Class Action Defense Cases-Griffith v. Javitch: Ohio Court Holds Debtor’s Federal Fair Debt Collection Practices Act (FDCPA) Class Action Claim Belongs To Bankruptcy Trustee And Approves Settlement Of Individual Claim

FDCPA Class Action Claim Belonged to Bankruptcy Estate and Settlement of Individual Claim Appropriate because Trustee could not Prosecute Class Action Ohio Federal Court Holds

After a law firm filed an action to collect a debt from her, plaintiff filed a putative class action against the law firm alleging violations of the federal Fair Debt Collection Practices Act (FDCPA). Griffith v. Javitch, Block & Rathbone, LLP, 358 B.R. 338, 340 (S.D. Ohio 2007). Shortly thereafter, plaintiff and her husband filed a Chapter 7 bankruptcy petition in the federal court for the Southern District of Ohio, staying the underlying action, and plaintiff listed the class action as a contingent claim her creditor, Great Seneca Financial Corporation, but did not separately list her class action against the law firm. Id. The bankruptcy trustee determined that it was a no-asset case, and plaintiff and her husband received a bankruptcy discharge in October 2004; less than a month later, the underlying lawsuit was reopened. Id. The parties jointly requested a stay pending a decision by the federal Court of Appeals for the Sixth Circuit in a case concerning “several defenses to an FDCPA suit that are raised by [the law firm] here on essentially identical factual allegations,” id. (citing Todd v. Weltman, Weinberg & Reis, 434 F.3d 432 (6th Cir. 2006). The underlying class action again became active in June 2006.

Defense attorneys moved for dismissal or summary judgment, arguing that the class action claim belonged to the bankruptcy trustee because it was not properly listed on the bankruptcy petition schedules; accordingly, the defense argued, plaintiff lacked standing to prosecute the class action. Griffith, at 340. Plaintiff countered that a “class action claim” had been listed on the petition, and advised the court that the bankruptcy trustee would be filing a formal abandonment of the claim so that her class action could proceed; instead, the trustee advised plaintiff’s lawyer that it would not be in the best interests of the bankruptcy estate to abandon the claim. Id. The court issued an order to show cause why the complaint should not be dismissed for lack of standing, but the defense motions were held in abeyance pending further bankruptcy court proceedings. Id. The trustee moved to reopen the bankruptcy case, and to hire plaintiff’s lawyer to prosecute the class action on behalf of the estate. Id.

Certification of Class Actions Class Action Court Decisions FDCPA Class Actions Uncategorized

Class Action Defense Cases-Phason v. Meridian Rail: Federal WARN Act Applies If Employer Terminates Employees Before Sale Of Assets Closes Warranting Reversal Of Judgment In Favor Of Defense In Class Action Seventh Circuit Holds

Second Circuit Holds in Putative Class Action that Federal Worker Adjustment Retraining and Notification (WARN) Act Applies if Sale of Assets to New Company is Delayed until One Week After Termination of Employees even if Employees cannot Demonstrate any Economic Harm

Plaintiffs filed a putative class action against their former employer, Meridian Rail, alleging violations of the federal Worker Adjustment Retraining and Notification Act of 1988 (WARN) arising out of the closure (through sale) of one of its operations sites. Phason v. Meridian Rail Corp., 479 F.3d 527, 528 (7th Cir. 2007). The district court entered judgment for defendant, holding that the WARN Act did not apply. Based on that holding, the district court found it unnecessary to determine whether the putative class action should in fact proceed as a class action. The Seventh Circuit reversed.

On December 31, 2003, Meridian Rail disclosed to its employees that it was immediately ceasing operations in Chicago Heights, Illinois, and “invited them to apply for jobs with NAE Nortrak, Inc., which had agreed to buy the assets.” Phason, at 578. Nortrak previously had issued an identical invitation in mid-December after “Nortrak and Meridian shook hands on the deal.” Id. However, the sale did not close until January 8, 2004, 8 days after Meridian had “severed all ties to the former workers.” Id. Because the WARN Act requires that an employer give 60 days’ notice before subjecting at least 50 of them to “employment loss,” this class action lawsuit was filed. The district court described the theory behind the class action as “simple,” explaining at page 579: “One statutory trigger is a ‘plant closing,’ which 29 U.S.C. § 2101(a)(2) defines as any ‘permanent or temporary’ shutdown that ‘results in an employment loss at the single site of employment during any 30-day period for 50 or more employees’.”

Defense attorneys argued, and the district court held, that the WARN Act does not apply because Nortrak hired all but about 45 Meridian Rail employees. Phason, at 528-29. Meridian Rail relied upon the last sentence of Section 2101 (b)(1), which provides: “Notwithstanding any other provision of this Act, any person who is an employee of the seller (other than a part-time employee) as of the effective date of the sale shall be considered an employee of the purchaser immediately after the effective date of the sale.” The Circuit Court explained at page 529 that “[t]his sentence is the linchpin of Meridian’s position.” According to Meridian Rail, “It sold the plant to Nortrak, and as Nortrak soon hired many of the workers (leaving fewer than 50 disappointed applicants), no ‘employment loss’ occurred.” Id. Plaintiffs countered that the relevant inquiry was “how many people lost their jobs on December 31, 2003, rather than the difference between that number and how many found work later,” and it was undisputed that if December 31 is the relevant date than over 50 lost employment. Id., at 529.

Uncategorized

Class Action Defense Issues–California Supreme Court Holds That Additional Hour Of Pay Under Labor Code Is Subject To 3-Year Statute Of Limitations

“On Additional Hour of Pay” under California Labor Code Section 226.7 Constitutes Wage or Premium Pay Subject to Three-Year Statute of Limitations Period, not a Penalty Subject to One-Year Limitations Period, California Supreme Court Holds In a case that will have a substantial and immediate impact on labor law class action cases, the California Supreme Court today issued its long-awaited decision in Murphy v. Kenneth Cole Productions, Inc., which addressed two issues: “first, whether the ‘one additional hour of pay’ provided for in Labor Code section 226.

Class Action Court Decisions Employment Law Class Actions Uncategorized

Merck Class Action Defense Cases-In re Merck: New Jersey Federal Court Grants Defense Motion To Dismiss Securities Fraud Class Action Finding Class Action Claims Barred By Statute Of Limitations

Extensive News Reports of the Risks of Vioxx Placed Investors on Inquiry Notice More than Two Years before Filing of Securities Fraud Class Actions, Thus Warranting Dismissal of Class Action Complaint as Time-Barred as Requested by Defense Federal Court Holds

This securities fraud class action is but one of thousands of class action and individual complaints filed against Merck arising out of its prescription drug Vioxx. This class action alleged that Merck withheld information that Vioxx increased a patient’s risk of heart attack and misrepresented the drug’s safety. In re Merck & Co., Inc., Securities, Derivative & “ERISA” Litig., ___ F.Supp.2d ___ (D. N.J. April 12, 2007) [Slip Opn., at 2]. Defense attorneys moved to dismiss the class action complaint on several grounds, mostly notably that the claims were time-barred, _id._, at 1-2; the district court agreed with the statute of limitations defense and dismissed the class action complaint with prejudice as untimely.

By way of background, Merck brought Vioxx – a nonsterodial anti-inflammatory drug (NSAID) – to the market in May 1999,and two years later the Food & Drug Administration approved Vioxx for various uses. Slip Opn, at 2-3. “Merck continued to research, study and test Vioxx after its approval by the FDA and introduction to the market.” Id., at 3. In March 2000, Merck disclosed that one of those studies revealed that an increased incidence of heart attack and other thrombotic events. Id. Merck’s press release attributed this finding to the properties of the control drug but, according to the class action complaint allegations, Merck knew that the real cause of this difference was that Vioxx increased the risk of heart attacks. Id., at 4. The FDA advisory committee found inclusive evidence of the cause of the increased risk of cardiac events but believed it prudent to “include on the Vioxx label data about the higher incidence of cardiovascular events,” id. The study received extensive news coverage as early as April 2000, and several news articles warned patients that Vioxx “might increase their risk of suffering a heart attack.” Id., at 5. Other news reports agreed with Merck’s conclusion that the control drug used in the study worked to prevent heart attacks, thus accounting for the difference in incidence of cardiac events with the Vioxx control group, id., at 6-7. For its part, Merck issued numerous press releases touting the safety of Vioxx, id., at 7-8. The FDA criticized Merck’s promotional efforts, and in a warning letter dated September 17, 2001 and published on the FDA website, the FDA “admonished Merck for misrepresenting the safety profile of Vioxx, downplaying the cardiovascular findings of the . . . study,” id., at 8.

PSLRA/SLUSA Class Actions Uncategorized

Class Action Defense News: New Jersey Federal Court Holds Securities Fraud Class Action Against Merck Time-Barred

On April 12, 2007, United States District Court Judge Stanley R. Chesler of the District of New Jersey dismissed a securities fraud clas action against Merck, agreeing with defense attorneys that the class action claims are time-barred. The ruling represents yet another victory in Merck’s defense against thousands of class action and individual complaints arising, directly or indirectly, out of its prescription drug Vioxx. A summary of the district court’s ruling will be posted later in the week.

Class Actions In The News Uncategorized

24 CFR § 3500.17—Escrow Accounts Under Regulation X (Real

As a resource 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 concerning escrow accounts are set forth in § 3500.17, which provides:

Statutes & Rules Uncategorized

New Employment Law Class Action Lawsuits Continue To Dominate Weekly Class Action Filings In California State And Federal Courts

In order to assist California class action defense attorneys in anticipating the claims against which they may have to defend, we provide weekly, unofficial summaries of the legal categories for new 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. 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-Lessard v. City of Allen Park: Michigan Federal Court Rules In Favor Of Cy Pres Distribution of Unclaimed Class Action Settlement Funds

Cy Pres Distribution of Unclaimed Class Action Settlement Funds Appropriate Michigan District Court Holds Following settlement of a class action, there remained approximately $45,000 in unclaimed funds. The federal court had ordered the settlement funds disbursed in March 2006, and further efforts had been made to contact the individual class members who had not claimed their share of the class action settlement proceeds. Lessard v. City of Allen Park, 470 F.

Class Action Court Decisions Uncategorized

Class Action Defense Cases—In re Vonage IPO: Judicial Panel On Multidistrict Litigation (MDL) Grants Defense Motion To Centralize Class Action Litigation In District of New Jersey

Judicial Panel Grants Defense Request for Pretrial Coordination of Class Action Lawsuits Pursuant to 28 U.S.C. § 1407, Rejecting Opposition by Plaintiffs in One Class Action based on Pending Motion for Remand of Class Action to State Court Fourteen securities class action lawsuits – 13 in New Jersey and one in New York – were filed against various defendants based on the initial public offering of Vonage common stock. In re Vonage Initial Public Offering (IPO) Securities Litig.

Class Action Court Decisions Multidistrict Litigation Uncategorized

TILA Class Action Defense Cases-Carye v. Long Beach: Massachusetts Federal Court Dismisses Individual Rescission Claims In TILA Class Action But Denies Defense Request To Dismiss Class Action Claim And Motion To Sever

As Matter of First Impression, Massachusetts Federal Court Holds that Rider Creates Security Interest in Property Required to be Disclosed under Federal Truth in Lending Act (TILA)

Plaintiff filed a putative class action against his mortgage lender, Long Beach Mortgage Company, for alleged violations of the federal Truth in Lending Act (TILA), later amending the class action complaint to add two additional party plaintiffs and two additional claims – a class action claim under TILA’s state law counterpart, the Massachusetts Consumer Cost Disclosure Act (MCCDA), and an individual claim for under TILA and MCCDA for rescission. Carye v. Long Beach Mortgage Co., 470 F.Supp.2d 3, 5 (D. Mass. 2007). Defense attorneys moved to dismiss the class action claim and plaintiff Carye’s individual claims for rescission pursuant Rule 12(b)(6), and moved also to sever the claims of the newly added plaintiffs. Id. The defense argued that the class action claim failed because TILA does not require the disclosure of the security interest created by Id.

As the district court explained, TILA requires that a creditor disclose to the borrower any security interest taken in property purchased as part of the loan transaction and in any property not purchased as part of the transaction but separately identified. Carye, at 6-7. In this case, plaintiffs borrowed money from Long Beach Mortgage secured by their residences, and each of them signed a 1-4 Family Rider/Assignment of Rents (Rider) as part of their loan documentation. Carye, at 5-6. The Riders created a security interest in property separately identified in detail (see Note, below). Plaintiffs urged that this constituted a violation of TILA; Long Beach argued that the interest was merely “incidental” and, accordingly, was not required to be disclosed under TILA. Id., at 7. Plaintiffs countered that the Rider “created a security interest in virtually all of the plaintiffs’ personal property” and had to be disclosed. Id., at 7-8.

Class Action Court Decisions RESPA/TILA Class Actions Uncategorized