When a class action is filed, defendants often wonder whether tendering a payment to a class representative can defeat the claims. In a recent decision, the Third Circuit held that a mid-litigation payment to a class representative plaintiff does not moot her claim if the check is not cashed. Duncan v. Governor of the Virgin Islands, — F.4th —-, 2022 WL 3906213 (3d Cir. Aug. 31, 2022). But tendering the payment, even if the check is uncashed and even if the plaintiff claims the payment does not cover the full value of her claim, did make the plaintiff an atypical class representative and provided a basis to defeat certification of a damages class.
No Pay, No Problem: New York Federal Court Compels Arbitration Despite Prior Unrelated Failure to Pay Arbitration Fees
A court in the Southern District of New York recently compelled arbitration in the putative class action Skillern et al v. Peloton Interactive, Inc. (No. 1:21-cv-06808), concluding that the defendant did not waive its ability to seek arbitration by defaulting in a prior unrelated arbitration proceeding. The judge differentiated between this case and a series of other decisions where a movant had failed to pay arbitration fees in an earlier arbitration proceeding involving the same parties. This case is another helpful precedent strongly favoring arbitration as an alternative dispute resolution process in lieu of class actions.
Ninth Circuit Panel To Reconsider Whether FAA Preempts California Labor Law
We previously wrote about Chamber of Commerce v. Bonta, 13 F.4th 766 (9th Cir. 2021), in which a split panel of the Ninth Circuit held that the Federal Arbitration Act does not preempt a California Labor Code provision prohibiting employers from requiring applicants or employees “to waive any right, forum, or procedure” for
Individualized Damages Issues Preclude Class Certification in Eleventh Circuit
On the heels of the Ninth Circuit’s recent decision in Bowerman—which held that questions concerning the “existence of damages” for each class member can prevent certification—the Eleventh Circuit became the latest in a growing number of courts to conclude that class certification should be denied when plaintiffs cannot prove that each individual class member actually suffered damages.
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Court Rejects Plaintiffs’ Post-Trial Bid For $140 Million In Statutory Damages Under New York False Advertising Laws
After prevailing in a class action trial regarding allegedly false advertising, plaintiffs sought $91 million in statutory damages under New York’s General Business Law (GBL), plus $49 million in prejudgment interest. In an opinion that will likely serve as an important precedent for future GBL cases – and could influence how aggressively plaintiffs pursue them – a court in the Northern District of California rejected plaintiffs’ request, and instead awarded $8.3 million in statutory damages, plus interest. Montera v. Premier Nutrition Corp., 2022 WL 3348573 (N.D. Cal. Aug. 12, 2022). The plaintiffs’ requested award, the court held, was “so severe and oppressive as to be wholly disproportioned to the offense and obviously unreasonable.”
Ninth Circuit Gives Teeth To Predominance in Voiding a Misclassification Suit Win
A recent Ninth Circuit decision continues to emphasize how, post-Comcast, defendants should look for ways to characterize individualized issues as questions of liability, not questions of damages.
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Plaintiffs Seek $140 Million In Statutory Damages After Trial Win
A rare class action trial that resulted in a jury verdict against a defendant may set a precedent for the amount of statutory damages that can be recovered under New York’s General Business Law (GBL) when a class action proceeds to trial. After a jury found that Joint Juice deceptively labeled its beverages and awarded actual damages to the class, the plaintiffs moved for $140 million in statutory damages.
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A Closer Look: Arbitration Clauses Added to Account Agreements Face Risks After Supreme Court Declines Review of Sixth Circuit’s BB&T Decision
The Supreme Court recently declined to review the Sixth Circuit’s decision in Sevier County Schools Federal Credit Union v. Branch Banking & Trust Co., 990 F.3d 470 (6th Cir. 2021), which presents a potential challenge to enforcing arbitration clauses added to standard account agreements. The cert denial serves as a reminder that companies introducing arbitration agreements should take care to follow all contractual change-of-term requirements and create a record of affirmative customer assent whenever possible.
Bank Partnership Attacked (Again) Under True Lender Theory
A bank partnership is the target of yet another “true lender” attack in a new class action filed last week. Michael v. Opportunity Fin., LLC, No. 1:22-cv-00529 (W.D. Tex. June 1, 2022). The lawsuit is aimed at the lending partnership between OppFi (a fintech) and FinWise Bank (its bank partner), which was also the target of a recent investigation by California’s banking regulator and another class action earlier this year. This latest development cements a growing trend of true lender attacks after Congress repealed a regulation on the topic last year, dashing hopes of a uniform and predictable standard to identify the “true lender” in bank partnerships.
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Supreme Court Decision Makes It Easier to Waive Right to Arbitration
On May 23, 2022, the Supreme Court unanimously held that a party opposing arbitration is not required to demonstrate prejudice to show that the other party has waived its contractual arbitration rights.
Before today’s decision, nine federal courts of appeals had adopted the rule that a “party can waive its arbitration right by litigating only when its conduct has prejudiced the other side.” Morgan v. Sundance, 596 U.S. __ (2022). Two other circuits had held no showing of prejudice was required.
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