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
On May 16, 2019, the District of Massachusetts denied a lead plaintiff’s motion to amend a complaint that sought to overcome standing deficiencies of the original class representative by adding a new named plaintiff. The Court dismissed the putative class action without prejudice, holding that if a class action has only one representative, and that party does not have standing, the Court lacks jurisdiction over the case and cannot permit the lead plaintiff substitution.
In Yan v. ReWalk Robotics, Ltd., lead plaintiff Wang Yan brought a putative class action for alleged violations of the Securities Act of 1933 and the Exchange Act of 1934 in connection with the company’s 2014 initial public offering. In a class action complaint filed in 2017, Yan claimed that ReWalk concealed material information in its IPO documents concerning a failure to comply with FDA regulations and continued to make materially false statements after the IPO. In August 2018, the Court granted the
Class arbitration came back before the Supreme Court this term in Lamps Plus, Inc. v. Varela. Today, the Supreme Court issued a 5-4 decision in Lamps Plus, holding that, under the Federal Arbitration Act, “courts may not infer from an ambiguous agreement that parties have consented to arbitrate on a classwide basis.” Rather, class arbitration must be expressly authorized by contract.
The facts of Lamps Plus are straightforward. An employee had signed an arbitration agreement upon being hired to work for Lamps Plus. After a data breach, the employee sued Lamps Plus in federal court. Lamps Plus filed a motion to compel individual arbitration, and the district court granted the motion to compel but authorized arbitration on a class basis. The Ninth Circuit affirmed, reasoning that the arbitration provision was ambiguous as to class arbitration and must be construed against the employer under California’s contra proferentem rule that ambiguities in a contract must be
Every now and then a case comes along that rewards us class action nerds with an embarrassment of riches. Gammella v. P.F. Chang’s China Bistro, Inc., decided last week by the Massachusetts Supreme Judicial Court, is one such case. In it, the Court addressed a number of important class certification issues, some unique to Massachusetts law, and some that have close federal procedural analogues. And its resolution of those issues offers something to both plaintiffs and defendants.
Gammella is a wage and hour case. Plaintiff brought a claim under the Massachusetts Wage Act and the minimum fair wage law for his employer’s alleged violations of the “reporting pay” provision of Massachusetts regulations which, the Court explains, “requires employers to pay employees three hours’ wages at no less than the minimum wage if they report for a scheduled shift of three or more hours but are involuntarily dismissed before they have worked three hours.” He alleged that, on numerous occasions, he reported to work at
Having heard good things about it for years, last month I finally got around to reading Dr. Atul Gawande’s book, The Checklist Manifesto, and have begun to give some thought regarding its application to class action practice. Proposed class action settlements are currently occupying much of my time, and my usual practice when drafting the settlement agreements is to draw upon lengthy agreements I have negotiated before. However, after reading Dr. Gawande’s opus, it occurred to me that a short, simple checklist would likely be a helpful tool in considering the most commonly recurring terms of class action settlements. With the book as inspiration, I offer the following as a first, high-level attempt at a simple class settlement checklist, one which can be expanded, refined, and otherwise improved upon. Each item on the checklist is followed by a little clarification of what it entails. Taken together, the items represent the basic provisions of many class action settlements, but each case is different, and settlements of
Pierce Atwood is proud to announce the launch of its new Class Action Mediation Service. Through it, we hope to apply our decades of experience litigating and settling class actions to help parties reach resolutions that will hold up in court. Read more about the new service here.
Today, in a case that was being watched closely for its potential ramifications for class settlements, the Supreme Court opted not to address the merits of the cy pres issues that were presented to it. Frank v. Gaos involved a settlement that would have distributed millions of dollars to cy pres recipients and class counsel, but no money to class members. Objectors complained that the settlement did not comply with the requirement that class settlements be “fair, reasonable and adequate,” and the Supreme Court granted certiorari to resolve that issue. It ultimately did not.
Instead, the Supreme Court, in a per curiam decision, vacated and remanded for the lower courts to address whether the named plaintiff had Article III standing in light of Spokeo, Inc. v. Robins. After the district court rejected the argument the plaintiff lacked injury and thus standing to pursue its claim that Google violated federal law by
Supreme Court Unanimously Rejects Equitable Tolling of Rule 23(f)’s Time Limit to Petition for Interlocutory Appeal
Yesterday, the Supreme Court in Nutraceutical Corp. v. Lambert unanimously held that Rule 23(f) is not subject to equitable tolling. After the District Court for the Central District of California decertified a class of consumers who alleged that Nutraceutical’s marketing of a dietary supplement violated California consumer-protection law, plaintiff Lambert filed a motion for reconsideration, which the court subsequently denied. Fourteen days later, Lambert petitioned the Ninth Circuit Court of Appeals for permission to appeal the decertification order under Rule 23(f). Nutraceutical opposed Lambert’s petition, arguing that it was untimely because more than four months had passed since the court’s decertification order. The Court of Appeals, however, deemed the petition timely and accepted the appeal, stating that the Rule 23(f) fourteen-day deadline should be equitably tolled under the circumstances as the time limit is “non-jurisdictional, and that equitable remedies softening the deadline are therefore generally available,” and Lambert had acted diligently in moving for reconsideration and subsequently filing his petition within fourteen days after
The Supreme Court meant what it said in China Agritech, Inc. v. Resh – that is the primary lesson from the First Circuit’s January 30th decision in In re Celexa and Lexapro Marketing and Sales Practices Litigation. As my partner, Don Frederico, explained in a blog post last year, the Supreme Court observed in China Agritech that its prior ruling in American Pipe & Constr. Co. v. Utah “tolls the statute of limitations during the pendency of a putative class action, allowing unnamed class members to join the action individually or file individual claims if the class fails.” China Agritech went on to hold that “American Pipe does not permit the maintenance of a follow-on class action past expiration of the statute of limitations.” The First Circuit, in In re Celexa and Lexapro, rejected a plaintiff’s attempt to read China Agritech narrowly.