November | 2010 | CALIFORNIA CLASS ACTION LAW

November 16, 2010

Central District Denies Twombly Challenge to Wage & Hour Class Action Pleadings, Holds That FLSA Is a Proper Predicate for a UCL Claim, but Strikes Fees Prayer Under C.C.P. § 1021.5

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The United States District Court for the Central District of California held that (1) relatively formulaic pleadings in a wage and hour case were sufficient to meet the pleading requirements of Rule 8, even under Twombly and Iqbal; (2) the FLSA is a proper predicate for a UCL claim; and (3) plaintiffs’ prayer for attorneys fees under Cal. Code Civ. Proc. section 1021.5 should be stricken. Whitaker v. Countrywide Financial Corp., No. CV CAS 09-5898 (PJWx), 2010 WL 4537098 (C.D. Cal. Nov. 1, 2010).

Background

A putative class action was brought on behalf of current and former employees of Countrywide Financial Corporation and Countrywide Home Loans, Inc. (the “Countrywide Defendants”) against the Countrywide Defendants and Bank of America, the alleged successor employer and/or successor in liability to the Countrywide Defendants. Id. *1. The FAC alleges claims for: (1) failure to pay overtime in violation of Cal. Labor Code s 510 and s 1194 and IWC Wage Order 4-2001; (2) Cal. Labor Code s 203 waiting penalties; (3) failure to provide an accurate itemized wage statement pursuant to Cal. Labor Code s 226; (4) failure to pay minimum wage in violation of Cal. Labor Code s 1194 and IWC Wage Order No. 4-2001; (5) failure to pay minimum and overtime wages in violation of the Fair Labor Standards Act, 29 U.S.C. s 206(a); and (7) unfair competition pursuant to Cal. Business & Professions Code, s 17200 et seq. Id. Defendants moved to dismiss or strike plaintiffs’ first amended complaint. Id.

Discussion

Defendants argued that plaintiffs’ claims should be dismissed because they are factually devoid and simply “parrot the statutory language and proffer purely conclusory allegations”, thereby running afoul of the standards set out in Bell Atlantic Corp. v. Twombly, 127 S.Ct. 1955, 1964-65 (2007) and Ashcroft v. Iqbal, 556 U.S. ___, 129 S.Ct. 1937 (2009). Read the rest of this entry »

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November 15, 2010

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 »

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November 11, 2010

MDL Panel Vacates Prior Transfer Order in Checking Account Overdraft Litigation

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The United States Judicial Panel on Multidistrict Litigation vacated a prior order conditionally transferring two actions pending in two districts for inclusion in centralized pretrial proceedings in actions involving checking account overdraft fees. In re: Checking Account Overdraft Litigation, MDL Nos. 2036, 2166, 715 F. Supp. 2d 1358 (June 3, 2010).

Plaintiffs in two actions, one pending in the Northern District of Illinois (Schulte ) and the other in the Northern District of Georgia (Willard ), moved, pursuant to Rule 7.4, R.P.J.P.M.L., 199 F.R.D. 425, 435-36 (2001), to vacate the portions of the Panel’s order conditionally transferring the actions to MDL No.2036. Id. 1358. Fifth Third Bank, the sole defendant in Schulte, and Fifth Third Bancorp, the sole defendant in Willard, separately moved for the same relief and moved for separate centralization of Schulte and Willard in the Northern District of Illinois. Id. Plaintiffs’ Lead Counsel and Plaintiffs’ Executive Committee in MDL No.2036, as well as plaintiff in a Southern District of Florida action against Fifth Third Bank, opposed both the motions to vacate and Fifth Third Bank’s motion for separate centralization. Id.

The panel denied Fifth Third Bank’s motion for centralization and granted the motions to vacate. Id. At oral argument, counsel for the Willard plaintiff informed the Panel that his client and the Schulte plaintiff had reached a settlement with Fifth Third Bank, and that the Schulte plaintiff had, that very day, filed with the Northern District of Illinois court a motion seeking preliminary approval of the class action settlement, publication of notice, and the setting of a final fairness hearing. Id. In light of these developments, the Panel concluded that neither creation of a separate MDL nor, in the alternative, transfer of Schulte and Willard to MDL No.2036 was warranted. Id. 1358-59. Read the rest of this entry »

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November 11, 2010

MDL Panel Denies Unopposed Motion to Centralize 2 Nissan Dashboard Class Actions

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The United States Judicial Panel on Multidistrict Litigation declined to centralize pretrial proceedings in the In Re: Nissan North America, Inc., Infiniti Fx Dashboard Products Liability Litigation, MDL No. 2164, 715 F. Supp. 2d 1355 (June 3, 2010). Nissan North America, Inc. (Nissan) moved for centralized pretrial proceedings in two putative class actions, pending in two districts, alleging that the dashboards in two of its vehicle models were prone to unsightly bubbling. Id. 1355. The litigation consists of one action pending in the Western District of Missouri (Hope) and one action pending in the Eastern District of Texas. Id. Plaintiffs in both actions supported Nissan’s motion. Id.

The Panel denied Nissan’s motions, finding a lack of overlapping classes and noting that the same attorneys represent plaintiffs in both actions:

There are only two actions in this docket. Although both are putative class actions, the Hope plaintiffs seek certification of a Missouri-wide class, while the Aaron plaintiff seeks certification of a Texas-wide class. Thus, there are no overlapping classes. In addition, the same attorneys represent plaintiffs in both actions. While the actions do share some questions of fact regarding whether the dashboards of Infiniti FX35 and FX45 crossover vehicles are prone to unsightly bubbling, the parties have not convinced us that those questions are sufficiently complex and/or numerous to justify Section 1407 transfer at this time. Alternatives to transfer exist that may minimize whatever possibilities there might be of duplicative discovery and/or inconsistent pretrial rulings. See, e.g., In re Eli Lilly and Co. (Cephalexin Monohydrate) Patent Litigation, 446 F.Supp. 242, 244 (Jud.Pan.Mult.Lit.1978); see also Manual for Complex Litigation, Fourth, s 20.14 (2004).

Id. Read the rest of this entry »

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November 8, 2010

U.S. Supreme Court Set to Hear Oral Argument in AT&T Mobility v. Concepcion, a Case Which Many Predict Will End Consumer Class Actions

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The U.S. Supreme Court will hear oral argument in AT&T Mobility v. Concepcion tomorrow (Tuesday, Nov. 9, 2010). This is a critical case, in which the Court may effectively end most court-based consumer class actions.

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November 8, 2010

Central District Strikes Opposition Filed by Terminated Former Co-Counsel in Putative Class Action

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In the latest round of an apparent falling out between law firms, the Central District of California struck a terminated firm’s request to strike the notice of its termination, and considered but did not rule on the remaining firm’s alleged ethics violations. Yumul v. Smart Balance, Inc., No. CV 10-00927 MMM (AJWx), 2010 WL 4352723 (C.D. Cal. Oct. 8, 2010).

Background

Plaintiff Rebecca Yumul filed a notice of termination of counsel, terminating Beck & Lee Business Trial Lawyers (“Beck & Lee”) as her counsel. Id. *1. The notice was filed by Beck & Lee’s former co-counsel, the Weston firm (“Weston”), which continues to represent Yumul. Id. Beck & Lee filed a pleading requesting that the court strike the notice of termination, alleging ethical violations by the Weston, and seeking Weston’s disqualification. Id. Beck & Lee asserts that Weston has filed a suit in the Southern District of California to determine the validity of the Joint Prosecution Agreement (“JPA”) that governed Beck & Lee’s co-counsel relationship with Weston in this and other class actions. Id. Yumul filed an ex parte application to strike Beck & Lee’s filings. Id.

Motion to Strike Terminated Counsel’s Opposition

The court granted plaintiff’s motion to strike Beck & Lee’s opposition to the notice of termination on the grounds that it interferes with her absolute right to discharge her attorney. Id. Read the rest of this entry »

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Month: November, 2010