Since the Court of Appeals' expansive decision in Borden v. 400 East 55th Street Associates, 24 N.Y. 3d 382 (2014), there has been a noticeable increase in the number of CPLR Article 9 class actions, particularly, those brought on behalf of consumers, tenants and employees. This year has been no exception. First, the Appellate Division, First Department sought to protect shareholder interests in “merger tax” litigation by enhancing the standards for the approval of disclosure-only class action settlements. Gordon v. Verison Communications, 148 A.D.3d 146 (1st Dept. 2017); Dickerson, “Disclosure-Only Settlements in State Courts,” N.Y.L.J. (Sept. 14, 2017). Second, the First Department sought to protect employees by declining to enforce an arbitration agreement as violative of the National Labor Relations Act. Gold v. New York Life Insurance Company, 2017 N.Y. App. Div. LEXIS 5627 (1st Dept. 2017); Dickerson, “New York State Class Actions: Taking a Stand for Labor,” N.Y.L.J. (Aug. 10, 2017).

But That's Not All

There is more good news to include (1) the first certified real property mass tort class action in recent memory (also from the First Department); (2) the certification of and, in some cases, the settlement of, numerous class actions brought on behalf of employees and/or independent contractors including the Buffalo Jills (the Fourth Department), and consumers including Metropolitan Museum of Art fans; (3) the recognition of the viability of a tax refund claim brought on behalf of a class of taxpayers (the Third Department); and (4) the application of the tolling doctrine as set forth in American Pipe & Constr. Co. v. Utah, 414 U.S. 538 (1974) and Crown, Cork & Seal Co. v. Parker, 462 U.S. 345 (1983) to successive class actions.

Mass Tort Class Actions

Notwithstanding legislative history mandating the use of a newly enacted (1975) CPLR Article 9 to remedy, inter alia, “mass exposure to environmental offenses,” Dickerson, “New York State Class Actions: Make It Work-Fulfill the Promise,” 74.2 Albany L.R. 711, 726-29 (2010/2011), the Appellate Division departments have with near uniformity, from Wojciehowski v. Republic Steel, 67 A.D. 2d 830 (4th Dept. 1979) (industrial generated dust damages homes) to Osarczuk v. Associated Universities, 82 A.D.3d 853 (2d Dept. 2011) (personal injury and property damage allegedly caused by various nuclear and non-nuclear materials of a hazardous and toxic nature emitted into the air, soil and groundwater) denied class certification to property damage and personal injury mass tort class actions. See Dickerson, “Class Actions: The Law of 50 States,” §6.04[9] (mass tort class actions certified in many states). This judge made “rule” now appears to have been rejected by the First Department in Roberts v. Ocean Prime, 2017 N.Y. Slip Op 1974 (1st Dept. 2017), a mass property tort class action brought on behalf of a class of residential (more than 400 apartments) and commercial tenants of a building damaged by flooding.

Superstorm Sandy

It is alleged in Roberts “that defendants were negligent in failing to properly secure the building prior to Superstorm Sandy and with respect to the remediation efforts following the storm.” In finding “commonality,” the First Department noted that “the proof at trial will consist of evidence of defendants' efforts to prevent damage in advance of the storm and to repair damage after the storm. Since the class consists of tenants in the building, common questions predominate over individual questions concerning the amount and type of damages sustained by each class member … . Any differences in proof with respect to the applicability of the warranty of habitability … as between residential tenants and commercial tenants is insufficient to overcome the significant common questions, and the court may, in its discretion, establish subclasses.” Compare Hernandez-Ortiz v. 2 Gold, 2017 N.Y. Slip Op 32029 (N.Y. Sup. 2017) (summary judgment for defendants in mass property tort class action on behalf of tenants of two buildings flooded by Hurricane Sandy).

The Buffalo Jills

In Ferrari v. The National Football League, 2017 N.Y. Slip Op 06755 (3d Dept. 2017), members of the Buffalo Jills cheerleading squad for the Buffalo Bills football franchise that performed at football games and at charity events in the community, alleged they were deliberately misclassified as independent contractors and sought wages and other benefits properly due employees. Based upon class member affidavits, the Third Department noted that “the Buffalo Jills were not paid for performing at Buffalo Bills games or for any of the hundreds of hours of practice … . They were required to model for the annual Buffalo Jills swimsuit calendar and to sell a certain number of copies of the calendar, and they were paid for those services … . They were required to sell tickets to an annual golf tournament, instruct girls at an annual cheerleading camp and attend numerous promotion events.” In finding commonality, the Third Department noted that “[W]here 'the same types of subterfuge [were] allegedly employed to pay lower wages, commonality of the claims will be found to predominate … . Here, the common questions include whether [the Buffalo Jills] were employees or independent contractors and whether defendants failed to pay them in accordance with the law.”

Other Employee Class Actions

Several class actions brought on behalf of employees seeking prevailing wages and gratuities have been certified. See G-Bowley v. The Downtown, 2017 NY Slip Op 31774 (N.Y. Sup. 2017) (hourly banquet servers seeking unpaid gratuities); Juarez v. USA Roofing, 2017 NY Slip Op 31239 (N.Y. Sup. 2017) (workers seek prevailing wages, supplemental benefits and overtime compensation); Robinson v. Big City Yonkers, 2017 N.Y. Misc. LEXIS 188 (Nassau Sup. 2017) (drivers misclassified as independent contractors; certification of CPLR Article 9 class action; certification of FLSA “collective” action); Picard v. Bigsbee Enters., 2017 N.Y. Misc. LEXIS 2051 (Albany Sup. 2017) (partial summary judgment for class of banquet servers previously certified as a class); Isufi v. Prometal Constr., 2017 N.Y. Misc. LEXIS 1190 (N.Y. Sup. 2-17) (workers seeking prevailing wages and supplemental benefits and overtime); Clemons v. A.C.I. Found., 2017 N.Y. Misc. LEXIS 1788 (N.Y. Sup. 2017) (settlement of employee class action approved including payments of service awards and attorney fees and costs); Hosue v. Calypso St. Barth, 2017 NY Slip Op 31928 (N.Y. Sup. 2017) (settlement of employee class action (off-the-clock work) approved including service awards and attorney fees and costs).

The Met's Admission Fees

Admission to the Metropolitan Museum of Art: “Should it be 'free of charge' as originally intended when the Met began operations in the 1870s or 'pay what you wish but you must pay something'. The first admission charge was authorized in the 1970s, 100 years after the Met opened.” Dickerson, “When Does 'Free of Charge' Become 'Pay What You Wish But You Must Pay Something”?, NYSBA Journal (April 2015). Class action litigation over this issue has finally been resolved with the approval of a proposed settlement in Saska v. The Metropolitan Museum of Art, 2017 NY Slip Op 31292 (N.Y. Sup. 2017), which settlement the Trial Court described as “outstanding” and “which principally requires the Museum to change its signs to more clearly and prominently inform the public that the listed admission prices are merely suggested and not mandatory … . The court does not believe a reasonable person is likely to be deceived by the new signage into thinking there is a mandatory $25 admission fee … . The only claim being settled is a claim for injunctive relief to remedy the Museum's allegedly deceptive admission policy and attendant signage as violation of GBL 349.” The Trial Court approved attorney fees and costs of $350,000 but rejected class representative service awards of $1,000 each. “[T]his court is not averse to the notion of service awards and believes in their wisdom … . However, the court does not believe it can make such an award under the State's current legislation.” See, e.g., Flemming v. Barnwell Nursing Homes & Health Facilities, 56 A.D.3d 162, 166 (3d Dept. 2008) (“New York law does not authorize incentive awards for named plaintiffs in class actions.”), aff'd on other grounds,. 15 N.Y. 3d 375 (2010).

Taxpayer Class Claims

Most states prohibit class actions brought by taxpayers challenging tax statutes and/or seeking refunds. Dickerson, “Class Actions: The Law of 50 States,” §2.01[1]. Recently, however, some courts have considered the viability of such taxpayer class claims, if brought indirectly. See, e.g., McClain v. Sav-On Drugs, 9 Cal. App. 5th 684 (Cal. App. 2017) (“We conclude that a court may create a new tax refund remedy”). In Matter of New Cingular Wireless PCS v. Tax Appeals Tribunal, 2017 NY Slip Op 06010 (3d Dept. 2017), the Third Department noted that the petitioner, an Internet service provider “erroneously billed and collected sales tax from its customers … and those taxes, in turn, were remitted to the Department of Taxation and Finance. In 2009, 54 separate class action lawsuits were filed on behalf of petitioner's customers in 44 states … . Thereafter, in June 2011, the federal court approved a global settlement agreement [Matter of AT&T Mobility Wireless Data Servs. Sales Tax, 789 F. Supp. 2d 935 (N.D. Ill. 2011)] … . The settlement … required petitioner to file a refund claim on behalf of its impacted customers … . Each settlement class member consented to (1) petitioner filing a claim for refund … (2) payment of the refund by the taxing authority to petitioner … and (3) the distribution of the next settlement funds to the customers by the escrow agent under the supervision of the court. [In addition, the] petitioner assigned all of its rights, title and interest in any refund it received to the settlement class customers.” In reversing and remanding the denial of petitioners' tax refund request by the Division of Taxation, the Third Department stated that “we acknowledge that the Division … indeed may adopt a mechanism and process for evaluating and resolving refund claim such as the one advanced by petitioner … . To our analysis, all that remains is the physical act of distributing the subject funds…in as expeditious manner as possible.”

Tolling and Successive Class Actions

In Badzio v. Americare Certified Special Services, 2017 NY Slip Op 31327 (Kings Sup. 2017), the court addressed the issue of whether successive class actions may serve to toll the statute of limitations, noting that the Eleventh Circuit Court of Appeals is the only circuit to have “expressly disallowed tolling for successive class actions even where class status in the initial class action is not determined on the merits. Ewing Industries v. Bob Wines Nursery, 795 F. 3d 1324 (11th Cir. 2015). All of the Appellate Division departments have adopted the tolling principals in American Pipe & Constr. Co. Utah, 414 U.S. 538 (1974); “however [none of them] has addressed the issue of whether the American Pipe toll applies to successive class actions … . This court finds that the rationale underlying American Pipe requires that a toll apply to successive class actions, at least where there has been no determination of class certification on the merits.” Compare Lucker v. Bayside Cemetery, 2017 N.Y. Misc. LEXIS 1826 (N.Y. Sup. 2017) (tolling does not apply to successive class actions; “A contrary result could lead to “a potentially endless succession of class actions, each tolling the [applicable limitations period] for its successor.'”).

Thomas A. Dickerson is a former Associate Justice of the Appellate Division, Second Department of the New York State Supreme Court and the author of “Class Actions: The Law of 50 States,” Law Journal Press (2017).

Since the Court of Appeals' expansive decision in Borden v. 400 East 55th Street Associates, 24 N.Y. 3d 382 (2014), there has been a noticeable increase in the number of CPLR Article 9 class actions, particularly, those brought on behalf of consumers, tenants and employees. This year has been no exception. First, the Appellate Division, First Department sought to protect shareholder interests in “merger tax” litigation by enhancing the standards for the approval of disclosure-only class action settlements. Gordon v. Verison Communications , 148 A.D.3d 146 (1st Dept. 2017); Dickerson, “Disclosure-Only Settlements in State Courts,” N.Y.L.J. (Sept. 14, 2017). Second, the First Department sought to protect employees by declining to enforce an arbitration agreement as violative of the National Labor Relations Act. Gold v. New York Life Insurance Company , 2017 N.Y. App. Div. LEXIS 5627 (1st Dept. 2017); Dickerson, “New York State Class Actions: Taking a Stand for Labor,” N.Y.L.J. (Aug. 10, 2017).

But That's Not All

There is more good news to include (1) the first certified real property mass tort class action in recent memory (also from the First Department); (2) the certification of and, in some cases, the settlement of, numerous class actions brought on behalf of employees and/or independent contractors including the Buffalo Jills (the Fourth Department), and consumers including Metropolitan Museum of Art fans; (3) the recognition of the viability of a tax refund claim brought on behalf of a class of taxpayers (the Third Department); and (4) the application of the tolling doctrine as set forth in American Pipe & Constr. Co. v. Utah , 414 U.S. 538 (1974) and Crown, Cork & Seal Co. v. Parker , 462 U.S. 345 (1983) to successive class actions.

Mass Tort Class Actions

Notwithstanding legislative history mandating the use of a newly enacted (1975) CPLR Article 9 to remedy, inter alia, “mass exposure to environmental offenses,” Dickerson, “New York State Class Actions: Make It Work-Fulfill the Promise,” 74.2 Albany L.R. 711, 726-29 (2010/2011), the Appellate Division departments have with near uniformity, from Wojciehowski v. Republic Steel , 67 A.D. 2d 830 (4th Dept. 1979) (industrial generated dust damages homes) to Osarczuk v. Associated Universities , 82 A.D.3d 853 (2d Dept. 2011) (personal injury and property damage allegedly caused by various nuclear and non-nuclear materials of a hazardous and toxic nature emitted into the air, soil and groundwater) denied class certification to property damage and personal injury mass tort class actions. See Dickerson, “Class Actions: The Law of 50 States,” §6.04[9] (mass tort class actions certified in many states). This judge made “rule” now appears to have been rejected by the First Department in Roberts v. Ocean Prime , 2017 N.Y. Slip Op 1974 (1st Dept. 2017), a mass property tort class action brought on behalf of a class of residential (more than 400 apartments) and commercial tenants of a building damaged by flooding.

Superstorm Sandy

It is alleged in Roberts “that defendants were negligent in failing to properly secure the building prior to Superstorm Sandy and with respect to the remediation efforts following the storm.” In finding “commonality,” the First Department noted that “the proof at trial will consist of evidence of defendants' efforts to prevent damage in advance of the storm and to repair damage after the storm. Since the class consists of tenants in the building, common questions predominate over individual questions concerning the amount and type of damages sustained by each class member … . Any differences in proof with respect to the applicability of the warranty of habitability … as between residential tenants and commercial tenants is insufficient to overcome the significant common questions, and the court may, in its discretion, establish subclasses.” Compare Hernandez-Ortiz v. 2 Gold, 2017 N.Y. Slip Op 32029 (N.Y. Sup. 2017) (summary judgment for defendants in mass property tort class action on behalf of tenants of two buildings flooded by Hurricane Sandy).

The Buffalo Jills

In Ferrari v. The National Football League , 2017 N.Y. Slip Op 06755 (3d Dept. 2017), members of the Buffalo Jills cheerleading squad for the Buffalo Bills football franchise that performed at football games and at charity events in the community, alleged they were deliberately misclassified as independent contractors and sought wages and other benefits properly due employees. Based upon class member affidavits, the Third Department noted that “the Buffalo Jills were not paid for performing at Buffalo Bills games or for any of the hundreds of hours of practice … . They were required to model for the annual Buffalo Jills swimsuit calendar and to sell a certain number of copies of the calendar, and they were paid for those services … . They were required to sell tickets to an annual golf tournament, instruct girls at an annual cheerleading camp and attend numerous promotion events.” In finding commonality, the Third Department noted that “[W]here 'the same types of subterfuge [were] allegedly employed to pay lower wages, commonality of the claims will be found to predominate … . Here, the common questions include whether [the Buffalo Jills] were employees or independent contractors and whether defendants failed to pay them in accordance with the law.”

Other Employee Class Actions

Several class actions brought on behalf of employees seeking prevailing wages and gratuities have been certified. See G-Bowley v. The Downtown , 2017 NY Slip Op 31774 (N.Y. Sup. 2017) (hourly banquet servers seeking unpaid gratuities); Juarez v. USA Roofing , 2017 NY Slip Op 31239 (N.Y. Sup. 2017) (workers seek prevailing wages, supplemental benefits and overtime compensation); Robinson v. Big City Yonkers, 2017 N.Y. Misc. LEXIS 188 (Nassau Sup. 2017) (drivers misclassified as independent contractors; certification of CPLR Article 9 class action; certification of FLSA “collective” action); Picard v. Bigsbee Enters., 2017 N.Y. Misc. LEXIS 2051 (Albany Sup. 2017) (partial summary judgment for class of banquet servers previously certified as a class); Isufi v. Prometal Constr., 2017 N.Y. Misc. LEXIS 1190 (N.Y. Sup. 2-17) (workers seeking prevailing wages and supplemental benefits and overtime); Clemons v. A.C.I. Found., 2017 N.Y. Misc. LEXIS 1788 (N.Y. Sup. 2017) (settlement of employee class action approved including payments of service awards and attorney fees and costs); Hosue v. Calypso St. Barth , 2017 NY Slip Op 31928 (N.Y. Sup. 2017) (settlement of employee class action (off-the-clock work) approved including service awards and attorney fees and costs).

The Met's Admission Fees

Admission to the Metropolitan Museum of Art: “Should it be 'free of charge' as originally intended when the Met began operations in the 1870s or 'pay what you wish but you must pay something'. The first admission charge was authorized in the 1970s, 100 years after the Met opened.” Dickerson, “When Does 'Free of Charge' Become 'Pay What You Wish But You Must Pay Something”?, NYSBA Journal (April 2015). Class action litigation over this issue has finally been resolved with the approval of a proposed settlement in Saska v. The Metropolitan Museum of Art , 2017 NY Slip Op 31292 (N.Y. Sup. 2017), which settlement the Trial Court described as “outstanding” and “which principally requires the Museum to change its signs to more clearly and prominently inform the public that the listed admission prices are merely suggested and not mandatory … . The court does not believe a reasonable person is likely to be deceived by the new signage into thinking there is a mandatory $25 admission fee … . The only claim being settled is a claim for injunctive relief to remedy the Museum's allegedly deceptive admission policy and attendant signage as violation of GBL 349.” The Trial Court approved attorney fees and costs of $350,000 but rejected class representative service awards of $1,000 each. “[T]his court is not averse to the notion of service awards and believes in their wisdom … . However, the court does not believe it can make such an award under the State's current legislation.” See, e.g., Flemming v. Barnwell Nursing Homes & Health Facilities , 56 A.D.3d 162, 166 (3d Dept. 2008) (“New York law does not authorize incentive awards for named plaintiffs in class actions.”), aff'd on other grounds,. 15 N.Y. 3d 375 (2010).

Taxpayer Class Claims

Most states prohibit class actions brought by taxpayers challenging tax statutes and/or seeking refunds. Dickerson, “Class Actions: The Law of 50 States,” §2.01[1]. Recently, however, some courts have considered the viability of such taxpayer class claims, if brought indirectly. See, e.g., McClain v. Sav-On Drugs , 9 Cal. App. 5th 684 (Cal. App. 2017) (“We conclude that a court may create a new tax refund remedy”). In Matter of New Cingular Wireless PCS v. Tax Appeals Tribunal , 2017 NY Slip Op 06010 (3d Dept. 2017), the Third Department noted that the petitioner, an Internet service provider “erroneously billed and collected sales tax from its customers … and those taxes, in turn, were remitted to the Department of Taxation and Finance. In 2009, 54 separate class action lawsuits were filed on behalf of petitioner's customers in 44 states … . Thereafter, in June 2011, the federal court approved a global settlement agreement [Matter of AT&T Mobility Wireless Data Servs. Sales Tax, 789 F. Supp. 2d 935 (N.D. Ill. 2011)] … . The settlement … required petitioner to file a refund claim on behalf of its impacted customers … . Each settlement class member consented to (1) petitioner filing a claim for refund … (2) payment of the refund by the taxing authority to petitioner … and (3) the distribution of the next settlement funds to the customers by the escrow agent under the supervision of the court. [In addition, the] petitioner assigned all of its rights, title and interest in any refund it received to the settlement class customers.” In reversing and remanding the denial of petitioners' tax refund request by the Division of Taxation, the Third Department stated that “we acknowledge that the Division … indeed may adopt a mechanism and process for evaluating and resolving refund claim such as the one advanced by petitioner … . To our analysis, all that remains is the physical act of distributing the subject funds…in as expeditious manner as possible.”

Tolling and Successive Class Actions

In Badzio v. Americare Certified Special Services , 2017 NY Slip Op 31327 (Kings Sup. 2017), the court addressed the issue of whether successive class actions may serve to toll the statute of limitations, noting that the Eleventh Circuit Court of Appeals is the only circuit to have “expressly disallowed tolling for successive class actions even where class status in the initial class action is not determined on the merits. Ewing Industries v. Bob Wines Nursery , 795 F. 3d 1324 (11th Cir. 2015). All of the Appellate Division departments have adopted the tolling principals in American Pipe & Constr. Co. Utah, 414 U.S. 538 (1974); “however [none of them] has addressed the issue of whether the American Pipe toll applies to successive class actions … . This court finds that the rationale underlying American Pipe requires that a toll apply to successive class actions, at least where there has been no determination of class certification on the merits.” Compare Lucker v. Bayside Cemetery, 2017 N.Y. Misc. LEXIS 1826 (N.Y. Sup. 2017) (tolling does not apply to successive class actions; “A contrary result could lead to “a potentially endless succession of class actions, each tolling the [applicable limitations period] for its successor.'”).