Labor Law Class Action Claims On The Rise

In an article entitled, “Defending and Preventing Class Actions Alleging Labor Law Violations,” I noted that labor law class actions are on the rise. This opinion was founded solely upon personal experience. A recent article by Kris Maher of the Wall Street Journal adds an objection basis supporting my subjective opinion. Maher observes that “[w]orkers are filing more lawsuits against employers they accuse of violating fair-wage laws that govern overtime and minimum pay.

Class Actions In The News Uncategorized

Indictment of Class Action Firm Implicates Special Problems With Governmental Requests for Waiver of Attorney-Client Privilege

Class action plaintiff firm Milberg Weiss Bershad & Schulman LLP was indicted in mid-May 2006 by federal prosecutors in Los Angeles, together with two of the firm’s top partners, David Bershad and Steven Schulman. Leigh Jones of The National law Journal reported yesterday that the government practice of demanding waivers of attorney-client communications in white-collar criminal cases raises “an especially prickly problem” in the Milberg Weiss case. Even before the class action firm’s indictment, some attorneys – defense and plaintiff – expressed concern about government prosecutors conditioning leniency on a corporate defendant’s willingness to waive the attorney-client privilege.

Class Actions In The News Uncategorized

Class Action Law Firm Losing Lawyers As Well As Clients

Milberg Weiss has been in the news frequently as of late. Following the indictment of the class action law firm and two of its partners, some of the firm’s clients elected to retain new counsel to prosecute their class actions. Now, Nathan Koppel and Peter Lattman report that partners are jumping ship as well. According to the article, “eight of the firm’s 46 partners have announced their departure, along with some associates.

Class Actions In The News Uncategorized

Class Action Defense Issues: 30 Day Time Limit On Removal to Federal Court – 28 U.S.C. § 1446

28 U.S.C. § 1446 – 30 day Time Limit

Class action defendants often benefit if they can remove the case to federal court if possible. CAFA (Class Action Fairness Act of 2005) was enacted to greatly expand access to federal courts in class action cases. Removal of cases to federal court generally is governed by 28 U.S.C. §1446. CAFA is discussed in a separate article.

The procedure for removal is set forth in 28 U.S.C. § 1446. As a general rule the defendant must remove the case to federal court within 30 days of receipt of the complaint or “a copy of an amended pleading, motion, order or other paper from which it may first be ascertained that the case is one which is or has become removable,” 28 U.S.C. § 1446(b). However, if the basis of removal is diversity jurisdiction, then the matter may not be removed more than one year after the lawsuit was filed. Id. Section 1446 provides in part:

(a) A defendant or defendants desiring to remove any civil action or criminal prosecution from a State court shall file in the district court of the United States for the district and division within which such action is pending a notice of removal signed pursuant to Rule 11 of the Federal Rules of Civil Procedure and containing a short and plain statement of the grounds for removal, together with a copy of all process, pleadings, and orders served upon such defendant or defendants in such action.

(b) The notice of removal of a civil action or proceeding shall be filed within thirty days after the receipt by the defendant, through service or otherwise, of a copy of the initial pleading setting forth the claim for relief upon which such action or proceeding is based, or within thirty days after the service of summons upon the defendant if such initial pleading has then been filed in court and is not required to be served on the defendant, whichever period is shorter.

If the case stated by the initial pleading is not removable, a notice of removal may be filed within thirty days after receipt by the defendant, through service or otherwise, of a copy of an amended pleading, motion, order or other paper from which it may first be ascertained that the case is one which is or has become removable, except that a case may not be removed on the basis of jurisdiction conferred by section 1332 of this title more than 1 year after commencement of the action.

Removal & Remand Uncategorized

Harris v. Bankers Life: Duty of Inquiry to Determine Removability to Federal Court

28 U.S.C. §1446 and Issues Related to Class Action Defense

Class action defendants often benefit if they can remove the case to federal court if possible. CAFA (Class Action Fairness Act of 2005), discussed in a separate article, was enacted to greatly expand access to federal courts in class action cases. Removal of cases to federal court generally is governed by 28 U.S.C. §1446.

As a general rule the defendant must remove the case to federal court within 30 days of receipt of the complaint or “a copy of an amended pleading, motion, order or other paper from which it may first be ascertained that the case is one which is or has become removable,” 28 U.S.C. § 1446(b) (italics added). The 30-day time limit on removal is discussed in a separate article.

This issue here discussed is whether a defendant is under a duty to inquire into the existence of jurisdictional facts. The Circuit Courts are split on this issue. This article discusses the recent Ninth Circuit opinion on the topic, Harris v. Bankers Life & Cas. Co., 425 F.3d 689 (9th Cir. 2005). Harris is important because it rejects both Moore’s Federal Practice treatise and the Tenth Circuit’s interpretation of a prior Ninth Circuit opinion, Cantrell v. Great Republic Ins. Co., 873 F.2d 1249 (9th Cir. 1989). Both Moore’s Federal Practice 3d, 107.30[3][f] at n.100 (3d ed. 2005), and Akin v. Ashland Chem. Co., 156 F.3d 1030, 1035 n.2 (10th Cir. 1998), cite to Cantrell as imposing a duty upon a defendant to investigate potential reasons for removal within the first thirty days of receiving a complaint. In Harris, the Ninth Circuit recently rejected Moore’s and Akin’s interpretation of Cantrell and clarified its holding in Cantrell.

Class Action Court Decisions Removal & Remand Uncategorized

Class Action Defense Issues: One Year Limit On Removal to Federal Court – 28 U.S.C. § 1446

28 U.S.C. § 1446 – One Year Limit on Removal

Class action defendants often benefit if they can remove the case to federal court if possible. CAFA (Class Action Fairness Act of 2005) was enacted to greatly expand access to federal courts in class action cases. Removal of cases to federal court generally is governed by 28 U.S.C. §1446. CAFA is discussed in a separate article.

The procedure for removal is set forth in 28 U.S.C. § 1446. As a general rule the defendant must remove the case to federal court within 30 days of receipt of the complaint or “a copy of an amended pleading, motion, order or other paper from which it may first be ascertained that the case is one which is or has become removable,” 28 U.S.C. § 1446(b). However, if the basis of removal is diversity jurisdiction, then the matter may not be removed more than one year after the lawsuit was filed. Id. The 30-day limit is discussed in a separate article; this article discusses the one-year limitation.

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CAFA (CLASS ACTION FAIRNESS ACT OF 2005)

Class action litigation is rampant in the United States, and defending against a class action lawsuit is both expensive and time-consuming. In enacting CAFA (Class Action Fairness Act of 2005), Congress acknowledged that class actions are an important and valuable part of the legal system “when they permit the fair and efficient resolution of legitimate claims of numerous parties by allowing the claims to be aggregated into a single action against a defendant that has allegedly caused harm.” However, Congress also recognized that the abusive use of class actions has harmed the public, harmed businesses, and undermined public respect for the judicial system.

In particular, Congress was concerned that many class actions benefited plaintiffs’ counsel more than the public. “Class members often receive little or no benefit from class actions, and are sometimes harmed,” whereas “[plaintiffs’] counsel are awarded large fees, while leaving class members with coupons or other awards of little or no value.” Moreover, certain plaintiffs receive unjustifiable awards at the expense of other class members.

Congress was also concerned that by manipulation of diversity jurisdiction plaintiffs’ counsel had managed to keep cases of “national importance” in state court, and that state courts would “sometimes act[] in ways that demonstrate bias against out-of-State defendants” and enter judgments that would “impose their view of the law on other States and bind the rights of the residents of those States.”

Congress therefore enacted the Class Action Fairness Act (“CAFA”) for several purposes. When a proposed class action settlement awards coupons to class members, then CAFA requires that the federal district court expressly find that the settlement is fair, reasonable and adequate. The federal court also cannot approve such a settlement if attorney fees awarded to class counsel result in a net monetary loss to the class unless the court expressly finds that the monetary loss is substantially outweighed by nonmonetary benefits to the class. CAFA also specifies the calculation of contingent and other attorney fee awards when the proposed class action settlement involves providing coupons to class members. Finally, CAFA prohibits class settlements that give greater benefits to some class members because they are geographically nearer to the court. To ensure the fairness of proposed class settlements, CAFA requires that notice of proposed settlements be served on the appropriate State and Federal officials, and forbids the court from approving such settlements less than 90 das after service of such notice.

Class Action Fairness Act (CAFA) Uncategorized

Indictment of Class Action Law Firm and Lawyer Fuels Debate on Prosecution of Corporations

David Bershad and Steven Schulman along with class action plaintiff firm Milberg Weiss Bershad & Schulman LLP, were indicted in mid-May 2006 for paying millions of dollars in kickbacks to clients to serve as plaintiffs. Brooke Masters of The Washington Post reports that the case breaks a familiar trend of corporate defendants cooperating with government prosecutors “such as Computer Associates International Inc., accounting firm KPMG LLP and drugmaker Bristol-Myers Squibb Co.

Class Actions In The News Uncategorized

New Allegations Surface Regarding Indicted Class Action Law Firm and Lawyer

Class action plaintiff firm Milberg Weiss Bershad & Schulman LLP and two of the firm’s top partners,David Bershad and Steven Schulman, were indicted in mid-May 2006 for paying millions of dollars in kickbacks to clients to serve as plaintiffs. Lynnley Browning of the New York Times reports that one of the lead plaintiffs in the class action against accounting firm KPMG claims “that he was offered a financial incentive to serve as plaintiff.

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Class Action Defense Cases–Evans v. Walter Industries: Plaintiff Bears Burden Under Class Action Fairness Act of 2005 (CAFA) Of Establishing Local Controversy Exception To Removal of Class Action

CAFA (Class Action Fairness Act of 2005) Places Burden of Proof on Plaintiff to Establish Local Controversy Exception to Removal Eleventh Circuit Holds CAFA contains several provisions that still require judicial interpretation. On May 22, 2006, the Eleventh Circuit considered as a matter of first impression for any Circuit Court of Appeals “the specific question of which party should bear the burden of proof on CAFA’s local controversy exception.” Evans v.

Class Action Court Decisions Class Action Fairness Act (CAFA) Class Actions In The News Removal & Remand Uncategorized