class actions

  • August 20, 2019

Even With Common Questions, Chapter 93A Deceptive Marketing Claims Are Ill-Suited for Class Treatment

Class Certifications, Class Representative, Consumer Class Actions, US District Court - Mass
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Earlier this month, in Plastic Surgery Associates, SC v. Cynosure, Inc., United States District Judge Denise Casper denied plaintiffs’ motion for class certification and allowed Cynosure’s motion for summary judgment on claims arising from the marketing of a medical device intended to reduce body fat. The decision provides a searching and instructive analysis of the standards for class certification under Fed. R. Civ. P. 23, particularly for claims under Massachusetts’s consumer protection law, Mass Gen. L. c. 93A (“Chapter 93A”).

In Cynosure, plaintiffs purported to represent a class of all U.S.-based purchasers and lessees of the same medical device over a four-year period. Over 1,400 customers, mostly plastic surgeons and medical spas, had purchased the device for approximately $165,000 each. Plaintiffs each claimed they were harmed by the alleged deceptive marketing of the devices. Invoking Rule 23(c)(4), plaintiffs asked the Court to certify four issues for their Chapter 93A claim, including whether Cynosure

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  • May 20, 2019

Yan v. ReWalk Robotics, Ltd.: No Substitute for Standing in the District of Massachusetts

Class Representative, Lead Plaintiff, Securities Class Actions, Standing, US District Court - Mass
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On May 16, 2019, the District of Massachusetts denied a lead plaintiff’s motion to amend a complaint that sought to overcome standing deficiencies of the original class representative by adding a new named plaintiff. The Court dismissed the putative class action without prejudice, holding that if a class action has only one representative, and that party does not have standing, the Court lacks jurisdiction over the case and cannot permit the lead plaintiff substitution.

In Yan v. ReWalk Robotics, Ltd., lead plaintiff Wang Yan brought a putative class action for alleged violations of the Securities Act of 1933 and the Exchange Act of 1934 in connection with the company’s 2014 initial public offering. In a class action complaint filed in 2017, Yan claimed that ReWalk concealed material information in its IPO documents concerning a failure to comply with FDA regulations and continued to make materially false statements after the IPO. In August 2018, the Court granted the

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  • April 24, 2019

Lamps Plus, Inc. v. Varela: Class Arbitration Must Be Expressly Authorized

Class Arbitration, Supreme Court
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Class arbitration came back before the Supreme Court this term in Lamps Plus, Inc. v. Varela.  Today, the Supreme Court issued a 5-4 decision in Lamps Plus, holding that, under the Federal Arbitration Act, “courts may not infer from an ambiguous agreement that parties have consented to arbitrate on a classwide basis.”  Rather, class arbitration must be expressly authorized by contract.

The facts of Lamps Plus are straightforward.  An employee had signed an arbitration agreement upon being hired to work for Lamps Plus.  After a data breach, the employee sued Lamps Plus in federal court.  Lamps Plus filed a motion to compel individual arbitration, and the district court granted the motion to compel but authorized arbitration on a class basis.  The Ninth Circuit affirmed, reasoning that the arbitration provision was ambiguous as to class arbitration and must be construed against the employer under California’s contra proferentem rule that ambiguities in a contract must be

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  • March 20, 2019

Questions Regarding Cy Pres Settlements Remain after Frank v. Gaos

Class Action Settlements, Supreme Court
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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

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  • February 19, 2019

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

Class Certifications, First Circuit Decisions
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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.

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  • November 06, 2018

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

Antitrust Class Actions, Class Certifications, First Circuit Decisions, Jurisdiction
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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

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  • October 17, 2018

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

Antitrust Class Actions, First Circuit Decisions, US District Court - Mass
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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

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  • May 23, 2018

Supreme Court Affirms Class Action Waivers in Employment Arbitration Agreements

Class Arbitration, Employment Class Actions, Supreme Court
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Since the Federal Arbitration Act’s (FAA) enactment in 1925, parties have sparred over the enforceability of arbitration agreements in a number of contexts. In recent years, the battle has focused on the enforceability of class or collective action waivers, pursuant to which parties agree to forgo their right to proceed on a class basis and to pursue claims in arbitration on an individual basis instead. Between 2011 and 2013, the United States Supreme Court issued several opinions enforcing class action waivers in the consumer context, but none dealt with employment arbitration agreements. On Monday, the United States Supreme Court removed any doubt that class or collective action waivers contained in employment arbitration agreements are enforceable, affirming a potential cure for the employment class action epidemic.

The argument that employment class action waivers are different from consumer class action waivers derives from Section 7 of the National Labor Relations Act (NLRA), which guarantees employees the right to engage in collective activities

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  • February 14, 2018

Federal District Courts Tackle Application of Bristol-Myers Squibb Co. v. Superior Court to Class Actions

Jurisdiction
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In June 2017, we wrote about the Supreme Court’s decision in Bristol-Myers Squibb Co. v. Superior Court, 137 S. Ct. 1773 (2017) and how it would likely affect attempts by plaintiffs to pursue multi-state or nationwide class actions.  As predicted, the case law is rapidly developing in the district courts, where, in reliance on Bristol-Myers’ holding, defendants challenge courts’ jurisdiction in cases where non-resident plaintiffs assert claims against non-resident defendants not subject to general jurisdiction.

We expect the post-Bristol-Myers landscape will continue to evolve and at some point, the various Circuit Courts of Appeals will begin weighing in.  Until then, below we provide a brief overview of recent notable district court decisions on this topic.  As this overview shows, the majority of courts have held that under Bristol-Myers, they do not have personal jurisdiction over the non-resident defendants with regard to claims brought by the non-resident plaintiffs.

Courts have taken

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  • July 03, 2017

Justice Thomas’ Concurring Opinion in Microsoft Corp. v. Baker: A Useful Reminder

Appeals, Jurisdiction, Supreme Court
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On June 12th, the Supreme Court issued its unsurprising decision in Microsoft Corp. v. Baker, addressing a relatively recent twist concerning the appealability of orders denying class certification.  The case resulted in unanimous agreement among the eight Justices who participated in it (Justice Gorsuch did not participate), but a five-three split among them as to whether the case should be decided on statutory grounds (supported by the majority) or constitutional grounds (supported by the minority).  In the course of the debate over the decision’s rationale, Justice Thomas penned a paragraph that serves as a useful reminder concerning the nature of putative class litigation.

Of all the Court’s class certification cases, this must have been one of the easiest to decide.  Put simply, the district court struck plaintiffs’ class allegations from the complaint, based on a class certification denial in an earlier case raising the same claims.  After plaintiffs unsuccessfully petitioned the Ninth Circuit for interlocutory review under Rule 23(f), they were left with

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