Class Action Defense Cases-Saxton v. Title Max: Certification Of Federal Fair Labor Standards Act (FLSA) Class Action Denied For Failure To Demonstrate That Class Members Desired To Opt-In And That Plaintiffs Are Similarly Situated Alabama Court Holds

Defense Attorneys for Employer Successfully Defeat Plaintiff Lawyer’s Motion to Conditionally Certify Class on Grounds that Employees Failed to Meet Eleventh Circuit’s Two-Part Dybach Test

Employees filed a putative class action alleging overtime pay violations of the federal Fair Labor Standards Act (FLSA). Saxton v. Title Max of Alabama, Inc., 431 F.Supp.2d 1185 (N.D. Ala. 2006). Over defense objections, the employees sought conditional class certification and permission to send notice of the class action to class members. The lawsuit alleged that the employer’s assistant managers were systematically denied overtime pay in violation of the FLSA, id., at 1186, despite the fact that the employer “has a policy, which store managers are directed to enforce, that assistant managers are not to work over 40 hours in a week,” id., at 1188. The district court agreed with class action defense attorneys that plaintiffs failed to satisfy the two-part test enunciated in Dybach v. State of Fla. Dep’t of Corrections, 942 F.2d 1562 (11th Cir. 1991), and therefore denied the motion.

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

Verizon Class Action Defense Case: Judicial Panel On Multidistrict Litigation (MDL) Grants Defense Motion To Transfer Government Surveillance Class Actions To Northern District Of California

Verizon Defense Persuades MDL Judicial Panel that Class Actions Arising out of Governmental Surveillance of Telecommunication Activity and Verizon’s Participation or Cooperation in such Activity Would Benefit from Transfer to Northern District of California After seventeen (17) class action lawsuits were filed in thirteen (13) federal courts against Verizon Communications, AT&T, BellSouth and certain affiliated companies arising out of the federal government’s telecommunication surveillance activities, and the defendants’ participation in, or cooperation with, that activity, Verizon’s defense attorneys moved the Judicial Panel on Multidistrict Litigation (MDL) to transfer the cases to the District Court for the District of Columbia.

Class Action Court Decisions Multidistrict Litigation Uncategorized

Class Action Defense Cases-Richards v. Delta Air Lines: Denial Of Class Certification Proper Because Lawsuit Predominantly Sought Monetary Damages And Did Not Involve Common Questions Of Law Or Fact D.C. Circuit Holds

Circuit Court Affirms Dismissal of Putative Class Action Against Airline that Alleged Warsaw Convention did not Limit Liability for Lost or Damaged Baggage Because Action did not Satisfy Rule 23(b)(2) or Rule 23(b)(3)

Following the loss of a single piece of luggage on an international flight, plaintiff filed a putative class action against the airline alleging that she was entitled to the fair market value of the luggage and its contents, not the “maximum reimbursement” amount Delta calculated was due under the Warsaw Convention (now superseded). Richards v. Delta Air Line, Inc., 453 F.3d 525, 526 (D.C. Cir. 2006). In essence, the complaint alleged that because Delta did not “as a matter of practice” record the weight of the luggage on passenger luggage tickets, the defense could not rely upon the Warsaw Convention. Id., at 526-27. Plaintiff’s lawyer moved for class certification under Rule 23(b)(2), and later alternatively sought class certification under Rule 23(b)(3). Id., at 527-28. But while the district court found that the requirements of Rule 23(a) had been met, it refused to certify a class because the requirements of Rule 23(b)(2) or (b)(3) had not been met. With respect to Rule 23(b)(2), the court held that class certification “is not appropriate where plaintiff’s claims are predominantly monetary relief,” and found further that the class action complaint essentially sought payment of monetary damages despite the fact that it sought a declaratory judgment. Id., at 528. And with respect to Rule 23(b)(3), the district court held that Delta’s “accord and satisfaction” defense would require “the application of varying state laws and a case-by-case factual inquiry,” thereby defeating a claim that common questions of law or fact predominate. Id. Reviewing the judgment “for abuse of discretion or legal error,” id., at 530, the D.C. Circuit affirmed.

Certification of Class Actions Class Action Court Decisions Uncategorized

Murray v. New Cingular Wireless-Class Action Defense Issues: Promotional Offer For Wireless Service Was “Firm Offer” Under Federal Fair Credit Reporting Act (FCRA) Illinois District Court Holds

Federal District Court Grants Defense Motion for Summary Judgment and Dismisses Putative Class Action Alleging Violations of FCRA (Fair Credit Reporting Act) Holding that Promotional Offer was a “Firm Offer of Credit” and that Failure to Provide “Clear and Conspicuous” Disclosure was not Willful

A putative class action was filed against New Cingular Wireless for alleged violations of the federal Fair Credit Reporting Act (FCRA), 15 U.S.C. §§ 1681 et seq., by accessing credit reports before sending promotional offers for wireless telephone services. Murray v. New Cingular Wireless Services, Inc., 432 F.Supp.2d 788, 789 (N.D. Ill. 2006). The class action defense argued that it obtained consumer credit reports for permissible purposes within the meaning of the FCRA. Specifically, defense attorneys maintained that Cingular used the reports pursuant to § 1681b to make a “firm offer of credit” – defined by FCRA as “any offer of credit or insurance to a consumer that will be honored if the consumer is determined, based on information in a consumer report on the consumer, to meet the specific criteria used to select the consumer for the offer,” 15 U.S.C. § 1681a(1) – and that any deficiencies with respect to the required disclosures were inadvertent.

The facts underlying the lawsuit were as follows. In 2004, Cingular sent plaintiff a promotional offer for a free wireless phone with the following disclosure: “You were selected to receive this special offer because you satisfied certain credit criteria for creditworthiness, which we have previously established. We used information obtained from a consumer-reporting agency…. You have the right to prohibit information contained in your credit files with this and any other consumer-reporting agency from being used with any credit transaction that is not initiated by you …” Murray, at 789-90. Plaintiff filed a putative class action in federal court alleging that the promotion violated the FCRA. First, he argued that the promotion was not an “offer of credit” but simply an offer for a free phone, and that the word “credit” was never used in the promotion. Id., at 791. The court disagreed, explaining “wireless customers pay for services after the actual use of the services. By definition, such a payment scheme puts Cingular at risk that the customer could default on payment-which is essentially what credit is all about.” Id. (citation omitted). As the court explained at page 791,

Class Action Court Decisions FCRA Class Actions Uncategorized

AOL Class Action Defense Case-Simpson v. AOL: Defense Motion To Dismiss Class Action Securities Claims Against Securities Issuer’s Business Partners Properly Granted Ninth Circuit Holds

Class Action Securities Fraud Claims Against Business Partners of Internet Company Failed to Establish § 10(b) Liability for Secondary Actors

Plaintiff filed a putative class action against multiple defendants alleging securities fraud arising out of the overstating of revenues of an Internet company. Defense attorneys for several outside defendants and individual defendants successfully moved to dismiss the § 10(b) claims under the Securities Exchange Act of 1934 on the grounds that Central Bank of Denver, N.A. v. First Interstate Bank of Denver, N.A., 511 U.S. 164 (1994) holds that § 10(b) does not permit recovery for aiding and abetting, and that the moving defendants were not “primary violators.” Simpson v. AOL Time Warner Inc., 452 F.3d 1040, 1042 (9th Cir. 2006). The Ninth Circuit disagreed with the interpretation of Central Bank proffered by the defense, but affirmed because plaintiff had not sufficiently alleged that defendants were primary violators of § 10(b). Id., at 1043. We do not here summarize the detailed fact pattern set forth in the Ninth Circuit opinion. Rather, we focus on the court’s holdings concerning Central Bank and § 10(b) liability.

Defense attorneys argued that “Central Bank limited primary liability under § 10(b) to defendants who personally made a public misstatement, violated a duty to disclose or engaged in manipulative trading activity, and not to those engaged in a broader scheme to defraud.” Simpson, at 1043. The Ninth Circuit disagreed. While the Supreme Court held that Rule 10b-5 liability “does not extend beyond the limits of § 10(b),” id., at 1046, it also cautioned “that secondary actors, other than the securities issuer, may be liable as primary violators under § 10(b) when all elements of the statute are satisfied,” id., at 1047. And while § 10(b) does not extend to the act of “merely ‘aiding and abetting’” a violation thereof, under Ninth Circuit authority one may be found to have primary liability under § 10(b) – even without making any statements – if they substantially participated or were intricately involved in preparing the fraudulent statements. Id., at 1048 (citing Howard v. Everex Sys., Inc., 228 F.3d 1057, 1061 n.5 (9th Cir. 2000).

Class Action Court Decisions PSLRA/SLUSA Class Actions Uncategorized

Muhammad v. County Bank-Class Action Defense Cases: FAA (Federal Arbitration Act) Governed Arbitration Clause Forbidding Class Actions Unconscionable New Jersey Supreme Court Holds

New Jersey Supreme Court Holds that Provision in Arbitration Agreement Prohibiting Class Actions is Unconscionable but Severable so that Plaintiff may Pursue Class-Wide Arbitration

A part-time college student filed a class action against a lender for alleged violations of New Jersey consumer-fraud statutes; the defense moved to compel arbitration of plaintiff’s individual claim based on a class-action bar in an arbitration agreement. Muhammad v. County Bank of Rehoboth Beach, Delaware, ___ A.2d ___, 2006 WL 2273448 (N.J. August 9, 2006). The student had received a short-term unsecured loan in the amount of $200 on May 23, 2003, which she promised to repay, together with a “finance charge” of $60, on June 13, 2003. This meant that the annual percentage rate of the loan was 608.33%. Slip Opn., at 4. She extended the loan twice; each extension required an agreement to pay a $60 finance charge. Unable to pay the loan, plaintiff filed a class action against the lender. _Id._, at 8.

The loan application signed by plaintiff contained an arbitration clause requiring that any dispute be arbitrated, and that barred “bring[ing], join[ing] or participat[ing] in any class action,” Slip Opn., at 5-6. Plaintiff also executed a “Loan Note and Disclosure” form that reiterated the prohibition against class actions. Id., at 6-7. The defense moved to compel arbitration; the trial court granted the motion and the appellate court affirmed. Id., at 9-10. The New Jersey Supreme Court addressed “whether a provision in an arbitration agreement that is part of a consumer contract of adhesion is unconscionable and therefore unenforceable because it forbids class-wide arbitration.” Slip Opn., at 2-3.

Arbitration Class Action Court Decisions Uncategorized

Class Action Defense Cases-Eufaula Drugs v. Tmesys: Defense Removal Of Class Action Improper Because CAFA (Class Action Fairness Act of 2005) Inapplicable And Insufficient Amount In Controversy Alabama Federal Court Holds

Federal Court Remands Putative Class Action Over Defense Objection Because at Least One Member of Class Must Satisfy Jurisdictional Requirement for Damages and Because Under Alabama State Law Class Action was Commenced Prior to CAFA Even Though Summons Issued After CAFA’s Effective Date Issues regarding removal and remand, and regarding federal court jurisdiction under the Class Action Fairness Action of 2005 (CAFA), have been covered in several separate articles. On May 22, 2006, an Alabama federal court remanded to state court a putative class action over defense claims that the court had either diversity jurisdiction or jurisdiction under CAFA.

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

Class Action ADA Claims Tie Employment Law Class Action Cases In California Weekly Filings

California class action defense attorneys will face a substantial number of new class action claims based on last weeks latest court filings. To allow the class action defense lawyer to anticipate claims against which she or he may have to defend, we provide weekly, unofficial summaries of the legal categories for class actions 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.

Class Actions In The News Uncategorized

15 U.S.C. § 1681h – Conditions and Form of Disclosure to Consumers: Statutory Language for the Defense Lawyer of Class Action Lawsuits Under the FCRA (Fair Credit Reporting Act)

As a resource for attorneys defending against class actions under the Fair Credit Reporting Act (FCRA), 15 U.S.C. § 1681 et seq., we provide the text of the FDCPA. This article sets forth for the statutory provisions concerning the conditions and form of disclosures to consumers:

§ 1681h. Conditions and form of disclosure to consumers

(a) In General

(1) Proper identification.

A consumer reporting agency shall require, as a condition of making the disclosures required under section 1681g of this title, that the consumer furnish proper identification.

(2) Disclosure in writing.

Except as provided in subsection (b), the disclosures required to be made under section 1681g of this title shall be provided under that section in writing.

(b) Other Forms of Disclosure

(1) In general.

If authorized by a consumer, a consumer reporting agency may make the disclosures required under 1681g of this title

(A) other than in writing; and

(B) in such form as may be

(i) specified by the consumer in accordance with paragraph (2); and

(ii) available from the agency.

(2) Form.

A consumer may specify pursuant to paragraph (1) that disclosures under section 1681g of this title shall be made

(A) in person, upon the appearance of the consumer at the place of business of the consumer reporting agency where disclosures are regularly provided, during normal business hours, and on reasonable notice;

(B) by telephone, if the consumer has made a written request for disclosure by telephone;

(C) by electronic means, if available from the agency; or

(D) by any other reasonable means that is available from the agency.

FCRA Class Actions Statutes & Rules Uncategorized

15 U.S.C. §§ 1681f and 1681g – Disclosures to Governmental Agencies/Disclosures to Consumers: Statutory Language for the Class Action Defense Lawyer of Class Action Lawsuits Under the FCRA (Fair Credit Reporting Act)

We continue today with the posting of the statutory provisions of the Fair Credit Reporting Act (FCRA), 15 U.S.C. § 1681 et seq., as a resource for class action defense attorneys. The starkest contrast in Congressional treatment in the FCRA is evident from the statutory provisions concerning disclosures to governmental agencies (which consumes a single sentence) and disclosures to consumers (which consume several pages). Those provisions are contained in Sections 1681f and 1681g, respectively, set forth below:

§ 1681f. Disclosures to governmental agencies

Notwithstanding the provisions of section 1681b of this title, a consumer reporting agency may furnish identifying information respecting any consumer, limited to his name, address, former addresses, places of employment, or former places of employment, to a governmental agency.

§ 1681g. Disclosures to consumers

(a) Information on file; sources; report recipients.

Every consumer reporting agency shall, upon request, and subject to 1681h(a)(1) of this title, clearly and accurately disclose to the consumer:

(1) All information in the consumer’ s file at the time of the request except that–

(A) if the consumer to whom the file relates requests that the first 5 digits of the social security number (or similar identification number) of the consumer not be included in the disclosure and the consumer reporting agency has received appropriate proof of the identity of the requester, the consumer reporting agency shall so truncate such number in such disclosure; and

(B) nothing in this paragraph shall be construed to require a consumer reporting agency to disclose to a consumer any information concerning credit scores or any other risk scores or predictors relating to the consumer.

(2) The sources of the information; except that the sources of information acquired solely for use in preparing an investigative consumer report and actually use for no other purpose need not be disclosed: Provided, That in the event an action is brought under this title, such sources shall be available to the plaintiff under appropriate discovery procedures in the court in which the action is brought.

(3) (A) Identification of each person (including each end-user identified under section 1681e(e)(1) of this title) that procured a consumer report

(i) for employment purposes, during the 2-year period preceding the date on which the request is made; or

(ii) for any other purpose, during the 1-year period preceding the date on which the request is made.

(B) An identification of a person under subparagraph (A) shall include

(i) the name of the person or, if applicable, the trade name (written in full) under which such person conducts business; and

(ii) upon request of the consumer, the address and telephone number of the person.

(C) Subparagraph (A) does not apply if–

(i) the end user is an agency or department of the United States Government that procures the report from the person for purposes of determining the eligibility of the consumer to whom the report relates to receive access or continued access to classified information (as defined in section 1681b(b)(4)(E)(i) of this title); and

(ii) the head of the agency or department makes a written finding as prescribed under section 1681b(b)(4)(A) of this title.

(4) The dates, original payees, and amounts of any checks upon which is based any adverse characterization of the consumer, included in the file at the time of the disclosure.

(5) A record of all inquiries received by the agency during the 1-year period preceding the request that identified the consumer in connection with a credit or insurance transaction that was not initiated by the consumer.

(6) If the consumer requests the credit file and not the credit score, a statement that the consumer may request and obtain a credit score.

FCRA Class Actions Statutes & Rules Uncategorized