FDCPA Class Action Defense Cases–Camacho v. Bridgeport Financial: Ninth Circuit Vacates Fee Awarded FDCPA Class Action Plaintiff Lawyers Due To District Court’s Failure To Explain Hourly Rate Utilized And Failure To Use Lodestar To Award Fees-On-Fees

Following Class Action Settlement Providing for Award of Reasonable Attorney Fees to Plaintiff’s Lawyers in FDCPA Class Action, District Court Failed to Explain Why $200 per hour was Reasonable for the Relevant Community and Failed to Determine Lodestar for Fees-on-Fees Request, thus Requiring that Fee Award be Vacated and Matter Remanded for Further Proceedings Ninth Circuit Holds

Plaintiff debtor filed a putative class action against Bridgeport Financial, a debt collector, alleging violations of the federal Fair Debt Collection Practices Act (FDCPA); the class action complaint alleged that defendant “misrepresented the rights of consumers in its initial collection letter by requiring her to dispute her debt in writing.” Camacho v. Bridgeport Financial, Inc., _\_F.3d __ (9th Cir. April 22, 2008) [Slip Opn., at 4242-43]. The district court granted class action certification of a statewide class, and the parties entered into a Class Action Settlement Agreement that the district court ultimately approved. Id., at 4243. The Ninth Circuit opinion identifies but a single benefit provided by the class action settlement for the 7,000 class members – a cy pres award of $341.50; the agreement provided that the named plaintiff receive $1,000 in actual and statutory damages. Id. The Class Action Settlement Agreement provided further that plaintiffs’ three law firms could file a motion for attorney fees and costs if the parties could not agree on the amount of such an award, id. Plaintiff’s lawyers sought almost $170,000 in attorney fees and costs, reflecting hourly rates ranging from $425 to $500 for the attorneys, and $115 to $200 for law clerks, id., at 4243-44. The district court found the hours spent by plaintiff’s lawyers to be reasonable, but reduced the reasonable hourly rate to $200 for all attorneys and awarded a flat fee of $500 for the motion seeking fees and costs, which the court found to be “virtually identical to the materials these attorneys have submitted in other cases.” Id., at 4245-46. In the end, the district court awarded approximately $77,000 in fees and costs, id., at 4246. The lawyers appealed, and the Ninth Circuit reversed and remanded for further proceedings.

The Circuit Court noted that under the terms of the Class Action Settlement Agreement defendant “agreed to pay reasonable and necessary attorneys’ fees and costs.” Camacho, at 4247. The Court stated that the FDCPA “makes an award of fees mandatory.” Id. The Ninth Circuit explained that the district court’s order would be reversed only for clear error, id., at 4246 (citation omitted), and that and that district courts are required to use the “lodestar” method for determining the amount of attorney fees to be awarded, id, at 4247 (citations omitted). The lodestar takes the reasonable hourly rate and multiplies it by the reasonable number of hours incurred by counsel, id.; because the district court found that the hours spent by plaintiff’s lawyers were reasonable, the only issue was whether the district abused its discretion in reducing the hourly rate for plaintiff’s lawyers to $200 per hour. Id., at 4247-48.

Class Action Court Decisions FDCPA Class Actions Uncategorized

FAA Class Action Defense Cases–Kaltwasser v. Cingular Wireless: California Federal Court Refuses To Enforce Class Action Arbitration Wavier Or Arbitration Clause In Wireless Service Agreement Holding It Unconscionable Under California Law

Defense Motion to Compel Individual Arbitration of Class Action Claims under Wireless Service Contract Denied because Arbitration Agreement, which Included Class Action Waiver, was Unconscionable California Federal Court Holds

Plaintiff filed a putative class action against Cingular Wireless alleging violations of the California’s Business and Professions Code and Consumer Legal Remedies Act, and for breach of contract; specifically, the class action complaint alleged that plaintiff signed up for wireless service with Cingular, and renewed his service based “on advertising that identified Cingular as the wireless service with the fewest dropped calls,” but that this representation is untrue. Kaltwasser v. Cingular Wireless LLC, 543 F.Supp.2d 1124, 1126-27 (N.D. Cal. 2008). Defense attorneys moved to compel arbitration pursuant to the Federal Arbitration Act (FAA). Id. The arbitration clause in plaintiff’s wireless service contract provided that the parties “agree to arbitrate all disputes and claims arising out of or relating to this Agreement for Equipment or services between Cingular and you” and contained a class action waiver. Id., at 1127. Cingular modified the arbitration clause so as to state in part, “Cingular and you agree to arbitrate all disputes and claims between us. This agreement to arbitrate is intended to be broadly interpreted. It includes, but is not limited to: claims arising out of or relating to any aspect of the relationship between us …; claims that arose before this or any prior Agreement (including, but not limited to, claims relating to advertising); claims that are currently the subject of purported class action litigation in which you are not a member of a certified class; and claims that may arise after the termination of this agreement.” Id. The district court denied the motion.

The district court began its analysis by observing that the FAA applies “to all written contracts involving interstate or foreign commerce” and was “enacted to overcome longstanding judicial reluctance to enforce agreements to arbitrate.” Kaltwasser, at 1127. On the other hand, the FAA does not “entirely displace[]” state law. Id., at 1128. The court recognized that the FAA governed the dispute, so the question is whether the contract was enforceable under state law. Id. The first question was one of choice of law. The contract defined the governing law as that of “the state of your billing address”; but plaintiff’s address was in California when he entered into the contract and in Virginia when he filed suit. Id., at 1128. The district court held that California law governed the contract. Id., at 1128-30.

Arbitration Class Action Court Decisions Uncategorized

Securities Fraud Class Action Defense Cases–In re Savient Pharmaceuticals: Third Circuit Affirms Dismissal Of Securities Class Action Holding Class Action Complaint Failed To Allege Scienter With Requisite Specificity

District Court did not Err in Dismissing Securities Class Action Without Leave to Amend because Second Amended Class Action Complaint Failed to Adequately Plead Scienter Third Circuit Holds Plaintiff filed a putative class action against Bio-Technology General Corp. (now known as Savient Pharmaceuticals) and three of its officers and directors for violations of federal securities laws by allegedly “making false and misleading statements about the corporation’s financial performance in 1999, 2000, and 2001.

Class Action Court Decisions PSLRA/SLUSA Class Actions Uncategorized

Dell Class Action Defense Cases–Fiser v. Dell: New Mexico Supreme Court Reverses Trial Court Order In Class Action Staying Class Action Lawsuit And Compelling Plaintiff To Arbitration His Individual Claim Holding Class Action Waiver Unenforceable

Trial Court Order in Unfair Business Practice Class Action Against Dell Granting Defense Motion to Stay Class Action and Compel Plaintiff to Arbitration his Individual Claim must be Reversed because New Mexico’s “Fundamental Public Policy” Requires use of Class Action Device in Small Claims Matters New Mexico Supreme Court Holds

Plaintiff filed a putative class action lawsuit in New Mexico state court against Dell Computer alleging inter alia violations of the state’s unfair business practices laws and false advertising; the class action alleged that Dell “systematically misrepresents the memory size of its computers.” Fiser v. Dell Computer Corp., ___ P.3d ___ (N.M. June 27, 2008) [Slip Opn., at 3]. The class action further alleged that the monetary damage suffered by each class member was only $10-$20, _id._ Defense attorneys moved the trial court to stay the class action and to compel arbitration under the Federal Arbitration Act (FAA) of the plaintiff’s individual claim; the defense motion was premised on the fact that plaintiff purchased his computer online and that the “terms and conditions” applicable to such Dell website purchases required purchasers to individually arbitration their claims and precluded them pursuing a class action. _Id._, at 3-4. The trial court granted the defense motion, ruling that plaintiff was bound by the arbitration clause and the class action waiver. _Id._, at 4. The Court of Appeals affirmed, and plaintiff petitioned the New Mexico Supreme Court for a writ of certiorari. _Id._ The Supreme Court reversed, holding that “the class action ban is contrary to fundamental New Mexico public policy,” _id._

Preliminarily, the Supreme Court addressed the question of whether New Mexico or Texas law applied. Fiser, at 4. The Court explained at page 4, “The threshold question in determining the validity of the class action ban is which state’s law must be applied to this potentially multi-state class action that was filed in New Mexico by a New Mexico resident against a defendant that maintains its principal place of business in Texas for damages relating to a contract that contains a choice-of-law clause directing that Texas law be applied.” The resolution of this issue was crucial because “[a]pplication of Texas law to the instant matter would likely require enforcing the class action ban.” Id., at 5. New Mexico law would respect the choice-of-law clause, and apply Texas law, “[u]nless enforcement of the class action ban would run afoul of fundamental New Mexico public policy,” id. The Supreme Court held that “[t]he class action device is critical to enforcement of consumer rights in New Mexico.” Id., at 6. The Court recognized that the state’s Uniform Arbitration Act – which “declares that arbitration clauses that require consumers to decline participation in class actions are unenforceable and voidable,” id., at 6 – “may be preempted by the FAA,” id., at 7. However, it also explained that “the class action functions as a gatekeeper to relief when the cost of bringing a single claim is greater than the damages alleged.” Id., at 7-8. Thus, “a contractual provision that purports to ban class actions for small claims implicates not just the opportunity for a class action but the more fundamental right to a meaningful remedy for one’s claims.” Id., at 8. Under the circumstances of this putative class action, the New Mexico Supreme Court found that, because plaintiff’s actual damages were no more than $20, denying class action relief would “essentially foreclose[] the possibility that Plaintiff may obtain any relief.” Fiser, at 8. And because “New Mexico’s fundamental public policy requires that consumers with small claims have a mechanism for dispute resolution via the class action,” applying Texas law would run contrary to this public policy so New Mexico law governed the dispute. Id., at 9.

Arbitration Class Action Court Decisions Uncategorized

Class Action Defense Cases—In re Virgin Mobile IPO: Judicial Panel On Multidistrict Litigation (MDL) Grants Defense Motion To Centralize Class Action Litigation But Transfers Class Actions To New Jersey

Judicial Panel Grants Defense Request for Pretrial Coordination of Class Action Lawsuits Pursuant to 28 U.S.C. § 1407, Over Objection of Plaintiff’s Lawyers in New Jersey Class Action, but Transfers Class Actions to the District of New Jersey Four class actions – one in New Jersey and three in New York – were filed against various defendants arising out of the allegation that “Virgin Mobile distributed a materially false and misleading registration statement and prospectus in connection with Virgin Mobile’s initial public offering.

Class Action Court Decisions Multidistrict Litigation Uncategorized

Class Action Defense Cases—In re Nissan: Judicial Panel On Multidistrict Litigation (MDL) Grants Defense Motion To Centralize Class Action Litigation In Middle District of Tennessee

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 Agrees to Transfers Class Actions to Middle District of Tennessee Five class actions were filed in five different federal district courts against Nissan North America and others alleging that defendants “violated the Federal Odometer Act by similarly altering the odometers in Nissan and Infiniti vehicles to inflate the mileage driven.

Class Action Court Decisions Multidistrict Litigation Uncategorized

Class Action Defense Cases—In re Merrill Lynch: Judicial Panel On Multidistrict Litigation (MDL) Grants Unopposed Defense Motion To Centralize Individual And Class Action Litigation In Southern District Of New York

Judicial Panel Grants Defense Motion for Pretrial Coordination of Individual and Class Action Lawsuits Pursuant to 28 U.S.C. § 1407, Unopposed by Individual and Class Action Plaintiffs and Supported by Some Responding Individual and Class Action Plaintiffs, and Transfers Actions to Southern District of New York Eighteen (18) individual and class action lawsuits were filed (1 in New Jersey and 17 in New York) against Merrill Lynch and other defendants “arising from Merrill Lynch’s conduct and representations regarding its investments in collateralized debt obligations secured by subprime mortgage debt.

Class Action Court Decisions Multidistrict Litigation Uncategorized

Employment Class Action Lawsuits Again Top List Of New Class Action Cases Filed 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 June 27 – July 2, 2008, during which time 39 new class action lawsuits were filed.

Class Actions In The News Uncategorized

Class Action Defense Cases—In re Chocolate Confectionary: Judicial Panel On Multidistrict Litigation (MDL) Grants Plaintiffs Motions To Centralize Individual And Class Action Litigation But Selects Middle District of Pennsylvania

Judicial Panel Grants Plaintiffs Motions for Pretrial Coordination of Individual and Class Action Lawsuits Pursuant to 28 U.S.C. § 1407, Unopposed by Other Individual and Class Action Plaintiffs and by Responding Defendants, and Transfers Individual and Class Action Lawsuits to Middle District of Pennsylvania Twenty (20) individual and class action lawsuits were filed in seven (7) different federal district courts against several defendants alleging federal antitrust violations arising out of the allegation that the defendants “conspired to fix, raise, maintain and/or stabilize the price of chocolate confectionary products in the United States at supracompetitive levels.

Class Action Court Decisions Multidistrict Litigation Uncategorized

FACTA Class Action Defense Cases—In re Oilily: Judicial Panel On Multidistrict Litigation (MDL) Grants Plaintiff Motion Unopposed By Defense 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, Unopposed by any Class Action Defendants, and Transfers Class Actions to Northern District of California Two class actions – one in California and one in Pennsylvania – were filed against Oilily and others alleging violations of the federal Fair and Accurate Credit Transactions Act (FACTA). In re Oilily Fair & Acc. Cred. Trans.

Class Action Court Decisions Multidistrict Litigation Uncategorized