The UCL Practitioner

Seventh Circuit holds that TILA rescission cases may not proceed as class actions: Andrews v. Chevy Chase Bank

In Andrews v. Chevy Chase Bank, ___ F.3d ___ (7th Cir. Sept. 24, 2008), the Seventh Circuit held that claims for rescission (as distinct from damages) under the Truth in Lending Act (15 U.S.C. §§ 1601 et seq.) may not be pursued on a classwide basis because "the rescission remedy prescribed by TILA is procedurally and substantively incompatible with the class action device." Slip op. at 8. One judge dissented. Id. at 16-18.

One of the authorities on which the court relied in reaching this conclusion is LaLiberte v. Pacific Mercantile Bank, 147 Cal.App.4th 1 (2007), in which the California Court of Appeal held that "rescission under TILA is a personal remedy not suitable for class action treatment." Id. at 10.

Today's National Law Journal reports that "Mortgage Lenders Fight Off Rescission Class Action in 7th Circuit."

New CLRA attorneys' fees decision: Shisler v. Sanfer Sports Cars, Inc.

In Shisler v. Sanfer Sports Cars, Inc., ___ Cal.App.4th ___ (Sept. 25, 2008), the Court of Appeal (Sixth Appellate District) reaffirmed the rule that the CLRA authorizes attorneys' fees to a prevailing defendant only upon proof of the plaintiff's subjective bad faith. Slip op. at 8 (citing Corbett v. Hayward Dodge, Inc., 119 Cal.App.4th 915, 924 (2004)). (Here is my original blog post on Corbett.)

Massachusetts Supreme Judicial Court reverses class decertification in meal and rest period case: Salvas v. Wal-Mart Stores, Inc.

In Salvas v. Wal-Mart Stores, Inc., ___ N.E.2d ___, 2008 WL 4291637 (Mass. Sept. 23, 2008), the Supreme Judicial Court of Massachusetts reversed an order decertifying a class of current and former Wal-Mart hourly workers who claimed that Wal-Mart failed to provide meal period and rest breaks as required by law. The Court remanded the case "for entry of an order certifying the class and further proceedings consistent with this opinion." Id. at *20. [Link to opinion courtesy of Legal Blog Watch.]

Yesterday's National Law Journal reported that "Mass. High Court Orders Certification of Wal-Mart Meal Breaks Class Action."

The UCL and the "business judgment rule": Hill v. State Farm Mutual Auto Ins. Co.

A lengthy opinion on the "business judgment rule" concludes with this paragraph:

Plaintiffs asserted three theories of liability: breach of contract, breach of the covenant of good faith and fair dealing, and violation of the Unfair Competition Act. The claim for breach of contract (duty of care) is precluded by the business judgment rule. The covenant claim is not an independent cause of action under Illinois law. (See State Farm II, supra, 114 Cal.App.4th at pp. 451–453.) And liability imposed by the California Unfair Competition Act requires the commission of an “unlawful, unfair or fraudulent business act or practice.” (Bus. & Prof. Code, § 17200; see Farmers Ins. Exchange v. Superior Court (1992) 2 Cal.4th 377, 383.) State Farm did not engage in such conduct. Plaintiffs are therefore not entitled to an accounting. The trial court properly granted summary judgment.

Hill v. State Farm Mutual Auto Ins. Co., ___ Cal.App.4th ___ (Sept. 19, 2008) (Second Appellate District, Division Three) (slip op. at 59).

Seeking successful depublication requests

I am always trying to figure out what types of arguments the California Supreme Court finds persuasive in deciding whether to depublish a Court of Appeal opinion under Rule of Court 8.1125. As we all know, depublication orders are quite rare. In fact, according to the 2008 Court Statistics Report - Statewide Caseload Trends, 1997-1998 to 2006-2007, recently published by the California Judicial Council, the Supreme Court granted only 19 depublication requests in 2007. (I suspect that most of these were in criminal cases, although I do not have statistics on that point.)

To that end, I am collecting copies of successful depublication requests. I've created a list of them over at my other blog, The Appellate Practitioner. So far, I only have two. If you have a copy of a successful depublication request that you are willing to share, please forward it to me at [email protected] and I will add it to the list. Then we can all review them and try to read the Supreme Court's tea leaves.

[Cross-posted to The Appellate Practitioner]

New class certification decision: Lee v. Dynamex, Inc.

In Lee v. Dynamex, Inc., ___ Cal.App.4th ___ (Aug. 26, 2008; pub. ord. Sept. 17, 2008), the Court of Appeal (Second Appellate District, Division Seven) reversed an order denying class certification because the trial court had refused to permit discovery of class member contact information under Pioneer Electronics:

The trial court was plainly disturbed by Lee’s failure to produce additional evidence to support a finding of community of interest among potential class members in terms of the predominance of common questions of law or fact, the typicality of Lee’s claims or the adequacy of his representation as the sole named plaintiff. Ordinarily, we would defer to a trial court’s exercise of discretion on these issues; but, in light of the trial court’s discovery order precluding identification of potential class members before certification, we conclude Lee was not provided with an adequate opportunity to meet his burden and, therefore, reverse the denial of the class certification motion with directions to permit discovery to proceed and then to conduct a new class certification hearing.

Slip op. at 11. The opinion also contains an interesting discussion of the "ascertainability" prong of certification. Id. at 7-10.

UPDATE: The Complex Litigator has a more detailed post on Lee.

Washington Supreme Court finds class action ban unconscionable: McKee v. AT&T Corp.

In McKee v. AT&T Corp., ___ P.3d ___ (Wash. Aug. 28, 2008), the Supreme Court of Washington refused to enforce a no-class-action arbitration clause, finding it substantively unconscionable. A tidbit: "Courts will not be easily deceived by attempts to unilaterally strip away consumer protections and remedies by efforts to cloak the waiver of important rights under an arbitration clause." Slip op. at 35; see also Scott v. Cingular Wireless, 161 P.3d 1000 (Wash. 2007). [Via ClassActionBlawg.com]

Vasquez oral argument

The docket confirms that on Wednesday, September 3, 2008, the Supreme Court heard oral argument in Vasquez v. State of California, no. S143710, which raises the following issue:

Does the rule that, in order to receive attorney fees under Code of Civil Procedure section 1021.5, the plaintiff must first reasonably attempt to settle the matter short of litigation, apply to this case? (See Graham v. DaimlerChrysler Corp. (2004) 34 Cal.4th 553, 557; Grimsley v. Board of Supervisors (1985) 169 Cal.App.3d 960, 966-967.).

I was out of town on the day of the argument, and I have received no reports on it. We can expect an opinion to be handed down no later than December 1, 2008.

"Class Action Settlements: The Basics and New Developments" - September 24, 2008

On Wednesday, September 24, 2008 at noon, the Litigation Section of the Barristers Club of the Bar Association of San Francisco will present a one-hour program called "Class Action Settlements: The Basics and New Developments." The speakers are Kelly M. Dermody of Lieff Cabraser Heimann & Bernstein and Malcolm Heinicke of Munger Tolles & Olson. Click here for more information and to register.

Blog hiatus until Sept. 15

Happy Labor Day! The blog will be on hiatus until the week of September 15. Please continue to email me ([email protected]) with decisions, news, comments, questions, etc. For anyone who is interested, don't forget that the Supreme Court will be hearing oral argument on Wednesday, September 3, 2008 at 9:00 a.m. in the Vasquez attorneys' fees case. I would be happy to post anyone's notes on the argument (with or without attribution).