Supreme Court Scorecard:Not the Class Action Rout Defendants Had Hoped For

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By Perry Cooper

May 18 — As the last of the U.S. Supreme Court's four class action cases for the term has come down, plaintiffs' advocates can breathe a sigh of relief.

The cases posed “existential threats to the class action device,” and positioned the Roberts Court to continue its pattern of rulings hostile to these suits, plaintiffs' attorneys told Bloomberg BNA at the beginning of the term .

But the court's May 16 opinion in Spokeo Inc. v. Robins(see related story) stopped well short of blocking all “no-injury” suits based on statutory violations.

The court held that plaintiffs must show concrete injury to access the federal courts, but left the definition of “concrete” open to intangible and prospective harms.

The court ruled in favor of class plaintiffs in two other closely watched cases, Campbell-Ewald v. Gomez and Tyson Foods v. Bouaphakeo .

And a defense win in DIRECTV Inc. v. Imburgia is expected to have only limited effect.

The court has also denied review in several cases raising class action issues.

Although it's not unusual for certiorari petitions to be denied, court watchers have speculated that, after Justice Antonin Scalia's death, the court is losing its appetite for limiting the class device.

Here's the breakdown of the major class cases before the court this term.

To contact the reporter on this story: Perry Cooper in Washington at pcooper@bna.com

To contact the editors responsible for this story: Steven Patrick at spatrick@bna.com and Jeffrey D. Koelemay at jkoelemay@bna.com

Selected Class Cases in the 2015-2016 Supreme Court Term

Case Class Issues Presented Details
Spokeo Inc. v. Robins, 2016 BL 154899, U.S., No. 13-1339, decided 5/16/16 Website Spokeo.com challenged the plaintiff's standing to bring a class action under the Fair Credit Reporting Act in which he alleged the site posted inaccurate, but not necessarily negative, information about him. Spokeo said the plaintiff didn't suffer a concrete, real-world injury. Winner: Defendants?
Holding: The court held that the Ninth Circuit didn't properly conduct the standing analysis for “injury in fact.” It remanded for the Ninth Circuit to ensure the plaintiff's injury wasn't just “particularized” but also “concrete.”
The Rub: The court said a “bare procedural violation” wouldn't satisfy concreteness, which the defense bar considers a win. But plaintiffs' advocates consider the ruling a victory because it also acknowledged that intangible injuries and the “risk of real harm” can also satisfy concreteness.
Tyson Foods Inc. v. Bouaphakeo, 2016 BL 87179, U.S., No. 14-1146, decided 3/22/16 Tyson Foods challenged certification of a worker overtime class action. It argued that the class used improper statistical averaging to prove predominance and included non-injured workers in the class. Winner: Plaintiffs
Holding: The court said plaintiffs may use statistical evidence to prove classwide injury as long as an individual could use that same evidence to prove his or her own claim. It refused to reach the no-injury question, saying the challenge was premature because the district court hasn't yet decided how to divvy up the $5.8 million class award.
The Rub: Defense attorneys say this isn't such a big win for plaintiffs because the decision lays out a clear strategy for defendants to use to challenge plaintiffs' use of statistics in class cases.
Campbell-Ewald Co. v. Gomez, 2016 BL 14352, U.S., No. 14-857, decided 1/20/16 A marketing company challenged a plaintiff's standing to sustain a Telephone Consumer Protection Act class action after the plaintiff rejected the company's offer to pay him everything he was owed in statutory damages under the act. Winner: Plaintiffs
Holding: The court said rejecting a defendant's offer of full relief doesn't moot a plaintiff's individual or class claims.
The Rub: The court gave defendants a possible loophole by refusing to rule on whether an actual tender of relief would moot the claims. But lower courts haven't accepted the tender argument in subsequent cases.
DIRECTV Inc. v. Imburgia, 2015 BL 408512, U.S., No. 14-462, decided 12/14/15 DIRECTV argued that an arbitration clause with a class action waiver in its customer agreement was enforceable because the Federal Arbitration Act preempted application of any contrary state law. Winner: Defendants
Holding: The court said the arbitration clause was enforceable in light of its 2011 ruling in AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (2011), which overturned California's ban on class waivers.
The Rub: Many say the ruling will have a limited effect because it interprets contract language that is rarely used anymore.
Microsoft Corp. v. Baker, U.S., No. 15-457, review granted 1/15/16 Microsoft asked the court to consider the propriety of the plaintiffs' decision to voluntarily dismiss, with prejudice, their allegations that the Xbox 360 is defective, in order to guarantee their right to appeal an unfavorable certification decision. Winner: ?
Holding: ?
Reasoning: The case wasn't scheduled for oral argument this term, leading many to speculate the court pushed it off until a replacement for Scalia can be confirmed.
Wal-Mart Stores Inc. v. Braun, U.S., Nos. 14-1123, 14-1124, review denied 4/4/16 Wal-Mart challenged the use of statistical and extrapolation evidence to certify a class of workers alleging wage and hour violations, similar to the issues in Tyson Foods. Winner: Plaintiffs
Reasoning: The court denied review after it issued the Tyson Foods opinion, even though Wal-Mart argued that this case raised different state-law issues.
Wells Fargo Bank N.A. v. Gutierrez, U.S., No. 14-1230, review denied 4/4/16 Wells Fargo sought review of a judgment ordering the bank to pay a class of customers $203 million for charging improper overdraft fees, even though some class members may not have been overcharged. Winner: Plaintiffs
Reasoning: The court denied review, even though the bank raised the no-injury argument that the court side-stepped in Tyson Foods.
Procter & Gamble Co. v. Rikos, U.S., No. 15-835, review denied 3/28/16 A dietary supplement maker challenged certification of a class of consumers alleging the pills' benefits were falsely advertised. It argued that the class failed to prove ascertainability, the implied rule that class members must be readily identifiable. Winner: Plaintiffs
Reasoning: Defendants argued that the question was ripe for review because federal circuit courts are split on the proper test for ascertainability. But the court refused the hear the case, perhaps wanting to avoid a potential 4-4 split on the issue with only eight justices on the bench.
Frank v. Poertner, U.S., No. 15-765, review denied 3/21/16 An objector challenged the high dollar amount class counsel will receive in comparison to class member recovery under a class settlement over batteries falsely advertised as long-lasting. Winner: Plaintiffs
Reasoning: The court's refusal to review this class-friendly ruling could signal a reluctance to take up class action issues now that Scalia—a vocal opponent of the class device—is no longer on the bench.
Direct Digital LLC v. Mullins, U.S., No. 15-549, review denied 2/29/16 A dietary supplement maker challenged certification of a class of consumers alleging the pills were falsely advertised. It argued that the class failed to prove ascertainability, the implied rule that class members must be readily identifiable. Winner: Plaintiffs
Reasoning: Again, as with Rikos, the court may have passed on its opportunity to resolve a circuit split on ascertainability to avoid a 4-4 tie.
Dow Chem. Co. v. Indus. Polymers Inc.,  U.S., No. 14-1091, settlement announced, cert. petition withdrawn 2/26/16 Dow challenged statistical evidence plaintiffs used to prove classwide impact and damages in an antitrust suit alleging it conspired with other chemical makers to fix urethane prices. Winner: Plaintiffs
Reasoning: Dow cited “uncertainties” created by Scalia's death as its reason for settling and withdrawing its cert. petition.
The Rub: One consumer advocate called this reasoning “spin,” saying the announcement of the deal was structured to urge the Senate to replace Scalia with another class action opponent.