Wednesday, December 16, 2015

CAFA Governs Attorneys’ Fees in Class Settlement Involving Michaels’ Vouchers

          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.

[Footnotes omitted.]

            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.”       

December 16, 2015 in Class Actions, MDLs, Recent Decisions | Permalink | Comments (0)

Tuesday, December 15, 2015

Institute for Law Teaching and Learning: Call for Proposals

The Institute for Law Teaching and Learning (of the law schools of Gonzaga, Washburn, and Arkansas-Little Rock) has issued a Call for Presentation Proposals for its Summer 2016 conference on Real-World Readiness.

The conference will take place at Washburn University School of Law in Topeka, Kansas, from June 9-11, 2016.  Further information is available on the website.

December 15, 2015 in Conferences/Symposia | Permalink | Comments (0)

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.”

Continue reading

December 14, 2015 in Class Actions, Recent Decisions, Supreme Court Cases | Permalink | Comments (1)

Recent Scholarship: Patent Litigation; Supreme Court Justice Loyalty; “Litigation Trolls”

Three new articles recently posted on SSRN:

1. Christopher Beauchamp (Brooklyn Law School) has posted The First Patent Litigation Explosion, forthcoming in Yale Law Journal.

Abstract:

The twenty-first century “patent litigation explosion” is not unprecedented. In fact, the nineteenth century saw an even bigger surge of patent cases. During that era, the most prolific patent enforcers brought hundreds or even thousands of suits, dwarfing the efforts of today’s leading “trolls.” In 1850, New York City and Philadelphia alone had ten times more patent litigation, per U.S. patent in force, than the entire United States in 2013. Even the absolute quantity of late-nineteenth-century patent cases bears comparison to the numbers filed in recent years: the Southern District of New York in 1880 would have ranked third on the list of districts with the most patent infringement suits filed in 2014 and would have headed the list as recently as 2010.

This Article reveals the forgotten history of the first patent litigation explosion. It first describes the rise of large-scale patent enforcement in the middle of the nineteenth century. It then draws on new data from the archives of two leading federal courts to trace the development of patent litigation from 1840 to 1910 and to outline the scale, composition, and leading causes of the litigation boom. Finally, the Article explores the consequences of this phenomenon for the law and politics of the patent system. The effects of the litigation explosion were profound. The rise of large-scale patent assertion provides a new explanation for patent law’s crucial shift from common law to equity decision making in the middle of the nineteenth century. And at its height, the litigation explosion produced a political backlash that threatened to sweep away the patent system as we know it. Recovering the history of patent law during this formative and turbulent era offers fresh perspectives on the patent reform debates of today.

2. Lee Epstein (Washington University in St. Louis School of Law) and Eric A. Posner (University of Chicago Law School) have posted Supreme Court Justices' Loyalty to the President.

Abstract:

A statistical analysis of voting by Supreme Court justices from 1937-2014 provides evidence of a “loyalty effect”—justices more frequently vote for the government when the president who appointed them is in office than when subsequent presidents lead the government. This effect exists even when subsequent presidents are of the same party as the justices in question. However, the loyalty effect is much stronger for Democratic justices than for Republican justices. This may be because Republican presidents are more ideologically committed than Democratic justices are, leaving less room for demonstrations of loyalty.

 

3. Bradley Wendel (Cornell University School of Law) has posted Litigation Trolls (NYU Law School Center on Civil Justice Symposium on "Litigation Funding: The Basics and Beyond").

Abstract:     

Third-party financing of litigation has been described with a variety of unflattering metaphors. Litigation financers have been likened to gamblers in the courtroom casino, loan sharks, vultures, Wild West outlaws, and busybodies mucking about in the private affairs of others. Now Judge Richard Posner has referred to third-party financers as litigation trolls, an undeniably unflattering comparison to patent trolls. But what it is, if anything, that makes third-party financers “trolls”? Legal claims are, for the most part, freely assignable, the proceeds of claims are assignable, and various strangers to the underlying lawsuit, including liability insurers and plaintiffs’ contingency-fee counsel, are permitted to have an economic interest in the outcome of the litigation. On one view, therefore, third-party litigation investment is just another innovative financial product that enables risk to be carved up and allocated more efficiently. Life insurance, attorney contingent fees, and derivative contracts on exchange-traded commodities were all formerly regarded with extreme suspicion, but are now widely accepted. But people still hate patent trolls. So whether litigation funding is some kind of conceptual anomaly is an important question because, as it happens, Posner’s dictum coincides with a public-relations campaign by the U.S. Chamber of Commerce to stigmatize third-party litigation financing and saddle the industry with new and burdensome regulations. This short paper evaluates the conceptual critique of litigation financing by comparison with two other areas in which it is claimed that some form of financing “just doesn’t sit right” in light of the nature and function of the legal system – patent trolling and contributions to judicial election campaigns.

December 14, 2015 in Federal Courts, Recent Scholarship, Supreme Court Cases | Permalink | Comments (0)

Sunday, December 13, 2015

New Study of State Court Litigation by the National Center for State Courts

Paula Hannaford Agor, Scott E. Graves, and Shelley Spacek Miller, all of the National Center for State Courts, have published on SSRN their study, The Landscape of Civil Litigation in State Courts.

Abstract:

The Landscape of Civil Litigation of State Courts examined case characteristics and outcomes for civil cases disposed during a one-year interval from all courts exercising jurisdiction over civil cases in 10 urban counties in the United States. This report is the first significant multi-jurisdiction study of civil caseloads since the 1992 Civil Justice Survey of State Courts, and is more comprehensive than the 1992 study insofar that it examined the entire civil caseload rather than just cases filed in general jurisdiction courts. The Landscape dataset consisted of 925,344 cases, which reflects approximately 5% of civil caseloads nationally.

Key findings: more than half of the Landscape cases were low-value debt collection, landlord/tenant, and small claims cases; three-quarters of the judgments entered in the Landscape cases were $5,200 or less; most cases were resolved through an administrative process rather than an adversarial proceeding; and at least one party was self-represented in more than three-quarters of the cases. These findings offer a dramatically changed picture of civil caseloads compared to two decades ago and to perceptions held by many civil trial lawyers and judges.

December 13, 2015 in Recent Scholarship, State Courts | Permalink | Comments (0)

Wednesday, December 2, 2015

July 2016 Bar Exam Would Be Earliest to Test on 2015 FRCP Amendments

Over at PrawfsBlawg, Jessica Berch reported on the announcement by the National Conference of Bar Examiners that the earliest that the latest FRCP amendments would be tested would be the July 2016 Multistate Bar Examination and Multistate Essay Examinations.

 

December 2, 2015 in Federal Rules of Civil Procedure, Weblogs | Permalink | Comments (0)

More on the Duke Law Center and the New Discovery Proportionality Rule

To mark the effective date of the latest FRCP amendments, the American Constitution Society's blog posted a short piece by Professor Suja A. Thomas entitled Duke Law and the New Discovery Proportionality Rule.     

The piece describes the controversy surrounding the Duke Center for Judicial Studies’ so-called "Guidelines and Suggested Practices for Implementing the 2015 Discovery Amendments to Achieve Proportionality," which we covered earlier here.

December 2, 2015 in Discovery, Federal Rules of Civil Procedure, Weblogs | Permalink | Comments (0)

Reinert on Measuring the Impact of Plausibility Pleading

Professor Alexander Reinert's empirical study of Iqbal, entitled Measuring the Impact of Plausibility Pleading, has now been published in 101 Va. L. Rev. 2117 (2015).  Professor Reinert earlier posted the article on SSRN.

Abstract:

In the United States, modern civil procedure began in 1938 with the promulgation of the Federal Rules of Civil Procedure. From then, until very recently, the notice pleading standard – emphasizing simplicity and brevity in pleadings over technicality – was held up as an example of the Rule’s commitment to adjudicating the merits of every claim and avoiding premature and wasteful disputes that often had little to do with merits. In Bell Atlantic v. Twombly and Ashcroft v. Iqbal, announced in 2007 and 2009, the United States Supreme Court revisited the notice pleading standard, announcing that “plausibility pleading” must now be the standard for assessing whether a complaint’s allegations are sufficient to justify moving to discovery and merits adjudication. This Article offers a comprehensive analysis of the impact of the plausibility pleading standard on resolutions of motions to dismiss in almost 4200 cases from 15 different judicial districts, representing all 12 general jurisdiction circuit courts of appeal. Relying on data obtained from all published and unpublished opinions in these districts for the years 2006 and 2010, this study provides the most detailed analysis to date of the impact that plausibility pleading and other variables have had on the resolutions of motions to dismiss in civil cases.

The data reported here suggest that many prior studies have failed adequately to capture the full impact of Iqbal and Twombly on the resolution of motions to dismiss in federal court. First, this Article provides data showing that dismissals of employment discrimination and civil rights cases have risen significantly in the wake of Iqbal. These results remained significant even after controlling for potential confounding factors. Second, the data also suggest that certain factors interact with the plausibility standard to influence the resolution of a motion to dismiss, including perhaps most importantly the institutional status of the plaintiff and defendant. Individuals have fared poorly under the plausibility regime, at least when compared to corporate and governmental agents and entities. These effects remained significant even after controlling for several potentially confounding variables. Finally, by analyzing data on the progress of cases after a motion to dismiss has been adjudicated, this Article shows that the advent of heightened pleading has not resulted in higher quality claims.

Along with providing an important descriptive account of the impact that plausibility pleading has had on the course of federal litigation, this Article suggests two heretofore unexplored bases for questioning the wisdom of the transition initiated by Twombly and solidified by Iqbal. First, while one should not be shocked by the observation that civil rights and employment discrimination claims suffer under the plausibility pleading regime, one should still be troubled by it given the historical role that federal courts have played in such cases. Second, to the extent that the plausibility regime has exacerbated inequality in the courts between individual litigants on one hand and corporate and governmental entities on the other, without increasing overall case quality, there should be wider agreement that such a change is to be lamented.

December 2, 2015 in Recent Scholarship, Twombly/Iqbal | Permalink | Comments (0)

Tuesday, December 1, 2015

Today's SCOTUS Decision on the Foreign Sovereign Immunities Act

Today the Supreme Court issued its first opinion in an argued case this Term: OBB Personenverkehr AG v. Sachs. In an opinion by Chief Justice Roberts, the Court unanimously held that a lawsuit against the Austrian state-owned railway was barred by Foreign Sovereign Immunities Act. From the opinion:

Respondent Carol Sachs is a resident of California who purchased in the United States a Eurail pass for rail travel in Europe. She suffered traumatic personal injuries when she fell onto the tracks at the Innsbruck, Austria, train station while attempting to board a train operated by the Austrian state-owned railway. She sued the railway in Federal District Court, arguing that her suit was not barred by sovereign immunity because it is “based upon” the railway’s sale of the pass to her in the United States. We disagree and conclude that her action is instead “based upon” the railway’s conduct in Innsbruck. We therefore hold that her suit falls outside the commercial activity exception and is barred by sovereign immunity. 

Our earlier coverage is here.

 

 

December 1, 2015 in Federal Courts, Recent Decisions, Subject Matter Jurisdiction, Supreme Court Cases | Permalink | Comments (0)

December 1, 2015: FRCP Amendments Now In Effect

The recent batch of amendments to the Federal Rules of Civil Procedure, which the Supreme Court adopted in April, are in effect as of today. Some of our earlier coverage is here and here.

 

December 1, 2015 in Discovery, Federal Courts, Federal Rules of Civil Procedure | Permalink | Comments (0)

Monday, November 30, 2015

Steinman on Spokeo, Inc. v. Robins

In another recent essay on Spokeo, Inc. v. Robins (see also here and here), Professor Joan E. Steinman (IIT-Chicago-Kent College of Law) has posted on SSRN her article, Spokeo, Where Shalt Thou Stand?  This article is forthcoming in Vanderbilt Law Review, Vol. 68 (2015).

Abstract:     

This essay analyzes three distinct issues raised by Spokeo, Inc. v. Robins and considers where the Court will stand on each of them. First, I consider whether the Court will decide the question on which it granted certiorari: "[w]hether Congress may confer Article III standing upon a plaintiff who suffers no concrete harm, and who therefore could not otherwise invoke the jurisdiction of a federal court, by authorizing a private right of action based on a bare violation of a federal statute?" I explain why the Court might dismiss its writ of certiorari as improvidently granted. Second, I address whether Spokeo, Inc. or Robins has the better of the argument concerning Robins’ standing to sue. I opine that the Court’s decisions regarding standing in disputes concerning informational rights and wrongs indicate that it should find that the injury alleged by Robins is sufficiently concrete to confer Article III standing, and that Robins also satisfies prudential standing doctrines. Finally, I argue that the Court should not be dissuaded from so holding by the fact that the suit was brought as a class action.

 

November 30, 2015 in Standing, Supreme Court Cases | Permalink | Comments (0)

Hessick on Understanding Standing and Spokeo, Inc. v. Robins

Professor F. Andrew Hessick (University of Utah - S.J. Quinney School of Law) has posted on SSRN his article, "Understanding Standing."  The article is forthcoming in Vanderbilt Law Review En Banc.

Abstract:

Spokeo, Inc. v. Robins, which is before the Supreme Court this term, poses a fundamental question of Article III standing: Does a person have standing to sue to seek redress for the violation of a substantive statutory right, even if he did not suffer any factual harm from the violation of that right?

Standing is one of the doctrines that define the power of the federal judiciary. Federal courts cannot hear all disputes. Instead, Article III authorizes them to resolve only “cases” and “controversies.” The Supreme Court has interpreted those terms to authorize federal courts to resolve only those disputes that were “traditionally amenable to, and resolved by, the judicial process.” This restriction, the Court has said, is critical to maintaining the separation of powers. According to the Court, standing enforces these limits on the judicial power.

Despite standing’s importance to maintaining the federal judiciary’s proper role in the federal government, the Court has been inconsistent on what a plaintiff must show to establish standing. Some cases say that the violation of an individual right is enough; others suggest that a factual harm is required. That inconsistency underlies the standing dispute in Spokeo. If the purpose of Article III standing is to protect the separation of powers by restricting federal courts to resolving only those disputes that courts historically could hear, the answer to that question is clear: the violation of a legal right alone should support Article III standing.

November 30, 2015 in Standing, Supreme Court Cases | Permalink | Comments (0)

Friday, November 20, 2015

Supreme Court Mapping Project: The Collateral Order Doctrine

Over at his In Progress blog, Colin Starger has mapped out everyone’s favorite judicially-crafted exception the final judgment rule, showing “19 of the Supreme Court’s collateral order cases using a modified Spaeth Projection.” 

 

 

 

November 20, 2015 in Federal Courts, Supreme Court Cases, Weblogs | Permalink | Comments (0)

Thursday, November 19, 2015

Thornburg on Cognitive Bias, the "Band of Experts," and the Anti-Litigation Narrative

Professor Elizabeth Thornburg has posted on SSRN her article, Cognitive Bias, the "Band of Experts," and the Anti-Litigation Narrative.  The article was written for the Clifford Symposium this past spring and is forthcoming, along with other articles from the symposium, in DePaul Law Review early next year.

Abstract:

In December of 2015, yet another set of discovery rule amendments that are designed to limit discovery will go into effect. This article argues that the consistent pattern of discovery retrenchment is no accident. Rather, a combination of forces is at work. The Supreme Court consistently signals its contempt for the discovery process, and the Chief Justice’s pattern of appointments to the Rules Committees skews toward Big Law defense-side lawyers and judges appointed by Republican Presidents. In addition, longstanding corporate media campaigns have created and reinforced an anti-litigation narrative that, through the power of repetition, dominates public discourse. Further, predictable cognitive biases take this blend of politics, elite and often defense-side experience, and corporate manipulation of public opinion and blind the Rules Committee members to the possibilities of solutions that expand rather than contract information sharing. This article considers these phenomena, and recommends more heterogeneous committee membership, the use of deliberative processes that are more likely to overcome flawed heuristics, and greater reliance on non-opinion-poll data in the rulemaking process.

 

November 19, 2015 in Federal Rules of Civil Procedure, Recent Scholarship | Permalink | Comments (0)

Tuesday, November 17, 2015

Law Professor Challenges the Seeming Federal Endorsement of Duke Nonbinding “Guidelines” on Proportionality Amendments

When I first read a draft of the Duke Center for Judicial Studies’ "Guidelines and Suggested Practices for Implementing the 2015 Discovery Amendments to Achieve Proportionality" (the “Duke Guidelines”), I was confused.  I was aware, of course, that Duke Law School had sponsored the 2010 conference on civil litigation now known commonly as the “Duke Conference,” which spawned the amendments to the Federal Rules of Civil Procedure that, apart from divine intervention, appear certain to go into effect on December 1, 2015.  The dean of Duke Law School is David F. Levi, a former federal district judge who was chair of both the Civil Rules Advisory Committee and the Committee on the Rules of Practice and Procedure (known as the Standing Committee).  The papers that were presented at the Duke Conference are still posted on the official website of the United States courts. 

In 2011, Duke Law School created the Duke Center for Judicial Studies, a primary goal of which was to offer “educational programs for judges.”  In addition, the Center took over the publication of Judicature: The Scholarly Journal for Judges, which is “mailed free of charge to all Article III judges, federal magistrate judges, and state supreme court judges.”           

It seems clear that Duke has positioned itself to appear as a quasi-official body with particular expertise and gravitas in matters of federal litigation.  Even the Advisory Committee on Criminal Rules has met at Duke.

So this summer, as I read a draft of the “Duke Guidelines” regarding the “proportionality” amendment to the FRCP (which will require all discovery to be “proportional to the needs of the case”), I had a lot of questions.  These aren’t binding, are they?  [No.]  Who wrote these?  [According to the final version, mainly the Reporters, with Team Leaders and Team Members providing feedback.]  At whose instigation?  [The Duke Center’s Advisory Council.]  Why on earth are they necessary?  [Rhetorical.]  Why were these being drafted well before the rules even become effective?  Do these things have any basis in case law?  Why don’t they compare what they are saying to the official Advisory Committee notes?  Why don’t they give any concrete examples of a particular type of case such as employment discrimination?  And isn’t there a Rules Enabling Act issue in here somewhere?       

Despite all these questions, I frankly put the Guidelines out of my mind, after satisfying myself that the Duke Center was not representing that its Guidelines were legally binding, and after posting about their existence on this blog (stating that the Center had asked for comments). 

Professor Suja Thomas of the University of Illinois College of Law, however, has challenged the federal courts’ seeming “official esteem” of the Duke Guidelines that results from various ties between Duke and the federal Rules Committees.

 

The “Roadshow” that Uses the Duke Guidelines to “Think About” Proportionality

As we reported earlier, the Duke Center and the ABA are jointly presenting an “unprecedented” "Roadshow" on the 2015 discovery amendments.  The former chair and a former member of the Civil Rules Advisory Committee, Judge Lee Rosenthal and Professor Steven Gensler, respectively, will be the moderators for the Roadshow.  As Professor Thomas has noted, the Roadshow’s emphasis on Judge Rosenthal’s and Professor Gensler’s former affiliation with the Advisory Committee “gives the training an imprimatur of approval.” 

Continue reading

November 17, 2015 in Federal Rules of Civil Procedure | Permalink | Comments (0)

Monday, November 16, 2015

Public Interest Group Reports on November 5 Advisory Committee Meeting

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.”

 

November 16, 2015 in Class Actions, Federal Rules of Civil Procedure | Permalink | Comments (0)

Friday, November 13, 2015

Moore on Spokeo, Inc. v. Robins

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.

Abstract:

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.                        

November 13, 2015 in Class Actions, Recent Scholarship, Standing, Supreme Court Cases | Permalink | Comments (0)

Tuesday, November 10, 2015

Today’s SCOTUS Oral Argument in Tyson Foods v. Bouaphakeo

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.

Here is the transcript. For our earlier coverage of the case, see here and here.

 

 

November 10, 2015 in Class Actions, Federal Courts, Federal Rules of Civil Procedure, Recent Decisions, Supreme Court Cases | Permalink | Comments (0)

Monday, November 9, 2015

SEALS Call for Submissions to the Works-in-Progress Series

The Southeastern Association of Law Schools (SEALS) will hold its annual conference August 3-6, 2016 in Amelia Island, Florida.  While registration for the conference will not open until February 2016, the SEALS Works-in-Progress Series Committee is seeking submissions for its 2016 workshops.

The website states, "The Works-in-Progress Series (3 hour sessions) is designed for all intermediate and senior scholars who are further along in their scholarship and development than 'new' scholars."  Click here for more information on the Works-in-Progress series. 

Those interested in participating should submit an abstract (no more than 500 words) of their work-in-progress to sealsworksinprogress@gmail.com by December 1, 2015.

 

 

 

November 9, 2015 in Conferences/Symposia | Permalink | Comments (0)

Saturday, November 7, 2015

Wasserman on Fletcherian Standing, Merits, and Spokeo, Inc. v. Robins

Professor Howard Wasserman has posted on SSRN his essay, Fletcherian Standing, Merits, and Spokeo, Inc. v. Robins.

Abstract:

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.

November 7, 2015 in Class Actions, Recent Scholarship, Standing | Permalink | Comments (1)