Employment Class Action Filings Again Top List But Defense Attorneys Also Gear Up For New Public Accommodation/ADA Class Action Lawsuits Which Ran A Close Second In Weekly Class Action Filings In California

Class action defense attorneys in California will continue to confront more labor law class action cases than any other category, but public accommodation/ADA (Americans with Disabilities Act) cases made a strong showing this past week. 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

15 U.S.C. § 77m-77o–Limitation Of Actions, Contrary Stipulations And Liability Of Controlling Persons 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. In three separate and brief sections, Congress set forth the statutory provisions concerning limitations on actions under the Securities Act of 1933, 15 U.S.C. § 77m, and the liability of controlling persons under the Act, 15 U.S.C. § 77o, and provided that the statutory provisions of the Act – as well as the rules and regulations of the Commission in furtherance of the Act – may not be waived, 15 U.S.C. § 77n. These three sections state in full:

§ 77m. Limitation of actions

No action shall be maintained to enforce any liability created under section 77k or 77l(a)(2) of this title unless brought within one year after the discovery of the untrue statement or the omission, or after such discovery should have been made by the exercise of reasonable diligence, or, if the action is to enforce a liability created under section 77l(a)(1) of this title, unless brought within one year after the violation upon which it is based. In no event shall any such action be brought to enforce a liability created under section 77k or 77l(a)(1) of this title more than three years after the security was bona fide offered to the public, or under section 77l(a)(2) of this title more than three years after the sale.

Statutes & Rules Uncategorized

15 U.S.C. § 77l–Civil Liabilities Arising In Connection With Prospectuses And Communications 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 civil liability in connection with prospectuses and communications in 15 U.S.C. § 77l, which provides:

§ 77l. Civil liabilities arising in connection with prospectuses and communications

(a) In general

Any person who–

(1) offers or sells a security in violation of section 77e of this title, or

(2) offers or sells a security (whether or not exempted by the provisions of section 77c of this title, other than paragraphs (2) and (14) of subsection (a) of said section), by the use of any means or instruments of transportation or communication in interstate commerce or of the mails, by means of a prospectus or oral communication, which includes an untrue statement of a material fact or omits to state a material fact necessary in order to make the statements, in the light of the circumstances under which they were made, not misleading (the purchaser not knowing of such untruth or omission), and who shall not sustain the burden of proof that he did not know, and in the exercise of reasonable care could not have known, of such untruth or omission,

shall be liable, subject to subsection (b) of this section, to the person purchasing such security from him, who may sue either at law or in equity in any court of competent jurisdiction, to recover the consideration paid for such security with interest thereon, less the amount of any income received thereon, upon the tender of such security, or for damages if he no longer owns the security.

Statutes & Rules Uncategorized

Class Action Defense Cases-In re Vioxx Products: Federal Court Grants Defense Motion To Dismiss Class Action Claims On Behalf Of Residents Of Italy And France On Grounds Of Forum Non Conveniens

Louisiana Federal Court Holds Concurs with Defense that Class Action Claims Against Vioxx Manufacturer on Behalf of Foreign Citizens may be Adjudicated Outside the United States

After Merck removed Vioxx from the market in September 2004, thousands of lawsuits were filed in state and federal courts, ultimately leading to centralization by order of the Judicial Panel on Multidistrict Litigation to the Eastern District of Louisiana. These lawsuits included not only class action filings, but 11 lawsuits on behalf of residents of other countries, including Italy and France. In re Vioxx Prods. Liab. Litig., ___ F.Supp.2d ___, 2006 WL 2504353, *1-*2 (E.D.La. August 30, 2006). Defense attorneys moved to dismiss the foreign class actions on grounds of _forum non conveniens_. _Id._, at *2. The parties stipulated that the federal court should limit its analysis to Italian and French class actions, and the district court granted the defense motion and dismissed the class action complaints. _Id._,

In support of the motion to dismiss, defense attorneys argued that Vioxx had been regulated extensively in Italy and France, and that regulators in both countries “required that certain warnings and packaging information be included.” In re Vioxx, at *2. __Also, local physicians had prescribed Vioxx to the Italian and French citizens allegedly injured, and the product had been purchased and used, and the putative class members treated for any resulting injuries, in those countries. Id. Plaintiffs countered that Merck “designed, tested, and manufactured” Vioxx in the United States, and orchestrated worldwide distribution from within the United States. Id., at *3.

Class Action Court Decisions Uncategorized

Class Action Defense Issues-Merck Defense Of Individual Federal Vioxx Action Improves Likelihood That Class Action Status Will Be Denied

Latest Defense Verdict Weighs Heavily Against Class Action Treatment of Vioxx Claims The verdict is in on Merck’s eleventh Vioxx trial, and a Louisiana federal jury agreed with defense attorneys that a Utah bank manager who suffered a heart attack after using Vioxx for almost a year had not established Vioxx caused his injury. Defense attorneys argued that the manager had used the drug for less than one year and had stopped using the drug four days before he suffered his heart attack.

Class Actions In The News Uncategorized

Howell v. State Farm-Class Action Defense Cases: Maryland Federal Court Grants Defense Motion To Dismiss Class Action Claims For Breach of Fiduciary Duty And Breach of Implied Covenant Of Good Faith And Fair Dealing As Not Cognizable Under Federal Law

Federal Common Law Exclusively Governs Interpretation of Insurance Policies Issued Under National Flood Insurance Program (NFIP) and Federal Law does not Recognize Breach of Fiduciary Duty or Breach of Implied Covenant Claims Thus Supporting Defense Motion to Dismiss Those Claims for Relief in Class Action Complaint Homeowners filed a putative class action in Maryland federal court against various insurance companies for breach of contract, breach of the implied covenant of good faith and fair dealing, and breach of fiduciary duty arising out of the issuance of flood insurance under the National Flood Insurance Program (NFIP), administered by the Federal Emergency Management Agency (FEMA).

Class Action Court Decisions Uncategorized

Ruiz v. Bally-Class Action Defense Cases: Massachusetts Federal Court Denies Defense Motion To Dismiss Class Action For Lack Of Jurisdiction But Grants Defense Motion To Dismiss Class Action For Failure To State A Claim

By Holding Itself Out as Operating in Massachusetts and by Drafting Membership Contract in Dispute Bally Subjected Itself to the Jurisdiction of the Massachusetts Federal Court, but Membership Contract was not Unlawful Thus Warranting Dismissal of Class Action Complaint

Plaintiff filed a putative class action in Massachusetts state court against Bally Total Fitness and Holiday Universal (a subsidiary of Bally) alleging common law and various consumer protection law violations arising out of a health club membership contract she signed that required payment of a $1565 membership fee plus dues of $8 per month. The membership fee could be financed at 14.75% interest for 36 months. If a customer canceled her membership within that 36-month period, she need no longer pay the monthly dues but she remained liable for the entire membership fee. The Contract also contained a provision limiting the liability of the health club “for the loss or theft of, or damage to, the personal property of members or guests.” Ruiz v. Bally Total Fitness Holding Corp., 447 F.Supp.2d 23, 25-26 (D. Mass. 2006). After defense attorneys removed the case to federal court on grounds of diversity jurisdiction, the defense moved to dismiss the class action for failure to state a claim, and argued also that the court lacked personal jurisdiction over Bally. Id., at 25. The district court held that it had personal jurisdiction over Bally, but granted the defense motion to dismiss the class action for failure to state a claim.

With respect to the personal jurisdiction claim, the federal court recognized that jurisdiction over a subsidiary does not establish jurisdiction over the parent company. The district court held at page 27, “In consideration of 1) the requirement that [plaintiff’s] evidence of jurisdiction be accepted at face value, 2) the fact that Bally has held itself out as a company operating in Massachusetts and 3) the fact that the dispute in this case concerns a form membership contract that, in all likelihood, was developed by the parent corporation and not Holiday, the Court concludes that plaintiff has adequately demonstrated a basis for this Court’s exercise of personal jurisdiction over Bally.”

Class Action Court Decisions Uncategorized

More Fallout From Indictment Of Class Action Firm Milberg Weiss As Court Delays Approval Of Class Action Settlement Pending Review Of Class Action Plaintiffs’ Testimony

Ameet Sachdev of the Chicago Tribune reports that Cook County Circuit Judge Nancy Arnold has delayed approval of a three-year-old stockholders class action against Boeing because of the federal court indictment handed down against lead plaintiffs’ counsel Milberg Weiss Bershad & Schulman. After the settlement had been submitted for her approval, Judge Arnold required that the six named plaintiffs appear in court and testify as to how they became plaintiffs in the case, including when the became Boeing stockholders and the amount of stock that they owned.

Class Actions In The News Uncategorized

Moniz v. Bayer-Class Action Defense Cases: Defense Removal Of Class Action To Federal Court Proper Under CAFA (Class Action Fairness Act of 2005) Because Of Post-CAFA Amendment To Class Action Complaint Massachusetts Federal Court Holds

Massachusetts Federal Court Agrees With Defense that Post-CAFA Amendment of Class Action Complaint Rendered Suit Removable But Rejects Defense Claim that CAFA Shifts Burden of Proof to Plaintiff to Prove Remand is Warranted

Plaintiff filed a putative class action in Massachusetts state court against Bayer, Crompton Corporation and Uniroyal Chemical on February 10, 2005, alleging a conspiracy to fix prices on certain rubber and urethane products. Plaintiff amended the complaint in May 2005, and defense attorneys consented to the filing of a second amended class action complaint on February 6, 2006. Defense attorneys then removed the action to federal court on February 10, 2006, under the Class Action Fairness Act of 2005 (CAFA). Moniz v. Bayer A.G., 447 F.Supp.2d 31, 32-33 (D.Mass. 2006). Plaintiff filed a motion to remand the action to state court.

CAFA became effective on February 18, 2005. As a preliminarily matter, the federal court rejected the defense claim that CAFA shifted the burden of proof to the plaintiff to demonstrate that remand is warranted. Moniz, at 33-34. As the district court explained at page 34, “the clear majority of courts that have addressed the issue have held that, even where CAFA applies, the burden of proof on a motion to remand remains with the removing party because the text of the statute says nothing about changing that long-standing rule.”

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

FLSA Class Action Defense Cases-Choimbol v. Fairfield Resorts: Virginia Federal Court Conditionally Certifies Class Action Under Fair Labor Standards Act (FLSA) Holding Only “Minimal Evidence” Required To Support Class Action Treatment

FLSA Class Action Certification within Court’s Discretion Even if Supported by only “Minimal Evidence” Virginia Federal Court Holds and Conditionally Certifies Class Action Subject to Defense Motion for Decertification Following Discovery

Plaintiffs filed a class action against their employers (see Note) alleging failure to pay overtime in violation of the federal Fair Labor Standards Act (FLSA). Choimbol v. Fairfield Resorts, Inc., 475 F.Supp.2d 557, 558 (E.D. Va. 2006). Plaintiffs moved the court to certify the lawsuit as a class action; defense attorneys objected on the grounds that plaintiffs were not “similarly situated” to the class and had introduced no evidence that defendant Fairfield Resorts was a “joint employer” of plaintiffs or members of the putative class. The district court rejected defense arguments and conditionally certified a class action, holding that it had authority to grant the motion for class action treatment based on “minimal evidence” subject to a subsequent motion by defense attorneys for decertification of the class action.

The facts underlying the class action complaint are rather complicated but the salient facts are these, found at pages 559 through 561 of the district court’s opinion: Fairfield Resorts operates timeshares including Kingsgate, Governor’s Green and Patriot Place timeshare locations in Virginia. Fairfield contracted with Sandulyak and Nunnery to hire immigrants to provide laundry, housekeeping and grounds maintenance services at certain properties in Virginia. Sandulyak (doing business as Carolina Janitorial) provides regional immigrant labor, and is “commonly owned, staffed and operated” by national immigrant providers Ambassador Hospitality and Proline Management. Fairfield’s contract with Ambassador provided that the immigrant laborers would be employees and Carolina Janitorial and that Fairfield had no right to supervise, direct or control the laborers. In practice, however, Sandulyak failed to supervise the laborers, Carolina Janitorial did not have a manager at the properties, and Sandulyak only visited the properties once every 1-3 months. Rather, for more than a year responsibility for supervision and day-to-day control over the laborers fell to Nunnery, who had negotiated the agreement with Ambassador “in the name and on behalf of Fairfield.”

Certification of Class Actions Class Action Court Decisions Employment Law Class Actions Uncategorized