Class Action Defense Cases—In re Dep’t of Veteran Affairs: Judicial Panel On Multidistrict Litigation (MDL) Grants Defense Motion To Centralize Class Action Litigation In The District of the District of Columbia

Judicial Panel Rejects Opposition to Defense Request for Pretrial Coordination Pursuant to 28 U.S.C. § 1407 and Grants Defense Motion for Centralization of Three Class Action Lawsuits On May 3, 2006, a laptop computer and external hard drive was stolen from the home of an employee of the Department of Veterans Affairs, resulting in the loss of “the names, dates of birth, and social security numbers of approximately 26 million veterans and active duty military personnel.

Class Action Court Decisions Multidistrict Litigation Uncategorized

Class Action Defense Cases—In re Novartis: Judicial Panel On Multidistrict Litigation (MDL) Grants Defense Motion To Centralize Two Employment Law Class Action Lawsuits In The Southern District Of New York

Judicial Panel Grants Unopposed Defense Request for Pretrial Coordination of Two Class Action Complaints Pursuant to 28 U.S.C. § 1407

Plaintiffs filed two class action lawsuits in federal court against Novartis Pharmaceuticals Corp. (NPC), Novartis Corp., Novartis Finance Corp., and Novartis Services, Inc., alleging violations of state and federal labor laws concerning compensation for overtime; specifically, the complaints alleged that defendants had misclassified NPC sales representatives as exempt from overtime pay. In re Novartis Wage & Hour Litig., 460 F.Supp.2d 1382 (Jud.Pan.Mult.Lit. 2006). Pursuant to 28 U.S.C. § 1407, defense attorneys moved the Judicial Panel on Multidistrict Litigation (MDL) to centralize the lawsuits for pretrial purposes in the Southern District of New York, where one of the lawsuits was pending. Id. The motion was unopposed. The Panel agreed with defense attorneys that centralization was warranted even though only two class action lawsuits had been filed, and agreed further – in accord with the agreement of the parties – that the Southern District of New York was the appropriate transferee court. Id.

NOTE: This transfer order illustrates (1) that Section 1407 does not require a minimum number of lawsuits be on file in order to warrant transfer, and (2) that the Judicial Panel independently determines whether centralization is warranted and, if so, the appropriate transferee court. Despite the agreement of the parties, the Judicial Panel explained that it selected the Southern District of New York based on its independent evaluation:

Class Action Court Decisions Multidistrict Litigation Uncategorized

Employment Law Class Action Lawsuits Again Dominate Claims Facing Class Action Defense Attorneys In California

Class action defense lawyers continue to face a greater number of labor law class action filings in California than any other category. As frequent visitors know, 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 November 3 – November 9, with employment law class action cases retaining their firm grip on the top spot on the class action filings list.

Class Actions In The News Uncategorized

Defense Expected To Pay $30 Million To Settle Class Action Arising Out Of Martha Stewart Sale Of ImClone Stock In 2001

Martha Stewart and Martha Stewart Living Omnimedia Defense Attorneys Report $30 Million to Settle Class Action Several news reports cite reliable sources that the class action against Martha Stewart Living Omnimedia and Martha Stewart has been settled pending court approval. Several lawsuits were filed apparently claiming that Stewart’s misrepresentations concerning her sale of ImClone stock artificially inflated the stock price of Martha Stewart Living. The separate lawsuits eventually were consolidated. News reports place the total settlement at $30 million, of which Martha Stewart personally will pay about $5 million.

Class Actions In The News Uncategorized

15 U.S.C. § 77k–Civil Liabilities On Account Of False Registration Statement 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 liabilities arising out of false registration statements in 15 U.S.C. § 77k as follows:

§ 77k. Civil liabilities on account of false registration statement

(a) Persons possessing cause of action; persons liable

In case any part of the registration statement, when such part became effective, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading, any person acquiring such security (unless it is proved that at the time of such acquisition he knew of such untruth or omission) may, either at law or in equity, in any court of competent jurisdiction, sue–

(1) every person who signed the registration statement;

(2) every person who was a director of (or person performing similar functions) or partner in the issuer at the time of the filing of the part of the registration statement with respect to which his liability is asserted;

(3) every person who, with his consent, is named in the registration statement as being or about to become a director, person performing similar functions, or partner;

(4) every accountant, engineer, or appraiser, or any person whose profession gives authority to a statement made by him, who has with his consent been named as having prepared or certified any part of the registration statement, or as having prepared or certified any report or valuation which is used in connection with the registration statement, with respect to the statement in such registration statement, report, or valuation, which purports to have been prepared or certified by him;

(5) every underwriter with respect to such security.

If such person acquired the security after the issuer has made generally available to its security holders an earning statement covering a period of at least twelve months beginning after the effective date of the registration statement, then the right of recovery under this subsection shall be conditioned on proof that such person acquired the security relying upon such untrue statement in the registration statement or relying upon the registration statement and not knowing of such omission, but such reliance may be established without proof of the reading of the registration statement by such person.

Statutes & Rules Uncategorized

15 U.S.C. § 77j–Information Required In Prospectus 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 described the information that must be contained in a prospectus in 15 U.S.C. § 77j, which provides:

§ 77j. Information required in prospectus

(a) Information in registration statement; documents not required

Except to the extent otherwise permitted or required pursuant to this subsection or subsections (c), (d), or (e) of this section–

(1) a prospectus relating to a security other than a security issued by a foreign government or political subdivision thereof, shall contain the information contained in the registration statement, but it need not include the documents referred to in paragraphs (28) to (32), inclusive, of schedule A of section 77aa of this title;

(2) a prospectus relating to a security issued by a foreign government or political subdivision thereof shall contain the information contained in the registration statement, but it need not include the documents referred to in paragraphs (13) and (14) of schedule B of section 77aa of this title;

(3) notwithstanding the provisions of paragraphs (1) and (2) of this subsection when a prospectus is used more than nine months after the effective date of the registration statement, the information contained therein shall be as of a date not more than sixteen months prior to such use, so far as such information is known to the user of such prospectus or can be furnished by such user without unreasonable effort or expense;

(4) there may be omitted from any prospectus any of the information required under this subsection which the Commission may by rules or regulations designate as not being necessary or appropriate in the public interest or for the protection of investors.

Statutes & Rules Uncategorized

Class Action Defense Cases-In re Edward D. Jones: Judicial Panel On Multidistrict Litigation (MDL) Denies Defense And Plaintiff Motion To Coordinate Class Action Employment Law Lawsuits

Multidistrict Litigation Judicial Panel Concludes Centralization Under Section 1407 not Warranted Three separate class action lawsuits against Edward D. Jones & Co. seeking overtime pay. The lawsuits were filed in the Central and Northern Districts of California, and the Western District of Pennsylvania. Two motions were filed with the Judicial Panel on Multidistrict Litigation (MDL) seeking to coordinate the litigation for pretrial purposes – one by the Pennsylvania plaintiff, and one by the common defendant, Edward Jones.

Class Action Court Decisions Multidistrict Litigation Uncategorized

Klimas v. Comcast Cable-Class Action Defense Cases: District Court Properly Granted Defense Motion To Dismiss Class Action Under Cable Communications Policy Act Because Act Does Not Apply To Internet Services Sixth Circuit Holds

Sixth Circuit Holds that Putative Class Action Against Cable Company for Alleged Violations of Federal Cable Communications Policy Act Arising Out of Internet Service Provided to Plaintiff Properly Dismissed but not for Reasons Expressed by District Court

Plaintiff filed a putative class action against his internet provider, Comcast, alleging violations of the subscriber privacy protection provisions of the federal Cable Communications Policy Act of 1984 (CCPA), 47 U.S.C. §§ 521-561. Klimas v. Comcast Cable Communications, Inc., 465 F.3d 271, 273 (6th Cir. 2006). Defense attorneys moved to dismiss the class action on the ground that plaintiff “lacked standing to contest alleged violations of the privacy provisions in § 551(b) by [Comcast] in the operation of its broadband internet services.” Id. The district court granted the motion on grounds rejected by the Sixth Circuit; however, the Circuit Court affirmed the judgment of dismissal based on the plain language of the statute, which “by its terms, applies only to a ‘cable system'” or to acts “in the provision of cable service,” id.

Plaintiff contracted for internet service with Comcast, which launched its internet service around January 1, 2002. Six weeks after its launch, Comcast announced that it had “stored temporarily” IP (internet protocol) addresses and URL (universal resource locators) information, but stated that “[t]his information has never been connected to individual subscribers and has been purged automatically to protect subscriber privacy” and that the practice was being terminated “immediately.” Klimas, at 273-74. Plaintiff promptly filed a putative class action alleging that Comcast violated § 551(b) by “collecting personally identifiable information concerning subscribers” and violated § 551(a) by failing to give written notice of the nature of personally identifiable information Comcast collected with respect to its customers and the nature of it use of that information. Id., at 274.

Class Action Court Decisions Uncategorized

NovaStar Class Action Defense Case-Pierce v. NovaStar Mortgage: Washington Federal Court Certifies RESPA/TILA Class Action Over Defense Objection That YSP (Yield Spread Premium) Need Not Be Disclosed In Writing

Lawsuit Alleging Violations of Federal Real Estate Settlement Procedures Act (RESPA) and Truth in Lending Act (TILA) Based on Failure to Provide Written Disclosure of YSPs (Yield Spread Premiums) Allowed to Proceed as Class Action

Plaintiffs filed a class action against NovaStar Mortgage alleging violations of Washington’s Consumer Protection Act (CPA) based on the lender’s failure to disclose in writing the payment of yield spread premiums (YSPs) in violation of the federal Real Estate Settlement Procedures Act (RESPA) and Truth in Lending Act (TILA), and Washington’s Consumer Loan Act (CLA). Pierce v. NovaStar Mortgage, Inc., ___ F.Supp.2d ___ (W.D. Wash. October 31, 2006) [Slip Opn., at 1-2]. The district court denied plaintiffs’ first motion to certify a class, agreeing with defense counsel that plaintiffs had not demonstrated numerosity or typicality under Rule 23(a) and had failed to establish the predominance and superiority elements of Rule 23(b). _Id._, at 2. Defense attorneys opposed class certification largely on the ground that YSPs were not required to be disclosed in writing; the federal court agreed, holding that “verbal disclosures and independent knowledge of the YSP were relevant” in evaluating whether NovaStar violated RESPA, TILA or CLA, _id._ However, in connection with a renewed motion to certify the lawsuit as a class action, the court rejected that defense argument and granted plaintiffs’ motion.

In considering the renewed motion for class certification, the district court stated that class certification turned on “whether verbal disclosures are legally relevant” to the CPA claims. Slip Opn., at 3. Plaintiffs argued that verbal disclosures were irrelevant because the lender was required to disclose YSPs in writing under the CLA, and because violations of the CLA are per se violations of the CPA. Id., at 2. Defense attorneys argued that the CLA does not require written disclosure of YSPs. Id., at 4. While the federal court found that plaintiffs had not cited any provision of the CLA requiring lenders to disclose YSPs, it determined that this was irrelevant, explaining at page 5:

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

Class Action Defense Cases-Carnegie v. Household Int’l: Illinois Federal Court Approves Class Action Settlement

Third Attempt to Obtain Court Approval of Class Action Settlement Succeeds and Court Rejects Claim of Collusion Between Class Counsel and Defense Attorneys

Plaintiffs filed a class action against H&R Block (as tax preparer) and against Beneficial National Bank (as lender) arising from loans made based on the anticipated tax refund the borrowers would receive claiming that defendants’ failure to disclose that Beneficial paid H&R Block a $7 license fee for every loan referred by H&R Block. Defense attorneys vigorously contested the class action, and after a decade of litigation a settlement was reached and approved by the district court. Zawikowski v. Beneficial Nat’l Bank, 2006 WL 1051879 (N.D. Ill. July 28, 2000, Case No. 98 C 2178). The Illinois federal court approved a settlement of that class action, but the Seventh Circuit reversed. See Reynolds v. Beneficial Nat’l Bank, 288 F.3d 277 (7th Cir. 2002). The Illinois federal district court rejected a second attempt at settlement because the proposed settlement was not fair and reasonable. The court also concluded that class counsel’s representation of the class was inadequate. See Reynolds v. Beneficial Nat’l Bank, 260 F.Supp.2d 680 (N.D. Ill. 2003). Under the guidance of new class counsel and a new class representative, the parties reached yet another proposed settlement, this one winning district court approval. Carnegie v. Household Int’l, Inc., 445 F.Supp.2d 1032 (N.D. Ill. 2006).

Class Action Court Decisions Uncategorized