/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/180102.mbx C L A S S A C T I O N R E P O R T E R Tuesday, January 2, 2018, Vol. 20, No. 2 Headlines * Major Court Rulings in Class Action Lawsuits - 2017 ********* * Major Court Rulings in Class Action Lawsuits - 2017 ----------------------------------------------------- The Class Action Reporter is pleased to provide our subscribers the following list of court decisions in class action lawsuits that we have identified as major rulings during 2017. This list is the product of and copyrighted by Beard Group, Inc., and no reproduction or further use of this list is permitted without the prior written consent of Beard Group, Inc., P.O. Box 40915, Washington, D.C. 20016 ADVOCATE HEALTH CARE NETWORK, et al., Petitioners, v. Maria STAPLETON, et al.; Saint Peter's Healthcare System, et al., Petitioners, v. Laurence Kaplan; and Dignity Health, et al., Petitioners, v. Starla Rollins, Nos. 16-74, 16-86, 16-258 (U.S.) The question presented in this case is whether a church must have originally established an employee benefits plan for it to so qualify in the Employee Retirement Income Security Act of 1974 (ERISA) exemption of "church plan[s]" from its otherwise-comprehensive regulation of employee benefit plans. Advocate Health Care Network, et al., Saint Peter's Healthcare System, et al., and Dignity Health, et al., identify themselves as three church-affiliated nonprofits that run hospitals and other healthcare facilities (collectively, hospitals). They offer defined-benefit pension plans to their employees. Those plans were established by the hospitals themselves -- not by a church -- and are managed by internal employee benefits committees. ERISA generally obligates private employers offering pension plans to adhere to an array of rules designed to ensure plan solvency and protect plan participants. But in enacting the statute, Congress made an important exception for "church plans," which never had to comply with ERISA's requirements. The statutory definition of "church plan" came in two distinct phases. From the beginning, ERISA provided that "[t]he term 'church plan' means a plan established and maintained ... for its employees... by a church or by a convention or association of churches." Then, in 1980, Congress amended the statute to expand that definition by deeming additional plans to fall within it. The amendment specified that for purposes of the church-plan definition, an "employee of a church" would include an employee of a church-affiliated organization (like the hospitals here). And it added the provision whose effect is at issue in these cases: A plan established and maintained for its employees ... by a church or by a convention or association of churches includes a plan maintained by an organization... the principal purpose or function of which is the administration or funding of a plan or program for the provision of retirement benefits or welfare benefits, or both, for the employees of a church or a convention or association of churches, if such organization is controlled by or associated with a church or a convention or association of churches. Under the statute, certain plans for the employees of churches or church-affiliated nonprofits count as "church plans" even though not actually administered by a church. ERISA, the Supreme Court held, does not impose that requirement for it to so qualify. The three federal agencies responsible for administering ERISA have long read those provisions, when taken together, to exempt plans like the hospitals' from the statute's mandates. The original definitional provision -- Section 1002(33)(A), or paragraph (A) for short -- defines a "church plan" as one "established and maintained... by a church" -- not by a church-affiliated nonprofit. But according to the agencies, the later provision -- Section 1002(33)(C)(i), or just subparagraph (C)(i) -- expands that definition to include any plan maintained by a principal-purpose organization, regardless of whether a church initially established the plan. And, the agencies believe, the internal benefits committee of a church-affiliated nonprofit counts as such an organization. That interpretation has appeared in hundreds of private letter rulings and opinion letters issued since 1982, including several provided to the hospitals here. The three cases before the Supreme Court are part of a recent wave of litigation challenging the agencies' view. Respondents, current and former employees of the hospitals, filed class actions alleging that their employers' pension plans do not fall within ERISA's church-plan exemption (and thus must satisfy the statute's requirements). That is so, the employees claim, because those plans were not established by a church -- and ERISA, even as amended, demands that all "church plans" have such an origin. According to the employees, the addition of subparagraph (C)(i) allowed principal-purpose organizations to maintain such plans in lieu of churches; but that provision kept as-is paragraph (A)'s insistence that churches themselves establish "church plans." The District Courts handling the cases agreed with the employees' position, and therefore held that the hospitals' plans must comply with ERISA. The Courts of Appeals for the Third, Seventh, and Ninth Circuits affirmed those decisions. "A church-establishment requirement necessarily puts the IRS in the business of deciding just what a church is and is not -- for example (as in the IRS's ruling about the Sisters), whether a particular Catholic religious order should count as one. And that requirement, by definition, disfavors plans created by church affiliates, as compared to those established by (whatever the IRS has decided are) churches. It thus makes key to the "church plan" exemption the very line that, on the hospitals' account, Congress intended to erase," the Supreme Court held. Hearing testimony disclosed that plans run by church affiliated pension boards came in different varieties: Some were created by church congregations, but others were established by the boards themselves. And still others were sufficiently old that their provenance could have become the subject of dispute. So keeping the church-establishment requirement would have prevented some plans run by pension boards -- the very entities the employees say Congress most wanted to benefit -- from qualifying as "church plans" under ERISA. No argument the employees have offered here supports that goal-defying (much less that text-defying) statutory construction. ERISA provides (1) that a "church plan" means a "plan established and maintained... by a church" and (2) that a "plan established and maintained ... by a church" is to "include[ ] a plan maintained by" a principal-purpose organization. Under the best reading of the statute, a plan maintained by a principal-purpose organization therefore qualifies as a "church plan," regardless of who established it. The Supreme Court reversed the judgments of the Courts of Appeals. Justice Kagan delivered the opinion of the Supreme Court. Justice Gorsuch took no part in the consideration or decision of these cases. Justice Sotomayor, concurring. Attorneys for Advocate Health Care Network, et al.: Lisa S. Blatt, Esq. Elisabeth S. Theodore, Esq. Sally L. Pei, Esq. ARNOLD & PORTER KAYE SCHOLER LLP Washington, DC Email: lisa.blatt@apks.com elisabeth.theodore@apks.com sally.pei@apks.com -- and -- Amy L. Blaisdell, Esq. Daniel J. Schwartz, Esq. Heather M. Mehta, Esq. GREENSFELDER, HEMKER & GALE, P.C. St. Louis, MO Email: apb@greensfelder.com djs@greensfelder.com hmm@greensfelder.com Attorneys for the United States as amicus curiae supporting Advocate Health Care Network, et al., Malcolm L. Stewart, Esq. Attorneys for Internal Revenue Service, Department of Labor, and Pension Benefit Guaranty Corporation: James A. Feldman, Esq. Washington, DC -- and -- Lynn Lincoln Sarko, Esq. Matthew Gerend, Esq. Laura R. Gerber, Esq. KELLER ROHRBACK L.L.P. Seattle, WA Email: lsarko@kellerrohrback.com mgerend@kellerrohrback.com lgerber@kellerrohrback.com -- and -- Ron Kilgard, Esq. Laurie Ashton, Esq. KELLER ROHRBACK L.L.P. Phoenix, AZ Email: rkilgard@kellerrohrback.com lashton@kellerrohrback.com -- and -- Karen L. Handorf, Esq. Michelle C. Yau, Esq. Julie G. Reiser, Esq. Mary J. Bortscheller, Esq. COHEN MILSTEIN SELLERS & TOLL PLLC Washington, DC Email: khandorf@cohenmilstein.com myau@cohenmilstein.com jreiser@cohenmilstein.com mbortscheller@cohenmilstein.com Attorneys for Dignity Health, et al.: Barry S. Landsberg, Esq. Harvey L. Rochman, Esq. Joanna S. McCallum, Esq. MANATT, PHELPS & PHILLIPS, LLP Los Angeles, CA Email: blandsberg@manatt.com hrochman@manatt.com jmccallum@manatt.com -- and -- David L. Shapiro, Esq. Cambridge, MA Attorneys for Saint Peter's Healthcare System, et al.: Jeffrey J. Greenbaum, Esq. James M. Hirschhorn, Esq. Katherine M. Lieb, Esq. SILLS CUMMIS & GROSS P.C. Newark, NJ Email: jgreenbaum@sillscummis.com jhirschhorn@sillscummis.com klieb@sillscummis.com MICROSOFT CORPORATION, Petitioner, v. Seth BAKER, et al., No. 15- 457 (U.S.) This case concerns options open to plaintiffs, when denied class-action certification by a district court, to gain appellate review of the district court's order. Orders granting or denying class certification, the Supreme Court has held, are "inherently interlocutory," Coopers & Lybrand v. Livesay, 437 U.S. 463, 470, 98 S.Ct. 2454, 57 L.Ed.2d 351 (1978), hence not immediately reviewable under 28 U.S.C. Section 1291, which provides for appeals from "final decisions." Pursuant to Federal Rule of Civil Procedure 23(f), promulgated in 1998, however, orders denying or granting class certification may be appealed immediately if the court of appeals so permits. Absent that permission, plaintiffs may pursue their individual claims on the merits to final judgment, at which point the denial of class-action certification becomes ripe for review. The plaintiffs in this case, respondents here, were denied Rule 23(f) permission to appeal the District Court's refusal to grant class certification. Instead of pursuing their individual claims to final judgment on the merits, respondents stipulated to a voluntary dismissal of their claims "with prejudice," but reserved the right to revive their claims should the Court of Appeals reverse the District Court's certification denial. The Supreme Court held that the voluntary dismissal essayed by respondents does not qualify as a "final decision" within the compass of Section 1291. The tactic would undermine Section 1291's firm finality principle, designed to guard against piecemeal appeals, and subvert the balanced solution Rule 23(f) put in place for immediate review of class-action orders. Justice Ginsburg, delivered the opinion of the Court. Justice Gorsuch took no part in the consideration or decision of this case. Justice Thomas, with whom the Chief Justice and Justice Alito join, concurring in the judgment. Attorney for Microsoft Corporation: Stephen M. Rummage, Esq. Fred B. Burnside, Esq. DAVIS WRIGHT TREMAINE, LLP Email: steverummage@dwt.com -- and -- Jeffrey L. Fisher, Esq. Stanford Law School Email: jlfisher@law.stanford.edu -- and -- Bradford L. Smith, Esq. David M. Howard, Esq. Timothy G. Fielden, Esq. -- and -- Charles B. Casper, Esq. MONTGOMERY, MCCRACKEN, WALKER & RHOADS, LLP Philadelphia, PA Email: ccasper@mmwr.com -- and -- Jeffrey L. Fisher, Esq. Stanford, CA Attorney for Respondent, Seth Baker, et al.: Darren T. Kaplan, Esq. STUEVE SIEGEL HANSON, LLP Email: kaplan@stuevesiegel.com -- and -- Peter K. Stris, Esq. Brendan S. Maher, Esq. Daniel L. Geyser, Esq. Douglas D. Geyser, Esq. STRIS & MAHER LLP Email: peter.stris@strismaher.com brendan.maher@strismaher.com -- and -- Radha A. Pathak, Esq. Dana Berkowitz, Esq. Victor O'Connell, Esq. Thomas E. Logan, Esq. STRIS & MAHER LLP Los Angeles, CA -- and -- Mark A. Griffin, Esq. Amy Williams-Derry, Esq. Benjamin Gould, Esq. KELLER ROHRBACK LLP Seattle, WA -- and -- Shaun P. Martin, Esq. University of San Diego, School of Law San Diego, CA -- and -- Robert L. Esensten, Esq. Esensten Law Los Angeles, CA -- and -- Jeffrey M. Ostrow, Esq. Jonathan M. Streisfeld, Esq. Kopelowitz Ostrow Ferguson Fort Lauderdale, FL Email: mostrow@kolawyers.com streisfeld@kolawyers.com -- and -- Paul L. Stritmatter, Esq. Bradley J. Moore, Esq. Stritmatter Kessler Whellan Koehler Moore Seattle, WA Cory L. Andrews, Washington Legal Foundation -- candrews@wlf.org -- for Washington Legal Foundation, et al. John H. Beisner, Skadden Arps Slate Meagher & Flom LLP -- John.Beisner@skadden.com -- for Product Liability Advisory Council, Inc. Rishi Bhandari, Mandel Bhandari LLP -- rb@mandelbhandari.com -- for Complex Litigation Law Professors. Deborah J. La Fetra, Pacific Legal Foundation -- dlafetra@pacificlegal.org -- for Pacific Legal Foundation. Jason L. Lichtman, Lieff Cabraser Heimann & Bernstein LLP -- jlichtman@lchb.com -- for Public Justice, P.C. Mary Massaron, Plunkett Cooney -- mmassaron@plunkettcooney.com -- for DRI-The Voice of the Defense Bar. Mark W. Mosier, Covington & Burling LLP -- mmosier@cov.com -- for Chamber of Commerce of the United States of America, et al. Adina H. Rosenbaum, Public Citizen Litigation Group -- arosenbaum@citizen.org -- for Public Citizen, Inc. E. Joshua Rosenkranz, Orrick, Herrington & Sutcliffe LLP -- jrosenkranz@orrick.com -- for Civil Procedure Scholars. CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM, Petitioner v. ANZ SECURITIES, INC., et al., No. 16-373 (U.S.) Lehman Brothers Holdings Inc. formerly was one of the largest investment banks in the United States. In 2007 and 2008, Lehman raised capital through a number of public securities offerings. Petitioner, California Public Employees' Retirement System (sometimes called CalPERS), is the largest public pension fund in the country. Petitioner purchased securities in some of these Lehman offerings; and it is alleged that respondents, various financial firms, are liable under the Act for their participation as underwriters in the transactions. In September 2008, Lehman filed for bankruptcy. Around the same time, a putative class action concerning Lehman securities was filed against respondents in the United States District Court for the Southern District of New York. The operative complaint raised claims under Section 11, alleging that the registration statements for certain of Lehman's 2007 and 2008 securities offerings included material misstatements or omissions. The complaint was filed on behalf of all persons who purchased the identified securities, making petitioner a member of the putative class. Petitioner, however, was not one of the named plaintiffs in the suit. The class action was consolidated with other securities suits against Lehman in a single multidistrict litigation. In February 2011, petitioner filed a separate complaint against respondents in the United States District Court for the Northern District of California. This suit was filed more than three years after the relevant transactions occurred. The complaint alleged identical securities law violations as the class-action complaint, but the claims were on petitioner's own behalf. The suit was transferred and consolidated with the multidistrict litigation in the Southern District of New York. Soon thereafter, a proposed settlement was reached in the putative class action. Petitioner, apparently convinced it could obtain a more favorable recovery in its separate suit, opted out of the class. Respondents then moved to dismiss petitioner's individual suit alleging Section 11 violations as untimely under the 3-year bar in the second sentence of Section 13. Petitioner countered that its individual suit was timely because that 3-year period was tolled during the pendency of the class action filing. The principal authority cited to support petitioner's argument that the 3-year period was tolled was American Pipe & Constr. Co. v. Utah, 414 U.S. 538, 94 S.Ct. 756, 38 L.Ed.2d 713 (1974). The District Court disagreed with petitioner's argument, holding that the 3-year bar in Section 13 is not subject to tolling. The Court of Appeals for the Second Circuit affirmed. In agreement with the District Court, the Court of Appeals held that the tolling principle discussed in American Pipe is inapplicable to the 3-year time bar. In re Lehman Brothers Securities and ERISA Litigation, 655 Fed.Appx. 13, 15 (2016). As the Court of Appeals noted, there is disagreement about whether the tolling rule of American Pipe applies to the 3-year time bar in Section 13. Compare Joseph v. Wiles, 223 F.3d 1155, 1166-1168 (C.A.10 2000), with Stein v. Regions Morgan Keegan Select High Income Fund, Inc., 821 F.3d 780, 792-795 (C.A.6 2016), and Dusek v. JPMorgan Chase & Co., 832 F.3d 1243, 1246-1249 (C.A.11 2016). The Court of Appeals also rejected petitioner's alternative argument that its individual claims were "essentially 'filed' in the putative class complaint," so that the filing of the class action within three years made the individual claims timely. 655 Fed. Appx., at 15. The Supreme Court granted certiorari. The question then is whether Section 13 permits the filing of an individual complaint more than three years after the relevant securities offering, when a class action complaint was timely filed, and the plaintiff filing the individual complaint would have been a member of the class but for opting out of it. The answer turns on the nature and purpose of the 3-year bar and of the tolling rule that petitioner seeks to invoke. "Tolling may be of great value to allow injured persons to recover for injuries that, through no fault of their own, they did not discover because the injury or the perpetrator was not evident until the limitations period otherwise would have expired. This is of obvious utility in the securities market, where complex transactions and events can be obscure and difficult for a market participant to analyze or apprehend. In a similar way, tolling as allowed in American Pipe may protect plaintiffs who anticipated their interests would be protected by a class action but later learned that a class suit could not be maintained for reasons outside their control," the Supreme Court said. The purpose of a statute of repose, on the other hand, is to allow more certainty and reliability. These ends, too, are a necessity in a marketplace where stability and reliance are essential components of valuation and expectation for financial actors. The statute in this case reconciles these different ends by its two-tier structure: a conventional statute of limitations in the first clause and a statute of repose in the second. The statute of repose transforms the analysis. In a hypothetical case with a different statutory scheme, consisting of a single limitations period without an additional outer limit, a court's equitable power under American Pipe in many cases would authorize the relief petitioner seeks. Here, however, the Court need not consider how equitable considerations should be formulated or balanced, for the mandate of the statute of repose takes the case outside the bounds of the American Pipe rule. The final analysis, then, is straightforward. The 3 year time bar in Section 13 of the Securities Act is a statute of repose. Its purpose and design are to protect defendants against future liability. The statute displaces the traditional power of courts to modify statutory time limits in the name of equity. Because the American Pipe tolling rule is rooted in those equitable powers, it cannot extend the 3-year period. Petitioner's untimely filing of its individual action is ground for dismissal. The judgment of the Court of Appeals for the Second Circuit is affirmed. Justice Kennedy delivered the opinion of the Court. Justice Ginsburg, with whom Justice Breyer, Justice Sotomayor, and Justice Kagan join, dissenting. For the reasons stated, Justice Ginsburg would hold that the filing of the class complaint commenced CalPERS' action under Section 11 of the Securities Act, thereby satisfying Section 13's statute of repose. Accordingly, the Supreme Court reverses the judgment of the Second Circuit. A class complaint was filed against respondents well within the three-year period of repose set out in Section 13 of the Securities Act of 1933, 15 U.S.C. Section 77m. That complaint informed respondents of the substance of the claims asserted against them and the identities of potential claimants. See American Pipe & Constr. Co. v. Utah, 414 U.S. 538, 554-555, 94 S.Ct. 756, 38 L.Ed.2d 713 (1974); Crown, Cork & Seal Co. v. Parker, 462 U.S. 345, 353, 103 S.Ct. 2392, 76 L.Ed.2d 628 (1983). Respondents, in other words, received what Section 13's repose period was designed to afford them: notice of their potential liability within a fixed time window. The complaint also "commence[d] the action for all members of the class." American Pipe, 414 U.S., at 550, 94 S.Ct. 756. Thus, when petitioner California Public Employees' Retirement System (CalPERS) elected to exercise the right safeguarded by Federal Rule of Civil Procedure 23(c)(2)(B)(v), i.e., the right to opt out of the class and proceed independently, CalPERS' claim remained timely. See American Pipe, 414 U.S., at 550, 94 S.Ct. 756 (demanding that class members "individually meet the timeliness requirements... is simply inconsistent with Rule 23"). Given the due process underpinning of the opt-out right, see Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 363, 131 S.Ct. 2541, 180 L.Ed.2d 374 (2011), Justice Ginsburg resists rendering the underpinning of the opt-out right, see Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 363, 131 S.Ct. 2541, 180 L.Ed.2d 374 (2011), Justice Ginsburg resists rendering the right illusory for CalPERS and similarly situated class members. Justice Ginsburg reverses the judgment of the Second Circuit. Accordingly, Justice Ginsburg dissents from the decision, under which opting out cuts off any chance for recovery. Attorneys for California Public Employees' Retirement System: Thomas C. Goldstein, Esq. Bethesda, MD -- and -- Darren J. Robbins, Esq. Joseph D. Daley, Esq. Thomas E. Egler, Esq. ROBBINS GELLER RUDMAN & DOWD LLP San Diego, CA -- and -- Thomas C. Goldstein, Esq. Kevin K. Russell, Esq. Tejinder Singh, Esq. GOLDSTEIN & RUSSELL, P.C. Bethesda, MD Attorneys for Respondents ANZ Securities, Inc.; Bankia, S. A.; BBVA Securities Inc.; BMO Capital Markets Corp.; BNP Paribas FS, LLC; BNP Paribas S. A.; BNY Mellon Capital Markets, LLC; CIBC World Markets Corp.; Citigroup Global Markets Inc.; Daiwa Capital Markets Europe Limited; DZ Financial Markets LLC; HSBC Securities (USA) Inc.; HVB Capital Markets, Inc.; ING Financial Markets LLC; Mizuho Securities USA Inc.; M.R. Beal & Company; Muriel Siebert & Co. Inc.; nabSecurities LLC; Natixis Securities Americas LLC; RBC Capital Markets LLC; RBS Securities, Inc.; RBS WCS Holding Company; Santander Investment Securities Inc.; Scotia Capital (USA) Inc.; SG Americas Securities, LLC; Sovereign Securities Corporation LLC; SunTrust Capital Markets, Inc.; Utendahi Capital Partners, L. P.; and Wells Fargo Securities, LLC: Paul D. Clement, Esq. Washington, DC -- and -- Victor L. Hou, Esq. Jared Gerber, Esq. CLEARY GOTTLIEB STEEN & HAMILTON LLP New York, NY Email: vhou@cgsh.com jgerber@cgsh.com -- and -- Paul D. Clement, Esq. Jeffrey M. Harris, Esq. Matthew D. Rowen, Esq. KIRKLAND & ELLIS LLP Washington, DC C.A.F., et al., petitioners, v. VIACOM INC., et al., No. 16-346. (U.S.). This is a multidistrict consolidated class action. The plaintiffs are children younger than 13 who allege that the defendants, Viacom Inc. and Google Inc., unlawfully collected personal information about them on the Internet, including what webpages they visited and what videos they watched on Viacom's websites. Many of the plaintiffs' claims overlap substantially with those the U.S. Circuit Court of Appeals for Third Circuit addressed in its decision, In re Google Inc. Cookie Placement Consumer Privacy Litigation. Two of the plaintiffs' claims -- one for violation of the federal Video Privacy Protection Act, and one for invasion of privacy under New Jersey law -- raise questions of first impression in the Third Circuit. The Video Privacy Protection Act, passed by Congress in 1988, prohibits the disclosure of personally identifying information relating to viewers' consumption of video related services. Interpreting the Act for the first time, the Third Circuit held that the law permits plaintiffs to sue only a person who discloses such information, not a person who receives such information. The Third Circuit also held that the Act's prohibition on the disclosure of personally identifiable information applies only to the kind of information that would readily permit an ordinary person to identify a specific individual's video watching behavior. In the Third Circuit's view, the kinds of disclosures at issue in the case, involving digital identifiers like IP addresses, fall outside the Act's protections. The plaintiffs also claim that Viacom and Google invaded their privacy by committing the tort of intrusion upon seclusion. That claim arises from allegations that Viacom explicitly promised not to collect any personal information about children who browsed its websites and then, despite its assurances, did exactly that. The Third Circuit faced a similar allegation of deceitful conduct in Google, where it vacated the dismissal of state-law claims for invasion of privacy and remanded them for further proceedings. The Third Circuit reached a similar result in this case, concluding that, at least as to Viacom, the plaintiffs have adequately alleged a claim for intrusion upon seclusion. In so doing, the Third Circuit held that the 1998 Children's Online Privacy Protection Act, a federal statute that empowers the Federal Trade Commission to regulate websites that target children, does not preempt the plaintiffs' state-law privacy claim. Accordingly, the Third Circuit affirmed the District Court's dismissal of most of the plaintiffs' claims, vacate its dismissal of the claim for intrusion upon seclusion against Viacom, and remanded the case for further proceedings. The U.S. Supreme Court denied the petition for certiorari. The Third Circuit appeals case is IN RE: NICKELODEON CONSUMER PRIVACY LITIGATION, No. 15-1441 (3d. Cir.). Attorneys for children plaintiffs: Jason O. Barnes, Esq. BARNES & ASSOCIATES 219 East Dunklin Street, Suite A Jefferson City, MO 65101 -- and -- Douglas A. Campbell, Esq. Frederick D. Rapone, Esq. CAMPBELL & LEVINE, LLC 310 Grant Street, Suite 1700 Pittsburgh, PA 15219 -- and -- Barry R. Eichen, Esq. Evan J. Rosenberg, Esq. EICHEN CRUTCHLOW ZASLOW & MCELROY, LLP 40 Ethel Road Edison, NJ 08817 Email: beichen@njadvocates.com contact@njadvocates.com -- and -- James P. Frickleton, Esq. Edward D. Robertson, III, Esq. BARTIMUS FRICKLETON ROBERTSON, P.C. 11150 Overbrook Road, Suite 200 Leawood, KS 66211 Email: jimf@bflawfirm.com krobertson@bflawfirm.com -- and -- Edward D. Robertson, Jr., Esq. Mary D. Winter, Esq. BARTIMUS FRICKLETON ROBERTSON, P.C. 715 Swifts Highway Jefferson City, MO 65109 Email: crobertson@bflawfirm.com mwinter@bflawfirm.com -- and -- Mark C. Goldenberg, Esq. Thomas Rosenfeld, Esq. GOLDENBERG HELLER ANTOGNOLI & ROWLAND, PC 2227 South State Route 157 Edwardsville, IL 62025 Email: mark@ghalaw.com tom@ghalaw.com -- and -- Adam Q. Voyles, Esq. LUBEL VOYLES LLP 5020 Montrose Boulevard, Suite 800 Houston, TX 77006 Attorneys for Amicus Curiae Electronic Privacy Information Center: Alan J. Butler, Esq. Marc Rotenberg, Esq. Electronic Privacy Information Center 1718 Connecticut Avenue, N.W., Suite 200 Washington, DC 20009 Attorneys for Appellee Viacom, Inc.: Jeremy Feigelson, Esq. DEBEVOISE & PLIMPTON LLP 919 Third Avenue New York, NY 10022 Email: jfeigelson@debevoise.com -- and -- David A. O'Neil, Esq. DEBEVOISE & PLIMPTON LLP 801 Pennsylvania Avenue, N.W., Suite 500 Washington, DC 20004 Email: daoneil@debevoise.com -- and -- Seth J. Lapidow, Esq. Stephen M. Orlofsky, Esq. BLANK ROME LLP 301 Carnegie Center, Third Floor Princeton, NJ 08540 Email: Orlofsky@BlankRome.com Attorneys for Appellee Google, Inc.: Colleen Bal, Esq. Michael H. Rubin, Esq. WILSON, SONSINI, GOODRICH & ROSATI, PC One Market Street Spear Tower, Suite 3300 San Francisco, CA 94105 Email: cbal@wsgr.com trubin@wsgr.com -- and -- Tonia O. Klausner, Esq. WILSON SONSINI GOODRICH & ROSATI, PC 1301 Avenue of the Americas, 40th Floor New York, NY 10019 Email: tklausner@wsgr.com -- and -- Jeffrey J. Greenbaum, Esq. Joshua N. Howley, Esq. SILLS, CUMMIS & GROSS P.C. One Riverfront Plaza Newark, NJ 07102 Attorney for Amicus Curiae Chamber of Commerce of the United States of America: Jeffrey B. Wall, Esq. SULLIVAN & CROMWELL LLP 1700 New York Avenue, N.W., Suite 700 Washington, DC 20006 Alex E. RINEHART, et al., petitioners, v. LEHMAN BROTHERS HOLDINGS, INC., et al., No. 16-562 (U.S.) The case returns to the U.S. Court of Appeals for the Second Circuit for the second time since 2013. After the September 2008 bankruptcy of Lehman Brothers Holdings, Inc., Alex Rinehart, on behalf of himself and all others similarly situated, brought suit on behalf of a putative class of former participants in an employee stock ownership plan ("ESOP") invested exclusively in Lehman's common stock. The Plaintiffs alleged that LBHI, Richard S. Fuld, and other individual defendants ("Plan Committee Defendants" or "Benefit Committee Defendants"), who were fiduciaries of the ESOP, breached their duty of prudence under the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. Sections 1001 et seq., by continuing to permit investment in Lehman stock in the face of circumstances arguably foreshadowing its eventual demise. The Plaintiffs also alleged that Lehman's former directors, including Lehman's former chairman and chief executive officer, Mr. Fuld, violated ERISA by failing to keep the Plan Committee Defendants apprised of material, nonpublic information that could have affected their evaluation of the prudence of investing in Lehman stock. Applying the presumption of prudence articulated in Moench v. Robertson, 62 F.3d 553 (3d Cir. 1995), and adopted by the Second Circuit in In re Citigroup ERISA Litigation, 662 F.3d 128 (2d Cir. 2011), the United States District Court for the Southern District of New York dismissed Plaintiffs' consolidated amended complaint ("CAC") and second consolidated amended complaint ("SCAC") for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6). On July 15, 2013, the Second Circuit affirmed the District Court's dismissal of both the CAC and SCAC while also applying the Moench presumption, concluding that Plaintiffs had failed to "plausibly allege[] that the Benefit Committee Defendants knew or should have known that Lehman was an imprudent investment given the mixed signals with which the fiduciaries grappled." Rinehart v. Akers, 722 F.3d 137, 151 (2d Cir. 2013). Nearly a year later, on June 25, 2014, the Supreme Court of the United States held in Fifth Third Bancorp v. Dudenhoeffer that ESOP fiduciaries are not entitled to any special presumption of prudence. 134 S. Ct. 2459, 2463 (2014). On July 1, 2014, the Supreme Court granted Plaintiffs' petition for a writ of certiorari, vacated the judgment in Rinehart, and remanded the case to the Second Circuit for further consideration in light of Fifth Third. Rinehart v. Akers, 134 S. Ct. 2900 (2014). The Second Circuit, in turn, remanded the case to the District Court, and the District Court allowed Plaintiffs to replace the SCAC with a third consolidated amended complaint ("TCAC") that narrowed their claims and shortened the class period. On July 10, 2015, the District Court dismissed the TCAC, again holding that Plaintiffs had failed to state a claim under Rule 12(b)(6). In re Lehman Bros. Sec. & ERISA Litig., 113 F. Supp. 3d 745, 769 (S.D.N.Y. 2015). Though recognizing that Fifth Third abrogated the Moench presumption of prudence formerly governing ESOP based ERISA claims in the Second Circuit, the District Court nonetheless concluded that Plaintiffs failed to allege sufficiently that the Plan Committee Defendants violated their ERISA fiduciary duties as measured by the Twombly and Iqbal pleading standards. Accordingly, the Second Circuit affirmed. The Supreme Court denied the petition for writ of certiorari to the Second Circuit. Attorneys for Alex E. Rinehart, on behalf of himself and all others similarly situated, Jo Anne Buzzo, Monique Miller Fong, on behalf of herself and others similarly situated, Maria DeSousa, and Linda DeMizio: Daniel W. Krasner, Esq. Matthew M. Guiney, Esq. WOLF HALDENSTEIN ADLER FREEMAN & HERZ LLP New York, NY -- and -- Thomas J. McKenna, Esq. Gregory Egleston, Esq. GAINEY MCKENNA & EGLESTON New York, NY Attorneys for Mary Pat Archer, Amitabh Arora, Michael Branca, Evelyne Estey, Adam Feinstein, David Romhilt, and Wendy M. Uvino: Jonathan K. Youngwood, Esq. Janet Gochman, Esq. Alexander Li, Esq. SIMPSON THACHER & BARTLETT LLP New York, NY Attorney for Richard S. Fuld, Jr.: Todd S. Fishman, Esq. ALLEN & OVERY LLP New York, NY Joshua BLACKMAN, petitioner, v. Amber GASCHO, Individually and on Behalf of All Others Similarly Situated, et al., No. 16-364 (U.S.) Amber Gascho and other Plaintiffs sued Global Fitness Holdings, LLC, alleging that between 2006 and 2012 Global sold gym memberships and incorrectly charged fees pertaining to cancellation, facility maintenance, and personal training contracts. When class counsel and Global announced the settlement, two objectors -- Joshua Blackman and the Zik objectors -- challenged its terms, both claiming that the settlement was unfair under Federal Rule of Civil Procedure 23(e). They argued that class counsel's fees were disproportionate to the claims paid, that the settlement unnecessarily required a claims process, and that the settlement contained "clear-sailing" and "kicker" provisions that suggest self-dealing by class counsel. The Zik objectors further argued that the settlement must be rejected because it failed to provide adequate compensation for the Kentucky plaintiffs' state-law claims and for plaintiffs who had signed an early, more favorable version of the contract. The district court approved the settlement. Both objectors appealed. The U.S. Court of Appeals for the Sixth Circuit found that the district court did not abuse its discretion when approving the settlement, and therefore affirmed the district court's decision. The Supreme Court denied petition for writ of certiorari to the Sixth Circuit. Attorneys for Robert J. Zik, April Zik, and James Michael Hearon: Joshua T. Rose, Esq. Hummel Coan Miller, Esq. SAGE & ROSE LLC Louisville, Kentucky -- and -- Gregory A. Belzley, Esq. BELZLEY BATHURST ATTORNEYS Prospect, Kentucky Attorneys for Joshua Blackman: Theodore H. Frank, Esq. CENTER FOR CLASS ACTION FAIRNESS Washington, D.C. Attorneys for Gascho and all others similarly situated: Kenneth J. Rubin, Esq. Thomas N. McCormick, Esq. VORYS, SATER, SEYMOUR AND PEASE LLP Columbus, Ohio -- and -- Gregory M. Travalio, Esq. Mark H. Troutman, Esq. ISAAC WILES BURKHOLDER & TEETOR, LLP Columbus, Ohio Email: gtravalio@isaacwiles.com mtroutman@isaacwiles.com Attorneys for Global Fitness: V. Brandon McGrath, Esq. BINGHAM GRENEBAUM DOLL LLP Cincinnati, Ohio Email: bmcgrath@bgdlegal.com -- and -- Richard S. Gurbst, Esq. Larisa M. Vaysman, Esq. SQUIRE PATTON BOGGS (US) LLP Cleveland, Ohio HOME DEPOT U.S.A., INC., petitioner, v. Michael BAUER, et ux, No. 16-1205 (U.S.) This case began as a simple collection action brought in the Small Claims Court of Madison County, Illinois, by Tri-State Water Treatment, Inc., against Stacey and Michael Bauer. Tri-State alleged that the Bauers failed to pay for a water treatment system it had installed at their house following a free, in-home assessment of their water. The Bauers responded on June 5, 2015, by answering the complaint and filing a counterclaim against Tri-State. But it was not just any counterclaim: it asserted a multi-state class action against Tri-State for fraud in connection with the sale of its water-treatment system. Matters became more complicated when, on February 26, 2016, the Bauers filed an amended class-action counterclaim in which they added Home Depot U.S.A., Inc., and Aquion, Inc., as counterclaim-defendants. The Bauers served the amended counterclaim on Home Depot on March 15, 2016. The amended counterclaim defines the class as consumers who purchased a water treatment system from Tri-State, Rainsoft, and Home Depot, following an in-home water test. It 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 a timely notice of removal on April 14, 2016, arguing that even though it was not an original "defendant" in the case, its status as an additional counterclaim-defendant in an action meeting the Class Action Fairness Act's criteria entitled it to take the removal step. The Bauers filed a motion to remand pursuant to 28 U.S.C. Section 1447(c), arguing that the general removal statute (Section 1446), as modified by CAFA, does not permit any kind of counterclaim-defendant (original or additional) to remove, and thus that the case had to be returned to the state court. In an order issued on September 29, 2016, the district court agreed with the Bauers' position. It concluded that CAFA did not disturb the longstanding rule that only original defendants can remove cases to federal court. The court relied in particular on First Bank v. DJL Properties, LLC, 598 F.3d 915 (7th Cir. 2010), which it read as a broad statement that only the original defendants are entitled to remove, not any of the hyphenated defendants, whether initial counterclaim defendants, new counterclaim-defendants, third-party defendants, or anything else in that general family. On October 11, 2016, Home Depot petitioned the U.S. Court of Appeals for the Seventh Circuit for permission to appeal the remand order pursuant to 28 U.S.C. Section 1453(c). The Seventh Circuit granted that request on November 16, 2016, in order to resolve the unsettled question whether CAFA permits an additional counterclaim-defendant to remove an action. In First Bank, the Seventh Circuit held that a counterclaim-defendant is not entitled to remove a case from state court to federal court under the provisions of CAFA, Section 1453(b). This case presents a related question: whether, even though the original counterclaim-defendant is barred from removing, an additional counterclaim-defendant may nevertheless do so. The Seventh Circuit concluded that the statute does not support treating an original counterclaim-defendant differently from a new one, and so it affirmed the district court's order remanding the case to state court. The Supreme Court denied petition for writ of certiorari to the Seventh Circuit. Attorney for Tri-State Water Treatment, Inc.: Mark S. Johnson, Esq. JOHNSON, SCHNEIDER & FERRELL Cape Girardeau, MO Attorney for Home Depot U.S.A., Inc.: Sidney Stewart Haskins, Esq. KING & SPALDING LLP Atlanta, GA -- and -- Russell Kenneth Scott, Esq. GREENSFELDER, HEMKER & GALE, P.C. Belleville, IL Attorney for Michael Bauer and Stacey Bauer: Sean K. Cronin, Esq. Belleville, IL -- and -- Michael R. Reese, Esq. REESE LLP New York, NY -- and -- Troy E. Walton, Esq. SCHOEN, WALTON, TELKEN & FOSTER, LLC Edwardsville, IL Attorney for Aquion, Inc., doing business as Rainsoft: Troy A. Bozarth, Esq. Hepler Broom, LLC Edwardsville, IL Jeremy MEYERS, petitioner, v. NICOLET RESTAURANT OF DE PERE, LLC, No. 16-1113 (U.S.) Jeremy Meyers appeals the district court's denial of class certification brought under the Fair and Accurate Credit Transactions Act (FACTA). This is Meyers' second putative class action under the FACTA to reach the Seventh Circuit in a matter of months. In the prior appeal, the Seventh Circuit held that sovereign immunity barred Meyers' claim against the Oneida Tribe of Wisconsin. This time, the Seventh Circuit concluded that Meyers lacks Article III standing. Therefore, the Seventh Circuit vacated the judgment of the district court and remanded the case with instructions to dismiss for lack of jurisdiction. On February 10, 2015, Meyers was given a copy of his receipt after dining at Nicolet Restaurant of de Pere in de Pere, Wisconsin. He noticed that Nicolet's receipt did not truncate the expiration date, as the FACTA requires. Two months later, Meyers filed a putative class action complaint in district court, purportedly on behalf of everyone who had been provided a non-compliant receipt at Nicolet. He sought only statutory damages. The Supreme Court declined a petition for certioriari. Attorneys for Jeremy Meyers, individually and on behalf of others similarly situated: Thomas A. Zimmerman, Jr., Esq. Matthew Charles DeRe, Esq. ZIMMERMAN LAW OFFICES, P.C. Chicago, IL -- and -- Ryan R. Graff, Esq. Nicole R. Radler, Esq. NASH, SPINDLER, GRIMSTAD & MCCRACKEN Manitowoc, WI Deborah Louise Douez v. Facebook, Inc., 36616 (British Columbia) (Civil) The plaintiff commenced an action in the B.C. Supreme Court. Relying on a contractual forum selection clause in favour of the courts of Santa Clara, California, the defendant submitted that B.C. is forum non conveniens and applied for a stay of proceedings. The plaintiff applied to certify the action as a class proceeding. The chambers judge declined to stay the proceeding and certified it as a class proceeding. The defendant appeals. The Court of Appeal for British Columbia allowed the appeal. The forum selection clause should be enforced and the proceeding stayed. The plaintiff is at liberty to bring the action in Santa Clara. The certification issues are moot. Counsel for the Appellant, M.A. Gelowitz, Esq., and T.J. Mallett, Esq. Counsel for the Respondent, C. Jones, Q.C., Esq., C. Rhone, Esq., and J. Willcock, A/S, Esq. Harold M. HOFFMAN, petitioner, v. NORDIC NATURALS, INC., No. 16- 1172 (U.S.) Harold M. Hoffman is a serial pro se class action litigant from New Jersey who frequently sues under the New Jersey Consumer Fraud Act. In a previous opinion, the Third Circuit noted that Hoffman is "an attorney who has made a habit of filing class actions in which he serves as both the sole class representative and sole class counsel." According to the record in this case, Hoffman has sued nearly 100 defendants in New Jersey state court in a period of less than four years. These defendants include Target, Whole Foods Market, GNC, Trader Joes, Barleans Organic Oils LLC, Paradise Herbs & Essentials Inc., Honest Tea Inc., Time Warner Cable, American Express, Bio Nutrition Inc., and many more. In this case, Hoffman chose to sue Nordic Naturals, Inc. for its allegedly false and misleading advertisements for fish oil supplements. Prior to bringing the present action, Hoffman filed a similar lawsuit against Nordic, asserting virtually identical claims based on the same set of facts. The District Court dismissed that first lawsuit for failure to state a claim. The District Court accordingly dismissed this second lawsuit as procedurally barred by the first. For these reasons, the Third Circuit affirmed. In August 2012, Harold Hoffman filed a putative class action lawsuit pro se against Nordic Naturals in New Jersey state court for violations of the New Jersey Consumer Fraud Act ("Hoffman I"). He alleged that Nordic misrepresented the "safety, quality, testing, constituent ingredients and purity" of its product "Ultimate Omega," a fatty acid fish oil supplement. Specifically, Hoffman claimed that, contrary to Nordic's product labeling and marketing representations, Ultimate Omega is "tainted by an undisclosed overdose of a potentially harmful ingredient." Thus, according to Hoffman, Nordic's representations that it is committed to delivering the "world's safest" omega oils and has achieved "award winning" purity levels are false. The putative class consisted of all nationwide purchasers of Ultimate Omega within a six-year period. Nordic removed Hoffman I to federal court pursuant to the CAFA, which gives federal district courts original jurisdiction over class actions in which (i) the aggregate amount in controversy exceeds $5 million, (ii) there are at least 100 members in the putative class, and (iii) there is minimal diversity between the parties. Hoffman filed a motion in the District Court to remand the case back to state court, which the District Court denied. Nordic moved for judgment on the pleadings under Federal Rule of Civil Procedure 12(c). The District Court dismissed Hoffman I without prejudice and gave Hoffman leave to file an amended complaint within 30 days. But rather than file an amended complaint in the District Court, Hoffman filed a new class action lawsuit against Nordic in New Jersey state court within the 30-day window given to amend Hoffman I. This second lawsuit ("Hoffman II") arose from facts identical to those in Hoffman I -- Hoffman's purchase of Ultimate Omega in May 2012 -- and it asserted virtually identical claims under the New Jersey Consumer Fraud Act. But there was one significant difference: the putative class size was substantially smaller. Rather than a class consisting of all nationwide purchasers of all available sizes of Ultimate Omega within a six-year period, the putative class in Hoffman II was restricted to New Jersey consumers who purchased only a 60-count bottle of Ultimate Omega (as opposed to a 120-count or 180-count bottle) within a one-year period. The purpose of this change was, it seems, to reduce the amount recoverable and therefore defeat federal jurisdiction. Undeterred by Hoffman's tactics, Nordic removed Hoffman II back to the District Court. Nordic then moved to dismiss the complaint under Federal Rule of Civil Procedure 12(b)(6), claiming that Hoffman II was barred by New Jersey's entire controversy doctrine, which is New Jersey's "application of traditional res judicata principles." In the alternative, Nordic argued that the complaint failed to state a claim under the New Jersey Consumer Fraud Act. Hoffman moved for limited discovery to determine whether subject matter jurisdiction existed under CAFA. He argued that, given the significantly reduced class size in Hoffman II, limited discovery would help the court ascertain whether the amount in controversy exceeded the $5 million jurisdictional minimum. The District Court granted Nordic's motion and dismissed Hoffman II with prejudice. It held that the action was procedurally barred under New Jersey's entire controversy doctrine and, in the alternative, that Hoffman's claims under the New Jersey Consumer Fraud Act failed for substantially the same reasons they failed in Hoffman I. The District Court then dismissed as moot Hoffman's motion for limited discovery, explaining that Hoffman's artificial narrowing of the putative class was a "poorly disguised attempt" to destroy CAFA jurisdiction. The Supreme Court denied the petition for writ of certiorari to the Third Circuit. Pro se Attorney: Harold M. Hoffman, Esq. 240 Grand Avenue Englewood, NJ 07631 Counsel for Nordic Naturals, Inc.: Michael R. McDonald, Esq. Jennifer M. Thibodaux, Esq. GIBBONS One Gateway Center Newark, NJ 07102 ********* S U B S C R I P T I O N I N F O R M A T I O N Class Action Reporter is a daily newsletter, co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA. 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