Class Action Defense Cases—In re Pharmacy Benefit Managers: Multidistrict Litigation (MDL) Judicial Panel Transfers Putative Federal Antitrust Class Action Cases To Eastern District Of Pennsylvania Over Defense Objection

Judicial Panel on Multidistrict Litigation (MDL) Grants § 1407 Motion Over Objection of Some Defense Attorneys to Avoid Inconsistent Rulings on Class Action Certification in Federal Antitrust Cases Six class action lawsuits were filed against Merck, Medco Health, PAID Prescriptions (now part of Medco), ExpressScripts, Caremark, and AdvancePCS (now known as CaremarkPCS) alleging violations of federal antitrust laws based on the “conduct by the pharmacy-benefit manager (PBM) defendants – including the negotiation of rates for the sale of prescription drugs by retail pharmacies.

Class Action Court Decisions Multidistrict Litigation Uncategorized

Class Action Defense Cases-Judicial Panel on Multidistrict Litigation (MDL) Transfers Class Action Against JP Morgan Chase To Northern District Of Illinois Under 28 U.S.C. § 1407

MDL Judicial Panel Centralizes Class Action Lawsuits in Illinois Because Action in that State is More Procedurally Advanced Three lawsuits were filed against JP Morgan Chase alleging misrepresentations in connection with its merger in 2004 with Bank One; two lawsuits were filed in Delaware, and one lawsuit was filed in Illinois. The plaintiff in the Delaware lawsuits moved for centralization of the class actions in Delaware. The defense supported centralization, but requested that the cases be transferred to the Southern District of New York.

Class Action Court Decisions Multidistrict Litigation Uncategorized

Watt v. GMAC Mortgage-RESPA Class Action Defense Cases: Defense Motion To Dismiss RESPA Class Action Properly Granted Because RESPA Does Not Prohibit Servicer From Charging A Fee For Payoff Statements And Does Not Cap Fee Charged Eighth Circuit Holds

Federal District Court Properly Granted Defense Motion to Dismiss RESPA Class Action Because Congress did not Expressly Prohibit Servicers from Charging Fees for Payoff Statements

Borrowers filed a putative class action against GMAC Mortgage Corporation alleging that it violated the federal Real Estate Settlement Procedures Act (RESPA), 12 U.S.C. §§ 2601-2617, “by charging a $20 fee each time the plaintiffs requested their payoff amount from GMAC’s website,” and alleging also breach of contract. The defense moved to dismiss the complaint. The district court granted the motion to dismiss the RESPA claim, but declined to exercise jurisdiction over the contract claim. The Eighth Circuit affirmed. Watt v. GMAC Mortgage Corp., 457 F.3d 781, 782 (8th Cir. 2006).

Plaintiffs argued that RESPA requires responses to “qualified written requests” be provided free of charge because RESPA does not affirmatively state that loan servicers may charge fees for such responses: “Since RESPA imposes a duty to respond but does not stated that servicers may charge fees for statements sent in response to qualified written requests, the [plaintiffs] argue, servicers are prohibited from charging fees.” Watt, at 783. The Circuit Court disagreed, holding at page 783:

Class Action Court Decisions RESPA/TILA Class Actions Uncategorized

FedEx Class Action Defense Case-Hart v. FedEx: CAFA (Class Action Fairness Act) Shifts Burden Of Persuasion From Defense To Plaintiff To Establish Exceptions To Federal Court Jurisdiction Seventh Circuit Holds

As a Matter of First Impression in Seventh Circuit, Court Holds that Class Action Fairness Act of 2005 (CAFA) Shifts Burden to Plaintiff to Establish Exceptions to Federal Court Jurisdiction

After plaintiff filed a putative labor law class action against FedEx in Pennsylvania state court, defense attorneys removed the case to federal court under CAFA (Class Action Fairness Act of 2005). The Judicial Panel on Multidistrict Litigation transferred the class action to the Northern District of Indiana, and plaintiff moved to remand the case to Pennsylvania state court under the “local controversy” or “home-state controversy” exceptions to federal court jurisdiction under CAFA. The district court denied the motion on the ground that plaintiff had failed to meet his burden of establishing that the exceptions applied. Plaintiff appealed the order, and the Seventh Circuit held that CAFA shifted the burden to plaintiff and affirmed. Hart v. FedEx Ground Package System Inc., 457 F.3d 675, 676-77 (7th Cir. 2006).

Plaintiff’s class action alleged the FedEx delivery drivers were misclassified as “independent contractors.” Hart, at 676. The complaint alleged that “greater than two-thirds of the members of the plaintiff class, if not all of the members of the plaintiff class, are citizens of Pennsylvania.” Id., at 677. FedEx removed the lawsuit to federal court under CAFA alleging in the notice of removal that “[u]pon information and belief, some of the proposed class members are not residents of Pennsylvania,” id. Absent CAFA, diversity jurisdiction would not exist. Id., at 676. Plaintiff sought to remand the action under CAFA’s “local controversy” and “home-state controversy” exceptions, see § 1332(d)(4)(B), and urged that under _Brill v. Countrywide Home Loans_¸ 427 F.3d 446 (7th Cir. 2005), FedEx bore the burden of establishing jurisdiction under CAFA and “also that none of the mandatory exclusions from CAFA jurisdiction found in § 1332(d)(4) applied,” id., at 677.

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

Boeing Class Action Defense Case-Carpenter v. Boeing: Federal District Court Orders In Labor Law Class Action Decertifying Subclass And Granting Defense Motion For Summary Judgment Affirmed By Tenth Circuit

Tenth Circuit Holds that Interlocutory Review of Class Certification Orders Must be Sought within 10 days of Initial Order, not Order Denying Reconsideration, and that Plaintiffs’ Statistical Evidence Failed to Establish Prima Facie Case of Disparate Impact Because Males may have Worked more Overtime Hours for Reasons Other than Gender

Female employees filed a putative employment class action in federal district court alleging Title VII Civil Rights Act sex discrimination against Boeing on theories of both disparate impact and disparate treatment. Following substantial litigation, that included class certification of certain subclasses, the district court granted a defense motion for summary judgment as to the “hourly” wages subclass “disparate impact” overtime claim. Plaintiffs appealed this ruling – which the district court certified as a final judgment under FRCP Rule 54(b) – and several other class-certification ruling. The Tenth Circuit affirmed. Carpenter v. Boeing Co., 456 F.3d 1183 (10th Cir. 2006).

The Circuit Court began with the class certification rulings, noting that interlocutory appeal of class certification orders may be granted only if sought within 10 days of entry of the order. Carpenter, at 1189 (citing FRCP Rule 23(f)). In this appeal, plaintiffs filed a motion for class certification, which the district court granted in part and denied in part. Almost a year later, plaintiffs filed a “Renewed Motion for Class Certification”; the motion was denied. A few months later plaintiffs filed a “Second Renewed Motion for Class Certification”; this, too, was denied and plaintiffs filed their Rule 23(f) application within 10 days thereafter. Id., at 1188. Boeing argued that the application was untimely, id., at 1189; the Circuit Court agreed and dismissed the application for lack of jurisdiction, id., at 1190-92.

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

Class Action Defense Issues-Clark v. Capital Credit: Ninth Circuit Affirms In Part And Reverses In Part Federal District Court Judgment In Favor Defense In FDCPA (Fair Debt Collection Practices Act) Case

Ninth Circuit Resolves Several Issues of First Impression Concerning Federal Fair Debt Collection Practices Act (FDCPA), Holding Debtor Can Waive “Cease Communication” Directive, Debt Collectors May Rely on Information Provided by Creditors to Verify Debt, FDCPA is a Strict Liability Statute, and One Act Can Support Multiple Violations

Debtors filed suit against a debt collection agency, its employee and its outside counsel alleging various violations of the federal Fair Debt Collection Practices Act (FDCPA) and Oregon’s Unfair Debt Collection Practices Act. The defense and debtors filed cross-motions for summary judgment; the district court granted the motion brought by the attorney, partially granted the motion brought by the debt collector, and denied the motion brought by the debtors. The Ninth Circuit affirmed in part and reversed in part. Clark v. Capital Credit & Collection Services, Inc., ___ F.3d ___, 2006 WL 2441705 (9th Cir. August 24, 2006). We provide a brief summary of the case, which the Ninth Circuit characterized as “present[ing] a complicated web of problems that has required us to address a litany of issues for which there is a dearth of applicable precedent” and for which it “endeavored to adopt a construction of the FDCPA that recognizes ‘there is room within the [FDCPA] for ethical debt collectors to make occasional unavoidable errors,” Slip Opn., at 10165 (citation omitted).

In an effort to collect a debt, a debt collector sent the debtor a collection notice letter. The debtor disputed the debt and detailed billing problems with the creditor. The debt collector sent a second notice, enclosing an itemized statement from the creditor and claiming that the statement adequately verified the debt. The debtor requested “proper verification” and instructed the debt collector to cease making telephone calls. Slip Opn., at 10143. The debt collector then retained counsel who, in response to a demand for verification of the debt and an end to telephone communications, responded with the same itemized statement previously provided to the debtor. The debtor subsequently called the attorney to discuss the debt, but received a return call from the debt collection agency that “so upset [her] that she was required to obtain therapy.” Id., at 10144. The debtors filed suit.

Class Action Court Decisions FDCPA Class Actions Uncategorized

In re AT&T-Class Action Defense Cases: District Court Did Not Abuse Its Discretion In Approving $21 Million Attorney Fee Award Out Of $100 Million Securities Fraud Class Action Settlement Fund Third Circuit Holds

District Court Must Examine Class Action Attorney Fee Awards Closely but not According to a Strict Formula and, so Viewed, Approval of Class Action Settlement was Proper

Plaintiffs filed a federal securities fraud class action against AT&T based on allegedly false statements that artificially inflated stock prices. The defense waged an intense battle for several years but ultimately settled the class action claims for $100 million eight (8) days into a jury trial. The district court approved the settlement, which included payment of attorney fees equal to 21.25% of the settlement proceeds ($21.25 million), and four objectors appealed. The Third Circuit affirmed. In re AT&T Corp. Securities Litig., 455 F.3d 160 (3d Cir. 2006).

The July 20, 2006 opinion details the typical procedure for assessing attorney fees in the Third Circuit, and analyzed each of the factors the district court was required to consider when determining whether to approve a class action settlement. In the Third Circuit, those factors are set forth in Girsh v. Jepson, 521 F.2d 153 (3d Cir. 1975), and include:

Class Action Court Decisions Uncategorized

Everett v. Verizon-Class Action Defense Cases: Defense Failed To Establish Amount In Controversy For Removal Of Class Action To Federal Court Because Neither Disgorgement Nor Punitive Damage Claims May Be Aggregated Sixth Circuit Holds

Court of Appeals Reverses District Court Denial of Motion to Remand Because Defense Failed to Satisfy $75,000 Amount-In-Controversy Requirement Under 28 U.S.C. § 1332, and Holds as Matter of First Impression in Sixth Circuit that Punitive Damages may not be Aggregated to Meet Threshold

After plaintiffs filed a putative class action in state court against several cellular telephone companies arising out of the allegedly false representation that customers “would not be charged for unanswered phone calls or those that generated a busy signal,” and praying for “an unspecified amount of compensatory damages, injunctive relief, restitution, [and] disgorgement,” defense attorneys removed the action to federal court on the basis of diversity jurisdiction. Everett v. Verizon Wireless, Inc., 460 F.3d 818 (6th Cir. 2006). Plaintiffs moved to remand the action to state court on the ground that the defense had not satisfied its burden of establishing that the $75,000 amount-in-controversy requirement, but the district court denied the motion holding that “the size of the disgorgement claim met this threshold.” Id., at 821. Eventually, the federal action involved but a single class representative and a single defendant, and the district court granted a defense motion for summary judgment as to the claims remaining against it. Plaintiff appealed only the district court’s remand order, not the ruling on the merits. Id. The Circuit Court agreed with plaintiff’s argument and reversed.

Class Action Court Decisions Removal & Remand Uncategorized

Barnett v. Experian-Class Action Defense Cases: Texas Court Decertifies Class Action Under Federal Fair Debt Collection Practices Act (FDCPA) Decertified Because Defendant In Bankruptcy

Federal Court Holds Decertification of Class Action Appropriate Where Defense Lacks Financial Ability to Satisfy Claims

Plaintiffs filed a class action against defendants, including The Credit Store, alleging violations of the federal Fair Debt Collection Practices Act (FDCPA); a Texas federal district court certified the class action, but the defense delayed implementation of the certification order by filing a bankruptcy petition. The district court decertified the class action against The Credit Store sua sponte because it lacked the financial ability to satisfy any judgment against it. Barnett v. Experian Information Solutions, Inc., 236 F.R.D. 307 (E.D. Tex. 2006). The district court summarized the allegations against The Credit Store as follows: “The plaintiffs contend that the defendant purchased old debts and changed the date of last activity on the accounts such that they could be reported to credit reporting agencies under the Fair Credit Reporting Act. This gave the debt collectors leverage to collect the obsolete debts.” Id., at 308.

Class Action Court Decisions FDCPA Class Actions Uncategorized

Class Action Defense Cases-Kolari v. New York-Presbyterian Hospital: Federal District Court Erred In Exercising Supplemental Jurisdiction And Dismissing Class Action State-Law Claims Second Circuit Holds

Second Circuit Holds that Once District Court Granted Defense Motion to Dismiss Federal Claims that Provided Federal Jurisdiction it Should have Remanded State-Law Class Action Claims to State Court Rather than Dismissing Them with Prejudice

Plaintiffs filed a putative class action against asserting various federal and state-law claims based on allegedly inflated heath care treatment rates. The defense moved to dismiss the class action complaint in its entirety. The district court granted the defense motion, and plaintiffs appealed the dismissal of three of their state-law class action claims arguing that (1) the court should have remanded the claims to state court once it disposed of the federal class action claims, and (2) even if the court should have retained jurisdiction, it erred in dismissing the state-law claims. Kolari v. New York-Presbyterian Hosp., 455 F.3d 118 (2d Cir. 2006). Because the Second Circuit agreed with the first argument advanced by plaintiffs, if did not reach the latter argument. Id., at 119.

Class Action Court Decisions Removal & Remand Uncategorized