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

The case involves a class action lawsuit against Bojangles’ Restaurants, Inc. by several plaintiffs who allege that the company required them to perform unpaid off-the-clock work and made unauthorized edits to their time records. The plaintiffs, who worked as shift managers, claim that Bojangles violated its own policies and the Fair Labor Standards Act (FLSA) by not compensating them for all hours worked, including overtime.The United States District Court for the Western District of North Carolina conditionally certified a collective action for the FLSA claims and later certified class actions for state wage-and-hour law claims in North Carolina and South Carolina. The district court found that the proposed classes met the requirements for numerosity, commonality, and predominance under Federal Rule of Civil Procedure 23. The court relied on the fact that most class members worked opening shifts and were subject to Bojangles’ Opening Checklist, which allegedly required pre-shift work. The court defined the classes broadly to include all shift managers who worked at Bojangles in North Carolina or South Carolina within three years of the complaint.The United States Court of Appeals for the Fourth Circuit reviewed the district court’s certification order. The appellate court found that the district court abused its discretion by employing an overly general approach in identifying the policies that allegedly unified the class members’ claims and by creating overly broad class definitions. The Fourth Circuit held that the district court failed to provide specific evidence of a common policy that mandated off-the-clock work and time-record edits for all class members. The court vacated the certification order and remanded the case for further proceedings, instructing the district court to refine the class definitions and ensure that common questions predominate over individualized issues. View "Stafford v. Bojangles' Restaurants, Inc." on Justia Law

Marco Fernandez applied to rent an apartment, and RentGrow, Inc. provided a tenant screening report to the property owner. The report inaccurately indicated that Fernandez had a "possible match" with a name on the OFAC list, which includes individuals involved in serious crimes. However, the property manager did not understand or consider this information when deciding on Fernandez's application. Fernandez sued RentGrow, alleging that the company violated the Fair Credit Reporting Act (FCRA) by not ensuring the accuracy of the OFAC information.The United States District Court for the District of Maryland certified a class of individuals who had similar misleading OFAC information in their reports. The court rejected RentGrow's argument that Fernandez and the class lacked standing because they did not demonstrate a concrete injury. The district court held that the dissemination of the misleading report itself was sufficient to establish a concrete injury.The United States Court of Appeals for the Fourth Circuit reviewed the case and disagreed with the district court's conclusion. The appellate court held that reputational harm can be a concrete injury, but only if the misleading information was read and understood by a third party. In this case, there was no evidence that anyone at the property management company read or understood the OFAC information in Fernandez's report. Therefore, Fernandez failed to demonstrate a concrete injury sufficient for Article III standing. The Fourth Circuit vacated the district court's class certification order and remanded the case for further proceedings. View "Fernandez v. RentGrow, Inc." on Justia Law

Two students receiving special education services filed a class action lawsuit against the Kanawha County Board of Education, alleging that the Board denied them and other similarly situated students a free appropriate public education (FAPE) as guaranteed by the Individuals with Disabilities Education Act (IDEA). The lawsuit also claimed violations of Title II of the Americans with Disabilities Act (ADA) and Section 504 of the Rehabilitation Act. The district court certified a class of all Kanawha County Schools students with disabilities who need behavior supports and have experienced disciplinary removals from any classroom.The United States District Court for the Southern District of West Virginia granted the plaintiffs' motion to certify the class, reasoning that the plaintiffs had presented expert evidence of disproportionate rates of suspension for students with disabilities and a detailed qualitative analysis of student records. The court found that these factors revealed a cohesive pattern indicating the absence of an effective system for developing and implementing behavioral supports for students with disabilities. The Board appealed, arguing that the certification of the plaintiff class was inconsistent with Federal Rules of Civil Procedure 23(a) and (b)(2).The United States Court of Appeals for the Fourth Circuit reviewed the case and reversed the district court’s certification order. The Fourth Circuit held that the certified class failed to satisfy Rule 23(a)(2)’s commonality prerequisite. The court found that the plaintiffs did not identify a common contention central to the validity of all class members’ claims. The court noted that the claims were highly diverse and individualized, involving different practices at different stages of the special education process. The absence of a common contention foreclosed class treatment. The case was remanded for further proceedings consistent with the opinion. View "G.T. v. The Board of Education of the County of Kanawha" on Justia Law

In 2013, Johnny Ray Penegar, Jr. was diagnosed with mesothelioma, and Medicare partially covered his treatment costs. He filed a workers' compensation claim against his employer, UPS, and its insurer, Liberty Mutual. After his death, his wife, Carra Jane Penegar, continued the claim and added a death benefits claim. The North Carolina Industrial Commission (NCIC) ruled in her favor, ordering Liberty Mutual to cover all medical expenses related to the mesothelioma and reimburse any third parties, including Medicare. The NCIC's decision was affirmed by the North Carolina Court of Appeals and the Supreme Court of North Carolina denied further review. In 2020, Penegar and Liberty Mutual settled, with Liberty Mutual agreeing to pay $18,500 and to handle any Medicare liens.Penegar filed a class action lawsuit in the Western District of North Carolina under the Medicare Secondary Payer Act (MSP Act), alleging that Liberty Mutual failed to reimburse Medicare, leading to a collection letter from the Centers for Medicare and Medicaid Services (CMS) demanding $18,500. Liberty Mutual moved to dismiss, arguing Penegar lacked standing and that the settlement precluded her claims. The district court agreed, finding Penegar lacked standing and dismissed the case.The United States Court of Appeals for the Fourth Circuit reviewed the case and affirmed the district court's decision. The court held that Penegar did not suffer a cognizable injury in fact at the time she filed the lawsuit. The NCIC had ordered Liberty Mutual to reimburse Medicare directly, not Penegar, distinguishing her case from Netro v. Greater Baltimore Medical Center, Inc. Additionally, the CMS letter only posed a risk of future harm, which is insufficient for standing in a damages suit. Finally, any out-of-pocket expenses Penegar incurred were already compensated by Liberty Mutual before she filed the lawsuit, negating her claim of monetary injury. View "Penegar v. Liberty Mutual Insurance Co." on Justia Law

A massage parlor, Elegant Massage LLC, filed a class action lawsuit against State Farm Mutual Automobile Insurance Company, asserting claims of breach of contract and other related claims. The suit stemmed from State Farm's denial of insurance coverage to businesses that had to shut down partially or fully due to Virginia executive orders during the COVID-19 pandemic. Elegant Massage claimed that the forced closure constituted a "direct physical loss" under its insurance policy. The district court certified the class and denied State Farm’s motion to dismiss. State Farm appealed.The United States Court of Appeals for the Fourth Circuit used its pendent appellate jurisdiction to review the district court's denial of State Farm’s motion to dismiss in conjunction with the appealable class certification order. The appellate court referred to the precedent set in Uncork & Create LLC v. Cincinnati Insurance Co., which held that a similar business closure during the pandemic did not constitute a "direct physical loss" requiring material destruction or harm to the property. The court found that this precedent was directly applicable to the case at hand.Consequently, the court of appeals held that the district court had erred in denying State Farm's motion to dismiss. It ruled that the temporary closures ordered by the executive did not result in a "direct physical loss" under the policy terms. As a result, the court also found no basis for class certification. The court reversed the district court’s decisions and instructed it to dismiss the entire case. View "Elegant Massage, LLC v. State Farm Mutual Automobile Insurance Co." on Justia Law

In the case before the United States Court of Appeals for the Fourth Circuit, the plaintiff, Career Counseling, Inc., alleged that the defendant, AmeriFactors Financial Group, LLC, sent an unsolicited advertisement by fax to the plaintiff and thousands of other recipients in violation of the Telephone Consumer Protection Act of 1991 (TCPA), as amended by the Junk Fax Prevention Act of 2005.The plaintiff sought to represent a class of nearly 59,000 other persons and entities who were sent the same fax. The district court denied class certification on the grounds that the class was not readily identifiable or ascertainable. It found that the TCPA prohibits unsolicited advertisements sent to stand-alone fax machines, but not those sent to online fax services. Therefore, it was necessary to distinguish between recipients who were using stand-alone fax machines and those using online fax services. The court held that the plaintiff failed to demonstrate this distinction, rendering the proposed class unascertainable.On appeal, the Fourth Circuit affirmed the district court's decision, agreeing that the proposed class was not readily identifiable or ascertainable. It agreed with the lower court's interpretation of the TCPA, which it determined based on the statute's plain language, that an online fax service does not qualify as a "telephone facsimile machine" under the TCPA. Therefore, users of online fax services could not be included in the proposed class.Additionally, the court affirmed the district court's award of summary judgment to Career Counseling on its individual TCPA claim against AmeriFactors. It concluded that there was insufficient evidence to dispute AmeriFactors' liability as the "sender" of the fax, rendering AmeriFactors liable for sending the unsolicited fax to Career Counseling. View "Career Counseling, Inc. v. Amerifactors Financial Group, LLC" on Justia Law

In the case before the United States Court of Appeals for the Fourth Circuit, plaintiff Carla J. Kappel, acting on behalf of her deceased ex-husband's estate and as mother to their minor children, sued LL Flooring, Inc., alleging that the company's Chinese-manufactured laminate flooring caused her ex-husband's death due to exposure to formaldehyde.The district court dismissed Kappel's wrongful death lawsuit, arguing that her claim was barred by a settlement agreement that had been reached in connection with two multidistrict litigation (MDL) actions related to LL Flooring's products. The court maintained that the deceased, Mr. Tarabus, was a class member subject to that settlement agreement and thus his claims, including any claims involving bodily injuries or death caused by the subject flooring, had been settled.On appeal, Kappel argued that the district court lacked subject matter jurisdiction to make the dismissal order and that the MDL settlement agreement did not bar her wrongful death lawsuit on behalf of the children. The Court of Appeals agreed with Kappel's latter argument and held that the settlement agreement failed to resolve Kappel’s wrongful death lawsuit.The Court found that the claims in Kappel's lawsuit, which concerned the bodily injuries Mr. Tarabus experienced and the alleged causal connection between the laminate flooring and his cancer diagnosis, were materially distinct from the claims in the MDL proceedings. Notably, the settlement class representatives had twice made clear that they were not pursuing personal injury claims on a class-wide basis, and at no point did any class representative ever allege or pursue a wrongful death lawsuit.Therefore, the Court vacated the lower court's dismissal of Kappel's lawsuit and remanded the case for further proceedings. View "Kappel v. LL Flooring, Inc." on Justia Law

Elaine Neidig, individually and on behalf of a class, sued Valley Health System, a health care provider, for unfair and deceptive practices, unjust enrichment, and breach of contract. Neidig had received three mammograms at Valley Health's Winchester Medical Center between March 2016 and June 2019. In July 2019, federal inspectors found that the center's staff were not correctly positioning or compressing women's breasts during mammograms, leading to serious image quality deficiencies. Valley Health then had to alert all at-risk patients, including Neidig, of the mammography quality problems. Neidig, who did not allege any physical or emotional harm resulting from the low-quality mammograms, sued Valley Health in August 2022. Valley Health moved to dismiss the case on the basis that it was filed beyond the two-year statute of limitations provided by the West Virginia Medical Professional Liability Act. The United States District Court for the Northern District of West Virginia agreed with Valley Health and dismissed Neidig's claims as untimely. Neidig appealed the decision to the United States Court of Appeals for the Fourth Circuit.Upon review, the Fourth Circuit concluded that the case presented a novel issue of state law that needed to be addressed by the Supreme Court of Appeals of West Virginia. The issue was whether a plaintiff's claims can fall under the West Virginia Medical Professional Liability Act if the plaintiff does not claim any form of physical or emotional injury. The Fourth Circuit certified this question to the Supreme Court of Appeals of West Virginia for resolution. View "Neidig v. Valley Health System" on Justia Law

Plaintiff, a chiropractic office, filed suit under the Telephone Consumer Protection Act after it received an unsolicited fax offering a free eBook with information about prescription drugs. The district court dismissed its complaint, holding that the plaintiff had not alleged that the fax, which tendered a product for free rather than for sale, was sufficiently commercial to bring it within the statutory prohibition on “unsolicited advertisements.” On appeal, Defendant-PDR Network defends both steps in the district court’s reasoning, arguing that a fax must be “commercial” to qualify as an “advertisement” under the TCPA and that Carlton & Harris has not alleged the requisite commercial character. Carlton & Harris disputes both portions of the court’s reasoning, contending that a prohibited “advertisement” may be entirely non-commercial and that, in any event, it has adequately alleged that the fax it received was commercial in nature. Further, Plaintiff asserts that PDR Network profits when its fax persuades a medical practitioner to accept the proffered eBook.   The Fourth Circuit vacated the district court’s order and remanded. The court concluded that Plaintiff had adequately alleged that the fax offer had the necessary commercial character to make it an “unsolicited advertisement” under the Act. The court explained that for present purposes, we accept as true Plaintiff’s commission allegation and find it adequate, at this preliminary stage, to state a claim that the fax offer of a free eBook is a commercial “advertisement” subject to the TCPA. View "Carlton & Harris Chiropractic, Inc. v. PDR Network, LLC" on Justia Law

In November 2018, Marriott International, Inc., announced that hackers had breached one of its guest reservation databases, giving them access to millions of guest records. Customers across the country began filing lawsuits, which were consolidated into multidistrict litigation in Maryland. Plaintiffs then moved to certify multiple class actions against Marriott and Accenture LLP, an IT service provider that managed the database at issue. The district court obliged in part. It certified classes for monetary damages on breach of contract and statutory consumer-protection claims against Marriott under Rule 23(b)(3) of the Federal Rules of Civil Procedure. It also certified “issue” classes on negligence claims against Marriott and Accenture under Rule 23(c)(4), limited to a subset of issues bearing on liability.   The Fourth Circuit granted Defendants’ petitions to appeal the district court’s certification order and now concludes that the order must be vacated. The court found that the district court erred in certifying damages classes against Marriott without first considering the effect of a class action waiver signed by all putative class members. And because the existence of damages classes against Marriott was a critical predicate for the district court’s decision to certify the negligence issue classes, that error affects the whole of the certification order. Accordingly, the court vacated the district court’s certification order. View "Peter Maldini v. Accenture LLP" on Justia Law