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
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
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
As various contributors to this blog have noted (here, here, and here), a divided panel of the First Circuit adopted a “loose” approach to the ascertainability requirement in In re Nexium Antitrust Litigation. Specifically, while acknowledging that “the definition of [a] class must be ‘definite,’” the majority concluded that this requirement could be satisfied by a claims process by which class members would submit affidavits to show that they were injured. According to the majority, such a process would be sufficiently feasible and protective of the defendants’ Seventh Amendment and due process rights. Judge Kayatta authored a vigorous dissenting opinion, noting the “limitations of using affidavits in the manner proposed by the majority.”
Recently, the District of Massachusetts relied on In re Nexium to find that a proposed class was sufficiently ascertainable under similar circumstances. In that case, In re Asacol Antitrust Litigation, end-payor purchasers of
On July 26th, the First Circuit issued rulings in putative consumer class actions brought by the same attorney against two national department store chains, challenging their allegedly deceptive use of comparative pricing on their in-store price tags. In the first case, brought against Nordstrom, the court engaged in a careful review of a series of Massachusetts decisions interpreting the state’s consumer protection act, Massachusetts General Laws chapter 93A. In the second case, against Kohl’s, the court continued the analysis to fill a procedural gap left open in the first case. In the end, the court reinforced the Massachusetts cases holding that proof of an unfair or deceptive act or practice, without more, is not sufficient to support a claim under the Massachusetts statute. Rather, plaintiffs must also prove that the violation caused them harm. Because plaintiffs in these cases did not allege that products themselves were other than represented, but only that they subjectively believed that they were getting a good bargain, the court held that they failed
First Circuit Affirms Tough Standard for Alleging Securities Fraud; Revives One Claim Against Local Drug Maker
On November 28, 2016, the First Circuit upheld the dismissal of all but one of the class action securities fraud claims against Cambridge, MA drug company, ARIAD Pharmaceuticals, Inc., reaffirming the exacting pleading standards that enable defendants to put an early end to reflexive stock-drop lawsuits. In doing so, the First Circuit also adopted strict requirements for asserting claims that defendants misled investors in a common stock offering.
In In re ARIAD Pharmaceuticals, Inc. Securities Litigation, shareholder plaintiffs appealed the District of Massachusetts’ dismissal of the federal securities fraud claims against ARIAD based on optimistic statements the company’s executives made about the prospects of ARIAD’s experimental leukemia drug, ponatinib, which ultimately did not fare so well in FDA trials. The First Circuit largely affirmed the district court’s dismissal, holding that the complaint failed to raise a compelling inference that the company’s executives acted with scienter—or intent to defraud. The appellate court did, however, revive a claim related to “one particular alleged
On October 2, 2015, we posted about the District of Massachusetts’ denial of class certification in a case in which we represent a building products company that sold allegedly defective decking. We’re pleased to report that yesterday the First Circuit denied Plaintiffs’ petition for review of the class certification denial under Rule 23(f).
On December 31st, the First Circuit approved a class action settlement in a case involving claims of deceptive advertising. While breaking no new ground, the court’s decision provides useful guidance to parties negotiating a class settlement.
In a decision issued on August 21, 2015, the First Circuit added its voice to the recent chorus of federal appellate courts holding that an unaccepted Rule 68 offer of judgment, served before a motion for class certification and offering the named plaintiff all the relief it could potentially recover on its individual claim, did not render the plaintiff’s claim moot, and therefore did not moot the putative class action.
As my colleague Don Frederico noted in his January 24th post, a divided First Circuit panel recently affirmed the district court’s class certification decision in In re Nexium Antitrust Litigation. In so doing, the First Circuit weighed in on a critical issue that arises in many class cases: is class certification proper where certain members of the class have not suffered injury?