Issues to Watch, Uncategorized

The Supreme Court’s Upcoming Decisions Regarding Class Action Lawsuits


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A Well Fitted Suit: The Supreme Court’s Upcoming Decisions Regarding Class Action Lawsuits

Christopher Finke*

Class action lawsuits have garnered much media attention and have gathered a reputation as opportunities for greedy lawyers.  Christine Frymire, Comment, Class Actions a Thing of the Past . . . Or Are They? A Look at the Circuit Courts’ Application of Comcast v. Behrend, 48 J. Marshall L. Rev. 335, 363 (2014).  Some have gone so far as to call it “legalized blackmail.”  Id.  The Supreme Court granted certiorari to three cases, which could have strong ramifications for class action suits.  See Gomez v. Campbell-Ewald Co., 135 S. Ct. 2311 (2015); Bouaphakeo v. Tyson Foods Inc., 135 S. Ct. 2806 (2015); Robins v. Spokeo, Inc., 135 S. Ct. 323 (2014).

I.     PURPOSE AND POLICY OF CLASS ACTION SUITS

Federal Rule of Civil Procedure 23, the Rule under which class actions are now certified and defined, was enacted with the intent of encouraging the use of class action suits.  Robert H. Klonoff, The Future of Class Actions: The Decline of Class Actions, 90 Wash. U. L. Rev. 729, 730 (2013). The allowance of these type of lawsuits stimulated the pendulum swings between caution, see In re Fed. Skywalk Cases, 680 F.2d 1175 (8th Cir. 1982), and acceptance, see In re Sch. Asbestos Litig., 789 F.2d 996 (3d Cir. 1986).  Class action suits have come under fire as attorney fees may run into the millions while member payouts are trifling.  See Klonoff, supra, at 737–38.  Even with this somewhat tarnished reputation, class action lawsuits remain a useful tool for adjudicating cases that would be too small on their own to garner representation due to the prohibitively exorbitant cost of discovery.  See id. at 739.

II.     THE SUPREME COURT’S RECENT TENDENCIES

Within the last five years, the Supreme Court has attempted to limit class action litigation.  See, e.g., Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541, 2544 (2011).  The Court has held arbitration agreements as a bar to class action suits, see AT&T Mobility LLC v. Concepcion, 131 S. Ct. 1740, 1753 (2011), and has placed the burden of certification solely on the plaintiff, see Comcast Corp. v. Behrend, 133 S. Ct. 1426, 1431 n.4 (2013).  Some believe that these recent limitations, along with future decisions, will lead “class actions [to be] virtually extinct.”  Myriam Gilles, Opting Out of Liability: The Forthcoming, Near–Total Demise of the Modern Class Action, 104 Mich. L. Rev. 373, 375 (2005).  That extinction has not yet been completed, but appears to be on its way as “the overall impact of these case law trends has been to curtail . . . class treatment.”  Klonoff, supra, at 730.

III.     RECENTLY CERTIFIED QUESTIONS AND THEIR POTENTIAL IMPACT

Bouaphakeo v. Tyson Foods Inc., 765 F.3d 791 (8th Cir. 2014), cert. granted, 135 S. Ct. 2806 (2015): The questions in this case arise from a claim under the Fair Labor Standards Act and a state wage payment law.  Bouaphakeo, 765 F.3d at 794.  The class of plaintiffs allege that they were not paid overtime for compensable time off the Tyson Foods production line; time spent putting on and taking off protective clothing and equipment necessary for the employees’ line work.  Id.  Tyson argued in the lower courts that employees were compensated a base time period regardless of how much time they actually spent off the line, which could change depending on the worker’s line position.  Id.  This would mean that the class members can be distinguished from one another based on their individual assignments, preventing the “generat[ion of] common answers apt to drive the resolution of litigation.”  Id. at 797 (quoting Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541, 2551 (2011)).  Furthermore, Tyson contends that the plaintiffs rely on a statistical formula to calculate damages, rather than determining actual harm.  Id. at 798.  The Northern District of Iowa certified the class, and the Eighth Circuit affirmed, rejecting both of Tyson’s arguments.

The Supreme Court granted certiorari to consider if members of a class action suit can be ignored when the damages requested are to be based on statistical techniques that assume all members are the same, and to decide if a class can be maintained when some of the members were not actually injured. Questions Presented Report, Tyson Foods, Inc. v. Bouaphakeo, 135 S. Ct. 2806 (2015) (No. 14-1146), http://www.supremecourt.gov/qp/14-01146qp.pdf.  If the Supreme Court were to reverse, the burden on class action plaintiffs to vet “opt-in” members would significantly increase, forcing them to ensure that these members were actually harmed.

Gomez v. Campbell-Ewald Co., 768 F.3d 871 (9th Cir. 2014), cert. granted, 135 S. Ct. 2311 (2015): The case here came into being because of a simple text message, sent to Gomez, containing an advertisement asking the recipient to join the Navy.  Gomez, 768 F.3d at 873.  The defendant was a marketing consultant that worked with the Navy to solicit new recruits who had expressly opted in to receive such messages.  Id.  Considering that Gomez was age 40 when he received the message, well out of the target range of the message, he was offered a settlement of “$1503.00 per violation, plus reasonable costs.”  Id. at 874.  Gomez let the offer lapse under its own terms, and the defendant moved to dismiss the case as moot since the settlement offer comported exactly with Gomez’s request for relief.  Id.  The Central District of California granted summary judgment for other reasons.  Id.  The Ninth Circuit vacated and remanded the case, rejecting Campbell-Ewald’s arguments regarding class action mootness because of settlement offers.  Id. at 876.

Three questions were granted certiorari in this case, two of which deal with class action suits: (1) does a claim become moot when a settlement offer exactly matches the requested relief; and (2) does the timing of class certification matter in regard to the previous answer?  Questions Presented Report, Campbell-Ewald Co. v. Gomez, 135 S. Ct. 2311 (2015) (No. 14-857), http://www.supremecourt.gov/qp/14-00857qp.pdf.  In rejecting the mootness arguments, the Ninth Circuit was concerned that defendants may be willing to “pick off” named plaintiffs in order to evade class litigation.  Gomez, 768 F.3d at 875.  If the Supreme Court were to affirm the District Court decision and dismiss the case, a truly perverse incentive would engrain itself into litigation.  Companies would seek to offer settlement as quickly as possible to avoid future losses, making the mover-and-shaker class action lawsuit an old and retired monster of the past.

Robins v. Spokeo, Inc., 742 F.3d 409 (9th Cir. 2014), cert. granted, 135 S. Ct. 323 (2014): Only seven months before Gomez, the Ninth Circuit reversed and remanded this class action suit coming out of the Central District of California.  Robins, 742 F.3d at 414.  The district court rejected the plaintiff’s standing argument where the plaintiff alleged his only injury to be Spokeo’s supposed violation of a federal statute.  Id. at 410.  Spokeo argues that the statute that governs the suit does not permit litigation without actual harm, since Congress does not have the right to create standing in this situation.  Id. at 412–13.

The Supreme Court granted certiorari to consider “[w]hether Congress may confer Article III standing upon a plaintiff who suffers no concrete harm[.]” Questions Presented Report, Spokeo, Inc. v. Robins, 135 S. Ct. 323 (2014) (No. 13-1339), http://www.supremecourt.gov/qp/13-01339qp.pdf.  Robins and Bouaphakeo are closely related in that the questions presented for the two cases deal with plaintiffs who may not have actually been harmed.  See Robins, 742 F.3d at 410; Bouaphakeo, 765 F.3d at 794.  The decision in Robins, however, will (hopefully) deal more directly with the Constitutional issues surrounding class action members.

IV. CONCLUSION

The Supreme Court has already shown a propensity to limit class membership through arbitration agreements, waivers, procedural bars, and by requiring “federal courts to scrutinize class actions more zealously before certification, including weighing damage theories carefully.”  Frymire, supra, at 353 (quoting John Campbell, Unprotected Class: Five Decisions, Five Justices, And Wholesale Change To Class Action Law, 13 Wyo. L. Rev. 463, 465 (2013)).  Whether the Court continues this trajectory of limiting class action suits will be seen in the spring when it opines in Bouaphakeo, Gomez, and Robins.


Christopher Finke is a second year law student at the University of Baltimore where he is a Staff Editor for the Law Review as well as a competitor in the Cardozo-BMI Moot Court Team. He is currently interning for Judge George L. Russell III on the Federal District Court for the District of Maryland, and will be working as a summer law clerk for Silverman, Thompson, Slutkin & White LLC in 2016.

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