Justia Class Action Opinion SummariesArticles Posted in Commercial Law
Rowland v. Bissell Homecare, Inc.
Each of the four plaintiffs filed a putative class action complaint in state court, alleging violations of the Magnuson-Moss Warranty Act (MMWA), 15 U.S.C. 2301, claiming that the defendants either concealed written warranties prior to sale or provided warranties that prohibit the use of third-party repair services or parts in violation of MMWA. The defendants removed the actions to the U.S. District Court for the Western District of Pennsylvania pursuant to the Class Action Fairness Act (CAFA), 28 U.S.C. 1332(d)(2).The plaintiffs moved to remand to state court. The district court held that remand was appropriate because MMWA’s jurisdictional requirements were not satisfied and neither CAFA nor traditional diversity jurisdiction can be used to circumvent those jurisdictional requirements. The Third Circuit affirmed.MMWA claims can only be brought in federal court if section 2310(d)(3)’s requirements are satisfied, including that a class action name at least 100 plaintiffs; here, each complaint names only one plaintiff. MMWA’s stringent jurisdictional requirements are irreconcilable with CAFA. Allowing CAFA to govern MMWA class claims would undercut the MMWA’s requirement and allow an MMWA class action to proceed in contravention of the MMWA. View "Rowland v. Bissell Homecare, Inc." on Justia Law
Rivera-Ceren v. Presidential Limousine & Auto Sales, Inc.
The Supreme Court reversed the judgment of the circuit court denying Plaintiff's motion for class-action certification in her suit against Defendant, a car dealership, holding that the circuit court abused its discretion in denying the motion.Plaintiff filed a class action complaint against Defendant alleging that the "mandatory notice of private or public sale" sent by Defendant repossessing Plaintiff's vehicle and informing her that the vehicle would be sold at a public sale failed to comply with the Uniform Commercial Code and Arkansas law and that the accrued interest rate was unlawful. The circuit court denied Plaintiff's motion for class certification without holding a hearing. The Supreme Court reversed, holding that the circuit court abused its discretion in refusing to certify the class based on the record before it. View "Rivera-Ceren v. Presidential Limousine & Auto Sales, Inc." on Justia Law
Standard Petroleum Co. v. Faugno Acquisition, LLC
In this consolidated action, the Supreme Court held that the trial court did not abuse its discretion in ordering class certification.Plaintiffs, service station operators and franchised dealers for gasoline products supplied by Defendant, a wholesale supplier, commenced this putative class action alleging that the proposed class members had been overcharged. Defendant then commenced a separate action against one of the plaintiffs. In response, that plaintiff filed a counterclaim styled as a proposed class action that mirrored Plaintiffs’ complaint in the earlier action. The trial court solicited the two actions and then allowed the action to proceed as a class action. Defendant appealed from the orders certifying the class. The Supreme Court affirmed, holding that the trial court did not abuse its discretion in ordering class certification. View "Standard Petroleum Co. v. Faugno Acquisition, LLC" on Justia Law
Ortiz v. Ferrellgas Partners, L.P.
Defendants are the nation’s largest distributors of pre-filled propane exchange tanks, which come in a standard size. Before 2008, Defendants filled the tanks with 17 pounds of propane. In 2008, due to rising prices, Defendants reduced the amount in each tato 15 pounds, maintaining the same price. Plaintiffs, indirect purchasers, who bought tanks from retailers, claimed this effectively raised the price. In 2009, plaintiffs filed a class action alleging conspiracy under the Sherman Act. Plaintiffs settled with both Defendants. In 2014, the Federal Trade Commission issued a complaint against Defendants, which settled in 2015 by consent orders, for conspiring to artificially inflate tank prices. In 2014, another group of indirect purchasers (Ortiz) brought a class action against Defendants, alleging: “Despite their settlements, Defendants continued to conspire, and ... maintained their illegally agreed-upon fill levels, preserving the unlawfully inflated prices." The Ortiz suit became part of a multidistrict proceeding that included similar allegations by direct purchasers (who bought tanks directly from Defendants for resale). The Eighth Circuit reversed the dismissal of the direct-purchaser suit as time-barred, holding that each sale in a price-fixing conspiracy starts the statutory period running again. The court subsequently held that the indirect purchasers inadequately pled an injury-in-fact and lack standing to pursue an injunction to increase the fill levels of the tanks and may not seek disgorgement of profits. View "Ortiz v. Ferrellgas Partners, L.P." on Justia Law
Lewis v. Safeway
Subject to exceptions, the Song-Beverly Credit Card Act of 1971 (Civ. Code, 1747) generally prohibits a retailer from requesting and recording a customer’s “personal identification information” when the customer is purchasing goods or services with a credit card. Lewis filed a putative class action against Safeway, alleging violation of the Act when Safeway’s clerk requested and recorded Lewis’s date of birth in Safeway’s cash register system when he purchased an alcoholic beverage with a credit card. The trial court held that Safeway’s conduct was exempted by the obligation-imposed-by-law exception. The court of appeal agreed. To satisfy its obligations under the Alcoholic Beverage Control Act, a licensee is obligated to verify the age of a customer purchasing an alcoholic beverage (Bus. & Prof Code, 25658(a), 25659), to keep records of its sales of alcoholic beverages, and to make those records available to the Department of Alcoholic Beverage Control. View "Lewis v. Safeway" on Justia Law
Rahman v. Kid Brands, Inc.
Rahman filed a securities class action against KB, an importer of infant furniture and products, and individuals, alleging violation of Section 10(b) of the Securities Exchange Act and SEC Rule 10b-5 and (2) and Section 20(a) of the Exchange Act. The complaint alleged that defendants misled investors by artificially inflating KB’s stock price by issuing deceptive public financial reports and press releases dealing with compliance with customs laws and overall financial performance. A second amended complaint specified failure to disclose product recalls, safety violations, and illegal staffing practices. The district court dismissed for failure to satisfy the heightened scienter pleading standard required by the Private Securities Litigation Reform Act, 15 U.S.C. 78u-4(b)(2). The Third Circuit affirmed. View "Rahman v. Kid Brands, Inc." on Justia Law
Hayes v. WalMart Stores Inc
Sam’s Club is a members-only retail warehouse that features a section for clearance items, called “as-is” items. Items may be designated “as-is” for various reasons and may be damaged or undamaged. Every as-is item is marked with an orange sticker; when a cashier scans the item, the original price appears and the cashier must perform a manual override. The software records the fact that a price override was performed, but does not include the reason. Overrides can occur for reasons other than “as-is” designation. Sam’s contracted with NEW to sell extended warranties for items sold in the store. NEW will not cover some “as is” products, including some purchased by Hayes. On each occasion, Sam’s employees offered and Hayes purchased a NEW warranty. The store provided Hayes with a manual and remote missing from a television he purchased and offered to refund the warranty price. Hayes declined. Hayes sued, on behalf of himself and all other persons who purchased a warranty for an as-is product from Clubs in New Jersey since 2004, asserting violation of the state Consumer Fraud Act, breach of contract, and unjust enrichment. The trial court certified a Rule 23(b)(3) class. The Third Circuit vacated and remanded for consideration of Rule 23’s class definition, ascertainability, and numerosity requirements in light of a recent decision. View "Hayes v. WalMart Stores Inc" on Justia Law
In re Sulfuric Acid Antitrust Litigation
The class consists of chemical companies that purchase sulfuric acid as one of the inputs into their production of chemicals. The defendants own smelters that process nonferrous minerals such as nickel and copper. They also produce sulfuric acid and sell or sold it to the members of the class. The class was certified, but the suit, alleging violation of the Sherman Act, 15 U.S.C. 1, was dismissed on the merits. The district judge ruled that the case could not go to trial on a theory of per se liability. The plaintiffs could have gone to trial on a theory of liability under the rule of reason, but chose to appeal the dismissal. The Seventh Circuit affirmed, rejecting an argument based on how the defendants organized their operations. The court stated that: “ If there were no joint venture, there would still be no per se violation for there would still be the legitimate business reasons for the defendants to have cooperated.” View "In re Sulfuric Acid Antitrust Litigation" on Justia Law
Marcus v. BMW of N. Am., LLC
In 2007, Marcus leased a 2007 BMW from a dealership in New Jersey. Marcus suffered four “flat” tires during his three-year lease. Each time, he drove his car to a BMW dealership in New York and had the tire replaced. BMW billed Marcus between $350 to $390 for parts, labor, fees, and taxes. In each instance, the run-flat tires (RFT) worked as intended. Marcus sued Bridgestone, asserting consumer fraud, breach of warranty, and breach of contract claims. He claims that Bridgestone RFTs are “defective” because they: are highly susceptible to flats, punctures and bubbles, and fail at a significantly higher rate than radial tires or other run-flat tires; cannot be repaired, only replaced, in the event of a small puncture; and are “exorbitantly priced.” He claimed RFT-equipped BMWs cannot be retrofitted to operate with conventional tires, and that they are difficult to replace. The district court certified the suit under FRCP 23(b)(3) as an opt-out class action on behalf of all purchasers and lessees of certain model-year BMWs equipped with Bridgestone RFTs sold or leased in New Jersey with tires that have gone flat and been replaced. The Third Circuit vacated. Marcus’s claims do not satisfy the numerosity and predominance requirements. View "Marcus v. BMW of N. Am., LLC" on Justia Law
Rashaw v. United Consumers Credit Union
Four named plaintiffs filed three separate class action lawsuits in state court alleging, inter alia, that three Missouri credit unions, by participating in a subprime motor vehicle lending and investment program administered by now-bankrupt Centrix Financial, LLC, violated provisions of the Missouri Uniform Commercial Code (Mo UCC) and the Missouri Merchandising Practices Act (MMPA). Defendants removed under the Class Action Fairness Act and moved to dismiss the complaints. The district court issued three identical orders dismissing all the state law claims. The Eighth Circuit Court of Appeals consolidated the three appeals and affirmed, holding that plaintiffs' Mo UCC claims were time-barred and that the MMPA expressly exempted Missouri credit unions. View "Rashaw v. United Consumers Credit Union" on Justia Law