18th Annual Workplace Class Action Report - 2022 Edition

434 Annual Workplace Class Action Litigation Report: 2022 Edition Butler, et al. v. The Travelers Home And Marine Insurance Co., Case No. 2020-001285 (S.C. May 12, 2021). Plaintiffs, a group of property owners whose houses were damaged by fire, filed a class action alleging that Defendant’s insurance payout amounts incorrectly calculated the actual cash value (“ACV”) owned to them to settle their property damage claims. During proceedings in the case, the U.S. District Court for the District of South Carolina certified the following question to the South Carolina Supreme Court: “when a homeowner’s insurance policy does not define the term ‘actual cash value,’ may an insurer depreciate the cost of labor in determining the ‘actual cash value’ of a covered loss when the estimated cost to repair or replace the damaged property includes both materials and embedded labor components?” Id . at 2. The Supreme Court answered in the affirmative. The Supreme Court held that to calculate the ACV with respect to depreciation of homes, one would need to ascertain the original value of the damaged property, using the actual costs incurred to build or purchase it and then estimate the extent to which the original value declined over the years. Defendant, however, had subtracted a separate estimate of lost value for depreciation. The Supreme Court determined that when the labor cost was associated with an item of property that was embedded, the value of the item was necessarily calculated as a unit, and not the individual parts. The Supreme Court reasoned that the fact that labor cost was embedded made it impractical, if not impossible, to include depreciation for materials and not for labor to determine the ACV for damaged property. Id . at 7. Therefore, the Supreme Court ruled that it only made sense for an insurance company to include the cost of labor, and the depreciation for labor, in determining the ACV. The Supreme Court noted that the ACV would vary according to numerous variables, including how the insurer chooses to estimate for the depreciation of labor, and it made no holding on whether Defendant’s method was sufficient. The Supreme Court thus answered the certified question in the affirmative. (xix) Texas In Re Houston Astros LLC, 2021 Tex. App. LEXIS 5660 (Tex. App. July 15, 2021). Plaintiffs, a group of baseball season ticketholders, filed a class action alleging that Defendant knowingly, intentionally, and deceptively sold season tickets with full knowledge that Astros employees and representatives were engaged in a sign stealing cheating scheme in violation of Major League Baseball (“MLB”) rules. Id . at *2. Plaintiffs alleged that if they had known about the Astros’ sign stealing scheme and subsequent MLB investigation into the scheme allegations, they never would have purchased season tickets, post-season tickets, or other goods and/or services from the Astros. Id . at *2-3. Plaintiffs alleged claims for fraud by non-disclosure, violations of the Texas Deceptive Trade Practices Act, money had and received, and unjust enrichment/assumpsit. The Astros filed a Rule 91a motion to dismiss, arguing that Plaintiffs had no justiciable interest in a baseball game of a particular nature and quality and free from violations of MLB rules. In other words, the Astros asserted that Plaintiffs could not maintain a lawsuit for their disappointment over how the Astros played the game. Plaintiffs asserted that they would not have made the previous purchases had they known of the scheme and cheating. The trial court denied the Astros’ Rule 91a motion to dismiss. The Astros subsequently filed a petition for writ of mandamus to set aside the trial court’s ruling. The Texas Court of Appeals granted the Astros’ petition. The Astros contended that Plaintiffs’ claims based on the sign-stealing controversy were not legally recognized causes of action, because they were not based on what happened on the field of play. The Court of Appeals noted that although the Texas Supreme Court had not addressed the issue, the Third Circuit addressed analogous facts involving a cheating scandal of a National Football League ("NFL") team alleging breach of contract. The issue was whether the NFL Plaintiff had stated an actionable injury resulting from the cheating. The Third Circuit had found that, at best, the NFL Plaintiff possessed nothing more than a contractual right to a seat from which to watch an NFL game. Id . at *8. Since the NFL Plaintiff was allowed to enter the stadium and witnessed the "specified NFL game[s]" therefore, he suffered no cognizable injury to a legally protected right or interest. Id . at *9. Here, as to the Astros, Plaintiffs claimed that they were induced into purchasing season tickets by the Astros’ misrepresentations. Id . at *11. However, Plaintiffs did not assert that they were denied the right of entry into the field or to sit in the seats for which they purchased tickets. The Court of Appeals concluded that claims based on how a sports team plays the game are not cognizable. Id . Therefore, the Court of Appeals ruled that Plaintiffs failed to allege any legally cognizable claims on which they may recover damages. For these reasons, the Court of Appeals held that the trial court abused its discretion by denying the Astros’ motion to dismiss and it granted the petition for a writ of mandamus. Washington, et al. v. Associated Builders & Contractors Of South Texas Inc., 2021 Tex. App. LEXIS 1751 (Tex. App. March 10, 2021). The City of San Antonio passed an Amended Ordinance (“the Ordinance”)