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February, 2013 | Missouri & Kansas Class Action Law

Monthly Archives February 2013

The United States Supreme Court’s opinion in Amgen, Inc. v. Connecticut Retirement Plans and Trust Funds, 2013 WL 691001 (U.S., Feb. 27, 2013), presents a fascinating theoretical dilemma, but one with limited application beyond securities law.  Justice Scalia’s assertion in his dissent that Justice Ginsberg’s majority opinion expands the consequences of the Basic decision from “regrettable” to “arguably disastrous” may be an overstatement beyond the context of securities law.  The issue in this case was whether the proponent of certifying a securities class action under § 10(b) of the SEC Act of 1934 and SEC Rule 10b-5 is required to prove the element of materiality at the class certification stage.  The majority held that it did not, because materiality, while an element of the fraud on the market theory applicable to securities claims, was a merits issue.  This is of course not surprising, as courts have long been warned away…

What happens if parties negotiate a preliminary class-action settlement, but the case is subsequently transferred to an MDL for pretrial purposes under 28 U.S.C. § 1407? The short answer: the MDL court has power to facilitate a global settlement by enjoining one-off settlements of cases transferred to the MDL. Judge Lungstrum's order in MDL 2138 (In re Bank of America Wage and Hour Employment Litigation) provides an instructive lesson. The Lopez class action originated in California state court and was ultimately removed and transferred to the MDL.  Before transfer, the Lopez parties negotiated a preliminary class settlement.  After transfer, the MDL court granted a joint motion to stay the proceedings to allow MDL counsel to negotiate a global settlement.  The Lopez parties apparently didn't want any potential MDL settlement to interfere with their preliminary settlement.  Here are the relevant events: Dec 2007 - Lopez filed as class action in California…

The defendant in this case got an unpleasant valentine from Judge Kays when he granted the plaintiff class’s motion to enforce the class settlement, despite the Defendant’s assertion there was no settlement.  In July 2012 the parties had informed the Court that they had agreed to settle this putative FLSA class action and were working on finalizing the agreement.  For the next two months, Plaintiffs continued to inform the Court that they had settled the case, while the Defendant failed to respond to the Court’s requests for a status update – never a good practice – until in November it informed the Court that the parties had reached an impasse.  Plaintiffs disagreed, claimed they did indeed have a deal, and moved to enforce it. Defendant Health Systems Inc. identified three sticking points: the virtual settlement fund and calculation of class attorneys’ fees; the scope of class notice; and the scope…

In this case, Judge Murguia made it clear that a plaintiff seeking to certify a FLSA class need not plead either the number of hours worked, or the amount of uncompensated overtime, so long as the complaint makes clear from the context the grounds upon which the claim rests.  Noting a split in the federal courts on this issue, Judge Murguia denied a motion to dismiss and held that Rule 8(a) was satisfied without any particular quantification so long as the complaint in issue made clear that the alleged FLSA violation was based on requiring the putative class representative and the class to perform certain tasks before and after their shifts without compensation.

Under the “careful what you ask for” category, Judge Gaitan faced an incongruous situation in this wage and hour class action brought against Farmland Foods.   In an FLSA and MMWL class that had been filed in 2010 and certified a year ago, Plaintiffs moved prevent Farmland from changing the very “doffing and donning “ policies it was challenging.  Specifically, having learned from Farmland’s employees that certain policy changes were being implemented, class counsel sought an evidence preservation order enjoining Farmland from changing its employment policies, and sought an order granting class counsel video access at any time within a prescribed 30-day window to observe and document these employment activities.   Plaintiffs argued that a preservation order was necessary to avoid the “irreparable injury” that would occur from what it termed “serial changes mid-litigation to its operational and compensation policies . . . and to allow the Court to render effective relief…

In a brief, but useful order, Judge Fleissig denied a motion to quash a subpoena and for sanctions asserted by counsel characterized as a “professional objector.”   Class counsel for a class action pending in the United States District Court for the Central District of California had served a subpoena on the Law Office of Jonathan E. Fortman, LLC, which represented an objector to the proposed class settlement.  The subpoena instructed Fortman/Movant to attend a deposition and produce documents related to: 1) The filing of the objection in the underlying action; (2) Any objections filed in state or federal court by Movant to other class action settlements; (3) Any fee sharing arrangements between Movant and its clients in relation to the current and other objections; and (4) Any settlements or payouts Movant received in return for withdrawing a client's objection or appeal. Fortman asserted “outrage,” moved to quash, and sought fees…