Class Action Defense Blog

The NLRB issued a broad and long-awaited decision on September 29, 2006 which affects the definition of "supervisor" under the National Labor Relations Act (the "Act"). Oakwood Healthcare, Inc., 348 NLRB NO. 37, and two other companion cases, impact all industries and could undermine the power of labor unions as millions of employees could potentially be re-classified as "supervisors." As "supervisors," these employees would be precluded from joining unions and would no longer be covered by collective bargaining agreements. Not surprisingly, labor unions are in an uproar over the Oakwood Healthcare decisions. They have called them "outrageous" and are threatening strikes against employers who re-classify employees under the new decisions.

Section 2(11) of the Act defines a supervisor as an employee who has the authority to perform any of 12 tasks in the interest of the employer while using independent judgment. In 2001, the U.S. Supreme Court provided general guidance on the definition of "supervisor" under Section 2(11) in NLRB v. Kentucky River Community Care, 532 U.S. 706 (2001). Using Kentucky River's guiding principles, the NLRB clarified the definition of "supervisor" under Section 2(11). In a well-written and thorough decision, the NLRB defines previously ambiguous terms such as "assign," "responsibly to direct," and "independent judgment" as used in Section 2(11).

Continue reading "NLRB Decision In Oakwood Healthcare, Inc., 348 NLRB No. 37, Clarifies Definition Of "Supervisor" Under Section 2(11)--Class Action Defense Issues" »

Posted In: Employment Law Class Actions, Class Action Court Decisions

As a resource for the class action defense lawyer who defends against class actions brought under the Fair Credit Reporting Act (FCRA), 15 U.S.C. § 1681 et seq., we provide the text of the FCRA. Congress enacted legislation concerning the disposal of records as follows:

§ 1681w. Disposal of records

(a) Regulations

(1) In general.

Not later than 1 year after the date of enactment of this section, the Federal banking agencies, the National Credit Union Administration, and the Commission with respect to the entities that are subject to their respective enforcement authority under section 1681s of this title, and the Securities and Exchange Commission, and in coordination as described in paragraph (2), shall issue final regulations requiring any person that maintains or otherwise possesses consumer information, or any compilation of consumer information, derived from consumer reports for a business purpose to properly dispose of any such information or compilation.

Continue reading "15 U.S.C. § 1681w – Disposal of Records: Statutory Provisions of the FCRA (Fair Credit Reporting Act) for Class Action Defense Attorneys" »

Posted In: FCRA Class Actions, Statutes & Rules

Tennessee Federal Court Grants Motion to Remand Because 28 U.S.C. § 1445(c) Prohibits Removal of Actions “Arising Under the Workmen’s Compensation Laws”

Following a work-related injury, a store manager retained a lawyer to negotiate a workers’ compensation settlement with her employer. She maintains that her employer retaliated and ultimately fired her. Her attorney filed a putative class action in state court against her employer alleging “reprisal and/or retaliatory discharge for asserting workers’ compensation rights.” Going v. Bass Pro Outdoor World, LLC, 437 F.Supp.2d 762, 764 (W.D. Tenn. 2006). Defense attorneys removed the class action to federal court on grounds of diversity; plaintiff’s lawyer moved to remand the lawsuit on the grounds that 28 U.S.C. § 1445(c) prohibited removal. Id. The district court rejected defense arguments and remanded the class action to state court.

The district court explained that the general rules governing removal under 28 U.S.C. § 1441 do not apply to actions “arising under the workmen’s compensation laws,” as such actions are specifically exempted from removal under § 1445(c). Goin, at 765-66. The question, then, is whether plaintiff’s lawsuit “‘arises under’ the [state’s] workers’ compensation laws, which in turn hinges upon the legal source of the cause of action at issue.” Id., at 766. The controlling authority for this inquiry is the Sixth Circuit opinion in Harper v. AutoAlliance Int’l, Inc., 392 F.3d 195 (6th Cir. 2004).

Continue reading "Class Action Defense Cases-Goin v. Bass Pro: Defense Removal Of Class Action To Federal Court Improper Because Lawsuit Arose Under Workers’ Compensation Law" »

Posted In: Employment Law Class Actions, Removal & Remand

Federal Court Grants Motion to Consolidate PSLRA Class Actions, and Pursuant to PSLRA Appoints Plaintiff With Largest Financial Investment as Lead Plaintiff and Confirms Lead Plaintiff’s Choice of Lead Counsel

Six securities fraud class action lawsuits were filed against a corporation and three of its officers and directors alleging that defendants violated §§ 10(b) and 20(a) of the federal Securities Exchange Act of 1934 and Rule 10b-5 by making false and misleading statements concerning the corporations earnings and enrollment growth. A separate derivative action also was filed. Plaintiffs’ attorneys in five of the class actions sought consolidation of the lawsuits and appointment of Lead Plaintiff and Lead Counsel. Glauser v. EVCI Career Colleges Holding Corp., 236 F.R.D 184, 186 (S.D.N.Y. 2006). The defense apparently took no position on the motions, each of which were granted by the district court.

With respect to the consolidation motion, the federal court held that “consolidation is particularly appropriate in the context of securities class actions if the complaints are ‘based on the same “public statements and reports.”’” Glauser, at 186 (citation omitted). Because the class actions involved “common issues of law and fact” the Court consolidated those lawsuits “for all purposes,” including trial; the derivative action was consolidated for all pretrial purposes, and the Court reserved a decision on whether to consolidate it for trial as well. Id.

Continue reading "Class Action Defense Cases-Glauser v. EVCI: New York Federal Court Grants Motion To Consolidated Class Action Lawsuits Under Private Securities Litigation Reform Act (PSLRA) And to Appoint Lead Plaintiff And Lead Counsel" »

Posted In: Class Action Court Decisions, PSLRA/SLUSA Class Actions

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

Class Action Against Tobacco Companies for Labeling Cigarettes "Light" Allegedly to Mislead Smokers Into Believing They were Less Harmful Than Regular Cigarettes was not Superior Method of Resolution Because Individual Issues Would Predominate California Court Holds

In 1997, smokers filed a putative class action against numerous tobacco companies arising out of “marketing and advertising activities in California” and seeking “to recover economic losses resulting from purchasing cigarettes.” In re Tobacco II Cases, ___ Cal.App.4th ___, 47 Cal.Rptr.3d 917, 919 (Cal.App. September 5, 2006). Eventually, in October 2000, the sole remaining plaintiff sought class certification of his seventh amended complaint, which a Consumer Legal Remedies Act (CLRA) claim, an Unfair Competition Law (UCL) claim, and a false advertising claim. Defense attorneys previously had persuaded the court to deny a motion to certify a class action on common law and CLRA claims because “individual issues of causation and injury predominate over common issues.” Id. The trial court refused to certify a class on the CLRA claim because it was an improper motion for reconsideration “and found that individual issues relating to causation, injury, reliance, materiality, exposure to the alleged misstatements, statutes of limitations, and choice of law predominate.” However, the court granted class certification as to the UCL and false advertising claims as they “do not require the individualized determinations as to reliance.” Id.

Continue reading "In re Tobacco II Cases-Class Action Defense Cases: California Court Properly Denied Class Action Of CLRA Claims Against Tobacco Companies And Properly Decertified Class As To UCL Claims" »

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

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

Pennsylvania Federal District Court Holds that Named Class Action Plaintiffs may Recover Damages Under the FDCPA (Fair Debt Collection Practices Act) Both Individually and as a Member of the Class

A class action was filed in federal court against Drive Financial Services and Drive G.P. alleging violations of the Fair Debt Collection Practices Act (FDCPA) in that defendants allegedly sent letters “on the ostensible letterhead” of an attorney for the purpose of collecting a debt. McCall v. Drive Fin. Serv., L.P., 440 F.Supp.2d 388, 388-89 (E.D. Pa. 2006). Plaintiff’s lawyer filed a motion in limine to determine the amount of statutory damages that would be available under 15 U.S.C. § 1692k(a)(2)(B). Id. The district court rejected the argument by defense attorneys that the named class action plaintiff could not also recover as a member of the class, and held the maximum amount of statutory damages available at trial to be $501,000. Id., at 391.

Continue reading "Class Action Defense Cases-McCall v. Drive Financial: Class Action Statutory Damages Under Federal Fair Debt Collection Practices Act (FDCPA) Can Exceed $500,000 Pennsylvania Court Holds" »

Posted In: FDCPA Class Actions, Class Action Court Decisions

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

Federal Securities Claims Without Fraud Element Must Still be Pled with Particularity if Nonfraud Securities Claim is Part of Defendant’s Alleged Fraudulent Conduct Under the Exchange Act and Rule 10(b)-5

Plaintiffs filed a putative class action under the Securities Act, 15 U.S.C. § 77a et seq., and the Exchange Act, 15 U.S.C. § 78a et seq., alleging that defendant “employed a fraudulent scheme to control the revenue growth; defense attorneys filed a motion to dismiss for failure to meet the pleading requirements of FRCP Rule 9(b) and the federal Private Securities Litigation Reform Act (PSLRA), 15 U.S.C. § 78u-4(b). The federal court granted the motion to dismiss, and required that plaintiffs pay defense costs and fees incurred in connection with the motion to dismiss as a prerequisite to plaintiffs’ filing a motion to amend their class action complaint. Wagner v. First Horizon Pharm. Corp., 464 F.3d 1273, 1275-76 (11th Cir. 2006). Rather than pay these defense costs, plaintiffs allowed the complaint to be dismissed and then appealed. Id., at 1276.

The Eleventh Circuit first observed that Section 11 of the Securities Act creates “virtually absolute [liability], even for innocent misstatements,” as does Section 12(a)(2); thus, “neither allegations of fraud nor scienter are necessarily part of either of these claims.” Wagner, at 1277. The Circuit Court therefore characterized claims under Sections 11 and 12(a)(2) as “nonfraud” claims, and noted: “The question presented . . . [is] whether there are circumstances when [Rule 9(b)] would require nonfraud securities claims to be pled with particularity.” Id. While noting that sister circuits are split on this issue, the Eleventh Circuit adopted the conclusion of the majority of the circuits that have addressed the question and held “Rule 9(b) applies when the misrepresentation justifying relief under the Securities Act is also alleged to support a claim for Fraud under the Exchange Act and Rule 10(b)-5, id. The Circuit Court explained its holding at page 1278 as follows:

Continue reading "Class Action Defense Cases-Wagner v. First Horizon: Eleventh Circuit Holds As A Matter Of First Impression That If Nonfraud Securities Claim Is Part Of Allegedly Fraudulent Conduct Then It Must Be Pleaded With Particularity" »

Posted In: Class Action Court Decisions, PSLRA/SLUSA Class Actions

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

As a resource for the class action defense lawyer who defends against class actions brought under the Fair Credit Reporting Act (FCRA), 15 U.S.C. § 1681 et seq., we provide the text of the FCRA. In addition to the statutory provision discussed earlier concerning disclosure of consumer information to the FBI for counterintelligence purposes, Congress enacted rules governing disclosure of such information to governmental agencies for counterterrorism purposes:

§ 1681v. Disclosures to governmental agencies for counterterrorism purposes

(a) Disclosure.

Notwithstanding section 1681b of this title or any other provision of this title, a consumer reporting agency shall furnish a consumer report of a consumer and all other information in a consumer' s file to a government agency authorized to conduct investigations of, or intelligence or counterintelligence activities or analysis related to, international terrorism when presented with a written certification by such government agency that such information is necessary for the agency' s conduct or such investigation, activity or analysis.

(b) Form of certification.

The certification described in subsection (a) shall be signed by a supervisory official designated by the head of a Federal agency or an officer of a Federal agency whose appointment to office is required to be made by the President, by and with the advice and consent of the Senate.

(c) Confidentiality.

No consumer reporting agency, or officer, employee, or agent of such consumer reporting agency, shall disclose to any person, or specify in any consumer report, that a government agency has sought or obtained access to information under subsection (a).

(d) Rule of construction.

Nothing in section 1681u of this title shall be construed to limit the authority of the Director of the Federal Bureau of Investigation under this section.

(e) Safe harbor.

Notwithstanding any other provision of this title, any consumer reporting agency or agent or employee thereof making disclosure of consumer reports or other information pursuant to this section in good-faith reliance upon a certification of a governmental agency pursuant to the provisions of this section shall not be liable to any person for such disclosure under this subchapter, the constitution of any State, or any law or regulation of any State or any political subdivision of any State.

Posted In: FCRA Class Actions, Statutes & Rules