Class Action Lawsuit Defense

Class Action Lawsuit Defense

Class Action Defense News, Developments and Commentary

Breaking Down the Target Payment Card Breach Settlement – It’s Not as Groundbreaking as You’ve Been Led to Believe

Posted in Consumer Class Action, Data Breach

Editor’s Note: The following blog post was originally published by ClassActionBlawg.com. It is republished with permission.

HarrisMartin’s Data Breach Litigation Conference: The Coming of Age is scheduled for next Wednesday, March 25, 2015, at the Westin San Diego.  I’ll be speaking on a panel titled Creative Approaches to Settling Data Breach Cases with Ben Barnow of Barnow and Associates, P.C., Chicago.  So, the news this week was very timely that Target has reached a settlement in the consumer class actions arising out of its massive payment card breach.  Because a few clients and colleagues on both sides of the bar have asked for my opinion about the settlement, I thought I’d share a few thoughts here.

Settlements in data breach cases have been fairly rare up to this point, as many data breach cases have met their doom at the pleadings stage due to the inability of plaintiffs to show injury-in-fact sufficient to give them standing.  Payment Card cases have been an exception because there are real financial losses to consumers that can flow naturally from a hacking incident.  Importantly, these losses generally do not include the amount of any fraudulent card transactions because federal law limits consumer liability to $50 and the major card brands go further and impose $0 liability requirements on issuing banks.  However, other incidental losses, such as replacement card fees, interest, finance charges by other companies due to missed payments, to name a few, can result from a payment card breach.  For this reason, claims in several payment card class actions, including Target (Target Order on Motion to Dismiss) have survived motions to dismiss, leading many defendants to settle these cases.  Payment card class actions against Heartland Payment Systems, TJ Maxx, Michaels Stores, and others were all resolved by class-wide settlements. Read More >>

Unprofessional Marketing: Illinois Appellate Court Denies Professional Liability Coverage for TCPA Violation

Posted in Consumer Class Action, Insurance, TCPA

On November 26, 2014, an Illinois appellate court held that a professional liability insurer had no duty to defend or indemnify its insured for a class action brought under the Telephone Consumer Protection Act (TCPA) because the insured’s robocalls did not constitute conduct of the insured’s business “in rendering services for others,” as required by the policy.  Margulis v. BCS Ins. Co., 2014 IL App (1st) 140286 (Nov. 26, 2014).

In 2008, a class led by Scott Margulis filed a class action suit in Missouri against Bradford, an insurance broker, for making unsolicited and prerecorded telephone calls to residential lines in violation of the TCPA.  Bradford tendered the claim to its professional liability insurer, BCS Insurance Company, but BCS denied coverage.  In a July 2011 settlement, Margulis and Bradford agreed to a judgment of $4,999,999, to be satisfied solely from the proceeds of Bradford’s insurance policies and claims against Bradford’s insurers.  Continue Reading

The FTC’s Thoughts on Why “Unlimited Data” Shouldn’t Need Scare Quotes

Posted in Advertising Class Action

“Unlimited data” shouldn’t need scare quotes: what recent FTC action may mean for wireless providers, broadband companies, and class action plaintiffs

On October 28, 2014, the United States Federal Trade Commission (FTC) sued AT&T’s mobile division in the Northern District of California (F.T.C. v. AT&T Mobility LLC, Case No._ [N.D. Cal., Oct. 28, 2014] “AT&T Mobility”). The FTC alleged that AT&T had signed millions of customers to “unlimited” mobile data plans from 2007 through June 2010, but that in July 2011 AT&T began reducing the data speeds, or “data throttling,” for its unlimited customers. This throttling resulted in drastically reduced service for 3.5 million AT&T customers across a total of over 25 million discrete actions. Based on these allegations, the FTC further alleged that AT&T had engaged in “unfair or deceptive acts or practices in or affecting commerce” and sought an injunction and disgorgement.

As the latest in a series of related regulatory actions, AT&T Mobility echoed an earlier FTC complaint against T-Mobile for bill “cramming” (charging customers for services not sought or understood). The AT&T Mobility allegations mirrored mid-2014 concerns raised by the United States Federal Communications Commission (FCC) regarding a similar plan with a different wireless carrier to throttle heavy data users. The FCC also recognized the AT&T Mobility filing with its own statement that (a) the FCC was coordinating with the FTC “on investigations into carriers slowing down unlimited data” and that (b) customers should “contact the FCC if they are being throttled by AT&T or other cellular providers.” Continue Reading

Class Action Disgorgement Case Dismissed Against PG&E as Remedy Sought Would Interfere with Filed Rates

Posted in Class Action Trends

Companies in regulated markets, such as insurance and energy, are increasing litigating issues surrounding the “filed rate doctrine,” or in other words, whether they can be sued in a class action where the remedy sought necessarily challenges the rates that are required or approved by the relevant regulators.  Pacific Gas & Electric is a great example of a well-reasoned dismissal where the court understood the real risks that regulated industries face from inconsistent and duplicate liability from both regulators and the courts.

A California appellate court in the First District recently upheld a trial court’s demurrer of a class action complaint filed by class representative Filomena Guerrero against the Pacific Gas & Electric Company (“PG&E”).  The complaint alleged that PG&E deceptively represented to both California’s Public Utilities Commission (“PUC”) and the public regarding how much revenue it required to provide safe natural gas service.  The complaint sought restitution and disgorgement of profits for PG&E’s alleged “wrongful diversion of more than $100 million in rates it collected over a thirteen year period that should have been expended on natural gas pipeline safety projects.”  Guerrero v. Pac. Gas & Elec. Co., 2014 WL 5073493, at *1 (Cal. Ct. App. Oct. 10, 2014). Continue Reading

BakerHostetler Antitrust Lawyer Examines Recent Development in Antitrust Class Action Litigation

Posted in Antitrust

GCR 2014The Antitrust Review of the Americas 2015 features a chapter by BakerHostetler antitrust partner Edmund W. Searby entitled, “United States: Private Antitrust Litigation – Class Actions.”  He wrote:

“As many appreciate, two Supreme Court decisions in the last seven years have assisted the defense of antitrust class actions.  The first and most significant is the enhancement of pleading standards. Second, the Supreme Court addressed the standards for class certification in terms that at the very least require greater rigour in class certification. While neither Supreme Court decision is new, we review in this article recent cases to see how these decisions have affected the prosecution of antitrust class actions.”

The chapter includes sections on motions to dismiss antitrust class actions under Twombly, trends involving the application of greater rigor by courts in assessing antitrust class certifications, and patterns in antitrust class action filings by judicial circuit.  Read the chapter.

The 18th annual edition of The Antitrust Review of the Americas covers hot topics in the U.S., Canada and Brazil including: Cartels, Energy, Foreign Investment, Joint Ventures, IP & Antitrust, Mergers, Private Enforcement, Private Equity, Technology and Vertical Restraint. Government officials discuss current enforcement and priorities for the year ahead in the U.S., Canada, Barbados, Brazil, Colombia, Mexico and Nicaragua.

Extracts from The Antitrust Review of the Americas 2015 – www.GlobalCompetitionReview.com

Editor’s Note: This blog post is a joint submission with BakerHostetler’s Antitrust Advocate blog.

Court Takes Cue from Comcast v. Behrend, Certifies Class as to Liability but not Damages

Posted in Class Certification, Securities

Fort Worth Employees’ Retirement Fund v. J.P. Morgan Chase & Co.

In what appears to be an increasingly common practice since the Supreme Court decided Comcast Corp. v. Behrend, 133 S.Ct. 1426 (2013), the Southern District of New York recently certified a class as to liability, but rejected certification as to damages.  Fort Worth Employees’ Retirement Fund v. J.P. Morgan Chase & Co., — F.R.D. —-, 2014 WL 4840752, 09-3701 (JPO) (S.D.N.Y. Sep. 30, 2014).  Taking a cue from Comcast, the Court held that the predominance requirement for class certification—that “questions of law or fact common to class members predominate over any questions affecting only individual members,” see Fed. R. Civ. P. 23(b)(3)—requires plaintiffs to specify a damages methodology that can be utilized for the entire class.  The plaintiffs, investors in certain mortgage-backed securities issued by JP Morgan Chase & Co. and related entities (collectively “JPM”), failed to adequately specify the methodology they planned to use to value the securities at issue.  The Court therefore rejected certification as to damages and placed responsibility on each class member to prove damages on a member-by-member basis.  The Court, however, found that the plaintiffs proved predominance as to liability and certified the class for that limited purpose. Continue Reading

Federal Magistrate Recommends Dismissing TCPA Class Claims Against Coke

Posted in Rule 12 Motions to Dismiss, TCPA

Responding to an invitation to text can satisfy TCPA’s Express Consent Requirement

In a Telephone Consumer Protection Act (TCPA) putative class action against Coca-Cola and its marketing agent, a Northern District of Alabama magistrate judge recommended dismissal on September 3, 2014, of most of the plaintiff’s claims on grounds that the plaintiff gave Coca-Cola prior express consent to send text messages to his mobile phone.

The plaintiff alleged that he and the putative class members responded to a Coca-Cola scoreboard message at a college football game asking fans to “vote” for their favorite team using their mobile phones.  The plaintiff alleged that, after voting, he received a series of unsolicited text messages on his mobile phone.  Based on this, the plaintiff alleged that Coca-Cola unlawfully used an automated telephone dialing system (“ATDS”) to text his mobile phone and that Coca-Cola unlawfully texted his mobile number in violation of the national do-not-call registry on which the number was allegedly listed.

Coca-Cola filed a motion to dismiss both the ATDS claim and the do-not-call registry claim. On the ATDS claim, Coca-Cola unsuccessfully argued that a text message is not a call under the TCPA (an argument that courts have almost universally rejected), and that Coca-Cola did not use an ATDS in dialing the plaintiff’s mobile number (a closer question under current law because the parameters of what qualifies as an ATDS are constantly evolving with technology).  Coca-Cola was successful, however, in arguing that it had a complete affirmative defense to the plaintiff’s claims because the plaintiff gave “prior express consent” by texting his “vote” to Coca-Cola.  In agreeing with Coca-Cola on the express consent argument, the Court adopted a fairly expansive—but well-supported by precedent—definition of consent as “knowingly releasing” a mobile number to a potential caller.  In so finding, the Court noted that the plaintiff could not “plausibly claim that he was simply voting for his favorite team with no expectation of receiving ‘telemarketing’ messages in return.” Continue Reading

In “Zombie” Class Action, Seventh Circuit Requires Plaintiffs to Present Evidence to Prove Home-State Exception to CAFA Jurisdiction

Posted in Class Action Fairness Act, Class Certification

On Tuesday, the Seventh Circuit decided Myrick v. Wellpoint, Inc., Nos. 12-3882, 13-2230, 2014 WL 4073065 (Aug. 19, 2014), which held that plaintiffs were required to produce evidence—and not merely assumptions—about the citizenship of class members to establish the “home-state exception” to CAFA jurisdiction under 28 U.S.C. § 1332(d)(4). The case arose when a health insurer offering policies in Illinois was bought out in 2001 and, in 2002, withdrew from the Illinois market and canceled all of its Illinois policies.

Plaintiffs filed suit in Illinois state court, alleging that the cancellation violated Illinois law, and sought to certify a class of all former policyholders. Defendants removed the case to federal court pursuant to CAFA, as the proposed class had the requisite size, amount in controversy, and minimal diversity. Continue Reading

Nominations Open for ABA Journal’s Top 100 Legal Blogs – Class Action Lawsuit Defense

Posted in Uncategorized

The American Bar Association Journal announced that it is compiling its annual list of the 100 best legal blogs and invites readers to submit a nomination:

Use the form below to tell us about a blog—not your own—that you read regularly and think other lawyers should know about. If there is more than one blog you want to support, feel free to send us additional amici through the form. We may include some of the best comments in our Blawg 100 coverage. But keep your remarks pithy—you have a 500-character limit.

We invite our readers to recommend the Class Action Lawsuit Defense blog and other favorite legal blogs for selection by the ABA. Submissions are accepted through August 8, 2014.