Justia Class Action Opinion Summaries

Plaintiffs filed a putative class action raising warranty claims arising out of crashes or injuries caused by the alleged "rollaway effect" of certain Honda Civic vehicles. The district court dismissed plaintiffs' claims under the Magnuson-Moss Warranty Act (MMWA) and state law for express and implied warranty against Honda. The Ninth Circuit held that the Class Action Fairness Act (CAFA) may not be used to evade or override the MMWA's specific numerosity requirement. In this case, plaintiffs name only three individuals, but argue that, by satisfying CAFA requirements, they are relieved of the MMWA's obligation to name at least one hundred plaintiffs. The panel rejected plaintiffs' argument and affirmed the district court's dismissal of the MMWA claim. The panel vacated the district court's dismissal of the state law claims, holding that the district court erred in not considering whether plaintiffs' state law claims met the diversity requirements of CAFA even if the MMWA claim failed. Therefore, the district court improperly dismissed the state law claims based only on lack of supplemental jurisdiction. View "Floyd v. American Honda Motor, Co." on Justia Law

Reckitt developed Suboxone tablets, a prescription drug used to treat opioid addiction. Toward the end of its seven-year period of exclusivity in which other manufacturers could not introduce generic versions, Reckitt developed an under-the-tongue film version of Suboxone, which would enjoy its own exclusivity period. Generic versions of Suboxone tablets would not be rated as equivalent to the name-brand Suboxone film, so state substitution laws would not require pharmacists to substitute generic Suboxone tablets if a patient were prescribed Suboxone film. Purchasers filed suit, alleging that Reckitt’s transition to Suboxone film was coupled with efforts to eliminate the demand for Suboxone tablets and to coerce prescribers to prefer film in order to maintain monopoly power, in violation of the Sherman Act, 15 U.S.C. 2. The Purchasers submitted an expert report indicating that, due to Reckitt’s allegedly-anticompetitive conduct, the proposed class paid more for brand Suboxone products. The district court certified a class of “[a]ll persons or entities . . . who purchased branded Suboxone tablets directly from Reckitt” during a specified period. The Third Circuit affirmed. Common evidence exists to prove the Purchasers’ antitrust theory and the resulting injury. Although allocating the damages among class members may be necessary after judgment, such individual questions do not ordinarily preclude the use of the class action device; the court correctly found that common issues predominate. View "In re: Suboxone Antitrust Litigation" on Justia Law

It is generally not legal error for a district court to hold that a settlement class satisfies predominance, particularly for a class asserting a unifying federal claim, without first performing a choice-of-law analysis. The Ninth Circuit affirmed the district court's holding that the class satisfied Federal Rule of Civil Procedure 23(b)(3)'s predominance requirement under the precedent set by the panel's recent en banc decision in In re Hyundai & Kia Fuel Economy Litigation, 926 F.3d 539 (9th Cir. 2019). The class action complaint alleged that Wells Fargo pressured their employees to meet arbitrary and unrealistic sales quotas unrelated to true consumer demand which resulted in Wells Fargo's systematic exploitation of its customers for profit. Applying Hyundai, the panel held that the district court did not abuse its discretion in holding that common questions predominate. The panel explained that the Fair Credit Reporting Act (FCRA) claim unified the class because plaintiffs could show that the FCRA's elements were proven by a common course of conduct, and the existence of potential state-law claims did not outweigh the FCRA claim's importance. View "Jabbari v. Wells Fargo & Co." on Justia Law

In 2013, Allstate announced a new strategy in its auto insurance business: attracting more new customers by “softening” its underwriting standards. Allstate disclosed that new and potentially riskier customers might file more claims and that Allstate would monitor and adjust business practices accordingly. Two years later, Allstate’s stock price dropped by more than 10 percent, immediately after Allstate announced that the higher claims rates it had experienced for three quarters had been fueled at least in part by the company’s recent growth strategy and that the company was “tightening" its underwriting parameters. The plaintiffs claim that Allstate initially intentionally misled the market by falsely attributing the increases to other factors. The Seventh Circuit vacated the certification of a plaintiff class after reviewing recent Supreme Court decisions concerning the fraud-on-the-market presumption of reliance, which allows plaintiffs to avoid proving individual reliance upon fraudulent misrepresentations and omissions. The issues of materiality, loss causation, and transaction causation are left for the merits but the court must consider evidence on those issues in deciding class certification using the presumption, if the defense offers it to show the absence of transaction causation (price impact). The district court granted class certification after admitting, but without engaging with, defense evidence offered to defeat the presumption--an expert opinion that the alleged misrepresentations had no impact on the stock price. Class certification may be appropriate here, but the district court must decide at the class stage the price impact issue. The court directed modification of any class certification to limit the class to buyers of Allstate common stock rather than any other securities. View "Carpenters Pension Trust Fund for Northern California v. Allstate Corp." on Justia Law

The Supreme Court reversed the judgment of the court of appeals concluding that Plaintiff had opted out of a class-action settlement that was approved in Seifi v. Mercedes-Benz USA, LLC, holding that McAdams's status as a member of the Seifi class was determined in that case, and therefore, McAdams's claim in this case was barred by res judicata. While the Seifi class action was pending, McAdams filed a complaint against Mercedez-Benz USA, Mercedez-Benz Easton, and Mercedes-Benz of New Rochelle, alleging claims relating to issues with the balance-shaft gear and the transmission conductor plate of her Mercedes. After the judgment in the Seifi class action was issued, the trial court determined that McAdams was bound by the Seifi class action settlement because she had not formally opted out of the class action, and therefore, her balance-shaft-gear claim was barred by res judicata. The court of appeals reversed, concluding that McAdams had opted out of the Seifi class-action settlement. The Supreme Court reversed, holding that McAdams's claim that she had not opted out of the class action was barred by res judicata because the federal court determined who had opted out in its entry adopting the Seifi class-action settlement. View "McAdams v. Mercedes-Benz, USA, LLC" on Justia Law

The Ninth Circuit reversed the district court's order granting plaintiff's motion to remand to state court because it effectively required Harley-Davison to provide evidence that the proffered punitive damages amount is probable or likely. The question presented on appeal is if the defendant relies on potential punitive damages to meet the amount-in-controversy requirement for removal under the Class Action Fairness Act (CAFA), what is the defendant’s burden in establishing that amount? The panel held that the defendant must show that the punitive damages amount is reasonably possible. In this case, Harley-Davidson met its burden of showing that the amount in controversy exceeds $5 million under CAFA by establishing that the proffered punitive/compensatory damages ratio is reasonably possible. View "Greene v. Harley-Davidson, Inc." on Justia Law

The Baptistes filed suit on behalf of a class of homeowner-occupants and renters (about 8,400 households) claiming interference with the use and enjoyment of their homes and loss in property value caused by noxious odors and other air contaminants emanating from the 224-acre Bethlehem Landfill. The Third Circuit reversed the dismissal of the suit. While everyone in the community—including visitors, commuters, and residents—may suffer from having to breathe polluted air in public spaces, the Baptistes have identified cumulative harms that are unique to residents, such as the inability to use and enjoy their outdoor spaces. These injuries are above and beyond any injury to the public; the Baptistes sufficiently alleged a “particular damage” to sustain a private claim for public nuisance. They also stated a claim for private nuisance. Pennsylvania law does not reject a private nuisance claim on the ground that the property affected was too far from the source of the alleged nuisance. Nor does Pennsylvania law condition an individual’s right to recover private property damages on a nuisance theory on the size of the nuisance or the number of persons harmed, as opposed to the nature of the rights affected or the degree of the harm suffered. The question remains whether the Baptistes have sufficiently pleaded a cognizable injury to state an independent negligence claim. View "Baptiste v. Bethlehem Landfill Co." on Justia Law

Under its replacement-cost homeowner insurance contracts, State Farm calculated its payment obligations by estimating the amount it would cost to repair or replace damaged property and subtracting depreciation and the deductible. During the class period, State Farm depreciated costs for both materials and labor. Policyholders filed a putative class action. The Sixth Circuit held that in an insurance contract that incorporates Kentucky’s “replacement cost minus depreciation” formula, the insurer cannot depreciate the costs of labor when determining payments. State Farm changed its practice and created a refund program for those who had received payments between the decision and the date State Farm stopped deducting labor depreciation. Most policyholders received refunds of less than $1,000. The court certified the class as: All persons and entities that received “actual cash value” payments ... from State Farm … for loss or damage to a dwelling or other structure in … Kentucky ... where the cost of labor was depreciated," excluding those that received payment in the full amount of insurance. The Sixth Circuit affirmed. The claims share a common legal question central to the validity of each claim: whether State Farm breached the standard form contracts by deducting labor depreciation. No individualized proof is necessary to resolve this question on a classwide basis. That common question predominates over individual questions, although damages will vary. The court did not abuse its discretion in finding class litigation to be the superior method of adjudication and class membership is ascertainable View "Hicks v. State Farm Fire & Casualty Co." on Justia Law

Plaintiff filed a class action in state court alleging that Costco violated California Labor Code 1198 by failing to provide her and other employees suitable seating. After Costco removed the case to federal court under 28 U.S.C. 1332(a) and the Class Action Fairness Act (CAFA), the district court ultimately granted summary judgment to plaintiff. The Ninth Circuit vacated the district court's grant of summary judgment with instructions to remand to state court, holding that the district court lacked subject matter jurisdiction at the time the action was removed to federal court. The panel first held that the district court lacked diversity jurisdiction under section 1332(a). The panel explained that, because plaintiff's pro-rata share of civil penalties, including attorney's fees, totaled $6,600 at the time of removal, and the claims of other member service employees may not be aggregated under Urbino v. Orkin Services of California, Inc., 726 F.3d 1118 (9th Cir. 2013), the $75,000 jurisdictional threshold was not met. The panel also held that the district court lacked subject matter jurisdiction under CAFA because plaintiff's stand-alone Private Attorney General Act lawsuit was not, and could not have been, filed under a state rule similar to a Rule 23 class action. Therefore, the district court erred by not remanding the case to state court. View "Canela v. Costco Wholesale Corp." on Justia Law

Plaintiff Regina Little asserted claims on her own behalf and on behalf of other New Jersey owners and lessees of 1997, 1998, 1999, and 2000 Kia Sephia vehicles distributed by defendant Kia Motors America, Inc., alleging that those vehicles had a defective brake system. The central question in this appeal was whether the trial court properly permitted plaintiff’s theory of damages based on the cost of brake repairs to be asserted classwide, supported only by aggregate proofs. The jury determined that defendant had breached its express and implied warranties and that the class had sustained damages. The jury found that the class members had suffered $0 in damages due to diminution in value but that each class member had sustained $750 in damages “[f]or repair expenses reasonably incurred as a result of the defendant’s breach of warranty.” The trial court granted defendant’s motion to decertify the class as to the quantum of damages each individual owner suffered. The parties cross-appealed. The Appellate Division reversed the trial court’s post-trial determinations, reinstated the jury’s award for out-of-pocket repair costs based on plaintiff’s aggregate proofs, and remanded for an award of attorneys’ fees. The appellate court held that, notwithstanding the jury’s rejection of plaintiff’s diminution-in-value theory, the trial court should have ordered a new trial on both theories of damages, which it found were not “fairly separable from each another.” Although aggregate proof of damages can be appropriate in some settings, the New Jersey Supreme Court considered such proof improper as presented in this case. The trial court erred when it initially allowed plaintiff to prove class-members’ out-of-pocket costs for brake repairs based on an estimate untethered to the experience of plaintiff’s class. The trial court properly ordered individualized proof of damages on plaintiff’s brake-repair claim based on the actual costs incurred by the class members. Thus, the trial court’s grant of defendant’s motions for a new trial and for partial decertification of the class were a proper exercise of its discretion. View "Little v. Kia Motors America, Inc." on Justia Law