Class Action Defense Cases–Sanchez v. Western Pizza: California State Court Affirms Trial Court Order Denying Defense Motion To Dismiss Class Action Complaint And Compel Arbitration Holding Class Action Waiver And Arbitration Agreement Unenforceable

Trial Court Order Denying Defense Motion to Dismiss Labor Law Class Action and Compel Arbitration of Individual Claim based on Class Action Waiver in Unsigned Arbitration Agreement Proper because Class Action Waiver Unenforceable as Contrary to Public Policy California State Court Holds Plaintiff, a delivery driver for a Domino’s Pizza owned by Western Pizza, filed a putative class action Western Pizza alleging labor law violations; the class action complaint asserted inter alia that defendant failed to reimburse its drivers for business expenses, and failed to pay minimum wage or provide itemized wage statements.

Arbitration Class Action Court Decisions Employment Law Class Actions Uncategorized

Class Action Lawsuits Alleging Labor Law Violations Retain Top Spot Among Weekly Class Action Lawsuits Filed In California State And Federal Courts

As a resource for California attorneys who defend class action lawsuits, 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 March 20 – 26, 2009, during which time an usually large number of new class actions, 58, were filed.

Class Actions In The News Uncategorized

Class Action Defense Cases—In re Land Rover LR3: Judicial Panel On Multidistrict Litigation (MDL) Grants Defense Motion To Centralize Class Action Litigation In Central District of California

Judicial Panel Grants Defense Request for Pretrial Coordination of Class Action Lawsuits Pursuant to 28 U.S.C. § 1407, Over Objection of Class Action Plaintiffs, and Transfers Actions to Central District of California Eight class actions – three in California and one each in Colorado, Maryland, New Jersey, Washington and Wisconsin – were filed against Jaguar Land Rover North America, LLC alleging that “geometry alignment defect that causes uneven and premature tire wear on model year 2005 and 2006 Land Rover LR3s.

Class Action Court Decisions Multidistrict Litigation Uncategorized

FDCPA Class Action Defense Cases–Del Campo v. American Corrective Counseling: California Federal Court Certifies FDCPA Class Action Finding Attack On Practices Used To Collect On Bounced Checks Warranted Class Action Treatment

Class Action Alleging FDCPA Violations Arising from Collection Practices Utilized to Collect from Check Writers of Bounced Checks Satisfied Rule 23 Requirements for Class Action Treatment California Federal Court Holds

Plaintiffs filed a putative class action against various defendants, including American Corrective Counseling Services (ACCS), alleging that they “engaged in a pattern of behavior in implementing the District Attorney Bad Check Diversion Program” that violated, inter alia, the California Constitution and the federal Fair Debt Collection Practices Act (FDCPA); specifically, the class action complaint alleged that defendants “operated the Diversion Program unlawfully by using the names of local district attorneys, demanding fees, and using the threat of criminal prosecution to force bad check writers to comply with their payment demands.” Del Campo v. American Corrective Counseling Services, Inc., ___ F.Supp.2d ___ (N.D. Cal. December 3, 2008) [Slip Opn., at 1 (footnote omitted)]. According to the allegations underlying the class action, various retail merchants would refer bounced checks to the District Attorney, who in turn would decide whether to refer the check writer to the diversion program. If it is referred, then defendants “instruct the merchants not to communicate” with the check writers and send out letters “purporting to be from the Santa Clara District Attorney’s Bad Check Restitution Program or the Sonoma County District Attorney Bad Check Restitution Program” and explaining that they can “avoid criminal prosecution for allegedly violating California Penal Code 476(a) by enrolling in the optional Bad Check Programs, without any admissions of guilt.” _Id._, at 2-3. The letter would instruct the bad check writers to make new checks out to the Bad Check Program, and included in the total to be paid the amount of the bounced check, a $35 administration fee, and a diversion program fee. _Id._, at 3. Many check writers tendered less than the total amount listed in the letter, and never intended on participating in the Bad Checks Program and did not participate in the program, _id._ Defendants sent subsequent letters demanding payment of the balance of the sums owed. The class action followed, alleging _inter alia_ violations of the FDCPA and California’s Unfair Business Practices Act. _Id._ Plaintiffs’ attorneys moved the district court to certify the litigation as a class action; defense attorneys argued against class action treatment. _Id._, at 2. The district court determined that class action treatment was warranted and therefore granted plaintiffs’ class action certification motion.

With respect to Rule 23(a)’s requirements for class certification, the district court noted that defendants did not contest numerosity or commonality, but argued that plaintiffs’ claims were not typical and that they were not adequate representatives of the class. Del Campo, at 6. The federal court agreed that the numerosity and commonality tests had been met, see id., at 7-9. Turning to the typicality test, the court noted at page 9, “Defendants contend that Plaintiffs have not met the typicality requirement because the collection letters sent by Defendants contained ‘significant differences’ on a county-by-county basis.” Plaintiffs countered that the class action allegations assert that each of the letters “contain representations that: (1) the letter is from the local District Attorney, who has reviewed a criminal complaint made by the recipient of a dishonored check; (2) check writers who do not choose ‘diversion’ face a real risk of prosecution; and (3) to avoid prosecution, the check writer must pay the check, plus enumerated fees, and attend a ‘Financial Accountability’ Class.””Id., at 9. The district court agreed with plaintiffs, and found that the typicality test had been met, id., at 10. Defendants also argued that the named plaintiffs were not adequate representatives of the class and that plaintiffs’ counsel had a conflict of interest in representing the class. Id., at 10. The basis for the attack on the plaintiffs was their dishonesty, as evidenced by the fact that they bounced checks; the district court readily concluded that an element of being in the class could not disqualify someone from serving as the class representative. Id., at 11. And the court rejected the idea that the lobbying efforts of plaintiffs’ counsel created a conflict of interest in representing the class. Id., at 12.

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

Amex Class Action Defense Cases–Hoffman v. American Express Travel: California Trial Court Holds Breach Of Contract Class Action Claims Fail Because American Express Not Required To Automatically Refund Travel Insurance Premiums

Class Action Alleging Breach of Contract Against American Express for Failing to Automatically Refund Various Travel Insurance Premiums Lacked Evidentiary Support because Contract Underlying Class Action Dispute Unambiguously Required Enrollees to Contact American Express as a Condition Precedent to Obtaining such Refunds California Trial Court Holds Plaintiffs filed a class action against American Express alleging breach of contract arising from the manner in which American Express billed customers for fee-based per-trip travel insurance; the class action complaint challenged the billing practices associated with four such programs – airflight, baggage, travel delay, and hospital cash.

Class Action Court Decisions Uncategorized

RESPA Class Action Defense Cases–Hazewood v. Foundation Financial: Eighth Circuit Affirms Dismissal Of RESPA Class Action Holding Excess Title Premium Charged Not An Unearned Fee Under RESPA

District Court Properly Dismissed RESPA Class Action Complaint because Title Insurers Provided Service (Title Insurance) for Fee Alleged Overcharged to Plaintiff, and Plaintiff cannot Manufacture RESPA Claim by Alleging “Portion” of Fee (Excess Premium) was “Unearned” Eighth Circuit Holds

Plaintiff filed a class action against her title insurer, Foundation Financial Group, and other title insurers and title insurance agents alleging inter alia violations of the Real Estate Settlement Procedures Act (RESPA) and Truth in Lending Act (TILA); the class action complaint asserted that defendants overcharged for title insurance in violation of Alabama law, and that they charged borrowers for “other than for services actually performed” in violation of RESPA. Hazewood v. Foundation Fin. Group, LLC, 551 F.3d 1223, 1224 (8th Cir. 2008). The theory of the class action is that the title insurer charged a premium in excess of that allowed by state law, and that the amount of the excess constituted a “portion, split, or percentage of any charge made or received for the rendering of a real estate settlement service … other than for services actually performed” in violation of RESPA. Id., at 1225 (quoting 12 U.S.C. § 2607(b)). Put another way, the class action was premised on the theory that “the overcharge was, as a matter of law, ‘other than for services actually performed.’” Id. The class action also alleged that the title insurance premium “was, or may have been, split” between two defendants, id., at 1224. Defense attorneys moved to dismiss the class action; they argued that RESPA is violated “only when fees are charged in exchange for no services at all, not for mere overcharges or excessive fees.” Id., at 1225. The district court agreed, dismissing the RESPA claim because plaintiff in fact received title insurance, and dismissing the state law claims as barred by Alabama law because a private right of action does not exist for charging an insurance rate in excess of the filed rate. Id. The Eighth Circuit affirmed.

The Eighth Circuit noted that Alabama law “requires title insurers to submit their rates to the Insurance Commissioner, who must then approve the ‘fairness and justness’ of this ‘filed rate.’” Hazewood, at 1224 (citation omitted). Title insurers may not charge a premium in excess of the filed rate, but plaintiff allegedly was charged such a rate which was allegedly split between the settlement agent and the title insurer. Id., at 1224-25. Plaintiff argued on appeal that the class action’s RESPA claim should not have been dismissed because “a portion of her title insurance premium was unearned.” Id., at 1225. The Circuit Court cited well-settled Eighth Circuit authority holding that “RESPA § 8(b) does not provide a cause of action for excessive fees – that is, charges where a service was performed, but the plaintiff feels she was overcharged by the service provider.” Id. (citing Friedman v. Market Street Mortg. Corp., 520 F.3d 1289, 1296 (11th Cir. 2008)). If the fee is charged for a service that is actually rendered, then RESPA is not violated; the RESPA claim must allege that “no services were rendered in exchange for a settlement fee.” Id. (citation omitted). Further, the plaintiff cannot avoid this limitation by arguing, as the present class action does, that a portion of the fee charged – the “excess” portion – was “unearned.” Id., at 1225-26. Accordingly, her RESPA class action claim was properly dismissed, id., at 1226. The Eighth Circuit also rejected plaintiff’s invitation to “overrule, modify, or distinguish” its prior case law so that her class action claim could survive, id., at 1227. Accordingly, the Circuit Court affirmed the judgment of the district court dismissing the class action, id.

Class Action Court Decisions RESPA/TILA Class Actions Uncategorized

Class Action Defense Cases–Franco v. Athens Disposal: California State Court Reverses Order In Labor Law Class Action Compelling Plaintiff To Arbitrate Individual Claims Holding Class Action Waiver Unconscionable

In Labor Law Class Action, Trial Court Erred in Granting Defense Petition to Compel Plaintiff to Arbitrate his Claims on an Individual Basis because Class Action Waiver in Arbitration Agreement Signed by Employee was Unconscionable California State Court Holds

Plaintiff, a trash truck driver, filed a putative class action against his former employer, Athens Disposal, alleging labor law violations; the class action complaint asserted that Athens denied its employees meal and rest periods. Franco v. Athens Disposal Co., Inc., 171 Cal.App.4th 1277 (Cal.App. 2009) [Slip Opn., at 2]. According to the allegations underlying the class action, Athens failed to pay its employees overtime, and failed to provide meal periods or to pay employees an additional hour of compensation for each workday that they missed a meal period. Id., at 3. Defense attorneys moved to dismiss the class action complaint and to compel arbitration based on the terms of the employment agreement with plaintiff, id., at 2. The employment agreement contained an arbitration clause as well as a provision waiving class action relief or the right to bring an action in “a private attorney general capacity.” Id. Plaintiff countered that the class action waiver was unconscionable, id. The trial court disagreed and granted Athens’ motion to compel plaintiff to proceed with arbitration on an individual basis. Id. The California Court of Appeal reversed, concluding that the class action arbitration wavier was unconscionable “given ‘the modest size of the potential individual recovery, the potential for retaliation against members of the class, [and] the fact that absent members of the class may be ill informed about their rights.’” Id. (quoting Gentry v. Superior Court, 42 Cal.4th 443, 463 (Cal. 2007)). The appellate court further held that the arbitration clause was unconscionable in that it sought to prevent plaintiff from serving as a private attorney general, it conflict with California’s Private Attorneys General Act of 2004 (PAGA). Id.

In its petition to compel arbitration and to dismiss the class action, Athens argued that the arbitration agreement was governed by the Federal Arbitration Act (FAA). Franco, at 3-4. Indeed, the employment agreement expressly provided that it was governed by the FAA, and that any arbitration would be conducted under the employment arbitration rules of the American Arbitration Association (AAA). Id., at 4. The petition to compel arbitration was simplicity itself: “Under the FAA, arbitration was mandatory.” Id. Plaintiff argued that the class action waiver was invalid under Discover Bank v. Superior Court, 36 Cal.4th 148 (Cal. 2005), which defense counsel sought to distinguish. Id., at 4-5. The trial court agreed that Discover Bank did not cover employment cases and granted the motion to compel. Id., at 5. Plaintiff sought reconsideration based on Gentry, which the trial court denied based in part on its conclusion that plaintiff’s meal and rest period claims were not suitable for class action treatment because of the specific inquiries that would be required of the various claims. See id., at 5-7.

Arbitration Class Action Court Decisions Employment Law Class Actions Uncategorized

Labor Law Class Action Lawsuits Hold 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 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 Lehman Brothers: Judicial Panel For Multidistrict Litigation (MDL) Grants Defense Motion To Centralize Class Action Litigation In Southern District Of New York

Judicial Panel Grants Defense Request for Pretrial Coordination of Individual and Class Action Lawsuits Pursuant to 28 U.S.C. § 1407, Over Opposition of Majority of Plaintiffs, and Transfers Actions to Southern District of New York Seventeen (17) individual and class actions – nine in New York, five Arkansas, two California and one in Arkansas – were filed against Lehman Brothers and various other defendants alleging that defendants had made materially false and/or misleading statements that negatively impacted the value of Lehman Brothers securities.

Class Action Court Decisions Multidistrict Litigation PSLRA/SLUSA Class Actions Uncategorized

Antitrust Class Action Defense Cases–In re Flat Glass: Pennsylvania Federal Court Denies Motion To Dismiss Antitrust Class Action Finding It Adequately Alleged The Existence Of An Agreement Or Conspiracy To Restrain Trade

Allegations in Class Action Complaint were Adequate to Defeat Motion to Dismiss Antitrust Class Action Pennsylvania Federal Court Holds Plaintiffs filed an antitrust class action against various defendants, consisting of “certain United States manufacturers of high quality flat glass used for construction and architectural applications (‘Construction Flat Glass’)”; the class action complaint asserted that the defendants engaged in price fixing in violation of §1 of the Sherman Act. In re: Flat Glass Antitrust Litig.

Class Action Court Decisions Multidistrict Litigation Uncategorized