Justia Class Action Opinion Summaries

Adam Steele and Krystal Comer, tax return preparers, challenged the IRS's requirement to obtain or renew a Preparer Tax Identification Number (PTIN) by completing Form W-12, which involves paying a fee and disclosing personal information. They initially joined a class action in 2014 contesting the IRS's authority to impose these fees and the amount of information required by Form W-12. However, class counsel later withdrew these claims. Steele and Comer then attempted to revive these claims in a separate lawsuit.The United States District Court for the District of Columbia dismissed their complaint, citing the rule against claim-splitting, which prevents duplicative litigation between the same parties asserting the same claims, even without a final judgment in the first case. The district court found that Steele and Comer had already raised and then withdrawn these claims in the ongoing class action and were denied leave to amend the complaint to reassert them.On appeal, the United States Court of Appeals for the District of Columbia Circuit affirmed the district court's dismissal. The appellate court held that the Paperwork Reduction Act (PRA) does not bar judicial review of the IRS's authority to demand information through Form W-12, but the rule against claim-splitting still precludes the plaintiffs' suit. The court emphasized that claim-splitting bars duplicative litigation filed before final judgment and that Steele and Comer had a fair opportunity to litigate their claims in the earlier class action. The court concluded that the district court's dismissal was proper to prevent strategic end runs around procedural rulings and to preserve the integrity of the adjudicative process. View "Steele v. United States" on Justia Law

The plaintiffs, Cynthia Wilson, Erin Angelo, and Nicholas Angelo, filed a class action lawsuit against Centene Management Company, L.L.C., Celtic Insurance Company, Superior HealthPlan, Inc., and Centene Company of Texas, L.P. They alleged that the defendants provided materially inaccurate provider lists for their health insurance plans, causing the plaintiffs and proposed class members to pay inflated premiums. Specifically, the plaintiffs claimed that the inaccuracies in the provider directories led to overcharges for access to healthcare providers who were not actually available.The United States District Court for the Western District of Texas denied class certification, concluding that the plaintiffs lacked standing because they failed to establish an injury-in-fact. The court found that the plaintiffs did not adequately demonstrate that they had reasonable expectations regarding the size of the provider network and that the premiums they paid were inflated due to discrepancies between the promised and actual network sizes. The court also questioned the plaintiffs' expert report, which attempted to show a correlation between network size and premium prices, stating that it only showed correlation, not causation.The United States Court of Appeals for the Fifth Circuit reviewed the case and determined that the district court erred by not considering the appropriate test for determining standing at the class-certification stage. The Fifth Circuit adopted the class-certification approach, which requires only that the named plaintiffs demonstrate individual standing before addressing class certification under Rule 23. The appellate court found that the district court improperly engaged in a merits-based evaluation of the plaintiffs' expert testimony when determining standing. The Fifth Circuit vacated the district court's order denying class certification and remanded the case for further proceedings consistent with its opinion. View "Wilson v. Centene Management" on Justia Law

Eugene Westmoreland, an Illinois inmate who uses a wheelchair, filed a class action lawsuit seeking prospective relief to make the showers at the Northern Reception and Classification Center (NRC) accessible. He claimed the showers were inaccessible to individuals using mobility aids. Westmoreland filed the suit without first using the prison's internal grievance process as required by the Prison Litigation Reform Act (PLRA). Six weeks after filing, he was transferred to a different facility with accessible showers, which led to questions about the mootness of his claim.The United States District Court for the Northern District of Illinois dismissed Westmoreland's suit for lack of subject matter jurisdiction, finding his claim moot due to his transfer. The court also determined that no exception to mootness applied, as Westmoreland had not exhausted the internal grievance process, making him an inadequate class representative.The United States Court of Appeals for the Seventh Circuit reviewed the case and affirmed the district court's decision. The appellate court agreed that Westmoreland's transfer rendered his claim moot and that he did not qualify for any exceptions to mootness. The court also found that Westmoreland's failure to exhaust the grievance process as required by the PLRA made him an inadequate class representative, preventing the class action from proceeding. Consequently, the court affirmed the dismissal of the suit. View "Westmoreland v. Hughes" on Justia Law

Anthony Rojas, a student at the University of Florida, filed a class action lawsuit against the University of Florida Board of Trustees. Rojas claimed that the University breached its contract by suspending on-campus services and closing facilities during the COVID-19 pandemic, despite students being required to pay mandatory fees for these services. He also alleged that the University failed to refund these fees. The complaint included a spring 2020 tuition statement, a general statement of tuition and fee estimates for the 2019-2020 academic year, and the University’s financial liability agreement.The trial court dismissed the unjust enrichment claim but denied the University’s motion to dismiss the breach of contract claim, ruling that the complaint adequately pleaded the existence of an express contract. The University appealed, and the First District Court of Appeal reversed the trial court’s decision, holding that the claims were barred by sovereign immunity. The First District concluded that the contract alleged by Rojas did not constitute an express written contract sufficient to overcome sovereign immunity.The Supreme Court of Florida reviewed the case and quashed the First District’s decision. The Court held that the waiver-by-contract doctrine does not preclude claims based on the breach of implied covenants or conditions that do not conflict with express contract provisions. The Court found that the First District erred in requiring extraordinary specificity in government contracts and in failing to recognize permissible implied covenants. The case was remanded for further proceedings consistent with this opinion. View "Rojas v. University of Florida Board of Trustees" on Justia Law

Plaintiffs, who owned real property in Southfield, Michigan, became delinquent on their property taxes between 2012 and 2014. Oakland County foreclosed on their properties under the General Property Tax Act (GPTA). The plaintiffs had the opportunity to redeem their properties by paying the delinquent taxes, but they failed to do so. Consequently, the properties were foreclosed, and the city of Southfield exercised its right of first refusal to purchase the properties for the minimum bid, which included the unpaid taxes and associated fees. The properties were then conveyed to the Southfield Neighborhood Revitalization Initiative (SNRI).The plaintiffs filed a class action lawsuit in the Oakland Circuit Court, alleging violations of their constitutional rights, including the Takings Clauses of the Michigan and United States Constitutions. The trial court granted summary disposition in favor of the defendants, citing lack of jurisdiction, lack of standing, and res judicata. The Michigan Court of Appeals affirmed the trial court's decision. However, the Michigan Supreme Court vacated the Court of Appeals' decision and remanded the case for reconsideration in light of its decision in Rafaeli, LLC v Oakland Co, which held that retaining surplus proceeds from tax-foreclosure sales violated the Takings Clause of the Michigan Constitution.On remand, the trial court again granted summary disposition to the defendants, but the Court of Appeals reversed in part, holding that Rafaeli applied retroactively and that the plaintiffs had valid takings claims. The Michigan Supreme Court reviewed the case and held that a taking occurs when a governmental unit retains property without offering it for public sale and the value of the property exceeds the amount owed in taxes and fees. The Court also held that MCL 211.78m, as amended, applies prospectively, while MCL 211.78t applies retroactively but does not govern this case. The case was remanded to the trial court for further proceedings. View "Jackson v. Southfield Neighborhood Revitalization Initiative" on Justia Law

The case involves a class action lawsuit against Matt Martorello for violating civil provisions of the Racketeering Influenced and Corrupt Organizations Act (RICO). The plaintiffs, a group of Virginia citizens, alleged that Martorello orchestrated a "Rent-A-Tribe" scheme with the Lac Vieux Desert Band of Chippewa Indians to issue high-interest loans that circumvented state usury laws by claiming tribal immunity. The loans were made through tribal entities, Red Rock Tribal Lending, LLC, Big Picture Loans, LLC, and Ascension Technologies. The plaintiffs sought damages under federal civil RICO law.The U.S. District Court for the Eastern District of Virginia dismissed the tribal entities from the case due to sovereign immunity but allowed the claims against Martorello to proceed. The court found that Martorello had made material misrepresentations about the lending operations and granted class certification. Martorello's subsequent interlocutory appeals were denied, and the district court eventually granted summary judgment in favor of the plaintiffs, awarding them over $43 million in damages.The United States Court of Appeals for the Fourth Circuit reviewed the case. Martorello challenged three district court rulings: the denial of his motion to dismiss for failure to join necessary and indispensable parties, the application of Virginia law instead of tribal law, and the rejection of his "mistake of law" defense. The Fourth Circuit affirmed the district court's judgment. It held that the tribal entities were not indispensable parties due to their settlement agreement, Virginia law applied to the off-reservation lending activities, and a mistake-of-law defense was irrelevant to the civil RICO claims, which did not require proof of specific mens rea beyond the predicate acts. The court concluded that the district court did not abuse its discretion in any of its rulings. View "Williams v. Martorello" on Justia Law

Lackie Drug Store, Inc. filed a putative class action against OptumRx, Inc. and other pharmacy benefit managers (PBMs), alleging violations of several Arkansas statutes due to the PBMs' failure to disclose, update, and notify pharmacies of changes to their Maximum Allowable Cost (MAC) lists. Lackie claimed this resulted in under-reimbursement for prescriptions. The case was initially filed in Arkansas state court and later removed to federal court. Lackie amended its complaint to include five claims, and OptumRx moved to dismiss the complaint on various grounds, including failure to state a claim and failure to exhaust administrative remedies.The United States District Court for the Eastern District of Arkansas dismissed two of Lackie's claims but retained three. The court also denied OptumRx's motion to dismiss based on the argument that Lackie failed to comply with pre-dispute procedures outlined in the Network Agreement. OptumRx later filed an answer and participated in discovery. After Lackie amended its complaint again, adding two new claims and tailoring the class definition to OptumRx, OptumRx moved to compel arbitration based on the Provider Manual's arbitration clause.The United States Court of Appeals for the Eighth Circuit reviewed the case. The court held that OptumRx waived its right to compel arbitration for the original three claims by substantially invoking the litigation machinery before asserting its arbitration right. However, the court found that OptumRx did not waive its right to compel arbitration for the two new claims added in the amended complaint. The court also held that the district court erred in addressing the arbitrability of the new claims because the Provider Manual included a delegation clause requiring an arbitrator to decide arbitrability issues.The Eighth Circuit affirmed the district court's decision in part, reversed it in part, and remanded the case with instructions to grant OptumRx's motion to compel arbitration for the two new claims. View "Lackie Drug Store, Inc. v. OptumRx, Inc." on Justia Law

Plaintiffs, limited liability companies, filed class action lawsuits in the United States District Court for the District of Maryland seeking relief under the Medicare Secondary Payer (MSP) provisions. These provisions make Medicare a secondary payer when a beneficiary has other insurance coverage. Plaintiffs obtained assignments from Medicare Advantage Organizations and other secondary payers to seek reimbursement from primary payers like the defendants, Government Employees Insurance Company and its affiliates (GEICO). Plaintiffs had no preexisting interest in the claims and were compensated on a contingency basis.The United States District Court for the District of Maryland denied GEICO's motion to dismiss the case, which argued that the assignments were void as against Maryland public policy based on the doctrines of maintenance, champerty, and barratry. The court found no clear statement of Maryland law on this issue and certified questions to the Supreme Court of Maryland.The Supreme Court of Maryland held that Plaintiffs did not violate Maryland’s barratry statute, which prohibits soliciting another person to sue for personal gain without an existing relationship or interest. Plaintiffs did not solicit secondary payers to file lawsuits but obtained the right to sue in their own names through assignments. The court also held that the common law doctrines of maintenance, champerty, and barratry, to the extent they still apply, do not invalidate Plaintiffs’ assignments. The court concluded that the assignments are not void as against public policy and did not address the enforceability of choice-of-law provisions in the agreements. View "GEICO v. MAO-MSO Recovery II" on Justia Law

In 2015, product liability cases involving the blood-pressure medication Olmesartan were consolidated into a multidistrict litigation (MDL) in the United States District Court for the District of New Jersey. Adam Slater and his law firm, Mazie Slater Katz & Freeman, LLC, represented over 200 plaintiffs, and the case settled for over $300 million. Subsequently, Anthony Martino, a plaintiff in the MDL, filed a class action in New Jersey state court against his former lawyers, alleging they received contingent fees in violation of New Jersey court rules. The case was removed to federal court and dismissed, with the dismissal affirmed on appeal.Following this, twenty-one individuals represented by the same defendants in the MDL filed a similar action in New Jersey state court, alleging breach of contract, legal malpractice, conversion, and unjust enrichment. Defendants removed the case to the District Court, citing diversity and federal-question jurisdiction. The District Court denied the plaintiffs' motion to remand, asserting ancillary enforcement jurisdiction, and granted defendants' motion for judgment on the pleadings, applying issue preclusion. The court also dismissed the parties' motions for sanctions as moot.The United States Court of Appeals for the Third Circuit reviewed the case. The court held that ancillary enforcement jurisdiction does not confer original jurisdiction sufficient for removal under 28 U.S.C. § 1441(a). The court also found that the plaintiffs' state-law claims did not necessarily raise a federal issue to establish federal-question jurisdiction. The court vacated the District Court's judgment and remanded the case to determine if the amount in controversy exceeded $75,000 for diversity jurisdiction. Additionally, the court vacated the order dismissing the motions for sanctions as moot, instructing the District Court to consider the merits of each motion. View "Johnson v. Mazie" on Justia Law

Plaintiffs in this multi-district products liability suit allege that they purchased defective Chrysler Pacifica minivans from FCA, which were recalled due to a risk of battery explosions. After the recall, plaintiffs filed seven putative class action suits, which were consolidated in the Eastern District of Michigan. During discovery, FCA discovered that some plaintiffs had agreed to arbitration clauses when purchasing their minivans and moved to compel arbitration for those plaintiffs. The district court denied FCA’s motion, finding that FCA had waived its right to arbitrate by moving to dismiss the entire complaint.The United States District Court for the Eastern District of Michigan denied FCA’s motion to compel arbitration, concluding that FCA had waived its right to arbitrate by engaging in litigation conduct inconsistent with that right, specifically by moving to dismiss the plaintiffs’ claims. The district court made this finding sua sponte, without the plaintiffs raising the issue of waiver.The United States Court of Appeals for the Sixth Circuit reviewed the case and reversed the district court’s decision. The appellate court held that a party cannot waive its right to arbitration without knowledge of that right. The court found that FCA did not know about the arbitration clauses until it obtained the relevant purchase agreements through discovery. Additionally, the appellate court determined that the district court erred by raising the issue of waiver on its own, violating the principle of party presentation. The Sixth Circuit concluded that the district court’s decision was clearly erroneous and remanded the case for further proceedings consistent with its opinion. View "Berzanskis v. FCA US, LLC" on Justia Law