Posts By Scott Kaiser

The Supreme Court's opinion today in Campbell-Ewald v. Gomez, No. 14-857 significantly limits the defense tactic of making an offer of judgment to moot a plaintiff's or putative class representative's claim: We hold today, in accord with Rule 68 of the Federal Rules of Civil Procedure, that an unaccepted settlement offer has no force. Like other unaccepted contract offers, it creates no lasting right or obligation. With the offer off the table, and the defendant’s continuing denial of liability, adversity between the parties persists. In short, defendant cannot make a Rule 68 offer and then argue that an unaccepted offer renders the plaintiff's claim moot (i.e. no Article III standing). The cost-shifting consequence of plaintiff not accepting a Rule 68 offer remains: the plaintiff must pay costs incurred after the offer was made "if the judgment that the [plaintiff] finally obtains is not more favorable than the unaccepted offer."  Rule 68(d).  This is important, especially when a…

Filing an bare-bones motion for class certification alongside the class-action complaint is one tactic to avoid the mooting effect of a Rule 68 offer. But what are defendants and the courts supposed to do with such a motion and its flimsy thread-bare recitals of the Rule 23 requirements? Federal judges do not like motions lingering on their dockets longer than six months; it hurts their stats and gets reported to Washington.  See, e.g., Singer v. Illinois State Petroleum Corp., 2013 wl 2384314, at *2 (N.D. Ill. May 24, 2013) ("[T]his Court is unwilling to contemplate the prospect of shattering its unbroken record of more than three decades of reporting no 'stale' pending motions in its statutorily-required September 30 report where, as here, such purported staleness is occasioned by lawyer-caused delays rather than by this Court's failing to act on a live motion."). Instead of agreeing to an arbitrarily fast six-month class-cert…

Here's a quick refresher (plus a lesson) on CAFA's local-controversy exception: a district court must decline jurisdiction when more than two-thirds of the proposed class members are citizens of the state in which the action was filed.  The two-thirds is determined as of the date of the filing of the complaint.  The party seeking remand (typically the class representative / plaintiff) has the burden of proving the exception applies. So what's the lesson? You cannot prove citizenship using solely a putative class member's last-known address.  Residency does not establish citizenship - i.e. the fact that a class member has (or once had) a residential address in Missouri does not mean that person is a citizen of Missouri. So how may class representatives meet their burden to prove CAFA's local-controversy exception?  Two ways: submit affidavit evidence or statistically significant surveys showing two-thirds of the class members are local citizens, or redefine the class as only…

Yesterday, the 11th Circuit held that a putative class representative's claim is not mooted by an unaccepted Rule 68 offer of judgment.  See Stein v. Buccaneers LP, No. 13-15417 (11th Cir. Dec. 1, 2014). Just in time for the holidays, here's a summary of the Rule 68 legal landscape in the 8th and 10th Circuits: 8th Circuit.  There's no Eighth Circuit decision squarely on point.  The district courts have reached opposite conclusions: Goans Acquisition, Inc. v. Merchant Solutions, LLC, 2013 WL 5408460 (W.D. Mo. Sept. 26, 2013) (following the 7th Circuit's decision in Damasco) March v. Medicredit, Inc., 2013 WL 6265070 (E.D. Mo. Dec 04, 2013) (finding that pre-certification offer does not moot a named plaintiff's claim); Sandusky Wellness Center, LLC v. Medtox Scientific, Inc., 2013 WL 3771397, at *2 (D. Minn. July 18, 2013) (same); Jenkins v. General Collection Co., 246 F.R.D. 600, 602–03 (D. Neb. 2007) (same); Liles v. Am. Corrective Counseling Servs., Inc., 201 F.R.D. 452, 455…

Since 2005, Missouri has statutorily limited punitive damage awards to the greater of $500,000 or five times the net amount of the judgment awarded to plaintiff.  See Mo. Rev. Stat. 510.265. In September 2014, however, the Missouri Supreme Court in Lewellen v. Franklin, 441 S.W.3d 136 (Mo. 2014) held that this punitive-damages cap violates a plaintiff's constitutional right to a trial by jury. The Court's analysis was straightforward: Any change in the right to a jury determination of damages as it existed in 1820 violates the Missouri Constitution. In 1820, there existed a right to a jury determination of the amount of punitive damages. A statutory cap on punitive damages "necessarily changes and impairs" that right. Therefore, the punitive-damages cap under Mo. Rev. Stat. 510.265 is unconstitutional. The Court also distinguished between Missouri's statutory punitive-damages cap and the US Constitution's Due Process limitations on punitive damages, noting that courts have a duty to conduct a fact-specific inquiry…

Since May 2011, here are the most-cited reasons the JPML has denied Section 1407 centralization of products liability and sales/marketing cases: The limited number of parties and involved counsel make informal cooperation practicable and preferable to formal centralization. MDL 2509 - IN RE: SEMPRIS MEMBERSHIP PROGRAM MARKETING AND SALES PRACTICES LITIGATION, 2/18/14 Order Denying Transfer ("Various mechanisms are available to minimize or eliminate the possibility of duplicative discovery even without an MDL.  In these circumstances, informal cooperation among the relatively few involved counsel and coordination among the involved courts are, in our judgment, preferable to formal centralization.") MDL 2366 - IN RE: LOUISIANA-PACIFIC CORP. TRIMBOARD SIDING MARKETING, SALES PRACTICES AND PRODUCTS LIABILITY LITIGATION, 6/11/12 Order Denying Transfer (denying transfer of five actions, in part, because “plaintiffs in some of the actions share counsel, and defendant is represented by the same counsel in all actions”) MDL 2340 - IN RE: FRESH DAIRY PRODUCTS…

Plaintiff's lawsuit was essentially about octane. She claimed that an unfair practice occurs every time a consumer buys higher octane fuel from single-hose gas pump and incidentally receives a residual amount of lower octane fuel lingering in the hose from a prior fueling. In her single-count MMPA lawsuit, Plaintiff sought money and an injunction on behalf of a class of Missouri consumers who bought higher grade gasoline from the Defendants (retail-gas-station operators). Preemption posed a problem for Plaintiff. The federal Petroleum Marketing Practices Act expressly preempts state-law requirements regarding labeling and marketing of gasoline octane rating that are not "the same as" the PMPA's requirements. Although Plaintiff carefully omitted the word "octane" in her class-action complaint, Judge Kays held that federal law preempted her MMPA claim: Although Plaintiff has successfully avoided using the word “octane” anywhere in the Complaint, it does not change the fact that the essence of her…

On February 24, 2014, the Missouri Department of Revenue released a letter ruling on the taxability of separately-stated delivery charges for products used in heavy-duty equipment and industrial applications.  (In that situation, the charges were taxable because the parties intended for delivery to be part of the sale.) Since we've seen several recent class actions claiming that the customers/plaintiffs paid tax on delivery charges that shouldn't have been taxed, we thought we'd review the key Missouri Supreme Court cases analyzing taxability of delivery charges.  Bottom line, the fundamental question is whether the parties to these transactions intended the delivery charge to be part of the sale: Alberici Constructors, Inc. v Director of Revenue, No. SC93771 (Mo. Jan. 13, 2015) (affirming administrative agency's finding that delivery charge was taxable based on "substantial and competent evidence . . . that it was [the parties'] intention that the delivery service be a part of the crane rental") Southern Red-E-Mix…

Plaintiff fed his dog Beneful Healthy Weight dog food, and within two weeks, his dog was lethargic, incontinent, and hematuric (blood in urine).  The vet recommended a medicated dog food, and the symptoms disappeared. Plaintiff filed a putative class action under the Missouri Merchandising Practices Act (MMPA), alleging that Purina misrepresented its Beneful brand dog food as "healthy," "wholesome," "nutritious," and "100% Complete Nutrition," and failed to disclose that the dog food caused, or carried the risk of, illness and death in a significant number of dogs. Defendant moved to dismiss the complaint, based on Twombly and Rule (9b).  The Court granted the motion (with leave to amend). On Twombly grounds, the Court found that the Complaint failed to set for a plausible claim -- specifically there was no causation alleged: Nothing in the Complaint alleges that the veterinarian diagnosed the bladder stones because of the certain type of dog food…

Hutsler stands for the proposition that a significant lapse of time between (1) advertising and sale of merchandise and (2) an alleged unfair practice will make it difficult for a plaintiff to satisfy the statutory requirement that latter be “in connection with” the former. In 2001, plaintiffs refinanced their home with Wells Fargo. Eleven years passed. In 2012, due to financial difficulty, plaintiffs couldn't make their payments.  Well Fargo foreclosed on plaintiffs' home. Plaintiffs sued, claiming that Wells Fargo violated the MMPA “in connection with the sale of the property and/or mortgage loan” based on the way Wells Fargo handled the 2012 foreclosure (e.g., failing to provide plaintiffs with loss mitigation opportunities, foreclosing on plaintiffs' home without explanation as to why they did not qualify for mortgage assistance; and making plaintiffs wait before answering their telephone calls, and transferring plaintiffs' calls). Wells Fargo moved to dismiss the MMPA claim, arguing…

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