Class Action Lawsuit Defense

Class Action Lawsuit Defense

Class Action Defense News, Developments and Commentary

Eighth Circuit Becomes First Appellate Court to Apply Halliburton II Price Impact Analysis

Posted in Class Certification

The Eighth Circuit has become the first federal circuit court to apply the Supreme Court’s Halliburton Co. v. Erica P. John Fund, Inc., 134 S. Ct. 2398 (2014) (Halliburton II) decision. Relying on Halliburton II, the Eighth Circuit reversed the district court’s certification of a class of Best Buy shareholders in a Rule 10b-5 case. In a 2-1 opinion, the court held that the defendants had rebutted the fraud-on-the-market presumption of reliance and, as a result, class certification was improper under Civil Rule 23(b)(3) because individual questions of reliance predominated over common questions of law and fact. The case is IBEW Local 98 Pension Fund v. Best Buy Co., No. 14-3178, 2016 WL 1425807 (8th Cir. Apr. 12, 2016).

Like many Rule 10b-5 cases, Best Buy involved statements reflecting earnings per share (EPS) guidance that later proved to be too optimistic. The plaintiffs alleged the company and its executives made two sets of misleading statements regarding EPS on the same day, the first in a press release issued before the stock market opened and the second in a conference call with analysts after the market opened. Notably, the district court found that the earlier statements in the press release were nonactionable forward-looking statements, but the later statements in the conference call were potentially actionable. On appeal, the Eighth Circuit did not review the district court’s ruling on whether each set of statements was actionable. Continue Reading

When a Published Data Breach is a Covered Data Breach

Posted in Data Breach, TCPA

Can an inadvertent Internet posting of a patient’s medical information trigger insurance coverage for liability stemming from a data-breach class action? The Fourth Circuit held last week that it can, and it added to the growing body of case law construing what “publication” means in the context of whether class liability is covered by commercial insurance policies.

We’ve written before about two of the hot corners of the class action arena, data breaches and Telephone Consumer Protection Act claims, in which much of the recent litigation has turned on the extent to which a plaintiff can establish or has established standing. But recent cases, including last week’s Fourth Circuit opinion in Travelers Indem. Co. of America v. Portal Healthcare Solutions, L.L.C., —Fed. Appx.—, 2016 WL 1399517 (4th Cir. 2016), reflect the burgeoning importance of the subsidiary insurance coverage issue. Continue Reading

Sixth Circuit Decision Clarifies Timing of Removal Under the Class Action Fairness Act

Posted in Class Action Fairness Act

Partner Greg Mersol of BakerHostetler’s Employment Class Action Blog published a blog post regarding a recent Sixth Circuit decision that clarified the timing of removal under the Class Action Fairness Act.  As stated in the post, the bottom line is that the “time for CAFA removal runs from when the plaintiffs provide the defendant with allegations or evidence meeting the amount in controversy, not when the defendant might compute damages from its own records.”  Read the full blog post >>

Seventh Circuit Throws Out TransUnion’s Clickwrap Agreement and Incorporated Class Waiver

Posted in Arbitration

In recent years, and in particular since decisions like AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (2011), a powerful defense to consumer class actions has been arbitration agreements that include class waivers. The Supreme Court’s recent decision in DIRECTV, Inc. v. Imburgia, 136 S. Ct. 463 (2015) reinforces that defense, and assures that the use of arbitration agreements and class waivers will continue to be a powerful tool to use against consumer class actions.

But before Concepcion and Imburgia can apply, the consumer must be bound to an arbitration agreement—a task that is not necessarily straightforward. In Sgouros v. TransUnion Corp., — F.3d —, 2016 WL 1169411 (7th Cir. Mar. 25, 2016), the Court held that the plaintiff-consumer did not agree to arbitrate his claims when he purchased his credit score on TransUnion’s website. Continue Reading

Circuits Clash Over Ascertainability Standard

Posted in Class Certification

The Third and Seventh circuits have reached a sharp divide during the past year over the meaning of the implied “ascertainability” prerequisite to class certification. The Third Circuit affirmed a narrow version of ascertainability in Byrd v. Aaron’s Inc., 784 F.3d 154, 168 (3d Cir. 2015), but several months later the Seventh Circuit refused the defendant’s invitation to do likewise in Mullins v. Direct Digital, LLC, 795 F.3d 654, 657 (7th Cir. 2015).

Both circuits agree that before a class may be certified, it must be ascertainable. The difficulty arises in determining exactly what requirements the ascertainability prerequisite entails. The Third Circuit’s decision in Byrd attempted to provide clarification, holding that ascertainability “consists of nothing more” than two inquiries: a plaintiff must show that “(1) the class is defined with reference to objective criteria; and (2) there is a reliable and administratively feasible mechanism for determining whether putative class members fall within the class definition.”[1] Notably, identifying class members via affidavit is not considered administratively feasible by the Third Circuit, which had refused to sanction class member identification made by “no more than . . . potential class members’ say-so” in Marcus v. BMW of North America, LLC, 687 F.3d 583 (3d Cir. 2012) and Carrera v. Bayer Corp., 727 F.3d 300 (3d Cir. 2013). Continue Reading

Tyson Foods, Inc. v. Bouaphakeo: The Supreme Court Declines to Rule Out Representative Evidence in Class Actions

Posted in Employment

In Tyson Foods, Inc. v. Bouaphakeo, 577 U.S. __ (2016), the Supreme Court considered whether a case could proceed as a class action under Rule 23(b)(3) when the plaintiffs relied upon statistical, representative evidence to show both the existence of injury and damages. On Tuesday, in a 6-2 decision, the Supreme Court held that the plaintiffs could rely on statistical evidence to determine classwide liability, but did not reach the question of class-wide damages. In so doing, the Court declined to promulgate a bright-line rule about the use of representative evidence. Instead, whether representative or statistical evidence “may be used to establish classwide liability will depend on the purpose for which the sample is being introduced and the underlying cause of action.”

In Tyson Foods, a group of workers brought a proposed Rule 23(b)(3) class action against their employer for unpaid overtime in violation of Iowa state wage-and-hour law as well as a putative collective action under the FLSA. The presence of the FLSA claim alongside the state law claim substantially influenced the Court’s legal reasoning regarding statistical proof of class-wide liability. The workers claimed Tyson did not compensate them for the total time they spent “donning” and “doffing” protective and sanitary equipment at Tyson’s facility. The plaintiffs argued that Tyson violated the FLSA by not providing overtime pay to those employees whose donning and doffing time, when added to their regular hours, exceeded 40 hours in a given week. Continue Reading

Price Comparison Class Actions Against Retailers Heat up in New York

Posted in Class Action Trends, Consumer Class Action

Excited Shopping Woman isolated on white

The common retail practice of comparing an item’s current price with a higher “original,” “regular,” or “MSRP” price has recently come under increasing fire from consumers, who say the higher comparison price is often fictitious and misleads shoppers into believing they are getting a better bargain than they really are. Over the past two and a half years, more than 50 putative class actions have been filed in courts across the country, seeking relief under state consumer protection statutes for purchases made in reliance on these allegedly misleading price comparisons.

Until recently, these class actions had been concentrated in California, where plaintiffs can take advantage of state statutes that do not require a consumer to show that they sustained an actual economic loss in order to state a claim. Under each of California’s three consumer protection statutes, plaintiffs sufficiently plead an injury so long as they allege they would not have made the purchase but for the misleading price comparison. Hinojos v. Kohl’s, 718 F.3d 1098, 1107 (9th Cir. 2013). That is, even if the items they purchase are worth no less than what consumers paid for them, the California statutes still permit consumers to obtain relief in the form of restitution or an injunction. Continue Reading

Supreme Court Nixes Defendants’ Attempts to Get Rid of Class Actions by Making “Pickoff” Offers to Settle Named Plaintiffs’ Individual Claims

Posted in TCPA

Teenage girl text messaging on her phone

Editor’s Note: Originally published by the Columbus Chamber of Commerce, this article appeared on their website March 10 2016. It is republished to BakerHostetler’s Class Action Lawsuit Defense blog with their permission.

The Supreme Court recently held that a defendant cannot get rid of a class action by merely offering to settle with the named plaintiff on his or her individual claims. In the past, class action defendants have sometimes attempted to dispose of the entire class action in this manner by making “pickoff” offers that give the named plaintiff everything he or she asked for on an individual basis, before the court approves the lawsuit to go forward as a class action. But in a recent decision, the Supreme Court held that such “pickoff” offers do not moot the class claims. Campbell-Ewald Co. v. Gomez, ___ U.S. ___, 136 S.Ct. 663 (2015). The Court, however, expressly left open the question of whether actual payment in full for the named plaintiff’s individual claims (as opposed to just an offer) could moot the case.

The plaintiff in Campbell-Ewald brought individual claims under the Telephone Consumer Protection Act (TCPA) for text messages that he said he received without his consent. The plaintiff also sought to represent a nationwide class of individuals who had received similar unconsented-to text messages. Before the plaintiff’s deadline to request the court’s approval for the lawsuit to proceed as a class action, the defendant made a settlement offer for the full amount of monetary damages individually claimed by the plaintiff. The plaintiff did not accept the settlement offer.   Continue Reading

Notice to Unnamed Members of Putative Class After Plaintiff Accepts a Precertification Tender Under New York CPLR § 908

Posted in Class Certification

PeopleAround$RetouchedLeftUnder Federal Rule of Civil Procedure 23(e)(1), claims, issues, or defenses of a certified class may be settled, voluntarily dismissed, or compromised with the court’s approval. While many states look to the Federal Rules for guidance, there can be notable distinctions between Federal Rule 23 and its state counterparts.

One such example is Vasquez v. National Securities Corporation, 2015 N.Y. Misc. LEXIS 1457, at *2 (N.Y. Sup. May 1, 2015), where the New York trial court held that § 908 of Article 9 of the New York Civil Practice Law and Rules (“CPLR § 908”) requires notice to a putative class when an individual settlement is reached prior to a decision on the merits of a motion to dismiss or a class certification motion. The Vasquez court followed Avena v. Ford Motor Co., 85 AD2d 149, 152-53, 447 N.Y.S.2d 278 (1st Dept. 1982), which it saw as binding precedent, despite acknowledging that the defendants and respected commentators had persuasively argued that Avena and its progeny are outdated.  Continue Reading

Sixth Circuit Reverses Dismissal, Under First-to-File Rule, of Action Brought by Putative Class Members of Earlier-Filed Class Action

Posted in Ohio

Oil pumps

Last week, in Baatz v. Columbia Gas Transmission LLC, No. 15-3208, 2016 WL 731900 (6th Cir. 2016), a panel of the Sixth Circuit Court of Appeals reversed the dismissal of a lawsuit brought by a group of landowners in Medina, Ohio against Columbia Gas Transmission for allegedly storing natural gas under their property without compensation. The district court had dismissed the lawsuit under the “first-to-file” rule on the ground that it was duplicative of a class action filed against Columbia over a year earlier by other Ohio landowners: Wilson v. Columbia Gas Transmission LLC, No. 2:12–cv–01203 (S.D. Ohio Dec. 21, 2012). While the panel concluded that the first-to-file rule applied, it nevertheless reversed the district court’s dismissal because it found that the Medina landowners raised “serious concerns” about their ability to have their claims heard in the earlier-filed class action. Continue Reading