Justia Contracts Opinion Summaries

The brokerage entered into agreements with customers that set a fee for handling, postage, and insurance for mailing confirmation slips after each securities trade. Plaintiff filed claims of breach of contract and unjust enrichment, seeking class certification and recovery of fees charged since 1998. The brokerage removed to federal court under the Class Action Fairness Act, 28 U.S.C. 1332(d), or the Securities Litigation Uniform Standards Act 15 U.S.C. 78p(b) and (c) and 78bb(f), and obtained dismissal. The Seventh Circuit affirmed, first holding that SLUSA did not apply because any alleged misrepresentation was not material to decisions to buy or sell securities, but CAFA's general jurisdictional requirements were met. The agreement did not suggest that the fee represents actual costs, and it was not reasonable to read this into the agreement. Nor did the brokerage have an implied duty under New York law to charge a fee reasonably proportionate to actual costs where it notified customers in advance and they were free to decide whether to continue their accounts.

Missouri Title Loans appealed from a judgment finding that a class arbitration waiver contained in its loan agreement, promissory note, and security agreement (agreement) was unenforceable. The Supreme Court affirmed the judgment insofar as it held that the arbitration waiver was unconscionable and reversed that part of the judgment ordering that the claim be submitted to an arbitrator to determine suitability for class arbitration, holding that the appropriate remedy was to strike the entire arbitration agreement. The U.S. Supreme Court vacated the Court's judgment and remanded for further consideration in light of AT&T Mobility, LLC. v. Concepcion. Applying Concepcion, the Supreme Court affirmed in part and reversed in part, holding (1) the presence and enforcement of the class arbitration waiver did not make the arbitration clause unconscionable; (2) the formation of the agreement was unconscionable; and (3) therefore, the appropriate remedy was revocation of the arbitration clause contained within the agreement. Remanded.

Fifty-four individuals and business entities sued Appellants-Defendants Tyson Foods, Inc., Tyson Poultry, Inc., and Russell Adams (collectively, Tyson), in association with contracts under which they were to raise chickens owned by Tyson on feed supplied by the company. Tyson moved to sever the claims for separate trials. The trial judge denied the motion, allowing the plaintiffs to select eleven individuals and entities to proceed to trial under theories of violation of the Oklahoma Consumer Protection Act and fraud. The poultry growers contended that Tyson targeted them for failure by delivering unhealthy birds and feed in retaliation for their refusal to modernize operations. The jury, in a nine to three split, awarded the growers compensatory and punitive damages approaching $10 million. Alleging evidentiary errors and juror misconduct, Tyson filed a motion for new trial. The trial judge recused and the new trial motion was heard by an assigned judge. Acknowledging concerns about the conduct of the trial, the substitute judge denied the motions for new trial and judgment notwithstanding the verdict, staying further proceedings pending resolution of the appeal. Upon review, the Supreme Court held that: 1) where attorneys were advised that voir dire would be limited to questions not covered in the juror questionnaire and jurors gave incomplete, untruthful, and/or misleading answers in those documents, Appellants were entitled to a new trial; and 2) a poultry grower having no title to the chickens or feed placed with the grower for fattening and future marketing of the birds by the flock's owner is not an "aggrieved consumer" for purposes of the Consumer Protection Act. The case was remanded for further proceedings.

Plaintiff rented a car, drove 64 miles in one day, refilled the fuel tank, and returned the car to the same location from which he rented the car. In addition to rental and other fees that he does not dispute, he was charged a $13.99 fuel service fee that he challenged by filing a putative class action, claiming breach of contract, fraud, and unjust enrichment. Defendant claimed that, because plaintiff drove fewer than 75 miles during the rental period, to avoid the charge he was required to return the car with a full fuel tank and to submit a receipt. The district court dismissed, finding that the contract was not ambiguous. The Sixth Circuit affirmed, citing the voluntary payment doctrine.

Insureds, Minnesota residents, filed class action complaints against their automobile insurers alleging violations of a Minnesota statute, Minn. Stat. 65B.285, requiring insurers to provide a discount for cars which have antitheft devices and breach of contract claims based on the failure to apply the statutory discount. The court affirmed the district court's dismissal of the insureds' amended complaints, rejecting their attempts here, particularly in the absence of any indication that Minnesota's administrative remedies were inadequate, to circumvent Minnesota's administrative remedies in order to create a private right of action.

Plaintiffs-Appellants Randolph Farber, Scott Becker, and Critter Clinic (Farber) alleged that the Manager of the Defendant-Respondent State Insurance Fund (SIF or "the Fund") failed to comply with I.C. 72-915, which provides the means by which the SIF Manager may distribute a dividend to policyholders. The district court determined that the gravamen of Farber's claim implicated the statute and held that the three-year statute of limitation provided by I.C. 5-218(1) barred all claims that accrued prior to July 21, 2003. Farber timely appealed. Upon review, the Supreme Court held that the five-year statute of limitation in I.C. 5-216 applied to Farber's claim. Therefore, the Court reversed the trial court's decision and remanded the case for further proceedings.

In 2005, during plaintiff's employment, defendant issued an employee handbook, including a provision that all employment-related disputes, whether initiated by an employee or by defendant, would be "resolved only by an arbitrator through final and binding arbitration," that disputes under the Fair Labor Standards Act were among those subject to the arbitration policy, that disputes cannot be brought as class actions or in representative capacities, and that the Federal Arbitration Act was its governing authority. Plaintiff signed a receipt that reiterated the arbitration policy. After his employment ended, plaintiff filed a class action, alleging violation of the FLSA by failing to adequately compensate him and other similarly-situated employees for overtime work. The district court denied a motion to stay proceedings and compel arbitration, finding that the provision was illusory because the employer retained the right to terminate or modify the provision at any time. The Fifth Circuit affirmed, noting that under the provision the company could make amendments almost instantaneously.

This matter arose out of a dispute over whether the City of Dallas paid its firefighters and police officers in accord with a 1979 ordinance adopted pursuant to a voter-approved referendum. Claiming the City had not properly paid them, some firefighters and police officers brought a class action asserting breach of contract claims and seeking a declaratory judgment. For the reasons set out in City of Dallas v. Albert, the court concluded that: (1) the ordinance's adoption by means of referendum did not result in the City's loss of immunity from suit; (2) the City had immunity from suit as to the declaratory judgment action; (3) by non-suiting its counterclaim the City did not reinstate immunity from suit as to the Officers' claims that were pending against the City when it non-suited the counterclaim; and (4) the case must be remanded for the trial court to consider whether the Legislature waived the City's immunity by amending the Local Government Code.

Robert and Janet McKeage (Relators) sued Bass Pro Outdoor World in a five-count petition for charging a document preparation fee for purchasing a boat. Relators subsequently sought class certification of both in-state and out-of-state customers based upon the purchase agreement's choice of law provision, which required the application of Missouri law to all transactions. The circuit court certified a class that was limited to contracts entered into within the state. Relators sought relief by way of a writ of prohibition. The Supreme Court granted the writ, holding that the circuit court abused its discretion by limiting the putative class members to only those whose transactions occurred in Missouri where the class of plaintiffs that Relators sought to certify was limited to those who were charged a document preparation fee and whose contracts contained the Missouri choice of law provision.

Former customers of RCM, a subsidiary of the now-bankrupt Refco, appealed from a dismissal of their securities fraud claims against former corporate officers of Refco and Refco's former auditor. RCM operated as a securities and foreign exchange broker that traded in over-the-counter derivatives and other financial products on behalf of its clients. Appellants, investment companies and members of the putative class, claimed that appellees, former officers and directors of Refco, breached the agreements with the RCM customers when they rehypothecated or otherwise used securities and other property held in customer brokerage accounts. The district court dismissed the claims for lack of standing and failure to allege deceptive conduct. The court held that appellants have no remedy under the securities laws because, even assuming they have standing, they failed to make sufficient allegations that their agreements with RCM misled them or that RCM did not intend to comply with those agreements at the time of contracting.