PSLRA Class Action Defense Cases–In re Heartland Payment Systems: New Jersey Federal Court Dismisses Securities Fraud Class Action Holding Class Action Complaint Failed To Satisfy PSLRA

Class Action Complaint Alleging Securities Fraud Failed to Adequately Plead Misrepresentation or Scienter under Heightened Pleading Requirements Established by Private Securities Litigation Reform Act (PSLRA) New Jersey Federal Court Holds Plaintiffs filed a putative class action against Heartland Payment Systems and others alleging violations of federal securities laws; specifically, the class action complaint alleged that defendants concealed information and/or made affirmative misrepresentations that were material to the value of the company’s stock and that plaintiffs suffered damage because the company’s stock value declined almost 80%.

Class Action Court Decisions PSLRA/SLUSA Class Actions Uncategorized

Class Action Defense Cases–In re DirecTV: Judicial Panel On Multidistrict Litigation (MDL) Grants Plaintiffs’ Motion To Centralize Class Action Litigation But Selects Central District Of California As Transferee Court

Judicial Panel Grants Plaintiff Request for Pretrial Coordination of Class Action Lawsuits Pursuant to 28 U.S.C. — 1407, Over Objection of One Group of Class Action Plaintiffs, but Transfers Class Actions to Central District of California Seven class actions were filed in seven different district courts – the Central and Northern Districts of California, the Southern District of Florida, the Northern District of Georgia, the District of New Jersey, the Eastern District of Pennsylvania, and the Western District of Washington – against various DirecTV challenging its early cancellation fee policies.

Class Action Court Decisions Multidistrict Litigation Uncategorized

Class Action Defense Cases–People United For Children, Inc. v. The City of New York: Second Circuit Affirms Approval Of Class Action Settlement But Remands For Clarification Of Scope Of Class Action Release

Class Action Settlement Properly Approved by District Court but Ambiguity in Scope of Release Required Remand for Clarification Second Circuit Holds

Plaintiffs filed a class action in New York federal court against the City of New York and various other defendants that “challenged policies adopted by the New York City Administration for Children’s Services (‘ACS’) relating to the removal of children from their homes in cases of abuse and neglect.” People United For Children, Inc. v. The City of New York, ___ F.3d ___, 2009 WL 4576113, *1 (2d Cir. December 8, 2009). According to the allegations underlying the class action complaint, defendants’ conduct constituted “violations of due process, equal protection, and parental, privacy, cultural, and religious rights,” and constituted discrimination “under the New York State and United States Constitutions.” _Id._ The class action complaint prayed for declaratory and injunctive relief, and for monetary damages. _Id._, at *2. Ultimately, the district court granted plaintiffs’ motion to certify the litigation as a class action. _Id._ Following two years of negotiations, the parties agreed upon a proposed class action settlement that won the preliminary approval of the district court. _Id._, at *3. At the fairness hearing, the district court gave final approval to the class action settlement over the objection of one of the named plaintiffs (Jones) and the objections of a member of the putative class. _Id._, at *1, *3. In part, the district court concluded that Jones had effectively “opted out” of the class, removed her as a class representative, and concluded that it need not consider her objections to the proposed settlement. _Id._, at *1. The objectors appealed the order approving the class action settlement, _id._ The Second Circuit agreed that the district court should not have concluded Jones had “opted out” of the class, but it found the error to be harmless and therefore affirmed.

We do not here summarize the notice provided to the class or the objections leveled against the class action settlement. See McReynolds, at *4-*6. The central issues on appeal were (1) whether Jones had “opted out” of the class and (2) whether the district court should have ignored her objections to the proposed settlement. Id., at *6. With respect to the first issue, the Second Circuit held that the district court erred because Jones had simply objected to the proposed settlement, and stated as much at the fairness hearing. Id., at *7. The Circuit Court explained at page *7, “Despite Jones’ clear indication that she did not intend to opt out of the class action and her invocation of her right to object under the ‘rules,’ the District Court nevertheless found that Jones had opted out of the class because she ‘can’t have it both ways.’ In so finding, the District Court erred in two ways: first, the finding that Jones elected to opt out of the class action was a clearly erroneous finding of fact; and, second, the court’s conclusion that Jones opted out of the class by reason of her objection to the class settlement was an error of law.” The error was harmless, however, because Jones’ objections had been raised by other members of the putative class and so had been considered (and rejected) by the district court. See id., at *8-*9.

Class Action Court Decisions Uncategorized

Class Action Defense Cases–Mohawk Industries v. Carpenter: Supreme Court Holds Collateral Order Doctrine For Appellate Jurisdiction Does Not Extend To Disclosure Orders Adverse To Attorney-Client Privilege

District Court Order Compelling Production of Discovery Protected by Attorney-Client Privilege on Grounds Privilege had been Waived not Appealable because Collateral Order Doctrine does not Extend to such Orders Supreme Court Holds

Plaintiff Carpenter filed a lawsuit against his employer, Mohawk Industries, in a Georgia federal court alleging violations of various labor laws; specifically, plaintiff alleged that he was wrongfully terminated for informing the company’s human resources department that Mohawk was employing illegal aliens. Mohawk Industries, Inc. v. Carpenter, ___ U.S. ___, 130 S.Ct. 599, 2009 WL 4573276, *3 (December 8, 2009). At the time, plaintiff did not know that a putative class action lawsuit (“_Williams_”) had been filed against Mohawk that accused it of “conspiring to drive down the wages of its legal employees by knowingly hiring undocumented workers in violation of federal and state racketeering laws.” _Id._ According to the allegations underlying plaintiff’s individual lawsuit, Mohawk fired him after he refused to be pressured into retracting his accusation. _Id._ Plaintiffs in the _Williams_ class action learned of the _Carpenter_ lawsuit, and “sought an evidentiary hearing to explore Carpenter’s allegations.” _Id._ The company opposed the motion, characterizing Carpenter’s accusations as “pure fantasy” and by attacking Carpenter in its explanation of his termination. _Id._ At the same time, Carpenter was seeking discovery of company documents concerning the meeting with company employees and counsel that preceded his termination; Mohawk opposed the discovery request in _Carpenter_ on the grounds that it sought information protected by the attorney-client privilege. _Id._, at *4. The district court in _Carpenter_ concluded that the attorney-client privileged had been waived based on the disclosures made in the _Williams_ action concerning the grounds for Carpenter’s termination. _Id._ Defense attorneys appealed the court’s order or, in the alternative, sought mandamus relief; the Eleventh Circuit dismissed the appeal for lack of jurisdiction as the order was not appealable, and denied the petition for writ of mandate. _Id._ The Supreme Court granted certiorari “to resolve a conflict among the Circuits concerning the availability of collateral appeals in the attorney-client privilege context.” _Id._

We do not discuss the Supreme Court’s analysis in detail, as we are concerned here only with its holding. (Interested readers may find the entire text of the Supreme Court opinion below.) In brief, the High Court summarized the “final decision” jurisdiction of Courts of Appeal, and the “‘small class’ of collateral rulings that, although they do not end the litigation, are appropriately deemed ‘final.’” Mohawk Industries, at *5 (citation omitted). The Supreme Court explained, “That small category includes only decisions that are conclusive, that resolve important questions separate from the merits, and that are effectively unreviewable on appeal from the final judgment in the underlying action.” Id. (citation omitted). But the Court expressed concern that the “small class” of cases fitting within this exception be interpreted so as to swallow the general rule. Id. And the High Court concluded that “collateral order appeals are not necessary to ensure effective review of orders adverse to the attorney-client privilege,” id., at *6. The Court explained that its holding turned not on the importance of the interest sought to be protected “in the abstract,” but rather “whether deferring review until final judgment so imperils the interest as to justify the cost of allowing immediate appeal of the entire class of relevant orders.” Id. In this regard, the Court noted that it “routinely require[s] litigants to wait until after final judgment to vindicate valuable rights, including rights central to our adversarial system.” Id. (citations omitted). Here, too, the Supreme Court held that “post-judgment appeals generally suffice to protect the rights of litigants and assure the vitality of the attorney-client privilege.” Id.

Class Action Court Decisions Uncategorized

Class Action Defense Cases–In re Sony: Judicial Panel On Multidistrict Litigation (MDL) Grants Defense Motion To Centralize Class Action Litigation In Eastern District Of New York

Judicial Panel Grants Defense Request for Pretrial Coordination of Class Action Lawsuits Pursuant to 28 U.S.C. — 1407, Unopposed by Class Action Plaintiffs, and Transfers Class Actions to Eastern District of New York Seven class actions – five in the Southern District of New York, and one each in the Eastern District of New York and Eastern District of Texas – were filed against various Sony entities “arising from the performance of the ‘optical block’ of second generation Sony WEGA SXRD rear projection HDTV televisions.

Class Action Court Decisions Multidistrict Litigation Uncategorized

Class Action Defense Cases–Carr v. Gateway: Illinois Appellate Court Affirms Denial Of Motion To Compel Arbitration Of Consumer Class Action Claims Because Required Forum Unavailable To Arbitrate Dispute

Illinois Appellate Court Holds Motion to Compel Arbitration of Individual Claims in Class Action Complaint Alleging Violations of Various Consumer Protection Laws, based on Arbitration Clause Containing Class Action Waiver, Properly Denied because Agreement Required Disputes be Heard by National Arbitration Forum which no Longer Conducted Consumer Arbitrations Plaintiffs filed a putative class action in Illinois state court against Gateway, Intel, Hewlett-Packard and others alleging inter alia violations of various California and Illinois consumer protection statutes; specifically, the class action complaint challenged defendants’ marketing of computers equipped with Intel’s Pentium 4 processor.

Arbitration Class Action Court Decisions Uncategorized

Class Action Defense Cases–Keller v. Tuesday Morning: California Appellate Court Affirms Decertification Of Labor Law Class Action Because Evidence Supported Finding That Individualized Inquiries Would Predominate

Class Action Alleging Employer Misclassified Managers as Exempt and Failed to Pay them Overtime Wages Properly Decertified as Class Action because Amount of Time Spent on Managerial Duties Required Individual Inquiry and because “Individualized Issues of Liability and Damages will Predominate” California Appellate Court Holds Plaintiffs filed a putative class action against their employer, Tuesday Morning, alleging violations of California labor laws; specifically, the class action complaint alleged that defendant misclassified its managers as exempt employees and failed to pay them overtime wages.

Certification of Class Actions Class Action Court Decisions Employment Law Class Actions Uncategorized

Class Action Defense Cases–Amburgy v. Express Scripts: Missouri Federal Court Dismisses Theft Of Personal Information Class Action Complaint For Lack Of Standing Because Plaintiff’s Information And Identity Not Stolen

Class Action Seeking Monetary and Injunctive Relief Arising from Theft of Personal Information, Allegedly Creating “Increased Risk” of Identity Theft Requiring Monitoring of Credit, Dismissed for Lack of Standing because Putative Class Representative did not Allege his Information was Stolen or had been used or Disclosed so Plaintiff Failed to Establish Injury-in-Fact Missouri Federal Court Holds

Plaintiff filed a putative class action against Express Scripts for negligence, breach of contract, violations of various “data breach notification laws” and violations of Missouri’s Merchandising Practices Act, arising out of the theft of its customers’ personal identification information; the class action complaint alleged that “inadequate security measures in relation to its computerized database system allowed unauthorized persons to gain access to confidential information of Express Scripts members contained in the database, with such information including names, dates of birth, Social Security numbers, and prescription information.” Amburgy v. Express Scripts, Inc., ___ F.Supp.2d ___ (E.D.Mo. November 23, 2009) [Slip Opn., at 1, 3.] Plaintiff filed the class action in federal court, asserting jurisdiction under the Class Action Fairness Act of 2005 (CAFA), _id._, at 3. According to the allegations underlying the class action complaint, the criminals who stole the information advised Express Scripts “that they would make public the confidential information obtained through the breach if Express Scripts did not pay a certain amount of money to them.” _Id._, at 2. Express Scripts advised its customers of the security breach, _id._ The class action alleged that the theft placed class members “at an increased risk of becoming victims of identity theft crimes, fraud, abuse, and extortion,” and that class members would be required to spend “considerable time and money to protect themselves” from injury. _Id._ Defense attorneys moved to dismiss the class action complaint on the grounds that plaintiff lacked standing and that the class action failed to state a claim for relief. _Id._, at 3. The district court granted the motion.

The federal court noted, “Database breaches appear to provide the basis for a new breed of lawsuits, and especially class action lawsuits, in which plaintiffs allege, as here, that the database handlers’ negligence in developing and maintaining security measures have resulted in otherwise personal and confidential information being compromised, thereby increasing the risk of identity theft for those individuals whose information was so compromised. The remedies sought in these actions vary, but generally include costs for credit monitoring, costs for closing and opening financial accounts, and damages for emotional distress.” Amburgy, at 5. The district court observed that federal courts have reached different conclusions as to whether individuals have Article III standing to prosecute such lawsuits, though the “recent trend” has been to find that standing exists based on a Seventh Circuit decision in Pisciotta v. Old Nat’l Bancorp., 499 F.3d 629 (7th Cir. 2007). See id., at 5-7. But the court explained at page 7, “because the requirement of standing is firmly rooted in the Constitution and is not subject to whim, the undersigned is reluctant to look to a ‘recent trend’ when analyzing whether or not a party has standing to sue in federal court.” Accordingly, it examined the standing issue with fresh eyes.

Class Action Court Decisions Class Action Fairness Act (CAFA) Uncategorized

Class Action Defense Cases–Ackerson v. Bean Dredging: Fifth Circuit Affirms Dismissal Of Class Action Against Dredging Contractors For Damage Caused By Hurricane Katrina Holding Government-Contractor Immunity Applied

District Court did not Err in Dismissing Class Action Complaint Against Dredging Contractors seeking Monetary and Injunctive Relief for Damages Caused by Hurricane Katrina because Defendants Acted Pursuant to Government Contracts under Act of Congress and were Entitled to Government-Contractor Immunity Fifth Circuit Holds Plaintiffs filed a putative class action against the federal government and thirty-two others (the Contractor Defendants) “who dredged the Mississippi River Gulf Outlet to recover damages sustained during Hurricane Katrina.

Class Action Court Decisions Uncategorized

Class Action Defense Cases–In re Cheerios: Judicial Panel On Multidistrict Litigation (MDL) Grants Plaintiffs’ Motion To Centralize Class Action Litigation But Selects District Of New Jersey As Transferee Court

Judicial Panel Grants Plaintiffs’ Request for Pretrial Coordination of Class Action Lawsuits Pursuant to 28 U.S.C. — 1407, Supported by All Responding Parties Despite Disagreement over Appropriate Transferee Court, but Transfers Class Actions to District of New Jersey Five class actions – two in the Central and one in the Eastern Districts of California and one each in the District of New Jersey and the Eastern District of New York – were filed against General Mills alleging false advertising claims arising out of its “labeling of its Cheerios cereals, and, specifically, claims that eating Cheerios can lower a person’s cholesterol.

Class Action Court Decisions Multidistrict Litigation Uncategorized