Class Action Defense Strategy Blog : Class Action Lawyer & Attorney : Sheppard Mullin Law Firm : Antitrust, Securities, Wage & Hour, Consumer Fraud

By Paul Seeley

On June 28, 2010, in the unpublished opinion Cellphone Fee Termination Cases, A124038 (June 28, 2010), the Court of Appeal, First District, affirmed the trial court’s approval of a nationwide class action settlement over the objections of several class members. Although it is not published, the Cellphone Fee case provides guidance for litigants seeking to secure approval of class-wide settlements. It also suggests effective litigation strategy that will help class action parties “win” the settlement against asserted objections.
 

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By Suzanna Winslow and Sascha Henry

The Second District of California Court of Appeal recently refused to extend the continuing violations doctrine to causes of action brought under the Unfair Competition Law ("UCL"). The Court of Appeal held that the trial court properly sustained the defendant's demurrer on the ground that the UCL cause of action was barred by the statute of limitations.   
 

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By Robert J. Stumpf, Jr. & Shannon Z. Petersen

On June 4, 2010, the California Court of Appeal issued its first important decision on the scope of California's Perata Mortgage Relief Act, passed into law in 2008 and codified at California Civil Code Sections 2923.5 and 2923.6. See Mabry v. Superior Court (Case No. G042911, June 4, 2010) ---Cal.App.4th---, 2010 WL 2180530. The plaintiffs alleged a class action.
 

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By Daniel L. Brown & Giselle Rivers

On May 27, 2010, the Court of Appeals for the Second Circuit affirmed in part and remanded in part a district court's decision certifying class actions against the Republic of Argentina and granting over $2 billion in damages to eight classes of plaintiffs.  Puricelli v. The Republic of Argentina, No. 09-0332, 2010 WL 2105132 (2nd Cir. May 27, 2010)("Puricelli"). While the Court of Appeals concluded that class certification was appropriate, it held that the district court erred in entering aggregate class-wide relief, as opposed to determining individual relief.
 

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By John M. Landry and Jonathan D. Moss

In Dukes v. Wal-Mart Stores, Inc., Nos. 04-16688, 04-16720, 2010 WL 1644259 (9th Cir. Apr. 26, 2010), the United States Court of Appeals for the Ninth Circuit, sitting en banc, affirmed in part and reversed in part an order certifying what is likely the largest class of employment claims in the history of the United States. The decision is highly significant for class action practitioners in all areas of the law because it clarifies the standard in the Ninth Circuit for determining whether a party has met its burden under Rule 23 of the Federal Rules of Civil Procedure to certify a class.
 

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By Dan Brown

On April 27, 2010, in a closely watched antitrust case with the potential for broad impacts on class action arbitrations, the United States Supreme Court considered the issue “whether imposing class arbitration on parties whose arbitration clauses are ‘silent’ on that issue is consistent with the Federal Arbitration Act (FAA), 9 U.S.C. § 1 et seq.” Slip op. at 1. See Stolt-Nielsen S.A. et al. v. AnimalFeeds International Corp., 559 U.S. ---, No. 08-1198 (April 27, 2010) (“Stolt-Nielson”).
 

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By Philip F. Atkins-Pattenson and Martin White

On April 19, 2010, California’s Fourth Appellate District decided two companion cases – Durell v. Sharp Healthcare, --- Cal.Rptr.3d ----, 2010 WL 1529322, Cal.App. 4 Dist., April 19, 2010 (NO. D054261) and Hale v. Sharp Healthcare, --- Cal.Rptr.3d ----, 2010 WL 1529329, Cal.App. 4 Dist., April 19, 2010 (NO. D054637) – that mark a potentially significant development in pleading standards under California’s Unfair Competition Law, California Business & Professions Code sections 17200, et seq. (“UCL”). Broadly speaking, both Durell and Hale stand for the proposition that named class plaintiffs alleging a UCL violation under the “unlawful” prong of the statute must now also plead “actual reliance” when the conduct challenged involves “misrepresentation and deception.” Stated another way, plaintiffs alleging unlawful conduct stemming from misrepresentation and deception under the UCL now must actually have relied on the defendant’s alleged misrepresentation; proximate cause or a mere “factual nexus” is insufficient. Both decisions extend the reasoning of the California Supreme Court’s recent decision in In re Tobacco II Cases (2009) 46 Cal.4th 298 (Tobacco II), which addressed the requirements for pleading standing under the UCL’s “fraud” prong, to UCL class actions brought under the “unlawful” prong, at least where the conduct challenged involves misrepresentation and deception.
 

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By Jennifer Hoffman

In Wallace v. GEICO General Insurance Company (April 19, 2010) __ Cal.App.4^th __, the Fourth District Court of Appeal confirmed that a defendant cannot "pick off" a potential class representative by tendering payment of their claim in a class action alleging violations of California's Unfair Competition Law, Business and Professions Code section 17200 et seq. ("UCL"). The no "pick off" rule stems from the California Supreme Court's holding in La Sala v. American Savings & Loan Ass'n, 5 Cal.3d 864 (1971), that an involuntary settlement of the named plaintiff's claim does not necessarily divest him or her of standing to continue the action on behalf of the class. Under Wallace, as long as the class representative "suffered injury in fact" and "lost money or property" as of the filing of the lawsuit, he or she may still serve as the representative plaintiff in a UCL class action.
 

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By Neil A.F. Popović

On April 21, 2010, the Ninth Circuit Court of Appeals confirmed that a putative class action removed to federal court under the Class Action Fairness Act (CAFA) does not lose federal jurisdiction just because the court denies class certification. The case, United Steel, Paper & Forestry, Rubber, Manufacturing, Energy, Allied Industrial & Service Workers International Union, AFL-CIO, et al. v. Shell Oil Company, et al., No. 10-55269, ___ F.3d ____ (9th Cir. Apr. 21, 2010), began as a putative class action in California state court. Plaintiffs alleged that defendants' oil refineries violated California's Unfair Competition Law, Business & Professions Code § 17200, and failed to provide meal periods, rest periods, timely and accurate wage statements and wages due at the time of termination. Defendants removed the case to federal court under CAFA, 28 U.S.C. § 1332(d)(2), which provides removal jurisdiction if any member of the putative class is diverse from any defendant, if the amount in controversy exceeds $5,000,000.
 

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