Justia Class Action Opinion Summaries

Plaintiffs filed 26 putative class actions against defendants, alleging that defendants knowingly failed to disclose the potential risk of noise-induced hearing loss associated with extended use of their wireless Bluetooth headsets at high volumes, in violation of state consumer fraud protection and unfair business practice laws. The subsequent settlement agreement provided the class $100,000 in cy pres awards and zero dollars for economic injury, while setting aside up to $800,000 for class counsel and $12,000 for the class representatives. William Brennan and other class members (Objectors) challenged the fairness and reasonableness of the settlement and appealed both the approval and fee orders, arguing that the district court abused its discretion in failing to consider whether the gross disproportion between the class award and the negotiated fee award was reasonable. The court agreed that the disparity between the value of the class recovery and class counsel's compensation raised at least an inference of unfairness, and that the current record did not adequately dispel the possibility that class counsel bargained away a benefit to the class in exchange for their own interests. Therefore, the court vacated both orders and remanded so that the district court could conduct a more searching inquiry into the fairness of the negotiated distribution of funds, as well as consider the substantive reasonableness of the attorneys' fee request in light of the degree of success attained.

Thirteen present and former female inmates of various New York state prisons appealed from the dismissal of their class action complaint brought under 42 U.S.C. 1983, seeking declaratory and injunctive relief compelling the Department of Correctional Services (DOCS) to alter its practices and procedures so as to enhance the protection of the class from sexual assault, abuse, and harassment. The complaint also asserted individual claims for damages. The dismissal was based on the grounds that some of the claims of named plaintiffs were moot and that the remaining named plaintiffs had failed to exhaust available remedies as required by the Prison Litigation Reform Act of 1995 (PLRA), 42 U.S.C. 1997e. The court held that it lacked pendant appellate jurisdiction over the damages claims. The court also held that the claims for injunctive and declaratory relief by plaintiffs who were now free but were in DOCs custody when they brought suit were not moot. The court applied a relation-back theory and determined that plaintiffs' class claims were capable of repetition, yet evading review. The court further held that three plaintiffs have exhausted applicable internal prison grievance proceedings while the remaining ten have not. Accordingly, the court vacated the judgment in part and remanded for further proceedings.

In 1991, Carpenter pled guilty to aggravated theft and bank fraud. He served jail time and was disbarred. Between 1998 and 2000, he ran a Ponzi scheme, selling investments in sham companies, promising a guaranteed return. A class action resulted in a judgment of $15,644,384 against Carpenter. Plaintiffs then sued drawee banks, alleging that they violated the UCC "properly payable rule" by paying checks plaintiffs wrote to sham corporations, and depositary banks, alleging that they violated the UCC and committed fraud by depositing checks into accounts for fraudulent companies. The district court dismissed some claims as time-barred and some for failure to state a claim. After denying class certification, the court granted defendant summary judgment on the conspiracy claim, based on release of Carpenter in earlier litigation; a jury ruled in favor of defendant on aiding and abetting. The Sixth Circuit affirmed. Claims by makers of the checks are time-barred; the "discovery" rule does not apply and would not save the claims. Ohio "Blue Sky" laws provide the limitations period for fraud claims, but those claims would also be barred by the common law limitations period. The district court retained subject matter jurisdiction to rule on other claims, following denial of class certification under the Class Action Fairness Act, 28 U.S.C. 1332(d).

Five hunters commenced this purported class action against A.L.S. Enterprises, and three of its licensees (collectively, defendants), who sell odor absorbing clothing under various brand names in retail stores and mail order catalogs, alleging that defendants violated the Minnesota Consumer Fraud Act (MCFA), Minn. Stat. 325F.69, subd. 1; the Minnesota Unlawful Trade Practices Act (MUTPA), Minn. Stat. 325D.13; and the Minnesota Uniform Deceptive Trade Practices Act (MDTPA), Minn. Stat. 325D.44, subd. 1. Defendants appealed the grant of a permanent injunction, arguing that the district court erred in its literal falsity determinations and in granting an injunction based solely on those determinations. The court held that plaintiffs failed to prove both the requisite irreparable injury and their core allegations that defendants' use of the terms "odor eliminating" and "reactivation" were literally false. Accordingly, the court directed the district court to enter an order dismissing with prejudice all claims for equitable relief. The court held, however, that plaintiffs' individual claims for damages could not be resolved on this summary judgment record. Accordingly, the court remanded for a determination of those claims applying the standards prescribed in Wiegand v. Walser Auto. Groups, Inc.

The company made and sold a toy that, when swallowed, made children seriously ill. The product was recalled and removed from store shelves. Plaintiffs, purchasers whose children were not harmed and who did not ask for a refund, challenged the adequacy of the recall and alleged violations of the Consumer Products Safety Act, 15 U.S.C. 2051–89, express and implied warranties, and state consumer-protection statutes. The district court denied class certification. The Seventh Circuit affirmed, first holding that plaintiffs' had standing, based on financial harm. There would be serious problems of class action management, apart from differences in state law. Individual notice would be impossible, making it hard for class members to opt out. No one knows who bought the kits or who used them without problems. It would be difficult to determine who would be entitled to a remedy. The per-buyer costs of identifying class members and giving notice would exceed the price of the toys. The principal effect of class certification would be to induce defendants to pay class lawyers enough to make them go away; effectual relief for consumers is unlikely.

Plaintiffs, shareholders of Ness Technologies, Inc. (Ness), moved to expedite proceedings in this putative class action, which they filed to enjoin a proposed transaction through which Ness's largest shareholder, Citi Venture Capital International (CVCI), would, through a wholly owned subsidiary, acquire Ness in a cash transaction at $7.75 per share (Proposed Transaction). Plaintiffs contended that the Proposed Transaction was the product of a flawed sales process and that the members of the Board, aided and abetted by CVCI, breached their fiduciary duties to plaintiffs and the class by approving the transaction. Plaintiffs asserted both price and process claims and claims that the Board's disclosures regarding the Proposed Transaction were inadequate. The court held that plaintiffs' Motion for Expedited Proceedings was granted only to the extent that they could take expedited, but necessarily limited and focused, discovery regarding the question of whether either the Board's or the Special Committee's financial advisors were conflicted because of their relationships with CVCI. The motion was denied in all other aspects.

Plaintiffs in this consolidated class action allege copyright infringements arising from defendant publishers' unauthorized electronic reproduction of plaintiff authors' written works. The district court certified a class for settlement purposes and approved a settlement agreement over the objection of ten class members (objectors). In this appeal, objectors challenged the propriety of the settlement's release provision, the certification of the class, and the process by which the district court reached its decisions. Although the court rejected the objectors' arguments regarding the release, the court concluded that the district court abused its discretion in certifying the class and approving the settlement because the named plaintiffs failed to adequately represent the interest of all class members. The court did not reach the procedural challenges, which were moot in light of the court's class certification holding. Therefore, the court vacated the district court's order and remanded for further proceedings.

Plaintiff claims that defendants are billing aggregators engaged in "cramming" by placing unauthorized charges on telephone bills, arranged unauthorized charges on plaintiff's telephone bill, and were responsible for unauthorized charges on the telephone bills of more than one million Indiana telephone numbers. Defendants produced evidence that plaintiff actually ordered the services in question. Plaintiff argued that the service was not legally authorized if defendants did not possess all customer authorization documentation required by the Indiana anti-cramming regulation, 170 IAC 7-1.1-19(p). That law does not provide a private right of action, but plaintiff argued that defendants' failure to comply proved unjust enrichment and provided a basis for suit under Indiana's Deceptive Commercial Solicitation Act, Ind. Code 24-5-19-9. The district court denied class certification and granted defendants' motions for summary judgment. The Seventh Circuit affirmed. The anti-cramming regulation does not apply to these defendants, which are not telephone companies and did not act in this case as billing agents for telephone companies. There was no unjust enrichment and the DCSA does not apply; plaintiff ordered and received services. Common issues do not predominate over individual issues, as required for a class under FRCP 23(b)(3).

These appeals involved two essentially identical actions filed in two different states by different groups of plaintiffs, each seeking to represent a class. The actions sought damages on the ground that plaintiffs' personal information was obtained by defendants in violation of the Driver's Privacy Protection Act (DPPA), 18 U.S.C. 2721-2725. Joining other courts which have dealt with similar claims, the court held that defendants' actions were not unlawful under the DPPA and affirmed the dismissal of the actions by the district courts.

The district court certified a class action and a proposed class in an action under the Employee Retirement Income Security Act, 29 U.S.C. 1001. The suit claimed that Blue Cross breached its fiduciary duty by imposing and failing to disclose an other-than-group subsidy and that the OTG subsidy violated Mich. Comp. Laws 550.1211(2). The state insurance commissioner took the position that state law allows the assessment and that revenue it generates funds Medigap coverage. The Sixth Circuit reversed, holding that the class action is not the superior method of adjudication (Federal Rule of Civil Procedure 23(b)(3)) and prosecuting separate actions does not present the risk of inconsistent adjudications (FRCP 23(b)(1)(A)). ERISA fiduciary status is a crucial threshold factual issue specific to every class member, requiring the court to make individualized determinations. Resolution of the legality of the subsidy before that determination would also mitigate the state's concerns about stopping collection of the fee. Potential awards at stake would not preclude individual class members from seeking relief and there was no evidence that individual litigation would create a risk of inconsistent adjudications that would establish incompatible standards of conduct for the defendant.