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When are McDonald’s Uniformed Shift Workers Similarly Situated? Court Denies Motion for Conditional Certification in FLSA Litigation
In Pullen v. McDonald's Corp., Nos. 14-11081, 14-11082, 2014 WL 4610296 (E.D. Mich. Sept. 15, 2014), two groups of plaintiffs filed collective action lawsuits under the Fair Labor Standards Act (“FSLA”) against different owners and operators of McDonald’s restaurants. The Court denied motions for certification. Read More ›
The federal district court for the Northern District of California held that where Plaintiffs alleged specific incidents and injuries resulting from an intentional data security breach, those Plaintiffs could survive a motion to dismiss based upon standing and related issues. Read More ›
CAFA’s “local controversy” exception cannot be triggered by adding a local defendant post-removal, says Fifth Circuit
On an issue of first impression, a unanimous panel of the Fifth Circuit Court of Appeals recently held that the applicability of CAFA’s local controversy exception to federal jurisdiction “depends on the pleadings at the time the class action is removed” and the exception cannot be triggered by a plaintiff’s post-removal addition of a significant local defendant. Cedar Lodge Plantation, LLC v. CSHV Fairway View I, LLC, 2014 WL 4799702 (5th Cir. Sept. 26, 2014).
The local controversy exception provides that a district court “shall decline to exercise jurisdiction” under CAFA with respect to a class action in which (1) more than two-thirds of the proposed plaintiff class(es) are citizens of the state in which the action was originally filed, (2) there is at least one in-state defendant against whom “significant relief” is sought and “whose alleged conduct forms a significant basis for the claims asserted” by the proposed class, (3) the “principal injuries” resulting from the alleged conduct of each defendant were incurred in the state of filing, and (4) no other class action “asserting the same or similar factual allegations against any of the defendants” has been filed within three years prior to the present action. 28 U.S.C. § 1332(d)(4)(A).
As a general matter, it is well established that federal jurisdiction – including jurisdiction under CAFA – is established at the time of removal and cannot be destroyed by post-removal events. However, several courts have concluded that the local controversy exception operates as a mandatory abstention provision, separate from CAFA’s requirements for subject matter jurisdiction. In an earlier post, we noted the growing consensus among federal courts that the local controversy exception and the related “home state” exception, unlike jurisdictional requirements, can be waived by plaintiffs.
In Cedar Lodge, the district court further distanced the exception from traditional jurisdictional analysis by holding that, where the plaintiffs amended their complaint to add a significant local defendant after removal and the amendment was not shown to be solely for the purpose of forum manipulation, remand to the state court was mandated. 2014 WL 972033 (M.D. La. Mar. 12, 2014).
The Fifth Circuit Court of Appeals – in a somewhat terse opinion – reversed, finding that the text and history of the statute establish that the local controversy exception must be analyzed with respect to a class action when it is filed, not based on later events. Read More ›
The Construction Law News Blog is a resource for today's construction industry professionals. The blog discusses a variety of legal issues. Some of these issues include risk management, contract preparation, payment disputes and dispute resolution.
On July 31, 2014, President Obama issued the latest in a series of executive orders impacting government contractors. This order, titled “Fair Pay and Safe Workplaces”, mandates contractors self-report any issues they may have had in complying with various labor laws. While the specifics of this new self-reporting requirement will be set out in forthcoming regulations, contractors can expect that their regulatory burdens have taken a substantial step up. In addition, the order impacts the enforceability of arbitration agreements contained in certain employment contracts. Each of these major changes is addressed below. Read More ›
On July 17, 2014, the Ohio Supreme Court continued its literal interpretation and application of construction contracts. In the case, Transtar Elec., Inc. v. A.E.M. Elec. Servs. Corp., Slip Opinion No. 2014-Ohio-3095, a general contractor hired a sub-contractor to provide electrical services for the installation of a pool at a hotel. The sub filed suit seeking payment of $44,000 that was never paid by the GC or project owner. The subcontract included the following language:
"(c) The Contractor shall pay to the Subcontractor the amount due under subparagraph (a) above only upon the satisfaction of all four of the following conditions: * * * (iv) the Contractor has received payment from the Owner for the Work performed by the Subcontractor. RECEIPT OF PAYMENT BY CONTRACTOR FROM THE OWNER FOR WORK PERFORMED BY SUBCONTRACTOR IS A CONDITION PRECEDENT TO PAYMENT BY CONTRACTOR TO SUBCONTRACTOR FOR THAT WORK." Read More ›
It is sometimes difficult to tell whose insurer will be liable for certain occurrences on a construction project. The whole purpose of contracting is to allocate risk—hopefully to the party that is better situated to deal with that risk. In allocating that risk, all parties need to know which party is ultimately responsible for insuring against certain risks. While some court opinions can leave a reader unsure of the ultimate holding and its application, the Indiana Court of Appeals recently issued a clear and concise opinion regarding issues of insurer liability in the context of interpreting an American Institute of Architects (AIA) standard form agreement. Read More ›
The Distress to Success blog, based off of the book by Bobby Guy, focuses on distressed investing, events in the acquisition markets, and restructuring issues. “Distress to Success” is written for the business leader struggling to return a company from the “red” into the “black.”
On Monday, we released three new research indices tracking distress in U.S. financial markets. Read More ›
One of the interesting tensions in the healthcare industry right now is the need for consolidation versus antitrust consolidation prohibitions. Read More ›
When it comes to distressed healthcare M&A, the thorniest issues often ride on provider agreement liabilities with Medicare and Medicaid. Read More ›
The Financial Services Blog offers the latest information on banking development and litigation trends. Topics range from commercial and consumer lending through bankruptcy, lender liability defense, and the Dodd-Frank Act through Regulations JJ.
What Banks Large and Small Need to Know About “Prior Express Consent” Under the Telephone Consumer Protection Act
The Telephone Consumer Protection Act (“TCPA”), 47 U.S.C. § 227, has become the darling of the plaintiff class action industry. Too often the press has reported on very large dollar settlements arising out of TCPA claims. Recent examples include a September 2, 2014, approval of a $32 million settlement of six pending TCPA class action suits against Bank of America, involving 7 million class members. Similarly, Capital One recently agreed to pay $75 million after plaintiffs’ alleged the financial institution used an auto-dialer to call customer cell phones without the required consent. While the large dollar settlements involving large institutions may catch the headlines, all financial institutions should understand that the TCPA applies to them, and even indirectly to them, if certain vendors violate the Act. There is also concern that an opportunistic plaintiffs’ bar will soon seek to replicate their litigation business model by bringing copy-cat lawsuits on a more local level against smaller institutions. Read More ›
On the heels of the Sixth Circuit Court of Appeals’ decision in the RL BB Acquisition case that we wrote about a couple of weeks ago comes a contrary decision from the Eighth Circuit on exactly the same issue. Is a credit guarantor an “applicant” for credit, so that the protections of the Equal Credit Opportunity Act (ECOA) extend directly to a credit guarantor? The Eight Circuit says no. Read More ›
The Equal Credit Opportunity Act’s ban against credit discrimination on the basis of race, gender, national origin, and the other prohibited bases listed in the law – including marital status - is not terribly complex. Since its enactment 40 years ago, the ECOA has generated only a small fraction of the lawsuits that the Truth in Lending Act has spawned. Nevertheless, one ECOA rule in particular has continuously been an Achilles’ heel for creditors – the Spouse Guarantor Rule. The Rule is particularly difficult to apply because it attempts to address what would seem to be a logical credit request in the structuring of a loan; that is, the personal guaranty of husband and wife business owners, who often hold jointly-owned assets. A decision last month by the Sixth Circuit Court of Appeals in RL BB Acquisition, LLC v. Bridgemill Commons Development Group, LLC, has now strengthened the Rule by giving it both sword and shield status in the arsenal of a spouse-guarantor defending the enforcement of a guaranty Read More ›
The International Services Group Blog is a resource for business leaders within the international commerce industry. Frost Brown Todd's international lawyers discuss the latest challenges for international trade and regulation, as well as solutions for those challenges.
The Changing Labyrinth of China’s e-Commerce - New Requirements of an Online Standard Terms Agreement
China is transitioning from a manufacturing-based economy to a more service and consumption-driven economy. E-commerce is at the center of this transition and it is growing at a rapid pace. In 1995, there were approximately 60,000 Internet users in China. Today, the Boston Consulting Group predicts China’s Internet population will reach 730 million in the next two years and its online shopping headcount is expected to reach 380 million. The value of China’s e-commerce market is also astonishing. By 2015, KPMG estimates China’s e-commerce transactions to reach $540 billion. Read More ›
China’s Ministry of Commerce has taken another step to deregulate over time the approval process for Chinese citizens and companies to invest overseas. This remains a controlled process, but the new rules described in the link below should assist in increasing China’s going abroad. Frost Brown Todd often works with Jun He on mutual client matters. Click here for a summary of the new measures in English and in Chinese.
US health care businesses see China as a waiting market, ready for the introduction of world-class hospitals and care centers. China understandably regards medical care as intensely domestic, and has limited foreign involvement to joint ventures or minority ownership. Read More ›
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