Articles Posted in Class Action

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Plaintiffs filed a putative class action, alleging that defendants (insurance providers, banks, and credit card companies) targeted credit card holders with fraudulent solicitations for illegal accidental disability and medical expense insurance policies. Plaintiffs were among the cardholders who purchased those policies, which plaintiffs allege were void ab initio because they violated New York insurance law. Although plaintiffs did not suffer qualifying losses or make claims for coverage, they argued that they are nevertheless entitled to reimbursement of the premiums and fees they paid defendants, plus enhanced damages, based on quasi‐contract, civil fraud, and statutory claims. The district court dismissed the suit, reasoning that plaintiffs could not establish the injury‐in‐fact element of Article III standing. The court concluded the policies were not void ab initio because under a New York savings statute, plaintiffs would have received coverage had they filed claims for qualifying losses, N.Y. Ins. Law 3103. The Second Circuit vacated, stating that an Article III court must resolve the threshold jurisdictional standing inquiry before it addresses the claim's merits. The district court’s analysis conflated the requirement for an injury in fact with the underlying validity of plaintiffs’ arguments, and engaged a question of New York state law that the state courts have yet to answer. View "DuBuisson v. Stonebridge Life Insurance Co." on Justia Law

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Employees of Wells Fargo filed putative class arbitrations before the American Arbitration Association, seeking unpaid overtime from Wells Fargo. The Second Circuit affirmed the district court's denial of Wells Fargo's petitions seeking to compel bilateral, rather than class, arbitration. The court assumed without deciding that the question whether an arbitration clause authorized class arbitration was a so-called "question of arbitrability" presumptively for a court, rather than an arbitrator, to decide. Therefore, applying Missouri's arbitration and contract law, the court held that the parties overcame this presumption by clearly and unmistakably expressing their intent to let an arbitrator decide whether they agreed to authorize class arbitration. View "Wells Fargo Advisors, LLC v. Sappington" on Justia Law

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Employees of Wells Fargo filed putative class arbitrations before the American Arbitration Association, seeking unpaid overtime from Wells Fargo. The Second Circuit affirmed the district court's denial of Wells Fargo's petitions seeking to compel bilateral, rather than class, arbitration. The court assumed without deciding that the question whether an arbitration clause authorized class arbitration was a so-called "question of arbitrability" presumptively for a court, rather than an arbitrator, to decide. Therefore, applying Missouri's arbitration and contract law, the court held that the parties overcame this presumption by clearly and unmistakably expressing their intent to let an arbitrator decide whether they agreed to authorize class arbitration. View "Wells Fargo Advisors, LLC v. Sappington" on Justia Law

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Plaintiffs, holders of Petrobras equity, filed a class action against various defendants after the multinational oil and gas company was involved in money-laundering and kickback schemes. The district court certified two classes: the first asserting claims under the Securities Exchange Act of 1934, 15 U.S.C. 78a et seq.; and the second asserting claims under the Securities Act of 1933,15 U.S.C. 77a et seq. The Second Circuit clarified the scope of the contested ascertainability doctrine and held that a class is ascertainable if it is defined using objective criteria that establish a membership with definite boundaries. That threshold requirement was met in this case. The court held that the district court committed legal error by finding that Federal Rule of Civil Procedure 23(b)(3)'s predominance requirement was satisfied without considering the need for individual Morrison v. National Australia Bank Ltd., 561 U.S. 247 (2010), inquiries regarding domestic transactions. Therefore, the court vacated this portion of the Certification Order. The court also held that the district court did not abuse its discretion by determining that the Exchange Act class met their burden under Basic Inc. v. Levinson, 485 U.S. 224 (1988), with a combination of direct and indirect evidence of market efficiency.  Accordingly, the court affirmed as to this issue. View "In re Petrobras Securities" on Justia Law

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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