18th Annual Workplace Class Action Report - 2022 Edition

Annual Workplace Class Action Litigation Report: 2022 Edition 615 Roman, et al. v. Mayorkas, Case No. 20-CV-768 (C.D. Cal. July 1, 2021) . Plaintiffs filed a motion seeking a preliminary injunction requiring Defendant, the Governor of California, to reduce the population at the Adelanto correctional facility in order to promote social distancing in connection with the COVID-19 pandemic. The Court previously had granted the preliminary injunction, which was affirmed on appeal. Thereafter, the number of detainees was greatly reduced such that social distancing was sufficiently achieved. Geo Group, the owner and operator of Adelanto, filed a motion to intervene in the action, and the Court denied the motion. Geo Group argued that the intervention was necessary because it could now safely increase the detainee population given the available vaccines and the updated guidance from the Centers for Disease Control and Prevention. The Court reasoned that this matter had been ongoing for 15 months already, and Geo Group should have known that its interests would be adversely affected by the case. Id . at 3. Geo Group argued that intervention was only necessary now because its interests were no longer aligned with Defendant, and because the availability of vaccines changed the pertinent circumstances. The Court, however, found that Geo Group and Defendant’s interests were never fully aligned because although Geo Group might want to maximize the detainee population, Defendant was not contractually obligated to agree. Further, the Court reasoned that the risks of COVID-19 were constantly changing, and the reduced population at Adelanto promoted detainee safety. The Court also determined that intervention would be prejudicial to the parties at this time as they were already engaged in settlement negotiations. For these reasons, the Court denied Geo Group’s motion to intervene. Rotstain, et al. v. Mendez, 2021 U.S. App. LEXIS 3029 (5th Cir. Jan. 13, 2021). Plaintiffs, a group of investors, brought a class action against Defendants, providers of banking services to R. Allen Stanford, the perpetrator of a Ponzi scheme, alleging claims of fraudulent transfer and fraud on the theory that Defendants knew or should have known that Stanford was operating a Ponzi scheme. From amongst Plaintiffs’ counsel, the District Court created the Stanford Investors Committee ("SIC") to represent Stanford investors. In its order, the District Court likened SIC to a "committee appointed to serve in a bankruptcy case." Id . at *4. Subsequently, another group of Stanford investors as well as investment funds that purchased assignments of claims from Stanford investors moved to intervene in the class action pursuant to Rule 24(a)(2) as of right and, alternatively, as permitted by the Court. The District Court denied their motion on the basis that it was untimely and because their interests were adequately protected by the existing parties. On the movants’ appeal, the Fifth Circuit held that the District Court did not abuse its discretion in denying the request for mandatory intervention under Rule 24(a)(2). In analyzing whether the motion to intervene was timely, the Fifth Circuit considered four factors, including: (i) the length of time the movant waited to file, (ii) the prejudice to the existing parties from any delay, (iii) the prejudice to the movant if intervention was denied, and (iv) any unusual circumstances. The Fifth Circuit determined because the movants waited 18 months before moving to intervene, this factor weighed in favor of a finding of untimeliness. The Fifth Circuit likewise reasoned that fact that the existing parties would be prejudiced in the form of costly and inefficient discovery and delay of final distribution, while there was no prejudice to movants, also weighed in favor of untimeliness. Since there were no unusual circumstances militating for or against timeliness, the Fifth Circuit found that this factor was neutral. In sum, because the factors weighed in favor of a finding that the motion to intervene was untimely, the Fifth Circuit held that the District Court did not abuse its discretion in denying the motion to intervene as of right. As to the denial of permissive intervention, the Fifth Circuit pointed out that under Rule 24(b)(1)(B), the District Court may permit intervention if a timely motion is filed and the applicant has a claim or defense that shares with the main action a common question of law or fact and; furthermore, timeliness under mandatory intervention is evaluated more leniently than under permissive intervention. Thus, because the Fifth Circuit concluded that the District Court did not abuse its discretion by determining that the request for mandatory intervention was untimely, it also held that the District Court did not abuse its discretion by determining that the request for permissive intervention was untimely. Accordingly, the Fifth Circuit found that it did not have jurisdiction over the appeal of the denial of permissive intervention. For these reasons, the Fifth Circuit affirmed the District Court’s denial of intervention of right and dismissed the appeal of the order as to permissive intervention. United States, et al. v. International Union, United Automotive, Aerospace, and Agricultural Implement Workers Of America, 2021 U.S. Dist. LEXIS 80257 (E.D. Mich. April 27, 2021). The U.S. Government filed an enforcement action contending that since 2010, Defendants’ Executive Board members engaged in fraudulent and illegal transactions that included money laundering, receipt and payment of union funds for goods and services that never actually were delivered, and receipt and payment of kickbacks and bribes by certain