Class Action Lawsuit Defense

Class Action Lawsuit Defense

Class Action Defense News, Developments and Commentary

The Sixth Circuit Expands American Pipe Tolling

Posted in Rule 23(b)(2) Class Actions

Chairs_99804207On July 7, the Sixth Circuit decided Phipps v. Wal-Mart Stores, Inc., No. 13-6194, 2015 WL 4079441 (6th Cir. July 7, 2015), an interlocutory appeal in one of the regional progeny of the U.S. Supreme Court’s famous decision in Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541 (2011). Dukes and Phipps both involved allegations of “gender discrimination in pay and promotions,” though the Phipps plaintiffs allege that the discrimination stems from “regional Wal-Mart management policies and decisions” rather than national policies. See Phipps, 2015 WL 4079441, at *1 (emphasis added). That distinction proved critical for the thousands of women who did not pursue individual claims following the Dukes decision, which reversed an order certifying a nationwide class of female employees.

Phipps examined the scope of the American Pipe tolling doctrine. The basic rule of American Pipe is that the statutes of limitations for absent class members’ individual claims are tolled while the putative class action makes its way to a Rule 23 determination. See American Pipe & Constr. Co. v. Utah, 414 U.S. 538 (1974); Crown, Cork & Seal Co. v. Parker, 462 U.S. 345, 346-47 (1983). Phipps examined the extent to which American Pipe also tolled otherwise time-barred class claims. At base, Phipps appears to permit follow-on or “stacked” class actions when the new class is, in effect, a sub-class of the prior class—even when the Supreme Court has famously decertified the prior class for want of Rule 23(a) commonality. Continue Reading

A Year Later: The Impact of Halliburton II Is Still Developing

Posted in Class Certification, Securities

Happy Group of Professionals - iStock_000013960457MediumIn June 2014, the Supreme Court issued its decision in Halliburton Co. v. Erica P. John Fund Inc. (“Halliburton II”), a putative class action in which Halliburton investors alleged that the company made misrepresentations designed to inflate its stock price, in violation of section 10(b) of the Securities Exchange Act of 1934 and Securities and Exchange Commission Rule 10b-5. 134 S. Ct. 2398 (2014). Of particular importance were two major holdings. First, the Court extended its holding in Basic Inc. v. Levinson, 485 U.S. 224 (1988) to allow putative securities fraud class members to prove the causation/reliance element of a securities fraud claim at the class certification stage “by invoking a presumption that the price of stock traded in an efficient market reflects all public, material information—including material misrepresentations.” Id. at 2414. Second, the Court held that securities class action defendants must be given the opportunity to rebut this presumption of reliance at the class certification stage by showing that their alleged misstatements didn’t actually impact the price of their stock. Id.

A year later, the ramifications of the Halliburton II decision are still developing. To date, no class action defendant in any published decision has successfully defeated class certification by rebutting the presumption of reliance under the Halliburton II framework. In fact, the cases that have interpreted Halliburton II over the past year have largely confirmed Justice Thomas’ comment in the Halliburton II dissent that “in practice, the so-called ‘rebuttable presumption’ is largely irrebuttable.” Id. at 2424. Continue Reading

Class Certification of California Price Advertisement Case Gives Cause for Concern

Posted in Class Certification

people dollarsSpann v. JCPenney and People of California v. Overstock.com

By Rodger L. EckelberryRand L. McClellan, and Jacqueline K. Matthews June 30, 2015

A recent class certification decision in California involving challenges to a retailer’s price comparison advertisements should prompt retailers to carefully evaluate their sale advertising practices. Whether comparing to “regular” or previous prices, or to the sale prices of competitors, comparison price advertising is increasingly being challenged in court.

In Spann v. JCPenney, the United States District Court for the Central District of California last month certified a class of JCPenney customers who had purchased items advertised as discounted from JCPenney’s “original” price for the same item. Spann v. JCPenney, No. SA CV 12-0215 FMO, 2015 WL 3478038, at *24 (C.D. Cal. May 18, 2015). The plaintiff alleged that the vast majority of these items were never actually sold at the purported higher, “original” price, and thus the purported “sale” prices were false or misleading. The court in JCPenney noted that the practice of comparing one’s own current price to one’s own previous price, or to the price of a competitor, is a widespread sales tactic that can be effective in inducing customers to make purchases. In fact, JCPenney itself previously touted that it was eliminating price comparisons from its advertising in favor of “square deal” pricing, and saw a precipitous corresponding drop in its sales volume. Less than a year later, it reinstated its comparisons to its own “original” prices. Read more >>

Supreme Court to decide if a TCPA class action can be mooted by a pre-certification offer of judgment

Posted in TCPA

Cell phonesYesterday, the United States Supreme Court accepted certiorari to review the Ninth Circuit’s decision in Campbell-Eward Co. v. Gomez, 768 F.3d 871 (9th Cir. 2014), which involved a TCPA class action brought by the recipient of a text message that a contractor, defendant Campbell-Eward, sent on behalf of the U.S. Navy in May 2006. The text message read:

Destined for something big? Do it in the Navy. Get a career. An education. And a chance to serve a greater cause. For a FREE Navy video call [number]. Continue Reading

Status of Pay-for-Delay Cases Nearly Two Years After Actavis – “It ain’t over ’til it’s over.”

Posted in Antitrust

money ThinkstockPhotos-178441253Nearly two years ago the Supreme Court issued its opinion in FTC v. Actavis, 133 S. Ct. 2223 (2013), holding that a reverse payment made by a brand manufacturer to a generic manufacturer to resolve pending patent litigation could satisfy a violation of the Sherman Antitrust Act. In adopting a “rule of reason” test and rejecting the “scope of the patent” test adopted by several lower courts, the Supreme Court held that “[i]t would be incongruous to determine antitrust liability by measuring the settlement’s anticompetitive effects solely against patent law policy, and not against procompetitive antitrust policies as well.” Id. at 2231. Thus, “the antitrust question should be answered by considering traditional antitrust factors.” Id.

Unfortunately, as Chief Justice Roberts predicted when he wished “good luck to the district courts” in his dissent in Actavis, the Court’s majority opinion left more questions unanswered than answered. The majority declined to provide a structure for the rule-of-reason analysis, leaving it to the lower courts to establish the framework. That uncertainty is now making its way through district and circuit courts.  Continue Reading

Third Circuit Clarifies Standard for Ascertainability

Posted in Class Certification

Laptop Magnifying glassIn a recent ruling vacating denial of class certification, the Third Circuit provided guidance on the scope of the implied “ascertainability” requirement under Rule 23. Byrd v. Aaron’s, Inc., 2015 U.S. App. LEXIS 6190 (3d Cir. April 16, 2015) involved a putative class action against Aaron’s, which leases, among other things, laptop computers to consumers. The plaintiffs alleged that Aaron’s and its affiliates had violated the Electronic Communications Privacy Act (ECPA) by surreptitiously monitoring the activity of the rental laptops’ users via spyware that collected screenshots, keystrokes, and webcam images.

The plaintiffs sought to certify a class of “all persons who leased and/or purchased one or more computers from Aaron’s Inc., and their household members, on whose computers DesignerWare’s Detective Mode was installed and activated without such person’s consent on or after January 1, 2007.” The district court refused to certify because the class was not ascertainable. According to the magistrate judge’s report and recommendation, which was summarily adopted by the district judge, the class was underinclusive, because owners, lessees, and their household members did not encompass all individuals whose information might have been surreptitiously gathered. Moreover, the class was overinclusive because mere installation of the spyware was not sufficient to satisfy the interception requirement of the ECPA. Finally, the magistrate judge took issue with the plaintiffs’ failure to define “household members.” Continue Reading

Karlsgodt to Speak at June Strafford Web Seminar

Posted in Events

KARLSGODT_Paul_CAM_2_0443Class Action Lawsuit Defense blog contributor and leader of BakerHostetler’s Class Action Defense team, Paul Karlsgodt  will speak in an upcoming Strafford live phone/web seminar, “Statistics in Class Certification and at Trial: Leveraging and Attacking Statistical Evidence in Class Actions” scheduled for Tuesday, May 12, 1:00 pm-2:30 pm EDT.

For more information or to register>>

Or call 1-800-926-7926 ext. 10. Ask for Statistical Sampling at Class Certification and Trial on 5/12/2015Mention code: ZDFCT

Supreme Court Grants Cert in Spokeo Case

Posted in Class Action Trends, Consumer Class Action

The Supreme Court yesterday morning granted Spokeo, Inc.’s petition for a writ of certiorari in the closely watched case of Spokeo, Inc. v. Robins, No. 13-ClassAction_Calamity_iStock_000007225107Small1339. The case presents the question as to whether defendants can be held liable for automatic statutory penalties under the Fair Credit Reporting Act and other federal statutes where the plaintiffs do not otherwise adequately allege they have suffered any actual injury from the defendant’s conduct. In particular, Spokeo has asked the Court to review the following question:

“Whether Congress may confer Article III standing upon a plaintiff who suffers no concrete harm, and who therefore could not otherwise invoke the jurisdiction of a federal court, by authorizing a private right of action based on a bare violation of a federal statute.” Continue Reading

Coming in June: ABA’s 2nd Annual Western Regional CLE Program on Class Actions & Mass Torts

Posted in Uncategorized

We are pleased to announce that Paul Karlsgodt will be chairing the ABA’s 2nd Annual Western Regional CLE Program on Class Actions and Mass Torts. The event is co-sponsored by the ABA Section of Litigation’s Class Actions and Derivative Suits, Mass Torts, and Securities Litigation Committees, and by the San Francisco Bar Association, which will host the event.KARLSGODT_Paul_CAM_2_0443

The program will be held on Friday, June 19, 2015 at 301 Battery Street, Third Floor, San Francisco, California 94111. The program will begin with lunch at noon and will end at 5:20, followed by a sponsored cocktail reception.  Continue Reading

Craig Hoffman Named Law360 Rising Star for Privacy

Posted in Uncategorized

Recently, Law360 published its list of Top Attorneys Under 40—a list of 145 attorneys spanning 29 practice areas “whose legal accomplishments belie their age.” We were pleased to see that BakerHostetler Partner Craig Hoffman, a member of our Privacy and Data Protection team and editor of the Data Privacy Monitor blog has been recognized as a 2015 ‘Rising Star’ for Privacy. We congratulate Craig and the entire Privacy and Data Protection team for this recognition.

Read Hoffman’s Law360 profile >>