Justia Civil Procedure Opinion Summaries

The class’s version of events painted the Hutchenses as cunning con artists who "puppeteered" a advance-fee loan scam from afar. Defendants Sandy Hutchens, Tanya Hutchens, and Jennifer Hutchens, a three-member family who purportedly orchestrated a loan scam, challenged a district court’s rulings to avoid paying all or part of the judgment against them brought pursuant to a class action suit. The Tenth Circuit concluded almost all of those challenges failed, including their challenges to the jury’s verdict, class certification, proximate causation, and the application of the equitable unclean hands defense. However, the Court agreed with the Hutchenses’ position on the district court’s imposition of a constructive trust on some real property allegedly bought with the swindled fees. The Court therefore affirmed in part, reversed in part, and remanded to the district court for entry of a revised judgment. View "CGC Holding Company v. Hutchens" on Justia Law

Pagliacci Pizza hired Steven Burnett as a delivery driver. Steven Burnett attended a mandatory new employee orientation at a local Pagliacci Pizza. During the orientation, Pagliacci gave Burnett multiple forms and told him to sign them so that he could start working. One of the forms that Burnett signed was a one-page “Employee Relationship Agreement” (ERA). The ERA mentioned nothing about arbitration of disputes. Pagliacci’s “Mandatory Arbitration Policy” (MAP) was printed in Pagliacci’s employee handbook, “Little Book of Answers,” a 23-page booklet in which Pagliacci’s MAP appeared on page 18. The MAP was not listed in the handbook’s table of contents, and page 18 fell within the “Mutual Fairness Benefits” section. Burnett was given a copy of Little Book of Answers during his orientation and told to read it at home. Consistent with that instruction, the ERA contained a section entitled “Rules and Policies.” Delivery drivers like Burnett filed a class action alleging wage and hour claims against Pagliacci Pizza. At issue on interlocutory review was whether the trial court sustainably denied the employer’s motion to compel arbitration. The Court of Appeals affirmed, determining that the mandatory arbitration policy contained in the employee handbook, which was provided to the named plaintiff after he signed the employment relationship agreement, was procedurally and substantively unconscionable and, thus, unenforceable. The Washington Supreme Court held that the MAP at issue in this case was indeed unenforceable because no arbitration agreement was formed when the employee signed the employment agreement when he had no notice of the arbitration provision contained in the employee handbook. The Court also held that in light of the noted circumstances, even if an arbitration contract existed, it was procedurally unconscionable and unenforceable. Furthermore, the Court held the same arbitration provision was substantively unconscionable because its one-sided terms and limitation provisions would bar any claim by the terminated employee here, an overly harsh result. Accordingly, the trial court’s order denying the employer’s motion to compel arbitration was affirmed and the matter remanded for further proceedings. View "Burnett v. Pagliacci Pizza, Inc." on Justia Law

Plaintiffs filed suit against CareFirst after hackers allegedly stole sensitive customer information from the health insurer's data system, alleging tort, contract, and statutory claims. The district court dismissed all claims of five plaintiffs and most claims of two plaintiffs. At issue was whether the district court permissibly certified the dismissed claims under Federal Rule of Civil Procedure 54(b), so as to make the dismissal order final and immediately appealable.The DC Circuit held that it lacked appellate jurisdiction over the certified claims of the Tringlers and of the other plaintiffs. Under basic principles of claim preclusion, the court explained that the Tringlers could not have litigated to judgment one action involving the claims still pending before the district court and another involving the claims already dismissed. Under Tolson v. United States, 732 F.2d 998, 1001–03 (D.C. Cir. 1984), they likewise cannot sever the latter claims for an immediate appeal under Rule 54(b). In regard to the non-Tringler claims, the court stated that it is unclear whether the district court would have certified these claims for immediate appeal had it properly declined to certify the claims of the Tringlers. Therefore, the court cannot determine whether the district court would have certified only the non-Tringler claims, much less whether it could have come up with a permissible justification for doing so. View "Attias v. CareFirst, Inc." on Justia Law

Named plaintiffs filed a putative class action in Illinois, alleging that defendants made false claims about dietary supplements. The parties negotiated a settlement. Over the objection of class member Frank, the district court approved it. The Seventh Circuit reversed. In 2015, the parties submitted “the Pearson II settlement.” Three class members objected to the Pearson II settlement.Nunez had filed his own putative class action against the defendants in California. After the Seventh Circuit vacated the first Pearson settlement, Nunez wanted to represent a Pearson subclass. The Pearson parties refused to include Nunez’s counsel in their negotiations. Nunez objected to the Pearson II settlement. The district court approved it. All three objectors appealed, then dismissed their appeals. Frank moved for disgorgement of any payments made to objectors in exchange for those dismissals. Discovery showed that the objectors had received side payments in exchange for dismissing their appeals. The district court denied disgorgement.The Seventh Circuit reversed. The district court had the equitable power to order the settling objectors to disgorge for the benefit of the class the proceeds of their private settlements. “Falsely flying the class’s colors, these three objectors extracted $130,000 in what economists would call rents from the litigation process simply by showing up and objecting" to the settlement.” Settling an objection that asserts the class’s rights in return for a private payment to the objector is inequitable and disgorgement is the most appropriate remedy. Those objectors are, in essence, “not paid for anything they owned.” View "Frank v. Target Corp." on Justia Law

Plaintiff filed a class action in state court alleging that Costco violated California Labor Code 1198 by failing to provide her and other employees suitable seating. After Costco removed the case to federal court under 28 U.S.C. 1332(a) and the Class Action Fairness Act (CAFA), the district court ultimately granted summary judgment to plaintiff.The Ninth Circuit vacated the district court's grant of summary judgment with instructions to remand to state court, holding that the district court lacked subject matter jurisdiction at the time the action was removed to federal court. The panel first held that the district court lacked diversity jurisdiction under section 1332(a). The panel explained that, because plaintiff's pro-rata share of civil penalties, including attorney's fees, totaled $6,600 at the time of removal, and the claims of other member service employees may not be aggregated under Urbino v. Orkin Services of California, Inc., 726 F.3d 1118 (9th Cir. 2013), the $75,000 jurisdictional threshold was not met. The panel also held that the district court lacked subject matter jurisdiction under CAFA because plaintiff's stand-alone Private Attorney General Act lawsuit was not, and could not have been, filed under a state rule similar to a Rule 23 class action. Therefore, the district court erred by not remanding the case to state court. View "Canela v. Costco Wholesale Corp." on Justia Law

Plaintiff Regina Little asserted claims on her own behalf and on behalf of other New Jersey owners and lessees of 1997, 1998, 1999, and 2000 Kia Sephia vehicles distributed by defendant Kia Motors America, Inc., alleging that those vehicles had a defective brake system. The central question in this appeal was whether the trial court properly permitted plaintiff’s theory of damages based on the cost of brake repairs to be asserted classwide, supported only by aggregate proofs. The jury determined that defendant had breached its express and implied warranties and that the class had sustained damages. The jury found that the class members had suffered $0 in damages due to diminution in value but that each class member had sustained $750 in damages “[f]or repair expenses reasonably incurred as a result of the defendant’s breach of warranty.” The trial court granted defendant’s motion to decertify the class as to the quantum of damages each individual owner suffered. The parties cross-appealed. The Appellate Division reversed the trial court’s post-trial determinations, reinstated the jury’s award for out-of-pocket repair costs based on plaintiff’s aggregate proofs, and remanded for an award of attorneys’ fees. The appellate court held that, notwithstanding the jury’s rejection of plaintiff’s diminution-in-value theory, the trial court should have ordered a new trial on both theories of damages, which it found were not “fairly separable from each another.” Although aggregate proof of damages can be appropriate in some settings, the New Jersey Supreme Court considered such proof improper as presented in this case. The trial court erred when it initially allowed plaintiff to prove class-members’ out-of-pocket costs for brake repairs based on an estimate untethered to the experience of plaintiff’s class. The trial court properly ordered individualized proof of damages on plaintiff’s brake-repair claim based on the actual costs incurred by the class members. Thus, the trial court’s grant of defendant’s motions for a new trial and for partial decertification of the class were a proper exercise of its discretion. View "Little v. Kia Motors America, Inc." on Justia Law

The Court of Appeals affirmed a superior court decision to certify a class action lawsuit against The Medical Center, Inc. ("TMC"). Class representatives were uninsured patients who received medical treatment from TMC and who claimed that TMC charged them unreasonable rates for their medical care, which rates TMC then used as a basis for filing hospital liens against any potential tort recovery by the patients. The Court of Appeals also ruled on the causes of action raised by the plaintiffs. The Georgia Supreme Court granted certiorari to answer three questions: (1) whether the Court of Appeals erred in its determination that class certification was proper; (2) whether the Court of Appeals erred in affirming the denial of summary judgment for TMC on common law claims of fraud and negligent misrepresentation; and (3) whether the Court of Appeals erred in reversing the denial of summary judgment to TMC on claims brought under the Georgia RICO Act. The Supreme Court concluded the Court of Appeals erred with regard to the first two questions, but not the third. Therefore, judgment was reversed in part, affirmed in part and remanded for further proceedings. View "Bowden v. The Medical Center" on Justia Law

Plaintiff Sofia Barriga filed this lawsuit against 99 Cents Only Stores LLC, (99 Cents) individually, and on behalf of similarly situated current and former nonexempt employees of 99 Cents hired before October 1, 1999, pleading various Labor Code violations and violation of the unfair competition law. Plaintiff alleged 99 Cents had a zero-tolerance policy that required its stores to lock their doors at closing time, therefore, forcing nonexempt, nonmanagerial employees, who worked the graveyard shift and clock out for their meal break or at the end of their shift, to wait for as long as 15 minutes for a manager with a key to let them out of the store. According to plaintiff, 99 Cents did not pay its employees for the time they had to wait be let out, and the policy denied employees their full half-hour meal break. Plaintiff moved the trial court to certify two classes: (1) “Off the Clock Class,” and (2) “Meal Period Class.” 99 Cents opposed the certification motion, contending there was no community of interests among putative class members, and the lack of common issues among putative class members would render a class action unmanageable. Plaintiff moved to strike 174 declarations of employee declarants who were members of the proposed classes on the grounds the process by which they had been obtained was improper, and because they were substantively inconsistent with the subsequent deposition testimony of 12 of declarants. Concluding it lacked the statutory authority to strike the declarations, the trial court denied plaintiff’s motion to strike. And, based on all 174 declarations, the court concluded plaintiff had not demonstrated a community of interests or a commonality of issues among putative class members. Plaintiff appealed those orders. The Court of Appeal found the record demonstrated the trial court in this case was unaware of the need to scrutinize 99 Cents’ declarations carefully, and was either unaware of or misunderstood the scope of its discretion to either strike or discount the weight to be given the 174 declarations, including the declarations of employees who were not members of the putative classes, if it concluded they were obtained under coercive or abusive circumstances. The orders denying plaintiff’s motion to strike 99 Cents’ declarations and class certification motion were reversed, and the matter remanded for reconsideration. View "Barriga v. 99 Cents Only Stores LLC" on Justia Law

In the 2005 Burakoff class action, the court (in 2008) certified two subclasses of California Bancorp financial consultants for a period running through the date of the order. Subclass A “worked more than 40 hours in a week or 8 hours in a day, but did not receive overtime pay.” Subclass B were illegally required to pay their business expenses. Williams joined Bancorp in 2007, becoming a member of the Burakoff putative class. In 2010, he filed another class action, alleging similar causes of action for a class period beginning the day after the Burakoff class period ended, with consistent subclasses.The trial court stayed the Williams case pending Burakoff's resolution. In 2011, the court decertified the Burakoff overtime subclass, for lack of sufficient commonality. In 2012, the parties settled Burakoff. Williams participated in that settlement as a member of Subclass B. He did not, nor did any absent members of Subclass A, release his wage and hour claims. Bancorp then demanded arbitration under an agreement Williams had signed. Bancorp argued the Burakoff decertification order collaterally estopped Williams from relitigating the appropriateness of class certification. Williams agreed to the dismissal of his claim for unpaid business expenses. Following a remand, the trial court granted a motion to compel arbitration of Williams’s individual claims, concluding that a class decertification order may have collateral estoppel effect. The court of appeal reversed. An order denying certification to a proposed class does not preclude an absent member of the putative class from later seeking to certify an identical class in a second action; collateral estoppel does not bar an absent member in a putative class that was initially certified, but later decertified, from subsequently pursuing an identical class action. View "Williams v. U.S. Bancorp Investments, Inc." on Justia Law

The Sabine River meanders between Texas and Louisiana. Two state agencies jointly regulate its waterways and operate a hydroelectric plant--the Toledo Bend Reservoir and Toledo Bend Dam. In March 2016, heavy rains led to heavy water inflow into the reservoir and flooding of the River. The plaintiffs, about 300 Texas and Louisiana property owners, alleged that the flooding of their property was caused or exacerbated by the reservoir’s water level becoming too high and the spillway gates at the reservoir being intentionally opened. The defendants removed the case to federal court, which remanded back to Texas state court. The cases were removed again. The Texas federal district court denied a motion to remand but later dismissed all claims against private power companies and remanded the claims against the state authorities to state court.The Fifth Circuit affirmed. Federal jurisdiction obtained at the time of removal because the suit then qualified as a “mass action” under the Class Action Fairness Act (CAFA), 28 U.S.C. 1332(d)(11)(A); an exception for a local single event does not apply. CAFA mass actions “may be removed by any defendant without the consent of all defendants.” The court upheld the dismissals of the power companies based on findings that the plaintiffs did not adequately allege any violations of the FERC license; that under Texas law, only state authorities may be found liable for floodwater damage; and that the plaintiffs failed to show that the operation of the generators was a proximate cause of plaintiffs’ losses. View "Bonin v. Sabine River Authority of Louisiana" on Justia Law