Justia Class Action Opinion Summaries

Articles Posted in US Court of Appeals for the Fifth Circuit
by
Joseph Work, a former employee of Intertek, filed a collective action against the company for unpaid overtime, liquidated damages, attorneys’ fees, and relief for the collective class. Intertek objected to the judicial forum and requested arbitration. The dispute centered on whether the agreed-upon Arbitration Agreement provided for individual or class arbitration. Work sought class arbitration, while Intertek sought individual arbitration. Intertek filed a Motion to Compel Individual Arbitration, arguing that the Arbitration Agreement did not contain an express delegation clause and was silent on class arbitration.The United States District Court for the Southern District of Texas ruled that the issue of class arbitrability was delegated to the arbitrator. The court held that the Arbitration Agreement incorporated certain JAMS Rules by reference, which delegate questions of arbitrability to the arbitrator, including the question of class arbitrability. The district court granted Work’s motion to dismiss and denied Intertek’s motion to compel individual arbitration.On appeal to the United States Court of Appeals for the Fifth Circuit, Intertek argued that consent to class arbitration was absent and that the language in the Arbitration Agreement was not clear. The court rejected both arguments, affirming the district court's decision. The court held that the Arbitration Agreement was not ambiguous and that it clearly incorporated the JAMS Rules by reference. The court concluded that the language in the Arbitration Agreement was "clear and unmistakable" in its incorporation of the JAMS Rules, which provide that the arbitrator decides the question of arbitrability. View "Work v. Intertek" on Justia Law

by
The case revolves around a data privacy dispute involving Pebbles Martin and LCMC Health Holdings and Louisiana Children’s Medical Center (collectively, “LCMC”). Martin filed a class action suit alleging that LCMC violated Louisiana law by embedding tracking pixels onto its website that shared her private health information with third-party websites. The question before the court was not to determine the merits of Martin’s claims, but instead to determine which forum—state or federal—is proper to hear this dispute. LCMC argued that the suit should proceed in federal court because it acted under the direction of a federal officer when it allegedly violated Louisiana law. Martin, however, argued that the suit should remain in state court because LCMC fails to show a basis for federal jurisdiction.LCMC had removed the case to federal court, invoking the federal officer removal statute as the basis for jurisdiction. Martin moved to remand to state court, and the district court granted Martin’s motion, holding that LCMC did not act under the direction of a federal officer when it disclosed private health information to third-party websites. LCMC appealed the remand order.The United States Court of Appeals for the Fifth Circuit affirmed the district court's decision. The court concluded that LCMC did not act under the direction of a federal officer when it embedded tracking pixels onto its website. The court noted that a hospital does not act under the direction of the federal government when it maintains an online patient portal that utilizes tracking pixels. Therefore, the federal officer removal statute does not provide jurisdiction for this case to be heard in federal court. The court affirmed the district court’s order remanding this case to state court. View "Martin v. LCMC Health Holdings" on Justia Law

by
A class of stock purchasers alleged that Anadarko Petroleum Corporation fraudulently misrepresented the potential value of its Shenandoah oil field project in the Gulf of Mexico, violating federal securities law. The plaintiffs claimed that a decline in Anadarko’s stock price resulted from the company's disclosure that the Shenandoah project was dry and that Anadarko was taking a significant write-off for the project. The plaintiffs invoked the Basic presumption, a legal principle that allows courts to presume an investor's reliance on any public material misrepresentations if certain requirements are met.The District Court for the Southern District of Texas certified the class, relying on new evidence presented by the plaintiffs in their reply brief. Anadarko argued that it was not given a fair opportunity to respond to this new evidence and appealed the decision.The United States Court of Appeals for the Fifth Circuit agreed with Anadarko, stating that the district court should have allowed a sur-reply when the plaintiffs presented new evidence in their reply brief. The court held that when a party raises new arguments or evidence for the first time in a reply, the district court must either give the other party an opportunity to respond or decline to rely on the new arguments and evidence. The court also agreed that the district court failed to perform a full Daubert analysis, a standard for admitting expert scientific testimony. The court vacated the class certification order and remanded the case for further proceedings. View "Georgia Firefighters' Pension Fund v. Anadarko Petroleum Corp." on Justia Law

by
The case involves a group of 214 plaintiffs who filed a lawsuit against Devon Energy Production Company, L.P. in a Texas state court, alleging that Devon had underpaid them over $100 million in oil-and-gas royalties. Devon, a citizen of Oklahoma, removed the case to federal court under the Class Action Fairness Act (CAFA). The plaintiffs sought to have the case remanded to the state court based on CAFA’s “local controversy” exception. The district court agreed and ordered the case to be remanded.On appeal, the United States Court of Appeals for the Fifth Circuit disagreed with the district court's interpretation of the statute. The appellate court found that not all plaintiffs had incurred their "principal injuries" (financial harm from Devon's alleged underpayment of royalties) in Texas, as required under the "local controversy" exception of CAFA.Accordingly, the appellate court vacated the district court's judgment remanding the case to state court and directed that the case be reinstated on the district court's docket. This ruling signifies that the case will proceed in federal court, not state court. The court's ruling also clarified an important aspect of the CAFA's "local controversy" exception, specifically that all plaintiffs must have incurred their "principal injuries" in the state where the action was originally filed for the exception to apply. View "Cheapside Minerals v. Devon Energy" on Justia Law

by
The United States Court of Appeals for the Fifth Circuit reviewed a case involving the Cenikor Foundation, a nonprofit drug rehabilitation center. The foundation had been sued by a group of its rehabilitation patients for alleged violations of the Fair Labor Standards Act (FLSA). The patients contended that they were effectively employees of the foundation, as they were required to work as part of their treatment program without receiving monetary compensation. The foundation contested the lawsuit and appealed a district court's decision to certify the case as a collective action under the FLSA.The Court of Appeals found that the district court had applied the incorrect legal standard in determining whether the patients were employees under the FLSA. Specifically, the court should have applied a test to determine who was the primary beneficiary of the work relationship, rather than a test typically used to distinguish employees from independent contractors.The appellate court remanded the case back to the district court to apply this primary beneficiary test and to consider the foundation's defense that any benefits provided to the patients offset any requirement to pay them a wage. The court emphasized that the question of whether the foundation's patients were employees under the FLSA was a threshold issue that needed to be resolved before the case could proceed as a collective action. View "Klick v. Cenikor Foundation" on Justia Law

by
Connie Bourque, a Louisiana resident insured by State Farm Mutual Automobile Insurance Co., filed a class-action lawsuit, alleging that State Farm breached its insurance contract and violated its duty of good faith and fair dealing under Louisiana Law. The claim was based on the method State Farm used to calculate the actual cash value (ACV) of vehicles in the event of a total loss. State Farm used the Autosource MarketDriven Valuation, which Bourque alleged provided a valuation less than the true ACV.The United States District Court for the Western District of Louisiana certified a class of all persons insured by State Farm in Louisiana whose vehicle's Autosource valuation was less than the value according to the National Automobile Dealers Association (NADA) Official Used Car Guide. State Farm appealed this decision to the United States Court of Appeals for the Fifth Circuit.The Fifth Circuit, citing a similar case (Sampson v. United Services Automobile Ass’n), held that the district court's class certification was error. The Fifth Circuit noted that to establish a breach of contract under Louisiana law, proof of injury is required—proof that Bourque failed to establish can be made on a class-wide basis. The court also noted that the NADA value was just one of many statutorily acceptable methods for calculating ACV, and therefore pinning ACV to NADA value constituted an impermissibly arbitrary choice of a liability model.As a result, the Fifth Circuit vacated the district court’s grant of class certification and remanded the case for further proceedings. View "Bourque v. State Farm Mtl Auto Ins" on Justia Law

by
Plaintiffs are three Texas residents whose assets escheated to the State under Texas’s Unclaimed Property Act. Plaintiffs brought a class action lawsuit against the Texas Comptroller and a director in the Comptroller’s office, alleging that the State is abusing the Unclaimed Property Act to seize purportedly abandoned property without providing proper notice. The district court dismissed most of Plaintiffs’ claims. Defendants contend that Plaintiffs cannot invoke Ex parte Young because they lack standing to seek prospective relief and have not alleged an ongoing violation of federal law.   The Fifth Circuit agreed with Defendants and reversed the district court’s denial of Eleventh Amendment sovereign immunity, and remanded with instructions to dismiss Plaintiffs’ remaining claims for prospective relief without prejudice. The court explained that Plaintiffs have failed to allege facts indicating that Texas’s alleged abuse of the UPA is ongoing or will continue in the future. As there is no ongoing violation of federal law sufficiently pleaded in the complaint, Plaintiffs have failed to satisfy the Ex parte Young requirements, and their claims for prospective relief are barred by sovereign immunity. View "James v. Hegar" on Justia Law

by
Before Plaintiffs’ cases were distributed to the district court, these cases were part of MDL 2179, the multi-district litigation proceeding before United States District Court Judge Carl J. Barbier in the Eastern District of Louisiana. Judge Barbier established what is known as the “B3 Bundle” within the overall litigation. The B3 Bundle included claims for personal injury and wrongful death due to exposure to oil and/or other chemicals used during the response to the disaster. 85 B3 cases were assigned to District Judge Barry Ashe. Before his confirmation, Judge Ashe he was a longtime partner at the Stone Pigman law firm. A little more than two weeks after Judge Ashe began granting summary judgments following the exclusion of Dr. Cook, Street’s counsel moved to disqualify Judge Ashe in the five cases in which he had excluded Dr. Cook and in other cases where Daubert and summary judgment motions were still pending. Plaintiffs argued that Judge Ashe should have disqualified himself and, in the alternative, that he should have extended the case-management deadlines.   The Fifth Circuit affirmed. If Judge Ashe erred when he failed to recuse in these cases, that error was harmless. Nonetheless, as the arguments on this appeal support, potential conflicts of interest must be taken seriously by every member of the judiciary. The litigants and the public need to be confident in the impartiality of those who will decide legal disputes. View "Lundy v. BP Expl & Prod" on Justia Law

by
These consolidated cases continue the Fifth Circuit’s saga of Deepwater Horizon. Plaintiffs argue the district court judge abused his discretion by failing to disqualify himself at their request. The Street Plaintiffs do not challenge Judge Ashe’s decision to exclude the expert’s testimony under Daubert, nor do they raise any argument on the merits as to why his granting of summary judgment to BP was erroneous. In the briefing before the Fifth Circuit, the two arguments raised were that Judge Ashe should have disqualified himself and, in the alternative, that he should have extended the case-management deadlines. The Street plaintiffs argued that Judge Ashe abused his discretion for not disqualifying himself under 28 U.S.C. Section 455(b)(2) because he was a partner at Stone Pigman when it represented Cameron in the Phase One liability trial.   The Fifth Circuit affirmed. The court explained that the Street Plaintiffs do not challenge the judge’s actual impartiality on appeal. Instead, they rely solely on the “matter in controversy” language found in Section 455(b)(2) and argue that recusal was mandatory. The court explained that even mandatory recusal under Section 455(b)(2) can be harmless. The court wrote that if Judge Ashe erred when he failed to recuse in these cases, that error was harmless. Nonetheless, as the arguments on this appeal support, potential conflicts of interest must be taken seriously by every member of the judiciary. The litigants and the public need to be confident in the impartiality of those who will decide legal disputes. View "Street v. BP Expl & Prod" on Justia Law

by
Defendants United Services Automobile Association and USAA General Indemnity Company (“USAA”) contract with insureds to pay “Actual Cash Value” (“ACV”) for totaled vehicles. USAA calculates ACV using the CCC One Market Valuation Report (“CCC”) rather than, e.g., the National Automobile Dealers Association guidebook (“NADA”) or Kelley Blue Book (“KBB”). Plaintiffs are USAA-insureds whose vehicles were totaled and who received ACV as determined by CCC. Plaintiffs alleged that CCC violates Louisiana statutory law, that they would have been paid more if USAA used NADA, and that they are owed the difference. Plaintiffs sought certification for a class of USAA-insureds who were paid less under CCC, and the district court granted it. USAA appealed class certification. On appeal, the parties dispute, among other things, whether common questions across the class involving damages and liability predominate over individual differences between class members, as required for class certification under Rule 23(b)(3).   The Fifth Circuit vacated and remanded. The court held that Plaintiffs failed to show injury and therefore failed to establish USAA’s liability on a class-wide basis because they failed to demonstrate entitlement to the NADA values for their totaled vehicles. The court held that with respect to Plaintiffs’ breach of contract claim, the district court’s choice of NADA is not simply an arbitrary choice among imperfect damages models. It is an arbitrary choice of a liability model, and a district court’s wide discretion to choose an imperfect estimative-damages model at the certification stage does not carry over from the context of damages to the context of liability. View "United Svcs Automobile v. Sampson" on Justia Law