Class Actions

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On June 5, the U.S. Supreme Court dismissed a writ of certiorari as improvidently granted, leaving unresolved a significant question regarding class-action certification under Federal Rule of Civil Procedure 23. The question presented (and left unanswered by the majority) in Laboratory Corporation of America Holdings (Labcorp) v. Davis was whether a federal court may certify a damages class that includes both injured and uninjured class members. The dismissal has sparked considerable debate, particularly highlighted by Justice Kavanaugh’s dissent, which provides a compelling argument against the court’s dismissal.

On January 27, a three-judge panel of the U.S. Court of Appeals for the Fourth Circuit issued a significant opinion holding that the Servicemembers Civil Relief Act (SCRA) does not prohibit the enforcement of arbitration agreements in credit card contracts under the Federal Arbitration Act (FAA).

In Aley v. Lightfire Partners, LLC, a U.S. District Court in the Northern District of New York certified aa Telephone Consumer Protection Act (TCPA) class action for all persons whose telephone numbers were on the National Do Not Call Registry (DNC) but who received more than one telemarketing call from the defendant based on alleged consent given to a third-party website.

In a recent ruling, a U.S. District Court for the Central District of California granted a defendant’s motion to dismiss a complaint brought under the Telephone Consumer Protection Act (TCPA). The complaint alleged that the plaintiff received multiple communications from the defendant despite not having provided prior consent and being on the National Do-Not-Call Registry. The court found that the communications were not “solicitations” under the TCPA because the messages were aimed at recruiting the plaintiff for employment and that the complaint insufficiently alleged that the defendant used an automated telephone dialing system (ATDS) or that the voicemail was prerecorded.

A proposed class action lawsuit has been filed in the U.S. District Court for the Northern District of California against EarnIn, a FinTech provider of Earned Wage Access services, alleging that its optional fees and tips constitute hidden interest payments. The complaint claims that EarnIn’s practices violate Georgia’s Payday Loan Act and the federal Truth in Lending Act (TILA).

The U.S. Court of Appeals for the District of Columbia Circuit recently dismissed an appeal in the case of Lewis v. Becerra, Secretary of the United States Department of Health and Human Services (HHS). The appellants sought to challenge the district court’s denial of class certification despite having won their individual claims for Medicare reimbursement. The court dismissed the appeal for lack of Article III standing, emphasizing that the appellants did not demonstrate a concrete, individual injury from the denial of class certification.

In Soliman v. Subway Franchisee Advertising Fund Trust, Ltd, the plaintiff alleged that the defendant violated the Telephone Consumer Protection Act (TCPA) by sending a text message to her cell phone using an automatic telephone dialing system (ATDS) and which utilized an “artificial or prerecorded voice.” The Second Circuit affirmed the district court’s decision to dismiss the case because the TCPA did not apply.

The U.S. Court of Appeals for the Ninth Circuit recently reversed a district court’s ruling, which had denied a motion to compel arbitration of Opportunity Financial (OppFi) on the basis that the arbitration clause was substantively unconscionable due to the choice of law provision in the loan agreement containing the arbitration clause. The Ninth Circuit vacated the decision and directed the district court to refer the matter to arbitration.

Virginia is currently one of only two states that does not allow class-action lawsuits in its courts. However, that could change soon as House Bill (HB) 418, originally introduced on January 10, 2024, seeks to create a class-action framework loosely modeled on the Federal Rules of Civil Procedure. On February 9, HB 418 passed the House of Delegates and will be sent to the Senate for consideration.