Justia Class Action Opinion Summaries

This is an appeal from a district court’s grant of a Rule 12(b)(6) motion to dismiss for failure to state a claim. Plaintiff sought a declaratory judgment that Defendant Biloxi H.M.A., L.L.C., doing business as Merit Health Biloxi (“Merit Health”), a hospital, has a duty to disclose that it charges a “facility fee,” also referred to as a “surcharge,” to all emergency room patients who receive care at its facility. The district court, making an Erie guess informed by the Mississippi Supreme Court’s references to, and partial application of, the Restatement (Second) of Torts Section 551, determined that Merit Health did not have a duty to disclose because the surcharge was not a “fact basic to the transaction”, and it, therefore, granted the motion to dismiss.   The Fifth Circuit reversed and remanded. The court explained that in applying relevant legal precepts, the court thinks that the Mississippi Supreme Court would hold that Plaintiff has sufficiently alleged facts that Merit Health had a duty to exercise reasonable care to disclose the surcharge. First, Plaintiff alleged that the surcharge was a material fact. Second, Plaintiff alleged that Merit Health was aware that patients like her were unaware of the surcharge, but nonetheless failed to disclose it. Third, Plaintiff alleged that she had a reasonable expectation of disclosure because Merit Health holds itself out to be a “caring community-based organization” and patients like her expected Merit Health to disclose the surcharge based on the confidence and trust that they placed in the hospital. View "Henley v. Biloxi H.M.A." on Justia Law

Plaintiffs here—proposed class representatives of former employees of various Burger King franchisees—plausibly alleged that Burger King and its franchisees engaged in “concerted action” in violation of Section 1 of the Sherman Act. The district court, though, dismissed the Plaintiffs’ complaint on the basis that Burger King and its franchisees constituted. A single economic enterprise and were not capable of the concerted action that a Section 1 violation requires.   The Eleventh Circuit reversed and remanded, concluding that the complaint plausibly alleged concerted action. The court explained that the No-Hire Agreement removes that ability and also prohibits the hiring of any Burger King employee for six months after they have left another Burger King restaurant. In this way, the No-Hire Agreement “deprive[s] the marketplace of independent centers of decisionmaking [about hiring], and therefore of actual or potential competition.” For this reason, the court wrote, that the Plaintiffs have plausibly alleged that the No-Hire Agreement qualifies under Section 1 of the Sherman Act as “concerted activity,” and the Plaintiffs sufficiently alleged that aspect of a Sherman Act Section 1 violation. View "Jarvis Arrington, et al v. Burger King Worldwide, Inc., et al" on Justia Law

In 2015, the Ninth Circuit affirmed summary judgment in favor of Guam taxpayers in their class action lawsuit against the territorial government. Guam had excessively withheld income taxes to support government spending. Some taxpayers got their refunds through an “expedited refund” process that devolved into arbitrariness and favoritism. The district court had certified a class of taxpayers who were entitled to but did not receive timely tax refunds.Duncan then filed a purported class action challenging the Virgin Islands' income tax collection practices. Duncan alleged that the Territory owed taxpayers at least $97,849,992.74 in refunds for the years 2007-2017, and that, for the years 2011-2017, the Territory failed to comply with the requirement in Virgin Islands Code title 33, section 1102(b), that the Territory set aside 10 percent of collected income taxes for paying refunds, leaving the required reserve underfunded by $150 million. The district court denied class certification, citing Duncan’s receipt of a refund check from the Territory during the pendency of her lawsuit; the check, while not the amount Duncan claims, called into question Duncan’s standing and made all of her claims atypical for the putative class. The Third Circuit vacated, rejecting the conclusion that the mid-litigation refund check deprived Duncan of standing and rendered all of her claims atypical. In evaluating whether Duncan was an adequate representative, the district court applied an incorrect legal standard. View "Duncan v. Governor of the Virgin Islands" on Justia Law

In early 2020, to help curtail the spread of COVID-19, Washington Governor Inslee issued Proclamation 20-24 prohibiting non emergency dental care. The issue this case presented for the Washington Supreme Court’s review centered on the lost business income from the Proclamation and the interpretation of an insurance contract under which the insurance company covered lost business income for the “direct physical loss of or damage to Covered Property” and excluded coverage for loss or damage caused by a “virus.” Drs. Sarah Hill and Joseph Stout were dentists who operated two dental offices under their business Hill and Stout PLLC (HS). HS bought a property insurance policy from Mutual of Enumclaw Insurance Company (MOE) that covered business income lost due to “direct physical loss of or damage to” the properties. HS sued MOE for coverage because of its inability to use its offices for nonemergency dental practice under the Proclamation and later amended to add a putative class action. MOE moved to dismiss, arguing that HS failed to show a “direct physical loss of or damage to” the property and that the virus exclusion applied. The trial court denied the motion. After review, the Supreme Court affirmed the trial court granting summary judgment in favor of MOE. “It is unreasonable to read ‘direct physical loss of . . . property’ in a property insurance policy to include constructive loss of intended use of property. Such a loss is not ‘physical.’ Accordingly, the Proclamation did not trigger coverage under the policy.” View "Hill & Stout, PLLC v. Mut. of Enumclaw Ins. Co." on Justia Law

In a putative class action, Plaintiffs alleged that Defendants violated the Individuals with Disabilities Education Act and the Fourteenth Amendment, and they sought declaratory and injunctive relief. The Ninth Circuit affirmed in part and vacated in part the district court’s dismissal of claims brought by a group of students and parents who alleged that every school district in California failed to adequately accommodate special needs students after California public schools transitioned to remote instruction in March 2020 in response to the COVID-19 pandemic.   The panel held that Plaintiffs lacked standing to sue school districts in which they were not enrolled and the State Special Schools, which they did not attend because they did not allege that those Defendants injured them personally. The panel held that even if the “juridical link” doctrine, provides an exception to the rule that a named plaintiff who has not been harmed by a defendant is generally an inadequate and atypical class representative for purposes of Fed. R. Civ. P. 23, ever applies outside of the Rule 23 context, it would not apply here.   The panel held that the California public schools’ return to in-person instruction mooted Plaintiffs’ claims against the California Department of Education and the State Superintendent of Public Education, as well as their claims against other defendants seeking injunctions requiring a return to in-person instruction or reassessment and services until students return to in-person instruction. The panel vacated the district court’s judgment dismissing on the merits the claims that Plaintiffs lacked standing to bring and remanded with instruction to dismiss those claims for lack of subject-matter jurisdiction. View "DANIELLE MARTINEZ V. GAVIN NEWSOM" on Justia Law

The consumers had rental applications denied based on inaccurate consumer reports generated by a consumer reporting agency, RealPage, which would not correct the reports unless the consumers obtained proof of the error from its sources. The identity of RealPage’s sources was not included in the disclosures to the consumers, despite their requests for their files. The consumers sued under the Fair Credit Reporting Act, 15 U.S.C. 1681, to disclose on request “[a]ll information in the consumer’s file at the time of the request” and “[t]he sources of th[at] information,” seeking damages and attorneys’ fees for themselves and on behalf of a purported class and subclass.The district court denied their Rule 23(b)(3) motion for class certification, citing the Rule’s predominance and superiority requirements and finding that their proposed class and subclass were not ascertainable. The Third Circuit vacated. The district court based its predominance analysis on a misinterpretation of Section 1681g(a), erroneously concluding that individualized proof would be needed to distinguish requests for “reports” from those for “files.” The court also misapplied ascertainability precedents. The consumers have standing, having made the requisite showing of the omission of information to which they claim entitlement, “adverse effects” that flow from the omission, and the requisite nexus to the protected “concrete interest.” View "Kelly v. RealPage Inc" on Justia Law

Plaintiff signed a Financial Responsibility Agreement (“FRA”) with Baylor University to secure her enrollment for the Spring 2020 semester. The FRA required Plaintiff to pay Baylor for “educational services,” and she paid her tuition bill in full. During the second half of the semester, Baylor responded to the COVID-19 pandemic by severely limiting on-campus activities and opportunities while conducting classes remotely. It did not, however, refund any tuition or fees. Plaintiff filed a class action against Baylor asserting a breach of contract claim, alternatively sought unjust enrichment.   The Fifth Circuit affirmed in part and reversed in part, and remanded. The court explained that the FRA is a valid contract because it describes the essential terms with a reasonable degree of certainty and definiteness. Plaintiff failed to state a claim for contract invalidity. But the crux of the parties’ dispute remains the interpretation of “educational services”. The court explained that on remand, the district court must consider whether Baylor’s or Plaintiff’s interpretation of “educational services” prevails. If the term is latently ambiguous, then further proceedings may be necessary to explore its meaning. Also on remand, the court must examine the surrounding circumstances pertinent to the making of the FRA. View "King v. Baylor University" on Justia Law

Defendant Pluralsight was a software company offering a cloud-based technology skills platform. Defendant Aaron Skonnard was Pluralsight’s Chief Executive Officer; defendant James Budge was the Chief Financial Officer. Plaintiffs purchased Pluralsight stock between January 16, 2019, and July 31, 2019. Beginning on January 16, 2019, Skonnard and Budge allegedly made materially false and misleading statements about the size and productivity of Pluralsight’s sales force, which Plaintiffs claim artificially inflated Pluralsight’s stock price, including during a secondary public offering (“SPO”) in March 2019. Pluralsight announced disappointing second-quarter earnings on July 31, 2019. Defendants attributed the low earnings to a shortage of sales representatives earlier in the year—but this explanation contradicted representations Pluralsight made in the first quarter of 2019 about the size of its sales force. Lead Plaintiffs Indiana Public Retirement System (“INPRS”) and Public School Teachers’ Pension and Retirement Fund of Chicago (“CTPF”) brought claims on behalf of a putative class of Pluralsight stock holders under the Securities Exchange Act of 1934 (“Exchange Act”), and the Securities Act of 1933 (“Securities Act”) in federal district court in Utah. Defendants moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), contending Plaintiffs failed to adequately allege: (1) any materially false or misleading statements or omissions; and (2) that Defendants acted with the requisite scienter. The district court found one statement (of eighteen alleged) was materially false or misleading but dismissed Plaintiffs’ Exchange Act claims because the complaint failed to allege a strong inference of scienter. The district court dismissed Plaintiffs’ Securities Act claims because none of the statements in Pluralsight’s SPO documents were materially false or misleading. The Tenth Circuit concluded the district court erred in dismissing Plaintffs’ Exhcange Act claims. “Although the district court correctly determined that Plaintiffs sufficiently alleged only one materially false or misleading statement, the district court’s scienter determination was erroneous.” The Court also concluded the district court relied on erroneous reasoning to dismiss the alleged violation of Item 303 of SEC Regulation S–K, so the case was remanded for further consideration. The judgment was affirmed in all other respects. View "Indiana Public Retirement, et al. v. Pluralsight, et al." on Justia Law

The federal district court for the Western District of Washington certified a question of law to the Washington Supreme Court. The federal court asked the Supreme Court to clarify the standards for equitable tolling in civil cases under Washington law. The underlying federal case involved a long-running dispute between a certified class of more than 25,000 Washington teachers (Teachers) and the Department of Retirement Systems (DRS). The federal district court determined that while the Teachers established a Fifth Amendment takings claim, the applicable statute of limitations on that claim lapsed several years before the Teachers filed this suit. The Teachers asked the federal district court to apply the doctrine of equitable tolling to allow the suit to proceed despite the statute of limitations. The Supreme Court answered the certified question by reiterating the four conditions it previously identified as necessary to justify equitable tolling of a statute of limitations in the civil context. Washington law allows equitable tolling of a statute of limitations in a civil suit when: (1) the plaintiff has exercised diligence; (2) the defendant’s bad faith, false assurances, or deception has interfered with the plaintiff’s diligent efforts; (3) tolling is consistent with (a) the purpose of the underlying statute and (b) the purpose of the statute of limitations; and (4) justice requires tolling the statute of limitations. View "Fowler v. Guerin" on Justia Law

Innovel hired Diakon to take furniture from warehouses to customers’ homes. Plaintiffs, two of Diakon's drivers, were citizens of Illinois who drove out of Innovel’s Illinois warehouses and made deliveries to customers in Illinois, Indiana, and Missouri. They signed “Service Agreements” that classify the drivers as independent contractors yet include detailed expectations for the drivers, covering uniforms, business cards, truck decals, and how to perform deliveries and installations. The Agreements select Virginia law to govern the parties’ relations and authorize Diakon to deduct fees and penalties from the drivers’ pay for truck rental fees, insurance, workers’ compensation coverage, damaged merchandise, and customers’ refused deliveries.Plaintiffs sued, alleging that Diakon misclassified them as independent contractors when they were employees under Illinois law. Illinois courts apply a three-part test to determine employee status, which is more likely to classify workers as employees than is Virginia law, which would treat the plaintiffs as contractors. The Illinois Wage Payment and Collections Act allows deductions from pay only if the employee consents in writing at the time of the deduction.The district judge certified a class but ruled in favor of Diakon. The Seventh Circuit reversed. The plaintiffs’ claims arise from their work in Illinois, not from their contracts. The Illinois Act governs payment for work in Illinois regardless of what state’s law governs other aspects of the parties' relations. View "Timothy Johnson v. Diakon Logistics, Inc." on Justia Law