ERISA Class Action Defense Cases-In re RadioShack: Judicial Panel On Multidistrict Litigation (MDL) Grants Defense Motion To Centralize ERISA Class Action Litigation In Northern District of Texas

Judicial Panel Grants Defense Request, Over Objection of Certain Plaintiffs, for Pretrial Coordination of ERISA Class Action Lawsuits Pursuant to 28 U.S.C. § 1407 and Concurs with Defense Request to Transfer Class Actions to Northern District of Texas Four class action lawsuits – there in the Northern District of Texas and one in the Eastern District of Texas – were filed against RadioShack and other defendants alleging breach of fiduciary duties under the federal Employee Retirement Income Security Act (ERISA).

Class Action Court Decisions Employment Law Class Actions Multidistrict Litigation Uncategorized

CAFA Class Action Defense Cases-Weber v. Mobil Oil: Tenth Circuit Dismisses Appeal Of Order Remanding Class Action To State Court Holding Class Action Fairness Act (CAFA) Did Not Afford Jurisdiction To Consider Appeal

Order Granting Intervention to New Party Plaintiffs did not “Commence” Class Action for Purposes of Removal Jurisdiction under CAFA (Class Action Fairness Act of 2005) Tenth Circuit Holds

Plaintiffs, owners of royalty interests filed a class action lawsuit in Oklahoma state court against Mobil Oil and Mobil Exploration & Producing, North America: The class action complaint, filed in May 2001, “sought damages for breach of contract, breach of plan unitization, conversion, fraud, breach of fiduciary duties, and for a violation of the Oklahoma Production Revenue Standards Act.” Weber v. Mobil Oil Corp., 506 F.3d 1311, 1312 (10th Cir. 2007). The class action complaint was amended in December 2004 to add Mobil Exploration & Producing, U.S. and Mobil Natural Gas, Inc. as party-defendants, id., at 1313. In September 2005, defense attorneys removed the putative class action to federal court under the Class Action Fairness Act of 2005 (CAFA ). Id. The federal court remanded the class action to state court, and defense attorneys sought leave to appeal the remand order. Id. The Tenth Circuit denied the request, concluding that the class action did not fall within the scope of CAFA and, accordingly, that it lacked jurisdiction to consider the appeal.

As a preliminary matter, the Tenth Circuit noted that the parties agreed that the class action was properly removed to federal court if the Class Action Fairness Act applied. Weber, at 1314 n.4. The original complaint was filed in 2001, but in October 2004 other members of the putative class filed a “similar, though not identical, class action in federal district court against the same two defendants.” Id., at 1313. The federal court class action defined the class more broadly than the state court class action, and it additionally sought certain damages not requested in the state court complaint. Id. In December 2004, the state court class action complaint was amended to add Mobil Exploration & Producing, U.S. and Mobil Natural Gas, Inc. as defendants, neither of which was ever named in the federal court class action. Id. In September 2005, plaintiffs in the federal and state court actions agreed that the class action pending in federal court would be voluntarily dismissed and a petition for leave to intervene filed in the state court class action, id. As part of the intervention motion, the plaintiff-intervenors “sought to assert class claims under its expanded class definition and to assert the additional claims for damages and equitable relief it raised in its federal petition.” Id. The state court granted the motion for intervention, but restricted the intervenors to the claims and class definition asserted in the then-pending state court complaint, id. Based on the granting of the motion for intervention, defense attorneys for Mobil Exploration & Producing, U.S. and Mobil Natural Gas, Inc. removed the class action to federal court, arguing that CAFA provided removal jurisdiction; plaintiffs moved to remand the class action to state court on the ground that CAFA did not apply, and the district court ordered remand. Id.

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

Honda Class Action Defense Cases-Vaughn v. American Honda: Fifth Circuit Rejects Arguments By Parties To Class Action And Reduces Rule 7 Bond Required To Appeal Class Action Settlement From $150,000 To $1,000

District Court Abused Discretion by Requiring Any Objector to Class Action Settlement Post $150,000 Bond in Order to Appeal Approval of Class Action Settlement Fifth Circuit Holds

Plaintiffs filed a class action against American Honda Motor alleging that the odometers in certain vehicles overstated the actual mileage. Vaughn v. American Honda Motor Co., Inc., 507 F.3d 295, 297 (5th Cir. 2007). Eventually the parties agreed upon a proposed settlement of the class action, including certification of a settlement class: “The proposed settlement provides some class members various forms of relief, including warranty extensions, lease extensions, lease refunds, and repair reimbursements.” Id. The class action settlement was estimated to cost Honda $115 million, but “[the] value on the open market would be approximately $244 million.” Id. Among the terms of the class action settlement was the requirement that Honda pay $10 million in lease refunds, but did not provide any compensation to class members who had sold or traded their vehicle, id., at 297-98. Various class members objected to the proposed settlement, including one individual (Hawthorn) who had sold his vehicle; the district court overruled the objection and required any objector post a $150,000 bond as part of any appeal. Id., at 297. The objector asked the Circuit Court to reduce the amount of the bond to $1,000.00, and the Fifth Circuit agreed.

In opposing the class action settlement, “Hawthorn specifically objected that the settlement provides no compensation to him or other class members who sold or traded their vehicles. He contends that the settlement should include amounts for ‘diminution in value,’ or value lost on a sale or trade-in due to inflated odometer readings.” Vaughn, at 298. The federal court disagreed and overruled the objection, id. Apparently reflecting the frustration experienced by many class action plaintiff lawyers to the role played by professional objectors, class counsel asked the district court to require an appeal bond under FRAP 7 be posted by any objector who filed a notice of appeal. Id. Based on the “detrimental impact of an appeal as to the entire class,” and the court’s “opinion” that any objector’s appeal will carry with it the “significant possibility” that any appeal will be subject to summary denial and an award of attorney fees and costs under FRAP 38, the district court granted the motion and set the appeal bond at $150,000. Id.

Class Action Court Decisions Uncategorized

MERRY CHRISTMAS/HAPPY HOLIDAYS FROM THE CLASS ACTION DEFENSE BLOG

The author of the Class Action Defense Blog wishes all of you a very happy holiday season. A new class action article will be published tomorrow.

Class Actions In The News Uncategorized

Class Action Defense Cases-In re Korean Air Lines: Judicial Panel On Multidistrict Litigation (MDL) Grants Unopposed Plaintiff Motion To Centralize Class Action Litigation And Selects Central District of California As Transferee Court

Judicial Panel Grants Plaintiffs’ Request, Unopposed by Defense, for Pretrial Coordination of 25 Antitrust Class Action Lawsuits Pursuant to 28 U.S.C. § 1407, and Transfers Class Actions to Central District of California Twenty-five class action lawsuits were filed in six (6) federal district courts (10 in the Northern District and 2 in the Central District of California, 10 in the Western District of Washington, and 1 each in Massachusetts, Nevada and the Eastern District of New York) against Korean Air Lines and Asiana Airlines alleging that they “conspired to fix prices of passenger airfares between the United States and Korea in violation of the Sherman Antitrust Act.

Class Action Court Decisions Multidistrict Litigation Uncategorized

Federal Court Dismisses Class Action Against Lawyer-Rating Website Avvo

The Wall Street Journal reports today that U.S. District Court Judge Robert Lasnik of Seattle, Washington, has dismissed a putative class action against lawyer-rating website Avvo. The class action complaint challenged Avvo’s method of rating lawyers, and was filed by two lawyers who objected to the ratings they had received. According to The Wall Street Journal, the district court “ruled that there was no basis for cracking down on a lawyer-rating Web site merely because some of its rates didn’t like how they were portrayed.

Class Actions In The News Uncategorized

Federal Securities Law Class Action Defense Cases-In re Sterling Financial: Judicial Panel On Multidistrict Litigation (MDL) Grants Plaintiff Motion To Centralize Class Action Litigation In Eastern District of Pennsylvania

Judicial Panel Grants Plaintiffs’ Request for Pretrial Coordination of Class Action Lawsuits Pursuant to 28 U.S.C. § 1407 and Rejects Defense Attorney Request to Transfer Class Actions to Southern District of New York Seven class action lawsuits were filed against various defendants alleging violations of federal securities laws based on allegations that Sterling Financial “issued materially false and misleading statements relating to its wholly-owned subsidiary, EFI, which artificially inflated Sterling’s stock price.

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

Class Action Defense Cases—Class Action Counsel Seek Relief From Key Provision Of Proposed Settlement Agreement In Vioxx Class Action Litigation

Key Provision that Class Action Counsel Recommend Proposed Settlement of Class Action to All Clients Challenged by Certain Plaintiff Lawyers As the hearing date on approval of the proposed Vioxx class action settlement nears, some of the lawyers for class action plaintiffs are seeking out of a key part of the settlement agreement. Specifically, the proposed settlement requires plaintiff counsel recommend the settlement to all of their clients; now, however, lawyers representing thousands of class action plaintiffs want permission to advise their clients to reject the deal.

Class Actions In The News Uncategorized

FedEx Class Action Defense In Labor Law Class Action Lawsuits Braces For Impact Of IRS Ruling That FedEx Ground-Delivery Personnel Are Employees Rather Than Independent Contractors

Corey Dade of The Wall Street Journal reports today that the Internal Revenue Service has dealt a blow to FedEx in connection with labor law class action claims. Dade reports that the IRS “has determined that the roughly 13,000 independent contractors for Fed Corp.’s U.S. ground-delivery business in 2002 were, in fact, employees and assessed the company $319 million in back taxes and fines.” The article, based on information disclosed by FedEx in a filing with the Securities and Commission, characterizes the IRS ruling as “the most significant blow to an embattled model whose low operating costs have been critical to [its] rapid growth.

Class Actions In The News Uncategorized

Class Action Lawsuits Increase Dramatically Led By Substantial Rise In Securities Class Action Filings And Class Action Cases Arising Out Of Subprime Meltdown

The New York Times reported yesterday that class action lawsuits are on the rise because “[l]itigation stemming from the housing crisis is driving an increase in class-action filings.” The article, by Karen Donovan, states that class action filings in 2007 are up 58% from class action cases in 2006; while not explicitly stated in the article, it is clear that Ms. Donovan is referring to securities class actions only. The Wall Street Journal reports slightly different figures today, with an article by Nathan Koppel putting the increase in securities class action lawsuits at 43%.

Class Actions In The News Uncategorized