Morales-Arcadio v. Shannon Produce Class Action Defense Case: Defense Rule 68 Offer Of Judgment Served Prior To Opt-In Deadline For Class Action Under Fair Labor Standards Act (FLSA) Is Invalid Georgia Federal Court Holds

Georgia Federal District Court Holds that Offers of Judgment in FLSA (Fair Labor Standards Act) Class Action Cannot be made Prior to Expiration of Opt-In Period Because Rule 68 Requires that Offer be made on Adverse Parties and Class Members are not “Fully Identifiable” Until Opt-In Period Ends

Plaintiffs filed a putative class action on behalf of migrant farm workers against Shannon Produce Farms in July 2005 alleging violations of the Fair Labor Standards Act (FLSA), and in November 2005 they filed a motion for certification of a FLSA collective action pursuant to 29 U.S.C. § 216(b), which the district court granted. Morales-Arcadio v. Shannon Produce Farms, 237 F.R.D 700, 701 (S.D. Ga. 2006). Prior to the “opt-in” deadline for class members to join the class action, defense attorneys served an offer of judgment pursuant to Rule 68 of the Federal Rules of Civil Procedure. Id. Plaintiffs’ lawyer moved to invalidate the offer of judgment. The district court summarized the competing arguments at page 701 as follows:

Plaintiffs contend that defendants’ offer of judgment is improper since defendants served it during the time period provided by the Court for other similarly-situated plaintiffs to join the instant FLSA collective action. . . . Plaintiffs argue, inter alia, that the offer short-circuits the collective action process, has no legal effect since it purports to extend to workers who are not parties to the action, and moots the certified collective action and court-authorized notice. . . . Defendants have filed an opposition to the motion contending that plaintiffs’ motion is premature since a motion to strike an offer of judgment is only proper at the conclusion of a case. . . . Defendants also contend that their offer of judgment is proper since it specifically contemplates and provides a recovery for additional opt-in plaintiffs who join the action by the opt-in deadline. . . . (Footnote omitted)

Class Action Court Decisions Employment Law Class Actions Uncategorized

Cigna Defense Against Shareholder Class Action Reportedly Will End With $93 Million Settlement

A proposed settlement has been reached in a class action lawsuit against Cigna Corp., filed in 2002 and scheduled to go to trial in March 2007 in the United States District Court in Philadelphia. The lawsuit arose from a computer problem that allegedly cost the company one-third of its customers as a result of major problems in the handling of insurance claims. Cigna allegedly hid the problems from investors, and the stock plunged when word of the computer problems hit the street.

Class Actions In The News Uncategorized

Indicted Class Action Plaintiff Law Firm Milberg Weiss Loses Named Partner Schulman To “New Ventures” And To Preparation Of Criminal Defense

After 20 Years of Class Action Securities Litigation at Milberg Weiss, Indicted Named Partner Steve Schulman Resigns to Focus on Defense of Criminal Charges Julie Creswell of the New York Times reported yesterday that class action plaintiff law firm Milberg Weiss Bershad & Schulman suffered a devastating blow last Friday: Steven G. Schulman, indicted in May 2006 for his part in the alleged payment of $11 million to three individuals who served as plaintiffs in more than 150 lawsuits, resigned from the law firm after 20 years of class action securities litigation.

Class Actions In The News Uncategorized

15 U.S.C. § 77w and 77x–Unlawful Representations And Penalties Under The Securities Act Of 1933

As a resource for the class action defense lawyer who defends against securities class actions, we provide the text of the Securities Act of 1933. Congress provided for unlawful representations and for penalties under the Act in 15 U.S.C. § 77w and § 77x, respectively, which provide: § 77w. Unlawful representations Neither the fact that the registration statement for a security has been filed or is in effect nor the fact that a stop order is not in effect with respect thereto shall be deemed a finding by the Commission that the registration statement is true and accurate on its face or that it does not contain an untrue statement of fact or omit to state a material fact, or be held to mean that the Commission has in any way passed upon the merits of, or given approval to, such security.

Statutes & Rules Uncategorized

15 U.S.C. § 77u and 77v–Hearings By Commission And Jurisdiction Of Offenses And Suits Under The Securities Act Of 1933

As a resource for the class action defense lawyer who defends against securities class actions, we provide the text of the Securities Act of 1933. Congress provided that all hearings by the Commission shall be public in 15 U.S.C. § 77u, and provided for jurisdiction over offenses and suits in 15 U.S.C. § 77v. Those statutes provide in full:

§ 77u. Hearings by Commission

All hearings shall be public and may be held before the Commission or an officer or officers of the Commission designated by it, and appropriate records thereof shall be kept.

§ 77v. Jurisdiction of offenses and suits

(a) Federal and State courts; venue; service of process; review; removal; costs

The district courts of the United States and the United States courts of any Territory shall have jurisdiction of offenses and violations under this subchapter and under the rules and regulations promulgated by the Commission in respect thereto, and, concurrent with State and Territorial courts, except as provided in section 77p of this title with respect to covered class actions, of all suits in equity and actions at law brought to enforce any liability or duty created by this subchapter. Any such suit or action may be brought in the district wherein the defendant is found or is an inhabitant or transacts business, or in the district where the offer or sale took place, if the defendant participated therein, and process in such cases may be served in any other district of which the defendant is an inhabitant or wherever the defendant may be found. Judgments and decrees so rendered shall be subject to review as provided in sections 1254, 1291, 1292, and 1294 of Title 28. Except as provided in section 77p(c) of this title, no case arising under this subchapter and brought in any State court of competent jurisdiction shall be removed to any court of the United States. No costs shall be assessed for or against the Commission in any proceeding under this subchapter brought by or against it in the Supreme Court or such other courts.

Statutes & Rules Uncategorized

United States Supreme Court Grants Defense Petitions For Writs Of Certiorari In Antitrust Class Action And Sherman Act Cases

Supreme Court to Address Investment Bank and Institutional Investor Liability in Underwriting IPOs, and Per Se Rule that Resale Price Maintenance Violates Sherman Act Linda Greenhouse of the New York Times reports that the United States Supreme Court had accepted defense petitions for writs of certiorari in “two important antitrust cases” and that the opinions should clarify areas of law “that have increasingly become unsettled.” One of the antitrust cases, Credit Suisse First Boston v.

Class Actions In The News Uncategorized

Class Action Defense Lawyers Again Confront More Labor Law Claims In California Weekly Class Action Filings But Significant Number Of Antitrust And Unfair Business Practice Class Action Lawsuits Also Filed

To allow class action defense lawyers anticipate claims against which they may have to defend, we provide weekly, unofficial summaries of the legal categories for 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. This report covers the time period from December 1 – December 7, 2006. Employment law class action cases yet again hold the top spot on the list.

Class Actions In The News Uncategorized

Class Action Defense Cases-In re Seroquel: Judicial Panel On Multidistrict Litigation (MDL) Rejects Defense Opposition To Centralization Of Class Action Suits Involving Seroquel But Grants Co-Defense Request To Limit Order To AstraZeneca

Judicial Panel Grants Request for Pretrial Coordination of Products Liability Class Action Lawsuits Pursuant to 28 U.S.C. § 1407 Over AstraZeneca Defense Objection but Grants Johnson & Johnson/Eli Lilly Defense Request to Separate and Remand Class Action Claims Against Them for Lack of Common Questions of Fact More than 120 federal court lawsuits, many of them class actions, against various pharmaceutical companies alleging that AstraZeneca’s Seroquel, an atypical antipsychotic medication, can cause diabetes and related disorders.

Class Action Court Decisions Multidistrict Litigation Uncategorized

Mitchell-Tracey v. United General: Class Action Defense Case–Maryland Federal Court Rejects Defense Opposition And Certifies Class Action By Mortgagors Against Title Insurers For Alleged Overcharging

District Court Certifies Class Action Against Title Insurers for Allegedly Charging Premiums in Excess of State-Approved Rates

Plaintiffs filed a class action against First American Title and United General Title in Maryland state court alleging that, in connection with refinances, the insurers charged higher premiums than permitted by law. Defense attorneys removed the class action to federal court, and plaintiffs moved for class certification of two classes, one involving First American customers and one involving United General customers. Mitchell-Tracey v. United General Title Ins. Co., 237 F.R.D. 551, 553-55 (D. Md. 2006). The defense vigorously opposed class certification on four grounds, which the district court summarized as follows: (1) records do not exist by which plaintiffs could prove class membership, liability or damages; (2) specific fact questions present in each affected transaction will predominate over individual issues; (3) the calculation of monetary damages for class members will be “highly individualized and is neither typical nor common among all class members”; and (4) the parties will be unable to identify class members because the necessary records are “in the possession of hundreds of independent title insurance agents and the task of compiling such information to adequately determine class membership is virtually impossible.” Id., at 555. The court disagreed with defense arguments and certified the matter to proceed as a class action, concluding that “Application of the principles embodied in Rule 23 to the circumstances of this case compels the conclusion that the class action device is wholly appropriate.” Id., at 556.

As is common, Maryland law requires title insurers to file with the state information concerning rates and premiums to be charged in connection with the issuance of title insurance policies, and to charge only those rates approved by the state. Mitchell-Tracey, at 553 (citations omitted). Though not required by Maryland law, First American and United General also filed with the state discounted “reissue rates,” applicable if borrowers meet certain conditions. Id., at 554. The class action complaint alleged that defendants charged fees in excess of the reissue rates filed with and approved by the state, and sought declaratory relief and monetary damages. Id.

Certification of Class Actions Class Action Court Decisions Uncategorized

Huge Class Action Defense Victory As Second Circuit Court Of Appeals Reverses Federal District Court Order Certifying Class Action Against Wall Street Banks In Largest Securities Class Action Ever

Julie Creswell of the New York Times reports today on the decision of the United States Court of Appeals for the Second Circuit reversing a district court order certifying a class action against hundreds of Wall Street banks. The 51-page decision concerned a district court order in In re Initial Public Offering Securities Litig., ___ F.3d ___ (2nd Cir. December 6, 2006), granting a motion to certify a class action in “six focus cases out of 310 consolidated class actions, which themselves were consolidations of thousands of separate class actions alleging securities law violations in connection with public offerings.

Class Actions In The News Uncategorized