Source: https://bruteforcelawyer.com/category/cplr/cplr-%C2%A7-901/
Timestamp: 2019-04-20 13:10:42+00:00

Document:
Contrary to the plaintiffs' contentions, the Supreme Court properly denied their motion, inter alia, for class action certification. The Supreme Court properly found that the proposed class definition was overbroad (see Klein v Robert's Am. Gourmet Food, Inc., 28 AD3d 63, 71). Furthermore, the plaintiffs failed to establish that questions of law or fact common to the class predominate over any questions affecting only individual members (see CPLR 901[a]; Morrissey v Nextel Partners, Inc., 72 AD3d 209; Solomon v Bell Atl. Corp., 9 AD3d 49, 53; Hazelhurst v Brita Prods. Co., 295 AD2d 240, 241-242; Small v Lorillard Tobacco Co., 252 AD2d 1, 9, affd 94 NY2d 43; Mitchell v Barrios-Paoli, 253 AD2d 281, 291), and that their claims or defenses were typical of those of the class (see CPLR 901[a]; Dimich v Med-Pro, Inc., 34 AD3d 329, 330; Ross v Amrep Corp., 57 AD2d 99, 102-103).
The Civil Procedure & Federal Courts Blog is on top of it. The SCOTUS blog is all over it as well.
I posted about this case a little while ago here and it was in the NYLJ Wrap-Up. I’m sure you’ve been wondering about it. I have.
Procedure & Federal Courts Blog, and get it from them.
This post is a work in progress. There will be additions and commentary as I continue to review the case and receive (or find) additional information.
created or imposed by statute may not be maintained as a class action.
Shady Grove (a Maryland corporation) brought a class action against Allstate (a Illinois corporation) in Federal court suing for interest that is overdue from no-fault claims. The underlying lawsuit involved a New York policy. Those claims were paid, but for the interest. Shady Grove argued that it could get into Federal Court through 28 U.S.C. § 1332(d)(2)(A), which gives the federal courts original jurisdiction in a class action where the amount in controversy is more that five-million dollars and diversity exists, and FRCP 23 allows class certification.
Allstate moved to dismiss, arguing that because interest is a "penalty", CPLR § 901(b) expressly prohibits such a class action2 and that because CPLR § 901(b) is a substantive rule, the Federal Court must apply it. Shady Grove argued that (1) it is a procedural rule and it is in conflict with FRCP 23 (the federal equivalent of CPLR § 901), which contains no identical or similar restriction; (2) because it is a procedural rule, an Erie3 analysis requires that the Federal Court apply its own rule; and (3) it argued that the "unless clause" (see FN 1) of CPLR § 901(b) permits the lawsuit, even if the court finds it to be a substantive rule.
The district court agreed with Allstate and dismissed the action. It found that CPLR § 901(b) is substantive and therefore does not invoke either the Supremacy Clause4 or Erie. Without class certification, Shady Grove was unable to maintain diversity jurisdiction.
At the Second Circuit, Shady Grove added an argument5 (a request really) in its reply brief; that the Court should certify the following question to the New York Court of Appeals: whether the interest provision is a "penalty within the meaning of CPLR § 901(b)." The Second Circuit, upon Allstate's motion, struck that portion of the brief, because it should have been brought up in the initial brief.
The Second Circuit discussed each of Shady Grove's arguments.
The Court first addressed the Erie situation. It found that FRCP 23 does not conflict with CPLR § 901(b); that there is no "direct collision" with § 901. It reasoned that, because FRCP 23 does not determine which actions can or cannot be brought, "it leaves room for the operation of § 901(b)," finding it to be a substantive rule.
But would the application of CPLR § 901(b) "serve the twin aims6 of Erie? The Court answered in the affirmative. Not applying the rule would, according to the Court, encourage plaintiff' to file in the Federal Courts, rather than in New York. And it would allow them to recover in Federal Court, when they could not in New York.
The Court then discussed Shady Grove's argument that under N.Y. Ins. Law § 5106(a)7 the lawsuit can be maintained via class action because 11 NYCRR § 65-3.9(c)8 contemplated class actions in this context, and therefore satisfies the exception clause of CPLR § 901(b). In rejecting this argument, the Court found that § 65-3.9(c) did not specifically authorize9 class actions. "At most,[the] regulation contemplates the recovery of a penalty in a class action."
2. Can state legislatures dictate procedure in the federal courts?
3. Could state-law class actions eventually disappear altogether, as more state legislatures declare them offlimits to the federal courts?
1. This is the unless clause.
Erie Railroad Co. v. Tompkins, 304 U.S. 64 (1938). Under Erie, when a Federal Court sits in diversity jurisdiction, it must apply a states substantive law and the federal procedural law. It's more complicated than it seems. More information can be found on the case and the issue on wikipedia.
5. Shady Grove cited to Sperry v. Crompton Corp., 8 N.Y.3d 204 (Ct. App., 2007) in support of its request for certification.
6. (1) to discourage forum shopping and (2) inequitable administration of the laws.
subject to limitations promulgated by the superintendent in regulations.
action." (emphasis added). See FN 1.
from a competing lender states a claim for fraud (see Wright v Selle, 27 AD3d 1065, 1067-1068 ). The GFE was not a mere statement of future intent (see Watts v Jackson Hewitt Tax Serv., Inc., 579 F Supp 2d 334, 352 [ED NY 2008]), and the issue of material misrepresentation is not subject to summary disposition (see e.g. Brunetti v Musallam, 11 AD3d 280, 281 ).
The motion court should have stricken the class action allegations.
examine each of the tens of thousands of transactions at issue.
would predominate (see Rose v SLM Fin. Corp., 254 FRD 269, 272-73 [WD NC 2008]).
The party seeking class certification bears the burden of establishing the criteria prescribed in CPLR 901(a) (CLC/CFI Liquidating Trust v Bloomingdale's, Inc., 50 AD3d 446, 447 ). This burden must be met by providing an evidentiary basis for class certification (Matros Automated Elec. Const. Corp. v Libman, 37 AD3d 313 ; Nachbaur v American Tr. Ins. Co., 300 AD2d 74, 75 , lv dismissed 99 NY2d 576 , cert den sub nom Moore v American Tr. Ins. Co., 538 US 987 ).
certification statute should be liberally construed (Englade v HarperCollins Publs., 289 AD2d 159 ).
justify the court's exercise of its discretion in certifying the class.
individualized inquiries defeat commonality (see e.g. Batas v Prudential Ins. Co., 37 AD3d 320, 322 ; Gaidon v Guardian Life Ins. Co. Of Am., 2 AD3d 130 ).
"inquiry is limited" (see Bloom v Cunard Line, 76 AD2d 237, 240 ), and such threshold determination is not intended to be a substitute for summary judgment or trial.
P.S. 104, one worked at P.S. 114, and four or five worked at P.S. 198.
carpenters on some of the projects, and as few as one other on the P.S.
carpenters may have regarding their wages on these particular projects.
Looks like the controlling factor here is that there are no union workers.
In April 2008, Justice Cahn granted class certification and found the Yegers to be proper class representatives.
the third quarter of 2003 and ending with the fourth quarter of 2003"
facts (see Hazelhurst v Brita Prods Co., 295 AD2d 240, 242 )[FN1].
done were individual in nature or subject to individual defenses" (Mitchell v Barrios-Paoli, 253 AD2d 281, 291 ).
rather than common ones, predominate (CPLR 901[a]).
plaintiffs' remaining contentions and find them unavailing.

References: § 1332
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