Turbulence ahead for airlines in price-fixing lawsuit

Last week, American Airlines, Delta, Southwest and United Continental received some unwelcome news. A federal judge denied the airlines’ motion to dismiss a class action alleging a price-fixing conspiracy. The plaintiffs allege that the airlines colluded to raise fares and reduce flight choices for travelers, in part by restricting seating capacity in their aircrafts. (The case is In re Domestic Airline Travel Antitrust Litigation, U.S. District Court, District of Columbia, No. 15-mc-01404.) In addition to the class action, The Department of Justice is conducting its own separate inquiry into the matter. 

Other Jurisdictions

When at first you don’t succeed, seek post-verdict decertification: Lessons learned from Mazzei v. The Money Store

What do you do when a court certifies a class over your objection and denies your motion for directed verdict on the critical class certification issue at trial, and a jury awards $32 million ($54 million if you count pre-judgment interest) on an individual claim worth $133.80? This was the situation the defendants faced in Mazzei v. The Money Store. What happened defied all odds. Read more >> 

Banking Industry, Mortgage Lending Industry, Pre-Certification Motions, U.S. Supreme Court

New life for the death knell? SCOTUS accepts Microsoft Corp. v. Baker

On January 15, 2016, the U.S. Supreme Court granted certiorari to review the decision of the Ninth Circuit in Baker v. Microsoft Corporation. The question presented is: “Whether a federal court of appeals has jurisdiction under both Article III and 28 U.S.C. § 1291 to review an order denying class certification after the named plaintiffs voluntarily dismiss their claims with prejudice.” Read more >>

Class Definitions, Federal Class Action Law, U.S. Supreme Court

No good deed goes unpunished: Did P.F. Chang’s prompt notice of data breach create standing to sue?

On April 14, the court released its opinion in Lewert v. P.F. Chang’s China Bistro, Inc., holding that class plaintiffs may satisfy Article III standing by alleging both an increased risk of fraudulent charges and identity theft, as well as costs incurred in mitigating a future risk of harm. Although this is the second time the Seventh Circuit has addressed standing in this context, the case expands the court’s already generous standard. It also illustrates the difficult choices faced by companies whose systems are hacked. Read more >>

Class Definitions, Data Privacy and Cyber Security, U.S. Supreme Court

Sixth Circuit clarifies CAFA removal rules in favor of defendants

On April 7, the United States Court of Appeals for the Sixth Circuit issued a decision clarifying the rules governing the timing of removal of cases to federal court under the Class Action Fairness Act (CAFA). In Graiser v. Visionworks of America, Inc., the plaintiff sued Visionworks in Ohio state court and sought to represent a consumer class, alleging that Visionworks’ “Buy One, Get One Free” promotional advertisement was misleading and in violation of Ohio’s Consumer Sales Practices Act.

Visionworks removed the case to the United States District Court for the Northern District of Ohio pursuant to CAFA, after applying the plaintiff’s “proposed damage formula” to Visionworks’ own sales data for the relevant time period, concluding that the matter in controversy exceeded $5 million. The district court remanded the case back to state court after the plaintiff argued that Visionworks was tardy in removing the case for two reasons: (1) the amended complaint had been removable (but was not timely removed by Visionworks) on diversity jurisdiction grounds, thereby precluding subsequent CAFA removal; and (2) Visionworks was in possession of its own sales data and could have ascertained CAFA removability months earlier in any event.

The appeals court rejected both bases for the remand and reversed the district court’s decision. First, the Sixth Circuit held that:

[I]n CAFA cases, the thirty-day clocks of § 1446(b) begin to run only when the defendant receives a document from the plaintiff from which the defendant can unambiguously ascertain CAFA jurisdiction. Under this bright-line rule, a defendant is not required to search its own business records or "perform an independent investigation into a plaintiff's indeterminate allegations to determine removability.

Second, the Sixth Circuit held that:

[O]nce a defendant ascertains that a case is removable under CAFA, a defendant may remove the case — within the time constraints of § 1446(b)(1) and (b)(3) discussed above — even if the case was originally removable under a different theory of federal  jurisdiction.

The holdings, on all respects favorable to class action defendants, are consistent with the decisions of other United States Courts of Appeals that have addressed the questions presented to the Sixth Circuit in the Graiser case.

Class Action Fairness Act, Federal Class Action Law, Sixth Circuit Class Action Law

Sovereign immunity in the age of continuous cyber warfare

Major cyber-attacks on a U.S. corporation or government agency are becoming more and more common. The July 9, 2015, news of 21.5 million Social Security numbers stolen from the Office of Personnel Management (OPM) is the latest example — but surely will not be the last. Although each breach spawns new litigation, this latest example is a little different.

Unlike the recent attacks on corporations like Sony Pictures and Anthem, OPM has an additional and powerful defense: sovereign immunity. Two recent class action suits filed by labor unions against OPM will put the sovereign immunity defense to the test.

For more, click here.

Data Privacy and Cyber Security