Justia Class Action Opinion Summaries

Two former employees of a fire alarm and sprinkler company provided fire alarm testing and inspection services on public works projects in New York. They alleged that their employer failed to pay them the prevailing wages required by New York Labor Law § 220, which mandates that workers on public works projects receive at least the prevailing rate of wages. The contracts between the employer and various public entities included clauses that either disclaimed the applicability of prevailing wage laws, were silent on the issue, or referenced prevailing wage rates. Many contracts also contained a provision shortening the statute of limitations for any action against the company to one year.The United States District Court for the Northern District of New York granted partial summary judgment in favor of the employer on all prevailing wage-related claims. The court found that: (1) the contracts did not expressly promise to pay prevailing wages; (2) the one-year contractual limitations period barred the claims; and (3) fire alarm testing and inspection work was not covered by § 220’s prevailing wage requirement. The court also dismissed related quantum meruit and unjust enrichment claims and later approved a class action settlement on other claims, with the prevailing wage claims reserved for appeal.On appeal, the United States Court of Appeals for the Second Circuit held that, based on a 2009 New York State Department of Labor opinion letter and relevant precedent, fire alarm testing and inspection work is covered by § 220, entitling the plaintiffs to prevailing wages. However, the Second Circuit found New York law unsettled on whether a promise to pay prevailing wages is implicit in every public works contract (even if not expressly stated) and whether a contractual one-year limitations period is enforceable against workers’ third-party beneficiary claims. The court therefore certified these two questions to the New York Court of Appeals for resolution. View "Walton v. Comfort Systems" on Justia Law

Customers of a heating oil company in Massachusetts brought a state court class action alleging that, starting in 2012, the company sold home heating oil with excessive biodiesel content, which damaged their heating equipment. The company received a demand letter and complaint in March 2019, before it was insured by the plaintiff insurance company. The insurance company began providing coverage in July 2019 under a commercial general liability policy and an umbrella policy. The policy included provisions excluding coverage for property damage known to the insured before the policy period began.After being asked to defend the company in the state class action, the insurer refused, arguing that the company’s prior knowledge of the alleged damage—based on the demand letter, complaint, and media coverage—triggered the policy’s known loss and loss-in-progress exclusions. The insurer then filed a declaratory judgment action in the United States District Court for the District of Massachusetts, seeking a ruling that it had no duty to defend or indemnify. The state court class had two subclasses: customers who received oil before July 5, 2019, and those who first received oil after that date.The district court found that the insurer had no duty to defend claims by customers who received oil before the policy period, but did have a duty to defend claims by customers who first received oil after coverage began, since the company could not have known of damage that had not yet occurred. Applying the “in for one, in for all” rule, the court held the insurer must defend the entire suit. The court denied summary judgment for the insurer on the duty to defend and granted partial summary judgment to the insured.The United States Court of Appeals for the First Circuit affirmed, holding that the policy’s known loss and loss-in-progress provisions did not bar coverage for claims by customers whose property damage began after the policy period commenced, and thus the insurer has a duty to defend the entire class action. View "Federated Mutual Insurance Co. v. Peterson's Oil Service, Inc." on Justia Law

During the COVID-19 pandemic, two individuals who held automobile insurance policies with a major insurer in California alleged that the insurer’s rates became excessive due to a significant reduction in driving and traffic accidents. They claimed that the insurer was required by statute to refund a portion of the premiums collected during this period, even though the rates had previously been approved by the state’s insurance commissioner. The insurer did provide partial refunds in response to directives from the insurance commissioner, but the plaintiffs argued these refunds were insufficient and sought further restitution on behalf of a class of similarly situated policyholders.The Superior Court of Alameda County initially allowed the plaintiffs to amend their complaint after sustaining a demurrer. In their amended complaint, the plaintiffs continued to assert claims under California’s Unfair Competition Law and for unjust enrichment, maintaining that the insurer’s failure to provide full refunds violated Insurance Code section 1861.05(a). The trial court, however, sustained the insurer’s subsequent demurrer without leave to amend, holding that the statutory scheme did not require insurers to retroactively refund premiums collected under previously approved rates, even if those rates later became excessive due to changed circumstances.The California Court of Appeal, First Appellate District, Division One, reviewed the case on appeal. The court held that Insurance Code section 1861.05(a) does not impose an independent obligation on insurers to retroactively refund premiums collected under rates approved by the insurance commissioner, even if those rates later become excessive. The court reasoned that the statutory scheme provides for prospective rate adjustments through the commissioner’s review process, not retroactive modifications. The court also found that the insurer’s conduct was affirmatively permitted under the statutory “prior approval” system, and thus not actionable under the Unfair Competition Law. The judgment in favor of the insurer was affirmed. View "Davis v. CSAA Insurance Exchange" on Justia Law

A plaintiff who lost his job during the COVID-19 pandemic applied for and received regular unemployment benefits from the Washington State Employment Security Department (ESD). After exhausting those benefits, he applied for and received additional benefits under the federally funded Pandemic Emergency Unemployment Compensation (PEUC) program, created by the CARES Act. Following an audit, ESD redetermined his eligibility, reduced his weekly benefit, and assessed overpayments, sending him multiple, confusing notices with inconsistent information and deadlines. While the plaintiff appealed, ESD began offsetting his ongoing PEUC benefits to recover the alleged overpayments.An administrative law judge later found that ESD’s notices failed to provide adequate explanation or legal basis for the benefit reductions and overpayment assessments, and ordered ESD to issue a new redetermination. ESD reimbursed the plaintiff for the offset amounts, but its system continued to show a balance owed. The plaintiff, on behalf of himself and similarly situated individuals, filed a putative class action in the United States District Court for the Western District of Washington, alleging deprivation of property without due process under the Fourteenth Amendment and the Social Security Act. The district court held that while the plaintiff had a property interest in regular unemployment benefits, he did not have a constitutionally protected property interest in PEUC benefits, because state participation in the PEUC program was voluntary and could be terminated at any time.On interlocutory appeal, the United States Court of Appeals for the Ninth Circuit reversed the district court’s ruling. The Ninth Circuit held that the CARES Act’s PEUC program, once a state opted in, created a constitutionally protected property interest in PEUC benefits for eligible individuals. The Act’s mandatory language and objective eligibility criteria significantly constrained state discretion, giving rise to legitimate claims of entitlement. The case was remanded for further proceedings. View "STERLING V. FEEK" on Justia Law

Two individuals applied for jobs at a retail liquor store chain in Washington after a new state law required employers to include wage and benefit information in all job postings. Both applicants submitted their applications through a third-party website, Indeed.com, where the postings did not include the required pay information. One of the applicants also interviewed in person and discussed pay with the store manager but ultimately declined a job offer. Both individuals then filed a class action lawsuit, seeking statutory damages for the employer’s failure to comply with the disclosure requirements.The case was initially brought in King County, Washington. The employer argued that the plaintiffs were not the type of “job applicants” the law was intended to protect, asserting that only those with a genuine or “bona fide” interest in the job should be eligible for remedies. The parties disagreed on the meaning of “job applicant” under the Washington Equal Pay and Opportunities Act (EPOA). The United States District Court for the Western District of Washington, faced with this dispute, certified a question to the Washington Supreme Court, asking what a plaintiff must prove to be considered a “job applicant” under the statute.The Supreme Court of the State of Washington held that, under RCW 49.58.110(4), a person qualifies as a “job applicant” if they apply to a specific job posting, regardless of their subjective intent or whether they are a “bona fide” or “good faith” applicant. The court concluded that the plain language of the statute does not require proof of genuine interest in the position, and that the legislature intentionally omitted such a requirement. The court’s answer clarified that subjective intent is irrelevant for eligibility to seek remedies under the EPOA. View "Branson v. Washington Fine Wine & Spirits, LLC" on Justia Law

Walmart, a national pharmacy operator, was investigated by the U.S. Attorney’s Office for the Eastern District of Texas from 2016 to 2018 regarding its opioid dispensing practices. The investigation included raids, subpoenas, and meetings where prosecutors indicated a possible indictment, but ultimately, the Department of Justice declined to prosecute criminally, though a civil investigation continued. In 2020, a news article revealed the investigation, causing Walmart’s stock price to drop. Later that year, the DOJ filed a civil lawsuit against Walmart for alleged violations of the Controlled Substances Act.Investors who owned Walmart stock during the relevant period filed a putative securities fraud class action in the United States District Court for the District of Delaware. They alleged that Walmart’s public filings failed to adequately disclose the government investigation, violating Section 10(b) of the Securities Exchange Act and SEC Rule 10b-5, and that Walmart’s statements about its “reasonably possible” liabilities and compliance with accounting rules (ASC 450) were misleading. The District Court granted Walmart’s motion to dismiss, finding no actionable misrepresentation or omission, and denied plaintiffs’ request to further amend their complaint.The United States Court of Appeals for the Third Circuit reviewed the case de novo. The court held that Walmart’s omission of the investigation from its disclosures before June 4, 2018, was not misleading because the investigation did not constitute a “reasonably possible” material liability at that stage. After June 4, 2018, Walmart’s disclosures sufficiently informed investors about the existence and potential impact of government investigations. The court also found no violation of ASC 450 and affirmed the District Court’s denial of leave to amend, concluding that further amendment would be futile. The Third Circuit affirmed the dismissal of all claims. View "In re Walmart Inc. Securities Litigation" on Justia Law

Robinhood Markets, Inc., an online brokerage firm, experienced a surge in business during early 2021 due to increased trading in “meme stocks” and Dogecoin. This activity declined sharply in the second quarter of 2021, leading to significant drops in key financial metrics and performance indicators. In July 2021, Robinhood conducted an initial public offering (IPO) and issued a registration statement that included limited information about its second-quarter performance. After the IPO, Robinhood released its full second-quarter results, which revealed substantial declines and led to a drop in its stock price. Plaintiffs, representing a class of investors, alleged that Robinhood’s registration statement omitted material information about these declines, violating Sections 11, 12, and 15 of the Securities Act of 1933.The United States District Court for the Northern District of California dismissed the plaintiffs’ claims with prejudice. The district court found that Robinhood and its co-defendants were not liable under the Securities Act for failing to disclose the pre-IPO declines in key performance indicators and certain revenue sources. The court also held that there was no actionable omission regarding the increased percentage of Robinhood’s revenue attributable to speculative trading.On appeal, the United States Court of Appeals for the Ninth Circuit reviewed the district court’s decision de novo. The Ninth Circuit held that the district court applied incorrect legal standards to the plaintiffs’ theories under Section 11’s “misleading” prong and Item 303 of Regulation S-K. The appellate court clarified that, in this context, Sections 11 and 12 require disclosure of all material information, and rejected the “extreme departure” test used by the district court. The court vacated the dismissal as to these theories and remanded for further proceedings. However, the Ninth Circuit affirmed the district court’s dismissal of the claim based on Item 105 of Regulation S-K, finding no duty to provide a breakdown of revenue sources for the relevant period. View "Sodha v. Golubowski" on Justia Law

The plaintiff purchased a life insurance policy for her son and consistently paid the required premiums. She alleges that the insurer failed to provide the statutory notices and protections mandated by California law before terminating her policy for nonpayment. After missing a payment in 2016, her policy lapsed, and following reinstatement, it was terminated again in 2018 after another missed payment. The plaintiff contends that the insurer’s failure to comply with statutory notice requirements rendered the termination ineffective and that her experience was representative of many other policyholders in California.The United States District Court for the Eastern District of California granted in part the plaintiff’s motion for class certification. The court found that the prerequisites of Federal Rule of Civil Procedure 23(a) were met and certified a class under Rule 23(b)(2) for declaratory and injunctive relief. The certified class included all policy owners or beneficiaries whose policies lapsed for nonpayment without the required statutory notice. The court appointed the plaintiff as class representative but denied, without prejudice, certification for monetary relief under Rule 23(b)(3).The United States Court of Appeals for the Ninth Circuit reviewed the district court’s class-certification order. Relying on its intervening decision in Small v. Allianz Life Insurance Co. of North America, the Ninth Circuit held that to recover for violations of the relevant California statutes, plaintiffs must show not only a statutory violation but also that the violation caused them harm. The court found that the plaintiff was not an adequate class representative for beneficiaries and that her claims were not typical of class members who intentionally allowed their policies to lapse. The Ninth Circuit reversed the district court’s class-certification order and remanded the case for further proceedings. View "Farley v. Lincoln Benefit Life Co." on Justia Law

Two students at a private college in Michigan alleged that they were sexually assaulted by fellow students—one incident occurring in an on-campus dormitory and the other in an off-campus apartment. Both students reported the assaults to college officials, who initiated investigations led by outside lawyers. The students claimed that the college’s response was inadequate: one student’s assailant received no additional punishment due to a prior infraction, and the other’s assailant was disciplined but later allowed to rejoin the baseball team. Both students experienced emotional distress and academic or personal setbacks following the incidents.The students filed suit in the United States District Court for the Western District of Michigan, asserting state-law claims for negligence, intentional infliction of emotional distress, and sex discrimination under Michigan’s civil rights statute, on behalf of themselves and a proposed class. The district court granted the college’s motion to dismiss for failure to state a claim, finding that the plaintiffs had not alleged sufficient facts to support any of their claims.On appeal, the United States Court of Appeals for the Sixth Circuit reviewed the dismissal de novo. The court held that Michigan law does not impose a general duty on colleges to protect students from criminal acts by third parties, absent a special relationship or foreseeability of imminent harm to identifiable individuals, neither of which was present here. The court also found that the alleged conduct by the college did not rise to the level of “extreme and outrageous” required for an intentional infliction of emotional distress claim. Finally, the court concluded that the plaintiffs failed to allege facts showing either disparate treatment or disparate impact based on sex under Michigan’s civil rights law. Accordingly, the Sixth Circuit affirmed the district court’s dismissal of all claims. View "Chen v. Hillsdale College" on Justia Law

After purchasing a collectible from an online retailer, the plaintiff was charged multiple times through his PayPal account for additional items he alleges he did not knowingly subscribe to. He filed a putative class action in California state court against the retailer, asserting claims under California’s False Advertising Law and Unfair Competition Law. Importantly, he sought only equitable restitution and did not pursue damages, even though he conceded that damages were available under California’s Consumer Legal Remedies Act.The defendant removed the case to the United States District Court for the Southern District of California under the Class Action Fairness Act, which was not disputed as a proper basis for federal jurisdiction. The plaintiff then moved to remand, arguing that the federal court lacked “equitable jurisdiction” because he had an adequate remedy at law available, even though he chose not to pursue it. The district court agreed, holding that it could remand for lack of equitable jurisdiction and that the defendant could not waive the defense that an adequate legal remedy was available.On appeal, the United States Court of Appeals for the Ninth Circuit held that district courts do have the authority to remand a removed case to state court for lack of equitable jurisdiction. However, the Ninth Circuit further held that a defendant may waive the adequate-remedy-at-law defense in order to keep the case in federal court. The court vacated the district court’s remand order and sent the case back to allow the defendant the opportunity to perfect its waiver. If the defendant waives the defense, the case may proceed in federal court. View "RUIZ V. THE BRADFORD EXCHANGE, LTD." on Justia Law