Tobacco Class Action Defense Cases-Dahl v. R.J. Reynolds: Eighth Circuit Reverses Denial Of Motion To Remand Class Action To State Court

Class Action Remanded to State Court because Circuit Court of Appeals Opinion in a Different Case does not Constitute “an Amended Pleading, Motion, Order or Other Paper” Within the Meaning of 28 U.S.C. § 1442(b) Eighth Circuit Holds

In 2003, plaintiffs filed a class action in Minnesota state court against R.J. Reynolds & Touche for fraud and violations of state consumer protection laws alleging that the company engaged in “unfair business practices and/or deceptive and unlawful conduct in connection with the manufacture, distribution, promotion, marketing, and sale” of “light” cigarettes. Dahl v. R.J. Reynolds Tobacco Co., 478 F.3d 965, 966 (8th Cir. 2007). Defense attorneys removed the class action complaint to federal court but the district court remanded the class action to state court because the claims of the individual plaintiffs were less than $75,000; the state court then dismissed the class action complaint on the ground that the claims therein were preempted by federal law under the Cigarette Labeling and Advertising Act of 1965, 15 U.S.C. § 1331. Id. During the pendency of the state court appeal, the Eighth Circuit issued an opinion that held another tobacco company had established federal officer jurisdiction in a case involving the marketing of light cigarettes, id. (citing Watson v. Philip Morris Cos., 420 F.3d 852 (8th Cir. 2005), cert. granted, ___ U.S. ___, 127 S.Ct. 1055 (January 12, 2007); defense attorneys again removed the class action to federal court, arguing federal officer jurisdiction, _id._ Plaintiffs’ lawyer moved to remand the class action complaint to state court, arguing that the notice of removal was untimely, but the district court denied the motion. _Id._ The Circuit Court reversed.

Briefly, the class action complaint was filed in 2003 and timely removed to federal court; following remand, the trial court dismissed the class action and plaintiffs appealed. Dahl, at 966. On August 25, 2005, while the appeal from the dismissal of the class action complaint was pending, the Eighth Circuit issued its opinion in Watson holding that Philip Morris had established federal officer jurisdiction under 28 U.S.C. § 1442(a), and on September 22, 2005, defense attorneys removed the class action to federal court under § 1442(a). Id., at 967. Plaintiffs argued that the removal was untimely as it was not brought within the 30-day limit set forth in § 1442(b); the district court denied the motion, agreeing with the defense that “Watson made it clear for the first time that federal courts have jurisdiction over claims like those in this case and its receipt of that opinion recommenced the thirty day time period for removal.” Id.

Class Action Court Decisions Removal & Remand Uncategorized

FDCPA Class Action Defense Cases-Taylor v. Quall: California Federal Court Partially Grants Defense Motions To Strike And For Summary Judgment In Class Action Alleging FDCPA (Fair Debt Collection Practices Act) Violations

Federal Fair Debt Collection Practices Act (FDCPA) does not Authorize Injunctive Relief Against Debt Collectors, FDCPA One-Year Statute of Limitations Begins to Run no later than Date Debt Collector Files Suit Against Debtor, and Debt Collector need only Establish that Notice Required by § 1692g was Sent, not Received, California Federal Court

Plaintiff filed a putative class action against debt collector and its attorneys in California state court for alleged violations of the Fair Debt Collection Practices Act (FDCPA) and California’s equivalent statute known as the Rosenthal Fair Debt Collection Practices Act (California’s FDCPA). Defense attorneys removed the class action to federal court and moved to dismiss the California state-law claims arguing that they were barred by California’s litigation privilege; the district court agreed with the defense and dismissed those portions of the class action complaint. Taylor v. Quall, 471 F.Supp.2d 1053, 1056-57 (C.D. Cal. 2007). Defense attorneys then filed a motion to strike certain portions of the class action complaint, as well as a motion for summary judgment. Id., at 1055-56. The district court granted these motions in part, and granted the request of plaintiff’s lawyer for additional time to conduct discovery as to the FDCPA § 1692e claim in the class action complaint.

The class action arose from the following facts: a Plaintiff obtained a credit card from Citibank but stopped making payments on the card in early 2002. Citibank transferred the debt to defendant Unifund CCR Partners, and Unifund retained California attorney Matthew Quall to collect the debt. Taylor, at 1056. Quall sent plaintiff a collection letter in May 2005, and filed suit against plaintiff in June 2005; that lawsuit eventually settled, and Quall filed a request for dismissal without prejudice. Id. Plaintiff’s class action complaint was filed in July 2006 (mistakenly identified as 2005 in the court order), the claims of which the district court summarized at page 1056: “Plaintiff asserts that Quall (1) failed to provide the proper notice of debt required by 15 U.S.C. § 1692g when he began his collection efforts; (2) made false or misleading representations while negotiating the settlement in violation of § 1692e; (3) failed to fulfill the FDCPA’s standard for “meaningful” attorney involvement; and (4) violated the FDCPA by filing the Unifund Action without complying with California statutes governing suits brought on behalf of entities with fictitious business names.”

Class Action Court Decisions FDCPA Class Actions Uncategorized

ADA Class Action Defense Cases-Ligas v. Maram: Seventh Circuit Affirms Denial Of Request To Intervene In Class Action Under Federal Americans With Disabilities Act (ADA)

Proposed Intervenors in Class Action Under ADA (Americans with Disabilities Act) Failed to Establish Error in Denial of Leave to Intervene Seventh Circuit Holds

Plaintiffs filed a class action against the State of Illinois under the Americans with Disabilities Act (ADA) concerning “the proper way to provide care for the developmentally disabled”; specifically, whether the developmentally disabled are better served by institutionalized care or by integration into the community. Ligas v. Maram, 478 F.3d 771, 772-73 (7th Cir. 2007). Plaintiffs believed the latter, and filed suit designed “to hasten the state of Illinois down the road to community-based care,” id., at 773. Certain members of the proposed class, however, feared that they would be forced into community-based programs even if they preferred institutionalized care, so they petitioned the federal court for leave to intervene, either as of right or permissively. Id., at 773. Defense attorneys and plaintiffs in the class action opposed intervention; the district court denied leave to intervene and the proposed intervenors appealed. Id. The Court of Appeals affirmed, rejecting the effort to intervene in the class action.

With respect to the issue of intervention as of right, the Seventh Circuit defined the issues on appeal as “whether the action threatens to impair that interest and whether the parties fail to represent those interests adequately.” Ligas, at 774. The only possible impairment of proposed intervenors’ interests would be if they were no longer able to choose whether to receive institutionalized care, id. The district court found, however, that the class action complaint was “replete with language on choice,” id. The appellate court agreed, holding that nothing in the class action complaint would force community-based care upon those who desired institutionalized care. Id. With respect to adequate representation of their interests, the district court found proposed intervenors’ arguments to be “at best speculative, and at worst conclusory,” id. Again the Circuit Court agreed.

Class Action Court Decisions Uncategorized

Bally Class Action Defense Cases-Phillips v. Bally Total Fitness: Illinois State Court Affirms Dismissal Of Named Plaintiffs From Class Action Litigation Based On Lack Of Standing

Class Action Plaintiffs who are Residents of Colorado and Missouri Lacked Standing to Prosecute Class Action Complaint Alleging Violations of Illinois State Statutes

Plaintiffs filed a putative class action in Illinois state court against Bally Total Fitness for violations of the state’s Consumer Fraud and Deceptive Business Practices Act (Consumer Fraud Act) and Physical Fitness Services Act (Fitness Act). Phillips v. Bally Total Fitness Holding Corp., ___ N.E.2d ___ (Ill.App. March 26, 2007) [Slip Opn., at 1]. Defense attorneys moved to dismiss from the class action plaintiffs Aaron Stone of Colorado and Teresa Brown of Missouri on the grounds that they lacked standing as out-of-state residents to prosecute the class action, _id._, at 4; the trial court granted the motion and the appellate court affirmed, _id._, at 1. The class action complaint was not dismissed in its entirety because the defense had not challenged the standing of the two named plaintiffs who are residents of Illinois. _Id._

The class action complaint alleged that the principal place of business and corporate headquarters of Bally Total Fitness is in Illinois, and that Bally has 4 million members at 420 fitness centers in 29 states as well as international locations. Phillips, at 2. Plaintiff Stone joined a Colorado facility in March 2001, agreeing to pay $1900 for 3 years; he alleged that his contract was month-to-month and could be canceled at any time, and could be transferred to another fitness center if he moved. Id. When Stone moved to Denver, he could not find a Bally facility in his area and tried to cancel his membership; Bally refused to honor the cancellation request, demanded payment in full, and then sold the debt to a collection agency. Id. Stone’s contract gave a Colorado address for the company, and Bally’s statements and correspondence with Stone gave a California address. Id., at 2-3.

Class Action Court Decisions Uncategorized

24 CFR § 3500.16—Title Companies Under Regulation X (Real Estate Settlement Procedures Act-RESPA)

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 title companies are set forth in § 3500.16, which provides:

Statutes & Rules Uncategorized

Labor Law Class Action Lawsuits Again Lead Weekly California State And Federal Court Class Action Filings

To assist California 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

Webloyalty.com Class Action Defense Case—In re Webloyalty.com: Judicial Panel On Multidistrict Litigation (MDL) Grants Motion To Centralize Class Action Litigation In The District Of Massachusetts

Judicial Panel Grants Request, Unopposed by Defense, for Pretrial Coordination of Class Action Lawsuits Pursuant to 28 U.S.C. § 1407 Four class action lawsuits (three in Massachusetts and one in California) were filed against Webloyalty.com and various other defendants alleging that they “engaged in a scheme to defraud consumers whose personal and/or credit card information was accessed by Webloyalty during online transactions (with the defendant web retailer(s) involved in each action) as part of Webloyalty’s Reservation Rewards or other programs.

Class Action Court Decisions Multidistrict Litigation Uncategorized

Class Action Defense Cases—In re National Security Agency: Judicial Panel On Multidistrict Litigation (MDL) Denies Requests To Exclude Class Actions From Coordinated/Consolidated Pretrial Proceedings In The Northern District Of California

Judicial Panel Agrees with Government and Telecommunication Company Defense Attorneys that Six Additional Class Action Lawsuits Should be Transferred to Northern District of California for Pretrial Coordination or Consolidation with Class Actions Previously Transferred Pursuant to 28 U.S.C. § 1407

Several class action lawsuits were filed against the federal government challenging the government’s “surveillance of telecommunications activity and the participation in (or cooperation with) that surveillance by individual telecommunications companies.” In re National Security Agency Telecommunications Records Litig., ___ F.Supp.2d ___, 2007 WL 549355, *1 (Jud.Pan.Mult.Lit. February 15, 2007). In response to a motion to centralize that litigation, the Judicial Panel on Multidistrict Litigation (MDL) held in part that “centralization under Section 1407 was necessary in order to eliminate duplicative discovery, prevent inconsistent pretrial rulings (particularly with respect to matters involving national security),” and transferred the class action cases to the Northern District of California. _Id._ (citing _In re National Security Agency Telecommunications Records Litig._, 444 F.Supp.2d 1332, 1334 (Jud.Pan.Mult.Lit. 2006)). Plaintiffs in a class action pending in Missouri, together with defense attorneys involve in class actions pending in Connecticut, Maine, Missouri, New Jersey and Vermont, moved the Judicial Panel to vacate its orders conditionally transferring the affected class action cases to the Northern District of California for inclusion in the coordinated or consolidated pretrial proceedings; plaintiffs in the initially centralized actions joined in the motion, opposing transfer of the additional class actions. _In re NSA Telecommunications_, 2007 WL 549355 at *1. The United States and telecommunication company defendants opposed the motions to vacate.

The Judicial Panel denied the motions, reaffirming that these six class actions involve common questions of fact with the class actions previously centralized in the Northern District of California. In re NSA Telecommunications, 2007 WL 549355 at *1. The Panel concluded, “Transfer of these actions is appropriate for reasons expressed by the Panel in its original order directing centralization in this docket.” The Panel explained at page *1:

Class Action Court Decisions Multidistrict Litigation Uncategorized

State Farm Class Action Defense Cases-Rios v. State Farm: Iowa Federal Circuit Denies Defense Motion To Strike Nationwide Class Action Allegations From Complaint

Defense Motion to Strike Class Action Allegations Must be Denied Pending Further Discovery to Develop Facts Needed to Evaluate Commonality and Superiority Requirements for Class Action Certification Iowa Federal Court Holds

This class action – Rios v. State Farm Fire & Cas. Co., 469 F.Supp.2d 727 (S.D. Iowa 2007) – has a tortured procedural past. The initial class action complaint was filed in Iowa state court in August 2004. Defense attorneys removed the class action to federal court on the basis of diversity jurisdiction, but the federal court remanded the action to state court for failure to establish the $75,000 threshold. See Varboncoeur v. State Farm Fire & Cas. Co., 356 F.Supp.2d 935 (S.D. Iowa 2005). Plaintiffs then filed a motion to amend the complaint so as to seek certification of a nationwide class, whereas the original complaint alleged only a statewide class action. Defense attorneys again removed the class action to federal court, this time on the basis of the Class Action Fairness Act of 2005 (CAFA); the federal court again remanded the action, holding that until the state court ruled on the motion to amend, the federal court lacked jurisdiction. Rios, at 730. Once the state court granted the motion to amend the class action complaint, defense attorneys removed the class action to federal court under CAFA. Id.

Plaintiffs filed a putative class action alleging that State Farm paid homeowner’s insurance policy benefits for roof repairs by paying the insured the cost of a roof “overlay” upfront, but withholding the balance of the policy benefits otherwise available to cover the cost of a roof “tear-off” until the insured had actually completed such repairs. Rios, at 731. As the district court explained at page 731, “For example, if a policyholder incurred roof damage that was covered under the policy, and the total replacement cost of the roof damage was $3,000.00, then under the standard policy, State Farm would only pay the policyholder the cost to overlay the roof (hypothetically $1,800.00) upfront, and withhold the rest of the replacement cost (hypothetically $1,200.00), i.e., tear-off costs plus depreciation, until actual repairs were made on the roof.” This provided a financial benefit to the insurer, because “[i]f the policyholder did not make the tear-off repairs within the two-year time period provided under the policy, then State Farm would not have to pay the $1,200.00 tear-off costs to the policyholder.” Id.

Certification of Class Actions Class Action Court Decisions Uncategorized

RESPA Class Action Defense Cases-Benway v. Resource Real Estate Services: Maryland Federal Court Rejects Defense Arguments And Certifies Class Action Under RESPA (Real Estate Settlement Procedures Act)

Maryland Federal Court Redefines Class to Address Typicality Concerns In Federal Real Estate Settlement Procedures Act (RESPA) Class Action and then Certifies Class Action Alleging Illegal Kickbacks and Payment of Unearned Fees Under RESPA

Plaintiffs filed a class action in Maryland state court against various defendants alleging that they charged excessive fees in connection with mortgage brokerage, title or settlement services and would pay referral fees in violation of the federal Real Estate Settlement Procedures Act (RESPA); defense attorneys removed the class action to federal court. Benway v. Resource Real Estate Serv., LLC, 239 F.R.D. 419, 421 (D. Md. 2006). Plaintiffs moved to certify the lawsuit as a class action; defense attorneys objected that commonality, typicality and adequacy did not exist under Rule 23(a), and that the motion failed to establish that the requirements of Rule 23(b). Id., at 422. The district court granted the motion but limited the scope of the class action. Specifically, the court certified a class action on behalf of “All borrowers who entered into mortgage loan transactions using the services of Resource Real Estate where the HUD-1 Settlement Statement, or other documents in the loan file, included a charge for or payment to Clipper City Settlement Services, Inc.” Id., at 427.

The class action complaint alleged that Resource Real Estate Services provides real estate title and mortgage loan closing services and that Millard Rubenstein is its majority owner and its Managing Member, that Access One Mortgage Group provides mortgage broker services, and that Resource and Access One formed an affiliated business arrangement (ABA) called Clipper City Settlement Services “to appear on mortgage closing documents as an entity which had performed title work or settlement services.” Benway, at 421. The class action alleged “Resource and Access One conducted a scheme to extract referral fees from borrowers using ABAs like Clipper City”; specifically, Access One would refer borrowers to Resource for title work and Resource would perform the title work, but “the loan closing documents would attribute that work to Clipper City, and the fees charged for the work would exceed the customary fees charged by Resource.” Id. Plaintiffs also allege that Resource “would channel a portion of the fees collected by Clipper City to Access One as a referral reward, without notifying the borrower.” Id.

Certification of Class Actions Class Action Court Decisions RESPA/TILA Class Actions Uncategorized