Class Action Defense Cases-Mills v. Giant: D.C. Circuit Upholds District Court Dismissal Of Class Action Against Sellers Of Milk For Failing To Warn That Some Purchasers May Be Lactose-Intolerant

Class Action Alleging Milk Processors and Retailers Breached a Duty to Warn Purchasers that They may be Lactose Intolerant Failed to State a Tort Claim under D.C. law District of Columbia Circuit Holds In what the Circuit Court of Appeals for the District of Columbia charitably characterized as “an unusual class-action lawsuit,” plaintiffs filed a putative class action against nine sellers of milk – seven dairy processors and two grocery stores – alleging “that they consumed milk before they were aware of their lactose intolerance and, as a result, suffered temporary gas and stomach discomfort.

Class Action Court Decisions Uncategorized

NYSE Class Action Defense Cases-In re NYSE Specialists: Second Circuit Upholds District Court Dismissal Of Class Action Against New York Stock Exchange Holding Absolute Immunity Applied To Its Quasi-Governmental Regulatory Role

NYSE Entitled to Absolute Immunity Against Class Action’s Regulatory Violations Claims but District Court Misinterpreted Rule 10b-5 Case Law Regarding Standing in Dismissing Balance of Class Action Complaint thus Necessitating Remand as to those Claims Second Circuit Holds

Plaintiffs filed a class action against the New York Stock Exchange (NYSE) seeking damages for its alleged failure to “regulate and provide a fair and orderly market” as required by federal law and for violations of Rule 10b-5. In re NYSE Specialists Securities Litig., 503 F. 3d 89, 90-91 (2d Cir. 2007). The class action alleged that the NYSE, a nonprofit corporation that oversees the world’s largest stock exchange and facilitates trades for more than 2800 companies through seven Specialist Firms, “which are charged with managing ‘the stocks assigned to them to create a fair, competitive, orderly and efficient market,’” allowed the Specialist Firms to manipulate the prices at which it traded stocks to their own financial benefit. Id., at 91-92. NYSE defense attorneys moved to dismiss the class action complaint’s Rule 10b-5 claim arguing that plaintiffs’ lacked standing; defense attorneys moved to dismiss the class action’s regulatory claims on the ground that the NYSE enjoyed absolute immunity. Id., at 91. Lawyers for lead-plaintiff California Public Employees’ Retirement System (CalPERS) and Empire Programs countered that the NYSE lost this immunity because it “abandoned its regulatory role to maintain a fair and orderly market” and acted contrary to its quasi-governmental powers “when it permitted and encouraged misconduct and fraud on its trading floor.” Id. The district court agreed with defense counsel and dismissed the class action claims against the NYSE, id. The Second Circuit affirmed the judgment with respect to the regulatory claims, agreeing with the district court that the NYSE enjoyed absolute immunity and that the fraud exception did not save the class action claims; the Circuit Court reversed, however, as to the Rule 10b-5 claim.

Preliminarily, the Circuit Court recognized that “[t]he substantial powers of, and the near-total control exercised by, the Specialist Firms over any given stock on the NYSE create an opportunity to manipulate the market for self-gain.” In re NYSE, at 92. An SEC investigation precipitated this class action, as that SEC report reportedly found “that the NYSE had failed ‘to police its elite floor-trading firms’ and ‘ignor[ed] blatant violations’ of prohibitions on self-dealing,” and concluded “that the Exchange was ‘an in-house regulator either ill-quipped or too worried about increasing its workload to care’; and that the NYSE had ‘no meaningful surveillance, allowing inappropriate behavior to continue’ and causing ‘significant’ customer harm totaling in the hundreds of millions of dollars.” Id., at 93-94. According to the class action complaint, however, the NYSE repeatedly released statements to the public alleging that it provided oversight of the daily functions of the Specialist Firms, id., at 94, and that the members of the putative class action relied on those misrepresentations in choosing to trade stocks listed on the NYSE, id., at 95.

Class Action Court Decisions PSLRA/SLUSA Class Actions Uncategorized

Employment Law Class Action Lawsuits Continue To Dominate Categories Of Class Action Cases Filed In California State And Federal Courts

To aid class action defense attorneys anticipate the types of class actions against which they will have to defend in California, 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 Class Action Defense Cases-In re Internal Revenue Service: Judicial Panel On Multidistrict Litigation (MDL) Grants Plaintiff Motion To Centralize Class Action Litigation In The District Of Nevada

Judicial Panel Grants Plaintiff’s Request, Over Defense and Other Plaintiff Objection, for Pretrial Coordination of Class Action Lawsuits Pursuant to 28 U.S.C. § 1407 and Transfers Class Action to District of Nevada Two class actions were filed in California and Nevada against various defendants because individuals who sought to engage in a § 1031 exchange using defendants Southwest Exchange (SWX) and/or Qualified Exchange Services as the facilitator suffered losses due to the alleged misconduct of various defendants.

Class Action Court Decisions Multidistrict Litigation Uncategorized

Securities Class Action Defense Cases-Levine v. AtriCure: New York Federal Court Denies Defense Motion In Securities Fraud Class Action To Dismiss Claims Of Class Action Plaintiff On Ground That He Suffered No Loss

Determination of Loss Causation Inappropriate at Pleading Stage and Plaintiffs Satisfied PSLRA (Private Securities Litigation Reform Act of 1995) Standard for Lead Plaintiff New York Federal Court Holds

Plaintiffs filed a putative class action against AtriCure, Inc. alleging violations of the federal securities laws in connection with its initial public offering (IPO) for allegedly failing to disclose material facts in the company’s Registration Statement. Levine v. AtriCure, Inc., 508 F.Supp.2d 268, 270-71 (S.D.N.Y. 2007). Defense attorneys moved to dismiss plaintiff Levine’s claims in the class action complaint, and plaintiffs James Duncan and Jackie Byrd moved to be appointed lead plaintiffs; the district court denied the defense motion and granted the plaintiffs’ motion, id., at 270.

The only relevant facts for purposes of this article’s discussion are (1) Duncan purchased 200 shares of stock in October 2005 for an average of $12.85 and sold the stock in March 2006 when it was trading at $7.36; (2) Byrd purchased 100 shares of stock in August 2005 for $14.19 a share and sold most of her stock in May 2006 when the stock was $7.90, and the rest in December 2006 for $9.28 a share; and Levine purchased 250 shares of stock in August 2005 for $12 a share and sold them in November 2005 at $11.80 a share for a total loss of $50. Levine, at 271 and n.3. The defense motion to dismiss was based on the insignificant loss suffered by Levine and on the fact that he sold his shares prior to the publication of a Wall Street Journal article that purportedly misled class members into purchasing the company’s stock. Id., at 271.

Certification of Class Actions Class Action Court Decisions PSLRA/SLUSA Class Actions Uncategorized

Class Action Defense Cases-Capitol People v. Dep’t of Developmental Services: California Appellate Court Reverses Court Order Denying Class Action Certification And Affirmatively Holds Class Action Treatment Warranted For Lanterman Act Claims

In Denying Class Action Certification Motion, Trial Court Erred in Examining Commonality from Perspective of Individual Class Member Claims rather than Overarching Conduct of Defendants Applicable to Entire Class California Court Holds

A wide array of plaintiffs filed a putative class action for injunctive and declaratory relief against various State of California defendants for failure to provide community living arrangements under California’s Lanterman Developmental Disabilities Services Act and alleging a “systemic failure of the state agencies and regional centers to provide proper oversight and enforce constitutional, statutory and regulatory mandates to place individuals in less restrictive community settings when appropriate.” Capitol People First v. Dep’t of Developmental Services, 155 Cal.App.4th 676, 66 Cal.Rptr.3d 300, 304-05 (Cal.App. 2007). Plaintiffs sought class action certification; defense attorneys opposed class action treatment on the ground that commonality did not exist, that plaintiffs were not adequate class representatives, and that a class action was not the superior means of resolving the issues in dispute. Id., at 305. The trial court agreed with defense counsel and denied class action certification; the Court of Appeal reversed and affirmatively instructed the trial court to grant plaintiffs’ motion for class action treatment.

California’s Lanterman Act, enacted in 1977, “establishes a comprehensive scheme for providing services to people with developmental disabilities” and provides that “[t]o the maximum extent feasible, services and supports should be available throughout the state to prevent the dislocation of persons with developmental disabilities from their home communities.” Capitol People, at 305 (citation omitted). The theme underlying the class action was that individuals were being institutionalized in violation of the Lanterman Act, and sought to enforce the right of developmentally disabled individuals “to live, with appropriate supports, in [their local] neighborhoods.” Id., at 308. The class action complaint challenged the State’s pattern and practice of “under-funding” of community services so as to require institutionalization, id., at 308-09. Importantly, ten institutionalized individuals and two organizations sought leave to intervene on the ground that the named plaintiffs’ interests were “hostile” to their own, and that “the relief they sought would impair the rights of those persons whose needs are best met in a developmental center.” Id., at 310. The trial court granted limited intervention, id.

In response to plaintiffs’ motion for class action certification, the trial court held that (1) commonality did not exist, (2) plaintiffs were not adequate class representatives, and (3) class action treatment was not the superior means of redress; rather, the fair hearing procedure provided under the Lanterman Act adequately redresses individual grievances. Capitol People, at 310. With respect to commonality, the appellate court held that the trial court failed to appreciate the difference between the “system relief” sought by the class action complaint and the “individual solutions to individual problems” that were at the heart of the interveners’ objections. Id., at 311-12. The trial court focused in “discrete wrongs,” and concluded that “common issues of fact would not predominate because the deficiencies, variables and pertinent lines of inquiry would be individualized.” Id., at 312. The Court of Appeal recognized that legal authority existed in support of the trial court’s holding, see id., at 312-13 and J.B. ex rel. Hart v. Valdez, 186 F.3d 1280 (10th Cir. 1999), but held that under California law “courts can take an aggregate approach to plaintiffs’ claims,” id., at 313. Thus viewed, the question was not whether differences existed among the various claims of putative class members but rather whether the defendants utilized “common policies and practices generally applicable to all putative class members.” Id. The Court of Appeal held that commonality did exist, explaining at page 315: “The overarching theme is that there is a pattern and practice of failure to meet constitutional, statutory and regulatory mandates to provide services and place class members in less restrictive settings, and the systemic effect of this failure is to impinge plaintiffs’ rights under state and federal law.” Such “systemic relief” could not be sought or obtained on a case-by-case basis. Id.

Certification of Class Actions Class Action Court Decisions Uncategorized

JDSU Class Action Defense Attorneys Secure Jury Verdict In Federal Securities Class Action Lawsuit

Class Action Defense Attorneys Obtain California Federal Court Jury Verdict in Favor of JDSU in Securities Fraud Case News media report today that JDSU obtained a jury verdict in the securities class action filed in the United States District Court for the Northern District of California. While JDSU welcomed the verdict, the company continues to defend itself against other securities class action lawsuits.

Class Actions In The News Uncategorized

Class Action Defense Cases-Azizian v. Federated: Ninth Circuit Holds Attorney Fees Under Clayton Act Not Awardable Against Objector To Class Action Settlement Of Antitrust Class Action

As Matter of First Impression, Rule 7 Bond Covering “Costs on Appeal” Includes Attorney Fees Awardable Under Fee-Shifting Statute but not Attorney Fees Awardable Under Rule 38 for Frivolous Appeals Ninth Circuit Holds

Plaintiffs filed a class action lawsuit against Federated Department Stores alleging federal antitrust violations in connection with the sale of cosmetics. Azizian v. Federated Dep’t Stores, Inc., 499 F. 3d 950, 954 (9th Cir. 2007). Almost two years later, the district court approved a class action settlement of all class claims on behalf of a nationwide class, id. One member of the class, Kamela Wilkson, objected to the class action settlement and appealed the order approving the settlement; in response, class action plaintiffs requested an appeal bond under FRAP Rule 7 in the amount of $12.8 million, including appellate attorney fees. Id. The district court ordered the objector to post a $42,000 bond – $2,000 for costs and $40,000 for attorney fees, id. While noting a split in authority, the district court required the objector to post bond for attorney fees because (1) the Clayton Act’s fee-shifting provision defines attorney’s fees as recoverable costs, and (2) “the Court of Appeals [was] likely to find that the instant appeal[ ] [was] frivolous.” Id. The objector posted only the $2,000 to cover costs on appeal; plaintiff’s asked the Ninth Circuit’s motions panel to dismiss the appeal for failure to post the requisite bond, but the motion was denied without prejudice. Id. As permitted by the motions panel, plaintiffs renewed this motion in conjunction with their brief on the merits of the class action settlement.

The Ninth Circuit noted that the appeal from the class action settlement presented two issues: (1) as a matter of first impression, “whether, or under what circumstances, appellate attorney’s fees are ‘costs on appeal’ that a district court may require an appellant to secure in a bond” under Rule 7, Azizian, at 953; and (2) whether the appeal should be dismissed for failure to post bond as ordered by the district court, id., at 954. With respect to the first issue, after a lengthy examination of sister circuit cases, see id., at 955-958, the Circuit Court held that “costs on appeal” under Rule 7 “includes all expenses defined as ‘costs’ by an applicable fee-shifting statute, including attorney’s fees,” id., at 958. But while the Ninth Circuit held that attorney fees recoverable under Section 4 of the Clayton Act fell within this test, it further held that attorney fees could not be recovered from an objector to a class action settlement because “unlike some other fee-shifting provisions, Section 4 is asymmetrical.” Id., at 959. Put simply, “Ordering one class member to pay other class members’ appellate attorney’s fees because of a disagreement about the propriety of settlement would not serve the purpose of Section 4 to penalize and deter those who have violated the antitrust laws.” Id., at 960.

Class Action Court Decisions Uncategorized

Class Action Defense Cases-Howard v. Gutierrez: District Of Columbia Federal Court Denies Motion To Reconsider Ruling Striking Class Action Allegations Holding Delay In Seeking Class Action Certification Was Not Excusable

Local Rule Requiring Class Action Certification Motion be Filed Within 90 days of Class Action Complaint runs from Filing of First Class Action Complaint not from any Subsequent Amended Class Action Complaint and District of Columbia Federal Court Holds Contrary Interpretation to be “Untenable” and “Unreasonable”

Plaintiffs filed a putative class action against the Department of Commerce (DOC) and its Secretary for violations of Title VII alleging that the performance-review system resulted in systemic racial discrimination. Defense attorneys moved to dismiss the individual claims and to strike the class action allegations. The district court granted the motion in part, striking the class action claims. See Howard v. Gutierrez, 474 F.Supp.2d 41 (D.D.C. 2007). Plaintiffs sought reconsideration and certification of an interlocutory appeal. Howard v. Gutierrez, 503 F.Supp.2d 392, 393-94 (D.D.C. 2007). The district court denied the motion for reconsideration and refused to certify an interlocutory appeal.

With respect to the motion for reconsideration, the district court noted that the Federal Rules of Civil Procedure do not expressly authorize such motions and that they are “typically treat[ed]…as motions to alter or amend a judgment” under Rule 59(e). Howard, at 394. Reconsideration motions are addressed to the sound discretion of the court, are not “lightly” granted, and are not to be used to present arguments “that could have been advanced earlier.” Id. (citations omitted). With that background, the district court first rejected plaintiffs’ attempt to “rehash” arguments made previously with respect to their failure to file a motion for class action certification within 90 days of the filing of the class action complaint, and held that any new arguments in support of this old theme could have been raised earlier. Id. The district court concluded at page 394, “There has been no intervening change in controlling law, nor have plaintiffs advanced new evidence not previously available to them. Finding nothing in plaintiffs’ motion that warrants revisiting its prior holding, the Court now reaffirms that the ninety-day period in Local Rule 23.1(b) applies from the date of the filing of the first complaint to assert class claims.”

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

FACTA Class Action Defense Cases-In re Boscov’s Department Store: Judicial Panel On Multidistrict Litigation (MDL) Grants Defense Motion To Centralize Class Action Litigation But Selects District of New Jersey As Transferee Court

Judicial Panel Grants Defense Request, Over Objection, for Pretrial Coordination of Class Action Lawsuits Pursuant to 28 U.S.C. § 1407 but Agrees With Plaintiff’s Request to Transfer Class Actions to District of New Jersey Three class action lawsuits were filed against Boscov’s Department Store alleging violation of the federal Fair and Accurate Credit Transactions Act (FACTA). In re Boscov’s Dep’t Store, LLC, Fair & Accurate Credit Transactions Act (FACTA) Litig., ___ F.

Class Action Court Decisions FCRA Class Actions Multidistrict Litigation Uncategorized