Articles Posted in Class Action

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Plaintiff filed a class action against The Money Store, alleging overcharge of late fees on mortgages. After plaintiff prevailed in the jury trial, the district court granted defendants' post-verdict motion to decertify a class that was previously certified pursuant to Federal Rule of Civil Procedure 23(a) and (b)(3), and entered judgment in favor of plaintiff only. The court held that a district court has power, consistent with the Seventh Amendment and Rule 23, to decertify a class after a jury verdict and before the entry of final judgment; in considering such decertification (or modification), the district court must defer to any factual findings the jury necessarily made unless those findings were “seriously erroneous,” a “miscarriage of justice,” or “egregious.” Applying these principles, the court concluded that the district court did not abuse discretion in determining that Rule 23’s requirements were not met and in decertifying the class. Accordingly, the court affirmed the judgment. An accompanying summary order affirms the denial of plaintiff’s motion for a new trial as to a second claim. View "Mazzei v. Money Store" on Justia Law

Posted in: Class Action

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In an antitrust class action brought on behalf of approximately 12 million merchants against Visa and Mastercard, as well as other various banks, plaintiffs alleged conspiracy in violation of Section 1 of the Sherman Act, 15 U.S.C. 1. After the parties agreed to a settlement releasing all claims, the district court certified two settlement-only classes and approved the settlement. Numerous objectors and opt‐out plaintiffs appealed and argued that the class action was improperly certified and that the settlement was unreasonable and inadequate. The court concluded that class members of the (b)(2) class were inadequately represented in violation of both FRCP 23(a)(4) and the Due Process Clause. The court also concluded that procedural deficiencies produced substantive shortcomings in this class action and the settlement. Consequently, the court concluded that the class action was improperly certified and the settlement was unreasonable and inadequate. The court vacated the district court's certification of the class action and reversed the approval of the settlement. The court remanded for further proceedings. View "In re Payment Card Interchange Fee and Merchant Discount Antitrust" on Justia Law

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Plaintiffs, three health-benefit plans (HBPs), filed suit under the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. 1961 et seq., and state laws, claiming that Aventis engaged in a pattern of mail fraud by failing to disclose the true risks of the antibiotic drug telithromycin, marketed as “Ketek.” The district court denied plaintiffs' motion to certify a class of all HBPs that paid for Ketek prescriptions on the theory that such HBPs were injured as a result of paying for Ketek prescriptions that would not have been written if Aventis had not concealed Ketek’s safety risks. The court concluded that UFCW Local 1776 v. Eli Lilly & Co. (Zyprexa) does not foreclose class certification for all RICO mail‐fraud claims brought against a drug manufacturer. However, the court concluded that Zyprexa’s reasoning applies to this case, and bars plaintiffs’ attempt to certify a class. While it may be possible for a class of plaintiffs to prove the causation element of a pharmaceutical fraud claim such as this one with generalized proof, plaintiffs have failed to offer such proof here. Therefore, class certification was correctly denied. The court's certification decision necessarily disposes of the summary judgment question as well: if plaintiffs’ RICO claims cannot be proved by generalized proof and plaintiffs have adduced no individualized proof, plaintiffs' claims cannot survive summary judgment. Further, the court agreed with the district court’s dismissal of the state‐law claims. Accordingly, the court affirmed the judgment. View "Sergeants Benevolent Ass'n v. Sanofi-Aventis US" on Justia Law

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This case arose after the Republic of Argentina defaulted on sovereign debt in 2001 and numerous bondholders, including plaintiff, filed a class action suit. In this appeal, Argentina challenged the district court's grant of plaintiff's motion to modify the class definition by removing the continuous holder requirement and expanding the class to all holders of beneficial interests in the relevant bond series without limitations as to time held. In this case, the features of the bonds make the modified class insufficiently definite as a matter of law.  Although the class as originally defined by the district court may have presented difficult questions of calculating damages, it did not suffer from a lack of ascertainability. The court concluded that the district court erred in attempting to address those questions by introducing an ascertainability defect into the class definition. Accordingly, the court vacated and remanded for an evidentiary hearing on damages. View "Brecher v. Republic of Argentina" on Justia Law

Posted in: Class Action

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This appeal stems from actions filed by holders of Argentina's bonds after the Republic of Argentina defaulted on sovereign debt. After previous panels of this court twice vacated aggregate judgments entered by the district court in favor of plaintiff classes, the court remanded with specific instructions. The district court, however, certified expanded plaintiff classes. The court concluded that the district court erred in following Hickory Sec. Ltd. v. Republic of Argentina's (Seijas II) mandate where, even though it did not expressly preclude recertification, Seijas II cannot be read to have permitted the district court to disregard the court's instructions and expand the plaintiff classes as a solution to a problem for which the court had already prescribed a specific response. Accordingly, the court vacated the district court's orders and remanded. View "Puricelli v. Republic of Argentina" on Justia Law

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This appeal stems from actions filed by holders of Argentina's bonds after the Republic of Argentina defaulted on sovereign debt. After previous panels of this court twice vacated aggregate judgments entered by the district court in favor of plaintiff classes, the court remanded with specific instructions. The district court, however, certified expanded plaintiff classes. The court concluded that the district court erred in following Hickory Sec. Ltd. v. Republic of Argentina's (Seijas II) mandate where, even though it did not expressly preclude recertification, Seijas II cannot be read to have permitted the district court to disregard the court's instructions and expand the plaintiff classes as a solution to a problem for which the court had already prescribed a specific response. Accordingly, the court vacated the district court's orders and remanded. View "Puricelli v. Republic of Argentina" on Justia Law

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Plaintiffs, hired as unpaid interns on the Fox Searchlight-distributed film "Black Swan," claimed compensation as employees under the Fair Labor Standards Act, 29 U.S.C. 201 et seq., and New York Labor Law. The district court granted plaintiff Glatt and Footman's motion for partial summary judgment, certified plaintiff Antalik's New York class, and conditionally certified Antalik's nationwide collective. The court agreed with defendants that the proper question is whether the intern or the employer is the primary beneficiary of the relationship, and the court proposed a list of non‐exhaustive factors to aid courts in answering that question. Because the district court limited its review to the six factors in DOL’s Intern Fact Sheet, the court remanded for the district court to permit the parties to submit additional evidence. Even if Antalik established that Fox had a policy of replacing paid employees with unpaid interns, it would not necessarily mean that every Fox intern was likely to prevail on her claim that she was an FLSA employee under the primary beneficiary test, the most important issue in each case. Assuming some questions may be answered with generalized proof, they are not more substantial than the questions requiring individualized proof. Because the most important question in this litigation cannot be answered with generalized proof, the court vacated the district court’s order certifying Antalik’s proposed class and remanded for further proceedings consistent with this opinion. Finally, for substantially the same reasons as with respect to Antalik’s Rule 23 motion, the court vacated the district court’s order conditionally certifying Antalik’s proposed nationwide collective action and remanded for further proceedings. View "Glatt v. Fox Searchlight Pictures" on Justia Law

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Zcom, a former Verizon retail sales agent, filed suit in state court alleging state-law contract and tort claims against Verizon and others. Zcom alleged that Verizon's termination of the parties' sales-agent relationship violated state law. Defendants removed to federal court pursuant to the Class Action Fairness Act (CAFA), 28 U.S.C. 1332(d), and Zcom filed an amended complaint dropping all class-action allegations. The court joined the Seventh Circuit in holding that “jurisdiction under CAFA is secure even though, after removal, the plaintiffs amended their complaint to eliminate the class allegations.” Therefore, the district court properly maintained subject-matter jurisdiction over the First Amended Complaint. On the merits, the court affirmed for substantially the reasons set forth in the opinions issued by the district court. View "In Touch Concepts, Inc. v. Cellco P'ship" on Justia Law

Posted in: Class Action

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Plaintiffs are individuals and entities that purchased shares in the Kingate funds and continued to hold their shares until the 2008 exposure of the Bernie Madoff Ponzi scheme, resulting in loss most of the funds’ assets. A purported class action was filed against persons and entities affiliated with the funds. The district court dismissed, citing the Securities Litigation Uniform Standards Act of 1998 (SLUSA), 112 Stat. 3227, which bars certain state‐law‐based class actions alleging falsity in connection with transactions in six categories of “covered securities.” The Second Circuit vacated, noting the Supreme Court’s intervening ruling in Chadbourne & Parke LLP v. Troice, (2014). The alleged fraud in this case is “in connection with the purchase or sale of a covered security” and brings the case within SLUSA’s prohibition (assuming SLUSA’s 12 other elements are met). The state law claims that do not depend on false conduct are not within the scope of SLUSA, even if the complaint includes peripheral, inessential mentions of false conduct. Claims accusing the defendant of complicity in the false conduct that gives rise to liability are subject to SLUSA’s prohibition, while claims of false conduct in which the defendant is not alleged to have had any complicity are not. View "In re: Kingate Mgmt. Ltd. Litig." on Justia Law

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A 1999 suit alleged that plaintiffs had been arrested on misdemeanor charges and were strip searched, without individualized suspicion, in violation of their federal and state constitutional rights. Nassau County conceded liability. The Second Circuit instructed the court to certify a class as to liability and to consider whether to certify a class as to damages. The district court certified both classes, granted summary judgment on liability, and held a bench trial on damages. In 2012, before the district court entered judgment, Nassau County moved to vacate the summary judgment and to dismiss the action based on the Supreme Court’s 2012 decision Florence v. Bd. of Chosen Freeholders, that “every detainee who will be admitted to the general population [of a jail] may be required to undergo a close visual inspection while undressed. The court granted the motion as to the federal claim, but determined that Florence did not warrant vacatur of the concession of liability with respect to the state claim, and awarded $11.5 million. While appeal was pending, Nassau County moved to stay enforcement pending appeal. The district court ruled that the obligation to deposit the funds with the court would be stayed for 180 days, or indefinitely, if Nassau County posted a bond. The Second Circuit stayed the requirement of deposit or bond. View "In re: Nassau Cnty Strip Search Cases" on Justia Law