Camacho v. Automobile Club-Class Action Defense Cases: Defense Motion For Judgment On The Pleadings With Respect To Unfair Business Practice Claims In Class Action Complaint Properly Granted California Court Holds

California’s Unfair Competition Law (UCL) was not Violated by Efforts of Insurers and Collection Company to Collect Money from Uninsured Motorist who Caused Accident

An uninsured driver filed a putative class action against various defendants arising from their efforts to collect amounts that he owed for rear-ending an insured driver. The trial court sua sponte recast as a motion for judgment on the pleadings the demurrer filed by defense attorneys to the unfair business practice claims premised on California’s Business & Professions Code section 17200. The trial court then granted the judgment on the pleadings as to the UCL claims in the class action complaint, and the Court of Appeal affirmed. Camacho v. Automobile Club of Southern California, ___ Cal.App.4th ___, 48 Cal.Rptr.3d 770 (Cal.App. September 14, 2006).

Briefly, plaintiff rear-ended an insured driver whose carrier paid the claim and assigned its rights against plaintiff to a collection company. Plaintiff paid $500 of the roughly $9400 he owed, and then filed his class action lawsuit alleging violations of California’s unfair competition law (UCL), Business & Professions Code section 17200, arising out of the efforts of the collection company to recover money due the insurers. In part the class action challenged letters sent by the collection company, but the complaint also alleged unfair business practices unrelated to those letters. Camacho, at 771-73. The appellate court summarized the claims based on the letters at page 773 as follows:

Class Action Court Decisions Uncategorized

Cingular Class Action Defense Case-Stern v. Cingular Wireless: Arbitration Provision Waiving Class Action Remedy Unenforceable California Federal Court Holds

California Federal District Court Holds Arbitration Clause Requiring Arbitration at Customers’ Expense and Waiving Right to Class Action Device to be Unconscionable and Unenforceable

In November 2004, plaintiff signed a service agreement with AT&T Wireless, and received a booklet entitled “Important Information and Service Agreement” that contained in part an arbitration clause governed by the Federal Arbitration Act (FAA) and a class action waiver. Cingular Wireless thereafter acquired AT&T Wireless; its customers also signed service agreements that contained arbitration clauses, but Cingular’s agreement provided that the company would pay the cost of the arbitration unless the customer’s action is frivolous, and that the company would pay the customer’s attorney fees if the arbitrator awarded the amount the customer demanded or more. In December 2005, plaintiff filed a class action lawsuit in California federal court against AT&T and Cingular for violations of the Federal Communications Act, declaratory relief, breach of contract, violations of California’s unfair competition law (UCL), and violations of California’s Consumers Legal Remedies Act (CLRA), based on the allegation that defendants charged customers for services that the customers had not authorized, totaling approximately $9 per month. Stern v. Cingular Wireless Corp., 453 F.Supp.2d 1138, 1141-43 and 1149 (C.D. Cal. July 28, 2006). Defense attorneys moved to compel arbitration and stay the litigation; plaintiff’s lawyer argued that the arbitration clause was unconscionable and unenforceable. The district court denied the defense motion, concluding that the class action waiver was unconscionable.

Arbitration Class Action Court Decisions Uncategorized

Exxon Mobil Class Action Defense Case-Steering Committee v. Exxon Mobil: District Court Properly Refused To Certify Class Action Based On Personal Injuries Arising From Chemical Fire Fifth Circuit Holds

Louisiana Federal Court did not Abuse its Discretion in Refusing to Certify Class Action Against Exxon Because Individual Issues Predominated over Common Issues and Superiority Requirement was not Met

In 1994, smoke from an oil fire at an Exxon Mobil chemical plant drifted into neighboring communities: “Hundreds of suits were filed against Exxon Mobil, alleging various causes of action including personal injury, personal discomfort and annoyance, emotional distress resulting from knowledge of exposure to hazardous substances, fear of future unauthorized exposures, and economic harm including damage to business and property, among others.” Steering Committee v. Exxon Mobil Corp., 461 F.3d 598, 600 (5th Cir. 2006). The lawsuits were consolidated in a Louisiana federal court, and plaintiffs proposed that the action proceed as a class action and moved for class certification. Defense attorneys opposed the motion, and filed summary judgment motions as to certain categories of claims against Exxon. Id. The district court first decided the summary judgment motions, granting summary judgment “on all claims for physical injuries and non-intentional emotional distress brought by individual plaintiffs who were located outside the geographic area that the air modeling experts agreed was affected by the [smoke] plume,” and “on all claims for intentional infliction of emotional distress.” Id., at 600-01. The court then denied the motion to proceed as a class action, concluding that plaintiffs failed to establish typicality or adequacy of representation under Rule 23(a), and predominance and superiority under Rule 23(b)(3). Id., at 601. The Fifth Circuit affirmed.

Certification of Class Actions Class Action Court Decisions Uncategorized

White v. DaimlerChrysler-Class Action Defense Cases: Defense Motion To Dismiss Consumer Fraud Class Action Granted Because Plaintiff Failed To Plead Fraud Or Damages With Requisite Specificity Illinois Court Holds

Illinois Court Affirms Dismissal of Consumer Fraud Class Action Because Fraud Allegations were Conclusory and Complaint Failed to Allege Actual Damages

A car buyer filed a putative class action in Illinois state court against DaimlerChrysler Corporation for alleged violations of the Consumer Fraud Act and the federal Magnuson-Moss Act, 15 U.S.C. §§ 2301 et seq., claiming that defendant concealed a “material defect” in its Jeeps; specifically, plaintiff claimed the exhaust manifold was “substandard and defective” because it was made of tubular steel rather than the more expensive (and allegedly “standard”) cast iron. White v. DaimlerChrysler Corp., ___ N.E.2d ___, 2006 WL 2739009 (Ill.App. September 26, 2006) [Slip Opn., at 1-2]. Defense attorneys moved to dismiss the class action complaint on several grounds; the trial court granted the defense motion, and plaintiff appealed only the dismissal of the Consumer Fraud Act claims. _Id._, at 1. The appellate court affirmed.

Class Action Court Decisions Uncategorized

Cingular Class Action Defense Case-Kinkel v. Cingular: Illinois Rejects Defense Efforts To Enforce Arbitration Clause Barring Class Action Device And Refuses To Apply Arbitration Terms Effective After Class Action Plaintiff Terminated Service Contract

Court Holds that Arbitration Clause in Effect at Time Class Action Plaintiff Terminated her Service Agreement Governed in Motion to Compel Arbitration, and Class Action Waiver in Wireless Service Provider’s Arbitration Clause Held Unenforceable by Illinois Supreme Court

Plaintiff filed a class action in Illinois state court against her cellular telephone service provider, Cingular Wireless, for alleged violations of the state’s Consumer Fraud and Deceptive Business Practice Act on the ground that the early termination fee is an unlawful penalty. Defense attorneys moved to compel arbitration pursuant to an arbitration clause that provided that “‘no arbitrator has the authority’ to resolve class claims.” Kinkel v. Cingular Wireless LLC, ___ N.E.2d ___, 2006 WL 2828664 (Ill. October 5, 2006) [Slip Opn., at 1]. The trial court refused to compel arbitration. The appellate court held that the arbitration clause was enforceable, but that the prohibition against class action arbitrations was not; accordingly, it reversed the trial court’s ruling. _Id._ The Illinois Supreme Court rejected defense arguments that the class action bar was enforceable and affirmed the decision of the appellate court.

Plaintiff signed a two-year service contract with Cingular in July 2001, but terminated her service in April 2002. Cingular charged her a $150 early-termination fee, in accordance with the terms of the service agreement plaintiff signed when she became a customer. Slip Opn., at 2. Plaintiff filed a class action against Cingular, arguing that the early-termination fee was an illegal penalty and that the class action waiver in the arbitration clause “prevents her and others from ‘effectively vindicating their statutory and common law causes of action and facilitates rather than remedies Cingular’s fraudulent and unlawful conduct.’” Id. The trial court denied a defense motion to compel arbitration; the appellate court found the class-action waiver provision to be unenforceable but severable from the balance of the arbitration clause, and so reversed. Id.

Arbitration Class Action Court Decisions Uncategorized

Koehl v. Verio-Class Action Defense Cases: Class Representatives Hit With Damages And Half-Million Dollar Attorney Fee Award By California Court After Losing Labor Law Class Action Against Former Employer

California Court Holds that Compensation Scheme Permitting Chargebacks Against Monies Advanced Against Unearned Commissions did not Violate State Labor Laws Because Such Commissions were not Wages

Four former employees filed a class action in California state court against internet service provider Verio for violations of California’s labor laws on the grounds that Verio’s compensation scheme – which provided for a base salary, plus commissions that were subject to charge backs under certain conditions – violated California Labor Code § 221 because the commissions were wages. Koehl v. Verio, Inc., ___ Cal.App.4th ___, 48 Cal.Rptr.3d 749, 751 (Cal.App. 2006). “The complaint alleged three causes of action: (1) commission chargebacks in violation of Labor Code sections 221, 223, 225 and 400-410; (2) waiting penalties pursuant to section 203; and (3) unfair competition under Business and Professions Code section 17200 _et seq._” _Id._, at 759 (footnote omitted). Verio cross-complained against the class representatives for commissions recoverable as charge-backs under the compensation scheme, _id._ The trial court agreed that the commissions were not wages, awarded the employer compensatory damages (for overpayment of unearned commissions) and prejudgment interest totaling more than $250,000, and awarded the employer more than $548,000 in attorney fees. _Id._, at 759-60. The Court of Appeal affirmed.

Class Action Court Decisions Employment Law Class Actions Uncategorized

U-Haul Class Action Defense Case-Aron v. U-Haul: Trial Court Erred In Granting Defense Motion For Judgment On The Pleadings In Class Action Alleging California CLRA And UCL Violations

California Court Holds that Class Action Complaint Adequately Alleged Violations of California’s Consumers Legal Remedies Act (CLRA) and Unfair Competition Law (UCL) Based on Truck Rental Company’s Refueling Practices

Plaintiff filed a putative class action against U-Haul for violations of California’s Consumers Legal Remedies Act (CLRA) and Unfair Competition Law (UCL) arising out of U-Haul’s refueling charges and practices. Aron v. U-Haul Co. of California, ___ Cal.App.4th ___, 2006 WL 2808074 (Cal.App. October 3, 2006) [Slip Opn., at 2]. Defense attorneys moved for judgment on the pleadings, and the trial court granted the motion. The Court of Appeal reversed. _Id._ The facts of the case are simple, and are concisely summarized by the appellate court at page 2 as follows:

U-Haul Company of California and U-Haul International, Inc. (“U-Haul”) rent trucks to customers. Rather than supplying those customers with fully fueled trucks, U-Haul rents its trucks partially fueled, presenting them to each succeeding customer with the fuel remaining when the previous customer returned the vehicle. The level of the fuel gauge is the exclusive means of measurement relied on. If on return, the fuel gauge is lower than at rental, U-Haul charges the customer a $20 fueling fee as well as $2 per gallon for fuel estimated to have been used, but not replaced, by the customer. U-Haul does not reimburse customers for additional fuel if a truck is returned with more fuel than initially provided.

The rental contract sets out these two options explicitly: “I confirm equipment is clean and agree to pay for all fuel used and return the truck with the same fuel gauge reading as indicated on this rental contract and will pay $20 fueling fee plus $2 per gallon for estimated fuel used. U-Haul does not reimburse for excess fuel purchased by the customer.”

Class Action Court Decisions Uncategorized

Farm Raised Salmon Class Action Defense Case: Class Action Preempted By Federal Food, Drug, And Cosmetic Act (FDCA) Because No State Law Private Right Of Action Exists Based On FDCA Violations California Court Holds

In Action Alleging California Consumers Legal Remedies Act (CLRA) and Unfair Business Practices (UCL) Claims Concerning Artificially Colored Farmed Salmon, California Court of Appeal Affirms Judgment Granting Defense Motion to Dismiss Class Action on Grounds of Federal Preemption

Plaintiffs filed separate class action lawsuits against various defendants for unfair competition, false advertising, negligent misrepresentation, and violations of California’s Consumers Legal Remedies Act (CLRA) based on the alleged sale of artificially colored farmed salmon without disclosing that the salmon had been artificially colored. Farm Raised Salmon Cases, ___ Cal.App.4th ___, 48 Cal.Rptr.3d 449, 451 (Cal.App. 2006). The class action was premised on the allegation that the flesh of farmed salmon is naturally “grayish,” so they were fed chemicals for the purpose of coloring the flesh so that it would resemble the color of wild salmon. The complaint alleged that consumers would be less inclined to purchase the salmon without the chemical coloring, and that consumers were not informed of the artificial coloring. Specifically, the class action alleged that “the FDCA and parallel state laws require food labeling to state that farmed salmon is artificially colored,” _id._ Defense attorneys moved to dismiss the lawsuit on the grounds that it was preempted by the federal Food, Drug, and Cosmetic Act (FDCA), 21 U.S.C. §§ 301 _et seq._ The trial court dismissed the class action and the appellate court affirmed, holding that “Congress made clear its intention to preclude private enforcement of the FDCA” and that “a state law private right of action based on an FDCA violation would frustrate the purposes of exclusive federal and state governmental prosecution of the act,” _id._

Class Action Court Decisions Uncategorized

Class Action Defense Cases-Del Campo v. Kennedy: California Federal Court Denies Defense Motion For Protective Order That Sought To Bar Third Party Precertification Discovery In FDCPA Class Action

California Federal Court Reaffirms that Scope of Precertification Discovery in Class Action Lawsuits is Within the Discretion of the Court

A putative class action alleging violations of the federal Fair Debt Collection Practices Act (FDCPA) was filed against a county district attorney and a private company (ACCS) under contract to administer the county’s Bad Check Restitution Program. Del Campo v. Kennedy, 236 F.R.D. 454 (N.D. Cal. 2006). After plaintiff learned that the check she had given a store merchant (Fry’s Electronics) did not clear, she called the store and offered to make full payment: “The store declined her offer because the check had not been entered yet into the computer system.” Id., at 456. Plaintiff later received a letter from the district attorney concerning the crime of writing a bad check, and advising her that she owed not only the amount of the check ($95.02), but a returned item fee ($10), administrative fee ($35), and bad check restitution program fee ($125); plaintiff tendered only the amount of the delinquent check. Id. Upon receiving a demand threatening criminal action if she failed to pay the $170 in additional fees, plaintiff filed the FDCPA class action. Id. Eventually, the class action was consolidated with another lawsuit. Plaintiff then filed subpoenas on two stores (Safeway and Target), and defense attorneys filed a motion to quash the subpoenas or for a protective order.

Class Action Court Decisions FDCPA Class Actions Uncategorized

Class Action Defense Cases-Anchor Lighting v. SoCal Edison: California Public Utilities Commission Has Exclusive Jurisdiction Over State Utilities

California Courts Lack Jurisdiction Over Class Action By Commercial Electricity Customer Against Electricity Supplier

A commercial electricity customer, Anchor Lighting, filed a putative class action against electricity supplier Southern California Edison after it failed to qualify for a 10% rate reduction; the trial court agreed with defense attorneys that it lacked jurisdiction over the claims and dismissed the lawsuit. The California Court of Appeal affirmed, holding that the California Public Utilities Commission (CPUC) had “exclusive jurisdiction over the regulation and control of utilities and that jurisdiction, once assumed, cannot be hampered or second-guessed by a superior court action addressing the same issue.” Anchor Lighting v. Southern California Edison Co., ___ Cal.App.4thh ___, 47 Cal.Rptr.3d 7810, 784 (Cal.App. August 30, 2006).

Class Action Court Decisions Uncategorized