Privacy Class Action Defense Cases–TJX v. Superior Court: California Court Holds One-Year Limitations Period Applies To Class Action Complaint Under Song-Beverly Act And Class Action Complaint Cannot Include Merchandise Return Transactions

Class Action Alleging Violations of California’s Song-Beverly Act Limited by One-Year Statute of Limitations Period and cannot Encompass Customers from Whom Information was Sought as Part of Merchandise Return Transactions because Song-Beverly does not Apply to Returns, only Point of Sale, California State Court Holds

Plaintiffs filed a putative class action against TJX, TJ Maxx, Marshalls and other defendants alleging violations of California’ Song-Beverly Act, Civil Code § 1747 et seq., which prohibits businesses from requiring customers to provide certain personal information in connection with credit card purchases, and which “bans the use of forms that facilitate the obtaining of such information”; the class action complaint purported to represent individuals who had made credit card purchases over the prior three-year period, and the class action purported to seek damages on behalf of customers from whom information was requested as part of merchandise return transactions. TJX Cos., Inc. v. Superior Court, ___ Cal.App.4th ___, 77 Cal.Rptr.3d 114, 2008 WL 213132573, *1 (Cal.App. May 22, 2008). Defense attorneys demurred to the class action complaint on the grounds that “customers who returned merchandise were not covered under section 1747.08,” and sought to strike those portions of the class action complaint that sought to define the class as extending back three years. _Id._ The trial court overruled the demurrer and motion to strike. Defense attorneys sought petitions for mandate from the appellate court, and the appellate court reversed.

With respect to the limitations period, Song-Beverly provides for statutory penalties “not to exceed two hundred fifty dollars ($250) for the first violation and one thousand dollars ($1,000) for each subsequent violation.” Cal. Civ. Code, § 1747.08(e). Plaintiffs’ lawyer argued that this provision constitutes a “liability created by statute, other than a penalty or forfeiture,” so as to fall within the three-year statute of limitations set forth in California Code of Civil Procedure section 338. TJX, at *3. Defense attorneys, however, argued that the class action’s Song-Beverly Act claims constitute “[a]n action upon a statute for a penalty,” and thus fall within the one-year statute of limitations set forth in California Code of Civil Procedure section 340. Id. The appellate court sided with the defense. It explained that while the amount of penalty to be set in the event of a violation is within the sound discretion of the trial court, “[p]resumably…span[ning] between a penny (or even the proverbial peppercorn we all encountered in law school) to the maximum amounts authorized by the statute,” it does not have discretion to deny awarding damages entirely. Id., at *2-*3. Because the trial court must impose a penalty in the event of a violation, the class action complaint falls within the scope of section 340 and is subject to a one-year limitations period. Id., at *3-*4. Accordingly, the Court of Appeal granted the petition for writ of mandate as to the motion to strike those portions of the class action complaint seeking to impose liability on defendants for more than one year. Id., at *6.

Class Action Court Decisions Uncategorized

HAPPY MEMORIAL DAY FROM THE CLASS ACTION DEFENSE BLOG

The author of the Class Action Defense Blog wishes all of you a very happy Memorial Day. A new class action article, summarizing the recent California Court of Appeal opinion discussing California’s Song-Beverly Act, will be published tomorrow.

Class Actions In The News Uncategorized

Labor Law Class Action Lawsuits Continue To Dominate List Of Weekly Class Action Cases Filed In California State And Federal Courts

To assist class action defense attorneys anticipate the types of cases against which they will have to defend in California, we provide weekly, unofficial summaries of the legal categories for new class action lawsuits 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. We include only those categories that include 10% or more of the class action filings during the preceding week.

Class Actions In The News Uncategorized

FACTA Class Action Defense Cases—In re Texas Roadhouse: Judicial Panel On Multidistrict Litigation (MDL) Grants Plaintiff Motion To Centralize Class Action Litigation In Northern District of Illinois

Judicial Panel Grants Plaintiff Request for Pretrial Coordination of Class Action Lawsuits Pursuant to 28 U.S.C. § 1407 over Defense Objection Two class action lawsuits – one in Illinois and one in Pennsylvania – were filed in against defendants Texas Roadhouse Holdings LLC and Texas Roadhouse, Inc., for violations of the Fair and Accurate Credit Transactions Act (FACTA), alleging that defendants printed information on credit card and debit card customer receipts that FACTA required be excluded therefrom.

Class Action Court Decisions FCRA Class Actions Multidistrict Litigation Uncategorized

FCRA Class Action Defense Cases–Sullivan v. Greenwood Credit Union: In Case Of First Impression First Circuit Affirms Summary Judgment In Favor Of Defense In FCRA Class Action Holding Creditor’s Letter Was A “Firm Offer” Under FCRA

Affirming Summary Judgment in Favor of Defense in Class Action Alleging Violations of FCRA (Fair Credit Reporting Act), Class Action Complaint Properly Dismissed because, as Matter of First Impression, Offer of Credit Satisfies FCRA if Creditor will not Deny Credit to Consumers who Meet Pre-Selection Criteria First Circuit Holds

Plaintiff filed a putative class action against Greenwood Credit Union alleging violations of the Fair Credit Reporting Act (FCRA) arising out of “an unsolicited letter to a consumer about the offering of credit for a home loan.” Sullivan v. Greenwood Credit Union, 520 F.3d 70, 71 (1st Cir. 2008). Greenwood had purchased credit reports for purposes of pre-screening individuals, and then sent home loan offers to “a list of individuals meeting certain minimal credit requirements”: the class action complaint alleged that the unsolicited letters fall within the FCRA and that consumer credit information had been obtained for an improper purpose; defense attorneys argued that the FCRA permits obtaining credit reports for various purposes, including extending a “firm offer of credit.” Id. The First Circuit explained at page 71, “This case is about plaintiff’s efforts to collect that statutory penalty for a class of consumers; there is no claim [he] was wrongfully denied credit.” The thrust of the class action claims was that the offer of credit “was based on such minimal criteria and the actual extension of credit was so contingent on other conditions that the letter could not be a firm offer of credit.” Id. Defense attorneys moved for summary judgment on the class action complaint, and the district court granted the motion. As a matter of first impression in the First Circuit, the Circuit Court considered the phrase “firm offer of credit” and affirmed.

Defense attorneys argued that Greenwood limited its offer of credit to homeowners “having at least $10,000 in revolving debt and a credit score of 500 or greater.” Sullivan, at 71. Greenwood did not obtain a consumer’s entire credit report; rather, it obtained from the credit reporting agency only contact information for consumers who met these criteria. Id., at 71-72. Greenwood then sent consumers a letter offering them, for a limited time, loans up to 100% of the value of their home at “some of the lowest rates in decades”; however, the letter did not provide the interest rate being offered, nor did it state the duration of the loan. Id., at 72. The letter noted, however, “Limited time offer to customers who qualify based on equity, income, debts, and satisfactory credit. Rates and terms subject to change without notice. Most loan programs require both a satisfactory property appraisal and title exam for final approval…. If at time of offer you no longer meet initial criteria, offer may be revoked.” Id. The letter also informed consumers as to the steps they could take if they wanted to stop receiving prescreened offers of credit. See id. Plaintiff responded to the letter by filing the class action complaint, id. Plaintiff’s theory was that Greenwood had not extended a “firm offer of credit” because the letter “‘is lacking crucial terms for it to be an offer’ and ‘is so vague and lacking in terms as not to constitute an “offer capable of acceptance”.’” Id. The class action complaint sought statutory damages of $1,000 per class member on behalf of approximately 2 million individuals, id.

Class Action Court Decisions FCRA Class Actions Uncategorized

CAFA Class Action Defense Cases–Korn v. Polo Ralph Lauren: California Federal Court Denies Motion To Remand Class Action To State Court Holding Defense Established Class Action Alleging Song-Beverly Act Violations Involved More Than $5 Million

Defense Evidence in Support of Removal of Class Action to Federal Court Adequately Established Removal Jurisdiction under Class Action Fairness Act (CAFA) California Federal Court Holds

Plaintiff filed a putative class action lawsuit in California state court against Polo Ralph Lauren alleging violations of California’s Song-Beverly Act; specifically, the class action complaint alleged that defendant requested personal information from customers as part of credit card transactions in violation of California Civil Code § 1747.08. Korn v. Polo Ralph Lauren Corp., 536 F.Supp.2d 1199, 1202 (E.D. Cal. 2008). Defense attorneys removed the class action to federal court alleging removal jurisdiction under the Class Action Fairness Act (CAFA); plaintiffs moved to remand the class action to state court on the grounds that defendant failed to establish the requisite diversity or amount in controversy. Id. As the district court explained, “CAFA grants district courts original jurisdiction over civil class actions filed under federal or state law in which any member of a class of plaintiffs is a citizen of a state different from any defendant and the amount in controversy for the putative class members in the aggregate exceeds the sum or value of $5,000,000, exclusive of interest and costs.” Id. (citing 28 U.S.C. § 1332(d)(2)). The district court refused to remand the class action to state court, holding that defendant sufficiently established CAFA removal jurisdiction.

Plaintiff first argued that Polo Ralph Lauren did not establish that it was not a citizen of California, Korn, at 1201; the district court rejected this argument, noting that plaintiff is bound by the judicial admission in his complaint that defendant is a Delaware corporation with its principal place of business in New Jersey, id., at 1203. Accordingly, the federal court held plaintiff “bound by the allegations in his complaint that assert defendant’s citizenship, for purposes of diversity jurisdiction, is in Delaware and New Jersey.” Id. Plaintiff next argued that the defense failed to establish the $5,000,000 amount in controversy requirement. Id., at 1201. While the class action complaint did not seek a specific amount of damages, the district court observed that the class action seeks “statutory civil penalties for the alleged violations [of] up to $1000 per violation.” Id., at 1202. Further, as part of the documentation supporting removal of the class action to federal court, defense attorneys had submitted a declaration establishing that Polo Ralph Lauren had “processed more than 5,000 credit card transactions over the last year in the state of California.” Id. The district court held that this was sufficient.

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

Class Action Defense Cases–ChartOne v. Raglon: Arkansas Supreme Court Affirms Class Action Certification Of Lawsuit Alleging Fees Charged For Medical Records Exceeded Amounts Allowable By Statute

Class Action Complaint Challenging as Excessive Fees Charged for Medical Records Properly Certified as Class Action because Defense Challenges to Class Action Treatment Went to Issues of Damages or to the Merits, Neither of Which Defeat Class Action Certification Arkansas Supreme Court Holds

Plaintiff filed a putative class action in Arkansas state court against ChartOne, “a health-information management company that provides copying services of medical records for doctors, hospitals, and other medical-care providers throughout Arkansas,” alleging that the fees it charged for copying medical records exceeded the amount allowed by statute. The class action complaint also alleged that ChartOne charged shipping and postage fees that either were not incurred or were reimbursed by the healthcare provider. ChartOne, Inc. v. Raglon, _\_S.W.3d __ (Ark. April 24, 2008) [Slip Opn., at 1-2]. Plaintiff moved the trial court to certify the litigation as a class action; defense attorneys argued that class action treatment was not appropriate because the proposed definition of the class “was ambiguous and provided no objective criteria by which to ascertain the members of the class,” and because plaintiff failed to satisfy the statutory requirements for class action certification. Id., at 2. A representative of ChartOne testified at the class certification hearing that it was not possible to tell from company records whether a particular individual was charged a notary fee, id., at 2-3. Ultimately, the trial court granted plaintiff’s motion and certified a class action covering those “who requested a copy of medical records from a healthcare provider located in Arkansas and who paid ChartOne (1) base fees, clerical fees, retrieval fees and/or page fees as part of a charge for copying medical records, which resulted in charges being in excess of $5 for the first five pages and 25¢ for each page thereafter; and/or (2) shipping charges.” Id., at 3. The Arkansas Supreme Court affirmed.

The Supreme Court addressed first defense objections to the definition of the class. Defense attorneys argued that membership in the class could not be determined in any “reasonable or feasible manner” because “there is no way of ascertaining the per-page charges without reviewing the actual requests for records that are stored with the patients’ medical files” and that a manual, file-by-file review of more than 120,000 files would be required. ChartOne, at 5. Plaintiff responded that membership in the class was readily determinable from ChartOne’s billing records, and that the objective raised by the defense went to damages rather than whether class action treatment was appropriate, id. The Arkansas Supreme Court agreed that class actions must provide a “precise definition” of the putative class, and explained that such a definition ensures that only “those people who are actually harmed by the defendant’s wrongful conduct will participate in the relief ultimately awarded.” Id., at 6. Nonetheless, it agreed that defendant’s objections went to damages, not the definition of the class itself. Id., at 6-7. In particular, the Court was unimpressed by the argument that ChartOne’s “failure to maintain accurate records” could serve to defeat class certification. Id., at 9.

Certification of Class Actions Class Action Court Decisions Uncategorized

CAFA Class Action Defense Cases–Pew v. Cardarelli: Second Circuit Holds District Court Erred In Remanding Class Action Because Exception To CAFA Removal Jurisdiction Limited To “Disputes Over The Meaning Of The Terms Of A Security”

District Court Erred in Remanding Class Action to State Court because while Class Action Complaint Involved Sale of Securities it was Premised on Fraudulent Concealment of Company’s Financial Condition so Exception to CAFA (Class Action Fairness Act) Removal Jurisdiction did not Apply Second Circuit Holds

Plaintiffs filed a putative class action in New York state court against various defendants, including Agway (the issuer) and PriceWaterhouseCoopers (its auditor), alleging violations of New York’s consumer fraud statute; specifically, the class action complaint asserted “that officers of an issuer – abetted by the issuer’s auditor – failed to disclose, while marketing certain debt certificates, that the issuer was insolvent.” Estate of Pew v. Cardarelli, 527 F.3d 25 (2d Cir. 2008) [Slip Opn., at 3]. Plaintiffs had filed a prior class action complaint in New York state court alleging Agway failed to disclose in financial statements that it was insolvent, and was discharging its debts through the issuance of new certificates; defense attorneys removed that class action to federal court, so plaintiffs amended the class action “to plead essentially the same acts of concealment under New York’s consumer fraud law.” Id., at 5. The district court subsequently granted a defense motion to dismiss with prejudice the federal securities claims, but dismissed without prejudice the remaining state law claim based on its decision not to exercise supplemental jurisdiction over it. Id., at 6. Plaintiffs then filed another class action in New York state court that sought relief only under New York law, id. Defense attorneys again removed the class action to federal court, asserting removal jurisdiction existed under the Class Action Fairness Act of 2005 (CAFA), id. The district court granted plaintiffs’ motion to remand the class action to state court on the ground that it “falls within an exception to CAFA’s removal provision for actions ‘that relate[] to the rights, duties (including fiduciary duties), and obligations relating to or created by or pursuant to any security.” Id., at 6-7. The Second Circuit granted a defense request for permission to appeal, and reversed.

Agway was an agricultural supply and marketing cooperative that sought to raise money by issuing unsecured, fixed-interest debt instruments (money market certificates). Pew, at 4. The question presented was whether the class action’s “state-law consumer fraud claim” falls within the exception to CAFA jurisdiction, as determined by the district court. Id., at 13. Finding that “the imperfect drafting of the status makes it ambiguous,” id., and elsewhere describing CAFA’s text as “cryptic,” see id., at 19, the Circuit Court examined the statute’s wording, context and legislative history. Based on its analysis, the Second Circuit held that even though the Agway Certificates are “securities” and create “obligations” and “rights” in the holders, id., at 18, the exception to CAFA did not apply because the gravamen of the class action complaint “does not ‘relate[] to’ those rights; rather, it is a state-law consumer fraud action alleging that Agway fraudulently concealed its insolvency when it peddled the Certificates.” Id., at 19. In sum, the Court held that Congress intended to reserve the exception to CAFA removal jurisdiction for “‘disputes over the meaning of the terms of a security,’ such as how interest rates are to be calculated, and so on.” Id., at 23. Accordingly, it concluded that the district court erred in remanding the class action to state court and reversed. Id.

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

Labor Law Class Action Cases Continue To Top List Of Weekly Class Action Lawsuits Filed In California State And Federal Courts

As a resource to California class action defense attorneys, we provide weekly, unofficial summaries of the legal categories for new class action lawsuits 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. We include only those categories that include 10% or more of the class action filings during the preceding week. This report covers May 9 – 15, 2008, during which time 54 new class action lawsuits were filed.

Class Actions In The News Uncategorized

Venue Class Action Defense Cases– Totilo v. Herbert: New York Federal Court Grants Defense Motion To Transfer Class Action Lawsuit To Georgia

Deference Afforded Plaintiff’s Choice of Forum “Diminished” in Class Action Cases, and Factors Affecting Convenience of Parties/Witnesses and Interests of Justice Supported Transfer of Class Action to Georgia under 28 U.S.C. § 1404(a) New York Federal Court Holds Plaintiff filed a class action complaint against former officers of NetBank, FSB, a failed Internet bank that had been taken over by the Office of Thrift Supervision; the class action purported to be on behalf of bank depositors and alleged inter alia fraud, negligence and violations of new York’s consumer protection statute.

Class Action Court Decisions Uncategorized