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US Supreme Court Predicting the Future For Class Actions

By Jeremy M. Creelan

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During its next term, the Supreme Court will consider whether class action defendants can end the cases against them simply by offering complete relief to individually named plaintiffs and offering nothing to the classes those plaintiffs purport to represent.[1]

The legal issue involves the intersection of two Federal Rules of Civil Procedure, namely the effect that Rule 68—which allows defendants to serve offers of judgment on specified terms and requires plaintiffs to respond to them—has on Rule 23, which governs class actions.  Some circuit courts have held that when a Rule 68 offer of judgment offers a plaintiff all the relief available to him, he can have no further interest in litigation and his legal claims are moot.  In the class action context, at least one circuit has further held that when a defendant makes a complete offer of judgment under Rule 68 before the plaintiff has moved for class certification, the plaintiff can have no interest in representing the class.  Under this analysis, the plaintiff’s class claims are moot in addition to his or her individual claims. 

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US Supreme Court Considers Whether Mere Statutory Violation Provides Standing in Spokeo, Inc. v. Robins

By Jeremy M. Creelan

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On November 2, the U.S. Supreme Court will hear oral argument in Spokeo, Inc. v. Robins, No. 13-1339, which could have far-reaching implications for consumer-related class actions. 

The plaintiff, Thomas Robins, filed a putative class action in federal district court in California alleging that Spokeo, Inc., willfully violated the Fair Credit Reporting Act (“FCRA”), 15 U.S.C. § 1681 et seq..  Robins alleged that Spokeo published inaccurate information about him, and thus threatened his employment prospects. 

Among other requirements, the FCRA requires consumer credit reporting agencies to “follow reasonable procedures to assure maximum possible accuracy of” consumer reports, 15 U.S.C. § 1681e(b), and includes a private right of action for consumers to obtain actual damages for violation of these requirements.

The district court dismissed Robins’ complaint under FRCP 12(b)(1) for lack of Article III standing. The district court reasoned that he lacked standing because he had failed to allege that the statutory violations he identified had caused him any “actual or imminent harm.” 

The Ninth Circuit reversed, finding that “the violation of a statutory right is usually a sufficient injury in fact to confer standing.” The court rejected the argument that, to have standing under Article III, a plaintiff must allege actual harm instead of just the violation of a statutory right. 

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