Justia Class Action Opinion Summaries

A group of nine individuals, representing a putative class, alleged that a credit union systematically discriminated against racial minorities in its residential mortgage lending practices. The plaintiffs varied in racial background (eight Black, one Latino), state of residence, type of loan product sought, and financial circumstances. Despite these differences, they claimed the credit union used a single, semi-automated underwriting process for all applicants, which, through its proprietary algorithm, resulted in discriminatory outcomes against minority applicants. The complaint sought both damages and injunctive relief, and proposed a class consisting of all minority applicants for mortgage-related products from 2018 to the present who faced adverse actions compared to similarly situated non-minority applicants.The United States District Court for the Eastern District of Virginia partially granted the defendant’s motion to dismiss and struck the class allegations, relying on Federal Rules of Civil Procedure 12(f) and 23(d)(1)(D). The district court focused on the diversity of the plaintiffs’ circumstances, suggesting that the variations in loan types and applicant characteristics defeated the possibility of class certification, particularly under Rule 23(b)(3).On interlocutory appeal, the United States Court of Appeals for the Fourth Circuit addressed the standards governing class certification denials at the pleading stage before discovery. The Fourth Circuit held that district courts should only deny class certification at this stage if, on the face of the complaint, the Rule 23 requirements are not met as a matter of law. The appellate court affirmed the district court’s denial of class certification under Rule 23(b)(3), finding the lack of predominance and superiority apparent from the complaint due to the differences among the plaintiffs. However, the Fourth Circuit vacated the district court’s order as to Rule 23(b)(2), concluding that the complaint sufficiently alleged commonality for classwide declaratory and injunctive relief, and that the district court acted prematurely in denying certification under that provision. View "Oliver v. Navy Federal Credit Union" on Justia Law

A Texas nonprofit health center, CentroMed, experienced a data breach in 2024 that exposed the personal information of its patients. Arturo Gonzalez, representing himself and others affected, filed a class action in Bexar County, Texas, alleging that CentroMed failed to adequately protect their private information. CentroMed, which receives federal funding and has occasionally been deemed a Public Health Service (PHS) employee under federal law, sought to remove the case to federal court, claiming removal was proper under 42 U.S.C. § 233 and 28 U.S.C. § 1442.After CentroMed was served, it notified the Department of Health and Human Services (HHS) and the United States Attorney, seeking confirmation that the data breach claims fell within the scope of PHS employee immunity. The United States Attorney appeared in state court within the required 15 days, ultimately informing the court that CentroMed was not deemed a PHS employee for the acts at issue because the claims did not arise from medical or related functions. Despite this, CentroMed removed the case to the United States District Court for the Western District of Texas 37 days after service. The district court granted Gonzalez’s motion to remand, concluding that removal was improper under both statutes: the Attorney General had timely appeared, precluding removal under § 233, and removal under § 1442 was untimely.On appeal, the United States Court of Appeals for the Fifth Circuit affirmed the district court’s remand. The Fifth Circuit held that CentroMed could not remove under § 233 because the Attorney General had timely appeared and made a case-specific negative determination. The court further held that removal under § 1442 was untimely, as CentroMed did not remove within 30 days of receiving the initial pleading. Thus, the remand to state court was affirmed. View "Gonzalez v. El Centro Del Barrio" on Justia Law

Andrew Sangster, on behalf of a class of flight instructors, filed suit against the University of North Dakota alleging that instructors were not paid for all hours worked. Sangster claimed the university compensated instructors only for student contact hours and excluded other work-related tasks such as scheduling, pre- and post-flight procedures, recordkeeping, and waiting at the airport. He sought damages for violations of the Fair Labor Standards Act (FLSA), North Dakota wage laws, unjust enrichment, and conversion.The District Court for Cass County reviewed the university’s motion to dismiss, which argued the court lacked jurisdiction because Sangster failed to give timely notice to the Office of Management and Budget as required by North Dakota law. Sangster admitted he had not provided this notice but contended his claims were contractual and thus exempt from the notice requirement. The district court denied the motion to dismiss with respect to the FLSA, state wage law, and unjust enrichment claims, finding them contractual in nature. The conversion claim was dismissed because Sangster conceded the notice requirement applied.The Supreme Court of the State of North Dakota subsequently reviewed the district court’s decision upon the University’s petition for a supervisory writ. The Supreme Court exercised its discretionary supervisory jurisdiction, holding that Sangster’s claims for relief under the FLSA, North Dakota wage laws, and unjust enrichment were not contractual in nature and therefore not authorized by N.D.C.C. ch. 32-12. The Supreme Court concluded that because Sangster had not complied with the statutory notice requirements for noncontractual claims, the district court lacked subject matter jurisdiction. The court granted the supervisory writ and directed the district court to dismiss Sangster’s case for lack of jurisdiction. View "UND v. Whelan" on Justia Law

Janet Duke, after retiring from Luxottica U.S. Holdings Corp., elected to receive pension benefits through a joint and survivor annuity (JSA), calculated using actuarial assumptions set by her employer’s defined benefit pension plan. Duke alleged that her plan used outdated assumptions—specifically, a 7% interest rate and life expectancy tables from 1971—to convert single life annuities (SLA) into JSA benefits, resulting in lower monthly payments for her and similarly situated retirees. She claimed this systematic practice violated ERISA’s requirements for actuarial equivalence and compliance, thereby potentially harming the plan’s participants and the plan itself.In the United States District Court for the Eastern District of New York, Duke filed a putative class action seeking relief under ERISA Sections 502(a)(2) and 502(a)(3), including plan reformation and monetary repayments to the plan. The district court initially found Duke lacked standing for Section 502(a)(2) claims but later reversed itself and held that she did have standing for both plan reformation and monetary payments. The court compelled individual arbitration of her Section 502(a)(3) claims under a dispute resolution agreement but held that the “effective vindication” doctrine prevented mandatory arbitration of her Section 502(a)(2) claims. Defendants’ motion for a mandatory stay of litigation pending arbitration was denied.The United States Court of Appeals for the Second Circuit reviewed the district court’s rulings. It held that Duke has Article III standing to pursue plan reformation under Section 502(a)(2) because her alleged injury—reduced benefits due to outdated assumptions—could be redressed by reformation of the plan. However, Duke lacks standing to seek monetary payments to the plan, as such relief would not redress any personal injury she suffered. The Second Circuit also held that the effective vindication doctrine precludes mandatory individual arbitration of her Section 502(a)(2) claim and affirmed the district court’s discretionary denial of a mandatory stay. The order was affirmed in part and reversed in part. View "Duke v. Luxottica U.S. Holdings Corp." on Justia Law

A group of former and current employees of a staffing agency alleged that the company misclassified recruiters as exempt from state overtime laws and failed to provide required meal and rest breaks. After the employees filed a putative class action in state court, which the company removed to federal court, the parties engaged in over a year of discovery and completed class certification briefing. Shortly after class certification briefing closed, the company implemented a new, mandatory arbitration agreement for internal employees, including the putative class members. This agreement required class members to either quit their jobs or affirmatively opt out of arbitration if they wished to remain in the class, effectively reversing the typical opt-out structure of class actions under Federal Rule of Civil Procedure 23.The United States District Court for the Northern District of California granted class certification and, after reviewing the company’s communications about the new arbitration agreement, found them misleading and potentially coercive. The court determined that the communications disparaged class actions, omitted key information, and confused recipients about their rights and deadlines, especially as the emails were sent during a holiday period. Consequently, when the company moved to compel arbitration against class members who had not opted out, the district court denied the motion, relying on its authority under FRCP 23(d) to ensure the fairness of class proceedings.On appeal, the United States Court of Appeals for the Ninth Circuit affirmed the district court’s decision. The Ninth Circuit held that district courts have broad authority under FRCP 23(d) to refuse to enforce arbitration agreements when a defendant’s conduct undermines the fairness of the class action process, especially where communications are misleading and subvert the opt-out mechanism. The court also held that the arbitration agreement’s delegation provision did not prevent the district court from ruling on enforceability in this context. View "AVERY V. TEKSYSTEMS, INC." on Justia Law

An individual seeking to refinance his mortgage visited a website that offers mortgage information and referrals to affiliated lenders. During three separate visits, he entered personal information and clicked buttons labeled “Calculate” or “Calculate your FREE results.” Immediately below these buttons, the website displayed language in small font stating that clicking would constitute consent to the site’s Terms of Use, which included a mandatory arbitration provision and permission to be contacted by the site or affiliates. The Terms of Use were accessible via a hyperlinked phrase. After using the site, the individual was matched with a particular lender but did not pursue refinancing. Later, he received multiple unwanted calls from the lender and filed a class-action lawsuit under the Telephone Consumer Protection Act, alleging violations such as calling numbers on the Do Not Call registry.The United States District Court for the Eastern District of Michigan initially dismissed the complaint on the merits and denied the lender’s motion to compel arbitration as moot. Upon realizing the arbitration issue should have been decided first, the court reopened the case but found no enforceable agreement to arbitrate existed, denying the motion to compel arbitration. The court also denied reconsideration and allowed the plaintiff to amend his complaint. The lender appealed the denial of arbitration.The United States Court of Appeals for the Sixth Circuit reviewed the denial de novo. It held that, under California law, the website provided reasonably conspicuous notice that clicking the buttons would signify assent to the Terms of Use, including arbitration. The court found that the plaintiff’s conduct objectively manifested acceptance of the offer, forming a binding arbitration agreement. The court also concluded that the agreement was not invalid due to unspecified procedural details and that questions of arbitrability were delegated to the arbitrator. The Sixth Circuit reversed the district court’s decision and remanded for further proceedings. View "Dahdah v. Rocket Mortgage, LLC" on Justia Law

A group of oil-and-gas royalty owners in Oklahoma, represented by Chieftain Royalty Company, sued EnerVest Energy’s predecessor in 2011 for allegedly underpaying royalties. After EnerVest acquired the wells, the parties reached a $52 million settlement in 2015 to be paid to the class after expenses and attorneys’ fees. Class counsel sought 40% of the fund as fees, plus expenses and an incentive award for the class representative. Two class members objected to the fee and incentive awards.The United States District Court for the Western District of Oklahoma approved the settlement, awarding 33.33% of the fund for attorneys’ fees and a 0.5% incentive award. On appeal, the United States Court of Appeals for the Tenth Circuit affirmed the settlement but reversed the fee and incentive awards, holding that Oklahoma law applied and required a lodestar analysis (not solely a percentage-of-the-fund), and that incentive awards must be based on time spent on case-related services. Following remand and a clarifying decision from the Oklahoma Supreme Court in Strack v. Continental Resources, Inc., the district court reapplied the statutory factors, found a 33.33% fee reasonable (supported by a 2.15 lodestar multiplier), and adjusted the incentive award based on the representative’s service. A subsequent Tenth Circuit appeal led to vacatur of the fee award on procedural notice grounds, then the district court reinstated the same fee after proper notice.On this third appeal, the United States Court of Appeals for the Tenth Circuit held that Oklahoma law does not impose a hard ceiling on percentage fees or lodestar multipliers. The district court properly applied Oklahoma’s statutory factors, conducted a thorough reasonableness analysis, and did not abuse its discretion by awarding 33.33% of the fund ($17,333,333.33) as attorneys’ fees. The fee award was affirmed. View "Chieftain Royalty Company v. Enervest Energy Institutional Fund XIII-A" on Justia Law

A group of former employees at a luxury hotel in Lenox, Massachusetts brought a series of lawsuits against the hotel and its operators, alleging violations of the Fair Labor Standards Act (FLSA) and Massachusetts wage laws. The claims primarily involved misclassification as overtime-exempt, failure to pay minimum wage, mismanagement of tip pools, and other wage-related violations. One plaintiff, after successfully certifying a class of similarly situated employees, joined with others to negotiate a global settlement with the hotel’s owners.Prior to this appeal, the United States District Court for the District of Massachusetts, acting through a magistrate judge, oversaw the coordinated settlement negotiations for four related cases—three individual actions and one class action. After the parties agreed to a global settlement via email, defense counsel confirmed the deal and the court was notified. The individual cases were subsequently dismissed with prejudice. When obstacles arose regarding finalization, including Wheatleigh’s concerns over attorney fees and purported conflicts of interest for class counsel, plaintiffs moved to enforce the settlement. The district court granted the motion, enforced the settlement, and later granted preliminary and then final approval of the class-action settlement, including approval of attorney fees, expenses, and a service award.The United States Court of Appeals for the First Circuit reviewed Wheatleigh’s appeal, which challenged the district court’s rulings on standing, enforcement and approval of the settlement, class certification, and attorney fees. The First Circuit held that the district court did not err in finding Article III standing for the named plaintiff, enforcing the global settlement, approving the class-action settlement despite alleged conflicts of counsel, maintaining class certification, and awarding attorney fees. The First Circuit affirmed the judgment of the district court. View "Mongue v. The Wheatleigh Corporation" on Justia Law

Under Armour, a publicly traded sports apparel company, faced significant legal claims and government investigations over its financial forecasts and accounting practices following the bankruptcy of a major customer, Sports Authority, in 2016. Shareholders alleged that Under Armour made misleading public statements about its financial prospects and that company insiders sold stock at inflated prices. These allegations led to a federal securities class action, derivative demands, and eventually an SEC investigation into whether Under Armour manipulated its accounting by pulling forward revenue to maintain the appearance of strong growth.In the United States District Court for the District of Maryland, Under Armour’s insurers sought a declaratory judgment, arguing that the securities litigation, derivative actions, and government investigations constituted a single claim under the terms of Under Armour’s directors and officers insurance policies and therefore were subject only to the coverage limit of the earlier policy period. Under Armour countered that the government investigations were a separate claim, entitling it to an additional $100 million in coverage under a subsequent policy. The district court sided with Under Armour, finding that the government investigations and the earlier shareholder claims were not sufficiently related to constitute a single claim under the policy’s language.The United States Court of Appeals for the Fourth Circuit reviewed the district court’s decision de novo. The Fourth Circuit held that, under the plain meaning of the 2017–2018 insurance policy’s “single claims” provision, the claims related to Under Armour’s public financial statements and its accounting practices were “logically or causally related” and thus constituted a single claim. As a result, only the coverage limits from the earlier, 2016–2017 policy period applied. The Fourth Circuit reversed the district court’s judgment in favor of Under Armour. View "Navigators Insurance Co. v. Under Armour, Inc." on Justia Law

Several individuals who were employed by the City and County of San Francisco and were at least 40 years old when hired brought a class action lawsuit alleging that the City’s method for calculating disability retirement benefits under its retirement system discriminated against employees based on age. The system employs two formulas; Formula 1 is used if it yields a benefit exceeding a percentage threshold, while Formula 2 is used if the threshold is not met. Plaintiffs argued that Formula 2, which imputes years of service until age 60, resulted in lower benefits for those who entered the retirement system at age 40 or older, in violation of the California Fair Employment and Housing Act (FEHA).After initial proceedings in the San Francisco City and County Superior Court—including a demurrer sustained on statute of limitations grounds and subsequent reversal by the Court of Appeal—the plaintiffs filed an amended complaint asserting FEHA claims for disparate treatment and disparate impact, as well as claims for declaratory relief, breach of contract, and equal protection violations. The trial court certified a class and denied summary judgment due to triable issues of fact. A bench trial followed, where both parties presented expert testimony on whether Formula 2 disparately impacted older employees.The Court of Appeal of the State of California, First Appellate District, Division Four, reviewed the trial court’s findings. It affirmed the judgment, holding that plaintiffs failed to prove intentional age discrimination or disparate impact under FEHA. The court found that Formula 2 was motivated by pension status and credited years of service, not by age, and that plaintiffs’ evidence was insufficient as it was based on hypothetical calculations rather than actual data. The trial court’s denial of plaintiffs’ request to amend their complaint after trial was also upheld, as any alleged error was not reversible on the record. The judgment in favor of the City was affirmed. View "Carroll v. City and County of San Francisco" on Justia Law