Wednesday, September 2, 2015

Possible "Coming Liberal Disaster" on Class Actions, Too

Howard Bashman at How Appealing brought attention to a post by Jeffrey Toobin in The New Yorker about a possible upcoming “disaster” for liberals in the October 2015 term in the Supreme Court.  Mr. Toobin included affirmative action, abortion, and public-employee unions in “the subjects before the Justices [that] appear well suited for liberal defeats.” 


Mr. Toobin could also have included private-law class actions.  The Court has granted cert in four cases that could hobble class actions well before the Civil Rules Advisory Committee moves forward in its consideration of the topic.  As we’ve previously reported (but not all in one post, if memory serves), these four cases are:


Spokeo, Inc. v. Robins, Docket No. 13-1339, a putative class action alleging violations of the Fair Credit Reporting Act.  The petition, according to Spokeo, presents the question, “May Congress 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?” 


Now, if you ask me (and no one did), the way this question is phrased mischaracterizes the record in this case.  The case reaches the Supreme Court on a motion to dismiss, which means all that is in front of the Court is the complaint (First Amended Complaint, to be exact).  The complaint alleges that Spokeo published false information about the plaintiff’s age, status, and wealth, that plaintiff was unemployed, that Spokeo marketed its reports to prospective employers, and that plaintiff remains unemployed.  The complaint then tied these allegations to specific provisions of the Fair Credit Reporting Act that he claimed were violated.  In my view, therefore, the question presented would be more accurately phrased along the lines of the Solicitor General's amicus brief opposing cert: “Whether respondent’s complaint identified an Article III injury-in-fact by alleging that petitioner had willfully violated 15 U.S.C. 1681e(b) by publishing inaccurate personal information about respondent in consumer reports prepared by petitioner without following reasonable procedures to assure the information’s accuracy.”  (See also Stephen Wermiel's post on SCOTUSBlog.)


Be that as it may, the business community clearly sees Spokeo as a "blockbuster" (in the words of Alison Frankel at Reuters) capable of effectively eliminating class actions based on a wide variety of consumer-protection statutes, privacy statutes, and anti-discrimination statutes.  Seventeen amicus briefs have been filed favoring Spokeo, many of them containing the familiar parade-of-horribles about “class action abuse,” greedy plaintiffs’ lawyers, and blackmail settlements.  In their view, statutes such as the Truth in Lending Act, the Fair Debt Collection Practices Act, the Fair Housing Act, and the Americans with Disabilities Act authorize statutory damages for “technical,” “trivial” violations that cause no real “harm.”  


Tyson Foods, Inc. v. Bouaphakeo, Docket No. 14-1146, a certified collective action under the Fair Labor Standards Act and a certified class action under Rule 23 and Iowa state law, claiming Tyson failed to fully compensate its hourly workers at one plant in Iowa for donning and doffing time.  The case was filed in 2007, resulted in a plaintiff verdict after a nine-day jury trial, and has been affirmed twice on appeal.  According to Tyson, the questions presented are:    

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.

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.


The petitioner (and the multitude of business amici supporting the petitioner) hope to expand on Wal-Mart v. Dukes’ disapproval of “trial by formula” and gain a toehold for their apparent position that prior to class certification, plaintiffs must prove that every member of the class is, in defendants’ eyes, “injured.”  In addition, these arguments are being made without distinguishing between opt-out Rule 23 class actions and opt-in FLSA collective actions. 


Campbell-Ewald Company v. Gomez, Docket No. 14-857, which according to the petitioner presents the questions:

Does a case becomes moot, and thus beyond the judicial power of Article III, when the plaintiff receives an offer of complete relief on his claim?

Is the answer to the first question any different when the plaintiff has asserted a class claim under Federal Rule of Civil Procedure 23, but receives an offer of complete relief before any class is certified?

Campbell-Ewald could expand the unfortunate implication of Genesis Healthcare Corp. v. Symczyk, 133 S. Ct. 1523 (2013), that a defendant might be able to pick off a named class representative by offering him or her full compensation for his or her individual damages, even if the named plaintiff does not agree to accept the offer.


DirecTV, Inc., v. Imburgia, Docket No. 14-462, in which putative class actions in Los Angeles Superior Court alleged that DIRECTV had violated California law by assessing early cancellation fees when plaintiffs cancelled their DIRECTV accounts.  Alas, DirecTV has forced-arbitration, no-class-action clauses in its “contracts.”  The California Court of Appeals affirmed the trial court in refusing to enforce the class-action waiver.  According to DirecTV, the petition presents the question, “Did the California Court of Appeal err by holding, in direct conflict with the Ninth Circuit, that a reference to state law in an arbitration agreement governed by the Federal Arbitration Act requires the application of state law preempted by the Federal Arbitration Act?”  Imburgia thus is poised to continue the Supreme Court’s crazed enthusiasm for forced-arbitration clauses/class-action waivers in contracts of adhesion.

Class Actions, In the News, Standing, Supreme Court Cases | Permalink


Post a comment