Class Action Defense Cases—In re Chocolate Confectionary: Judicial Panel On Multidistrict Litigation (MDL) Grants Plaintiffs Motions To Centralize Individual And Class Action Litigation But Selects Middle District of Pennsylvania

Judicial Panel Grants Plaintiffs Motions for Pretrial Coordination of Individual and Class Action Lawsuits Pursuant to 28 U.S.C. § 1407, Unopposed by Other Individual and Class Action Plaintiffs and by Responding Defendants, and Transfers Individual and Class Action Lawsuits to Middle District of Pennsylvania Twenty (20) individual and class action lawsuits were filed in seven (7) different federal district courts against several defendants alleging federal antitrust violations arising out of the allegation that the defendants “conspired to fix, raise, maintain and/or stabilize the price of chocolate confectionary products in the United States at supracompetitive levels.

Class Action Court Decisions Multidistrict Litigation Uncategorized

FACTA Class Action Defense Cases—In re Oilily: Judicial Panel On Multidistrict Litigation (MDL) Grants Plaintiff Motion Unopposed By Defense To Centralize Class Action Litigation In Northern District of California

Judicial Panel Grants Plaintiff Request for Pretrial Coordination of Class Action Lawsuits Pursuant to 28 U.S.C. § 1407, Unopposed by any Class Action Defendants, and Transfers Class Actions to Northern District of California Two class actions – one in California and one in Pennsylvania – were filed against Oilily and others alleging violations of the federal Fair and Accurate Credit Transactions Act (FACTA). In re Oilily Fair & Acc. Cred. Trans.

Class Action Court Decisions Multidistrict Litigation Uncategorized

Wal-Mart Class Action Defense Cases–Braun v. Wal-Mart: Minnesota Trial Court Rules In Favor Of Class Action Plaintiffs In Labor Law Class Action Against Wal-Mart And Finds Maximum Potential Damages May Approximate $2 Billion

Wal-Mart Willfully Violated Minnesota Labor Laws Entitling Members Covered by Class Action Lawsuit to Millions in Damages and Potentially Billions in Civil Penalties Minnesota Trial Court Holds

Plaintiffs filed a labor law class action against Wal-Mart in Minnesota state court alleging that it required them to work “off the clock” without pay and deprived them of meal and rest breaks, that it violated Minnesota’s Fair Labor Standards Act (MFLSA), and that it failed to maintain accurate time records. Braun v. Wal-Mart, Inc., Case No. 19-CO-01-9790 (Minn. Dakota County, June 30, 2008) [Slip Opn., at 1-2 and 6-7]. The class action sought various relief including civil penalties, liquidated damages, and injunctive relief, id., at 2. The class action complaint alleged further that Wal-Mart’s conduct was “willful” so as to fall within the longer three-year statute of limitations period under Minn. Stat. § 541.07(5), id. The scope of the class action included claims against Sam’s Club, id., at 3 n.1. The trial court certified the litigation as a class action, id., at 7, and the matter proceeded to a bifurcated bench trial, id., at 2. At the liability phase, the trial court limited each side to 60 witnesses and 100 hours of testimony. Id., at 2. The trial court heard about 160 hours of testimony from more than 90 witnesses, and received into evidence almost 1200 exhibits. Id. Forty (40) of the witnesses were Wal-Mart hourly employees, id., at 7. The court then issued a 151-page opinion ruling against Wal-Mart in the class action.

In part, defense attorneys argued that class action treatment was inappropriate because “each individual’s experience is so intrinsically unique that each individual should have to testify about their experience.” Braun, at 11. The trial court found, however, that “[s]ome general patterns and some shared experiences emerged from the testimony at trial” such that it could “decide the factual and legal issues in dispute on a class-wide basis.” Id. In part, the court found that Wal-Mart “should have been on notice of that there was a potential widespread problem of missed rest and meal breaks.” Id., at 18. This problem appears to have been caused by understaffing, and while employee contemporaneous complaints that there were too few employees was not alone sufficient to establish chronic understaffing, see id., at 16-17, an internal audit that revealed tens of thousands of missed meal and rest breaks attributed the problem to “staffing and scheduling not being prepared appropriately,” see id., at 19. The understaffing was particularly problematic in light of Wal-Mart’s written policy to avoid overtime. See id., at 27-29. The trial court found that Wal-Mart “ignored” the internal audits, id., at 20. Subsequent audits revealed that “in November 2003, every audited store in Minnesota scored ‘unsatisfactory’ for the portion of the audit dealing with rest and meal break compliance.” Id., at 21. Moreover, nationally “rest and meal break compliance was the item most frequently rated as ‘unsatisfactory.’” Id., at 22. The court rejected defense efforts to attack the reliability of these audits. Importantly, the court also found that Wal-Mart’s decision to terminate the practice of employee swiping in and out for breaks was directly tied to the problems identified by the audits: “Wal-Mart chose to stop requiring associates to clock in and out for rest breaks, at least in part, to avoid creating what might be construed or used, whether fairly or not, as evidence of missed breaks in litigation.” Id., at 24. The court additionally found that “payroll pressure” contributed to this problem, id., at 25-27.

Class Action Court Decisions Employment Law Class Actions Uncategorized

Song-Beverly Class Action Defense Cases–Absher v. AutoZone: California Court Affirms Defense Judgment In Class Action Under Song-Beverly Act Because Act Applies Only To Personal Information Sought By Merchant At Time Of Sale

Summary Judgment Properly Granted in Class Action under California’s Song-Beverly Act, Concerning Merchant Requests for Personal Information in Connection with Credit Card Transactions, because Class Action Arose from Merchant Request as part of a Return Transaction rather than a Sale California Court Holds Plaintiff filed a putative class action against AutoZone alleging that it violated California’s Song-Beverly Act, Cal. Civil Code, § 1747.08, by requesting that he provide his name, telephone number and signature in connection with his return of a product.

Class Action Court Decisions Uncategorized

PSLRA Class Action Defense Cases–In re 2007 Novastar Financial: Missouri Federal Court Grants Defense Motion To Dismiss Securities Class Action For Failure To Plead Fraud With Requisite Specificity

Securities Fraud Class Action Complaint, though Extremely Lengthy, Failed to Plead Fraud with Specificity Required by PSLRA (Private Securities Litigation Reform Act) Missouri Federal Court Holds

Plaintiff filed a class action complaint against Novastar Financial and three of its officers alleging securities fraud. In re 2007 Novastar Financial, Inc., Securities Litig., ___ F.Supp.2d ___ (W.D. Mo. June 4, 2008) [Slip Opn., at 1]. Defense attorneys moved to dismiss the class action for failure to comply with the heightened pleadings requirements of the Private Securities Litigation Reform Act (PSLRA), and requested that the district court take judicial notice of certain documents. _Id._, at 1-2. The district court granted the motion and dismissed the class action, beginning its analysis with an insightful observation and warning as to a court’s consideration of the alleged falsity of a defendants’ statements: “One might be tempted to think that a complaint spanning more than 100 pages and consisting of more than 200 paragraphs could not fail to be specific. The temptation is dangerous and must be resisted.” _Id._, at 3. Here, the class action merely paints a “broad picture” and consists of “generalities” – which is “precisely what the PSLRA counsels against.” _Id._ The federal court explained at page 3, “This has allowed Plaintiff to pick isolated threads and snippets from the Complaint to create an illusion of detail and insinuate the existence of fraud, which in turn has made it exceedingly difficult for the Court to conduct the analysis required by law. The Court does not intend to parse out each and every sentence contained in the Complaint because doing so ignores the real problem: what the Complaint does not say is as critical as what it actually says.”

The fact the class action complaint contains more than 50 paragraphs spanning 35 pages does not serve as a talisman to create the requisite specificity. In re 2007 Novastar Financial, at 4. Neither the complaint nor plaintiff’s opposition to the motion to dismiss explained what was false about the challenged statements, id. Federal law does not require a company “to divulge every ‘fact’ known to everyone in a company”; indeed, “the PSLRA’s effort to combat claims of ‘fraud by hindsight’ demonstrates a reluctance to countenance claims that attach heightened importance to facts only when looking back at the aftermath of misfortune. “ Id. Based on the court’s analysis, the challenged statements failed to satisfy the PSLRA’s pleading requirements, id., at 5-6. In the end, the federal court found that the class action “fails to identify a single false entry in the Company’s financial statements, nor does he identify the ‘truth’ that should have been disclosed.” Id., at 6. In the court’s view, the class action complaint “reads more like a cautionary tale from a treatise on business management than a charge of knowing misstatements and concealments.” Id. At worst, the allegations may constitute negligence, breach of fiduciary duty or mismanagement, but not fraud. Id.

Class Action Court Decisions PSLRA/SLUSA Class Actions Uncategorized

Punitive Damages Class Action Defense Cases–Exxon v. Baker: Supreme Court Reduces Class Action Punitive Award In Exxon Valdez Case Holding Punitive Damages Under Federal Maritime Law Should Be Limited To Amount Of Compensatory Damages

$2.5 Billion Punitive Damage Award in Class Action Against Exxon Arising out of Valdez Oil Spill Excessive because Considerations of Predictability Warranted 1:1 Ratio Cap on Punitive Damages Awarded under Federal Maritime Law Supreme Court Holds, Resulting in Reduction of Class Action Punitive Damage Award to $500 Million and, as Modified, Class Action Judgment Affirmed Bringing end to 20-year Lawsuit

Almost 20 years ago, in March 1989, Exxon’s supertanker, the Valdez, ran aground off the coast of Alaska and spilled millions of gallons of crude oil into Prince William Sound. Plaintiffs, commercial fishermen and Native Alaskans, filed a class action against Exxon seeking compensatory and punitive damages. Exxon Shipping Co. v. Baker, 554 U.S. ___ (June 25, 2008) [Slip Opn., at 1-2]. (More accurately, various individual civil cases were consolidated into one lawsuit against Exxon and others, and at Exxon’s request the federal court “certified a mandatory class of all plaintiffs seeking punitive damages, whose number topped 32,000.” _Id._, at 5.) Exxon stipulated to its negligence and a jury trial was held to determine compensatory damages and fix punitive damages, _id._ The jury awarded plaintiffs $5 billion in punitive damages against Exxon. _Id._, at 7. The Ninth Circuit affirmed the judgment but reduced the punitive damage award to $2.5 billion, _id._ The Supreme Court granted certiorari to address three questions of maritime law: “whether a shipowner may be liable for punitive damages without acquiescence in the actions causing harm, whether punitive damages have been barred implicitly by federal statutory law making no provision for them, and whether the award of $2.5 billion in this case is greater than maritime law should allow in the circumstances.” _Id._, at 1. The High Court held that federal law did not preclude an award of punitive damages against Exxon, but that the award “should be limited to an amount equal to compensatory damages.” _Id._ The Supreme Court vacated the judgment and remanded the class action. _Id._, at 7. The Court held that the punitive damages awarded in the class action should not have exceeded the compensatory damage award and, accordingly, must be reduced to $500 million.

We do not here recount the factual history of the Valdez oil spill, or the evidence presented concerning Exxon’s culpability in allowing its employee, Captain Joseph Hazelwood, to serve as captain of the Valdez on the fateful night. That history may be found at pages 2 to 4 of the Court’s opinion. Exxon spent approximately $2.1 billion to clean up the oil spill. Exxon Shipping, at 4. The federal government brought criminal charges against Exxon for violating several federal laws; Exxon pleaded guilty to violating various federal laws and ultimately paid a $25 million fine and $100 million in restitution. Id., at 4-5. The federal government also filed a civil action against Exxon, along with the State of Alaska, and obtained a consent decree requiring Exxon to pay another $900 million toward restoring natural resources. Id., at 5. Exxon additionally paid approximately $300 million to settle claims with fishermen, property owners and others. Id.

Class Action Court Decisions Uncategorized

Class Action Defense Cases—In re Orleans Homebuilders: Judicial Panel On Multidistrict Litigation (MDL) Grants Defense Motion To Centralize Class Action Litigation In Eastern District of Pennsylvania

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 Eastern District of Pennsylvania Two class actions – one in New Jersey and one in Pennsylvania – were filed against Orleans Homebuilders and OHB Homes alleging violations of the federal Fair Labor Standards Act; specifically, the class action complaints allege “that defendants avoided paying overtime to employees classified as ‘community sales managers,’ ‘sales assistants,’ or ‘sales associates.

Class Action Court Decisions Employment Law Class Actions Multidistrict Litigation Uncategorized

USPS Class Action Defense Cases—In re United States Postal Service: Judicial Panel On Multidistrict Litigation (MDL) Grants Defense Motion To Centralize Class Action Litigation But Selects Western District of Washington As Transferee Court

Judicial Panel Grants Defense Request for Pretrial Coordination of Class Action Lawsuits Pursuant to 28 U.S.C. § 1407, but Refuses Request to Transfer to District of Columbia and Selects Instead Western District of Washington as Appropriate Transferee Court Two class action lawsuits were filed against the United States Postal Service (USPS) – one in Washington and one in Illinois. Each class action complaint purported to be brought on behalf of a nationwide class.

Class Action Court Decisions Multidistrict Litigation Uncategorized

PSLRA Class Action Defense Cases–Abrams v. Micrus Endovascular: Florida Federal Court Grants Defense Motion To Dismiss Securities Fraud Class Action Complaint For Failure To Plead Specificity Required By PSLRA

Securities Fraud Class Action Complaint Failed to Plead Fraud or Scienter with Specificity Required under the Private Securities Litigation Reform Act (PSLRA) thus Supporting Defense Motion to Dismiss Class Action Florida Federal Court Holds

Plaintiff filed a putative class action against Micrus Endovascular and two of its officers alleging violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the Exchange Act). The class action was consolidated with a second class action, and the parties filed a consolidated class action complaint. Abrams v. Micrus Endovascular Corp., ___ F.Supp.2d ___ (S.D. Fla. May 20, 2008) [Slip Opn., at 1]. In essence, the class action plaintiffs alleged that the defendants “overstated the Company’s future prospects and failed to disclose material facts about the Company’s financial condition in violation of Sections 10(b) and 20(a) of the Exchange Act, resulting in artificial inflation of the Company’s stock price.” _Id._, at 2. Defense attorneys moved to dismiss the class action on the grounds that it failed to plead facts with the specificity required by the Private Securities Litigation Reform Act (PSLRA), and that the challenged statements were “forward-looking” within the meaning of the PSLRA’s “safe harbor” provision. _Id._, at 4-5. The district court granted the motion.

With respect to the class action’s Section 10(b) claim, the federal court outlined the heightened pleading requirements under the PSLRA, see Abrams, at 5-6, and concluded that the class action complaint failed to meet those requirements. In the district court’s view, the statements challenged by the class action “represent the type of ‘corporate optimism’ or ‘mere puffing’ which is not covered by the Exchange Act.” Id., at 6. This is true because “‘no reasonable investor would make an investment decision based on [such] statement[s].’” Id. (citation omitted). In the court’s view, “none of the challenged statements in this case are material statements of verifiable fact,” id., at 7 n.3. And under the facts of the case, the court also rejected plaintiffs’ suggestion that defendants were under an affirmative duty to disclose the internal challenges the Company was facing, id., at 7.

Class Action Court Decisions PSLRA/SLUSA Class Actions Uncategorized

BCBG Class Action Defense Cases–In re BCBG: California State Court Upholds Court Order Granting Defense Motion To Strike Class Action Allegations In Labor Law Class Action

In Connection with Labor Law Class Action Alleging Failure to Pay Managers and Assistant Managers Overtime, Trial Court did not Abuse its Discretion to Manage Class Action Certification when it Granted Defense Motion to Strike Class Action Allegations from Complaint California State Court Holds

Plaintiffs filed a putative class action against AZ3, Inc., doing business as BCBG Maxazria (BCBG), alleging that it had failed to pay its managers and assistant managers for overtime. In re BCBG Overtime Cases, ___ Cal.App.4th ___, 78 Cal.Rptr.3d 257 (Cal.App. June 13, 2008) [Slip Opn., at 2]. A separate class action was filed by a single plaintiff, and then the three plaintiffs filed a coordinated class action complaint against BCBG, _id._ Defense attorneys moved to strike the class action allegations pursuant to Rule 1857(a)(3) of the California Rules of Court. _Id._, at 3. The motion was supported by declarations from 25 current or former managers and assistant managers explaining that “managers are not assigned uniform duties and spend more than 50 percent of their time on non-managerial work,” and that each store is different, targeting different customers, and requiring that managers exercise independent judgment in designing and laying out the store. _Id._ Plaintiffs’ lawyer opposed the motion on the ground that it was improperly sought to circumvent the class action certification process. _Id._, at 4. At oral argument, after the trial court issued a tentative ruling to grant the motion, plaintiffs asked for leave to depose some of the declarants, and for leave to file an amended class action complaint. The trial court denied plaintiffs’ requests and granted the motion finding that it was “properly before it because ‘class certification issues may be determined at any time during the litigation.’” _Id._ As the appellate court explained at page 4, “It found that BCBG had met its burden to show that the action is not suitable for class certification by producing ‘substantial evidence which establishes that Plaintiffs cannot prove the elements of typicality or commonality necessary for class certification.’” The Court of Appeal affirmed.

On appeal, plaintiff argued that the trial court should not have considered evidence outside the pleadings in ruling on the defense motion to strike the class action allegations, and that she should have been granted leave to amend. BCBG, at 1-2. In the alternative, plaintiff argued that she should have been allowed to conduct discovery before the court ruled on the motion, id., at 2. With respect to the first issue, the appellate court held that trial courts have considerable “flexibility” in addressing the certification of class actions and, indeed, have been encouraged by the California Supreme Court to be “procedurally innovative” in connection with “determining whether to allow the maintenance of a particular class suit.” Id., at 5 (quoting City of San Jose v. Superior Court, 12 Cal.3d 447, 453 (Cal. 1974)). California law permits either party to file a motion to certify a class action, and provides that “the pleadings be amended to eliminate allegations as to representation of absent persons, and that the action proceed accordingly.” Cal. Rule of Court, Rule 3.767(a)(3).

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