Justia Class Action Opinion Summaries

Several individuals alleged that Google collected and misused the private browsing data of Chrome users who utilized Incognito mode, despite Google’s representations about the privacy of this feature. In June 2020, five plaintiffs brought a putative class action on behalf of these users, seeking both injunctive relief and damages. After extensive discovery, the United States District Court for the Northern District of California certified a class for injunctive relief but denied certification for a damages class, finding the plaintiffs had not shown that common issues predominated over individual ones.Following the denial of damages class certification, the named plaintiffs sought review in the United States Court of Appeals for the Ninth Circuit under Rule 23(f), but the petition was denied. The case proceeded, and as trial approached, the parties settled: Google agreed to change its policies, the named plaintiffs would arbitrate their individual damages claims, and they waived their rights to appeal the denial of damages class certification. The settlement explicitly stated that absent class members were not releasing damages claims or appellate rights. Several months after the settlement, a group of 185 Chrome users, referred to as the Salcido plaintiffs, moved to intervene to preserve absent class members’ appellate rights regarding damages.The United States Court of Appeals for the Ninth Circuit reviewed the district court’s denial of the intervention motion. The Ninth Circuit held that the district court did not abuse its discretion in finding the intervention motion untimely. Applying the circuit’s traditional three-part test for intervention—considering the stage of the proceedings, prejudice to other parties, and the reason for and length of delay—the court found that intervention at this late stage would prejudice the existing parties, that the delay was unjustified, and that the timing weighed against intervention. The denial of the motion to intervene was therefore affirmed. View "BROWN V. SALCIDO" on Justia Law

A financial advisory employee of a large securities firm participated in a compensation program called the WealthChoice Awards, which provided annual contingent cash awards to select high-performing advisors. To earn these awards, an advisor had to meet certain revenue thresholds and remain employed at the company for eight years after the award was granted. A notional, unfunded account tracked a benchmark investment, but no funds were set aside for the advisor during the vesting period. If the advisor left the company before vesting, the award was typically forfeited. After vesting, payment was mandatory and made promptly, usually while the advisor was still employed. The stated purpose of the program was to incentivize retention and productivity, not to provide retirement income.After voluntarily resigning and forfeiting unvested awards, the employee filed a putative class action in the United States District Court for the Western District of North Carolina. He alleged that the WealthChoice Awards program was an “employee pension benefit plan” under the Employee Retirement Income Security Act of 1974 (ERISA), and that it violated ERISA’s vesting and anti-forfeiture rules. The district court granted summary judgment to the employer, finding that the program was a bonus plan exempt from ERISA.On appeal, the United States Court of Appeals for the Fourth Circuit reviewed the district court’s grant of summary judgment de novo. The Fourth Circuit held that the WealthChoice Awards program is a bonus payment plan and not an ERISA-covered pension benefit plan. The court reasoned that the program’s primary purpose was to enhance retention and productivity, eligibility was limited, the awards were not funded with deferred employee income, and payment was not systematically deferred until employment termination or retirement. The judgment of the district court was affirmed. View "Milligan v. Merrill Lynch, Pierce, Fenner & Smith, Inc." on Justia Law

A police officer employed by the Metropolitan Police Department experienced a data breach that exposed sensitive information of numerous employees. In response, the officer filed a putative class action in Superior Court for the District of Columbia, naming the District, certain government entities, and several private technology contractors as defendants. The complaint alleged that the defendants failed to safeguard employees’ data.During the proceedings, the plaintiff voluntarily dismissed certain contractor defendants without prejudice, leaving the government defendants and a few contractors. The Superior Court of the District of Columbia granted the District’s motion to dismiss, ruling that the Metropolitan Police Department and the Office of the Chief Technology Officer could not be sued as unincorporated government bodies, and that sovereign immunity barred the claims against the District. The plaintiff’s motion for reconsideration was denied. Subsequently, the plaintiff voluntarily dismissed without prejudice the remaining private contractor defendants and asked the Superior Court to close the case. The Superior Court closed the case, prompting the plaintiff to appeal both the dismissal of her claims against the District and the denial of reconsideration.The District of Columbia Court of Appeals reviewed the case. It held that because the plaintiff dismissed her claims against the final contractor defendants without prejudice, the trial court’s order was not final as to all parties and claims. The court explained that dismissals without prejudice do not resolve the merits and thus do not confer appellate jurisdiction, except in rare circumstances. The Court of Appeals dismissed the appeal for lack of jurisdiction, as the order below was not a final, appealable order. View "Moore v. District of Columbia" on Justia Law

A consumer purchased a set of bed sheets from a major retailer, choosing a more expensive option because the packaging stated the sheets were made of “100% cotton” and had an “800 Thread Count.” After using the sheets, he believed the quality did not match the advertised thread count. He later had the sheets tested by an expert, who determined the actual thread count was much lower. The consumer alleged that it is physically impossible for 100% cotton fabric to reach the advertised thread counts and claimed that the retailer’s labeling was false and misleading.The consumer initially brought a class action in California state court, alleging violations of California’s Unfair Competition Law and Consumer Legal Remedies Act. The retailer removed the suit to the United States District Court for the Southern District of California. The retailer moved to dismiss the complaint, arguing that the consumer failed to adequately plead his claims and that the impossibility of the claimed thread count meant no reasonable consumer would be misled. The district court agreed and dismissed the case with prejudice, relying on the Ninth Circuit’s decision in Moore v. Trader Joe’s Co., interpreting it to mean that literally impossible claims cannot deceive reasonable consumers as a matter of law.The United States Court of Appeals for the Ninth Circuit reviewed the dismissal de novo. The court held that the district court erred in its interpretation of Moore. The appellate court clarified that claims of literal falsity are actionable under California consumer protection laws and that even physically impossible claims may deceive reasonable consumers. The court reversed the district court’s dismissal and remanded the case for further proceedings, holding that the consumer’s allegations were sufficient to survive a motion to dismiss. View "PANELLI V. TARGET CORPORATION" on Justia Law

Two individuals brought a putative class action against the owners of a hotel in San Dimas, California, alleging that the hotel violated Civil Code section 1940.1. The statute is designed to prevent hotels from forcing guests to move out or check out and reregister every 28 days—a practice aimed at denying guests tenant protections that accrue after 30 days of occupancy. The hotel enforced a policy requiring all guests to vacate after 28 consecutive days and to stay away for at least three days before re-registering. Plaintiffs, who stayed at the hotel in multiple 28-day increments, were subject to this policy and sometimes stayed elsewhere or in their vehicle during the three-day interval.The plaintiffs filed a class action in the Superior Court of Los Angeles County, seeking to represent all individuals who had similar experiences at the hotel since November 2018. They argued that the hotel’s uniform policy and its status as a “residential hotel” made the case appropriate for class certification. The defendants countered that determining whether the hotel was a “residential hotel” under the statute would require individualized inquiries into whether each guest used the hotel as their primary residence. The trial court agreed with the defendants’ interpretation and denied class certification, finding that individual questions predominated over common ones.The California Court of Appeal, Second Appellate District, Division Three, reviewed the order denying class certification. The appellate court held that the trial court erred by interpreting section 1940.1 to require individualized proof that each class member used the hotel as their primary residence. The appellate court clarified that the “residential” status of the hotel is determined by the hotel’s overall use or intended use, not by each guest’s individual residency status. The court reversed the order denying class certification and remanded the case for further proceedings. View "Aerni v. RR San Dimas, L.P." on Justia Law

Two former tenants sued the owner and manager of a residential apartment complex, alleging that they were charged unlawful rental application fees and excessive lock change fees, in violation of the Massachusetts security deposit statute and consumer protection laws. They sought to represent a statewide class of similarly situated tenants. After contentious discovery, the Superior Court sanctioned the defendants, precluding them from contesting certain liability facts. The court granted summary judgment to the plaintiffs on the security deposit claims but denied summary judgment on the consumer protection claims. Before trial, the parties reached a proposed class action settlement that established a fund for class members, with unclaimed funds to be distributed partly to charities and partly returned to the defendants.The Superior Court, after scrutiny and required revisions, approved the settlement. The court capped the amount of unclaimed funds that could revert to the defendants and required that a portion go to designated charities. However, the Massachusetts IOLTA Committee, a nonparty potentially entitled to notice under Mass. R. Civ. P. 23(e)(3), was not notified prior to settlement approval. After final approval and claims processing, the committee received notice for the first time and objected to the final distribution of unclaimed funds, arguing that the lack of timely notice violated the rule and that final judgment should be set aside. The motion judge agreed there was a violation but declined to vacate the settlement, finding no prejudice.On direct appellate review, the Supreme Judicial Court of Massachusetts held that the IOLTA Committee had standing to appeal the denial of its procedural right to notice and an opportunity to be heard on the disposition of residual funds, but lacked standing to challenge the overall fairness or structure of the settlement. Assuming a violation of the rule occurred, the Court found no prejudice because the committee ultimately received the opportunity to be heard before judgment entered. The judgment was affirmed. View "Ortins v. Lincoln Property Company" on Justia Law

A Delaware corporation specializing in antenna measurement systems was majority-owned by a parent company, which controlled the board and imposed a services agreement that disproportionately allocated expenses to the subsidiary. An investment fund, having previously rejected buyout offers, became a vocal minority stockholder. In 2018, after a controversial squeeze-out merger at $3.30 per share—approved without effective minority protections—a third-party expressed interest in buying the parent at a much higher valuation, but later withdrew due to concerns over the parent’s transfer pricing practices. The merger closed at a valuation much lower than that suggested by the later private equity investment.A minority stockholder initially filed suit in the Court of Chancery of the State of Delaware, alleging breaches of fiduciary duty related to the merger. The court denied a motion to dismiss, and the original plaintiff’s counsel negotiated a proposed $825,000 settlement. The investment fund objected, sought to replace the lead plaintiff and counsel, and ultimately succeeded after the original settlement was rejected and the fund posted security to protect other stockholders’ interests. The fund, with new counsel, filed an amended complaint, pursued broader discovery, and advanced new damages theories, including contesting the services agreement and relying on the arm’s-length valuation from the private equity transaction. The litigation efforts included multiple discovery motions, expert reports, and defeating dismissal attempts, culminating in a mediated settlement for $17.85 million—21.64 times the original settlement and reflecting a 235% premium over the deal price.The Court of Chancery of the State of Delaware, in the present opinion, held that the investment fund, as lead plaintiff, was entitled to an incentive award of $730,000. The court found that the award was justified based on the fund’s considerable time, effort, and resources expended, the significant benefit obtained for the class, and the absence of problematic incentives or conflicts. View "In re Orbit/FR, Inc. Stockholders Litig." on Justia Law

The plaintiff entered into a lease agreement with a car dealership to lease a Jeep Grand Cherokee. The lease included an arbitration agreement containing a delegation clause, which specified that disputes about the scope of the arbitration agreement would be decided in arbitration. Later, the plaintiff filed a federal class action lawsuit against the vehicle’s manufacturer, alleging defects in the headrest. The manufacturer, however, was not a party to the lease agreement and did not claim to be an employee, agent, successor, or assign of the dealership.After the lawsuit was filed in the United States District Court for the Eastern District of California, the manufacturer moved to compel arbitration, arguing that the delegation clause required an arbitrator—not the court—to decide whether the manufacturer could enforce the arbitration agreement. In the alternative, the manufacturer asserted that either the plain language of the agreement or the doctrine of equitable estoppel entitled it to compel arbitration. The district court denied the motion, finding that the manufacturer could not enforce the arbitration agreement because it was not a party to the contract and none of the exceptions allowing enforcement by a non-signatory applied.The United States Court of Appeals for the Ninth Circuit reviewed the case and affirmed the district court’s denial of the motion to compel arbitration. The appellate court held that, absent a relevant exception, a non-party to an arbitration agreement cannot enforce the agreement’s terms against a signatory. It found that the language of the arbitration agreement did not cover disputes with the manufacturer, and under California law, the manufacturer could not use equitable estoppel to compel arbitration because the plaintiff’s claims were not founded in or intertwined with the lease agreement. The court’s disposition was to affirm the district court’s order. View "OLSON V. FCA US, LLC" on Justia Law

A group of shareholders brought a class action against a telecommunications company and its executives, alleging violations of securities laws related to the company’s merger with another entity. The plaintiffs claimed that the registration statement and prospectus for the merger contained false statements and omitted material facts about illegal billing practices known as “cramming,” which they argued were widespread, known to senior management, and impacted the company’s financial performance. The amended complaint incorporated allegations and statements made by confidential witnesses and public filings from related lawsuits, as well as affidavits from other cases, all supporting the claim of pervasive cramming practices.Initially, the Boulder County District Court dismissed the complaint for failure to plead material misrepresentations or omissions with particularity and denied leave to amend. On appeal, the Colorado Court of Appeals affirmed in part but reversed the denial of leave to amend the omissions claim based on the cramming theory, instructing that any borrowed allegations must be pleaded as facts after reasonable inquiry as required by C.R.C.P. 11. After the plaintiff amended the complaint, the district court dismissed it again, concluding that the plaintiff’s counsel had not satisfied the requirement to conduct a reasonable inquiry, as the complaint relied on allegations from other lawsuits without direct verification from the original sources or witnesses.The Colorado Supreme Court, en banc, reviewed the case and affirmed the Court of Appeals’ reversal. The Supreme Court held that under C.R.C.P. 11(a), counsel must conduct a sufficient investigation to support allegations, at least on information and belief, but the extent of the required investigation is fact-dependent. Copying allegations from related complaints does not alone violate Rule 11 provided counsel’s inquiry is objectively reasonable in context. The Court found that the plaintiff’s counsel had met this standard and affirmed the judgment below. View "CenturyLink, Inc. v. Houser" on Justia Law

A group of farmers and farming entities brought suit against several manufacturers, wholesalers, and retailers of seeds and crop-protection chemicals, alleging that these defendants conspired to obscure pricing data for these “crop inputs.” The plaintiffs claimed that this conspiracy, which included a group boycott of electronic sales platforms and price-fixing activities, forced them to pay artificially high prices. They sought to represent a class of individuals who had purchased crop inputs from the defendants or their authorized retailers dating back to January 1, 2014. The plaintiffs asserted violations of the Sherman Act, the Racketeer Influenced and Corrupt Organizations Act (RICO), and various state laws, seeking both damages and injunctive relief.After the cases were consolidated in the United States District Court for the Eastern District of Missouri, the defendants moved to dismiss the consolidated amended complaint. The district court granted the motion, finding that the plaintiffs failed to state a claim under the Sherman Act because they did not adequately allege parallel conduct among the defendants. The RICO claims were also dismissed with prejudice, and the court declined to exercise supplemental jurisdiction over the state law claims. The district court dismissed the antitrust claim with prejudice, noting that the plaintiffs had prior notice of the deficiencies and had multiple opportunities to amend.On appeal, the United States Court of Appeals for the Eighth Circuit reviewed the dismissal de novo and affirmed the district court’s judgment. The appellate court held that the plaintiffs failed to adequately plead parallel conduct or provide sufficient factual detail connecting specific defendants to particular acts. It concluded that the complaint’s group pleading and conclusory allegations did not meet the plausibility standard required to survive a motion to dismiss. The court also ruled that the dismissal with prejudice was proper given the plaintiffs’ repeated failures to cure the deficiencies. View "Duncan v. Bayer CropScience LP" on Justia Law