O'Melveny & Myers LLP Available for Commentary On Precedent-Setting Decision

Business Wire, Jan 26, 2001

Business Editors/Legal Writers

ORANGE COUNTY, Calif.--(BUSINESS WIRE)--Jan. 26, 2001

California Supreme Court held that an Orange

County woman's lawsuit against Washington Mutual

Bank could not proceed as a nationwide class action

Issue: In a precedent-setting decision on Thursday, the California Supreme Court unanimously reversed a lower court and held that an Orange County woman's lawsuit against Washington Mutual Bank could not proceed as a nationwide class action.

Jayne Briseno had sued the bank, alleging that when the bank "force placed" hazard insurance on her home after she failed to maintain insurance herself, it violated California's Unfair Competition Law. Briseno later successfully petitioned the court to let the case proceed as a class action on behalf of more than 25,000 Washington Mutual customers, and an appellate court affirmed the decision to certify the nationwide class.

Source: John Beisner, head of O'Melveny & Myers' Class Action Litigation practice

O'Melveny & Myers filed a friend-of-the-court brief regarding this case on behalf of the Product Liability Advisory Council, the American Bankers Association, the U.S. Chamber of Commerce, and other trade associations.

Mr. Beisner explains that the key to the California Supreme Court's decision was the lower courts' presumption that they could apply California law to the claims of all class members, no matter where they reside.

"The court's decision sends a clear signal that California can't export its Unfair Competition Law to other states, many of which expressly permit the practices Ms. Briseno alleged were unlawful under California law. More broadly, it calls into question the whole idea of the nationwide state court class action, since those kinds of cases almost always involve complex judgments about how the law varies from state to state," he said.