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

Kiana Jones, along with thousands of other claimants, initiated dispute-resolution proceedings against Starz Entertainment, LLC, alleging violations of federal and state privacy laws. The arbitration provider, Judicial Arbitration and Mediation Services (JAMS), ordered the consolidation of these filings to be presided over by a single arbitrator. Jones petitioned the district court to compel individual arbitration, arguing that the consolidation violated the Starz Terms of Use, which she claimed required individual arbitration.The United States District Court for the Central District of California denied Jones's petition, holding that she was not "aggrieved" within the meaning of the Federal Arbitration Act (FAA) because Starz had not failed, neglected, or refused to arbitrate. The court also held that the consolidation did not present a gateway question of arbitrability for the courts to address.The United States Court of Appeals for the Ninth Circuit affirmed the district court's decision. The panel held that Jones was not a "party aggrieved by the alleged failure, neglect, or refusal of another to arbitrate," as required by 9 U.S.C. § 4, because Starz never failed, neglected, or refused to arbitrate. The court distinguished this case from Heckman v. Live Nation Ent., Inc., noting that the consolidation by JAMS did not present a gateway question of arbitrability. The panel also held that the FAA did not allow Jones, as the party seeking arbitration, to raise the argument that the Terms of Use were unconscionable to the extent that they allowed pre-arbitration consolidation by JAMS. The decision of the district court was affirmed. View "JONES V. STARZ ENTERTAINMENT, LLC" on Justia Law

The plaintiff, Katherine Chabolla, purchased a one-month subscription from ClassPass, a company offering access to gyms and fitness classes, in January 2020. Due to the COVID-19 pandemic, ClassPass paused charges but resumed them when gyms reopened. Chabolla filed a lawsuit alleging that ClassPass violated California’s Automatic Renewal Law, Unfair Competition Law, and Consumers Legal Remedies Act by resuming charges without proper notice.The United States District Court for the Northern District of California denied ClassPass’s motion to compel arbitration, which argued that Chabolla had agreed to arbitrate any claims by using their website. The district court found that the website did not provide reasonably conspicuous notice of the Terms of Use, which included the arbitration clause, and that Chabolla did not unambiguously manifest assent to those terms.The United States Court of Appeals for the Ninth Circuit reviewed the case and affirmed the district court’s decision. The court held that ClassPass’s website, which resembled a sign-in wrap agreement, did not provide reasonably conspicuous notice of the Terms of Use on the landing page or the first screen. Even if the second and third screens provided such notice, Chabolla did not unambiguously manifest her assent to the Terms of Use on those screens. The court concluded that Chabolla’s use of the website did not amount to an unambiguous manifestation of assent to the Terms of Use, and therefore, she was not bound by the arbitration clause within those terms. The court affirmed the district court’s order denying ClassPass’s motion to compel arbitration. View "CHABOLLA V. CLASSPASS, INC." on Justia Law

Dawn Lui, a longtime employee of the United States Postal Service (USPS), alleged disparate treatment, a hostile work environment, and unlawful retaliation under Title VII of the Civil Rights Act. Lui, a woman of Chinese ethnicity, claimed she was targeted with false complaints and grievances by employees at the Shelton Post Office due to her race, sex, and national origin. She was demoted from her position as Postmaster in Shelton, Washington, to a lower-paying Postmaster position in Roy, Washington, and replaced by a white man. Lui filed an informal discrimination complaint through USPS’s Equal Employment Opportunity (EEO) System and later a formal EEO complaint.The United States District Court for the Western District of Washington granted summary judgment to USPS on all of Lui’s claims. The court found that Lui failed to establish a prima facie case of discrimination, did not exhaust her administrative remedies for her hostile work environment claim, and failed to establish a causal connection for her retaliation claim.The United States Court of Appeals for the Ninth Circuit reviewed the case. The court reversed the district court’s summary judgment on Lui’s disparate treatment claim, holding that Lui established a prima facie case of discrimination by showing she was replaced by a white man, which gave rise to an inference of discrimination. The court also found a genuine dispute of material fact about whether the decision to demote Lui was influenced by subordinate bias.The Ninth Circuit vacated the district court’s summary judgment on Lui’s hostile work environment claim, concluding that Lui exhausted her administrative remedies and remanded the case for the district court to address the merits of this claim. However, the court affirmed the district court’s grant of summary judgment on Lui’s retaliation claim, finding that Lui failed to establish a causal connection between her protected activity and the demotion. View "LUI V. DEJOY" on Justia Law

Plaintiffs sued Qualcomm Inc., alleging that its business practices violated state and federal antitrust laws. These practices included Qualcomm’s “no license, no chips” policy, which required cellular manufacturers to license Qualcomm’s patents to purchase its modem chips, and alleged exclusive dealing agreements with Apple and Samsung. The Federal Trade Commission (FTC) had previously challenged these practices, but the Ninth Circuit reversed the district court’s ruling in favor of the FTC, holding that Qualcomm did not violate the Sherman Act.The district court in the current case certified a nationwide class, but the Ninth Circuit vacated the class certification order and remanded to consider the viability of plaintiffs’ claims post-FTC v. Qualcomm. On remand, plaintiffs proceeded with state-law claims under California’s Cartwright Act and Unfair Competition Law (UCL). The district court dismissed the tying claims and granted summary judgment on the exclusive dealing claims. The court found that the Cartwright Act did not depart from the Sherman Act and that plaintiffs failed to show market foreclosure or anticompetitive impact in the tied product market. The court also rejected the UCL claims, finding no fraudulent practices and determining that plaintiffs could not seek equitable relief.The United States Court of Appeals for the Ninth Circuit affirmed the district court’s dismissal of the tying claims and the summary judgment on the exclusive dealing claims under the Cartwright Act. The court held that Qualcomm’s “no license, no chips” policy was not anticompetitive and that plaintiffs failed to show substantial market foreclosure or antitrust injury. The court also affirmed the rejection of the UCL claims but vacated the summary judgment on the UCL unfairness claim related to exclusive dealing, remanding with instructions to dismiss that claim without prejudice for refiling in state court. View "KEY V. QUALCOMM INCORPORATED" on Justia Law

Philip A. Powers III was convicted of seven misdemeanor counts related to setting three fires in national forests in Arizona. Powers, who was hiking and became lost, set the fires to signal for help. The fires, named the Taylor Fire, the Sycamore Fire, and the Sycamore 2 Fire, caused significant damage, with the Sycamore Fire burning 230 acres and incurring substantial fire suppression costs.The case was first heard by a magistrate judge in a bench trial. Powers admitted to setting the fires but claimed he did so out of necessity, as he was out of food and water, had no cell phone service, and believed his life was in danger. The magistrate judge rejected the necessity defense, finding that Powers was not facing imminent harm when he set the Taylor Fire and that his actions in setting and abandoning the fires were objectively unreasonable. Powers was found guilty on all counts, sentenced to supervised probation, and ordered to pay restitution.Powers appealed to the United States District Court for the District of Arizona, which affirmed the magistrate judge's decision, agreeing that the necessity defense did not apply. Powers then appealed to the United States Court of Appeals for the Ninth Circuit.The Ninth Circuit held that Powers did not demonstrate he was facing imminent harm when he set the Taylor Fire and that his actions in setting and abandoning the fires were objectively unreasonable. The court affirmed the magistrate judge's findings and upheld Powers's convictions and the order of restitution. The court emphasized that the necessity defense requires the defendant to act reasonably, which Powers failed to do in this case. View "USA V. POWERS" on Justia Law

Elizabeth Holmes and Ramesh "Sunny" Balwani, founders of Theranos, were convicted of defrauding investors about the capabilities of their company's blood-testing technology. Theranos claimed it could run accurate tests with just a drop of blood, attracting significant investments. However, the technology was unreliable, and the company misled investors about its financial health, partnerships, and the validation of its technology by pharmaceutical companies.The United States District Court for the Northern District of California severed their trials due to Holmes's allegations of abuse by Balwani. Holmes was convicted on four counts related to investor fraud, while Balwani was convicted on all counts, including conspiracy to commit wire fraud against investors and patients. Holmes was sentenced to 135 months, and Balwani to 155 months in prison. The district court also ordered them to pay $452 million in restitution.The United States Court of Appeals for the Ninth Circuit reviewed the case. The court affirmed the convictions, sentences, and restitution order. It held that the district court did not abuse its discretion in admitting testimony from former Theranos employees, even if some of it veered into expert territory. The court found any errors in admitting this testimony to be harmless due to the weight of other evidence against the defendants.The Ninth Circuit also upheld the district court's decision to admit a report from the Center for Medicare and Medicaid Services, finding it relevant to Holmes's knowledge and intent. The court rejected Holmes's argument that the district court violated her Confrontation Clause rights by limiting cross-examination of a former Theranos lab director. Additionally, the court found no merit in Balwani's claims of constructive amendment of the indictment and Napue violations. The court concluded that the district court's factual findings on loss causation and the number of victims were not clearly erroneous and affirmed the restitution order. View "USA V. HOLMES" on Justia Law

Ryan Six filed a lawsuit against IQ Data International, Inc. under the Fair Debt Collection Practices Act (FDCPA), alleging that IQ sent him a debt verification letter after he had informed the company that all communications should be directed to his attorney. Six claimed that this action violated 15 U.S.C. § 1692c(a)(2), which prohibits debt collectors from directly communicating with a consumer known to be represented by an attorney.The United States District Court for the District of Arizona dismissed Six's action for lack of subject matter jurisdiction, ruling that he lacked Article III standing because he did not suffer an injury in fact. The district court reasoned that receiving one unwanted letter did not constitute a concrete harm akin to those traditionally recognized by American courts, nor was it the type of abusive debt collection practice the FDCPA was intended to prevent.The United States Court of Appeals for the Ninth Circuit reviewed the case and reversed the district court's dismissal. The Ninth Circuit held that Six had Article III standing to bring his claim under § 1692c(a)(2). The court concluded that receiving a letter in violation of this provision constituted a concrete injury because it infringed on Six's privacy interests, a harm that Congress intended to prevent with the FDCPA. The court also found that this harm was analogous to the common law tort of intrusion upon seclusion, which protects against unwanted intrusions into one's private affairs. The court determined that Six's injury was particularized and actual, and that the remaining elements of standing were met, as there was a causal connection between the injury and IQ's conduct, and the relief sought would redress the intrusion.The Ninth Circuit reversed the district court's dismissal and remanded the case for further proceedings consistent with its opinion. View "SIX V. IQ DATA INTERNATIONAL, INC." on Justia Law

A cyberattack on California Pizza Kitchen, Inc. (CPK) in September 2021 compromised the personal information of over 100,000 former and current employees. This led to multiple class action lawsuits against CPK, alleging negligence and other claims. The consolidated plaintiffs reached a settlement with CPK, offering cash payments and credit monitoring services to class members, with CPK required to make payments only to those who submitted valid claims. The settlement's monetary value was estimated at around $950,000, while the attorneys sought $800,000 in fees.The United States District Court for the Central District of California approved the settlement but reserved judgment on the attorneys' fees until after the claims process concluded. The consolidated plaintiffs reported a final claims rate of 1.8%, with the maximum monetary value of the claims being around $950,000. Despite expressing concerns about the scope of attorneys' fees, the district court ultimately awarded the full $800,000 in fees and costs.The United States Court of Appeals for the Ninth Circuit reviewed the case and affirmed the district court's approval of the class settlement, finding that the district court had properly applied the heightened standard to review the settlement for collusion and had not abused its discretion in finding the settlement fair, reasonable, and adequate. However, the Ninth Circuit reversed the fee award, noting that the district court had not adequately assessed the actual value of the settlement and compared it to the fees requested. The case was remanded for the district court to determine the settlement's actual value to class members and award reasonable and proportionate attorneys' fees. View "IN RE: CALIFORNIA PIZZA KITCHEN DATA BREACH LITIGATION" on Justia Law

A Texas attorney, Robert M. Roach, claimed to have an oral agreement with Fred Schrader, the former owner of Schrader Cellars, LLC, regarding the creation of another company, RBS LLC, which Roach asserted had an ownership interest in Schrader Cellars. After Fred Schrader sold Schrader Cellars to Constellation Brands, Roach sued Fred and Constellation in Texas state court, claiming the sale was improper. Schrader Cellars then filed the current action, seeking declaratory relief that Roach had no ownership interest in Schrader Cellars, and Roach counterclaimed.The United States District Court for the Northern District of California granted summary judgment in favor of Schrader Cellars on its claim for declaratory relief and dismissed Roach’s counterclaims. The court concluded that the oral agreement violated California Rule of Professional Responsibility 3-300 and that Roach did not rebut the presumption of undue influence. The case proceeded to trial on Schrader Cellars’s claim for breach of fiduciary duty, where the jury found that Roach’s breach caused harm but did not award damages due to the litigation privilege defense.The United States Court of Appeals for the Ninth Circuit reversed the district court’s summary judgment in favor of Schrader Cellars on its claim for declaratory relief and Roach’s counterclaims, finding triable issues of fact regarding whether Roach rebutted the presumption of undue influence. The appellate court also held that the district court erred in concluding and instructing the jury that Roach breached his fiduciary duties. However, the Ninth Circuit affirmed the district court’s judgment after trial, concluding that the erroneous jury instruction had no effect on the outcome because the jury found that the gravamen of the breach of fiduciary duty claim was based on Roach’s filing of the Texas lawsuit, which was barred by the California litigation privilege. View "SCHRADER CELLARS, LLC V. ROACH" on Justia Law

Gina Champion-Cain operated a Ponzi scheme through her company ANI Development, LLC, defrauding over 400 investors of approximately $389 million. The SEC initiated a civil enforcement action, freezing Cain’s and ANI’s assets, appointing a receiver for ANI, and temporarily staying litigation against ANI. Defrauded investors then sued third parties, including Chicago Title Company and the Nossaman law firm, alleging their involvement in the scheme.The United States District Court for the Southern District of California approved a global settlement between the Receiver and Chicago Title, which included a bar order preventing further litigation against Chicago Title and Nossaman related to the Ponzi scheme. Kim Peterson and Ovation Fund Management II, LLC, whose state-court claims against Chicago Title and Nossaman were extinguished by the bar orders, challenged these orders.The United States Court of Appeals for the Ninth Circuit reviewed the case. The court held that the district court had the authority to enter the bar orders because the claims by Peterson and Ovation substantially overlapped with the Receiver’s claims, seeking recovery for the same losses stemming from the Ponzi scheme. The bar orders were deemed necessary to protect the ANI receivership estate, as allowing the claims to proceed would interfere with the Receiver’s efforts and deplete the receivership’s assets.The Ninth Circuit also concluded that the Anti-Injunction Act did not preclude the bar orders, as they were necessary in aid of the district court’s jurisdiction over the receivership estate. The court rejected Peterson’s argument that the bar order was inequitable, noting that Peterson had the opportunity to file claims through the receivership estate but was determined to be a net winner from the Ponzi scheme. Consequently, the Ninth Circuit affirmed the district court’s bar orders. View "USSEC V. CHICAGO TITLE COMPANY" on Justia Law