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Wednesday, January 19, 2005

Ind. Decisions - 7th Circuit posts two today

AG Finan Service Inc v. Hughes, Barbara (SD Ind., Sarah Evans Barker, Judge)

Before EASTERBROOK, EVANS, and SYKES, Circuit Judges.
EASTERBROOK, Circuit Judge. A.G. Financial Service Center issued private-label credit cards, which consumers used to purchase products from single merchants. Between 1992 and 1995 its stable of merchants included distributors of satellite television systems. That line of business was a disaster. A.G. Financial experienced high delinquency rates. Worse, some borrowers complained that they had been misled about the terms of credit or the costs of satellite TV. About 500 borrowers sued. A suit in Mississippi ended in a judgment for $167 million, almost all of it punitive damages. A.G. Financial responded by filing a petition in bank ruptcy. Other than about $2 million in cash, A.G. Financial’s principal asset was a claim against American General Finance, Inc. (AGFI), its corporate parent, on the theory that the parent had induced the subsidiary to mislead the borrowers or otherwise bore responsibility for their injuries. * * * Affirmed.

Bennett, Jay R. v. Frank, Matthew J. (WD Wis.)

Before POSNER, KANNE, and SYKES, Circuit Judges.
POSNER, Circuit Judge. This appeal presents an issue of some novelty but little difficulty. The plaintiffs, inmates of Whiteville Correctional Facility, a private prison (owned by Corrections Corporation of America) that is under contract to the Wisconsin Department of Corrections, claim entitlement to the minimum wage provision of the Fair Labor Standards Act, 29 U.S.C. §§ 201 et seq. All their other claims have been waived.

The Fair Labor Standards Act is intended for the protection of employees, and prisoners are not employees of their prison, whether it is a public or a private one. So they are not protected by the Act. * * *

Posted by Marcia Oddi on January 19, 2005 08:10 PM
Posted to Ind. (7th Cir.) Decisions