Class-Action

The New York Law Journal Reports: “Court Certifies Class of Exotic Dancers in Action Over Unpaid Wages”

January 1, 2011 | Peter S. Lubin and Patrick Austermuehle

The New York Law Journal reports that the national strip club chain Rick’s Caberet International, Inc. faces a wage and hour class-action lawsuit by its dancers for allegedly failing to pay wages and requiring the dancers to earn all monies through tips. The New York federal court where the case is pending certified the case as a class-action. You can read the article by clicking here.

Lubin Austermuehle is a firm of dedicated attorneys who focus on nationwide class action lawsuits. Our firm has successfully prosecuted wage and hour class actions for years and we pride ourselves on getting results. Our Chicagoland area lawyers know the overtime laws and have dealt with the issues that arise from wage claims. Many employers misclassify employees as being exempt from overtime laws and pay salary wages instead of hourly wages to avoid paying overtime. Some employers mistakenly classify employees as exempt and others intentionally do so in order to circumvent the law. In either case, workers do not receive the wages they should, and filing a lawsuit can help to recover their wages. Lubin Austermuehle serves many clients in Naperville and Wheaton, but also represents clients across the nation who have not been paid for the overtime hours that they worked. If you believe that you are owed overtime wages, contact one of our Chicago wage and hour attorneys by phone at 1 630-333-0333, or through our online form.

Bloomberg Reports: “NetFlix Faces Class Action in Subscriber Antitrust Case Over DVD Rentals”

January 1, 2011 | Peter S. Lubin and Patrick Austermuehle

Netflix faces an antitrust conspiracy trial for allegedly entering into an illegal agreement with Wal-Mart to divide retail dvd markets.

Wal-Mart settled the claims against it for a settlement valued at $40 million. Netflix has so far refused to settle and a trial date is set for January 2012.

An article in Bloomberg described the claims facing Neflix:

Class Certification Under Federal Rule of Civil Procedure Rule 23(a)

December 29, 2010 | Peter S. Lubin and Patrick Austermuehle

We here at Lubin Austermuehle often represent our clients in federal court, and our practice includes handling wage and hour disputes so we keep an eye on such cases filed in Illinois. In re AON Corp. is the consolidation of a New York case with an action filed in Illinois District Court to certify a wage and hour class action pursuant to Federal Rule of Civil Procedure 23(a). Plaintiffs allege violations of the Illinois Minimum Wage Law (IMWL) and Fair Labor Standards Act (FLSA) for unpaid overtime. In its opinion, the Court discussed whether the purported class met the four standards required for certification as set forth in FRCP 23(a). The Court analyzed the numerosity of class members, commonality of the issues between class members, typicality of the class representatives, and adequacy of representation proffered by the named Plaintiffs and their attorneys.

The Plaintiffs in this case are former employees of Defendant AON who worked as Associate Specialists, Client Specialists, and Senior Client Specialists in the Client Services Units and Policy Maintenance Units located at AON’s facilities in Illinois and New York. Plaintiffs argue that AON improperly classified the purported class members as administrative employees, thereby violating the IMWL and the FLSA and entitling them to overtime compensation.

The Court found that the Illinois Plaintiffs satisfied the Rule 23(a) numerosity requirement because there were 515 members of the proposed class and joinder of that many actions would be impracticable. The commonality requirement was met because there is a common question of law as to whether the class members were properly classified as administrative workers. The Rule 23(a) typicality requirement was met because all of the claims arise out of the same act of classification and assert the same violation of the law. The adequacy requirement of Rule 23(a) was met because the named Illinois Plaintiffs suffered the same injury as the class and have pursued the case for over 2 years. Additionally, Plaintiffs’ counsel has the requisite resources and experience in both class action and wage & hour litigation to adequately protect the interests of the class. Finally, the Court found that the requirements of Rule 23(b)(3) were met despite the fact that the class members have different clients and peripheral duties. The Court concluded that the class members’ essential job functions were similar enough that the central legal issue regarding classification of each class member as an administrative employee under the IMWL predominated and that a class action was a superior method of resolving the case.

To conditionally certify a class under 216(b), Plaintiffs must make a modest factual showing to demonstrate that they and potential plaintiffs together were victims of a common policy or plan that violated the law. Secondly, after all or a significant portion of discovery is completed, the Court must perform a stricter examination of whether the class members are similarly situated. The Plaintiffs sought to apply the first stage of 216(b) analysis, while the Defendant asked the Court to perform the second stage inquiry. The Court held that the second stage analysis was improper due to a relative lack of discovery in the case thus far. A second stage 216(b) analysis would prejudice the New York Plaintiffs by failing to give them adequate opportunity to present a more complete evidentiary picture. Additionally, performing the second phase analysis was premature because potential plaintiffs had not yet received notice and the opportunity to opt into the suit.

The Court conditionally certified the class because there was uniformity between the class representative and the class members due to: the similar type of work they performed, the uniform Defendant-produced processes used to perform their jobs, and the common legal issue of misclassification.

In Re AON Corp. provides guidance for future wage and hour litigants by explaining the requirements for class certification under the Federal Rules of Civil Procedure. This case also provides clarification regarding class certification under the Federal Labor Standards Act. Plaintiffs who seek to certify a class must have some evidence for conditional certification, but also should be mindful that they must acquire more substantial evidence through discovery to fully certify the class under the FLSA.

Kentucky Supreme Court Affirms that Consumer Class Action Can Proceed as Class Actions

December 21, 2010 | Peter S. Lubin and Patrick Austermuehle

The Kentucky Supreme Court rejected a contractual ban on class actions by Insignt in a case regarding a mass shut down of consumer internet services

The Court held a class action “is often the only economically viable legal procedure” to address a large volume of very small claims, the court said in an opinion issued Thursday. For that reason, it said, a ban on class actions like the one in Insight’s contract “may effectively shield a company from liability for unlawful activity.” In the Insight case, consumers were seeking refunds on $40 bills and absent a class action that would not able to retain a lawyer to act as a private Attorney General to vindicate their rights and those of the other victims.

The Court provided this example:

NPR Reports: Supreme Court Case Tests Bans On Class-Action Suits November 09, 2010

December 19, 2010 | Peter S. Lubin and Patrick Austermuehle

Supreme Court Case Tests Bans On Class-Action Suits November 09, 2010 … class action could bring potentially millions of dollars for all those consumers improperly charged. But the cell phone contract barred class actions

By Nina Totenberg

Our Oak Park, Illinois consumer rights private law firm handles individual and class action predatory lending, unfair debt collection, lemon law and other consumer fraud cases that government agencies and public interest law firms such as the Illinois Attorney General may not pursue. Class action lawsuits our law firm has been involved in or spear-headed have led to substantial awards totalling over a million dollars to organizations including the National Association of Consumer Advocates, the National Consumer Law Center, and local law school consumer programs. The Chicago consumer rights attorneys at Lubin Austermuehle are proud of our achievements in assisting national and local consumer rights organizations obtain the funds needed to ensure that consumers are protected and informed of their rights. By standing up to consumer fraud and consumer rip-offs, and in the right case filing consumer protection lawsuits and class-actions you too can help ensure that other consumers’ rights are protected from consumer rip-offs and unscrupulous or dishonest practices.

Courts Must Decide Admissibility of Questionable Expert Testimony Before Certifying Class

November 23, 2010 | Peter S. Lubin and Patrick Austermuehle

A recent decision by the Seventh U.S. Circuit Court of Appeals will have important implications for our practice as Illinois class action attorneys. In American Honda Motor Company Inc. v. Allen et al., No. 09-8051 (7th Cir. April 7, 2010), the Seventh ruled that trial courts must conclusively rule on the admissibility of expert testimony before certifying a class — when the testimony is essential to the class certification decision. The case is a proposed class action filed in the Northern District of Illinois by people who bought Honda’s Gold Wing GL1800 motorcycle. The plaintiffs claim there is a defect creating unusual amounts of “wobble,” or oscillation of the front steering assembly.

To support a motion for class certification, the plaintiffs used a report prepared by motorcycle engineering expert Mark Ezra. Ezra used a standard of his own devising to support his opinion that the Gold Wings’ wobble was beyond what was reasonable to avoid overcorrections or fear by the rider. He tested one such motorcycle, found it insufficient and suggested that Honda could fix the problem by using a different shape of ball bearings. Honda moved to strike this report, claiming it was unreliable and that the testing based on one motorcycle was not reliably applied.

The district court agreed that Honda had raised some important concerns, and that class certification rested largely on Ezra’s report, but declined to exclude the report entirely so early in the case. It dismissed Honda’s motion without prejudice and certified two classes. Honda appealed the class certification decision, and the Seventh found the appeal appropriate, because the issue is “heavily contested” and has not been addressed at the appellate level.

The Seventh wrote that the district court started off correctly by starting an analysis of the expert testimony as provided by Daubert v. Merrell Dow Pharms., Inc., 509 U.S. 579 (1993). Despite the detail in its analysis and the several troubling flaws it noted, however, the district court declined to exclude the report entirely “at this early stage of the proceedings.” By ruling in this way, the district court left an open question about which aspects of the report would be excluded, and ultimately, whether the plaintiffs met the standards for class certification. That was so insufficient that it was an abuse of discretion, the appeals court said.

Furthermore, the court wrote, the record shows “exclusion [of Ezra’s report] is the inescapable result when the Daubert analysis is carried to its conclusion.” The record shows Ezra’s report fails several tests laid out in Daubert and is “unreliable,” the Seventh wrote, which means it should not be admitted. And without admission of that testimony, the plaintiffs do not have enough evidence to show that their class meets standards of class certification. Thus, the Seventh vacated the lower court decision to grant class certification and remanded the case for further proceedings. In general, the court wrote, when the testimony is essential to the class certification decision, as it is here, a district court must conclusively rule on any challenge to the expert’s submissions or qualifications.

Class Certification Under the Fair Labor Standards Act Section 216(b)

November 17, 2010 | Peter S. Lubin and Patrick Austermuehle

As a firm that focuses on class-action litigation, and wage and hour class-actions in particular, our attorneys are always mindful of judicial rulings that may affect our clients. Early this year, a case in Federal Court in the Northern District of Illinois’ Eastern Division addressed a couple of issues that are important to both employers and employees. The opinion from Collazo v. Forefront Education, addressed questions surrounding a motion to certify a class action under under 29 USC 216(b) for violations of Fair Labor Standards Act (FLSA) flowing from the Defendant’s failure to pay overtime wages to the Plaintiff class members. The Court also commented on the effect of employee-signed releases on an employee’s rights under FLSA.

Plaintiffs are former Illinois admissions representatives of Defendant Forefront Education, a for-profit educational institution with campuses in Illinois and Florida. Plaintiffs sought to certify a class including all current and former admission reps at both locations who did not receive overtime pay from October 20, 2005 – present. Defendants argued that:

1) Plaintiffs provided no basis for sending notice to Florida employees;
2) Plaintiffs failed to show that notice was warranted for the Illinois class members;
3) Plaintiffs failed to identify an adequate class representative; and
4) the language in the class notice was deficient.

To conditionally certify a class under 216(b), Plaintiffs must make a “modest factual showing sufficient to demonstrate that they and potential plaintiffs together were victims of a common policy or plan that violated the law.” The Court found that Plaintiffs failed to make the required showing as to the Florida employees. The only evidence provided by the Plaintiffs was copies of job descriptions pulled from the Florida location’s website, which the Court deemed insufficient. The judge also noted that Plaintiffs had no affiant with personal knowledge of the work schedules or conditions of admissions reps at the Florida locations in ruling against certifying the Florida employees as class-members.

The Court granted the motion as to the Illinois admissions reps due to the less stringent standard under 216(b) as compared to the requirements for class certification under Federal Rule of Civil Procedure 23. The Court found that the class representatives were able to make 216(b)’s “modest factual showing” because: the named Plaintiffs were all employed at the Illinois campus, they each submitted a declaration to the court detailing their respective work schedules and the schedules of coworkers, and they provided documentary evidence that employees were required to work Saturdays.

The Court found one Plaintiff to be an adequate class representative despite the Defendant’s argument that Plaintiff had signed a post-employment release of all claims, including any claims under the FLSA. The Court found that “rights under the FLSA cannot be abridged by contract or otherwise waived,” and the release in question was impermissibly broad as it purported to waive rights under the FLSA. Lastly, the Court required that the class definition be amended to include only those admissions reps who actually worked more than forty hours per week and were not paid overtime.

The ruling in Collazo has something for everyone. The Court makes it clear to potential Plaintiffs that they will not rubber-stamp class certifications under the FLSA, despite the fact that certification requirements under the Act are less burdensome than in other federal class-action lawsuits. For business owners, the ruling means that while a release may effectively remove the threat of some legal claims, they cannot contract away an FLSA wage and hour lawsuit in the same manner.

Best Websites on the Internet for Class Action and Consumer Law Issues — “Can My Boss Do That” Website Spells Out Worker Employment Rights in Plain English

November 11, 2010 | Peter S. Lubin and Patrick Austermuehle

The website Can My Boss Do That sets down in plain english your rights as an employee. The website has a great section on http://www.canmybossdothat.com/category.php?id=6. It explains when you are entitled to get paid.

This website is a great resource for finding out your legal rights as a employee.

AT&T Case Heard By Supreme Court and Most Media Outlets Predict Consumer Victory Based on State’s Rights Principles

November 11, 2010 | Peter S. Lubin and Patrick Austermuehle

Slate published an excellent article handicapping that the Supreme Court in the AT&T case will vote in favor of consumer class actions continuing. The article explains in in plain English what is at stake in the case and the arcane legal issues on which the decision will turn. You can view the entire article by clicking here. This article like most of those written by the major newspapers, media outlets and blogs, such as the Wall Street Journal, New York Times, ADR Blog, predicts a consumer victory based on deference to state’s rights and California’s right to invalidate an unconscionable class action ban in an arbitration agreement.

The Slate article states:

In plain English, the Supreme Court needs to decide whether Corporate America can make ordinary slobs like us, who sign take-it-or-leave-it contracts, give up our right to file class-action suits. And in case you’re wondering why class-action suits matter to us ordinary slobs, consider this: Not a lot of lawyers are willing to take on AT&T for $30.32. Sometimes the only way to police misconduct—particularly small differentials in pay (based on, say, race or gender) or itsy bitsy fraudulent representations—is by pooling litigants together and suing together as a class.

LA Time’s Opinion Piece on Upcoming Supreme Court Case Which Could End Most Consumer Class Actions

November 5, 2010 | Peter S. Lubin and Patrick Austermuehle

A thoughtful opinion piece appeared in the LA Times on the upcoming oral argument before the Supreme Court in the case which will decide if corporations can take away consumers’ rights to file class actions through take it or leave it form contracts.

The opinion piece which appeared in the LA Times states in part:

“The marketplace is fairer for consumers and workers because there’s a deterrent out there,” said Deepak Gupta, an attorney for the advocacy group Public Citizen who will argue on consumers’ behalf before the Supreme Court on Tuesday.