Surge In Class Action Complaints Filed In California State And Federal Courts Led By ADA Class Actions But Labor Law Actions Continue To Top List Of New Class Action Lawsuits Filed In Past Week

In order to assist class action defense attorneys anticipate the types of class actions against which they will have to defend in California, we provide weekly, unofficial summaries of the legal categories for new class action lawsuits filed in the state and federal courts located in Los Angeles, San Francisco, San Jose, Sacramento, San Diego, San Mateo, Oakland/Alameda and Orange County areas. We include only those categories that include 10% or more of the class action filings during the preceding week.

Class Actions In The News Uncategorized

Class Action Defense Cases—In re Aetna: Judicial Panel On Multidistrict Litigation (MDL) Grants Defense Motion To Centralize Class Action Litigation In District Of New Jersey

Judicial Panel Grants Defense Request for Pretrial Coordination of Class Action Lawsuits Pursuant to 28 U.S.C. § 1407, Opposed by Plaintiffs in One of the Class Actions, and Transfers Actions to District of New Jersey Two class actions – one in Connecticut and one in New Jersey – were filed against Aetna and affiliated entities, and other defendants (including Ingenix and its parent UnitedHealth Group), challenging Aetna’s “policies and practices for reimbursing its plan members’ visits to health care providers that are not part of the Aetna network,” that is, to “nonparticipating” or “out-of-network” providers.

Class Action Court Decisions Multidistrict Litigation Uncategorized

FDCPA Class Action Defense Cases–Lemire v. Wolpoff & Abramson: Connecticut Federal Court Grants Class Action Treatment To FDCPA Class Action Against Law Firm

Class Action Against Law Firm Alleging Violations of Debt Collection Laws Warranted Class Action Treatment over Defense Challenge to Adequacy of Representation based on Claim that Class Action was Filed by “Professional Plaintiff” and over Challenge to Superiority Prong of Rule 23(b)(3) Class Action Certification Test based on Negative Net Worth of Defendant and FDCPA’s 1% Net Worth Cap on Liability Connecticut Federal Court Holds

Plaintiff filed a class action against the law firm of Wolpoff & Abramson alleging violations of the federal Fair Debt Collection Practices Act (FDCPA). Lemire v. Wolpoff & Abramson, LLP, 256 F.R.D. 321, 2009 WL 827764, *1 (D.Conn. 2009). According to the allegations underlying the class action, Wolpoff’s communication with Connecticut consumers violated state law and therefore a per se violation of the FDCPA, id. Wolpoff argued that a violation of Connecticut debt collection law is not a per se violation of the FDCPA. Id. Plaintiff moved the district court to certify the litigation as a class action, id. The district court granted plaintiff’s motion and granted class action treatment.

After summarizing the well known rules for class action certification under Rule 23, see Lemire, at *2, the court turned to the merits of the motion. Wolpoff conceded that the numerosity test of Rule 23(a)(1) had been met, id., at *3. But as to commonality, Wolpoff argued that each collection letter sent to a Connecticut resident would have to be “analyzed individually to determine whether it contains actionable language” because different letters were sent to consumers who were represented by counsel than those who were unrepresented. Id. The federal court found, however, that the letters were similar in material respects and that the differences go to the merits of the class action claims. Id., at *3-*4. Given the “common content of Wolpoff’s letters” sent directly to consumers, the commonality test had been met. Id., at *4. And the letters to the attorneys were sufficiently similar to warrant class action treatment, and even if different could be addressed by dividing the group into two classes. Id., at *5. And the typicality test was satisfied because Wolpoff “failed to identify any unique ‘claims or defenses,’” id., at *6.

Class Action Court Decisions FDCPA Class Actions Uncategorized

AT&T Class Action Defense Cases–AT&T v. Hulteen: Supreme Court Holds Employer Does Not Violate Pregnancy Discrimination Act By Paying Pension Benefits Calculated Under Pre-PDA Accrual Rule Giving Less Retirement Credit For Pregnancy Than Medical Leave

Class Action Failed to Allege Discrimination Against Employer that Calculated Pension Benefits under Pre-Pregnancy Discrimination Act (PDA) Rules, Lawful at the Time, that Gave Less Retirement Credit to Pregnancy Leave than for Medical Leave Supreme Court Holds Plaintiffs filed a class action against AT&T alleging violations of Title VII of the Civil Rights Act of 1964; the class action complaint asserted that defendant discriminated against employees on the basis of sex and pregnancy by providing pension and other benefits on a seniority system that treated pregnancy differently from other medical conditions.

Class Action Court Decisions Employment Law Class Actions Uncategorized

Prop 64 Class Action Defense Cases–In re Tobacco II: California Supreme Court “Turns Class Action Law Upside Down” And Holds UCL Class Actions May Be Certified Even If Class Members Lack Standing To File Suit In Own Name

Class Actions Alleging Violations of California’s Unfair Competition Law (UCL) may be Certified as a Class Action even if Putative Class Members Lack Standing to Prosecute UCL Claims in Their Own Name, but Class Representative Alleging Misrepresentation as Basis of UCL Class Action Claim must Demonstrate Actual Reliance on the Defendant’s Allegedly Deceptive or Misleading Statements California Supreme Court Holds

A class action lawsuit was filed in California state court against various tobacco industry defendants alleging violations of California’s Unfair Competition Law (UCL); specifically, the class action complaint asserted that defendants “conduct[ed] a decades-long campaign of deceptive advertising and misleading statements about the addictive nature of nicotine and the relationship between tobacco use and disease.” In re Tobacco II Cases, ___ Cal.4th ___, 93 Cal.Rptr.3d 559 (Cal. 2009) [Slip Opn., at 1-2]. The class action complaint was amended numerous times; the trial court granted plaintiffs’ motion to certify the litigation as a class action, filed in connection with the seventh amended class action complaint. _Id._, at 3. At the time the trial court granted class action status to the lawsuit, under California law an individual had standing to file suit alleging UCL violations even if the individual had not suffered any injury; following class certification, Californians passed Proposition 64, which amended the UCL so as to condition standing to file suit to a “person who has suffered injury in fact and has lost money or property as a result of [such] unfair competition.” _Id._, at 1-2 (quoting Cal. Bus. & Prof. Code, § 17204). Additionally, prior to Prop 64 UCL representative actions did not have to satisfy the requirements for class action treatment under California Code of Civil Procedure section 382, but Prop 64 explicitly requires such compliance, _id._, at 13. Based on the standing requirement imposed by Prop 64, the trial court granted defendants’ motion to decertify the class “on the grounds that each class member was now required to show an injury in fact, consisting of lost money or property, as a result of the alleged unfair competition.” _Id._, at 2. The appellate court affirmed, “agreeing with the trial court that, post Proposition 64, individual issues of exposure to the allegedly deceptive statements and reliance upon them, predominated over class issues.” _Id._, at 9. But the California Supreme Court – in a 4-3 decision – reversed.

The California Supreme Court’s decision is ground-breaking: it represents the first opinion known to this author that allows an individual to be a member of a class even if that person does not have standing to file suit in his or her own name. The Supreme Court addressed two issues: “First, who in a UCL class action must comply with Proposition 64’s standing requirements, the class representatives or all unnamed class members, in order for the class action to proceed?” In re Tobacco II, at 2. This is the question on which we focus here. “Second, what is the causation requirement for purposes of establishing standing under the UCL, and in particular what is the meaning of the phrase ‘as a result of’ in section 17204?” Id. While we do not discuss this aspect of the Court’s opinion, we note its holding: “We conclude that a class representative proceeding on a claim of misrepresentation as a basis of his or her UCL action must demonstrate actual reliance on the allegedly deceptive or misleading statements, in accordance with well-settled principles regarding the element of reliance in ordinary fraud actions.” Id.

Certification of Class Actions Class Action Court Decisions Uncategorized

Securities Fraud Class Action Defense Cases–Vladimir v. Bioenvision: New York Federal Court Grants Motion To Dismiss Securities Fraud Class Action Holding Class Action Complaint Failed To Meet Heightened Pleading Requirements Of PSLRA

Defense Motion to Dismiss Securities Fraud Class Action Granted because Defendants had no Duty to Disclose Merger Discussions Prior before Definitive Merger Agreement Reached and because Anonymous Source Insufficient to Satisfy Heightened Pleading Requirements of PSLRA (Private Securities Litigation Reform Act) New York Federal Court Holds

Plaintiffs filed a class action against Bioenvision and certain officers and directors, and Perseus-Soros Biopharmaceutical Fund (Bioenvision’s largest pre-merger shareholder) alleging violations of federal securities laws; the class action complaint alleged violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder, against Perseus-Soros under section 13(d) of the Exchange Act, and against the individual defendants and Perseus-Soros under section 20(a). Vladimir v. Bioenvision Inc., ___ F.Supp.2d ___, 2009 WL 857552, *1 (S.D.N.Y. March 31, 2009). According to the allegations underlying the class action, “defendants artificially deflated the value of Bioenvision’s stock by issuing and by failing to correct or update statements that contained material misrepresentations and omissions as to Bioenvision’s plan to enter into a merger with Genzyme.” _Id._ Defense attorneys moved to dismiss the class action on the grounds that the allegations in the class action complaint failed to meet the heightened pleading requirements of the Private Securities Litigation Reform Act of 1995 (PSLRA). _Id._ Defendants further argued that “they had no duty to disclose the merger discussions until May 29, 2007, the date when the merger was announced publicly.” _Id._ Plaintiffs countered that defendants’ failure to disclose the plan to sell Bioenvision to Genzyme had the practical effect of artificially suppressing Bioenvision’s stock price, causing damage to plaintiffs because they sold their stock before the merger was officially announced (at which time the stock price skyrocketed). _Id._, at 4. Essentially, the “false and misleading” statements consisted of disclosing that its “primary focus” was the development of cancer treatments when its real focus was to find a merger partner. _Id._, at *5. The district court granted the defense motion and dismissed the class action complaint.

Cutting to the heart of the federal court’s analysis, the district court held that under Second Circuit authority “‘a corporation is not required to disclose a fact merely because a reasonable investor would very much like to know that fact.’” Vladimir, at *7 (citation omitted). Put simply, “[t]here is no specific duty to disclose merger negotiations under SEC rules until they become definitive agreements.” Id. (citations omitted). And since there was no duty to disclose, defendants’ silence could not be deemed misleading. Id. (citation omitted). Plaintiffs argued that the parties had reached a “definitive agreement” to merge in January 2007, thus creating the duty to disclose. Id. But as this allegation was supported only by an anonymous source, it failed to satisfy the PSLRA’s heightened pleading requirements. Id., at *7-*8. Further, as the federal court observed, “Under plaintiffs’ proposed rule, any public company that publicly described its core business or strategy – which is to say, every public company – would be required to disclose potential or actual merger negotiations. Statements that do not raise the subject of mergers, even tangentially, cannot impose a duty to disclose all material information concerning merger discussions.” Id., at *10. The district court ultimately concluded that the allegations in the class action complaint did not plead fraud with particularity as required by Rule 9(b), and in any event do not support a duty to disclose. Id., at *12. Accordingly, the court granted the motion to dismiss by the Bioenvision defendants. Id., at *13.

Class Action Court Decisions PSLRA/SLUSA Class Actions Uncategorized

TILA Class Action Defense Cases–Frazier v. Accredited Home Lenders: Alabama Federal Court Grants Lender’s Summary Judgment Motion In TILA Class Action

Lender Motion for Summary Judgment as to Class Action Claims Alleging Lender Violated TILA and HOEPA Properly Granted because Disclosed Finance Charges Fell within TILA’s Tolerance for Accuracy and because HOEPA did not Apply as Transaction was not High-Cost Loan Alabama Federal Court Holds

Plaintiff filed a class action against Accredited Home Lenders, dba Home Funds Direct, alleging violations of the federal Truth in Lending Act (TILA) and Home Ownership and Equity Protection Act (HOEPA), which requires additional disclosures be made in connection with “high cost” loans; the class action complaint asserted that her lender “improperly understated the finance charge on credit it extended to her” and “failed t comply with the additional disclosure requirements” of HOEPA. Frazier v. Accredited Home Lenders, Inc., 607 F.Supp.2d 1254, 2009 WL 931167, *1 (M.D.Ala. 2009). According to the allegations underlying the class action, the lender improperly excluded several charges from its calculation of the finance charge – a claim the lender denied. Id., at *2. The class action sought rescission and damages, id., at *1. Defense attorneys moved summary judgment, id.; the lender argued that its disclosures were “accurate, complete, and in compliance with both TILA and HOEPA.” Id., at *2. The class action complaint alleged that the lender charged an “endorsement fee” for a service that was never provided, and that it charged an excessive fee for “a title search, a title examination, recording, and title insurance,” each of which allegedly should have been included in the finance charge. Id. Defense attorneys countered that the fees in question were “imposed by a third party” and that they were not excessive; further, the lender argued that the finance charge disclosed “falls within TILA’s tolerance for accuracy” (that is, one half of one percent of the loan amount). Id. Alternatively, defense attorneys argued that any errors fell within the safe harbor provision of TILA and fell outside the scope of HOEPA. Id. The district court granted the motion and entered judgment in favor of the lender on the class action complaint.

The federal court observed that the “dispositive question” was “how to calculate properly the finance charge” for the loan extended to plaintiff. Frazier, at *2. The court observed that this task was complicated by “the imprecise language of TILA itself and the maze of federal regulations interpreting the statute.” Id. Turning to the merits, the district court rejected the lender’s claim that it was not responsible for charges imposed by third parties, observing that the relevant inquiry is whether it required the services in question. Id., at *3. But the court agreed with defense attorneys that the lender did not “require” the “endorsement fee” charged by the third party, particularly as no service was ever provided in connection with that third party charge, id. Accordingly, the federal court held that “the endorsement fee must be excluded from the finance charge.” Id. The question then, was whether the remaining fees were “excessive” and whether the lender understated that amount of the finance charge, id.

Class Action Court Decisions RESPA/TILA Class Actions Uncategorized

Labor Law Actions Continue To Top List Among Weekly Class Action Lawsuits Filed In California State And Federal Courts But With Comparatively Low Percentage Of New Class Action Filings

As a resource for California class action defense attorneys, we provide weekly, unofficial summaries of the legal categories for new class action lawsuits filed in the state and federal courts located in Los Angeles, San Francisco, San Jose, Sacramento, San Diego, San Mateo, Oakland/Alameda and Orange County areas. We include only those categories that include 10% or more of the class action filings during the preceding week. This report covers the period from May 8 – 14, 2009, during which time 49 new class actions were filed.

Class Actions In The News Uncategorized

3M Class Action Defense Cases–Whitaker v. 3M: Minnesota State Court Grants Class Action Treatment To Labor Law Class Action Against 3M Alleging Age Discrimination

Labor Law Class Action Against 3M Alleging Age Discrimination Warranted Class Action Certification Minnesota State Court Holds Plaintiff filed a class action against his employer, 3M, alleging labor law violations; the class action complaint asserted that 3M discriminated against employees on the basis of age with respect to leadership development opportunities, promotion decisions, compensation decisions, and job eliminations. Whitaker v. 3M Co., Ramsey County District Court, Second Judicial District, Case No.

Certification of Class Actions Class Action Court Decisions Employment Law Class Actions Uncategorized

Wal-Mart/Netflix Class Action Defense Cases—In re Online DVD Rental: Judicial Panel On Multidistrict Litigation (MDL) Grants Plaintiff Motion To Centralize Class Action Litigation In Northern District Of California

Judicial Panel Grants Plaintiff Request for Pretrial Coordination of Class Action Lawsuits Pursuant to 28 U.S.C. § 1407, Supported by Common Class Action Defendants and by Vast Majority of Class Action Plaintiffs, and Transfers Class Actions to Northern District of California Twelve class actions – eleven in the Northern District of California and one in the Western District of Washington – were filed against Wal-Mart and Netflix alleging violations of antitrust laws; specifically, the class action complaints allege “defendants conspired to divide the online DVD rental market in violation of federal antitrust laws.

Class Action Court Decisions Multidistrict Litigation Uncategorized