Justia Class Action Opinion Summaries

Plaintiff filed suit against Ralphs alleging violations of the California Labor Code and California Business and Professions Code 17200 et seq. On appeal, Ralphs challenged the district court's denial of its motion to compel arbitration. The court concluded that Ralphs' arbitration policy was unconscionable under California law. The court concluded that Ralphs' arbitration was procedurally unconscionable where, among other things, agreeing to Ralphs' policy was a condition of applying for employment and the terms were not disclosed to plaintiff until three weeks after she had agreed to be bound by it. In regards to substantive unconscionability, the court concluded, among other things, that Ralphs' terms required that the arbitrator impose significant costs on the employee up front, regardless of the merits of the employee's claims, and severely limited the authority of the arbitrator to allocate arbitration costs in the award. Further, the state law supporting such a conclusion was not preempted by the Federal Arbitration Act, 9 U.S.C. 2. Accordingly, the court affirmed and remanded for further proceedings. View "Chavarria v. Ralphs" on Justia Law

Plaintiffs filed a putative class action suit on behalf of current and former students, alleging that Corinthian engaged in a deceptive scheme to entice the enrollment of prospective students in violation of California law. Corinthian moved to compel arbitration pursuant to arbitration clauses in plaintiffs' enrollment agreements. The court concluded that the Broughton-Cruz rule, which exempted claims for "public injunctive relief" from arbitration, was preempted by the Federal Arbitration Act (FAA), 9 U.S.C. 2. In the alternative, the court concluded that plaintiffs' claims were within the scope of their arbitration agreements and plaintiffs were required to arbitrate their public injunction claims. Accordingly, the court reversed the district court's order denying Corinthian's motion to compel arbitration and remanded. View "Ferguson, et al. v. Corinthian Colleges, Inc., et al." on Justia Law

Plaintiffs filed a putative class action suit against CMH Homes, Vanderbilt and others in state court. The companies subsequently filed a petition in the district court alleging that plaintiffs' claims were subject to mandatory arbitration. The district court dismissed the petition. The companies argued that the district court erred by concluding that it lacked diversity jurisdiction. The court concluded that the district court correctly reasoned that Vaden undermined Advance America and required the court's departure from that precedent. Following the Vaden approach, the district court properly looked through the arbitration petition to the state court complaint to determine the amount in controversy. Nonetheless, the court remanded for the district court to calculate an amount in controversy and to determine on that basis whether it had jurisdiction over the putative class action under 28 U.S.C. 1332(d)(2). View "CMH Homes, Inc., et al. v. Goodner, et al." on Justia Law

Defendant in this case was a franchisor and Plaintiffs were its franchisees. After Plaintiffs sued Defendant, the district court certified a class, excluding those franchisees whose agreements with Defendant contained clauses expressly requiring arbitration. While those franchisees pursued arbitration, the arbitrator imposed a stay of the arbitrations of ten of those franchisees. The district court later concluded that Defendant had violated an order requiring it to obtain judicial permission before making any motion to delay or prevent arbitration proceedings and sanctioned Defendant by admitting to the class the ten franchisees, relieving them of their obligations to arbitrate. Defendant then unsuccessfully filed a motion to reconsider the sanction and to stay the ten franchisees' judicial proceedings pending arbitration. The First Circuit Court of Appeals reversed, holding (1) the district court's determination that Defendant violated the order was an abuse of discretion; and (2) therefore, there was no basis for the sanction, and Defendant's motion to stay should have been granted. View "Awuah v. Coverall N. Am., Inc." on Justia Law

E&Y appealed from the district court's order denying its motion to dismiss or stay proceedings, and to compel arbitration, in a putative class action brought by its former employees. At issue on appeal was whether an employee could invalidate a class-action waive provision in an arbitration agreement when that waiver removed the financial incentive for her to pursue a claim under the Fair Labor Standards Act of 1938 (FLSA), 29 U.S.C. 201, et seq. The court held that the FLSA did not include a "contrary congressional command" that prevented a class-action waiver provision in an arbitration agreement from being enforced by its terms. The court also held that, in light of the supervening decision of the Supreme Court in American Express Co v. Italian Colors Restaurant, the employee's argument that proceeding individually in arbitration would be "prohibitively expensive" was not a sufficient basis to invalidate the action waiver provision at issue here under the "effective vindication doctrine." Accordingly, the court reversed and remanded for further proceedings. View "Sutherland v. Ernst & Young LLP" on Justia Law

Plaintiffs filed a putative consumer class action suit against DirecTV and Best Buy, alleging violations of California's consumer protection laws. The arbitration agreement at issue in this instance was a customer service agreement between DirecTV and individuals who believed they purchased DirecTV equipment from Best Buy stores. AT&T Mobility v. Concepcion held that Section 2 of the Federal Arbitration Act (FAA), 9 U.S.C. 2, preempted the State of California's rule rendering unenforceable arbitration provisions in consumer contracts that waive collective or class action proceedings. The court concluded that the arbitration agreement in this case was enforceable under Concepcion and, therefore, the district court did not err in compelling plaintiffs to arbitrate their claims against DirecTV. The court concluded, however, that plaintiffs were not required to arbitrate their claims with Best Buy. Accordingly, the court affirmed in part, reversed in part, and remanded for further proceedings. View "Murphy v. DirecTV, Inc." on Justia Law

Plaintiffs brought a putative class action against Bresnan alleging violations of the Electronic Communications Privacy Act, 18 U.S.C. 2520-21, the Computer Fraud and Abuse Act, 18 U.S.C. 1030, and Montana state law for invasion of privacy and trespass to chattels in connection with targeted advertising they received while using Bresnan's Internet service. The district court declined to enforce a choice-of-law clause in the service subscriber agreement, provided to all Bresnan customers, specifying that New York law should apply, and an arbitration clause. The court held that AT&T Mobility LLC v. Concepcion further limited the savings clause in the Federal Arbitration Act (FAA), 9 U.S.C. 1-2 et seq., and therefore, the court held that the FAA preempted Montana's reasonable expectations/fundamental rights rule and that the district court erred in not applying New York law because a state's preempted public policy was an impermissible basis on which to reject the parties' choice-of-law selection. Accordingly, the court vacated the district court's denial of Bresnan's motion to compel arbitration and remanded to the district court with instructions to apply New York law to the arbitration agreement. View "Mortensen, et al. v. Bresnan Communications, LLC" on Justia Law

This case involved arbitration proceedings stemming from plaintiff's class action suit alleging, among other things, that SouthernLINC's termination fees were unlawful penalties under Georgia law. SouthernLINC, a wireless provider, appealed the district court's denial of its motion to vacate two arbitration awards. Under the standard set forth by the Supreme Court in Oxford Health Plans LLC v. Sutter, the court concluded that the arbitrator did not exceed his powers under section 10(a)(4) of the Federal Arbitration Act (FAA), 9 U.S.C. 1 et seq., either in construing the arbitration clause as he did or in certifying a class. Accordingly, the court affirmed the judgment of the district court. View "Southern Communications Serv. v. Thomas" on Justia Law

An agreement between American Express and merchants who accept American Express cards, requires that all of their disputes be resolved by arbitration and provides that there “shall be no right or authority for any Claims to be arbitrated on a class action basis.” The merchants filed a class action, claiming that American Express violated section 1 of the Sherman Act and seeking treble damages under section 4 of the Clayton Act. The district court dismissed. The Second Circuit reversed, holding that the class action waiver was unenforceable and that arbitration could not proceed because of prohibitive costs. The Circuit upheld its reversal on remand in light of a Supreme Court holding that a party may not be compelled to submit to class arbitration absent an agreement to do so. The Supreme Court reversed. The FAA reflects an overarching principle that arbitration is a matter of contract and does not permit courts to invalidate a contractual waiver of class arbitration on the ground that the plaintiff’s cost of individually arbitrating a federal statutory claim exceeds the potential recovery. Courts must rigorously enforce arbitration agreements even for claims alleging violation of a federal statute, unless the FAA mandate has been overridden by a contrary congressional command. No contrary congressional command requires rejection of this waiver. Federal antitrust laws do not guarantee an affordable procedural path to the vindication of every claim or indicate an intention to preclude waiver of class-action procedures. The fact that it is not worth the expense involved in proving a statutory remedy does not constitute the elimination of the right to pursue that remedy. View "Am. Express Co. v. Italian Colors Rest." on Justia Law

Goldman Sachs appealed from an order of the district court denying their motion to compel arbitration of plaintiff's claims of gender discrimination. Plaintiff and others alleged that Goldman Sachs engaged in a continuing pattern and practice of discrimination based on sex against female employees in violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C. 2000 et seq., and the New York City Human Rights Law, Administrative Code of the City of New York 8-107 et seq. On appeal, plaintiff contended that the arbitration clause in her agreement must be invalidated because arbitration would preclude her from vindicating a statutory right. The court disagreed and held that the district court erred in denying the motion to compel arbitration where plaintiff had no substantive statutory right to pursue a pattern-or-practice claim. Accordingly, the court reversed the judgment of the district court. View "Parisi v. Goldman, Sachs & Co." on Justia Law