Class Action Defense Blog

Michigan State Court Concludes that Residents Living Near Landfill Satisfied Requirements for Certification of Class Action Against Landfill Owners

The Class Action Defense Blog has learned that a Michigan court certified a class action lawsuit brought by residents of Monroe and Wayne counties against Carleton Farms because it “consistently releases noxious odors and interferes with their [quiet] use and enjoy[ment] [of] their properties.” While the landfill has been in use for years, residents claim that the odor problem was exacerbated by the decision of Carleton Farms to accept municipal sewage sludge from Toronto. Interestingly, the Michigan Department of Environmental Quality reportedly has issued the necessary permits to Carleton Farms for an expansion of the landfill, despite complaints from local residents that this makes the problem even worse.

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

In order to assist class action defense attorneys anticipate the cases against which they will have to defend in California, we provide weekly, unofficial summaries of the legal categories for new class action lawsuits filed in California state and federal courts in the Los Angeles, San Francisco, San Jose, Sacramento, San Diego, San Mateo, Oakland/Alameda and Orange County areas. We include only those categories that include 10% or more of the class action filings during the relevant timeframe. This report covers the time period from September 21 – September 27, 2007, during which time 44 new class action lawsuits were filed in these California state and federal courts. Labor law class action cases generally lead the list by a wide margin, and this proved true yet again as 25 of the new class action filings (57% of the total number of new class actions) alleged employment claims. Class actions under California's unfair competition law, which includes false advertising claims, and new antitrust class action filings came in a distant second with 5 new class action cases each (11%). No other category cracked the 10% thredhold.

Posted In: Class Actions In The News

Judicial Panel Grants Defense Request for Pretrial Coordination of Class Action Lawsuits Pursuant to 28 U.S.C. § 1407 and Rejects Transferee Court Recommendations of Various Plaintiffs Opting Instead to Transfer Class Actions to District of Kansas as Requested by Defense

Six class action lawsuits (followed by “tag-along” class actions) were filed against The TJX Companies for violations of the Fair and Accurate Credit Transactions Act (FACTA) because TJX allegedly included certain information on customer credit card receipts. In re The TJX Cos., Inc., Fair & Accurate Credit Transactions Act (FACTA) Litig., 505 F.Supp.2d 1379, 1379 (Jud.Pan.Mult.Lit. 2007). Defense attorneys filed a motion with the Judicial Panel for Multidistrict Litigation (MDL) requesting centralization of the class actions pursuant to 28 U.S.C. § 1407 in the District of Kansas. Id. The Kansas class action plaintiffs did not oppose the motion, id. The plaintiffs in the other federal district did not oppose centralization, but argued alternatively for California, Illinois, Massachusetts or Nevada as the transferee court. Id. The Judicial Panel granted the motion to centralize the class action litigation and agreed with defense attorneys that the District of Kansas was the appropriate court Id., at 1380.

Posted In: FCRA Class Actions, Multidistrict Litigation, Class Action Court Decisions

Petition Seeking Review of Trial Court Order Denying Motion to Certify Class Action was Untimely thus Compelling Dismissal of the Petition for Lack of Jurisdiction

Plaintiffs filed a putative class action lawsuit in Illinois state court against The Mortgage Exchange alleging violations of the federal Telephone Consumer Protection Act of 1991 (TCPA) and the state’s consumer fraud and deceptive business practices arising out of defendant’s transmission of unsolicited advertisements via facsimile. CE Design, Ltd. v. The Mortgage Exchange, Inc., 872 N.E.2d 1056, 1057 (Ill.App. 2007). Plaintiffs moved the trial court for an order certifying the litigation as a class action; defense attorneys opposed the motion on the grounds, inter alia, that “issues such as the specific receipt of and consent to receive a facsimile transmission by each class member were not common issues.” Id., at 1057-58. On October 13, 2006, the trial court agreed with the defense and refused to certify a class action holding, also, that class action treatment was inappropriate because in enacting the TCPA Congress “envisioned individual, small claims litigation, not private class actions with potential recoveries in the millions of dollars.” Id., at 1058. Plaintiffs sought reconsideration of the denial of class certification, which the trial court denied on February 22, 2007. Plaintiffs sought leave to appeal the denial of class action treatment, and defense attorneys moved to dismiss plaintiffs’ petition for lack of jurisdiction. Id. The appellate court granted the defense motion holding that plaintiffs’ petition was untimely.

Under Illinois state court rules, plaintiffs’ petition had to be filed “within 30 days after the entry of the order”; plaintiffs acknowledge that they failed to meet this deadline but argued the time for filing the petition was tolled during the pendency of the motion for reconsideration, or alternatively that the motion for reconsideration was a “new motion” for certification of a class action. CE Design, at 1059. The appellate court rejected each argument. With respect to the tolling argument, the appellate court observed that “[t]here is no provision in the rule that allows a motion to reconsider an interlocutory order to extend the time for filing the petition for leave to appeal,” and that case law holds that the time period is not tolled. Id. (citations omitted). The court was unconvinced that motions to reconsider class certification orders should be an exception to this rule. Id., at1060.

Continue reading "Class Action Defense Cases-CE Design v. Mortgage Exchange: Illinois State Appellate Court Dismisses Petition Seeking Leave To Appeal Denial Of Class Action Treatment Agreeing With Defense That Petition Was Untimely" »

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

Motion to Dismiss Class Action Based on Rule 68 Offer of Judgment to Plaintiff Premature Because Court had not yet Ruled on Plaintiff Motion to Certify Class Action New York District Court Holds

Plaintiff filed a class action against her employer, Buth-Na-Bodhaige, for violations of the federal Fair Labor Standards Act (FLSA) arising out of its alleged failure to pay managers overtime and misclassification of its managers as “exempt” employees. Rubery v. Buth-Na-Bodhaige, Inc., 494 F.Supp.2d 178, 179 (W.D.N.Y. 2007). Plaintiff asked the court to conditionally certify a collective action under FLSA and to certify a class action, but the motions were stayed pending a ruling on certain dispositive motions. Id. Plaintiff then renewed her motions for class action treatment, and defense attorneys responded with a Rule 68 offer of judgment, id. Plaintiff did not accept the offer, and subsequently filed more than 50 consent forms executed by putative class members that authorized plaintiff to proceed on their behalf. Id. The defense argued that the offer of judgment divested the district court of jurisdiction over plaintiff’s FLSA claims and moved to dismiss the class action, id., at 179-80. The district court denied the motion.

The federal court explained that, because its jurisdiction is limited to actual cases and controversies, “[w]hen a defendant offers a plaintiff all of the relief she seeks, the plaintiff's personal stake in the litigation is vitiated, and the issues presented are no longer considered to be ‘live.’” Rubery, at 180 (citing Fox v. Board of Trustees of State University of New York, 42 F.3d 135, 140 (2d Cir.1994)). The complaint is therefore subject to dismissal because “there is no justification for taking the time of the court and the defendant in the pursuit of minuscule individual claims which defendant has more than satisfied.” Rubery, at 180 (quoting Abrams v. Interco Inc., 719 F.2d 23, 32 (2d Cir.1983) and citing Central States Southeast & Southwest Areas Health & Welfare Fund v. Merck, 433 F.3d 181, 197-198 (2d Cir.2005)). In the Second Circuit, district courts have held that a defense offer of judgment to pay damages in full warrants dismissal of the complaint even if the offer has been rejected. Id. However, this rule does not apply if the offer of judgment “fails to satisfy ‘all damages for all plaintiffs,’ such as where the amount owed to plaintiff is in dispute, or where additional plaintiffs have opted in and not been extended offers of judgment.” Id. Additionally, courts are “mindful of the inherent danger that motions to dismiss grounded on a Rule 68 offer may be wielded as a strategic weapon to frustrate the FLSA's very object-ensuring that every employee receives ‘a fair day's pay for a fair day's work.’” Id., at 180-81 (quoting A.H. Phillips v. Walling, 324 U.S. 490, 493 (1945))

In light of the guiding principles set forth in the court’s opinion, the district court concluded that the defense motion to dismiss was premature because it was made prior to the court’s decision on whether to grant class action status to the case. Rubery, at 181. Accordingly, it denied the motion without prejudice. Id.

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

Trial Court Properly Abstained from Resolving Class Action Claims that would Require it to “Assume General Regulatory Powers over the Health Care Industry through the Guise of Enforcing the UCL” California Court Holds

Plaintiff (now deceased) filed a putative class action in California state court against numerous skilled nursing and intermediate care facilities alleging violations of the state’s unfair competition law (UCL) for failing to comply with the nursing hour requirements set forth in Health and Safety Code § 1276.5(a). Alvarado v. Selma Convalescent Hosp., 153 Cal.App.4th 1292, 64 Cal.Rptr.3d 250, 251-52 (Cal.App. 2007). Defense attorneys demurred to the class action complaint, arguing that the court “should abstain from adjudicating the action or defer to the primary jurisdiction of the [Department of Health Services (DHS)]” and arguing further that no private right of action exists under § 1276.5(a). Id., at 253. Plaintiff disputed these arguments, and argued that the doctrine of “primary jurisdiction” did not apply, id. The trial court granted the defense motion and dismissed the class action with prejudice, holding that even assuming plaintiff could pursue a private action under § 1276.5, it nevertheless had discretion to abstain from hearing the case. Id. The appellate court affirmed the dismissal of the class action complaint, explaining at page 252: “Adjudicating the alleged controversy would have required the trial court to become involved in complex health care matters concerning the staffing of skilled nursing and intermediate care facilities and assume regulatory functions of the [DHS]. In addition, granting and enforcing the requested relief would place an unnecessary burden on the trial court given the power of the DHS to monitor and enforce compliance with section 1275.6.”

Noting that the question before it was whether the trial court abused its discretion by abstaining from adjudicating the alleged controversy,” Alvarado, at 253, the Court of Appeal began by observing that the UCL claims in the class action complaint sought equitable relief, and that “[b]ecause these remedies are equitable in nature, under the doctrine of judicial abstention, courts have the discretion to abstain from employing them,” id., at253-54 (citation omitted). In broad terms, the judicial abstention doctrine may be invoked “when the lawsuit involves determining complex economic policy which is best handled by the legislature or an administrative agency” or “where granting injunctive relief would be unnecessarily burdensome for the trial court to monitor and enforce given the availability of more effective means of redress.” Id., at 254 (citations omitted). Thus, a court should abstain if “granting the requested relief would require a trial court to assume the functions of an administrative agency, or to interfere with the functions of an administrative agency.” Id. (citations omitted).

Continue reading "UCL Class Action Defense Cases-Alvarado v. Selma Convalescent Hospital: California Court Holds That Class Action Alleging Violations Of Unfair Competition Law (UCL) Properly Dismissed Under Doctrine Of Judicial Abstention" »

Posted In: Class Action Court Decisions

Class Action Treatment of Labor Law Violation Claims not Warranted because Individual Issues Predominate over Common Issues thus Failing to Meet the Requirements of Rule 23(b)(3) California Federal Court Holds

Plaintiff filed a putative class action in California state court against her employer, SkyWest Airlines alleging violations of various state labor laws including failure to pay overtime and failure to provide and/or compensate for meal breaks. Blackwell v. SkyWest Airlines, Inc., ___ F.Supp.2d ___, Slip Opn., at 2 (S.D. Cal. August 30, 2007). Defense attorneys removed the action to federal court on the basis of the Class Action Fairness Act of 2005 (CAFA), id. Plaintiff filed a motion with the district court to certify the litigation as a class action, id., at 1, seeking to represent five classes, id., at 4; the district court agreed with defense attorneys that class action treatment would be inappropriate and denied the motion.

The district court readily concluded that the proposed classes, consisting of an estimated 2600 members, satisfied the numerosity requirement of Rule 23(a)(1), Blackwell, at 5-6, and that plaintiff had established the commonality requirement of Rule 23(a)(2) for each proposed class, id., at 6-9. The federal court additionally found that plaintiff would adequately represent the proposed classes within the meaning of Rule 23(a)(4), id., at 13-14. However, the typicality test of Rule 23(a)(3) proved more problematic. The district court agreed with defense attorneys that plaintiff lacked standing to pursue the class action claim alleging inaccurate wage statements under Labor Code § 226(a) because she failed to file her class action complaint within one year of her last wage statement. Id., at 10-11. The court further found that plaintiff failed to provide sufficient evidence to support her class action allegation based on voluntary shift trades, id., at 11-12.

Turning to the requirements of Rule 23(b), the district court noted that “[t]he Ninth Circuit has adopted an ‘extremely conservative view’ [with respect to Rule 23(b)(1)], requiring a finding that either ‘(1) rulings in separate actions would subject defendant to incompatible judgments requiting inconsistent conduct to comply with the judgment; or (2) a ruling in the first of a series of separate actions will “inescapably alter the substance of the rights of others having similar claims.”’” Blackwell, at 15 (citation omitted). The court agreed with defense attorneys that plaintiff failed to establish that either test had been met, id., at 15-16. The federal court next held that a Rule 23(b)(2) class action would be inappropriate because the monetary relief sought by the class action complaint was not “merely incidental to the injunctive relief sought.” Id., at 16.

Continue reading "Class Action Defense Cases-Blackwell v. SkyWest: California Federal Court Refuses To Certify Labor Law Class Action Against Airline" »

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

As a resource for California defense attorneys, we provide weekly, unofficial summaries of the legal categories for new class action lawsuits filed in California state and federal courts in the Los Angeles, San Francisco, San Jose, Sacramento, San Diego, San Mateo, Oakland/Alameda and Orange County areas. We include only those categories that include 10% or more of the class action filings during the relevant timeframe. This report covers the time period from September 14 – September 20, 2007, during which time 48 new class action lawsuits were filed in these California state and federal courts. As is generally the case, employment law class action cases once again led the list of class action filings with 15 new lawsuits, representing 31% of the total number of new class actions, but that percentage is down significantly from its lasgt week, when 62% of the total number of new class actions filed involved labor law claims. Class actions under California's unfair competition law, which includes false advertising claims, came in a distant second with 7 new filings (15%), followed by five (5) new antitrust class action filings (10%).

Posted In: Class Actions In The News

Molly Selvin of the Los Angeles Times reports today that class action plaintiff lawyer Melvin Weiss has been indicted “on charges that he participated in a kickback scheme that allegedly netted millions of dollars in illicit legal fees.” The federal indictment comes on the heels of a guilty plea by class action plaintiff lawyer William Lerach, who was once a partner at Milberg Weiss, to charges of criminal conspiracy. The recent indictment added to the criminal charges filed against the law firm of Milberg Weiss and two of its named partners, Steve Schulman and David Bershad, last year. The amended federal indictment also comes on the heels of Schulman’s guilty plea to federal racketeering and conspiracy charges, Ms. Selvin reports. According to the amended indictment, Milberg Weiss paid illegal kickbacks in 225 shareholder class action lawsuits (up from the 150 class actions alleged in the original indictment) and illegally earned $250 million in attorney fees (up from $200 million).

Ms. Selvin’s article, entitled “Law firm founder indicted: Melvyn Weiss is alleged to have participated in a scheme to make secret payment to plaintiffs in class-action cases,” may be found in the Business Section of the September 21, 2007 edition of the Los Angeles Times.

Posted In: Class Actions In The News

Nathan Koppel of the Wall Street Journal reports today on the long-anticipated criminal charges leveled against well known class action plaintiff lawyer Melvyn Weiss. The criminal charges are contained in an amendment to the federal indictment handed down last year against the plaintiff class action law firm of Milberg Weiss and two of its named partners, Steven Schulman and David Bershad. The criminal charges against Weiss comes just days after former Milberg Weiss attorney William Lerach, himself a well-known class action plaintiff lawyer, pleaded guilty to federal conspiracy charges, and to the guilty plea of Steve Schulman to federal racketeering and conspiracy charges.

Mr. Koppel’s article, entitled “In Role Reversal, Melvyn Weiss is Indicted: High-Profile Lawyer is Accused of Kickbacks to Class-action Clients,” may be found on page A11 of the September 21, 2007 edition of the wall Street Journal.

Posted In: Class Actions In The News

Judicial Panel Grants Defense Request, Opposed by Certain Plaintiffs, for Pretrial Coordination of Class Action Lawsuits Pursuant to 28 U.S.C. § 1407 and Concurs with Defense Recommendation to Transfer Class Actions to Eastern District of Michigan

Four putative class action lawsuits (three in Michigan and one in California) were filed against General Motors “relating to (1) the impact of the conversion of the cellular network from an analog/digital network to a digital-only network on December 31, 2007, and (2) the availability of OnStar service in certain vehicles thereafter.” In re General Motors OnStar Contract Litig., 502 F.Supp.2d 1357, 2007 WL 2386412, *1 (Jud.Pan.Mult.Lit. 2007). Defense attorneys filed a motion with the Judicial Panel for Multidistrict Litigation (MDL) requesting centralization of the class actions pursuant to 28 U.S.C. § 1407 in the Eastern District of Michigan, where three of the class actions were pending. The Michigan plaintiffs supported this defense request; the California plaintiffs opposed centralization. Id. The Judicial Panel granted the motion to centralize the class actions and agreed with the defense transferee court recommendation “because (1) three actions and a potential tag-along action are currently pending in this district, and (2) relevant documents and witnesses are likely located in or near defendants’ facilities in Michigan.” Id.

Posted In: Multidistrict Litigation, Class Action Court Decisions

Defense Motion for Summary Judgment in Securities Fraud Class Action Warranted as to 28 Statements Challenged by Class Action Complaint but Triable Issues Existed as to Remaining Class Action Claims California Federal Court Holds

Plaintiffs filed a securities fraud class action in California federal court against JDS Uniphase and certain officers alleging violations of Sections 11 and 15 of the federal Securities Act of 1933, and Sections 10(b), 14, 20(a) and 20A of the Securities Exchange Act of 1934 and Rules 10b-5 and 14a-9 promulgated under the Exchange Act. In re JDS Uniphase Corp. Sec. Litig., Slip Opn., at 1-2 and 6-7 (N.D. Cal. August 24, 2007). JDS Uniphase manufactures and supplies components of fiber-optic networks. Id., at 2. The class action alleges that the company and its officers falsely represented the company’s financial condition in order to artificially inflate the stock price, in part so JDS could purchase other companies “for less than their worth.” Id., at 3. After the court certified the litigation as a class action, defense and plaintiff attorneys filed cross-motions for summary judgment, id., at 1-2. The district court granted the defense motions in part and deferred ruling on plaintiffs’ motion; in so ruling, the federal court held that certain disputes could be resolved only at trial.

At the time the defense filed its summary judgment motion, plaintiffs were challenging 56 separate statements. JDS, at 10. The defense argued that it was entitled to judgment as to 24 of these statements either because plaintiffs failed to include them in the class action complaint or because plaintiffs abandoned them, id., at 9-10. The district court concluded: (1) plaintiffs did not abandon any claims raised in the class action complaint, id., at 10; (2) despite the holding in Kaplan v. Rose, 49 F.3d 1363 (9th Cir. 1994), plaintiffs were entitled to leave to amend to add 16 of the challenged statements to the class action complaint, id., at 10-12; and (3) pla