Eighth Circuit: CAFA's Interlocutory Appeal Provision Does Not Apply to Non-CAFA Class Actions

    By Brian Wolfman

    Agreeing with the Fifth Circuit, the Eighth Circuit has recently held that the provision of the Class Action Fairness Act authorizing permissive appeals of decisions granting or denying motions to remand applies only to class actions removed from state court under CAFA, not to class actions removed on some other basis (e.g.., diversity under 28 U.S.C. 1332(a)(1)).  See Saab v. Home Depot, Inc., No. 06-8014 (8th Cir. Nov. 22, 2006).  Saab says that the text of 28 U.S.C. 1453, the removal provision added by CAFA, demands that result.  The Eighth Circuit should have stopped there.  But like many other courts interpreting CAFA, it also relied on the Senate Report on CAFA to buttress its conclusion.  That's really too bad.  Courts should be treating the Senate Report as worthless because it was issued after CAFA was enacted.  One lonely district court has made this point.

More on Important Supreme Court Preemption Case: Watters v. Wachovia Bank

By Brian Wolfman

     Today's Washington Post has this informative article on Watters v. Wachovia Bank, which presents the question whether the National Bank Act preempts states' efforts to regulate the lending activities of state-chartered subsidiaries of national banks.  The case will be argued in the Supreme Court on November 29.  We previously posted many of the Supreme Court briefs here.  On the day before the argument, the American Enterprise Institute is sponsoring a forum featuring speakers who take different views on this important preemption question.

The Digital Millennium Copyright Act—A New Thanksgiving Tradition

by Greg Beck

For some reason, the day after Thanksgiving has become known as a day of shopping.  Retailers, eager to start off the holiday shopping season, tout low-low prices on "Black Friday" to get consumers into the store.

Prior to Thanksgiving, these prices are (in theory) supposed to be a secret, but on the Internet it is common to see sites like BlackFriday.info and FatWallet post Black Friday prices up to a month in advance.  In response, retailers have invented their own holiday tradition: targeting these sites with takedown notices under the Digital Millennium Copyright Act (DMCA), 17 U.S.C. sec. 512.

Best Buy started off the holiday cheer this month by sending a cease-and-desist letter to BlackFriday.info, demanding that it take down Best Buy's upcoming sales prices.  BlackFriday complied under protest, noting in a brief statement:  "While we believe that sale prices are facts and not copyrightable, we do not want to risk having this website shut down due to a DMCA take down notice." 

USDA Turkey Safety Hotline

Today's Washington Post reports that

The Agriculture Department runs a meat hotline -- 888-674-6854 -- to call with questions about food safety . . . This Thanksgiving season, they have fielded thousands of questions about how to prepare turkey and other holiday foods. The exchanges are often practical, sometimes humorous and occasionally moving.

There are questions about deep-fried turkeys, electric-roasted turkeys, oven-cooked turkeys. Callers want to know how long a turkey can safely be kept in a freezer, the safest way to defrost a turkey, whether it's safe to stuff the bird the day before, how long leftovers can be kept in the refrigerator and other Thanksgiving-related ponderables.

Several specialists have worked for the hotline for more than a decade. They undergo a two-week training program and receive a 150-page turkey manual, but their experience comes from their backgrounds as dieticians, food technologists and home economists.

Vioxx MDL: Nationwide Class Certification Denied

    By Brian Wolfman

    Judge Eldon Fallon of the U.S. District Court in New Orleans, who is presiding over the Multidistrict Litigation of thousands of Vioxx injury cases, has denied the plaintiffs' request for nationwide class certification.  The plaintiffs argued for nationwide certification on the ground that the substantive law of New Jersey, where the defendant is located, should be applied to all plaintiffs' claims no matter where the plaintiffs lived or ingested Vioxx.  Judge Fallon rejected that argument, holding that the plaintiffs' home states (that is, all 50 states) had a greater interest in the litigation than did New Jersey alone.  (Some consumer class actions have been certified nationally on the theory that the law of the defendant's home state applied to the claims of all plaintiffs.)  One might expect the plaintiffs to try to certify class actions on a state-by-state basis, but Judge Fallon indicated that there are obstacles to any class certification because factual and legal differences predominate over common questions.  Note that in light of the Class Action Fairness Act (CAFA), Vioxx class actions brought in state court only by citizens of the forum state will likely end up in federal court (unless the defendant is a citizen of the forum).  And, if those cases end up in federal court, they will almost certainly be MDL'd to Judge Fallon.

UPDATE:  A commenter has made a point that I should have mentioned in my original post.  There are pre-CAFA state court class actions, and they will not be removable to federal court (at least not under CAFA).  My point about the removability of Vioxx class actions under CAFA applies, of course, only to actions filed after CAFA's effective date.

Senator Dodd on Credit Cards

by Jeff Sovern

  Today's New York Times has an interesting article about Senator Dodd, the incoming chair of the Senate Banking Committee.  Here's a quote:  "At a hearing this year, [Senator Dodd] said that credit cards increasingly were little more than 'pocket-sized predatory loans' and that he has proposed legislation that would curtail the ability of the companies to market credit cards to students who were not able to afford debt."   I can't remeber seeing credit cards compared to predatory loans before. 

Study: Bankruptcy filings spike in wake of hurricanes

by Christopher Peterson

Robert Lawless, a bankruptcy professor at the University of Illinois, recently released the results of an interesting new empirical study. The piece, entitled Bankruptcy Filing Rates After a Major Hurricane, tracks consumer and business bankruptcy filings for 36 months in states affected by hurricanes that caused over a billion dollars in damage. Among other results, Lawless finds that "[s]tates primarily affected by hurricanes have an average increase in filing rates that is around fifty percent larger than the increase in unaffected states: for every two new filings in an unaffected state, there are three new filings in the landfall state." Methodologically, I suspect it was difficult to find statistically comparable control groups for an affected state, given the economically significant differences between geographic regions. Lawless does try to deal with this problem by comparing affected bankruptcy districts to unaffected districts with similar historical filing rate patterns. While these results were not statistically significant, they did tentatively corroborate Lawless' statewide comparisons. Interestingly, Professor Lawless' data also appear to suggest that poorer areas have relatively greater post-hurricane bankruptcy filing rate increases than wealthy areas. This seems to make sense since we should expect that lower income communities would have less resources to absorb the financial shocks caused by natural disasters.

The paper is a quick read and promises to buttress common intuitions on the issue. The paper also highlights irony behind the national response to the Katrina disaster. Instead of borrowing money to buy thousands of worthless mobile homes (and give manufacturers a big windfall), the government would probably have been better off adopting reasonable consumer protection law including non-means tested access to the bankruptcy system.

In Time for the Holidays: U.S. PIRG Issues Its Annual "Trouble in Toyland" Report

by Brian Wolfman

I noticed at U.S. PIRG's blog that PIRG has issued its 21st Annual "Trouble in Toyland" Report.  This important report both alerts consumers to potential toy hazards in advance of the holidays and effectively pressures the Consumer Product Safety Commission to take action against dangerous toys.  As PIRG explains:  "The reports have resulted in well over 120 recalls and other actions by the Consumer Product Safety Commission (CPSC) and toy manufacturers. This year's report emphasizes toys that pose choking, excessive noise, acute and chronic toxic and magnetic ingestion hazards."  Check it out.

Advertising Food and Drinks to Children: New UK Rules

by Christine Riefa

The advertising of food and drinks products that are high in fat, salt and sugar on UK television screens is to be severly reduced from January 2007.  Whilst a total ban of all adverstising was not adopted, advertisers will not be able to promote their products in and around programmes targeted at a young audience (under 16).  In addition, for adverts targeted at an even younger audience (under 9) the use of cartoon characters, celebrities and other popular promotional claims such as free gifts will be restricted. The decision taken by OFCOM, the new UK broadcasting regulator, is based on a review of the revenue impact a total ban of advertising for food and drinks high in salt, sugar and fat would have had on the industry. Indeed, it is reported that the industry will loose the equivalent of £16 milllions with this partial ban. The biggest impact will of course be felt by dedicated children's channels where advertising of such products will be practically impossible. The loss here is evluated at 15% of revenue, whereas on general channels the loss is evaluated at around 0.7% of total revenue.  For more details on the new measures, see the OFCOM press release.

Photo copyright BBC.  See the BBC's full article on "Junk food ad crackdown announced" here.

Second Circuit Issues Class Action Fairness Act Ruling

    By Brian Wolfman

        In DiTolla v. Doral Dental, No. 06-2324 (Nov. 17, 2006), the Second Circuit established a couple precedents under the Class Action Fairness Act.  First, it held that the burden of proving CAFA's jurisdictional prerequisites ($5 million in controversy, minimal diversity, etc.) rests on the party seeking the federal forum.  (In DiTolla, as in most CAFA jurisdictional disputes, the party seeking the federal forum was the defendant who sought to remove the case from state court to federal court.)  Second, under CAFA, the court has 60 days (with some exceptions) to decide a permissive appeal from a district court's decision granting or denying a motion to remand.  If the court does not decide the appeal within the deadline, the appeal is deemed "denied."  The Second Circuit held that the 60-day period begins to run from the day the court of appeals agrees to hear the appeal, not the day that the application to appeal is filed.  The Second Circuit's decision in DiTolla follows the unanimous holdings of other circuits on both the burden-of-proof and appeal deadline issues.

    The Second Circuit ended up affirming the district court's decision to remand the case for lack of $5 million in controversy.  That analysis did not strike me as particularly important for future cases (though I'm sure it thrilled the plaintiffs).