Justia Class Action Opinion Summaries

A group of institutional investors brought a class action lawsuit against a pharmaceutical company and several of its officers, alleging violations of federal securities laws after the company’s share price dropped significantly following the rejection of a takeover bid and subsequent negative financial disclosures. One large investor, Sculptor, intended to pursue its own individual lawsuit rather than participate in the class action. The District Court certified the class and issued a notice specifying the procedure and deadline for class members to opt out. Although Sculptor intended to opt out, its counsel failed to submit the required exclusion request by the deadline. Both Sculptor and the company proceeded for years as if Sculptor had opted out, litigating the individual action and treating Sculptor as an opt-out plaintiff.The United States District Court for the District of New Jersey later approved a class settlement, which prompted the discovery that Sculptor had never formally opted out. Sculptor then sought to be excluded from the class after the deadline, arguing that its conduct showed a reasonable intent to opt out, that its failure was due to excusable neglect, and that the class notice was inadequate. The District Court rejected these arguments, finding that only compliance with the court’s specified opt-out procedure sufficed, that Sculptor’s neglect was not excusable under the relevant legal standard, and that the notice met due process requirements.The United States Court of Appeals for the Third Circuit affirmed the District Court’s judgment. The Third Circuit held that a class member must follow the opt-out procedures established by the district court under Rule 23; a mere “reasonable indication” of intent to opt out is insufficient. The court also found no abuse of discretion in denying Sculptor’s late opt-out request and concluded that the class notice satisfied due process. View "Perrigo Institutional Investor Group v. Papa" on Justia Law

A group of foster children in Oregon, through their representatives, brought a class action lawsuit against the Oregon Department of Human Services (ODHS) and state officials, alleging violations of their substantive due process rights due to serious abuses experienced while in ODHS’s legal custody. The plaintiffs sought relief on behalf of all children for whom ODHS had or would have legal responsibility, including those in ODHS’s legal custody but physically placed with their parents, either because they had not been removed from their homes or because they were on a temporary “Trial Home Visit” after removal.The United States District Court for the District of Oregon certified a general class that included all children in ODHS’s legal or physical custody. After extensive litigation, the parties reached a settlement agreement, but disagreed on whether the term “Child in Care” in the agreement included children in ODHS’s legal custody who were physically with their parents (the “Disputed Children”). The district court concluded that these children were not covered by the settlement, reasoning that children living with their biological parents did not have substantive due process rights to be free from serious abuses while in ODHS’s legal custody.On appeal, the United States Court of Appeals for the Ninth Circuit reviewed the district court’s interpretation of the settlement agreement and the scope of substantive due process protections. The Ninth Circuit held that the Disputed Children—those in ODHS’s legal custody but physically with their parents—are entitled to substantive due process protections. The court found that once the state assumes legal custody, it has an affirmative duty to provide reasonable safety and minimally adequate care, regardless of the child’s physical placement. The Ninth Circuit reversed the district court’s order and remanded for further proceedings. View "WYATT B. V. KOTEK" on Justia Law

A group of individuals in the custody of the Illinois Department of Corrections (IDOC) filed a lawsuit in 2007, alleging inadequate mental healthcare. The case developed into a class action, and in 2016, the parties reached a settlement agreement that required IDOC to meet specific mental-health treatment benchmarks. The agreement included a provision for $1.9 million in attorney’s fees to be paid to plaintiffs’ counsel if the court granted relief for violations of the agreement. In 2018, the district court found IDOC in breach and issued an injunction, triggering the fee provision. While the defendants appealed, the parties entered into further agreements, resulting in the $1.9 million being paid to plaintiffs’ counsel.The United States District Court for the Central District of Illinois later extended its enforcement jurisdiction over the settlement agreement, but after the expiration of that jurisdiction, the court returned the case to its active docket. The parties continued to litigate, with plaintiffs filing amended complaints and defendants moving to dismiss. More than a year after resuming active litigation, the district court raised concerns about its subject-matter jurisdiction, ultimately concluding that its jurisdiction over the underlying claims ended when its enforcement jurisdiction over the settlement agreement expired. The court dismissed all claims and denied the defendants’ motion to recover the $1.9 million in attorney’s fees.The United States Court of Appeals for the Seventh Circuit reviewed the case. It held that, under the parties’ agreements, the payment of $1.9 million in attorney’s fees to plaintiffs’ counsel was proper and did not need to be returned, even after the district court’s injunction was vacated. The court also vacated the district court’s dismissal of the underlying claims, remanding for the district court to determine whether the settlement agreement moots those claims. The Seventh Circuit affirmed the denial of the defendants’ motion to recover the attorney’s fees. View "Daniels v. Jones" on Justia Law

A website visitor in Pennsylvania interacted with a retail website that used session replay code provided by a third party to record her mouse movements, clicks, and keystrokes. The visitor did not enter any sensitive or personal information during her session. She later brought a putative class action against the website operator, alleging that the use of session replay code constituted intrusion upon seclusion and violated the Pennsylvania Wiretapping and Electronic Surveillance Control Act (WESCA).The United States District Court for the Western District of Pennsylvania dismissed the complaint with prejudice, finding that the plaintiff lacked Article III standing because she did not allege a concrete injury. The court reasoned that the mere recording of her website activity, which did not include any personal or sensitive information, was not analogous to harms traditionally recognized at common law, such as disclosure of private information or intrusion upon seclusion. The court also found that amendment would be futile.On appeal, the United States Court of Appeals for the Third Circuit reviewed the dismissal de novo and agreed that the plaintiff failed to allege a concrete injury sufficient for Article III standing. The Third Circuit held that the alleged harm was not closely related to the traditional privacy torts of disclosure of private information or intrusion upon seclusion, as the information recorded was neither sensitive nor publicly disclosed, and there was no intrusion into the plaintiff’s solitude or private affairs. The court also clarified that a statutory violation alone does not automatically confer standing without a concrete harm. However, the Third Circuit determined that the District Court erred in dismissing the complaint with prejudice and modified the order to a dismissal without prejudice, affirming the order as modified. View "Cook v. GameStop, Inc." on Justia Law

Several individuals from five different states purchased ovens with front-mounted burner knobs manufactured by a major appliance company. They allege that these ovens have a defect causing the stovetop burners to turn on unintentionally, sometimes resulting in gas leaks. The plaintiffs claim they were unaware of this defect at the time of purchase, but that the manufacturer had prior knowledge of the issue through consumer complaints sent to the U.S. Consumer Product Safety Commission (CPSC) and reviews posted on the company’s website. The plaintiffs assert that, had they known about the defect, they would have paid less for the ovens or not purchased them at all.The plaintiffs filed a class action in the United States District Court for the Western District of Michigan, alleging violations of federal warranty law, fraud by omission, breach of express and implied warranties, unjust enrichment, and violations of state consumer protection statutes. The district court found that the plaintiffs had Article III standing, as they alleged a concrete injury, but dismissed all claims for failure to state a plausible claim for relief. The plaintiffs appealed the dismissal of their state common law fraud and statutory consumer protection claims, while the manufacturer argued that the plaintiffs lacked standing.The United States Court of Appeals for the Sixth Circuit reviewed the case de novo. The court held that the plaintiffs had Article III standing because they plausibly alleged economic injury from overpaying for a defective product. The court further held that the plaintiffs plausibly alleged the manufacturer’s knowledge of the defect and its safety risks, particularly because the CPSC had sent incident reports directly to the manufacturer. The court reversed the district court’s dismissal of most state law fraud and consumer protection claims, except for the Illinois common law fraud claim, which failed for lack of a duty to disclose under Illinois law. The case was remanded for further proceedings consistent with these holdings. View "Tapply v. Whirlpool Corp." on Justia Law

A group of federally funded health centers and clinics serving low-income populations alleged that several major drug manufacturers conspired to restrict drug discounts offered through the federal Section 340B Drug Discount Program. The plaintiffs claimed that, beginning in 2020, the manufacturers coordinated efforts to limit the availability of discounted diabetes medications at contract pharmacies, resulting in significant financial losses for safety-net providers. The manufacturers, who are direct competitors in the diabetes drug market, allegedly implemented similar policies within a short timeframe, each restricting or eliminating the discounts in ways that had a comparable anticompetitive effect.After the plaintiffs filed a class action complaint, the United States District Court for the Western District of New York dismissed their first amended complaint and denied leave to file a second amended complaint. The district court concluded that the plaintiffs failed to allege sufficient parallel conduct or factual circumstances suggesting a conspiracy, and thus found the proposed amendments futile.The United States Court of Appeals for the Second Circuit reviewed the case and applied a de novo standard to both the dismissal and the denial of leave to amend. The Second Circuit held that the plaintiffs’ proposed second amended complaint alleged enough facts to plausibly infer a horizontal price-fixing conspiracy under Section 1 of the Sherman Act. The court found that the complaint sufficiently pled both parallel conduct and “plus factors” such as a common motive to conspire, actions against individual economic self-interest, and a high level of interfirm communications. The court also determined that Supreme Court precedents cited by the defendants did not bar the plaintiffs’ claims. Accordingly, the Second Circuit vacated the district court’s judgment and remanded the case with instructions to allow the plaintiffs to file their second amended complaint. View "Mosaic Health, Inc. v. Sanofi-Aventis U.S., LLC" on Justia Law

A group of industrial and commercial purchasers of natural gas in Wisconsin alleged that several gas companies participated in a conspiracy to fix natural gas prices between 2000 and 2002. The plaintiffs claimed that the defendants engaged in practices such as wash trading, churning, and false reporting to manipulate published price indices, which in turn affected the prices paid by purchasers in Wisconsin. The plaintiffs sought remedies under Wisconsin antitrust law, including both a “full consideration” refund of payments made under contracts tainted by the conspiracy and treble damages.The litigation was initially consolidated with similar cases from other states in multidistrict proceedings in the District of Nevada, where class certification was denied. After the Ninth Circuit vacated that denial and remanded, the Wisconsin case was returned to the United States District Court for the Western District of Wisconsin. There, the plaintiffs renewed their motion for class certification under Federal Rule of Civil Procedure 23(b)(3), relying on expert testimony to show that the alleged price-fixing had a common impact on all class members. The defendants countered with their own experts, arguing that the natural gas market’s complexity and variations in contract terms precluded common proof of impact. The district court certified the class, finding that common questions predominated, but did not fully resolve the disputes between the parties’ experts.The United States Court of Appeals for the Seventh Circuit reviewed the class certification order. The court held that, under recent Supreme Court and Seventh Circuit precedent, the district court was required to engage in a more rigorous analysis of the conflicting expert evidence regarding antitrust impact and the existence of a national market. The Seventh Circuit vacated the class certification and remanded the case for further proceedings, instructing the district court to make factual findings on these expert disputes before deciding whether class certification is appropriate. View "Arandell Corporation v. Xcel Energy Inc." on Justia Law

A South Carolina resident brought a lawsuit in federal court against a Michigan-based bank, alleging that the bank engaged in three improper practices related to overdraft and ATM fees. Specifically, the plaintiff claimed the bank assessed overdraft fees even when accounts had sufficient funds, charged multiple insufficient-funds fees for a single transaction, and imposed two out-of-network fees for a single ATM withdrawal. The plaintiff sought to certify nationwide classes for each alleged wrongful fee practice.The United States District Court for the District of South Carolina denied the plaintiff’s motion for class certification. The court relied on South Carolina’s “Door Closing Statute” (S.C. Code Ann. § 15-5-150), as interpreted by the Supreme Court of South Carolina in Farmer v. Monsanto Corp., to conclude that nonresidents whose claims did not arise in South Carolina could not be included in the class. As a result, the court found that the plaintiff could not satisfy the numerosity requirement of Federal Rule of Civil Procedure 23 and denied class certification. The plaintiff appealed this decision under Rule 23(f), and the United States Court of Appeals for the Fourth Circuit granted review.The United States Court of Appeals for the Fourth Circuit held that Federal Rule of Civil Procedure 23, as interpreted by the Supreme Court in Shady Grove Orthopedic Associates, P.A. v. Allstate Insurance Co., directly conflicts with the Door Closing Statute’s additional requirements for class actions. The Fourth Circuit concluded that Rule 23 alone governs the certification of class actions in federal court and that the Door Closing Statute cannot limit class membership in this context. The court reversed the district court’s denial of class certification and remanded the case for further proceedings. View "Grice v. Independent Bank" on Justia Law

The plaintiffs, former tenants of apartments owned and managed by the defendants, filed a putative class action alleging that the defendants violated Massachusetts General Laws Chapter 186, Section 15B (4) (iii) by deducting charges for "reasonable wear and tear" from tenants' security deposits. The plaintiffs also claimed that the defendants included lease provisions requiring tenants to have the premises professionally cleaned at the end of the lease, which they argued was a violation of the same statute.The case was initially filed in the Superior Court and later removed to the United States District Court for the District of Massachusetts. The plaintiffs moved for class certification, and both parties moved for summary judgment. The Federal judge denied these motions without prejudice and certified two questions to the Supreme Judicial Court of Massachusetts regarding the interpretation of the statute.The Supreme Judicial Court of Massachusetts held that a tenant's reasonable use of a property as a residence is expected to result in gradual deterioration, such as the need for painting, carpet repair, or similar refurbishment at the end of a lease. Deductions from a security deposit for such reasonable wear and tear violate the statute. Whether damage constitutes "reasonable wear and tear" is a fact-specific question depending on various circumstances, including the nature and cause of the damage, the condition of the property at the start of the lease, and the length of the occupancy.The court also held that a lease provision requiring a tenant to have the premises professionally cleaned at the end of the lease, on penalty of bearing the costs of repairs regardless of whether the damage is reasonable wear and tear, conflicts with the statute. Such a provision is void and unenforceable under Massachusetts General Laws Chapter 186, Section 15B (8). View "Peebles v. JRK Property Holdings, Inc." on Justia Law

The case involves two companies, Skyline Tower Painting, Inc. (Skyline) and Television Tower, Inc. (TTI), which were sued by a group of plaintiffs for allegedly causing lead paint contamination in a Baltimore neighborhood. TTI owns a TV tower that was coated with lead-based paint, and Skyline was contracted to clean the tower using hydroblasting, a process that dislodged and dispersed the lead paint. The plaintiffs, who own property within a 4000-foot radius of the tower, claimed that the hydroblasting caused lead paint chips and dust to spread throughout their community, posing health risks and reducing property values.The plaintiffs filed a class action lawsuit in Maryland state court, asserting claims for negligence, negligent hiring, retention, and supervision, and strict liability for an abnormally dangerous activity. The defendants removed the case to federal court under the Class Action Fairness Act (CAFA). The plaintiffs moved to remand the case to state court, invoking CAFA’s local-controversy exception. The United States District Court for the District of Maryland granted the motion to remand, finding that the local-controversy exception applied.The United States Court of Appeals for the Fourth Circuit reviewed the case. The court first determined that it had jurisdiction to hear the appeal under 28 U.S.C. § 1291, despite the defendants also filing petitions for permission to appeal under 28 U.S.C. § 1453. The court dismissed the § 1453 petitions as unnecessary. On the merits, the Fourth Circuit affirmed the district court’s decision, holding that the local-controversy exception to CAFA applied. The court found that more than two-thirds of the proposed class members were Maryland citizens, and that TTI, a Maryland citizen, was a significant defendant from whom significant relief was sought and whose conduct formed a significant basis for the claims. View "Skyline Tower Painting, Inc. v. Goldberg" on Justia Law