Recent Filings – July Digest

View Amanda Pickens’ Complete Bio at RBH.com Not every class action court filing in North and South Carolina becomes a full-length post on our blog. Here is a recap of July’s filings:

Ford, et. al. v. Ford Motor Co., No. 1:16-cv-00239 (W.D.N.C. July 14, 2016) (putative consumer class action alleging the Ford Explorer has a manufacturing defect which allows exhaust emissions to leak into passenger cabins).

Swinger v. Breg, Inc., et. al., No. 1:16-cv-00955 (M.D.N.C. July 14, 2016) (collective action and class action brought under FLSA and state wage and hour laws for unpaid wages and overtime arising from defendants’ alleged misclassification of employees).

Hatch, et. al. v. DeMayo, et. al., No. 1:16-cv-00925 (D.S.C. July 8, 2016) (putative class action brought under the Driver’s Privacy Protection Act alleging that defendant law firms obtained protected personal information from DMV records and accident reports to market their legal services in violation of the Act).

Lomax v. Krispy Kreme Doughnuts, Inc., et. al., No. 1:16-cv-00923 (M.D.N.C. July 8, 2016) (in addition to Graham, this is the second putative class action filed on behalf of shareholders of Krispy Kreme Doughnuts, Inc., against the company and its officers and directors alleging violations of Sections 14(a) and 20(a) of the Exchange Act arising out of a proposed merger of its operations with a private Dutch company JAB Holdings, B.V. through its Delaware and North Carolina entities).

Velasquez v. Salsa and Beer Restaurant, Inc., et. al., No. 5:16-cv-00655 (E.D.N.C. July 6, 2016) (collective and class action brought under FLSA and the North Carolina Wage and Hour Act by restaurant servers for an improper “tip credit” and the restaurant’s failure to pay overtime).

Heydrick v. J.L Hawes Inc., et. al., No. 2:16-cv-02413 (D.S.C. July 1, 2016) (collective and class action brought under FLSA and state wage and hour laws for an improper “tip credit”).

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Securities Class Actions Continue To Rise

View Adam Doerr's Complete Bio at robinsonbradshaw.com Earlier this year, we reported that Multiple Studies Show Increase in Securities Class Actions. Cornerstone Research, one of the groups covered in our earlier report, recently issued its 2016 Midyear Assessment. This new analysis, which covers cases filed in January through June of this year, is consistent with several of the trends we reported previously, including the increasing number of securities class actions, the rise in the number of cases against smaller companies, and the increase in the number of Fourth Circuit cases.

Of particular interest is the significant increase in the number of merger & acquisition cases filed in federal courts. In the first half of 2016, there were 24 filings involving M&A transactions – a 167% increase from the second half of 2015. Given the size of this increase, it seems likely that this is related to significant changes in Delaware’s handling of merger objection litigation following the Trulia decision, and we will continue to monitor how this shift impacts merger litigation in federal courts in the Carolinas and the North Carolina Business Court.

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Recent Filings – June Digest

View Amanda Pickens’ Complete Bio at RBH.com Not every class action court filing in North and South Carolina becomes a full-length post on our blog. Here is a recap of June’s filings:

Campbell v. First Nat’l Collection Bureau, Inc., et. al., No. 1:16-cv-02342 (D.S.C. June 29, 2016) (putative class action brought on behalf of consumers residing in South Carolina alleging violations of the Fair Debt Collection Practices Act).

Girard v. Fantasy Far East, Inc., et. al., No.2:16-cv-02209 (D.S.C. June 24, 2016) (purported collective and class action brought under FLSA and state wage and hour laws for an improper “tip pool”).

Higgins v. James Doran Co., Inc., et. al., No. 2:16-cv-02149 (D.S.C. June 23, 2016) (asserting collective and class action claims under FLSA and state wage and hour laws brought by maintenance workers alleging that defendant real estate development companies failed to pay maintenance workers for all work time, including time spent while “on call”).

Rich v. Columbia Miyabi, Inc., et. al., No. 2:16-cv-02148 (D.S.C. June 23, 2016) (purported collective and class action brought under FLSA and state wage and hour laws for an improper “tip pool”).

Stone v. Charleston Miyabi, Inc., et. al., No. 2:16-cv-02129 (D.S.C. June 22, 2016) (collective and class action brought under FLSA and state wage and hour laws for an improper “tip pool”).

Cole, et. al. v. Santa Fe Natural Tobacco Co., Inc., et. al., No. 1:16-cv-00687 (M.D.N.C. June 21, 2016) (putative class action seeking both damages and injunctive relief against defendant cigarette manufacturer alleging that defendant misled consumers by labeling and advertising their cigarettes as “natural,” “additive free,” and “organic”).

Weckesser v. Knight Enterprises, S.E., LLC, No. 2:16-cv-0253 (D.S.C. June 20, 2016) (this is the second of two purported collective and class actions brought under the FLSA and state wage and hour laws alleging that defendant misclassified cable installation technicians as independent contractors and failed to pay overtime and minimum wage).

Bass v. 817 Corp., et. al., No. 2:16-cv-1964 (June 15, 2016 D.S.C.) (purported collective and class action for an improper “tip credit”).

Graham v. Bentsen, et. al., No. 1:16-cv-00612 (M.D.N.C. June 13, 2016) (putative class action on behalf of shareholders of Krispy Kreme Doughnuts, Inc., against the company and its officers and directors alleging violations of Sections 14(a) and 20(a) of the Exchange Act arising out of a proposed merger of its operations with a private Dutch company JAB Holdings, B.V. through its Delaware and North Carolina entities).

Ravey v. TransEnterix, Inc., et. al., No. 1:16-cv-00599 (M.D.N.C. June 9, 2016) (In addition to Bankley, this is the second putative class action filed by shareholders of TransEnterix, Inc., a publicly traded biotech company, alleging 10b-5 and 20(a) claims against TransEnterix, Inc. and two high-ranking executives. The PSLRA deadline to seek appointment as lead plaintiff expires August 1.).

Zajac v. Ice House on Bohicket, LLC, et. al., No. 2:16-cv-01869 (D.S.C. June 9, 2016) (this is the second of two purported collective and class actions asserted against Red Wing brought under the FLSA and state wage and hour laws for an improper “tip credit”).

Zajac v. Red Wing, LLC, et. al., No. 2:16-cv-01856 (D.S.C. June 8, 2016) (purported collective and class action under the FLSA and state wage and hour laws for an improper “tip credit”).

Turzak v. ASB Enter. Inc., No. 2:16-cv-01810 (D.S.C. June 3, 2016) (purported collective and class action under the FLSA and state wage and hour laws alleging that defendant family restaurant failed to pay servers overtime and minimum wage and implemented an improper “tip credit”).

Bankley v. TransEnterix, Inc., et. al., No. 5:16-cv-00313 (E.D.N.C. June 2, 2016) (putative class action on behalf of shareholders of TransEnterix, Inc., a publicly traded biotech company, asserting securities violations for providing allegedly false and/or misleading information about the company’s business in its press releases, shareholder conference calls, and securities filings).

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Court Refuses to Certify Class in Product Defect Case

View David Wright's Complete Bio at robinsonbradshaw.comIn February 2014, the Panel on Multidistrict Litigation transferred a series of cases against Pella Corporation, a window manufacturer, to the District of South Carolina. Judge Norton dismissed most of the claims, but preserved claims alleging breach of express warranty with respect to Pella’s failure to repair or replace windows under its limited warranty. The windows, so plaintiffs alleged, leaked, and the plaintiffs sought certification of a class consisting of owners of structures in New York from 1997 through 2007 who had made a claim under Pella’s Limited Warranty. The “common issue” upon which Plaintiffs founded their class certification contentions was whether the windows were defective.

The court first grappled with whether changes in the design of the windows during the class period destroyed commonality under Rule 23(a). The issue there, as Judge Norton saw it, was whether “the design variations had any impact on the windows’ vulnerability to water intrusion.” Without deciding this issue, the court assumed that the design changes did not, and focused on another problem created for class certification – New York law requires that a warranty “actually be breached,” not simply that a product exhibit a defect. Pella, the court reasoned, could not be said to have breached the terms of its own warranty unless it received notice of a defect. And the multiple defects asserted compounded this issue, leading the trial judge to observe that “[w]hatever the outcome of plaintiffs’ proposed class trial, the court will need to make individual determinations as to the underlying cause of each class member’s warranty claim.” Without definitively resolving the commonality issue, the Court determined that plaintiffs had problems showing predominance under Rule 23(b)(3). The court acknowledged that it was not uncommon to certify product liability claims, but distinguished the case before it – which principally involved a challenge to the failure to repair and replace the windows, rather than the plaintiffs’ initial purchase of a defective window. Relying on Fourth Circuit precedent, the court observed that “[t]here is no question that individual inquiries into causation and affirmative defenses may preclude class certification.” (citing to Lienhart v. Dryvit Sys. Inc., and Broussard v. Meineke Discount Muffler Shops, Inc.).

This case is one of several where plaintiffs – recognizing potential commonality problems – have moved for issue certification under Rule 23(c)(4), a subject we have addressed in earlier posts here. Judge Norton noted that “the emerging majority,” including two district court decisions in the Fourth Circuit, have “found that a court ‘may use Rule 23(c)(4) to certify a class as to an issue regardless of whether the claim as a whole satisfies the predominance test in Rule 23(b)(3).’” Although Judge Norton seemed amenable to avoiding the predominance problem through issue certification, he articulated – like many courts – that issue certification would not make a Rule 23 proceeding “superior,” citing Farrar (which we previously covered here). In the end, the court’s decision was founded on this point, concluding that “class certification – even on the limited issue of whether the windows contained a defect – is not superior to other methods of adjudication.”

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Recent Filings – May Digest

View Amanda Pickens’ Complete Bio at RBH.com Not every class action court filing in North and South Carolina becomes a full-length post on our blog. Here is a recap of May’s filings:

Garey, et. al. v. James S. Farrin, P.C., et. al., No. 1:16-cv-00542 (M.D.N.C. May 27, 2016) (putative class action brought under the Driver’s Privacy Protection Act alleging that defendant law firms obtained protected personal information from DMV records and accident reports to market their legal services in violation of the Act).

Spallone v. Chen Sushi King, LLC, No. 4:16-cv-01684 (D.S.C. May 25, 2016) (purported collective and class action brought under the FLSA and state wage and hour laws for an improper “tip pool”).

McKinnon v. Knight Enters. S.E., LLC, No. 2:16-cv-01664 (D.S.C. May 24, 2016) (cable installation technicians filed purported collective and class action under the FLSA and state wage and hour laws alleging that defendant misclassified the technicians as independent contractors and failed to pay overtime and minimum wage).

Carmichael v. Hilton Head Island Dev. Co., LLC, et. al., No. 9:16-cv-01641 (D.S.C. May 23, 2016) (purported class action brought under state consumer protection laws alleging that defendants made several misrepresentations when they sold timeshare units at the beach).

South Carolina Clean Air Initiative, LLC v. Harbor Freight Tools, No. 7:16-cv-01631 (D.S.C. May 20, 2016) (putative class action brought under the Clean Air Act alleging that defendant hardware retailer defrauded consumers and sold engines without emissions warranty language required by the Clean Air Act).

Bettini v. Windstream of South Carolina, LLC, et. al., No. 3:16-cv-01611 (D.S.C. May 19, 2016) (notice of removal of putative class action alleging defendant internet providers’ “Price for Life” promotion was misleading because the providers’ price guarantee expired after one year).

Linnis, et. al. v. Haeco Americas, LLC, No. 1:16-cv-00486 (May 17, 2016) (putative class action based on state law tort claims alleging defendant disclosed personally identifying information about its 3,000 employees to a third party internet scammer, allowing the scammer to file fraudulent tax returns and steal the employees’ identities).

Saunders v. Margaritaville of Myrtle Beach, LLC, No. 4:16-cv-01559 (D.S.C. May 16, 2016) (notice of removal of purported collective and class action brought under the FLSA and state wage and hour law alleging defendant required restaurant workers to work off the clock without pay).

Napier v. Adiz, LLC, et. al., No. 1:16-cv-01548 (D.S.C. May 13, 2016) (notice of removal of purported South Carolina class action by residential homeowners alleging defendants negligently designed and built their homes).

Wilson v. Hatteras Fin. Corp., et. al., No. 1:16-cv-00445 (M.D.N.C. May 11, 2016) (putative class action on behalf of shareholders of Hatteras Financial Corporation against the company’s officers and directors alleging violations of the Exchange Act and other claims arising out of a proposed merger of its real estate investment trust operations with Annaly Capital Management, Inc.).

Crosbie v. Bizfi, No. 4:16-cv-00061 (E.D.N.C. May 9, 2016) (alleging violations of the Telephone Consumer Protection Act based on autodialed collection calls sent without plaintiffs’ consent).

Morris v. Southern Concrete and Construction, Inc., No. 8:16-cv-01440 (D.S.C. May 5, 2016) (class and collective action brought under FLSA and state wage and hour laws by construction workers alleging that defendant failed to pay travel time and overtime).

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