Merck Class Action Defense Cases-In re Merck: New Jersey Federal Court Grants Defense Motion To Dismiss Securities Fraud Class Action Finding Class Action Claims Barred By Statute Of Limitations

Extensive News Reports of the Risks of Vioxx Placed Investors on Inquiry Notice More than Two Years before Filing of Securities Fraud Class Actions, Thus Warranting Dismissal of Class Action Complaint as Time-Barred as Requested by Defense Federal Court Holds

This securities fraud class action is but one of thousands of class action and individual complaints filed against Merck arising out of its prescription drug Vioxx. This class action alleged that Merck withheld information that Vioxx increased a patient’s risk of heart attack and misrepresented the drug’s safety. In re Merck & Co., Inc., Securities, Derivative & “ERISA” Litig., ___ F.Supp.2d ___ (D. N.J. April 12, 2007) [Slip Opn., at 2]. Defense attorneys moved to dismiss the class action complaint on several grounds, mostly notably that the claims were time-barred, _id._, at 1-2; the district court agreed with the statute of limitations defense and dismissed the class action complaint with prejudice as untimely.

By way of background, Merck brought Vioxx – a nonsterodial anti-inflammatory drug (NSAID) – to the market in May 1999,and two years later the Food & Drug Administration approved Vioxx for various uses. Slip Opn, at 2-3. “Merck continued to research, study and test Vioxx after its approval by the FDA and introduction to the market.” Id., at 3. In March 2000, Merck disclosed that one of those studies revealed that an increased incidence of heart attack and other thrombotic events. Id. Merck’s press release attributed this finding to the properties of the control drug but, according to the class action complaint allegations, Merck knew that the real cause of this difference was that Vioxx increased the risk of heart attacks. Id., at 4. The FDA advisory committee found inclusive evidence of the cause of the increased risk of cardiac events but believed it prudent to “include on the Vioxx label data about the higher incidence of cardiovascular events,” id. The study received extensive news coverage as early as April 2000, and several news articles warned patients that Vioxx “might increase their risk of suffering a heart attack.” Id., at 5. Other news reports agreed with Merck’s conclusion that the control drug used in the study worked to prevent heart attacks, thus accounting for the difference in incidence of cardiac events with the Vioxx control group, id., at 6-7. For its part, Merck issued numerous press releases touting the safety of Vioxx, id., at 7-8. The FDA criticized Merck’s promotional efforts, and in a warning letter dated September 17, 2001 and published on the FDA website, the FDA “admonished Merck for misrepresenting the safety profile of Vioxx, downplaying the cardiovascular findings of the . . . study,” id., at 8.

PSLRA/SLUSA Class Actions Uncategorized

Class Action Defense News: New Jersey Federal Court Holds Securities Fraud Class Action Against Merck Time-Barred

On April 12, 2007, United States District Court Judge Stanley R. Chesler of the District of New Jersey dismissed a securities fraud clas action against Merck, agreeing with defense attorneys that the class action claims are time-barred. The ruling represents yet another victory in Merck’s defense against thousands of class action and individual complaints arising, directly or indirectly, out of its prescription drug Vioxx. A summary of the district court’s ruling will be posted later in the week.

Class Actions In The News Uncategorized

24 CFR § 3500.17—Escrow Accounts Under Regulation X (Real

As a resource for class action defense attorneys who defend against RESPA (Real Estate Settlement Procedures Act) class actions, we provide the text of Regulation X.Congress gave authority to the Secretary of the Department of Housing and Urban Development (HUD) to promulgate regulations for RESPA, and the regulations are set forth in 24 CFR § 3500.1 et seq.The regulations concerning escrow accounts are set forth in § 3500.17, which provides:

Statutes & Rules Uncategorized

New Employment Law Class Action Lawsuits Continue To Dominate Weekly Class Action Filings In California State And Federal Courts

In order to assist California class action defense attorneys in anticipating the claims against which they may have to defend, we provide weekly, unofficial summaries of the legal categories for new class actions filed in California state and federal courts in the Los Angeles, San Francisco, San Jose, Sacramento, San Diego, San Mateo, Oakland/Alameda and Orange County areas. We include only those categories that include 10% or more of the class action filings during the relevant timeframe.

Class Actions In The News Uncategorized

Class Action Defense Cases-Lessard v. City of Allen Park: Michigan Federal Court Rules In Favor Of Cy Pres Distribution of Unclaimed Class Action Settlement Funds

Cy Pres Distribution of Unclaimed Class Action Settlement Funds Appropriate Michigan District Court Holds Following settlement of a class action, there remained approximately $45,000 in unclaimed funds. The federal court had ordered the settlement funds disbursed in March 2006, and further efforts had been made to contact the individual class members who had not claimed their share of the class action settlement proceeds. Lessard v. City of Allen Park, 470 F.

Class Action Court Decisions Uncategorized

Class Action Defense Cases—In re Vonage IPO: Judicial Panel On Multidistrict Litigation (MDL) Grants Defense Motion To Centralize Class Action Litigation In District of New Jersey

Judicial Panel Grants Defense Request for Pretrial Coordination of Class Action Lawsuits Pursuant to 28 U.S.C. § 1407, Rejecting Opposition by Plaintiffs in One Class Action based on Pending Motion for Remand of Class Action to State Court Fourteen securities class action lawsuits – 13 in New Jersey and one in New York – were filed against various defendants based on the initial public offering of Vonage common stock. In re Vonage Initial Public Offering (IPO) Securities Litig.

Class Action Court Decisions Multidistrict Litigation Uncategorized

TILA Class Action Defense Cases-Carye v. Long Beach: Massachusetts Federal Court Dismisses Individual Rescission Claims In TILA Class Action But Denies Defense Request To Dismiss Class Action Claim And Motion To Sever

As Matter of First Impression, Massachusetts Federal Court Holds that Rider Creates Security Interest in Property Required to be Disclosed under Federal Truth in Lending Act (TILA)

Plaintiff filed a putative class action against his mortgage lender, Long Beach Mortgage Company, for alleged violations of the federal Truth in Lending Act (TILA), later amending the class action complaint to add two additional party plaintiffs and two additional claims – a class action claim under TILA’s state law counterpart, the Massachusetts Consumer Cost Disclosure Act (MCCDA), and an individual claim for under TILA and MCCDA for rescission. Carye v. Long Beach Mortgage Co., 470 F.Supp.2d 3, 5 (D. Mass. 2007). Defense attorneys moved to dismiss the class action claim and plaintiff Carye’s individual claims for rescission pursuant Rule 12(b)(6), and moved also to sever the claims of the newly added plaintiffs. Id. The defense argued that the class action claim failed because TILA does not require the disclosure of the security interest created by Id.

As the district court explained, TILA requires that a creditor disclose to the borrower any security interest taken in property purchased as part of the loan transaction and in any property not purchased as part of the transaction but separately identified. Carye, at 6-7. In this case, plaintiffs borrowed money from Long Beach Mortgage secured by their residences, and each of them signed a 1-4 Family Rider/Assignment of Rents (Rider) as part of their loan documentation. Carye, at 5-6. The Riders created a security interest in property separately identified in detail (see Note, below). Plaintiffs urged that this constituted a violation of TILA; Long Beach argued that the interest was merely “incidental” and, accordingly, was not required to be disclosed under TILA. Id., at 7. Plaintiffs countered that the Rider “created a security interest in virtually all of the plaintiffs’ personal property” and had to be disclosed. Id., at 7-8.

Class Action Court Decisions RESPA/TILA Class Actions Uncategorized

Tobacco Class Action Defense Cases-Dahl v. R.J. Reynolds: Eighth Circuit Reverses Denial Of Motion To Remand Class Action To State Court

Class Action Remanded to State Court because Circuit Court of Appeals Opinion in a Different Case does not Constitute “an Amended Pleading, Motion, Order or Other Paper” Within the Meaning of 28 U.S.C. § 1442(b) Eighth Circuit Holds

In 2003, plaintiffs filed a class action in Minnesota state court against R.J. Reynolds & Touche for fraud and violations of state consumer protection laws alleging that the company engaged in “unfair business practices and/or deceptive and unlawful conduct in connection with the manufacture, distribution, promotion, marketing, and sale” of “light” cigarettes. Dahl v. R.J. Reynolds Tobacco Co., 478 F.3d 965, 966 (8th Cir. 2007). Defense attorneys removed the class action complaint to federal court but the district court remanded the class action to state court because the claims of the individual plaintiffs were less than $75,000; the state court then dismissed the class action complaint on the ground that the claims therein were preempted by federal law under the Cigarette Labeling and Advertising Act of 1965, 15 U.S.C. § 1331. Id. During the pendency of the state court appeal, the Eighth Circuit issued an opinion that held another tobacco company had established federal officer jurisdiction in a case involving the marketing of light cigarettes, id. (citing Watson v. Philip Morris Cos., 420 F.3d 852 (8th Cir. 2005), cert. granted, ___ U.S. ___, 127 S.Ct. 1055 (January 12, 2007); defense attorneys again removed the class action to federal court, arguing federal officer jurisdiction, _id._ Plaintiffs’ lawyer moved to remand the class action complaint to state court, arguing that the notice of removal was untimely, but the district court denied the motion. _Id._ The Circuit Court reversed.

Briefly, the class action complaint was filed in 2003 and timely removed to federal court; following remand, the trial court dismissed the class action and plaintiffs appealed. Dahl, at 966. On August 25, 2005, while the appeal from the dismissal of the class action complaint was pending, the Eighth Circuit issued its opinion in Watson holding that Philip Morris had established federal officer jurisdiction under 28 U.S.C. § 1442(a), and on September 22, 2005, defense attorneys removed the class action to federal court under § 1442(a). Id., at 967. Plaintiffs argued that the removal was untimely as it was not brought within the 30-day limit set forth in § 1442(b); the district court denied the motion, agreeing with the defense that “Watson made it clear for the first time that federal courts have jurisdiction over claims like those in this case and its receipt of that opinion recommenced the thirty day time period for removal.” Id.

Class Action Court Decisions Removal & Remand Uncategorized

FDCPA Class Action Defense Cases-Taylor v. Quall: California Federal Court Partially Grants Defense Motions To Strike And For Summary Judgment In Class Action Alleging FDCPA (Fair Debt Collection Practices Act) Violations

Federal Fair Debt Collection Practices Act (FDCPA) does not Authorize Injunctive Relief Against Debt Collectors, FDCPA One-Year Statute of Limitations Begins to Run no later than Date Debt Collector Files Suit Against Debtor, and Debt Collector need only Establish that Notice Required by § 1692g was Sent, not Received, California Federal Court

Plaintiff filed a putative class action against debt collector and its attorneys in California state court for alleged violations of the Fair Debt Collection Practices Act (FDCPA) and California’s equivalent statute known as the Rosenthal Fair Debt Collection Practices Act (California’s FDCPA). Defense attorneys removed the class action to federal court and moved to dismiss the California state-law claims arguing that they were barred by California’s litigation privilege; the district court agreed with the defense and dismissed those portions of the class action complaint. Taylor v. Quall, 471 F.Supp.2d 1053, 1056-57 (C.D. Cal. 2007). Defense attorneys then filed a motion to strike certain portions of the class action complaint, as well as a motion for summary judgment. Id., at 1055-56. The district court granted these motions in part, and granted the request of plaintiff’s lawyer for additional time to conduct discovery as to the FDCPA § 1692e claim in the class action complaint.

The class action arose from the following facts: a Plaintiff obtained a credit card from Citibank but stopped making payments on the card in early 2002. Citibank transferred the debt to defendant Unifund CCR Partners, and Unifund retained California attorney Matthew Quall to collect the debt. Taylor, at 1056. Quall sent plaintiff a collection letter in May 2005, and filed suit against plaintiff in June 2005; that lawsuit eventually settled, and Quall filed a request for dismissal without prejudice. Id. Plaintiff’s class action complaint was filed in July 2006 (mistakenly identified as 2005 in the court order), the claims of which the district court summarized at page 1056: “Plaintiff asserts that Quall (1) failed to provide the proper notice of debt required by 15 U.S.C. § 1692g when he began his collection efforts; (2) made false or misleading representations while negotiating the settlement in violation of § 1692e; (3) failed to fulfill the FDCPA’s standard for “meaningful” attorney involvement; and (4) violated the FDCPA by filing the Unifund Action without complying with California statutes governing suits brought on behalf of entities with fictitious business names.”

Class Action Court Decisions FDCPA Class Actions Uncategorized

ADA Class Action Defense Cases-Ligas v. Maram: Seventh Circuit Affirms Denial Of Request To Intervene In Class Action Under Federal Americans With Disabilities Act (ADA)

Proposed Intervenors in Class Action Under ADA (Americans with Disabilities Act) Failed to Establish Error in Denial of Leave to Intervene Seventh Circuit Holds

Plaintiffs filed a class action against the State of Illinois under the Americans with Disabilities Act (ADA) concerning “the proper way to provide care for the developmentally disabled”; specifically, whether the developmentally disabled are better served by institutionalized care or by integration into the community. Ligas v. Maram, 478 F.3d 771, 772-73 (7th Cir. 2007). Plaintiffs believed the latter, and filed suit designed “to hasten the state of Illinois down the road to community-based care,” id., at 773. Certain members of the proposed class, however, feared that they would be forced into community-based programs even if they preferred institutionalized care, so they petitioned the federal court for leave to intervene, either as of right or permissively. Id., at 773. Defense attorneys and plaintiffs in the class action opposed intervention; the district court denied leave to intervene and the proposed intervenors appealed. Id. The Court of Appeals affirmed, rejecting the effort to intervene in the class action.

With respect to the issue of intervention as of right, the Seventh Circuit defined the issues on appeal as “whether the action threatens to impair that interest and whether the parties fail to represent those interests adequately.” Ligas, at 774. The only possible impairment of proposed intervenors’ interests would be if they were no longer able to choose whether to receive institutionalized care, id. The district court found, however, that the class action complaint was “replete with language on choice,” id. The appellate court agreed, holding that nothing in the class action complaint would force community-based care upon those who desired institutionalized care. Id. With respect to adequate representation of their interests, the district court found proposed intervenors’ arguments to be “at best speculative, and at worst conclusory,” id. Again the Circuit Court agreed.

Class Action Court Decisions Uncategorized