/raid1/www/Hosts/bankrupt/CAR_Public/210422.mbx
C L A S S A C T I O N R E P O R T E R
Thursday, April 22, 2021, Vol. 23, No. 75
Headlines
BAYER HEALTHCARE: Flea, Tick Collars Not Safe for Pets, Says Suit
CONTEXTLOGIC INC: Bid to Compel Arbitration in Britt Suit Granted
FARMERS GROUP: Judgment in Geter Class Suit Affirmed in Part
GREENSKY INC: Bid to Compel Arbitration in Belyea Suit Denied
GREENSKY INC: Court Narrows Barnes' Claims in Amended Balyea Suit
KOHLBERG VENTURES: Summary Judgment Bid in Wojciechowski Suit OK'd
MDL 2968: Cooper vs. Generali Insurance Row Transferred to S.D.N.Y
MDL 2969: Udesky v. Erie Transferred to W.D. Pa.
MDL 2972: Two Blackbaud Data Breach Cases Transferred to D.S.C.
MDL 2974: Two Paragard IUD Liability Suits Transferred to N.D. Ga.
MDL 2984: Five Folgers Mislabeling Suits Consolidated in W.D. Mo.
MDL 2985: Six Apple App Gambling Suits Transferred to N.D. Cal.
MDL 2987: Centralization of GM Battery Liability Suits Denied
MDL 2989: Various Short Squeeze Suits Transferred to S.D. Fla.
ONIN STAFFING: Miles Files Suit Over Illegal Background Check
PARTNER COMMS: Suit Applicants Seek Withdrawal from Ct. Proceedings
PARTNER COMMS: Suit Over Unlawful Charges and Rates Underway
PREFERRED PRECISION: Morgan Sues Over Illegally Obtained Report
SHAWS SUPERMARKETS: Bid to Dismiss First Amended Constantino Denied
TOPA INSURANCE: Caribe Class Suit Dismissed Without Leave to Amend
TOYOTA MOTOR: Court Narrows Claims in Rav4 Hybrid Fuel Tank Suit
*********
BAYER HEALTHCARE: Flea, Tick Collars Not Safe for Pets, Says Suit
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MICHAELE DPHREPAULEZZ on behalf of herself and all others similarly
situated v. BAYER HEALTHCARE LLC, and ELANCO ANIMAL HEALTH, INC.,
Case 1:21-cv-02439 (N.D. Cal., April 5, 2021) is a class action on
behalf of purchasers of Seresto Collars in the United States
against the Defendants for breach of implied warranty, unjust
enrichment, and violations of California consumer protection laws.
The complaint alleges that the Defendants manufacture, make,
market, and distribute Seresto brand flea and tick collars that
prevents fleas and ticks on pets, specifically dogs and cats, by
releasing small amounts of pesticides from the collar onto the pets
over months at a time.
The complaint relates that contrary to representations, Seresto
Collars are anything but safe for pets, as they can and have
caused, pets and their owners to suffer serious injuries. Thus, any
benefit of flea or tick prevention that the Products may offer is
far outweighed by the consequences to the pet, other pets nearby,
to the pet owner, or to others in the immediate vicinity, including
family members, asserts the complaint.
Plaintiff Michaele Dphrepaulezz purchased a Seresto Collar for her
dog in September 2020 in Arcata, California. In purchasing the
Product, Plaintiff relied on Defendants' false, misleading, and
deceptive marketing of the Products as a safe flea and tick
medication. Plaintiff read and followed the instructions of the
Product when applying it to her dog. However, after application,
Plaintiff's one-and-a-half-year-old service dog became extremely
lethargic. Plaintiff removed the collar and the dog recovered.
Defendant Bayer Healthcare LLC is the former owner of the Seresto
brand of collars, and sold the brand to Defendant Elanco Animal
Health, Inc. in 2020. Bayer is a Delaware corporation and is
headquartered in Whippany, New Jersey.
Defendant Elanco Animal Health, Inc. is the current owner of the
Seresto brand. Elanco is an Indiana corporation and is
headquartered in Greenfield, Indiana. Since purchasing the Seresto
brand in 2020, Elanco has sold the Products at issue.[BN]
The Plaintiff is represented by:
L. Timothy Fisher, Esq.
Yeremey Krivoshey, Esq.
Blair E. Reed, Esq.
BURSOR & FISHER, P.A.
1990 North California Blvd., Suite 940
Walnut Creek, CA 94596
Telephone: (925) 300-4455
Facsimile: (925) 407-2700
E-Mail: ltfisher@bursor.com
ykrivoshey@bursor.com
breed@bursor.com
- and -
Scott A. Bursor, Esq.
BURSOR & FISHER, P.A.
701 Brickell Avenue, Suite 1420
Miami, FL 33131
Telephone: (305) 330-5512
Facsimile: (305) 676-9006
E-Mail: scott@bursor.com
CONTEXTLOGIC INC: Bid to Compel Arbitration in Britt Suit Granted
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In the case, TIFFANY BRITT, Plaintiff v. CONTEXTLOGIC, INC.,
Defendant, Case No. 3:20-cv-04333-WHA (N.D. Cal.), Judge William
Alsup of the U.S. District Court for the Northern District of
California granted the Defendant's petition to compel arbitration,
and denied the Plaintiff's motion for partial summary judgment.
In the putative class action for online consumer transactions, the
Plaintiff brings claims under California's Consumer Legal Remedies
Act and Unfair Competition Law alleging that defendant is
deceptively and unlawfully functioning as an unlicensed distributor
of contact lenses and failing to require purchasers to provide a
prescription before purchasing contact lenses in violation of the
Fairness to Contact Lens Consumers Act, 15. U.S.C. Sections
7601-7610.
The Defendant operates online marketplaces including Wish, Cute,
Mama, Home and Geek. Each of its marketplace platforms are
available via web browser or mobile apps. Through its platforms,
the Defendant allows third parties "to set up stores that list and
sell items to" consumers.
Plaintiff Britt is an individual and a resident of California. She
alleges that the sale or distribution of contact lenses, even those
that do not correct vision and are purely for cosmetic purposes
(plano contacts), is prohibited by Federal and state law for
persons and entities that are not licensed to sell, distribute, or
facilitate the sale of contact lenses. She further alleges that
the Defendant deceives consumers by representing that it prohibits
the sale or listing for sale of contact lenses on its platforms.
Perhaps incredibly, plaintiff alleges she reviewed and relied on
the Defendant's prohibited product listings policy, which applies
only to third-party sellers and is only accessible through the
"Wish for Merchants" tab on the Wish.com website, while also
maintaining that she was unaware of the terms of use which applied
to her use of the Wish platforms.
The question now is whether the Plaintiff must be required to
arbitrate her claims pursuant to the mandatory arbitration
agreement in the Defendant's terms of use. The Plaintiff seeks
declaratory relief that the mandatory arbitration provision in the
Defendant's terms of use does not bind the Plaintiff because she
did not assent to them or, in the alternative, that the terms of
use are unenforceable.
The Plaintiff refers in her complaint to Judge James Donato's
decision in 2018 that the Defendant's log-in and sign-up screens
did not give sufficient notice of the terms of use and, therefore,
no agreement to arbitrate was formed. She admits, however, that at
least since that decision, the Defendant has changed the log-in
screen that appears on its Wish platform to appear -- minus the red
box around the notice language.
The Plaintiff argues that the addition of the notice language,
appearing in the red box, was not enough to give notice of the
terms of use. Importantly, however, she does not say that she
never interacted with the above screen when she "made contact lens
purchases through Wish.com's website and/or mobile application at
various times from January to June of 2019 via Wish.com's mobile
phone application." Thus, the Plaintiff implicitly concedes that
when she made the contact lens purchases that are the subject of
her complaint, she interacted with the screen. Teh Defendant
confirms that the log-in screen, minus the red box, is an accurate
representation of the Wish.com log-in screen the Plaintiff would
have used to log-in and make her contact lens purchases.
The Plaintiff moves for partial summary judgment on the issue of
her assent to the terms, asserting that she did not assent and,
therefore, is not bound to them, and, even if the parties did form
an agreement to arbitrate, it is unenforceable. The Defendant
opposes and petitions to compel arbitration.
A hearing was held on the motions. Reasonable and narrowly
directed discovery on the issue of the Plaintiff's assent to the
terms of use was permitted. All other merits-based discovery was
stayed pending resolution of the motions. The parties were ordered
to submit supplemental briefs incorporating their discovery
findings.
The Plaintiff deposed Atish Bhattacharjya, an employee of the
Defendant, whose declaration formed the basis of the Defendant's
petition to compel arbitration. The Defendant deposed the
Plaintiff. The parties filed supplemental briefs, oppositions, and
replies, complete with exhibits and deposition transcripts. A
second hearing was held on the arbitration question with the
benefit of the discovery and supplemental briefs.
Judge Alsup finds that the Defendant's Wish sign-in screen served
to put the Plaintiff on constructive notice of the terms of use,
and when she logged-in in December 2018, she manifested her assent
thereto. At the April 7 hearing, the counsel for the Plaintiff
conceded that if the Plaintiff was put on constructive notice, that
notice would carry forward to her uture use of the Wish
application. The concession is well taken. Thus, when the
Plaintiff bought contact lenses on the Defendant's Wish application
in January and March 2019, she was bound by the terms of use,
including the mandatory arbitration provision.
Judge Alsup also finds that the current version of the Defendant's
terms of use, which governs the case, provides that "the
arbitrator, and not any federal, state or local court or agency
will have exclusive authority to resolve any dispute related to the
interpretation, applicability, enforceability or formation of this
Arbitration Agreement including, but not limited to any claim that
all or any part of this Arbitration Agreement is void or voidable."
This language, according to the Judge, clearly and unmistakably
delegates to the arbitrator the authority to decide the
enforceability or validity of the arbitration agreement in the
Defendant's terms of use. The Plaintiff must make her
unconscionability arguments to the arbitrator in the first
instance.
Therefore, Judge Alsup denied the Plaintiff's motion for partial
summary judgment. He granted the Defendant's petition to compel
arbitration. The Court will retain jurisdiction to enforce the
award and, if the Defendant drags its feet in teeing up the
arbitration, to re-activate the civil action. A further case
management conference will be held at 11:00 a.m. on Oct. 7, 2021.
A full-text copy of the Court's April 9, 2021 Order is available at
https://tinyurl.com/mttc4dw4 from Leagle.com.
FARMERS GROUP: Judgment in Geter Class Suit Affirmed in Part
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Judge James D. Blacklock of the U.S. Supreme Court of Texas
reverses in part and affirm in part the court of appeals' judgment
in the case, FARMERS GROUP, INC., FARMERS UNDERWRITERS ASSOCIATION,
FIRE UNDERWRITERS ASSOCIATION, FARMERS INSURANCE EXCHANGE, AND FIRE
INSURANCE EXCHANGE, Petitioners v. SANDRA GETER, ON BEHALF OF
HERSELF AND ALL OTHERS SIMILARLY SITUATED, GERALD HOOKS, JR., LESLY
K. NOLEN, AND JOSEPH C. BLANKS, P.C., Respondents, Case No. 19-0996
(Tex.).
Beginning in 2000, the Texas homeowners insurance market
experienced a large increase in mold claims. At the time, Farmers
Group, Inc., like other insurers, offered a broad "all risk" policy
known as the HO-B policy. This policy was approved by the Texas
Department of Insurance (TDI) under its statutory authority to
approve insurance forms. Homeowners insurance policies cannot be
issued in Texas without TDI approval.
In November 2001, Farmers and other insurers decided to stop
offering HO-B policies. Farmers decided to offer instead a less
comprehensive "named peril" policy known as the HO-A policy. A
letter from Farmers executive John Hageman to TDI stated that the
decision to discontinue the HO-B policy and offer the HO-A policy
was "motivated primarily by the dramatic increases that we have
experienced for water, mold and foundation claims, and the
resultant underwriting losses." TDI approved Farmers' decision and
mandated that all insurers remove the HO-B policy from the market
by the end of 2002. It approved an enhanced HO-A policy, one
including coverage for some water claims, which Farmers intended to
offer as a substitute for the HO-B policy.
Pursuant to statute, an insurer may choose not to renew a policy so
long as it provides the insured a written notice no later than 30
days before the policy expires. In 2002, Farmers sent a notice of
non-renewal to its HO-B policyholders, including Respondent Sandra
Geter. The notice stated that the policyholders' existing policies
would not be renewed and that Farmers would no longer offer the
HO-B policy "because of substantial losses which we have incurred
for the homeowners and dwellings lines of insurance in Texas." The
notice informed policyholders that Farmers would continue to offer
coverage under its HO-A policy. In August 2002, Geter filed the
lawsuit in Jefferson County after receiving Farmers' non-renewal
notice.
In addition to the Geter suit now before the Court, a separate
class-action suit was filed in August 2002 in Travis County. The
Travis County suit was originally brought by the State of Texas on
behalf of TDI as the sole plaintiff. It accused Farmers of various
statutory violations related to the premiums charged for homeowners
policies. Specifically, it alleged that Farmers wrongfully raised
premiums despite offering less coverage when it replaced the HO-B
policy with the HO-A policy. TDI did not allege that Farmers
improperly failed to renew the HO-B policies, as Geter alleges.
In 2002, the State amended the Travis County suit to include
certain class-action allegations. In 2003, class members Gerald
Hooks and Lesly Hooks (later Lesly Nolen) alleged that Farmers
breached the HO-B policy by refusing to renew it. This
breach-of-contract claim mirrored the contract non-renewal claim
that is the focus of the pending Geter case.
In 2016, after a series of appeals and many years of litigation,
the trial court in the Travis County suit rendered judgment
approving a settlement agreement. The agreement released various
class claims against Farmers but excepted from the release the
wrongful non-renewal claim asserted in the Geter case.
In August 2002, Respondent Sandra Geter filed the Jefferson County
suit now before the Court. She claimed that Farmers did not have
the right to non-renew HO-B policies, including her policy. She
sought a declaratory judgment that the non-renewal was ineffective
and that class members were entitled to renew their HO-B policies.
She sought and received class certification from the trial court.
The parties filed cross-motions for summary judgment. Farmers
relied principally on its statutory right to non-renew policies
with 30-days' notice. Geter relied principally on contract
language in the HO-B policy. She argued that the mold claims that
prompted Farmers to non-renew the HO-B policy were "claims for
losses resulting from natural causes" under paragraph 6(a).
The trial court granted summary judgment to Geter and the class on
Geter's declaratory judgment claim, holding that Farmers breached
the insurance contract by not renewing the policies. The court
held that each class member was entitled to renew his HO-B policy.
The court later ordered Farmers to issue HO-B policies to class
members wishing to renew them at a premium set by the trial court.
That order has been superseded while the case is appealed, and
Farmers has not offered any HO-B policies since 2001.
Years later, in 2016, the trial court held a jury trial on attorney
fees. Based on the jury's findings and the court's application of
a multiplier, the court awarded over $3 million in attorney fees
along with substantial costs. The trial court rendered a final
judgment in 2017. The court of appeals affirmed the trial court's
judgment insofar as the trial court held that Farmers breached the
insurance contract when it refused to renew the HO-B policies.
However, the court of appeals reversed the portion of the trial
court's judgment ordering Farmers to issue the insurance policies
at a determined premium. The court of appeals remanded the case
for a decision on the proper remedy, if any, for the class's
breach-of-contract claim. The court of appeals affirmed the award
to the class of attorney fees and costs. It reversed the order
striking the intervention by Hooks and Nolen. It did not address
the trial court's decision to strike the intervention of Joseph C.
Blanks, P.C. because it found that intervention to be duplicative
of the Hooks and Nolen intervention.
The primary issue is how to interpret a homeowners insurance policy
that has been out of use for nearly 20 years.
Judge Blacklock explains that the dispute comes down to what
paragraph 6(a) of the policy means by "claims for losses." If the
language refers to "claims" and "losses" of the individual
policyholder, then Farmers is correct that the policy does not
preclude an insurer from terminating the policy's use statewide
because of systemic losses that make continued use of the policy
financially untenable. If "claims" and "losses" also refers to
statewide or systemic "claims" and "losses," then Geter is correct
that the policy prohibited Farmers from deciding to non-renew.
Judge Blacklock is guided by the rule of contract interpretation
that favors consistent use of a term that is used more than once.
Words used in one sense in one part of a contract are, as a general
rule, deemed to have been used in the same sense in another part of
the instrument, where there is nothing in the context to indicate
otherwise, citing Gonzalez v. Mission Am. Ins. Co., 795 S.W.2d 734,
736 (Tex. 1990); accord Solvent Underwriters Subscribing to Energy
Ins. Int'l, Inc. Cover Note No. EII-3824 v. Furmanite Am., Inc.,
282 S.W.3d 661, 669-70 (Tex. App.-Houston [1st Dist.] 2009, pet.
denied). While this rule is not rigidly applied, the Court has
recognized a presumption that identical words used in different
parts of the same insurance policy should generally be given the
same meaning. Applying this rule, the Judge concludes that the
insurer correctly interprets the policy and was therefore entitled
to summary judgment on the individual and class claims.
The trial court awarded substantial attorney fees and costs to the
class. The court of appeals affirmed the award. Class members
Hooks and Nolen intervened to seek fees related to their attorney's
work in obtaining a carve-out of the Geter claims from the
settlement of the Travis County suit. For the same reason, Joseph
C. Blanks, P.C., counsel for Hooks and Nolen in both cases, also
sought to intervene. The trial court struck the interventions of
Hooks, Nolen, and Joseph C. Blanks, P.C. The court of appeals
reversed the order striking the intervention of Hooks and Nolen but
did not reverse the order striking the intervention of Joseph C.
Blanks, P.C.
Under an abuse of discretion standard, Judge Blacklock concludes
the trial court had "sufficient cause" to strike the intervention
of Hooks and Nolen. The court of appeals erred in reversing the
striking of the plea in intervention. The Judge cannot conclude
the trial court abused its discretion in declining to take on such
a burden at the request of parties whose connection to the
Jefferson County suit was tangential at best. Hooks and Nolen also
have ultimately accomplished no "favorable results" for the Geter
class.
Judge Blacklock concludes that Farmers was entitled to summary
judgment on Geter's breach-of-contract claim for non-renewal of the
HO-B policies. He reverses the court of appeals' judgment
regarding this claim and render judgment that the Plaintiff and the
class take nothing on this claim. He reverses the court of
appeals' judgment on the fee request of the class counsel and
remands the case to the trial court for further proceedings on the
requests for attorney fees and costs. The Judge also reverses the
court of appeals' judgment insofar as it revived the intervention
of Hooks and Nolen, and he reinstates the trial court's order
striking the intervention. Finally, the Judge affirms the court of
appeals' judgment insofar as it affirmed the trial court order
striking the intervention of Joseph C. Blanks, P.C.
A full-text copy of the Court's April 9, 2021 Order is available at
https://tinyurl.com/2cekt6w7 from Leagle.com.
GREENSKY INC: Bid to Compel Arbitration in Belyea Suit Denied
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In the case, ELIZABETH BELYEA, et al., Plaintiffs v. GREENSKY,
INC., et al., Defendants, Case No. 20-cv-01693-JSC (N.D. Cal.),
Magistrate Judge Jacqueline Scott Corley of the U.S. District Court
for the Northern District of California denied GreenSky's motion to
compel arbitration of the Plaintiffs' claims.
Elizabeth Belyea, Heidi Barnes, Hazel Lodge, and David Ferguson
bring the putative class action against GreenSky of Georgia, LLC
and GreenSky, LLC, alleging violation of California's consumer
protection, lending and credit services laws.
GreenSky is a "financial technology company" which among other
things acts as a loan servicer for "point-of-sale loans for
consumers to pay for home improvement, home repair, and healthcare
costs." Between 2016 and 2019, each of the Plaintiffs took out one
or more such loans to pay for home repair projects. In each
Plaintiff's case, the contractor or plumber ("merchant") suggested
that he could arrange financing for the home repair/improvement
project. Once the Plaintiff agreed, the merchant "procured a loan"
for the plaintiff using the GreenSky App. Each of these loans was
provided by a third-party bank--generally, SunTrust Bank (now
Truist) or InTrust Bank--which was serviced by GreenSky.
Ms. Belyea financed $23,600 through a GreenSky-serviced loan, with
GreenSky transferring those funds directly to the plumber. The
loan carried a 25% APR over seven years of monthly payments, with
an 18-month interest-waived promotion. Lodge financed two loans
for a total of $14,607 through a GreenSky-serviced loan, with
GreenSky transferring those funds directly to the plumber. The
loans carried a purported 0% APR over four years of monthly
payments. Ferguson financed two loans for a total of $10,117.50
through the GreenSky loan program. Each Plaintiff's loan included
an undisclosed merchant fee which was paid directly to GreenSky.
As a result of the unlawful fee, each Plaintiff paid more than they
otherwise would have.
Ms. Belyea filed the putative class action in the Superior Court
for the County of San Francisco against GreenSky, alleging
violations of California's lending and credit services laws, as
well as consumer protection laws. GreenSky thereafter removed the
action to the Court under the Class Action Fairness Act, 28 U.S.C.
Section 1332(d)(2)(A) ("CAFA"). Less than a week later, GreenSky
filed a motion to compel arbitration which the Court denied finding
that GreenSky failed to prove by a preponderance of the evidence
that Belyea agreed to arbitrate.
Ms. Belyea thereafter filed a motion for leave to file an amended
complaint, and following GreenSky's stipulation to amendment, the
now operative FAC was filed. The FAC added Heidi Barnes, Hazel
Lodge, and David Ferguson as representative plaintiffs. In
response to the FAC, GreenSky moves to compel arbitration of
Belyea, Lodge, and Ferguson's claims and moves to dismiss Barnes'
claims. In support of its motions to compel arbitration, GreenSky
offers unsigned copies of the Plaintiffs' loan agreements. Each of
these agreements includes Arbitration Provision.
The Court heard argument regarding these motions on Jan. 14, 2021.
As a preliminary matter, the Plaintiffs insist that the Court need
not even decide whether they agreed to arbitrate disputes arising
from their GreenSky loan because GreenSky is not a signatory to the
loan agreement that includes the Arbitration Provision that
GreenSky seeks to enforce.
Magistrate Judge Corley disagrees. She finds that the Arbitration
Provision identifies "the circumstances and procedures under which
Claims that arise between you and us will be resolved through
binding arbitration." By servicing the loan memorialized in the
loan agreement containing the Arbitration Provision, GreenSky is at
least "a third party providing any product, service or benefit in
connection with the Agreement." The Plaintiffs do not contend
otherwise. As GreenSky falls within the Arbitration Provision's
definition of "us," it may move to compel arbitration.
GreenSky insists that the Plaintiffs agreed to the Arbitration
Provision because (1) Greensky provided the Plaintiffs with the
loan agreement containing the Arbitration Provision by at least
three different methods, and (2) the Plaintiffs' use of the
Shopping Pass associated with the loans demonstrates their assent
and acceptance of the Arbitration Provision.
Based on GreenSky's argument that Belaya's use of the Shopping Pass
constituted assent, the Court previously concluded that the
contract most closely resembles a browsewrap agreement. GreenSky
now disputes that characterization and argues in a footnote that
the Arbitration Provision is more akin to a clickwrap agreement.
Its President and CEO attests that when consumers complete a loan
application using the GreenSky App -- as the Plaintiffs did -- the
GreenSky App requires the loan applicant to "certifyy that he had
received a copy of the Installment Loan Agreement ... in a manner
he could retain." It also argues that it provided the Plaintiffs
with notice of the Arbitration Provision through additional means
(email and mail) prior to each Plaintiff's use of the Shopping
Pass, and that this notice coupled with Shopping Pass use is
sufficient to demonstrate assent.
Magistrate Judge Corley finds that GreenSky has failed to show
through undisputed facts that the Plaintiffs received notice of the
Arbitration Provision through the GreenSky App and the
point-of-sale loan application process and then assented to its
terms, or that Plaintiffs otherwise consented to the Arbitration
Provision through the loan application process. She also finds
that GreenSky has not met its burden of producing evidence
sufficient to show that the emails it contends it sent to the
Plaintiffs put the Plaintiffs on notice of the loan agreement and
its Arbitration Provision and that the Plaintiffs thereafter
assented to the Arbitration Provision. Lsatly, she finds that
GreenSky has not met its burden of demonstrating that the
Plaintiffs' receipt of the loan agreements containing the
Arbitration Provision via the U.S. Mail coupled with the
Plaintiffs' silence amounts to assent to the Arbitration
Provision.
For the reasons she stated, Magistrate Judge Corley denied
GreenSky's motion to compel arbitration. Greensky has not met its
burden of proving by a preponderance of the evidence that any named
Plaintiff assented to the Arbitration Provision. GreenSky's
response to the FAC will be filed in 21 days of the date of the
Order. In the event that GreenSky moves to dismiss rather than
answer, GreenSky is cautioned to avoid duplicative filings and will
file a single motion and not separate motions for each Plaintiff.
The Court will hold a further case management conference on May 6,
2021 at 1:30 p.m. via Zoom video. A joint case management
conference statement is due one week in advance.
A full-text copy of the Court's April 9, 2021 Order is available at
https://tinyurl.com/yvuexka3 from Leagle.com.
GREENSKY INC: Court Narrows Barnes' Claims in Amended Balyea Suit
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In the case, ELIZABETH BELYEA, et al., Plaintiffs v. GREENSKY,
INC., et al., Defendants, Case No. 20-cv-01693-JSC (N.D. Cal.),
Magistrate Judge Jacqueline Scott Corley of the U.S. District Court
for the Northern District of California granted in part and denied
in part GreenSky's motion to dismiss Heidi Barnes' claims.
Elizabeth Belyea, Heidi Barnes, Hazel Lodge, and David Ferguson
bring the putative class action against GreenSky of Georgia, LLC
and GreenSky, LLC alleging violation of California's consumer
protection, and lending and credit services laws.
In September 2016, Heidi Barnes contacted Reliable Home
Improvement, Inc., regarding building a patio at her home in
Roseville, California. The contractor told Barnes that the project
would cost more than $10,000, but that she could finance the
project. Using the GreenSky app, the contractor proceeded to
procure a loan from InTrust Bank of Wichita on Barnes' behalf.
Barnes ended up financing $7,500 through the GreenSky loan program.
The loan carries a 6.99% APR over 120 monthly payments, with a
five-month promotional period. She alleges that GreenSky received
9% of the loan as a merchant fee, but the merchant fee was not
disclosed to her. As a result, she ended up paying more for her
loan than she otherwise should have. In addition, GreenSky
"conducted the entire transaction without a license from the
California Department of Business Oversight, or being registered as
a credit services organization with the California Department of
Justice."
In January 2020, Plaintiff Belyea filed the putative class action
in the Superior Court for the County of San Francisco against
GreenSky alleging violations of California's lending and credit
services laws, as well as consumer protection laws. GreenSky
thereafter removed the action to the Court alleging jurisdiction
under the Class Action Fairness Act, 28 U.S.C. Section
1332(d)(2)(A) ("CAFA").
Less than a week later, GreenSky filed a motion to compel
arbitration which the Court denied finding that GreenSky failed to
prove by a preponderance of the evidence that Beylea agreed to
arbitrate. Beylea thereafter filed a motion for leave to file an
amended complaint, and following GreenSky's stipulation to
amendment, the now operative FAC was filed. The FAC added Heidi
Barnes, Hazel Lodge, and David Ferguson as representative
plaintiffs.
The Defendants have moved to compel arbitration of the claims of
Belyea, Lodge, and Ferguson, and move to dismiss Barnes' claims
under Rules 12(b)(6) and 12(b)(1). Magistrate Judge Corley's Order
addresses the motion to dismiss. She held an oral argument on Jan.
14, 2021.
I. Failure to State A Claim
Barnes pleads four claims for relief: (1) violation of California
Credit Services Act ("CSA"), Cal. Civ. Code Sections 1789.10, et
seq.; (2) violation of California's Consumer Legal Remedies Act
("CLRA"), Cal. Civ. Code SectionSection 1750, et seq.; (3)
violation of California's Unfair Competition Law ("UCL"), Cal. Bus.
& Prof. Code Sections 17200, et seq.; and (4) unjust
enrichment/quasi-contract.
GreenSky's motion to dismiss under 12(b)(6) is two-fold. First,
GreenSky insists that Barnes' CSA, CLRA, and unjust enrichment
claims are barred by the three-year statute of limitations.
Second, and in the alternative, it contends that Barnes' CLRA and
UCL claims fail to satisfy Rule 9(b) and that her CSA claim fails
as a matter of law.
A. Statute of Limitations
GreenSky maintains that because Barnes' allegations involve a loan
she obtained on Sept. 6, 2016 any claim subject to a three-year
statute of limitations is time-barred. Barnes does not dispute
that the action was filed more than three years after she obtained
the GreenSky loan; instead, she insists that her claims are timely
based on (1) a continuous accrual theory, (2) the delayed discovery
rule, and (3) the fraudulent concealment doctrine.
Magistrate Judge Corley holds that (i) Barnes has not plausibly
alleged that the continuous accrual theory tolls her claims; (ii)
while Barnes argues in her opposition that she could not have
discovered the facts that give rise to her claims, she still must
allege when and how she eventually did so because without such
allegations, it is not plausible that she could not have earlier
discovered facts sufficient to put her on inquiry; (iii) Barnes has
not adequately pled fraudulent concealment for the same reason she
has not adequately pled that the delayed discovery rule
applies—she had not pled any facts regarding her discovery of the
alleged fraud.
Accordingly, Barnes' CLRA, CSA, and unjust enrichment claims are
dismissed as barred by the three-year statute of limitations. To
the extent that Barnes has a good faith basis for doing so, she may
amend her complaint to allege tolling.
B. Barnes' UCL Claim
The UCL prohibits "any unlawful, unfair or fraudulent business act
or practice." Because the UCL is broadly remedial and written
disjunctively, "it establishes three varieties of unfair
competition -- acts or practices which are unlawful, or unfair, or
fraudulent." Barnes alleges a violation of all three prongs, but
the Defendants have only moved to dismiss the claim under the
fraudulent and unlawful prongs.
Magistrate Judge Corley finds that (i) Barnes' UCL claim predicated
on a violation of the CFL is adequately pled; and (ii) Barnes has
plausibly pled a UCL claim under the fraudulent claim because her
allegation that because the merchant fee was not disclosed she paid
more for the loan than she otherwise would have plausibly supports
an inference of reliance. Accordingly, Barnes has plausibly pled a
UCL claim under the fraudulent claim.
II. Standing
GreenSky separately moves to dismiss Barnes' injunctive relief
claim under Federal Rule of Civil Procedure 12(b)(1) on the grounds
that Barnes lacks standing to pursue these claims because she fails
to plead an immediate or threatened injury. Barnes insists that
she has adequately pled standing because she faces pecuniary harm
going forward from GreenSky's conduct; that is, she is continuing
to make monthly payments that are inflated due to GreenSky's
merchant fee. GreenSky maintains that this is insufficient because
her loan agreement represents "a singular transaction" and that she
continues to make loan payments is not relevant to the question of
injury.
Magistrate Judge Corley determines that the context of Barnes'
continuous accrual theory, she has not alleged that the allegedly
unlawful fees are part of her monthly interest payments as opposed
to a fee that was assessed at the beginning of her loan. That is,
Barnes does not allege that she is seeking to enjoin GreenSky's
ongoing collection of this allegedly unlawful fee. To the extent
that Barnes suggests in her opposition brief that she could allege
that her "future payments will continue to be inflated by the cost
of GreenSky's excessive fees as the fees are taken as a function of
both the principal and interest on the loan -- which the Plaintiff
will continue to pay for years to come," Barnes will be granted
leave to amend to include these allegations which are not in the
FAC.
III. Conclusion
For the reasons she stated, Magistrate Judge Corley granted in part
and denied in part GreenSky's motion to dismiss Barnes' claims.
Barnes' CSA, CLRA, and unjust enrichment claims are dismissed with
leave to amend to the extent that Barnes has a good faith basis for
alleging tolling consistent with the Order. Her UCL claim is
dismissed with leave to amend to the extent that she can allege an
ongoing injury sufficient to establish Article III standing.
Barnes' amended complaint is due in 21 days.
A full-text copy of the Court's April 9, 2021 Order is available at
https://tinyurl.com/23tfm3ed from Leagle.com.
KOHLBERG VENTURES: Summary Judgment Bid in Wojciechowski Suit OK'd
------------------------------------------------------------------
In the case, PETER WOJCIECHOWSKI, Plaintiff v. KOHLBERG VENTURES,
LLC, Defendant, Case No. 16-cv-06775-TSH (N.D. Cal.), Magistrate
Judge Thomas S. Hixon of the U.S. District Court for the Northern
District of California grants Kohlberg Ventures' Motion for Summary
Judgment pursuant to Federal Rule of Civil Procedure 56.
Kohlberg Ventures is a limited liability company that operates as a
venture capital firm that invests its own capital in, among other
things, early stage cleantech companies. James Kohlberg is a
Co-Founder and sole Member (owner) of Kohlberg Ventures. John S.
Eastburn Jr. is a Co-Founder and Manager of Kohlberg Ventures.
Kohlberg Ventures' corporate address is and at all times was 3000
Alpine Road, Portola Valley, CA. Kohlberg Ventures never has
manufactured any products, nor has it ever had officers or
directors. Neither CEP Inc. nor CEP LLC was a subsidiary of
Kohlberg Ventures.
In February 2013, Kohlberg Ventures made its only investment in CEP
Inc. by purchasing Series F stock, after which Kohlberg Ventures
owned approximately 3% of the total outstanding shares of CEP Inc.
At the time of the employment terminations at issue in the case,
various entities controlled by James Kohlberg owned a total of
approximately two-thirds of CEP Inc. These entities, each of which
James Kohlberg was either the sole owner or controlling
shareholder, were: The James A. Kohlberg Revocable Trust, Bay Area
Holdings Inc., KCEP Acquisition Company LLC, KCEP 2 Acquisition
Company LLC ("Kohlberg Entities"), in addition to the shares owned
by Defendant Kohlberg Ventures LLC.
Kohlberg Ventures has never had an ownership interest in or right
to control any of these Kohlberg Entities. Nonetheless, in a March
30, 2014 letter to Samsung Everland, a potential ClearEdge
customer, Kohlberg stated that "As you may know, Kohlberg Ventures,
LLC and its affiliates ('KV') is the majority shareholders of
ClearEdge, in which we began investing in 2004. Over this period,
KV has invested over $130,000,000 million in the company." On
March 10, 2014, Kohlberg Ventures loaned $5 million dollars to CEP
Inc. to address CEP Inc.'s near-term financing needs. Thus, its
financial involvement with ClearEdge was limited to its Series F
investment in and subsequent $5 million loan to CEP Inc. Neither
CEP Inc. nor CEP LLC was a subsidiary of Kohlberg Ventures. Id.
Mr. Wojciechowski was an employee of ClearEdge in its South Windsor
Facilities. On April 25, 2014, ClearEdge terminated Wojciechowski
without notice. Six days later, on May 1, 2014, ClearEdge filed
for bankruptcy.
Mr. Wojciechowski filed an adversary class action against ClearEdge
in bankruptcy court, alleging that CEP LLC and CEP Inc. were a
"single employer" under the WARN Act and that it violated the Act
when it fired him and other employees without the 60-day advance
notice required by the Act. Wojciechowski entered into a
settlement agreement with both ClearEdge entities in which he and
the class released all claims they had against them and their
respective estates, "excluding any third parties which may or may
not be affiliated with Defendants ClearEdge Power, Inc. and
ClearEdge Power LLC, including but not limited to Kohlberg Ventures
LLC." Kohlberg Ventures was not involved in the bankruptcy
proceedings or in settlement negotiations. The bankruptcy court
approved the settlement agreement, the ClearEdge bankruptcy estate
paid a portion of the class members' WARN Act wages and benefits,
and the case closed soon thereafter.
Mr. Wojciechowski, on behalf of himself and a certified class, then
filed the putative class action on Nov. 11, 2016, seeking from
Kohlberg Ventures, as a "single employer" with ClearEdge, an award
for the balance of the WARN Act wages and benefits, i.e., what the
Class is owed under the Act less the amount received from the
ClearEdge estate.
In his Complaint, ECF No. 1, Wojciechowski seeks to recover damages
for alleged violations of the Worker Adjustment and Retraining
Notification Act ("WARN Act"), 29 U.S.C. Sections 2101-2109. He
alleges that Kohlberg Ventures, his employer ClearEdge Power, LLC
("CEP LLC") and its owner, ClearEdge Power, Inc. ("CEP Inc.")
constitute a "single employer" under the WARN Act and are liable
for violation of the Act's notice requirement.
On Feb. 7, 2017, Kohlberg Ventures moved to dismiss Wojciechowski's
claim on the basis of claim preclusion, and, on April 11, 2017, the
district court granted Kohlberg's motion with prejudice.
The Ninth Circuit reversed. It held that claim preclusion does not
bar Wojciechowski's current claim because the settlement agreement
-- in particular, the intent of the settling parties -- determines
the preclusive effect of the previous action and the settlement
agreement explicitly did not release Wojciechowski and the class'
claims against Kohlberg. It stated in a footnote that, while
liability under the WARN Act extends only to a person's "employer,"
29 U.S.C. Section 2104(a)(1), the term "employer" may include
"parent and subsidiary companies depending on the degree of their
independence from one another and considering (i) common ownership,
(ii) common directors and/or officers, (iii) de facto exercise of
control, (iv) unity of personnel policies emanating from a common
source, and (v) the dependency of operations.
On May 8, 2019, the case was remanded and reassigned to the
undersigned. On Nov. 4, 2019, Wojciechowski's Class Certification
Motion was granted, certifying a class comprised of Wojciechowski
and all similarly situated former employees who worked at or
reported to one of ClearEdge Power's Facilities in Connecticut, who
were terminated without cause on or about April 25, 2014 and within
30 days of that date or who were terminated without cause as the
reasonably foreseeable consequence of the mass layoffs and/or plant
closings ordered on April 25, 2014.
Kohlberg Ventures has made the instant motion seeking an order
granting summary judgment as a matter of law on the grounds that
"single employer" status is not a basis for imposing joint
liability pursuant to the WARN Act and that, in any event, Kohlberg
Ventures was not the employer of Wojciechowski or the class.
A. The Requirements of the WARN Act
Magistrate Judge Hixon explains that the WARN Act requires certain
employers to provide 60-day' notice to employees prior to a "plant
closing" or a "mass layoff." An employer who fails to comply with
the WARN Act's provisions is liable to each affected former
employee for back pay and benefits for up to sixty days, plus
attorney's fees. There is no dispute that the reduction in force
and subsequent closure of ClearEdge's South Windsor plant triggered
the Act's notice requirement and that such notice was not provided
to Wojciechowski and the class.
B. "Single Employer" Status Determines Coverage by the WARN Act
Magistrate Judge Hixon holds that Kohlberg Ventures' argument that
a determination of status as a "single employer" cannot form the
basis of a subsequent finding of liability is going a step too far.
If the WARN Act applies to an employer's conduct, then violation
of the WARN Act subjects that employer to liability to those hurt
by such conduct. There is no dispute that the WARN Act applies to
ClearEdge and that, with only one Member and one Manager, Kohlberg
Ventures would not, on its own, be covered by the Act. However, if
ClearEdge and Kohlberg Ventures are determined to be a single
employer, the WARN Act would apply equally to Kohlberg Ventures.
C. The "Single Employer" Test
Magistrate Judge Hixon discusses each of the "single employer"
factors, reserving the "de facto control" discussion for last, and
turning finally to what the inquiry "ultimately depends on," that
is, whether the totality of circumstances demonstrate an
arms-length relationship between the companies.
He finds that (i) Kohlberg Ventures' minimal ownership interest in
ClearEdge and relatively small loan weigh against finding that
Kohlberg Ventures and ClearEdge were a "single employer"; (ii)
Kohlberg knew or recommended some of the other Board members, that
Kohlberg and Eastburn served on multiple Board committees, that
Eastburn served for a few months as interim COO -- none of these
facts may reasonably be interpreted to indicate the high degree of
integration that would tip the common directors and officers factor
in favor of a finding that the companies were a "single employer";
(iii) without even a scintilla of evidence contradicting the
presumption of actions taken in appropriate roles, Wojciechowski's
arguments are no more than pure argument; (iv) no inference has
thus been created that the Kohlberg Ventures' and ClearEdge's
operations bore any relationship whatsoever to each other, much
less a relationship of dependency; (v) Wojciechowski's central
argument for Kohlberg Ventures' de facto control of ClearEdge
fails, as he has failed to establish any genuine issue of material
fact; and (vi) Kohlberg Ventures is not subject to liability
alongside ClearEdge for failure to provide the statutorily required
notice.
Based on the analysis, Magistrate Judge Hixon grants Ventures'
Motion for Summary Judgment on Wojciechowski's WARN Act claim and
denies as moot Wojciechowski's Cross-Motion for Summary Judgment.
He orders the parties to meet and confer and file a proposed form
of judgment within 14 days. If they cannot agree on a proposed
form of judgment, then within 14 days they will file competing
proposed forms of judgment and a joint letter brief not to exceed
five pages setting forth their respective positions.
A full-text copy of the Court's April 9, 2021 Summary Judgment is
available at https://tinyurl.com/595m9syw from Leagle.com.
MDL 2968: Cooper vs. Generali Insurance Row Transferred to S.D.N.Y
------------------------------------------------------------------
In IN RE: GENERALI COVID-19 TRAVEL INSURANCE LITIGATION, MDL No.
2968, Judge Karen K. Caldwell, Chairperson of the U.S. Judicial
Panel on Multidistrict Litigation, has entered an order
transferring Cooper et al. v. Generali Global Assistance, Inc. et
al. to the U.S. District Court for the Southern District of New
York and, with the consent of that court, assigned them to Judge
John G. Koeltl for coordinated or consolidated pretrial
proceedings.
Said litigation involves common factual issues arising from
Generali travel insurance coverage that consumers purchased
alongside rental housing on vacation rental websites. Plaintiffs
contend that they were unable to travel during the COVID-19
pandemic and cancelled their trips. Generali allegedly has denied
coverage under the policies.
The panel determined that this action involves common questions of
fact with the actions previously transferred to MDL No. 2968, and
that transfer will serve the convenience of the parties and
witnesses and promote the just and efficient conduct of the
litigation and that the Southern District of New York was an
appropriate forum for actions arising from Generali travel
insurance coverage that consumers typically purchased alongside
rental housing on vacation rental websites. The Cooper case
therefore falls within the MDL's ambit.
A full-text copy of the Court's March 31, 2021 Transfer Order is
available at https://bit.ly/3tuD8LE
MDL 2969: Udesky v. Erie Transferred to W.D. Pa.
------------------------------------------------
In the case, IN RE: ERIE COVID-19 BUSINESS INTERRUPTION PROTECTION
INSURANCE LITIGATION, MDL No. 2969, Judge Karen K. Caldwell,
Chairperson of the U.S. Judicial Panel on Multidistrict Litigation,
has entered an order transferring Steven A. Udesky, OD and
Associates P.C. v. Erie Insurance Property & Casualty Company,
(N.D. Ill. C.A. No. 1:20-04994) to the U.S. District Court for the
Western District of Pennsylvania and, with the consent of that
court, assigned them to Judge Mark R. Hornak for coordinated or
consolidated pretrial proceedings.
Plaintiff Steven A. Udesky moved to vacate the panel's order that
conditionally transferred said case to the Western District of
Pennsylvania for inclusion in MDL No. 2969. Defendant Erie
Insurance Property & Casualty Company and plaintiffs in eight
actions pending in MDL No. 2969 oppose the motion. In support of
its motion to vacate, Plaintiff argues that the said case does not
share common questions of fact with the actions in the MDL but
rather alleges that it was insured under a commercial property
insurance policy issued by Erie and that Erie denied plaintiff
coverage for business interruption losses allegedly caused by loss
of business and governmental closure orders related to the COVID-19
pandemic. Plaintiff also argues that transfer will not enhance the
convenience of the parties or the efficiency of the litigation
because the witnesses in the said case, including the Erie claims
adjustor, are located in the Northern District of Illinois.
Said litigation involves insurance claims for coverage of business
interruption losses caused by the COVID-19 pandemic and the related
government orders suspending, or severely curtailing, operations of
non-essential businesses.
The Panel held that Erie Insurance is a regional carrier that
encompasses thirteen jurisdictions and the actions share common
factual allegations that Erie wrongfully denied policyholders'
claims for business interruption protection insurance. Thus, these
actions present common factual and legal questions that support
centralization and to promote the just and efficient conduct of the
actions. Erie argued that centralization is not appropriate because
the actions involve different claims and different types of
businesses but the panel decided that the presence of additional or
differing legal theories is not significant.
A full-text copy of the Court's April 1, 2021 Transfer Order is
available at https://bit.ly/32rqe5k
MDL 2972: Two Blackbaud Data Breach Cases Transferred to D.S.C.
---------------------------------------------------------------
In the case IN RE: BLACKBAUD, INC., CUSTOMER DATA SECURITY BREACH
LITIGATION, MDL No. 2972, Judge Karen K. Caldwell, Chairperson of
the U.S. Judicial Panel on Multidistrict Litigation, has entered an
order transferring two actions, one from the U.S. District Court
for the District of Minnesota, and one from the U.S. District Court
for the Western District of Washington, to the U.S. District Court
for District of South Carolina and, with the consent of that court,
assigned them to J. Michelle Childs for coordinated or consolidated
pretrial proceedings.
These actions involve a ransomware attack and data security breach
into Blackbaud's systems in early 2020 that allegedly compromised
the personal information of consumers doing business with entities
served by Blackbaud's cloud software and services. Plaintiffs in
the centralized actions allege that the Blackbaud clients impacted
by the data breach include numerous schools, universities,
healthcare providers and nonprofit organizations, and that the
consumers who provided their personal information to those entities
are at a risk of identity theft and fraud. Defendants Harvard and
Allina Health System allegedly are two Blackbaud clients affected
by the data breach.
Centralization will eliminate duplicative discovery, prevent
inconsistent pretrial rulings and conserve the resources of the
parties, their counsel and the judiciary, rules the Panel.
A full-text copy of the Court's March 30, 2021 Transfer Order is
available at https://bit.ly/3wZb59n
MDL 2974: Two Paragard IUD Liability Suits Transferred to N.D. Ga.
------------------------------------------------------------------
In the case IN RE: PARAGARD IUD PRODUCTS, LIABILITY LITIGATION, MDL
No. 2974, Judge Karen K. Caldwell, Chairperson of the U.S. Judicial
Panel on Multidistrict Litigation, has entered an order
transferring two actions, one from the U.S. District Court for the
Eastern District of New York, and one from the U.S. District Court
for the Northern District of West Virginia, to the U.S. District
Court for the Northern District of Georgia and, with the consent of
that court, assigned them to Judge Leigh Martin May for coordinated
or consolidated pretrial proceedings.
Defendants in the two actions moved to vacate the panel's order
that conditionally transferred these actions to the Northern
District of Georgia for inclusion in MDL No. 2974. Plaintiffs in
both actions oppose the motions.
These actions involve common allegations that the Paragard
intrauterine device (IUD) has a propensity to break upon removal,
causing complications and injuries, including surgeries to remove
the broken piece of the device, infertility and pain. The actions,
thus, implicate questions concerning the device's development,
manufacture, testing, labeling and marketing.
The Panel held that centralization will eliminate duplicative
discovery, prevent inconsistent pretrial rulings and conserve the
resources of the parties, their counsel and the judiciary.
A full-text copy of the Court's April 1, 2021 Transfer Order is
available at https://bit.ly/2Qv0gLo
MDL 2984: Five Folgers Mislabeling Suits Consolidated in W.D. Mo.
-----------------------------------------------------------------
In the case IN RE: FOLGERS COFFEE MARKETING AND SALES PRACTICES
LITIGATION, MDL No. 2984, Judge Karen K. Caldwell, Chairperson of
the U.S. Judicial Panel on Multidistrict Litigation, transfers five
cases, two in the U.S. District Court for the Central District of
California and one each in the U.S. District Court for the Southern
District of Florida, the U.S. District Court for the Northern
District of Illinois and the U.S. District Court for the Western
District of Missouri, to the latter mentioned court and with the
consent of that court, assigned it to Judge Beth Phillips for
coordinated or consolidated pretrial proceedings.
These putative class actions assert similar claims for
misrepresentation, breach of warranty, unjust enrichment, and/or
violation of state consumer protection laws, and the Plaintiffs
seek to represent overlapping nationwide and statewide classes of
purchasers of Folgers coffee products. Folgers is alleged of
mislabeling the number of servings that can be made from its coffee
canisters. Folgers Coffee is a brand of coffee of the food and
beverage division of the J.M. Smucker Company.
The panel concluded that the Western District of Missouri is an
appropriate forum as this is a geographically central district and
will provide a readily accessible and convenient forum for this
nationwide litigation and centralization will eliminate duplicative
discovery, prevent inconsistent pretrial rulings on class
certification and other issues, and conserve the resources of the
parties, their counsel and the judiciary. Plaintiffs in the Central
District of California and the Northern District of Illinois
initially moved to centralize this litigation in the Central
District of California. Defendants The Folger Coffee Company, The
J.M. Smucker Company and Walmart, Inc. do not oppose
centralization.
A full-text copy of the Court's April 1, 2021 Transfer Order is
available at https://bit.ly/3drYvI2
MDL 2985: Six Apple App Gambling Suits Transferred to N.D. Cal.
---------------------------------------------------------------
In the case IN RE: APPLE INC. APP STORE SIMULATED CASINO-STYLE
GAMES LITIGATION, MDL No. 2985, Judge Karen K. Caldwell,
Chairperson of the U.S. Judicial Panel on Multidistrict Litigation,
transfers six cases, one each in the U.S. District Court for the
Northern District of Alabama, the U.S. District Court for the
District of Connecticut, the U.S. District Court for the Northern
District of Georgia, the U.S. District Court for the Northern
District of New York, the U.S. District Court for the Southern
District of Ohio and the U.S. District Court for the Western
District of Tennessee, to the U.S. District Court for the Northern
District of California and with the consent of that court, assigned
it to Judge Edward J. Davila for coordinated or consolidated
pretrial proceedings.
These putative class actions present common factual questions
arising from the allegation that Apple, through its App Store,
promotes, facilitates, and profits from simulated casino-style
games that involve gambling in violation of state laws. Plaintiffs
in all actions allege that casino-style app games in the App Store,
such as slots, poker, blackjack, and bingo, allow users to purchase
virtual coins or coin-like objects to play for the chance to win
more playing time and that paying money for the chance to win more
playing time constitutes unlawful gambling. Common factual
questions include the nature of the game play within the same 200
or more involved apps and the function of in-app purchases, the
nature of Apple's relationship with the third-party app developers,
including Apple's process for reviewing and publishing apps,
Apple's financial arrangements for distributing app-based revenue
from the games and Apple's alleged promotion of the apps.
Apple Inc. moved to centralize this litigation in the Northern
District of California or, alternatively, the Central District of
California. The panel concluded that the Northern District of
California is the appropriate transferee district for this
litigation since Apple's headquarters is in this district and that
the employees with relevant knowledge and common documentary
evidence are located there.
A full-text copy of the Court's March 30, 2021 Transfer Order is
available at https://bit.ly/3dmQAf2
MDL 2987: Centralization of GM Battery Liability Suits Denied
-------------------------------------------------------------
In the case IN RE: GENERAL MOTORS LLC CHEVROLET BOLT EV BATTERY
PRODUCTS LIABILITY LITIGATION, MDL No. 2987, Judge Karen K.
Caldwell, Chairperson of the U.S. Judicial Panel on Multidistrict
Litigation, denied the proposed transfer of three actions in the
U.S. District Court for the Eastern District of Michigan and one
each from the U.S. District Court for the Central District of
California and the U.S. District Court for the Northern District of
Illinois. Plaintiff Andres Torres (Torres v. General Motors LLC,
C.A. No. 1:20-07109) moved to centralize this litigation in the
Eastern District of Michigan or, alternatively, the Northern
District of Illinois. All responding parties oppose centralization,
including all plaintiffs in the remaining constituent actions and
common defendant, General Motors LLC.
These putative class actions against Defendant General Motors LLC
share factual questions arising from GM's November 2020 recall of
model year 2017-2019 Chevrolet Bolt electric vehicles due to the
risk of fire posed by the car batteries when charged at or near
full capacity and its interim remedy, which plaintiffs allege
results in a loss of battery mileage in affected vehicles.
The panel contends that centralization is not necessary at this
time for the convenience of the parties and witnesses or to further
the just and efficient conduct of the litigation stating that it
may significantly reduce or even eliminate the multidistrict
character of this litigation.
A full-text copy of the Court's April 1, 2021 order is available at
https://bit.ly/3gdBXMU
MDL 2989: Various Short Squeeze Suits Transferred to S.D. Fla.
--------------------------------------------------------------
In the case, IN RE: JANUARY 2021 SHORT SQUEEZE TRADING LITIGATION,
MDL No. 2989, Judge Karen K. Caldwell, Chairperson of the U.S.
Judicial Panel on Multidistrict Litigation, transfers 10 cases in
the U.S. District Courts for the Northern District of California,
five cases in the U.S. District Courts for the Northern District of
Illinois, four cases each in the U.S. District Courts for the
Middle and Southern Districts of Florida, three in the U.S.
District Courts for the District of New Jersey, two cases each in
the U.S. District Courts for the Southern District of New York,
Southern District of Texas, Central District of California and the
District of Connecticut, one case each in the U.S. District Courts
for the Southern District of California, District of Colorado,
Northern District of Florida, Eastern District of Pennsylvania and
the Eastern District of Virginia, all to the U.S. District Court
for Southern District of Florida and with the consent of that
court, assigned it to Judge Cecilia M. Altonaga for coordinated or
consolidated pretrial proceedings.
Robinhood provides a service allowing its customers to effectuate
trades in the stock market, targeted at retail customers. Its
platform is primarily app-based aims to provide everyone with
access to the financial markets.
Beginning in January of 2021, the stock prices for GameStop Corp.
began to rise, based upon increased investor interest caused by the
excessive short positions in the company. This event received
significant coverage in the press. As investors began to look for
the next GameStop, investor interest in certain stocks began to
rise, causing their stock prices to increase. Until January 28,
2021, Robinhood allowed its users to take positions in these
securities, both buying and selling. Upon information and belief,
many Robinhood customers purchased these stocks in reliance on the
continued availability of the Robinhood platform, allowing the
customers to buy and sell when most advantageous to do so. However,
on January 28, 2021, after the rise in GME gained widespread media
coverage, Robinhood barred its customers from buying these stocks.
Robinhood has announced it will allow limited transactions of these
securities starting on January 29, 2021. This action artificially
deflated the price of the effected stocks, harming all investors
who held the stock, to the benefit of those holding short
positions. Robinhood's interference in free trade left customers
and retail investors with only two choices, either sell immediately
at the rapidly falling price or hold and risk losing their entire
investment. Plaintiffs used the Robinhood app to trade securities.
The panel held that the Southern District of Florida is an
appropriate transferee district for this litigation. There are ten
actions pending in Florida, four of which are in the Southern
District. With some of the events central to this litigation, in
particular, Robinhood Securities' decision to restrict trading on
the meme stocks, taking place in Florida, thus making the Southern
District of Florida a relatively convenient and accessible forum,
with the resources and the capacity to efficiently handle what may
be a large and complex litigation.
A full-text copy of the Court's April 1, 2021 Transfer Order is
available at https://bit.ly/32bNP9Z
ONIN STAFFING: Miles Files Suit Over Illegal Background Check
-------------------------------------------------------------
Bobby Lee Miles, Jr., on behalf of himself and on behalf of all
others similarly situated v. ONIN STAFFING, LLC, a Foreign Limited
Liability Company, Case 3:21-cv-00275 (M.D. Tenn. April 5, 2021)
seeks statutory damages, costs and attorneys' fees, and other
appropriate relief under the the Fair Credit Reporting Act.
The Defendant is a large, multi-state staffing agency offering
industrial and clerical staffing. The Defendant routinely obtains
and uses information in consumer reports to conduct background
checks on applicants and employees.
In July 2020, Plaintiff applied for employment with Defendant.
Plaintiff was offered employment, accepted the job and was assigned
to a Dorman warehouse facility. In October 2020, Plaintiff was
informed that he was not eligible for continued assignment or
employment at Dorman because he had failed a background check.
The complaint alleges that the Defendant violated 15 U.S.C. Section
1681b(b)(3) by denying employment opportunities to Plaintiff based
in part or in whole on the results of Plaintiff's consumer report
without first providing him notice, a copy of the report, and a
summary of his rights. [BN]
The Plaintiff is represented by:
Brian C. Winfrey, Esq.
MORGAN & MORGAN, P.A.
810 Broadway, Suite 105
Nashville, TN 37203
Telephone: 615-928-9890
Fax: 615-928-9917
E-mail: BWinfrey@forthepeople.com
- and -
Marc R. Edelman, Esq.
MORGAN & MORGAN, P.A.
201 N. Franklin Street, Suite 700
Tampa, FL 33602
Telephone: 813-223-5505
Fax: 813-257-0572
E-mail: MEdelman@forthepeople.com
PARTNER COMMS: Suit Applicants Seek Withdrawal from Ct. Proceedings
-------------------------------------------------------------------
Partner Communications Company Ltd. said in its Form 20-F report
filed with the U.S. Securities and Exchange Commission on March 25,
2021, for the fiscal year ended December 31, 2020, that the
applicants in the putative class action suit related to content
services for third parties notified that they wish to withdraw from
the proceedings and the Court has yet to rule on the matter.
On November 17, 2019, a claim and a motion to certify the claim as
a class action were filed against the Company and two additional
cellular operators.
The claim alleges that the Company, as well as the other
respondents collected money from its customers for content services
for third parties, by using the means of payment that were given to
the Company for the purpose of the cellular invoice payment for
content services, without receiving consent from these customers
prior to the charge, and/or without having documentation with
respect to the customers' consent, unlawfully and against its
license provisions and/or without the Company first ensuring that
the customers received a document that complies with the Consumer
Protection Law regarding the specific transaction for which it
intends to collect money from them.
The total amount claimed from each of the respondents if the
lawsuit is recognized as a class action is NIS 400 million in
addition to compensation in the amount of NIS 500 for each one of
the group members for non-monetary damages which were allegedly
caused to them. The group on whose behalf the claim was filed is
all Partner subscribers who made such payments from September 2003
until the date that Partner is found to have stopped charging
customers for such content services (from this group a group of
customers charged for certain content services were excluded in
light of other court decisions).
In December 2020, the applicants notified that they wish to
withdraw from the proceedings and the Court has yet to rule on the
matter.
Partner Communications Company Ltd. is a leading Israeli provider
of telecommunications services (cellular, fixed-line telephony,
internet and television services). Partner's ADSs are quoted on the
NASDAQ Global Select Market(TM) and its shares are traded on the
Tel Aviv Stock Exchange.
PARTNER COMMS: Suit Over Unlawful Charges and Rates Underway
------------------------------------------------------------
Partner Communications Company Ltd. said in its Form 20-F report
filed with the U.S. Securities and Exchange Commission on March 25,
2021, for the fiscal year ended December 31, 2020, that the company
and 012 Smile continues to defend a suit related to allege unlawful
charges and higher rates for international calls that are not
included in their tariff plans.
On August 6, 2018, a claim and a motion to certify the claim as a
class action were filed against the Company and 012 Smile and at a
later date, following a revision to the motion, also against
Partner Land-Line.
The claim alleges that the respondents unlawfully charge its
customers different and higher rates for international calls that
are not included in their tariff plans, than those set forth in its
customer tariff chart on the 012 Smile website.
The applicants noted that it cannot estimate the total amount
claimed in the lawsuit, should the lawsuit be certified as a class
action.
The claim is still in its preliminary stage of the motion to be
certified as a class action.
No further updates were provided in the Company's SEC report.
Partner Communications Company Ltd. is a leading Israeli provider
of telecommunications services (cellular, fixed-line telephony,
internet and television services). Partner's ADSs are quoted on the
NASDAQ Global Select Market(TM) and its shares are traded on the
Tel Aviv Stock Exchange.
PREFERRED PRECISION: Morgan Sues Over Illegally Obtained Report
---------------------------------------------------------------
DRAKE MORGAN, on behalf of himself and on behalf of all others
similarly situated v. PREFERRED PRECISION GROUP, LLC and DAY STAR
STAFFING LLC, Case No. 1:21-cv-00484-ACA (N.D. Ala., April 5, 2021)
asserts violations of the Fair Credit Reporting Act, and seeks to
hold PPG and Day Star accountable for violating Plaintiff's
federally protected privacy rights.
Day Star is a staffing agency. PPG is a manufacturing company.
In November 2020, Mr. Drake applied for employment with PPG in Pell
City, Alabama. He received a purported FCRA disclosure titled "Day
Star Staffing Solutions Authorization." The Plaintiff said he did
not understand he was authorizing Day Star to obtain his consumer
report for employment purposes because the Day Star Authorization
did not clearly and conspicuously disclose this fact.
The same day he applied, Mr. Drake was extended an offer of
employment. He reported for employment at PPG the next day, worked
a full shift, and was praised for his performance. However, the
next day, he received a phone call from PPG informing him his
employment was terminated due to his background check.
Mr. Drake asserts that he was denied employment opportunities based
in part or in whole on the results of his consumer report without
first providing him notice, a copy of the report, and a summary of
his rights.
The Plaintiff said he would not have permitted Day Star to obtain
his consumer report if he knew it was being obtained illegally and
would be used to deny him employment.[BN]
The Plaintiff is represented by:
Erby J. Fischer, Esq.
MORGAN & MORGAN
BIRMINGHAM, PLLC
2317 3rd Avenue North
Birmingham, AL 35203
Telephone: (659) 204-6364
Fax: (659) 204-6389
E-mail: efischer@forthepeople.com
- and -
Marc R. Edelman, Esq.
MORGAN & MORGAN, P.A.
201 N. Franklin Street, Suite 700
Tampa, FL 33602
Telephone: 813-223-5505
Fax: 813-257-0572
E-mail: MEdelman@forthepeople.com
SHAWS SUPERMARKETS: Bid to Dismiss First Amended Constantino Denied
-------------------------------------------------------------------
In the case, PETER CONSTANTINO, Plaintiff v. SHAWS SUPERMARKETS
INC., Defendant, Case No. 2:20-cv-00387-LEW (D. Me.), Judge Lance
E. Walker of the U.S. District Court for the District of Maine
denied the Defendant's Motion to Dismiss Plaintiff's First Amended
Complaint.
Plaintiff Constantino contends Shaw's makes its drivers perform
work without receiving pay, in violation of Maine wage law. He
seeks to pursue his claim as a class action. Shaw's removed the
action to the Court, citing diversity and "complete preemption" in
support of subject matter jurisdiction.
In the case, the relevant document is an agreement entitled
Collective Bargaining Agreement Between Teamsters Local Union No.
340 Affiliated with the International Brotherhood of Teamsters and
Clifford W. Perham, Inc., a Subsidiary of Shaw's Supermarkets Inc.
("CBA"). Under the CBA, drivers typically receive pay based on
mileage. When performing their work, drivers often engage in
related activities like pre- and post-trip inspections, inventory
and delivery tasks like checking pallet tags, and arranging and
securing their loads. The mileage rate is either meant to provide
compensation for these non-driving related activities or it is not.
According to the arbitrator, it is. Driver downtime associated
with "store unloading hours" is paid hourly. Additionally, when a
driver completes fewer than 315 miles in a workday, the driver is
compensated on an hourly basis, unless the sum of the per mile rate
and the per hour rate for store unloading hours is greater.
Mr. Constantino alleges drivers do not "earn any money whatsoever"
for the related activities. He illustrates the logic of his claim
with the example of two drivers who drive the same distance and
receive the same pay yet work different hours. Constantino claims
that the worker who spends more time on nondriving, related tasks
spends that additional time working "without monetary
compensation."
Mr. Constantino and other drivers grieved the issue in 2018. The
grievance was unsuccessful.
Now, through the action filed in state court in September 2020,
Constantino claims the wage provisions of the CBA are "an unfair
agreement" that requires drivers to work without compensation, in
violation of 26 M.R.S. Section 629; that Shaw's failed to provide
full payment for all work in a timely fashion, in violation of 26
M.R.S. SectionSection 621-A; and that the liquidated damage
multiplier and other penalties of 26 M.R.S. Section 626-A should
enhance any recovery. Of note, Constantino's allegations
concerning 26 M.R.S. Sections 621-A and 626-A are derivative of his
Section 629 claim. In other words, absent a showing of entitlement
to relief under the "unfair agreement" prohibition, Constantino
cannot show a separate violation of the Section 621-A timing rule
or grounds to access the additional remedies found in Section
626-A.
The matter is before the Court on the Defendant's Motion to Dismiss
Plaintiff's FAC. It argues the Plaintiff's state-law wage claim
challenges the fairness of the Collective Bargaining Agreement and
is, therefore, preempted by the Labor Management Relations Act, and
that the claim is barred, in any event, by a prior final
arbitration award addressed to the very issue the Plaintiff
advances. Finally, the Defendant argues the state law claim is
preempted by the Federal Aviation Administration Authorization
Act.
One question presented in the case is whether Shaw's mileage-based
compensation scheme, a product of collective bargaining, if
understood by the bargaining parties to afford fair compensation
for driving-related but not actual driving time, would influence
the merits of the state law dispute. This statement of the issue
is like the statement offered by Constantino (i.e., that the only
issue is "whether the employment scheme is legal under 26 M.R.S.
Section 629, Response at 13), but it focuses on a potentially
material issue of fact. Ordinarily, but for the CBA/arbitration
overlay, a court of law would treat this as a genuine issue of fact
before then moving on to evaluate the legality of the agreement.
However, given the CBA/arbitration overlay, what ordinarily would
have been a process of interpretation has become a process of
consultation. Judge Walker arrives at that conclusion through a
somewhat circuitous path.
A. LMRA Complete Preemption
In Rueli v. Baystate Health, Inc., the First Circuit created a
framework in which hourly workers should be able to evade complete
preemption under the Labor Management Relations Act, 29 U.S.C.
Section 185(a), if they are "able to vindicate their claims with
proof of the employer's actual knowledge of their unpaid hours,"
which, at the pleading stage, would simply require that plaintiffs
allege a factual basis "for actual knowledge of all of the unpaid
hours worked." Rueli v. Baystate Health, Inc., 835 F.3d 53, 62 (1st
Cir. 2016). But because the Rueli plaintiffs did not allege a
basis for the employer's actual knowledge of the entire range of
allegedly uncompensated work hours, the First Circuit decided it
would be necessary to look to the CBA to understand whether the
employer would have had reason to anticipate that work was being
performed without pay given certain "permission and management
rights provisions" in the CBA that informed that very inquiry.
Mr. Constantino cites this line-drawing and propounds that his
state law wage claim must evade preemption under the Rueli rule
because he has alleged (and it is beyond dispute) that Shaw's knows
he does certain work other than driving, not all of which is
compensated on an hourly basis.
Judge Walker not convinced that Rueli directs the outcome in the
case. The Rueli Court considered a claim for unpaid hours in the
context of an hourly-rate compensation plan. The Circuit Court was
at pains to explain why an hourly worker complaining of unpaid
hours of work should be barred access to remedies other than CBA
remedies. Judge Walker, on the other hand, considers a claim that
arises out of the mileage-based component of a larger compensation
plan, a scenario that asks not whether the employer knew the extent
of the work employees engaged in, but whether the parties to the
CBA all understood that the mileage-based compensation scheme would
provide fair and adequate compensation for certain non-driving
tasks. In short, Rueli is not on point.
B. Arbitral Award as Final and Binding
The next question is whether the parties to the CBA agreed to
address even this state law wage dispute in final, binding
arbitration. Shaw's argues Constantino's access to a judicial
forum is foreclosed because his claim has already been resolved in
arbitration. The argument is based, in part, on the notion that
Constantino's claim is not really a state law claim at all, but
instead arises under Section 301 of the LMRA.
Judge Walker holds that that is not the claim Constantino asserts
and the argument is, consequently, beside the point. Although the
arbitrator purported to resolve the state law controversy in her
arbitration award, Article 4 did not empower the arbitrator to
provide any relief under state law if such relief would be
inconsistent with the CBA. Merits preemption is not available to
Shaw's under Article 4 precisely because merits relief was not
available to Constantino in the arbitral forum. Because subsection
(j) of Article 4 did not empower the arbitrator to accept a legal
theory at odds with the terms of the CBA, it does not bar this
later proceeding concerning rights purportedly in conflict with the
CBA.
C. FAAAA Preemption (Federal Aviation Administration Authorization
Act of 1994)
Like a child intent on cleaning her plate, Shaw's left the best
morsel for last. Shaw's argues the state law claim is preempted by
the Federal Aviation Administration Authorization Act of 1994.
Judge Walker finds that Constantino's legal theory that 26 M.R.S.
Section 629 has something to say about the way drivers are
compensated relates to transportation and would likely impact the
price, route, or service of a motor carrier, though the
significance of the impacts is less clear. It does not matter that
Section 629, in the abstract, would not ordinarily be preempted
given the breadth of its application to all manner of employers in
general. What matters is that Constantino is attempting to take a
very broad and general statute and graft onto it a very
transportation-specific prohibition.
Shaw's states in its Motion that Constantino has failed to state a
claim. However, none of the headings in its Motion present the
basic underlying question whether Constantino has asserted a
plausible basis for relief under Maine law, Judge Walker finds. He
says that is a concern in the case. The statute in question
prohibits "unfair agreements." One kind of unfair agreement -- the
one Constantino relies on pp is an agreement that requires an
employee to work "without monetary compensation."
Mr. Constantino bases the class action entirely on those gossamer
statutory strands. Section 629 says naught about driver or
mileage-based compensation. Agreements that produce day-to-day pay
inequities among employees are neither addressed nor prohibited in
this statute. As far as Judge Walker can tell, the Maine
Legislature has not prohibited the law of averages for employee
compensation calculated by means other than a fixed hourly rate.
If it had, then one would think mileage-based compensation would be
strictly forbidden, even if there were no non-driving tasks,
because it would be a rare occasion in which two drivers would ever
drive the same distance in the same time. In any event, the matter
survives the instant motion.
Conclusion
In light of the foregoing, Judge Walker dismissed as moot the
Defendant's Original Motion to Dismiss. He denied the Defendant's
Motion to Dismiss First Amended Complaint. Given the need to
resolve the FAAAA preemption issue, the parties are ordered to meet
and confer so that they can present the Magistrate Judge with a
suitable request to modify the schedule along those lines.
A full-text copy of the Court's April 9, 2021 Order is available at
https://tinyurl.com/mdcw9fmw from Leagle.com.
TOPA INSURANCE: Caribe Class Suit Dismissed Without Leave to Amend
------------------------------------------------------------------
In the case, CARIBE RESTAURANT & NIGHTCLUB, INC., individually and
on behalf of all others similarly situated, Plaintiff v. TOPA
INSURANCE COMPANY, Defendant, Case No. 2:20-cv-03570-ODW (MRWx)
(C.D. Cal.), Judge Otis D. Wright, II, of the U.S. District Court
for the Central District of California granted Topa's Motion to
Dismiss Caribe's First Amended Complaint without leave to amend.
Plaintiff Caribe initiated the class action against Defendant Topa
alleging breach of contract and seeking declaratory judgment for
insurance coverage. Caribe owns and operates La Luz Ultralounge, a
restaurant and nightclub located in Bonita, California. Caribe
purchased an insurance policy from Topa for the policy period of
May 18, 2019, through May 18, 2020.
In March 2020, due to the COVID-19 pandemic, the State of
California and County of San Diego ordered "the closure of bars"
and "banned onsite dining." In May 2020, San Diego County
"permitted the resumption of onsite dining" subject to
restrictions. Caribe alleges that, as a result of these civil
authority orders, it was forced to "suspend or reduce business" at
La Luz. Caribe also alleges that COVID-19 "impaired Caribe's
property by making it unusable in the way that it had been used
before."
Caribe alleges that its losses are covered under the Policy and
identifies four specific provisions: "Business Income"; "Extra
Expense"; "Civil Authority"; and "Duties in the Event of Loss"
("Sue and Labor" provision). Caribe filed claims for coverage
under these provisions, which Topa denied. Accordingly, Caribe
commenced the litigation against Topa asserting that denial of
coverage was a breach of contract and seeking declaratory judgment.
Topa's motion to dismiss followed.
Topa argues the Policy provisions Caribe cites provide coverage
only for "direct physical loss of or damage to" Caribe's property
and Caribe cannot recover under any of these provisions because it
fails to allege "any 'direct physical loss' of or damage to" the
insured premises. Caribe, on the other hand, insists that it has
sustained "direct physical loss" of its property because it was
"forced to suspend or reduce business at its location due to
COVID-19" and the resultant safety orders.
Judge Wright agrees with Topa. He says while he is sympathetic
that Caribe is suffering economically from the unprecedented
COVID-19 pandemic, an economic business impairment does not qualify
as a physical loss or damage to the premises. As Caribe does not
allege direct physical loss or damage, its claims were not covered
and its causes of action for breach of contract and declaratory
judgment fail. Thus, the Judge granted Topa's Motion to Dismiss.
Additionally, ge finds that leave to amend would be futile because
allegations of other facts consistent with the FAC could not cure
these deficiencies. As such, dismissal is without leave to amend.
A full-text copy of the Court's April 9, 2021 Order is available at
https://tinyurl.com/3xs8d3ud from Leagle.com.
TOYOTA MOTOR: Court Narrows Claims in Rav4 Hybrid Fuel Tank Suit
----------------------------------------------------------------
In the case, IN RE TOYOTA RAV4 HYBRID FUEL TANK LITIGATION, Case
No. 20-cv-00337-EMC (N.D. Cal.), Judge Edward M. Chen of the U.S.
District Court for the Northern District of California granted in
part and denied in part Toyota's motion to dismiss the Plaintiffs'
consolidated class action complaint.
The putative consumer class action is brought by 36 Plaintiffs from
28 states on behalf of a nationwide class of "all persons who
purchased or leased" 2019 and 2020 Toyota RAV4 Hybrid vehicles, as
well as 28 subclasses based on the state in which the Vehicles were
purchased or leased.
The Plaintiffs allege that Defendant Toyota Motor Sales, U.S.A.,
Inc. ("TMS") falsely represented in marketing and ownership
materials that the Vehicles' fuel tank capacity is 14.5 gallons
when it is actually 8-11 gallons, thus significantly reducing the
Vehicles' range on a single tank of gas.
The Plaintiffs bring 90 state-law claims against Toyota for breach
of express warranty, breach of the implied warranty of
merchantability, violations of various consumer protection and
unfair competition statutes, and unjust enrichment. They seek
damages as well as injunctive and declaratory relief.
The Plaintiffs originally filed a class action complaint on Jan.
15, 2020. Over the following months, several cases from elsewhere
in the District were related to, and eventually consolidated with,
the instant case. Pursuant to these developments, the Plaintiffs
filed their 198-page consolidated class action complaint on Sept.
14, 2020.
Pending before the Court is Toyota's motion to dismiss the
Plaintiffs' consolidated class action complaint, filed on Oct. 14,
2020.
Toyota's motion to dismiss is divided into seven main parts.
Toyota first argues that the Plaintiffs lack standing "because they
do not plausibly allege an actual, non-speculative injury" from the
purported fuel-tank defect, such as an imminent "safety hazard,"
"out-of-pocket costs for repairs," or "diminution in value" on
resale. Second, the Plaintiffs cannot plead breach of express
warranty as "TMS' express warranty in question does not cover
design defects" but only manufacturing defects. Third, the
Plaintiffs' claims for breach of the implied warranty of
merchantability are also inadequate because "they make no plausible
allegations that the vehicles are unfit for their ordinary
purpose." Fourth, the Plaintiffs fail to state consumer-protection
or unfair-competition claims because, inter alia, (a) the claims
are preempted by federal law, (b) Plaintiffs fail to allege
reliance on Toyota's marketing materials, and (c) various
state-specific requirements have not been met. Fifth, the
Plaintiffs' unjust enrichment claim fails because they erroneously
seek to apply California law to the entire class and, in any event,
California doesn't recognize a standalone claim for unjust
enrichment. Sixth, the Plaintiffs lack standing to seek injunctive
and declaratory relief since none of them "alleges that s/he is
likely to purchase another Subject Vehicle." And seventh, the
Plaintiffs cannot represent a nationwide class since "they have no
standing to represent consumers in states where Plaintiffs do not
reside and did not purchase a Subject Vehicle."
The Court previously ruled on a number of these issues at the
motion hearing of Dec. 18, 2020; it now reiterates those
conclusions and resolves the issues it declined to decide at the
hearing.
Judge Chen finds that (i) the Plaintiffs plausibly allege that
their vehicles suffer from an existing, provable defect of
substantially diminished fuel-tank capacity, and that this defect
is significant enough to make the vehicles worth less than they
would be without the defect; (ii) the complaint alleges a design,
rather than a manufacturing, defect and that Plaintiffs' express
warranty claims are therefore not covered by the New Vehicle
Limited Warranty ("NVLW"); (iii) the Plaintiffs' express warranty
claims are not precluded on the ground that the complaint
incidentally refers to MPG estimates in describing the fuel tank
defect; (iv) the Plaintiffs have plausibly pled that Toyota had
actual knowledge of the fuel tank defect by early 2019; and (v) the
Plaintiffs have failed to state an implied warranty claim.
Judge Chen also finds that (i) the Plaintiffs' argument that that
their "claims for relief are predicated on TMS' misrepresentations
and omissions regarding the RAV4's 14.5 gallon fuel tank capacity,"
not the EPA's miles-per-gallon estimate, provides a sufficient
basis for resolving the issue; (ii) while the complaint adequately
alleges that Toyota's misleading advertisements exist (and Toyota
acknowledged that the company lists the Vehicles' fuel tank
capacity as 14.5 gallons in sales brochures and perhaps "in some
advertisements," the complaint fails to establish that the
Plaintiffs saw, heard, or acted on them; (iii) the Plaintiffs have
adequately alleged Toyota's exclusive knowledge of the defect at
the time of sale as part of their omission-based consumer
protection claims; and (iv) the Plaintiffs' omission-based consumer
protection claims are barred insofar as they require a showing of
active concealment.
As to consumer protection claims, among other things, Judge Chen
holds that (i) given that the Court credits the Plaintiffs'
allegation that Toyota had presale knowledge of the fuel tank
defect, it is plausible that the company's subsequent partial
misrepresentations about fuel tank capacity entailed the
"suppression" of material information that the tank could not fill
to capacity; (ii) the Plaintiffs have plausibly pled knowledge and
intent on Toyota's part such that their claims are not precluded on
the basis of the Virginia Act's intent requirement; and (iii) the
Plaintiffs' allegations that they have suffered damages is
plausible for purposes of the motion to dismiss; (iv) Toyota fails
to respond to these arguments in its reply brief, suggesting that
it has abandoned the motion as to this aspect of the Florida Act;
(v) he rejects Toyota's argument that the Idaho Act requires
immediate privity between the Plaintiff and the Defendant; (vi)
Toyota has failed to demonstrate that its conduct is exempt from
the Michigan Consumer Protect Act; (vii) he agrees with Toyota
insofar as the complaint fails to allege, with adequate
specificity, that the Plaintiffs were aware of, and relied on,
Toyota's alleged misrepresentations about fuel tank capacity in the
company's marketing materials; (viii) the Plaintiffs are incorrect
in arguing that Mr. McPhie "alleges that he and members of the New
Hampshire class received misrepresentations regarding the RAV4s in
New Hampshire"; and (ix) the economic loss doctrine does not
preclude Pennsylvania Plaintiffs' Unfair Trade Practices and
Consumer Protection Law claims.
Finally, as to unjust enrichment claim, injunctive and declaratory
relief, and nationwide class claims, Judge Chen holds that (i) the
California's interest in applying its law to residents of foreign
states is attenuated" and that "each class member's unjust
enrichment claim should be governed by the unjust enrichment laws
of the jurisdiction in which the transaction took place; (ii)
because the Plaintiffs fail to allege that they either plan or are
likely to purchase another Vehicle, they do not presently have
Article III standing to pursue injunctive or declaratory relief as
sought in the complaint; and (iii) he defers ruling on the
Plaintiffs' nationwide class allegations until a later stage of the
proceedings.
Based on the foregoing, Judge Chen granted in part and denied in
part Toyota's motion to dismiss the Plaintiffs' consolidated class
action complaint. He (i) denied as to the Plaintiffs' standing to
assert claims for damages; (ii) granted as to the Plaintiffs'
express warranty claims under the NVLW (without leave to amend);
(iii) granted as to the Plaintiffs' express warranty claims under
Toyota's marketing materials and Vehicle owner's manuals (with
leave to amend); (iv) granted as to the Plaintiffs' implied
warranty of merchantability claims (without leave to amend); (v)
granted as to the Plaintiffs' affirmative misrepresentation claims
under certain state consumer protection laws (with leave to amend);
(vi) denied as to the Plaintiffs' fraudulent omission claims under
certain state consumer protection statutes; (vii) granted in part
and denied in part as to the Plaintiffs' consumer protection claims
on various state-specific grounds; (vii) denied as to California
the Plaintiffs' unjust enrichment claim; (viii) granted as to
non-California Plaintiffs' unjust enrichment claims (without leave
to amend); (ix) granted as to the Plaintiffs' standing to assert
claims for injunctive and declaratory relief (without leave to
amend); and (x) denied as to the Plaintiffs' nationwide class
allegations.
The Plaintiffs will file their amended complaint within 30 days
from the date of Judge Chen's Order. His Order disposes of Docket
No. 66.
A full-text copy of the Court's April 9, 2021 Order is available at
https://tinyurl.com/3hf345da from Leagle.com.
*********
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
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Toledo, Christopher G. Patalinghug, and Peter A. Chapman, Editors.
Copyright 2021. All rights reserved. ISSN 1525-2272.
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