QVC Class Action Defense Cases–Mulligan v. QVC: Illinois State Court Affirms Denial Of Class Action Treatment And Summary Judgment In Favor Of Defense In Unfair Business Practice Class Action

Class Action Plaintiff Failed to Establish Proximate Cause Underlying Consumer Fraud Claim based on QVC’s “Retail Value” Comparisons of Retail Products, and Trial Court Properly Denied Plaintiff’s Motion for Class Action Certification and Properly Granted QVC’s Motion for Summary Judgment Illinois State Court Holds

Plaintiff filed a class action complaint in Illinois state court against QVC – a retailer of consumer products on television and on an Internet website – alleging violations of the state’s Consumer Fraud and Deceptive business Practices Act. Mulligan v. QVC, Inc., 888 N.E.2d 1190, 1192 (Ill.App. 2008). QVC generally lists a “comparative price” for its products; QVC airs on television “viewer education spots” that advise prospective customers that when it lists a “retail value” for a product, “that figure represents either an actual comparison-shopped price or the price QVC believes that the same or a comparable product would be offered by department stores or other retailers using a customary markup for that product category.” Id., at 1192-93. QVC also explains that the “retail value” listed “does not necessarily represent the prevailing retail price in every community, or the price at which the item was previously sold by QVC.” Id., at 1193. The class action complaint “alleged that QVC’s listed ‘retail value’ overstated the prevailing market price for certain products it sold and falsely created the impression that consumers were receiving a bargain by purchasing at lower QVC prices.” Plaintiff’s lawyer moved the trial court to certify the litigation as a class action, but the court denied the motion because “individual issues of law and fact predominated.” Id., at 1192. Defense attorneys then moved the court for summary judgment as to plaintiff’s individual claims; the trial court granted the defense motion, thereby terminating all individual and class claims in the putative class action. Id. Plaintiff appealed, arguing that the trial court erred in granting summary judgment and further erred in denying her motion for class action treatment. Id. The appellate court affirmed.

An understanding of the facts foretells the appellate court’s holdings. Plaintiff purchased more than 200 items from QVC, and specifies in her class action complaint four products that she purchased for substantially less than QVC’s listed “retail value”; the retail values ranged from $39-$60, and plaintiff paid from $26.75-$38.12. Mulligan, at 1193. Plaintiff’s expert testified that “she determined comparable prices for the products [plaintiff] purchased from QVC by using a cost and a market approach to valuation,” and that in so doing the retail value for some items was actually less than the amount paid by plaintiff, though she “did not factor in ay applicable sales tax, shipping and handling, or other additional costs.” Id., at 1194. The expert also admitted that the “margin of error on her appraisal” could be $5, and that there were “other factors” that QVC properly could have considered but that she did not incorporate into her appraisals. Id. Plaintiff’s purchased these items for many reasons, “including whether the product was appealing, affordable, an impulse purchase, on sale, and whether she was searching for a particular product.” Id., at 1193. She found it convenient to shop from home, and felt like she was part of the QVC “family.” Id. She had seen QVC’s education spots, and admitted that at times she believed the retail value listed by QVC “seemed…awfully high,” but she would make the purchase because she still believed that she was paying a fair price for the item. Id. Additionally, plaintiff purchased items from QVC even if it did not list a retail value, and plaintiff continued to make purchases from QVC even after she filed her class action complaint. Id. As the appellate court explained at page 1193, “[plaintiff] acknowledges that a consumer could not legitimately claim to be actually deceived by QVC’s retail values if the consumer continued to purchase the products after suing QVC.”

Certification of Class Actions Class Action Court Decisions Uncategorized

Labor Law Class Action Defense Cases–Advanced-Tech v. Superior Court: California State Court Reverses Denial Of Defense Summary Judgment Motion Holding Class Action’s Failure To Pay Overtime Claim Failed As A Matter Of Law

Defense Entitled to Summary Judgment on Class Action Claim Seeking Triple Time for Overtime Hours Worked on Holidays because Employer Only Obligated to Pay Time-and-a-Half for Overtime, including Hours Worked on Holidays, California State Court Holds Plaintiff, a security guard, filed a putative class action against her employer, Advanced-Tech Security Services, for failure to pay overtime. Advanced-Tech Security Services, Inc. v. Superior Court, 77 Cal.Rptr.3d 757, 759 (Cal.App. 2008). Defendant’s employee handbook explained the company’s policies for overtime and holiday pay, and provided that all hours worked in excess of 40 hours per week would be paid at 1½ times normal rate and that all hours worked on any of six specified holidays will be paid at the regular rate for employees who do not work on those holidays and at 1½ times normal rate for employees who do work on those holidays.

Class Action Court Decisions Employment Law Class Actions Uncategorized

ERISA Class Action Defense Cases-Nichols v. Alcatel: Fifth Circuit Affirms Denial Of Class Action Plaintiffs’ Motion For Preliminary Injunction Holding Plan Was A Welfare Plan Rather Than A Benefit Plan And Plaintiffs Not Likely To Prevail On Class Action

Class Action Plaintiffs Failed to Establish Likelihood of Success on the Merits of ERISA Violations Alleged in Class Action Complaint so District Court Properly Denied Request for Preliminary Injunction that Sought to Enjoin Employer from Implementing Changes to Benefit Plan Fifth Circuit Holds Plaintiffs, retired employees of Alcatel USA, filed a putative class action against Alcatel alleging violations of ERISA (Employee Retirement Income Security Act); according to the class action complaint, Alcatel improperly eliminated retirement medical benefits of the putative class members and breached fiduciary duties owed to the class.

Class Action Court Decisions Employment Law Class Actions Uncategorized

ERISA Class Action Defense Cases–Nauman v. Abbott Laboratories: Illinois Federal Court Denies Defense Motion For Summary Judgment On ERISA Class Action Complaint Holding Conduct “As A Whole” Warranted Trial

Defense Summary Judgment in ERISA Class Action Complaint Erroneously Attacked Class Action Claims as Separate and Distinct, but when Defendants’ Conduct was Considered as a Whole, Genuine Issues of Material Fact Existed Sufficient to Defeat Summary Judgment Illinois Federal Holds

Plaintiffs filed a class action lawsuit against their former employer, Abbott Laboratories, and their new employer, Hospira, a newly-created corporate entity, after Abbott spun off its Hospital Products Division (HPD) to Hospira. The class action complaint alleged that the manner in which defendants spun off HPD violated sections 510 and 404 of ERISA. Nauman v. Abbott Labs., ___ F.Supp.2d ___ (N.D.Ill. July 10, 2008) [Slip Opn., at 1]. The four-count class action alleged that, in order to save money associated with the costs of its pension and retiree medical benefits plans for older workers, (1) Abbott terminated HPD employees with the specific intent of denying them retirement benefits, (2) as part of that scheme, Abbott refused to rehire employees transferred to Hospira within two years of the transfer, (3) as part of that scheme, Hospira refused to hire Abbott employees who retired and collected benefits from Abbott, and (4) Abbott breached fiduciary duties owed under § 404 “by making deliberate misrepresentations about the benefits that post-spin-off employees could expect at Hospira.” _Id._, at 1-2. Defense attorneys moved for summary judgment on the class action claims on the grounds that Abbott argued that it had legitimate business reasons for spinning off HPD. _Id._, at 2, 16. The district court held that while the claims may be subject to attack if viewed individually, when the course of conduct are viewed as whole the class action adequately presented genuine issues of material fact as to whether defendants acted with a specific intent to deny benefits to retirees in violation of ERISA.

After providing a lengthy discussion of the material facts, see Nauman, at 5-12, and the legal standard governing § 510 claims under ERISA, see id., at 12-15, and § 404 claims under ERISA, see id., at 16, the district court turned to the merits of the defense motion. The federal court admitted that by “dissecting” the claims in the class action and “examining each in isolation,” the summary judgment motions were “generally persuasive” and “convincing[],” id., at 16. But the district court explained that the motions were “premised on the assumption that the several counts of plaintiffs’ complaint arise out of independent and unrelated events,” id., at 17. The defense motions thus overlook the thrust of the class action – viz., “that the termination alleged in Count I, coupled with the policies challenged in Counts II and III, constitute a ‘scheme’ that Abbott conceived, and that the defendants jointly adopted, with the specific intent of avoiding the payment of projected benefits.” Id., at 18. The court considered defendants’ conduct “as a whole,” id., at 20, and concluded that genuine issues of material fact existed sufficient to warrant a trial on the § 510 class action claims, id., at 21-22.

Class Action Court Decisions Uncategorized

Labor Law Class Action Lawsuits Continue To Dominate New Class Action Filings In California State And Federal Courts

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

Class Action Defense Cases—In re Packaged Ice: Judicial Panel On Multidistrict Litigation (MDL) Grants Plaintiffs’ Motions To Centralize Class Action Litigation And Selects Eastern District of Michigan As Transferee Court

Judicial Panel Grants Plaintiffs’ Requests for Pretrial Coordination of Class Action Lawsuits Pursuant to 28 U.S.C. § 1407, Unopposed by other Class Action Plaintiffs and Unopposed by any Class Action Defendants, but Among Various Options Selects Eastern District of Michigan as Transferee Court Thirty-seven (37) class actions – twelve actions in the Eastern District of Michigan, ten actions in the District of Minnesota, seven actions in the Northern District of Texas, four actions in the Northern District of Ohio, and one action each in the Northern District of California, the Southern District of California, the District of Kansas and the Southern District of Ohio – were filed against various defendants, including Reddy Ice Holdings, Reddy Ice, Arctic Glacier Income Fund, Arctic Glacier, Inc.

Class Action Court Decisions Multidistrict Litigation Uncategorized

California Governor Weighs In On Appellate Court Opinion In Brinker Restaurant Class Action

This morning we posted an article on yesterday’s California Court of Appeal opinion in Brinker Restaurant Corp. v. Superior Court, _\_Cal.App.4th __ (Cal.App. July 22, 2008). We failed to mention that yesterday California’s Governor, Arnold Schwarzenegger, issued a press release on the opinion, and on the topic of employee meal and rest breaks. The Governor’s press release states: We are pleased that the California Court of Appeal issued today a decision squarely addressing many of the central issues in dispute concerning meal and rest periods.

Class Actions In The News Uncategorized

Labor Law Class Action Defense Cases–Brinker v. Superior Court: California Appellate Court Reverses Trial Court Order Certifying Labor Law Class Action Holding Employers Need Not “Ensure” Employees Take Meal And Rest Breaks

Trial Court Erred in Granting Class Action Treatment to Complaint Alleging Labor Law Violations because Employer need only “Provide” Meal and Rest Periods to Employees but need not “Ensure” that Meal and Rest Breaks are Taken California State Court Holds

Plaintiffs filed a class action in California state court against Brinker Restaurant, Brinker International and Brinker International Payroll alleging labor law violations; specifically, the class action complaint alleged that Brinker failed to provide its employees with meal and rest breaks. Brinker Restaurant Corp. v. Superior Court, _\_Cal.App.4th __ (Cal.App. July 22, 2008) [Slip Opn., at 3]. Plaintiffs moved the trial court to certify the litigation as a class action, and the court granted the motion. Id. The central issue in the class action was whether an employer must ensure that employees take meal and rest breaks in order to comply with California law, or whether it is sufficient to make available meal and rest breaks; the Court of Appeal held that an employer is not responsible for ensuring that employees take meal and rest breaks to which they are entitled. Id., at 3-4. Accordingly, the appellate court granted defendants’ petition for writ of mandate and reversed the trial court’s class action certification order.

Defendants have a written policy, on a form signed by each employee, that sets forth the statutory meal and rest periods and acknowledging that the employee may be disciplined or terminated for failing to take those breaks. Brinker, at 5. Employees also are required to clock in and out so that defendants may maintain accurate records for payroll purposes, id., at 5-6. Plaintiffs’ class action complaint alleged that defendants failed to provide meal and rest breaks, id., at 7-8. The class action alleged further that defendants required employees to take “early lunches” and then required that they work upwards of 9 hours without any additional meal period, id., at 8. Finally, the class action alleged that defendants required employees to work “off the clock,” id., at 8-9. Plaintiffs argued that employers “must ‘ensure’ that the employee takes meal periods,” id., at 9. The trial court an employer must give employees a meal break “before [an] employee’s work period exceeds five hours,” and that the purpose of the statute is “to provide employees with break periods and meal periods toward the middle of an employee[‘]s work period in order to break up that employee’s ‘shift.’” Id., at 10.

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

T-Mobile Class Action Defense Cases–Zaldivar v. T-Mobile: Washington Federal Court Denies Defense Motion to Dismiss Class Action Finding Class Action Complaint Adequately Pleaded Claims For Relief

Class Action Complaint Adequately Pleaded Claims Against T-Mobile because Claims were not Premised on Fraud, so Rule 9(b) did not Apply, and because Claims Sufficiently Pleaded Breach of Contract, Unjust Enrichment and Violation of Consumer Protection Act Washington Federal Court Holds Plaintiff filed a class action complaint T-Mobile USA alleging unfair business practices in connection with cellular telephone text messaging; specifically, the class action alleged that “T-Mobile charges customers for the receipt of unsolicited text messages, and does not adequately disclose the practice in its contract with customers.

Certification of Class Actions Class Action Court Decisions Uncategorized

TILA Class Action Defense Cases–Megitt v. IndyMac: Massachusetts Federal Court Dismisses Class Action Holding Technical Deficiencies In TILA 3-Day Notice Of Right To Cancel Underlying Class Action Claims Were Not Actionable

Defense Motion to Dismiss Truth in Lending Act (TILA) Class Action Granted because Failure to Specify Date by which Right to Cancel must be Exercised was merely a Technical TILA Violation and, Viewed Objectively, a Reasonably Alert Borrower would have Understood her Rights Massachusetts Federal Holds

Plaintiffs filed a putative class action against IndyMac for violations of the federal Truth in Lending Act (TILA); the class action complaint alleged that IndyMac failed to provide the requisite notice of a borrower’s three-day right to cancel because the disclosure “[left] blank the specific date by which the notice of cancellation had to be sent.” Megitt v. IndyMac Bank, F.S.B., 547 F.Supp.2d 56, 56 (D.Mass. 2008). More specifically, the class action complaint revealed that IndyMac provided plaintiffs with a Notice of Right to Cancel, which stated in part that the borrower had “a legal right under federal law to cancel this transaction, without cost, within three (3) business days from whichever of the following events occurs last: (1) the date of the transaction, which is: June 16, 2006; or (2) the date you received your Truth in Lending disclosures; or (3) the date you received this notice of your right to cancel.” Id., at 57-58. However, the class action further alleged that IndyMac’s notices provided, “If you cancel by mail or telegram, you must send notice no later than midnight of, ______, (or midnight of the third business day following the latest of the three events listed above).” Id., at 58. Thus, the notices from IndyMac left the date blank, id. Defense attorneys moved to dismiss the class action: The chief magistrate issued and report and recommendation that the motion to dismiss should be granted, relying in part on Palmer v. Champion Mortgage, 465 F.3d 24 (1st Cir. 2006), and the district court adopted the recommendation. Id., at 57. The federal court explained at page 57, “The import of the First Circuit’s Palmer decision with regard to the purely technical omission in the document embodying the notice makes the ruling here compelling and inevitable.” Accordingly, the court dismissed the class action.

Defense attorneys argued that, under the First Circuit’s decision in Palmer, the “technical” deficiency underlying the class action is not actionable under TILA, Regulation Z or Massachusetts state law. Megitt, at 58. Palmer, from which the district court quoted at length, essentially holds that if a lender’s 3-day notice of a borrower’s right to cancel tracks the model form for such disclosures is “at the very least, prima facie evidence of the adequacy of the disclosure.” Id., at 59 (quoting Palmer, at 29). As the district court noted, “The court went so far as to recognize that there was both statutory and case law support for the proposition that adherence to a model form bars a TILA non-disclosure claim entirely” but “it left ‘for another day the question of whether such adherence invariably brings a creditor within a safe harbor.’” Id. n.2 (citations omitted). Palmer also explained that courts should rely on “the text of the disclosures themselves rather than on plaintiffs’ descriptions of their subjective understandings,” and base their decisions on objectively reasonable factors rather than the plaintiff’s subjective understanding, id., at 59 (citations omitted).

Class Action Court Decisions RESPA/TILA Class Actions Uncategorized