Class Action Defense Blog

The New York Times reports on the decision of the United States Supreme Court to let stand the decision of the Illinois Supreme Court that reversed a $10 billion judgment against Philip Morris. The judgment against Philip Morris had been entered in a class action that alleged smokers "were misled about the health risks of 'light' cigarettes." The Illinois Supreme Court reversed the judgment, agreeing with defense attorneys that a statutory exemption for conduct authorized by a governmental regulatory agency applied because "the Federal Trade Commission had endorsed the 'light' and 'low tar' descriptions in settlements with other cigarette makers."

The article, entitled " Justices Let Stand a Decision to Void Big Award Against Philip Morris," may be found in Section C of the November 28, 2006 edition of the New York Times.

Posted In: Class Actions In The News

The Los Angeles Times reports that IBM has reached a tentative agreement to pay $65 million in settlement of a class action lawsuit filed in California federal court that alleged it had improperly denied overtime pay to 32,000 workers. According to the article, "The case involved workers classified as 'technical services professional and information technology specialists.' IBM considered them professionals exempt from overtime laws detailed in the Fair Labor Standards Act and state labor laws." Plaintiff's lawyer argued that the employees at issue "were by no means the decision makers or creative types typically ineligible for overtime." IBM maintains that it seeks settlement of the lawsuit because litigation will be "lengthy, burdensome and expensive."

The article, entitled "IBM settles overtime class action," may be found in the Business Section of the November 23, 2006 Los Angeles Times.

Posted In: Class Actions In The News

Class action defense attorneys in California will continue to confront more labor law class action cases than any other category, but public accommodation/ADA (Americans with Disabilities Act) cases made a strong showing this past week. In an effort to assist class action defense attorneys in anticipating the claims against which they may have to defend, we provide weekly, unofficial summaries of the legal categories for new class actions 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. Employment law cases routinely lead the list and usually do so by a wide margin, but this past week class actions alleging public accommodation/Americans with Disabilities Act (ADA) claims ran a close second.

This report covers the time period from November 13 – November 16, 2006. We include only those categories that include 10% or more of the class action filings during the relevant timeframe. Approximately 44 class action lawsuits were filed in these California state and federal courts during that time period, of which 15 (34%) involved employment-related claims. New public accommodation/ADA class action lawsuits came in second with 11 new filings (25%). The third place category consists of 7 new unfair competition claims, which include unfair business practices and false advertising claims (16%).

Posted In: Class Actions In The News

Latest Defense Verdict Weighs Heavily Against Class Action Treatment of Vioxx Claims

The verdict is in on Merck's eleventh Vioxx trial, and a Louisiana federal jury agreed with defense attorneys that a Utah bank manager who suffered a heart attack after using Vioxx for almost a year had not established Vioxx caused his injury. Defense attorneys argued that the manager had used the drug for less than one year and had stopped using the drug four days before he suffered his heart attack. Importantly, the federal trial was before U.S. District Court Judge Eldon Fallon, who will ultimately rule on a pending motion to certify a Vioxx class action against Merck. Merck's defense attorneys wisely have argued that each case should be tried individually, and have pressed to have cases tried in advance of any class action determination. The outcome of those cases weighs heavily against class action treatment. The most recent verdict comes in Merck's fourth federal action - Merck's defense team is now ahead three to one in federal court. Judge Fallon has presided over all four federal trials. Merck has tried seven state court actions, winning three, losing three and facing a retrial in the remaining action.

The next federal trial against Merck is scheduled for November 27, 2006; Judge Fallon will again serve as presiding judge. The range of factual differences and the differing focus of the expert testimony across the federal cases may well persuade Judge Fallon that the lawsuits are not suitable for class action treatment.

Posted In: Class Actions In The News

Ameet Sachdev of the Chicago Tribune reports that Cook County Circuit Judge Nancy Arnold has delayed approval of a three-year-old stockholders class action against Boeing because of the federal court indictment handed down against lead plaintiffs' counsel Milberg Weiss Bershad & Schulman. After the settlement had been submitted for her approval, Judge Arnold required that the six named plaintiffs appear in court and testify as to how they became plaintiffs in the case, including when the became Boeing stockholders and the amount of stock that they owned. Sachdev explains that while there is nothing overtly improper about the plaintiffs' behavior, "the judge's suspicions were aroused this summer after one of the plaintiffs' law firms, Milberg Weiss Bershad & Schulman, was indicted on federal charges of paying kickbacks to people to serve as plaintiffs in class-action lawsuits, just weeks before a settlement was proposed in the Boeing case." While the firm and its indicted named partners, Bershad and Schulman, have denied any wrongdoing, one of its clients has pleaded guilty to receiving $2.4 million in kickbacks. Judge Arnold may reject the settlement if she concludes that such misconduct occurred in this case.

Sachdev reports that this is but one more blow to the once-powerful class action plaintiffs law firm. "The fallout from the indictment is being felt in courtrooms around the U.S. In Minnesota, a federal judge removed Milberg Weiss from a leadership role in cases accusing Medtronic Inc. of selling faulty heart devices. [¶] In New York, the state's comptroller fired the firm, which was representing New York's public employee pension fund as lead counsel in a case against pharmaceuticals giant Bayer AG. Ohio's public pension fund also axed Milberg Weiss."

Ameet Sachdev's article, entitled "Milberg case put on hold: Judge orders review of Boeing suit after law firm indicted," may be found in the Business Section of the November 13,. 2006 edition of the Chicago Tribune.

Posted In: Class Actions In The News

Class action defense lawyers continue to face a greater number of labor law class action filings in California than any other category. As frequent visitors know, we provide weekly, unofficial summaries of the legal categories for class actions 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. This report covers the time period from November 3 - November 9, with employment law class action cases retaining their firm grip on the top spot on the class action filings list. We include only those categories that include 10% or more of the class action filings during the relevant timeframe. Approximately 29 class action lawsuits were filed in these California state and federal courts during that time period, of which 10 (almost 35%) asserted labor law claims. Class action lawsuits alleging unfair competition, including unfair business practices and false advertising claims, again came in a second with 6 new class action filings (21%), with various Consumers Legal Remedies Act violations a close third with 5 new filings (17%). The only other group of class action claims that pass the 10% threshold involved 3 securities fraud filings (10%).

Posted In: Class Actions In The News

Martha Stewart and Martha Stewart Living Omnimedia Defense Attorneys Report $30 Million to Settle Class Action

Several news reports cite reliable sources that the class action against Martha Stewart Living Omnimedia and Martha Stewart has been settled pending court approval. Several lawsuits were filed apparently claiming that Stewart’s misrepresentations concerning her sale of ImClone stock artificially inflated the stock price of Martha Stewart Living. The separate lawsuits eventually were consolidated. News reports place the total settlement at $30 million, of which Martha Stewart personally will pay about $5 million. Insurers are expected to pay about $10 million, with the company – Martha Stewart Living – picking up the tab for the remaining $15 million.

News reports on the anticipated settlement may be found in an article entitled “Stewart Expected To Pay $5 Million To Settle Suit,” in the Business Section of the November 9, 2006 Los Angeles Times, and in an article entitled “Stewart To Pay $5 Million In Settlement Of ImClone Suit,” in the Business Section of the November 9, 2006 Chicago Tribune.

Posted In: Class Actions In The News

To allow class action defense lawyers anticipate claims against which they may have to defend, we provide weekly, unofficial summaries of the legal categories for class actions 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. This report covers the time period from October 27 - November 2, 2006, and employment law cases yet again hold a firm grip on the top spot on the list. We include only those categories that include 10% or more of the class action filings during the relevant timeframe. Approximately 37 class action lawsuits were filed in these California state and federal courts during that time period, of which 17 involved labor law claims (46%). Class action lawsuits alleging unfair competition, including unfair business practices and false advertising claims, came in a distant second with 9 new class action filings (24%). The only other group of class action claims that pass the 10% threshold are four (4) cases alleging fraud (11%).

Posted In: Class Actions In The News

To aid California class action defense attorneys in anticipating claims against which they may have to defend, we provide weekly an unofficial summary of legal categories for class actions 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. This report covers the time period from October 20 - October 26, 2006. We include only those categories that boast 10% or more of the class action filings during the relevant timeframe. Approximately 33 class action lawsuits were filed in these California state and federal courts during that time period, of which 16 involved employment law claims (almost 50%). The category with the second highest number of class action filings involved California’s Unfair Competition Law (UCL) - which includes unfair business practices and false advertising claims - with 9 new filings (27%). The third category of class action cases with more than 10% of the new weekly filings concerned alleged violations of California's Consumers Legal Remedies Act (CLRA): class action defense attorneys will face 5 new cases involving that area of law, which represents approximately 15% of the class actions filed this time period.

Posted In: Class Actions In The News

Class Action Defense Attorneys Urged to Advise Clients about FACTA Requirements

As we previously noted, the Fair and Accurate Credit Transactions Act (FACTA) is scheduled to take effect in December, 2006. Congress requires that credit card receipts provided to customers be modified so that the information contained on them no longer serves as a ready source for credit card fraud or identity theft. Under FACTA, the credit card number shown on the customer copy of the credit card receipt must be truncated and the expiration date must be omitted. Class action defense attorneys are encouraged to be proactive in warning their clients about the statute before the law becomes effective.

Posted In: Class Actions In The News, FCRA Class Actions

To aid California class action defense attorneys in anticipating claims against which they may have to defend, we provide weekly an unofficial summary of legal categories for class actions 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. This report covers the time period from October 13 - October 19, 2006. We include only those categories that boast 10% or more of the class action filings during the relevant timeframe. Approximately 46 class action lawsuits were filed in these California state and federal courts during that time period, of which 18 involved employment law claims (almost 40%). Surprisingly, however, class action filings involving California’s Unfair Competition Law (UCL) - which includes unfair business practices and false advertising claims - came in a strong second, with 16 new filings (35%). Half of these UCL claims (8) involved the alleged SRAM price-fixing conspiracy against numerous defendants, including Samsung, Hynix, Micron Technology, IBM, Epson, Hitachi, Sharp, Sony, Fujitsu, Alliance Semiconductor, NEC, and many others.

During this time period, the only other significant group of class action filings involved various securities claims: class action defense attorneys will face 5 new cases involving that area of law, which represents approximately 11% of the class actions filed this time period.

Posted In: Class Actions In The News

Defense Attorneys Plan to Appeal Jury Verdict that Wal-Mart Failed to Provide Employees with Rest Breaks and Overtime, and that Wal-Mart Acted in Bad Faith

The jury is in on a labor law class action on behalf of 187,000 Wal-Mart and Sam’s Club employees brought in Pennsylvania state court. The lawsuit alleged that employees were not provided rest breaks and were required to work “off the clock,” depriving them of overtime pay. The jury awarded $78.5 million in damages, and that figure may be dramatically increased because the jury also found that Wal-Mart acted in bad faith, opening the door to an additional $62 million in damages, according to plaintiffs’ lawyers. The jury agreed with defense attorneys that Wal-Mart had not forced employees to work through meal breaks. Several news sources have reported on the verdict, including Steven Greenhouse of the New York Times and James Covert of the Wall Street Journal.

Continue reading "Pennsylvania Jury Finds Wal-Mart Liable In Employee Overtime/Rest Breaks Class Action Case And Awards $78 Million In Damages Plus Attorney Fees" »

Posted In: Class Actions In The News, Employment Law Class Actions

Reporter Shines Light on Concerns Arising from Standard Defense Provision in Class Action Settlement Agreements that Defendant is not Admitting Liability

David Lazarus of the San Francisco Chronicle questions the standard defense provision in class action settlement agreements that the settlement does not constitute an admission of liability. He focuses on the recent settlement by Wells Fargo Bank in which he reports “it agreed to pay $12.8 million to settle a lawsuit claiming the bank unlawfully exempted as many as 4,500 workers from overtime pay by classifying them as analysts or consultants” but denied any wrongdoing. Mr. Lazarus identifies several other settlements that follow the same pattern. While understandable, any consumer frustration over this standard provision reflects in part unfamiliarity with the costs – financial and otherwise – associated with class action litigation, and fails to recognize that such provisions are standard clauses in virtually all settlement agreements, class action and non-class action.

Mr. Lazarus quoted this author’s observation that one reason defendants deny liability is so that the issue may be litigated in a future proceeding, if necessary. The concern is not that the settlement will “spark a flurry of lawsuits in other states,” but rather that the company will be precluded from obtaining a judicial determination on the merits in a future case. Very few companies blatantly violate the plain language of the law, and all attorneys recognize that the outcome of a trial can never be 100% guaranteed, no matter how strong the case. Rather, many of the legal issues presented in class action and other complex or high-liability cases fall into the “gray” areas of the law. For example, whether a grocery store manager is exempt from overtime often turns on the individual facts of the particular case, see, e.g., Dunbar v. Albertson’s, Inc., 141 Cal.App.4th 1422 (Cal.App. 2006) (refusing to certify class action on behalf of grocery store managers because of individual issues of liability and damages), whether employee commissions are subject to charge-backs or constitute wages turns on the specific facts of each case, see, e.g., Koehl v. Verio, Inc., ___ Cal.App.4th ___, 48 Cal.Rptr.3d 749 (Cal.App. 2006) (holding employer’s program did not violate California law, and awarding damages and attorney fees to employer).

If Albertson’s had settled the class action filed by Dunbar and if Verio had settled the class action filed by Koehl, those cases would have qualified for the list in Mr. Lazarus’s article. They represent concrete examples of why a company does not want to cut-off its right to litigate a future case involving the same issues.

The article by David Lazarus, entitled “They Pay But Deny Any Guilt,” may be found in the Business Section of the October 13, 2006 edition of the San Francisco Chronicle.

Posted In: Class Actions In The News

To aid California class action defense attorneys in anticipating claims against which they may have to defend, we provide weekly an unofficial summary of legal categories for class actions 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. This report covers the time period of from October 6 - October 12, 2006. We include only those categories that contain 10% or more of the class action filings during the relevant timeframe. Approximately 44 class action lawsuits were filed in these California state and federal courts during that time period, of which 14 (almost 32%) involved public accommodation actions under the federal Americans with Disabilities Act (ADA). Employment law claims came in second with 11 new filings (25%). The only other category of cases to break the 10% threshold consisted of unfair competition/unfair business practice claims: class action defense attorneys will face 5 new cases involving that area of law, which represents approximately 11% of the class actions filed during this time period.

Posted In: Class Actions In The News

The evidence suggests that the recent wave of public accommodation/ADA class action lawsuits will continue for the foreseeable future. In order to assist class action defense attorneys in California to anticipate the claims against which they may have to defend, we provide weekly, unofficial summaries of the legal categories for new class actions 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. At one time, employment law cases routinely headed the list, but an increasing number of class actions alleging public accommodation/Americans with Disabilities Act (ADA) claims have been filed.

This report covers the time period from October 2 – October 5, 2006. We include only those categories that include 10% or more of the class action filings during the relevant timeframe. Approximately 55 class action lawsuits were filed in these California state and federal courts during that time period, of which 29 – almost 53% – involved public accommodation/ADA claims. Coming in at a distant second place, 8 new employment law class actions (15%) were filed during this time period.

Posted In: Class Actions In The News

As a service to California class action defense attorneys, we provide weekly, unofficial summaries of the legal categories for new class actions 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 22 – September 26, 2006. Approximately 40 class action lawsuits were filed in these California state and federal courts during that time period, of which 19 (48%) involved employment law claims. Demonstrating the predominance of labor law class actions in California, not a single other category of cases satisfied the 10% threshold requirement to be listed in this report.

Posted In: Class Actions In The News

New York Federal Court Order Certifying Class Action Against Tobacco Companies for Misleading Smokers into Believing that "Light" Cigarettes were Less Harmful Becomes Hot Topic of Discussion

We reported yesterday on the order by United States District Court Judge Jack Weinstein of the Eastern District of New York that certified a massive class action against numerous tobacco companies based on the allegation that the companies intentionally mislead smokers into believing that "light" cigarettes were less harmful than regular cigarettes. As expected, that decision is headline news. While there are undoubtedly countless competent articles on the subject, we believe a few deserve to be singled out. For those interested in reading news articles on the subject rather than the 540-page court opinion, we recommend the following reports.

An article by Wall Street Journal reporter Vanessa O'Connell, entitled, "Tobacco Firms Exposed To New $200 Billion Claim," which may be found on page A3 of the September 26, 2006 edition of the Wall Street Journal.

An article by New York Times reporters David Cay Johnston and Melanie Warner, entitled "Tobacco Makers Lose Key Ruling on Latest Suits," which may be found in Section A of the September 26, 2006 edition of the New York Times, as well as the September 26, 2006 online edition of the New York Times at nytimes.com. The link is <http://www.nytimes.com/2006/09/26/business/26tobacco.html>.

Posted In: Class Actions In The News

Smokers Duped Into Believing that “Light” Cigarettes were Less Harmful New York Court Holds

As anticipated, Judge Jack Weinstein of the United States District Court for the Eastern District of New York issued his ruling this morning on the plaintiffs’ motion to certify a class action against Philip Morris USA, R.J. Reynolds Tobacco Co., Brown & Williamson Tobacco Corp., Lorillard Tobacco Co., Ligget Group, American Tobacco Co., Altria Group, and British American Tobacco, in a case that alleged the tobacco companies duped smokers into believing that “light” cigarettes were less harmful to them. Schwab v. Phillip Morris USA, Inc., 449 F.Supp.2d 992 (E.D.N.Y. 2006). The court summarized the theory of the case at page 1018 as follows:

Continue reading "Schwab v. Phillip Morris-Class Action Defense Cases: New York Federal Court Certifies Class Action Against Tobacco Companies For Selling "Light" Cigarettes" »

Posted In: Class Actions In The News, Certification of Class Actions, Class Action Court Decisions

Speculation Mounts as to Whether Class Action Plaintiff Lawyer William Lerach Also will be Indicted

As the class action plaintiff firm Milberg Weiss Bershad & Schulman and two of its partners, David Bershad and Steven Schulman, moves forward, Molly Selvin of the Los Angeles Times reports that the setting of a trial date has been postponed because of the prospect of additional indictments. The federal court reportedly expressed frustration that the government’s 7-year investigation remains ongoing. Selvin also reports that “many observers believe [the additional indictments] could involve William S. Lerach.” The federal court is expected to set a trial date on November 27.

Molly Selvin’s article, entitled “Judge Delays Trial Date for Milberg Weiss Case,” may be found in the Business Section of the September 21, 2006 edition of the Los Angeles Times.

Posted In: Class Actions In The News

Class action defense attorneys in California will be confronting a new wave of public accommodation/ADA (Americans with Disabilities Act) cases, supplanting new labor law class actions by a substantial margin. In an effort to assist class action defense attorneys in anticipating the claims against which they may have to defend, we provide weekly, unofficial summaries of the legal categories for new class actions 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. Employment law cases routinely lead the list, but this past week showed a startling increase in the overall number of class action filings and the number of class actions alleging public accommodation/Americans with Disabilities Act (ADA) claims.

This report covers the time period from September 15 - September 21, 2006. We include only those categories that include 10% or more of the class action filings during the relevant timeframe. Approximately 71 class action lawsuits were filed in these California state and federal courts during that time period, of which 42 – almost 60% – involved public accommodation/ADA claims. The second place category consists of 14 new employment law class action filings (20%).

Posted In: Class Actions In The News