Justia U.S. 2nd Circuit Court of Appeals Opinion Summaries

Plaintiffs initially filed suit in state court seeking to enjoin defendant insurers under New York law from obtaining reimbursement of medical benefits from plaintiffs' tort settlements. Defendants removed to federal court where the district court granted defendants' motion to dismiss under Rule 12(b)(6). The court held that plaintiffs' claims did not satisfy the Supreme Court's test for being subject to complete Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. 1001 et seq., preemption, which would have conferred federal subject-matter jurisdiction; such jurisdiction exists, however, under the Class Action Fairness Act (CAFA), 28 U.S.C. 1332(d); therefore, the court reached the merits of the express preemption defense and concluded that N.Y. Gen. Oblig. Law 5-335 is saved from express preemption under ERISA section 514, as a law that "regulates insurance;" and therefore, the court vacated and remanded for further proceedings.View "Wurtz v. The Rawlings Co." on Justia Law

Non-Settling Defendants seek to overturn a partial final judgment approving the settlement of certain putative class actions. The settled claims were brought by Investor Plaintiffs who were individual and institutional investors in so-called Bernard Madoff feeder funds managed by the Fairfield Greenwich Group (Settling Defendants). The Non-Settling Defendants challenged a provision in the settlement agreement that provides that investors who filed claims under the settlement submit to the district court's jurisdiction for the sole purpose of participating in the settlement and not for any other purpose. The court joined its sister circuits in holding that a settlement which does not prevent the later assertion of a non-settling party's claims, does not cause the non-settling party "formal" legal prejudice. Therefore, the court concluded that the Non-Settling Defendants did not have standing to object to the settlement. The court declined to address the remaining issues on appeal and dismissed for lack of standing. View "Pricewaterhousecoopers, LLP, et al. v. Bhatia, et al." on Justia Law

Plaintiffs filed a putative class action against MERS in state court asserting claims related to MERS's facilitation of the provision of "Esign" mortgages to consumer-borrowers. MERS appealed the district court's grant of a motion to remand to New York state court on the ground that MERS's notice of removal was untimely. The court reversed and held that, in Class Action Fairness Act (CAFA) cases, the 30-day removal periods of 28 U.S.C. 1446(b)(1) and (b)(3) are not triggered until the plaintiff serves the defendant with an initial pleading or other paper that explicitly specifies the amount of monetary damages sought or sets forth facts from which an amount in controversy in excess of $5,000,000 can be ascertained. The court also held that where a plaintiff's papers failed to trigger the removal clocks of sections 1446(b)(1) and (b)(3), a defendant may remove a case when, upon its own independent investigation, it determines that the case is removable. Therefore, the 30-day removal periods of sections 1446(b)(1) and (b)(3) are not the exclusive authorizations for removal in CAFA cases. In this instance, plaintiffs never served MERS with a complaint or subsequent document explicitly stating the amount in controversy or providing MERS with sufficient information to conclude the threshold amount in controversy was satisfied. Therefore, the removal clocks of section 1446(b)(1) and (b)(3) did not commence. After MERS determined upon its independent investigation that section 1332(d) conveyed CAFA federal jurisdiction because the amount in controversy, number of plaintiffs, and minimal diversity requirements were satisfied, it properly removed the case by alleging facts adequate to establish the amount in controversy in its notice of removal. Accordingly, the court vacated and remanded. View "Cutrone v. Mortgage Electronic Registration Systems, Inc." on Justia Law

Plaintiff appealed the district court's dismissal sua sponte of his class actin complaint brought under the Telephone Consumer Protection Act (TCPA), 47 U.S.C. 227, for lack of subject matter jurisdiction, based on application of New York Civil Practice Law and Rules (CPLR) 901(b). CPLR 901(b) prohibits class action suits for statutory damages. The court concluded that, in light of Giovanniello v. ALM Media, LLC, Federal Rule of Civil Procedure 23, not state law, governs when a federal TCPA suit may proceed as a class action. Accordingly, the court vacated and remanded for further proceedings. View "Bank v. Independence Energy Group LLC" on Justia Law

Plaintiffs filed suit alleging that defendants had engaged in a conspiracy to fraudulently increase rents payable by tenants in over 400 buildings they owned in New York City, in violation of the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. 1961-1968, and the New York Consumer Protection Act (NYCPA), N.Y. Gen. Bus. Law 349(a). The parties subsequently agreed to a settlement. At issue on appeal was the fairness, adequacy, and reasonableness of the settlement. The court concluded that the district court's careful review of the settlement warranted the great deference the court normally accords to trial court findings with respect to the fairness of class action settlements. The court also concluded that a fundamental conflict did not exist between the members of the class, and that the Class Counsel's representation was adequate under Rule 12(a)(4). Therefore, it was not necessary to divide the class into subclasses with separate representation. To the extent that plaintiffs argued that the rejection of the settlement by all five remaining named class representatives requires its rejection, the court could not agree. Accordingly, the court affirmed the judgment of the district court. View "Charron v. Wiener" on Justia Law

Plaintiff filed suit against his former employer, New York Life, both individually and on behalf of a putative class of insurance agents. Plaintiff alleged state law claims seeking unpaid overtime wages and recovery of improper deductions, as well as statutory liquidated damages under New York Labor Law. On appeal, plaintiff challenged the district court's dismissal of his complaint based on the "home state exception" to federal jurisdiction under the Class Action Fairness Act (CAFA), 28 U.S.C. 1332(d). The court held that the home state exception was not jurisdictional and must be - and in this case was - raised within a reasonable time. Further, the 2011 amendment to New York Labor Law was not retroactive and the district court's grant of partial summary judgment with respect to plaintiff's overtime claim was correct. Accordingly, the court affirmed the judgment of the district court. View "Gold v. New York Life Ins. Co." on Justia Law

Plaintiffs alleged that USF engaged in a fraudulent scheme by which it artificially inflated the cost component of its cost-plus billing and then disguised the proceeds of its own inflated billing through the use of purported promotional allowances. At issue on interlocutory appeal was whether the district court abused its discretion in certifying a nationwide class consisting of about 75,000 USF "cost-plus" customers. The court affirmed the district court's certification of the class, concluding that, despite the size of the class and the fact that it implicated the laws of multiple jurisdictions, the district court correctly concluded that both the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. 1961-68, and contract claims were susceptible to generalized proof such that common issues would predominate over individual issues and a class action was superior to other methods of adjudication. View "In Re: US Foodservice Inc. Pricing Litig." on Justia Law

Plaintiffs filed putative class-action suits over ten years ago under the Alien Tort Statute (ATS), 28 U.S.C. 1350, on behalf of those harmed by the South African legal regime known as "apartheid." Plaintiffs asserted that defendants aided and abetted violations of customary international law committed by the South African government by selling cars and computers to the South African government. Defendants petitioned for mandamus relief. The court concluded that, in light of the Supreme Court's decision in Kiobel v. Royal Dutch Petroleum Co., issuance of the writ was unnecessary in this case because defendants have an adequate means of relief through a motion for judgment on the pleadings; plaintiffs' arguments that Kiobel did not apply where defendants were American citizens, or where the case involved American interests, were without merit; and, because the Kiobel decision plainly foreclosed plaintiffs' claims as a matter of law, the court need not consider whether defendants have asserted a valid basis for "collateral order" jurisdiction under 28 U.S.C. 1291. Accordingly, the court denied the petition for mandamus relief and vacated the stay placed by the court on proceedings in the district court. View "Balintulo v. Daimler AG" on Justia Law

E&Y appealed from the district court's order denying its motion to dismiss or stay proceedings, and to compel arbitration, in a putative class action brought by its former employees. At issue on appeal was whether an employee could invalidate a class-action waive provision in an arbitration agreement when that waiver removed the financial incentive for her to pursue a claim under the Fair Labor Standards Act of 1938 (FLSA), 29 U.S.C. 201, et seq. The court held that the FLSA did not include a "contrary congressional command" that prevented a class-action waiver provision in an arbitration agreement from being enforced by its terms. The court also held that, in light of the supervening decision of the Supreme Court in American Express Co v. Italian Colors Restaurant, the employee's argument that proceeding individually in arbitration would be "prohibitively expensive" was not a sufficient basis to invalidate the action waiver provision at issue here under the "effective vindication doctrine." Accordingly, the court reversed and remanded for further proceedings. View "Sutherland v. Ernst & Young LLP" on Justia Law

Plaintiffs filed a putative class action seeking to hold ProShares liable for material omissions and misrepresentations in the prospectuses for certain exchange-traded funds (ETFs) under the Securities Act of 1933, 15 U.S.C. 77k and 77o. Plaintiffs alleged that registration of statements omitted the risk that the ETFs, when held for a period of greater than one day, could lose substantial value in a relatively brief period of time, particularly in periods of high volatility. The district court concluded that the disclosures at issue accurately conveyed the specific risk that plaintiffs asserted materialized. The court agreed with the district court's conclusion that the relevant prospectuses adequately warned the reasonable investor of the allegedly omitted risks. View "In Re: ProShares Trust Sec. Litig." on Justia Law