Monthly Archives: April 2016

Multiple Studies Show Increase in Securities Class Actions

View Adam Doerr's Complete Bio at robinsonbradshaw.comRecent studies by PricewaterhouseCoopers, NERA Economic Consulting, Cornerstone, and Kevin LaCroix of D&O Diary have all found that federal securities class actions are on the rise. According to PwC, the data shows a trend towards more cases filed against smaller companies, especially for claims regarding accounting irregularities. Smaller companies also face a significant risk of claims regarding inadequate internal controls over financial reporting, likely due to their smaller size and more limited resources.

NERA found that standard federal securities class actions – complaints alleging violations of Rule 10b-5, Section 11, or Section 12 – increased for the third straight year. Both PwC and NERA determined that the number and proportion of federal cases challenging mergers and acquisitions also increased in 2015. It is unclear whether this is a result of Delaware’s increased scrutiny of merger litigation settlements, but we will monitor this trend, which also affects merger litigation in state courts, including the North Carolina Business Court.

Cornerstone analyzed the timing and progress of cases and found that the time to resolution appears to be increasing. Fewer cases were dismissed within the first year after they were filed, and the percentage of cases settled within three years also decreased. Despite this, only a small proportion of cases – just 26% — made it to a motion for class certification. The other 74% of cases were dismissed or resolved prior to class certification. When courts actually decided class certification motions, they granted them 75% of the time.

The studies were not consistent in identifying the number of cases filed in the Fourth Circuit, but all agreed that filings here are well behind those filed in the Second and Ninth Circuits, which saw more than 60% of securities class action filings. Although the Fourth Circuit did not see as much volume as these courts, one of the 10 largest settlements of 2015, a $146.3 million settlement of misrepresentation claims against an energy company, took place in the Western District of North Carolina.

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Recent Filings – March 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 March’s filings:

King v. Managed Recovery Systems, No. 7:16-cv-00954 (D.S.C. March 24, 2016) (action brought on behalf of consumers residing in South Carolina alleging violation of Fair Debt Collection Practices Act).

Storey v. King Street Grille, LLC, No. 2:16-cv-942 (D.S.C. March 24, 2016) (collective and class action brought under the FLSA and state wage and hour law alleging improper “tip credits”).

Filar-Collins et. al. v. Buffets, LLC, et. al. No. 6:16-cv-00888 (D.S.C. March 18, 2016) (notice of removal of putative class action on behalf of former employees alleging that defendants failed to make severance payments after being laid off).

Scrogham v. Reid, et. al., No. 5:16-cv-00045 (W.D.N.C. March 14, 2016) (putative class action on behalf of shareholders of CommunityOne Bancorp against Community Bank’s officers and directors alleging violations of the Exchange Act and other claims arising out of a proposed merger of its bank operations with Capital Bank Financial Corp.).

Carroll, et. al. v. Dewitt, et. al., No. 2:16-cv-00792 (D.S.C. March 11, 2016) (class action on behalf of detention center officers alleging that the officers were required to work off the clock without pay in violation of the South Carolina Payment of Wages Act).

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Recent Filings – January and February 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 January’s and February’s filings:

Folk v. S.C. Healthcare Investment, LLC, No. 1:16-cv-00643 (D.S.C. February 29, 2016) (notice of removal of class action on behalf of former hospital employees alleging that defendant failed to provide proper notice that it was closing the hospital and laying off its employees).

Pendleton v. Reid, et. al., No. 5:16-cv-00037 (W.D.N.C. February 29, 2016) (putative class action on behalf of shareholders of CommunityOne Bancorp against Community Bank’s officers and directors alleging violations of the Exchange Act and other claims arising out of a proposed merger of its bank operations with Capital Bank Financial Corp.).

Spires v. Schools, et. al., No. 2:16-cv-00616 (D.S.C. February 26, 2016) (putative class action alleging defendants breached their fiduciary duties by mismanaging Piggly Wiggly’s retirement plan and violated ERISA).

Ferebee v. Excel Staffing Services, Inc., No. 2:16-cv-00008 (E.D.N.C. February 12, 2016) (asserting Fair Labor Standards Act collective action and class action under the North Carolina Wage and Hour Act and Federal Credit Reporting Act alleging that defendant misclassified nurses as independent contractors, failed to pay overtime, and conducted improper background checks).

Jones v. Portfolio Recovery Associates, LLC, et. al., No. 4:16-cv-00411 (D.S.C. February 10, 2016) (consumer class action alleging that defendant collection agency violated the Fair Debt Collections Practices Act by failing to notify consumers that a payment on a time-barred debt would reset the applicable statutes of limitations).

Xue, et. al. v. J&B Spartanburg, LLC, et. al., No. 7:16-cv-00340 (D.S.C. February 4, 2016) (asserting collective action and class action under the South Carolina Payment of Wages Act brought by chefs alleging that defendant Chinese restaurant owner failed to pay chefs minimum wage and overtime).

Butler et. al. v. Fama Entertainment, LLC, et. al., No. 2:16-cv-00293 (D.S.C. January 29, 2016) (cooks and restaurant workers asserting Fair Labor Standards Act collective action and class action under South Carolina state law alleging that defendant bar owner failed to pay employees overtime).

DiSalvo v. IntelliCorp Records, Inc., No. 7:16-cv-00013 (E.D.N.C. January 26, 2016) (class action brought on behalf of all U.S. consumers to whom IntelliCorp provided a consumer report for employment purposes alleging violations of the Fair Credit Reporting Act).

Edwards v. AG of Durham, Inc., et. al., No. 1:16-cv-00057 (M.D.N.C. January 25, 2016) (collective and class action brought under FLSA and the North Carolina Wage and Hour Act by Mellow Mushroom employees alleging improper “tip credit”).

McCurley v. Flowers Foods, Inc., et. al., No. 5:16-cv-00194 (D.S.C. January 20, 2016) (collective and class action under FLSA and state law alleging that defendant bakery operator improperly classified bakers as independent contractors and failed to pay overtime).

Kassing-Bradley v. Aargon Agency, Inc., No. 9:16-cv-00165 (D.S.C. January 19, 2016) (putative class action alleging violations of Fair Credit Reporting Act for sending improper debt collection voicemail messages).

Rangel, et. al. v. Compliance Staffing Agency, LLC, et. al., No. 4:16-cv-00008 (E.D.N.C. January 19, 2016) (collective action brought under FLSA alleging that staffing companies improperly classified factory workers as independent contractors and failed to pay overtime).

Southern v. WakeMed, No. 5:16-cv-00017 (E.D.N.C. January 13, 2016) (putative class action brought on behalf of hospital patients alleging defendant hospital breached its fiduciary duties and other state laws by seeking improper payments from patients and sending debt collection notices).

Carbone v. China Fun, L.L.C., et. al., No. 2:16-cv-00108 (D.S.C. January 12, 2016) (asserting FLSA collective action and class action under the South Carolina Payment of Wages Act brought by restaurant workers alleging that defendant Chinese restaurant applied an improper “tip credit”).

Gaston, et. al. v. LexisNexis Risk Solutions, Inc., et. al., No. 5:16-cv-00009 (W.D.N.C. January 12, 2016) (consumer class action on behalf of Mecklenburg County residents alleging defendants improperly obtained, released, and sold plaintiffs’ private driving records without express consent from the plaintiffs).

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