Class Action Defense Blog

Injunctive Relief Obtained Against Defense in ADA Class Action Inadequate to Support Attorney Fee Award Illinois Court Holds

Plaintiffs filed a class action against their employer, Rent-A-Center, alleging violations of the federal Americans with Disabilities Act (ADA) arising out of the employer's requirement that applicants take a psychological test in order to obtain management positions. Karraker v. Rent-A-Center, Inc., 431 F.Supp.2d 883, 885 (C.D. Ill. 2006). Specifically, the class action complaint alleged, "[Rent-A-Center] required all employees or outside applicants seeking management positions to submit to a battery of nine separate written tests. This battery of tests was commonly referred to as the Management Test. One of the individual exams included in the Management Test was the Minnesota Multiphasic Personality Inventory (MMPI). The MMPI is a psychological test used by psychologists to diagnose and treat individuals with abnormal psychological symptoms and personality traits." Id. The district court ultimately certified a class defined as "All past and present employees of Defendant RAC in Illinois who took the APT Management Test." Id. Defense attorneys prevailed on a motion for summary judgment as to all but a single wrongful termination claim. Id., at 886. On appeal, the Seventh Circuit generally affirmed the judgment in favor of the defense, but remanded the matter "so summary judgment could be entered in favor of Plaintiffs on their claim that the MMPI is a medical examination under the ADA." Karraker, at 886. The district court entered that order and, pursuant to plaintiffs' request, the defense agreed to destroy all test results obtained through the APT Management Test. Id. Defense attorneys then moved for summary judgment on the wrongful termination claim. The district court granted the defense motion, thereby resolving the balance of the class action lawsuit. Id.

Plaintiffs' lawyer then filed a petition seeking an award of $267,000 in attorney fees. Karraker, at 886. The district court recognized that the ADA permits a court to award reasonable attorney fees to the prevailing party, see 42 U.S.C. § 12205, but held that plaintiffs did not qualify as the prevailing party under the following definition set forth at page 886:

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Continue reading "Rent-A-Center Class Action Defense Case-Karraker v. Rent-A-Center: Illinois Federal Court Denies Plaintiff Lawyer's Request For Attorney Fees Finding Relief Obtained In ADA Class Action To Be De Minimis" »

Posted In: Class Action Court Decisions

California Federal Court Holds that Plaintiffs Satisfied Rule 23 Requirements for Certification of Class Action Alleging Gender Discrimination in Promotion and Management Practices by Costco

Plaintiff filed a class action against their employer for violations of Title VII of the Civil Rights Act of 1964 and California's Fair Employment and Housing Act alleging "that Costco’s promotion system has a disparate impact on female employees, that Costco’s management discriminates against women in promotions, and that defendant has retaliated against persons seeking redress for discrimination." Ellis v. Costco Wholesale Corp., ___ F.Supp.2d ___, 2007 WL 127800-, *1 (N.D. Cal. January 11, 2007). Plaintiffs' lawyer moved the federal court to certify a nationwide class action on behalf of at least 700 women; defense attorneys opposed the motion and moved to strike the declarations of plaintiffs' experts in support of the motion. Id., at *4, *7. The defense also argued against class action treatment on the grounds that plaintiffs failed to exhaust administrative remedies, id., at *5, and lacked standing, id., at *6. The district court rejected defense arguments and certified a nationwide class action as requested by plaintiffs.

Plaintiffs sought certification of a nationwide class action on behalf of "current and former female employees who have been denied promotion to GM [General Manager] or AGM [Assistant General Manager] or denied Senior Staff jobs important to AGM promotion since January 3, 2002." Ellis, at *5. The district court first addressed the procedural objections raised by defense attorneys . The administrative remedies defense was premised on the argument that plaintiffs' EEOC claim was limited to discriminatory practices in promotion to general manager positions. Id.. Plaintiffs disagreed, and argued that even if it had been limited to GM claims that their other claims were "reasonably related to the allegations in the EEOC charge." Id. The district court agreed, noting that Ninth Circuit case law instructs courts "to construe the EEOC charge 'with utmost liberality.'" Id. (citation omitted). Plaintiffs' EEOC claim provided adequate notice to Costco of the claims asserted in the class action complaint. Id. With respect to Costco's standing arguments, the district court held (1) that former employees may seek injunctive relief on behalf of current employees, because "[t]o hold that employees must continue to work in jobs where they face discrimination in order to challenge discrimination would pervert Article III's injury-in-fact requirement," Ellis, at *6, and (2) that a current AGM may seek injunctive relief on behalf of women denied promotion to AGM and that it would not "delve into the merits" of the discrimination claims at the class certification stage, id.

Continue reading "Costco Class Action Defense Case-Ellis v. Costco: California Federal Court Rejects Defense Arguments And Certifies Class Action Alleging Sex Discrimination" »

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

California Supreme Court Rejects Privacy Rights Arguments of Pioneer Electronics' Defense Attorneys that Consumers Who Contacted Company and Complained about Product Defects Must Thereafter Affirmatively Consent to Release of Contact Information to Attorney Prosecuting Putative Class Action Involving the Same Product Defects In Consumers' Complaints

Plaintiff filed a putative class action against Pioneer Electronics alleging defects in DVD player, seeking to represent "persons who purchased the same model of allegedly defective DVD player." Pioneer Electronics v. Superior Court, 40 Cal.4th 360 (Cal. 2007) [Slip Opn., at 2]. During discovery, Pioneer revealed that it had received 700 - 800 consumer complaints concerning the same DVD player. Id. Plaintiff demanded the addresses and telephone numbers of the consumers who had complained; Pioneer objected asserting the right to privacy protected by the California Constitution. Id. (citing Cal. Const., Art. I, § 1). Ultimately the trial court ordered that a letter be sent to the complaining consumers advising them that their contact information would be disclosed to plaintiff's attorney unless they affirmatively objected to such disclosure. Id., at 4. The California Court of Appeal reversed, granting Pioneer's petition for writ of mandate to compel the trial court to vacate its order and require that consumers affirmatively consent to the release of their contact information. Id., at 4-5. The California Supreme Court reversed the decision of the appellate court, reinstating the trial court's order.

The Supreme Court framed the issue as follows: "Does a complaining purchaser possess a right to privacy protecting him or her from unsolicited contact by a class action plaintiff seeking relief from the vendor to whom the purchaser's complaint was sent?" Slip Opn., at 4. The Court noted that the decision of the Court of Appeal "would place the burden on the discovery proponent to obtain written authorization from each person whose privacy was to be invaded." Id., at 9. In contrast, plaintiff's attorney argued that "consumers who initially contacted Pioneer to express dissatisfaction with its product have a reduced expectation of privacy or confidentiality in the contact information they freely offered to Pioneer for the purpose, presumably, of allowing further communication regarding their complaints." Id., at 6. The Supreme Court agreed, holding that "[r]evealing names, addresses and contact information on persons who have already complained about their Pioneer DVD players would not be particularly sensitive or intrusive." Id., at 13.

Continue reading "Pioneer Electronics Class Action Case-California Supreme Court Holds Consumers Who Have Complained Of Product Defects Need Not Affirmatively Consent To Release Of Contact Information To Plaintiff's Attorney Prosecuting Class Action Based On Those Defects" »

Posted In: Class Action Court Decisions

As a resource for class action defense attorneys who defend against RESPA (Real Estate Settlement Procedures Act) class actions, we provide the text of RESPA. Congress provided for the jurisdiction of courts and for statutes of limitation for private rights of action under RESPA in 12 U.S.C. § 2614, which provides:

§ 2614. Jurisdiction of courts; limitations

Any action pursuant to the provisions of section 2605, 2607, or 2608 of this title may be brought in the United States district court or in any other court of competent jurisdiction, for the district in which the property involved is located, or where the violation is alleged to have occurred, within 3 years in the case of a violation of section 2605 of this title and 1 year in the case of a violation of section 2607 or 2608 of this title from the date of the occurrence of the violation, except that actions brought by the Secretary, the Attorney General of any State, or the insurance commissioner of any State may be brought within 3 years from the date of the occurrence of the violation.

NOTE: Sections 2611, 2612 and 2613 were repealed in 1996.

Posted In: Statutes & Rules

For those class action defense attorneys who defend against RESPA (Real Estate Settlement Procedures Act) class actions, we provide here the text of the statute as a resource. RESPA prohibits lenders from charging borrowers certain fees in 12 U.S.C. § 2610, which provides as follows:

§ 2610. Prohibition of fees for preparation of truth-in-lending, uniform settlement, and escrow account statements

No fee shall be imposed or charge made upon any other person (as a part of settlement costs or otherwise) by a lender in connection with a federally related mortgage loan made by it (or a loan for the purchase of a mobile home), or by a servicer (as the term is defined under section 2605(i) of this title), for or on account of the preparation and submission by such lender or servicer of the statement or statements required (in connection with such loan) by sections 2603 and 2609(c) of this title or by the Truth in Lending Act.

Posted In: Statutes & Rules

Defense attorneys in California faced the familiar wave of employment law class action cases last week, but FACTA (Fair and Accurate Credit Transaction Act) cases ran a close second. In an effort to assist class action defense attorneys in anticipating the claims against which they may have to defend, we provide weekly, unofficial summaries of the legal categories for new class actions filed in California state and federal courts in the Los Angeles, San Francisco, San Jose, Sacramento, San Diego, San Mateo, Oakland/Alameda and Orange County areas. Employment law cases routinely lead the list and usually do so by a wide margin, but this past week class action lawsuits alleging FACTA violations gave labor law class actions a run for their money. This report covers the time period from January 19 – January 25, 2007. We include only those categories that include 10% or more of the class action filings during the relevant timeframe. Approximately 52 class action lawsuits were filed in these California state and federal courts during that time period, 13 of which (25%) involved employment law claims. The area of law with the second most class action filings during that time period involved Fair Credit Reporting Act/Fair And Accurate Credit Transactions Act cases with 12 new filings (23%). Public accommodation/ADA class action lawsuits came in third with 9 new filings (17%). In a surprisingly balanced week for California class action filings, two other groups of class action claims passed the 10% threshold. Six new price fixing/antitrust class actions were filed (12%), as well as 5 new unfair competition (UCL) class actions (10%).

Posted In: Class Actions In The News

Judicial Panel Rejects Defense Request for Pretrial Coordination Pursuant to 28 U.S.C. § 1407 in the Southern District of New York and Agrees with Plaintiffs that Central District of California is Appropriate Court

Several class action lawsuits were filed in New York, Florida, Illinois, Minnesota and Pennsylvania against Wachovia Corp., Wachovia Securities, First Union Securities and/or Prudential Equity Group alleging violations of the federal Fair Labor Standards Act (FLSA) and/or state labor laws for failure to pay overtime to securities brokers. In re Wachovia Securities, LLC, Wage & Hour Litig., 469 F.Supp.2d 1346, 1347 (Jud.Pan.Mult.Lit. 2006). Pursuant to 28 U.S.C. § 1407, plaintiffs filed a motion with the Judicial Panel on Multidistrict Litigation (MDL) to centralize the lawsuits for pretrial purposes in the Northern District of Illinois; defense attorneys agreed that pretrial coordination was warranted under 28 U.S.C. § 1407 but requested transfer to the Southern District of New York. Id. Eleven (11) potentially related "tag-along" actions were filed, including six in the Central District of California, id. n.1, and all plaintiffs concurred that the Central District of California would be an appropriate forum for the litigation, id. The Panel agreed with the parties that centralization was warranted but rejected the forum requested by defense attorneys, selecting the Central District of California as the appropriate transferee court. Id.

Download PDF file of In re Wachovia Securities Transfer Order

Posted In: Multidistrict Litigation, Class Action Court Decisions

Judicial Panel Rejects Defense Opposition to Request for Pretrial Coordination Pursuant to 28 U.S.C. § 1407 and Grants Motion for Centralization of Three Class Action Lawsuits

Class action lawsuits were filed in California, Wisconsin and the District of Columbia, in addition to an action filed in the Court of Federal Claims, against the federal government and others seeking "reimbursement of the communications excise tax on long-distance telephone service, where the charge for such service was not based on the distance of the telephone call." In re Long-Distance Telephone Serv. Fed. Excise Tax Refund Litig., 469 F.Supp.2d 1348, 1349 (Jud.Pan.Mult.Lit. 2006). The Wisconsin plaintiff moved the Judicial Panel on Multidistrict Litigation (MDL) pursuant to 28 U.S.C. § 1407, to centralize the lawsuits for pretrial purposes in the Easter District of Wisconsin; the California plaintiffs supported centralization but argued for transfer to the District of the District of Columbia or the Central District of California. Id. Plaintiffs in the District of Columbia and in the Federal Claims court opposed the motion, as did the United States. The Panel concluded that, save for a "single California state law claim brought against [a] telecommunication provider," centralization was warranted. Id. The Panel further concluded that the District of the District of Columbia was the appropriate transferee court. Id.

NOTE: As noted above, the motion for centralization implicated an action pending in the Court of Federal Claims. The Panel noted that previously it "has never reached the issue of whether Section 1407 authorizes transfer of a Court of Federal Claims action," but concluded that it "sees no need to resolve that issue here." In re Long-Distance Telephone, at 1349. Instead, the Panel encouraged "voluntary cooperation between the Court of Federal Claims and the transferee court" but "[left] the degree and manner of such cooperation to the joint discretion of the respective judges." Id.

Download PDF file of In re Long-Distance Telephone Transfer Order

Posted In: Multidistrict Litigation, Class Action Court Decisions

Mortgage-Offer Mailer Constituted a "Firm Offer of Credit" Under the FCRA (Fair Credit Reporting Act) Warranting Summary Judgment in Favor of Defense Illinois Federal Court Holds

Plaintiffs filed a class action against Home Loan Center for alleged violations of the federal Fair Credit Reporting Act (FCRA) alleging that impermissibly accessed credit reports for purposes of mailing out "pre-approval" mortgage flyers, three of which were mailed to plaintiffs. Cavin v. Home Loan Center Inc., 469 F.Supp.2d 561, 2007 WL 92509, *1 (N.D. Ill. 2007). Plaintiffs did not respond to the loan offers. Id., at *2. Defense and plaintiffs attorneys filed cross-motions for summary judgment; defense attorneys argued that the mailers constituted "firm offers of credit" under the FCRA thus entitling Home Loan Center to obtain the credit reports; plaintiffs argued that mailers did not constitute firm offers because they are too vague. Id., at *3. The district court granted the defense motion, denied the plaintiffs' motion, and entered judgment in favor of Home Loan Center on the class action complaint.

We do not summarize here all of the language contained in the mailers or the details of the loan program at issue. Class action defense attorneys facing FCRA claims should review the opinion in its entirety in order to understand its full scope. Briefly, the mailers advertised a "SmartLoan" program and stated "This 'prescreened' offer of credit is based on information in your credit report indicating that you meet certain criteria." Cavin, at *1. The mailers set forth "sample loan payments for loans ranging from $100,000 to $600,000." Id. The reverse side of the mailers stated, "This offer may not be extended if, after responding to this offer, you do not meet the criteria used in the selection process. Further, HomeLoanCenter.com will verify income and employment, review credit, and analyze debt and your equity position in the subject property prior to final loan approval." Id. Additionally, the mailers stated, "This advertisement does not constitute an offer to enter into an interest rate and/or discount prior agreement." Id. The mailers were not firm commitments to make a loan, expressly stating "Not all applicants will be approved."

Id., at *2.

In ruling on the cross-motions for summary judgment, the federal court observed that the parties did not dispute whether Home Loan Center had "express permission to access [plaintiffs'] credit reports," Cavin, at *2. The class action turned "on whether the SmartLoan mailers constituted a 'firm offer of credit'" under the FCRA. Id. Plaintiffs urged that the mailers were "vague and totally lacking in terms," failed to "inform the consumer what is being offered," and failed to disclose that the mortgage is a negative amortization loan. Id., at *2-*3. The defense countered that the mailers "offered a valuable and popular home mortgage loan worth hundreds of thousands of dollars" and that any missing terms were because mortgage loans "have features and terms that cannot be fixed in advance based solely upon data obtained from prescreening programs." Id., at *3. Defense attorneys also argued that plaintiffs could not prove actual damages because they never sought or obtained a loan based on the mailers.Id.

Continue reading "Cavin v. Home Loan Class Action Defense Case: Illinois Federal Court Grants Defense Motion For Summary Judgment In Class Action Alleging Violations Of Federal Fair Credit Reporting Act (FCRA)" »

Posted In: FCRA Class Actions, Class Action Court Decisions

California's Litigation Privilege Bars Claims of Unfair Debt Collection Practices California Federal Court Holds

Plaintiff filed a putative class action in California state court alleging violations of the federal Fair Debt Collection Practices Act (FDCPA) and California's equivalent statute, the Rosenthal Fair Debt Collection Practices Act (RFDCPA), and for violations of California's unfair competition law (UCL), California Business & Professions Code section 17200 et seq. The lawsuit was premised on acts committed by defendants' efforts to collect a debt Defense attorneys removed the class action to federal court, and filed a motion to dismiss two claims for relief. Taylor v. Quall, 458 F.Supp.2d 1065, 1065-66 (C.D. Cal. 2006). Defendants argued that their conduct was absolutely privileged because it was part of the lawsuit aimed at collecting the debt. Id., at 1066. The district court agreed with the defense and granted the motion.

Plaintiff's class action complaint alleged the following. After plaintiff lost his job, he received several calls from people attempting to collect monies owed on his Citibank credit card account. Plaintiff advised these people that he was unemployed and would not pay the debt. Eventually, these collection efforts ended. However, defendants thereafter acquired the Citibank debt and filed a lawsuit against plaintiff seeking to collect the amounts owed. Plaintiff claims the lawsuit was time-barred and that defendants lacked standing. Plaintiffs further alleges that "Defendants improperly sought attorney's fees and costs, and made multiple misrepresentations to Plaintiff until he ultimately settled the action." Taylor, at 1066. As noted above, defense attorneys argued that any statements made during the course of the lawsuit fell within the scope of the litigation privilege, thus warranting dismissal under Rule 12(b)(6). The district court agreed.

Continue reading "Class Action Defense Cases-Taylor v. Quall: California Federal Court Grants Defense Motion To Dismiss Class Action Holding That Debt Collection Practices During Lawsuit Are Insulated By Litigation Privilege" »

Posted In: FDCPA Class Actions, Class Action Court Decisions