Class Action Blog by Carlton Fields Jorden Burt


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
July 15, 2014 8:39 AM | Posted by Amy Hurwitz and Jaret Fuente | Permalink
The Seventh Circuit Court of Appeals vacated a decision declining to certify a consumer class against IKO Manufacturing, in which the district court wrote that “commonality of damages” is essential, reasoning that the district court had incorrectly read Comcast Corp. v. Behrend, 133 S. Ct. 1426 (2013), and Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541 (2011), to require proof “that the plaintiffs will experience common damage and that their claimed damages are not disparate.”  read more
July 9, 2014 8:43 AM | Posted by Paul Williams and Kristin Shepard | Permalink
The robustness of the rule preventing non-settling defendants from objecting to a class settlement has received a boost from the Second Circuit.  The class settlement at issue involved the claims of investors against a hedge fund manager for damages and restitution of lost funds as a result of Madoff’s Ponzi scheme. read more
July 8, 2014 3:56 PM | Posted by Christine Stoddard and Kristin Shepard | Permalink
In Stephens, two former pilots brought a putative class action lawsuit against their employer airline and their retirement plan, alleging that a delay in paying retirement benefits and failure to pay interest during the delay violated the Employee Retirement Income Security Act (“ERISA”).  Defendants maintained that the delay was necessary to calculate the amount of benefits where a beneficiary elected to receive a lump sum rather than a monthly annuity. read more
July 7, 2014 10:47 AM | Posted by Steven Blickensderfer | Permalink
The Eleventh Circuit has affirmed the dismissal of a putative class action brought under the FDCPA, 15 USC § 1692, against a law firm for sending a letter to a homeowner in default. Specifically, the letter did the following: read more
July 2, 2014 11:39 AM | Posted by Clifton Gruhn and Ben Seessel | Permalink
The Central District of California denied certification of a putative nationwide class of mortgagors, holding that numerous individualized issues precludeda finding of predominance, superiority, or ascertainability. In particular, the plaintiffs alleged that defendant’s subsidiary escrow companies violated the Real Estate Settlement Procedures Act’s kickback prohibition by accepting payments from delivery companies, such as UPS, FedEx, and OnTrac, in exchange for referring their delivery services to defendant’s escrow subsidiaries. The plaintiffs sought certification of a nationwide class consisting of all individuals who, in the past 15 years, were charged by any of the defendant’s subsidiaries an overnight delivery fee for mortgage processing and closing documents. The defendant characterized the charges at issue as “marketing fees” that were beyond the realm of RESPA and argued that the plaintiffs’ class definition raised numerous individualized issues. read more
June 30, 2014 1:38 PM | Posted by Michael Greenfield and Ben Seessel | Permalink
The U.S. District court for the Northern District of California denied plaintiffs’ motion for class certification because the proposed class did not satisfy Rule 23’s ascertainability and predominance requirements. Plaintiffs’ class action complaint alleged that Hulu violated the Video Privacy Protection Act by disclosing video selections and “personally identifiable information” to third parties such as Facebook. At the class certification hearing, the plaintiffs narrowed their theory to the alleged wrongful disclosure of personal identifying information to Facebook by transmission of c_user cookies, which contain a Hulu user’s Facebook ID. According to the court, by narrowing their theory, the plaintiffs limited the class to “registered Hulu users who at least once during the class period watched a video on hulu.com having used the same computer and web browser to log into Facebook in the previous four weeks using default settings.” read more
June 26, 2014 11:40 AM | Posted by Ben Seessel and Jacob Hathorn | Permalink
Earlier this week the Supreme Court reaffirmed the validity of the “fraud-on-the-market” presumption of reliance that significantly eases the burden on investors in obtaining certification of private securities fraud class actions, but held that defendants must be permitted an opportunity at the class certification stage to rebut the presumption through direct or indirect evidence showing that the alleged misrepresentations did not impact the stock price. read more
June 25, 2014 5:26 PM | Posted by Mark A. Neubauer and Meredith M. Moss | Permalink
The California Supreme Court this week confirmed the validity of an employee's waiver of the right to bring a class action contained in an arbitration agreement. That's the good news for employers. However, the court also held that these arbitration agreements may not include a waiver of an employee's right to bring representative claims under the Private Attorney General Act (PAGA), found at Section 2698-99 of the California Labor Code. That is not good news and ... read more
June 24, 2014 5:40 PM | Posted by Alina Alonso Rodriguez and Jaret J. Fuente | Permalink
The Eastern District of Michigan recently held that certain claims of a putative class member were tolled under American Pipe & Constr. Co. v. Utah., 414 U.S. 538 (1974), even though the named plaintiff had unsuccessfully moved for certification of an amended class whose definition excluded the putative class member’s claims.  In 2013, Plaintiff Machesney filed a Telephone Consumer Protection Act (“TCPA”) class action against Ramsgate Insurance Company in the Eastern District of Michigan after receiving three junk faxes between 2006 and 2007. At that time, another person who had received the same junk faxes from Ramsgate, and another company managed by Ramsgate, had already initiated a similar, but separate class action against Ramsgate and the management company... read more