Justia Class Action Opinion Summaries

Articles Posted in US Court of Appeals for the Ninth Circuit
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United Behavioral Health (“UBH”) appeals from the district court’s judgment finding it liable to classes of Employee Retirement Income Security Act of 1974, 29 U.S.C. Section 1001 et seq. (“ERISA”) Plaintiffs under 29 U.S.C. Sections 1132(a)(1)(B) and (a)(3), as well as several pre- and posttrial orders, including class certification, summary judgment, and a remedies order. UBH contends on appeal that Plaintiffs lack Article III standing and that the district court erred at class certification and trial in several respect.   The Ninth Circuit reversed in part. The panel held that Plaintiffs had Article III standing to bring their claims. Plaintiffs sufficiently alleged a concrete injury as to their fiduciary duty claim because UBH’s alleged violation presented a material risk of harm to plaintiffs’ interest in their contractual benefits. Plaintiffs also alleged a concrete injury as to the denial of benefits claim. Further, plaintiffs alleged a particularized injury as to both claims because UBH’s Level of Care Guidelines and Coverage Determination Guidelines for making medical necessity or coverage determinations materially affected each Plaintiff. And Plaintiffs’ alleged injuries were “fairly traceable” to UBH’s conduct. The panel held that the district court did not err in certifying the three classes to pursue the fiduciary duty claim, but the panel reversed the district court’s certification of the denial of benefits classes. The panel held that, on the merits, the district court erred to the extent it determined that the ERISA plans required the Guidelines to be coextensive with generally accepted standards of care. View "DAVID WIT, ET AL V. UNITED BEHAVIORAL HEALTH" on Justia Law

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Two putative class actions are at issue in these appeals: Nacarino v. Kashi Co., No. 22-15377, and Brown v. Kellogg Co., No. 22-15658. The complaints were filed in the Northern District of California, and they asserted materially identical state-law consumer protection claims for unfair business practices, unjust enrichment, and fraud. Both complaints alleged that the front labels on several of Defendants’ products are “false and misleading” under state and federal law. At issue is whether food product labels that advertise the amount of protein in the products are false or misleading.   The Ninth Circuit affirmed on different grounds the district court’s dismissal of the two complaints. The panel rejected Plaintiffs’ arguments that the protein claims on Defendants’ labels were false because the nitrogen method for calculating protein content overstated the actual amount of protein the products contained. The panel held that FDA regulations specifically allow manufacturers to measure protein quantity using the nitrogen method.   The panel rejected Plaintiffs’ arguments that the protein claims on Defendants’ labels were misleading because the “amount of digestible or usable protein the Products actually deliver to the human body is even lower” than the actual amount of protein the products contain. The panel held that Defendants’ protein claims could be misleading under FDA regulations if they did not accurately state the quantity of protein or if the products did not display the quality-adjusted percent daily value in the Nutritional Facts Panel. However, Plaintiffs’ complaints did not allege that the challenged protein claims were misleading within the meaning of the federal regulations. View "ELENA NACARINO, ET AL V. KASHI COMPANY" on Justia Law

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Plaintiff appealed from the district court’s partial judgment granting a motion to dismiss in favor of Defendant, Reward Zone USA, LLC (Reward Zone), in a putative class action lawsuit brought under the Telephone Consumer Protection Act (TCPA). In Plaintiff’s second cause of action, which is the subject of this opinion, Plaintiff alleged a violation of the TCPA because she received at least three mass marketing text messages from Reward Zone which utilized “prerecorded voices.”   The Ninth Circuit affirmed the district court’s dismissal. The court held the text messages did not use prerecorded voices under the Act because they did not include audible components. The panel relied on the statutory context of the Act and the ordinary meaning of voice, which showed that Congress used the word voice to include only an audible sound, and not a more symbolic definition such as an instrument or medium of expression. The panel addressed Plaintiff’s appeal of the district court’s dismissal of another cause of action under the Telephone Consumer Protection Act in a simultaneously-filed memorandum disposition. View "LUCINE TRIM V. REWARD ZONE USA LLC, ET AL" on Justia Law

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Plaintiffs brought this class action against the Plan’s administrator, AT&T Services, Inc., and the committee responsible for some of the Plan’s investment-related duties, the AT&T Benefit Plan Investment Committee (collectively, “AT&T”). Plaintiffs alleged that AT&T failed to investigate and evaluate all the compensation that the Plan’s recordkeeper, Fidelity Workplace Services, received from mutual funds through BrokerageLink, Fidelity’s brokerage account platform, and from Financial Engines Advisors, L.L.C. Plaintiffs alleged that (1) AT&T’s failure to consider this compensation rendered its contract with Fidelity a “prohibited transaction” under ERISA Section 406, (2) AT&T breached its fiduciary duty of prudence by failing to consider this compensation, and (3) AT&T breached its duty of candor by failing to disclose this compensation to the Department of Labor.   The Ninth Circuit affirmed in part and reversed in part the district court’s summary judgment in favor of Defendants. The panel reversed the district court’s grant of summary judgment on the prohibited transaction claim. Relying on the statutory text, regulatory text, and the Department of Labor’s Employee Benefits Security Administration’s explanation for a regulatory amendment, the panel held that the broad scope of Section 406 encompasses arm’s-length transactions. The panel held that the broad scope of § 406 encompasses arm’s-length transactions. Disagreeing with other circuits, the panel concluded that AT&T, by amending its contract with Fidelity to incorporate the services of BrokerageLink and Financial Engines, caused the Plan to engage in a prohibited transaction. The panel remanded for the district court to consider whether AT&T met the requirements for an exemption from the prohibited transaction bar. View "ROBERT BUGIELSKI, ET AL V. AT&T SERVICES, INC., ET AL" on Justia Law

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Plaintiff sued Defendant PeopleConnect, Inc., alleging that it violated his right of publicity by using his photo on its website, Classmates.com. PeopleConnect responded by seeking two forms of relief. First, it sought to compel Plaintiff to arbitrate his claims under section 4 of the Federal Arbitration Act (FAA). Second, it sought to dismiss Plaintiff’s complaint, arguing in relevant part that it was entitled to section 230 immunity under the Communications Decency Act. In a 26-page document labeled a single “order,” the district court denied both requests for relief. PeopleConnect filed an interlocutory appeal, attempting to challenge both denials by relying on the FAA as the basis for interlocutory appellate jurisdiction.   The Ninth Circuit dismissed in part, vacated in part, and remanded. The panel determined that it had jurisdiction to review the district court’s order denying the motion to compel arbitration. The panel held that two orders do not become one “order” for the purposes of § 16(a) solely by virtue of the fact that they appear in the same document. Notwithstanding its label as a single “order,” the document clearly contained multiple orders. Because Section 16(a) grants jurisdiction to review only an order denying a motion to compel arbitration, and because the district court’s denial of the motion to dismiss was not part of such an order, the panel lacked jurisdiction to review it. View "JOHN BOSHEARS V. PEOPLECONNECT, INC." on Justia Law

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Plaintiffs’ lawyers filed a class action lawsuit on behalf of copyright holders of musical compositions and ended up recovering a little over $50,000 for the class members. The lawyers then asked the court to award them $6 million in legal fees. And the district court authorized $1.7 million in legal fees—more than thirty times the amount that the class received.   The Ninth Circuit reversed the district court’s award of attorneys’ fees to Plaintiffs’ counsel in a copyright action and remanded. The panel held that the touchstone for determining the reasonableness of attorney’s fees in a class action under Federal Rule of Civil Procedure 23 is the benefit to the class. Here, the benefit was minimal. The panel held that the district court erred in failing to calculate the settlement’s actual benefit to the class members who submitted settlement claims, as opposed to a hypothetical $20 million cap agreed on by the parties. The panel held that district courts awarding attorneys’ fees in class actions under the Copyright Act must still generally consider the proportion between the award and the benefit to the class to ensure that the award is reasonable. The panel recognized that a fee award may exceed the monetary benefit provided to the class in certain copyright cases, such as when a copyright infringement litigation leads to substantial nonmonetary relief or provides a meaningful benefit to society, but this was not such a case. The panel instructed that, on remand, the district court should rigorously evaluate the actual benefit provided to the class and award reasonable attorneys’ fees considering that benefit. View "DAVID LOWERY, ET AL V. RHAPSODY INTERNATIONAL, INC." on Justia Law

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This is a putative class action by three truck drivers against their employer, Domino’s Pizza. The court previously affirmed the district court’s denial of Domino’s motion to compel arbitration, holding that because the drivers were a “class of workers engaged in foreign or interstate commerce,” their claims were exempted from the Federal Arbitration Act (“FAA”) by 9 U.S.C. Section 1.   The Ninth Circuit affirmed the district court’s order denying Domino Pizza’s motion to compel arbitration in a putative class action brought by three Domino truck drivers, alleging violations of California labor law. The panel stated that its prior decision squarely rested upon its reading of Rittmann v. Amazon.com, Inc., 971 F.3d 904 (9th Cir. 2020), which concerned Amazon delivery drivers. The panel found no clear conflict between Rittmann and Saxon and nothing in Saxon that undermined the panel’s prior reasoning that because the plaintiff drivers in this case, like the Amazon package delivery drivers in Rittmann, transport interstate goods for the last leg to their final destinations, they are engaged in interstate commerce under Section 1. View "EDMOND CARMONA, ET AL V. DOMINO'S PIZZA, LLC" on Justia Law

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Plaintiff filed individual and class claims in Montana state court against GEICO after GEICO failed to advance pay Plaintiff’s medical bills and lost wages following a car accident caused by GEICO’s insured. GEICO removed the lawsuit to federal court, asserting jurisdiction under the Class Action Fairness Act (CAFA). Neither Plaintiff nor the district court questioned whether CAFA jurisdiction was proper.   The Ninth Circuit vacated the district court’s judgment and remanded for the district court to conduct the necessary evidentiary inquiry and determine whether GEICO can sufficiently establish that more than $5 million is in dispute. The panel held that it could sua sponte question a defendant’s allegation of CAFA jurisdiction. The panel further concluded that the current record did not sufficiently demonstrate that CAFA’s amount-in-controversy requirement was met because it was not evident from the face of the complaint and the nature of the class claims that this controversy involved more than $5 million, nor did GEICO’s notice of removal and supporting declaration satisfactorily establish that more than $5 million was in dispute. View "BRANDON MOE V. GEICO INDEMNITY COMPANY, ET AL" on Justia Law

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Counsel filed a class action lawsuit on behalf of copyright holders of musical compositions and recovered a little over $50,000 for the class members from Defendant Rhapsody International, Inc. (now rebranded as Napster), a music streaming service. The class members obtained no meaningful injunctive or nonmonetary relief in the settlement of their action. The district court nonetheless authorized $1.7 in attorneys’ fees under the “lodestar” method.   The Ninth Circuit reversed the district court’s award of attorneys’ fees to Plaintiffs’ counsel and remanded. The panel held that the touchstone for determining the reasonableness of attorneys’ fees in a class action under Federal Rule of Civil Procedure 23 is the benefit to the class. Here, the benefit was minimal. The panel held that the district court erred in failing to calculate the settlement’s actual benefit to the class members who submitted settlement claims, as opposed to a hypothetical $20 million cap agreed on by the parties. The panel held that district courts awarding attorneys’ fees in class actions under the Copyright Act must still generally consider the proportion between the award and the benefit to the class to ensure that the award is reasonable. The panel recognized that a fee award may exceed the monetary benefit provided to the class in certain copyright cases, such as when a copyright infringement litigation leads to substantial nonmonetary relief or provides a meaningful benefit to society, but this was not such a case. The panel instructed that, on remand, the district court should rigorously evaluate the actual benefit provided to the class and award reasonable attorneys’ fees considering that benefit. View "DAVID LOWERY, ET AL V. RHAPSODY INTERNATIONAL, INC." on Justia Law

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The Federal Food, Drug, and Cosmetic Act (“FDCA”) prohibits the misbranding of any food. A food is deemed to be misbranded if it meets any of the definitions in 21 U.S.C. Section 343. To implement this subsection, the Food and Drug Administration (“FDA”) promulgated regulations governing the nutrition labeling of dietary supplements. Plaintiff alleged that she and other consumers were damaged because “they paid for a product that they would not have purchased had it truthfully disclosed that it did not contain Glucosamine Sulfate.” The second amended complaint claimed violations of the California Consumers Legal Remedies Act, the California Unfair Competition Law, the California False Advertising Law, unjust enrichment, restitution, and breach of warranty. The district court concluded that Walmart had carried its burden of showing Plaintiff’s state-law claims were preempted by federal law.   The Ninth Circuit affirmed the district court’s order granting summary judgment for Walmart Inc. The panel held that Defendant’s proposed rule to the contrary was preempted. The holding in Durnford v. MusclePharm Corp., 907 F.3d 595 (9th Cir. 2018), did not provide otherwise. Nothing in Durnford suggested its analysis applied only to the nutrition panel. The panel concluded that Defendant’s claims were preempted, and Walmart was entitled to judgment as a matter of law. View "DARLENE HOLLINS, ET AL V. WALMART INC., ET AL" on Justia Law