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Class Action Defense

As a Harvard Law Professor noted recently in an American Bar Association publication entitled Class Actions Today, despite Congress’s enactment of the Class Action Fairness Act of 2005 (CAFA), class action practice appears to be as vigorous as ever.  Although CAFA in essence federalized many class actions that could previously have been litigated in state courts, class actions remain alive and well in both state and federal court, and North Carolina’s rules on class certification are much different, and much simpler, than the federal rules.   

The reality is that very few class actions are ever tried on the merits.  The cases are either won by the defendants at the class certification or summary judgment stage, or the cases are ultimately settled.    

Poyner Spruill has a significant track record of litigating, winning and creatively settling class actions in state and federal court, both pre and post CAFA.  The following are a representative sample of the kinds of cases we have litigated: 

  • Laws v. Priority Trustee Services of North Carolina, LLC, U.S. District Court for the Western District of North Carolina.  We were lead counsel in an $11 million class action lawsuit against a law firm and the firm it hired to perform foreclosure sales. The plaintiffs had alleged that the relationship between the law firm and the foreclosure firm created a conflict of interest, and that therefore both firms had breached fiduciary duties to a potential class of thousands of borrowers. We moved to dismiss the complaint on the basis that the plaintiffs had impermissibly relied on State Bar Ethics Opinions to support their theory of liability, and the District Court dismissed the Complaint. The Fourth Circuit affirmed, holding for the first time in the Fourth Circuit that a violation of the ethics rules governing lawyers cannot be used in support of recovery in a civil action in North Carolina.
  • We represent MedAmerica Insurance Company in North Carolina State Court brought on behalf of a purported class of 3000 current and retired state employees and their dependents who purchased long term care (LTC) insurance through a plan sponsored by the State Health Plan.  Plaintiffs alleged that their LTC rates increased more than they should have when the State terminated its contract with MedAmerica at the end of 2004 and replaced MedAmerica with another LTC carrier whose rates were significantly higher.  MedAmerica and the State Health Plan cross-claimed against each other.  The case was resolved favorably for MedAmerica in 2009.
  • Coleman v. Estes Express Lines et al., California State Court.  We represent Estes Express Lines in a case in which the plaintiff filed suit on behalf of a class of all hourly employees in the state of California alleging violations of multiple state wage and hour laws, including failure to provide mandatory meal and rest periods, failure to pay overtime, failure to provide a statutorily compliant wage statements, and failure to timely pay final wages upon termination of employment.  Plaintiff also alleged claims under the California private attorney general statute and unfair business practices statutes based on the same alleged wage and hour violations. The case is ongoing.
  • We represented Estes Express Lines, Inc. in a class action in U.S District Court for the Southern District of Indiana involving wage and hour claims.  Class counsel initially sought damages for the class well in excess of  $5 million.  The case was resolved by payment of slightly more than $100,000 to the class.
  • We defended RPM Lincoln Mercury, Inc. in a consumer class action in Durham County, North Carolina Superior Court that alleged an automobile dealer charged customers interest rates in excess of the rates permitted by North Carolina law.  The individual plaintiff’s case was settled for a nominal amount and all the class allegations were dismissed.
  • In Armstrong v. Leith, Inc., filed in the U.S. District Court, Eastern District of North Carolina, we were lead counsel in defense of a class action alleging violation of the federal Consumer Leasing Act and fraud in connection with automobile leasing.  The case was dismissed on summary judgment while plaintiff’s motion for class certification was pending.
  • Biery v. Estes Express Lines, Inc., U.S. District Court, District of West Virginia.  We were counsel in defense of a class action alleging an employer wrongfully discharged employees for excessive use of health care benefits provided by the employer.  The case was voluntarily dismissed after depositions of six named plaintiffs.
  • Burkes v. Centura Bank, U.S. District Court, Eastern District of North Carolina. We were lead counsel in defense of a class action alleging Consumer Leasing Act violations in automobile lease disclosure forms.  This case settled.

Contacts

  • David DreifusPartnert: 919.783.2817f: 919.783.1075
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