Class Action Defense Cases-Capitol People v. Dep’t of Developmental Services: California Appellate Court Reverses Court Order Denying Class Action Certification And Affirmatively Holds Class Action Treatment Warranted For Lanterman Act Claims

In Denying Class Action Certification Motion, Trial Court Erred in Examining Commonality from Perspective of Individual Class Member Claims rather than Overarching Conduct of Defendants Applicable to Entire Class California Court Holds

A wide array of plaintiffs filed a putative class action for injunctive and declaratory relief against various State of California defendants for failure to provide community living arrangements under California’s Lanterman Developmental Disabilities Services Act and alleging a “systemic failure of the state agencies and regional centers to provide proper oversight and enforce constitutional, statutory and regulatory mandates to place individuals in less restrictive community settings when appropriate.” Capitol People First v. Dep’t of Developmental Services, 155 Cal.App.4th 676, 66 Cal.Rptr.3d 300, 304-05 (Cal.App. 2007). Plaintiffs sought class action certification; defense attorneys opposed class action treatment on the ground that commonality did not exist, that plaintiffs were not adequate class representatives, and that a class action was not the superior means of resolving the issues in dispute. Id., at 305. The trial court agreed with defense counsel and denied class action certification; the Court of Appeal reversed and affirmatively instructed the trial court to grant plaintiffs’ motion for class action treatment.

California’s Lanterman Act, enacted in 1977, “establishes a comprehensive scheme for providing services to people with developmental disabilities” and provides that “[t]o the maximum extent feasible, services and supports should be available throughout the state to prevent the dislocation of persons with developmental disabilities from their home communities.” Capitol People, at 305 (citation omitted). The theme underlying the class action was that individuals were being institutionalized in violation of the Lanterman Act, and sought to enforce the right of developmentally disabled individuals “to live, with appropriate supports, in [their local] neighborhoods.” Id., at 308. The class action complaint challenged the State’s pattern and practice of “under-funding” of community services so as to require institutionalization, id., at 308-09. Importantly, ten institutionalized individuals and two organizations sought leave to intervene on the ground that the named plaintiffs’ interests were “hostile” to their own, and that “the relief they sought would impair the rights of those persons whose needs are best met in a developmental center.” Id., at 310. The trial court granted limited intervention, id.

In response to plaintiffs’ motion for class action certification, the trial court held that (1) commonality did not exist, (2) plaintiffs were not adequate class representatives, and (3) class action treatment was not the superior means of redress; rather, the fair hearing procedure provided under the Lanterman Act adequately redresses individual grievances. Capitol People, at 310. With respect to commonality, the appellate court held that the trial court failed to appreciate the difference between the “system relief” sought by the class action complaint and the “individual solutions to individual problems” that were at the heart of the interveners’ objections. Id., at 311-12. The trial court focused in “discrete wrongs,” and concluded that “common issues of fact would not predominate because the deficiencies, variables and pertinent lines of inquiry would be individualized.” Id., at 312. The Court of Appeal recognized that legal authority existed in support of the trial court’s holding, see id., at 312-13 and J.B. ex rel. Hart v. Valdez, 186 F.3d 1280 (10th Cir. 1999), but held that under California law “courts can take an aggregate approach to plaintiffs’ claims,” id., at 313. Thus viewed, the question was not whether differences existed among the various claims of putative class members but rather whether the defendants utilized “common policies and practices generally applicable to all putative class members.” Id. The Court of Appeal held that commonality did exist, explaining at page 315: “The overarching theme is that there is a pattern and practice of failure to meet constitutional, statutory and regulatory mandates to provide services and place class members in less restrictive settings, and the systemic effect of this failure is to impinge plaintiffs’ rights under state and federal law.” Such “systemic relief” could not be sought or obtained on a case-by-case basis. Id.

Certification of Class Actions Class Action Court Decisions Uncategorized

Class Action Defense Cases-Azizian v. Federated: Ninth Circuit Holds Attorney Fees Under Clayton Act Not Awardable Against Objector To Class Action Settlement Of Antitrust Class Action

As Matter of First Impression, Rule 7 Bond Covering “Costs on Appeal” Includes Attorney Fees Awardable Under Fee-Shifting Statute but not Attorney Fees Awardable Under Rule 38 for Frivolous Appeals Ninth Circuit Holds

Plaintiffs filed a class action lawsuit against Federated Department Stores alleging federal antitrust violations in connection with the sale of cosmetics. Azizian v. Federated Dep’t Stores, Inc., 499 F. 3d 950, 954 (9th Cir. 2007). Almost two years later, the district court approved a class action settlement of all class claims on behalf of a nationwide class, id. One member of the class, Kamela Wilkson, objected to the class action settlement and appealed the order approving the settlement; in response, class action plaintiffs requested an appeal bond under FRAP Rule 7 in the amount of $12.8 million, including appellate attorney fees. Id. The district court ordered the objector to post a $42,000 bond – $2,000 for costs and $40,000 for attorney fees, id. While noting a split in authority, the district court required the objector to post bond for attorney fees because (1) the Clayton Act’s fee-shifting provision defines attorney’s fees as recoverable costs, and (2) “the Court of Appeals [was] likely to find that the instant appeal[ ] [was] frivolous.” Id. The objector posted only the $2,000 to cover costs on appeal; plaintiff’s asked the Ninth Circuit’s motions panel to dismiss the appeal for failure to post the requisite bond, but the motion was denied without prejudice. Id. As permitted by the motions panel, plaintiffs renewed this motion in conjunction with their brief on the merits of the class action settlement.

The Ninth Circuit noted that the appeal from the class action settlement presented two issues: (1) as a matter of first impression, “whether, or under what circumstances, appellate attorney’s fees are ‘costs on appeal’ that a district court may require an appellant to secure in a bond” under Rule 7, Azizian, at 953; and (2) whether the appeal should be dismissed for failure to post bond as ordered by the district court, id., at 954. With respect to the first issue, after a lengthy examination of sister circuit cases, see id., at 955-958, the Circuit Court held that “costs on appeal” under Rule 7 “includes all expenses defined as ‘costs’ by an applicable fee-shifting statute, including attorney’s fees,” id., at 958. But while the Ninth Circuit held that attorney fees recoverable under Section 4 of the Clayton Act fell within this test, it further held that attorney fees could not be recovered from an objector to a class action settlement because “unlike some other fee-shifting provisions, Section 4 is asymmetrical.” Id., at 959. Put simply, “Ordering one class member to pay other class members’ appellate attorney’s fees because of a disagreement about the propriety of settlement would not serve the purpose of Section 4 to penalize and deter those who have violated the antitrust laws.” Id., at 960.

Class Action Court Decisions Uncategorized

Class Action Defense Cases-Howard v. Gutierrez: District Of Columbia Federal Court Denies Motion To Reconsider Ruling Striking Class Action Allegations Holding Delay In Seeking Class Action Certification Was Not Excusable

Local Rule Requiring Class Action Certification Motion be Filed Within 90 days of Class Action Complaint runs from Filing of First Class Action Complaint not from any Subsequent Amended Class Action Complaint and District of Columbia Federal Court Holds Contrary Interpretation to be “Untenable” and “Unreasonable”

Plaintiffs filed a putative class action against the Department of Commerce (DOC) and its Secretary for violations of Title VII alleging that the performance-review system resulted in systemic racial discrimination. Defense attorneys moved to dismiss the individual claims and to strike the class action allegations. The district court granted the motion in part, striking the class action claims. See Howard v. Gutierrez, 474 F.Supp.2d 41 (D.D.C. 2007). Plaintiffs sought reconsideration and certification of an interlocutory appeal. Howard v. Gutierrez, 503 F.Supp.2d 392, 393-94 (D.D.C. 2007). The district court denied the motion for reconsideration and refused to certify an interlocutory appeal.

With respect to the motion for reconsideration, the district court noted that the Federal Rules of Civil Procedure do not expressly authorize such motions and that they are “typically treat[ed]…as motions to alter or amend a judgment” under Rule 59(e). Howard, at 394. Reconsideration motions are addressed to the sound discretion of the court, are not “lightly” granted, and are not to be used to present arguments “that could have been advanced earlier.” Id. (citations omitted). With that background, the district court first rejected plaintiffs’ attempt to “rehash” arguments made previously with respect to their failure to file a motion for class action certification within 90 days of the filing of the class action complaint, and held that any new arguments in support of this old theme could have been raised earlier. Id. The district court concluded at page 394, “There has been no intervening change in controlling law, nor have plaintiffs advanced new evidence not previously available to them. Finding nothing in plaintiffs’ motion that warrants revisiting its prior holding, the Court now reaffirms that the ninety-day period in Local Rule 23.1(b) applies from the date of the filing of the first complaint to assert class claims.”

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

FACTA Class Action Defense Cases-In re Boscov’s Department Store: Judicial Panel On Multidistrict Litigation (MDL) Grants Defense Motion To Centralize Class Action Litigation But Selects District of New Jersey As Transferee Court

Judicial Panel Grants Defense Request, Over Objection, for Pretrial Coordination of Class Action Lawsuits Pursuant to 28 U.S.C. § 1407 but Agrees With Plaintiff’s Request to Transfer Class Actions to District of New Jersey Three class action lawsuits were filed against Boscov’s Department Store alleging violation of the federal Fair and Accurate Credit Transactions Act (FACTA). In re Boscov’s Dep’t Store, LLC, Fair & Accurate Credit Transactions Act (FACTA) Litig., ___ F.

Class Action Court Decisions FCRA Class Actions Multidistrict Litigation Uncategorized

Class Action Defense Cases-Pisciotta v. Old National Bancorp: Seventh Circuit Upholds District Court Dismissal Of Class Action Seeking Monitoring Of Credit Reports For Failure To Seek Damages Compensable Under Indiana Law

District Court Properly Granted Defense Motion for Judgment in Class Action Alleging Theft of Personal Information and Seeking Damages for Cost of Monitoring Credit Reports Because Class Action Complaint Failed to Allege Compensable Damages under Indiana Law Seventh Circuit Holds

Plaintiffs filed a putative class action against Old National Bancorp, which operates a website that permits people to complete applications online for loans and other banking services, alleging that the Bank had obtained personal information from consumers through its website but “failed to secure it adequately” thus permitting a hacker “to obtain access to the confidential information of tens of thousands of [Bank] site users.” Pisciotta v. Old National Bancorp, 499 F.3d 629, 631 (7th Cir. 2007). According to the class action allegations, the online application forms “differ depending on the service requested, but some forms require the customer or potential customer’s name, address, social security number, driver’s license number, date of birth, mother’s maiden name and credit card or other financial account numbers.” Id. The class action complaint sought relief in the form of “compensation for past and future credit monitoring services that they have obtained in response to the compromise of their personal data,” id. Notably, the class action did not allege that any class member had suffered “direct financial loss…as a result of the breach” or that any putative class member had suffered identity theft as a result of the breach, id., at 632. Defense attorneys attacked the class action with a motion for judgment on the pleadings, arguing that under Indiana law plaintiffs had failed to allege any cognizable injury, id. The district court agreed with the defense and dismissed the class action, id., at 631. The Seventh Circuit affirmed.

The class action complaint alleged that plaintiffs had entered personal information on the Bank’s website, and that in 2005 NCR, a website host, informed the Bank of a security breach that, in the words of the Seventh Circuit, “was sophisticated, intentional and malicious.” Pisciotta, at 631-32. Nonetheless, in granting the defense motion for judgment on the class action complaint, the district court held that plaintiffs failed to allege that the security breach “caused them cognizable injury” because “under Indiana law, damages must be more than speculative” so “plaintiffs’ allegations that they had suffered ‘substantial potential economic damages’ did not state a claim.” Id., at 632 (italics added). The Circuit Court affirmed.

Class Action Court Decisions Uncategorized

Precertification Discovery Class Action Defense Cases-Putnam v. Eli Lilly: Prior To Certification Of Class Action California Federal Court Compels Defense To Produce Names And Addresses Of Absent Class Members In Labor Law Class Action Case

Labor Law Class Action Plaintiff’s need for Contact Information of Potential Class Members to Discover Evidence in Support of Class Action Certification Motion Outweighed Privacy Rights of Absent Class Members thus Warranting an Order Compelling Disclosure of such Information California Federal Court Holds Plaintiff, a pharmaceutical representative, filed a class action complaint against employer Eli Lilly alleging misclassification and failure to pay overtime, and failure to provide meal breaks, in violation of California’s state labor laws.

Class Action Court Decisions Employment Law Class Actions Uncategorized

Class Action Defense Cases-Hall v. Sprint: Illinois State Court Upholds Class Action Treatment Of Class Action Challenging Early Termination Fees Charged Cellular Phone Customers

Class Action Certification of 48-State Class Proper because Sprint-Drafted Choice-of-Law Provision Selected Kansas Law to be Applied to Class Action Claims Illinois State Court Holds

Plaintiff filed a putative class action in Illinois state court against her wireless communications provider, Sprint, alleging various state law claims for relief each premised on the theory that early termination fees are unlawful penalties. Hall v. Sprint Spectrum L.P., 876 N.E.2d 1036 [Slip Opn., at 1-2 (Ill.App. 2007). The class action complaint alleged in part violations of Illinois’s Consumer Fraud and Deceptive Business Practices Act and sought to prosecute a state-wide class action under the statute, but alleged further violations of other state consumer protection statutes and sought to prosecute a nation-wide class action as to those claims. Id., at 2. Defense attorneys opposed plaintiff’s motion for class action certification, but the trial court granted the motion. Id., at 1. The defense appealed, and the Illinois appellate court affirmed the order granting the lawsuit class action treatment.

The class action complaint alleged that plaintiff had entered into a one-year contract with Sprint for two separate lines and agreed to pay a $150 early termination fee if she canceled service within that year: Within the one-year period, Sprint canceled plaintiff’s service because of nonpayment but refused her request to cancel her contract unless she paid the amounts owed, including the early termination fee. Hall, at 1-2. Plaintiff paid the entire amount demanded by Sprint on one of her lines, including the $150 early termination fee, but she could not afford to pay the termination fee on the second line and “Sprint refused to cancel the account and stop the accrual of charges unless [she] paid the early termination fee for the second cell phone number.” Id., at 2. This amount was never paid, id. Instead, plaintiff filed her class action lawsuit challenging the early termination fees as “unlawful penalties.” Id. Ultimately, the trial court granted plaintiff’s request for class action certification of a 48-state class action, id.

Certification of Class Actions Class Action Court Decisions Uncategorized

FLSA Class Action Defense Cases—In re Wayne Farms: Judicial Panel On Multidistrict Litigation (MDL) Grants Defense Motion To Centralize Class Action Litigation In Southern District of Mississippi

Unopposed Defense Request for Pretrial Coordination of Class Action Lawsuits Alleging Violations of Fair Labor Standards Act (FLSA) Pursuant to 28 U.S.C. § 1407 Granted by Judicial Panel A dozen class action lawsuits were filed against Wayne Farms LLC alleging violations of the federal Fair Labor Standards Act (FLSA); specifically, the various class action complaints claimed that defendant failed to pay employees compensation due under the FLSA. In re Wayne Farms LLC Fair Labor Standards Act Litig.

Class Action Court Decisions Employment Law Class Actions Multidistrict Litigation Uncategorized

Class Action Defense Cases-Borochoff v. Glaxosmithkline: New York Federal Court Refuses To Appoint German Institutional Investor Group As Lead Plaintiff and Counsel In Class Action Due To Uncertainty In German Law

Uncertainty as to Validity of Foreign Judgment under German Procedural Law Raises Serious Concerns of Party’s Ability to Serve as Lead Plaintiff in Securities Fraud Class Action New York Federal Court Holds Plaintiffs filed a securities fraud class action against Glaxosmithkline based on statements made about diabetes drug Avandia that failed to disclose the increased risk of heart attack. Borochoff v. Glaxosmithkline PLC, ___ F.Supp.2d ___, 2007 WL 2907812, *1 (S.

Class Action Court Decisions Uncategorized

Class Action Defense Cases-Employers-Teamsters v. Anchor Capital: Ninth Circuit Dismisses Appeal By Non-Party That Sought Lead Plaintiff Status In Class Action Holding It Lacked Standing To Appeal

Party that Sought to Serve as Lead Plaintiff in Securities Class Action but was not Selected and did not File its own Lawsuit or Motion to Intervene Lacked Standing to Appeal District Court Order Denying it Lead Plaintiff Status or Granting Motion to Dismiss Uncertified Class Action Complaints with Prejudice Ninth Circuit Holds

In 2003, plaintiff Anchor Capital filed four putative class action lawsuits against Watson Pharmaceuticals alleging violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934; the district court consolidated the class actions and granted the motion of Anchor Capital to be appointed lead plaintiff in accordance with the PSLRA (Private Securities Litigation Reform Act), which governed the class action litigation. Employers-Teamsters Local Nos. 175 & 505 Pension Trust Fund v. Anchor Capital Advisors, 498 F.3d 920, 922 (9th Cir. 2007). Employers-Teamsters Local Nos. 175 & 505 Pension Trust Fund (“Appellants”) did not move to intervene in the class action, and did not file its own individual or class action complaint, id. Appellants did file a motion to serve as lead plaintiff, but the district court selected Anchor Capital instead. But after Anchor Capital moved and obtained court permission to dismiss the class action complaints with prejudice, Appellants filed an appeal to challenge that dismissal and contended that under the PSLRA it was the proper lead plaintiff to control the class action. Id. The Ninth Circuit dismissed the appeal on the ground that Appellant lacked standing.

Anchor Capital filed the securities fraud class action because its investors had lost $3.2 million; the district court granted its motion to serve as lead plaintiff because it had “the largest financial stake in the outcome of the litigation.” Anchor Capital, at 922. Defense attorneys moved to dismiss the class action against Watson Pharmaceuticals on the ground that it failed to plead fraud with the specificity required under the PSLRA; the district court granted the motion. Id. In the face of a district court order granting leave to amend but expressing considerable doubt that an amended class action complaint would survive a Rule 12(b)(6) motion, Anchor Capital told the court that it would not file an amended complaint and asked the court to dismiss with prejudice the uncertified class actions. Id., at 923. The district court granted the motion, id. “Appellants now challenge the lead plaintiff ruling.” Id.

Class Action Court Decisions PSLRA/SLUSA Class Actions Uncategorized