Circuit City Class Action Defense Case-Gentry v. Superior Court: California Supreme Court Invalidates Class Action Waiver In Arbitration Clause As Against Public Policy And Concludes Arbitration Clause Procedurally Unconscionable Despite Right To Opt Out

Class Action Lawsuits are More Effective in Redressing Employee Labor Law Claims thus Rendering Class Action Waiver in Arbitration Clause Unenforceable, and Arbitration Clause was Procedurally Unconscionable Despite 30-Day Window to Opt Out of Entirely Voluntary Dispute Resolution Program California Supreme Court Holds

Plaintiff filed a putative class action in California state court against Circuit City alleging violations of the state’s unfair and deceptive business practices statutes and labor code arising out of its misclassifying employees as exempt in order to deny them overtime pay. Gentry v. Superior Court, ___ Cal.4th ___, 64 Cal.Rptr.3d 773, Slip Opn., at 2-3 (Cal. August 30, 2007). Defense attorneys moved to dismiss the class action and compel arbitration pursuant to an arbitration clause with a class action waiver. The trial court found the arbitration clause and the class action waiver to be fully enforceable, and granted the defense motion. The Court of Appeal agreed with the trial court’s reasoning, but the California Supreme Court reversed.

At the time Circuit City hired plaintiff, he was provided with written materials that included the company’s “Dispute Resolution Rules and Procedures”; the program gave employees “various options, including arbitration, for resolving employment-related disputes” and provided that if the employee elected arbitration – a choice that was subject to a class action arbitration waiver – then the company could compel the employee to dismiss any civil action in favor of arbitration. Gentry, at 3. As the Supreme Court explained, “The packet included a form that gave the employee 30 days to opt out of the arbitration agreement. [Plaintiff] Gentry did not do so.” Id. Both the trial court and the appellate court were influenced by the fact that plaintiff failed to opt out of the arbitration program within the 30-day window, despite the fact that there would have been no adverse employment ramifications had he done so. Id., at 3-4. The Supreme Court, however, disagreed.

In a strangely vague and sharply split opinion, the Supreme Court held that class action arbitration waiver provisions in overtime cases “may be contrary to public policy,” Gentry, at 5 (italics added). But despite all of its hedging, the Court seems to be clear that anything short of an attorney-supervised waiver would not withstand scrutiny, explaining at page 12:

Arbitration Class Action Court Decisions Employment Law Class Actions Uncategorized

FLSA Class Action Defense Cases-In re Tyson Foods: Judicial Panel On Multidistrict Litigation (MDL) Grants Defense Motion To Centralize Class Action Litigation But Selects Middle District Of Georgia As Transferee Court

Judicial Panel Grants Defense Request, Opposed by Virtually All Plaintiffs, for Pretrial Coordination of Class Action Lawsuits Pursuant to 28 U.S.C. § 1407 but Rejects Defense Request to Transfer Class Actions to Alabama Eighteen (18) putative class action lawsuits were filed in ten federal courts against Tyson Foods, Tyson Chicken and Tyson Farms (collectively “Tyson”) alleging, inter alia, violations of the federal Fair Labor Standards Act Litigation (FLSA). In re Tyson Foods, Inc.

Class Action Court Decisions Multidistrict Litigation Uncategorized

15 U.S.C. § 78gg—Separability Of Statutory Provisions Of The Federal Private Securities Litigation Reform Act (PSLRA)

As a resource to class action defense lawyers who defend securities class action lawsuits, we provide the text of the Private Securities Litigation Reform Act of 1995 (PSLRA). Congress provided for the separability of the provisions of the PSLRA in 15 U.S.C. § 78gg, which states: § 78gg. Separability If any provision of this chapter, or the application of such provision to any person or circumstances, shall be held invalid, the remainder of the chapter and the application of such provision to persons or circumstances other than those as to which it is held invalid, shall not be affected thereby.

Statutes & Rules Uncategorized

Yet Again Employment Law Class Actions Lead List Of New Class Action Filings In California State And Federal Courts

To assist class action defense attorneys anticipate the claims 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 relevant timeframe.

Class Actions In The News Uncategorized

California Supreme Court Rejects Class Action Arbitration Waiver In Employment Contract

Divided California Supreme Court Holds Class Action Arbitration Clause would “Undermine the Vindication of the Employees’ Unwaivable Statutory Rights and would Pose a Serious Obstacle to the Enforcement of the State’s Overtime Laws” Yesterday, in a 4-3 decision with far-reaching impacts on class action arbitration waivers in California, the Supreme Court essentially held that class action waivers are unenforceable under California law. While the majority opinion claims that it is not condemning all such waivers, the dissent cogently observes that — for all intents and purposes — it is the practical effect of the decision.

Class Actions In The News Uncategorized

Class Action Defense Cases-In re Household Goods: Judicial Panel On Multidistrict Litigation (MDL) Grants Plaintiff’s Unopposed Motion To Centralize Class Action Litigation In District of South Carolina

Judicial Panel Grants Request, Unopposed by Defense, for Pretrial Coordination of Class Action Lawsuits Pursuant to 28 U.S.C. § 1407 and Concurs with Request to Transfer Class Actions to District of South Carolina Antitrust class action lawsuits were filed in Illinois and South Carolina against various moving companies for violation of the Sherman Act arising from the allegation that defendants entered into an agreement concerning the method for calculating fuel surcharges.

Class Action Court Decisions Multidistrict Litigation Uncategorized

Class Action Defense Cases-CE Design v. Mortgage Exchange: Illinois Court Grants Defense Motion To Dismiss Appeal From Refusal To Certify Class Action For Lack Of Jurisdiction

Motion for Reconsideration of Denial of Class Action did not Toll Statutory Time Period for Appealing Court Order Appellate Court Holds Plaintiffs filed a putative class action in Illinois state court against The Mortgage Exchange alleging violations of the federal Telephone Consumer Protection Act of 1991 (TCPA), which makes it unlawful to send unsolicited advertisements via facsimile, and the state’s Consumer Fraud and Deceptive Business Practices Act, which prohibits “unfair or deceptive acts or practices.

Class Action Court Decisions Uncategorized

Class Action Plaintiff Lawyer William Lerach Retires From Practice To Focus On Potential Criminal Charges Connected With Indictment Of Milberg Weiss Law Firm

Noted Securities Class Action Lawyer Resigns From Law Firm Reportedly In Exchange For Government Agreement not to Indict Law Firm Jenny Anderson of The New York Times reports that noted class action plaintiff lawyer William S. Lerach is leaving his law firm in order to focus on the criminal allegations connected with the federal indictment of Milberg Weiss Bershad & Schulman, where he once worked. We have previously reported on the criminal indictment of Milberg Weiss and two of its named partners, David Bershad and Steven Schulman, alleging illegal payments of more than $11 million to individuals who served as class representatives in class actions filed by Milberg Weiss.

Class Actions In The News Uncategorized

PSLRA Class Action Defense Cases-Central Laborers’ v. Integrated Electrical: Fifth Circuit Holds Class Action Complaint Failed To Adequately Plead Scienter Under PSLRA And Leave To Amend Class Action Complaint Properly Denied

District Court Properly Concluded that Securities Fraud Allegations in Class Action Complaint did not Satisfy Heightened Pleading Requirements of the Private Securities Litigation Reform Act (PSLRA) and that Amendment of Class Action Complaint would have been Futile Fifth Circuit Holds

Plaintiff, a pension fund, filed a putative class action against Integrated Electrical and certain officers alleging violations of Sections 10(b) and 20(a) of the Securities Exchange Act, 15 U.S.C. §§ 78j(b) & 78t(a), and Rule 10b-5 based on “a number of false or misleading statements by IES regarding the company’s financial condition caused an artificial inflation in the market price of IES’s securities during the class period.” Central Laborers’ Pension Fund v. Integrated Electrical Services Inc., 497 F.3d 546, 2007 WL 2367776, *1 (5th Cir. 2007). Defense attorneys moved to dismiss the class action on the ground that it failed to plead scienter with the requisite specificity under the Private Securities Litigation Reform Act (PSLRA), id. The district court agreed that the complaint failed to meet the PSLRA’s heightened pleading standards and dismissed the class action; in so ruling, the court implicitly denied plaintiff’s request for leave to file an amended class action complaint. Id. The Fifth Circuit affirmed, holding that the PSLRA compelled dismissal of the class action complaint and that the district did not abuse its discretion in concluding that further amendment of the class action complaint would have been futile.

Integrated Electrical is a publicly-traded company that provides electrical contracting services throughout the country. Central Laborers’, at *1. Beginning in April 2003, the company “expressed confidence” in its financial status, but in August 2004 it “publicly disclosed that it could not release its quarterly earnings numbers on time due to an ongoing evaluation of certain projects.” Id. Ultimately, the company restated its financial statements for fiscal years 2002 through the first half of 2004, id. In the Fifth Circuit, “‘[t]o state a claim under § 10(b) and Rule 10b-5, a plaintiff must allege, in connection with the purchase or sale of securities[:] (1) a misstatement or an omission (2) of material fact (3) made with scienter (4) on which plaintiff relied (5) that proximately [injured him].’” Id., at *2 (quoting Fin. Acquisition Partners LP v. Blackwell, 440 F.3d 278, 286 (5th Cir. 2006)). The PSLRA requires that securities fraud must be pleaded with particularity, and alleged violations of Section 10(b) and Rule 10b-5 require proof that the defendant acted either with intent or with “severe recklessness.” Id., at *2. And appellate review of a district court order refusing leave to amend is governed by an abuse of discretion standard, id., at *3.

Class Action Court Decisions PSLRA/SLUSA Class Actions Uncategorized

MARK YOUR CALENDARS – CLASS ACTION CONFERENCE COMING TO LOS ANGELES

Law Seminars International is sponsoring a two-day seminar entitled, “Innovative Strategies for Litigating Class Action Suits.” The conference will be held at the Millennium Biltmore Hotel in Los Angeles on November 12 and 13, 2007. The details of the conference, its location and its topics may be found here.

Class Actions In The News Uncategorized