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No Business Owner is safe.
Class and Collective Actions Are The New Normal.
Aggressive, Preemptive Strategy Wins
Plaintiffs attorneys are going to extraordinary lengths to land those
lucrative lawsuits. Take a look at the website TopClassActions.com.
Excerpt from the website:
Do you want to start a class action? If you think you have a case, a
possible class action lawsuit, a prescription drug side effect lawsuit thats
not currently covered in the active investigations section or another
issue you would like to reports this is how to do it. All submissions via
the form below are reviewed by Top Class Actions. If you have problems
submitting your reports please send us the details listed below to
staff@topclassactions.com for review. Whenever possible, please use
the form below. If that doesnt works you can email Top Class Actions
the information.
N
o business is safe. Multiple-plain-
tiff class and collective actions are
the new normal. These lawsuits arise from
every aspect of business, ranging from claims
regarding faulty products or unfair pricing;
failure to reimburse employees for cell phone
expenses; failure to pay overtime; and all manner
of workplace claims by current and former employees. The reason
for the rise in these claims? Plaintiffs attorneys are looking to cash
in on laws that award attorneys fees to the prevailing party in
class actions. While the class/collective action plaintiffs may receive
only a few hundred dollars for their claims, their attorneys often
receive hundreds of thousands of dollars for their representation,
and courts often give little consideration to the amount of recovery
in proportion to attorneys fees. In a recent class action lawsuit
involving the pricing of baby products, In re Baby Products Antitrust
Litigation, a court allocated $3 million in payment to the class
members, $18.5 million to charitable purposes, and $14 million
in attorneys fees.
Alan L. Rupe | 800-787-3529 | Alan.Rupe@KutakRock.com
Alan L. Rupe
Lucrative Lawsuits
If you need to speak with an attorney about minimizing the risk of a class action suit, or in defending an impending class or collective action suit, please contact your
Kutak Rock attorney, or Alan Rupe, the author of this case study.
This case study is a publication of Kutak Rock LLP. This publication is intended to notify our clients and friends of current events and provide general information about class and collective
action lawsuits. This case study is not intended, nor should it be used, as legal advice, and it does not create an attorney-client relationship.
To ensure compliance with requirements imposed by the IRS, we inform you that any federal tax advice contained in this communication should not be used or referred to in the promoting,
marketing or recommending of any entity, investment plan or arrangement, and such advice is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding
penalties under the Internal Revenue Code.
Kutak Rock LLP 2013
All Rights Reserved
This communication may be considered advertising in some jurisdictions.
KutakRock.com 2
Franklin D. Roosevelt
A
cross the country in California, a group of plaintiffs at-
tempted to certify a class of more than 1,500 current
and former employees of another Kutak Rock client. These plain-
tiffs sought to require
the employer to
reimburse employ-
ees under the Cali-
fornia Labor Code
for certain alleged
employee-incurred
business expenses related to their cell phone use.
The majority of California courts have ruled that
these types of California Labor Code violations apply general-
ly to other expenses. Plaintiffs retained an expert who opined
that surveys could be used to identify the extent of liability and
damages for failure to reimburse a putative class for cell phone
use.
The Result
Over plaintiffs strenuous objections, we took the depositions
of a representative group of putative plaintiffs. That deposition
testimony illustrated a substantial variance among each individ-
uals cell phone plan; a majority of the deponents had plans that
allowed unlimited minutes. Since the depositions produced dif-
ferent facts regarding liability, the Cali-
fornia court ultimately ruled that class
certification was improper, reasoning
that a class action was not an appropri-
ate method to determine the reimburse-
ment loss to the putative plaintiffs. The
class claims were summarily dismissed. Perhaps not sur-
prisingly, plaintiffs have appealed the courts ruling.
Two different caseson opposite coasts. In both of these
cases, we initiated an aggressive, preemptive strategy of filing a
motion to strike class certification, following President Franklin
D. Roosevelts often-cited strategy, When you see a rattlesnake
poised to strike, you do not wait until he has struck before you
crush him.
Our best defense was a strong offense. In both cases, our
strategy reduced the time, the discovery, and the resources
needed to defend the class action law suits.
When you see a rattlesnake poised
to strike, you do not wait until he has
struck before you crush him.
S
uccessfully battling class and collective actions is what we do
for our clients. In two recent class action cases filed in courts
on opposite sides of the country, we won significant victories for our
clients. These two recent decisions illustrate how we defend class and
collective actions: aggressively, quickly, and successfully.
In the case of Spellman, et al. v. AEX, filed in federal court
in Pennsylvania, plaintiffs were delivery drivers who delivered
pharmaceutical and financial cargo to customers of our client. Plaintiffs
alleged our client misclassified them and other similarly-situated
individuals as independent contractors and violated the Fair Labor
Standards Act by failing to pay overtime compensation. The case was
initially certified as a collective action under the lenient standard of
Section 216(b) of the Fair Labor Standards Act. Two hundred twelve
individuals opted in and consented to join as plaintiffs. The case was
made difficult because our client is governed by federal regulations that
impose specific requirements to ensure the safety of cargo. However,
we aggressively defended the case and deposed a number of the opt-in
class members.
The Result
The depositions revealed individual differences in relevant
matters, including use of uniforms, call-in requirements, and amount
of instruction. The court relied upon these differences in ruling that
the case should be decertified. This resulted in a dismissal of all
claims but for the nine individuals who originally filed the
class action.
Case Study #1
Case Study #2
Class and Collective Actions