Labor Law Class Action Defense Cases–Isner v. Falkenberg: California Court Affirms Summary Judgment In Favor Of Defense In Labor Law Class Action Holding Resident Employees Need Only Be Compensated For Carrying Out Assigned Duties

Class Action Alleging Failure to Pay Resident Employees for Time Spent “On Call” though not Performing Assigned Tasks Properly Subject to Summary Judgment in Favor of Defense California State Court Holds

Plaintiffs filed a putative labor law class action against their former employer, a property management company, alleging inter alia that it had failed to pay them for overtime and waiting time; specifically, the class action complaint alleged that defendant failed to pay its “resident employees” for “on-call” time. Isner v. Falkenberg/Gilliam & Associates, Inc., 160 Cal.App.4th 1393, 73 Cal.Rptr.3d 433, 434 (Cal.App. 2008). The class action alleged that the resident employee employment agreement signed by plaintiffs required that they be on call “on designated evenings from 5:00 p.m. until 8:00 a.m. and on designated weekends from 5:00 p.m. Friday evening until 8:00 a.m. Monday morning.” The agreement further required employees to “remain on the facility premises within hearing distance of the emergency alarms systems and telephone” while on call, but provided that they were “otherwise free to use on-call time as he or she chooses.” Id. The appellate court explained, “The gravamen of the complaint was that these resident employees were entitled to payment not just for the hours they spent responding to emergencies while on call, but for all the hours they were on call and thus confined to their apartment or the building office so as to remain within audible range of the telephone and alarm.” Id., at 436. Defense attorneys moved for summary judgment arguing that plaintiffs were entitled to wages only for time spent on the job; the trial court agreed that payment was due only for work “actually performed” and, accordingly, granted summary judgment on the class action complaint. Id. The appellate court affirmed.

The pertinent facts established that resident employees were allowed to arrange for another resident employee to “respond to emergency calls with the Employee, or in the place of the Employee” and that employees would be paid for “[a]ll time spent in responding to emergencies.” Isner, at 434. Moreover, if emergencies prevent an employee from obtaining 5 hours of “uninterrupted sleep,” then defendant agreed to “credit Employee with eight hours’ time worked under the terms of [the agreement].” Id., at 435. Plaintiffs were given an apartment to live in, and at least one of them stayed within range of the alarm and telephone while on duty or on call. Id. “While [plaintiffs] were on duty and on call, they slept, ate, talked on their personal telephone, used the internet, played computer games, read magazines or watched television in their apartment when they were not responding to an emergency.” However, while on duty or on call, plaintiffs could not go to the pool or walk around the apartment, because they would be unable to hear the alarm or telephone, and they could not leave the apartment. Id. It was plaintiffs’ responsibility to keep track of and bill their time with respect to “both their usual eight-hour work day and times spent responding to emergencies,” id. And while defendant permitted them to bill all time spent on the job, plaintiffs generally “recorded only the calls that took 15 minutes or more.” Id., at 435-36. “[T]here was never an occasion when [plaintiffs] were not paid for time they recorded on their time sheets.” Id., at 436.

Class Action Court Decisions Employment Law Class Actions Uncategorized

PSLRA Class Action Defense Cases–In re Charter Communications: Eighth Circuit Holds As Matter Of First Impression That District Court Failure To Include In Judgment Findings Required By Rule 11(b) Does Not Require Remand

Following Dismissal of Securities Fraud Class Action, District Court Failure to Include Rule 11(b) Statutory Findings in Judgment may be Decided by Court of Appeal Eighth Circuit Holds Plaintiff filed a putative securities fraud class action against various defendants, including Scientific-Atlanta and Motorola. The district court dismissed the class action claims against Scientific-Atlanta and Motorola and entered a separate, final judgment under Rule 54(b). Plaintiff appealed, and the Eighth Circuit affirmed.

Class Action Court Decisions PSLRA/SLUSA Class Actions Uncategorized

Attorney-Client Privilege/Class Action Defense Cases–Costco v. Superior Court: California State Court Denies Writ Relief Of Court Order Requiring Defense To Produce In Labor Law Class Action Copy Of Redacted Letter Prepared By Outside Counsel

Class Action Discovery Order Requiring Defense to Produce Redacted Letter Prepared by Outside Counsel did not Warrant Extraordinary Writ Relief because Unredacted Portions were “Inconsequential” and Disclosure to Class Action Plaintiffs would not cause Costco “Irreparable Harm” California Court Holds

Plaintiffs filed a putative labor law class action against Costco alleging that it “misclassified certain managers as exempt employees.” Costco Wholesale Corp. v. Superior Court, ___ Cal.App.4th ___, 74 Cal.Rptr.3d 345, 347 (Cal.App. 2008). According to the class action complaint, each Costco warehouse store “has hundreds of employees and up to 20 managers”; a “general manager” (apparently the most senior person at the warehouse store), and “ancillary managers” (in charge of various departments, such as meat, bakery, pharmacy, optical, _etc._). _Id._, at 348. The class action alleges that “[s]enior operations personnel at Costco determine how to classify employees for compensation purposes,” and in June 2000 Costco’s corporate counsel hired a law firm to “‘undertake [a] comprehensive factual investigation and legal analysis regarding the classification of managers within Costco Warehouses.’” _Id._ In response to that request, outside counsel conducted interviews, performed legal research and prepared a 22-page letter dated August 4, 2000, addressed to Costco’s corporate counsel. _Id._ Internal meetings followed, attended by in-house counsel, and in 2001 Costco reclassified ancillary managers as non-exempt employees. _Id._, at 348-49. The gravamen of the class action is that Costco “unlawfully failed to pay overtime to ancillary managers…because Costco categorically had misclassified these employees as exempt employees”; Costco’s answer to the class action complaint included the affirmative defense that “plaintiffs were _exempt_ from the protection of the California overtime laws (the exemption defense).” _Id._, at 349. In discovery, plaintiffs sought _inter alia_ production of the August 4 letter, which defense attorneys had listed on a privilege log; the trial court ordered production of a redacted copy of the letter. Costco sought a writ of mandate but the Court of Appeal denied the petition.

This discovery dispute centered on whether Costco had placed the contents of the August 4 letter at issue by virtue of its affirmative exemption defense and other discovery responses. Specifically, in response to interrogatories Costco stated that it “reasonably expected that employees who held the position of salaried Costco manager regularly and customarily exercised their independent judgment and discretion performing such exempt tasks…for more than 50% of their time.” Costco, at 349. The defense “person most knowledgeable about Costco’s exemption defense” testified that “Costco relied, in part, on input from counsel in classifying its employees as exempt or nonexempt.” Id., at 350. Defense attorneys stated that Costco was not relying on “advice of counsel” as a defense, and asserted the attorney-client privilege as to any discussion with counsel, id. Plaintiffs demanded discovery of legal advice provided by outside counsel on the grounds that the privilege had been waived; defense attorneys reiterated that Costco’s “‘reasonable expectation’ exemption defense was not dependent upon legal advice.” Id.

Class Action Court Decisions Employment Law Class Actions Uncategorized

FACTA Class Action Defense Cases—In re OSI Restaurant: 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 FACTA Class Action Lawsuits Pursuant to 28 U.S.C. § 1407, and Agrees with Defense Recommendation of Eastern District of Pennsylvania as the Transferee Court Four class action lawsuits were filed against OSI Restaurant Partners (OSI) alleging violations of the federal Fair and Accurate Credit Transactions Act (FACTA) based on OSI’s failure to delete certain information from customer credit and debit card receipts.

Class Action Court Decisions FCRA Class Actions Multidistrict Litigation Uncategorized

Class Action Defense Cases—In re Aurora Dairy: Judicial Panel On Multidistrict Litigation (MDL) Grants Plaintiff Motion To Centralize Class Action Litigation But Selects Eastern District Of Missouri As Transferee Court

Judicial Panel Grants Plaintiff Request, over Defense Objection, for Pretrial Coordination of Class Action Lawsuits Pursuant to 28 U.S.C. § 1407, but Transfers Class Actions to Eastern District of Missouri Four class action lawsuits (2 in Colorado and 1 each in Florida and Missouri), each of which were filed as putative nationwide class actions, were filed against various Aurora Dairy Corp. alleging “Aurora misled them into believing that the milk they purchased was ‘organic’ or ‘USDA organic’ when in fact the milk failed to meet organic standards.

Class Action Court Decisions Multidistrict Litigation Uncategorized

Microsoft Vista Class Action Defense Cases-Kelley v. Microsoft: Ninth Circuit Denies Review Of Certification Of Nationwide Class Action Against Microsoft By Washington Federal Court In Class Action Challenging OEM Marketing Of Vista Operating System

Microsoft Petition for Permission to Appeal Class Action Certification of Nationwide Class Action Challenging Labeling PCs as “Windows Vista Capable” even if PCs could not Run Premium Vista Properly Denied by Ninth Circuit We previously reported on the nationwide class action certified against Microsoft arising out of a class action complaint that challenges the marketing of new “Windows Vista Capable” and “Express Upgrade” programs. That class action complaint alleged that almost a year before its release of the new Vista operating system, Microsoft “authorized original equipment manufacturers…to place a sticker on personal computers… indicating that the PCs had been certified by Microsoft as ‘Windows Vista Capable.

Certification of Class Actions Class Action Court Decisions Uncategorized

Class Action Defense Cases–Vandyne v. Allied Mortgage: Missouri Supreme Court Reverses Certification Of Class Action Because Membership In Class Action Required A Finding Of Liability And Because Class Definition Ambiguous

Class Action Alleging Failure to Disclose “Loan-Related” Fees Improperly Certified as Class Action because Class Membership Turned on Finding of Defendant’s Liability and because Class Definition Failed to Adequately Describe “Loan-Related” Fees and Services, Requiring Reversal of Trial Court Order Missouri Supreme Court Holds

Plaintiffs filed a class action in Missouri state court against Allied Mortgage Capital Corporation alleging violations of the state’s Merchandising Practices Act “by misrepresenting charges for third-party services in connection with their loan transaction.” Vandyne v. Allied Mortgage Capital Corp., 242 S.W.3d 695, 696 (Mo. 2008). The class action alleged that Allied “failed to disclose costs incurred in processing Plaintiffs’ loans”; plaintiffs moved to certify the lawsuit as a class action, defining the class “in part as those individuals who paid costs based upon alleged ‘nondisclosures and false, unfair, deceptive or misleading disclosures’ by Allied.” Id., at 697. Defense attorneys objected that the definition of the class “requires the court to resolve a paramount liability question in order to identify class membership.” Id. The trial court granted plaintiffs’ motion for class action certification, but the Missouri Supreme Court unanimously reversed.

The Supreme Court agreed with defense attorneys that the definition of the class was improper; it held, however, that “the class definition can be cured by eliminating the phrase ‘nondisclosures and false, unfair, deceptive or misleading disclosures’ from the class definition.” Vandyne, at 697. The Supreme Court also agreed with a separate defense argument, that the definition of the class “is insufficiently definite with respect to defining what fees and services are ‘loan-related.’” Id. The Court explained that “the question as to whether a particular service or fee is ‘loan-related’ can only be reached through an analysis of each individual potential class members’ loan documents.” Id. Class counsel apparently represented at oral argument that, on remand, the class action complaint would be amended to “state separately those fees and services as to which class certification is sought.” Id., at 697-98

Certification of Class Actions Class Action Court Decisions Uncategorized

CAFA Class Action Defense Cases–In re Katrina Canal: Fifth Circuit Affirms Denial Of Motion To Remand Class Action To State Court Holding State Sovereignty Did Not Preclude Removal Of Class Action Under CAFA Because Citizens Were Class Members

Class Action by State on Behalf of Itself and Citizens Properly Removed under Class Action Fairness Act (CAFA) because State’s Sovereign Immunity not Applicable to Citizens Fifth Circuit Holds

Louisiana’s Attorney General Louisiana filed a putative class action against more than 200 insurance companies on behalf of the State and numerous Louisiana citizens based on defendants’ alleged failure to pay for covered insurance claims arising out of Hurricanes Katrina and Rita; the class action complaint alleged only state law claims, and sought compensatory, declaratory and injunctive relief. In re Katrina Canal Litig. Breaches, 524 F.3d 700, 2008 WL 1118176, *1 (5th Cir. 2008). Defense attorneys removed the class action to federal court asserting removal jurisdiction under the Class Action Fairness Act (CAFA) and the Multiparty Multiform Trial Jurisdiction Act (MMTJA). Id., at *1, *3. Louisiana moved to remand the class action to state court, “arguing that CAFA did not apply and that Louisiana enjoyed sovereign immunity from involuntary removal to federal court in that it was suing in its state court to enforce state law.” Id., at *1. The district court denied the motion; because it found that removal jurisdiction existed under CAFA, it did not reach the issue of whether jurisdiction also existed under MMTJA. Id., at *3. The Fifth Circuit granted the State’s petition under CAFA for permission to appeal the remand order under CAFA, and then affirmed.

On appeal, Louisiana argued “CAFA does not apply, and that even if it does apply by its terms, it cannot abrogate sovereign immunity from federal process, or at the least Congress did not clearly do so in CAFA.” In re Katrina, at *3. (Louisiana also raised arguments under MMTJA, but the Fifth Circuit did not address this issue so we do not discuss it here.) The only aspect of CAFA removal jurisdiction challenged on appeal was diversity; specifically, Louisiana argued that a state is not a person for purposes of diversity jurisdiction and, further, that “it has not filed a class action as defined by CAFA.” Id. The Fifth Circuit held that this was not the relevant inquiry, because “Louisiana seeks relief for both the State and the citizens as “recipients” of insurance.” and the citizens adequately satisfied the minimal diversity required by CAFA. Id. The “difficult question” addressed by the Circuit Court was whether state sovereignty barred removal. Id.

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

CAFA Class Action Defense Cases–Lussier v. Dollar Tree: Ninth Circuit Upholds Denial Of Attorney Fees For Flawed Removal Of Class Action Under Class Action Fairness Act Because Basis For Removal Was Objectively Reasonable

Following Remand of Labor Law Class Action to State Court on Grounds that Class Action had been “Commenced” Prior to Effective Date of Class Action Fairness Act of 2005 (CAFA) thus Precluding Removal Jurisdiction under CAFA, District Court did not Abuse its Discretion in Refusing to Award Plaintiffs Attorney Fees because Defense Removed Class Action under a Novel Theory of First Impression Ninth Circuit Holds Plaintiffs filed a class action lawsuit against Dollar Tree Stores alleging various labor law violations.

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

FLSA Class Action Defense Cases–In re Pilgrim’s Pride: Arkansas Federal Court Conditionally Certifies Class Action In MDL Labor Law Class Action Alleging Failure To Pay For Time Spent Donning And Doffing Protective Equipment

FLSA Class Action Alleging Failure to Compensate Workers for Time Spent Donning, Doffing and Cleaning Safety and Sanitary Gear Involved Putative Class Action Representatives “Similarly Situated” to Members of Proposed Class Warranting Certification of FLSA Collective Action for Purposes of Notice Despite Differences in Employee Equipment Utilized, Time Incurred and Timekeeping Methods Arkansas Federal Court Holds Various class action lawsuits were filed against Pilgrim’s Pride for violations of the Fair Labor Standards Act (FLSA) alleging failure to compensate employees for time spent donning and doffing safety and sanitary gear at chicken processing plants; the Judicial Panel on Multidistrict Litigation centralized the class actions in the Western District of Arkansas, and plaintiffs filed a consolidated motion for class action certification (technically, a “collective action” under the FLSA).

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