18th Annual Workplace Class Action Report - 2022 Edition

522 Annual Workplace Class Action Litigation Report: 2022 Edition general rule against deciding motions for summary judgment before the class has been certified and notified. Id. The Ninth Circuit ruled that it was reasonable for the District Court to address the issues raised in the summary judgment motion first because they could have been dispositive as to whether the suit could even move forward. Id . at 124. Finally, Defendant argued that the District Court erred in ordering him to disgorge the $12 million in attorneys’ fees he received in the underlying state court litigation. Defendant contended that only some members of the class signed retainers with him and, of the remaining, only 50% of them were eligible for relief under California law. The Ninth Circuit agreed with the District Court’s decision that Defendant wronged all class members in the state court case, regardless of residency, and that he had profited $12 million from it. For these reasons, the Ninth Circuit affirmed the District Court’s ruling. Gordon, et al. v. Robinhood Financial LLC, 2021 U.S. Dist. LEXIS 13457 (E.D. Wash. Jan. 25, 2021). Plaintiff brought a class action alleging that Defendant’s "Refer a Friend" ("RAF") marketing feature from it online investment brokerage application violated the Washington Consumer Protection Act ("CPA") by virtue of the Washington Commercial Electronic Mail Act ("CEMA"). Plaintiff moved for class certification pursuant to Rule 23(b)(3), and the Court granted the motion. As to Rule 23(a)’s numerosity requirement, Plaintiff relied on a sworn affidavit substantiating that the mater potentially involved over 1,100 class members, which the Court concluded was sufficient to satisfy that requirement. With respect to commonality, Plaintiff contended that the common primary question presented by the putative class was whether Defendant’s commercial text messages sent through its RAF marketing program violated the CPA by virtue of its violation of CEMA. Defendant, for its part, argued that the recitation of Plaintiff’s legal claim in general terms did not satisfy commonality. It pointed out that Plaintiff did not explain how the issue of whether individual text message recipients consented could have a single answer for all putative class members. The Court was unpersuaded. It found that Defendant’s concern about individualized inquiries did not defeat certification and was more appropriately addressed on the merits at trial, through summary judgment, or through decertification following discovery. Therefore, the Court ruled that commonality requirement was met. Likewise, the Court rejected Defendant’s argument as to typicality and held that Plaintiff had set forth the factual circumstances that demonstrated that the claims and defenses were typical of the class. As to adequacy, the Court found no reason to doubt the competency or commitment of the class representative and class counsel, nor did the Court identify any conflicts. Therefore, the Court concluded that adequacy of representation had been established. Finally, the Court determined that Rule 23(b)(3)’s requirements of predominance and superiority were met. The Court opined that predominance was satisfied because the overarching common question in the litigation was whether Defendant violated the CPA and CEMA through its RAF program. Likewise, the Court rejected Defendant’s argument that the proposed class action was not manageable because there were a variety of procedural tools to utilize to address management concerns. For these reasons, the Court certified a class pursuant to Rule 23(b)(3). Greene, et al. v. Karpeles, 2021 U.S. Dist. LEXIS 116181 (N.D. Ill. June 22, 2021). Plaintiff, a bitcoin purchaser, sought on behalf of a putative class to hold Mark Karpeles, CEO of investment platform Mt. Gox’s, liable under a common law fraud theory for financial losses arising from Mt. Gox’s collapse. Plaintiff filed a motion for class certification pursuant to Rule 23. The Court denied the motion. Plaintiff used a Mt. Gox account and used it to buy, sell, and store bitcoins and fiat currency. Plaintiff’s theory of fraud was that the Mt. Gox’s Terms of Use falsely represented that Mt. Gox held all assets on its users’ behalf and that trades involved actual assets, that Karpeles knew those representations were false and intended to deceive Mt. Gox users, and that the users "kept assets on Mt. Gox in reliance on Karpeles’ misrepresentations." Id . at *12. The Court found that Plaintiff could not establish commonality. The Court recognized some common elements to the claims, including whether the Terms of Use contained materially false statements, whether Karpeles knew the statements to be false, and whether Karpeles intended to induce Mt. Gox’s users to act based on the statements. Id . at *15. However, the Court explained that the issue of reliance would be particular to each class member under the fraud theory advanced by Plaintiff. Id . The Court determined that to rely on the Terms of Use, a user must have been aware of them and their contents. Id . at *16. The Court thus opined that the question whether Mt. Gox users read or otherwise learned of the contents of the Terms of Use could not yield a common answer across all or even most of the members of the proposed class. Id . The Court reasoned that the putative class comprised over 30,000 users, and no reasonable fact-finder could simply assume that all or most of those users read or otherwise learned of the terms at issue. Id . The Court therefore concluded that the issue of reliance was a the heart of the fraud claim and would be hotly disputed as to each of the 30,000 members of the putative class, and