Class Actions Brief Blog

This blog often focuses on traditional, opt-out class actions brought under Federal Rule of Civil Procedure 23, but there is another common form of mass action: collective actions under the Fair Labor Standards Act and the Age Discrimination in Employment Act. More than 5,000 collective action lawsuits are filed each year under the FLSA and ADEA, making those claims among the most popular forms of mass action and worthy of continued attention.

The FLSA and ADEA allow for aggregate litigation by providing that claims can be brought by employees on behalf of themselves and “other ...

When a class action is filed in state court, most defendants first evaluate whether the case can be removed to federal court. The Class Action Fairness Act (CAFA) offers a broader avenue to remove cases to federal court than traditional diversity jurisdiction. Removal under CAFA is permissible if (1) the amount in controversy exceeds $5,000,000 (which can include treble and punitive damages), (2) there are 100 or more putative class members, and (3) any class member is a citizen of a different state from any defendant.

But what happens if a defendant removes a case to federal court under ...

As class action litigation under ERISA continues its upward trend across the country, could Article III standing serve as a means through which a Court can fairly assess claims before costly discovery is imposed on defendants and judicial resources are expended? Several recent federal court decisions suggest as much.

ERISA, which provides protection to employees who participate in employee benefit plans, confers statutory standing on plan participants and beneficiaries to seek relief against their benefit plans as well as fiduciaries of these plans in federal court. Although ...

This post concerns a recurring topic in class-action practice: how a party—through its own litigation conduct—can waive its right to arbitrate.

The topic warrants attention, or at least came to our attention, because of a recent decision from a federal appellate court. The case, called Morgan v. Sundance, Inc., is a putative nationwide collective action filed under the Fair Labor Standards Act.

The defendant (Sundance) owns Taco Bell franchises in multiple states. The plaintiff (Robyn Morgan) worked at a Sundance restaurant in Iowa. She has accused Sundance of not paying her ...

The Private Securities Litigation Reform Act (“PSLRA”) establishes special rules in securities class actions. One such rule, found in 15 U.S.C. Sect. 78u-4(a)(3)(B)(vi) and known as the “Five-in-Three Provision,” prevents a “person” from serving as a lead plaintiff in “more than 5 securities class actions” during any three-year period. Does that rule, though, apply to institutional investors? The plain words of the statute certainly suggest so—it is difficult to argue that an institutional investor is not a “person,” and had Congress wanted to ...

Earlier this year, we reported that Multiple Studies Show Increase in Securities Class Actions. Cornerstone Research, one of the groups covered in our earlier report, recently issued its 2016 Midyear Assessment. This new analysis, which covers cases filed in January through June of this year, is consistent with several of the trends we reported previously, including the increasing number of securities class actions, the rise in the number of cases against smaller companies, and the increase in the number of Fourth Circuit cases.

Of particular interest is the significant increase ...

Recent studies by PricewaterhouseCoopers, NERA Economic Consulting, Cornerstone, and Kevin LaCroix of D&O Diary have all found that federal securities class actions are on the rise. According to PwC, the data shows a trend towards more cases filed against smaller companies, especially for claims regarding accounting irregularities. Smaller companies also face a significant risk of claims regarding inadequate internal controls over financial reporting, likely due to their smaller size and more limited resources.

NERA found that standard federal securities class actions ...

It is one thing for a federal trial court to decide, based on precedent and Rule 23, whether a class of individuals can be allowed – consistent with the principles of due process – to assert claims against a defendant.  But it is another – entirely – to contemplate an arbitrator making those decisions:  “class arbitration” can send chills down the spine of even the most seasoned defense lawyer. In NCR Corp. v. Jones, No. 3:15-cv-444 (Jan. 5, 2016), Judge Cogburn had to decide whether the parties’ arbitration agreement – which was silent on the subject – permitted class ...

Vinson v. Volkswagen Group of America Inc., No. 1:15-cv-00213 (W.D.N.C. September 23, 2015), a case filed this Wednesday in the Western District of North Carolina, is one of at least twenty-five class actions filed against Volkswagen in courts across the country this week. In addition, at least 27 state attorneys general have launched a multi-state investigation into the German automaker’s 2.0-liter diesel vehicles.

The Plaintiffs in the WDNC case, as in the other actions, allege that Volkswagen intentionally defrauded the EPA and consumers by installing a “defeat ...

We previously reported on Judge Cogburn’s decision to certify a class in an employee misclassification case, Rehberg v. Flowers Baking Co of Jamestown, LLC, No. 3:12-cv-596 (W.D.N.C. March 23, 2015). In May, the Fourth Circuit denied Defendants’ Rule 23(f) appeal, and so the case is proceeding in the district court. The class members have distributorship agreements with the Defendants that condition payments (in the event of any sale, conveyance or assignment) upon execution of a release. Class counsel apparently became irritated with the effect of these releases (and the ...

This post is contributed by R. Steven DeGeorge, an attorney at Robinson Bradshaw & Hinson, whose practice focuses on insurance coverage, product liability, toxic tort and environmental disputes.

We don’t often report on insurance coverage issues in this space, but the importance of possible coverage for expensive class action litigation should not be overlooked. On May 13, Judge Voorhees issued a decision addressing how an insurer’s duty to defend class action litigation is affected by the definition of a putative class. The policyholder was sued in multiple putative class ...

We all know that an employer’s decision to label certain individuals as “independent contractors” is not dispositive of the legal issue whether they are, in actuality, “employees.” And that issue is complicated further because the definition of “employee” varies from statute to statute. But courts have struggled in deciding whether employment status in a misclassification case can be decided on a class-wide basis. On the one hand, the legal issue is the same: are these folks employees or aren’t they? But, as Justice Scalia cautioned in Wal-Mart, merely stating ...

Although Rule 23(a) provides that members of a class may “sue or be sued,” a defendant class is quite the rarity. But the court-appointed receiver of Rex Venture Group LLC d/b/a www.ZeekRewards.com was successful in persuading Judge Mullen to certify a defendant class comprised of “Net Winners” in a Ponzi scheme in which over 700,000 participants lost over $700 million. See Bell v. Disner, No. 3:14-cv-91 (W.D.N.C. Feb. 10, 2015). Over $238 million in net winnings, according to the receiver, were obtained by 9,400 individuals from the net losers’ money. Judge Mullen found ...

Unlike many pretrial rulings, “[a] district court’s order denying or granting class status is inherently tentative.” Coopers & Lybrand v. Livesay, 437 U.S. 463, 469 n. 11 (1978). Rule 23 expressly provides that “[a]n order that grants or denies class certification may be altered or amended before final judgment.” Fed. R. Civ. P. 23(c)(1)(C). Indeed, as the Fourth Circuit observed, in a case our firm handled, “an order certifying a class must be reversed if it becomes apparent, at any time during the pendency of the proceeding, that class treatment of the action is ...

Family Dollar, a national discount store retailer based in Charlotte, was sued by a putative class of female store managers alleging gender discrimination in pay in the Western District of North Carolina. In January 2012, Judge Cogburn dismissed the class claims, holding that they weren’t viable under Dukes v. Wal-Mart Stores Inc., 131 S. Ct. 2541 (2011). His ruling was consistent with plaintiffs’ own declaration earlier in the case: they said their claims were “virtually identical” to those in the Wal-Mart case after the Ninth Circuit’s favorable decision (but before ...