Eighth Circuit Class Action: Employment Base Ambient Harassment

Table of Contents

This GT Report Summarizes Recent Class-Action
Decisions From Across the United States Highlights from this issue include:

  • Supreme Court holds that serving a product market in the forum state is sufficient for specific personal jurisdiction in product liability lawsuits even when the product was not designed, manufactured or sold in that market.

  • First Circuit looks to recent Massachusetts decision in upholding order compelling individual arbitration and dismissing putative class action based on an online “clickwrap” agreement.

  • Second Circuit holds that a district court can sua sponte decertify a class after class certification, even absent a significant intervening event.

  • Third Circuit finds mootness of individual plaintiff’s claim renders class claims moot.

  • Fourth Circuit rejects predominance arguments and affirms certification of class asserting breach of contract and unconscionable inducement claims.

  • Fifth Circuit rejects conditional certification process in FLSA collective actions, articulating a new standard requiring district courts to make final certification decisions before allowing cases to proceed.

  • Fifth Circuit rules that the Daubert standard applies to expert opinions at the class certification stage.

  • Sixth Circuit holds that non-expert evidence need not be admissible at the class certification stage.

  • Seventh Circuit reverses class certification where the concept of employment based “ambient harassment” is insufficient to satisfy Rule 23 requirements given the class definition.

  • Arkansas Supreme Court affirms class certification where public records and objective criteria aid in ascertaining the class.

  • Ninth Circuit remands price fixing class action for consideration of evidence that more than a “de minimis” portion of class members was not injured.

  • District court in the D.C. Circuit rules that CAFA jurisdiction is improper unless the complaint itself invokes the class action rule or mechanism.

U.S. Supreme Court | First Circuit | Second Circuit | Third Circuit | Fourth Circuit | Fifth Circuit | Sixth Circuit | Seventh Circuit | Eighth Circuit (Arkansas Supreme Court) | Ninth Circuit | Eleventh Circuit | D. C. Circuit

Seventh Circuit

Thornley v. Clearview AI, Inc., 984 F.3d 1241 (7th Cir. 2021)

Seventh Circuit holds no Article III standing to bring Section 15(c) BIPA claim in federal court without allegations of particularized injury.

Plaintiff filed a class action suit in state court, asserting violations of the Illinois Biometric Information Privacy Act (BIPA), 740 ILCS 14/15(c), against a facial recognition company that pulls data from publicly available social media sites. After defendant removed the case to federal court, plaintiff moved to remand for lack of Article III standing. The district court granted the plaintiff’s request to remand, and the Seventh Circuit affirmed.

Noting that Article III standing requires concrete and particularized injuries, the Seventh Circuit highlighted that the complaint must contain allegations supporting a specific injury, regardless of whether that injury is procedural or substantive. The court acknowledged that a plaintiff may construct her complaint under Section 15(c) of BIPA to allege a concrete injury sufficient for Article III standing. However, the Thornley plaintiff purposefully did not meet this bar by alleging that she and the putative class had not suffered any injury aside from the statutory violation. Because of this limitation, the plaintiff lacked Article III standing and could avoid removal to federal court; though the Seventh Circuit also noted that anyone falling outside of the putative class definition, i.e., those who have suffered a concrete injury, could possess standing under Article III in a separate suit.

In re Navistar MaxxForce Engines Marketing, Sales Practices, & Products Liability Litigation, 990 F.3d 1048 (7th Cir. 2021)

The Seventh Circuit held failure to opt out in a timely manner and according to the process provided by the district court results in a class-member being bound by the class-wide settlement.

This appeal arose from the district court’s order holding that intervenor’s failure to opt out under the prescribed process in a timely manner was inexcusable. Intervenor was a plaintiff in a separate case against Navistar in Ohio. Navistar sent two first-class letters to intervenor regarding the proposed settlement, and intervenor’s attorneys had actual notice of the settlement and corresponded with Navistar’s counsel regarding the settlement.

The district court held that mailing of properly addressed letters is evidence of their receipt and a disclaimer of memory does not refute receipt. Intervenor attempted to argue that notice by first-class mail is insufficient, but the Seventh Circuit held that this was “a hard line of argument to pursue,” And concluded that the undisputed knowledge of intervenor’s lawyers was imputed to intervenor. As such, intervenor was required to opt-out under the straightforward process provided for in the opt-out notice.

While a district court has discretion to permit an untimely opt out when the delay is excusable, it is not an abuse of discretion to bar such an opt out where intervenor’s counsel had actual knowledge of the settlement. The district court, “having approved a detailed process . . . was entitled to require the class members to do what they had been told or bear the consequences of inaction.”

Anderson v. Weinert Enters., 986 F.3d 773 (7th Cir. 2021)

The Seventh Circuit holds that numerosity was lacking where joinder was practical for thirty-seven identifiable class members.

This appeal arose from the district court’s denial of class certification under Fed. R. Civ. P. 23(a). The named plaintiff was a seasonal employee for defendant roofing company and asserted challenges to the defendant’s calculation of overtime wages. Without adequate support, the plaintiff could only pursue his claims under the FLSA individually, but ultimately pursued a collective action based on Wisconsin state law claims. Plaintiff moved for certification after identifying a class of thirty-seven employees who worked for the defendant between June 14, 2016, and December 31, 2018, with an additional request to include all expected hires for the 2019 season within the proposed class. The district court, however, limited the proposed class size to the 37 current and former employees that could be accounted for and held this number insufficient to satisfy numerosity requirements under Rule 23(a) given the feasibility of the joinder of all members.

The Seventh Circuit affirmed, ruling that plaintiff failed to establish the impracticability of joining all class members. The court determined that this inquiry was did not depend on the number of class members alone, but rather other factors related to the viability of joinder, such as the proposed members’ locations, the sizes of their individual claims, or the properties subject to the dispute. While noting that forty member classes often may satisfy numerosity, the court held that the district court had not abused its discretion in finding joinder practical for plaintiff’s proposed class of thirty-seven identifiable members, only two of whom lived outside a 50-mile radius of the courthouse where the lawsuit was filed.

Howard v. Cook County Sheriff’s Office, 989 F.3d 587 (7th Cir. 2021)

The Seventh Circuit reverses class certification where the concept of employment based “ambient harassment” is insufficient to satisfy commonality, typicality and predominance.

This appeal challenged a district court’s certification of a class initially comprising over 200,000 women employed throughout various departments of the Cook County Sheriff’s Office, including the jail, courthouse and health services departments. The named plaintiffs sued the Sherriff’s Office and Cook County, alleging that the defendants failed to act against the extreme sexual harassment received from the inmates, thereby contributing to a hostile work environment and gender discrimination in violation of Title VII, Section 1983, and the Fourteenth Amendment. In certifying the class, the district court emphasized the concept of “ambient harassment,” where sexual degradation saturates a workplace, creating normative and continuing indirect harassment. The district court determined that the putative class had satisfied the requirements of commonality, typicality and predominance under Rule 23 of the Federal Rules of Civil Procedure. However, the class was subsequently modified, excluding all employees from the class who had no contact with male inmates.

On an interlocutory appeal, the Seventh Circuit reversed the certification order. The court held that plaintiffs’ reliance on ambient harassment was no longer tenable once plaintiffs modified their class to exclude employees without inmate contact, because ambient harassment could no longer form a common question, as indirect harassment became a peripheral issue for the modified class. The court reiterated this point in assessing typicality, holding that the requirement was unsatisfied given that the named plaintiffs were poor proxies for class members whose claims depended on ambient harassment. The court also determined that there was not a common question that sufficiently predominated, primarily because of the wide variety of circumstances presented to the class members based upon their location throughout the workplace and their individual experiences. While the defendants had uniform policies in response to harassment, the court determined that the reasonableness of those policies was largely dependent upon the specific circumstances of the class member challenging the policy.

Indiana Univ. by & through Board of Trustees v. Thomas, 20A-PL-361, 2021 WL 1013937 (Ind. Ct. App. Mar. 17, 2021)

Indiana Court of Appeals reversed certification of classes claiming remediation of indoor mold growth was a breach of contract, where plaintiffs’ complaint sought remediation.

The Indiana Court of Appeals held that: (1) where the complaint sought remediation of indoor mold growth, class certification cannot be based on the unpleaded assertion that such remediation was a breach; and (2) where a government entity provides payments in excess of the Indiana Tort Claims Act cap of $5,000,000 contained in the Indiana Tort Claims Act (ITCA), summary judgment was appropriate on all tort claims.

This interlocutory appeal arose from the trial court’s certification of plaintiffs’ classes and denial of defendant’s partial summary judgment motion. When plaintiffs’ complaint was filed, defendant Indiana University had already gotten mold remediation efforts underway and relocated students residing in the impacted dormitories. In addition, defendant implemented compensation programs for students affected by the mold, including applying a $3,000 credit to each impacted student’s account (totaling $7,374,000) and paying an additional $237,629 for damages and losses related to the mold and mold-remediation.

The Indiana Court of Appeals reversed the trial court’s decision to certify the “Moldy Dorms” and “Noise Polluted Dorms” classes, as these classes were not included in plaintiffs’ amended complaint. The complaint sought “court-ordered remediation” and, when Indiana University undertook remediation of the mold, plaintiffs reversed course and argued in support of certification of these subclasses that defendant breached its contract by conducting the requested remediation. The Indiana Court of Appeals found that these classes were “based on claims not pled in the Plaintiffs’ amended complaint” and “refuse[d] to perpetuate the adage that no good deed goes unpunished.”

The Indiana Court of Appeals also reversed the trial court’s denial of summary judgment based upon payouts defendant had already made for tort claims. Plaintiffs had plead that “all class members were injured through the uniform unlawful conduct described” in the complaint. Defendant made payments of $3,000 to each of the residents of the impacted dormitories – payments which exceeded the aggregate liability cap in the ITCA by nearly 50%. The Court of Appeals found “that the trial court erred in denying [Defendant’s] motion for partial summary judgment” because defendant’s payments “exceeded its aggregate liability for the Plaintiffs’ tort claims under the ITCA.”

Eighth Circuit

C.J. Mahan Constr. Co. v. Betzner, 2021 Ark. 42 (Mar. 4, 2021)

Arkansas Supreme Court affirms class certification where public records and objective criteria aid ascertaining the class, and common dispositive issues predominate over individual questions of proximate cause.

The circuit court certified a class of property owners whose water systems were damaged by defendant contractor’s actions in a suit for negligence and breach of contract. The defendant appealed, arguing that the class of property owners was too difficult to ascertain because: (1) the court must determine title to all properties involved; and (2) those owning the affected water accounts may not reside at the damaged property and the class definition did not identify all those who resided at the property. The defendant also challenged the predominance requirement of Rule 23, claiming individual issues regarding proximate cause made certification inappropriate in tort actions. Finally, the defendant claimed certification on the breach of contract claims was improper.

The Arkansas Supreme Court affirmed class certification, finding first that relying on public property records to determine title would not require an “extensive or individualized fact-finding mission” and did not otherwise impede ascertaining the class. It further held that account ownership and residency were objective criteria on which to base the class, making it readily ascertainable. As to predominance, the court rejected the defendant’s position  and determined that certain questions regarding causation would be dispositive for the class as a whole. As such, the court would not be required to examine the facts as to causation for each individual class member. To the extent individual questions surfaced after the common issues were resolved, the Arkansas Supreme Court noted that the lower court had the ability to decertify the class at a later date or bifurcate proceedings. Lastly, the Court did not address the merits of the breach of contract certification because the defendant did not preserve the issue on appeal. On the preservation issue, one justice dissented, opining that the defendant’s argument was apparent and developed in his brief.

Editors: Robert J. Herrington & Stephen L. Saxl & Co-authors: Aaron Van Nostrand, Kara E. Angeletti, Andrea N. Chidyllo, Gregory Franklin & Brian D. Straw

©2021 Greenberg Traurig, LLP. All rights reserved.
National Law Review, Volume XI, Number 161

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