18th Annual Workplace Class Action Report - 2022 Edition

Annual Workplace Class Action Litigation Report: 2022 Edition 659 claims. Defendants also moved to dismiss Plaintiffs’ remaining claims pursuant to Rule 12(b)(6) for failure to state a valid claim for relief. As to Count I alleging fraudulent concealment, Plaintiffs alleged that Defendants concealed the facts of a known danger, namely the dangers of exposure to highly toxic, unsafe, and injurious content while providing content moderation services. Because Plaintiffs failed to plead facts sufficient to state a plausible claim for fraudulent concealment and failed to allege acts of fraud with the specificity required under Rule 9(b), the Court granted the motion to dismiss with regard to Count I. As to Counts II and III, Plaintiffs alleged that Defendant negligently caused them to be at risk of developing serious mental health injuries through their content moderation supervision and provision of moderation software. Because both Counts II and III omitted factual allegations as to the element of physical impact, which was required under Florida law before a Plaintiff may recover for mental or emotional distress caused by negligence, the Court granted Defendant’s motion to dismiss as to Counts II and III. Count IV of Plaintiffs’ complaint alleged that Defendant violated the Florida Deceptive and Unfair Trade Practices Act (“FDUTPA”) by exposing Plaintiffs to dangerous content, concealing the dangers, and refusing to implement proper precautions. The Court concluded that because Plaintiffs failed to allege harm caused to consumers and because claims for personal injury were excepted under FDUTPA, Plaintiffs had also failed to state a claim for relief in Count IV. Plaintiffs also asked the Court to establish a medical monitoring fund to provide treatment and services for class members. Leaving aside the fact that Plaintiffs had not adequately alleged Defendants’ negligence, the Court found that Plaintiffs also failed to allege that any monitoring procedure existed for the alleged psychological injuries. Accordingly, the Court determined that Plaintiffs failed to state a valid claim for medical monitoring. Finally, the Court denied Plaintiffs’ request for attorneys’ fees as prevailing parties under the FDUTPA. For these reasons, the Court dismissed Plaintiffs’ complaint in its entirety. In Re Danaher Corp. Shareholder Derivative Litigation, 2021 U.S. Dist. LEXIS 119542 (D.D.C. June 28, 2021). Plaintiffs, a group of shareholders, filed a shareholder derivative class action alleging that Defendants, various members of the Board of Directors, falsely represented that Danaher Corp. was a diverse corporation even though no African-American individual served on the Board. Plaintiffs’ three-count complaint alleged claims of: (i) breach of fiduciary duty (Count I); (ii) unjust enrichment (Count II); and (iii) a violation of § 14(a) of the Securities Exchange Act and SEC Rule 14a-9 (Count III). In particular, Plaintiffs challenged company statements indicating that it “was passionate about recruiting, developing and retaining the most talented and diverse team possible,” while pointing out that the Board did not have a policy, formal or informal, with respect to the identification, selection, or consideration of specific African-American Board nominees. Id . at *3. Plaintiffs sought broad relief, including damages and an order directing the company to replace three of its current directors with two African- Americans and one other racial minority, invest $150 million in economic and social justice programs, and fill 15% of all new positions in the United States with African-Americans. Defendants moved to dismiss on the grounds that Plaintiffs failed to properly plead demand futility as required by Rule 23.1. Defendants argued that the suit should be dismissed because Plaintiffs failed to either make a demand on the Board to bring the suit or to plead with particularity that such a demand would have been futile. Defendants also moved to dismiss pursuant to Rule 12(b)(6). The Court agreed with Defendants’ position and dismissed the lawsuit. The Court noted that “black letter law” dictates that a Board of Directors manages a corporation’s affairs. Id . at *6. Derivative suits – when shareholders sue on a corporation’s behalf for wrong done to the corporation – therefore impinge on a Board’s management prerogatives. The Court reasoned that the demand requirement balances the interests of directors in managing the corporation and the interests of shareholders in challenging abuses that harm it. As such the Court opined that a shareholder properly brings a derivative suit only when the Board wrongfully refuses to act itself after the shareholder demands that it do so or when the shareholder is excused from making a demand because the Board is too conflicted to act appropriately. Plaintiffs conceded that they did not make a demand on the Board to act, but argued that it would have been futile. The Court determined that Plaintiffs had not shown that Defendants were interested – that is, faced a substantial likelihood of personal liability – as to any of Plaintiffs’ three claims. Thus, the Court held that Plaintiffs failed to allege demand futility with particularity, and it dismissed the lawsuit on that basis. In Re GM Air Conditioning Marketing & Sales Practices Litigation, 2021 U.S. Dist. LEXIS 205695 (E.D. Mich. Oct. 26, 2021). Plaintiffs in this putative consolidated class action alleged that the air conditioning systems of vehicles manufactured by Defendant General Motors ("GM") were defective. Plaintiffs asserted claims under the Magnuson-Moss Warranty Act ("MMWA"), on behalf of a nationwide class (Count I), a breach