New Labor Law Class Action Filings Again Seize Top Spot Among Weekly Class Action Lawsuits Filed In California State And Federal

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 April 24 – 30, 2009, during which time 37 new class actions were filed.

Class Actions In The News Uncategorized

MDL Class Action Defense Cases—In re Staples: 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, Unopposed by Class Action Plaintiffs, and Transfers Class Actions to District of New Jersey Six class actions – two in Massachusetts, and one each in Connecticut, New Jersey, New York and Pennsylvania – were filed against Staples alleging labor law violations; specifically, the class action complaints allege “that Staples assistant, operations and/or sales managers are entitled to overtime pay under the Fair Labor Standards Act and/or various state wage and hour statutes.

Class Action Court Decisions Employment Law Class Actions Multidistrict Litigation Uncategorized

Class Action Settlement Cases–In re Touch America: Ninth Circuit Dismisses Appeal Seeking Review Of District Court Order Rejecting Proposed Class Action Settlement Holding Circuit Court Lacked Jurisdiction Over Appeal

District Court Order Rejecting Proposed Class Action Settlement of ERISA Class Action as Unfair not Appealable Ninth Circuit Holds

Plaintiffs, employees of Montana Power and participants in the company’s retirement plan (the “Plan”), filed a class action against the Plan’s trustee and against directors of Montana Power alleging violations of ERISA; the class action complaint asserted that defendants breached fiduciary duties owed to Plan participants and mismanaged the Plan. In re Touch America Holdings, Inc. ERISA Litig., 563 F.3d 903 (9th Cir. 2009) [Slip Opn., at 4713, 4717]. The defendant-directors entered into a proposed class action settlement with plaintiffs; under the terms of the class action settlement the directors would make a payment “of nearly all the funds remaining in the directors’ fiduciary liability insurance policy.” Id., at 4717. The proposed class action settlement also contained two conditions – (1) directors cooperation in the class action claims against the Plan trustee, and (2) obtaining a district court order that “bar[red] suits for contribution or indemnity against the directors.” Id. The district court rejected the proposed class action settlement, id.; in part, the court found the settlement was not fair to the class because the monetary contribution represented only “three cents on the dollar” which it found was “not good in terms of recovery” and characterized as “a pittance…of the total amount of loss,” id., at 4719. The parties appealed, id., at 4717. The Ninth Circuit dismissed the appeal.

The Ninth Circuit noted that the parties did not dispute that the order rejecting the proposed class action settlement was not a “final decision.” In re Touch America, at 4718. The Circuit Court noted also the general rule that, in order to avoid “piecemeal appeals,” only final decisions are reviewable on appeal, id. The parties, therefore, sought interlocutory review of the district court’s order, id. The Ninth Circuit explained that “some disapprovals of class settlements are appealable under the section as orders refusing an injunction.” Id. (citation omitted). And the Court set forth the rule at page 4718 as follows: “To be immediately appealable, orders disapproving class settlements must satisfy three requirements: ‘First, the interlocutory order must have the practical effect of denying an injunction. Second, the order must have “serious, perhaps irreparable, consequence[s].” Finally, the order must be one that can be “effectively challenged” only by immediate appeal.’” (Citation omitted). The Circuit Court dismissed the appeal because it found that the second requirement had not been satisfied – that is, the Court concluded that the district court order would not cause “serious, perhaps irreparable, consequences.”

Class Action Court Decisions Employment Law Class Actions Uncategorized

Ford Class Action Defense Cases–Cuesta v. Ford Motor: Oklahoma Supreme Court Reinstates Class Action Certification Order Holding Trial Court Did Not Abuse Discretion In Certifying Class Action

Products Liability Class Action Properly Certified as Class Action with Respect to Breach of Warranty Claim and Appellate Court Erred in Reversing Class Action Certification Order Oklahoma Supreme Court Holds

Plaintiffs filed a class action against Ford Motor and Williams Control for product liability; the class action complaint asserted claims based on “design and/or manufacturing defects in the fixed, non-adjustable accelerator pedal, i.e., the ‘electronic throttle control’, or ‘ETC’, which is designed and manufactured by Williams and installed in certain trucks manufactured by Ford.” Cuesta v. Ford Motor Co., ___ P.3d ___, 2009 OK 24, ¶ 2 (Okla. April 21, 2009) (footnotes omitted). According to the allegations underlying the class action, “the pedals, which were modified twice, failed Ford’s ‘overload’ tests and engineering specifications.” _Id._ Specifically, “when forcible pressure is applied to the pedals that they cause the vehicles to shift to idle instead of accelerating and, therefore, are defective and unreasonably dangerous.” _Id._ The class action complaint alleged causes of action for breach of express and implied warranties, negligence and strict products liability. Plaintiffs filed a motion with the trial court to certify the litigation as a class action; the trial court granted the motion, agreeing with plaintiffs that the following questions of law and fact are common: “(1) whether the accelerator pedals at issue are defective; (2) whether the pedals are unreasonably dangerous; (3) whether the pedals reduce the value of the vehicles; and (4) whether the sale of the vehicles containing these pedals to members of the class constitutes a breach of any express or implied warranty by Defendants Ford and WCI?” _Id._ The Oklahoma Court of Civil Appeals reversed the class action certification order, _id._, at ¶ 1. The Oklahoma Supreme Court granted plaintiffs’ petition for writ of certiorari and vacated the appellate court’s opinion, holding that the trial court did not abuse its discretion in granting class action treatment.

The Oklahoma Supreme Court began by noting that it was determining “only whether class certification is appropriate to determine a breach of warranty theory under the facts presented.” Cuesta, at ¶ 2. The Court noted also that “[a] trial court’s order certifying a class action is reviewed for an abuse of discretion.” Id., at ¶ 7 (citation omitted). It began its legal analysis by discussing the applicable choice of law, see id., at ¶¶ 8 et seq. We do not summarize the Oklahoma Supreme Court’s analysis of this issue, noting simply that the Court concluded that the law of Michigan governed the class action’s breach of warranty claims, id., at ¶¶ 15-16.

Certification of Class Actions Class Action Court Decisions Uncategorized

Starbucks Class Action Defense Cases–Reed v. Starbucks: Florida Federal Court Grants Conditional Class Action Treatment To Labor Law Class Action Against Starbucks Alleging Misclassification Of Store Managers And Failure To Pay Overtime

Class Action Complaint Alleging Violations of FLSA (Fair Labor Standards Act) based on Misclassification of Store Managers and Consequent Failure to Pay Overtime Satisfied First-Tier’s “Lenient Standard” for Conditional Class Action Certification Florida Federal Court Holds Plaintiff filed a class action against Starbucks alleging violations of the federal Fair Labor Standards Act (FLSA); the class action complaint asserted that Starbucks misclassified him (and other store managers) as exempt and failed to pay him overtime.

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

Class Action Defense Settlement Cases–Rodriguez v. West Publishing: Ninth Circuit Affirms Approval Of Class Action Settlement Of Antitrust Class Action But Remands For Further Consideration Of Incentive And Attorney Fee Awards

District Court Approval of Antitrust Class Action Settlement did not Require Reversal due to Conflict of Interest with Certain Class Representatives because Other Class Representatives did not Share Conflict so Error was Harmless Ninth Circuit Holds

Plaintiffs filed a class action against West Publishing and Kaplan alleging antitrust violations; the class action complaint asserted that individuals who purchased BAR/BRI courses from defendants to prepare for bar examinations paid more than they should have because of defendants’ anticompetitive conduct. Rodriguez v. West Publishing Corp., 563 F.3d 948 (9th Cir. 2009) [Slip Opn., at 4743, 4752-53]. An amended class action complaint was filed adding additional named plaintiffs, who had been plaintiffs in a related class action entitled Brewer v. West Publishing. Id., at 4752. The class action sought more than $300 million in damages, id., at 4753-54. Eventually, the district court certified the litigation as a class action, id., at 4754. The court appointed all of the named plaintiffs as class representatives, and appointed class counsel, id., at 4752. The parties entered into settlement discussions and signed an agreement that called for defendants to pay $49 million in settlement; three of the class representatives (“the Class Representative Objectors”) objected to the proposed class action settlement and refused to sign it. Id., at 4755. The district court gave preliminary approval of the settlement over the objection of the Class Representative Objectors, id., at 4755-56. The Class Representatives were to receive $25,000 as incentive awards, but the Class Representative Objectors were to receive $75,000 as incentive awards. Id., at 4756. In the end, 54 objections were filed to the proposed class action settlement, id. The plaintiffs in the original Rodriguez class action complaint had a fee agreement with a prior law firm that contained a graduated incentive award, and some of those plaintiffs agreed to reduce their incentive award to $25,000, but the Class Representative Objectors did not. Id., at 4756-57. Ultimately, the district court approved the class action settlement (though it denied incentive awards in their entirety), and six groups of objectors appealed. Id., at 4757. “Their principal objection relates to incentive agreements that were entered into at the onset of litigation between class counsel and five named plaintiffs who became class representatives.” Id., at 4750. They objected also to the district court’s reliance on an estimate of single damages, rather than treble damages, in finding the $49 million payment to be fair, reasonable and adequate. Id. The Ninth Circuit affirmed the settlement.

The Ninth Circuit noted that “Much of the appeal turns on the presence — and nondisclosure to the class — of the incentive agreements.” Rodriguez, at 4758. The Court explained that while such awards are “fairly typical in class action cases,” id., providing for incentives in a fee agreement is “quite different” because only the district court can determine the appropriate award, but the fee agreements in this case “tied the promised request to the ultimate recovery and in so doing, put class counsel and the contracting class representatives into a conflict position from day one,” id., at 4758-59. The Circuit Court held that this conflict should have been disclosed at the class action certification stage, not at the time for approval of a proposed class action settlement. Id., at 4759. If the potential conflict had been disclosed timely, then “the district court would certainly have considered its effect in determining whether the conflicted plaintiffs…could adequately represent the class. “ Id. As the Ninth Circuit explained at page 4759, “An absence of material conflicts of interest between the named plaintiffs and their counsel with other class members is central to adequacy and, in turn, to due process for absent members of the class.” (Citation omitted.)

Class Action Court Decisions Uncategorized

Slow Week For Class Action Filings But Labor Law Class Actions Maintain Top Spot Among Weekly Class Action Lawsuits Filed In California State And Federal Courts

In order to assist class action defense attorneys anticipate the types of cases 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

Song-Beverly Class Action Defense Cases—In re Payless ShoeSource: Judicial Panel On Multidistrict Litigation (MDL) Grants Defense Motion To Centralize Class Action Litigation In Eastern District Of California

Judicial Panel Grants Defense Request for Pretrial Coordination of Class Action Lawsuits Pursuant to 28 U.S.C. § 1407, Unopposed by Class Action Plaintiffs, and Transfers Actions to Eastern District of California Two class actions were filed in the Central and Eastern Districts of California against Payless ShoeSource alleging violations of California’s Song-Beverly Credit Card Act; specifically, the class action complaints allege that “Payless requests and records customers’ personal identification information in violation of California Civil Code § 1747.

Class Action Court Decisions Multidistrict Litigation Uncategorized

FDCPA Class Action Defense Cases–Asset Acceptance v. Hanson: California State Court Affirms Dismissal Of FDCPA Class Action Claims Holding Debt Collector Not Obligated To Inform Debtors That Debts Were Time-Barred

As a Matter of First Impression, Credit Card Debtor’s Class Action Cross-Complaint Alleging Violations of California’s Fair Debt Collection Practices Act (Rosenthal Act) Properly Dismissed on Demurrer for Failure to Define an Ascertainable Class and because Debt Collector was not Obligated to Disclose to Debtors that Debts Sought to be Collected were Time-Barred California State Court Holds

Plaintiff Asset Acceptance filed a lawsuit against debtor Lilia Hanson to collect on a $1300 credit card debt; the debtor filed a putative class action cross-complaint against Asset alleging that it violated California’s Fair Debt Collection Practices Act (“the Rosenthal Act”), which incorporates the federal Fair Debt Collection Practices Act (FDCPA), and Unfair Competition Law (UCL). Asset Acceptance, LLC v. Hanson, (Cal.App., Case No. B208548, April 1, 2009) (unpublished) [Slip Opn., at 1]. The class action claims were premised on the allegation that Asset systematically and fraudulently sought to collect on debts that were time-barred. Id. The central allegation underlying the class action cross-complaint is that Asset purchased credit card debts “for pennies on the dollar and tricks debtors into making payments, which has the legal effect of reviving the debt.” This is because, under California law, “If a debtor acknowledges a debt in writing after the statute of limitations has run, ‘a new obligation is created, for which the original barred debt is said to be “consideration.” The cause of action is on the new obligation, and a new statutory period starts running as on any other written promise.’” Id., at 2 (citations omitted). Asset demurred to the third amended class action cross-complaint; the trial court sustained the demurrer on the ground that the class action sought to represent a class that lacked a “well-defined community of interest.” Id., at 1. In an unpublished opinion, the California Court of Appeal affirmed.

The Rosenthal Act “prohibits debt collectors from using threats, physical force, obscene language, annoying telephone calls, false representations, or falsely simulating a legal action.” Asset Acceptance, at 2 (citations omitted). In part, the statute prohibits a debt collector from obtaining “an affirmation from a debtor who has been adjudicated a bankrupt of a consumer debt which has been discharged in such bankruptcy, without clearly and conspicuously disclosing to the debtor, in writing, at the time such affirmation is sought, the fact that the debtor is not legally obligated to make such affirmation,” id. (citation omitted). The appellate court observed, however, that “The Rosenthal Act is silent on whether a debt collector must give a similar warning when attempting to collect a time-barred debt that has not been discharged in bankruptcy.” Id. This was the central issue on appeal, because the class action alleged that Asset failed to disclose to the putative class members that the debts it was seeking to collect were time barred when it contacted them demanding about payment on the credit card debts. Id., at 3. Further, not only was this a matter of first impression under California case law, but federal courts considering the issue under the FDCPA have reached different conclusions. Id., at 2-3.

Certification of Class Actions Class Action Court Decisions FDCPA Class Actions Uncategorized

Class Action Defense Cases–Budrow v. Dave & Buster’s: California State Court Affirms Defense Judgment In Labor Law Class Action Holding California Law Does Not Prohibit Sharing Tip Pools With Employees That Do Not “Directly Serve” Tables

Trial Court Properly Granted Defense Motion for Summary Judgment in Class Action Alleging Violation of California Labor Code by Sharing Tip Pools with Non-Managerial Employees that only “Indirectly Service” Tables because California Law does not Impose “Direct Table Service” Requirement on Participation in Tip Pools California State Court Holds Plaintiff filed a class action in California state court against, their employer, Dave & Buster’s, alleging labor law violations; the class action complaint was premised “on the theory that distributions from the ‘tip pool’ to persons who did not provide direct table service violated [California] Labor Code section 351.

Class Action Court Decisions Employment Law Class Actions Uncategorized