Justia Class Action Opinion Summaries

Articles Posted in US Court of Appeals for the Third Circuit
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The plaintiffs, who performed mattress deliveries for Sleepy's, signed Independent Driver Agreements, providing that the relationship was “non-exclusive.” Some drivers signed on their own behalf; others signed on behalf of their corporate entity (carrier). Individual drivers were required to form business entities, even if the business consisted of one driver and one truck. Sleepy’s did not pay wages to a carrier’s owners or workers. It paid each carrier for all the deliveries the carrier performed. An employee misclassification suit, seeking class certification, alleged that Sleepy’s misclassified the individual drivers as independent contractors and violated New Jersey law by making certain deductions and failing to pay overtime.The Third Circuit reversed the denial of certification of a proposed class of drivers who performed Sleepy's deliveries on a full-time basis using one truck. In addition to the Federal Rule of Civil Procedure 23 class action requirements, the Third Circuit requires that a Rule 23(b)(3) class be “currently and readily ascertainable.” Plaintiffs must show that the class is defined with reference to objective criteria and there is a reliable and administratively feasible mechanism for determining whether putative class members fall within the definition. The district court essentially demanded that the plaintiffs identify the class members at the certification stage and focused on gaps in Sleepy's records. Where an employer’s lack of records makes it more difficult to ascertain members of an otherwise objectively verifiable class, the employees who make up that class should not bear the cost of the employer’s faulty record-keeping. View "Hargrove v. Sleepys LLC" on Justia Law

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Reckitt developed Suboxone tablets, a prescription drug used to treat opioid addiction. Toward the end of its seven-year period of exclusivity in which other manufacturers could not introduce generic versions, Reckitt developed an under-the-tongue film version of Suboxone, which would enjoy its own exclusivity period. Generic versions of Suboxone tablets would not be rated as equivalent to the name-brand Suboxone film, so state substitution laws would not require pharmacists to substitute generic Suboxone tablets if a patient were prescribed Suboxone film.Purchasers filed suit, alleging that Reckitt’s transition to Suboxone film was coupled with efforts to eliminate the demand for Suboxone tablets and to coerce prescribers to prefer film in order to maintain monopoly power, in violation of the Sherman Act, 15 U.S.C. 2. The Purchasers submitted an expert report indicating that, due to Reckitt’s allegedly-anticompetitive conduct, the proposed class paid more for brand Suboxone products. The district court certified a class of “[a]ll persons or entities . . . who purchased branded Suboxone tablets directly from Reckitt” during a specified period. The Third Circuit affirmed. Common evidence exists to prove the Purchasers’ antitrust theory and the resulting injury. Although allocating the damages among class members may be necessary after judgment, such individual questions do not ordinarily preclude the use of the class action device; the court correctly found that common issues predominate. View "In re: Suboxone Antitrust Litigation" on Justia Law

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The Baptistes filed suit on behalf of a class of homeowner-occupants and renters (about 8,400 households) claiming interference with the use and enjoyment of their homes and loss in property value caused by noxious odors and other air contaminants emanating from the 224-acre Bethlehem Landfill. The Third Circuit reversed the dismissal of the suit. While everyone in the community—including visitors, commuters, and residents—may suffer from having to breathe polluted air in public spaces, the Baptistes have identified cumulative harms that are unique to residents, such as the inability to use and enjoy their outdoor spaces. These injuries are above and beyond any injury to the public; the Baptistes sufficiently alleged a “particular damage” to sustain a private claim for public nuisance. They also stated a claim for private nuisance. Pennsylvania law does not reject a private nuisance claim on the ground that the property affected was too far from the source of the alleged nuisance. Nor does Pennsylvania law condition an individual’s right to recover private property damages on a nuisance theory on the size of the nuisance or the number of persons harmed, as opposed to the nature of the rights affected or the degree of the harm suffered. The question remains whether the Baptistes have sufficiently pleaded a cognizable injury to state an independent negligence claim. View "Baptiste v. Bethlehem Landfill Co." on Justia Law

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The Settlement Agreement between the NFL and eligible retired NFL players arose out of a class action based on findings that professional football players are at a significantly increased risk for serious brain injury. The Agreement is intended to provide monetary awards to former players who receive a qualifying diagnosis after following a specified protocol. The Agreement’s claims administrator and the district court created and adopted a set of clarifying, revised rules relating to how players can obtain a qualifying diagnosis.Several retired NFL players or their estates challenged those revised rules, arguing that they amended the Agreement, and alternatively, that the court abused its discretion by adopting the four revised rules. The Third Circuit upheld the rules, noting that the Agreement provided for the court’s continuing jurisdiction and specifies the duties of the claims administrator. The revised rules are permissible clarifications created for the Agreement’s successful administration—for example, to prevent fraud—and were not amendments. They were created, in part, because the claims administrator reviewed many claim submissions and noted that there were certain “clients of a law firm traveling thousands of miles to see the same physician rather than those available to them in their hometowns and excessively high numbers and rates of payable diagnoses from those doctors.” View "In Re: NFL Players' Concussion Injury Litigation" on Justia Law

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GSK’s patent to an anti-epilepsy drug, Lamictal, was to expire in 2009. Teva sought to market a generic version of Lamictal, lamotrigine, before GSK’s patent expired. Teva submitted an Abbreviated New Drug Application. GSK sued for infringement. After Teva received a favorable ruling with respect to one claim in 2005, the parties settled. Teva would begin selling lamotrigine six months before it could have had GSK won but later than if it had succeeded in litigation. GSK promised not to launch an authorized generic (AG) version of Lamictal. Had the parties not settled and had Teva succeeded in litigation, it would have been entitled to a 180-day exclusivity period as the generic first filer but GSK could have launched an AG.Companies that directly purchased Lamictal or lamotrigine (Direct Purchasers) sued, claiming the settlement violated the antitrust laws because GSK “paid” Teva to stay out of the market by promising not to launch an AG, resulting in Direct Purchasers paying more than they would have otherwise.The district court certified a class of all companies that purchased Lamictal from GSK or lamotrigine from Teva. The Third Circuit vacated. The district court certified the class without undertaking the required “rigorous” analysis, failing to resolve key factual disputes, assess competing evidence, and weigh conflicting expert testimony, all of which bear heavily on the predominance requirement, and confused injury with damages. View "In re: Lamictal Direct Purchaser Antitrust Litigation" on Justia Law

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American’s timekeeping system calculates employee pay only for the duration of their shifts, excluding an automatic 30-minute meal break deduction. If an employee clocks in before the shift begins or clocks out after the shift ends, the system assumes that the employee only worked during the shift, rather than working during those “grace periods.” If employees actually work during grace periods or meal breaks, American requires them to seek approval of an “exception.” A purported class of non-exempt, hourly employees at American’s Newark station asserted violation of the New Jersey Wage and Hour Law (NJWHL). American argued that employees arrived early and left late for various reasons and engaged in personal activities before and after their shifts, so the court would have to engage in individualized inquiries to determine when a particular employee was not compensated for periods during which he was actually working while clocked in. The district court certified the class, identifying common questions: whether hourly-paid American employees are not being compensated for all hours worked due to the system and whether American is violating the NJWHL by imposing a schedule-based compensation system that permits a supervisor to authorize compensation for work performed outside of a scheduled shift, but discourages employees from seeking such authorization. The Third Circuit reversed. Several of the requirements of Rule 23, including commonality and predominance, were not met. Determining when each employee was actually working will necessarily require individualized inquiries. View "Ferreras v. American Airlines Inc" on Justia Law

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Plaintiffs alleged pharmaceutical manufacturers stalled the release of clinical trial results for their blockbuster anti-cholesterol drugs, tried to change the study's endpoint to produce more favorable results, concealed their role in the change, and that the delay allowed one company to raise $4.08 billion through a public offering, which the company used to purchase another company to lessen its reliance on the drugs. Amid press reports and a congressional investigation, the companies released the clinical trial results, which allegedly caused their stock prices to plummet, amounting to about a $48 billion loss in market capitalization. Investors filed suit. The court denied defendants’ motions to dismiss under the Private Securities Litigation Reform Act’s heightened pleading standard, denied defendants’ motion for summary judgment, and granted class certification.Investors were provided with Rule 23(c)(2) notice of their right to opt-out: “you will not be bound by any judgment in this Action” and “will retain any right you have to individually pursue any legal rights.” After the opt-out period, the court approved settlements, offering opt-out investors 45 days to rejoin and share in the recovery, while stating that opt-outs “shall not be bound” to the settlement. Sixteen opt-out investors filed suits, tracking the class action claims, and adding a New Jersey common law fraud claim. After the Supreme Court held that American Pipe tolling does not extend to statutes of repose, plaintiffs were left with only their state-law claims. The court dismissed those as barred by the Securities Litigation Uniform Standards Act, 15 U.S.C. 10 78bb(f)(5)(B)(ii)(II). The Third Circuit reversed, finding that the class actions and the opt-out suits were not “joined, consolidated, or otherwise proceed[ing] as a single action for any purpose.” View "North Sound Capital LLC v. Merck & Co., Inc" on Justia Law

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According to its website, the University of Northern New Jersey, founded in 2012, was “nationally accredited by the Accrediting Commission of Career Schools and Colleges and the Commission on English Language Accreditation” and “certified by the U.S. Department of Homeland Security, Student and Exchange Visitor Program to educate international students.” The site included a statement from UNNJ's President, Dr. Brunetti, and its social media accounts informed students of closings for inclement weather and of alumni marriages. The University never existed. The Department of Homeland Security created the “sham university” to catch brokers of fraudulent student visas. It ensnared many such brokers; hundreds of foreign students “enrolled.” The government initially conceded that those students were innocent victims, but later suggested that they were akin to participants in the fraudulent scheme. Each enrolled student (including the plaintiffs) received a letter informing them that their student status had been terminated due to fraudulent enrollment. The government charged 21 individuals with fraudulently procuring visas. The plaintiffs filed a class action. The district court dismissed the claims, finding that there was no final government action. The Third Circuit vacated. Reinstatement proceedings are not required and would not afford an opportunity for review of DHS’s decision to terminate their F1 visa status. The students need not wait until removal proceedings are instituted to challenge the termination of their student status; neither immigration judges nor the BIA have authority to overturn the denial of reinstatement. View "Fang v. Director United States Immigration & Customs Enforcement" on Justia Law

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News broke in 2012 that Google’s Doubleclick.net cookies were bypassing Safari and Internet Explorer privacy settings and tracking internet-user information. Google settled FTC and state attorneys general lawsuits, agreeing to cease the practice and to pay $39.5 million in fines, without admitting wrongdoing. Plaintiffs' claims were consolidated into a putative class action, alleging violations of federal privacy and fraud statutes, California unfair competition and privacy statutes, the California constitution’s right to privacy, and California’s privacy tort law. The Third Circuit affirmed the dismissal of all but the California constitutional and tort claims. The parties agreed to a settlement. The district court approved certification of an FRCP 23(b)(2) class and the settlement under FRCP 23(e). Under the settlement a cy pres award would be paid to organizations the defendant approved, primarily data privacy organizations that agree to use the funds to research and promote browser privacy. It also included class counsel’s fees and costs, and incentive awards for named class representatives. One objector argued that the cy pres money belongs to the class as compensation and challenged the choice of cy pres recipients because of their pre-existing relationships with Google and class counsel. The Third Circuit vacated, stating that the “cursory certification and fairness analysis were insufficient for us to review its order certifying the class and approving the settlement. The settlement agreement’s broad release of claims for money damages and its designation of cy pres recipients are particularly concerning.” View "In Re: Google Inc. Cookie Placement Consumer Privacy Litigation" on Justia Law

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Beginning in 2001, Ford received complaints from F-Series vehicle purchasers, relating to the fuel tanks. The problems were clustered in certain regions. Ford suspected that unique qualities in regional fuel supplies, particularly excessive concentrations of biodiesel, were causing delamination. In 2007, Ford released an improved tank coating. Ford’s warranty claims decreased, but some reports of delamination persisted. By 2010, Ford believed that the cause was not biodiesel but was acids found in fuel samples from service stations near a dealer that encountered numerous delamination complaints. Coba purchased two 2006 F-350 dump trucks for his landscaping business. By 2009, both trucks exhibited delamination. Ford's dealership replaced the tanks and filters in both trucks at no cost to Coba. Coba continued to have the same problems, even after the warranties expired. Coba filed a class-action, asserting breach of Ford’s New Vehicle Limited Warranty (NVLW), violation of the New Jersey Consumer Fraud Act (NJCFA), and breach of the duty of good faith and fair dealing. The Third Circuit affirmed summary judgment in favor of Ford. The denial of class certification did not divest the district court of jurisdiction, although jurisdiction was predicated on the Class Action Fairness Act, 28 U.S.C. 1332(d).The NVLW, which covered defects in “materials or workmanship” did not extend to design defects, such as alleged by Coba, which also negated his breach of the implied covenant of good faith and fair dealing claims. The evidence of Ford’s knowledge of the alleged defect did not create a triable NJCFA issue. View "Coba v. Ford Motor Co." on Justia Law