Justia Class Action Opinion Summaries

The law firm of Leeds, Morelli & Brown, representing 587 plaintiffs with discrimination claims against their employer, Nextel Communications, agreed with Nextel to set up a dispute resolution process whereby all of the plaintiffs’ claims against Nextel would be resolved without litigation. After most of the cases were settled through that process, a group of Nextel employees sued on behalf of the entire class of the firm’s Nextel clients against both the law firm and Nextel, alleging breach of fiduciary duty, legal malpractice, and breach of contract. The Second Circuit vacated dismissal of the case. On remand the district court certified a class under FRCP(b)(3), applying New York law to all of the class members’ claims, even though the class members came from 27 different states, and holding that common issues predominated over any individual issues, even though prior state court litigation indicated that for Colorado class members, individual waivers of the law firm’s conflict of interest could have vitiated defendants’ liability. The Second Circuit vacated: the district court erred in its choice‐of‐law analysis, and a proper analysis makes clear that the individual issues in this case will overwhelm common issues. View "Johnson v. Nextel Communications Inc." on Justia Law

The district court certified a nationwide class action, alleging that Nestlé and Waggin’ Train sold dog treats that injured the dogs. The parties reached a settlement, to which the district court has given tentative approval pending a fairness hearing under Fed. R. Civ. P. 23(e). That hearing is scheduled for June 23, 2015. The order tentatively approving the settlement enjoins all class members from prosecuting litigation about the dog treats in any other forum. One case affected by this injunction has been pending for two years in Missouri, and was certified as a statewide class action before the federal suit was certified as a national class action. Curts, the certified representative of the Missouri class, intervened to protest the injunction, citing 28 U.S.C. 2283, the AntiInjunction Act. The Seventh Circuit stayed the injunction, noting that the district judge did not explain why he entered the injunction. Fed. R. Civ. P. 65(d)(1)(A) provides that every order issuing an injunction must “state the reasons why it issued.” An injunction that halts state litigation is permissible only if it satisfies section 2283 in addition to the traditional factors. The district judge was silent about everything that matters. View "Adkins v. Nestle Purina PetCare Co." on Justia Law

In connection with a 1998 nationwide, securities-fraud class action initiated against MedPartners, Inc., a physician-practice-management/pharmacy-benefits-management corporation and the predecessor in interest to CVS Caremark Corporation, the Jefferson Circuit Court certified a class that included the plaintiffs in this case. Based on the alleged financial distress and limited insurance resources of MedPartners, the 1998 litigation was concluded in 1999 by means of a negotiated "global settlement," pursuant to which the claims of all class members were settled for an amount that purportedly exhausted its available insurance coverage. Based on representations of counsel that MedPartners lacked the financial means to pay any judgment in excess of the negotiated settlement and that the settlement amount was thus the best potential recovery for the class, the trial court, after a hearing, approved the settlement and entered a judgment in accordance therewith. Thereafter, MedPartners (now Caremark) allegedly disclosed, in unrelated litigation, that it had actually obtained (and thus had available during the 1998 litigation) an excess-insurance policy providing alleged "unlimited coverage" with regard to its potential-damages exposure in the 1998 litigation. In 2003, John Lauriello, seeking to be named as class representative, again sued Caremark and insurers American International Group, Inc.; National Union Fire Insurance Company of Pittsburgh, PA; AIG Technical Services, Inc.; and American International Specialty Lines Insurance Company in the Jefferson Circuit Court, pursuant to a class-action complaint alleging misrepresentation and suppression, specifically, that Caremark and the insurers had misrepresented the amount of insurance coverage available to settle the 1998 litigation and that they also had suppressed the existence of the purportedly unlimited excess policy. In case no. 1120010, Caremark and the insurers appealed the circuit court's order certifying as a class action the fraud claims asserted by Lauriello, James Finney, Jr.; Sam Johnson; and the City of Birmingham Retirement and Relief System. In case no. 1120114, the plaintiffs cross-appealed the same class-certification order, alleging that, though class treatment was appropriate, the trial court erred in certifying the class as an "opt-out" class pursuant to Rule 23(b)(3), Ala. R. Civ. P., rather than a "mandatory" class pursuant to Rule 23(b)(1), Ala. R. Civ. P. Finding no reversible error, the Supreme Court affirmed the circuit court in both cases. View "CVS Caremark Corporation et al. v. Lauriello et al." on Justia Law

A class of Netflix DVD subscribers filed a consolidated amended class action against Netflix and Walmart, claiming that a promotion agreement whereby Walmart transferred its online DVD-rental subscribers to Netflix and Netflix agreed to promote Walmart’s DVD sales business was anti-competitive. The district court approved of a settlement between Walmart and the class of Netflix subscribers whereby Walmart agreed to pay a total amount of $27,250,000. The Ninth Circuit affirmed, holding that the district court did not err in (1) approving the settlement as fair, reasonable, and adequate; (2) certifying the settlement class; and (3) awarding attorneys’ fees of twenty-five percent of the overall settlement fund. View "Frank v. Netflix, Inc." on Justia Law

Plaintiffs, individuals representing a class of Netflix subscribers, contended that a promotion agreement whereby Walmart transferred its online DVD-rental subscribers to Netflix and Netflix agreed to promote Walmart’s DVD sales business violated the Sherman Act by illegally allocating and monopolizing the online DVD rental market. The district court granted summary judgment for Netflix and awarded Netflix $710,194 in costs. The Ninth Circuit (1) affirmed the district court’s summary judgment, holding that Plaintiffs did not raise a triable issue of fact as to whether they suffered antitrust in-jury-in-fact on a theory that they paid supracompetitive prices for their DVD-rental subscriptions because Netflix would have reduced its subscription price but for its allegedly anticompetitive product; and (2) affirmed in part and reversed in part the award of costs, holding that certain charges for “data upload” and “keywording” were not recoverable as costs for making copies under 28 U.S.C. 1920(4). Remanded for consideration of whether costs were properly awarded for “professional services.” View "Resnick v. Netflix, Inc." on Justia Law

Eva Mies sought class action certification in order to sue her former employer, Sephora U.S.A., Inc. (Sephora), on behalf of employees who, like her, worked as "Specialists" in Sephora’s California retail stores. Mies claims Sephora misclassified Specialists as exempt from certain provisions of California labor law and, as a result, failed to pay overtime wages and failed to compensate them for missed meal periods. However, after crediting evidence that all Specialists did not engage in the same tasks to the same extent, the trial court denied class certification, concluding individualized issues, not common ones, would predominate the determination of liability. After review, the Court of Appeal concluded the trial court used proper legal criteria in assessing class certification and substantial evidence supported the trial court’s findings. The Court also conclude the court did not abuse its discretion in denying class certification. View "Mies v. Sephora U.S.A." on Justia Law

Plaintiffs filed a class action complaint against Philip Morris Companies Inc. and Philip Morris Inc., alleging that Philip Morris violated the Arkansas Deceptive Trade Practices Act (ADTPA) by falsely advertising that its Marlboro Lights cigarettes were safer and contained less tar and nicotine than other cigarettes. The circuit court certified Plaintiffs’ class action, concluding that common issues among all class members predominated over any individual issues and that a class action was a superior method of resolving the claim. The Supreme Court affirmed the circuit court’s order certifying the class, holding that the circuit court did not abuse its discretion in certifying the class, as common issues predominated, a class action was a superior method of adjudication, and the class was ascertainable. View "Philip Morris Cos., Inc. v. Miner" on Justia Law

Franco filed a purported class action as an employee of Athens Services, claiming Labor Code and wage-order violations. He also sued in a representative capacity under the Private Attorneys General Act (Lab. Code 2698) and alleged violation of state unfair competition law. (Bus. & Prof. Code 17200). Athens petitioned to compel arbitration based on Franco’s employment agreement, alleging that it was engaged in interstate commerce under the Federal Arbitration Act (9 U.S.C. 1-16). The trial court agreed. The appeal court concluded that provisions requiring arbitration and waiving class actions were unenforceable. On remand, Athens informed the court that Franco’s actual employer was Arakelian. Franco amended the complaint to add Arakelian, which filed another petition to compel arbitration, arguing that authorities cited by the prior decision had been overruled by the U.S. Supreme Court in 2010. The trial court denied the petition, citing the law of the case doctrine and finding that Arakelian waived its right to compel arbitration by failing to earlier identify itself as Franco’s true employer. The court of appeal affirmed. The California Supreme Court vacated. The court of appeal reversed denial of the petition to compel arbitration, in light of the rule announced by the California Supreme Court in Iskanian. View "Franco v. Arakelian Enters., Inc." on Justia Law

Time Warner Cable buys content from programmers, who require it to offer their channels as part of TW’s enhanced basic cable programming tier. TW paid the Lakers $3 billion for licensing rights to televise Lakers games for 20 years. Subscription rates rose by $5 a month as result. TW paid the Dodgers $8 billion for the licensing rights to televise games for 25 years, raising monthly rates by another $4. Subscribers filed a class action lawsuit, alleging that the arrangement violated the unfair competition law (Bus. & Prof. Code 17200) because: acquisition of licensing rights to the games made TW both programmer and distributor; surveys showed that more than 60 percent of the population would not pay separately to watch the games; there were no valid reasons for bundling sports stations into the enhanced basic cable tier instead of offering them separately; TW expanded the reach of this scheme by selling its rights to the games to other providers, requiring those providers to include the channels as part of their enhanced basic tiers; and the teams knew the increased costs would be passed on to unwilling subscribers and were intended beneficiaries of these arrangements. The court of appeal affirmed dismissal: regulations implementing federal communications statutes expressly preempt the suit. View "Fischer v. Time Warner Cable Inc." on Justia Law

Baldwin Mutual Insurance Company appealed a circuit court order certifying the action filed against it by Gloria McCain as a class action. McCain owned a house in Montgomery on which she held a homeowner's insurance policy issued by Baldwin Mutual. That policy provided that any covered property losses would be settled "at actual cash value at the time of loss but not exceeding the amount necessary to repair or replace the damaged property." In July 2005, McCain's house was damaged as the result of a windstorm. She filed a claim with Baldwin Mutual, and Baldwin Mutual thereafter retained an independent adjuster to examine McCain's damaged property and to prepare an estimate to repair the damage. Baldwin Mutual paid McCain's claim in accordance with the estimate prepared by the adjuster. Pursuant to a work-authorization form signed by McCain, Baldwin Mutual paid the funds directly to McCain's contractor. In June 2006, McCain filed another claim after her house suffered damage as a result of a lightning strike. After the same adjuster prepared an estimate, Baldwin Mutual paid the new claim in accordance with the adjuster's estimate. The genesis of the claims underlying this suit was that Baldwin Mutual had wrongfully been reducing the amount paid on claims made on actual-cash-value polices inasmuch as its practice was to deduct some amount for depreciation not only of the damaged materials and the labor costs of initially installing those damaged materials (based on their condition prior to the covered damage and their expected life span), but also of the labor costs associated with the removal of the damaged materials. It was improper and impossible to depreciate those labor costs, McCain argued, because they had not previously been incurred at some defined time in the past; rather, they were being incurred at the time of the current repair. Noting that hundreds or thousands of Baldwin Mutual policyholders were likely negatively affected by Baldwin Mutual's practices in this regard, McCain sought class action certification of her claims. The Alabama Supreme Court reversed the class certification, finding that the trial court here exceeded its discretion with a definition proposed by McCain without giving Baldwin Mutual the opportunity to oppose the certification of the proposed class at a hearing conducted for that purpose pursuant to statute. The case was remanded for further proceedings. View "Baldwin Mutual Ins. Co. v. McCain" on Justia Law