Articles Posted in Class Action

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Plaintiffs sought to represent a proposed class of 20,000 current and former Penn employees who participated in Penn's Retirement Plan since August 2010. The Plan is a defined contribution plan under 29 U.S.C. 1002(34), tax-qualified under 26 U.S.C. 403(b), offering mutual funds and annuities. The University matches employees’ contributions up to 5% of compensation. As of December 2014, the Plan offered 48 Vanguard mutual funds, and 30 TIAA-CREF mutual funds, fixed and variable annuities, and an insurance company separate account. In 2012, Penn organized its investment fund lineup into four tiers, ranging from lifecycle or target-date funds for the “Do-it-for-me” investor to the option of a brokerage account window for the “self-directed” investor looking for additional options. Plan participants could select a combination of funds from the investment tiers. TIAA-CREF and Vanguard charge investment and administrative fees. The district court dismissed plaintiffs’ suit for breach of fiduciary duty, prohibited transactions, and failure to monitor fiduciaries under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001-1461, which alleged that defendants failed to use prudent and loyal decision-making processes regarding investments and administration, overpaid certain fees by up to 600%, and failed to remove underperforming options from the Plan’s offerings. The Third Circuit reversed and remanded the dismissal of the breach of fiduciary duty claims. While the complaint may not have directly alleged how Penn mismanaged the Plan, there was substantial circumstantial evidence from which the court could “reasonably infer” that a breach had occurred. View "Sweda v. University of Pennsylvania" on Justia Law

Posted in: Class Action, ERISA

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Multidistrict litigation was formed to handle claims filed by former professional football players against the NFL based on concussion-related injuries. The district court (Judge Brody) approved a settlement agreement, effective January 2017. The Third Circuit affirmed; the Supreme Court denied certiorari. Under the agreement, approximately 200,000 class members surrendered their claims in exchange for proceeds from an uncapped settlement fund. Class members had to submit medical records reflecting a qualifying diagnosis. The Claims Administrator determines whether the applicant qualifies for an award. In March 2017, the claims submission process opened for class members who had been diagnosed with a qualifying illness before January 7, 2017. Other class members had to receive a diagnosis from a practitioner approved through the settlement Baseline Assessment Program (BAP). Class members could register for BAP appointments beginning in June 2017. While waiting to receive their awards, hundreds of class members entered into cash advance agreements with litigation funding companies, purporting to “assign” their rights to settlement proceeds in exchange for immediate cash. Class members did not assign their legal claims against the NFL. Judge Brody retained jurisdiction over the administration of the settlement agreement, which included an anti-assignment provision. Class counsel advised Judge Brody that he was concerned about predatory lending. Judge Brody ordered class members to inform the Claims Administrator of all assignment agreements, and purported to void all such agreements, directing a procedure under which funding companies could accept rescission and return of the principal amount they had advanced. The Third Circuit vacated. Despite having the authority to void prohibited assignments, the court went too far in voiding the cash advance agreements and voiding contractual provisions that went only to a lender’s right to receive funds after the player acquired them. View "In Re: National Football League Players Concussion Injury Litigation." on Justia Law

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The district court certified a class of Citizens Bank mortgage loan officers from 10 different states who alleged that they were unlawfully denied overtime pay. In an interlocutory appeal, the Third Circuit reversed the class certification decision. The district court failed to “define the class or class claims” as mandated by Rule 23(c)(1)(B). The district court’s analysis did not support a definitive determination as to whether the plaintiffs’ representative evidence satisfied Rule 23’s commonality and preponderance requirements; nor did it support a conclusion regarding either the existence of a company-wide policy or Citizens’ knowledge of it. While the appellate court acknowledged its jurisdiction over class certification under Rule 23, it concluded that Rule 23 certification and collective action certification under the Fair Labor Standards Act, 29 U.S.C. 216(b), are not sufficiently similar or otherwise “inextricably intertwined” to justify the exercise of pendent appellate jurisdiction. The court declined to consider the merits of the decision to certify a collective action under FLSA section 216(b). View "Reinig v. RBS Citizens NA" on Justia Law

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On April 21, 2004, and March 22, 2005, Defendants sent unsolicited faxes to Dr. Weitzner’s office. Weitzner filed a putative class action in Pennsylvania state court under the Telephone Consumer Protection Act (TCPA), 47 U.S.C. 227(b)(1)(C), including at least one fax sent to Weitzner. The proposed class included all individuals “who received an unsolicited facsimile advertisement from defendants between January 2, 2001[,] and the date of the resolution of this lawsuit.” In June 2008, the court denied class certification. The case continues as Weitzner's individual action. Defendants stopped sending unsolicited faxes in April 2005. In 2011, Weitzner and his professional corporation (Plaintiffs) brought individual claims based on the same faxes, plus class claims similar to those alleged in state court. The court dismissed, concluding that the four-year federal default statute of limitations, 28 U.S.C. 1658, applicable. The Third Circuit affirmed, rejecting a claim under the Supreme Court’s “American Pipe” holding that the timely filing of a class action tolls the applicable statute of limitations for putative class members until the propriety of maintaining the class is determined. American Pipe permits putative class members to file only individual claims after a denial of class certification and does not toll the limitations period for named plaintiffs like Weitzner. Any judgment in favor of Weitzner P.C. would benefit only Dr. Weitzner. Applying tolling to P.C.’s claims would effectively allow Weitzner to pursue his claims for a second time outside the limitations period. View "Weitzner v. Sanofi Pasteur, Inc." on Justia Law

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Favero’s car struck Alpizar-Fallas's car, causing Alpizar-Fallas serious injuries. Both drivers were insured by Progressive. The next day, Barbosa, a Progressive claims adjuster, went to Alpizar-Fallas's home to inspect her car and have her sign “paperwork” that would “expedite the processing of the property damage claim.” Alpizar-Fallas alleges that he stated that her signature was “necessary” for Progressive to advance her payment. Alpizar-Fallas signed the document. The document was actually a broadly written comprehensive general release of all claims. Barbosa failed to advise Alpizar-Fallas to seek legal counsel and did not communicate with her in Spanish, her native language. Alpizar-Fallas sought damages for the personal injuries she sustained in the accident and amended her complaint to include a class action claim against Progressive and Barbosa under the New Jersey Unfair Claims Settlement Practices Regulations (UCSPR) and the Consumer Fraud Act (CFA). The district court dismissed Alpizar-Fallas’s class action claim to the extent it alleged a violation of the UCSPR because those regulations do not provide a private right of action, then dismissed Alpizar-Fallas’s CFA claim, as a claim for denial of insurance benefits, and construing the CFA to only apply to the “sale or marketing” of insurance policies. The Third Circuit vacated, finding that Alpizar-Fallas’s complaint alleged deception that would be covered by the CFA. View "Alpizar-Fallas v. Favero" on Justia Law

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Disability rights advocates brought a proposed class action suit against Steak ’n Shake under the Americans with Disabilities Act (ADA), 42 U.S.C 12101, alleging they have personally experienced difficulty ambulating in their wheelchairs through two sloped parking facilities. They sought to sue on behalf of all physically disabled individuals who may have experienced similar difficulties at Steak ’n Shake restaurants throughout the country. The district court certified the proposed class. The Third Circuit reversed and remanded, first holding that the plaintiffs have Article III standing to bring their claims in federal court. Although a mere procedural violation of the ADA does not qualify as an injury in fact under Article III, plaintiffs allege to have personally experienced concrete injuries as a result of ADA violations on at least two occasions. Plaintiffs sufficiently alleged that these injuries were caused by unlawful corporate policies that can be redressed with injunctive relief. However, the “extraordinarily broad class” certified by the district court violates the Rule 23(a)(1) requirement that the proposed class be “so numerous that joinder of all members is impracticable” and Rule 23(a)(2)’s requirement that plaintiffs demonstrate that “there are questions of law or fact common to the class.” View "Mielo v. Steak N Shake Operations Inc." on Justia Law

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Walsh, a New Jersey citizen, filed a putative class action in New Jersey Superior Court, alleging that class members purchased home security equipment and monitoring service from defendants and signed contracts that defendants prepared which contained illegal provisions relating to fees due on cancellation. Walsh cited New Jersey consumer protection laws. Defenders, an Indiana corporation, removed the case invoking Class Action Fairness Act diversity jurisdiction, 28 U.S.C. 1332(d)(2), (d)(2)(A), (d)(5)(B). Walsh sought remand, arguing that ADT’s presence in the case triggered CAFA’s local controversy exception under which a district court must decline jurisdiction if the controversy is uniquely connected to the state in which the plaintiff originally filed: ADT is a citizen of New Jersey; ADT’s conduct forms a significant basis for the claims asserted; and Walsh sought significant relief from ADT. The court agreed that ADT, though a Delaware LLC, had New Jersey citizenship, but denied the motion, stating that ADT “appears to have no actual interest in the outcome” because it had transferred its liabilities. On reconsideration, the court reversed, citing evidence that ADT entered into the subject contracts with 35.3% of the putative class, and created the challenged standardized provisions. The Third Circuit affirmed remand of the case. ADT has an interest in the litigation; the court correctly took into account its citizenship. Because of ADT’s role concerning the allegedly illegal provisions, and because over a third of the class members entered into contracts directly with ADT, ADT’s conduct forms a significant basis for the claims. View "Walsh v. Defenders, Inc." on Justia Law

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Plaintiffs sued on behalf of a proposed nationwide class of individuals who “owned, own, or acquired” structures on which Owens Corning's "Oakridge" fiberglass asphalt roofing shingles roofing shingles are or have been installed since 1986, claiming that the shingles were “plagued by design flaws that result in cracking, curling and degranulation” and “will eventually fail, causing property damage, and costing consumers substantial removal and replacement costs.” The district court rejected the suit on summary judgment, finding that the claims had been discharged in bankruptcy. The Third Circuit partially reversed. After the case was remanded, others filed similar suits in district courts in other states, which were transferred for consolidation. Plaintiffs proposed two classes: property owners from four states, asserting various state-law claims, and a nationwide class seeking a ruling regarding the legal standard governing whether Owens Corning can use a bankruptcy discharge defense. The Third Circuit affirmed the denial of class certification. The Nationwide Class cannot satisfy Rule 23(a)’s commonality requirement because the only common question it poses can be answered only by an advisory opinion, which is forbidden by Article III. The Four-State Class cannot satisfy Rule 23(b)(3)’s predominance requirement. Plaintiffs did not allege a defect common to the class that might be proved by classwide evidence. View "Gonzalez v. Owens Corning" on Justia Law

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Plaintiffs sued on behalf of a proposed nationwide class of individuals who “owned, own, or acquired” structures on which Owens Corning's "Oakridge" fiberglass asphalt roofing shingles roofing shingles are or have been installed since 1986, claiming that the shingles were “plagued by design flaws that result in cracking, curling and degranulation” and “will eventually fail, causing property damage, and costing consumers substantial removal and replacement costs.” The district court rejected the suit on summary judgment, finding that the claims had been discharged in bankruptcy. The Third Circuit partially reversed. After the case was remanded, others filed similar suits in district courts in other states, which were transferred for consolidation. Plaintiffs proposed two classes: property owners from four states, asserting various state-law claims, and a nationwide class seeking a ruling regarding the legal standard governing whether Owens Corning can use a bankruptcy discharge defense. The Third Circuit affirmed the denial of class certification. The Nationwide Class cannot satisfy Rule 23(a)’s commonality requirement because the only common question it poses can be answered only by an advisory opinion, which is forbidden by Article III. The Four-State Class cannot satisfy Rule 23(b)(3)’s predominance requirement. Plaintiffs did not allege a defect common to the class that might be proved by classwide evidence. View "Gonzalez v. Owens Corning" on Justia Law

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Panico, a New Jersey resident, incurred substantial debt on an MBNA credit card, which qualifie as “debt” under the Fair Debt Collection Practices Act, 15 U.S.C. 1692a(5). MBNA assigned the rights to the debt to PRA, a debt collector. PRA’s collection efforts failed. In 2014, more than three but fewer than six years after the cause of action accrued, PRA sued. New Jersey’s statute of limitations barred collection ofsuch debts after six years; Delaware’s statute proscribed collection of such debts after three years. The credit agreement provided for application of “the laws of ... Delaware, without regard to its conflict of laws principles, and by any applicable federal laws.” PRA agreed to a stipulated dismissal. In 2015, Panico filed a putative class action under the FDCPA, arguing that PRA had sought to collect on a time-barred debt. The district court granted PRA summary judgment, finding that a Delaware tolling statute prevented the Delaware statute of limitations from running as to a party residing outside that state during the credit relationship, default, collections attempts, and ensuing litigation. The Third Circuit reversed. Delaware’s tolling statute has been interpreted as abrogating its statute of limitations only as to defendants not otherwise subject to service of process; it was not intended to export the state’s tolling statute into out-of-state forums and to substantially limit the application of the Delaware statute of limitations. View "Panico v. Portfolio Recovery Associates, LLC" on Justia Law