Lathrop & Gage Obtains Success in Precedential Class Action on Behalf of Marketing Entity
Lathrop & Gage won a significant victory in the firm's ongoing battle against class actions filed against wireless carriers, mobile content providers, aggregators and affiliate marketers for allegedly unauthorized charges to consumer wireless accounts when Judge James Ware of the Northern District of California recently rejected the plaintiff's argument that the putative class action belonged in state court and denied plaintiff's motion to remand. This reflects a deviation from a number of previous mobile-marketing cases in the Northern District of California in which the courts granted motions to remand, reasoning that the defendants could not establish that the amount in controversy exceeded the jurisdiction threshold. Feinberg v. AzoogleAds US, Inc. and mBlox, Inc., Case No. 09-cv-02314.
In ruling that defendant Azoogle met its burden of proof in showing greater than $5 million in controversy under the Class Action Fairness Act ("CAFA"), Judge Ware adopted verbatim many of the arguments made by Lathrop & Gage attorneys Blaine Kimrey (Business Litigation - Chicago) and Bryan Clark (Business Litigation - Chicago). The Court's opinion noted that settlements in nearly identical cases have all exceeded $5 million, attorneys' fees awarded to the plaintiff's attorneys in similar cases have all exceeded $1 million and the cost of injunctive relief could exceed $1 million.
Most importantly, the Court's opinion -- which relied heavily on the fact that a portion of the claims at issue in Feinberg are being settled in another case -- implicitly acknowledged that the putative classes in these cases often overlap and the cases are therefore related (and thus subject to analogizing for purposes of determining the amount in controversy). The Court's ruling has implications not only as to removal, but also as to potential consolidation, res judicata, federalism, and the interplay of overlapping state and federal class actions related to the mobile-marketing ecosystem.
The argument from the Lathrop & Gage legal team has been that the current mobile-marketing litigation landscape makes it imperative that these cases be litigated in federal court whenever possible and that judges be educated about how mobile-marketing putative class actions across the country relate to each other. A network of plaintiffs' attorneys has filed dozens of these cases in state courts nationwide, in attempts to encourage cost of defense settlements by forcing defendants to defeat multiple lawsuits in multiple state courts. The protections against such tactics offered in federal court -- including possible consolidation and MDL treatment -- are generally not available in state court. Also, because state courts are not part of the federal PACER system, it is harder for parties to track what is happening in other cases that might affect their interests.
"We are not aware of a single unauthorized charge case that has gone to trial or even a case in which one of these classes has been certified in the face of opposition," said Mr. Kimrey, who has served as lead attorney in this matter. "Mobile marketing defendants often find that the cases against them are voluntarily withdrawn by plaintiffs' counsel when faced with a motion to dismiss or a motion opposing class certification. The plaintiffs' lawyers then simply file a nearly identical case in a different state with a different class representative shortly thereafter."
The key to establishing federal jurisdiction for the Lathrop & Gage legal team remains to educate the court on how these cases are being litigated and how they all relate. The plaintiffs' complaints are typically so vague that is difficult for the defendants to prove the requisite amount in controversy for removal under CAFA. The plaintiffs then hide behind vague allegations, arguing not that the amount in controversy is less than $5 million, but rather that defendants cannot prove the amount in controversy is more than $5 million. Messrs. Kimrey and Clark were successful in Feinberg because they were able to educate the Court on how their case does not exist in a vacuum, but rather is tied to various mobile-marketing cases and settlements that have involved amounts in excess of $5 million. This rationale should apply by analogy across many, if not all, mobile-marketing cases.
Messrs. Kimrey and Clark have developed a national practice in defending mobile-marketing putative class actions and advising clients regarding mobile-marketing compliance. Mr. Kimrey is a former journalist at two major metropolitan daily newspapers, and has dedicated more than 15 years to working for and defending media entities. Mr. Kimrey’s practice, however, extends well beyond media defense, focusing on a broad range of direct and class action commercial litigation involving topics as diverse as intellectual property, entertainment, insurance, banking, civil rights, telecommunications and mass catastrophes and torts. Mr. Clark’s practice focuses on media defense work, including class action mobile-marketing litigation, TCPA litigation, and pre-publication review, but he has also been involved in a broad range of other litigation matters. He has also been involved in a variety of pro bono engagements, including work for non-profit media entities and representation of Illinois prisoners with multiple sclerosis.
About Lathrop & Gage:
A full-service law firm, Lathrop & Gage LLP has almost 300 attorneys in 11 offices nationwide – from Los Angeles to New York. In 2009, Chambers USA ranked Lathrop & Gage’s corporate, environmental, intellectual property, litigation, real estate and labor and employment teams among the best in the Midwest. For more information, visit www.lathropgage.com.
