Justia Class Action Opinion Summaries

A group of former and current employees of a staffing agency alleged that the company misclassified recruiters as exempt from state overtime laws and failed to provide required meal and rest breaks. After the employees filed a putative class action in state court, which the company removed to federal court, the parties engaged in over a year of discovery and completed class certification briefing. Shortly after class certification briefing closed, the company implemented a new, mandatory arbitration agreement for internal employees, including the putative class members. This agreement required class members to either quit their jobs or affirmatively opt out of arbitration if they wished to remain in the class, effectively reversing the typical opt-out structure of class actions under Federal Rule of Civil Procedure 23.The United States District Court for the Northern District of California granted class certification and, after reviewing the company’s communications about the new arbitration agreement, found them misleading and potentially coercive. The court determined that the communications disparaged class actions, omitted key information, and confused recipients about their rights and deadlines, especially as the emails were sent during a holiday period. Consequently, when the company moved to compel arbitration against class members who had not opted out, the district court denied the motion, relying on its authority under FRCP 23(d) to ensure the fairness of class proceedings.On appeal, the United States Court of Appeals for the Ninth Circuit affirmed the district court’s decision. The Ninth Circuit held that district courts have broad authority under FRCP 23(d) to refuse to enforce arbitration agreements when a defendant’s conduct undermines the fairness of the class action process, especially where communications are misleading and subvert the opt-out mechanism. The court also held that the arbitration agreement’s delegation provision did not prevent the district court from ruling on enforceability in this context. View "AVERY V. TEKSYSTEMS, INC." on Justia Law

An individual seeking to refinance his mortgage visited a website that offers mortgage information and referrals to affiliated lenders. During three separate visits, he entered personal information and clicked buttons labeled “Calculate” or “Calculate your FREE results.” Immediately below these buttons, the website displayed language in small font stating that clicking would constitute consent to the site’s Terms of Use, which included a mandatory arbitration provision and permission to be contacted by the site or affiliates. The Terms of Use were accessible via a hyperlinked phrase. After using the site, the individual was matched with a particular lender but did not pursue refinancing. Later, he received multiple unwanted calls from the lender and filed a class-action lawsuit under the Telephone Consumer Protection Act, alleging violations such as calling numbers on the Do Not Call registry.The United States District Court for the Eastern District of Michigan initially dismissed the complaint on the merits and denied the lender’s motion to compel arbitration as moot. Upon realizing the arbitration issue should have been decided first, the court reopened the case but found no enforceable agreement to arbitrate existed, denying the motion to compel arbitration. The court also denied reconsideration and allowed the plaintiff to amend his complaint. The lender appealed the denial of arbitration.The United States Court of Appeals for the Sixth Circuit reviewed the denial de novo. It held that, under California law, the website provided reasonably conspicuous notice that clicking the buttons would signify assent to the Terms of Use, including arbitration. The court found that the plaintiff’s conduct objectively manifested acceptance of the offer, forming a binding arbitration agreement. The court also concluded that the agreement was not invalid due to unspecified procedural details and that questions of arbitrability were delegated to the arbitrator. The Sixth Circuit reversed the district court’s decision and remanded for further proceedings. View "Dahdah v. Rocket Mortgage, LLC" on Justia Law

A group of oil-and-gas royalty owners in Oklahoma, represented by Chieftain Royalty Company, sued EnerVest Energy’s predecessor in 2011 for allegedly underpaying royalties. After EnerVest acquired the wells, the parties reached a $52 million settlement in 2015 to be paid to the class after expenses and attorneys’ fees. Class counsel sought 40% of the fund as fees, plus expenses and an incentive award for the class representative. Two class members objected to the fee and incentive awards.The United States District Court for the Western District of Oklahoma approved the settlement, awarding 33.33% of the fund for attorneys’ fees and a 0.5% incentive award. On appeal, the United States Court of Appeals for the Tenth Circuit affirmed the settlement but reversed the fee and incentive awards, holding that Oklahoma law applied and required a lodestar analysis (not solely a percentage-of-the-fund), and that incentive awards must be based on time spent on case-related services. Following remand and a clarifying decision from the Oklahoma Supreme Court in Strack v. Continental Resources, Inc., the district court reapplied the statutory factors, found a 33.33% fee reasonable (supported by a 2.15 lodestar multiplier), and adjusted the incentive award based on the representative’s service. A subsequent Tenth Circuit appeal led to vacatur of the fee award on procedural notice grounds, then the district court reinstated the same fee after proper notice.On this third appeal, the United States Court of Appeals for the Tenth Circuit held that Oklahoma law does not impose a hard ceiling on percentage fees or lodestar multipliers. The district court properly applied Oklahoma’s statutory factors, conducted a thorough reasonableness analysis, and did not abuse its discretion by awarding 33.33% of the fund ($17,333,333.33) as attorneys’ fees. The fee award was affirmed. View "Chieftain Royalty Company v. Enervest Energy Institutional Fund XIII-A" on Justia Law

A group of former employees at a luxury hotel in Lenox, Massachusetts brought a series of lawsuits against the hotel and its operators, alleging violations of the Fair Labor Standards Act (FLSA) and Massachusetts wage laws. The claims primarily involved misclassification as overtime-exempt, failure to pay minimum wage, mismanagement of tip pools, and other wage-related violations. One plaintiff, after successfully certifying a class of similarly situated employees, joined with others to negotiate a global settlement with the hotel’s owners.Prior to this appeal, the United States District Court for the District of Massachusetts, acting through a magistrate judge, oversaw the coordinated settlement negotiations for four related cases—three individual actions and one class action. After the parties agreed to a global settlement via email, defense counsel confirmed the deal and the court was notified. The individual cases were subsequently dismissed with prejudice. When obstacles arose regarding finalization, including Wheatleigh’s concerns over attorney fees and purported conflicts of interest for class counsel, plaintiffs moved to enforce the settlement. The district court granted the motion, enforced the settlement, and later granted preliminary and then final approval of the class-action settlement, including approval of attorney fees, expenses, and a service award.The United States Court of Appeals for the First Circuit reviewed Wheatleigh’s appeal, which challenged the district court’s rulings on standing, enforcement and approval of the settlement, class certification, and attorney fees. The First Circuit held that the district court did not err in finding Article III standing for the named plaintiff, enforcing the global settlement, approving the class-action settlement despite alleged conflicts of counsel, maintaining class certification, and awarding attorney fees. The First Circuit affirmed the judgment of the district court. View "Mongue v. The Wheatleigh Corporation" on Justia Law

Under Armour, a publicly traded sports apparel company, faced significant legal claims and government investigations over its financial forecasts and accounting practices following the bankruptcy of a major customer, Sports Authority, in 2016. Shareholders alleged that Under Armour made misleading public statements about its financial prospects and that company insiders sold stock at inflated prices. These allegations led to a federal securities class action, derivative demands, and eventually an SEC investigation into whether Under Armour manipulated its accounting by pulling forward revenue to maintain the appearance of strong growth.In the United States District Court for the District of Maryland, Under Armour’s insurers sought a declaratory judgment, arguing that the securities litigation, derivative actions, and government investigations constituted a single claim under the terms of Under Armour’s directors and officers insurance policies and therefore were subject only to the coverage limit of the earlier policy period. Under Armour countered that the government investigations were a separate claim, entitling it to an additional $100 million in coverage under a subsequent policy. The district court sided with Under Armour, finding that the government investigations and the earlier shareholder claims were not sufficiently related to constitute a single claim under the policy’s language.The United States Court of Appeals for the Fourth Circuit reviewed the district court’s decision de novo. The Fourth Circuit held that, under the plain meaning of the 2017–2018 insurance policy’s “single claims” provision, the claims related to Under Armour’s public financial statements and its accounting practices were “logically or causally related” and thus constituted a single claim. As a result, only the coverage limits from the earlier, 2016–2017 policy period applied. The Fourth Circuit reversed the district court’s judgment in favor of Under Armour. View "Navigators Insurance Co. v. Under Armour, Inc." on Justia Law

Several individuals who were employed by the City and County of San Francisco and were at least 40 years old when hired brought a class action lawsuit alleging that the City’s method for calculating disability retirement benefits under its retirement system discriminated against employees based on age. The system employs two formulas; Formula 1 is used if it yields a benefit exceeding a percentage threshold, while Formula 2 is used if the threshold is not met. Plaintiffs argued that Formula 2, which imputes years of service until age 60, resulted in lower benefits for those who entered the retirement system at age 40 or older, in violation of the California Fair Employment and Housing Act (FEHA).After initial proceedings in the San Francisco City and County Superior Court—including a demurrer sustained on statute of limitations grounds and subsequent reversal by the Court of Appeal—the plaintiffs filed an amended complaint asserting FEHA claims for disparate treatment and disparate impact, as well as claims for declaratory relief, breach of contract, and equal protection violations. The trial court certified a class and denied summary judgment due to triable issues of fact. A bench trial followed, where both parties presented expert testimony on whether Formula 2 disparately impacted older employees.The Court of Appeal of the State of California, First Appellate District, Division Four, reviewed the trial court’s findings. It affirmed the judgment, holding that plaintiffs failed to prove intentional age discrimination or disparate impact under FEHA. The court found that Formula 2 was motivated by pension status and credited years of service, not by age, and that plaintiffs’ evidence was insufficient as it was based on hypothetical calculations rather than actual data. The trial court’s denial of plaintiffs’ request to amend their complaint after trial was also upheld, as any alleged error was not reversible on the record. The judgment in favor of the City was affirmed. View "Carroll v. City and County of San Francisco" on Justia Law

Jessica Garcia and other former employees brought a class action against The Merchant of Tennis, Inc., alleging failure to pay wages and other employment violations under California and federal law. In response, Merchant entered into approximately 954 individual settlement agreements (ISAs) with current and former employees, providing cash payments in exchange for waivers of their claims. Garcia, who had not signed an ISA, sought class certification and also moved to invalidate the ISAs, arguing that Merchant had obtained them through fraud and coercion, such as misrepresenting the scope of litigation and the claims being released.The Superior Court of San Bernardino County partially granted Garcia’s motion, finding the ISAs voidable at the election of each settling putative class member. The court ordered that curative notices be sent to those who had signed ISAs, allowing them to revoke their agreements and join the class action. However, the parties could not agree on the notice’s language, specifically whether it should inform class members that they might be required to repay the settlement amount if Merchant prevailed in the action. The trial court ruled that the notice did not need to include such repayment language, reasoning that federal cases suggested repayment was not required before joining the suit and that repayment could be treated as an offset to any judgment.The Court of Appeal of the State of California, Fourth Appellate District, Division Two reviewed the trial court’s order. It held that under California Civil Code sections 1689, 1691, and 1693, class members who rescind their ISAs may be required to repay Merchant the consideration received if Merchant prevails, but such repayment can be delayed until the conclusion of litigation. The trial court retains discretion to adjust equities between the parties at judgment. The writ of mandate was granted, directing the trial court to reconsider the curative notice in accordance with these principles. View "The Merchant of Tennis v. Superior Ct." on Justia Law

Three Ohio natural-gas producers filed a class-action lawsuit in the Summit County Court of Common Pleas against East Ohio Gas Company (Dominion Energy Ohio). They alleged that Dominion Energy sold or used natural gas delivered into its pipeline system without properly compensating them, despite tariff provisions requiring reconciliation of delivered gas volumes. The plaintiffs claimed conversion, unjust enrichment, and violations of statutory provisions related to damages from criminal acts and theft. The class consisted of Ohio natural-gas producers participating in the Energy Choice Program whose wells were connected to Dominion Energy’s pipeline system.Judge Christine Croce partly granted Dominion Energy’s motion to dismiss by dismissing the conversion claim but allowed other claims to proceed. Dominion Energy appealed, but the Ninth District Court of Appeals dismissed the appeal, finding that Judge Croce’s order was not a final, appealable order. Subsequently, Dominion Energy sought a writ of prohibition in the Ninth District against Judge Croce, arguing that the Public Utilities Commission of Ohio (PUCO) has exclusive jurisdiction over the subject matter of the class-action claims. The natural-gas producers intervened in the prohibition action.The Ninth District Court of Appeals applied the test from Allstate Insurance Co. v. Cleveland Electric Illuminating Co. and concluded that PUCO has exclusive subject-matter jurisdiction over the claims because the resolution of the dispute depended on the interpretation and application of PUCO-approved tariffs and practices normally authorized by public utilities. The court granted summary judgment for Dominion Energy and issued a writ of prohibition ordering Judge Croce to cease jurisdiction over the class action and vacate her prior orders.On appeal, the Supreme Court of Ohio affirmed the Ninth District’s judgment. The court held that PUCO has exclusive jurisdiction over the claims asserted by the natural-gas producers, and the common pleas court patently and unambiguously lacks subject-matter jurisdiction over those claims. View "E. Ohio Gas Co v. Croce" on Justia Law

The case involves an Arizona resident who received an unsolicited text message on his cell phone during the 2020 presidential election campaign. The message, sent by the Republican National Committee, included written text and an automatically downloaded video file featuring a still image of Ivanka Trump with a play button overlay. The plaintiff alleged the video contained an artificial or prerecorded voice and stated he never gave prior express consent to receive such messages. He claimed the message was part of a broader campaign targeting Arizona residents.In the United States District Court for the District of Arizona, the plaintiff filed a putative class action, alleging violations of two provisions of the Telephone Consumer Protection Act (TCPA): 47 U.S.C. § 227(b)(1)(A)(iii) and § 227(b)(1)(B), both prohibiting calls using an artificial or prerecorded voice without prior consent. The district court dismissed the complaint with prejudice under Rule 12(b)(6), holding that the statute did not apply because the recipient had to actively press play to hear the video’s audio, and, for the § 227(b)(1)(B) claim, because the message was exempted under FCC regulations for certain nonprofit organizations.On appeal, the United States Court of Appeals for the Ninth Circuit affirmed the district court’s dismissal. The Ninth Circuit held that the TCPA’s prohibitions apply only to the use of artificial or prerecorded voices in the manner in which a call is begun. Because the text message was made and initiated without the automatic playing of a prerecorded voice—the recipient had to affirmatively choose to play the video—the conduct did not violate the statutory provisions. The court concluded that sending a text message containing a video file that requires recipient interaction to play does not constitute “making” or “initiating” a call “using” a prerecorded voice under the TCPA. View "HOWARD V. REPUBLICAN NATIONAL COMMITTEE" on Justia Law

Milliman, Inc. operates a service that compiles consumer medical and prescription reports, which are then sold to insurers for underwriting decisions. The named plaintiff, James Healy, applied for life insurance, but Milliman provided a report to the insurer containing another person's medical records and social security number. This erroneous report flagged Healy as high risk for several serious medical conditions he did not actually have, resulting in the denial of his insurance application. Healy attempted to correct the report, but Milliman did not timely investigate or remedy the errors.Healy filed a class action in the United States District Court for the Western District of Washington, alleging that Milliman’s procedures violated the Fair Credit Reporting Act by failing to ensure maximum possible accuracy. The district court certified an “inaccuracy class” for those whose reports included mismatched social security numbers and risk flags. Milliman moved for partial summary judgment, arguing that Healy needed to show class-wide standing at this stage. The district court agreed, finding under TransUnion LLC v. Ramirez, 594 U.S. 413 (2021), that Healy had failed to present direct evidence of concrete injury on a class-wide basis, and dismissed the inaccuracy class.On interlocutory appeal, the United States Court of Appeals for the Ninth Circuit held that, following class certification in damages actions, both named and unnamed class members must present evidence of standing at summary judgment. However, the court clarified that plaintiffs may rely on either direct or circumstantial evidence, and need only show that a rational trier of fact could infer standing, not that standing is conclusively established. The panel reversed the district court’s partial summary judgment and remanded for reconsideration under the correct summary judgment standard. View "HEALY V. MILLIMAN, INC." on Justia Law