CALIFORNIA CLASS ACTION LAW

Justice Scalia Stays Execution of Judgment in Louisiana Tobacco Case, Setting Up Potentially Important Review of Scope of Due Process Protection in Class Action Litigation

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Setting up a potentially important review by the U.S. Supreme Court of the scope of federal Due Process Clause protection in class actions, Justice Antonin Scalia granted an application for stay on Friday by Philip Morris USA, Inc. in Philip Morris USA Inc. v. Scott, No. 10A273, — S.Ct. —-, 2010 WL 3724564 (U.S.  Sept. 24, 2010) (mem.).  Plaintiffs brought a class action against several tobacco companies on behalf of all Louisiana smokers, alleging that the companies defrauded the plaintiff class by “distort[ing] the entire body of public knowledge” about the addictive effects of nicotine.  Id. *1 (quoting Scott v. American Tobacco Co., 2004-2095, p. 14. (La. App. 2/7/07) 949 So. 2d 1266, 1277).  The Fourth Circuit Court of Appeal of Louisiana granted relief on that theory, and entered a judgment requiring applicants to pay $241,540,488 (plus accumulated interest of about $29 million) to fund a 10-year smoking cessation program for the benefit of the members of the plaintiff class.  Id. The Supreme Court of Louisiana declined review.  Id. Defendants asked Justice Antonin Scalia “in [his] capacity as Circuit Justice for the Fifth Circuit, to stay the judgment until this Court can act on their intended petition for a writ of certiorari.” Id.

Justice Scalia recited the standard for a single Justice to enter such a stay, pursuant to 28 U. S. C. § 2101(f): Read the rest of this entry »

Northern District Denies Motion to Compel Arbitration Where Plaintiffs Sought Only Injunctive Relief Under Unfair Competition Law

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The United States District Court for the Northern District of California denied a motion to compel arbitration where plaintiffs sought only injunctive relief under the California Unfair Competition Law (“UCL”).  Cardenas v. Americredit Financial Services Inc., No. C 09-04978 SBA, 2010 WL 3619851 (N.D. Cal. Sept. 13, 2010).

Plaintiffs allege that Defendant AmeriCredit Financial Services, Inc. (“AmeriCredit”), failed to provide Mr. Cardenas with proper notice of his rights in connection with the financing of his car, ostensibly in violation of California’s Unfair Competition Law (“UCL”), California Business and Professions Code § 17200.  Id. *1.  After plaintiff defaulted on his payments, AmeriCredit repossessed Cardenas’ vehicle. Id. *3. The vehicle was subsequently sold and on thereafter, AmeriCredit informed Cardenas that his car had been sold for $12,000, but that he still owed them a deficiency balance of $12,733.85 (i.e., the amount owed on his loan less the amount recovered from the sale of the car). Id. Mr. Cardenas paid only part of the deficiency balance, and AmeriCredit later reported Cardenas’ deficiency to credit bureaus. Id. Read the rest of this entry »