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

To assist class action defense attorneys anticipate the cases against which they may 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

Attorney Fees Class Action Defense Cases-Harrington v. Payroll Entertainment: California State Court Holds Plaintiff Lawyers Who Filed Labor Law Class Action Deserved Only $500 In Fees Because Class Action Complaint Was Not Viable

Lawyers who Filed Putative Class Action Alleging State Labor Law Claims but Failed to Secure Class Action Certification were Entitled to Reasonable Attorney Fees as a Matter of Right under Settlement of Individual Claim Declaring Plaintiff “Prevailing Party” but Reasonable Fee Award for Filing a Frivolous Class Action Based on a $44 Overtime Claim Warranted only $500 in Attorney Fes California State Court Holds

Plaintiff, an off-duty police officer, filed a class action against Payroll Entertainment Services alleging violations of California’s labor laws; specifically, the class action alleged that Payroll would hire retired and off-duty police officers to provide “traffic and crowd control services,” and that Payroll underpaid him after he worked a single 14-hour day. Harrington v. Payroll Entertainment Servs., Inc., ___ Cal.App.4th ___, 72 Cal.Rptr.3d 922 (Cal.App. 2008) [Slip Opn., at 2]. Plaintiff alleged to have filed the class action complaint on behalf of all retired and off-duty police officers who had worked for Payroll Entertainment, _id._ In response to plaintiff’s motion to certify the litigation as a class action, defense attorneys acknowledged the error in calculating plaintiff’s pay, but explained that Payroll Entertainment “had based its wage calculations on a memorandum issued by the Los Angeles Police Protective League without realizing that the formula set out in the memo violated California’s overtime wage laws,” _id._ The defense argued further that class action treatment was unnecessary because it had hired only 16 officers for the event in question and that the amount at stake was only $714. _Id._ The trial court denied the class action certification motion; specifically, the trial court found that plaintiff had failed to establish numerosity, typicality or superiority to support class action treatment. _Id._, at 4. The litigation proceeded as to plaintiff’s individual claim, settling shortly before trial for $10,500. _Id._, at 2-3. Plaintiff’s lawyers sought attorney fees but the trial court denied the motion, _id._, at 3. Plaintiff appealed. The appellate court reversed but awarded plaintiff’s lawyers only $500.

As part of the settlement, in addition to its monetary payment, Payroll Entertainment agreed that plaintiff was a “prevailing party” for purposes of recovering attorney fees and that the trial court would determine the amount of fees that were reasonably incurred by plaintiff. Harrington, at 3. Plaintiff’s lawyers filed a motion requesting $46,000 in attorney fees; in opposition, defense attorneys argued that plaintiff should not be awarded any attorney fees. Id. The trial court’s rationale is set forth in detail at pages 3 through 6 of the appellate court’s slip opinion. In pertinent part, the trial court found that plaintiff had retained counsel and filed suit to recover $44, id., at 5. The Court of Appeal quoted the following language from the trial court’s order at page 5:

Class Action Court Decisions Employment Law Class Actions Uncategorized

Labor Law Class Action Defense Cases-McClain v. Lufkin: Fifth Circuit Issues Mixed Opinion On Class Action Appeal Following Judgment In Favor Of Plaintiff On Title VII/§ 1981 Discrimination Class Action Complaint

District Court Judgment on Discrimination Class Action Complaint Required Reversal and Remand as to Certain Issues Necessitating Remand of Class Action to District Court for Further Proceedings Fifth Circuit Holds

Plaintiffs filed a class action against their employer, Lufkin Industries, alleging violations of Title VII and 42 U.S.C. § 1981 based on the allegation that Lufkin’s “practice of delegating subjective decision-making authority to its managers with respect to initial assignments and promotions disparately affected them.” McClain v. Lufkin Industries, Inc., ___ F.3d ___ (5th Cir. February 29, 2008) [Slip Opn., at 2]. Among the many named plaintiffs in the class action complaint, only two had filed charges with the EEOC and received right-to-sue letters, _id._ The class action involved all four of Lufkin’s production divisions, and the company has approximately 1,500 hourly and salaried workers. _Id._ The district court granted plaintiffs’ request to certify the litigation as a class action with respect to the disparate-impact claims, but the court refused to give class action treatment to plaintiffs’ disparate-treatment claims. _Id._, at 3. Following a bench trial, at which “the court strictly limited each party to twenty hours for the presentation of its case,” the court found in favor of the plaintiffs and awarded $3.4 million in back pay, together with injunctive relief and attorney fees. _Id._ Both sides appealed: plaintiffs argued the court should have granted class action treatment to the disparate-treatment claims, and defense attorneys argued (1) plaintiffs failed to exhaust administrative remedies, (2) lacked standing to represent the class, and (3) the district court committed various errors in finding for plaintiffs and calculating damages. _Id._, at 4. The Fifth Circuit issued an opinion “unfortunately inconclusive of the litigation,” _id._, at 1.

The Fifth Circuit addressed first the defense claim that plaintiffs failed to exhaust their EEOC remedies, which the Circuit Court characterized as the “mainstay of proper enforcement of Title VII remedies.” McClain, at 4. The defense argued that the class action’s disparate-impact claims concerning its hiring and promotional practices, id., at 4-5. Relying on Pacheco v. Mineta, 448 F.3d 783 (5th Cir.), cert. denied, 127 S.Ct. 299 (2006), the Circuit Court concluded that the January 1995 letter from plaintiff McClain to the EEOC (relied on by the district court in finding that plaintiffs had exhausted their administrative remedies) complained only about demotion and was thus insufficient to support the hiring and promotion class action claims. See McClain, at 5-8. The Court concluded, however, that plaintiff Thomas’s EEOC charge satisfied the exhaustion requirement, id., at 8-9. However, the Fifth Circuit agreed with defense attorneys that neither McClain nor Thomas adequately complained about Lufkin’s “Foundry” division, and therefore vacated the judgment insofar as it affected the Foundry division, id., at 9. Indeed, the Court noted that “considerable doubt” existed as to whether either of these individuals even had standing to represent a class consisting of Foundry division workers. Id., at 9 n.2.

Class Action Court Decisions Employment Law Class Actions Uncategorized

FDCPA Class Action Defense Cases-Jacobson v. Healthcare Financial: Second Circuit Reverses Summary Judgment In Favor Of Defense In FDCPA Class Action And Vacates Award Of Attorney Fees And Costs Against Class Action Plaintiff

As Matter of First Impression, FDCPA Permits Consumers to Notify Debt Collectors of Dispute Within 30 Days of Receiving Debt Collectors’ Letter Necessitating Reversal of Summary Judgment in Favor of Defense in FDCPA Class Action Second Circuit Holds

Plaintiff filed a putative nationwide class action complaint against Healthcare Financial Services (HFS), a “debt collector” within the meaning of the federal Fair Debt Collection Practices Act (FDCPA), alleging that a debt collection letter he received from HFS violated the FDCPA by failing to advise debtors of their right to dispute the validity of the debt. Jacobson v. Healthcare Fin. Servs., Inc., 516 F.3d 85, 2008 WL 383060, *1 (2d Cir. 2008). The class action complaint did not allege that plaintiff suffered any actual loss, limiting recover to statutory damages and attorney fees. Id. Defense attorneys moved to dismiss the class action, or in alternative sought summary judgment, on the ground that the debt collection letter did not violate the FDCPA; the defense also sought attorney fees from plaintiff, arguing that he had filed the class action “in bad faith and for the purpose of harassment,” see 15 U.S.C. § 1692k(a)(3). Id. The district court granted summary judgment in favor of HFS and awarded HFS attorney fees and costs, id. The Second Circuit affirmed in part and reversed in part.

The FDCPA provision at issue provides that a debtor has the right to dispute a debt and seek verification of the validity of the debt by notifying the debt collector of the right to dispute the debt. Jacobson, at *2. The Second Circuit recognized that it must view the issue from the perspective of the “least sophisticated consumer,” see id., at *3 (citing Clomon v. Jackson, 988 F.2d 1314, 1318 (2d Cir. 1993)), but observed also that “the objective test we apply [also] protects debt collectors from unreasonable constructions of their communications,” that the Second Circuit has “carefully preserved the concept of reasonableness,” and that “the FDCPA does not aid plaintiffs whose claims are based on ‘bizarre or idiosyncratic interpretations of collection notices.’” Id. (citations omitted). So viewed, the Circuit Court held that the letter sent by HFS clearly advised debtors of their right to dispute the validity of the alleged debt.

Class Action Court Decisions FDCPA Class Actions Uncategorized

BP Class Action Defense Cases-Rees v. BP America: Oklahoma State Court Affirms Dismissal Of Class Action Complaint Holding Plaintiff’s Class Action Barred Because He Was Absent Class Member Of Prior Class Action

Trial Court Order Denying Class Action Certification Barred Subsequent Class Action Filed by Absent Class Member of Prior Class Action Oklahoma State Court Holds, Otherwise “Plaintiffs [could] Continue Filing Broad Class Actions…Until a Trial Court Grants Class Certification, Rendering Ineffective the Previous Denials of Other Courts”

Plaintiff filed a putative class action in Oklahoma state court (LeFlore County) against BP America alleging “BP underpaid royalties by wrongfully charging marketing fees and costs of making the gas marketable, including costs for gathering, treatment, compression, and dehydration, to royalty owners.” Rees v. BP America Prod. Co., ___ F. 3d ___ (Okla.App. February 22, 2008) [Slip Opn., at 2]. The complaint purported to be a class action, brought on behalf of “all similarly situated persons and entities who have received royalty payments from [BP] on Gas Substances produced from the Red Oak-Norris Field.” _Id._ Defense attorneys moved to dismiss the class action on the ground that two other class actions were pending against BP alleging underpaid royalties (_Watts_ and _Chockley_); alternatively, defense attorneys requested that the _Rees_ class action litigation be stayed or transferred to the county in which the _Watts_ class action was pending (Pittsburg County). _Id._ The basis for the defense motion was that the _Watts_ class action purported to represent a class of royalty owners in several counties, including LeFlore, _id._, at 2-3. The _Chockley_ class action also was defined broadly enough to arguably include plaintiff’s claims within its scope, _id._, at 3.

The plaintiffs in the Watts class action had moved the court to certify that litigation as a class action, but the trial court denied the motion. Rees, at 3. The Oklahoma Court of Civil Appeals affirmed the denial of class action treatment, and the Oklahoma Supreme Court denied certiorari. Id., at 3-4. The trial court in the Rees class action granted a stay, over plaintiff’s objection, pending the appellate court decision in Watts, id., at 3, and then granted BP’s motion to dismiss the Rees complaint, id., at 4. Specifically, “the trial court applied the principle of issue preclusion in ruling Rees, as an unnamed member of the proposed class in Watts, was bound by the decision in Watts denying class action certification.” Id. (citing In re Bridgestone/Firestone, Inc., Tires Products Liab. Litig., 333 F.3d 763 (7th Cir. 2003)).

Certification of Class Actions Class Action Court Decisions Uncategorized

CAFA Removal Class Action Defense Cases-Alicea v. Circuit City: New York Federal Court Awards Plaintiff Attorney Fees Following Remand Of Class Action To State Court Holding Removal Jurisdiction Did Not Reasonably Exist Under Class Action Fairness Act

Defense Removal of Class Action to New York Federal Court under CAFA (Class Action Fairness Act of 2005) was not Objectively Reasonable thus Warranting Award of Attorney Fees to Plaintiff Following Remand of Class Action to State Court

Plaintiff filed a putative class action lawsuit in New York state court against Circuit City. Alicea v. Circuit City Stores, Inc., 534 F.Supp.2d 432, 2008 WL 344695, *1 (S.D.N.Y. 2008). The class action complaint, a copy of which may be found here, alleged that Circuit City’s “return policy and imposition of a ‘restocking fee’ in the amount of 15% of the purchase price of certain returned items” violated New York General Business Law § 349. Defense attorneys removed the class action to federal court on the ground that removal jurisdiction existed under the Class Action Fairness Act of 2005 (CAFA); plaintiff’s lawyer moved to remand the class action complaint to state court arguing that Circuit City had failed to establish that the $5 million amount-in-controversy requirement had been met for CAFA removal jurisdiction. Alicea, at *1. Plaintiff also sought attorney fees under 28 U.S.C. § 1447(c), id. The district court granted the motion to remand the class action to state court, and in the order summarized here, awarded plaintiff attorney fees under § 1447(c). (The order remanding the class action to state court may be found here.)

As a threshold matter, the district court noted that “the standard governing the application of section 1447(c)…is whether the removing party ‘lacked an objectively reasonable basis for seeking removal.’” Alicea, at *1 (quoting Martin v. Franklin Capital Corp., 546 U.S. 132, 141 (2005)). The federal court also “‘recognize[d] the desire to deter removals sought for the purpose of prolonging litigation and imposing costs on the opposing party, while not undermining Congress’ basic decision to afford defendants a right to remove as a general matter, when the statutory criteria are satisfied.’” Id. (quoting Martin, at 140). Here, defense attorneys argued that a reasonable basis existed for removing the class action under CAFA because “(1) it was ‘unclear to defendant whether plaintiff was seeking treble damages’…, (2) ‘at the time of removal, it objectively appeared that plaintiff’s claims were not limited to New York State consumers’…, and (3) ‘the costs of compliance would extend in perpetuity,’ and thus ‘CAFA’s jurisdictional limits would have been easily met.’…” Id. The district court rejected each of these arguments.

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

Class Action Lawsuit Filings Rise But Labor Law Class Action Cases Again Hold Top Spot In Weekly Class Action Filings 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 February 22 – 28, 2008, during which time 29 new class action lawsuits were filed.

Class Actions In The News Uncategorized

Lead-Tainted Toys Class Action Defense Cases-In re Mattel: Judicial Panel On Multidistrict Litigation (MDL) Grants Joint Defense/Plaintiff Motion To Centralize Class Action Litigation In Central District of California

Judicial Panel Grants Request for Pretrial Coordination of Class Action Lawsuits Pursuant to 28 U.S.C. § 1407 and Transfers Class Actions to Central District of California Eleven (11) class action lawsuits (5 in California, 2 in New York and Pennsylvania, and 1 in Indiana and South Carolina) against various defendants, including Mattel and Fisher-Price, arising out of the “the production of defendants’ toys in China with surface paints that allegedly contain elevated levels of lead and the sale of those toys in the United States.

Class Action Court Decisions Multidistrict Litigation Uncategorized

Arbitration Class Action Defense Cases-Lowden v. T-Mobile: Ninth Circuit Affirms District Court Denial Of Defense Motion To Compel Arbitration Of Class Action Finding Class Action Waiver In Arbitration Agreements Unconscionable And Unenforceable

Class Action Waiver Unconscionable Under Washington State Law and Federal Arbitration Act (FAA) so District Court Properly Denied Defense Motion to Dismiss Class Action Complaint and Order Individual Claims to Arbitration Ninth Circuit Holds

Plaintiffs filed a class action in Washington state court against their cellular telephone service provider, T-Mobile, “alleging that the service provider had improperly charged them for certain fees beyond the advertised price of service, charged them for calls during a billing period other than that in which the calls were made, and charged them for roaming and other services that should have been free.” Lowden v. T-Mobile USA, Inc., 512 F. 3d 1213, 1215 (9th Cir. 2008). The service agreements underlying the class action plaintiffs’ claims contained mandatory arbitration provisions that barred class action litigation, id. Defense attorneys removed the class action to federal court, and then moved the federal court to compel arbitration of the claims on an individual rather than class action basis. Id., at 1214. The district court denied the motion, concluding that the arbitration clauses were unenforceable because the class action waivers and the limitation on punitive damages rendered them substantively unconscionable, id., at 1217. Defense attorneys appealed and the Ninth Circuit affirmed.

The service agreements signed by the class action plaintiffs stated, directly above the signature line, that any disputes would be submitted to mandatory arbitration. Lowden, at 1215-16. The specific language in the two service agreements underlying the class action complaint differed slightly, but the differences did not impact the district court’s decision: each arbitration clause precluded class action litigation. Id. In ruling on T-Mobile’s motion to compel arbitration, the district court concluded that the arbitration provisions were not procedurally unconscionable, but “held that the prohibition on class relief and the limitation on punitive damages, found in both agreements, were each substantively unconscionable.” id., at 1217. The Ninth Circuit defined the issues on appeal as whether T-Mobile’s arbitration provisions “are enforceable under Washington state law and, if not, whether the state law is preempted by the Federal Arbitration Act (‘FAA’), 9 U.S.C. §§ 1-16.” Lowden, at 1214. It concluded that, in light of the Washington State’s Supreme Court opinion in Scott v. Cingular Wireless, 161 P.3d 1000 (Wash. 2007), “T-Mobile’s arbitration provision is substantively unconscionable and unenforceable under Washington state law,” and that the FAA did not preempt Washington state law. Lowden, at 1214-15.

Arbitration Class Action Court Decisions Uncategorized

Class Action Defense Cases-Thorpe v. Abbott Labs: California Federal Court Denies Defense Motion To Dismiss Class Action Finding California State Law Class Action Claims Were Not Incompatible With Illinois FLSA Class Action

Defense Motion to Dismiss California Class Action Alleging Misclassification of Employees and Seeking Damages under California State Law Fails because Class Action was not Incompatible with Illinois Class Action by Same Plaintiff Lawyer Alleging Misclassification of Same Group of Employees and Seeking Damages under Federal Fair Labor Standards Act (FLSA) California Federal Court Holds

Plaintiff filed a putative class action against Abbott Laboratories in California state court on September 25, 2007, and defense attorneys removed the class action complaint to federal court on November 7, 2007, arguing that removal jurisdiction existed under the Class Action Fairness Act of 2005 (CAFA). Thorpe v. Abbott Laboratories, Inc., ___ F.Supp.2d ___ (N.D. Cal. February 12, 2008) [Slip Opn., at 1]. The class action complaint stated that plaintiff formerly had been employed by Abbott as a Pharmaceutical Representative, and alleged that improperly classified him and other Pharmaceutical Representatives as “exempt” employees and that he was required to work more than 8 hours per day or 40 hours per week without overtime, and was denied meal and rest periods. _Id._, at 2. The class action further alleged that Abbott failed to provide accurate wage statements as required by California law. _Id._ Defense attorneys moved to dismiss the class action or, in the alternative, to strike the class action allegations, _id._, at 1-2. The federal court denied the motion.

The defense argued that the class action complaint must be dismissed, or the class action allegations stricken, “because plaintiff’s claims for unpaid overtime for Pharmaceutical Representatives at Abbott are based on the same facts and circumstances as those alleged in a parallel federal action, Jirak v. Abbott Laboratories, et al., 07-03636 (‘Jirak action’), filed by plaintiff’s counsel and currently pending in the District Court in the Northern District of Illinois.” Thorpe, at 2. Defense attorneys argued that even though Thorpe was not a plaintiff in the Jirak action, “the present complaint is an attempt by plaintiff’s counsel to circumvent the requirements for maintaining a class action under the Fair Labor Standards Act (‘FLSA’)… by filing two class actions based on the same circumstances, namely that Abbott mis-classified Pharmaceutical Representatives as exempt employees.” Id., at 2-3. In essence, the defense argued “the opt-out class action that plaintiff seeks to maintain for his claims under California law is incompatible with the FLSA opt-in class action proceeding concurrently in the Northern District of Illinois.” Id., at 3.

Class Action Court Decisions Employment Law Class Actions Uncategorized