HAPPY THANKSGIVING FROM THE CLASS ACTION DEFENSE BLOG

The author of the Class Action Defense Blog wishes all of you a very Happy Thanksgiving, and urges class action defense counsel to take the day off! A new class action article will be published tomorrow.

Class Actions In The News Uncategorized

Class Action Defense Cases-Pisciotta v. Old National Bancorp: Seventh Circuit Upholds District Court Dismissal Of Class Action Seeking Monitoring Of Credit Reports For Failure To Seek Damages Compensable Under Indiana Law

District Court Properly Granted Defense Motion for Judgment in Class Action Alleging Theft of Personal Information and Seeking Damages for Cost of Monitoring Credit Reports Because Class Action Complaint Failed to Allege Compensable Damages under Indiana Law Seventh Circuit Holds

Plaintiffs filed a putative class action against Old National Bancorp, which operates a website that permits people to complete applications online for loans and other banking services, alleging that the Bank had obtained personal information from consumers through its website but “failed to secure it adequately” thus permitting a hacker “to obtain access to the confidential information of tens of thousands of [Bank] site users.” Pisciotta v. Old National Bancorp, 499 F.3d 629, 631 (7th Cir. 2007). According to the class action allegations, the online application forms “differ depending on the service requested, but some forms require the customer or potential customer’s name, address, social security number, driver’s license number, date of birth, mother’s maiden name and credit card or other financial account numbers.” Id. The class action complaint sought relief in the form of “compensation for past and future credit monitoring services that they have obtained in response to the compromise of their personal data,” id. Notably, the class action did not allege that any class member had suffered “direct financial loss…as a result of the breach” or that any putative class member had suffered identity theft as a result of the breach, id., at 632. Defense attorneys attacked the class action with a motion for judgment on the pleadings, arguing that under Indiana law plaintiffs had failed to allege any cognizable injury, id. The district court agreed with the defense and dismissed the class action, id., at 631. The Seventh Circuit affirmed.

The class action complaint alleged that plaintiffs had entered personal information on the Bank’s website, and that in 2005 NCR, a website host, informed the Bank of a security breach that, in the words of the Seventh Circuit, “was sophisticated, intentional and malicious.” Pisciotta, at 631-32. Nonetheless, in granting the defense motion for judgment on the class action complaint, the district court held that plaintiffs failed to allege that the security breach “caused them cognizable injury” because “under Indiana law, damages must be more than speculative” so “plaintiffs’ allegations that they had suffered ‘substantial potential economic damages’ did not state a claim.” Id., at 632 (italics added). The Circuit Court affirmed.

Class Action Court Decisions Uncategorized

Precertification Discovery Class Action Defense Cases-Putnam v. Eli Lilly: Prior To Certification Of Class Action California Federal Court Compels Defense To Produce Names And Addresses Of Absent Class Members In Labor Law Class Action Case

Labor Law Class Action Plaintiff’s need for Contact Information of Potential Class Members to Discover Evidence in Support of Class Action Certification Motion Outweighed Privacy Rights of Absent Class Members thus Warranting an Order Compelling Disclosure of such Information California Federal Court Holds Plaintiff, a pharmaceutical representative, filed a class action complaint against employer Eli Lilly alleging misclassification and failure to pay overtime, and failure to provide meal breaks, in violation of California’s state labor laws.

Class Action Court Decisions Employment Law Class Actions Uncategorized

Class Action Defense Cases-Hall v. Sprint: Illinois State Court Upholds Class Action Treatment Of Class Action Challenging Early Termination Fees Charged Cellular Phone Customers

Class Action Certification of 48-State Class Proper because Sprint-Drafted Choice-of-Law Provision Selected Kansas Law to be Applied to Class Action Claims Illinois State Court Holds

Plaintiff filed a putative class action in Illinois state court against her wireless communications provider, Sprint, alleging various state law claims for relief each premised on the theory that early termination fees are unlawful penalties. Hall v. Sprint Spectrum L.P., 876 N.E.2d 1036 [Slip Opn., at 1-2 (Ill.App. 2007). The class action complaint alleged in part violations of Illinois’s Consumer Fraud and Deceptive Business Practices Act and sought to prosecute a state-wide class action under the statute, but alleged further violations of other state consumer protection statutes and sought to prosecute a nation-wide class action as to those claims. Id., at 2. Defense attorneys opposed plaintiff’s motion for class action certification, but the trial court granted the motion. Id., at 1. The defense appealed, and the Illinois appellate court affirmed the order granting the lawsuit class action treatment.

The class action complaint alleged that plaintiff had entered into a one-year contract with Sprint for two separate lines and agreed to pay a $150 early termination fee if she canceled service within that year: Within the one-year period, Sprint canceled plaintiff’s service because of nonpayment but refused her request to cancel her contract unless she paid the amounts owed, including the early termination fee. Hall, at 1-2. Plaintiff paid the entire amount demanded by Sprint on one of her lines, including the $150 early termination fee, but she could not afford to pay the termination fee on the second line and “Sprint refused to cancel the account and stop the accrual of charges unless [she] paid the early termination fee for the second cell phone number.” Id., at 2. This amount was never paid, id. Instead, plaintiff filed her class action lawsuit challenging the early termination fees as “unlawful penalties.” Id. Ultimately, the trial court granted plaintiff’s request for class action certification of a 48-state class action, id.

Certification of Class Actions Class Action Court Decisions Uncategorized

New Labor Law Class Action Lawsuits Filings Decrease But Employment Claims Continue To Lead Categories Of Class Action Cases Filed In California State And Federal Courts This Past Week

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 the time period of November 9 – November 15, 2007, during which time 46 new class action lawsuits were filed in these courts.

Class Actions In The News Uncategorized

FLSA Class Action Defense Cases—In re Wayne Farms: Judicial Panel On Multidistrict Litigation (MDL) Grants Defense Motion To Centralize Class Action Litigation In Southern District of Mississippi

Unopposed Defense Request for Pretrial Coordination of Class Action Lawsuits Alleging Violations of Fair Labor Standards Act (FLSA) Pursuant to 28 U.S.C. § 1407 Granted by Judicial Panel A dozen class action lawsuits were filed against Wayne Farms LLC alleging violations of the federal Fair Labor Standards Act (FLSA); specifically, the various class action complaints claimed that defendant failed to pay employees compensation due under the FLSA. In re Wayne Farms LLC Fair Labor Standards Act Litig.

Class Action Court Decisions Employment Law Class Actions Multidistrict Litigation Uncategorized

Class Action Defense Cases-Borochoff v. Glaxosmithkline: New York Federal Court Refuses To Appoint German Institutional Investor Group As Lead Plaintiff and Counsel In Class Action Due To Uncertainty In German Law

Uncertainty as to Validity of Foreign Judgment under German Procedural Law Raises Serious Concerns of Party’s Ability to Serve as Lead Plaintiff in Securities Fraud Class Action New York Federal Court Holds Plaintiffs filed a securities fraud class action against Glaxosmithkline based on statements made about diabetes drug Avandia that failed to disclose the increased risk of heart attack. Borochoff v. Glaxosmithkline PLC, ___ F.Supp.2d ___, 2007 WL 2907812, *1 (S.

Class Action Court Decisions Uncategorized

Class Action Defense Cases-Employers-Teamsters v. Anchor Capital: Ninth Circuit Dismisses Appeal By Non-Party That Sought Lead Plaintiff Status In Class Action Holding It Lacked Standing To Appeal

Party that Sought to Serve as Lead Plaintiff in Securities Class Action but was not Selected and did not File its own Lawsuit or Motion to Intervene Lacked Standing to Appeal District Court Order Denying it Lead Plaintiff Status or Granting Motion to Dismiss Uncertified Class Action Complaints with Prejudice Ninth Circuit Holds

In 2003, plaintiff Anchor Capital filed four putative class action lawsuits against Watson Pharmaceuticals alleging violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934; the district court consolidated the class actions and granted the motion of Anchor Capital to be appointed lead plaintiff in accordance with the PSLRA (Private Securities Litigation Reform Act), which governed the class action litigation. Employers-Teamsters Local Nos. 175 & 505 Pension Trust Fund v. Anchor Capital Advisors, 498 F.3d 920, 922 (9th Cir. 2007). Employers-Teamsters Local Nos. 175 & 505 Pension Trust Fund (“Appellants”) did not move to intervene in the class action, and did not file its own individual or class action complaint, id. Appellants did file a motion to serve as lead plaintiff, but the district court selected Anchor Capital instead. But after Anchor Capital moved and obtained court permission to dismiss the class action complaints with prejudice, Appellants filed an appeal to challenge that dismissal and contended that under the PSLRA it was the proper lead plaintiff to control the class action. Id. The Ninth Circuit dismissed the appeal on the ground that Appellant lacked standing.

Anchor Capital filed the securities fraud class action because its investors had lost $3.2 million; the district court granted its motion to serve as lead plaintiff because it had “the largest financial stake in the outcome of the litigation.” Anchor Capital, at 922. Defense attorneys moved to dismiss the class action against Watson Pharmaceuticals on the ground that it failed to plead fraud with the specificity required under the PSLRA; the district court granted the motion. Id. In the face of a district court order granting leave to amend but expressing considerable doubt that an amended class action complaint would survive a Rule 12(b)(6) motion, Anchor Capital told the court that it would not file an amended complaint and asked the court to dismiss with prejudice the uncertified class actions. Id., at 923. The district court granted the motion, id. “Appellants now challenge the lead plaintiff ruling.” Id.

Class Action Court Decisions PSLRA/SLUSA Class Actions Uncategorized

Antitrust Class Action Defense Cases-Cordes v. A.G. Edwards: Second Circuit Reverses Denial Of Class Action Certification In Antitrust Class Action Holding Assignees Could Serve As Class Representatives And Predominance Existed

District Court Erred in Denying Class Action Motion because Plaintiffs were Assignees of Original Plaintiffs, who were Members of the Class, and in Determining that Common Issues as to Damages did not Predominate Second Circuit Holds

Plaintiffs filed an antitrust class action lawsuit against certain initial public offering (IPO) underwriters alleging violations of the Sherman Act “by agreeing to charge all corporations conducting mid-size IPOs who used their services a fee equal to seven percent of the proceeds of the offering.” Cordes & Co. Fin. Services, Inc. v. A.G. Edwards & Sons, Inc., 502 F.3d 91, 94-95 (2d Cir. 2007). Plaintiffs’ assignees (Cordes) assumed control of the class action litigation and sought class certification, id.; defense attorneys opposed class action treatment arguing, inter alia, that Cordes were not adequate class representatives because they were not members of the class and that common issues did not predominate, id., at 95. Cordes presented an expert opinion that the class action was susceptible to common proof because a formula, “common to all class members,” could be utilized to determine “the difference between the fee actually paid and the ‘but-for fee’ – the fee that would have been charged to the putative class members in connection with the IPO in the absence of the alleged conspiracy.” Id., at 97. The defense expert countered that a preliminary inquiry must be made – viz., “the fee that the underwriter would have charged but for the conspiracy” – and that this would require “an individualized, plaintiff-by-plaintiff analysis of ten factors, including underwriter costs, price stabilization, and the risk of the offering.” Id. The district court agreed with defense counsel and denied the motion for class action certification, id., at 95. The Second Circuit reversed.

The issues on appeal were whether the district court properly determined the adequacy of representation issue and whether it properly analyzed the predominance requirement. Cordes, at 98. With respect to the Rule 23(a)(4) adequacy of representation test, the district court held that the putative class representatives did not fall within the scope of the class defined in the complaint, id., at 99. The Second Circuit noted, however, that the original class representatives “were indisputably members of the class they sought to represent,” and concluded that they could subsequently assign their “claims and interests in this litigation” to other parties who then could prosecute the class action. Id., at 99-100. Put simply, “By virtue of the assignments, [plaintiffs-assignees] do…possess the same interest [as the assignors] and thus may continue to assert a claim for the same injury shared by all members of the class.” Id., at 101. The bottom line is that Cordes were not precluded from acting as class representative solely because they are assignees. Id., at 103.

Certification of Class Actions Class Action Court Decisions Uncategorized

Class Action Defense Cases-In re Elevator Antitrust: Second Circuit Affirms Defense Judgment In Antitrust Class Action Holding That Class Action Complaint Failed To Adequately Allege Facts In Support Of Conspiracy Or Monopoly

District Court Properly Granted Defense Motion to Dismiss Antitrust Class Action and did not Abuse its Discretion in Denying Leave to File an Amended Class Action Complaint Second Circuit Holds

Plaintiffs filed a putative antitrust class action lawsuit against various elevator companies alleging that defendants conspired to fix the prices of elevators and monopolized the market for the maintenance of elevators. In re Elevator Antitrust Litig., 502 F.3d 47, 48-49 (2d Cir. 2007). Defense attorneys moved to dismiss the class action complaint for failure to plead sufficient facts of the requisite agreement; the district court granted the defense motion, and denied plaintiffs’ leave to amend the class action complaint. Id., at 49-50. Plaintiffs appealed; the Second Circuit affirmed the dismissal of the class action, holding that “[t]he conspiracy claims provide no plausible ground to support the inference of an unlawful agreement, and the allegations of unilateral monopolization fail to allege a prior course of dealing.” Id., at 48-49.

With respect to the class action’s conspiracy claims, the Second Circuit held at page 50 that the complaint alleged mere conclusions, but under Bell Atlantic Corp. v. Twombly, ___ U.S. ___, 127 S.Ct. 1955, 1965 (2007), more is required: “To survive a motion to dismiss under _Twombly_, it is not enough to make allegations of an antitrust conspiracy that are consistent with an unlawful agreement; to be viable, a complaint must contain ‘enough factual matter (taken as true) to suggest that an agreement [to engage in anticompetitive conduct] was made.’” The complaint must allege sufficient facts to “‘nudge [plaintiffs’] claims across the line from conceivable to plausible.’” _In re Elevator_, at 50 (quoting _Twombly_, at 1974). The Circuit Court analyzed and rejected each of plaintiffs’ arguments, _see id._, at 50-52, and concluded that “plaintiffs are unable to allege facts that would provide ‘plausible grounds to infer an agreement,’” _id._, at 50 (citation omitted).

Class Action Court Decisions Uncategorized