Today’s case, Espenscheid v. DirectSat USA, LLC (7th Cir. 2012) is a little tricky, procedurally. Three plaintiffs filed an FLSA class action (and collective action) against DirectSat USA, LLC. The Northern District of Illinois originally certified a class, but then decertified it, at which point the plaintiffs each settled on an individual basis.

Now, here’s the tricky part. Having settled the case, they appealed the decertification.

But wait, you ask. How could they do that? They settled their claims!

The plaintiffs’ response: the settlement agreement reserved their right to appeal. Of course, they would still face a standing problem. Since Continue Reading

 One of the tough things about defending class actions is the fact that discovery is asymmetrical. Some plaintiffs use the fact that corporate defendants generate huge numbers of documents to inflict significant costs on the defense by serving large numbers of marginal relevance to any class claims.

So, when plaintiffs withhold actually relevant information, that tends to add insult to injury.

That’s what happened in Barnes v. Equinox Group, 2012 U.S. Dist. LEXIS 82688 (N.D. Cal. 2012). During the discovery phase of Barnes, the defendant took nine depositions: those of the two named plaintiffs, the plaintiffs’ expert, and … Continue Reading

 I’ve written before about the uses to which defense counsel can put a well-taken named plaintiff deposition. And, once again, an opinion has come along that showcases just how important the named plaintiff deposition is as a weapon to defeat class certification.

The case, Burns v. Bayer Corp., 2012 U.S. Dist. LEXIS 33183 (S.D. Ill. Mar. 13, 2012), is part of the Yaz multi-district litigation (which previously yielded an extremely useful motion to strike opinion). Yaz is an oral contraceptive, and the FDA has also approved it for use in treating acne and premenstrual dysphoric disorder. It … Continue Reading

As you may know, most bloggers have some kind of service that provides a statistical analysis of their site. In addition to telling us how many of you visit, and what you read, and whether you come back, these services also tell us what searches bring (some of) you here. And, over the last year and change, there are certain searches that have recurred enough that I consider them "frequently asked questions." Here are four, with brief answers:

What is the definition of "bet the company" litigation? This is–at least to me–a surprisingly common question. My own … Continue Reading

Defendants face a dilemma when dealing with absent class members. On the one hand, they often have valuable information about a case, either as sources for variations that would defeat certification or as trial witnesses. On the other hand, plaintiffs will vigorously oppose any contact with absent class members, even if it is for a proper business purpose (like, say, responding to customer inquiries), as an improper attempt to either influence or harass members of the proposed class. So how should defendants handle taking discovery of absent class members?

Carefully. Today’s case, Antoninetti v. Chipotle, Inc., 2011 U.S. … Continue Reading

I’ve talked before about the problem of circularity in securities class actions. Briefly put:

[A] securities class action takes money from the firm, and pays it to the shareholders, minus costs and attorneys’ fees. The hitch is that the firm is owned by the shareholders, which means that the attorneys have just taken money from the shareholders’ property and handed it to them directly, while taking a one-third cut for themselves.

At the time, I pointed out that while the circularity critique may suggest that securities class-acton plaintiffs are inadequate the moment they bring a lawsuit, courts were unlikely … Continue Reading

 In the last few years, statutory non-disclosure have become more common among class-action filings. They allow the plaintiffs to assert fraud-like claims that can arouse public (or judicial) sympathy, without necessarily having to worry about proving individualized reliance the way they would if they had alleged a common-law fraud claim.

A recent case, Noel v. Hudd Distribution Services, Inc., 2011 U.S. Dist. LEXIS 21480 (D.S.C. March 2, 2011), provides one tactical roadmap for defending against these kinds of claims. In Noel, the plaintiffs brought claims against a truck leasing company, claiming that it charged them for insurance premiums and … Continue Reading

 Confidential Witness Confidential

The confidential witness is the bane of the securities defendant’s existence. While there may be some legitimate reasons to keep a witness confidential, the words "Confidential Witness #1" can also hide problems with the plaintiffs’ case, like sloppy research or outright misrepresentation.

How do we know this is the case? Well, many defendants have "Confidential" horror stories, but more importantly, these problems are sometimes revealed in the case proper. Case in point:City of Livonia Employees’ Retirement System v. Boeing Co.  As the Northern District of Illinois puts it in its opinion, the case reads like an … Continue Reading

King Architectural Metals manufactured metal building components, which it needed to sell. It made the mistake of faxing an advertisement to CE Design. It probably seemed like a good idea at the time. CE Design was a small, Chicago-area civil engineering firm, and it had checked a box in the Blue Book of Building and Construction (a directory of building-industry firms) that indicated it was OK to contact it with advertisements. But it also had a sideline in Telephone Consumer Protection Act class actions. It filed at least 150 of them, and its president had testified in at least 20 … Continue Reading

 Depositions are one of the most important parts of class discovery. (And for many lawyers, they’re also the most fun.) Since so few class actions go to trial, a deposition of a named plaintiff is when the defense lawyer finally gets to act like a lawyer on TV, confronting the named plaintiff with evidence, poking holes in poorly-constructed stories or arguments. But how much of the named plaintiff deposition is mere theatrics and how much is useful for actually defeating certification? For an excellent example of well-deployed depositions, let’s look at a recent FLSA case: Lugo v. Farmer’s Pride, Continue Reading