Justia Class Action Opinion Summaries

An employee began working at a skilled nursing facility, which was later acquired by a new employer. As part of the onboarding process, the employer required the employee to sign three related agreements to arbitrate most employment disputes, except certain representative actions under the California Private Attorneys General Act (PAGA). After ending his employment, the employee filed a class action lawsuit for various wage-and-hour violations, including a PAGA claim. The agreements also contained class action waivers and a confidentiality agreement.The employer moved to compel arbitration of the employee’s individual claims, including his individual PAGA claim, and to enforce the class action waiver. The Superior Court of Los Angeles County denied the motion, ruling that conflicting and ambiguous terms among the three arbitration agreements and other documents meant there was no enforceable agreement to arbitrate. The court also ruled, in the alternative, that the agreement was unconscionable due to both procedural and substantive defects, including an unenforceable waiver of the right to bring a PAGA action and certain provisions in the confidentiality agreement.The California Court of Appeal, Second Appellate District, Division Seven, reviewed the order denying arbitration. The court held that the agreements, although containing some ambiguities and minor inconsistencies, reflected a clear mutual intent to arbitrate employment-related disputes. The court found the agreements were not so uncertain as to be unenforceable, and any conflicting provisions could be severed. The court further determined that, while the agreements reflected some procedural unconscionability as contracts of adhesion, they did not contain substantively unconscionable terms. The Court of Appeal reversed the trial court’s order and directed that arbitration be compelled. View "Santana v. Studebaker Health Care Center" on Justia Law

A former emergency medical technician employed by a private ambulance company brought a class action alleging that his employer systematically miscalculated the “regular rate of pay” by excluding certain nondiscretionary bonuses from that calculation. This exclusion, he contended, resulted in the underpayment of overtime, double time, and meal and rest period premiums for himself and approximately 135 current and former employees during the alleged class period. The company paid ten types of bonuses, and the plaintiff received one of these—a bonus awarded during National Emergency Medical Services Week—on a single occasion.The plaintiff filed his class action in the Superior Court of Tulare County, seeking class certification for wage and hour violations, including claims for unpaid overtime, inaccurate wage statements, waiting time penalties, and other Labor Code violations. The employer opposed class certification, arguing that the plaintiff’s claim was not typical of the proposed class because he received only one type of bonus and that each type of bonus involved unique circumstances and potential defenses. The trial court denied class certification solely on the ground that the plaintiff did not establish typicality, reasoning he would be subject to unique defenses regarding the inclusion of his bonus in the regular rate of pay.The Court of Appeal of the State of California, Fifth Appellate District, reversed the trial court’s order. The appellate court held that the purported defenses related to the nature of the bonus (as a gift or discretionary payment) were not unique to the plaintiff, since other employees received the same type of bonus under similar circumstances. Therefore, the trial court committed legal error in its analysis of typicality. The case was remanded for further proceedings on the class certification motion, not inconsistent with the appellate opinion. View "Martinez v. Sierra Lifestar" on Justia Law

Two individuals purchased Florida prepaid college tuition savings plans for their daughters in 2004 and 2006. The plans promised to cover tuition at Florida public colleges or transfer an equivalent amount to non-Florida colleges if the beneficiary chose to attend elsewhere. In 2007, the Florida Legislature authorized a new “tuition differential” fee, exempting holders of existing plans from paying that fee at Florida colleges. The Florida Prepaid College Board amended the plan contracts to specify that this new fee was not covered for out-of-state schools. Over a decade later, when both daughters chose to attend out-of-state colleges, the Board declined to transfer an amount equivalent to the tuition differential fee.The purchasers filed a putative class action in the United States District Court for the Southern District of Florida against members of the Board, alleging that the Board’s refusal violated the Contracts and Takings Clauses of the U.S. Constitution. They sought declaratory and injunctive relief to prevent the Board from applying the statutory exemption and contract amendments to beneficiaries attending non-Florida schools. The Board moved to dismiss, arguing it was protected by sovereign immunity. A magistrate judge recommended denying the motion, reasoning the relief sought was prospective. However, the district court disagreed, ruling that the relief requested was essentially a demand for a refund, thus barred by the Eleventh Amendment, and dismissed the complaint with prejudice.The United States Court of Appeals for the Eleventh Circuit reviewed the case. It held that the suit was barred by sovereign immunity because the relief sought would require specific performance of a contract with the state, which is not permitted under Ex parte Young and related Supreme Court precedent. However, the appellate court vacated the district court’s dismissal with prejudice and remanded with instructions to dismiss without prejudice, as the dismissal was for lack of subject-matter jurisdiction. View "Lavina v. Florida Prepaid College Board" on Justia Law

Several individuals alleged that Google collected and misused the private browsing data of Chrome users who utilized Incognito mode, despite Google’s representations about the privacy of this feature. In June 2020, five plaintiffs brought a putative class action on behalf of these users, seeking both injunctive relief and damages. After extensive discovery, the United States District Court for the Northern District of California certified a class for injunctive relief but denied certification for a damages class, finding the plaintiffs had not shown that common issues predominated over individual ones.Following the denial of damages class certification, the named plaintiffs sought review in the United States Court of Appeals for the Ninth Circuit under Rule 23(f), but the petition was denied. The case proceeded, and as trial approached, the parties settled: Google agreed to change its policies, the named plaintiffs would arbitrate their individual damages claims, and they waived their rights to appeal the denial of damages class certification. The settlement explicitly stated that absent class members were not releasing damages claims or appellate rights. Several months after the settlement, a group of 185 Chrome users, referred to as the Salcido plaintiffs, moved to intervene to preserve absent class members’ appellate rights regarding damages.The United States Court of Appeals for the Ninth Circuit reviewed the district court’s denial of the intervention motion. The Ninth Circuit held that the district court did not abuse its discretion in finding the intervention motion untimely. Applying the circuit’s traditional three-part test for intervention—considering the stage of the proceedings, prejudice to other parties, and the reason for and length of delay—the court found that intervention at this late stage would prejudice the existing parties, that the delay was unjustified, and that the timing weighed against intervention. The denial of the motion to intervene was therefore affirmed. View "BROWN V. SALCIDO" on Justia Law

A financial advisory employee of a large securities firm participated in a compensation program called the WealthChoice Awards, which provided annual contingent cash awards to select high-performing advisors. To earn these awards, an advisor had to meet certain revenue thresholds and remain employed at the company for eight years after the award was granted. A notional, unfunded account tracked a benchmark investment, but no funds were set aside for the advisor during the vesting period. If the advisor left the company before vesting, the award was typically forfeited. After vesting, payment was mandatory and made promptly, usually while the advisor was still employed. The stated purpose of the program was to incentivize retention and productivity, not to provide retirement income.After voluntarily resigning and forfeiting unvested awards, the employee filed a putative class action in the United States District Court for the Western District of North Carolina. He alleged that the WealthChoice Awards program was an “employee pension benefit plan” under the Employee Retirement Income Security Act of 1974 (ERISA), and that it violated ERISA’s vesting and anti-forfeiture rules. The district court granted summary judgment to the employer, finding that the program was a bonus plan exempt from ERISA.On appeal, the United States Court of Appeals for the Fourth Circuit reviewed the district court’s grant of summary judgment de novo. The Fourth Circuit held that the WealthChoice Awards program is a bonus payment plan and not an ERISA-covered pension benefit plan. The court reasoned that the program’s primary purpose was to enhance retention and productivity, eligibility was limited, the awards were not funded with deferred employee income, and payment was not systematically deferred until employment termination or retirement. The judgment of the district court was affirmed. View "Milligan v. Merrill Lynch, Pierce, Fenner & Smith, Inc." on Justia Law

A police officer employed by the Metropolitan Police Department experienced a data breach that exposed sensitive information of numerous employees. In response, the officer filed a putative class action in Superior Court for the District of Columbia, naming the District, certain government entities, and several private technology contractors as defendants. The complaint alleged that the defendants failed to safeguard employees’ data.During the proceedings, the plaintiff voluntarily dismissed certain contractor defendants without prejudice, leaving the government defendants and a few contractors. The Superior Court of the District of Columbia granted the District’s motion to dismiss, ruling that the Metropolitan Police Department and the Office of the Chief Technology Officer could not be sued as unincorporated government bodies, and that sovereign immunity barred the claims against the District. The plaintiff’s motion for reconsideration was denied. Subsequently, the plaintiff voluntarily dismissed without prejudice the remaining private contractor defendants and asked the Superior Court to close the case. The Superior Court closed the case, prompting the plaintiff to appeal both the dismissal of her claims against the District and the denial of reconsideration.The District of Columbia Court of Appeals reviewed the case. It held that because the plaintiff dismissed her claims against the final contractor defendants without prejudice, the trial court’s order was not final as to all parties and claims. The court explained that dismissals without prejudice do not resolve the merits and thus do not confer appellate jurisdiction, except in rare circumstances. The Court of Appeals dismissed the appeal for lack of jurisdiction, as the order below was not a final, appealable order. View "Moore v. District of Columbia" on Justia Law

A consumer purchased a set of bed sheets from a major retailer, choosing a more expensive option because the packaging stated the sheets were made of “100% cotton” and had an “800 Thread Count.” After using the sheets, he believed the quality did not match the advertised thread count. He later had the sheets tested by an expert, who determined the actual thread count was much lower. The consumer alleged that it is physically impossible for 100% cotton fabric to reach the advertised thread counts and claimed that the retailer’s labeling was false and misleading.The consumer initially brought a class action in California state court, alleging violations of California’s Unfair Competition Law and Consumer Legal Remedies Act. The retailer removed the suit to the United States District Court for the Southern District of California. The retailer moved to dismiss the complaint, arguing that the consumer failed to adequately plead his claims and that the impossibility of the claimed thread count meant no reasonable consumer would be misled. The district court agreed and dismissed the case with prejudice, relying on the Ninth Circuit’s decision in Moore v. Trader Joe’s Co., interpreting it to mean that literally impossible claims cannot deceive reasonable consumers as a matter of law.The United States Court of Appeals for the Ninth Circuit reviewed the dismissal de novo. The court held that the district court erred in its interpretation of Moore. The appellate court clarified that claims of literal falsity are actionable under California consumer protection laws and that even physically impossible claims may deceive reasonable consumers. The court reversed the district court’s dismissal and remanded the case for further proceedings, holding that the consumer’s allegations were sufficient to survive a motion to dismiss. View "PANELLI V. TARGET CORPORATION" on Justia Law

Two individuals brought a putative class action against the owners of a hotel in San Dimas, California, alleging that the hotel violated Civil Code section 1940.1. The statute is designed to prevent hotels from forcing guests to move out or check out and reregister every 28 days—a practice aimed at denying guests tenant protections that accrue after 30 days of occupancy. The hotel enforced a policy requiring all guests to vacate after 28 consecutive days and to stay away for at least three days before re-registering. Plaintiffs, who stayed at the hotel in multiple 28-day increments, were subject to this policy and sometimes stayed elsewhere or in their vehicle during the three-day interval.The plaintiffs filed a class action in the Superior Court of Los Angeles County, seeking to represent all individuals who had similar experiences at the hotel since November 2018. They argued that the hotel’s uniform policy and its status as a “residential hotel” made the case appropriate for class certification. The defendants countered that determining whether the hotel was a “residential hotel” under the statute would require individualized inquiries into whether each guest used the hotel as their primary residence. The trial court agreed with the defendants’ interpretation and denied class certification, finding that individual questions predominated over common ones.The California Court of Appeal, Second Appellate District, Division Three, reviewed the order denying class certification. The appellate court held that the trial court erred by interpreting section 1940.1 to require individualized proof that each class member used the hotel as their primary residence. The appellate court clarified that the “residential” status of the hotel is determined by the hotel’s overall use or intended use, not by each guest’s individual residency status. The court reversed the order denying class certification and remanded the case for further proceedings. View "Aerni v. RR San Dimas, L.P." on Justia Law

Two former tenants sued the owner and manager of a residential apartment complex, alleging that they were charged unlawful rental application fees and excessive lock change fees, in violation of the Massachusetts security deposit statute and consumer protection laws. They sought to represent a statewide class of similarly situated tenants. After contentious discovery, the Superior Court sanctioned the defendants, precluding them from contesting certain liability facts. The court granted summary judgment to the plaintiffs on the security deposit claims but denied summary judgment on the consumer protection claims. Before trial, the parties reached a proposed class action settlement that established a fund for class members, with unclaimed funds to be distributed partly to charities and partly returned to the defendants.The Superior Court, after scrutiny and required revisions, approved the settlement. The court capped the amount of unclaimed funds that could revert to the defendants and required that a portion go to designated charities. However, the Massachusetts IOLTA Committee, a nonparty potentially entitled to notice under Mass. R. Civ. P. 23(e)(3), was not notified prior to settlement approval. After final approval and claims processing, the committee received notice for the first time and objected to the final distribution of unclaimed funds, arguing that the lack of timely notice violated the rule and that final judgment should be set aside. The motion judge agreed there was a violation but declined to vacate the settlement, finding no prejudice.On direct appellate review, the Supreme Judicial Court of Massachusetts held that the IOLTA Committee had standing to appeal the denial of its procedural right to notice and an opportunity to be heard on the disposition of residual funds, but lacked standing to challenge the overall fairness or structure of the settlement. Assuming a violation of the rule occurred, the Court found no prejudice because the committee ultimately received the opportunity to be heard before judgment entered. The judgment was affirmed. View "Ortins v. Lincoln Property Company" on Justia Law

A Delaware corporation specializing in antenna measurement systems was majority-owned by a parent company, which controlled the board and imposed a services agreement that disproportionately allocated expenses to the subsidiary. An investment fund, having previously rejected buyout offers, became a vocal minority stockholder. In 2018, after a controversial squeeze-out merger at $3.30 per share—approved without effective minority protections—a third-party expressed interest in buying the parent at a much higher valuation, but later withdrew due to concerns over the parent’s transfer pricing practices. The merger closed at a valuation much lower than that suggested by the later private equity investment.A minority stockholder initially filed suit in the Court of Chancery of the State of Delaware, alleging breaches of fiduciary duty related to the merger. The court denied a motion to dismiss, and the original plaintiff’s counsel negotiated a proposed $825,000 settlement. The investment fund objected, sought to replace the lead plaintiff and counsel, and ultimately succeeded after the original settlement was rejected and the fund posted security to protect other stockholders’ interests. The fund, with new counsel, filed an amended complaint, pursued broader discovery, and advanced new damages theories, including contesting the services agreement and relying on the arm’s-length valuation from the private equity transaction. The litigation efforts included multiple discovery motions, expert reports, and defeating dismissal attempts, culminating in a mediated settlement for $17.85 million—21.64 times the original settlement and reflecting a 235% premium over the deal price.The Court of Chancery of the State of Delaware, in the present opinion, held that the investment fund, as lead plaintiff, was entitled to an incentive award of $730,000. The court found that the award was justified based on the fund’s considerable time, effort, and resources expended, the significant benefit obtained for the class, and the absence of problematic incentives or conflicts. View "In re Orbit/FR, Inc. Stockholders Litig." on Justia Law