In 2008, investors in the Parkcentral hedge fund lost as much as $3 billion dollars when Parkcentral’s investment in commercial mortgage-backed securities (“CMBS”) was devalued. The investors, limited partners of Parkcentral, sued employees of Parkcentral’s general partner alleging that they breached fiduciary duties by making material misrepresentations and omissions regarding the nature of Parkcentral’s investments and hedging strategy. In particular, the investors ... Keep Reading »
Exaggeration of Counsel’s Class Action Experience Draws Rule 11 Sanction
New York District Court Judge Shira A. Scheindlin found class counsel’s allegation that they were experienced and competent was false because they could not provide any case in which they were certified as class counsel or recovered monetary relief for class member. As a result, the court found that class counsel violated Rule 11. The court declined to award attorney fees as a sanction, however, finding that the public reprimand was a sufficient deterrent. The Rule 11 ... Keep Reading »
District Court Decertifies Class based on Dukes, Comcast and Tenth Circuit Precedent
Plaintiff sued for underpayment or nonpayment of royalties on natural gas produced from wells in Kansas due to defendant’s failure to place the gas in marketable condition. The district court initially certified the class in 2011. Defendant moved to decertify the class in 2013 based on the United States Supreme Court opinions in Dukes and Comcast together with two recent Tenth Circuit opinions vacating class certification orders in similar oil and gas royalty cases: ... Keep Reading »
Certification Denied for Purchasers of Product Awash with Design Differences
The Central District of California denied Plaintiff’s motion to certify a class of purchasers of Defendant’s washing machines that contain an air hose connected to an air dome. Plaintiff alleged the connection between the hose and dome was defective and could come loose under normal operation. As a result, the washer would overflow and cause substantial property damage or personal injury. The court found Plaintiff failed to meet his burden of showing that the ... Keep Reading »
Preemptive Strike Terminates Nationwide Product Defect Class In Louisiana
A Louisiana District Court struck plaintiff’s class allegations in a putative nationwide class of Mercedes vehicle owners finding plaintiff failed to meet his burden of proving predominance, superiority and manageability. Plaintiff alleged that that Mercedes concealed defects in the GL model suspension system that caused the vehicles to lean and be undriveable. Plaintiff’s complaint asserted various common law product liability, warranty and fraud theories as well as ... Keep Reading »
Putative Maybelline Makeup Class Fades In California District Court
The District Court for the Southern District of California denied certification in a California consumer class action in which Plaintiffs’ claimed that Maybelline falsely labeled and advertised its “SuperStay 24HR” makeup as having 24 hours of staying power. The Court found several deficiencies in the proposed class of Maybelline makeup purchasers under Rules 23(a), (b)(2) and (b)(3). First, the court found that the proposed class was overbroad because it included ... Keep Reading »
Speculative Expert Testimony Fails to Satisfy Plaintiff’s Light Numerosity Burden
The relatively light burden of proving numerosity under Rule 23(a) cannot be satisfied with speculative testimony, even if an expert does the speculating, says the Southern District of Florida. In a putative class action brought for violations of the Telephone Consumer Protection Act, plaintiff sought damages for receiving unwanted advertisements via text message by the defendant’s alert service. Plaintiff moved to certify a class of Florida telephone subscribers who ... Keep Reading »
Ohio District Court Strikes Impermissible “Fail-Safe” Class Allegations
In a Telephone Consumer Protection Act (TCPA) case, the United States District Court for the Southern District of Ohio struck plaintiff’s class action allegations because Plaintiff proposed a “fail-safe” class in which membership was dependent on the validity of the putative class member’s claim. A fail-safe class is impermissible because it includes only those who are entitled to relief. Either the class members win on the merits, or by virtue of losing, they are not in ... Keep Reading »
Court Rejects Two Common Methods of Proving Reliance on Class-wide Basis
Plaintiffs in a securities fraud class action containing over 2,000 individual investors were unable to convince a New York District Court that the reliance element of their claims was susceptible to a common method of proof for all putative class members thereby precluding certification under Rule 23(b)(3). Plaintiffs alleged that defendants misrepresented the involvement a certain individual, known for his investment expertise, would have in the management of their ... Keep Reading »
Courts Find Removal Is Not Permitted Under CAFA Where Plaintiff Did Not Plead A Class Action Under Rule 23 Or Comparable State Rule
District Courts continue to shape the boundaries of CAFA jurisdiction in suits that are not pleaded as class actions. For example, the District Court for the Eastern District of Louisiana held that defendants could not rely on the “real party in interest” inquiry articulated in the Supreme Court’s recent decision in Mississippi ex rel. Hood v. AU Optronics Corp., 134 S.Ct. 736 (2014) to create a class action where the State did not plead one. The case arose from ... Keep Reading »
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