Justia U.S. 5th Circuit Court of Appeals Opinion Summaries

Articles Posted in Class Action
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Plaintiffs allege that Boeing and Southwest Airlines defrauded them by, among other things, concealing a serious safety defect in the Boeing 737 MAX 8 aircraft. The district court certified four classes encompassing those who purchased or reimbursed approximately 200 million airline tickets for flights that were flown or could have been flown on a MAX 8.In reviewing Defendants' interlocutory appeal, the Fifth Circuit reversed the district court. The court found that Plaintiffs lacked Article III standing because they failed to allege any concrete injury. View "Earl v. Boeing" on Justia Law

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Two former students of Tulane University, on behalf of a putative class of current and former students, sued the University for failing to provide a partial refund of tuition and fees after Tulane switched from in-person instruction with access to on-campus services to online, off-campus instruction during the COVID-19 pandemic. The district court agreed with Tulane that the student's complaint should be dismissed for failure to state a claim.   The Fifth Circuit reversed and remanded. The court concluded that the claim is not barred as a claim of educational malpractice because the Students do not challenge the quality of the education received but the product received. Second, the court rejected Tulane’s argument that the breach-of-contract claim is foreclosed by an express agreement between the parties because the agreement at issue plausibly does not govern refunds in this circumstance. And third, the court concluded that Plaintiffs have not plausibly alleged that Tulane breached an express contract promising in-person instruction and on-campus facilities because Plaintiffs fail to point to any explicit language evidencing that promise. But the court held that Plaintiffs have plausibly alleged implied-in-fact promises for in-person instruction and on-campus facilities. Moreover, the court found that the Students’ alternative claim for unjust enrichment may proceed at this early stage. Finally, genuine disputes of material fact regarding whether Plaintiffs saw and agreed to the A&DS preclude reliance on the agreement at this stage. Thus, Plaintiffs have plausibly alleged a claim of conversion. View "Jones v. Admin of the Tulane Educ" on Justia Law

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BP Corporation North America Inc. (“BP America”) a Defendant-Appellee in this action, acquired Standard Oil of Ohio (“Sohio). BP America converted the Sohio Plan into a new plan called the BP America Retirement Plan (the “ARP”). The ARP was also a defined benefit plan that retained the formula used by the Sohio Plan to calculate its members’ pension distributions. BP America converted the ARP into the BP Retirement Accumulation Plan (the “RAP,” the conversion from the ARP to the RAP as the “Conversion,” and the date of the Conversion as the “Conversion Date”), the other Defendant-Appellee in this action. Plaintiffs-Appellees, two Sohio Legacy Employees, (the “Guenther Plaintiffs”) filed a class action complaint against the RAP and BP America.   Four years after the Guenther Plaintiffs filed their original complaint, Movant-Appellant, along with 276 other individuals (the “Press Plaintiffs”) moved to intervene in the Guenther Action “for the purpose of objecting” to the magistrate judge’s recommendation. Press Plaintiffs contend that the certified class in the Guenther Action inadequately represents their interests, and therefore, they have a right to intervene in this case.   The Fifth Circuit affirmed the district court’s ruling denying the intervention. The court held that the Press Plaintiffs cannot demonstrate that their interests diverge from those of the Guenther Plaintiffs in any meaningful way. Further, the Press Plaintiffs did not identify a unique interest of their own, they are unable to specify how a determination in the Guenther Action could have a future detrimental preclusive effect. The court wrote it is satisfied that the Press Plaintiffs will be adequately represented. View "Guenther v. BP Retr Accumulation" on Justia Law

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This is an appeal from a district court’s grant of a Rule 12(b)(6) motion to dismiss for failure to state a claim. Plaintiff sought a declaratory judgment that Defendant Biloxi H.M.A., L.L.C., doing business as Merit Health Biloxi (“Merit Health”), a hospital, has a duty to disclose that it charges a “facility fee,” also referred to as a “surcharge,” to all emergency room patients who receive care at its facility. The district court, making an Erie guess informed by the Mississippi Supreme Court’s references to, and partial application of, the Restatement (Second) of Torts Section 551, determined that Merit Health did not have a duty to disclose because the surcharge was not a “fact basic to the transaction”, and it, therefore, granted the motion to dismiss.   The Fifth Circuit reversed and remanded. The court explained that in applying relevant legal precepts, the court thinks that the Mississippi Supreme Court would hold that Plaintiff has sufficiently alleged facts that Merit Health had a duty to exercise reasonable care to disclose the surcharge. First, Plaintiff alleged that the surcharge was a material fact. Second, Plaintiff alleged that Merit Health was aware that patients like her were unaware of the surcharge, but nonetheless failed to disclose it. Third, Plaintiff alleged that she had a reasonable expectation of disclosure because Merit Health holds itself out to be a “caring community-based organization” and patients like her expected Merit Health to disclose the surcharge based on the confidence and trust that they placed in the hospital. View "Henley v. Biloxi H.M.A." on Justia Law

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Plaintiff signed a Financial Responsibility Agreement (“FRA”) with Baylor University to secure her enrollment for the Spring 2020 semester. The FRA required Plaintiff to pay Baylor for “educational services,” and she paid her tuition bill in full. During the second half of the semester, Baylor responded to the COVID-19 pandemic by severely limiting on-campus activities and opportunities while conducting classes remotely. It did not, however, refund any tuition or fees. Plaintiff filed a class action against Baylor asserting a breach of contract claim, alternatively sought unjust enrichment.   The Fifth Circuit affirmed in part and reversed in part, and remanded. The court explained that the FRA is a valid contract because it describes the essential terms with a reasonable degree of certainty and definiteness. Plaintiff failed to state a claim for contract invalidity. But the crux of the parties’ dispute remains the interpretation of “educational services”. The court explained that on remand, the district court must consider whether Baylor’s or Plaintiff’s interpretation of “educational services” prevails. If the term is latently ambiguous, then further proceedings may be necessary to explore its meaning. Also on remand, the court must examine the surrounding circumstances pertinent to the making of the FRA. View "King v. Baylor University" on Justia Law

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Plaintiff recieved a debt-collection letter from Defendant, a law firm that specializes in collecting debt on behalf of the Texas government. However, the limitations period for the debt mentioned in the letter had run. Plaintiff filed a claim against the law firm under the Fair Debt Collection Practices Act. Plaintiff also sought, and obtained, class certification. The law firm appealed the district court's certification.On appeal, the Fifth Circuit sua sponte found that Plaintiff lacked standing to bring a claim against a debt-collection law firm under the Fair Debt Collection Practices Act. The court held that Plaintiff failed to establish that the law firm's debt-collection letter inflicted an injury with a “close relationship to a harm traditionally recognized as providing a basis for a lawsuit in American courts." Without this showing, Plaintiff could not establish the first element of standing: that she suffered a concrete harm. View "Perez v. McCreary, Veselka, Bragg" on Justia Law

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Plaintiffs filed a class action complaint against their former employer, US Well Services, Inc. (“US Well”) for allegedly violating the WARN Act by terminating them without advance notice. The WARN Act requires covered employers to give affected employees sixty days’ notice before a plant closing or mass layoff. 29 U.S.C. Section 2102(a). The Act provides three exceptions to the notice requirement—including the natural-disaster exception, under which no notice is required.   The parties cross-moved for summary judgment. US Well argued that COVID-19 was a natural disaster under the WARN Act, and consequently, that it was exempt from the WARN Act’s notice requirement pursuant to the natural-disaster exception. Plaintiffs countered that COVID-19 was not a natural disaster and was not a direct cause of their layoffs.   Plaintiffs filed an interlocutory appeal seeking reversal of the district court’s order denying their motions for summary judgment and reconsideration. In its order denying Plaintiffs’ motions, the district court certified two questions for interlocutory appeal: (1) Does COVID-19 qualify as a natural disaster under the Worker Adjustment and Retraining Notification Act’s (“WARN Act” or “the Act”) natural-disaster exception, 29 U.S.C. Section 2102(b)(2)(B)?; (2) Does the WARN Act’s natural-disaster exception, 29 U.S.C. Section 2102(b)(2)(B), incorporate but-for or proximate causation?   The Fifth Circuit held that the COVID-19 pandemic is not a natural disaster under the WARN Act and that the natural-disaster exception incorporates proximate causation. The court explained that based on the DOL regulation’s “direct result” requirement and binding precedent equating direct cause with proximate cause, the court held that the WARN Act’s natural-disaster exception incorporates proximate causation. View "Easom v. US Well Services" on Justia Law

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Plaintiffs, a group of individuals affected by power outages during Hurricane Ida, filed a state court class-action lawsuit against various energy companies. The energy companies removed the case to federal court. The district court then granted Plaintiff's motion to remand the case back to state court. The energy companies appealed on various grounds, including under the Class Action Fairness Act ("CAFA").The Fifth Circuit dismissed the portion of the energy companies' appeal that did not fall under CAFA, finding a lack of jurisdiction. However, CAFA permits a district court to review a district court's decision to remand a case. Thus, the court held that it had jurisdiction to review the CAFA-related bases for the energy companies' appeal. Upon a review of the proceedings below, the court held that the district court properly remanded the case back to state court. View "Stewart v. Entergy Corporation" on Justia Law

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The Fifth Circuit vacated the district court's award of fees to class counsel in a class action settlement involving consumers who purchased defective toilet tanks against defendants. The court agreed with Porcelana that the district court erred in calculating the lodestar and refusing to decrease it. In this case, the district court abused its discretion by failing to make any factual findings regarding the nature of the class's unsuccessful claims and an unsupported assertion is insufficient to permit the district court to bypass the proper lodestar calculation and only consider the unsuccessful claims under the eighth Johnson factor. Nor is this a case where the record supports such a conclusion in the absence of an explicit finding by the district court. Even assuming the district court had adequately supported its conclusion that unsuccessful claims were intertwined with those that proved successful, the court stated that the district court still failed to properly analyze the award in relation to the results obtained. Accordingly, the court remanded for further proceedings. View "Fessler v. Porcelana Corona de Mexico, S.A. de C.V." on Justia Law

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The Fifth Circuit granted defendants' motion for a stay of discovery in this class action lawsuit while the court reviews their appeal under Federal Rule of Civil Procedure 23(f). Boeing and Southwest were sued for allegedly conspiring to conceal design defects in Boeing's 737 MAX 8 aircraft and thus defrauding airline ticket purchasers. After considering the Nken factors, the court concluded that Boeing and Southwest have made a strong showing that the court is likely to reverse the class-certification decision because they raised substantial predominance questions regarding damages. Furthermore, defendants have also made a strong showing regarding irreparable harm; plaintiffs have not plausibly alleged that they or any other parties will be irreparably injured by delaying further discovery until the conclusion of the Rule 23(f) appeal; and the public interest supports staying district court proceedings to avoid potentially wasteful and unnecessary litigation costs where, as here, defendants have shown a substantial likelihood of success on appeal. View "Earl v. Boeing Company" on Justia Law