2024 was a fairly quiet year for appellate opinions on class action matters, other than those relating to employment cases which we discuss in a separate heading. 2024 opinions focused primarily on the requirements for class certification particularly on commonality and standing.

In a class action, the Ninth Circuit holds that plaintiffs may use a reliable, unexecuted damages model to show that damages are susceptible to common proof to establish class certification

In Lytle v. Nutramax Laboratories, Inc. plaintiffs filed a consumer class action against Nutramax Laboratories, Inc. and Nutramax Laboratories Veterinary Sciences, Inc. (collectively, “Nutramax”), alleging that Nutramax violated the California Consumers Legal Remedies Act by falsely marketing its pet health product, Cosequin, as promoting healthy joints in dogs. Plaintiffs claimed that Cosequin provided no such health benefits.

The plaintiffs moved for certification of the class: purchasers of certain Cosequin products who were exposed to the allegedly misleading statements. Plaintiffs relied on the proposed damages model of Plaintiffs’ expert, Dr. Jean-Pierre Dubé, to find that common questions predominated as to injury. The district court granted class certification. Nutramax appealed, arguing that the district court erred in relying on an unexecuted damages model to certify the class and that the element of reliance was not susceptible to common proof.

The Ninth Circuit affirmed the district court’s decision holding held that there was no general requirement that an expert’s otherwise reliable damages model must apply to the proposed class in order to demonstrate that damages are susceptible to common proof at the class certification stage. The court also rejected Nutramax’s contention that the district court incorrectly concluded that the element of reliance was susceptible to common proof. Rather, according to the Ninth Circuit, the district court properly found that class-wide reliance may be established under the CLRA through proof that a misrepresentation is material.

Ninth Circuit holds that the United States District Court in California had specific personal jurisdiction over foreign pornography website operators who used US-based content delivery network services to improve US users’ viewing experience

In Jane Doe v. Webgroup Czech Republic, A.S. plaintiff, a survivor of childhood sex trafficking, filed a class action suit against a group of foreign and domestic corporations, alleging that they violated federal and California laws by distributing videos of her sexual abuse on the internet. The defendants included the owners and operators of two pornography websites based in the Czech Republic. The plaintiff argued that the court had personal jurisdiction over the foreign defendants under Federal Rule of Civil Procedure 4(k)(2), which allows for jurisdiction over a foreign defendant if the claim arises under federal law, the defendant is not subject to jurisdiction in any state’s courts, and exercising jurisdiction is consistent with the U.S. Constitution and laws. The district court dismissed the case, ruling that it lacked personal jurisdiction over the foreign defendants.

The Ninth Circuit reversed in part and vacated in part the district court’s dismissal. The Court found that the plaintiff had established a prima facie case that the Czech website operators had purposefully directed their websites at the United States. The Court also held that the plaintiff’s claims arose from the defendants’ forum-related activities, and that the defendants failed to show that the exercise of personal jurisdiction would be unreasonable. Therefore, the Court reversed the district court’s dismissal of the action against the Czech defendants for lack of personal jurisdiction.

The Court also vacated the district court’s dismissal of nine additional foreign defendants. The district court had dismissed these defendants solely on the grounds that there was no personal jurisdiction over the Czech defendants. The Court instructed the district court to address on remand whether personal jurisdiction could be asserted against these additional defendants.

In a class action, Court of Appeal holds that the trial court did not abuse its discretion in determining that individual interests predominated where expert evidence showed that at least some class members’ pipe leaks were from poor workmanship rather than defendant’s pH control

In Malmquist v. City of Folsom Harold Malmquist filed a class action complaint against the City of Folsom (“City”) alleging that the City failed to maintain proper corrosion control measures at its water treatment plant, causing the pH level of its water to rise and become corrosive. This, in turn, led to pinhole leaks in copper pipes receiving the water, damaging persons and property. The plaintiff sought class certification, defining the class as all individuals and entities who have owned or leased real property in the City, plumbed with copper piping receiving water from the City’s plant since February 23, 2015.

The trial court denied the plaintiff’s motion for class certification finding that the plaintiff had not shown that common issues predominated over individual ones. In particular, the trial court reasoned that the existence, cause, and extent of damage to copper piping required individual proof. Plaintiff appealed.

The Court of Appeal affirmed the trial court’s decision. The Court agreed with the trial court’s conclusion that individual issues predominated over common ones.

In a class action, the Ninth Circuit holds that individual issues predominated where defendant allegedly improperly induced each plaintiff to factor their structured settlement annuity

White v. Symetra Assigned Benefits Service Company was a class action of approximately 2,000 payees who received structured settlement annuities to resolve personal injury claims. The plaintiffs later cashed out their annuities in individualized “factoring” arrangements, giving up the right to periodic payments in return for discounted lump sums. The factoring transactions were permitted by federal and state law, and they were approved by state courts, which found that factoring was in the annuitants’ best interests. In their class action lawsuit plaintiffs claimed, however, that the defendants, Symetra Life Insurance Company and Symetra Assigned Benefits Service Company (“Symetra”), wrongfully induced the factoring agreements through misrepresentations, unfair business practices, and a concealed conflict of interest. The district court certified two nationwide classes under Federal Rule of Civil Procedure 23.

The Ninth Circuit reversed finding that individual issues predominate over common ones. Specifically, the Court found that the case presents significant individualized issues of causation rooted in the personal circumstance-driven factoring transactions and the state court proceedings that validated them. Presuming that defendant’s alleged misrepresentations and omissions induced plaintiffs to enter into the factoring agreements to their detriment they would improperly assume away the intensive causation issues specific to each putative class member. 

In a class action, the Ninth Circuit holds that a settlement agreement listing universities for whom student borrowers were entitled to presumptive relief based on strong indicia of misconduct caused reputational damage and was sufficient for Article III standing

In Sweet v. Everglades College Inc. a class of over 500,000 federal student loan borrowers sued the U.S. Department of Education (“Department” for failing to process their borrower defense (“BD”) applications. The Department and the plaintiffs reached a settlement, which included automatic debt forgiveness for certain borrowers and streamlined adjudication for others. Three for-profit universities (“Schools”) listed in the settlement as committing substantial misconduct attempted to intervene, claiming they suffered “reputational harm” as a result of the settlement.

The District Court approved the settlement and denied the Schools’ motion to intervene as of right but allowed them to object to the settlement. The Schools appealed, arguing that the settlement caused them reputational and financial harm and interfered with their procedural rights.

The Ninth Circuit held that the Schools had Article III standing due to alleged reputational harm but lacked “prudential standing” to challenge the settlement because they did not demonstrate formal legal prejudice. The Court found that the dispute between the plaintiffs and the Department was not moot, as the Department’s voluntary cessation of issuing pro forma denials did not render the case moot. The Court also affirmed the district court’s denial of the Schools’ motion to intervene as of right, concluding that the Schools did not have a significantly protectable interest and failed to show prejudice from the denial of intervention as of right.