United States: Class Action & MDL Roundup – Q4 2021

Where the (Class) Action Is

Welcome back to the Class Action & MDL Roundup! This edition covers notable class actions from the fourth quarter of 2021.

The circuits never sleep. In the fourth quarter, the Seventh Circuit gutted a putative class action alleging violations of the FCRA but ultimately determined that the plaintiff still lacked evidence that proved actual damages. In other news, the Ninth Circuit and Northern District of California teamed up, holding that plaintiffs failed to adequately allege their claims in a wage-and-hour class action.

At the district level, a New Jersey judge granted a motion to dismiss in a putative class action brought by one of the company's customers based on denial of insurance coverage for business interruptions arising during the COVID-19 pandemic. On the other coast, a California judge denied a motion to dismiss in a products liability case involving vanilla flavoring, giving plaintiffs a chance to amend their request for certification.

We wrap up the Roundup with a summary of class action settlements finalized in the fourth quarter. We hope you enjoy this installment and, as always, welcome your feedback on this issue.

Antitrust/RICO

• Propane Tank Purchasers' Motion for Class Certification Blows Up
  
  In re Pre-filled Propane Tank Antitrust Litigation, No. 4:14-md-02567 (W.D. Mo.) (Nov. 9, 2021). Judge Fenner. Denying motion for class certification.
  
  The plaintiffs sought to certify a class of indirect purchasers of spare propane tanks and exchange propane tanks based on the theory that two of the nation's leading propane tank suppliers had conspired to reduce the fill level of tanks without a corresponding reduction in wholesale price. Judge Fenner ruled that the plaintiffs could not satisfy the predominance requirement by demonstrating a common impact—in the form of an overcharge—incurred by all or nearly all retailers and passed through to end users.
  
  The court found that there were numerous flaws in the economic models the plaintiffs relied on to show a common overcharge and pass-through. Most notably, the economic expert's use of averaging and aggregated data masked unequivocal record evidence that wholesale prices were regularly negotiated, individually set, and highly dispersed among individual retail customers. Similarly, the use of averaging and aggregated data covered up the existence of numerous uninjured class members.
  
  
• Standing Issues Don't Stand in the Way as EpiPen Decertification Bid Falls Short
  
  In re EpiPen Marketing, Sales Practices, and Antitrust Litigation, No. 2:17-md-02785 (D. Kan.) (Dec. 15, 2021). Judge Crabtree. Denying, in relevant part, motion for decertification.
  
  The Mylan defendants—marketers and sellers of the well-known EpiPen used to treat anaphylaxis—moved to decertify a state-law antitrust class. The class plaintiffs had alleged that the Mylan defendants violated certain state antitrust laws by entering an unlawful reverse payment settlement that delayed generic entry of a competing product. The Mylan defendants argued that the Supreme Court's recent TransUnion LLC v. Ramirez decision required every class member to have Article III standing to recover individual damages and that brand loyalists who would have purchased the EpiPen even if a generic was available sustained no injuries from alleged generic delay.
  
  Judge Crabtree rejected this argument, finding that the plaintiffs had come forward with a method of proving classwide injury for all EpiPen purchasers—brand loyal or not. Specifically, the plaintiffs' expert analyzed real-world data showing a precipitous drop in EpiPen prescriptions after the eventual entry of generics to the market, indicating that the EpiPen price would have decreased for all purchasers and that all class members suffered a quantifiable overcharge but for the delay scheme.

Banking & Insurance

• No Picnic in the Park Primarily Due to COVID-19, Not Government Closure Orders 
  
  Caterer's in the Park LLC v. Ohio Security Insurance Co., No. 2:20-cv-06867 (D.N.J.) (Oct. 26, 2021). Judge Arleo. Granting motion to dismiss.
  
  Judge Arleo granted Ohio Security Insurance Company's motion to dismiss a putative class action brought by one of the company's customers based on denial of insurance coverage for business interruptions arising during the COVID-19 pandemic. Before the pandemic, the customer had obtained an "all-risk" commercial property insurance policy from Ohio Security, which excluded coverage "for loss or damage caused by or resulting from any virus." Caterer's in the Park alleged that New Jersey's stay-at-home and closure orders were the predominant cause of its business interruption, while Ohio Security argued in its motion to dismiss that other federal district courts in New Jersey "have universally determined that the Closure Orders are 'inextricably tied' to COVID-19," such that the predominant cause of loss is the COVID-19 virus—not the closure orders issued in response. Following this precedent, Judge Arleo dismissed the putative class action.
• California Insurance Regulator Has Exclusive Original Jurisdiction over Rates, but Not Their Misapplication
  
  Boobuli's LLC v. State Farm Fire and Casualty Co., et al., No. 3:20-cv07074 (N.D. Cal.) (Oct. 5, 2021). Judge Orrick. Denying in part and granting in part motion to dismiss.
  
  Judge Orrick largely denied State Farm's motion to dismiss a putative class action alleging that State Farm collected or failed to return excess insurance premiums during the COVID-19 pandemic. The California Department of Insurance (DOI) ordered insurers to refund and reduce premiums to account for new levels of risk during the pandemic, and State Farm reported to the DOI that it had done so. However, plaintiff Boobuli's alleged that it received no refund or premium reduction while its business was adversely affected by mandatory closures during the pandemic, and it brought claims on behalf of all other State Farm customers that paid premiums for property and casualty insurance from March 2020 through the present, including claims for breach of the covenant of good faith and fair dealing, unjust enrichment, and violation of California's unfair competition law. In seeking dismissal, State Farm argued that all of Boobuli's claims were barred because the DOI and its insurance commissioner have exclusive original jurisdiction over insurance rates, but the court disagreed, finding that theory did not bar Boobuli's claims, which challenged misapplication of the approved rates rather than the rates themselves. 
• Claims for Pandemic Losses Dismissed
  
  Fountain Enterprises LLC, et al. v. Markel Insurance Co., No. 2:21-cv-00027 (E.D. Va.) (Oct. 26, 2021). Judge Wright Allen. Dismissing case.
  
  A Virginia district judge dismissed claims by a group of Anytime Fitness franchise owners alleging that they were entitled to insurance coverage for pandemic-related losses. In doing so, the district judge concluded that the franchise owners—who were seeking to represent a proposed class of 4,500 franchisees—failed to allege facts demonstrating that their properties had been damaged or that they had been permanently disposed of their properties. The district judge also noted that a virus exclusion within the policies barred coverage.

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