Justia Class Action Opinion Summaries

Three former satellite service technicians filed a class action lawsuit against their employer, DirectSat USA, LLC, alleging violations of the Illinois Minimum Wage Law (IMWL) and the Fair Labor Standards Act (FLSA). They claimed that DirectSat failed to compensate them for work-related tasks performed beyond forty hours per week. The district court initially certified a class of full-time Illinois DirectSat technicians but later vacated this certification and certified a Rule 23(c)(4) issue class to resolve fifteen questions related to DirectSat’s liability.The case was reassigned to another district judge in 2019. Before the trial, the district court decertified the Rule 23(c)(4) class. The plaintiffs settled their individual claims but reserved the right to appeal the decertification decision. The district court found that the class action was not a superior method for adjudicating the plaintiffs' controversy due to the variance in the amount of time technicians spent on work-related tasks and the individualized nature of their piece-rate compensation system.The United States Court of Appeals for the Seventh Circuit reviewed the case. The court held that a party seeking certification of an issue class under Rule 23(c)(4) must show that common questions predominate in the resolution of the specific issues to be certified, not the entire cause of action. However, the court affirmed the district court’s decision to decertify the class, concluding that a class action was not a superior method for resolving the controversy due to the individualized nature of the claims and the necessity for numerous separate trials to determine liability and damages. View "Jacks v. DirectSat USA, LLC" on Justia Law

Glenn O. Hawbaker, Inc. (GOH) engaged in a scheme to underpay its employees by misappropriating fringe benefits owed under the Pennsylvania Prevailing Wage Act (PWA) and the Davis-Bacon Act (DBA). This led to two class-action lawsuits against GOH. GOH sought coverage under its insurance policy with Twin City Fire Insurance Company (Twin City), which denied coverage and sought a declaratory judgment that it had no duty to provide coverage. GOH and its Board of Directors counterclaimed, alleging breach of contract and seeking a declaration that certain claims in the class actions were covered under the policy.The United States District Court for the Middle District of Pennsylvania dismissed GOH's counterclaims, concluding that the claims were not covered under the policy due to a policy exclusion for claims related to "Wage and Hour Violations." The court also granted Twin City's motion for judgment on the pleadings, affirming that Twin City had no duty to defend or indemnify GOH for the class-action claims.The United States Court of Appeals for the Third Circuit reviewed the case and affirmed the District Court's judgment. The Third Circuit agreed that the claims in question were not covered under the policy because they were related to wage and hour violations, which were explicitly excluded from coverage. The court emphasized that the exclusion applied broadly to any claims "based upon, arising from, or in any way related to" wage and hour violations, and found that the factual allegations in the class actions were indeed related to such violations. Thus, Twin City had no duty to defend or indemnify GOH under the terms of the policy. View "Twin City Fire Insurance Co. v. Glenn O. Hawbake, Inc." on Justia Law

The case involves a class action against Progressive Northwestern Insurance Company, which allegedly violated Arkansas insurance law through a uniform adjustment practice. The named plaintiff, Misty Huddleston, claims that Progressive improperly reduced medical expense insurance coverage (Med-Pay) benefits by considering payments from secondary health-care insurance. This practice, documented as "Code 563," adjusts Med-Pay benefits based on amounts paid or anticipated to be paid by the insured’s health-care provider, rather than the actual billed amount.The Pope County Circuit Court certified the class, which includes all Arkansas residents who had Med-Pay claims adjusted by Progressive using Code 563 and received less than the policy limit for their claims between February 16, 2017, and September 28, 2023. Progressive appealed the certification, arguing that the claims were not common to the class, did not predominate over individual issues, Huddleston was not typical of the class, and a class action was not a superior method for handling the claims.The Supreme Court of Arkansas reviewed the case and affirmed the circuit court’s decision. The court found that the commonality requirement was met because the core issue—whether Progressive’s adjustment practice was lawful—applied uniformly to all class members. The court also determined that common questions predominated over individual issues, as the legality of the adjustment practice was central to the case. Huddleston’s claims were deemed typical of the class because they arose from the same conduct by Progressive. Finally, the court held that a class action was the superior method for adjudicating the claims, as it would avoid repetitive litigation and ensure consistent adjudications. View "PROGRESSIVE NORTHWESTERN INSURANCE COMPANY v. HUDDLESTON" on Justia Law

A dental practice owned by Timothy A. Ungarean, DMD, purchased a commercial property insurance policy from CNA and Valley Forge Insurance Company. The policy was intended to cover business-related losses. In March 2020, due to the COVID-19 pandemic, Pennsylvania's Governor ordered non-essential businesses to close, which led to significant financial losses for Ungarean's practice. Ungarean filed a claim under the policy, which was denied by CNA on the grounds that there was no physical damage to the property.Ungarean then filed a class action complaint in the Court of Common Pleas of Allegheny County, seeking a declaration that the policy covered his pandemic-related business losses. The trial court granted summary judgment in favor of Ungarean, interpreting the policy's language to include loss of use of the property as a form of "direct physical loss." The court also found that none of the policy's exclusions applied to bar coverage.The Superior Court affirmed the trial court's decision, agreeing that the policy language was ambiguous and should be interpreted in favor of the insured. The court held that the loss of use of the property due to the government shutdown constituted a "direct physical loss."The Supreme Court of Pennsylvania reviewed the case and reversed the Superior Court's decision. The court held that the policy's language was unambiguous and required a physical alteration to the property for coverage to apply. The court found that the economic losses suffered by Ungarean due to the government shutdown did not meet this requirement. Consequently, the court ruled that Ungarean was not entitled to coverage under the policy and remanded the case to the Superior Court with instructions to enter summary judgment in favor of CNA. View "Ungarean v. CNA" on Justia Law

A former employee, Campbell, filed a putative class action lawsuit against her employer, Sunshine Behavioral Health, LLC, alleging wage and hour violations. Campbell claimed that employees were not paid proper overtime, were required to work through meal and rest breaks without compensation, were not paid minimum wage, and were not paid in a timely manner. Sunshine initially proceeded with litigation and agreed to participate in mediation. However, Sunshine later claimed to have discovered an arbitration agreement signed by Campbell, which included a class action waiver.The Superior Court of Orange County found that Sunshine had waived its right to compel arbitration. Despite allegedly discovering the arbitration agreement in November 2022, Sunshine continued to engage in mediation discussions and did not inform Campbell or the court of its intent to compel arbitration until March 2023. Sunshine's delay and conduct were deemed inconsistent with an intent to arbitrate, leading the court to conclude that Sunshine had waived its right to arbitration.The California Court of Appeal, Fourth Appellate District, Division Three, reviewed the case and affirmed the lower court's decision. The appellate court found clear and convincing evidence that Sunshine had waived its right to arbitration. The court noted that Sunshine's actions, including agreeing to mediation on a class-wide basis and delaying the motion to compel arbitration, were inconsistent with an intent to arbitrate. The court emphasized that Sunshine's conduct demonstrated an intentional abandonment of the right to arbitrate, thus affirming the order denying the motion to compel arbitration. View "Campbell v. Sunshine Behavioral Health" on Justia Law

Plaintiffs Marla Knudsen and William Dutra, representing a class of similarly situated individuals, filed a class action lawsuit under the Employee Retirement Income Security Act (ERISA) against MetLife Group, Inc. They alleged that MetLife, as the administrator and fiduciary of the MetLife Options & Choices Plan, misappropriated $65 million in drug rebates from 2016 to 2021. Plaintiffs claimed this misappropriation led to higher out-of-pocket costs for Plan participants, including increased insurance premiums.The United States District Court for the District of New Jersey dismissed the case for lack of standing. The court concluded that the plaintiffs did not demonstrate a concrete and individualized injury. It reasoned that the plaintiffs had no legal right to the general pool of Plan assets and had not shown that they did not receive their promised benefits. The court found the plaintiffs' claims that they paid excessive out-of-pocket costs to be speculative and lacking factual support.The United States Court of Appeals for the Third Circuit affirmed the District Court's dismissal. The Third Circuit held that the plaintiffs failed to establish an injury-in-fact, as their allegations of increased out-of-pocket costs were speculative and not supported by concrete facts. The court noted that the plaintiffs did not provide specific allegations showing how the misappropriated drug rebates directly caused their increased costs. The court emphasized that financial harm must be actual or imminent, not conjectural or hypothetical, to satisfy Article III standing requirements. Consequently, the plaintiffs lacked standing to pursue their ERISA claims. View "Knudsen v. MetLife Group Inc" on Justia Law

The plaintiffs, William and Ellen Solem, own property in Flathead County’s “Neighborhood 800.” In 2008, the Montana Department of Revenue (DOR) conducted a mass appraisal of lakefront properties in this neighborhood, significantly increasing the valuation of the Solems' property from $229,500 in 2002 to $1,233,050 in 2008. The Solems challenged the appraisal, arguing that DOR’s methodology was improper and unlawful. They sought approximately $450 in alleged overpaid taxes and filed a class action on behalf of other property owners in the neighborhood.The Eleventh Judicial District Court certified the case as a class action and held a bench trial on liability issues. The court found in favor of the Solems, ruling that DOR’s appraisal methodology was unlawful and unconstitutional. The court criticized DOR for excluding 17 outlier sales from its model and for using only three variables in its appraisal process. The court awarded damages, costs, and fees to the plaintiffs. The Solems also cross-appealed the court’s denial of their motion to amend the class definition.The Supreme Court of the State of Montana reviewed the case. The court held that the District Court erred by substituting its judgment for that of DOR. The Supreme Court found that DOR’s mass appraisal methodology was consistent with accepted practices and that the Solems failed to meet the substantial burden of disproving the accuracy of DOR’s appraisal. The court also noted that the District Court improperly relied on the R squared value as the sole metric for accuracy. Consequently, the Supreme Court reversed the District Court’s ruling and remanded the case for proceedings consistent with its opinion. The court did not address the constitutionality of the payment-under-protest requirement, as it was unnecessary given the resolution of the primary issue. View "Solem v. Department of Revenue" on Justia Law

In 2007, Dennis Collins, Suzanne Collins, David Butler, and Lucia Bott purchased long-term care insurance policies from Metropolitan Life Insurance Company (MetLife). They also bought an Inflation Protection Rider, which promised automatic annual benefit increases without corresponding premium hikes, though MetLife reserved the right to adjust premiums on a class basis. In 2015, 2018, and 2019, MetLife informed the plaintiffs of significant premium increases. The plaintiffs filed a class action in 2022, alleging fraud, fraudulent concealment, violations of state consumer protection statutes, and breach of the implied covenant of good faith and fair dealing under Illinois and Missouri law.The United States District Court for the Eastern District of Missouri dismissed the case, ruling that the filed rate doctrine under Missouri and Illinois law barred the plaintiffs' claims. Additionally, the court found that the plaintiffs bringing claims under Missouri law failed to exhaust administrative remedies. The plaintiffs appealed, arguing that the filed rate doctrine did not apply, they were not required to exhaust administrative remedies, and their complaint adequately alleged a breach of the implied covenant.The United States Court of Appeals for the Eighth Circuit reviewed the case de novo and affirmed the district court's dismissal. The appellate court held that the plaintiffs' complaint failed to state a claim upon which relief could be granted. The court found that MetLife's statements about premium expectations were not materially false and that the plaintiffs did not sufficiently allege intentional fraud or fraudulent concealment. The court also concluded that the statutory claims under the Missouri Merchandising Practices Act and the Illinois Consumer Fraud and Deceptive Business Practices Act were barred by regulatory exemptions. Lastly, the court determined that the implied covenant of good faith and fair dealing was not breached, as MetLife's actions were expressly permitted by the policy terms. View "Collins v. Metropolitan Life Insurance Co." on Justia Law

Marco Fernandez applied to rent an apartment, and RentGrow, Inc. provided a tenant screening report to the property owner. The report inaccurately indicated that Fernandez had a "possible match" with a name on the OFAC list, which includes individuals involved in serious crimes. However, the property manager did not understand or consider this information when deciding on Fernandez's application. Fernandez sued RentGrow, alleging that the company violated the Fair Credit Reporting Act (FCRA) by not ensuring the accuracy of the OFAC information.The United States District Court for the District of Maryland certified a class of individuals who had similar misleading OFAC information in their reports. The court rejected RentGrow's argument that Fernandez and the class lacked standing because they did not demonstrate a concrete injury. The district court held that the dissemination of the misleading report itself was sufficient to establish a concrete injury.The United States Court of Appeals for the Fourth Circuit reviewed the case and disagreed with the district court's conclusion. The appellate court held that reputational harm can be a concrete injury, but only if the misleading information was read and understood by a third party. In this case, there was no evidence that anyone at the property management company read or understood the OFAC information in Fernandez's report. Therefore, Fernandez failed to demonstrate a concrete injury sufficient for Article III standing. The Fourth Circuit vacated the district court's class certification order and remanded the case for further proceedings. View "Fernandez v. RentGrow, Inc." on Justia Law

The City of Gridley operates an electric utility and approved reduced electric rates for residential users in September 2020. Plaintiffs, residential ratepayers, challenged these rates, alleging they resulted in charges exceeding the reasonable cost of providing electric service, thus constituting a tax without voter approval in violation of article XIII C of the California Constitution. They also claimed the rates violated the state and federal takings clauses under the unconstitutional conditions doctrine. Plaintiffs sought a writ of mandate and class action complaint, alleging the City set rates higher than necessary and transferred excess revenues to its general fund.The Superior Court of Butte County denied the City’s motion for summary judgment, finding triable issues of fact regarding whether the rates resulted in excessive charges and whether plaintiffs had a property interest in continued electric service. The court rejected the City’s argument that article XIII C was inapplicable because the City did not impose, extend, or increase a tax when it approved reduced rates. The court also found that the unconstitutional conditions doctrine could apply to plaintiffs' takings claim.The California Court of Appeal, Third Appellate District, reviewed the case and concluded that the City was entitled to relief. The court found article XIII C inapplicable because the City did not impose, extend, or increase any tax by reducing its electric rates. The court also found the unconstitutional conditions doctrine inapplicable, as it applies only in the land-use permitting context, not to user fees like the electric rates in question. Consequently, the court directed the trial court to set aside its order denying the City’s motion for summary judgment and to enter a new order granting the motion. The City’s motion for summary judgment was granted, and the stay of proceedings in the trial court was vacated. View "City of Gridley v. Super. Ct." on Justia Law