Class Action Lawsuit Defense

Class Action Lawsuit Defense

Class Action Defense News, Developments and Commentary

Concrete and Particularized Part II: What Spokeo May Mean for Class Actions

Posted in Class Actions Privacy

Supreme Court iStock_000008258486_Large_bwThis blog post is the second in a series of posts that Baker & Hostetler LLP is devoting to the significant decision Robins v. Spokeo, No. 13-1339, 537 U.S. ___ (2016) (Spokeo). Monday’s post focused on Spokeo’s effect on privacy class actions and big data. Today’s post focuses on the decision’s impact on class actions.

On May 16, 2016, the Supreme Court issued its long-awaited decision in Spokeo. In the 6-2 decision, the Supreme Court held that the Ninth Circuit’s Article III standing analysis did not consider both injury-in-fact elements – the Ninth Circuit addressed whether the injury was particularized, but did not analyze whether the injury was “concrete.”

Spokeo concerned allegations that Spokeo, Inc., an operator of a “people search engine,” gathered and disseminated inaccurate information about the plaintiff in violation of the Fair Credit Reporting Act (FCRA). 15 U.S.C. § 1681 et seq. (slip op. at 4-5). Upon learning about the inaccurate information (through means not detailed in the complaint), the plaintiff filed a class-action complaint against Spokeo. But the district court dismissed the complaint, holding that plaintiff did not properly plead an injury-in-fact as required under Article III. (slip op. at syllabus).

On appeal, the Ninth Circuit reversed on grounds that the plaintiff had alleged injury-in-fact due to his allegation that “Spokeo violated his statutory rights” and because Mr. Robins’ “personal interests in the handling of his credit information are individualized.Id.

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Supreme Court Holds That Plaintiffs Must Allege Concrete and Particularized Injury To Have Standing To Assert FCRA Claim

Posted in Class Actions Privacy

Supreme Court iStock_000008258486_Large_bwToday, the U.S. Supreme Court decided Robins v. Spokeo, Inc., which addressed the question of whether a plaintiff has satisfied Article III’s injury-in-fact standing requirement by alleging a statutory violation but no concrete injury. Our sister blog, the Data Privacy Monitor, provides initial coverage here. Stay tuned as we analyze this important ruling which could have broad-ranging implications for class actions arising under statutory causes of action.

CFPB Announces Proposed Ban to Mandatory Class Action Waivers in Arbitration Agreements

Posted in Uncategorized

Our Financial Services Blog recently posted about the Consumer Financial Protection Bureau’s (CFPB) Notice of Proposed Rulemaking on a proposed rule to prohibit covered institutions from including, in most core consumer contracts, “pre-dispute arbitration agreements” that contain class waivers.

Read the article.

Paul Karlsgodt to Chair ABA Western Regional CLE Program on Class Actions and Mass Torts

Posted in Events

On May 27, Partner Paul Karlsgodt, leader of BakerHostetler’s Class Action Defense team, will chair the third annual ABA Western Regional CLE Program on Class Actions and Mass Torts in San Francisco. The program will explore topics such as the latest trends and creative approaches to class action settlements, forum non conveniens and related issues in multi-district litigation after Air France 447, insurance issues, and how small firms are managing some of the largest class action matters.

Visit ABA’s website for more program details.

Eighth Circuit Becomes First Appellate Court to Apply Halliburton II Price Impact Analysis

Posted in Class Certification

The Eighth Circuit has become the first federal circuit court to apply the Supreme Court’s Halliburton Co. v. Erica P. John Fund, Inc., 134 S. Ct. 2398 (2014) (Halliburton II) decision. Relying on Halliburton II, the Eighth Circuit reversed the district court’s certification of a class of Best Buy shareholders in a Rule 10b-5 case. In a 2-1 opinion, the court held that the defendants had rebutted the fraud-on-the-market presumption of reliance and, as a result, class certification was improper under Civil Rule 23(b)(3) because individual questions of reliance predominated over common questions of law and fact. The case is IBEW Local 98 Pension Fund v. Best Buy Co., No. 14-3178, 2016 WL 1425807 (8th Cir. Apr. 12, 2016).

Like many Rule 10b-5 cases, Best Buy involved statements reflecting earnings per share (EPS) guidance that later proved to be too optimistic. The plaintiffs alleged the company and its executives made two sets of misleading statements regarding EPS on the same day, the first in a press release issued before the stock market opened and the second in a conference call with analysts after the market opened. Notably, the district court found that the earlier statements in the press release were nonactionable forward-looking statements, but the later statements in the conference call were potentially actionable. On appeal, the Eighth Circuit did not review the district court’s ruling on whether each set of statements was actionable. Continue Reading

When a Published Data Breach is a Covered Data Breach

Posted in Data Breach, TCPA

Can an inadvertent Internet posting of a patient’s medical information trigger insurance coverage for liability stemming from a data-breach class action? The Fourth Circuit held last week that it can, and it added to the growing body of case law construing what “publication” means in the context of whether class liability is covered by commercial insurance policies.

We’ve written before about two of the hot corners of the class action arena, data breaches and Telephone Consumer Protection Act claims, in which much of the recent litigation has turned on the extent to which a plaintiff can establish or has established standing. But recent cases, including last week’s Fourth Circuit opinion in Travelers Indem. Co. of America v. Portal Healthcare Solutions, L.L.C., —Fed. Appx.—, 2016 WL 1399517 (4th Cir. 2016), reflect the burgeoning importance of the subsidiary insurance coverage issue. Continue Reading

Sixth Circuit Decision Clarifies Timing of Removal Under the Class Action Fairness Act

Posted in Class Action Fairness Act

Partner Greg Mersol of BakerHostetler’s Employment Class Action Blog published a blog post regarding a recent Sixth Circuit decision that clarified the timing of removal under the Class Action Fairness Act.  As stated in the post, the bottom line is that the “time for CAFA removal runs from when the plaintiffs provide the defendant with allegations or evidence meeting the amount in controversy, not when the defendant might compute damages from its own records.”  Read the full blog post >>

Seventh Circuit Throws Out TransUnion’s Clickwrap Agreement and Incorporated Class Waiver

Posted in Arbitration

In recent years, and in particular since decisions like AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (2011), a powerful defense to consumer class actions has been arbitration agreements that include class waivers. The Supreme Court’s recent decision in DIRECTV, Inc. v. Imburgia, 136 S. Ct. 463 (2015) reinforces that defense, and assures that the use of arbitration agreements and class waivers will continue to be a powerful tool to use against consumer class actions.

But before Concepcion and Imburgia can apply, the consumer must be bound to an arbitration agreement—a task that is not necessarily straightforward. In Sgouros v. TransUnion Corp., — F.3d —, 2016 WL 1169411 (7th Cir. Mar. 25, 2016), the Court held that the plaintiff-consumer did not agree to arbitrate his claims when he purchased his credit score on TransUnion’s website. Continue Reading

Circuits Clash Over Ascertainability Standard

Posted in Class Certification

The Third and Seventh circuits have reached a sharp divide during the past year over the meaning of the implied “ascertainability” prerequisite to class certification. The Third Circuit affirmed a narrow version of ascertainability in Byrd v. Aaron’s Inc., 784 F.3d 154, 168 (3d Cir. 2015), but several months later the Seventh Circuit refused the defendant’s invitation to do likewise in Mullins v. Direct Digital, LLC, 795 F.3d 654, 657 (7th Cir. 2015).

Both circuits agree that before a class may be certified, it must be ascertainable. The difficulty arises in determining exactly what requirements the ascertainability prerequisite entails. The Third Circuit’s decision in Byrd attempted to provide clarification, holding that ascertainability “consists of nothing more” than two inquiries: a plaintiff must show that “(1) the class is defined with reference to objective criteria; and (2) there is a reliable and administratively feasible mechanism for determining whether putative class members fall within the class definition.”[1] Notably, identifying class members via affidavit is not considered administratively feasible by the Third Circuit, which had refused to sanction class member identification made by “no more than . . . potential class members’ say-so” in Marcus v. BMW of North America, LLC, 687 F.3d 583 (3d Cir. 2012) and Carrera v. Bayer Corp., 727 F.3d 300 (3d Cir. 2013). Continue Reading

Tyson Foods, Inc. v. Bouaphakeo: The Supreme Court Declines to Rule Out Representative Evidence in Class Actions

Posted in Employment

In Tyson Foods, Inc. v. Bouaphakeo, 577 U.S. __ (2016), the Supreme Court considered whether a case could proceed as a class action under Rule 23(b)(3) when the plaintiffs relied upon statistical, representative evidence to show both the existence of injury and damages. On Tuesday, in a 6-2 decision, the Supreme Court held that the plaintiffs could rely on statistical evidence to determine classwide liability, but did not reach the question of class-wide damages. In so doing, the Court declined to promulgate a bright-line rule about the use of representative evidence. Instead, whether representative or statistical evidence “may be used to establish classwide liability will depend on the purpose for which the sample is being introduced and the underlying cause of action.”

In Tyson Foods, a group of workers brought a proposed Rule 23(b)(3) class action against their employer for unpaid overtime in violation of Iowa state wage-and-hour law as well as a putative collective action under the FLSA. The presence of the FLSA claim alongside the state law claim substantially influenced the Court’s legal reasoning regarding statistical proof of class-wide liability. The workers claimed Tyson did not compensate them for the total time they spent “donning” and “doffing” protective and sanitary equipment at Tyson’s facility. The plaintiffs argued that Tyson violated the FLSA by not providing overtime pay to those employees whose donning and doffing time, when added to their regular hours, exceeded 40 hours in a given week. Continue Reading