18th Annual Workplace Class Action Report - 2022 Edition

Annual Workplace Class Action Litigation Report: 2022 Edition 687 the Court made two clear errors concerning the content of their allegations as they relate to the RESPA safe harbor provision, including: (i) that it misconstrued All Star as the party receiving the alleged illegal kickbacks when Plaintiffs were arguing the opposite; and (ii) that it erred by failing to consider paragraph 130 of the amended complaint, in which Plaintiffs alleged that Defendant did not render any services to All Star to warrant the payments it received. Id . at *7. In considering Plaintiffs’ motion, the Court agreed with Plaintiffs that its misapprehension regarding the direction of the payments between Defendant and All Star, along with its failure to consider Plaintiffs’ plausible allegation that there were no legal services rendered for the payments, led to a clear error when it concluded that the alleged kickback payments were protected under the RESPA’s safe harbor provision. Id . at *7-8. The Court thus found that its failure to consider those allegations constituted clear error, and granted the motion to reconsider as to the RESPA claim. The Court noted that previously it had stated that "because Plaintiffs’ RICO claim is based upon mail and wire transaction that purportedly occurred in furtherance of the alleged RESPA scheme, the Court will also dismiss Plaintiffs’ RICO claim." Id . at *8. Therefore, the Court reassessed the RICO claim. The Court found that as to the first prong of a RICO claim relative to conduct causing injury, Plaintiffs successfully plead that they suffered damages flowing from Defendant’s alleged racketeering activity. The Court also determined that Plaintiffs identified the "All Star Scheme" as the enterprise for the purposes of a RICO action, which was designed and executed by All Star and participated in by Defendant, which was sufficient at the pleading stage to allege the existence of an enterprise. The Court also reasoned that Plaintiffs satisfied the “racketeering activity” prong of the RICO claim as they alleged that Defendant and All Star used the U.S. Mail and interstate wires to induce and deceive Plaintiffs in the pursuit of unlawful kickbacks. Finally, the Court determined that Plaintiffs successfully plead more than two related racketeering incidents that posed the threat of continued criminal activity, which adequately alleged the existence of a "pattern" of racketeering activity. Id . at *16. Because the Court found that Plaintiffs adequately plead all elements of a RICO claim and plead their allegations of fraud with particularity, it also vacated its decision to dismiss Plaintiffs’ RICO claim. Accordingly, the Court granted Plaintiffs’ motion for reconsideration and vacated its previous ruling dismissing the RICO and RESPA claims. (lxii) Recusals In Class Action Litigation Curlee, et al. v. Commissioner Of Social Security , 2021 U.S. Dist. LEXIS 171341 (E.D. Cal. Aug. 18, 2021). Plaintiff filed a class action seeking judicial review of a final decision of Defendant, the Commissioner of Social Security, denying an application for benefits pursuant to the Social Security Act. Plaintiff previously consented to have a Magistrate Judge preside over the action. The Magistrate Judge entered a number of orders, and Plaintiff thereafter requested that the Court inform him of the docket and time constraints in the case. The Magistrate Judge ordered Plaintiff be provided with the docket, but inadvertently referenced the wrong docket number in the order. The Clerk of Court therefore send Plaintiff the incorrect information. Plaintiff subsequently executed a revised copy of the consent form declining to consent to the Magistrate Judge. The motion suggested that the Magistrate Judge was not impartial or had properly handled the case. The Court explained that Plaintiff could not withdraw his consent without a proper showing as to why his consent was withdrawn. Plaintiff explained to the Court that he wished to withdraw his consent because the Magistrate Judge mischaracterized the action as one for disability benefits, when in reality it was about retirement pension benefits and thus he thought he "should request an actual federal judge so that this case can be resolved and a federal court order issued for my full reinstatement of my old age pension." Id . at *6-7. The Court disagreed with Plaintiff’s position. It determined that it could not find good cause nor extraordinary circumstances that would warrant granting Plaintiff’s request to withdraw his previously entered consent. The Court held that since initially consenting to magistrate jurisdiction, the Magistrate Judge has not entered any order or ruling that could demonstrate bias of even consideration of the merits of Plaintiff’s claims. Accordingly, the Court denied Plaintiff’s request. Lindenbaum, et al. v. Realgy, LLC , 2021 U.S. App. LEXIS 27338 (6th Cir. Sept. 9, 2021). Plaintiff filed a class action alleging that Defendant placed robocalls to her cellular telephone in violation of the Telephone Consumer Protection Act (“TCPA”). After an appeal of the District Court’s rulings to the Sixth Circuit, Defendant filed a motion for recusal of Judge Stranch, alleging that she could not be impartial due to having family members who worked at a law firm with two active TCPA cases. The Sixth Circuit denied the motion. It found that the facts Defendant alleged would not lead a reasonable, objective observer to question the Judge’s impartiality. The Sixth Circuit held that Judge Stranch’s relatives had no connection to the action, were not listed