Justia Class Action Opinion Summaries

Western Union Company and its subsidiary, Western Union Financial Services, Inc. (collectively, Western Union), appealed the district court’s award of $40 million in attorney fees to class counsel after the settlement of a putative class action against Western Union. Plaintiffs filed this putative class action to challenge Western Union’s practice of failing to timely notify customers of failed money transfers and of holding customer money for years while accruing interest and charging administrative fees. While litigation over procedural hurdles to class certification was ongoing, the parties agreed to a settlement of the class claims against Western Union. “Generally, a settling defendant in a class action has no interest in the amount of attorney fees awarded when those fees are to be paid from the class recovery rather than the defendant’s coffers.” Western Union argued on appeal to the Tenth Circuit that it had standing to challenge the attorney-fee award in this case because it claimed it would be injured by a diminution of the Class Settlement Fund (CSF) if Class Counsel was awarded an excessive attorney-fee award. Western Union argued its interest in the CSF (and the potential effect of the attorney-fee award on the size of that fund) established its standing to challenge the fee award. The Tenth Circuit concluded any potential injury to Western Union was too attenuated from the award of attorney fees to Class Counsel to support Western Union’s standing. Because Western Union lacked standing to challenge the attorney-fee award, the Tenth Circuit lacked subject-matter jurisdiction and dismissed the appeal. View "Tennille v. Western Union" on Justia Law

Plaintiffs, three health-benefit plans (HBPs), filed suit under the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. 1961 et seq., and state laws, claiming that Aventis engaged in a pattern of mail fraud by failing to disclose the true risks of the antibiotic drug telithromycin, marketed as “Ketek.” The district court denied plaintiffs' motion to certify a class of all HBPs that paid for Ketek prescriptions on the theory that such HBPs were injured as a result of paying for Ketek prescriptions that would not have been written if Aventis had not concealed Ketek’s safety risks. The court concluded that UFCW Local 1776 v. Eli Lilly & Co. (Zyprexa) does not foreclose class certification for all RICO mail‐fraud claims brought against a drug manufacturer. However, the court concluded that Zyprexa’s reasoning applies to this case, and bars plaintiffs’ attempt to certify a class. While it may be possible for a class of plaintiffs to prove the causation element of a pharmaceutical fraud claim such as this one with generalized proof, plaintiffs have failed to offer such proof here. Therefore, class certification was correctly denied. The court's certification decision necessarily disposes of the summary judgment question as well: if plaintiffs’ RICO claims cannot be proved by generalized proof and plaintiffs have adduced no individualized proof, plaintiffs' claims cannot survive summary judgment. Further, the court agreed with the district court’s dismissal of the state‐law claims. Accordingly, the court affirmed the judgment. View "Sergeants Benevolent Ass'n v. Sanofi-Aventis US" on Justia Law

A class action complaint alleged that Honeywell engaged in uncompetitive and illegal conduct to increase its market share of round thermostats and to use its dominant market position to overcharge customers. In 2013, the parties reached a settlement and asked the trial court to preliminarily approve it. The court initially declined to do so because it had concerns about the notice proposed to be sent to class members. Those concerns were subsequently addressed to the court’s satisfaction, and on February 4, 2014, the court preliminarily approved the settlement. The notice of settlement was subsequently published and distributed to class members. The long version was distributed and posted on a website, and the short version was published in various print publications. The trial court found that four objectors to the settlement failed to establish they had standing, but rejected one objection on timeliness grounds and rejected the other three on their merits. The court of appeal affirmed, except for the ruling on standing, finding that the court properly approved the distribution of residual settlement funds and awarded class counsel attorney fees that amounted to 37.5 percent of the settlement fund. View "Roos v. Honeywell Int'l, Inc." on Justia Law

In 2007, Durand filed an Employee Retirement Income Security Act, 29 U.S.C. 1001–1461 (ERISA) class action against her former employer and the pension plan it sponsors, challenging the projection rate used by the Plan to calculate the lump-sum payment Durand elected to receive after ending her employment at the Company in 2003. The Plan then used a 401(k)-style investment menu to determine the interest earned by members’ hypothetical accounts. Durand alleged that it impermissibly used the 30-year Treasury bond rate instead of the projected rate of return on her investment selections in the “whipsaw” calculation required under pre-2006 law. The Sixth CIrcuit reversed dismissal for failure to exhaust administrative remedies. Defendants then answered the complaint and raised defenses, including that the claims of putative class members “who received lump-sum distributions after December 31, 2003” were barred due to an amendment to the Plan that took effect after that date. Plaintiffs argued that the 2004 Amendment was an illegal reduction or “cutback” in benefits. The Sixth Circuit affirmed that the “cutback” claims were time-barred and did not relate back to the “whipsaw” claim asserted in the original class complaint. View "Durand v. Hanover Ins. Group, Inc." on Justia Law

Julie Freeman, individually and on behalf of over five-thousand similarly situated car buyers, filed a lawsuit against J.L.H. Investments, LP, a/k/a Hendrick Honda of Easley ("Hendrick"), seeking damages under the South Carolina Dealers Act on the ground that Hendrick "unfairly" and "arbitrarily" charged all of its customers "closing fees" that were not calculated to reimburse Hendrick for actual closing costs. A jury returned a verdict in favor of Freeman in the amount of $1,445,786.00 actual damages. In post-trial rulings, the trial judge: (1) denied Hendrick's motions to overturn or reduce the jury's verdict; (2) granted Freeman's motions to double the actual damages award and to award attorneys' fees and costs; and (3) denied Freeman's motion for prejudgment interest. The South Carolina Supreme Court certified this case from the Court of Appeals, and finding no reversible error, the Supreme Court affirmed. View "Freeman v. J.L.H. Investments" on Justia Law

The issue this case presented for the Georgia Supreme Court’s review came from a class action challenging a 2011 City of Atlanta ordinance and the subsequent amendment by the City of its three defined benefit pension plans. The Ordinance and Amendment increased the percentage of salary required as the annual contributions of the members of the Plans. The action filed against the City, the Mayor, and members of the Atlanta City Council (collectively “Defendants”), was on behalf of City employees who participated in the Plans prior to November 1, 2011, and had not retired prior to that date, which was the start date for the increase, and were otherwise subject to the Amendment. The complaint alleged that Defendants breached Plaintiffs’ employment contracts and violated the impairment clause of the State Constitution when Defendants passed the portions of the Ordinance which increased the amounts that the Plaintiffs were required to contribute to the Plans, even though Plaintiffs would receive the same amount of retirement benefits to which they were already entitled prior to passage of the Ordinance. Plaintiffs sought a declaration that the subject portions of the Ordinance violated the Impairment Clause and that Plaintiffs were not required to continue to make the increased contributions to the Plans, and an order enjoining and restraining Defendants from collecting or attempting to collect the increased contributions. After review of the parties’ arguments on appeal, the Supreme Court affirmed the grant of summary judgment in favor of Defendants on Plaintiffs’ claims of breach of contract and unconstitutional impairment of contract and their consequent requests for declaratory and injunctive relief. View "Borders v. Atlanta" on Justia Law

Diageo distills and ages whiskey in Louisville, resulting in tons of ethanol emissions. Ethanol vapor wafts onto nearby property where the ethanol combines with condensation to propagate whiskey fungus. Ethanol emissions are regulated under the Clean Air Act, 42 U.S.C. 7401. Plaintiffs complained to the air pollution control district, which issued a Notice of Violation, finding that Diageo caused and allowed the emission of an air pollutant which crossed its property line causing an injury and nuisance to nearby neighborhoods and the public. Diageo disputed that its operations violated any district regulation. Plaintiffs filed a class action complaint, seeking damages for negligence, nuisance, and trespass, and an injunction. The district court concluded that state common law tort claims were not preempted by the Clean Air Act;” dismissed plaintiffs’ negligence claim on the ground that plaintiffs had not pled facts sufficient to establish that Diageo owed them a duty of care, or that Diageo had breached that duty; and declined to dismiss the remaining causes of action, concluding that plaintiffs had alleged facts sufficient to establish nuisance and trespass. On interlocutory appeal, the Sixth Circuit affirmed, based on the Act’s text, the Act’s structure and history, and relevant Supreme Court precedents. View "Merrick v. Diageo Americas Supply, Inc." on Justia Law

UEBT is a healthcare employee benefits trust governed by the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001, and pays healthcare providers directly from its own funds for the services provided to enrollees in its health plans. UEBT contracted with a “network vendor,” Blue Shield, to obtain access to Blue Shield’s provider network at the rates Blue Shield had separately negotiated, and certain administrative services. One of Blue Shield’s preexisting provider contracts was with Sutter, a group of health care providers in Northern California. UEBT sued Sutter, on behalf of a putative class of all California self-funded payors, alleging that Sutter’s contracts with network vendors, such as Blue Shield, contain anticompetitive terms that insulate Sutter from competition and drive up the cost of healthcare. UEBT sought damages, restitution, and injunctive relief under the Cartwright Act (Bus. & Prof. Code 16720) and California’s unfair competition law (section 17200). Sutter moved to compel arbitration, relying on an arbitration clause in the provider contract signed by Sutter and Blue Shield. The trial court denied Sutter’s motion, concluding that UEBT was not bound to arbitrate its claims pursuant to an agreement it had not signed or even seen. The court of appeal affirmed. View "UFCW & Employers Benefit Trust v. Sutter Health" on Justia Law

Whether a third-party payer (TPP) will cover the cost of a member’s prescription depends on whether that drug is listed in the TPP’s formulary. Pharmacy Benefit Managers prepare TPPs’ formularies of drugs approved for use by TPP members by analyzing research regarding a drug’s cost effectiveness, safety and efficacy. In 1999, the FDA approved Avandia as a prescription for type II diabetes. TPPs included Avandia in their formularies and covered Avandia prescriptions at a favorable rate. GSK downplayed concerns about Avandia’s heart-related side effects. In 2010, the FDA restricted access to Avandia in response to increasing evidence of its cardiovascular risks. TPPs (union health and welfare funds) sued GSK on behalf of themselves and similarly situated TPPs. asserting that GSK’s failure to disclose Avandia’s significant heart-related risks violated the Racketeer Influenced and Corrupt Organizations Act based on predicate acts of mail fraud, wire fraud, tampering with witnesses, and use of interstate facilities to conduct unlawful activity. They also claimed unjust enrichment and violations of the Pennsylvania Unfair Trade Practices and Consumer Protection Law and other states’ consumer protection laws. The Third Circuit affirmed the district court’s finding that the TPPs adequately alleged the elements of standing. View "In Re: Avandia Mktg.,Sales Practices & Prod. Liab." on Justia Law

Plaintiffs were two individuals who purchased Marlboro Light cigarettes in Oregon. Defendant Philip Morris was the company that manufactured, marketed, and sold Marlboro Lights. Plaintiffs brought this action under Oregon’s Unlawful Trade Practices Act (UTPA), alleging that defendant misrepresented that Marlboro Lights would deliver less tar and nicotine than regular Marlboros and that, as a result of that misrepresentation, plaintiffs suffered economic losses. Plaintiffs moved to certify a class consisting of approximately 100,000 individuals who had purchased at least one pack of Marlboro Lights in Oregon over a 30-year period (from 1971 to 2001). The trial court denied plaintiffs’ motion after concluding that individual inquiries so predominated over common ones that a class action was not a superior means to adjudicate the putative class’s UTPA claim. On appeal, a majority of the Court of Appeals disagreed with the trial court’s predominance assessment, concluding that the essential elements of the UTPA claim could be proved through evidence common to the class. The majority remanded to the trial court to reconsider whether, without the trial court’s predominance assessment, a class action was a superior means of litigating the class claims. In granting defendant’s petition for review, the Supreme Court considered whether common issues predominated for purposes of the class action certification decision, and what a private plaintiff in a UTPA case of this nature had to prove. The Supreme Court concluded that the trial court properly denied class certification, and accordingly, it reversed the contrary decision of the Court of Appeals and remanded to the trial court for further proceedings on the individual plaintiffs’ claims. View "Pearson v. Philip Morris, Inc." on Justia Law