While Enforcing Arbitration Provision, U.S. District Court in California Sanctions Defendant

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Plaintiff Kate McLellan sued Fitbit for alleged misrepresentations about the accuracy of heart rate monitoring in its devices. Fitbit told the Court that the Terms of Service McLellan had agreed to required arbitration of her claims at the American Arbitration Association (AAA). Fitbit also said that McLellan’s objections to the scope and enforceability of the agreement were delegated to the …

U.S. District Court in Illinois Allows Suit Against Professional Objectors to Proceed

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In a suit brought by class action attorney Jay Edelson against professional objectors Darrell Palmer and Chris Bandas, the court dismissed the RICO and abuse of process claims, but allowed the claims based on unauthorized practice of law to proceed. “Bandas does not contest Plaintiff’s categorization of his and Palmer’s activities in the Gannett litigation as constituting the ‘practice of …

U.S. Supreme Court Limits Application of American Pipe in Successive Class Actions

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The Securities Exchange Act of 1934 has both a two-year statute of limitations and a five-year statute of repose. With respect to complaints that China Agritech engaged in fraud and misleading business practices causing the company’s stock price to plummet when the misconduct came to light, the accrual date for purposes of the two-year limitation period was February 3, 2011, …

U.S. Supreme Court Rejects Argument that National Labor Relations Act Prohibits Employers from Enforcing Class Action Waivers in Arbitration Agreements with Employees

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“Should employees and employers be allowed to agree that any disputes between them will be resolved through one-on-one arbitration? Or should employees always be permitted to bring their claims in class or collective actions, no matter what they agreed with their employers? “As a matter of policy these questions are surely debatable. But as a matter of law the answer …

Supreme Court of Washington Reverses Denial of Class Certification in Wage and Hour Case

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Nurses filed putative class action against hospital for failure to provide rest and meal breaks required under State Law.  The trial court denied certification, but the Washington Supreme Court reversed. “The trial court ruled that the nurses could not satisfy the predominance requirement because of the individual issues regarding nurse type and shift length. But the court failed to explain …

U.S. Second Circuit Finds that Group Policyholders Have Article III Standing to Pursue Claims for the Purchase of Illegal Policies, Even If Coverage Is Enforceable

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Plaintiff group policyholders brought suit against HealthExtras for marketing “policies” that did not comply with the requirements of the New York Insurance Code. The District Court dismissed the case for lack of standing.  While plaintiffs’ claims were premised on the contention that the policies were illegal, courts, under New York insurance law, enforce such contracts as if they did include …

U.S. Ninth Circuit Vacates Nationwide Settlement Class Based on Variations in State Law

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A nationwide class action settlement arising out of misstatements by Hyundai and Kia regarding fuel efficiency was vacated by the U.S. Ninth Circuit Court of Appeals on the basis that the District Court was required to apply a choice-of-law analysis and consider whether variations in State Law destroyed predominance under Rule 23(b)(3) – noting, with respect to remand, that the Court …

U.S. Fifth Circuit Allows Removal under CAFA when Plaintiffs Seek Consolidation of New Action into Pre-Existing Multi-Plaintiff Case

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In 2002, over 600 plaintiffs filed a petition in Lester v. Exxon, alleging property damage and/or personal injuries arising from naturally occurring radioactive material (NORM). The State Court utilized a “flighting” system to segregate the Lester plaintiffs’ claims into smaller trials or “flights.”  There is no preclusive effect from one flight to the next, and, thus far, no flight has …

U.S. Third Circuit Refuses to Enforce Approved Class Settlement against the State of Louisiana as an Indirect Purchaser

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In the underlying lawsuit, private indirect purchasers moved for final approval of a class settlement, after the District Court had already certified the class. The State of Louisiana, an indirect Flonase purchaser, qualified as a potential class member but did not receive the approved Class Notice. Instead, it only received CAFA Notice.  In the second ancillary suit, the settling defendant, …

U.S. Fifth Circuit Holds, Based on Language in Arbitration Provision at Issue, that Action which Included Claims for Injunctive Relief under Sherman Antitrust Act Were Not Subject to Arbitration

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Sued by a competitor for antitrust violations, the defendants sought to enforce an arbitration agreement. The magistrate judge granted the motion to compel arbitration, holding that the threshhold question of arbitrability belonged to an arbitrator. The district court reversed, holding it had the authority to rule on the question of arbitrability, and that the claims at issue were not arbitrable. …