Justia Class Action Opinion Summaries

CE Design, Ltd. sued Custom Mechanical Equipment in 2008 after it received a junk fax. CE Design brought a class action suit of people and businesses that had also received unsolicited faxes from Custom. After Custom's insurer, Emcasco Insurance Company, declined to defend, Custom settled with CE Design for a considerable sum. In settling, CE Design agreed not to enforce the judgment against Custom but to proceed directly against Emcasco. After Emcasco refused to pay the judgment, CE Design and Emcasco filed rival declaratory judgment suits in separate federal courts (CE Design in Oklahoma, and Emcasco in Illinois). Ultimately, the federal district court in Illinois transferred its case to the federal district court in Oklahoma. Based on the insurance policy's terms, the district court held that Emcasco had no duty to defend Custom or to pay the judgment. CE Design appealed. Finding no reversible error, the Tenth Circuit affirmed. View "Emcasco Insurance Co. v. CE Design" on Justia Law

This shareholder derivative suit was one of several suits alleging that Smith & Wesson Holding Corporation, a major gun manufacturer incorporated in Nevada, made misleading public statements in 2007 about demand for its products. In reaction to these cases, Smith & Wesson formed a Special Litigation Committee (SLC) to investigate and evaluate the viability of any of these claims and to make a recommendation to Smith & Wesson’s Board whether to pursue any of these claims. The SLC issued a final report recommending against filing any claims. In 2010, Plaintiff asserted Nevada state law claims against Smith & Wesson’s officers and directors, including breach of fiduciary duty and waste of corporate assets. On the basis of the SLC’s conclusions, Defendants, former and current officers and directors of Smith & Wesson, moved for summary dismissal under Delaware law, as adopted by Nevada. The district court granted the motion. The First Circuit affirmed, holding that the district court did not err in finding as a matter of law that the SLC was independent and that the SLC’s investigation was reasonable and conducted in good faith. View "Sarnacki v. Golden" on Justia Law

Solares filed an unfair competition (Bus. & Prof. Code, 17200) class action on behalf of employees who are or were employed by PSAV, which provides audio-visual services to hotels within the Century Corridor Property Business Improvement District adjoining Los Angeles International Airport. They allege that PSAV collects from customers a separately designated “service charge,” “delivery charge,” facility charge,” “gratuity,” “administrative fee,” or other such charge that “customers might reasonably believe . . . were for the class member/employees’ services.” PSAV allegedly failed to pay the separately-designated charges it collects to its employees in violation of the Hotel Service Charge Reform Ordinance in the Los Angeles Municipal Code. The trial court denied a motion to dismiss the audio-visual workers’ suit. The court of appeal reversed. The ordinance applies only to those hotel workers who would have received a gratuity for their services but for the imposition of a service charge that hotel customers believed was in lieu of a gratuity. The complaint did not allege that Solares and the proposed class are within the class of hotel workers who traditionally relied on gratuities. View "Audio Visual Servs. Grp., Inc. v. Super. Ct." on Justia Law

This appeal stemmed from a putative securities fraud class action brought by lead plaintiff Nitesh Banker on behalf of all persons who purchased common stock in Gold Resource Corporation (GRC) during the class period between January 30, 2012, and November 8, 2012. GRC, a Colorado corporation, was a publicly traded mining company engaged in Mexico in the exploration and production of precious metals, including gold and silver. GRC’s aggressive business plan called for a dramatic increase in mining production during its initial years. Plaintiff alleged the "El Aguila" project experienced severe production problems during the class period, and that defendants knew about these problems but concealed them from investors. Plaintiff alleged GRC and four of its officers and directors committed securities fraud in violation of federal securities laws. He also asserted claims against individual defendants as "control persons." The district court dismissed the complaint with prejudice pursuant to Fed. R. Civ. P. 12(b)(6), holding that plaintiff failed to meet the heightened pleading standard for scienter required by the Private Securities Litigation Reform Act of 1995. Plaintiff appealed. But finding no reversible error, the Tenth Circuit affirmed. View "In re: Gold Resource Corp." on Justia Law

In July 2012, plaintiff-respondent Ernesto Ruiz filed a putative class action complaint alleging defendant-appellant Moss Bros. Auto Group, Inc. failed to pay Ruiz and other employees overtime and other wages for all hours worked, provide required meal and rest breaks, provide accurate and complete wage statements, reimburse business expenses, and pay final wages in a timely manner. Moss Bros. appealed an order denying its petition to compel arbitration of the employment-related and putative class action, representative, and Ruiz's individual claims. The trial court denied the petition on the ground Moss Bros. did not meet its burden of proving the parties had an agreement to arbitrate the controversy. No statement of decision was requested or issued, but the court implicitly found Moss Bros. did not present sufficient evidence to support a finding that an electronic signature on its proffered arbitration agreement was "the act of Ruiz." After its review, the Court of Appeal concluded Moss Bros. did not present sufficient evidence to support a finding that Ruiz electronically signed the 2011 agreement. Accordingly, the Court affirmed the order denying the petition. View "Ruiz v. Moss Bros. Auto" on Justia Law

Appellants Sikora Nelson and Paul Dorsey challenged the district court’s order requiring them to post an appeal bond of $1,007,294 in order to pursue their appeals objecting to a class action settlement. Plaintiffs initiated the underlying class action suit against Defendants Western Union Company and Western Union Financial Services, Inc. (collectively, “Western Union”), based on the fact that, at any given time, Western Union maintains between $130 and $180 million in wire transfers sent by Western Union customers that fail for some reason. These funds belong to Western Union’s customers, but Western Union returns this money (minus administrative fees) only when a customer requests a refund. Frequently, however, the customer is unaware that the wire transfer failed and thus does not know to ask Western Union to return his money. And Western Union, although possessing the customer’s contact information, does not notify the customer that his wire transfer failed, but instead holds the unclaimed money and earns interest on it. Eventually, after several years, the law of the state where the customer initiated the wire transfer requires Western Union to notify the customer that his unclaimed funds will soon escheat to the state. At that time, Western Union uses the contact information it had on record to give the customer this required notice. If the customer still fails to claim his money, those funds (minus the administrative fees) escheat to the relevant state, which then holds the funds until the customer claims them. Finding no reversible error in the district court's decision to impose the appeal bond, the Tenth Circuit affirmed, but reduced the amount of that bond. View "Tennille v. Western Union Co." on Justia Law

Plaintiffs filed this complaint on behalf of a class of all persons and entities who purchased or otherwise acquired Chesapeake common stock from 2009 to 2012, and who were damaged from those purchases/acquisitions. The complaint alleged that Defendants materially misled the public through false statements and omissions regarding two different types of financial obligations: (1) Volumetric Production Payment transactions (under which Chesapeake received immediate cash in exchange for the promise to produce and deliver gas over time); and (2) the Founder Well Participation Program (under which Chesapeake CEO Aubrey McClendon was allowed to purchase up to a 2.5% interest in the new gas wells drilled in a given year). With respect to the "VPP program," Plaintiffs alleged Defendants touted the more than $6.3 billion raised through these transactions but failed to disclose that the VPPs would require Chesapeake to incur future production costs totaling approximately $1.4 billion. Plaintiffs contended the failure to disclose these future production costs was a material omission that misled investors into believing there would be no substantial costs associated with Chesapeake’s obligations to produce and deliver gas over time. The district court granted Defendants’ motion to dismiss the complaint, holding that Plaintiffs had failed to plead with particularity facts giving rise to a strong inference of scienter as required by the Private Securities Litigation Reform Act of 1995. Viewing all of the allegations in the complaint collectively, the Tenth Circuit was not persuaded they gave rise to a cogent and compelling inference of scienter. Accordingly, the Court affirmed the district court's dismissal of the case. View "Weinstein, et al v. McClendon, et al" on Justia Law

Plaintiff was a Ralston Purina Company shareholder when Ralston and Nestle Holdings, Inc. entered into a merger agreement providing that, at the time of the merger, Ralston stock would be converted and Ralson shareholders would receive payments. Plaintiff was not paid until four days after the stock was converted. Ten years later, Plaintiff filed a class action petition alleging that Nestle breached the agreement by failing to timely pay shareholders. The trial court dismissed the petition as barred by the five-year statute of limitations in Mo. Rev. Stat. 516.120(1), which applies to all actions upon contracts except those mentioned in Mo. Rev. Stat. 516.110. Plaintiff appealed, arguing that the trial court erred by not applying the ten-year statute of limitations in section 516.110, which applies to all actions “upon any writing…for the payment of money.” The Supreme Court affirmed, holding (1) the five-year statute applied in this case; and (2) Plaintiff’s argument that his petition was timely because the five-year limitations period was tolled by a pending class action against Nestle in another state was without merit.View "Rolwing v. Nestle Holdings, Inc." on Justia Law

Defendants–Appellants Abercrombie & Fitch Co., Abercrombie & Fitch Stores, Inc., and J.M. Hollister LLC, d/b/a Hollister Co. (collectively, Abercrombie) appealed several district court orders holding that Hollister clothing stores violated the Americans with Disabilities Act (ADA). Plaintiff–Appellee Colorado Cross-Disability Coalition (CCDC) is a disability advocacy organization in Colorado. In 2009, CCDC notified Abercrombie that Hollister stores at two malls in Colorado violated the ADA. Initial attempts to settle the matter were unsuccessful, and this litigation followed. Abercrombie took it upon itself to correct some barriers plaintiff complained of: it modified Hollister stores by lowering sales counters, rearranging merchandise to ensure an unimpeded path of travel for customers in wheelchairs, adding additional buttons to open the adjacent side doors, and ensuring that the side doors were not blocked or locked. However, one thing remained unchanged: a stepped, porch-like structure served as the center entrance at many Hollister stores which gave the stores the look and feel of a Southern California surf shack. The Tenth Circuit affirmed in part and reversed in part the district court's judgment: affirming the court's denial of Abercrombie's summary judgment motion and certification of a class. However, the Court reversed the district court's partial grant, and later full grant of summary judgment to plaintiffs, and vacated the court's permanent injunction: "each of the district court’s grounds for awarding the Plaintiffs summary judgment [were] unsupportable. It was error to impose liability on the design of Hollister stores based on 'overarching aims' of the ADA. It was also error to impose liability based on the holding that the porch as a 'space' must be accessible. Finally, it was error to hold that the porch must be accessible because it is the entrance used by a 'majority of people.'" View "CO Cross-Disability Coalition, et al v. Abercrombie & Fitch, et al" on Justia Law

The issue before the Supreme Court in this case was whether the Court of Chancery erred in dismissing a derivative and class action complaint against the general partner and other managers of a limited partnership. The governing limited partnership agreement provided that appellees had no liability for money damages as long as they acted in good faith. The Court of Chancery dismissed the complaint because it failed to allege facts that would support a finding of bad faith. After remand, the Court of Chancery held that appellants waived their alternative claims for reformation or rescission. Upon review of the matter, the Supreme Court affirmed.View "Brinckerhoff v. Enbridge Energy Company, Inc." on Justia Law