Government investigations and white collar litigation matters often lead to class action lawsuits by plaintiffs. The Subject to Inquiry Blog takes this opportunity to highlight the potential effects the death of the late Justice Antonin Scalia may have on class action cases before the Supreme Court.
Justice Scalia was a reliably consistent critic of federal class actions, including voting to enforce contract terms requiring arbitration, to require greater precision by plaintiffs in stating their claims, and authoring a new, tougher requirement for “commonality” under Rule 23(a)(2).
Three class action cases pending before the Supreme Court may be impacted by his absence.
In the first, Microsoft Corp. v. Baker, the court must decide whether a federal court of appeals has jurisdiction to review an order denying class certification after the named plaintiffs voluntarily dismiss their individual claims with prejudice.
In Microsoft, the plaintiffs brought a class action suit against Microsoft Corporation alleging that a defect in the Xbox 360 gaming system rendered it useless. The District Court found that because only .4 percent of the consoles contained this issue, a class action could not be certified. The parties then stipulated to a dismissal with prejudice, which was subsequently granted by the District Court. Plaintiffs then appealed the decision to the Ninth Circuit, who held that the District Court misapplied applicable law and reversed.
On January 15, 2016, the Supreme Court granted certiorari on the question of whether a Court of Appeals has jurisdiction to review an order denying class certification after the plaintiffs have dismissed their claims with prejudice. Argument has not yet been scheduled.
In the second, Spokeo v. Robins, the court must decide whether a plaintiff who suffered no concrete harm (and would therefore not have standing), can still sue based solely on the violation of a federal statute. The plaintiff alleges that an Internet search engine published inaccurate information about him in violation of the Fair Credit Reporting Act. Although not a class action, Spokeo’s outcome will likely impact the likelihood of plaintiffs’ attorneys filing similar claims on behalf of a plaintiff class in the future.
The Ninth Circuit held that the plaintiff did have standing to sue, and defendants successfully petitioned for Supreme Court review. The court heard argument on November 2, 2015.
The third, Tyson Foods v. Bouphakeo, involves the certification of a class under the Fair Labor Standards Act regarding overtime pay. In it, the Supreme Court will consider (1) whether differences among individual class members can prevent class certification when liability and damages are determined using techniques that presume all class members are identical to the average observed in a sample; and (2) whether a class action may be certified or maintained when the class contains hundreds of members who were not injured and have no legal right to any damages.
A District Court jury awarded the plaintiffs $5.8 million, and Tyson Foods appealed to the Eighth Circuit, where it lost on a two-to-one vote. Tyson Foods successfully petitioned for Supreme Court review, and argument was heard on November 10, 2015.
Justice Scalia was a leading voice in narrowing the scope of class actions, and often on critical, 5-4 decisions. His absence from the court will certainly shift the balance. Exactly how far remains to be seen.