TILA Class Action Defense Cases–Lymburner v. U.S. Financial: California Federal Court Grants Class Action Treatment To TILA/UCL Class Action Complaint Holding Requirements Of Rule 23 Satisfied

Class Action Complaint Alleging TILA Violations for Failing to Disclose “Key Terms” Associated with Negative Amortization/Option ARM Loan Satisfied Rule 23 Requirements for Class Action Certification California Federal Court Holds

Plaintiff filed a class action against U.S. Financial Funds, with whom she had refinanced her home loan, alleging violations of the federal Truth in Lending Act (TILA) and asserting various California statutory and common law claims; specifically, the class action complaint challenged disclosures made by defendant “in connection with the terms of a residential mortgage product that was sold to Plaintiff.” Lymburner v. U.S. Financial Funds, Inc., ___ F.3d ___ (N.D.Cal. January 22, 2010) [Slip Opn., at __]. According to the allegations underlying the class action complaint, plaintiff refinanced her home loan in 2006, obtaining an Option ARM loan. _Id._, at 1-2. The initial payments due on the loan reflected a “substantially discounted initial interest rate,” and while the interest rate could adjust monthly, the minimum monthly payment was fixed for five years. _Id._, at 2. U.S. Financial served as plaintiff’s mortgage broker and originated the loan, _id._ The loan documents disclosed the maximum interest rate that would be charged, as well as the maximum “unpaid principal that might result from negative amortization.” _Id._ The class action complaint alleged that just before her retirement in October 2006, defendant contacted her and advised that it could reduce her monthly mortgage payment to $700; plaintiff agreed to the loan without realizing that the principal amount owing on the loan could increase. _Id._ (The loan documents inflated plaintiff’s income; she initialed this page of the loan application and asserted that “the higher numbers did not strike her as being incorrect.” _Id._) When plaintiff received her first bill and discovered the 9% interest rate and negative amortization, she tried to refinance the loan and made two mortgage payments before successfully refinancing her loan in April 2007. _Id._, at 2-3. The class action alleged that the failure to disclose “the key terms of the loan” violated TILA and constituted fraud under California’s Unfair Competition Law (UCL). _Id._, at 3. Plaintiff’s counsel moved to certify the litigation as a class action. _Id._, at 1, 3. The district court initially indicated that it planned to grant class action treatment, but ordered the parties to meet and confer concerning the proposed definition of the class because the court believed it to be inadequate. _Id._, at 1. Based on a joint letter proposing a new definition of the class, the federal court granted the motion for class action certification. _Id._

The district court began by analyzing the adequacy of the proposed definition of the class, which focused on whether the loan documents disclosed that the interest rate “may” change (instead of “will” change), and that negative amortization “may” result (instead of “will” result). See Lymburner, at 4-5. The court held that the proposed class is ascertainable, particularly given that defendant used only one set of loan documents. Id., at 5. The federal court concluded at page 5 that “class membership can be ascertained by looking at the documents, particularly in light of the joint revised class definition.” The numerosity test in Rule 23(a)(1) for class action certification was met because the class contained at least 100 members, id., at 5. The district court also rejected defense challenges to the commonalty test in Rule 23(a)(2) because plaintiff’s class action was not premised on any representations made to her orally but, rather, on the disclosures contained in the written loan documents. Id., at 5-6. And the court rejected defendant’s claim that plaintiff’s claims were not “typical” as required by Rule 23(a)(3) because of differences in the remedies available to class members. Id., at 6-7. “Plaintiff’s claims are based on loans issued by Defendant allegedly without proper disclosures.” Id., at 7. Further, there was no evidence that defendant treated plaintiff differently or that her loan documents were materially different from those of other class members. Id. Accordingly, the typicality requirement was satisfied. Id. Finally, the court held that plaintiff satisfied the adequacy of representation test of Rule 23(a)(4). See id., at 7-8.

Class Action Court Decisions Class Action Fairness Act (CAFA) RESPA/TILA Class Actions Uncategorized

CAFA Class Action Defense Cases–Cunningham Charter v. Learjet: Seventh Circuit Court Holds Class Action Removed To Federal Court Under CAFA Remains In Federal Court Following Denial Of Class Action Certification

In Case Removed to Federal Court under Class Action Fairness Act (CAFA), District Court Erred in Remanding Class Action Complaint to State Court Following Denial of Class Action Treatment because Jurisdiction is Generally Determined at Time Complaint is Filed and Class Action Allegations were not Frivolous Seventh Circuit Holds

Plaintiff filed a putative class action in Illinois state court against Learjet alleging breach of warranty and product liability claims; the class action complaint sought to represent all purchasers of Learjets “who had received the same warranty from the manufacturer that [plaintiff] had received.” Cunningham Charter Corp. v. Learjet, Inc., 592 F.3d 805 (7th Cir. 2010) [Slip Opn., at 1]. Defense attorneys removed the class action to federal court under CAFA (the Class Action Fairness Act of 2005), id., at 1-2. Plaintiff then moved the district court to certify two classes, but the court denied class action treatment “on the ground that neither proposed class satisfied the criteria for certification set forth in Rule 23.” Id., at 2. The federal court then ruled that the denial of the class action certification motion removed federal court jurisdiction under CAFA and remanded the complaint to state court. Id. Defendant petitioned the Seventh Circuit for leave to appeal the remand order; the Circuit Court granted the petition “to resolve an issue under the Class Action Fairness Act that this court has not heretofore had to resolve.” Id. The Circuit Court reversed.

The Seventh Circuit explained that CAFA creates federal court diversity jurisdiction in cases of minimal diversity; that is, “over certain class actions in which at least one member of the class is a citizen of a different state from any defendant (that is, in which diversity may not be complete).” Learjet, at 2. CAFA expressly applies “to any class action [within the Act’s scope] before or after the entry of a class certification order.” Id. (quoting § 1332(d)(8)). The Circuit Court explained that CAFA implies an “expectation” of class certification in that a district court should remand a putative class action to state court if “it would have been certain from the outset of the litigation that no class could be certified.” Id., at 3. On the other hand, “jurisdiction attaches when a suit is filed as a class action, and that invariably precedes certification.” Id. The Circuit Court concluded, therefore, “All that section 1332(d)(1)(C) means is that a suit filed as a class action cannot be maintained as one without an order certifying the class. That needn’t imply that unless the class is certified the court loses jurisdiction of the case.” Id.

Certification of Class Actions Class Action Court Decisions Class Action Fairness Act (CAFA) Removal & Remand Uncategorized

HELOC Class Action Defense Cases–Yakas v. Chase: California Federal Court Denies Defense Motion To Dismiss Class Action Holding Class Action Complaint Adequately Alleged Breach Of Contract And Unjust Enrichment

Class Action Claim that Chase Breached Home Equity Line of Credit (HELOC) Agreement by Freezing Account based on Estimated Property Value Established by “Automated Valuation Model” Survived Defense Motion to Dismiss, as did Class Action Claim for Unjust Enrichment based on Chase Charging Customer an Annual Fee for a HELOC that the Customer could no longer Draw Against California Federal Court Holds

Plaintiff filed a putative class action against Chase Manhattan Bank, with whom she had a home equity line of credit (HELOC), alleging breach of contract and unjust enrichment. Yakas v. Chase Manhattan Bank, U.S.A., N.A., ___ F.Supp.2d ___ (N.D.Cal. January 25, 2010) [Slip Opn., at 1]. According to the allegations underlying the class action complaint, plaintiff obtained the HELOC from Chase in April 2004; at that time, plaintiff’s property appraised for $718,000, and she obtained a $71,750 line of credit. _Id._, at 2. The agreement allowed Chase to reduce or freeze the line of credit if “[t]he value of the Property declines significantly below its original appraised value for purposes of this Credit Account,” the agreement failed to define “significantly” or to describe the manner in which subsequent property valuations would be made. _Id._ The agreement further required plaintiff to pay a “non-refundable annual fee” during the “Draw Period,” but failed to define the “Draw Period” and the parties disputed the meaning of the term. _Id._ In any event, plaintiff paid the annual fee each April through 2008, _id._ Finally, the Agreement provided that Delaware would govern any disputes between the parties, _id._, at 4. Chase froze plaintiff’s HELOC in December 2008, “stating that the valuation of plaintiff’s property no longer supported her line of credit.” _Id._, at 3. Chase based this determination on its use of an “Automated Valuation Model” (AVM), which estimated that the value of the Property had dropped to $674,000; in the district court’s words, “How the AVM model worked is a mystery on the present record.” _Id._ The following April, Chase again charged plaintiff an annual fee. _Id._ The thrust of plaintiff’s class action was that (1) Chase was required to obtain a valuation from a licensed appraiser in order to reduce or freeze HELOC agreements, rather than using the AVM, and (2) the AVM was unreliable. _Id._, at 3-4. Defense attorneys moved to dismiss the class action complaint. _Id._, at 1. The district court denied the motion.

The district court began with the class action’s breach of contract claim. See Yakas, at 5. The class action complaint alleged that Chase violated the terms of the HELOC agreement in three ways. First, by “fail[ing] to obtain an appraisal by a licensed appraiser prior to suspending her line of credit,” as required by the “court of dealing” among the parties. Id. Defense attorneys countered that Chase “was not limited to any specific valuation method and that using an AVM was not a breach of the agreement.” Id., at 5-6. The district court held that the class action claim survived, explaining at page 6: “Though defendant’s arguments are plausible, they do not prove that plaintiff has failed to state a breach-of-contract claim. It may well be that a licensed appraiser was not required (without so holding), but that does not translate to an allowance of an AVM, much less a mystery AVM whose particulars are totally a secret.” Second, plaintiff alleged that the AVM was unreliable. Id., at 6. Again, at the pleading stage, the district court found plaintiff’s allegations sufficient to survive defendant’s motion to dismiss, id., at 6-7. And third, that Chase should have prorated her 2008 annual fee once it suspended her account, and should not have billed another annual fee in April 2009 because she could no longer “draw” on her account. Id., at 7. Defendant countered that plaintiff’s argument was premised on a drafting error in the document, id., at 8. The federal court held that the defense arguments were “better suited for a motion for summary judgment or trial — not a motion to dismiss,” and that for pleading purposes the class action “alleged sufficient facts with regards to the annual fee to make her claim plausible.” Id.

Class Action Court Decisions Uncategorized

SLUSA Class Action Defense Cases–Demings v. Nationwide Life Insurance: Sixth Circuit Affirms Dismissal Of Class Action Complaint Holding That State-Actions Exception Did Not Apply

Class Action Challenging Secret Revenue-Sharing Payments in Purchase of Mutual Funds Fell Within Scope of “Covered Class Actions” under SLUSA (Securities Litigation Uniform Standards Act of 1998) and was Properly Dismissed because State-Actions Exception did not Apply Sixth Circuit Holds Plaintiff filed a putative class action against various Nationwide Life Insurance entities on behalf of employee-participants in his employer’s “deferred compensation plan” alleging breach of fiduciary duty and unjust enrichment; the class action complaint alleged that Nationwide received “revenue-sharing payments from the mutual funds in which the § 457 plan invested its participants’ individual funds” and that “Nationwide implemented a scheme under which it would receive revenue-sharing payments from mutual funds and mutual fund advisors based upon a percentage of assets invested from the § 457 plans into the mutual funds.

Class Action Court Decisions PSLRA/SLUSA Class Actions Uncategorized

Class Action Defense Cases–Dickson v. American Airlines: Texas Federal Court Dismisses Class Action Against Airline Finding Limitations Period Expired On Claims Under Montreal Convention

Putative Class Action Against American Airlines Asserting Claims under Montreal Convention based on Flight Delays caused by Weather Dismissed without Leave to Amend because Two Year Limitations Period Expired Texas Federal Court Holds On December 17, 2009, plaintiff filed a putative class action against American Airlines for alleged violations of the Convention for the Unification of Certain Rules for International Carriage by Air (“Montreal Convention”), which “provides for compensation to consumers in international air carriage by air for delay of passengers or their baggage or cargo as well as personal injury and death”; specifically, the class action complaint alleged that on December 29, 2006, plaintiff and approximately 2,000 to 33,000 other class members, all airline passengers, “were delayed over 3 hours” and that some of the class members, including plaintiff, were “confined to AA aircraft on the ground for extended periods of time and affected by related actions of AA.

Class Action Court Decisions Uncategorized

PSLRA Class Action Defense Cases–Carr v. Gateway: Eleventh Circuit Affirms Dismissal Of Securities Fraud Class Action For Failure To Adequately Allege Scienter Under PSLRA’s Heightened Pleading Requirements

District Court Properly Dismissed Securities Fraud Class Action because, though Plaintiffs Adequately Alleged Falsity (Contrary to District Court Finding), Class Action Failed to Meet Pleading Requirements of Private Securities Litigation Reform Act (PSLRA) for Scienter Eleventh Circuit Holds

Plaintiffs-shareholders filed a putative class action against Jabil Circuit – “a publicly traded electronics and technology company headquartered in St. Petersburg, Florida” – and certain of its officers and directors alleging violations of securities laws. Edward J. Goodman Life Income Trust v. Jabil Circuit, Inc., ___ F.3d ___, 2010 WL 154519, *1 (11th Cir. January 18, 2010). According to the allegations underlying the class action complaint, Jabil violated its corporate policy of requiring stock options to be exercised at a price “at least equal to fair market value” by backdating options “to a day where the trading price was lower than that on the actual date it is issued, resulting in an instant paper gain to the issuee.” _Id._ The allegations of backdating in the class action complaint “rely almost exclusively on circumstantial evidence…to show that stock option grants to executives were backdated”; the complaint failed to “identify any particular transaction or scheme of backdating or specific recipients of such a scheme.” _Id._ The Securities and Exchange Commission had conducted an informal investigation into Jabil’s stock option practices; moreover, Jabil itself reviewed its stock option practices and concluded that an accounting error “resulted in an overstatement of earnings by $54.3 million [from 1996 to 2005], forcing Jabil to restate its earnings for each of those years.” _Id._, at *2. However, Jabil denied purposely backdating stock options to directors and $49 million of the restated amount was attributable to non-executive employee compensation expenses. _Id._ Defense attorneys moved to dismiss the class action complaint on the grounds that it failed to meet the heightened pleading requirements established by the Private Securities Litigation Reform Act (PSLRA). _Id._, at *1. The district court granted the motion and plaintiffs appealed, _id._ The Eleventh Circuit affirmed.

The Eleventh Circuit began its analysis with the observation that backdating options “is not itself illegal under the securities laws, nor is it improper under accounting principles.” Jabil, at *1. Allegations of improper backdating appeared in the Wall Street Journal, after which Jabil raised its third quarter projections for fiscal year 2006. Id., at *2. The class action complaint alleges that Jabil made this announcement “in order to divert attention from the allegations concerning backdating, and that Jabil knew that the factual bases for its improved forecasts were false even at the time it made the projections.” Id. But these allegations relied on confidential witnesses, and only one confidential source identified anyone as having “specific knowledge” of the allegations asserted therein. Id. The district court dismissed the first amended class action complaint without prejudice, but defense attorneys challenged the second amended class action complaint also for failure to meet the pleading requirements of the PSLRA. Id. “[T]he district court held that the shareholders failed to adequately plead falsity of the allegedly fraudulent statements, failed to raise a sufficient inference of scienter on the part of [plaintiffs], and failed to plead enough facts to show loss causation.” Id., at *3. The Eleventh Circuit began its analysis with the class action’s fraud claim under section 10(b) of the Securities Exchange Act and Rule 10b-5. Id. The Circuit Court did not address loss causation because it concurred with the lower court’s finding that the class action failed to adequately allege scienter. Id.

Class Action Court Decisions PSLRA/SLUSA Class Actions Uncategorized

Class Action Defense Cases–Pendergast v. Sprint: Eleventh Circuit Certifies To Florida Supreme Court Questions Concerning Validity And Enforceability Of Class Action Waiver In Cellular Service Provider’s Mandatory Arbitration Clause

In Class Action Against Sprint Challenging Wireless Telephone Roaming Charges, Whether District Court Erred in Granting Defense Motion to Compel Arbitration of Plaintiff’s Individual Claims Pursuant to Mandatory Arbitration Clause with Class Action Waiver Warranted Certification to Florida Supreme Court because of Uncertainty in Intermediate Appellate Court Opinions Eleventh Circuit Holds

Plaintiff filed a putative class action in Florida federal court against Sprint Solutions and Sprint Spectrum for violations of Florida’s Deceptive and Unfair Trade Practices Act (FDUTPA) and for breach of contract and negligent misrepresentation; specifically, the class action complaint alleged that Sprint “charg[ed] improper roaming fees for calls placed within Sprint’s coverage areas.” Pendergast v. Sprint Nextel Corp., 592 F.3d 1119, 2010 WL 6745, *1, *11 (11th Cir. 2010). The class action complaint improper prayed for monetary damages, as well as declaratory and injunctive relief, and estimated plaintiff’s individual damages to be $20.00. Id. Defense attorneys moved to compel arbitration of plaintiff’s claims on an individual basis, seeking to enforce a mandatory arbitration clause and class action waiver in the Terms and Conditions of plaintiff’s service agreement. Id. The district court granted Sprint’s motion, concluding that under Florida law the arbitration clause and class action waiver were valid, and ordered plaintiff to pursue arbitration of his individual claim, id. Plaintiff appealed; he did not contest the arbitration clause itself but, rather, challenged the class action waiver as procedurally and substantively unconscionable. Id. Further, “because Plaintiff’s contract provides the arbitration and class action waiver clauses are not severable, Plaintiff claims the arbitration clause fails because the class action waiver is unenforceable.” Id. The Eleventh Circuit expressed doubt as to the correct application of state law in this case because of a conflict among decisions in the Florida intermediate appellate courts. Accordingly, the Circuit Court, at page *22, certified the following questions to the Florida Supreme Court:

(1) Must Florida courts evaluate both procedural and substantive unconscionability simultaneously in a balancing or sliding scale approach, or may courts consider either procedural or substantive unconscionability independently and conclude their analysis if either one is lacking?

(2) Is the class action waiver provision in Plaintiff’s contract with Sprint procedurally unconscionable under Florida law?

(3) Is the class action waiver provision in Plaintiff’s contract with Sprint substantively unconscionable under Florida law?

(4) Is the class action waiver provision in Plaintiff’s contract with Sprint void under Florida law for any other reason?

Arbitration Class Action Court Decisions Uncategorized

Vioxx Class Action Defense Cases–In re Vioxx: California Appellate Court Affirms Denial Of Class Action Treatment In Putative UCL/CLRA Class Action Involving Vioxx Because Individual Issues Predominate

Class Action under California’s Unfair Competition Law (UCL) and Consumer Legal Remedies Act (CLRA) Arising out of Merck’s Manufacture and Marketing of Vioxx Properly Denied Class Action Certification because Evidence Supported Trial Court’s Conclusion that Individual Issues Predominate Over Common Issues California Appellate Court Holds

Plaintiffs filed a putative class action in California state court against Merck arising out of its manufacture and marketing of Vioxx, which Merck pulled from the market in September 2004 after a study revealed an increased risk of cardiovascular problems associated with the drug; specifically, the class action complaint alleged causes of action for violations of California’s Unfair Competition Law (UCL) and Consumer Legal Remedies Act (CLRA) and alleging unjust enrichment. In re Vioxx Class Cases, 180 Cal.App.4th 116, 103 Cal.Rptr.3d 83, 87-88 (Cal.App. December 15, 2009). According to the allegations underlying the class action complaint, plaintiffs did not “suffer[] any adverse effects from taking Vioxx” but, they alleged, Merck was liable for false advertising and for marketing a drug that was “less safe than other, less expensive, pain relievers.” Id., at 87; see also id., at 89-90. Plaintiffs moved the trial court to certify the litigation as a class action, id., at 90; defense attorneys opposed class action treatment on the grounds that individual issues would predominate over questions common to the putative class and that the claims of the named representatives were not typical. Id., at 91-92. The trial court agreed with Merck and denied class action certification. Id., at 92-93. In part, the trial court found that the named plaintiffs (who were individuals) “did not possess claims typical of prescription drug benefit providers,” id., at 88. The California Court of Appeal affirmed, rejecting plaintiffs’ claim that reversal was compelled by the Supreme Court’s decision in In re Tobacco II Cases, 46 Cal.4th 298 (Cal. 2009), which issued after the trial court order denying class action treatment.

The appellate court observed that “trial courts are ideally situated to evaluate the efficiencies and practicalities of permitting group action, [and so] they are afforded great discretion in granting or denying certification.” In re Vioxx, at 93 (quoting In re Tobacco II, at 311). In California, “in the absence of other error, a trial court ruling supported by substantial evidence generally will not be disturbed ‘unless (1) improper criteria were used [citation]; or (2) erroneous legal assumptions were made [citation].’” In re Tobacco II, at 311. Particularly here, where the trial court considered thousands of pages of documents in determining the propriety of class action treatment, the appellate court will not substitute its decision for the trial court’s with respect to the inferences to be drawn from the evidence. In re Vioxx, at 94 (citation omitted).

Certification of Class Actions Class Action Court Decisions Uncategorized

Class Action Defense Cases–In re Apple iPhone: Judicial Panel On Multidistrict Litigation (MDL) Grants Defense Motion To Centralize Class Action Litigation But Selects Eastern District Of Louisiana As Transferee Court

Judicial Panel Grants Defense Request for Pretrial Coordination of Class Action Lawsuits Pursuant to 28 U.S.C.§ 1407 and Selects Movant’s Alternative Transferee Forum Over Competing Request of Other Common Class Action Defendant Twelve (12) class actions – three in Ohio, two in the Central and Northern Districts of California and one in the Southern District of California, and one in Illinois, Louisiana, Minnesota and Missouri – were filed against Apple and AT&T “arising from the advertising and marketing of multimedia message service (MMS) functionality of Apple’s iPhone 3G and 3GS supported by AT&T’s 3G network.

Class Action Court Decisions Multidistrict Litigation Uncategorized

Class Action Defense Cases–Murray v. Fidelity: Fifth Circuit Affirms Dismissal Of Class Action Complaint Holding Defense Tender Mooted New Plaintiffs’ Individual Claims

Class Action Complaint that was Non-Justiciable for Failure of Original Plaintiffs’ Claims was Properly Dismissed Following Addition of New Plaintiffs because Defense Tender of Full Payment Prior to Amendment Adding New Plaintiffs as Class Representatives Mooted their Claims Fifth Circuit Holds

Plaintiffs filed a putative class action against Fidelity National Financial and others “alleging that Ticor Title Insurance Company…had overcharged them to record documents related to their residential real estate closings and that the other Defendants were also liable under theories of vicarious liability.” Murray v. Fidelity Nat’l Financial, Inc., ___ F.3d ___, 2010 WL 143454, *1 (5th Cir. January 15, 2010). However, it turned out plaintiffs had not conducted business with Ticor Title but, rather, “had dealt with a third party that promoted itself as ‘Ticor Title of San Antonio,’ despite having no authority to act for any of the Defendants.” _Id._ Accordingly, plaintiffs moved the district court to amend their class action complaint to add two additional plaintiffs (the Murrays) as class representatives on the ground that the Murrays had conducted business with Defendant Chicago Title Insurance Group. _Id._ While that motion was pending, Chicago Title tendered the Murrays a check in full payment of their individual claim; the district court nonetheless granted plaintiffs’ motion and added the Murrays as named representatives for the putative class. _Id._ The new group of plaintiffs thereafter filed an amended class action complaint, _id._ Defense attorneys moved to dismiss the class action complaint on the ground that the Murrays’ claims had been rendered moot by Chicago Title’s tender; defendants moved also for summary judgment on the grounds that the original plaintiffs “failed to establish any case or controversy against any Defendant, because none of the Defendants handled Original Plaintiffs’ real estate transactions.” _Id._ The federal court granted the defense motions, _id._ The Murrays appealed the dismissal of their claims against Chicago Title, and the Fifth Circuit affirmed.

The Murrays argued that because Rule 15(a)(2) requires plaintiffs to inform defendants of the names of proposed class representatives, this “provides defendants the opportunity to ‘pick off’ would-be class representatives by tendering the amount claimed individually by the plaintiff, thereby effectively preventing the original plaintiffs from amending a complaint to add other plaintiffs who better represent the interests of the putative class.” Murray, at 1. Relying on its decision in Zeidman v. J. Ray McDermott & Co., 651 F.2d 1030 (5th Cir. 1981), the Circuit Court held that “As a general principle, a purported class action becomes moot when the personal claims of all named plaintiffs are satisfied and no class has been certified.” Murray, at 2 (citing Zeidman, at 1045). The Court observed at page *2, “In such a case there is no plaintiff (either named or unnamed) who can assert a justiciable claim against any defendant and consequently there is no longer a ‘case or controversy’ within the meaning of Article III of the Constitution.” Id. (citations omitted). And while the Fifth Circuit has “recognized a limited exception to this general principle” where a plaintiff’s claims have been “prematurely mooted” by the defendant. Id. (citations omitted). More specifically, the Circuit Court explained at page *2:

Foreshadowing the concerns raised by the Murrays, the [Zeidman] court noted “that in those cases in which it is financially feasible to pay off successive named plaintiffs, the defendants would have the option to preclude a viable class action from ever reaching the certification stage.” [Citation.] The court ultimately held “that a suit brought as a class action should not be dismissed for mootness upon tender to the named plaintiffs of their personal claims, at least when … there is pending before the district court a timely filed and diligently pursued motion for class certification.” [Citation.]

Class Action Court Decisions Uncategorized