Justia Class Action Opinion Summaries

Daniel Garcia purchased cloth facemasks from several retail stores in late 2020. The retailers collected sales tax on these masks, which Garcia believed to be nontaxable. Garcia filed a class action complaint in the Court of Common Pleas of Allegheny County against the retailers, alleging that they collected sales tax on items they knew or should have known were nontaxable, violating the Unfair Trade Practices and Consumer Protection Law (UTPCPL).The Court of Common Pleas overruled the retailers' preliminary objections, which argued that the complaint was legally insufficient. The Superior Court granted the retailers permission to appeal and reversed the trial court's order. The Superior Court concluded that the collection of sales tax did not occur "in the conduct of any trade or commerce" as contemplated by the UTPCPL. The court reasoned that the collection of sales tax is a statutory obligation distinct from the conduct of trade or commerce and that merchants act as agents of the Commonwealth when collecting sales tax.The Supreme Court of Pennsylvania reviewed the case and affirmed the Superior Court's decision. The court held that a merchant’s collection of sales tax does not occur "in the conduct of any trade or commerce" under the UTPCPL. The court emphasized that the collection of sales tax is a statutory obligation imposed on merchants, who act as agents of the Commonwealth, and is distinct from their commercial activities. The court also noted that the Pennsylvania Code requires a clear separation between the advertising of a product’s price and the sales tax due, further supporting the conclusion that tax collection is not part of trade or commerce. View "Garcia v. Foot Locker" on Justia Law

A debt buyer, Velocity Investments, LLC, purchased consumer debt from Citibank, N.A., which had been charged off as a loss. Velocity sent a written communication to David Chai regarding the debt but failed to include the required notice of Chai’s right to request records, as mandated by the Fair Debt Buying Practices Act. Chai filed a lawsuit individually and on behalf of a putative class, seeking statutory damages under the Act, while disclaiming any concrete injury from the violation.The Santa Clara County Superior Court certified a class of individuals who received similar communications from Velocity. Velocity moved for judgment on the pleadings, arguing that Chai lacked standing because he admitted to no concrete injury. The trial court granted the motion, ruling that the Act requires a consumer to have suffered actual damage to sue. Chai appealed the decision.The California Court of Appeal, Sixth Appellate District, reviewed the case. The court held that the Fair Debt Buying Practices Act does not condition a consumer’s claim for statutory damages on the existence of actual damages. The court found that the Act allows consumers to seek statutory damages for violations of their rights under the Act, regardless of whether they suffered actual damages. The court reversed the trial court’s judgment, allowing Chai to pursue his claim for statutory damages. View "Chai v. Velocity Investments, LLC" on Justia Law

A controller orchestrated a merger that consolidated Sears, Roebuck and Co. and Kmart Corporation under Sears Holdings Corporation. The controller, through his investment funds, owned a majority of the new entity. In 2012, Sears Holdings spun off Sears Hometown and Outlet Stores, Inc. (the Company) as a separate public entity, with the controller retaining a majority stake. In 2019, the Company merged with an acquisition subsidiary, with each share converted into the right to receive $3.21. Some stockholders sought appraisal, while others pursued a plenary action alleging breaches of fiduciary duty.The Court of Chancery of the State of Delaware coordinated the appraisal proceeding and the plenary action for discovery and trial. The court certified a class in the plenary action, which was later modified to explicitly include stockholders who sought appraisal. During the appraisal proceeding, the Company and its post-merger parent became insolvent, rendering the appraisal claimants as general creditors with no prospect of recovery. The Fund, an appraisal claimant, opted to join the plenary action. The court found the merger was not entirely fair and determined a fair price of $4.06 per share, awarding incremental damages of $0.85 per share to the class members who had received the merger consideration.The Fund, having not received the merger consideration, sought to recover the full fair price damages award. The court held that under the precedent set by the Delaware Supreme Court in Cede & Co. v. Technicolor, Inc., the Fund was entitled to the full fair price damages of $4.06 per share without any offset for the merger consideration it did not receive. The court concluded that the Fund could opt out of the appraisal proceeding and participate in the plenary action remedy, ensuring it was made whole. View "In re Sears Hometown and Outlet Stores, Inc. Stockholder Litigation" on Justia Law

In this case, inmates at the Louisiana State Penitentiary (LSP) filed a class action lawsuit in 2015 against the warden, the Louisiana Department of Public Safety and Corrections, and other officials. The plaintiffs alleged that the defendants were deliberately indifferent to their serious medical needs, violating the Eighth Amendment, the Rehabilitation Act of 1973, and the Americans with Disabilities Act (ADA). The district court bifurcated the case into liability and remedy phases. After an eleven-day bench trial, the court found in favor of the plaintiffs on all claims. Subsequently, a ten-day trial on remedies concluded that the plaintiffs were entitled to permanent injunctive relief, but the court did not specify the relief in its judgment.The United States District Court for the Middle District of Louisiana entered a "Judgment" in favor of the plaintiffs and a "Remedial Order" outlining the appointment of special masters to develop remedial plans. The defendants appealed, arguing that the district court's judgment and remedial order were final and appealable under 28 U.S.C. § 1291 or, alternatively, under 28 U.S.C. § 1292(a)(1).The United States Court of Appeals for the Fifth Circuit reviewed the case and concluded that the district court had not entered a final decision appealable under 28 U.S.C. § 1291, nor had it entered an injunction appealable under 28 U.S.C. § 1292(a)(1). The appellate court determined that the district court's actions were not final because they contemplated further proceedings, including the appointment of special masters and the development of remedial plans. Consequently, the Fifth Circuit dismissed the appeal for lack of jurisdiction and vacated the stay of the remedial order. View "Parker v. Hooper" on Justia Law

Plaintiffs, purchasers of coupon processing services, alleged that Inmar, Inc. and its subsidiaries engaged in an anticompetitive conspiracy to raise coupon processing fees. They sought class certification for a manufacturer purchaser class. The district court rejected their attempts to certify the class, leading to this appeal.The United States District Court for the Middle District of North Carolina denied plaintiffs' first two motions for class certification. The first was denied due to discovery issues, and the second was rejected as an impermissible fail-safe class. Plaintiffs' third motion proposed three different class definitions: the Fixed List Class, the Limited Payer Class, and the All Payer Class. The district court rejected all three, finding the Fixed List Class to be a fail-safe class, the Limited Payer Class to be unascertainable and excluding too many injured manufacturers, and the All Payer Class to fail the predominance requirement of Rule 23(b)(3) due to a high percentage of uninjured members.The United States Court of Appeals for the Fourth Circuit reviewed the district court's decision and affirmed the denial of class certification. The court found that the Fixed List Class failed to define a class and improperly shifted the burden to the district court. The Limited Payer Class was deemed unascertainable and not superior due to its exclusion of many injured manufacturers. The All Payer Class failed the predominance requirement as the plaintiffs' expert did not show injury for 32% of the class members, raising both predominance and standing issues. The Fourth Circuit concluded that the district court did not abuse its discretion in denying class certification. View "Mr. Dee's Inc. v. Inmar, Inc." on Justia Law

A plaintiff purchased shares of a company that went public through a direct listing, which involved listing already-issued shares rather than issuing new ones. Following the listing, the company's stock price fell, and the plaintiff filed a class action lawsuit alleging that the registration statement was misleading, thus violating sections 11 and 12(a)(2) of the Securities Act of 1933. These sections impose strict liability for any untrue statement or omission of a material fact in a registration statement or prospectus.The district court denied the defendants' motion to dismiss, despite the plaintiff's concession that he could not trace his shares to the registration statement. The court held that it was sufficient for the plaintiff to allege that the shares were of the same nature as those issued under the registration statement. The Ninth Circuit initially affirmed this decision.The United States Supreme Court vacated the Ninth Circuit's decision, holding that section 11 requires plaintiffs to show that the securities they purchased were traceable to the particular registration statement alleged to be false or misleading. On remand, the Ninth Circuit concluded that section 12(a)(2) also requires such traceability. Given the plaintiff's concession that he could not make the required showing, the Ninth Circuit reversed the district court's decision and remanded with instructions to dismiss the complaint in full and with prejudice. View "PIRANI V. SLACK TECHNOLOGIES" on Justia Law

The case involves two homebuyers, Wynton Sanders and Tosha Lindsey, who entered into contracts with SM Landover, LLC and SM Parkside, LLC, respectively, for the purchase of new homes. Both contracts included provisions for deferred water and sewer charges and a one-year statute of limitations for bringing any claims related to the contracts. The homebuyers later filed class action complaints alleging that the sellers failed to disclose required information about the deferred charges, as mandated by Maryland law.The Circuit Court for Prince George’s County consolidated the cases for pretrial purposes and dismissed the complaints with prejudice. The court found that the sellers did not need to register as home builders because Stanley Martin Companies, LLC, a registered home builder, was also a party to the contracts. The court also concluded that the homebuyers’ claims accrued at the time of contracting, making them time-barred under the one-year contractual limitations period.The Appellate Court of Maryland affirmed in part and reversed in part. It held that the one-year contractual limitations period was reasonable and that the homebuyers’ claims accrued at the time of settlement, not contracting. Therefore, the claims were timely. However, the court also held that the sellers did not need to register as home builders because a registered home builder was a party to the contracts.The Supreme Court of Maryland reviewed the case and held that the homebuyers’ claims accrued at the time of contracting. The court also held that the sellers were required to register as home builders under Maryland law, even though a registered home builder was a party to the contracts. Consequently, the sellers could not enforce the one-year contractual limitations period, making the homebuyers’ claims timely. The court affirmed in part and reversed in part the judgment of the Appellate Court of Maryland. View "SM Landover LLC v. Sanders" on Justia Law

The City of East Lansing entered into an agreement with the Lansing Board of Water and Light (LBWL) in 2016, which included a franchise fee to be charged to LBWL consumers residing within the City. The fee was collected by LBWL and remitted to the City. Plaintiff James Heos, representing a class of LBWL consumers, filed a complaint against the City, alleging that the franchise fee was an illegal tax under the Michigan Constitution's Headlee Amendment and other state laws.The trial court granted summary disposition in favor of the plaintiff on most counts, ruling that the franchise fee was an illegal tax. The Michigan Court of Appeals reversed this decision, directing the trial court to grant summary disposition in favor of the City, concluding that the plaintiff was not a taxpayer and thus his claim was time-barred.The Michigan Supreme Court reviewed the case and held that the franchise fee was indeed a tax because it was used for general revenue-raising purposes, was not proportionate to any costs incurred by the City, and was not voluntary. The Court further held that the plaintiff was a taxpayer because the legal incidence of the fee fell on the LBWL consumers, not LBWL itself. The Court reversed the Court of Appeals' decision and remanded the case to the trial court for further proceedings, allowing the plaintiff to pursue his Headlee Amendment claim. View "Heos v. City Of East Lansing" on Justia Law

Nabors Corporate Services, Inc. (Nabors) performed oil well plug and abandonment work for the City of Long Beach (the City) between 2012 and 2014. The City had contracted with Tidelands Oil Production Company (Tidelands) for services on the Gerald Desmond Bridge Replacement Project, and Tidelands subcontracted the work to Nabors. The City and Tidelands had concluded that the work was not subject to prevailing wage laws, and Nabors was not informed otherwise during the bid process. After completing the work, Nabors faced a class action from its employees for unpaid prevailing wages, which led to arbitration awards and federal court judgments against Nabors.The Superior Court of Los Angeles County sustained demurrers by the City and Tidelands, dismissing Nabors’s claims for indemnity under Labor Code sections 1781 and 1784. The court ruled that section 1784 could not be applied retroactively to Tidelands and that the arbitration awards confirmed by the federal court did not qualify as court decisions under section 1781.The California Court of Appeal, Second Appellate District, Division Five, reviewed the case. The court affirmed the dismissal of the section 1784 claim against Tidelands, agreeing that the statute could not be applied retroactively. However, the court reversed the dismissal of the section 1781 claim against the City, holding that the federal court’s confirmation of arbitration awards did qualify as court decisions classifying the work as public work. The case was remanded with instructions to enter a new order overruling the City’s demurrer to the section 1781 cause of action. Nabors was awarded costs on appeal against the City, while Tidelands was awarded costs on appeal against Nabors. View "Nabors Corporate Services, Inc. v. City of Long Beach" on Justia Law

The Coachella Valley Water District (Water District) appealed a judgment finding that the rates it charged for Coachella Canal water violated Article XIII C of the California Constitution. The Water District argued that the rates were lawful and that no refund remedy was authorized. The court rejected both arguments, finding the rates unlawful and that a refund remedy was constitutionally mandated.In the lower court, the Superior Court of Riverside County ruled that the Water District's Canal Water rates and the Irrigation Water Availability Assessment (IWAA) violated Proposition 218. The court found that the Water District's historical priority argument was not persuasive and that the Water District had made no attempt to show that the rates complied with the California Constitution. The court deferred ruling on remedies and later awarded Class 2 customers approximately $17.5 million in refunds and interest for invalid charges from March 2018 through June 2022.The California Court of Appeal, Fourth Appellate District, Division Two, reviewed the case. The court held that Howard Jarvis Taxpayers Association (Howard Jarvis) had standing to challenge the Class 2 rates because domestic customers paid the rates indirectly. The court found that the Class 2 rates were taxes under Article XIII C and did not fall under any exceptions. The court rejected the Water District's arguments that the rates were justified based on historical priority and that they were expenditures of funds. The court also found that the IWAA was an assessment under Proposition 218 and that the Water District failed to show it was proportional to the benefits conferred on the properties.The court affirmed the lower court's ruling on liability and the amount of refund relief awarded. However, the court found that the injunction in the judgment was overbroad and modified the judgment to strike the paragraph enjoining the Water District from imposing any future Canal Water rates and charges that did not comply with Proposition 218. As modified, the judgment was affirmed, and Howard Jarvis was awarded its costs on appeal. View "Howard Jarvis Taxpayers Assn. v. Coachella Valley Water Dist." on Justia Law