Recent Filings – October Digest

View Amanda Pickens’ Complete Bio at robinsonbradshaw.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 October’s filings:

Stephens, et. al. v. Shoretel SC LLC, et. al., No. 4:16-cv-03515 (D.S.C. October 28, 2016) (purported collective action brought under FLSA alleging customer service representatives were not paid overtime while working for defendant’s call center).

Blunt v. Belk, Inc., No. 3:16-cv-00745 (W.D.N.C. October 27, 2016) (notice of removal of putative class action brought under the Fair Credit Reporting Act alleging Belk failed to provide proper notice required under the Act before obtaining background checks on individuals applying for jobs).

Smith v. American Health Associates, Inc., No. 6:16-cv-03480 (D.S.C. October 25, 2016) (purported collective action and class action brought under FLSA and state wage and hour laws by phlebotomists alleging AHA failed to pay overtime and improperly deducted wages for mileage reimbursement).

Humphery v. Fluor Enters., Inc., No. 0:16-cv-03474 (D.S.C. October 24, 2016) (purported collective action and class action brought under FLSA and state wage and hour laws alleging defendant failed to pay manual laborers overtime wages).

King v. Check Recovery Bureau, Inc., No. 6:16-cv-03357 (D.S.C. October 11, 2016) (putative class action brought on behalf of consumers residing in South Carolina alleging violations of the Fair Debt Collection Practices Act).

Phillips v. Smithfield Packing Co., Inc., No. 5:16-cv-00834 (E.D.N.C. October 4, 2016) (asserting collective and class action claims under FLSA and state wage and hour laws brought by workers of a pork processing plant alleging that defendant failed to pay workers overtime).

Email this to someoneShare on FacebookTweet about this on TwitterShare on LinkedInPrint this page

Business Court Warns of Enhanced Scrutiny for Disclosure-Only Merger Settlements

View David Wright's Complete Bio at robinsonbradshaw.com We have previously commented about “disclosure only” settlements in class action merger cases, and the increasing scrutiny provided to them by courts here and in Delaware. Judge Bledsoe entered the fray yesterday, approving a settlement of litigation involving the merger of Yadkin Financial Corporation and NewBridge Bancorp in a 44-page order. In a stark preamble to his findings, Judge Bledsoe gave warning that the Business Court would likely be joining their brethren in Delaware in strictly reviewing such settlements in the future. The Court characterized such a shift as a “marked departure from [the Business Court’s] past practices in connection with the consideration of such motions,” and therefore “decline[d] to apply enhanced scrutiny to its consideration of the Motions” in the case before it.

But that reprieve is likely short-lived. In the next sentence, Judge Bledsoe “expressly advises the practicing bar that judges of the North Carolina Business Court, including the undersigned, may be prepared to apply enhanced scrutiny of the sort exercised in In re Trulia Stockholder Litigation, to the approval of disclosure-based settlements and attendant motions for attorneys’ fees hereafter.” We characterized this Delaware authority as “sound[ing] a trumpet of skepticism concerning ‘disclosure only’ settlements.”

The Settlement Agreement reviewed by the Business Court in the NewBridge Bancorp case provided that the Defendants would not object to a fee petition up to $300,000, and—to a penny—that’s what Plaintiffs’ counsel sought in the case. In this space, we have observed that the entry into a disclosure-only settlement “is a ‘kumbayah’ occasion for plaintiffs’ and defense counsel,” and Judge Bledsoe reiterates this point, albeit it in a less colloquial manner, agreeing with the Delaware courts that “the trial court’s assessment typically occurs, as it does here, without the benefit of an adversarial process.”

The Court, after reviewing applicable authority, cut the requested fee award from $300,000 to about $160,000. There were two principal reasons for the reduction. First, the Court concluded that “collectively, the Supplemental Disclosures were only of marginal benefit to the Class.” Indeed, the Court found no “substantial evidence that any of the Supplemental Disclosures were significant to a reasonable shareholder’s decision in voting on the Proposed Transaction.” Second, the Court observed that the average hourly rate charged by Plaintiffs’ counsel was “above the hourly rate customarily charged in North Carolina for similar services” and that “the demands of the Consolidated Action did not require Plaintiffs to retain counsel from outside North Carolina in order to prosecute” the case.

The Court, in contrast to Delaware decisions like Trulia, did not closely scrutinize the claims released by class members as part of the settlement. Judge Bledsoe, in two footnotes, indicated that future requests for approval of disclosure-based settlements will involve such consideration. He stated that the scope of the release needs to be an express factor in the Court’s analysis in future cases, but that the Court was “reluctant to set aside the settlement in light of the approval of prior similar settlements by the Business Court.” In this regard, Judge Bledsoe’s Newbridge Bancorp decision is similar to the Chancery Court’s ruling in In re Riverbed Technology, Inc. Stockholders Litigation, where Chancellor Glasscock explained that, “given the past practice of this Court in examining settlements of this type, the parties in good faith negotiated a remedy—additional disclosures—that has been consummated, with the reasonable expectation that the very broad, but hardly unprecedented, release negotiated in return would be approved by this Court.”

In Delaware, the Chancery Court—having apparently concluded that counsel and the parties were sufficiently on notice following its warning in Riverbed—refused to approve a settlement outright in Trulia, just four months later. Merger challenges in Delaware have significantly declined in the months since that decision.

The effect of Judge Bledsoe’s decision on merger litigation in North Carolina remains to be seen, but this admonition from the Business Court must be reckoned with by shareholders considering class filings in future North Carolina merger litigation.

(Adam Doerr and Tommy Holderness of our firm represented the members of the NewBridge Bancorp Board of Directors in this litigation.)

Email this to someoneShare on FacebookTweet about this on TwitterShare on LinkedInPrint this page

Recent Filings – September 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 September’s filings:

Dvorsky v. George Salama, D.C., No. 1:16-cv-01180 (M.D.N.C. September 27, 2016) (putative class action brought under the Driver’s Privacy Protection Act alleging that defendant chiropractic medical practice obtained protected personal information from DMV records and accident reports to market its chiropractic services in violation of the Act).

Sheffield v. BB&T Corp., et. al., No. 7:16-cv-00332 (E.D.N.C. September 23, 2016) (putative class action and collective action brought under FLSA and state wage and hour laws alleging defendant BB&T failed to pay call center employees for all time worked).

Andrulat v. 2015 Ventures, LLC, et. al., No. 2:16-cv-03183 (D.S.C. September 21, 2016) (collective action and class action brought under FLSA and state wage and hour laws brought by dancers claiming nightclub misclassified dancers as independent contractors and failed to pay minimum wage and overtime).

McLamb v. Paphos, Inc., et. al., No. 4:16-cv-03109 (D.S.C. September 14, 2016) (collective action and putative class action brought under FLSA and state wage and hour laws by restaurant employees for an improper “tip pool”).

Creech v. JEM Pizza Group, LLC, et. al., No. 2:16-cv-03087 (D.S.C. September 12, 2016) (collective action and putative class action brought under FLSA and state wage and hours laws alleging Pizza Hut’s policy for reimbursing pizza delivery drivers for the use of their vehicles causes the drivers’ hourly wages to fall below the minimum wage requirement).

Big Thyme Enters., Inc. v. Schwabe N. Am., Inc., et. al., No. 3:16-cv-03050 (D.S.C. September 8, 2016) (putative class action brought under the Telephone Consumer Protection Act alleging defendant faxed advertisements without plaintiffs’ consent).

Foster, et. al. v. Lowe’s Co., Inc., et. al., No. 5:16-cv-00161 (W.D.N.C. September 8, 2016) (collective action and putative class action brought under FLSA and state wage and hour laws alleging Lowe’s misclassified information technology workers and did not pay the workers for six weeks).

Career Counseling, Inc. v. Amerifactors Fin. Grp., LLC, et. al., No. 3:16-cv-03013 (D.S.C. September 2, 2016) (alleging violations of the Telephone Consumer Protection Act for unsolicited faxes sent without plaintiffs’ consent).

George v. Toyota Motor Co., et. al., No. 2:16-cv-03006 (D.S.C. September 1, 2016) (putative class action alleging Toyota failed to repair defective dashboards in its vehicles and forced drivers to wait for repairs, despite promising to address the defects in the dashboards in exchange for settling a prior putative class action lawsuit from 2014).

Email this to someoneShare on FacebookTweet about this on TwitterShare on LinkedInPrint this page

Class Certified on Failure To Notify Employees of Impending Hospital Closure

View David Wright's Complete Bio at robinsonbradshaw.comFailure to give the requisite 60-days’ notice to a group of employees under the WARN Act seems like it implicates a quintessential common question for adjudication under Rule 23. But in Hutson v. CAH Acquisition Company 10, LLC, 1:15CV742 (M.D.N.C. Aug. 15, 2016), Defendant gamely tried to suggest that there were factual issues that must be resolved as to each plaintiff. Admittedly, the case was a bit more complicated than the typical WARN Act case – the closing of the employer’s facility was postponed, and there apparently was confusion about just what the employer explained to employees about the postponement. But Judge Osteen did not pause long in certifying the class, observing that “whether the [new] notice was timely and sufficient under the WARN Act or whether notice was in effect given at all, are questions of law and fact common to the class.” Judge Osteen similarly rejected defendant’s typicality argument, holding that the claims at issue all “arise out of the exact same conduct, and rest on the exact same legal theories as those of the proposed class.” The prospect of adjudicating 130 individual claims under the WARN Act – for the same closure event – seems daunting, and Judge Osteen’s decision on class certification was right down the middle of the fairway on this one.

Email this to someoneShare on FacebookTweet about this on TwitterShare on LinkedInPrint this page

Recent Filings – August 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 August’s filings:

Kirkpatrick v. Cardinal Ally, Inc., No. 1:16-cv-01088 (M.D.N.C. August 28, 2016) (collective action and class action asserted under FLSA and state wage and hour laws alleging defendant managed healthcare organization misclassified care coordinators as exempt employees).

Ailsworth v. Harbor Inn Richland, Inc., et. al., No. 3:16-cv-02946 (D.S.C. August 26, 2016) (purported collective action and class action brought under FLSA and state wage and hour laws for an improper tip pool).

Allen v. SSC Lexington Operating Co. LLC, No. 1:16-cv-01080 (M.D.N.C. August 24, 2016) (purported collective action and class action brought under FLSA and state wage and hour laws alleging defendant nursing home operator failed to pay staff members for work performed off-the-clock).

Bennett v. Lumber Liquidators, Inc., No. 1:16-cv-00281 (W.D.N.C. August 19, 2016) (California putative class action transferred to the W.D.N.C. alleging defendant hardwood flooring and laminate retailer sold defective flooring under its “Dream Home” brand).

Gibson, et. al. v. Confie Ins. Grp. Holdings, Inc., et. al., No. 2:16-cv-02872 (D.S.C. August 18, 2016) (putative class action brought by customers purchasing roadside assistance car insurance policies against insurance companies alleging violations of the Truth in Lending Act, RICO, and other state laws).

Turner v. BFI Waste Servs., LLC et. al., No. 2:16-cv-02864 (D.S.C. August 17, 2016) (in addition to Brown, this is the second purported collective action and class action brought under FLSA and state wage and hour laws alleging defendant Republic Services failed to pay overtime to waste disposal drivers).

Rosbottom v. Experian Info. Solutions, Inc., No. 0:16-cv-02832 (D.S.C. August 15, 2016) (consumer class action brought under the Fair Credit Reporting Act against Experian for reporting South Carolina tax liens that allegedly have been expunged or satisfied).

Adams, et. al. v. Sitel Operating Corp., No. 1:16-cv-01051 (M.D.N.C. August 12, 2016) (collective action and class action brought under FLSA and state wage and hour laws alleging defendant failed to pay call center employees for all pre-shift and post-shift work).

Fitzhenry v. Woodforest Nat’l Bank, N.A., No. 3:16-cv-02809 (D.S.C. August 11, 2016) (alleging violations of the Telephone Consumer Protection Act based on autodialed collection calls sent without plaintiffs’ consent).

Brown v. Republic Servs. of South Carolina, LLC, No. 2:16-cv-02804 (D.S.C. August 11, 2016) (purported collective action and class action arising under FLSA and state wage and hour laws alleging defendant failed to pay overtime to waste disposal drivers).

Clark, et. al. v. Duke Univ., et. al., No. 1:16-cv-01044 (M.D.N.C. August 10, 2016) (putative class action brought under ERISA alleging defendants breached their fiduciary duties by mismanaging the Duke University Faculty and Staff Retirement Plan).

Chavez v. T&B Mgmt., LLC, et. al., No. 1:16-cv-1019 (M.D.N.C. August 1, 2016) (collective and class action brought under FLSA and the North Carolina Wage and Hour Act by restaurant servers for failure to pay minimum wage for non-tip-generating work such as maintenance, cleaning, and rolling silverware).

Email this to someoneShare on FacebookTweet about this on TwitterShare on LinkedInPrint this page