• On January 4, 1999, the California Supreme Court made it easier for out-of-state residents to file securities class actions. According to the Court, the California Corporate Securities Code creates a civil remedy for out-of-state purchasers who bought stock that was subsequently affected by market manipulation, even though the purchase or sale took place outside of California. The case has been widely discussed because of its potential impact on the level of class action activity in California state courts. See Diamond Multimedia Sys., Inc. v. Superior Ct. of Santa Clara County, S058723 (January 4, 1999).
  • The Stanford Securities Class Action Clearinghouse reports in its most recent Federal Litigation Box Score that between December 22, 1995 and January 18, 1999, 522 companies have been sued in federal court. The most frequent target of class action litigation is the high-tech industry, and the Northern District of California is the most active district court. Fifty-nine percent of the cases filed allege accounting fraud; fifty-five percent allege insider sales. Source: http://securities.stanford.edu. 
  • Los Angeles trial lawyer has filed three class action lawsuits asserting that sport card companies are inducing children to gamble. Sport card companies print limited quantities of certain cards-usually with pictures of the most popular sports stars-and randomly insert them into packs. Plaintiffs' attorney, Henry Rossbacher, believes that card companies encourage speculation by printing the odds of getting one of these valuable cards in a pack. The lawsuit claims that card companies have created a lottery and should be forced to pay damages to children who have been lured into buying the cards. Source: Valley Morning Star, August 11, 1998
  • On December 17, 1998, the law firms of Bernstein, Litowitz, Berger & Grossman and Sherman, Silverstein, Kohl, Rose & Podolsky entered into an agreement to settle a Y2K class action lawsuit they filed against Medical Manager Corporation, manufacturer of an integrated physicians' practice management system. The lawsuit alleged that Medical Manager violated various state consumer protection and unfair trade practice laws and breached implied and express warranties by selling software that was not Y2K compatible, failing to disclose this fact to purchasers, and then requiring users to expend significant sums of money to upgrade to a Y2K compatible version. This case represents only the second Y2K class action to reach a settlement. Source: http://biz.yahoo.com/bw/981217/bernstein_1.html. 
  • A class action suit has been filed in Michigan state court against Budget Rent-A-Car for discriminating against minority customers. The suit alleges that Budget sets rates based on residential zip codes, in order to help to gauge a renter's ethnicity. The Plaintiffs, who are all Black, were allegedly charged more for their vehicle rentals than whites. The Plaintiffs' attorney has said that "even though Budget claims this practice did not target minorities, about eighty-four percent of the consumers who were overcharged were African-American." Source: http://news.stocksmart.com. 
  • On December 15, 1998, shareholders and employees of Crown Central Petroleum Corp. filed a lawsuit against CEO Henry Rosenberg and various corporate officers and board of directors. The lawsuit seeks damages from Rosenberg and the other defendants on the ground that their gross mismanagement of and self-dealing in the company caused its stock price to drop eighty percent in the past ten years and forced the sale or closure of many of its four hundred gas stations and convenience stores. Source: http://www.milberg.com. 
  • United State District Court Judge Barefoot Sanders of the Northern District of Texas has denied class certification in a product liability lawsuit seeking injunctive relief and damages from the manufacturer of Aleve, the over-the-counter version of the pain-killer Naprosyn. In the complaint, the lead plaintiff alleged that she suffered gastrointestinal injuries after taking the defendant's product for more than ten days. Judge Sanders held that certification of an injunctive class is inappropriate where monetary relief predominates, noting that an award of damages would require individualized proof of harm which is not incidental to injunctive relief the plaintiff was seeking. See Woodell v. Proctor & Gamble Manufacturing Co., No. 3:96-CV-2723-H (N.D. Tex. Sept. 30, 1998).
  • Defendants achieved a Pyrrhic victory of sorts in the first class certification ruling to be handed down in a state diet drug case. A New Jersey Superior Court has denied class certification in the consolidated lawsuit because under New Jersey's "entire controversy" rule, a class action would preclude absent members from pursuing personal injury claims in the future. The Superior Court did find, however, that the plaintiffs satisfied the four standard elements for class certification under federal and most state laws-numerosity, commonality, typicality, and adequacy of representation-which is likely to encourage plaintiffs to refile their claim in another state. See In re Diet Drug Litigation, No. 240 (N.J. Superior Ct., Middlesex County, Oct. 7, 1998).
  • In a multi-district lawsuit against a diet drug manufacturer, Judge Louis C. Bechtle has preliminarily approved a settlement proposal by defendant Interneuron Pharmaceuticals Inc. with all plaintiffs nationwide who have alleged injuries from using its product, dexfenfluramine (Redux). The settlement fund is expected to total over one hundred million dollars. Source: Pharmaceutical Lit. Rep. (November 1998).
  • In West Virginia, a plaintiff who filed a product liability action against various tobacco companies has asked the County Circuit Court to certify a class of West Virginians who have suffered personal injury from cigarette smoking. See Ingle v. Philip Morris Inc., No. 97-C-21-5 (W. Va. Cir. Ct., McDowell County, Sept. 3, 1998).
  • The United States Court of Appeals for the Third Circuit has upheld a district court order decertifying a class of Pennsylvania smokers who sought medical monitoring expenses and entering summary judgment against the six individual class representatives. The court held that the treatment was inappropriate because the three significant issues-nicotine addiction, the need for medical monitoring, and the application of the statute of limitations-must be resolved for each member of the class. See Barnes v. Tobacco Co., No. 97-1844 (3d Cir. Nov. 12, 1998).
  • The California Supreme Court has granted a petition for review to DuPont Merck Pharmaceuticals Co. on the issue of whether a consumer fraud class action brought by users of its Warfarin blood thinner was a "SLAPP" suit that violated the company's First Amendment rights. The issue in question is whether the defendant was exercising its constitutionally protected right to free speech when it attempted to persuade California legislators, health insurance companies, and medical providers that a competitor's new generic version of the defendant's top-selling Coumadin oral blood thinner was dangerous and should be kept off the market. See DuPont Merck Pharmaceuticals Co. v. Orange County Superior Ct., No. S073419 (Cal. Sup. Ct. Nov. 6, 1998).
  • On December 14, 1998, Plaintiffs Marcia Speilholz, Debra Petrove, and the Wireless Consumer's Alliance, Inc., filed a class action lawsuit in Los Angeles Superior Court, alleging that Los Angeles Cellular Telephone Company falsely and deceptively advertises its cellular coverage area to current and prospective subscribers. The San Francisco law firm of Lieff, Cabraser, Heimann & Bernstein avers that Spielholz was the unfortunate victim of an attempted carjacking incident who was unable to obtain emergency assistance because when the attack occurred she was located in an area where L.A. Cellular allegedly had an undisclosed gap in its coverage. Source: http://lchb.com/lacellular.htm. 
  • A class action suit was brought on behalf of Bank of Boston account holders against the Bank alleging the Bank was keeping too much of its customers' money by placing their funds in escrow accounts without paying them interest. The case concluded with the Bank agreeing to settle the plaintiffs' claim. The lawyers representing the plaintiff class received $8.5 million in fees to be split among themselves; each customer received $10. Moreover, additional legal fees owed by the bank under the settlement amounted to $100 per customer and the bank deducted the extra fees from each customer's account, resulting in a $90 net loss to each bank customer. "In short, having been included in a lawsuit they never envisioned, [the plaintiffs] had their own money from their own escrow accounts taken to pay class counsel . . . ." Source: Testimony of Ralph G. Wellington Before the House Judiciary Committee (March 5, 1998) at http://www.house.gov/judiciary/41160.htm. 
  • In January of this year, a class action lawsuit was filed in California and Saipan against eighteen U.S. clothing manufacturers and retailers, including The Gap, Tommy Hilfiger, May Company, Sears, and Wal-Mart, for the alleged mistreatment of workers in foreign-owned factories operating on U.S. soil. The lawsuit accuses these companies of violating federal racketeering laws for using indentured labor to produce clothing of the island of Saipan (part of the Mariana islands which is a U.S. Commonwealth in the South Pacific), and for failing to pay overtime, or maintain appropriate working conditions. Source: http://www.milberg.com. 
  • Judge Martin L.C. Feldman, of the U.S. District Court for the Eastern District of Louisiana, recently dismissed on preliminary motions large class actions involving claims that the air bags used in every vehicle in the United States, through the 1997 model year, were defective because they might cause some future injury. None of the representative plaintiffs had suffered any present harm or injuries, or had any problems with the air bags, and the proposed class specifically excluded anyone who alleged injury as a result of air bag use. See In re Air Bag Products Liability Litigation, 1998 WL 279237 (E.D. La. 1998).
  • The Phoenix district office of the EEOC recently announced that it had settled a class action lawsuit against Southwest Supermarkets, Inc., for one million dollars. The class action had alleged that the supermarket chain permitted sexual harassment to take place in its stores. Southwest, which did not admit to any wrongdoing, agreed to pay $800,000 in compensation to forty-four current and former female employees and to set aside an additional $200,000 for other people who may come forward in the future. The law firm of Lewis & Roca, which reported on this story in its Arizona Employment Letter, offered this view of the settlement: "Employers take note-if we were to report to you that an employer settled a sexual harassment case for $18,000, this would not be very earth-shattering news, would it? But look what happens when the facts turn into a 'class action'-multiply $18,000 by forty-four employees or more, and your looking at a settlement of this magnitude. Be forewarned-the class and 'mass' action is the wave of the future and is very costly to defend and settle."
  • In testimony before the House Judiciary Committee on March 5, 1998, attorney Sheila Birnbaum of Skadden, Arps, Slate, Meagher & Flom, reported on a study by Stateside Associates, which examined class action litigation by collecting data from the court files of six Alabama counties over a two-year period. The study, which yielded the "Stateside Report," found, inter alia, that (1) ninety-one class actions were filed in the six rural counties during the two years studied; (2) forty-three class actions were certified in these six counties in the period covered; and (3) at least twenty-eight of the certified class action were nationwide class actions and the primary target defendants were large multinational corporations. Source: http://house.gov/judiciary/42030.htm. 
  • In its November 1998 issue the Mass Tort Litigation Reporter wrote that on September 28, "[a]ttorneys from approximately thirty law firms representing asbestos plaintiffs met in Washington, D.C. . . . to discuss and compare recent offers by Owen Corning to settle large groups of asbestos cases." The article reports that Owens Corning has been "making a concerted effort to settle thousands of cases nationwide" by offering different settlement packages to selected firms in the hopes of settling large inventories of claims.