The court returned for its new term on Oct. 5 with three major class action cases already scheduled for oral arguments this fall. In those cases, big business is urging the U.S. Supreme Court to curb class action litigation in a series of cases that will dominate the court’s business docket in the coming months. In other business cases of interest that will be decided before the term ends in June, the nine justices will hear a challenge to government regulation of the electricity markets and decide whether U.S. civil racketeering laws can apply to a company’s actions overseas. The class action cases give the conservative-leaning court another opportunity to cut back on such litigation, as it has done in a series of rulings in recent years. The most significant of those handed victories to Wal-Mart Stores Inc. and Comcast Corp.
In all three new cases, the U.S. Chamber of Commerce and other big business groups have filed court papers backing the businesses sued by workers and consumers. Thanks to the prevalence of arbitration clauses and the expense of fighting big businesses in court over lower individual damage amounts, a class action – in many cases – is the only way consumers can pursue grievances against huge corporations. Paul Bland, executive director of the consumer advocacy group Public Justice, said all three of the new cases are seeking “fairly dramatic change to the law that will really hammer class actions.” Let’s take a look at these three cases.
In one of the cases, scheduled for oral argument Nov. 10, the court will consider Tyson Foods Inc’s appeal of a $5.8 million judgment against the company over worker pay at an Iowa meat-processing facility. There are two issues on appeal in this case: whether liability and damages can be determined using statistical techniques that presume all class members are identical to the average observed in a sample as opposed to on an individual basis that would defeat class certification; and whether a class can be certified when it contains members who were not injured.
Another case, scheduled for argument Nov. 2, involves online people-search service Spokeo Inc. It focuses on whether Plaintiffs can sue for a technical violation of federal law even when they cannot show they have been harmed economically. The key here is the existence of congressionally created standing to bring a private right of action; the Court will need to decide whether Congress has the authority to legislatively create standing that satisfies the Constitutional harm requirement or whether evidence of actual harm is required in spite of Congressionally created standing. Businesses including Facebook Inc and Google Inc joined friend-of-the-court briefs backing Spokeo’s position, saying allowing such lawsuits to go forward encourages abuse of the class action process.
The third case concerns alleged violations of a federal consumer law by advertising agency Campbell-Ewald Co. The court, which heard argument Oct. 14, will decide whether litigation ends if the named Plaintiff is offered the maximum available damages. If so, the Court must then decide if the case could continue as a class action lawsuit that would potentially benefit multiple Plaintiffs. Consumer advocates say a ruling for the company would allow Defendants to nip class action lawsuits in the bud by, essentially, paying off the named Plaintiff; class actions would then have to start over and name a new Plaintiff (who would then be paid off, and so on). What is most interesting about this question, however, is that the Defendants here argue that a mere offer of complete relief moots the controversy.
Combined, these cases have the potential to eviscerate class-action cases. The individual calculation of damages prior to certification and ability of a Defendant to simply make an offer of complete relief place a very high barrier in front of the ability to achieve class certification. More than that, removal of congressionally created standing for certain federal laws would allow corporate Defendants to violate citizens’ rights with impunity. In all cases, injured persons are far less likely to bring claims asserting their rights; these three cases have the potential to be extremely dangerous to individuals’ rights to seek redress for wrongs they suffer.
Additional source: Scotusblog.
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