CLASS ACTION DEFENSE BLOG
Welcome to Michael J. Hassen's Blog. Here you will find over 2,000 articles related to class actions.
Judicial Panel Grants Plaintiff Request, Unopposed by Defense and Supported by Plaintiffs in Other Cases, for Pretrial Coordination Pursuant to 28 U.S.C. § 1407 Numerous class action lawsuits were filed against several defendants alleging “[a] conspiracy to fix the price of Static Random Access Memory.” In re Static Random Access (SRAM) Antitrust Litig., 473 F.Supp.2d 1384, 1384-85 (Jud. Pan.Mult.Lit. February 9, 2007). Plaintiff’s lawyer in one of the class actions moved the Judicial Panel on Multidistrict Litigation (MDL) pursuant to 28 U.
Class Action Court Decisions Multidistrict Litigation Uncategorized
Read more...
A Hurricane is not an “Accident” under the Federal Multiparty, Multiforum Trial Jurisdiction Act (MMTJA) and Defense Failed to Prove that Individual was Fraudulently Joined for Purposes of Defeating Diversity Jurisdiction over Class Action Louisiana Federal Court Holds
Plaintiffs filed a putative class action in Louisiana state court against their homeowners insurance carrier, State Farm, alleging that it wrongfully denied insurance benefits for damage caused by Hurricane Katrina. Roby v. State Farm Fire & Cas. Co., 464 F.Supp.2d 572, 574 (E.D. La. 2006). Specifically, after plaintiffs provided State Farm evidence that Hurricane Katrina caused them to suffer more than $400,000 in damages, State Farm tendered a $23,000 check to plaintiffs representing its “estimated damages for their claim for damages to their home” and ultimately refused to pay plaintiffs’ claim in full or to pay policy limits because it concluded that “[plaintiffs’] home sustained flood damage from Hurricane Katrina and that flood damages are excluded from the policy.” Id. State Farm also denied personal contents benefits on the ground that flood damage excluded coverage, id., at 574 n.5. Plaintiffs countered that their home had sustained damage caused by rain that entered through holes in the roof caused by the hurricane, and filed a class action complaint for a declaratory judgment that the exclusion relied upon by State Farm did not apply and, alternatively, that their State Farm agent should have informed them to obtain flood insurance. Id., at 574-75. Defense attorneys removed the class action to federal court, asserting both federal question and diversity jurisdiction. Id., at 575 and n.6. As to diversity, defense attorneys argued that plaintiffs had named the State Farm agent solely to defeat diversity. Id. Plaintiffs filed a motion for remand. The district court granted plaintiffs’ motion and remanded the class action to state court.
After noting that State Farm bore the burden of proof as the party invoking federal court jurisdiction, Roby, at 575, the district court addressed State Farm’s argument that federal jurisdiction exists under the Multiparty, Multiforum Trial Jurisdiction Act (MMTJA) – “specifically 28 U.S.C. § 1369 . . . and its corresponding removal statute, 28 U.S.C. § 1441(e),” id. As the district court explained at pages 575 and 576, “Section 1369 is a federal statute that establishes subject matter jurisdiction in federal court over a single accident in which at least 75 persons died. Section 1441 allows a defendant to remove a § 1369 case to federal court. Congress enacted the MMTJA to allow full consolidation of state and federal cases related to a common disaster in order to eliminate multiple or inconsistent awards arising from multiforum litigation.” (Footnote and citations omitted.) The district court held that MMTJA did not apply because a hurricane is not an “accident” within the meaning of the Act, id., at 576.
Class Action Court Decisions Removal & Remand Uncategorized
Read more...
Class Action Against Car Manufacturer was a Catalyst Behind Recall Program thus Entitling Plaintiffs to Attorney Fee Award as “Prevailing Party” under California law New Jersey Federal Court Holds
In March 1994, following consumer complaints, the National Highway Traffic Safety Administration (NHTSA) opened an investigation into whether the Bendix 10 ABS had a safety-related defect warranting a recall. In October 1995 plaintiffs filed a putative class action against DaimlerChrysler for, inter alia, violations of the Magnuson-Moss Warranty Act, 15 U.S.C. § 2301, alleging that Chrysler vehicles equipped with Bendix 10 ABS were defective. And in April 1996, Chrysler voluntarily recalled vehicles equipped with Bendix 10 ABS, thereby ending the NHTSA’s investigation. Chin v. DaimlerChrysler Corp., 461 F.Supp.2d 279, 281 (D. N.J. 2006). But in March 1996, plaintiffs had amended their class action complaint to allege that Chrysler vehicles equipped with Bendix 9 ABS also were defective, as the product was “largely interchangeable [with the Bendix 10] and suffer[ed] from virtually identical defects.” Id. The NHTSA informed Chrysler in September 1996 that it would begin investigating customer complaints involving the Bendix 9 ABS, and soon thereafter the company voluntarily recalled vehicles equipped with Bendix 9 thereby ending the NHTSA investigation. Id.
Defense attorneys moved to dismiss the amended class action complaint, but the district court denied the motion in March 1997 and the following month Chrysler publicly announced its recall of vehicles with Bendix 9 ABS. Chin, at 281. However, defense attorneys successfully defeated plaintiffs’ effort to certify the lawsuit as a class action: in September 1998, the district court denied plaintiffs motion for class certification on the ground that plaintiffs had failed to demonstrate that common questions of law would predominate over individual issues, as required by Rule 23(b)(3), because the court would be required to apply the laws of 52 jurisdictions if a nationwide class were certified. Id., at 281-82. As the district court observed, “[f]or nearly all intents and purposes, Plaintiffs’ class-action came to an end” with the denial of the motion to certify a class action. Id., at 281.
Class Action Court Decisions Uncategorized
Read more...
Entity that Employed Significant Number of Putative Class Members was an Indispensable Party under Rule 19 of the Federal Rules of Civil Procedure and could not be Joined in Class Action Without Destroying Federal Court Diversity Jurisdiction thus Necessitating Dismissal of Class Action Complaint New York Court Holds
Plaintiff filed a putative class action against Clear Channel Communications and Clear Channel Broadcasting for violations of New York’s labor laws, alleging that defendants “made and continue to make unauthorized deductions from the wages of sales representatives for the New York radio stations that Defendants own and operate.” Mattera v. Clear Channel Communications, Inc., 239 F.R.D. 70, 71-72 (S.D.N.Y. 2006). Plaintiff invoked federal court jurisdiction solely on the basis of diversity, id., at 72. Defense attorneys moved to dismiss the class action complaint for failure to join an indispensable party, id.; the thrust of the defense motion was that the class action failed to name Capstar Radio Operating Company (the owner of the two radio stations where plaintiff worked) as a defendant, and that joinder of Capstar would eliminate diversity jurisdiction thereby compelling dismissal of the action, id., at 73. The district court agreed with the defense and dismissed the class action.
Plaintiff was a sales representative, selling advertising spots or on-air time for two of the 1200+ radio stations defendants own and operate. Mattera, at 72. Sales representatives were received biweekly draws against commissions earned on each sale. The commissions were to be “paid one month after the contract for a sale is executed and the advertising spot purchased is aired,.” But if the customer failed to pay for the service within 120 days then there would be a “charge back,” with the entire amount of the commission deducted from the employee’s next paycheck. According to the allegations in the class action complaint, the customer, “typically an advertising agency or corporation with a longstanding relationship with Defendants,” would pay the bill more than 120 days after service, but in such instances defendants would not reverse the charge back. Id.
Class Action Court Decisions Class Action Fairness Act (CAFA) Employment Law Class Actions Uncategorized
Read more...
Voluntary Payment Doctrine did not Apply where Plaintiff Could only get Copies of Hospital Records through Service Company and Plaintiff is an Adequate Class Representative if her Agent Requests and Pays for Hospital Records Illinois Court Holds
Plaintiff filed a putative class action against Smart Corporation, a company which contracted with hospitals to place its own employees on site to retrieve and copy hospital medical records for patients, alleging that it overcharged hospital patients for such services in violation of common law, Illinois’ Inspection of Hospital Records Act and Consumer Fraud and Deceptive Business Practices Act, and claiming also unjust enrichment. Ramirez v. Smart Corp., ___ Ill.App.3d ___ (Ill.App. February 16, 2007). Plaintiff’s lawyer sought class certification, and defense attorneys moved for summary judgment. Slip Opn., at 1-2. The trial court granted the defense motion and denied class certification.
Plaintiff had suffered an injury and received treatment at a hospital. As part of her workers compensation claim, plaintiff’s lawyer sought her hospital records. Smart retrieved and copied the records – consisting of 6 pages – and sent a bill for $34.78 itemized as follows: a basic fee of $15 and a $1 per page copy fee bringing the total photocopy charge to $21, a retrieval/search fee of $10, and shipping/handling fee of $3.78. Ramirez, at 2. Plaintiff’s law firm paid the bill before plaintiff reviewed it. Id., at 3. The trial court denied class certification and granted the defense motion for summary judgment. The court refused to certify a class action because it found plaintiff to be an inadequate class representative in that her lawyer had reviewed and paid the bill, not the plaintiff. Id., at 4. The court granted summary judgment in favor of the defense holding that plaintiff’s claims were barred by the voluntary payment doctrine, and additionally finding that the charges were not deceptive or unfair within the meaning of the Consumer Fraud Act and that plaintiff could not seek damages under the Hospital Records Act because that statute allows a patient to compel production of hospital records. Id.
Certification of Class Actions Class Action Court Decisions Uncategorized
Read more...
California defense attorneys will be confronted once again by a greater number of employment law class action cases than any other category, though public accommodation/ADA (Americans with Disabilities Act) and antitrust class action lawsuits came close to keeping law labor class actions out of the top spot for a second consecutive week. In an effort to assist the class action defense lawyer in anticipating the claims against which she or he 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.
Class Actions In The News Uncategorized
Read more...
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 provide for the preparation of a special information booklet to be given to borrowers at time of a loan application in § 3500.6, which provides:
§ 3500.6. Special information booklet at time of loan application
(a) Lender to provide special information booklet. Subject to the exceptions set forth in this paragraph, the lender shall provide a copy of the special information booklet to a person from whom the lender receives, or for whom the lender prepares, a written application for a federally related mortgage loan. When two or more persons apply together for a loan, the lender is in compliance if the lender provides a copy of the booklet to one of the persons applying.
(1) The lender shall provide the special information booklet by delivering it or placing it in the mail to the applicant not later than three business days (as that term is defined in § 3500.2) after the application is received or prepared. However, if the lender denies the borrower’s application for credit before the end of the three-business-day period, then the lender need not provide the booklet to the borrower. If a borrower uses a mortgage broker, the mortgage broker shall distribute the special information booklet and the lender need not do so. The intent of this provision is that the applicant receive the special information booklet at the earliest possible date.
Statutes & Rules Uncategorized
Read more...
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 provide for coverage of RESPA in § 3500.5, which provides:
§ 3500.5. Coverage of RESPA
(a) Applicability. RESPA and this part apply to all federally related mortgage loans, except for the exemptions provided in paragraph (b) of this section.
(b) Exemptions. (1) A loan on property of 25 acres or more.
(2) Business purpose loans. An extension of credit primarily for a business, commercial, or agricultural purpose, as defined by Regulation Z, 12 CFR 226.3(a)(1). Persons may rely on Regulation Z in determining whether the exemption applies.
(3) Temporary financing. Temporary financing, such as a construction loan. The exemption for temporary financing does not apply to a loan made to finance construction of 1- to 4-family residential property if the loan is used as, or may be converted to, permanent financing by the same lender or is used to finance transfer of title to the first user. If a lender issues a commitment for permanent financing, with or without conditions, the loan is covered by this part. Any construction loan for new or rehabilitated 1- to 4-family residential property, other than a loan to a bona fide builder (a person who regularly constructs 1- to 4-family residential structures for sale or lease), is subject to this part if its term is for two years or more. A “bridge loan” or “swing loan” in which a lender takes a security interest in otherwise covered 1- to 4-family residential property is not covered by RESPA and this part.
Statutes & Rules Uncategorized
Read more...
Judicial Panel Grants Unopposed Request for Pretrial Coordination Pursuant to 28 U.S.C. § 1407 but Agrees with Defense Attorneys and Non-Moving Plaintiffs that Class Actions Should be Centralized in Southern District of California Six class action lawsuits were filed against Morgan Stanley in Connecticut, Illinois, New Jersey, New York and Texas federal courts alleging violations of the federal Fair Labor Standards Act (FLSA) by misclassifying certain employees as exempt from overtime pay and/or by assessing improper deductions against employee compensation.
Class Action Court Decisions Multidistrict Litigation Uncategorized
Read more...
Whether Lender Violated TILA, RESPA or State’s Consumer Loan Act Irrelevant to Determination of Class Certification Motion because Plaintiffs Adequately Alleged such Violations Washington Federal Court Holds
Plaintiffs filed a class action against their lender NovaStar Mortgage for violations of Washington’s Consumer Protection Act (CPA) alleging that it failed to disclose it paid mortgage brokers a yield spread premium (YSP) in connection with their loans; the class action complaint was premised on NovaStar’s purported failure to provide written disclosures required by the federal Real Estate Settlement Procedures Act (RESPA), the federal Truth in Lending Act (TILA), Washington’s Consumer Loan Act (CLA), and the plaintiffs’ deeds. Pierce v. NovaStar Mortgage, Inc., 238 F.R.D. 624, 625 (W.D. Wash. 2006). In response to plaintiffs’ first motion to certify the lawsuit as a class action, the district court agreed with defense attorneys that plaintiffs had failed to demonstrate numerosity or typicality as required by Rule 23(a) and also failed to establish the predominance and superiority elements required by Rule 23(b); it therefore denied the motion, but did so without prejudice. Id. On plaintiffs’ renewed motion for class certification, the court rejected defense objections and granted the motion.
By way of background, to establish a violation of the CPA one must prove “(1) an unfair or deceptive act or practice; (2) occurring in trade or commerce; (3) that impacts the public interest; (4) and causes injury to the plaintiff in his or her business or property; and (5) such injury is causally linked to the unfair or deceptive act.” Pierce, at 626 (citation omitted). A plaintiff may satisfy the first two elements by proving that the act in question is a per se unfair trade practice: “A per se unfair trade practice exists when, by statute, the Legislature declares an unfair or *627 deceptive act in trade or commerce and the statute has been violated.” Id., at 626-27 (citations omitted). Under Washington law, “[a] violation of the CLA . . . is explicitly deemed a violation of the first and second elements of the CPA,” id., at 627 (citation omitted). In denying the first motion for class certification, the district court believed that “verbal disclosures and independent knowledge of the YSP were relevant to determining whether NovaStar violated the CPA.” Id., at 626. Plaintiffs’ lawyers disagreed, arguing in the renewed motion that “verbal disclosures are irrelevant to class certification because they seek to establish a per se violation of the Consumer Protection Act by proving that NovaStar violation the Consumer Loan Act.” Id.
Certification of Class Actions Class Action Court Decisions RESPA/TILA Class Actions Uncategorized
Read more...