FDCPA Class Action Defense Cases-Guevarra v. Progressive Financial: California Federal Court Holds Congress Must Address “Ethically Questionable” Conduct of Plaintiff’s Counsel In Multiplying Class Action Litigation

Class Action Plaintiff Lawyer’s Collusion with Plaintiff’s Counsel in Separate Fair Debt Collection Practices Act (FDCPA) Class Action Against Same Defendant is not Condoned but Remedy lies with Congress not with Disciplinary Bodies California Federal Court Holds

Plaintiff filed a putative class action against a debt collection agency and one of its employees alleging that letters sent to debtors violated the federal Fair Debt Collection Practices Act (FDCPA) and California’s state law equivalent, the Rosenthal Fair Debt Collection Practices Act (Rosenthal Act). Guevarra v. Progressive Fin. Servs., Inc., 497 F.Supp.2d 1090, 1090-91 (N.D. Cal. 2007). The class action complaint originally sought “class-wide relief on behalf of all debtors who received the letter at issue here”; however, plaintiff’s counsel subsequently amended the class action allegations to seek relief solely on behalf of debtors of a single creditor. IKEA. Id., at 1091. Plaintiff’s counsel then asked the district court to certify the litigation as a class action, and admitted at oral argument that counsel was “coordinating with plaintiff’s counsel in a separate [class action] pending in the Central District of California concerning the same letter as the one at issue here.” Id. As the district court explained at page 1091, “Apparently, plaintiff’s counsel agreed with counsel in the [other class action] to divide up the class between the IDEA and non-IKEA creditors.” The district court refused to certify the litigation as a class action and issued an Order to Show Cause why plaintiff’s counsel should not be referred to the State Bar for disciplinary action. Id.

The district court denied the class certification motion “citing plaintiff’s arbitrary distinction between IKEA and non-IKEA creditors and concluding that plaintiff’s proposed definition is not ‘superior’ to other means available under FRCP 23(b)(3).” Guevarra, at 1091. The federal court explained at page 1091, “Because plaintiff’s counsel appeared to have divided up the class in order to maximize attorney fees without significant benefit to their clients, the court ordered plaintiff’s counsel to show cause why the court should not refer this matter to the State Bar of California and the Northern District’s Standing Committee on Professional Conduct” (citations omitted). The court also concluded that the case relied upon by plaintiff’s counsel, Mace v. Van Ru Credit Corp., 109 F.3d 338 (7th Cir.1997), was in applicable because the Mace court merely refused to impose on counsel a duty to bring a class action “on behalf of the broadest possible class”; “Mace does not, however, condone post-suit collusion between counsel in separate actions in order to cut a class in two.” Id., at 1091.

Certification of Class Actions Class Action Court Decisions FDCPA Class Actions Uncategorized

Class Action Defense Cases-John v. National Security: Fifth Circuit Upholds District Court Dismissal Of Class Action Allegations Because Class Action Complaint Failed To Plead An Ascertainable Class

Class Action Requirements of Rule 23 Implicitly Require District Court to Determine Whether Class Action Complaint Adequately Pleads an Ascertainable Class Fifth Circuit Holds

Plaintiffs filed a class action lawsuit against their homeowner’s insurance carrier for damages caused by Hurricane Rita, alleging inter alia that the insurer “systematically under-adjust[ed] damages claims by failing to account for the inevitable inflation in the price of labor and materials for home repair that follows from natural disasters.” John v. National Sec. Fire & Cas. Co., 501 F.3d 443, 2007 WL 2743633, *1 (5th Cir. 2007). The class action complaint alleged further that the insurer breached the terms of its insurance policies by “systematically failing to account for general contractors’ overhead profit…when repair required the exercise of two or more trades.” Id. Defense attorneys moved to dismiss the class action for failure to state a claim, and for failure to plead an ascertainable class, id. The district court agreed with the defense arguments and dismissed the fraud claim and the class action allegations; the Fifth Circuit granted interlocutory review to resolve the issue of whether the district court erred in dismissing the class action allegations. The Circuit Court affirmed.

Preliminarily, the Fifth Circuit rejected plaintiffs’ efforts to redefine their class action allegations. Specifically, the Circuit Court noted that on appeal plaintiffs’ proposed two separate classes, and that plaintiffs “do not argue in favor of certifying a unitary class, as they proposed in their amended complaint.” John, at *1. Because, however, the Circuit Court’s jurisdiction was limited to whether the district court properly dismissed the unitary class action allegations in the pleadings, the Court explained at page *1 that it “may not consider whether the court should have certified two separate classes that were never proposed to it.” (Citing La. Patients’ Comp. Fund Oversight Bd. V. St. Paul Fire &Marine Ins. Co., 411 F.3d 585, 588 (5th Cir. 2005).) The Fifth Circuit rejected also plaintiffs’ claim that “dismissal of a class allegation on the pleadings is never proper.” Id. The Circuit Court explained at page *1:

Certification of Class Actions Class Action Court Decisions Uncategorized

Class Action Defense Cases-In re Mutual Fund Market-Timing: Seventh Circuit Holds That It Lacks Jurisdiction To Review District Court Order Remanding Class Action Lawsuits To State Court

Circuit Court Lacks Jurisdiction to Review Order Remanding Class Action Lawsuits to State Court under 28 U.S.C. § 1446(c) Seventh Circuit Holds This appeal resolving three class action lawsuits arose as follows: Plaintiffs (investors in various mutual funds) filed putative class action lawsuits in state court that defense attorneys removed to federal court. Following district court orders remanding the class actions to state court, the Seventh Circuit held that it had jurisdiction to review the remand orders and reversed.

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FACTA Class Action Defense Cases-In re TJX: Judicial Panel On Multidistrict Litigation (MDL) Grants Defense Motion To Centralize Class Action Litigation In The District Of Kansas

Judicial Panel Grants Defense Request for Pretrial Coordination of Class Action Lawsuits Pursuant to 28 U.S.C. § 1407 and Rejects Transferee Court Recommendations of Various Plaintiffs Opting Instead to Transfer Class Actions to District of Kansas as Requested by Defense Six class action lawsuits (followed by “tag-along” class actions) were filed against The TJX Companies for violations of the Fair and Accurate Credit Transactions Act (FACTA) because TJX allegedly included certain information on customer credit card receipts.

Class Action Court Decisions FCRA Class Actions Multidistrict Litigation Uncategorized

Class Action Defense Cases-CE Design v. Mortgage Exchange: Illinois State Appellate Court Dismisses Petition Seeking Leave To Appeal Denial Of Class Action Treatment Agreeing With Defense That Petition Was Untimely

Petition Seeking Review of Trial Court Order Denying Motion to Certify Class Action was Untimely thus Compelling Dismissal of the Petition for Lack of Jurisdiction

Plaintiffs filed a putative class action lawsuit in Illinois state court against The Mortgage Exchange alleging violations of the federal Telephone Consumer Protection Act of 1991 (TCPA) and the state’s consumer fraud and deceptive business practices arising out of defendant’s transmission of unsolicited advertisements via facsimile. CE Design, Ltd. v. The Mortgage Exchange, Inc., 872 N.E.2d 1056, 1057 (Ill.App. 2007). Plaintiffs moved the trial court for an order certifying the litigation as a class action; defense attorneys opposed the motion on the grounds, inter alia, that “issues such as the specific receipt of and consent to receive a facsimile transmission by each class member were not common issues.” Id., at 1057-58. __On October 13, 2006, the trial court agreed with the defense and refused to certify a class action holding, also, that class action treatment was inappropriate because in enacting the TCPA Congress “envisioned individual, small claims litigation, not private class actions with potential recoveries in the millions of dollars.” Id., at 1058. Plaintiffs sought reconsideration of the denial of class certification, which the trial court denied on February 22, 2007. Plaintiffs sought leave to appeal the denial of class action treatment, and defense attorneys moved to dismiss plaintiffs’ petition for lack of jurisdiction. Id. The appellate court granted the defense motion holding that plaintiffs’ petition was untimely.

Under Illinois state court rules, plaintiffs’ petition had to be filed “within 30 days after the entry of the order”; plaintiffs acknowledge that they failed to meet this deadline but argued the time for filing the petition was tolled during the pendency of the motion for reconsideration, or alternatively that the motion for reconsideration was a “new motion” for certification of a class action. CE Design, at 1059. The appellate court rejected each argument. With respect to the tolling argument, the appellate court observed that “[t]here is no provision in the rule that allows a motion to reconsider an interlocutory order to extend the time for filing the petition for leave to appeal,” and that case law holds that the time period is not tolled. Id. (citations omitted). The court was unconvinced that motions to reconsider class certification orders should be an exception to this rule. Id., at1060.

Certification of Class Actions Class Action Court Decisions Uncategorized

FLSA Class Action Defense Cases-Rubery v. Buth-Na-Bodhaige: New York Federal Court Denies Defense Motion To Dismiss Class Action Alleging Violations Of Fair Labor Standards Act (FLSA) As Premature

Motion to Dismiss Class Action Based on Rule 68 Offer of Judgment to Plaintiff Premature Because Court had not yet Ruled on Plaintiff Motion to Certify Class Action New York District Court Holds Plaintiff filed a class action against her employer, Buth-Na-Bodhaige, for violations of the federal Fair Labor Standards Act (FLSA) arising out of its alleged failure to pay managers overtime and misclassification of its managers as “exempt” employees. Rubery v.

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

UCL Class Action Defense Cases-Alvarado v. Selma Convalescent Hospital: California Court Holds That Class Action Alleging Violations Of Unfair Competition Law (UCL) Properly Dismissed Under Doctrine Of Judicial Abstention

Trial Court Properly Abstained from Resolving Class Action Claims that would Require it to “Assume General Regulatory Powers over the Health Care Industry through the Guise of Enforcing the UCL” California Court Holds

Plaintiff (now deceased) filed a putative class action in California state court against numerous skilled nursing and intermediate care facilities alleging violations of the state’s unfair competition law (UCL) for failing to comply with the nursing hour requirements set forth in Health and Safety Code § 1276.5(a). Alvarado v. Selma Convalescent Hosp., 153 Cal.App.4th 1292, 64 Cal.Rptr.3d 250, 251-52 (Cal.App. 2007). Defense attorneys demurred to the class action complaint, arguing that the court “should abstain from adjudicating the action or defer to the primary jurisdiction of the [Department of Health Services (DHS)]” and arguing further that no private right of action exists under § 1276.5(a). Id., at 253. Plaintiff disputed these arguments, and argued that the doctrine of “primary jurisdiction” did not apply, id. The trial court granted the defense motion and dismissed the class action with prejudice, holding that even assuming plaintiff could pursue a private action under § 1276.5, it nevertheless had discretion to abstain from hearing the case. Id. The appellate court affirmed the dismissal of the class action complaint, explaining at page 252: “Adjudicating the alleged controversy would have required the trial court to become involved in complex health care matters concerning the staffing of skilled nursing and intermediate care facilities and assume regulatory functions of the [DHS]. In addition, granting and enforcing the requested relief would place an unnecessary burden on the trial court given the power of the DHS to monitor and enforce compliance with section 1275.6.”

Noting that the question before it was whether the trial court abused its discretion by abstaining from adjudicating the alleged controversy,” Alvarado, at 253, the Court of Appeal began by observing that the UCL claims in the class action complaint sought equitable relief, and that “[b]ecause these remedies are equitable in nature, under the doctrine of judicial abstention, courts have the discretion to abstain from employing them,” id., at253-54 (citation omitted). In broad terms, the judicial abstention doctrine may be invoked “when the lawsuit involves determining complex economic policy which is best handled by the legislature or an administrative agency” or “where granting injunctive relief would be unnecessarily burdensome for the trial court to monitor and enforce given the availability of more effective means of redress.” Id., at 254 (citations omitted). Thus, a court should abstain if “granting the requested relief would require a trial court to assume the functions of an administrative agency, or to interfere with the functions of an administrative agency.” Id. (citations omitted).

Class Action Court Decisions Uncategorized

Class Action Defense Cases-Blackwell v. SkyWest: California Federal Court Refuses To Certify Labor Law Class Action Against Airline

Class Action Treatment of Labor Law Violation Claims not Warranted because Individual Issues Predominate over Common Issues thus Failing to Meet the Requirements of Rule 23(b)(3) California Federal Court Holds

Plaintiff filed a putative class action in California state court against her employer, SkyWest Airlines alleging violations of various state labor laws including failure to pay overtime and failure to provide and/or compensate for meal breaks. Blackwell v. SkyWest Airlines, Inc., ___ F.Supp.2d ___, Slip Opn., at 2 (S.D. Cal. August 30, 2007). Defense attorneys removed the action to federal court on the basis of the Class Action Fairness Act of 2005 (CAFA), _id._ Plaintiff filed a motion with the district court to certify the litigation as a class action, _id._, at 1, seeking to represent five classes, _id._, at 4; the district court agreed with defense attorneys that class action treatment would be inappropriate and denied the motion.

The district court readily concluded that the proposed classes, consisting of an estimated 2600 members, satisfied the numerosity requirement of Rule 23(a)(1), Blackwell, at 5-6, and that plaintiff had established the commonality requirement of Rule 23(a)(2) for each proposed class, id., at 6-9. The federal court additionally found that plaintiff would adequately represent the proposed classes within the meaning of Rule 23(a)(4), id., at 13-14. However, the typicality test of Rule 23(a)(3) proved more problematic. The district court agreed with defense attorneys that plaintiff lacked standing to pursue the class action claim alleging inaccurate wage statements under Labor Code § 226(a) because she failed to file her class action complaint within one year of her last wage statement. Id., at 10-11. The court further found that plaintiff failed to provide sufficient evidence to support her class action allegation based on voluntary shift trades, id., at 11-12.

Turning to the requirements of Rule 23(b), the district court noted that “[t]he Ninth Circuit has adopted an ‘extremely conservative view’ [with respect to Rule 23(b)(1)], requiring a finding that either ‘(1) rulings in separate actions would subject defendant to incompatible judgments requiting inconsistent conduct to comply with the judgment; or (2) a ruling in the first of a series of separate actions will “inescapably alter the substance of the rights of others having similar claims.”’” Blackwell, at 15 (citation omitted). The court agreed with defense attorneys that plaintiff failed to establish that either test had been met, id., at 15-16. The federal court next held that a Rule 23(b)(2) class action would be inappropriate because the monetary relief sought by the class action complaint was not “merely incidental to the injunctive relief sought.” Id., at 16.

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

GM-OnStar Class Action Defense Case-In re General Motors OnStar: Judicial Panel On Multidistrict Litigation (MDL) Grants Defense Motion To Centralize Class Action Litigation In Eastern District of Michigan

Judicial Panel Grants Defense Request, Opposed by Certain Plaintiffs, for Pretrial Coordination of Class Action Lawsuits Pursuant to 28 U.S.C. § 1407 and Concurs with Defense Recommendation to Transfer Class Actions to Eastern District of Michigan Four putative class action lawsuits (three in Michigan and one in California) were filed against General Motors “relating to (1) the impact of the conversion of the cellular network from an analog/digital network to a digital-only network on December 31, 2007, and (2) the availability of OnStar service in certain vehicles thereafter.

Class Action Court Decisions Multidistrict Litigation Uncategorized

Securities Fraud Class Action Defense Cases-In re JDS Uniphase: California Federal Court Holds Certain Claims In Securities Fraud Class Action May Proceed To Trial But Grants Defense Summary Judgment Motion As To Most Claims

Defense Motion for Summary Judgment in Securities Fraud Class Action Warranted as to 28 Statements Challenged by Class Action Complaint but Triable Issues Existed as to Remaining Class Action Claims California Federal Court Holds

Plaintiffs filed a securities fraud class action in California federal court against JDS Uniphase and certain officers alleging violations of Sections 11 and 15 of the federal Securities Act of 1933, and Sections 10(b), 14, 20(a) and 20A of the Securities Exchange Act of 1934 and Rules 10b-5 and 14a-9 promulgated under the Exchange Act. In re JDS Uniphase Corp. Sec. Litig., Slip Opn., at 1-2 and 6-7 (N.D. Cal. August 24, 2007). JDS Uniphase manufactures and supplies components of fiber-optic networks. Id., at 2. The class action alleges that the company and its officers falsely represented the company’s financial condition in order to artificially inflate the stock price, in part so JDS could purchase other companies “for less than their worth.” Id., at 3. After the court certified the litigation as a class action, defense and plaintiff attorneys filed cross-motions for summary judgment, id., at 1-2. The district court granted the defense motions in part and deferred ruling on plaintiffs’ motion; in so ruling, the federal court held that certain disputes could be resolved only at trial.

At the time the defense filed its summary judgment motion, plaintiffs were challenging 56 separate statements. JDS, at 10. The defense argued that it was entitled to judgment as to 24 of these statements either because plaintiffs failed to include them in the class action complaint or because plaintiffs abandoned them, id., at 9-10. The district court concluded: (1) plaintiffs did not abandon any claims raised in the class action complaint, id., at 10; (2) despite the holding in Kaplan v. Rose, 49 F.3d 1363 (9th Cir. 1994), plaintiffs were entitled to leave to amend to add 16 of the challenged statements to the class action complaint, id., at 10-12; and (3) plaintiffs failed to properly place at issue three of the statements challenged by the defense, and so the motion for summary judgment was granted as to those statements, id., at 13.

Class Action Court Decisions PSLRA/SLUSA Class Actions Uncategorized