Class Action Lawsuits Involving Employment-Related Claims Retain Top Spot Among New Class Action Filings In California State And Federal Courts

As a resource to California class action defense attorneys, we provide weekly, unofficial summaries of the legal categories for new class action lawsuits 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. We include only those categories that include 10% or more of the class action filings during the preceding week. This report covers September 5 – 11, 2008, during which time 31 new class action lawsuits were filed.

Class Actions In The News Uncategorized

Class Action Defense Cases—In re Aqua Dots: Judicial Panel On Multidistrict Litigation (MDL) Grants Defense Motion To Centralize Class Action Litigation In Northern District of Illinois

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 Northern District of Illinois Seven class actions were filed against defendants Spin Master Ltd. and Spin Master, Inc. in six federal district courts – one in New Jersey and one in Pennsylvania – arising out of the “design and manufacture of Aqua Dots” and/or challenging “the adequacy of the November 2007 voluntary recall of this product.

Class Action Court Decisions Multidistrict Litigation Uncategorized

Class Action Defense Cases—In re Puerto Rican Cabotage: Judicial Panel On Multidistrict Litigation (MDL) Grants Plaintiff Motion To Centralize Class Action Litigation But Transfers Class Actions To District Of Puerto Rico

Judicial Panel Grants Plaintiff Request for Pretrial Coordination of Class Action Lawsuits Pursuant to 28 U.S.C. § 1407, Unopposed by Other Class Action Plaintiffs or Defendants, but Rejects Southern District of Florida in Favor of District of Puerto Rico as Appropriate Transferee Court Five class actions – three in the Southern District of Florida, one in the Middle District of Florida and one in the District of Puerto Rico – were filed against Horizon Lines and others alleging “that defendants conspired to fix prices of cabotage services to and from Puerto Rico in violation of the Sherman Antitrust Act.

Class Action Court Decisions Multidistrict Litigation Uncategorized

Medicare Class Action Defense Cases–Uhm v. Humana: Ninth Circuit Affirms Dismissal Of Class Action Complaint Holding State Law Claims Concerning Medicare Prescription Drug Benefits Fell Within Express Preemption Of Federal Law

Class Action Claims Concerning Medicare Prescription Drug Benefits Fell Within Express Preemption Provision of Medicare Prescription Drug Improvement and Modernization Act of 2003 so District Court did not Err in Grant Defense Motion to Dismiss Class Action Complaint Ninth Circuit Holds Plaintiffs filed a putative class action complaint against Humana Health Plan, Inc. and Humana, Inc. (collectively “Humana”) concerning medication benefits under Medicare. Uhm v. Humana Inc., ___ F.3d ___ (9th Cir.

Class Action Court Decisions Uncategorized

CAFA Class Action Defense Cases – Louisiana v. Allstate: Fifth Circuit Holds State’s Parens Patriae Lawsuit Removable To Federal Court Under Class Action Fairness Act (CAFA) Based On “Real Parties In Interest” And “Real Nature” Of Action

Antitrust Lawsuit Brought by State on Behalf of Insurance Policyholders as a Parens Patriae Action, not a Class Action, Removable to Federal Court under Class Action Fairness Act (CAFA) because “Real Parties in Interest” were Policyholders and “Real Nature” of Lawsuit was “Mass Action” Fifth Circuit Holds

The State of Louisiana filed a parens patriae action (not a class action) against numerous insurance companies, including Allstate, State Farm, Farmers and USAA, alleging violations of the state’s antitrust laws; specifically, the complaint alleged that defendants “worked together to form a ‘combination’ that illegally suppressed competition in the insurance and related industries” and that “[i]n a scheme to thwart policyholder indemnity and in direct violation of their fiduciary duties, insurer defendants and others continuously manipulated Louisiana commerce by rigging the value of policyholder claims and raising the premiums held in trust by their companies for the benefit of policy holders to cover their losses as taught by McKinsey Company. Louisiana ex rel. Caldwell v. Allstate Ins. Co., 536 F.3d 418, 421-22 (5th Cir. 2008). Pursuant to the Class Action Fairness Act (CAFA), defense attorneys removed the lawsuit to federal court, id., at 422. The defense urged that the law was “in substance” a “class action” or a “mass action” within the meaning of the Class Action Fairness Act because it seeks treble damages on behalf of all Louisiana insurance policyholders. Id., at 423. Louisiana moved the district court to remand the action to state court, arguing that CAFA did not apply because the lawsuit was not a class action. Id., at 422-23. Focusing on who the “real parties in interest” are, the district court denied the motion. As permitted by the Class Action Fairness Act, the Fifth Circuit granted Louisiana permission to appeal the remand order. The central issue on appeal was “whether the ‘person who [was] injured in his business or property’ – in this case the policyholders – are the real parties in interest.” Id., at 430. The Fifth Circuit concluded, “We have no reason to believe that they are not,” id., and affirmed.

We do not here discuss the factual allegations in the State’s complaint. See Allstate, at 422-23. The Fifth Circuit summarized defendants’ arguments as follows: Even though the complaint is styled as a parens patriae action, it is “in substance and in fact” a class action within the meaning of the Class Action Fairness Act. Id., at 423. Defense attorneys argued that the fact Louisiana was not proceeding under Rule 23 was not dispositive; rather, they urged the district court to “look beyond the labels used in the complaint and determine the real nature of Louisiana’s claims,” and they “highlighted that several other similar purported class actions are and/or were pending before the same federal district court, where the same group of lawyers filed, or attempted to file, nearly identical claims as those alleged in this case by the state of Louisiana, as further evidence that this lawsuit is in fact a class action.” Id., at 423 (citations omitted). The Circuit Court explained at page 423 that “the district court was primarily concerned about who the real parties in interest are in this case.” The district court believed that he was obligated to examine the true nature of the lawsuit, explaining that “it’s the Court’s responsibility to not just merely rely on who a plaintiff chose to sue, or, in this case, how the plaintiff chose to plead, but I have to look at the specific substance” of the action. Id. The district court concluded that the State was but a nominal party, and the real parties were the insurance policyholders; accordingly, it concluded that the lawsuit was properly removable under CAFA and denied the motion to remand. Id.

Class Action Court Decisions Class Action Fairness Act (CAFA) Removal & Remand Uncategorized

Class Action Defense Cases–Yabsley v. Cingular: California State Court Affirms Dismissal Of UCL Class Action Holding Administrative Regulation Created Safe Harbor For Class Action’s False Advertising Claims Against Cingular

Class Action Challenging Wireless Phone Company’s Advertisements of Discounted Cell Phone Prices as False for Failing to Disclose that Sales Tax would be Calculated based on the Non-Discounted Price Falls within Safe Harbor Provision of State Administrative Regulation thereby Warranting Dismissal of Class Action Complaint California State Court Holds

Plaintiff filed a class action in California state court against Cingular Wireless alleging violations of the state’s unfair competition law (UCL): According to the class action complaint, Cingular advertises that it will give purchasers a 50% discount off the retail price of a wireless phone they enroll in a calling plan package. California’s Code of Regulations requires that Cingular compute the sales tax on the “non-sale price” of the phone, but does not require that this charge be passed on to the purchaser. Cingular does pass the sales tax on to its customers, but prior to sale does not advise them that the sales tax will be computed based on the full price of the phone. The class action alleged that Cingular engaged in false advertising “by failing to inform the consumer that the tax would be imposed on the full price of the cell phone.” Yabsley v. Cingular Wireless, LLC, ___ Cal.App.4th ___, 81 Cal.Rptr.3d 903 (Cal.App. August 18, 2008) [Slip Opn, at 1]. Defense attorneys demurred to the first amended class action complaint on the ground that the regulations provide a “safe harbor” for the payment of taxes such as the one underlying the class action’s UCL claim; the trial court sustained the demurrer without leave to amend. _Id._, at 1-2. The Court of Appeal affirmed.

The class action complaint alleges that Cingular “advertised a cell phone for $149.99, a 50 percent reduction in the phone’s retail price, if the purchaser enrolled in a Cingular wireless calling plan.” Yabsley, at 2. Plaintiff saw the advertisement and purchased the phone and enrolled in the plan: His sales receipt, however, disclosed that he had been taxed on the phone’s regular price of $299.99, rather than its discounted price, resulting in $11.62 more in sales tax. Id. Plaintiff filed his class action complaint against Cingular and the State Board of Equalization “asserting that Regulation 1585, governing taxation of sales of wireless communication devices, was invalid because it conflicted with Revenue and Taxation Code section 6051 imposing a sales tax on gross receipts.” Id. Plaintiff’s first amended class action complaint also named the Board and Cingular as defendants, but plaintiff dismissed the Board that same day. Id. The class action alleged that Cingular’s advertisements were deceptive because they “fail[ed] to apprise prospective customers that sales tax would be charged on the undiscounted price of the cell phone.” Id. Defense attorneys demurred, arguing that the safe harbor provided by Regulation 1585 (see Note) immunized Cingular against such claims: “This regulation requires that sales tax on a ‘bundled’ cell phone sale, i.e., a cell phone purchased with a call plan, be calculated based on the phone’s higher, unbundled price.” Id., at 3. The trial court agreed and dismissed the class action. Id.

Class Action Court Decisions Uncategorized

Class Action Defense Cases–Owner-Operator v. Landstar: Eleventh Circuit Reverses Judgment In Favor Of Defense But Affirms Decertification Of Class Action Status

District Court Certified Class Action but Subsequently Decertified Class Action as to Damages because of “Unique and Individualized Proof” Required by Class Action Allegations Eleventh Circuit Holds

The Owner-Operator Independent Drivers Association, which “represents truck owners and truck drivers who enter into lease agreements to provide equipment and services to haul freight in interstate commerce for Landstar System,” a U.S. Department of Transportation-approved motor carrier, filed a class action complaint against Landstar and others alleging defendants violated the federal Truth in Leasing regulations; specifically, the class action alleged that defendants “fail[ed] to disclose in their lease agreements that banking fee charges would be deducted from compensation paid to the truck owners and drivers” and “fail[ed] to provide documentation regarding the computation of charge-back items including pricing information submitted by Qualcomm.” Owner-Operator Independent Drivers Assn., Inc. v. Landstar System, Inc.., ___ F.3d ___, 2008 WL 4058042, *1 (11th Cir. 2008). The class action “sought damages and equitable relief, including restitution, disgorgement of Landstar’s profits, and injunctive relief.” _Id._, at *2. Defense attorneys moved to the complaint on the ground that the two-year statute of limitations had run the class action claims; the district court denied the motion, ruling that a four-year limitations period applied. _Id._, at *3. Eventually, the district court granted plaintiff’s motion to certify the litigation as a class action, _id._ The court noted, however, that “not all aspects of this case present common issues” and specifically stated that “if these common questions are resolved in favor of the putative class, the issue of damages will be unique and subject to individualized proof.” _Id._ The parties waved their right to a jury trial, _id._, and the district court ruled that “[the] only claims remaining in this action are those regarding injunctive relief, damages sustained, and attorney’s fees,” _id._, at *4. On the first day of trial, the district court granted defendant’s motion to decertify the class as to damages, explaining that “issues regarding damages sustained by individual members of the Class would require unique and individualized proof.” _Id._, at *4. However, the class action was not decertified with respect to the complaint’s prayer for injunctive relief. _Id._ Ultimately, the district court entered judgment in favor of Landstar on the issue of damages, and entered judgment as a matter of law in favor of Landstar. _Id._, at *5-*6. Plaintiff appealed seven of the district court’s rulings, _id._, at *6; defense attorneys filed a cross-appeal. The Eleventh Circuit affirmed in part and reversed in part.

We do not discuss the specific factual allegations leveled against Landstar. See Landstar, at *1-*3. For our purposes, the Circuit Court’s discussion of the class action certification issues is paramount. In this regard, based on its ruling that plaintiff had to prove actual damages, the district court decertified the class action. Id., at *16. The district court reasoned that “decertification is appropriate because the determination of the remaining issue of damages in this case on a class-wide basis is unfeasible, unmanageable, and would not be superior to individual actions.” Id. The Eleventh Circuit noted that there are “‘extreme cases in which computation of each individual’s damages will be so complex, fact-specific, and difficult that the burden on the court system would be simply intolerable…but we emphasize that such cases rarely, if ever, come along.’” Id. (citation omitted). The Circuit Court concluded that plaintiff “failed to establish that actual damages can be easily calculated for all class members, [so] the District Court did not abuse its discretion in decertifying the class for actual damages.” Id., at *17.

Certification of Class Actions Class Action Court Decisions Uncategorized

Labor Law Class Action Lawsuits Regain Top Spot Among New Class Action Filings In California State And Federal Courts During Past Week

In order to assist class action defense attorneys anticipate the types of cases against which they will have to defend in California state and federal courts, we provide weekly, unofficial summaries of the legal categories for new class action lawsuits 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. 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

MDL Antitrust Class Action Defense Cases–In re New Motor Vehicles: First Circuit Affirms Dismissal Of Class Action Holding Plaintiffs Lacked Standing To Prosecute Claims In Antitrust Class Action Complaint Because They Are “Indirect Purchasers”

Class Action Plaintiff Lessees of Vehicles were “Indirect Purchasers” – not “Direct Purchasers” – within the Meaning of Illinois Brick and therefore Lacked Standing to Prosecute Antitrust Claims in Class Action Complaint First Circuit Holds Plaintiffs, lessees of new cars, filed a class action against various automobile manufacturers alleging violations of the Sherman Act and the Clayton Act; the antitrust class action complaints alleged that “defendant manufacturers conspired to restrict the flow of cheaper Canadian cars into the U.

Class Action Court Decisions Multidistrict Litigation Uncategorized

Class Action Defense Cases–Kimoto v. McDonald’s: California Federal Court Denies Summary Judgment For Employer Because Fact Questions That Defeated Class Action Treatment Also Create Genuine Issues Of Material Fact

Labor Law Class Action Alleging Failure to Provide Meal and Rest Breaks not Entitled to Class Action Treatment but Questions of Fact Defeat Employer’s Motion for Summary Judgment as to Plaintiff’s Individual Claims California Federal Court Holds Plaintiff filed a class action complaint in California state court against her former employer, McDonald’s, on behalf of hourly, non-exempt employees; the class action alleged that she did not receive all of her meal or rest breaks.

Class Action Court Decisions Employment Law Class Actions Uncategorized