Breaking News: Denial of class certification affirmed in Vioxx Class Cases

With the holidays upon us, the topical and interesting news stories have been few and far between.  But the drought cannot last forever.  Today, the Court of Appeal (Second Appellate District, Division Three) issued an Opinion in which it affirmed the trial court's denial of class certification in the matter of In re Vioxx Class Cases (December 15, 2009).  I will need to read this Opinion with some deliberation before writing an extended post about it.  However, a few things jumped out immediately and are worth noting now.  Tobacco II is mentioned early in the Opinion, and I assumed that the Opinion would join the few recent Opinions that appear to conflict with Tobacco II.  That does not appear to be the case here:  "Nonetheless, it is clear from Supreme Court authority that recovery in a UCL action is available in the absence of individual proof of deception, reliance, and injury. (Tobacco II, supra, 46 Cal.4th at p. 320.)"  (Slip op., at 25 n. 19.)  Instead, the Court of Appeal affirmed the trial court's denial of class certification on the basis of damage-related issues: "The trial court’s findings with respect to the measure of damages are sufficient to support its denial of class certification with respect to the UCL and FAL causes of action."  (Slip op., at 25, emphasis added.)  This damages discussion, and some remarks about typicality, will require more reading and a longer post.

Update on 2009-12-15 23:27 by The Complex Litigator

The trial court judge was Victoria Chaney.  Associate Justice Victoria Chaney now sits in Division One of the Second Appellate District.

From Bridgeport's 6th Annual Wage & Hour Litigation Conference: Future attacks on Gentry v. Superior Court

I'm attending Bridgeport's 6th Annual Wage & Hour Litigation Conference. Today, one topic of discussion is the subject of class arbitrations after Gentry. According to Steven Katz, partner at Reed Smith LLP, Gentry is one of the California Supreme Court's most erroneously-reasoned decisions in quite some time. That's not the interesting part (it's the funny part). The interesting commentary comes from how the defense bar hopes to limit Gentry.

Mr. Katz starts from the premise that Gentry. does not state a bright-line rule precluding class action waivers in all wage & hour class actions. The defense bar hopes to elicit further review of Gentry by challenging trial and appellate orders that impose a bright-line rule when invalidating arbitration agreements with such waivers. The protective measure that plaintiffs should take is to draft proposed orders that identify the four-factor test from Gentry as having been satisfied.

The second major challenge to Gentry that is being tested at the appellate level is a species of "field" preemption. The defense contention is that Gentry allows for a type of contract impairment that isn't directed at arbitration agreements directly, but nevertheless affects only those types of agreements. This argument disregards the fact that the principles in Gentry are subject-neutral. It is merely the nature of the effect of these agreements that renders them invalid. The factors in Gentry don't seek out just arbitration agreements with class action waivers. Despite that weakness in the defense-side argument, plaintiffs should handle these arguments with great care. This species of "field" premption is very complex, and the attorneys bringing these arguments often have an advantage in the form of repeated experience with them. Don't take a novel preemption argument lightly.

Banks can require U.S. citizens to provide social security numbers on credit card applications, despite accepting alternative forms of identification from foreign nationals

In Howe v. Bank of America N.A., plaintiffs, on behalf of a putative class of “individuals of U.S. national origin and/or ancestry, as well as naturalized individuals,” sued Bank of America and other companies. They alleged that Bank of America and other defendants had discriminated against the class in violation of the Unruh Civil Rights Act (Civ. Code, § 51 et seq.) by requiring that United States citizens provide a Social Security number to open a particular type of credit card account, while allowing foreign nationals to open such accounts with only alternative forms of identification.  Slip op. at 2.  The trial court sustained the defendants' demurrer.  The Court of Appeal (Fourth Appellate District, Division Three), affirmed, finding that Bank of America's actions were facially reasonable in that they complied with federal minimum identification regulations.

Dragon Dictation is now available in the iPhone app store

Dragon Dictation, which is a simplified version of the PC software, Dragon NaturallySpeaking, is now available in the iTunes App store.  And, for some limited amount of time, it is FREE.

What You See:

This application is simple, but very nice.  At launch, all you see is a button, with text that reads, "Tap here and dictate."  Go on, tap!  The application immediately begins recording what you say.  When you are finished, press another button, and the speech-to-text conversion occurs.  Once you have text, you can either edit the text or export it to e-mail on your phone, text messaging, or the clipboard.  If you don't like the virtual keyboard, this program offers a way to write a significant amount of text in a hurry.

It Works:

In my testing, it was shockingly accurate.  Admitedly, I tested the application is a quiet room, with no significant background noise.  Dragon Dictation recognized punctuation and "new line" commands.  I'm still amazed at the quality of the recognition from a phone.  A phone.

Update on 2009-12-08 23:04 by The Complex Litigator

I have spent some more time working with dragon dictation, and I continue to be impressed with the accuracy of the voice recognition. I have tried using the application in environments where there is background conversation, and the microphone on the iPhone is able to isolate my voice from remote background sounds. While the recognition is not perfect, and no application of this type promises perfection, it is still a valuable tool for dictation when typing is not a reasonable alternative. This update to my post was drafted entirely with dragon dictation. It required only one correction. I had to change the word protection to perfection.

Courtroom View Network is providing live coverage of eBay v. Craigslist

The Delaware Court of Chancery, in Georgetown, Delaware, is playing host to a wild one.  Courtroom View Network is now providing live coverage of eBay v. Craigslist, otherwise known as eBay Domestic Holdings, Inc. v. Craig Newmark.  California online mainstays eBay and Craiglist are involved in a bi-coastal battle over director voting rights and the alleged theft of confidential information.  In a nutshell, eBay claims that Craiglist's directors unfairly diluted eBay's 28.4 percent minority shareholder stake in Craigslist and eliminated eBay's right to appoint a director.  In another lawsuit filed in San Francisco, Craigslist claimed that eBay used its shareholder position to obtain confidential competitive information to gain an unfair commercial advantage in developing eBay's own competing online classified ad business, kijiji.com.

Courtroom View Network is providing free access to a sample clip of cross-examination of Meg Whitman, the former CEO of eBay.  Other media outlets have more coverage of the opening day of trial.  See, e.g., Shannon P. Duffy, Craigslist, eBay Face Off in Closely Watched Trial (December 8, 2009) www.law.com.

True, it's not a class action, but this is complex litigation at its best.  Two cyber-goliaths trying to strangle each other on opposite sides of the country is too good to pass up.  I just don't know who to root for.

Bates v. Rubio's Restaurants, Inc. reminds defendants to be sure the class list is complete before the money starts flowing

While most of this opinion has nothing to do with class actions and everything to do with whether a judge can sua sponte reconsider a prior order and then recuse himself in the same minute order, Bates v. Rubio's Restaurant's Inc. (November 30, 2009) includes an important lesson for the administration of class action.  The Court of Appeal (Fourth Appellate District, Division Three) affirmed an interesting order of the trial court that had a significant effect on the constituency of a class in a settlement.  The concise summary of key events sets the stage for the discussion that follows in the opinion:

The parties in this wage and hour class action litigation entered into a $7.5 million settlement agreement, providing for three payments of $2.5 million to approved class members. After the initial $2.5 million payment was distributed among 529 approved class members, defendant and appellant Rubio‟s Restaurants, Inc. (Rubio‟s) realized it had not provided the names of all potential class members to the settlement administrator. One hundred forty potential class members had not received notification of the settlement.

After postjudgment briefing and status conferences, the court ruled that the 140 late-identified class members should receive notice and be folded into the settlement agreement. Later, the judge reconsidered his ruling sua sponte and vacated it. In the same minute order, the judge, citing Code of Civil Procedure section 170.1, subdivision (a)(6)(A)(i), then recused himself from any further proceedings in the matter, in the interests of justice.

Slip op., at 2.  Rubio's argued that the recusal negated the validity of the portion of the order vacating the prior ruling.  The Court of Appeal said that was nonsense, concluding that the trial court could properly rescing its earlier ruling and later, in the same minute order, recuse itself.

The only reason for all the fuss was the fact that 140 class members can file another class action and state with great certainty that they didn't receive notice of the prior settlement.  There's your class action angle.

in brief: Majority of California Supreme Court sets 1-1 punitive damage to compensatory ratio on facts in Roby v. McKesson Corporation

In Roby v. McKesson Corporation, the second opinion issued today by the California Supreme Court, the Court held, among other things, that on the facts and circumstances presented, a 1-1 punitive damage to compensatory damage ratio was the constitutional ceiling.  Justice Werdegar authored a dissenting opinion (to which Justice Moreno concurred) on the Court's punitive damage holding, concluding that the facts and circumstances of the case supported a 2-1 punitive damage to compensatory damage ratio.  The case concerns allegations of wrongful discharge, discrimination and harassment.

Costco Wholesale Corp. v. Superior Court puts the privilege in attorney-client privilege

This morning the California Supreme Court issued its opinion in Costco Wholesale Corp. v. Superior Court.  If you don't remember this case, the Trial Court granted a Motion to Compel the production of documents that included a partially redacted letter from outside counsel to Costco, commenting upon the appropriateness of classifying certain managerial employees as exempt from California’s overtime pay laws and regulations.  Then a Petition for a Writ was filed, an OSC issued, the OSC was dismissed without an opinion, the Supreme Court directed the Court of Appeal to issue an OSC, the matter was heard, and, finally, the Petition was denied.  The Supreme Court subsequently granted a Petition for Review.

Without getting into the nuts and bolts of the ruling at this time, the Supreme Court's determination was clearly stated in the opening paragraph:

In this case we consider whether the trial court erred by directing a referee to conduct an in camera review of an opinion letter sent by outside counsel to a corporate client, allowing the referee to redact the letter to conceal that portion the referee believed to be privileged, and ordering the client to disclose the remainder to the opposing party. We conclude the court‟s directions and order violated the attorney-client privilege, and violated as well the statutory prohibition against requiring disclosure of information claimed to be subject to the attorney-client privilege in order to rule on a claim of privilege. (Evid. Code, § 915, subd. (a).)

Slip op., at 1.  The opinion is unanimous, but Chief Justice George offers interesting remarks about the nature of what constitutes an attorney-client communication in a concurring opinion.

Adobe rolls out significant upgrades to Acrobat.com, improving both the user experience and the "under the hood" machinery

On November 21, 2009, Adobe® released a substantial update to Acrobat.com.  I spent some time poking around my Acrobat.com accounts to see the updates in person, and some new features will be of interest to legal professionals.

Before commenting on the updates, I want to take a moment to recap the basic of what is offered at Acrobat.com.  Acrobat.com contains aspects of what the digerati would call "cloud computing."  The files you create and/or store on Acrobat.com are "in the cloud," not on your computer.  If hearing "cloud computing" makes you ill, then just refer to Acrobat.com as a collection of services hosted online.  Users can create basic word processing documents (Adobe Buzzword®), presentations (Acrobat.com Presentations), basic spreadsheets (Acrobat.com Tables), upload a variety of file formats and quickly convert them to PDF, store files, easily share files with others or launch an Adobe ConnectNow online meeting and collaborate on documents in real time.  The experience presented in your browser is based on the Adobe Flash® Platform.

Before the most recent Acrobat.com update, I was already using the file sharing tools right on this site to embed a flash-based PDF viewer that shows visitors documents stored on Acrobat.com.  I have also used the storage and sharing functions to deliver large documents to others.  These services almost always worked for me exactly as promised (in the early days of Acrobat.com, there were times when files would get stuck in some sort of an anti-virus scan queue for hours or never show up; that issue was resolved quite a while ago).

Now I want to mention some of the key improvements to the Acrobat.com suite of hosted tools that might interest lawyers.  First, Acrobat.com now offers a unified interface as the starting point for most Acrobat.com applications.  Previously, the interface was somewhat disjointed.  Now, users see file organizer with a much-improved interface:

From this launch point, a user can share files, upload files, create "collections" to organize files, and so on.  One very imporant feature set that has been added here is the ability to export to a variety of file types, depending upon whether you are working with a word processing document, a presentation, or a spreadsheet.  Presentations now includes support for importing PPT/PPTX files.  In other words, you can build a presentation on Acrobat.com and then convert it to PowerPoint if you want to use that tool in a setting where online connectivity is an issue.  Similarly, users can export their tables to PDF, XLS or CSV for sharing data in whatever format is best suited for the situation.  Buzzword supports export in DOC, DOCX, RTF, TXT, ODT, ZIP, PDF, and now EPUB, the electronic book publishing format for eBook readers such as Stanza on the iPhone, Sony Reader, and others.

A side comment:  The addition of EPUB support is smart on Adobe's part.  With Flash and Acrobat.com, Adobe is right in the thick of a brewing battle for control over the format in which various types of content will be delivered to you in the future.  It's probably not to extreme to say that Apple despises Flash.  It won't support it on the iPhone, and Apple is hoping that the html 5 specification will marginalize Flash.  Google is probably no huge fan of Flash either and would likely prefer html 5 to do in Flash as well.  But Flash is everywhere.  It is ubiquitous on the web.  By supporting EBUB, Adobe is offering support for an open ebook format (and sticking Apple and Amazon's Kindle in the eye at the same time).  By demonstrating that data stored on Acrobat.com will not remain hostage to a single proprietary document format, Adobe may woo more users.

Presenations receive some added features as well.  You can browse through color sets created by designers in Adobe Kuler.  Instead of using the same color schemes, these sets let you appear to be a bit more color coordinated when you design a Presentation.  You can also now search Google and Flickr for images in include in Presentations:

These improvements make Presentation a credible tool for assembling a basic presentation.  With the ability to incorporate FLV video, Presentation is now an interesting option.  The ability to export to Powerpoint formats adds the peace of mind that you won't have to wing it when the wifi hotspot you were counting on isn't working.

Acrobat.com is also planning on the ability to integrate with a mobile applications.  The Acrobat.com mobile application by scanR® will allow users to upload document images from a supported mobile phone and have them automatically stored as searchable PDF files in Acrobat.com. In addition, users can read their files stored in Acrobat.com, share files with others and fax documents from their Acrobat.com organizer or directly from their smartphone. Users of the free service will be able to send two outbound faxes and upload up to five documents from a mobile phone. An upgrade is available for users that need to fax or upload more documents.  I'd love to say that I've used the Acrobat.com mobile application on the iPhone and tell you about my experiences, but the Apple application review process is so broken that they still don't have Adobe's application available.  I was told by Adobe that they submitted it quite some time ago, but since some developers have been waiting for months just to get a bug fix pushed out, who knows when Apple will get around to approving an application for its good buddies at Adobe.

One benefit of using the Acrobat.com tools is the ability for multiple authors to work on documents at the same time.  Multiple authors can contribute to slides in a Presenations, enter data in a Table or draft content and comments in a Buzzword document.  This enables true collaborative document creation.  Lawyers in different locations could work on an agreement together, rather than playing document tennis with e-mail.

My comments about Acrobat.com do not cover the full set of features enabled for each of the applications on Acrobat.com.  I'm just hitting some of the interesting highlights.  I am interested to see whether users will embrace Acrobat.com or one of the other 800 pound gorillas in the room that are moving into the "cloud computing" space (i.e., Microsoft, which is moving Office tools online, and Google, with its hodgepodge of online services).  I don't believe Google's "do no evil" schtick.  I am not comfortable with Google ending up as the company that knows about everything I search for and everthing I store.  I want multiple competitors in this space so I have options when one goliath or another is naughty with my bits.  Adobe still suffers from a bit of closed format-itis, but Adobe may be adjusting to the times with the EPUB move.

You can follow Acrobat.com on twitter: www.twitter.com/acrobatdotcom

As a final note, I don't receive any premium access to Acrobat.com.  I just get the services I am willing to pay for right now, which is the free service.

Costco Wholesale Corp. v. Superior Court and Roby v. McKesson Corporation opinions will be available November 30, 2009

Because of the Thanksgiving holiday, the Supreme Court announced opinion filings that will be published on Monday, November 30, 2009.  The Court's Notice is available here.

Costco Wholesale Corp. v. Superior Court, previously mentioned on this blog here, will address the following issues:

(1) Does the attorney-client privilege (Evid. Code, § 954) protect factual statements that outside counsel conveys to corporate counsel in a legal opinion letter? (2) Does Evidence Code section 915 prohibit a trial court from conducting an in camera review of a legal opinion letter to determine whether the attorney-client privilege protects facts stated in the letter?

And Roby v. McKesson Corporation will address the following issues:

(1) In an action for employment discrimination and harassment by hostile work environment, does Reno v. Baird (1998) 18 Cal.4th 640, require that the claim for harassment be established entirely by reference to a supervisor’s acts that have no connection with matters of business and personnel management, or may such management-related acts be considered as part of the totality of the circumstances allegedly creating a hostile work environment? (2) May an appellate court determine the maximum constitutionally permissible award of punitive damages when it has reduced the accompanying award of compensatory damages, or should the court remand for a new determination of punitive damages in light of the reduced award of compensatory damages?