Justia Class Action Opinion Summaries

A tornado struck Tennessee, damaging two properties owned by a church that held property insurance with an insurer. The church filed a claim, and the insurer made a payment, but the church alleged that the insurer improperly calculated the amount by subtracting depreciation for non-material costs (such as labor) from the "actual cash value" (ACV) payment, leading to a lower payout. The insurance policy did not specify whether labor should be depreciated. The church then brought a putative class action, asserting similar claims under the laws of ten states, seeking class certification for policyholders who received reduced ACV payments because of the insurer’s practice.The United States District Court for the Middle District of Tennessee addressed several motions. It rejected the insurer’s argument that the church lacked Article III standing to assert claims under other states' laws, and denied the insurer’s motion for judgment on the pleadings as to Texas law. When considering class certification, the district court found the plaintiff satisfied Rule 23(a)’s requirements but limited class certification to four states (Arizona, California, Illinois, and Tennessee), citing unsettled law in the remaining six states. The court reasoned that the uncertain nature of laws in Kentucky, Ohio, Missouri, Mississippi, Texas, and Vermont would make a ten-state class action unwieldy, and thus declined to certify a class for those states.On appeal, the United States Court of Appeals for the Sixth Circuit reviewed the district court’s decisions. It held that the plaintiff had Article III standing to represent the class because the alleged injuries were substantially similar across the proposed class members. The appellate court found that the district court abused its discretion by not conducting an Erie analysis for five of the six excluded states and vacated the class-certification order in part, remanding for further proceedings. However, it affirmed the denial of class certification for Vermont due to insufficient authority on Vermont law. View "Generation Changers Church v. Church Mutual Ins. Co." on Justia Law

A married couple who lived in West Virginia refinanced their home loan in 2004. Over the years, they regularly sent their mortgage servicer payments that included both the scheduled monthly amount and additional principal prepayments, combining the two in single checks and clearly indicating when a prepayment was included. The loan servicers, including LoanCare, LLC (which began servicing the loan in 2019), allegedly failed to apply the prepayments before the monthly payments, resulting in the couple being charged excess interest. Despite several requests for correction, LoanCare did not adjust its practices. The couple eventually paid off the loan and sought a refund for the excess interest.The couple filed a putative class action in the United States District Court for the Eastern District of Virginia, alleging that LoanCare violated two provisions of the West Virginia Consumer Credit and Protection Act (the Act): section 46A-2-127(d) and section 46A-2-128. They also asserted claims for unjust enrichment and conversion. The district court dismissed the unjust enrichment and conversion claims, but allowed the statutory claims to proceed. After discovery, LoanCare moved for summary judgment, arguing that the Act required proof of intentional misconduct, and that there was no evidence it acted intentionally.The United States District Court for the Eastern District of Virginia granted summary judgment for LoanCare, holding that the Act’s provisions at issue required proof of intentional violation, which the couple could not show. On appeal, the United States Court of Appeals for the Fourth Circuit concluded that the district court erred in requiring intent, holding that the statutory provisions impose strict liability and do not require proof of intent to violate. The appellate court vacated the judgment and remanded the case for further proceedings. View "Tederick v. Loancare, LLC" on Justia Law

A purchaser of a home paid off an existing mortgage at closing, which triggered a statutory obligation for the lender to record a release of the mortgage within 90 days. The lender failed to record the release by the deadline, recording it 22 days late. The statute at issue provides that if a lender does not timely record the release, the borrower and current owner may seek $250 in statutory damages. After the lender’s late recordation, the owner filed suit seeking those damages and, in addition, sought to represent a class of similarly situated individuals whose lenders had not timely recorded mortgage releases.The dispute was initially removed to the United States District Court for the Southern District of Ohio, but that court remanded the case to state court for lack of subject-matter jurisdiction. The Hamilton County Court of Common Pleas denied the lender’s motion for summary judgment, finding the owner had standing, and granted the owner’s motion to certify a class. At that time, an amendment to the statute barring class actions for such statutory damages had been enacted but not yet effective, so the trial court applied the prior version. The First District Court of Appeals affirmed, finding the owner had statutory standing and that the amended statute did not apply retroactively to bar the class.The Supreme Court of Ohio reviewed the case and held that the statute confers standing consistent with the Ohio Constitution, allowing the owner’s individual claim for statutory damages. However, the court further held that the 2023 amendment, which bars class-wide recovery of statutory damages for violations occurring in 2020, is remedial and applies retroactively to this case. The court found that the lower courts erred by not applying the amended statute and by certifying the class. The Supreme Court of Ohio affirmed in part and reversed in part, remanding with instructions to decertify the class. View "Voss v. Quicken Loans, L.L.C." on Justia Law

Advance Auto Parts, Inc., a publicly traded company, announced ambitious financial goals for 2023, which increased its stock price. However, the company subsequently lowered its guidance and identified a series of accounting errors, resulting in significant declines in its stock price. The City of Southfield General Employees’ Retirement System, representing investors who purchased stock during the period between November 2022 and November 2023, filed a class action lawsuit against Advance Auto and several former executives. The plaintiffs alleged violations of SEC Rule 10b-5 and Sections 10(b) and 20(a) of the Securities Exchange Act, asserting that the defendants intentionally or recklessly misrepresented the company’s financial results and forecasts.The United States District Court for the Eastern District of North Carolina consolidated several investor suits and designated Southfield as lead plaintiff. The court found that Southfield adequately alleged material misstatements or omissions and satisfied the basic requirements for a securities fraud claim, except for scienter—the requirement that defendants acted with wrongful intent or recklessness. The court concluded that the more plausible inference was that the defendants acted in good faith and corrected errors as they became known, dismissing the complaint for failure to sufficiently plead scienter.On appeal, the United States Court of Appeals for the Fourth Circuit reviewed the dismissal de novo. The Fourth Circuit examined the allegations individually and holistically, finding that none supported a strong inference of scienter as required by the Private Securities Litigation Reform Act. The court held that the facts, even when considered collectively, only plausibly suggested wrongful intent but did not meet the heightened standard for a strong inference. Accordingly, the Fourth Circuit affirmed the district court’s dismissal of the securities fraud claims and the related vicarious liability claim. View "City of Southfield General Employees' Retirement v. Advance Auto Parts, Inc." on Justia Law

Two plaintiffs who purchased stock in a publicly traded corporation brought a securities class action against the corporation and several of its executives. Their complaint alleged the company embarked on an unusually risky plan to develop a nationwide 5G wireless network using unproven technologies and made materially false or misleading statements concerning the progress and capabilities of the network, anticipated enterprise customer relationships, projected revenue growth, and market demand. The plaintiffs asserted violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and SEC Rule 10b-5, claiming the defendants acted with fraudulent intent or recklessness, leading the plaintiffs and other investors to acquire stock at artificially inflated prices.The United States District Court for the District of Colorado reviewed the plaintiffs’ second amended complaint. Defendants moved to dismiss for failure to state a claim, arguing the complaint did not allege any actionable misstatements, facts supporting a strong inference of scienter, or loss causation. The district court agreed, finding that the alleged statements were not false when made and that the complaint lacked particularized facts showing the defendants acted with the required scienter under the heightened pleading standards of Rule 9(b) and the Private Securities Litigation Reform Act (PSLRA). The court dismissed the complaint and entered judgment for the defendants.On appeal, the United States Court of Appeals for the Tenth Circuit affirmed the district court’s decision. The appellate court held that the plaintiffs failed to meet the PSLRA’s requirements to plead with particularity both falsity and scienter for each alleged misstatement. The court also affirmed dismissal of the Section 20(a) claim, as it is derivative of the Section 10(b) claim. The judgment of dismissal was affirmed. View "Lingam v. Dish Network Corporation" on Justia Law

ARcare, Inc., a nonprofit community health center receiving federal funding, suffered a data breach in early 2022 when an unauthorized third party accessed confidential patient information, including names, social security numbers, and medical treatment details. After ARcare notified affected individuals, several patients filed lawsuits alleging that ARcare failed to adequately safeguard their information as required under federal law. Plaintiffs reported fraudulent invoices and that their information was found for sale on the dark web.The actions were removed to the United States District Court for the Eastern District of Arkansas, where six class actions were consolidated. ARcare sought to invoke absolute immunity under 42 U.S.C. § 233(a) of the Federally Supported Health Centers Assistance Act (FSHCAA), which provides immunity for damages resulting from the performance of “medical, surgical, dental, or related functions.” ARcare moved to substitute the United States as defendant under the Federal Tort Claims Act, arguing the data breach arose from a “related function.” The district court denied the motion, finding that protecting patient information from cyberattacks was not sufficiently linked to the provision of health care to qualify as a “related function” under the statute.On appeal, the United States Court of Appeals for the Eighth Circuit reviewed the statutory immunity issue de novo. The court affirmed the district court’s denial of immunity, holding that the FSHCAA’s language does not extend statutory immunity to claims arising from a health center’s data security practices. The court reasoned that “related functions” must be activities closely connected to the provision of health care, and data security is not such a function. Therefore, ARcare is not entitled to substitute the United States as defendant, and the denial of statutory immunity was affirmed. View "Hale v. ARcare, Inc" on Justia Law

Two individuals each purchased a Mercedes-Benz vehicle that included a subscription-based system called “mbrace,” which provided various features through a 3G wireless network. When newer cellular technology rendered the 3G-dependent system obsolete, both customers asked their dealerships to replace the outdated system at no charge, but their requests were denied. Subsequently, they filed a class action lawsuit against Mercedes-Benz USA, LLC and Mercedes-Benz Group AG, asserting claims including breach of warranty under federal and state law.The United States District Court for the Northern District of Illinois, Eastern Division, considered Mercedes’s motion to compel arbitration pursuant to the Federal Arbitration Act, based on the arbitration provision within the mbrace Terms of Service. The district court found in favor of Mercedes, concluding that the plaintiffs were bound by an agreement to arbitrate their claims. Since neither party requested a stay, the court dismissed the case without prejudice. The plaintiffs appealed, arguing that they had not agreed to arbitrate.The United States Court of Appeals for the Seventh Circuit reviewed the district court’s factual findings for clear error and legal conclusions de novo. Applying Illinois contract law, the appellate court determined that Mercedes had provided sufficient notice of the arbitration agreement to the plaintiffs through the subscription activation process and follow-up communications. The court found that Mercedes established a rebuttable presumption of notice, which the plaintiffs failed to overcome, as they only stated they did not recall receiving such notice, rather than expressly denying it. The Seventh Circuit held that the plaintiffs had assented to the agreement by subscribing to the service and thus were bound by the arbitration provision. The judgment of the district court was affirmed. View "Jim Rose v Mercedes-Benz USA, LLC" on Justia Law

A group of current and former warehouse workers employed by the defendants in Connecticut alleged that their employer failed to compensate them for time spent undergoing mandatory security screenings before leaving the workplace at the end of their shifts. The procedures required employees to pass through security—sometimes involving metal detectors, divesting tables, or X-ray machines—before being allowed to exit the premises. The length of these screenings varied, but employees were required to remain on the employer’s property during the process.After the workers filed a class action complaint in the Connecticut Superior Court, the defendants removed the case to the United States District Court for the District of Connecticut. The District Court granted summary judgment in favor of the employer, concluding that Connecticut’s wage laws were intended to align with federal law, specifically the Fair Labor Standards Act (FLSA) as amended by the Portal-to-Portal Act, and that, under federal law, such security screenings are not compensable. The workers appealed, and the United States Court of Appeals for the Second Circuit certified two questions to the Supreme Court of Connecticut regarding the interpretation of Connecticut’s wage laws.The Supreme Court of Connecticut held that, under the unambiguous language of Connecticut law, employers must compensate employees for all time required on the employer’s premises, including time spent undergoing mandatory security screenings. The Court further determined that Connecticut law does not recognize a de minimis exception that would allow employers to disregard small amounts of time as noncompensable. Thus, the Court answered the first certified question in the affirmative and the second in the negative, clarifying that Connecticut wage laws are more protective than federal law in this respect. View "Del Rio v. Amazon.com Services, Inc." on Justia Law

A devastating fire occurred in Lahaina on August 8, 2023, resulting in over one hundred deaths and widespread property and economic damage. Following the fire, individually represented plaintiffs and class action plaintiffs filed lawsuits in state and federal courts against entities including Hawaiian Electric, Kamehameha Schools, the State of Hawaiʻi, and the County of Maui. These class actions were eventually consolidated and refiled as a single case in the Circuit Court of the Second Circuit. Through court-ordered mediation, parties reached a “global settlement” in August 2024, resolving all claims for a total of $4.037 billion, with a portion allocated to a class settlement fund.Prior to the present appeal, the Circuit Court of the Second Circuit coordinated complex proceedings, including appointment of a special settlement master and consolidation of cases. The court issued an order establishing exclusive jurisdiction over subrogation claims related to the settlement. After the settlement was publicized and the Hawaiʻi Supreme Court issued its opinion in In re Maui Fire Cases, which clarified that insurers’ exclusive remedy after settlement is a statutory lien under HRS § 663-10, Subrogating Insurers moved to intervene in the class action, claiming protectable equitable subrogation rights if some class members did not file claims.The Supreme Court of the State of Hawaiʻi held that Subrogating Insurers do not possess a protectable interest that justifies intervention by right or permissive intervention in the class action settlement under Hawaiʻi Rules of Civil Procedure Rule 24. The court found that the statutory lien process under HRS § 663-10 is the exclusive remedy for insurers, and settlement extinguishes subrogation rights, even if some class members do not claim settlement funds. The court affirmed the Circuit Court’s order denying intervention. View "Burnes v. Hawaiian Electric Company, Inc." on Justia Law

In 1965, individuals filed a class action lawsuit against the public schools in St. Mary Parish, Louisiana, seeking to end segregation and secure injunctive relief. The district court granted an injunction requiring desegregation and oversight, with subsequent orders and modifications over the years as the parties and courts responded to compliance issues and changes in the law. After a period of inactivity, new representatives and counsel stepped in around 2018–2019, seeking to further modify the original injunction. The School Board responded by filing motions challenging the procedural propriety of the new plaintiffs, the court’s subject matter jurisdiction, and the ongoing validity of the injunction.The United States District Court for the Western District of Louisiana allowed the substitution of new plaintiffs, denied the Board’s motions to dismiss, and recertified the class, despite acknowledging factors that weighed against doing so. The Board did not appeal immediately but later renewed its objections, moving to dissolve the decades-old injunction and to strike or dismiss the new plaintiffs’ motions for further relief. The district court denied the Board’s motions to dismiss and to strike, and clarified that the Board could not present certain arguments under Rule 60(b)(5) at an upcoming hearing. The Board appealed these rulings.The United States Court of Appeals for the Fifth Circuit reviewed whether it had appellate jurisdiction under 28 U.S.C. § 1292(a)(1), which allows interlocutory appeals of orders granting, continuing, modifying, or refusing to dissolve injunctions. The Fifth Circuit held that the district court’s orders did not have the practical effect of continuing, modifying, or refusing to dissolve the injunction, but merely maintained the status quo pending further proceedings. As such, the appellate court determined it lacked jurisdiction to consider the appeal and dismissed it for want of appellate jurisdiction. View "Navy v. Sch Bd of St. Mary Prsh" on Justia Law