Peck Argues Bifurcation of Class Action Comports with Seventh Amendment

October 3rd, 2022

     Arguing that the Sixth Circuit had already settled the question in this case, that sister circuits were in agreement, and that the leading treatise on class actions also concurred, CCL President told Judge Walter H. Rice that the defendants in a class action were mistaken when they argued that bifurcation of a toxic tort case necessarily violated the Reexamination Clause of the Seventh Amendment.

     In the now 14-year-old case, In re Behr Dayton Thermal Prods. LLC, homeowners had brought property damage claims based on chemicals dumped from nearby plants. Just weeks before trial of class-wide issues, the defendants again raised Seventh Amendment issues with the procedure, arguing that the danger that a second jury would reexamine issues determined by a first jury was too great to permit the case to go forward as a class action. The judge had determined that the case would be split into two phases. The first phase would try principles of negligence to establish defendant responsibility and general causation, establishing that the dumped chemicals were capable of the alleged damage. If the plaintiffs prevailed, then individual trials would take place in which each class member would have to show that their homes were damaged by one or more defendants and what compensation would be appropriate. 

     On behalf of the plaintiff class, Peck explained that first jury's findings were binding on the second jury in a jury instruction would prevent any Reexamination Clause issue. In a 2018 decision, the Sixth Circuit, in the very case before the district court, had said as much. Peck argued that the defendants' issue was with that appellate decision, which was mandatory precedent under the law of the case and mandate rules so that the district court had no choice but to follow it. Moreover, Peck said, the defendants' issue is not really a Seventh Amendment issue but an objection to the court's case management choices, which is tested by whether the court abused its discretion. 

      The judge chose to take the issue under advisement.

Peck Argues Sovereign Immunity Issue in Florida Appeals Court

March 8th, 2022

     CCL President Robert S. Peck urged a Florida appeals court to affirm a trial court's ruling that the University of Florida and its board do not receive sovereign immunity when it overcharged prospective students for their college applications and subsequent orientation.

      The case, a putative class action, relied on a Florida statute that set the maximum fees that state universities can charge for applications at five dollars and for orientation of accepted students at thirty dollars. Without seeking legislative permission to charge more, the University of Florida passed along a vendor's additional five-dollar fee to applicants, while charging seventy-five dollars for orientation. The plaintiffs sued on theories of conversion and negligent misrepresentation. A trial court denied the university's motion to dismiss based on sovereign immunity, and the defendants then appealed.

      During oral argument, one judge pressed the issue of whether the statutory waiver of immunity's reference to "loss of property" could include money collected by an illegal overcharge. That appeared to be the primary issue for the Court. Peck responded by explaining a wide variety of precedents where money was treated as property. The case is now under advisement, with a decision expected sometime in the next few months. 

CCL Contributes to Reply Brief in VW Emissions Appeal

November 11th, 2021

     In a reply brief filed in the Ninth Circuit, CCL joined co-counsel in arguing that the district court misunderstood federal and state law in eliminating one cause of action, limiting evidence, and reducing punitive damages in bellwether cases that opted out of the global settlement of the Volkswagen emissions scandal.

     For a nine-year period of time, Volkswagen employed a "defeat device" in certain cars sold as "green" vehicles that tricked emissions tests into registering low carbon emissions rates when the cars actually emitted 36 times the permissible levels of pollution. Buyers who purchased the cars across the United States sued over the misrepresentations. Volkswagen, which pleaded guilty to charges emanating from the scandal in both the U.S. and in Europe, settled with most buyers in a multi-district litigation heard in federal court in San Francisco.

     Nine purchasers who opted out of the settlement chose to try their cases. Under the terms of the joint trial, VW admitted liability but challenged the claimed damages. The purchasers brought several causes of action, including claims under California's lemon law and its consumer-protection law. However, the court treated the settlement offer made prior to the lawsuits as a bona fide attempt to settle the claims, throwing out the consumer-protection cause of action. The reply brief asserts that this was error because the settlement did not qualify as an offer under the law and included a waiver of other claims, which is inconsistent with California precedent. The court also ruled the cars fit for driving, even though the California statute has more rigorous requirements, including one that bars mislabeling the vehicles.

    Four of the plaintiffs won jury verdicts of $25,000 each in punitive damages. The court reduced those verdicts to a 4:1 ratio, putting each punitive-damage award under $10,000.  The reply brief argued that this misconstrued Supreme Court precedent that has rejected mandatory ratios and permits higher punitive damages when the compensatory damages are small.

    The case is due to be argued December 10.


Seventh Circuit Vacates Magnuson-Moss Decision, Opens Door to State Court Filing

July 29th, 2021

     In an opinion issued today, the Seventh Circuit held that both it and the district court lacked subject-matter jurisdiction in a putative class action that was filed against Best Buy's Geek Squad Protection Plan (GSPP). 

      The case began when a couple purchased an expensive television set from Best Buy that utilized the now-abandoned plasma technology. Best Buy urged them to purchase the GSPP as an extended warranty and offered a discount on the television set if they did. The couple purchased the GSPP. When the television set failed, Best Buy was unable to repair it, offering instead a refund of the depreciated value of the television or a much cheaper replacement, informing the couple that the GSPP is a service plan, not a warranty as their advertising states.

      The district court dismissed the action, holding that under federal regulations, a warranty cannot require extra payment, and the purchase of the GSPP prevented it from being considered a warranty under the Magnuson-Moss Warranty Act. On appeal, CCL argued for the couple that the regulation had no basis in the statute and allowed Best Buy to misrepresent its service contract as a warranty, precisely the evil that the Magnuson-Moss Act was designed to prevent.

      The Seventh Circuit's decision in Ware v. Best Buy did not address the substance of the arguments, but found that subject-matter jurisdiction was lacking, even though neither party nor the lower court raised the issue. Under Magnuson-Moss, jurisdiction lies in federal court only if a purported class action actually names 100 individual plaintiffs. That was lacking in the complaint. Recognizing the possibility of dismissal on jurisdictional grounds, CCL filed a supplemental brief for the plaintiffs, suggesting both other ways that jurisdiction could be asserted, as well as a request that the adverse district court decision be vacated so the Wares could refile in state courts. The Seventh Circuit took the latter approach.

CCL Files Brief on Best Buy Warranty Issue

September 30th, 2020

     The Center for Constitutional Litigation, working with Paul A. Rothstein, P.A., told the U.S. Court of Appeals for the Seventh Circuit that Best Buy's Geek Squad Protection Plan is a warranty under the federal Magnuson-Moss Warranty Act and that it should reverse dismissal of this action by the district court in an opening brief filed today.

      Tawanna and Anthony Ware purchased a $3,000 Samsung plasma television from Best Buy after its sales people and store manager advised them that the warranty that comes with the television is generally worthless because the electronic will work fine for the warranty period. They advised purchasing the protection plan to extend the warranty, protect themselves from failures of materials and workmanship for a five-year period. They made the sale more attractive by giving the couple a $300 discount if the extended warranty was purchased. 

      When the television failed after Samsung stopped manufacturing plasma televisions and could not be fixed, Best Buy reneged on the promised to replace or refund the full purchase price, claiming that the plan was actually a service plan, not a warranty. The Wares brought suit in a putative class action under Magnuson-Moss, but the case was dismissed because the Court credited an Federal Trade Commission regulation that distinguished warranties from service contracts if extra consideration was paid. The fact that Best Buy called and promoted the plan as a warranty and treated the television and plan as a single transaction in a bundle did not move the district court. Meanwhile, Magnuson-Moss itself defines a warranty as part of the same transaction if it was part of the basis for the bargain. The conflict between the statutory language and the regulation is at the heart of this consumer action. Today's filing is the start of the briefing process.

Congressional Staff Receive Preview of Supreme Court Cy Pres Case

June 8th, 2018

      Congressional staff heard differing views about the Supreme Court's likely approach to cy pres next term in Frank v. Gaos. CCL President Robert S. Peck suggested that the Supreme Court is likely to take a very narrow view of the issue, based on the facts in the case. Peck presented, along with Adam Schulman, a lawyer with the group headed by Petition Ted Frank, who brought the challenge. The event was sponsored by the Congressional Civil Justice Academy, a part of the Law and Economics Center at the Antonin Scalia Law School at George Mason University.

      In Frank, the Ninth Circuit upheld a class action settlement that grew out of the information that Google acquired, used and distributed when Internet surfers use that search engine. Though the damage suffered by uninformed surfers was difficult to monetize and the case itself was three times challenged with motions to dismiss, a mediator suggested the settlement that both sides accepted. As part of the settlement, Google agreed to provide a permanent disclosure of what information it collects and how it uses it. In addition, Google agreed to pay compensatory damages of $8.5 million. After attorney fees, costs, and incentive compensation for the named class representatives, the court was left with $5.3 million to be distributed to 129 million class members, an average of 4.1 cents apiece. The court determined that distribution was infeasible given that a process for proof of claim and the process of sending checks would cost substantially more than the four cents each claimant was owed. Instead, the court entertained proposals for non-profit organizations that work in the area of Internet privacy as alternate recipients. 

     The organizations suggested provided the court with proposals about how the money would be spent to advance Internet privacy. After a seven-month process of examination, the court approved each of the organizations as highly qualified, even though it lamented that the groups were the "usual suspects" on this subject. Objector Frank proposed an alternative approach that would compensate only some members of the class at a $5 or $10 rate given the low claiming rate that might be accepted. While the Ninth Circuit held that that approach would have been acceptable, it found nothing wrong with the use of cy pres to send the money to the organizations, utilizing the deferential abuse of discretion standard of reviewing the trial court. 

      The Supreme Court will consider whether the approach approved by the Ninth Circuit comported with Rule 23's requirement that class action settlements be fair, reasonable and adequate.

Plaintiffs File Briefs in Support of Class Certification, in Opposition to Challenge to their Experts in Chicago Stop and Frisk Case

May 30th, 2018

      As part of a team of plaintiffs' lawyers, CCL participated in the writing and filing of briefs representing a proposed class of minority residents who were stopped-and-frisked by Chicago police without probable cause. The City of Chicago challenged class certification of the class, as well as the expert evidence in support of certification. Two briefs responded to Chicago's objections. 

District Court Permits Stop & Frisk Case to Proceed

November 10th, 2015

In a civil rights case alleging the rampant use of illegal stop & frisk tactics by Chicago Police, the federal district court for the Northern District of Illinois denied the City’s and the Superintendent of Police’s motions to dismiss the claims brought by more than 50 African-American and Hispanic plaintiffs on behalf of themselves and a class of plaintiffs. The complaint alleges that Chicago Police officers stopped and frisked the plaintiffs and members of the class based on their race or national origin and did so without reasonable suspicion that they were engaged in criminal activity. Working with co-counsel Antonio M. Romanucci, Martin D. Gould & Angela Kurtz with the Chicago firm Romanucci & Blandin, LLC, and Rod Gregory of the Gregory Law Firm in Jacksonville, Florida, CCL’s Robert S. Peck and Valerie M. Nannery prepared many of the successful arguments in the plaintiffs’ opposition to the motions to dismiss.

The district court adopted many of CCL’s arguments and held that the plaintiffs have standing to seek equitable relief and that they have stated claims against the City and the Superintendent in his individual capacity for violations of the plaintiffs’ constitutional rights. The court rejected the City’s argument that the plaintiffs could not seek declaratory and injunctive relief because their past encounters with Chicago Police officers could not establish that they faced a real and immediate threat of future unconstitutional stops and frisks by officers. The court held that held that the plaintiffs’ claims for injunctive relief were plausible based on their allegations of an unconstitutional practice and repeated unconstitutional stops and frisks by Chicago Police of people who were engaged in innocent, lawful conduct. The court also held that the complaint alleged enough factual details to state claims for violations of the plaintiffs’ Fourth and Fourteenth Amendment rights against the City, and against the Superintendent in his individual capacity. Finally, the court rejected the City’s assertion that many of the plaintiffs’ claims were mooted by the City’s separate agreement with the ACLU to change Chicago Police practices. The court wrote that the City’s promise to comply with its agreement with the ACLU, without more, could not moot the plaintiffs’ requests for prospective relief, and that the agreement did not moot the plaintiffs’ claims for damages.

The court’s order, which came more than a month before its scheduled hearing on the motions, requires the defendants to answer the complaint, and allows the plaintiffs’ claims to move forward.

CCL Argues Class Action Standing Challenge Is Not Properly Presented

September 29th, 2015

On September 29, CCL filed an amicus brief for the American Association for Justice, once again asking the U.S. Supreme Court to dismiss the petition in a case involving the Article III standing requirements in federal class actions. Tyson Foods, Inc. v. Bouaphakeo, No. 14-1146.

Plaintiffs in this case are hourly workers at a Tyson pork processing facility in Iowa. Employees were paid from the time the first piece of work arrived at their workstation until the last piece was finished. They were also paid four additional minutes to compensate for time donning and doffing required protective or sanitary equipment or clothing. Plaintiffs brought a class action alleging that donning/doffing activities constituted compensable work under the Fair Labor Standards Act for which they were not fully compensated. Plaintiffs’ expert testified, based on observations of a sample of workers, that workers in two areas of the plant spent an average of 21 minutes and 18 minutes performing these activities. Another expert calculated the amount of overtime pay owed to the class if Tyson had properly credited the workers with donning/doffing time. The expert noted that 212 members of the class would not have been eligible for additional overtime, even if properly credited with donning/doffing time. The jury returned an aggregate verdict in favor of the class. The Eighth Circuit Court of Appeals affirmed.

The Supreme Court granted certiorari to review two questions, including whether a class action may be certified “when the class contains hundreds of members who were not injured.”

In an amicus brief prepared by CCL Senior Counsel Jeffrey R. White, AAJ submitted that this question is not properly presented in this case. The complaint alleged that all members of the class were undercompensated due to the pay system used by Tyson. The fact that the class subsequently limited the relief sought does not retroactively deprive the 212 ineligible workers of Article III standing. Moreover, the record reflects that plaintiffs’ expert removed those 212 workers from her calculations of the class damages; they did not contribute to the amount claimed by the class. Finally, Tyson lacks standing to challenge the allocation of an aggregate award among class members that will not affect the amount of Tyson’s liability. If the Court reaches the merits, AAJ argued, it should affirm the general rule followed by federal courts that allegations of concrete injury by the named plaintiff in a class action is sufficient to establish standing under Article III.

CCL Joins Oakland Legal Team in Filing FHA Lawsuit against Wells Fargo

September 22nd, 2015

The City of Oakland, California filed a federal lawsuit against Wells Fargo Bank to recover damages caused by the bank’s predatory and discriminatory lending practices within the city.

The lawsuit charges Wells Fargo with targeting minority borrowers with predatory mortgage loan terms in violation of the federal Fair Housing Act and California’s Fair Employment and Housing Act.

In a press release issued upon the filing of the action, Oakland City Attorney said, “Wells Fargo’s discriminatory conduct devastated individuals and communities, increasing poverty and wiping out or drastically reducing wealth for minority communities while bankers prospered.”

The lawsuit asks the Court to order Wells Fargo to cease its discriminatory practices and compensate the City of Oakland for financial harm that the foreclosure crisis caused the city. In addition to losing millions in tax revenues, which necessitated police layoffs and other cuts in city services, the bank’s predatory practices saddled the city and its taxpayers with massive costs in addressing blight, vandalism and crime associated with foreclosed properties.

Thousands of homes went into foreclosure and remain in poor condition costing cities significant sums of money due to the loss of property taxes and increased out-of-pocket expenditures to remedy the resulting blight throughout minority communities.

City Attorney Parker filed the lawsuit in federal court with outside counsel that includes CCL President Robert S. Peck, Dean Erwin Chemerinsky of the University of California at Irvine School of Law, Yosef Peretz of Peretz & Associates, and Joel Liberson of Trial & Appellate Resources.

The U.S. Department of Justice and the cities of Los Angeles, Miami and Miami Gardens previously filed similar lawsuits against various banks. CCL is part of the legal team in the other municipal lawsuits.