Justia Contracts Opinion Summaries

Several individuals and an LLC, who own oil and gas interests in West Virginia, leased their mineral rights to EQT, a group of related energy companies. The leases, numbering nearly 3,843, required EQT to pay royalties to the lessors. During the period from January 1, 2012, to February 28, 2021, EQT extracted “wet gas” from the wells, which contains valuable natural gas liquids (NGLs) like propane and butane. EQT sold the wet gas at the wellhead to its own affiliates and paid royalties to the lessors based on the energy content (BTU) of the wet gas, not on the value of the NGLs. EQT then separated and sold the NGLs to third parties but did not pay additional royalties for these sales. In 2021, EQT notified lessors it would begin calculating royalties based on the separate value of NGLs and residue gas.The plaintiffs filed a putative class action in the United States District Court for the Northern District of West Virginia, alleging breach of contract and fraudulent concealment, and sought class certification. The district court granted partial summary judgment, finding EQT’s affiliates were its alter egos, and certified classes for both claims, later dividing the class into three subclasses based on lease language. EQT petitioned for interlocutory appeal of the class certification order.The United States Court of Appeals for the Fourth Circuit reviewed the district court’s certification order. The Fourth Circuit affirmed the certification of the breach of contract claim, holding that the class was ascertainable and that common questions of law and fact predominated, given EQT’s uniform royalty payment method and the immateriality of lease language variations under West Virginia law. However, the Fourth Circuit reversed the certification of the fraudulent concealment claim, holding that individual questions of reliance would predominate, making class treatment inappropriate for that claim. Thus, the district court’s order was affirmed in part and reversed in part. View "Glover v. EQT Corporation" on Justia Law

Russell Johnson, a resident of a continuing care retirement community operated by Stoneridge Creek, filed a class action lawsuit alleging that Stoneridge Creek unlawfully increased residents’ monthly care fees to cover its anticipated legal defense costs in ongoing litigation. Johnson claimed these increases violated several statutes, including the Health and Safety Code, the Unfair Competition Law, the Consumer Legal Remedies Act (CLRA), and the Elder Abuse Act, and breached the Residence and Care Agreement (RCA) between residents and Stoneridge Creek. The RCA allowed Stoneridge Creek to adjust monthly fees based on projected costs, prior year per capita costs, and economic indicators. In recent years, Stoneridge Creek’s budgets for legal fees rose sharply, with $500,000 allocated for 2023 and 2024, compared to much lower amounts in prior years.The Alameda County Superior Court previously denied Stoneridge Creek’s motion to compel arbitration, finding the RCA’s arbitration provision unconscionable. Johnson then moved for a preliminary injunction to prevent Stoneridge Creek from including its litigation defense costs in monthly fee increases. The trial court granted the injunction, finding a likelihood of success on Johnson’s claims under the CLRA and UCL, and determined that the fee increases were retaliatory and unlawfully shifted defense costs to residents. The court also ordered Johnson to post a $1,000 bond.The California Court of Appeal, First Appellate District, Division Four, reviewed the case and reversed the trial court’s order. The appellate court held that the fee increases did not violate the CLRA’s fee-recovery provision or other litigation fee-shifting statutes, as these statutes govern judicial awards of fees, not how a defendant funds its own legal expenses. The court further concluded that Health and Safety Code section 1788(a)(22)(B) permits Stoneridge Creek to include reasonable projections of litigation expenses in monthly fees. However, the court remanded the case for the trial court to reconsider whether the fee increases were retaliatory or excessive, and to reassess the balance of harms and the appropriate bond amount. View "Johnson v. Stoneridge Creek Pleasanton CCRC" on Justia Law

Lisa Bodenburg, an Apple customer, purchased a 200 GB iCloud data storage plan, expecting it to add to the 5 GB of free storage she already had, resulting in a total of 205 GB. When she discovered that the plan only provided 200 GB in total, she filed a putative class action against Apple, alleging breach of contract and violations of California’s consumer protection laws due to Apple’s allegedly deceptive representations about its iCloud storage plans.The United States District Court for the Northern District of California dismissed Bodenburg’s action with prejudice. The court found that Bodenburg could not state a claim for breach of contract because Apple had fulfilled its contractual obligations by providing the additional storage as described in the iCloud Legal Agreement. The court also found that Bodenburg’s claims under California’s consumer protection laws did not satisfy the “reasonable consumer” test or the heightened pleading standard of Fed. R. Civ. P. 9(b).The United States Court of Appeals for the Ninth Circuit affirmed the district court’s dismissal. The panel held that Bodenburg could not state a claim for breach of contract because the iCloud Legal Agreement did not promise an additional 200 GB of storage but rather additional storage, which Apple provided. The court also held that Bodenburg’s claims under California’s consumer protection laws failed the reasonable consumer test, as Apple’s statements were not misleading when considered in context. Additionally, the claims did not meet Rule 9(b)’s heightened pleading requirements because Bodenburg could not demonstrate that Apple’s statements were false or deceptive. Thus, the dismissal of Bodenburg’s action was affirmed. View "Bodenburg v. Apple, Inc." on Justia Law

Anthony Rojas, a student at the University of Florida, filed a class action lawsuit against the University of Florida Board of Trustees. Rojas claimed that the University breached its contract by suspending on-campus services and closing facilities during the COVID-19 pandemic, despite students being required to pay mandatory fees for these services. He also alleged that the University failed to refund these fees. The complaint included a spring 2020 tuition statement, a general statement of tuition and fee estimates for the 2019-2020 academic year, and the University’s financial liability agreement.The trial court dismissed the unjust enrichment claim but denied the University’s motion to dismiss the breach of contract claim, ruling that the complaint adequately pleaded the existence of an express contract. The University appealed, and the First District Court of Appeal reversed the trial court’s decision, holding that the claims were barred by sovereign immunity. The First District concluded that the contract alleged by Rojas did not constitute an express written contract sufficient to overcome sovereign immunity.The Supreme Court of Florida reviewed the case and quashed the First District’s decision. The Court held that the waiver-by-contract doctrine does not preclude claims based on the breach of implied covenants or conditions that do not conflict with express contract provisions. The Court found that the First District erred in requiring extraordinary specificity in government contracts and in failing to recognize permissible implied covenants. The case was remanded for further proceedings consistent with this opinion. View "Rojas v. University of Florida Board of Trustees" on Justia Law

Former students of the University of Montana filed a class action lawsuit against the university, alleging mishandling of student loan reimbursement payments. They claimed that the university's contract with Higher One Holdings, Inc. subjected them to excessive bank fees and unlawfully disclosed their personal information without consent. The university had contracted with Higher One from 2010 to 2015 to process student loan reimbursements, which involved issuing debit cards and charging various fees.The District Court of the Fourth Judicial District in Missoula County certified three classes of plaintiffs but was later partially reversed by the Montana Supreme Court, which upheld the certification of two classes and reversed the third. The case proceeded to a jury trial, where the jury found in favor of the university, concluding that it did not breach its fiduciary duty, violate privacy rights, or unjustly enrich itself.The Supreme Court of the State of Montana reviewed the case on appeal. The students raised several issues, including the admissibility of evidence regarding their banking practices, the testimony of the university's expert witness, the university's closing arguments, the admission of a fee comparison chart, and the refusal of a burden-shifting jury instruction. The court found that the District Court did not abuse its discretion in its evidentiary rulings, including allowing the university to present evidence about students' banking practices and admitting the fee comparison chart. The court also held that the expert witness's testimony was permissible and that the university's closing arguments did not prejudice the students' right to a fair trial.Ultimately, the Supreme Court of Montana affirmed the District Court's judgment in favor of the University of Montana, upholding the jury's verdict. View "Knudsen v. U. of M." on Justia Law

The case involves a class action lawsuit brought by Jacklin Romeo, Susan S. Rine, and Debra Snyder Miller against Antero Resources Corporation. The plaintiffs, who own oil and gas interests in Harrison County, West Virginia, allege that Antero breached the terms of their leases by failing to pay the full one-eighth royalty specified in the leases. They argue that Antero improperly deducted postproduction costs from the gross sale proceeds of the gas, contrary to West Virginia Supreme Court precedents in Wellman v. Energy Resources, Inc. and Estate of Tawney v. Columbia Natural Resources, L.L.C.The United States District Court for the Northern District of West Virginia, presided over by Chief Judge Thomas S. Kleeh, certified two questions to the Supreme Court of Appeals of West Virginia. The first question asked whether the requirements of Wellman and Estate of Tawney extend only to the "first available market" as opposed to the "point of sale" when the duty to market is implicated. The second question asked whether the marketable product rule extends beyond gas to require a lessee to pay royalties on natural gas liquids (NGLs) and, if so, whether lessors share in the cost of processing, manufacturing, and transporting the NGLs to sale.The Supreme Court of Appeals of West Virginia reaffirmed its previous rulings in Wellman and Estate of Tawney, holding that the requirements extend to the point of sale, not just to the first available market. The court also held that royalties are payable on NGLs, but absent express language in the lease, lessors do not share in the costs of processing, manufacturing, and transporting residue gas and NGLs to the point of sale. The court emphasized that any deductions for postproduction costs must be clearly and unambiguously stated in the lease agreements. View "Romeo v. Antero Resources Corporation" on Justia Law

In 2018, Marriott announced a data breach affecting the guest reservation database of Starwood Hotels & Resorts Worldwide, which Marriott had acquired in 2016. The breach exposed personal information of approximately 133.7 million guests, including some payment card information. Plaintiffs filed class action lawsuits against Marriott and Accenture, a third-party IT service provider for Starwood and Marriott during the breach. The cases were consolidated for pretrial proceedings in the District of Maryland.The district court initially certified multiple state-specific damages classes against Marriott and issue classes against both Marriott and Accenture. However, the court did not address the effect of a class-action waiver in the Starwood Preferred Guest Program (SPG) contract, which Marriott argued precluded class certification. The Fourth Circuit vacated the class certification, instructing the district court to consider the class-action waiver's impact.On remand, the district court again certified the classes, holding that Marriott had waived its right to enforce the class-action waiver by participating in multidistrict litigation (MDL) and by agreeing to pretrial proceedings in Maryland, contrary to the SPG contract's venue and choice-of-law provisions. The court also suggested that the class-action waiver might be unenforceable under Rule 23 of the Federal Rules of Civil Procedure.The United States Court of Appeals for the Fourth Circuit reviewed the case and reversed the district court's decision. The Fourth Circuit held that Marriott did not waive its right to enforce the class-action waiver and that the waiver was valid and enforceable. The court found that the waiver applied to the plaintiffs' claims, including consumer protection and negligence claims, as they were related to the SPG Program. Consequently, the court reversed the certification of all classes against Marriott and the issue classes against Accenture, as the latter were justified only in combination with the Marriott damages classes. View "Maldini v. Marriott International, Incorporated" on Justia Law

The plaintiff, Joshua Naranjo, filed a class action lawsuit against Doctors Medical Center of Modesto, Inc., alleging violations of the unfair competition law (UCL) and the Consumers Legal Remedies Act (CLRA) due to the hospital's practice of charging an undisclosed "Evaluation and Management Services Fee" (EMS Fee) to emergency room patients. Naranjo claimed that the fee was charged without prior notification or agreement, making it an unfair, deceptive, and unlawful practice.The Superior Court of Stanislaus County sustained the hospital's demurrer to each cause of action in Naranjo's first amended complaint (FAC) without leave to amend and entered a judgment of dismissal. Naranjo appealed, and the Court of Appeal initially reversed the judgment, finding that Naranjo had stated valid causes of action under the UCL and CLRA and for declaratory relief. The court also directed the trial court to consider any future motion by Naranjo to amend his FAC to state a breach of contract cause of action.The California Supreme Court granted review and subsequently transferred the case back to the Court of Appeal, directing it to reconsider the matter in light of its ruling in Capito v. San Jose Healthcare System, LP. In Capito, the Supreme Court held that hospitals do not have a duty under the UCL or CLRA to disclose EMS fees to emergency room patients prior to treatment beyond what is required by the statutory and regulatory scheme.Upon reconsideration, the Court of Appeal concluded that Naranjo's claims are barred to the extent they are based on an alleged duty to disclose EMS fees prior to treatment. However, the court found that Naranjo had stated a valid contract-based cause of action for declaratory relief and should be allowed to amend his FAC to state causes of action for breach of contract and violations of the UCL and CLRA, subject to specific parameters. The judgment of dismissal was reversed, and the case was remanded for further proceedings. View "Naranjo v. Doctors Medical Center of Modesto, Inc." on Justia Law

In spring 2020, Czigany Beck, a full-time student at Manhattan College, paid tuition and a comprehensive fee for the semester. Due to the COVID-19 pandemic, the college transitioned to remote learning in March 2020, and Beck received only 46% of her education in person. Beck filed a class action lawsuit against Manhattan College, claiming breach of implied contract and unjust enrichment for not refunding a portion of her tuition and fees.The United States District Court for the Southern District of New York dismissed Beck's claims. The court found that the college's statements were not specific enough to constitute a promise for in-person classes or access to on-campus facilities. The court also ruled that the comprehensive fee was nonrefundable based on the college's terms, and thus Beck's unjust enrichment claim for fees was barred. The court granted summary judgment to Manhattan College on Beck's remaining unjust enrichment claim for tuition, concluding that the college's switch to online instruction was reasonable given the pandemic.Beck appealed to the United States Court of Appeals for the Second Circuit, arguing that the district court's judgment should be reversed based on the decision in Rynasko v. New York University. Manhattan College countered with decisions from the New York Supreme Court's Appellate Division, which supported affirming the district court's judgment. The Second Circuit identified a split between federal and state courts on New York contract-law principles and certified the question to the New York Court of Appeals: whether New York law requires a specific promise to provide exclusively in-person learning to form an implied contract between a university and its students regarding tuition payments. The Second Circuit reserved decision on Beck's appeal pending the New York Court of Appeals' response. View "Beck v. Manhattan College" on Justia Law

In 2014, Emergency Medical Care Facilities, P.C. (EMCF) filed a putative class action against BlueCross BlueShield of Tennessee, Inc. (BCBST), alleging breach of contract due to a cap on certain payments for medical services. The trial court denied class certification, and the Court of Appeals affirmed. EMCF then voluntarily nonsuited its claims. After a favorable ruling in a separate lawsuit against TennCare, EMCF refiled its case against BCBST, again seeking class certification.The trial court held that collateral estoppel precluded relitigation of class certification, but the Court of Appeals reversed, stating that the prior class certification denial was not final for collateral estoppel purposes because the case had been voluntarily nonsuited.The Supreme Court of Tennessee reviewed the case to determine whether the prior denial of class certification, affirmed on appeal, was entitled to preclusive effect. The Court held that the trial court's and appellate court's decisions denying class certification in the earlier case were final and binding for purposes of collateral estoppel. The Court reasoned that the class certification issue had been fully litigated and decided, and the decision was subject to appeal, which EMCF did not pursue further. Therefore, EMCF was precluded from relitigating the class certification issue in the refiled case.The Supreme Court of Tennessee reversed the Court of Appeals' decision and remanded the case to the trial court, reinstating the order striking the class action allegations against BCBST and VSHP. The Court emphasized that the denial of class certification, affirmed on appeal, was sufficiently final to warrant preclusive effect, preventing EMCF from seeking a do-over on class certification. View "Emergency Medical Care Facilities, P.C. v. BlueCross BlueShield of Tennessee, Inc." on Justia Law