September 20, 2020

Volume X, Number 264

September 18, 2020

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Class Action Litigation Newsletter Summer 2020: US Supreme Court

Thole et al. v. U.S. Bank N.A. et al., 140 S. Ct. 1615 (2020)

Supreme Court affirms Eight Circuit decision on Article III standing, highlighting how a plaintiff must establish a concrete injury to file suit and that an “equitable or property interest” is insufficient. 

This putative class action under the Employee Retirement Income Security Act of 1974 (ERISA) was pursued by plaintiffs James Thole and Sherry Smith, retired participants in U.S. Bank’s defined-benefit retirement plan (the Plan). The Plan guaranteed plaintiffs a fixed payment each month regardless of (1) the Plan’s value at any one moment and (2) the investment decisions that had been undertaken by the Plan’s fiduciaries. Nevertheless, plaintiffs alleged that defendants, including U.S. Bank, “violated ERISA’s duties of loyalty and prudence by poorly investing the [P]lan’s assets,” and requested repayment of $750 million to the Plan. The U.S. District Court for the District of Minnesota dismissed the case and the Eighth Circuit affirmed, finding that plaintiffs lacked standing.

In its decision, the Supreme Court affirmed the Eighth Circuit’s decision on the ground that plaintiffs lacked Article III standing. At the heart of this decision was the fact that the Plan was a defined-benefit, and not a defined-contribution, plan; the latter is typically tied to the value of an account and benefits can turn on the plan fiduciaries’ investment decisions, whereas the former is not. As such, plaintiffs were not missing any vested pension benefits.

The Court explained, “Thole and Smith have received all of their monthly benefit payments so far, and the outcome of this suit would not affect their future benefit payments. If Thole and Smith were to lose this lawsuit, they would still receive the exact same monthly benefits that they are already entitled to receive, not a penny less. If Thole and Smith were to win this lawsuit, they would still receive the exact same monthly benefits that they are already slated to receive, not a penny more. The plaintiffs therefore have no concrete stake in this lawsuit.” The absence of a “concrete stake in the lawsuit” means that plaintiffs could not satisfy the first element of Article III standing, that is, a concrete, particularized, and actual or imminent injury.

In so holding, the Court rejected plaintiffs’ various attempts to establish standing, including their analogies to trust law and a contention that they had “an equitable or property interest in” the Plan (and thus necessarily any injury to the Plan is an injury to them as Plan participants). The Court highlighted that plaintiffs could have established standing by sufficiently alleging that the mismanagement of the Plan was “so egregious that it substantially increased the risk that the [P]lan and the employer would fail and be unable to pay the participants’ future pension benefits.” But plaintiffs had not done so, providing only a “bare allegation of plan underfunding.”
 

Barr v. Am. Ass’n of Political Consultants, Inc. et al., — S. Ct. —, 2020 U.S. LEXIS 3544, 2020 WL 3633780 (2020)

Supreme Court finds 2015 government-debt exception to the Telephone Consumer Protection Act of 1991 (the TCPA) unconstitutional, but preserves general robocall restriction.

This decision involved the scope of the TCPA, often the focus of class action lawsuits. In this case, plaintiffs (the American Association of Political Consultants and three other political system organizations) filed a declaratory judgment action asserting that their First Amendment rights were violated by the TCPA’s prohibition on making robocalls to cell phones, which they believed would bolster their political outreach efforts. The District Court for the Eastern District of North Carolina determined that the robocall restriction with the government-debt exception implemented in 2015 required strict scrutiny, but that the law survived strict scrutiny because of the government’s compelling interest in collecting debt. The Fourth Circuit vacated that judgment, agreeing that the robocall restriction, with its 2015 amendment, required strict scrutiny but disagreeing that the law survived such scrutiny.

The Supreme Court agreed with the Fourth Circuit that (1) the robocall restriction was a content-based restriction, which required strict scrutiny, and (2) that the 2015 exception for debt collection could not satisfy such scrutiny, making it unconstitutional. But the Court found that the government-debt exception could be severed, leaving the general robocall restrictions in the TCPA.

©2020 Greenberg Traurig, LLP. All rights reserved. National Law Review, Volume X, Number 223

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About this Author

Robert Herrington, Greenberg Traurig Law Firm, Los Angeles, Cybersecurity Litigation Attorney
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Robert J. Herrington is an attorney in firm's Products Liability & Mass Torts Practice. He focuses his practice on defending consumer products companies in complex, multi-party litigation, including class actions, government enforcement litigation, product defect litigation and mass torts. Rob represents companies in a variety of industries, including apparel and footwear, retail, emerging technologies, consumer electronics, video game, telecommunications, advertising and publicity, online retailing, food and beverage, nutritional supplements, personal care products...

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Stephen L. Saxl Class Action Attorney Greenberg Traurig
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Stephen L. Saxl is the Co-Chair of the Class Action Litigation Group. He concentrates his practice on defending class actions and complex litigation matters in federal court and New York State courts. His class action experience includes cases in the securities, retail, telecommunications, publishing, insurance, Internet and tobacco industries. He has defended clients against statutory and common law claims including fraud, unfair trade practices, Racketeer Influenced and Corrupt Organizations (RICO), breach of contract and price-fixing.

Concentrations

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  • Complex civil litigation
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  • Antitrust
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  • Privacy litigation
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John Crisham Litigation Attorney Greenberg Traurig
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John Crisham has briefed, argued, and won complex civil litigation cases involving class actions, energy and environmental matters, commercial and business disputes, products liability and health care, and employment law. John has represented clients at virtually every state of litigation, from dispositive motions to appeals, in more than 15 different states, before 10 different federal Courts of Appeal, and in the United States Supreme Court. He served as counsel for the prevailing petitioners in Mutual Pharmaceutical Company v. Bartlett, 570 U.S. 472 (2013) and Pliva, Inc. v...

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Phillip H. Hutchinson Business Litigation Attorney Greenberg Traurig West Palm Beach, FL
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Phillip H. Hutchinson is a strategic business litigator who defends corporations in complex litigation claims in state and federal courts, including individual class actions and real estate litigation disputes. Phillip has represented clients in cases involving complex product liability disputes, automobile rollover claims, construction defects (including delay claims), insurance coverage defense, eminent domain actions, employment discrimination, non-competition agreements, and real estate disputes, including commercial leases. He has broad experience in complex case management,...

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Lisa M. Simonetti Complex Litigation Attorney Greenberg Traurig Los Angeles, CA
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Lisa M. Simonetti focuses on the defense of complex litigation, with broad experience representing clients in the financial services industry, including regional and national banks, credit card issuers, mortgage bankers, various types of loan servicers, consumer finance companies and third-party collectors. She serves as trial and appellate counsel in courts across the country and routinely counsels financial services clients on compliance with state and federal laws and regulations.

Concentrations

  • Telephone Consumer Protection Act
  • Fair Credit Reporting Act...
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