Class Action Defense Cases-In re Schering-Plough: Judicial Panel On Multidistrict Litigation (MDL) Grants Plaintiff’s Unopposed Motion To Centralize Class Action Litigation And Selects District of New Jersey As Transferee Court

Judicial Panel Grants Request, Unopposed by Defense, for Pretrial Coordination of Class Action Lawsuits Pursuant to 28 U.S.C. § 1407 but Rejects Plaintiff’s Request to Transfer Class Actions to District of Delaware Five class action lawsuits were filed in three federal district courts (two in Massachusetts and New Jersey, and one in Florida) against Schering-Plough alleging that it “improperly engaged in the promotion of certain prescription medications for off-label purposes.” In re Schering Marketing & Sales Prac.

Class Action Court Decisions Multidistrict Litigation Uncategorized

Comcast Class Action Defense Cases-Anderson v. Comcast: First Circuit Upholds Comcast Arbitration Clause But Severs Class Action Waiver and Holds Severability of Class Action Waiver Saves Arbitration Agreement from Unconscionability Claim

First Circuit Leaves Validity of Class Action Waiver in Arbitration Clause to Arbitrator, Holds Bar on Multiple Damages Invalid and Severs from Arbitration Agreement, Holds Bar on Recovery of Attorney Fees Invalid and Severs from Agreement, and Invalidates One-Year Limitations Period on Claims Against Comcast and Severs from Agreement

Plaintiff filed a putative class action lawsuit in Massachusetts state court against his telecommunications provider, Comcast, for violations of the state’s unfair business practices statute and other tort claims based on the allegation that it charged customers a monthly to lease a cable converter box and remote control for television service even if the customer already owned a cable-ready television. Anderson v. Comcast Corp., 500 F.3d 66, 68(1st Cir. 2007). Defense attorneys removed the class action to federal court based on diversity jurisdiction, and then moved to compel arbitration under an arbitration clause the prohibited class actions as well as “multiple or punitive damages,” id., at 69. Among the arbitration provisions central to the appeal were the following: (1) a class action waiver provision, (2) a requirement that any claims against Comcast be brought within one year, (3) a requirement that consumers pay their own costs of arbitration, including attorney’s fees, (4) a bar on any award in arbitration of multiple or punitive damages, and (5) a severance clause. Id. The district court agreed with defense attorneys that plaintiff must arbitrate his claims but held that he could pursue a class action in arbitration, and while the district court granted the motion to compel arbitration and dismissed the class action complaint, id., at 69-70, it severed several other portions of the arbitration agreement, such as the requirement that each side bear its own costs – including attorney and expert fees, id., at 69 n.5. The First Circuit largely upheld the district court’s order, holding in part that the validity of the class action waiver provision must be addressed first by the arbitrator.

Plaintiff’s class action complaint alleged that Comcast violated the Massachusetts Consumer Protection Act and various common law torts. Anderson, at 68. The class action also sought treble damages, punitive damages and attorney fees, id., at 69. Defense attorneys moved to compel arbitration under provisions of its standard agreement with subscribers entitled, “Notice to Customers Regarding Policies, Complaint Procedures & Dispute Resolution.” Id., at 68 n.1. The district court applied the First Circuit’s recent decision in Kristian v. Comcast, Corp., 446 F.3d 25 (1st Cir. 2006) – summarizedhere – and granted the motion to compel, but “only after severing provisions in the arbitration agreement prohibiting attorney’s fees, double or treble damages and a class action remedy in the arbitral forum.” Anderson, at 68. The district court also ruled that “the arbitrator will have the power to determine the validity and applicability of the agreement’s one-year statute of limitations.” Id. Both plaintiff and defense appealed the district court’s ruling.

The First Circuit began its analysis by observing that it considered the appeal “against the backdrop of a strong pro-arbitration policy expressed by Congress and repeatedly upheld by the courts.” Anderson, at 70. With respect to the class action bar, the Circuit Court held that there was no conflict between Massachusetts state law and the class action waiver provision, id., at 71. The First Circuit distinguished its holding in Kristian, which invalidated a Comcast class action wavier in an arbitration clause, because it found a conflict between such a waiver and the “nature and purposes of antitrust law”; here, by contrast, the class action bar, by its terms, applies “unless your state’s laws provide otherwise,” and the consumer law statute in question expressly permits class action lawsuits be filed to enforce it. Id., at 72. The Court did not hold that the exception to class action litigation applied, however, concluding that the question of arbitrability must be addressed first by the arbitrator, id.

Arbitration Class Action Court Decisions Uncategorized

Securities Class Action Plaintiff Lawyer William Lerach Admits Conspiring To Obstruct Justice And Enters Guilty Plea In Federal Court

Molly Selvin of the Los Angeles Times reported yesterday that securities class action plaintiff lawyer William Lerach has pleaded guilty “to a criminal charge that could send him to prison for up to two years,” but only if the federal court agrees to the terms of his plea bargain, which includes a provision insulating his San Diego class action law firm from criminal prosecution. While he was not named in the federal indictment handed down last year against plaintiff class action law firm Milberg Weiss and two of its then-named partners, Steven Schulman and David Bershad, Ms.

Class Actions In The News Uncategorized

MARK YOUR CALENDARS – CLASS ACTION CONFERENCE ON CLASS ACTION FAIRNESS ACT OF 2005 (CAFA) COMING TO PHILADELPHIA

The University of Pennsylvania Law Review 2007-2008 Symposium will be held on November 30 and December 1, 2007, and will focus on the Class Action Fairness Act of 2005 (CAFA). The Symposium promises to address six different perspectives of the Class Action Fairness Act: “history, jurisdictional policy, federalism, regulatory policy, impact on the federal courts, and impact on the legal profession.” The conference will be held at the University of Pennsylvania Law School.

Class Actions In The News Uncategorized

SLUSA Class Action Defense Cases-U.S. Mortgage v. Saxton: Ninth Circuit Affirms District Court Dismissal Of Class Action Finding Securities Fraud Class Action Complaint Fell Within Scope Of SLUSA

SLUSA Preemption does not Require Class Action Allegation of Purchase or Sale of Listed Security, and Securities Class Action was Properly Removed to Federal Court and District Court Properly Dismissed Class Action Complaint as Barred by SLUSA Ninth Circuit Holds

Plaintiffs-investors filed a securities fraud class action lawsuit against Nevada-based real estate development company Saxton and its Chairman, President and CEO, as well as against other defendants, alleging that they placed false financial information in Saxton’s public reports in violation of Arizona state laws. U.S. Mortgage, Inc. v. Saxton, 494 F.3d 833, 836 (9th Cir. 2007). Defense attorneys removed the class action complaint to federal court, arguing that it fell within the scope of the Securities Litigation Uniform Standards Act of 1998 (SLUSA), and the district court then granted a defense motion to dismiss the class action on the grounds that the class action complaint failed to “state a claim upon which relief can be granted in conformity with SLUSA.” Id. The Ninth Circuit affirmed both removal jurisdiction over the class action and dismissal of the class action complaint based on SLUSA preemption.

Saxton’s stock traded on the NASDAQ market. Saxton, at 836. The company was “engaged in several real estate development projects that it financed, in part, with loans from individuals, trusts, and commercial investors,” id. This putative class action was brought on behalf of hundreds of investors and “arise out of twelve separate loan investments that Saxton solicited from various members of the plaintiff class to finance several of its projects and activities,” id. The class action allegations common to each of twelve loan transactions is the lenders would not have done business with Saxton had they known its true financial condition. See id., at 836-39. In 2000, Saxton restated its financial results to “correct a miscalculation of certain interest expenses” that had “caused Saxton to overstate its earnings in several public filings and accompanying press releases in 1998 and 1999.” Id., at 839. As was to be expected, a securities fraud class action was filed in federal court against Saxton and others alleging that they misrepresented the company’s finances in order to artificially inflate the stock price, that class members purchased Saxton stock in reliance on the financial reports, and that Saxton “used its artificially-inflated shares as payment for its acquisition of several entities,” id. The federal court dismissed the class action complaint based on the Private Securities Litigation Reform Act of 1995 (PSLRA), and the Ninth Circuit affirmed. See id.

Class Action Court Decisions PSLRA/SLUSA Class Actions Uncategorized

Plaintiff Class Action Lawyer William Lerach Pleads Guilty To Federal Conspiracy Charge As Fallout From Criminal Indictment Against Class Action Law Firm Milberg Weiss Continues

Michael Parrish of the New York Times reports that class action plaintiff lawyer William Lerach has pleaded guilty to conspiracy to obstruct justice “for concealing his secret, illegal payments to Dr. Steven G. Cooperman, who was a plaintiff in the class-action lawsuits for which [the Milberg Weiss law firm] became famous.” Dr. Cooperman previously admitted to “participating in the scheme.” This represents but the latest in a series of guilty pleas obtained by the federal government following the criminal indictment of the plaintiff class action law firm Milberg Weiss, two of its named partners and others.

Class Actions In The News Uncategorized

Arbitration Class Action Defense Cases-Dale v. Comcast: Eleventh Circuit Holds Class Action Arbitration Waiver Unenforceable And Reinstates Class Action By Subscribers Against Comcast

Class Action Waiver in Arbitration Provision Substantively Unconscionable “to the Extent it Prohibits the Subscribers from Bringing a Class Action Alleging State Law Claims” and Entire Arbitration Clause Fails Because Class Action Waiver “Cannot be Severed from the Agreement” Eleventh Circuit Holds

Plaintiffs filed a class action against their cable television service provider, Comcast, in Georgia state court alleging that it improperly passed through to customers franchise fees based on estimated revenue instead of the actual franchise fees paid local governments as allowed by the Cable Communications Policy Act of 1984, and that these estimates resulted in overcharges to subscribers. Dale v. Comcast Corp., 498 F.3d 1216, 1217-18 (11th Cir. 2007). Defense attorneys removed the class action to federal court, and then moved to compel arbitration and dismiss the class action complaint based on the mandatory arbitration clause (that included a class action waiver) contained in the subscriber agreements, id., at 1218. The “Mandatory & Binding Arbitration” provision permits either party to elect arbitration and “contains a class action waiver clause prohibiting subscribers from bringing claims on a class action or consolidated basis,” expressly providing that “[a]ll parties to the arbitration must be individually named” and that the parties shall have “no right or authority for any claims to be arbitrated or litigated on a class-action or consolidated basis.” Id. Plaintiffs’ lawyer argued that the class action waiver was unconscionable; the district court disagreed and granted the defense motion to compel arbitration and dismiss the class action complaint. Id. The Eleventh Circuit reversed.

It is well established that the enforceability of an arbitration clause is determined based on state law. Dale, at 1219 n.2. This is true because the Federal Arbitration Act (FAA) requires that federal court look to state law governing contracts generally (not arbitration agreements specifically) to determine the validity and enforceability of an arbitration agreement, id., at 1219 (citation omitted). Accordingly, the issue on appeal was “whether the Arbitration Provision’s class action waiver is unconscionable under Georgia law and thus unenforceable as a matter of law.” Id. Georgia law recognizes both procedural and substantive unconscionability, and the Circuit Court focused on substantive unconscionability of the class action waiver. Id.

Arbitration Class Action Court Decisions Uncategorized

Class Action Defense Cases-Murphy v. Check ‘N Go: California Appellate Court Upholds Trial Court Order That Class Action Waiver Rendered Arbitration Clause Unenforceable

Class Action Waiver Unconscionable and Contractual Provision Requiring Arbitrator to Determine Enforceability of Class Action Waiver and Arbitration Provision also Unconscionable California Court Holds

Plaintiff filed a class action lawsuit against his employer, a payday lending company, for violations of state labor laws alleging “failure to pay…overtime…, accurate itemized wage statements, adequate meal and rest periods, and wages upon termination.” Murphy v. Check ‘N Go of Cal., Inc., ___ Cal.App.4th ___, 67 Cal.Rptr.3d 120, 2007 WL 3016414, *1 (Cal.App. 2007). Defense attorneys moved to compel arbitration and dismiss the class action complaint on the grounds that plaintiff had signed a “Dispute Resolution Agreement” that included an arbitration provision and a class action waiver, _id._ The trial court refused to compel arbitration, concluding that the class action waiver rendered the arbitration agreement unconscionable, _id._ Defense attorneys appealed, contending that the class action waiver is not unconscionable and that whether the class action waiver was unconscionable should be decided by the arbitrator, not by the trial court. _Id._ The Court of Appeal rejected the defense arguments and affirmed the trial court order.

Plaintiff spent 7 years as a “salaried retail manager” for defendant; her class action complaint alleged that defendant misclassified salaried retail managers as exempt employees and thus failed to pay overtime, failed to provide accurate wage statements, failed to provide required meal and rest periods, and failed to provide wages due on termination. Murphy, at *1. The class action complaint alleged that every employee had to sign the arbitration agreement, which covered “all claims arising from or relating to plaintiff’s employment,” including any claim that the arbitration agreement was “substantively or procedurally unconscionable.” Id. As noted above, the arbitration agreement contained a class action waiver, requiring that any dispute be maintained as an individual action only, id. Defense attorneys moved to dismiss the class action complaint and compel arbitration, arguing in part that the agreement expressly vests in the arbitrator the power to decide whether the class action waiver is unconscionable. Id., at *2. The Court of Appeal summarized the trial court’s order at page *2 as follows: “the court determined that : (1) it had the power to rule on the unconscionability issues; (2) the parties’ agreement…was a contract of adhesion; (3) the agreement’s class action waiver was substantively unconscionable under Discover Bank v. Superior Court (2005) 36 Cal.4th 148…; (4) the agreement’s provisions for arbitration of unconscionability issues and pre-existing claims were also substantively unconscionable; and (5) the unconscionability terms would not be severed from the agreement.”

Arbitration Class Action Court Decisions Employment Law Class Actions Uncategorized

Class Action Against Sprint Settled with Defense Agreement to Unlock Cell Phones of Departing Customers

Tentative Class Action Settlement Requires Sprint to Unlock Phones so they can be Utilized with Competitors’ Services and May Impact Similar Industry Class Action Lawsuits The New York Times reports today that Sprint’s defense team has negotiated a tentative class action settlement of a California class action challenging the company’s practice of “locking” its phones so that they cannot be used on competing networks. According to Katie Hafner’s article, the class action challenged Sprint’s practice of “locking” its phones so that it could not operate with other networks.

Class Actions In The News Uncategorized

Employment Law Class Action Cases Again Predominate New Class Actions Filed In California State And Federal Courts

To assist class action defense attorneys anticipate the types of 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 relevant timeframe.

Class Actions In The News Uncategorized