FEMA Class Action Defense Cases-Ridgely v. FEMA: Fifth Circuit Reverses District Court Order Granting Preliminary Injunction Against FEMA Regarding Rental Assistance Benefits To Hurricane Victims

District Court Erred in Granting Preliminary Injunction in Class Action Against FEMA Alleging Arbitrary Denial of Continuing Rental Assistance Benefits for Individuals Displaced from Homes Following Hurricanes because Recipients did not have Property Interest in Those Benefits Fifth Circuit Holds

Plaintiffs filed a class action lawsuit against the Federal Emergency Management Agency (FEMA) arising out of FEMA’s administration of, and termination of benefits under, a rental assistance program instituted for individuals displaced from their homes by Hurricane Katrina and Hurricane Rita: specifically, the class action was brought “a class of individuals who received rental assistance payments from the federal government after Hurricanes Katrina and Rita, [and] alleg[ed] various constitutional and statutory deficiencies in the process by which the rental assistance program is administered.” Ridgely v. Federal Emergency Management Agency, 512 F.3d 727, 2008 WL 54799, *1 (5th Cir. 2008). The class action complaint alleged that FEMA could not terminate benefits under the program “until certain notice, hearing, and appeal procedures have been provided,” and plaintiffs’ lawyer moved for a preliminary injunction in order to require FEMA to continue making payments under the program until a decision on the merits of the class action claims. Id. Defense attorneys opposed the motion, arguing that recipients of benefits under the rental assistance program did not have a due process property interest in continued benefits thereunder, id. The district court issued the preliminary injunction requested by plaintiffs. Id. Defense attorneys filed an interlocutory appeal only from the issuance of the injunction, not from the granting of class action status, and the Fifth Circuit reversed.

Following Hurricanes Katrina and Rita, FEMA provided rental assistance “to individuals displaced from their homes on account of either storm” that was to be used by recipients “to rent alternate housing.” Ridgely, at *1. This program is governed by the Stafford Act, 42 U.S.C. § 5121 et seq. and FEMA’s implementing regulations, id. FEMA’s practice is to provide benefits in three-month blocks – that is, FEMA gives recipients “a single payment designed to cover rent for three months”; if assistance is needed beyond the three-month benefit provided, an application may be made for continued rental assistance which, if granted, are again made in three-month blocks. Id. After FEMA denied plaintiffs’ applications for continued rental assistance, id., at *2, they filed a class action “alleg[ing] due process violations in the process by which FEMA makes eligibility determinations for these additional awards.” Id., at *1.

We do not here discuss the provisions of the Stafford Act or FEMA’s regulations, or the process by which individuals qualify for assistance under the rental assistance program. See Ridgely, at *1. For present purposes, it is sufficient to note that FEMA has been “flexible” in its administration of the program, at times requiring minimal or even no documentation from applicants, and at other times requiring more detailed documentation in order to receive benefits or continued benefits. Id. The class action alleged that FEMA’s administration of the program is “arbitrary” and violates the Due Process clause, id., at *2. Specifically, the class action complaint “charged that FEMA: (1) denies applications for continued rent assistance by issuing notices containing only confusing codes, instead of understandable explanations; (2) operates an unresponsive system that precludes effective challenges to FEMA decisionmaking before the loss of assistance; and (3) fails to publish eligibility standards.” Id.

Class Action Court Decisions Uncategorized

Class Action Defense Cases-Grife v. Allstate: Eleventh Circuit Affirms Dismissal Of Class Action Complaint Against Insurer Holding Class Action Claims Fell Within Scope Of Exclusion To Coverage

District Court did not Err in Granting Defense Motion for Judgment on the Pleadings in Class Action Alleging Breach of Contract Claims Against Insurer Eleventh Circuit Holds Plaintiff filed a class action lawsuit against his condominium owner’s insurer, Allstate, for breach of contract Grife v. Allstate Floridian Ins. Co., 512 F.3d 1302, 2008 WL 89948, *1 (11th Cir. 2008). The class action complaint alleged his insurance policy obligated Allstate to “pay [plaintiff’s] share of any special assessments charged against the condominium owners by the association” as a result of damage to property collectively owned by the condominium association.

Class Action Court Decisions Uncategorized

Employment Law Class Action Lawsuits Record More Than Six (6) Times New Cases As Any Other Category Of Class Actions In “Slow” Week For New Class Action Filings In California State And Federal Courts

In order to assist California defense attorneys anticipate the types of class action lawsuits against which they will have to defend, 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.

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Best Buy Class Action Defense Cases-In re Best Buy: Judicial Panel On Multidistrict Litigation (MDL) Denies Plaintiff Motion To Centralize Class Action Litigation Agreeing With Defense That Class Actions May Proceed Separately

Judicial Panel Denies Plaintiff Request for Pretrial Coordination of Class Action Lawsuits Pursuant to 28 U.S.C. § 1407 because Only Two Class Actions were Pending, Issues were not “Sufficiently Complex and/or Numerous” to Warrant Centralization, and Alternatives Existed to Minimize Risk of Duplicative Discovery or Inconsistent Pretrial Rulings Two class action lawsuits were filed against Best Buy Stores and Best Buy Co. (one in Florida and one in Illinois) arising out of defendants’ business practices in charging restocking fees; Illinois plaintiff’s lawyer filed a motion with the Judicial Panel for Multidistrict Litigation (MDL) requesting centralization of the class actions pursuant to 28 U.

Class Action Court Decisions Multidistrict Litigation Uncategorized

Insurance Class Action Defense Cases-Record-A-Hit v. National Fire Insurance: Illinois Court Reverses Dismissal Of Third-Party Complaint Against Insurance Companies Seeking Defense Of Class Action Complaint Against Insured

Third-Party Complaint Against Insurers Seeking Declaratory Relief as to Duty to Defend and Indemnify Class Action Defendant Adequately Stated a Claim under State Law Illinois Court Holds

Plaintiff filed suit in Illinois state court against various insurance companies alleging they owed a duty to defend and indemnify their insured, Tri-State Hose and Fitting, against the class action plaintiff had filed against Tri-State. Record-A-Hit, Inc. v. National Fire Ins. Co. of Hartford, 880 N.E.2d 205, 2007 WL 3377263, *1 (Ill.App. 2007). The class action complaint against Tri-State, also filed in Illinois state court, alleged violations of the federal Telephone Consumer Protection Act (TCPA) and the state’s Consumer Fraud and Deceptive Practices Act, as well as conversion. Id. Defense attorneys moved to dismiss the lawsuit, arguing that plaintiff’s effort to secure defense of the class action “constitutes an impermissible direct action against liability insurance carriers” (a claim abandoned on appeal, see id., at *2), and that the complaint fails to adequately plead a claim for declaratory relief, id., at *1. The defense also argued that the lawsuit should be dismissed because there was “another action pending between the same parties for the same cause” and because plaintiff lacked standing to bring a third party action seeking defense of the class action on behalf of Tri-State. Id. The trial court granted the motion on the ground that it failed to state a claim, id. The Appellate Court reversed.

The gravamen of the underlying class action was that Tri-State sent junk faxes in violation of the TCPA, and the class action complaint alleged that Tri-State’s conduct caused “property damage.” Record-A-Hit, at *1. Plaintiff’s lawsuit against the insurers alleged that that had insured Tri-State against claims for property damage and advertising injury, but that they had wrongly refused to defend or indemnify Tri-State against plaintiff’s class action. Id. Tri-State had not filed suit against its insurers, and plaintiff was not a party to any other action seeking to establish Tri-State’s rights against its insurers with respect to the class action complaint. Id. The only issue before the court of appeal was whether the complaint against the insurers stated a claim for declaratory relief. Id. The Appellate Court held that under Illinois state law a claim for declaratory relief adequately had been pleaded.

Class Action Court Decisions Uncategorized

Discovery Class Action Defense Issues-Qualcomm v. Broadcom: California Federal Court Sanctions Plaintiffs’ Lawyers And Refers Six Lawyers To California State Bar For Disciplinary Proceedings For Withholding Electronic Discovery

Following Trial in Patent Infringement (Not Class Action) Lawsuit, California Federal Court Grants Defense Post-Trial Motion for Sanctions because of Plaintiff’s Misconduct in Intentionally Withholding Relevant Documents and Affirmative Misrepresentations to the Court and Opposing Party

In a decision important in class action and non-class action cases alike, a California federal court imposed sanctions yesterday on plaintiff and 6 of plaintiffs’ lawyers for failing to provide discovery and referred plaintiffs’ lawyers to the California State Bar. Qualcomm Inc. v. Broadcom Corp., ___ F.Supp.2d ___ (S.D.Cal. January 7, 2007) [Slip Opn., at 1-3]. The underlying lawsuit was not a class action but a patent infringement case filed by Qualcomm against Broadcom in October 2005; Broadcom filed a counterclaim in December 2006 and pleaded as an affirmative defense that the patents were not enforceable “due to waiver” and predicated its waiver claim “on Qualcomm’s participation in the Joint Video Team (‘JVT’) in 2002 and early 2003.” _Id._, at 3. Defense attorneys sought discovery concerning the JVT, _id._, but at trial testimony from a Qualcomm witness revealed that certain emails had not been produced as requested, _id._, at 1. At the conclusion of the trial, defense attorneys moved to sanction Qualcomm and its counsel for “fail[ing] to produce tens of thousands of documents that Broadcom had requested in discovery.” _Id._ The district court granted the motion in part, sanctioning Qualcomm and 6 of its lawyers and referring those 6 attorneys to the California State Bar for disciplinary proceedings.

While this case does not involve a class action lawsuit, the lessons to be learned from it are applicable equally to class action and non-class action lawsuits. In summarizing the factual background underlying the motion, the federal court noted that defense attorneys had used “a variety of discovery devices” to obtain information on Qualcomm’s participation in the JVT, including requests for production, interrogatories, and “multiple Rule 30(b)(6) deposition notices.” Slip Opn., at 3-4. The court observed at page 4 that “[o]n their face, Qualcomm’s written discovery responses did not appear unusual,” and provided examples thereof, see id., at 4-5. Qualcomm’s responses to the deposition notices, however, “were more troubling.” Id., at 5. For example, Qualcomm’s “most knowledgeable person” about the JVT was prepared for her deposition by plaintiff’s lawyers, but “Qualcomm did not search her computer for any relevant documents or emails or provide her with any information to review,” and she “testified falsely that Qualcomm had never been involved in the JVT.” Id., at 6 (italics added). After defense attorneys impeached the witness with documents showing Qualcomm’s involvement in the JVT, plaintiff’s lawyers “agreed to provide another Rule 30(b)(6) witness.” Id. Once again, however, Qualcomm failed to search the deponent’s computer for relevant documents and failed to “take any other action to prepare him,” id., and like the first witness, the new deponent “testified falsely that Qualcomm only began participating in the JVT in late 2003,” id. (italics added).

Class Action Court Decisions Uncategorized

Class Action Defense Cases-McCoy v. Superior Court: California Court Holds Class Action Labor Law Claims For Waiting Time Penalties Governed By One-Year Limitations Period And Grants Defense Motion To Strike Certain Class Action Claims

California Appellate Court Holds that Class Action Claims Seeking not Wages but Rather Waiting Time Penalties for Late Payment of Wages are Governed by One-Year Statute of Limitations Thus Supporting Defense Motion to Strike Portions of Class Action Complaint Plaintiff filed a class action against his employer, Kimco Staffing Services, which places temporary employees; the class action complaint alleged that Kimco “fail[ed] to timely pay final wages on completion of temporary work assignments in violation of [California] Labor Code sections 201 and 202.

Class Action Court Decisions Employment Law Class Actions Uncategorized

Class Action Defense Cases-Wyly v. Milberg Weiss: New York Court Holds Members Of Class Action Are Not “Clients” Entitled To Class Action Plaintiff Counsel’s Files Because Absent Class Members Play Limited Role In Class Action Litigation

Absent Class Members Play Limited Role in Class Action Lawsuits and do not Enjoy Traditional Attorney-Client Relationship with Class Action Counsel, so Absent Class Members must Establish Right to Review Files Maintained by Law Firm Representing Plaintiffs in Class Action on a Case-by-Case Basis New York Court Holds

In connection with a motion seeking court approval of a proposed class action settlement, Sam Wyly, an absent class member in the consolidated class action lawsuits, petitioned the trial court for discovery of the law firms representing the plaintiffs in the class actions. Wyly v. Milberg Weiss Bershad & Schulman, LLP, 2007 N.Y. Slip Opn 10506, *1-*2 (N.Y.App. December 27, 2007). The class action complaints had been filed against Computer Associates International (CA) alleging violations of federal securities laws; after numerous class actions had been filed, the law firms of Milberg Weiss Bershad & Schulman, Stull Stull & Brody, and Schiffrin Barroway Topaz & Kessler were appointed as co-lead counsel for plaintiffs and the various class action lawsuits were consolidated for settlement. Id., at *2. A federal court approved the class action settlement in December 2003, id. In October 2004, Wyly advised Milberg Weiss that he believed the class action settlement had been obtained fraudulently by CA based, in part, on “a report in The Wall Street Journal which stated that CA’s outside counsel had in its possession 23 boxes of undisclosed documents demonstrating that CA’s employees, including its general counsel, had engaged in securities fraud.” Id. Milberg Weiss responded that it would not move to reopen the judgment so Wyly filed such a motion himself, id. As part of his motion, Wyly sought the class action plaintiff law firms’ “discovery materials and work product related to the CA actions based upon the attorney-client relationship that existed between himself, as a class member, and [the law firms] as co-lead counsel.” Id., at *2-*3. The trial court granted the discovery request, but the appellate court reversed.

Wyly purchased almost 1,000,000 shares of CA stock, Wyly, at *2, so he held a significant interest in the class action litigation even though he was not a named plaintiff. As part of his motion to reopen the class action lawsuits, Wyly sought access to class counsel’s files “pursuant to their attorney-client relationship.” Id., at *3. (Wyly also sought and obtained discovery of the 23 boxes referenced in The Wall Street Journal, but that is not part of this discussion.) The class counsel law firms refused to permit discovery, and Wyly initiated special proceedings to obtain access to the files on the grounds that he “‘enjoys all privileges and rights pursuant to the attorney-client relationship between [the law firms] and Settlement Class members,’ including the right to access ‘attorney work product that was received, created, or maintained for the benefit of the entire Settlement Class.’” Id. The trial court agreed, relying on Matter of Sage Realty Corp. v. Proskauer Rose Goetz & Mendelsohn, 91 N.Y.2d (N.Y. 1997). Id., at *4.

Class Action Court Decisions Uncategorized

Class Action Defense Cases—California Court Of Appeal Grants Defense Request For Rehearing In Ticconi v. Blue Shield Class Action

Following its Original Panel Opinion Reversing Trial Court Denial of Plaintiff’s Class Action Certification Motion, California Court of Appeal Grants Defense Petition for Rehearing in Ticconi v. Blue Shield Class Action The Los Angeles Times reports today that the California Court of Appeal has agreed to reconsider its opinion in Ticconi v. Blue Shield of Cal. Life & Health Ins. Co., 157 Cal.App.4th 707, 68 Cal.Rptr.3d 785 (Cal.App. 2007), which reversed a trial court order denying class action status to a lawsuit against Blue Shield.

Class Actions In The News Uncategorized

Labor Law Class Action Lawsuits Dominate Weekly Class Action Filings In California State And Federal Courts

As a resource to 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. In light of the holidays, this report covers the two-week period of December 21, 2007 – January 3, 2008, during which time 57 new class action lawsuits were filed.

Class Actions In The News Uncategorized