CLASS ACTION DEFENSE BLOG
Welcome to Michael J. Hassen's Blog. Here you will find over 2,000 articles related to class actions.
Judicial Panel Grants Plaintiffs’ Separate Requests for Pretrial Coordination of Class Action Lawsuits Pursuant to 28 U.S.C. § 1407, Supported by Defendants, and Transfers Class Actions to Eastern District of New York Eight class actions – four in New Jersey, two in Illinois and one each in California and New York – were filed against various Bayer defendants “arising from Bayer’s marketing and sale of Bayer Aspirin with Heart Advantage or Bayer Women’s Low-Dose Aspirin Plus Calcium, or both.
Class Action Court Decisions Class Actions In The News Multidistrict Litigation Uncategorized
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Motions by Plaintiffs in Class Actions Asserting Labor Law Violations Denied because Class Action Device not “Superior” means of Resolving Employees’ Claims given Bankruptcy Proceeding and because Lifting Stay to Allow Class Action Litigation to Proceed would Waste Defendants’ Resources and Distract from Reorganization Efforts New York Bankruptcy Court Holds
Certain putative class action lawsuits were filed against Bally Total Fitness, which subsequently filed a petition for bankruptcy protection. In re Bally Total Fitness of Greater New York, Inc., 402 B.R. 616, 2009 WL 931537, *1 (S.D.N.Y. 2009). Plaintiffs in one of the class action lawsuits, the “Carrera” plaintiffs, “brought…a class action on behalf of thousands of employees” and alleged that Bally made employees work off-the-clock, failed to provide meal and rest periods, failed to provide timely itemized wage statements or final paychecks, and failed to reimburse business expenses. Id. Plaintiffs in another class action lawsuit, the “Flores” plaintiffs, “brought…a class action on behalf of Bally employees…for unpaid wages, failure to provide meal and rest periods mandated by California law and failure to reimburse business expenses.” Id., at *2. The Flores class action was originally filed in California state court, but defense attorneys removed the class action to federal court under CAFA (Class Action Fairness Act of 2005), id. Bally’s employees had entered into a written agreement with the company, the “Bally Total Fitness Corporation Employment Dispute Resolution Procedure” (EDRP), which required that employment-related claims be submitted to arbitration and which contained a class action waiver provision such that employment claims were required to be arbitrated individually. Id. In Carrera, Bally lost a motion to compel arbitration of the individual claims, and appellate proceedings were stayed due to the bankruptcy filing; in Flores, Bally’s motion to compel arbitration of individual claims was pending when the company filed bankruptcy, so a decision on that motion was stayed. Id. Plaintiffs in the Carrera class action moved the bankruptcy court to (1) permit them to file a “class proof of claim,” and (2) lifting the automatic stay so the class action could proceed in state court in order to “liquidate” the claims or, alternatively, certifying the litigation as a class action. Id., at *1. Plaintiffs in the Flores class action moved the bankruptcy court to certify the litigation as a class action. Id. The bankruptcy court denied each motion.
With respect to the Carrera plaintiffs’ request for leave to file a class proof of claim, the bankruptcy court noted that there is “no absolute right to file a class proof of claim under the Bankruptcy Code.” In re Bally, at *2 (citations omitted). Rather, in deciding whether to permit the filing of a class proof of claim, bankruptcy courts consider “a) whether the class claimant moved to extend the application of Rule 23 to its proof of claim; b) whether ‘the benefits derived from the use of the class claim device are consistent with the goals of bankruptcy’; and c) whether the claims which the proponent seeks to certify fulfill the requirements of Rule 23.” Id. (citation omitted). The bankruptcy court denied the motion because plaintiffs “failed to demonstrate that the requested relief would both be consistent with the goals of bankruptcy and satisfy the Rule 23 requirements.” Id. In this regard, the Court explained that class proofs of claim are consistent with the goals of bankruptcy “in two principal situations: (i) where a class has been certified pre-petition by a non-bankruptcy court; and (ii) where there has been no actual or constructive notice to the class members of the bankruptcy case and Bar Date.” Id., at *3. As neither situation applied to either the Carrera or Flores class action complaints, the Court denied the motion to permit the filing of a class proof of claim. Id.
Certification of Class Actions Class Action Court Decisions Uncategorized
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District Court Erred in Dismissing FACTA Class Actions based on Conclusion that FCRA’s Statutory-Damages Provision was Unconstitutional Facially and As-Applied, Requiring Reversal of Court Order and Reinstatement of Class Actions Eleventh Circuit Holds
Plaintiffs filed two separate class action complaints against Mexican Specialty Foods and Rave Motion Pictures alleging violations of the federal Fair and Accurate Credit Transactions Act (FACTA), which is part of the federal Fair Credit Reporting Act (FCRA); the class action complaints asserted that the defendants willfully violated FACTA by providing customers with “electronically-generated receipt[s] [that] included more than the last five digits of the customer’s card number and/or its expiration date.” Harris v. Mexican Specialty Foods, Inc., 564 F.3d 1301, 2009 WL 944201, *1-*2 (11th Cir. 2009). FACTA provides, in pertinent part, that “no person that accepts credit cards or debit cards for the transaction of business shall print more than the last 5 digits of the card number or the expiration date upon any receipt provided to the cardholder at the point of the sale or transaction.” Id., at *1 (quoting 15 U.S.C. § 1681c(g)(1)). Each class action sought statutory damages, punitive damages and attorney fees and costs, pursuant to 15 U.S.C. § 1681n(a). Id., at *2. Defense attorneys in each class action moved for summary judgment on the grounds that the FCRA’s statutory-damages provision was unconstitutional, id.; the motion was directed toward that provision of the FCRA which authorizes the recovery of statutory damages “of not less than $100 and not more than $1,000.” Id., at *1 (quoting 15 U.S.C. § 1681n(a)(1)(A)). The federal government intervened as a party-plaintiff to argue in favor of the statute’s constitutionality. Id., at *2. The district court issued a single order covering both class actions: the court order “declar[ed] the FCRA’s statutory-damages provision unconstitutionally vague on its face and unconstitutionally excessive on its face and as applied to the defendants, in violation of the Fifth Amendment Due Process Clause.” Id. The district court therefore dismissed both class actions with prejudice, id. The plaintiffs in each class action appealed; the Eleventh Circuit consolidated the cases for purposes of appeal and reversed.
Reviewing the district court’s order de novo, the Eleventh Circuit first addressed whether the case “is ripe for adjudication,” that is, whether there is an actual case and controversy. Harris, at *3. This analysis required a determination of whether the district court found the statutory-damage provision unconstitutional on its face or as-applied, id. The Circuit Court held that the matter was ripe as to a facial challenge to the statute’s constitutionality, because the district court held that “the statute provides no guidance for juries in determining whether to award damages at the upper or lower end of the $100 to $1,000 statutory-damages range” thus leaving the amount of damages to be awarded “to the whim of the jury” creating the potential of inconsistent “willy nilly” verdicts. Id. However, the Eleventh Circuit held that the matter was not ripe for adjudication as to an as-applied challenge “[b]ecause such a challenge asserts that a statute cannot be constitutionally applied in particular circumstances, it necessarily requires the development of a factual record for the court to consider.” Id. (citation omitted). The district court’s ruling in this regard had been premised on a number of assumptions that the Circuit Court found to be unwarranted “because many of the court’s assumptions required the resolution of issues which are directly disputed.” Id., at *4. The Court therefore concluded that an as-applied challenge was not ripe for adjudication, id., at *5.
Class Action Court Decisions FCRA Class Actions Uncategorized
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Class Action Complaint Alleging Breach of Contract Against MetLife Properly Dismissed because Four-Year Statute of Limitations Expired Long Before Plaintiffs Filed Class Action Fifth Circuit Holds
Plaintiffs filed a class action against their life insurer, Metropolitan Life, for breach of contract. Beavers v. Metropolitan Life Ins. Co., 566 F.3d 436, 2009 WL 1067035, *1 (5th Cir. 2009). According to the allegations underlying the class action, the insurance policies issued to plaintiffs, and managed by MetLife’s “Personal Insurance line of business” were investment vehicles as well as insurance policies, and called for MetLife’s policyholders “to receive dividends paid by Personal Insurance from the surplus accruing on their policies.” Id. The class action complaint alleged that MetLife “impermissibly allocate[ed] surplus profits from Personal Insurance to other lines of business.” Id. The class action thus alleged that MetLife “breached their investment contracts and deprived them of dividend income to which they were entitled.” Id. Plaintiffs filed the class action in 1998, and the district court certified the litigation as a class action in 2004. Id. Defense attorneys moved to dismiss the class action on the grounds that the claims were time-barred as they allegedly arose in the 1980s; the district court held that the discovery rule did not toll the statute of limitations and dismissed the class action complaint. Id. The Fifth Circuit affirmed.
Apply de novo review and the substantive law of Texas, see Beavers, at *2, the Fifth Circuit began by noting that a four-year limitations period applies to breach of contract claims in Texas, id. As the statute of limitations plainly ran long before plaintiffs filed the class action complaint, the question was whether the discovery rule or American Pipe doctrine tolled the limitations period. Id. With respect to the discovery rule, the Circuit Court noted that Texas permits only a “very limited exception to statutes of limitations.” Id. (citation omitted). A preliminary inquiry is whether the injury is “inherently undiscoverable.” Id. The Fifth Circuit further noted that “no Texas court has found a breach of contract to qualify as inherently undiscoverable, yet the Texas Supreme Court has not foreclosed the possibility.” Id., at *3 (citation omitted). In rejecting plaintiffs’ effort to bring their case within the scope of the discovery rule, the Circuit Court held that it was insufficient for plaintiffs – who conceded that MetLife did not have a fiduciary relationship with them – to claim to be in a “special relationship of confidence and trust” with MetLife. Id. Under Texas law, in the absence of a fiduciary relationship “contracting parties must verify each other’s performance.” Id. As a factual matter, the Court also held that plaintiffs could have discovered their alleged injury within the four-year limitations period, see id., at *3-*5.
Class Action Court Decisions Uncategorized
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Class Action Bar in Franchise Agreement Precluded Class Action Certification of Lawsuit by Franchisees Against Quiznos because Class Action Bar was not Unconscionable under Colorado Law Federal Court Holds
Plaintiffs filed a class action against various Quiznos entities and others (collectively “Quiznos”) alleging defendants misled prospective franchisees; the class action complaint asserted that it was only after plaintiffs signed 30-page franchise agreements that defendants revealed the restaurant locations were “not as profitable as Quiznos had promised.” Bonanno v. The Quizno’s Franchising Co., LLC, ___ F.R.D. ___ (D.Colo. April 20, 2009) [Slip Opn., at 1-2]. According to the allegations underlying the class action, Quiznos also failed to provide plaintiffs with “any of the promised expert help,” but nonetheless demanded that they open restaurants within the one-year deadline set forth in the franchise agreements or the agreement would be terminated and Quiznos would keep the franchise fee. _Id._, at 2. The class action centered, then, on claims on behalf of “sold but not opened franchisees,” _id._ (Defendants conceded that “not every signed franchise agreement results in a functioning restaurant,” _id._, at 4.) Plaintiffs moved the district court to certify the litigation as a class action, _id._, at 3. Defendants opposed class action treatment, primarily on the ground that Section 21.4 of the franchise agreement prohibits class action lawsuits between the franchisor and the franchisee. _Id._, at 3. The district court held that class action waiver was enforceable and, accordingly, that class action certification was not warranted. The federal court therefore denied the motion. (We do not discuss in detail the 53-page opinion filed by the district court; it is well worth reading and it is available at the link following this article. For our purposes, the important issue is the enforceability of the class action waiver in the franchise agreement.)
Plaintiffs argued that “[t]he most significant issue…is whether, in light of the provision of the franchise agreements that purports to bar class actions, this case can be maintained as a class action in the first instance.” Bonanno, at 3. The district court held a hearing on the validity of the class action bar, and accepted supplemental briefing on the issue. Id., at 3-4. The district court’s order contains a lengthy discussion of the facts that “help elucidate the Court’s decision to enforce the class action bar.” Id., at 4. We do not summarize those facts here, see id., at 4-17, or the federal court’s summary of the standard of review, see id., at 17-19, or the court’s summary of the “history and evolution of class action litigation,” see id., at 20-25, because the district court held that the class action bar was enforceable and therefore did not address the merits of Rule 23, id., at 19.
Certification of Class Actions Class Action Court Decisions Uncategorized
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Judicial Panel Grants Defense Request for Pretrial Coordination of Class Action Lawsuits Pursuant to 28 U.S.C. § 1407, Unopposed by Class Action Plaintiffs, and Transfers Class Actions to District of New Jersey Six class actions – two in Massachusetts, and one each in Connecticut, New Jersey, New York and Pennsylvania – were filed against Staples alleging labor law violations; specifically, the class action complaints allege “that Staples assistant, operations and/or sales managers are entitled to overtime pay under the Fair Labor Standards Act and/or various state wage and hour statutes.
Class Action Court Decisions Employment Law Class Actions Multidistrict Litigation Uncategorized
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District Court Order Rejecting Proposed Class Action Settlement of ERISA Class Action as Unfair not Appealable Ninth Circuit Holds
Plaintiffs, employees of Montana Power and participants in the company’s retirement plan (the “Plan”), filed a class action against the Plan’s trustee and against directors of Montana Power alleging violations of ERISA; the class action complaint asserted that defendants breached fiduciary duties owed to Plan participants and mismanaged the Plan. In re Touch America Holdings, Inc. ERISA Litig., 563 F.3d 903 (9th Cir. 2009) [Slip Opn., at 4713, 4717]. The defendant-directors entered into a proposed class action settlement with plaintiffs; under the terms of the class action settlement the directors would make a payment “of nearly all the funds remaining in the directors’ fiduciary liability insurance policy.” Id., at 4717. The proposed class action settlement also contained two conditions – (1) directors cooperation in the class action claims against the Plan trustee, and (2) obtaining a district court order that “bar[red] suits for contribution or indemnity against the directors.” Id. The district court rejected the proposed class action settlement, id.; in part, the court found the settlement was not fair to the class because the monetary contribution represented only “three cents on the dollar” which it found was “not good in terms of recovery” and characterized as “a pittance…of the total amount of loss,” id., at 4719. The parties appealed, id., at 4717. The Ninth Circuit dismissed the appeal.
The Ninth Circuit noted that the parties did not dispute that the order rejecting the proposed class action settlement was not a “final decision.” In re Touch America, at 4718. The Circuit Court noted also the general rule that, in order to avoid “piecemeal appeals,” only final decisions are reviewable on appeal, id. The parties, therefore, sought interlocutory review of the district court’s order, id. The Ninth Circuit explained that “some disapprovals of class settlements are appealable under the section as orders refusing an injunction.” Id. (citation omitted). And the Court set forth the rule at page 4718 as follows: “To be immediately appealable, orders disapproving class settlements must satisfy three requirements: ‘First, the interlocutory order must have the practical effect of denying an injunction. Second, the order must have “serious, perhaps irreparable, consequence[s].” Finally, the order must be one that can be “effectively challenged” only by immediate appeal.’” (Citation omitted). The Circuit Court dismissed the appeal because it found that the second requirement had not been satisfied – that is, the Court concluded that the district court order would not cause “serious, perhaps irreparable, consequences.”
Class Action Court Decisions Employment Law Class Actions Uncategorized
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Products Liability Class Action Properly Certified as Class Action with Respect to Breach of Warranty Claim and Appellate Court Erred in Reversing Class Action Certification Order Oklahoma Supreme Court Holds
Plaintiffs filed a class action against Ford Motor and Williams Control for product liability; the class action complaint asserted claims based on “design and/or manufacturing defects in the fixed, non-adjustable accelerator pedal, i.e., the ‘electronic throttle control’, or ‘ETC’, which is designed and manufactured by Williams and installed in certain trucks manufactured by Ford.” Cuesta v. Ford Motor Co., ___ P.3d ___, 2009 OK 24, ¶ 2 (Okla. April 21, 2009) (footnotes omitted). According to the allegations underlying the class action, “the pedals, which were modified twice, failed Ford’s ‘overload’ tests and engineering specifications.” _Id._ Specifically, “when forcible pressure is applied to the pedals that they cause the vehicles to shift to idle instead of accelerating and, therefore, are defective and unreasonably dangerous.” _Id._ The class action complaint alleged causes of action for breach of express and implied warranties, negligence and strict products liability. Plaintiffs filed a motion with the trial court to certify the litigation as a class action; the trial court granted the motion, agreeing with plaintiffs that the following questions of law and fact are common: “(1) whether the accelerator pedals at issue are defective; (2) whether the pedals are unreasonably dangerous; (3) whether the pedals reduce the value of the vehicles; and (4) whether the sale of the vehicles containing these pedals to members of the class constitutes a breach of any express or implied warranty by Defendants Ford and WCI?” _Id._ The Oklahoma Court of Civil Appeals reversed the class action certification order, _id._, at ¶ 1. The Oklahoma Supreme Court granted plaintiffs’ petition for writ of certiorari and vacated the appellate court’s opinion, holding that the trial court did not abuse its discretion in granting class action treatment.
The Oklahoma Supreme Court began by noting that it was determining “only whether class certification is appropriate to determine a breach of warranty theory under the facts presented.” Cuesta, at ¶ 2. The Court noted also that “[a] trial court’s order certifying a class action is reviewed for an abuse of discretion.” Id., at ¶ 7 (citation omitted). It began its legal analysis by discussing the applicable choice of law, see id., at ¶¶ 8 et seq. We do not summarize the Oklahoma Supreme Court’s analysis of this issue, noting simply that the Court concluded that the law of Michigan governed the class action’s breach of warranty claims, id., at ¶¶ 15-16.
Certification of Class Actions Class Action Court Decisions Uncategorized
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Class Action Complaint Alleging Violations of FLSA (Fair Labor Standards Act) based on Misclassification of Store Managers and Consequent Failure to Pay Overtime Satisfied First-Tier’s “Lenient Standard” for Conditional Class Action Certification Florida Federal Court Holds Plaintiff filed a class action against Starbucks alleging violations of the federal Fair Labor Standards Act (FLSA); the class action complaint asserted that Starbucks misclassified him (and other store managers) as exempt and failed to pay him overtime.
Certification of Class Actions Class Action Court Decisions Employment Law Class Actions Uncategorized
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District Court Approval of Antitrust Class Action Settlement did not Require Reversal due to Conflict of Interest with Certain Class Representatives because Other Class Representatives did not Share Conflict so Error was Harmless Ninth Circuit Holds
Plaintiffs filed a class action against West Publishing and Kaplan alleging antitrust violations; the class action complaint asserted that individuals who purchased BAR/BRI courses from defendants to prepare for bar examinations paid more than they should have because of defendants’ anticompetitive conduct. Rodriguez v. West Publishing Corp., 563 F.3d 948 (9th Cir. 2009) [Slip Opn., at 4743, 4752-53]. An amended class action complaint was filed adding additional named plaintiffs, who had been plaintiffs in a related class action entitled Brewer v. West Publishing. Id., at 4752. The class action sought more than $300 million in damages, id., at 4753-54. Eventually, the district court certified the litigation as a class action, id., at 4754. The court appointed all of the named plaintiffs as class representatives, and appointed class counsel, id., at 4752. The parties entered into settlement discussions and signed an agreement that called for defendants to pay $49 million in settlement; three of the class representatives (“the Class Representative Objectors”) objected to the proposed class action settlement and refused to sign it. Id., at 4755. The district court gave preliminary approval of the settlement over the objection of the Class Representative Objectors, id., at 4755-56. The Class Representatives were to receive $25,000 as incentive awards, but the Class Representative Objectors were to receive $75,000 as incentive awards. Id., at 4756. In the end, 54 objections were filed to the proposed class action settlement, id. The plaintiffs in the original Rodriguez class action complaint had a fee agreement with a prior law firm that contained a graduated incentive award, and some of those plaintiffs agreed to reduce their incentive award to $25,000, but the Class Representative Objectors did not. Id., at 4756-57. Ultimately, the district court approved the class action settlement (though it denied incentive awards in their entirety), and six groups of objectors appealed. Id., at 4757. “Their principal objection relates to incentive agreements that were entered into at the onset of litigation between class counsel and five named plaintiffs who became class representatives.” Id., at 4750. They objected also to the district court’s reliance on an estimate of single damages, rather than treble damages, in finding the $49 million payment to be fair, reasonable and adequate. Id. The Ninth Circuit affirmed the settlement.
The Ninth Circuit noted that “Much of the appeal turns on the presence — and nondisclosure to the class — of the incentive agreements.” Rodriguez, at 4758. The Court explained that while such awards are “fairly typical in class action cases,” id., providing for incentives in a fee agreement is “quite different” because only the district court can determine the appropriate award, but the fee agreements in this case “tied the promised request to the ultimate recovery and in so doing, put class counsel and the contracting class representatives into a conflict position from day one,” id., at 4758-59. The Circuit Court held that this conflict should have been disclosed at the class action certification stage, not at the time for approval of a proposed class action settlement. Id., at 4759. If the potential conflict had been disclosed timely, then “the district court would certainly have considered its effect in determining whether the conflicted plaintiffs…could adequately represent the class. “ Id. As the Ninth Circuit explained at page 4759, “An absence of material conflicts of interest between the named plaintiffs and their counsel with other class members is central to adequacy and, in turn, to due process for absent members of the class.” (Citation omitted.)
Class Action Court Decisions Uncategorized
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