Class Action Defense Cases—In re PepsiCo: Judicial Panel On Multidistrict Litigation (MDL) Grants Unopposed Defense Motion To Centralize Class Action Litigation In The Southern District Of New York

Judicial Panel Grants Defense Request for Pretrial Coordination of Individual and Class Action Lawsuits Pursuant to 28 U.S.C. § 1407, and Accepts Defense Recommendation that Lawsuits be Transferred to the Southern District of New York Four individual and class action lawsuits (two in New York, one in Tennessee and one in Texas) were filed against PepsiCo and Pepsi Bottling Group (Pepsi) arising “from allegations that Pepsi misled consumers of its Aquafina bottled water into believing that the water source of Aquafina was something different from and better than tap water.

Class Action Court Decisions Multidistrict Litigation Uncategorized

Class Action Defense Cases—In re Chiquita Brands: Judicial Panel On Multidistrict Litigation (MDL) Grants Defense Motion To Centralize Class Action Litigation But Selects Southern District Of Florida As Transferee Court

Judicial Panel Grants Defense Request for Pretrial Coordination of Class Action Lawsuits Pursuant to 28 U.S.C. § 1407, but Rejects Defense Recommendation that Class Actions be Transferred to District of Columbia Six class action lawsuits were filed against various defendants, including Chiquita Brands International and Chiquita Fresh North America (Chiquita), as well as current and former officers and directors of Chiquita Brands. The lawsuits fell into two categories: two shareholder derivative class action suits, filed in the District of Columbia and Ohio, and four class action suits under the Alien Tort Statute, filed in the District of Columbia, Florida, New Jersey and New York.

Class Action Court Decisions Multidistrict Litigation Uncategorized

New Employment-Related Class Action Lawsuits Rise As Labor Law Class Action Filings Again Top List Of Weekly Class Action Cases Filed In California State And Federal Courts

As a resource for 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 April 11 – 17, 2008, during which time 44 new class action lawsuits were filed.

Class Actions In The News Uncategorized

Class Action Defense Cases—In re Gadolinium: Judicial Panel On Multidistrict Litigation (MDL) Grants Plaintiff Motion To Centralize Class Action Litigation But Selects Northern District Of Ohio

Judicial Panel Grants Plaintiffs’ Request for Pretrial Coordination of 24 Class Action and Individual Lawsuits Pursuant to 28 U.S.C. § 1407, but Concludes that Northern District of Ohio, rather than Southern District of Ohio, was Appropriate Transferee Court Twenty-four class action lawsuits were filed in 13 different districts against various defendants, including General Electric, Bayer Healthcare, Tyco and Bracco Diagnostics, “arising out of the allegation that gadolinium based contrast dyes may cause nephrogenic systemic fibrosis in patients with impaired renal function.

Class Action Court Decisions Multidistrict Litigation Uncategorized

FCRA Class Action Defense Cases–Murray v. New Cingular: Seventh Circuit Limits Cole Opinion And Resolves Several Fair Credit Reporting Act (FCRA) Issues Of Importance To Class Action And Non-Class Action Cases Alike

Three Class Action Lawsuits Involving Six Issues Under the Federal Fair Credit Reporting Act (FCRA), Equally Important to Class Action and Non-Class Action Cases, Grouped Together for Resolution by Seventh Circuit

The Seventh Circuit yesterday issued an opinion that resolved various issues of interest under the federal Fair Credit Reporting Act (FCRA) presented by three lower court opinions – the putative class action styled Murray v. New Cingular Wireless Servs., Inc., out of the Northern District of Illinois, Case No. 04 CV 7666, the putative class action styled Bruce v. KeyBank N.A., out of the Northern District of Indiana, Case No. 2:05cv330, and the putative class action styled Price v. Capital One Bank (USA), N.A., out of the Eastern District of Wisconsin, Case No. 05-C-947 – explaining that the cases involve “issues that have arisen in numerous suits” and that each of the three cases “presents at least two issues, several of which recur in multiple appeals.” Murray v. New Cingular Wireless Servs., Inc., 523 F.3d 719 (7th Cir. 2008) [Slip Opn., at 2]. The Circuit Court organized its discussion around issues, rather than the facts of each appeal, id., so we summarize the opinion without providing an introductory factual summary of the cases. (For the convenience of the reader, the facts underlying the Murray class action may be found in lower court opinion at Murray v. New Cingular Wireless Servs., Inc., 432 F.Supp.2d 788 (N.D. Ill. 2006), the facts underlying the Bruce class action may be found in lower court opinion at_Bruce v. KeyBank N.A._, 2006 WL 3743749 (N.D. Ind. December 15, 2006), and the facts underlying the Price class action may be found in the lower court opinion at Price v. Capital One Bank (USA), N.A., 2007 WL 1521525 (E.D. Wis. May 22, 2007). Additionally, our summary of the district court decision in Murray may be found here.) The issues addressed and conclusions reached by the Seventh Circuit, of importance to class action and non-class action cases alike, are: (1) whether an offer of credit must be valuable to all or most recipients, id., concluding the offer must be “firm” but need not be ‘valuable,” id., at 5, (2) whether an offer of “free” merchandise can constitute an offer of “credit,” id., concluding that it may, id., at 6, (3) whether flyers must contain all material terms of the offer of credit, id., concluding that it need not, id., at 8, (4) whether the fact that the terms of the offer may vary means that the offer is not “firm,” id., concluding that an offer may be firm even though “some matters [are left] for future determination,” id., at 10, (5) whether 6-point type is “conspicuous,” id., concluding that it is not, id., at 12, (6) whether use of 6-point type is a “willful” violation of the FCRA, id., concluding that it would be reckless “today” to do so but was not so at the time the documents in question were prepared, id., at 15.

Must an offer of credit must be valuable to all or most recipients? In Cole v. U.S. Capital, Inc., 389 F.3d 719 (7th Cir. 2004), the Seventh Circuit held that if one offers a product (such as furniture) along with a “token line of credit,” then the FCRA requires that the credit offer have value to the consumer: “’From the consumer’s perspective, an offer of credit without value is the equivalent of an advertisement or solicitation [for the product rather than the loan].’” Murray, at 3 (quoting Cole, at 726-27). The Circuit Court noted that plaintiffs have twisted Cole to argue that it requires “even a simple offer of credit [to be] valuable enough to justify the use of consumers’ credit files.” Murray, at 3. These efforts must fail, the Seventh Circuit held, because the FCRA “calls for a firm offer of credit but not a valuable firm offer of credit.” Id., at 4 (citing 15 U.S.C. § 1681b(c)(1)(B)(i)). By contrast, “[t]he problem in Cole was how to disentangle an offer of merchandise from an offer of credit when they are made jointly.” Id. Cole thus does not apply to cases involving “pure offers of credit.” Id., at 5.

Class Action Court Decisions FCRA Class Actions Uncategorized

Class Action Defense Cases—In re Medtronic: Judicial Panel On Multidistrict Litigation (MDL) Grants Joint Plaintiffs’ Motion To Centralize Class Action Litigation And Selects District of Minnesota as Transferee Court

Judicial Panel Grants Plaintiffs’ Request for Pretrial Coordination of Class Action Lawsuits Pursuant to 28 U.S.C. § 1407, but Decides on District of Minnesota as Transferee Court from among the Nine Districts Recommended by Various Parties Twenty-seven individual and class action lawsuits, followed by 60 related “tag-along” individual and class action filings, were brought against Medtronic and others arising out of allegations that the implantation of Sprint Fidelis leads in defibrillators caused injuries.

Class Action Court Decisions Multidistrict Litigation Uncategorized

Coca-Cola Class Action Defense Cases–Coca-Cola v. Honorable W. Stephen Nixon: Missouri Supreme Court Reverses Order Granting Class Action Certification Holding That Definition Of Class Action Membership Was Overly Broad And Indefinite

Class Action Complaint Alleging Failure to Disclose Type of Sweetener used in Diet Drink Improperly Granted Class Action Treatment because Definition of Class Included Millions of Uninjured Individuals and Class Definition could not be Permissibly Limited Missouri Supreme Court Holds

Plaintiff filed a putative class action lawsuit in Missouri state court against Coca-Cola alleging that it “made affirmative misrepresentations and omitted material information regarding the types of artificial sweeteners used in fountain Diet Coke” in violation of state law; Specifically, the class action alleged that Coca-Cola “misled consumers into believing that fountain Diet Coke is the same product as bottled Diet Coke,” when in point of fact the fountain Diet Coke is sweetened with aspartame and saccharin while bottled Diet Coke is sweetened only with aspartame. State ex rel. The Coca-Cola Company v. The Honorable W. Stephen Nixon, ___ S.W.3d ___ (Mo. April 15, 2008) [Slip Opn., at 3]. According to the allegations underlying the class action, plaintiff and other putative class members would not have purchased the fountain drink if they had known that it was made with saccharin. _Id._ Plaintiff filed a motion requesting that the trial court certify the litigation as a class action; she proposed to define the class as “All individuals who purchased for consumption and not resale fountain diet Coke in the State of Missouri after March 24, 1999 through the date of this order.” _Id._ Defense attorneys opposed the motion on the grounds that the proposed class was overly broad and indefinite, _id._ Despite the fact that plaintiff provided no estimate of the size of the class, the trial court accepted the proposed definition and granted class action treatment. _Id._ Ultimately, defense attorneys filed a petition for writ of prohibition with the Missouri Supreme Court, arguing that the trial court abused its discretion in granting class action certification; the Court reversed. _Id._

After rejecting plaintiff’s claim that interlocutory relief should not be considered, see Coca-Cola, at 3-4, and after noting that the standard of review was abuse of discretion, id., at 4, the Missouri Supreme Court turned to the merits. It noted that “the underlying question in any class action certification is whether the class action device provides the most efficient and just method to resolve the controversy at hand, all things considered,” id., at 4, and that implicit in the statutory scheme governing certification of class actions is the requirement that the class definition be proper, id., at 4-5 (citations omitted). In fact, the Supreme Court stated that the first task facing a court in ruling on a motion for class certification is “‘to determine whether the class exists and is capable of legal definition.’” Id., at 5 (citation omitted). The Court explained at page 5, “A class definition that encompasses more than a relatively small number of uninjured putative members is overly broad and improper.” (Citations omitted.) And while it was permissible to certify a class action such that the putative class “initially include[s] members who could not have brought the underlying action in their own name,” the definition ultimately must be capable of being modified so as to “remove the uninjured putative members.” Id. (citations omitted). This requires that only “a relatively small number of uninjured putative members remain,” because the trial court may then “easily resolve individual questions after the common questions have been answered.” Id. If it will not be possible to modify the class definition in this manner, then “the putative class is impermissibly overbroad.” Id.

Certification of Class Actions Class Action Court Decisions Uncategorized

PSLRA Class Action Defense Cases–Grillo v. Tempur-Pedic: Kentucky Federal Court Dismisses Securities Class Action Complaint With Prejudice Finding Class Action Allegations Failed To Plead Scienter With Specificity Required Under PSLRA

Class Action Alleging Securities Violations Failed to Plead “Strong Inference of Scienter” as Required by the Private Securities Litigation Reform Act (PSLRA) Warranting Dismissal of Class Action With Prejudice Kentucky Federal Court Holds

Plaintiffs filed a class action lawsuit against Tempur-Pedic and others alleging securities laws violations arising out of allegedly false and misleading statements regarding the company’s financial situation as part of a scheme to drive up the stock price thereby allowing insiders “to sell more than $246 million worth of stock at an inflated price.” Grillo v. Tempur-Pedic Int’l, Inc., ___ F.Supp.2d ___ (E.D. Ky. March 28, 2008) [Slip Opn, at 1-2]. In essence, the class action alleged that after Tempur-Pedic announced a 6% price increase in its mattress lines in January 2005, it “caused a frenzy of retailers to stock up on their inventory needs before the price increase occurred.” _Id._, at 5. According to plaintiffs, this caused a “huge amount” of the company’s revenue to be “pulled forward,” but Tempur-Pedic denied this when asked by Goldman Sachs, _id._ The company reported record earnings and represented to the public that its growth could be “sustained,” when (according to the class action allegations) the company’s retail sales actually were “volatile and irregular.” _Id._, at 5-6. Plaintiffs’ class action complaint followed a September 19, 2005 press release that lowered guidance for the year, causing the stock to plummet 28% in a single day. _Id._, at 9. The complaint also detailed allegedly improper insider trading, _see id._, at 10-11. The class action alleged violations of Sections 10(b), 20(a) and 20A of the Securities and Exchange Act of 1934, and Rule 10b-5, _id._, at 2. Defense attorneys moved to dismiss the class action on the grounds that it failed to plead the specificity required under the Private Securities Litigation Reform Act (PSLRA). _Id._, at 2-3. The district court granted the defense motion and dismissed the class action complaint.

The federal court began with the now well known Supreme Court holding that, under the PSLRA, “‘a complaint will survive…only if a reasonable person would deem the inference of scienter cogent and at least as compelling as any opposing inference one could draw from the facts alleged.’” Grillo, at 17 (citation omitted). Plaintiffs’ mere allegation that defendants had access to internal financial reports and that those reports demonstrate the inaccuracy of the company’s financial representations was held to be inadequate, as they failed to provide any of those reports to the court or to “cite any of their specific details.” Id., at 18-19. Under the district court’s analysis, the allegations underlying the class action failed to meet the requisite level of scienter. For example, the mere fact that certain defendants held high positions within the company, or that they sold stock, were insufficient, as “[holding] high positions in the Company…is not enough to establish scienter,” id., at 19-20, and plaintiffs failed to demonstrate that the stock trades were “unusual or suspicious,” id., at 23-24. (The district court provided a detailed discussion of the stock trade issue. See id., at 24-27.) At bottom, the court concluded that the “strong inference” of scienter had not been shown.

Class Action Court Decisions PSLRA/SLUSA Class Actions Uncategorized

Wells Fargo UCL Class Action Defense Cases–Puentes v. Wells Fargo: California Court Affirms Summary Judgment In Favor Of Wells Fargo In UCL Class Action Holding Charging Monthly (Rather Than Daily) Interest On Loans Was Not Unlawful

Trial Court Properly Granted Defense Summary Judgment Motion in Class Action Alleging Bank Violated California’s Unfair Competition Law (UCL) by Calculating Interest on a Monthly rather than Daily Basis because Federal Law Permits this Method, it is Consistent with Industry Conduct and it is Required for Sale of Loans on the Secondary Market California Court Holds

Plaintiffs filed a class action against their mortgage lender, Wells Fargo, alleging violations of California’s unfair competition law (UCL) based on the fact that it failed to charge monthly interest based on the number of days in the month, and failed to disclose that it treated each month as one-twelfth of the year, regardless of the number of days in the month. Puentes v. Wells Fargo Home Mortgage, Inc., ___ Cal.App.4th ___, 72 Cal.Rptr.3d 903, 906 (Cal.App. 2008). The class action complaint alleged that plaintiffs obtained a 30-year fixed-rate mortgage from Wells Fargo, evidenced by a promissory note on a multi-state form approved by Fannie Mae and Freddie Mac; the promissory note provided for equal monthly payments and stated, “Interest will be charged on unpaid principal until the full amount of Principal has been paid. I will pay interest at a yearly rate of 6.500 [percent].” _Id._ The class action further alleged that plaintiffs paid off the loan only seven months later, but, that “[i]n determining the amount of interest owed to retire the obligation, Wells Fargo treated February, as it did for each of the previous full months of the loan, as one-twelfth of a year, or approximately 30.4 days.” _Id._ After the trial court granted plaintiffs motion for class action treatment of the lawsuit, defense attorneys moved for summary judgment arguing that “[the] interest calculation was consistent with the terms of the note, federal regulations and the uniform nationwide practice of the mortgage industry, and thus as a matter of law cannot constitute an unfair business practice under the UCL.” _Id._, at 907. The trial court granted the motion, and the Court of Appeal affirmed.

The multi-state form used by Wells Fargo had been approved by the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Company (Freddie Mac). Puentes, at 906. In addition to the disclosures in the promissory note, the Truth in Lending Act (TILA) disclosure stated “[i]f you pay off your loan early you will not receive a refund of the part of the finance charge that you have already paid.” Id. Nonetheless, plaintiffs alleged that they and the putative class members “paid Wells Fargo ‘interest for non-existent days … in the year of early pay off of their residential mortgage loan.’” Id., at 906-07. Based on their view that the bank’s formulation “resulted in charges for 182.5 days during the five full months of the loan instead of the actual 181 days,” they alleged that Wells Fargo “overcharged them $71.98 in interest for days not actually in the loan period, thereby breaching the promissory note by imposing a yearly interest rate of approximately 6.549 percent.” Id., at 907. The trial court granted the defense motion for summary judgment based on federal preemption, and on its finding that the bank’s interest calculation was reasonable under the terms of the note and “comported with industry standards and was not an unfair business practice.” Id.

Class Action Court Decisions Uncategorized

Labor Law Class Action Filings Drop But Maintain Grip On Top Spot Of Weekly Class Action Filings 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