Caris Life Sciences, Inc. operated three business units: Caris Diagnostics, TargetNow and Casrisome. The Diagnostics unit was consistently profitable. TargetNow generated revenue but not profits, and Carisome was in the developmental stage. To secure financing for TargetNow and Carisome, Caris sold Caris Diagnostics to Miraca Holdings. The transaction was structured using a "spin/merge" structure: Caris transferred ownership of TargetNow and Carisome to a new subsidiary, then spun off that subsidiary to its stockholders. Owning only Caris Diagnostics, Caris merged with a wholly owned subsidiary of Miraca. Plaintiff Kurt Fox sued on behalf of a class of option holders of Caris. Fox alleged that Caris breached the terms of the Stock Incentive Plan because members of management as Plan Administrator, rather than the Board of Directors, determined how much the option holders would receive. Regardless of who made the determination, the $0.61 per share attributed to the spun off company was not a good faith determination, and resulted from an arbitrary and capricious process. The Court of Chancery found that fair market value was not determined, and the value received by the option holders was not determined in good faith and that the ultimate value per option was determined through a process that was "arbitrary and capricious." Caris appealed, arguing the Court of Chancery erred in arriving at its judgment. Finding no reversible error in the Court of Chancery's judgment, the Delaware Supreme Court affirmed. View "CDX Holdings, Inc. v. Fox" on Justia Law

This case arose out of claims asserted by multiple people against Blue Cross and Blue Shield of Montana, now known as Caring for Montanans, Inc. (CFM) and Montana Comprehensive Health Association (MCHA). The claimants asserted that while they were insured by CFM or MCHA, they submitted claims that the insurers denied based upon exclusions contained in their health insurance policies. These exclusions generally provided that the insurer would not pay for health care costs of the injured insureds if the insureds received, or were entitled to receive, benefits from any automobile liability policy. These exclusions were subsequently disapproved by the Montana Commissioner of Insurance, and the insureds sought the previously-denied benefits. The district court certified a class of claimants for settlement purposes only. The court then held a fairness hearing on a proposed settlement agreement and approved the settlement. Several class members objected to the settlement and appealed to the Montana Supreme Court, arguing they should have been allowed to conduct further discovery to ascertain the fairness of the settlement agreement. The Supreme Court agreed with the objectors and remanded the case to the district court for further discovery and a second fairness hearing. The district court allowed further discovery, held a second fairness hearing, and determined that the same settlement agreement was fair, reasonable, and adequate. The Objectors again appealed. Finding no reversible error, the Supreme Court affirmed. View "Pallister v. BCBS" on Justia Law

Fabry Disease, a rare genetic disorder, leaves afflicted persons unable to synthesize a key enzyme that helps the body break down fats. Untreated, Fabry patients suffer progressively more severe symptoms, including pain in their extremities, gastrointestinal issues, vision and hearing losses, stroke, and heart and kidney failure, eventually leading to premature death. Researchers at the Mt. Sinai School of Medicine developed a method for producing a replacement enzyme, which effectively treats (but does not cure) Fabry. After patenting this method, Mt. Sinai granted an exclusive license to Genzyme, which became the sole producer of the replacement enzyme, "Fabrazyme," the only FDA-approved enzyme replacement therapy for the treatment of Fabry. Genzyme provided the drug to Fabry patients until 2009. After a virus was discovered in improperly cleaned equipment at the company's manufacturing facility, Genzyme reduced production, leading to a Fabrazyme shortage. The company began rationing. Despite setbacks in reestablishing production levels, in 2011 Genzyme diverted some Fabrazyme to the European market, allegedly because of competition Genzyme faced from an alternative enzyme replacement therapy approved only in Europe. Two class action complaints were consolidated and dismissed. The First Circuit affirmed in part, for lack of standing, noting “the utter failure of any plaintiff (other than Mooney) to plausibly allege that he or she suffered an injury in fact as a result of accelerated disease progression or receipt of a contaminated drug.” View "Hochendoner v. Genzyme Corp." on Justia Law

Plaintiffs, all owners of residential properties, filed suit against General Mills alleging that General Mills caused the chemical substance trichloroethylene (TCE) to be released onto the ground and into the environment. Plaintiffs claim that as a result of this contamination, TCE vapors migrated into the surrounding residential area, threatening the health of the residents and diminishing the value of their property. The district court certified a proposed class under Federal Rule of Civil Procedure 23. The court concluded, however, that individual issues predominate the analysis of causation and damages that must be litigated to resolve plaintiffs' claims. Therefore, the court determined that this matter is unsuitable for class certification under Rule 23(b)(3) and the district court abused its discretion in certifying the class. Because the class lacks the requisite commonality and cohesiveness to satisfy Rule 23, the court reversed the certification order and remanded. View "Ebert v. General Mills, Inc." on Justia Law

The Fangmans sought to represent a class of approximately 4,000 to 5,000 individuals who, from 2009 to 2014, retained Genuine Title for settlement and title services and utilized various lenders for the purchase and/or refinancing of their residences, allegedly as a result of referrals from the lenders. All of the lenders are servicers of federally related mortgage loans. The complaint alleges an illegal kickback scheme and that “sham companies” that were created by Genuine Title to conceal the kickbacks, which were not disclosed on the HUD-1 form. After dismissing most of the federal claims, the federal court certified to the Maryland Court of Appeals the question of law: Does Md. Code , Real Prop. [(1974, 2015 Repl. Vol.) 14-127 imply a private right of action?” The statute prohibits certain consideration in real estate transactions. That court responded “no” and held that RP 14-127 does not contain an express or implied private right of action, as neither its plain language, legislative history, nor legislative purpose demonstrates any intent on the General Assembly’s part to create a private right of action. View "Fangman v. Genuine Title, LLC" on Justia Law

Convent Corporation brought an interlocutory appeal of a circuit court’s order denying Convent’s motion for class certification; dismissing without prejudice Convent’s trespass claim and its federal and state statutory claims; and denying Convent’s motion for judgment on the pleadings or, in the alternative, motion for summary judgment, after concluding that there remained genuine issues of material fact. Of these findings, however, only the circuit court’s denial of Convent’s motion for class certification was appealable on an interlocutory basis. On that issue, the circuit court found that because Convent did not present any evidence at a hearing, there was no basis on which to determine whether Convent met the requirements set forth by Rule 23 of the Arkansas Rules of Civil Procedure for class certification. The Supreme Court reversed the circuit court’s decision and remanded for further proceedings. The Court found that the circuit court abused its discretion in denying Convent’s motion solely on Convent’s failure to present evidence at the hearing without considering the evidence in the record, which would have included any admissible evidence submitted as exhibits by the parties in support of their contentions that the motion for class certification should have been granted or denied. View "Convent Corp. v. City of N. Little Rock" on Justia Law

General Motors challenged the district court's order granting in part a motion for class certification in an action brought by plaintiffs under the Florida Deceptive and Unfair Trade Practices Act (FDUTPA), Fla. Stat. 501.201 et seq. The district court certified a class consisting of all Florida purchasers and lessees of 2014 Cadillac CTS sedans. In this case, the district court found the predominance requirement to be satisfied by an essential question common to each class member: whether the inaccurate Monroney sticker provided by General Motors constituted a misrepresentation prohibited by FDUTPA. The court concluded that, by inaccurately communicating that the 2014 Cadillac CTS had attained three perfect safety ratings, General Motors plainly obtained enhanced negotiating leverage that allowed it to command a price premium. The size of that premium represents the damages attributable to that theory of liability. Because that theory is consistent for all class members, the predominance requirement under Federal Rule of Civil Procedure 23(b)(3) is satisfied. This consistency is also sufficient to establish the commonality requirement under Rule 23(a)(2). Because common questions of law and fact predominate, class-wide adjudication appropriately conserves judicial resources and advances society’s interests in judicial efficiency. Finally, the court rejected General Motor's contention that plaintiff failed to prove that she can fairly and adequately protect the interests of the class. Because the district court did not abuse its discretion in certifying the class, the court affirmed the judgment. View "Carriuolo v. General Motors Co." on Justia Law

Montgomery bought a Tassimo, a single-cup coffee brewer manufactured by Kraft Foods, expecting it to brew Starbucks coffee. After the purchase she struggled to find Starbucks T-Discs—single-cup coffee pods compatible with the brewer. The Starbucks T-Disc supply eventually disappeared as Kraft’s business relationship with Starbucks soured. Montgomery sued Kraft and Starbucks on behalf of a class for violations of various Michigan laws. After dismissing several claims and denying class certification on the rest, the district court entered judgment in Montgomery’s favor when she accepted defendants’ joint offer of judgment under FRCP 68. Montgomery appealed the dismissal of her breach of express and implied warranty claims, the denial of class certification on her consumer-protection claims, and the attorney’s fees awarded as part of the Rule 68 settlement (about 3% of what she had requested). The Sixth Circuit affirmed, noting that Montgomery did not purchase the item directly from defendants, for purposes of express warranty, and did not allege that the coffee maker was unfit for its ordinary purpose. View "Montgomery v. Kraft Foods Global, Inc." on Justia Law

Spokeo operates a “people search engine,” which searches a wide spectrum of databases to gather and provide personal information about individuals to various users, including prospective employers. After Robins discovered that his Spokeo-generated profile contained inaccurate information, he filed a class-action complaint alleging that the company willfully failed to comply with the Fair Credit Reporting Act of 1970, 15 U.S.C. 1681e(b). The district court dismissed. The Ninth Circuit reversed, reasoning that Robins’ “personal interests in the handling of his credit information are individualized.” The Supreme Court vacated. A plaintiff invoking federal jurisdiction bears the burden of establishing the “irreducible constitutional minimum” of standing by demonstrating an injury in fact, fairly traceable to the defendant’s challenged conduct, likely to be redressed by a favorable judicial decision. A plaintiff must show that he suffered “an invasion of a legally protected interest” that is “concrete and particularized” and “actual or imminent, not conjectural or hypothetical.” The Ninth Circuit’ focused on particularization: the requirement that an injury “affect the plaintiff in a personal and individual way,” but an injury in fact must be both concrete and particularized. Concreteness requires an injury to actually exist; a plaintiff does not automatically satisfy the injury-in-fact requirement whenever a statute grants a right and purports to authorize a suit to vindicate it. The violation of a statutory procedural right granted can be sufficient in some circumstances to constitute injury in fact, so that a plaintiff need not allege additional harm beyond the one identified by Congress. The Court did not rule on the correctness of the Ninth Circuit’s ultimate conclusion, but stated that Robins cannot satisfy Article III by alleging a bare procedural violation. View "Spokeo, Inc. v. Robins" on Justia Law

Consumer class actions against Global, on behalf of individuals who purchased gym memberships, alleged improper fees, unfair sales practices, lack of disclosures, improper bank account deductions, and improper handling of contract cancellations. The cases claimed breach of contract, unjust enrichment, fraud, and violation of state consumer protection laws. Objectors challenged a settlement, claiming it was unfair under FRCP 23(e); that class counsel’s fees were disproportionate to claims paid; that the settlement unnecessarily required a claims process; and that the settlement contained a “clear-sailing” agreement from Global not to oppose any application for $2.39 million for costs and fees or less and a “kicker” clause, providing that if the court awarded less than $2.39 million, that amount would constitute full satisfaction of Global’s obligation for costs and fees. Some further argued that the settlement failed to provide adequate compensation for Kentucky state-law claims and for plaintiffs who had signed an early, more favorable version of the contract. The district court approved the settlement based on a magistrate judge’s 80-page Report and Recommendation, which addressed each objection. The Sixth Circuit affirmed. Though some courts disfavor clear sailing agreements and kicker clauses, their inclusion alone does not show that the court abused its discretion in approving the settlement. View "Gascho v. Global Fitness Holdings, LLC" on Justia Law