The 2018-2019 term of the U.S. Supreme Court opened with a newly configured court in which Justice Kavanaugh joined as an Associate Justice following the retirement of Justice Kennedy. Since October of last year, the Court has heard 69 argued appeals, several of which arose from class action litigation. Over the past nine months, the Court has addressed issues relating to class action practice concerning arbitration provisions, federal removal statutes, consumer antitrust law, FDA preemption, and the equitable tolling of interlocutory appeals. Although presented with class action questions related to cy pres awards, data privacy litigation standing, issue class certification, securities laws, and TCPA claims, the Court declined to resolve these issues. Reflective of the Court’s decisions this term at large, rulings were unanimous or sharply divided along ideological lines, with the Court declining to hear a number of controversies. The below summary provides an overview of class action decisions by the Court this term, including recent remands and certiorari decisions.
With Massachusetts’ Consumer Data Privacy Bill Still Under Consideration, Student Data Privacy Class Action Fails In Federal Court
As we have recently reported, the Massachusetts legislature is currently considering a comprehensive data privacy law that would create a private right of action for consumers who allege a violation of any provision of the proposed law. Last week, a Massachusetts federal court dismissed a data privacy class action, concluding that the plaintiffs failed to state an actionable claim under existing law. The decision draws into sharp relief the potential impact of the proposed legislation. The case demonstrates how the data privacy bill, if enacted, could open a new avenue for individuals to sustain private actions based on alleged data privacy violations that courts have previously found do not entitle plaintiffs to relief.
The Mount Ida College Plaintiffs Alleged Data Privacy Violations but Could Not Sustain their Class Claims
In this recent and closely watched case, Squeri v. Mount Ida College, brought on behalf of a putative class of former and
Yesterday the First Circuit weighed in on a hot topic – the enforceability of arbitration provisions in online contracts. In Cullinane, several plaintiffs brought a putative class action alleging that Uber had violated Massachusetts’ consumer protection statute by assessing certain fees. Uber filed a motion to compel arbitration under its Terms of Service, which contained an arbitration provision and class action waiver. After the district court granted the motion, the First Circuit reversed, finding the arbitration provision unenforceable because Uber did not make its Terms of Service sufficiently conspicuous when its customers created a ride-sharing account. Cullinane underscores the importance of obtaining customers’ affirmative consent to an online contract.
At the outset, the First Circuit acknowledged that the Federal Arbitration Action places arbitration provisions upon the same footing as other contract provisions. It also emphasized that arbitration is a matter of contract and that a valid contract must exist in order for the arbitration provision to be enforced. The
On March 6th, in Silva v. Todisco Services, Inc., Judge Kenneth Salinger, sitting in the Business Litigation Session of the Massachusetts Superior Court, held that a defendant’s tendering of the maximum amount of damages a plaintiff might recover in a putative class action did not moot either the plaintiff’s individual claims or the claims of putative class members. In rejecting defendant’s “pick-off” attempt, Judge Salinger aligned Massachusetts state court practice with federal case law, including the United States Supreme Court’s decision in Campbell-Ewald v. Gomez, and subsequent federal decisions. His reasons for doing so, while perhaps consistent with Massachusetts precedent, were somewhat different from the federal court rationale and could have unintended consequences.
In Campbell-Ewald, the Supreme Court held that an unaccepted offer of judgment does not moot a named plaintiff’s claim, and therefore cannot prevent a putative class action from moving forward. The Court based its decision on principles of contract law
Much has been said and written about Congress’ rejection of the CFPB proposal to ban class action waivers in arbitration agreements between consumers and financial services companies. One of the most frequent statements I have heard from some politicians in the media is that Congress has voted to ban class actions against banks. As is true with many political statements from both sides of the aisle, this one is only partially true. Here are a few additional (but not alternative) facts to place Congress’ action in context.
- The CFPB rule, and not Congress’ rejection of it, would have represented a change in the law. Since the Supreme Court’s 2011 decision in AT&T Mobility v. Concepcion, class action waivers have generally been enforceable in contracts for consumer financial services. The CFPB proposed rule was based on the agency’s authority granted under the Dodd-Frank Act. However, Congress and the President had the final say regarding whether the rule would take effect, and
When you get what you pay for: the First Circuit examines the injury requirement under Massachusetts chapter 93A.
On July 26th, the First Circuit issued rulings in putative consumer class actions brought by the same attorney against two national department store chains, challenging their allegedly deceptive use of comparative pricing on their in-store price tags. In the first case, brought against Nordstrom, the court engaged in a careful review of a series of Massachusetts decisions interpreting the state’s consumer protection act, Massachusetts General Laws chapter 93A. In the second case, against Kohl’s, the court continued the analysis to fill a procedural gap left open in the first case. In the end, the court reinforced the Massachusetts cases holding that proof of an unfair or deceptive act or practice, without more, is not sufficient to support a claim under the Massachusetts statute. Rather, plaintiffs must also prove that the violation caused them harm. Because plaintiffs in these cases did not allege that products themselves were other than represented, but only that they subjectively believed that they were getting a good bargain, the court held that they failed
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
In 2014, we posted about the Massachusetts Supreme Judicial Court’s decision in Bellermann v. Fitchburg Gas & Electric Light Co. In that case, plaintiffs sought relief under the Massachusetts consumer protection statute, G.L. c. 93A, because of the defendant utility’s alleged failure properly to prepare and plan for a major winter storm, and its allegedly deceptive communications made to consumers before and during the storm. The SJC affirmed the trial court’s denial of class certification because plaintiffs could not establish that defendant’s conduct caused similar injury to consumers on a class-wide basis.
On remand, plaintiffs filed a renewed motion for class certification relying on a different liability theory – that they had suffered economic injury by overpaying for a level of emergency preparedness, required by Department of Public Utility regulations, which the defendant allegedly failed to provide. This time a different trial court judge certified two classes under this diminution-in-value theory (a business customers class and a residential customers class), but
Chief Judge Saris and Judge Sorokin of the District of Massachusetts recently tackled questions left unanswered by the Supreme Court’s opinion earlier this year in Campbell-Ewald Co. v. Gomez, 136 S. Ct. 663 (2016) (see Don Frederico’s prior post for a full discussion of Campbell-Ewald).
In South Orange Chiropractic Center, LLC v. Cayan LLC, 2016 WL 1441791, No. 15-13069 (D. Mass. April 12, 2016), the defendant, seeking to slip through the door left ajar by Campbell-Ewald, sought to deposit $7,500 with the court, providing the named plaintiff in a putative Telephone Consumer Protection Act (TCPA) class action with full relief. In addition, the defendant agreed to have judgment entered against it for allegedly sending plaintiff an unsolicited fax in violation of the TCPA, to pay for costs, to be enjoined from future conduct as to plaintiff or others, and to preserve evidence, and presented the plaintiff with a stand-alone settlement agreement,
Class action practitioners have been closely watching Spokeo, Inc. v. Robins, a case before the Supreme Court on appeal from the Ninth Circuit. Spokeo presented the Court with the opportunity to decide whether a plaintiff may maintain a class action absent any injury other than the violation of a statutory right.