Justia Class Action Opinion Summaries

Plaintiffs, whose vehicles had been “totaled,” sued Liberty, an auto insurer, and CCC, alleging that Liberty breached its contracts with its insureds and that both companies violated Washington’s unfair trade practices law and committed civil conspiracy. Liberty’s valuation method uses a report about the value of “comparable vehicles,” provided by CCC. To account for the difference between the average car owned by a private person and the cars for sale at dealerships, CCC reduces a totaled car’s valuation.The district court declined to certify a proposed class because individual questions predominated over common questions and individualized trials were superior to a class action. The Ninth Circuit affirmed. Whether Liberty and CCC’s condition adjustment violates the Washington state regulations is a common question but to show liability for breach of contract or unfair trade practices, the plaintiffs must show an injury. Establishing an injury will require an individualized determination for each plaintiff; those individualized determinations predominate over the common questions. A class action here would involve adjudicating issues specific to each class member’s claim, and that would be unmanageable. Individual trials would be a better way to adjudicate those issues. View "Lara v. First National Insurance Co." on Justia Law

Plaintiffs and Swift reached a settlement pertaining to class claims alleging violations of California labor law, and claims brought under the California Private Attorney General Act (PAGA), which allows private citizens to recover civil penalties on behalf of themselves “and other current or former employees.” Peck and Mares objected to the settlement agreement. The district court gave final approval of the settlement.The Ninth Circuit dismissed the appeal of the PAGA settlement. Peck may not appeal the PAGA settlement because he was not a party to the underlying PAGA action. Although Peck is a class member of the class action, a PAGA action is distinct from a class action. Objectors to a PAGA settlement are not “parties” to a PAGA suit in the same sense that absent class members are “parties” to a class action. The fact that Peck may ultimately receive a portion of the PAGA settlement did not make him a party. Although Peck has a separately-filed PAGA action, that does not make him a party to this PAGA case.The court vacated the approval of the class action settlement. The district court erred in applying a presumption that the settlement was fair and reasonable, and the product of a non-collusive, arms-length negotiation; the error was not harmless. That erroneous presumption cast a shadow on the entire order. On remand, the district court must make findings in accordance with the applicable heightened standard. View "Peck v. Swift Transportation Co." on Justia Law

Plaintiffs alleged, in this consolidated class action, that Google illegally collected their Wi-Fi data through its Street View program. After the parties reached a settlement agreement that provided for injunctive relief, cy pres payments to nine Internet privacy advocacy groups, fees for the attorneys, and service awards to class representatives—but no payments to absent class members, David Lowery, one of two objectors to the settlement proposal, appealed the district court's approval of the settlement and grant of attorneys' fees.The Ninth Circuit affirmed, concluding that the district court did not abuse its discretion in approving the settlement, certifying the class, or in its award of attorneys' fees, and it did not commit legal error by rejecting Lowery's First Amendment argument. The panel rejected the suggestion that a district court may not approve a class-action settlement that provides monetary relief only in the form of cy pres payments to third parties; Lowery has not shown that the district court abused its discretion in approving the use of cy pres payments in the settlement; the infeasibility of distributing settlement funds directly to class members does not preclude class certification; and viewing the modest injunctive relief together with the indirect benefits the class members enjoy through the cy pres provision, the panel affirmed the district court’s finding that the settlement was fair, reasonable, and adequate.The panel also concluded that the settlement agreement does not compel class members to subsidize third-party speech because any class member who does not wish to subsidize speech by a third party that he or she does not wish to support, can simply opt out of the class. The panel has never held that merely having previously received cy pres funds from a defendant, let alone other defendants in unrelated cases, disqualifies a proposed recipient for all future cases. Furthermore, the panel affirmed cy pres provisions involving much closer relationships between recipients and parties than anything Lowery alleges here. The court further concluded that the district court properly considered all relevant circumstances, including the value to the class members, and concluded that a 25% benchmark was appropriate. Finally, the panel concluded that class counsel and class representatives did not breach their fiduciary duties by entering the settlement. View "Joffe v. Google, Inc." on Justia Law

A putative nationwide class of current and former members sued MEF, a membership-based spa-services company, alleging that MEF increased fees in violation of the membership agreement. The parties settled. In exchange for the release of all claims against MEF, class members could submit claims for “vouchers” for MEF products and services. The district court approved the settlement as “fair, reasonable, and adequate” under FRCP 23(e).The Ninth Circuit vacated. If a class action settlement is considered a “coupon” under the Class Action Fairness Act (CAFA) additional restrictions apply to the settlement approval process. The court did not defer to the district court’s determination that the MEF vouchers were not coupons but applied a three-factor test, examining whether settlement benefits require class members “to hand over more of their own money before they can take advantage of” those benefits, whether the credit was valid only for “select products or services,” and how much flexibility the credit provided. The district court also failed to adequately investigate some of the potentially problematic aspects of the relationship between attorneys’ fees and the benefits to the class, which impacted the fairness of the entire settlement, not just attorneys’ fees. The district court did not apply the appropriate enhanced scrutiny; it failed to adequately address the three warning signs of implicit collusion. View "McKinney-Drobnis v. Massage Envy Franchising, LLC" on Justia Law

The district court certified a nationwide indirect purchaser class in antitrust multidistrict litigation seeking injunctive and monetary relief under sections 1 and 2 of the Sherman Act and California law against Qualcomm. The suit alleged that Qualcomm maintained a monopoly in electronic chips by engaging in a “no-license-no-chips” policy and sold chips only at above-FRAND (fair, reasonable, and non-discriminatory) royalty rates; refusing to license its standard-essential patents to rival chip suppliers; and entering into exclusive dealing arrangements with Apple. The plaintiffs, consumers who bought cellphones, alleged that Qualcomm’s monopoly harmed consumers because the amount attributable to an allegedly excessive royalty was passed through the distribution chain to consumers.The Ninth Circuit vacated. The court noted its 2020 holding, FTC v. Qualcomm, that Qualcomm’s modem chip licensing practices did not violate the Sherman Act and that its exclusive dealing agreements with Apple did not substantially foreclose competition. The class was erroneously certified under a faulty choice of law analysis because differences in relevant state laws swamped predominance. California’s choice of law rules precluded the district court’s certification of the nationwide Rule 23(b)(3) class because other states’ laws, beyond California’s Cartwright Act, should apply. As a result, common issues of law did not predominate in the class as certified. View "Stromberg v. Qualcomm, Inc." on Justia Law

The Ninth Circuit affirmed the district court's denial of class certification in an action alleging minimum wage, overtime, and expense reimbursement claims against Grubhub. Plaintiff contends that he was misclassified as an independent contractor rather than an employee when he worked for Grubhub as a food delivery driver.The panel concluded that the district court properly denied certification to plaintiff's proposed class of delivery drivers in California where all members of plaintiff's putative class—except plaintiff and one other—signed agreements waiving their right to participate in a class action. The panel explained that the district court correctly held plaintiff did not satisfy the requirements in Federal Rule of Civil Procedure 23(a) because he is neither typical of the class nor an adequate representative, and because the proceedings would be unlikely to generate common answers. The panel rejected Grubhub's claim that California Proposition 22 abated the application of the ABC test to plaintiff's pending class claim. In this case, there is no dispute that plaintiff’s minimum wage and overtime claims are rooted in wage orders. The panel concluded that, because the district court rendered its judgment before the California Supreme Court decided Dynamex Operations W., Inc. v. Superior Court, 416 P.3d 1, 33–40 (Cal. 2018), it had no occasion to apply the ABC test to plaintiff's claims. The panel remanded for the district court to apply the ABC test in the first instance to plaintiff's expense reimbursement claim. View "Lawson v. Grubhub, Inc." on Justia Law

The dating app Tinder offered reduced pricing for those under 29. Kim, in her thirties, paid more for her monthly subscription than those in their twenties. Kim filed suit, citing California’s Unruh Civil Rights Act and its unfair competition statute. The parties reached a settlement, before class certification, that applied to a putative class, including all California-based Tinder users who were at least 29 years old when they subscribed. Tinder agreed to eliminate age-based pricing in California for new subscribers. Class members with Tinder accounts would automatically receive 50 “Super Likes” for which Tinder would ordinarily have charged $50. Class members who submitted a valid claim form would also receive their choice of $25 in cash, 25 Super Likes, or a one-month free subscription.Class members, whose attorneys represent the lead plaintiff in a competing age discrimination class action against Tinder in California state court, objected to the proposed settlement. The district court certified the class, granted final approval of the proposed settlement, and awarded Kim a $5,000 incentive payment and awarded $1.2 million in attorneys’ fees. The Ninth Circuit reversed. While the district court correctly recited the fairness factors under Fed. R. Civ. P. 23(e)(2), it materially underrated the strength of the plaintiff’s claims, substantially overstated the settlement’s worth, and failed to take the required hard look at indicia of collusion, including a request for attorneys’ fees that dwarfed the anticipated monetary payout to the class. View "Allison v. Tinder, Inc." on Justia Law

The district court certified two nationwide classes in an action under the Telephone Consumer Protection Act. Moser, a resident of California, sued the successor of HII, alleging that HII was responsible for unwanted sales calls that violated the TCPA. HII was incorporated in Delaware and represented that its principal place of business was Florida. The district court had specific personal jurisdiction over Moser’s own claims against HII but HII argued that it lacked personal jurisdiction over the claims of non-California plaintiffs under the Supreme Court’s 2017 “Bristol-Myers” decision. The district court concluded that HII had waived its personal jurisdiction defense by not raising it at the motion to dismiss stage.The Ninth Circuit vacated, first holding that it had jurisdiction under Rule 23(f) to review the personal jurisdiction and waiver issues. Agreeing with the Fifth and D.C. Circuits, the court held that HII had not waived its personal jurisdiction objection to class certification by failing to assert the defense at the Rule 12 motion to dismiss stage. At the motion to dismiss stage, lack of personal jurisdiction over unnamed, non-resident putative class members was not an ”available” Rule 12(b) defense. View "Moser v. Benfytt, Inc." on Justia Law

The Ninth Circuit granted in part a petition for a writ of mandamus and ordered the district court to vacate its order appointing an individual as lead plaintiff in a consolidated securities fraud action against Nikola and related defendants. In the underlying action, plaintiffs alleged that they suffered losses from buying Nikola securities after a non-party report described apparent false statements made by the founder and contained in company advertising materials. Petitioners Mersho, Chau, and Karczynski moved to be lead plaintiff as a group under the name Nikola Investor Group II (Group II).In a securities fraud class action, the Private Securities Litigation Reform Act (PSLRA) requires the district court to identify the presumptive lead plaintiff, who is the movant with the largest financial interest and who has made a prima facie showing of adequacy and typicality. Once the presumption is established, competing movants can rebut the presumption by showing that the presumptive lead plaintiff will not fairly or adequately represent the class.The panel granted the petition to the extent it seeks to vacate the district court's order appointing Plaintiff Baio as lead plaintiff. The panel concluded that four of the five Bauman factors weigh in favor of mandamus relief and thus a writ of mandamus is appropriate. In regards to the third Bauman factor, the panel explained that the district court clearly erred by finding that the presumption had been rebutted. In this case, the district court failed to point to evidence supporting its decision, instead relying on the absence of proof by Group II regarding a prelitigation relationship and its misgivings. Therefore, the district court did not comport with the burden-shifting process Congress established in the PSLRA. The panel also concluded that the first, second, and fifth Bauman factors weigh in favor of granting the writ. However, the panel declined to instruct the district court to appoint Group II as lead plaintiff, remanding for the district court to redetermine the issue. View "Mersho v. United States District Court for the District of Arizona" on Justia Law

The Ninth Circuit reversed the district court's approval of a class action settlement in an appeal brought by a class member objector in a class action alleging that ConAgra used a misleading "100% Natural" label on Wesson Oil.The panel held that, under the newly revised Federal Rule of Civil Procedure 23(e)(2) standard, courts must scrutinize settlement agreements — including post-class certification settlements — for potentially unfair collusion in the distribution of funds between the class and their counsel. The panel explained that courts should apply the heightened scrutiny Bluetooth factors even for post-class certification settlements. In this case, the class action settlement had all the hallmarks of a potentially collusive settlement giving short shrift to the class. The panel stated that the class action settlement raises a squadron of red flags billowing in the wind and begging for further review. The panel also concluded that the district court erred by failing to approximate the value of the injunction. Furthermore, the Erie doctrine does not preclude the application of Rule 23(e)(2). Finally, the panel concluded that the district court did not err by determining that the objector failed to rebut the conclusion that the settlement satisfied Rule 23(e)(2). The panel remanded for further proceedings. View "Briseño v. Henderson" on Justia Law