Feeds:
Posts
Comments

Posts Tagged ‘fcra’

The United States Supreme Court issued its highly-anticipated decision this morning in Spokeo, Inc. v. Robins, No. 13-1339, a case that many commentators have been following as a potential barometer for the Court’s treatment of consumer and class action issues following the death of Justice Antonin Scalia.  As it turns out, Justice Scalia’s absence did not impact the outcome of the case, which was decided by a 6-2 majority (though there is of course no way of knowing how Justice Scalia’s participation might have impacted the rationale).

The Petition for Certiorari had originally been granted to answer the question “whether 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.”  http://www.supremecourt.gov/qp/13-01339qp.pdf (Emphasis added).

The majority opinion, authored by Justice Alito, answered this question in the negative, holding that a plaintiff must establish “concrete” harm in order to have standing to pursue a statutory cause of action in federal court.  However, the interesting part of the opinion is the Court’s analysis of what may suffice as “concrete” harm.  In particular, the Court held, Congress may identify “intangible” harms and elevate those harms to the status of concrete injuries supporting Article III standing.  Examples of these intangible harms cited in the opinion include reputational harms suffered for common law torts, like libel and slander, that are difficult to measure, as well as other intangible public harms, such as voters’ inability to access public information.

After reiterating that a plaintiff seeking relief for a statutory violation must prove a harm that is both particularized and concrete and my not simply rely on a procedural violation of the statute, the Court did not go on to evaluate whether Robins himself had demonstrated a concrete injury flowing from the Fair Credit Reporting Act violations alleged in the case before the Court.  Instead, the Court remanded the case to the Ninth Circuit Court of Appeals to perform that analysis, making clear that “[w]e take no position as to whether the NinthCircuit’s ultimate conclusion—that Robins adequately alleged an injury in fact—was correct.”

My own early take on the decision is that while the opinion does not set definitive rules on the types of intangible injuries that are sufficiently concrete to support Article III standing, the opinion goes a long way towards solidifying and clarifying the analytical framework under which statutory standing issues, and Article III standing issues more generally, should be evaluated.  For the time being, it will be up to the lower courts to apply this analytical framework to specific cases.

Read Full Post »

Thomson Reuters contributor Alison Frankel interviewed me for an article she posted today on the class action cases pending during the current Supreme Court term.  Here is a link to her article.  For those who are not familiar with Frankel’s On the Case Blog, be sure to add it to your regular reading list.  She is one of the best in the business.

Read Full Post »

The October 2015 United States Supreme Court Term is already well underway, and there are several cases on the docket that could have a significant impact on class action practice.  Here is a summary of the three cases this term that I think could have the biggest impact on class action practice going forward:

Campbell-Ewald Co. v. Gomez, No. 14-857

The Campbell-Ewald case addresses the tactic known as “picking-off” named plaintiffs in class actions, and deals with the question whether an offer of judgment that would provide a named plaintiff complete relief is sufficient to moot the plaintiffs’ claim, even if it is not accepted.  The case follows the Court’s 2013 decision in Genesis Healthcare v. Symczyk, where the majority opinion assumed, without deciding, that an offer of judgment had mooted the named plaintiffs’ claim in an FLSA collective action, based on a finding that the issue had been waived below.

Oral argument in Campbell-Ewald was held in October.  Justices Alito, Scalia, and Chief Justice Roberts all displayed open hostility to the plaintiffs’ position that she should be allowed to litigate the case even after the defendant had offered everything she hoped to achieve for herself in the case.  Despite these views, however, it remains to be seen whether a majority of the court will ultimately hold that any unaccepted offer of settlement is sufficient to actually moot the plaintiffs’ claim under Article III, or whether the decision will fall short of reaching that sweeping question.  Some of the questions posed by likely swing voter, Justice Kennedy, suggest that he agrees with his conservative colleagues that a litigant who has been offered full relief should not be permitted to proceed with the case, but other questions reflected a reluctance to treat an unaccepted offer the same as a judgment.  This suggests that the Court’s ultimate decision could turn on a more technical procedural analysis rather than the broader and more abstract question of whether a controversy can ever exist following an offer of full relief, but of course the questions posed during oral argument do not always signal the Court’s ultimate analysis.

When the Supreme Court originally granted cert in Campbell-Ewald, there appeared to be a split in the circuits on this question, but since then, the circuits have become aligned with the view that an unaccepted offer in a proposed class action does not moot the named plaintiffs’ claims.  A contrary ruling by the Supreme Court would revive a powerful tool that defendants could wield to effectively preempt many types of consumer class actions, especially those seeking statutory damages for small individual amounts.

Spokeo, Inc. v. Robins, No. 13-1339

Spokeo has been hailed as a case with the potential to end “no-injury” class actions.  Ostensibly at issue is whether Congress has the power to enact legislation that gives a private plaintiff the right to seek statutory damages despite the lack of any concrete injury.  A decision could therefore potentially have a significant impact on class actions brought under a variety of federal statutes that provide a private right of action to recover statutory damages upon proof of a violation, one that goes beyond the Fair Credit Reporting Act, the statute at issue in Spokeo.

However, during today’s oral argument, much of the questioning focused on whether the named plaintiff had, in fact, suffered an injury by alleging that false information had been published on his credit report, and the extent to which Congress actually intended to limit the private right of action under the Fair Credit Reporting Act to persons who could show an actual injury.  It seems likely that the outcome of the case will turn on the majority’s view of those two factors.

Tyson Foods, Inc. v. Bouaphakeo, No. 14-1146

Tyson Foods offers the Court an opportunity to further elaborate on the concept of “trial by formula”, discussed in Justice Scalia’s 2011 opinion in Wal-Mart Stores, Inc. v. Dukes, as well as the standards governing expert testimony at the class certification phase, which the Court touched upon but did not  ultimately address directly in both Wal-Mart and again in the 2013 decision in Comcast Corp. v. Behrend.  It also raises the question whether it is ever proper to certify a damages class that includes individual plaintiffs that undisputedly lack any injury or damages.

Specifically, the Court granted certiorari on the following two 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; and

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.

Oral argument in Tyson Foods is set for next Monday, November 10.

Read Full Post »

My article for the University of Denver Law Review’s Online Edition entitled Statutory Penalties and Class Actions: Social Justice or Legalized Extortion?  was posted today.  The article discusses potential reforms to address the problem of class actions for statutory penalties giving rise to potentially annihilating liability in cases involving little or no actual harm.  Please check it out.  While you’re there, check out some of the other excellent content on a wide variety of legal topics that the DU Law Review has to offer in its online supplement to its regular print publication.

Read Full Post »

Class Action Watch executive director Lawrence W. Schonbrun has an opinion piece in yesterday’s Huffington Post entitled The Class Action Mess in a Nutshell.  In the article, he questions whether the same “weapons of mass destruction” label that Warren Buffet gave to financial derivatives should apply equally to class action lawsuits.  As an example, he offers a recent lawsuit against a mortgage lender that had to settle a lawsuit for millions rather than face billions in potential liability for statutory penalties under the Fair Credit Reporting Act (FCRA).  The allegation against the company had been that it had sent out a mass solicitation that failed to give a sufficiently “conspicuous” statutorily-required notice about a consumer’s right to prevent certain uses of his or her credit information. 

As noted in this February 14 CAB entry, class actions seeking statutory penalties under FCRA and similar statutes have been a controversial issue over the past few years.  Some say that it is unfair to subject a company (and, by implication its employees and shareholders) to potentially “annihilating” liability for acts that have caused no material injury to the vast majoirty of a class of consumers.  Others say that if class actions are to be prohibited in cases seeking penalties under these statutes, it is up to Congress to say so.

I will leave it up to the reader to decide whether these types of class actions portend an economic nuclear holocaust.

Read Full Post »