Justia U.S. 4th Circuit Court of Appeals Opinion Summaries

Several individuals brought a class action lawsuit against a group of insurance companies after a data breach compromised the driver’s license numbers of nearly three million people. The breach occurred when hackers exploited the companies’ online insurance quoting platform, which auto-populated sensitive information using data from both customers and third-party sources. The plaintiffs, whose information was compromised, alleged various harms, including time spent monitoring their financial records, increased risk of identity theft, emotional distress, and, for two plaintiffs, discovery of their driver’s license numbers on the dark web.The United States District Court for the Eastern District of Virginia dismissed the consolidated class action complaint, finding that none of the named plaintiffs had standing to pursue their claims. The district court concluded that the alleged injuries were either too speculative or not sufficiently concrete to satisfy Article III’s standing requirements, and granted the defendants’ motion to dismiss under Rule 12(b)(1).On appeal, the United States Court of Appeals for the Fourth Circuit reviewed whether the plaintiffs had standing to bring suit. The Fourth Circuit held that two plaintiffs, who alleged that their driver’s license numbers were actually posted on the dark web, suffered a concrete and particularized injury analogous to the common-law tort of public disclosure of private information. This injury was sufficient to confer standing to seek damages. However, the court found that the other plaintiffs, who did not allege their information was made public, lacked standing because their alleged injuries—such as increased risk of future harm, time spent on mitigation, and emotional distress—were either not imminent or not independently sufficient for standing. The Fourth Circuit therefore affirmed the district court’s dismissal as to those plaintiffs, reversed as to the two plaintiffs with information posted on the dark web, and remanded for further proceedings. View "Holmes v. Elephant Insurance Co." on Justia Law

The plaintiff, after her vehicle was declared a total loss in a collision, received a payment from her insurer based on the “actual cash value” of her car, as determined by a third-party valuation system. This system used comparable vehicle listings and, when actual sales prices were unavailable, applied a “Projected Sold Adjustment” to estimate market value. The plaintiff accepted the insurer’s offer, paid her deductible, and did not contest the valuation or invoke the policy’s appraisal process. Despite this, she filed suit alleging breach of contract, claiming the insurer’s use of the adjustment resulted in underpayment, and sought to represent a class of similarly situated South Carolina policyholders.The United States District Court for the District of South Carolina certified a class of individuals who received total loss payments calculated using the Projected Sold Adjustment. The court found that the plaintiff’s claims were typical of the class and that common questions predominated, thus meeting the requirements for class certification under Federal Rule of Civil Procedure 23.On interlocutory appeal, the United States Court of Appeals for the Fourth Circuit reversed the class certification order. The Fourth Circuit held that the plaintiff lacked standing because she did not suffer a concrete injury—she accepted the insurer’s payment, was not out-of-pocket beyond her deductible, and never demonstrated that her vehicle’s value exceeded the amount paid. The court further held that, even if standing existed, class certification was improper because determining whether the insurer breached its obligation to pay actual cash value would require individualized inquiries into each class member’s vehicle and circumstances. Thus, the requirements of commonality and predominance under Rule 23 were not met. The district court’s order certifying the class was therefore reversed. View "Freeman v. Progressive Direct Insurance Company" on Justia Law

Several individuals and an LLC, who own oil and gas interests in West Virginia, leased their mineral rights to EQT, a group of related energy companies. The leases, numbering nearly 3,843, required EQT to pay royalties to the lessors. During the period from January 1, 2012, to February 28, 2021, EQT extracted “wet gas” from the wells, which contains valuable natural gas liquids (NGLs) like propane and butane. EQT sold the wet gas at the wellhead to its own affiliates and paid royalties to the lessors based on the energy content (BTU) of the wet gas, not on the value of the NGLs. EQT then separated and sold the NGLs to third parties but did not pay additional royalties for these sales. In 2021, EQT notified lessors it would begin calculating royalties based on the separate value of NGLs and residue gas.The plaintiffs filed a putative class action in the United States District Court for the Northern District of West Virginia, alleging breach of contract and fraudulent concealment, and sought class certification. The district court granted partial summary judgment, finding EQT’s affiliates were its alter egos, and certified classes for both claims, later dividing the class into three subclasses based on lease language. EQT petitioned for interlocutory appeal of the class certification order.The United States Court of Appeals for the Fourth Circuit reviewed the district court’s certification order. The Fourth Circuit affirmed the certification of the breach of contract claim, holding that the class was ascertainable and that common questions of law and fact predominated, given EQT’s uniform royalty payment method and the immateriality of lease language variations under West Virginia law. However, the Fourth Circuit reversed the certification of the fraudulent concealment claim, holding that individual questions of reliance would predominate, making class treatment inappropriate for that claim. Thus, the district court’s order was affirmed in part and reversed in part. View "Glover v. EQT Corporation" on Justia Law

The plaintiff, representing herself and a proposed class, alleged that she was exposed to ethylene oxide (EtO), a carcinogenic gas, due to emissions from a plant in South Charleston, West Virginia, operated by the defendants from 1978 to 2019. She claimed that this exposure increased her risk of developing serious diseases, necessitating ongoing medical monitoring and diagnostic testing, for which she sought compensation under West Virginia common law.The United States District Court for the Southern District of West Virginia recognized that West Virginia law allows for medical monitoring claims but held that the plaintiff lacked Article III standing because she did not have a manifest physical injury. The district court also excluded the plaintiff’s expert, Dr. Sahu, finding his testimony unreliable, and granted summary judgment to the defendants. The court reasoned that the plaintiff’s alleged injury—an increased risk of future illness—was not concrete or ripe, relying on the Supreme Court’s decision in TransUnion LLC v. Ramirez.The United States Court of Appeals for the Fourth Circuit reviewed the case de novo. It held that, under West Virginia law, the injury in a medical monitoring claim is the tortious exposure to a hazardous substance and the present need for medical testing, not the manifestation of disease. The court found that this injury is concrete and actual, satisfying Article III standing requirements. The Fourth Circuit also determined that the district court abused its discretion in excluding Dr. Sahu’s expert testimony, as its criticisms went to the weight, not the admissibility, of his opinions. The Fourth Circuit reversed the district court’s grant of summary judgment and exclusion of the expert, and remanded the case for further proceedings. View "Sommerville v. Union Carbide Corp." on Justia Law

A South Carolina resident brought a lawsuit in federal court against a Michigan-based bank, alleging that the bank engaged in three improper practices related to overdraft and ATM fees. Specifically, the plaintiff claimed the bank assessed overdraft fees even when accounts had sufficient funds, charged multiple insufficient-funds fees for a single transaction, and imposed two out-of-network fees for a single ATM withdrawal. The plaintiff sought to certify nationwide classes for each alleged wrongful fee practice.The United States District Court for the District of South Carolina denied the plaintiff’s motion for class certification. The court relied on South Carolina’s “Door Closing Statute” (S.C. Code Ann. § 15-5-150), as interpreted by the Supreme Court of South Carolina in Farmer v. Monsanto Corp., to conclude that nonresidents whose claims did not arise in South Carolina could not be included in the class. As a result, the court found that the plaintiff could not satisfy the numerosity requirement of Federal Rule of Civil Procedure 23 and denied class certification. The plaintiff appealed this decision under Rule 23(f), and the United States Court of Appeals for the Fourth Circuit granted review.The United States Court of Appeals for the Fourth Circuit held that Federal Rule of Civil Procedure 23, as interpreted by the Supreme Court in Shady Grove Orthopedic Associates, P.A. v. Allstate Insurance Co., directly conflicts with the Door Closing Statute’s additional requirements for class actions. The Fourth Circuit concluded that Rule 23 alone governs the certification of class actions in federal court and that the Door Closing Statute cannot limit class membership in this context. The court reversed the district court’s denial of class certification and remanded the case for further proceedings. View "Grice v. Independent Bank" on Justia Law

The case involves two companies, Skyline Tower Painting, Inc. (Skyline) and Television Tower, Inc. (TTI), which were sued by a group of plaintiffs for allegedly causing lead paint contamination in a Baltimore neighborhood. TTI owns a TV tower that was coated with lead-based paint, and Skyline was contracted to clean the tower using hydroblasting, a process that dislodged and dispersed the lead paint. The plaintiffs, who own property within a 4000-foot radius of the tower, claimed that the hydroblasting caused lead paint chips and dust to spread throughout their community, posing health risks and reducing property values.The plaintiffs filed a class action lawsuit in Maryland state court, asserting claims for negligence, negligent hiring, retention, and supervision, and strict liability for an abnormally dangerous activity. The defendants removed the case to federal court under the Class Action Fairness Act (CAFA). The plaintiffs moved to remand the case to state court, invoking CAFA’s local-controversy exception. The United States District Court for the District of Maryland granted the motion to remand, finding that the local-controversy exception applied.The United States Court of Appeals for the Fourth Circuit reviewed the case. The court first determined that it had jurisdiction to hear the appeal under 28 U.S.C. § 1291, despite the defendants also filing petitions for permission to appeal under 28 U.S.C. § 1453. The court dismissed the § 1453 petitions as unnecessary. On the merits, the Fourth Circuit affirmed the district court’s decision, holding that the local-controversy exception to CAFA applied. The court found that more than two-thirds of the proposed class members were Maryland citizens, and that TTI, a Maryland citizen, was a significant defendant from whom significant relief was sought and whose conduct formed a significant basis for the claims. View "Skyline Tower Painting, Inc. v. Goldberg" on Justia Law

Plaintiffs filed a class action lawsuit in state court against Defendants, alleging violations of state securities laws. Defendants removed the case to federal court under the Securities Litigation Uniform Standards Act (SLUSA), arguing that the case involved covered securities. Plaintiffs amended their complaint to exclude any claims related to covered securities, leading the district court to remand the case to state court. After three years of state court litigation, Defendants removed the case again, citing an expert report that allegedly identified covered securities. The district court remanded the case again and awarded Plaintiffs $63,007.50 in attorneys' fees.The United States District Court for the District of South Carolina initially denied Plaintiffs' motion to remand but later granted it after Plaintiffs amended their complaint. The court found that the amended complaint excluded any claims related to covered securities, thus SLUSA did not apply, and no federal question remained. After Defendants removed the case a second time, the district court remanded it again and awarded attorneys' fees, finding the second removal lacked a reasonable basis.The United States Court of Appeals for the Fourth Circuit reviewed the case and affirmed the district court's award of attorneys' fees. The court held that the second removal was improper because the amended complaint explicitly excluded claims related to covered securities, and thus SLUSA did not apply. Additionally, the court found that the removal was objectively unreasonable, as the district court had already addressed the issues in its first remand order. The Fourth Circuit also denied Plaintiffs' request for additional attorneys' fees for defending the appeal, stating that 28 U.S.C. § 1447(c) does not authorize fee awards on appeal. View "Black v. Mantei & Associates, Ltd." on Justia Law

The case involves a class action lawsuit against Matt Martorello for violating civil provisions of the Racketeering Influenced and Corrupt Organizations Act (RICO). The plaintiffs, a group of Virginia citizens, alleged that Martorello orchestrated a "Rent-A-Tribe" scheme with the Lac Vieux Desert Band of Chippewa Indians to issue high-interest loans that circumvented state usury laws by claiming tribal immunity. The loans were made through tribal entities, Red Rock Tribal Lending, LLC, Big Picture Loans, LLC, and Ascension Technologies. The plaintiffs sought damages under federal civil RICO law.The U.S. District Court for the Eastern District of Virginia dismissed the tribal entities from the case due to sovereign immunity but allowed the claims against Martorello to proceed. The court found that Martorello had made material misrepresentations about the lending operations and granted class certification. Martorello's subsequent interlocutory appeals were denied, and the district court eventually granted summary judgment in favor of the plaintiffs, awarding them over $43 million in damages.The United States Court of Appeals for the Fourth Circuit reviewed the case. Martorello challenged three district court rulings: the denial of his motion to dismiss for failure to join necessary and indispensable parties, the application of Virginia law instead of tribal law, and the rejection of his "mistake of law" defense. The Fourth Circuit affirmed the district court's judgment. It held that the tribal entities were not indispensable parties due to their settlement agreement, Virginia law applied to the off-reservation lending activities, and a mistake-of-law defense was irrelevant to the civil RICO claims, which did not require proof of specific mens rea beyond the predicate acts. The court concluded that the district court did not abuse its discretion in any of its rulings. View "Williams v. Martorello" on Justia Law

Plaintiffs-Appellants Thomas Sheppheard, Tyler Randall, and Adam Perry, on behalf of minor child J.P., filed a class action lawsuit against the Governor of West Virginia and the Acting Cabinet Secretary of the West Virginia Department of Homeland Security. They sought relief under the Eighth and Fourteenth Amendments, alleging unconstitutional conditions of overcrowding, understaffing, and deferred maintenance in West Virginia's prisons, jails, and juvenile centers. They claimed these conditions amounted to deliberate indifference to their health and safety.The United States District Court for the Southern District of West Virginia dismissed the case for lack of standing. The court found that the plaintiffs failed to establish that their injuries were traceable to the actions of the Governor or the Secretary, or that their injuries would be redressed by a favorable decision. The court noted that the issues were largely due to funding decisions by the West Virginia legislature, which was not a party to the suit. The court also highlighted that the Commissioner of the West Virginia Division of Corrections and Rehabilitation, not the Governor or the Secretary, had the authority to address the conditions in the facilities.The United States Court of Appeals for the Fourth Circuit affirmed the district court's dismissal. The appellate court agreed that the plaintiffs lacked standing because they could not show that their injuries were caused by the Governor's or the Secretary's actions. The court also found that the requested relief, such as appropriations and policy changes, could not be granted by the court as it lacked the power to compel the Governor or the Secretary to take such actions. The court emphasized that the plaintiffs' injuries were not redressable through the requested judicial intervention. View "Sheppheard v. Morrisey" on Justia Law

In 2018, Marriott announced a data breach affecting the guest reservation database of Starwood Hotels & Resorts Worldwide, which Marriott had acquired in 2016. The breach exposed personal information of approximately 133.7 million guests, including some payment card information. Plaintiffs filed class action lawsuits against Marriott and Accenture, a third-party IT service provider for Starwood and Marriott during the breach. The cases were consolidated for pretrial proceedings in the District of Maryland.The district court initially certified multiple state-specific damages classes against Marriott and issue classes against both Marriott and Accenture. However, the court did not address the effect of a class-action waiver in the Starwood Preferred Guest Program (SPG) contract, which Marriott argued precluded class certification. The Fourth Circuit vacated the class certification, instructing the district court to consider the class-action waiver's impact.On remand, the district court again certified the classes, holding that Marriott had waived its right to enforce the class-action waiver by participating in multidistrict litigation (MDL) and by agreeing to pretrial proceedings in Maryland, contrary to the SPG contract's venue and choice-of-law provisions. The court also suggested that the class-action waiver might be unenforceable under Rule 23 of the Federal Rules of Civil Procedure.The United States Court of Appeals for the Fourth Circuit reviewed the case and reversed the district court's decision. The Fourth Circuit held that Marriott did not waive its right to enforce the class-action waiver and that the waiver was valid and enforceable. The court found that the waiver applied to the plaintiffs' claims, including consumer protection and negligence claims, as they were related to the SPG Program. Consequently, the court reversed the certification of all classes against Marriott and the issue classes against Accenture, as the latter were justified only in combination with the Marriott damages classes. View "Maldini v. Marriott International, Incorporated" on Justia Law