Smith v. The Thomson Corporation-Class Action Defense Cases: Defense Wins Cross-Appeal In Fraud Class Action Based On Overcharges Because Plaintiff Failed To Prove Damages

Illinois Appellate Court Reverses Judgment in Favor of Class Action Plaintiff Because Evidence Demonstrated that Plaintiff Suffered no Damages and Because Trial Court’s Calculation of Damages was Flawed

A law firm filed a class action in Illinois state court against suppliers of legal products to law firms alleging Illinois and Minnesota statutory consumer fraud claims based on the allegation the defendants “add[ed], on a pro rata basis, a $6 per CD-ROM shipping-and-handling charge to the monthly billing statements sent to the plaintiff pursuant to a subscription agreement . . . without identifying the added charge and in contravention of the defendants’ previous practice of not charging customers for shipping and handling.” Smith, Allen, Mendenhall, Emons & Selby v. The Thomson Corp., ___ N.E.2d ___, 2006 WL 2947653 (Ill.App. October 26, 2006) [Slip Opn., at 2]. Following a bench trial, the court entered an $8.5 million judgment in favor of plaintiff, but denied prejudgment interest and attorney fees. Plaintiff appealed the limitation on its award; defense attorneys cross-appealed from the underlying judgment. _Id._, at 1. The Appellate Court reversed the underlying judgment, rendering plaintiff’s appeal moot.

Class Action Court Decisions Uncategorized

Class Action Defense Cases-Insurance Industry Discriminatory Sales Practices: Judicial Panel On Multidistrict Litigation (MDL) Agrees With Defense And Denies Request To Centralize Actions

Plaintiffs Fail to Establish Grounds for Centralization of Lawsuits Under 28 U.S.C. § 1407 In conjunction with two class action lawsuits – one pending in the Eastern District of Louisiana and the other pending in the Western District of Texas – plaintiffs filed a motion with Judicial Panel on Multidistrict Litigation (MDL) pursuant to 28 U.S.C. § 1407 seeking centralization of the actions for pretrial purposes, and defense attorneys opposed the request.

Class Action Court Decisions Multidistrict Litigation Uncategorized

15 U.S.C. § 77h–Taking Effect Of Registration Statements And Amendments Thereto 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. We have already noted that the information that must be contained in registration statements is described in 15 U.S.C. § 77g. In the following section, Congress set forth the effective date of registration statements and amendments to registration statements, and covered incomplete or inaccurate information in registration statements – including untrue statements or omissions – in 15 U.S.C. § 77h, which provides:

§ 77h. Taking effect of registration statements and amendments thereto

(a) Effective date of registration statement

Except as hereinafter provided, the effective date of a registration statement shall be the twentieth day after the filing thereof or such earlier date as the Commission may determine, having due regard to the adequacy of the information respecting the issuer theretofore available to the public, to the facility with which the nature of the securities to be registered, their relationship to the capital structure of the issuer and the rights of holders thereof can be understood, and to the public interest and the protection of investors. If any amendment to any such statement is filed prior to the effective date of such statement, the registration statement shall be deemed to have been filed when such amendment was filed; except that an amendment filed with the consent of the Commission, prior to the effective date of the registration statement, or filed pursuant to an order of the Commission, shall be treated as a part of the registration statement.

Statutes & Rules Uncategorized

Employment Law Class Action Cases Again Lead Weekly California Filings Facing Defense Attorneys

To aid California class action defense attorneys in anticipating claims against which they may have to defend, we provide weekly an unofficial summary of 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 October 20 – October 26, 2006. We include only those categories that boast 10% or more of the class action filings during the relevant timeframe.

Class Actions In The News Uncategorized

15 U.S.C. § 77g–Information Required In Registration Statements 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. While the statutory provisions for the registration of securities is contained in 15 U.S.C. § 77f, Congress set forth the information that must be contained in a registration statement in 15 U.S.C. § 77g. That statute provides:

§ 77g. Information required in registration statement

(a) The registration statement, when relating to a security other than a security issued by a foreign government, or political subdivision thereof, shall contain the information, and be accompanied by the documents, specified in Schedule A of section 77aa of this title, and when relating to a security issued by a foreign government, or political subdivision thereof, shall contain the information, and be accompanied by the documents, specified in Schedule B of section 77aa of this title; except that the Commission may by rules or regulations provide that any such information or document need not be included in respect of any class of issuers or securities if it finds that the requirement of such information or document is inapplicable to such class and that disclosure fully adequate for the protection of investors is otherwise required to be included within the registration statement. If any accountant, engineer, or appraiser, or any person whose profession gives authority to a statement made by him, is named as having prepared or certified any part of the registration statement, or is named as having prepared or certified a report or valuation for use in connection with the registration statement, the written consent of such person shall be filed with the registration statement. If any such person is named as having prepared or certified a report or valuation (other than a public official document or statement) which is used in connection with the registration statement, but is not named as having prepared or certified such report or valuation for use in connection with the registration statement, the written consent of such person shall be filed with the registration statement unless the Commission dispenses with such filing as impracticable or as involving undue hardship on the person filing the registration statement. Any such registration statement shall contain such other information, and be accompanied by such other documents, as the Commission may by rules or regulations require as being necessary or appropriate in the public interest or for the protection of investors.

Statutes & Rules Uncategorized

Tmesys v. Eufaula-Class Action Defense Cases: Circuit Court Has Jurisdiction To Review District Court Order Remanding Class Action To State Court Based On Finding That CAFA (Class Action Fairness Act) Does Not Apply Eleventh Circuit Holds

As a Matter of First Impression, Eleventh Circuit Holds that Jurisdiction Exists to Review District Court Order Based on Finding that Class Action Fairness Act of 2005 (CAFA) does not Apply and Agrees with District Court Decision to Remand Class Action to State Court Plaintiff filed a putative class action in Alabama state court against health insurer alleging breach of contract. Defense attorneys removed the action to federal court based on the Class Action Fairness Act of 2005 (CAFA).

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

Kim v. Citigroup-Class Action Defense Cases: Forfeiture Aspect Of Capital Accumulation Plan Did Not Violate State’s Wage Act Illinois Court Holds

Trial Court Erred in Finding that Employees Voluntary Participation in a Capital Accumulation Plan Violated Illinois Wage Act Because of Two-Year Forfeiture Period

Plaintiff filed a class action against Citigroup, Travelers Group, Primerica Financial Services, Salomon Smith Barney Holdings and Salomon Smith Barney alleging that a voluntary capital accumulation plan (CAP), whereby a portion of employee compensation and wages were paid in the form of restricted stock, violated Illinois labor laws because the CAP contained a two-year forfeiture period. Kim v. Citigroup, Inc., ___ N.E.2d ___, 2006 WL 2796362 (Ill.App. September 29, 2006). Plaintiff argued that the forfeiture of a portion of the stock upon termination of employment violated the Illinois Wage Payment and Collection Act (“the Act’), which requires that employees be paid all earned wages upon termination of employment. Defense attorneys argued that the CAP program is for the benefit of employees and does not violate state law. The trial court sided with plaintiff, but the appellate court reversed.

Plaintiff was a financial consultant for Salomon Smith Barney with responsibility for managing $30-$40 million in assets. He voluntarily agreed to participate in the CAP, which he believed to be “an innovative and attractive savings vehicle.” Slip Opn., at 2. Plaintiff elected to have 10% of his compensation paid in the form of restricted stock, which allowed him to receive Citigroup stock at a 25% discount subject to a two-year vesting period. Id., at 2-3. When plaintiff left to join UBS Paine Webber, Salomon Smith Barney kept the unvested shares of his CAP stock, which represented approximately $18,000 in earned wages. Id., at 3.

Class Action Court Decisions Employment Law Class Actions Uncategorized

FedEx Class Action Defense Case-Moody v. Federal Express: Illinois Appellate Court Affirms Judgment In Favor Of Defense Against Class Action Alleging Breach Of Contract Because Class Action Complaint Sought Remedy Outside Scope Of Contract

Defense Attorneys Successfully Defeat Class Action Alleging State Law Breach of Contract Claim Because Contract Set Forth Exclusive Remedies in Event of Breach and Class Action Complaint Sought a Different Remedy

Plaintiff filed a one-count nationwide class action in state court against FedEx alleging that it breached the terms of its shipping contract with customers because it charged higher rates for express delivery service but failed to deliver the packages on time. Moody v. Federal Express Corp., ___ N.E.2d ___, 2006 WL 3012854 (Ill.App. October 19, 2006) [Slip Opn., at 2]. Plaintiff paid $41.31 to send a package on January 22, 2002 by “FedEx Priority Overnight, Next Business Morning” expecting the package to be delivered by 8:00 a.m. the following morning; instead, the package was delivered two days later at 9:00 a.m. _Id._ Defense attorneys moved for summary judgment on the grounds that the relief sought in the class action violated the federal Airline Deregulation Act, 49 U.S.C. § 41713(b)(1), “because it sought a remedy outside the four corners of the contract.” _Id._ The trial court agreed that the claims were preempted and dismissed the class action; the Illinois Appellate Court affirmed on straight contract grounds without reaching the federal preemption issue.

Class Action Court Decisions Uncategorized

Hood v. Santa Barbara Bank-Class Action Defense Cases: Trial Court Improperly Granted Defense Motion To Dismiss Class Action Alleging CLRA, UCL And FDCPA Violations Because Class Action Claims Were Not Preempted By Federal Law California Court Holds

California Appellate Court Split Opinion Rejects Defense Federal Preemption Arguments and Reverses Order Dismissing Class Action

Plaintiffs filed a putative class action in California state court against a bank alleging conversion, and violations of California’s Consumers Legal Remedies Act (CLRA), Unfair Competition Law (UCL), Fair Debt Collection Practices Act (FDCPA) based on the bank’s “wrongful” release of tax refund monies to a third party creditor bank. Hood v. Santa Barbara Bank & Trust, 143 Cal.App.4th 526, 49 Cal.Rptr.3d 369, 373 (Cal.App. 2006). Defense attorneys cross-complained against several other banks, and the banks filed motions for judgment on the pleadings on the ground of federal preemption. Id., at 375. The trial court granted the motions, concluding that the “visitorial powers” regulation, the deposit-taking regulation and the non-real estate lending regulation adopted by the Office of the Comptroller of the Currency (OCC) expressly preempted plaintiffs’ class action claims. Id., at 375-76. By a 2-1 vote, the California Court of Appeal reversed.

Class Action Court Decisions Uncategorized

Jackson v. Midland Credit-Class Action Defense Cases: Illinois Federal Court Grants Defense Motion For Summary Judgment Holding Debt Collection Letter Did Not Violate Federal Fair Debt Collection Practices Act (FDCPA)

Federal Court Rejects Class Action Claim that Offer to Settle Debt for 50% of Current Balance Due Violates Fair Debt Collection Practices Act (FDCPA)

Plaintiffs filed a consolidated class action complaint against Midland Credit Management, a debt collector that purchases debts from third-party creditors, alleging violations of the federal Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. §§ 1692 et seq. Midland sent letters attempting to collect outstanding debts; the class action complaint alleged that the letters violated the FDCPA because they contain false and misleading information. Defense attorneys filed a motion for summary, and plaintiffs followed with a cross-motion for summary judgment. The federal district court agreed with defense attorneys that the collection letters did not violate the FDCPA and granted summary judgment in favor of Midland and against the class action plaintiffs. Jackson v. Midland Credit Management, Inc., 445 F.Supp.2d 1015, 1017 (N.D. Ill. 2006).

Preliminarily, the district court noted that the Seventh Circuit “evaluates FDCPA claims through the eyes of an ‘unsophisticated debtor’” – it does not employ the “least sophisticated debtor” test adopted by some sister circuits. Jackson, at 1018-19. The court explained at page 1018 that, under this test,

“The unsophisticated debtor is regarded as ‘uninformed, naive, or trusting,’ but nonetheless is considered to have a ‘rudimentary knowledge about the financial world and is capable of making basic logical deductions and inferences.’” (Citations omitted.)

Because the court’s analysis requires an understanding of the specific language used in Midland’s letters, we provide the quoted language, including the emphasis in the original letters, as set forth by the district court at page 1017:

Class Action Court Decisions FDCPA Class Actions Uncategorized