Supreme Court Class Action Decisions Not What Defendants Had Hoped For

Plaintiffs’ advocates are breathing a sigh of relief about the Court’s recent class action cases.

One case, Spokeo Inc. v. Robins stopped well short of blocking all “no-injury” suits based on statutory violations. The high court held that plaintiffs must show concrete injury to access the federal courts, but left the definition of “concrete” open to intangible and prospective harms.

Two other closely watched cases,Campbell-Ewald v. Gomez and Tyson Foods v. Bouaphakeo similarly went plaintiffs’ way.

Finally, the defense win in DIRECTV Inc. v. Imburgia is expected to have only limited effect.

In Spokeo Inc. v. Robins,Website Spokeo.com challenged the plaintiff’s standing to bring a class action under the Fair Credit Reporting Act in which he alleging that the site posted inaccurate, but not necessarily negative, information about him. Spokeo said the plaintiff didn’t suffer a concrete, real-world injury and therefore lacked standing to sue.

The Supreme Court held that the Ninth Circuit didn’t properly conduct the standing analysis for “injury in fact” and remanded the case to the Ninth Circuit to ensure the plaintiff’s injury wasn’t just “particularized” but also “concrete.” Although this sounds favorable to defendants at first glance,the Court also said that intangible injuries and the “risk of real harm” can also satisfy concreteness. Case available at this link.

In Tyson Foods Inc. v. Bouaphakeo,Tyson Foods challenged certification of a worker overtime class action on the ground that the class used improper statistical averaging and included non-injured workers in the class. The high court, however, said plaintiffs may use statistical evidence to prove classwide injury as long as it would be proper for an individual could use that same evidence to prove his or her own claim. It refused to reach the no-injury question, saying the challenge was premature. Case available at this link.

In Campbell-Ewald Co. v. Gomez, a marketing company challenged a plaintiff’s standing to sustain a Telephone Consumer Protection Act class action after the plaintiff rejected the company’s offer to pay him everything he was owed in statutory damages under the act. The Court held that rejecting a defendant’s offer of full relief doesn’t moot a plaintiff’s individual or class claims. The Court did gave defendants a possible loophole by refusing to rule on whether an actual tender of relief would moot the claims, but even this has not yet won support from lower courts. Case available at this link.

DIRECTV Inc. v. Imburgia involved an arbitration clause with a class action waiver in its customer agreement. Not surprisingly, given the Court’s prior decisions regarding arbitration, it found the clause enforceable because the Federal Arbitration Act preempted application of any contrary state law. However, the ruling may have a limited effect because it interprets unusual contract language that is rarely used anymore. Case available at this link.

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