Wednesday, May 25, 2016
The indefatigable Advisory Committee on Civil Rules met on April 14, 2016 and prepared a report to the Committee on Rules of Practice and Procedure (the Standing Committee), which will meet June 6-7, 2016. The report begins at page 251 of the Agenda book, and the draft minutes of the April 14 meeting begin at page 489 of the Agenda book.
The report has three parts. First, the Advisory Committee recommends that the Standing Committee approve proposed amendments to Rule 5 (e-service and e-filing), Rule 23 (class actions), and Rule 62 (stays of execution of judgment) for publication this summer.
Second, the Advisory Committee recommends that the Standing Committee approve two pilot projects for submission to the Judicial Conference. The first pilot project would test a system of mandatory initial disclosures that would be more robust than those currently required by Rule 26(a)(1). The second pilot project would test the effectiveness of court-wide adoption of practices to reduce “cost and delay.”
Third, the Advisory Committee:
(a) “describes proposals under active consideration for eventual publication and adoption,” including:
- a new subdivision of Rule 5.2 dealing with redaction (super exciting stuff!);
- studying “concerns about the operation of Rule 30(b)(6)(deposition of an entity)”; and
- “consideration of the Rule 81(c) provisions for demanding a jury trial after a case is removed from state court”; and
(b) briefly mentions suggestions for rules amendments that the Committee has “removed from the agenda” (i.e., rejected for now), including:
- the “separate document” requirement of Rule 58;
- suggestions to assist pro se litigants;
- amending the pleading standard in Rule 8(a)(2) (“The time has not yet come for such a project.”); and
- mandatory disclosure of third-party financing arrangements.
In future posts, I will discuss some of these developments in more detail.
Wednesday, May 18, 2016
The Supreme Court issued Spokeo, Inc. v. Robins, No. 13-1339, earlier this week. In a majority opinion unlikely to make anyone happy, the Court vacated the Ninth Circuit’s decision, which held that Robins had adequately alleged Article III standing, and remanded.
A Brief Recap
Robins’ complaint alleged that Spokeo maintained an inaccurate consumer report about him on its website, in violation of the Fair Credit Reporting Act’s requirement that consumer reporting agencies “follow reasonable procedures to assure maximum possible accuracy of the information concerning the individual about whom the report relates.” In particular, Robins alleged that a photo purporting to be Robins on the site wasn’t him, and that the site incorrectly stated that he was in his 50s, married, employed in a professional or technical field, has children, has a graduate degree, and is in the top 10% for wealth.
The upshot of this disseminated misinformation, Robins alleged, was that when he was “out of work” and “actively seeking employment,” he encountered “[imminent and ongoing] actual harm to [his] employment prospects.”
The Majority Opinion
You wouldn’t know that Robins alleged actual harm to his employment prospects by reading the majority opinion, which didn’t mention it. Instead, the majority opinion by Justice Alito (joined by Roberts, Kennedy, and Thomas and inexplicably by Breyer and Kagan) managed to further stultify constitutional standing doctrine by seizing on the Court’s prior repetition of the phrase “concrete and particularized” in describing the “injury in fact” required for standing. The Court now finds it obvious that these are separate, distinct requirements: (1) concrete and (2) particularized (although the Court cited no case that actually discussed these terms separately). The Ninth Circuit, held the majority, applied the “particularized” branch but not the “concreteness” branch.
Friday, March 25, 2016
This week the Supreme Court issued its decision in Tyson Foods, Inc. v. Bouaphakeo, covered here, here, and here. Tyson Foods is one of several important class action cases on the Court’s docket this Term—and the second one decided so far. Like Campbell-Ewald back in January, the Tyson Foods decision is generally good news for proponents of class actions. By a 6-2 vote, the Court upheld class certification under Rule 23(b)(3).
Justice Kennedy wrote the majority opinion, joined by Chief Justice Roberts and Justices Ginsburg, Breyer, Sotomayor, and Kagan. Chief Justice Roberts wrote a separate concurring opinion, which was joined in part by Justice Alito. Justice Thomas wrote a dissenting opinion, which Justice Alito joined. All the opinions are worth a read, but below are a few highlights from Justice Kennedy’s majority opinion.
First, Justice Kennedy emphasized that the presence of some individualized issues is not fatal to Rule 23(b)(3)’s predominance requirement:
The predominance inquiry “asks whether the common, aggregation-enabling, issues in the case are more prevalent or important than the non-common, aggregation-defeating, individual issues.” [2 W. Rubenstein, Newberg on Class Actions], §4:49, at 195–196. When “one or more of the central issues in the action are common to the class and can be said to predominate, the action may be considered proper under Rule 23(b)(3) even though other important matters will have to be tried separately, such as damages or some affirmative defenses peculiar to some individual class members.” 7AA C. Wright, A. Miller, & M. Kane, Federal Practice and Procedure §1778, pp. 123–124 (3d ed. 2005) (footnotes omitted).
Justice Kennedy also provided some important guidance on the Supreme Court’s 2011 Wal-Mart decision, clarifying that “Wal-Mart does not stand for the broad proposition that a representative sample is an impermissible means of establishing class-wide liability.” He recognized the practical reality that “[i]n many cases, a representative sample is ‘the only practicable means to collect and present relevant data’ establishing a defendant’s liability. Manual of Complex Litigation §11.493, p. 102 (4th ed. 2004).” And:
In a case where representative evidence is relevant in proving a plaintiff’s individual claim, that evidence cannot be deemed improper merely because the claim is brought on behalf of a class. To so hold would ignore the Rules Enabling Act’s pellucid instruction that use of the class device cannot “abridge . . . any substantive right.” 28 U. S. C. §2072(b).
The Court ultimately did not resolve the second question in Tyson Foods, which was originally framed as “whether a class may be certified if it contains ‘members who were not injured and have no legal right to any damages.’” After noting that Tyson Foods had “reframe[d] this argument” in its merits brief, Justice Kennedy declined to address it “because the damages award has not yet been disbursed, nor does the record indicate how it will be disbursed.” The Court therefore remanded the case, recognizing that Tyson Foods “may raise a challenge to the proposed method of allocation when the case returns to the District Court for disbursal of the award.” In his final paragraph of analysis, however, Justice Kennedy noted that the potential for “uninjured class members” to recover from the class judgment appeared to be a problem “of [Tyson Foods’] own making,” because Tyson Foods had argued against having bifurcated liability and damages proceedings.
For additional coverage, check out:
- Perry Cooper (Bloomberg)
- Lyle Denniston (SCOTUSblog)
- Alexandra Lahav (Mass Tort Litigation Blog)
- Adam Liptak (New York Times)
Friday, March 18, 2016
Joe Seiner has posted on SSRN a draft of his essay, Tailoring Class Actions to the On-Demand Economy, which will be published in the Ohio State Law Journal. Here’s the abstract:
In O’Connor v. Uber, 2015 WL 5138097 (N.D. Cal. Sept. 1, 2015), a federal district court permitted a class-action case to proceed on the question of whether 160,000 drivers were misclassified by their employer as independent contractors rather than employees. The case has garnered widespread interest, making headlines across the country. Yet it represents only one of many class-action cases currently pending against technology companies in the modern economy. Indeed, similar systemic claims have already been brought against Yelp, GrubHub, Handy, Crowdflower, Amazon, and many others.
The courts have largely floundered in their efforts to address the proper scope of class cases brought against corporations in the on-demand economy. This is likely the result of a lack of clarity in this area as well as the unique fact patterns that often arise with technology-sector claims. Nothing has been written on this issue in the academic literature to date, and this paper seeks to fill that void in the scholarship.
Navigating the statutes, case law, and procedural rules, this Essay proposes a workable five-part framework for analyzing systemic claims brought in the technology sector. This paper sets forth a model for the courts and litigants to follow when evaluating the proper scope of these cases. The Essay seeks to spark a dialogue on this important — yet unexplored — area of the law.
Tuesday, February 23, 2016
Scott Dodson (Hastings) has posted An Opt-In Option for Class Actions
Thursday, February 11, 2016
Michael Morley has posted on SSRN a draft of his article, De Facto Class Actions? Injunctive Relief in Election Law, Voting Rights, and Other Constitutional Cases. Here’s the abstract:
When a court holds that a legal provision is unconstitutional; inconsistent with, or preempted by, federal law; or invalid under an agency's organic statute or a framework statute such as the Administrative Procedures Act, the court must decide whether to grant injunctive relief and, if so, how broad that relief should be. In particular, the court must decide whether to issue a Plaintiff-Oriented Injunction or a Defendant-Oriented Injunction. A Plaintiff-Oriented Injunction bars the government defendants from enforcing the challenged provision only against the plaintiffs in the case or affected members of plaintiff organizations. A Defendant-Oriented Injunction, in contrast, completely bars the government defendant from enforcing the challenged provision against anyone in the state or nation.
Many courts tend to award Defendant-Oriented Injunctions in election law and voting rights cases, even when they are not brought as class actions, without recognizing or addressing most of the pertinent issues that choice implicates. Individual plaintiffs typically lack Article III standing to seek relief protecting the rights of third parties not before the court. And such third parties may neither fall within the court’s personal jurisdiction nor wish to challenge the provision at issue. Defendant-Oriented Injunctions in non-class cases also raise asymmetric preclusion concerns, undermine the policy considerations underlying Rule 23, and allow trial courts to enforce their rulings beyond the geographic limits of their jurisdiction.
Tuesday, February 9, 2016
A new article by Professors Stephen J. Choi and A.C. Pritchard, SEC Investigations and Securities Class Actions: An Empirical Comparison, has been published in the Journal of Empirical Legal Studies.
Using actions with both an SEC investigation and a class action as our baseline, we compare the targeting of SEC-only investigations with class-action-only lawsuits. Looking at measures of information asymmetry, we find that investors in the market perceive greater information asymmetry following the public announcement of the underlying violation for class-action-only lawsuits compared with SEC-only investigations. Turning to sanctions, we find that the incidence of top officer resignation is greater for class-action-only lawsuits relative to SEC-only investigations. Our findings are consistent with the private enforcement targeting disclosure violations at least as precisely as (if not more so than) SEC enforcement.
A new article, Does the Chief Justice Make Partisan Appointments to Special Courts and Panels?, by political science professor Maxwell Palmer (Boston University), has been published in the Journal of Empirical Legal Studies.
The Chief Justice of the Supreme Court has the exclusive and independent power to appoint federal judges to various special courts and panels, including the Foreign Intelligence Surveillance Court (FISC), the court that oversees all domestic surveillance for national security, including domestic data collection by the National Security Agency (NSA). This article examines the propensity of Chief Justices to appoint co-partisan judges to these panels. Such appointments may serve to produce decisions and policies that align with the Chief Justice's preferences. I use computational simulations to model the appointment decisions made by Chief Justices. I find that there is less than a 1 percent chance that a neutral Chief Justice would appoint as many Republicans to the FISC as have been appointed in the last 36 years. I further show that the Chief Justice is not selecting appointees on other observable judicial characteristics, such as age, experience, gender, senior status, or caseload. These results have important implications for the creation of judicial institutions, the internal politics of the judiciary, legislative delegation, and the powers and oversight of the national security state.
Friday, January 22, 2016
I'm overcoming my reticence to post twice about one of my articles, because I want to promote the law students at St. Thomas University School of Law who have labored to establish the new St. Thomas Journal of Complex Litigation (JCL). The final version of my article, "Spokeo, Inc. v. Robins: The Illusory 'No-Injury' Class Reaches the Supreme Court," has just been posted on the JCL website. The abstract is available on SSRN here.
The St. Thomas JCL is pleased to accept submissions through ExpressO or Scholastica from judges, attorneys, law faculty, and law students. Information on submissions is here.
Wednesday, January 20, 2016
The Supreme Court issued its decision today in Campbell-Ewald Co. v. Gomez, a closely watched case on class actions, Article III, and mootness (covered earlier here and here). Justice Ginsburg’s majority opinion begins:
Is an unaccepted offer to satisfy the named plaintiff ’s individual claim sufficient to render a case moot when the complaint seeks relief on behalf of the plaintiff and a class of persons similarly situated? This question, on which Courts of Appeals have divided, was reserved in Genesis HealthCare Corp. v. Symczyk, 569 U. S. ___, ___, ___, n. 4 (2013) (slip op., at 5, 6, n. 4). We hold today, in accord with Rule 68 of the Federal Rules of Civil Procedure, that an unaccepted settlement offer has no force. Like other unaccepted contract offers, it creates no lasting right or obligation. With the offer off the table, and the defendant’s continuing denial of liability, adversity between the parties persists.
Justice Ginsburg’s opinion is joined by Justices Kennedy, Breyer, Sotomayor, and Kagan. Justice Thomas adds a sixth vote, but writes a separate concurring opinion. Chief Justice Roberts writes a dissenting opinion, joined by Justices Scalia and Alito, and Justice Alito writes a dissenting opinion as well.
Friday, January 15, 2016
Whether a federal court of appeals has jurisdiction under both Article III and 28 U.S.C. § 1291 to review an order denying class certification after the named plaintiffs voluntarily dismiss their individual claims with prejudice.
You can find all the cert-stage briefing—and follow the merits briefs as they come in—at SCOTUSblog.
Sunday, January 10, 2016
On January 8, the House of Representatives passed the Fairness in Class Action Litigation and Furthering Asbestos Claim Transparency Act of 2016. (The L.A. Times called the "fairness in class action" part of the title "Orwellian" and "shameless.")
For additional coverage of the bill, see our post from last Friday.
The bill goes to the Senate next for consideration.
Friday, January 8, 2016
The House of Representatives is close to taking up a bill (H.R. 1927) that some are calling the "Volkswagen bail-out bill" due to its stymieing effect on class actions. Another part of the bill, the Huffington Post charges, "would force the online disclosure of sensitive personal information of sick and dying asbestos victims seeking compensation for their illnesses."
When we last reported on this bill, it dealt only with class actions. That bill has now been amended and combined with another bill on asbestos claims, resulting in the "Fairness in Class Action Litigation and Furthering Asbestos Claim Transparency Act of 2015."
The latest draft of the portion of the bill on class actions reads as follows:
SEC. 2. FAIRNESS IN CLASS ACTION LITIGATION.
(a) IN GENERAL.—No Federal court shall certify any proposed class seeking monetary relief for personal injury or economic loss unless the party seeking to maintain such a class action affirmatively demonstrates that each proposed class member suffered the same type and scope of injury as the named class representative or representatives.
(b) CERTIFICATION ORDER.—An order issued under Rule 23(c)(1) of the Federal Rules of Civil Procedure that certifies a class seeking monetary relief for personal injury or economic loss shall include a determination, based on a rigorous analysis of the evidence presented, that the requirement in subsection (a) of this section is satisfied.
The House Judiciary Committee has issued House Report 114-328 on the class action portion of the bill. The Democrats opposing the bill stated in their dissenting views that the bill is “a solution in search of a problem” and “represents the latest attempt to shield corporate wrongdoers and deny plaintiffs access to justice.” They concluded:
H.R. 1927 is an unnecessary bill that threatens to deny millions of plaintiffs access to Federal courts by creating potentially insurmountable obstacles to class action certification and raising litigation costs. Moreover, it disrespects the Federal courts by imposing new burdens on them and by circumventing the congressionally created Rules Enabling Act process by which Federal civil procedure rules are amended after extensive input from the bench and bar.
Meanwhile, at the annual meeting of the Association of American Law Schools, members of the Advisory Committee on Civil Rules are scheduled to discuss potential class actions reforms today. I am not at the conference this year, and would be interested to learn if anyone mentions H.R. 1927 and how that bill might relate to proposals before the Advisory Committee.
The House yesterday passed a resolution limiting amendments to and debate on the bill.
Professor Alexandra D. Lahav testified against the bill last April.
Wednesday, December 16, 2015
An interesting opinion by U.S. District Judge William G. Young:
- provides a definition of “coupons” as used in the Class Action Fairness Act;
- makes sense of the “poorly drafted” CAFA provision regulating attorneys’ fees in so-called coupon settlements; and
- incidentally speculates on the relationship between MDL case assignment, the potential loss of judgeships in a district, and the strictness of a district judge’s scrutiny of attorneys’ fees in class action settlements.
Tyler v. Michaels Stores, Inc., No. CV 11-10920-WGY, 2015 WL 8484421 (D. Mass. Dec. 9, 2015).
This class action, based on Massachusetts consumer law, alleged that Michaels “asked customers for their zip codes as part of credit card transactions to reverse engineer those customers' addresses using commercially available databases, and then used those addresses to carry out aggressive and unwanted marketing campaigns.” [Internal quotation marks omitted.] After Michaels moved to dismiss, the federal court certified legal questions to the Supreme Judicial Court of Massachusetts, which held plaintiffs’ allegations sufficient under state law.
After discovery, the parties settled and the court approved the settlement, reserving a ruling on class counsel’s request for fees. Under the settlement, class members were to receive a $10.00 or $25.00 “voucher” to be used on any merchandise in Michaels’ physical stores, with certain restrictions on use. The face value of the vouchers was $418,000.00. The value of the vouchers actually redeemed by class members was $138,620.00.
Class counsel requested fees and costs of $425,000.00, asserting that Massachusetts law, not CAFA, governed the fees request because the vouchers were not “coupons” as used in CAFA, 28 U.S.C. § 1712, which applies to settlements that “provide for a recovery of coupons to a class member.” Surprisingly, CAFA does not define “coupon.” Surveying other cases, the Court “essay[ed] such a definition: when class members must transact business with the defendant to obtain the benefit of the settlement, the settlement ‘provides for a recovery of coupons’ under section 1712. In other words, coupons must be redeemed; conversely, if an award must be redeemed, it is a coupon.” Under that definition, the Michaels vouchers were coupons, and section 1712 applied to the fees request.
That didn’t settle the matter, however, because section 1712 is bewilderingly drafted. (I won’t reprint it here: just read subsections (a), (b), and (c), if you dare, and see if you can decipher them.) Again after surveying other cases, the Court held that even in a coupon-only settlement, section 1712 “vests the Court with the discretion to choose between using a percentage-of-coupons-redeemed method, or the lodestar method.”
Here, the Court chose the lodestar method (attorney hours worked times hourly fee) for two reasons: “[f]irst, class counsel vindicated the important public policy goals of Massachusetts' consumer protection statute,” and “[s]econd, and most importantly, they obtained binding precedent from the Supreme Judicial Court that will influence conduct far beyond that of Michaels.” However, the Court warned:
Given the hostility to disproportionately large fee awards to class counsel evident in the legislative history -- at least insofar as fees generated from obtaining coupon settlements were concerned -- counsel may reasonably expect that this Court will generally award attorneys' fees based on a percentage of the actual value of the coupons redeemed by class members, absent the groundbreaking nature of this case.
The Court found that the requested hourly fee of $650.00 for partners was unreasonable, and cut it to $350.00. This yielded a lodestar of $312,895.00 in attorneys’ fees, which was awarded along with $14,005.30 in costs.
In other words, the fees award, even though reduced from what was requested, still ended up being more than twice as much as the value of the vouchers actually redeemed by class members. Personally, I have no problem with that: in my opinion, the primary purpose of the consumer class action is not to compensate the plaintiff class, but to hold the defendant accountable for violating the law. Others obviously disagree.
Here’s where the Court’s two-page footnote 29 comes in. The Court’s point appears to be this: at least one pro-business advocacy group has argued to the Judicial Panel on Multidistrict Litigation that the Panel’s decision where to send an MDL should “rest on a district judge’s strict scrutiny of claims for attorneys’ fees in class action settlements.” In other words, business interests have argued that the more strictly a district judge scrutinizes fees requests, the more that judge should be favored as the transferee court in an MDL. But why should judges want to be the transferee court in an MDL? Because all of those transferred cases will now be counted as part of that judge’s, and that district’s, civil caseload. (When a civil case is filed in one district, and transferred to another district for whatever reason, including MDL, it is counted as a filing in both the transferor and the transferee court. So, for example, if the Panel transfers 5,000 MDL cases to another district, the transferee district gets 5,000 cases added to its total filings.) This accrual of cases “tend[s] to immunize that court against the potential loss of a judgeship,” because recommendations by the Judicial Conference to add or subtract authorized district court judgeships are based in part on the number of case filings that district has.
So the Court in Tyler candidly “confess[ed] that, when awarding attorneys' fees in this case, it contemplated -- but rejected as wholly inappropriate -- an additional consideration: the views of the Judicial Panel on Multidistrict Litigation.”
Monday, December 14, 2015
SCOTUS Decision in DIRECTV v. Imburgia: Federal Arbitration Act Overrides State Contract Law (Again)
Today the Supreme Court issued its decision in DIRECTV, Inc. v. Imburgia. The vote was 6-3, with Justice Breyer writing the majority opinion. Justice Thomas writes a dissenting opinion, and Justice Ginsburg writes a dissenting opinion joined by Justice Sotomayor.
As covered earlier here and here, Imburgia is another case involving the Federal Arbitration Act (FAA). The particular issue is whether the FAA allows California to construe an arbitration provision referring to California state law (the “law of your state”) to mean state law as it existed prior to the U.S. Supreme Court invalidating certain aspects of California contract law in its 2011 decision in AT&T Mobility LLC v. Concepcion. That was how the California Court of Appeal construed the arbitration agreement in Imburgia, but Justice Breyer’s majority opinion disagrees, concluding instead that such a construction itself violates the FAA by failing to “place arbitration contracts on equal footing with all other contracts.”
Monday, November 16, 2015
Valerie Nannery, Senior Litigation Counsel for the Center for Constitutional Litigation, attended the November 5, 2015 meeting of the Advisory Committee on Civil Rules (agenda here) in Salt Lake City, Utah, and reported on the meeting in the Center's blog.
Highlights from the Center's report:
Rule 23: "The Committee has taken a 'settlement class' rule off of the agenda, and has put 'ascertainability' and Rule 68 on hold. The Committee also approved taking cy pres and 'issue classes' off of the agenda."
Duke Center's private "Guidelines" on proportionality in discovery: “the Duke guidelines and any presentation at the conferences do not come with the imprimatur of the Rules Committees,” and “The Duke Center, like other groups, is free to hold conferences or propose guidelines with respect to the rules or any other area of law. But they are not entitled to communicate, or suggest, that they bear the stamp of approval of the Rules Committees.”
Friday, November 13, 2015
I have recently posted on SSRN an article, "Spokeo, Inc. v. Robins: The Illusory 'No-Injury' Class Reaches the Supreme Court." The article is forthcoming in the newly-established St. Thomas Journal of Complex Litigation, which is currently welcoming submissions.
The Supreme Court’s grant of certiorari in Spokeo, Inc. v. Robins, 135 S. Ct. 1892 (Mem.) (2015) casts a shadow on the long-accepted constitutional principle that Congress has the authority to enact a statute to regulate corporations’ behavior for the public good, and to provide a private right of action to a person as to whom the statute is violated. That right of action often provides for the award of a minimum amount of statutory damages as an alternative or in addition to actual damages.
Congress has enacted numerous such statutes, including the one at issue in Spokeo, the Fair Credit Reporting Act (“FCRA”), which was passed forty-five years ago. Suddenly, within the last ten years, corporate litigation activists have invented a new argument to avoid regulatory statutes that provide for statutory damages. They claim that a “mere” statutory violation is an “injury in law” rather than the “injury in fact” required for Article III standing. And they are launching a frontal assault on Congress’s constitutional authority to enact any statute that provides a private right of action for its violation, accusing Congress of thereby violating Article III by “creating standing.”
Corporate litigation activists then apply to a class representative the argument that the violation of a person’s statutory rights is not an “injury in fact,” and call the result a “no-injury class.” The appellation “no-injury class” is another misleading verbal weapon of recent vintage.
This article hopes to makes three small contributions to the burgeoning literature on Spokeo, which at this writing has not yet been decided. First, the Question Presented to the Supreme Court is misleading and overbroad. It implies that the plaintiff in Spokeo, Thomas Robins, has been found not to have suffered any “concrete harm,” but the case is still at the pleading stage. Thus, the question is simply whether Robins’s complaint contains sufficient allegations of injury, assumed to be true on a motion to dismiss, to establish Article III standing. Further, the Question Presented implies that a ruling involving the FCRA (the statute at issue in Spokeo) will be generalizable to all other statutes that create a private right of action and allow statutory damages, without recognizing the many variations in these statutes’ language and operation.
Second, the article sketches the historical legal difference between the words “injury” and “damage.” “Injury” connotes the violation of one’s legal right, even if one has not sustained any actual harm, while “damage” means a loss or harm, even if one has no legal right to sue. The Supreme Court has adhered to these meanings since Marbury v. Madison. Given that historical distinction, the term “injury in fact” is confusing and somewhat self-contradictory: under the definition of “injury” as the violation of a legal right, the term “injury in fact” is akin to “violation of a legal right in fact.” Further, the petitioner Spokeo’s newly-discovered phrase “injury in law” – which has never been used in a single United States Supreme Court opinion -- is redundant. Under the definition of “injury” as the violation of a legal right, the phrase “injury in law” is akin to “legal right in law.” But however nonsensical, the epithet “injury in law” serves a useful purpose for corporate activists: it minimizes, even ridicules, so-called “technical,” “trifling” statutes that regulate corporate behavior.
Finally, the petitioner Spokeo and its numerous business-oriented amici could have made the very same argument they are making in Spokeo – that the violation of the Fair Credit Reporting Act is not itself an “injury in fact” – only nine years ago in Safeco Insurance Co. v. Burr, 551 U.S. 47 (2007), but did not. In Safeco, the putative class alleged that insurers Safeco and GEICO had not complied with the FCRA’s requirement of sending the class members notice of an “adverse action” when the insurers did not charge them the lowest available insurance rate because of a less-than-perfect credit report. The defendants’ amici repeatedly stated that the plaintiffs in Safeco had not alleged any “actual harm” or “actual damages” even though they sought $1,000 in statutory damages for each member of the class (as the FCRA allows). Thus, Safeco presented exactly the same alleged “no-injury” situation, under exactly the same statute, as Spokeo. Yet the Safeco petitioners and their amici (four of which are also amici in Spokeo) failed to argue that the class representatives lacked Article III standing or that violation of the FCRA was not an “injury in fact.” It seems fair to ask why not, if the Article III argument is so compelling. One might speculate that the reason is that corporate litigation activists have only recently contrived the “statutory-violation-is-not-an-injury-in-fact” argument.
Tuesday, November 10, 2015
The Supreme Court heard oral argument today in Tyson Foods, Inc. v. Bouaphakeo, which presents the questions:
(I) Whether differences among individual class members may be ignored and a class action certified under Federal Rule of Civil Procedure 23(b)(3), or a collective action certified under the Fair Labor Standards Act, where liability and damages will be determined with statistical techniques that presume all class members are identical to the average observed in a sample.
(II) Whether a class action may be certified or maintained under Rule 23(b)(3), or a collective action certified or maintained under the Fair Labor Standards Act, when the class contains hundreds of members who were not injured and have no legal right to any damages.
Saturday, November 7, 2015
Professor Howard Wasserman has posted on SSRN his essay, Fletcherian Standing, Merits, and Spokeo, Inc. v. Robins.
This essay offers an exercise in wishful jurisdictional and procedural thinking. As part of a Supreme Court Roundtable on Spokeo, Inc. v. Robins, it argues for William Fletcher's conception of standing as an inquiry into the substantive merits of a claim and of whether the plaintiff has a valid cause of action. This approach is especially necessary in statutory cases; along with its constitutional power to create new rights, duties, and remedies, Congress should have a free hand in deciding who and how those rights and duties should be enforced. Spokeo, which involves a claim for damages for publication of allegedly false consumer-credit information in violation of a federal statute, illustrates the wisdom and benefits of Fletcher's approach.
Saturday, October 17, 2015
Mark Leyse filed a putative class action against Bank of America after a telemarketer seeking to advertise BoA’s credit cards left a message on the landline shared by Leyse and his roommate. The message allegedly violated the Telephone Consumer Protection Act of 1991, 47 U.S.C. § 227(b)(1)(B), which prohibits any person from “initiat[ing] any telephone call to any residential telephone line using an artificial or prerecorded voice to deliver a message without the prior express consent of the called party, unless the call is initiated for emergency purposes or is exempted by rule or order by the [Federal Communications] Commission.”
Bank of America filed an initial Rule 12(b)(6) motion to dismiss on grounds of collateral estoppel. The district court agreed, but the Third Circuit reversed.
Bank of America then filed a second 12(b)(6) motion to dismiss on the ground that Leyse lacked statutory standing to sue because his roommate, not he, is the telephone subscriber “and intended recipient of the call, as the number was associated with [his roommate’s] name in the telemarketing company’s records.” Again, the district court dismissed, and the Third Circuit reversed.
The court first held that it was error for the district court to have considered BoA’s second 12(b)(6) motion. A dismissal for lack of statutory standing is not jurisdictional, but “is effectively the same as a dismissal for failure to state a claim” pursuant to Rule 12(b)(6). Rule 12(h)(2) provides that a second motion to dismiss for failure to state a claim “may be raised (A) in any pleading allowed or ordered under Rule 7(a); (B) by a motion under Rule 12(c); or (C) at trial” – none of which had occurred. However, the court held that the error did not require reversal:
A district court’s decision to consider a successive Rule 12(b)(6) motion to dismiss is usually harmless, even if it technically violates Rule 12(g)(2). So long as the district court accepts all of the allegations in the complaint as true, the result is the same as if the defendant had filed an answer admitting these allegations and then filed a Rule 12(c) motion for judgment on the pleadings, which Rule 12(h)(2)(B) expressly permits.
Thus, the court continued to the merits of the motion. The TCPA “was intended to combat, among other things, the proliferation of automated telemarketing calls (known as “robocalls”) to private residences, which Congress viewed as a nuisance and an invasion of privacy.”
As was forcefully stated by Senator Hollings, the Act’s sponsor, “Computerized calls are the scourge of modern civilization. They wake us up in the morning; they interrupt our dinner at night; they force the sick and elderly out of bed; they hound us until we want to rip the telephone right out of the wall.”
Accordingly, the Act “provides that a ‘person or entity’ may bring an action to enjoin violations of the statute and recover actual damages or $500 in statutory damages per violation.”
Noting a split among courts in interpreting the statutory standing to sue under this section, the Third Circuit found that Leyse fell “within the class of plaintiffs Congress has authorized to sue.”
[I]t is clear that the Act’s zone of interests encompasses more than just the intended recipients of prerecorded telemarketing calls. It is the actual recipient, intended or not, who suffers the nuisance and invasion of privacy. This does not mean that all those within earshot of an unwanted robocall are entitled to make a federal case out of it. Congress’s repeated references to privacy convince us that a mere houseguest or visitor who picks up the phone would likely fall outside the protected zone of interests. On the other hand, a regular user of the phone line who occupies the residence being called undoubtedly has the sort of interest in privacy, peace, and quiet that Congress intended to protect.
Leyse v. Bank of America Nat'l Ass'n, No. 14-4073 (3d Cir. Oct. 14, 2015).