SCOTUS Set to Decide American Pipe Tolling For Subsequent Class Actions

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Last week, the Supreme Court agreed to decide whether the tolling rule of American Pipe and Construction Co. v. Utah, 414 U.S. 538 (1974), allows absent class members to bring a subsequent class action outside of a limitations period. The question is an important one to class action practice and will resolve a circuit-level split.

In American Pipe and Construction Co. v. Utah, 414 U.S. 538 (1974), and Crown, Cork & Seal Co. v. Parker, 462 U.S. 345 (1983), the Supreme Court held that the claims of absent class members are tolled by the timely filing of a defective class action. Does this mean that the only claims tolled are “the individual claims of purported class members?” Irwin v. Dep’t of Veterans Affairs, 498 U.S. 89, 96 n.3 (1990). Or may purported class members also file a separate class action outside the limitations period?

That question, according to the petition for certiorari, has divided the courts of appeals, with the First, Second, Third, Fifth, Eighth, and Eleventh Circuits declining to toll the limitations period for such follow-on class actions, and with the Sixth, Seventh, and Ninth Circuits extending the limitations period in this scenario based on American Pipe.Read more

Ninth Circuit: Class Action Waivers in Employment Contracts Violate Federal Law

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In an important ruling, Morris v. Ernst & Young, the U.S. Court of Appeals for the Ninth Circuit held that employment contracts requiring employees to arbitrate suits individually, rather than on a class or collective basis, violate employees’ right to engage in “concerted activity” under the National Labor Relations Act (NLRA). The decision is one of several in the past few months invalidating class action waivers in employment agreements.

Employees of Ernst & Young brought a class action in federal court alleging the accounting firm denied them overtime wages in violation of the Fair Labor Standards Act (FLSA) and California labor laws. In the district court, Ernst & Young successfully moved to compel individual arbitration because the employment contract required employees to arbitrate disputes in “separate proceedings,” and the action was dismissed. The Ninth Circuit, however, reversed.

Writing for himself and Judge Hurwitz, and over the dissent of Judge Ikuta, Chief Judge Thomas concluded that an employer violates § 7 and § 8 of the National Labor Relations Act by requiring employees to sign an agreement precluding them from bringing, in any forum, work-related legal claims together. The court agreed with the National Labor Relations Board that the NLRA establishes a federal right of employees to pursue work-related legal claims together in some forum—arbitration, court, or elsewhere.… Read more

For Defense Bar, Class Action and Arbitration Issues Remain Hot Topics for Supreme Court Review

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A recent post by Adam Feldman at Emprical SCOTUS entitled “Cert Filing Leaders” demonstrates that the defense bar’s interest in Supreme Court review of arbitration and class action issues has not abated, despite the passing of Justice Scalia, who often provided a fifth and decisive vote on such issues.

Feldman has reviewed cert petitions pending before the Supreme Court with an eye towards who is filing. He finds that Gibson Dunn, Sidley Austin, WilmerHale, Bancroft PLLC, Jones Day, Kellogg Huber, Latham & Watkins, and Mayer Brown “combine for 46 docket filings so far this year.” More interesting is that “[t]he most petitions from these firms so far this year are in the class action and arbitration areas,” with patent law taking third place.

At least insofar as class actions are concerned, this was a bit surprising. For one, recent efforts to secure a Supreme Court ruling which kills off class actions–think Spokeo, Inc. v. Robins or Campbell-Ewald Co. v. Gomez or Tyson Foods, Inc. v. Bouaphakeo–have largely failed (Robins, Gomez) or backfired (Bouaphakeo). For another, the Supreme Court may remain an 8-member court for a substantial portion of its October 2016 Term. Without a ninth Justice, the Court is unlikey to grant cert in cases which stand a high chance of resulting in a tie vote.… Read more