Massachusetts SJC: Rule 23 Governs Wage Act Claims, Rejected Offers of Judgment Do Not Moot Claims, and More

Every now and then a case comes along that rewards us class action nerds with an embarrassment of riches. Gammella v. P.F. Chang’s China Bistro, Inc., decided last week by the Massachusetts Supreme Judicial Court, is one such case. In it, the Court addressed a number of important class certification issues, some unique to Massachusetts law, and some that have close federal procedural analogues. And its resolution of those issues offers something to both plaintiffs and defendants.

Gammella is a wage and hour case. Plaintiff brought a claim under the Massachusetts Wage Act and the minimum fair wage law for his employer’s alleged violations of the “reporting pay” provision of Massachusetts regulations which, the Court explains, “requires employers to pay employees three hours’ wages at no less than the minimum wage if they report for a scheduled shift of three or more hours but are involuntarily dismissed before they have worked three hours.” He alleged that, on numerous occasions, he reported to work at

A Class Settlement Checklist

Practice area:

Having heard good things about it for years, last month I finally got around to reading Dr. Atul Gawande’s book, The Checklist Manifesto, and have begun to give some thought regarding its application to class action practice. Proposed class action settlements are currently occupying much of my time, and my usual practice when drafting the settlement agreements is to draw upon lengthy agreements I have negotiated before.  However, after reading Dr. Gawande’s opus, it occurred to me that a short, simple checklist would likely be a helpful tool in considering the most commonly recurring terms of class action settlements. With the book as inspiration, I offer the following as a first, high-level attempt at a simple class settlement checklist, one which can be expanded, refined, and otherwise improved upon. Each item on the checklist is followed by a little clarification of what it entails. Taken together, the items represent the basic provisions of many class action settlements, but each case is different, and settlements of

Questions Regarding Cy Pres Settlements Remain after Frank v. Gaos

Today, in a case that was being watched closely for its potential ramifications for class settlements, the Supreme Court opted not to address the merits of the cy pres issues that were presented to it.  Frank v. Gaos involved a settlement that would have distributed millions of dollars to cy pres recipients and class counsel, but no money to class members.  Objectors complained that the settlement did not comply with the requirement that class settlements be “fair, reasonable and adequate,” and the Supreme Court granted certiorari to resolve that issue.  It ultimately did not.

Instead, the Supreme Court, in a per curiam decision, vacated and remanded for the lower courts to address whether the named plaintiff had Article III standing in light of Spokeo, Inc. v. Robins.  After the district court rejected the argument the plaintiff lacked injury and thus standing to pursue its claim that Google violated federal law by

Supreme Court Unanimously Rejects Equitable Tolling of Rule 23(f)’s Time Limit to Petition for Interlocutory Appeal

Yesterday, the Supreme Court in Nutraceutical Corp. v. Lambert unanimously held that Rule 23(f) is not subject to equitable tolling. After the District Court for the Central District of California decertified a class of consumers who alleged that Nutraceutical’s marketing of a dietary supplement violated California consumer-protection law, plaintiff Lambert filed a motion for reconsideration, which the court subsequently denied. Fourteen days later, Lambert petitioned the Ninth Circuit Court of Appeals for permission to appeal the decertification order under Rule 23(f). Nutraceutical opposed Lambert’s petition, arguing that it was untimely because more than four months had passed since the court’s decertification order. The Court of Appeals, however, deemed the petition timely and accepted the appeal, stating that the Rule 23(f) fourteen-day deadline should be equitably tolled under the circumstances as the time limit is “non-jurisdictional, and that equitable remedies softening the deadline are therefore generally available,” and Lambert had acted diligently in moving for reconsideration and subsequently filing his petition within fourteen days after

In re Celexa and Lexapro – The First Circuit Weighs in on China Agritech and American Pipe Tolling

The Supreme Court meant what it said in China Agritech, Inc. v. Resh – that is the primary lesson from the First Circuit’s January 30th decision in In re Celexa and Lexapro Marketing and Sales Practices Litigation.  As my partner, Don Frederico, explained in a blog post last year, the Supreme Court observed in China Agritech that its prior ruling in American Pipe & Constr. Co. v. Utah “tolls the statute of limitations during the pendency of a putative class action, allowing unnamed class members to join the action individually or file individual claims if the class fails.”  China Agritech went on to hold that “American Pipe does not permit the maintenance of a follow-on class action past expiration of the statute of limitations.”  The First Circuit, in In re Celexa and Lexapro, rejected a plaintiff’s attempt to read China Agritech narrowly.

Amendments to Rule 23 Now in Full Swing

On December 1, 2018, the amendments to Fed. R. Civ. P. 23 took effect, principally altering portions of the Rule governing class action notice, settlement, and appeals. Although the amendments were approved earlier in 2018 by the United States Supreme Court, they had been in the works for some time.

In 2014, a subcommittee of the Advisory Committee on Civil Rules met with class action attorneys from both the plaintiffs’ and defense bar all across the country in a series of meetings, seeking input on amendments to Rule 23. One such meeting was held in October 2014 during the ABA’s National Institute on Class Actions, a two-day conference well-attended by counsel in private practice, in-house counsel, academics, and reporters from class action news services. Those of us in attendance had the opportunity to offer the subcommittee suggestions on how to amend the Rule to better address problems we encounter in practice, such as cy pres awards, professional objectors, and issue classes. Fast-forward four years later, and

In re Asacol Antitrust Litigation: Article III Standing in Multi-State Class Actions

In his October 17th post, Josh Dunlap describes in detail the First Circuit’s landmark ruling in In re Asacol Antitrust Litigation concerning classes that include uninjured members. As Josh points out, although the district court had referred to ascertainability in its decision certifying the class, the First Circuit opinion reversing class certification did not, and for good reason. The case did not raise an ascertainability issue at all, but rather an issue of an overly broad class definition that encompassed significant numbers of uninjured class members (the court estimated 10 percent of potential class members had not been harmed because they would have purchased the branded drug even had the generic been allowed on the market). The ill-fated class was defined to include all purchasers of the defendant’s product, not just all such persons who would have purchased the generic alternative. Presumably, all purchasers of the drug could have been identified through prescription records, but plaintiffs failed to show that it

In re Asacol Antitrust Litigation – An Antidote to In re Nexium and “Ascertainability-by-Affidavit”

When last I wrote about ascertainability, I noted that a debate over the propriety of “ascertainability-by-affidavit” continued to percolate within the First Circuit even as lower courts relied on In re Nexium Antitrust Litigation to certify classes containing uninjured class members.  Specifically, I noted a couple of developments.  First, in In re Asacol Antitrust Litigation, Judge Casper of the District of Massachusetts had rejected defendants’ ascertainability arguments and certified a class containing uninjured individuals, relying on In re Nexium for the proposition that uninjured individuals could be identified and excluded after certification via submission of affidavits.  Second, I also observed that Judge Kayatta had continued, via his dissent from denial of a Rule 23(f) petition in In re Dial Complete Marketing and Sales Practices Litigation, to express concern about the “casual reliance on ‘say-so’ affidavits” apparently sanctioned by In re Nexium.  In his words, the First Circuit

In Cullinane v. Uber, First Circuit Addresses Arbitration Clauses in Online Contracts

Yesterday the First Circuit weighed in on a hot topic – the enforceability of arbitration provisions in online contracts.  In Cullinane, several plaintiffs brought a putative class action alleging that Uber had violated Massachusetts’ consumer protection statute by assessing certain fees.  Uber filed a motion to compel arbitration under its Terms of Service, which contained an arbitration provision and class action waiver.  After the district court granted the motion, the First Circuit reversed, finding the arbitration provision unenforceable because Uber did not make its Terms of Service sufficiently conspicuous when its customers created a ride-sharing account.  Cullinane underscores the importance of obtaining customers’ affirmative consent to an online contract.

At the outset, the First Circuit acknowledged that the Federal Arbitration Action places arbitration provisions upon the same footing as other contract provisions. It also emphasized that arbitration is a matter of contract and that a valid contract must exist in order for the arbitration provision to be enforced.  The