Intellectual Property Law & Consumer Class Actions
Monday, April 15, 2013
The Ninth Circuit, in SAMS V. YAHOO! INC., affirmed the dismissal of putative class claims that Yahoo! Inc., a network service provider, violated the Stored Communications Act when it disclosed subscriber information to the government pursuant to allegedly invalid subpoenas. The panel held that Yahoo! was immune from suit under 18 U.S.C. § 2707(e) because it produced the requested documents in good faith reliance on grand jury subpoenas. The panel held that the good faith defense is met when the defendant complies with a subpoena that appears valid on its face, in the absence of any indication of irregularity sufficient to put the defendant on notice that the subpoena may be invalid or contrary to applicable law. A defendant may not benefit from the defense, however, if the defendant actually knew that the subpoena was invalid under the applicable law.
Tuesday, March 19, 2013
The Supreme Court, in STANDARD FIRE INSURANCE CO. v. KNOWLES, found that Plaintiff's stipulation that he and the class would seek less than $5 million in damages does not defeat federal jurisdiction under CAFA. The precertification stipulation can tie Plaintiff’s hands because stipulations are binding on the party who makes them, but the stipulation does not speak for those that Plaintiff purports to represent, for a plaintiff who files a proposed class action cannot legally bind members of the proposed class before the class is certified.
Wednesday, February 27, 2013
To recover damages in a private securities-fraud action under §10(b) of the Securities Exchange Act of 1934 and Securities and Exchange Commission Rule 10b–5, a plaintiff must prove, among other things, reliance on a material misrepresentation or omission made by the defendant. The Supreme Court, in AMGEN INC. ET AL. v. CONNECTICUT RETIREMENT PLANS AND TRUST FUNDS, held that although required to prevail on the merits, proof of materiality is not a prerequisite to certification of a securities-fraud class action seeking money damages for alleged violations of section 10(b) of the Securities Exchange Act and Securities and Exchange Commission Rule 10b–5. The Court rejected defendant's argument that plaintiff was required to prove the materiality of defendant's alleged misrepresentations and omissions before class certification in order to satisfy Rule 23(b)(3)’s requirement that “questions of law or fact common to class members predominate over any questions affecting only individual members.”
Wednesday, January 9, 2013
The Second Circuit, in PURDUE PHARMA L.P. v. COMMONWEALTH OF KENTUCKY, held in a petition for leave to appeal the district court's remand order in case by Kentucky Attorney General against defendant for misleading health care providers, consumers, and government officials regarding the risks of addiction associated with the prescription drug OxyContin, petition is denied, where: 1) parens patriae suits brought by state attorneys are not removable as "class actions" under the Class Action Fairness Act of 2005; thus, 2) federal jurisdiction does not exist to hear this case; and 3) the case was properly remanded.
Tuesday, November 13, 2012
The Supreme Court, in UNITED STATES v. BORMES, found an attorney's putative class action against the United States seeking damages under the Fair Credit Reporting Act (FCRA), as well as under the Little Tucker Act, alleging that the electronic receipt he received when paying his client's federal-court filing fee on Pay.gov included the last four digits of his credit card number and the card's expiration date, in willful violation of the FCRA, the judgment of the Federal Circuit reversing the district court's dismissal of the suit, is vacated and remanded where: 1) the Little Tucker Act does not waive the government's sovereign immunity with respect to FCRA damages actions; and 2) where, as in FCRA, a statute contains its own self-executing remedial scheme, only its own text can determine whether Congress unequivocally intended to impose the statute's damages liability on the Federal Government.
Thursday, October 25, 2012
The Ninth Circuit, in CHESBRO v. BEST BUY, reversed the dismissal of a class action against Best Buy that alleged violations of the Telephone Consumer Protection Act of 1991 and the Washington Automatic Dialing and Announcing Device Act. The Ninth Circuit found Best Buy's calls, although informational in nature, were aimed at encouraging listeners to engage in future commercial transactions with Best Buy to purchase its goods. The calls constituted unsolicited advertisements, telephone solicitations, and telemarketing, and were prohibited by the TCPA and the WADAD.
Thursday, October 11, 2012
The Second Circuit, in WYLY v. WEISS, ruled that the award of “fair and reasonable” attorneys’ fees precludes a subsequent malpractice action under the “relitigation” exception to the Anti-Injunction Act. The court concluded that where the parties had a full and fair opportunity to litigate the reasonableness of counsel’s representation, a subsequent malpractice action may be enjoined under the relitigation exception.
Friday, August 31, 2012
The United States Supreme Court has granted certiorari in STANDARD FIRE INSURANCE COMPANY V. KNOWLES, following a ruling last term, in which the Court held that in a putative class action "the mere proposal of a class ... could not bind persons who were not parties." Smith v. Bayer Corp., 131 S. Ct. 2368, 2382 (2011). In light of that holding, the question presented in STANDARD FIRE INSURANCE COMPANY V. KNOWLES is: When a named plaintiff attempts to defeat a defendant's right of removal under the Class Action Fairness Act of 2005 by filing with a class action complaint a "stipulation" that attempts to limit the damages he "seeks" for the absent putative class members to less than the $5 million threshold for federal jurisdiction, and the defendant establishes that the actual amount in controversy, absent the "stipulation," exceeds $5 million, is the "stipulation" binding on absent class members so as to destroy federal jurisdiction?
Thursday, August 23, 2012
In HECHT v. UNITED COLLECTION BUREAU, INC. the Second Circuit held that a single notice published in a single publication satisfies neither due process nor Rule 23(b)(3). Plaintiff appealed a judgment of the United States District Court for the District of Connecticut dismissing her claim as precluded by a settlement and judgement in a prior class action that provided publication of the settlement notice in a single issue of USA Today. Plaintiff did not dispute that the doctrine of res judicata would normally bar her claim, but argued that binding her to the earlier settlement order would violate due process because the notice of class certification and settlement provided to absent class members was constitutionally inadequate. The Second Circuit agreed.
Monday, August 13, 2012
In IN RE: AMERICAN INTERNATIONAL GROUP, INC. SECURITIES LITIGATION, a Second Circuit securities class action alleging that defendants violated Rule 10b-5(a) and (c) by entering into a sham $500 million reinsurance transaction designed to mislead the market and artificially increase AIG's share price, the district court's denial of plaintiffs' motion to certify a settlement class was vacated and remanded, as under Amchem Products, Inc. v. Windsor, 521 U.S. 591, 620 (1997), a securities fraud class's failure to satisfy the fraud-on-the-market presumption primarily threatens class certification by creating "intractable management problems" at trial. Here, because settlement eliminates the need for a trial, a settlement class need not demonstrate that the fraud-on-the-market presumption applies to its claims in order to satisfy the predominance requirement.
Thursday, June 28, 2012
In LARRY D. FREDERICK v. HARTFORD UNDERWRITERS INSURANCE COMPANY the Tenth Circuit held that a defendant seeking to remove under the Class Action Fairness Act must show that the amount in controversy exceeds $5,000,000 by a preponderance of the evidence. A defendant is entitled to present his own estimate of the amount at stake and must show by a preponderance of the evidence that the amount in controversy exceeds the amount in 28 U.S.C. § 1332(d)(2) — currently $5,000,000. The court emphasized that this preponderance standard applies to punitive damages as well, and that such damages cannot be assumed when calculating the amount in controversy. By adopting the preponderance standard, the Tenth Circuit ensures that defendants seeking removal face the same burden regardless of whether they are invoking simple diversity jurisdiction or CAFA jurisdiction. The Tenth Circuit joins the First, Second, Fourth, Sixth, Seventh, Eighth, and Eleventh Circuits with its holding. The Third and Ninth Circuits apply the "legal certainty" standard.