Class Action Defense Cases-Gruer v. Merck-Medco: Second Circuit Reverses District Court Order Approving Class Action Settlement Holding Class Action Plaintiffs Were Not Representative Of Class

Interests of Plaintiffs in Class Action Conflicted with other Class Members, Warranting Certification of Subclass and new Hearing on Approval of Class Acton Settlement Second Circuit Holds

Plaintiffs filed a class action Merck-Medco managed Case, L.L.C., a/k/a Medco Health Solutions, Inc., a pharmaceutical benefits manager (PBM), and its former parent company Merck & Co. Inc. (collectively Medco) alleging violations of the Employee Retirement Income Security Act of 1974 (ERISA) for breach of fiduciary duties. Gruer v. Merck-Medco Managed Care, LLC, ___ F. 3d ___ (2d Cir. October 4, 2007) [Slip Opn., at 6]. Ultimately, the parties reached a tentative settlement of the class action. Important to our discussion, the class action settlement required Medco pay $42.5 million to class members, allocated primarily on a pro rata share of monies spent by each plan but reducing by 55% the share of certain plans because those plans could not have been injured directly by the conduct of Medco. _Id._, at 8. The district court approved the class action settlement, but the Second Circuit reversed and remanded holding that the lower court erred in failing to consider the conflict of interest between the purported representatives of the class action and other members of the class.

In very broad terms, plaintiffs in the class action complaint consisted of individuals, as beneficiaries of certain welfare benefit plans, and of trustees of welfare benefit plans. Gruer, at 4. The class action complaint alleged that Medco breached fiduciary duties under ERISA by “failing to act in their best interest in its capacity as a pharmaceutical benefits manager for the plans,” id., as set forth in the Note. A class action settlement was proposed, at which time certain entities sought leave to intervene and/or objected to the settlement. Id. The district court certified a class action, approved the settlement, awarded legal fees, and severed those cases in which ERISA plans opted out of the class action settlement, id.

Certification of Class Actions Class Action Court Decisions Uncategorized

FLSA Class Action Defense Cases-Zhong v. August August: New York Federal Court Partially Grants Defense Motion To Dismiss Overtime/Minimum Wage Class Action Claims

Class Action Complaint Alleging Violations of Federal Fair Labor Standards Act (FLSA) and State Law Equivalent Failed to Adequately Plead Overtime Violations New York Federal Court Holds

Plaintiff filed a putative class action against his employer, August August Corp. (doing business as “River Vietnamese and Thai Restaurant”) alleging failure to pay overtime and minimum wages required by the federal Fair Labor Standards Act (FLSA) and New York’s Minimum Wage Act (NYMWA). Zhong v. August August Corp., 498 F.Supp.2d 625, 627 (S.D.N.Y. 2007). The class action complaint asserted that federal court jurisdiction exists under 28 U.S.C. § 1337 as to the FLSA §§ 206 and 207 claims (the first and second claims for relief), and under 28 U.S.C. §1367 (supplemental jurisdiction) over the third claim for relief brought under New York state law, id. Defense attorneys moved to dismiss the class action on several grounds; the district court granted the motion in part.

Preliminarily, the district court rejected defense claims that the class action complaint failed to adequately plead that defendant was plaintiff’s “employer” within the meaning of the FLSA, holding that under the liberal standards applicable to a motion to dismiss, the allegations that plaintiff was “an employee” and was “employed by” sufficiently placed defendant on notice of the claims against it. Zhong, at 628-29. The next question was whether defendant was “engaged in commerce or in the production of goods for commerce” within the meaning of the FLSA, id., at 629. Again, the federal court held that the class action complaint adequately alleged this element of an FLSA claim, id. Similarly, the allegation that plaintiff earned only $10 per day but worked 3 or 4 hours a day adequately pleaded a breach of the FLSA’s minimum wage requirement. Id., at 629. In this regard, while the district court acknowledged that plaintiff had not demanded any specific amount in damages, “he has provided enough information to give August sufficient notice from which to calculate the alleged damages” because he alleged that he worked “twenty hours per week, spread out over six days per week, at a wage of $10.00 per day, for a total of (roughly) twenty weeks.” Id., at 629-30.

Class Action Court Decisions Employment Law Class Actions Uncategorized

Merck Strategy Of Fighting For Individual Vioxx Lawsuits Rather Class Action Treatment Again Pays Off With Florida Jury Verdict In Favor Of Defense

The Wall Street Journal reports today that Merck has won another trial, bringing to 11 the number of verdicts in its favor against five (5) losses. The latest victory came at the hands of a Florida jury, reportedly the first Vioxx case to go to trial in that state. Thousands of individual and class action lawsuits were filed against Merck after it pulled Vioxx from the market in September 2004, and Merck has argued vigorously for the right to litigate each case on an individual rather than class action basis.

Class Actions In The News Uncategorized

CB Richard Ellis Group Class Action Defense Team Settles Sexual Harassment Class Action Lawsuit

The Los Angeles Times reports today that CB Richard Ellis Group has agreed to pay upwards of $150,000 per female employee under a class action settlement of a lawsuit alleging sexual harassment. According to the report, the class action complaint alleged that female employees were “subjected to lewd remarks, unwanted groping and sexual propositions by male co-workers,” as well as pornographic material “distributed via email and displayed on office computers.” CB Richard Ellis did not admit any of the class action allegations, but agreed to pay $3.

Class Actions In The News Uncategorized

Class Action Lawsuit Filings Surge But Labor Law Class Action Cases Retain Firm Grip On Top Spot In Weekly Class Action Lawsuits Filed In California State And Federal Courts

As a resources 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 relevant timeframe. This report covers the time period from September 28 – October 4, 2007, during which time 62 new class action lawsuits were filed in these California state and federal courts.

Class Actions In The News Uncategorized

Class Action Defense Cases-In re Wellnx: Judicial Panel On Multidistrict Litigation (MDL) Grants Defense Motion To Centralize Class Action Lawsuits But Selects District of Massachusetts 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 Request to Centralize Class Actions in Maryland or New Jersey, Instead Transferring the Class Actions to the District of Massachusetts Nine class action lawsuits were filed against Wellnx Life Sciences and others seeking damages for strict liability, fraud and unjust enrichment arising from the manufacture, marketing and sale of Wellnx Slimquick and/or NV products, and several class actions alleged that the marketing and sale of the products violated various state consumer protection laws.

Class Action Court Decisions Multidistrict Litigation Uncategorized

California Federal Court Grants Class Action Treatment to Lawsuit Challenging Accessibility of Target’s Website to the Blind

Class Action Certification Motion Granted by Federal Court in California Class Action Attacking Target’s Failure to Permit “Screen-Reading” Software to Work on its Website Molly Selvin of the Los Angeles Times reports that U.S. District Court Judge Marilyn Hall Patel has granted plaintiffs’ class action certification motion in a California class action against Target challenging the accessibility of the company’s website to the blind. According to Ms. Selvin, the class action complaint alleges that Target’s website violates the federal Americans with Disabilities Act (ADA) as well as California state law because “screen-reading software doesn’t work on parts of its website, essentially making it unusable to blind people.

Class Actions In The News Uncategorized

Class Action Certification Motion Granted In ADA (Americans With Disabilities Act) California Class Action Against Target Challenging Target Website’s Limited Ability To Utilize Screen-Reading Software Used By The Blind

Molly Selvin of the Los Angeles Times reports today that a California federal district court has granted class action status to a lawsuit against Target seeking website accessibility for the blind. The class action complaint alleges that Target has failed to upgrade its website by implementing “technologically simple and not economically prohibitive” code that would allow screen-reading software to vocalize content on the Target website. In certifying the class action, the federal court reportedly noted that this is “an age when commerce is increasingly conducted on and through the Internet.

Class Actions In The News Uncategorized

Wal-Mart Reportedly Hit With Additional $62 Million Damage Award In Pennsylvania Labor Law Class Action Lawsuit

Following $78.5 Million Jury Verdict in Labor Law Class Action, Pennsylvania Court Awards an Additional $62.3 Million for Wal-Mart’s Withholding of Employee Pay for More than 30 Days The Associated Press reports that a Pennsylvania court yesterday awarded an additional $62.3 million against Wal-Mart in a labor law class action. The class action resulted in a jury verdict of $78.5 million, but an additional 125,000 members of the class qualified for additional damages because Wal-Mart withheld their pay for more than 30 days.

Class Actions In The News Uncategorized

Labor Law Class Action Defense Cases-Estrada v. FedEx: California State Court Upholds Class Action Judgment Against FedEx But Holds $14.4 Million Fee Award Must Be Reduced As Excessive

Trial Court Class Action Judgment Against FedEx for Labor Law Violations Generally Upheld but California State Appellate Court Reverses Attorney Fee Award as Excessive and because Multiplier Improperly Based on Same Facts that Triggered Entitlement to Fees

Plaintiffs filed a class action in California state court against FedEx Ground Package System, Inc. alleging violations of the state’s labor laws for failure to reimburse work-related expenses; the thrust of the class action complaint was that, “for the limited purpose of their entitlement to reimbursement for work-related expenses, [class members] were employees, not independent contractors.” Estrada v. FedEx Ground Package Sys., Inc., 64 Cal.Rptr.3d 327 330 (Cal.App. 2007). The trial court granted plaintiffs’ motion to certify the litigation as a class action, and a trifurcated trial followed during which (1) “the court found the drivers were employees within the meaning of Labor Code section 2802 (Phase I) , ordered FedEx to reimburse some (about $5 million, including prejudgment interest) but not all of their expenses (Phase II), granted most of the equitable relief sought by the drivers (Phase III), and ordered FedEx to pay the drivers’ costs and attorneys’ fees (about $12.3 million).” Id. Defense attorneys appealed and plaintiffs cross-appealed.

The Court of Appeal noted that this represented the third appeal in this case, and that it here considered defense challenges to the trial court order certifying the class action, the finding that the drivers were employees, the reimbursement findings, and the award of attorney fees. Estrada, at 330-31. The facts are quite detailed, and we do not repeat them here. See id., at 331-34. On the direct appeal, the Court of Appeal affirmed that the drivers were employees of FedEx, not independent contractors. Id., at 335. The appellate court noted that the California Labor Code does not define “employee” for purposes of section 2802 so the common law test applies, and explained at page 335 that under that test the question is “whether the principal has the right to control the manner and means by which the worker accomplishes the work” based on a number of factors including “(1) whether the worker is engaged in a distinct occupation or business, (2) whether, considering the kind of occupation and locality, the work is usually done under the principal’s direction or by a specialist without supervision, (3) the skill required, (4) whether the principal or worker supplies the instrumentalities, tools, and place of work, (5) the length of time for which the services are to be performed, (6) the method of payment, whether by time or by job, (7) whether the work is part of the principal’s regular business, and (8) whether the parties believe they are creating an employer-employee relationship.” (Citations omitted.) Under those factors, substantial evidence supported the finding that the drivers were “employees,” see id., at 336-37.

Next, the Court of Appeal affirmed that class action treatment was appropriate, holding that “it is clear that common issues – whether the drivers were employees and, if so, which expenses would be reimbursable – predominated.” Estrada, at 338. The appellate court affirmed also the trial court finding that FedEx failed to reimburse the drivers for all expenses required by law, see id., at 339.

Certification of Class Actions Class Action Court Decisions Employment Law Class Actions Uncategorized