Justia Class Action Opinion Summaries

Axsome Therapeutics, Inc., a biopharmaceutical company, developed AXS-07, an experimental migraine treatment. Beginning in late 2019, Axsome and its officers made public statements about AXS-07’s regulatory prospects and estimated filing dates for FDA approval, which plaintiffs allege were false and misleading because they omitted significant manufacturing and control deficiencies. Throughout 2020 and 2021, Axsome repeatedly delayed the expected FDA filing date for AXS-07. In April 2022, Axsome disclosed that the FDA had identified unresolved issues, causing its stock price to drop.After these disclosures, Axsome faced related litigation in the United States District Court for the Southern District of New York, including a securities class action and derivative lawsuits. The Securities Action was ultimately settled in 2026. The federal derivative suits were consolidated and stayed during the securities litigation. Meanwhile, in April and May 2025, plaintiffs in this Delaware action sent Section 220 books and records demands to Axsome, seeking company documents before filing suit. Axsome produced documents in September 2025, and the plaintiffs then filed this derivative lawsuit in the Court of Chancery of the State of Delaware.The Court of Chancery ruled that the plaintiffs’ claims were untimely under the doctrine of laches, applying Delaware’s three-year statute of limitations by analogy. The court held that the claims accrued by April 22, 2022, at the latest, and that neither the late and informally served Section 220 demands nor the existence of federal litigation tolled or excused the delay. The Court of Chancery concluded that the mere transmission of books and records demands did not suspend the limitations period, found no extraordinary circumstances to rebut the presumption of prejudice, and dismissed the complaint with prejudice as time-barred. View "In Re Axsome Therapeutics, Inc. Stockholder Derivative Litigation" on Justia Law

After defaulting on his credit card debt, the plaintiff’s outstanding balance was sold by the issuing bank to a series of institutional debt buyers. None of these entities were licensed in New Jersey as consumer lenders or sales finance companies at the time they acquired the debt. The last entity in the chain, LVNV Funding LLC, obtained a default judgment against the plaintiff to collect the debt. Subsequently, the plaintiff initiated a separate class action against LVNV and the other assignees, seeking a declaration that the debt purchase was void under the New Jersey Consumer Finance Licensing Act (CFLA) because the buyers lacked the required licenses, and requesting an injunction against further collection efforts.The Superior Court, Law Division, dismissed the plaintiff’s complaint with prejudice, holding that the CFLA does not provide a private right of action for borrowers to void loan contracts based on alleged licensing violations. While the plaintiff’s appeal was pending, the Appellate Division decided Francavilla v. Absolute Resolutions VI, LLC, which held that the CFLA confers no such private right. Relying on that precedent, the Appellate Division affirmed the dismissal and denied the plaintiff’s cross-motion to vacate the underlying default judgment.The Supreme Court of New Jersey reviewed the case to determine whether a borrower may bring a private action under the CFLA to void a loan contract. The Court held that the CFLA does not contain an implied private right of action for borrowers to void loan contracts. The Court reasoned that the legislative history and statutory structure show no intent to permit such private suits, noting that prior statutes expressly granted a private remedy, which was omitted from the CFLA. The voiding provision in the CFLA operates within a penal framework, and absent clear legislative direction, the Court will not infer a private right of action. The judgment of the Appellate Division was affirmed. View "Diana v. LVNV Funding LLC" on Justia Law

A group of Kansas residential natural gas consumers, who purchase gas from local distributors, sued several interstate wholesalers. They alleged that during Winter Storm Uri, the wholesalers manipulated the market and sold natural gas to local distributors at exorbitant prices, leading to unprecedented increases in retail gas prices. The plaintiffs claimed these actions violated the Kansas Consumer Protection Act (KCPA) by forcing local distributors into the high-priced spot market and passing the excessive costs on to consumers. The plaintiffs contended that even though the alleged misconduct occurred in the wholesale market, it had a direct and significant impact on retail customers.The United States District Court for the District of Kansas consolidated five class actions and reviewed the claims. The district court granted the defendants’ joint motion to dismiss, finding that the Federal Energy Regulatory Commission (FERC) has exclusive jurisdiction over interstate wholesale natural gas rates under the Natural Gas Act (NGA), and that the plaintiffs’ state-law claims were preempted. The court concluded that the challenged conduct concerned wholesale transactions, which are subject to comprehensive federal regulation.The United States Court of Appeals for the Tenth Circuit reviewed the case. It affirmed the district court’s decision, holding that the NGA field-preempts the plaintiffs’ KCPA claims because the claims are aimed directly at, and challenge, transactions and practices in the interstate wholesale natural gas market, an area reserved for federal oversight. The Tenth Circuit distinguished this case from Supreme Court precedent where state-law claims were not preempted, emphasizing that these plaintiffs’ claims targeted wholesale sales rather than background marketplace conditions. The court concluded that the exclusive jurisdiction of FERC over wholesale sales foreclosed state-law consumer protection claims based on those transactions. View "Mehl v. BP Energy Company" on Justia Law

The plaintiff was intermittently employed by two car dealerships operated by the defendant corporations from 2022 to 2024. During her employment, she signed several arbitration agreements, including standalone agreements, with both dealerships. These agreements required binding arbitration of “any claims” arising from not only employment but also any other interaction or relationship between the plaintiff and the defendants or their defined third-party beneficiaries. The agreements precluded class actions and included a severance clause for invalid terms.In 2024, the plaintiff filed wage and hour claims both individually and on behalf of a class of current and former employees, seeking a jury trial. The defendants moved to compel arbitration based on the agreements, or alternatively, to sever any invalid terms and enforce the remainder. The Superior Court of Sacramento County denied the motion, relying on Cook v. University of Southern California, and found the agreements procedurally and substantively unconscionable, with unconscionable terms permeating the agreements. The court declined to sever the terms and refused to enforce the agreements.The Court of Appeal of the State of California, Third Appellate District reviewed the appeal. The court affirmed the trial court’s order, holding that the arbitration agreements were substantively unconscionable due to their overly broad scope extending beyond employment-related claims and lack of mutuality, as they required the plaintiff to arbitrate all claims against third parties without reciprocal obligation from those parties. The court found no sufficient justification for the breadth or the nonmutual terms. It also concluded that the unconscionable terms tainted the central purpose of the agreements, so severance was not appropriate. The judgment was affirmed. View "Phan v. Knight Sacramento SU Inc." on Justia Law

Several parents, some acting on behalf of their children, challenged a presidential executive order issued in January 2025. The order declared that children born in the United States to parents who were unlawfully or temporarily present would not be considered “subject to the jurisdiction” of the United States, and therefore would not be entitled to citizenship under the Fourteenth Amendment or the Immigration and Nationality Act. The plaintiffs argued that this order violated both the Constitution and the INA, as it denied citizenship to children based solely on the immigration status of their parents at the time of birth.The United States District Court for the District of New Hampshire reviewed the case and agreed with the plaintiffs. It provisionally certified a nationwide class of children affected by the order and issued a preliminary injunction, blocking enforcement of the executive order. The government appealed, and the Supreme Court of the United States granted certiorari before judgment from the United States Court of Appeals for the First Circuit.The Supreme Court held that children born in the United States to parents who are unlawfully or temporarily present are “subject to the jurisdiction” of the United States, and are entitled to citizenship at birth under the Fourteenth Amendment’s Citizenship Clause. The Court based its holding on the historical understanding of citizenship rooted in the English common law, the repudiation of Dred Scott v. Sandford, and the precedent established in United States v. Wong Kim Ark. The Court affirmed the judgment of the District Court, upholding birthright citizenship for these children. View "Trump v. Barbara" on Justia Law

Clayton Creason worked as an engineer for Elanco US from November 2017 to November 2021. During his employment, Elanco offered a standard paid vacation benefit and an optional “vacation buy” program that allowed employees to purchase an extra week of paid leave by accepting a reduction in weekly salary. Creason participated in this program, reducing his pay by approximately $84 per week for the additional vacation week. After resigning, he filed suit under the Indiana Wage Payment Statute, claiming Elanco owed him the amount of the salary reduction, arguing the program required a written assignment of wages with notice of the right to rescind, as specified by Indiana law.The suit was initially filed in Indiana state court, with Creason seeking class certification for similarly situated employees. Elanco removed the case to the United States District Court for the Southern District of Indiana under the Class Action Fairness Act. The district court denied Creason’s belated motion to remand, finding his delay in seeking remand unreasonable after substantial progress in federal court. The court then dismissed some claims on the pleadings and granted summary judgment to Elanco on the remaining issues, concluding the vacation buy program did not constitute an assignment of wages and that Elanco’s policies concerning unused pandemic-related vacation hours did not violate Indiana law.The United States Court of Appeals for the Seventh Circuit reviewed the case. It held that the district court acted within its discretion in denying the remand request due to Creason’s unreasonable delay. On the merits, the Seventh Circuit affirmed that the vacation buy program was not an assignment of wages under Indiana law and that Elanco was not obligated to pay out unused COVID-related vacation hours. The district court’s decision was affirmed. View "Creason v Elanco US Inc." on Justia Law

An investor in a publicly traded biopharmaceutical company filed a proposed class action against the company and its CEO, alleging securities fraud. The plaintiff claimed that the company misled investors by suggesting that the FDA had approved their methodology for measuring a drug’s efficacy in clinical trials. The alleged misrepresentation was made in a press release that communicated the FDA’s input on the study’s endpoints, but, according to the plaintiff, failed to disclose that the FDA found the methodology unacceptable. When the company later announced it would not use the disputed methodology, the share price initially increased. A decline in the share price occurred over the next two days, during which the stock moved in line with the general market.The United States District Court for the Southern District of New York dismissed the complaint with prejudice, holding that the plaintiff failed to sufficiently plead loss causation, an essential element of a securities fraud claim. The court noted that the share price rose on the day of the corrective disclosure and only declined later, in tandem with the broader market. The district court also denied the plaintiff’s request to amend the complaint, reasoning that amendment would be futile.On appeal, the United States Court of Appeals for the Second Circuit reviewed the district court's dismissal de novo. The appellate court agreed that the plaintiff did not plausibly allege loss causation. It explained that when a stock price does not fall immediately after a corrective disclosure, and a later decline coincides with general market losses, a plaintiff must provide a plausible explanation linking the loss to the alleged fraud. Because the plaintiff failed to do so, the Second Circuit affirmed the district court’s judgment and denial of leave to amend. View "Huey v. Anavex Life Sciences Corporation" on Justia Law

The plaintiff worked as a delivery driver for a furniture distribution company, transporting goods from California warehouses to customers. The furniture was sourced both within and outside California, including from Mexico, and arrived at the distribution centers before being delivered to customers. The plaintiff signed an independent contractor agreement with a delivery-service provider that included an arbitration clause, and subsequently filed two lawsuits against the furniture company and the delivery company: a class action alleging wage and hour violations, and a separate action under the Private Attorneys General Act (PAGA) for civil penalties.The Alameda County Superior Court reviewed the defendants’ omnibus motion to compel arbitration of all claims and to dismiss the plaintiff’s representative PAGA claims. The trial court found that, although the arbitration agreement was valid and enforceable and the defendants had not waived their right to arbitrate, the plaintiff qualified as a “transportation worker” under section 1 of the Federal Arbitration Act (FAA) and was thus exempt from FAA coverage. As a result, state law governed the enforcement of the arbitration agreement. The court ordered certain claims (reimbursement of expenses, wage statement claims, and unfair competition) to arbitration, but allowed wage claims to proceed in court under Labor Code section 229. It denied the motion to dismiss the representative PAGA claims, citing California Supreme Court precedent, and stayed both actions pending arbitration of individual claims.The Court of Appeal of the State of California, First Appellate District, Division One, reviewed these consolidated appeals. The court held that the plaintiff is a transportation worker exempt from the FAA because he played a direct and active role in the interstate movement of goods, even though his deliveries were intrastate and retail in nature. The court affirmed that the plaintiff has standing to pursue non-individual PAGA claims in court, following Adolph v. Uber Technologies, Inc. The order by the trial court was affirmed. View "Betanco v. Living Spaces Furniture, LLC" on Justia Law

In 2016, U.S. Customs and Border Protection faced a surge of individuals seeking admission at ports along the U.S.-Mexico border, often exceeding the capacity for safe processing. To manage this, the Department of Homeland Security instituted a “metering” policy that limited the number of people allowed to cross each day, with CBP officials stationed on the U.S. side of the border to prevent entry beyond daily capacity. The policy’s enforcement meant that some asylum seekers remained in Mexico, unable to present themselves for inspection or apply for asylum immediately.A group of asylum seekers and the advocacy organization Al Otro Lado filed a class action in the United States District Court for the Southern District of California, challenging the legality of metering. The District Court certified a class and granted summary judgment for the plaintiffs, declaring the government’s denial of inspection and asylum processing to those “in the process of arriving in the United States” to be unlawful. After the government rescinded the metering policy, the United States Court of Appeals for the Ninth Circuit affirmed in part, holding that an individual standing in Mexico who encounters a U.S. official at the border “arrives in the United States” for purposes of inspection and asylum eligibility.The Supreme Court of the United States reversed the Ninth Circuit’s decision. It held that under the Immigration and Nationality Act, an alien “arrives in the United States” only upon physically crossing the border. The statutory language does not entitle someone standing in Mexico to inspection or to apply for asylum, nor does it require U.S. officials to inspect such individuals. The Court concluded that the statutory provisions at issue do not have extraterritorial effect and that the metering policy, as applied, was not unlawful under the INA. The judgment was reversed and remanded. View "Mullin v. Al Otro Lado" on Justia Law

Robert Hossfeld received twelve telemarketing calls advertising Allstate Insurance products, despite having previously requested that Allstate not contact him. The calls were made by Atlantic Telemarketing Center, which had been subcontracted by Transfer Kings, a company retained by Allstate’s insurance agents, Fleming and Gilmond. Allstate’s internal do-not-call list included Hossfeld’s number months before the calls occurred. Neither Allstate nor its agents were aware that Atlantic was involved in marketing Allstate insurance until after Hossfeld initiated his lawsuit.Hossfeld sued Allstate in the United States District Court for the Northern District of Illinois, alleging violations of the Telephone Consumer Protection Act (TCPA) because Allstate failed to maintain an adequate do-not-call policy and permitted calls to be made to him after his request. He also sought class certification for other similarly affected individuals. The district court denied class certification, finding Hossfeld had not demonstrated that the proposed class was sufficiently numerous. On cross-motions for summary judgment, the district court ruled in Hossfeld’s favor, holding Allstate vicariously liable for Atlantic’s calls under agency law and awarding treble damages for willful violations.The United States Court of Appeals for the Seventh Circuit reviewed the case. The appellate court affirmed the denial of class certification, agreeing that Hossfeld failed to prove numerosity and impracticability of joinder. However, it reversed the district court’s summary judgment on liability, concluding that Hossfeld failed to show Allstate was liable for Atlantic’s calls under any theory of agency law, including subagency, apparent authority, or ratification. The Seventh Circuit clarified that the willfulness standard under the TCPA requires reckless or knowing conduct, not merely volitional acts. The court affirmed in part and reversed in part, directing judgment for Allstate. View "Hossfeld v Allstate Insurance Co." on Justia Law