Class Action Defense Cases-In re Mercedes-Benz: Judicial Panel On Multidistrict Litigation (MDL) Grants Defense Motion To Centralize Class Action Litigation In District of New Jersey

Judicial Panel Grants Defense Request, Supported by Plaintiffs, for Pretrial Coordination of Class Action Lawsuits Pursuant to 28 U.S.C. § 1407 and Agrees with Defense Attorneys that District of New Jersey is Appropriate Transferee Court Three class action lawsuits (and subsequent tag-along lawsuits) were filed against Mercedes-Benz “relating to (1) the impact of the conversion of the cellular network from an analog/digital network to a digital-only network in early 2008, and (2) the availability of Tele Aid service in certain Mercedes vehicles thereafter.

Class Action Court Decisions Multidistrict Litigation Uncategorized

Hurricane Class Action Defense Cases-Audler v. CBC Innovis: Fifth Circuit Holds Plaintiff Lacked Standing To Prosecute Class Action Against Companies Unrelated To His Property And Affirms Dismissal Of Class Action Complaint Against Remaining Defendant

Class Action Alleging Companies Erroneously Advised Lenders that Homes were Outside Flood Zones Properly Dismissed because (1) Plaintiff Lacked Standing to Pursue Class Action Claims Against Companies that did not Provide Plaintiff’s Lender with Flood Zone Determination and (2) Company that Provided such Determination on Plaintiff’s Property owed Duties Only to Lender not Plaintiff Fifth Circuit Holds

After his home suffered floodwater damage from Hurricane Katrina, plaintiff filed a putative class action in Louisiana state court against numerous defendants that provide flood zone determinations to lenders; the class action alleged that defendants failed to properly determine whether homes were located within a Special Flood Hazard Area (SFHA), and sought damages under state law based on theories of negligence, failure to warn, detrimental reliance, and breach of guaranty or warranty. Audler v. CBC Innovis Inc., 519 F.3d 239, 2008 WL 509323 (5th Cir. 2008). Each claim in the class action complaint was “separate and apart from the federal flood insurance legislation governing lenders and… none of [the] claims arise under that legislation.” Id., at *3. In essence, the class action alleged that the class members failed to secure flood insurance because defendants erroneously advised them that their homes were outside a SFHA, so they were uninsured when Hurricane Katrina struck. Id., at *2. Defense attorneys removed the class action to federal court on the ground of diversity jurisdiction and under the Class Action Fairness Act of 2005 (CAFA), id., at *3. The defense then moved to dismiss the class action complaint for failure to state a claim and for lack of standing, id. The district court agreed with the defense arguments and dismissed the class action. Id. The Fifth Circuit affirmed.

Preliminarily, it bears noting that “[a] determination…that a property is not located within a SFHA does not prevent a borrower from purchasing private flood insurance.” Audler, at *2. The defendant involved in plaintiff’s loan (CBC) argued that it prepared flood zone determinations for the lender and that it owed no duties to the borrower in the loan transaction. Id., at *3. The other class action defendants argued that they were not involved in plaintiff’s loan and thus he lacked standing to prosecute any claims against them, id. Following dismissal of the class action complaint, plaintiff appealed to the Fifth Circuit; two defendants moved to dismiss the appeal for lack of standing. Id.

Certification of Class Actions Class Action Court Decisions Uncategorized

ADEA Class Action Defense Cases-Schuler v. PricewaterhouseCoopers: District of Columbia Circuit Reverses District Court Order Dismissing ADEA Class Action Finding Plaintiff Satisfied ADEA Prerequisites For Filing Class Action

District Court Erred in Dismissing ADEA (Age Discrimination in Employment Act) Class Action because Plaintiff Satisfied ADEA Prerequisites for Filing Class Action Complaint and because Plaintiff was not Required to File Separate Charges for each Allegedly Discriminatory Failure to Promote Plaintiff District of Columbia Circuit Court Holds

Plaintiff, who worked in Washington, D.C., filed an EEOC (Equal Employment Opportunity Commission) charge in New York alleging PricewaterhouseCoopers discriminated against him on the basis of age in violation of the federal Age Discrimination in Employment Act (ADEA) “by maintaining a discriminatory partnership policy under which the company refuses to promote older qualified employees.” Schuler v. PricewaterhouseCoopers, LLP, ___ F.3d ___, 2008 WL 398968, *1 (D.C. Cir. February 12, 2008). The EEOC dismissed the charge and informed plaintiff of his right to sue. Plaintiff responded by filing a class action complaint in the district court for the District of Columbia; the class action alleged violations of the ADEA and of D.C.’s Human Rights Act. _Id._ Defense attorneys moved to dismiss the class action complaint: The district court dismissed the class action on the ground that plaintiff “failed to satisfy the ADEA’s procedural requirements because he failed to file (1) his EEOC charge with the D.C. Office of Human Rights and (2) a new EEOC charge following the company’s allegedly unlawful July 2005 promotion denial.” _Id._ Plaintiff appealed and the Circuit Court reversed, reinstating his class action.

The class action alleged that PricewaterhouseCoopers requires mandatory retirement at age 60, and that as a result it “rarely promotes employees over the age of forty-five to partner.” Schuler, at *2. This damages qualified employees because “Partners enjoy higher salaries, more generous retirement benefits, and greater responsibilities than other professional employees.” Id. The class action complaint further alleges that PricewaterhouseCoopers “refuses to promote him ‘and other qualified older professional employees’ to partner on the basis of age in violation of the ADEA” and that “he is the longest serving managing director in the firm, having been promoted to that position in 1994, and that his education, training, and experience qualify him for partnership.” Id. (Plaintiff previously sued PwC in 2002 over the same allegedly discriminatory partnership policy. Id., at *2.) The Circuit Court also noted that plaintiff’s EEOC charge had included the instruction: “I want this Class Action Charge filed with both the EEOC and the State and local Agency, if any.” Id., at *3.

Class Action Court Decisions Employment Law Class Actions Uncategorized

Class Action Defense Cases-In re Ingram Barge Company: Fifth Circuit Dismisses Appeal From Order Granting Defense Motion To Strike Class Action Allegations For Lack Of Appellate Jurisdiction

District Court Order Striking Class Action Allegations but Permitting Named Plaintiffs to Pursue Individual Claims not Appealable thus Requiring Dismissal of Appeal from Class Action Order Fifth Circuit Holds Plaintiffs filed a class action lawsuit against various defendants alleging that the Army Corps of Engineers had defectively designed and constructed various levee and floodwall systems that failed during a hurricane, resulting in flood damage. In re Complaint of Ingram Barge Co.

Certification of Class Actions Class Action Court Decisions Uncategorized

ERISA Class Action Defense Cases-In re Syncor: Ninth Circuit Reverses Defense Judgment In Class Action Holding District Court Erred In Failing To First Consider Proposed Class Action Settlement Under Rule 23(e)

District Court Erred in Granting Summary Judgment in ERISA Class Action Because it should have Considering Proposed Class Action Settlement Prior to Ruling on Summary Judgment and Because Third Circuit’s Moench Presumption not Applicable in Ninth Circuit Triable Issues of Fact Existed Precluding Summary Judgment Ninth Circuit Holds

Plaintiffs, participants in employee stock ownership plan (ESOP), filed a class action against their employer, Syncor International, and two board of directors alleging breach of fiduciary duties under ERISA (Employee Retirement Income Security Act); the class action alleged that Syncor administered an Employee’s Saving and Stock Ownership retirement plan governed by ERISA (“the Plan”), and permitted employees to invest in Syncor stock even though they knew that Syncor’s Taiwanese subsidiary and other foreign offices systematically used bribes to increase sales and to grow Syncor’s business in violation of the Foreign Corrupt Practices Act (FCPA). In re Syncor ERISA Litig., 516 F.3d 1095, 2008 WL 427763, *1-*2 (9th Cir. 2008). Once news of the illegal payments became public Syncor’s stock price lost half of its value, decreasing the value of the Plan by at least $24 million and precipitating the filing of the class action lawsuit on behalf of Plan participants. Id., at *2. Plaintiffs’ lawyers sought and obtained certification of the litigation as a class action, id. Syncor Taiwan pleaded guilty to violating the FCPA, and a member of the board of directors surrendered $2.5 million worth of personal Syncor stock to reimburse the company for fines levied by governmental agencies. Id. Following the filing of a consolidated class action complaint, defense attorneys filed a motion for summary judgment; simultaneously, the parties participated in settlement discussions. Id. In December 2005, the district court took the summary judgment motions under submission, and in January 2006, without knowing that the district court had decided the summary judgment motion, the parties signed a proposed settlement of the class action. Id. The parties notified the court of the tentative settlement on January 10, 2006, but failed to provide the court with the term sheet evidencing the settlement; that same day, the district court entered an order granting summary judgment in favor of the defense. Id. The following day, the parties requested that the court not rule on the summary judgment motions because of the proposed settlement, but again failed to provide a term sheet, id., at *3. Nonetheless, on January 12, 2006, the district court entered judgment in favor of defendants on the class action complaint, and denied as moot the proposed class action settlement, id. The Ninth Circuit reversed.

The Ninth Circuit summarized its holding as follows: “We hold that, when parties (1) enter into a binding class action settlement agreement, which requires court approval pursuant to Rule 23(e) of the Federal Rules of Civil Procedure, and (2) provide the required notice of the settlement to the district court prior to the district court’s entry of the final judgments, the district court should hold a hearing and review the settlement agreement to determine if it is fair, reasonable, and adequate…. Failure to do so-even when the district court has already drafted a summary judgment order-is an abuse of discretion.” In re Syncor, at *1. The Circuit Court further held that the district court erred in granting summary judgment “genuine issues of material fact exist regarding whether the Defendants breached their fiduciary duty under ERISA,” id.

Class Action Court Decisions Employment Law Class Actions Uncategorized

Class Action Defense Cases—In re Transpacific: Judicial Panel On Multidistrict Litigation (MDL) Grants Plaintiff Motion 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 Class Action Plaintiff or by any Class Action Defendants, and Transfers Class Actions to Northern District of California Two class actions – one in the Central District of California and one in the Northern District of California – were filed against Air New Zealand and other airlines alleging antitrust violations; specifically, each class action alleged that “[the] airline defendants conspired to fix the price of passenger airfares for flights between the United States and transpacific destinations in violation of the Sherman Antitrust Act.

Class Action Court Decisions Multidistrict Litigation Uncategorized

Class Action Defense Cases-Anderson v. CNH: Eighth Circuit Dismisses As Moot Appeal From District Court Order Denying Class Action Certification

Class Action Settlement Reached after District Court Denied Motion for Class Action Treatment Precluded Settling Plaintiffs from Appealing Denial of Class Action Motion Eighth Circuit Holds Plaintiffs, retirees of Case Corporation, filed a putative class action against administrators of the company’s pension and retirement plans for “violat[ing] the terms of the retirees’ pension plan by failing to make certain payments the month after each retiree turned 62 years old. Anderson v.

Class Action Court Decisions Employment Law Class Actions Uncategorized

Attorney Fees Class Action Defense Cases-Harrington v. Payroll Entertainment: California State Court Holds Plaintiff Lawyers Who Filed Labor Law Class Action Deserved Only $500 In Fees Because Class Action Complaint Was Not Viable

Lawyers who Filed Putative Class Action Alleging State Labor Law Claims but Failed to Secure Class Action Certification were Entitled to Reasonable Attorney Fees as a Matter of Right under Settlement of Individual Claim Declaring Plaintiff “Prevailing Party” but Reasonable Fee Award for Filing a Frivolous Class Action Based on a $44 Overtime Claim Warranted only $500 in Attorney Fes California State Court Holds

Plaintiff, an off-duty police officer, filed a class action against Payroll Entertainment Services alleging violations of California’s labor laws; specifically, the class action alleged that Payroll would hire retired and off-duty police officers to provide “traffic and crowd control services,” and that Payroll underpaid him after he worked a single 14-hour day. Harrington v. Payroll Entertainment Servs., Inc., ___ Cal.App.4th ___, 72 Cal.Rptr.3d 922 (Cal.App. 2008) [Slip Opn., at 2]. Plaintiff alleged to have filed the class action complaint on behalf of all retired and off-duty police officers who had worked for Payroll Entertainment, _id._ In response to plaintiff’s motion to certify the litigation as a class action, defense attorneys acknowledged the error in calculating plaintiff’s pay, but explained that Payroll Entertainment “had based its wage calculations on a memorandum issued by the Los Angeles Police Protective League without realizing that the formula set out in the memo violated California’s overtime wage laws,” _id._ The defense argued further that class action treatment was unnecessary because it had hired only 16 officers for the event in question and that the amount at stake was only $714. _Id._ The trial court denied the class action certification motion; specifically, the trial court found that plaintiff had failed to establish numerosity, typicality or superiority to support class action treatment. _Id._, at 4. The litigation proceeded as to plaintiff’s individual claim, settling shortly before trial for $10,500. _Id._, at 2-3. Plaintiff’s lawyers sought attorney fees but the trial court denied the motion, _id._, at 3. Plaintiff appealed. The appellate court reversed but awarded plaintiff’s lawyers only $500.

As part of the settlement, in addition to its monetary payment, Payroll Entertainment agreed that plaintiff was a “prevailing party” for purposes of recovering attorney fees and that the trial court would determine the amount of fees that were reasonably incurred by plaintiff. Harrington, at 3. Plaintiff’s lawyers filed a motion requesting $46,000 in attorney fees; in opposition, defense attorneys argued that plaintiff should not be awarded any attorney fees. Id. The trial court’s rationale is set forth in detail at pages 3 through 6 of the appellate court’s slip opinion. In pertinent part, the trial court found that plaintiff had retained counsel and filed suit to recover $44, id., at 5. The Court of Appeal quoted the following language from the trial court’s order at page 5:

Class Action Court Decisions Employment Law Class Actions Uncategorized

Labor Law Class Action Defense Cases-McClain v. Lufkin: Fifth Circuit Issues Mixed Opinion On Class Action Appeal Following Judgment In Favor Of Plaintiff On Title VII/§ 1981 Discrimination Class Action Complaint

District Court Judgment on Discrimination Class Action Complaint Required Reversal and Remand as to Certain Issues Necessitating Remand of Class Action to District Court for Further Proceedings Fifth Circuit Holds

Plaintiffs filed a class action against their employer, Lufkin Industries, alleging violations of Title VII and 42 U.S.C. § 1981 based on the allegation that Lufkin’s “practice of delegating subjective decision-making authority to its managers with respect to initial assignments and promotions disparately affected them.” McClain v. Lufkin Industries, Inc., ___ F.3d ___ (5th Cir. February 29, 2008) [Slip Opn., at 2]. Among the many named plaintiffs in the class action complaint, only two had filed charges with the EEOC and received right-to-sue letters, _id._ The class action involved all four of Lufkin’s production divisions, and the company has approximately 1,500 hourly and salaried workers. _Id._ The district court granted plaintiffs’ request to certify the litigation as a class action with respect to the disparate-impact claims, but the court refused to give class action treatment to plaintiffs’ disparate-treatment claims. _Id._, at 3. Following a bench trial, at which “the court strictly limited each party to twenty hours for the presentation of its case,” the court found in favor of the plaintiffs and awarded $3.4 million in back pay, together with injunctive relief and attorney fees. _Id._ Both sides appealed: plaintiffs argued the court should have granted class action treatment to the disparate-treatment claims, and defense attorneys argued (1) plaintiffs failed to exhaust administrative remedies, (2) lacked standing to represent the class, and (3) the district court committed various errors in finding for plaintiffs and calculating damages. _Id._, at 4. The Fifth Circuit issued an opinion “unfortunately inconclusive of the litigation,” _id._, at 1.

The Fifth Circuit addressed first the defense claim that plaintiffs failed to exhaust their EEOC remedies, which the Circuit Court characterized as the “mainstay of proper enforcement of Title VII remedies.” McClain, at 4. The defense argued that the class action’s disparate-impact claims concerning its hiring and promotional practices, id., at 4-5. Relying on Pacheco v. Mineta, 448 F.3d 783 (5th Cir.), cert. denied, 127 S.Ct. 299 (2006), the Circuit Court concluded that the January 1995 letter from plaintiff McClain to the EEOC (relied on by the district court in finding that plaintiffs had exhausted their administrative remedies) complained only about demotion and was thus insufficient to support the hiring and promotion class action claims. See McClain, at 5-8. The Court concluded, however, that plaintiff Thomas’s EEOC charge satisfied the exhaustion requirement, id., at 8-9. However, the Fifth Circuit agreed with defense attorneys that neither McClain nor Thomas adequately complained about Lufkin’s “Foundry” division, and therefore vacated the judgment insofar as it affected the Foundry division, id., at 9. Indeed, the Court noted that “considerable doubt” existed as to whether either of these individuals even had standing to represent a class consisting of Foundry division workers. Id., at 9 n.2.

Class Action Court Decisions Employment Law Class Actions Uncategorized

FDCPA Class Action Defense Cases-Jacobson v. Healthcare Financial: Second Circuit Reverses Summary Judgment In Favor Of Defense In FDCPA Class Action And Vacates Award Of Attorney Fees And Costs Against Class Action Plaintiff

As Matter of First Impression, FDCPA Permits Consumers to Notify Debt Collectors of Dispute Within 30 Days of Receiving Debt Collectors’ Letter Necessitating Reversal of Summary Judgment in Favor of Defense in FDCPA Class Action Second Circuit Holds

Plaintiff filed a putative nationwide class action complaint against Healthcare Financial Services (HFS), a “debt collector” within the meaning of the federal Fair Debt Collection Practices Act (FDCPA), alleging that a debt collection letter he received from HFS violated the FDCPA by failing to advise debtors of their right to dispute the validity of the debt. Jacobson v. Healthcare Fin. Servs., Inc., 516 F.3d 85, 2008 WL 383060, *1 (2d Cir. 2008). The class action complaint did not allege that plaintiff suffered any actual loss, limiting recover to statutory damages and attorney fees. Id. Defense attorneys moved to dismiss the class action, or in alternative sought summary judgment, on the ground that the debt collection letter did not violate the FDCPA; the defense also sought attorney fees from plaintiff, arguing that he had filed the class action “in bad faith and for the purpose of harassment,” see 15 U.S.C. § 1692k(a)(3). Id. The district court granted summary judgment in favor of HFS and awarded HFS attorney fees and costs, id. The Second Circuit affirmed in part and reversed in part.

The FDCPA provision at issue provides that a debtor has the right to dispute a debt and seek verification of the validity of the debt by notifying the debt collector of the right to dispute the debt. Jacobson, at *2. The Second Circuit recognized that it must view the issue from the perspective of the “least sophisticated consumer,” see id., at *3 (citing Clomon v. Jackson, 988 F.2d 1314, 1318 (2d Cir. 1993)), but observed also that “the objective test we apply [also] protects debt collectors from unreasonable constructions of their communications,” that the Second Circuit has “carefully preserved the concept of reasonableness,” and that “the FDCPA does not aid plaintiffs whose claims are based on ‘bizarre or idiosyncratic interpretations of collection notices.’” Id. (citations omitted). So viewed, the Circuit Court held that the letter sent by HFS clearly advised debtors of their right to dispute the validity of the alleged debt.

Class Action Court Decisions FDCPA Class Actions Uncategorized