Defendants on the losing side of a class certification order were recently provided with a roadmap of how to challenge a district court’s analysis on appeal. On April 12, 2023, the United States Court of Appeals for the Seventh Circuit vacated and remanded a district court’s class certification order because it failed to “rigorously analyze” the prerequisites to certify a class under Federal Rule of Civil Procedure 23. The appellate court held that the district court abused its discretion by failing to “go beyond the pleadings” – in other words, the plaintiffs’ allegations – in its analysis.&n ..read more

In our previous post, Under Armour Inc. Pulls Sales Forward, SEC and Stockholders Push Back, we discussed Under Armour Inc.’s recent settlement with the SEC, under which Under Armour agreed to pay $9 million for alleged violations of federal securities laws. While that settlement marked the end of a two year investigation into Under Armour’s “pull forward” practices, it also was the basis on which a U.S. District Court permitted similar (but not identical) shareholder claims against Under Armour to proceed. Read the full post on Proskauer’s Corporate Defense and Disputes blog ..read more

Imagine you are an investor and you decide to file a lawsuit after a company that you invest in suffers a stock drop. When you get to the courthouse, you find that you are the first person to file a federal securities class action on these facts. However, because of the Private Securities Litigation Reform Act (PSLRA), the district court chooses another party to be “lead plaintiff” in the litigation. Under the control of that lead plaintiff, the court dismisses the case prior to class certification, and you want to appeal that decision. Do you have standing? Your name is in the case caption fo ..read more

On February 4, 2021, the Eleventh Circuit affirmed the dismissal of a customer’s proposed class action lawsuit against a Florida-based fast-food chain, PDQ, over a data breach. The three-judge panel rejected the argument that an increased risk of identity theft was a concrete injury sufficient to confer Article III standing, deepening a circuit split on this issue. The case, Tsao v. Captiva MVP Restaurant Partners, LLC, stemmed from a data breach at PDQ, in which a hacker exploited the restaurant’s point of sale system to gain access to customers’ credit or debit card information. When PDQ bec ..read more

In July, Instagram’s parent company Meta Platforms, Inc. (“Meta”) agreed to a $68.5 million class-action biometric privacy settlement in connection with the company’s alleged violation of Illinois’ Biometric Information Privacy Act, 740 ILCS 14/1, et seq. (BIPA). Filed in June after initial mediations and settlement negotiations took place, the lawsuit alleged that Instagram’s facial recognition technology violated BIPA when the company collected and stored biometric data without complying with BIPA’s requirements. While Instagram had initially claimed that its facial recognition software (dis ..read more

Statutes permitting discretionary attorney fee-shifting for prevailing defendants vary in the circumstances under which fee-shifting is permitted. Two recent cases tackling the question of why and when a lawsuit warrants shifting attorneys’ fees from a prevailing defendant to the plaintiff who brought the claim reflect some of these differences. One case focused on “frivolousness” of the lawsuit, and the other imposed a “bad faith” requirement—despite the absence of such language from the relevant statute. The perceived motivation of the respective plaintiffs and purpose behind the statutes un ..read more

Counsel for public companies—it may be time to take another look at your litigation disclosures. A recent federal district court opinion held that one company’s use of the phrase “without merit” to describe ongoing litigation in its public filings could give rise to federal securities fraud claims. The ruling serves as the latest admonition to exercise care in crafting litigation disclosures. In City of Fort Lauderdale Police and Firefighters’ Retirement System v. Pegasystems Inc., plaintiff shareholders initiated a class action against Pegasystems Inc. (“Pegasystems”) following a $2 billion v ..read more

The Class Action Fairness Act (“CAFA”), was enacted to make federal courts the primary venue for class action litigation. It did so by modifying the usual jurisdictional requirements of the diversity jurisdiction statute. Under CAFA, federal courts may exercise removal jurisdiction over state law class actions originally filed in state court so long as there is “minimal” rather than “complete” diversity, and the amount in controversy is greater than $5 million. Though the primary effect of CAFA’s enactment was a significant expansion of the types of claims federal courts may decide, the statut ..read more

According to a recent decision, employers who want to keep employees on their premises for security checks after they have already clocked out must pay their employees to do so—at least in Pennsylvania. In 2013, two Amazon.com employees filed a putative class action in the Philadelphia County Court of Common Pleas against their employer, certain of Amazon’s affiliates, and Integrity Staffing Solutions, Inc., seeking compensation under the Pennsylvania Minimum Wage Act (“PMWA”), 43 Pa. Cons. Stat. § 333.101 et seq. for time spent undergoing a mandatory security check after their shifts had ..read more

On February 2, 2021, the Eleventh Circuit reversed the district court’s denial of class certification for failure to prove an administratively feasible method to identify absent class members. The Eleventh Circuit’s rejection of administrative feasibility as a prerequisite to certification under Federal Rule of Civil Procedure 23 has deepened a circuit split on the issue. In Cherry v. Dometic Corporation, the plaintiffs brought a putative class action on behalf of purchasers of allegedly defective gas-absorption refrigerators used in recreational vehicles. The proposed class consisted of all i ..read more