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Class Action Litigation Newsletter Spring 2020 - Eighth, Tenth, D.C. Circuits

Eighth Circuit

Stuart v. Glob. Tel *Link, 956 F.3d 555 (8th Cir. 2020)

Eighth Circuit affirms order decertifying nationwide class where the unifying legal theory used to support certification proved invalid. 

This case involved claims for violations of the Federal Communications Act (FCA) and unjust enrichment brought by prisoners against the telephone company providing service to jails and prisons. The Eighth Circuit affirmed the district court’s decertification of a nationwide class, as well as a decision granting summary judgment for the defendant on the merits.

In affirming decertification, the panel focused on a decision by the D.C. Circuit that undercut the legal basis for plaintiffs’ class certification theory. Plaintiffs had obtained certification based on the theory that (i) the defendant was charging excessive rates and fees because those charges included a markup for the commissions it had to pay state and local correctional facilities, and (ii) those commissions were impermissible as a matter of law based on FCC regulations. But in Global Tel*Link v. FCC, 866 F.3d 397 (D.C. Cir. 2017), the court had rejected plaintiffs’ theory on commissions, and the Eighth Circuit concluded that this decision rendered plaintiffs’ “theory of class certification … untenable,” thus undercutting any basis for commonality or predominance.

The panel also concluded that, based on the D.C. Circuit’s ruling that the FCC only could limit charges for interstate, as opposed to intrastate, telephone calls, certification also was improper as to plaintiffs’ claim that deposit fees were excessive because plaintiffs had “presented no reliable mechanism” for separating interstate from intrastate calls. Finally, in affirming decertification on the unjust-enrichment claim, the panel held that defendant’s voluntary-payment doctrine defense, which bars plaintiff from recovering money she has voluntarily paid, posed a panoply of individualized questions that foreclosed predominance. 

Tenth Circuit

In re EpiPen (Epinephrine Injection, USP) Marketing, Sales Practices, & Antitrust Litig., MDL No. 2785, 2020 WL 1180550 (D. Kan. Mar. 10, 2002)

Kansas district court predicts Tenth Circuit would adopt less restrictive approach to ascertainability and Article III standing in class actions.

In this case, plaintiffs filed a putative nationwide class alleging that the manufacturer and distributor of EpiPens violated state antitrust laws, RICO, and the consumer-protection statutes of over twenty states, and engaged in unjust enrichment. The court entered a lengthy decision granting in part and denying in part plaintiffs’ motion for class certification.

The court first addressed two threshold issues: ascertainability and standing. On ascertainability, the court found “no Tenth Circuit case … specifically addresses whether ascertainability is a separate requirement under Rule 23(b)(3),” and held that “the Tenth Circuit … would decline to recognize ascertainability as a separate, unstated requirement of Rule 23” as the Third Circuit and others have, but would instead “follow the Seventh Circuit’s … less restrictive ascertainability test.” On standing, the court held plaintiffs had standing to pursue their claims so long as “at least one named plaintiff resides in” each of the states under which plaintiffs had sued.

The court then addressed the Rule 23 requirements. After finding plaintiffs had satisfied each of Rule 23(a)’s requirements, it assessed whether common issues predominated under Rule 23(b)(3). The court first held that individualized damages issues did not preclude class certification because the defendants’ challenges to plaintiffs’ experts’ methodologies “don’t undermine their plausibility for establish[ing] classwide damages,” but “instead go to the weight the trier of fact should give them” in deciding whether those methodologies establish that the class sustained damage as a whole.

The court concluded that, even though certain members of the class were not injured, class certification was not precluded, because those individuals could be excluded from the class. It rejected defendants’ arguments that plaintiffs were required to prove all putative class members were injured under Article III to the Constitution, declining to follow recent decisions from the First and D.C. Circuits, instead finding that Tenth Circuit precedent holds there is no such requirement under Article III.

Finally, the court declined to certify the consumer-protection claims or the unjust-enrichment claims, finding the variances among the various states’ substantive laws defeated predominance. 

D.C. Circuit

Molock v. Whole Foods Mkt. Grp., Inc., 952 F.3d 293 (D.C. Cir. 2020)

Court holds that personal jurisdiction challenges to nonresident class members should be deferred to the class certification stage; appellant’s petition for panel rehearing or rehearing en banc denied.

This putative class action involved allegations of wage and hour claims by current and former Whole Foods employees.  Whole Foods moved to dismiss on several grounds, including that the district court lacked personal jurisdiction to entertain the claims of nonresident putative class members.  The district court denied the motion in part and certified its order for interlocutory appeal pursuant to 28 U.S. § 1292(b).  Whole Foods then filed a petition for leave to appeal, which was granted.  At the heart of the appeal was the import and applicability of the Supreme Court’s decision in Bristol-Myers Squibb Co. v. Superior Court of California, 137 S. Ct. 1773 (2017), which found that nonresidents’ claims lacked an “adequate link” with California to justify the court’s exercise of specific jurisdiction.

On appeal, Whole Foods argued that because the district court is sitting in diversity, the jurisdictional analysis is akin to that of a state court (as addressed by Bristol-Myers), and that the claims asserted on behalf of nonresidents should be dismissed because the district court lacked general and specific personal jurisdiction.  Plaintiffs took a different view, arguing that class actions present an exception to the general rule regarding jurisdiction, and in the alternative, that any motion to dismiss would be premature as the class had not yet been certified (such that putative class members are not yet parties to the underlying action). The D.C. Circuit declined to address the main question about how to apply Bristol-Myers, instead concluding that the issue was premature.  Because the class had not yet been certified, the court concluded that a motion to dismiss would be premature.  Senior Judge Silberman expressed his views in a lengthy dissent, reaching the Bristol-Myers question and stating that class allegations unrelated to Whole Foods’ contacts with the District of Columbia should not proceed.

On April 9, 2020, Whole Foods filed a petition for panel rehearing or rehearing en banc, arguing, among other things, that rehearing is appropriate because (1) the panel failed to recognize that the appropriate time to consider the question for personal jurisdiction over a named plaintiff’s representative class action claims is at the pleadings stage, and (2) the issue certified for appeal (whether Bristol-Myers applies to class actions) is of utmost importance and was not reached by the panel, meaning that the D.C. Circuit would be “the first decision endorsing the proposition that in class actions, due process rights arising from challenges to personal jurisdiction must wait until after class certification.”  The D.C. Circuit denied the rehearing request on May 7, 2020.

©2020 Greenberg Traurig, LLP. All rights reserved. National Law Review, Volume X, Number 151

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About this Author

Robert Herrington, Greenberg Traurig Law Firm, Los Angeles, Cybersecurity Litigation Attorney
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Robert J. Herrington is an attorney in firm's Products Liability & Mass Torts Practice. He focuses his practice on defending consumer products companies in complex, multi-party litigation, including class actions, government enforcement litigation, product defect litigation and mass torts. Rob represents companies in a variety of industries, including apparel and footwear, retail, emerging technologies, consumer electronics, video game, telecommunications, advertising and publicity, online retailing, food and beverage, nutritional supplements, personal care products...

310-586-7816
Stephen L. Saxl Class Action Attorney Greenberg Traurig
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Stephen L. Saxl is the Co-Chair of the Class Action Litigation Group. He concentrates his practice on defending class actions and complex litigation matters in federal court and New York State courts. His class action experience includes cases in the securities, retail, telecommunications, publishing, insurance, Internet and tobacco industries. He has defended clients against statutory and common law claims including fraud, unfair trade practices, Racketeer Influenced and Corrupt Organizations (RICO), breach of contract and price-fixing.

Concentrations

  • Class actions
  • Complex civil litigation
  • Securities and broker-dealer litigation
  • Commercial litigation
  • Consumer litigation
  • Antitrust
  • Media
  • Privacy litigation
  • Product liability
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John Crisham Litigation Attorney Greenberg Traurig
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John Crisham has briefed, argued, and won complex civil litigation cases involving class actions, energy and environmental matters, commercial and business disputes, products liability and health care, and employment law. John has represented clients at virtually every state of litigation, from dispositive motions to appeals, in more than 15 different states, before 10 different federal Courts of Appeal, and in the United States Supreme Court. He served as counsel for the prevailing petitioners in Mutual Pharmaceutical Company v. Bartlett, 570 U.S. 472 (2013) and Pliva, Inc. v...

303.572.6500
Phillip H. Hutchinson Business Litigation Attorney Greenberg Traurig West Palm Beach, FL
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Phillip H. Hutchinson is a strategic business litigator who defends corporations in complex litigation claims in state and federal courts, including individual class actions and real estate litigation disputes. Phillip has represented clients in cases involving complex product liability disputes, automobile rollover claims, construction defects (including delay claims), insurance coverage defense, eminent domain actions, employment discrimination, non-competition agreements, and real estate disputes, including commercial leases. He has broad experience in complex case management,...

561-650-7952
Lisa M. Simonetti Complex Litigation Attorney Greenberg Traurig Los Angeles, CA
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Lisa M. Simonetti focuses on the defense of complex litigation, with broad experience representing clients in the financial services industry, including regional and national banks, credit card issuers, mortgage bankers, various types of loan servicers, consumer finance companies and third-party collectors. She serves as trial and appellate counsel in courts across the country and routinely counsels financial services clients on compliance with state and federal laws and regulations.

Concentrations

  • Telephone Consumer Protection Act
  • Fair Credit Reporting Act...
310-586-7824