Class Action Defense Cases-In re Series 7: Judicial Panel On Multidistrict Litigation (MDL) Grants Defense and Plaintiff Motions To Centralize Class Action Litigation In The District of the District of Columbia

Judicial Panel Agrees With Defense and Plaintiff Lawyers that Class Action Lawsuits Warranted Centralization for Pretrial Coordination Pursuant to 28 U.S.C. § 1407 Nine class action lawsuits were filed across the United States against the National Association of Securities Dealers (NASD) and Electronic Data Systems Corp., among others, alleging “breach of contract, negligence, negligent misrepresentation, defamation, and tortious interference with contract and/or business relationships” arising out of “errors in scoring the Series 7 Broker Qualification Exam, a computerized qualifying test required for anyone employed by a securities firm that wishes to register individuals as general securities representatives dealing with the public.

Class Action Court Decisions Multidistrict Litigation Uncategorized

Alexander v. JBC-Class Action Defense Cases: Montana Court Rejects Defense Objections To Certification Of Class Action Alleging Violations Of Federal Fair Debt Collection Practices Act (FDCPA)

Class Action Alleging FDCPA (Fair Debt Collection Practices Act) Violations Based on Form Letters Sent to Debtors Warranted Class Certification Montana Federal Court Holds, Rejecting Defense Argument that Plaintiff’s Statute of Limitations Defense to Debt Collection Defeated Predominance Requirement of Rule 23(b)(3)

Plaintiff filed a putative class action against a debt collector seeking to collect on dishonored checks for alleged violations of the Fair Debt Collection Practices Act (FDCPA) based on letters sent to debtors that demanded fees not authorized by state or federal law. Alexander v. JBC Legal Group, P.C., 237 F.R.D. 628, 629 (D. Mont. 2006). Plaintiff’s lawyer moved for certification of the class action; defense attorneys opposed the motion arguing that the numerosity requirement of Rule 23(a) is not met and that plaintiff’s statute of limitations defense defeats certification under Rule 23(b)(3).

In 2004, defendant JBC Legal Group sent a letter to plaintiff seeking to collect $6.07 for a dishonored check that had been written more then 12 years earlier. Alexander, at 629. “The letter demanded that Alexander remit to Defendants $46.07 and stated that he would be subject to a penalty of triple the amount of the check, or $100.00, whichever was greater, if he failed to make payment within thirty days.” Id. A month later, defendant sent plaintiff a letter demanding $146.07. Id. Several months later, defendant sent plaintiff another letter demanding $146.07. Id.

Class Action Court Decisions FDCPA Class Actions Uncategorized

Class Action Defense Cases-In re Initial Public Offering: Significant Defense Victory As Second Circuit Holds Federal Court Erred In Certifying Securities Class Action Against Wall Street Banks Arising Out Of Internet IPOs

Second Circuit Clarifies Standard of Proof for Certification of Class Action Under Rule 23 and Holds that IPOs are not “Efficient Markets” in Handing Defense Victory on Appeal

Beginning in 2001, hundreds of class action lawsuits were filed against Wall Street banks alleging violations of federal securities laws in connection with the initial public offerings of certain Internet companies. In re Initial Public Offering Securities Litig., 471 F.3d 24, 2006 WL 3499937, *1 (2nd Cir. December 5, 2006). Following the consolidation of 310 of the class action lawsuits, plaintiffs’ lawyers moved for class certification in six “focus cases.” Id., at *3. Defense attorneys objected to certification of a class action arguing primarily that individual issues predominate over common ones; the district court granted the motion finding that plaintiffs had made “some showing” of the elements required under Rule 23 to warrant certification, id., at *3-*5. The Second Circuit reversed, agreeing with defense attorneys that plaintiffs had not satisfied the requirements of Rule 23 and further that they could not satisfy those requirements.

The class action complaints alleged that underwriters, issuers and individual officers of the issuing companies defrauded investors through “tie-in arrangements, undisclosed compensation, and analyst manipulation” in connection with the IPOs of certain Internet companies, id., at *2. In certifying a class action, the district court perceived conflicting guidance in Supreme Court authority concerning the proper standard of proof required to warrant class action certification. Specifically, Supreme Court authority requires a “rigorous analysis” that may require the court to “probe behind the pleadings,” but a court may not “conduct a preliminary inquiry into the merits of a suit.” Id., at *4 (citations omitted). The district court rejected Fourth Circuit and Seventh Circuit authority requiring plaintiffs to “establish the requirements of Rule 23 by a preponderance of the evidence, even if resolving those issues requires a ‘preliminary inquiry into the merits . . ., or ‘overlap with issues on the merits.'” Id. (citations omitted). The court instead crafted an amorphous “some showing” test and, applying that new standard, concluded that plaintiffs had met their burden of proof. Id., at *4-*5.

Certification of Class Actions Class Action Court Decisions PSLRA/SLUSA Class Actions Uncategorized

Morales-Arcadio v. Shannon Produce Class Action Defense Case: Defense Rule 68 Offer Of Judgment Served Prior To Opt-In Deadline For Class Action Under Fair Labor Standards Act (FLSA) Is Invalid Georgia Federal Court Holds

Georgia Federal District Court Holds that Offers of Judgment in FLSA (Fair Labor Standards Act) Class Action Cannot be made Prior to Expiration of Opt-In Period Because Rule 68 Requires that Offer be made on Adverse Parties and Class Members are not “Fully Identifiable” Until Opt-In Period Ends

Plaintiffs filed a putative class action on behalf of migrant farm workers against Shannon Produce Farms in July 2005 alleging violations of the Fair Labor Standards Act (FLSA), and in November 2005 they filed a motion for certification of a FLSA collective action pursuant to 29 U.S.C. § 216(b), which the district court granted. Morales-Arcadio v. Shannon Produce Farms, 237 F.R.D 700, 701 (S.D. Ga. 2006). Prior to the “opt-in” deadline for class members to join the class action, defense attorneys served an offer of judgment pursuant to Rule 68 of the Federal Rules of Civil Procedure. Id. Plaintiffs’ lawyer moved to invalidate the offer of judgment. The district court summarized the competing arguments at page 701 as follows:

Plaintiffs contend that defendants’ offer of judgment is improper since defendants served it during the time period provided by the Court for other similarly-situated plaintiffs to join the instant FLSA collective action. . . . Plaintiffs argue, inter alia, that the offer short-circuits the collective action process, has no legal effect since it purports to extend to workers who are not parties to the action, and moots the certified collective action and court-authorized notice. . . . Defendants have filed an opposition to the motion contending that plaintiffs’ motion is premature since a motion to strike an offer of judgment is only proper at the conclusion of a case. . . . Defendants also contend that their offer of judgment is proper since it specifically contemplates and provides a recovery for additional opt-in plaintiffs who join the action by the opt-in deadline. . . . (Footnote omitted)

Class Action Court Decisions Employment Law Class Actions Uncategorized

Cigna Defense Against Shareholder Class Action Reportedly Will End With $93 Million Settlement

A proposed settlement has been reached in a class action lawsuit against Cigna Corp., filed in 2002 and scheduled to go to trial in March 2007 in the United States District Court in Philadelphia. The lawsuit arose from a computer problem that allegedly cost the company one-third of its customers as a result of major problems in the handling of insurance claims. Cigna allegedly hid the problems from investors, and the stock plunged when word of the computer problems hit the street.

Class Actions In The News Uncategorized

Indicted Class Action Plaintiff Law Firm Milberg Weiss Loses Named Partner Schulman To “New Ventures” And To Preparation Of Criminal Defense

After 20 Years of Class Action Securities Litigation at Milberg Weiss, Indicted Named Partner Steve Schulman Resigns to Focus on Defense of Criminal Charges Julie Creswell of the New York Times reported yesterday that class action plaintiff law firm Milberg Weiss Bershad & Schulman suffered a devastating blow last Friday: Steven G. Schulman, indicted in May 2006 for his part in the alleged payment of $11 million to three individuals who served as plaintiffs in more than 150 lawsuits, resigned from the law firm after 20 years of class action securities litigation.

Class Actions In The News Uncategorized

15 U.S.C. § 77w and 77x–Unlawful Representations And Penalties Under The Securities Act Of 1933

As a resource for the class action defense lawyer who defends against securities class actions, we provide the text of the Securities Act of 1933. Congress provided for unlawful representations and for penalties under the Act in 15 U.S.C. § 77w and § 77x, respectively, which provide: § 77w. Unlawful representations Neither the fact that the registration statement for a security has been filed or is in effect nor the fact that a stop order is not in effect with respect thereto shall be deemed a finding by the Commission that the registration statement is true and accurate on its face or that it does not contain an untrue statement of fact or omit to state a material fact, or be held to mean that the Commission has in any way passed upon the merits of, or given approval to, such security.

Statutes & Rules Uncategorized

15 U.S.C. § 77u and 77v–Hearings By Commission And Jurisdiction Of Offenses And Suits Under The Securities Act Of 1933

As a resource for the class action defense lawyer who defends against securities class actions, we provide the text of the Securities Act of 1933. Congress provided that all hearings by the Commission shall be public in 15 U.S.C. § 77u, and provided for jurisdiction over offenses and suits in 15 U.S.C. § 77v. Those statutes provide in full:

§ 77u. Hearings by Commission

All hearings shall be public and may be held before the Commission or an officer or officers of the Commission designated by it, and appropriate records thereof shall be kept.

§ 77v. Jurisdiction of offenses and suits

(a) Federal and State courts; venue; service of process; review; removal; costs

The district courts of the United States and the United States courts of any Territory shall have jurisdiction of offenses and violations under this subchapter and under the rules and regulations promulgated by the Commission in respect thereto, and, concurrent with State and Territorial courts, except as provided in section 77p of this title with respect to covered class actions, of all suits in equity and actions at law brought to enforce any liability or duty created by this subchapter. Any such suit or action may be brought in the district wherein the defendant is found or is an inhabitant or transacts business, or in the district where the offer or sale took place, if the defendant participated therein, and process in such cases may be served in any other district of which the defendant is an inhabitant or wherever the defendant may be found. Judgments and decrees so rendered shall be subject to review as provided in sections 1254, 1291, 1292, and 1294 of Title 28. Except as provided in section 77p(c) of this title, no case arising under this subchapter and brought in any State court of competent jurisdiction shall be removed to any court of the United States. No costs shall be assessed for or against the Commission in any proceeding under this subchapter brought by or against it in the Supreme Court or such other courts.

Statutes & Rules Uncategorized

United States Supreme Court Grants Defense Petitions For Writs Of Certiorari In Antitrust Class Action And Sherman Act Cases

Supreme Court to Address Investment Bank and Institutional Investor Liability in Underwriting IPOs, and Per Se Rule that Resale Price Maintenance Violates Sherman Act Linda Greenhouse of the New York Times reports that the United States Supreme Court had accepted defense petitions for writs of certiorari in “two important antitrust cases” and that the opinions should clarify areas of law “that have increasingly become unsettled.” One of the antitrust cases, Credit Suisse First Boston v.

Class Actions In The News Uncategorized

Class Action Defense Lawyers Again Confront More Labor Law Claims In California Weekly Class Action Filings But Significant Number Of Antitrust And Unfair Business Practice Class Action Lawsuits Also Filed

To allow class action defense lawyers anticipate claims against which they may have to defend, we provide weekly, unofficial summaries of the 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 from December 1 – December 7, 2006. Employment law class action cases yet again hold the top spot on the list.

Class Actions In The News Uncategorized