Honda Class Action Defense Cases-Vaughn v. American Honda: Fifth Circuit Rejects Arguments By Parties To Class Action And Reduces Rule 7 Bond Required To Appeal Class Action Settlement From $150,000 To $1,000

District Court Abused Discretion by Requiring Any Objector to Class Action Settlement Post $150,000 Bond in Order to Appeal Approval of Class Action Settlement Fifth Circuit Holds

Plaintiffs filed a class action against American Honda Motor alleging that the odometers in certain vehicles overstated the actual mileage. Vaughn v. American Honda Motor Co., Inc., 507 F.3d 295, 297 (5th Cir. 2007). Eventually the parties agreed upon a proposed settlement of the class action, including certification of a settlement class: “The proposed settlement provides some class members various forms of relief, including warranty extensions, lease extensions, lease refunds, and repair reimbursements.” Id. The class action settlement was estimated to cost Honda $115 million, but “[the] value on the open market would be approximately $244 million.” Id. Among the terms of the class action settlement was the requirement that Honda pay $10 million in lease refunds, but did not provide any compensation to class members who had sold or traded their vehicle, id., at 297-98. Various class members objected to the proposed settlement, including one individual (Hawthorn) who had sold his vehicle; the district court overruled the objection and required any objector post a $150,000 bond as part of any appeal. Id., at 297. The objector asked the Circuit Court to reduce the amount of the bond to $1,000.00, and the Fifth Circuit agreed.

In opposing the class action settlement, “Hawthorn specifically objected that the settlement provides no compensation to him or other class members who sold or traded their vehicles. He contends that the settlement should include amounts for ‘diminution in value,’ or value lost on a sale or trade-in due to inflated odometer readings.” Vaughn, at 298. The federal court disagreed and overruled the objection, id. Apparently reflecting the frustration experienced by many class action plaintiff lawyers to the role played by professional objectors, class counsel asked the district court to require an appeal bond under FRAP 7 be posted by any objector who filed a notice of appeal. Id. Based on the “detrimental impact of an appeal as to the entire class,” and the court’s “opinion” that any objector’s appeal will carry with it the “significant possibility” that any appeal will be subject to summary denial and an award of attorney fees and costs under FRAP 38, the district court granted the motion and set the appeal bond at $150,000. Id.

Class Action Court Decisions Uncategorized

Class Action Defense Cases-In re Korean Air Lines: Judicial Panel On Multidistrict Litigation (MDL) Grants Unopposed Plaintiff Motion To Centralize Class Action Litigation And Selects Central District of California As Transferee Court

Judicial Panel Grants Plaintiffs’ Request, Unopposed by Defense, for Pretrial Coordination of 25 Antitrust Class Action Lawsuits Pursuant to 28 U.S.C. § 1407, and Transfers Class Actions to Central District of California Twenty-five class action lawsuits were filed in six (6) federal district courts (10 in the Northern District and 2 in the Central District of California, 10 in the Western District of Washington, and 1 each in Massachusetts, Nevada and the Eastern District of New York) against Korean Air Lines and Asiana Airlines alleging that they “conspired to fix prices of passenger airfares between the United States and Korea in violation of the Sherman Antitrust Act.

Class Action Court Decisions Multidistrict Litigation Uncategorized

Federal Securities Law Class Action Defense Cases-In re Sterling Financial: Judicial Panel On Multidistrict Litigation (MDL) Grants Plaintiff Motion To Centralize Class Action Litigation In Eastern District of Pennsylvania

Judicial Panel Grants Plaintiffs’ Request for Pretrial Coordination of Class Action Lawsuits Pursuant to 28 U.S.C. § 1407 and Rejects Defense Attorney Request to Transfer Class Actions to Southern District of New York Seven class action lawsuits were filed against various defendants alleging violations of federal securities laws based on allegations that Sterling Financial “issued materially false and misleading statements relating to its wholly-owned subsidiary, EFI, which artificially inflated Sterling’s stock price.

Class Action Court Decisions Multidistrict Litigation PSLRA/SLUSA Class Actions Uncategorized

TILA Class Action Defense Cases-In re Long Beach Mortgage: Judicial Panel On Multidistrict Litigation (MDL) Grants Plaintiff Motion To Centralize Class Action Litigation In Northern District of Illinois

Judicial Panel Grants Plaintiffs’ Request, Unopposed by Defense, for Pretrial Coordination of Class Action Lawsuits Pursuant to 28 U.S.C. § 1407 and Concurs with Request to Transfer Class Actions Alleging Violations of Federal Truth in Lending Act (TILA) to Northern District of Illinois Three class action lawsuits were filed against Long Beach Mortgage and other defendants alleging violations of the federal Truth in lending Act (TILA) or state law equivalent statutes.

Class Action Court Decisions Multidistrict Litigation RESPA/TILA Class Actions Uncategorized

State Farm Class Action Defense Cases-Alleman v. State Farm: Pennsylvania Federal Court Refuses To Certify Breach Of Contract Class Action Challenging Calculation Of Insurance Premiums And Grants Defense Summary Judgment Motion On Contract Claim

Plaintiff is not an Adequate Class Representative if She does not have a Viable Claim Against Defendant thus Compelling Denial of Class Action Certification Motion in Breach of Contract Class Action Against Life Insurer Pennsylvania Federal Court Holds

Plaintiff filed a putative class action against life insurance company for breach of contract, constructive fraud and unjust enrichment alleging that State Farm the premiums it charged for the insurance policies covering the lives of her two minor children “was based on an aggregate of mortality rates for both smokers and non-smokers, rather than a premium based solely on the mortality rate of non-smokers.” Alleman v. State Farm Life Ins. Co., 508 F.Supp.2d 452, 453 (W.D.Pa. 2007). Plaintiff moved for certification of a class action on the breach of contract claim only; defense attorneys opposed class action treatment and moved for summary judgment on the grounds that plaintiff did not have a viable breach of contract claim. Id. The district court agreed with the defense, denied the class action certification motion, and granted summary judgment in favor of the defense.

The federal court began its analysis by explaining the need to consider the class action certification motion and summary judgment motion as one – a point that often puzzles inexperienced state and federal courts that are concerned with ruling on the “merits” prior to class certification. As the district court explained at page 453, “Because the issue of whether plaintiff’s claims are typical of the class and whether plaintiff is an adequate representative as required by [Rule 23] and defendant’s summary judgment motion turn on whether plaintiff has a viable breach of contract claim we will address the two issues as one.” In other words, a court must determine as a threshold matter whether a particular putative class representative may assert a valid claim against the defendant in his or her own name; if not, then class action treatment is inappropriate because there is no adequate class representative to pursue the claim. As the Third Circuit explained, “Depending on the circumstances, class certification questions are sometimes enmeshed in the factual and legal issues comprising the plaintiff’s cause of action and courts may delve beyond the pleadings to determine whether the requirements for class certification are satisfied.” Beck v. Maximus Inc., 457 F.3d 291, 297 (3d Cir. 2006) (citations and internal quotations omitted). Here, for example, because the plaintiff did not herself have a viable breach of contract claim, she was not an adequate class representative (compelling denial of the class action certification motion) and supporting the defense motion for summary judgment. Id., at 453-54.

Certification of Class Actions Class Action Court Decisions Uncategorized

ICA Class Action Defense Cases-Alexander v. Allianz: Connecticut Federal Court Grants Defense Motion To Dismiss Class Action Complaint Alleging Violations Of Investment Company Act (ICA)

Class Action Claims Alleging Violations of Sections 34(b), 36(a) and 48(a) of Investment Company Act (ICA) Dismissed for Lack of Private Right of Action and Class Action’s ICA Section 36(b) Claim Fails to Allege Excessive Fees Connecticut Federal Court Holds Shareholders-plaintiffs filed a putative class action against various mutual funds, trustees and investment advisors in part for violations of the Investment Company Act (ICA) by alleging charging “excessive” fees within the meaning of the ICA.

Class Action Court Decisions PSLRA/SLUSA Class Actions Uncategorized

Ethics And Class Action Defense Issues-Rico v. Mitsubishi: California Supreme Court Affirms Disqualification Of Plaintiffs’ Counsel And Experts In Products Liability Case (Not Class Action) For Unethical Conduct In Reviewing Defense Counsel’s Work Product

An Attorney “may not Read a Document any more Closely than is Necessary to Ascertain that it is Privileged” and Once it is “Apparent” that Document is Privileged then Attorney Must Immediately Notify Opposing Counsel; Plaintiffs’ Counsel Extensive Review and Distribution of Defense Counsel’s Work Product Document Compelled Disqualification of Plaintiffs’ Counsel and Experts in Products Liability (not Class Action) Case California Supreme Court Holds

Plaintiffs filed a products liability lawsuit against Mitsubishi Motors and others because their Mitsubishi Montero “rolled over while being driven on a freeway.” Rico v. Mitsubishi Motors Corp., ___ Cal.4th ___ (Cal. December 13, 2007) [Slip Opn., at 2]. Though the case was not filed as a class action, the ethical issues raised are important not only to class action defense counsel, but to class action plaintiff lawyers as well. As part of his preparations, defense counsel (Yukevich) and Mitsubishi’s case manager (Rowley) met with and two defense experts “to discuss their litigation strategy and vulnerabilities.” _Id._ Rowley functioned as a “paralegal” during this six-hour meeting, taking notes on Yukevich’s computer and never seeing a print copy of those notes. “Yukevich printed only one copy of the notes, which he later edited and annotated,” and the trial court found that “the sole purpose of the document was to help Yukevich defend the case.” _Id._ Yukevich printed a copy of this document, which was not labeled as “confidential” or “work product,” and somehow plaintiffs’ counsel obtained a copy (_see_ Note). When defense counsel learned this fact he demanded the document and all duplicates be returned and immediately moved to disqualify “plaintiffs’ legal team and their experts.” _Id._, at 4-5. The trial court granted the motion, and the Court of Appeal affirmed. The California Supreme Court concurred that the invasion of defense counsel’ work product compelled disqualification of plaintiffs’ counsel and experts.

After summarizing well-settled law governing attorney work product, see Rico, at 6-7, the Supreme Court rejected plaintiffs’ argument that the document “is not work product because it reflects the statements of declared experts,” id., at 7. The Supreme Court explained that the document was not a “transcript” of the six-hour meeting; rather, “[i]t contains Rowley’s summaries of points from the strategy session, made at Yukevich’s direction” that Yukevich edited “in order to add his own thoughts and comments, further inextricably intertwining his personal impressions with the summary.” Id., at 7. As the Court concluded at page 8, “[T]he document does not qualify as an expert’s report, writing, declaration, or testimony. The notes reflect the paralegal’s summary along with counsel’s thoughts and impressions about the case.” (Italics in original.) Thus, the Supreme Court held, “The document was absolutely protected work product because it contained the ideas of Yukevich and his legal team about the case.” Id., at 8.

Class Action Court Decisions Uncategorized

Wal-Mart Class Action Defense Case-Dukes v. Wal-Mart: Ninth Circuit Again Upholds Class Action Certification Order In Nationwide Sex Discrimination Lawsuit Against Wal-Mart Finding Class Action With 1.5 Million Members Was Nonetheless Manageable

Ninth Circuit Reaffirms that District Court did not Abuse its “Broad Discretion” in Certifying Nationwide Sex Discrimination Class Action Against Wal-Mart Creating “the Largest Certified Class in History”

In June 2001, plaintiffs filed a putative class action against Wal-Mart in the San Francisco federal court alleging sex discrimination in the payment of wages and in promotions. In April 2003, plaintiffs moved to certify a nationwide class action on behalf of 1.5 million former and present female employees “employed in a range of Wal-Mart positions – from part-time, entry-level, hourly employees to salaried managers.” Dukes v. Wal-Mart, Inc., 474 F.3d 1214 (9th Cir. 2007). Defense attorneys argued that the requirements of Rule 23 had not been satisfied, stressing in particular several problems inherent in litigating a class of record size. More than a year later, in an 84-page decision handed down in June 2004, the district court rejected all but one of the defense arguments and, save for that one point, certified the class action as requested by plaintiffs. Both sides appealed and on February 6, 2007 the Ninth Circuit affirmed the district court order in all respects; our article discussing that opinion may be found here .Defense attorneys asked the Panel to reconsider its decision, and on December 11, 2007 the Ninth Circuit again affirmed class action treatment of the claims against Wal-Mart. Dukes v. Wal-Mart, Inc., ___ F.3d ___ (9th Cir. December 11, 2007) [Slip Opn., at 16207 et seq.] The Panel denied rehearing, withdrew its February 6, 2007 opinion, and filed a new Opinion and Dissent affirming the class action order. _Id._, at 16212.

Plaintiffs’ motion sought certification of a nationwide class action on behalf of “All women employed at any Wal-Mart domestic retail store at any time since December 26, 1998, who have been or may be subjected to Wal-Mart’s challenged pay and management track promotions policies and practices.” Dukes, at 16213. Wal-Mart stressed the “‘historic’ nature of Plaintiffs’ motion, inasmuch as it concerns a class of approximately 1.5 million women who work or worked in one or more of Wal-Mart’s 3,400 stores in 41 regions at any time since 1998.” Id., at 16214. The district court recognized Wal-Mart’s concerns but concluded that “while the class size was large, the issues were not unusual.” Id. The Ninth Circuit summarized the district court’s order at page 16214 as follows:

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

FEMA Class Action Defense Cases-In re FEMA Trailer Formaldehyde: Judicial Panel On Multidistrict Litigation (MDL) Grants Plaintiff Motion To Centralize Class Action Litigation In Eastern District of Louisiana

Judicial Panel Grants Plaintiffs’ Request for Pretrial Coordination of Class Action Lawsuits Pursuant to 28 U.S.C. § 1407 and Transfers Class Actions to Eastern District of Louisiana Four class action lawsuits were filed against various defendants alleging “that trailers – provided by the Federal Emergency Management Agency in the wake of Hurricanes Rita and Katrina – contain materials which emit dangerous, excessive levels of formaldehyde.” In re FEMA Trailer Formaldehyde Prod.

Class Action Court Decisions Multidistrict Litigation Uncategorized

CAFA Class Action Defense Cases-May’s v. Total Containment: Alabama Federal Court Remands Class Action To State Court Holding Amendment Of Complaint After CAFA’s (Class Action Fairness Act) Effective Date Did Not Permit Removal

Amendment of Class Action Complaint After Effective Date of Class Action Fairness Act of 2005 (CAFA) did not Trigger Removal Period Because Under State Law the Amendment Related Back to Original Complaint Alabama Federal Court Holds Plaintiff, operator of three gasoline distribution facilities, filed a putative class action against Total Containment (TCI) arising out of the manufacture, sale and installation of allegedly defective gas station piping systems. May’s Distributing Co. Inc.

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