Class Action Basics: What Are They and When Are They Certified?

Preparing for a trial is a tense and stressful process for attorneys and their clients. Sometimes, during trial preparation, a crucial piece of evidence can come to light that may push a case from a path towards trial to a path towards a settlement agreement. A “settlement” or “compromise” under Louisiana law is just that – an agreement between the parties to settle the dispute raised in the lawsuit, usually with the exchange of a sum of money. Often, settlements are reached in the weeks leading up to trial or even on the courthouse steps.

This type of scenario occurred in Nola Title Company, LLC v. Archon Information Systems. While in the thick of trial preparation, audio recordings from one of the parties were discovered. That party concluded this evidence would be prejudicial to its case at trial, which spurred settlement negotiations. The parties eventually agreed to a compromise and notified the court of the settlement via an email to the judge’s law clerk. The next day, the attorneys reported to court and verbally outlined the terms of the settlement agreement on the official court record.

Two weeks later, the defendants hired new counsel. Two months after that, counsel for the plaintiff forwarded the formal settlement documents to memorialize the agreement that was made between the parties and entered into the court’s record. However, the defendants refused to sign the paperwork and did not timely make the payments that previously were agreed upon. Therefore, the plaintiff filed a motion to enforce the settlement agreement.

In opposition to the motion to enforce, the defendants argued: 1) that their prior counsel did not have authority to enter into the settlement agreement; and 2) that the agreement on the record of the court was invalid because it did not include a provision about the audio recording, which the defendant claimed was a key element of the agreement between the parties. After an evidentiary hearing, the trial court found that the settlement that was stated on the record was an enforceable settlement agreement.

The Louisiana Court of Appeals for the Fourth Circuit affirmed the ruling of the trial court. In its opinion, the appellate court includes a summary of the law governing settlements in Louisiana. After a thorough review of the applicable law, the court came to the following conclusions:

• The settlement agreement on the record of the court was a binding settlement agreement, even if the parties contemplated a future formal written agreement;
• When a compromise is placed on the record, the recital must include full disclosure of the material terms;
• Any “missing terms” from the recorded settlement agreement were not a material element of the settlement; and
• The defendants’ prior counsel had authority to enter into the settlement as written.

Based upon the court’s ruling, if the parties have a meeting of the minds and settlement terms are entered on the trial court record, there are no “do-overs” or “take-backs.” It is important to “make sure you are sure” when entering the crucial courthouse steps settlement agreement.

References:

Nola Title Company, LLC v. Archon Information Systems, et. al., 2022-CA-0967 (La. App. 4 Cir. 4/13/23), 360 So. 3d 166.

In the recent case of Riedel v. Fenasci,2018-0540 (La. App. 1 Cir. 12/28/18), _______ So. 3d _______, 2018 WL 6818716,home buyers sued the sellers and the involved real estate agents after mold wasdiscovered shortly following the sale. This is a common fact pattern in humidSouth Louisiana. The buyers lost in the trial court when there was no evidencethat the sellers or the agents knew of the problem. The result was affirmed bythe First Circuit Court of Appeal.

The Riedels identified mold weeks afterthe closing and filed a claim with their homeowner’s insurer. But the claim wasdenied when the insurer’s inspection revealed long- term damage, rot, anddeterioration in a ceiling due to water damage. That finding prompted thesuit.

Against the sellers, the Riedels contendedthat they “had to have known” about the moisture and mold in the home prior tothe sale. Because the home was sold “as is,” they had to establish fraudto recover. However, the sellers had not lived in the home for years and hadreceived no complaints from tenants over this time. Under such facts, the claimof fraud was not supported.

The Riedels also sued both agents for negligent misrepresentation, and their own agent for breach of fiduciary duty. In assessing the claim against the agents, the Riedel Court agreed that real estate agents are liable for negligent misrepresentation when they fail to disclose hidden defects in the property which were known or should have been known to them. The Court also agreed that a purchaser’s real estate agent owes a fiduciary duty, the highest duty of care recognized by law. Nevertheless, when the plaintiffs’ own inspector found no visible evidence of mold prior to the sale and there was no indication that the agents possessed prior knowledge of the mold, the claim against the agents was also dismissed.

Marty Golden has been practicing law based in Baton Rouge, Louisiana for over thirty years, concentrating in civil litigation primarily involving injuries, property damage, insurance coverage, and contract disputes. Much of his practice is defending and advising real estate agents in suits by property buyers and sellers, but Marty also defends other professionals, insurance companies, manufacturers, and business owners. Marty has a special interest in all things procedural, because they are the rules of the road for litigators and knowing them better than his opponent gives him a leg up in court.

Keogh Cox attorneys Andrew Blanchfield, Chris Jones, and Chelsea Payne successfully defeated class certification in an action students brought to recover a partial refund of tuition and fees they claim they were owed after in-person classes were converted to remote learning because of the COVID-19 global pandemic. See Miazza v. Board of Supervisors of Louisiana State University and Agricultural and Mechanical College.

In 2021, plaintiffs Taylor Gunter and Michael Miazza filed a lawsuit seeking a partial refund of the tuition they paid to LSU for Spring 2020 classes. They alleged that they were entitled to a partial refund of tuition and certain fees because in-person classes were cancelled in the wake of the COVID-19 pandemic. In lieu of in-person classes, remote learning went into effect after spring break, from March 30, 2020 through the end of the spring semester.

In addition to their own claims for partial refunds, the plaintiffs tried to bring the case as a class action and moved to certify a class defined as: “All students who, as of March 13, 2020, were enrolled at Louisiana State University's main campus in Baton Rouge who paid Tuition and/or Fees for the Spring 2020 semester, or on whose behalf such payment was made.”

After the completion of discovery for class certification, and after the dismissal of Plaintiff Michael Miazza’s claim, Plaintiff Taylor Gunter filed a Motion for Class Certification. After hearing, the Trial Court certified the class as alleged, finding all the requirements for class certification set forth in La. C.C.P. art. 591 were satisfied. LSU appealed the decision to the First Circuit Court of Appeals.

The First Circuit reversed the Trial Court’s judgment and found the Plaintiff failed to satisfy all of the requirements for class certification. After conducting a rigorous analysis of the class certification requirements, the Court concluded that “a multitude of individualized inquiries and proof make up the liability and damages issues essential to the putative plaintiffs’ implied contract claims.” The Court identified some of these “individualized inquiries” as follows:

• which representations in each school’s or college’s catalogs, bulletins, and website materials did the putative plaintiff rely upon in developing his or her expectation and what particular facilities and on-campus opportunities did a putative plaintiff expect to utilize;

• whether the putative plaintiff has historically utilized on-campus facilities and opportunities; which facilities and/or on-campus opportunities, if any, were necessary for a particular school's or college's course completion;

• whether a putative plaintiff was satisfied with the online instruction, course credits received, and grading options provided; and

• whether a putative plaintiff actually suffered any financial loss, mindful of each student’s particular situation.

Ultimately, the Court concluded that the record lacked sufficient evidence to support findings of offers and acceptances, where were necessary (1) to establish meetings of the mind and (2) conclude each putative plaintiff and LSU consented to an implied contract. Any determination of liability for an implied contract also is dependent upon proof of facts individual to each putative class member. Therefore, the class would degenerate into a series of individual trials.

The First Circuit concluded that certification of the case as a class action was an abuse of discretion. It reversed the Trial Court’s judgment and decertified the matter. Plaintiff filed a Writ Application with the Louisiana Supreme Court. On January 14, 2025, the Louisiana Supreme Court denied Plaintiff’s Writ Application, finally resolving the class certification issue. As a result, Plaintiff cannot pursue class certification, but rather may only pursue her own individual claim.

References:

Miazza v. Board of Supervisors of Louisiana State University and Agricultural and Mechanical College, 2023-1194 (La. App. 1 Cir. 8/9/24), 394 So.3d 874, writ denied, 2025 WL 87255 (La. 1/14/25).