Deloitte Class Action Defense Cases– In re Parmalat Securities: New York Federal Court Denies Defense Summary Judgment Motion In Securities Fraud Class Action

Summary Judgment as to Securities Fraud Claims against Various Deloitte Entities Denied because Genuine Issues of Fact Existed as to Liability for Claims in Class Action Complaint New York Federal Court Holds

Following the collapse of Parmalat Finanziaria, S.p.A., Parmalat S.p.A. and their affiliates because of a multi-billion dollar fraud that understated Parmalat’s debt by $10 billion and overstated Parmalat’s assets by $16 billion, various securities fraud class actions were filed against numerous parties: one such class action was filed against Deloitte Touche Tohmatsu (DTT), Deloitte & Touche LLP (DT-US), and James Copeland (collectively “Deloitte defendants”) on behalf of purchasers of Parmalat stock. In re Parmalat Securities Litig., ___ F.Supp.2d ___ (S.D.N.Y. January 27, 2009) [Slip Opn., at 2]. The class action alleged violations of Section Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and of Rule 10b-5 thereunder, _id._, at 2-3. Defense attorneys moved for summary judgment as to the class action claims against the Deloitte defendants, _id._, at 2. Alternatively, the defense argued that the Deloitte defendants were not jointly and severally liable under the Private Securities Litigation Reform Act of 1995 (PSLRA), _id._, at 8.

We do not here discuss Deloitte’s corporate structure, or the Parmalat scandal and the alleged fraud of Deloitte Italy. See In re Parmalat, at 3-7. In a detailed opinion, the federal district court first rejected the defense challenge to DTT’s vicarious liability, on a respondeat superior theory, for the federal securities class action claims arising out of the acts of its alleged agent, Deloitte Italy. See id., at 9-11. The question was whether DTT had a principal-agent relationship with Deloitte Italy, id., at 12, and the district court found that a triable issue of material fact existed as to whether it did, see id., at 12-19. As the court concluded at page 19, “In all the circumstances, the totality of the evidence…raises a genuine issue of material fact as to whether Deloitte Italy was an agent of DTT with respect to the Parmalat engagement.” It accordingly denied DTT’s motion for summary judgment as to those class action claims premised on respondeat superior liability for Section 10(b) violations. Id., at 19. Turning to the class action’s Section 20(a) claim against DTT, defense attorneys argued that “there is no evidence that would justify a conclusion that it controlled the alleged primary violator, Deloitte Italy,” and that in any event DTT is not liable because it “acted in good faith and did not induce the act or acts constituting the alleged violations.” Id., at 19-20. Again, the federal court found a genuine issue of material fact existed as to whether DTT was a “control person” within the meaning of Section 20(a), id., at 20-21, and that it could not find, as a matter of law, that DTT acted in good faith, see id., at 21-25.

Class Action Court Decisions PSLRA/SLUSA Class Actions Uncategorized

Class Action Defense Cases—In re Northstar Education Finance: Judicial Panel On Multidistrict Litigation (MDL) Grants Plaintiffs’ Motion To Centralize Class Action Litigation In District Of Minnesota

Judicial Panel Grants Plaintiffs’ Request for Pretrial Coordination of Class Action Lawsuits Pursuant to 28 U.S.C. § 1407, Supported by Other Class Action Plaintiffs and by Common Defendant, and Transfers Class Actions to District of Minnesota Three class actions – one each in California, Michigan and Minnesota – were filed against Northstar Education Finance alleging that “Northstar’s suspension of its bonus program, in which Northstar offered a credit to borrowers who were no more than 59 days late in making loan repayments, was a breach of contract.

Class Action Court Decisions Multidistrict Litigation Uncategorized

FDCPA Class Action Defense Cases–Campuzano-Burgos v. Midland Credit: Third Circuit Reverses FDCPA Class Action Ruling In Favor Of Plaintiffs Holding Dunning Letters Underlying Class Action Did Not Violate FDCPA

As Matter of First Impression, Dunning Letters/Settlement Offer Letters Sent by Debt Collector over Signatures of Corporate Officers who did not Write, Sign or Personally Authorize Letters did not Violate FDCPA because Letters were Plainly Sent on Behalf of Corporation and not Individuals Third Circuit Holds

Plaintiffs filed a class action against various defendants, including Midland Credit Management, alleging violations of the federal Fair Debt Collection Practices Act (FDCPA); the class action complaint asserted that defendants sent “false, misleading, or deceptive collection notices in contravention of §§ 1692e and 1692e(9) of the Act.” Campuzano-Burgos v. Midland Credit Management, Inc., 550 F.3d 294, 296 (3d Cir. 2008). The main question presented by the FDCPA class action, and the question the district court ultimately certified to the Third Circuit, was “whether a senior officer of a collection company violates the Act by signing ‘dunning letters’ sent to debtors.” Id. The parties filed cross motions for summary judgment on the issue of liability; the district court rejected the defense motion holding that a debt collector violates the FDCPA “by sending debtors settlement offers that bear the name of one of the company’s senior executives.” Id. The Third Circuit accepted the certified question and concluded that defendants did not violate the FDCPA; accordingly, it remanded the class action to the district court with instruction to enter judgment in favor of the defendants.

The debt collection letters sent by defendants to collect unpaid debts were “nearly identical in content and form.” Campuzano-Burgos, at 296. The letters were signed by corporate officers of Midland Credit, and accurately reflected their titles and positions with the company, id., at 297. But while the officers were deemed to have authorized the letters, they were not attorneys they did not actually write or sign the letters, and the letters were sent without the officers’ knowledge. Id. The district court concluded that case law “expresse[d] a general concern with debt collectors’ practice of falsely implying that someone in a position of real authority [wa]s supervising the collection of [a] debt.” Campuzano-Burgos v. Midland Credit Mgmt., Inc., 497 F.Supp.2d 660, 664 (E.D.Pa. 2007). The district court held that the letters violated the FDCPA because “the use of top executives of the company as signatories is likely meant to impress upon debtors the seriousness of the communication and will almost certainly have such an effect on at least some debtors.” 550 F.3d at 298 (quoting 497 F.Supp.2d at 665). Moreover, because the officers “had no ‘actual involvement in the decision to send the letter[s] to a particular debtor … the letters … are deceptive and misleading within the meaning of Section 1692e.’” Id. (citation omitted). On appeal, defense attorneys argued that the letters were not deceptive and clearly conveyed that they were sent on behalf of “the company as a whole” rather than the individual officers, id. The Third Circuit agreed.

Class Action Court Decisions FDCPA Class Actions Uncategorized

PSLRA JP Morgan Class Action Defense Cases–ECA v. JP Morgan Chase: Second Circuit Affirms Dismissal Of Securities Class Action Holding Class Action Complaint’s Allegations Failed To Establish Materiality Or Scienter Under PSLRA

District Court Properly Dismissed Securities Fraud Class Action Against JP Morgan Chase because Misrepresentations Underlying Class Action were not Material and Class Action Failed to Adequately Allege Scienter under Heightened Pleading Requirements Established by Private Securities Litigation Reform Act (PSLRA) Second Circuit Holds

Plaintiffs filed a class action against JP Morgan Chase (JPMC) and two of its officers alleging violations of federal securities laws; the class action complaint asserted that defendants “defrauded JPMC shareholders by making deliberate misrepresentations that artificially inflated the price of JPMC stock and ultimately led to a collapse of JPMC’s share price.” ECA v. JP Morgan Chase Co., ___ F.3d ___ (2d Cir. January 21, 2009) [Slip Opn., at 4]. More specifically, the class action alleged that JPMC “created disguised loans for Enron and concealed the nature of these transactions by making false statements or omissions of material fact in its accounting and Securities and Exchange Commission (SEC) filings.” _Id._ “JPMC created ‘Special Purpose Entities,’ among them an entity called Mahonia Ltd., to facilitate disguised loan transactions with Enron Corporation.” _Id._ “Following the collapse of Enron, however, the Senate investigated JPMC’s role in Enron’s fraudulent practices and concluded that JPMC had knowingly engaged in and actively assisted Enron in its sham transactions; the resulting disclosures caused JPMC’s stock to suffer significant losses.” _Id._, at 5. Defense attorneys moved to dismiss the class action for failure to meet the heightened pleadings requirements established by the Private Securities Litigation Reform Act (PSLRA); the district court dismissed the class action because it found that the class action complaint “failed to plead with the requisite particularity that JPMC made a materially false statement or omitted a material fact, with scienter.” _Id._, at 6. In particular, the district court found that plaintiffs adequately pleaded scienter only as to the “alleged improper accounting of the Mahonia transactions as trades rather than loans,” but found further that “the allegedly improper accounting of the Mahonia transactions as trades rather than loans was not material.” _Id._, at 6. Plaintiffs filed an amended class action complaint that included new allegations concerning “(1) JPMC’s alleged downplaying of its Enron-related exposure, (2) JPMC’s alleged misrepresentation of its integrity and risk management, and (3) the allegedly faulty reporting of the Mahonia transactions.” _Id._, at 7. Defense attorneys again moved to dismiss the class action, and the district court again granted the motion. _See id._, at 7-9. The Second Circuit affirmed.

The Second Circuit’s opinion provides a detailed discussion of the applicable law. See ECA, at -11-16. With respect to JPMC’s allegedly false financial reports, plaintiffs argued that defendants’ GAAP violations created a presumption that the financial statements were misleading, id., at 16-17. The Second Circuit agreed with plaintiffs that they had adequately alleged that JPMC and Mahonia were “related” and that they adequately alleged false or misleading statements by defendants, id., at 17, but the Court found the class action complaint failed to adequately allege scienter, id., at 17-25. The Circuit Court agreed with the district court’s finding that the class action “fail[s] to allege facts explaining why, if it was aware of Enron’s problems, [JPMC] would have continued to lend Enron billions of dollars,” id., at 25 (citation omitted), explaining at page 25 that “Even if JPMC was actively engaged in duping other institutions for the purposes of gaining at the expense of those institutions, it would not constitute a motive for JPMC to defraud its own investors.” The Court further rejected plaintiffs’ claim that JPMC disguised its loans to Enron as “trading activities,” id., at 25-30, agreeing with the district court that even assuming JPMC should have treated the prepaid transactions as trades rather than as loans was immaterial, id., at 25-26. Accordingly, “Because Plaintiffs have failed to adequately plead that JPMC made a materially false statement or omitted a material fact with scienter,” the district court properly dismissed the class action complaint. Id., at 33.

Class Action Court Decisions PSLRA/SLUSA Class Actions Uncategorized

State Farm Class Action Defense Cases–Moore v. State Farm: Fifth Circuit Affirms Summary Judgment In Favor Of State Farm In Class Action Challenging Conversion Of Homeowners Insurance Policies

District Court Properly Granted State Farm’s Summary Judgment Motion in Class Action Challenging Conversion Of Homeowners Insurance Policies because Conversion did not Constitute Cancelation or Nonrenewal of Policies in Violation of Louisiana Law Fifth Circuit Holds

Plaintiff filed a class action in Louisiana state court against State Farm alleging that its conversion of homeowner insurance policies to new policy forms violated Louisiana law. Moore v. State Farm Fire & Cas. Co., ___ F.3d ___, 2009 WL 130204, *1 (5th Cir. January 21, 2009). Defense attorneys removed the class action to federal court on the basis of the Class Action Fairness Act of 2005 (CAFA), _id._, at *2. The class action followed State Farm’s participation in various administrative proceedings concerning rates to be charged for Louisiana homeowners’ insurance policies. _Id._, at *1-*2. According to the allegations underlying the class action, State Farm’s act of issuing new forms of homeowners’ insurance coverage at time of renewal amounted to “cancelation” of the policies, _id._, at *1. The class action was filed after plaintiff pursued administrative proceedings that were resolved in favor of State Farm, _id._, at *2. The parties filed cross motions for summary judgment; the district court granted defense counsel’s motion for partial summary judgment and for judgment on the pleadings, and denied plaintiff’s summary judgment motion, concluding that State Farm’s actions complied with state law. _Id._, at *1. Put simply, the federal court “determined that, at the end of the day, the parties’ motions ‘boil down to the same issue: Whether or not State Farm’s conversion of its [former] homeowner policies to its [new] homeowner policy form, effective February 1, 2005, was in violation of Louisiana law?’” _Id._, at *3. The district court ruled in favor of State Farm, and the Fifth Circuit affirmed.

Plaintiff argued that State Farm’s conversion of the homeowners’ policies “constituted a cancellation or nonrenewal of existing homeowner policies and violates the prohibitory laws of Louisiana, which disallow cancellation or nonrenewal of a homeowner insurance policy that has been in effect for more than three years.” Moore, at *3 (citations omitted). After discussing the standard of review, see id., at *4, the Fifth Circuit turned to its analysis of the statutory interpretation of Louisiana law, id., at *5-*6. The Circuit Court agreed with defense attorneys, and the district court, that Louisiana law “clearly and unambiguously provides that conversion is neither a cancellation nor a nonrenewal, and that such conversion is allowed when the insurer’s form is filed with and approved or deemed approved by the Commissioner.” Id., at *6. Accordingly, it affirmed the judgment of the district court dismissing the class action against State Farm, id., at *8.

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

AOL Class Action Defense Cases–Doe 1 v. AOL: Ninth Circuit Reverses Dismissal Of Class Action Holding Forum Selection Clause Unenforceable In CLRA/UCL Class Action Because Virginia State Courts Would Not Provide Class Action Relief

District Court Erred in Dismissing Class Action under Rule 23(b)(3) for Improper Venue because Forum Selection Clause in Internet Member Agreement Effectively Precluded Class Action Relief Ninth Circuit Holds

Plaintiffs filed a nationwide class action against AOL alleging violations of the federal electronic privacy law; the class action complaint asserted that AOL “made publicly available the internet search records of more than 650,000 of its members” that “contained personal and sometimes embarrassing information about the members.” Doe 1 v. AOL LLC, ___ F.3d ___ (9th Cir. January 16, 2009) [Slip Opn., at 686]. The class action also defined a subclass of California residents and asserted separately claims for violations of various California state laws, including California’s Consumers Legal Remedies Act (CLRA). _Id._ Plaintiffs filed their class action complaint after AOL accidentally made publicly available, for 10 days, “roughly twenty million AOL Internet search records”; the class action complaint alleged that the data disclosed by AOL included “addresses, phone numbers, credit card numbers, social security numbers, passwords and other personal information of AOL members.” _Id._, at 688. In addition to asserting claims for relief under the federal Electronic Communications Privacy Act and California’s CLRA, the class action additionally asserted claims under California’s Customer Records Act, False Advertising Law, and Unfair Competition Law. _Id._, at 688-89. Plaintiffs filed the class action in the Northern District of California, _id._, at 687-88; however, the Member Agreement governing plaintiffs’ use of AOL included both a choice of law clause, which stated that Virginia law governed any disputes between AOL and its members, and a forum selection clause, which designated Virginia as the fora for disputes between AOL and its members. _Id._, at 687. Defense attorneys moved to dismiss the class action under Rule 12(b)(3) on the grounds of improper venue given the forum selection clause; plaintiffs argued that class action relief would not be available to them in Virginia and, accordingly, “violates California public policy favoring consumer class actions and renders the forum selection clause unenforceable.” _Id._ The district court granted AOL’s motion and dismissed the class action without prejudice, _id._; the Ninth Circuit reversed.

AOL is headquartered in Dulles, Virginia. AOL, at 689. As a prerequisite to using AOL’s online services, each member must agree to the terms of the AOL Member Agreement, and must manifest their agreement by clicking a box that “states the member has agreed to the terms of the Member Agreement,” id., at 689-90. As noted above, the Member Agreement contains both a choice of law clause and a forum selection clause, which declare that Virginia law governs disputes and that disputes must be brought in Virginia state or federal courts. Id., at 690. The district court granted AOL’s Rule 12( b)(3) motion holding that the forum selection clause “expressly requires that this controversy be adjudicated in a court in Virginia” and that “[p]laintiffs agreed the courts of Virginia have ‘exclusive jurisdiction’ over any claims or disputes with AOL” thus rendering venue in California improper. Id., at 691. The Ninth Circuit reversed, concluding that the forum selection clause was unenforceable.

Certification of Class Actions Class Action Court Decisions Uncategorized

FDCPA Class Action Defense Cases–Anchondo v. Anderson: New Mexico Federal Court Denies Motion To Dismiss FDCPA Class Action Holding Class Action Complaint Adequately Alleged Debt Collector Violated State And Federal Laws

Class Action Alleging Violation of Fair Debt Collection Practices Act (FDCPA) Survives Defense Motion to Dismiss because Class Action Complaint Alleged Debt Collector Failed to Identify Itself or that it was Attempting to Collect a Debt in its Initial Communication with Plaintiff New Mexico Federal Court Holds

Plaintiff filed a class action against a debt collector alleging violations of the federal Fair Debt Collection Practices Act (FDCPA) and New Mexico’s Unfair Practices Act; the class action complaint asserted that. Anchondo v. Anderson, Crenshaw & Associates, L.L.C., 583 F.Supp.2d 1278, 1280 (D. N.M. 2008). According to the allegations underlying the class action, plaintiff purchased a home alarm system which failed to work properly so she stopped paying the monthly service fee; the alarm company retained debt collector Anderson, Crenshaw & Associates to collect the fees owed. Id. Defendant telephoned plaintiff and left a message on her answering machine requesting a return call; the message said the matter was “important,” but did not identify defendant or disclose that it concerned an attempt to collect a debt. Id. Plaintiff filed her class action complaint a few months later, alleging claims for relief under the FDCPA and the UPA, id. Defense attorneys moved to dismiss the class action under Rule 12(b)(6) or, alternatively, for judgment on the pleadings under Rule 12(c). Id., at 1279-80. The defense argued that the class action failed because the message left on plaintiff’s answering machine was not a “communication” within the meaning of the FDCPA, and because the FDCPA was unconstitutionally vague and unreasonably impeded defendant’s First Amendment right to exercise commercial speech. Id., at 1280. The district court denied the motion.

With respect to defendant’s Rule 12(b)(6) motion, the district court readily found that the allegations in the class action complaint satisfied the requirements for pleading a violation of the FDCPA because it alleged that defendant (1) “fail[ed] to identify itself” and (2) failed to “state that the voicemail message was left on her answering machine as an attempt to collect a debt.” Anchondo, at 1280 (citing 15 U.S.C. § 1692e(11)). And because the complaint’s allegations are accepted as true for purposes of Rule 12(b)(6) motions, the alleged constitutional law defenses “have no bearing as to whether Plaintiff has made sufficient factual allegations to state a claim upon which relief can be granted.” Id., at 1280-81 (citation omitted).

With respect to the Rule 12(c) motion, the federal court explained that the FDCPA requires debt collectors to disclose their identity in initial communications made for the purpose of collecting a debt, and that the purpose of the communication is to collect a debt. Anchondo, at 1281. Congress enacted the FDCPA to protect consumers against abusive debt collection practices, and because the message defendant left for plaintiff did not include the required disclosures she “would be entitled to relief, pursuant to the FDCPA, if she can prove that the voicemail was a communication regarding a debt.” Id. (citation omitted). The district court concluded that nothing more was required “at this stage of the proceedings,” and that the constitutional challenges were not ripe for adjudication. Id., at 1281-82. Accordingly, it denied the defense motion in its entirety. Id., at 1282.

Class Action Court Decisions FDCPA Class Actions Uncategorized

Class Action Defense Cases–Woods v. QC Financial: Missouri State Appellate Court Affirms Trial Court Order Striking Class Action Waiver From Arbitration Clause And Then Compelling Arbitration Of Dispute

Class Action Waiver in Payday Loan Agreement Containing Mandatory Arbitration Clause was Unconscionable and Trial Court did not Err in Severing Class Action Waiver, Compelling Arbitration, and Allowing Arbitrator to Determine Whether Matter should Proceed as Class Action Missouri State Appellate Court Holds

Plaintiff filed a class action against QC Financial, a payday lender, from whom plaintiff had borrowed money several times; the class action complaint alleged that defendant violated various Missouri state laws governing payday lenders. Woods v. QC Financial Services, Inc. d/b/a Quik Cash., ___ S.W.2d ___ (Mo.App. December 23, 2008) [Slip Opn., at 1]. Defense attorneys moved to dismiss the class action and to compel plaintiff to arbitrate the dispute individually; the motion was premised on an arbitration clause with a class action waiver that was contained in the payday loan documents. _Id._, at 1-2. Each loan agreement contained a mandatory arbitration clause that provided in pertinent part that the borrower is (1) waiving their right to a jury trial, (2) waiving their right to any court proceeding (other than small claims), and (3) waving the right to “SERVE AS A REPRESENTATIVE, AS A PRIVATE ATTORNEY GENERAL, OR IN ANY OTHER REPRESENTATIVE CAPACITY, AND/OR TO PARTICIPATE AS A MEMBER OF A CLASS OF CLAIMANTS, IN ANY LAWSUIT FILED AGAINST US AND/OR RELATED THIRD PARTIES.” _Id._, at 2. The arbitration clause further provided that “all disputes including any Representative Claims against us…shall be resolved by binding arbitration only on an individual basis with you” and precluded the arbitrator from allowing any dispute to proceed as a class action, _id._ Plaintiff moved for declaratory judgment, seeking to hold the class action waiver unconscionable; the trial court granted plaintiff’s motion and severed the provisions of the arbitration clause prohibiting class actions. _Id._ At the same time, the trial court denied the defense motion to compel plaintiff “to participate in individual arbitration,” but granted the defense motion to dismiss in part, in that the matter was ordered to arbitration for the arbitrator to decide whether the litigation could proceed as a class action. _Id._ Defendant appealed, and the Missouri Court of Appeal affirmed.

Defense attorneys raised several issues on appeal: (1) that plaintiff failed to prove procedural unconscionability; (2) that the arbitration clause was not procedurally unconscionable “because the font size used complies with statute and [plaintiff] signed the contract without any misrepresentations, hurry, or duress from [defendant]”; (3) that the arbitration clause was not substantively unconscionable, in part because the Federal Arbitration Act (FAA) “preempts the trial court’s holding as Missouri law does not bar class action waivers in all consumer contracts”; (4) that the class action waiver was an “essential “ part of the loan agreement, which does not contain a severance clause, so the trial court erred in severing the class action waiver from the arbitration clause; and (5) that the trial court erred in granting plaintiff’s request for declaratory judgment because it was not properly presented. Woods, at 3-4. The appellate court began by addressing the fifth point, quickly rejecting the defense characterization of the trial court’s action as one of “granting summary judgment,” and holding that the court granted declaratory judgment only to the extent that the mandatory arbitration clause precluded class action relief and only after hearing argument and testimony. Id., at 4-5. The Court of Appeal concluded that there was nothing improper in this aspect of the court’s ruling, id., at 5.

Arbitration Class Action Court Decisions Uncategorized

UPS Class Action Defense Cases–Taylor v. UPS: Fifth Circuit Reverses Dismissal Of Labor Law Class Action Holding Statutes Of Limitation Governing Class Action Claims Were Tolled During Appeal Of Related Class Action

Statutes of Limitation for Class Action Claims Against UPS were Tolled in Labor Law Class Action during Appeal from Summary Judgment in Favor of UPS in Certified Class Action Alleging Related Claims Fifth Circuit Holds

Plaintiff filed a class action against his former employer, United Parcel Service, alleging labor law violations; the class action complaint asserted that UPS discriminated against its employees on the basis of race. Taylor v. United Parcel Service, Inc., ___ F.3d ___, 2008 WL 5401487, *1 (5th Cir. December 30, 2008). Plaintiff worked for UPS from 1975 to 2004, during which time he was member of class action lawsuit that had been filed in 1994. _Id._ The 1994 class action alleged that UPS engaged in race discrimination; plaintiff “was a member of the pay and promotion class and gave deposition testimony on behalf of the class” in a class action that was dismissed on UPS’s motion for summary judgment in June 2000 and affirmed by the Eighth Circuit in August 2004. _Id._ (citing _Morgan v. United Parcel Service of America, Inc._, 143 F.Supp.2d 1143 (E.D.Mo. 2000), _aff’d_, 380 F.3d 459 (8th Cir. 2004), _cert. denied_, 544 U.S. 999 (2005)). In January 2003, during the pendency of the appeal in the prior class action, plaintiff filed a Title VII charge with the Equal Employment Opportunity Commission, and in March 2003, plaintiff filed the present putative class action “alleging that UPS had denied him promotion on the basis of race and retaliation since at least 1993, denied him equal pay on the basis of race and retaliation since November 1991, and provided a hostile work environment.” _Id._ As the Fifth Circuit explained, “The biggest difference between the claims asserted in the _Morgan_ class action [filed in 1994] and this suit is [plaintiff’s] addition of the retaliation claims, which allegedly are related to his participation in _Morgan_.” _Id._ Defense attorneys moved for summary judgment as to all of the class action claims; the district court granted the motions as to the promotion and hostile work environment claims, but denied the motions as to plaintiff’s discriminatory and retaliatory pay disparity claims. _Id._, at *2 (citing _Taylor v. United Parcel Service, Inc._, 421 F.Supp.2d 946, 956 (W.D.La. 2006)). Plaintiff appealed, and the Fifth Circuit reversed.

The Fifth Circuit explained that its statute of limitations analysis played a “central part” in the district court’s decision to toss out of the class action complaint. Taylor, at *2. Specifically, “[t]he district court found that tolling ceased on [plaintiff’s] claims in 2000, when the Eastern District of Missouri dismissed the Morgan class claims, rather than in 2004, when the Eighth Circuit affirmed that dismissal”; based on that conclusion, all of plaintiff’s promotion claims in the current class action were time-barred to the extent they arose prior to March 2002. Id. (For reasons we do not here discuss, the district court found that plaintiff’s post-March 2002 promotion claims failed on the merits. See id.) With respect to the “retaliatory promotion” claims, the district court entered summary judgment in favor of UPS because plaintiff presented no evidence that the decision makers at UPS knew of his role in the Morgan class action, and that the time between plaintiff’s involvement in the 1994 class action and the March 2002 pay period “was simply too long to independently support an inference of causation.” Id. Finally, the lower court rejected the class action’s “hostile work environment” claim, and held that the four-year statute of limitations barred the class action’s discriminatory and retaliatory pay claims. Id., at *2-*3. Plaintiff challenged on appeal the district court’s ruling only as to the promotion and pay disparity claims, but not the hostile work environment claim. Id., at *3.

Class Action Court Decisions Employment Law Class Actions Uncategorized

Class Action Defense Cases–Williams v. Gerber Products: Ninth Circuit Reverses Dismissal Of Class Action Challenging Gerber “Fruit Juice Snacks” Packaging

District Court Erred in Dismissing Class Action Complaint Alleging that Packaging of Toddler “Fruit Juice Snacks” was Deceptive and Misleading because Reasonable Consumer is not Required to Read Ingredient List to Correct Misimpressions given by Balance of Packaging Ninth Circuit Holds

Plaintiffs filed a class action against Gerber Products alleging that it deceptively marketed its toddler “Fruit Juice Snacks”; the 8-count class action complaint “challenged five features of the packaging used by Gerber to sell its Fruit Juice Snacks” (summarized in the Note, below). Williams v. Gerber Products Co., ___ F.3d ___ (9th Cir. December 22, 2008) [Slip Opn., at 16633]. Defense attorneys moved to dismiss the class action under Rule 12(b)(6); the district court granted the motion and dismissed the class action because it “found that Gerber’s statements were not likely to deceive a reasonable consumer, particularly given that the ingredient list was printed on the side of the box and that the ‘nutritious’ claim was non-actionable puffery.” _Id._, at 16634. The Ninth Circuit reversed.

The Ninth Circuit focused on whether plaintiffs had stated claims under California’s Unfair Competition Law (UCL), which includes false advertising claims, and California’s Consumer Legal Remedies Act (CLRA), noting that these claims “are governed by the ‘reasonable consumer’ test,” which requires plaintiffs to show that members of the public are likely to be deceived by Gerber’s packaging. Williams, at 16637 (citations omitted). Under California law, the advertising need not be “false” – it is sufficient if it is either “actually misleading” or if it is likely to deceive or confuse the public. Id. (citation omitted). The district court dismissed the class action because it found as a matter of law, based “solely on its own review of an example of the packaging,” that the packaging was not likely to deceive the public. Id., at 16637-38.The Circuit Court explained, however, that California courts generally leave such determinations to the trier of fact, id., at 16638 (citations omitted). And while it is true that orders granting motions to dismiss UCL claims “have occasionally been upheld,” those situations are “rare” and this case did not present such a “rare situation.” Id. The Court explained at page 16638 and 16639:

Class Action Court Decisions Uncategorized