Articles Posted in Class Action

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Plaintiffs each received a letter from GC, a debt collector, notifying them that their credit-card accounts had been referred for collection. The letters contained the name and address of the original creditor and stated: [I]f you do dispute all or any portion of this debt within 30 days of receiving this letter, we will obtain verification of the debt from our client and send it to you. Or, if within 30 days of receiving this letter you request the name and address of the original creditor, we will provide it to you in the event it differs from our client, Synchrony Bank. Plaintiffs assert that the letters were deficient under the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. 1692, in failing to inform Plaintiffs that GC was obligated to provide the additional debt and creditor information only if Plaintiffs disputed their debts in writing. Plaintiffs filed a purported class action. The court determined that GC’s letters created a “substantial” risk that consumers would waive important FDCPA protections by following GC’s deficient instructions, and certified a class of Kentucky and Nevada consumers, rejecting GC’s argument that Federal Rule of Civil Procedure 23 was not satisfied because Plaintiffs had not shown that each class member had standing. The Sixth Circuit affirmed, rejecting arguments that that the alleged FDCPA violations did not constitute harm sufficiently concrete to satisfy the injury-in-fact requirement of standing. Plaintiffs have Article III standing. View "Macy v. GC Services Limited Partnership" on Justia Law

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In 2008, plaintiffs filed a class action concerning 540 properties in Dayton’s McCook Field neighborhood, alleging that the groundwater is contaminated with carcinogenic volatile organic compounds, released by defendants’ automotive and dry cleaning facilities. The EPA designated the area as a Superfund site. Plaintiffs have access to municipal drinking water but the contaminated groundwater creates the risk of VOC vapor intrusion into buildings so that Plaintiffs may inhale carcinogenic and hazardous substances. A school was closed and demolished when vapor mitigation systems were unable to adequately contain the levels of harmful substances. After the suit was removed to federal court under the Class Action Fairness Act, 28 U.S.C. 1332(d)(2) and consolidated with related actions, Plaintiffs sought Rule 23(b)(3) liability-only class certification for five of their 11 causes of action—private nuisance, negligence, negligence per se, strict liability, and unjust enrichment. Alternatively, they requested Rule 23(c)(4) certification of seven common issues. The court determined that although the proposed classes satisfied Rule 23(a)’s prerequisites, Ohio law regarding injury-in-fact and causation meant that plaintiffs could not meet Rule 23(b)(3)’s predominance requirement and denied certification of the proposed liability-only classes. The court then employed the “broad view” and certified seven issues for class treatment. The Sixth Circuit affirmed. The certified classes satisfy requirements of predominance and superiority. Each issue may be resolved with common proof and individualized inquiries do not outweigh common questions. Class treatment of the certified issues will not resolve liability entirely, but will materially advance the litigation. View "Martin v. Behr Dayton Thermal Products, LLC" on Justia Law

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In 1991, Norton merged predecessor retirement plans into one Plan governed by ERISA. As of 1997, the Plan included a traditional defined-benefit formula applicable to members of the predecessor plans and a cash-balance formula applicable to all other plans. In 2004, the Plan was amended to end accruals under the defined-benefit formulas and allow further accruals only under the cash-balance benefit formula. The Plan allows disability retirement, “normal” age 65 retirement, late retirement, and early retirement, for participants at least 55 years old with at least 10 years of service. The Plan allows retirees to take benefits in the “Basic Form” or in one of six alternative forms, including a lump-sum payment on the date of retirement. In 2008, the Retirees brought a putative class action, alleging Norton underpaid retirees who took a lump-sum payment. The court certified a class in 2011 and eventually granted the Retirees summary judgment. Damages were not reduced to a sum certain, but the court adopted the Retirees’ calculation formula, awarded fixed-rate pre-judgment interest, and entered final judgment. The Sixth Circuit vacated, finding the Plan ambiguous, with respect to calculation of benefits, and possibly noncompliant with ERISA, with respect to actuarial calculations. The court vacated class certification under Rule 23(b)(1)(A) and (b)(2). The court held that if the Plan clearly gives the administrator “Firestone” deference, interpretation against the draftsman has no place in reviewing the administrator’s decisions. The arbitrary-and-capricious standard stays intact. View "Clemons v. Norton Healthcare Inc. Retirement Plan" on Justia Law

Posted in: Class Action, ERISA

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Mohawk, a seller of prescription drugs sent junk faxes to medical providers, advertising the seller’s prices on Bristol-Myers and Pfizer drugs. A recipient filed a putative class-action lawsuit under the Telephone Consumer Protection Act, which makes it unlawful “to send . . . an unsolicited advertisement” to a fax machine, 47 U.S.C. 227(b)(1)(C). Plaintiff first asserted claims only against Mohawk, which never answered the complaint. The district court entered a default judgment. Plaintiff then amended its complaint to assert claims against Bristol and Pfizer, arguing that they had “sent” the unsolicited faxes simply because the faxes mentioned their drugs. The Sixth Circuit affirmed the dismissal of the complaint. To be liable, a defendant must “use” a fax machine or other device “to send . . . an unsolicited advertisement” to another fax machine. Bristol and Pfizer neither caused the subject faxes to be conveyed nor dispatched them in any way; only Mohawk did those things. Bristol and Pfizer, therefore, did not “send” the faxes and thus have no liability for them. View "Health One Medical Center v. Bristol-Myers Squibb Co." on Justia Law

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Plaintiffs, members of Global Fitness gyms, believed that Global misrepresented the terms of its gym memberships and sued as a class. The parties settled: Global agreed to pay $1.3 million to the class members, class counsel’s fees as ordered by the court, and the claims administrator’s fees and costs. The court approved the agreement over the objections of some class members and ordered its implementation. The Sixth Circuit affirmed. The Supreme Court denied certiorari. In the meantime, Global had sold all of its gyms and funneled $10.4 million of the proceeds to its managers through “tax distributions.” The payments Global owed to the class were in escrow under the terms of the settlement agreement, which made no similar provision for class counsel and the claims administrator. Days before its payment obligation under the agreement came due, Global notified the court it could not meet its remaining obligations. The court held Global Fitness and its managers in civil contempt. The Sixth Circuit reversed. Global had no legal obligation to conserve funds to pay class counsel and the claims administrator while the appeals were pending. Its obligation to pay became definite and specific only once the appeals were exhausted. The court erred in considering any of Global’s conduct from before that date and by holding the managers jointly and severally liable. View "Gascho v. Global Fitness Holdings, LLC" on Justia Law

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In the 1980s, merchant marine plaintiffs filed asbestos-liability suits against ship-owner and manufacturer defendants in the Northern District of Ohio. That court ruled, in 1989, that it lacked personal jurisdiction over many of the defendants. Instead of dismissing those defendants, the court stated that if a defendant did not wish to be transferred, it could “waive the in personam jurisdiction problem” by filing an answer. Some did so. In 1990, the court ordered the transfer of some cases to scattered venues. Those transfers did not occur. Certain defendants sought to appeal the order, specifically stating that they did not waive jurisdiction. The court did not certify the interlocutory appeal. Eventually, the cases were consolidated into multidistrict litigation in the Eastern District of Pennsylvania. Certain defendants objected, arguing that they had been “strong-armed” into submitting to Ohio jurisdiction. The Pennsylvania court held that the N.D. of Ohio lacked personal jurisdiction over the relevant defendants and that those defendants had not waived or forfeited their personal jurisdiction defense. Thousands of parties were dismissed. Ten plaintiffs appealed the Pennsylvania’s decision as to 19 defendants. The Sixth Circuit affirmed. The Pennsylvania district court did not abuse its discretion in holding that the ship-owner defendants had not waived their personal jurisdiction defense by filing answers in the N.D. of Ohio and had no authority to transfer the cases to jurisdictions that did have jurisdiction. View "Kalama v. Matson Navigation Co." on Justia Law

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The Class Action Fairness Act extends federal court jurisdiction to class actions on behalf of 100 or more people and in request of $5 million or more in damages if “any member of a class of plaintiffs is a citizen of a State different from any defendant,” 28 U.S.C. 1332(d)(2)(A), (d)(5), (d)(6). Roberts filed a class action on behalf of Tennessee citizens against Mars, a citizen of Tennessee and Delaware, alleging a conspiracy to employ a “prescription-authorization requirement” to sell pet food at above market prices in violation of the Tennessee Trade Practices Act. Mars removed the case to federal court, invoking its Delaware citizenship and claiming its Tennessee citizenship did not matter. The Sixth Circuit reversed the district court’s denial of plaintiffs’ motion for remand to state court. Because section 1332(d)(2)(A) refers to all of a defendant’s citizenships, not the alternative that suits it, Mars cannot rely on its state of incorporation (Delaware) and ignore its principal place of business (Tennessee) to create diversity under the Act. View "Roberts v. Mars Petcare US, Inc." on Justia Law

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In 2010, Besse, a pharmaceutical distributor, sent a one-page fax advertising the drug Prolia to 53,502 physicians. Only 40,343 of these faxes were successfully transmitted. Sandusky, a chiropractic clinic that employed one of the physicians, claims to have received this “junk fax,” and, three years later, filed a lawsuit under the Telephone Consumer Protection Act, 47 U.S.C. 227. The district court denied Sandusky’s motion for class certification. It held that Sandusky’s proposed class failed to satisfy Rule 23(b)(3) because two individualized issues—class member identity and consent—were central to the lawsuit and thus prevented “questions of law or fact common to class members [from] predominat[ing].” In the absence of fax logs, no classwide means existed by which to identify the 75% of individuals who received the Prolia fax; “each potential class member would have to submit an affidavit certifying receipt of the Prolia fax.” The Sixth Circuit affirmed, noting that Besse presented actual evidence of consent to the district court, which required the need for individualized inquiries in order to distinguish between solicited and unsolicited Prolia faxes. The court stated that it was unaware of any court that ever mandated certification of a TCPA class where fax logs did not exist. View "Sandusky Wellness Center, LLC v. ASD Specialty Healthcare, Inc." on Justia Law

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The National Labor Relations Board sought enforcement of its Order finding that AEI violated the National Labor Relations Act by barring employees from pursuing class-action litigation or collective arbitration of work-related claims and by forbidding an AEI technician from discussing a proposed compensation change with his coworkers and by firing that technician for discussing the proposed change and complaining to management about it. AEI employees sign an agreement that “Disputes … relating to your employment” must, at the election of the employee or the company, be resolved “exclusively through binding arbitration” and that “you and AEI also agree that a claim may not be arbitrated as a class action, also called ‘representative’ or ‘collective’ actions, and that a claim may not otherwise be consolidated or joined with the claims of others.” AEI’s employee handbook prohibits “[u]nauthorized disclosure of business secrets or confidential business or customer information, including any compensation or employee salary information.” The Sixth Circuit enforced the order. An arbitration provision requiring employees covered by the Act individually to arbitrate all employment-related claims is not enforceable. The evidence was adequate to support the ALJ’s factual findings and conclusion that DeCommer was fired for engaging in protected, concerted activity View "National Labor Relations Board v. Alternative Entertainment, Inc." on Justia Law

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After the city began using the Flint River as its water source in 2014, residents complained that the water was discolored and foul-smelling. There were reports of skin rashes, hair loss, and vomiting after drinking and bathing in the water. Many children were found to have high levels of lead in their blood stream. In 2016, plaintiffs filed this putative class action in Michigan state court, claiming negligence, intentional and negligent infliction of emotional distress, and unjust enrichment. The defendants include several entities related to the city's expert water consultants. A defendant removed the case to district court under the Class Action Fairness Act of 2005 (CAFA), 28 U.S.C. 1332(d), asserting that the amount in controversy exceeded $5 million, the putative class comprised at least 100 members, and there was the minimal diversity of citizenship required by CAFA. The district court remanded, citing the local controversy exception, under which a district court must decline to exercise CAFA jurisdiction. The Sixth Circuit reversed, finding that the exception did not apply because other class actions had been filed in the previous three years, asserting the same or similar factual allegations against the defendants. View "Davenport v. Lockwood, Andrews & Newnam, Inc." on Justia Law