Justia Class Action Opinion Summaries

Defendants manufacture vitamins and nutritional supplements, including glucosamine pills, designed to help people with joint disorders, such as osteoarthritis. Several class action suits were filed under the Class Action Fairness Act, 28 U.S.C. 1332(d)(2), claiming violations of states’ consumer protection laws by making false claims. Eight months later, class counsel negotiated a nationwide settlement that was approved with significant modifications. The settlement requires Rexall to pay $1.93 million in fees to class counsel, plus $179,676 in expenses, $1.5 million in notice and administration costs, $1.13 million to the Orthopedic Research and Education Foundation, $865,284 to the 30,245 class members who submitted claims, and $30,000 to the six named plaintiffs ($5,000 apiece) Class members, led by the Center for Class Action Fairness, objected. The Seventh Circuit reversed, characterizing the settlement as “a selfish deal between class counsel and the defendant.” While most consumers of glucosamine pills are elderly and bought the product in containers with labels that recite the misrepresentations, only one-fourth of one percent of them will receive even modest compensation; for a limited period the labels will be changed, in trivial respects. The court questioned: “for conferring these meager benefits class counsel should receive almost $2 million?” View "Pearson v. NBTY, Inc." on Justia Law

Plaintiffs Brett Woods and Kathleen Valdes were state employees and representatives of a class of New Mexico state and local government employees who alleged they paid for insurance coverage through payroll deductions and premiums pursuant to a policy issued by Standard Insurance Company (Standard), but did not receive the coverage for which they paid and, in some cases, were denied coverage entirely. Plaintiffs filed suit in New Mexico state court against three defendants: Standard, an Oregon company that agreed to provide the subject insurance coverage; the Risk Management Division of the New Mexico General Services Department (the Division), the state agency that contracted with Standard and was responsible for administering benefits under the policy; and Standard employee Martha Quintana, who Plaintiffs allege was responsible for managing the Division’s account with Standard and for providing account management and customer service to the Division and state employees. Plaintiffs' ninety-one-paragraph complaint, stated causes of action against Standard and the Division for breach of contract and unjust enrichment; against Standard for breach of fiduciary duty, breach of the implied duty of good faith and fair dealing, and Unfair Practices Act violations; and against Standard and Ms. Quintana for breach of the New Mexico Trade Practices and Fraud Act. The issue this appeal presented for the Tenth Circuit's review centered on whether remand to the state court pursuant to the Class Action Fairness Act (CAFA) was required under either of two CAFA provisions: the state action provision, which excludes from federal jurisdiction cases in which the primary defendants are states; or the local controversy exception, which requires federal courts to decline jurisdiction where, among other things, there is a local defendant whose alleged conduct forms a significant basis for the claims asserted by plaintiffs and from whom plaintiffs seek significant relief. The Court concluded that neither provision provided a basis for remand, and therefore reversed the decision of the magistrate judge remanding the case to state court. But because the Tenth Circuit could not determine whether Defendants have established the amount in controversy required to confer federal jurisdiction, the case was remanded to the district court for the resolution of that issue. View "Woods v. Standard Insurance Co." on Justia Law

IntelliGender sold and advertised the IntelliGender Prediction Test as an accurate predictor of a fetus's gender using the mother's urine sample. The district court approved a Class Action Fairness Act (CAFA), 28 U.S.C. 1332(d), settlement between a nationwide certified class of purchasers of the Test and IntelliGender. The State subsequently filed an enforcement action against IntelliGender under the State's Unfair Competition and False Advertising Laws, largely based on the same claims as the class action. The court concluded that the district court correctly denied IntelliGender's motion to enjoin the State's enforcement action in its entirety where IntelliGender had not met its burden of showing that the CAFA class action settlement could bind the State in its sovereign capacity, where it asserted both public and private interests. The court agreed that a CAFA class action settlement, though approved by the district court, does not act as res judicata against the State in its sovereign capacity, even though many of the same claims are included in both actions. Because the State action is brought on behalf of the people, it implicates the public's interests as well as private interests, and therefore the remedial provisions sweep much more broadly. The court concluded, however, that the State is precluded from seeking the same relief sought in the CAFA class action where IntelliGender provided notice to the appropriate parties of the class action and the State chose not to participate. Therefore, the district court erred in denying IntelliGender's motion to enjoin the State's claims for restitution. Accordingly, the court affirmed in part and reversed in part. View "State of California v. IntelliGender" on Justia Law

In 2006, several borrowers sued their lender, CashCall, Inc., alleging CashCall monitored their telephone conversations without their knowledge or consent. Over CashCall's objections, the trial court certified a class on one of the claims, an alleged violation of Penal Code section 632, which imposes liability on a "person" who intentionally "eavesdrops upon or records [a] confidential communication" and engages in this conduct "without the consent of all parties." After class certification, CashCall successfully moved for summary adjudication on the section 632 claim. The trial court found as a matter of law a corporation does not violate the statute when one of its supervisory employees secretly monitors a conversation between a customer and another corporate employee, reasoning that two employees are a single "person" within the meaning of the statute. The Court of Appeal reversed, holding that the statute applies even if the unannounced listener is employed by the same corporate entity as the known recipient of the conversation, concluding the trial court's statutory interpretation was inconsistent with section 632's language and purpose. The Court also rejected CashCall's alternative argument that summary adjudication was proper because the undisputed facts established the telephone conversations were not "confidential communication[s]." On remand, CashCall moved to decertify the class on grounds that the issue whether any particular class member could satisfy a reasonable-expectation test (as the Court discussed in its earlier opinion) required an assessment of numerous individual factors (including those identified in the earlier opinion) and these individual issues predominate over any remaining common issues, making a continued class action unmanageable. Plaintiffs opposed the motion, arguing CashCall did not meet its burden to establish changed circumstances necessary for class decertification and, alternatively, common issues continued to predominate in the case. The court granted the decertification motion. Plaintiffs appealed the decertification, but finding no error in that decision, the Court of Appeal affirmed. View "Kight v. CashCall" on Justia Law

The Louisiana Supreme Court granted this writ application to determine whether a plaintiff had a private right of action for damages against a health care provider under the Health Care and Consumer Billing and Disclosure Protection Act. Plaintiff Yana Anderson alleged that she was injured in an automobile accident caused by a third party. She received medical treatment at an Ochsner facility. Anderson was insured by UnitedHealthcare. Pursuant to her insurance contract, Anderson paid premiums to UnitedHealthcare in exchange for discounted health care rates. These reduced rates were available pursuant to a member provider agreement, wherein UnitedHealthcare contracted with Ochsner to secure discounted charges for its insureds. Anderson presented proof of insurance to Ochsner in order for her claims to be submitted to UnitedHealthcare for payment on the agreed upon reduced rate. However, Ochsner refused to file a claim with her insurer. Instead, Ochsner sent a letter to Anderson’s attorney, asserting a medical lien for the full amount of undiscounted charges on any tort recovery Anderson received for the underlying automobile accident. Anderson filed a putative class action against Ochsner, seeking, among other things, damages arising from Ochsner’s billing practices. Upon review of the matter, the Supreme Court found the legislature intended to allow a private right of action under the statute. Additionally, the Court found an express right of action was available under La. R.S. 22:1874(B) based on the assertion of a medical lien. View "Anderson v. Ochsner Health System" on Justia Law

A 2006 class action against Pella, a window manufacturer, alleged that certain windows had a design defect that allowed water to enter behind exterior aluminum cladding and damage the wooden frame and the house itself. The district judge certified a class for customers who had already replaced or repaired their windows, seeking damages and limited to six states, and another for those who had not, seeking only declaratory relief nationwide. Initially, there was one named plaintiff, Saltzman. His son-in-law, Weiss, was lead class counsel. Weiss is under investigation for multiple improprieties. The Seventh Circuit upheld the certifications. Class counsel negotiated a settlement in 2011 that directed Pella to pay $11 million in attorneys’ fees based on an assertion that the settlement was worth $90 million to the class. In 2013, before the deadline for filing claims, the district judge approved the settlement, which purports to bind a single nation-wide class of all owners of defective windows, whether or not they have replaced or repaired the windows. The agreement gave lead class counsel “sole discretion” to allocate attorneys’ fees; Weiss proposed to allocate 73 percent to his own firm. Weiss removed four original class representatives who opposed the settlement; their replacements joined Saltzman in supporting it. Named plaintiffs were each compensated $5,000 or $10,000 for their services, if they supported the settlement. Saltzman, as lead class representative, was to receive $10,000. The Seventh Circuit reversed, reversed, referring to “eight largely wasted years,” the need to remove Saltzman, Weiss, and Weiss’s firm as class representative and as class counsel, and to reinstate the four named plaintiffs.View "Riva v. Pella Corp." on Justia Law

The flea-and-tick “spot-on products” at issue claim that their active ingredient works by topical application to a pet’s skin rather than through the pet’s bloodstream. According to the manufacturers, after the product is applied to one area, it disperses over the rest of the pet’s body within one day because it collects in the oil glands and natural oils spread the product over the surface of the pet’s skin and “wick” the product over the hair. The plaintiffs alleged false advertising based on statements that the products are self-dispersing and cover the entire surface of the pet’s body when applied in a single spot; that they are effective for one month and require monthly applications to continue to work; that they do not enter the bloodstream; and that they are waterproof and effective after shampooing, swimming, and exposure to rain or sunlight. The district court repeatedly referred to a one-issue case: whether the product covers the pet’s entire body with a single application. The case management order stated that the manufacturers would bear the initial burden to produce studies that substantiated their claims; the plaintiffs would then have to refute the studies, “or these cases will be dismissed.” The manufacturers objected. The plaintiffs argued that the plan would save time, effort, and money. The manufacturers submitted studies. The plaintiffs’ response included information provided by one plaintiff and his adolescent son and an independent examination of whether translocation occurred that detected the product’s active ingredient in a dog’s bloodstream. The district court concluded that the manufacturers’ studies substantiated their claims and denied all of plaintiffs’ discovery requests, except a request for consumer complaints, then granted the manufacturers summary judgment. The Sixth Circuit affirmed. The doctrines of waiver and invited error precluded challenges to the case management plan.View "Simms v. Bayer Healthcare, LLC" on Justia Law

Plaintiffs filed a purported class action against Charter in Missouri state court, alleging that Charter violated the Missouri Merchandising Practices Act (MMPA), Mo. Rev. Stat. 407.10 et seq., and breached its contract with the class members. Plaintiffs alleged that Charter had provided the class members with Internet modems that were incapable of operating at the speed that Charter had promised. Charter removed to federal court. The court concluded that Charter met its burden of showing that the amount in controversy exceeded the Class Action Fairness Act of 2005's (CAFA), 28 U.S.C. 1332(d), $5 million jurisdictional threshold. The court also concluded that, under Missouri law, plaintiffs failed to allege facts to support pecuniary loss. Accordingly, the court affirmed the district court's dismissal of the complaint.View "Grawitch, et al. v. Charter Communication" on Justia Law

Plaintiffs filed a putative class action against MERS in state court asserting claims related to MERS's facilitation of the provision of "Esign" mortgages to consumer-borrowers. MERS appealed the district court's grant of a motion to remand to New York state court on the ground that MERS's notice of removal was untimely. The court reversed and held that, in Class Action Fairness Act (CAFA) cases, the 30-day removal periods of 28 U.S.C. 1446(b)(1) and (b)(3) are not triggered until the plaintiff serves the defendant with an initial pleading or other paper that explicitly specifies the amount of monetary damages sought or sets forth facts from which an amount in controversy in excess of $5,000,000 can be ascertained. The court also held that where a plaintiff's papers failed to trigger the removal clocks of sections 1446(b)(1) and (b)(3), a defendant may remove a case when, upon its own independent investigation, it determines that the case is removable. Therefore, the 30-day removal periods of sections 1446(b)(1) and (b)(3) are not the exclusive authorizations for removal in CAFA cases. In this instance, plaintiffs never served MERS with a complaint or subsequent document explicitly stating the amount in controversy or providing MERS with sufficient information to conclude the threshold amount in controversy was satisfied. Therefore, the removal clocks of section 1446(b)(1) and (b)(3) did not commence. After MERS determined upon its independent investigation that section 1332(d) conveyed CAFA federal jurisdiction because the amount in controversy, number of plaintiffs, and minimal diversity requirements were satisfied, it properly removed the case by alleging facts adequate to establish the amount in controversy in its notice of removal. Accordingly, the court vacated and remanded.View "Cutrone v. Mortgage Electronic Registration Systems, Inc." on Justia Law

A class action complaint, filed in state court, alleged that Pushpin acted as an unlicensed debt collector in violation of the Illinois Consumer Fraud Act and filed 1100 Illinois small‐claims suits, all fraudulent, but that the class (defendants in those suits) sought “no more than $1,100,000.00 in compensatory damages and $2,000,000.00 in punitive damages,” and would ‘incur attorneys’ fees of no more than $400,000.00,” below the $5 million threshold for removal of a state‐court class action to a federal district court under the Class Action Fairness Act. Pushpin removed the case to federal court under the Act, 28 U.S.C. 1453(b), but the district court remanded to state court. The Seventh Circuit reversed, reasoning that the plaintiff did not irrevocably commit to obtaining less than $5 million for the class, and Pushpin’s estimate that the damages recoverable by the class could equal or exceed that amount may be reliable enough to preclude remanding the case to the state court. The lower court’s reasoning that most of the claims were barred by the Rooker‐Feldman rule was a mistake as was a statement that “there is a strong presumption in favor of remand” when a case has been removed under the Class Action Fairness Act. View "Pushpin Holdings, LLC v. Johnson" on Justia Law