Justia U.S. 3rd Circuit Court of Appeals Opinion Summaries

Hoffman, “a serial pro se class action litigant,” frequently sues under the New Jersey Consumer Fraud Act, serving as both the sole class representative and sole class counsel. Hoffman has sued nearly 100 defendants in New Jersey state court in less than four years. Hoffman sued Nordic for its allegedly false and misleading advertisements for fish oil supplements. The suit was removed to federal court pursuant to the Class Action Fairness Act. The district court dismissed the lawsuit for failure to state a claim. Hoffman filed a second suit, alleging the same facts and legal theories, but with a smaller class, to reduce the amount recoverable and defeat federal jurisdiction. Nordic again removed the suit. The district court declined to remand the case and dismissed, finding the action procedurally barred under New Jersey’s entire controversy doctrine and, in the alternative, that Hoffman’s claims under the Consumer Fraud Act failed for substantially the same reasons they failed in the earlier suit. The Third Circuit affirmed. The district court was permitted to “bypass” the jurisdictional inquiry in favor of a non-merits dismissal on claim preclusion grounds. View "Hoffman v. Nordic Naturals, Inc." on Justia Law

Eaton manufactures truck transmissions for sale to Original Equipment Manufacturers (OEMs), which offer “data books,” listing the options for truck parts. Customer choose among the options; the OEM sources the parts from the manufacturers and uses them to build custom trucks then sold to that customer. Eaton was a near-monopolist in supplying Class 8 truck transmissions. In 1989, ZF emerged as a competitor. Eaton allegedly sought to retain its market share by entering agreements with the OEMs, with increasingly large rebates on Eaton transmissions based on the percentage of transmissions a given OEM purchased from Eaton as opposed to ZF. ZF closed in 2003. In 2006, ZF successfully sued Eaton for antitrust violations. Separately, indirect purchasers who bought trucks from OEMs’ immediate customers brought a class action; that case was dismissed. In this case, Tauro attempt to represent direct purchasers in an antitrust suit was rejected because Tauro never directly purchased a Class 8 truck from the OEMs, but rather purchased trucks from R&R, a direct customer that expressly assigned Tauro its direct purchaser antitrust claims. The Third Circuit reversed. An antitrust claim assignment need not be supported by bargained-for consideration in order to confer direct purchaser standing on an indirect purchaser; it need only be express. That requirement was met. The presumption that a motion to intervene by a proposed class representative is timely if filed before the class opt-out date applies in this pre-certification context. View "Wallach v. Eaton Corp" on Justia Law

Cephalon’s patent, issued in 1997, claimed a specific distribution of modafinil, used to treat sleep disorders. Cephalon obtained Reissue Patent 516 in 2002. Cephaolon’s use of modafinil was patent-protected until April 2015. In 1998, the FDA approved Cephalon’s New Drug Application (NDA) for the brand-name drug Provigil and granted New Chemical Entity exclusivity until December 2005, as an orphan drug. Cephalon later obtained six months of pediatric exclusivity, 21 U.S.C. 355a(c). Without the patent, Cephalon’s exclusivity would have ended in June 2006. In December 2002, four generic drug each independently filed an Abbreviated NDA seeking to sell generic modafinil. All four were treated as the first filer. Each application certification “automatically counts as patent infringement,” 35 U.S.C. 271(e)(2)(A)), so Cephalon sued all four, then entered into “reverse-payment settlements” to keep each out of the market. A putative class of wholesalers who purchased Provigil directly from Cephalon filed suit, alleging a global conspiracy involving Cephalon and the generic manufacturers, 15 U.S.C. 1; four separate conspiracies; and monopolization, 15 U.S.C. 2. A motion for class certification was filed after eight years of litigation. One month later the court granted defendants summary judgment on the antitrust conspiracy claim. The court certified the class after three defendants settled for $512 million. The Third Circuit vacated the class certification order and remanded for further consideration of whether joinder of all class members is impracticable. Plaintiffs have not met their burden of showing that the numerosity requirement of Rule 23(a)(1) was satisfied. View "In Re: Modafinil AntiTrust Litig." on Justia Law

Plaintiffs represent a putative class of New Jersey real estate purchasers and refinancers who were overcharged $70 to $350 in fees. Plaintiffs allege that settlement agents (Defendants) intentionally charged Plaintiffs more than the county clerk charged for recording deeds and mortgages and kept the difference. The class claims total over $50 million, exclusive of treble damages and interest. Defendants sought dismissal and raised affirmative defenses, but did not seek to enforce arbitration clauses present in their contracts with Plaintiffs. The case was litigated for 30 months with the focus primarily on class certification. Both sides conducted broad discovery and contested substantive motions. Plaintiffs have served 130 non-party subpoenas and spent over $50,000 on experts. In 2011, the Supreme Court held that the Federal Arbitration Act (FAA) preempted state laws that had previously prohibited a party from compelling bipolar (individual) arbitration in certain situations even when it was specifically agreed to by contract. Defendants demanded enforcement of the arbitration agreements in light of this change in the law, then moved to compel bipolar arbitration. The Third Circuit affirmed in favor of Defendants. Futility can excuse the delayed invocation of the right to compel arbitration; any attempt to compel bipolar before the Supreme Court’s decision would have been futile. View "Chassen v. Fid. Nat'l Fin. Inc." on Justia Law

Relying on an advertiser’s claim that its fax advertising program complied with the Telephone Consumer Protection Act (TCPA), 47 U.S.C. 227, Stevens & Ricci allowed the advertiser to fax thousands of advertisements to potential customers on its behalf. More than six years later, Hymed filed a class action TCPA lawsuit, which settled with a $2,000,000 judgment against Stevens & Ricci. While that suit was pending, Auto-Owners sought a declaratory judgment, claiming that the terms of the insurance policy it provided Stevens & Ricci did not obligate it to indemnify or defend Stevens & Ricci in the class action. The Third Circuit affirmed summary judgment, finding that the sending of unsolicited fax advertisements in violation of the TCPA did not fall within the terms of the insurance policy. The “Businessowners Insurance Policy” obligated Auto-Owners to “pay those sums that the insured becomes legally obligated to pay as damages because of ‘bodily injury’, ‘property damage’, ‘personal injury’ or ‘advertising injury’ to which this insurance applies.” The “advertising injury” deals only with the publication of private information, View "Auto-Owners Ins. Co. v. Stevens & Ricci Inc" on Justia Law

After a failed merger between Cooper Tire and Apollo Tyres, OFI Asset Management, purporting to act for similarly situated investors, filed a class action against Cooper and its officers. OFI claims that, during merger negotiations, the defendants made material misrepresentations in statements to investors, in violation of federal securities laws, 15 U.S.C. 78j(b), 78n(a), and 78t(a). The Third Circuit affirmed the district court's dismissal of the case, rejecting arguments that that court improperly managed the presentation of arguments. The court upheld a finding that OFI failed to allege sufficient facts to support its claims. The court had ordered OFI to submit a letter “identifying and verbatim quoting” the five most compelling examples it could muster of false or fraudulent statements by Cooper, with three factual allegations demonstrating the falsity of each statement and three factual allegations supporting a finding of scienter as to the making of the statements. The court had subsequently determined that the statements identified as problematic by OFI were either not false or misleading, were “forward-looking” statements protected by the safe harbor established by the Private Securities Litigation Reform Act of 1995, lacked a sufficient showing of scienter, or suffered from some combination of those infirmities. View "OFI Asset Mgmt. v. Cooper Tire & Rubber" on Justia Law

Named plaintiffs, 2008-2011 graduates of the Widener School of Law, claim that Widener violated the New Jersey and Delaware Consumer Fraud Acts by intentionally publishing misleading statistics, reporting that in 2005-2011, 90-97% of graduates were employed. In reality, only 50-70% of Widener graduates secured full-time legal positions. The school included non-legal and part-time positions without reporting the breakdown. In 2011, Widener improved its reporting, but allegedly continued to gather unreliable information by crediting secondhand accounts of employment and avoiding responses from unemployed graduates. The plaintiffs claim that publishing misleading statistics enabled Widener to inflate tuition. The plaintiffs moved to certify a class of “persons who enrolled in Widener University School of Law and were charged full or part-time tuition within the statutory period.” The district court denied class certification, finding that the plaintiffs could not meet FRCP 23(b)(3)’s requirement that common questions “predominate” over individual questions because they had not shown that they could prove damages by common evidence. The court noted differences in class members’ employment outcomes and that New Jersey has rejected a “fraud-on-the-market” theory outside the securities fraud context. Plaintiffs could not meet Rule 23(a)(3)’s requirement that the named plaintiffs’ claims be “typical” of the claims of the proposed class; students who enrolled in 2012 and later, after Widener improved its reporting, might prefer not to have Widener’s reputation tarnished by the lawsuit. The Third Circuit affirmed. The plaintiffs’ theory was insufficiently supported by class-wide evidence. View "Harnish v. Widener Univ. Sch. of Law" on Justia Law

Richardson was placed in Lewisburg Penitentiary's Special Management Unit (SMU) program, intended for inmates with histories of violence and individuals who “participated in or had leadership roles in geographical groups/gang related activity." In a purported class action, seeking damages and injunctive relief for “[a]ll persons who are currently or will be imprisoned in the SMU program at USP Lewisburg,” Richardson alleged that through a “pattern, practice or policy,” officials at USP Lewisburg frequently placed inmates with hostile cellmates, unnecessarily increasing the risk of violence and that if an inmate refused to accept a hostile cellmate, he would be placed in painful restraints. Richardson claims that he was subjected to this policy. The district court found Richardson’s class definition “untenable because it [wa]s not objectively, reasonably ascertainable.” Meanwhile, Richardson was transferred out of USP Lewisburg. The Third Circuit remanded, holding that Richardson’s class claims are not moot. When individual claims for relief are acutely susceptible to mootness, a would-be class representative may, in some circumstances, continue to seek certification after losing his personal stake in the case. Richardson may continue to seek class certification based on the Third Circuit’s intervening 2015 holding, in Shelton v. Bledsoe, that ascertainability is not required for Rule 23(b)(2) classes. View "Richardson v. Dir., Fed. Bureau of Prisons" on Justia Law

In 2011, former professional football players sued the NFL and Riddell, Inc., claiming that the NFL failed to take reasonable actions to protect them from the chronic risks of head injuries in football, and that Riddell, an equipment manufacturer, should be liable for the defective design of helmets. In 2012, the Judicial Panel on Multidistrict Litigation consolidated the cases in the Eastern District of Pennsylvania, which, in 2014, approved a class action settlement that covered over 20,000 retired players and released all concussion-related claims against the NFL. There were 202 opt-outs. Objectors argued that class certification was improper and that the settlement was unfair. The Third Circuit affirmed, stating: “This settlement will provide nearly $1 billion in value to the class of retired players. It is a testament to the players, researchers, and advocates who have worked to expose the true human costs of a sport so many love. Though not perfect, it is fair.” View "In re: NFL Players Concussion Injury Litig." on Justia Law

Weitzner, a Brooklyn, New York doctor, filed a putative class action against Sanofi and Vaxserve, alleging that they transmitted more than 10,000 facsimiles to members of the class without the prior express invitation or permission, violating the Telephone Consumer Protection Act, 47 U.S.C. 227. Before a motion for class certification was filed, defendants made offers of judgment under FRCP 682 to both Weitzner and his professional corporation: $1,500 for each facsimile advertisement sent to Plaintiff “understood to be eleven (11) facsimile transmissions.” Defendants also offered to pay costs and to stop sending any facsimile advertisements in violation of the TCPA. Plaintiffs did not respond to the offers. More than 14 days after defendants made their offers, defendants moved to dismiss for lack of subject-matter jurisdiction, contending their unaccepted offers mooted the case. The Third Circuit affirmed denial of the motion to dismiss, stating that plaintiffs had not engaged in “undue delay” in failing to file their motion for class certification and a successful class certification motion would “‘relate . . . back to the filing of the class complaint.’” The Supreme Court’s 2016 decision, Campbell-Ewald Company v. Gomez, held that an unaccepted offer does not make such a case moot. View "Weitzner v. Sanofi Pasteur Inc" on Justia Law