Justia Class Action Opinion Summaries

Plaintiff filed this class action lawsuit in Washington state court against Nationstar Mortgage LLC, alleging several causes of action, including violations of the Fair Debt Collection Practices Act. Nationstar filed a notice of removal to federal court pursuant to the Class Action Fairness Act (CAFA). Plaintiff moved to remand the proceeding to state court, arguing that its removal was untimely under 28 U.S.C. 1446(b). The district court granted the motion and awarded Plaintiff attorney fees and costs because it found that Nationstar did not have an objectively reasonable basis for removal. A panel of the Ninth Circuit reversed, holding (1) Nationstar’s removal under CAFA was timely, and therefore, the action properly belonged in federal court; and (2) the district court’s award of attorneys’ fees that was premised on improper removal must be reversed. View "Jordan v. Nationstar Mortgage LLC" on Justia Law

Plaintiff filed a class action complaint alleging that Defendants violated Hawaii law by charging customers of certain hotels service charges without fully disclosing to customers that the charges were not entirely being distributed to non-managerial service employees. The circuit court granted summary judgment for Plaintiff on Plaintiff’s wage law claims and granted summary judgment for Defendants on the unfair methods of competition (UMOC) claim. Defendants appealed, and Plaintiff cross-appealed. The Supreme Court affirmed the grant of summary judgment as to the unpaid wages but vacated the circuit court’s order granting summary judgment for Defendants on the UMOC claim and remanded for further proceedings. Plaintiff then requested an award of attorneys’ fees and costs for the appeal and cross-appeal and an award of post judgment interest on the damages. The Supreme Court held (1) Plaintiff was entitled to attorneys’ fees for both the appeal and the cross-appeal, and Defendants were jointly and severally liable for the payment of Plaintiff’s attorneys’ fees and costs; and (2) post judgment interest was not appropriate under the circumstances of this case. View "Gurrobat v. HTH Corp." on Justia Law

An interlocutory appeal before the Eleventh Circuit centered on an order granting motions to dismiss by two defendants in a securities class action against Jiangbo Pharmaceuticals, Inc., its principal officers, and its audit firm. Jiangbo came into existence as a U.S. corporation in 2007 when its Chinese operational arm, Laiyang Jiangbo, executed a reverse merger with a Florida shell company. Jiangbo's tenure as a public company "was short and fraught with suspicion of misconduct." Shares began trading on NASDAQ on June 8, 2010 and traded on that exchange for just under a year. Only six months after trading began, the Securities and Exchange Commission (SEC) initiated an informal, non-public investigation into Jiangbo. The company's fortunes unraveled quickly soon thereafter, and the SEC formalized its investigation, which remained non-public. Jiangbo made two significant disclosures in late May 2011 that marked the culmination of its decline: it publicly acknowledged the formal SEC investigation for the first time and reported that the company had defaulted on a relatively small principal payment toward debt from its initial financing. Trading ended days later on May 31, 2011, by which time the share price had fallen from a class-period high of $10.49 per share to $3.08. By November 2011, after Jiangbo had moved to another exchange, its shares were trading for just $0.14. The investors' consolidated amended complaint alleged, inter alia, that Elsa Sung (the former Chief Financial Officer) and Frazer LLP (the external auditor) misrepresented the company's cash balances and failed to disclose a material related-party transaction in statements within or appurtenant to those filings, in violation of Section 10(b) of the Securities Exchange Act. The district court found that the investors failed to sufficiently plead their allegations of fraud against defendants Sung and Frazer LLP ("Frazer"). Applying the heightened pleading standard imposed by the Private Securities Litigation Reform Act ("PSLRA"), the Eleventh Circuit Court of Appeals affirmed the district court. View "Brophy v. Jiangbo Pharmaceuticals, Inc." on Justia Law

Stratus Franchising sells master franchises, which grant a master franchiser the exclusive right to sell Stratus unit franchises in a particular regional market. Each plaintiff (current or former unit franchisees of the commercial cleaning business) entered into a standard unit-franchise agreement that included a broad, standard-form arbitration provision. They filed a putative class-action suit against their respective master franchisers and other individuals and entities associated with the Stratus Group, alleging violations of the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. 1961-1968. Applying Missouri contract law, the district court granted the Stratus Group’s motion to compel individual arbitration. The Eighth Circuit affirmed, rejecting an argument that the arbitration provision was unenforceable as unconscionable and that members of the Stratus Group who were not signatories to their respective Agreements could not invoke or enforce the arbitration provision. View "Torres v. Simpatico, Inc." on Justia Law

Darilyn Baker appealed a district court order denying her motion for class action certification. In 2007, Baker purchased a car from Autos, Inc., d.b.a. Global Auto. Baker financed the purchase of the car by trading in her old vehicle and by entering into a retail installment sales contract with Global Auto. The total included a "document administration fee" of $195 and a "loan fee" of $200. Baker agreed to repay the loan in thirty monthly payments of $247.08. The retail installment contract also provided that if the payment was late, Baker would be charged $25. Baker was late on making some of her required monthly payments, and the vehicle was repossessed. Before Baker defaulted on her loan, Global Auto assigned Baker's contract to RW Enterprises. After the vehicle was repossessed, Baker filed suit in state district court alleging Global Auto and RW Enterprises' sales and lending practices violated state usury law, among other claims. Baker also sued Robert Opperude and James Hendershot, the principal owners of Global Auto, and Randy Westby, the principal owner of RW Enterprises. In state district court, Baker filed a motion to have the suit certified as a class action for all putative purchasers who, subject to the applicable statute of limitations period, may have suffered an injury as a result of Global Auto and RW Enterprises' business practices. Baker alleged the "loan fee," the "document administration fee," and the late payment charge violated North Dakota usury law and the North Dakota Retail Installment Sales Act. After a hearing on the motion for class certification, the district court entered an order denying the motion. The court did not rule on the merits of the case. After review, the Supreme Court concluded the district court erred in applying the law to the thirteen sub-factors of the fair and efficient adjudication factor, it reversed the district court's order denying certification and remanded with instructions to reconsider the sub-factors in light of this holding. View "Baker v. Autos, Inc." on Justia Law

Subject to exceptions, the Song-Beverly Credit Card Act of 1971 (Civ. Code, 1747) generally prohibits a retailer from requesting and recording a customer’s “personal identification information” when the customer is purchasing goods or services with a credit card. Lewis filed a putative class action against Safeway, alleging violation of the Act when Safeway’s clerk requested and recorded Lewis’s date of birth in Safeway’s cash register system when he purchased an alcoholic beverage with a credit card. The trial court held that Safeway’s conduct was exempted by the obligation-imposed-by-law exception. The court of appeal agreed. To satisfy its obligations under the Alcoholic Beverage Control Act, a licensee is obligated to verify the age of a customer purchasing an alcoholic beverage (Bus. & Prof Code, 25658(a), 25659), to keep records of its sales of alcoholic beverages, and to make those records available to the Department of Alcoholic Beverage Control. View "Lewis v. Safeway" on Justia Law

Plaintiffs, a putative class of owners of Microsoft Corporation’s Xbox 360 video game console, alleged that a design defect in the Xbox console gouged game discs. The district court approved a stipulated dismissal with prejudice of Plaintiffs’ lawsuit and entered an order striking their class allegations, concluding that comity required deferral to an earlier class certification denial from another district court decision involving the same subject matter. The Ninth Circuit reversed, holding (1) this court had jurisdiction to hear the appeal under 28 U.S.C. 1291 because the district court’s dismissal of the action with prejudice, even when the dismissal was the product of a stipulation, was a sufficiently adverse, and thus appealable, final decision; and (2) the Court’s decision in Wolin v. Jaguar Land Rover N. Am., LLC was controlling, and the district court’s decision striking the class action allegations from the complaint contravened Wolin and was an abuse of discretion. View "Baker v. Microsoft Corp." on Justia Law

Ashley Tamas appealed a trial court order sustaining defendants Safeway, Inc. and Lucerne Foods, Inc.'s (collectively Safeway) demurrer to Tamas’ proposed class action complaint without leave to amend. In her complaint, Tamas alleged Safeway was culpable for misbranding its Lucerne brand of Greek yogurt as "yogurt" because the food’s ingredients included "milk protein concentrate" (MPC), which is not included on the list of allowable optional ingredients for "yogurt" as defined by the federal Food and Drug Administration (FDA). The trial court disagreed, concluding that MPC was an allowable ingredient in yogurt, because the restrictive regulation relied upon by Tamas had been stayed, and the FDA had informally agreed to allow the use of MPC in yogurt until the stay was resolved. The Court of Appeal affirmed: "The glacial pace at which the FDA has moved in attempting to resolve those concerns and redraft a new formal regulation did not, as Tamas seems to suggest, operate as a stealth reenactment of the stayed rule." View "Tamas v. Safeway" on Justia Law

Alleging illegal tip pooling Conners filed a collective action against her former employer (a restaurant) under the Fair Labor Standards Act, 29 U.S.C. 216(b). The employer then implemented a new arbitration policy that requires all employment-related disputes between current employees and the employer to be resolved though individual arbitration. The policy purports to bind all current employees who did not opt out; each employee received an opt-out form. Citing public policy, the district court declared the policy unenforceable insofar as it could prevent current employees from joining this collective action. On interlocutory appeal, the Eighth Circuit vacated, holding that former employees like Conners lack standing under Article III of the United States Constitution to challenge the arbitration agreement, which applied only to current employees. View "Conners v. Gusano's Chicago Style Pizzeria" on Justia Law

Plaintiff Dione Aguirre appealed an order denying class certification. Plaintiff sued defendants Amscan Holdings, Inc., and PA Acquisition, doing business as Party America (collectively, Party America) on behalf of herself and similarly situated individuals, alleging Party America violated Civil Code the Song-Beverly Credit Card Act of 1971 (Civil Code section 1747 et seq.) by routinely requesting and recording personal identification information, namely ZIP Codes, from customers using credit cards in its retail stores in California. The trial court found that plaintiff's proposed class of "[a]ll persons in California from whom Defendant requested and recorded a ZIP code in conjunction with a credit card purchase transaction from June 2, 2007 through October 13, 2010" was not an ascertainable class due to "plaintiff's inability to clearly identify, locate and notify class members through a reasonable expenditure of time and money [. . .] bars her from litigating this case as a class action." Plaintiff appealed, arguing the trial court erred in determining the class was not ascertainable based upon the finding that each individual class member was not specifically identifiable from Party America's records (and thus, notice to the class could not be directly provided to class members.) The Court of Appeal concluded that the trial court applied an erroneous legal standard in determining the proposed class was not ascertainable and erred in its conclusion. Accordingly, the Court reversed and remanded for further proceedings. View "Aguirre v. Amscan Holdings, Inc." on Justia Law