Source: https://www.uclpractitioner.com/class_actions_general/
Timestamp: 2019-04-23 06:38:54+00:00

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Posts categorized "Class actions - general"
There will be a public hearing next Wednesday, March 27, 2013 at 10:00 a.m. at San Francisco City Hall to discuss whether the City will provide adequate space for the San Francisco Law Library. A couple of weeks ago, the library filed suit against the City over this problem.
I'm quoting the library's press release in full below. This is very important; if you are in San Francisco please consider participating. The library director, Marcia Bell, asks that we all RSVP to her if we can attend. See below for details.
On March 27 at 10 a.m. in room 250, the Board of Supervisors Budget & Finance Committee is scheduled to consider a proposal to lease only 20,000 square-feet of space at 1200 Van Ness Avenue. The City is proposing to move the Library here eventually after the Veterans Building closes in May.
The Law Library had proposed leasing 30,000 square-feet as the absolute minimum the Library needs to function, house its collection, and effectively serve the public. The City proposal is grossly inadequate.
Please come on March 27 to City Hall to speak for a minute or two in support of the Library and explain why it needs appropriate funding and space to preserve public access to legal resources. The hearing will be held in Room 250, starting at 10 a.m.
This is the first ever public hearing about the Law Library’s space. Given the lack of understanding and interest on the part of the city up until this point, this hearing could make all the difference. The supervisors really need to hear from the people who need and care about the library.
If you or anyone else is interested in attending this meeting, please email the Law Library director, Marcia Bell, at marcia.bell @ sfgov.org so we can put you on the list and provide further details. We will reconfirm the time and location. We are anxious to get the word out to as many people as possible—please pass the info along to any one you can.
For additional information about the Law Library's fight for sufficient space and pending litigation against the City, please visit the Library’s homepage at www.sflawlibrary.org.
Questions? Please call us at 415-554-6821.
New opinion analogizes to class communications in striking down gag order: San Francisco Unified Sch. Dist. ex. rel. Contreras v. First Student, Inc.
In San Francisco Unified School District ex. rel. Contreras v. First Student, Inc., ___ Cal.App.4th ___ (Feb. 19, 2013), the Court of Appeal (First Appellate District) reversed an order prohibiting the named plaintiffs from communicating with the defendant's current employees.
Paragraph 2 of the January 2012 order also implicates the individual plaintiffs’ First Amendment rights. “Orders which restrict or preclude a citizen from speaking in advance are known as ‘prior restraints,’ and are disfavored and presumptively invalid. Gag orders on trial participants [for example] are unconstitutional unless (1) the speech sought to be restrained poses a clear and present danger or serious and imminent threat to a protected competing interest; (2) the order is narrowly tailored to protect that interest; and (3) no less restrictive alternatives are available.” (Hurvitz v. Hoefflin (2000) 84 Cal.App.4th 1232, 1241, fns. omitted.) These principles have been applied to orders that restrict parties’ communications with other parties or witnesses. In Maggi v. Superior Court, the court held that orders restricting those plaintiffs’ counsel’s contacts with witnesses (and potential clients) was an unconstitutional prior restraint unjustified by a discovery violation. (Maggi v. Superior Court (2004) 119 Cal.App.4th 1218, 1223–1226.) “Absent a ‘protected competing interest’ on a level equivalent to the constitutional guarantee of free speech, orders limiting speech are not appropriate sanctions.” (Id. at p. 1226.) In Bernard v. Gulf Oil Co., the United States Court of Appeal for the Fifth Circuit held that an order restricting communications by named plaintiffs and their counsel with potential class members was an unconstitutional prior restraint. (Bernard v. Gulf Oil Co. (1980) 619 F.2d 459, 463, 477.) The Supreme Court affirmed on nonconstitutional grounds, while acknowledging the constitutional concern. (Gulf Oil Co. v. Bernard (1981) 452 U.S. 89, 103–104 [“[a]lthough we do not decide what standards are mandated by the First Amendment in this kind of case, we do observe that the order involved serious restraints on expression”]; see also Parris v. Superior Court (2003) 109 Cal.App.4th 285, 290 [precertification communication with potential class members is constitutionally protected speech].) These free speech concerns support the conclusion that rule 2-100 must not be construed in a manner that will unduly interfere with the right of parties to communicate with one another absent compelling evidence of abuse, which we do not find present here.
Slip op. at 29-30 (footnote omitted) (emphasis added).
The Gulf Oil case is an important one in this area of practice but hasn't been cited all that often by California's appellate courts.
We are left with the weak notion of “comity” as requiring a court to pay respectful attention to the decision of another judge in a materially identical case, but no more than that even if it is a judge of the same court or a judge of a different court within the same judiciary. We emphasize, however, the qualification in “materially identical.” Even two class actions involving the same class may differ materially, for example in the suitability of the class representative or the adequacy of class counsel, and where they do the judge in the second, or third, or nth class action is on his own. This is not such a case; nevertheless the district judge gave plausible reasons for her disagreement with the judges in the two previous Cook County dental cases. Can more be required? The defendants’ claim that she was bound by the decisions of the other judges just because those decisions preceded and were contrary to her decision has no basis in law and flouts the principle that a district court decision does not have precedential effect. Camreta v. Greene, 131 S. Ct. 2020, 2033 n. 7 (2011); Wirtz v. City of South Bend, 669 F.3d 860, 862-63 (7th Cir. 2012). The defendants would have such decisions treated not as mere precedents but as super-precedents that no court lacking appellate authority could question.
The district judge’s grant of class certification is therefore affirmed.
Slip op. at 6, 7, 8-9 (emphasis added).
Seventh Circuit holds you can pick off the class reps: Damasco v. Clearwire Corp.
In August, I reported on a new Ninth Circuit opinion holding that a defendant may not defeat a class action by "picking off" the class representatives. Pitts v. Terrible Herbst, Inc., 653 F.3d 1081 (9th Cir. 2011).
A simple solution to the buy-off problem that Damasco identifies is available, and it does not require us to forge a new rule that runs afoul of Article III: Class-action plaintiffs can move to certify the class at the same time that they file their complaint. The pendency of that motion protects a putative class from attempts to buy off the named plaintiffs. See Primax, 324 F.3d at 546-47.
Slip op. at 9 (emphasis added).
Damasco argues that this solution would provoke plaintiffs to move for certification prematurely, before they have fully developed or discovered the facts necessary to obtain certification. See 5 MOORE’S FEDERAL PRACTICE § 23.64[b], at 350 (3d ed. 2011). But this objection is unpersuasive. If the parties have yet to fully develop the facts needed for certification, then they can also ask the district court to delay its ruling to provide time for additional discovery or investigation.
Id. (emphasis added). In other words, for cases within the jurisdictional bounds of the Seventh Circuit, it will be necessary to file the complaint, the class certification motion, and a motion to delay the ruling on that motion -- all at the same time -- or risk getting involuntarily "picked off."
Oregon Supreme Court affirms consumer fraud class action judgment: Strawn v. Farmers Ins. Co.
In another decision of interest from May, the Oregon Supreme Court affirmed a judgment for compensatory damages (but reversed the punitive damages award) following a jury verdict in a common-law consumer fraud class action. Strawn v. Farmers Ins. Co., ___ P.3d ___, 2011 WL 1886283 (Or. May 19, 2011).
The opinion's discussion of classwide reliance in a common-law fraud case is of particular interest.
New opinion addresses class counsel conflicts of interest: Kullar v. Foot Locker Retail, Inc.
In Kullar v. Foot Locker Retail, Inc., ___ Cal.App.4th ___ (Jan. 18, 2011), the Court of Appeal (First Appelate District, Division Three) addressed conflict of interest issues arising in the context of a class action settlement with objectors. Both The Complex Litigator and the Bailey Class Action Daily have more detailed posts on the opinion.
On Friday, September 24, 2010, U.S. Supreme Court Justice Antonin Scalia entered an order staying enforcement of a $240 million judgment entered in Louisiana state court in a class action against the tobacco industry. The order states that the Supreme Court is likely to grant the anticipated petition for a writ of certiorari to review the defendants' federal due process arguments, which appear to attack many aspects of class procedure. Philip Morris USA Inc. et al. v. Scott, no. 10A273. See this post at SCOTUSblog for a more detailed discussion of the order. SCOTUSblog also has links to the stay application (a large file), the opposition, and the reply.
A month ago today, the Third Circuit granted en banc rehearing in Sullivan v. DB Investments, Inc., 613 F.3d 134 (3d Cir. 2010), the class action settlement case discussed in this blog post. See Sullivan v. DB Investments, Inc., ___ F.3d ___, 2010 WL 3374167 (3rd Cir. Aug 27, 2010) (granting rehearing and vacating the panel opinion). Sullivan is an antitrust class action for price-fixing in the diamond industry.
In Wal-Mart Stores, Inc. v. Dukes, no. 10-277, the response to the cert. petition will be due on October 25, 2010, according to the docket. Both sides have submitted consents to the filing of amicus briefs, and three amicus briefs supporting Wal-Mart have been filed so far.
About three weeks ago, the Court of Appeal (Sixth Appellate District) published a new opinion called Fireside Bank Cases, ___ Cal.App.4th ___ (Jul. 28, 2010; pub. ord. Aug. 25, 2010). You may remember the Supreme Court's opinion in this same case, from April 2007, addressing the rule against one-way intervention in class action litigation. Fireside Bank v. Superior Court (Gonzalez), 40 Cal.4th 1069 (2007). The case has continued to wend its way through the lower courts, and the latest opinion addresses another fascinating procedural topic: claim preclusion.
The original named plaintiff took out a car loan from Fireside Bank and later defaulted. Fireside repossessed her vehicle, then filed suit against her for the deficiency. She filed a class action cross-complaint alleging that Fireside's redemption notice violated the Rees-Levering Motor Vehicle Sales and Finance Act (Civ. Code §§ 2981–2984.4) by misstating the amount necessary to cure. According to the cross-complaint, Fireside had a uniform practice of seeking and obtaining improper deficiency judgments against borrowers. For this wrongful conduct, the cross-complaint sought classwide UCL restitution of all sums Fireside had collected on those deficiency judgments. Slip op. at 1-2, 8.
The plaintiff then moved both for judgment on the pleadings and class certification. The trial court granted both motions simultaneously, ruling on the merits question before notice to the class. This led the Supreme Court to reverse the judgment, citing the one-way intervention rule. Id. at 2-3.
In December 2007, after remand to the trial court (and apparently after class notice), Fireside Bank moved to strike all allegations from the cross-complaint (as well as similar allegations in a second cross-action filed while the original case was pending and later coordinated with it, but in which class certification had not yet been granted) "insofar as they [sought] to overturn or bar Fireside from enforcing deficiency judgments it has previously obtained." Id. at 3-4. Fireside argued that those judgments operated as res judicata, barring the class claims (although not the named plaintiffs' claims, which did not attack any final judgment because none had yet been entered) to the extent they sought to undo the judgments' effects. Id. at 4.
The trial court granted this motion and (in the original case) entered judgment dismissing the claims of all class members against whom a deficiency judgment had been entered (referred to in the opinion as "judgment debtors"). The plaintiffs appealed, and the Court of Appeal affirmed. Id. at 4, 6.
the issue was joined over one question: whether the judgment-debtor class members were entitled to relief en masse on the theory that the UCL rendered the judgments essentially irrelevant. Their argument—which is also their central argument on appeal—proceeds as follows: (1) The UCL empowers trial courts to “make such orders or judgments . . . as may be necessary to prevent the use or employment by any person of any practice which constitutes unfair competition . . . or as may be necessary to restore to any person in interest any money or property, real or personal, which may have been acquired by means of such unfair competition.” (Bus. & Prof. Code, § 17203.) (2) Fireside secured the judgments in question by means of unfair competition, i.e., violations of the Rees-Levering Act. (3) Any sums collected on the judgments were therefore also the products of unfair competition. (4) Therefore the court has the power to restore such sums to plaintiffs despite the judgments in Fireside’s favor, and to make any orders needed to accomplish that result.
We find even less cause to suppose that the Legislature intended to free UCL litigants of the constraints ordinarily imposed on civil plaintiffs by the law of judgments. Cross-complainants have pointed to nothing in the legislative history that suggests such an idea was even remotely present in the legislative mind. Giving a prior judgment its normal effect in a UCL action does not “imply” an “exception” to the act or fashion a “safe harbor” from it. It simply recognizes a defense that is available to every civil defendant when the facts support it. We therefore reject cross-complainants’ contention that the court below was empowered by the UCL to grant class-wide relief to judgment debtors without a factual showing of grounds to avoid the judgments against them. Since no other basis for relief on their behalf was ever suggested, the court did not err by concluding that the UCL afforded no basis for the class-wide affirmative relief they sought in this class action.
The Court of Appeal went on to explain that "[t]he real foundation for the order disposing of [the judgment debtors'] claims appears to have been the absence of any demonstrated basis for their class-wide adjudication," and that nothing in the order would prevent those class members from challenging the judgments in later, individual actions, in which the elements of res judicata could be litigated on the merits. Id. at 11-12. "All that is known is that Fireside obtained judgments against the affected class members, and that these judgments may furnish a defense to any claims those members might bring against Fireside. .... [T]he dismissal of the judgment debtors’ claims did not reflect any disposition of their individual rights, if any, to avoid the effects of the judgments." Id. (emphasis in original).
"Defending the Class Action Trial"
Class action trials. It is probably safe to say that more lawyers have seen a double rainbow or climbed Mt. Everest than have tried a class action case. Most practice guides offer little or no commentary on the unique trial issues that can arise in class cases.
The article goes on to discuss (from a defense perspective, as the title promises) some of those issues, including "how to explain the class action to the jury," "the absence of a strong plaintiff representative at trial," and "the predominance of live witnesses on the defense side." For plaintiffs' attorneys, the lesson is to be sure you make a strong showing of aggrieved plaintiff-side witnesses.
New opinion addresses responsibility of class counsel post-judgment: Barboza v. West Coast Digital GSM, Inc.
What are the obligations of class counsel when he learns that the defendant in the class action he is prosecuting has ceased operations, sold its assets to a third party, and intends to file for bankruptcy?
In the case before us, counsel obtained a stipulated default and a default judgment that included more than $4 million in aggregate damages for the class, plus more than $1 million in prejudgment interest. So far, so good. But counsel then asserted that his job would be completed once his motion for attorney fees was heard, i.e., that he had no obligation to enforce the judgment on behalf of the class. The trial court disagreed. It ruled that “by assuming the responsibility of pursuing claims on behalf of the class, class counsel assumed the obligation to pursue it until the end (i.e., enforcement of the judgment) and not just until judgment.” Based upon the principles guiding class actions, we agree that class counsel’s obligations to the class do not end with the entry of judgment, and hold that class counsel’s obligations continue until all class issues are resolved, which may include enforcement of the judgment.
Id. Or perhaps the Court meant to imply that female class counsel would not abandon the class in such a manner. That must be it.
[U]nlike situations in which the litigant has retained an attorney to conduct litigation, where the litigant and the attorney agree upon the scope of the engagement, and their rights and duties are governed by their agreement, in class actions, where there is no agreement with absentee class members to define the scope of the engagement, class counsel must represent all of the absent class members’ interests throughout the litigation to the extent there are class issues, and it is the duty of the trial court to ensure at every stage of the proceeding that counsel is adequately representing those interests.
Slip op. at 7-8 (emphasis added). Because "it seems unlikely (based upon counsel’s own assertions) that there are sufficient assets to pay each class member what is owed, plus attorney fees, there remains an important class issue — i.e., how the recoverable assets (if any) are to be distributed. In short, class counsel’s job — to represent the class in resolving class issues — is not yet done." Id. at 8.
But suppose class counsel has no experience in attempting to enforce judgments against defendants who have sold all their assets, ceased operations, and intend to declare bankruptcy? The Court held that "nothing prevents class counsel from associating in counsel with that expertise, and the cost of that association can be paid by the class from any recovery achieved." Id. I wonder, though, how likely it is that a specialist with expertise in enforcing judgments would be interested in becoming involved in this case on a contingency-fee basis. From the opinion, it appears that no common fund from which fees could be paid has been created, nor is one likely to be. It is unclear whether the panel expects class counsel to pay collections counsel by the hour.
[I]f, after diligent inquiry, class counsel determines there are no recoverable assets, counsel may present such findings to the trial court, and the trial court, as guardian of the rights of the absent class members, may determine whether counsel should be relieved of any further obligations to the class.
Id. at 8-9. It will be interesting to see what eventually happens in this case and whether any money is ever collected. There may also be additional appellate activity. According to the docket, a rehearing petition was filed last Friday, December 4, and denied on Monday, December 7.
Last Thursday, November 19, 2009, was a busy day for our state appellate courts. Thirteen published opinions (and one modification of a published opinion) were issued on that date. I've been following the opinions for a long time, and that's a huge number for a single day. It probably had something to do with the fact that the preceding day (Wednesday, Nov. 18) was a court closure day. I have a feeling that a lot of our appellate justices and research attorneys (not to mention our trial court judges) aren't exactly taking those days off.
Three of the Nov. 19th opinions, listed below, involve interesting UCL or class action issues. I will have more on these cases after the holiday. Happy Thanksgiving!
"Class Notice in the Electronic Age"
The November 2009 isse of California Lawyer has this article by Matt C. Bailey.
"Supreme Court Appointee Sotomayor’s Judicial Record in Class Actions"
UPDATE: Legal Blog Watch has a post on Judge Sotomayor's rulings in the Visa Check and IPO cases.
In Chalk v. T-Mobile USA, Inc., 560 F.3d 1087 (Mar. 27, 2009), the court struck down an arbitration clause with a class action ban as unconscionable under Oregon law.
In Hunt v. Imperial Merchant Servs., Inc., 560 F.3d 1137 (Mar. 31, 2009), the court held, apparently for the first time, that "a district court has the discretion to require a class action defendant to pay the costs of class notification when the court has already determined that the defendant is liable on the merits." Slip op. at 3885.
In Rodriguez v. West Publishing Corp., 563 F.3d 948 (Apr. 23, 2009), the court affirmed an order granting final approval of a class action settlement, although it disapproved of certain "ex ante incentive agreements" between some (but not all) of the class representatives and class counsel.
We are still waiting for the Ninth Circuit to hand down its en banc opinion in Dukes v. Wal-Mart, Inc., nos. 04-16688 & 04-16720, which was argued on March 24, 2009.
In Freedom Communications, Inc. v. Superior Court, ___ Cal.App.4th ___ (Sept. 30, 2008), the Court of Appeal reversed an order prohibiting the the Orange County Register from reporting on the trial of a wage and hour class action in which the Register is the defendant.
In In re: Nortel Networks Corp. Securities Litig., ___ F.3d ___ (2d Cir. Aug. 19, 2008), the Second Circuit affirmed an attorneys' fees award in a securities class action settlement.

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