Fred Duran filed a putative class action complaint against Obesity Research Institute, LLC (ORI) and Wal-Mart Stores, Inc. (Wal-Mart) (collectively, defendants). Duran alleged defendants falsely claimed that ORI's products, Lipozene and MetaboUp, had weight loss benefits. The court approved a claims-made settlement providing that class members submitting a claim without proof of purchase would receive $15, and those submitting receipt(s) would receive one refund of double the unit price paid. The settlement also provided that ORI would cease making certain assertions in product advertising. Defendants also agreed to not oppose a motion seeking $100,000 in attorney fees to class counsel. Objectors, class members DeMarie Fernandez, Alfonso Mendoza, and Brian Horowitz appealed, contending the settlement was the product of collusion. Objectors claimed the class did not receive sufficient notice of settlement, and the settlement was unreasonable and inadequate. They also contended the attorney fee award was excessive. The Court of Appeal reviewed the case and concluded that the trial court's judgment had to be reversed because the class notice failed in its fundamental purpose, to apprise class members of the terms of the proposed settlement. "The erroneous notice injected a fatal flaw into the entire settlement process and undermines the court's analysis of the settlement's fairness." View "Duran v. Obesity Research Institute" on Justia Law

Richardson was placed in Lewisburg Penitentiary's Special Management Unit (SMU) program, intended for inmates with histories of violence and individuals who “participated in or had leadership roles in geographical groups/gang related activity." In a purported class action, seeking damages and injunctive relief for “[a]ll persons who are currently or will be imprisoned in the SMU program at USP Lewisburg,” Richardson alleged that through a “pattern, practice or policy,” officials at USP Lewisburg frequently placed inmates with hostile cellmates, unnecessarily increasing the risk of violence and that if an inmate refused to accept a hostile cellmate, he would be placed in painful restraints. Richardson claims that he was subjected to this policy. The district court found Richardson’s class definition “untenable because it [wa]s not objectively, reasonably ascertainable.” Meanwhile, Richardson was transferred out of USP Lewisburg. The Third Circuit remanded, holding that Richardson’s class claims are not moot. When individual claims for relief are acutely susceptible to mootness, a would-be class representative may, in some circumstances, continue to seek certification after losing his personal stake in the case. Richardson may continue to seek class certification based on the Third Circuit’s intervening 2015 holding, in Shelton v. Bledsoe, that ascertainability is not required for Rule 23(b)(2) classes. View "Richardson v. Dir., Fed. Bureau of Prisons" on Justia Law

Plaintiff filed a class action against The Money Store, alleging overcharge of late fees on mortgages. After plaintiff prevailed in the jury trial, the district court granted defendants' post-verdict motion to decertify a class that was previously certified pursuant to Federal Rule of Civil Procedure 23(a) and (b)(3), and entered judgment in favor of plaintiff only. The court held that a district court has power, consistent with the Seventh Amendment and Rule 23, to decertify a class after a jury verdict and before the entry of final judgment; in considering such decertification (or modification), the district court must defer to any factual findings the jury necessarily made unless those findings were “seriously erroneous,” a “miscarriage of justice,” or “egregious.” Applying these principles, the court concluded that the district court did not abuse discretion in determining that Rule 23’s requirements were not met and in decertifying the class. Accordingly, the court affirmed the judgment. An accompanying summary order affirms the denial of plaintiff’s motion for a new trial as to a second claim. View "Mazzei v. Money Store" on Justia Law

This appeal addressed a collective action alleging nonpayment of overtime, as required by state law under Labor Code section 510 and federal law under the Fair Labor Standards Act of 1938 (FLSA). Plaintiff Jose Luis Morales and 177 other similarly situated plaintiffs (collectively, appellants) sued their employer, the 22nd District Agricultural Association of the State of California (the DAA), alleging nonpayment of overtime. Appellants were seasonal employees of the DAA who assist with amusement and seasonal operations. Appellants contended that reversal of the judgment in favor of the DAA on their FLSA claim was required because the trial court: (1) improperly denied their nonsuit motion; (2) erred in instructing the jury; (3) provided an erroneous special verdict form; and (4) improperly excluded party witnesses from the courtroom. The Court of Appeal found that appellants did not meet their burden to demonstrate reversible error. Furthermore, the Court concluded that the trial court properly sustained the DAA's demurrer to appellants' section 510 claim, but erred in denying leave to amend. View "Morales v. 22nd Dist. Agricultural Assn." on Justia Law

The Southeast Louisiana Urban Flood Control Project aimed to reduce flooding by improving draining canals, increasing capacity for pump stations, and constructing new pump stations. Its efforts at constructing a new canal in New Orleans’s Ninth Ward resulted in complaints of property damage to surrounding homes. Plaintiffs filed suit seeking to represent a class of property owners and residents who owned immovable property or resided within 1,000 feet to the north or south of the Project. The district court denied plaintiffs’ motion, concluding that they failed to satisfy the requirements of commonality under Rule 23(a) and predominance and superiority under Rule 23(b)(3). The court agreed with the district court that jurisdiction exists under the federal officer removal statute. The court concluded that this suit seeks to recover different damages caused by different acts committed by different defendants at different times over a five year period. Therefore, the district court did not abuse its discretion in concluding that individualized issues of causation and damages would predominate. The court affirmed the denial of certification and remanded to allow the district court to consider how the case of the named plaintiffs should proceed. View "Crutchfield v. Sewerage & Water Bd." on Justia Law

David Helmer and Felicia Muftic were lead plaintiffs representing a certified class of homeowners who contended a radiant-heating hose, the Entran 3, manufactured by Goodyear Tire & Rubber Company (“Goodyear”) suffered design defects leading to cracks and leaks (the hose was used to convey hot fluid to provide heating for homes, installed permanently in walls, under flooring and in ceilings and concrete. At trial, Goodyear argued the leaks were caused by third parties’ improper installations. The jury returned a verdict in favor of Goodyear, concluding the Entran 3 was not defectively designed. On appeal, Plaintiffs argued that insufficient evidence supported the district court’s instruction on nonparty fault. They further argued that the district court failed to require proof of a necessary fact before instructing the jury regarding Colorado’s presumption that a product was not defective if ten years have passed since it was first sold. After review, the Tenth Circuit concluded that any error in the third-party liability instruction was harmless, and the inclusion of the instruction as to the presumption was proper. View "Helmer v. Goodyear Tire & Rubber" on Justia Law

A mandatory arbitration clause is contained in each deposit agreement for customers of appellee SunTrust Bank. The clause permits an individual depositor to reject the agreement’s mandatory arbitration clause by giving written notice by a certain deadline. SunTrust claimed it drafted the arbitration clause in such a way that only an individual depositor may exercise this right to reject arbitration on his or her own behalf, thereby permitting that individual to file only an individual lawsuit against the bank. But SunTrust asserted that even if, as it has been determined here, the filing of a lawsuit prior to the expiration of the rejection of arbitration deadline operated to give notice of the individual plaintiff’s rejection of arbitration, the complaint could not be brought as a class action because the filing of a class action could not serve to reject the arbitration clause on behalf of class members who have not individually given notice. Jeff Bickerstaff, Jr., who was a SunTrust Bank depositor, filed a complaint against SunTrust on behalf of himself and all others similarly situated alleging the bank’s overdraft fee constitutes the charging of usurious interest. At the time Bickerstaff opened his account (thereby agreeing to the terms of SunTrust’s deposit agreement), that agreement included a mandatory arbitration provision. In response to the ruling of a federal court in an unrelated action finding the arbitration clause in SunTrust’s deposit agreement was unconscionable at Georgia law, and after Bickerstaff’s complaint had been filed, SunTrust amended the arbitration clause to permit a window of time in which a depositor could reject arbitration by sending SunTrust written notification that complied with certain requirements. SunTrust had not notified Bickerstaff or its other customers of this change in the arbitration clause of the deposit agreement at the time Bickerstaff filed his complaint, but the complaint, as well as the first amendment to the complaint, was filed prior to the amendment’s deadline for giving SunTrust written notice of an election to reject arbitration. It was only after Bickerstaff’s complaint was filed that SunTrust notified Bickerstaff and its other existing depositors, by language printed in monthly account statements distributed on August 24, 2010, that an updated version of the deposit agreement had been adopted, that a copy of the new agreement could be obtained at any branch office or on-line, and that all future transactions would be governed by the updated agreement. SunTrust appealed the order denying its motion to compel Bickerstaff to arbitrate his claim, and the Court of Appeals affirmed the trial court, finding that the information contained in the complaint filed by Bickerstaff’s attorney substantially satisfied the notice required to reject arbitration. Bickerstaff appealed the order denying his motion for class certification, and in the same opinion the Court of Appeals affirmed that decision, holding in essence, that the contractual language in this case requiring individual notification of the decision to reject arbitration did not permit Bickerstaff to reject the deposit agreement’s arbitration clause on behalf of other putative class members by virtue of the filing of his class action complaint. The Georgia Supreme Court reversed that decision, holding that the terms of the arbitration rejection provision of SunTrust’s deposit agreement did not prevent Bickerstaff’s class action complaint from tolling the contractual limitation for rejecting that provision on behalf of all putative class members until such time as the class may be certified and each member makes the election to opt out or remain in the class. Accordingly, the numerosity requirement of OCGA 9-11-23 (a) (1) for pursuing a class complaint was not defeated on this ground. View "Bickerstaff v. SunTrust Bank" on Justia Law

Attorney Turza sent fax advertisements to accountants. In 2013, the Seventh Circuit affirmed that these faxes violated the Telephone Consumer Protection Act (TCPA), 47 U.S.C. 227, but reversed a plan to distribute a $4.2 million fund to the class members and donate any remainder to charity. Meanwhile, Turza posted a $4.2 million supersedeas bond. Invoking the common-fund doctrine, the district judge awarded class counsel about $1.4 million. TCPA authorizes an award of up to $500 per improper fax. The court ordered two-thirds of that sent to every class member. If some members fail to cash their checks or cannot be found, there would be a second distribution. The maximum paid out per fax would be $500. If money remains, the residue returns to Turza. The Seventh Circuit reversed in part. This is not a common-fund case; suits under TCPA seek recovery for discrete wrongs. If a recipient cannot be located, or spurns the money, counsel are not entitled to be paid for that fax. TCPA is not a fee-shifting statute. Turza is not required to pay the class’s attorneys just because he lost the suit. Distributing more than $500 per fax ($333 to the recipient and $167 to counsel) would either exceed the statutory cap or effectively shift legal fees to Turza. The $4.2 million represents security for payment, so once the debt is satisfied, the surplus can be returned to Turza. View "Holtzman v. Turza" on Justia Law

Peter Deacon, individually and on behalf of all others similarly situated, brought an action in the United States District Court for the Northern District of California against Pandora Media, Inc., which operated an Internet-based music-streaming program. In relevant part, Deacon claimed that Pandora violation of the Michigan preservation of personal privacy act (PPPA) by publically disclosing personal information concerning his music preferences. The federal district court ruled in favor of defendant, and under MCR 7.305(B), the United States Court of Appeals for the Ninth Circuit certified a question of Michigan law to the Michigan Supreme Court: "Has Deacon stated a claim against Pandora for violation of the VRPA by adequately alleging that Pandora is [in] the business of 'renting' or 'lending' sound recordings, and that he is a 'customer' of Pandora because he 'rents' or 'borrows' sound recordings from Pandora? " Having heard oral argument and considered the issues involved, the Michigan Supreme Court granted the Ninth Circuit’s request to answer its question. However, the Michigan Court limited the question to whether Deacon could be characterized under the PPPA as a "customer" of Pandora because at the relevant time he was a person who "rent[ed]" or "borrow[ed]" sound recordings from defendant. The Supreme Court concluded that Deacon was not such a "customer." View "In re Certified Question (Deacon v. Pandora)" on Justia Law

Plaintiffs, current and former detainees, brought a class action under 42 U.S.C. 1983 against Cook County, claiming that the level of dental care at the Jail demonstrated deliberate indifference in violation of the Eighth and Fourteenth Amendments. The court originally certified two classes of plaintiffs under FRCP 23, but later decertified one class and modified the other, finding that the Jail’s implementation of a consent order with the Department of Justice eliminated a common question concerning inadequate staffing and brought care into compliance with national standards. The court could not find another common factor among the claims, noting that “treatment of dental pain may fall below the deliberate indifference threshold for many reasons and at many stages.” The court then determined that the detainees’ motion for injunctive relief was moot. While an appeal was pending, the detainees unsuccessfully moved for a new trial (FRCP 60(b)) based on newly discovered evidence. The Seventh Circuit affirmed, upholding decertification of the classes because of the lack of a common issue of fact or law. The detainees’ questions do not point to the type of systematic and gross deficiency that would lead to a finding that all detainees are effectively denied treatment; they did not allege a specific policy that directly causes delay, nor a pattern of egregious delays across the entire class. Filing a Rule 60(b) motion during the interlocutory appeal was inappropriate; there was no final judgment in the case. View "Phillips v. Sheriff of Cook County" on Justia Law