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

Articles Posted in Class Action
by
Plaintiffs in this class action are a class of all West Virginia citizens who refinanced a total of 2,769 mortgages with Defendant Quicken Loans Inc. (now Rocket Mortgage, LLC) from 2004 to 2009, for whom Quicken Loans obtained appraisals from Defendant appraisal management company Title Source, Inc. (now Amrock Inc.) using a request form that included an estimate of value of the subject property. The district court certified the proposed class and granted summary judgment to Plaintiffs on three claims: unconscionable inducement under West Virginia Code Section 46A-2-121(a)(1); breach of contract; and conspiracy.   Previously the Fourth Circuit concluded that Plaintiffs had standing because all of the class members had paid “for independent appraisals that . . . they never received”. Three months later, the Supreme Court issued its opinion in TransUnion LLC v. Ramirez, which addressed Article III standing in the context of a class-action case. Having considered the parties' submissions, the Fourth Circuit concluded that the district court should apply TransUnion to the facts of this case in the first instance. Accordingly, the court vacated and remanded for further proceedings. View "Phillip Alig v. Rocket Mortgage, LLC" on Justia Law

by
Plaintiffs were injured in unspecified accidents and treated by South Carolina health care providers. Seeking to pursue personal injury lawsuits, Plaintiffs requested their medical records from the relevant providers. Those records—and accompanying invoices—were supplied by defendants Ciox Health, LLC and ScanSTAT Technologies LLC, “information management companies” that retrieve medical records from health care providers and transmit them to requesting patients or patient representatives. Claiming the invoiced fees were too high or otherwise illegal, Plaintiffs filed a putative class action against Ciox and ScanSTAT in federal district court.   The district court dismissed the complaint and the Fourth Circuit affirmed. The court explained that South Carolina law gives patients a right to obtain copies of their medical records, while capping the fees “a physician, or other owner” may bill for providing them. However, the statutory obligations at issue apply only to physicians and other owners of medical records, not medical records companies. View "Tammie Thompson v. Ciox Health, LLC" on Justia Law

by
Plaintiffs, each a retiree of PPG Industries, Inc. (“PPG”), or the surviving spouse of such a retiree, initiated a putative class action— following the termination of Plaintiffs’ retiree life insurance coverage under the PPG Employee Life and Other Benefits Plan (the “Benefits Plan” or the “Plan”).   The district court awarded summary judgment to the PPG defendants on all claims, without ruling on the class certification issue. On appeal, Plaintiffs contested the summary judgment award as to three counts of the Complaint, that is, Counts I, VII, and VIII.   The Fourth Circuit identified a genuine dispute of material fact with respect to the Count I claim that retiree life insurance coverage was “vested” in eligible employees working for PPG during the 15-year period from 1969 to 1984 (the “vesting claim”). The court explained that it agrees with Plaintiffs that if their retiree life insurance coverage were ever a vested benefit, PPG could not rely on the later-added reservation of rights clause to terminate that coverage.Accordingly, the court vacated vacate the judgment as to the vesting claim and remanded for consideration of whether the termination of Plaintiffs’ retiree life insurance coverage contravened the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. Section 1001 et seq. View "Charles Bellon v. The PPG Employee Life and Other Benefits Plan" on Justia Law

Posted in: Class Action, ERISA
by
This fee dispute arises from a putative class-action challenge to a now-repealed Virginia statute that triggered the automatic suspension of the driver’s licenses of “Appellants”, and numerous other Virginia residents for nonpayment of court costs and fines. After Appellants obtained a preliminary injunction, the Virginia General Assembly passed a law repealing the challenged statute. Appellants stipulated that dismissal of the underlying lawsuit was therefore appropriate but claimed that they were nonetheless entitled to attorney’s fees pursuant to 42 U.S.C. Section 1988 because they secured the preliminary injunction.   The district court denied Appellants’ petition for attorney’s fees, citing our decision in Smyth ex rel. Smyth v. Rivero, 282 F.3d 268 (4th Cir. 2002), wherein we held that preliminary injunctions do not confer the requisite “prevailing party” status required for an award of fees pursuant to Section 1988. On appeal, Appellants contend that Smyth is not controlling because it is untenable with subsequent Supreme Court decisions.   The Fourth Circuit affirmed the district court’s denial Appellants' petition for attorney’s fees and litigation expenses. The court held that Smyth remains the law of the Fourth Circuit. And, pursuant to Smyth, Appellants are not prevailing parties. The court explained that it is bound by Smyth because it is directly on point and is neither distinguishable from nor untenable with any Supreme Court decision. The court wrote its decision in Smyth primarily turned on the nature of preliminary injunctions, not the standard for obtaining a preliminary injunction. Thus, Appellants’ argument that Smyth is untenable considering the changed merits standard following Winter is unpersuasive. View "Damian Stinnie v. Richard Holcomb" on Justia Law

by
In a putative class action, Plaintiffs allege that as prisoners at two of Virginia’s supermax facilities, they have suffered severe isolation in violation of the U.S. Constitution. Plaintiffs argue that the Virginia Department of Corrections (“VDOC”) has not used its supermax facilities for any legitimate penological purposes. Instead, Plaintiffs claim, that Virginia and its officers have warehoused prisoners in solitary, without any meaningful path back to the general population, to justify the profligate costs of building and running those institutions.     The Fourth Circuit affirmed the district court’s denial of Defendant’s motion. The court explained that Defendants invoked qualified immunity at the motion to dismiss before any of the evidence is in. And on the facts Plaintiffs have pleaded, Defendants cannot succeed. Plaintiffs have adequately alleged that Defendants knew the harms long-term solitary confinement causes and disregarded them. But qualified immunity does not protect knowing violations of the law.   The court explained that its analysis of due process entails a two-part inquiry: (1) whether Plaintiffs had a protectable liberty interest in avoiding security detention; and (2) whether Defendants failed to afford minimally adequate process to protect that liberty interest. Plaintiffs allege Defendants failed to meet even the most basic due process requirements like notice and a meaningful opportunity to be heard and that the criteria Defendants employ to assess solitary placements are entirely divorced from legitimate penological interests. On those allegations—and at this litigation stage—Defendants cannot claim immunity. View "William Thorpe v. Harold Clarke" on Justia Law

by
The Fourth Circuit affirmed the district court's certification of the class and the approval of the insurance class action settlement. The settlement agreement requires Banner to refund to class members a portion of the money they had paid, with a minimum of $100 per class member, and provides some nonmonetary benefits, with a total value of roughly $40 million.The court concluded that the Allen Trust's argument that the district court improperly placed upon it the burden of overcoming the settlement provides no basis for reversal; the district court did not abuse its discretion in determining that the Dickman class met the requirements of class certification under Federal Rule of Civil Procedure 23(a); and the district court did not abuse its discretion in determining that the settlement was fair, reasonable, and adequate under Rule 23(e)(2). View "1988 Trust For Allen Children v. Banner Life Insurance Co." on Justia Law

by
A class action claimed Nationstar violated consumer protection laws in servicing class members’ mortgage loans. Years later, the parties filed a notice of settlement. A magistrate granted preliminary approval. In order of priority, the parties proposed that the $3,000,000 settlement fund pay for administrative expenses up to $300,000, attorneys’ fees, a class representative award, and class claims. The settlement proposed notice by Email, Postcard, and Longform. The Email and Postcard Notice informed class members of the amount of the settlement, how to submit a claim, how to opt-out of the class, and where to find the Longform Notice. The Longform Notice explained the attorneys’ fee arrangement. The notices did not estimate each class member's recovery. Nationstar agreed not to oppose class counsel’s fee request up to $1,300,000. Class counsel submitted records that supported $1,261,547.50 in fees and $217,657.26 in unreimbursed expenses but requested only $1,300,000. The value of a class member’s claim is determined by a points system based on Nationstar’s treatment of their account and the class member’s expenses.An absent class member, having sued Nationstar in California state court, objected to the settlement, arguing that the notice was insufficient; the settlement was unfair and inadequate; the release was unconstitutionally overbroad; and the attorneys’ fee award was improper. The magistrate overruled those objections. The Fourth Circuit affirmed, noting that over 97% of the nearly 350,000 class members received notice and the low opt-out rate. View "McAdams v. Nationstar Mortgage, LLC" on Justia Law

by
Plaintiffs, a group of pharmaceutical buyers, filed a class action against two manufacturers who allegedly reached an anticompetitive settlement in a patent dispute. Plaintiffs are a class of direct purchasers of Merck's brand-name drug and Glenmark's generic version of that drug. Defendants Merck and Glenmark challenge the district court's class certification order.The Fourth Circuit vacated the district court's order, holding that the district court's numerosity analysis fell short in several respects. The court clarified that the text of Federal Rule of Civil Procedure 23(a)(1) refers to whether the class is so numerous that joinder of all members is impracticable, not whether the class is so numerous that failing to certify presents the risk of many separate lawsuits. In this case, the district court erred in analyzing the judicial-economy factor. When analyzing the judicial-economy factor on remand, the court instructed the district court to consider whether judicial economy favors either a class action or joinder. Furthermore, the district court's numerosity analysis improperly looked to the impracticability of individual suits rather than joinder, and thus the court is compelled to conclude that legal error infected the district court's class-certification decision.The court also concluded that there was no abuse of discretion in the district court's adequacy determination and the court rejected Merck's and Glenmark's contention that the district court abused its discretion in finding the named plaintiffs adequate class representatives. The court also found no issue with the district court's predominance finding. Finally, plaintiffs waived any objection to the district court's dismissal of 23 companies. View "FWK Holdings, LLC v. Merck & Company, Inc." on Justia Law

Posted in: Class Action
by
Plaintiff appealed the district court's grant of summary judgment in favor of Aetna, as well as the denial of her motion for class certification. In this case, Mars operated a self-funded health care plan and hired Aetna as a claims administrator of the plan pursuant to a Master Services Agreement (MSA). Aetna subsequently executed subcontracts with Optum for Optum to provide chiropractic and physical therapy services to the plan participants for more cost-effective prices. From 2013 to 2015, in addition to obtaining other non-Optum medical services, plaintiff received treatment from chiropractors and physical therapists provided by Optum under its contract with Aetna.In 2015, plaintiff filed suit against appellees, alleging violations of the Employee Retirement Income Security Act (ERISA), claiming that appellees breached their fiduciary duties to her and the plan based on Aetna's arrangement to have the plan and its participants pay Optum's administrative fee via the bundled rate. Plaintiff also alleged that appellees engaged in comparable violations in their dealings with similarly situated plans and their participants, requesting to represent two classes of such similarly situated plans and their participants.The Fourth Circuit held that plaintiff experienced no direct financial injury as a result of appellees' use of the bundled rate in the claims process. Therefore, the court affirmed the district court's judgment on plaintiff's personal claim for restitution under section 502(a)(1) and (3). However, because the court is unable to conduct appellate review of plaintiff's restitution claim on behalf of the plan under section 502(a)(2), the court vacated and remanded that claim to the district court for development of the record as necessary and resolution in the first instance under Donovan v. Bierwirth, 754 F.2d 1049 (2d Cir. 1985).In regard to plaintiff's claims for surcharge, disgorgement, and declaratory and injunctive relief, which do not require a showing of direct financial injury, the court is persuaded that she has produced sufficient evidence for a reasonable factfinder to conclude that Aetna was operating as a functional fiduciary under ERISA and breached its fiduciary duties. The court also concluded that there is sufficient evidence in the record upon which a reasonable factfinder could find that Optum was acting as a party in interest engaged in prohibited transactions, but not as a fiduciary. Accordingly, the court reversed the district court's judgment as to plaintiff's claims for surcharge, disgorgement, and declaratory and injunctive relief under section 502(a)(1) and (3), and for her claims on behalf of the plan for surcharge, disgorgement, and declaratory and injunctive relief under section 502(a)(2) and remanded those claims for further proceedings. Finally, the court held that the district court abused its discretion in denying plaintiff's motion for class certification when it failed to properly ascertain the full measure of available remedies. Accordingly, the court vacated and remanded the district court's order denying class certification for a full reevaluation under Federal Rule of Civil Procedure 23. View "Peters v. Aetna Inc." on Justia Law

Posted in: Class Action, ERISA
by
Plaintiffs filed an antitrust class action against Actelion, alleging that Actelion extended its patent monopoly for its branded drug Tracleer — a drug to treat pulmonary artery hypertension — beyond the patent's expiration date. Plaintiffs claimed that Actelion did so "through illegitimate means" with the intent of precluding competition from generic drug manufacturers and charging supracompetitive prices for Tracleer, in violation of federal and state antitrust laws. Plaintiffs further claimed that, as a result of Actelion's illegal monopolization, they were injured by having to pay supracompetitive prices for Tracleer for some three years after Actelion's patent for Tracleer expired.The Fourth Circuit vacated the district court's limitations ruling and concluded that plaintiffs' antitrust claims did not accrue until they were injured by paying supracompetitive prices for Tracleer after the patent expired in November 2015. Therefore, plaintiffs action commenced in November 2018 was timely. The court also concluded that, even if the February 2014 date, when Actelion entered into agreements settling the generic manufacturers' antitrust claims, marked the last anticompetitive act, damages could not then have been recovered by plaintiffs because their claims would not have been ripe for judicial resolution in view of the speculative nature of future conduct that might have thereafter occurred. Therefore, limitations would not begin to run until the claims became ripe. In any event, the court explained that because plaintiffs alleged that Actelion continued with anticompetitive acts after November 2015 in selling Tracleer at supracompetitive prices, new limitations periods began to run from each sale that caused plaintiffs damages. The court largely agreed with the district court's standing, but concluded that the allegations asserting violations of the laws in states where plaintiffs did not purchase Tracleer may yet be considered when determining whether plaintiffs can, based on a Rule 23 analysis, represent class members who purchased Tracleer in those States, and if they can, then whether plaintiffs can include those claims. View "Mayor and City Council of Baltimore v. Actelion Pharmaceuticals Ltd." on Justia Law