Justia U.S. Supreme Court Opinion Summaries

Articles Posted in Class Action
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Plaintiffs brought class action claims against Google, claiming violations of the Stored Communications Act; they alleged that when an Internet user conducted a Google search and clicked on a hyperlink listed on the search results, Google transmitted information (referrer header) including the terms of the search to the server that hosted the selected webpage. The Act prohibits “a person or entity providing an electronic communication service to the public” from “knowingly divulg[ing] to any person or entity the contents of a communication while in electronic storage by that service” and creates a private right of action. The district court denied a motion to dismiss, citing a Ninth Circuit holding (Edwards) that an Article III injury exists whenever a statute gives an individual a statutory cause of action and the plaintiff claims that the defendant violated the statute. The parties negotiated a classwide settlement that allowed the continued transmission of referrer headers but required Google to include disclosures on three of its webpages and to pay $8.5 million. None of those funds would be distributed to absent class members; most of the money would be distributed to cy pres recipients. In a class action, cy pres refers to distributing settlement funds not amenable to individual claims or meaningful pro rata distribution to nonprofit organizations whose work indirectly benefits class members. The balance would be used for administrative costs, given to the named plaintiffs, and awarded as attorney’s fees. In the meantime, the Supreme Court (Spokeo) held that “Article III standing requires a concrete injury even in the context of a statutory violation,” rejecting the "Edwards" premise. The Ninth Circuit affirmed approval of the settlement without addressing Spokeo. The Supreme Court vacated. Although the Court granted certiorari to decide whether a class action settlement that provides a cy pres award but no direct relief to class members is “fair, reasonable, and adequate,” Fed. Rule Civ. Proc. 23(e)(2), the Court concluded that there is a substantial open question about whether any named plaintiff had standing. A court cannot approve a proposed class settlement if it lacks jurisdiction over the dispute, and federal courts lack jurisdiction if no named plaintiff has standing. When the district court ruled on the motion to dismiss, it relied on precedent that was subsequently abrogated in Spokeo. View "Frank v. Gaos" on Justia Law

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Lambert filed a class action, alleging that Nutraceutical’s marketing of a dietary supplement violated California consumer-protection law. On February 20, 2015, the district court decertified the class. Under Federal Rule of Civil Procedure 23(f), Lambert had 14 days to ask for permission to appeal the order. Instead, he moved for reconsideration more than 14 days later, on March 12. The district court denied the motion on June 24. Fourteen days later, Lambert petitioned the Ninth Circuit for permission to appeal the decertification order. The Ninth Circuit held that Rule 23(f)’s deadline should be tolled because Lambert had “acted diligently” and reversed the decertification order. A unanimous Supreme Court reversed. Rule 23(f), “a nonjurisdictional claim-processing rule,” is not subject to equitable tolling. Whether a rule precludes equitable tolling turns not on its jurisdictional character but on whether its text leaves room for such flexibility. Rule 26(b), which generally authorizes extensions of time, states that a court of appeals “may not extend the time to file . . . a petition for permission to appeal.” The Rules express a clear intent to compel rigorous enforcement of Rule 23(f)’s deadline, even where good cause for equitable tolling might otherwise exist. A timely motion for reconsideration would affect the when the 14-day limit begins to run, not the availability of tolling. View "Nutraceutical Corp. v. Lambert" on Justia Law

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Dean, an Agritech shareholder, filed a class-action complaint on February 11, 2011, alleging violations of the Securities Exchange Act of 1934, which has a two-year statute of limitations and a five-year statute of repose, 28 U.S.C. 1658(b). The accrual date for the limitation period is February 3, 2011 and for the repose period, November 12, 2009. In May 2012, the district court denied class certification; the action settled and the suit was dismissed. On October 4, 2012, Dean’s counsel filed a new, timely, complaint (Smyth), with a new set of plaintiffs. Eight shareholders sought lead-plaintiff appointment but the district court again denied class certification. The Smyth plaintiffs settled their individual claims and dismissed their suit. Resh, who did not seek lead-plaintiff status in the earlier actions, filed a class action in 2014 after the statute of limitations expired. The Supreme Court’s 1974 “American Pipe” decision established that the timely filing of a class action tolls the statute of limitations for all persons encompassed by the class complaint and that members of a class that fails to gain certification can timely intervene as individual plaintiffs in the still-pending action and applies to putative class members who, after denial of class certification, “prefer to bring an individual suit rather than intervene.” The Supreme Court reversed the Ninth Circuit and reinstated dismissal of Resh's suit. Upon denial of class certification, a putative class member may not, in lieu of promptly joining an existing suit or filing an individual action, commence a new class action after the limitations period. The “efficiency and economy of litigation” that support tolling of individual claims do not support maintenance of untimely successive class actions. View "China Agritech, Inc. v. Resh" on Justia Law

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The Southern District of California adopted a districtwide policy permitting the use of full restraints—handcuffs connected to a waist chain, with legs shackled—on most in-custody defendants produced in court for non-jury proceedings by the U.S. Marshals Service. Before the Ninth Circuit could issue a decision on a challenge to the policy, the underlying criminal cases ended. That court—viewing the case as a “functional class action” seeking “class-like relief,” held that the case was not moot and the policy was unconstitutional. A unanimous Supreme Court vacated, finding the case moot. The federal judiciary may adjudicate only “actual and concrete disputes, the resolutions of which have direct consequences on the parties involved.”. Such a dispute “must be extant at all stages of review, not merely at the time the complaint is filed.” Precedent does not support a freestanding exception to mootness outside the Rule 23 class action context. The Federal Rules of Criminal Procedure establish for criminal cases no vehicle comparable to the civil class action, and the Supreme Court has never permitted criminal defendants to band together to seek prospective relief in their individual cases on behalf of a class. The “exception to the mootness doctrine for a controversy that is capable of repetition, yet evading review” does not apply, based only the possibility that some of the parties again will be prosecuted for violating valid criminal laws. View "United States v. Sanchez-Gomez" on Justia Law

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In 2007-2008, Lehman Brothers raised capital through public securities offerings. Petitioner, the largest public pension fund in the country, purchased some of those securities. A 2008 putative class action claimed that financial firms were liable under the Securities Act of 1933, 15 U.S.C. 77k(a), for their participation as underwriters in the transactions, alleging that certain registration statements for Lehman’s offerings included material misstatements or omissions. More than three years after the relevant offerings, petitioner filed a separate complaint with the same allegations. A proposed settlement was reached in the putative class action, but petitioner opted out. The Second Circuit affirmed dismissal of the individual suit, citing the three-year bar in Section 13 of the Act. The Supreme Court affirmed. Section 13’s first sentence states a one-year limitations period; the three-year time limit is a statute of repose, not subject to equitable tolling. Its instruction that “[i]n no event” shall an action be brought more than three years after the relevant securities offering admits of no exception. The statute runs from the defendant’s last culpable act (the securities offering), not from the accrual of the claim (the plaintiff’s discovery of the defect). Tolling is permissible only where there is a particular indication that the legislature did not intend the statute to provide complete repose but instead anticipated the extension of the statutory period under certain circumstances. The timely filing of a class-action complaint does not fulfill the purposes of a statutory time limit for later-filed suits by individual class members. View "California Public Employees’ Retirement System v. ANZ Securities, Inc." on Justia Law

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Plaintiffs, most of whom are not California residents, sued BMS in California state court, alleging that the pharmaceutical company’s drug Plavix had damaged their health. BMS is incorporated in Delaware and headquartered in New York; it maintains substantial operations in New York and New Jersey. BMS engages in business activities in California and sells Plavix there, but did not develop, create a marketing strategy for, manufacture, label, package, or work on the regulatory approval for Plavix in California. The nonresident plaintiffs did not allege that they obtained Plavix from a California source, that they were injured in California, or that they were treated for their injuries in California. The California Superior Court found that it had general jurisdiction. The state supreme court found that BMS’s “wide-ranging” contacts with the state supported a finding of specific jurisdiction over the nonresident plaintiffs’ claims. The Supreme Court reversed. For general jurisdiction, the “paradigm forum” is an “individual’s domicile,” or, for corporations, “an equivalent place, one in which the corporation is fairly regarded as at home.” Specific jurisdiction requires the suit to “aris[e] out of or relat[e] to the defendant’s contacts with the forum.” The primary concern is the burden on the defendant. The California Supreme Court found specific jurisdiction without identifying any adequate link between the state and the nonresidents’ claims. It is not relevant that BMS conducted research in California on matters unrelated to Plavix. BMS’s decision to contract with a California company to distribute Plavix nationally does not provide a sufficient basis for personal jurisdiction. View "Bristol-Myers Squibb Co. v. Superior Court of California" on Justia Law

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The owners of Microsoft’s videogame console, Xbox 360, filed a putative class action alleging a design defect. The district court struck class allegations from the complaint. The Ninth Circuit denied permission to appeal that order under FRCP 23(f), which authorizes permissive interlocutory appeal of class certification orders. Instead of pursuing their individual claims, plaintiffs stipulated to a voluntary dismissal, then appealed, challenging only the interlocutory order striking their class allegations. The Ninth Circuit held it had jurisdiction to entertain the appeal under 28 U.S.C. 1291, applicable to “final decisions of the district courts,” and that the rationale for striking the class allegations was impermissible. The Supreme Court reversed. Federal courts of appeals lack jurisdiction under section 1291 to review an order denying class certification (or an order striking class allegations) after the named plaintiffs have voluntarily dismissed their claims with prejudice. Section 1291’s final-judgment rule preserves the proper balance between trial and appellate courts, minimizes the harassment and delay that would result from repeated interlocutory appeals, and promotes the efficient administration of justice. Under plaintiffs’ theory, plaintiffs alone could determine whether and when to appeal an adverse certification ruling, allowing indiscriminate appellate review of interlocutory orders. Plaintiffs in putative class actions cannot transform interlocutory orders into section 1291 final judgments simply by dismissing their claims with prejudice. Finality “is not a technical concept of temporal or physical termination.” View "Microsoft Corp. v. Baker" on Justia Law

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Spokeo operates a “people search engine,” which searches a wide spectrum of databases to gather and provide personal information about individuals to various users, including prospective employers. After Robins discovered that his Spokeo-generated profile contained inaccurate information, he filed a class-action complaint alleging that the company willfully failed to comply with the Fair Credit Reporting Act of 1970, 15 U.S.C. 1681e(b). The district court dismissed. The Ninth Circuit reversed, reasoning that Robins’ “personal interests in the handling of his credit information are individualized.” The Supreme Court vacated. A plaintiff invoking federal jurisdiction bears the burden of establishing the “irreducible constitutional minimum” of standing by demonstrating an injury in fact, fairly traceable to the defendant’s challenged conduct, likely to be redressed by a favorable judicial decision. A plaintiff must show that he suffered “an invasion of a legally protected interest” that is “concrete and particularized” and “actual or imminent, not conjectural or hypothetical.” The Ninth Circuit’ focused on particularization: the requirement that an injury “affect the plaintiff in a personal and individual way,” but an injury in fact must be both concrete and particularized. Concreteness requires an injury to actually exist; a plaintiff does not automatically satisfy the injury-in-fact requirement whenever a statute grants a right and purports to authorize a suit to vindicate it. The violation of a statutory procedural right granted can be sufficient in some circumstances to constitute injury in fact, so that a plaintiff need not allege additional harm beyond the one identified by Congress. The Court did not rule on the correctness of the Ninth Circuit’s ultimate conclusion, but stated that Robins cannot satisfy Article III by alleging a bare procedural violation. View "Spokeo, Inc. v. Robins" on Justia Law

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Tyson employees working in the kill, cut, and retrim departments of an Iowa pork processing plant are required them to wear protective gear. The exact composition of the gear depends on the tasks a worker performs on a given day. Tyson compensated some, but not all, employees for donning and doffing, and did not record the time each employee spent on those activities. Employees sued under the Fair Labor Standards Act (FLSA) and an Iowa wage law. They sought certification of their state claims as a class action under FRCP 23 and of their FLSA claims as a “collective action,” 29 U.S.C. 216. The court concluded that common questions, such as whether donning and doffing were compensable, were susceptible to classwide resolution even if not all of the workers wore the same gear. To show that they each worked more than 40 hours a week, inclusive of time spent donning and doffing, the employees primarily relied on a study performed by an industrial relations expert, Dr. Mericle. He conducted videotaped observations analyzing how long various donning and doffing activities took, averaged the time, and produced an estimate of 18 minutes a day for the cut and retrim departments and 21.25 minutes for the kill department. These estimates were added to the timesheets of each employee. The jury awarded about $2.9 million. The Eighth Circuit and Supreme Court affirmed. The most significant question common to the class is whether donning and doffing is compensable under FLSA. Because a representative sample may be the only feasible way to establish liability, it cannot be deemed improper merely because the claim was brought on behalf of a class. Each class member could have relied on the Mericle sample to establish liability had each brought an individual action. View "Tyson Foods, Inc. v. Bouaphakeo" on Justia Law

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The Navy contracted with Campbell to develop a recruiting campaign that included text messages to young adults who had “opted in” to receipt of solicitations on topics that included Navy service. Campbell’s subcontractor generated a list of cellular phone numbers for consenting 18- to 24-year-olds and transmitted the Navy’s message to more than 100,000 recipients, including Gomez, age 40, who claims that he did not "opt in" and was not in the targeted age group. Gomez filed a class action under the Telephone Consumer Protection Act (TCPA), 47 U.S.C. 227(b)(1)(A)(iii), which prohibits “using any automatic dialing system” to send text messages to cellular telephones, absent prior express consent, and seeking treble statutory damages for a willful violation. Before the deadline for a motion for class certification, Campbell proposed to settle Gomez’s individual claim and filed an FRCP 68 offer of judgment, which Gomez did not accept. The district court granted Campbell summary judgment, finding that Campbell acquired the Navy’s sovereign immunity from suit. The Ninth Circuit reversed, holding that Gomez’s case remained live but that Campbell was not entitled to derivative sovereign immunity. The Supreme Court affirmed. An unaccepted offer of judgment does not moot a case. Campbell’s settlement bid and offer of judgment, once rejected, had no continuing efficacy; the parties remained adverse. A federal contractor may be shielded from liability unless it exceeded its authority or authority was not validly conferred; the Navy authorized Campbell to send text messages only to individuals who had “opted in.” View "Campbell-Ewald v. Gomez" on Justia Law