Justia Class Action Opinion Summaries

A defendant in a putative class action can waive its right to compel arbitration against absent class members by deciding not to seek arbitration against the named plaintiff. In this wage and hour class action, the Court of Appeals held that Plan B waived its right to seek arbitration by filing and then withdrawing a motion to compel arbitration against the named plaintiff, Maria Elena Sprunk, and then waiting until after a class had been certified to seek arbitration against class members. The court held that Plan B provided sufficient evidence of the arbitration agreements; sufficient evidence supported the trial court's waiver finding; and substantial evidence supported the trial court's finding that Plan B delayed filing its motions to compel arbitration so that it could obtain a strategic advantage. The court explained that the the four-year delay resulted in Sprunk conducting class-related discovery and preparing and arguing an extensive class certification motion that never would have been necessary if individual arbitration had been ordered earlier in the case. Accordingly, the court affirmed the trial court's motion to compel arbitration. View "Sprunk v. Prisma LLC" on Justia Law

The circuit court’s order denying Appellant’s petition to compel arbitration was not a final, appealable judgment under Md. Code Ann. Cts. & Jud. Proc. 12-301.Appellees were individuals who each purchased vehicles from the automobile dealership operated by Appellant. Appellees filed a class action lawsuit against Appellant, challenging Appellant’s practice of providing customers with an alleged free lifetime limited warranty for their vehicles conditioned on the consumer’s continued use of and payment for other services provided by Appellant. Appellant filed an independent action seeking to compel arbitration in the class action case. The circuit court concluded that Appellees’ claims were not subject to binding arbitration. Appellant appealed. Appellees filed a motion to dismiss on the basis that the order denying arbitration was not an appealable final judgment. The court of special appeals denied the motion. The Court of Appeals vacated the judgment of the court of special appeals and remanded to that court with instructions to dismiss the appeal, holding that the circuit court’s order denying Appellant’s petition to compel arbitration was not a final, appealable judgment, depriving the court of special appeals of jurisdiction to hear an appeal of that order. View "Deer Automotive Group, LLC v. Brown" on Justia Law

In consolidated class actions, plaintiffs claimed the brokers who represented them in the sale of their homes and a group of companies that provided services in connection with those sales violated their fiduciary duties by failing to disclose alleged kickbacks paid by the service providers to the brokers in connection with the sales. Defendants filed motions to compel arbitration on the basis of three separate agreements, at least one of which was executed by each plaintiff. The trial court found the arbitration clauses in two of the agreements inapplicable, but compelled the signatories of the third agreement to arbitrate with their brokers. Invoking the doctrine of equitable estoppel, the court also required the signatories of the third agreement to arbitrate their claims against the service providers, who were not parties to the arbitration agreements. The court of appeals reversed with respect to the two arbitration clauses the lower court found inapplicable. Each of the plaintiffs executed one or the other of these two agreements. The court dismissed the cross-appeal of the plaintiffs who were required to arbitrate because an order compelling arbitration is not appealable. View "Laymon v. J. Rockcliff, Inc." on Justia Law

The National Labor Relations Board sought enforcement of its Order finding that AEI violated the National Labor Relations Act by barring employees from pursuing class-action litigation or collective arbitration of work-related claims and by forbidding an AEI technician from discussing a proposed compensation change with his coworkers and by firing that technician for discussing the proposed change and complaining to management about it. AEI employees sign an agreement that “Disputes … relating to your employment” must, at the election of the employee or the company, be resolved “exclusively through binding arbitration” and that “you and AEI also agree that a claim may not be arbitrated as a class action, also called ‘representative’ or ‘collective’ actions, and that a claim may not otherwise be consolidated or joined with the claims of others.” AEI’s employee handbook prohibits “[u]nauthorized disclosure of business secrets or confidential business or customer information, including any compensation or employee salary information.” The Sixth Circuit enforced the order. An arbitration provision requiring employees covered by the Act individually to arbitrate all employment-related claims is not enforceable. The evidence was adequate to support the ALJ’s factual findings and conclusion that DeCommer was fired for engaging in protected, concerted activity View "National Labor Relations Board v. Alternative Entertainment, Inc." on Justia Law

In New Jersey, GTL is the sole provider of telecommunications services that enable inmates to call approved persons outside the prisons. Users can open an account through GTL’s website or through an automated telephone service with an interactive voice-response system. Website users see GTL’s terms of use and must click “Accept” to complete the process. Telephone users receive an audio notice: Please note that your account, and any transactions you complete . . . are governed by the terms of use and the privacy statement posted at www.offenderconnect.com.” Telephone users are not required to indicate their assent to those terms, which contain an arbitration agreement and a class-action waiver. Users have 30 days to opt out of those provisions. The terms state that using the telephone service or clicking “Accept” constitutes acceptance of the terms; users have 30 days to cancel their accounts if they do not agree to the terms. Plaintiffs filed a putative class action alleging that GTL’s charges were unconscionable and violated the state Consumer Fraud Act, the Federal Communications Act, and the Takings Clause. GTL argued that the FCC had primary jurisdiction. Plaintiffs withdrew their FCA claims. GTL moved to compel arbitration. The district court denied GTL’s motion with respect to plaintiffs who opened accounts by telephone, finding “neither the knowledge nor intent necessary to provide ‘unqualified acceptance.’” The Third Circuit affirmed. The telephone plaintiffs did not agree to arbitration. View "James v. Global TelLink Corp." on Justia Law

Defendant-appellant Ross Stores, Inc. (Ross) appealed the denial of its motion to compel arbitration. Plaintiff-respondent Martina Hernandez was employed at a Ross warehouse in Moreno Valley, and filed a single-count representative action under the California Private Attorney General Act (PAGA), alleging Ross had violated numerous Labor Code laws, and sought to recover PAGA civil penalties for the violations. Ross insisted that Hernandez had to first arbitrate her individual disputes showing she was an "aggrieved party" under PAGA and then the PAGA action could proceed in court. The trial court found, that the PAGA claim was a representative action brought on behalf of the state and did not include individual claims. As such, it denied the motion to compel arbitration because there were no individual claims or disputes between Ross and Hernandez that could be separately arbitrated. On appeal, Ross raised the issue of whether under the Federal Arbitration Act (FAA), an employer and employee had the preemptive right to agree to individually arbitrate discreet disputes underlying a PAGA claim while leaving the PAGA claim and PAGA remedies to be collectively litigated under "Iskanian v. CLS Transportation Los Angeles LLC," (59 Cal.4th 348 (2014)). The Court of Appeal upheld the trial court's denial of the motion to compel arbitration. View "Hernandez v. Ross Stores" on Justia Law

Plaintiffs, on behalf of themselves and others similarly situated, were former students in the nursing program at Salem International University (Salem). When Plaintiffs enrolled, they signed enrollment agreements that contained an arbitration clause. Plaintiffs filed a putative class action complaint against Salem and its president (collectively, Salem) alleging that they were denied the opportunity to complete their coursework in nursing at Salem as a result of the nursing program’s loss of accreditation. Salem filed a motion to stay proceedings pending mandatory alternative dispute resolution. The circuit court denied the motion, concluding that the arbitration agreement did not include an enforceable class action litigation waiver. The Supreme Court reversed, holding that the arbitration agreement acted as a class action litigation waiver barring Plaintiffs from seeking judicial relief as a class. View "Salem International University v. Bates" on Justia Law

Tanguilig, a Bloomingdale’s employee, filed a representative action on behalf of herself and fellow employees pursuant to the Labor Code Private Attorneys General Act (PAGA) (Lab. Code 2698), alleging several Labor Code violations by the company. The trial court denied a motion by Bloomingdale’s to compel arbitration of Tanguilig’s “individual PAGA claim” and stay or dismiss the remainder of the complaint. The court of appeal affirmed. Under California Supreme Court precedent and consistent with the Federal Arbitration Act (FAA) (9 U.S.C. 1), a PAGA representative claim is nonwaivable by a plaintiff-employee by means a predispute arbitration agreement with an employer. A PAGA claim (whether individual or representative) acts as a proxy for the state, with the state’s acquiescence, and seeks civil penalties largely payable to the state; such a plaintiff cannot be ordered to arbitration without the state’s consent. View "Tanguilig v. Bloomingdale's, Inc." on Justia Law

The Michigan office of Alix, an international company, administers payroll and benefits for U.S. employees and is directly involved in U.S. hiring. In 2013, Alix hired Brewington, a Texas resident, for its Dallas Corporate Services team. The employment agreement provides that it “will be construed and interpreted in accordance with the laws of the State of Michigan” and states, “any dispute arising out of or in connection with any aspect of this Agreement and/or any termination of employment . . ., shall be exclusively subject to binding arbitration under the . . . American Arbitration Association . . . decision of the arbitrator shall be final and binding as to both parties.” In 2014, Brewington was terminated. He filed a demand for arbitration, asserting claims under Title VII, 42 U.S.C. 2000e, on behalf of himself and a purported nationwide class of current, former, and potential Alix employees. The Michigan district court ruled that Brewington was precluded from pursuing arbitration claims on behalf of any purported class. The Sixth Circuit affirmed that court’s refusal to dismiss, finding that Brewington had sufficient contacts with Michigan to establish personal jurisdiction, and upheld summary judgment in favor of Alix. An agreement must expressly include the possibility of classwide arbitration to indicate that the parties agreed to it. This clause is silent on the issue and is limited to claims concerning “this Agreement,” as opposed to other agreements. It refers to “both parties.” View "AlixPartners, LLP v. Brewington" on Justia Law

Plaintiffs represent a putative class of New Jersey real estate purchasers and refinancers who were overcharged $70 to $350 in fees. Plaintiffs allege that settlement agents (Defendants) intentionally charged Plaintiffs more than the county clerk charged for recording deeds and mortgages and kept the difference. The class claims total over $50 million, exclusive of treble damages and interest. Defendants sought dismissal and raised affirmative defenses, but did not seek to enforce arbitration clauses present in their contracts with Plaintiffs. The case was litigated for 30 months with the focus primarily on class certification. Both sides conducted broad discovery and contested substantive motions. Plaintiffs have served 130 non-party subpoenas and spent over $50,000 on experts. In 2011, the Supreme Court held that the Federal Arbitration Act (FAA) preempted state laws that had previously prohibited a party from compelling bipolar (individual) arbitration in certain situations even when it was specifically agreed to by contract. Defendants demanded enforcement of the arbitration agreements in light of this change in the law, then moved to compel bipolar arbitration. The Third Circuit affirmed in favor of Defendants. Futility can excuse the delayed invocation of the right to compel arbitration; any attempt to compel bipolar before the Supreme Court’s decision would have been futile. View "Chassen v. Fid. Nat'l Fin. Inc." on Justia Law