Class Action Blog by Carlton Fields Jorden Burt

September 18, 2014 8:10 AM | Posted by Amanda Romfh Jesteadt and Gary M. Pappas | Permalink
In 2008, investors in the Parkcentral hedge fund lost as much as $3 billion dollars when Parkcentral’s investment in commercial mortgage-backed securities (“CMBS”) was devalued. The investors, limited partners of Parkcentral, sued employees of Parkcentral’s general partner alleging that they breached fiduciary duties by making material misrepresentations and omissions regarding the nature of Parkcentral’s investments and hedging strategy. In particular, the investors claim that the defendants had falsely represented to the investors that the long position in AAA-rated CMBS would be hedged when in fact it was not. read more
September 16, 2014 4:01 PM | Posted by Alina Alonso Rodriguez and Gary M. Pappas | Permalink
Having requested and obtained certification of a class of consumers who had purchased a number of Whirlpool Duet model washers allegedly susceptible to serious mold problems, Plaintiffs later sought to limit the class so as to exclude certain models.  Whirlpool opposed the modification and, instead, sought decertification.  The Northern District of Ohio granted Plaintiffs’ motion in part, modifying the class, and denied Whirlpool’s motion to decertify. read more
September 9, 2014 8:47 AM | Posted by Kristin A. Shepard | Permalink
The Seventh Circuit recently addressed the applicability of the home state exception under the Class Action Fairness Act (“CAFA”).  The case arose from health insurer Right Choice Insurance Company’s withdrawal from the Illinois market and cancellation of its insurance policies.  Former policyholders filed a putative class action lawsuit in the United States District Court for the Southern District of Illinois alleging that cancellation of their policies violated Illinois law.  The District Court declined to certify a class and later ruled against plaintiffs on the merits. read more
September 5, 2014 3:26 PM | Posted by Christine A. Stoddard and Kristin A. Shepard | Permalink
In a recent case in the United States District Court for the Northern District of California, a plaintiff brought a putative class action alleging that defendants, a creditor and a debt collection firm, sent debt collection notices that failed to disclose the current creditor’s name in violation of the Fair Debt Collection Practices Act (“FDCPA”) and the California equivalent.  One defendant made an offer of judgment to the plaintiff pursuant to Federal Rule of Civil Procedure 68, offering her $3,500 to resolve her individual claim along with attorney’s fees and costs. read more
September 4, 2014 11:04 AM | Posted by Paul G. Williams and Kristin A. Shepard | Permalink
Plaintiffs, alleged owners of an interest in coalbed methane gas (“CBM”), brought five related putative class actions against defendants, CBM producers, for alleged failure to pay royalties and for a declaration that owners of gas estates – not owners of coal estates – were the owners of CBM.  The district court granted plaintiffs’ class certification motions, and defendants appealed.  Finding that class certification was “manifestly improper,” the Fourth Circuit granted defendants’ 23(f) petition, vacated the district court’s certification orders, and remanded for further proceedings. read more
August 28, 2014 1:09 PM | Posted by Amy L. Hurwitz and Jaret J. Fuente | Permalink
The Third Circuit Court of Appeals this week denied a petition for rehearing by the panel and the Court en banc in the Opalinski v Robert Half International, Inc. matter, where... read more
August 28, 2014 8:45 AM | Posted by Michael Greenfield and Ben Seessel | Permalink
The United States District Court for the Northern District of Illinois denied plaintiff’s renewed motion to remand, holding that defendants had demonstrated that it was plausible that CAFA’s amount in controversy requirement had been exceeded and plaintiff had failed to make an irrevocable commitment to obtain less than $5,000,000 in damages. The district court initially granted plaintiff’s motion to remand but, as we previously reported, the Seventh Circuit reversed. read more
August 27, 2014 8:36 AM | Posted by Clifton R. Gruhn & Ben V. Seessel | Permalink
In Dunford v. American Databank, LLC, the plaintiff alleged that the defendant violated the Fair Credit Reporting Act by including within her criminal background report charges that were more than seven years old.  The plaintiff sought to certify two nationwide classes.  The court found that, among other impediments to certification, the proposed class representative was inadequate because of her prior criminal convictions and her arrest and felony charge during the pendency of the case. read more
August 26, 2014 8:23 AM | Posted by Jacob Hathorn and Ben Seessel | Permalink

A Kentucky federal court recently ruled that a class plaintiff may not defeat removal by understating the aggregate amount in controversy alleged in her complaint.

The defendants had assisted plaintiff in connection with her claim for Social Security Disability benefits after she was referred to them by her long-term disability insurance carrier.

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August 14, 2014 4:00 PM | Posted by David E. Cannella and Gary M. Pappas | Permalink
New York District Court Judge Shira A. Scheindlin found class counsel’s allegation that they were experienced and competent was false because they could not provide any case in which they were certified as class counsel or recovered monetary relief for class member. As a result, the court found that class counsel violated Rule 11. The court declined to award attorney fees as a sanction, however, finding that the public reprimand was a sufficient deterrent. read more
August 13, 2014 2:46 PM | Posted by Amy L. Hurwitz and Jaret J. Fuente | Permalink

“Because of the fundamental differences between classwide and individual arbitration, and the consequences of proceeding with one rather than the other, … the availability of classwide arbitration is a substantive ‘question of arbitrability’ to be decided by a court absent clear agreement otherwise,” the Third Circuit held.

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August 12, 2014 3:10 PM | Posted by Charles W. Throckmorton and Steven Blickensderfer | Permalink
In Local 703 v. Regions Financial Corp., No. 12:14168 (Aug. 6, 2014), the Eleventh Circuit reviewed the certification of a securities fraud class action brought by investors against Regions for allegedly misrepresenting its asset value and financial stability during the financial crisis, purportedly resulting in artificially high stock prices. read more
August 7, 2014 2:24 PM | Posted by Christine A. Stoddard and Kristin A. Shepard | Permalink

The Ninth Circuit Court of Appeals recently affirmed a district court’s denial of class certification where a plaintiff failed to propose a plan to ascertain class members and therefore did not satisfy the manageability requirement of Rule 23(b)(3).  Plaintiffs alleged that the defendants, a parking company and the City of Laguna Beach, California, had violated the Fair and Accurate Credit Transactions Act (“FACTA”) by improperly printing the expiration dates of credit cards on parking receipts.  Plaintiffs sought to represent a class of purchasers who had not been victims of identity theft or suffered actual harm.  The United States District Court for the Central District of California denied class certification, finding that plaintiffs did not satisfy the superiority requirement of Rule 23(b)(3) because the class was not ascertainable, individual claims and administrative proceedings were both effective alternatives to a class action lawsuit, and a class action would be unfair.

On appeal, the Ninth Circuit addressed only the ascertainability of the class.  The court found several problems with identifying class members.  Because the class only included those who had used personal credit cards to purchase parking, determining which individuals had used business cards and were therefore excluded from the class would be infeasible.  Moreover, whether individuals had received receipts with expiration dates on them could not be efficiently determined, as there was no evidence that every parking machine had uniformly printed the dates over the four years at issue in the case and customers themselves would be unlikely to still possess the receipts.  Individuals seeking to join the class would also need to show that they had not suffered identify theft in order to be included.  Finally, and most critically, plaintiff had failed to propose a plan for determining who would be a member of the class, instead suggesting that potential class members could self-identify.  The court noted that, while self-identification may be possible in certain settlement-only cases, it does not satisfy the manageability requirement of 23(b)(3)(d).  Therefore, the court affirmed the denial of class certification.

Martin v. Pacific Parking Sys., No. 12–56654 (9th Cir. July 25, 2014). read more
August 5, 2014 1:48 PM | Posted by Paul G. Williams and Kristin A. Shepard | Permalink

Artful attempts to appeal a class certification order beyond fourteen days will not impress the Fourth Circuit.  In Nucor, the district court certified two classes relating to substantive allegations of racial discrimination.  The district court then denied a motion to reconsider, triggering the fourteen day period for filing an interlocutory appeal.  Defendants, however, subsequently filed three motions for decertification, and one of them succeeded in part: it decertified one of the classes in light of Wal-Mart v. Dukes and left the other class intact.  Defendants then filed a fourth motion to decertify the remaining class based on Comcast v. Behrend.  The district court denied that motion, and defendants filed a petition for interlocutory appeal under Federal Rule of Civil Procedure 23(f).

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July 31, 2014 8:51 AM | Posted by Clifton R. Gruhn & Ben V. Seessel | Permalink
A federal district court in Hawaii held that a parens patriae action brought on behalf of the State of Hawaii by its Attorney General was not removable under the Class Action Fairness Act (“CAFA”) because it was not a class action, and, even if it were, the presence of the State as a party precluded a finding that CAFA’s minimal diversity requirement had been met.  In Hawaii v. Bristol-Myers Squibb Co., Hawaii’s Attorney General claimed that pharmaceutical companies violated state consumer protection laws and were unjustly enriched and liable for punitive damages due to their allegedly false, deceptive, and unfair marketing of the prescription drug Plavix. read more
July 30, 2014 8:33 AM | Posted by Michael Greenfield and Ben Seessel | Permalink
The U.S. District Court for the Western District of Michigan denied plaintiffs’ motion for class certification citing plaintiffs’ failure to satisfy Rule 23’s ascertainability, commonality, typicality, and predominance requirements. The defendants, a debt collection agency and law firm, had filed state court complaints on behalf of medical providers in order to collect delinquent debts. The state court complaints included an exhibit listing providers who had allegedly assigned their claims to the plaintiff-provider in each respective case. read more
July 29, 2014 9:35 AM | Posted by Jacob Hathorn and Ben Seessel | Permalink
An Illinois federal district court has ruled that a class plaintiff whose motion for class certification was denied may not avoid that outcome by amending his complaint to introduce a new legal theory and revised class definition if the complaint could have been amended prior to moving for class certification. read more
July 24, 2014 11:59 AM | Posted by Alina Alonso Rodriguez and Jaret J. Fuente | Permalink
The Sixth Circuit Court of Appeals affirmed class certification in a case brought under the Telephone Consumer Protection Act (TCPA), 47 U.S.C. § 227 et seq. Pennsylvania-based distributor Lake City Industrial Products engaged Business to Business Solutions (B2B), a “fax-blasting” company, to transmit approximately 10,000 faxes advertising a pipe-thread sealing tape product. read more
July 22, 2014 11:10 AM | Posted by Dean A. Morande and Gary M. Pappas | Permalink
Plaintiff sued for underpayment or nonpayment of royalties on natural gas produced from wells in Kansas due to defendant’s failure to place the gas in marketable condition. The district court initially certified the class in 2011. read more
July 16, 2014 9:06 AM | Posted by Amanda Romfh Jesteadt and Gary M. Pappas | Permalink
The Central District of California denied plaintiff’s motion to certify a class of purchasers of defendant’s washing machines that contain an air hose connected to an air dome.  Plaintiff alleged the connection between the hose and dome was defective and could come loose under normal operation.  As a result, the washer would overflow and cause substantial property damage or personal injury. read more