In re Briscoe: MDL (Multidistrict Litigation) And Class Action Defense Cases

District Court Denial of Motion to Remand MDL Actions Involving Opt-Out Class Members Following Class Action Settlement Agreement Does Not Warrant Writ of Mandamus (Mandate) Because Appellate Review Will Provide Adequate Relief, and District Court Ruling on Fraudulent Joinder Upheld Because Statute of Limitations Had Run on Non-diverse Defendants, Third Circuit Holds

Fraudulent joinder is discussed in separate articles which explain a plaintiff may not join a party-defendant for purposes of defeating federal court jurisdiction. MDL (Multidistrict Litigation) topics also are discussed in separate articles which explain that the Judicial Panel for Multidistrict Litigation may transfer litigation pending in multiple courts to a single district court for pretrial proceedings. The MDL cases must be remanded prior to trial, and it is incumbent upon a party to the MDL litigation to file a motion for such remand. On May 15, 2006, in a case brought by individuals who had opted out of a class action settlement agreement, the Third Circuit refused to grant a petition for writ of mandamus to review a district court order denying remand on the grounds that appellate review would be adequate, and the Third Circuit affirmed the district court’s ruling that non-diverse parties had been fraudulently joined to defeat federal court jurisdiction. In re Briscoe, 448 F.3d 201 (3d Cir. 2006).

The underlying has a tortured background. In 1997, Wyeth withdrew two diet drugs from the market – and 18,000 lawsuits followed. The Judicial Panel for Multidistrict Litigation consolidated the actions and transferred them to the Eastern District of Pennsylvania (MDL-1203). After four separate trips to the Third Circuit that “set forth various facets of the background to MDL-1203 and its class action settlement agreement,” the class action settlement was consummated. Briscoe, at 206. More than 14,000 additional lawsuits followed, brought by 30,000-35,000 individuals who had opted out of the class action settlement. The group of 127 lawsuits at issue in Briscoe had been filed in Texas state court between November 2002 and August 2003, had included as named defendants the individual doctors that had prescribed the diet drugs, and had not alleged any federal law claims. Id., at 208-09. Wyeth removed the cases to federal court and the MDL Judicial Panel transferred the cases to the docket of MDL-1203. Id., at 209.

Class Action Court Decisions Class Actions In The News Multidistrict Litigation Removal & Remand Uncategorized

Class Action Defense Cases–Prime Care of Northeast Kansas v. Humana Insurance: Tenth Circuit Rules On Removal Of Class Action Under CAFA (Class Action Fairness Act)

CAFA (Class Action Fairness Act of 2005) Allows Removal of Suit Filed Prior to CAFA’s Effective Date by Defendant Added to Suit by Amendment After CAFA’s Effective Date Tenth Circuit Holds On May 12, 2006, the Court of Appeals for the Tenth Circuit considered as a matter of first impression the question of “whether CAFA permits the removal of a class action filed before the Act’s effective date if the removing defendant was first added by amendment after the effective date.

Class Action Court Decisions Class Action Fairness Act (CAFA) Class Actions In The News Removal & Remand Uncategorized

Class Action Defense Cases–Patterson v. Dean Morris: Fifth Circuit Rules On “Commencement Of Action” Under Federal Class Action Fairness Act (CAFA)

CAFA (Class Action Fairness Act of 2005) Determination of “Commencement” of Action Turns on State Law Fifth Circuit Holds

On May 3, 2006, the Fifth Circuit Court of Appeals issued its opinion in Patterson v. Dean Morris, L.L.P., ___ F.3d ___, 2006 WL 1156388 (5th Cir. 2006), where it considered whether an action that had been filed on February 17, 2005 (prior to CAFA’s February 18, 2005 effective date), but the filing fees not paid until February 22, 2005, could be removed to federal court under CAFA (Class Action Fairness Act of 2005). Slip Opn., at 6-7. The district court remanded the consolidated actions finding that CAFA did not apply, and the Fifth Circuit affirmed. _Id._, at 6. The Fifth Circuit’s analysis turned entirely upon state law, determining when Louisiana would deem the action to have been “commenced.” In so analyzing the case, the Court joined several sister circuits in relying upon state law to determine when an action has “commenced” under CAFA.

Louisiana law permits a party to fax-file a complaint, provided that the filing fee be paid within 5 days thereof, together with a $5 “transmission fee.” If a plaintiff fails to pay the required filing fee and transmission fee, then the fax filing “shall have no force or effect.” Slip Opn., at 7 (citations omitted). In Patterson, plaintiffs paid the court $3,039 on February 22. However, on May 12 plaintiffs learned that they owed the court an additional $2,145 in fees, which they did not pay until June 14. Defendants urged that the late payment took the action outside of the Louisiana statute’s five-day deadline, so the effective date of the commencement of the lawsuit was after the effective date of CAFA. Slip Opn., at 7.

Class Action Court Decisions Class Action Fairness Act (CAFA) Removal & Remand Uncategorized

Class Action Defense Cases–Murphy Brothers v. Michetti Pipe Stringing

Removal Period Under 28 U.S.C. § 1446 Begins To Run Upon Service Of Complaint U.S. Supreme Court Holds CAFA (Class Action Fairness Act of 2005) was enacted to greatly expand access to federal courts in class actions. In class actions, defendants often benefit if they can remove the case to federal court. While CAFA contains special rules concern removal and appealability of orders granting or denying motions for remand, removal of cases to federal court generally is governed by 28 U.

Class Action Court Decisions Removal & Remand Uncategorized

Class Action Defense Cases–Abrego Abrego v. Dow Chemical

CAFA (Class Action Fairness Act of 2005) Requires Defendant Establish Removal Jurisdiction in “Mass Action” Cases and Jurisdictional Discovery Discretionary Ninth Circuit Holds

CAFA greatly expands access to federal courts to class action defendants, as well as to defendants in “mass action” cases. One question federal courts have grappled with is whether Congress intended to shift the burden from a class action defendant to establish removal jurisdiction, to a class action plaintiff to prove that the matter should be remanded to state court. On April 4, 2006, the Ninth Circuit held that CAFA does not shift the burden of proof to plaintiffs in mass action cases. Abrego Abrego v. Dow Chemical Co., 443 F.3d 676 (9th Cir. 2006).

Abrego Abrego involved a mass action brought by 1160 Panamanian workers against Dow Chemical for alleged distribution and use in Panama of a pesticide banned in the United States. Dow removed the case to federal court under 28 U.S.C. § 1332(d)(11), added by CAFA to provide federal court jurisdiction over “mass actions.” (The requirements of mass actions are discussed in a separate article.) In response to plaintiffs’ motion to remand the action to state court, Dow argued:

[U]nder CAFA and contrary to preexisting removal jurisdiction law: (1) plaintiffs bear the burden of refuting the district court’s removal jurisdiction; (2) a “mass action” is removable regardless of whether there is jurisdiction over all plaintiffs whose claims are necessary to qualify the action as a mass action; and (3) the district court must allow jurisdictional discovery to determine the amount in controversy.

443 F.3d at 677-78. The district court found that Dow had failed to establish removal jurisdiction and remanded the case to state court. Id., at 679.

Class Action Court Decisions Class Action Fairness Act (CAFA) Uncategorized

Class Action Defense Cases–Braud v. Transport Service Company

Post-CAFA (Class Action Fairness Act of 2005) Amendment of Complaint to Add Defendant Allows Removal to Federal Court by that Defendant of Suit Filed Prior to CAFA’s Effective Date Fifth Circuit Holds On April 6, 2006, the Fifth Circuit Court of Appeals considered “an issue of first impression for this court: whether amending a complaint to add a defendant ‘commences’ a new suit under the Class Action Fairness Act of 2005 (CAFA),” Braud v.

Class Action Court Decisions Class Action Fairness Act (CAFA) Removal & Remand Uncategorized

Best Buy v. Superior Court: Class Action Lawyer Permitted, Over Defense Objection, Precertification Discovery To Identify Substitute Class Action Representative California Court Holds

Plaintiff Lawyer, not Allowed to be Class Counsel and Class Representative, Rewarded with Discovery to Find New Class Action Plaintiffs

Class action case law in California “prohibits a lawyer from serving both as class representative and as counsel for the class, ” Best Buy Stores, L.P. v. Superior Court, 137 Cal.App.4th 772, 774 (Cal.App. 2006) (citing Apple Computer, Inc. v. Superior Court, 126 Cal.App.4th 1253 (Cal.App. 2005). On February 6, 2004, a plaintiff’s lawyer sought to do just that, filing a putative class action to his own name against Best Buy for alleged violations of the CLRA (Consumer Legal Remedies Act, California Civil Code §§ 1750 et seq.), unfair competition, unjust enrichment based on the theory that the “restocking fee” Best Buy charged for returned merchandise was illegal. Best Buy, at 774. Defense attorneys moved to dismiss the case, and the trial court issued an order to show cause why the motion should not be granted. Id.

The plaintiff lawyer requested that the court compel Best Buy (through a third party) to send a letter to a sampling of members of the putative class so that he could find a new class representative: the trial court granted the motion. Best Buy, at 775. Best Buy filed a petition for writ of mandate in the California Court of Appeal. The defense opposed this class action discovery order as a form of “illegal solicitation”; the appellate court disagreed with this characterization. Id., at 777. The Court agreed, however, that the privacy rights of Best Buy customers needed additional protection. Accordingly, at page 778 it held as follows:

Class Action Court Decisions Class Actions In The News Uncategorized

Merrill Lynch v. Dabit Class Action Defense Case

SLUSA (Securities Litigation Uniform Standards Act) and Pre-emption

SLUSA (Securities Litigation Uniform Standards Act) was enacted by Congress in 1998 to affect sweeping changes to federal securities laws class actions. SLUSA addresses numerous federal securities laws class actions issues including pleading, class representation, discovery, liability, attorney fee awards, expenses and more. SLUSA also sought to pre-empt state law securities class action litigation, but the Circuit Courts disagreed on the breadth of that pre-emption.

In Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Dabit, __ U.S. ___, 126 S.Ct. 1503 (2006), the United States Supreme Court issued its opinion. This opinion addresses whether the Securities Litigation Uniform Standards Act (SLUSA) “only pre-empts state-law class-action claims brought by plaintiffs who have a private remedy under federal law,” as the Second Circuit held in Dabit v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 395 F.3d 25 (2005), or whether SLUSA “also pre-empts state-law class-action claims for which federal law provides no private remedy,” as the Seventh Circuit held in Kircher v. Putnam Funds Trust, 403 F.3d 478 (7th Cir. 2005). The Supreme Court agreed with the Seventh Circuit, holding that SLUSA’s pre-emption provision was intended to be read broadly, and pre-empted state-law class-action claims brought not only by purchasers and sellers of securities, but also by holders of securities. As so read, SLUSA pre-empted state-law claims alleging the fraudulent manipulation of stock prices.

Class Action Court Decisions Class Actions In The News PSLRA/SLUSA Class Actions Uncategorized

Class Action Defense Cases-Schumacher v. Tyson: South Dakota Federal Court Denies Defense Motion For Summary Judgment In Class Action Lawsuit Under Packers And Stockyards Act

Producers Adequately Alleged Violation of Federal Packers and Stockyards Act (PSA) and Raised Genuine Issues of Material Fact as to Knowledge that Federal Government’s Published Prices for Boxed Beef were Inaccurate For the few defense attorneys who may benefit from this information, we note that on March 30, 2006, a federal district court denied a defense motion for summary judgment in a class action filed by cattle producers against beef packers under the federal Packers and Stockyards Act (PSA), 7 U.

Class Action Court Decisions Uncategorized

Ford Motor Class Action Defense Case–Phillips v. Ford Motor Company

Post-CAFA (Class Action Fairness Act of 2005) Amendment of Complaint to Add or Substitute Named Plaintiffs Does Not “Commence” New Action Under CAFA Seventh Circuit Holds

The Class Action Fairness Act of 2005 (CAFA) became effective on February 18, 2005. Understandably, then, federal courts still confront matters of first impression under CAFA. On January 30, 2006, the Seventh Circuit Court of Appeals addressed “whether amending a complaint to add or substitute named plaintiffs (class representatives) ‘commences’ a new suit” for purposes of CAFA. Phillips v. Ford Motor Co., 435 F.3d 785, 786 (7th Cir. 2006). The Court noted, “No appellate court has yet decided whether adding named plaintiffs to a class action suit ‘commences’ a new suit for purposes of removal under CAFA.” Id.

In Phillips, the lawsuits at issue had been filed prior to the enactment of CAFA, but new plaintiffs were added by amendment after CAFA’s effective date. The Seventh Circuit held that the amendment did not commence a new suit for purposes of CAFA. In analyzing the legal issue presented, the Court observed that state law controlled: because the question “is whether adding named plaintiffs commences a new suit in state court, the answer should depend on state procedural law.” Phillips, at 787.

Class Action Court Decisions Class Action Fairness Act (CAFA) Removal & Remand Uncategorized