Class Action Defense: What You Need to Know in 2017

Transcription

1 Class Action Defense: What You Need to Know in 2017 September 12, 2017 Presenters Moderator: Todd Rowden, Partner, Business Litigation, Chicago Office Managing Partner, Thompson Coburn Panelists: John Amberg, Sr. VP & Deputy General Counsel, Northern Trust Corp. John Farmer, Vice President Litigation, Charter Communications David Duffy, Partner, Business Litigation, Thompson Coburn Bob Wagner, Partner, Business Litigation, Thompson Coburn 2 1

2 Congress to the Rescue: Maybe Maybe Not HR 985, the Fairness in Class Action Litigation Act What HR 985 would do: Heighten commonality standard: each proposed class member must have suffered the same type and scope of injury. Heighten ascertainability standard: a reliable mechanism must exist to identify class members and allocate monetary relief. Limit attorney fees to money actually paid to class members. Create right to appeal class certification decisions. 3 Congress to the Rescue: Maybe Maybe Not HR 985, the Fairness in Class Action Litigation Act Passed the House, 220-to-201, in March. Senate Judiciary Committee will soon hold hearings. The Committee sees the House bill as an impetuous to study whether class action reform is needed at this time. 4 2

3 No-Injury Class Actions: Endangered Species? No Article III Standing Braitberg v. Charter Communications, 836 F.3d 925 (8th Cir. 2016) (applying Spokeo Inc. v. Robins, 136 S. Ct (2016) to hold that an alleged statutory violation, which caused no concrete injury to plaintiff, did not satisfy the injury-in-fact requirement of Article III). 5 No-Injury Class Actions: Endangered Species? Failure to State Claim In re 100% Grated Parmesan Cheese Marketing and Sales Practices, 2017 WL (N.D. Ill. Aug. 24, 2017) (dismissing consumer protection attack on arguably deceptive food label because the on-package ingredient list dispelled any confusion). 6 3

4 No-Injury Class Actions: Endangered Species? Class Certification Rejected In re Aqua Dots Products Liability Litig., 654 F.3d 748 (7th Cir. 2011) (refusing to certify class because the defendant s ongoing recall campaign, instituted before the class action was filed, was the best way to resolve the dispute). 7 No-Injury Class Actions: Endangered Species? Settlement Rejected In re Subway Footlong Sandwich Marketing and Sales Practices Litig., 2017 WL (7th Cir. Aug. 25, 2017) (refusing to approve class action settlement because it provided class members no real benefit for their no-injury claim). 8 4

5 What s Your Circuit? Increased Risk of Future Identity Theft No Standing In re SuperValu, Inc., --F.3d--, 2017 WL (8th Cir. Aug. 30, 2017) (risk of future injury too attenuated, primarily because the stolen data did not include social security numbers, birth dates, etc.) 9 What s Your Circuit? No Standing Whalen v. Michaels Stores, Inc., 2017 WL (2nd Cir. 2017) (risk of future injury too attenuated, because plaintiff promptly canceled her credit card and the stolen data did not include her social security number, birth date, etc.) 10 5

6 What s Your Circuit? No Standing Beck v. McDonald, 848 F.3d 262 (4th Cir. 2017) (in data breach case against the VA concerning a stolen laptop, refusing to follow 6th, 7th and 9th Circuits, and holding that the mere theft of data cannot confer Article III standing). 11 What s Your Circuit? Standing Attias v. Carefirst, Inc., 865 F.3d 620 (D.C. Cir. 2017) (reversing dismissal for lack of Article III standing to sue for PII cyberattack, because Plaintiffs have cleared the low bar to establish their standing at the pleading stage. ). 12 6

7 What s Your Circuit? Standing Lewert v. P.F. Chang s China Bistro, 819 F.3d 963 (7th Cir. 2016) (holding that risk of identity theft is sufficient to trigger Article III standing). 13 What s Your Circuit? Standing Galaria v. Nationwide Mutual Ins. Co., 663 Fed.Apx. 384 (6th Cir. Sept. 12, 2016) (following the 7th Circuit to find Article III standing). 14 7

8 What s Your Cause of Action? Statutory Braitberg v. Charter Communications, 836 F.3d 925 (8th Cir. 2016) (violation of a mere procedural requirement created by legislature unlikely to satisfy Article III requirement in the wake of Spokeo). 15 What s Your Cause of Action? Common Law Kuhns v. Scottrade, --F.3d--, 2017 WL (8th Cir. Aug. 21, 2017) ( no-injury common law causes of action may likely survive Article III challenge; only to lose against the defendant s Rule 12(b)(6) motion to dismiss). 16 8

9 Class Action Waivers: The Very Latest Consumer Financial Protection Bureau Obama-era agency rule prohibits class action waivers in arbitration agreements entered on or after March 19, Covers only financial products and services. Finalized on July 10, 2017; repealable for 60 days. House voted to repeal, , on July 25, Senate poised to vote next week. Equifax s offer of free credit monitoring services (attached to a class action waiver) may jeopardize the Senate repeal effort. 17 Class Action Waivers: The Very Latest Employment Litigation Lewis v. Epic Systems Corp., 823 F.3d 1147 (7th Cir. 2016) (holding that NLRA invalidates class action waivers in employee contracts, notwithstanding U.S. Supreme Court precedent on FAA s support for such waivers), cert. granted, 137 S. Ct. 809 (Jan. 13, 2017). 18 9

10 Class Action Waivers: The Very Latest State law claims for public injunctive relief McGill v. Citibank, 2 Cal. 5th 945 (Cal. 2017) (holding that, pursuant to California statutory law, a class action waiver that prohibits the arbitrator from granting public injunctive relief is unenforceable). Public injunctive relief = relief that arguably accrues to general public s benefit. Public injunctive relief relief sought for specific group of plaintiffs. 19 Class Action Waivers: The Very Latest Third-party beneficiaries of class action waivers in arbitration agreements White v. Sunoco, Inc., --F.3d--, 2017 WL (3rd Cir. Sept. 5, 2017) (holding that third-party not named in customer service agreement cannot invoke class action waiver unless the plaintiff: 1) invokes a term of the customer service agreement against the third party or 2) accuses the third-party of colluding with a party identified in the customer service agreement). In re Henson, --F.3d--, 2017 WL (9th Cir. Sept. 5, 2017) (same)

11 Class Action Trials: When to Think the Unthinkable? When you are served. When you oppose class certification. See Smith v. Illinois Cent. R.R. Co., 860 N.E.2d 332 (Ill. 2006) ( The class action is a procedural device intended to advance judicial economy by trying claims together that lend themselves to collective treatment. It is not meant to alter the parties burdens of proof, right to a jury trial, or the substantive prerequisites to recovery under a given tort. ). 21 Class Action Trials: When to Think the Unthinkable? Helpful hint for class action trial: Force plaintiffs to introduce only common evidence at trial by threatening mid-trial motion to decertify

12 LEGAL DISCLAIMER The material contained herein is the work product of Thompson Coburn LLP and should not be construed to represent the opinions of the panel members or their individual employers. Nothing contained in this presentation is to be considered as rendering legal advice for specific contracts or cases and readers are responsible for obtaining such advice from their own legal counsel. This presentation is intended for educational and informational purposes only Thompson Coburn LLP. All rights reserved