Category: Class Actions

Class Action Basics: What Are They and When Are They Certified?

Sometimes, a number of people or parties will file claims, in which each party alleges the same or similar injuries that were caused by the same or similar conduct. In these circumstances, federal and Louisiana law recognize class actions as procedural devices that can be used to aggregate the parties’ claims into a single action.

The purpose and intent of class action procedure is to adjudicate and obtain res judicata effect on all common issues applicable to the representatives who bring the action. However, this res judicata effect also applies to all others who are “similarly situated,” provided they are given adequate notice of the pending class action and do not timely exercise the option to exclude themselves from the class. Class actions are commonly filed in matters that involve common facts and damages such as plant explosions, claims based upon allegedly defective products, or claims involving employment practices or civil rights violations.

Before a court can hold a trial on the merits of a class action, the court must determine whether all of the procedural requirements are met for certification of the class. In making this determination, the court rules on whether the matter may proceed as a class action or whether the named parties must bring individual claims. In Louisiana, the threshold requirements for class certification are found in La. C.C.P. art. 591(A), which provides:

A.      One or more members of a class may sue or be sued as representative parties on behalf of all, only if:

(1) The class is so numerous that joinder of all members is impracticable.

(2) There are questions of law or fact common to the class.

(3) The claims or defenses of the representative parties are typical of the claims or defenses of the class.

(4) The representative parties will fairly and adequately protect the interests of the class.

(5) The class is or may be defined objectively in terms of ascertainable criteria, such that the court may determine the constituency of the class for purposes of the conclusiveness of any judgment that may be rendered in the case.

Every one of these requirements must be met for an action to be maintained as a class action. Stated differently, the class cannot be certified if even one of these threshold requirements is not met. A party seeking class certification must also establish one of the additional requirements outlined in La. C.C.P. art. 591(B).

In Doe v. Southern Gyms, LLC, the Louisiana Supreme Court held that a court must conduct a “rigorous analysis” of the class certification requirements, to ensure that every one of them are satisfied before a case is certified as a class action. Moreover, it is the plaintiff’s burden to prove that every requirement of La. C.C.P. art. 591 is satisfied. While only the procedural requirements for class certifications are relevant to determine if a matter should be certified, the “rigorous analysis” required of the court oftentimes requires analysis of the overlapping merits of the plaintiff’s underlying claim. See Wal-Mart Stores, Inc. v. Dukes.

Whether a matter should be certified as a class action is often a contested issue involving high stakes. If it is certified, the matter proceeds as a class action, where the claims are asserted on behalf of the entire class and can result in substantial damage awards. If the matter is not certified, the claim representatives must pursue their claims individually, which leads to significantly less exposure for defendants named in the action.

Case References:

Doe v. Southern Gyms, LLC, 2012-1566 (La. 3/19/13), 112 So.3d 822, 829.
Wal-Mart Stores, Inc. v. Dukes, — U.S. —, 131 S.Ct. 2541, 2550, 180 L.Ed.2d 374 (2011).

Louisiana Supreme Court issued a significant ruling in a class action case involving tax credits for solar panels

Recently, the Louisiana Supreme Court issued a significant ruling in a class action case handled by Keogh Cox partners Chris Jones and Nancy Gilbert.  The case involved tax credits for solar panels.  The Court’s ruling overturned a lower court decision that held an Act of the Legislature unconstitutional.  After the plaintiffs’ Application for Rehearing was denied, the Court’s decision is now final.

In Ulrich, et al. v. Kimberly Robinson, Secretary of the Louisiana Department of Revenue, 2018-0534 (La. 3/26/19), 2019 WL 1395316, the class action plaintiffs were persons who purchased and installed residential solar panel systems in their homes. When they claimed the solar electric system tax credits on their 2015 state tax returns pursuant to La. R.S. 47:6030, the tax credits were denied by the Louisiana Department of Revenue, based on Act 131 of the 2015 legislative session.  Act 131 capped the maximum amount of solar panel tax credits to be granted by the Department of Revenue, and the plaintiffs’ claims were made after the cap was exhausted.

When their claims for the tax credits were denied, plaintiffs filed a declaratory judgment action seeking to declare Act 131 unconstitutional.  During the pendency of the suit in the district court, the Louisiana Legislature enacted Act 413 which provided additional funding for solar tax credits.  Under Act 131, all taxpayers whose solar panel tax credit claims were previously denied would receive the entirety of their tax credits over installments.  The district court declared Act 131 unconstitutional and concluded that Act 413 did not moot the controversy.

Because the district court declared Act 131 unconstitutional, the Department directly appealed the decision to the Louisiana Supreme Court.  Oral arguments occurred in October of 2018.  In the Court’s recent opinion, it concluded that Act 413 mooted the controversy.  According to the Court, the plaintiffs no longer maintained a “justiciable controversy” because Act 413 provided for the payment of the entirety of the previously denied tax credits.  Accordingly, the Court overruled the district court’s judgment that declared Act 131 unconstitutional.  Plaintiffs filed an Application for Rehearing and that request was recently denied, making this decision final.

Chris Jones is a partner with Keogh Cox in Baton Rouge, LA.  He focuses his practice on class actions and mass torts, and handles these matters in courts throughout the country.  He is a life-long resident of Baton Rouge, where he lives with his wife and four children.

Kids and Pets Left in Vehicles: Louisiana Legislature Makes Rescuers Immune, Maybe

Louisiana summers are hot and humid. Suffocating. Temperatures in July and August regularly exceed 100 degrees, but the temperature inside a parked car is even higher.  According to the Centers for Disease Control, the inside of a parked car can reach 130 to 172 degrees when the outdoor temperature is between 80 and 100 degrees. Cracking the windows or parking in the shade has little effect. Because it only takes 10 minutes for the interior temperature of a parked vehicle to rise 20 degrees, children and animals left alone for “just a few minutes” are at risk. On average, 37 children and hundreds of pets die of vehicular heat stroke each year. In an effort to address this problem, the Louisiana Legislature recently passed a law to encourage action.

The Legislature enacted two statutes to provide immunity from claims of property damage or trespass for any person causing damage to a motor vehicle while rescuing a minor or animal in distress. La. R.S. 37:1738 et seq. provides immunity if the person:

  1. Makes a good-faith attempt to locate the owner before entering the vehicle.
  2. Contacts local law enforcement, the fire department, or calls 911 before entering the vehicle.
  3. Determines that the vehicle is locked and has a good-faith belief that there are no other reasonable means for the minor or animal to be removed from the vehicle.
  4. Believes that removal of the minor or animal from the vehicle is necessary because the minor or animal is in imminent danger of suffering harm.
  5. Uses force that was reasonably necessary under the circumstances to enter the vehicle.
  6. Places a notice on the windshield of the vehicle providing details of the person’s contact information, the reason entry was made, the location of the minor or animal, and notice that the proper authorities have been notified.
  7. Remains with the minor or animal in a safe location reasonably close to the vehicle until emergency responders arrive. If the person cannot remain with the minor or animal, the person must do the following:
  8. For a minor: notify local law enforcement, the fire department, or the 911 operator and take the minor to the closest police station or hospital.
  9. For an animal: notify local law enforcement, the fire department, animal control, or the 911 operator and take the animal to the closest shelter.

One wonders if a person reacting in an emergency will remember to leave a detailed note or to make the call before they act. If they do not, the immunity may be lost because immunity statutes are strictly construed in Louisiana. Also, the immunity does not apply to bodily injuries suffered by a minor during the rescue activities.

So, if you see a child or animal in danger in a hot car, the law now allows you to act with immunity, maybe.

Too Much Money and No One to Give it to- The Cy Pres Doctrine

What happens when someone leaves money in a will to a charity that has closed its doors by the time the will is probated? In this strange circumstance, a court may apply the “cy pres doctrine” to answer this question. Cy pres is a French term which loosely translates to mean “as near as possible.” In modern litigation, cy pres is not only used to distribute charitable donations, but also to distribute millions of dollars left over in class action settlements.

In the example above, a court may use cy pres to transfer the donated money to a charity similar to the one that had shut down. In class actions, there are often funds left over when not enough people register to receive money under a settlement. In this situation, the court will use cy pres to decide where this money goes; but that decision is a tricky one. Courts will sometimes direct these funds to a governmental entity loosely related to what the lawsuit was about. Other times these funds will go to a charity. Whatever the choice, there are usually complaints.

In one case, a nationwide class of AOL customers agreed to a settlement in a class action filed in California. Even though class members lived all over the country, the cy pres funds went to a legal aid office in Los Angeles, where the judge’s husband served as a director. This raised some eyebrows.

In another case, Kellogg’s settled a class action filed because its advertisements claimed that frosted mini-wheats improved kids’ brain power, which -sadly- turned out not to be true. Those cy pres funds initially went to a charity designed to feed the poor. However, the court later ruled that the funds should have gone to a group that protected the public from false advertising.

As more and more cases like these garnered attention, rules were passed as to how to distribute these funds. Generally, these rules require some connection between the issues in the lawsuit and the mission of the group that gets the funds. While the United States Supreme Court has yet to address these issues, Chief Justice Roberts recently indicated that the Court may be ready to put its stamp on cy pres.

We may be “as near as possible” to some clarity in the murky law of cy pres.

When the Stakes are High: Class Actions in Louisiana

They make movies about “class actions” exactly because they can involve high stakes, with millions, even billions of dollars on the line. The class action procedure can create exposure at this level because of the large numbers of potential claims involved. Class actions are used to address losses experienced from unfair or fraudulent business practices, natural disasters, industrial explosions, or any event or action which is alleged to have damaged a large group in a similar way.

As a procedural device, the class action combines several claims (often hundreds or thousands) into a single action. A key battle in most Louisiana class actions is whether the proposed claim can properly be “certified” as a class action under Louisiana procedure. The recent Fourth Circuit decision in Duhon v. Harbor Homeowners’ Ass’n., Inc., 2016 WL 3551620 (La. App. 4 Cir. 6/30/16) addressed whether the lower court’s class “certification” was proper under Louisiana Code of Civil Procedure Article 591.

Duhon involved damages experienced following hurricanes Katrina and Rita.  In particular, the class representatives sought damages against the Harbor View Condominium Association and its insurers claiming that the association was guilty of faulty repairs following these two hurricanes. In deciding whether certification was proper, the Duhon court considered the following elements, all of which must be present to certify a proper class action:

Numerosity- the class must be so numerous that joinder of all involved persons would prove impractical;

Commonality- the case must present questions of law and fact that are common to the class;

Typicality- the claims and defenses of the representative parties must be typical of the claims or defenses of the class; and,

Adequacy of representation- the representative parties must be positioned to fairly and adequately protect the interest of the class.

After analyzing each of these “elements,” the Duhon court upheld the Trial Court’s certification of the claim as a class action. Further, the court concluded that the questions of law and fact common to the members of the class predominated over any questions affecting only individual members such that a class action was superior to other available methods to fairly and efficiently adjudicate the controversy.

While the class action procedure has its detractors, it is sometimes the only real option to address a harm to a large group. Now that the class in Duhon has been certified, the case will proceed through discovery and towards trial on the merits. Who knows, they may make a movie about it someday.

When No Higher Court Remains

On April 20, 2010, BP’s Deepwater Horizon rig exploded at a cost of eleven lives. What followed was the largest accidental marine oil spill in history.  In the aftermath, BP looked for a solution, ostensibly to cap its exposure and address a swirling PR disaster. BP began to actively negotiate a settlement.

Class Actions in a State of Undress

Almost no litigation grabs attention and headlines more than a high-profile class action. The Louisiana Supreme Court’s recent class action ruling was no exception in a case involving salacious conduct and a violation of privacy.

The plaintiff in Jane Doe v. Southern Gyms, LLC, 2012-1566 (La. 3/19/13) was an unnamed victim of a “peeping tom.” She contended that an employee of a popular gym placed a pen camera in the women’s bathroom where he would tape unsuspecting women in various states of undress. The pen camera could hold only 1-2 hours of film. The perpetrator testified that, after viewing, he would immediately delete the footage. The images of only four women were seen on the footage when it was discovered. After the employee was arrested, one of the victims filed the class action lawsuit. At issue before the Louisiana Supreme Court was whether the class action was properly certified by the Trial Court.