Justia Class Action Opinion Summaries

Four individuals who were or are patients of a health care system brought a proposed class action against the system, alleging violations of the California Invasion of Privacy Act (CIPA) and the California Confidentiality of Medical Information Act (CMIA). They claimed the health care provider installed web tracking technologies, specifically Meta Pixel and Google Analytics, on its various websites, including a public health risk assessment (HRA) site and a password-protected patient portal. According to the plaintiffs, these tools tracked users’ activities, collected their data—including personally identifiable information, health-related communications, and protected health information—and transmitted it to Meta and Google, who then used the data for advertising purposes.The Superior Court of Los Angeles County denied the plaintiffs’ motion for class certification in its entirety. The court found that the proposed subclasses—patients who logged into the patient portal and those who submitted HRA forms—were not ascertainable, that individual issues predominated over common ones, and that a class action was not the superior or manageable method. It reasoned that determining whether the tracking technologies’ transmissions constituted “contents” under CIPA or “medical information” under CMIA would require individualized inquiries into each user’s data. The court also concluded plaintiffs had abandoned their CIPA claim under section 632.On appeal, the California Court of Appeal, Second Appellate District, affirmed in part, reversed in part, and remanded. The appellate court held that the HRA form subclass and the CIPA claim for the patient portal subclass met the requirements for class certification, as key liability questions could be resolved with common proof. However, it affirmed the denial of class certification for the CMIA claim for the patient portal subclass and agreed that plaintiffs forfeited their CIPA section 632 claim. The court found class action treatment was superior and manageable for the certified subclasses. View "Doe v. Adventist Health System/West" on Justia Law

Six landowners in Western Pennsylvania, believing that XTO Energy, Inc. was underpaying royalties owed under oil and gas leases, brought a class action in the U.S. District Court for the Western District of Pennsylvania. None of the named plaintiffs’ leases included arbitration clauses, but the proposed class definitions were broad enough to cover leaseholders whose leases did contain arbitration clauses. The plaintiffs sought damages on behalf of themselves and similarly situated landowners.After the suit was filed, the District Court oversaw extensive class discovery and certified classes that included some members whose leases had arbitration clauses. XTO did not assert arbitration as a defense in its answers or move to compel arbitration before class certification or before the expiration of the class opt-out period. It only moved to compel arbitration against those unnamed class members with arbitration clauses after the opt-out period closed. Relying in part on the then-controlling district court decision in Valli v. Avis Budget Rental Car Group, LLC, a Magistrate Judge found that XTO had waived its right to arbitrate by demonstrating a preference for litigation over arbitration, and the District Court adopted that ruling.On appeal, the United States Court of Appeals for the Third Circuit reviewed the District Court’s waiver determination de novo as to legal conclusions and for clear error as to factual findings. The Third Circuit held that, under its intervening precedential decision in Valli v. Avis Budget Group, Inc., a defendant does not waive its right to compel arbitration against unnamed class members with arbitration clauses in their leases merely by litigating prior to class certification, where none of the named plaintiffs are subject to arbitration. The court found XTO’s conduct did not constitute an implied waiver. The Third Circuit vacated the District Court’s order denying XTO’s motion to compel arbitration and remanded for further proceedings. View "Salvatora v. XTO Energy Inc" on Justia Law

A large public pension fund alleged that a government-sponsored enterprise and three of its senior officers made false and misleading statements regarding the company’s exposure to subprime and Alt-A mortgages during a period preceding the 2008 financial crisis. The pension fund claimed that the company’s public statements and disclosures understated its exposure to high-risk loans, while internal documents and risk assessments suggested a much greater level of risk. It further argued that, when the company’s actual exposure came to light, its stock price fell, resulting in significant losses to shareholders.Previously, the United States District Court for the Northern District of Ohio denied class certification, excluded the pension fund’s expert, and granted summary judgment to the defendants. The court concluded that the pension fund failed to establish reliance due to an inability to show that the company’s stock traded in an efficient market, improperly rejected the fund’s price-maintenance theory of fraud, found insufficient evidence to support loss causation and damages, and determined the defendants did not act with scienter. The court also found no actionable misstatements regarding credit-risk and underwriting standards, and dismissed control-person liability claims after finding no underlying securities violation.On appeal, the United States Court of Appeals for the Sixth Circuit reversed in part, vacated in part, and remanded. The appellate court held that the pension fund presented sufficient evidence for a jury to find that the company made materially false or misleading statements regarding its subprime and Alt-A exposure, and that issues of scienter and reliance were present. The court determined that the lower court erred in rejecting the price-maintenance theory and improperly excluded the plaintiff’s expert. It also concluded that the fund should be allowed another opportunity to seek class certification and to present evidence of loss causation and damages. The court reinstated the underlying securities fraud and control-person liability claims for further proceedings. View "OPERS v. FHLMC" on Justia Law

After Missouri legalized recreational marijuana in 2022, local governments were permitted to impose an additional sales tax on dispensaries selling recreational marijuana. Dispensaries passed this tax on to their customers. However, the Missouri Supreme Court later ruled that counties could not levy this additional tax on dispensaries located within incorporated areas such as cities or towns. Following this ruling, a class of customers sued several dispensaries, alleging that the dispensaries unlawfully retained the collected county tax and sought restitution.The dispensaries removed the action to the United States District Court for the Western District of Missouri under the Class Action Fairness Act (CAFA). The plaintiffs then amended their complaint to limit the class to Missouri citizens and moved to remand the case to state court, arguing that the Local Controversy Exception to CAFA applied. The district court initially found that three of the four required elements for the exception were met but that the class had not sufficiently shown that more than two-thirds of its members were Missouri citizens. After a second amendment explicitly limited the class to Missouri citizens, the district court found all requirements met and remanded the case to state court.On appeal, the United States Court of Appeals for the Eighth Circuit considered whether the operative pleading for determining CAFA jurisdiction was the first or second amended complaint. The court, relying on the Supreme Court’s decision in Royal Canin U.S.A., Inc. v. Wullschleger, held that the most recent amended complaint governs jurisdiction. The Eighth Circuit also agreed that the Local Controversy Exception was satisfied and affirmed the district court’s remand order, holding that federal jurisdiction no longer existed once the class was limited to Missouri citizens. View "Vick v. Vertical Enterprise, LLC" on Justia Law

Three individuals filed a class action lawsuit against San Francisco, challenging new water rates adopted by the city’s Public Utility Commission in May 2023. The plaintiffs alleged that the new rates violated Proposition 218 of the California Constitution by including costs unrelated to the actual provision of water service, resulting in charges that exceeded the cost of service. Before adopting the new rates, the city provided required notice to ratepayers, including information about a 120-day period for legal challenges under the applicable validation statutes. The plaintiffs sought a refund, declaratory and equitable relief, and a writ of mandate.After the class action was filed, the City litigated the case for over a year. It participated in discovery, case management, and even moved for summary judgment, without initially arguing that the suit was procedurally improper. Eventually, the City moved for judgment on the pleadings, arguing that plaintiffs’ action was subject to the validation statutes, specifically Government Code section 53759 and Code of Civil Procedure sections 860 et seq., which require reverse validation actions attacking agency matters like water rates to be brought within 120 days and with specific notice by publication to all interested parties. The trial court (San Francisco County Superior Court) agreed with the City, finding the statutes mandatory and jurisdictional, and dismissed the case for failure to comply with the procedural requirements, including timely filing and appropriate notice.On appeal, the California Court of Appeal, First Appellate District, Division Two, reviewed the judgment de novo. The court held that compliance with the validation statutes was mandatory and jurisdictional. Plaintiffs’ failure to file a proper reverse validation action and to provide notice by publication deprived the court of jurisdiction. The court rejected arguments that the City had waived these requirements or that good cause existed for noncompliance. The judgment in favor of the City was affirmed. View "Toy v. City & County of S.F." on Justia Law

Plaintiffs, who were investors in a pharmaceutical company, brought a putative class action alleging securities fraud. The company had developed a drug to treat geographic atrophy, a form of age-related macular degeneration, and conducted two large clinical trials (OAKS and DERBY) before the drug's approval by the FDA. During the class period, company representatives publicly stated that there were no observed cases of retinal vasculitis, a serious eye condition, among trial participants. After the drug's commercialization, new reports emerged of retinal vasculitis in patients treated with the drug, leading to a decline in the company’s stock price and the addition of a warning to the drug’s label.The action was initially filed in the U.S. District Court for the District of Delaware and later transferred to the U.S. District Court for the District of Massachusetts. The plaintiffs argued that the company's statements were misleading half-truths because the clinical trials were not specifically designed to detect retinal vasculitis, and this limitation was not disclosed to investors. The defendants moved to dismiss, contending that the statements were not materially misleading and that there was no sufficient allegation of scienter (intent to defraud). The U.S. District Court for the District of Massachusetts granted the motion, holding that the omissions were not actionable because the relevant trial protocols and methodologies had been publicly disclosed and disagreements over scientific methodology do not support securities fraud claims.On appeal, the United States Court of Appeals for the First Circuit affirmed the dismissal. The court held that the company’s statements were not materially misleading because the information regarding the trial protocols, including when and how retinal vasculitis could be detected, was publicly available. The court concluded that no material misrepresentation or actionable omission had occurred, and thus affirmed the district court’s judgment. View "In Re: Apellis Pharm., Inc. Securities Litigation" on Justia Law

A group of small merchants, including a store in Rhode Island, entered into arbitration agreements with a credit card company, which required arbitration of disputes before the American Arbitration Association (AAA). In August 2023, these merchants initiated thousands of arbitration proceedings against the company, challenging certain “swipe-fee” policies that they argued harmed small businesses. A dispute arose over the filing fees that the credit card company owed to the AAA. The AAA administrator determined the applicable fees and repeatedly warned both parties that the arbitrations would be administratively closed if the fees were not paid. The merchants paid their share of the fees, but the credit card company refused to pay, contesting the fee amount. As a result, in late February 2024, the AAA administratively closed the arbitrations.Subsequently, the merchants filed a class action in the United States District Court for the District of Rhode Island, arguing that the company’s refusal to pay arbitration fees constituted a default and waiver of its right to compel arbitration under the Federal Arbitration Act (FAA). The credit card company moved to stay the litigation and compel arbitration. The District Court denied the motion, finding that the company had defaulted and waived its arbitration rights by failing to pay the required fees, and rejected the company’s argument that the merchants had acted with unclean hands.The United States Court of Appeals for the First Circuit reviewed the case. The court held that the district court had the authority to decide whether the company’s conduct amounted to waiver or default under the FAA, and that the company’s deliberate refusal to pay arbitration fees, despite repeated warnings, constituted waiver and default. The First Circuit also found no error in the district court’s rejection of the unclean hands defense. The appellate court affirmed the district court’s denial of the motion to stay and compel arbitration. View "5-Star General Store v. American Express Company" on Justia Law

Support staff who worked at a psychiatric hospital in Louisiana operated by Acadia-affiliated entities allege that, while they were provided with nominal meal breaks, they were functionally required to remain on call due to company policies and ethical obligations. As a result, they claim they were not properly compensated for this time. The plaintiffs, a former nurse supervisor and a former mental health technician, brought suit on behalf of themselves and similarly situated employees. Their claims included violations under the Fair Labor Standards Act (FLSA) and Louisiana state-law torts, specifically unjust enrichment and conversion.The United States District Court for the Eastern District of Louisiana certified both an FLSA collective action and a Rule 23(b)(3) class action for the state-law claims. Acadia sought interlocutory review of the class certification under Federal Rule of Civil Procedure 23(f). The Fifth Circuit Court of Appeals was presented with Acadia’s appeal challenging both the collective and class certification decisions.The United States Court of Appeals for the Fifth Circuit determined that it lacked jurisdiction to review the FLSA collective action certification at this stage, as Rule 23(f) provides for interlocutory review only of class certification orders, not collective actions. The court declined Acadia’s request to exercise pendent appellate jurisdiction because the legal standards and issues between the FLSA collective and the Rule 23 class were not sufficiently intertwined. Turning to class certification, the Fifth Circuit found no abuse of discretion by the district court. It held that the Rule 23 requirements of numerosity, commonality, typicality, adequacy, predominance, and superiority were satisfied based on the plaintiffs’ “on-call” theory, which presented common questions suitable for classwide adjudication. The court therefore affirmed the district court’s certification of the Rule 23 class, dismissed the appeal regarding the collective action, and remanded for further proceedings. View "Hamm v. Ochsner-Acadia" on Justia Law

A real estate investment trust issued shares governed by corporate charter documents that initially paid fixed dividends but were set to convert to floating rates tied to the London Inter-Bank Offered Rate (LIBOR). The charter provided three fallback options if LIBOR became unavailable. When LIBOR was discontinued, the company determined that the third fallback provision—a fixed rate based on the most recent dividend period—would apply. This decision was announced before the shares were set to convert to floating rates, leading to a decrease in the shares' market value.A shareholder filed a class action in the United States District Court for the Central District of California, alleging that the company’s failure to convert to SOFR-based floating rates, as selected by the Federal Reserve under the Adjustable Interest Rate (LIBOR) Act, violated California’s Unfair Competition Law (UCL). The shareholder claimed that a fixed rate could not serve as a valid “benchmark replacement” under the LIBOR Act. The company moved to dismiss, arguing that the fallback provision was a valid benchmark replacement, thus precluding a UCL claim. The district court denied the motion, finding ambiguity in the statute and relying on legislative history suggesting concern over fixed-rate conversions.On appeal, the United States Court of Appeals for the Ninth Circuit reversed the district court’s order. The Ninth Circuit held that, under the plain text of the LIBOR Act, a “benchmark replacement” may include a fixed dividend rate as provided in the fallback provision, and there is no requirement that it be a floating rate. The court found the fallback provision to be a valid benchmark replacement and concluded that the company’s actions were not “unlawful” or “unfair” under the UCL. The case was remanded for further proceedings on any remaining issues. View "VERTHELYI V. PENNYMAC MORTGAGE INVESTMENT TRUST" on Justia Law

A group of Missouri home sellers brought a class action lawsuit in federal court, alleging that the National Association of Realtors (NAR) and several large real estate brokerage firms conspired to inflate buyer-broker commissions through a rule requiring sellers to offer compensation to buyers’ brokers via Multiple Listing Services (MLSs). The plaintiffs claimed this arrangement artificially increased transaction costs for sellers and buyers nationwide due to NAR’s market dominance. The class was initially limited to Missouri, Illinois, and Kansas home sellers using certain MLSs.After a trial in the United States District Court for the Western District of Missouri, a jury found the defendants liable for violating antitrust laws and awarded significant damages. While post-trial motions were pending, similar lawsuits emerged across the country. The parties began global settlement negotiations addressing claims from related cases, including those involving different MLSs and trade associations, such as the Real Estate Board of New York (REBNY). The settlement required NAR and others to pay over $1 billion and implement practice changes, including eliminating the contested rule. The settlement class expanded to nearly all U.S. home sellers using any MLS from 2014 to 2024. Following extensive notice and a fairness hearing, the district court certified the nationwide class, approved the settlement as fair under Federal Rule of Civil Procedure 23, and addressed all objections, including those from non-appearing objectors.On appeal, several objectors and interested parties challenged the settlement, raising issues about class scope, adequacy, fairness, the inclusion of unrelated claims, attorneys’ fees, due process, and the fairness hearing procedures. The United States Court of Appeals for the Eighth Circuit reviewed for abuse of discretion and found that the district court properly applied the relevant legal standards, including Rule 23(e). The Eighth Circuit affirmed the district court’s approval of the nationwide class-action settlement, holding that it was fair, reasonable, and adequate, and that the process satisfied constitutional and procedural requirements. View "Burnett v. Spring Way Center, LLC" on Justia Law