The UCL Practitioner

Upcoming MCLE program on Wal-Mart v. Dukes and AT&T Mobility v. Concepcion

On July 19, 2011 at 5:30-7:30 p.m., the Los Angeles County Bar Association will present "Is There Consumer Class Action Life After Concepcion? The View of the Bench and Bar About the Impact of AT&T Mobility, LLC v. Concepcion and Wal-Mart Stores, Inc. v. Dukes."  Los Angeles County Superior Court Judge William F. Highberger and Judge Anthony J. Mohr will be among the speakers. 

Cert. denied in Philip Morris v. Jackson

Per today's order list, the U.S. Supreme Court has denied cert. in Philip Morris USA, Inc. v. Jackson, no. 10-735.  This case would have presented a federal due process challenge to certain state-law class action procedures.

U.S. Supreme Court relists Philip Morris v. Jackson

On Monday, the U.S. Supreme Court relisted Philip Morris USA, Inc. v. Jackson, no. 10-735, for conference tomorrow (June 23), which means an up or down vote on cert. may be announced as early as Monday.

Yesterday (June 21), both sides filed supplemental briefs addressing Wal-Mart Stores, Inc. v. Dukes, ___ U.S. ___ (Jun. 20, 2011).  The tobacco companies' supplemental brief is here.  The plaintiffs' supplemental brief is here.   [Links via SCOTUSblog.] 

SCOTUSblog has a more detailed post on these developments.  See this blog post for more on the issues raised in the case.  This is a Louisiana state court case, so the cert. petition could test the extent to which the Justices believe that any of the principles (or, more likely, the leanings) announced in Wal-Mart may impact state-court class-action proceedings.  Nothing in Wal-Mart appears to me particularly relevant to state-court litigation, but certain Justices may have a different view. 

(As a programming note, I remain swamped in my day job, so my posting has been sparse.  While it's great to be busy with lots of cases, I hope my workload will return to normal eventually.)

BREAKING NEWS: U.S. Supreme Court hands down Wal-Mart Stores, Inc. v. Dukes

This morning, the U.S. Supreme Court handed down Wal-Mart Stores, Inc. v. Dukes, ___ U.S. ___ (Jun. 20, 2011).  The class certification order has been reversed.  More later.

More on Erica P. John Fund, Inc. v. Halliburton Co.

The Supreme Court's decision in Erica P. John Fund, Inc. v. Halliburton Co., ___ U.S. ___ (Jun. 6, 2010), handed down on Monday, is narrowly drawn.  The decision is highly relevant to securities class actions, but nothing in it can be expected to impact other types of class actions. 

The opinion did not discuss the Eisen case (or even mention it), notwithstanding the statement of issues in the cert. petition.  The Court seems to have remanded all the juicy issues back to the Fifth Circuit:

To the extent Halliburton has preserved any further arguments against class certification, they may be addressed in the first instance by the Court of Appeals on remand.

Slip op. at 9.

According to SCOTUSblog, the Court is expected to hand down additional opinions this morning.  Dukes v. Wal-Mart could be among them.

U.S. Supreme Court hands down class certification decision: Erica P. John Fund, Inc. v. Halliburton Co.

This morning, the Supreme Court handed down its decision in Erica P. John Fund, Inc. v. Halliburton Co., ___ U.S. ___ (Jun. 6, 2010).  This is a securities case, but it presented the possibility that the Supreme Court's holding would more broadly impact class action litigation. These were the issues on review as stated in the cert. petition:

(1) Whether the Fifth Circuit correctly held, in direct conflict with the Second Circuit and district courts in seven other circuits and in conflict with the principles of Basic v. Levinson, 485 U.S. 224 (1988), that plaintiffs in securities fraud actions must not only satisfy the requirements to trigger a rebuttable presumption of fraud on the market, but must also establish loss causation at class certification by a preponderance of admissible evidence without merits discovery;

(2) whether the Fifth Circuit improperly considered the merits of the underlying litigation, in violation of both Eisen v. Carlisle & Jacquelin, 417 U.S. 156 (1974), and Federal Rule of Civil Procedure 23, when it held that a plaintiff must establish loss causation to invoke the fraud-on-the-market presumption.

The unanimous opinion does not appear to cite Eisen at all.  I expect to have more later, but meanwhile, see this blog post and this blog post for further discussion of the case. 

New UCL competitor decision: Allergan, Inc. v. Athena Cosmetics,Inc.

The U.S. Court of Appeals for the Federal Circuit has handed down an opinion in a UCL competitor action.  Allergan, Inc. v. Athena Cosmetics, Inc., ___ F.3d ___ (Fed. Cir. May 24, 2011).  The case was commenced in the Central District of California, but the Federal Circuit had jurisdiction over the appeal because the case included patent claims.  Slip op. at 7.

Applying Kwikset and Clayworth, the Federal Circuit reversed the district court's order dismissing the UCL claim for lack of Prop. 64 standing: 

Here, Allergan has plainly alleged an economic injury that was the result of an unfair business practice. The unfair competition that Allergan alleges involves the defendants’ manufacture, marketing and/or sale of hair and eyelash growth products without a prescription, federal or state approval, and proper labeling in violation of federal and California laws. Allergan’s First Am. Compl. 9-14. As a result of these acts, Allergan alleges that it has “lost sales, revenue, market share, and asset value.” Id. at 14. Allergan’s complaint sufficiently alleges an injury that was caused by the defendants’ unfair business practices. Under Kwikset, this satisfies the requirements of section 17204, and therefore Allergan has standing to pursue its claim for relief under the UCL. See Kwikset, 246 P.3d at 894-95; Clayworth, 233 P.3d at 1087.

Id. at 11 (emphasis added).  The district court had erroneously applied earlier Court of Appeal opinions, such as Citizens of Humanity, holding that only a restitutionary loss could create Prop. 64 standing.  See id. at 6.  UCL competitor actions are alive and well. 

The court also rejected the defendants' novel argument that Prop. 64 created a so-called "business dealings requirement":

Proposition 64 did not add a “business dealings requirement” to standing under section 17204. The only amendment Proposition 64 made to section 17204 re-quired that a private person bringing an action pursuant to the UCL must have “suffered injury in fact and . . . lost money or property as a result of such unfair competition.” Cal. Prop. 64 § 3. Reading this amendment to encompass a business dealings requirement would contradict the plain language of the statute and improperly elevate one purpose of Proposition 64 over the language of the statute. See City of Chicago v. Envtl. Def. Fund, 511 U.S. 328, 337 (1994) (“[I]t is the statute, and not the [voter’s findings], which is the authoritative expression of the law . . . .”).

The defendants also argued that Kwikset approved of the business dealings requirement. Oral Arg. at 30:00-31:00, available at http://www.cafc.uscourts.gov/oral-argument-recordings/2010-1394/all. The crux of defendants’ argument is the introduction of Kwikset, which states that the purpose of Proposition 64 was to “eliminate standing for those who have not engaged in any business dealings with would-be defendants . . . .” 246 P.3d at 881. This argument disregards the focus of Kwikset, which held that the only requirements to establish standing under section 17204 are that (1) the plaintiff suffered an injury in fact from the loss of money or property; and (2) that this injury was caused by the defendant’s unfair business practice. Id. at 885.

Moreover, the defendants’ argument ignores that there are “innumerable ways” to show economic injury from unfair competition and that the Kwikset court did not “supply an exhaustive list of ways in which unfair competition may cause economic harm.” Id. at 886. While a direct business dealing is certainly one way in which a plaintiff could be harmed, the California courts have also recognized claims under the UCL where a direct business dealing was lacking. See, e.g., Overstock.com, Inc. v. Gradient Analytics, Inc., 151 Cal. App. 4th 688, 716 (Cal. Ct. App. 2007) (finding standing under section 17204 where plaintiff had plead that defendant’s unfair business practices—intentional dissemination of false negative reports—had “result[ed] in diminution in value of [plaintiff’s] assets and decline in its market capitalization and other vested interests”). Thus, standing under section 17204 is not restricted by a direct business dealings requirement. The only standing requirements under 17204 are those in the language of the statute and, as explained in I.B., Allergan has satisfied those requirements.

Slip op. at 12-13 (emphasis added).

Upcoming CLE programs of interest

Here are a few interesting CLE programs:

• Wednesday, June 8, 2011, 9:00 a.m. - 11:00 a.m.:  Recorder Roundtable, "In Practice: Class Action Arbitration" (focusing on the impact of Concepcion v. AT&T Mobility in California) (featuring moderator Erik Cummins and speakers Donald M. Falk of Mayer Brown, Thomas R. Kaufman of Sheppard Mullin, Cliff Palefsky of McGuinn Hillsman & Palefsky, and Jonathan E. Gertler of Chavez & Gertler)


• Thursday, June 9, 2011, 12:00 p.m. - 1:30 p.m.: Bar Association of San Francisco, Disability Rights Committee of the Equality Committee, "Anatomy of a Systemic Class Action Impact Lawsuit" (the program will cover class certification issues in Unruh Civil Rights Act class actions, such as National Federation of the Blind v. Target) (featuring Larry Paradis and Rebecca Williford of Disability Rights Advocates)


• Friday, June 17, 2011, 12:00 p.m. - 1:30 p.m.: Alameda County Bar Association, Labor and Employment Section, "PAGA for the Masses: How to Litigate under California's Private Attorney General Act PAGA claims in the wake of AT&T v. Concepcion" (featuring Cynthia Rice, Director of Litigation, Advocacy and Training at California Rural Legal Assistance)


• Tuesday, June 21, 2011, 9:30 a.m. - 10:30 a.m. (teleconference):  American Bar Association Section of Antitrust Law, Private Advertising Litigation Committee, "In the Wake of AT&T Mobility v. Concepcion: Perspectives on the Future of Class Litigation" (featuring moderator Daniel Blynn of Kelley Drye & Warren and speakers Arthur Bryant of Public Justice, Dean Harvey of Lieff Cabraser Heimann & Bernstein, and Archis Parasharami of Mayer Brown)

Also, save the date of October 27, 2011 for the 21st annual Golden State Antitrust and Unfair Competition Law Institute, sponsored by the State Bar of California, Antitrust and Unfair Competition Law Section.  I'm co-organizing the event again this year.