Justia Class Action Opinion Summaries

Plaintiffs, former customers of Sterling Foster, for which Bear Stearns, as a clearing broker, performed certain settlement and record-keeping functions, alleged that Bear Stearns violated section 10(b) of the Securities Exchange Act of 1934, 15 U.S.C. 78j(b), by participating in Sterling Foster's market manipulation scheme. Bear Stearns pursued this interlocutory appeal from a decision and order of the district court granting in part and denying in part plaintiffs' motion for certification of a class pursuant to Rule 23(b)(3). The court concluded that plaintiffs' allegations failed to trigger a duty of disclosure to Sterling Foster's clients such that the Affiliated Ute Citizens of Utah v. United States presumption of reliance applied. Therefore, plaintiffs failed to satisfy Rule 23(b)(3)'s predominance requirement. Accordingly, the court reversed the judgment of the district court. View "Levitt v. J.P. Morgan Securities, Inc." on Justia Law

Tennessee participates in Medicaid through “TennCare,” Tenn. Code 71-5-102. The Medicaid Act requires that TennCare administer an Early and Periodic Screening, Diagnosis, and Treatment program for all enrollees under age 21, 42 U.S.C. 1396a(a)(43), 1396d(r) and must provide outreach to educate its enrollees about these services. In 1998 plaintiffs filed a putative class action under 42 U.S.C. 1983, alleging that TennCare had failed to fulfill these obligations. The district court entered a consent decree that explained in detail the requirements that TennCare had to meet to “achieve and maintain compliance” with the Medicaid Act, based on the assumption that the Act created rights enforceable under section 1983. Eight years later, the Sixth Circuit held that one part of the Medicaid Act was unenforceable under section 1983. Following a remand, the district court vacated paragraphs of the decree that were based on parts of the Act that are not privately enforceable. After a thorough review of TennCare’s efforts, the court then vacated the entire decree, finding that TennCare had fulfilled the terms of the decree’s sunset clause by reaching a screening percentage greater than 80% and by achieving current, substantial compliance with the rest of the decree. The Sixth Circuit affirmed. View "John B. v.Emkes" on Justia Law

Plaintiff left his senior position in 1996, having participated in the Retirement Income Security Plan for Employees (RISPE), a tax-qualified defined benefits plan that guarantees specified retirement benefits, and in the Excess Benefit Plan, a defined unfunded benefits pension plan under which benefits are paid directly by the employer rather than by a trust funded by the employer. Both plans allowed him to choose between an annuity and an actuarial equivalent lump sum distribution. In 2009 he received his RISPE lump sum, $325,054.28 and his Excess Plan lump sum, $218,726.38. The discount rate used to calculate lump sum RISPE benefits was a “segment rate,” 26 U.S.C. 417(e)(3)(C), of 5.24 percent. The discount rate applied to the Excess Plan lump sum was 7.5 percent. The district court rejected his ERISA claim that the discount rate required by both plans was a rate computed by the Pension Benefit Guaranty Corporation on the basis of annuity premiums charged by insurance companies. The Seventh Circuit affirmed. With respect to the RISPE, the accrued benefit, which cannot be reduced retroactively, is the annuity; the lump sum is not the accrued benefit and can be reduced retroactively. The court rejected a conflict-of-interest argument concerning calculation of the Excess Benefit Plan discount rate. View "Dennison v. MONY Life Ret. Income Sec. Plan for Emps." on Justia Law

Plaintiffs, thirteenth North Carolina residents who lost access to in-home personal care services (PCS) due to a statutory change, brought suit challenging the new PCS program. The district court granted plaintiffs' motions for a preliminary injunction and class certification. Defendants appealed, raising several points of error. The court agreed with the district court's conclusion that a preliminary injunction was appropriate in this case. The court held, however, that the district court's order failed to comply with Federal Rule of Civil Procedure 65 because it lacked specificity and because the district court neglected to address the issue of security. Accordingly, the court remanded the case. View "Pashby v. Delia" on Justia Law

Plaintiffs in this consolidated action sought relief on behalf of two large putative classes - one whose members bought auction rate securities and one whose members issued them - alleging that defendants triggered the market's collapse by conspiring with each other to simultaneously stop buying auction rate securities for their own proprietary accounts. The district court dismissed plaintiffs' complaints pursuant to Rule 12(b)(6). The court affirmed, holding that plaintiffs' complaints did not successfully allege a violation of Section 1 of the Sherman Act, 15 U.S.C. 1. Although the court did not reach the district court's implied-repeal analysis under Credit Suisse Securities (USC) LLC v. Billing, the district court was ultimately correct that the complaints failed to state a claim upon which relief could be granted. View "Mayor and City Council of Baltimore v. Citigroup, Inc." on Justia Law

Plaintiff appealed the district court's dismissal of its complaint for failure to state a claim. At issue was whether plaintiff had stated plausible claims under sections 11 and 12(a)(2) of the Securities Act of 1933, 15 U.S.C. 77a et seq. The court held that allegations in the complaint stated a plausible claim that the offering documents for the security misstated the applicable underwriting standards in violation of sections 11, 12(a)(2), and 15. The court also held that the alleged misstatements were not immaterial as a matter of law. Finally, the court vacated the district court's holding that plaintiff, even as the representative of a proposed class, lacked standing to pursue claims based on securities in which it had not invested. Rather than addressing this issue, the court instructed the district court to reconsider it in light of the court's intervening opinion in NECA-IBEW Health & Welfare Fund v. Goldman Sachs & Co. Accordingly, the court reversed in part, vacated in part, and remanded for further proceedings. View "New Jersey Carpenters Health Fund v. The Royal Bank of Scotland" on Justia Law

Plaintiffs, on behalf of a purported class of similarly situated employees, appealed from the district court's dismissal of their claims under the Fair Labor Standards Act (FLSA), 29 U.S.C. 201 et seq., the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. 1961-1968, and the New York Labor Law (NYLL), NYLL 663(1). Plaintiffs alleged that CHS failed to compensate them adequately for time worked during meal breaks, before and after scheduled shifts, and during required training sessions. The court affirmed the dismissal of the FLSA and RICO claims for failure to state a claim. The court affirmed the dismissal of the NYLL overtime claims, which have the same deficiencies as the FLSA overtime claims. However, because the district court did not explain why plaintiffs' NYLL gap-time claims were dismissed with prejudice, the court vacated that aspect of the judgment and remanded for further consideration. View "Lundy v. Catholic Health System of Long Island Inc." on Justia Law

Southfield appealed the dismissal of its consolidated class-action securities fraud complaint against St. Joe and St. Joe's current and former officers for alleged violations of sections 10(b) and 20(a) of the Securities Exchange Act of 1934, 15 U.S.C. 78j(b), 78t(a), and Securities and Exchange Commission (SEC) Rule 10b-5, 17 C.F.R. 240.10b-5. Southfield argued that the district court erred in holding that they failed to adequately plead loss causation, actionable misrepresentation, or scienter, and also by denying their post-judgment motion to alter or amend. The court held that the complaint as framed by Southfield failed to adequately allege loss causation and the district court was therefore correct to dismiss Southfield's complaint for failure to state a claim. Accordingly, the court affirmed the judgment. View "City of Southfield Fire & Police Retirement System v. Greene, et al" on Justia Law

To recover damages in a private securities-fraud action under section 10(b) of the Securities Exchange Act of 1934 and Securities and Exchange Commission Rule 10b–5, a plaintiff must prove reliance on a material misrepresentation or omission made by the defendant. The Supreme Court has endorsed a “fraud-on-the-market” theory, which permits plaintiffs to invoke a rebuttable presumption of reliance on public, material misrepresentations regarding securities traded in an efficient market. The theory facilitates the certification of securities-fraud class actions by permitting reliance to be proved on a class-wide basis. Connecticut Retirement sought FRCP 23(b)(3) certification of a securities-fraud class action against a biotechnology company (Amgen). The district court certified the class. The Ninth Circuit affirmed, rejecting an argument that Connecticut Retirement was required to prove materiality before class certification under Rule23(b)(3)’s requirement that “questions of law or fact common to class members predominate over any questions affecting only individual members.” The Supreme Court affirmed. Proof of materiality is not a prerequisite to certification of a securities-fraud class action. Materiality is judged by an objective standard and can be proved through evidence common to the class. Failure of proof of materiality would not result in individual questions predominating, but would end the case. A requirement that putative class representatives establish that they executed trades “between the time the misrepresentations were made and the time the truth was r¬vealed” relates primarily to typicality and adequacy of representation, not to the predominance inquiry. The Court rejected Amgen’s argument that, because of pressure to settle, materiality may never be addressed by a court if it is not evaluated at the class-certification stage. The potential immateriality of Amgen’s alleged misrepresentations and omissions was no barrier to finding that common questions predominate. View "Amgen Inc. v. CT Ret. Plans & Trust Funds" on Justia Law

Plaintiffs and defendants obtained class certification and settlement approval for a nationwide class action involving three related lawsuits, alleging violations of the Fair Debt Collection Practices Act, 15 U.S.C. 1692-1692p and state law, based on the practice of “robo-signing” affidavits in debt collections. Eight individuals objected. The Sixth Circuit reversed, holding that the disparity in the relief afforded under the settlement to the named plaintiffs (exoneration of debts, $2000, and prospective injunctive relief) and the unnamed class members ($17 and prospective injunctive relief) made the settlement unfair. The class notice was inadequate and, although the class satisfies four of the six certification requirements (numerosity, commonality, typicality and predominance), the representation is not adequate under Rule 23(a) nor is the class action vehicle superior. View "Vassalle v. Midland Funding LLC" on Justia Law