UCL Class Action Defense Cases–Davis v. Pacific Capital: Ninth Circuit Holds Bank Not Required To Refund Any Portion Of Finance Charge Assessed For IRS Refund Anticipation Loan Following Early Payoff By Borrower

As Matter of First Impression, Finance Charge by Bank for IRS Refund Anticipation Loan was not “Interest” within the Meaning of 15 U.S.C. § 1615 so District Court Properly Dismissed Class Action Ninth Circuit Holds Plaintiff filed a class action against Pacific Capital Bank alleging violations of California’s Unfair Competition Law (UCL); the class action complaint alleged that plaintiff obtained a “Refund Anticipation Loan” (RAL) from the Bank secured by her “anticipated federal income tax refund” and authorized the IRS to deposit her refund into an account established by the Bank.

Class Action Court Decisions Uncategorized

Class Action Defense Cases—In re Countrywide: Judicial Panel On Multidistrict Litigation (MDL) Grants Plaintiff Motion To Centralize Class Action Litigation But Selects Western District of Kentucky As Transferee Court

Judicial Panel Grants Plaintiff Request for Pretrial Coordination of Class Action Lawsuits Pursuant to 28 U.S.C. § 1407, Supported by All Responding Parties including Other Class Action Plaintiffs and Countrywide Defendants, but Transfers Class Actions to Western District of Kentucky Six class actions –three in California, two in Florida, and one in Missouri – were filed against Bank of America and various Countrywide entities, together with other defendants, alleging violations of the federal Fair Credit Reporting Act (FCRA).

Class Action Court Decisions FCRA Class Actions Multidistrict Litigation Uncategorized

FLSA Class Action Defense Cases–Bernal v. Vankar: Texas Federal Court Grants Class Action Plaintiffs Summary Judgment In Labor Law Class Action Concluding Employers Failed To Pay Minimum Wages And Overtime Required By FLSA

Class Action Plaintiff Alleging Violations of Fair Labor Standards Act (FLSA) Entitled to Summary Judgment because Employers Improperly took “Tip Credits” Against Employee Wages and Failed to Pay Overtime Required by FLSA Texas Federal Court Holds

Plaintiff filed a class action against his former employers – TDS Entertainment (which owns Dixie’s Country Bar), Chicago Bar and Vankar Enterprises (which owns Babcock Bar) – alleging violations of the federal Fair Labor Standards Act (FLSA); the class action complaint asserted that defendants failed to pay employees minimum wage because they unlawfully credited tips against their employees’ salaries. Bernal v. Vankar Enterprises, Inc., 579 F.Supp.2d 804, 805 (W.D.Tex. 2008). Specifically, the class action alleged that plaintiff worked at defendants’ bars for less than the federal minimum wage, that plaintiff received tips from customers, and that defendants required that plaintiff contribute a portion of his tips to a “tip pool” to be shared with “managers and/or other employees who do not customarily and regularly receive tips.” Id., at 805-06. The class action alleged that defendants were not permitted to take “tip credits” against plaintiff’s minimum, and so violated the FLSA by paying him less than minimum wage. Id., at 806. The class action complaint prayed to recover as wages the difference between the federal minimum wage and the actual wage paid by defendants., id. The district court granted plaintiff’s motion for class action certification, id. Plaintiff’s counsel then moved for summary judgment as to “(1) whether the bars failed to pay the applicable minimum wage under circumstances in which the bars were not permitted to claim a tip credit; and (2) whether the bars failed to pay overtime as required by the FLSA.” Id. The federal court granted the motion.

The district court explained that “[t] he primary issue before the Court is whether a genuine issue of material fact exists regarding Defendants’ entitlement to use the amount of tips its employees received in satisfaction of a portion of Defendants’ minimum wage obligations.” Bernal, at 806. After summarizing the well-known standards governing summary judgment motions, see id., at 806-07, the court discussed the FLSA’s authorization, under “limited circumstances,” to pay a “tipped employee” less than the federal minimum wage, id., at 807. A “tipped employee” – defined as an employee who customarily receives more than $30 per month in tips, see 29 U.S.C. § 203(t), may be paid less than minimum wage (but no less than $2.13 per hour) “if the amount of the tips the employee actually receives, added to the hourly wage the employer pays, is at least equal to the minimum wage in effect,” a practice known as “taking a ‘tip credit.’” Bernal, at 807. The district court explained, however, that “An employer may not…take a tip credit ‘with respect to any tipped employee unless such employee has been informed by the employer of the [tip credit] provisions’” and that “no tip credit may be taken ‘with respect to any tipped employee unless … all tips received by such employee have been retained by the employee,’ except in cases in which tips are pooled ‘among employees who customarily and regularly receive tips.’” Id. (citations omitted).

Class Action Court Decisions Employment Law Class Actions Uncategorized

Google Class Action Defense Cases–Vulcan Golf v. Google: Illinois Federal Court Denies Class Action Treatment For Class Action Complaint Against Google Alleging Violations Of Anti-Cybersquatting Protection Act

Class Action Complaint’s Anti-Cybersquatting Protection Act Claims do not Warrant Class Action Treatment because Rule 23(b)(3)’s Predominance Requirement for Class Action Certification not Met due to Individualized Issues Surrounding Trademarks or Personal Names Illinois Federal Court Holds

Plaintiffs filed a class action against Google and others alleging “a wide-ranging scheme whereby they receive ‘billions of dollars in ill-gotten advertising and marketing revenue’ by knowingly and intentionally registering, licensing and monetizing purportedly deceptive domain names at the expense of the plaintiff-mark owners.” Vulcan Golf, LLC v. Google Inc., ___ F.Supp.2d ___ (N.D.Ill. December 18, 2008) [Slip Opn., at 1]. In part, the class action alleged that Google’s conduct violated the Anti-Cybersquatting Protection Act (ACPA), _id._ Plaintiffs filed a motion for class action certification, _id._; defense attorneys countered that class action treatment was not warranted because plaintiffs’ claims are not typical and because they are not adequate class representatives, _see id._, at 4, and because the predominance and superiority tests of Rule 23(b)(3) had not been met, _see id._, at 7. The district court rejected the first defense challenges, finding the requirements for class action certification under Rule 23(a) were satisfied. However, the district court concluded that Rule 23(b)(3)’s requirements for class action treatment had not been met. Accordingly, the court refused to certify the litigation as a class action.

With respect to the requirements for class action certification set forth in Rule 23(a), the district court easily found that numerosity and commonality had been satisfied. Vulcan Golf, at 4-5. Defense attorneys argued that plaintiffs’ claims were atypical and that they were not adequate class representatives “because intra-class conflicts exist.” Id., at 5. For reasons we do not detail here, the district court rejected the defense arguments and found that each of Rule 23(a)’s requirements for class action treatment had been met. See id., at 5-7. In sum, the federal court explained at page 7, “The representatives’ claims arise from the same course of conduct as the other class members and the class representatives have the same interests and have suffered the same injury as the putative class members.” It turned, therefore, to whether the class action requirements of Rule 23(b)(3) had been met.

Certification of Class Actions Class Action Court Decisions Uncategorized

Time Class Action Defense Cases—In re Set-Top Cable Television: Judicial Panel On Multidistrict Litigation (MDL) Grants Defense Motion To Centralize Class Action Litigation In Southern District of New York

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 Actions to Southern District of New York Six class actions – three in California, and one each in Kansas, Missouri and New York – were filed against Time Warner and Time Warner Cable, and others, alleging violations of the Sherman Antitrust Act. In re Set-Top Cable Television Box Antitrust Litig.

Class Action Court Decisions Multidistrict Litigation Uncategorized

ERISA Class Action Defense Cases–Boos v. AT&T: Texas Federal Court Certifies Class Action After Independently Analyzing Requirements For Class Action Certification Of Rule 23 Despite Lack Of Defense Objection To Class Action Treatment

District Court Independently Analyzes Class Action Certification Requirements of ERISA Class Action Complaint, despite Lack of Defense Objection to Class Action Treatment, and Concludes Class Action Certification Warranted Texas Federal Court Holds Plaintiffs, retirees of BellSouth Corporation, a subsidiary of AT & T, filed a class action against AT&T and BellSouth alleging violations of the he Employee Retirement Income Security Act of 1974 (ERISA); specifically, the class action complaint alleged “that (1) a benefit known as telephone concession, which was provided to certain employees of BellSouth after retirement, constitutes a defined benefit pension plan under ERISA (hereinafter, ‘plan claims’); and (2) that Defendants violated ERISA in administering and maintaining the telephone concession plan (hereinafter, ‘benefit claims’).

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

DuPont Class Action Defense Cases–In re Teflon: Iowa Federal Court Denies Class Action Treatment To False Advertising Class Action Against DuPont Alleging Failure To Disclose Health Risks Associated With Non-Stick Cookware Coatings

Class Action Claims Alleging DuPont knew but Failed to Disclose Health Risks Associated with use of Non-Stick Cookware Coatings (including Teflon) not Entitled to Class Action Treatment because Class Definition Failed and Membership in Proposed Class could not be Objectively Established Iowa Federal Court Holds

Thirteen class action lawsuits were filed against E.I. DuPont De Nemours concerning its production and marketing of Teflon non-stick cookware coatings; specifically, the class action complaints alleged that “DuPont made false, misleading and deceptive representations regarding the safety of its product.” In re Teflon Products Liab. Litig., ___ F.Supp.2d ___ (S.D. Iowa December 5, 2008) [Slip Opn., at 1]. In essence, the class action plaintiffs asserted that the non-stick coatings “can decompose at temperatures within the realm of ‘normal use,’ potentially releasing a synthetic chemical” that is harmful to humans and could even cause birth defects. _Id._, at 2. Ultimately, the Environmental Protection Agency brought claims against DuPont under the Federal Toxic Substances Control Act, which DuPont settled in 2005 by paying “‘the largest civil administrative penalty [the] EPA has ever obtained under any federal environmental statute.’” _Id._, at 2-3. The Judicial Panel on Multidistrict Litigation centralized the class actions in the Southern District of Iowa pursuant to 28 U.S.C. § 1407, _see id._, at 1 n.2. According to the allegations underlying the class action, DuPont knew of these dangers prior to 1960, but failed to disclose them to consumers, _id._, at 3. Plaintiffs’ attorneys moved the district court to certify the litigation as a class action. _Id._ 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.

After outlining the rules governing class action certification under Rule 23, see In re Teflon, at 5-7, the district court observed that there are two additional “implicit” requirements: “1) that the class definition is drafted to ensure that membership is ‘capable of ascertainment under some objective standard;’ and 2) that all class representatives are in fact members of the proposed class,” id., at 7 (citations omitted). The federal court began its analysis, then, with the definition of the class, which it noted “is at the heart of any decision” on class action treatment, id., at 8. Because several putative class representatives testified in deposition that they were uncertain whether the products they purchased in fact had been manufactured by DuPont, or that they mistakenly believed that all non-stick cookware coatings were manufactured by DuPont, the district court concluded that the class definition failed. See id., at 8-14. Additionally, the court could not conclude “that each proposed representative is in fact a member of the proposed class, or…sub-class” because “the vast majority of plaintiffs must rely on memory to establish crucial facts [which] will prevent the parties and the Court from ever being able to establish membership with objective certainty.” Id., at 14. Accordingly, it held that it “cannot in good conscience grant certification.” Id.

Certification of Class Actions Class Action Court Decisions Multidistrict Litigation Uncategorized

Class Action Defense Cases–Turner v. AAMC: California State Court Reverses Class Action Judgment In Favor Of Plaintiffs Holding California’s Civil Rights And Disabled Persons Act Did Not Apply To MCAT Standardized Tests

California State Law does not Require Testing Accommodations for Reading-Related Learning Disabilities so Class Action Against Association of American Medical Colleges for Failing to Afford Accommodations, other than those Required by Federal Americans with Disabilities Act (ADA), Fails California State Court Holds Plaintiffs, individuals with reading-related learning disabilities who applied to take the MCAT in California, filed a putative class action against the Association of American Medical Colleges (AAMC) for violations of California’s Unruh Civil Rights Act and Disabled Persons Act; specifically, the class action complaint alleged that plaintiffs “requested more time and/or a private room in which to take the test,” but that the AAMC denied the requests, thus failing to afford them accommodations for reading-related disabilities.

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

Tobacco Class Action Defense Cases-Altria Group v. Good: Supreme Court Holds Class Action Claims Challenging “Light” And “Low Tar” Labels Not Preempted By Federal Law And Affirms Reinstatement Of Class Action

U.S. Supreme Court Affirms First Circuit Decision Reinstating Class Action Against Tobacco Companies Holding District Court Erred in Dismissing Class Action Challenging Advertising of “Light” and “Low Tar” Cigarettes as Expressly Preempted by the Federal Cigarette Labeling and Advertising Act (FCLAA)

Plaintiffs filed a class action against Philip Morris and its parent, Altria, for violations of Maine’s Unfair Trade Practices Act; specifically, the class action complaint alleged that defendants’ design, marketing and sale of “light” and “low tar” cigarettes “fraudulently conveyed the message that their ‘light’ cigarettes deliver less tar and nicotine to consumers than regular brands despite [defendants’] knowledge that the message was untrue.” Altria Group, Inc. v. Good, ___ U.S. ___, 2008 WL 5204477, *2 (December 15, 2008). Defense attorneys insisted that the advertisements were factually accurate, but moved for summary judgment on the ground that the claims in the class action complaint were preempted by the Federal Cigarette Labeling and Advertising Act (FCLAA), _id._ The district court agreed the dismissed the class action, but the First Circuit reversed, concluding that the class action claims were not preempted. _See Good v. Altria Group, Inc._, 501 F.3d 29 (1st Cir. 2007). The First Circuit’s decision conflicted with a decision out of the Fifth Circuit, which held that state-law challenges to the use of “light” and “low tar” descriptors was expressly preempted by the FCLAA. _See Brown v. Brown & Williamson Tobacco Corp._, 479 F.3d 383 (5th Cir. 2007). The Supreme Court granted certiorari in Good to resolve this conflict. 2008 WL 5204477, *3

The class action plaintiffs alleged that they had smoked for 15 years, and the class action allegations did not contest that under the “Cambridge Filter Method” test conducted using a machine that “smokes” cigarettes and collects tar and nicotine for weighing, less tar and nicotine is in fact drawn into the filter using “light” or “low tar” cigarettes. Altria Group, at *2 and n.2. The heart of the class action complaint, rather, was the allegation smokers unconsciously engage in behavior that negates the benefits sought to be achieved by the cigarette filter design “[b]y covering filter ventilation holes with their lips or fingers, taking larger or more frequent puffs, and holding the smoke in their lungs for a longer period of time.” Id., at *2. The class action further alleged that defendants knew of this compensation effect yet marketed “light” cigarettes with an intent to deceive smokers into believing that the cigarettes “would pose fewer health risks.” Id. Defense attorneys moved for summary judgment on the grounds, inter alia, that the FCLAA expressly preempted the class action claims, id. In granting the defense motion, the district court likened the class action claims to a “failure to warn” claim, akin to the claim found to be preempted in Cipollone v. Liggett Group, Inc., 505 U.S. 504 (1992) and Lorillard Tobacco Co. v. Reilly, 533 U.S. 525 (2001). Id. The First Circuit reversed, holding that the class action instead presented “in substance a fraud claim that alleges that [defendants] falsely represented their cigarettes as ‘light’ or having ‘lowered tar and nicotine’ even though they deliver to smokers the same quantities of those components as do regular cigarettes.” Id., at *3 (citing 501 F.3d at 36). The First Circuit analyzed the controlling authority – the plurality opinion in Cipollone – and concluded that a claim is not preempted merely because it is grounded on the advertising or promotion of cigarettes with FCLAA-compliant labels, or because it arises out of the adverse health consequences of such cigarettes. See 501 F.3d at 36-43.

Class Action Court Decisions Uncategorized

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

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