Procedural PostureApril 16, 2021
Plaintiff borrowers brought an action against defendants, a lender and a successor, alleging violations of state and federal law and claims of intentional misrepresentation, breach of fiduciary duty, and other claims. Defendants filed motions to dismiss, and the borrowers filed a motion for leave to file a second amended complaint under Fed. R. Civ. P. 15(a).
The borrowers filed a notice of Chapter 7 bankruptcy proceedings after defendants filed their motions to dismiss. Defendants contended that leave to amend should be denied on the grounds of futility. The court granted the motion to dismiss but granted leave to amend. Neither defendant contended that allowing the borrowers to amend would cause undue prejudice or that the borrowers exhibited undue delay or bad faith. The court did require that the borrowers demonstrate or adequately allege that they were the real parties in interest under Fed. R. Civ. P. 17(a)(3) to assert their claims rather than the bankruptcy trustee. The borrowers had to show that the claims were exempt from the bankruptcy estate under 11 U.S.C.S. § 541 or that the trustee had abandoned the claims of the present lawsuit.
The court granted the motions to dismiss without prejudice. The court granted the borrowers’ motion for leave to amend. Appellant was represented by a business attorney.
Plaintiffs, independent music compact disc (CD) retailers, sued defendants, distributors and big store retailers, alleging violations of the Robinson-Patman Act and the California Business and Profession Code through price discrimination in the CD sales market. The retailers moved for class certification.
The independent retailers alleged that the distributors engaged in practices in conjunction with the bid store retailers to sell CDs to the big store retailers at prices lower than those offered to the independent retailers, and allowed the big store retailers to sell CDs below their cost in order to divert business away from the independent retailers. The independent retailers sought to certify two proposed classes: (1) a nation-wide Robinson-Patman Act class alleging wholesale price discrimination (the Federal Class), and (2) a state-wide class in California alleging illegal retail pricing practices (the California Class). The district court found that the classes were not ascertainable because the term “smaller independent retailer” was impermissibly vague and the term “in competition” was also impermissibly vague. The individualized issues of the Robinson-Patman claims and the state law claims made them unsuitable for class treatment. The fact that the independent retailers filed an injunction-only class action could not cure the other problems with class certification.
The motion for class certification was denied.