Hartford Class Action Defense Cases-Hartford v. Beaver: Florida Law Requires Insurer Defend Against Claims Of Putative Class Members Even Before Class Action Is Certified Eleventh Circuit Holds

Circuit Court Reverses Judgment for Insurer and Holds that Florida Law Requires Insurers to Defend Against Class Action Lawsuits Before Certification Even if the Only Potentially Covered Claims Involve Members of the Putative Class

Two individuals filed a putative class action against defendants, operators of nursing home facilities, alleging breach of fiduciary duties owed nursing home residents “to provide necessary care, services, and supplies required for their health and well-being.” Hartford Acc. & Indemn. Co. v. Beaver, 446 F.3d 1289, 2006 WL 2933939, *1 (11th Cir. 2006). Plaintiff Estate of Ayres lived in a nursing home from 1986 until his death in 1995; plaintiff Garrison resided in the same nursing home from 1993 until 1997. Hartford defended the class action under a reservation of rights based on a general liability policy that covered the time period from 1987-1992. Id. Hartford then filed suit against defendants seeking a declaration that it owed no duty to defend, and sought summary judgment on its complaint. While the motion was pending, Ayres’ estate settled with defendants and withdrew as a party-plaintiff, leaving Garrison as the sole class representative in the class action. Id. The federal district court granted Hartford’s motion because Garrison’s claim was outside the policy period. While the claims of putative class members fell within the Hartford 1987-1992 insurance policy period, the court concluded that Hartford did not owe a duty to defend against those class action claims “until such time as that class is certified pursuant to Florida Rule of Civil Procedure 1.220.” Id., at *2. The district court explained, “a class must be certified before a claim may be maintained on its behalf” and that prior to certification “there is no class action claim to defend against.” Id. Defense attorneys appealed and the Eleventh Circuit reversed.

Class Action Court Decisions Uncategorized

15 U.S.C. § 77f–Registration Of Securities 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. The statutory provisions for the registration of securities is set forth in 15 U.S.C. § 77f, which provides:

§ 77f. Registration of securities

(a) Method of registration

Any security may be registered with the Commission under the terms and conditions hereinafter provided, by filing a registration statement in triplicate, at least one of which shall be signed by each issuer, its principal executive officer or officers, its principal financial officer, its comptroller or principal accounting officer, and the majority of its board of directors or persons performing similar functions (or, if there is no board of directors or persons performing similar functions, by the majority of the persons or board having the power of management of the issuer), and in case the issuer is a foreign or Territorial person by its duly authorized representative in the United States; except that when such registration statement relates to a security issued by a foreign government, or political subdivision thereof, it need be signed only by the underwriter of such security. Signatures of all such persons when written on the said registration statements shall be presumed to have been so written by authority of the person whose signature is so affixed and the burden of proof, in the event such authority shall be denied, shall be upon the party denying the same. The affixing of any signature without the authority of the purported signer shall constitute a violation of this subchapter. A registration statement shall be deemed effective only as to the securities specified therein as proposed to be offered.

Statutes & Rules Uncategorized

15 U.S.C. § 77e–Prohibitions Relating To Interstate Commerce And The Mails 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. In 15 U.S.C. § 77e, Congress set forth the prohibitions relating to interstate commerce and the mails in conjunction with securities:

§ 77e. Prohibitions relating to interstate commerce and the mails

(a) Sale or delivery after sale of unregistered securities

Unless a registration statement is in effect as to a security, it shall be unlawful for any person, directly or indirectly–

(1) to make use of any means or instruments of transportation or communication in interstate commerce or of the mails to sell such security through the use or medium of any prospectus or otherwise; or

(2) to carry or cause to be carried through the mails or in interstate commerce, by any means or instruments of transportation, any such security for the purpose of sale or for delivery after sale.

(b) Necessity of prospectus meeting requirements of section 77j of this title

It shall be unlawful for any person, directly or indirectly–

Statutes & Rules Uncategorized

Employment Law Class Action Cases Lead Weekly California Filings Facing Defense Attorneys But Unfair Competition/Unfair Business Practice (UCL) Class Action Filings Run A Close Second

To aid California class action defense attorneys in anticipating claims against which they may have to defend, we provide weekly an unofficial summary of 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 October 13 – October 19, 2006. We include only those categories that boast 10% or more of the class action filings during the relevant timeframe.

Class Actions In The News Uncategorized

Bell v. Acxiom-Class Action Defense Cases: Federal Court Grants Defense Motion To Dismiss Class Action Based On “Increased Risk” Of Identity Theft And Receiving Junk Mail Because Plaintiff Lacked Standing

Arkansas Federal Court Agrees with Defense that Plaintiff Failed to Establish Injury-in-Fact and Therefore Lacked Standing to Prosecute the Putative Class Action

Plaintiff filed a putative class action in federal court against Acxiom after a computer hacker compromised the files that the company maintained on its corporate clients, alleging that “Acxiom’s lax security jeopardized her privacy and left her at a risk of receiving junk mail and of becoming a victim of identity theft.” Bell v. Acxiom Corp., ___ F.Supp.2d ___, 2006 WL 2850042 (E.D. Ark. October 3, 2006). Defense attorneys moved to dismiss the class action complaint on the ground that plaintiff lacked standing to prosecute the action. The district court agreed and granted the motion to dismiss.

“Acxiom is a data bank that stores marketing information about its clients’ customers. Acxiom takes this information and ‘match[es] names with lifestyles and demographic information from other sources . . . [to] give . . . [its] client a clear picture of the people buying its products and services.’” Slip Opn., at 1. A computer hacker exploited a weakness in the company’s computer system, downloaded data and sold it to a marketing company who used the names and addresses for direct mail advertising. Plaintiff’s class action alleged that she and others were “at a higher risk of receiving junk mail and of being an identity theft victim” because “Acxiom failed to protect its clients’ data.” Id., at 2. Defense attorneys argued that plaintiff lacked standing because she had not established injury in fact; the court agreed.

Class Action Court Decisions Uncategorized

Alvarez v. May Department Stores-Class Action Defense Cases: California Court Holds That Demurrer To Class Action Allegations Is Proper And Defense Theory Of Collateral Estoppel Properly Applied In Sustaining Demurrer To Overtime Class Action Claims

California Trial Court Properly Applied Collateral Estoppel Principles in Ruling on Demurrer to Class Action Allegations Because Denial of Class Certification in Separate Lawsuit Binds Absent Putative Members of Class

Plaintiffs’ lawyer filed three class action complaints against May Department Stores in various California superior courts that alleged, in part, class action claims for failure to pay overtime to area sales managers: the 1997 Gorman case filed in Los Angeles; the 1999 Duran case filed in San Bernardino; and the 2003 Alvarez case filed in Los Angeles. Alvarez v. May Dept. Stores Co., ___ Cal.App.4th ___, 49 Cal.Rptr.3d 892, 2006 WL 2874907 (Cal.App. October 11, 2006) [Slip Opn., at 3-4.]. In the _Alvarez_ lawsuit, defense attorneys demurred to the class action allegations on the ground of collateral estoppel; the trial court agreed that the doctrine applied and sustained the demurrer to the class action claims without leave to amend. Plaintiffs argued on appeal “that the doctrine of collateral estoppel is inapplicable to an order denying class certification in another lawsuit brought by other plaintiffs because absent putative class members are not bound prior to the certification of a class”; the appellate court rejected this argument and affirmed. _Id._, at 2.

The appellate court briefly summarized the history of the Gorman and Duran litigation, explaining that the trial court denied class action status in Gorman because “plaintiffs had failed to demonstrate a community of interest or an ascertainable class and that the proposed class representatives were unsuitable because they had unsatisfactory employment histories,” Alvarez, at 3, and that trial court order denying class action status in Duran was affirmed on appeal because the interests of the class members were dissimilar and “[c]ommon questions of fact could not predominate,” id., at 4. In Alvarez, defendant demurred “on the grounds that an order denying class certification of the same class was issued in Duran and thus [plaintiffs] were barred from relitigating the issue under the doctrine of collateral estoppel.” Id.

Preliminarily, the Court of Appeal quickly disposed of the claim that class certification issues may not be resolved by demurrer, holding that “[t]rial courts properly and routinely decide the issue of class certification on demurrer.” Alvarez, at 5-6 (italics added).

Certification of Class Actions Class Action Court Decisions Uncategorized

Dunbar v. Albertson’s-Class Action Defense Cases: Certification Of Employment Class Action Seeking Overtime Pay On Theory That Employer Misclassified Employees As Exempt Properly Denied California Court Holds

California Trial Court Properly Engaged in “Weighing Process” to Determine Commonality of Class Action Claims and Correctly Refused to Certify Class Action Because Individual Issues would Predominate

Plaintiff, a grocery manager at Albertson’s, filed a putative class action seeking overtime compensation on the theory that Albertson’s erroneously classified him as an exempt executive employee. Defense attorneys objected to certification of the class action on the grounds that individualized issues of liability and damages would predominate. Dunbar v. Albertson’s, Inc., 141 Cal.App.4th 1422, 1424-25 (Cal.App. 2006). The trial court agreed with the defense, and refused to certify the lawsuit as a class action. The appellate court affirmed.

Plaintiff’s motion for class certification consisted of more than 60 virtually identical declarations of grocery managers stating that the great majority of their work time was spent in the allegedly non-managerial tasks of walking the floor to verify that inventory was properly stocked, stocking shelves, organizing the stock room, unloading new merchandise, responding to customer questions, cashiering, putting price tags on items, checking inventory, and doing routine paperwork. Dunbar, at 1424-25. In opposition, defense attorneys submitted excerpts of deposition testimony from plaintiff’s declarants, and filed 79 declarations of grocery managers – many of whom had executed declarations for the plaintiff – that described “in varied terms their allegedly executive work at different stores.” Id., at 1425. “This evidence was accompanied by a chart outlining how the deposition testimony and counter-declarations differed from the declarations plaintiff submitted. Defendant also presented statistics on the varying amounts of time plaintiff’s declarants spent working cash registers each week during the period from July 2004 through April 2005.” Id.

Certification of Class Actions Class Action Court Decisions Uncategorized

Pennsylvania Jury Finds Wal-Mart Liable In Employee Overtime/Rest Breaks Class Action Case And Awards $78 Million In Damages Plus Attorney Fees

Defense Attorneys Plan to Appeal Jury Verdict that Wal-Mart Failed to Provide Employees with Rest Breaks and Overtime, and that Wal-Mart Acted in Bad Faith

The jury is in on a labor law class action on behalf of 187,000 Wal-Mart and Sam’s Club employees brought in Pennsylvania state court. The lawsuit alleged that employees were not provided rest breaks and were required to work “off the clock,” depriving them of overtime pay. The jury awarded $78.5 million in damages, and that figure may be dramatically increased because the jury also found that Wal-Mart acted in bad faith, opening the door to an additional $62 million in damages, according to plaintiffs’ lawyers. The jury agreed with defense attorneys that Wal-Mart had not forced employees to work through meal breaks. Several news sources have reported on the verdict, including Steven Greenhouse of the New York Times and James Covert of the Wall Street Journal.

Class Actions In The News Employment Law Class Actions Uncategorized

IBM Class Action Defense Case-Syverson v. IBM: General Release And Covenant Not To Sue Created Confusion In Employee Layoff Agreement Rendering Waiver Of ADEA Claims Unenforceable Ninth Circuit Holds

Ninth Circuit Reverses District Court Judgment Enforcing Employee Waiver of ADEA Claims Because Language was not “Written in a Manner Calculated to be Understood by an Average Individual Selected by IBM for Employment Termination” and so was not “Knowing and Voluntary”

A putative class action was filed against IBM based on the allegation that an employee layoff program violated the federal Older Workers Benefit Protection Act (OWBPA) and the federal Age Discrimination in Employment Act (ADEA). Syverson v. International Business Machines Corp., 461 F.3d 1147, 1149-50 (9th Cir. 2006). Defense attorneys moved to dismiss the class action complaint based on the executed wavier of ADEA claims and covenant not to sue signed by the plaintiffs as part of the layoff program. Id., at 1150. The district court granted the defense motion to dismiss the class action, but the Ninth Circuit reversed.

In 2001, as part of a workforce reduction plan, IBM offered employees that had been selected for termination severance pay and benefits if they executed a “Microelectronics Resource Action (MERA) General Release and Covenant Not To Sue.” Syverson, at 1149. Plaintiffs filed age discrimination charges with the Equal Employment Opportunity Commission; the EEOC dismissed the charges because it found that “the MERA Agreement satisfies the OWBPA’s minimum requirements for ‘knowing and voluntary’ waiver of ADEA rights and claims and is enforceable, thus depriving the employees of their right to pursue their age discrimination claims.” Id., at 1150. The EEOC issued plaintiffs notices of right to sue, and they commenced a putative class action challenging, in part, “the MERA Agreement’s use of both a release covering ADEA claims and a covenant not to sue excepting them, the pairing of which allegedly caused confusion over whether ADEA claims were excepted from the release.” Id.

Class Action Court Decisions Employment Law Class Actions Uncategorized

Camacho v. Automobile Club-Class Action Defense Cases: Defense Motion For Judgment On The Pleadings With Respect To Unfair Business Practice Claims In Class Action Complaint Properly Granted California Court Holds

California’s Unfair Competition Law (UCL) was not Violated by Efforts of Insurers and Collection Company to Collect Money from Uninsured Motorist who Caused Accident

An uninsured driver filed a putative class action against various defendants arising from their efforts to collect amounts that he owed for rear-ending an insured driver. The trial court sua sponte recast as a motion for judgment on the pleadings the demurrer filed by defense attorneys to the unfair business practice claims premised on California’s Business & Professions Code section 17200. The trial court then granted the judgment on the pleadings as to the UCL claims in the class action complaint, and the Court of Appeal affirmed. Camacho v. Automobile Club of Southern California, ___ Cal.App.4th ___, 48 Cal.Rptr.3d 770 (Cal.App. September 14, 2006).

Briefly, plaintiff rear-ended an insured driver whose carrier paid the claim and assigned its rights against plaintiff to a collection company. Plaintiff paid $500 of the roughly $9400 he owed, and then filed his class action lawsuit alleging violations of California’s unfair competition law (UCL), Business & Professions Code section 17200, arising out of the efforts of the collection company to recover money due the insurers. In part the class action challenged letters sent by the collection company, but the complaint also alleged unfair business practices unrelated to those letters. Camacho, at 771-73. The appellate court summarized the claims based on the letters at page 773 as follows:

Class Action Court Decisions Uncategorized