The Ninth Circuit recently struck a blow against plaintiffs’ attorneys’ ability to recover handsome attorney’s fee awards in class action settlements when there is little actual benefit to the class. In Lowery v Rhapsody International, Inc., No. 22-15162 (9th Cir. June 7, 2023), a Ninth Circuit panel reversed the U.S. District Court for the Northern District of California’s award of $1.7 million in attorney’s fees to plaintiffs’ counsel in a copyright class action, finding that the fee award was not reasonable when compared to the class’ actual recovery of $52,841, without any injunctive relief.Continue Reading Ninth Circuit Slashes Exorbitant Attorney’s Fee Award That Would “Make the Average Person Shake Her Head in Disbelief”
Anna McLean is a partner in the Business Trial Practice Group. She is a Leader of the firm’s Class Action Defense Team.
In Brice v. Haynes Investments LLC, No. 19-15707 (9th Cir. Sept. 16, 2021), the Ninth Circuit considered an appeal by shareholders in Native American tribe-linked online lenders of a district court order denying the shareholders’ motion to compel arbitration. The Ninth Circuit reversed the order because, under the terms of the parties’ agreement, the enforceability of the arbitration agreement was a question for the arbitrator, not the judge, to decide.
Continue Reading Class Action Waivers Redux: Ninth Circuit Upholds Arbitration Provision Delegating Enforceability Determination to Arbitrator
The Supreme Court further limited consumer lawsuits in TransUnion, LLC v. Ramirez, siding with credit reporting agency TransUnion in a 5-4 decision holding that thousands of consumers improperly flagged as potential terrorists do not have standing to sue the company for damages. TransUnion expands upon Spokeo, Inc. v. Robins, 2578 U.S. 330, 340 (2016) in limiting standing under the Fair Credit Reporting Act (FCRA) and Article III to plaintiffs who have suffered a concrete harm, not just the violation of a statutory right. As a practical matter, TransUnion significantly narrows plaintiffs’ ability to assert claims in federal court on behalf of broad classes without proving a concrete injury to each member.
Continue Reading Supreme Court Addresses Class Action Standing in Ramirez Case: Requires “Concrete” Injury for Article III Standing for Class Members
The U.S. Supreme Court granted certiorari on December 16, 2020 in TransUnion, LLC v. Ramirez on the question of “[w]hether either Article III or Rule 23 permits a damages class action where the vast majority of the class suffered no actual injury, let alone an injury anything like what the class representative suffered.” Ramirez will give the high court the opportunity to clarify how Article III standing requirements apply to class members in class actions.
Continue Reading Supreme Court to Address Class Action Standing in Ramirez Case: To Recover, Must Absent Class Members Establish Actual Injury?
Reversing itself in a 7-4 en banc decision, the Ninth Circuit reinstated a $210 million settlement in multidistrict class action litigation over the advertised fuel efficiency of Hyundai and Kia vehicles, making approval of nationwide class action settlements easier. In re Hyundai and Kia Fuel Economy Litigation, 2019 U.S. App. LEXIS 17047 at *5 (9th Cir. 2019). In its decision, the Ninth Circuit applied a lower standard to Rule 23(b)(3) predominance analysis in the settlement context—as opposed to a contested class certification motion—for issues of choice-of-law and reliance under state consumer protection statutes. Judge Ikuta argues in dissent that this may not be consistent with controlling Supreme Court precedent, Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 623 (1997).
Continue Reading Ninth Circuit Fuels More Efficient Nationwide Class Settlement
Companies may be inclined to offer “coupons” or similar benefits to settle consumer class actions. While offering coupons is permissible, in In re Easysaver Rewards Litigation, No. 16-56307, 2018 U.S. App. LEXIS 28000 (9th Cir. Oct. 3, 2018), the Ninth Circuit has reaffirmed that the full face value of coupons cannot be included when calculating the total value of the settlement, which may reduce the attorneys’ fees awarded to Plaintiffs’ class counsel.
Continue Reading Are credits coupons? The Ninth Circuit Says Yes in Calculating Total Value of Class Action Settlements
In In re Hyundai & Kia Fuel Economy Litigation, No. 15-56014, 2018 WL 505343 (9th Cir. Jan. 23, 2018), the Ninth Circuit vacated a nationwide class action settlement, concluding that the district court’s failure to conduct a choice-of-law analysis precluded a finding that common issues predominated.
Continue Reading Ninth Circuit Slams the Brakes on Nationwide Class Action Settlement; Choice of Law and Reliance Are Bumps in the Road
On April 6, 2017, the California Supreme Court struck another blow in its contentious battle with the United States Supreme Court on the enforceability of consumer arbitration clauses subject to the Federal Arbitration Act (FAA). In McGill v. Citibank, N.A., No. S224086, Slip Op. at 1 (Cal. Apr. 6, 2017), the Court held that an arbitration clause in Citibank’s credit card agreement purporting to waive the plaintiff’s right to seek public injunctive relief under the Consumers Legal Remedies Act (CLRA), the Unfair Competition Law (UCL), or the False Advertising Law (FAL) in any forum was unenforceable as against California public policy. The Court further held that, notwithstanding the U.S. Supreme Court’s decisions on the subject, including in AT&T Mobility v. Concepcion, 131 S. Ct. 1740, 1747 (2011), the FAA did not preempt California’s policy. As discussed below, these holdings are troubling and likely inconsistent with federal law.
Continue Reading Dancing On Their Own: The California Supreme Court’s Decision in McGill v. Citibank, N.A. that Class Action Waivers Do Not Apply to Claims for Public Injunctive Relief under California’s Consumer Protection Laws
On December 15, 2014, the United States Supreme Court resolved a circuit split in holding that a defendant need not supply evidence of the amount in controversy in its notice of removal under the Class Action Fairness Act (“CAFA”). In Dart Cherokee Basin Operating Co. v. Owens, No. 13-719, 574 U.S. __ (2014), the plaintiff, Owens, filed a putative class action in Kansas state court alleging defendants had underpaid royalties to putative class members under certain oil and gas leases. The defendant, Dart, filed a notice of removal with the U.S. District Court for the District of Kansas pursuant to CAFA. To establish diversity jurisdiction under CAFA, defendants must show, among other things, that the amount in controversy exceeds $5 million.
Continue Reading No Proof Necessary: SCOTUS Rules Defendant’s Notice Of Removal Under CAFA Need Not Include Evidence of The Amount In Controversy
Beyond the usual substantive advice—maintaining effective compliance and document management systems, for example—our class action defense team suggests that companies implement the following relatively straightforward procedural tips to avoid class actions.
Continue Reading Top Five Tips For Minimizing The Risk of Class Action Litigation