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Pierce Atwood is pleased to present this class action blog with a focus on decisions of the state and federal courts within the boundaries of the First Circuit. With decades of national class action experience and offices in every First Circuit state, our goal is to serve as a primary resource for companies that face class litigation in Massachusetts, Maine, New Hampshire and Rhode Island, as well as to provide timely information about significant class action developments, strategies and trends on a national level.

Multi-State Class Actions After the Supreme Court’s Decision in Bristol-Myers Squibb Co. v. Superior Court

On June 19th, the Supreme Court issued a decision that could have important consequences for multi-state class actions.  In Bristol-Myers Squibb Co. v. Superior Court, the Court addressed the question whether a California state court could exercise personal jurisdiction over the claims of nonresident plaintiffs who had joined a group of California plaintiffs in suing Bristol-Myers Squibb (“BMS”) for alleged adverse health effects from its drug, Plavix.  As a matter of 14th Amendment due process, the Court held that the nonresidents’ claims should have been dismissed for lack of personal jurisdiction.

Initially, the nonresident plaintiffs succeeded in the state courts in arguing that the courts could exercise general jurisdiction over BMS, but the California Court of Appeal reversed itself after SCOTUS issued its 2014 decision in Daimler Ag v. Bauman (holding that a court could not assert general jurisdiction over a non-resident corporate defendant solely because it engaged “in a substantial, continuous and systematic course of business”

A New Justice: Any Change For Class Actions?

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This week, Justice Gorsuch donned his black robes and began hearing arguments alongside his new colleagues on the Supreme Court.  With his elevation to the high court, Justice Gorsuch assumes many new responsibilities.  Some, of the lighter kind, include opening the door during conferences with his colleagues and assuming oversight of the Court’s cafeteria menu.  More serious responsibilities will include weighing in on important class action cases that will undoubtedly be heard by the Court in the future.

Despite his lengthy judicial record from having served a decade on the Tenth Circuit, there are relatively few clues regarding Justice Gorsuch’s approach to class actions.  While on the court of appeals, he participated in only a few class action cases, which is not surprising given that the Tenth Circuit has not been a hotbed of class actions.  His handful of class action opinions, however, evidences not only his gift with the pen but also a restrained, textual approach to Rule 23.  These characteristics are

Proposed Changes to Rule 23: Electronic Notice and Efforts to Curb Abuses in Settlement Objection Process

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On this blog, we previously wrote about the Fairness in Class Action Litigation Act of 2017, and identified its potential to bring significant changes to class action practice. That Act was passed by the House on March 9, 2017, based on a 220-201 vote, split almost entirely along party lines, and has now advanced to the Senate for additional consideration.  Whether the Act will become law remains uncertain, and we will continue to monitor future developments. In the meantime, however, it is worthwhile to take note of the proposed changes to Rule 23 itself which are also currently under consideration.

In August 2016, the U.S. Judicial Conference’s Committee on Rules of Practice and Procedure published its proposed amendments to Rule 23. The amendments include a variety of changes concerning class settlement and notice.  This post will focus on two specific areas covered by the amendments: electronic notice to class members, and class settlement objectors. The proposals, if approved, could become effective

CAFA, PART II?

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In February 2017, Representative Goodlatte introduced the Fairness in Class Action Litigation Act of 2017. The Act, as with its 2015 predecessor, covers a lot of ground. It permits certification of damages classes only where “each proposed class member suffered the same type and scope of injury.” It precludes certain conflicts of interest between class counsel and the named plaintiff. It resolves the Circuit split on ascertainability, adopting the view of the Third and Eleventh Circuits (and perhaps the First Circuit as well, as my colleague Katherine Kayatta recently noted) that the named plaintiff has the burden to show that identifying the class members is administratively feasible. It alters or creates certain procedural and disclosure requirements, such as giving a party an interlocutory appeal as of right of the class certification decision and staying all discovery during the pendency of certain motions. And it clarifies that Rule 23(c)(4) is an administrative tool for making class actions work, not a mechanism to permit evasion of the

Ninth Circuit Widens Circuit Split on Ascertainability in Briseno v. ConAgra Foods, Inc.

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On this blog, we have previously written about the growing split among the federal circuits concerning courts’ approaches to ascertainability. The Third Circuit, in a string of cases within the last five years, adopted a test requiring that class members must be identifiable without extensive and individualized fact-finding or “mini-trials,” and a plaintiff must present evidentiary support to demonstrate that a model it proposes to satisfy Rule 23’s requirements will be effective.  The Eleventh Circuit in Karhu v. Vital Pharmaceutical, Inc. similarly found that a plaintiff must establish an administratively feasible method by which class members can be identified.

In Mullins v. Direct Digital, LLC, the Seventh Circuit rejected the Third Circuit’s approach, finding that the Third Circuit’s test was a “heightened” requirement above and beyond Rule 23’s requirements.  The Seventh Circuit adopted a more lenient approach and looks only at whether a class can be ascertained by objective criteria, not whether there’s an administratively feasible way to identify

Supreme Court Will Hear Class Action Waiver Cases

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Last week, the Supreme Court consolidated and agreed to hear three appeals of Circuit Court decisions concerning whether class action waivers contained in employment arbitration agreements infringe on employees’ rights under Section 7 of the National Labor Relations Act.  According to the schedule currently in place, briefing on these cases will commence in late February 2017.  Unless a ninth Supreme Court justice is appointed, confirmed, and seated before oral argument in this consolidated appeal, the possibility of a 4-4 decision—and resulting preservation of the status quo–looms large. 

 

Fifth Circuit Reaffirms Enforceability of Class Action Waivers in Employment Arbitration Agreements, But Their Fate Remains Unclear

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Employers commonly use arbitration agreements to minimize the expense and exposure of employment-related claims.   By mandating arbitration of employment disputes, they hope to ensure that these matters are resolved in a cost-effective and confidential manner.  Many arbitration agreements go a step further, requiring employees to pursue their claims individually, and to waive their right to proceed on a class or collective basis.   Unfortunately, the certainty employers have striven to achieve with such agreements has proven elusive in recent years, as the National Labor Relations Board (NLRB) and several courts have found that class action waivers violate employees’ rights.

Although the U.S. Supreme Court’s 2011 decision in AT&T Mobility LLC v. Concepcion upheld the enforceability of class action waivers in the consumer context, in the years since, the NLRB has repeatedly rejected the use of class action waivers in the employment context.  In In re D.R. Horton, the NLRB held that class action waivers inherently infringe on employees’

Spokeo Should Not Fall on Deaf Ears in Privacy Class Actions

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On the May morning that the Supreme Court handed down its ruling in Spokeo, Inc. v. Robins, I was among those who read the case as a bellwether. The Spokeo appeal addressed a long-festering issue about whether Congress may confer Article III standing upon a plaintiff who suffers no concrete harm (and therefore cannot otherwise invoke federal jurisdiction) by authorizing a private right of action based on a bare violation of a federal statute.  Spokeo is a Fair Credit Reporting Act (FCRA) case, but its standing issue infects many other statutory privacy cases. FCRA is part of a growing regime of statutes creating per-violation monetary penalties for consumers to pursue whenever a business strays from the particular statute’s procedural requirements. The Telephone Consumer Protection Act (TCPA), the Fair Debt Collection Practices Act (FDCPA), and the Fair and Accurate Credit Transactions Act (FACTA) are examples of the federal regime, while California’s Invasion of Privacy Act (CIPA) and Song-Beverly Act are two state

District of New Hampshire Denies Remand Under CAFA’s Local Controversy Exception

On November 30th, in Brown v. Saint-Gobain Performance Plastics Corp., United States District Judge Joseph Laplante of the District of New Hampshire denied plaintiffs’ motion to remand two related class action lawsuits based on allegations that defendants had caused a release of toxic chemicals from a manufacturing plant that contaminated nearby wells and water supplies.  One lawsuit was brought on behalf of a putative class of current owners of residential properties with private groundwater wells within two miles of the manufacturing site, and sought damages for the alleged diminished values of their properties. The other lawsuit was brought on behalf of a putative class of current and former residents of such properties, and sought to recover the costs of medical monitoring. The defendants are the company that owns the plant and the individual plant manager. They removed the case to federal court under CAFA, and plaintiffs moved to remand, citing CAFA’s local controversy exception.

The local controversy exception requires district courts to decline

First Circuit Affirms Tough Standard for Alleging Securities Fraud; Revives One Claim Against Local Drug Maker

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On November 28, 2016, the First Circuit upheld the dismissal of all but one of the class action securities fraud claims against Cambridge, MA drug company, ARIAD Pharmaceuticals, Inc., reaffirming the exacting pleading standards that enable defendants to put an early end to reflexive stock-drop lawsuits.  In doing so, the First Circuit also adopted strict requirements for asserting claims that defendants misled investors in a common stock offering.

In In re ARIAD Pharmaceuticals, Inc. Securities Litigation, shareholder plaintiffs appealed the District of Massachusetts’ dismissal of the federal securities fraud claims against ARIAD based on optimistic statements the company’s executives made about the prospects of ARIAD’s experimental leukemia drug, ponatinib, which ultimately did not fare so well in FDA trials.  The First Circuit largely affirmed the district court’s dismissal, holding that the complaint failed to raise a compelling inference that the company’s executives acted with scienter—or intent to defraud.  The appellate court did, however, revive a claim related to “one particular alleged