Second Circuit Upholds Decertification of Class Action After Jury Award

Cruz-Alvarez_FFeatured Expert Contributor — Civil Justice/Class Actions

Frank Cruz-Alvarez, a Partner in the Miami, FL office of  Shook, Hardy & Bacon L.L.P. with Rachel Forman, an Associate with the firm.

On July 15, 2016, the U.S. Court of Appeals for the Second Circuit in Mazzei v. Money Store (2016 U.S. App. LEXIS 12994) affirmed a district court’s decision, issued after a jury verdict for the plaintiff, to decertify the underlying class action. Based on its analysis of Federal Rule of Civil Procedure 23’s plain language and the Seventh Amendment, the Second Circuit confirmed that so long as final judgment has not been entered, district courts have the authority to decertify a class post-verdict.  Id. at *3.

The plaintiff had entered into a loan agreement with The Money Store and defaulted on the loan, causing the defendant servicer to accelerate the loan, and commence foreclosure proceedings.  Id. at *4.  Ultimately, the plaintiff paid the balance of the loan and certain fees, including fees incurred after acceleration.  Id. at *4–5.  The plaintiff subsequently sued the defendants, purporting to represent a putative class of borrowers, for breach of contract based on the defendants’ alleged violation of the mortgage agreement by imposing post-acceleration late fees.  Id. at *5.  The district court certified a class that included “all borrowers who signed form loan agreements on loans which were owned or serviced by the defendants and who … were charged … (A) late fees after the borrower’s loan was accelerated, and where the accelerated loan was paid off.”  Id. at *5–6. Continue reading

Fifth Circuit’s Frog-Habitat Ruling Endangers Common Sense and Growth in Louisiana

st_tammany_navBy Trey Wassdorf, Judge K.K. Legett Fellow at Washington Legal Foundation and a rising third-year student at Texas Tech University School of Law.

At the behest of special-interest activists and government regulators, federal courts continue to broaden the scope of the Endangered Species Act (ESA), often in ways that do little to actually preserve plants and animals.  The latest expansive ruling comes from the US Court of Appeals for the Fifth Circuit.  In Markle Interests, L.L.C. v. United States Fish and Wildlife Service, the court upheld the designation of 1,544 acres of private land in Louisiana as “critical habitat” for the dusky gopher frog, Rana sevosa, even though it does not reside on the land and the land does not currently feature the characteristics needed to support the frog. Continue reading

Fish and Wildlife Service’s Delisting of Lesser Prairie Chicken a Win, and a Test, for Voluntary Conservation

Lesser Prairie Chicken

Lesser Prairie Chicken

On July 20, 2016, ten months after a U.S. District Court for the Western District of Texas judge ruled that federal regulators erred in finding the lesser prairie chicken “threatened” under the Endangered Species Act (ESA), the US Fish & Wildlife Service (FWS) finalized its delisting decision. The decision not only validates the work of a public-private bird-conservation partnership, it will also test the viability of such state-based efforts. Continue reading

California Appeals Court Protects Outside Counsel’s Factual Investigation as Privileged

City of Petaluma

City of Petaluma

In early June, a California court of appeal held in City of Petaluma v. Waters that the report resulting from a fact-finding investigation conducted by outside counsel for the City of Petaluma’s (the City) City Attorney was protected by attorney-client privilege and therefore undiscoverable.  The holding is notable because the court refused to read the privilege so narrowly as to only protect legal opinions and would not further encroach upon the outside-counsel relationship. Continue reading

Will Illinois State AG’s Action Put an End to Unabashed Abuse of State’s False Claims Law?

package deliveryThis past May, a Cook County Associate Judge dismissed 201 Illinois False Claims Act (IFCA) cases at the request of Illinois Attorney General Lisa Madigan. The state’s action is an encouraging, albeit overdue, development in a long-running legal saga where one enterprising lawyer has harnessed the state’s enforcement power to pursue personal financial gain that provides little or no benefit to the public.

Much like its federal equivalent, the IFCA allows private citizens (relators) to file fraud claims on behalf of the state. The fraud must be based on a false claim, typically a violation of a law or regulation. If successful, relators can collect up to 30% of the award plus attorneys’ fees. Continue reading

North Dakota Becomes First Petitioner to Challenge EPA’s Methane Rule

sboxermanFeatured Expert Column – Environmental Law and Policy

By Samuel B. Boxerman, Sidley Austin LLP

On July 15, 2016, North Dakota became the first petitioner to challenge the Obama Administration’s unprecedented Clean Air Act rule governing methane emissions from new and modified oil and gas sources (“Methane Rule”).1  More petitions are anticipated.

The rule—also referred to as the “QuadOa” rule,2—sets emissions standards for methane at certain new and modified upstream and midstream oil and gas sources and requires owners and operators of affected sources to implement a leak-detection program to identify and repair fugitive emission leaks.  Home to the Bakken Shale formation and now the nation’s second largest oil-producing state, North Dakota has a substantial interest in the burdens and benefits of the rule. Continue reading

Federal Courts Must Enforce Limits on President’s Appointment Powers

CFPBNo one any longer contests that President Obama acted in excess of his constitutional powers when, on January 4, 2012—a day on which the Senate was not in recess—he purported to grant a recess appointment to Richard Cordray to head the Consumer Financial Protection Bureau (CFPB).  Yet, in a troubling decision issued last week, the U.S. District Court for the District of Columbia indicated that it was of no moment that for a period of 18 months Cordray, although no more than a private citizen, issued dozens of significant decisions in the name of CFPB.  Judge Ellen Huvelle ruled in State National Bank of Big Springs v. Lew that Cordray, after finally receiving Senate confirmation, could simply wave a magic wand and retroactively approve all of his unauthorized acts.  That decision eviscerates the Constitution’s explicit limitations on the President’s appointment powers and encourages future Presidents to disregard those limitations. Continue reading