Friday, September 28, 2018
This action was commenced when Citibank, N.A. filed a routine state-court collection action against respondent George W. Jackson. Petitioner Home Depot U. S. A., Inc. was not a party to that action and never became a party to that collection dispute. Jackson then filed a counterclaim against Citibank asserting class-action consumer-protection claims. In addition to naming Citibank, Jackson named Home Depot and another company as original defendant to that counterclaim class action. The Class Action Fairness Act of 2005, Pub. L. No. 109-2, 119 Stat. 4, permits "any defendant in a state-court class action to remove the action to federal court if it satisfies certain jurisdictional requirements. Petitioner Home Depot is an original defendant in the class action at issue here and was never a plaintiff in any claim associated with this case.
The question presented is: Whether an original defendant to a class-action claim can remove the class action if it otherwise satisfies the jurisdictional requirements of the Class Action Fairness Act when the class action was originally asserted as a counterclaim against a co-defendant.
The Court also directed the parties to address the following question:
Should this court’s holding in Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100 (1941)—that an original plaintiff may not remove a counterclaim against it—extend to third-party counterclaim defendants?
Tuesday, July 31, 2018
Suzette Malveaux has published The Modern Class Action Rule: Its Civil Rights Roots and Relevance Today, 66 U. Kan. L. Rev. 325 (2017). Here’s the abstract:
The modern class action rule recently turned fifty years old — a golden anniversary. However, this milestone is marred by an increase in hate crimes, violence and discrimination. Ironically, the rule is marking its anniversary within a similarly tumultuous environment as its birth — the civil rights movement of the 1960’s. This irony calls into question whether this critical aggregation device is functioning as the drafters intended. This article makes three contributions.
First, the article unearths the rule’s rich history, revealing how the rule was designed in 1966 to enable structural reform and broad injunctive relief in civil rights cases. The article tells the story of how the drafters were united in creating a rule that would enable litigants to respond effectively to the fierce resistance to desegregation following the seminal Brown v. Board of Education decision. They deliberately crafted a rule to address desegregation obstructionism.
Second, the article examines the seminal role the modern class action rule has played in the private enforcement of statutory and Constitutional civil rights. The article analyzes Supreme Court jurisprudence interpreting Rule 23(b)(2) over the course of the last fifty years, identifying three primary periods in which the pendulum has swung: from a heyday of liberal class certification for broad injunctive relief for newly created rights; to a heightened critique and retraction of class certification; to a complex gauntlet of contemporary barriers.
Finally, the article critiques modern class action jurisprudence and concludes that it fails to sufficiently fulfill the drafters’ intent of creating an efficient and just procedural mechanism for challenging systemic inequality. The article urges a contemporary judicial interpretation that honors Rule 23(b)(2)’s strong civil rights mission.
Friday, July 27, 2018
Earlier this year the Ninth Circuit issued a 2-1 decision in In re Hyundai and Kia Fuel Economy Litigation. The panel reversed the district court’s certification of a settlement class involving claims against Hyundai and Kia over their vehicles’ fuel efficiency. The decision was particularly controversial because of the majority’s choice-of-law analysis and its potential impact on certifying nationwide classes.
Today the full Ninth Circuit granted en banc rehearing.
Oral argument is scheduled for the week of September 24, 2018.
Monday, July 23, 2018
Rye Murphy has published Competing Ideologies at the Formation of the Federal Class Action Rule: Legal Process Versus Legal Liberalism, 10 Drexel L. Rev. 389 (2018). Here’s the abstract:
In 1966, the Supreme Court promulgated a new procedural rule for class actions in federal court. Amended Rule 23 was a considerably different mechanism than its predecessor. It was more inviting of class action litigation but also incorporated new mechanisms for protecting class members. This was not an unreasonable trade-off, and one can imagine a group of rule-makers—elite academics, federal judges, prestigious attorneys—peaceably striving to write a rule that could balance individual class members’ interests with the interests of the class as a whole. But this is not what happened. The Rule 23 of today is an accord between two rival sects of mid-century legal thinking. The Legal Process tradition considered federal courts one of many institutions in society for mediating conflict, though the one uniquely capable of employing neutral reasoning to do so. Harvard Law School professors Benjamin Kaplan and Albert Sacks argued that a flexible, robust class action rule was needed to solve the complex, large-scale problems American society was increasingly facing. Attorney John P. Frank, a litigator and civil libertarian, fought vigorously against anything but the narrowest rule. Legal liberalism, Frank’s camp, tended to view federal courts in their capacity to enforce substantive principles, and Frank argued that the Constitution and American legal tradition forbade a rule that might deprive an individual of the opportunity to litigate her own interests. It was a duty of the rule-maker, for Frank, not to enact a rule that would violate what he identified as a principle of individualized adjudication. The balance the current rule strikes, including the opt-out mechanism, is a product of their compromise.
Wednesday, July 18, 2018
This week the Sixth Circuit decided Martin v. Behr Dayton Thermal Products, affirming the district court’s decision to certify various issues for class treatment under Rule 23(c)(4). The court sided with what it called “the broad view” of the relationship between Rule 23(b)(3)’s requirements and issue class actions under Rule 23(c)(4). From Judge Stranch’s opinion:
Under what is known as the broad view, courts apply the Rule 23(b)(3) predominance and superiority prongs after common issues have been identified for class treatment under Rule 23(c)(4). The broad view permits utilizing Rule 23(c)(4) even where predominance has not been satisfied for the cause of action as a whole.
After reviewing the circuit split over this question, the opinion concludes:
In sum, Rule 23(c)(4) contemplates using issue certification to retain a case’s class character where common questions predominate within certain issues and where class treatment of those issues is the superior method of resolution. See Nassau, 461 F.3d at 226; Fed. R. Civ. P. 23(c)(4) adv. comm. n. to 1966 amend. A requirement that predominance must first be satisfied for the entire cause of action would undercut the purpose of Rule 23(c)(4) and nullify its intended benefits. The broad approach is the proper reading of Rule 23, in light of the goals of that rule.
Tuesday, June 26, 2018
Yesterday’s Supreme Court order list included grants of certiorari in several cases, including these three:
Sudan v. Harrison presents the question:
Whether the Second Circuit erred by holding — in direct conflict with the D.C., Fifth, and Seventh Circuits and in the face of an amicus brief from the United States — that plaintiffs suing a foreign state under the Foreign Sovereign Immunities Act may serve the foreign state under 28 U.S.C § 1608(a)(3) by mail addressed and dispatched to the head of the foreign state’s ministry of foreign affairs “via” or in “care of” the foreign state’s diplomatic mission in the United States, despite U.S. obligations under the Vienna Convention on Diplomatic Relations to preserve mission inviolability.
Nutraceutical Corp. v. Lambert presents the question:
Federal Rule of Civil Procedure 23(f) establishes a fourteen-day deadline to file a petition for permission to appeal an order granting or denying class-action certification. On numerous occasions, this Court left undecided whether mandatory claim-processing rules, like Rule 23(f), are subject to equitable exceptions, because the issue was not raised below. See, e.g., Hamer v. Neighborhood Hous. Serv. of Chicago, 138 S. Ct. 13, 18 n.3, 22 (2017). That obstacle is not present here. The question presented is: did the Ninth Circuit err by holding that equitable exceptions apply to mandatory claim-processing rules and excusing a party’s failure to timely file a petition for permission to appeal, or a motion for reconsideration, within the Rule 23(f) deadline? As the Ninth Circuit acknowledged below, its decision conflicts with other United States Circuit Courts of Appeals that have considered this issue (the Second, Third, Fourth, Fifth, Seventh, Tenth, and Eleventh Circuits).
The question presented is: did the Ninth Circuit err by holding that equitable exceptions apply to mandatory claim-processing rules and excusing a party’s failure to timely file a petition for permission to appeal, or a motion for reconsideration, within the Rule 23(f) deadline?
And Henry Schein, Inc. v. Archer and White Sales, Inc. presents the question:
Whether the Federal Arbitration Act permits a court to decline to enforce an agreement delegating questions of arbitrability to an arbitrator if the court concludes the claim of arbitrability is “wholly groundless.”
June 26, 2018 in Class Actions, Federal Courts, Federal Rules of Civil Procedure, International/Comparative Law, Recent Decisions, Subject Matter Jurisdiction, Supreme Court Cases | Permalink | Comments (0)
Monday, June 11, 2018
Today the Supreme Court issued its decision in China Agritech, Inc. v. Resh (covered earlier here). Justice Ginsburg authored the Court’s opinion, which was joined by Chief Justice Roberts and Justices Kennedy, Thomas, Breyer, Alito, Kagan and Gorsuch. From the introduction:
This case concerns the tolling rule first stated in American Pipe & Constr. Co. v. Utah, 414 U. S. 538 (1974). The Court held in American Pipe that the timely filing of a class action tolls the applicable statute of limitations for all persons encompassed by the class complaint. Where class-action status has been denied, the Court further ruled, members of the failed class could timely intervene as individual plaintiffs in the still-pending action, shorn of its class character. See id., at 544, 552–553. Later, in Crown, Cork & Seal Co. v. Parker, 462 U. S. 345 (1983), the Court clarified American Pipe’s tolling rule: The rule is not dependent on intervening in or joining an existing suit; it applies as well to putative class members who, after denial of class certification, “prefer to bring an individual suit rather than intervene . . . once the economies of a class action [are] no longer available.” 462 U. S., at 350, 353–354 * * * .
The question presented in the case now before us: Upon denial of class certification, may a putative class member, in lieu of promptly joining an existing suit or promptly filing an individual action, commence a class action anew beyond the time allowed by the applicable statute of limitations? Our answer is no. American Pipe tolls the statute of limitations during the pendency of a putative class action, allowing unnamed class members to join the action individually or file individual claims if the class fails. But American Pipe does not permit the maintenance of a follow-on class action past expiration of the statute of limitations.
The opinion concludes:
The watchwords of American Pipe are efficiency and economy of litigation, a principal purpose of Rule 23 as well. Extending American Pipe tolling to successive class actions does not serve that purpose. The contrary rule, allowing no tolling for out-of-time class actions, will propel putative class representatives to file suit well within the limitation period and seek certification promptly. For all the above-stated reasons, it is the rule we adopt today: Time to file a class action falls outside the bounds of American Pipe.
Justice Sotomayor wrote a concurring opinion, which begins:
I agree with the Court that in cases governed by the Private Securities Litigation Reform Act of 1995 (PSLRA),15 U. S. C. §78u–4, like this one, a plaintiff who seeks to bring a successive class action may not rely on the tolling rule established by American Pipe & Constr. Co. v. Utah, 414 U. S. 538 (1974). I cannot, however, join the majority in going further by holding that the same is true for class actions not subject to the PSLRA.
Friday, June 8, 2018
Dave Marcus has published The History of the Modern Class Action, Part II: Litigation and Legitimacy, 1981-1994, 86 Fordham L. Rev. 1785 (2018). Here’s the abstract:
The first era of the modern class action began in 1966, with revisions to Rule 23 of the Federal Rules of Civil Procedure. It ended in 1980. Significant turmoil roiled these years. Policymakers grappled with the powerful device as advocates argued over its purpose, and judges struggled to create rules for the novel litigation the remade Rule 23 generated.
This Article tells the story of the class action’s second era, which stretched from 1981 to 1994. At first blush, these were quiet years. Doctrine barely changed, and until the early 1990s, policymakers all but ignored the device.
Below this surface tranquility lurked important developments in what the class action, newly embroiled in fundamental debates over litigation and legitimacy, was understood to implicate. Critics castigated the civil rights class action as an emblem of the “imperial judiciary’s” rise and of courts’ inability to separate law from politics. To industries targeted by plaintiffs’ lawyers, the securities fraud class action exemplified the “litigation explosion” and challenged judicial competence to screen for meritorious lawsuits. The emergence of the mass tort class action as an alternative to legislative and administrative processes made a determination of litigation’s legitimate role particularly urgent.
These second-era episodes deepened partisan divides over the class action and prompted new claims about what sort of private litigation could legitimately proceed. The three episodes drew new and influential participants into fights over the class action, and they eventually reengaged policymakers with class action regulation. Such developments made an era of significant reform all but inevitable.
Monday, June 4, 2018
From Alison Frankel, Fitbit lawyers reveal ‘ugly truth’ about arbitration, judge threatens contempt (Reuters):
At a hearing Thursday in San Francisco federal court, a lawyer for the fitness tracking company Fitbit told U.S. District Judge James Donato that no rational customer would arbitrate a $162 claim against the company. The filing fee for a proceeding before the American Arbitration Association, said William Stern of Morrison & Foerster, is $750 - and that’s just to get the case started. It simply doesn’t make sense, Stern said no fewer than six times at Thursday’s hearing, to arbitrate a $162 claim.
* * *
Thursday’s hearing was supposed to be about the opt-outs’ class action, but Judge Donato quickly homed in on the arbitration controversy. He said Fitbit’s handling of the McLellan arbitration “appears to be an absolutely unacceptable level of gamesmanship” and ordered briefing from both sides on whether Fitbit had engaged in “a form of civil contempt.”
The judge said he had sent the case to arbitration because Fitbit said that’s where it belonged. It is “profoundly troubling,” Judge Donato said, that Fitbit unilaterally decided McLellan’s claim could not be arbitrated because, as he described the company’s position, “We think it’s a cheap case, and we offered her plenty money to get rid of it, and she said no, and she’s crazy as a result of that, so our hands are now tied.’”
(H/T: Bob Klonoff)
Friday, June 1, 2018
Now on the Courts Law section of JOTWELL is Jasminka Kalajdzic’s essay, Questions of Funding and Compensation on the 50th Anniversary of Modern Class Actions. Jasminka reviews articles by Beth Burch, Publicly Funded Objectors, 19 Theoretical Inquiries in Law 47 (2018), and Brian Fitzpatrick, Can and Should the New Third-Party Litigation Financing Come to Class Actions?, 19 Theoretical Inquiries in Law 109 (2018).
Thursday, May 31, 2018
Bob Klonoff has posted on SSRN a draft of his article, Application of the New “Proportionality” Discovery Rule in Class Actions: Much Ado About Nothing, which is forthcoming the Vanderbilt Law Review. Here’s the abstract:
The “proportionality” amendment to the federal discovery rules, which went into effect on December 1, 2015, was greeted with panic by the plaintiffs’ bar (and the academy) and euphoria by the defense bar. Both sides predicted that the impact would be profound and immediate. Some predicted that the impact would be especially great in class actions. To examine whether the predictions have been correct, the author has reviewed every published judicial opinion (approximately 135) between December 1, 2015, and April 30, 2018, that applies the new proportionality rule in the class action context. The analysis is necessarily anecdotal rather than empirical. Nonetheless, the results are striking. At bottom, the proportionality amendment has had little impact, at least in the class action context. Courts have generally indicated that the new rule does not fundamentally change the governing principles. In ruling on discovery disputes in class actions, courts continue to conduct nuanced, highly fact-specific analyses, with results that differ little from pre-amendment case law. The courts are especially liberal in allowing discovery that is relevant to class certification. In short, the class action discovery decisions thus far do not support the predictions that the proportionality rule would lead to a sea change.
Monday, May 28, 2018
Last week the Supreme Court issued a 5-4 decision in Epic Systems Corp. v. Lewis. Justice Gorsuch wrote the majority opinion, joined by Chief Justice Roberts and Justices Kennedy, Thomas, and Alito. It begins:
Should employees and employers be allowed to agree that any disputes between them will be resolved through one-on-one arbitration? Or should employees always be permitted to bring their claims in class or collective actions, no matter what they agreed with their employers?
As a matter of policy these questions are surely debatable. But as a matter of law the answer is clear. In the Federal Arbitration Act, Congress has instructed federal courts to enforce arbitration agreements according to their terms—including terms providing for individualized proceedings. Nor can we agree with the employees’ suggestion that the National Labor Relations Act (NLRA) offers a conflicting command. It is this Court’s duty to interpret Congress’s statutes as a harmonious whole rather than at war with one another. And abiding that duty here leads to an unmistakable conclusion. The NLRA secures to employees rights to organize unions and bargain collectively, but it says nothing about how judges and arbitrators must try legal disputes that leave the workplace and enter the courtroom or arbitral forum.
Justice Ginsburg wrote a dissenting opinion, joined by Justices Breyer, Sotomayor, and Kagan. Here’s an excerpt from her introductory section:
Does the Federal Arbitration Act (Arbitration Act or FAA), 9 U. S. C. §1 et seq., permit employers to insist that their employees, whenever seeking redress for commonly experienced wage loss, go it alone, never mind the right secured to employees by the National Labor Relations Act (NLRA), 29 U. S. C. §151 et seq., “to engage in . . . concerted activities” for their “mutual aid or protection”? §157. The answer should be a resounding “No.”
In the NLRA and its forerunner, the Norris-LaGuardia Act (NLGA), 29 U. S. C. §101 et seq., Congress acted on an acute awareness: For workers striving to gain from their employers decent terms and conditions of employment, there is strength in numbers. A single employee, Congress understood, is disarmed in dealing with an employer. See NLRB v. Jones & Laughlin Steel Corp., 301 U. S. 1, 33–34 (1937). The Court today subordinates employee-protective labor legislation to the Arbitration Act. In so doing, the Court forgets the labor market imbalance that gave rise to the NLGA and the NLRA, and ignores the destructive consequences of diminishing the right of employees “to band together in confronting an employer.” NLRB v. City Disposal Systems, Inc., 465 U. S. 822, 835 (1984).
Monday, April 30, 2018
Whether the Federal Arbitration Act forecloses a state-law interpretation of an arbitration agreement that would authorize class arbitration based solely on general language commonly used in arbitration agreements.
Whether, or in what circumstances, a cy pres award of class action proceeds that provides no direct relief to class members supports class certification and comports with the requirement that a settlement binding class members must be “fair, reasonable, and adequate.”
Friday, April 27, 2018
Yesterday the Supreme Court adopted amendments to the Federal Rules of Civil Procedure (covered earlier here) and transmitted them to Congress. These amendments affect Rules 5, 23, 62, and 65.1. Unless Congress intervenes, they will take effect on December 1, 2018.
Tuesday, March 20, 2018
Supreme Court decision in Cyan: SLUSA & state court jurisdiction over 1933 Securities Act class actions
Today the Supreme Court issued a unanimous decision in Cyan, Inc. v. Beaver County Employees Retirement Fund. In an opinion authored by Justice Kagan, the Court addresses the effect of the Securities Litigation Uniform Standards Act of 1998 (SLUSA) on class actions that allege violations of only the Securities Act of 1933 (which governs the original issuance of securities). The defendants argued that SLUSA deprives state courts of jurisdiction over such class actions. The Solicitor General proposed what Justice Kagan called a “halfway-house position,” whereby state courts have jurisdiction but defendants may remove such class actions to federal court.
The Court unanimously rejects both arguments. First, the Court holds that state courts retain jurisdiction over class actions that allege only 1933 Act violations: “SLUSA’s text, read most straightforwardly, leaves in place state courts’ jurisdiction over 1933 Act claims, including when brought in class actions.” Second, the Court holds that when such class actions are filed in state court, they may not be removed to federal court. SLUSA did not exempt such class actions from the general bar on removal currently codified at 15 U.S.C. § 77v(a).
Thursday, March 1, 2018
In this week’s Jennings v. Rodriguez decision, the Supreme Court rules 5-3 that certain noncitizens detained in the course of immigration proceedings have no statutory right to periodic bond hearings. The Court remands the case, however, to address the plaintiffs’ constitutional arguments.
All three opinions in the case have something to say about class actions—Justice Alito’s (mostly) majority opinion, Justice Thomas’s concurring opinion, and Justice Breyer’s dissenting opinion. In remanding the case for the Ninth Circuit to consider the plaintiffs’ constitutional claims, Justice Alito writes:
[T]he Court of Appeals should consider on remand whether it may issue classwide injunctive relief based on respondents’ constitutional claims. If not, and if the Court of Appeals concludes that it may issue only declaratory relief, then the Court of Appeals should decide whether that remedy can sustain the class on its own. See, e. g., Rule 23(b)(2) (requiring “that final injunctive relief or corresponding declaratory relief [be] appropriate respecting the class as a whole” (emphasis added)).
The Court of Appeals should also consider whether a Rule 23(b)(2) class action continues to be the appropriate vehicle for respondents’ claims in light of Wal-Mart Stores, Inc. v. Dukes, 564 U. S. 338 (2011). We held in Dukes that “Rule 23(b)(2) applies only when a single injunction or declaratory judgment would provide relief to each member of the class.” Id., at 360. That holding may be relevant on remand because the Court of Appeals has already acknowledged that some members of the certified class may not be entitled to bond hearings as a constitutional matter. See, e. g., 804 F. 3d, at 1082; 715 F. 3d, at 1139–1141 (citing, e. g., Shaughnessy v. United States ex rel. Mezei, 345 U. S. 206 (1953)). Assuming that is correct, then it may no longer be true that the complained-of “‘conduct is such that it can be enjoined or declared unlawful only as to all of the class members or as to none of them.’” Dukes, supra, at 360 (quoting Nagareda, Class Certification in the Age of Aggregate Proof, 84 N. Y. U. L. Rev. 97, 132 (2009)).
Similarly, the Court of Appeals should also consider on remand whether a Rule 23(b)(2) class action litigated on common facts is an appropriate way to resolve respondents’ Due Process Clause claims. “[D]ue process is flexible,” we have stressed repeatedly, and it “calls for such procedural protections as the particular situation demands.” Morrissey v. Brewer, 408 U. S. 471, 481 (1972); see also Landon v. Plasencia, 459 U. S. 21, 34 (1982).
Justice Breyer’s dissenting opinion responds:
Federal Rule of Civil Procedure 23(b)(2) permits a class action where “final injunctive relief or corresponding declaratory relief is appropriate respecting the class as a whole.” (Emphasis added.) And the Advisory Committee says that declaratory relief can fall within the Rule’s term “corresponding” if it “serves as a basis for later injunctive relief.” Notes on Rule 23(b)(2)–1966 Amendment, 28 U. S. C. App., p. 812.
* * *
Neither does Wal-Mart Stores, Inc. v. Dukes, 564 U. S. 338 (2011), bar these class actions. Every member of each class seeks the same relief (a bail hearing), every member has been denied that relief, and the differences in situation among members of the class are not relevant to their entitlement to a bail hearing.
And Justice Thomas’s concurring opinion flags in a footnote the issue of whether class actions can seek a habeas corpus remedy: “This Court has never addressed whether habeas relief can be pursued in a class action. See Schall v. Martin, 467 U. S. 253, 261, n. 10 (1984) (reserving this question). I take no position on that issue here, since I conclude that respondents are not seeking habeas relief in the first place.”
(H/T: Adam Zimmerman)
Monday, February 26, 2018
Section 1 of the Federal Arbitration Act (“FAA”) provides that the FAA does not apply “to contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.” 9 U.S.C. § 1. Respondent is an independent contractor whose agreement with interstate trucking company New Prime, Inc. (“Prime”) includes a mandatory arbitration provision requiring Respondent to arbitrate all workplace disputes with Prime on an individual basis. Respondent does not challenge the validity of the arbitration agreement he signed or the delegation clause contained therein, which mandates that all disputes regarding arbitrability be decided by an arbitrator. Nonetheless, Respondent filed a putative class action in court and opposed arbitration on the basis of the Section 1 exemption.
The questions presented are:
1. Whether a dispute over applicability of the FAA’s Section 1 exemption is an arbitrability issue that must be resolved in arbitration pursuant to a valid delegation clause.
2. Whether the FAA’s Section 1 exemption, which applies on its face only to “contracts of employment,” is inapplicable to independent contractor agreements.
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.)
Friday, December 8, 2017
Today the U.S. Supreme Court granted certiorari in several cases, including these two:
United States v. Sanchez-Gomez presents the question: “Whether the court of appeals erred in asserting authority to review respondents’ interlocutory challenge to pretrial physical restraints and in ruling on that challenge notwithstanding its recognition that respondents’ individual claims were moot.”
China Agritech, Inc. v. Resh presents the question: “Whether the American Pipe rule tolls statutes of limitations to permit a previously absent class member to bring a subsequent class action outside the applicable limitations period.”