Articles Posted in Class Action

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Fulton received an unsolicited fax from Bisco and sued for damages under the Telephone Consumer Protection Act, 47 U.S.C. 227. Before Fulton moved for class certification, Bisco tried to moot its claim by tendering an offer ($3,005 plus costs) under Federal Rule of Civil Procedure 68 that, Bisco claimed, gave Fulton all possible individual relief. Two days after Bisco’s offer, the Supreme Court held that “an unaccepted settlement offer or offer of judgment does not moot a plaintiff’s case.” Fulton rejected the offer. Bisco then moved to deposit $3,600 with the court under Rule 67. The court dismissed the suit, concluding that Bisco’s maneuver mooted Fulton’s individual claim and disqualified it from serving as a class representative. The Seventh Circuit remanded, finding dismissal premature. Bisco’s payment did not moot the case; the court’s registry does not function as plaintiff’s account. An unaccepted offer to settle a case, accompanied by a payment intended to provide full compensation into the registry of the court under Rule 67, is no different in principle from an offer of settlement made under Rule 68. It is not clear, as a matter of law, that the unaccepted offer was sufficient to compensate Fulton for its loss of the opportunity to represent the putative class. View "Fulton Dental, LLC v. Bisco, Inc." on Justia Law

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Plaintiffs brought a class action under 42 U.S.C. 1983, alleging that the practices of the Marion County Sheriff’s Department and the Consolidated City of Indianapolis and Marion County caused them to be detained in jail awaiting release for an unreasonably long period of time, in violation of the Fourth Amendment. The district court granted certification for two proposed subclasses but denied it as to three. Plaintiffs appealed, under FRCP 23(f), the denial of certification of classes consisting of individuals who, from December 2012 to the present, were held in confinement after legal authority for those detentions ceased, due to the Sheriff’s practices of operating under a standard of allowing up to 72 hours to release prisoners who are ordered released and of employing a computer system inadequate for the purposes intended with respect to timely release of prisoners. The Seventh Circuit allowed the interlocutory appeal and reversed. The district court believed that detentions of less than 48 hours would be presumptively reasonable, and those that extended beyond 48 hours would be presumptively unreasonable, subjecting class members to different burdens of proof. The court erred in applying the 48-hour presumption in the context of a class composed of persons for whom legal authority for detention has ceased, whether by acquittal, release on bond, completion of the sentence, or otherwise. View "Driver v. Marion County Sheriff's Department" on Justia Law

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Under the Telephone Consumer Protection Act (TCPA), an effective consent to automated calls is one that relates to the same subject matter covered by the challenged messages. Akira, a retailer, engaged Opt for text-message marketing services. Akira gathered 20,000 customers’ cell phone numbers for Opt’s messaging platform. Akira customers could join its “Text Club” by providing their cell phone numbers to Akira representatives inside stores, by texting to an opt-in number, or by completing an “Opt In Card,” stating that, “Information provided to Akira is used solely for providing you with exclusive information or special offers. Akira will never sell your information or use it for any other purpose.” In 2009-2011, Akira sent about 60 text messages advertising store promotions, events, contests, and sales to those customers, including Blow. In a purported class action, seeking $1.8 billion in damages, Blow alleged that Akira violated the TCPA, 47 U.S.C. 227, and the Illinois Consumer Fraud Act by using an automatic telephone dialing system to make calls without the recipient’s express consent. The Seventh Circuit affirmed summary judgment for Akira. Blow’s attempt to parse her consent to accept some promotional information from Akira while rejecting “mass marketing” texts construed “consent” too narrowly. The court declined to award sanctions for frivolous filings. View "Blow v. Bijora, Inc." on Justia Law

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The district court certified eight classes, consisting of persons in Illinois and Missouri who take eye drops manufactured by six pharmaceutical companies for treatment of glaucoma. Plaintiffs claimed that the defendants’ eye drops are unnecessarily large and wasteful, in violation of the Illinois Consumer Fraud Act, 815 ILCS 505/1, and the Missouri Merchandising Practices Act, Mo. Rev. Stat. 407.010, so that the price of the eye drops is excessive and that the large eye drops have a higher risk of side effects. There was no claim that members of the class have experienced side effects or have been harmed because they ran out of them early. The Seventh Circuit vacated with instructions to dismiss. The court noted possible legitimate reasons for large drops, the absence of any misrepresentation or collusion, and that defendants’ large eye drops have been approved by the FDA for safety and efficacy. “You cannot sue a company and argue only ‘it could do better by us,’” nor can one bring a suit in federal court without pleading that one has been injured. The plaintiffs allege only “disappointment.” View "Eike v. Allergan, Inc." on Justia Law

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Wright was arrested by Calumet City police, without a warrant, based on the murder of one individual and the shooting of others. Wright admitted to having a gun. At a minimum, he was to be charged with felony unlawful use of a weapon by a felon, but the prosecutor instructed the officers to wait to charge Wright until lab results came back establishing whether his gun matched casings and bullets at the scene. After being in custody for 55 hours, Wright sued under 42 U.S.C. 1983, alleging that the city violated his Fourth and Fourteenth Amendment rights by failing to provide him with a judicial determination of probable cause within 48 hours of his arrest. The next day, a judge made a probable cause finding. In the section 1983 action, Wright sought class certification, asserting that the city had a policy or practice authorizing officers to detain persons arrested without a warrant for up to 72 hours before permitting the arrestee to appear before a judge. The city made an offer of judgment. Despite accepting that Rule 68 offer, granting him relief as to "all claims brought under this lawsuit,” Wright appealed the denial of certification of a proposed class of “[a]ll persons who will in the future be detained.” He did not appeal with respect to persons who had been detained. The Seventh Circuit dismissed, finding that Wright is not an aggrieved person with a personal stake in the case as required under Article III of the Constitution. View "Wright v. Calumet City" on Justia Law

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JPMorgan offers to manage clients’ securities portfolios. Its affiliates sponsor mutual funds in which the funds can be placed. Plaintiffs in a putative class action under the Class Action Fairness Act, 28 U.S.C. 1332(d)(2), alleged that customers invested in these mutual funds believing that, when recommending them as suitable vehicles, JPMorgan acts in clients’ best interests (as its website proclaims), while JPMorgan actually gives employees incentives to place clients’ money in its own mutual funds, even when those funds have higher fees or lower returns than third-party funds. The Seventh Circuit affirmed dismissal under the Securities Litigation Uniform Standards Act, 15 U.S.C. 78bb(f), which requires the district court to dismiss any “covered class action” in which the plaintiff alleges “a misrepresentation or omission of a material fact in connection with the purchase or sale of a covered security.” Under SLUSA, securities claims that depend on the nondisclosure of material facts must proceed under the federal securities laws exclusively. The claims were framed entirely under state contract and fiduciary principles, but necessarily rest on the “omission of a material fact,” the assertion that JPMorgan concealed the incentives it gave its employees. View "Holtz v. J.P. Morgan Chase Bank, N.A." on Justia Law

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If a LaSalle Bank custodial account had a cash balance at the end of a day, the cash would be invested in (swept into) a mutual fund chosen by the client. The Trust had a custodial account with a sweeps feature. After LaSalle was acquired by Bank of America, clients were notified that a particular fee was being eliminated. The trustee, who had not known about the fee, brought a putative class action in state court, claiming breach of the contract (which did not mention this fee) and violation of fiduciary duties. The bank removed the suit to federal court, relying on the Securities Litigation Uniform Standards Act, 15 U.S.C. 78bb(f), which authorizes removal of any “covered class action” in which the plaintiff alleges “a misrepresentation or omission of a material fact in connection with the purchase or sale of a covered security.” The statute requires that such state‑law claims be dismissed. The district court held that the suit fit the standards for removal and dismissal. The Seventh Circuit affirmed. The complaint alleged a material omission in connection with sweeps to mutual funds that are covered securities; no more is needed. The Trust may have had a good claim under federal securities law, but chose not to pursue it; the Act prohibits use of a state-law theory. View "Goldberg v. Bank of America, N.A." on Justia Law

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In her case, consolidated for pretrial proceedings as part of multidistrict litigation, Dzik alleged that she suffered a venous thromboembolism because she used a prescription birth control pill, Yasmin. Dzik’s medical records disclosed that she last filled a Yasmin prescription 10 months before her injury. Dzik’s counsel “suggested” that her doctor had provided samples of Yasmin before Dzik suffered the VTE. In March 2014, defendants requested additional medical records or an affidavit from Dzik’s doctor substantiating her use of the drug near the time of her injury. Dzik’s counsel ignored the request for 15 months. Bayer settled other cases, prompting the court to enter a case‐management order in August 2015 that provided for automatic dismissal should any plaintiff fail to comply. Defendants notified Dzik’s counsel of their obligations under the order, but got no response. In December 2015, Bayer moved to dismiss several cases, including Dzik’s. Dzik failed to respond. In January 2016, the court dismissed her suit with prejudice. Her attorney, having taken no action for nearly two years, immediately moved (unsuccessfully) to set aside the dismissal. The Seventh Circuit affirmed, noting that affidavits submitted by Dzik’s attorneys contradicted the sworn account of defense counsel and concluding that those affidavits were “a red flag,” based on vagueness and a concession of “neglect” by the firm. The order was “crystal clear,” Dzik’s attorneys had ample time to respond to discovery, and their neglect was not excusable. View "Dzik v. Bayer Corp." on Justia Law

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Tri-State sued the Bauers in small claims court for the cost of a water treatment system it had installed following a free, in-home assessment of their water. The Bauers answered and filed a counterclaim, asserting a multi-state class action for fraud. Their subsequent, amended class-action counterclaim added Home Depot and Aquion as counterclaim-defendants and asserts that the counterclaim-defendants conducted in-home water tests that did nothing but identify mineral content, rather than contaminants, and thereby misled consumers into buying their water treatment systems. Home Depot filed notice of removal, 28 U.S.C. 1446(b)(1), 1453(b), arguing that although it was not an original “defendant” in the underlying case, its status as an additional counterclaim-defendant in an action meeting criteria of the Class Action Fairness Act (CAFA), 28 U.S.C. 1453(b), entitled it to do so. The Bauers argued that the general removal statute, as modified by CAFA, does not permit any kind of counterclaim-defendant to remove. The district court held that CAFA did not disturb the longstanding rule that only original defendants can remove cases to federal court. The Seventh Circuit affirmed the remand to state court. The court has previously held that a counterclaim-defendant is not entitled to remove a case to federal court under CAFA; the statute does not support treating an original counterclaim-defendant differently from a new one. View "Bauer v. Home Depot U.S.A., Inc." on Justia Law

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Darden operates restaurants throughout Illinois under brand names including Olive Garden and Red Lobster. The plaintiffs worked intermittently as hourly employees at Darden-owned restaurants from 2004-2012. After quitting, they brought a proposed class action alleging that Darden failed to pay them pro rata vacation pay upon separation in violation of the Illinois Wage Payment and Collection Act, 820 ILCS 115/1-15. The district judge declined to certify their proposed class and granted Darden summary judgment on Clark’s individual claim. McMaster settled his claim with Darden, reserving the right to appeal the denial of class certification. The Seventh Circuit affirmed. The proposed class definition, “All persons separated from hourly employment with [Darden] in Illinois between December 11, 2003, and the conclusion of this action[] who were subject to Darden’s Vacation Policy … and who did not receive all earned vacation pay benefits,” described an impermissible “fail safe” class, and their proposed alternative did not satisfy FRCP 23. The statute does not mandate paid time off. It merely prohibits the forfeiture of accrued earned vacation pay upon separation if the employee is otherwise eligible for paid vacation. Darden’s policy on paid vacation covered only full-time employees. Clark was ineligible because she worked part-time. View "McCaster v. Darden Restaurants, Inc." on Justia Law