California Court Certifies Employment Law Class Action Against Brinker International

Restaurants’ Class Action Defense Fails to Prevent Class Certification in Meal and Rest Breaks Lawsuit The Los Angeles Times reports today that a California court has certified a class action against the operator of restaurant chains Chili’s and Romano’s Macaroni Grill alleging failure to provide employee meal and rest periods required by California state law. According to the report, Judge Patricia Cowett of the San Diego Superior Court certified the class action on behalf of both current and former employees.

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Class Action Defense Cases–McCready v. eBay: eBay Not A Debt Collector Under Federal FDCPA Or Reporting Agency Under Federal FCRA, And eBay Lawfully Produced Documents Pursuant To Subpoena, Seventh Circuit Holds

Fair Debt Collection Practices Act Requires Affirmative Action, Fair Credit Reporting Act Does Not Apply to Commercial Activity,

On July 10, 2006, a federal appellate court consolidated two appeals and (1) agreed with eBay’s defense team that eBay was not subject to the federal FDCPA (Fair Debt Collection Practices Act) or the federal FCRA (Fair Credit Reporting Act), and (2) affirmed that eBay compliance with a subpoena for records did not violate the federal ECPA (Electronic Communications Privacy Act) or the federal SCA (Stored Communications Act): it therefore affirmed the dismissals entered in both underlying lawsuits. McCready v. eBay, Inc., ___ F.3d ___, 2006 WL 1881142 (7th Cir. 2006). For clarity, we address the two lawsuits separately. The first lawsuit arose from the fact that plaintiff utilized eBay’s services to operate an online business through which he would buy and sell goods. Several eBay users became unhappy with their business dealings with plaintiff; they used eBay’s “Feedback Forum” to explain their dissatisfaction, and several of them notified eBay of their complaints. eBay told plaintiff of the complaints and explained that his accounts would be suspended if the complaints were not resolved. Ultimately, eBay suspended plaintiff’s accounts but offered to reinstate them if he reimbursed monies to the claimants. “Rather than make good on his sales, [plaintiff] embarked on retaliatory litigation,” Slip Opn., at 2, and a summary of that litigation is described in the Note below. Relevant here, plaintiff filed a federal court complaint against eBay alleging violations of the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. §§ 1692 _et seq._, the Fair Credit Reporting Act (FCRA), 15 U.S.C. §§ 1681 _et seq._, the Electronic Fund Transfers Act (EFTA), 15 U.S.C. §§ 1693 _et seq._, Title 11 of the U.S. Bankruptcy Code, and nine (9) state law claims. _Id._, at 3. The district court granted the defense motion to dismiss the FDCPA and FCRA claims, and declined to exercise supplemental jurisdiction over the state law claims; the parties stipulated to dismissal with prejudice of the bankruptcy claim. _Id._, at 4.

With respect to the FDCPA claim, the Seventh Circuit observed that eBay simply suspended plaintiff’s accounts until he resolved the outstanding fraud complaints and never threatened to take collection against him; the Court held that such conduct could not be deemed an attempt to “collect” a debt. McCready, at 8. With respect to the FCRA claim, plaintiff asserted that eBay’s “Feedback Forum” constituted a “consumer report, id., at 9. The Court quickly dispatched this claim on several grounds:

Class Action Court Decisions FCRA Class Actions FDCPA Class Actions Uncategorized

Employment Law Class Action Cases Again Lead Weekly Filings Confronting California 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 of July 7 – July 13, 2006. We include only those categories with 10% or more of the class action filings during the relevant timeframe.

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Hurricane Katrina Lawsuit Textbook Example Of When Not To Use Class Action Device: Class Action Defense Issues

Class Action Defense Attorneys Agree With Plaintiffs’ Lawyer’s Assessment of Case A lawsuit by Paul and Julie Leonard against Nationwide is the first lawsuit against a liability insurer for home damage caused by Hurricane Katrina to go to trial, according to today’s New York Times. The article by Joseph Treaster details the difference between insurance claims arising out of Katrina for wind damage (generally covered) and flood damage (generally excluded from coverage).

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Class Action Defense Issues–G.M. Sign v. Global Shop: New Case Law Does Not Constitute “Order Or Other Paper” Permitting Removal Of Class Action To Federal Court After 30-Day Period Has Lapsed Illinois Court Holds

The “Order or Other Paper” Exception to the 30-Day Period to Remove a State Court Action to Federal Court is not Satisfied By New Appellate Law

We have discussed that class action defense often benefits from removal of the case to federal court, and that the Class Action Fairness Act of 2005 (CAFA) greatly expanded access to federal courts in class action cases, in separate articles. If CAFA does not apply, then removal of cases to federal court generally is governed by 28 U.S.C. § 1446, also discussed in prior articles related to class action defense. Broadly speaking, the defense must remove a case to federal court within 30 days of receipt of the complaint or “a copy of an amended pleading, motion, order or other paper from which it may first be ascertained that the case is one which is or has become removable,” 28 U.S.C. § 1446(b) (italics added). This 30-day time period is “mandatory” but not “jurisdictional.” Fristoe v. Reynolds Metals Co., 615 F.2d 1209, 1212 (9th Cir. 1980); Somlyo v. J. Lu-Rob Enterprises, Inc., 932 F.2d 1043, 1046 (2d Cir. 1991). On May 9, 2006, an Illinois federal district court considered whether a recent Seventh Circuit opinion constituted an “order or other paper” from which federal jurisdiction “may first be ascertained.” G.M. Sign, Inc. v. Global Shop Solutions, Inc., 430 F.Supp.2d 826 (N.D. Ill. 2006).

Plaintiff filed suit a putative class action against Global Shop Solutions in Illinois state court for alleged violations of the federal Telephone Consumer Protection Act, 47 U.S.C. § 227 (TCPA), which the then-existing weight of authority held “vests exclusive jurisdiction in state courts for private actions under the TCPA,” though the Seventh Circuit Court of Appeal had not yet addressed the issue. G.M. Sign, at 827-28 and n.1. In fact, a week Global Shop had been served, an Illinois federal district court remanded a similar TCPA action to state court “holding that the TCPA conferred exclusive [jurisdiction] on the state courts.” Id., at 827 (citing Brill v. Countrywide Home Loans, Inc., 2005 WL 2230193 (N.D. Ill. 2005)). After the time for removal had passed, the Seventh Circuit reversed Brill and held that TCPA claims may be brought in federal court both under federal question jurisdiction and under diversity jurisdiction. Brill v. Countrywide Home Loans, Inc., 427 F.3d 446, 451 (7th Cir. 2005). Global Shop removed its class action lawsuit to federal court 32 days after the issuance of Brill.

Class Action Court Decisions Removal & Remand Uncategorized

Harris v. Investor’s Business Daily: California Class Action By Telemarketing Employees Not Preempted By Federal FLSA (Fair Labor Standards Act) California Court Holds

California Appellate Court Holds that Federal Fair Labor Standards Act (FLSA) May Serve as Unlawful Act for California Unfair Competition Claim, and Triable Issues of Fact Exist As to Overtime Pay Claim and Unlawful Deductions for Cancelled Subscriptions Claim

Employees who worked as telemarketers selling newspaper subscriptions filed a class action in California state court “alleging claims under the California Labor Code for overtime pay, unlawful commission deductions, and waiting penalties, and for unfair competition pursuant to [California Business & Professions Code] section 17200.” Harris v. Investor’s Business Daily, 138 Cal.App.4th 28, 31 (Cal.App. 2006). The claims were based on a compensation system whereby employees “were compensated on the basis of a point system which rewarded them for selling longer subscriptions, winning daily contests, and meeting weekly sales goals” but they were “subject to a ‘chargeback’ – a deduction from points earned on a sale if the customer cancelled the subscription within 16 weeks.” Id. To ensure that it complied with state and federal laws, the compensation system provided that employees would be paid no less than the prevailing minimum wage. Id. The complaint was later amended to a add a claim that alleged violations of the federal FLSA (Fair Labor Standards Act, 29 U.S.C. § 207(a)(1)) as the predicate for a new section 17200 violation. Id., at 32. The defense demurrer to the new 17200 cause of action was sustained without leave to amend, and the defense summary adjudication motion as to the balance of the class action claims was granted. Id.

The appellate court first addressed the FLSA-based 17200 claim. The defense had argued that FLSA preempted the claim “because traditional opt-out class actions are available under the California law, while, under FLSA, class members must opt in.” Harris, at 32. Relying upon several unpublished federal court decisions, id., at 34-36, the appellate court concluded that FLSA did not preempt section 17200, and that the purpose behind the federal “opt-in” requirement – “to protect employers from facing ‘financial ruin’ and prevent employees from receiving ‘windfall payments, including liquidated damages'” – is not implicated by a section 17200 claim “limited to restitution.” Id., at 33-34.

Class Action Court Decisions Employment Law Class Actions Uncategorized

Class Action Defense And Employment Law Issues–Loving v. Johnson: Prison Inmates Are Not Employees Under Federal FLSA (Fair Labor Standards Act) For Working At Prison Fifth Circuit Holds

In Case of First Impression for Federal Courts in Fifth Circuit, Court Joins Sister Circuits in Holding that Fair Labor Standards Act (FLSA) Does not Cover Prisoners Working at Prison On July 7, 2006, the Fifth Circuit Court of Appeals considered the appeal of a prison inmate from a federal district court judgment dismissing his action as frivolous. Loving v. Johnson, ___ F.3d ___, 2006 WL 1868320 (5th Cir. 2006). The prisoner filed suit claiming that under the federal Fair Labor Standards Act, 29 U.

Class Action Court Decisions Class Actions In The News Employment Law Class Actions Uncategorized

California Court Agrees With Defense: Holds Both Class Action Plaintiff And Class Members Must Have Suffered Injury In Fact, And Both Must Have Standing Which Requires Detrimental Reliance On Allegedly False Advertising, In Order To Warrant Certification

Pfizer v. Superior Court: Proposition 64 Requires Class Action Representatives and Class Members Satisfy Injury in Fact and District Court Exercise of Discretion to Select Class Action Attorneys Best Able to Represent Absent Class Members is Generally Not Subject to Appellate Review: Class Action Defense Issues

California’s Unfair Competition Law (UCL), Cal. Bus. & Prof. Code, §§ 17200 et seq., and false advertising statute, id., §§ 17500 et seq., were altered fundamentally by the passage of voter-initiate Proposition 64 in November 2004. In January 2005, a putative class action lawsuit was filed in California state court against Pfizer under California’s UCL and false advertising law (FAL) on the ground that it had “marketed Listerine in a misleading manner by indicating the use of Listerine can replace the use of dental floss in reducing plaque and gingivitis.” Pfizer, Inc. v. Superior Court, ___ Cal.App.4th ___ (Cal.App. July 11, 2006), Slip Opn., at 2. (Prior to Proposition 64, UCL claims were brought as “representative actions”; Proposition 64 amended the UCL and FAL so as to require plaintiffs in such actions to satisfy the requirements for class action lawsuits. _See_ Bus. & Prof., Code, §§ 17203 [UCL], 17535 [FAL].) The trial court certified class action status, describing the class as “all persons who purchased Listerine, in California, from June 2004 through January 7, 2005.” _Id._ The defense filed a petition for writ of mandate, and the appellate court reversed.

In seeking class certification, plaintiff claimed inter alia that his claims were “typical” of the class; the defense disagreed. Pfizer argued that individual issues would predominate over common questions of fact (as detailed in the “Note” below). Slip Opn., at 7. Nonetheless, the trial court certified “a broad class, on an opt-opt basis,” though it noted that whether Proposition 64 amended the standing requirements for class members in UCL class actions is “an open issue.” Id., at 7-8. After carefully analyzing the issue, the California appellate court held that the standing requirements for UCL class actions had been amended by Proposition 64: “Proposition 64 now prohibits any person, other than the Attorney General or local public prosecutors from bringing a lawsuit under the UCL or the FAL unless the person has suffered injury and lost money or property as a result of such violations.” Slip Opn., at 11 (citation omitted).

Certification of Class Actions Class Action Court Decisions Class Actions In The News Uncategorized

Class Action Defense Cases: D.C. Circuit Grants Federal Government’s Defense Motion To Reassign Class Action

Class Action District Court Judge’s Hostility to Interior Department Makes Him Incapable of Rendering Fair and Impartial Rulings

Federal and state courts are understandably loathe to recuse judges for claims of bias, but on July 11, 2006, in a class action that has been pending for a decade, the United States Court of Appeals for the District of Columbia “reluctantly” granted a federal defense motion to do just that. Cobell v. Kempthorne, ___ F.3d ___, 2006 WL 1889150 (D.C. Cir. 2006). The class action originated in 1996, when five Indians sued the federal government for breach of fiduciary duties in its capacity as trustee of Indian lands by “destroy[ing] critical records, fail[ing] to account to trust beneficiaries, and either los[ing] trust assets or convert[ing] them to government use.” Slip Opn., at 2. By the lawsuit, plaintiffs sought “‘to force the government to abide by its duty to render an accurate accounting’ of the assets held in Individual Indian Money (IIM) trust accounts.” Slip Opn., at 2-3 (quoting _Cobell v. Babbitt_, 91 F.Supp.2d 1, 6-7 (D.D.C. 1999) (“_Cobell V_“)). The case was certified as a class action in 1997, plaintiffs prevailed at trial, and in 1999 the district court ordered the federal government to “come into compliance with their duties.” Slip Opn., at 3 (quoting _Cobell v. Norton_, 240 F.3d 1081,1094 (D.C. Cir. 2001) (“_Cobell VI_“)). The lower court retained jurisdiction over the action and required status reports from the federal government quarterly summarizing its progress. _Id._ In 2001, the D.C. Circuit “generally affirm[ed] the judgment, but cautioned the district court “‘to be mindful of the limits of its jurisdiction’ and therefore to refrain from unduly interfering with Interior’s ‘conduct in preparing an accounting.'” Slip Opn., at 3 (quoting _Cobell VI_, at 1110).

Class Action Court Decisions Class Actions In The News Uncategorized

Frustration Mounts Over Settlement Of Verizon Class Action Lawsuit As Defense Pleads That It Is Merely Complying With Court Order

David Lazarus of the San Francisco Chronicle reports today on the confusion millions of Verizon customers are experiencing in deciphering precisely what the new disclosures are in their wireless phone contract after receiving “a voluminous – and optional – ‘customer agreement pursuant to lawsuit settlement.'” But they are not alone: according to Lazarus, a Verizon spokeswoman “admit[s] that finding the revised language can be tough.” Verizon is quoted as saying, “If it’s confusing, this is what we were ordered to do by the court.

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