Class Action Defense Blog

Oregon Jury Awards $28 Million in Antitrust Class Action Against Weyerhauser

On April 29, 2008, Weyerhauser lost a class action lawsuit filed in Oregon; the class action complaint reportedly alleged antitrust violations in that Weyerhauser allegedly monopolized the market for finished alder lumber. A jury found against Weyerhauser and awarded nearly $28 million in damages, which will be trebled under antitrust laws. Weyerhauser has promised to appeal the judgment.

Posted In: Class Actions In The News

District Court Erred in Dismissing Cardholder Class Action Against Credit Card Issuers, Alleging Conspiracy to Including Mandatory Arbitration Clauses in Credit Card Agreements in Violation of Federal Antitrust Laws, because Class Action Complaint Adequately Alleged Injury in Fact for Article III Standing Second Circuit Holds

Plaintiffs filed a putative class action against various credit card issuing banks for antitrust violations alleging that defendants “illegally colluded to force cardholders to accept mandatory arbitration clauses in their cardholder agreements.” Ross v. Bank of America N.A., ___ F.3d ___ (2d Cir. April 25, 2008) [Slip Opn at 4]. The class action complaint contained two antitrust claims based on violations of Section 1 of the Sherman Act: (1) that defendants “conspired to impose mandatory arbitration clauses,” and (2) that defendants “participated in a group boycott by refusing to issue cards to individuals who did not agree to arbitration.” Id., at 5-6. The class action prayed for an injunction and sought “to invalidate existing mandatory arbitration clauses, and to force the banks to withdraw all pending motions to compel arbitration.” Id., at 6. Defense attorneys moved to dismiss the class action under Rule 12(b)(1) and (b)(6) on the grounds that plaintiffs lacked standing to prosecute the antitrust class action claims, id. The district court granted the motions on the sole ground of lack of standing, and dismissed the class action complaint. See In re Currency Conversion Fee Antitrust Litig., No. 05 Civ. 7116 (WHP), 2006 U.S. Dist. LEXIS 66986 (S.D.N.Y. September 20, 2006). (A copy of the district court order dismissing the class action may be found here .) Plaintiffs appealed; the Second Circuit reversed and reinstated the class action.

The district court dismissed the class action complaint based on its belief that the injuries alleged by plaintiffs were “entirely speculative and, therefore, insufficient to establish Article III standing.” Ross, at 6 (quoting In re Currency Conversion, at *9, *12-13). As the Second Circuit explained at page 6, “Specifically, according to the district court, the cardholders’ injuries are ‘contingent on their speculation that someday (1) Defendants may engage in misconduct; (2) the parties will be unable to resolve their differences; (3) Plaintiffs may commence a lawsuit; (4) the dispute will remain unresolved; and (5) Defendants will seek to invoke arbitration provisions.’” Id., at 6-7 (quoting In re Currency Conversion, at *14-15). The district court also characterized any “alleged anticompetitive effects” as “inchoate.” Id., at 7 (quoting In re Currency Conversion, at *16). The Circuit Court disagreed.

Continue reading "Class Action Defense Cases–Ross v. Bank of America: Second Circuit Reinstates Antitrust Class Action Holding Cardholders Possessed Article III Standing To Pursue Class Action Claims Against Credit Card Issuers" »

Posted In: Class Action Court Decisions

Eight Years After Filing of Class Action Complaint Against EchoStar, now Dish Network, Colorado State Court Grants Plaintiffs’ Motion to Certify Litigation as a Class Action

The Denver Post reports that the Arapahoe County trial court has granted plaintiffs’ motion to certify a lawsuit against EchoStar as a class action. The class action complaint reportedly was filed by “thousands of [EchoStar’s] retail distributors” eight years ago. The trial court, Judge John Wheeler, is quoted by the Post of accusing defense attorneys of “a willingness and proclivity for drawing out legal proceedings as long as humanly possible and burying their opponents in paperwork and filings.” According to the class action, EchoStar failed to pay commissions and fees due to direct and indirect retailers of its satellite television service.

Posted In: Class Actions In The News

Class Action Alleging Failure to Pay Resident Employees for Time Spent “On Call” though not Performing Assigned Tasks Properly Subject to Summary Judgment in Favor of Defense California State Court Holds

Plaintiffs filed a putative labor law class action against their former employer, a property management company, alleging inter alia that it had failed to pay them for overtime and waiting time; specifically, the class action complaint alleged that defendant failed to pay its “resident employees” for “on-call” time. Isner v. Falkenberg/Gilliam & Associates, Inc., 160 Cal.App.4th 1393, 73 Cal.Rptr.3d 433, 434 (Cal.App. 2008). The class action alleged that the resident employee employment agreement signed by plaintiffs required that they be on call “on designated evenings from 5:00 p.m. until 8:00 a.m. and on designated weekends from 5:00 p.m. Friday evening until 8:00 a.m. Monday morning.” The agreement further required employees to “remain on the facility premises within hearing distance of the emergency alarms systems and telephone” while on call, but provided that they were “otherwise free to use on-call time as he or she chooses.” Id. The appellate court explained, “The gravamen of the complaint was that these resident employees were entitled to payment not just for the hours they spent responding to emergencies while on call, but for all the hours they were on call and thus confined to their apartment or the building office so as to remain within audible range of the telephone and alarm.” Id., at 436. Defense attorneys moved for summary judgment arguing that plaintiffs were entitled to wages only for time spent on the job; the trial court agreed that payment was due only for work “actually performed” and, accordingly, granted summary judgment on the class action complaint. Id. The appellate court affirmed.

The pertinent facts established that resident employees were allowed to arrange for another resident employee to “respond to emergency calls with the Employee, or in the place of the Employee” and that employees would be paid for “[a]ll time spent in responding to emergencies.” Isner, at 434. Moreover, if emergencies prevent an employee from obtaining 5 hours of “uninterrupted sleep,” then defendant agreed to “credit Employee with eight hours' time worked under the terms of [the agreement].” Id., at 435. Plaintiffs were given an apartment to live in, and at least one of them stayed within range of the alarm and telephone while on duty or on call. Id. “While [plaintiffs] were on duty and on call, they slept, ate, talked on their personal telephone, used the internet, played computer games, read magazines or watched television in their apartment when they were not responding to an emergency.” However, while on duty or on call, plaintiffs could not go to the pool or walk around the apartment, because they would be unable to hear the alarm or telephone, and they could not leave the apartment. Id. It was plaintiffs’ responsibility to keep track of and bill their time with respect to “both their usual eight-hour work day and times spent responding to emergencies,” id. And while defendant permitted them to bill all time spent on the job, plaintiffs generally “recorded only the calls that took 15 minutes or more.” Id., at 435-36. “[T]here was never an occasion when [plaintiffs] were not paid for time they recorded on their time sheets.” Id., at 436.

Continue reading "Labor Law Class Action Defense Cases–Isner v. Falkenberg: California Court Affirms Summary Judgment In Favor Of Defense In Labor Law Class Action Holding Resident Employees Need Only Be Compensated For Carrying Out Assigned Duties" »

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

Following Dismissal of Securities Fraud Class Action, District Court Failure to Include Rule 11(b) Statutory Findings in Judgment may be Decided by Court of Appeal Eighth Circuit Holds

Plaintiff filed a putative securities fraud class action against various defendants, including Scientific-Atlanta and Motorola. The district court dismissed the class action claims against Scientific-Atlanta and Motorola and entered a separate, final judgment under Rule 54(b). Plaintiff appealed, and the Eighth Circuit affirmed. See In re Charter Communications, Inc., Securities Litig., 443 F.3d 987 (8th Cir. 2006). Plaintiff filed a petition for writ of certiorari with the U.S. Supreme Court; the High Court granted the writ and affirmed the Eighth Circuit’s decision. See Stoneridge Inv. Partners, LLC v. Scientific-Atlanta, Inc., ___ U.S. ___, 128 S.Ct. 761 (2008). (Our summary of the Supreme Court opinion may be found here.) On remand, the Eighth Circuit was confronted with a matter of first impression: specifically, a provision of the PSLRA (Private Securities Litigation Reform Act of 1995) states that the district court “shall include in the record specific findings regarding compliance by each party and each attorney representing any party with each requirement of Rule 11(b) of the Federal Rules of Civil Procedure as to any complaint, responsive pleading, or dispositive motion.” In re Charter Communications, Inc., Securities Litig., 519 F.3d 730, 731 (8th Cir. 2008) (quoting 15 U.S.C. § 78u-4(c)(1)). The district court had failed to include such findings, though no party had raised this issue either in the district court or on appeal. Id. Defense attorneys notified the Circuit Court that Scientific-Atlanta and Motorola “waive all rights in this case to assert, that Plaintiff-Appellant did not comply with Fed.R.Civ.P. 11(b)” and requested entry of a final judgment dismissing the class action complaint. Id.

The Eighth Circuit held that the failure to include the required findings “did not affect either the appealability or the validity of the district court's Rule 54(b) final judgment.” In re Charter Communications, at 731 (citation omitted). After noting that courts have reached different decisions as to whether the failure to include Rule 11(b) statutory findings required a remand to the district court or whether, in the absence of district court findings, the Circuit Court could decide the Rule 11(b), and after confirming that “Congress in the PSLRA clearly intended to reduce judicial discretion to ignore or not sanction Rule 11(b) violations,” the Eighth Circuit held that “the Rule 11(b) issue may still be waived on appeal, either when it is not timely raised by any party or when, as here, it is affirmatively waived by the parties who prevailed in the district court.” Id. Accordingly, the Circuit Court reissued its mandate affirming the final judgment of the district court, id., at 732.

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

Class Action Discovery Order Requiring Defense to Produce Redacted Letter Prepared by Outside Counsel did not Warrant Extraordinary Writ Relief because Unredacted Portions were “Inconsequential” and Disclosure to Class Action Plaintiffs would not cause Costco “Irreparable Harm” California Court Holds

Plaintiffs filed a putative labor law class action against Costco alleging that it “misclassified certain managers as exempt employees.” Costco Wholesale Corp. v. Superior Court, ___ Cal.App.4th ___, 74 Cal.Rptr.3d 345, 347 (Cal.App. 2008). According to the class action complaint, each Costco warehouse store “has hundreds of employees and up to 20 managers”; a “general manager” (apparently the most senior person at the warehouse store), and “ancillary managers” (in charge of various departments, such as meat, bakery, pharmacy, optical, etc.). Id., at 348. The class action alleges that “[s]enior operations personnel at Costco determine how to classify employees for compensation purposes,” and in June 2000 Costco’s corporate counsel hired a law firm to “‘undertake [a] comprehensive factual investigation and legal analysis regarding the classification of managers within Costco Warehouses.’” Id. In response to that request, outside counsel conducted interviews, performed legal research and prepared a 22-page letter dated August 4, 2000, addressed to Costco’s corporate counsel. Id. Internal meetings followed, attended by in-house counsel, and in 2001 Costco reclassified ancillary managers as non-exempt employees. Id., at 348-49. The gravamen of the class action is that Costco “unlawfully failed to pay overtime to ancillary managers…because Costco categorically had misclassified these employees as exempt employees”; Costco’s answer to the class action complaint included the affirmative defense that “plaintiffs were exempt from the protection of the California overtime laws (the exemption defense).” Id., at 349. In discovery, plaintiffs sought inter alia production of the August 4 letter, which defense attorneys had listed on a privilege log; the trial court ordered production of a redacted copy of the letter. Costco sought a writ of mandate but the Court of Appeal denied the petition.

This discovery dispute centered on whether Costco had placed the contents of the August 4 letter at issue by virtue of its affirmative exemption defense and other discovery responses. Specifically, in response to interrogatories Costco stated that it “reasonably expected that employees who held the position of salaried Costco manager regularly and customarily exercised their independent judgment and discretion performing such exempt tasks…for more than 50% of their time.” Costco, at 349. The defense “person most knowledgeable about Costco’s exemption defense” testified that “Costco relied, in part, on input from counsel in classifying its employees as exempt or nonexempt.” Id., at 350. Defense attorneys stated that Costco was not relying on “advice of counsel” as a defense, and asserted the attorney-client privilege as to any discussion with counsel, id. Plaintiffs demanded discovery of legal advice provided by outside counsel on the grounds that the privilege had been waived; defense attorneys reiterated that Costco’s “‘reasonable expectation’ exemption defense was not dependent upon legal advice.” Id.

Continue reading "Attorney-Client Privilege/Class Action Defense Cases–Costco v. Superior Court: California State Court Denies Writ Relief Of Court Order Requiring Defense To Produce In Labor Law Class Action Copy Of Redacted Letter Prepared By Outside Counsel" »

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

Judicial Panel Grants Defense Request for Pretrial Coordination of FACTA Class Action Lawsuits Pursuant to 28 U.S.C. § 1407, and Agrees with Defense Recommendation of Eastern District of Pennsylvania as the Transferee Court

Four class action lawsuits were filed against OSI Restaurant Partners (OSI) alleging violations of the federal Fair and Accurate Credit Transactions Act (FACTA) based on OSI’s failure to delete certain information from customer credit and debit card receipts. The class actions were pending in the Eastern District of Pennsylvania (two), and the Western District of Pennsylvania and Northern District of Illinois (one each). In re OSI Restaurant Partners, LLC, Fair & Accurate Credit Transactions Act (FACTA) Litig., ___ F.Supp.2d ___ (Jud.Pan.Mult.Lit. February 20, 2008) [Slip Opn., at 1]. Defense attorneys filed a motion with the Judicial Panel for Multidistrict Litigation (MDL) requesting centralization of the litigation pursuant to 28 U.S.C. § 1407 in the Eastern District of Pennsylvania; all parties agreed that pretrial coordination was appropriate, but plaintiffs’ lawyers in two of the class actions argued that the Western District of Pennsylvania was the appropriate transferee court. Id. The Judicial Panel granted the motion for centralization, but agreed with defense attorneys that the Eastern District of Pennsylvania was the appropriate transferee court. Id.

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

To assist class action defense attorneys anticipate the types of 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 preceding week. This report covers April 18 – 24, 2008, during which time 35 new class action lawsuits were filed. Once again class actions asserting employment-related claims topped the list of new class action filings by a wide margin. During the time period covered by this post, 21 new class actions were filed alleging employment-related claims (60% of the total number of new class action lawsuits). The only other category of class action lawsuits to break the 10% threshold alleged violations of California Unfair Competition Law (UCL), which includes false advertising claims, with 5 new filings (14%).

Posted In: Class Actions In The News

Judicial Panel Grants Plaintiff Request, over Defense Objection, for Pretrial Coordination of Class Action Lawsuits Pursuant to 28 U.S.C. § 1407, but Transfers Class Actions to Eastern District of Missouri

Four class action lawsuits (2 in Colorado and 1 each in Florida and Missouri), each of which were filed as putative nationwide class actions, were filed against various Aurora Dairy Corp. alleging “Aurora misled them into believing that the milk they purchased was ‘organic’ or ‘USDA organic’ when in fact the milk failed to meet organic standards.” In re Aurora Dairy Corp. Organic Milk Marketing & Sales Prac. Litig., ___ F.Supp.2d ___ (Jud.Pan.Mult.Lit. February 20, 2008) [Slip Opn., at 1]. Plaintiffs in one of the Colorado class actions filed a motion with the Judicial Panel for Multidistrict Litigation (MDL) requesting centralization of the litigation pursuant to 28 U.S.C. § 1407 in the District of Colorado, id. Defense attorneys for common defendant Aurora opposed pretrial coordination, but alternatively supported Colorado as the transferee court; other plaintiffs also supported Colorado as the transferee court, but plaintiffs in the Missouri action supported centralization in that district. Id. The Judicial Panel granted the motion to centralize the class action lawsuits, easily concluding that this will promote efficient handling of the litigation, id. In so holding, the Panel rejected defense arguments that centralization was unnecessary because “voluntary alternatives to Section 1407 are superior,” id., at 2. But the Judicial Panel selected the Easter District of Missouri as the transferee court, explaining that it was home to the first-filed class action and that “[g]iven the geographic dispersal of the constituent actions and the potential tag-along actions, the Eastern District of Missouri offers a relatively convenient forum for this litigation.” Id

Posted In: Multidistrict Litigation, Class Action Court Decisions

Microsoft Petition for Permission to Appeal Class Action Certification of Nationwide Class Action Challenging Labeling PCs as “Windows Vista Capable” even if PCs could not Run Premium Vista Properly Denied by Ninth Circuit

We previously reported on the nationwide class action certified against Microsoft arising out of a class action complaint that challenges the marketing of new “Windows Vista Capable” and “Express Upgrade” programs. That class action complaint alleged that almost a year before its release of the new Vista operating system, Microsoft “authorized original equipment manufacturers…to place a sticker on personal computers… indicating that the PCs had been certified by Microsoft as ‘Windows Vista Capable.’” See Kelley v. Microsoft Corp., ___ F.Supp.2d ___ (W.D. Wash. February 22, 2008) [Slip Opn., at 1]. The class action alleged further that a substantial number of PCs that were advertised as “Windows Vista Capable” were limited to “Vista Home Basic” which, according to the complaint, “does not include any of the enhanced features unique to Vista and which make Vista attractive to customers.” Id., at 2. The district court for the Western District of Washington granted class action certification of a nationwide class action. Our summary of that opinion may be found here. Defense attorneys filed a petition with the Ninth Circuit for permission to appeal the district court order certifying a nationwide class action. On April 21, 2008, the Ninth Circuit denied that request.

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

Class Action Alleging Failure to Disclose “Loan-Related” Fees Improperly Certified as Class Action because Class Membership Turned on Finding of Defendant’s Liability and because Class Definition Failed to Adequately Describe “Loan-Related” Fees and Services, Requiring Reversal of Trial Court Order Missouri Supreme Court Holds

Plaintiffs filed a class action in Missouri state court against Allied Mortgage Capital Corporation alleging violations of the state’s Merchandising Practices Act “by misrepresenting charges for third-party services in connection with their loan transaction.” Vandyne v. Allied Mortgage Capital Corp., 242 S.W.3d 695, 696 (Mo. 2008). The class action alleged that Allied “failed to disclose costs incurred in processing Plaintiffs’ loans”; plaintiff