FLSA Class Action Defense Case-Sherrill v. Sutherland Global: New York Federal Court Holds Conditional Certification Of FLSA (Fair Labor Standards Act) Collective Action Warranted But Limits Scope Of Proposed Class

Plaintiffs in Class Action/FLSA Collective Action Alleging Labor Law Violations Adequately Supported Motion for Conditional Certification under FLSA of Putative Class Including Non-New York Employees, but Limits Class to Telemarketers Rather than All Hourly Employees

Two plaintiffs filed a class action and FLSA (Fair Labor Standards Act) collective action lawsuit against telemarketing service provider Sutherland Global – which operated 9 call centers in New York, one in California and one in Virginia – alleging various state and federal labor law violations, after which 38 former telemarketing agents sought court approval to “opt in” to the class action/FLSA lawsuit as named plaintiffs. Sherrill v. Sutherland Global Servs., Inc., 487 F.Supp.2d 344, 346-47 (W.D.N.Y. 2007). Plaintiffs moved the court to conditionally certify an FLSA collective action and to provide notice to putative class members of their right to opt in, id., at 346. Defense attorneys did not oppose the motion, but requested the right to approve the notice, asked the federal court to limit the scope of the proposed class, and asked the federal court to set an “opt-in” deadline, id., at 351. The defense also requested that plaintiffs’ lawyer remove “inaccurate statements” from counsel’s website, but plaintiffs “voluntarily agreed to make the necessary corrections” rendering the issue moot, id. at 351 n.4. The district court granted plaintiff’s motion in part, agreeing with defense attorneys that notice should be sent only to current and former telemarketing agents rather than all Sutherland hourly employees, and

The class action/FLSA complaint alleged three labor law violations. First, that Sutherland’s timekeeping system automatically deducted 60 minutes for lunch from each employee’s daily pay, regardless of whether the employee took a lunch break or worked during part of their lunch break. Sherrill, at 347. The complaint further alleged that the workload and the pressure to meet performance goals required that telemarketing agents frequently work during lunch periods, and as part of their motion, plaintiffs submitted declarations supporting these allegations, id. Second, the class action alleged that Sutherland required its telemarketers to work “off the clock” by arriving 15-30 minutes before their scheduled shift but encouraging them not to “log on” until at or near their scheduled start time. Id. Finally, plaintiffs alleged – and in their motion introduced evidence supporting – that Sutherland improperly excluded commissions and bonuses in calculating its employees’ appropriate overtime rates, using instead the “regular rate of pay” for each employee “result[ing] in application of a lower overtime rate than would apply were commissions and bonuses properly included in the rate of pay,” id., at 348.

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

Arbitration Class Action Defense Case-DiFiore v. American Airlines: Federal Court Rejects Defense Effort To Compel Arbitration With Class Action Plaintiffs Based On Agreement With Co-Defendant

Defense Attempt to Compel Arbitration of Class Action Claims Based on Arbitration Clause in Employment Agreement Between Plaintiffs and Co-Defendant Warranted Only “Passing Attention” and was Rejected by Massachusetts Federal Court Skycaps filed a class action lawsuit against American Airlines and against their direct employer, G2 Secure Staff, LLC, which employs skycaps for airlines, alleging that American Airlines violated the Massachusetts Tips Law by imposing a $2 per bag service charge for passenger luggage checked at curbside.

Arbitration Class Action Court Decisions Uncategorized

15 U.S.C. § 78cc—Validity Of Contracts Statutes Under The Federal Private Securities Litigation Reform Act (PSLRA) For Individual And Class Action Securities Lawsuits

As a resource for class action defense lawyers who defend against securities class action litigation, we provide the text of the Private Securities Litigation Reform Act of 1995 (PSLRA). Congress set forth statutory provisions addressing the validity of contracts under the PSLRA in 15 U.S.C. § 78cc, which provides:

§ 78cc. Validity of contracts

(a) Waiver provisions

Any condition, stipulation, or provision binding any person to waive compliance with any provision of this chapter or of any rule or regulation thereunder, or of any rule of an exchange required thereby shall be void.

(b) Contract provisions in violation of chapter

Every contract made in violation of any provision of this chapter or of any rule or regulation thereunder, and every contract (including any contract for listing a security on an exchange) heretofore or hereafter made, the performance of which involves the violation of, or the continuance of any relationship or practice in violation of, any provision of this chapter or any rule or regulation thereunder, shall be void

Statutes & Rules Uncategorized

Washington State Joins Growing List of Jurisdictions Invalidating Class Action Waivers

Enforcement of Class Action Waiver in Cingular’s Mandatory Arbitration Clause Reversed by Washington Supreme Court and Class Action Reinstated because Class Action Waiver was Unconscionable under the Circumstances A Seattle newspaper reports that the Washington Supreme Court has held that Cingular Wireless cannot enforce a class action waiver as part of an apparently mandatory arbitration clause. As prior articles reveal, class action waivers are frequently part of company-drafted mandatory arbitration provisions.

Class Actions In The News Uncategorized

New Employment Law Class Action Cases Yet Again Lead List Of Class Actions Filed In California State And Federal Courts During Past Week

In an effort to assist California class action defense attorneys anticipate the claims 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 relevant timeframe.

Class Actions In The News Uncategorized

Class Action Defense Cases-In re Mirapex: Judicial Panel On Multidistrict Litigation (MDL) Grants Defense Motion To Centralize Class Action Litigation But Selects District of Minnesota As Transferee Court

Judicial Panel Grants Defense Request, Opposed by Plaintiffs, for Pretrial Coordination of Class Action Lawsuits Pursuant to 28 U.S.C. § 1407 but Rejects Defense Request to Transfer Class Actions to Southern District of New York or to District of Connecticut More than fifty (50) products liability class action lawsuits were filed, the vast majority in the District of Minnesota, against various defendants alleging adverse side effects from use of the drug Mirapex, and challenging the timeliness and adequacy of defendants’ warnings concerning those side effects.

Class Action Court Decisions Multidistrict Litigation Uncategorized

Class Action Defense Cases-McAdams v. Monier: California Circuit Holds Class Action May Be Certified Based On “Inference” Of Reliance By Class Members So Trial Court Erred In Denying Motion To Certify Class Action

“Concept of Interest of Common Reliance” Applies to Class Action Alleging Violations of CLRA (Consumers Legal Remedies Act) and UCL (Unfair Competition Law) and Supports Certification of Class Action California Appellate Court Holds

Plaintiff filed a putative class action in California state court against Monier alleging violations of the state’s Consumers Legal Remedies Act (CLRA) and Unfair Competition Law (UCL) arising out of its “failure to disclose that the color composition of its roof tiles would erode away, leaving bare concrete, well before the end of the tiles’ represented 50-year life.” McAdams v. Monier, Inc., 151 Cal.App.4th 667, 60 Cal.Rptr.3d 111, 112-13 (Cal.App. 2007), reh’g den. and opn. mod. (June 25, 2007). The class action complaint alleged that Monier warranted its roof tiles for 50 years, and represented that it had a permanent color glaze and required no care. McAdams, at 113. The class action claims were based on the allegation that, contrary to the above, Monier knew that the tiles lose their color “well in advance of their warranted 50-year useful life,” id. Plaintiff sought to prosecute a class action on behalf of a “CLRA” class, consisting of all people who own homes with Monier tile roofs or who paid to replace or repair such tiles, and an “ownership” class, consisting of people who own buildings other than homes with Monier tile roofs or who paid to replace or repair such tiles. Id., at 113-14. In denying plaintiff’s class certification motion, the trial court explained that each class member would be required to prove actual reliance, raising individual fact issues as to the particular representations relied on and the damage suffered, and that plaintiff claims were not “typical” of class because he purchased his tiles through a third party distributor rather than through Monier directly. Id., at 114. Plaintiff appealed, and the appellate court reversed.

The Court of Appeal first addressed class action certification under the CLRA, which is governed by Civil Code section 1781. The appellate court readily concluded that the class action complaint sufficiently alleged a violation of the CLRA, McAdams, at 115, the issue was whether the trial court correctly determined that individual issues predominated. The appellate court found, “The class action is based on a single, specific, alleged material misrepresentation: Monier knew but failed to disclose that its color roof tiles would erode to bare concrete long before the life span of the tiles was up.” Id. With respect to the trial court’s conclusion that class members must individually prove reliance and consequent damage, thus defeating commonality as required by section 1781(b)(2), the appellate court recognized the CLRA requires a plaintiff show both that the defendant’s statements were deceptive and that the representations caused them damage, id., at 116 (citation omitted), but held that under the facts of this case reliance by members of the putative class could be “inferred” based on the allegation that “Monier made a single, material misrepresentation to class members that consisted of a failure to disclose a particular fact regarding its roof tiles” when Monier allegedly knew “that the color composition of its roof tiles would erode to bare concrete well before the end of the tiles’ represented 50-year life.” Id., at 117. The appellate court found that, if these allegations were true, the failure to make the requisite disclosure “would have been material to any reasonable person who purchased tiles in light of the 50- year/lifetime representation, or the permanent color representation, or the maintenance-free representation” so as to “permit an inference of common reliance among the class on the material misrepresentation comprising the alleged failure to disclose.” Id. The Court of Appeal further held that this conclusion meant plaintiff did not have to purchase his tiles directly from Monier in order to prosecute a CLRA class action claim against it on behalf of the class. See id., at 118-19.

Certification of Class Actions Class Action Court Decisions Uncategorized

Employment Class Action Defense Cases-Jenkins v. BellSouth: Eleventh Circuit Holds District Court Cannot Avoid 10-Day Deadline For Seeking Interlocutory Review of Class Action Certification Order By Vacating And Reentering Order

As Matter Of First Impression, 10-Day Deadline for Seeking Interlocutory Review of Court Order Refusing to Certify Class Action is Jurisdictional and District Court Cannot “Extend” Deadline by Vacating and Reentering its Order Eleventh Circuit Holds

Plaintiffs filed a putative class action against their employer, BellSouth, alleging a “pattern and practice of racial discrimination in promotions and compensation.” Defense attorneys opposed plaintiff’s motion to certify the lawsuit as a class action, and on September 19, 2006, the district court entered its order denying class certification. Jenkins v. BellSouth Corp., ___ F.3d ___, 2007 WL 1881294, *1 (11th Cir. July 2, 2007). On October 3, plaintiffs sought reconsideration of the order denying class action treatment, but on November 7 the court denied that request. _Id._ On November 24 plaintiffs asked the Eleventh Circuit for permission under FRCP Rule 23(f) to proceed with an interlocutory appeal of the class action certification order, but the Circuit Court dismissed the petition as untimely. _Id._ In response, plaintiffs asked the district court to “vacate and reenter” the order denying reconsideration, pleading that its petition in the Circuit Court was due November 22 (the day before Thanksgiving), that it attempted on November 21 to file its petition by overnight delivery, and that the package was delivered November 24 (the day after Thanksgiving). _Id._ The district court granted plaintiffs’ motion on March 5, 2007; specifically, the court “vacated its order of November 7, 2006, and reentered an identical order,” _id._ Plaintiffs filed their second Rule 23(f) petition on March 14, 2007, _id._

The Eleventh Circuit stated that the issue presented had not been addressed previously in the circuit, explaining at page *1: “This petition presents an issue of first impression: whether a district court has the authority to circumvent the ten-day deadline for obtaining interlocutory review of an order denying class certification by vacating and reentering that order, after the aggrieved parties filed and this Court dismissed an untimely petition for an interlocutory appeal.” The Circuit Court held that “the district court lacked the authority to circumvent the ten-day deadline provided in Rule 23(f) by vacating and reentering its earlier order” and, accordingly, that plaintiffs’ petition was untimely, id. Accordingly, the Court dismissed the petition for lack of jurisdiction.

Certification of Class Actions Class Action Court Decisions Uncategorized

Class Action Defense Cases-Seastrom v. Neways: California Appellate Court Affirms Order Refusing To Certify Class Action Because Putative Class Representatives Were Potential Defendants In The Same Action

Distributors of Dietary Supplements were not Adequate Class Representatives in Class Action Against Manufacturer Because Goal of Class is Disgorgement of Profits but Putative Class Representatives’ Self-Interest would be to Retain Profits Realized from Drug Sales

Plaintiffs filed a putative class action against Neways and others alleging inter alia unfair competition arising out of the sale of a dietary supplement without a prescription. Seastrom v. Neways, Inc., 149 Cal.App.4th 1496, 1499 (Cal.App. 2007). Defendant manufactured and distributed an oral spray called BioGevity as an anti-aging dietary supplement. Id. BioGevity contained HGH, which cannot be sold without a prescription, but defendant did not require a prescription to purchase the product, id. The class action complaint alleged that Neways and its independent distributors engaged in a pyramid sales scheme in which distributors could purchase BioGevity for $59-$66 per bottle, with a suggested retail price of $84.35-$94.40, and “keep the difference between the wholesale and retail prices on products they sold directly, and to commissions on the sale of products by distributors under them in the pyramid scheme.” Id. The putative class action alleged that some distributors had upwards of 8,800 “downline” distributors in the “pyramid” and made millions of dollars off the pyramid scheme, id. The court denied the motion of two distributors, acting as putative class representatives, to certify the lawsuit as a class action, and the Court of Appeal affirmed.

Following an investigation by the U.S. Attorney’s Office into Neways’ sale of BioGevity without prescriptions, “In September 2003 Neways pleaded guilty to knowingly selling approximately 100,000 bottles of a product that contained HGH in violation of [federal law] and to criminal forfeiture under sections 333(e)(3) and 853(a)(1).” Seastrom, at 1499-1500. The company also paid $1.75 million as part of a stipulated fine and forfeiture of profits from the sale of BioGevity; in return, the federal government agreed not to prosecute Neways distributors. Id., at 1500. In June 2003, just before Neways resolved the U.S. Attorney’s investigation, an unfair competition lawsuit was filed against Neways by a Marc Lewis. Id. However, because Lewis had never purchased BioGevity, he lacked standing to prosecute the class action after California voters enacted Proposition 64, id.

Certification of Class Actions Class Action Court Decisions Uncategorized

Fidelity Class Action Defense Case-Lentini v. Fidelity: Connecticut Federal Court Grants Defense Motion To Dismiss Class Action Complaint Claims For Fraud And Unfair Business Practices But Grants Leave To File Amended Class Action Complaint

Plaintiff Failed to Establish Membership in Class Defined by Class Action Complaint and Failed to Allege Adequately Entitlement to Reduced Insurance Rate Underlying Damage Claims thus Warranting Court Order Granting Defense Motion to Dismiss Class Action Claims, but Plaintiff Given Leave to Amend

Plaintiff filed a putative class action against defendant Fidelity National Title Insurance Company of New York on behalf of purchasers of title insurance who, in connection with refinance transactions, qualified for discounted refinance rates but did not receive them. Lentini v. Fidelity Nat’l Title Ins. Co. of New York, 479 F.Supp.2d 292, 295 (D. Conn. 2007). The class action complaint alleged violations of Connecticut’s Unfair Trade Practices Act (CUTPA) (Count I), fraudulent misrepresentation (Count II), negligent misrepresentation (Count III) and unjust enrichment (Count IV), id., at 296. Defense attorneys moved to dismiss Counts I-III of the class action complaint, id., at 295-96; the district court granted the motion as to certain claims for relief but granted plaintiff leave to amend, id., at 303.

According to the class action complaint, Fidelity’s title insurance rate schedule, approved by the Connecticut Insurance Department, provided for both “regular” and “reduced” rates in connection with refinance transactions; specifically, if a homeowner refinances within 10 years “and the premises to be insured are identical and there has been no change in the fee ownership,” then discounted premiums may apply. Lentini, at 296. Plaintiff alleges that he refinanced his mortgage and qualified for a discounted title policy rate but that Fidelity “(a) concealed from the Plaintiff that he qualified for and was entitled to receive the discounted refinance rate and (b) supplied false, misleading, inaccurate and incomplete information about the applicable rate for title insurance by charging the Plaintiff Six Hundred Fifty Dollars ($650.00) for title insurance.” Id. The class action allegations were that all class members qualified for discounted rates and that Fidelity should have known that the class members were eligible to receive reduced rates, but instead Fidelity charged class members the regular rate for their title policies. Id., at 297. Plaintiff alleged that the premiums Fidelity charged class members exceeded the statutorily mandated rates, id.

Class Action Court Decisions Uncategorized