Employee-shareholders Steven Nichols, Deborah Deavours, Terry Akers, Thomas Dryden, and Gary Evans appealed a circuit court’s dismissal of their action against HealthSouth Corporation ("HealthSouth"). The employee shareholders at one time were all HealthSouth employees and holders of HealthSouth stock. In 2003, the employee shareholders sued HealthSouth, Richard Scrushy, Weston Smith, William Owens, and the accounting firm Ernst & Young, alleging fraud and negligence. The action was delayed for 11 years for a variety of reasons, including a stay imposed until related criminal prosecutions were completed and a stay imposed pending the resolution of federal and state class actions. In their original complaint (and in several subsequent amended complaints) the employee shareholders alleged that HealthSouth and several of its executive officers mislead investors by filing false financial statements of HealthSouth from 1987 forward. When the employee shareholders filed their action, the Alabama Supreme Court's precedent held: (1) that "[n]either Rule 23.1[, Ala. R. Civ. P.,] nor any other provision of Alabama law required stockholders' causes of action that involve the conduct of officers, directors, agents, and employees be brought only in a derivative action," and (2) that claims by shareholders against a corporation alleging "fraud, intentional misrepresentations and omissions of material facts, suppression, conspiracy to defraud, and breach of fiduciary duty" "do not seek compensation for injury to the [corporation] as a result of negligence or mismanagement," and therefore "are not derivative in nature." In the present case, the Alabama Supreme Court concluded the employee shareholders' claims were direct rather than derivative and that, the trial court erred in dismissing the employee shareholders' claims for failure to comply with Rule 23.1, Ala. R. Civ. P. Furthermore, the Court found employee shareholders' eighth amended complaint related back to their original complaint and thus the claims asserted therein were not barred by the statute of limitations. Accordingly, the judgment of the trial court was reversed and the cause remanded for further proceedings. View "Nichols v. HealthSouth Corporation" on Justia Law

Plaintiffs sued on behalf of a proposed nationwide class of individuals who “owned, own, or acquired” structures on which Owens Corning's "Oakridge" fiberglass asphalt roofing shingles roofing shingles are or have been installed since 1986, claiming that the shingles were “plagued by design flaws that result in cracking, curling and degranulation” and “will eventually fail, causing property damage, and costing consumers substantial removal and replacement costs.” The district court rejected the suit on summary judgment, finding that the claims had been discharged in bankruptcy. The Third Circuit partially reversed. After the case was remanded, others filed similar suits in district courts in other states, which were transferred for consolidation. Plaintiffs proposed two classes: property owners from four states, asserting various state-law claims, and a nationwide class seeking a ruling regarding the legal standard governing whether Owens Corning can use a bankruptcy discharge defense. The Third Circuit affirmed the denial of class certification. The Nationwide Class cannot satisfy Rule 23(a)’s commonality requirement because the only common question it poses can be answered only by an advisory opinion, which is forbidden by Article III. The Four-State Class cannot satisfy Rule 23(b)(3)’s predominance requirement. Plaintiffs did not allege a defect common to the class that might be proved by classwide evidence. View "Gonzalez v. Owens Corning" on Justia Law

The United States Court of Appeals for the Third Circuit certified a question of Delaware law to the Delaware Supreme Court. The plaintiff-appellants worked on banana plantations in Costa Rica, Ecuador, and Panama at various times in the 1970s and 1980s. The defendants-appellees included United States corporations that manufactured and distributed a pesticide called dibromochloropropane (“DBCP”), and other United States corporations that owned and operated the banana plantations. The plaintiffs alleged they suffered adverse health consequences from exposure to DBCP while working on the banana plantations. In 1993, a putative class action lawsuit was filed in state court in Texas; all plaintiffs to this suit were members of the putative class. Before a decision was made on class certification, defendants impleaded a company partially owned by the State of Israel ​and used its joinder as a basis to remove the case to federal court under the Foreign Sovereign Immunities Act (FSIA). After removal, the case was consolidated with other DBCP-related class actions in the United States District Court for the Southern District of Texas. The cases were consolidated. The Texas District Court granted defendants' motion to dismiss for forum non conveniens. The certified question to the Delaware Court centered on whether a class action's tolling ended when a federal district court dismisses a matter for forum non conveniens and, consequently, denies as moot “all pending motions,” which included the motion for class certification, even where the dismissal incorporated a return jurisdiction clause stating that “the court will resume jurisdiction over the action as if the case had never been dismissed for f.n.c.” If it did not end at that time, when did it end based on the facts specific to this case? The Delaware Court responded the federal district court dismissal in 1995 on grounds of forum non conveniens and consequent denial as moot of “all pending motions,” including the motion for class certification, did not end class action tolling. Class action tolling ended when class action certification was denied in Texas state court on June 3, 2010. View "Marquinez, et al. v. Dow Chemical Company, et al." on Justia Law

Employees of Wells Fargo filed putative class arbitrations before the American Arbitration Association, seeking unpaid overtime from Wells Fargo. The Second Circuit affirmed the district court's denial of Wells Fargo's petitions seeking to compel bilateral, rather than class, arbitration. The court assumed without deciding that the question whether an arbitration clause authorized class arbitration was a so-called "question of arbitrability" presumptively for a court, rather than an arbitrator, to decide. Therefore, applying Missouri's arbitration and contract law, the court held that the parties overcame this presumption by clearly and unmistakably expressing their intent to let an arbitrator decide whether they agreed to authorize class arbitration. View "Wells Fargo Advisors, LLC v. Sappington" on Justia Law

Plaintiff Tony Muro entered into an employment contract with defendant Cornerstone Staffing Solutions, Inc. (Cornerstone). The contract included a provision requiring that all disputes arising out of Muro's employment with Cornerstone to be resolved by arbitration. It also incorporated a class action waiver provision. In response to this case, which was styled as a proposed class action and alleged various Labor Code violations, Cornerstone moved to compel arbitration and dismiss the class claims. Relying heavily on Garrido v. Air Liquide Industrial, U.S. LP, 241 Cal.App.4th 833 (2015), the trial court concluded the contract was exempted from the operation of the Federal Arbitration Act (FAA; 9 U.S.C. 1 et seq.) and was instead governed by California law. It further determined that the California Supreme Court's decision in Gentry v. Superior Court, 42 Cal.4th 443 (2007) (overruled by 59 Cal.4th 348(2014)) continued to provide the relevant framework for evaluating whether the class waiver provision in the contract was enforceable under California law. After applying Gentry to the record here, the court found the class waiver provision of the contract unenforceable and denied the motion to compel arbitration. Cornerstone appeals, but finding no error, the Court of Appeal affirmed. View "Muro v. Cornerstone Staffing Solutions" on Justia Law

Appellant filed a notice of appeal from a circuit court’s grant of the Office of Child Support Enforcement’s motion to modify support and for judgment for past due child support. The court of appeals reversed the judgment. The Supreme Court granted Appellant’s petition for review, but Appellant then failed timely to file a brief for the court’s consideration. The Supreme Court vacated the court of appeals’ decision, dismissed the appeal, and reinstated the decision of the circuit court, holding that because Appellant failed to timely file a brief for the court’s consideration, there was no argument for reversal on the merits. View "Harley v. Dempster" on Justia Law

This appeal addressed whether immigration detainees housed in a private contract detention facility in Aurora, Colorado could bring claims as a class under: (1) 18 U.S.C. 1589, a provision of the Trafficking Victims Protection Act (the “TVPA”) that prohibits forced labor; and (2) Colorado unjust enrichment law. The GEO Group, Inc. (“GEO”) owned and operated the Aurora Facility under government contract. While there, Appellees rendered mandatory and voluntary services to GEO: cleaning their housing units’ common areas and performed various jobs through a voluntary work program, which paid them $1 a day. The district court certified two separate classes: (1) all detainees housed at the Aurora Facility in the past ten years (the “TVPA class”); and (2) all detainees who participated in the Aurora Facility’s voluntary work program in the past three years (the “unjust enrichment class”). On interlocutory appeal, GEO argues that the district court abused its discretion in certifying each class under Rule 23(b)(3) of the Federal Rules of Civil Procedure. It primarily contended Appellees’ TVPA and Colorado unjust enrichment claims both required predominantly individualized determinations, making class treatment inappropriate. Finding no reversible error, the Tenth Circuit affirmed class certification. View "Menocal v. The GEO Group" on Justia Law

The Ninth Circuit affirmed the district court's order approving a class settlement between students and Trump University. On appeal, a lone objector desired to opt out of the class and to bring her claims in a separate law suit. As a preliminary matter, the panel held that the objector had Article III standing because she had an interest in the settlement that created a case or controversy. On the merits, the panel held that the class notice did not allow a second opt-out opportunity; due process did not compel a second opt-out opportunity; and the district court did not abuse its discretion in approving the settlement. View "Simpson v. Trump University, LLC" on Justia Law

At issue was whether all state employees, respective of when they retired, were entitled to have their benefits recalculated in accordance with Longley v. State Employees Retirement Commission, 931 A.2d 890 (Conn. 2007).A two-count complaint brought (1) an administrative appeal from the decision of the State Employees Retirement Commission denying a petition for declaratory ruling filed by Plaintiffs, and (2) a declaratory judgment action on behalf of a class, represented by Plaintiffs, of all state employees who retired and began collecting pensions before October 2, 2001. The trial court ruled in favor of Plaintiffs in the administrative appeal but denied relief for the class. The Supreme Court affirmed in part and reversed in part and remanded the judgment with direct to render judgment for the Commission on the administrative appeal, holding (1) Plaintiffs’ claims for recalculation of benefits were time barred; and (2) neither Plaintiffs not the class were entitled to relief. View "Bouchard v. State Employees Retirement Commission" on Justia Law

The Ninth Circuit vacated the district court's order remanding plaintiff's putative class action against Wal-Mart to California state court. The panel held that the district court erred by exceeding its statutory authority in remanding sua sponte based on a nonjurisdictional defect. The panel also held that Wal-Mart did not waive its right to remove by filing a demurrer in state court, when its right to remove pursuant to the Class Action Fairness Act (CAFA), 28 U.S.C. 1332(d), was not ascertainable from plaintiff's pleading. Accordingly, the court remanded to the district court for further proceedings. View "Kenny v. Wal-Mart Stores, Inc." on Justia Law