Class Actions Brief Blog

On January 24, 2025, the United States Supreme Court agreed to answer a question that has divided the circuits: Can a federal court certify a class containing members who lack any Article III injury? In Davis v. Laboratory Corporation of America Holdings, a trial court in California certified a damages and injunctive relief class comprised of blind patients who—unliked sighted individuals—could not use LabCorp’s kiosks to access testing services. It did not matter to the trial court or to the Ninth Circuit that the class members had the option to bypass LabCorp’s kiosks ...

It is no secret that many businesses minimize risk by requiring arbitration of disputes on an individual basis. The exposure created by a single claim pales next to that presented by a class claim, asserted under Rule 23, on behalf of numerous individuals. To implement this mitigation strategy, businesses typically include in their agreements an arbitration provision, coupled with a waiver of the right to bring a class or collective action.

The United States Supreme Court has generally validated this approach. Even when the cost of asserting an individual statutory claim far ...

There is no shortage of consumer class actions these days, but most of these cases are settled or dismissed. If trials are rare, trials of class actions are rarer, if only because of the stakes.   

In 2017, Dish Network tried its luck with a jury in the Middle District of North Carolina regarding claims that it made over 50,000 telephone solicitations to 18,000 residential phone numbers on the Do-Not-Call list in violation of the Telephone Consumer Protection Act. Dish lost and the Court trebled the jury award of $400 per call, resulting in $61,342,800 in total damages with $20.4 million in ...

Last year in this space, we reported on the continuing debate concerning the use of cy pres awards in class action settlements.  Since 2013, Chief Justice Roberts has provided cautionary comments about this practice.  See Marek v. Lane, 134 S. Ct. 8 (2013).  We also reported on the Ninth Circuit’s approval of a cy pres settlement in In Re Google Referrer Header Privacy Litigat., 869 F.3d 737 (9th Cir. 2017), which awarded plaintiffs’ counsel $3.5 million and six nonprofits/educational institutions another $5.3 million, all while awarding class members the proverbial goose egg.

We’ve commented before in this space about the ongoing debate concerning the relationship between the predominance requirement of Rule 23(b)(3) and “issue certification” under Rule 23(c)(4). Yesterday, the Sixth Circuit weighed in on the subject. See Martin v. Behr Dayton Thermal Prods., No. 17-3663 (6th Cir. July 16, 2018). The case related to a “Superfund site” comprising a “low income area” of some 540 proprieties outside of Dayton, Ohio. Typical of the languid track of most class action actions, the Sixth Circuit addressed the district court’s decision on an ...

Yesterday, the United States Supreme Court, in a 5-4 opinion, held that an employer and its employees may agree to arbitrate claims on an individual, not a class-wide basis. Epic Systems Corp. v Lewis, No. 16-285 (U.S. May 21, 2018). Writing for the majority, Justice Gorsuch rejects the National Labor Relations Board’s view – in opposition to “77 years of precedent” – that the National Labor Relations Act “effectively nullifies the Arbitration Act.” The majority rendered its opinion against the backdrop of “battling briefs about the law’s meaning” from the ...

Loyal readers may notice that Carolinas Class Action received a facelift and has been renamed Class Actions Brief. Given our experience with class actions across the country, we want to broaden the scope in order to report on cases outside the Carolinas. We hope you find this expansion both interesting and informative, and we welcome your feedback.

Thank you for reading,
Adam Doerr and David Wright
Editors

Not every class action court filing in North and South Carolina becomes a full-length post on our blog. Here is a recap of February filings:

Burrell, et al. v. Gustech Commc’ns, LLC, No. 0:18-cv-00508 (D.S.C. February 21, 2018) (purported collective and class action brought under federal and state wage and hour laws alleging defendant misclassified satellite technicians as independent contractors and failed to pay overtime and minimum wages)

In re: Broiler Chicken Grower Litigation, No. 4:18-cv-00030 (E.D.N.C. February 21, 2018) (putative class action brought by broiler ...

The United States Supreme Court, in a 5-3 decision authored by Justice Alito, reversed a Ninth Circuit case concluding that detained aliens have a statutory right to periodic bond hearings during the course of their extended detention.  See Jennings v. Rodriguez,  ____ U.S. ____, No. 15-1204 (U.S. Feb. 27, 2018).  The Court found that the Ninth Circuit’s statutory interpretation in favor of detained noncitizens was “implausible.”  In pedagogical fashion, Justice Alito explained that the Ninth Circuit had turned the doctrine of “constitutional avoidance” on its ...

Not every class action court filing in North and South Carolina becomes a full-length post on our blog. Here is a recap of January filings:

Sciabacucchi v. Snyder’s-Lance, Inc., et al., No. 3:18-cv-00049 (W.D.N.C. January 29, 2018) (previously reported similar action as Shaev Profit Sharing Account v. Snyder’s-Lance, Inc., et al., No. 3:18-cv-00039 (W.D.N.C. January 25, 2018) wherein shareholders allege financial harm from issuance of a false proxy statement for a proposed merger transaction between Snyder’s-Lance and Campbell Soup Company)

Shaev Profit Sharing ...

A good while ago, we reported in this space, about so-called “cy pres” settlements. We highlighted the Chief Justice’s cautionary comments about this practice – under which third parties, not class members, are compensated by defendants. See Marek v. Lane, 134 S.Ct. 8 (2013). After the Ninth Circuit recently approved a cy pres settlement, In Re Google Referrer Header Privacy Litigat., 869 F.3d 737 (9th Cir. 2017), which awarded plaintiffs’ counsel $3.5 million, and six nonprofits/educational institutions another $5.3 million – all while awarding class members the ...

According to the Company website, “Piggly Wiggly has been bringing home the bacon for millions of American families for over 100 years.” But a putative class of former employees of Piggly Wiggly filed a class action complaint in the District of South Carolina, asserting various claims under ERISA pertaining to the Company’s employee stock ownership plan. The claims include allegations pertaining to excessive compensation, “gross mismanagement,” concealing of financial losses from participants, and various “insider dealings.” Spires v. Schools, No. 2:16-616 ...

We don’t often get appellate guidance after a federal trial judge remands a case to state court following removal because 28 U.S.C. Sect. 1447(d) generally makes such a ruling unreviewable. But the Class Action Fairness Act (“CAFA”), 28 U.S.C. Sect. 1332(d), permits a court of appeals to accept an appeal of a remand from a class action. The Fourth Circuit exercised this right in Scott v. Cricket Communications, LLC, No. 16-2300 (4th Cir. July 28, 2017), in order to provide some guidance about the quantum and quality of proof required to prove the amount in controversy under ...

Earlier this year, we hazarded a guess that the Supreme Court was split 4-4 regarding a Ninth Circuit decision holding that a named plaintiff could achieve appellate review of a decision denying class certification by voluntarily dismissing his individual claims. It turns out, based upon the Supreme Court’s decision in Microsoft Corp. v. Baker [], that the internal debate was not so much over whether the Ninth Circuit erred in allowing the appeal, but whether that error had both statutory and constitutional implications. The Supreme Court had accepted certiorari to review ...

The Private Securities Litigation Reform Act (“PSLRA”) establishes special rules in securities class actions. One such rule, found in 15 U.S.C. Sect. 78u-4(a)(3)(B)(vi) and known as the “Five-in-Three Provision,” prevents a “person” from serving as a lead plaintiff in “more than 5 securities class actions” during any three-year period. Does that rule, though, apply to institutional investors? The plain words of the statute certainly suggest so—it is difficult to argue that an institutional investor is not a “person,” and had Congress wanted to ...

Class actions don’t work if the class representative has a conflict with the class he or she purportedly represents. As the United States Supreme Court noted over 70 years ago, “a selection of representatives for purposes of litigation, whose substantial interests are not necessarily or even probably the same as those whom they are deemed to represent, does not afford that protection to absent parties which due process requires.” Hansberry v. Lee, 311 U.S. 32, 45 (1940). A decision this week from Judge Higginson out of the Fifth Circuit provides an interesting commentary on ...

Occasionally, we see something outside of the Carolinas that is quirky enough to merit a mention in this space.  Such is the Seventh Circuit’s recent decision in Mulvania v. Sheriff of Rock Island County, No. 16-1711 (7^th Cir. Mar. 9, 2017).  According to Wikipedia, “In 2015 Rock Island (Illinois) was ranked the 32nd ‘Best Small City’ in the country.”  Not influencing those rankings, apparently, was the policy of the Rock Island County Jail, which “requires female detainees to wear either white underwear or no underwear at all.”  What, you ask, might be the “compelling ...

Largely following party lines, the House of Representatives on March 9, 2017, passed H.R. 985: Fairness in Class Action Act of 2017, which we highlighted in this space. One central feature of this bill, which we noted, is an appeal as of right of class certification decisions. This provision represents a radical departure from current practice, in which discretionary appeals are infrequently granted to the U.S. Courts of Appeal. A study done several years ago, which looked at seven years of filings, concluded that less than one quarter of such appeals are granted.

As we have ...

In this space, we concentrate on class action decisions in the Carolinas, as well as Fourth Circuit and United States Supreme Court precedent. Occasionally, though, we venture beyond these jurisdictions to highlight issues of particular note, including those where courts are divided. We’ve previously reported here how offers of judgment interact with mootness. In Campbell-Ewald Co. v. Gomez, the United States Supreme Court held that an unaccepted settlement offer, even if it offers all relief sought in the case, does not render a case moot when the affected party seeks relief ...

Last week, we observed that the Supreme Court appeared to be waiting for a ninth justice to decide in an important case involving appealability of class action certification decisions. A news report today* indicates that the Supreme Court has also pushed out arguments concerning the enforceability of class action waivers. As we recently reported in this space, the Court had agreed in three cases to decide whether the NLRA prohibits employers from requiring non-management employees covered by the NLRA to arbitrate their work-related claims individually. For employers ...

About a year ago, the United States Supreme Court granted Microsoft’s petition to review this question: “Whether a federal court of appeals has jurisdiction under both Article III and 28 U.S.C. Section 1291 to review an order denying class certification after the named plaintiffs voluntarily dismiss their individual claims with prejudice.” Briefing in the case was completed last June, but the case has yet to appear in the calendar of the fourth sitting of the Supreme Court’s term, which began January 9, 2017. Although the reasons for the delay aren’t pellucid, this is an ...

We have previously commented about “disclosure only” settlements in class action merger cases, and the increasing scrutiny provided to them by courts here and in Delaware. Judge Bledsoe entered the fray yesterday, approving a settlement of litigation involving the merger of Yadkin Financial Corporation and NewBridge Bancorp in a 44-page order. In a stark preamble to his findings, Judge Bledsoe gave warning that the Business Court would likely be joining their brethren in Delaware in strictly reviewing such settlements in the future. The Court characterized such a shift as a ...

Failure to give the requisite 60-days’ notice to a group of employees under the WARN Act seems like it implicates a quintessential common question for adjudication under Rule 23. But in Hutson v. CAH Acquisition Company 10, LLC, 1:15CV742 (M.D.N.C. Aug. 15, 2016), Defendant gamely tried to suggest that there were factual issues that must be resolved as to each plaintiff. Admittedly, the case was a bit more complicated than the typical WARN Act case – the closing of the employer’s facility was postponed, and there apparently was confusion about just what the employer explained to ...

In February 2014, the Panel on Multidistrict Litigation transferred a series of cases against Pella Corporation, a window manufacturer, to the District of South Carolina. Judge Norton dismissed most of the claims, but preserved claims alleging breach of express warranty with respect to Pella’s failure to repair or replace windows under its limited warranty. The windows, so plaintiffs alleged, leaked, and the plaintiffs sought certification of a class consisting of owners of structures in New York from 1997 through 2007 who had made a claim under Pella’s Limited Warranty. The ...

Characterizing an unpublished 2007 decision to the contrary as a “thin reed” displaced by later Supreme Court guidance, the Fourth Circuit held that the question of whether an arbitration agreement permits class proceedings is a “gateway” issue for the court, and not a procedural question left to the arbitrator to decide. Del Webb Communities Inc. v. Carlson, No. 15-1385 (4th Cir. March 28, 2016). The case was filed after a builder – facing numerous construction defect claims and an arbitrator’s decision whether to certify those claims as a class proceeding – filed a ...

Yesterday, the Supreme Court issued its opinion in Tyson Foods, Inc. v. Bouaphakeo, voting 6 – 2 to uphold a jury verdict in favor of employees in a donning and doffing action. The class of employees, certified under Iowa Wage and Hour law pursuant to Rule 23, and as a collective action under the Fair Labor Standards Act, worked in the kill, cut and retrim departments of a pork processing plant. They were required to use protective gear and complained that they weren’t paid for the time spent to put on and take off the necessary protection equipment. Because Tyson didn’t keep records ...

When two public companies announce an intention to merge, class litigation follows like the night the day. These complaints usually request some sort of preliminary injunctive relief which, if successful, can derail the merger. Rarely, however, do plaintiffs press for this relief. Instead, they opt to resolve the claims, which requires court approval under Rule 23. The resolution can involve the payment of money to shareholders, but many times it does not and instead takes the form of “programmatic relief,” consisting principally of additional disclosures to the class ...

It is one thing for a federal trial court to decide, based on precedent and Rule 23, whether a class of individuals can be allowed – consistent with the principles of due process – to assert claims against a defendant.  But it is another – entirely – to contemplate an arbitrator making those decisions:  “class arbitration” can send chills down the spine of even the most seasoned defense lawyer. In NCR Corp. v. Jones, No. 3:15-cv-444 (Jan. 5, 2016), Judge Cogburn had to decide whether the parties’ arbitration agreement – which was silent on the subject – permitted class ...

Since the Supreme Court’s decision in Wal-Mart, courts have been struggling to breathe life into Rule 23(b)(2) when monetary damages are a possibility. Wal-Mart held that back pay constituted the kind of individualized monetary relief that was hardly “incidental” to claims of injunctive relief, upon which (b)(2) classes are essentially founded. In Berry v. LexisNexis Risk and Information Analytics Group Inc., No. 14-2006 (4th Cir. Dec. 4, 2015), the Fourth Circuit grappled with this issue, albeit in the context of a nonmonetary (b)(2) settlement that, by its terms, continued to allow class members to pursue certain claims for monetary relief.

We have reported recently in this space on the certification of state wage and hour claims. Judge Gergel recently continued with this trend, certifying a class of Jamaican workers at the Kiawah Island Golf Resort who contend they weren’t paid enough by the Resort. See Moodie v. Kiawah Island Inn Co. LLC, No. 2:15-cv-1097 (D.S.C. Aug. 24, 2015). Defendants argued that the differences in class members were such that the court would have to certify six classes, but the Court rejected that notion, saying the argument stemmed from a “novel proposition that Plaintiffs must propose [a ...

In an “opt out” class action, sending notice to class members following class certification is not only routine, but required by due process. But does a district court have the right to order notice prior to a decision on class certification? In Gardener v. GMAC, Inc., No. 14-208 (4th Cir. Aug. 6, 2015), both the district court and the Fourth Circuit “assumed for the sake of argument” that Rule 23(d)(1)(B) provides the trial court with that authority. But each declined to accept the plaintiffs' argument that the facts warranted such notice. Observing that pre-certification ...

We previously reported on Judge Cogburn’s decision to certify a class in an employee misclassification case, Rehberg v. Flowers Baking Co of Jamestown, LLC, No. 3:12-cv-596 (W.D.N.C. March 23, 2015). In May, the Fourth Circuit denied Defendants’ Rule 23(f) appeal, and so the case is proceeding in the district court. The class members have distributorship agreements with the Defendants that condition payments (in the event of any sale, conveyance or assignment) upon execution of a release. Class counsel apparently became irritated with the effect of these releases (and the ...

Yesterday, the United States Supreme Court granted Tyson Foods’ petition for certiorari to review the Eighth Circuit’s opinion upholding class certification in a donning and doffing case. A class of Tyson employees brought the suit seeking compensation for time they spent putting on (donning) or removing (doffing) protective equipment and clothing. The decision promises to be most important clarification yet of the scope of the Supreme Court’s Wal-Mart Stores, Inc. v. Dukes decision. The two questions presented for certiorari were: (1) whether differences in ...

The Fourth Circuit today handed down its second decision in Brown v. Nucor, a split decision from 2009. In the initial decision, over Judge Agee’s dissent, the panel majority had reversed the district court’s denial of class certification. On remand, the district court decided to revisit the certification decision in light of Wal-Mart v. Dukes, and decertified a class consisting of individuals who had not been promoted to supervisory positions. In a 154-page opinion, a split panel again reversed. Judge Gregory again wrote the majority decision, joined by Judge Keenan. Judge ...

We all know that an employer’s decision to label certain individuals as “independent contractors” is not dispositive of the legal issue whether they are, in actuality, “employees.” And that issue is complicated further because the definition of “employee” varies from statute to statute. But courts have struggled in deciding whether employment status in a misclassification case can be decided on a class-wide basis. On the one hand, the legal issue is the same: are these folks employees or aren’t they? But, as Justice Scalia cautioned in Wal-Mart, merely stating ...

On March 3, 2015, Judge Michael O’Foghludha, a Rule 2.1 judge appointed to hear the controversy, granted a motion to certify a class of state magistrates serving between 2009 and 2014. Adams v. State, No. 14-CVS-15027 (Wake Cnty. N.C. Super. Ct. Mar. 3, 2015). The principal common issues appear to be whether a statutory “step increase” in pay became a part of the individual employment contracts of the magistrates and whether the State could suspend these step increases without incurring liability. The certification order affects approximately 650 magistrates.

In its ...

Although Rule 23(a) provides that members of a class may “sue or be sued,” a defendant class is quite the rarity. But the court-appointed receiver of Rex Venture Group LLC d/b/a www.ZeekRewards.com was successful in persuading Judge Mullen to certify a defendant class comprised of “Net Winners” in a Ponzi scheme in which over 700,000 participants lost over $700 million. See Bell v. Disner, No. 3:14-cv-91 (W.D.N.C. Feb. 10, 2015). Over $238 million in net winnings, according to the receiver, were obtained by 9,400 individuals from the net losers’ money. Judge Mullen found ...

The North Carolina Business Court has seemed to settle upon a methodology in approving “disclosure only” settlements in merger cases. Following Judge Gale’s decision in In re Harris Teeter Merger Litigation, Judge Bledsoe certified a non-opt-out settlement class last week in In re PokerTek Merger Litigation, No. 14-CVS-105679 (Jan. 22, 2015), observing that such classes have become the norm both in Business Court and in Delaware. The key to such certification, as Judge Bledsoe observed, was that the case involve predominantly “equitable claims,” rather than claims ...

As we discussed last year, a bona fide circuit split exists with respect to “issue certification.” We observed that the Fourth Circuit’s guidance on this issue is foggy: As Judge Dever has noted, “although the Fourth Circuit appears to address this issue in Gunnells v. Healthplan Services Inc., 348 F.3d 417 (4th Cir. 2003), its analysis is unclear.”

In his recent order denying class certification in Parker v. Asbestos Processing LLC, No. 0:11-cv-01800 (D.S.C. Jan. 8, 2015), Judge Joseph F. Anderson joined the fray, providing an interesting twist on the subject and the ...

Just before the holidays, Judge Norton considered the thorny issue of “cross-jurisdictional class action tolling” in a multidistrict litigation case involving allegedly defective windows. See Schwartz v. Pella Corp., No. 2:14-mn-00001, 2:14-cv-00556 (D.S.C. Dec. 18, 2014). As the name suggests, cross-jurisdictional class action tolling is an equitable doctrine that tolls the statute of limitations during the pendency of a class action in a different court. The principle of class action tolling was introduced forty years ago in American Pipe & Constr. Co. v. Utah, 414 ...

The North Carolina Business Court today rebuffed an attempt by “self-pay” patients receiving emergency treatment to challenge the hospital’s charges on a class-wide basis. In Hefner et al. v. Mission Hospital Inc., et al., No. 12-CVS-3088 (N.C. Business Court Dec. 8, 2014), Judge Gale found that there “is a panoply of potential issues factoring into the ultimate questions of reasonableness [of patient charges] because every patient treated at Mission received different services and was billed for different amounts.” A key consideration in deciding whether to ...

In a previous post, we reported on Judge Jolly’s certification of a class of tobacco farmers suing a tobacco marketing cooperative in a Rule 2.1 case. The defendants have since appealed Judge Jolly’s decision to the North Carolina Court of Appeals.

On October 10, the North Carolina Supreme Court took the unusual step of certifying the case for review decision by the Court of Appeals. In fact, the case was not even fully briefed in the Court of Appeals. The case was part of a group of civil cases that the Supreme Court took from the Court of Appeals, as reported by the Raleigh News & ...

A recurrent question under Rule 23 is whether and when individual issues pertaining to damages can engulf otherwise common questions and make class litigation unwieldy. The dilemma is clear: On the one hand, doesn’t it make sense to try the common liability issue once rather than over and over again? On the other hand, trying a bunch of individual damages issues, that differ from plaintiff to plaintiff, doesn’t sound either like class litigation or a model of efficiency. The United States Supreme Court, in Comcast Corp. v. Behrend, has emphasized that lack of commonality in ...

In a decision filed today, the North Carolina Court of Appeals held that the trial court did not abuse its discretion in declining to certify a class of Currituck County property owners upset about an easement affecting their coastal property. After observing that denial of class certification affects a substantial right, the Court upheld the trial court’s findings that the Parker’s Landing Property Owners’ Association Inc. (“POA”), the putative class representative, had a conflict with the members of the class and had not shown that “it would be impractical to join ...

It is often expedient for a defendant to make an offer of judgment in order to avoid the expense of lengthy proceedings, particularly when the plaintiff’s damages claim is small. But what happens when the offer of judgment is made to a class representative? Does that mean that the individual no longer has standing? And does it make any difference if the offer is made before or after the class certification motion is filed? Judge Currie grappled with these issues last week in a Fair Debt Collection Practices Act case, Chatham v. GC Services, LP, No. 3:14-cv-00526 (D.S.C. July 16, 2014)

Early in May, we reported on the Supreme Court’s review of the Basic v. Levinson presumption of reliance in securities fraud cases. In an opinion today by Justice Roberts, the Court declined the invitation to overrule Basic's presumption of reliance in an efficiently traded market. Three justices (Thomas, Scalia and Alito) were prepared to overrule Basic. The majority held that there was no “special justification” to overrule Basic, noting the absence of “the kind of fundamental shift in economic theory that could justify overruling a precedent on the ground that it ...

The aphorism “If at first you don’t succeed . . .” has special significance in class litigation.  Rule 23(c)(1)(C) expressly provides that an order granting or denying class certification “may be altered or amended before final judgment,” and the Fourth Circuit has made it clear that the district court must decertify a class if “it becomes apparent, at any time during the pendency of the proceeding that class treatment of the action is inappropriate.” Stott v. Haworth, 916 F.2d 134, 139 (4th Cir. 1990).  But Judge Childs declined to decertify a class of plaintiffs who ...

It is difficult to understate the effect on class actions of Basic Inc. v. Levinson, 485 U.S. 224 (1988), which the Supreme Court decided in 1988. It is virtually impossible to demonstrate “reliance” – a key element of most securities’ fraud claims – on a class-wide basis. Indeed, if reliance is a part of the substantive proof required for the class claims, that usually presents a ticket for dismissal of those claims and a denial of class certification. But in Basic, the Supreme Court bridged that gap, reasoning that the stock market was “efficient,” and therefore would ...

The so-called “Northern Beltway” around Winston-Salem – in part from litigation efforts and in part from lack of funding – has never really gotten off the ground. But property owners whose land and homes are affected by the future project complained that the State’s actions in putting them on the map for the roadway constitute a “taking” under inverse condemnation principles. And they brought a multi-count class action challenging the DOT’s actions. The trial court denied class certification, and a unanimous Court of Appeals affirmed in Beroth Oil Company v. NC ...

Family Dollar, a national discount store retailer based in Charlotte, was sued by a putative class of female store managers alleging gender discrimination in pay in the Western District of North Carolina. In January 2012, Judge Cogburn dismissed the class claims, holding that they weren’t viable under Dukes v. Wal-Mart Stores Inc., 131 S. Ct. 2541 (2011). His ruling was consistent with plaintiffs’ own declaration earlier in the case: they said their claims were “virtually identical” to those in the Wal-Mart case after the Ninth Circuit’s favorable decision (but before ...

In Mississippi ex rel. Hood v. AU Optronics Corp., 134 S. Ct. 736 (Jan. 14, 2014), the United States Supreme Court held that one plaintiff does not a “mass action” make under the Class Action Fairness Act (CAFA). CAFA defines a “mass action” as a claim brought by more than 100 people, and the Court sided with the State of Mississippi, which had sued in Mississippi state court firms that sold LCD panels, alleging price fixing. The defendants preferred a federal forum in which to oppose the Mississippi Attorney General’s claims and removed the case to federal court, alleging that ...