Justia U.S. 9th Circuit Court of Appeals Opinion Summaries

Articles Posted in Class Action
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Plaintiffs’ lawyers filed a class action lawsuit on behalf of copyright holders of musical compositions and ended up recovering a little over $50,000 for the class members. The lawyers then asked the court to award them $6 million in legal fees. And the district court authorized $1.7 million in legal fees—more than thirty times the amount that the class received.   The Ninth Circuit reversed the district court’s award of attorneys’ fees to Plaintiffs’ counsel in a copyright action and remanded. The panel held that the touchstone for determining the reasonableness of attorney’s fees in a class action under Federal Rule of Civil Procedure 23 is the benefit to the class. Here, the benefit was minimal. The panel held that the district court erred in failing to calculate the settlement’s actual benefit to the class members who submitted settlement claims, as opposed to a hypothetical $20 million cap agreed on by the parties. The panel held that district courts awarding attorneys’ fees in class actions under the Copyright Act must still generally consider the proportion between the award and the benefit to the class to ensure that the award is reasonable. The panel recognized that a fee award may exceed the monetary benefit provided to the class in certain copyright cases, such as when a copyright infringement litigation leads to substantial nonmonetary relief or provides a meaningful benefit to society, but this was not such a case. The panel instructed that, on remand, the district court should rigorously evaluate the actual benefit provided to the class and award reasonable attorneys’ fees considering that benefit. View "DAVID LOWERY, ET AL V. RHAPSODY INTERNATIONAL, INC." on Justia Law

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This is a putative class action by three truck drivers against their employer, Domino’s Pizza. The court previously affirmed the district court’s denial of Domino’s motion to compel arbitration, holding that because the drivers were a “class of workers engaged in foreign or interstate commerce,” their claims were exempted from the Federal Arbitration Act (“FAA”) by 9 U.S.C. Section 1.   The Ninth Circuit affirmed the district court’s order denying Domino Pizza’s motion to compel arbitration in a putative class action brought by three Domino truck drivers, alleging violations of California labor law. The panel stated that its prior decision squarely rested upon its reading of Rittmann v. Amazon.com, Inc., 971 F.3d 904 (9th Cir. 2020), which concerned Amazon delivery drivers. The panel found no clear conflict between Rittmann and Saxon and nothing in Saxon that undermined the panel’s prior reasoning that because the plaintiff drivers in this case, like the Amazon package delivery drivers in Rittmann, transport interstate goods for the last leg to their final destinations, they are engaged in interstate commerce under Section 1. View "EDMOND CARMONA, ET AL V. DOMINO'S PIZZA, LLC" on Justia Law

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Plaintiff filed individual and class claims in Montana state court against GEICO after GEICO failed to advance pay Plaintiff’s medical bills and lost wages following a car accident caused by GEICO’s insured. GEICO removed the lawsuit to federal court, asserting jurisdiction under the Class Action Fairness Act (CAFA). Neither Plaintiff nor the district court questioned whether CAFA jurisdiction was proper.   The Ninth Circuit vacated the district court’s judgment and remanded for the district court to conduct the necessary evidentiary inquiry and determine whether GEICO can sufficiently establish that more than $5 million is in dispute. The panel held that it could sua sponte question a defendant’s allegation of CAFA jurisdiction. The panel further concluded that the current record did not sufficiently demonstrate that CAFA’s amount-in-controversy requirement was met because it was not evident from the face of the complaint and the nature of the class claims that this controversy involved more than $5 million, nor did GEICO’s notice of removal and supporting declaration satisfactorily establish that more than $5 million was in dispute. View "BRANDON MOE V. GEICO INDEMNITY COMPANY, ET AL" on Justia Law

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Counsel filed a class action lawsuit on behalf of copyright holders of musical compositions and recovered a little over $50,000 for the class members from Defendant Rhapsody International, Inc. (now rebranded as Napster), a music streaming service. The class members obtained no meaningful injunctive or nonmonetary relief in the settlement of their action. The district court nonetheless authorized $1.7 in attorneys’ fees under the “lodestar” method.   The Ninth Circuit reversed the district court’s award of attorneys’ fees to Plaintiffs’ counsel and remanded. The panel held that the touchstone for determining the reasonableness of attorneys’ fees in a class action under Federal Rule of Civil Procedure 23 is the benefit to the class. Here, the benefit was minimal. The panel held that the district court erred in failing to calculate the settlement’s actual benefit to the class members who submitted settlement claims, as opposed to a hypothetical $20 million cap agreed on by the parties. The panel held that district courts awarding attorneys’ fees in class actions under the Copyright Act must still generally consider the proportion between the award and the benefit to the class to ensure that the award is reasonable. The panel recognized that a fee award may exceed the monetary benefit provided to the class in certain copyright cases, such as when a copyright infringement litigation leads to substantial nonmonetary relief or provides a meaningful benefit to society, but this was not such a case. The panel instructed that, on remand, the district court should rigorously evaluate the actual benefit provided to the class and award reasonable attorneys’ fees considering that benefit. View "DAVID LOWERY, ET AL V. RHAPSODY INTERNATIONAL, INC." on Justia Law

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The Federal Food, Drug, and Cosmetic Act (“FDCA”) prohibits the misbranding of any food. A food is deemed to be misbranded if it meets any of the definitions in 21 U.S.C. Section 343. To implement this subsection, the Food and Drug Administration (“FDA”) promulgated regulations governing the nutrition labeling of dietary supplements. Plaintiff alleged that she and other consumers were damaged because “they paid for a product that they would not have purchased had it truthfully disclosed that it did not contain Glucosamine Sulfate.” The second amended complaint claimed violations of the California Consumers Legal Remedies Act, the California Unfair Competition Law, the California False Advertising Law, unjust enrichment, restitution, and breach of warranty. The district court concluded that Walmart had carried its burden of showing Plaintiff’s state-law claims were preempted by federal law.   The Ninth Circuit affirmed the district court’s order granting summary judgment for Walmart Inc. The panel held that Defendant’s proposed rule to the contrary was preempted. The holding in Durnford v. MusclePharm Corp., 907 F.3d 595 (9th Cir. 2018), did not provide otherwise. Nothing in Durnford suggested its analysis applied only to the nutrition panel. The panel concluded that Defendant’s claims were preempted, and Walmart was entitled to judgment as a matter of law. View "DARLENE HOLLINS, ET AL V. WALMART INC., ET AL" on Justia Law

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Plaintiff sought to represent a class of individuals, known as Amazon Flex drivers, claiming damages and injunctive relief for alleged privacy violations by Amazon.com, Inc. (“Amazon”). Plaintiff contended that Amazon monitored and wiretapped the drivers’ conversations when they communicated during off hours in closed Facebook groups. The district court denied Amazon’s motion to compel arbitration, holding that the dispute did not fall within the scope of the applicable arbitration clause in a 2016 Terms of Service Agreement (“2016 TOS”). Amazon appealed, arguing that the district court should have applied the broader arbitration clause in a 2019 Terms of Service Agreement (“2019 TOS”) and that even if the arbitration clause in the 2016 TOS applied, this dispute fell within its scope.   The Ninth Circuit affirmed the district court’s order denying Amazon’s motion to compel arbitration. Under California law and principles of contract law, the burden is on Amazon, as the party seeking arbitration, to show that it provided notice of a new TOS and that there was mutual assent to the contractual agreement to arbitrate. The panel held that there was no evidence that the email allegedly sent to drivers adequately notified drivers of the update. The district court, therefore, correctly held that the arbitration provision in the 2016 TOS still governed the parties’ relationship. The panel concluded that because Amazon’s alleged misconduct existed independently of the contract and therefore fell outside the scope of the arbitration provision in the 2016 TOS, the district court correctly denied Amazon’s motion to compel arbitration. View "DRICKEY JACKSON V. AMZN" on Justia Law

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The Butter! Spray is a butter-flavored vegetable oil dispensed in pump-action squirt bottles with a spray mechanism. The front label on the product states that the Butter! Spray has 0 calories and 0 grams of fat per serving. Plaintiffs are a class of consumers who brought their lawsuit against the then-manufacturer, Unilever United States, Inc., contending that the product’s label makes misrepresentations about fat and calorie content based on artificially low serving sizes. The district court found that Plaintiffs failed to plausibly allege that Butter! Spray was not a “spray type” fat or oil under Food and Drug Administration (FDA) regulations. The district court further held that the FDCA preempted plaintiffs’ serving size claims.   The Ninth Circuit affirmed the district court’s Fed. R. Civ. P. 12(b)(6) dismissal. The panel held that, as a matter of legal classification, Butter! Spray was a “spray.” In common parlance, a “spray” refers to liquid dispensed in the form of droplets, emitted from a mechanism that allows the product to be applied in that manner. In addition, the notion that Butter! Spray could be housed under the FDA’s legal classification for “butter” is implausible. The panel also rejected Plaintiffs’ argument that Butter! Spray is a “butter substitute” based on how it is marketed so it should be treated as “butter” for serving size purposes, too. The court explained that because Plaintiffs’ challenge to the Butter! Spray serving sizes would “directly or indirectly establish” a requirement for food labeling that is “not identical” to federal requirements, the FDCA preempts their serving size claims. View "KYM PARDINI, ET AL V. UNILEVER UNITED STATES, INC." on Justia Law

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Plaintiffs alleged that during the class period, Defendants made false or misleading statements about Forescout’s past financial performance, presently confirmed sales, and prospects for future sales. They alleged that Defendants misled investors with respect to (1) the strength of Forescout’s sales pipeline, meaning its presently booked sales and prospects for future sales; (2) the experience of Forescout’s sales force; (3) the business Forescout lost with certain business partners, or “channel partners,” when it announced a merger with Advent International, Inc.; and (4) the likelihood that the merger would close.   The Ninth Circuit affirmed in part and reversed in part the district court’s dismissal of a securities fraud class action under Sections 10(b) and 20(a) of the Securities and Exchange Act and Rule 10b-5. The panel held that Plaintiffs adequately pleaded both falsity and scienter as to some of the challenged statements and that the Private Securities Litigation Reform Act’s safe harbor for forward-looking statements did not preclude liability as to some of these statements. The panel affirmed the district court’s dismissal as to certain statements, and it reversed and remanded for further proceedings as to other challenged statements regarding the sales pipeline and the Advent acquisition. View "GLAZER CAPITAL MANAGEMENT, L.P, ET AL V. FORESCOUT TECHNOLOGIES, INC., ET AL" on Justia Law

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Defendant LuLaRoe, a multilevel-marketing company that sells clothing to purchasers across the United States through “fashion retailers” located in all fifty states, allegedly charged sales tax to these purchasers based on the location of the retailer rather than the location of the purchaser. LuLaRoe eventually refunded all the improper sales tax it collected, but it did not pay interest on the refunded amounts. Plaintiff, an Alaska resident who paid the improperly charged sales tax to LuLaRoe, brought this class action under Alaska law on behalf of herself and other Alaskans who were improperly charged, for recovery of the interest on the now-refunded amounts collected and for recovery of statutory damages. The district court certified the class under Rule 23(b)(3) and LuLaRoe appealed under Rule 23(f).   The Ninth Circuit vacated the district court’s order certifying the class of Alaska purchasers and remanded for further proceedings. The panel first rejected LuLaRoe’s argument that class certification was improper because the small amount of money currently owed to some class members was insufficient to support standing and the presence of these class members in the class made individualized issues predominant over class issues. The panel next rejected LuLaRoe’s assertion that some purchasers knew that the sales tax charge was improper but nevertheless voluntarily paid the invoice which contained the improperly assessed sales tax amount, and thus, under applicable Alaska law, no deceptive practice caused any injury for these purchasers. Finally, the panel held that LuLaRoe’s third argument, that class certification should be reversed because some fashion retailers offset the improper sales tax through individual discounts, had merit. View "KATIE VAN V. LLR, INC., ET AL" on Justia Law

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Plaintiff filed a class action against Defendants Amazon.com Services, Inc. and Amazon.com, Inc., alleging that Defendants’ failure to compensate employees for time spent waiting for and passing through mandatory security screening before and after work shifts and breaks violates Oregon’s wage and hour laws. The district court granted judgment on the pleadings to Defendants, and Plaintiff timely appealed.   The Ninth Circuit affirmed the district court’s judgment on the pleadings in favor of Defendants. The panel had certified the following issue to the Oregon Supreme Court: “Under Oregon law, is time that employees spend on the employer’s premises waiting for and undergoing mandatory security screenings compensable?” In response, the Oregon Supreme Court held that Oregon law aligns with federal law regarding what activities are compensable. Therefore, time that employees spend on the employer’s premises waiting for and undergoing mandatory security screenings before or after their work shifts is compensable only if the screenings are either (1) an integral and indispensable part of the employees’ principal activities, or (2) compensable as a matter of contract, custom, or practice. Plaintiff’s complaint did not allege that either of the identified exceptions applied. Accordingly, the panel held that the district court properly granted judgment on the pleadings to Defendants. View "LINDSEY BUERO V. AMAZON.COM SERVICES, INC., ET AL" on Justia Law