Posted On: September 30, 2006 by Michael J. Hassen Email This Post

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

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).

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Posted On: September 30, 2006 by Michael J. Hassen Email This Post

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

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.

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Posted On: September 29, 2006 by Michael J. Hassen Email This Post

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

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).

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Posted On: September 28, 2006 by Michael J. Hassen Email This Post

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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

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 On: September 27, 2006 by Michael J. Hassen Email This Post

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Weekly California State And Federal Class Action Filings Predominantly Labor Law Cases

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 On: September 27, 2006 by Michael J. Hassen Email This Post

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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

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.

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Posted On: September 26, 2006 by Michael J. Hassen Email This Post

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Certification Of Class Action Against Tobacco Companies Hits Newspapers

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 On: September 26, 2006 by Michael J. Hassen Email This Post

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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

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 On: September 25, 2006 by Michael J. Hassen Email This Post

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

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:

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Posted On: September 25, 2006 by Michael J. Hassen Email This Post

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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

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 On: September 24, 2006 by Michael J. Hassen Email This Post

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Trial On Federal Charges Against Class Action Law Firm Milberg Weiss Delayed As Prosecutors Consider Additional Indictments

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 On: September 24, 2006 by Michael J. Hassen Email This Post

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15 U.S.C. § 1681v – Disclosures to Governmental Agencies for Counterterrorism Purposes: Statutory Provisions of the FCRA (Fair Credit Reporting Act) for Class Action Defense Attorneys

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 On: September 23, 2006 by Michael J. Hassen Email This Post

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Public Accommodation/ADA Class Action Lawsuits Surge To Top Of Weekly Class Action Filings In California State And Federal Courts

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 On: September 23, 2006 by Michael J. Hassen Email This Post

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15 U.S.C. § 1681u – Disclosures to FBI for Counterintelligence Purposes: Statutory Provisions for the Class Action Defense Lawyer Who Defends Class Actions Brought Under the FCRA (Fair Credit Reporting Act)

As a resource for class action defense attorneys who defend 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 special rules governing the disclosure of consumer information to the FBI for purposes of counterintelligence, as set forth in Section 1681u which provides:

§ 1681u. Disclosures to FBI for counterintelligence purposes

(a) Identity of financial institutions.

Notwithstanding section 1681b of this title or any other provision of this title, a consumer reporting agency shall furnish to the Federal Bureau of Investigation the names and addresses of all financial institutions (as that term is defined in section 3401 of Title 12) at which a consumer maintains or has maintained an account, to the extent that information is in the files of the agency, when presented with a written request for that information, signed by the Director of the Federal Bureau of Investigation, or the Director' s designee in a position not lower than Deputy Assistant Director at Bureau headquarters or a Special Agent in Charge of a Bureau field office designated by the Director, which certifies compliance with this section. The Director or the Director's designee may make such a certification only if the Director or the Director's designee has determined in writing, that such information is sought for the conduct of an authorized investigation to protect against international terrorism or clandestine intelligence activities, provided that such an investigation of a United States person is not conducted solely upon the basis of activities protected by the first amendment to the Constitution of the United States.

(b) Identifying information.

Notwithstanding the provisions of section 1681b of this title or any other provision of this title, a consumer reporting agency shall furnish identifying information respecting a consumer, limited to name, address, former addresses, places of employment, or former places of employment, to the Federal Bureau of Investigation when presented with a written request, signed by the Director or the Director's designee, which certifies compliance with this subsection. The Director or the Director' s designee in a position not lower than Deputy Assistant Director at Bureau headquarters or a Special Agent in Charge of a Bureau field office designated by the Director may make such a certification only if the Director or the Director' s designee has determined in writing that such information is sought for the conduct of an authorized investigation to protect against international terrorism or clandestine intelligence activities, provided that such an investigation of a United States person is not conducted solely upon the basis of activities protected by the first amendment to the Constitution of the United States.

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Posted On: September 22, 2006 by Michael J. Hassen Email This Post

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McKell v. Washington Mutual-Class Action Defense Cases: Defense Motion To Dismiss Class Action Improperly Granted As To Breach of Contract And UCL Claims Based On Federal RESPA Violations California Court Holds

California Court Holds as Matter of First Impression that RESPA Prohibits Lender from Marking Up Costs of Another Provider's Services Without Providing Additional Services of its Own

Plaintiffs filed a putative class action lawsuit against Washington Mutual Bank in California state court alleging inter alia violations of California’s unfair competition laws (UCL), Consumers Legal Remedies Act (CLRA), and breach of contract. “The basis of all causes of action was defendants’ overcharging plaintiffs for underwriting, tax services, and wire transfer fees in conjunction with home loans. Defendants charged plaintiffs more for these services than defendants paid the service providers.” McKell v. Washington Mutual Bank, ___ Cal.App.4th ___, 2006 WL 2664130 (Cal.App. September 18, 2006) [Slip Opn., at 2]. Plaintiffs’ UCL claim was premised upon alleged violations of the California Residential Mortgage Lending Act (CRMLA) and the federal Real Estate Settlement Procedures Act (RESPA) and Regulations X, among other state and federal laws. Slip Opn., at 5. The trial court granted a defense motion to dismiss the class action complaint, presumably on the ground that the claims “turn on the alleged existence of an agreement requiring Washington Mutual to charge no more than pass-through costs for underwriting, tax services, and wire transfers,” id., at 3, which plaintiffs could not do. The California Court of Appeal affirmed in part and reversed in part. We do not here discuss those aspects of the trial court’s ruling that the divided appellate court opinion affirmed. Rather, we focus on the Court of Appeal’s holdings that plaintiffs had adequately pleaded UCL and breach of contract claims.

The appellate court first held that the trial court did not err “in requiring plaintiffs to plead a factual basis for implying an agreement by [the Bank] to charge only pass-though costs,” Slip Opn., at 8. But in analyzing the UCL claims, the Court of Appeal explained at page 10,

Continue reading "McKell v. Washington Mutual-Class Action Defense Cases: Defense Motion To Dismiss Class Action Improperly Granted As To Breach of Contract And UCL Claims Based On Federal RESPA Violations California Court Holds" »

Posted On: September 22, 2006 by Michael J. Hassen Email This Post

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Cavin v. Home Loan Center-Class Action Defense Cases: Federal Fair Credit Reporting Act (FCRA) Prohibits Private Right Of Action For Violations Of § 1681m’s Disclosure Requirement Illinois District Court Holds

Illinois Federal Court Grants in Part Motion to Certify Class Action but Dismisses FCRA § 1681m Disclosure Violation Claim

Plaintiffs filed a class action against Home Loan Center alleging that it violated the federal Fair Credit Reporting Act (FCRA), 15 U.S.C. §§ 1681 et seq., by accessing their credit. Cavin v. Home Loan Center, Inc., 236 F.R.D. 387 (N.D. Ill. 2006). The plaintiffs’ lawyer filed a motion for class certification, together with a motion to compel discovery; defense lawyers argued inter alia that FCRA does not permit private rights of action for alleged violations of the disclosure requirements imposed by FCRA § 1681m. The district court granted in part and denied in part both motions. The court also dismissed plaintiffs’ § 1681m claim, agreeing with defense attorneys that no such claim could be maintained.

The lawsuit arose out of three letters sent to plaintiffs by Home Loan Center concerning a “‘prescreened’ offer of credit [that] is based on information in your credit report indicating that you meet certain criteria.” Unless authorized by the consumer, the FCRA prohibits credit reporting agencies from disclosing consumer information unless “the request is in connection with a ‘firm offer of credit.’” Cavin, at 390 (citing 15 U.S.C. § 1681b(c)(1)(B)). Plaintiffs alleged that the letters were not “firm offers of credit” and, accordingly, the lender violated § 1681n, and they alleged further that the letters violated the disclosure requirements contained in § 1681m. Id. Plaintiffs sought certification of a class action under Rule 23(b)(3), which the district court granted for reasons summarized in the Note below.

Continue reading "Cavin v. Home Loan Center-Class Action Defense Cases: Federal Fair Credit Reporting Act (FCRA) Prohibits Private Right Of Action For Violations Of § 1681m’s Disclosure Requirement Illinois District Court Holds" »

Posted On: September 21, 2006 by Michael J. Hassen Email This Post

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Class Action Defense Cases-In re New Motor Vehicles: Federal Court Lacks Authority To Give “Preliminary Approval” To Proposed Settlement Of Class Action Maine District Court Holds

Maine Federal Court Denies Joint Motion for “Preliminary Approval” of Proposed Settlement of Class Action Finding that it Lacked Authority Under Rule 23 to Grant the Motion or to Make a “Preliminary Fairness Determination”

In connection with class action lawsuits against General Motors, Toyota, and other car companies, transferred to the District of Maine by the Judicial Panel on Multidistrict Litigation for pretrial purposes, the defense and plaintiff attorneys in the Toyota lawsuit requested that the federal court preliminarily approve a proposed settlement of the class action. In re New Motor Vehicles Canadian Export Antitrust Litig., 236 F.R.D. 53, 55 (D. Maine 2006). The district court denied the request, holding that “Rule 23 does not provide for ‘preliminary approval’ or a ‘preliminary fairness determination.’” Id. The court acknowledged that the Complex Litigation Manual uses that phrase to describe “what a court does in deciding to order notice to the class of a settlement,” but explained that while “it makes sense for a judge to say that a particular settlement has no chance of approval . . . there is criticism of calling this ‘preliminary approval.’” Id., at 55-56 (citations omitted).

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Posted On: September 20, 2006 by Michael J. Hassen Email This Post

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Class Action Defense Issues—Federal Trade Commission Publishes 2006 Annual Report on Fair Debt Collection Practices Act (FDCPA)

Defense attorneys frequently face class action lawsuits alleging violations of the federal Fair Debt Collection Practices Act (FDCPA), which prohibits abusive, deceptive or otherwise improper debt collection practices by third-party debt collectors. At the same time, however, the FDCPA permits reasonable efforts to collect legitimate debts. The Federal Trade Commission is one of several federal agencies with enforcement obligations under the FDCPA. The FTC has primary enforcement responsibility under the FDCPA, and it is charged with preparing an annual report for Congress summarizing its administrative and enforcement actions it during the prior year. The report also summarizes consumer complaints concerning debt collection practices. The FTC’s 2006 Annual Report to Congress is now published.

Download PDF file of the Federal Trade Commission 2006 Annual Report on the Fair Debt Collection Practices Act

Posted On: September 19, 2006 by Michael J. Hassen Email This Post

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Airborne Express Class Action Defense Case-Hicks v. Airborne Express: Illinois Appellate Court Affirms Summary Judgment In Favor Of Defense In Breach Of Contract Class Action

Carrier’s Contract Limited Liability for Late Package Deliveries to Another Free Delivery Justify Trial Court Order Granting Defense Motion for Summary Judgment in Putative Class Action

Plaintiff filed a putative class action against Airborne Express for failing to deliver packages on time, and sought as damages the difference between the value of the service he requested and the value of the service he received. Hicks v. Airborne Express, Inc., ___ N.E.2d ___, 2006 WL 2105657 (Ill.App. July 25, 2006). The defense moved for summary judgment on the grounds that the contract limited the customers’ damages for the carrier’s breach of its promise to deliver a package on time to another delivery free of charge, and that Airborne had provided plaintiff with that remedy. Slip Opn., at 2-3. The trial court agreed with the defense, “finding that the parties had agreed to an exclusive remedy, i.e., another Flight-Ready envelope, for Airborne’s breach of the contract to deliver [plaintiff’s] package by noon the next day.” Id., at 3. The appellate court affirmed.

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Posted On: September 18, 2006 by Michael J. Hassen Email This Post

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Intel Class Action Defense Case-Barbara's Sales v. Intel: California Law Applies To Unfair Business Practice Class Action Against Intel And Nationwide Class Should Have Been Certified Illinois Court Holds

After Trial Court Held that Illinois Law Applies to Unfair Business Practice Class Action Against Intel and Certified Only a Statewide Class. Appellate Court Reversed and Held California Law Applies and Nationwide Class Should Have Been Certified

Purchasers of computers run by Intel’s Pentium 4 processors filed a nationwide class action in Illinois state court alleging claims for unfair business practices under California law and Illinois law based on the allegation that, contrary to its billion dollar marketing campaign, the Pentium 4 performed no better than the Pentium III. Barbara’s Sales, Inc. v. Intel Corp., __ N.E.2d __ (Ill.App. July 25, 2006). Defense attorneys opposed class certification in part on the grounds that Illinois law applied thus barring the two claims based on California law - one under California’s Consumer Legal Remedies Act (CLRA) and one under California’s Unfair Competition Law (UCL). The trial court agreed that Illinois law applied and denied class certification on the California-law claims. The trial court also found that Illinois law “could not be applied to a nationwide class action” and so certified only a statewide class under the Illinois Consumer Fraud and Deceptive Business Practices Act claim. Slip Opn., at 4-5. The appellate court reversed, rejecting defense arguments that California law should not be applied.

Continue reading "Intel Class Action Defense Case-Barbara's Sales v. Intel: California Law Applies To Unfair Business Practice Class Action Against Intel And Nationwide Class Should Have Been Certified Illinois Court Holds" »

Posted On: September 17, 2006 by Michael J. Hassen Email This Post

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15 U.S.C. § 1681t – Relation to State Laws: Statutory Provisions for Defense Attorneys Who Defend Class Actions Brought Under the FCRA (Fair Credit Reporting Act)

As a resource for the class action defense lawyer who defends against class actions under the Fair Credit Reporting Act (FCRA), 15 U.S.C. § 1681 et seq., we provide the text of the FCRA. Congress provided for the relation to State laws in Section 1681t as follows:

§ 1681t. Relation to State laws

(a) In general.

Except as provided in subsections (b) and (c), this title does not annul, alter, affect, or exempt any person subject to the provisions of this title from complying with the laws of any State with respect to the collection, distribution, or use of any information on consumers, or for the prevention or mitigation of identity theft, except to the extent that those laws are inconsistent with any provision of this title, and then only to the extent of the inconsistency.

(b) General exceptions.

No requirement or prohibition may be imposed under the laws of any State

(1) with respect to any subject matter regulated under

(A) subsection (c) or (e) of section 1681b of this title, relating to the prescreening of consumer reports;

(B) section 1681i of this title, relating to the time by which a consumer reporting agency must take any action, including the provision of notification to a consumer or other person, in any procedure related to the disputed accuracy of information in a consumer' s file, except that this subparagraph shall not apply to any State law in effect on the date of enactment of the Consumer Credit Reporting Reform Act of 1996;

(C) subsections (a) and (b) of section 1681m of this title, relating to the duties of a person who takes any adverse action with respect to a consumer;

(D) section 1681m(d) of this title, relating to the duties of persons who use a consumer report of a consumer in connection with any credit or insurance transaction that is not initiated by the consumer and that consists of a firm offer of credit or insurance;

(E) section 1681c of this title, relating to information contained in consumer reports, except that this subparagraph shall not apply to any State law in effect on the date of enactment of the Consumer Credit Reporting Reform Act of 1996;

(F) section 1681s-2 of this title, relating to the responsibilities of persons who furnish information to consumer reporting agencies, except that this paragraph shall not apply

(i) with respect to section 54A(a) of chapter 93 of the Massachusetts Annotated Laws (as in effect on the date of enactment of the Consumer Credit Reporting Reform Act of 1996); or

(ii) with respect to section 1785.25(a) of the California Civil Code (as in effect on the date of enactment of the Consumer Credit Reporting Reform Act of 1996);

(G) section 1681g(e) of this title, relating to information available to victims under section 1681g(e) of this title;

Continue reading "15 U.S.C. § 1681t – Relation to State Laws: Statutory Provisions for Defense Attorneys Who Defend Class Actions Brought Under the FCRA (Fair Credit Reporting Act)" »

Posted On: September 16, 2006 by Michael J. Hassen Email This Post

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15 U.S.C. § 1681s-3 – Affiliate Sharing: Statutory Provisions for Attorneys who Defend Class Action Brought Under the FCRA (Fair Credit Reporting Act)

As a resource for class action defense attorneys who defend 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 specifically addressed the issue of the sharing of consumer information among affiliates, providing as follows in Section 1681s-3:

§ 1681s-3. Affiliate sharing

(a) Special Rule for Solicitation for Purposes of Marketing

(1) Notice.

Any person that receives from another person related to it by common ownership or affiliated by corporate control a communication of information that would be a consumer report, but for clauses (i), (ii), and (iii) of section 1681a(d)(2)(A) of this title, may not use the information to make a solicitation for marketing purposes to a consumer about its products or services, unless—

(A) it is clearly and conspicuously disclosed to the consumer that the information may be communicated among such persons for purposes of making such solicitations to the consumer; and

(B) the consumer is provided an opportunity and a simple method to prohibit the making of such solicitations to the consumer by such person.

(2) Consumer Choice

(A) In general.

The notice required under paragraph (1) shall allow the consumer the opportunity to prohibit all solicitations referred to in such paragraph, and may allow the consumer to choose from different options when electing to prohibit the sending of such solicitations, including options regarding the types of entities and information covered, and which methods of delivering solicitations the consumer elects to prohibit.

(B) Format.

Notwithstanding subparagraph (A), the notice required under paragraph (1) shall be clear, conspicuous, and concise, and any method provided under paragraph (1)(B) shall be simple. The regulations prescribed to implement this section shall provide specific guidance regarding how to comply with such standards.

(3) Duration

(A) In general.

The election of a consumer pursuant to paragraph (1)(B) to prohibit the making of solicitations shall be effective for at least 5 years, beginning on the date on which the person receives the election of the consumer, unless the consumer requests that such election be revoked.

(B) Notice upon expiration of effective period.

At such time as the election of a consumer pursuant to paragraph (1)(B) is no longer effective, a person may not use information that the person receives in the manner described in paragraph (1) to make any solicitation for marketing purposes to the consumer, unless the consumer receives a notice and an opportunity, using a simple method, to extend the opt-out for another period of at least 5 years, pursuant to the procedures described in paragraph (1).

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Posted On: September 15, 2006 by Michael J. Hassen Email This Post

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Public Accommodation/ADA Claims Regain First Place In California Class Action Filings

California class action defense attorneys once again confront more public accommodation lawsuits than employment law claims. In an effort to assist class action defense attorneys to 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. Thus far, employment law cases have led the list each week since we began making these reports. This week, however, class action complaints involving public accommodation/Americans with Disabilities Act (ADA) cases lead the list. This report covers the time period from September 8 - September 14, 2006. We include only those categories that include 10% or more of the class action filings during the relevant timeframe. Approximately 47 class action lawsuits were filed in these California state and federal courts during that time period, of which 15 involved public accommodation/ADA claims (32%). The second place category consists of 14 new employment law class action filings (30%).

Posted On: September 15, 2006 by Michael J. Hassen Email This Post

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Freeman v. DirecTV-Class Action Defense Cases: Federal Electronic Communications Privacy Act (ECPA) Does Not Provide Private Right Of Action For Secondary Liability Claims Ninth Circuit Holds

Resolving Issue of First Impression, Ninth Circuit Affirms Order Granting Defense Motion to Dismiss ECPA Class Action Alleging “Secondary Liability” Claims Under Federal Electronic Communications Privacy Act

DirecTV filed suit against an individual in Canada to enjoin the pirating of its satellite digital television signal and, in the course of that litigation, obtained a court order permitting it to seize evidence related to piracy activities that was accessed, recorded and processed by a third party, ICG. The order provided for the information “to be held in the ‘custody of [DirecTV’s] solicitors pending the trial” and for the appointment of an “independent solicitor”; DirecTV instructed, however, that all information was to be held by the independent solicitor rather than its own lawyers. After the Canadian action was completed, DirecTV filed suit in the United States against Lawrence Freeman, alleging that he engaged in “the distribution of illegal signal theft devices.” After the parties entered into a settlement and release of that lawsuit, Freeman filed a putative class action against DirecTV and ICG for allegedly violating the federal Electronic Communications Privacy Act (ECPA), 18 U.S.C. §§ 2702 and 2707. Freeman v. DirecTV, Inc., 457 F.3d 1001, 1002-03 (9th Cir. 2006). Defense attorneys moved to dismiss the action on three grounds; the federal district court granted the motion on the ground that “that 18 U.S.C. § 2702 does not provide a basis for asserting conspiracy and aiding and abetting claims.” Id., at 1004. The Ninth Circuit affirmed, summarizing at page 1009:

Continue reading "Freeman v. DirecTV-Class Action Defense Cases: Federal Electronic Communications Privacy Act (ECPA) Does Not Provide Private Right Of Action For Secondary Liability Claims Ninth Circuit Holds" »

Posted On: September 14, 2006 by Michael J. Hassen Email This Post

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Class Action Defense Cases-In re “A Million Little Pieces”: Judicial Panel On Multidistrict Litigation (MDL) Grants Defense Motion To Centralize Class Action Litigation In The Southern District Of New York

Unopposed Defense Motion to Centralization of Individual and Class Action Lawsuits Based on Book “A Million Little Pieces” Granted

Following the disclosure of false information in James Frey’s book A Million Little Pieces¸ and the filing of at least a dozen individual and class action lawsuits alleging “various state statutory and common law claims, such as negligence, consumer fraud, breach of contract, and unjust enrichment,” defense attorneys for Random House and Doubleday moved the Judicial Panel on Multidistrict Litigation (MDL) pursuant to 28 U.S.C. § 1407 for an order centralizing for pretrial purposes all pending and tag-along lawsuits in the Southern District of New York. In re “A Million Little Pieces” Litig., 435 F.Supp.2d 1336, 1337-38 (Jud.Pan.Mult.Lit. 2006). Centralization was unopposed, though the plaintiffs did not agree on the appropriate transferee court. The Judicial Panel granted the motion, noting that the lawsuits “share allegations” including “that the book contained material fabrications” and “that advertisements and marketing concerning the book were false and misleading, inasmuch as the book was marketed as a work on nonfiction.” Id., at 1337-38. The Panel agreed with defense attorneys that the Southern District of New York was an appropriate transferee court. Id., at 1338.

NOTE: We summarize this order for the purpose of noting that soon after the actions were centralized the parties reached a proposed settlement for resolution of the litigation. The author believes that this is one of the main benefits of centralization under 28 U.S.C. § 1407 - the defense is far more likely to agree to a settlement when it will dispose of all pending litigation rather than trying to reach piecemeal resolutions in various lawsuits, particularly when the settlement reached in one lawsuit may be used as a floor for settlement discussions by plaintiffs’ attorneys in the other lawsuits.

Download PDF file of In re "A Million Little Pieces" Litigation

Posted On: September 14, 2006 by Michael J. Hassen Email This Post

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New York Federal Court Considers Defense Arguments Against Certification Of Class Action Against Tobacco Companies

Melanie Warner and Colin Moynihan report a New York federal court is considering whether to certify as a class action a federal RICO (Racketeer Influenced Corrupt Organizations Act) lawsuit that alleges tobacco companies “deceived smokers for years about the safety of light cigarettes” by making smokers think that they were “safer or less addicting.” Defense attorneys strenuously opposed the motion, reportedly arguing differences in the reasons people smoke - such as “that many people smoked light cigarettes because they liked the taste, not for health reasons or as part of an attempt to quit smoking” - and differences in the ways people smoked rendered the case unsuitable for treatment as a class action. Warner and Moynihan state that the federal court questioned plaintiffs’ attorneys about the size of the class (which plaintiffs’ lawyers estimate to be in the tens of millions given that the sale of light cigarettes accounts for 45% of the market) and the method by which they estimated damages to be in excess of $20 billion.

While many similar cases have proved unsuccessful, the New York federal judge will be considering the motion in the wake of the detailed 1,600-page opinion last month by District of Columbia federal judge Gladys Kessler, “who found that cigarette companies engaged in decades of fraud and racketeering, including misleading smokers and concealing information about the health risks of light cigarettes.” The article describes Judge Kessler’s opinion as “a searing indictment of conduct by tobacco companies over the last 40 years.”

The article by Melanie Warner and Colin Moynihan, entitled “Judge Weighs New Trial Against Tobacco Companies,” may be found in Section C of the September 14, 2006 edition of the New York Times.

Posted On: September 14, 2006 by Michael J. Hassen Email This Post

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Class Action Defense Cases-In re Mutual Funds: Federal District Court Grants Defense Motion To Dismiss Class Action Because “Plaintiffs’ Artful Attempt At Avoiding SLUSA Preemption Ultimately Fails”

Maryland Federal Court Grants Defense Motion to Dismiss Class Action Despite Plaintiffs’ Attempt to Plead Around Securities Litigation Uniform Standards Act of 1998 (SLUSA)

Plaintiffs filed putative class action lawsuits in Illinois state court alleging state law causes of action carefully pleaded “to avoid the preemptive scope of the Securities Litigation Uniform Standards Act” and focusing on the theory “that the defendants negligently breached state common law duties” by using “stale” mutual fund prices - that is, mutual fund prices not based on “the most recent market information.” In re Mutual Funds Investment Litig., 437 F.Supp.2d 439, 440 (D. Md. 2006). Defense attorneys removed the action to federal court, and the Judicial Panel on Multidistrict Litigation transferred the cases to Judge Motz of the Maryland district court. After the defense moved to dismiss the case as preempted by SLUSA, “plaintiffs filed amended complaints . . . that eliminate any explicit mention of misrepresentation and deception, and that plead only one cause of action: common law negligence.” Id., at 442.

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Posted On: September 13, 2006 by Michael J. Hassen Email This Post

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Allstate Katrina Class Action Defense Case-Vaz v. Allstate: Mississippi Federal Court Denies Motion For Certification Of Class Action Against Allstate Based On Hurricane Katrina Claims

Becky Yerak of the Chicago Tribune reports that a federal district court has denied a request to certify a class action of Mississippi policyholders against Allstate Insurance Company arising out of the handling of Hurricane Katrina claims, agreeing with defense attorneys that "each contract is a separate transaction" and that "[t]he storm was vastly different in its effect depending on the specific geographic location of each particular home." Yerak notes that less than a month ago another Mississippi federal court denies a motion for class-action certification in a lawsuit against State Farm Fire & Casualty Company by its policyholders arising out of the Hurricane Katrina claims. Plaintiffs' lawyer in the Allstate case told Yerak that he will seek rehearing of the ruling and then file an appeal.

Becky Yerak's article, entitled "Katrina ruling favors Allstate: No class-action status for Mississippi claims," may be found in the Business section of the September 12, 2006 edition of the Chicago Tribune.

Posted On: September 13, 2006 by Michael J. Hassen Email This Post

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Class Action Defense Cases-Blackman v. District of Columbia: Federal Court Failed To Properly Certify Orders For Appeal And Defense Correct That Attorney Fees In Section 1983 Class Actions To Enforce IDEA Are Capped DC Circuit Holds

DC Circuit Agrees With Defense that Attorney Fee Awards in Section 1983 Class Action to Enforce IDEA (Individuals with Disabilities Education Act) are Capped by IDEA, but Holds that Federal District Court Failed to Properly Certify Two Attorney Fee Orders for Appeal

Following substantial litigation in multiple consolidated class action lawsuits against the District of Columbia, the federal district court rejected defense arguments and entered three separate attorney fees awards against the District. Defense attorneys sought interlocutory review of the attorney fee orders; the D.C. Circuit Court of Appeals held (1) it did not have jurisdiction over two of the orders because the district court failed to properly certify them for appeal, and (2) the district court erred in concluding that the Individuals with Disabilities Education Act (IDEA) did not limit the amount of fees that could be awarded in section 1983 actions to enforce the IDEA. Blackman v. District of Columbia, 456 F.3d 167 (D.C. Cir. 2006).

Congress enacted legislation limiting the amount of attorney fees that could be awarded to prevailing parties in IDEA cases against the District of Columbia to stem “‘the growth in legal expenses and litigation associated with special education in the District of Columbia and the usurping of resources from education to pay attorney fees.’” Blackman, at 170 (quoting H.R.Rep No. 195-670, at 50 (1998)). Four separate class action lawsuits were filed against the District under section 1983 seeking to enforce the IDEA, two of which were consolidated as a single lawsuit leaving three distinct albeit consolidated class actions pending. Id., at 171-72. The district court ordered injunctive relief in two of the cases, but not the third. Eventually the plaintiffs in all three actions sought attorney fees. The District argued that IDEA capped any attorney fee award against it, and that attorney fees were not warranted in the action in which the district court failed to order injunctive relief because the plaintiffs therein were not “prevailing parties.” The district court rejected both arguments and awarded attorney fees in all three actions. Id., at 173-74.

Continue reading "Class Action Defense Cases-Blackman v. District of Columbia: Federal Court Failed To Properly Certify Orders For Appeal And Defense Correct That Attorney Fees In Section 1983 Class Actions To Enforce IDEA Are Capped DC Circuit Holds" »

Posted On: September 12, 2006 by Michael J. Hassen Email This Post

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Class Action Defense Cases-Land Grantors v. United States: Over Defense Objection Federal Claims Court Certifies Only Third Class Action Under Revised RCFC 23

Court of Federal Claims Rejects Federal Government’s Defense Arguments and Certifies Class Action Under RCFC 23

On June 22, 2006, the Court of Federal Claims certified, over defense objections, only the third class action under RCFC 23 since the statute’s substantial revision in May 2002. Land Grantors in Henderson, Union & Webster Counties, Kentucky v. United States, 71 Fed.Cl. 614 (Ct. Cl. 2006). Briefly, the federal government acquired about 36,000 acres of land in Kentucky to establish what became Camp Breckinridge. Most of the land had been family farms, and it was acquired - either by settlement or jury verdict - after the government initiated condemnation proceedings. From 1942-1944, the government paid approximately $3.1 million for fee simple title to the land. In 1951, the government learned of gas and oil reserves on the property, and from 1957-1964 it realized more than $1.8 million in lease revenues. After Camp Breckinridge became inactive, in 1966 the governmental sold the coal rights for $7.4 million, and the gas, oil and mineral rights for almost $24.6 million. Former landowners claimed “they were paid nothing for their coal, gas, oil, and other mineral rights or a de minimus amount for existing leases when their land was condemned in 1942-1944.” Id., at 617-18. Still later, the government sold the surface rights to the condemned land for almost $6 million. Id., at 618. In 1993, Congress intervened. Id., at 618-19.

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Posted On: September 11, 2006 by Michael J. Hassen Email This Post

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Class Action Law Firm Milberg Weiss Opens Checkbook To Keep Attorneys

As Defections Mount, Class Action Firm Offers Financial Incentives to Retain Lawyers

We have devoted several articles to the trials facing class action plaintiff firm Milberg Weiss Bershad & Schulman, from its federal indictment for allegedly paying millions in kickbacks to clients to serve as class representatives to the continual loss of top attorneys. Now Nathan Koppel of the Wall Street Journal reports that Milberg Weiss has decided to fight defections with a different kind of kickback - bonuses and higher salaries for attorneys who stay with the firm. Koppel reports that almost half of the Milberg Weiss partners have abandoned ship in the wake of the firm’s federal indictment on fraud charges. In addition to the 20 partners who have left (or soon will leave) the firm, about 20 more lawyers have left as well.

Koppel reports that the firm that once had about 110 lawyers and now has about 70 “has promised special bonuses and fatter paychecks for people who stay.” Koppel further reports Weiss has offered partners “a greater share of the firm’s equity or higher salaries” and that the salaries of some partners may double.

Nathan Koppel’s article, entitled “At Milberg Weiss, A Move to Stanch Loss of Top Talent,” may be found on page B1 of the September 9, 2006 online edition of the Wall Street Journal.

Posted On: September 11, 2006 by Michael J. Hassen Email This Post

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Class Action Defense Cases—Trevizo v. Adams: Tenth Circuit Affirms Dismissal of § 1983 Class Action Claims Against City And Denial Of Class Certification

District Court did not Abuse Discretion in Denying Class Certification for Lack of Commonality and Numerosity even though Class Contained 84 Members and in Granting Defense Motion for Summary Judgment Tenth Circuit Holds

Thirty-three individuals filed a putative class action against Salt Lake City and certain law enforcement officers alleging “gross improprieties from the SWAT-style police raid” and setting forth “a litany of horrific facts to support their claims.” Trevizo v. Adams, 455 F.3d 1155, 1158, 1159 (10th Cir. 2006). The district court denied a motion to certify the action as a class action, and subsequently granted a defense motion for summary judgment that dismissed all claims as to the ten plaintiffs who failed to appear for deposition. The court denied class certification based on numerosity and commonality. Id., at 1162. The Tenth Circuit affirmed.

As to the defense summary judgment motion, the Circuit Court held that because plaintiffs did not appear for deposition “it was incumbent upon [them] to provide – at the very least – affidavits detailing what happened to them” but they didn’t. Trevizo, at 1160.

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Posted On: September 10, 2006 by Michael J. Hassen Email This Post

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Class Action Defense Cases-Judicial Panel on Multidistrict Litigation (MDL) Rejects Federal Courts Requested By Plaintiffs And Defense, And Transfers Class Actions Against Volkswagon To District Of Massachusetts Under 28 U.S.C. § 1407

MDL Judicial Panel Transfers Class Action Lawsuits to Massachusetts Despite Fact that No Cases were Pending in that State

After four statewide class actions were filed against Volkswagon of America arising out of its August 1004 warranty extension/reimbursement program for certain Volkswagon and Audi vehicles, defense and plaintiff attorneys filed a § 1407 motion for centralization of the litigation. In re Volkswagon and Audi Warranty Extension Litig., ___ F.Supp.2d ___, 2006 WL 2548199 (Jud.Pan.Mult.Lit., August 29, 2006). The lawsuits had been filed in California, Florida, Illinois and Pennsylvania. The plaintiffs requested transfer to the Southern District of Illinois, and the defense requested centralization in the Eastern District of Pennsylvania. Pursuant to 28 U.S.C. § 1407, the Judicial Panel granted the joint motion for centralization, but transferred the cases to the District of Massachusetts because “[b]y centralizing this litigation before Judge Joseph Tauro, we are assigning this litigation to a jurist who has both the time and experience to steer this litigation on a prudent course.”

NOTE: This case illustrates that the Judicial Panel takes its job quite seriously. While the orders granting § 1407 motions often seem identical, the similarity in language - necessitated by the statutory requirements for centralization - belies the care the Judicial Panel exercises in ruling upon these motions.

Download PDF file of In re Volkswagon Transfer Order

Posted On: September 10, 2006 by Michael J. Hassen Email This Post

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15 U.S.C. § 1681s-2 – Responsibilities of Furnishers of Information to Consumer Reporting Agencies: Statutory Provisions of the FCRA (Fair Credit Reporting Act) for Class Action Defense Attorneys

As a resource for class action defense attorneys who defend 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 outlined in detail the responsibilities of those who furnish information to consumer reporting agencies in Section 1681s-2 as follows:

§ 1681s-2. Responsibilities of furnishers of information to consumer reporting agencies

(a) Duty of Furnishers of Information to Provide Accurate Information

(1) Prohibition

(A) Reporting information with actual knowledge of errors.

A person shall not furnish any information relating to a consumer to any consumer reporting agency if the person knows or has reasonable cause to believe that the information is inaccurate.

(B) Reporting information after notice and confirmation of errors.

A person shall not furnish information relating to a consumer to any consumer reporting agency if

(i) the person has been notified by the consumer, at the address specified by the person for such notices, that specific information is inaccurate; and

(ii) the information is, in fact, inaccurate.

(C) No address requirement.

A person who clearly and conspicuously specifies to the consumer an address for notices referred to in subparagraph (B) shall not be subject to subparagraph (A); however, nothing in subparagraph (B) shall require a person to specify such an address.

(D) Definition.

For purposes of subparagraph (A), the term “reasonable cause to believe that the information is inaccurate” means having specific knowledge, other than solely allegations by the consumer, that would cause a reasonable person to have substantial doubts about the accuracy of the information.

(2) Duty to correct and update information.

A person who

(A) regularly and in the ordinary course of business furnishes information to one or more consumer reporting agencies about the person's transactions or experiences with any consumer; and

(B) has furnished to a consumer reporting agency information that the person determines is not complete or accurate, shall promptly notify the consumer reporting agency of that determination and provide to the agency any corrections to that information, or any additional information, that is necessary to make the information provided by the person to the agency complete and accurate, and shall not thereafter furnish to the agency any of the information that remains not complete or accurate.

(3) Duty to provide notice of dispute.

If the completeness or accuracy of any information furnished by any person to any consumer reporting agency is disputed to such person by a consumer, the person may not furnish the information to any consumer reporting agency without notice that such information is disputed by the consumer.

(4) Duty to provide notice of closed accounts.

A person who regularly and in the ordinary course of business furnishes information to a consumer reporting agency regarding a consumer who has a credit account with that person shall notify the agency of the voluntary closure of the account by the consumer, in information regularly furnished for the period in which the account is closed.

(5) Duty to Provide Notice of Delinquency of Accounts

(A) In general.

A person who furnishes information to a consumer reporting agency regarding a delinquent account being placed for collection, charged to profit or loss, or subjected to any similar action shall, not later than 90 days after furnishing the information, notify the agency of the date of delinquency on the account, which shall be the month and year of the commencement of the delinquency on the account that immediately preceded the action.

Continue reading "15 U.S.C. § 1681s-2 – Responsibilities of Furnishers of Information to Consumer Reporting Agencies: Statutory Provisions of the FCRA (Fair Credit Reporting Act) for Class Action Defense Attorneys" »

Posted On: September 9, 2006 by Michael J. Hassen Email This Post

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Class Action Labor Law Cases Again Lead Weekly Filings In California

As a service to class action defense attorneys, we recently began providing unofficial summaries of the categories of new class action lawsuits filed in California. It is our hope that this will permit defense attorneys to anticipate claims against which they may have to defend. This weekly, unofficial summary covers 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 September 1 - September 7, 2006. We include only those categories that include 10% or more of the class action filings during the relevant timeframe.

Approximately 22 class action lawsuits were filed in these California state and federal courts during that time period, and employment law cases once again head up the list. Of the weekly filings, more than half involved employment law claims. In all, a dozen of the new class action cases (55%) alleged labor law violations. The only other category of cases to crack the 10% threshold involved unfair business practice/unfair competition (UCL) claims. During the reported time period, five (5) UCL class action lawsuits, accounting for 23% of the new cases, were filed.

Posted On: September 9, 2006 by Michael J. Hassen Email This Post

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Class Action Defense Cases—In re Pharmacy Benefit Managers: Multidistrict Litigation (MDL) Judicial Panel Transfers Putative Federal Antitrust Class Action Cases To Eastern District Of Pennsylvania Over Defense Objection

Judicial Panel on Multidistrict Litigation (MDL) Grants § 1407 Motion Over Objection of Some Defense Attorneys to Avoid Inconsistent Rulings on Class Action Certification in Federal Antitrust Cases

Six class action lawsuits were filed against Merck, Medco Health, PAID Prescriptions (now part of Medco), ExpressScripts, Caremark, and AdvancePCS (now known as CaremarkPCS) alleging violations of federal antitrust laws based on the “conduct by the pharmacy-benefit manager (PBM) defendants – including the negotiation of rates for the sale of prescription drugs by retail pharmacies.” In re Pharmacy Benefit Managers Antitrust Litig., ___ F.Supp.2d ___, 2006 WL 2548205 (Jud.Pan.Mult.Lit., August 24, 2006). These class action cases were pending in Alabama, California, Illinois and Pennsylvania. One of the Pennsylvania plaintiffs filed a motion pursuant to 28 U.S.C. § 1407 to transfer each of the actions to the Eastern District of Pennsylvania; defense attorneys for ExpressScripts, Caremark and AdvancePCS opposed centralization based on the “unique questions of fact relating to each PBM.” The Panel disagreed, explaining that even though “the contracts between each plan sponsor/PBM will spawn unique discovery, all plaintiffs allege that these contracts create a price-fixing conspiracy” and that “all actions can be expected to focus on similar PBM practices and procedures.” The Judicial Panel concluded that centralization would “avoid duplication of discovery, prevent inconsistent or repetitive pretrial rulings (especially on the issue of class certification), and conserve the resources of the parties, their counsel and the judiciary.” Accordingly, the Panel transferred the cases to the Eastern District of Pennsylvania.

Download PDF file of In re Pharmacy Benefit Managers Transfer Order

Posted On: September 9, 2006 by Michael J. Hassen Email This Post

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Class Action Defense Cases-Judicial Panel on Multidistrict Litigation (MDL) Transfers Class Action Against JP Morgan Chase To Northern District Of Illinois Under 28 U.S.C. § 1407

MDL Judicial Panel Centralizes Class Action Lawsuits in Illinois Because Action in that State is More Procedurally Advanced

Three lawsuits were filed against JP Morgan Chase alleging misrepresentations in connection with its merger in 2004 with Bank One; two lawsuits were filed in Delaware, and one lawsuit was filed in Illinois. The plaintiff in the Delaware lawsuits moved for centralization of the class actions in Delaware. The defense supported centralization, but requested that the cases be transferred to the Southern District of New York. The Illinois plaintiff opposed centralization but if the motion is granted requested that the Delaware cases be transferred to Illinois. In re JP Morgan Chase & Co. Securities Litig., ___ F. Supp.2d ___, 2006 WL 2548202 (Jud.Pan.Mult.Lit., August 24, 2006). Pursuant to 28 U.S.C. § 1407, the Judicial Panel granted the motion for centralization, but selected the Northern District of Illinois as the transferee court because the first lawsuit had been filed in that court and that litigation “is more procedurally advanced than the two Delaware actions.”

Download PDF file of In re JP Morgan Transfer Order

Posted On: September 9, 2006 by Michael J. Hassen Email This Post

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15 U.S.C. § 1681s-1 – Information on Overdue Child Support Obligations: Statutory Provisions of the FCRA (Fair Credit Reporting Act) for Class Action Defense Attorneys

As a resource for the class action defense lawyer who defends against class actions under the Fair Credit Reporting Act (FCRA), 15 U.S.C. § 1681 et seq., we provide the text of the FCRA. The FCRA specifically addresses the question of information needed in connection with overdue child support obligations as follows:

§ 1681s-1. Information on overdue child support obligations

Notwithstanding any other provision of this title, a consumer reporting agency shall include in any consumer report furnished by the agency in accordance with section 1681b of this title, any information on the failure of the consumer to pay overdue support which

(1) is provided

(A) to the consumer reporting agency by a State or local child support enforcement agency; or

(B) to the consumer reporting agency and verified by any local, State, or Federal government agency; and

(2) antedates the report by 7 years or less.

Posted On: September 8, 2006 by Michael J. Hassen Email This Post

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Class Action Defense Cases-Federal District Court Grants Motion To Dismiss Putative Class Action Alleging 180Solutions Was A Spyware Company

Illinois Federal Court Gives Defense Latest Victory in Spyware Class Action Lawsuits

Eric Benderoff of the Chicago Tribune reports today that a federal district court has granted a motion to dismiss a putative class action against 180solutions (now known as Zango), and quotes the company’s Chief Compliance Officer as stating, “[Plaintiffs] claimed we were a spyware company and that we trespass on people’s computers. We don’t do that; we are invited on the customer’s computer.” This is but the latest defense victory against such class actions: Benderoff states, “So far, there has not been a successful class-action suit against software firms that are accused of planting unwanted and irritating spyware programs on computers.” However, the article identifies at least one lawsuit where plaintiff’s lawyer “successfully argued that spyware companies were trespassing on personal property” which Benderoff describes as “a tactic lifted from environmental law.” Recent governmental efforts to attack the spyware problem may prove more successful, and Benderoff notes that the Federal Trade Commission “has brought six cases to date under its unfair and deceptive practices authority while the Justice Department has pursued spyware cases using the Wiretap Act.”

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Posted On: September 8, 2006 by Michael J. Hassen Email This Post

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Watt v. GMAC Mortgage-RESPA Class Action Defense Cases: Defense Motion To Dismiss RESPA Class Action Properly Granted Because RESPA Does Not Prohibit Servicer From Charging A Fee For Payoff Statements And Does Not Cap Fee Charged Eighth Circuit Holds

Federal District Court Properly Granted Defense Motion to Dismiss RESPA Class Action Because Congress did not Expressly Prohibit Servicers from Charging Fees for Payoff Statements

Borrowers filed a putative class action against GMAC Mortgage Corporation alleging that it violated the federal Real Estate Settlement Procedures Act (RESPA), 12 U.S.C. §§ 2601-2617, “by charging a $20 fee each time the plaintiffs requested their payoff amount from GMAC’s website,” and alleging also breach of contract. The defense moved to dismiss the complaint. The district court granted the motion to dismiss the RESPA claim, but declined to exercise jurisdiction over the contract claim. The Eighth Circuit affirmed. Watt v. GMAC Mortgage Corp., 457 F.3d 781, 782 (8th Cir. 2006).

Plaintiffs argued that RESPA requires responses to “qualified written requests” be provided free of charge because RESPA does not affirmatively state that loan servicers may charge fees for such responses: “Since RESPA imposes a duty to respond but does not stated that servicers may charge fees for statements sent in response to qualified written requests, the [plaintiffs] argue, servicers are prohibited from charging fees.” Watt, at 783. The Circuit Court disagreed, holding at page 783:

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Posted On: September 7, 2006 by Michael J. Hassen Email This Post

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New Study Estimates Shareholder Risk For Options Backdating At $500 Million

Hot on the heels of Julie Creswell’s New York Times article on options backdating comes a report on the costs to shareholders as estimated by a new study expected to be published in the Michigan Law Review next year. That study, according to Eric Dash of the New York Times, was prepared by three University of Michigan researchers and reportedly concludes that while the backdating of stock options increased executive pay by an average of slightly more than 1%, the average decrease in market value was 8%. Put in terms of dollars, Dash reports that the study concludes, “For about $600,000 a year to the executives, shareholders are being put at risk to the tune of $500 million.”

Care should be exercised in reviewing the statistics, however, as Dash reports that the study employs several assumptions and limitations that may not be valid. For example, Dash notes that the study assumes that the stock prices of affected companies “would not recover” - an assumption that appears contrary to information in Ms. Creswell’s article. The study also apparently assumes that the options “were backdated over a 90-day period,” when in fact - as Ms. Creswell’s article explains - many of the options were backdated so long ago that statutes of limitation have run.

Eric Dash’s article, entitled “Report Estimates the Costs Of a Stock Options Scandal,” may be found in Section C. of the September 6, 2006 edition of the New York Times.

Posted On: September 7, 2006 by Michael J. Hassen Email This Post

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FedEx Class Action Defense Case-Hart v. FedEx: CAFA (Class Action Fairness Act) Shifts Burden Of Persuasion From Defense To Plaintiff To Establish Exceptions To Federal Court Jurisdiction Seventh Circuit Holds

As a Matter of First Impression in Seventh Circuit, Court Holds that Class Action Fairness Act of 2005 (CAFA) Shifts Burden to Plaintiff to Establish Exceptions to Federal Court Jurisdiction

After plaintiff filed a putative labor law class action against FedEx in Pennsylvania state court, defense attorneys removed the case to federal court under CAFA (Class Action Fairness Act of 2005). The Judicial Panel on Multidistrict Litigation transferred the class action to the Northern District of Indiana, and plaintiff moved to remand the case to Pennsylvania state court under the “local controversy” or “home-state controversy” exceptions to federal court jurisdiction under CAFA. The district court denied the motion on the ground that plaintiff had failed to meet his burden of establishing that the exceptions applied. Plaintiff appealed the order, and the Seventh Circuit held that CAFA shifted the burden to plaintiff and affirmed. Hart v. FedEx Ground Package System Inc., 457 F.3d 675, 676-77 (7th Cir. 2006).

Plaintiff’s class action alleged the FedEx delivery drivers were misclassified as “independent contractors.” Hart, at 676. The complaint alleged that “greater than two-thirds of the members of the plaintiff class, if not all of the members of the plaintiff class, are citizens of Pennsylvania.” Id., at 677. FedEx removed the lawsuit to federal court under CAFA alleging in the notice of removal that “[u]pon information and belief, some of the proposed class members are not residents of Pennsylvania,” id. Absent CAFA, diversity jurisdiction would not exist. Id., at 676. Plaintiff sought to remand the action under CAFA’s “local controversy” and “home-state controversy” exceptions, see § 1332(d)(4)(B), and urged that under Brill v. Countrywide Home Loans¸ 427 F.3d 446 (7th Cir. 2005), FedEx bore the burden of establishing jurisdiction under CAFA and “also that none of the mandatory exclusions from CAFA jurisdiction found in § 1332(d)(4) applied,” id., at 677.

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Posted On: September 6, 2006 by Michael J. Hassen Email This Post

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Class Action Defense Cases-Frazier v. Pioneer: Removal Of Putative Class Action Under CAFA (Class Action Fairness Act) Proper Because Removing Primary Defendant Not A State And Local Controversy Exception Inapplicable Fifth Circuit Holds

Class Action Fairness Act (CAFA) Permits Removal to Federal Court by Any Primary Defendant Without Consent of Other Defendants and States have no Citizenship for Purposes of CAFA's "Local Controversy" Exception

A putative class action was filed in Louisiana state court against a Canadian company, Pioneer Americas, and Louisiana’s Department of Environmental Quality arising following the release of excessive amounts of mercury into the atmosphere at Pioneer’s hydrogen processing facility. Frazier v. Pioneer Americas LLC, 455 F.3d 542 (5th Cir. 2006). Pioneer’s defense removed the class action to federal court without DEQ’s consent, and the district court denied plaintiffs’ motion to remand it back to state court. In the face of the Class Action Fairness Act of 2005 (CAFA), plaintiffs “did not challenge defendants’ allegation of prima facie CAFA jurisdiction - minimal diversity and at least $5 million in controversy” - but rather argued that two exceptions applied: the exception for class actions against States and the “local controversy exception.” Id., at 544. The district court agreed with the defense that neither exception applied, and the Fifth Circuit affirmed.

Preliminarily, the Circuit Court addressed the $5 million threshold requirement for jurisdiction, even though it found that plaintiffs had not properly raised the issue. The Court explained that CAFA requires only “minimal diversity” and concluded that “the petition, seeking damages for severe injuries suffered by at least 500 people and attorneys’ fees, makes it ‘facially apparent’ that at least $5 million is in controversy, in the aggregate.” Frazier, at 545 (footnotes omitted).

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Posted On: September 5, 2006 by Michael J. Hassen Email This Post

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Defense Attorneys Facing Fewer Class Action Lawsuits Challenging Backdated Stock Option Awards

Plaintiff Lawyers Focus on Derivative Actions Rather than Class Action Lawsuits to Attack Stock Option Backdating Programs

Defense attorneys have expressed surprise at the relatively limited number of class action lawsuits filed in the wake of options-backdating disclosures; Julie Creswell of the New York Times has noticed this, too. In today’s edition of the New York Times, Creswell provides a possible explanation for the dearth of class action filings: “Even when it is clear that options grant dates were manipulated, it is less clear how to calculate damage to specific shareholders. And in many cases, the statute of limitations has expired.”

As a result, plaintiff lawyers have turned to derivative actions to challenge options-backdating programs. Creswell reports that while only 15 securities class action lawsuits challenge stock-option plans, at least 57 derivative actions attacking options-backdating have been filed.

Julie Creswell’s article, entitled “One Route Seems Closed, So Lawyers Try Different Lawsuit in Stock-Option Scandal,” may be round in Section C. of the September 5, 2006, edition of the New York Times.

Posted On: September 5, 2006 by Michael J. Hassen Email This Post

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Boeing Class Action Defense Case-Carpenter v. Boeing: Federal District Court Orders In Labor Law Class Action Decertifying Subclass And Granting Defense Motion For Summary Judgment Affirmed By Tenth Circuit

Tenth Circuit Holds that Interlocutory Review of Class Certification Orders Must be Sought within 10 days of Initial Order, not Order Denying Reconsideration, and that Plaintiffs’ Statistical Evidence Failed to Establish Prima Facie Case of Disparate Impact Because Males may have Worked more Overtime Hours for Reasons Other than Gender

Female employees filed a putative employment class action in federal district court alleging Title VII Civil Rights Act sex discrimination against Boeing on theories of both disparate impact and disparate treatment. Following substantial litigation, that included class certification of certain subclasses, the district court granted a defense motion for summary judgment as to the “hourly” wages subclass “disparate impact” overtime claim. Plaintiffs appealed this ruling - which the district court certified as a final judgment under FRCP Rule 54(b) - and several other class-certification ruling. The Tenth Circuit affirmed. Carpenter v. Boeing Co., 456 F.3d 1183 (10th Cir. 2006).

The Circuit Court began with the class certification rulings, noting that interlocutory appeal of class certification orders may be granted only if sought within 10 days of entry of the order. Carpenter, at 1189 (citing FRCP Rule 23(f)). In this appeal, plaintiffs filed a motion for class certification, which the district court granted in part and denied in part. Almost a year later, plaintiffs filed a “Renewed Motion for Class Certification”; the motion was denied. A few months later plaintiffs filed a “Second Renewed Motion for Class Certification”; this, too, was denied and plaintiffs filed their Rule 23(f) application within 10 days thereafter. Id., at 1188. Boeing argued that the application was untimely, id., at 1189; the Circuit Court agreed and dismissed the application for lack of jurisdiction, id., at 1190-92.

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Posted On: September 4, 2006 by Michael J. Hassen Email This Post

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15 U.S.C. § 1681s – Administrative Enforcement: Statutory Provisions of the FCRA (Fair Credit Reporting Act) for Class Action Defense Attorneys

As a resource for the class action defense lawyer who defends against class action under the Fair Credit Reporting Act (FCRA), 15 U.S.C. § 1681 et seq., we provide the text of the FCRA. The article sets forth the statutory provisions concerning administrative enforcement of the FCRA by the Federal Trade Commission:

§ 1681s. Administrative enforcement

(a) (1) Enforcement by Federal Trade Commission. Compliance with the requirements imposed under this title shall be enforced under the Federal Trade Commission Act [15 U.S.C. §§ 41 et seq.] by the Federal Trade Commission with respect to consumer reporting agencies and all other persons subject thereto, except to the extent that enforcement of the requirements imposed under this title is specifically committed to some other government agency under subsection (b) hereof. For the purpose of the exercise by the Federal Trade Commission of its functions and powers under the Federal Trade Commission Act, a violation of any requirement or prohibition imposed under this title shall constitute an unfair or deceptive act or practice in commerce in violation of section 5(a) of the Federal Trade Commission Act [15 U.S.C. § 45(a)] and shall be subject to enforcement by the Federal Trade Commission under section 5(b) thereof [15 U.S.C. § 45(b)] with respect to any consumer reporting agency or person subject to enforcement by the Federal Trade Commission pursuant to this subsection, irrespective of whether that person is engaged in commerce or meets any other jurisdictional tests in the Federal Trade Commission Act. The Federal Trade Commission shall have such procedural, investigative, and enforcement powers, including the power to issue procedural rules in enforcing compliance with the requirements imposed under this title and to require the filing of reports, the production of documents, and the appearance of witnesses as though the applicable terms and conditions of the Federal Trade Commission Act were part of this title. Any person violating any of the provisions of this title shall be subject to the penalties and entitled to the privileges and immunities provided in the Federal Trade Commission Act as though the applicable terms and provisions thereof were part of this title.

(2) (A) In the event of a knowing violation, which constitutes a pattern or practice of violations of this title, the Commission may commence a civil action to recover a civil penalty in a district court of the United States against any person that violates this title. In such action, such person shall be liable for a civil penalty of not more than $2,500 per violation.

(B) In determining the amount of a civil penalty under subparagraph (A), the court shall take into account the degree of culpability, any history of prior such conduct, ability to pay, effect on ability to continue to do business, and such other matters as justice may require.

(3) Notwithstanding paragraph (2), a court may not impose any civil penalty on a person for a violation of section 1681s-2(a)(1) of this title unless the person has been enjoined from committing the violation, or ordered not to commit the violation, in an action or proceeding brought by or on behalf of the Federal Trade Commission, and has violated the injunction or order, and the court may not impose any civil penalty for any violation occurring before the date of the violation of the injunction or order.

(b) Enforcement by other agencies.

Compliance with the requirements imposed under this title with respect to consumer reporting agencies, persons who use consumer reports from such agencies, persons who furnish information to such agencies, and users of information that are subject to subsection (d) of section 1681m of this title shall be enforced under

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Posted On: September 3, 2006 by Michael J. Hassen Email This Post

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15 U.S.C. §§ 1681q and 1681r – Obtaining Information Under False Pretenses/ Unauthorized Disclosures by Officers or Employees: Statutory Provisions of the FCRA (Fair Credit Reporting Act) for the Class Action Defense Lawyer

As a resource for class action defense attorneys who must defend against actions brought under the Fair Credit Reporting Act (FCRA), 15 U.S.C. § 1681 et seq., we provide the text of the FCRA. The statutory provisions concerning obtaining information under false pretenses and concerning unauthorized disclosure by officers or employees are set forth in Sections 1681q and 1681r, respectively, as follows:

§ 1681q. Obtaining information under false pretenses

Any person who knowingly and willfully obtains information on a consumer from a consumer reporting agency under false pretenses shall be fined under title 18, United States Code, imprisoned for not more than 2 years, or both.

§ 1681r. Unauthorized disclosures by officers or employees

Any officer or employee of a consumer reporting agency who knowingly and willfully provides information concerning an individual from the agency's files to a person not authorized to receive that information shall be fined under title 18, United States Code, imprisoned for not more than 2 years, or both.

Posted On: September 2, 2006 by Michael J. Hassen Email This Post

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Class Action Labor Law/Overtime Claims Regain Top Spot In California Weekly Class Action Filings

To allow the class action defense lawyer to anticipate claims against which she or he 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 August 25 - August 31, 2006, and employment law cases regained sole possession of 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 35 class action lawsuits were filed in these California state and federal courts during that time period, of which 16 involved labor law claims (46%). At least ten (10) of the employment law class action filings allege unpaid overtime (63% of the employment law class action filings and 29% overall). The only other group of class action claims that pass the 10% threshold are six (6) cases transferred by the Judicial Panel on Multidistrict Litigation (17%), MDL 06-1791, concerning the warrantless disclosure of customer telecommunications information.

Posted On: September 2, 2006 by Michael J. Hassen Email This Post

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15 U.S.C. § 1681p – Jurisdiction of Courts/Limitation of Actions: Statutory Provisions of the FCRA (Fair Credit Reporting Act) for the Class Action Defense Attorneys

As a resource for attorneys defending against class actions under the Fair Credit Reporting Act (FCRA), 15 U.S.C. § 1681 et seq., we provide the text of the FCRA. The statutory provisions concerning jurisdiction of courts and applicable statutes of limitation are set forth in Section 1681m as follows:

§ 1681p. Jurisdiction of courts; limitation of actions

An action to enforce any liability created under this title may be brought in any appropriate United States district court, without regard to the amount in controversy, or in any other court of competent jurisdiction, not later than the earlier of (1) 2 years after the date of discovery by the plaintiff of the violation that is the basis for such liability; or (2) 5 years after the date on which the violation that is the basis for such liability occurs.

Posted On: September 2, 2006 by Michael J. Hassen Email This Post

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15 U.S.C. §§ 1681n and 1681o – Civil liability for Willful and Negligent Noncompliance: Statutory Language of the FCRA (Fair Credit Reporting Act) for Class Action Defense Attorneys

As a resource for defense attorneys who defend against class action under the Fair Credit Reporting Act (FCRA), 15 U.S.C. § 1681 et seq., we provide the text of the FCRA. The article sets forth the statutory provisions covering statutory liability for willful and negligent noncompliance with FCRA, which is contained in Section 1681n and 1681o, respectively:

§ 1681n. Civil liability for willful noncompliance

(a) In general.

Any person who willfully fails to comply with any requirement imposed under this title with respect to any consumer is liable to that consumer in an amount equal to the sum of

(1) (A) any actual damages sustained by the consumer as a result of the failure or damages of not less than $100 and not more than $1,000; or

(B) in the case of liability of a natural person for obtaining a consumer report under false pretenses or knowingly without a permissible purpose, actual damages sustained by the consumer as a result of the failure or $1,000, whichever is greater;

(2) such amount of punitive damages as the court may allow; and

(3) in the case of any successful action to enforce any liability under this section, the costs of the action together with reasonable attorney' s fees as determined by the court.

(b) Civil liability for knowing noncompliance.

Any person who obtains a consumer report from a consumer reporting agency under false pretenses or knowingly without a permissible purpose shall be liable to the consumer reporting agency for actual damages sustained by the consumer reporting agency or $1,000, whichever is greater.

(c) Attorney's fees.

Upon a finding by the court that an unsuccessful pleading, motion, or other paper filed in connection with an action under this section was filed in bad faith or for purposes of harassment, the court shall award to the prevailing party attorney' s fees reasonable in relation to the work expended in responding to the pleading, motion, or other paper.

§ 1681o. Civil liability for negligent noncompliance

(a) In general.

Any person who is negligent in failing to comply with any requirement imposed under this title with respect to any consumer is liable to that consumer in an amount equal to the sum of

(1) any actual damages sustained by the consumer as a result of the failure; and

(2) in the case of any successful action to enforce any liability under this section, the costs of the action together with reasonable attorney' s fees as determined by the court.

(b) Attorney's fees.

On a finding by the court that an unsuccessful pleading, motion, or other paper filed in connection with an action under this section was filed in bad faith or for purposes of harassment, the court shall award to the prevailing party attorney' s fees reasonable in relation to the work expended in responding to the pleading, motion, or other paper.

Posted On: September 1, 2006 by Michael J. Hassen Email This Post

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Class Action Defense Issues-Clark v. Capital Credit: Ninth Circuit Affirms In Part And Reverses In Part Federal District Court Judgment In Favor Defense In FDCPA (Fair Debt Collection Practices Act) Case

Ninth Circuit Resolves Several Issues of First Impression Concerning Federal Fair Debt Collection Practices Act (FDCPA), Holding Debtor Can Waive “Cease Communication” Directive, Debt Collectors May Rely on Information Provided by Creditors to Verify Debt, FDCPA is a Strict Liability Statute, and One Act Can Support Multiple Violations

Debtors filed suit against a debt collection agency, its employee and its outside counsel alleging various violations of the federal Fair Debt Collection Practices Act (FDCPA) and Oregon’s Unfair Debt Collection Practices Act. The defense and debtors filed cross-motions for summary judgment; the district court granted the motion brought by the attorney, partially granted the motion brought by the debt collector, and denied the motion brought by the debtors. The Ninth Circuit affirmed in part and reversed in part. Clark v. Capital Credit & Collection Services, Inc., ___ F.3d ___, 2006 WL 2441705 (9th Cir. August 24, 2006). We provide a brief summary of the case, which the Ninth Circuit characterized as “present[ing] a complicated web of problems that has required us to address a litany of issues for which there is a dearth of applicable precedent” and for which it “endeavored to adopt a construction of the FDCPA that recognizes ‘there is room within the [FDCPA] for ethical debt collectors to make occasional unavoidable errors,” Slip Opn., at 10165 (citation omitted).

In an effort to collect a debt, a debt collector sent the debtor a collection notice letter. The debtor disputed the debt and detailed billing problems with the creditor. The debt collector sent a second notice, enclosing an itemized statement from the creditor and claiming that the statement adequately verified the debt. The debtor requested “proper verification” and instructed the debt collector to cease making telephone calls. Slip Opn., at 10143. The debt collector then retained counsel who, in response to a demand for verification of the debt and an end to telephone communications, responded with the same itemized statement previously provided to the debtor. The debtor subsequently called the attorney to discuss the debt, but received a return call from the debt collection agency that “so upset [her] that she was required to obtain therapy.” Id., at 10144. The debtors filed suit.

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