CALIFORNIA CLASS ACTION LAW

Tag: Business

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 Decertifies FLSA Overtime Class of Loan Officers Because of Lack of Evidence of Centralized Employer Practice re Outside Salespersons Exemption

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The Northern District of California granted defendant’s motion to decertify a conditional FLSA class in Wong v. HSBC Mortgage Corporation (USA), No. C-07-2446 MMC, 2010 WL 3833952 (N.D. Cal. Sept. 29, 2010).  Plaintiff HSBC loan officers allege that HSBC improperly classified them as exempt under the Federal Labor Standards Act (“FLSA”), and, consequently, violated the FLSA by failing to pay them overtime compensation. Id. *1. The Court granted plaintiffs’ motion for an order conditionally certifying, for purposes of the FLSA, a class of persons who, as of May 7, 2004, had been employed by HSBC as loan officers within the United States. Id. Notice of the action was sent to the class, and 120 class members filed consent forms, joining the action as plaintiffs.  Id.

Decertification Motion

HSBC argued that individualized factual determinations will be necessary regarding HSBC’s affirmative defense that plaintiffs are/were properly classified as “outside” salespersons and, consequently, are exempt under the FLSA. Id. *2 (citing 29 U.S.C. § 213(a)(1) (providing “maximum hour requirements” in FLSA do not apply to “any employee employed … in the capacity of outside salesman”)). Read the rest of this entry »

Ninth Circuit Reverses Denial of Class Certification, Holding that Disproportionality of Actual Harm Suffered, Enormity of the Potential Liability, and Good Faith Compliance Fail to Justify Denial of Certification on Superiority Grounds

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The Court of Appeals for the Ninth Circuit reversed a denial of class certification in a Fair and Accurate Credit Transactions Act (“FACTA”) case, Bateman v. American Multi-Cinema, Inc., No. 09-55108, — F.3d —-, 2010 WL 3733555 (9th Cir. Sept. 27, 2010).  Plaintiff Bateman brought a class action against American Multi-Cinema, Inc. (“AMC”) alleging that AMC violated FACTA by printing more than the last five digits of consumers’ credit or debit card numbers on electronically printed receipts in December 2006 and January 2007.  Id. *1 (citing 15 U.S.C. § 1681c(g) (2005)).  Plaintiff sought to recover statutory damages ranging from $100 to $1,000 for each willful violation of FACTA. Id. The district court denied class certification under Federal Rule of Civil Procedure 23(b)(3), finding that a class action was not the superior method of litigating the case because AMC had made a good faith effort to comply with FACTA after this lawsuit was filed and the magnitude of AMC’s potential liability–$29 million to $290 million–was enormous and out of proportion to any harm suffered by the class.  Id. (citing Bateman v. Am. Multi-Cinema, Inc., 252 F.R.D 647, 648, 650-51 (C.D. Cal. 2008) (order)). The Ninth Circuit reversed, holding that “none of these three grounds–the disproportionality between the potential liability and the actual harm suffered, the enormity of the potential damages, or AMC’s good faith compliance–justified the denial of class certification on superiority grounds and that the district court abused its discretion in relying on them.” Read the rest of this entry »

Second District Reverses Judgment in a Class Action of $99,000 and Attorneys Fees of $881,715

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The Second District reversed a trial court’s judgment in favor of employees in a class action trial.  Pearline Zalewa v. Tempo Research Corporation, B210429, 2010 WL 3735240 (Cal. Ct. App. 2d Dist. Sept. 27, 2010).  Defendant  fiber-optic equipment manufacturer was sued in a class action by its former employees who claimed that the manufacturer breached an obligation to pay them annual bonuses, an obligation that allegedly continued for years after they were laid off from work during a business downturn.  Id. The court concluded that the employees are not entitled to any recovery: “All but two of the employees relinquished their right to sue when they were laid off, in return for compensation that exceeded their earned severance pay. In any event, there was no promise made to pay bonuses to the employees after they were laid off.”  Id.

The Trial Court’s Judgment

The trial court conducted a bench trial in January 2008, finding that plaintiffs were entitled to recover a direct bonus under theories of breach of contract, promissory estoppel, accounting, and unfair business practices. Id. The court deemed the bonus payments to be “wages” under the Labor Code. Id. And because the bonus payments are wages, plaintiffs were awarded prejudgment interest and attorney fees under the Labor Code. Id. The court enumerated the amount of the award for each employee, less offsets for monies already paid by defendants, plus interest. Id. The total amount of the award, including interest, was approximately $99,000, and plaintiffs’ counsel was awarded attorney fees of $881,715.  Id. Read the rest of this entry »

Southern District Grants Class Certification Granted in Labor Code Class Action

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The Southern District of California granted class certification in a vacation, uniform, paycheck, wage and contract class action.  Lopez v. G.A.T. Airline Ground Support, Inc., No. 09cv2268-IEG(BGS), 2010 WL 3633177 (S.D. Cal. Sept. 13, 2010) (slip op.).

Background

Former employees of Defendant G.A.T. Airline Ground Support, Inc. (“GAT”) sued for systematic wage and hour violations in violation of federal and state law. Id. *1.  GAT provides services to airlines, including ground transportation, aircraft maintenance, and cargo operations management.  Id. The four named Plaintiffs are former ramp agents employed by GAT in California.  Id.

Rule 23(a) Commonality

The court found questions of law or fact common to the class with respect to plaintiffs’ vacation, uniform, paycheck, wage, and contract claims:

Here, as explained in detail below, Plaintiffs present both factual evidence of GAT’s company-wide policies and practices as well as anecdotal evidence in the form of class member declarations regarding the application of those challenged policies and practices. Read the rest of this entry »

Second District Affirms Denial of Certification of Class of Junk Fax Recipients for Lack of Ascertainability

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The Second District affirmed denial of certification of a class of recipients of unsolicited faxes. Law Offices of Hermez Moreno v. Travelcomm Industries, Inc., B214807, 2010 WL 3610131 (Cal. Ct. App. 2d Dist. Sept. 17, 2010).  Plaintiff and appellant Law Offices of Hermez Moreno brought a putative class action under 47 United States Code section 227, the Telephone Consumer Protection Act of 1991 (TCPA), and Business and Professions Code 17538.43 alleging that defendants and respondents Travelcomm Industries, Inc. and others had sent unsolicited faxes.  Id. *1.  The trial court denied class certification based on findings that plaintiff had failed to present substantial evidence that a community of interest existed such that common questions of law and fact would predominate. As a separate basis, the court found that appellant had failed to present substantial evidence that the class was ascertainable. Id. Plaintiff appealed.  Id. *1. Read the rest of this entry »

Ninth Circuit Holds That “Crux of Complaint” Rule Allows Courts to Decide Arbitrability Even Where Plaintiff Fails to Raise Challenge to Arbitrability as a Distinct Claim in Complaint

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The Ninth Circuit Court of Appeals considered whether the “crux of the complaint” rule requires the question of arbitrability to be determined by the arbitrator when a plaintiff’s challenge to the arbitration clause does not appear in his complaint.  Bridge Fund Capital Corporation v. Fastbucks Franchise Corporation, No. 08-17071, 2010 WL 3584060 (9th Cir. Sept. 16, 2010).  The court held that “as long as the plaintiff’s challenge to the validity of an arbitration clause is a distinct question from the validity of the contract as a whole, the question of arbitrability is for the court to decide regardless of whether the specific challenge to the arbitration clause is raised as a distinct claim in the complaint.”  Id. *1. Read the rest of this entry »

Northern District Rejects Collateral Estoppel, Finding Sufficient Difference in Allegedly Misleading Statements

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The Northern District denied a motion to strike class allegations from a putative class action complaint, finding sufficient difference between the allegedly deceptive statements in the prior case and the present case to reject defendant’s collateral estoppel contentions.  Murray v. Sears, Roebuck and Co., No. 09-05744 CW, 2010 WL 3490214 (N.D. Cal. Sept. 3, 2010) (slip op.). Read the rest of this entry »

Northern District Grants Pre-certification Class Discovery

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The Northern District granted a putative class representative’s motion to compel timecard and payroll records for all employees in Valenzuela v. MC2 Pool & Spa, et al., No. C09-01698 RS (HRL), 2010 WL 3489596 (N.D. Cal. Sept. 3, 2010). Read the rest of this entry »

Second District Affirms Denial of Nexium Marketing Class Action

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In Weiss v. AstraZeneca Pharmaceuticals et al., No. B215901,2010 WL 3387220 (Cal. Ct. App. 2d Dist. Aug. 30, 2010), the Second District affirmed denial of class certification and summary judgment in favor of defendants relating to the alleged deceptive marketing of the prescription drug Nexium.

By CHARLES H. JUNG