Home > Certification of Class Actions

CLASS ACTION DEFENSE BLOG

Welcome to Michael J. Hassen's Blog. Here you will find over 2,000 articles related to class actions.

Sprint Class Action Defense Cases–Harlow v. Sprint: Kansas Federal Court Grants Class Action Treatment To Labor Law Class Action Against Sprint Alleging Systematic Failure To Properly Calculate Commissions Due Employees

Dec 17, 2008 | By: Michael J. Hassen

Class Action Complaint Alleging Computer Problems Systematically Caused Sprint to Pay Employees Less than they were Due Warranted Class Action Treatment as Common Issues – Centered on Sprint’s Computer System – Predominated Class Action Claims Kansas Federal Court Holds

Plaintiffs filed a class action against Sprint Nextel Corporation and Sprint/United Management (collectively “Sprint”) alleging labor law violations; the class action complaint asserted that a computer error caused Sprint to systematically fail to properly calculate commissions due employees of Sprint’s Business Direct Channel. Harlow v. Sprint Nextel Corp., ___ F.Supp.2d ___ (D.Kan. December 10, 2008) [Slip Opn., at 1-2]. According to the allegations underlying the class action, these computer problems resulted in Sprint employees receiving each month $500-$1000 less than the amounts they were due, _id._, at 2. The class action centered, then, on a “problem with Sprint’s computer system that affects the amount of commissions the class members received.” _Id._ Originally, the class action complaint alleged causes of action for violations of Kansas’s Wage Payment Act, breach of contract, quantum meruit, promissory estoppels and unjust enrichment, but the parties stipulated to the dismissal of all claims except the Wage Payment Act and breach of contract class action claims. _Id._, at 4-5. Plaintiffs’ attorneys moved the district court to certify the litigation as a class action; defense attorneys argued against class action treatment. _Id._, at 1. The district court determined that class action treatment was warranted and therefore granted plaintiffs’ class action certification motion.

In ruling on the class action certification motion, the federal court stressed that the class action “centers on Sprint’s computerized procedures for calculating and paying commissions and not, for example, [on] a policy-based decision by Sprint to award a particular commission to one employee over another.” Harlow, at 5. The district court stressed that “[t]his distinction is key to the certification analysis.” Id. As the district court had little difficulty in finding that the requirements for class action certification under Rule 23(a) had been met, see id., at 13-17 (discussing numerosity, commonality, typicality, and adequacy of representation), we focus here – like the court – on the class action requirements set forth in Rule 23(b)(3). And in that regard, the federal court had little difficulty in determining that a class action is a superior means of resolving the issues presented in the complaint, rejecting Sprint’s objection that “a class action of this magnitude would be unmanageable because of the individualized inquiries to each plaintiffs’ claims” because the individual questions involved damage calculations. See id., at 11-13.

Certification of Class Actions Class Action Court Decisions Employment Law Class Actions Uncategorized

Read more...

 

FDCPA Class Action Defense Cases–Quiroz v. Revenue Production Management: Illinois Federal Court Certifies Class Action Holding Requirements For Certification Of Rule 23(b)(3) Class Action Had Been Met

Dec 16, 2008 | By: Michael J. Hassen

FDCPA Class Action Complaint Warranted Class Action Treatment because Plaintiff Satisfied Requirements for Rule 23(b)(3) Class Illinois Federal Court Holds

Plaintiff filed a class action against Revenue Production Management, Inc., a debt collection agency, alleging violations of the federal Fair Debt Collection Practices Act (FDCPA); the class action complaint asserted “that Defendant had a policy and practice of violating Section 1692e of the FDCPA by: (1) sending [debt collection letters] after the expiration of the 30-day validation period outlined in the initial communication; (2) informing the consumer that the debt must be disputed in writing after expiration of the 30-day validation period outlined in the initial communication; and (3) informing the consumer that a dispute must be made within 30 days of the initial communication, after the expiration of the 30-day validation period outlined in the initial communication.” Quiroz v. Revenue Production Management, Inc., 252 F.R.D. 438, 440 (N.D. Ill. 2008). Plaintiff’s lawyers filed a motion with the district court to certify the litigation as a class action. Id. The district court concluded that class action treatment was warranted and granted plaintiff’s motion.

Plaintiff incurred debts in connection with medical treatment he received, but “[he] did not pay the debt because he believed it was covered by his employer’s workers’ compensation insurance.” Quiroz, at 440. After plaintiff defaulted on the obligation, it was assigned to defendant who sent plaintiff an initial debt collection letter on April 17, 2007. Id. It was not until June 6, 2007, however, that defendant sent a letter to plaintiff advising him that “[i]f you dispute the validity of this debt then you must notify us in writing within 30 (thirty) days of our initial notice to you.” Id. Plaintiff’s class action certification motion asserted that a Rule 23(b)(3) class action should be certified, id., at 440-41.

Certification of Class Actions Class Action Court Decisions FDCPA Class Actions Uncategorized

Read more...

 

Class Action Defense Cases–Starbucks v. Superior Court: California State Appellate Court Orders Judgment In Favor Of Starbucks In Labor Law Class Action Holding Named Plaintiffs In Class Action Suffered No Injury

Dec 15, 2008 | By: Michael J. Hassen

Class Action Seeking Statutory Damages on behalf of all Applicants could not Survive Defense Motion for Summary Judgment because Class Action Representatives Suffered no Injury and Legislature did not Intend to Permit Unaffected Individuals to Recover Statutory Damages California State Court Holds

Plaintiffs filed a class action against Starbucks alleging violations of California labor law provisions concerning information collected from prospective employees during the application process; specifically, the class action complaint asserted that Starbucks improperly asked applicants “about prior marijuana convictions that are more than two years old.” Starbucks v. Superior Court, 168 Cal.App.4th 1436 (Cal.App. 2008) [Slip Opn., at 2]. According to the class action, “Starbucks uses the same two-page job application form nationwide for store level employees” and that one of the questions asked is, “Have you been convicted of a crime in the last seven (7) years?” Id. The application makes clear that “arrests are not convictions,” and advises that a conviction “will not necessarily disqualify you for employment.” Id. The class action sought statutory damages in the amount of $200 per applicant – “a remedy which, by Starbucks’ estimation, could total a whopping $26 million.” Id. The trial court granted plaintiffs’ motion for class action treatment, certifying a class of approximately 135,000 applicants. Id. The trial court certified the class action on behalf of all applicants who completed a questionnaire with the convictions question and who sought no more than $200 in damages, id., at 5. In the trial court’s words, “The mere offering of the application containing the impermissible question is a violation of the Labor Code. [¶] Damages may be calculated simply by multiplying the probable number of applicants during the class period times $200.00.” Id. Defense attorneys moved for summary judgment of the class action claims, asserting in part that class members suffered no damage. Id., at 2. The trial court denied the motion, and defense attorneys sought extraordinary relief from the Court of Appeal, id. The California Court of Appeal reversed, concluding that “[n]othing in the statutes in question authorizes job applicants to automatically recover $200 per person without proof they were aggrieved persons with an injury the statute was designed to remedy,” and ordered the trial court to enter judgment in favor of Starbucks.

The thrust of the class action was that California prohibits employers “from asking about marijuana-related convictions that are more than two years old.” Starbucks, at 4. The class action further argued that California law permits applicants “to recover actual damages or $200 each, whichever is greater.” Id. (citations omitted). The appellate court observed, however, that Starbucks disclosed on the reverse side of the application that California applicants need not disclose marijuana-related convictions that are more than two years old, stating in full: “CALIFORNIA APPLICANTS ONLY: Applicant may omit any convictions for the possession of marijuana (except for convictions for the possessions of marijuana on school grounds or possession of concentrated cannabis) that are more than two (2) years old, and any information concerning a referral to, and participation in, any pretrial or post trial diversion program.” Id., at 2-3. Notably, each of the named plaintiffs had read the disclaimer on the reverse of the Starbucks application and each understood that they were not required to disclose any marijuana convictions that were more than two years old; moreover, none of the named plaintiffs had been arrested for or convicted of a marijuana-related crime. Id., at 4-5. The Court of Appeal summarized at page 2, “Plaintiffs’ lawsuit suffers from two fundamental flaws, either of which provides ample grounds for writ relief. First, Starbucks attempted to disclaim an interest in such prohibited information, and two of the plaintiffs understood Starbucks not to be seeking it. Second, no plaintiff had any marijuana-related convictions to reveal.”

Certification of Class Actions Class Action Court Decisions Employment Law Class Actions Uncategorized

Read more...

 

Class Action Defense Cases– Stewart v. Cheek & Zeehandelar: Ohio Federal Court Certifies (b)(2) Class Action But Refuses To Certify (b)(3) Class Action Of FDCPA Class Action Claims Against Law Firm Debt Collector

Dec 10, 2008 | By: Michael J. Hassen

FDCPA Class Action Claims Certified as a (b)(2) Class after Modification of Class Definition but (b)(3) Class Lacked Predominance as Mini-Hearings would be Required to Establish Damages for each Class Member Ohio Federal Holds

Plaintiffs filed a class action against Cheek & Zeehandelar (an Ohio-based law firm that litigates debt collection actions) and two of its attorneys alleging violations of the federal Fair Debt Collection Practices Act (FDCPA) and Ohio’s Consumer Sales Practices Act (CSPA); specifically, the class action complaint alleged that defendant “seeks to garnish or attach the property of Ohio consumers who have defaulted on credit and loan agreements, without having first investigated the nature of the debtors’ property to determine if it is legally exempt from garnishment or attachment.” Stewart v. Cheek & Zeehandelar, LLP, 252 F.R.D. 387, 388-89 (S.D. Ohio 2008). Plaintiffs moved the district court to certify the litigation as a class action: the class action certification motion sought a Rule 23(b)(2) class for declaratory and injunctive relief, and a Rule 23(b)(3) sub-class for monetary damages. Id., at 389. . Id. The district court granted plaintiffs’ motion to certify the Rule 23(b)(2) class, but denied class action treatment as to the Rule 23(b)(2) sub-class.

Ohio law permits a judgment creditor to garnish property based on an affidavit stating “that the person named in the affidavit as the garnishee may have property, other than personal earnings, of the judgment debtor that is not exempt under” Ohio or federal law. Stewart, at 389. According to the class action, defendants execute such affidavits for the purpose of attaching property without conducting a proper investigation. Defendants, by contrast, testified to procedures they had in place to ensure that the affidavits were accurate, though the person who executed the affidavits “never personally contacted the debtors to determine whether their property or funds were exempt, nor did he contact the debtors’ banks, or conduct debtors’ examinations.” Id., at 389-90. Moreover, defendants testified that they did not being sending out discovery “to ascertain the status of their property or funds” until after the class action lawsuit had been filed, id., at 390.

Certification of Class Actions Class Action Court Decisions Uncategorized

Read more...

 

Class Action Defense Cases–Carlson v. eHarmony.com: California State Trial Court Certifies Class Action Against eHarmony Granting Class Action Treatment To Claims Of Homosexual And Bisexual People Denied Services Based On Sexual Orientation

Dec 4, 2008 | By: Michael J. Hassen

Discrimination Class Action Against eHarmony.com Granted Class Action Status as to Claims by Gay, Lesbian and Bisexual People Denied Services on Basis of Sexual Orientation, but Class Action Treatment Denied as to Claims by Gay, Lesbian and Bisexual People who were “Deterred” from using eHarmony because of its Refusal to Serve Homosexual and Bisexual Individuals California State Trial Court Holds

Plaintiffs filed a class action against matchmaking website eHarmony.com alleging discrimination under California state law for failing to serve people who are homosexual or bisexual; specifically, the class action complaint asserted that eHarmony’s policy violates California’s Unruh Civil Rights Act, Cal. Civ. Code, § 51 et seq., by denying equal treatment on the basis of sexual orientation. Carlson v. eHarmony.com, Los Angeles Superior Court Case No. BC371958 (November 19, 2008) [Slip Opn., at 2]. Plaintiffs moved the trial court to certify the litigation as a class action, defining the general class as all gay, lesbian and bisexual individuals who were denied services on the basis of sexual orientation. Id. Plaintiffs also sought class action treatment on behalf of two subclasses: (1) all gay, lesbian and bisexual people who tried to use eHarmony but were denied service (essentially tracking the definition of the general class), and (2) all gay, lesbian and bisexual people who were deterred from using eHarmony because of its refusal to provide service to homosexual and bisexual individuals. Id. Defense attorneys argued that class action treatment was not warranted because “the proposed class is not ascertainable and individual issues will predominate.” Id. The trial court granted plaintiffs’ motion and certified the lawsuit as a class action with respect to the general class and first subclass, but denied class action treatment to claims brought on behalf of people “deterred” from using eHarmony’s services. Id.

In addressing the ascertainability of the proposed class, the trial court noted that the class definition first limited membership to “gay, lesbian, and bisexual” people, and that “this part of the proposed class is ascertainable” because it falls within the class of people protected by the Unruh Act. Carlson, at 4. The further limitation in the proposed definition, restricting membership to individuals “who allegedly have been ‘denied’ services,” was also ascertainable because defense attorneys “acknowledge that eHarmony.com does not offer same-sex matching services, which is the functional equivalent of denying such services to plaintiffs.” Id., at 5. As to Subclass 1, that group of individuals who “attempted” to use eHarmony’s services but could not was deemed ascertainable, id., at 6, but the group of individuals allegedly “deterred” from even attempting to use eHarmony’s services was not ascertainable because “[d]eterrence is inherently a subjective inquiry” and “individual facts would overwhelm common issues of fact and law,” id., at 6-7. Accordingly, Subclass 2 was not ascertainable, so the trial court refused to certify a class action on behalf of that proposed class. Id., at 7.

Certification of Class Actions Class Action Court Decisions Uncategorized

Read more...

 

PSLRA Class Action Defense Cases–Glazer Capital v. Magistri: Ninth Circuit Affirms Dismissal Of Class Action Holding Securities Class Action Complaint Failed To Plead Scienter Under PSLRA

Dec 3, 2008 | By: Michael J. Hassen

Securities Class Action Complaint Properly Dismissed because Class Action Failed to Satisfy Heightened Pleading Requirements under Private Securities Litigation Reform Act (PSLRA) Ninth Circuit Holds

Plaintiffs filed a class action against InVision Technologies and two of its officers alleging violations of federal securities law; the class action complaint arose because after InVision announced that it had entered into a merger agreement with General Electric, the company disclosed that the merger may not occur because of the discovery of potential violations of the Foreign Corrupt Practices Act causing an immediate drop in InVision’s stock price, even though the merger eventually went through. Glazer Capital Management, LP v. Magistri, 549 F.3d 736 (9th Cir. 2008) [Slip Opn., at 15765-66]. The class action alleged that defendants violated Section 10(b) of the Securities Exchange Act of 1934, as well as Rule 10b-5. Id., at 15768. Defense attorneys moved to dismiss the class action for failure to plead adequately falsity or scienter under the heightened standards established by the Private Securities Litigation Reform Act (PSLRA); the district court granted the motion and dismissed the class action complaint. Id., at 15766. (Plaintiffs had amended the class action complaint twice, but the district court denied them leave to file a third amended class action complaint. See id., at 15768.) The Ninth Circuit affirmed.

We do not discuss here the facts detailed in the Circuit Court’s opinion, see Glazer Capital, at 15766- 68. The pertinent facts are that, after announcing the merger agreement, (1) “on July 30, 2004, InVision issued a press release stating that an internal investigation had revealed possible violations of the FCPA in connection with certain foreign sales transactions,” and (2) “InVision announced that it had voluntarily reported the activities to the Securities and Exchange Commission (SEC) and the Department of Justice (DOJ), but warned that subsequent investigations could potentially delay or terminate the merger.” Id., at 15767. InVision’s stock price plummeted on the news, and only a few days later the class action complaint was filed. Id. Within a few months, InVision settled with DOJ and with the SEC, and the merger with GE went through. Id., at 15767-78.

Certification of Class Actions Class Action Court Decisions PSLRA/SLUSA Class Actions Uncategorized

Read more...

 

FACTA Class Action Defense Cases–Bateman v. American Multi-Cinema: California Federal Court Denies Class Action Certification Motion Holding Putative FACTA Class Action Failed Superiority Test Because Of Risk Of Excessive Damage Award

Dec 2, 2008 | By: Michael J. Hassen

Putative Class Action Alleging Violations of FACTA not Entitled to Class Action Treatment because Rule 23(b)(3)’s Superiority Requirement for Class Action Certification not Met California Federal Court Holds

Plaintiff filed a putative class action against American Multi-Cinema for violating the federal Fair and Accurate Credit Transactions Act (FACTA); specifically, the class action complaint alleged that defendant printed not only the last four digits of a consumer’s credit or debit card on the customer’s receipt, but the first four digits as well. Bateman v. American Multi-Cinema, Inc., 252 F.R.D. 647, 648 (C.D. Cal. 2008). Notably, the class action complaint did not allege that plaintiff, or any putative member of the class action, suffered any harm as a result of the violation. Id. Defendant corrected its sales practices within two weeks of the filing the class action, id. Plaintiff moved the district court to certify the litigation as a class action; the district court denied the motion on the grounds that Rule 23(b)(3)’s superiority requirement had not been met: “The Court found that if certified, the potential statutory damages to be awarded could be enormous and completely out of proportion to any harm suffered by Plaintiff.” Id. (A copy of the district court order denying plaintiff’s initial motion for class action treatment may be found here.) However, the district court denied class action treatment without prejudice pending the Ninth Circuit’s decision in Soualian v. Int’l Coffee & Tea LLC, CV 07-502-RGK (JCx), 2007 WL 4877902 (C.D. Cal. filed June 11, 2007). Soualian, however, was settled so the Ninth Circuit dismissed the appeal. Id. The district court permitted plaintiff to renew his motion for class action certification, and again denied the motion.

After summarizing the legal standard for class action certification under Rule 23, see Bateman, at 648-49, the district court summarized the legislative history of FACTA and the statutory penalties provided for FACTA violations, see id., at 649. The federal court also discussed the 2007 Congressional amendment to FACTA, which clarified that the statute was not intended to provide for private rights of action based solely on the failure of a merchant to include the expiration date of the credit/debit card on the customer’s receipt. See id., at 649-50. The amendment, however, “does not provide Defendant with a safe-harbor for truncating its credit card receipts to eight (8) digits rather than five (5).” Id., at 650. Plaintiff argued that class action treatment was warranted because Congress essentially reaffirmed that the failure to truncate the credit or debit card account numbers supported such lawsuits. Id. But the district court observed that the purpose of the statute was to prevent identity theft, and that “the congressional record also supports an inference that members of Congress were primarily concerned with credit card receipts displaying the entire credit card account number.” Id. Accordingly, the federal court concluded that “it is far from clear whether Congress intended to approve class actions for printing eight (8) digits rather than five (5).” Id. However, the court found persuasive the purpose of the statute – viz., “The purpose of this Act is to ensure that consumers suffering from any actual harm to their credit or identity are protected while simultaneously limiting abusive lawsuits that do not protect consumers but only result in increased cost to business and potentially increased prices to consumers.” Id. (quoting Pub.L. 110-241, § 2(b), 122 Stat. 1565 (June 3, 2008)). Because no one suffered any harm as a result of the technical violation of the statute, the court denied class action treatment. Id.

Certification of Class Actions Class Action Court Decisions FCRA Class Actions Uncategorized

Read more...

 

Wal-Mart Class Action Defense Cases–Robinson v. Wal-Mart: Mississippi Federal Court Grants Wal-Mart Motion To Dismiss Labor Law Class Action Holding Rule 23(b) Requirements For Class Action Treatment Could Not Be Met

Dec 1, 2008 | By: Michael J. Hassen

Labor Law Class Action Dismissed because Class Action Predominance Test of Rule 23(b) could not be Satisfied and, Absent Potential for Class Action Certification, Federal Court Lacked Subject Matter Jurisdiction because Class Action Fairness Act (CAFA) was Inapplicable Mississippi Federal Court Holds

Plaintiffs filed a class action lawsuit against Wal-Mart Stores alleging violations of Mississippi’s labor laws; specifically, the class action complaint alleged that Wal-Mart required plaintiffs to work hours “off the clock,” and to work through meal and rest periods for which they were not paid in violation of state law. Robinson v. Wal-Mart Stores, Inc., 253 F.R.D. 396, 397-98 (S.D. Miss. 2008). The class action sought to represent “all current and former hourly-paid employees of Wal-Mart Stores, Inc., in the State of Mississippi that were employed from May 28, 1999 until the present,” and prayed for compensatory and punitive damages. Id., at 398. Defense attorneys moved to dismiss the class action for lack of subject matter jurisdiction, and the district court granted the motion with leave to amend because plaintiffs had failed to allege citizenship as required to establish diversity jurisdiction, id. The amended class action complaint is “virtually identical” to the original class action complaint, and defense attorneys again moved to dismiss for lack of subject matter jurisdiction because the class action failed to allege the $5 million amount in controversy required for federal court jurisdiction under the Class Action Fairness Act (CAFA). Id. Also, the defense asked the federal court to dismiss the class action allegations in the complaint. Id. The district court granted the defense motion in part, and denied it in part.

Consistent with Fifth Circuit authority, the district court began its analysis with the jurisdictional attack under Rule 12(b)(1): “When a Rule 12(b)(1) motion is filed in conjunction with other Rule 12 motions, the court should consider the Rule 12(b)(1) jurisdictional attack before addressing any attack on the merits.” Robinson, at 398 n.1 (quoting Ramming v. United States, 281 F.3d 158, 161 (5th Cir.2001)). After noting that the burden of establishing federal court jurisdiction rested on “the party seeking to litigate in federal court,” id., at 398, the district court turned to Wal-Mart’s argument that CAFA’s $5 million amount in controversy requirement had not been met, id., at 399. Plaintiffs’ argued that the putative class consisted of 80,000 people and, accordingly, “each class member’s claim would only need to equal $62.50 to satisfy the $5,000,000 jurisdictional requirement.” Id., at 399. Plaintiffs’ noted also that they sought punitive damages, id. Defense attorneys made several arguments in support of the position that the $5 million threshold had not been met, but the district court concluded “it is not apparent, to a legal certainty, that Plaintiffs cannot recover the jurisdictional amount of $5,000,000 as claimed in their Amended Complaint.” Id. On this ground, then, the district court denied the motion to dismiss the class action, id. It rejected also Wal-Mart’s claim that the federal court lacked subject matter jurisdiction because the claims of some of the class members arose prior to CAFA’s effective date. Id., at 399-400.

Certification of Class Actions Class Action Court Decisions Class Action Fairness Act (CAFA) Employment Law Class Actions Uncategorized

Read more...

 

Class Action Defense Cases–Danvers v. Ford Motor: Third Circuit Reverses Certification Of Class Action Holding Rule 23(b)(3)’s Predominance And Superiority Tests For Class Action Treatment Had Not Been Met

Nov 25, 2008 | By: Michael J. Hassen

Class Action Complaint by Car Dealers Against Ford Arising out of Blue Oval Program Erroneously Certified as Class Action because Rule 23(b)(3)’s Predominance and Superiority Requirements not met Third Circuit Holds

Nine plaintiffs filed a putative class action against Ford on behalf of themselves and other Ford dealers; the class action complaint alleged that Ford’s Blue Oval Program violated state and federal law. Danvers Motor Co., Inc. v. Ford Motor Co., 543 F.3d 141, 142-43 (3d Cir. 2008). The federal court dismissed the class action for lack of standing, and plaintiffs filed an amended class action complaint. Id., at 143. In response to a defense motion to dismiss the amended class action, the federal court again concluded that all but one of the named plaintiffs lacked standing to prosecute the action, id. The Third Circuit reversed. See Danvers Motor Co. v. Ford Motor Co., 432 F.3d 286 (3d Cir. 2005). Plaintiffs moved the district court to certify the litigation as a class action, and the court granted the motion. Danvers, 543 F.3d at 143. The Third Circuit granted Ford leave to appeal pursuant to Rule 28 U.S.C. § 1292(b), and reversed.

Ford’s Blue Oval Program, which ran from April 2000 to March 2005, was a voluntary program extended to all Ford dealers “to improve dealer performance and customer satisfaction” by “provid[ing] cash bonus payments and other benefits to Ford dealers who improved customer satisfaction according to certain criteria.” Danvers, at 143. The class action complaint alleged that the Blue Oval Program violated the Robinson-Patman Act, the Automobile Dealer’s Day in Court Act, and various state franchise laws. Id., at 143-44. The class action alleged further that Ford breached the terms of its Sales and Service Agreement with its dealers, and sought “both injunctive relief and damages on behalf of approximately 4,000 Ford dealers.” Id., at 144. However, the Third Circuit observed that some dealers were “certified” under the Blue Oval Program while other dealers were not certified under the Program, and that “dealers expended different efforts with respect to certification, [and] the dealers were impacted by the [Program] in different ways.” Id. Indeed, the Third Circuit summarized the way in which the specific injuries allegedly suffered by the nine named plaintiffs showed those differences, see id., at 144-45.

Certification of Class Actions Class Action Court Decisions Uncategorized

Read more...

 

Class Action Defense Cases–Stewart v. Cheek & Zeehandelar: Ohio Federal Court Strikes Rule 68 Offer Of Judgment In FDCPA Class Action Holding Rule 68 Offer To Settle Individual Claims After Class Action Certification Motion Filed Cannot Moot Class Claims

Nov 18, 2008 | By: Michael J. Hassen

Class Action Claims not Rendered Moot by Rule 68 Offer of Judgment to Settle Individual Claims of Named Plaintiffs so long as Plaintiffs have not Delayed in Seeking Class Action Treatment of Litigation Ohio Federal Holds

Two class action lawsuits were filed against the law firm of Cheek & Zeehandelar, a consumer debt collection firm, alleging violations of the federal Fair Debt Collection Practices Act (FDCPA) and Ohio’s Consumer Sales Practices Act (CSPA); the class action complaints alleged that defendant “engages in misleading and deceptive debt-collection practices” and that it “uniformly fails to properly investigate whether debtor funds are lawfully subject to attachment, prior to seeking and obtaining orders of attachment. Stewart v. Cheek & Zeehandelar, LLP, 252 F.R.D. 384, 384-85 (S.D. Ohio 2008). The class actions were consolidated, and the district court ordered that plaintiffs file their motion for class action certification by February 15, 2008. Id., at 385. Prior to February 15, defendant served a Rule 68 offer of judgment on plaintiffs, which offered to compensate them for their individual claims only; the Rule 68 offer did not offer to settle the claims of the putative class. Id. Plaintiffs moved to strike the offer of judgment and, on February 15, 2008, filed their motion for certification of the litigation as a class action. Id. The district court granted plaintiffs’ motion to strike the offer of judgment.

The district court began its analysis by noting that “[t]he purpose of Rule 68 ‘is to encourage settlement and avoid litigation.’” Stewart, at 385 (quoting Marek v. Chesny, 473 U.S. 1, 5 (1985)). Rule 23 class actions, by contrast, serves to vindicate important constitutional and statutory rights by permitting individually small damage claims to be grouped together so that the amount of money involved is worth the fight. Id. Or as the Supreme Court put it, “Where it is not economically feasible to obtain relief within the traditional framework of a multiplicity of small individual suits for damages, aggrieved persons may be without any effective redress unless they may employ the class-action device.” Deposit Guar. Nat’l Bank v. Roper, 445 U.S. 326, 339 (1980). The district court observed at page 385, “The great weight of federal authority holds that a Rule 68 offer of judgment cannot moot the named plaintiffs’ claims after a motion for class certification has been filed.” (Citations omitted.) To hold otherwise would permit defendants to “unilaterally control whether the district court ever heard the certification motion,” id., at 385-86 Moreover, “Although courts are somewhat more divided about the effect of a Rule 68 offer before a class-certification motion has been filed, most have endorsed the view that the settlement offer will not moot the named plaintiffs’ claims so long as the plaintiffs have not been dilatory in bringing their certification motion.: Id., at 386 (citations omitted). After summarizing the reasons behind the majority view, the district court adopted that rule and held, further, that plaintiffs had not been dilatory in seeking class action certification. Id., at 386-87. Accordingly, the district court granted plaintiffs’ motion to strike the Rule 68 offer of judgment, id., at 387.

Certification of Class Actions Class Action Court Decisions FDCPA Class Actions Uncategorized

Read more...