15 U.S.C. § 78bb—Effect Of The Federal Private Securities Litigation Reform Act (PSLRA) Governing Individual And Class Action Lawsuits For Securities Fraud On Existing Law

To aid class action defense attorneys in defending against securities class action lawsuits, we provide the text of the Private Securities Litigation Reform Act of 1995 (PSLRA). Congress explained the effect of the PSLRA on existing law in 15 U.S.C. § 78bb, which provides:

§ 78bb. Effect on existing law

(a) Addition of rights and remedies; recovery of actual damages; State securities commissions

Except as provided in subsection (f) of this section, the rights and remedies provided by this chapter shall be in addition to any and all other rights and remedies that may exist at law or in equity; but no person permitted to maintain a suit for damages under the provisions of this chapter shall recover, through satisfaction of judgment in one or more actions, a total amount in excess of his actual damages on account of the act complained of. Except as otherwise specifically provided in this chapter, nothing in this chapter shall affect the jurisdiction of the securities commission (or any agency or officer performing like functions) of any State over any security or any person insofar as it does not conflict with the provisions of this chapter or the rules and regulations thereunder. No State law which prohibits or regulates the making or promoting of wagering or gaming contracts, or the operation of “bucket shops” or other similar or related activities, shall invalidate any put, call, straddle, option, privilege, or other security subject to this chapter, or apply to any activity which is incidental or related to the offer, purchase, sale, exercise, settlement, or closeout of any such security. No provision of State law regarding the offer, sale, or distribution of securities shall apply to any transaction in a security futures product, except that this sentence shall not be construed as limiting any State antifraud law of general applicability.

Statutes & Rules Uncategorized

Labor Law Class Action Cases Again Account For 60% Of New Class Actions Filed In California State And Federal Courts

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 Kugel Mesh: Judicial Panel On Multidistrict Litigation (MDL) Rejects Defense Opposition To Centralization Of Class Action Lawsuits And Selects District of Rhode Island As Transferee Court

Judicial Panel Grants Plaintiffs’ Requests, Opposed by Defense and Other Plaintiff Lawyers, for Pretrial Coordination of Class Action Lawsuits Pursuant to 28 U.S.C. § 1407 and Sends Class Actions to District of Rhode Island

Thirteen (13) class action lawsuits were filed in 13 different courts located in 11 different states against various defendants, including C.R. Bard and its wholly-owned subsidiary Davol (common defendants in all class actions) and Surgical Sense and WCO Medical Products (defendants in only one class action), asserting products liability claims allegedly caused by defects in various models of hernia patches manufactured and sold by Bard, Davol or Surgical Sense. In re Kugel Mesh Hernia Patch Products Liab. Litig., ___ F.Supp.2d ___, 2007 WL 1853819, *1 (Jud.Pan.Mult.Lit. June 22, 2007). Plaintiffs’ lawyers in the Alabama and Rhode Island actions moved the Judicial Panel for Multidistrict Litigation (MDL) an order centralizing the class actions for pretrial purposes pursuant to 28 U.S.C. § 1407, each requesting transfer to the district court in which their action already was pending, _id._ The Tennessee plaintiffs opposed pretrial coordination entirely, while the Arkansas plaintiffs supported centralization only as to those class actions that contained certain claims but otherwise opposed centralization, _id._ All defense attorneys opposed centralization, alternatively arguing for transfer to Arkansas or Missouri, _id._ Other plaintiffs in various districts supported transfer to various districts and under various circumstances, providing the Judicial Panel with no consensus from which to work, _id._ The Judicial Panel granted the motion to centralize the class actions over the objection of defense and certain plaintiff lawyers, finding that “all actions involve common questions of fact” in that they “share factual questions concerning such matters as the design, manufacture, safety, testing, marketing and performance” of hernia patches manufacture and sold by Bard, Davol and Surgical Sense, _id._

The Judicial Panel summarized defense arguments in opposition to centralization of the class action lawsuits as follows: “common facts do not predominate among the actions, as the actions involve different models of hernia patches and allege various types of defects; the number of pending actions does not warrant centralization; alternatives to centralization are available; and the pending actions differ substantially in the causes of action pleaded, and thus the evidence required. Additionally, the parties to the Western District of Arkansas action argue that the hernia patch at issue in that action was manufactured and distributed by a different, unrelated company. Plaintiffs to the Arkansas actions argue that two types of actions should not be included in MDL-1842 proceedings: (1) those actions that do not allege that the recoil ring is defective; and (2) those actions that arise from a procedure, or the installation of a hernia patch, that may create a higher risk of infection in the patient.” In re Kugel Mesh, at *2. The Panel rejected these arguments, explaining that “Section 1407 does not require a complete identity or even a majority of common factual or legal issues as a prerequisite to transfer.” Id. The Panel further explained at *2,

Class Action Court Decisions Multidistrict Litigation Uncategorized

Class Action Defense Cases-Alvarez v. Pappas: Illinois Appellate Court Holds Class Action Properly Dismissed Because Claims To Recover Duplicate Property Tax Payments Are Subject To Five Year Statute Of Limitations

Class Action Claims were Time-Barred because Duplicate Property Tax Payments are still Properly Deemed “Tax Payments,” Class Action Plaintiff’s Argument to the Contrary Notwithstanding, so Trial Court did not Err in Granting Defense Motion to Dismiss Class Action Complaint

Plaintiffs filed a putative class action in Illinois state court seeking the return of overpaid property taxes; specifically, the class action complaint alleged that plaintiffs “had made duplicate real estate tax installment payments” and that the State of Illinois “refused to refund a duplicate real estate tax payment when the refund was requested more than five years after the duplicate payment was made.” Alvarez v. Pappas, ___ N.E.2d __, Slip Opn., at 2 (Ill.App. June 4, 2007). The thrust of the lawsuit was that the State “had no authority to collect, deposit, or disburse to tax districts any duplicate payments of real estate taxes,”, _id._, at 2-3; defense attorneys countered that the statute of limitations had run on plaintiffs’ claims thus necessitating that the class action be dismissed, _id._, at 1. The trial court agreed and dismissed the class action complaint as time-barred; the Illinois appellate court affirmed.

By way of background, the appellate court explained that the Cook County treasurer collects property taxes by sending out estimated tax bills by January 31, and final tax bills by June 30. Alvarez, at 1-2_._ The class action complaint alleged that the Alvarez plaintiffs received a property tax bill for their first installment of their 1989 taxes, and that their bank paid this installment out of an escrow account but that Alvarez also paid the property tax bill directly. _Id._, at 3. Alvarez allegedly made additional duplicate payments as well, _id._ Beginning with his second property tax installment for 1998, plaintiff Douglas also allegedly made duplicate tax payments, _id._, at 4. The Dratt plaintiffs also allege that they made duplicate property tax payments beginning with the second installment for 1998, _id._ Finally, the class action alleges that duplicate property tax payments were made on property owned by plaintiff Nazon beginning in 1994 or 1995. _Id._

Class Action Court Decisions Uncategorized

SLUSA Class Action Defense Cases-Instituto v. Lehman Brothers: Pension Manager Lawsuits Constituted “Covered Class Action” Under Securities Litigation Uniform Standards Act Florida Federal Court Holds

Florida Federal Court Reaffirms Prior Ruling that Lawsuits by Quasi-Governmental Agency on Behalf of Military Personnel Against Financial Institutions for Pension Fund Losses Constituted “Covered Class Actions” Within the Meaning of SLUSA (Securities Litigation Uniform Standards Act)

Plaintiff, a quasi-governmental agency that manages pension funds for armed forces personnel, filed a putative class action in Florida state court against Lehman Brothers alleging violations of various Florida state laws. Instituto de Prevision Militar v. Lehman Bros., Inc., 485 F.Supp.2d 1340, 1342 n.1 (S.D. Fla. 2007). The district court sua sponte held that the federal Securities Litigation Uniform Standards Act (SLUSA) preempted plaintiff’s claims and dismissed the class action complaint with leave to amend. Plaintiff sought reconsideration on the ground, inter alia, that the lawsuit was not a “covered class action” within the meaning of SLUSA; the district court denied reconsideration.

“Plaintiff Instituto de Prevision Militar … is a quasi-governmental agency of the Republic of Guatemala that, inter alia, manages the pension funds for members of the Guatemalan Armed Forces.” Instituto, at 1342. In July 2001, plaintiff was solicited by Pension Fund of America (PFA) to deposit pension funds with Lehman Brothers in a retirement trust account; believing PFA was the agent of Lehman (it was not), plaintiff invested more than $28 million in PFA through Lehman, id. Plaintiff alleges that PFA was “carrying out an embezzlement and money laundering scheme,” and this formed the basis of a lawsuit it filed against PFA in November 2002. Id. Through that action, plaintiff obtained an order compelling Lehman to liquidate its account, but the funds thus obtained were insufficient to cover its investment so plaintiff filed suit against Lehman, id., at 1342-43. Plaintiff also filed a putative class action against Merrill Lynch, and the district court consolidated the three cases for discovery purposes. Id., at 1343.

Class Action Court Decisions PSLRA/SLUSA Class Actions Uncategorized

Class Action Defense Cases-Hnot v. Willis Group: New York Federal Court Denies Defense Motion To Reconsider Order Certifying Class Action Because New Second Circuit Authority Governing Class Action Certification Had Been Satisfied

Second Circuit Opinion in In re IPO Class Action Enunciating new Standards for Certification of Class Actions Warranted Reconsideration of Order Certifying Class Action but not Decertification of Class Action because new Standards were met New York Federal Court Holds

Female employees filed a labor law class action against Willis Group and its affiliates alleging gender discrimination. Hnot v. Willis Group Holdings Ltd., 241 F.R.D. 204, 206 (S.D.N.Y. 2007). The district court granted plaintiffs’ motion to certify the litigation as a class action, see Hnot v. Willis Group Holdings Ltd., 228 F.R.D. 476 (S.D.N.Y. 2005); defense attorneys sought reconsideration of the class certification order and decertification of the class, arguing that under the Second Circuit opinion in In re Initial Pub. Offering Sec. Litig., 471 F.3d 24 (2d Cir.2006) (In re IPO) — a summary of which may be found here — which issued after the class action had been certified, plaintiffs failed to establish commonality under Rule 23(a), and that class action treatment was “inappropriate under Rule 23(b)(2),” 241 F.R.D. at 206. Specifically, the defense argued that a plaintiff is now required to do more than simply make “some showing” that the elements of Rule 23 have been met, id., at 207. The district court denied the defense motion, concluding that the requirements of Rule 23 had been met and that the lawsuit should properly proceed as a class action.

Plaintiffs filed their putative class action in 2001 “on behalf of a class of high-level female employees…alleging illegal employment discrimination on the basis of sex.” Hnot, at 206. In response to plaintiffs’ motion to certify a class action, defense attorneys argued that Rule 23(a)’s commonality requirement had not been satisfied. Id. Plaintiffs’ responded that “a common policy of vesting regional and local officers with unfettered discretion in making promotion and compensation decisions, result[ed] in discrimination against women in high level positions.” Id. (citation omitted). Each side submitted expert reports, which the district court considered as they pertained to the issue of commonality, id., and ultimately concluded that “plaintiffs’ evidence was ‘certainly adequate to establish that whether or not Willis’s promotion and compensation policies subject class members to discrimination is an issue common to all class members,’” id., at 207 (citing 228 F.R.D. at 483).

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

Class Action Defense Cases-Great Plains Trust v. Union Pacific: Eighth Circuit Affirms Dismissal Of Class Action Agreeing With Defense That Class Action Claims Are Time-Barred

District Court Properly Concluded that Class Action Claims of Debenture Holder Against Issuer for Breach of Contract, Fraud and Unjust Enrichment were Barred by Applicable Limitations Periods Eighth Circuit Holds Plaintiff filed a putative class action against Union Pacific Railroad Company, as successor to the issuer of a debenture, alleging breach of contract, fraud and unjust enrichment for alleging failing to make proper interest payments due plaintiff. Great Plains Trust Co.

Class Action Court Decisions Uncategorized

Class Action Defense Cases- In re Mutual Funds: Maryland Federal Court Grants Defense Motion To Dismiss Class Action Claims As Time-Barred Holding That Publicity Placed Class Action Plaintiffs On Inquiry Notice Of Claims

Class Action Alleging Market Timing Acts in Violation of State and Federal Laws were Time-Barred because Public Complaints, SEC Actions and Guilty Plea Arising out of Market Timing Claims Placed Class Representatives on Inquiry Notice of Basis for Class Action Claims Maryland Federal Court Holds

Investors filed a class action against numerous defendants, ultimately coordinated by the Judicial Panel on Multidistrict Litigation, alleging marketing timing acts in violation of the Securities Act, the Exchange Act, the Investment Company Act and various state laws. In re Mutual Funds Inv. Litig., 478 F.Supp.2d 833, 834 (D. Md. 2007). The class action complaint was attacked by motions to dismiss, which the district court granted as to the Securities Act and the ICA § 48(a) claims, denied as to the Exchange Act claims, and denied without prejudice as to the ICA § 36(b) claim_, id_.; plaintiffs voluntarily dismissed their state law claims, _id._ n.1. Plaintiffs filed a second amended class action complaint that added new defendants and claims, and defense attorneys filed another series of motions to dismiss, _id._, at 834. After reaffirming its prior rulings to the extent applicable, _id._; the district court addressed numerous issues, but we address here only that portion of the court’s holding concerning the statute of limitations defense.

Plaintiffs conceded that any claims based on allegedly fraudulent conduct that occurred prior to July 1999 were time-barred. In re Mutual Funds, at 835. The district court recognized that Fourth Circuit decisional law holds that “Inquiry notice is triggered by evidence of the possibility of fraud, not by complete exposure of the alleged scam.” Id., at 836 (quoting Brumbaugh v. Princeton Partners, 985 F.2d 157, 162 (4th Cir. 1993)). And the court immediately rejected a defense effort to push inquiry notice back to 1999, explaining: “The attempt to place notice inquiry as far back as 1999 because of the shareholder letter and prospectus supplements warning of the risks of market timing is not persuasive, when those same documents indicated that additional steps would be taken to prevent timing and the funds are alleged instead to have concealed from investors specific agreements to permit that very practice.” Id., at 836 n.6.

Class Action Court Decisions Uncategorized

15 U.S.C. § 78aa-1—Statutes Of Limitation In Securities Class Action Lawsuits Under The Federal Private Securities Litigation Reform Act (PSLRA)

To assist class action defense attorneys who defend against securities class action litigation, we provide the text of the Private Securities Litigation Reform Act of 1995 (PSLRA). Congress set forth special provisions relating to statutes of limitation for private causes of action for individual and class actions under the Private Securities Litigation Reform Act in 15 U.S.C. § 78aa-1, which states: § 78aa–1. Special provision relating to statute of limitations on private causes of action

Statutes & Rules Uncategorized

More Than 60% Of New Class Action Cases Involve Employment-Related Claims In Weekly Class Action Filings In California State And Federal Courts

As a resource to defense attorneys who defend against class action claims 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