Chicago Business Litigation Lawyer BlogThe Thorogood lawsuit against Sears, characterized by the 7th Circuit as purportedly “near frivolous,” concerned marketing of a clothes dryer. It was certified and later decertified as a class action on the ground that no issues could be resolved in a single, class-wide evidentiary hearing, and was ultimately dismissed. Murray, a member of the proposed class, who did not become a party, filed a “copycat” class action, using the same attorney. Following a third visit to the Seventh Circuit, the district court enjoined the Murray suit as defiant of the decertification. The Supreme Court remanded. The Seventh Circuit consolidated the Thorogood and Murray cases for its fourth opinion. On the merits, the court stated that “One would have to have a neurotic obsession with rust stains (or be a highly imaginative class action lawyer) to worry about Sears’ drum,” and that it would “unsay nothing,” in its previous opinions, but vacated the injunction. “We were wrong. The Supreme Court’s decision—rendered after we ordered the injunction … although it does not refer to the All Writs Act, inclines us to doubt that Murray, not having been a party to the Thorogood suit, can nevertheless be bound by a ruling in it, including the ruling decertifying the class.” You can view the 7th Circuit’s decision here.
Articles Posted in Class-Action
Combining Two or More Classes into One Toxic Contamination Action – Thomas v. Wilbert & Sons, LLC
In Thomas v. Wilbert & Sons, LLC, Louisiana’s First Circuit Court of Appeals tackles the tricky situation in which two or more certified classes are combined for trial. While such a scenario can be procedurally complicated, the basic class certification principles – including that a court considering class action certification request or challenge not concern itself with the likelihood of success on the merits of an action – remain the same.
The plaintiffs, residents of a trailer home park in or around Plaquemine, Louisiana, brought the action against the defendants Dow Chemical Company (Dow), Wilbert & Sons, L.L.C. (Wilbert) and other parties claiming that the plaintiffs were injured when Dow allegedly contaminated the Plaquemine aquifer, which provides groundwater to the local area via wells. The plaintiffs seek damages for personal injury due to exposure to the contaminated water as well as property damages – alleging that the contamination damaged their wells and devalued their property – and punitive damages.
While this action was pending, a second group of plaintiffs – which the court refers to as the Robichaux plaintiffs – filed a similar action in neighboring Iberville Parish in March 2002. These plaintiffs did not sue Wilbert, but sought punitive damages and injunctive relief from the state of Louisiana. The Robichaux plaintiffs attained class certification status before the Thomas plaintiffs. In 2007, the Thomas plaintiffs were certified as a class as follows: “[a]ll persons or entities who or which sustained damages to their real property since 1985 due to vinyl chloride, its successors or derivatives in the Plaquemine aquifer, or who were exposed to the drinking water supply at the [trailer home park] which occurred on or before and since the year 1997 near or in Plaquemine…”
The two actions were then consolidated for trial. At this time, the Robichaux plaintiffs appealed the court’s decision to certify the Thomas plaintiffs, arguing that the decision prejudiced their rights as the members of a previously certified class.
Class Action Lawsuits for Water Contamination – Osarczuk v. Associated Univs. Inc.
Toxic contamination class actions often include claims by plaintiffs asserting a whole host of problems, from serious health and medical conditions to wide-scale property damage. In Osarczuk v. Associated Univs. Inc., the New York Supreme Court for Suffolk County considered the additional economic damages caused when drinking water is contaminated.
The plaintiffs, a number of people living near the Brookhaven National Laboratory in Upton, New York, brought an action against the defendant, the laboratory’s owner and operator, alleging that the defendant unlawfully emitted toxic substances such as trichloroethane, tritium, strontium-90, uranium, argon-41 and cesium-137 into the air, soil and ground water near the lab. This, according to the plaintiffs, caused health problems, including cancer, nausea, headaches, and various immune conditions, to people living in the surrounding area as well as property damage and economic damage as a result of being forced to switch water sources. The plaintiffs sought both compensatory and punitive damages for the injuries incurred.
The plaintiffs also asked the court to certify a plaintiff class (broken into various sub-classes) consisting of people who live or work within a 10-mile radius of the lab and who have suffered personal injury or property damage as a result of the alleged pollution.
Class certification allows one or more members of a class of similarly situated plaintiffs to sue on behalf of all class members. Under New York law, a class may be certified only where: (1) the class is so numerous that joinder of all members is impracticable; (2) the class shares common questions of law or fact which predominate over any questions affecting only individual members; (3) the class representatives’ claims are typical of those of the class; (4) the representative parties will fairly and adequately protect the interests of the class; and (5) a class action is superior to other available methods for the fair and efficient adjudication of the controversy. A plaintiff seeking class certification bears the burden of proving that these requirements have been met, but need not prove that it is likely to succeed on the actual merits of the lawsuit.
The court determined that the plaintiffs satisfied each of the requirements for class certification, but limited the class to those persons living in the proscribed radius who allege to have suffered either property damage as a result of the contamination or financial loss when they were forced to switch from free local well water to that provided by the local water authority when the wells allegedly became contaminated. In so doing, the court noted that these class members share common questions regarding both their damages, including the costs attendant with switching to another water source, as well as the defendant’s legal liability for these and other injuries.
Federal Court Indicates Equitable Tolling Only Available in FLSA Cases When There is Evidence of Deception by Defendants
DiTommaso Lubin handles wage and hour class action litigation on a regular basis, and many of our clients’ claims are based upon violations of the Fair Labor Standards Act (FLSA). Our Schaumburg unpaid overtime attorneys were interested to see a recent class-action brought by restaurant workers alleging violations of the FLSA.
Cao v. Wu Liang Ye Lexington Rest., Inc. is a suit filed by twenty-four employees of two restaurants in New York City. The employees worked as waiters, delivery workers, and a food packer for Defendants and filed suit for unpaid minimum and overtime wages, illegal tip deductions, expense reimbursement for the purchase and maintenance of bicycles and uniforms. Plaintiffs also sought statutory liquidated damages, prejudgment interest, and attorneys’ fees. Plaintiffs filed for default, which was granted by the Court. Plaintiffs subsequently submitted their damages calculations and Defendants opposed Plaintiffs’ application for damages on the basis that Plaintiffs’ calculations were inflated and Defendants’ violations of the FLSA were not willful.
The Court addressed Defendants’ arguments by first discussing the applicable law. The limitations period for FLSA claims is generally two years, but is three years for defendants that willfully break the law. The Court then ruled that the three year statute of limitations was applicable because Defendants defaulted and therefore admitted Plaintiffs’ willfulness allegations. The Court also found the longer statute of limitations applied because Defendants admitted that they did not try to learn about the FLSA’s requirements until just prior to the commencement of the lawsuit. Plaintiffs argued that they should receive unpaid wages for the entirety of their employment under the doctrine of equitable tolling due to the fact that Defendants failed to post a notice explaining the FLSA in plain view of employees. The Court saw no reason to extend Plaintiffs’ claims beyond the statutory three year period because Defendants’ had not engaged in any sort of deception or other exceptional activity, and prior case law held that equitable tolling only applies in unusual circumstances. The Court finished by granting Plaintiffs damages for unpaid minimum wage, overtime wages, unlawful tip deductions, reimbursement for bicycle expenses, liquidated damages, prejudgment interest, and attorneys’ fees.
The Court denied reimbursement for uniform expenses because most of the clothing worn by employees could be “worn as a part of the employees’ ordinary wardrobe.” Plaintiffs did also wear a red vest that could be considered outside an ordinary wardrobe, but there was no evidence in the record that Plaintiffs’ incurred expenses obtaining or cleaning the red vests.
Cao v. Wu Liang Ye Lexington Rest., Inc. provides future wage and hour litigants with several lessons when it comes to preparing damages applications. First and foremost, courts are unlikely to apply equitable tolling to extend the FLSA’s statute of limitations in the absence of intentional deception or fraud by defendants. Additionally, this case serves as a reminder that employees should keep accurate records of work related expenses if they wish to recover damages under the FLSA.
The Commonality and Numerosity Requirements in Missouri Class Action Certification – Doyle v. Fluor Corp.
“Commonality” and “Numerosity” are two of a handful of factors that most courts consider in deciding whether to allow a toxic dumping lawsuit to proceed as a class action. In Doyle v. Fluor Corp., a Missouri appellate court explains these requirements and how they should be applied in a particular matter.
Plaintiffs brought the action alleging that Defendants, owners and operators of a smelting (the process by which metal is extracted from ore) business in Herculaneum, Missouri, released lead, heavy metals and other toxic substances into the air, which in turn caused damage to real property in the surrounding area. Plaintiffs sought damages under theories of negligence, private nuisance, strict liability, and trespass. The trial court granted Plaintiffs’ motion to certify the matter as a class action with the class representatives suing on behalf of nearly 400 people who “own and occupy” residential real property in the area near Defendants’ operation.
On appeal, the Court of Appeals for Missouri’s Eastern District upheld the decision to certify the class. A class may be certified under Missouri law where: 1) the class is so numerous that joinder of all members is impracticable; 2) common questions of law or fact exist among the class; 3) the claims or defenses of the representative parties are typical of that of the class; and 4) the representative parties are able to fairly and adequately protect the class’ interest. In addition, a court considering certification must also determine that the common factual or legal questions “predominate over any questions affecting only individual members” and that a class action is more suitable than other methods to fairly and efficiently adjudicate the issue.
In affirming the trial court’s decision, the court noted that the “commonality” requirement does not mean that all issues in a particular action be common to all class members, but instead that the common issues predominate over the others. “A single common issue may be the overriding one in a matter, despite the existence of numerous remaining individual questions,” the court ruled. In this case, several of the action’s central issues were shared among the class, including whether Defendants were responsible for emitting toxic metals in to the air; whether such an act constitutes negligence; and whether the pollution caused property in Herculaneum to be contaminated.
Class Action Certification in Toxic Pollution Cases: It’s Not Whether You Will Win or Lose, but How You Will Play the Game – Price v. Martin
A recent ruling out of Louisiana makes clear that in determining whether a group of plaintiffs in a toxic contamination case should be permitted to bring their claims as a class action, the question is not whether the plaintiffs can ultimately win the case, but whether they’ve simply met the basic requirements for class certification.
Price v. Martin, Louisiana’s Third Circuit Court of Appeal affirmed a trial court’s certification of the plaintiff class in an action alleging that the defendants – local railroad tie manufacturers – contaminated the property surrounding their operation, finding that the plaintiffs met the certification requirements regardless of the likelihood of their success on the merits of their claims.
The plaintiffs are persons residing in Alexandria, Louisiana, near the Dura-Wood Treating Company facility, owned by defendants at various times over a 66-year period. They claim that Dura-Wood’s creosote-treated railroad tie operation contaminated soil, sediments, groundwater and buildings in the surrounding area, damaging the plaintiffs’ property. Following a flurry of motions, the trial court granted certification of the plaintiffs’ class action, allowing representative parties to sue on behalf of roughly 4,700 landowners in the allegedly contaminated area. The appeals court upheld the decision, finding that “[t]he trial court applied the correct legal standard in deciding to certify this class.”
The court quoted the state Supreme Court’s decision in Dukes v. Union Pacific R.R. Co. in describing the nature of class action lawsuits in Louisiana:
A class action is a nontraditional litigation procedure which permits a representative with typical claims to sue or defend on behalf of, and stand in judgment for, a class of similarly situated persons when the question is one of common interest to persons so numerous as to make it impracticable to bring them all before the court. Ford v. Murphy Oil U.S.A., Inc., 96-2913 (La. 9/9/97), 703 So.2d 542, 544. The purpose and intent of class action procedure is to adjudicate and obtain res judicata effect on all common issues applicable not only to persons who bring the action, but to all others who are “similarly situated.” Id.
The court further determined that the plaintiffs satisfied Louisiana’s numerosity, commonality, typicality, adequacy and class definition requirements for certification. Although the facility at issue had three owners who engaged in varying operations using different chemicals over the 66-year period during which the contamination allegedly took place, the court held that “one factual issue is common to the potential class—whether defendants’ off-site emissions caused property damage to the residences in the area surrounding the plant. This issue will not be resolved by examining individual residences in the area. Rather, the elevated toxin levels must be shown on an area-wide basis as emanating from the defendants’ facility.”
Class Certification Order Affirmed By Appellate Court
We recently had a win in the Illinois Appellate Court in S37 v. Advanced Refrigeration. The Appellate Court affirmed the trial court’s decision to certifiy a class action regarding the claims in that. Advanced sells appliances to various businesses and added a charge on its invoices called government processing requirment. This fee was not required to be paid by the government and was not a government mandated fee. Advanced created the fee to recover costs it allegedly incurrs in complying with government requirements. The Class-Action Complaint alleged that the fee was deceptive in that it allegedly made a profit generating fee appear as if it were a government required fee. Advanced denied these allegations and opposed class-certification. The trial court denied Advanced’s motion to dismiss and then certified the case as a class-action.
The Appellate Court granted leave for an appeal of the class-certification decision. Advanced argued that it disclosed the true nature of the fee to all customers and that such alleged disclosure gave rise to individual issues blocking class certification. The Class argued that this defense did not create invididual issues barring class-certification as the defense of full disclosure was common the entire class given Advanced’s claim that it told all customers that the fee wasn’t a government mandated fee or tax as the fee’s name allegedly suggested it was.
The Appellate Court rejected Advanced’s arguments and found that the trial court properly exercised its discretion in certifying the class-action.
The Appellate Court held:
We agree with the plaintiff that this case fits the pattern of cases routinely certified as
class actions by Illinois courts. See Martin v. Heinold Commodities, Inc., 163 Ill. 2d 33, 643
N.E.2d 734 (1994) (resolved as a class action, the court held the commodity option contracts
broker’s disclosure statement was misleading, in violation of the Illinois Consumer Fraud Act,
because the “foreign service fee” to be charged investors was a commission from which it would receive compensation); Harrison Sheet Steel Co. v. Lyons, 15 Ill. 2d 532, 155 N.E.2d 595 (1959)(class action was proper where the defendant refused to refund illegal occupation taxes collected from its customers); P.J.’s Concrete Pumping Service, Inc. v. Nextel West Corp., 345 Ill. App. 3d 992, 1003, 803 N.E.2d 1020 (2004) (“The primary factual issue in this case is a uniform billing practice that allegedly violated the Consumer Fraud Act in the same manner as to all class members. The propriety of such a uniform practice is amendable to being resolved in a class action.”).
The Appelalte Court also noted that the brief of the National Association of Consumer Advocates (which filed a friend of the court submission) stated that class-actions provided a way for small claims like this to proceed to court and to obtain justice when small alleged wrongs in the aggregate allegedly harm many consumers:
“ ‘The policy at the very core of the class action mechanism
is to overcome the problem that small recoveries do not provide the
incentive for any individual to bring a solo action prosecuting his or
her rights. A class action solves this problem by aggregating the
relatively paltry potential recoveries into something worth
someone’s (usually an attorney’s) labor.’ ” Amchem Products, Inc. v. Windsor, 521
U.S. 591, 617 (1997), quoting Mace v. Van Ru Credit Corp., 109 F.3d 338, 344 (7th Cir. 1997).
You can view the full opinion of the Appellate Court by clicking here.
Illinois Court Rules that Class Certification in Toxic Dumping Cases is Not an “All or Nothing” Decision – Leib v. Rex Energy Operating Corp.
It doesn’t take a genius to understand that every person is different. Our daily routines; our likes and dislikes; our physical, spiritual, family and money situations; each of these differences make individuals individual. In the toxic dumping class action context, the Southern District of Illinois has made clear that while personal differences mean that some questions are not suitable for class action proceedings, it should not prevent the court from certifying a class on other common questions central to the action.
In Leib v. Rex Energy Operating Corp., Plaintiffs – residents of Bridgeport, Illinois – filed suit alleging that their properties were contaminated with unsafe levels of hydrogen sulfide (H2S), a poisonous gas, released into the air from the more than 100 nearby oil wells owned by defendant PennTex Resources Illinois, Inc. (“PennTex”) and managed by defendant Rex Energy Operating Corporation (“Rex Energy”). Plaintiffs sought damages for injury to property, injunctive relief restraining Defendants from allowing further contamination and forcing them to abate the existing contamination, the establishment of a Court-administered fund for medical monitoring of class members, punitive damages, costs and fees.
Plaintiffs also filed a motion for class certification, seeking to certify a class of all persons and entities owning property or residing in the area surrounding the wells and including most of the towns of Bridgeport and Petrolia. The court determined that Plaintiffs satisfied the requirements for class certification on the question of whether and to what extent Defendants contaminated the Class Area with H2S, but not as to the question of individual property damage amounts.
The court found that the contamination question involves issues common to the entire class:
Plaintiffs’ claims arise out of the same core of operative facts, that is, the allegation that [Defendants] allowed dangerous levels of H2S to contaminate the air in the Class Area. Such alleged behavior constitutes standardized conduct toward all prospective class members. Resolution of this question — whether and, if so, to what extent [Defendants] caused contamination in the Class Area — will certainly advance the litigation.
The court further found that Plaintiffs’ claims were sufficiently common to those of the proposed class, noting “[P]laintiffs need not allege the same exact injury or be free of factual distinctions so long as their claims are based on the same legal theory.”
Employers Can Require Exempt Employees to Take Mandatory Leave and Still Meet the IMWL Salary Basis Test
At DiTommaso Lubin, we are accustomed to litigating wage claims brought under the Fair Labor Standards Act, and most of our clients have FLSA claims. However, our firm also is well versed in Illinois wage laws, and our Tinley Park wage and hour attorneys discovered an interesting overtime class-action in the Appellate Court of Illinois.
Robinson v. Tellabs, Inc. is wage dispute over a policy instituted by Defendant Tellabs requiring employees to take mandatory unpaid days off. Defendant is a manufacturer of telecommunications components that saw a significant boom in its business during the 1990’s, but saw its profits dwindle after the turn of the millennium. As a result of the downturn in revenue, Defendant laid off a significant portion of its work force and instituted many other cost cutting measures. One of the measures implemented by the company was to institute mandatory unpaid leave several days each year around existing paid holidays. Even after the mandatory unpaid leave policy was instituted, Defendant’s had to lay off additional employees to keep the company afloat.
The named Plaintiff worked as a lead engineer for Defendant while the unpaid leave policy was in effect, and was laid off eleven months after his hiring having never been paid any overtime. Plaintiff then filed a class-action lawsuit alleging that Defendant’s implementation of their mandatory unpaid leave policy made he and similarly situated employees non-exempt for the purposes of the Illinois Minimum Wage Law (IMWL). Therefore, Plaintiffs were entitled to overtime pay for any week in which they worked more than forty hours. The trial court ruled in favor of Defendant and found that the mandatory days off was essentially a prospective salary reduction that served the company’s bona fide business needs.
Plaintiffs appealed the trial court’s decision and claimed that the trial court incorrectly applied the salary basis test in making its ruling. The Appellate Court did not find Plaintiffs’ arguments persuasive and agreed with the trial courts decision. The Court discussed that the rule relied upon by the trial court and set forth by Department of Labor opinion letters, which states “the salary-basis test permits employers to prospectively reduce employees’ salaries for a legitimate business need unless done so frequently that the purported salary becomes a sham attempt to pay an hourly wage.” The Court went on to hold that the rule “refers only to deductions during the current pay period…not reductions in future salary.”
Because Defendant’s policy caused reductions in future salary and the policy was a result of Defendant’s bona fide economic difficulties, the Court found that Defendant satisfied the salary-basis test. Additionally, the Court found the test to be met because the policy was applied uniformly among all employees and was not instituted on an ad hoc basis.
Michigan Toxic Pollution Class Action Stalls in Circuit Court – Dow Chemical v. Henry
A Michigan court recently pumped the breaks on a class action toxic pollution suit against Dow Chemical, finding that while property owners may be able to prove that the chemical giant contaminated local rivers and surrounding property with toxins, the plaintiffs did not meet the standards for bringing the suit as a class action.
The Michigan Messenger’s Eartha Jane Melzer reports that “[o]perations at Dow’s Midland plant have spread dioxin — a highly toxic and cancer-causing byproduct of the chemical manufacturing process — and other chemicals, through the Tittabawassee and Saginaw Rivers and into Lake Huron. Flooding of the rivers downstream from Dow has deposited dioxin-laden sediments on properties in the floodplain.”
Dow Chemcial v. Henry concerns a suit by roughly 150 Tittabawassee property owners filed against Dow on behalf of the more than 2,000 people with property in the floodplain in 2003 and claiming that their property had lost value due to contamination. Two years later, Saginaw County Judge Leopold Borello certified the class of property owners, a ruling that Dow appealed to the Michigan Supreme Court.
In order to be certified as a class, Michigan law requires that a group of plaintiffs meet the following criteria:
(a) the class is so numerous that joinder of all members is impracticable;
(b) there are questions of law or fact common to the members of the class that predominate over questions affecting only
individual members;
(c) the claims or defenses of the representative parties are typical of the claims or defenses of the class;
(d) the representative parties will fairly and adequately assert and protect the interests of the class; and
(e) the maintenance of the action as a class action will be superior to other available methods of adjudication in promoting the convenient administration of justice.
MCR 3.501(A)(1). On appeal, the state supreme court remanded the case to Judge Borello, requiring that he analyze the action under criteria (c) and (d) above.
Upon further consideration, Borello reversed his earlier approval of class status for the group. In so doing, he relied on the recent U.S. Supreme Court decision in Wal-Mart Stores v. Dukes, a 5-4 ruling in which the court reversed a lower court’s decision to certify a class of women employees alleging bias in pay and promotions, noting that the company’s decentralized structure meant that the case involved millions of employment decisions and that the women failed to show “some glue holding the alleged reasons for all those decisions together.”