Justia U.S. 10th Circuit Court of Appeals Opinion Summaries

Articles Posted in Class Action
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Appellee-defendant TEP Rocky Mountain, LLC (“TEP”) operated wells that produced natural gas in Colorado. These wells were subject to various leases or royalty Appellant-intervenors Ivo Lindauer, Sidney Lindauer, Ruther Lindauer, and Diamond Minerals LLC (the “Lindauers” or the “Intervenors”), were the representatives for a class of royalty owners who filed suit in 2006 in Colorado state court, alleging that TEP had underpaid royalties on various leases and royalty agreements. In 2008, TEP and the Lindauer class entered into a settlement agreement (the “Lindauer SA”) purporting to “resolve all class claims relating to past calculation of royalt[ies]” and to “establish certain rules to govern future royalty” payments. The Lindauer SA declared that the state court would retain “continuing jurisdiction” to enforce provisions of the settlement related to “the description of past and future royalty methodologies.” Approximately eight years passed, free of incident. But on July 18, 2017, a subset of the Lindauer class (the “Sefcovic class”) initiated this action against TEP in Colorado state court, alleging that TEP had calculated and paid royalties in a manner inconsistent with the Lindauer SA and contrary to the underlying royalty agreements. TEP removed the case to federal court. Appellants intervened in the district court, seeking to dismiss the action for lack of federal subject matter jurisdiction. Through two separate motions to dismiss, the briefing from both parties "confused the bounds of federal subject matter jurisdiction and conflated that concept with the doctrines of abstention and comity, and with matters of venue and forum." Despite this misdirection, the district court properly exercised jurisdiction and rebuffed appellants’ attempts to unwind nearly eighteen months of class action litigation. After review, the Tenth Circuit concurred with the district court's judgment and affirmed it. View "Elna Sefcovic v. TEP Rocky Mountain" on Justia Law

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Plaintiff Robert Barnes filed a putative class action against defendant Security Life of Denver Insurance Company (SLD) alleging that SLD, in the course of administering life insurance policies purchased by Barnes and other similarly-situated class members, breached its contractual duties and committed the tort of conversion by imposing certain administrative costs that were not authorized under the terms of the policies. Jackson National Life Insurance Company (Jackson) moved to intervene, asserting that, as a result of reinsurance agreements entered into by SLD, Jackson was actually the entity responsible for administering Barnes’s policy and numerous other policies listed within the putative class. The district court denied Jackson’s motion. After reviewing the parties’ briefs and the record on appeal, the Tenth Circuit concluded Jackson established the requirements for intervention as of right, and accordingly reversed the decision of the district court and remanded with directions to grant Jackson’s motion to intervene. View "Barnes v. Security Life of Denver" on Justia Law

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Defendant Chaparral Energy, L.L.C. (Chaparral) operated approximately 2,500 oil and gas wells in Oklahoma. Plaintiffs Naylor Farms, Inc. and Harrel’s, L.L.C. (collectively, Naylor Farms) had royalty interests in some of those wells. According to Naylor Farms, Chaparral systematically underpaid Naylor Farms and other similarly situated royalty owners by improperly deducting from their royalty payments certain gas-treatment costs that Naylor Farms contended Chaparral was required to shoulder under Oklahoma law. Naylor Farms brought a putative class-action lawsuit against Chaparral and moved to certify the class under Rule 23 of the Federal Rules of Civil Procedure. The district court granted Naylor Farms’ motion to certify, and Chaparral appealed the district court’s certification order. After review, the Tenth Circuit concluded Chaparral failed to demonstrate the district court’s decision to certify the class fell outside “the bounds of rationally available choices given the facts and law involved in the matter at hand.” View "Naylor Farms v. Chaparral Energy" on Justia Law

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Defendants-Appellees Air Methods Corporation and Rocky Mountain Holdings, LLC provide air ambulance services. Defendants provided air ambulance services to Plaintiffs-Appellants, or in some cases to their minor children. Plaintiffs dispute their obligation to pay the full amounts charged by Defendants because Plaintiffs claim to have never agreed with Defendants on a price for their services. Plaintiffs filed suit, asserting jurisdiction under the Class Action Fairness Act, 28 U.S.C. 1332(d), to determine what, if any, amounts they owe Defendants. Plaintiffs also sought to recover any excess payments already made to Defendants. Defendants moved to dismiss, arguing that Plaintiffs’ claims were pre-empted by the Airline Deregulation Act (ADA), 49 U.S.C. 41713. The district court agreed and dismissed Plaintiffs’ claims with prejudice. The Tenth Circuit affirmed the district court’s dismissal of all Plaintiffs’ breach of implied contract claims, the Scarlett Plaintiffs’ declaratory judgment claim, all Plaintiffs’ unjust enrichment claims, and the Scarlett Plaintiffs’ due process claims; the Court reversed the district court’s dismissal of the Cowen Plaintiffs’ declaratory judgment claim, only with respect to the existence of contracts between the Cowen Plaintiffs and Defendants; and the Court remanded for further proceedings. View "Scarlett v. Air Methods Corporation" on Justia Law

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John Teets, a participant in an employer retirement plan, invested money in Great-West Life Annuity and Insurance Company’s investment fund which guaranteed investors would never lose their principal or the interest they accrued. The investment fund was offered to employers as an investment option for their employees’ retirement savings plans, which were governed by the Employee Retirement Income Security Act (“ERISA”). Teets later sued Great-West under ERISA, alleging Great-West breached a fiduciary duty to participants in the fund or that Great-West was a nonfiduciary party in interest that benefitted from prohibited transactions with his plan’s assets. After certifying a class of 270,000 plan participants like Mr. Teets, the district court granted summary judgment for Great-West, holding that: (1) Great-West was not a fiduciary; and (2) Mr. Teets had not adduced sufficient evidence to impose liability on Great-West as a non-fiduciary party in interest. Finding no reversible error in that judgment, the Tenth Circuit affirmed the district court’s judgment. View "Teets v. Great-West Life" on Justia Law

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Plaintiff-Appellant Rhonda Nesbitt was a former massage therapy student who attended a for-profit vocational school operated by Defendants-Appellees (“Steiner”).On behalf of a class of former students, Nesbitt brought suit claiming the students qualified as employees of Steiner under the Fair Labor Standards Act, and alleging Steiner violated the FLSA by failing to pay minimum wage. The district court granted summary judgment in favor of Steiner, holding that the students were not employees of the schools under the FLSA. Finding no reversible error in the district court’s judgment, the Tenth Circuit affirmed. View "Nesbitt v. FCNH" on Justia Law

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Au pairs and former au pairs filed a class action lawsuit against AuPairCare, Inc. (“APC”) and other au pair sponsoring companies alleging violations of antitrust laws, the Racketeer Influenced and Corrupt Organizations Act (“RICO”), the Fair Labor Standards Act (“FLSA”), federal and state minimum wage laws, and other state laws. Eventually, the au pairs amended their complaint and added two former au pairs, Juliane Harning and Laura Mejia Jimenez, who were sponsored by APC. In response, APC filed a motion to compel arbitration, which the district court denied. The district court found the arbitration provision between the parties both procedurally and substantively unconscionable and declined to enforce it. Because the arbitration provision contained only one substantively unconscionable clause, the Tenth Circuit concluded the district court abused its discretion by refusing to sever the offending clause and otherwise enforce the agreement to arbitrate. The Court therefore reversed the district court’s ruling and remanded for further proceedings. View "Beltran v. Interexchange, Inc." on Justia Law

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Matthew Ray, a former DISH Network L.L.C. employee who signed an arbitration agreement when he was employed, filed an action in the federal district court alleging violations of the Fair Labor Standards Act (“FLSA”), Colorado’s Wage Claim Act, Colorado’s Minimum Wage Act, and a common law claim for breach of contract. Dish moved to dismiss, demanding that Ray arbitrate his claims pursuant to the Agreement. Ray dismissed the lawsuit and filed with the American Arbitration Association (“AAA”), asserting the same four claims. In addition, and the focus of this case, Ray attempted to pursue his claims as a class action under Fed. R. Civ. P. 23 and a collective action under 29 U.S.C. 216(b). The arbitrator determined that the Arbitration Agreement between the two parties permitted classwide arbitration, and then stayed the arbitration to permit DISH to contest the issue in court. DISH filed a Petition to Vacate Clause Construction Arbitration Award, which the district court denied. After review, the Tenth Circuit determined the arbitrator in this case did not manifestly disregard Colorado law when he concluded that he was authorized to conduct class arbitration by the broad language of the Agreement in combination with the requirement that arbitration be conducted pursuant to the AAA’s Employment Dispute Rules. Accordingly, the district court correctly denied DISH’s petition to vacate the arbitration award. View "Dish Network v. Ray" on Justia Law

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Defendant Williams Companies, Inc. (Williams) was an energy company; its president and chief executive officer (CEO) was Defendant Alan Armstrong and its chief financial officer (CFO) was Defendant Donald Chappel. Armstrong also served on its board of directors. Defendant Williams Partners GP LLC (Williams Partners GP) was a limited-liability company owned by Williams. Armstrong was chairman of the board and CEO; and Chappel was CFO and a director. Defendant Williams Partners L.P. (WPZ) was a master limited partnership, whose general partner was Williams Partners GP. Williams owned 60% of WPZ’s limited-partnership units. Plaintiff’s case centered on merger discussions between Williams and Energy Transfer Equity L.P. (ETE), a competing energy firm. The members of the putative class purchased units of WPZ between May 13, 2015 (when Williams announced that it planned to merge with WPZ) and June 19, 2015 (when ETE announced that, despite having been rebuffed by Williams, it would seek to merge with Williams and that such a merger would preclude the merger with WPZ). The value of the units dropped significantly after this announcement. Ultimately, ETE merged with Williams and the proposed WPZ merger was not consummated. The Complaint alleged the class members paid an excessive price for WPZ units because Williams had not disclosed during the class period its merger discussions with ETE. Employees’ Retirement System of the State of Rhode Island (Plaintiff) appealed the dismissal of its amended complaint in a putative class-action suit, alleging violations of federal securities law because of the failure to disclose merger discussions that affected the value of its investment. The Tenth Circuit concluded the complaint failed to adequately allege facts establishing a duty to disclose the discussions, the materiality of the discussions, or the requisite scienter in failing to disclose the discussions. View "Employees' Retirement System v. Williams Companies" on Justia Law

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This appeal addressed whether immigration detainees housed in a private contract detention facility in Aurora, Colorado could bring claims as a class under: (1) 18 U.S.C. 1589, a provision of the Trafficking Victims Protection Act (the “TVPA”) that prohibits forced labor; and (2) Colorado unjust enrichment law. The GEO Group, Inc. (“GEO”) owned and operated the Aurora Facility under government contract. While there, Appellees rendered mandatory and voluntary services to GEO: cleaning their housing units’ common areas and performed various jobs through a voluntary work program, which paid them $1 a day. The district court certified two separate classes: (1) all detainees housed at the Aurora Facility in the past ten years (the “TVPA class”); and (2) all detainees who participated in the Aurora Facility’s voluntary work program in the past three years (the “unjust enrichment class”). On interlocutory appeal, GEO argues that the district court abused its discretion in certifying each class under Rule 23(b)(3) of the Federal Rules of Civil Procedure. It primarily contended Appellees’ TVPA and Colorado unjust enrichment claims both required predominantly individualized determinations, making class treatment inappropriate. Finding no reversible error, the Tenth Circuit affirmed class certification. View "Menocal v. The GEO Group" on Justia Law