By: Robert J. Tucker and Katherine R. Johnston*
Judge Kavanaugh has had very few occasions to address the procedural mechanism of Rule 23. This is not surprising given that few class-action cases end up in the D.C. Circuit. But where he has, Judge Kavanaugh’s commentary suggests that he may be mindful of the realities and difficulties class-action defendants face.
Some insight into Judge Kavanaugh’s views on class actions can be inferred from his dissenting opinion in Cohen v. United States, 650 F.3d 717 (D.C. Cir. 2011). In Cohen, the IRS had illegally collected an excise tax on long-distance phone calls. To remedy the problem, the IRS set up a “simple” refund procedure for taxpayers that would allow them to check a box on their tax returns for a standard refund amount. Id. at 719. Taxpayers who were unhappy with their refund amount under the refund rules could file a tax refund suit. Judge Kavanaugh noted that about 90 million Americans took advantage of the refund program.
A group of 10 taxpayers filed a class-action under the Administrative Procedure Act (APA) alleging the IRS-created procedure was unlawful. Id. These taxpayers were aware of the refund rules, but did not avail themselves of the refund or file a refund suit. In his dissent, Judge Kavanaugh argued that a class-action under the APA was improper for two reasons. First, because Congress created a specific procedure for judicial review in such cases (tax refund lawsuits), which provided an adequate alternative remedy that provided an “alternative congressionally specified judicial forum.” Id. at 739. Second, it was improper under the ripeness doctrine, which required plaintiffs to file refund claims with the IRS before bringing suit to challenge the 2006 refund rule.
While Judge Kavanaugh’s analysis is grounded in the APA, his commentary suggests that he took into account the practical realities of class certification, and was openly skeptical of the plaintiffs’ motivations:
The reader may wonder why plaintiffs didn’t simply file the relevant forms with the IRS to get refunds, and if dissatisfied with the amounts they received or with the IRS’s refund rules, bring individual tax refund suits. After all, each plaintiff could have raised complaints about the refund rules in such a case, and each plaintiff’s litigation would have long since concluded by now.
Judge Kavanaugh stated the answer seemed to be that plaintiffs are litigating on behalf of others, not themselves, with the “ultimate objectives [of] class certification and a court order that the U.S. Government pay billions of dollars in additional refunds to millions of as-yet-unnamed individuals who never sought refunds from the IRS or filed tax refund suits.” “Class certification,” Judge Kavanaugh concluded, “is a necessary prerequisite to the class-wide jackpot plaintiffs,” and presumably their attorneys in the form of a fees award, “are seeking here.” Id. at 737.
Judge Kavanaugh also presided over the panel in Mills v. Giant of Maryland, LLC, 508 F.3d 11 (D.C. Cir. 2007), where a proposed class brought suit against milk sellers alleging that plaintiffs consumed their product before learning of their own lactose intolerance (which caused unpleasant side effects), and that the sellers should have put warning labels on their products to inform consumers that some individuals might be intolerant of milk. Id. at 12. In a relatively straightforward opinion, Judge Kavanaugh wrote that it is widely known that milk may cause certain individuals discomfort, and that “[a] bout of gas or indigestion does not justify a race to the courthouse.” Id. And, although the opinion does not address class certification, Judge Kavanaugh wrote, “Were the rule otherwise, a variety of food manufacturers as well as stadiums, bars, restaurants, convenience stores, and hot dog stands throughout the country would be liable to millions of would-be plaintiffs every day.” Id.
These opinions are limited, so it is difficult to forecast how Judge Kavanaugh would treat class-action cases that come before him if he is elevated to the Supreme Court. Both Cohen and Mills suggest that he is sensitive to the realities that can drive class-action litigation. Finally, his dissent in Cohen at the very least suggests that he is willing to find that individual suits are superior to class actions in certain circumstances.
*Katherine R. Johnston is not yet admitted to the bar.