Class Inaction: The Roberts Court’s Continued Deck Stacking Against Class Action Litigants (Part One)
For those that follow class action law and United States Supreme Court jurisprudence on the subject, it is no secret that the current Court, headed by Justice Roberts, is no friend to class action plaintiffs, particularly consumers. In AT&T Mobility v. Concepcion, 563 U.S. 333 (2011), a 5-4 majority of the Court held that the Federal Arbitration Act of 1925 preempts state laws that prohibit contracts from precluding class-wide arbitration. Simply put, businesses can include both an arbitration clause and a waiver in their non-negotiable, pre-written contracts (known in the legal world as “adhesion contracts”) and rob consumers not only of their ability to bring claims collectively against the business, but also the ability to even bring claims against the business in a court of law, instead forcing consumers to have their claims heard by a private arbitrator (often selected by the business). The Roberts Court has also “gifted” us with decisions such as Walmart Stores, Inc. v. Dukes, 131 S. Ct. 2541 (2011) and Comcast Corp. v. Behrend, 133 S. Ct. 1426 (2013) (both 5-4 decisions), that set a higher bar for and restricting the types of evidence class action plaintiffs must demonstrate in order for cases to proceed as a class action, although the full scope and ramifications of these decisions continue to play out in the lower courts.
Given these decisions, the mere fact that three class action cases are included on the Court’s docket this term is alarming. The alarm deepens when one considers the nature of the legal issues the Court is being asked to consider in those cases. Campbell-Ewald Co. v. Gomez presents a prime example. In that case, the Court has been asked to consider the practice of “picking-off” the named plaintiffs in a lawsuit before a class is certified. In that practice, the defendant makes an offer of judgment to the named plaintiffs for the relief those plaintiffs have requested in their lawsuit, e.g., the precise amount of monetary loss they have suffered. In Genesis Healthcare Corp. v. Symczyk, 133 S. Ct. 1523 (2013), the Court previously assumed without deciding (because the plaintiffs did not properly challenge the issue) that such an offer renders the plaintiffs’ lawsuit “moot” (no point in allowing it to proceed) because the individual plaintiffs have gotten exactly the relief for which they asked and the parties are no longer in opposition, thus dispelling any “controversy” required for lawsuits to proceed under Article III of the Constitution. Now, that question is squarely before the Court.
Questions from the Court during oral argument suggest that the Court may take a “middle ground” approach to resolving the case, but one nonetheless detrimental to class action lawsuits. Justice Kennedy, always the swing vote in cases, expressed disagreement with the idea that, even after being “picked off,” a named class action plaintiff still has a sufficient interest in a defendant facing claims on a class-wide basis to allow the case to proceed. However, Justice Kennedy also expressed disagreement with the idea that an offer of judgment is sufficient to “moot” a case, as an offer is not actual payment of the plaintiff’s damages. On this point, Justice Breyer posited an extended hypothetical seemingly designed to create a “middle ground” attracting Justice Kennedy’s vote: a mere offer of judgment may not be enough to “moot” a case, but if a plaintiff refuses the offer, depositing a check for the plaintiff’s damages with the trial court may be sufficient for mootness, as the defendant would have actually paid the plaintiff’s damages at that point.
Hope remains that the Court may resolve the case on narrower, factual grounds. Justice Sotomayor, for instance, pointed out that the offer of judgment in this case did not include the plaintiff’s attorney fees, which were also relief requested by the plaintiff. Nonetheless, the apparent openness of Court members to allowing named class action plaintiffs to be “picked off” is unsettling and perhaps leaves savvy class action litigators and consumers wondering whether they might at least find safe harbor under statutes where Congress has expressly authorized individuals to bring qui tam-type actions on behalf of themselves and others for violations of those statutes. Fortunately (or unfortunately), the Court stands poised to address that question as well in Spokeo, Inc. v. Robins, discussed in the next part of this series.