Class Action Defense Cases-DiTolla v. Doral Dental: Second Circuit Holds Class Action Fairness Act (CAFA) 60-Day Deadline For Issuing Opinion Runs From Grant Of Permission To Appeal And That Removing Party Bears Burden Of Proving Jurisdiction

Court Holds as Matter of First Impression in Second Circuit that CAFA does not Modify Burden of Proof to Establish Removal Jurisdiction, and Affirms Remand of Class Action to State Court because Defense Failed to Establish Requisite Amount in Controversy

Plaintiff filed a putative class action against the third party administrator of a pool funded by Medicaid and Medicare, seeking ‘”an accounting of all amounts by which the Pool has been funded and reduced”; defense attorneys estimated this amount to be $40 million (though the complaint was silent as to the amount), and argued that plaintiff had placed that entire amount at issue. The defense removed the class action to federal court under the Class Action Fairness Act of 2005 (CAFA), but the district court remanded the action to state court. DiTolla v. Doral Dental IPA of New York, LLC, 469 F.3d 271, 272-73 (2d Cir. 2006). On appeal, defense attorneys argued that the $5 million “amount in controversy” test was satisfied. Id., at 273. The Second Circuit disagreed.

Preliminarily, the Second Circuit considered the statutory requirement that, absent an extension of time under 28 U.S.C. § 1453(c)(3), the appellate court issue an opinion within 60 days of the granting of an appeal from an order granting or denying remand. DiTolla, at 274. Under 28 U.S.C. § 1453(c)(4), the appeal is deemed denied if a final judgment is not issued within that 60-day window. In DiTolla, defense attorneys sought permission to appeal in May 2006, and permission was granted in July 2006. The defense team filed their brief on August 17, 2006, and a month later, on September 21, 2006, the parties stipulated to extend time for issuance of a opinion. Id. Plaintiff argued that the appeal was “filed” in May, and that the Circuit Court therefore lacked authority to grant permission to appeal because that order came 66 days after the “filing” of the appeal. Id. The Second Circuit disagreed, holding at page 274: “We reject this interpretation . . . and hold that the ‘filing’ of the appeal for CAFA purposes occurs on the date in which this Court issues an order granting permission to appeal.” The Court observed at page 275 that its interpretation is consistent with case law out of the Fifth, Seventh, Ninth and Eleventh Circuits.

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

Parks v. General Motors Class Action Defense Case: South Carolina Federal Court Agrees With GM Defense Team That Class Action Should Not Be Certified Because Car Dealership Failed To Meet Commonality And Predominance Requirements

Court Holds that Affirmative Defenses Preclude Finding of Commonality and Alternatively Finds that Determination of Liability and Damages would Involve Individual Issues of Fact and Law Thereby Defeating Commonality and Predominance Requirements of Rule 23

Plaintiff car dealership filed a putative class action against General Motors seeking injunctive relief and damages arising out of the allegation that GM cleaned a shipment of 2500 vehicles that arrived in the U.S. “covered in a foreign substance” resulting in damage to parts of the vehicles, and then sought to “conceal the extent of the damages from its dealers and the public by making cosmetic repairs and by disposing of the more severely damaged vehicles by auction in Florida.” Parks Auto. Group, Inc. v. General Motors Corp., 237 F.R.D. 567, 569 (D. S.C. 2006). Dealers were not permitted to unilaterally refuse shipment of the repaired vehicles. Moreover, “It is uncontested that GM did not provide a uniform, total repurchasing program for these vehicles. Dealerships were told that any such repurchasing requests would be directed to the regional level on a case by case basis.” Id. Defense attorneys argued that the lawsuit should not be certified as a class action because the complaint did not present common questions of law or fact as required by Rule 23(a)(2). Id., at 570. The district court agreed and denied plaintiff’s motion for class certification. Id., at 573.

The federal court noted that the plaintiff bears the burden of establishing each of the required elements for certification of a class action under Rule 23. Parks, at 570. Plaintiff argued that GM had engaged in a pattern of conduct that was applicable to all class members, id.; but even though the district court recognized that there need only be a single common question of law or fact, id., the court found this argument insufficient to establish commonality. First, the court agreed that GM’s affirmative defenses of accord and satisfaction peculiar to plaintiff defeats commonality, as does its affirmative defenses of release, waiver and comparative negligence as to the remaining putative class members, as the defenses “would require individualized inquiry for each class member.” Id., at 570. As the district court observed, Fourth Circuit case law holds that “where individual affirmative defenses may be asserted against one plaintiff, but not the entire class, class certification is precluded.” Id. As the court explained at page 570, “Although it is difficult to determine with any precision, the court finds that GM’s affirmative defenses are not without merit and would require individualized inquiry in at least some cases. Accordingly, the court finds that class certification would be erroneous.”

Certification of Class Actions Class Action Court Decisions Uncategorized

Public Accommodation/ADA Class Action Lawsuits Surge To Top Spot In Weekly Class Action Filings In California State And Federal Courts As Labor Law Class Action Claims Take Christmas Break

Defense attorneys in California will face a new wave of public accommodation/ADA (Americans with Disabilities Act) class action cases, as employment law class actions – the usual frontrunner in weekly filings – fall to a distant third. In an effort to assist 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.

Class Actions In The News Uncategorized

12 U.S.C. § 2603–Uniform Settlement Statements Under The Real Estate Settlement Procedures Act (RESPA)

As a resource for the class action defense lawyer who defends against RESPA (Real Estate Settlement Procedures Act) class actions, we provide here the text of RESPA. Congress provided for the development of a uniform settlement statement in 12 U.S.C. § 2603, which provides as follows:

§ 2603. Uniform settlement statement

(a) The Secretary, in consultation with the Administrator of Veteran’s Affairs, the Federal Deposit Insurance Corporation, and the Director of the Office of Thrift Supervision, shall develop and prescribe a standard form for the statement of settlement costs which shall be used (with such variations as may be necessary to reflect differences in legal and administrative requirements or practices in different areas of the country) as the standard real estate settlement form in all transactions in the United States which involve federally related mortgage loans. Such form shall conspicuously and clearly itemize all charges imposed upon the borrower and all charges imposed upon the seller in connection with the settlement and shall indicate whether any title insurance premium included in such charges covers or insures the lender’s interest in the property, the borrower’s interest, or both. The Secretary may, by regulation, permit the deletion from the form prescribed under this section of items which are not, under local laws or customs, applicable in any locality, except that such regulation shall require that the numerical code prescribed by the Secretary be retained in forms to be used in all localities. Nothing in this section may be construed to require that that part of the standard form which relates to the borrower’s transaction be furnished to the seller, or to require that that part of the standard form which relates to the seller be furnished to the borrower.

Statutes & Rules Uncategorized

12 U.S.C. § 2602—Definitions Of Terms Used In The Real Estate Settlement Procedures Act (RESPA)

For class action defense attorneys who defend against RESPA (Real Estate Settlement Procedures Act) class actions, we provide here the text of the statute. Congress defined the relevant terms used in the Real Estate Settlement Procedures Act in 12 U.S.C. § 2602, which provides:

§ 2602. Definitions

For purposes of this chapter–

(1) the term “federally related mortgage loan” includes any loan (other than temporary financing such as a construction loan) which–

(A) is secured by a first or subordinate lien on residential real property (including individual units of condominiums and cooperatives) designed principally for the occupancy of from one to four families, including any such secured loan, the proceeds of which are used to prepay or pay off an existing loan secured by the same property; and

(B)(i) is made in whole or in part by any lender the deposits or accounts of which are insured by any agency of the Federal Government, or is made in whole or in part by any lender which is regulated by any agency of the Federal Government, or

(ii) is made in whole or in part, or insured, guaranteed, supplemented, or assisted in any way, by the Secretary or any other officer or agency of the Federal Government or under or in connection with a housing or urban development program administered by the Secretary or a housing or related program administered by any other such officer or agency; or

(iii) is intended to be sold by the originating lender to the Federal National Mortgage Association, the Government National Mortgage Association, the Federal Home Loan Mortgage Corporation, or a financial institution from which it is to be purchased by the Federal Home Loan Mortgage Corporation; or

(iv) is made in whole or in part by any “creditor”, as defined in section 1602(f) of Title 15, who makes or invests in residential real estate loans aggregating more than $1,000,000 per year, except that for the purpose of this chapter, the term “creditor” does not include any agency or instrumentality of any State;

Statutes & Rules Uncategorized

DaimlerChrysler Settles Nationwide Class Action Over Allegedly Defective Brakes for $14.5 Million

DaimlerChrysler ushered in the new year by settling for $14.5 million a class action filed in New Jersey state court. The settlement of the nationwide class action reportedly won court approval on December 26, 2006, bringing to a close Lubitz v. DaimlerChrysler Corp. The class action settlement covers the more than one million people who bought or leased a Jeep Grand Cherokee between 1999 and 2004. The class action complaint alleged that the brakes on Jeep Grand Cherokees were defective, causing them to sustain uneven wear and occasionally fail.

Class Actions In The News Uncategorized

12 U.S.C. § 2601–Congressional Findings And Purpose For The Real Estate Settlement Procedures Act (RESPA)

As a resource for the class action defense lawyer who defends against RESPA (Real Estate Settlement Procedures Act) class actions, we provide the text of RESPA. Congress set forth its findings and purpose for RESPA in 12 U.S.C. § 2601, which provides as follows:

§ 2601. Congressional findings and purpose

(a) The Congress finds that significant reforms in the real estate settlement process are needed to insure that consumers throughout the Nation are provided with greater and more timely information on the nature and costs of the settlement process and are protected from unnecessarily high settlement charges caused by certain abusive practices that have developed in some areas of the country. The Congress also finds that it has been over two years since the Secretary of Housing and Urban Development and the Administrator of Veterans’ Affairs submitted their joint report to the Congress on “Mortgage Settlement Costs” and that the time has come for the recommendations for Federal legislative action made in that report to be implemented.

Statutes & Rules Uncategorized

TiVo Defense Attorneys Reach Tentative Settlement Agreement Of Class Action And California State Court Issues Orders Permitting Proposed Settlement To Move Forward

On December 5, 2006, a California state court provisionally certified a nationwide class action against TiVo for purposes of settlement in Nolz v. TiVo, Inc., San Francisco Superior Court Case No. CGC-05-447918. Members of the class action consist of all persons “who purchased or held a Gift Subscription for TiVo services,” Order, at 2; the class action complaint alleged, in part, that TiVo sold gift subscriptions that contained expiration dates, in violation of California state law.

Class Actions In The News Uncategorized

Main Drug v. Aetna-Class Action Defense Cases: Alabama Federal Court Holds That Burden Of Proving Federal Court Jurisdiction Under Class Action Fairness Act (CAFA) Remains With Defense And That Burden Was Met

CAFA (Class Action Fairness Act) did not Shift Burden of Proving Federal Jurisdiction to Plaintiff but Defense Established Requisite Amount In Controversy so Alabama Federal Court Denies Motion to Remand Class Action to State Court Plaintiff, a pharmacy, filed a putative class action against insurance/pharmacy benefit management companies for misrepresentation, breach of contract, unjust enrichment and conspiracy, alleging that defendants failed to reimburse pharmacies “according to an agreed-upon formula for brand name prescriptions dispensed to Defendants’ insureds.

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

Blockbuster v. Galeno-Class Action Defense Cases: Defense Bears Burden Of Establishing Federal Court Jurisdiction Under Class Action Fairness Act (CAFA) Second Circuit Holds

Second Circuit Holds that CAFA (Class Action Fairness Act) did not Shift Burden of Proving Federal Jurisdiction to Plaintiff and Remands Class Action Case to District Court for Further Proceedings

Plaintiffs filed a putative class action against Blockbuster in New York state court challenging the company’s “No Late Fee” program as a deceptive business practice on the grounds that Blockbuster did not adequately inform customers that in order to avoid the late fees the transaction was converted from a video rental to a video sale. Blockbuster, Inc. v. Galeno, 472 F.3d 53, 2006 WL 3775326, *1 (2d Cir. 2006). Defense attorneys removed the action to federal court asserting both general diversity jurisdiction under 28 U.S.C. § 1332(a) and federal court jurisdiction under the Class Action Fairness Act of 2005 (CAFA), 28 U.S.C. § 1332(d). Id., at *2. Plaintiffs moved to remand the class action to state court, arguing that the defense had not established the requisite $5 million amount-in-controversy, id.; defense attorneys countered that “CAFA had reversed the traditional rule that the party seeking removal to federal court bears the burden of establishing federal jurisdiction,” id. The district court agreed with the defense, but its order denying the motion to remand the class action stated not only that “the defendant has met its burden” but also that “the plaintiff has not met [its] burden,” id. The Second Circuit held that the district court should not have assigned any burden to the plaintiff, and remanded the action for further proceedings in light of the ambiguity in the lower court’s order.

After summarizing CAFA and the appropriate standard of review of an order denying a motion to remand, Galeno, at *3, the Circuit Court addressed whether CAFA “shifted the burden of proof to the remand-requesting plaintiff to show that federal jurisdiction does not exist,” id., at *4. The Second Circuit’s analysis led it to the same conclusions reached by “[e]very other circuit court that has considered this issue,” id., at *5 – viz., that CAFA had not affected the defense burden of establishing federal court removal jurisdiction, id.

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