The Fifth Circuit reversed a class certification order for claims under the Fair Debt Collection Practices Act (“FDCPA”) because the plaintiff lacked Article III standing. Perez v. McCreary, Veselka, Bragg & Allen, P.C., No. 21-50958, 2022 WL 3355249 (5th Cir. Aug. 15, 2022). The Court held that merely sending a letter to collect a time-barred debt, although a violation of the FDCPA, does not satisfy Article III’s injury-in-fact requirement.
Class Action Procedure
Crypto Class Settlement Nixed Due to Insufficient Data on “Anonymous” Investors
By Alexander Schultz on
A settlement class that Judge Lewis A. Kaplan (S.D.N.Y.) was likely to approve circa June 2021 was rejected “on further reflection” last week, due to a lack of information about how the lead plaintiff stacked up against a class of largely “anonymous” crypto investors. …
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“Critical Mistake” In Damages Model Sinks California Class Action
By Steve Petkis on
On July 29, Judge William Alsup of the Northern District of California issued a decertification order in a long-running class action dispute concerning Cricket Wireless’s 4G advertising, ruling that plaintiff’s counsel made “too critical a mistake” in fashioning their class-wide damages model. See Freitas v. Cricket Wireless, LLC, 2022 WL 3018061, at *6 (N.D. Cal. July 29, 2022).…
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Class Certification Denied in Data Breach Class Action Based on Class-Action Waiver in Terms of Service
By Ellen Choi & Kathryn Cahoy on
The Northern District of California denied class certification in a data breach suit against Zoosk, an online dating service, concluding that the lead plaintiff had waived any right to represent a class by agreeing to a class-action waiver. See Order Denying Class Certification, Flores-Mendez v. Zoosk, Inc., No. 3:20-04929-WHA (N.D. Cal. July 27, 2022).…
Eleventh Circuit Holds that All Class Members Must Have Standing Under Circuit Law to Recover Individual Damages
By Jeffrey Huberman on
In Drazen v. Pinto, the Eleventh Circuit vacated a class settlement and held that in order to receive individual damages (whether through a settlement or otherwise), all class members must have Article III standing under Circuit precedent. 2022 WL 2963470, at *6 (11th Cir. July 27, 2022). The decision gives defendants another tool to defeat class certification, while at the same time makes it more difficult to include class members that lack standing in classwide settlements. …
Eleventh Circuit Confirms Circuit Split Over Class Representative Incentive Awards
By Jeffrey Huberman on
The en banc Eleventh Circuit recently denied a petition to rehear the case of Johnson v. NPAS Solutions, LLC (Johnson II). See 2022 WL 3083717 (11th Cir. Aug. 3, 2022). The initial opinion in Johnson relied on two Supreme Court decisions from the 1880s to hold that district courts can never, under…
Seventh Circuit Rejects “Stealth” Class Actions
By Matthew Verdin on
Can plaintiffs spring a class action on defendants in the late stages of a case? The Seventh Circuit recently answered no in Ali v. City of Chicago, 34 F.4th 594 (7th Cir. 2022), rejecting so-called stealth class actions and reaffirming a seemingly obvious rule: a class action “must be brought as a class action.”…
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Third Circuit Refuses to Accept Inferences to Support Findings of Numerosity and Commonality
By Amy Heath & Sonya Winner on
The Third Circuit’s recent decision in Allen v. Ollie’s Bargain Outlet, Inc., — F.4th —-, 2022 WL 2284654 (3d Cir. 2022), gave close scrutiny to two elements of the class certification inquiry – numerosity and commonality – that are often deemed satisfied with little analysis, and rejected the district court’s reliance on inferences drawn from limited evidence. …
Sixth Circuit Adds Teeth to Rule 23’s Ascertainability Requirement
By Jeffrey Huberman on
Posted in Class Action Procedure, Sixth Circuit
The Sixth Circuit recently made it more difficult for plaintiffs to certify a class where individualized inquiries are needed to identify class members.
In Tarrify Properties LLC v. Cuyahoga County Ohio, 2022 WL 2128816 (6th Cir. June 14, 2022), the Sixth Circuit addressed a claim that Ohio’s tax-foreclosure statute operates as a taking under the federal and Ohio constitutions. The plaintiff in Tarrify owned delinquent property that was transferred to an authorized land bank, and plaintiff argued that the transfer—which prevented the owner of the delinquent property from recovering the difference between the value of the land and the tax liability—amounted to a taking. Plaintiff sought certification of a class of owners in which “the total value of [their] property exceeded the amount of the impositions on that property at the time the transfer occurred.” Id. at *2. The district court denied plaintiff’s motion for class certification, plaintiff appealed, and the Sixth Circuit affirmed.…
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A Closer Look: Avoiding Personal Jurisdiction Under An Alter Ego Theory
By Matthew Verdin on
Class action plaintiffs often attempt to drag an out-of-state parent company into a forum based solely on the contacts of a subsidiary under the so-called alter ego theory of personal jurisdiction (sometimes called a jurisdictional veil-piercing theory). This theory allows a court to impute a subsidiary’s contacts with a forum to its parent when the subsidiary is found to be an “alter ego” of the parent company.
Companies must understand how courts apply the alter ego jurisdictional theory and best practices to minimize the unique risks this theory presents.…
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