Articles Posted in U.S. 9th Circuit Court of Appeals

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Plaintiff filed suit in California state court under the California Labor Code Private Attorneys General Act of 2004 (PAGA), Cal. Lab. Code 2698-2699.5, and then removed to district court. The issue presented on appeal was whether the district court had subject matter jurisdiction over the removed action. In Urbino v. Orkin Services, the court held that potential PAGA penalties against an employer may not be aggregated to meet the minimum amount in controversy requirement of 28 U.S.C. 1332(a). The remaining issue was whether a district court may instead exercise original jurisdiction over a PAGA action under the Class Action Fairness Act of 2005 (CAFA), 28 U.S.C. 1332(d), 1453, 1711-15. The court held that PAGA was not sufficiently similar to Rule 23 to establish the original jurisdiction of a federal court under CAFA. Accordingly, the district court could not exercise jurisdiction over this removed PAGA action under CAFA. And because, in light of Urbino, there was no federal subject matter jurisdiction under section 1332(a), plaintiff's motion to remand should have been granted. The court reversed and remanded with instructions to grant the motion. View "Baumann v. Chase Investment Services" on Justia Law

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Plaintiffs filed suit against Michaels on behalf of California store managers, alleging that Michaels had improperly classified the managers as exempt from overtime. After Michaels removed the case to federal district court under the Class Action Fairness Act (CAFA), 28 U.S.C. 1453, the district court remanded back to state court. The district court concluded that the amount-in-controversy requirement was not met because plaintiffs expressly disclaimed any recovery for the class over $4,999,999.99. In Standard Fire Insurance Co. v. Knowles, the Supreme Court held that attempted damages waivers, such as plaintiffs', were ineffective, and would not defeat removal under CAFA. Michaels then removed the case again under CAFA and the district court remanded on the basis that the removal ran afoul of CAFA's 30-day time limit. In the alternative, the district court held that Michaels failed to carry its burden to demonstrate that the amount-in-controversy exceeded $5,000,000. The court concluded that the case was not moot; because the two thirty-day removal periods were nonexclusive, Michael's second CAFA removal was timely; and the district court's finding that defendant failed to prove that the amount-in-controversey requirement was met was clearly erroneous under the preponderance of the evidence standard. Accordingly, the court reversed and remanded. View "Rea v. Michaels Stores" on Justia Law

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Plaintiff filed a putative class action suit against Home Depot alleging violations of California's Unfair Competition Law, Cal. Bus. & Prof. Code 17200; the California Consumer Legal Remedies Act, Cal. Civ. Code 1770; and common-law theories of unjust enrichment and money had and received. Plaintiff alleged that Home Depot automatically imposed a ten percent surcharge for a damage waiver on tool rentals in California stores, and although that fee was to be optional, Home Depot failed to inform customers of their ability to decline the surcharge. The court concluded that it had jurisdiction over the appeal despite plaintiff's stipulation on dismissal after the negative class action ruling. The court also concluded that the district court did not abuse its discretion in denying class certification because the record did not show that the requirements of Rule 12(b)(3) were satisfied where common questions did not predominate over individual issues in any of plaintiff's claims. Accordingly, the court affirmed the district court's denial of class certification. View "Berger v. Home Depot" on Justia Law

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Capital One appealed the district court's order remanding a putative class action lawsuit to California state court under the Class Action Fairness Act of 2005 (CAFA), Pub. L. No. 109-2, 119 Stat. 4. The court concluded that there must ordinarily be facts in evidence to support a finding that two-thirds of putative class members were local state citizens, which was one of the local controversy exception's requirements, if that question was disputed before the district court. A pure inference regarding the citizenship of prospective class members may be sufficient if the class is defined as limited to citizens of the state in question, but otherwise such a finding should not be based on guesswork. Accordingly, the court vacated and remanded for further proceedings. View "Mondragon v. Capital One Auto Finance, et al." on Justia Law

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Plaintiff filed suit against Ralphs alleging violations of the California Labor Code and California Business and Professions Code 17200 et seq. On appeal, Ralphs challenged the district court's denial of its motion to compel arbitration. The court concluded that Ralphs' arbitration policy was unconscionable under California law. The court concluded that Ralphs' arbitration was procedurally unconscionable where, among other things, agreeing to Ralphs' policy was a condition of applying for employment and the terms were not disclosed to plaintiff until three weeks after she had agreed to be bound by it. In regards to substantive unconscionability, the court concluded, among other things, that Ralphs' terms required that the arbitrator impose significant costs on the employee up front, regardless of the merits of the employee's claims, and severely limited the authority of the arbitrator to allocate arbitration costs in the award. Further, the state law supporting such a conclusion was not preempted by the Federal Arbitration Act, 9 U.S.C. 2. Accordingly, the court affirmed and remanded for further proceedings. View "Chavarria v. Ralphs" on Justia Law

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Plaintiffs filed a putative class action suit on behalf of current and former students, alleging that Corinthian engaged in a deceptive scheme to entice the enrollment of prospective students in violation of California law. Corinthian moved to compel arbitration pursuant to arbitration clauses in plaintiffs' enrollment agreements. The court concluded that the Broughton-Cruz rule, which exempted claims for "public injunctive relief" from arbitration, was preempted by the Federal Arbitration Act (FAA), 9 U.S.C. 2. In the alternative, the court concluded that plaintiffs' claims were within the scope of their arbitration agreements and plaintiffs were required to arbitrate their public injunction claims. Accordingly, the court reversed the district court's order denying Corinthian's motion to compel arbitration and remanded. View "Ferguson, et al. v. Corinthian Colleges, Inc., et al." on Justia Law

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137 named plaintiffs filed suit against 25 financial institutions alleging, among other things, that the institutions' deceptive mortgage lending and securitization practices decreased the value of their homes, impaired their credit scores, and compromised their privacy. The court concluded that the action was properly removed from state court to federal court because more than 100 named plaintiffs proposed a joint trial and because the other prerequisites of the Class Action Fairness Act of 2005 (CAFA), Pub. L. No. 109-2, 119 Stat. 4, were satisfied. However, the court reversed and remanded to the district court to dismiss without prejudice the claims of all plaintiffs but the first named plaintiff because, under Federal Rule of Civil Procedure 20(a), the First Amended Complaint did not present common questions of law. View "Visendi v. Bank of America" on Justia Law

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Plaintiffs filed a class action on behalf of themselves and other similarly situated, alleging that USSA committed numerous violations of California labor laws, including, inter alia, requiring them to work through their meal periods. On appeal, USSA challenged the district court's certification of the meal break sub-class on the grounds that plaintiffs have not established "commonality," as required under Federal Rule of Civil Procedure 23(a)(2), or "predominance," as required under Rule 23(b)(3). The court concluded that plaintiffs' claims would yield a common answer that was "apt to drive the resolution of the litigation," as required by Rule 12(b)(3). The court agreed with the district court that the "nature of the work" inquiry would be a common one, focused on the legality of a single-guard staffing model, rather than a site-by-site inquiry; concluded that common issues of law or fact would predominate; and the district court did not abuse its discretion in concluding that Rule 12(b)(3) was satisfied where plaintiffs' claims "will prevail or fail in unison" as required by the rule. Accordingly, the court affirmed the judgment of the district court. View "Abdullah v. U.S. Security Associates, Inc." on Justia Law

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Plaintiff filed suit against Apple alleging federal and state antitrust claims. Plaintiff alleged that Apple encoded iTS music files with its proprietary Digital Rights Management (DRM), called FairPlay, which rendered iTS music and the iPod compatible only with each other. Plaintiff also alleged claims that through certain software updates, Apple excluded competitors and obtained a monopoly in the portable digital media player (PDMP) and music download markets, which inflated Apple's music prices and deflated the value of the iPod. On appeal, plaintiff challenged the district court's July 2009 order denying her motion to certify a class of indirect purchasers of the iPod under Rule 23(b)(3). The court concluded that, because plaintiff abandoned the individual claim for which she sought class certification, the issue of whether the district court erred in denying her motion to certify that claim for class treatment was waived. The court also concluded that the district court properly dismissed plaintiff's monopolization claim for damages based on the theory of diminution in iPod value on the ground that it was barred by Illinois Brick Co. v. Illinois; properly dismissed plaintiff's claim for damages based on supracompetitive music prices; and properly dismissed plaintiff's claims for injunctive relief where plaintiff's alleged inability to play her music freely was not an "antitrust injury" that affected competition and could, therefore, not serve as the basis for injunctive relief. Accordingly, the court affirmed the district court's denial of class certification and dismissal of plaintiff's complaint with prejudice. View "Somers v. Apple, Inc." on Justia Law

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Defendant removed plaintiff's putative class action to federal court, contending that there was federal jurisdiction over the action under the Class Action Fairness Act of 2005 (CAFA), Pub. L. No. 109-2, 119 Stat. 4, and 28 U.S.C. 1332(d)(2). Plaintiff alleged that the amount in controversy did not exceed $5 million and waived any claim by the class in excess of the amount. The district court granted plaintiff's motion to remand based on plaintiff's waiver. The court held that a lead plaintiff of a putative class could not reduce the amount in controversy on behalf of absent class members, so there was no justification for assigning to the allegation weight so significant that it affected a defendant's right to a federal forum under section 1332(d)(2). The court also held that the legal certainty standard in Lowdermilk v. U.S. Bank National Association had been effectively overruled and that the proper burden of proof imposed upon a defendant to establish the amount in controversy was the preponderance of the evidence standard pursuant to Standard Fire Ins. Co. v. Knowles. Accordingly, the court vacated and remanded to the district court to apply the preponderance standard to the amount-in-controversy evidence. View " Rodriguez v. AT&T Mobility Services LLC" on Justia Law