA. We held
that the second suit was not barred. Id. at 974. Under the
FDCPA, we explained: “Discrete and independently wrong‐
ful acts produce different claims, even if the same wrongdoer
commits both offenses and the second wrong is similar to the
first.” Id. The parties and statutory violations were the same
in the two Horia cases, but the debts were different and owed
to different creditors. The defendant’s failure to comply with
the FDCPA thus caused a separate injury associated with each
debt, and the second suit was not precluded by the first. We
recognized in Horia the Act’s incentive for filing multiple ac‐
tions: “A statutory cap per case, rather than per bill collector,
No. 18‐2983 17
induces debtors to file more cases. Judges aren’t authorized to
turn per‐case caps into per‐defendant caps; that choice is leg‐
islative.” Id.Relying on a similar analysis here, we note that the cases
the district court cited did not involve improper claim split‐
ting. See Cooper II, 2018 WL 8898621, at *2. Each set of cases,
filed by the same plaintiff against the same defendant, was
based on different debts and in some cases those debts were
even owed to different creditors. See, e.g., Carchi v. Midland
Funding, LLC, 17‐cv‐04897 (N.D. Ill.) (filed June 30, 2017) (debt
owed to Citibank); Carchi v. Midland Funding, LLC, 17‐cv‐
05446 (N.D. Ill.) (filed July 25, 2017) (debt owed to Synchrony
Bank).1 The district court’s reliance on those cases to find that
Chatman and Wood had engaged in a pattern of claim split‐
ting was based on a mistaken view of the law, at least in light
1 The other cases the district court cited also did not involve improper
claim splitting. See, e.g., Carchi v. Portfolio Recovery Associates, LLC, 17‐cv‐
05900 (N.D. Ill.) (filed Aug. 11, 2017) (debt owed to Citibank for consumer
account starting with 60353); Carchi v. Portfolio Recovery Associates, LLC, 17‐
cv‐06867 (N.D. Ill.) (filed Sept. 22, 2017) (debt owed to Citibank for con‐
sumer account starting with 54241); Carchi v. Portfolio Recovery Associates,
LLC, 17‐cv‐07607 (N.D. Ill.) (filed Oct. 20, 2017) (debt owed to World Fi‐
nancial Network Bank for consumer credit account); Carchi v. Portfolio Re‐
covery Associates, LLC, 18‐cv‐00098 (N.D. Ill.) (filed Jan. 5, 2018) (debt owed
to Citibank for consumer account starting with 51210); Carchi v. Portfolio
Recovery Associates, LLC, 18‐cv‐02067 (N.D. Ill.) (filed Mar. 21, 2018) (debt
owed to Citibank for consumer account starting with 60353); Horia v. Na‐
tionwide Credit & Collection, Inc., 17‐cv‐06103 (N.D. Ill.) (filed Aug. 22,
2017); Horia v. Nationwide Credit & Collection, Inc., 17‐cv‐08355 (filed Nov.
17, 2017). In fact, after the district court published its opinion here, we de‐
termined that the separate actions for Horia v. Nationwide Credit & Collec‐
tion, Inc. did not constitute improper claim splitting. 944 F.3d at 974.
18 No. 18‐2983
of our intervening decision in Horia. The claim splitting
ground does not support sanctions here.
C. Failure to Identify Related Cases
The district court’s final justification for its sanctions order
was that Chatman and Wood consistently failed to follow
Northern District of Illinois procedures requiring parties to
identify related cases. In particular, the Civil Cover Sheet that
a party files with a complaint includes a section for “related
case(s) if any.” N.D. Ill. Civil Court Sheet Section 9. The in‐
structions explain that if there are any related cases pending
in the court, the party should insert the docket number and
the corresponding judge for the case. Id.
While these procedures are helpful for judicial economy
and organization, Chatman and Wood’s apparent failure to
comply does not, by itself, justify monetary sanctions. Either
party can designate a case as related. Sanctioning one party
for failing to do so when there are opportunities for the other
party to correct that failure would not be justified, at least ab‐
sent aggravating circumstances not shown here.
The district court’s stated grounds for imposing monetary
sanctions against counsel in this case do not support the sanc‐
tions. The sanction award is REVERSED.