Whether or not you agree with Dean Klonoff’s criticisms from an academic point of view, the article is a must read for anyone looking for a good synopsis of the key developments in the U.S. class action law over the past several years.  From the Class Action Fairness Act to the Supreme Court’s recent decisions in Dukes and Concepcion to slightly less glamorous topics such as the necessity of a precise class definition, Klonoff’s article is impressive in its comprehensive analysis of relevant recent developments.

CAFA Law Blog has been covering this issue extensively in recent months, and I expect they will have an entertaining post about the case in the coming days.  For CAFA Law Blog posts on the topic, see this link.

CAFA Removal and Remand: Latest Developments

Tuesday, March 29, 1:00pm-2:30pm EDT

Program Description:

Jurisdictional ambiguities in the CAFA statute continue to challenge litigators. One example is the Eleventh Circuit’s Cappuccitti v. DirecTV ruling that the district court lacked jurisdiction because no individual plaintiff or putative class member met the amount-in-controversy requirement. While the Eleventh Circuit later vacated its decision, its initial confusion was caused by CAFA’s ambiguous jurisdictional structure. Another evolving jurisdictional issue is the federal court’s authority to retain jurisdiction post-removal. Courts still wrestle with the effect of post-removal events such as denial of class certification or loss of diversity on continued federal court jurisdiction. While several recent cases more firmly establish continued post-removal federal court jurisdiction, this issue is far from settled.

This program will provide class action litigators with an examination of the latest case law developments in CAFA removal and remand, analyze continued jurisdictional ambiguities and pitfalls, and offer litigation strategies for navigating these ambiguities. The panel will offer perspectives and guidance on these and other critical questions: How are the courts resolving ambiguities in CAFA’s amount-in-controversy requirements for federal court jurisdiction? Do the federal courts retain jurisdiction even after class certification is denied or diversity is destroyed? What post-removal events or circumstances can result in a remand to state court?

The panel presentation will be followed by a  live question and answer session.

For more information and to register, see the Strafford Publications website.

Greenberger involved would-be class action claims against an insurer for the alleged practice of not paying to have vehicles restored to their pre-loss condition, as required under its policies.  The district court had granted the defendant’s motion for summary judgment before reaching a decision on class certification.  The Seventh Circuit affirmed.  The panel’s decision ostensibly rests on the holdings of earlier cases and doesn’t pretend to make new law.  However, the number of different issues addressed may make the case a common citation in future class certification response briefs, especially in insurance class actions in Illinois and the Seventh Circuit, but potentially elsewhere as well.  The holdings included:

• Jurisdiction under the Class Action Fairness Act of 2005 (“CAFA”) attaches to a class action complaint even if a class is never certified.  Slip op. at 5-6 (relying on Cunningham Charter Corp. v. Learjet, Inc., 592 F.3d 805, 806 (7th Cir. 2010)).
• An insured cannot succeed on a breach of contract claim against his insurer for allegedly failing to bring a vehicle to a pre-loss condition if the vehicle is not available to be examined, because the insured cannot prove either a breach of the contract (by showing that the vehicle was not repaired to its pre-loss condition) or damages (by establishing the difference in value between the vehicle as repaired and the vehicle in its pre-loss condition).  Slip op. at 6-11 (relying on Avery v. State Farm Mutual Automobile Insurance Co., 835 N.E.2d 801 (Ill. 2005)).
• A plaintiff cannot prevail on a consumer fraud or common law fraud claim if the fraud claim is based on the same predicate facts as a claim for breach of contract.  Slip op. at 11-16 (also relying on Avery).
• In Illinois, no fiduciary duty exists between insurer and insured as a matter of law, unless the plaintiff can prove by clear and convincing evidence that special circumstances existed such that the insured placed trust or confidence in the insurer.  Slip op. at 16-17 (citing Fichtel v. Bd. of Dirs. of River Shore of Naperville Condo. Ass’n, 907 N.E.2d 903 (Ill. App. Ct. 2009); Martin v. State Farm Mut. Ins. Co., 808 N.E.2d 47 (Ill. App. Ct. 2004)).

“Subsequent reflection has led us to conclude that our interpretation was incorrect. Specifically, CAFA’s text does not require at least one plaintiff in a class action to meet the amount in controversy requirement of 28 U.S.C. § 1332(a). Accordingly, we construe both parties’ petitions for rehearing en banc to include petitions for panel rehearing, vacate our earlier opinion, and replace it with this one.” Cappuccitti v. DirecTV, — F.3d —, 2010 WL 4027719 (11^th Cir. Oct. 15, 2010) (cites omitted).

 This decision should quiet the near universal criticism that has been clanging through the echo chamber of the class action bar since the appellate court’s July 19 ruling. The July opinion focused on the jurisdictional thresholds of the Class Action Fairness Act (CAFA).  The summer Cappuccitti decision was controversial because it seemingly invented a new requirement for federal courts to exercise original jurisdiction over class actions filed under CAFA.  The opinion set an unprecedented threshold that at least one plaintiff in a CAFA class action must allege an amount in controversy of at least $75,000.  Critics of the ruling observed that such a requirement would effectively end the filing of CAFA class actions in the Eleventh Circuit.  The CAFA law blog has extensively covered the potential impacts.  But never mind, that’s all in the past.  After the most recent ruling, the CAFA doors are now back open.

For a good synopsis of the decision and its potential impact in the class action removal context, read Karen P. Palmersheim’s article at www.lexology.com entitled Supreme Court’s decision opens doors to lawsuits under the federal Class Action Fairness Act.

Top Stories that Are Hopefully Not Indicative of Class Action Trends

Overlawyered reports on a courtroom fistfight between two lawyers pursuing rival class action suits against the same defendant:

http://overlawyered.com/2008/12/new-orleans-brawl-between-class-action-lawyers/

Class Action Decisions

How Appealing summarizes and links to an opinion by the Fourth Circuit Court of Appeals decision holding that a class action counterclaim defendant could not remove to federal court under the Class Action Fairness Act (CAFA) (as an aside, yours truly was on the losing end of the Ninth Circuit decision relied upon by the majority.  Sorry Mayer Brown et al. for helping to create bad precedent):

http://howappealing.law.com/121708.html#031686

Securities Docket offers a synopsis of a Fourth Circuit Court of Appeals decision upholding the dismissal of a securities fraud class action under the “strong inference” of wrongful intent standard required by the Supreme Court’s decision in Tellabs:

http://www.securitiesdocket.com/2008/12/15/fourth-circuit-affirms-dismissal-of-securities-class-action-against-inspire-pharmaceuticals/

Online Dating Newsletter reports on a federal court’s decision denying a motion for summary judgment filed by an online dating service defending claims that it continued to charge fees after members had canceled their service:

http://www.onlinedatingnewsletter.com/datingnews/truecomclassactionlawsuit/

Corporate Legal Times has a story about an an Iowa federal court’s class certification decision, with the self-explanatory headline “Class Action Status Doesn’t Stick to Teflon Lawsuits” …

http://www.cltmag.com/class-action-status-doesnt-stick-to-teflon-lawsuits.html

… and more on the same case from InjuryBoard.com and South Florida Lawyers:

http://www.injuryboard.com/national-news/teflon-lawsuits-won39t-become-class-action.aspx?googleid=253196

http://southfloridalawyers.blogspot.com/2008/12/teflon-class-action-up-in-flames.html

Wage Law reviews a recent California appellate decision addressing the standards for what evidence a trial court must consider in evaluating the fairness of a class action settlement: 

http://www.californiawagelaw.com/wage_law/2008/12/kullar-v-foot-locker—reversal-of-class-action-settlement-approval.html

The Race to the Bottom analyzes a New York court’s grant of summary judgment in a shareholder class action alleging that a forced bank merger constituted a breach of fiduciary duty:

http://www.theracetothebottom.org/home/bear-stearns-the-shotgun-merger-and-fiduciary-duties.html

Class Action Trends

As always, for the latest developments in subprime crisis litigation, see the D&O Diary…

http://www.dandodiary.com/2008/12/articles/subprime-litigation/subprime-securities-suit-against-bank-dismissed-without-prejudice/

… and for more commentary and analysis on trends in subprime mortgage litigation, see this December 3 entry from Mortgage Meltdown:

http://mortgagemeltdown.typepad.com/my_weblog/2008/12/securities-fraud-lawsuit-against-countrywide.html

Class Action News

The Complex Litigatorreports on upcoming administrative changes in the Los Angeles County Complex Litigation Court (Btw, congrats to Scott Leviant on his new position with Initiative Legal Group LLP):

http://www.thecomplexlitigator.com/2008/12/management-changes-coming-to-complex-litigation-court-in-los-angeles-county.html

The Memphis Daily Newsreports on developments in a potential class action lawsuit being considered by the City of Memphis and Shelby County, Tennessee against lenders for alleged predatory lending practices leading to mass foreclosures in connection with subprime mortgages:

http://memphisdailynews.com/editorial/Article.aspx?id=39942

Spam Notes has an update on procedings on appeal to the Ninth Circuit Court of Appeals in a class action involving federal preemption of claims brought under the California anti-spam statute and other state laws:

http://spamnotes.com/2008/12/16/kleffman-v-vonage–no-oral-argument.aspx

Drug and Device Law provides an update on amendments to Financial Accounting Standards Advisory Counsel guidelines on what a company must disclose about securities class action and other litigation:

http://druganddevicelaw.blogspot.com/2008/12/amending-fas-5-update.html

Class Action Conferences

Class Action Defense Blog and CAFA Law Blog comment on an upcoming conference sponsored by the American Finance Institute on consumer finance class actions and litigation to be held in New York in late January:

http://classactiondefense.jmbm.com/2008/12/mark_your_calendars_class_acti_6.html

http://www.cafalawblog.com/-events-making-your-list-checking-it-twice-if-so-make-sure-this-outstanding-seminar-is-on-it.html

Class Action Commentary

www.InvestmentFraudPRO argues that FINRA securities fraud arbitration can often be a better approach for victims of investment fraud to recoup their losses than class action lawsuits:

http://investmentfraudpro.blogspot.com/2008/12/finra-securities-arbitration-or-class.html

FP Legal Post predicts that class actions against cell phone companies based on concealment of studies linking cell technology to brain cancer may be the next wave of litigation in Canada:

http://network.nationalpost.com/np/blogs/legalpost/archive/2008/12/15/cellphones-newest-bonanza-for-class-action-bar.aspx

Mass Tort Litigation Blog discusses a recent BNA Reports commentary on CAFA’s Local Class Action Exception:

http://lawprofessors.typepad.com/mass_tort_litigation/2008/12/cafas-local-cla.html

Class Action-Related Post of the Week

Kudos to the folks at Drug and Device Law Blog on their excellent review, with the help of O’Melveny’s John Beisner, of the most recent draft of ALI’s Principles of Aggregate Litigation:

http://druganddevicelaw.blogspot.com/2008/12/umm-what-he-said.html

Class Action Decisions

Securities Docket summarizes and links to the latest decision from the U.S. District Court for the Southern District of New York discussing federal jurisdiction in a “foreign cubed” securities class action:

http://www.securitiesdocket.com/2008/12/01/sdny-dismisses-vodafone-securities-class-action-for-lack-of-subject-matter-jurisdiction/

Class Action Defense Blog discusses a pair of Federal district court decisions in class actions involving claims under the Fair Debt Collection Practices Act (FDCPA):

http://classactiondefense.jmbm.com/2008/12/class_action_defense_cases_ste.html

http://classactiondefense.jmbm.com/2008/12/fdcpa_class_action_defense_cas_11.html

North Carolina Business Litigation Report discusses a North Carolina federal court’s decision denying a motion for a preliminary injunction and discusses other developments in a class action seeking to enjoin a high profile bank merger:

http://www.ncbusinesslitigationreport.com/2008/12/articles/class-actions/nc-business-court-denies-motion-for-preliminary-injunction-in-wachoviawells-fargo-merger-case/

The Complex Litigator offers a synopsis of a California Supreme Court decision addressing the availability of punitive damages in wage and hour class actions:

http://www.thecomplexlitigator.com/2008/12/for-the-moment-california-law-is-clear-no-punitive-damages-for-violations-of-labor-code-provisions-r.html

The UCL Practitioner provides a link to the latest in California Court of Appeal decisions addressing the injury-in-fact requirement for standing under the Unfair Competition Law (UCL) after Proposition 64:

http://www.uclpractitioner.com/2008/12/new-ucl-standing-decision-troyk-v-farmers-group-inc.html

Wage Law offers a synopsis of a California decision discussing the impact of practical difficulties in ascertaining class membership on the viability of class certification in a wage and hour case:

http://www.californiawagelaw.com/wage_law/2008/12/harper-v-24-hour-fitness.html

Class Action News

Spam Notes discusses and provides a link to the complaint in a putative class action seeking liability against an Internet company for allegedly violating the Washington State gift card law by removing credits from customers’ “stored value accounts” due to inactivity:

http://spamnotes.com/2008/12/08/class-action-filed-against-skype-for-wa-gift-card-violations.aspx

WDSU.com reports on a class action against the City of New Orleans challenging the constitutionality of using automated cameras to catch drivers who run red lights:

http://www.wdsu.com/news/18215832/detail.html?rss=no&psp=news

Mercury News discusses an order by a California federal judge certifying a class in a case against a collection firm for alleged unlawful threats in bad check notices to debtors:

http://www.mercurynews.com/localnewsheadlines/ci_11139841?source=rss

The Wall Street Journal Law Blog provides details on an unsealed indictment of defendants accused of participating a conspiracy to collect class action settlement proceeds using forged documents and fake companies.  (See previous ClassActionBlawg commentary on the story here):

http://blogs.wsj.com/law/2008/12/03/class-action-fraud-alive-and-well-philly-prosecutors-say/

Class Action Scholarship

Mass Tort Litigation offers links variety of interesting scholarly articles on class action-related issues, including this abstract of an article by Tanya Monestier of Queen’s University entitled Personal Jurisdiction Over Non-Resident Plaintiffs in Multi-Jurisdictional Class Actions: Have We Gone Down the Wrong Road?

http://lawprofessors.typepad.com/mass_tort_litigation/

Class Action Trends

The D&O Diary discusses the “new wave” in subprime credit crisis litigation:

http://www.dandodiary.com/2008/12/articles/subprime-litigation/the-evolving-credit-crisis-litigation-wave/

Class Action Commentary

Point of Law responds to a commentary on the Cato Institute’s Cato-at-Liberty blog arguing that the Class Action Fairness Act (CAFA) is contrary to the originalist interpretation of the United States Constitution.  (See ClassActionBlawg reaction to the same commentary here):

http://www.pointoflaw.com/archives/2008/12/moller-constitu.php

Overlawyered discusses the reasons for the race to the courthouse shortly after a tragic event like the Black Friday shopper trampling:

http://overlawyered.com/2008/12/5-minute-after-suits-and-the-wal-mart-trampling/

A climate change skeptic responds to a researcher’s claims that he can calculate the difference between damage caused by a storm and the damage that would have been caused but for global warming, on The Air Vent:

http://noconsensus.wordpress.com/2008/12/10/class-action-suits-to-stop-global-warming/

International Class Action Law

Jurist reports on the rejection of a collective action brought in China by alleged victims of the recent tainted baby formula scandal.  (See previous ClassActionBlawg entry here):

http://jurist.law.pitt.edu/paperchase/2008/12/china-court-rejects-tainted-milk-class.php

Canadian Tax Resource discusses a bulletin issued by the Canadian Revenue Agency describing the department’s views on the tax implications of a Canadian securities class action settlement:

http://blog.taxresource.ca/cra-provides-direction-on-the-nortel-class-action-settlement/

Financial Post discusses the possibility of cross-border class action litigation by U.S. plaintiffs’ firms following the expected failure of a leveraged buyout of a Canadian company:

http://www.financialpost.com/story.html?id=1057781

The Court briefs a recent decision by the Supreme Court of Canada upholding the imposition of strict liability against a cement company in a public nuisance class action.  (See earlier ClassActionBlawg commentary on the case here):

http://www.thecourt.ca/2008/12/10/recognizing-no-fault-civil-liability-in-respect-of-neighbourhood-disturbances-in-quebec-civil-law/

Oh, and by the way, the title of this week’s CABWR is not a typo.  I just thought I’d make a belated pitch for that open Illinois Senate Seat.

The argument mirrors one made by Florida personal injury lawyer David J. Sales, who, in an October article, remarked that CAFA is a “decidedly anti-federalist” measure that erodes States’ judicial powers in favor of greater federal jurisdiction.  (See ClassActionBlawg Commentary here).  

Could it be that the class action case of The American Trial Lawyers Association and The Federalist Society v. United States is just around the bend?