CAFA Class Action Defense Cases-Atteberry v. Esurance: Illinois Federal Court Remands Class Action To State Court Finding Defense Failed To Establish Requisite Amount In Controversy

Defense Claims of $75,000 Controversy for Diversity Jurisdiction and $5 Million Controversy for Removal Jurisdiction under Class Action Fairness Act of 2005 (CAFA) were Speculative Warranting Remand of Class Action to State Court Plaintiff filed a putative class action against Esurance Insurance in Illinois state court alleging bad faith in the processing of insurance claims. Defense attorneys removed the class action to federal court arguing diversity jurisdiction and removal jurisdiction under the Class Action Fairness Act of 2005 (CAFA).

Class Action Court Decisions Class Action Fairness Act (CAFA) Removal & Remand Uncategorized

15 U.S.C. § 78u–4–Congressional Provisions Applicable To Private Securities Litigation Pursuant To The Private Securities Litigation Reform Act (PSLRA)

As a resource for the class action defense lawyer who defends against securities class action litigation, we provide the text of the Private Securities Litigation Reform Act of 1995 (PSLRA). Congress set forth general provisions governing private securities class action litigation in 15 U.S.C. § 78u–4, which provides as follows:

§ 78u–4. Private securities litigation

(a) Private class actions

(1) In general

The provisions of this subsection shall apply in each private action arising under this chapter that is brought as a plaintiff class action pursuant to the Federal Rules of Civil Procedure.

(2) Certification filed with complaint

(A) In general

Each plaintiff seeking to serve as a representative party on behalf of a class shall provide a sworn certification, which shall be personally signed by such plaintiff and filed with the complaint, that—

(i) states that the plaintiff has reviewed the complaint and authorized its filing;

(ii) states that the plaintiff did not purchase the security that is the subject of the complaint at the direction of plaintiff’s counsel or in order to participate in any private action arising under this chapter;

(iii) states that the plaintiff is willing to serve as a representative party on behalf of a class, including providing testimony at deposition and trial, if necessary;

(iv) sets forth all of the transactions of the plaintiff in the security that is the subject of the complaint during the class period specified in the complaint;

(v) identifies any other action under this chapter, filed during the 3-year period preceding the date on which the certification is signed by the plaintiff, in which the plaintiff has sought to serve as a representative party on behalf of a class; and

(vi) states that the plaintiff will not accept any payment for serving as a representative party on behalf of a class beyond the plaintiff’s pro rata share of any recovery, except as ordered or approved by the court in accordance with paragraph (4).

Statutes & Rules Uncategorized

Labor Class Action Lawsuits Again Lead Weekly New Class Action Filings In California State And Federal Courts

In order to assist California class action defense attorneys in anticipating claims against which they may have to defend, we provide weekly an unofficial summary of legal categories for class actions 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. This report covers the time period of April 27 – May 3, 2007. We include only those categories that contain 10% or more of the class action filings during the relevant timeframe.

Class Actions In The News Uncategorized

Class Action Defense Cases-Grays v. Carrier: Washington Federal Court Rejects Defense Arguments Against Certification Of Class Action Holding The Presumption Of Reliance Applied In This Fraud Class Action

Presumption of Reliance may be Applied in Fraud Class Action Lawsuit Where Defendant’s Omission is Primarily at Issue, and Existence of Individual Statute of Limitations Defenses does not Preclude Certification of Class Action Washington Federal Court Holds

Plaintiffs filed a putative class action against Carrier Corporation for misrepresentation, violation of Washington’s Consumer Protection Act (WCPA), unjust enrichment and breach of warranty alleging that the company “concealed a known defect in its high-efficiency condensing furnaces.” Grays Harbor Adventist Christian School v. Carrier Corp., _\_F.Supp.2d __ (W.D. Wash. May 1, 2007) [Slip Opn., at 2]. Plaintiffs moved to certify the lawsuit as a class action, id., at 1; defense attorneys opposed certification as a class action, primarily arguing that the commonality and superiority requirements of Rule 23(b)(3) had not been met, id., at 5. The district court certified the class action as requested, concluding that the requirements of FRCP Rule 23(a) and (b)(3) have been met.

The district court first addressed the requirements of Rule 23(a). Because the putative class consists of thousands of members, the court found that Rule 23(a)(1)’s numerosity requirement had been met. Grays, at 3. The federal court further found that the proposed class action “clearly” satisfied Rule 23(a)(2)’s commonality requirement, explaining at page 3:

Certification of Class Actions Class Action Court Decisions Uncategorized

Class Action Defense Cases-Fireside Bank v. Superior Court: California Court Reaffirms Importance Of One-Way Intervention Rule In Class Action Alleging Fair Debt Collection And Unfair Competition Violations

Trial Court Order on Motion for Judgment on the Pleadings in Fair Debt Collection/Unfair Competition Law Class Action Violated One-Way Intervention Rule but Remedy is Vacating of Order Rather than Barring Class Action to Proceed California Supreme Court Holds

Sandra Gonzalez filed a class action cross-complaint against Fireside Bank alleging inter alia violations of California’s Consumer Legal Remedies Act (CLRA) and Unfair Competition Law (UCL) for failing to comply with the statutory notice requirements for collection of a deficiency judgment on vehicle sales contracts. Fireside Bank v. Superior Court, 56 Cal.Rptr.3d 861, 2007 WL 1112020, *1 (Cal. April 16, 2007). Gonzalez moved for judgment on the pleadings, and for an order certifying her lawsuit as a class action. The bank objected to any ruling on the merits of the class action until after the court first ruled on the motion to certify a class action, arguing that the one-way intervention rule required that procedure be followed. The trial court promised to rule on the class action certification first, but instead it simultaneously granted both motions. The Supreme Court held that this was error, and vacated the order granting the motion for judgment on the pleadings.

Gonzalez purchased a vehicle for her father, obtaining dealer financing but intending that her father use and pay for the vehicle. Fireside, at *1. The sales contract was assigned to Fireside Bank, and the loan went into default so the bank repossessed the vehicle, id. The bank sent Gonzalez a notice advising her of her redemption rights but overstating the amount due by $2700. Id. The bank then filed a lawsuit against Gonzalez seeking a deficiency judgment; Gonzalez filed a cross-complaint alleging that the bank failed to comply with the Rees-Levering Motor Vehicle Sales and Finance Act (Rees-Levering) in that the bank’s notice of intent was defective, thereby precluding the bank from seeking a deficiency judgment. Id., at *2. In part, the cross-complaint alleged violations of Rees-Levering and of California’s unfair competition law (UCL), id. The bank conceded that the notice contained a mistake, attributing it to a “computer error” and admitting that 3,000 other borrowers also received inaccurate notices. Id. Gonzalez moved for judgment on the pleadings on the bank’s complaint; the bank opposed the motion arguing, in part, that “before obtaining a ruling on the motion Gonzalez must seek or forswear certification of a class . . . and the trial court should take the motion off calendar or deny it without prejudice until class issues, if any, were resolved.” Id. The trial court postponed ruling on the motion, id.

Gonzalez amended her cross-complaint to assert the Rees-Levering Act and UCL claims on behalf of “all persons who had received postrepossession [sic] notices from Fireside Bank on accounts started in California in which the listed redemption amount failed to subtract the credit for unearned finance charges,” and then moved the court to certify the action as a class action. Fireside, at *2. The bank opposed the motion, id. The trial court set the hearing on the motion to certify a class action for the same date as the hearing on the motion for judgment on the pleadings; in so doing, the court indicated that it would likely certify a class action. Id., at *3. The bank also objected to any ruling on the motion for judgment on the pleadings until after the class certification issue was resolved, id. The Supreme Court noted at page *3 that “The trial court assured counsel that it was ‘not going to rule’ on the motion for judgment on the pleadings ‘until I decide the issue of certification.’” Id. But the trial court issued orders not only granting the motion to certify a class action, but also granting the motion for judgment on the pleadings based on its finding that the bank had “failed to comply with the notice requirements under the Rees-Levering Act” and therefore the bank could not recover a deficiency judgment. Id.

Certification of Class Actions Class Action Court Decisions Uncategorized

Class Action Defense Cases-Barnes v. First American: Ohio Federal Court Denies Motion To Amend Class Action Complaint To Substitute New Class Representatives

Federal Court Holds that Putative Class Members are not “Current Parties” to Class Action, and that Rule 41 Applies to Class Action Plaintiffs Requiring Consent of Defendant for Dismissal

Plaintiffs filed a putative class action against their title insurer, First American, alleging that the prices charged by First American for title insurance issued in connection with refinance transactions violate state law. First American filed a counterclaim against plaintiffs and joined two parties as third-party defendants. Ten months after filing the class action, plaintiffs’ lawyer sought leave of court to file a second amended class action complaint for the purpose of substituting class representatives. Barnes v. First American Title Ins. Co., 473 F.Supp.2d 798, 799 (N.D. Ohio 2007). Defense attorneys opposed the motion on several grounds including (1) the existence of counterclaims unique to plaintiffs, precluding dismissal absent a stipulation with First American; (2) the absence of good cause in that plaintiffs knew the facts underlying the motion at the time they filed the class action; (3) the proposed amendment to the class action complaint “does not assert new claims but rather seeks a wholesale substitution of parties with different facts and discovery”; (4) the resulting prejudice to First American in that substantial discovery had been completed during the preceding 10 months; and (5) the joinder by First American, as third-party defendants, the agents who sold plaintiffs the title policies at issue. Id. The district court agreed with the first and third arguments, and denied the motion to substitute class representatives.

Believing that they could not adequately represent the proposed class, plaintiffs’ lawyer sought to substitute in as class representatives Dean and Aimee Hickman in place of Randolph and Stacie Barnes because the Barnes’ are involved in probate court litigation in which “Mr. Barnes’ brother asserts the deed for the subject property that was subsequently refinanced by the Barnes was forged or obtained by fraud.” Barnes, at 799. Plaintiffs relied upon the general rule that leave to amend should be liberally granted and argued that “courts routinely grant leave to substitute parties in class action litigation.” Id. The district court recognized that the Sixth Circuit is “very liberal” in allowing complaints to be amended, id., at 800, but nonetheless denied the motion.

Class Action Court Decisions Uncategorized

Wal-Mart Class Action Defense Case-Savaglio v. Wal-Mart: Records Filed With Court In Labor Law Class Action Were Not Properly Sealed Thus Entitling News Agency To Access To Records Filed “Conditionally Under Seal” In Class Action California Court Holds

California Appellate Court Holds Wal-Mart Defense Attorneys Failed to Properly Move to Seal Records Filed with Court During Litigation of Labor Law Class Action, Reversing Trial Court Order Sealing Class Action Records

In February 2001, a class action was filed against Wal-Mart in California state court alleging violations of various labor laws; defense and plaintiff attorneys stipulatedd to a confidentiality and protective order governing documents filed with the court during the class action litigation, and the trial court entered a Protective Order in February 2002. Savaglio v. Wal-Mart Stores, Inc., ___ Cal.App.4th ___ (Cal.App. April 9, 2007) [Slip Opn., at 2]. The Protective Order provided that certain documents filed in the class action would be “conditionally sealed” pending a motion for an order permanently sealing the records, id. The class action was vigorously fought, and Wal-Mart filed petitions with the California Court of Appeal for writ relief following the trial court order certifying the lawsuit as a class action and following the trial court order denying Wal-Mart’s motion for summary adjudication. Id., at 3. Defense attorneys did not seal any of the records filed with appellate court, id., at 1, 4, and did not file a motion in the trial court to permanently seal the records filed with the court, id., at 1, 5. A newspaper sought to review the documents filed in the class action, and Wal-Mart responded with a motion to permanently seal the records. Id., at 1. The trial court granted the defense motion in part, ordering that certain documents filed during the class action litigation be permanently sealed; the appellate court reversed.

The newspaper first sought the records filed in the class action litigation. Savalgio, at 3-4. The newspaper then sought access to the appellate records, and were advised by the clerk that the records of the Court of Appeal were not sealed, id., at 4. In response, Wal-Mart sent a letter to clerk representing that the records had been sealed by the trial court and thus should be deemed sealed on appeal; the appellate court agreed to conditionally seal the records pending a determination by the trial court of whether the records it were in fact sealed, id. at 5. The trial court denied the newspaper’s motion to unseal the records, and wal-Mart filed a motion with the trial court to permanently seal the records. Id. Ultimately, the trial court ordered a “small portion” of the records permanently sealed, id. The newspaper moved for attorney fees under California Code of Civil Procedure section 1021.5, but the trial court denied the motion. Id., at 6. The newspaper appealed both rulings.

Class Action Court Decisions Uncategorized

Class Action Defense Cases-Shaw v. Marriott: Federal Court Holds Class Action Under District Of Columbia Unfair Business Practice Laws Properly Brought In United States And Survives Motion To Dismiss

Federal Court for the District of Columbia Holds that Class Action Under District of Columbia Laws Predicated on Foreign Currency Exchange Rates Charged at Russian Hotel need not be Dismissed for Forum Non Conveniens and Survived Motion to Dismiss for Failure to State a Claim

Plaintiffs filed a putative class action against Marriott for unfair business practices under the Consumer Protection Procedures Act of the District of Columbia (CPPA) alleging that the company misrepresents the pricing practices at Marriott’s Moscow Hotel, specifically with respect to the exchange rates quoted by Marriott to its customers. Shaw v. Marriott Int’l, Inc., 474 F.Supp.2d 141, 142-43 (D.D.C. 2007). The action had been filed in the superior court, but the defense removed the class action to federal court under the Class Action Fairness Act of 2005 (CAFA). Id., at 143, 147 n.5. Plaintiff Shaw reserved a room at the Marriott-owned Renaissance Moscow Hotel at a rate of $425 per night. Id., at 143. The Marriott website stated that the exchange rate was 27.78 Russian rubles to the dollar, but when he checked out of the hotel, his bill reflected an exchange rate of 32 rubles to the dollar, id. Other class representatives had similar experiences. Id. Defense attorneys filed a motion to dismiss the class action for failure to state a claim or on the ground of forum non conveniens because the events central to the class action took place in Russia, id., at 144, which the district court denied, id., at 142.

The district court began with the forum non conveniens argument. The court readily concluded that the defense argument misstated the allegations of the class action complaint because the defense focused on acts in Russia and alleged violations of Russian law. Shaw, at 144-45. In point of fact, the court held, the class action focused on events that transpired at Marriott’s corporate headquarters in the District of Columbia and on violations of District of Columbia laws, id. The federal court also found that a balancing of the public and private interest factors supports keeping the case in the District of Columbia, id., at 145-46. Further, “There is no question that testimony from Marriott’s witnesses related to these claims is more accessible in the District of Columbia, as are business records and other documents.” Id., at 146.

Class Action Court Decisions Uncategorized

24 CFR § 3500.21—Transfer Of Mortgage Servicing Under

For class action defense attorneys who defend against RESPA (Real Estate Settlement Procedures Act) class actions, we provide the text of Regulation X.Congress gave authority to the Secretary of the Department of Housing and Urban Development (HUD) to promulgate regulations for RESPA, and the regulations are set forth in 24 CFR § 3500.1 et seq.The regulations skip because 24 CFR § 3500.20 was removed and reserved; the next RESPA regulation, therefore, is found at 24 CFR § 3500.

Statutes & Rules Uncategorized

Labor Law Class Action Filings Continue To Dominate New Class Action Cases Facing California Defense Attorneys

To aid California class action defense attorneys in anticipating claims against which they may have to defend, we provide weekly an unofficial summary of legal categories for class actions 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. This report covers the time period of April 20 – April 26, 2007. We include only those categories that contain 10% or more of the class action filings during the relevant timeframe.

Class Actions In The News Uncategorized