On Friday, the U.S. Court of Appeals for the Second Circuit, in In re Petrobras Securities, issued an important ruling rejecting a “heightened” ascertainability requirement for class certification. This decision comes as the Supreme Court is being asked to hear this same legal question in a case arising out of the Ninth Circuit. Petrobas shows that any disagreement between the circuits on this issue has grown stale, and Supreme Court review is unlikely.
In Petrobas, the Second Circuit was urged to adopt a rule “under which any proposed class must be ‘administratively feasible,’ over and above the evident requirements that a class be ‘definite’ and ‘defined by objective criteria,’ and separate from Rule 23(b)(3)’s requirements of predominance and superiority.” Slip op. at 28. The court, however, declined to adopt this requirement, because not only was it not required by Rule 23, it was incompatible with this rule. Id. at 35-40. Instead, ascertainability in the Second Circuit is less demanding, requiring only “that a class be defined using objective criteria that establish a membership with definite boundaries.” Id. at 28.
Many in the defense bar understood Second Circuit law differently. For example, the recent cert petition filed by defendants in Conagra Brands, Inc.… Read more
Leslie Brueckner of Public Justice and I just wrote an article for Law360 about a pair of cases before the U.S. Supreme Court concerning personal jurisdiction. You can find the article on Law360 and also below.
Remember personal jurisdiction, the topic that everyone slept through during law school? Guess what? Personal jurisdiction is no longer boring: in fact, it’s become the hottest new corporate defense strategy, particularly in the area of mass torts.
And it’s now before the U.S. Supreme Court, in two cases argued on April 25, 2017: Bristol Myers Squibb Company v. County of San Francisco (BMS) and BNSF Railway Co. v. Tyrrell (BNSF). Unfortunately, judging from the way things went during oral argument, the outlook for plaintiffs seems bleak.
Ever since 2014, when the U.S. Supreme Court decided Daimler A.G. v. Bauman, 134 S. Ct. 746 (2014), corporations have been raising personal jurisdiction as a threshold defense to stop injury victims from getting a hearing on the merits of their claims. And, in many cases, the courts are agreeing with them, and throwing the victims’ claims out of court.
BMS and BNSF will decide the viability of that strategy — with major implication for injury victims’ ability to seek justice in a forum of their choosing.… Read more
Congratulations to my partner and co-blogger Dave Stein on his selection by Daily Journal as “Top 40 under 40” for 2017!
To use the parlance of our times, “Bigly!”
Read all about it here and also on Daily Journal (subscription required).… Read more
We’ve been closely watching the pending U.S. Supreme Court case Bristol-Myers Squibb Co. v. Superior Court, because the personal jurisdiction question put to the Court could greatly affect where (and how) mass torts are litigated. In this case, California plaintiffs and nonresident plaintiffs are suing BMS for injuries allegedly caused by Plavix, a cardiovascular medication that the company created and marketed in the US. The Court is being asked to decide whether Bristol-Meyer Squibb’s California activities are sufficiently related to the nonresident plaintiffs‘ suits to support their invocation of specific jurisdiction in California.
A lingering question in our minds has been whether the answer to this question would also resolve questions regarding personal jurisdiction in class actions in which a single court is asked to rule on class claims of resident and non-resident plaintiffs. The (acting) Solicitor General has now filed an amicus brief in support of BMS, and his answer–No–is quite the surprise.
Here’s what the SG had to say:
The issue before the Court, as framed by Bristol-Meyers Squibb, is “whether a plaintiff’s claims arise out of or relate to a defendant’s forum activities when there is no causal link between the defendant’s forum contacts and the plaintiff’s claims—that is, where the plaintiff’s claims would be exactly the same even if the defendant had no forum contacts.”
This case does not present any question concerning whether a state court may entertain class actions, under established rules, to resolve claims arising from conduct in multiple jurisdictions.… Read more
Dave and I wrote this article for Law360, which was published today. Here it is in its entirety.
On March 8th, Law360 published an article from two class action defense lawyers who argue that the anti-class action bill currently working through Congress (known as H.R. 985) doesn’t go far enough in its quest to “stem class action litigation.” They call in particular for legislation designed to mitigate the “in terrorem effect” that they insist causes corporations to “settle truly meritless claims.”
This in terrorem boogeyman has been trotted out for decades, every time that a pretext is needed to close the courthouse doors to victims of corporate abuse. Let’s shoo away the boogeyman this time around, rather than again allowing dramatic changes to the law. There are many good reasons to do so.
For one, studies of class actions and class settlements—including by the Federal Judicial Center—do not support the intensely negative view of litigation as blackmail. “[T]he class action is more nearly a shield than a sword. It has protected companies from bankruptcy, but it appears to have rendered few companies insolvent, if any.”
The blackmail analogy has no empirical backing. Again and again, scholars have debunked the myth that class actions foster extortionate claims.… Read more
Here’s an update on the status of the Fairness in Class Action Litigation Act of 2017 (H.R. 985), which we first touched on in an earlier post. Today, the bill was voted out of the House Judiciary Committee along party lines by a 19-12 vote, without making a single change and without holding a single hearing.
Introduced just last week, the bill has already generated sweeping opposition, including from the American Bar Association and its 400,000 attorney members, as well as consumer-, environmental-, disability-, labor- and civil-rights groups. The ABA letter opposes the bill because it would cut access to courts. The civil-rights groups’ and advocates’ letter, which includes 120 signatories, contends this “poorly drafted legislation will create needless chaos in the courts without actually solving any demonstrated problem.” The disability-rights groups did not mince words, either; “H.R. 985 would be devastating to the rights of people with disabilities.” For their part, the consumer, environmental, and labor groups’ joint letter slams the bill as “sweeping, reckless legislation” and calls the House Judiciary Committee’s consideration of this monumental bill without holding a single hearing “an outrage.”
So there you have it: a House Judiciary Committee unwilling to hold even a single hearing on radical limitations on the right of the injured and helpless to band together to seek relief in court, and a public swiftly organizing to resist.… Read more
Last Wednesday, Congressman Bob Goodlatte (R-Va.), Chairman of the House Judiciary Committee, introduced the Fairness in Class Action Litigation Act of 2017 (H.R. 985), a sweeping set of proposals that would effectively kill many class actions.
The bill proposes to:
- require that “the party seeking to maintain such a class action affirmatively demonstrates that each proposed class member suffered the same type and scope of injury as the named class representative or representatives” (This poorly worded proposal was widely panned as the “Volkswagen Bailout Bill” when Rep. Goodlatte last introduced it in 2015, because it would have wiped away class actions and excused the worst corporate misconduct.)
- require a class action complaint to identify whether the named plaintiff has ever been represented by class counsel before; if yes, no class action may be certified (Don’t we want plaintiffs to be represented by experienced counsel, and why does a prior representation automatically foreclose a future class proceeding where the same attorney represents the same client?)
- restricts attorney fee awards (Courts, of course, already closely scrutinize class recoveries and attorney fee awards.)
- limit a court’s authority to certify issue classes by requiring that “the entirety of the cause of action from which the particular issues arise satisfies all the class certification prerequisites” (Because Judge Posner is wrong that it is more efficient, “in terms both of economy of judicial resources and of the expense of litigation to the parties,” to decide some issues on a class basis rather than all issues in separate trials, see Butler v.
… Read more
Does Federal Rule of Civil Procedure 23 require class representatives to demonstrate that there is an administratively feasible way of identifying absent class members, in order to obtain class certification? In a major ruling, the Ninth Circuit declined to impose such a requirement, finding it incompatible with Rule 23 and not otherwise required by due process. Briseno v. ConAgra Foods, Inc., No. 15-55727 (9th Cir. Jan. 3, 2017).
In Briseno, the district court certified a class of consumers who purchased Wesson-brand cooking oil products labeled “100% Natural.” The class representatives alleged the “100% Natural” label was false or misleading because Wesson oils are made from
bio-engineered ingredients which, according to plaintiffs, are not natural.
On appeal, defendant ConAgra sought reversal, arguing the district court should have denied class certification because plaintiffs had failed to offer an administratively feasible way to identify absent class members. According to ConAgra, the obligation to show administrative feasibility is part of a threshold “ascertainability” prerequisite to class certification. Slip op., at 7 n.4.
In a lengthy decision written by Judge Friedland, and joined by Judge W. Fletcher and Judge Christen, the Ninth Circuit refused to impose any such requirement. The Court began by noting that the issue was one of first impression in this circuit.… Read more
In re Lenovo Adware Litigation is multi-district litigation concerning Lenovo laptops which (Plaintiffs allege) were pre-installed with malicious software. A federal district court in California recently denied a motion to dismiss in part and granted class certification of California claims. 2016 WL 6277245 (N.D. Cal. Oct. 27, 2016).
We’ll refrain from commenting on the Court’s orders due to our role as class counsel, but we wanted to summarize the Court’s ruling declining to dismiss UCL and CLRA claims which were based on the alleged failure to disclose material information that was exclusively known by the defendant.
In an nutshell, the court held that, under California law, a duty to disclose may arise where the defendant has exclusive knowledge of material information, even absent any affirmative misrepresentation or safety defect. The court based its understanding of California on a recent California Court of Appeal decision in Rutledge v. Hewlett-Packard Co., 238 Cal. App. 4th 1164, 1174 (2015), as modified on denial of reh’g (Aug. 21, 2015). According to the Lenovo court, Rutledge cast new light on this question and it is controlling because there is no clear and convincing evidence suggesting the California Supreme Court would decide Rutledge differently.
… Read more
In an opinion issued today by the U.S. Court of Appeals for the D.C. Circuit, the court held that the Consumer Financial Protection Bureau is “unconstitutionally structured.” The court found that the “CFPB’s concentration of enormous executive power in a single, unaccountable, unchecked Director” violates the separation of powers and Article II, which vests in the President “the authority to supervise, direct, and remove at will subordinate officers in the Executive Branch.” The court’s opinion was written by Judge Kavanaugh and joined in full by Senior Judge Randolf, who also issued a separate concurrence. Judge Henderson concurred in part and dissented in part. In total, the panel’s opinions run 110 pages. Bring coffee and an interest in constitutional policy-making.
The practical import of this decision is minor, however, because the remedy ordered for this constitutional flaw does not affect the CFPB’s ongoing operations. “As before, the CFPB will continue to operate and perform its many critical responsibilities, albeit under the ultimate supervision and direction of the President.” So, our current or future President can fire the CFPB’s Director–or not.
This is welcome news. The petitioner had asked the court to “shut down the entire CFPB (if not invalidate the entire Dodd-Frank Act) until Congress, if it chooses, passes new legislation fixing the constitutional flaw.” But the court didn’t bite.… Read more