KCC Class Action Digest October 2016

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1 KCC Class Action Digest October 2016 Class Action Services KCC Class Action Services partners with counsel to deliver high-quality, cost-effective notice and settlement administration services. Recognized as Best Claims Administrator by The Recorder, The National Law Journal, and The New York Law Journal, KCC has earned the trust and confidence of our clients with our track record as a highly responsive partner. As part of our commitment to practitioners, KCC provides this resource on decisions related to class action litigation in state and federal court. In addition to industry resources, KCC offers interactive CLE-accredited courses geared toward class action settlement administration and legal notification, some of which carry Professional Responsibility CLE credit. Go to to learn more about our courses and schedule a CLE for your law firm or industry event. INSIDE THIS ISSUE Advertising pg. 1 Employment pg. 1 ERISA pg. 1 Fair Debt Collection Practices Act pg. 2 Prisoners pg. 3 Settlement Issues pg. 3 Telephone Consumer Protection Act pg. 5 This KCC Class Action Digest is provided by Patrick Ivie, Executive Vice President Class Action Services. To request a proposal, or schedule a CLE, contact Patrick at or Subscribe or request to opt-out of the KCC Class Action Digest by sending an to: hschlager@kccllc.com.

2 KCC Class Action Digest Page 1 ADVERTISING Mattresses Todd v. Tempur-Sealy Int l, Inc., No. 13-cv-04984, 2016 WL (N.D. Cal. Sept. 30, 2016) (Tigar, J.) Plaintiffs brought suit against a mattress company and certain distributors, alleging misrepresentation concerning a number of statements made about volatile chemicals in the product s manufacture. Plaintiffs sought class certification. The Court denied the request. While the Court found numerosity, typicality and adequacy satisfied, it found fault in Plaintiffs arguments for commonality and predominance. In that regard, although the Court found that a common inference could be submitted to prove an objective consumer standard that would satisfy the law of four states, it also found Plaintiffs evidence in support of the proposition that the advertisements in question caused class-wide reliance to be weak, especially where it was shown that most purchasers of the product in question were likely to test the product at a store as the next step after seeing advertisements. This convinced the Court of the likelihood that individualized inquiries into reliance would be necessary, thus defeating predominance. EMPLOYMENT Government Agency Local 589 v. Mass. Bay Transportation Authority, No. 13-cv-11455, 2016 WL (D. Mass. Sept. 20, 2016) (Burroughs, J.) Plaintiff public transit union and its employees brought FLSA suit against their employer, claiming compensation from after-work and between-shift travel. After the Court had denied certification twice, Plaintiffs brought another motion for certification. The Court denied the motion for certification, reasoning in support of its decision that the underlying facts had not changed since previous attempts at certification. The Court found that the class remained overbroad in including numerous categories of employees, such that individualized questions would predominate. Plaintiffs cited a Supreme Court case, Tyson Foods, Inc. v. Bouaphakeo, but the Court found this case in fact militated against certification, because unlike here, it involved workers performing identical job duties at issue. The Court found rather that the differences between class members in this case were so unmanageable as to preclude certification. ERISA Longo v. Trojan Horse Ltd., No. 13-cv-418, 2016 WL (E.D.N.C. Sept. 20, 2016) (Boyle, J.) Plaintiffs brought a putative class action under the Employee Retirement Income Security Act ( ERISA ) against Defendant financial companies alleging failures to make wage deposits into a 401(k) plan. Plaintiffs brought a motion to certify and both Plaintiffs and Defendant Ascensus sought summary judgment. The Court granted certification and entered summary judgment for the Plaintiffs on all claims. In support of its decision, the Court analyzed the case first under Rule 56, and found that no undisputed material facts remained, but that the dispute was a matter of law as to whether Defendant was liable for failures to collect or deposit contributions under ERISA. The Court first weighed whether Defendant was limited

3 KCC Class Action Digest Page 2 in its statutory fiduciary duty by the plan s terms, and found that under the Sixth Circuit s decision in Best v. Cyrus, a trustee s specific duty under ERISA came before any plan s limitations. The Court then asked whether this duty was breached, and found that (1) the deposits were Plan assets subject to the fiduciary duty; (2) an ERISA trustee must use reasonable diligence to locate and control trust property, and Defendant did not do so; (3) a breaching ERISA fiduciary carries a burden to show its actions were the same of a typical prudent fiduciary, which Defendant failed to do by neglecting to investigate or consider collection actions; (4) that a breaching ERISA fiduciary is liable for another fiduciary s breach if enabling that breach, and Defendant s inaction here enabled Defendant Trojan Horse s breach; and (5) Plaintiff s claims are not barred by the Service Contract Act or a prior default judgment, because the assets were Plan assets and Defendant was not a defendant in the prior judgment. Looking next to class certification, the Court analyzed the motion under Rule 23, finding that numerosity was established by virtue of there being over 1,000 class members. For commonality, the Court found clear common questions of law and fact among the current and former employees participating in the Plan and suffering the same breach, regardless of individual damages as a separable issue. In terms of typicality, the Court found that it too was met on the same basis. For adequacy, the Court found the Plaintiffs were adequate for the class and counsel was qualified. Looking then to Rule 23(b)(1), the Court asked whether separate actions would create prejudice for the defendants or the class members, and found that this case was equal to other ERISA cases for breach of trustee duty where certification was deemed appropriate, and therefore found the elements satisfied. FAIR DEBT COLLECTION PRACTICES ACT McCurdy v. Professional Credit Service, No. 15-cv-01498, 2016 WL (D. Or. Oct. 3, 2016) (Aiken, J.) Plaintiff brought suit alleging violations of the Fair Debt Collection Practices Act ( FDCPA ) by virtue of receipt of a debt collection letter misrepresenting debtors legal rights, and sought class certification. The Court granted the motion, reasoning in support of its decision that despite Defendant s contention that Plaintiff was inadequate as a class representative because of a failure to dispute that the debt in question was owed, such a fact, if true, had no bearing on Plaintiff s fitness as a class representative, nor on the alleged FDCPA violations or damages questions at issue. The Court also found counsel to be well-qualified. In terms of superiority, Defendant argued that Plaintiff had narrowed the class to avoid limiting class members awards under the statutory damages cap, which Defendant claimed would create subclasses that would circumvent the purpose of the statute and result in more litigation. The Court rejected that argument, citing the Seventh Circuit s decision in Mace v. Van Ru Credit Corp. as representative of the proper reasoning to apply in this case, namely that the Court would not deny certification simply based on the possibility that someone else might bring another class action. The Court thus found the class action to be superior in this case, since the individual damage awards were low, the likelihood of individual suits was low, and no parallel litigation was known to exist. For numerosity, the Court found 17,000 members sufficient, and similarly found commonality, typicality, and predominance satisfied based on the fact that all the claims at issue (1) were common to all class members; (2) involved Defendant s policy of sending letters to the class as a whole; and (3) themselves dealt solely with the letter text, thereby meeting all three elements.

4 KCC Class Action Digest Page 3 PRISONERS Disability Law Center v. Utah, No. 15-cv-00645, 2016 WL (D. Utah Sept. 27, 2016) (Shelby, J.) Plaintiffs, incompetent detainees, brought a putative class action under 42 USC 1983 against various government organizations, seeking declarative and injunctive relief and alleging violations of constitutional rights by virtue of lengthy delays in transferring them into treatment. After Defendants motion to dismiss was denied, Plaintiffs moved to certify the class. The Court granted the request, reasoning in support of its decision first that numerosity was satisfied on grounds that the class exceeded 50 individuals, and would include future class members as well. In terms of commonality, the Court found that the class shared a common question in terms of whether Defendants treatment of them pursuant to custodial policies constituted violations of substantive due process. In terms of typicality, the Court found that Plaintiffs and the class asserted the same interest and injury in the same legal and remedial theory, and denied Defendants argument that individualized care plans would preclude certification as to claims based on the overall policy of mistreatment. Adequacy was also satisfied. The Court looked next to Rule 23(b)(2), and considered whether Defendants conduct applied to all class members, finding that a lack of room at the facilities in question was sufficient to show that it did. The Court then looked at whether the injunctive relief sought was appropriate for the class as a whole, and found that class members shared similar injuries which could be remedied through the injunction in the same way. SETTLEMENT ISSUES Notice Adequacy Good v. American Water Works Co., Inc., No. 14-cv-01374, 2016 WL (S.D. W.Va. Sept. 30, 2016) (Copenhaver, J.) Plaintiffs brought suit against water companies after a chemical spill and subsequent water service interruption occurred. After the Court approved a class action settlement, including notice to the class, multiple intervenors challenged the adequacy of the notice, seeking additional notice and the extension of the opt-out period. The Court denied the intervenors requests, and ordered an additional 10 days for the movants to file their opt-out notice. Reasoning in support of its ruling, the Court agreed with Plaintiffs that the intervenors should be treated as non-parties, as no specific interest would be advanced by allowing them to join the case, particularly in light of the fact that the class representatives were adequate. The Court did however review adequacy of class notice under Rule 23, considering intervenors argument, supported by a purported notice expert, that the notice campaign did not reach an appropriate amount of class members, and rejecting that contention, reasoning that the purported notice expert had misapprehended the proper calculation of reach to the class in this matter. The Court rejected intervenors argument that the notice was inadequate, finding that the settling parties use of every single address that could be identified to be appropriate. The Court also looked at a phone poll produced by the intervenors as evidence of inadequate notice, and found that the poll s methodology was not credible due to statistical flaws and a failure to consider alternate forms of notice as more practicable, and further that such post-notice analyses were not supported by precedent as a valid objection to whether an approved notice plan satisfied the applicable legal standard. While the intervenors also argued that the notice was not distinguishable from junk mail, the Court found that the notice mailers were clearly marked and therefore distinguishable from junk mail. The Court also recognized the utility of the Federal Judicial Center s checklist on notice, but noted that while it sets forth best practices, it

5 KCC Class Action Digest Page 4 does not supplant the legal requirements of Rule 23. Moreover, the Court noted that the notice at issue here conformed to many of the checklist s recommendations. In terms of notice content, the Court also found that the cases cited by intervenors did not help their argument, nor did their proposed additions improve clarity of the notice, but instead simply added minutiae, making the notice more confusing. Telephone Consumer Protection Act / Incentive Award Vasco v. Power Home Remodeling Group LLC, No. 15-cv-4623, 2016 WL (E.D. Pa. Oct. 12, 2016) (Kearney, J.) Plaintiff brought suit under the Telephone Consumer Protection Act (TCPA) alleging that 21 unsolicited calls were made to his phone number. After a settlement was reached, the parties sought preliminary approval. The Court approved the settlement, including the fee and cost requests, but reduced the requested incentive award. In reviewing the reasonableness of the proposed settlement, the Court found that a presumption of fairness existed because the settlement was the product of a voluntary mediation after informal discovery and full legal analysis by the parties. The Court then reviewed the settlement under the factors set forth in Third Circuit precedent. There, the Court found that the circumstances weighed in favor of settlement due to the complexity of the litigation, class support, the progress of the litigation, the risks of proving liability and damages, the risk of maintaining the class action, the value of the settlement over a judgment, and the value of recovery given the risk. The Court further found that the circumstances favored settlement on grounds of the maturity of the issues at stake, the lack of additional claims in the case, the negative result of what claimants would have received in costs otherwise, and the availability of a right to opt out. Finally, under the factors in In Re Baby Products Antitrust Litigation, the Court found the settlement weighed in their favor due to the lack of difference between individual awards and class awards, the fairness of the award and claims process compared to other TCPA cases, and the propriety of the cy pres award to dispose of the de minimis remainder amount. The Court then considered arguments posed by objectors to the settlement, first finding that two of the objectors arguments were unavailing due to their having opted out of the settlement, and therefore depriving themselves of standing to object. Two other objectors argued that the lack of notice on the settlement website rendered the notice inadequate, which the Court rejected, reasoning that the same was theoretically true with respect to undeliverable mailings, and did not render the settlement inappropriate. The objectors also challenged the cy pres award as a conflict of interest, a position the Court rejected, finding that a gift to legal aid organizations was not inherently a conflict of interest benefiting class counsel. The objectors took issue with the settlement amount, which the Court found fair as ruled above. The Court then looked at the terms of release, and found them likely to deter future litigation, except with respect to the provision of a broad release of all claims whatsoever, to which the Court noted that this release term only pertained to the Plaintiff individually, not the class. The Court then looked at the attorney fee and cost amounts, and found the settlement award was not so high as to necessitate a reduction of the 25% percentage attorney fee. The Court also found the costs cap at $20,000 was below the actual cost amounts, and therefore acceptable. The Court found that the approval of the percentage method was within its discretion, and was fair given counsel s skill and efficiency, risk ndertaken, and time and value provided. The Court found further that this calculation compared well when checked against the lodestar method. Finally, the Court found that the proposed incentive award of $5,000 to the named plaintiff was excessive in light of Plaintiff s lack of participation in hearings and depositions, and reduced the award to $3,000.

6 KCC Class Action Digest Page 5 TELEPHONE CONSUMER PROTECTION ACT Faxes Physicians Healthsource, Inc. v. A-S Medication Solutions, LLC, No. 12-cv-05105, 2016 WL (N.D. Ill. Sept. 27, 2016) (Gottschall, J.) Fax recipient brought suit against Defendants for sending unsolicited faxes, alleging violation of the Telephone Consumer Protection Act. Plaintiff sought class certification. The Court granted the motion. Reasoning in support of its decision, the Court first considered ascertainability, finding that the class was defined by objective characteristics and specific records indicating 11,422 received faxes being sent, and was not overbroad. For numerosity, the Court found the number of transmissions documented was sufficient. For commonality, the Court found that a variety of common questions could be answered by common evidence. The Court found typicality was also met by the Plaintiff s receipt of the same fax as the class, and the same legal theory for recovery. For adequacy, the Court found no reason to doubt Plaintiff s adequacy of representation in sharing the same claims as the class, nor of counsel. Looking next to Rule 23(b)(3) predominance, the Court considered Defendants argument as to individual questions of fact, specifically in terms of trying to prove consent was given to another party, who then transferred it to Defendants, finding the issue to be a common one that could be settled by common proof, and noting also that no evidence of any such consent had yet been established. Therefore, the Court found common questions predominated. The Court then found that various factors favored class treatment for purposes of judicial economy, thus satisfying superiority. Practice Management Support Services, Inc. v. Cirque Du Soleil, Inc., No. 14-cv-2032, 2016 WL (N.D. Ill. Sept. 30, 2016) (Durkin, J.) Plaintiffs brought suit for violation of the TCPA, alleging receipt of multiple junk faxes of circus advertisements. After seven years, while a motion for certification was still pending after a stay awaiting the Supreme Court s decision in Campbell-Ewald v. Gomez, Defendants moved for leave to deposit $15,000 with the Court as tender of the claim amount, and for judgment on Plaintiff s individual claims, with dismissal of the class claims as moot. The Court granted the motion in part as to depositing the $15,000, but denied the motion in part on the other grounds, essentially finding that Campbell-Ewald had left open the question as to whether a Rule 67 tender offer could be used to moot claims, and that Defendants deposit of the tender offer was acceptable for purposes of satisfying Plaintiff s individual claim if a motion for class certification were to be denied after complete consideration. The tender offer, even if paid and deposited, would not automatically moot a Plaintiff s class claims where a motion for class certification was pending. With experience administering over 6,000 settlements, KCC s team knows first-hand the intricacies of class action settlement administration. At the onset of each engagement, we develop a plan to efficiently and cost-effectively implement the terms of the settlement. Our domestic infrastructure, the largest in the industry, includes a 900-seat call center and document production capabilities that handle hundreds of millions of documents annually. In addition, last year, our disbursement services team distributed $500 billion to payees. Lead Editor of KCC Class Action Digest: Robert DeWitte, Director Class Action Services

KCC Class Action Digest February 2019

KCC Class Action Digest February 2019 Class Action Services KCC Class Action Services partners with counsel to deliver high-quality, cost-effective notice and settlement administration services. Recognized