CLASSIFIED: Carlton Fields' Class Action Blog

A federal judge is stepping in to end the stalemate in two class action lawsuits in state court against Louisiana Citizens Property Insurance Corp.  The Magistrate Judge invited the Insurance Commissioner and the attorneys to convene in federal court.  Because neither court has primacy over the other and because the rival cases have spawned appeals, no money has been distributed to policy holders from claims arising out of the 2005 hurricanes.

 

A California homeowner has filed a class action lawsuit against the Pulte Home Corporation, alleging that Pulte engaged in a fraudulent scheme to prop up sales and home prices through control of the sales process.  The plaintiff alleges that Pulte’s business model provides one-stop-shopping for home buyers and that the company controls sales, financing, ancillary settlement services, and appraisals.  The plaintiff alleges that Pulte lured unqualified buyers by promising them large discounts.

The law firm Coughlin Stoia Geller Rudman & Robbins LLP filed a putative securities class action on behalf of purchasers of Advanta Corp. Class A and/or Class B common stock between October 31, 2006 and November 27, 2007, alleging that Advanta issued materially false and misleading statements by failing to disclose the impact of the economic environment and credit trends on its business and failed to adequately and timely record losses for its impaired loans and customer delinquencies.

Union-based pension funds that filed a putative class action against Freddie Mac are challenging in court the company's position that "secrecy agreements" prohibit former employees from discussing with them the allegations that Freddie Mac executives defrauded investors by concealing the company's exposure to high-risk mortgages, its losses, and its inadequate capital position. Under the agreements, former employees are permitted to answer questions from government officials related to criminal cases or regulatory proceedings. But, barring a court order, the former employees are prohibited from talking with anyone involved in a civil lawsuit against the company.

This is a follow up to my June 9, 2009 post about climate change class actions. In that post, I discussed a study by Zurich-based reinsurer Swiss Re warning that climate change class actions "could be a significant issue" in the next couple of years and comparing climate change class actions to asbestos litigation. Swiss Re's predictions may be right.

On Monday, bank customers filed a putative class action in the Southern District of Florida against Bank of America, Wachovia, U.S. Bank, JPMorgan Chase and Citibank seeking restitution as well as actual and punitive damages resulting from the banks' overdraft fee policies.  Lead plaintiffs' counsel Bruce Rogow commented in a press release that "[c]harging a $35 overdraft fee when a college student uses her debit card to buy a cup of coffee is unconscionable."

After an appellate decision finding that passenger fees charged by the Bridgeport Port Authority to ferry passengers since 1993 were unconstitutional, a putative class action lawsuit has been filed against the Bridgeport Port Authority by passengers seeking a refund of the passenger fees they paid.

Aerosmith will play a concert tonight in Hawaii to settle class action claims filed by disappointed fans who sued Aerosmith after it cancelled a 2007 concert in Hawaii.  The fans alleged that the concert cancellation cost them between $500,000 and $3 million in travel and other expenses.

A class action lawsuit claiming $1 billion in damages has been filed against SoHo nightclub Greenhouse.  The lawsuit alleges that the club denied access to people who were invited to the club to celebrate author Teri Woods' new book because of their race.

Some members of the Court felt compelled in DTD Enterprises, Inc. v. Wells, No. 08-1407, 2009 WL 3255157 (Oct. 13, 2009), to note that the New Jersey court’s imposition of class notice costs on the defendant may result in a denial of due process where the determination was made entirely on the court’s finding that the plaintiff could not afford the cost, but the defendant could. The Court was also concerned that no consideration was given to the underlying merit of the suit. Nonetheless, the Court denied certiorari on the grounds that the order is interlocutory and the petitioner had filed for bankruptcy.

In In re HealthSouth Corporation Securities Litigation, Nos. CV-03-BE-1500-S, CV-03-BE-1501-S, CV-03-BE-1502-S, 2009 WL 3152226 (N.D. Ala. Sept. 30, 2009), the Northern District of Alabama certified a class of HealthSouth bond purchasers, finding that the bondholders' claims under Sections 11 and 15 of the Securities Act and Sections 10(b) and 20(a) of the Exchange Act represented a "prototypical securities class action," although the court excluded from the class definition for the Section 11 claim bondholders whose purchases were made before the registration statement at issue was filed.  The court rejected the defendants' argument that the bondholders were not entitled to a presumption of reliance and therefore could not satisfy the predominance requirement of Rule 23(b)(3). 

No. The Private Securities Litigation Fraud Act, which provides for the stay of all discovery and other proceedings during the pendency of a motion to dismiss, does not apply to actions in which plaintiffs allege only state law claims.

No. In Nicholas v. DWS Investments Distributors, Inc., No. 6:09-cv-565-Orl-31DAB, 2009 WL 1444419 (M.D. Fla. May 21, 2009), the plaintiffs attempted to bring a class action based on the ground that a defendant investment distributor repeatedly paid accounts of deceased persons to those not entitled to payment. The court ruled that despite the plaintiffs’ contention as to why they were entitled to class relief, the plaintiffs failed to plead facts sufficient to comply with the requirements of Rule 23. The court dismissed the plaintiffs’ class action claim on those grounds, but granted plaintiffs leave to amend.

In Crawley v. Paskert-Johnson Co., No. 8:07-cv-1789-T-23TGW, 2008 WL 4793650 (M.D. Fla. Nov. 3, 2008), the Court ruled that pro se plaintiffs cannot adequately represent a class.

Yahoo has reached a settlement in the pay-per-click class action lawsuit.  In that case, the plaintiffs allege that they contracted for targeted ad placement through two products and that Yahoo breached its contract with customers by allowing Yahoo ads to be displayed in spyware, domain name parking sites, and pop ups.  The claims included breach of contract, unjust enrichment, misrepresentation, civil conspiracy, and unfair business practices.  Yahoo has agreed to implement a new filtering option for ads and to make modifications to the way it handles disclosures and click fraud investigations.

 

Zipcar, Inc., a self-service car rental company that rents cars by the hour, has been sued for charging excessive fees to consumers.  The plaintiffs seek to make the case a class action proceeding.  The lawsuit was filed in federal court in Boston and alleges that there were a number of excessive fees charged to consumers including phone fees, late fees, and inactivity fees.

 

A federal judge has thrown out a class action lawsuit against Disney brought by three disabled persons who were upset they could not ride their personal segways in the Walt Disney World theme parks.  The judge also rejected a proposed settlement which would have permitted Disney to continue banning the two wheeled segways in exchange for deploying four-wheeled scooters for disabled guests to use.  The settlement also included paying the plaintiffs’ legal fees, and giving the plaintiffs $4,000 each towards future Disney vacations. 

Supreme Court Indicates that Requiring Defendant to Pay Costs of Class Notification Without a Hearing is a Denial of Due Process – In DTD Enterprises, Inc. v. Wells, No. 08-1407, 2009 WL 3255157 (U.S. Oct. 13, 2009), the United States Supreme Court denied a petition for writ of certiorari filed by DTD Enterprises, Inc., a commercial dating-referral service. DTD initially filed a contract action against one of its customers, Janice Wells, alleging that Wells refused to make certain payments due under her contract with DTD. Wells, in turn, brought a class action against DTD. The trial court certified the class and ordered DTD to bear all the costs of class notification because Wells could not afford to pay those costs herself.

Justice Kennedy, joined by Chief Justice Roberts and Justice Sotomayor, wrote a statement regarding the denial of certiorari. In the statement, Justice Kennedy acknowledged that the denial of certiorari was appropriate because (1) the petition was interlocutory, given that the New Jersey appellate courts had denied DTD leave to appeal the trial court’s actions, and (2) the action fell within the scope of an automatic stay entered when DTD filed for bankruptcy.

Are "preliminary" motions for class certification allowed?  According to the the Middle District of George, the answer is "no".  In Jones v. Bank of America Corporation, --- F.3d ---, 2009 WL 3161696 (M.D.Ga), the Court held that such a "preliminary" motion is procedurally improper and that the statute upon which Plaintiffs relied upon in their "preliminary" motion for class certification did "not even contain the word 'preliminary.'"

Customers have sued AT&T and Apple over a glitch in the iPhone.  The customers allege that they were led to believe that the iPhone had multimedia messaging services which included the ability to send and receive pictures.  This service only became available at the end of September 2009 when many customers believed that the service would be available much earlier.  The customers have filed suit in nine states.  The suits seek to become class action cases against Apple and AT&T. 

Residents of St. Petersburg, Florida filed a class action lawsuit against Raytheon Corporation alleging that the company knowingly polluted the Azalea neighborhood with industrial waste, lowering the residents' property values.  The complaint also alleges that Raytheon engaged in a concerted effort to misrepresent and withhold information regarding the extent of the contamination.  Judge Covington of the United States District Court for the Middle District of Florida granted the residents' motion for class certification this week, and according to news sources over 1,000 residents are eligible to join the class.  Earlier this year, Raytheon predicted it would cost over $20 million just to clean up the plume of contaminants in the water beneath the neighborhood.