CALIFORNIA CLASS ACTION LAW

January 3, 2011

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 »

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January 1, 2011

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 »

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December 4, 2010

Blog Status: In Trial, So Fewer Updates This Week

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I am in trial, so there will be fewer updates until December 11.

Best,

Charles

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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 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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October 28, 2010

Northern District Denies Discovery of Class Member Identities on Privacy Grounds

[Bob Burman, race car driver] (LOC)
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The United States District Court for the Northern District of California denied the production of names, addresses and telephone numbers of non-opt-in members of a FLSA collective and putative Labor Code class action.  Hill v. R+L Carriers Shared Services, LLC, No. C 09-1907 CW (MEJ), 2010 WL 4175958 (N.D. Cal. Oct. 20, 2010).  Plaintiff Glenn Hill is a former employee of Defendant R+L Carriers Shared Services, LLC, which provides administrative employees to transportation companies all across the United States.  Id. *1. Plaintiff worked as a “dispatcher” at Defendant’s San Lorenzo terminal in California, and brought a collective and class action pursuant to the Fair Labor Standards Act (“FLSA”), California’s wage-and-hour laws and California Business & Professions Code section 17200. Id.

Background

Plaintiff sought two sub-classes: those employees in California and those that he refers to as a Nationwide Collective.  Id. The California Class is defined as “all persons who worked for any period of time in California who were classified as Dispatchers (including “City Dispatchers” and any other position(s) who are either called, or work(ed) as, dispatchers) in the four years prior to the filing of this Complaint, up through the final disposition of this action.” Id. In Defendant contended that a collective action under the FLSA is improper because the job duties, work schedules, and salary of its employees varies across the United States, as well as in the State of California. Id.

Hon. Claudia Wilken, the presiding judge in this matter, conditionally certified a class of Nationwide Collective Plaintiffs.  Judge Wilken also ordered Defendant to “disclose to Plaintiff, subject to a protective order if necessary, the number, location and actual job titles of persons who are classified as dispatchers.”  Id. Defendant provided the class members’ contact information to a third-party administrator, who propounded notice to all putative class members.  Id. Defendant also disclosed the number, location and actual job titles of putative class members to Plaintiff. Id. Two California putative members subsequently opted into the case. Id. Read the rest of this entry »

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