Monday, February 26, 2018
A couple of decisions from the federal circuits in recent weeks:
In Hagy v. Demers & Adams, the Sixth Circuit addressed Article III standing and the Supreme Court’s 2016 decision in Spokeo. Judge Sutton’s opinion dismisses a case brought under the Fair Debt Collection Practices Act (FDCPA) “[b]ecause the complaint failed to identify a cognizable injury traceable to [the defendant] and because Congress cannot override this baseline requirement of Article III of the U.S. Constitution by labeling the violation of any requirement of a statute a cognizable injury.” (H/T: Howard Bashman)
In Simpson v. Trump University, the Ninth Circuit affirmed the district court’s approval of a class action settlement involving seminars offered by Trump University. Here’s the introduction from Judge Nguyen’s opinion:
Trump University, now defunct, was a for-profit entity that purported to teach Donald J. Trump's “secrets of success” in the real estate industry. During the 2016 presidential election, Trump University and Trump were defendants in three lawsuits alleging fraud and violations of various state and federal laws: two class actions in the Southern District of California, and a suit by the New York Attorney General in state court. Each suit alleged that Trump University used false advertising to lure prospective students to free investor workshops at which they were sold expensive three-day educational seminars. At these seminars, instead of receiving the promised training, attendees were aggressively encouraged to invest tens of thousands of dollars more in a so-called mentorship program that included resources, real estate guidance, and a host of other benefits, none of which ever materialized.
In the California cases, the district court certified two classes of over eight thousand disappointed “students,” and scheduled the cases for trial in late November 2016. On November 8, 2016, Trump was elected President of the United States. Within weeks, the parties reached a global settlement on terms highly favorable to class members. Plaintiffs would receive between 80 to 90 percent of what they paid for Trump University programs, totaling $21 million. The defendants agreed to pay an additional $4 million in the case brought by the Attorney General of New York.
This appeal involves a lone objector, Sherri Simpson, who seeks to opt out of the class and bring her claims in a separate lawsuit, which would derail the settlement. Simpson does not dispute that she received, at the class certification stage, a court-approved notice of her right to exclude herself from the class and chose not to do so by the deadline. She argues, however, that the class notice promised her a second opportunity to opt out at the settlement stage, or alternatively, that due process requires this second chance. Neither argument is correct. We affirm.
(H/T: Adam Zimmerman) (Full disclosure: I joined an amicus brief on behalf of civil procedure professors in support of the objector in this case.)