Class Action Procedure

In Moses v. New York Times Co., 2023 WL 5281138 (2d Cir. Aug. 17, 2023), the Second Circuit vacated and remanded the approval of a class action settlement because the district court applied the wrong legal standard in determining that the settlement was fair.  But in doing so, the court reiterated that incentive awards for class action representatives are permissible in the Second Circuit.…

Continue Reading Second Circuit Holds that Rule 23(e) Prohibits Presumption of Fairness of Arm’s-Length Negotiated Class Settlements

In a recent published decision, the Fifth Circuit declined to articulate a rule for the “order and depth in which” it “grapples with constitutional standing and the Rule 23 inquiry.”  Chavez v. Plan Benefit Services, Inc., __ F.4th __, No. 22-50368, 2023 WL 5160393 (5th Cir. Aug. 11, 2023).  The court concluded that the plaintiffs—three employees who participated in health and retirement plans administered by the defendants—had standing to sue on behalf of absent class members who participated in thousands of different benefits plans administered by the defendants.  The court went on to affirm the district court’s certification of two classes, each under both Rules 23(b)(1)(B) and 23(b)(3).…

Continue Reading Fifth Circuit Declines to Wade Into Circuit Split on Relationship Between Standing and Class Certification

This blog previously covered the Eleventh Circuit’s July 2022 decision in Drazen v. Pinto, which held that all class members must have Article III standing in order to receive individual damages in a class settlement.  41 F.4th 1354 (11th Cir. 2022).  Because the law in the Eleventh Circuit at the time held that a…

On July 26, 2023, the UK Supreme Court decided in R (on the application of PACCAR Inc and others) (Appellants) v Competition Appeal Tribunal and others (Respondents) [2023] UKSC 28 that litigation funding agreements (“LFAs”) — where third party funders agree to finance the legal costs of litigation in return for a percentage of any damages recovered — constitute damages-based agreements (“DBAs”) under UK law. Consequently, LFAs will be unenforceable unless they satisfy the statutory requirements for DBAs. In practice, this decision is likely to render many LFAs that are currently in place unenforceable, and will affect the type of funding arrangements available to claimants in collective proceedings moving forward.…

Continue Reading UK Supreme Court Hands Down Judgment on Litigation Funding Agreements

Rule 23(c)(4) states that, “[w]hen appropriate, an action may be brought or maintained as a class action with respect to particular issues.”  But do classes under Rule 23(c)(4), otherwise known as “issue classes,” also need to satisfy the requirements of Rule 23(a) and (b)?  In Harris v. Medical Transportation Management, Inc., 2023 WL 4567258 (D.C. Cir. July 18, 2023), the D.C. Circuit confirmed that the answer is “yes.” …

Continue Reading D.C. Circuit Confirms That Issue Classes Must Satisfy the Requirements of Rule 23(a) and (b)

An Illinois federal district court recently concluded that, under the Class Action Fairness Act (CAFA), the “citizenship” of a limited liability company is determined by reference to its principal place of business and state of organization. See Calchi v. TopCo Associates, LLC, 2023 WL 3863355 (N.D.Ill. June 7, 2023).

The court originally dismissed plaintiff’s…

Pennsylvania law requires foreign corporations to register to do business in the Commonwealth and provides that all registrants are subject to suit on “any cause” in the Commonwealth’s courts, regardless of a connection to the jurisdiction. In a split decision, the Supreme Court reversed a Pennsylvania Supreme Court decision finding that this general jurisdiction provision violated the Due Process Clause. Mallory v. Norfolk So. Railway Co., 600 U.S. __ (2023) (slip op. available here).…

Continue Reading Split Supreme Court Weighs in on Corporate Consent to Personal Jurisdiction

The Supreme Court, in a 5–4 ruling, has resolved a circuit split on the issue of litigation stays pending appeal of denials of motions to compel arbitration.  In the underlying putative class action, Bielski et al v. Coinbase, Inc., 3:21-cv-07478 (N.D. Cal.), Coinbase moved to compel arbitration of the plaintiffs’ claims, but the motion was denied by the district court.  The Ninth Circuit—in a split from several other Circuits—declined to stay the district court proceedings while the appeal was pending.  The Supreme Court now has ruled that a district court must stay proceedings while an interlocutory appeal on the question of arbitrability is ongoing.  The decision means that defendants should be able to minimize ongoing litigation costs while an appeal of an adverse arbitration decision is pending.…

Continue Reading Supreme Court Resolves Circuit Split to Require Stays Pending Appeal of Refusals to Compel Arbitration

A Northern District of California court recently dismissed a putative California class action against The J.M. Smucker Company (“J.M. Smucker”) for lack of personal jurisdiction because it did not purposefully target California in operating its marketing website for the Folgers coffee brand.  See Carroll v. J.M. Smucker Co., No. 3:22-cv-08952 (N.D. Cal. June 15, 2023).…

Continue Reading J.M. Smucker Defeats Putative VPPA Class Action on Jurisdictional Grounds

The Sixth Circuit recently vacated a class certification order in a decision that may make it easier for defendants to defeat putative class actions where a named plaintiff asserts standing based on the injuries of absent class members.  Under the “juridical link doctrine,” a named plaintiff may bring a class action against defendants who did not injure them so long as the absent members of the proposed class would have standing to sue those defendants.  In vacating a district court order that certified a class based on this doctrine, the Sixth Circuit joined the Second Circuit in rejecting the doctrine and holding that named plaintiffs in a putative class action must have standing to sue every defendant at the time of filing.…

Continue Reading Sixth Circuit Rejects Juridical Link Exception to Standing in Class Actions