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C L A S S A C T I O N R E P O R T E R
Wednesday, April 6, 2022, Vol. 24, No. 63
Headlines
3WISHES.COM: Jaquez Files ADA Suit in S.D. New York
ACTIVATE FINANCIAL: Eady Files FDCPA Suit in E.D. Michigan
AFTRA RETIREMENT: Bid to Dismiss Gilbert Suit Denied W/o Prejudice
AMERICAN AIRLINES: Court Nixes Remaining BIPA Claims in Kislov Suit
AMERICAN HERITAGE: Williams Files ADA Suit in S.D. New York
AMERIPARK LLC: Pool's $1.75MM Class Settlement Wins Final Approval
AMICA MUTUAL INSURANCE: Merullo Suit Removed to D. Massachusetts
ANAONO LLC: Jaquez Files ADA Suit in S.D. New York
ANGEL DEAR: Sanchez Files ADA Suit in S.D. New York
APPLE INC: Class Certification Briefing Extended in Tabak Lawsuit
ARCH SPECIALTY: Second Circuit Affirms Dismissal of ASG & C Suit
AREA STARS: Jackson Files ADA Suit in S.D. New York
BAMIA 2 LLC: Valenzuela Files Suit in Cal. Super. Ct.
BANDCAMP LLC: Slade Files ADA Suit in S.D. New York
BEACH TRADING: Williams Files ADA Suit in S.D. New York
BELLA NOTTE LINENS: Slade Files ADA Suit in S.D. New York
BIG TREE HOSPITALITY: Jackson Files ADA Suit in S.D. New York
BIMBO BAKERIES: S.D. Illinois Narrows Claims in Elder Consumer Suit
BNSF RAILWAY: Illinois Court Certifies Class in Rogers BIPA Suit
BROWN UNIVERSITY: Court Grants Summary Judgment Bid in Choi Suit
CALIFORNIA PET: Has Made Unsolicited Calls, Flores Suit Alleges
CHANCELLOR SENIOR: Denial of Arbitration in McGraw Suit Affirmed
CHOWNOW INC: Martinez Files ADA Suit in E.D. New York
CLEARVIEW AI: Macy's' Bid to Certify Interlocutory Appeal Denied
COMMUNICATIONS TEST: Cortes Suit Moved to San Bernardino Super. Ct.
CONSOLIDATED SERVICES: Fails to Pay Proper Wages, Don Suit Says
DALE PHARMACY: New York Court Denies Bid to Dismiss Katz Suit
DREYER'S GRAND: S.D. Illinois Dismisses Zurliene Consumer Suit
FACEBOOK INC: Ninth Cir. Affirms $97.5MM Counsel Fee in BIPA Suit
FLUENT HOME: Loses Bid to Compel Arbitration and Stay Stover Suit
FORD MOTOR: Court Grants Bid to Compel Arbitration in Lyman Suit
HARTFORD CASUALTY: Rodzik Suit Dismissed for Failure to State Claim
HARTFORD FIRE: 2nd Cir. Affirms Dismissal of SA Hospitality Suit
HEM DESIGN: Bunting Files ADA Suit in E.D. New York
HILTON HOTELS: White's 2nd Renewed Bid to Certify Class Denied
IDAHO: Order Terminating Prospective Relief in Balla v. ISCI Upheld
IL CASTELLO: Fails to Pay Proper Wages, Breznick-Ames Suit Alleges
ILLINOIS: Adams' Class Action Request in Complaint v. IDOC Denied
JMI REPORTS: Snow Wins Conditional Class Certification Bid
KANSAS CITY LIFE: Fine Files Suit in C.D. California
KROGER COMPANY: Davis Sues Over Mislabeled Cold & Flu Medicines
LEPRINO FOODS: Class of Hourly Workers Certified in Howell Suit
LULAS GARDEN: Jackson Files ADA Suit in S.D. New York
MARS PETCARE: Court Narrows Warranty Claims in Bakopoulos Suit
MEDICAL REVIEW INSTITUTE: Dean Files Suit in D. Utah
MHC OPERATING: Coquina Assoc. Suit Moved to Florida Circuit Court
MICHIGAN: Court Denies Bids to Certify Class in Bell v. Washington
MYCRO LLC: Tatum-Rios Files ADA Suit in S.D. New York
NATIONAL UNION: Supreme Court Affirms Judgment in First Solar Suit
NEW JERSEY: Court Consolidates Suits J.A. 2 and J.A. 3 v. NJDOE
NORTH CENTRAL: Fails to Pay Proper Wages, Bazick Suit Alleges
PABLE DESIGNS: Calcano Files ADA Suit in S.D. New York
PAPERLESSPAY CORP: Bid to Dismiss Allgood Class Suit Partly Granted
PAYCHEX NORTH: Court Allows Kassis to File 2nd Amended Complaint
PROGRESSIVE DIRECT: Ninth Cir. Affirms Judgment in Kleinsasser Suit
PROGRESSIVE DIRECT: Stedman Can Partly Compel Replies to Discovery
QUANEX HOMESHIELD: Barajas Files Suit in Cal. Super. Ct.
QUICKEN LOANS: Court Grants in Part Bid to Dismiss Viscuso Suit
RESCARE WORKFORCE: Mills Loses Bid to Remand Suit to Super. Court
RIVERSIDE COUNTY, CA: Counsel Fees, Costs Award in A.A. Suit Upheld
ROADRUNNER TRANSPORTATION: 9th Cir. Flips Remand of Jauregui Suit
RVSHARE LLC: Court Grants Bid to Compel Arbitration in Scott Suit
SAN FRANCISCO, CA: Class Cert Briefing Schedule Entered in Pierce
SCRIBE OPCO: Loses Bid to Toss Jones Suit Over WARN Act Violation
SHEN BEAUTY: Bunting Files ADA Suit in E.D. New York
SMART MORTGAGE: Court Refuses to Dismiss FLSA Claims in Noe Suit
SOCLEAN INC: Arnouville Suit Transferred to W.D. Pennsylvania
SOCLEAN INC: Morris Suit Transferred to W.D. Pennsylvania
STAMPS.COM INC: Court Issues Final Judgment in Karinski Class Suit
STELLAR MANAGEMENT: $1.23MM in Counsel Fees Awarded in Chavez Suit
STERLING BAY: Court Grants Bid to Refer Goddess Class Suit to NLRB
SUMMIT FOOD: Sager Files Suit in Cal. Super. Ct.
UNITED BEHAVIORAL: 9th Circuit Reverses Judgment in Wit ERISA Suit
UNITED COLLECTION: Eady Files FDCPA Suit in E.D. Michigan
UNITED STATES: Federation Allowed to Intervene in Miller v. USDA
VINELAND, NJ: Court Grants in Part Bid to Dismiss M.D. v. VPS
VIRGINIA: Class Cert. Bid in Watson v. Correctional Center Denied
WEEZIE INC: Slade Files ADA Suit in S.D. New York
WILLIAM SCURRY: Porter Class Cert. Bid Tossed w/o Prejudice
WORLD FINANCIAL: Partly Wins Judgment on Pleadings in Yeomans Suit
ZUM SF: Tucker Files Suit in Cal. Super. Ct.
*********
3WISHES.COM: Jaquez Files ADA Suit in S.D. New York
---------------------------------------------------
A class action lawsuit has been filed against 3Wishes.com, Inc. The
case is styled as Ramon Jaquez, on behalf of himself and all others
similarly situated v. 3Wishes.com, Inc., Case No. 1:22-cv-02414
(S.D.N.Y., March 30, 2022).
The lawsuit is brought over alleged violation of the Americans with
Disabilities Act.
3Wishes.com -- https://www.3wishes.com/ -- is an online lingerie
store with more than 20 years of experience enhancing adult
relationships of all kind.[BN]
The Plaintiff is represented by:
Edward Y. Kroub, Esq.
MIZRAHI KROUB LLP
200 Vesey Street
New York, NY 10281
Phone: (212) 595-6200
Email: ekroub@mizrahikroub.com
ACTIVATE FINANCIAL: Eady Files FDCPA Suit in E.D. Michigan
----------------------------------------------------------
A class action lawsuit has been filed against Activate Financial,
LLC. The case is styled as Andre Eady, other, individually and on
behalf of all others similarly situated v. Activate Financial, LLC,
Case No. 2:22-cv-10676-PDB-EAS (E.D. Mich., March 29, 2022).
The lawsuit is brought over alleged violation of the Fair Debt
Collection Practices Act.
Activate Financial, LLC -- https://activatefinancial.com/ -- is a
debt collection agency located in San Diego, California.[BN]
The Plaintiff is represented by:
Yaakov Saks, Esq.
STEIN SAKS, PLLC
One University Plaza, Suite 620
Hackensack, NJ 07601-2726
Phone: (201) 282-6500
Email: ysaks@steinsakslegal.com
AFTRA RETIREMENT: Bid to Dismiss Gilbert Suit Denied W/o Prejudice
------------------------------------------------------------------
In the case, Ron Gilbert, et al., Plaintiffs v. AFTRA Retirement
Fund, Defendant, Case No. 1:20-CV-10834-ALC (S.D.N.Y.), Judge
Andrew L. Carter, Jr., of the U.S. District Court for the Southern
District of New York denied AFTRA's motion to dismiss.
Before the Court is AFTRA's motion to dismiss pursuant to Fed. R.
Civ. P. 12(b)(1) for lack of standing and 12(b)(6) for failure to
state a claim upon which relief can be granted.
On Feb. 25, 2020, Defendant AFTRA Retirement Fund issued a press
release announcing a data breach potentially implicating over
494,069 individuals' personal identifiable information ("PII") that
occurred on Oct. 28, 2019. AFTRA began disseminating notice of the
Data Breach on Dec. 17, 2020. As a retirement fund, AFTRA
maintained members' PII.
Plaintiffs A.A. (a minor, by and through his natural parent, Steve
Altes), Sean Boozer, Paul Bright, Billy Choi, Ron Gilbert, Linnette
Harrigan, and Maurice Tyson bring the consolidated putative class
action against AFTRA, alleging the unauthorized disclosure of their
and putative class members' PII resulting from the Data Breach.
The Plaintiffs assert four claims on behalf of all the Plaintiffs
and the putative class for negligence, breach of implied contract,
unjust enrichment/quasi-contract, and breach of confidence; one
claim on behalf of Plaintiffs Harrigan and Tyson (together, the
"New York Plaintiffs") and the New York Sub-Class under N.Y. Gen.
Bus. Law Section 349 (Deceptive Practices); three claims on behalf
of A.A., Boozer, Choi, and Gilbert (together, the "California
Plaintiffs") and the California Sub-Class under Cal. Civ. Code
Section 1750, et seq. (Consumer Legal Remedies Act), California
Business & Professions Code Section 17200, et seq. (Unfair
Competition), and Cal. Civ. Code Section 1798, et seq. (Customer
Records Act);5 and a claim on behalf of Plaintiff Bright, an Oregon
resident, and the Oregon Sub-Class under Or. Rev. Stat. Sections
646.608, et seq.
On March 29, 2021, the Plaintiffs filed the Consolidated Amended
Class Action Complaint. The Defendants moved to dismiss on June 7,
2021.The Plaintiffs opposed on July 9, 2021. On July 23, 2021, the
Defendants replied.
The Defendant's first ground for dismissal is for lack of Article
III standing. It argues that the Court is deprived of subject
matter jurisdiction because the Plaintiffs have failed to
sufficiently plead injury in fact that is also fairly traceable to
the Data Breach. The Plaintiffs respond that they have adequately
alleged injury in fact, including, for instance, (1) monetary
damages resulting from actual fraud, (2) increased risk of identity
fraud and theft, (3) loss of time and money spent on mitigation,
(4) loss of the benefit of their bargain with the Defendant, and
(5) diminution in value of their PII.
To establish standing, Judge Carter explains that a plaintiff must,
at a minimum, allege "injury in fact that is concrete,
particularized, and actual or imminent," citing TransUnion LLC v.
Ramirez, 141 S.Ct. 2190, 2203 (2021). Approximately two weeks after
the Parties started briefing the motion to dismiss the Amended
Complaint, the Supreme Court decided TransUnion, which elaborated
upon the concrete-harm requirement for standing purposes. The Court
instructed, among other things, that "only those plaintiffs who
have been concretely harmed by a defendant's statutory violation
may sue that private defendant over that violation in federal
court." The decision also stated that "in a suit for damages, the
mere risk of future harm, standing alone, cannot qualify as a
concrete harm—at least unless the exposure to the risk of future
harm itself causes a separate concrete harm."
Guided by TransUnion, the Second Circuit recently held that the
Plaintiffs lacked standing for failure to plead a concrete harm
where it was undisputed that the Defendant bank, BNY Mellon, had
untimely filed a satisfaction of mortgage in violation of state
recording statutes, citing Maddox v. Bank of New York Mellon Tr.
Co., N.A., 19 F.4th 58 (2d Cir. 2021). Because TransUnion "narrowed
the grounds for asserting standing where the injury is primarily
statutory," the Court must be certain that each individual named
Plaintiff in the instant action has adequately alleged Article III
injury-in-fact, with the requisite concreteness, regarding each of
their statutory claims for damages.
Considering TransUnion and Maddox, and the fact that the Plaintiffs
have not had a meaningful opportunity to respond regarding this
intervening authority, Judge Carter denied the Defendant's motion
to dismiss without prejudice to re-filing a renewed motion. The
Parties were to submit a joint status letter on April 4, 2022,
indicating how they would like to proceed with the case.
For instance, the Plaintiffs may intend to seek leave of court to
amend. Alternatively, the Defendant may intend to renew its motion
to dismiss. If the Defendant intends to do so, the renewed motion
should, at a minimum, address TransUnion and Maddox, but it should
also consider the impact of those cases, if any, on McMorris v.
Carlos Lopez & Assocs., LLC, 995 F.3d 295 (2d Cir. 2021).
The Clerk of Court is directed to terminate the motion at ECF No.
37.
A full-text copy of the Court's March 18, 2022 Order is available
at https://tinyurl.com/y4axdvzz from Leagle.com.
AMERICAN AIRLINES: Court Nixes Remaining BIPA Claims in Kislov Suit
-------------------------------------------------------------------
In the case, ALEX KISLOV and NIKO HEARN, individually and on behalf
of a class of similarly situated individuals, Plaintiffs, v.
AMERICAN AIRLINES, INC., a Delaware Corporation, Defendant, Case
No. 17 C 9080 (N.D. Ill.), Judge Rebecca R. Pallmeyer of the U.S.
District Court for the Northern District of Illinois, Eastern
Division, granted the Defendant American's motion to dismiss all
remaining claims in the Third Amended Complaint.
I. Introduction
In the proposed class action, Plaintiffs Kislov and Hearn allege
that Defendant American violated various provisions of the Illinois
Biometric Information Privacy Act, 740 ILCS 14/1, et seq. ("BIPA"),
by using interactive voice response software in the airline's
customer service hotline. After the case was removed to federal
court in 2017, the parties engaged in protracted settlement
negotiations and motion practice. Most recently, the court severed
and remanded to state court one of the three BIPA claims asserted
by the Plaintiffs. Now, American moves to dismiss all remaining
claims, arguing that they are preempted by the Airline Deregulation
Act, 49 U.S.C. Section 41713 ("ADA").
II. Background
Defendant American, which operates a fleet of aircrafts and makes
thousands of flights per day, also "operates a 24-hour customer
service hotline to assist its customers and respond to customer
questions, issues, and complaints." Around July 2011, "in an effort
to better achieve customer service goals and reduce call agent
volumes, the Defendant integrated 'Interactive Voice Response'
software into its customer support hotline." Interactive voice
response "is the robot voice that a caller hears when calling a
customer support hotline."
American's voice response software collects, analyzes, and stores
callers' actual voiceprints to understand or predict the caller's
request, automatically respond with a personalized response, and
"trace" callers (that is, track interactions and determine whether
a caller has previously interacted with American). American saves
this data to a cloud-based server so that it can be provided to a
customer service agent, if the call is transferred to another agent
or the caller has additional interactions with American. The
software "proactively uses information about callers and their
trips to anticipate the reason for the call, personalize the
experience, and shorten hold times."
Plaintiffs Hearn and Kislov have both called American's customer
service hotline. Hearn alleges that on dates after December 2020,
he called American's customer service hotline "multiple times to
resolve several issues pertaining to flights departing from
Illinois." Kislov called the hotline in December 2019; the
Complaint does not say why Kislov called, or whether he called more
than once.
During these calls, the Plaintiffs allege, American obtained their
voiceprints without written consent, "in order to analyze the
intent and determine the context of the Plaintiffs' calls, prepare
information to be passed on to a customer service representative as
needed, and to allow Defendant to review the phone call to
determine whether there were any issues" with the software.
American also disclosed this data to its software vendor, without
Plaintiffs' consent, for cloud storage purposes.
In the TAC, the Plaintiffs asserted three claims under BIPA, an
Illinois statute enacted in 2008 to protect individuals' privacy
interests in their biometric information. Section 15 of BIPA
regulates how private entities collect, retain, disclose, and
destroy biometric information and identifiers, including
"voiceprints."
The Court previously severed and remanded Count I to state court,
concluding that the Plaintiffs lacked Article III standing to
pursue, in federal court, their Section 15(a) claim (that American
failed to make publicly available its biometric retention and
destruction policy). The remaining claims before the court are
Count II, which alleges that American collected or otherwise
obtained biometric data without first obtaining informed written
consent, in violation of Section 15(b); and Count III, which
alleges that American disclosed biometric data without obtaining
consent, in violation of Section 15(d).
American moves to dismiss these remaining BIPA claims under Rule
12(b)(6), arguing that both claims are preempted by the Airline
Deregulation Act.
III. Discussion
American argues that it is apparent on the face of the complaint
that the ADA preempts the Plaintiffs' claims. It argues that the
Plaintiffs' BIPA claims concerning the use of interactive voice
response software in its customer service hotline relate to the
services American provides its customers. In response, the
Plaintiffs argue that their claims do not concern any "service"
covered by the ADA, and, even they did, American has not
established a "significant economic impact" warranting dismissal on
the pleadings.
A. Airline Services
The threshold issue is whether the Plaintiffs' BIPA claims
implicate an activity covered by the ADA's preemption provision --
specifically, airline "services. The question is whether the
customer service hotline is part of the "bargained-for" exchange
between American and its customers.
Judge Pallmeyer concludes that it is. She finds that while
customers may not bargain for the collection of their biometrics
through voice recognition software, they do bargain for customer
assistance -- and enforcement of the Plaintiffs' BIPA claims would
impact American's provision of that service. The Plaintiffs
themselves have alleged that American integrated this software into
the hotline to improve customer service, meaning any BIPA
requirement regarding the software necessarily involves wholesale
changes to American's customer service practices. Given this, the
relevant activity for preemption purposes is American's provision
of a customer service hotline, not its allegedly unlawful use of
voice recognition software.
For similar reasons, Judge Pallmeyer finds unpersuasive the
Plaintiffs' contention that people may call the hotline for
non-customer service reasons. The Plaintiffs suggest an individual
could "accidentally misdial" the number, and note there is no
allegation that Plaintiff Kislov called the hotline "regarding a
customer service request." But "ADA preemption does not require
that the plaintiff be the customer for whom a service is
undertaken." If any plaintiff -- regardless of their motivation for
calling the hotline and even if they are not an American customer
-- succeeds on this specific BIPA claim, American will need to
alter its provision of its customer service.
In any event, Judge Pallmeyer holds that this misdialing
speculation is just that -- speculation. The Plaintiffs do not
offer a non-customer-service reason for Kislov to call the hotline,
nor do they identify any putative class member who fits this fact
pattern. Hence, the Plaintiffs' claims, as alleged in the
Complaint, implicate American's services.
B. "Relates To"
Next, Judge Pallmeyer considers the "relating to" inquiry. Although
BIPA is not directed towards airlines, the Plaintiffs' claims may
nonetheless "relate to" airline rates, routes, or services if they
have a "significant economic effect upon" those matters. This is
not a "simple all-or-nothing" inquiry; rather, courts must
determine on which side of "the preemption line" a claim falls.
Given this difficult line-drawing endeavor, Judge Pallmeyer
considers where other state-law claims have landed on this
preemption spectrum, before turning to the Plaintiffs' claims.
She finds that the BIPA provisions the Plaintiffs seek to enforce
here appear to fall on the "paternalistic" consumer-protection side
of the line. In short, allowing a BIPA challenge to this customer
service would require the airline to provide privacy protections
that it does not wish to offer. And American's expanded obligations
would not be limited to BIPA. Absent a finding of preemption,
American could potentially be subject to a "patchwork" of varying
state privacy laws, a result "inconsistent with Congress' major
legislative effort to leave such decisions, where federally
unregulated, to the competitive marketplace." In the current
marketplace, airlines and customers are free to contract for
stronger or weaker privacy protections, and customers are free to
choose among airlines based on the airlines' varying privacy
policies. Illinois may not displace this market by imposing its
restrictive BIPA requirements on voluntary agreements between
airlines and their customers.
Numerous federal courts have held other state privacy claims
preempted. Because the Plaintiffs' BIPA claims seek to regulate how
American interacts and communicates with its customers by adding
additional privacy obligations, Judge Pallmeyer concludes that such
claims, too, are preempted by the ADA.
In a similar vein, she rejects the Plaintiffs' argument that
preemption cannot be determined on the pleadings. Where the
defendant's preemption argument rests on an attenuated economic
connection, resolution on summary judgment, with a more developed
factual record, may be appropriate. But where the preemption theory
is based on the state's direct regulation of airline operations,
courts regularly dismiss on the pleadings. Such a disposition
according to Judge Pallmeyer, is warranted in the case.
IV. Conclusion
For the foregoing reasons, Judge Pallmeyer granted the Defendant
American's motion to dismiss. The complaint is dismissed. As this
ruling is the first time the Court has considered a pleadings
challenge against these Plaintiffs' BIPA claims, the dismissal is
with leave to amend. The Plaintiffs' amended complaint, if any,
will be filed within 28 days.
A full-text copy of the Court's March 22, 2022 Memorandum Opinion &
Order is available at https://tinyurl.com/yckteyee from
Leagle.com.
AMERICAN HERITAGE: Williams Files ADA Suit in S.D. New York
-----------------------------------------------------------
A class action lawsuit has been filed against American Heritage
Textiles, LLC. The case is styled as Milton Williams, on behalf of
himself and all other persons similarly situated v. American
Heritage Textiles, LLC, Case No. 1:22-cv-02612 (S.D.N.Y., March 30,
2022).
The lawsuit is brought over alleged violation of the Americans with
Disabilities Act.
American Heritage Textiles -- https://americanheritagetextiles.com/
-- is an American home goods, textile and accessories company.[BN]
The Plaintiff is represented by:
Jeffrey Michael Gottlieb, Esq.
Michael A. LaBollita, Esq.
GOTTLIEB & ASSOCIATES
150 E. 18th St., Suite PHR
New York, NY 10003
Phone: (212) 228-9795
Email: nyjg@aol.com
michael@gottlieb.legal
AMERIPARK LLC: Pool's $1.75MM Class Settlement Wins Final Approval
------------------------------------------------------------------
In the case, CARTER POOL, Plaintiff v. AMERIPARK, LLC, Defendant,
Case No. 19cv1103-LAB (WVG) (S.D. Fla.), Judge Larry Alan Burns of
the U.S. District Court for the Southern District of California
entered Final Judgment and Order granting the Plaintiff's Unopposed
Motion for Final Approval of Class Action Settlement and the
Plaintiff's Motion for Approval of Attorneys' Fees and Costs and
Class Representative Award.
I. Introduction
Class Representative Pool filed the putative class action against
Defendant Ameripark, alleging that the Defendant engaged in a
pattern of wage and hour violations against all current and former
non-exempt employees of the Defendant who worked in the State of
California and who performed parking valet duties. The Plaintiff
brings claims for violations of the California Labor Code,
including for claims under the Private Attorneys General Act of
2004, California Labor Code Section 2698, et seq. ("PAGA"); the
Industrial Welfare Commission ("IWC") Wage Orders; and California
Business & Professions Code Section 17200, et seq.
After arm's-length settlement discussions, the Parties entered into
a Stipulation of Class Action and PAGA Representative Action
Settlement and Release, which, if approved, would resolve the
putative class action.
Currently pending before the Court is the Plaintiff's Final
Approval Motion and the Plaintiff's Fee Motion.
On March 22, 2021, the Court entered its Order Granting Plaintiff's
Motion For: (1) Preliminary Approval of Class Action Settlement;
(2) Provisional Certification of the Settlement Class; (3) Approval
of the Class Notice and Notice Plan; (4) Appointment of Class
Counsel and Class Representative; (5) Appointment of Settlement
Administrator; and (6) Setting a Final Approval Hearing, in which
the Court preliminarily approved the Settlement. The Court also
scheduled a hearing to determine whether the Settlement is fair,
reasonable, adequate, in the best interest of the Class, and free
from collusion such that the Court should grant final approval of
the Settlement, and to consider the Plaintiff's motion for an award
of attorneys' fees, costs, and an incentive award for the Class
Representative.
Based upon these considerations and the findings of fact and
conclusions of law as set forth in the Preliminary Approval Order
and in his Final Judgment and Order Granting: (1) Motion for
Attorneys' Fees and Costs and Class Representative Award, (2) Final
Approval of Class Action Settlement; and (3) Dismissal of the
Action with Prejudice ("Final Approval Order"), Judge Burns granted
Final Approval of the Settlement, the terms of which are set forth
in the Settlement Agreement; certified the Settlement Class;
appointed the Plaintiff as the Class Representative and approved
the incentive award requested in the Fee Motion; approved the
payments to Settlement Administrator ILYM Group, Inc. requested in
the Final Approval Motion; appointed GrahamHollis APC as the Class
Counsel and the attorneys' fees and costs requested in the Fee
Motion and Supplemental Declaration of Graham S.P. Hollis are
approved; and dismissed with prejudice the Plaintiff's claims in
accordance with the terms of the Order.
As identified in the Court's Preliminary Approval Order, the
"Class" is comprised of the "Class Members," which is defined as
follows: all current and former non-exempt employees of Defendant
who worked in the State of California and who performed parking
valet duties during the Class Period. The Class Period is defined
as the period beginning on May 6, 2015, through March 22, 2021.
Judge Burns granted final certification of the Class for settlement
purposes only.
The Settlement Class will receive the Settlement Amount of $1.75
million, minus Court-approved attorneys' fees and costs,
administrative costs, PAGA penalties, Class Representative Service
Award, and Labor Code Section 1102.5 Award.
The PAGA payment of $87,500, with $65,625 (or 75%) allocated to the
California Labor and Workforce Development Agency ("LWDA") and
$21,875 (or 25%) to be distributed to the Class, is approved. That
payment must be distributed as set forth in the Settlement
Agreement.
The fees and expenses of ILYM Group, Inc. in administrating the
settlement in the amount of $14,500, are fair and reasonable. Judge
Burns granted final approval to and orders that the payment of that
amount be paid out of the Maximum Settlement Amount in accordance
with the Settlement Agreement.
The requested Class Representative Service Award, Labor Code
Section 1102.5 Award, and the attorneys' fees and costs are fair
and reasonable. Judge Burns granted final approval to and orders
that the payment of the amounts of $5,000 to the Plaintiff for his
Service Award, $5,000 to Plaintiff for his Labor Code Section
1102.5 Award, $437,500 to the Class Counsel for attorneys' fees,
and $12,564.82 for reimbursement of costs be paid out of the
Maximum Settlement Amount in accordance with the Settlement
Agreement.
The Settlement is ordered finally approved, and all terms and
provisions of the Settlement are ordered to be consummated.
Participating Class Members will be bound by the Settlement. The
Parties are hereby ordered to comply with the terms of the
Settlement Agreement. The action is dismissed with prejudice, and
final judgment is entered. Each side will bear its own costs and
attorneys' fees except as provided by the Settlement and the Final
Approval Order.
The parties have consented to the continued jurisdiction of
Magistrate Judge William V. Gallo or any Magistrate Judge who may
later be assigned over all matters relating to the interpretation,
administration, implementation, effectuation, and enforcement of
this Final Approval Order and the Settlement.
The Clerk is directed to close the case.
A full-text copy of the Court's March 22, 2022 Final Judgment &
Order is available at https://tinyurl.com/y25t9jj9 from
Leagle.com.
AMICA MUTUAL INSURANCE: Merullo Suit Removed to D. Massachusetts
----------------------------------------------------------------
Michael Merullo, on behalf of Himself and all others similarly
situated v. AMICA MUTUAL INSURANCE COMPANY, was removed from the
Middlesex County Superior Court to the United States District Court
for the District of Massachusetts on March 17, 2022, and assigned
Case No. 1:22-cv-10410-DJC.
This is an action where the Plaintiff alleges that Amica promised
to pay the Plaintiff and other putative class members inherent
diminished value ("IDV") damages to their vehicles when Amica's
insured's were found liable. The Plaintiff alleges that he, and
other putative class members are third-party beneficiaries of the
policies issued to Amica's insureds. The Plaintiff also alleges
that Amica did not pay IDV damages to the Plaintiff or other
putative class members in accordance with the terms of the policy
of insurance. The Plaintiff claims that Amica's failure to pay IDV
damages constitutes a breach of contract. The Plaintiff alleges
that as a result of Amica's breach of contract, he and other
putative class members have suffered damages, including all unpaid
IDV damages, with interest. The Plaintiff also claims that Amica's
actions were committed willfully, knowingly and/or in bad faith and
that Amica has business policy and practice of not issuing payment
for IDV damages. The Plaintiff further seeks declaratory judgment
that IDV damages are covered under Part 4 of the Standard
Massachusetts Automobile policy.[BN]
The Plaintiff is represented by:
Kevin J. McCullough, Esq.
Michael C. Forrest, Esq.
FORREST, MAZOW, MCCULLOUGH, YASI & YASI, P.C.
2 Salem Green, Suite 2
Salem, MA 01970
Email: kmccullough@forrestlamothe.com
mforrest@forrestlamothe.com
The Defendant is represented by:
Anthony Antonellis, Esq.
Christopher M. Reilly, Esq.
SLOANE AND WALSH, LLP
One Boston Place
201 Washington Street, Suite 1600
Boston, MA 02108
Phone: (617) 523-6010
Facsimile: (617) 227-0927
Email: aantonellis@sloanewalsh.com
creilly@sloanewalsh.com
- and -
Mara E. Finkelstein, Esq.
SLOANE AND WALSH, LLP
148 Eastern Boulevard, Suite 105
Glastonbury, CT 06033
Phone: (860) 375-1877
Facsimile: (860) 430-6999
Email: mfinkelstein@sloanewalsh.com
ANAONO LLC: Jaquez Files ADA Suit in S.D. New York
--------------------------------------------------
A class action lawsuit has been filed against AnaOno, LLC. The case
is styled as Ramon Jaquez, on behalf of himself and all others
similarly situated v. AnaOno, LLC, Case No. 1:22-cv-02569
(S.D.N.Y., March 30, 2022).
The lawsuit is brought over alleged violation of the Americans with
Disabilities Act.
AnaOno -- https://www.anaono.com/ -- makes bras for those who have
undergone breast surgeries and need something that is truly made to
accommodate them.[BN]
The Plaintiff is represented by:
Edward Y. Kroub, Esq.
MIZRAHI KROUB LLP
200 Vesey Street
New York, NY 10281
Phone: (212) 595-6200
Email: ekroub@mizrahikroub.com
ANGEL DEAR: Sanchez Files ADA Suit in S.D. New York
---------------------------------------------------
A class action lawsuit has been filed against Angel Dear Inc. The
case is styled as Cristian Sanchez, individually, and on behalf of
all others similarly situated v. Angel Dear Inc., Case No.
1:22-cv-02575 (S.D.N.Y., March 30, 2022).
The lawsuit is brought over alleged violation of the Americans with
Disabilities Act.
Angel Dear -- https://angeldear.com/ -- offers unique modern
designer baby and children's clothing in bamboo, muslin and the
best baby blankies, lovey, lovies, gifts, accessories and
more.[BN]
The Plaintiff is represented by:
Edward Y. Kroub, Esq.
MIZRAHI KROUB LLP
200 Vesey Street
New York, NY 10281
Phone: (212) 595-6200
Email: ekroub@mizrahikroub.com
APPLE INC: Class Certification Briefing Extended in Tabak Lawsuit
-----------------------------------------------------------------
In the class action lawsuit captioned as LISA TABAK, DE'JHONTAI
BANKS, DAVID DANON, MATTHEW WHITE, KELLY CAMELO-CENICOLA, NESTOR
TRUJILLO, and CHRISTINE CLEMENCE, on of themselves and all others
similarly situated, v. APPLE, INC., Case No. 4:19-cv-02455-JST
(N.D. Cal.), the Hon. Judge Jon S. Tigar entered an order extending
class certification briefing and mediation deadlines as follows:
Event Current Proposed
Deadline Deadline
Deadline to Complete April 19, 2022 Dec. 19, 2022
Private Mediation:
The Plaintiffs' Class N/A Nov. 15, 2022
Certification Expert
Reports:
Defendant's Class N/A Jan. 13, 2023
Certification Expert
Reports:
The Plaintiffs' Class N/A Feb. 24, 2023
Certification Rebuttal
Expert Reports:
The Plaintiffs' Motion May 20, 2022 March 17, 2023
for Class Certification
Defendant's Opposition July 19, 2022 May 12, 2023
to Motion for Class
Certification
Plaintiffs' Reply ISO Sept. 2, 2022 June 9, 2023
Class Certification
A copy of the Court's order dated March 16, 2022 is available from
PacerMonitor.com at https://bit.ly/3u1eLYB at no extra charge.[CC]
The Plaintiffs are represented by:
Andrea R. Gold, Esq.
Hassan A. Zavareei, Esq.
Allison Parr, Esq.
TYCKO & ZAVAREEI LLP
1828 L Street, NW, Suite 1000
Washington, DC 20036
Telephone: (202) 973-0900
Facsimile: (202) 973-0950
- and -
Annick Persinger, Esq.
TYCKO & ZAVAREEI LLP
1970 Broadway, Suite 1070
Oakland, CA 94612
Telephone: (510) 254-6808
- and -
Gregory F. Coleman, Esq.
Adam A. Edwards, Esq.
William A. Ladnier, Esq.
MILBERG COLEMAN BRYSON
PHILLIPS GROSSMAN PLLC
First Horizon Plaza
800 S. Gay Street, Suite 1100
Knoxville, TN 37929
Telephone: (865) 247-0080
Facsimile: (865) 522-0049
The Defendant is represented by:
Arturo J. Gonzalez, Esq.
Penelope A. Preovolos, Esq.
Alexis A. Amezcua, Esq.
Camila A. Tapernoux, Esq.
MORRISON AND FOERSTER LLP
425 Market Street
San Francisco, CA 94105-2482
Telephone: (415) 268-7000
Facsimile: (415) 268-7522
E-mail: agonzalez@mofo.com
ppreovolos@mofo.com
aamezcua@mofo.com
ctapernoux@mofo.com
ARCH SPECIALTY: Second Circuit Affirms Dismissal of ASG & C Suit
----------------------------------------------------------------
In the case, ASG & C, INC., A NEW YORK CORPORATION,
Plaintiff-Appellant v. ARCH SPECIALTY INSURANCE COMPANY,
Defendant-Appellee, Case No. 21-1761-cv (2d Cir.), the U.S. Court
of Appeals for the Second Circuit affirmed the judgment of the
district court dismissing ASG & C's complaint against its insurer
Defendant-Appellee Arch Specialty.
In June 2018, Arch issued a commercial general liability policy to
ASG & C. After the policy expired in September 2019, Arch contacted
ASG & C and, pursuant to Section IV, Paragraph 5 of the policy,
demanded an audit of ASG & C for the purpose of computing an
audited premium. Two weeks later, Arch sent ASG & C an invoice in
the amount of $24,313.62 for the "Audit Premium" it believed was
due.
Rather than pay the invoice, ASG & C filed a putative class action
in New York state court "seeking a declaratory decree that the
premium audit provisions of the policy were invalid and
unenforceable." Arch subsequently removed the case to federal
court, and ASG & C filed an amended complaint seeking damages for
unjust enrichment. ASG & C also sought declaratory and injunctive
relief predicated on its unjust enrichment claim.
The district court concluded that ASG & C's claim for unjust
enrichment would not lie because the subject matter of the claim
was covered by an express contract between the parties, and the
district court dismissed ASG & C's complaint without leave to
amend.
The Second Circuit reviews the district court's grant of dismissal
de novo. It holds that the parties entered into an express written
contract -- the policy -- that governs ASG & C's claim.
Accordingly, ASG & C is limited to recovery on the contract and may
not seek recovery based on an alleged quasi contract.
Moreover, ASG & C nowhere alleges that it actually paid the
invoice. Thus, Arch was not enriched at all, much less unjustly.
The Second Circuit therefore rejects ASG & C's claim for unjust
enrichment, as well as its requests for declaratory and injunctive
relief that depend on that claim.
The Second Circuit has considered ASG & C's remaining arguments and
find them to be meritless. As a result, it affirmed the judgment of
the district court.
A full-text copy of the Court's March 22, 2022 Summary Order is
available at https://tinyurl.com/36c7jybf from Leagle.com.
DAVID H. CHARLIP, Charlip Law Group, LC, in Miami, Florida, for the
Plaintiff-Appellant.
KATELYN M. SANDOVAL -- ksandoval@carltonfields.com (Markham R.
Leventhal -- mleventhal@carltonfields.com -- & Todd M. Fuller --
tfuller@carltonfields.com -- Carlton Fields, P.A., in Washington,
D.C., on the brief), Carlton Fields, P.A., in New York City, for
the Defendant-Appellee.
AREA STARS: Jackson Files ADA Suit in S.D. New York
---------------------------------------------------
A class action lawsuit has been filed against Area Stars, LLC. The
case is styled as Sylinia Jackson, on behalf of herself and all
other persons similarly situated v. Area Stars, LLC, Case No.
1:22-cv-02558 (S.D.N.Y., March 29, 2022).
The lawsuit is brought over alleged violation of the Americans with
Disabilities Act.
Area Stars -- https://areastars.com/ -- was founded to empower
women of all backgrounds, styles and shapes to feel like a STAR in
their own AREA.[BN]
The Plaintiff is represented by:
Jeffrey Michael Gottlieb, Esq.
Michael A. LaBollita, Esq.
GOTTLIEB & ASSOCIATES
150 E. 18th St., Suite PHR
New York, NY 10003
Phone: (212) 228-9795
Email: nyjg@aol.com
michael@gottlieb.legal
BAMIA 2 LLC: Valenzuela Files Suit in Cal. Super. Ct.
-----------------------------------------------------
A class action lawsuit has been filed against Bamia 2 LLC, et al.
The case is styled as Alejandro Valenzuela, Angeleigh Manjarrez,
individually and on behalf of all others similarly situated v.
Bamia 2 LLC, a Limited Liability Company; Does 1 Through 50,
Inclusive; Case No. CGC22598895 (Cal. Super. Ct., San Francisco
Cty., March 29, 2022).
The case type is stated as "Other Non-Exempt Complaints."
Bamia 2 LLC is located in Miami, Florida and is part of the
Management, Scientific, and Technical Consulting Services
Industry.[BN]
The Plaintiffs are represented by:
Nicholas James Blouw, Esq.
BLUMENTHAL NORDREHAUG BHOWMIK DE BLOUW
2255 Calle Clara
La Jolla, CA 92037-3107
Phone: 858-952-0354
Fax: 858-551-1232
Email: DeBlouw@bamlawca.com
BANDCAMP LLC: Slade Files ADA Suit in S.D. New York
---------------------------------------------------
A class action lawsuit has been filed against Bandcamp LLC. The
case is styled as Linda Slade, individually and as the
representative of a class of similarly situated persons v. Bandcamp
LLC, Case No. 1:22-cv-02542 (S.D.N.Y., March 29, 2022).
The lawsuit is brought over alleged violation of the Americans with
Disabilities Act.
Bandcamp -- https://bandcamp.com/ -- is an American internet music
company founded in 2008 by Oddpost co-founder Ethan Diamond and
programmers Shawn Grunberger, Joe Holt and Neal Tucker, with
headquarters in Oakland, California.[BN]
The Plaintiff is represented by:
Dan Shaked, Esq.
SHAKED LAW GROUP, P.C.
14 Harwood Court, Suite 415
Scarsdale, NY 10583
Phone: (917) 373-9128
Email: shakedlawgroup@gmail.com
BEACH TRADING: Williams Files ADA Suit in S.D. New York
-------------------------------------------------------
A class action lawsuit has been filed against Beach Trading Company
Inc. The case is styled as Milton Williams, on behalf of himself
and all other persons similarly situated v. Beach Trading Company
Inc., Case No. 1:22-cv-02614 (S.D.N.Y., March 30, 2022).
The lawsuit is brought over alleged violation of the Americans with
Disabilities Act.
BeachCamera.com -- http://beachtr.com/-- is a pioneering retailer
of consumer electronics located in Edison New Jersey.[BN]
The Plaintiff is represented by:
Jeffrey Michael Gottlieb, Esq.
Michael A. LaBollita, Esq.
GOTTLIEB & ASSOCIATES
150 E. 18th St., Suite PHR
New York, NY 10003
Phone: (212) 228-9795
Email: nyjg@aol.com
michael@gottlieb.legal
BELLA NOTTE LINENS: Slade Files ADA Suit in S.D. New York
---------------------------------------------------------
A class action lawsuit has been filed against Bella Notte Linens,
Inc. The case is styled as Linda Slade, individually and as the
representative of a class of similarly situated persons v. Bella
Notte Linens, Inc., Case No. 1:22-cv-02531 (S.D.N.Y., March 29,
2022).
The lawsuit is brought over alleged violation of the Americans with
Disabilities Act.
Bella Notte Linens -- https://www.bellanottelinens.com/ -- is
luxury bedding for real life.[BN]
The Plaintiff is represented by:
Dan Shaked, Esq.
SHAKED LAW GROUP, P.C.
14 Harwood Court, Suite 415
Scarsdale, NY 10583
Phone: (917) 373-9128
Email: shakedlawgroup@gmail.com
BIG TREE HOSPITALITY: Jackson Files ADA Suit in S.D. New York
-------------------------------------------------------------
A class action lawsuit has been filed against Big Tree Hospitality,
LLC. The case is styled as Sylinia Jackson, on behalf of herself
and all other persons similarly situated v. Big Tree Hospitality,
LLC, Case No. 1:22-cv-02559 (S.D.N.Y., March 29, 2022).
The lawsuit is brought over alleged violation of the Americans with
Disabilities Act.
Big Tree Hospitality -- https://www.bigtreehospitality.com/ -- is a
Portland, Maine based restaurant group hell-bent on excellence in
hospitality.[BN]
The Plaintiff is represented by:
Jeffrey Michael Gottlieb, Esq.
Michael A. LaBollita, Esq.
GOTTLIEB & ASSOCIATES
150 E. 18th St., Suite PHR
New York, NY 10003
Phone: (212) 228-9795
Email: nyjg@aol.com
michael@gottlieb.legal
BIMBO BAKERIES: S.D. Illinois Narrows Claims in Elder Consumer Suit
-------------------------------------------------------------------
The U.S. District Court for the Southern District of Illinois
granted in part and denied in part the Defendant's motion to
dismiss the lawsuit styled VICKI ELDER, individually and on behalf
of all others similarly situated, Plaintiff v. BIMBO BAKERIES USA,
INC., Defendant, Case No. 3:21-cv-637-DWD (S.D. Ill.).
Plaintiff Vicki Elder brings the putative class action against the
Defendant, alleging that it deceptively labeled one of its food
products. Elder brings a claim under the Illinois Consumer Fraud
and Deceptive Business Practices Act, 815 ILCS 505/1, et seq.
("ICFA") and claims for breach of warranty, negligent
misrepresentation, fraud, and unjust enrichment. The Defendant
filed a motion to dismiss the complaint for failure to state a
claim.
I. Factual Background
The Defendant manufactures, labels, markets, and sells a cake
labeled "All Butter Loaf Cake" under its Entenmann's brand.
According to the cake's ingredients label, it contains butter,
soybean oil, and artificial flavors among other ingredients. Elder
alleges that the label "All Butter Loaf Cake" is misleading because
the soybean oil acts as a shortening ingredient and, thus, a butter
substitute and the artificial flavors enhance the cake's buttery
taste and cover the non-buttery flavor of the soybean oil.
Together, the soybean oil and artificial flavors give consumers the
impression that the cake contains more butter than it actually
does. She claims that had she not been misled by the "All Butter
Loaf Cake" label, she would have purchased fewer cakes or paid less
for them.
II. Analysis
A. Plausibility
District Judge David W. Dugan notes that to bring an ICFA claim,
Elder must allege conduct that plausibly could deceive a reasonable
consumer in light of all the information available to the consumer.
See Phillips v. DePaul Univ., 19 N.E.3d 1019, 1031 (1.11. App. Ct.
2014). This standard requires a "practical and fact-intensive
approach to consumer behavior" (Bell v. Publix Super Markets, Inc.,
982 F.3d 468, 478 (7th Cir. 2020)). Thus, how reasonable consumers
would interpret an ambiguous food label is typically a question of
fact that should not be decided on the pleadings.
The allegedly deceptive label reads, "All Butter Loaf Cake." The
most literal interpretation of this label is that the entire cake
is made purely of butter. Clearly, that interpretation is
unreasonable, Judge Dugan notes. Instead, Elder alleges that a
reasonable consumer would interpret the label to mean that "all the
shortening and flavoring comes from real butter" and "no butter
alternatives or substitutes will be used in the Product where
butter is capable of being used." This reasonable consumer would be
deceived, because as Elder alleges, soybean oil provides some of
the shortening function and artificial flavors provide additional
flavoring.
The Defendant argues that Elder has failed to plausibly allege (1)
that soybean oil provides some of the shortening function and (2)
that the label reasonably implies that the cake contains no
artificial flavors. The Defendant claims that the soybean oil is
used only to create a crack along the top of the cake, not as
shortening. But this is a factual assertion that contradicts
Elder's claims, Judge Dugan finds. For purposes of the motion to
dismiss, the Court must accept as true Elder's claims that the
soybean oil is used as a shortening ingredient or for another
purpose for which butter could have been used.
As to artificial flavors, both parties agree that butter has
something to do with the flavor of the cake. Thus, the Court cannot
say that no reasonable consumer would interpret the phrase "All
Butter" as further implying the absence of artificial flavors. The
phrase "All Butter" is subject to different plausible
interpretations and is, therefore, ambiguous. The interpretation of
this ambiguous label is a question of fact that the Court will not
decide on the pleadings. The Court finds that Elder has plausibly
alleged deception under ICFA.
B. Preemption
The Defendant also argues that Elder's ICFA claim is preempted by
the Food, Drug, and Cosmetic Act ("FDCA"). The FDCA prohibits
states from directly or indirectly establishing under any authority
any requirement for a food, which is the subject of a standard of
identity that is not identical to such standard of identity or that
is not identical to the requirement of section 343(g) of the FDCA.
One such requirement is that if a food contains any artificial
flavor, which simulates, resembles or reinforces the characterizing
flavor, the words "artificial" or "artificially flavored" must be
placed next to the name of the food on the label.
Judge Dugan notes that the FDCA does not create a private right of
action to enforce its standards, citing Turek v. General Mills,
Inc., 662 F.3d 423, 426 (7th Cir. 2011). And both parties agree
that a plaintiff cannot use an FDCA violation as the predicate for
an ICFA violation.
While Ms. Elder does reference FDA regulations in her complaint,
her complaint is not "entirely predicated" on them as the Defendant
argues, Judge Dugan notes. Remove all references to the FDCA and
FDA regulations from her complaint and Elder has still stated a
plausible claim that the cake's label is deceptive under ICFA. And
Elder is not trying to enforce standards different from those of
the FDCA and FDA regulations. The complaint indicates that FDA
regulations would require the Defendant to add "Artificially
Flavored" to the cake's label.
The Defendant argues that the regulations do not require such a
designation in this case because butter is not the characterizing
flavor of the cake. The characterizing flavor is the "primary
recognizable flavor(s)" represented on the food's label. The
Defendant may be correct that simply naming an ingredient on a
label does not always make that ingredient a characterizing flavor,
Judge Dugan says. But the cake's label names only one specific
ingredient and only one flavor of any kind: butter. Judge Dugan
finds that Elder has plausibly alleged that butter is the
characterizing flavor of the cake. Taking Elder's well-pleaded
facts as true, she is not seeking a food label requirement
inconsistent with FDA regulations.
Finally, the Defendant argues that the phrase "All Butter" is
similar to the phrase "made with real butter," which FDA
regulations state is not a nutrient-content claim, and would,
therefore, not be subject to nutrient-content claim regulations.
But even if the Defendant is correct, its argument is irrelevant,
Judge Dugan holds. The complaint never invokes the FDA's
nutrient-content claim regulations. In fact, the only regulations
cited in the complaint are the rides in 21 C.F.R. Section 101.22
regarding the labeling of artificial flavors. For these reasons,
the Court finds that Elder's ICFA claim is not preempted by the
FDCA.
C. Injunctive Relief
Ms. Elder seeks injunctive relief requiring the Defendant to
correct the misleading label. The Defendant argues that Elder lacks
standing to seek injunctive relief because she is now aware of the
allegedly deceptive nature of the label. A plaintiff must meet
three requirements to establish that she has standing to bring a
lawsuit: (1) injury in fact, (2) a causal connection between the
injury and the defendant's conduct, and (3) redressability, citing
Scherr v. Marriott Int'l, Inc., 703 F.3d. 1069, 1074 (7th Cir.
2013) (citing Lujan v. Defenders of Wildlife, 504 U.S. 555, 560
(1992)).
The Defendant allegedly injured Elder by using a label that
actually deceived her. However, now that she is aware of the
deception, it is unlikely Elder will be duped again. Elder argues
that she faces an imminent threat of future harm because she
"intends to, seeks to, and will purchase the Product again when she
can do so with the assurance that Product's representations are
consistent with its composition."
Judge Dugan holds that merely purchasing the cake does not trigger
Elder's injury. Her injury lies in purchasing the cake under the
influence of a deceptive label. There is no chance she will be
tricked again by "All Butter Loaf Cake" because she now knows a
quick look at the ingredients label will reveal the cake's true
composition. Therefore, the complaint fails to allege a real and
immediate threat of future violations of her rights. Elder's claims
are due to be dismissed to the extent they seek injunctive relief,
Judge Dugan rules.
D. Negligent Misrepresentation
The elements of negligent misrepresentation are: (1) a false
statement of a material fact; (2) carelessness or negligence in
ascertaining the truth of the statement by the party making it; (3)
an intention to induce the other party to act; (4) action by the
other party in reliance on the truth of the statement; and (5)
damage to the other party resulting from such reliance when the
party making the statement is under a duty to communicate accurate
information (Capiccioni v. Brennan Naperville, Inc., 791 N.E.2d
553, 562 (M. App. Ct. 2003)).
Illinois law generally does not permit a negligence action for
recovery of economic loss alone, Judge Dugan notes. However, there
are exceptions when (1) the defendant intentionally made false
representations or (2) the defendant made negligent
misrepresentations while in the business of supplying information
for the guidance of others in their business transactions.
Judge Dugan finds that only the first exception applies here. The
complaint alleges that the Defendant acted with fraudulent intent
as evinced by its knowledge that the Product was not consistent
with its representations. As Elder points out, intent may be
alleged generally. Thus, Judge Dugan holds, Elder has sufficiently
alleged that Defendant intentionally labeled the cake in a
deceptive manner. For these reasons, Elder has sufficiently pleaded
negligent misrepresentation.
E. Breach of Warranty
The Defendant argues that Illinois law requires a plaintiff to
provide a defendant with notice of a breach of warranty before
bringing a breach of warranty claim. The Defendant asserts that
Elder did not provide pre-suit notice of her breach of warranty
claims. Elder argues that the filing of this action in 2021 was
notice enough.
Judge Dugan holds that Plaintiff Elder is wrong. Elder claims only
economic loss, not personal injury, so merely filing suit is not
sufficient notice. Elder also argues that notice is not required
when the Defendant has actual knowledge of the defect. She asserts
that the Defendant knew that its cakes contained soybean oil and
conceded as much in its motion to dismiss.
However, the seller must know more than just the facts constituting
the breach; the seller must know of the buyer's claims that those
facts constitute a breach, Judge Dugan opines. Thus, a
manufacturer's knowledge of its own ingredients does not constitute
actual knowledge of the defect. Therefore, the Defendant did not
have actual knowledge of the alleged breaches of warranty merely
because it was aware of the ingredients in its cakes.
In a final effort to establish notice, Elder points to allegations
in the complaint claiming that she provided or will provide notice
and that the Defendant received notice due to complaints by
regulators, competitors, and consumers, to its main offices.
Ms. Elder undermines her bare assertion that she provided notice by
adding an alternative -- "or will provide notice" -- and by her
arguments in response to the motion to dismiss, which strongly
suggest she never provided notice beyond the filing of the lawsuit,
Judge Dugan states. Without more detail, her complaint does not
plausibly allege that she provided pre-suit notice to the
Defendant. Complaints from regulators, competitors, or other
consumers cannot substitute for Elder's obligation to notify the
Defendant of her specific complaints prior to filing suit, Judge
Dugan opines. Because Elder failed to fulfill the UCC's pre-suit
notice requirement, her claims for breach of warranty must be
dismissed.
Ms. Elder's breach of warranty claim under the Magnuson-Moss
Warranty Act ("MMWA") also fails, Judge Dugan holds. Under the
MMWA, a written warranty is a fact or promise that affirms or
promises that such material or workmanship is defect free or will
meet a specified level of performance over a specified period of
time. The description "All Butter Loaf Cake" makes no claim that
the cake is free of defects or will meet a specified level of
performance over a specified period of time. Therefore, Elder's
claim under the MMWA is also due to be dismissed.
F. Fraud
The Defendant argues that Elder's fraud claim should be dismissed
because her reliance on the alleged misrepresentation was
unreasonable. However, as previously discussed, the Court has found
that Elder has adequately alleged that her interpretation and that
her reliance on the cake's label was reasonable. Therefore, the
Defendant's motion to dismiss is due to be denied as to the fraud
claim.
G. Unjust Enrichment
The Defendant argues that Elder's unjust enrichment claim fails
because the cake's label is not misleading in any way. However, as
previously discussed, the Court has found that Elder adequately
alleged that the label is misleading. Therefore, the Defendant's
motion to dismiss is due to be denied as to the unjust enrichment
claim.
H. Wisconsin Claims
Finally, the Defendant argues that Elder's claims under Wisconsin
law should be dismissed because she lacks standing to bring claims
on behalf of Wisconsin residents and because she never refers to
Wisconsin law in her complaint. Indeed, Elder references Wisconsin
only once in her complaint when she says that the proposed class
will consist of Illinois and Wisconsin residents.
Judge Dugan finds that the Defendant is correct that Elder makes no
reference to Wisconsin law. Therefore, there are no Wisconsin
claims to be dismissed. Arguments as to the scope of the proposed
class will be addressed when the Court considers class
certification. Therefore, this aspect of the Defendant's motion to
dismiss is due to be denied.
IV. Conclusion
For these reasons, the Defendant's motion to dismiss is granted in
part and denied in part. The Plaintiff's claims for breach of
warranty under Illinois law and the MMWA and any claim for
injunctive relief are dismissed.
A full-text copy of the Court's Memorandum & Order dated March 17,
2022, is available at https://tinyurl.com/3827jz22 from
Leagle.com.
BNSF RAILWAY: Illinois Court Certifies Class in Rogers BIPA Suit
----------------------------------------------------------------
In the case, RICHARD ROGERS, individually and on behalf of
similarly situated individuals, Plaintiff v. BNSF RAILWAY COMPANY,
Defendant, Case No. 19 C 3083 (N.D. Ill.), Judge Matthew F.
Kennelly of the U.S. District Court for the Northern District of
Illinois, Eastern Division, granted Rogers' motion to certify a
class.
I. Background
Mr. Rogers has sued BNSF on behalf of a putative class for
violations of the Illinois Biometric Information Privacy Act
(BIPA). He has moved to certify a class under Federal Rule of Civil
Procedure 23(b)(3).
Mr. Rogers has moved to certify the following class of 44,149
members: "All individuals whose fingerprint information was
registered using an Auto-Gate System at one of BNSF's four Illinois
facilities at any time between April 4, 2014 and Jan. 25, 2020."
II. Discussion
In order for the case proceed as a class action, Rogers must show
that the proposed class satisfies Rule 23, which sets out the
requirements for class certification. First, under Rule 23(a), a
putative class must satisfy four requirements: numerosity,
commonality, typicality, and adequacy of representation. Rule 23(a)
requires the class to be so numerous that joinder of all members is
impracticable; there are common questions of law or fact; the
representatives' claims are typical of those of the class; and the
representatives fairly and adequately protect the interests of the
class.
Second, the proposed class must fall within one of the three
categories in Rule 23(b). Rogers argues for certification under
Rule 23(b)(3), which requires finding "that the questions of law or
fact common to class members predominate over any questions
affecting only individual members, and that a class action is
superior to other available methods for fairly and efficiently
adjudicating the controversy."
A. Class definition
Before turning to Rule 23, the Court must first address BNSF's
challenge to Rogers's class definition. BNSF asserts that the
proposed class is too broad because it includes an estimated 8,805
individuals whose claims are no longer timely based on the
one-and-done claim accrual theory.
Judge Kennelly rejects this argument for the reasons previously
discussed in the opinion denying BNSF's motion for summary
judgment. The plain text of section 15(b) does not limit a
plaintiff to suing within the statute of limitations after the
first violation of the statute. And Rogers's proposed class only
includes individuals who had their biometric information captured
at least once after April 4, 2014, which is five years before
Rogers filed the suit. Thus, the proposed class is not facially
overbroad.
B. Rule 23(a) & Rule 23(b)
As previously stated, Rule 23(a) sets out four requirements for
class certification: numerosity, commonality, typicality, and
adequacy of representation. BNSF only disputes adequacy of
representation.
Judge Kennelly holds that (i) the proposed class of 44,149
individuals satisfies the numerosity requirement; (ii) the common
fact pattern of conduct toward all members of the proposed class:
Biometric registration during a driver's initial visit to a BNSF
facility and biometric scanning upon subsequent visits, gives rise
to common questions of fact and law; (iii) Rogers's claim is
virtually identical to the claims of the proposed class members, as
it arises from a uniform course of conduct; (iv) Rogers and the
class members possess the same interest in vindicating their
statutory rights under BIPA such that Rogers adequately represents
the class; (v) the common issue of demonstrating BNSF operated the
AGS and collected biometric information in violation of BIPA will
predominate over any potential individualized issues; and (vi) the
case is well-suited for class treatment, especially because the
claims involve uniform statutory damages and there is no indication
that class members' interests would be better served by
individually controlling their own actions.
III. Conclusion
For the foregoing reasons, Judge Kennelly granted the Plaintiff's
motion for class certification. He certified the following class
under Rule 23(b)(3): All individuals whose fingerprint information
was registered using an Auto-Gate System at one of BNSF's four
Illinois facilities at any time between April 4, 2014 and Jan. 25,
2020.
Judge Kennelly also appointed the following attorneys as the class
counsel: Myles McGuire, Evan M. Meyers, David L. Gerbie, and
Brendan Duffner of McGuire Law, P.C.
The case was set for a telephonic status hearing on April 1, 2022,
at 8:15 a.m. for the purpose of setting a trial date and discussing
the possibility of settlement.
A full-text copy of the Court's March 22, 2022 Memorandum Opinion &
Order is available at https://tinyurl.com/555knrmw from
Leagle.com.
BROWN UNIVERSITY: Court Grants Summary Judgment Bid in Choi Suit
----------------------------------------------------------------
In the case, HYUN CHOI, ANNA HOUSE, and AMY PHAM, individually and
on behalf of all others similarly situated, Plaintiffs v. BROWN
UNIVERSITY, Defendant, C.A. No. 20-cv-191-JJM-LDA (D.R.I.), Judge
John J. McConnell, Jr., of the U.S. District Court for the District
of Rhode Island granted the Defendant Brown's Motion for Summary
Judgment as to all counts.
I. Introduction
Before the Court is Defendant Brown's Motion for Summary Judgment.
According to Brown's Motion, the three named Plaintiffs cannot
sustain a claim for breach of contract because of a failure to
refund fees they paid, and therefore Brown is entitled to judgment
as a matter of law. The claims pertain to four classes of fees and
charges: A Student Activity Fee, a Health Services Fee, a
Nonresident Fee, and Room and Board Charges. The Plaintiffs oppose
this Motion on grounds that each Plaintiff, in one way or another,
has lost the benefit of their contractual bargain, and there are
disputes as to material facts whether Brown provided the services
for which the Plaintiffs contracted.
II. Background
The COVID-19 pandemic has been a global tragedy. It has
fundamentally and permanently altered the lives of individuals and
their families. It has forced organizations and institutions to
adapt in ways that they could not have anticipated. It has forced
the country to take drastic measures to meet the ever-changing
disruptions posed by a constantly evolving virus.
In March 2020, the pandemic became the focal point for Brown and
its students. Early that month, Brown President Christina H. Paxson
emailed all members of the Brown community informing them that
Brown was cancelling classes for the week of March 16 and would
resume in an online format beginning on March 30. President Paxson
added that if students resided in either on campus or Brown-owned
housing, they would have to vacate their residence by March 22.
Brown moved this date up to March 17 when it reported its first
COVID case among students.
The three Plaintiffs were all Brown undergraduates at the time.
Anna House was a senior in her last semester in March 2020. Ms.
House had received a Federal Pell Grant and therefore did not pay
tuition or fees for the semester out of pocket.
Plaintiff Amy Pham was a first-year student when the pandemic
struck. She received a partial scholarship for the Spring 2020
semester. Part of her cost of attending for this semester included
a $4,710 Room Charge and a $2,956 Board Charge, the latter of which
included a meal plan. Indeed, because Ms. Pham was the only
plaintiff to live on campus, she is the only plaintiff who paid a
Room and Board Charge along with a Health Services Fee and a
Student Activities Fee.
The final Plaintiff, Hyun Choi, was a sophomore during the
2019-2020 academic year. Because Mr. Choi did not live on campus,
Brown charged him a Nonresident Fee, along with the Health Services
Fee and Student Activities Fee. Mr. Choi is the only plaintiff who
remained at Brown after the start of the pandemic due to an
inability to safely return to his home overseas. And he is the only
plaintiff who used Brown's Health Services during the pandemic, as
he filled prescriptions many times. I
All three Plaintiffs allege that, because of their rapid and forced
departure from Brown's campus, they paid for services that Brown
did not deliver, thereby breaching contractual obligations.
III. Discussion & Conclusion
The basic principles of contract law govern the Plaintiffs' claims.
In Rhode Island, as is true in many other jurisdictions, "a student
and private university relationship is essentially contractual in
nature." The Court must, therefore, establish the landscape of
contract law to determine whether a reasonable jury could conclude
that there was a breach of contract. Contract law is a state law
doctrine. The Rhode Island Supreme Court has established that for
parties to form a valid contract, each must have the intent to be
bound by the terms of the agreement. Together with offer and
acceptance, there must be consideration.
If a party does not fulfill their contractual obligations, they
have breached the contract, and the nonbreaching party may sue for
the breach. To determine whether there has been a breach, the Court
must look to the contractual obligations, which are illustrated by
the plain language of the agreement. If the terms are found to be
unambiguous, however, the task of judicial construction is at an
end and the parties are bound by the plain and ordinary meaning of
the terms of the contract. Whether a party has substantially
performed or materially breached its contractual obligations is
usually a question of fact to be decided by the jury. However, if
the issue of materiality admits only one reasonable answer, then
the court should intervene and resolve the matter as a question of
law.
As shown, there are four fees and charges in question: Room and
Board Charges; the Student Activity Fee; the Health Services Fee,
and the Nonresident Fee.
Judge McConnell concludes that there is no question that the
exigencies raised by COVID-19 have proven difficult for both
students and educational institutions. The Plaintiffs contracted
with Brown to provide certain services in the Spring 2020 semester.
There is no evidence that Brown did not provide the services for
which the students contracted. Although the services took on a
different form than either party could have reasonably anticipated
at the start of the semester, there is no evidence that Brown
breached its contract with the Plaintiffs or was unduly enriched.
IV. Disposition
As a result, Judge McConnell granted the Defendant's Motion for
Summary Judgment as to all counts.
A full-text copy of the Court's March 22, 2022 Memorandum & Order
is available at https://tinyurl.com/a9c5um77 from Leagle.com.
CALIFORNIA PET: Has Made Unsolicited Calls, Flores Suit Alleges
---------------------------------------------------------------
MABEL FLORES, individually and on behalf of all others similarly
situated, Plaintiff v. CALIFORNIA PET PARTNERS, LLC d/b/a DR MARTY,
Defendant, Case No. CACE-22-004650 (Fla. Cir., Broward Cty., March
29, 2022) seeks to stop the Defendants' practice of making
unsolicited calls.
CALIFORNIA PET PARTNERS, LLC d/b/a DR MARTY is in engaged in the
business of selling dog and cat food products. [BN]
The Plaintiff is represented by:
Jeremy Dover, Esq.
DEMESMIN & DOVER, PLLC
1650 SE 17th Street, Suite 100
Fort Lauderdale, FL 33316
Telephone: (866) 954-6673
Facsimile: (954) 916-8499
Email: PIP-Pleadings@attorneysoftheinjured.com
Jdover@attorneysoftheinjured.com
CHANCELLOR SENIOR: Denial of Arbitration in McGraw Suit Affirmed
----------------------------------------------------------------
In the case, CHANCELLOR SENIOR MANAGEMENT, LTD.,
Defendant-Petitioner v. LOUISE MCGRAW, by and through her Daughter,
NANCY REUSCHEL as Power of Attorney, and CHARLOTTE RODGERS, by and
through her Daughter, LORETTA HOLCOMB as Power of Attorney, on
their own behalf and all others similarly situated,
Plaintiffs-Respondents, Case No. 20-0794 ( W. Va.), the Supreme
Court of Appeals of West Virginia affirmed the order entered by the
Circuit Court of Raleigh County, West Virginia, on Oct. 2, 2020,
denying the Petitioner's motion to compel arbitration.
I. Introduction
Petitioner Chancellor appeals the circuit court's order denying its
motion to compel arbitration. The Petitioner's only assignment of
error is that the circuit court refused to enforce a clear and
comprehensive written agreement to arbitrate all disputes, which
agreement is contained in the "Assisted Living Residency
Agreement(s) The Villages at Greystone Senior Living Community
(West Virginia)" signed by the respondents Nancy Reuschel and
Loretta Holcomb on behalf of their mothers, the respondents Louise
McGraw and Charlotte Rodgers, respectively.
II. Background
On March 27, 2013, Ms. McGraw was admitted to The Villages at
Greystone, an assisted living facility located in Beckley, West
Virginia. A Residency Agreement was executed on behalf of Ms.
McGraw by her daughter, Ms. Reuschel. Likewise, on July 4, 2014,
Ms. Rodgers was admitted to The Greystone under a Residency
Agreement executed by her daughter, Ms. Holcomb. Both Residency
Agreements contained the following arbitration provision.
The American Health Lawyers Association (AHLA) "Rules of Procedure
for Consumer Arbitration," applicable to claims received on or
after Sept. 15, 2019, set forth certain requirements that must be
met in order for a claim to be arbitrated in accordance with the
AHLA Rules.
On Nov. 29, 2016, the Respondents, Louise McGraw, by and through
her Daughter, Nancy Reuschel, as power of attorney, and Charlotte
Rodgers, by and through her Daughter, Loretta Holcomb, as power of
attorney, on their own behalf and all others similarly situated,
filed an amended complaint against the petitioner. They alleged
that the petitioner defrauded their respective mothers by making
misrepresentations and misleading statements, and concealing
material facts, all of which led them to believe the Petitioner
would assess its residents' needs and provide staffing sufficient
to meet those needs. The amended complaint alleged that the
Petitioner's actions or inactions violated the West Virginia
Consumer Credit and Protection Act ("WVCCPA").
The Petitioner answered the amended complaint on Jan. 24, 2017,
raising 29 separate defenses, none of which involved a demand for
arbitration. Thereafter, it filed pleadings and motions, including
a motion to amend its amended answer, again without any mention of
the arbitration provision found in the Residency Agreements. Not
until July 11, 2017, when it again sought leave to amend its
answer, did the petitioner seek to add arbitration as a defense to
the Respondents' claims. By order entered March 11, 2019, the
circuit court allowed the amended answer to be filed.
On June 5, 2019 -- more than two and one-half years after the
filing of the original complaint -- the Petitioner moved to compel
arbitration based upon the arbitration provision set forth in the
Residency Agreements. In response thereto, the Respondents filed a
"Motion for Partial Summary Judgment Concerning Arbitration of
Plaintiffs' Claims and Memorandum of Law in Support," seeking a
determination that the arbitration provision was invalid as a
matter of law because it did not comply with the rules the
petitioner incorporated into the agreement, the application of
which would result in dismissal of any arbitration.
By order entered Oct. 2, 2020, the circuit court found that while
the claims asserted by the Respondents would otherwise be subject
to arbitration, the arbitration provision could not be enforced
because it was contained in the admissions documentation, i.e., the
Residency Agreements, rather than in a separate document, and
therefore the agreement could not be enforced as written. In short,
the court found that the petitioner "made a prima facie showing of
the existence of an arbitration agreement. The Respondents,
however, have met their burden of proof by demonstrating that the
subject agreement cannot be enforced as written because it does not
comply with its own stated standards." As a result, the court
denied the Petitioner's motion to compel arbitration. It is from
this order that the Petitioner appeals.
III. Discussion
The sole issue before the Court is whether the circuit court erred
in refusing to enforce the arbitration provision contained in the
Residency Agreements. The Petitioner contends that the arbitration
provision does not require the AHLA to administer the arbitration
because it only requires that the arbitration be conducted "in
accordance with" the AHLA Rules of Procedure for Consumer
Arbitration. According to the Petitioner, Rule 2.1 of the AHLA
"only imposes certain requirements that an arbitration agreement
must meet in order for the AHLA to administer the arbitration. It
does not create a standard of enforceability of the arbitration
agreement."
The Petitioner further argues that the language "in accordance
with" means that the requirements of Rule 2.1 are not integrated
into the arbitration agreement. Instead, pursuant to AHLA Rule
2.4(b) which the petitioner contends was ignored by the circuit
court, any determination that the arbitration agreement does not
satisfy the requirements of the Rule 2.1, "shall not be considered
a determination on the validity of the arbitration agreement, and
the parties may arbitrate in another forum if their agreement so
provides or if they otherwise agree."
Thus, the Petitioner claims that Rule 2.1 is not a "procedural
rule" but is merely a rule relating to the administration of
arbitration. In other words, it argues that Rule 2.1 "has
absolutely no bearing on the enforceability of an agreement to
arbitrate, and represents nothing more than an internal operating
administrative requirement."
The Supreme Court of Appeals disagrees. It finds that the
Petitioner's logic and piecemeal selection of only certain words
from both the arbitration agreement and the AHLA Rules are both
misguided and misleading. Inasmuch as the parties agree that the
arbitration provision is unambiguous, basic principles of contract
construction, require the Supreme Court of Appeals to give the
phrase "in accordance with" its ordinary meaning, which is: "in a
way that agrees with or follows." In accordance with,
Merriam-Webster, https://merriam-webster.com, (last visited
February 21, 2022).
Hence, the language "in accordance with the American Health Lawyers
Association ("AHLA") Alternative Dispute Resolution Service Rules
of Procedure for Arbitration," means that the arbitration will be
conducted in a way that agrees with or follows the AHLA Rules. In
this regard, pursuant to the arbitration provision found in the
Residency Agreements, an arbitration must follow or agree with AHLA
Rule 2.1, "Requirements."
Succinctly stated, the AHLA is the only arbitrator designated in
the arbitration provision; the provision requires the parties to
pay a filing fee to the AHLA. The Petitioner's contention that the
arbitration can occur in a different forum simply is not
contemplated by the arbitration provision. Therefore, the circuit
court did not err in its determination that the arbitration
agreement "cannot be enforced as written because it does not comply
with its own stated standards."
IV. Conclusion
For the foregoing reasons, the circuit court's order denying the
Petitioner's motion to compel arbitration is affirmed.
A full-text copy of the Court's March 22, 2022 Order is available
at https://tinyurl.com/ytzfcx2k from Leagle.com.
Avrum Levicoff, Esq., The Levicoff Law Firm, P.C., in Pittsburgh,
Pennsylvania, Counsel for Petitioner.
Debra Tedeschi Varner, Esq. -- dtvarner@vv-wvlaw.com -- Varner &
Van Volkenburg, PLLC, in Clarksburg, West Virginia; Christa L.
Collins, Esq. -- christa@clcclassactionlaw.com -- Collins Law PL,
in St. Petersburg, Florida, Jonathan R. Mani, Esq., Mani, Ellis &
Layne, PLLC, in Charleston, West Virginia, Martha Geron Gadd, Esq.
-- gadd@healthlaw.org -- Elizabeth Aniskevich, Esq., AARP
Foundation, in Washington, D.C., Counsel for the Respondents.
CHOWNOW INC: Martinez Files ADA Suit in E.D. New York
-----------------------------------------------------
A class action lawsuit has been filed against ChowNow, Inc. The
case is styled as Pedro Martinez, individually and as the
representative of a class of similarly situated persons v. ChowNow,
Inc., Case No. 1:22-cv-01735 (E.D.N.Y., March 29, 2022).
The lawsuit is brought over alleged violation of the Americans with
Disabilities Act.
ChowNow -- https://get.chownow.com/ -- is an online food ordering
platform that connects customers with local restaurants.[BN]
The Plaintiff is represented by:
Dan Shaked, Esq.
SHAKED LAW GROUP, P.C.
14 Harwood Court, Suite 415
Scarsdale, NY 10583
Phone: (917) 373-9128
Email: shakedlawgroup@gmail.com
CLEARVIEW AI: Macy's' Bid to Certify Interlocutory Appeal Denied
----------------------------------------------------------------
In the case, In re Clearview AI, Inc. Consumer Privacy Litig., Case
No. 21-cv-0135 (N.D. Ill.), Judge Sharon Johnson Coleman of the
U.S. District Court for the Northern District of Illinois, Eastern
Division, denied Macy's Retail Holdings, LLC's motion to certify an
interlocutory appeal.
Macy's moved to certify an interlocutory appeal under 28 U.S.C.
Section 1292(b) challenging certain aspects of the Court's Jan. 27,
2022 ruling.
I. Introduction
The Plaintiffs brought a first amended consolidated class action
complaint in the multi-district litigation alleging claims against
defendant retailer Macy's under the Illinois Biometric Information
Privacy Act, 740 ILCS 14/1, et seq. ("BIPA"), along with claims
under California and New York law.
On Jan. 27, 2022, the Court granted in part and denied in part
Macy's motion to dismiss brought pursuant to Federal Rules of Civil
Procedure 12(b)(1) and 12(b)(6).
Before the Court is Macy's motion to certify an interlocutory
appeal under 28 U.S.C. Section 1292(b) challenging certain aspects
of the Court's January 27 ruling.
II. Background
The Plaintiffs allege that the Clearview Defendants covertly
scraped billions of photographs of facial images from the internet
and then used artificial intelligence algorithms to scan the face
geometry of each individual depicted in the photographs to harvest
the individuals' unique biometric identifiers and corresponding
biometric information. The Clearview Defendants then created a
searchable database containing the Plaintiffs' biometrics that
allowed users to identify unknown individuals by uploading a
photograph to the database.
Defendant Macy's is a private corporation that purchased access to
the Clearview database and the biometrics contained therein to
identify people whose images appeared in surveillance camera
footage from Macy's retail stores.
The Plaintiffs allege that Macy's is part of the Clearview Client
Class, which they defined as follows: "All non-governmental,
private entities -- including publicly-traded companies -- who
purchased access to, or otherwise obtained, the Biometric Database
and then utilized the database to run biometric searches at a time
when the Biometrics of one or more of the named Plaintiffs had
already been captured, collected or obtained, and subsequently
stored, by the Clearview Defendants."
The Plaintiffs contend that there are at least 200 companies in the
Clearview Client Class.
In their first amended consolidated complaint, the Plaintiffs bring
a BIPA claim against Macy's under 740 ILCS 14/15(b), which
prohibits private entities from collecting, capturing, purchasing,
receiving through trade, or otherwise obtaining a person's
biometric identifiers or information without first providing notice
and consent. They also bring a BIPA claim under 740 ILCS 14/15(c),
which prohibits private entities from selling, leasing, trading, or
profiting from a person's biometric identifiers or information.
Further, the Plaintiffs alleged statutory and common law claims
against Macy's under California and New York law.
III. Discussion
In the present Section 1292(b) motion, Macy's asks the Court to
certify three questions, the first one concerning Article III
standing: "Whether, in light of the United States Supreme Court's
decision in TransUnion, allegations of bare statutory violations of
Illinois' Biometric Information Privacy Act, unaccompanied by
allegations of actual harm, confer Article III standing."
In the January 2022 ruling, the Court concluded that there were
sufficient allegations of actual harm, unlike Macy's interlocutory
question that there was no actual harm. Macy's first question thus
distorts the Court's application of the law to the facts. There is
no contestable question of law to appeal because under Seventh
Circuit precedent, a plaintiff has sufficiently alleged a BIPA
15(b) claim based on the harm associated with the invasion of
plaintiff's private information. Therefore, Judge Coleman denies
Macy's motion in this respect.
Next, Macy's seeks to certify the following question for
interlocutory appeal: "Whether, as a matter of law, a company's use
of a biometric database for loss prevention suffices to allege
'profit' under Section 15(c) of BIPA."
Judge Coleman opines that Macy's second question does not involve a
question of law as required under Section 1292(b) because the Court
did not construe the statutory meaning of "profit" under BIPA
15(c), which would have amounted to a question of law for Section
1292(b) purposes. Rather, the Court addressed the parties'
arguments whether the Plaintiffs had plausibly alleged Macy's
profited from the Plaintiffs' biometric information.
To explain, in the January 2022 ruling, the Court concluded that
the Plaintiffs plausibly alleged that Macy's used their biometric
information for its own business purposes and profited from its
use. From these allegations, the Court stated that "it is
reasonable to infer that the Plaintiffs' biometric information was
necessary to Macy's loss prevention business model and that this
biometric information generated profits by reducing the number of
stolen goods." Macy's disagreement with how the Court applied the
facts as alleged to BIPA 15(c) is not grounds for an interlocutory
appeal. Judge Coleman denies Macy's motion in this respect.
Last, Macy's asks the Court to certify a question in relation to
the Plaintiffs' California and New York claims, namely, "whether
California and New York statutes and common law protect the same
set of rights secured by BIPA." Specifically, Macy's contends
plaintiffs are trying to extend BIPA to other states.
In making this argument, Macy's ignores the Court's consideration
of the alleged facts in the context of the California's Unfair
Competition Law, California's commercial misappropriation of
likeness statute, the California common law right to publicity, and
the right to privacy under the California Constitution, Judge
Coleman finds. Also, the Court considered the well-pleaded
allegations in the context of New York's Civil Rights Act Section
51.
At no point did the Court consider or conclude that the Plaintiffs'
California and New York claims protected the same set of rights
secured by BIPA -- nor did the Plaintiffs make this argument in
their briefs. As such, Macy's contention that the Plaintiffs' New
York and California claims are really BIPA claims incognito is not
a question of law for interlocutory appeal.
IV. Conclusion
For the foregoing reasons, Judge Coleman denied Macy's motion to
certify an interlocutory appeal under 28 U.S.C. Section 1292(b).
A full-text copy of the Court's March 18, 2022 Memorandum Opinion &
Order is available at https://tinyurl.com/mr47av66 from
Leagle.com.
COMMUNICATIONS TEST: Cortes Suit Moved to San Bernardino Super. Ct.
-------------------------------------------------------------------
The U.S. District Court for the Central District of California
remands the lawsuit styled YAZMIN CORTES, individually, on a
representative basis, and on behalf of all others similarly
situated, Plaintiff v. COMMUNICATIONS TEST DESIGN, INC., a
Pennsylvania Corporation, and DOES 1 through 20, inclusive,
Defendants, Case No. 5:21-cv-01001-AB (KKx) (C.D. Cal.), to the
Superior Court of the State of California for the County of San
Bernardino.
The Court has considered the Parties' Joint Stipulation to Dismiss
Plaintiff's 1st-7th Causes of Action and Remand the Action to State
Court.
Accordingly, District Judge Andre Birotte, Jr., ruled that:
1. The Plaintiff's first, second, third, fourth, fifth, sixth,
and seventh Class Action causes of action are dismissed;
2. All dates presently all on calendar for this matter are
vacated; and
3. The Plaintiff's remaining causes of action are remanded to
the San Bernardino Superior Court.
A full-text copy of the Court's Order dated March 17, 2022, is
available at https://tinyurl.com/2p8az8nt from Leagle.com.
CONSOLIDATED SERVICES: Fails to Pay Proper Wages, Don Suit Says
---------------------------------------------------------------
PRADEEP MATARAGE DON, individually and on behalf of all others
similarly situated, Plaintiff v. CONSOLIDATED SERVICES OF NORTH
AMERICA, LLC; DYLAN OHANA; and IDAN OHANA, Defendants, Case No.
4:22-cv-01021 (S.D. Tex., March 29, 2022) seeks to recover from the
Defendants unpaid wages and overtime compensation, interest,
liquidated damages, attorneys' fees, and costs under the Fair Labor
Standards Act.
Plaintiff Don was employed by the Defendants as HVAC Service
Technician.
CONSOLIDATED SERVICES OF NORTH AMERICA, LLC specializes in HVAC,
refrigeration, plumbing and electrical services. [BN]
The Plaintiff is represented by:
Melissa Moore, Esq.
MOORE & ASSOCIATES
440 Louisiana Street, Suite 1110
Houston, TX 77002-1063
Telephone: (713) 222-6775
Facsimile: (713) 222-6739
Email: melissa@mooreandassociates.net
curt@mooreandassociates.net
DALE PHARMACY: New York Court Denies Bid to Dismiss Katz Suit
-------------------------------------------------------------
In the case, BRUCE E. KATZ, Plaintiff v. DALE PHARMACY & SURGICAL,
INC., Defendant, Case No. 20-CV-1876(WFK)(TAM)(E.D.N.Y.), Judge
William F. Kuntz, II, of the U.S. District Court for the Eastern
District of New York denies the Defendant's motion to dismiss.
On March 2, 2022, Magistrate Judge Taryn A. Merkl issued a Report
and Recommendation ("R&R") in the action. The R&R recommends the
Court denies the Defendant's motion to dismiss the Complaint.
In relevant part, the R&R stated that the Defendant's contention
that a rejected Rule 68 offer of judgment makes the Plaintiff's
case moot is wholly without merit. As the Plaintiff points out, the
United States Supreme Court has expressly held that an unaccepted
settlement offer or offer of judgment does not moot a plaintiff's
case.
The R&R also stated that the Plaintiff has plausibly alleged that
there was no established business relationship between the parties.
Accordingly, the Plaintiff has sufficiently stated a claim under
the TCPA, and the Court therefore recommended denying the
Defendant's Rule 12(b)(6) motion.
The R&R further stated that it would be premature to dismiss the
Plaintiff's class action allegations, particularly given that no
motion for class certification has been filed. The Court
respectfully recommended denying the Defendant's motion to dismiss
the Plaintiff's class action allegations at this stage, without
prejudice to its right to oppose class certification on these same
grounds.
The parties did not file any objections to the R&R, which were due
by March 16, 2022.
Judge Kuntz reviews the R&R for clear error when no objections have
been filed. He finds no such error. He, therefore, adopts the R&R
in its entirety and denies the Defendant's motion to dismiss.
A full-text copy of the Court's March 22, 2022 Order is available
at https://tinyurl.com/ycksva9k from Leagle.com.
DREYER'S GRAND: S.D. Illinois Dismisses Zurliene Consumer Suit
--------------------------------------------------------------
The U.S. District Court for the Southern District of Illinois
grants the Defendant's motion to dismiss the lawsuit styled
PATRICIA ZURLIENE, individually and on behalf of all others
similarly situated, Plaintiff v. DREYER'S GRAND ICE CREAM, INC.,
Defendant, Case No. 3:21-cv-747-DWD (S.D. Ill.).
Plaintiff Zurliene brings the putative class action against
Defendant Dreyer's, alleging that it deceptively labeled one of its
food products. Zurliene brings a claim under the Illinois Consumer
Fraud and Deceptive Business Practices Act, 815 ILCS 505/1, et seq.
("ICFA") and claims for breach of warranty, negligent
misrepresentation, fraud, and unjust enrichment.
The Defendant filed a motion to dismiss the complaint for failure
to state a claim.
I. Factual Background
The Defendant manufactures, labels, markets, and sells ice cream
bars labeled "Vanilla Milk Chocolate Ice Cream Bars" under its
Haagen-Dazs brand. According to the ice cream bars' front label,
the bars are dipped in, then drizzled in rich milk chocolate.
Ms. Zurliene claims that the reference to "rich milk chocolate" on
the front label is a misleading half-truth because the ice cream
bars' chocolate coating includes coconut oil. Specifically, she
claims that the adjective "rich" connotes a smooth mouthfeel but
that chocolate substitutes, such as coconut oil, provide a waxy and
oily mouthfeel. She also claims that she understood the term "milk
chocolate" to describe a product made from the cacao bean without
chocolate substitutes, such as coconut oil. She alleges that had
she not been misled by the front label, she would not have
purchased the ice cream bars or would have paid less for them.
II. Motion to Dismiss Standard
To survive a motion to dismiss brought pursuant to Rule 12(b)(6), a
complaint must include enough factual content to give the opposing
party notice of what the claim is and the grounds upon which it
rests. See Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555
(2007); Ashcroft v. Iqbal, 556 U.S. 662, 698 (2009).
III. Analysis
To bring an ICFA claim, Zurliene must allege conduct that plausibly
could deceive a reasonable consumer in light of all the information
available to the consumer. This standard requires a practical and
fact-intensive approach to consumer behavior. Thus, how reasonable
consumers would interpret an ambiguous food label is typically a
question of fact that should not be decided on the pleadings.
The Court assumes without deciding that Zurliene has stated a
plausible ICFA claim. However, Zurliene's ICFA claim is preempted
by the Food, Drug, and Cosmetic Act ("FDCA"), which prohibits
states from directly or indirectly establishing under any authority
any requirement for a food, which is the subject of a standard of
identity that is not identical to such standard of identity or that
is not identical to the requirement of Section 343(g) of the FDCA.
Ms. Zurliene agrees with the Defendant that this provision of the
FDCA prohibits a consumer from bringing state law claims that would
impose labeling requirements inconsistent with federal
requirements. She alleges that FDA regulations, specifically 21
C.F.R. Section 163.155(c), require "that where a food has some
chocolate but is supplemented by a non-de minimis amount of
chocolate substitutes, it should be disclosed on the front label as
'milk chocolate and vegetable oil coating.'" She argues that this
is exactly the labeling requirement she is seeking to impose on the
Defendant.
However, as the Defendant points out, Zurliene has misstated the
relevant FDA regulation, District Judge David W. Dugan finds. The
parties agree that the ice cream bars' coating is the milk
chocolate and vegetable fat coating described in 21 C.F.R. Section
163.155.
Contrary to Zurliene's representations, neither the name nor the
ingredients of the product "milk chocolate and vegetable fat
coating" must be stated on the ice cream bars' front label, Judge
Dugan opines. The front label must include "a statement of the
identity of the commodity."
In the case, the commodity is not milk chocolate and vegetable fat
coating, but ice cream bars, of which milk chocolate and vegetable
fat coating are ingredients. The "principal display panel" is the
front of the package, and the "information panel" is the "part of
the label immediately contiguous and to the light of the principal
display panel." Thus, the FDA regulations require the Defendant to
list the ingredients of mill: chocolate and vegetable fat coating
(specifically, coconut oil) either on the front of the package or
on the side of the package where the ingredients are normally
listed.
Ms. Zurliene concedes that coconut oil is listed among the other
ingredients but argues that it should also be listed on the front
of the package. This requirement would be one step beyond the FDA
regulations and is, therefore, preempted by 21 U.S.C. Section
343-1(a)(1), Judge Dugan opines. Zurliene's remaining claims rely
on the same theory of deception and would impose the same labeling
requirement. Therefore, all of Zurliene's claims are due to be
dismissed.
IV. Conclusion
For these reasons, the Defendant's motion to dismiss is granted,
and the Plaintiff's complaint is dismissed. The Plaintiff may file
an amended complaint within 14 days of entry of this Order. Failure
to file an amended complaint will result in the final dismissal of
the case.
A full-text copy of the Court's Memorandum & Order dated March 17,
2022, is available at https://tinyurl.com/2p98wzfa from
Leagle.com.
FACEBOOK INC: Ninth Cir. Affirms $97.5MM Counsel Fee in BIPA Suit
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In the lawsuit entitled In re: FACEBOOK BIOMETRIC INFORMATION
PRIVACY LITIGATION. NIMESH PATEL, et al., Plaintiffs-Appellees, and
FACEBOOK, INC., Defendant-Appellee v. DAWN FRANKFOTHER; CATHY
FLANAGAN, Objectors-Appellants, Case No. 21-15553 (9th Cir.), the
United States Court of Appeals for the Ninth Circuit affirms the
order awarding $97.5 million in attorneys' fees.
The appeal stems from a class-action suit against Facebook for
allegedly violating the Illinois Biometric Information Privacy Act
for collecting user data without permission. The district court
rejected a $550 million settlement before approving a $650 million
settlement resolving the class claims, then granted Class Counsel a
$97.5 million fee out of the settlement. Two class members objected
to the attorneys' fees award and appealed.
1. The district court did not abuse its discretion in awarding
Class Counsel $97.5 million in fees, the Ninth Circuit holds. The
Panel explains that courts have "an independent obligation" to
ensure that attorneys' fees awards, like the settlement itself, are
reasonable, citing In re Bluetooth Headset Prods. Liab. Litig., 654
F.3d 935, 941 (9th Cir. 2011).
The Ninth Circuit notes that the district court adequately
explained why this was a reasonable fee on the facts of this case:
"class counsel achieved an excellent result for the class" and the
settlement "is real money by any standard and sets a new high bar
for privacy-related settlements, . . . particularly in light of how
hard fought this case was and the substantial factual disputes that
remained for trial."
The district court also cross-checked the reasonableness of this
amount using the lodestar method. The lodestar method calculates a
fee award by multiplying the number of hours the prevailing party
reasonably expended on the litigation (as supported by adequate
documentation) by a reasonable hourly rate for the region and for
the experience of the lawyer. Lodestar multipliers tend to increase
as the size of the class's fund increases and are reasonable based
on the risks trial would have presented.
The Ninth Circuit concludes that the district court did not abuse
its discretion in awarding attorneys' fees of $97.5 million.
2. Next, the Ninth Circuit holds that the Appellants waived their
argument against attorneys' fees for lobbying activities. An
argument is waived if it was "not presented or developed before the
district court," the Panel explains, citing In re Mercury
Interactive Corp. Sec. Litig., 618 F.3d 988, 992 (9th Cir. 2010).
The Appellants made a perfunctory, one-paragraph argument to the
district court that lobbying activities are not properly included
in a request for fees to be paid by a Rule 23(b)(3) damages class.
The Ninth Circuit points out that this is not enough to raise an
argument sufficiently for the trial court to rule on it, nor is the
record adequately developed to permit this Court to reach the issue
in its discretion. To the extent that the Appellants did not waive
the general argument that lobbying fees should not be included in
the lodestar calculation, the district court did not abuse its
discretion because its primary calculation tool was the
percentage-of-recovery method.
3. Finally, the Ninth Circuit holds that the $5,000 incentive
awards to the Named Plaintiffs were not an abuse of discretion. The
Ninth Circuit regularly upholds incentive awards of this size, see,
e.g., In re Online DVD-Rental Antitrust Litig., 779 F.3d 934,
947-48 (9th Cir. 2015), and the Appellants do not argue that "the
reasoning or theory of" these prior Ninth Circuit cases are
"clearly irreconcilable with the reasoning or theory of intervening
higher authority" (Miller v. Gammie, 335 F.3d 889, 893 (9th Cir.
2003) (en banc)).
Affirmed.
A full-text copy of the Court's Memorandum dated March 17, 2022, is
available at https://tinyurl.com/2s428u3c from Leagle.com.
FLUENT HOME: Loses Bid to Compel Arbitration and Stay Stover Suit
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In the lawsuit styled HILMA STOVER, on behalf of herself and a
class of similarly situated persons, Plaintiff v. FLUENT HOME, LLC,
and THE BANK OF MISSOURI, doing business as FORTIVA RETAIL CREDIT,
Defendants, Case No. 5:21-cv-00191 (S.D.W. Va.), Judge Frank W.
Volk of the U.S. District Court for the Southern District of West
Virginia, Beckley, issued a Memorandum Opinion and Order:
-- denying without prejudice Fluent Home LLC's Motion to
Compel Arbitration and to Stay Proceedings Pending
Arbitration;
-- granting Plaintiff Hilma Stover's Motion to File a
Surreply.
I.
Fluent is a home security sales company that engages in
door-to-door solicitations. On Oct. 12, 2020, in the midst of the
Pandemic, Larry Araiza, an unmasked Fluent salesman, approached Ms.
Stover in her home. Ms. Stover is an 80-year-old woman. Mr. Araiza
offered a Fluent home security system for sale, and installation
efforts commenced.
Ms. Stover contends that Mr. Araiza did not provide her with any
documents, much less one including an arbitration clause. She notes
she was not asked to read or sign a paper document. She asserts she
was not allowed to accept, reject, or modify terms of the
Residential Agreement (the "Agreement") Mr. Araiza allegedly
presented to her. She additionally notes that the word
"arbitration" was never said to her or shown to her either on an
electronic device or a paper document.
In its reply, Fluent maintains that Ms. Stover was sent a copy of
the Agreement, including the arbitration clause, to her email and
that she electronically signed the document through DocuSign. Ms.
Stover challenges the DocuSign assertion.
Moreover, Ms. Stover has asked Fluent to produce a copy of the
"certificate of completion" generated by DocuSign. What she
received was a document that did not have the DocuSign header, but
that also "makes no mention of arbitration, solely discusses
Fluent's representations as to pre-existing security systems, and
appears to be electronically signed using an electronic signature
program offered by Adobe, which does not contain identifying
information as to the signatory such as that contained in a
DocuSign Envelope ID."
During the installation of the security system, Ms. Stover became
dissatisfied and instructed the Fluent employee to stop work. She
attempted to cancel the sale and return the equipment to Fluent.
She notified Fluent she would keep the equipment in her home until
Fluent retrieved it. Fluent failed to do so. Ms. Stover then began
receiving collection letters demanding payment; she learned Fluent
had arranged credit card financing for the security system.
Fluent asserts the Agreement allegedly signed electronically by Ms.
Stover included a comprehensive arbitration provision requiring the
submission of any dispute to arbitration in accordance with the
laws of Utah.
Fluent also asserts that, pursuant to its policies and procedures,
Ms. Stover received copies of all documents evidencing the
transaction, specifically the Agreement, which includes specific
arbitration language. According to Fluent, in the events leading up
to the Plaintiff's signing of the Agreement, Mr. Araiza detailed
all appropriate disclosures through the presentation of an
interactive company-mandated video.
Ms. Stover instituted this action, alleging violations of the Fair
Credit Reporting Act and the Truth in Lending Act. Fluent now seeks
to compel arbitration pursuant to the Agreement. In Count Five of
the Complaint, Ms. Stover alleges a number of irregularities
supporting her assertion that the sales contracts were formed
without a true meeting of the minds.
II.
The Federal Arbitration Act ("FAA") provides that written
agreements to arbitrate controversies arising out of an existing
contract will be valid, irrevocable, and enforceable, save upon
such grounds as exist at law or in equity for the revocation of any
contract.
In reviewing a motion to compel arbitration, the Court applies "a
standard such as the summary judgment test," construing all facts
and reasonable inferences in the light most favorable to the
non-moving party.
III.
The Court first considers the parties' positions on the
applicability of the FAA. Fluent contends that the language of the
Agreement requires Utah law to be applied, not the FAA. The
Agreement states, in relevant part, "The arbitration shall not be
conducted pursuant to the Federal Arbitration Act but shall be
conducted in accordance with the arbitration laws of the State of
Utah."
Ms. Stover reads the Agreement to require Utah law be applied only
to the arbitration. Moreover, she asserts that the "arbitration
laws of the state of Utah" do not include substantive Utah contract
law.
Judge Volk holds that Ms. Stover is correct. The language of the
clause states, "The arbitration . . . shall be conducted in
accordance with the arbitration laws of the State of Utah." At this
stage in the proceeding, there is no ongoing arbitration that would
trigger this requirement. Accordingly, the FAA and West Virginia
contract law govern.
Turning to the question of enforceability, Fluent, as noted, must
show (1) there is a dispute between the parties, (2) there is a
written agreement that includes an arbitration provision which
purports to cover the dispute, (3) the transaction relates to
interstate or foreign commerce, and (4) Ms. Stover has refused to
arbitrate the dispute, Adkins v. Lab. Ready, Inc., 303 F.3d 496,
500-01 (4th Cir. 2002) (quoting Whiteside v. Teltech Corp., 940
F.2d 99, 102 (4th Cir. 1992)).
The second Adkins requirement that there "is a written agreement
that includes an arbitration provision which purports to cover the
dispute" is at issue. As noted, Fluent asserts the Agreement
contains a valid arbitration clause, while Ms. Stover asserts the
presentment of the Agreement did "not allow for a meeting of the
minds."
Based upon the discussion of the factual record, there is a genuine
issue of material fact regarding the existence of a binding
agreement to arbitrate, Judge Volk notes. Accordingly, the Court
concludes the issue must be resolved by a summary trial pursuant to
9 U.S.C. Section 4. The Court of Appeals has noted that the
determination of appropriate pretrial procedures is reserved to the
able lawyers for the parties and the sound discretion of the
district court.
The Court will, thus, set a pretrial conference at which those
procedures will be established.
The parties are ordered to consult respecting proposed procedures
on or before April 15, 2022. Counsel should discuss, inter alia,
whether minimal discovery is necessary and the timing of the
required summary trial. The parties are additionally ORDERED to
file no later than April 22, 2022, a joint report setting forth the
procedures agreed upon and any remaining disagreements.
IV.
The Motion to Compel Arbitration and to Stay Proceedings Pending
Arbitration is denied without prejudice. The pretrial conference is
scheduled for May 6, 2022, at 11:00 a.m. in Beckley, West
Virginia.
The Court directs the Clerk to transmit a copy of this written
opinion and order to counsel of record and any unrepresented
party.
A full-text copy of the Court's Memorandum Opinion and Order dated
March 17, 2022, is available at https://tinyurl.com/5hdm34jk from
Leagle.com.
FORD MOTOR: Court Grants Bid to Compel Arbitration in Lyman Suit
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In the case, DAVID LYMAN, MARC BAUS, VINCENT BRADY, DENNIS GABEL,
GORDON McCARDY, JASON PIERCE, JAMES RITTMANIC, MICHELLE SHAWLEY,
RICHARD SHAWLEY, THERMON STACY, RONNIE SWINDELL, TIMOTHY THUERING,
JUDSON WESSBECHER, and JOHN WILEY, on behalf of themselves and all
others similarly situated, Plaintiffs v. FORD MOTOR COMPANY,
Defendant, Case No. 21-cv-10024 (E.D. Mich.), Judge Gershwin A.
Drain of the U.S. District Court for the Eastern District of
Michigan, Southern Division, issued an Opinion and Order:
a. granting the Defendant's Motion to Compel Arbitration of
Certain Plaintiffs' Claims;
b. granting in part and denying in part the Defendant's Motion
to Dismiss Plaintiffs' First Amended Class Action Complaint
("FACC"); and
c. granting the Plaintiffs' Amended Motion for the Appointment
of Interim Class Counsel.
I. Background
Plaintiffs David Lyman (New York), Marc Baus (New Jersey), Vincent
Brady (California), Dennis Gabel (Texas), Gordon McCardy
(Michigan), Jason Pierce (Florida), James Rittmanic (Illinois),
Michelle and Richard Shawley (Pennsylvania), Thermon Stacy (West
Virginia), Ronnie Swindell (Florida), Timothy Thuering (Ohio),
Judson Wessbecher (Illinois), John Wiley (Florida) and members of
the classes they propose to represent purchased or leased Ford
F-150 pickup trucks, beginning with Model Year 2018. Ford's
F-Series truck has been the best-selling vehicle in the United
States for 37 years. The F-Series maintains a dominant market
share, representing nearly one-third of all pickup trucks sold in
the United States.
In 2018, Ford debuted its new and enhanced F-150 line equipped with
a 5.0L engine named the "Coyote" by Ford. The 5.0L engine is a
modular V-8 piston engine with Port Fuel Injection and Direct Fuel
Injection, four-valve per cylinder, dual overhead cylinder heads
cast, forged steel crankshaft and a high 12:0:1.0 compression
ratio. Ford advertised the F-150's 5.0L engine as "reengineered,
upgraded, improved, the most advanced F-150 engine lineup ever."
The "enhanced" 5.0L engine was highlighted as having increased
horsepower and torque and improved fuel efficiency. The 2018 F-150
product brochure promised advanced, durable materials that
inhibited corrosion and "optimized fuel usage during city driving."
Similarly, the 2019 F-150 marketing brochure emphasizes the brutal
testing regimen and 10 million miles of customer equivalent miles
of testing, "engineered for the long haul."
The Plaintiffs allege the 5.0L engine's piston ring assembly and
cylinder coating are defective in the Class Vehicles and engine oil
is consumed at an excessive rate ("Oil Consumption Defect"). As a
result, they claim the engine is not capable of maintaining the
proper level of engine oil based on the care and maintenance
instructions set forth in the Owner's Manual. Instead, the
Plaintiffs must monitor the oil level more often than what is
recommended by the Manual and add more oil to the engine more
frequently than what is usually required to keep an engine properly
lubricated. The Plaintiffs claim the Oil Consumption Defect is a
serious issue for vehicle longevity and safety. It can cause
premature wear on an engine, lead to stalling and even engine
failure -- increasing the risk of accident and injury.
The Plaintiffs maintain Ford has known about the Oil Consumption
Defect for years because of numerous customer complaints,
information from dealers, complaints from the National Highway
Traffic Safety Administration ("NHTSA"), and its own internal
warranty and service records describing the excessive oil
consumption problem. In many instances Ford has refused to disclose
the defect when a Class Vehicle is brought in for service because
it is displaying symptoms consistent with excessive oil
consumption. Ford also refuses to adequately address the needed
repairs. It either ignores the defect or masks it until costly
repairs are needed, sometimes past the warranty period. The
Plaintiffs claim they would not have purchased or leased the Class
Vehicles or would have paid substantially less to do so if Ford had
disclosed the Oil Consumption Defect.
Five of the named Plaintiffs in the FACC purchased their Class
Vehicles through financing from non-party Ford Motor Credit Co.
("FMCC"). Plaintiffs Gabel (Texas), McCardy (Michigan), Pierce
(Florida), Rittmanic (Illinois), and Wessbecher (Illinois) each
signed a Motor Vehicle Retail Installment Sales Contract ("RISC")
containing an arbitration provision in connection with the purchase
of the Class Vehicles.
Presently before the Court is the Defendant Ford's Motion to Compel
Arbitration of Certain Plaintiffs' Claims and the Defendant's
Motion to Dismiss Plaintiffs' First Amended Class Action Complaint
("FACC"). These matters are fully briefed, and a hearing was held
on March 16, 2022.
Also, before the Court is the Plaintiffs' Amended Motion for the
Appointment of Interim Class Counsel. Ford has indicated it will
not take a position at this time on the Plaintiffs' Motion for the
Appointment of Interim Class Counsel. Upon review of the
Plaintiffs' present motion, the Court concludes that oral argument
will not aid in the disposition of the matter.
II. Analysis
A. Defendant's Motion to Compel Arbitration of Certain Plaintiffs'
Claims
The Defendant seeks an order compelling the five named Plaintiffs
who signed RISCs to submit their claims to binding arbitration. It
primarily relies on the recent Sixth Circuit decision, Swiger v.
Rosette, 989 F.3d 501 (6th Cir. 2021), to argue the delegation
clauses in the arbitration agreements require that the arbitrator -
and not the Court -- decides whether Ford can enforce the
arbitration agreement in the RISCs as a non-signatory. The Federal
Arbitration Act ("FAA") "reflects the basic principles that
'arbitration is a matter of contract' and that contracts must be
enforced 'according to their terms.'"
Judge Drain opines that the basis of the Plaintiffs' challenge --
the Defendant's standing to invoke the delegation provision -- goes
to the enforceability of the whole arbitration agreement.
Therefore, it is an arbitrability issue that must go to the
arbitrator to decide. Where a signatory opposes arbitration by
arguing that the non-signatory seeking to compel arbitration lacked
ability to invoke the arbitration agreement," the challenge
"concerns an issue of enforceability under the delegation provision
in the contract, and thus it is a question of arbitrability"
delegated to the arbitrator by the arbitration agreement.
In the case, the arbitrator must determine whether the Defendant
may enforce the arbitration agreement as a non-signatory in the
first instance. Because he concludes the issue of whether the
Defendant can enforce the arbitration agreement as a non-signatory
is an issue for the arbitrator, Judge Drain declines to consider
the Defendant's alternate arguments concerning Ford's right to
invoke the arbitration agreement in the RISCs as a third-party
beneficiary or under principles of equitable estoppel.
B. Defendant's Motion to Dismiss
1. Nationwide Class Claims
The Defendant argues the Plaintiffs do not have standing to assert
their nationwide class allegations because they only suffered
injuries in the states within which they reside, and do not claim
any injury in the remaining states. It maintains there is no basis
to permit claims for which no plaintiff has standing to proceed to
class certification. Ford relies on In re Packaged Ice Antitrust
Litig., 779 F.Supp.2d 642, 657 (E.D. Mich. 2011), in support of its
argument. In response, the Plaintiffs indicate they will pursue
their common law counts on a state-by-state basis at this time.
Accordingly, Judge Drain will dismiss Counts 2 through 6.
As to Plaintiffs' MMWA claim, Judge Drain opines that Ford's
challenge to the Plaintiffs' standing to pursue an MMWA claim on
behalf of a national class is premature. The Plaintiffs have
established standing to pursue their express warranty claims in
their individual capacities as will be more fully discussed herein
and should be permitted to proceed to discovery. Therefore, he
declines to dismiss Count 1 based on lack of standing. The
Defendant may raise its argument to dismiss the MMWA claim at the
class certification stage.
Ford also argues that Plaintiffs' MMWA claim fails because the
Plaintiffs failed to exhaust the informal dispute resolution
process contained in Ford's Limited Warranties. However, Ford did
not disclose its informal dispute resolution process until page
seven of its warranty document, and the text of the warranty begins
at the bottom of the eighth page. Page seven is not the page upon
which the warranty text begins. Thus, because Ford failed to
apprise the Plaintiffs of the required exhaustion via Ford's BBB
Auto Line program on the first page of its warranty, the Plaintiffs
were not required to exhaust Ford's procedure before filing their
MMWA claim.
2. Non-Warranty Claims
Next, Ford argues the Plaintiffs' Fraud, Consumer Protection, and
Unjust Enrichment claims fail because they have not adequately
alleged Ford had knowledge of a defect, let alone a safety defect.
It maintains customer complaints in and of themselves do not
support an inference that a manufacturer was aware of a defect.
Additionally, it asserts that the Plaintiffs' allegations fail to
demonstrate that Ford received notice of the customer complaints.
Judge Drain holds that (i) the Plaintiffs' FACC relies upon
customer complaints in addition to other sources of information
such as repair records, warranty claims and testing; (ii) the FACC
further describes other reports of engine concerns indicative of
the Oil Consumption Defect such as persistent, unexplained rattling
and total engine failure in new vehicles with low mileage; (iii)
the FACC also details nine Technical Service Bulletins ("TSBs") and
two Special Service Messages ("SSMs") related to the Oil
Consumption Defect; and (iv) Ford's argument that the Plaintiffs
fail to allege Ford's knowledge of the safety implications of the
Oil Consumption Defect is similarly unpersuasive.
Accordingly, the Plaintiffs have sufficiently alleged Ford's
knowledge of the Oil Consumption Defect, and Ford is not entitled
to dismissal of the Plaintiffs' fraud, consumer protection and
unjust enrichment claims on this basis.
3. Express Warranty Claims
Next, Ford argues the Plaintiffs' express warranty claims fail
because Ford's warranty does not cover design defects and the
Plaintiffs' claims "have all of the trappings of a design defect
case." The FACC alleges that the Oil Consumption Defect may be the
result of poor manufacturing, poor design, or a combination of
both.
Ford complains that a manufacturing defect would not be present in
all of the Class Vehicles, however at this stage, Judge Drain
cannot conclude as a matter of law the Plaintiffs have only alleged
a design defect with respect to the Oil Consumption Defect. "It is
plausible that a manufacturing defect might occur on a sufficiently
wide scale to affect all, or nearly all of the class vehicles. A
manufacturing defect is simply a defect that occurs when a product
does not conform to the manufacturer's intended design." Dismissal
of the Plaintiffs' express warranty claims on this basis at this
juncture is unwarranted.
4. Implied Warranty Claims
The Defendant also argues the Plaintiffs' implied warranty claims
fail because the Plaintiffs do not allege the Class Vehicles were
unfit for their ordinary and intended purpose.
Judge Drain agrees. The Court has previously found a vehicle's
ordinary, intended purpose is providing transportation; thus a
plaintiff cannot maintain an implied warranty claim when he or she
does not allege that the defect prevented an ability to drive the
vehicle. In the FACC, the Plaintiffs do not allege that the Oil
Consumption Defect has rendered the Class Vehicles inoperable or
otherwise incapable of providing transportation. Plaintiffs do not
allege that they have experienced engine failure, they have had
difficulty turning on their vehicles, keeping the engine running or
operating their vehicles. The Plaintiffs' implied warranty claims
are subject to dismissal for failure to state a claim.
5. Economic Loss Doctrine
Ford also argues the economic loss doctrine bars certain
Plaintiffs' claims under their respective states' laws. The
economic loss doctrine, adopted in some jurisdictions, bars tort
recovery for claims arising from the impairment of a contractual
benefit. Ford further asserts the Plaintiffs claims are not
independent of any alleged breach of contract where the FACC is
devoid of affirmative misrepresentation allegations. It complains
the FACC's purported misrepresentations are expressed in conclusory
terms without any identification of the actual statement or are
based on generalized marketing statements such as "Built Ford
Tough."
Judge Drain holds that Ford ignores that each of the states at
issue in the litigation have adopted some variation of the fraud
exception to the economic loss doctrine. Because the states at
issue have "cabined the economic loss doctrine to bar only actions
sounding in negligence and other unintentional torts, not
intentional fraud," and some have even crafted exceptions to the
doctrine "where a defendant deliberately conceals information to
induce the plaintiff to conclude a bargain, or to obfuscate product
safety concerns," the Plaintiffs' fraudulent and negligent
misrepresentation claims are not barred by the economic loss
doctrine.
Finally, Ford's argument that the economic loss doctrine bars the
Plaintiffs' California unfair competition claims is without merit.
Judge Drain says, the cases relied on by Ford do not involve
allegations of fraud or deceit and have been rejected by subsequent
courts. The economic loss doctrine does not bar the Plaintiffs'
claims.
6. Fraudulent Intent
Ford next argues the Plaintiffs' fraud and consumer protection act
claims fail because they have not alleged Ford's fraudulent intent.
The Plaintiffs counter that Ohio and New Jersey laws do not require
proof of fraudulent intent. To sufficiently plead a fraud claim
under Rule 9(b) of the Federal Rules of Civil Procedure, Plaintiffs
must "(1) point to a particular allegedly fraudulent statement; (2)
identify who made the statement; (3) plead when and where the
statement was made; and (4) explain what made the statement
fraudulent."
In the case, Judge Drain finds that the Plaintiffs have pled
substantial allegations of Ford's knowledge and intent to deceive
in the FACC. Ford's knowledge of the Oil Consumption Defect and
intent to deceive consumers may be inferred by its amendment to the
2018 Owner's Manual to suggest that how a user "drives high
performance vehicles" leads to "higher oil consumption." The
Plaintiffs' allegations are sufficient under Rule 9(b).
7. Unjust Enrichment
In the FACC, the Plaintiffs allege the "Class Vehicles and their
component parts are covered by Ford's express warranty." Judge
Drain holds that the Plaintiffs' claims are premised on a valid
contract between the parties, regardless of the defenses raised by
Ford. The law is well settled that the Plaintiffs may not maintain
their unjust enrichment claim when they allege a binding contract.
This claim is subject to dismissal.
9. Injunctive Relief
Finally, Ford argues the Plaintiffs are not entitled to injunctive
relief because the FACC is devoid of allegations that they intend
to purchase any Class Vehicle in the future. Judge Drain agrees.
Injunctive and equitable relief are not available where there is an
adequate remedy at law. The Plaintiffs do not allege a threat of
future harm from a future vehicle purchase from Ford. Hence, the
Plaintiffs are not entitled to injunctive relief.
C. Plaintiffs' Motion for Appointment of Interim Class Counsel
Finally, the Plaintiffs move for the appointment of interim class
counsel in order to protect the interests of the putative class,
avoid confusion and delay and to ensure the efficient prosecution
of this case. Specifically, they request that the Court appoints E.
Powell Miller of The Miller Law Firm, P.C. and Matthew D. Schelkopf
of Sauder Schelkopf LLC as Interim Co-Lead Counsel for the
Plaintiffs and the putative class.
The Plaintiffs further request that the Court appoints Victoria S.
Nugent of Cohen Milstein Sellers & Toll PLLC, William Anderson of
Handley Farah & Anderson PLLC ("HFA"), Jon Herskowitz of Baron &
Herskowitz, and Steven G. Calamusca of Gordon & Partners, P.A. as
Interim Members of the Plaintiffs' Steering Committee. They sought
concurrence in the relief sought in their present motion, and Ford
advised that -- without waiving any objections-- it did not intend
to take a position at this time with respect to the relief the
Plaintiffs seek.
Upon review of the Plaintiffs' Motion and exhibits attached
thereto, Judge Drain finds appointment of E. Powell Miller of
Miller Law and Matthew D. Schelkopf of Sauder Schelkopf as Interim
Co-Lead Counsel for the Plaintiffs and the putative class is
appropriate at this time. He further concludes the appointment of
Victoria S. Nugent of Cohen Milstein, William Anderson of HFA, Jon
Herskowitz of Baron & Herskowitz, and Steven G. Calamusca of Gordon
& Partners, P.A. as Interim Members of the Plaintiffs' Steering
Committee is likewise appropriate at this time.
Nine Plaintiffs from seven states alleging 16 claims have survived
Rule 12(b)(6) at this juncture, and the Court provided the parties
with scheduling dates at the March 16, 2022 hearing in this matter.
Moreover, the counsel have conducted extensive research into the
investigation and presentation of the Plaintiffs' claims and the
potential claims in the action; they have substantial experience in
handling class actions and other complex litigation, in particular
involving product defects from OEMs. Finally, the counsel has
represented preparedness to expend the resources necessary to
litigate the Plaintiffs' claims against the Defendant.
III. Conclusion
Accordingly, for the reasons articulated, Judge Drain granted the
Defendant's Motion to Compel Arbitration of Certain Plaintiffs'
Claims. The claims brought by Plaintiffs Dennis Gabel (Texas)
[Counts 35 through 37], Gordon McCardy (Michigan)[Counts 19-21];
Jason Pierce (Florida) [Counts 13-15]; James Rittmanic and Judson
Wessbecher (Illinois) [Counts 16-18] in the First Amended Class
Action Complaint are stayed pending resolution of the arbitrability
issues raised.
The Defendant's Motion to Dismiss Plaintiffs' First Amended Class
Action Complaint is granted in part and denied in part. Counts 2-6,
11, 15 (as to Plaintiffs Swindell and Wiley only), 24, 28, 31, 34,
39), and request for injunctive relief are dismissed.
The Defendant's Motion to Dismiss Plaintiffs' Class Action
Complaint is moot.
The Plaintiffs' Amended Motion to Appoint Interim Class Counsel is
granted. E. Powell Miller of Miller Law and Matthew D. Schelkopf of
Sauder Schelkopf are appointed as Interim Co-Lead Counsel and
Victoria S. Nugent of Cohen Milstein, William Anderson of HFA, Jon
Herskowitz of Baron & Herskowitz, and Steven G. Calamusca of Gordon
& Partners, P.A. are appointed as Interim Members of the
Plaintiffs' Steering Committee.
The Plaintiffs' Motion to Appoint Interim Class Counsel is moot.
The parties may proceed with discovery on the following counts at
this juncture: 1, 7-10, 12, 22-23, 25-27, 29-30, 32-33, and 38. A
scheduling order will be issued forthwith.
A full-text copy of the Court's March 22, 2022 Opinion & Order is
available at https://tinyurl.com/2azetbmt from Leagle.com.
HARTFORD CASUALTY: Rodzik Suit Dismissed for Failure to State Claim
-------------------------------------------------------------------
In the case, RODZIK LAW GROUP; BAU PRINT AND MAIL, INC.; and
CATARACT CONSULTANTS, PA, Plaintiffs v. HARTFORD CASUALTY INSURANCE
COMPANY and SENTINEL INSURANCE COMPANY, LTD., Defendants, Case No.
7:20-CV-224-FL (E.D.N.C.), Judge Louise W. Flanagan of the U.S.
District Court for the Eastern District of North Carolina, Southern
Division, granted the Defendants' motion to dismiss the Plaintiffs'
amended complaint.
I. Introduction
The Plaintiffs commenced the diversity action on Nov. 20, 2020,
asserting breach of contract and seeking declaratory judgments to
determine questions of insurance coverage related to COVID-19. They
seek damages and equitable remedies for themselves, and a proposed
class of others similarly situated. On Jan. 22, 2021, the
Plaintiffs filed an amended complaint as a matter of course,
asserting substantially the same allegations as in their originally
filed complaint, but correcting the names of defendants and their
related entity allegations.
The Defendants filed the instant motions on March 29, 2021, relying
on a memorandum in support of each and exhibits comprising
unpublished cases and a transcript of a summary judgment hearing in
a case in the U.S. District Court for the Eastern District of
Virginia. The court stayed scheduling activities pending decision
on the motions to dismiss. The Plaintiffs responded in opposition
to each and defendants replied in support of each, relying upon
additional unpublished cases. The Defendants filed three notices of
subsequently controlling decided authority.
II. Background
The Plaintiffs are businesses located in North Carolina asserting
that "the presence of COVID-19 and the governmental orders issued
to try to contain it" forced them to halt or reduce their business
operations, which in turn resulted in lost income.
Plaintiff Rodzik maintained a policy with Defendant Hartford, and
Plaintiffs BAU Print & Mail, Inc. and Cataract Consultants, PA
maintained a policy with Defendant Sentinel Insurance Company, Ltd.
Pursuant to those policies, the Plaintiffs submitted written claims
to defendants to recoup losses caused by COVD-19 and related
governmental orders. The Defendants denied those claims, asserting
the Plaintiffs failed to demonstrate COVID-19 caused physical loss
to covered property or, in the alternative, the Plaintiffs' claims
were subject to numerous exclusions within the policies, including
the virus exclusion.
III. Analysis
The Defendants assert that the Plaintiffs' claims are excluded by
the virus exclusion included in each of their policies.
Judge Flanagan agrees. The Defendants properly denied the
Plaintiffs' claims pursuant to that exclusion. The Plaintiffs'
arguments to the contrary are unavailing. First, the Plaintiffs
contend that the policy does not define a "specified cause of
loss." As excerpted above, however, this is untrue. Second, the
Plaintiffs note that defendants declined to use a "widely
circulated and oft-used plain and unambiguous virus exclusion" in
the place of the virus exclusion utilized. However, such extrinsic
evidence is only relevant if the policy language is ambiguous, and
in the case, for the reasons already mentioned, it is not.
Having determined that the Plaintiffs' insurance claims for their
alleged losses are barred by the policies' virus exclusions, Judge
Flanagan does not reach the Defendants' other arguments regarding
whether the Plaintiffs' losses amount to physical loss or damage
entitling them to business interruption or civil authority
coverage. However, she notes that an increasing number of federal
courts to address the issue have determined that physical loss or
damage does not incorporate viruses.
IV. Conclusion
Based on the foregoing, Judge Flanagan granted the Defendants' Rule
12(b)(6) motion, and dismissed the Plaintiffs' action for failure
to state a claim upon which relief can be granted. Where the
Plaintiffs' action fails as a matter of law, Judge Flanagan denied
as moot the Defendants' motion to dismiss class claims. The clerk
is directed to close the case.
A full-text copy of the Court's March 18, 2022 Order is available
at https://tinyurl.com/3wv4c6xy from Leagle.com.
HARTFORD FIRE: 2nd Cir. Affirms Dismissal of SA Hospitality Suit
----------------------------------------------------------------
In the case, SA HOSPITALITY GROUP, LLC, on behalf of themselves and
all others similarly situated, 1000 MADISON AVENUE LLC, on behalf
of themselves and all others similarly situated, ASTORIA CAKES LLC,
on behalf of themselves and all others similarly situated, CAKE
FOCACCIA, INC., on behalf of themselves and all others similarly
situated, REALTEK LLC, on behalf of themselves and all others
similarly situated, SA MIDTOWN LLC, on behalf of themselves and all
others similarly situated, BAILEY'S RESTAURANT LLC, on behalf of
themselves and all others similarly situated, SA SPECIAL EVENTS,
INC., on behalf of themselves and all others similarly situated,
SASE LLC, on behalf of themselves and all others similarly
situated, EIGHTY THIRD AND FIRST LLC, on behalf of themselves and
all others similarly situated, FELICE GOLD STREET LLC, on behalf of
themselves and all others similarly situated, SA 61ST MANAGEMENT
LLC, on behalf of themselves and all others similarly situated, SA
YORK AVE LLC, on behalf of themselves and all others similarly
situated, SA THIRD AVE CAFE LLC, on behalf of themselves and all
others similarly situated, SABF LLC, on behalf of themselves and
all others similarly situated, FELICE CHAMBERS LLC, on behalf of
themselves and all others similarly situated, FELICE WATER STREET
LLC, on behalf of themselves and all others similarly situated, 265
LAFAYETTE RISTORANTE LLC, on behalf of themselves and all others
similarly situated, Plaintiffs-Appellants v. HARTFORD FIRE
INSURANCE COMPANY, Defendant-Appellee, Case No. 21-1523-cv (2d
Cir.), the U.S. Court of Appeals for the Second Circuit affirms the
judgment of the district court granting Hartford's motion to
dismiss.
I. Introduction
Plaintiff-Appellant SA Hospitality, which owns a group of
food-service establishments, purchased standard all-risk commercial
property insurance for itself and for the other plaintiffs
(collectively, "SA Hospitality") from Defendant-Appellee Hartford.
SA Hospitality sought business interruption coverage for the period
in which it was unable to use its facilities due to government
orders that limited in-person dining services, which were issued in
response to the COVID-19 pandemic. The district court granted a
motion to dismiss on the ground that the insurance policy did not
cover the loss of use of an insured's facilities due to
governmental policies.
II. Background
The insurance policy included business interruption coverage. Put
simply, the business interruption coverage is triggered if there is
a "direct physical loss of or physical damage to" SA Hospitality's
property and that physical loss or damage has caused a suspension
of business operations. Under those circumstances, Hartford must
pay for certain business losses incurred until the property is
restored.
In March 2020, as a result of the COVID-19 pandemic, many state
governments issued orders closing all non-essential businesses and
limiting restaurants to take-out or delivery service only. After
suffering business losses that resulted from the governmental
orders, SA Hospitality submitted a claim to Hartford Fire Insurance
for coverage under the policy's business interruption coverage,
which Hartford denied. SA Hospitality then filed a putative class
action against Hartford in the U.S. District Court for the District
of Connecticut, seeking declaratory relief and damages for breach
of contract.
Hartford moved to dismiss the complaint, arguing that SA
Hospitality had not alleged a direct physical loss of or direct
physical damage to its property and that, even if it had, the
policy exclusions barred coverage. The district court granted the
motion, concluding that SA Hospitality had not alleged a direct
physical loss of or damage to property. Because it concluded that
the "trigger" to coverage had not occurred, the district court
found it unnecessary to reach the question whether the policy
exclusions also precluded coverage. SA Hospitality timely
appealed.
III. Discussion
The Second Circuit reviews de novo a district court's dismissal
under Rule 12(b)(6).
SA Hospitality argues on appeal that the governmental orders
prevented it from using its property for its intended purpose,
which amounted to a "direct physical loss of" the property.
The Second Circuit holds that that argument is foreclosed by its
recent decision in 10012 Holdings, Inc. v. Sentinel Ins. Co., 21
F.4th 216 (2d Cir. 2021). There it considered whether an art
gallery was entitled to insurance coverage for alleged business
losses that resulted from the COVID-19 pandemic and related
government restrictions. Like the insurance policy at issue, the
gallery's policy covered certain business losses incurred if it
suspended its operations due to "direct physical loss of or
physical damage to" its property "caused by or resulting from" a
covered cause of loss.
The Second Circuit concluded that "'direct physical loss' and
'physical damage' require actual physical loss of or damage to the
insured's property." Because the gallery alleged only a loss of use
of its premises, it affirmed the district court's dismissal of the
complaint for failing to allege actual physical loss or damage.
Like the gallery in 10012 Holdings, SA Hospitality alleges only a
loss of use of property with respect to its restaurants, which does
not amount to an "actual physical loss of" property.
SA Hospitality concedes that its case is indistinguishable from
10012 Holdings. Rather, it argues that the decision of the New York
Appellate Division on which 10012 Holdings relied, Roundabout
Theatre Co., Inc. v. Continental Cas. Co., 302 A.D.2d 1 (1st Dep't
2002), contravenes New York law.
Even if that were true, the Second Circuit holds that 10012
Holdings would still bind it because "a decision of a panel of the
Court is binding unless and until it is overruled by the Court en
banc or by the Supreme Court." While there may be "exceptions to
this general rule," none of those exceptions apply in the case.
The court in 10012 Holdings also denied the gallery's request to
certify the question to the New York Court of Appeals. It did so
because of the many federal "cases that would be delayed by
certification" and because there was no "disagreement in the lower
New York courts" about the meaning of "direct physical loss." The
court noted that the New York Court of Appeals "will have every
opportunity to address this question and either endorse or correct
our interpretation of New York law, should it wish to do so."
Because no subsequent developments justify a departure from that
course, the Second Circuit denies SA Hospitality's request to
certify this issue to the New York Court of Appeals.
IV. Disposition
The Second Circuit has considered SA Hospitality's remaining
arguments, which it concludes are without merit. For the foregoing
reasons, it affirms the judgment of the district court.
A full-text copy of the Court's March 18, 2022 Summary Order is
available at https://tinyurl.com/2p8ws2v4 from Leagle.com.
LINDSEY H. TAYLOR , Carella, Byrne, Cecchi, Olstein, Brody &
Agnello, P.C. (James E. Cecchi -- jcecchi@carellabyrne.com --
Carella, Byrne, Cecchi, Olstein, Brody & Agnello, P.C., Paul J.
Geller, Stuart A. Davidson, Samuel H. Rudman, Robbins Geller Rudman
& Dowd LLP, Christopher A. Seeger, Stephen A. Weiss, Seeger Weiss
LLP, on the brief), in Roseland, New Jersey, for the
Defendant-Appellee.
JONATHAN M. FREIMAN -- jfreiman@wiggin.com -- Wiggin and Dana LLP
(Anjali Dalal, Wiggin and Dana LLP, Charles A. Michael --
cmichael@steptoe.com -- Steptoe & Johnson LLP, on the brief), in
New Haven, Connecticut.
HEM DESIGN: Bunting Files ADA Suit in E.D. New York
---------------------------------------------------
A class action lawsuit has been filed against Hem Design Studio
Inc. The case is styled as Rasheta Bunting, individually and as the
representative of a class of similarly situated persons v. Hem
Design Studio Inc., Case No. 1:22-cv-01742 (E.D.N.Y., March 29,
2022).
The lawsuit is brought over alleged violation of the Americans with
Disabilities Act.
Hem Design Studio Inc. -- https://www.hem.com/ -- is a design
website. The website sells modern home furniture and household
products.[BN]
The Plaintiff is represented by:
Dan Shaked, Esq.
SHAKED LAW GROUP, P.C.
14 Harwood Court, Suite 415
Scarsdale, NY 10583
Phone: (917) 373-9128
Email: shakedlawgroup@gmail.com
HILTON HOTELS: White's 2nd Renewed Bid to Certify Class Denied
--------------------------------------------------------------
In the case, VALERIE R. WHITE, et al., Plaintiffs v. HILTON HOTELS
RETIREMENT PLAN, et al., Defendants, Civil Action No. 16-856 (CKK)
(D.D.C.), Judge Colleen Kollar-Kotelly of the U.S. District Court
for the District of Columbia denied the Plaintiff's Second Renewed
Motion for Class Certification.
I. Background
Plaintiffs Valerie R. White, Eva Juneau, and Peter Betancourt bring
the putative class action under the Employee Retirement Income
Security Act of 1974 ("ERISA") with respect to certain vesting
determinations made by the Hilton Hotels Retirement Plan. The
matter was noticed as related to Kifafi v. Hilton Hotels Retirement
Plan, No. 98-cv-1517 (CKK) (D.D.C.), an action over which the Court
concluded its jurisdiction in December 2015, after more than 17
years of litigation.
In the present action, the Plaintiffs, who are former Hilton
employees and putative beneficiaries of the Plan, seek to address
grievances that did not fall within the narrow classes certified in
the Kifafi litigation. Now, after the Court denied their first two
motions for certification without prejudice, the Plaintiffs have
filed their third motion for class certification, which is
presently pending before the Court. The Plaintiffs ground the
motion in the allegations within their Second Amended Complaint.
Specifically, the Plaintiffs seek to represent three separate
subclasses of claimants. First, Plaintiff Valerie R. White alleges
that Hilton unlawfully applied a so-called "elapsed time method" to
employee service rendered before 1976, resulting in an improper
calculation of her years of vesting credit under the Plan.
Plaintiff Eva Juneau alleges that Hilton improperly denied vesting
credit to employees, like her, for service rendered at certain
"non-participating" locations.
Additionally, the Plaintiffs allege that Hilton failed to keep
proper documentation for services rendered by certain employees,
like Ms. Juneau, and that Hilton should have, but failed to, credit
appropriate time "equivalencies" to these employees, in the absence
of that proper documentation.
Finally, Plaintiff Peter Betancourt alleges that Hilton also
improperly denied claims made by surviving beneficiaries "solely on
the grounds that the claimant is not the surviving spouse" of the
original Plan participant. According to the Plaintiffs, this is not
a valid "basis for a denial of a claim to retroactive benefits."
In their second motion for class certification, the Plaintiff
sought to certify a class that comprises three distinct subclasses
corresponding to their distinctive claims outlined.
In full, the Plaintiffs sought to certify a class of "any and all
persons who: (a) Are former or current employees of Hilton
Worldwide, Inc. or Hilton Hotels Corp., or the surviving spouses or
beneficiaries of former Hilton employees; (b) Submitted a claim for
vested retirement benefits from Hilton under the claim procedures
ordered by the District Court and the Court of Appeals in Kifafi,
et al., v. Hilton Hotels Retirement Plan, et al., C.A. 98-1517; and
(c) Have vested rights to retirement benefits that have been denied
by the Hilton Defendants': (1) Use of fractional years of vesting
service under an elapsed time method to count periods of employment
before 1976 with no resolution of whether the fractions constitute
a year of service under ERISA; (2) Refusal to count
non-participating service for vesting purposes notwithstanding that
the service was with the employer under ERISA Section 3(5), that
the Hilton Defendants counted service at the same Hilton Properties
in Kifafi and represented to this Court and the D.C. Circuit in
Kifafi that Hilton had counted non-participating service with
Hilton for vesting, and that the records requested and received
from Defendants do not identify any non-participating property that
is also not a Related Company; and (3) Denial of retroactive/back
retirement benefit payments to heirs and estates on the sole basis
that the claimants are not the surviving spouse of deceased vested
participants."
The Plaintiffs allege that the class comprises at least 220
distinct individuals throughout the United States.
On Oct. 7, 2020, the Court rejected this definition, holding, among
other things, that the term "have vested rights to retirement
benefits that have been denied" is concomitant with the merits of
the case.
The Plaintiffs' third proposed class definition is now: "A class
consisting of any and all persons who: (a) Are former or current
employees of Hilton Worldwide, Inc. or Hilton Hotels Corp., or the
surviving spouses or beneficiaries of former Hilton employees, (b)
Submitted a claim for vested retirement benefits from Hilton under
the claims procedures ordered by the District Court and the Court
of Appeals in Kifafi, et al. v. Hilton Hotels Retirement Plan, et
al., C.A. 98-1517; and (c) Have been denied vested rights to
retirement benefits that have been denied by the Hilton Defendants:
(1) Use of 'fractional' years of vesting service under an 'elapsed
time' method to count periods of employment before 1976 with no
resolution of whether fractions constitute a 'year of service'
under ERISA; (2) Refusal to count 'non-participating' service for
vesting purposes notwithstanding that the service was with the
'employer' under ERISA Section 3(5) a hotel property that Hilton
operated under a management agreement, that the Hilton Defendants
counted service at the same Hilton Properties in Kifafi and
represented to this Court and the D.C. Circuit in Kifafi that
Hilton had counted non-participating service with Hilton for
vesting, and that 'records requested and received from Defendants
who not identify any non-participating property that is also not a
Related Company; and (3) Denial of retroactive/back retirement
benefit payments to heirs and estates on the sole basis that the
claimants are 'not the surviving spouse' of deceased vested
participants."
The Defendants oppose the Plaintiffs' revised definition.
II. Discussion
Judge Kollar-Kotelly concludes that the Plaintiffs' proposed class
remains impermissibly "fail-safe," as presently defined. This
precludes certification. As the Court explained when confronting
the Plaintiffs' last proposed class definition, a fail-safe class
exists where the class definition "depends on the merits of the
underlying claim." Put otherwise, a fail-safe class arises where
the class "is defined so that whether a person qualifies as a
member depends on whether the person has a valid claim."
Judge Kollar-Kotelly finds multiple factors weighing strongly in
favor of an operative rule against fail-safe classes. First, of the
nine circuits to consider the matter, eight circuits have either
adopted a categorical rule against fail-safe classes or discussed
such a rule with approval. Furthermore, beyond the weight of this
precedent, the gravamen of the rule itself is rooted in compelling
principles of fairness and common-sense. Fail-safe classes also
contravene the notions of efficiency critical to Rule 23 and the
class action mechanism. A merits ruling against a fail-safe class
does not resolve a class-wide dispute, but instead hollows out the
fail-safe class at issue, leaving further litigation for a later
date.
In view of the foregoing, Judge Kollar-Kotelly will apply the rule
against fail-safe classes in the case. Indeed, she would be
improvident to certify a fail-safe class like the Plaintiffs' where
the D.C. Circuit has not approved of such classes and where
numerous circuit courts, and at least one district court in this
jurisdiction, have applied a common-sense rule against them. Having
offered the Plaintiffs three opportunities to remedy this problem,
each to no avail, Judge Kollar-Kotelly will deny class
certification.
III. Conclusion
For the reasons she set forth in her Memorandum Opinion, Judge
Kollar-Kotelly denied the Plaintiffs' Second Renewed Motion for
Class Certification.
An appropriate order accompanies the Memorandum Opinion.
A full-text copy of the Court's March 22, 2022 Memorandum Opinion
is available at https://tinyurl.com/2w5un4v7 from Leagle.com.
IDAHO: Order Terminating Prospective Relief in Balla v. ISCI Upheld
-------------------------------------------------------------------
In the case, WALTER D. BALLA, Plaintiff-Appellant/Cross-Appellee,
v. STATE OF IDAHO; IDAHO STATE BOARD OF CORRECTION; DIRECTOR OF
IDAHO DEPARTMENT OF CORRECTIONS,
Defendants-Appellees/Cross-Appellants, Case Nos. 20-35579, 20-35580
(9th Cir.), the U.S. Court of Appeals for the Ninth Circuit
affirmed the district court's order granting the Defendants' motion
to terminate prospective relief.
I. Background
The Plaintiffs, a class of incarcerated persons at the Idaho State
Correctional Institution (ISCI), appeal the termination of
prospective relief pursuant to the Prison Litigation Reform Act
(PLRA), 18 U.S.C. Section 3626(b). The relief was previously
granted after the district court found unconstitutional levels of
medical care and overcrowding at the facility.
In 1981, Walter Balla, an incarcerated person at ISCI, brought the
class action suit alleging unconstitutional prison conditions
against the State of Idaho, the Idaho State Board of Correction,
and the Director of the Idaho Department of Correction
(Defendants). Over the decades since then, the district court has
ordered many forms of prospective relief.
In 1984, the district court concluded that conditions at ISCI
amounted to violations of the Plaintiffs' Eighth and Fourteenth
Amendment rights (Balla I). It granted injunctive relief in nine
orders related mostly to medical care and physical safety. The next
year, the district court approved compliance plans. Five of these
Balla I orders have been terminated by stipulation.
After the entry of these Balla I orders, the population at ISCI
increased, and the district court found unconstitutional
overcrowding amounting to an unnecessary and wanton infliction of
pain at the facility (Balla II). The court issued ten more orders
setting population caps, staffing requirements, and other
restrictions, and mandated that the population caps could be
increased only after structural changes or redesign.
By the early 2000s, the population at ISCI had again increased, but
the Defendants moved to terminate the Balla II injunctive relief.
By then, the PLRA had become law and established new standards for
the granting and terminating of prospective relief related to
prison conditions. Discovery and briefing were limited by
stipulation of the parties to the population caps and plumbing
orders of Balla II in ISCI's Housing Units 9, 10, 11, and 13. In
2005, the district court found "conditions that were worse, both as
to overall inmate population and plumbing problems, than when the
original injunctive orders were put in place." The court preserved
the prospective relief from Balla II for Units 9, 10, and 11. It
did not address Housing Units 1, 2, 3, 7, and 8 because it
"presumed that the parties' agreement to limit briefing and
argument to Units 9, 10, 11, and 13 mean[t] that the orders
pertaining to Units 1, 2, 3, 7, and 8 are no longer at issue in
this action
Five years later, the district court appointed a special master to
investigate defendants' compliance with the remaining Balla I
orders concerning medical and mental healthcare. The special master
concluded that the prison was deliberately indifferent to the
medical and mental healthcare needs of ISCI inmates. The district
court ordered mediation, and the parties stipulated to procedures
to modify the compliance plans, including adding a two-year
compliance monitoring period and a compliance audit. At the end of
the compliance period, ISCI would seek certification from the
National Commission on Correctional Health Care (NCCHC) and, if
certification was granted, the parties would voluntarily terminate
the court orders. The court found the stipulated motion satisfied
the requirements of the PLRA, 18 U.S.C. Section 3626(a)(1),
although the court subsequently concluded it should have conducted
a more searching inquiry into conditions at ISCI.
In 2015, upon the Plaintiffs' motion for sanctions, the district
court found that the Defendants falsified and manipulated medical
records and misled the special master. The court sanctioned them,
restarting the two-year compliance monitoring period and modifying
the stipulated motion to eliminate the automatic termination of
some terms after NCCHC certification. The court required them to
file a motion to terminate and prove that "there are no ongoing
constitutional violations, that the relief ordered exceeds what is
necessary to correct an ongoing constitutional violation, or both,"
quoting Graves v. Arpaio, 623 F.3d 1043, 1048 (9th Cir. 2010).
II. Discussion
At issue in the appeal is the district court's order granting the
Defendants' motion to terminate all prospective relief, pursuant to
the requirements of the PLRA, 18 U.S.C. Section 3626(b). The
Plaintiffs claim that the district court cannot terminate the
relief because there are current and ongoing constitutional
violations at ISCI.
The district court ultimately found no current and ongoing
constitutional violations in conditions of confinement at ISCI and
terminated all Balla prospective relief. In a 72-page written
decision, the district court found that the Defendants had complied
with its orders and were not deliberately indifferent to the
medical needs of patients living in the Medical Annex because,
although some witnesses testified that the care there did not meet
the prevailing community standard of care, it did meet the Eighth
Amendment standard.
The Plaintiffs challenge that termination in the appeal, and the
Defendants challenge the legal standard for termination in their
cross-appeal. The Plaintiffs raise four issues: (1) whether the
district court abused its discretion in excluding evidence of
defendants' failure to adequately treat the Hepatitis C virus at
ISCI; (2) whether the district court considered the proper standard
of care in concluding that the medical care at ISCI's Medical Annex
does not constitute a current and ongoing constitutional violation;
(3) whether the district court erred in finding defendants
satisfied their burden of proof that there are no current and
ongoing constitutional violations related to security staffing and
overcrowding at ISCI; and (4) whether this court has jurisdiction
to review the termination of certain specific orders.
The Defendants' cross-appeal challenges the district court's
assignment of the burden of proof that there are no current and
ongoing constitutional violations to the moving party.
A.
The Ninth Circuit first addresses the issue of the introduction of
evidence related to the treatment (or lack thereof) of Hepatitis C
virus at ISCI. The Plaintiffs contend that the Defendants fail to
properly treat people with Hepatitis C, and that the district court
abused its discretion in refusing to consider evidence of this
failure when the court terminated the prospective relief. They
argue that "the federal right at issue in Balla I was ISCI inmates'
right to a medical delivery system that meets constitutional
standards," and that a medical delivery system that fails to
properly treat Hepatitis C does not meet constitutional standards.
In their eyes, the district court did not properly terminate the
relief because it could not consider the constitutionality of the
entire medical care system at ISCI without considering Hepatitis C
treatment.
However, the federal right at issue in Balla I is narrower than the
Plaintiffs suggest, the Ninth Circuit says. The Balla I orders were
not issued in consideration of Hepatitis C. Evidence of the virus'
treatment does not necessarily answer whether there is an ongoing
constitutional violation related to the general provision of
healthcare that is required by the orders. As the district court
said, "with no findings in Balla about the Defendants' current
Hepatitis C treatment, there is virtually nothing to enforce with
respect to Hepatitis C treatment as it relates to the current Balla
injunctions."
B.
The Ninth Circuit now turns to the issue of the level of care in
ISCI's Medical Annex. The district court applied the appropriate
legal standards, and the Ninth Circuit finds no clear error in its
findings of fact. The district court found that the Defendants were
not deliberately indifferent to the serious medical needs of
patients in the Medical Annex. It considered conflicting testimony
from medical professionals on the adequacy of care in the Medical
Annex, and concluded that the witnesses who saw problems with the
level of care in the Medical Annex were applying a standard of care
higher than that required by the Eighth Amendment deliberate
indifference standard. The court found the testimony presented by
both sides to be medically acceptable and decided that the
difference in opinion between medical professionals on the adequacy
of the medical care did not rise to the level of deliberate
indifference. The court also concluded that "the NCCHC
accreditation," and the Defendants' completion of the modified
compliance plan, "while not determinative, constitute substantial
evidence of adequate medical care."
Considering the record before it, the district court did not
clearly err in finding no evidence that the ISCI medical staff made
choices in conscious disregard of an excessive risk to the
Plaintiffs' health. Accepting these findings, the conditions at the
Medical Annex do not rise to the level of an Eighth Amendment
violation because there is no deliberate indifference.
C.
The Plaintiffs also challenge the termination of the population
caps on Units 9, 10, 11, and 13 because they claim that the
Defendants did not meet their burden of showing no current and
ongoing constitutional violations. In light of Section 3626(a), the
Balla III court determined that the population caps "extend no
further than is necessary to correct the Eighth Amendment
violations, are narrowly drawn, and are the least intrusive way to
correct the violations." The parties do not dispute that the
Defendants complied with the population caps. The district court
also found that the Defendants followed the required staffing
patterns for medium custody units.
The Ninth Circuit opines that the Defendants met their burden of
showing no ongoing constitutional violation. It finds that the
Defendants have complied with the security staffing requirements
and population caps in the court's orders. The district court
ordered this relief because it concluded that the requirements
would correct the violations of the federal rights at issue. The
Plaintiffs presented no evidence there were ongoing problems of the
sort that motivated the population caps and security staffing
orders in the first place. Their evidence was instead focused on
out-of-cell and recreation facilities.
The Plaintiffs also argue that this termination violates the terms
of the Balla II order. That order mandated that "only through
adequate structural change or redesign of the housing units may the
population caps ordered herein be increased." The Defendants claim
that they do not need to show structural or design changes for
termination because the Balla II decision held that only through
structural or design changes could the population caps "be
increased." Because there have been no structural changes or
redesign, the defendants are prohibited from increasing the
population caps, but not from terminating them. The district court
did not increase the population caps, so no structural or design
changes were required.
D.
The Plaintiffs challenge the termination of Balla II Orders 1-5
(population caps and restrictions on double-celling in Units 1, 2,
3, 7, and 8), but the Ninth Circuit cannot review the termination
of those orders because the orders were terminated in Balla III in
2005, and any appeal of that decision is untimely. Therefore, it
dismisses the appeal as to Balla II Orders 1-5.
E.
The Defendants argue on cross-appeal that the burden framework
established in Graves and Gilmore "is wrong." Those cases establish
that the burden is on the Section 3626(b) movant to demonstrate
that there are no ongoing constitutional violations, that the
relief ordered exceeds what is necessary to correct an ongoing
constitutional violation, or both, citing Gilmore v. People of the
State of California, 220 F.3d 987, 1007-08 (9th Cir. 2000). The
movant must prove the elements under Section 3626(b)(1) or (b)(2)
and that the (b)(3) limitation does not apply.
Then Ninth Circuit opines that it is bound by the law of our
circuit, and only an en banc court or the U.S. Supreme Court can
overrule a prior panel decision. It continues to follow the law
that "nothing in the termination provisions of Section 3626(b) can
be said to shift the burden of proof from the party seeking to
terminate the prospective relief." The Defendants' argument is
foreclosed by Graves and Gilmore.
III. Conclusion
The appeal as to Balla II Orders 1-5 is dismissed for lack of
jurisdiction. The district court's granting of the motion for
termination of prospective relief as to all other orders is
affirmed. The judgment in appeal No. 20-35580 is affirmed.
A full-text copy of the Court's March 22, 2022 Opinion is available
at https://tinyurl.com/mwm3c3dj from Leagle.com.
Elijah M. Watkins -- elijah.watkins@stoel.com -- (argued), W.
Christopher Pooser -- christopher.pooser@stoel.com -- and Wendy J.
Olson -- wendy.olson@stoel.com -- Stoel Rives LLP, in Boise, Idaho,
for the Plaintiffs-Appellants/Cross-Appellees.
Brian V. Church, (argued), Deputy Attorney General, Civil
Litigation Division; Mark A. Kubinski, Lead Counsel, Corrections
Section; Idaho Department of Corrections, in Boise, Idaho; for the
Defendants-Appellees/Cross-Appellants.
IL CASTELLO: Fails to Pay Proper Wages, Breznick-Ames Suit Alleges
------------------------------------------------------------------
DIANNA BREZNICK-AMES, individually and on behalf of all others
similarly situated, Plaintiff v. IL CASTELLO, INC.; and GABRIELLA
CANDELLA, Defendants, Case No. 3:22-cv-00012-NKM (W.D., Va., March
29, 2022) seeks to recover from the Defendants unpaid wages and
overtime compensation, interest, liquidated damages, attorneys'
fees, and costs under the Fair Labor Standards Act.
Plaintiff Breznick-Ames was employed by the Defendants as delivery
driver.
IL CASTELLO, INC. owns and operates Papa John's pizza. [BN]
The Plaintiff is represented by:
Helen T. Vu, Esq.
HALPERIN LAW CENTER
4435 Waterfront Drive, Suite 100
Glen Allen, VA 23060
Telephone: (804) 527-0100
Facsimile: (804) 597-0209
Email: helen@hlc.law
- and -
Krista Sheets, Esq.
Josh Sanford, Esq.
SANFORD LAW FIRM, PLLC
10800 Financial Centre Pkwy, Suite 510
Little Rock, Arkansas 72211
Telephone: (501) 221-0088
Facsimile: (888) 787-2040
Email: krista@sanfordlawfirm.com
josh@sanfordlawfirm.com
ILLINOIS: Adams' Class Action Request in Complaint v. IDOC Denied
-----------------------------------------------------------------
In the case, ROBERT ADAMS, K67019, Plaintiff v. JEFFREY GENTRY,
Defendant, Case No. 21-cv-818-DWD (S.D. Ill.), Judge David W. Dugan
of the U.S. District Court for the Southern District of Illinois
issued a Memorandum and Order on his preliminary review of the
complaint pursuant to 28 U.S.C. Section 1915A.
Among other things, the Court denied without prejudice the
Plaintiff's request for class action status.
I. Introduction
Plaintiff Adams, an inmate of the Illinois Department of
Corrections (IDOC) currently detained at Western Correctional
Center, brings the civil rights action pursuant to 42 U.S.C.
Section 1983 for alleged deprivations of his constitutional rights
at Shawnee Correctional Center. The Plaintiff claims that the
Defendant Gentry retaliated against him for filing a lawsuit by
placing him in segregation, and Gentry used excessive force while
transporting him to segregation. He seeks monetary and injunctive
relief. He also expresses a desire to maintain a class action
lawsuit.
The Plaintiff's Complaint is now before the Court for preliminary
review pursuant to 28 U.S.C. Section 1915A. Under Section 1915A,
the Court is required to screen prisoner complaints to filter out
non-meritorious claims. Any portion of a complaint that is legally
frivolous, malicious, fails to state a claim upon which relief may
be granted, or asks for money damages from a defendant who by law
is immune from such relief must be dismissed. At this juncture, the
factual allegations of the pro se complaint are to be liberally
construed.
II. The Complaint
The Plaintiff alleges that Defendant Gentry placed him in
segregation as retaliation for a lawsuit he had ongoing against
Gentry and another officer. On the walk to segregation, he
attempted to voice his belief that his placement in segregation was
retaliation by announcing it to bystanders and the individuals who
escorted him. As a result, Gentry forced him to walk bent in half.
The Plaintiff opposed this command because he has a
life-threatening illness that can flair up and cause him serious
pain. Ultimately, the guards carried him part of the way to
segregation because he refused to walk bent in half. The Plaintiff
alleges that he was subject to pain because he was bent in half and
his handcuffs were twisted side to side. He claims that these
actions violated his Eighth Amendment right to be free from cruel
and unusual punishment. He also alleges that his Eighth and
Fourteenth Amendment rights were violated by his placement in
segregation.
Judge Dugan designates the following Claim, based on the Amended
Complaint: Claim 1: Eighth Amendment excessive force claim
Defendant Gentry; and Claim 2: First Amendment retaliation claim
against Defendant Gentry.
The parties and the Court will use these designations in all future
pleadings and orders, unless otherwise directed by a judicial
officer of this Court. Any claim that is mentioned in the Complaint
but not addressed in the Order is considered dismissed without
prejudice as inadequately pled under Twombly.
III. Preliminary Dismissal
It appears that an extra page was included in the lawsuit where
Plaintiff named Kwame Raoul (the director of IDOC), Mrs. Greene
(the Warden of Western), and the Parole Review Board as defendants.
For constitutional violations under Section 1983 or Bivens, a
government official 'is only liable for his or her own
misconduct.'" Judge Dugan finds that the body of the Plaintiff's
complaint contains no allegations about these individuals or
entities, so the Plaintiff has failed to state a claim concerning
these parties.
IV. Analysis
Judge Dugan holds that Claim 1 is sufficient as pled to proceed
against Defendant Gentry. Claim 2 is also sufficient as pled, but
Judge Dugan will construe it as a claim under the First Amendment
rather than the Eighth or Fourteenth because with Section 1983
litigation, he construes a claim under the most applicable
provision of law.
In the demand for relief, the Plaintiff expressed a desire to
maintain a class action concerning allegations in his complaint.
Under Federal Rule of Civil Procedure 23(a)(4), a single
representative may represent a proposed class only if "the
representative party will fairly and adequately protect the
interests of the class." In the case, Judge Dugan finds that the
Plaintiff has not alleged who the class members would be, or how he
would be an adequate representative. His mere request to initiate
class action litigation, with no details about the parameters of
the class, is not sufficient. Additionally, pro se prisoners are
not allowed to represent other plaintiffs. Accordingly, the
Plaintiff's request for a class action will be denied without
prejudice.
The Plaintiff sought injunctive relief, but he is no longer housed
at Shawnee, so his request for injunctive relief concerning guards
at that institution is moot.
V. Disposition
Judge Dugan holds that Claims 1 and 2 of the Complaint survive
initial screening as he described against Defendant Gentry.
The Clerk of Court is directed to prepare for Defendant Gentry: (1)
Form 5 (Notice of a Lawsuit and Request to Waive Service of a
Summons), and (2) Form 6 (Waiver of Service of Summons). The Clerk
is directed to mail these forms, a copy of the Complaint, and the
Memorandum and Order to the Defendants place of employment as
identified by the Plaintiff. If the Defendant fails to sign and
return the Waiver of Service of Summons (Form 6) to the Clerk
within 30 days from the date the forms were sent, the Clerk will
take appropriate steps to effect formal service on Defendant, and
the Court will require the Defendant to pay the full costs of
formal service, to the extent authorized by the Federal Rules of
Civil Procedure.
If a Defendant cannot be found at the work address provided by the
Plaintiff, the employer will furnish the Clerk with the Defendant's
current work address, or, if not known, the Defendant's last-known
address. This information will be used only for sending the forms
as directed or for formally effecting service. Any documentation of
the address will be retained only by the Clerk. Address information
will not be maintained in the court file or disclosed by the
Clerk.
The Defendants are ordered to timely file an appropriate responsive
pleading to the Complaint and will not waive filing a reply
pursuant to 42 U.S.C. Section 1997e(g). Pursuant to Administrative
Order No. 244, the Defendants need only respond to the issues
stated in this Merits Review Order. The Warden does not need to
file an answer, he is added only to help identify a Doe defendant.
If judgment is rendered against the Plaintiff, and the judgment
includes the payment of costs under Section 1915, the Plaintiff
will be required to pay the full amount of the costs, regardless of
whether his application to proceed in forma pauperis was granted.
The Plaintiff is advised that he is under a continuing obligation
to inform the Clerk of Court and each opposing party of any address
changes; the Court will not independently investigate his
whereabouts. This will be done in writing and not later than seven
days after a transfer or other change of address occurs. Failure to
comply with the Order will cause a delay in the transmission of
Court documents and may result in dismissal of the action for
failure to prosecute.
A full-text copy of the Court's March 22, 2022 Memorandum & Order
is available at https://tinyurl.com/rtut9ed4 from Leagle.com.
JMI REPORTS: Snow Wins Conditional Class Certification Bid
----------------------------------------------------------
In the class action lawsuit captioned as WARREN SNOW, on behalf of
himself and all others similarly situated, v. JMI REPORTS, LLC,
Case No. 1:20-cv-01999-SO (N.D. Ohio), the Hon. Judge Solomon
Oliver, Jr. entered an order granting the Plaintiff's motion for
conditional class certification of:
"all former and current individuals employed by JMI Reports
LLC as field inspectors at any time between September 4,
2017, and the present."
The Plaintiff commenced this putative collective and class action
on September 4, 2020, against JMI for alleged violations of the
Fair Labor Standards Act (FLSA), and the Ohio Minimum Fair Wage
Standards Act (OMFWSA). Specifically, the Plaintiff asserts that
Defendant had a policy and practice of "not paying its non-exempt
employees, including the Plaintiff, overtime compensation at the
rate of one and one-half times their regular rate of pay for the
hours they worked over 40 each workweek."
A copy of the Court's order dated March 16, 2022 is available from
PacerMonitor.com at https://bit.ly/35EDo46 at no extra charge.[CC]
KANSAS CITY LIFE: Fine Files Suit in C.D. California
----------------------------------------------------
A class action lawsuit has been filed against Kansas City Life
Insurance Company. The case is styled as Robert R. Fine,
individually and on behalf of all others similarly situated v.
Kansas City Life Insurance Company, Case No. 2:22-cv-02071 (C.D.
Cal., March 29, 2022).
The nature of suit is stated as Insurance for Breach of Insurance
Contract.
Kansas City Life Insurance Company -- https://www.kclife.com/ -- is
a public insurance company established in 1895 and located in
Kansas City, Missouri.[BN]
The Plaintiff is represented by:
E. Scott Palmer, Esq.
LARSON O'BRIEN LLP
555 S. Flower, Suite 4400
Los Angeles, CA 90071
Phone: (213) 493-9157
Fax: (213) 623-2000
Email: spalmer@larsonobrienlaw.com
KROGER COMPANY: Davis Sues Over Mislabeled Cold & Flu Medicines
---------------------------------------------------------------
APRIL DAVIS; and MAHMOOD DAWOOD, individually and on behalf of all
others similarly situated, Plaintiffs v. THE KROGER COMPANY,
Defendant, Case No. 2:22-cv-02082 (C.D. Cal., March 29, 2022) is a
class action lawsuit alleges that the Defendant manufacture,
distribute, and sell mislabeled Kroger-branded "Non-Drowsy"
over-the-counter cold and flu medicines that contain
Dextromethorphan Hydrobromide ("the "Non-Drowsy Products").
The Plaintiff alleges in the complaint that by prominently labeling
the products as "Non-Drowsy" and "Daytime," the Defendant led the
Plaintiffs and other consumers to believe that the Non-Drowsy
Products do not cause drowsiness, and that drowsiness is not a side
effect of the products.
However, one of the active ingredients in the Non-Drowsy Products
is Dextromethorphan Hydrobromide ("DM HBr"). While the average
consumer may not be aware, drowsiness is a documented side effect
of DM HBr at the recommended dosages. Authorities such as the
National Library of Medicine and Mayo Clinic list drowsiness as a
side effect of this ingredient, says the suit.
The Plaintiffs and Class members purchased the Non-Drowsy Products
with the expectation that the products would not cause drowsiness
and that they were intended to be used during waking hours. Because
Defendant sold products to consumers that cause drowsiness, the
Plaintiffs and the Classes were deprived of the benefit of their
bargain.
The Kroger Co. operates supermarkets and convenience stores in the
United States. The Company also manufactures and processes some of
the foods that its supermarkets sell. [BN]
The Plaintiff is represented by:
Todd M. Friedman, Esq.
LAW OFFICES OF TODD M. FRIEDMAN
21031 Ventura Blvd., Suite 340
Woodland Hills, CA 91364
Telephone: (323) 306-4234
Email: tfriedman@toddflaw.com
- and -
Mark S. Reich, Esq.
Courtney E. Maccarone, Esq.
Gary Ishimoto, Esq.
LEVI & KORSINSKY, LLP
55 Broadway, 10th Floor
New York, NY 10006
Telephone: (212) 363-7500
Facsimile: (212) 363-7171
Email: mreich@zlk.com
cmaccarone@zlk
gishimoto@zlk.com
LEPRINO FOODS: Class of Hourly Workers Certified in Howell Suit
---------------------------------------------------------------
In the case, ANDREW HOWELL, on behalf of himself and on behalf of
all other similarly situated individuals, Plaintiff v. LEPRINO
FOODS COMPANY, a Colorado Corporation; LEPRINO FOODS DAIRY PRODUCTS
COMPANY, a Colorado Corporation; and DOES 1-50, inclusive,
Defendants, Case No. 1:18-cv-01404-AWI-BAM (E.D. Cal.), Judge
Anthony W. Ishii of the U.S. District Court for the Eastern
District of California issued an order:
1. granting in part and denying in part Howell's motion for
class certification, and
2. denying Leprino's motion to strike select evidence used in
Howell's motion.
I. Background
Plaintiff Howell filed suit against two cheese manufacturing
companies, Leprino Foods Co. and Leprino Foods Dairy Products Co.
(collectively, "Leprino"), alleging that Leprino violated
California wage-and-hour laws by enforcing policies and practices
that are facially unlawful and that deprive hourly employees of
timely and compliant meal and rest periods. Howell worked as an
hourly employee for Leprino from August 1987 to March 2015.
Leprino manufactures and processes cheese and dairy ingredients at
its Tracy facility in Tracy, California. The Tracy facility, which
is one of several Leprino facilities in the State of California,
generally operates 24 hours a day, seven days a week, and employs
over 300 employees. Unlike Leprino's other facilities, the Tracy
facility operates a single production line that runs through the
facility's production departments. Due to the time sensitive nature
of making its cheese, Tracy's production line generally does not
stop running except for routine cleaning or emergencies.
Mr. Howell filed his lawsuit against Leprino on April 24, 2018.
Howell's Complaint raised seven causes of action on behalf of
himself and a putative class: (1) failure to pay minimum wages,
Cal. Labor Code Section 1194 and California Industrial Welfare
Commission Wage Order 8-2001 ("Wage Order 8"); (2) failure to pay
wages for all hours worked, Cal. Labor Code Section 204; (3)
failure to pay overtime wages, Cal. Labor Code Sections 510, 1194,
and Wage Order 8; (4) failure to provide legally compliant meal and
rest periods or compensation in lieu thereof, Cal. Labor Code
Sections 226.7, 512, and Wage Order 8; (5) failure to pay
separation wages, Cal. Labor Code Sections 201-203; (6) failure to
furnish accurate wage statements, Cal. Labor Code Section 226; and
(7) unfair competition law violations, Cal. Bus. & Profs. Code
Section 17200, et seq.
Following rulings on two Rule 12(c) motions and one Rule 56 motion,
the only remaining claim is the Plaintiff's unfair competition law
claim based on alleged meal and rest period violations under Labor
Code Section 226.7. Howell now seeks certification of the class for
this claim.
II. Discussion
A. Leprino's Motion to Strike
Leprino moves to strike eight declarations submitted by Howell in
support of his motion for class certification on the ground that
they "contain demonstrable false and misleading statements, which
are contradicted significantly by the declarants' deposition
testimony." In opposition, Howell contends that there is no
justification to strike the declarations because any discrepancies
between the declarations and depositions go to the weight of their
testimony, not to whether their testimony should be stricken. He
further claims that sanctions in the amount of $11,625 should be
imposed against Leprino on the ground that it knowingly,
unreasonably, and vexatiously multiplied the proceedings in the
case. In reply, Leprino argues that it provided the Court with
proper authority to strike these declarations.
Judge Ishii finds insufficient grounds to strike or disregard the
declarations because they directly relate to the claims and
defenses in the case. He instead assesses the strengths and
weaknesses of the challenged declarations -- along with all other
properly submitted evidence -- as he considers whether Howell's
motion for class certification satisfies the requirements of Rule
23.
B. Class Definition
Howell seeks certification of the following class: "All non-exempt
hourly workers who are currently employees, or formerly have been
employed, as non-exempt hourly employees at Leprino's Tracy plant
in Tracy, California, at any time within four years prior to the
filing of the original complaint until the date the Court grants
certification."
The contours of the class are ascertainable based on objective
criteria, namely, whether someone was employed by Leprino as a
non-exempt hourly employee at the Tracy facility. Leprino does not
contest that the proposed class is ascertainable. Accordingly,
Judge Ishii finds that the proposed class is ascertainable.
C. Numerosity
Leprino contends that the proposed class is not sufficiently
numerous because the "Plaintiff has failed to identify any putative
class members that experienced an on-duty meal period or a late
meal period due to the policies and practices alleged." Judge Ishii
disagrees. Howell presented evidence that some of the hourly
employees' meal breaks were not timely, and that class members were
required to attend to their duties and the production line during
meal and rest periods. Accordingly, Judge Ishii finds the
numerosity requirement satisfied.
D. Commonality
The commonality requirement has similarities with and serves as the
foundation to the commonality-predominance requirement of Rule
23(b)(3). Because of the overlap between these two requirements,
Judge Ishii analyzes Rule 23(a)(2)'s commonality requirement when
het analyzes Rule 23(b)(3)'s commonality-predominance requirement.
E. Typicality
Leprino does not contest Howell's assertion that his claims are
typical of those of the class. Howell has alleged and produced
evidence showing that he and other putative class members suffered
the same or similar injuries. Thus, Howell's allegations and
proffered evidence satisfy the typicality requirement.
F. Adequacy of representation
Adequate representation depends on, among other factors, an absence
of antagonism between representatives and absentees, and a sharing
of interest between representatives and absentees. The standard for
adequacy splits into two prongs: adequacy of the proposed class
representative and adequacy of the attorneys seeking appointment as
class counsel.
Judge Ishii finds that (i) Howell is an adequate class
representative; (ii) Howell has prosecuted the action vigorously on
behalf of the class; and (iii) Howell's counsel, The Paris Law
Firm, are adequate representatives.
G. Commonality-Predominance
The commonality and predominance requirement of Rule 23(b)(3) asks
whether the class members' interests are "sufficiently cohesive to
warrant adjudication by representation. Howell presents two sets of
common questions -- one set concerning his "late meal break" claim
and one set concerning his "on-call break" claim.
Judge Ishii finds that Howell's late meal break theory does not
satisfy the commonality requirement, the question of whether common
questions predominate over individualized ones is moot. However, he
concludes that Howell's on-call break claim satisfies the
commonality and predominance requirements of Rule 23(a) and Rule
23(b)(3).
H. Superiority
Howell argues that class treatment is superior, and Leprino does
not substantively address the issue in opposition. Judge Ishii
finds the Rule 23(b)(3) factors weigh in favor of certification.
There is no indication of putative class members wanting to
individually control the prosecution of separate actions. Nor is
there indication of other actions raising the same issues based on
the same facts pertaining to Leprino's Tracy facility. There is
also no indication here that managing this action as a class action
would be unmanageable.
III. Order
Accordingly, Judge Ishii granted in part and denied in part
Howell's certification motion as follows:
a. Howell's late lunch breaks claim is not certified for
class aggregation under Rule 23;
b. Howell's on-call breaks claim is certified for class
aggregation under Rule 23(b)(3);
c. The class is defined as follows: "All non-exempt hourly
workers who are currently employees, or formerly have been
employed, as non-exempt hourly employees at Leprino's Tracy plant
in Tracy, California, at any time within four years prior to the
filing of the original complaint until the date the Court grants
certification."
d. Andrew Howell is appointed as the class representative.
e. The Parris Law Firm and The Downey Law Firm are appointed
as the class counsel.
Judge Ishii denied Leprino's Motion to Strike.
The parties must promptly meet and confer about the submission of a
joint stipulated class notice and distribution plan. Within 21 days
of the Order, the parties must FILE either a stipulated class
notice and distribution plan or a notice that no stipulation can be
agreed to. If the parties cannot agree to a class notice or
distribution plan, then Howell must FILE a proposed class notice
and distribution plan within 36 days of the Order, and Leprino will
have 14 days following Howell's filing to file any objections, and
Howell will have seven days following Leprino's filing to FILE a
reply.
The case is referred back to the assigned magistrate judge for
further scheduling and other proceedings consistent with the
Order.
A full-text copy of the Court's March 22, 2022 Order is available
at https://tinyurl.com/bdfwyr7p from Leagle.com.
LULAS GARDEN: Jackson Files ADA Suit in S.D. New York
-----------------------------------------------------
A class action lawsuit has been filed against Lulas Garden Inc. The
case is styled as Sylinia Jackson, on behalf of herself and all
other persons similarly situated v. Lulas Garden Inc., Case No.
1:22-cv-02561 (S.D.N.Y., March 29, 2022).
The lawsuit is brought over alleged violation of the Americans with
Disabilities Act.
Lula's Garden -- https://www.lulasgarden.com/ -- is a succulent
gifting company that sends out eco-friendly succulent gardens
potted in a one-of-a-kind gift box.[BN]
The Plaintiff is represented by:
Jeffrey Michael Gottlieb, Esq.
Michael A. LaBollita, Esq.
GOTTLIEB & ASSOCIATES
150 E. 18th St., Suite PHR
New York, NY 10003
Phone: (212) 228-9795
Email: nyjg@aol.com
michael@gottlieb.legal
MARS PETCARE: Court Narrows Warranty Claims in Bakopoulos Suit
--------------------------------------------------------------
In the case, JOHN BAKOPOULOS, et al., Plaintiffs v. MARS PETCARE
US, INC., Defendant, Case No. 20 CV 6841 (N.D. Ill.), Judge Manish
S. Shah of the U.S. District Court for the Northern District of
Illinois, Eastern Division, granted in part and denied in part
Mars' motion to dismiss the warranty claims alleged in the second
amended complaint.
I. Introduction
Defendant Mars manufactures and markets various dog foods. The
Plaintiffs bought Mars's products -- branded as Nutro Limited
Ingredient Diets -- but claim that the dog foods weren't as
advertised because they included wheat, soy, and chicken. The
Plaintiffs want to represent a class of consumers and bring claims
for breach of express and implied warranties, violation of the
Illinois Consumer Fraud and Deceptive Business Practices Act, and
unjust enrichment. Mars moves to dismiss the warranty claims
alleged in the second amended complaint.
II. Background
The Plaintiffs are five dog owners who bought the Nutro Limited
Ingredient Diets foods. They paid more for Mars's products than for
competitors', having viewed Mars's representations and relied on
them. Plaintiffs Jeter and O'Connor purchased just one type of the
Nutro Limited Ingredient Diets: The Adult Lamb & Sweet Potato Grain
Free Recipe dog food. Jeter's and O'Connor's requirements for
Mars's products were that the dog foods didn't include wheat, soy,
or chicken, and that they were limited in their ingredients.
The problem, according to the Plaintiffs, is that Mars's products
included chicken, wheat, and soy. They conducted a Q-PCR DNA
analysis of Mars's dog foods, and found that they contained
"significant" amounts of these ingredients.
The Plaintiffs want to represent a class of similarly situated
consumers, and bring five claims against Mars. All the Plaintiffs
allege a violation of the Illinois Consumer Fraud Act and unjust
enrichment. Plaintiffs Jeter and O'Connor also bring state-law
claims for breaches of express and implied warranties and related
federal claims under the Magnuson-Moss Warranty Act.
In the second motion to dismiss, Mars moves to dismiss the warranty
claims. The original plaintiffs conceded the dismissal of warranty
claims in their first amended complaint because they didn't provide
Mars with the required pre-suit notice. Judge Shah declined to
substitute Plaintiffs Jeter and O'Connor into the case at that
stage, and instead they were added as parties to the suit in the
second amended complaint. The issues now are whether Jeter and
O'Connor provided Mars with the requisite notice for their warranty
claims, and whether they have stated any claim for breach of
warranty.
III. Analysis
A. Notice
The Defendants argue that all of the warranty claims should be
dismissed because Jeter and O'Connor didn't provide the required
pre-suit notice for their claims. Mars argues that by providing
notice of their claims just days before they asked to be added to
ongoing litigation, Jeter and O'Connor didn't give pre-suit notice
in good faith.
Judge Shah opines that given the timing of the alleged notice and
Jeter and O'Connor's request to join the suit, it seems likely that
the Plaintiffs didn't give notice in the spirit contemplated by the
U.C.C. But more than six months passed before the Plaintiffs were
actually added to the lawsuit, giving Mars an opportunity to engage
with Jeter and O'Connor about their warranty claims. Whether notice
of the warranty claims was legally sufficient is debatable, which
means that the adequacy of pre-suit notice isn't grounds on which
to dismiss these claims now.
B. Express Warranty
Mars argues that the Plaintiffs' express warranty claims should be
dismissed because Jeter and O'Connor haven't alleged what level of
the offending ingredients was harmful to pets, or that Mars's
products actually included that amount of wheat, soy, or chicken.
But Mars is mistaken about the affirmations of fact at issue, Judge
Shah finds. He says, while the Plaintiffs bought Nutro Limited
Ingredient Diets foods seeking health benefits for their pets, the
express warranties on which they sue were Mars's affirmations (made
on product packaging, through marketing, advertising, and
promotion) that its dog foods were "limited ingredient," and that
they contained "no corn, wheat, soy," or chicken. The Plaintiffs
allege that these representations were a basis of the bargain, and
that Mars breached these affirmations because the products
contained "significant amounts" of these ingredients. Those
allegations are enough to make out a claim for breach of express
warranty.
Mars also challenges the express warranty claims because plaintiffs
bought the dog foods from third-party retailers, not directly from
Mars. However, the exception to the privity requirement applies.
Jeter and O'Connor allege that Mars's marketing, packaging, and
promotion included specific, written affirmations about the Nutro
foods. The complaint says that the Plaintiffs saw those
affirmations, relied on them, and bought Mars's products because of
them. Mars's written affirmations in its marketing materials gave
rise to an express warranty, and so the Plaintiffs weren't required
to allege privity with Mars.
The motion to dismiss the state-law express warranty claims is
denied.
C. Implied Warranty
Mars argues that the state-law implied warranty claims should also
be dismissed, and for the same reasons discussed: Inadequate
allegations and a lack of privity.
Judge Shah opines that the Plaintiffs have adequately alleged that
the dog food wasn't merchantable because it wasn't fit for the
ordinary purpose of limited ingredient dog foods, namely, to limit
pets' exposure to certain ingredients. But, Jeter and O'Connor
don't allege any exception to the privity requirement for their
implied warranty claim. Privity of contract is required in Illinois
to recover economic damages for breach of implied warranty. Jeter
and O'Connor haven't shown that they were in privity with Mars, or
explained how any exception to that requirement applies. Hence, the
motion to dismiss is granted as to the state-law implied warranty
claims.
D. Magnuson-Moss Warranty Act
The federal warranty claims in the case rise and fall with the
Plaintiffs' state-law claims. Because the Plaintiffs' express
warranty claims survive under Illinois law, their parallel claims
under the Magnuson-Moss Warranty Act survive as well. The federal
implied warranty claims are dismissed.
IV. Conclusion
Mars's motion to dismiss is granted in part and denied in part. The
Plaintiffs' express warranty claims are not dismissed. The implied
warranty claims are dismissed without prejudice, as are any claims
by Jeter and O'Connor for products they did not purchase. The
parties' next status report on discovery progress remains due on
May 11, 2022.
A full-text copy of the Court's March 22, 2022 Memorandum Opinion &
Order is available at https://tinyurl.com/4we2jj45 from
Leagle.com.
MEDICAL REVIEW INSTITUTE: Dean Files Suit in D. Utah
----------------------------------------------------
A class action lawsuit has been filed against Medical Review
Institute of America. The case is styled as Patricia A. Dean, for
herself and on behalf of all others similarly situated v. Medical
Review Institute of America, Case No. 2:22-cv-00226-TS-DAO (D.
Utah, March 29, 2022).
The nature of suit is stated as Other P.I. for Personal Injury.
Medical Review Institute of America, LLC (MRIoA) --
https://www.mrioa.com/ -- is the top medical review company in the
United States.[BN]
The Plaintiff is represented by:
James E. Magleby, Esq.
Jennifer F. Parrish, Esq.
MAGLEBY CATAXINOS & GREENWOOD
141 W Pierpont Ave.
Salt Lake City, UT 84101
Phone: (801) 359-9000
Fax: (801) 359-9011
Email: magleby@mcgiplaw.com
parrish@mcgiplaw.com
MHC OPERATING: Coquina Assoc. Suit Moved to Florida Circuit Court
-----------------------------------------------------------------
Judge Marcia Morales Howard of the U.S. District Court for the
Middle District of Florida, Jacksonville Division, remanded the
case, COQUINA CROSSING HOMEOWNERS ASSOCIATION, INC., Plaintiff v.
MHC OPERATING LIMITED PARTNERSHIP, et al., Defendants, Case No.
3:21-cv-84-MMH-LLL (M.D. Fla.), to the Circuit Court, Seventh
Judicial Circuit, in and for St. Johns County, Florida.
I. Background
On Sept. 29, 2020, the Association initiated the action in the
Circuit Court, Seventh Judicial Circuit, in and for St. Johns
County, Florida, alleging claims under the Florida Antitrust Act,
Florida Statute section 542.18, and the Americans with Disabilities
Act, 42 U.S.C. Sections 12101, et seq. ("ADA"). The Defendants
removed the action to the Court on Jan. 22, 2021, asserting that
the Court had subject matter jurisdiction over the ADA claim, as it
raised a question of federal law, and supplemental jurisdiction
over the state law claim. In addition, the Defendants asserted that
the Court had diversity jurisdiction over the action based upon the
provisions of the Class Action Fairness Act of 2005 ("CAFA").
However, on Feb. 25, 2021, the Association filed an amended
complaint omitting its federal ADA claim. With the elimination of
the Association's ADA claim, the Court was no longer confident of
the existence of original subject matter jurisdiction.
Specifically, the Court questioned whether CAFA provided a basis
for the Court to exercise diversity jurisdiction over the
Association's state law antitrust claim. It further questioned
whether, if CAFA did not support such an exercise of jurisdiction,
the Court should continue to exercise supplemental jurisdiction
over that purely state law claim.
As such, on April 8, 2021, the Court ordered the parties to show
cause why the action should not be remanded to the state court. On
April 26, 2021, the parties filed responses to the Order to Show
Cause. Thus, the Court's sua sponte jurisdictional inquiry is ripe
for resolution.
In the Amended Complaint, the Association asserts a single state
law antitrust claim in its representative capacity on behalf of the
homeowners in the Coquina Crossing Mobile Home Park ("Park")
against Defendants MHC Operating Limited Partnership, Equity
LifeStyle Properties, Inc., MHC Coquina Crossing, L.L.C.; several
of the companies' officers and agents, Eric Zimmerman, Gena May,
Jared Lambert, William Smoljanovich, and Marta Lindstrom; and the
companies' lawyer, J. Allen Bobo and his firm Lutz, Bobo & Telfair,
P.A.
At the time the Defendants removed the case to the Court, in
addition to the now deleted federal question jurisdiction, they
asserted that the Court has subject matter jurisdiction over the
action based on CAFA because the Association's claim was brought as
a "class action." In doing so, they asserted that CAFA applies
because the Association's claim was filed under a state statute
that is "similar" to the federal class action rule "authorizing an
action to be brought by 1 or more representative persons as a class
action." They further asserted that CAFA's requisite amount in
controversy is met because the Association "seeks compensatory
damages equal to the alleged amount of increased lot rentals,
exemplary and trebled damages under the Florida Antitrust Act,
injunctive relief ordering Defendants to make substantial
modifications to the Park, attorneys' fees, and costs."
After the Court issued its Order to Show Cause, the Defendants
filed the Defendants' Response in which they summarily reassert
these same arguments. Alternatively, they argue that if the
Association's civil action does not fall within CAFA jurisdiction,
the Court nonetheless should exercise its discretion to retain
jurisdiction over the state law claim pursuant to 28 U.S.C. Section
1367.
In its response to the Court's Order to Show Cause, the Association
argues that the Defendants cannot support their argument that the
lawsuit was filed by a sufficient number of "persons" to fall
within CAFA's jurisdiction. It also argues that the Court should
decline to exercise Section 1367 supplemental jurisdiction over the
state law antitrust claim for reasons of comity, convenience, and
fairness, and the action should be remanded to state court.
In responding to the Order to Show Cause regarding CAFA
jurisdiction, neither side sufficiently briefed the issue of
whether the Association's "civil action" is a "class action" as
defined by CAFA or a "representative" action as alleged by the
Association in the Amended Complaint. Despite the fact that the
Defendants bear the burden to establish that the Court has CAFA
jurisdiction, they devote less than a page of their response to the
definitional "class action" issue which they contend authorizes the
Court's jurisdiction. And the Association largely ignores the issue
arguing instead only that because its suit is brought as a
representative action, the Association itself is the sole named
"person," and as such, it does not meet the numerosity requirement
of CAFA.
In the Amended Complaint, the Association specifically states that
its Florida Antitrust Act claim is brought -- not as a "class
action" -- but as a "representative action" on "behalf of itself"
and the mobile homeowners in the Park. The Association asserts that
it is an "incorporated mobile homeowner association and the legal
representative" of "all of the mobile homeowners" in the Coquina
Crossing Mobile Home Park for "all matters" of "common interest
relating to the Florida Mobile Home Act" pursuant to "Florida
Statute Section 723.075(1) and 723.076(1)." Additionally, the
Association relies on Rule 1.222 of the Florida Rules of Civil
Procedure (Florida Rule(s)).
The Defendants contend that the Association's lawsuit falls within
the definition of a "class action" under CAFA based upon the
combined effect of Florida Statute section 723.075(1) and Florida
Rule 1.222. They explain that pursuant to section 723.075(1), the
Association is the representative of all mobile homeowners on
matters governed by the Florida Mobile Home Act. They further
assert that the Florida Supreme Court specifically adopted Florida
Rule 1.222 as a special rule of "judicial class action procedure"
to authorize a homeowners' association to bring a class action on
behalf of all mobile homeowners "concerning matters of common
interest."
According to the Defendants, this action is a "class action"
because the Association asserts standing as "a representative of
the homeowners" via the "combined operation" of section 723.075(1)
and Florida Rule 1.222, which, they argue, operate as the
equivalent of Rule 23 for purposes of CAFA.
With this background, Judge Howard considers whether CAFA
authorizes an exercise of subject matter jurisdiction over the
state law claim in the Association's Amended Complaint.
II. Discussion
A. CAFA Subject Matter Jurisdiction
Pursuant to CAFA, a civil action not filed under Rule 23, Federal
Rules of Civil Procedure (Rule(s)), will be considered a "class
action" if it is filed under a state "statute or rule of judicial
procedure" similar to Rule 23. 28 U.S.C. Section 1332(d)(1)(B).
Thus, the question for the Court is whether the Florida law and
Florida Rule on which the Association bases its representation of
homeowners are "similar" to the federal class action rule, Rule
23.
Judge Howard finds that Florida Rule 1.222 and section 723.075(1),
whether individually or "in combination," are not "similar" to Rule
23. Instead, Florida Rule 1.222 specifically exempts homeowners'
associations from the class action mechanisms of Florida's standard
class action rule -- which is modeled after Rule 23 -- and section
723.075(1) allows mobile homeowners' associations in a
representative capacity without satisfying any requirements similar
to those in Rule 23. Because she finds that neither the Florida
rule or statute is a class action rule or "similar" to Rule 23, the
federal class action rule, she holds that the Association's case is
not a "class action" as defined under CAFA. As such, the Court
lacks original subject matter jurisdiction over the claim presented
in the case.
B. Exercise of Jurisdiction Under 28 U.S.C. Section 1367
Having determined that the claim remaining before the Court
provides no basis for the exercise of original subject matter
jurisdiction, Judge Howard must consider whether to exercise
supplemental jurisdiction over the Association's state law
antitrust claim. "The decision to exercise supplemental
jurisdiction over pendent state claims rests within the discretion
of the district court."
The Defendants argue that even if the Court lacks jurisdiction over
the Association's single state law claim under CAFA, the Court
should exercise its discretion to retain supplemental jurisdiction
pursuant to 28 U.S.C. Section 1367(a). The Association argues that
the Court should decline to exercise jurisdiction over the state
law antitrust claim because the ADA claim was eliminated early in
the litigation.
Upon due consideration, Judge Howard finds that considerations of
judicial economy, comity, convenience and fairness weigh against
retaining jurisdiction over the Association's Florida law antitrust
claim. She notes that the case has not been pending for an extended
period of time, and the Defendants' litigation in federal court has
not moved beyond determining whether the Court has subject matter
jurisdiction based on CAFA. The Court has not issued a scheduling
order or reached any dispositive rulings pertaining to the state
law antitrust claim. Thus, the procedural posture of the case also
weighs in favor of declining jurisdiction to allow the case to
proceed fully in state court.
Upon consideration of the Section 1367 factors and the "traditional
rationales for pendent jurisdiction, including judicial economy and
convenience," Judge Howard declines to exercise supplemental
jurisdiction over the Association's remaining state law claim.
Accordingly, the Association's state law claim is due to be
remanded to the Circuit Court of the Seventh Judicial Circuit, in
and for St. Johns County, Florida.
III. Conclusion
Based on the foregoing, Judge Howard remanded the case to the
Circuit Court of the Seventh Judicial Circuit, in and for St. Johns
County, Florida.
The Clerk of the Court is directed to transmit a certified copy of
the Order to the clerk of that court and close the file.
A full-text copy of the Court's March 22, 2022 Order is available
at https://tinyurl.com/bddupxmc from Leagle.com.
MICHIGAN: Court Denies Bids to Certify Class in Bell v. Washington
------------------------------------------------------------------
The U.S. District Court for the Eastern District of Michigan,
Southern Division, denies the Plaintiffs' motions for class
certification in the lawsuit titled TYRONE BELL, et al., Plaintiffs
v. HEIDI WASHINGTON, et al., Defendants, Case Nos. 21-10399,
21-10705 (E.D. Mich.).
Heidi E. Washington has served as the director of the Michigan
Department of Corrections since July 2015.
I. Introduction
The lawsuits are companion prisoner civil rights cases filed under
42 U.S.C. Section 1983. The Plaintiffs were all prisoners confined
at the Michigan Department of Corrections (MDOC) Saginaw
Correctional Facility (SRF) during late 2020. Tyrone Bell and a
partially overlapping group of plaintiffs filed joint civil rights
complaints in two separate actions, 21-CV-10399 (Case 1) and
21-CV-10705 (Case 2). In both actions, the Plaintiffs assert that
the prison staff were deliberately indifferent to the dangers posed
to prisoners by the Coronavirus or COVID-19. They seek a variety of
injunctive relief to safeguard themselves and other SRF prisoners
from these dangers, as well as compensatory and punitive damages.
The Court consolidates Case 1 and Case 2, severs Bell from the
remaining Plaintiffs and dismisses the other 119 Plaintiffs from
the case without prejudice to each Plaintiff filing his own
separate complaint, and denies the Plaintiffs' motion for class
certification.
II. Background
Mr. Bell and three other SRF inmates initiated Case 1, and these
four Plaintiffs plus 116 other SRF inmates joined in filing Case 2.
The operative complaints in both actions assert nearly identical
allegations.
In December 2020, the Plaintiffs contend that staff at SRF
permitted insufficiently quarantined COVID-19-infected inmates back
into the general prison population. They also allege that prison
staff permitted newly identified COVID-19 positive inmates to
return to their cells and communal areas, where they remained for
several hours before being isolated. They claim that non-infected
inmates were moved into cells, which had housed infected inmates
without disinfecting those cells. According to the Plaintiffs,
these practices resulted in the significant COVID-19 outbreak in
the SRF unit in which the Plaintiffs were housed, and in the
Plaintiffs contracting COVID-19.
III. Discussion
A. Consolidation
Rule 42(a)(2) of the Federal Rules of Civil Procedure permits a
district court to consolidate actions, which involve a common
question of law or fact. Case 1 and Case 2, with nearly identical
allegations, involve common questions of law and fact.
Consolidating these actions prior to initial screening is
appropriate. Accordingly, the Court consolidates Case 1 and Case 2,
designates Case 2 as the lead case, and orders Case 1 closed.
B. Misjoinder of the Plaintiffs
Rule 20(a)(1) of the Federal Rules of Civil Procedure permits
plaintiffs to join together and raise their claims in one action if
they assert any right to relief jointly, severally, or in the
alternative with respect to or arising out of the same transaction,
occurrence, or series of transactions or occurrences.
District Judge Shalina D. Kumar notes that difficulties with
multiple-plaintiff prisoner litigation include the need for each
plaintiff to sign every pleading, inviting Rule 11(a) violations if
any joined pro se plaintiff fails to do so. The markedly transitory
nature of prison populations also makes joint litigation
difficult.
The Court notes that nearly every pitfall of multiple
prisoner-plaintiff joinder identified in cited cases has already
surfaced in this case. First, the Plaintiffs' pleadings and other
filings lack the signatures of many of the named Plaintiffs, with
even the initial complaint missing multiple signatures. Second, at
least 10 Plaintiffs are no longer housed in SRF, having been
transferred to other correctional facilities or released.
Permitting over 100 plaintiffs, distributed over a likely
increasing number of institutions, to proceed in a single action
would be untenable, Judge Kumar opines. Likewise, conducting 120
individualized analyses of exhaustion of administrative remedies
within the same case would be unwieldly and impractical.
The collection of the Court's filing fee from so many
prisoner-Plaintiffs has proved difficult in this case, as well,
Judge Kumar notes. Initially, only a few of the Plaintiffs paid
their pro rata share of the full filing fee and administrative fee.
Even if the joinder of this multitude of prisoner-plaintiffs was
not intended to circumvent the filing fee requirements under 28
U.S.C. Section 1915, the sheer number of joined plaintiffs makes it
impossible for the Court to assess if the filing fee requirements
and the three-strike rule have been thwarted.
In sum, the Court finds that the circumstances of confinement are
not compatible with the joinder of multiple prisoners as plaintiffs
in the lawsuit. Because dismissal may have potentially adverse
statute-of-limitation consequences, a district court's
discretionary decision to remedy misjoinder by dropping or
dismissing a party may be exercised only if just; a dismissal is
just if it is without prejudice and the dismissed party will not
lose the ability to prosecute an otherwise timely claim.
In the case, a dismissal without prejudice of all but the
first-named plaintiff, Bell, will not preclude the other plaintiffs
from pursuing their claims individually in separate actions, Judge
Kumar holds. A dismissal will not trigger statute-of-limitation
complications because the Plaintiffs filed this action shortly
after the claims accrued and Michigan law provides for tolling of
the limitations period while an earlier action was pending which
was later dismissed without prejudice.
Thus, the Court will dismiss all the Plaintiffs from the action
other than the first-named plaintiff, Tyrone Bell. The dismissed
Plaintiffs may file their own separate actions individually, paying
the required filing fee in full or as dictated by 28 U.S.C. Section
1915.
In the surviving consolidated case, Bell has failed to pay the
filing fee and the administrative fee or to apply to proceed
without prepayment of the filing fee, with the required supporting
papers. Accordingly, the Court orders that within 30 days from the
date of this order, Bell must either pay the $350 filing fee and
the $52 administrative fee or, alternatively, file an affidavit of
indigence, a current certification/business manager's account
statement, and a statement of trust fund account (or institutional
equivalent) for the six-month period immediately preceding the
filing of the complaint.
If Mr. Bell fails to pay the fees or to file the required
documents, the Court must presume that he is not proceeding without
prepayment of the fees, assess the fees, and dismiss the case for
want of prosecution.
C. Certification of Class
In tacit acknowledgment of the impracticality of a 120-plaintiff
action, Bell moves to certify the Plaintiffs and other similarly
situated SRF prisoners as a class under Rule 23 of the Federal
Rules of Civil Procedure.
For a case to proceed as a class action, the Court must be
satisfied that the putative class meets these enumerated
requirements, generally referred to as numerosity, commonality,
typicality, and adequacy of representation. The Plaintiffs bear the
burden of establishing the right to class certification.
Judge Kumar notes that the Sixth Circuit has established that pro
se litigants cannot adequately represent the interests of a class,
citing Garrison v. Mich. Dep't of Corr., 333 F. App'x 914, 919 (6th
Cir. 2009). Because Bell (or any of the other original Plaintiffs)
is an incarcerated pro se litigant, the Court finds that he is not
an appropriate representative of a class.
Therefore, the Court will deny the request for class
certification.
IV. Conclusion
For the reasons set forth, it is ordered that Case Numbers
21-CV-10399 and 21-CV-10705 are consolidated into one case. Case
Number 21-CV-10399 is closed and future filings will only be made
in Case Number 21-CV-10705.
Plaintiff Tyrone Bell's case is severed from the other named
Plaintiffs. All other Plaintiffs are dismissed from this action,
without prejudice to filing individual complaints on their own
behalf.
The motions for class certification are denied.
No later than 30 days from the date of this order, Bell must either
pay the $350 filing fee and the $52 administrative fee or,
alternatively, apply to proceed without prepayment of the filing
fee and file the required supporting affidavit of indigence, a
current certification/business manager's account statement, and a
statement of trust fund account (or institutional equivalent) for
the six-month period immediately preceding the filing of the
complaint.
A full-text copy of the Court's Opinion and Order dated March 17,
2022, is available at https://tinyurl.com/yckshvwy from
Leagle.com.
MYCRO LLC: Tatum-Rios Files ADA Suit in S.D. New York
-----------------------------------------------------
A class action lawsuit has been filed against Mycro, LLC. The case
is styled as Lynnette Tatum-Rios, individually and on behalf of all
other persons similarly situated v. Mycro, LLC doing business as:
Mycro, Case No. 1:22-cv-02545 (S.D.N.Y., March 29, 2022).
The lawsuit is brought over alleged violation of the Americans with
Disabilities Act.
Mycro -- https://letsmycro.com/ -- is a collection of
nutrient-dense, adaptogenic mushroom honey superfoods to improve
Vitality, Cognition, and Immunity in the brain and body.[BN]
The Plaintiff is represented by:
Christopher Howard Lowe, Esq.
LIPSKY LOWE LLP
420 Lexington Avenue, Suite 1830
New York, NY 10170
Phone: (212) 764-7171
Email: chris@lipskylowe.com
NATIONAL UNION: Supreme Court Affirms Judgment in First Solar Suit
------------------------------------------------------------------
In the case, FIRST SOLAR, INC., Plaintiff Below, Appellant, v.
NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PA and XL
SPECIALTY INSURANCE COMPANY, Defendants Below, Appellees, Case No.
217, 2021 (Del.), Judge Collins J. Seitz Jr. of the Supreme Court
of Delaware affirmed the judgment of the Superior Court that the
follow-on action was "fundamentally identical" to the first-filed
action and, therefore, excluded from coverage under the
later-issued policies.
I. Introduction
In this appeal, the Supreme Court reviews whether a securities
class action and a later follow-on action were related actions,
such that the follow-on action was excluded from insurance coverage
under later-issued policies. The Superior Court found that the
follow-on action was "fundamentally identical" to the first-filed
action and therefore excluded from coverage under the later-issued
policies.
II. Background
According to the allegations of the complaint, First Solar, Inc.
manufactures solar panels and sells photovoltaic ("PV") power
plants. It competes in the renewable energy space and has installed
PV facilities throughout the world. In March 2012, First Solar
stockholders filed a class action lawsuit against the company
alleging that it violated federal securities laws by making false
or misleading public disclosures. The parties refer to the original
suit as the Smilovits Action.
The Smilovits plaintiffs alleged that from April 30, 2008, to Feb.
28, 2012, First Solar: (1) misrepresented that it had a winning
formula for reducing manufacturing costs so rapidly and
dramatically as to make solar power competitive with fossil fuels;
(2) perpetuated its fraudulent self-portrayal by concealing and
misrepresenting the nature and extent of major manufacturing and
design defects in its solar modules; (3) misrepresented its
financials; (4) artificially inflated its stock prices; (5) allowed
individuals to engage in insider trading; (6) manipulated the
cost-per-watt metrics; and (7) understated its expenses in
violation of General Accepted Accounting Principles (GAAP).
National Union provided insurance coverage for the Smilovits Action
under a 2011-12 $10 million "claims made" directors and officers
insurance policy.
On June 23, 2015, while the Smilovits Action was pending, First
Solar stockholders who opted out of the Smilovits Action filed what
has been referred to as the Maverick Action. The Maverick Action
alleged violations of the same federal securities laws as the
Smilovits Action, as well as violations of Arizona statutes and
claims for fraud and negligent misrepresentation.
As summarized by the Superior Court, the plaintiffs in the Maverick
Action alleged that from May 2011 to December 2011, First Solar:
(1) misrepresented how close it was to achieving grid parity -- the
point at which solar electricity became cost competitive with
conventional methods of producing electricity without government
subsidies; (2) concealed defects in First Solar's panels and
manufacturing process; (3) concealed problems with First Solar's
modules that resulting [sic] in increased costs; (4) manipulated
the cost-per-watt metrics; (5) misrepresented the value of a
pipeline project; (6) falsely represented that it was on track to
meet its financial targets; (7) refused to adjust its targets in
light of an influx of panels globally; (8) issued false financials
that violated GAAP; and (9) artificially inflated its stock price.
When the plaintiffs filed the Maverick Action in 2015, First Solar
had a $10 million "claims made" policy with National Union for
2014-15 (the "Primary Policy") and a $10 million layer of excess
coverage with XL Specialty Insurance Company ("XL Specialty" and
the "XL Specialty Policy"). The 2014-15 Primary Policy excluded
coverage for "Related Claims." Applied in the instant case, the
Related Claim Exclusion bars coverage under the 2014-15 policies if
the Maverick Action is a Related Claim to the Smilovits Action.
At first, First Solar obtained defense coverage for the Maverick
Action under its 2011-12 policies. In 2015, First Solar exhausted
all coverage under the 2011-12 National Union policy. Chubb, an
excess insurer next in line after the 2011-12 National Union
policy, accepted coverage of the Maverick Action because "the new
Maverick litigation is based on the same facts and circumstances of
the previously noticed Smilovits class action complaint," and as
such, "Chubb treats this matter as a related claim."
Chubb provided coverage for the Maverick Action as the litigation
progressed. In the Smilovits Action, First Solar filed a "Motion to
Transfer Related Case" to litigate both Actions before the same
judge. It argued that "the substantial overlap in legal and factual
issues and the substantial overlap in parties weigh in favor of
transferring the Maverick Action to the Court." The court granted
the motion.
After years of litigation and after incurring over $80 million in
defense costs, First Solar settled the Smilovits Action on Jan. 5,
2020 for $350 million. All primary and excess insurers under the
2011-12 policies paid their policy limits. Having settled the
Smilovits Action and exhausted all coverage under the 2011-12
policies, First Solar began to arbitrate a settlement of the
Maverick Action. It sought coverage under the 2014-15 Primary
Policy and the XL Specialty Policy (the "Policies") for the
Maverick Action. First Solar eventually settled the Maverick Action
for $19 million without a coverage commitment from National Union
or XL Specialty (collectively, the "Insurers"). After the Insurers
denied coverage under the Policies, First Solar filed suit in the
Superior Court for breach of contract and declaratory relief that
the Insurers were obligated to provide coverage under the
Policies.
The Superior Court litigation focused on the relatedness of the
Smilovits and Maverick Actions and whether the Maverick Action fell
within the Primary Policy exclusion for Related Claims. Relying on
Pfizer Inc. v. Arch Insurance Co., the Superior Court held that a
complaint is "related to" or "arises out of" a previous complaint
if the claims are "fundamentally identical." Among other aspects,
the lawsuits stemmed from the same original suit, were against
"identical defendants," overlapped in time, contained allegations
of the same securities law violations, and relied on the same
specific disclosures. Also, the court found that the underlying
wrongful conduct was the same. While there were some differences,
including the theory of damages claimed by the Maverick plaintiffs,
the court held that the differences did not outweigh the
similarities. It concluded that the Maverick Action was
fundamentally identical to the Smilovits Action and was excluded as
a Related Claim under the Policies.
III. Discussion
On appeal, First Solar argues that the Superior Court ruled
incorrectly that the Smilovits Action and the Maverick Action were
fundamentally identical. It claims that the Maverick Action focused
on grid parity and the company's "Systems Business," as shown by
the Action's damage claims and reliance on First Solar's "objective
to achieve grid parity with respect to utility-scale solar power
plant facilities in the future." By contrast, the Smilovits Action
focused on "misrepresentations regarding the historical cost of
individual solar modules," a temporally and categorically distinct
part of the company's business. First Solar contends that the
Actions merely share "thematic similarities," not "fundamental
identity." Finally, it argues that, even if the claims overlap,
parts of the Maverick Action seek to recover for separate Wrongful
Acts (specific statements and misrepresentations) that are not
excluded by the Primary Policy.
The Insurers counter that the Maverick Action meets the
"fundamentally identical" standard because it is directed to the
same Wrongful Act and fraudulent scheme as the Smilovits Action.
They argue further that the fundamentally identical standard has
been taken out of context and misapplied by the Superior Court.
According to the Insurers, the meaning of "related to" should come
from the language of the insurance policy. The Insurers also
contend that any non-overlapping claims would only be distinct,
non-excluded causes of action if the underlying wrongful conduct
was different, whereas here the complaints are directed to the same
fraudulent scheme.26 And finally, National Union argues that even
if the Maverick Action is not barred by relation back, the Specific
Matter Exclusion in the Primary Policy independently precludes
coverage.
In response to the Insurers' argument directed to the
"fundamentally identical" relatedness standard, First Solar
contends that stare decisis and policy considerations should
control but does not dispute that Delaware decisions have
substituted a "fundamentally identical" standard for the language
of the insurance policies. Instead, it argues that the plain
language of the Primary Policy's relatedness standard would render
coverage illusory.
On appeal, the Supreme Court reviews "the Superior Court's grant of
a motion to dismiss" de novo. It also reviews the Superior Court's
interpretation of an insurance policy de novo.
A.
As an initial matter, the Supreme Court agrees with the Insurers
that the Superior Court's use of the "fundamentally identical"
standard to assess the relatedness of the Smilovits and Maverick
Actions disregards the plain language of the insurance policy. The
error can be traced to a misunderstanding of a Superior Court
decision that addressed the meaning of "arising out of" or "related
to" for coverage of "related" complaints and claims.
But as a recent Superior Court decision observed about the error,
"neither the Delaware Supreme Court nor any other jurisdiction has
adopted 'fundamental identity' as the standard governing all
relatedness inquiries, regardless of the contractual language at
issue." With all insurance policies, "the scope of an insurance
policy's coverag is prescribed by the language of the policy." And
absent "ambiguity, Delaware courts interpret contract terms
according to their plain, ordinary meaning." Whether a claim
relates back to an earlier claim is decided by the language of the
policy, not a generic "fundamentally identical" standard.
B.
First Solar argues that the Smilovits Action focused on
cost-per-watt representations while the Maverick Action focused on
grid parity, which was understood to be a future objective. It also
draws a distinction between the "Components Business" alleged in
the Smilovits Action (individual PV cells or solar modules) and the
"Systems Business" alleged in the Maverick Action (the PV
facilities built by First Solar). These distinctions, according to
First Solar, show that the Smilovits Action centered on "historical
performance" representations while the Maverick Action dealt with
predictions of grid parity, or "forward-looking statements."
These differences are not, however, meaningful to the relatedness
inquiry. While there might be minor differences -- like the
disparity between a certain cost-per-watt level and grid parity --
the Supreme Court holds that the Actions focus on First Solar's
misrepresentations about the cost of solar power. Both Actions
allege violations of the same federal securities laws from this
wrongful conduct. In both cases, the plaintiffs allege that First
Solar made material misrepresentations regarding its solar power
capabilities as part of a fraudulent scheme to increase stock
prices.
Finally, if there is any remaining doubt about relatedness under
the Primary Policy language, the Supreme Court can rely on what
First Solar said about the two Actions when insurance coverage was
not at issue. First Solar agreed in another matter that the Actions
were nearly identical. In addition to seeking and receiving
coverage for the Maverick Action as an action related to the
Smilovits Action under its 2011-2012 policies, First Solar filed a
"Motion to Transfer Related Case" to litigate the two Actions
before the same judge. It argued that "the substantial overlap in
legal and factual issues and the substantial overlap in parties
weigh in favor of transferring the Maverick Action to the Court."
In its filings, First Solar claimed that the Maverick Action made
"nearly identical allegations" to other actions "asserting that
First Solar's stock price decline was somehow caused by a
fraudulent scheme to conceal the existence and costs of various
manufacturing deviations."
C.
First Solar also claims that even if the Actions are Related
Claims, the Actions have "distinct wrongful acts" such that
non-excluded separate claims exist. It asks the Supreme Court to
look at the individual misrepresentations -- for instance, the
specific statements made in conference calls and SEC filings -- as
separate Wrongful Acts under the Primary Policy. It contends that
all "non-overlapping alleged misrepresentations and corrective
disclosures are independent claims" that do not relate back and
must be covered under the Primary Policy.
But as the Superior Court ruled, the Wrongful Act is the fraudulent
scheme to inflate the price of First Solar's stock by making
misrepresentations about its solar power cost and efficiency. The
Smilovits Action and the Maverick Action include different
misrepresentations and evidence to support their claims -- not
different Wrongful Acts. It is analogous to United Westlabs, where
the Superior Court held that United Westlabs had "engaged in a
continuous series of related acts, constituting a single wrongful
act as defined by the" policy at issue, even though the complaints
spanned different time periods and included different allegations.
D.
Finally, First Solar claims in a footnote that the Superior Court
incorrectly applied the Relation Back Provision of the Primary
Policy instead of the Specific Matter Exclusion.
The Supreme Court holds that this argument was not sufficiently
briefed and is waived. But even so, the Primary Policy's Relation
Back Provision applies when two claims are related. Under the
Policy, "any Related Claim that is subsequently made against an
Insured will be deemed to have been first made at the time that
such previously reported Claim was first made." Claims first made
before the inception date of the Primary Policy "are not covered
under this policy." The Superior Court correctly applied the
Primary Policy language, because if the Maverick Action relates
back to the Smilovits Action, it is deemed "first made" at the time
of the Smilovits Action and thus "not covered under this policy."
Using the Primary Policy's Related Claim definition, the Maverick
Action raised claims "alleging, arising out of, based upon or
attributable to any facts or Wrongful Acts that are the same as or
related to those" raised in the Smilovits Action. Thus, the
Maverick Action Claim is deemed first made at the time of the
Smilovits Action and is excluded from coverage under the Related
Claim Exclusion of the Policies.
IV. Conclusion
The Supreme Court concludes that even though the Superior Court
applied an incorrect standard to assess the relatedness of the two
actions, it nonetheless affirmed the judgment of the Superior Court
because under either the erroneous "fundamentally identical"
standard or the correct relatedness standard defined by the
policies, the later-issued insurance policies did not cover the
follow-on action.
A full-text copy of the Court's March 22, 2022 Order is available
at https://tinyurl.com/2p94dt9h from Leagle.com.
Jennifer C. Wasson, Esquire, Carla M. Jones, Esquire, POTTER
ANDERSON & CORROON LLP, in Wilmington, Delaware, Adam S. Ziffer --
and Meredith Elkins -- Esquire (argued), and Meredith Elkins --
melkins@cohenziffer.com -- COHEN ZIFFER FRENCHMAN & MCKENNA LLP, in
New York City, Attorneys for Appellant First Solar, Inc.
Kurt M. Heyman, Esquire (argued) -- kheyman@hegh.law -- Aaron M.
Nelson, Esquire -- anelson@hegh.law -- HEYMAN ENERIO GATTUSO &
HIRZEL LLP, in Wilmington, Delaware, Scott B. Schreiber, Esquire,
Arthur Luk, Esquire , Omomah Abebe, Esquire, and Kolya D. Glick,
Esquire , ARNOLD & PORTER KAYE SCHOLER LLP, in Washington, D.C.,
Attorneys for Appellee National Union Fire Insurance Company of
Pittsburgh, PA.
John C. Phillips, Jr., Esquire -- jcp@pmhdelaw.com -- David A.
Bilson, Esquire -- dab@pmhdelaw.com -- PHILLIPS MCLAUGHLIN & HALL,
P.A., in Wilmington, Delaware, Charles C. Lemley, Esquire (argued),
Kim Melvin, Esquire, and Anna Schaffner, Esquire, WILEY REIN LLP,
in Washington, D.C., Attorneys for Appellee XL Specialty Insurance
Company.
NEW JERSEY: Court Consolidates Suits J.A. 2 and J.A. 3 v. NJDOE
---------------------------------------------------------------
In the case, J.A. and J.A., individually and on behalf of their
minor child J.A.; C.M., individually and on behalf of her minor
child L.S.; CH.M. and J.M., individually and on behalf of their
minor child R.M.; K.K-M., individually and as Kinship Legal
Guardian of the minor children RAC.M. and A.W.; M.D. and S.H.,
individually and on behalf of their minor child L.D.; and on behalf
of ALL OTHERS SIMILARLY SITUATED, Plaintiffs v. NEW JERSEY
DEPARTMENT OF EDUCATION; LAMONT REPOLLET, Commissioner of
Education; NEW JERSEY OFFICE OF ADMINISTRATIVE LAW; JEFFREY R.
WILSON, Administrative Law Judge and DOES 1 - 250 SIMILARLY
SITUATED ADMINISTRATIVE LAW JUDGES, Defendants, Case No.
1:18-cv-09580-NLH-MJS (D.N.J.), Judge Noel L. Hillman of the U.S.
District Court for the District of New Jersey granted in part and
denied in part the Plaintiffs' motion to consolidate the following
four cases that involve claims arising from New Jersey's
administrative process for adjudicating special education
disputes:
a. J.A., et al, v. NJDOE, et al., No. 1:18-cv-09580-NLH-MJS
("J.A. 1"),
b. J.A. et. al. v. Monroe Twp. Bd. of Ed., et al.,
No. 1:20-CV-09498-NLH-MJS ("J.A. 2"),
c. Joanna A. et. al. v. Monroe Twp. Bd. of Ed., et al.,
No. 1:21-CV-06283-NLH-MJS ("J.A. 3"); and
d. M.D., et al. v. Vineland City Bd. of Ed., et al.,
No. 1:19-CV-12154-NLH-MJS (the "M.D. Matter").
I. Background
The Plaintiffs in J.A. 1 filed a motion to consolidate the instant
matter with three other cases raising similar claims. They argue
that consolidation is appropriate because "the cases proposed to be
consolidated herein undeniably and substantially overlap both
factually and legally." They argue that because all of the cases
are "likely to seek discovery from the New Jersey Department of
Education ("NJDOE") and the New Jersey Office of Administrative Law
("OAL")" and because "all the Plaintiffs are likely to seek
expansive access, subject to an appropriate protective order, to
documents relating to the conduct of specific special education due
process hearings going back for several years and if those same
procedures were erroneously used in the individual cases."
J.A. 1 is a class action filed in 2018, which alleges violations by
the NJDOE such as systemic violation of the 45-day rule and
systemic violation of the hearing officer qualifications, violation
of the Plaintiffs' rights under 42 U.S.C. Section 1983, and seeks a
declaratory judgment and determination of federal preemption. The
Defendants in J.A. 1 are the NJDOE, OAL, and various individuals
who work for the entities sued in their official capacities
(together, the "State Defendants"). In June 2020, the Court denied
the motion to dismiss by the Defendants in J.A. 1.
J.A. 2 is an individual action filed in 2020 against the Monroe
Township Board of Education and various State Defendants. The
claims in J.A. 2 hinge on the specific handling of one of J.A.'s
cases. In addition to alleging counts similar to those in J.A. 1,
J.A. 2 also contains claims for violation of the Americans with
Disabilities Act, error by the Administrative Law Judge (the "ALJ")
handling J.A.'s case, and specific counts aimed at the Monroe
Township Board of Education. Currently, fully briefed motions to
dismiss filed by the State Defendants are pending before the Court
and discovery is well under way for the Monroe Township Board of
Education.
J.A. 3 is a separate individual action filed by J.A. in 2021
against the Monroe Township Board of Education and various State
Defendants. It pleads similar claims to those in J.A. 2 but relate
to a different incident of handling J.A.'s special education needs.
Further, J.A. 3 presents unique claims against the Monroe Township
Board of Education in particular, such as malicious abuse of
process as well as intentional and negligent infliction of
emotional distress. Currently, a motion to dismiss by the State
Defendants has been briefed before the Court and discovery for the
Monroe Township Board of Education has been stayed pending the
resolution of the motion to dismiss by the State Defendants.
The last case for which the Plaintiffs seek consolidation, the M.D.
Matter, was filed in 2019 and involved the alleged mishandling of
L.D.'s special education needs by the Vineland City Public Schools
and later the State Defendants. The M.D. Matter includes some
claims based on the same laws in J.A. 1, J.A. 2, and J.A. 3, but
involve a different child's time at a different school. The M.D.
Matter currently has a motion to dismiss by the State Defendants
pending and discovery is underway with the Vineland City Public
Schools.
The Monroe Township Board of Education and the State Defendants
each filed oppositions to the Plaintiffs' motion to consolidate,
arguing that the variation in parties, underlying facts, legal
claims, and procedural postures of the four cases made it
inappropriate to consolidate them. The Plaintiffs filed a reply in
further support of their motion to consolidate, arguing that the
issues are much more similar than the Monroe Township Board of
Education and the State Defendants make them out to be in their
opposition briefs. The Court rules on the motion to consolidate
against the backdrop of these submissions.
II. Discussion
Ultimately, the key question is whether the Court believes that the
most efficient way to handle the issues before it would be to
consolidate cases.
Judge Hillman finds that the Plaintiffs have met their burden to
show that common issues of fact or law run through all four of the
cases that it seeks to consolidate. Specifically, all four deal
with New Jersey's administrative procedures for handling due
process complaints for students who believe that they were not
provided the proper special education requirements as required
under the Individuals with Disabilities Act, 20 U.S.C. Sections
1400 et seq. Therefore, it falls to the Court to weigh whether
consolidation is appropriate in light of considerations such as
judicial economy, potential for delay, confusion, and prejudice.
On balance, Judge Hillman finds that consolidation only partially
appropriate. J.A. 2 and J.A. 3 state similar claims against by the
same Plaintiffs against largely the same defendants. Indeed, the
only real difference appears to be the time-period for which claims
are brought and the particular ALJs whose decisions are being
challenged. Given that the custodians of information for
discoverable material likely overlap, Judge Hillman finds that
consolidation of those two matters together would greatly
streamline litigation. Further, were J.A. 2 and J.A. 3 to go to
trial, the main difference in issues would only be which school
year that claims accrued. It would be a better use of judicial
resources to consolidate those two cases.
Judge Hillman comes to a different conclusion regarding J.A. 1 and
M.D. J.A. 1 is a class action to which the Monroe Township Board of
Education is not a party. He says, combining the class action with
J.A. 2 and J.A. 3 likely would not streamline discovery as the
scope of issues could turn out to be different. In addition,
regarding trial, it would be unwieldy to manage the cases together.
With the number of varying claims and disparate facts before the
Court in J.A. 1 and M.D., as compared to J.A. 2 and J.A. 3, omnibus
consolidation "would result in one massive and unwieldly
consolidated suit involving complex issues."
Finally, Judge Hillman will note that the risk of inconsistent
rulings or delay to the Court by not consolidating all of these
cases is minimal as they are all already pending before the
undersigned and Magistrate Judge Matthew J. Skahill and thus can be
resolved efficiently and will be proceeding apace.
Notwithstanding the foregoing, the partial denial of the
Plaintiff's motion will be without prejudice. In this or any
related matter in which a motion to dismiss is denied or no such
motion is filed, the Plaintiffs may move to consolidate such
matters -- for purposes of discovery only -- to ensure the full and
efficient disclosure of relevant information by all parties.
III. Conclusion
For the reasons he expressed, Judge Hillman granted in part and
denied in part without prejudice the Plaintiff's motion to
consolidate.
An appropriate Order will be entered.
A full-text copy of the Court's March 22, 2022 Opinion is available
at https://tinyurl.com/kacbwm4w from Leagle.com.
NORTH CENTRAL: Fails to Pay Proper Wages, Bazick Suit Alleges
-------------------------------------------------------------
BRITNY BAZICK, individually and on behalf of all others similarly
situated, Plaintiff v. NORTH CENTRAL VIRGINIA RESTAURANTS, INC.,
Defendant, Case No.5:22-cv-00019-TTC (W.D. Va., March 29, 2022)
seeks to recover from the Defendants unpaid wages and overtime
compensation, interest, liquidated damages, attorneys' fees, and
costs under the Fair Labor Standards Act.
Plaintiff Bazick was employed by the Defendant as delivery driver.
NORTH CENTRAL VIRGINIA RESTAURANTS, INC. owns and operates Papa
John's pizza. [BN]
The Plaintiff is represented by:
Helen T. Vu, Esq.
HALPERIN LAW CENTER
4435 Waterfront Drive, Suite 100
Glen Allen, VA 23060
Telephone: (804) 527-0100
Facsimile: (804) 597-0209
Email: helen@hlc.law
- and -
Krista Sheets, Esq.
Josh Sanford, Esq.
SANFORD LAW FIRM, PLLC
10800 Financial Centre Pkwy, Suite 510
Little Rock, AK 72211
Telephone: (501) 221-0088
Facsimile: (888) 787-2040
Email: krista@sanfordlawfirm.com
josh@sanfordlawfirm.com
PABLE DESIGNS: Calcano Files ADA Suit in S.D. New York
------------------------------------------------------
A class action lawsuit has been filed against Pable Designs. The
case is styled as Marcos Calcano, on behalf of himself and all
other persons similarly situated v. Pable Designs d/b/a Pablo,
Inc., Case No. 1:22-cv-02565 (S.D.N.Y., March 29, 2022).
The lawsuit is brought over alleged violation of the Americans with
Disabilities Act.
Pablo's designs -- http://pablo.pablodesigns.com/-- have been
propelled to the forefront of International contemporary lighting
by an uncompromising devotion to simplicity and utility.[BN]
The Plaintiff is represented by:
Dana Lauren Gottlieb, Esq.
Jeffrey Michael Gottlieb, Esq.
GOTTLIEB & ASSOCIATES
150 E. 18 St., Suite PHR
New York, NY 10003
Phone: (917) 796-7437
Fax: (212) 982-6284
Email: danalgottlieb@aol.com
nyjg@aol.com
PAPERLESSPAY CORP: Bid to Dismiss Allgood Class Suit Partly Granted
-------------------------------------------------------------------
In the case, ROBIN ALLGOOD and DAVID COLLINS, on behalf of
themselves and all others similarly situated, Plaintiffs v.
PAPERLESSPAY CORPORATION, Defendant, Case No. 3:20-cv-516-MMH-MCR
(M.D. Fla.), Judge Marcia Morales Howard of the U.S. District Court
for the Middle District of Florida, Jacksonville Division, granted
in part and denied in part the Defendant's Motion to Dismiss
Plaintiffs' Consolidated Class Action Complaint and Memorandum of
Law in Support Thereof filed on May 21, 2021.
I. Introduction
The cause is before the Court on Defendant PaperlessPay's Motion to
Dismiss. In the Motion, PaperlessPay seeks dismissal of the
Consolidated Class Action Complaint filed by Plaintiffs Allgood and
Collins on April 7, 2021, for lack of standing pursuant to Rule
12(b)(1), Federal Rules of Civil Procedure (Rule(s)), and for
failure to state a claim under Rule 12(b)(6). The Plaintiffs filed
a response to the Motion on July 16, 2021. With leave of Court,
PaperlessPay filed a reply to the Response on Aug. 16, 2021.
Accordingly, the Motion is ripe for review.
II. Background
PaperlessPay is a third-party payroll and human resources provider
with approximately 1,500 clients. Its clients are various companies
that employ more than two million PaperlessPay users.
PaperlessPay's clients provide it with sensitive employee
information -- including their employees' personally identifiable
information (PII) -- so that PaperlessPay can produce electronic
paystubs and W-2 forms for the employees.
The Plaintiffs, as well as the class they seek to represent, are
current and former employees of PaperlessPay's clients. They are
suing PaperlessPay in relation to an alleged cyberattack and data
breach that occurred in February 2020 (the "Data Breach").
The Plaintiffs contend that they suffered substantial damages
because of the Data Breach, including "concrete harm in the form of
attempted identity theft." Particularly, Plaintiff Allgood "was
victim to a fraudulent unemployment insurance claim that included
her Social Security number" in November 2020, approximately nine
months after the cyberattack. Similarly, Plaintiff Collins was
notified by his employer in February 2021 -- roughly one year after
the Data Breach -- that someone had attempted to a file a
fraudulent unemployment insurance claim using his PII.
Between May and September of 2020, four separate actions were
initiated against PaperlessPay in federal court. Although initially
assigned to different district judges, the cases were transferred
to Judge Howard pursuant to Local Rule 1.04(b). The Plaintiffs in
all four cases brought claims seeking class-wide relief against
PaperlessPay, a company that provided payroll and human resources
services to the Plaintiffs' employers. Each case related to an
alleged Feb. 18, 2020 data breach on PaperlessPay's servers.
On Oct. 9, 2020, the initial Plaintiffs filed a Motion to
Consolidate Actions and Appoint Interim Class Counsel. Although
PaperlessPay objected to the appointment of interim class counsel,
it did not oppose consolidation. On March 11, 2021, the Court
granted the Motion to Consolidate in part and denied it in part. It
granted the Motion to Consolidate to the extent the Plaintiffs
requested for their cases to be consolidated and directed the
Plaintiffs to file a consolidated complaint in the lead case.
Shortly thereafter, on April 7, 2021, the Plaintiffs filed their
Consolidated Class Action Complaint, which is the operative
pleading at this time, and in which Plaintiffs name only
PaperlessPay as a defendant.
In their Complaint, the Plaintiffs allege that PaperlessPay failed
to adequately guard their sensitive information and to otherwise
prevent the alleged cyberattack and Data Breach. As a result, they
assert claims for: negligence (Count I); unjust enrichment (Count
II); breach of express contract (Count III); breach of implied
contract (Count IV); intrusion upon seclusion/invasion of privacy
(Count V); breach of confidence (Count VI); violation of the
Florida Deceptive and Unfair Trade Practices Act (FDUTPA) (Count
VII); and declaratory relief.
On May 21, 2021, PaperlessPay filed the instant Motion seeking
dismissal of the Plaintiffs' claims under Rule 12(b)(1) for lack of
standing and Rule 12(b)(6) for failure to state a claim. See
generally Motion. In the parties' Uniform Case Management Report,
filed on June 11, 2021, Plaintiffs and PaperlessPay jointly
requested that discovery, other than initial disclosures, be stayed
pending a ruling on the Motion. On June 17, 2021, the Court stayed
discovery.
III. Discussion
A. 12(b)(1) - Subject Matter Jurisdiction
PaperlessPay contends that the Plaintiffs lack standing to pursue
the claims set forth in the Complaint. To establish standing, "a
plaintiff must have '(1) suffered an injury in fact, (2) that is
fairly traceable to the challenged conduct of the defendant, and
(3) that is likely to be redressed by a favorable judicial
decision.'" At this stage in the proceedings, the Plaintiffs "must
clearly allege facts demonstrating each element" of their claims
and "establish standing for each type of relief sought."
In the Motion, PaperlessPay argues that the Plaintiffs'
injury-in-fact and causation allegations are facially insufficient,
although it primarily challenges these allegations through
extrinsic materials. In response, the Plaintiffs assert that the
allegations in their Complaint are sufficient and that the
Defendant's factual challenge is improper.
1. PaperlessPay's Facial Attack on Plaintiffs' Standing
In the case, the Plaintiffs allege that they were victims of
attempted fraudulent unemployment insurance claims and, as a
result, they "spent time, money, and effort trying to mitigate
their injuries, including disputing fraudulent activity, filing
police reports, and otherwise dealing" with the attempted identity
theft. Moreover, PaperlessPay concedes that the Plaintiffs allege
they suffered actual harm. Therefore, Judge Howard holds that at
this stage, the Plaintiffs have sufficiently alleged an
injury-in-fact.
PaperlessPay also asserts that the Plaintiffs' injuries are not
fairly traceable to PaperlessPay's actions. But, Judge Howard finds
that whether the Plaintiffs can establish traceability through the
allegations is a close call. But, as "the 'fairly traceable'
standard is fairly lenient at this stage and less than is required
to satisfy proximate cause," she is of the view that the Plaintiffs
have plausibly alleged injuries fairly traceable to PaperlessPay's
alleged cyberattack and Data Breach. At this, the motion to dismiss
stage of the proceedings, the Plaintiffs have satisfied the
irreducible constitutional minimum of standing as to their claims
for damages.
In their request for declaratory relief, the Plaintiffs allege:
"Upon information and belief, Defendant PaperlessPay is taking some
steps to increase its data security, but there is nothing to
prevent Defendant from reversing these changes once it has
weathered the increased public attention resulting from this Data
Breach, and to once again place profits above protection." Simply
put, the Plaintiffs' allegation is hypothetical, contingent, and
speculative. As such, the Plaintiffs lack standing as to their
claim for declaratory relief, and this claim is due to be dismissed
without prejudice.
2. PaperlessPay's Factual Attack on Plaintiffs' Standing
PaperlessPay primarily challenges the Plaintiffs' standing through
extrinsic materials, particularly three declarations -- Attachment
1: Declaration of W. Mark Broughton; and Attachment 2: Declaration
of Michael Scattergood, Declaration of Keith Wojcieszek. In the
first declaration, PaperlessPay's Founder and CEO, W. Mark
Broughton, asserts that PaperlessPay never had Plaintiff Allgood's
Social Security Number, did not find any evidence of data
exfiltration, and has not been provided with any evidence of data
exfiltration from the Department of Homeland Security, the FBI, or
Ankura. Similarly, in the second declaration, the Director of Data
& Technology (Incident Response) at Ankura, Michael Scattergood,
states that Ankura found no indication that data was exfiltrated
from PaperlessPay's server. The third declaration, submitted by
Keith Wojcieszek, a managing director at the cybersecurity firm
Kroll, Inc., is accompanied by a summary of both Plaintiffs' prior
security incidents. The Kroll Summary concludes that, prior to the
PaperlessPay incident, Plaintiff Allgood's data was impacted by
thirty-three data exposure incidents and Plaintiff Collins's data
was impacted by 31 data exposure incidents.
Relying on these declarations, PaperlessPay argues that the
"Plaintiffs could not have suffered, nor will they ever suffer,
fraud or identity theft as a result of its Data Incident.
The problem with this argument is that it is "a direct attack on
the merits of the case" as PaperlessPay challenges the veracity of
Plaintiffs' causation and damages allegations, Judge Howard holds.
Because PaperlessPay's factual standing challenge implicates the
merits of the Plaintiffs' claims, the proper course of action for
the Court is to "find that jurisdiction exists," treat the factual
attack as a motion for summary judgment, and refrain "from deciding
disputed factual issues." But a summary judgment motion is
premature at this stage of the proceeding. As such, Judge Howard
will deny, without prejudice, PaperlessPay's Motion to the extent
it seeks dismissal of the Plaintiffs' claims for damages for lack
of standing.
B. 12(b)(6) - Failure to State a Claim
Judge Howard turns next to PaperlessPay's arguments challenging the
sufficiency of the Plaintiffs' pleading pursuant to Rule 12(b)(6).
In evaluating a Rule 12(b)(6) motion to dismiss, the Court's "task
is to determine whether the pleadings contain sufficient factual
matter, accepted as true, to state a claim to relief that is
plausible on its face." "A claim is facially plausible when the
court can draw 'the reasonable inference that the defendant is
liable for the misconduct alleged'" from the facts as pleaded. In
the Motion, PaperlessPay urges the Court to dismiss all of the
Plaintiffs' claims for failure to state a claim under Florida law.
1. Plaintiffs' Negligence, Breach of Express Contract, Breach of
Implied Contract, and FDUTPA Claims
To succeed on four of their claims -- negligence, breach of express
contract, breach of implied contract, and FDUTPA -- the Plaintiffs
must demonstrate that PaperlessPay's actions caused their harm.
Judge Howard finds that the Plaintiffs have pled fewer facts and as
a result the nexus between the alleged Data Breach and Plaintiffs'
injuries is much more tenuous. They present no additional factual
allegations to suggest that the connection between the two events
in this case amounts to more than a mere coincidence of time and
sequence. Because the Plaintiffs allege fewer facts and their
causation allegations do not cross the line from possible to
plausible, their negligence, breach of express contract, breach of
implied contract, and FDUTPA claims are due to be dismissed.
2. Plaintiffs' Unjust Enrichment Claim
The Plaintiffs' unjust enrichment claim also fails, Judge Howard
holds. In their Complaint, the Plaintiffs allege that they
"conferred a monetary benefit on PaperlessPay in the form of
monetary payments -- directly or indirectly -- for providing
payroll services for the Employers." This unadorned conclusory
allegation, however, does not adequately identify such "monetary
payments" or any other direct benefit conferred by the Plaintiffs
on PaperlessPay. Additionally, the Plaintiffs have not plausibly
pleaded that PaperlessPay had knowledge of any direct benefit
conferred by the Plaintiffs and accepted or retained by
PaperlessPay. Thus, the Plaintiffs' claim for unjust enrichment is
due to be dismissed.
3. Plaintiffs' Intrusion Upon Seclusion/Invasion of Privacy Claim
In attempting to allege a claim for intrusion upon
seclusion/invasion of privacy, the Plaintiffs offer nothing more
than legal conclusions. Under Florida law, invasion of privacy is
an intentional tort, and the tort of intrusion upon seclusion falls
"under the broader heading of invasion of privacy." The Plaintiffs
do not plead any facts suggesting that PaperlessPay intentionally
shared or exposed Plaintiffs' information or intentionally caused
the Data Breach. As plead, Judge Howard finds that this claim
appears to be "a thinly veiled attempt to transform a negligence
claim into an intentional tort." Viewed in that way, and lacking
any factual allegations supporting a plausible intentional tort
claim, the Plaintiffs' intrusion upon seclusion/invasion of privacy
claim is due to be dismissed.
4. Plaintiffs' Breach of Confidence Claim
Once again, assuming, without deciding, that the Plaintiffs may
bring a common-law breach of confidence claim, Judge Howard
recognizes that the Eleventh Circuit has defined this claim as "the
unconsented, unprivileged disclosure to a third party of nonpublic
information that the defendant has learned within a confidential
relationship." In the case, she finds that the Plaintiffs present
no allegations suggesting that PaperlessPay did any act to disclose
or "make known" their personally identifiable information. Indeed,
based on the Plaintiffs' allegations, PaperlessPay "did not do any
act that made the Plaintiffs' information known"; rather, the
Plaintiffs' sensitive information was allegedly stolen by an
unauthorized third-party. Because no disclosure by PaperlessPay is
alleged to have occurred, the Plaintiffs' breach of confidence
claim must be dismissed.
IV. Conclusion
For the foregoing reasons, Judge Howard concludes that the
Plaintiffs' Complaint is due to be dismissed. Accordingly, she
granted in part and denied in part Defendant PaperlessPay's Motion
to Dismiss.
The Motion is granted to the extent that (i) the Plaintiffs' claim
for declaratory relief is dismissed without prejudice for lack of
standing and (ii) the Plaintiffs' claims for damages are dismissed.
The Motion is otherwise denied.
The Clerk of the Court is directed to terminate all pending motions
and deadlines as moot and close the file.
A full-text copy of the Court's March 22, 2022 Order is available
at https://tinyurl.com/2j9f6w4k from Leagle.com.
PAYCHEX NORTH: Court Allows Kassis to File 2nd Amended Complaint
----------------------------------------------------------------
The U.S. District Court for the Eastern District of California
grants the parties' Joint Stipulation to file a Second Amended
Complaint in the lawsuit captioned DAVID KASSIS, Individually and
on behalf of all others similarly situated, Plaintiff v. PAYCHEX
NORTH AMERICA, INC., a Delaware limited liability company; and Does
1 through 25, Defendants, Case No. 2:20-CV-00387-KJM-KJN (E.D.
Cal.).
Pursuant to the Parties' Joint Notice of Class Action Settlement
and Stipulation to Stay, the Court grants the Parties' stipulation
to stay the action pending final approval of the class action
settlement by the California Superior Court for the County of
Sacramento.
The parties will file a Joint Status Report in 60 days notifying
the Court of the status of the California Superior court's
approval.
A full-text copy of the Court's Order dated March 17, 2022, is
available at https://tinyurl.com/yrpxmkbt from Leagle.com.
PROGRESSIVE DIRECT: Ninth Cir. Affirms Judgment in Kleinsasser Suit
-------------------------------------------------------------------
In the case, MARK KLEINSASSER, individually and as the
representative of all persons similarly situated,
Plaintiff-Appellant v. PROGRESSIVE DIRECT INSURANCE COMPANY;
PROGRESSIVE MAX INSURANCE COMPANY, Defendants-Appellees, Case No.
21-35351 (9th Cir.), the U.S. Court of Appeals for the Ninth
Circuit affirmed the district court's judgment in favor of the
Defendants-Appellees.
Mr. Kleinsasser appeals from the district court's judgment in favor
of Progressive Direct Insurance Co. and Progressive Max Insurance
Co. (collectively, "Progressive"). Specifically, Kleinsasser argues
that the district court erred in making the following three
rulings: (1) the court had jurisdiction under the Class Action
Fairness Act of 2005 ("CAFA"); (2) Progressive was entitled to
summary judgment on Kleinsasser's individual claim because he made
a material misrepresentation, voiding coverage under his insurance
policy; and (3) Kleinsasser was not entitled to class certification
on his claims.
The Ninth Circuit reviews de novo both a denial of a motion to
remand for lack of subject matter jurisdiction and a grant of
summary judgment and review factual findings for clear error.
First, it holds that the district court acted appropriately when it
looked at evidence beyond Progressive's notice of removal and found
jurisdiction under CAFA. Because the inquiry was intricate and
involved battling experts, it was appropriate for the district
court to order an evidentiary hearing on the amount in controversy.
The district court also meticulously analyzed the scope of the
class and the evidence presented to reasonably determine that the
amount-in-controversy requirement was met. Because the potential
number of claims times the average claim amount equaled
$13,883,612.75, the court did not err in finding subject matter
jurisdiction.
Next, the Ninth Circuit finds that the district court properly
granted summary judgment in Progressive's favor on Kleinsasser's
individual claim. It correctly rejected Kleinsasser's argument that
the policy's misrepresentation provision applied only to
misrepresentations made during the claims process and not to those
made during litigation. An average insurance purchaser would not
interpret the policy's language of "claim or lawsuit" to have two
distinct meanings -- that language is appropriately seen as
Progressive's attempt to take a broad, belt-and-suspenders approach
to drafting its contract. Indeed, if accepted, Kleinsasser's
interpretation would be the type of "strained or forced
construction" that Washington courts disfavor. Hence, the district
court thus did not err in ruling that the provision applied to
Kleinsasser's conduct occurring during litigation.
The court also properly ruled that Kleinsasser made a material
misrepresentation as a matter of law when he provided Progressive
with the Fugate Ford letter. Progressive met the three elements
necessary to establish a material misrepresentation defense under
Washington law: (1) falsity, (2) materiality, and (3) intent.
Summary judgment in favor of Progressive was thus appropriate.
Finally, because Kleinsasser's claim fails as a matter of law, the
Ninth Circuit finds that the class certification issue is moot.
A full-text copy of the Court's March 18, 2022 Memorandum is
available at https://tinyurl.com/2p8t5bjk from Leagle.com.
PROGRESSIVE DIRECT: Stedman Can Partly Compel Replies to Discovery
------------------------------------------------------------------
In the case, JOEL STEDMAN, et al., Plaintiffs v. PROGRESSIVE DIRECT
INSURANCE COMPANY, Defendant, Cause No. C18-1254RSL (W.D. Wash.),
Judge Robert S. Lasnik of the U.S. District Court for the Western
District of Washington, Seattle, granted in part the Plaintiffs'
Motion to Compel Responses to Discovery and for Sanctions.
The Plaintiffs allege that Progressive's reliance on an independent
medical examiner's finding that its insured had attained a fixed
and stable condition or maximum medical improvement ("MMI") as
justification for denying the payment of personal-injury-protection
("PIP") benefits violates Washington law. The Court certified a
class of all insureds who had their PIP benefits terminated or
limited "based, even in part, upon Progressive's determination that
its insured had reached 'maximum medical improvement' or a 'fixed
and stable' condition."
The parties submitted supplemental briefing on the meaning of
"based on," an issue which had to be resolved so that the class
members could be identified. The Court rejected Progressive's
argument that a coverage decision was not "based on" MMI unless it
were the sole justification for the termination of benefits,
instead finding that if Progressive identified the achievement of
MMI (or a fixed and stable condition) as a reason for the denial of
PIP benefits (i.e., if Progressive incorporated that finding into
its coverage determination as justification, in whole or in part),
the coverage decision was "based on" that determination.
The Plaintiffs now seek to compel the production of correspondence
with independent medical examiners and insureds so that they can
identify class members, send notice of the litigation to the class,
and establish liability. They also request an award of fees under
Fed. R. Civ. P. 37(a)(5)(A).
Judge Lasnik granted in part the motion. For the most part, he
finds that the information the Plaintiffs seek is not only
relevant, but essential to their claims and the efficient
resolution of the class action. The only way to identify the class
members and to establish that Progressive denied PIP benefits
"based on" a finding of MMI is to review the claims in which an IME
was conducted prior to a benefits denial/limitation and ascertain
the insurer's justification for the coverage determination. The
Plaintiffs simply want Progressive to produce correspondence from a
discrete universe of files so that they can perform the necessary
textual analysis.
Progressive argues that it will be too burdensome to "locate,
extract, and produce the requested documents." It proposes,
instead, that it be required to produce responsive documents from
100 randomly selected claims files, at which point the parties and
the Court will be in a better position to evaluate the necessity of
any remaining production. This procedure was used to bring the
class certification issues before the Court, however, and the
review of correspondence from a representative sample of claims
files made clear the necessity of the requested production.
Progressive also suggests that it be permitted to substitute
"internal billing endnotes related to IMEs" in place of the
categories of documents plaintiffs requested because of the
"practical hurdles and extreme cost associated with Progressive
conducting a manual claim-byclaim review to obtain and provide" the
information the Plaintiffs seek. The fact that Progressive cannot
identify all responsive documents with a single automated search
does not show -- or even suggest -- that the requested discovery is
unduly burdensome or non-proportional to the needs of the case.
The information the Plaintiffs seek is critical, and the manual
review of files in which adverse coverage determinations were made
after an IME (presumably something less than the 1,892 cases in
which an IME was performed) is not unreasonable in the context of
the litigation. While Progressive is free to search for and compile
the requested documents in any way it deems appropriate, Judge
Lasnik holds that it cannot insist that the Plaintiffs alter their
request to mirror computer codes that may or may not adequately
capture the requested information.
Progressive does, however, made a good point regarding the scope of
the request for correspondence with medical providers. That request
should be limited to correspondence regarding claims that were
denied, terminated, or limited following the IME.
For all of the foregoing reasons, Judge Lasnik ordered Progressive
to supplement its production by (1) identifying each PIP claim made
between July 24, 2012, and the present, on a policy issued by
Progressive in Washington State, where the individual claimant
underwent an IME and PIP benefits were subsequently denied,
terminated, or limited; (2) producing all correspondence between
Progressive and the claimant in each of those claims files; and (3)
producing all correspondence between Progressive and the physician
or medical provider who performed the IME in each of those claims
files.
Progressive may, if it chooses, individually review the
correspondence and produce only those documents that touch on the
justification for the coverage denial, termination, or limitation,
but its production must be complete 28 days after the date of the
Order. The Plaintiffs' request for an award of fees is denied.
A full-text copy of the Court's March 22, 2022 Order is available
at https://tinyurl.com/2mpd9a38 from Leagle.com.
QUANEX HOMESHIELD: Barajas Files Suit in Cal. Super. Ct.
--------------------------------------------------------
A class action lawsuit has been filed against Quanex Homeshield,
LLC, et al. The case is styled as Arsenio Barajas, on behalf of
himself and all others similarly situated v. Quanex Homeshield,
LLC, a Delaware Limited Liability Company; Does 1-50; Case No.
34-2022-00317535-CU-OE-GDS (Cal. Super. Ct., Sacramento Cty., March
29, 2022).
The case type is stated as "Other Employment - Civil Unlimited."
Quanex Homeshield, LLC -- https://www.quanex.com/ -- manufactures
window and door components and other building products.[BN]
The Plaintiff is represented by:
Mehrdad Bokhour, Esq.
BOKHOUR LAW GROUP, P.C.
1901 Avenue of the Stars, Suite 450
Los Angeles, CA 90067
Phone: 310-975-1493
Fax: 310-300-1705
- and -
Joshua S. Falakassa, Esq.
FALAKASSA LAW, P.C.
1901 Avenue Of The Stars, Ste. 450
Los Angeles, CA 90067-6006
Phone: 818-456-6168
Email: josh@falakassalaw.com
QUICKEN LOANS: Court Grants in Part Bid to Dismiss Viscuso Suit
---------------------------------------------------------------
In the case, Suzanne Viscuso, individually and on behalf of others
similarly situated, Plaintiff v. Quicken Loans, Inc., Defendant,
Civil Action No. 3:21-cv-01924-JMC (D.S.C.), Judge J. Michelle
Childs of the U.S. District Court for the District of South
Carolina, Columbia Division, granted in part and denied in part the
Defendant's motion to dismiss.
I. Introduction
Plaintiff Viscuso, individually and on behalf of others similarly
situated, filed the instant putative class action against Defendant
Quicken Loans, seeking injunctive relief and monetary damages for
the Defendant's alleged failure to protect the Plaintiff's
confidential and/or private information. The Plaintiff alleges
state law claims for breach of confidentiality, negligence, and
invasion of privacy.
The matter is before the Court on the Defendant's Motion to Dismiss
the Complaint pursuant to Rules 12(b)(1) and 12(b)(6) of the
Federal Rules of Civil Procedure. The Plaintiff opposes the Motion
to Dismiss in its entirety.
II. Background
The Defendant "is a nationwide online mortgage lender that
provides, among other things, residential mortgage loan
refinances." Under its refinance procedure, the borrowers have
already purchased the property and are simply seeking a new
mortgage loan (presumably with more favorable terms) to replace the
existing loan.
The Plaintiff alleges that she has a mortgage loan with Defendant
and on May 8, 2021, the Defendant sent an e-mail to the Plaintiff
conveying that she was delinquent on her loan. Moreover, from her
review of the carbon copy ("CC") file of the e-mail, the Plaintiff
alleges that she was able to discern hundreds or thousands of other
customers of the Defendant as also having delinquent accounts. She
asserts that the Defendant has in no way acknowledged either a data
breach or the publication of private customer account date/personal
information.
Thereafter, on March 15, 2021, the Plaintiff filed a Complaint
against the Defendant in the Richland County Court of Common Pleas
(South Carolina) alleging state law claims for breach of
confidentiality, negligence, and invasion of privacy. On June 25,
2021, Quicken Loans removed the matter to the Court and filed the
instant Motion to Dismiss the Complaint. The parties then responded
and replied to the Motion.
III. Analysis
In its Motion to Dismiss, the Defendant argues that the Court lacks
subject matter jurisdiction over the case due to the Plaintiff's
lack of standing. In this regard, the Defendant asserts that the
Plaintiff cannot demonstrate any of the three (3) recognized "types
of standing: (1) statutory standing; (2) constitutional standing;
and (3) public importance standing."
The Plaintiff opposes the Defendant's Motion to Dismiss arguing
that "breach of confidentiality is not solely limited to the
physician-patient relationship, and courts analyze the particular
facts of each case to determine the applicability of a breach of
confidentiality claim." As to her claim for negligence, she argues
that she has sufficiently stated allegations meeting the elements
of a claim for negligence. Finally, the Plaintiff argues that her
allegations sufficiently satisfy the elements of invasion of
privacy claims against the Defendant for both wrongful publicizing
of private affairs and wrongful intrusion into private affairs.
A.
The Defendant seeks dismissal of the Plaintiff's claims for breach
of confidentiality, negligence, and invasion of privacy on the
basis that she lacks standing. Article III of the Constitution
limits the jurisdiction of the federal courts to the consideration
of "cases" and "controversies." Standing implicates the court's
subject matter jurisdiction and is governed by Rule 12(b)(1). To
possess the constitutional component of standing, a party must meet
three requirements: (1) the party has suffered an 'injury in fact'
that is (a) concrete and particularized and (b) actual or imminent,
not conjectural or hypothetical; (2) the injury is fairly traceable
to the challenged action of the defendant; and (3) it is likely, as
opposed to merely speculative, that the injury will be redressed by
a favorable decision.
In the Complaint, the Plaintiff alleges that she suffered the
following injuries because of Defendant's actions: "outrage mental
suffering, shame, or humiliation to a person of ordinary
sensibilities." Accepting as true these allegations as the court is
required to do at this stage of the proceeding, caselaw supports
the Plaintiff's position that she sufficiently alleged injury in
fact as to the claims pleaded in the Complaint. As a result, Judge
Childs is not persuaded that the Plaintiff lacks standing to
proceed with the action. Accordingly, she denies the Defendant's
Motion to Dismiss based on the Plaintiff's lack of standing.
B.
In addition to its standing argument, the Defendant also seeks
dismissal of the Plaintiff's claims pursuant to Rule 12(b)(6).
1. Claim for Breach of Confidentiality
Although the Plaintiff argues that she can assert a claim for
breach of confidentiality against the Defendant, a non-physician,
Judge Childs has never reached this conclusion. In the case, the
cause of action asserted is not against a physician. Moreover,
after reviewing relevant case law to include Hotel & Motel
Holdings, LLC v. BJC Enters., LLC, Judge Childs is also not
persuaded that the South Carolina appellate courts have extended
breach of confidentiality to actions against non-physicians.
Accordingly, she finds that the Defendant is entitled to dismissal
of the Plaintiff claim for breach of confidentiality.
2. Claim for Negligence
In her Complaint, the Plaintiff alleges that as a paying customer,
she had a confidential relationship with the Defendant requiring it
to exercise due care by protecting the Plaintiff's confidential
and/or private account information. Moreover, the Plaintiff alleges
that Defendant itself breached that duty when it sent her private,
protected information to unnecessary parties without her consent
thereby directly damaging her.
At the Rule 12 stage, Judge Childs finds that the Plaintiff's
allegations are sufficient to state a cause of action for
negligence based on the Defendant's failure to protect her private
information. Therefore, she declines to dismiss the Plaintiff's
negligence cause of action.
3. Claim for Invasion of Privacy
The Plaintiff alleges two (2) types of invasion of privacy:
Wrongful publicizing of private affairs and wrongful intrusion into
private affairs. To properly plead a claim for wrongful publicizing
of private affairs, the plaintiff must allege "(1) publicizing, (2)
absent any waiver or privilege, (3) private matters in which the
public has no legitimate concern, (4) so as to bring shame or
humiliation to a person of ordinary sensibilities." To prevail on
an action for the wrongful intrusion into private affairs, a
plaintiff must demonstrate: (1) an intrusion; (2) into that which
is private; (3) which is substantial and unreasonable; (3) and
intentional.
Upon review, Judge Childs observes that the entirety of the
Plaintiff's allegations support a reasonable inference that the
Defendant's conduct publicized private information in a manner that
caused her harm so as to support a plausible claim for wrongful
publicizing of private affairs. However, after reviewing the
language used by the Defendant in the E-mail, Judge Childs is not
persuaded that the Plaintiff's allegations sufficiently allege the
type of intrusion sufficient to establish the requisite element of
a wrongful intrusion into private affairs. Accordingly, she finds
that the Plaintiff only sufficiently alleges a claim for invasion
of privacy based on the wrongful publicizing of private affairs and
denies the Motion to Dismiss as to this claim.
IV. Conclusion
For the foregoing reasons, Judge Childs granted in part and denied
in part the Defendant's Motion to Dismiss. She denied the Motion as
to Plaintiff Viscuso's claims for negligence and invasion of
privacy based on the wrongful publicizing of private affairs. She
granted the Motion to Dismiss as to the Plaintiff's claims for
breach of confidentiality and invasion of privacy for wrongful
intrusion into private affairs and dismissed these claims with
prejudice.
A full-text copy of the Court's March 22, 2022 Order & Opinion is
available at https://tinyurl.com/3ep2munb from Leagle.com.
RESCARE WORKFORCE: Mills Loses Bid to Remand Suit to Super. Court
-----------------------------------------------------------------
In the case, RHONDA MILLS, Plaintiff v. RESCARE WORKFORCE SERVICES,
et al., Defendants, Case No. 2:20-cv-10860-FLA (JPRx) (C.D. Cal.),
Judge Fernando L. Aenlle-Rocha of the U.S. District Court for the
Central District of California denied the Plaintiff's Motion to
Remand.
I. Background
The Plaintiff filed the action in Los Angeles County Superior Court
on Sept. 16, 2020 against Defendants Rescare Workforce Services;
Rescare, Inc.; Bright Spring Health Services; Equus Workforce
Solutions; Rescare Homecare; Rescare Residential Services; and
Rescare California, Inc. The Plaintiff filed a First Amended
Complaint ("FAC") on Jan. 7, 2021. Defendants Res-care, Inc.
("ResCare"), Res-care California, Inc. ("ResCare California"), and
Arbor E&T, LLC, doing business as Equus Workforce Solutions,
(collectively, "Defendants") filed Answers to the FAC on Jan. 28,
2021.
The Plaintiff brings the following causes of action against all the
Defendants: (1) violations of Cal. Lab. Code Sections 510 and 1198
for unpaid overtime; (2) violations of Cal. Lab. Code Sections
226.7 and 512(a) for unpaid meal period premiums; (3) violations of
Cal. Lab. Code Section 226.7 for unpaid rest period premiums; (4)
violations of Cal. Lab. Code Sections 1194, 1197, and 1197.1 for
failure to pay minimum wages; (5) violations of Cal. Lab. Code
Sections 201 and 202 for failure to pay final wages timely; (6)
violations of Cal. Lab. Code Section 204 for failure to pay all
wages earned during employment timely; (7) violations of Cal. Lab.
Code Section 226(a) for non-compliant wage statements; (8)
violation of Cal. Lab. Code Section 1174(d) for failure to keep
accurate and complete payroll records; (9) violations of Cal. Lab.
Code Sections 2800 and 2802 for failure to reimburse necessary
business expenses; and (10) violations of Cal. Bus. & Prof. Code
Section 17200, et seq. (the Unfair Competition Law, "UCL").
The Plaintiff proposes the following class in the FAC: "All current
and former hourly-paid or non-exempt employees who worked for any
of the Defendants within the State of California at any time during
the period from Sept. 16, 2016 to final judgment and who reside in
California."
The Defendants removed the action to federal court on Nov. 30,
2020. In the Notice of Removal, the Defendants stated the Court has
jurisdiction over the action under the Class Action Fairness Act of
2005 ("CAFA"), 28 U.S.C. Section 1332(d). The Plaintiff filed the
instant Motion to Remand on Dec. 30, 2020. The action was
transferred to the Court on Jan. 5, 2021. The Defendants filed an
opposition to the Motion on Jan. 21, 2021, and the Plaintiff filed
a reply on Feb. 3, 2021. On May 24, 2021, the Court ordered the
parties to submit supplemental briefing regarding the amount in
controversy, which the parties filed on June 4, 2021. The Motion
came to hearing on June 18, 2021.
II. Discussion
A. Procedural Considerations and Timeliness of Opposition
The Plaintiff argues the court should disregard the Defendants'
opposition because it was filed one day after the operative
deadline pursuant to the Initial Standing Order in effect at the
time the Motion was filed. Under the Initial Standing Order, the
opposition to a motion set for hearing more than 70 days from the
date of the filing of the motion was due no later than 21 days
after the filing of the motion. The Plaintiff filed the Motion on
Dec. 30, 2020, with a noticed hearing date of May 3, 2021. As May
3, 2021, was more than 70 days from Dec. 30, 2020, the Defendants'
opposition was due by Jan. 20, 2021.
The Defendants filed their opposition on Jan. 21, 2021, without any
explanation for the delayed filing; thus, the opposition was
untimely. Nevertheless, Judge Aenlle-Rocha recognizes that Jan. 21,
2021 was Inauguration Day, and while the Court remained open on
that date, some calendars marked that date as a holiday.
Accordingly, he will exercise discretion to consider the opposition
and attached Supplemental Eisenmenger Declaration.
B. Jurisdiction Under CAFA
The Class Action Fairness Act provides that a federal district
court may exercise subject matter jurisdiction over a putative
class action in which: (1) the aggregate number of members of all
proposed plaintiff classes is 100 or more persons; (2) the parties
are "minimally diverse" (where any one plaintiff is a citizen of a
state different from any defendant); and (3) the amount in
controversy exceeds $5 million. Congress intended CAFA to be
interpreted expansively. No antiremoval presumption attends cases
invoking CAFA, which Congress enacted to facilitate adjudication of
certain class actions in federal court.
Judge Aenlle-Rocha finds that (i) the putative class meets the
minimum size requirements of CAFA (approximately 674 non-exempt,
hourly employees in California during the relevant time period);
(ii) the action meets the minimal diversity requirements of CAFA;
and (iii) the Defendants have met their burden to demonstrate that
the amount in controversy satisfies the $5 million jurisdictional
minimum for CAFA jurisdiction (the Defendants' calculated potential
liability for the first three causes of action exceeds $9 million,
and their total estimate on all of the Plaintiff's claims exceeds
$13 million (rising to over $16.5 million when anticipated
attorney's fees of 25% are additionally considered)).
III. Conclusion
For the foregoing reasons, Judge Aenlle-Rocha denied the
Plaintiff's Motion to Remand.
A full-text copy of the Court's March 22, 2022 Order is available
at https://tinyurl.com/yckksp57 from Leagle.com.
RIVERSIDE COUNTY, CA: Counsel Fees, Costs Award in A.A. Suit Upheld
-------------------------------------------------------------------
In the case, A. A., a minor, by and through her guardian ad litem,
and all others similarly situated, Plaintiff-Appellant v. COUNTY OF
RIVERSIDE, a public entity, et al., Defendants-Appellees, Case No.
20-5596 (9th Cir.), the U.S. Court of Appeals for the Ninth Circuit
affirmed the district court's order awarding A.A. $186,330 in
attorney's fees and $38,148.70 in costs.
After filing the 42 U.S.C. Section 1983 putative class action,
named Plaintiff A.A. settled her individual claims and sought an
award of attorney's fees pursuant to 42 U.S.C. Section 1988. The
district court determined that A.A. was the prevailing party and
awarded her $186,330 in attorney's fees and $38,148.70 in costs.
A.A. appeals that award, contending that the district court abused
its discretion in calculating the "lodestar" amount by erroneously
reducing her attorneys' hourly rates, hours expended and the amount
of costs.
The Ninth Circuit holds that the district court did not abuse its
discretion in setting the hourly rates for each of A.A.'s
attorneys. First, A.A. failed to meet her burden of demonstrating
the reasonableness of the proposed hourly rates because the
particular declarations A.A. submitted were not "credible." Second,
the district court could reject A.A.'s proposed rates simply
because A.A. did not satisfy her initial burden to establish that
they were reasonable. Finally, it is settled that "judges are
justified in relying on their own knowledge of customary rates and
their experience concerning reasonable and proper fees."
The Ninth Circuit also holds that the district court did not abuse
its discretion in calculating the number of hours each of A.A.'s
attorneys reasonably expended on her case. First, the district
court explicitly held in both its first and second orders that
A.A.'s class claims, and thus her motion for class certification
were "related," and proceeded to evaluate the degree of A.A.'s
success on those claims. Second, the district court properly gave
her credit for only $49,999 in damages without regard to the amount
of attorney's fees to which she was entitled. Third, the district
court's order reflects that it credited each attorney for his or
her hours in an individualized manner. Fourth, the district court
reviewed all of A.A.'s billing records, which included the hours
spent on her fee motion, and A.A. points to no evidence suggesting
that it treated those hours any differently than it treated the
rest of the hours she submitted, or that it did not give her credit
for any of them.
Lastly, the Ninth Circuit finds that the district court did not
abuse its discretion by awarding A.A. $38,148.70 in costs even
though she requested $42,584.04, a reduction of approximately 10%.
The district court's explanation that it "reviewed the detailed
cost breakdown and eliminated or reduced excessive or unnecessary
charges, such as courier charges for courtesy copies and
unspecified 'late charges,'" was more than sufficient to justify
the 10% cut it imposed.
None of A.A.'s other arguments has merit.
A full-text copy of the Court's March 18, 2022 Memorandum is
available at https://tinyurl.com/y88r9sm3 from Leagle.com.
ROADRUNNER TRANSPORTATION: 9th Cir. Flips Remand of Jauregui Suit
-----------------------------------------------------------------
In the lawsuit entitled GRISELDA JAUREGUI, individually, and on
behalf of other members of the general public similarly situated,
Plaintiff-Appellee v. ROADRUNNER TRANSPORTATION SERVICES, INC., an
unknown business entity, Defendant-Appellant, Case No. 22-55058
(9th Cir.), the United States Court of Appeals for the Ninth
Circuit reverses an order remanding a class action to a California
state court.
I. Introduction
The Ninth Circuit is asked in the case to review the district
court's order remanding a class action to California state court
after it determined that the $5 million amount in controversy
requirement of the Class Action Fairness Act was not met.
II. Background
Plaintiff Griselda Jauregui filed a putative class action in
California Superior Court against Defendant Roadrunner
Transportation Services on behalf of all Roadrunner current and
former California hourly workers. The complaint alleged numerous
violations of California labor law focused primarily on wage and
hour violations. Roadrunner removed the case to federal court,
invoking Class Action Fairness Act (CAFA) jurisdiction.
The Plaintiff responded with a motion to remand, arguing that the
district court lacked jurisdiction under CAFA because the requisite
$5 million minimum for the amount in controversy had not been met.
As authorized under CAFA, Roadrunner responded with "summary
judgment style evidence" to establish the amount in controversy.
Roadrunner relied primarily on the declaration of its senior
payroll lead, who concluded that, based on the company's payroll
data and the Plaintiff's allegations, the amount in controversy was
$14,780,377.
The district court found that Roadrunner failed to meet its burden
and remanded the case to the state court. It reached this
conclusion after independently evaluating Roadrunner's amount in
controversy calculations for each of the seven alleged violations.
The court found that Roadrunner had sufficiently demonstrated the
claimed amount in controversy for only two of the claims (overtime
claims and meal and rest break claims).
For the remaining five claims, the court found that Roadrunner
erred in its calculation of the amount in controversy, mostly
because of reliance on incorrect variables or assumptions. Critical
for the Ninth Circuit's purposes, the district court assigned a $0
value for the amount in controversy for each of the five claims
where it disagreed with Roadrunner's calculations. As a result, the
district court concluded that the amount in controversy was only
$2.1 million--the total for the two claims in which the district
court agreed with Roadrunner's calculations. Because this was less
than the $5 million CAFA threshold, the court granted the
Plaintiff's motion to remand. Roadrunner timely appealed.
III. Analysis
Circuit Judge Lawrence VanDyke, writing for the Panel, notes that
remand orders in cases involving CAFA are reviewed de novo, citing
Fritsch v. Swift Transp. Co. of Ariz., 899 F.3d 785, 792 (9th Cir.
2018). A defendant's amount in controversy allegation is normally
accepted when invoking CAFA jurisdiction, unless it is "contested
by the plaintiff or questioned by the court." When a plaintiff
contests the amount in controversy allegation, "both sides submit
proof and the court decides, by a preponderance of the evidence,
whether the amount-in-controversy requirement has been satisfied."
A.
Much of the district court's analysis underlying the order granting
the remand consists of granular evaluations of the Defendant's
evidence, assumptions, and arguments, Judge VanDyke observes. That
evaluation was appropriate, but in the end the district court lost
sight of the ultimate question: whether Roadrunner met its burden
of showing the amount in controversy exceeded $5 million.
Judge VanDyke opines that the two primary errors affecting the
remand order were putting a thumb on the scale against removal and
assigning a $0 amount to most of the claims simply because the
court disagreed with one or more of the assumptions underlying
Roadrunner's amount in controversy estimates.
In both its "Judicial Standard" section and subsequent analysis,
the district court imposed a heavy burden on the Defendant to prove
that the case belongs in federal court, Judge VanDyke notes. This
threshold posture contravenes the text and understanding of CAFA
and ignores precedent, he points out.
Judge VanDyke finds that the district court imposed--both
explicitly and in its analysis--a presumption against CAFA's
jurisdiction.
The district court's threshold explanation does not square with the
numerous quoted statements insisting on an expansive understanding
of CAFA, Judge VanDyke holds. While the district court went on to
cite Dart Cherokee for the proposition that "no antiremoval
presumption attends cases invoking CAFA," it is difficult to
reconcile that citation with the court's earlier statements in the
"Judicial Standard" section. Regardless of how one interprets these
competing statements, it appears the district court had some notion
that removal under CAFA should be met with a level of skepticism
and resistance. That was incorrect, Judge VanDyke points out.
Presumably because of this, latent throughout the order was an
inappropriate demand of certitude from Roadrunner over its
assumptions used in calculating the amount in controversy, Judge
VanDyke opines. The problem with that approach is that a CAFA
defendant's amount in controversy assumptions in support of removal
will always be just that: assumptions. At that stage of the
litigation, the defendant is being asked to use the plaintiff's
complaint--much of which it presumably disagrees with--to estimate
an amount in controversy. This is also at a stage of the litigation
before any of the disputes over key facts have been resolved.
Judge VanDyke has, therefore, made it clear that when calculating
the amount in controversy, "the parties need not predict the trier
of fact's eventual award with one hundred percent accuracy," citing
Valdez v. Allstate Ins. Co., 372 F.3d 1115, 1117 (9th Cir. 2004).
As is inescapable at this early stage of the litigation, the
removing party must be able to rely on a chain of reasoning that
includes assumptions to satisfy its burden to prove by a
preponderance of the evidence that the amount in controversy
exceeds $5 million, as long as the reasoning and underlying
assumptions are reasonable (LaCross v. Knight Transp. Inc., 775
F.3d 1200, 1201 (9th Cir. 2015)).
The district court did not afford Roadrunner this latitude when
analyzing the amount in controversy, Judge VanDyke finds. As one
example, the court rejected Roadrunner's assumption that each
terminated employee would have been entitled to the maximum 30-day
waiting time penalty because Roadrunner "provides no evidence"
supporting that fact. But it was not unreasonable for Roadrunner to
assume that the vast majority (if not all) of the alleged
violations over the four years at issue in this case would have
happened more than 30 days before the suit was filed, which would
entitle the employees to the 30-day penalty. The fact that a very
small percentage of employees might possibly not be entitled to the
maximum penalty is not an appropriate reason to dismiss altogether
the Defendant's estimate for this claim, the Judge points out.
B.
The district court also erred in how it approached the amount in
controversy analysis, Judge VanDyke finds. Because the Plaintiff
contested removal, Roadrunner was required to show the amount in
controversy by a preponderance of the evidence.
Recognizing that the amount in controversy is supposed to be an
estimate of the entire potential amount at stake in the litigation
demonstrates the unrealistic nature of assigning $0 to five out of
seven of the Plaintiff's claims, Judge VanDyke opines. Roadrunner
offered substantial evidence and identified assumptions to support
its valuation of each of the various claims in this case. In
analyzing each of the claims, the court disagreed with some of
Roadrunner's assumptions, identifying other assumptions that it
concluded were better. The approach used by the district court
turns the CAFA removal process into an unrealistic all-or-nothing
exercise of guess-the-precise-assumption-the-court-will-pick—even
where, as here, the Defendant provided substantial evidence and
analysis supporting its amount in controversy estimate.
The Plaintiff's minimum wage claim--one of her higher value claims
in this case--illustrates the Panel's point, Judge VanDyke states.
In its opposition to the remand motion, Roadrunner calculated the
amount in controversy for the minimum wage claim by assuming that
one hour of work a week went unpaid. Roadrunner then took the
63,431 workweeks in question and multiplied that by an average wage
of $16.22, for a total of about $1 million. That amount was doubled
according to the statutorily imposed liquidated damages, and an
additional $3.1 million in potential penalties was added. In total,
Roadrunner estimated the amount in controversy for this claim at
$5.2 million, alone enough to confer CAFA jurisdiction.
Judge VanDyke notes that the district court did not disagree with
most of Roadrunner's assumptions for the minimum wage claim
estimate. But it noted that Roadrunner erred in using a $16.22
hourly wage figure for these calculations, because California's
minimum wage for the time in question ranged from $10.50 in 2017 to
$14.00 in 2021--all lower than the $16.22 amount used. Because this
resulted in the Defendant's calculations being a "gross
over-calculation," the district court assigned a $0 valuation for
the minimum wage claim.
Assigning a $0 value was improper, Judge VanDyke holds. Neither
party, nor the district court, believed the amount in controversy
for this claim to be anywhere near $0. Even using the lowest hourly
wage rate offered by the district court ($10.50), the amount in
controversy for this claim alone would still come out to over $4.5
million.
Nothing in CAFA or this Court's caselaw compels such a draconian
response when the district court disagrees with a single assumption
underlying the claim valuation, Judge VanDyke notes. To the
contrary, in LaCross, the Ninth Circuit reversed a district court
that had remanded the case after disagreeing with Knight
Transportation's $44 million amount in controversy calculation. The
Panel disagreed with the district court's ruling for multiple
reasons, but one is especially relevant for its purposes.
In addressing fuel costs--a central claim in the case--the Ninth
Circuit noted that while the number of drivers varied during the
class period, even using the lowest number of drivers in 2010 for
all 16 quarters during the class period, the fuel costs would still
exceed $5 million. Instead of attempting to determine which
assumption would best calculate the amount in controversy for the
fuel costs claim, the Ninth Circuit concluded that the amount in
controversy would be met using any of the plausible figures.
So too here, Judge VanDyke holds. Using the lowest hourly wage rate
identified by the district court, the minimum wage claim is
reasonably valued at $4.5 million. Added to the $2.1 million for
the two other claims accepted by the district court, that would be
more than enough to establish jurisdiction under CAFA, without even
considering any of the other four claims that the district court
also zeroed-out.
The Plaintiff argues that the district court did not err in
assigning a $0 value to some of Roadrunner's claims because the
"district court should weigh the reasonableness of the removing
party's assumptions, not supply further assumptions of its own,"
citing Harris v. KM Indus., Inc., 980 F.3d 694, 701 (9th Cir.
2020).
Judge VanDyke explains that LaCross demonstrates that there is an
important distinction between a court offering entirely new or
different assumptions itself versus modifying one or more
assumptions in the removing party's analysis. Where a defendant's
assumption is unreasonable on its face without comparison to a
better alternative, a district court may be justified in simply
rejecting that assumption and concluding that the defendant failed
to meet its burden. But often, as illustrated here, the reason a
defendant's assumption is rejected is because a different, better
assumption is identified. Where that's the case, the district court
should consider the claim under the better assumption--not just
zero-out the claim. The latter approach creates a perverse
incentive for plaintiffs seeking a CAFA remand to simply nit-pick
assumptions by providing "better" ones, even when, as our Court
observed in LaCross, remand would still be inappropriate even under
the better assumption. Rewarding that "focus on the trees, not the
forest" approach would subvert the purposes of CAFA, because it
would result in remanding cases where the real amount in
controversy is clearly over the $5 million threshold.
IV. Conclusion
For the reasons stated, the district court's order to remand the
case is reversed and remanded for further proceedings consistent
with the Opinion.
Reversed and remanded.
A full-text copy of the Court's Opinion dated March 17, 2022, is
available at https://tinyurl.com/ycktk9wf from Leagle.com.
Jules S. Zeman -- jules.zeman@huschblackwell.com -- Frederic W.
Norris -- rick.norris@huschblackwell.com -- and Jennifer N. Hinds
-- jennifer.hinds@huschblackwell.com -- Husch Blackwell LLP, in Los
Angeles, California, for the Defendant-Appellant.
Eileen B. Goldsmith -- egoldsmith@altshulerberzon.com -- and
Michael Rubin -- mrubin@altber.com -- Altshuler Berzon LLP, in San
Francisco, California; Arby Aiwazian -- arby@calljustice.com --
Edwin Aiwazian -- edwin@calljustice.com -- and Joanna Ghosh --
joanna@calljustice.com -- Lawyers for Justice, PC, in Glendale,
California, for the Plaintiff-Appellee.
RVSHARE LLC: Court Grants Bid to Compel Arbitration in Scott Suit
-----------------------------------------------------------------
In the case, LESLIE SCOTT, et al., Plaintiffs v. RVSHARE LLC,
Defendant, Case No. 3:21-cv-00401 (M.D. Tenn.), Judge William L.
Campbell, Jr., of the U.S. District Court for the Middle District
of Tennessee, Nashville Division, granted the Defendant's Motion to
Stay Proceedings and Compel Individual Arbitration.
I. Background
Plaintiffs Leslie Scott and Tal Becker bring the purported class
action against Defendant RVshare asserting fraud claims and
violation of Tennessee and Florida consumer protection statutes.
RVshare is an online rental platform through which users can
arrange to rent various types of recreational vehicles ("RVs")
directly from owners. Scott used the platform on June 11, 2020, to
rent an RV for a family vacation. Becker used the platform on Oct.
13, 2020, to rent an RV for vacation. Both completed the booking
process in order to rent their respective RVs.
At the conclusion of the booking process, the user is provided with
a reservation summary. The user's reservation summary reflects that
the user has agreed to the Terms of Service and the RV Rental &
Optional Insurance Terms on the reservation page. RVshare's Terms
of Service contains an arbitration clause. Users are informed of
the existence of this provision on the first page of the Terms of
Service.
The Plaintiffs each had separate problems with their rental
experiences and now bring claims of fraud and violation of consumer
protection statutes against RVshare. The Defendant asserts that the
Plaintiffs consented to binding arbitration as reflected in its
Terms of Service.
The Defendant now moves to stay the case and compel individual
arbitration on all claims. The Plaintiffs filed a Response and the
Defendant replied.
II. Analysis
The Defendant moves to compel arbitration on all of the Plaintiffs'
claims. As grounds, it states that the Plaintiffs consented to the
Terms of Service when booking their respective RVs and, as such,
the Plaintiffs are bound by the arbitration clause contained
therein. The Plaintiffs argue that they did not knowingly consent
to the Terms of Service and therefore cannot be compelled to
arbitrate their claims.
A. Choice of Law
As a threshold matter, the Court must determine the applicable law.
The Defendant argues that, pursuant to the Governing Law section of
the Terms of Service, the applicable law is that of the state in
which each Plaintiff resides, as reflected in the information they
provided Defendant when using the platform. Consequently, they
state that Scott's inquiry is governed by Tennessee law and
Becker's is governed by Florida law. The Plaintiffs do not rebut
this assertion. Accordingly, Judge Campbell will apply Tennessee
law to Scott and Florida law to Becker.
B. Enforceability of the Agreement
When considering a motion to compel arbitration, the Court is to
consider four factors: (1) whether the parties agreed to arbitrate;
(2) the scope of the agreement to arbitrate; (3) if federal
statutory claims are asserted, whether Congress intended for those
claims to be non-arbitrable; and (4) whether, if some but not all
claims are arbitrable, the case should be stayed pending
arbitration. Only the first factor is at issue in the case.
The Plaintiffs contend that the arbitration clause is unenforceable
because they did not assent to the Terms of Service on Defendant's
website. There are two primary types of online agreement: Clickwrap
and browsewrap. A clickwrap agreement is one that "requires the
user to manifest assent to the terms by clicking on an icon."
Conversely, "a browsewrap agreement discloses terms on a website
that offers a product or service to the user, and the user assents
by visiting the website to purchase the product or enroll in the
service." The Plaintiffs contend that whether the Terms of Service
were presented as a clickwrap or a browsewrap agreement, they did
not consent.
Judge Campbell finds that Becker was provided adequate notice of
the Terms of Service and is bound by its terms. The arbitration
clause is enforceable as to Becker, and he will be compelled to
arbitrate individually his claims. Judge Campbell is also not
persuaded that Scott did not have adequate notice. Accordingly, he
finds that the arbitration clause is enforceable as to Scott and he
will be compelled to individually arbitrate his claims.
III. Conclusion
For the reasons he stated, Judge Campbell finds that the Plaintiffs
have not raised a genuine issue of material fact regarding the
validity of the arbitration clause. Accordingly, the Motion to
Compel Arbitration is granted.
An appropriate Order will be entered.
A full-text copy of the Court's March 22, 2022 Memorandum is
available at https://tinyurl.com/mdvcp38w from Leagle.com.
SAN FRANCISCO, CA: Class Cert Briefing Schedule Entered in Pierce
-----------------------------------------------------------------
In the class action lawsuit captioned as JILLIAN PIERCE, NICOLE
WADE, FANTASY DECUIR, DAMENA PAGE, and VINCENT KEITH BELL on behalf
of themselves and all others similarly situated, v. CITY AND COUNTY
OF SAN FRANCISCO, San Francisco Sheriff's Department Sheriff VICKI
HENNESSY, San Francisco Sheriff's Department Chief Deputy MICHELE
FISHER, and County of San Francisco employees DOES 1-50, Case No.
4:19-cv-07659-JSW (N.D. Cal.), the Hon. Judge Jeffrey S. White
entered a briefing schedule order:
-- Motion for Class Certification April 22, 2022
due:
-- Response to Class Certification May 6, 2022
Motion due:
-- Reply to Class Certification May 13, 2022
Motion:
-- Hearing on Class Certification: May 27, 2022
A copy of the Court's order dated March 15, 2022 is available from
PacerMonitor.com at https://bit.ly/3wUD2Bn at no extra charge.[CC]
The Plaintiffs are represented by:
Andrew Chan Kim, Esq.
SIEGEL, YEE, BRUNNER & MEHTA
475 14th Street, Suite 500
Oakland, CA 94612
Telephone: (510) 839-1200
Facsimile: (510) 444-6698
E-mail: danmsiegel@gmail.com
emilyrose@siegelyee.com
chankim@siegelyee.com
The Defendant is represented by:
Dennis J. Herrera, Esq.
Meredith B. Osborn, Esq.
Raymond Rollan, Esq.
SF PUBLIC UTILITIES COMMISSION
525 Golden Gate Avenue, 13th F
San Francisco, CA 94102
Telephone: (415) 554-1600
E-mail: bfeitelberg@sfwater.org
SCRIBE OPCO: Loses Bid to Toss Jones Suit Over WARN Act Violation
-----------------------------------------------------------------
Judge Virginia M. Hernandez Covington of the U.S. District Court
for the Middle District of Florida, Tampa Division, denied the
Defendant's motion to dismiss the lawsuit styled ERIC JONES, on
behalf of himself and all others similarly situated, Plaintiff v.
SCRIBE OPCO, INC., Defendant, Case No. 8:20-cv-2945-VMC-SPF (M.D.
Fla.).
Background
According to the amended complaint, the action seeks to recover
back pay and benefits under the Worker Adjustment and Retraining
Act of 1988 ("WARN Act") to redress a common course of conduct by
Scribe, which resulted in hundreds of employees suffering an
"employment loss," as defined by the WARN Act, as part of a series
of mass layoffs without proper legal notice.
Mr. Jones worked for Scribe for over 16 years, last at Scribe's
Clearwater, Florida facility. He alleges he was furloughed on March
26, 2020, after Scribe sent him and many other employees a memo on
March 25, 2020, stating that these employees were being "laid off"
as a result of the Coronavirus, also referred to as COVID-19.
According to Mr. Jones, the March memo fails to comply with the
WARN Act in its form and content. But the bigger issue is that
Scribe owed him and the putative class members a follow-up notice
once it became reasonably foreseeable the March layoff would exceed
six months. Indeed, the March memo states Scribe hopes to call
employees back "soon," making it sound like a short layoff, rather
than a permanent layoff. There is simply nothing in the March memo
that states whether the layoff will be longer (or shorter) than six
months.
Mr. Jones alleges that it was the indirect and lingering effects of
the economic downturn caused by the COVID-19 pandemic that resulted
in Scribe's decision to engage in a mass layoff of him and putative
class members. Thus, he asserts, the plant closings and/or mass
layoffs in this case were 'due to' the economic downturn Scribe's
manufacturing business experienced. That drop-off was 'due to'
governmental mandates and private-sector choices made considering
the appearance and growth of the pandemic.
Mr. Jones initiated this putative class action against Scribe on
Dec. 9, 2020. Subsequently, after a stay of the case, Jones filed
an amended complaint on Dec. 6, 2021, asserting a claim for
violation of the WARN Act.
Scribe now moves to dismiss, arguing that Jones' claim is barred by
the WARN Act's natural disaster exception. Jones has responded in
opposition. The United States has filed a Statement of Interest,
urging the Court to defer to the Secretary of Labor's
interpretation of the natural disaster exception regarding
causation. Scribe has responded to the Statement of Interest.
Additionally, other non-party entities have filed amicus briefs.
Analysis
Scribe argues that the complaint must be dismissed with prejudice
because the natural disaster exception to the WARN Act applies.
Scribe's argument has two parts: (1) that the COVID-19 pandemic is
a natural disaster, and (2) the standard for causation under the
natural disaster exception is "but-for" causation, which it
contends is met here.
Regarding causation, Scribe argues the phrase "due to" "is
regularly used interchangeably with the phrases 'but for' and 'but
for cause'" and there is no question that the COVID-19 pandemic was
the "but for" cause of the layoffs at issue. Scribe relies on a
Southern District of Texas decision currently on appeal before the
Fifth Circuit Court of Appeals, in which the district court held
that the WARN Act's phrase 'due to' means but-for causation, such
that the COVID-19 pandemic need not be the direct or sole cause of
the layoffs for the natural-disaster exception to apply, citing
Easom v. US Well Servs., Inc., 527 F.Supp.3d 898, 912-915 (S.D.
Tex. 2021).
Thus, Scribe urges the Court to adopt an interpretation of the
natural disaster exception's causation requirement that is less
stringent than the one promulgated by the Department of Labor, the
agency responsible for implementing regulations under the WARN
Act.
Because the Court is dealing with an agency's interpretation of a
statute it administers, the Court must utilize the two-step Chevron
analysis, Judge Hernandez Covington notes, citing Rivas v. U.S.
Att'y Gen., 765 F.3d 1324, 1328 (11th Cir. 2014) (citing Chevron
U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S.
837 (1984)).
First, the Court must determine whether the statute at issue is
ambiguous, considering whether Congress has directly spoken to the
precise question at issue. If the statute is unambiguous, the Court
applies it according to its terms and no deference is due.
Second, if the statute is silent or ambiguous regarding the
particular issue presented, the Court must decide whether the
agency's interpretation is reasonable or based on a permissible
construction of the statute.
Here, Judge Hernandez Covington finds that the statute is ambiguous
as to whether the phrase "due to" imposes a "but for" or proximate
cause requirement. The phrase "due to" leaves unclear the level of
causation required, whether proximate causation or "but for"
causation. While Scribe's interpretation of the phrase "due to" as
meaning "but for" may be reasonable, it is not the only reasonable
interpretation, the Judge holds.
Thus, the Court moves on to Chevron Step 2. The Secretary's
interpretation of the natural disaster exception is reasonable and
warrants deference. As interpreted by the Secretary, only employers
who experience direct damage caused by a natural disaster, such as
a plant being destroyed by a flood, may utilize the natural
disaster exception. Thus, these directly affected employers may
provide either no notice or short notice of layoffs.
Judge Hernandez Covington says that this makes sense because an
employer cannot predict 60 days in advance that a worksite will be
destroyed by a natural disaster and may not be able to provide any
advance notice before a mass layoff precipitated by that
destruction. In contrast, an employer suffering from indirect,
downstream economic effects from a natural disaster, such as the
local economy suffering after a recent flood in the area, has more
time to predict that layoffs will become necessary. Thus, such an
indirectly affected employer has a greater ability to provide
advance notice to employees.
Importantly, the Secretary's reading of the natural disaster
exception does not leave employers indirectly impacted by a natural
disaster without relief, Judge Hernandez Covington holds.
Employers, who experience indirect effects from a natural disaster,
may invoke the WARN Act's unforeseeable business circumstance
exception. The unforeseeable business circumstance exception allows
an employer to provide less than 60 days' notice of an impending
layoff, but does not state that "no notice" is required like the
natural disaster exception does. Thus, employers only impacted by
the indirect effects of a natural disaster can pursue the
unforeseeable business circumstance exception, rather than the
natural disaster exception.
Reading the natural disaster exception as requiring direct
causation promotes the central purpose of the WARN Act -- to
provide employees with reasonable advance notice of impending
layoffs -- without preventing employers indirectly affected by
natural disasters from utilizing the unforeseeable business
circumstance exception. In short, the Court defers to the Secretary
of Labor's determination that the natural disaster exception
requires direct causation.
Judge Hernandez Covington finds that the amended complaint
plausibly alleges that the layoffs here were not directly caused by
the COVID-19 pandemic. Rather, Jones alleges the plant closings
and/or mass layoffs in this case were 'due to' the economic
downturn Scribe's manufacturing business experienced, which in turn
was 'due to' governmental mandates and private-sector choices made
considering the appearance and growth of the pandemic. Therefore,
at the motion to dismiss stage, Scribe has not shown that the
natural disaster exception applies.
The Motion is denied on this basis and the Court need not reach the
issue of whether the COVID-19 pandemic qualifies as a natural
disaster.
Accordingly, Defendant Scribe Opco, Inc.'s Motion to Dismiss is
denied. The Defendant's answer to the amended complaint is due
within fourteen days of the date of this Order.
A full-text copy of the Court's Order dated March 17, 2022, is
available at https://tinyurl.com/akr5p3j6 from Leagle.com.
SHEN BEAUTY: Bunting Files ADA Suit in E.D. New York
----------------------------------------------------
A class action lawsuit has been filed against Shen Beauty LLC. The
case is styled as Rasheta Bunting, individually and as the
representative of a class of similarly situated persons v. Shen
Beauty LLC, Case No. 1:22-cv-01739 (E.D.N.Y., March 29, 2022).
The lawsuit is brought over alleged violation of the Americans with
Disabilities Act.
Shen Beauty -- https://shen-beauty.com/ -- offers unrivaled
selection of, skin care, makeup, fragrance and more from classic
and emerging brands.[BN]
The Plaintiff is represented by:
Dan Shaked, Esq.
SHAKED LAW GROUP, P.C.
14 Harwood Court, Suite 415
Scarsdale, NY 10583
Phone: (917) 373-9128
Email: shakedlawgroup@gmail.com
SMART MORTGAGE: Court Refuses to Dismiss FLSA Claims in Noe Suit
----------------------------------------------------------------
In the case, BRIAN NOE and EILEEN PRUITT, Plaintiffs v. SMART
MORTGAGE CENTERS, INC., et al., Defendants, Case No. 21 CV 1668
(N.D. Ill.), Judge Manish S. Shah of the U.S. District Court for
the Northern District of Illinois, Eastern Division, granted in
part and denied in part the Defendants' motion to dismiss.
I. Introduction
Plaintiffs Brian Noe and Eileen Pruitt worked as loan officers for
Defendant Smart. They claim that Smart and two of its officers --
Richard Birk and Brian Birk -- failed to pay them minimum and
overtime wages and deducted money from their commissions in
violation of the Fair Labor Standards Act, the Illinois Minimum
Wage Act, and the Illinois Wage Payment Collection Act. The Birks
filed a motion to dismiss the FLSA claims and the Plaintiffs'
request for injunctive relief.
To survive a motion to dismiss under Rule 12(b)(6), a complaint
must state a claim upon which relief may be granted. The complaint
must contain "sufficient factual matter, accepted as true, to state
a claim to relief that is plausible on its face." In reviewing a
motion to dismiss, a court must construe all factual allegations as
true and draw all reasonable inferences in the plaintiffs' favor.
II. Background
Brian Noe and Eileen Pruitt worked as inside sales loan officers,
selling residential mortgage loans on behalf of Smart. Noe worked
for the Defendants for slightly more than six years, while Pruitt
was in her position for nine months.
Plaintiffs Noe and Pruitt "routinely worked more than 40 hours per
week." They were paid on commission, and if they failed to earn
commissions, were not paid anything. When Noe and Pruitt began
their jobs, they received no compensation until they generated
commissions. As a result, in the weeks at the beginning the
Plaintiffs' employment, they weren't paid anything or "were paid a
nominal amount" for their work. Noe and Pruitt also were paid
nothing or a nominal amount during some weeks in the first quarter
of fiscal years, around the holidays, and in late summer.
The Birks were the president and vice president, respectively, of
Smart. Both men controlled the terms of Noe's and Pruitt's work and
were authorized to hire and fire the Plaintiffs. The Birks
controlled, created, and maintained the corporation's wage-hour
policies and practices, decided how wages were calculated and hours
were tracked, and participated in decisions about how Noe and
Pruitt were compensated.
The Plaintiffs filed the putative class action against Smart and
the Birks, seeking unpaid minimum and overtime wages and other
damages under the FLSA and Illinois's Minimum Wage Act and Wage
Payment and Collection Act. In the complaint's prayer for relief,
the Plaintiffs ask for "injunctive relief for those collective and
class members still employed by Defendants against any and all
ongoing unlawful employment practices."
The Defendants move to dismiss the request for an injunction, and
argue that Noe and Pruitt don't have standing for that kind of
relief. An injunction is available under the FLSA to remedy minimum
wage and overtime violations, but Noe and Pruitt must meet the
threshold requirements of Article III standing to pursue an
injunction.
III. Discussion
To support their request for injunctive relief, the Plaintiffs
point to an injury: Harm to current employees at Smart caused by
ongoing unlawful employment practices. But that harm isn't shared
by former employees like Noe and Pruitt. Because the Plaintiffs
must allege an injury to themselves rather than to members of the
class they want to represent, they lack standing to seek an
injunction. Noe and Pruitt failed to respond to the Defendants'
argument, and forfeited any arguments against dismissing the
request for injunctive relief. The request for injunctive relief is
dismissed without prejudice for lack of standing.
Defendants raise two challenges to the FLSA overtime and minimum
wage claims. First, they contend that Noe and Pruitt failed to
identify any week when they weren't properly compensated. Second,
the Birks argue that they weren't "employers" under the Act.
The complaint identifies the six years when Noe worked for Smart
and the nine months when Pruitt was an employee there. The
Plaintiffs routinely worked more than forty hours per week, and
were paid by commission and sometimes "nominal" payments. Noe and
Pruitt claim that they were underpaid at the beginning of their
employment, during the first quarter of the fiscal year, around
holidays, and in late summer. The Plaintiffs allege that there were
some weeks when they received no pay at all.
Judge Shah finds that while Noe and Pruitt could have been more
specific about the particular weeks that they were underpaid, their
allegations are sufficient to put the Defendants on notice as to
the circumstances of the FLSA claims. The allegations about the
beginning of the Plaintiffs' employment, combined with the fact
that Noe and Pruitt routinely worked more than 40 hours per week,
raise an inference that there was at least one workweek in which
Noe and Pruitt didn't receive overtime or the minimum wage.
The Defendants argue that Judge Shah should dismiss the FLSA claims
because the Plaintiffs didn't allege an hourly wage, total number
of hours worked, or total compensation received for any workweek.
But, Judge Shah holds that, that level of detail isn't required.
The cases that the Defendants cite are distinguishable because the
allegations that the Plaintiffs "routinely" worked more than 40
hours per week, weren't paid overtime, and were never paid minimum
wage support an inference that they were underpaid.
In Schneider v. Cornerstone Pints, Inc., Judge Shah identified a
four-part rule that he believed (and still believes) to be the best
way to assess an individual employer's status under the FLSA.
First, to qualify as an employer, a person must act in the
interests of an employer in relation to an employee, and must do
more than merely supervise. Second, all relevant facts should be
considered, including whether the defendant (1) possessed the power
to hire and fire the employees; (2) supervised and controlled
employee work schedules or conditions of employment; (3) determined
the rate and method of payment; and (4) maintained employment
records. Third, to be an employer, a defendant's conduct must have
caused, in whole or in part, the alleged violation. Fourth, the
defendant must have actually exercised his authority, at least
enough to have caused the violation in whole or in part. The bottom
line is that Judge Shah looks at all facts surrounding the Birks'
supervision of Noe and Pruitt and ask whether the Defendants
exercised control and authority over the Plaintiffs in a manner
that caused the alleged FLSA violations.
The Judge finds that the Birks allegedly had the power to hire and
fire Noe and Pruitt, control the Plaintiffs' work, wages, and
hours, and were responsible for tracking employee hours. He finds
that all four of the economic-realities factors point towards the
Birks being employers, and the Plaintiffs have also alleged that
the Birks made the decisions that led to the underpayments in the
case. The Defendants acted in the interests of an employer in
relation to Noe and Pruitt, and there are allegations that their
actions extended beyond supervision to decisions about wages,
hours, and compensation policies. Finally, the Plaintiffs aren't
required to allege details about how the Defendants supervised
their work.
III. Order
Based on the complaint, Judge Shah concludes that the Birks may
qualify as employers under the FLSA. He granted in part and denied
in part the Defendants' motion to dismiss. FLSA claims are not
dismissed. The request for injunctive relief is dismissed without
prejudice. The Plaintiffs' response to the motion for sanctions is
due April 19, 2022, and the Defendants' reply is due May 3, 2022.
The Court will issue a ruling via cm/ecf. The Parties will file a
status report with an update on written discovery progress.
A full-text copy of the Court's March 22, 2022 Order is available
at https://tinyurl.com/mv4fw8x4 from Leagle.com.
SOCLEAN INC: Arnouville Suit Transferred to W.D. Pennsylvania
-------------------------------------------------------------
The case styled as Kelby J. Arnouville, on behalf of himself and
all others similarly situated v. SoClean, Inc., Case No.
1:22-cv-00508 was transferred from the U.S. District Court for the
Western District of Louisiana, to the U.S. District Court for the
Western District of Pennsylvania on March 29, 2022.
The District Court Clerk assigned Case No. 2:22-cv-00502-JFC to the
proceeding.
The nature of suit is stated as Contract Product Liability for
Personal Injury.
SoClean, Inc. -- https://www.soclean.com/ -- manufactures cleaning
devices. The Company produces automated continuous positive airway
pressure (CPAP) cleaners and sanitizers which improves health
outcomes and quality of life for those suffering from obstructive
sleep apnea and other sleeping disorders.[BN]
The Plaintiff is represented by:
Patrick Wayne Pendley, Esq.
PENDLEY, BAUDIN & COFFIN
24110 Eden Street
Post Office Drawer 71
Plaquemine, LA 70764
Phone: (225) 687-6396
Fax: (225) 687-6398
Email: pwpendley@pbclawfirm.com
SOCLEAN INC: Morris Suit Transferred to W.D. Pennsylvania
---------------------------------------------------------
The case styled as Robert Morris, on behalf of himself and all
others similarly situated v. SoClean, Inc., Case No. 1:22-cv-00522
was transferred from the U.S. District Court for the Western
District of Louisiana, to the U.S. District Court for the Western
District of Pennsylvania on March 29, 2022.
The District Court Clerk assigned Case No. 2:22-cv-00503-JFC to the
proceeding.
The nature of suit is stated as Contract Product Liability for
Personal Injury.
SoClean, Inc. -- https://www.soclean.com/ -- manufactures cleaning
devices. The Company produces automated continuous positive airway
pressure (CPAP) cleaners and sanitizers which improves health
outcomes and quality of life for those suffering from obstructive
sleep apnea and other sleeping disorders.[BN]
The Plaintiff is represented by:
Patrick Wayne Pendley, Esq.
PENDLEY, BAUDIN & COFFIN
24110 Eden Street
Post Office Drawer 71
Plaquemine, LA 70764
Phone: (225) 687-6396
Fax: (225) 687-6398
Email: pwpendley@pbclawfirm.com
STAMPS.COM INC: Court Issues Final Judgment in Karinski Class Suit
------------------------------------------------------------------
Judge Michael W. Fitzgerald of the U.S. District Court for the
Central District of California issued a Final Judgment and Order in
the lawsuit entitled MATT KARINSKI, Individually and on Behalf of
All Others Similarly Situated, Plaintiff v. STAMPS.COM, INC., et
al., Defendants, Case No. 2:19-cv-01828-MWF-SK (C.D. Cal.).
The matter came before the Court for hearing pursuant to the Order
of the Court, dated Oct. 14, 2021, on the application of the
Settling Parties for approval of the Settlement set forth in the
Stipulation of Settlement dated Aug. 16, 2021. Due and adequate
notice having been given to the Class as required in the Order, the
Court has considered all papers filed and proceedings held.
The Court has jurisdiction over the subject matter of the
Litigation and over all parties to the Litigation, including all
Members of the Class.
Pursuant to Rule 23 of the Federal Rules of Civil Procedure, the
Court approves the Settlement set forth in the Stipulation and
finds that:
(a) the Stipulation and the Settlement contained therein are,
in all respects, fair, reasonable and adequate;
(b) there was no collusion in connection with the Stipulation;
(c) the Stipulation was the product of informed, arm's-length
negotiations among competent, able counsel; and
(d) the record is sufficiently developed and complete to have
enabled the Lead Plaintiff and the Defendants to have
adequately evaluated and considered their positions.
Accordingly, the Court authorizes and directs implementation and
performance of all the terms and provisions of the Stipulation, as
well as the terms and provisions hereof. Except as to any
individual claim of those Persons who have validly and timely
requested exclusion from the Class (identified in Exhibit 1), the
Litigation and all claims contained therein are dismissed with
prejudice as to the Lead Plaintiff and the other Class Members and
as against each and all of the Released Defendant Parties.
The Settling Parties are to bear their own costs except as
otherwise provided in the Stipulation.
No Person will have any claim against the Lead Plaintiff, Lead
Counsel, or the Claims Administrator, or any other designated
person.
Upon the Effective Date, the Lead Plaintiff and each of the Class
Members will be deemed to have, and by operation of this Judgment
will have, fully, finally and forever waived, released, discharged,
and dismissed each and every one of the Released Plaintiff's Claims
(including Unknown Claims) against each and every one of the
Released Defendant Parties with prejudice on the merits.
Any Plan of Allocation submitted by Lead Counsel or any order
entered regarding any attorneys' fee and expense application will
in no way disturb or affect this Judgment and will be considered
separate from this Judgment. Any order or proceeding relating to
the Plan of Allocation or any order entered regarding any
attorneys' fee and expense application, or any appeal from any
order relating thereto or reversal or modification thereof, will
not affect or delay the finality of this Judgment.
Without affecting the finality of this Judgment in any way, the
Court retains continuing jurisdiction over: (a) implementation of
the Settlement and any award or distribution of the Settlement
Fund, including interest earned thereon; (b) disposition of the
Settlement Fund; (c) hearing and determining applications for
attorneys' fees and expenses in the Litigation; and (d) all parties
hereto for the purpose of construing, enforcing and administering
the Settlement.
The Court finds that during the course of the Litigation, the
Settling Parties and their respective counsel at all times complied
with the requirements of Federal Rule of Civil Procedure 11.
In the event that the Settlement does not become effective in
accordance with the terms of the Stipulation, or the Effective Date
does not occur, or in the event that the Settlement Fund, or any
portion thereof, is returned to the Defendants or their insurers,
then this Judgment will be rendered null and void to the extent
provided by and in accordance with the Stipulation and will be
vacated; and in such event, all orders entered and releases
delivered in connection herewith will be null and void to the
extent provided by and in accordance with the Stipulation.
The Settling Parties will bear their own costs and expenses except
as otherwise provided in the Stipulation or in this Judgment.
Without further order of the Court, the Settling Parties may agree
to reasonable extensions of time to carry out any of the provisions
of the Stipulation.
The Court directs immediate entry of this Judgment by the Clerk of
the Court.
The Court's orders entered during this Litigation relating to the
confidentiality of information will survive this Settlement.
A full-text copy of the Court's Final Judgment and Order dated
March 17, 2022, is available at https://tinyurl.com/434v98t5 from
Leagle.com.
ROBBINS GELLER RUDMAN & DOWD LLP, STEVEN W. PEPICH --
stevep@rgrdlaw.com -- JASON A. FORGE -- jforge@rgrdlaw.com -- ERIC
I. NIEHAUS -- ericn@rgrdlaw.com -- HILLARY B. STAKEM --
hstakem@rgrdlaw.com -- KEVIN S. SCIARANI -- ksciarani@rgrdlaw.com
-- in San Diego, California, Lead Counsel for the Lead Plaintiff.
STELLAR MANAGEMENT: $1.23MM in Counsel Fees Awarded in Chavez Suit
------------------------------------------------------------------
In the case, DAVID CHAVEZ, et al., Plaintiffs v. STELLAR MANAGEMENT
GROUP VII, LLC, et al., Defendants, Case No. 19-cv-01353-JCS (N.D.
Cal.), Chief Magistrate Judge Joseph C. Spero of the U.S. District
Court for the Northern District of California granted in part the
Plaintiffs' motion for attorneys' fees, costs, and incentive
awards.
In conjunction with their motion for final approval of a class
action settlement, which the Court grants today by a separate
order, the Plaintiffs move to approve awarding from the common
settlement fund attorneys' fees totaling $1,416,666.52, costs
totaling $34,384.78, and incentive awards of $12,000 and $10,000
respectively for the two named plaintiffs serving as class
representatives.
The Plaintiffs' request for attorneys' fees amounts to
approximately one-third of the $4.25 million gross settlement. The
Ninth Circuit has long recognized 25% of a common fund settlement
as a benchmark for awarding attorneys' fees. Courts may adjust that
percentage upwards or downwards depending on the circumstances of a
particular case, based on factors including the nature of the
results for class members, the risk taken by class counsel,
counsel's opportunity cost in taking the case, and comparable
market rates, among other potential considerations.
The Plaintiffs' motion cites Vizcaino v. Microsoft Corp., 290 F.3d
1043, 1048 (9th Cir. 2002) as holding that "the skill required and
the quality of work" are also relevant factors. While that phrase
appears often in district court decisions discussing Vizcaino, the
Ninth Circuit did not identify those factors in that case.
Nevertheless, it agrees that the skill required and the quality of
counsel's work are relevant considerations.
The counsel offers a lodestar "cross-check" to confirm the
reasonableness of their fee request, asserting that the hours they
spent on the case multiplied by reasonable billing rates would
support a total fee of $1,291,655 before accounting for any
multiplier due the contingent nature of the representation or any
other adjustment warranted by the circumstances of the case.
Judge Spero finds that calculation to be of little value. While
some of the billing rates included in that analysis are likely
reasonable, he says, others are well above the local prevailing
rates for attorneys and non-attorney support staff of comparable
skill and experience. Judge Spero does not reach the question of
whether counsel sufficiently documented the hours they spent on the
case.
Weighing the relevant factors, Judge Spero finds that an award of
fees somewhat greater than the 25% benchmark is appropriate, but
not the full one-third share that the counsel has requested. The
motion to approve attorneys' fees is therefore granted in part and
the counsel will recover fees totaling $1,232,500, representing 29%
of the common fund.
The Plaintiffs' motion is granted as to the requests for costs and
incentive awards.
Accordingly, the class counsel will recover $1,232,500 in fees and
$34,384.78 from the common settlement fund, Plaintiff David Chavez
will recover $12,000 from the common fund, and Plaintiff Vincent
Slaughter will recover $10,000 from the common fund. The remainder
of the settlement will be distributed as stated in the parties'
settlement agreement and the Court's separate order granting final
approval.
A full-text copy of the Court's March 18, 2022 Order is available
at https://tinyurl.com/mry572df from Leagle.com.
STERLING BAY: Court Grants Bid to Refer Goddess Class Suit to NLRB
------------------------------------------------------------------
In the case, GODDESS AND BAKER WACKER L.L.C., on behalf of itself
and all others similarly situated, Plaintiff v. STERLING BAY
COMPANIES, L.L.C., Defendant, Case No. 21 C 1597 (N.D. Ill.), Judge
John Z. Lee of the U.S. District Court for the Northern District of
Illinois, Eastern Division, issued a Memorandum Opinion and Order:
a. denying Sterling Bay's motion to dismiss Goddess's
complaint under Federal Rule of Civil Procedure 12(b)(6)
for failure to state a claim; and
b. granting Sterling Bay's motion to refer the case to the
National Labor Relations Board ("NLRB") under the doctrine
of primary jurisdiction.
I. Introduction
Plaintiff Goddess is a tenant in a building in downtown Chicago
managed by Defendant Sterling Bay. Goddess alleges that Sterling
Bay conspired with three unions -- International Union of Operating
Engineers Local 399 ("Local 399"); AFL-CIO, Service Employees
International Union, Local 1 ("Local 1"); and Teamsters Local 705
("Local 705") (collectively "the Unions") -- to force Goddess and
other Sterling Bay tenants to use only unionized labor to maintain
and make improvements to their properties.
And so, Goddess brings the putative class action alleging that
Sterling Bay violated the Racketeer Influenced and Corrupt
Organizations Act ("RICO"), 18 U.S.C. Section 1961, et seq., by
colluding with the Unions to extort Goddess in violation of the
Hobbs Act, 18 U.S.C. Section 1951, et seq.
Sterling Bay moves to dismiss Goddess' complaint under Federal Rule
of Civil Procedure 12(b)(6) for failure to state a claim and, in
the alternative, to refer the case to the NLRB.
II. Background
Goddess is a coffee shop and bakery that has rented commercial
space in 121 W. Wacker Drive since 2016. It manages 121 Wacker and
is responsible for supervising contractors' access to the
building.
Since its lease began, Goddess has made extensive improvements to
the premises, including "electrical installation, carpentry,
drywalling, tile installation, plumbing, painting, and ceiling
installation." According to Goddess, Sterling Bay has forced it to
use unionized labor for all of this work. This is in keeping with
Sterling Bay's practice of forcing all tenants at several other
Sterling Bay-managed properties to do the same.
As Goddess sees it, the management company's union-only policy
stems from a conspiratorial agreement between Sterling Bay and the
Unions to require tenants to use unionized labor. The arrangement
purportedly works as follows. At each Sterling Bay building, the
chief engineers, who are members of Local 399, report the presence
of any nonunionized contractors to their union. Local 399 notifies
Sterling Bay of the nonunionized workers and threatens to picket
the Sterling Bay building and display the notorious "Scabby the
Rat" in front of the building, if Sterling Bay does not remove the
nonunionized workers. The other two unions, who benefit from the
arrangement, agree to join the picket.
In an effort to avert picketing in front of its building, Sterling
Bay then contacts the tenant that employed the nonunion labor and
orders it to stop using nonunion labor. Over time, this arrangement
hardened into Sterling Bay's policy to require all tenants to
submit proof of a contractor's union membership before the
contractor is allowed access to the building. This policy is
enforced through Sterling Bay's tenant handbook and its directions
to its building managers to deny contractors access to the building
if the contractors cannot prove that they are union members.
Sterling Bay communicates this policy to all tenants before they
begin a move or contract work.
Because unionized labor is more expensive than nonunionized labor,
Goddess has spent at least 20% more on improvements than it would
have if Sterling Bay had permitted it to use nonunionized labor. It
brings the putative class action under RICO Sections 1962(c)-(d) to
recover these damages for itself and all other Sterling Bay tenants
forced to pay a "premium" for unionized labor. Goddess pleads
racketeering activity under Section 1962(c) and predicate offenses
of extortion under the Hobbs Act, 18 U.S.C. Section 1951, based on
Sterling Bay's alleged "wrongful threat," of a "hot cargo
agreement" in violation of Section 8(e) of the National Labor
Relations Act ("NLRA"), 29 U.S.C. Section 151 et seq. It also
pleads conspiracy to engage in racketeering activity under Section
1962(d).
Sterling Bay moves to dismiss the complaint under Federal Rule of
Civil Procedure 12(b)(6) for failure to state a claim. In the
alternative, it asks the Court to refer the case to the NLRB under
the primary jurisdiction doctrine. Because Sterling Bay raises
primary jurisdiction as both a ground for dismissal and an
alternative basis for NLRB referral, Judge Lee addresses both
motions.
III. Analysis
According to Goddess, Sterling Bay (the RICO "person") colluded
with the Unions (together comprising an "associated-in-fact
enterprise") to engage in numerous acts of extortion (the "conduct"
and "racketeering activity") against Goddess and other Sterling Bay
tenants to force them to use only unionized labor for moving and
contract work. Goddess brings two counts under this theory: conduct
or participation in a RICO enterprise under Section 1962(c), and
RICO conspiracy under Section 1962(d).
A. NLRB Primary Jurisdiction
Sterling Bay first argues that Goddess' RICO claims should be
dismissed because they are "inextricably tied to labor issues"
governed by the NLRA. It points out that Goddess's extortion claim
(the "racketeering activity") is based on an underlying allegation
of a "hot cargo agreement" in violation of Section 8(e) of the
NLRA. Thus, in Sterling Bay's view, Goddess' RICO claim falls
within the primary jurisdiction doctrine, because the alleged
extortion on which it is predicated is "wrongful only by virtue of
the labor laws."
1. Whether Primary Jurisdiction Applies
Judge Lee concludes that the NLRB has primary jurisdiction as to
the conduct alleged in the case. He finds that Goddess does not
allege any legal obligation or set of facts separate from the NLRA
(or the conduct that it proscribes) that would make Sterling Bay
and the Unions' alleged extortion "wrongful." Indeed, the gravamen
of Goddess' complaint is that it was forced to use union labor
against its will. That claim could just as easily have been brought
under Section 8(e)'s prohibition on hot cargo agreements. And "when
a plaintiff challenges an action that is 'arguably subject to
Section 7 or Section 8 of the NLRA,' this challenge is within the
primary jurisdiction of the NLRB."
2. Whether to Stay or Dismiss Without Prejudice
Judge Lee concludes that the only remaining issue is whether to
stay the case pending the NLRB's review or dismiss the complaint
without prejudice. The statute of limitations for a RICO claim is
four years after the plaintiff discovers, or should have
discovered, the injury. Precisely when Goddess discovered or should
have discovered that it was being forced to use union labor for its
improvements is a factual question that cannot be resolved on the
current record. Because it is unclear when the statute of
limitations will expire, Judge Lee finds that dismissing the
complaint without prejudice risks unfairly prejudicing Goddess and,
therefore, will stay the case pending the NLRB's review.
B. Sterling Bay's Remaining Rule 12(b)(6) Arguments
1. Relationship to Interstate Commerce
Sterling Bay raises a number of other arguments to dismiss the
claims. First, it contends that Goddess inadequately pleads a
relationship between the alleged enterprise's activities and
interstate commerce. Sterling Bay points out that the enterprise's
alleged activities occur only in downtown Chicago. But even if the
enterprise's activities only occur within one state, the interstate
commerce element can be met by a showing that the enterprise's
activities "affect" interstate commerce. This bar is quite low.
Goddess alleges that some Sterling Bay tenants injured by the
enterprise's purported extortion are headquartered in other states.
This suffices to show that the enterprise "affects" interstate
commerce for present purposes.
2. Extortion
Next, Sterling Bay argues that Goddess' allegations of "wrongful
threats" fail to state a claim under the Hobbs Act. In support,
Sterling Bay notes that the complaint does not identify any threats
Sterling Bay made to Goddess or any other tenants. This argument
likewise is unpersuasive, Judge Lee holds. To state a claim for
extortion under the Hobbs Act, the plaintiff must show that the
defendant obtained property from the plaintiff with consent induced
by "wrongful use of actual or threatened force, violence, or fear,
or under color of official right." Exploiting a plaintiff's fear of
economic loss is a basis for liability under Section 1951(b). And
when the alleged extortion preys upon an existing fear (such as
fear of business failure), "a defendant can be liable under the
Hobbs Act for the wrongful exploitation of that fear even if there
is no explicit threat."
Goddess alleges that Sterling Bay agrees with the Unions to prevent
any of its tenants from using nonunion labor by, inter alia,
announcing that policy in its tenant handbook and preventing the
tenants from starting work unless they use union contractors.
Sterling Bay's tenants pay these higher labor costs because they
fear economic loss from being unable to make improvements to their
businesses. Taken as true, these factual allegations "allow the
court to draw the reasonable inference," that Sterling Bay extorted
Goddess, preying on its existing fear of losing business by not
being able to complete renovations, even though Goddess has not
alleged that Sterling Bay explicitly threatened it.
3. Existence of an "Enterprise"
Next, Sterling Bay argues that Goddess has not alleged that
Sterling Bay and the Unions constitute an associated-in-fact
enterprise. An associated-in-fact enterprise is "a group of persons
associated together for a common purpose of engaging in a course of
conduct." To be an associated-in-fact enterprise, a group must have
"a purpose, relationships among those associated with the
enterprise, and longevity sufficient to permit these associates to
pursue the enterprise's purpose." Sterling Bay contends that
Goddess has not pleaded the existence of an enterprise because it
has not alleged that Sterling Bay and the Unions acted together to
pursue a joint purpose.
In the case, Goddess has alleged facts showing that Sterling Bay
and the Unions acted cooperatively for the "purpose" of preventing
Sterling Bay tenants from using nonunion contractors. While
discovery may reveal otherwise, Goddess' allegations "allow the
Court to draw the reasonable inference" that Sterling Bay and the
Unions formed an enterprise -- which is enough for their claim to
survive at the pleading stage.
4. Conspiracy
Finally, Sterling Bay argues that Goddess' Section 1962(d)
conspiracy claim fails because Goddess has failed to state a claim
for a Section 1962(c) violation. But this is a derivative argument,
and because the viability of the Section 1962(c) claim will depend
largely upon the determination by the NLRB, Sterling Bay's request
to dismiss the conspiracy claim also is denied.
IV. Conclusion
For the foregoing reasons, Judge Lee denied Sterling Bay's motion
to dismiss for failure to state a claim. He granted Sterling Bay's
motion for primary jurisdictional referral to the NLRB.
The parties are directed to request from the NLRB a ruling on
whether Sterling Bay and the Unions engaged in a hot cargo
agreement in violation of Section 8(e) of the NLRA as alleged in
the complaint. The Court enters a stay of proceedings in the case
pending the NLRB's decision. The parties are ordered to file a
status report within five days of the NLRB's determination.
A full-text copy of the Court's March 22, 2022 Memorandum Opinion &
Order is available at https://tinyurl.com/4mxjwmjc from
Leagle.com.
SUMMIT FOOD: Sager Files Suit in Cal. Super. Ct.
------------------------------------------------
A class action lawsuit has been filed against Summit Food Service,
LLC. The case is styled as Gabriel Sager, individually and on
behalf of all others similarly situated v. Summit Food Service,
LLC, Case No. SCV-270486 (Cal. Super. Ct., Sonoma Cty., March 29,
2022).
The case type is stated as "Unlimited Other Employment."
Summit -- https://summitfoodservice.com/ -- is experienced in
managing all sizes and types of correctional facilities as a
national leader in corrections food service management.[BN]
The Plaintiff is represented by:
Benjamin H. Haber, Esq.
Arrash T. Fattahi, Esq.
WILSHIRE LAW FIRM
3055 Wilshire Blvd., Fl. 12
Los Angeles, CA 90010-1176
Phone: 213-381-9988
Fax: 213-381-9989
Email: benjamin@wilshirelawfirm.com
afattahi@wilshirelawfirm.com
UNITED BEHAVIORAL: 9th Circuit Reverses Judgment in Wit ERISA Suit
------------------------------------------------------------------
In the cases, DAVID WIT, et al., Plaintiffs-Appellees, LINDA
TILLITT; MARY JONES, Intervenor-Plaintiffs-Appellees v. UNITED
BEHAVIORAL HEALTH, Defendant-Appellant. GARY ALEXANDER, on his own
behalf and on behalf of his beneficiary son, Jordan Alexander, et
al., Plaintiffs-Appellees, MICHAEL DRISCOLL,
Intervenor-Plaintiff-Appellee v. UNITED BEHAVIORAL HEALTH,
Defendant-Appellant, Case Nos. 20-17363, 21-15193, 20-17364,
21-15194 (9th Cir.), the U.S. Court of Appeals for the Ninth
Circuit reversed the judgment entered in the lawsuit brought under
the Employee Retirement Income Security Act.
The Defendants appeal the district court's judgment in the ERISA
class action against United Behavioral Health (UBH) for breach of
fiduciary duties and wrongful denial of benefits pursuant to 29
U.S.C. Section 1132(a)(1)(B) and (a)(3)(A).
First, UBH argues that the Plaintiffs lacked Article III standing
to bring their claims because: (1) the Plaintiffs did not suffer
concrete injuries; and (2) the Plaintiffs did not show proof of
benefits denied, they cannot show any damages traceable to UBH's
Guidelines.
The Ninth Circuit disagrees. It explains that to determine whether
a statutory violation caused a concrete injury, it asks: "(1)
whether the statutory provisions at issue were established to
protect [the plaintiff's] concrete interests (as opposed to purely
procedural rights), and if so, (2) whether the specific procedural
violations alleged in this case actually harm, or present a
material risk of harm to, such interests."
The Ninth Circuit holds that the Plaintiffs sufficiently alleged a
concrete injury. The alleged injury is also sufficiently
particularized because the Guidelines are applied to the
contractual benefits afforded to each class member. The Plaintiffs
have shown that UBH's actions resulted in uncertainty concerning
the scope of their benefits and the material risk of harm to their
contractual rights.
As to the Plaintiffs' denial of benefits claim, the Plaintiffs
alleged that UBH adjudicated and denied their requests for coverage
based on criteria that were inconsistent with the terms of member
plans in an arbitrary and capricious manner. The Ninth Circuit
concludes that this claim also satisfies the concrete and
particularized injury requirement. The Plaintiffs need not have
demonstrated that they were, or will be, actually denied benefits
to allege a concrete injury. Finally, the alleged injury is "fairly
traceable" to UBH's conduct. Thus, the Plaintiffs have established
Article III standing to assert their claims.
Second, UBH argues the district court erred by certifying a class
that required individualized determinations. But the Plaintiffs'
fiduciary duty claim, alleging that UBH applied overly restrictive
Guidelines and thereby compromised their contractual rights under
their Plans, is capable of being resolved on a class-wide basis,
the Ninth Circuit holds. It says, the district court did not abuse
its discretion by concluding the claim was within Rule 23's ambit.
As to certification of the denial of benefits claim, the Plaintiffs
avoided the individualized nature of the benefits remedy available
under Section 1132(a)(1)(B) by seeking "reprocessing." The Ninth
Circuit need not reach whether the district court's "reprocessing"
remedy overextended Rule 23 in violation of the Rules Enabling Act
because this claim fails on its merits.
Third, UBH argues the district court did not afford it the proper
level of deference. Because the Plans in the case confer UBH with
discretionary authority to interpret the terms of the Plans, the
Ninth Circuit reviews the plan administrator's decisions for an
abuse of discretion. It finds that while the district court noted
the correct standard of review, the district court misapplied this
standard by substituting its interpretation of the Plans for
UBH's.
UBH's interpretation -- that the Plans do not require consistency
with the GASC -- was not unreasonable. The Plans exclude coverage
for treatment inconsistent with the GASC; Plaintiffs did not show
that the Plans mandate coverage for all treatment that is
consistent with the GASC. The Plaintiffs argue UBH had a conflict
of interest, which would decrease the level of deference to be
afforded in applying an abuse of discretion standard. But even if
UBH has a conflict of interest because it serves as plan
administrator and insurer for fully insured plans that are the main
source of its revenue, this would not change the outcome on these
facts.
The Ninth Circuit therefore reversed. It need not reach UBH's
argument that the unnamed Plaintiffs failed to comply with the
Plans' administrative exhaustion requirement.
A full-text copy of the Court's March 22, 2022 Memorandum is
available at https://tinyurl.com/4v2v86v5 from Leagle.com.
UNITED COLLECTION: Eady Files FDCPA Suit in E.D. Michigan
---------------------------------------------------------
A class action lawsuit has been filed against United Collection
Bureau, Inc., et al. The case is styled as Andre Eady, other,
individually and on behalf of all others similarly situated v.
United Collection Bureau, Inc., LVNV Funding LLC, Case No.
2:22-cv-10677-MFL-APP (E.D. Mich., March 29, 2022).
The lawsuit is brought over alleged violation of the Fair Debt
Collection Practices Act.
United Collection Bureau, Inc. (UCB) -- https://ucbinc.com/ --
provides business process outsourcing and collection call center
services for the financial, healthcare and government services
industries.[BN]
The Plaintiff is represented by:
Yaakov Saks, Esq.
STEIN SAKS, PLLC
One University Plaza, Suite 620
Hackensack, NJ 07601-2726
Phone: (201) 282-6500
Email: ysaks@steinsakslegal.com
UNITED STATES: Federation Allowed to Intervene in Miller v. USDA
----------------------------------------------------------------
In the case, SID MILLER, on behalf of himself and others similarly
situated; GREG MACHA; JAMES MEEK; LORINDA O'SHAUGHNESSY; JEFF
PETERS, Plaintiffs-Appellees v. TOM VILSACK, in his official
capacity as Secretary of Agriculture, Defendant-Appellee v.
FEDERATION OF SOUTHERN COOPERATIVES/LAND ASSISTANCE FUND,
Movant-Appellant, Case No. 21-11271 (5th Cir.), the U.S. Court of
Appeals for the Fifth Circuit reversed the district court's denial
of the Appellant's motion to intervene.
Appellant Federation of Southern Cooperatives (the "Federation")
moved to intervene in a class action challenging the
constitutionality of Section 1005 of the American Rescue Plan Act
of 2021 ("ARPA"), Pub. L. No. 117-2, 135 Stat. 4. The district
court denied the motion. The Court of Appeals reversed and
remanded.
I. Background
The Secretary of the United States Department of Agriculture
("USDA") is authorized under Section 1005 to "provide a payment in
an amount up to 120% of the outstanding indebtedness of each
socially disadvantaged farmer or rancher" to pay off the
disadvantaged farmer or rancher's loans "made" or "guaranteed by
the Secretary." The term "socially disadvantaged farmer or rancher"
("SDFR") is defined as "a farmer or rancher who is a member of a
socially disadvantaged group," which, in turn, means that the
members of the group "have been subjected to racial or ethnic
prejudice because of their identity as members of a group without
regard to their individual qualities." Per USDA interpretation,
SDFR includes (but is not limited to): "American Indians or Alaskan
Natives; Asians; Blacks or African Americans; Native Hawaiians or
other Pacific Islanders; and Hispanics or Latinos." Notice of Funds
Availability; American Rescue Plan Act of 2021 Section 1005 Loan
Payment (ARPA), 86 Fed. Reg. 28,329, 28,330 (May 26, 2021).
Sid Miller, a white farmer excluded from the SDFR designation (who
describes his ancestry as "overwhelmingly white"), filed a class
action lawsuit against the Secretary, claiming that USDA violated
Title VI of the Civil Rights Act of 1964 and the U.S. Constitution
"by excluding individuals and entities from the benefit of federal
programs on the grounds of race, color, and national origin." The
district court certified the class and granted a preliminary
injunction to enjoin the Secretary from administering Section
1005.
The Federation, "a nonprofit cooperative association of Black
farmers, landowners, and cooperatives," filed a motion to intervene
as a defendant in the action. The organization argued it was
entitled to intervention as a matter of right under Federal Rule of
Civil Procedure 24(a) or, alternatively, permissive intervention
under Rule 24(b). Both the Secretary and the Plaintiffs opposed the
motion to intervene as a matter of right, arguing that the
Federation failed to show that the Government inadequately
represented the Federation's interest. Only the Plaintiffs opposed
permissive intervention.
The district court denied the Federation's motion to intervene on
both grounds. The Federation timely appealed, and the Fifth Circuit
granted the motion to expedite.
II. Discussion
On appeal, the Federation argues that the district court erred in
denying its motion to intervene based on intervention as a matter
of right or (alternatively) permissive intervention. The Fifth
Circuit agrees that the court erred in denying intervention as a
matter of right, mooting the permissive intervention issue.
To prevail on a motion to intervene as a matter of right, an
applicant must meet four requirements: (1) The application must be
timely; (2) the applicant must have an interest relating to the
property or transaction that is the subject of the action; (3) the
applicant must be so situated that the disposition of the action
may, as a practical matter, impair or impede its ability to protect
its interest; and (4) the applicant's interest must be inadequately
represented by the existing parties to the suit.
Because the parties do not dispute that the Federation can meet the
first three prongs of the Rule 24(a) inquiry, the Fifth Circuit
limits its analysis to the fourth prong -- whether the Federation's
interest is adequately represented by the Secretary. It has held
that "the applicant has the burden of demonstrating inadequate
representation, but this burden is 'minimal.'" However, "it cannot
be treated as so minimal as to write the requirement completely out
of the rule."
Therefore, the Fifth Circuit has "created two presumptions of
adequate representation that intervenors must overcome in
appropriate cases." The first presumption applies "when the
would-be intervenor has the same ultimate objective as a party to
the lawsuit." The second presumption applies in cases where a party
"is presumed to represent the interests of all of its citizens,"
such as "when the putative representative is a governmental body or
officer charged by law with representing the interests of the
intervenor." This presumption is limited, however, to "suits
involving matters of sovereign interest."
The district court did not explicitly mention these two
presumptions, but it noted that "where the party whose
representation is said to be inadequate is a governmental agency,"
the necessary showing of inadequacy needed to be "much stronger."
The Fifth Circuit disagrees with this conclusion because the second
presumption is not in play in the case, so it needs not apply it.
Turning to the first presumption, in order to overcome it, "the
applicant for intervention must show adversity of interest,
collusion, or nonfeasance on the part of the existing party."
Undoubtedly, the Secretary and the Federation share the "same
ultimate objective" -- upholding the constitutionality of Section
1005. Therefore, the relevant inquiry is whether the Federation can
"show adversity of interest" by demonstrating that its interests
diverge from the Secretary's "in a manner germane to the case." The
Fifth Circuit concludes that the Federation has made such a
showing.
The Fifth Circuit concludes that the Federation has successfully
rebutted the first presumption. Given its "broad policy favoring
intervention," the Fifth Circuit holds that the Federation has met
its "minimal" burden demonstrating inadequate representation
(though it limits this holding to the facts of the case).
III. Disposition
Therefore, the Fifth Circuit reversed the district court's denial
of intervention as a matter of right and remanded with the
directive to permit the Federation's intervention.
A full-text copy of the Court's March 22, 2022 Order is available
at https://tinyurl.com/yckzbydj from Leagle.com.
VINELAND, NJ: Court Grants in Part Bid to Dismiss M.D. v. VPS
-------------------------------------------------------------
In the case, M.D. and S.H., individually and on behalf of their
minor child L.D., Plaintiffs v. VINELAND CITY BOARD OF EDUCATION
d/b/a VINELAND CITY PUBLIC SCHOOLS; NEW JERSEY DEPARTMENT OF
EDUCATION; KEVIN DEHMER, Interim Commissioner of Education; NEW
JERSEY OFFICE OF ADMINISTRATIVE LAW; KATHLEEN CALEMMO,
Administrative Law Judge, DEAN J. BUONO, Administrative Law Judge;
and DOES 1-250, SIMILARLY SITUATED ADMINISTRATIVE LAW JUDGES,
Defendants, Case No. 1:19-cv-12154-NLH-MJS (D.N.J.), Judge Noel L.
Hillman of the U.S. District Court for the District of New Jersey
granted in part and denied in part the State Defendants' Motion to
Dismiss Plaintiffs' Complaint.
I. Background
The Plaintiffs allege that L.D. was diagnosed with Attention
Deficit Hyperactivity Disorder along with other neurological
disorders when he was in the first grade. At that time, because
L.D.'s parents felt that he was not getting the proper educational
services at the public elementary school, they sent him to a
charter school in the area. L.D. struggled at the charter school
and his parents re-enrolled him in the public elementary school
when he reached the fifth grade. However, L.D. was provided with a
similar education plan as the one he received at the charter school
and struggled academically.
Though Vineland City Public Schools ("VPS") held an Initial
Identification and Evaluation Planning session with the Plaintiffs
and recorded that L.D. had some disabilities, VPS refused to
consider L.D. for special education despite multiple requests. When
VPS finally agreed to evaluate L.D., they still refused to provide
special education and suggested that L.D.'s parents speak to him
about his struggles. The Plaintiffs allege that the evaluation that
was provided fell grossly short of the legal standard for such
evaluations. After continued failed efforts to get VPS to address
their concerns, the Plaintiffs removed L.D. from VPS and placed him
in a private program, where he greatly improved his academic
performance.
On June 28, 2018, the Plaintiffs filed a due process complaint
against VPS with the NJDOE. VPS never responded to the complaint,
and it was later transferred to the OAL for a hearing. The
Plaintiffs allege that though they were entitled to a hearing
within approximately 10 days of that transmittal, ALJ Buono held a
settlement conference instead. Thereafter, because the parties did
not settle, the matter was transferred to ALJ Calemmo to hold a
hearing, who set the hearing date for months out into the future,
despite there being no adjournment request by the parties. The
Plaintiffs allege that ALJ Calemmo issued her opinion 209 days
after their case was transmitted to the OAL and 60 days after the
last hearing was held. They also generally allege that the ALJs
were not properly trained and supervised by the NJDOE and OAL in
order to be able to carry out their responsibilities under the
law.
The Plaintiffs originally filed the case against VPS on May 6,
2019. On Oct. 23, 2020, the Plaintiffs amended the complaint to
include the State Defendants. The operative complaint added various
counts against some or all of the State Defendants. They are Count
I (legal error on the standard of FAPE in violation of the IDEA by
ALJ Calemmo); Count III (procedural violations of the IDEA by ALJ
Calemmo); Count IV (other legal errors of ALJ Calemmo against the
OAL and ALJ Calemmo); Count VIII (systemic violation of the 10 Day
Peremptory Hearing Date rule by the State Defendants); Count IX
(systemic violation of the adjournment rule by the State
Defendants); Count X (systemic violation of the access to records
procedural safeguards by the State Defendants); Count XI (systemic
violation of discovery rules by the State Defendants); Count XII
(systemic violation of the rules of evidence by the State
Defendants); Count XIII (systemic violation of New Jersey
regulations in special education cases by the State Defendants);
Count XIV (systemic violation of hearing officer qualifications by
the NJDOE, the OAL, ALJ Buono, ALJ Calemmo, and Doe ALJs); Count XV
(systemic violation of the independence of the adjudicating body of
special education disputes by the State Defendants); Count XVI
(federal preemption against the State Defendants); Count XVII
(violation of Section 504 of the Rehabilitation Act of 1973, 29
U.S.C. Section 794, et seq., by the NJDOE, the OAL, ALJ Buono, and
ALJ Calemmo); Count XVIII (violation of Title II of the Americans
with Disabilities Act of 1990, 42 U.S.C. Section 12101 et seq. (the
"ADA") by the NJDOE, the OAL, ALJ Buono, and ALJ Calemmo); Count
IXX (systemic civil rights violations under 42 U.S.C. Section 1983
by the State Defendants); Count XX (systemic violation of the 45
Day Rule as Denial of FAPE by the State Defendants); and Count XXI
(procedural violations of the IDEA by the State Defendants).
Instead of attacking the complaint count by count, the State
Defendants organize their motion to dismiss around certain legal
theories and arguments. Thus, Judge Hillman addresses the motion to
dismiss by proceeding through the State Defendants' arguments in
the order that they are raised.
II. Analysis
A. Failure to Show Violation of the IDEA or New Jersey Regulations
by the State Defendants
The State Defendants move to dismiss the claims that revolve around
their alleged violation of the IDEA on the grounds that the
Plaintiffs have failed to state claims. The State Defendants argue
that they have sufficient procedures in place to comply with the
IDEA and the Plaintiffs' complaint is really just venting their
discontent with the ALJ's decision. With respect to Count VIII and
IX, they argue that there is no rule that a due process hearing
must be conducted within ten days of a case's transmittal from the
NJDOE to the OAL and that settlement is encouraged under the IDEA.
Judge Hillman opines that the Plaintiffs allege that they did not
receive a hearing anywhere close to ten days after the transmittal
of their case to the OAL -- instead they received a settlement
conference. That is more than enough to state a plausible claim at
this juncture. Similarly, the State Defendant's attack on Count IX
alleging a violation of the adjournment rule completely misses the
fact that the IDEA only allows adjournments at the request or
consent of the parties and Plaintiffs allege that there was no
request or consent to some of the lengthy adjournments.
In the same vein, the Plaintiffs have adequately pled in Count X
that the procedures provided by the State Defendants did not
adequately protect their discovery rights by not requiring VPS to
provide discovery at least five days before the hearing. In
addition, the Plaintiffs have adequately pled that the State
Defendants failed to ensure the independence of the OAL (Count XV)
and that ALJs were adequately trained (Count XIV).
The State Defendants also argue that the Plaintiffs have not shown
a systemic violation of the IDEA. Judge Hillman disagrees. He
opines that the Plaintiffs have alleged that the problems in how
their due process matter was handled was rooted in widespread
issues that make the system in place futile to remedy their
concerns. Discovery on their individual matter certainly could bear
out their concerns.
B. Whether Plaintiffs' IDEA Claims Against State Officials Must be
Dismissed
The State Defendants' argument that the counts alleging violation
of the IDEA against state officials must be dismissed because the
IDEA does not allow claims against individual officials has some
support in case law, Judge Hillman holds. That said, he
acknowledges that "in many circumstances it is appropriate for a
plaintiff to assert IDEA and Rehabilitation Act claims against
individuals in their 'official capacities' as school
administrators, school district personnel, or school board
members." To be sure, the court in New Jersey Prot. & Advoc., Inc.,
ended up dismissing the claims against the individuals named in
their official capacities as duplicative of the claims against the
state. It may indeed be the case that such claims will turn out to
be duplicative in the matter, but at this early stage in
litigation, the Court is not prepared to dismiss the claims against
the individual defendants on this ground. With the scope of the
liability, if any, that may actually fall to the NJDOE and the OAL
unresolved at this point in litigation, Judge Hillman will not
dismiss the claims against the individual defendants as
duplicative.
C. Whether the ALJs Are Entitled to Judicial Immunity
The State Defendants argue that the ALJs sued in the matter are
protected by judicial immunity and Judge Hillman agrees. He says,
the Plaintiffs' principal argument against this is that the law
does not recognize judicial immunity for state ALJs. At least one
panel of the Third Circuit has recognized judicial immunity for a
state official acting in the capacity of an ALJ. In addition,
judicial immunity as a doctrine has been understood to broadly
insulate judicial officers for their acts taken in a judicial
capacity.
D. Whether Plaintiffs' Section 1983 Claims Must Be Dismissed
Judge Hillman will dismiss the claims under Section 1983 against
the NJDOE and the OAL with prejudice because they are arms of the
state, and the state as not waived its Eleventh Amendment immunity.
He will not, however, dismiss the claim against the Commissioner at
this time. While the State Defendants are correct that the IDEA
does not allow the Plaintiffs to use the IDEA to use Section 1983
to remedy violations of the IDEA, it does not bar suit under
Section 1983 based on separate substantive rights.
E. Violation of Section 504 and the ADA
The NJDOE also moves to dismiss Count XVII, violation of Section
504, and Count XVIII, violation of the ADA. They argue that
dismissal of Counts XVII and XVIII is appropriate because the
"amended complaint is utterly bereft of any factual allegations
that the State Defendants denied the Plaintiffs' participation in
or the ability to receive the benefits of any State program or
activity, and it similarly fails to allege that they were subject
to discrimination under any program or activity. The Plaintiffs
counter that the State Defendants retaliated against them for
seeking to enforce L.D.'s education rights by stonewalling the due
process hearing procedures.
Judge Hillman opines that the State Defendants characterize the
allegations of violation of Section 504 and the ADA as conclusory,
focusing on statements like the above-quoted allegations. The
Plaintiffs certainly could have pled their claims more artfully,
neatly tying together how the State Defendants' flawed procedures
constituted discrimination or some sort of disparate impact in
compact phraseology. But Judge Hillman Court reads the allegations
in the complaint as a whole and the allegations read in that light
tell a story of due process procedures so deficient that the
Plaintiffs were not able to place their child in the right
educational setting or seek relief without retaliation, a benefit
that non-disabled children were readily receiving. Thus, he will
not dismiss the claims based on Section 504 and the ADA.
F. Whether Federal Preemption Applies
The Plaintiffs assert a count for "federal preemption", contending
that there "is a direct conflict between the scheme under federal
IDEA law for resolving special education disputes and NJDOE's
system under the New Jersey Administrative Code for how New Jersey
handles special education disputes as discussed at length in
preceding allegations of this Complaint." The State Defendants
argue that the Plaintiffs' contention that the briefing schedule
for motions and the refusal by the State Defendants to enforce the
10 day Peremptory Hearing regulation both directly conflict with
the IDEA fails because neither conflicts with the IDEA. The State
Defendants argue that the IDEA cannot preempt state law on these
issues.
Judge Hillman finds that any conflicts between the State's
procedures as they relate to the IDEA will be more appropriately
resolved after discovery regarding those procedures as a whole, and
a fuller record is provided upon which the Court may opine on the
viability of Plaintiffs' federal preemption count.
III. Conclusion
For the reasons he expressed in the Opinion, Judge Hillman granted
in part and denied in part the State Defendants' motion to
dismiss.
An appropriate Order will be entered.
A full-text copy of the Court's March 22, 2022 Opinion is available
at https://tinyurl.com/2rrn4skz from Leagle.com.
ROBERT CRAIG THURSTON, THURSTON LAW OFFICES LLC, in CHERRY HILL,
NEW JERSEY, Counsel for the Plaintiffs.
KERRY SORANNO, STATE OF NEW JERSEY, OFFICE OF THE ATTORNEY GENERAL,
in TRENTON, NEW JERSEY, Counsel for the State Defendants.
JAY D. BRANDERBIT -- jbranderbit@kentmcbride.com -- KENT & McBRIDE,
P.C., in PHILADELPHIA, PENNSYLVANIA, Counsel for Vineland City
Board of Education.
VIRGINIA: Class Cert. Bid in Watson v. Correctional Center Denied
-----------------------------------------------------------------
In the case, KEVIN A. WATSON, Plaintiff v. B.L. KANODE, et al.,
Defendants, Civil Action No. 7:21-cv-00119 (W.D. Va.), Judge Thomas
T. Cullen of the U.S. District Court for the Western District of
Virginia, Roanoke Division, denied the Plaintiff's motion for
counsel and his motion for class certification.
In the action, pro se Plaintiff Watson asserts civil rights claims
against a correctional officials arising from his incarceration at
River North Correctional Center. After the Court gave him
permission to do so, Watson filed a second amended complaint, and
the Defendants' responses to it are not yet due. In the meantime,
Watson has filed a motion for appointment of counsel and a motion
for class certification, pending before the Court.
Judge Cullen explains that addressing Watson's request for counsel
first, the Court cannot require an attorney to represent an
indigent civil plaintiff. Instead, the Court may only request that
an attorney represent an indigent plaintiff when "exceptional
circumstances" exist. Exceptional circumstances depend on the type
and complexity of the case and the ability of the plaintiff to
present it. If those factors suggest to the court that a "pro se
litigant has a colorable claim but lacks the capacity to present
it, the district court should appoint counsel to assist him."
Mr. Watson points to four circumstances that he contends require
the appointment of counsel: (1) he is unable to afford counsel; (2)
he has a limited knowledge of the law; (3) the issues involved in
the case are "complex"; and (4) "most of the Plaintiffs" are
segregated inmates with extremely limited access to a law library
and are suffering from severe mental illness.
Judge Cullen concludes that none of these establish exceptional
circumstances warranting appointment of counsel. He says, the first
two -- indigency and a "limited knowledge of the law" -- exist in
the vast majority of civil cases brought by prisoners and are not
"exceptional." As to the third, he finds that the issues in the
case are fairly routine and not complex. In general terms, Watson's
second amended complaint contends that he should not have been
housed in the same pod with severely mentally ill offenders, and he
challenges various conditions of his confinement. As to his fourth
and final justification for the need for counsel, it is unclear
whether Watson is alleging that he (as opposed to "most of the
plaintiffs") has limited access to the law library. Regardless,
that circumstance, without more, does not entitle him to counsel.
For all of these reasons, Judge Cullen concludes that Watson's
circumstances are not exceptional so as to warrant appointment of
counsel at this time. He will deny his motion for counsel without
prejudice.
With regard to Watson's request for class certification, Judge
Cullen holds that a pro se plaintiff may not represent other
prisoners. Thus, Watson's request must be denied. If Watson finds
counsel willing to represent him and other inmates in a class
action, the counsel may enter an appearance in the case. But the
case currently consists only of his claims, not anyone else's, and
Judge Cullen concludes that Watson does not require court-appointed
counsel to continue to present his case. Moreover, Watson may not
bootstrap his request for counsel onto his request that the case be
a class action.
For the foregoing reasons, Judge Cullen denied Watson's motion for
counsel and his motion for class certification.
The Clerk will provide a copy of this order to Watson and to the
counsel for the Defendants.
A full-text copy of the Court's March 22, 2022 Order is available
at https://tinyurl.com/2p97uwbc from Leagle.com.
WEEZIE INC: Slade Files ADA Suit in S.D. New York
-------------------------------------------------
A class action lawsuit has been filed againsst Weezie Inc. The case
is styled as Linda Slade, individually and as the representative of
a class of similarly situated persons v. Weezie Inc., Case No.
1:22-cv-02530 (S.D.N.Y., March 29, 2022).
The lawsuit is brought over alleged violation of the Americans with
Disabilities Act.
Weezie -- https://weezietowels.com/ -- is modern luxury towels made
easy.[BN]
The Plaintiff is represented by:
Dan Shaked, Esq.
SHAKED LAW GROUP, P.C.
14 Harwood Court, Suite 415
Scarsdale, NY 10583
Phone: (917) 373-9128
Email: shakedlawgroup@gmail.com
WILLIAM SCURRY: Porter Class Cert. Bid Tossed w/o Prejudice
------------------------------------------------------------
In the class action lawsuit captioned as Kevin Porter, et al., v.
William Scurry, et al., Case No. 1:20-cv-01210-JL (D.N.H.), the
Hon. Judge Joseph N. Laplante entered an order denying without
prejudice the following motions:
-- The plaintiffs' motion for class certification;
-- Medical defendants' motion to dismiss;
-- Medical defendants' motion for joinder;
-- The plaintiffs' motion for appointment of any witness;
-- The plaintiffs' motion for a temporary restraining order;
and
-- The plaintiffs' motion to amend.
The court has granted plaintiffs' motion for pro bono appointment
of counsel. Because of that appointment, the pending motions in
this case are denied without prejudice to filing motions seeking
the same relief, as may be appropriate, the Court adds.
A copy of the Court's order dated March 16, 2022 is available from
PacerMonitor.com at https://bit.ly/3uV9lxF at no extra charge.[CC]
WORLD FINANCIAL: Partly Wins Judgment on Pleadings in Yeomans Suit
------------------------------------------------------------------
In the case, TRICIA YEOMANS, et al., Plaintiffs v. WORLD FINANCIAL
GROUP INSURANCE AGENCY, INC., et al., Defendants, Case No.
19-cv-00792-EMC (N.D. Cal.), Judge Edward M. Chen of the U.S.
District Court for the Northern District of California entered an
order:
a. granting the Defendants' motion for judgment on the
pleadings as to the Plaintiffs' request for injunctive
relief, but granting the Plaintiffs leave to amend this
request; and
b. denying the Defendants' motion for judgment on the
pleadings in all other respects.
I. Background
Pending before the Court is the Defendants' motions for judgment on
the pleadings as to the Plaintiffs' Ninth Cause of Action, for
failure to provide accurate itemized wage statements, and Eleventh
Cause of Action, for violation of California's Unfair Competition
Law.
Plaintiffs Tricia Yeomans, Ismail Chraibi, Adrian Rodriguez, Robert
Jenkins, Dorothy Jenkins, Cameron Bradford, and Fatemeh Abtahi
allege the following on behalf of themselves and a putative class
of others similarly situate. The Defendants represent themselves as
a financial -- and insurance-products marketing company; they
recruit individuals as "Associates" and purport to give people the
tools "to build and operate their own financial services business."
However, the Plaintiffs assert that the "Defendants conduct their
business by way of a massive pyramid scheme," wherein recruiting
new Associates is one of the "main factors involved in achieving
promotions." Once someone is an Associate, the Defendants pressure
that person to "purchase the Defendants' financial and insurance
products" and to "sell financial and insurance products to the new
Associates."
Central to the Plaintiffs' case is their allegation that the
"Defendants have unlawfully misclassified Associates as
'independent contractors' rather than as employees" to further
increase company profits. Specifically, each Associate is "required
to sign identical, nonnegotiable Associate Membership Agreements
('AMAs')," which "set forth uniform rules and policies promulgated
by Defendants, which subject Associates to strict control."
The Plaintiffs also contend that the "Defendants completely control
the overall operation of the business" and "retain the exclusive
authority to hire and fire every Associate." Furthermore, because
of this classification, Associates earn only commissions, not
minimum wage, and they bear the burden of business costs, which the
Defendants might otherwise bear. In addition, Associates are
improperly deprived of the protection of workers' compensation, the
benefits of overtime pay, and meal and rest breaks.
The Plaintiffs allege 13 causes of action arising from these facts.
Relevant to the currently pending motion, the Plaintiffs ninth
cause of action alleges violations of Cal. Lab. Code Section 226
for inadequate and/or failure to provide accurate, itemized wage
statements. The Plaintiffs allege that wage statements provided by
the Defendants do not show all wages earned, all hours worked, or
all applicable rates, in violation of the California Labor Code.
Additionally, the Plaintiff's eleventh cause of action alleges
violations of California's Unfair Competition Law ("UCL"), Cal.
Bus. & Prof. Code Sections 17200, et seq. To remedy the Plaintiffs'
UCL claim, they seek "full restitution of monies, as necessary and
according to proof, to restore any and all monies withheld,
acquired and/or converted by the Defendants by means of the unfair
practices complained of."
The Plaintiffs filed the case in San Francisco Superior Court in
December 2018. The Defendants removed the case to federal court in
February 2019. In June 2019, the Plaintiffs filed a first amended
class action complaint. Shortly after the FAC was filed, the
Defendants filed a motion to transfer the case to the U.S. District
Court for the Northern District of Georgia, which the Court denied
on Nov. 16, 2019. The Defendants filed a mandamus petition asking
the Ninth Circuit to transfer this case to the Northern District of
Georgia.
On June 18, 2020, the Defendants filed a motion to compel
arbitration, dismiss the class claims, and stay the case. The Court
denied the motion. Docket No. The Defendants appealed. On Nov. 17,
2021, the Ninth Circuit denied the Defendants' petition for
mandamus and affirmed the Court's denial of the Defendant's motion
to compel arbitration. The Ninth Circuit's mandate was issued on
Dec. 9, 2021.
Now pending is the Defendants' motion for judgment on the pleadings
as to the Plaintiff's ninth (wage statements) and eleventh (UCL)
causes of action.
II. Discussion
A. Wage Statement Claim (Count 9)
The Defendants do not contest that the Plaintiffs have adequately
alleged the first two elements of a claim under Section 226(e) --
knowing and intentional violations of Section 226(a). Instead, they
argue that the Court should dismiss the Plaintiffs' wage statement
claim, Count 9, because (1) the Plaintiffs have not alleged a
cognizable injury, and (2) because the wage statement claim is
derivative of other claims and seeks impermissible double
recovery.
Judge Chen finds that neither argument is persuasive. He holds that
dismissal of the Plaintiffs' wage statement claim is unwarranted.
First, the Plaintiffs have sufficiently plead cognizable injury
under Section 226. Thet alleged the Defendants failed to "provide
employees with accurate itemized wage statements showing gross
wages, total hours worked, all applicable hourly rates worked
during each pay period, the corresponding number of hours worked at
each hourly rate, and the beginning and end of all meal breaks
taken," and that employees "did not receive pay stubs that, among
other issues, recorded their rate of pay, the number of hours that
they worked, or broke out the total hours of compensable rest and
recovery periods." They, thus, have sufficiently alleged facts for
the Court to infer that they were actually injured because those
deficiencies indicate a "possibility of not being paid overtime,
employee confusion over whether they received all wages owed them,
and difficulty and expense involved in reconstructing pay records.
Second, the wage statement claim is not wholly derivative of the
wage. This is not a situation where the wage statement is
inaccurate solely because of the failure to account for (and pay),
e.g., overtime. In the case, there was no wage statement at all --
a violation that obtains irrespective of, e.g., failure to pay
overtime or minimum wage.
B. UCL Claim (Count 11)
The Defendants argue that the Court should dismiss the Plaintiff's
UCL claim, Count 11, because the Plaintiffs do not allege that they
lack an adequate remedy at law. Next, they argue that, if the
Plaintiff's UCL claim may proceed, they may not recover labor code
penalties for meal and rest break violations as restitution.
Finally, the Defendants contend that the Plaintiff cannot pursue
injunctive relief because they no longer contract with the
Defendants.
1. Pleading Remedies in the Alternative
The Defendants argue that the Ninth Circuit's decision in Sonner v.
Premier Nutrition Corp., 971 F.3d 834, 838 (9th Cir. 2020) requires
dismissal of the Plaintiffs' UCL claim because the Plaintiffs have
not alleged that they lack an adequate remedy at law to establish
that they are entitled to seek equitable remedies under the UCL.
The Court's analysis of the issue has evolved, too. Previously, the
Court held that a Plaintiff must sufficiently allege an inadequate
remedy at law to state a claim under the UCL and that failure to do
so at the pleading stage could warrant dismissal. But, in its most
recent examination of the issue in Nacarino v. Chobani, LLC, it
joined courts that have held that Sonner does not preclude
plaintiffs from pleading equitable remedies in the alternative.
Consistent with Nacarino, Jduge Chen concludes Sonner does not
preclude a plaintiff from pleading equitable remedies in the
alternative. Thus, the Plaintiffs' request for restitution under
the UCL as a remedy in the alternative to legal remedies under the
labor code is both sufficient and permissible at the pleading
stage. As in Nacarino, the "issue of the Plaintiffs' entitlement to
seek the equitable remedy of restitution may be revisited at a
later stage."
2. Wages or Penalties Under Section 226.7?
The Defendants contend the Plaintiffs cannot recover meal and rest
period premium pay under Section 226.7 as restitution under their
UCL claim. Section 226.7 of the California Labor Code provides that
an employer who fails to provide legally compliant meal and rest
breaks must pay the employee one addition hour of pay at the
employee's regular rate of compensation. Remedies under the UCL are
generally limited to restitution and injunctions. Restitution under
the UCL includes "earned wages."
Judge Chen denies the Defendants' request to dismiss UCL claim for
restitution as to pay under Section 226.7. He agrees with Judge
White's analysis in McGhee v. Tesoro Ref. & Mktg. Co. LLC that
violations of Section 226.7 are recoverable under the UCL, and
rejects Defendants' arguments. Section 226.7 pay is recoverable as
restitution because it is the property of the employee who has
given his or her labor by working without breaks.
3. Injunctive Relief
The Defendants argue that the Plaintiffs, as former employees, lack
standing to pursue prospective injunctive relief against their
former employers in the absence of allegations demonstrating an
ongoing relationship or that they would benefit from the injunctive
relief. The Plaintiffs do not dispute that the FAC, as plead, lacks
sufficient allegations to provide a basis for their requests for
injunctive relief. Instead, theys argue that the additional details
they alleged in their ex parte application for Temporary
Restraining Order, including facts demonstrating a continuing
personal need for prospective relief in light of the Defendants'
actions to enforce and collect debts against the Plaintiffs
stemming from the Plaintiffs' time employed with the Defendants,
would cure any deficiencies. The Plaintiffs acknowledge that the
details in their TRO application are not currently plead in the
FAC, and seek leave to amend.
Thus, Judge Chen grants the Defendants' motion to dismiss the
Plaintiffs' requests for injunctive relief but, in light of Fed. R.
Civ. P. 15(a) liberal policy favoring amendment, also grants the
Plaintiffs leave to amend to allege facts that might support some
form of injunctive relief.
III. Conclusion
Judge Chen grants the Defendants' motion for judgment on the
pleadings as to the Plaintiffs' request for injunctive relief, but
grants the Plaintiffs leave to amend this request. He denies the
Defendants' motion for judgment on the pleadings in all other
respects. The Plaintiffs have 30 days from entry of the Order to
file an amended complaint.
The Order disposes of Docket No. 119.
A full-text copy of the Court's March 22, 2022 Order is available
at https://tinyurl.com/b97d9uyp from Leagle.com.
ZUM SF: Tucker Files Suit in Cal. Super. Ct.
--------------------------------------------
A class action lawsuit has been filed against Zum SF, Inc., et al.
The case is styled as Spynsir Tucker, for herself, all other
similarly-, situated individuals and the general public v. Zum SF,
Inc., Zum Services, Inc., Abishek Garg, Vivek Garg, Ritu Narayan,
Case No. CGC22598935 (Cal. Super. Ct., San Francisco Cty., March
29, 2022).
The case type is stated as "Other Non-Exempt Complaints."
Zum -- https://www.ridezum.com/ -- is the industry leader in
student transportation for school districts.[BN]
The Plaintiff is represented by:
Joshua D. Buck, Esq.
THIERMAN BUCK LLP
7287 Lakeside Dr.
Reno, NV 89511
Phone: 775-284-1500
Fax: 775-284-1506
Email: josh@thiermanbuck.com
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