CALIFORNIA CLASS ACTION LAW

Month: January, 2011

First District Affirms Dismissal of Qui Tam Action for Failure to Identify a “Liquidated and Certain Obligation”

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The First District Court of Appeal affirmed the dismissal of a qui tam action without leave to amend, holding that plaintiffs failed to identify a “liquidated and certain obligation” owed by Bank of America.  State of California ex rel. Joseph McCann v. Bank of America, N.A., No. A126494, — Cal.Rptr.3d —-, 2011 WL 72177 (Cal. Ct. App. 1st Dist. Jan. 11, 2011).  Joseph McCann and Douglas Valdetero (Plaintiffs or Appellants) brought a qui tam action against Bank of America (BOA) in the name of the State of California under the California False Claims Act (CFCA; Govt. Code, s 12650 et seq.).  Id. *1.  Plaintiffs alleged that BOA defrauded the State by failing to pay over to the State amounts that they contend should escheat as abandoned or unclaimed property under the California Unclaimed Property Law (UPL; Code of Civ. Proc. s 1500 et seq.).  Id. The trial court sustained BOA’s demurrer to Appellants’ first amended complaint (FAC) without leave to amend on the basis that it failed to plead a CFCA claim with the required specificity and failed to establish a violation of the UPL.  Id.

Background

Plaintiffs alleged that as a check clearing bank, BOA diligently researched errors which could result in debits (i.e., money due) to BOA, but pursued errors which would result in credits (i.e., money payable) to the presenting banks “much less regularly.” Id. *2.  They contended that, as a result of a policy decision by BOA not to research credits due at the end of each processing date to presenting banks, they became “unidentified credits” which could not be traced to their rightful owners. Id. They allege that BOA’s practice was to transfer these monies to a suspense account for a short period of time, and to then appropriate them into income.  Id. Plaintiffs contended that these unidentified credits are subject to escheat to the State as unclaimed property subject to the UPL. Read the rest of this entry »

Judge Whyte of the Northern District Certifies Class Action Against Dell Related to Alleged Misrepresentation of Discount

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The Northern District granted in part a class certification motion in Brazil v. Dell Inc., No. C-07-01700 RMW, 2010 WL 5387831 (N.D. Cal. Dec. 21, 2010) (slip op.).

Background

On June 15, 2006, plaintiff Steven Seick purchased directly from defendant Dell Inc. (“Dell”) through its online purchasing process a Dell Dimension B 110 desktop computer (“Dimension Desktop”) and some associated peripheral Dell products. Id. *1. Dell allegedly misrepresented to Seick that the base price of the Dimension Desktop reflected a $50 savings from Dell’s regular price for that computer, but during the three months prior to Seick’s purchase, Dell’s average offered sales price for the Dimension Desktop model was allegedly even lower than the amount paid by Seick.  Id. Consequently, rather than having received any discount, Seick asserts that he paid $1.49 in excess of the true regular sales price for the Dimension Desktop. Id. In addition, although Dell represented to Seick that the offer for the $50 savings would expire on June 22, 2006, Dell in fact continued to make the offer until October 12, 2006. Id. Plaintiff Chad Brazil made similar, but not entirely the same allegations.  Id.

Brazil and Seick brought a class action claiming that Dell deceives customers by creating the illusion of discounts and savings through false discounts from false former prices. Id. Former prices purportedly mislead purchasers when products have not been sold at non-marked down or “regular” prices with sufficient regularity. Id.

Plaintiffs in their First Amended Complaint alleged various common law claims, claims under California Bus. & Profs. Code sections 17500 and 17200, et seq., and claims under Cal. Civ.Code section 1750, et seqId. After several motions to dismiss, motions to strike, and amendments to the complaint, plaintiff’ moved to certify the class alleging claims under California law. Id. *2.

Class Definition

Plaintiffs offered the following proposed class definition: “All persons or entities who are citizens of the State of California who on or after March 23, 2003, purchased via Dell’s Web site Dell-branded products advertised with a represented former sales price (i.e., a “Slash-Thru” price or a “Starting Price”) as indicated and set forth [in attached schedules, with limited exclusions].” Id. Read the rest of this entry »

Northern District Grants Certification of Netflix Antitrust Class Action

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The Northern District of California granted plaintiff’s motion for class certification in In Re Online DVD Rental Antitrust Litigation, No. M 09-2029 PJH, 2010 WL 5396064 (N.D. Cal. Dec. 23, 2010) (slip op.).  Plaintiffs are individuals representing a putative class comprised of subscribers to Netflix’s online DVD rental service.

Background

Plaintiffs generally alleged that defendants Netflix, Wal-Mart Stores, and Walmart.com improperly entered into an unlawful market allocation agreement that was publicly announced on May 19, 2005, and which had the effect of illegally dividing the markets for sales and online rentals of DVDs in the United States.  Id. *1.  Specifically, plaintiffs alleged that Netflix and Wal-Mart were competing directly in the online rental DVD market in mid-2004, but that in the face of Blockbuster’s mid-2004 entry into the market place and the ensuing price wars between the three competitors, Netflix began conspiratorial communications with Wal-Mart, with the aim of having Wal-Mart exit the market place and thereby reduce downward pricing pressure in the marketplace.  Id. These efforts were successful, and were memorialized in the May 19 Agreement. Id. Plaintiffs alleged that the purpose of the Agreement was to monopolize and unreasonably restrain trade in the market for online DVD rentals, thereby allowing Netflix to charge supracompetitive prices to its subscribers.  Id.

Plaintiffs asserted four causes of action against Netflix and Wal-Mart: (1) a Sherman Act, section 1 claim for unlawful market allocation of the online DVD rental market (against all defendants); (2) a Sherman Act, section 2 claim for monopolization of the online DVD rental market (against Netflix); (3) a Sherman Act, section 2 claim for attempted monopolization of the online DVD rental market (against Netflix); and (4) a Sherman Act, section 2 claim for conspiracy to monopolize the online DVD rental market (against all defendants). Id. *2.

Class Definition

The putative class was defined as: “Any person or entity in the United States that paid a subscription fee to Netflix on or after May 19, 2005 up to and including the date of class certification.”

Discussion

Stating the policy in favor of certification of antitrust class actions, the court noted that “in antitrust actions such as this one, it has long been recognized that class actions play an important role in the private enforcement of antitrust laws.” Id. *3 (citing Hawaii v. Standard Oil Co., 405 U.S. 251, 262 (1972)). Read the rest of this entry »

Northern District Denies Certification of Wage & Hour Class Action

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The Northern District of California denied class certification of a meal and rest break class action in Washington v. Joe’s Crab Shack, No. C 08-5551 PJH, 2010 WL 5396041 (N.D. Cal Dec. 23, 2010.) (slip op.).  Plaintiff Drew Garrett Washington asserted that defendant Crab Addison, Inc. (“Crab Addison”), a company that operates a number of Joe’s Crab Shack restaurants, failed to provide employees with meal and rest breaks, allowed its restaurant managers to manipulate employee time records to deprive employees of pay for all hours worked (including overtime and missed meal break pay), required employees to perform work “off the clock”; and required employees to pay for their own employer-mandated uniforms.  Id. *1.

Class Definition

Plaintiff moved pursuant to Federal Rule of Civil Procedure 23, to certify a plaintiff class consisting of “all non-exempt restaurant employees employed by Crab Addison at Joe’s Crab Shack restaurants in California from January 1, 2007, through the present.”

Discussion

The court denied the certification motion.  Id. *11.  “Plaintiff’s position is that common questions predominate because the main issue is whether—notwithstanding Crab Addison’s written policies—Joe’s Crab Shack restaurants in California followed a common unwritten policy of denying meal and rest breaks, failing to pay employees who did not take breaks, failing to pay for overtime, requiring employees to purchase their own uniforms, and so forth.” Id. Plaintiff contended that the existence of a policy or practice that in effect contradicts Crab Addison’s written policies can be ascertained by an analysis of the data in Crab Addison’s computer systems.  Id. “But since plaintiff has failed to adequately explain how that analysis works and exactly what the data shows, he has failed to adequately establish the existence of such a policy or practice.” Id. Read the rest of this entry »