Justia Class Action Opinion SummariesArticles Posted in US Court of Appeals for the Second Circuit
Scott v. Chipotle Mexican Grill, Inc.
Class plaintiffs are seven named plaintiffs representing six putative classes under Federal Rule of Civil Procedure 23(b)(3). Plaintiffs also filed suit on behalf of themselves and 516 individuals who opted in to a conditionally certified collective action (the "collective plaintiffs") under the Fair Labor Standards Act (FLSA). Class plaintiffs alleged that Chipotle misclassified them as exempt employees in violation of the labor laws in six states, and collective plaintiffs alleged that Chipotle misclassified them as exempt employees in violation of the FLSA. The Second Circuit affirmed the district court's order denying class certification on the basis of a lack of predominance and superiority. While reasonable minds could disagree, on the record before the court, it could not say that the district court's factual findings were clearly erroneous or that its conclusion was outside the range of permissible decisions. However, the court vacated the district court's order decertifying the collective action, holding that the district court committed legal error by improperly analogizing the standard for maintaining a collective action under the FLSA to Rule 23 procedure, and relying on that improper analogy in concluding that named plaintiffs and opt-in plaintiffs are not "similarly situated." In this case, the district court committed legal error in employing the "sliding scale" analogy to Rule 23 as it improperly conflated section 216(b) with Rule 23 and that rule's more stringent requirements. Accordingly, the court remanded for further proceedings. View "Scott v. Chipotle Mexican Grill, Inc." on Justia Law
Chavez v. Occidental Chemical Corp.
The Second Circuit certified the following questions to the New York State Court of Appeals: (1) whether New York law recognizes ʺcross‐jurisdictional class action tolling,ʺ i.e., tolling of a New York statute of limitations by the pendency of a class action in another jurisdiction; and (2) whether, under New York law, a non‐merits dismissal of class certification can terminate class action tolling, and if so, whether the Orders at issue did so. View "Chavez v. Occidental Chemical Corp." on Justia Law
P.J. v. Connecticut State Board of Education
Plaintiffs filed suit against the State in 1991 on behalf of a statewide class of children with intellectual disabilities for failing to comply with the requirement in the Individuals with Disabilities Education Act (IDEA), that children with disabilities be educated in the "least restrictive environment" that meets their needs. After the parties negotiated a settlement, and near the end of the agreement's term, plaintiffs' counsel moved for additional attorneys' fees. The Second Circuit affirmed the district court's award of attorneys' fees in part, holding that counsel was not barred from further attorneys' fees by the text of the settlement agreement or the definition of "prevailing party" contained in Buckhannon Board & Care Home, Inc. v. West Virginia Department of Health & Human Resources, 532 U.S. 598 (2001). However, the court reversed in part, holding that the district court misapplied the Delaware Valley standard in awarding several categories of work. Accordingly, the court remanded for further proceedings. View "P.J. v. Connecticut State Board of Education" on Justia Law
Gale v. Chicago Title Insurance Co.
The Second Circuit affirmed the district court's judgment, holding that when jurisdiction‐granting class‐action allegations are removed from a complaint, a district court is divested of Class Action Fairness Act (CAFA) jurisdiction and the action must be dismissed. In this case, a Connecticut attorney filed suit against a group of title insurance companies for allegedly violating a Connecticut law that allows only Connecticut attorneys to act as title agents in the state. After plaintiffs amended the complaint to remove all class action allegations, the district court concluded that the withdrawal of the class‐action allegations divested it of CAFA jurisdiction and dismissed the amended complaint. View "Gale v. Chicago Title Insurance Co." on Justia Law
Fresno County Employees’ Retirement Assoc. v. Isaacson/Weaver Family Trust
The trust appealed the district court's grant of the law firm's request for a percentage fee awarded from the common settlement fund. The fee award was compensation for the law firm's representation of a class of plaintiffs that settled securities law claims against BioScript. The trust was a member of the class and objected to the fee award. The Second Circuit affirmed and held that, regardless of whether the claims settled here were initiated under fee‐shifting statutes, the common‐fund doctrine properly controls the district court's allocation of attorneys' fees from a common settlement fund. The court explained that class plaintiffs have received the benefit of counsel's representation and assumption of the risk that the lawsuit will not render a recovery, and thus the class may be fairly charged for counsel's assumption of contingent risk. Therefore, the court held that the district court was entitled to exercise its discretion in awarding either a percentage‐of‐the‐fund fee or a lodestar fee to class counsel. View "Fresno County Employees' Retirement Assoc. v. Isaacson/Weaver Family Trust" on Justia Law
Radha Geismann, M.D., P.C. v. ZocDoc, Inc.
Geismann filed a Telephone Consumer Protection Act (TCPA), 47 U.S.C. 227, class action complaint, alleging that it received unsolicited faxes from ZocDoc. After Geismann moved for class certification, ZocDoc made a settlement offer as to Geismann’s individual claims (FRCP 68), whichGeismann rejected. The court entered judgment in the amount and under the terms of the unaccepted offer and dismissed the action as moot. On remand, ZocDoc deposited $20,000 (FRCP 67) in "full settlement of Geismannʹs individual claims," in the courtʹs registry. The court again entered judgment in Geismannʹs favor and dismissed the action. The Second Circuit vacated. There is no material difference between a plaintiff rejecting a Rule 67 tender of payment and a Rule 68 offer of payment; the parties retained the same stake in the litigation they had at the outset. A claim becomes moot when a plaintiff actually receives all of the relief he could receive through litigation. The Rule 67 procedure provides for safekeeping of disputed funds pending the resolution of litigation, but it cannot alter the parties' contractual relationships and legal duties. Even if the court first entered judgment enjoining ZocDoc from further faxes and directing the clerk to send Geismann the $20,000, that would not have afforded Geismann complete relief. By rejecting the settlement offer, Geismann effectively stated that its suit “is about more than the statutory damages," it is also about the reward earned by serving as lead plaintiff. Nothing forces it to accept ZocDoc’s valuation of that part of the case. View "Radha Geismann, M.D., P.C. v. ZocDoc, Inc." on Justia Law
DuBuisson v. Stonebridge Life Insurance Co.
Plaintiffs filed a putative class action, alleging that defendants (insurance providers, banks, and credit card companies) targeted credit card holders with fraudulent solicitations for illegal accidental disability and medical expense insurance policies. Plaintiffs were among the cardholders who purchased those policies, which plaintiffs allege were void ab initio because they violated New York insurance law. Although plaintiffs did not suffer qualifying losses or make claims for coverage, they argued that they are nevertheless entitled to reimbursement of the premiums and fees they paid defendants, plus enhanced damages, based on quasi‐contract, civil fraud, and statutory claims. The district court dismissed the suit, reasoning that plaintiffs could not establish the injury‐in‐fact element of Article III standing. The court concluded the policies were not void ab initio because under a New York savings statute, plaintiffs would have received coverage had they filed claims for qualifying losses, N.Y. Ins. Law 3103. The Second Circuit vacated, stating that an Article III court must resolve the threshold jurisdictional standing inquiry before it addresses the claim's merits. The district court’s analysis conflated the requirement for an injury in fact with the underlying validity of plaintiffs’ arguments, and engaged a question of New York state law that the state courts have yet to answer. View "DuBuisson v. Stonebridge Life Insurance Co." on Justia Law
Wells Fargo Advisors, LLC v. Sappington
Employees of Wells Fargo filed putative class arbitrations before the American Arbitration Association, seeking unpaid overtime from Wells Fargo. The Second Circuit affirmed the district court's denial of Wells Fargo's petitions seeking to compel bilateral, rather than class, arbitration. The court assumed without deciding that the question whether an arbitration clause authorized class arbitration was a so-called "question of arbitrability" presumptively for a court, rather than an arbitrator, to decide. Therefore, applying Missouri's arbitration and contract law, the court held that the parties overcame this presumption by clearly and unmistakably expressing their intent to let an arbitrator decide whether they agreed to authorize class arbitration. View "Wells Fargo Advisors, LLC v. Sappington" on Justia Law
In re Petrobras Securities
Plaintiffs, holders of Petrobras equity, filed a class action against various defendants after the multinational oil and gas company was involved in money-laundering and kickback schemes. The district court certified two classes: the first asserting claims under the Securities Exchange Act of 1934, 15 U.S.C. 78a et seq.; and the second asserting claims under the Securities Act of 1933,15 U.S.C. 77a et seq. The Second Circuit clarified the scope of the contested ascertainability doctrine and held that a class is ascertainable if it is defined using objective criteria that establish a membership with definite boundaries. That threshold requirement was met in this case. The court held that the district court committed legal error by finding that Federal Rule of Civil Procedure 23(b)(3)'s predominance requirement was satisfied without considering the need for individual Morrison v. National Australia Bank Ltd., 561 U.S. 247 (2010), inquiries regarding domestic transactions. Therefore, the court vacated this portion of the Certification Order. The court also held that the district court did not abuse its discretion by determining that the Exchange Act class met their burden under Basic Inc. v. Levinson, 485 U.S. 224 (1988), with a combination of direct and indirect evidence of market efficiency. Accordingly, the court affirmed as to this issue. View "In re Petrobras Securities" on Justia Law