Justia U.S. 8th Circuit Court of Appeals Opinion Summaries

After the merger of NationsBank and BankAmerica, shareholders filed class actions alleging violations of securities laws. The district court appointed Oetting as lead plaintiff and the Green law firm, as lead counsel. The litigation resulted in a $333 million settlement for the NationsBank class. The Eighth Circuit affirmed approval of the settlement over Oetting’s objection. On the recommendation of Green, the court appointed Heffler as claims administrator. A Heffler employee conspired to submit false claims, resulting in fraudulent payment of $5.87 million. The court denied Green leave to file a supplemental complaint against Heffler. Oetting filed a separate action against Heffler that is pending. After distributions, $2.4 million remained. Green moved for distribution cy pres and requested an additional award of $98,114.34 in attorney’s fees for post-settlement work. Oetting opposed both, argued that Green should disgorge fees for abandoning the class, and filed a separate class action, alleging malpractice by negligently hiring and failing to supervise Heffler and abandonment of the class. The court granted Green’s motion for a cy pres distribution and for a supplemental fee award and denied disgorgement. The Eighth Circuit reversed the cy pres award, ordering additional distribution to the class, and vacated the supplemental fee award as premature. The district court then dismissed the malpractice complaint, concluding that Oetting lacked standing. The Eighth Circuit affirmed that collateral estoppel precluded the rejected disgorgement and class-abandonment claims; pendency of an appeal did not suspend preclusive effects. View "Oetting v. Norton" on Justia Law

The plaintiffs obtained second mortgage loans on their homes through Bann-Cor. After Bann-Cor executed their loan agreements, it sold or assigned the loans and the accompanying mortgage liens to the defendants. The borrowers alleged that the defendants, either directly or indirectly, charged, contracted for, or received fees that were impermissible under the Missouri Second Mortgage Loan Act. About 15 years ago, the borrowers first filed suit in Missouri state court against Bann-Cor. The borrowers periodically sought leave to amend the complaint and add additional defendants. After two removals to federal court and two remands, the borrowers filed their sixth amended complaint in 2010, which for the first time added Wells Fargo as a party. Wells Fargo removed the case to federal court under the Class Action Fairness Act, and the district court denied the borrowers’ motion to remand. The Eighth Circuit affirmed the subsequent dismissal on grounds that the borrowers lacked standing to pursue their claims against defendants who did not personally service their loans and that a three-year statute of limitations barred the action against remaining defendants. View "Wong v. Bann-Cor Mortgage" on Justia Law

An estimated 1,600 Missouri homeowners obtained second mortgage loans from FirstPlus, a now-defunct California company. After issuing the loans, FirstPlus sold and assigned the loans and second mortgages to the defendants. In a putative class action, the borrowers alleged that FirstPlus and the defendants violated the Missouri Second Mortgage Loan Act (MSMLA) by collecting impermissible fees which were rolled into and financed as part of the borrowers’ principal loan amount. The district court dismissed, concluding the claims were barred by a three-year statute of limitations and the action is not saved under class action tolling principles. The Eighth Circuit affirmed. In 2000, a different set of named borrowers had started a Missouri state court action based on the same MSMLA claims against FirstPlus. The state court granted summary judgment to the defendants in that action, concluding that there was no cause of action under MSMLA. The court rejected borrowers’ argument that they were members of that putative class and that their claims in this action should be tolled from the filing of that action in 2000 until its dismissal in 2004. View "Thomas v. US Bank NA ND" on Justia Law

In 2011, the IRS required tax preparers who were neither attorneys nor CPAs to pass a certification exam and obtain an identification number. H&R, a nation-wide tax service, passed anticipated costs to its customers by charging a “Compliance Fee.” H&R explained at its offices and on its website that the fee would cover only the costs to comply with the new laws. In 2011, the fee was $2; in 2012, the fee was $4. Perras sued on behalf of himself and a putative class. Perras alleged that the amount collected exceeded actual compliance costs. Perras sued under the Missouri Merchandising Practices Act. The district court compelled arbitration of the 2011 claims. Later, the court declined to certify the class, agreeing that the proposed class met the requirements under Federal Rule of Civil Procedure 23(a) of “numerosity, commonality, typicality, and fair and adequate representation,” but Rule 23(b)(3), requires that “the questions of law or fact common to class members predominate over any questions affecting only individual members.” The Eighth Circuit affirmed, reasoning that the Supreme Court of Missouri would likely conclude that the MMPA does not cover the out-of-state transactions. The law applicable to each class member would be the consumer-protection statute of that member’s state; questions of law common to the class members do not predominate over individual questions. View "Perras v. H&R Block" on Justia Law

In 2012 the Golans received two unsolicited, prerecorded messages on their home phone line. Each message, recorded by Mike Huckabee, stated: "Liberty. This is a public survey call. We may call back later." The Golans had not answered the phone; more than one million people did and received a much longer message. The Golans filed a putative class action, alleging that the phone calls were part of a telemarketing campaign to promote the film, Last Ounce of Courage, in violation of the Telephone Consumer Protection Act, 47 U.S.C. 227, and the Missouri Do Not Call Law. The district court dismissed with prejudice, concluding that the Golans did not have standing and were inadequate class representatives, being subject to a "unique defense" because they had heard only the brief message recording on their answering machine. The Eighth Circuit reversed and remanded. The calls were initiated and transmitted in order to promote Last Ounce of Courage and qualified as "telemarketing" even though the messages never referenced the film. Because the purpose of the calls was the critical issue, the Golans were not subject to a unique defense. Nor did they suffer a different injury than class members who heard the entire message. View "Golan v. Veritas Entm't, LLC" on Justia Law

In 2002, ESI acquired NPA, which provided pharmacy-benefit-management services to health funds created by the police union. In 2003, those funds brought a class action against ESI and NPA. The funds had never contracted with ESI. In 2004, the New York Attorney General sued ESI, resulting in a consent judgment. Based on that consent judgment, ESI moved for summary judgment in the funds’ suit. The district court granted ESI’s motion, applying res judicata. The Eighth Circuit reversed and remanded. ESI argued that the AG “alleged claims on behalf of the” funds, but the funds were not parties to the AG’s suit, nor did the AG allege claims on their behalf. The AG complaint referred to “other New York government plans,” meaning “counties and municipalities that contract with ESI.” The funds did not contract with ESI and are neither a county nor a municipality. They are private trusts. Their trustees are union officers, not city officials with whom they bargain. View "Lynch v. Nat'l Prescription Admin." on Justia Law

A class action complaint alleged that for many years the commercial filmmaking wing of the NFL used the names, images, likenesses, and identities of former NFL players in videos to generate revenue and promote the NFL. It asserted claims for false endorsement (Lanham Act, 15 U.S.C. 1125), common law and statutory rights of publicity claims under several states' laws, and unjust enrichment. The court approved a settlement calling for: creation of the Common Good Entity, a non-profit organization; payment of up to $42 million to the Common Good Entity over eight years; establishment of the Licensing Agency; payment of $100,000 worth of media value to the Licensing Agency each year until 2021; (5) Payment of attorneys' fees and settlement administration expenses; a reserve for the NFL's potential fees and costs involving class members who opt out; and class members' perpetual release of claims and publicity rights for the NFL and related entities to use. The Common Good Entity is "dedicated to supporting and promoting the health and welfare of Retired Players and other similarly situated individuals." Six players (the class had about 25,000 members) objected. The Eighth Circuit affirmed, finding the settlement fair, reasonable, and adequate despite not providing for a direct financial payment to each class member. View "Marshall v. Nat'l Football League" on Justia Law

Former and current employees filed a class action lawsuit in state court against Gilster and other defendants, alleging lung impairment (or potential lung impairment) from exposure to butter-flavoring products, including diacetyl, used in Gilster’s microwave popcorn packaging plant in Jasper, Missouri. Defendants removed the action to federal court. Six weeks later, the employees dismissed all defendants except Gilster. The district court ordered a remand to state court based on the Class Action Fairness Act’s local-controversy exception, 28 U.S.C. 1332(d)(4), under which, a court is required to decline jurisdiction when “greater than two-thirds of the members of all proposed plaintiff classes in the aggregate are citizens of the State in which the action was originally filed,” determined as of the date of the filing. The district court permitted discovery on state citizenship. For all of the potential class members, except the current employees, plaintiffs provided only last-known addresses, some 27 years old, and did not identify state citizenship. The court ultimately found that 41 percent of potential class members were Missouri citizens. The Eighth Circuit reversed. Because the employees did not meet their burden of proof that a CAFA exception applies, the court erred by resolving doubt in favor of the party seeking remand. View "Hood v. Gilster-Mary Lee Corp." on Justia Law

Stratus Franchising sells master franchises, which grant a master franchiser the exclusive right to sell Stratus unit franchises in a particular regional market. Each plaintiff (current or former unit franchisees of the commercial cleaning business) entered into a standard unit-franchise agreement that included a broad, standard-form arbitration provision. They filed a putative class-action suit against their respective master franchisers and other individuals and entities associated with the Stratus Group, alleging violations of the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. 1961-1968. Applying Missouri contract law, the district court granted the Stratus Group’s motion to compel individual arbitration. The Eighth Circuit affirmed, rejecting an argument that the arbitration provision was unenforceable as unconscionable and that members of the Stratus Group who were not signatories to their respective Agreements could not invoke or enforce the arbitration provision. View "Torres v. Simpatico, Inc." on Justia Law

Alleging illegal tip pooling Conners filed a collective action against her former employer (a restaurant) under the Fair Labor Standards Act, 29 U.S.C. 216(b). The employer then implemented a new arbitration policy that requires all employment-related disputes between current employees and the employer to be resolved though individual arbitration. The policy purports to bind all current employees who did not opt out; each employee received an opt-out form. Citing public policy, the district court declared the policy unenforceable insofar as it could prevent current employees from joining this collective action. On interlocutory appeal, the Eighth Circuit vacated, holding that former employees like Conners lack standing under Article III of the United States Constitution to challenge the arbitration agreement, which applied only to current employees. View "Conners v. Gusano's Chicago Style Pizzeria" on Justia Law