Class Action Defense Blog

As a resource for California class action 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 preceding week. This report covers May 23 – 29, 2008, during which time 48 new class action lawsuits were filed. Typically, labor law class action lawsuits top the list of new class action filings by a wide margin. This past week, the number of new employment-related class action lawsuits filed in California dropped, from 30 during the prior reporting period to 23, but this still represented 48% of the total number of new class actions filed this past week...more than enough to retain the top spot. Like last week, the only other class action category to meet the 10% threshold alleged violations of California Unfair Competition Law (UCL), which includes false advertising claims, with 9 new filings (19%).

Posted In: Class Actions In The News

Judicial Panel Grants Defense Motion, Unopposed by Any Class Action Plaintiff, for Pretrial Coordination of Class Action Lawsuits Pursuant to 28 U.S.C. § 1407 and Centralizes Class Actions in Southern District of New York

Four class action lawsuits – two in New York, one in Tennessee and one in Texas – were filed against defendants PepsiCo and Pepsi Bottling Group alleging that defendants “misled consumers of its Aquafina bottled water into believing that the water source of Aquafina was something different from and better than tap water.” In re PepsiCo, Inc., Bottled Water Marketing & Sales Practices Litig., ___ F.Supp.2d ___ (Jud.Pan.Mult.Lit. April 7, 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 Southern District of New York; no plaintiff in any of the class actions opposed the motion. Id. The Judicial Panel granted the motion to centralize the class action lawsuits, explaining at page 1: “Centralization under Section 1407 will eliminate duplicative discovery, prevent inconsistent pretrial rulings, and conserve the resources of the parties, their counsel and the judiciary.” The Judicial Panel also agreed that the Southern District of New York was the appropriate transferee court “because two of the four actions are already pending there and, by centralizing them before Judge Charles L. Brieant, we are assigning the litigation to a jurist who has the experience to steer it on a prudent course.” Id.

Posted In: Multidistrict Litigation, Class Action Court Decisions

Antitrust Class Action Properly Dismissed with Prejudice because Plaintiff Failed to Establish Injury-in-Fact Required for Article III Standing to Prosecute Class Action Ninth Circuit Holds

Plaintiff filed a putative class action against Amazon.com and book-seller Borders Group alleging antitrust violations; the class action complaint alleged that, following unsuccessful attempts to operate its own online website, Borders entered into an agreement with Amazon to “direct[] shoppers to what is known as a mirror website, a site hosted by Amazon.” Gerlinger v. Amazon.com Inc., ___ F.3d ___ (9th Cir. May 27, 2008) [Slip Opn., at 6029-30]. The class action alleged that Amazon would sell and ship the books, but Borders would receive a commission for each book sold. Id., at 6030. The class action complaint alleged further that Borders agreed to abandon “direct participation in the online market” during the life of its agreement with Amazon. Id. Plaintiff’s theory was that this agreement constituted a “per se market allocation” agreement in violation of the Sherman Act. Id. Defense attorneys moved for summary judgment; in part, the defense motion was supported by a declaration establishing that book prices on Amazon’s website declined following the agreement between Amazon and Borders. Id. The district court sought supplemental briefing as to whether plaintiff had standing to prosecute the class action complaint, and ultimately dismissed the class action on the ground that plaintiff had suffered no injury. Id., at 6030-31. The Ninth Circuit affirmed.

The governing law is simple and well-settled: “Article III standing…is a jurisdictional prerequisite to the consideration of any federal claim,” and “Article III standing requires proof of injury-in-fact, causation, and redressibility.” Gerlinger, at 6031 (citations omitted). Defense attorneys established that plaintiff had not suffered any injury. On the contrary, defense declarations established that “the prices [plaintiff] paid for books purchased from Amazon after the agreement became effective were the same, or even lower, than the prices listed before the defendants entered into the agreement.” Id., at 6030-31. Plaintiff, by contrast, presented no evidence in support of his claim that “prices would have been even lower if there had been no agreement.” Id., at 6031. The Circuit Court concluded that, based on the evidence presented, plaintiff was obligated to “show some injury,” id., at 6032. He failed to do so. Id. Accordingly, the district court properly dismissed the antitrust class action with prejudice for lack of Article III standing, id., at 6033.

Posted In: Class Action Court Decisions

District Court Dismissal of Class Action Complaint and Referral to Federal Communications Commission (FCC) of “Novel and Technical Question” of Issue Central to Class Action Claims was Proper Ninth Circuit Holds

Plaintiff filed a putative class action against Time Warner Cable alleging that it engaged in the practice of “slamming” in violation of 47 U.S.C. § 258(a); the class action complaint alleged further the Time Warner violated the parallel state statute. Clark v. Time Warner Cable, 523 F.3d 1110, 1112 (9th Cir. 2008). The class action advanced also state law claims, as well as RICO (Racketeer Influenced and Corrupt Organizations Act), id. According to the class action’s allegations, defendant telephoned plaintiff marketing a digital phone package; the package utilized Voice over Internet Protocol (VoIP) technology, rather than “the traditional public switched telephone network (PSTN). Id. Plaintiff alleges she rejected the invitation, but defendant disconnected her existing telephone service and sent a technician to install her new service. Id. Defense attorneys moved to dismiss the class action on the grounds that the FCC had not yet decided whether § 258(a) applies to VoIP providers as well as a “telecommunications carriers.” Id., at 1112-13. In addition to referring the § 258(a) class action claim to the FCC, the district court dismissed, without prejudice, plaintiff’s remaining claims. Id., at 1113. The Ninth Circuit affirmed.

The Circuit Court explained that this appeal presents the issue of “whether the doctrine of primary jurisdiction permits a district court to refer a claim raising a novel and technical question of federal telecommunications policy to the Federal Communications Commission for its consideration in the first instance.” Clark, at 1112. “The primary jurisdiction doctrine allows courts to stay proceedings or to dismiss a complaint without prejudice pending the resolution of an issue within the special competence of an administrative agency.” Id., at 1114. Put simply, the Telecommunications Act of 1996 “imposes a variety of obligations on telecommunications carriers,” id., at 1113, and expressly prohibits “slamming” – “the practice in which a telecommunications carrier switches a consumer's telephone service without the consumer's consent,” id., at 1112. Specifically, § 258(a) states that “[n]o telecommunications carrier shall submit or execute a change in a subscriber's selection of a provider of telephone exchange service or telephone toll service except in accordance with such verification procedures as the [FCC] shall prescribe” (italics added). The Ninth Circuit explained at pages 1113 and 1114:

Continue reading "Time Warner Class Action Defense Cases–Clark v. Time Warner: Ninth Circuit Affirms "Primary Jurisdiction" Dismissal of Class Action And Referral To FCC Of Issue Central To Class Action Complaint" »

Posted In: Class Action Court Decisions

In May 2007, New York State Attorney General Andrew Cuomo filed a lawsuit against Dell and Dell Financial Services (collectively “Dell”) on behalf of New York residents alleging that it advertised “attractively priced computer packages, promotional financing that typically features a no interest and/or no payment period, large rebates, and free or upgraded accessories,” but that “many of the benefits and inducements featured in Dell's advertisements are illusory.” A copy of the lawsuit may be found here. New York’s Attorney General today announced that it won this lawsuit, obtaining a court finding that “Dell has engaged in repeated misleading, deceptive and unlawful business conduct, including false and deceptive advertising of financing promotions and the terms of warranties, fraudulent, misleading and deceptive practices in credit financing and failure to provide warranty service and rebates.” A copy of the trial court’s order and decision may be found here.

Posted In: Class Actions In The News

Class Action Alleging Violations of California’s Song-Beverly Act Limited by One-Year Statute of Limitations Period and cannot Encompass Customers from Whom Information was Sought as Part of Merchandise Return Transactions because Song-Beverly does not Apply to Returns, only Point of Sale, California State Court Holds

Plaintiffs filed a putative class action against TJX, TJ Maxx, Marshalls and other defendants alleging violations of California’ Song-Beverly Act, Civil Code § 1747 et seq., which prohibits businesses from requiring customers to provide certain personal information in connection with credit card purchases, and which “bans the use of forms that facilitate the obtaining of such information”; the class action complaint purported to represent individuals who had made credit card purchases over the prior three-year period, and the class action purported to seek damages on behalf of customers from whom information was requested as part of merchandise return transactions. TJX Cos., Inc. v. Superior Court, ___ Cal.App.4th ___, 77 Cal.Rptr.3d 114, 2008 WL 213132573, *1 (Cal.App. May 22, 2008). Defense attorneys demurred to the class action complaint on the grounds that “customers who returned merchandise were not covered under section 1747.08,” and sought to strike those portions of the class action complaint that sought to define the class as extending back three years. Id. The trial court overruled the demurrer and motion to strike. Defense attorneys sought petitions for mandate from the appellate court, and the appellate court reversed.

With respect to the limitations period, Song-Beverly provides for statutory penalties “not to exceed two hundred fifty dollars ($250) for the first violation and one thousand dollars ($1,000) for each subsequent violation.” Cal. Civ. Code, § 1747.08(e). Plaintiffs’ lawyer argued that this provision constitutes a “liability created by statute, other than a penalty or forfeiture,” so as to fall within the three-year statute of limitations set forth in California Code of Civil Procedure section 338. TJX, at *3. Defense attorneys, however, argued that the class action’s Song-Beverly Act claims constitute “[a]n action upon a statute for a penalty,” and thus fall within the one-year statute of limitations set forth in California Code of Civil Procedure section 340. Id. The appellate court sided with the defense. It explained that while the amount of penalty to be set in the event of a violation is within the sound discretion of the trial court, “[p]resumably…span[ning] between a penny (or even the proverbial peppercorn we all encountered in law school) to the maximum amounts authorized by the statute,” it does not have discretion to deny awarding damages entirely. Id., at *2-*3. Because the trial court must impose a penalty in the event of a violation, the class action complaint falls within the scope of section 340 and is subject to a one-year limitations period. Id., at *3-*4. Accordingly, the Court of Appeal granted the petition for writ of mandate as to the motion to strike those portions of the class action complaint seeking to impose liability on defendants for more than one year. Id., at *6.

Continue reading "Privacy Class Action Defense Cases–TJX v. Superior Court: California Court Holds One-Year Limitations Period Applies To Class Action Complaint Under Song-Beverly Act And Class Action Complaint Cannot Include Merchandise Return Transactions" »

Posted In: Class Action Court Decisions

The author of the Class Action Defense Blog wishes all of you a very happy Memorial Day. A new class action article, summarizing the recent California Court of Appeal opinion discussing California's Song-Beverly Act, will be published tomorrow.

Posted In: Class Actions In The News

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 May 16 – 22, 2008, during which time 47 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, 30 new class actions were filed alleging employment-related claims (64% 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 (11%).

Posted In: Class Actions In The News

Judicial Panel Grants Plaintiff Request for Pretrial Coordination of Class Action Lawsuits Pursuant to 28 U.S.C. § 1407 over Defense Objection

Two class action lawsuits – one in Illinois and one in Pennsylvania – were filed in against defendants Texas Roadhouse Holdings LLC and Texas Roadhouse, Inc., for violations of the Fair and Accurate Credit Transactions Act (FACTA), alleging that defendants printed information on credit card and debit card customer receipts that FACTA required be excluded therefrom. In re Texas Roadhouse Fair & Accurate Credit Transactions Act (FACTA) Litig., ___ F.Supp.2d ___ (Jud.Pan.Mult.Lit. April 7, 2008) [Slip Opn., at 1]. Plaintiff’s lawyer in the Pennsylvania class action 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 Northern District of Illinois; plaintiff in the Illinois class action supported the motion. Id. Defense attorneys opposed pretrial coordination, and alternatively filed motions under 28 U.S.C. § 1404 to transfer the class actions to Kentucky, id. The Judicial Panel granted the motion to centralize the class action lawsuits, explaining at page 1: “Common discovery is likely, as defendants have suggested that discovery related to their credit and debit card receipt policies will be company-wide. Centralization under Section 1407 will eliminate duplicative discovery; prevent inconsistent pretrial rulings, especially with respect to class certification; and conserve the resources of the parties, their counsel and the judiciary.” The Judicial Panel also agreed that the Northern District of Illinois was the appropriate transferee court. Id., at 1-2.

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

Affirming Summary Judgment in Favor of Defense in Class Action Alleging Violations of FCRA (Fair Credit Reporting Act), Class Action Complaint Properly Dismissed because, as Matter of First Impression, Offer of Credit Satisfies FCRA if Creditor will not Deny Credit to Consumers who Meet Pre-Selection Criteria First Circuit Holds

Plaintiff filed a putative class action against Greenwood Credit Union alleging violations of the Fair Credit Reporting Act (FCRA) arising out of “an unsolicited letter to a consumer about the offering of credit for a home loan.” Sullivan v. Greenwood Credit Union, 520 F.3d 70, 71 (1st Cir. 2008). Greenwood had purchased credit reports for purposes of pre-screening individuals, and then sent home loan offers to “a list of individuals meeting certain minimal credit requirements”: the class action complaint alleged that the unsolicited letters fall within the FCRA and that consumer credit information had been obtained for an improper purpose; defense attorneys argued that the FCRA permits obtaining credit reports for various purposes, including extending a “firm offer of credit.” Id. The First Circuit explained at page 71, “This case is about plaintiff's efforts to collect that statutory penalty for a class of consumers; there is no claim [he] was wrongfully denied credit.” The thrust of the class action claims was that the offer of credit “was based on such minimal criteria and the actual extension of credit was so contingent on other conditions that the letter could not be a firm offer of credit.” Id. Defense attorneys moved for summary judgment on the class action complaint, and the district court granted the motion. As a matter of first impression in the First Circuit, the Circuit Court considered the phrase “firm offer of credit” and affirmed.

Defense attorneys argued that Greenwood limited its offer of credit to homeowners “having at least $10,000 in revolving debt and a credit score of 500 or greater.” Sullivan, at 71. Greenwood did not obtain a consumer’s entire credit report; rather, it obtained from the credit reporting agency only contact information for consumers who met these criteria. Id., at 71-72. Greenwood then sent consumers a letter offering them, for a limited time, loans up to 100% of the value of their home at “some of the lowest rates in decades”; however, the letter did not provide the interest rate being offered, nor did it state the duration of the loan. Id., at 72. The letter noted, however, “Limited time offer to customers who qualify based on equity, income, debts, and satisfactory credit. Rates and terms subject to change without notice. Most loan programs require both a satisfactory property appraisal and title exam for final approval.... If at time of offer you no longer meet initial criteria, offer may be revoked.” Id. The letter also informed consumers as to the steps they could take if they wanted to stop receiving prescreened offers of credit. See id. Plaintiff responded to the letter by filing the class action complaint, id. Plaintiff’s theory was that Greenwood had not extended a “firm offer of credit” because the letter “‘is lacking crucial terms for it to be an offer’ and ‘is so vague and lacking in terms as not to constitute an “offer capable of acceptance”.’” Id. The class action complaint sought statutory damages of $1,000 per class member on behalf of approximately 2 million individuals, id.

Continue reading "FCRA Class Action Defense Cases–Sullivan v. Greenwood Credit Union: In Case Of First Impression First Circuit Affirms Summary Judgment In Favor Of Defense In FCRA Class Action Holding Creditor’s Letter Was A “Firm Offer” Under FCRA" »

Posted In: FCRA Class Actions, Class Action Court Decisions

Defense Evidence in Support of Removal of Class Action to Federal Court Adequately Established Removal Jurisdiction under Class Action Fairness Act (CAFA) California Federal Court Holds

Plaintiff filed a putative class action lawsuit in California state court against Polo Ralph Lauren alleging violations of California’s Song-Beverly Act; specifically, the class action complaint alleged that defendant requested personal information from customers as part of credit card transactions in violation of California Civil Code § 1747.08. Korn v. Polo Ralph Lauren Corp., 536 F.Supp.2d 1199, 1202 (E.D. Cal. 2008). Defense attorneys removed the class action to federal court alleging removal jurisdiction under the Class Action Fairness Act (CAFA); plaintiffs moved to remand the class action to state court on the grounds that defendant failed to establish the requisite diversity or amount in controversy. Id. As the district court explained, “CAFA grants district courts original jurisdiction over civil class actions filed under federal or state law in which any member of a class of plaintiffs is a citizen of a state different from any defendant and the amount in controversy for the putative class members in the aggregate exceeds the sum or value of $5,000,000, exclusive of interest and costs.” Id. (citing 28 U.S.C. § 1332(d)(2)). The district court refused to remand the class action to state court, holding that defendant sufficiently established CAFA removal jurisdiction.

Plaintiff first argued that Polo Ralph Lauren did not establish that it was not a citizen of California, Korn, at 1201; the district court rejected this argument, noting that plaintiff is bound by the judicial admission in his complaint that defendant is a Delaware corporation with its principal place of business in New Jersey, id., at 1203. Accordingly, the federal court held plaintiff “bound by the allegations in his complaint that assert defendant's citizenship, for purposes of diversity jurisdiction, is in Delaware and New Jersey.” Id. Plaintiff next argued that the defense failed to establish the $5,000,000 amount in controversy requirement. Id., at 1201. While the class action complaint did not seek a specific amount of damages, the district court observed that the class action seeks “statutory civil penalties for the alleged violations [of] up to $1000 per violation.” Id., at 1202. Further, as part of the documentation supporting removal of the class action to federal court, defense attorneys had submitted a declaration establishing that Polo Ralph Lauren had “processed more than 5,000 credit card transactions over the last year in the state of California.” Id. The district court held that this was sufficient.

Continue reading "CAFA Class Action Defense Cases–Korn v. Polo Ralph Lauren: California Federal Court Denies Motion To Remand Class Action To State Court Holding Defense Established Class Action Alleging Song-Beverly Act Violations Involved More Than $5 Million" »

Posted In: Class Action Fairness Act (CAFA), FCRA Class Actions, Removal & Remand, Class Action Court Decisions