The plaintiffs and defendants reached a settlement in a class action lawsuit against De Beers S.A., and several related entities, and the U.S. District Court for the District of New Jersey approved the $295 million settlement. The complaint alleged that De Beers fixed prices in the market for rough gem-quality diamonds by, among other things, executing output-purchase agreements with competitors, establishing a market-wide cartel to set production limits, and restricting wholesalers from reselling diamonds outside of certain geographic territories. The first category of plaintiffs, purchasers who brought diamonds directly from De Beers, asserted violations of §§ 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1-2. The second category of plaintiffs, those who did not purchase directly from De Beers, such as consumers and jewelry retailers, asserted claims under state antitrust, consumer protection, and unjust enrichment laws of all fifty states and the District of Columbia. The second category of plaintiffs could only rely on state law as a route to monetary relief because they lack standing to bring a federal antitrust claim for damages under the Clayton Act. Illinois Brick Co. v. Illinois, 431 U.S. 720, 735-36. Some states, like Oregon, have passed statutes called Illinois Brick repealers, which allow indirect purchasers to assert antitrust claims under state law. Read more…
Class Actions Blog
American Airlines has been hit with a $5 million class-action over lost bags and its refusal to reimburse the baggage fees it charged. The lawsuit against American Airlines is the first since the airline started charging fees for handling and transporting luggage in June 2008, one of the first airlines to impose such fees. The lawsuit was filed on behalf of Danielle Covarrubias of Pierce County, Wash., who paid a $25 fee for her single piece of luggage on a flight to Grand Rapids, Mich. The bag never arrived, and the airline refused her demand for a refund of the baggage fee, the lawsuit says.
The case is interesting because it demonstrates that consumers can use the class action device to encourage large corporations to improve their customer service.
Years ago, there were some isolated abuses of class actions that resulted in some negative publicity for class actions. Because of that negative publicity, Congress passed laws like the Class Action Fairness Act, which have largely eliminated complaints about the conduct of class actions in the past few years.
The court will have to be persuaded that the following 4 things have been proved before it certifies a class action:
1. The class is so numerous, that individual lawsuits could not be filed and joined together. That usually means that there must be at least 40 people that are similarly situated.
2. There are common questions of fact or law, which means that all the class members have suffered a similar wrong, and proving that wrong would involve proving similar facts and using similar law.
3. The claim of the plaintiff is typical of all the class members’ claims. In other words, the plaintiff and the class have suffered from a similar wrongdoing, and the plaintiff’s claim is not unusual as compared to the claims of the class members.
4. Plaintiff and class counsel are qualified to and will protect the interests of the class members.
After the class action lawsuit is filed, class counsel will move to have the case certified as a class action. If the court certifies the case as a class action, class counsel will have to send a notice to everyone that the court rules is similarly situated and therefore part of the class. Those people that are sent notices are called class members. Class members then have the opportunity to opt-out if they do not want to participate in the class action. Once the class certification issue is resolved, then a lot more depositions of defendant’s witnesses are taken, and a lot of motions are filed by the defendant. Read more…
In a decision that may spark Congress to pass legislation limiting contractual arbitration provisions, the U.S. Supreme Court in Stolt-Nielsen S.A. v. AnimalFeeds International Corp.,130 S.Ct. 1758 (2010), held that “a party may not be compelled under the FAA to submit to class arbitration unless there is a contractual basis for concluding that the party agreed to do so.”
In this case, AnimalFeeds brought antitrust class action claims against Stolt-Nielsen, and the parties agreed to submit the issue of class arbitration to an arbitration panel. The parties stipulated that the agreement was “silent,” however, with respect to class action arbitration. Read more…