Pioneer Electronics Class Action Case-California Supreme Court Holds Consumers Who Have Complained Of Product Defects Need Not Affirmatively Consent To Release Of Contact Information To Plaintiff’s Attorney Prosecuting Class Action Based On Those Defects

California Supreme Court Rejects Privacy Rights Arguments of Pioneer Electronics’ Defense Attorneys that Consumers Who Contacted Company and Complained about Product Defects Must Thereafter Affirmatively Consent to Release of Contact Information to Attorney Prosecuting Putative Class Action Involving the Same Product Defects In Consumers’ Complaints

Plaintiff filed a putative class action against Pioneer Electronics alleging defects in DVD player, seeking to represent “persons who purchased the same model of allegedly defective DVD player.” Pioneer Electronics v. Superior Court, 40 Cal.4th 360 (Cal. 2007) [Slip Opn., at 2]. During discovery, Pioneer revealed that it had received 700 – 800 consumer complaints concerning the same DVD player. Id. Plaintiff demanded the addresses and telephone numbers of the consumers who had complained; Pioneer objected asserting the right to privacy protected by the California Constitution. Id. (citing Cal. Const., Art. I, § 1). Ultimately the trial court ordered that a letter be sent to the complaining consumers advising them that their contact information would be disclosed to plaintiff’s attorney unless they affirmatively objected to such disclosure. Id., at 4. The California Court of Appeal reversed, granting Pioneer’s petition for writ of mandate to compel the trial court to vacate its order and require that consumers affirmatively consent to the release of their contact information. Id., at 4-5. The California Supreme Court reversed the decision of the appellate court, reinstating the trial court’s order.

The Supreme Court framed the issue as follows: “Does a complaining purchaser possess a right to privacy protecting him or her from unsolicited contact by a class action plaintiff seeking relief from the vendor to whom the purchaser’s complaint was sent?” Slip Opn., at 4. The Court noted that the decision of the Court of Appeal “would place the burden on the discovery proponent to obtain written authorization from each person whose privacy was to be invaded.” Id., at 9. In contrast, plaintiff’s attorney argued that “consumers who initially contacted Pioneer to express dissatisfaction with its product have a reduced expectation of privacy or confidentiality in the contact information they freely offered to Pioneer for the purpose, presumably, of allowing further communication regarding their complaints.” Id., at 6. The Supreme Court agreed, holding that “[r]evealing names, addresses and contact information on persons who have already complained about their Pioneer DVD players would not be particularly sensitive or intrusive.” Id., at 13.

Class Action Court Decisions Uncategorized

12 U.S.C. § 2614—Jurisdiction Of Courts And Statutes Of Limitation Under The Real Estate Settlement Procedures Act (RESPA)

As a resource for class action defense attorneys who defend against RESPA (Real Estate Settlement Procedures Act) class actions, we provide the text of RESPA. Congress provided for the jurisdiction of courts and for statutes of limitation for private rights of action under RESPA in 12 U.S.C. § 2614, which provides: § 2614. Jurisdiction of courts; limitations Any action pursuant to the provisions of section 2605, 2607, or 2608 of this title may be brought in the United States district court or in any other court of competent jurisdiction, for the district in which the property involved is located, or where the violation is alleged to have occurred, within 3 years in the case of a violation of section 2605 of this title and 1 year in the case of a violation of section 2607 or 2608 of this title from the date of the occurrence of the violation, except that actions brought by the Secretary, the Attorney General of any State, or the insurance commissioner of any State may be brought within 3 years from the date of the occurrence of the violation.

Statutes & Rules Uncategorized

12 U.S.C. § 2610–Prohibition Of Fees For Preparation Of Truth-In-Lending, Uniform Settlement, And Escrow Account Statements The Real Estate Settlement Procedures Act (RESPA)

For those class action defense attorneys who defend against RESPA (Real Estate Settlement Procedures Act) class actions, we provide here the text of the statute as a resource. RESPA prohibits lenders from charging borrowers certain fees in 12 U.S.C. § 2610, which provides as follows: § 2610. Prohibition of fees for preparation of truth-in-lending, uniform settlement, and escrow account statements No fee shall be imposed or charge made upon any other person (as a part of settlement costs or otherwise) by a lender in connection with a federally related mortgage loan made by it (or a loan for the purchase of a mobile home), or by a servicer (as the term is defined under section 2605(i) of this title), for or on account of the preparation and submission by such lender or servicer of the statement or statements required (in connection with such loan) by sections 2603 and 2609(c) of this title or by the Truth in Lending Act.

Statutes & Rules Uncategorized

Labor Law Class Action Lawsuits Again Hold Top Spot In Weekly Class Action Filings In California State And Federal Courts But Class Actions Alleging Violations Of Federal Fair And Accurate Credit Transactions Act Come In A Close Second

Defense attorneys in California faced the familiar wave of employment law class action cases last week, but FACTA (Fair and Accurate Credit Transaction Act) cases ran a close second. In an effort to assist 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.

Class Actions In The News Uncategorized

Class Action Defense Cases-In re Wachovia: Judicial Panel On Multidistrict Litigation (MDL) Grants Motion To Centralize Class Action Litigation And Selects Central District of California As Transferee Court

Judicial Panel Rejects Defense Request for Pretrial Coordination Pursuant to 28 U.S.C. § 1407 in the Southern District of New York and Agrees with Plaintiffs that Central District of California is Appropriate Court Several class action lawsuits were filed in New York, Florida, Illinois, Minnesota and Pennsylvania against Wachovia Corp., Wachovia Securities, First Union Securities and/or Prudential Equity Group alleging violations of the federal Fair Labor Standards Act (FLSA) and/or state labor laws for failure to pay overtime to securities brokers.

Class Action Court Decisions Multidistrict Litigation Uncategorized

Class Action Defense Cases-In re Long-Distance Telephone: Over Defense Objection Judicial Panel On Multidistrict Litigation (MDL) Grants Motion To Centralize Class Action Litigation In The District of the District of Columbia

Judicial Panel Rejects Defense Opposition to Request for Pretrial Coordination Pursuant to 28 U.S.C. § 1407 and Grants Motion for Centralization of Three Class Action Lawsuits Class action lawsuits were filed in California, Wisconsin and the District of Columbia, in addition to an action filed in the Court of Federal Claims, against the federal government and others seeking “reimbursement of the communications excise tax on long-distance telephone service, where the charge for such service was not based on the distance of the telephone call.

Class Action Court Decisions Multidistrict Litigation Uncategorized

Cavin v. Home Loan Class Action Defense Case: Illinois Federal Court Grants Defense Motion For Summary Judgment In Class Action Alleging Violations Of Federal Fair Credit Reporting Act (FCRA)

Mortgage-Offer Mailer Constituted a “Firm Offer of Credit” Under the FCRA (Fair Credit Reporting Act) Warranting Summary Judgment in Favor of Defense Illinois Federal Court Holds

Plaintiffs filed a class action against Home Loan Center for alleged violations of the federal Fair Credit Reporting Act (FCRA) alleging that impermissibly accessed credit reports for purposes of mailing out “pre-approval” mortgage flyers, three of which were mailed to plaintiffs. Cavin v. Home Loan Center Inc., 469 F.Supp.2d 561, 2007 WL 92509, *1 (N.D. Ill. 2007). Plaintiffs did not respond to the loan offers. Id., at *2. Defense and plaintiffs attorneys filed cross-motions for summary judgment; defense attorneys argued that the mailers constituted “firm offers of credit” under the FCRA thus entitling Home Loan Center to obtain the credit reports; plaintiffs argued that mailers did not constitute firm offers because they are too vague. Id., at *3. The district court granted the defense motion, denied the plaintiffs’ motion, and entered judgment in favor of Home Loan Center on the class action complaint.

We do not summarize here all of the language contained in the mailers or the details of the loan program at issue. Class action defense attorneys facing FCRA claims should review the opinion in its entirety in order to understand its full scope. Briefly, the mailers advertised a “SmartLoan” program and stated “This ‘prescreened’ offer of credit is based on information in your credit report indicating that you meet certain criteria.” Cavin, at *1. The mailers set forth “sample loan payments for loans ranging from $100,000 to $600,000.” Id. The reverse side of the mailers stated, “This offer may not be extended if, after responding to this offer, you do not meet the criteria used in the selection process. Further, HomeLoanCenter.com will verify income and employment, review credit, and analyze debt and your equity position in the subject property prior to final loan approval.” Id. Additionally, the mailers stated, “This advertisement does not constitute an offer to enter into an interest rate and/or discount prior agreement.” Id. The mailers were not firm commitments to make a loan, expressly stating “Not all applicants will be approved.”

Id., at *2.

In ruling on the cross-motions for summary judgment, the federal court observed that the parties did not dispute whether Home Loan Center had “express permission to access [plaintiffs’] credit reports,” Cavin, at *2. The class action turned “on whether the SmartLoan mailers constituted a ‘firm offer of credit'” under the FCRA. Id. Plaintiffs urged that the mailers were “vague and totally lacking in terms,” failed to “inform the consumer what is being offered,” and failed to disclose that the mortgage is a negative amortization loan. Id., at *2-*3. The defense countered that the mailers “offered a valuable and popular home mortgage loan worth hundreds of thousands of dollars” and that any missing terms were because mortgage loans “have features and terms that cannot be fixed in advance based solely upon data obtained from prescreening programs.” Id., at *3. Defense attorneys also argued that plaintiffs could not prove actual damages because they never sought or obtained a loan based on the mailers.Id.

Class Action Court Decisions FCRA Class Actions Uncategorized

Class Action Defense Cases-Taylor v. Quall: California Federal Court Grants Defense Motion To Dismiss Class Action Holding That Debt Collection Practices During Lawsuit Are Insulated By Litigation Privilege

California’s Litigation Privilege Bars Claims of Unfair Debt Collection Practices California Federal Court Holds

Plaintiff filed a putative class action in California state court alleging violations of the federal Fair Debt Collection Practices Act (FDCPA) and California’s equivalent statute, the Rosenthal Fair Debt Collection Practices Act (RFDCPA), and for violations of California’s unfair competition law (UCL), California Business & Professions Code section 17200 et seq. The lawsuit was premised on acts committed by defendants’ efforts to collect a debt Defense attorneys removed the class action to federal court, and filed a motion to dismiss two claims for relief. Taylor v. Quall, 458 F.Supp.2d 1065, 1065-66 (C.D. Cal. 2006). Defendants argued that their conduct was absolutely privileged because it was part of the lawsuit aimed at collecting the debt. Id., at 1066. The district court agreed with the defense and granted the motion.

Plaintiff’s class action complaint alleged the following. After plaintiff lost his job, he received several calls from people attempting to collect monies owed on his Citibank credit card account. Plaintiff advised these people that he was unemployed and would not pay the debt. Eventually, these collection efforts ended. However, defendants thereafter acquired the Citibank debt and filed a lawsuit against plaintiff seeking to collect the amounts owed. Plaintiff claims the lawsuit was time-barred and that defendants lacked standing. Plaintiffs further alleges that “Defendants improperly sought attorney’s fees and costs, and made multiple misrepresentations to Plaintiff until he ultimately settled the action.” Taylor, at 1066. As noted above, defense attorneys argued that any statements made during the course of the lawsuit fell within the scope of the litigation privilege, thus warranting dismissal under Rule 12(b)(6). The district court agreed.

Class Action Court Decisions FDCPA Class Actions Uncategorized

Class Action Defense Cases-Morgan v. Gay: Third Circuit Holds As Matter Of First Impression That Under CAFA (Class Action Fairness Act Of 2005) Defense Still Bears Burden Of Establishing Amount-In-Controversy

Federal Class Action Fairness Act of 2005 (CAFA) did not Shift Burden of Proving $5 Million Amount in Controversy to Plaintiff and Plaintiff’s “Damages-Limitation Provision” could be used to Avoid Federal Court Provided Plaintiff did not Thereafter Seek to Recover More than $5 Million Third Circuit Holds

Plaintiff filed a putative class action in New Jersey state court based on false advertising claims in the sale of the skin cream StriVectim-SD and asserting various state law claims. Morgan v. Gay, 471 F.3d 469, 471 (3d Cir. 2006). Defense attorneys removed the class action to federal court under the federal Class Action Fairness Act of 2005 (CAFA), and plaintiff moved to remand the class action to state court. Id. The district court granted the motion, concluding that defense attorneys had failed to establish CAFA’s $5,000,000 amount-in-controversy requirement, and the Third Circuit granted the defense leave to appeal. Id., at 471-72. As a matter of first impression in the Third Circuit, the Court of Appeals held that CAFA did not shift to plaintiff the burden of proving the amount in controversy for removal purposes, and affirmed the district court order remanding the class action to state court.

With respect to the amount in controversy, plaintiff’s class action complaint expressly stated that the damages sought in the action, including treble damages and punitive damages, “‘shall not [in total] exceed $5 million in sum or value.'” Morgan, at 471. The district court granted the motion to remand because the defense had not established that the amount in controversy met the $5 million threshold. Id. On appeal, the Third Circuit first addressed whether CAFA shifted the burden of establishing federal court jurisdiction from the defense to the plaintiff. Id., at 472. The Circuit Court agreed with defense attorneys that the legislative history evidenced a willingness to “switch the burden of proof from the party seeking removal to the party seeking remand,” id., but ultimately concluded – as a matter of first impression in the Third Circuit – that CAFA did not alter the time-honored burden of proof and held that “the party seeking to remove the case to federal court bears the burden to establish that the amount in controversy requirement is satisfied,” id., at 473.

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

In re Edward Jones Class Action Defense Case: California Federal Court Denies Motion To Remand Securities Class Action And Grants Defense Motion To Dismiss Finding Class Action Complaint Preempted By SLUSA

California Court Holds that Plaintiffs’ Procedural Objections to Removal are Waived as Untimely and that Federal Securities Litigation Uniform Standards Act (SLUSA) Preempted Class Action Claims Requiring Dismissal of Complaint

In 2004, plaintiffs filed a putative class action against Edward D. Jones & Co., one of the largest brokerages in the United States, for violations of California’s unfair competition laws (UCL) and breach of fiduciary duties alleging that it “entered into agreements with certain mutual fund companies whereby Defendant placed the companies on an internal ‘Preferred Funds’ list and received retention ‘kickbacks’ based on the amount of money held by Plaintiff and the Class members in those funds.” In re Edward Jones Holders Litig., 453 F.Supp.2d 1210, 1211 (C.D. Cal. 2006). Defense attorneys removed the action to federal court on the ground that the state law claims were preempted by the federal Securities Litigation Uniform Standards Act (SLUSA), but the district court granted plaintiffs’ motion to remand finding that SLUSA did not apply “because the alleged wrongdoing . . . was not ‘in connection with the purchase or sale of covered securities.'” Id., at 1212. Two years later, after the Supreme Court issued its opinion in Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Dabit, 548 U.S. —-, 126 S.Ct. 1503 (2006), defense attorneys removed the class action to federal court anew on the ground that Dabit “compels a finding that Plaintiffs’ claims are in fact preempted by SLUSA.” Id. Plaintiffs again moved to remand the complaint to state court, but the district court denied the motion.

First, the district court held that plaintiffs’ procedural objections to removal were waived because the motion to remand the class action to state court was untimely under 28 U.S.C. § 1447(c). In re Edward Jones, at 1212-13. Plaintiffs had argued that the removal was defective in two ways: (1) as untimely under 28 U.S.C. § 1446(b), and (2) as an improper “successive” notice predicated on the identical legal ground previously raised and rejected by the district court. Id., at 1212. An untimely notice of removal is a procedural defect, not a jurisdictional defect, id., at 1213 n.3 (citation omitted), and Rule 6(e) does not extend the time for filing a motion to remand so the motion – filed 32 days after removal – was untimely, id., at 1213.

Class Action Court Decisions PSLRA/SLUSA Class Actions Removal & Remand Uncategorized