Class Action Defense

  • May 23, 2018

Supreme Court Affirms Class Action Waivers in Employment Arbitration Agreements

Class Arbitration, Employment Class Actions, Supreme Court
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Since the Federal Arbitration Act’s (FAA) enactment in 1925, parties have sparred over the enforceability of arbitration agreements in a number of contexts. In recent years, the battle has focused on the enforceability of class or collective action waivers, pursuant to which parties agree to forgo their right to proceed on a class basis and to pursue claims in arbitration on an individual basis instead. Between 2011 and 2013, the United States Supreme Court issued several opinions enforcing class action waivers in the consumer context, but none dealt with employment arbitration agreements. On Monday, the United States Supreme Court removed any doubt that class or collective action waivers contained in employment arbitration agreements are enforceable, affirming a potential cure for the employment class action epidemic.

The argument that employment class action waivers are different from consumer class action waivers derives from Section 7 of the National Labor Relations Act (NLRA), which guarantees employees the right to engage in collective activities

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  • March 30, 2018

Campbell-Ewald in Massachusetts

Consumer Class Actions, Jurisdiction, Massachusetts Decisions
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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 (once rejected, an

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  • February 14, 2018

Federal District Courts Tackle Application of Bristol-Myers Squibb Co. v. Superior Court to Class Actions

Jurisdiction
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In June 2017, we wrote about the Supreme Court’s decision in Bristol-Myers Squibb Co. v. Superior Court, 137 S. Ct. 1773 (2017) and how it would likely affect attempts by plaintiffs to pursue multi-state or nationwide class actions.  As predicted, the case law is rapidly developing in the district courts, where, in reliance on Bristol-Myers’ holding, defendants challenge courts’ jurisdiction in cases where non-resident plaintiffs assert claims against non-resident defendants not subject to general jurisdiction.

We expect the post-Bristol-Myers landscape will continue to evolve and at some point, the various Circuit Courts of Appeals will begin weighing in.  Until then, below we provide a brief overview of recent notable district court decisions on this topic.  As this overview shows, the majority of courts have held that under Bristol-Myers, they do not have personal jurisdiction over the non-resident defendants with regard to claims brought by the non-resident plaintiffs.

Courts have taken

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  • December 07, 2017

Ascertainability & In re Nexium – The Side-Effects Continue

Antitrust Class Actions, First Circuit Decisions, US District Court - Mass, US District Court - New Hampshire
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As various contributors to this blog have noted (here, here, and here), a divided panel of the First Circuit adopted a “loose” approach to the ascertainability requirement in In re Nexium Antitrust Litigation.  Specifically, while acknowledging that “the definition of [a] class must be ‘definite,’” the majority concluded that this requirement could be satisfied by a claims process by which class members would submit affidavits to show that they were injured.  According to the majority, such a process would be sufficiently feasible and protective of the defendants’ Seventh Amendment and due process rights.  Judge Kayatta authored a vigorous dissenting opinion, noting the “limitations of using affidavits in the manner proposed by the majority.”

Recently, the District of Massachusetts relied on In re Nexium to find that a proposed class was sufficiently ascertainable under similar circumstances.  In that case, In re Asacol Antitrust Litigation, end-payor purchasers of

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  • November 14, 2017

Consumer Financial Services Arbitration: Another Perspective

Arbitration, Class Arbitration, Consumer Class Actions, Legislation
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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
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  • August 02, 2017

When you get what you pay for: the First Circuit examines the injury requirement under Massachusetts chapter 93A.

Consumer Class Actions, First Circuit Decisions
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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

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  • July 18, 2017

Romulus v. CVS Pharmacy, Inc.: Meal Periods, Ascertainability, and the Importance of Removal.

Class Certifications, Employment Class Actions, US District Court - Mass
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In Romulus v. CVS Pharmacy, Inc., five former Shift Supervisors brought a putative class action against CVS under the Massachusetts Wage Act, contending they were required to work through their unpaid breaks.  Specifically, the plaintiffs alleged that they were required to remain in the store during their breaks when they were the only managerial employees on duty, were interrupted to handle transactions when necessary, and were nonetheless not paid for their time.  In a 12-page opinion issued last week, United States District Judge Rya Zobel denied the plaintiffs’ request for class certification, finding they failed to satisfy the requirements of commonality and predominance under Rule 23.

Although CVS policy required a member of management to be present in the store at all times during operating hours, the policy also provided employees with one unpaid 30-minute meal break for each six or eight-hour shift, and instructed employees that, in the event their meal period was interrupted, they should notify their manager to

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  • July 03, 2017

Justice Thomas’ Concurring Opinion in Microsoft Corp. v. Baker: A Useful Reminder

Appeals, Jurisdiction, Supreme Court
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On June 12th, the Supreme Court issued its unsurprising decision in Microsoft Corp. v. Baker, addressing a relatively recent twist concerning the appealability of orders denying class certification.  The case resulted in unanimous agreement among the eight Justices who participated in it (Justice Gorsuch did not participate), but a five-three split among them as to whether the case should be decided on statutory grounds (supported by the majority) or constitutional grounds (supported by the minority).  In the course of the debate over the decision’s rationale, Justice Thomas penned a paragraph that serves as a useful reminder concerning the nature of putative class litigation.

Of all the Court’s class certification cases, this must have been one of the easiest to decide.  Put simply, the district court struck plaintiffs’ class allegations from the complaint, based on a class certification denial in an earlier case raising the same claims.  After plaintiffs unsuccessfully petitioned the Ninth Circuit for interlocutory review under Rule 23(f), they were left with

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  • June 26, 2017

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

Jurisdiction, Supreme Court
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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” in the

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  • April 19, 2017

A New Justice: Any Change For Class Actions?

Current Affairs, Supreme Court
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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

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