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No resolution of growing rift on acceptable method for establishing ascertainability for small-dollar claims

By Jill M. Hutchison

IStock_000009666174MediumThe Supreme Court recently declined to wade into a developing circuit split on the question of just what constitutes an ascertainable class under Fed. R. Civ. P. 23(b)(3) class. In the case of many consumer products, particularly those that are consumable, like food, cosmetics, and supplements, the defendant is unlikely to have records to document individual customers’ purchases, and the consumers are unlikely to have kept receipts. In such cases, some court have permitted class members to self-identify by affidavit and have held that this identification method is acceptable to create an ascertainable class.

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What’s That Trump University Lawsuit About Anyway?

Graduation capBy Reena R. Bajowala

On Super Tuesday, the news regarding Republican Presidential Candidate Donald J. Trump was not limited to the campaign trail.  On March 1, 2016, the New York Supreme Court’s Appellate Division reinstated claims in a 2013 suit filed by Attorney General Eric T. Schneiderman alleging that Trump University (“TU”) “through various fraudulent practices,[] intentionally misled more than 5,000 students nationwide . . . into paying as much as $35,000 each to participate” in programs offered by TU.  Trump started TU in 2004 to instruct entrepreneurs on real estate investing.  The suit accuses TU of violating New York laws related to fraudulent and deceptive practices, false advertising (General Business Law §§349-350) and fraud.  People ex rel. Schneiderman v. Trump Entrepreneur Initiative LLC, No. 16093, 2016 WL 783216 (N.Y. App. Div. Mar. 1, 2016).  In 2013, Schneiderman initiated a special proceeding under New York Executive Law § 63(12), seeking damages, civil penalties and a variety of equitable relief. 

Schneiderman alleged, among other things, that “instructors played a video featuring Donald Trump telling prospective students the ‘professors . . are absolutely terrific – terrific people, terrific brains, successful, the best’ and ‘are handpicked by [Trump].’”  Id. at *2.  According to the allegations, “Trump did not handpick the instructors; indeed, only one of the live event speakers for Trump University had even ever met Donald Trump” and the instructors “had little to no experience in real estate investing, instead having prior work experience such as food service management and graphic design.”  Id.  Schneiderman also alleged that TU’s instructors “engaged in a bait-and-switch by urging students to sign up for . . . packages [] rang[ing] from $10,0000 to $35,000 that supposedly provided the only way to succeed in real estate investment.”  Id. at *3. 

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The Post-Scalia Class Action Landscape

Supreme Court 35719-0001By Alexander M. Smith

On Saturday, Justice Antonin Scalia passed away after nearly three decades on the Supreme Court.  During that time, he authored many opinions, including Wal-Mart Stores, Inc. v. Dukes, Comcast Corp. v. Behrend, and AT&T Mobility LLC v. Concepcion, that significantly affected the class action landscape.  Several other legal bloggers have also recognized Scalia’s legacy in the class action arena and have described the impact his death may have going forward:

  • At Lexology, Donald R. Frederico notes that “[n]o one has done more to shape class action law than Justice Antonin Scalia” and explains that his decisions in Dukes, Concepcion, and Behrend will leave “an imprint that is likely to long survive his passing.”  
  • In an article on Law360, Vin Gurrieri describes the effect of Scalia’s passing and notes that “a more left-leaning justice could flip the court’s internal dynamics on key issues like class actions and arbitration agreements.”
  • And in the AmLaw Litigation Daily, Scott Flaherty describes Scalia’s “indisputable mark on the class action landscape” and notes that his rulings “forced lower court judges and lawyers alike to view issues of class certification through a lens that focused on the facts.”

Another Supreme Court Rebuff To California Arbitration Rule

PillarsBy Michael A. Scodro

Issued on December 14, 2015, DirectTV v. Imburgia represents the newest in a line of Supreme Court decisions applying the Federal Arbitration Act (FAA) to enforce contractual arbitration provisions.  Here, a service agreement between DirectTV and its customers requires arbitration of any future disputes and expressly waives either party’s right to initiate arbitration on a class-wide basis, with the exception that, if the “law of your state” prohibits the waiver of class arbitration, then the arbitration provision as a whole “is unenforceable.”  Two customers sued DirectTV, seeking to proceed in court rather than arbitration on the theory that the “law of” their “state,” California, does indeed prohibit class-action waivers in arbitration.  It was this theory—requiring application of the term “law of your state” to California—that divided lower courts and attracted Supreme Court review. 

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S. Ct. to decide availability of post-dismissal review of class cert denial

GavelBy Howard S. Suskin

The U.S. Supreme Court has granted certiorari to address whether a federal court of appeals has jurisdiction under both Article III and 28 U.S.C. §1291 to review an order denying class certification after the named plaintiffs voluntarily dismiss their individual claims with prejudice.   Microsoft Corp. v. Baker, No. 15-457 (cert. granted Jan. 15, 2016).  In the proceedings below, the Ninth Circuit held that a stipulated dismissal of an individual claim is an adverse and appealable final judgment and that the plaintiffs did not lose their ability to appeal from a stipulated dismissal with prejudice of their lawsuit and from the order striking their class allegations.  A link to the Ninth Circuit’s opinion is available here.

US Supreme Court Predicting the Future For Class Actions

By Jeremy M. Creelan


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

Supreme Court 35719-0001
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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