CLASSIFIED: Carlton Fields' Class Action Blog

Plaintiffs have filed a lawsuit against Delta Airlines and AirTran, alleging that the airlines colluded to charge customers a fee for checking bags.  The plaintiffs allege that AirTran officials used a quarterly conference call with industry analysts in October 2008 as an invitation to collude on the imposition of a first bag fee.  The plaintiffs hope that the lawsuit will be certified as a class action. 

 

Plaintiffs have filed lawsuits against Bank of America and Wells Fargo, claiming that the companies did not honor agreements to make their temporary loan modifications permanent through the U.S. Treasury’s Home Affordable Modification Program.  Plaintiffs hope to achieve class action status for their suits.

Class arbitration is a hot area these days.  Can a plaintiff who failed to seek a class action in the initial complaint seize the golden apple and seek class arbitration after the defendant moves to compel arbitration of the individual claim?  Read this case and find out.

In Heng et al. v. Donald et al., 2010 WL 497347 (M.D.Ga.), Plaintiffs sought class certification on behalf of "all past and present inmates at the Valdosta State Prison and at other Georgia prisons who have been subjected to or may be subjected to excessive force, summary punishment, or premeditated violence by being beaten while restrained by CERT Team Officers at Valdosta State Prison and by CERT Team Officers at other Georgia prisons in violation of the United States Constitutions, laws and treaties, and the Georgia Constitution and laws."  The Court, adopting the Magistrate Judge's recommendation, agreed that Plaintiffs did not meet the commonality and typicality requirements of Rule 23(a).

A Northeastern professor aims to lead a class action lawsuit against Toyota related to Toyota’s recall of millions of vehicles for unintended acceleration.  The Northeastern law professor, P. Tim Howard, is leading a consortium of 22 law firms in 16 states.  The heart of the case concerns the fact that Toyota owners have seen the value of their vehicles plummet and have lost the use of their vehicles for significant periods of time.

 

A Fort Worth federal judge has dismissed a class action lawsuit against American Airlines.  The plaintiffs sought damages for American’s action of allegedly stranding thousands of passengers in December 2006.  The judge agreed with American’s motion to dismiss because the plaintiffs did not file suit within the statute of limitations. 

In a matter of first impression, the Court of Appeals of Georgia held, in Fuller v. Heartwood 11, LLC et al., that the Georgia class action statute places a shared obligation upon the litigants and the court to ensure that the question of class certification is timely resolved.  The Court further held that the trial court's failure to engage in analysis to determine whether property owners' delay in seeking certification resulted in actual prejudice to lien holders, or to make factual findings before denying owners' motion for class certification, required remand. 

Staples, Inc. will pay $42 million to settle a dozen class action lawsuits where the plaintiffs claimed that the company misclassified its assistant store managers as exempt from overtime to avoid paying extra wages.  The settlement resolves claims dating back to 2002.

A group of seventeen major networks and production studios, as well as talent agencies, settled a class action lawsuit filed against them by television writers alleging that the companies discriminated against the writers due to their age.

An Xbox user filed a class action lawsuit against Microsoft alleging that Microsoft wrongfully failed to provide the goods and services he paid for with "Microsoft Points," which allow Xbox users to purchase games and other downloadable media from the Xbox Live Marketplace.

Residents living near fraternities at University of California at Berkeley filed a class action lawsuit seeking to require the fraternities to have live-in adult supervisors to curb alleged alcohol abuse, littering and noise violations.

A class action lawsuit has been filed by AT&T customers who use iPhones, Blackberrys, and Smart Phones to access the internet.  The plaintiffs claim that they are being taxed illegally and should receive millions of dollars in refunds.  The federal Internet Tax Freedom Act prevents state and local governments from imposing taxes on those who use their phones to surf the web.  The plaintiffs allege that thousands of Floridians have been improperly billed.

 

Aurora Health Care, a Wisconsin healthcare provider, has been sued in a class action case by several plaintiffs who claim that the company violated their privacy when it disclosed their personal medical information in bankruptcy court.  The plaintiffs are seeking $25,000 in damages for each person whose private information was revealed.

In Pendergast v. Sprint Nextel Corporation, No. 09-10612, 2010 WL 6745 (11th Cir. Jan. 4, 2010), the Eleventh Circuit had before it the issue of whether the class action waiver in the plaintiff’s wireless service agreement is procedurally and substantively unconscionable or void for other reasons. Finding Florida law unclear on the issue, the Court certified the following questions to the Florida Supreme Court:

(1) Must Florida courts evaluate both procedural and substantive unconscionability simultaneously in a balancing or sliding scale approach, or may courts consider either procedural or substantive unconscion-ability independently and conclude their analysis if either one is lacking?

(2) Is the class action waiver provision in Plaintiff's contract with Sprint procedurally unconscionable under Florida law?

(3) Is the class action waiver provision in Plaintiff's contract with Sprint substantively unconscionable under Florida law?

(4) Is the class action waiver provision in Plaintiff's contract with Sprint void under Florida law for any other reason?

In Banner Supply Co. v. Harrell, 2009 WL 4927912 (Fla. 3d DCA Dec. 23, 2009), Florida's Third District Court of Appeal affirmed the trial court's ruling denying the defendant's motion to abate the proceedings pursuant to Chapter 558, Florida Statutes, which relates to litigation involving construction defects.  The plaintiffs initially filed a class action lawsuit against the defendant for personal injury allegedly sustained due to alleged defective drywall imported from China.  At the time they filed their initial complaint, the plaintiffs provided a Chapter 558 notice, but the personal injury claims in that complaint were not subject to Chapter 558.  The plaintiffs later filed an amended complaint asserting a claim for property damage, and the defendant filed a motion to abate, arguing that the plaintiffs had not complied with the statutory requirements of notice and an opportunity to inspect under Chapter 558.  The court held that abatement would have been futile because the required sixty days set forth in Chapter 558 had already passed by the time the hearing on the defendant's motion to abate was heard.  The court did not reach the issue of whether Chapter 558 applied to the case.

In Lowery v. Alabama Power Company, 483 F.3d 1184 (11th Cir. 2007), the Eleventh Circuit interpreted the $5 million amount in controversy requirement in the Class Action Fairness Act, affirming the district court's decision to grant a motion for remand filed by a class of homeowners alleging that several companies caused personal injury and property damage by discharging pollutants into the air and groundwater.  After being added as a defendant to the case in an amended complaint, one company attempted to remove the case to federal court, relying on allegations in the amended complaint concerning the number of plaintiffs and the type of harm they suffered, as well as specific damages allegations in a prior complaint.  The company estimated that each of the 400 plaintiffs needed to seek only $12,500 to reach the $5 million amount in controversy and argued that $12,500 was a low estimate for the amount of damages claimed by each class member, in light of the nature of the claimed bodily injury and property damage.  The court rejected this calculation, reasoning that "we fail to see how we can justify a conclusion that the per-plaintiff recovery will exceed even so low a total" and that to reach such a conclusion the court would have to "engage in impermissible speculation."  The court concluded that the amended complaint alone--which did not allege a specific amount of damages--could not form the basis for removal.

A recent class action decision from the Southern District of Ohio illustrates the difficulty now facing post-Lowery defendants.  Following the approach suggested in Lowery, the defendants in Curry v. Applebee's International, Inc., 2009 WL 4975274 (S.D. Ohio Nov. 17, 2009)--faced with a complaint that did not specifically allege the amount of damages sought by the plaintiff class of purchasers of menu items whose nutritional information was allegedly misrepresented--dutifully waited to receive evidence regarding the amount of damages claimed before attempting to remove the case.  Upon receipt of interrogatory responses indicating that the plaintiff class was seeking the full value of the menu items purchased at an average value of $7 per item, the defendants attempted to remove the case.  The court held that the defendants should have removed the case sooner, upon receipt of a settlement demand requesting compensation in the amount of 5% of the items sold at an average price of $7 per item, because the settlement demand should have indicated to the defendants that the plaintiff class was seeking recovery based upon the value of the menu items purchased.  In a footnote, the court went one step farther, stating that because defendants had knowledge of their own sales figures related to the menu items at issue, the case may have been removable as soon as the complaint was filed.

In Hess Corp. v. Grillasca, No. 2D09-1338, 2009 WL 4931668 (Fla. 2d DCA Dec. 23, 2009), customers of Hess Corporation sued the company for holds allegedly placed on funds in their bank accounts in certain circumstances when using debit cards to pay for gas. The trial court was persuaded that the plaintiffs satisfied the requirements for class certification, but Florida’s Second District Court of Appeal was not. Read on to learn more about the arguments that carried the day with the appellate court.

In Kelecseny v. Chevron, U.S.A., Inc., No. 08-61294-civ, 2009 WL 4262603 (S.D. Fla. Nov. 25, 2009), the plaintiff sought to certify a damages class and an injunctive relief class based on alleged damages resulting from the use of gasoline containing ethanol (so-called “E10”) in his boat.

In his damages class, the plaintiff relied on a market share theory of negligence, under which all gasoline makers who sell E10 in the state of Florida would be liable. The court determined that such a class fails almost all the Rule 23 factors, beginning with a finding that the class itself is not adequately ascertainable because the court would have to undertake individualized inquires as to whether the class members even used E10. Numerosity was not met for essentially the same reason.

On the typicality element, the court noted that it found no case in which market share liability had been applied in a class action. Applying that theory to an entire state—as the plaintiff sought here—was “untenable,” given that use of market share liability requires using the narrowest possible geographic market. The court also found problems with the predominance element based on individualized issues related to causation, comparative fault, and using the market share liability theory.

The plaintiff’s injunctive relief class, which sought that the gasoline makers be required to post warnings regarding the use of E10 in boats, fared no better. In reviewing Eleventh Circuit precedent, the court found it “impossible” for a class ever to be certified under a failure to warn scenario. According to the court, no plaintiff could have standing because, by the time of certification, he would necessarily be aware of the problem.

In an unpublished opinion, the Eleventh Circuit refused to disturb the decision of the district court (N.D. Ga.) denying the plaintiffs’ motion to certify breach of contract claims and claims under the Migrant and Seasonable Agricultural Workers Protection Act. According to the Court, the lower court did not abuse its discretion in determining that individualized proof would be necessary as to each individual’s earnings and the time worked, thereby making certification improper under Rule 23(b)(3).  The district court did certify a collective action under the Fair Labor Standards Act, though that decision was not the subject of this appeal.  Luna v. Del Monte Fresh Produce (Se.), No. 09-12464 (11th Cir. Dec. 3, 2009).

Two units of AT&T, Inc. have been sued in class action cases where the plaintiffs allege that they were misclassified as exempt from hourly wage laws and did not receive the overtime pay they were due.  One suit was filed against BellSouth Communications, Inc. in U.S. District Court in Atlanta.  A similar suit was filed in federal court in San Francisco.  Both suits seek $500 million in damages. 

 

Three Massachusetts residents have filed a class action lawsuit against CVS.  The plaintiffs accuse the drugstore chain of falsely claiming that its AirShield effervescent dietary supplement could prevent colds.

Courts and commentators have long been concerned with holdout problems in the law, including a holdout problem in class action litigation known as objector “blackmail.” Brian Fitzpatrick, Assistant Professor of Law at Vanderbilt University Law School, recently published an article entitled “The End of Objector Blackmail?” focusing on class action objectors who try to blackmail class counsel by holding up settlements on appeal.

The United States Government has agreed to pay $3.4 billion to settle the Indian Trust Fund lawsuit.  The suit arose from a system dating back to 1887 when Congress divided tribal lands into parcels.  The parcels were assigned to individual American Indians while the remaining parcels were sold.  The Interior Department manages 56 million acres of Indian Trust land.  The Government handles leases on the land and distributes revenue to the American Indians.  In 2009, the Government collected $298 million for 384,000 accounts.  In the class action suit, the plaintiffs accused the Government of mismanaging the funds.  The plaintiffs allege that they are owed far more than what they had been paid.  The settlement of the Indian Trust Fund lawsuit represents an end to one of the largest and most complicated class action lawsuits in U.S. history.

 

A lawsuit against AT&T has been certified as a class action.  The plaintiffs allege that the company could not match the speeds promised in its DSL campaign. 

 

A class action lawsuit has been filed against Denver-based Qwest for failing to live up to its “Price for Life” guarantee on high speed internet service.  The plaintiff alleges that Qwest increased the cost of his broadband service even though he signed up for the “Price for Life” promotion.

Three retirees have filed a lawsuit seeking class action status against Verizon.  The plaintiffs accuse Verizon of improperly transferring retirees out of Verizon’s pension plan when the companies spun off yellow pages publisher Idearc Inc. in 2006.  Idearc has since gone into bankruptcy, and the retirees state that their benefits have been cut.

 

A class action lawsuit has been filed against Toyota to correct sudden unintended acceleration in Toyota and Lexus vehicles.  Toyota has laid the blame on its floor mats and launched a recall of four million vehicles.

Class action lawsuits stemming from banks’ overdraft practices have sprung up across the United States.  Complaints against eight banks—including Bank of America, Citibank, JP Morgan Chase, Wachovia, and Wells Fargo—are being consolidated into a single action in the U.S. District Court for the Southern District of Florida.  The plaintiffs allege that banks are signing up customers for overdraft protection without their knowledge, realigning transactions to maximize fees, and giving debit card users no warnings when they are overdrawn. 

 

Seven Philadelphia area health systems were sued in a class action case by employees who allege that they were forced to work during their lunch breaks and were not compensated for their work.   Federal and state law requires that hourly workers be paid for all time they are working.

Marsh & McLennan, one of the world’s largest insurance brokers, has agreed to pay $435 million to settle class action shareholder lawsuits.  The plaintiffs have alleged bid-rigging and price-fixing by the company’s insurance brokerage unit.   Marsh & McLennan has not admitted wrongdoing. 

 

Three shareholders have filed lawsuits against Burlington Northern Sante Fe Corporation after the company announced that it had agreed to be acquired by billionaire investor Warren Buffet.  The plaintiffs, who seek class action status for their lawsuits, allege that Burlington’s management shortchanged stockholders, rushed into a deal for their own benefit, and failed to get the highest price.