CALIFORNIA CLASS ACTION LAW

Tag: San Francisco

In a Wage Class Action, Defendants Waived Right to Arbitrate After Engaging in Extensive Discovery and Filing 2 Motions to Compel

外はパリパリ、中はジューシー^^

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In an unpublished decision, the First District Court of Appeal affirmed the trial court’s denial of a motion to compel arbitration in a wage and hour class action, where defendants conducted voluminous discovery and filed and fully litigating two motions to compel further responses to discovery, a motion for sanctions and a motion for a protective order.    Partridge, et al. v. Hott Wings, Inc., et al., No. A130266, 2012 WL 470458 (Feb. 14, 2012).

Discussion

The Court found that Defendants’ delay in filing their petition to compel arbitration “connotes an intent not to arbitrate”.  Id. Defendants conducted substantial discovery:

Between March 2010 and the October 2010 hearing on defendants’ motion to compel arbitration, defendants engaged in voluminous written discovery to which plaintiffs responded.   In addition, defendants deposed numerous plaintiffs and third party witnesses.   Although plaintiffs had begun deposing witnesses, they had not yet obtained basic documents from defendants through discovery.   The discovery focused on the liability of individual defendants and the franchise defendants that employ plaintiffs.   As a result of defendants’ discovery requests, plaintiffs provided information regarding plaintiffs’ estimated damages, which defendants were responsible for which violations, and the liability of the individual as well as the franchise defendants.   A reasonable inference is that the information gained from defendants’ discovery goes to significant issues in plaintiffs’ case.

Id.

In addition, the Court found that Defendants “substantially invoked the litigation machinery” by: Read the rest of this entry »

Magistrate Judge Elizabeth LaPorte Grants Final Approval For Settlement With Attorneys Fees of 25% of the Common Fund and $5,000 Incentive Award

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Magistrate Judge Elizabeth D. LaPorte granted final approval for a class of individuals who obtained an Option ARM loan originated by U.S. Financial Funding, Inc. with certain characteristics.  Lymburner v. U.S. Financial Funding, Inc., No. C0800325, 2012 WL 398816 (N.D. Cal., Feb. 7, 2012) (slip op.).  The net settlement amount was approximately $93,750, and the court granted plaintiff’s motion for attorneys’ fees in the amount of $36,250.  Id.

Background

Plaintiff Dian C. Lymburner brought a putative class action against Defendant U.S. Financial Funding alleging claims for fraudulent omissions, breach of contract, and breach of the implied covenant of good faith and fair dealing.  Id.  Plaintiff filed a motion to certify the class, and on January 22, 2010, the Court granted that motion.  Id.  After extensive negotiation, the parties reached a settlement. Id. After notice was mailed, no class members filed an objection or exclusion request. Id.

Discussion

With respect to the total settlement amount, the court noted that “importantly, the Settlement Agreement is premised on Defendant’s limited asset.”  Id.  “Defendant has no other source of funding other than an eroding insurance policy, which was valued at $174,000, and which is now valued at $145,000, which is the total settlement amount.”  Id.  The Court approved the settlement amount, in addition to $36,250 in fees and expenses, which is 25% of the estimated value of the settlement.  Id.  At this amount, Plaintiff’s attorneys received less than their lodestar.  Id.

Judge and Attorneys

United States Magistrate Judge Elizabeth D. LaPorte.

Edward Young Lee, Lee & Fields, A.P.C., Christopher Peter Fields, Los Angeles, CA, Jeffrey K. Berns, Arbogast & Berns LLP, Tarzana, CA, Michael C. Eyerly, Patrick Deblase, Paul R. Kiesel, Kiesel Boucher & Larson LLP, Beverly Hills, CA, for Plaintiff.

Shahram Nassi, Roger Scott Raphael, Lewis Brisbois Bisgaard & Smith, San Francisco, CA, for Defendant.

By CHARLES JUNG

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Northern District Holds That Failing to Receive Opt-Out Notice Insufficient to Support Excusable Neglect Finding to Allow Late Class Member Opt-Out

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The Northern District of California denied a motion by a member of a federal securities class action to opt out after the deadline.  In re Charles Schwab Corporation Securities Litigation, No. C 08-01510 WHA, 2010 WL 4509718 (N.D. Cal. Nov. 1, 2010) (slip op.).   The standard for determining whether a class member should be allowed to opt out of a class action after the applicable exclusion deadline has passed is whether the class member’s failure to meet the deadline is the result of “excusable neglect.”  Id. *1 (citing Silber v. Mabon, 18 F.3d 1449, 1455 (9th Cir. 1994)).

The court found that the excuse provided by the class member—not receiving the opt-out notice—was insufficient to support a finding of excusable neglect:

Having considered the factors set forth above, this order finds that the facts and circumstances underlying the request of Gary Benson do not support a finding of excusable neglect under Ninth Circuit law. The only excuse provided by Mr. Benson is that he did not receive the opt-out notice sent to federal securities class members on October 12, 2009. While it may be true that he did not learn of his involvement in the instant case until recently, the class action notice was properly sent via first-class mail to the address associated with his Schwab account(s) and was not returned to the claims administrator as “undeliverable” (see Dkt. No. 751-1, listing all class members for whom notices were returned “undeliverable” and where new addresses could not be found). In other words, the notice provided to Mr. Benson was reasonably calculated to give him actual notice of this class action and was constitutionally sufficient. This weighs against a finding of excusable neglect.

Id.

The court noted that “if such excuses were deemed sufficient to warrant exclusion at this time, defendants would be prejudiced, given their commitment to a settlement amount that was negotiated with a stable class membership in mind.” Id. Read the rest of this entry »

Northern District Rejects Defendant’s Motion to Communicate Ex Parte With Class Members

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The Northern District denied a class defendant’s request to communicate ex parte with class members.  Kirola v. City and County of San Francisco, No. C 07-03685 SBA, 2010 WL 3505041 (N.D. Cal. Sept. 7, 2010). Defendant City and County of San Francisco (“City”) brought an administrative motion, seeking authorization to communicate with eight specific class members.  Id. The City contended that free communication with these individuals is essential to allow the City to prepare adequately for trial.  Id. The City sought to “present their testimony at trial in order to establish its policies and practices regarding physical access, which is the core issue in this case.” Id. Read the rest of this entry »

Southern District Denies Class Certification on Adequacy of Counsel Grounds

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The Southern District of California in Soto v. Diakon Logistics (Delaware), Inc., Civil No. 08cv33-L(AJB), 2010 WL 3420779 (S.D. Cal. Aug. 30, 2010) denied class certification for, inter alia, failure to include in plaintiffs’ counsel’s declaration a statement that counsel are free from conflicts of interest and failure to address all the issues the court must consider for appointment of class counsel. Read the rest of this entry »

Ninth Circuit Holds Fraud and Consumer Protection Claims Preempted by Medicare Modernization Act

Medicare: Forward NOT Backward
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The Ninth Circuit Court of Appeals in Uhm v. Humana, Inc., No. 06-35672,  — F.3d —-, 2010 WL 3385546 (9th Cir. Aug. 30, 2010) held that the trial court lacked jurisdiction to consider plaintiffs’ breach of contract and unjust enrichment claims because they were not properly exhausted through the administrative remedial scheme established under the Medicare Prescription Drug Improvement and Modernization Act of 2003.  The court further held that plaintiff’s fraud and consumer protection act claims were not subject to the Act’s exhaustion provisions, but that they are expressly preempted.

Circuit Judge Betty Fletcher wrote a pointed concurrence chastising plaintiff’s counsel for filing the class action “all for the recovery of two months’ prescriptions” where a “bit of common sense and attention to the available administrative remedies should have been applied”:

Read the rest of this entry »

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