Justia Class Action Opinion Summaries

BP Corporation North America Inc. (“BP America”) a Defendant-Appellee in this action, acquired Standard Oil of Ohio (“Sohio). BP America converted the Sohio Plan into a new plan called the BP America Retirement Plan (the “ARP”). The ARP was also a defined benefit plan that retained the formula used by the Sohio Plan to calculate its members’ pension distributions. BP America converted the ARP into the BP Retirement Accumulation Plan (the “RAP,” the conversion from the ARP to the RAP as the “Conversion,” and the date of the Conversion as the “Conversion Date”), the other Defendant-Appellee in this action. Plaintiffs-Appellees, two Sohio Legacy Employees, (the “Guenther Plaintiffs”) filed a class action complaint against the RAP and BP America.   Four years after the Guenther Plaintiffs filed their original complaint, Movant-Appellant, along with 276 other individuals (the “Press Plaintiffs”) moved to intervene in the Guenther Action “for the purpose of objecting” to the magistrate judge’s recommendation. Press Plaintiffs contend that the certified class in the Guenther Action inadequately represents their interests, and therefore, they have a right to intervene in this case.   The Fifth Circuit affirmed the district court’s ruling denying the intervention. The court held that the Press Plaintiffs cannot demonstrate that their interests diverge from those of the Guenther Plaintiffs in any meaningful way. Further, the Press Plaintiffs did not identify a unique interest of their own, they are unable to specify how a determination in the Guenther Action could have a future detrimental preclusive effect. The court wrote it is satisfied that the Press Plaintiffs will be adequately represented. View "Guenther v. BP Retr Accumulation" on Justia Law

Plaintiff saw Cognium, a “nutraceutical” manufactured by Natrol, on sale. Cognium, according to Natrol’s advertising, improves memory and concentration. Its packaging stated that Cognium is “powered by Cera-Q, a natural protein from silkworm cocoons,” and can improve “Memory Recall Efficiency” by 90% when taken twice daily for four weeks. The box claimed that “nine clinical studies in adults, seniors and children showed statistically significant improvements in memory and cognition in 4 weeks or less when taken as directed.”   Plaintiff filed a putative class action complaint against Natrol, seeking damages for herself and establishment of a National Class and Missouri Consumer Subclass. Plaintiff alleged that, prior to her purchases of Cognium, two of the nine clinical studies noted on its packaging had been retracted, including one for “data fabrication and falsification.”   With Plaintiff’s individual claims dismissed, the court determined the sole named plaintiff could not represent the purported class and dismissed the entire action. On appeal, Plaintiff argued the district court erred in granting summary judgment dismissing her MMPA and unjust enrichment claims.   The Eighth Circuit affirmed. The court explained that here Plaintiff purchased a product that expressly stated on the label it was “not intended to” do what she stated she purchased it for, serve as a substitute treatment for her prescription medication. Thus, for Plaintiff the actual value of the Cognium she purchased, and the value of Cognium without Natrol’s alleged marketing misrepresentations was “zero.” The benefit of the bargain rule does not apply in this situation, so Plaintiff cannot prove that she suffered ascertainable loss “as a result of” Natrol’s unlawful practice. View "Christine Vitello v. Natrol, LLC" on Justia Law

International Flavors & Fragrances Inc. (“IFF”), a U.S.-based seller of flavoring and fragrance products, acquired Frutarom Industries Ltd. (“Frutarom”), an Israeli firm in the same industry. Leading up to the merger, Frutarom allegedly made material misstatements about its compliance with anti-bribery laws and the source of its business growth. Plaintiffs, who bought stock in IFF, sued Frutarom, alleging that those misstatements violated Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) and Rule 10b-5 thereunder.   The Second Circuit affirmed the district court’s dismissal of Plaintiffs’ complaint. The court concluded that Plaintiffs lack statutory standing to sue. Under the purchaser-seller rule, standing to bring a claim under Section 10(b) is limited to purchasers or sellers of securities issued by the company about which a misstatement was made. Plaintiffs here lack standing to sue based on alleged misstatements that Frutarom made about itself because they never bought or sold shares of Frutarom. View "Menora Mivtachim Ins. Ltd. v. Frutarom Indus. Ltd." on Justia Law

Plaintiffs deliver baked goods by truck to stores and restaurants in designated territories within Connecticut. They brought an action in district court on behalf of a putative class against Flowers Foods, Inc. and two of its subsidiaries, which manufacture the baked goods that the plaintiffs deliver. Plaintiffs allege unpaid or withheld wages, unpaid overtime wages, and unjust enrichment pursuant to the Fair Labor Standards Act and Connecticut wage laws. The district court granted Defendants’ motion to compel arbitration and dismissed the case.   The Second Circuit affirmed the district court’s order compelling arbitration and dismissing the case. The court explained that it concludes that an individual works in a transportation industry if the industry in which the individual works pegs its charges chiefly to the movement of goods or passengers, and the industry’s predominant source of commercial revenue is generated by that movement. Here, because Plaintiffs do not work in the transportation industry, they are not excluded from the FAA, and the district court appropriately compelled arbitration under the Arbitration Agreement. View "Bissonnette v. LePage Bakeries" on Justia Law

After Plaintiff-appellant David Salazar bought Walmart, Inc.’s “Great Value White Baking Chips” incorrectly thinking they contained white chocolate, he filed this class action against Walmart for false advertising under various consumer protection statutes. The trial court sustained Walmart’s demurrers without leave to amend, finding as a matter of law that no reasonable consumer would believe Walmart’s White Baking Chips contain white chocolate. The thrust of Salazar's claims was that he was reasonably misled to believe the White Baking Chips had real white chocolate because of the product’s label and its placement near products with real chocolate. Salazar also alleged that the results of a survey he conducted show that 90 percent of consumers were deceived by the White Baking Chips’ advertising and incorrectly believed they contained white chocolate. “California courts . . . have recognized that whether a business practice is deceptive will usually be a question of fact not appropriate for decision on demurrer. ... These are matters of fact, subject to proof that can be tested at trial, even if as judges we might be tempted to debate and speculate further about them.” After careful consideration, the Court of Appeal determined that a reasonable consumer could reasonably believe the morsels had white chocolate. As a result, the Court found Salazar plausibly alleged that “‘a significant portion of the general consuming public or of targeted consumers, acting reasonably in the circumstances, could be misled’” by the chips' advertising. Judgment was reversed and the matter remanded for further proceedings. View "Salazar v. Walmart, Inc." on Justia Law

After Plaintiff-appellant David Salazar bought Target Corporation’s White Baking Morsels incorrectly thinking they contained white chocolate, he filed this class action against Target for false advertising under various consumer protection statutes. Salazar claimed he was reasonably mislead to believe the White Baking Morsels had real white chocolate because of the product’s label, its price tag, and its placement near products with real chocolate. To support his position, Salazar alleged that the results of a survey he conducted showed that 88 percent of consumers were deceived by the White Baking Morsels’ advertising and incorrectly believe they contained white chocolate. He also alleged that Target falsely advertised on its website that the “‘chocolate type’” of White Baking Morsels was “‘white chocolate,’” and placed the product in the “‘Baking Chocolate & Cocoa’” category. Target demurred to all three claims on the ground that no reasonable consumer would believe the White Baking Morsels contained real white chocolate. Target also argued that Salazar lacked standing to assert claims based on Target’s website because he did not view the website and did not rely on its representations. The court sustained Target’s demurrer without leave to amend and entered judgment for Target. “California courts . . . have recognized that whether a business practice is deceptive will usually be a question of fact not appropriate for decision on demurrer. ... These are matters of fact, subject to proof that can be tested at trial, even if as judges we might be tempted to debate and speculate further about them.” After careful consideration, the Court of Appeal determined that a reasonable consumer could reasonably believe the morsels had white chocolate. As a result, the Court found Salazar plausibly alleged that “‘a significant portion of the general consuming public or of targeted consumers, acting reasonably in the circumstances, could be misled’” by the White Baking Morsels’ advertising. Judgment was reversed and the matter remanded for further proceedings. View "Salazar v. Target Corp." on Justia Law

Appellants are patients at medical facilities operated by respondent Centrelake Medical Group. In reliance on Centrelake’s allegedly false representations that it employed reasonable safeguards for patients’ personal identifying information (PII), Appellants entered into contracts with Centrelake. Appellants brought an action against Centrelake on behalf of themselves and a putative class of patients affected by a data breach. The complaint contained causes of action for breach of contract, negligence, and violations of the Unfair Competition Law (UCL). Centrelake demurred, arguing that Appellants had failed to adequately plead any cognizable injury and that their negligence claim was barred by the economic loss rule. Appellants opposed the demurrer. On appeal, Appellants contend the court erred in sustaining the demurrer with respect to each of their claims and abused its discretion in denying their request for leave to amend.   The Second Appellate District affirmed the judgment with respect to the dismissal of Appellants’ negligence claim without leave to amend, but reverse with respect to Appellants’ UCL and contract claims. The court concluded that Appellants adequately alleged UCL standing and contract damages under their benefit-of-the-bargain theory, and the Appellant who purchased monitoring services, did the same under Appellants’ monitoring-costs theory. However, Appellants have not shown the court erred in dismissing their negligence claim under the economic loss rule; nor have they shown the court abused its discretion in denying their request for leave to amend. View "Moore v. Centrelake Medical Group, Inc." on Justia Law

Wisconsin inmates undergo regular strip searches. One guard performs the search; another observes. West is a Muslim. Strip searches by guards of the opposite sex violate the tenets of his faith. He was required to submit to a strip search by a guard who is a transgender man—a woman who identifies as a man. West objected but was refused an accommodation. West unsuccessfully requested an exemption from future cross-sex strip searches. The warden stated that he would be disciplined if he objects again. West sought an injunction under the Religious Land Use and Institutionalized Persons Act (RLUIPA), 42 U.S.C. 2000cc, and alleged Fourth Amendment violations. The district court dismissed the constitutional claim; circuit precedent held that a prisoner has no Fourth Amendment interest against visual inspections of his body. Rejecting the RLUIPA claim, the judge concluded that West had not shown a substantial burden on his religious exercise and that cross-sex strip searches are permissible as the prison’s only means to avoid unlawfully discriminating against transgender employees.The Seventh Circuit reversed. Intervening precedent revives the Fourth Amendment claim. West is entitled to judgment on the RLUIPA claim. His objection to cross-sex strip searches is religious in nature and sincere. The prison has substantially burdened his religious exercise by requiring him to either submit, in violation of his faith, or face discipline. The burden is unjustified under RLUIPA’s strict-scrutiny standard: providing an exemption will not violate the rights of transgender prison employees under Title VII or the Equal Protection Clause. View "West v. Radtke" on Justia Law

Plaintiffs in two putative class actions took out home mortgage loans from Bank of America, N.A. (“BOA”), one before and the other after the effective date of certain provisions of the DoddFrank Wall Street Reform and Consumer Protection Act (“DoddFrank”). The loan agreements, which were governed by the laws of New York, required Plaintiffs to deposit money in escrow accounts for property taxes and insurance payments for each mortgaged property. When BOA paid no interest on the escrowed amounts, Plaintiffs sued for breach of contract, claiming that they were entitled to interest under New York General Obligations Law Section 5-601, which sets a minimum 2% interest rate on mortgage escrow accounts. BOA moved to dismiss on the ground that GOL Section 5-601 does not apply to mortgage loans made by federally chartered banks because, as applied to such banks, it is preempted by the National Bank Act of 1864 (“NBA”). The district court disagreed and denied the motion.   The Second Circuit reversed and remanded. The court held that (1) New York’s interest-on-escrow law is preempted by the NBA under the “ordinary legal principles of pre-emption,” Barnett Bank of Marion Cnty., N.A. v. Nelson, 517 U.S. 25, 37 (1996), and (2) the Dodd-Frank Act does not change this analysis. GOL Section 5-601 thus did not require BOA to pay a minimum rate of interest, and Plaintiffs have alleged no facts supporting a claim that interest is due. View "Cantero v. Bank of Am., N.A." on Justia Law

Hudson Valley Federal Credit Union (“HVCU”) appealed from the district court’s ruling denying HVCU’s motion to compel arbitration of Plaintiff’s putative class action claims for breach of contract, breach of the covenant of good faith and fair dealing, and claims under New York law and the Federal Electronic Fund Transfer Act.   The Second Circuit vacated and remanded the district court’s ruling, holding that the record was insufficiently developed for the district court to deny the motion to compel arbitration. The court concluded that the record is insufficiently developed on the issue of whether the parties entered into an agreement to arbitrate and, as a consequence, the court wrote it cannot determine the matter of arbitrability “as a matter of law.” Therefore, the court remanded for the district court to consider further evidence or, if necessary, hold a trial.   The court further explained that it was an error for the district court to engage in the inquiry notice analysis based on the copy of the Internet Banking Agreement, which does not depict the content and design of the webpage as seen by users signing up for online banking. The court wrote that on remand, the district court should consider the design and content of the Internet Banking Agreement as it was presented to users in determining whether Plaintiff assented to its terms. And the district court should assess whether the Account Agreements are clearly identified and available to the users based on the court’s precedents. View "Zachman v. Hudson Valley Federal Credit Union" on Justia Law