Justia U.S. 6th Circuit Court of Appeals Opinion SummariesArticles Posted in Class Action
Canaday v. The Anthem Companies, Inc.
Anthem provides health insurance and hires nurses to review insurance claims. The company pays those nurses a salary but does not pay them overtime. Canaday, an Anthem nurse who lives in Tennessee, filed a proposed collective action under the Fair Labor Standards Act (FLSA), 29 U.S.C. 206. claiming that the company misclassified her and others as exempt from the Act’s overtime pay provisions. A number of Anthem nurses in other states opted into the collective action.The Sixth Circuit affirmed the dismissal of the out-of-state plaintiffs on personal jurisdiction grounds. In an FLSA collective action, as in the mass action under California law, each opt-in plaintiff becomes a real party in interest, who must meet her burden for obtaining relief and satisfy the other requirements of party status. Anthem is based in Indiana, not Tennessee. General jurisdiction is not an option for out-of-state claims. Specific jurisdiction requires a connection between the forum and the specific claims at issue. The out-of-state plaintiffs have not brought claims arising out of or relating to Anthem’s conduct in Tennessee. View "Canaday v. The Anthem Companies, Inc." on Justia Law
Messer v. Commissioner of Social Security
Attorney Conn represented Plaintiffs and thousands of others in seeking disability benefits from the Social Security Administration (SSA). Conn bribed doctors to certify false applications and bribed an ALJ to approve those applications. After Conn’s scheme was uncovered, SSA identified more than 1,700 approved applications that it believed might have been the product of fraud. SSA redetermined and denied Plaintiffs’ applications,Several class actions challenged the SSA’s redetermination procedures. The Martin case was dismissed without a class having been certified because the named plaintiffs failed to exhaust their administrative remedies. The Hughes case was stayed before a class was certified. In the meantime, the Sixth Circuit held that the SSA’s redetermination procedures violated due process. Plaintiffs had 60 days to seek judicial review of the SSA’s decision, 42 U.S.C. 405(g). Each waited more than two years. As absent Hughes class members, they relied on the Supreme Court’s “American Pipe” doctrine under which filing a class action pauses the deadlines for members to file related individual actions. Once the district court remanded Hughes, plaintiffs filed their civil actions.The district courts dismissed the suits as untimely. The Sixth Circuit reversed in part. American Pipe tolling continues after a district court denies a motion for class certification solely as a matter of docket management, without deciding that certification is unwarranted. The outright dismissal of an uncertified class action ends American Pipe tolling and restarts class members’ statute-of-limitations clocks. View "Messer v. Commissioner of Social Security" on Justia Law
In re: Hall
Objectors to a class action settlement in the Flint Water Cases sought to compel the district court to cease holding off-the-record substantive ex parte meetings that exclude objectors’ counsel; to order the participants at certain conferences to recount for the record their recollection of what transpired at those conferences; to order settling parties to identify any other substantive unrecorded conferences since February 26, 2021; and to refrain from continuing to prescribe or dictate the litigation strategy of the parties in advocating for the settlement.The Sixth Circuit denied the petition. Despite the seriousness of their allegations, petitioners must show that mandamus is the appropriate remedy. The district court has not approved the settlement; their objections remain pending. If the court overrules their objections, and if the petitioners believe this decision was because of some impropriety, they can bring a direct appeal. Petitioners have not shown a clear and indisputable right to the relief they seek. Requiring district courts to invite unnamed class members and individual attorneys to every proceeding risks the efficiency interests that class actions are meant to promote. District courts appoint interim lead and liaison counsel to represent the class’s interests in pre-judgment proceedings. The court’s order indicates that it is aware of its ethical obligations and plans to hear from objectors during the fairness hearing. View "In re: Hall" on Justia Law
In re: Automotive Parts Antitrust Litigation
A class of end-payor purchasers sued (Clayton Act, 15 U.S.C. 26; Sherman Act, 15 U.S.C. 1) manufacturers and suppliers, alleging that they conspired to fix prices of automotive anti-vibration rubber parts. The district court certified a nationwide settlement class comprising persons and entities who indirectly purchased anti-vibration rubber parts that were manufactured or sold by the defendants, excluding persons or entities who purchased parts directly or for resale.Before the court entered final judgments approving the "indirect purchaser" settlement, Plaintiffs filed a separate suit against the same defendants, in the same court, seeking damages under the Clayton Act on behalf of a putative class of “direct purchasers” of anti-vibration rubber parts. They alleged that they purchased parts “from an entity (Firestone retail shop) of which one of the Defendants (Bridgestone) is the ultimate parent”; Firestone is not a defendant in either lawsuit. Bridgestone is a defendant in both. The court entered final judgments in the end-payor lawsuit, enjoining all settlement class members from “commencing, prosecuting, or continuing . . . any and all claims” arising out of or relating to the released claims.Defendants moved to enjoin Plaintiffs from litigating their direct-purchaser lawsuit. The district court denied the motion, citing “Illinois Brick.” Under federal antitrust law, a private plaintiff generally must be a “direct purchaser” to have suffered injury and have standing to sue a manufacturer or supplier. In Illinois Brick, the Supreme Court recognized an exception, holding that an “indirect purchaser” might have standing if it purchased from an intermediary that was “owned or controlled” by the ultimate seller.The Sixth Circuit reversed. Regardless of whether Illinois Brick applies to plaintiffs’ underlying claims, plaintiffs fit within the class definition under the plain meaning of the settlement agreements. Their suit is therefore barred. View "In re: Automotive Parts Antitrust Litigation" on Justia Law
Smith v. General Motors LLC
In 2005-2006, GM changed the dashboard used for GMT900 model cars from a multi-piece design to a single-piece design, which made the dashboard prone to cracking in two places. Plaintiffs, from 25 states, alleged that GMT900 vehicles produced in 2007-2014 contained a faulty, dangerous dashboard and that GM knew of the defective dashboards before GTM900 vehicles hit the market. The complaint contained no allegation that any of the plaintiffs have been hurt by the allegedly defective dashboards. The complaint, filed on behalf of a nationwide class, alleged fraudulent concealment, unjust enrichment, and violations of state consumer protection statutes and the Magnusson-Moss Warranty Act.The Sixth Circuit affirmed the dismissal of the case. At worst, Plaintiffs suffered only cosmetic damage and a potential reduced resale value from owning cars with cracked dashboards. Although the plaintiffs claimed that routine testing, customer complaints, and increased warranty claims alerted GM to the defective dashboards and accompanying danger, that is not enough to survive a motion to dismiss without specifics about how and when GM learned about the defect and its hazards, and concealed the allegedly dangerous defect from consumers. Even accepting that GM produced defective vehicles, under the common legal principles of the several states, the plaintiffs must show that GM had sufficient knowledge of the harmful defect to render its sales fraudulent. View "Smith v. General Motors LLC" on Justia Law
In re: National Prescription Opiate Litigation
In multi-district litigation (MDL), the district court certified an opt-out “negotiation class” under Federal Rule of Civil Procedure 23, consisting of all cities and counties (34,458 identified entities) throughout the United States for purposes of negotiating a settlement. These municipalities brought RICO and Controlled Substances Act claims, alleging that opioid manufacturers, distributors, pharmacies, and retailers acted in concert to mislead medical professionals into prescribing, and millions of Americans into taking and often becoming addicted to, opiates. Unlike a litigation class, formed to aggregate and try common issues, the negotiation class would attempt to reach a settlement while the individual MDL cases continue on litigation paths. Negotiation class members would likely not have a second opportunity to opt-out and would have to decide at the class certification stage—without knowing the settlement figure— whether they wish to bind themselves. A proposed agreement could only be accepted if a supermajority of six categories of voting class members assent to it.Several defendants objected; 556 putative class members opted-out of the negotiation class. In consolidated appeals, the Sixth Circuit reversed the class certification. Rule 23 does not identify negotiation as a separate category of certification distinct from settlement. The negotiation class device frustrates a court’s analysis of whether a class action is the superior method of adjudication and avoids some of the procedural requirements of litigation class certification without halting the underlying litigation. View "In re: National Prescription Opiate Litigation" on Justia Law
Vicki Linneman v. Vita-Mix Corp.
Some Vita-Mix blenders contained tiny flecks of polytetrafluoroethylene, a substance commonly used in kitchen appliances and used in the blenders' seals. Normal wear-and-tear caused tiny pieces to rub off from the seal into the blender container. Blender owners filed this class action. The parties entered into a settlement for two classes of plaintiffs: a household class and a commercial class. Household class members could request either a $70 gift card or a replacement blade assembly. Commercial class members could request only a replacement blade assembly. The court preliminarily approved this settlement.The court calculated attorneys' fees by multiplying the hours class counsel reasonably worked on the case by a reasonable hourly rate, resulting in an award of about $2.2 million. Based on the purportedly exceptional nature of the litigation, the court enhanced that figure by 75% for a final award of about $4 million, plus post-judgment interest.The Sixth Circuit vacated. The district court correctly used the lodestar method of calculation and correctly interpreted the settlement agreement but erred when it determined the billing rates based on class counsel’s affidavits. A lawyer seeking fees has the burden to show the reasonableness of his billing rate with something in addition to the attorney’s own affidavits” The district court abused its discretion when it used an upward multiplier, without addressing a crucial question: whether this case involves “rare and exceptional circumstances.” The court upheld the award of post-judgment interest. View "Vicki Linneman v. Vita-Mix Corp." on Justia Law
Hicks v. State Farm Fire & Casualty Co.
Under its replacement-cost homeowner insurance contracts, State Farm calculated its payment obligations by estimating the amount it would cost to repair or replace damaged property and subtracting depreciation and the deductible. During the class period, State Farm depreciated costs for both materials and labor.Policyholders filed a putative class action. The Sixth Circuit held that in an insurance contract that incorporates Kentucky’s “replacement cost minus depreciation” formula, the insurer cannot depreciate the costs of labor when determining payments. State Farm changed its practice and created a refund program for those who had received payments between the decision and the date State Farm stopped deducting labor depreciation. Most policyholders received refunds of less than $1,000. The court certified the class as: All persons and entities that received “actual cash value” payments ... from State Farm … for loss or damage to a dwelling or other structure in … Kentucky ... where the cost of labor was depreciated," excluding those that received payment in the full amount of insurance.The Sixth Circuit affirmed. The claims share a common legal question central to the validity of each claim: whether State Farm breached the standard form contracts by deducting labor depreciation. No individualized proof is necessary to resolve this question on a classwide basis. That common question predominates over individual questions, although damages will vary. The court did not abuse its discretion in finding class litigation to be the superior method of adjudication and class membership is ascertainable View "Hicks v. State Farm Fire & Casualty Co." on Justia Law
Nessel v. AmeriGas Partners. L.P.
Michigan filed suit, alleging that AmeriGas, Michigan's largest provider of residential propane, violated the Michigan Consumer Protection Act (MCPA). Section 10 of the MCPA, Mich. Comp. Laws 445.910, titled “class actions by attorney general,” 10 states that: The attorney general may bring a class action on behalf of persons residing in or injured in this state for the actual damages caused by any of the following: (a) A method, act or practice in trade or commerce defined as unlawful under section 3 [unfair, unconscionable, or deceptive methods, acts, or practices].AmeriGas removed the case to federal court, citing the Class Action Fairness Act (CAFA), 119 Stat. 4. The district court remanded to state court, finding that the lawsuit did not qualify as a “class action” because Section 10 “lacks the core requirements of typicality, commonality, adequacy, and numerosity that are necessary to certify a class under [Federal Rule of Civil Procedure] 23.” The Sixth Circuit affirmed. Section 10 is not a state statute “similar” to Rule 23 for purposes of CAFA removability, 28 U.S.C. 1332(d)(1)(B). The court declined “to effectively invalidate the Michigan Legislature’s determination that an Attorney General should be able to sue for injuries to consumers pursuant to Section 10.” View "Nessel v. AmeriGas Partners. L.P." on Justia Law
McClain v. Hanna
McClain sued Hanna and Hanna’s two law firms under the Fair Debt Collection Practices Act, 15 U.S.C. 1692, and an analogous Michigan statute, Mich. Comp. Laws 445.251, asserting both individual and class claims. Within a week, Hanna offered McClain a settlement under Federal Rule of Civil Procedure 68. That settlement allowed judgment to be entered in McClain’s favor “as to all counts” of his complaint and gave McClain his full damages (both actual and statutory) plus his litigation costs and reasonable attorney’s fees. Four days later, McClain accepted the settlement offer but simultaneously filed a “placeholder” motion for class certification, apparently to preempt a mootness ruling. Even so, the district court found the class claims to be moot and dismissed both the individual and class claims. McClain noted that the settlement called for judgment in his favor; the court entered an amended judgment “for Plaintiff Theodore McClain as to all counts in Plaintiff’s complaint[.]” The Sixth Circuit affirmed, declining to address mootness because the judgment did not declare any of the claims moot. Parties may not challenge a judgment to which they have consented. McClain waived his right to pursue the class claims. View "McClain v. Hanna" on Justia Law