Class Actions Brief Blog

As class action litigation under ERISA continues its upward trend across the country, could Article III standing serve as a means through which a Court can fairly assess claims before costly discovery is imposed on defendants and judicial resources are expended? Several recent federal court decisions suggest as much.

ERISA, which provides protection to employees who participate in employee benefit plans, confers statutory standing on plan participants and beneficiaries to seek relief against their benefit plans as well as fiduciaries of these plans in federal court. Although ...

This post concerns a recurring topic in class-action practice: how a party—through its own litigation conduct—can waive its right to arbitrate.

The topic warrants attention, or at least came to our attention, because of a recent decision from a federal appellate court. The case, called Morgan v. Sundance, Inc., is a putative nationwide collective action filed under the Fair Labor Standards Act.

The defendant (Sundance) owns Taco Bell franchises in multiple states. The plaintiff (Robyn Morgan) worked at a Sundance restaurant in Iowa. She has accused Sundance of not paying her ...

Those who follow class action law probably will be familiar with In re Trulia (2016), the seminal decision of the Delaware Court of Chancery that put the brakes on disclosure-only settlements.  Before Trulia, these controversial settlements were ubiquitous in deal litigation, in which shareholders of a company file a class action lawsuit seeking to stop the company from engaging in a merger or acquisition on the ground the company failed to disclose sufficient information about the transaction.  Under a typical disclosure-only settlement, the company agrees to supplement its ...

In this post we talk about two of our favorite things (relatively speaking): class actions and mootness.  We last looked at these issues when covering the U.S. Supreme Court’s decision in Campbell-Ewald Company v. Gomez, 136 S. Ct. 663 (2016).  There, the Court rejected the defendant’s attempt to “pick off” the named plaintiff in a class action case.  The defendant had made a Rule 68 offer to settle the case for the full value of the plaintiff’s claim.  The plaintiff declined, but the defendant argued that its offer nonetheless mooted the claim.  The Supreme Court rejected that ...

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 ...

Last month, we previewed the challenge to a settlement of litigation involving the Reynolds-Lorillard merger. The Business Court has helpfully made available the transcript of the hearing on approval of the settlement, which took place on February 12. At the hearing, the Court made clear that it was quite familiar with recent changes in merger litigation in Delaware, including the Trulia case, and stated that it was reviewing the settlement under “strict scrutiny,” not a “rubber stamp standard.” Notwithstanding a shareholder objection supported by Professor Sean ...

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 ...

Can a class action settlement agreement contain a fee-shifting provision that provides for a payment of attorneys’ fees? In a question of first impression, the North Carolina Court of Appeals said yes, subject to a trial court’s approval of the settlement at a fairness hearing.

In the long-running Ehrenhaus v. Baker case, the Plaintiff brought a class action challenging the merger of Wells Fargo and Wachovia. The parties ultimately entered into a settlement agreement that also provided for a payment of attorneys’ fees to Plaintiff’s counsel. The trial court approved the ...

In two recent studies of shareholder class actions over corporate mergers, the authors reached conclusions consistent with our experience with such cases in North Carolina: that nearly every acquisition of a public company results in shareholder litigation. The Cornerstone Research report found that 93% of public company acquisitions were challenged. Takeover Litigation in 2014, a separate study by Matthew Cain of the SEC and Steven Solomon of UC Berkeley, found that 94.9 of deals were challenged. (The two studies used slightly different cutoffs for their samples.)

Both ...

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 ...

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 ...