Class Action Procedure

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Defendants often consider whether weak class allegations can be stricken at the pleading stage, leaving just a low-exposure individual claim to defend.  That tactic may have a great chance of success—especially when a complaint asserts state-law claims on behalf of a nationwide class or challenges multiple misrepresentations—in light of a recent Fifth Circuit decision approving that strategy.

In Elson v. Black, __ F.4th __, 2023 WL 111317 (5th Cir. Jan. 5, 2023), plaintiffs brought a putative class action alleging that the defendants made various misrepresentations about a massager.  Plaintiffs sought a nationwide class and, in the alternative, seven subclasses representing the seven states where they reside.  The district court granted the defendants’ motion to strike the class allegation, a decision the Fifth Circuit upheld on several grounds.…

Continue Reading Fifth Circuit Upholds Early Dismissal of Class Allegations at Pleading Stage

The First Circuit recently vacated and remanded a district court’s approval of a proposed class action settlement “because the absence of separate settlement counsel for distinct groups of class members makes it too difficult to determine whether the settlement treated class members equitably.” Murray v. Grocery Deliver E-Servs. USA Inc., — F.4th —, 2022…

The Second Circuit recently vacated a district court ruling certifying a class of thousands of employee benefit plans whose fiduciaries contracted with the Teachers Insurance and Annuity Association of America (TIAA) to provide collateralized loans to plan participants, in a case that clarifies how courts must analyze challenges to Rule 23’s “predominance” requirement for class…

In a recent decision, a federal judge granted summary judgment for the Securities and Exchange Commission (SEC) finding that the LBC cryptocurrency token qualifies as a security.  While the ruling is confined to this specific token, it represents a victory for the SEC’s assertions that many cryptocurrencies, including so called “utility tokens,” represent securities that need to be registered with the agency.  The Court also held that the makers of the LBC token, LBRY, Inc., had fair notice that the token was subject to the securities laws.  Considering the ongoing class actions and enforcement proceedings litigating this issue across several cases, companies operating in the cryptocurrency space, including cryptocurrency exchanges, should follow this development to assess any possible impact on their businesses.…

Continue Reading S.E.C. Wins Summary Judgment Determination That Cryptocurrency Token Qualifies as a Security

The Third Circuit recently vacated an order denying class certification, and in the process provided more clarity on what plaintiffs must do to satisfy Rule 23’s predominance and ascertainability requirements.

In Kelly v. RealPage Inc., — F.4th —, 2022 WL 3642113 (3d Cir. Aug. 24, 2022), the plaintiffs alleged that their rental applications were…

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.…

Continue Reading Post-Litigation Refund Check Does Not Moot Class Representative’s Damages Claim, but It Does Defeat Class Certification

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.…

Continue Reading Fifth Circuit Applies TransUnion To Conclude Plaintiff Lacked Standing To Assert FDCPA Claims.

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).…

Continue Reading Class Certification Denied in Data Breach Class Action Based on Class-Action Waiver in Terms of Service

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. …

Continue Reading Eleventh Circuit Holds that All Class Members Must Have Standing Under Circuit Law to Recover Individual Damages

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…