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Supreme Court Takes On Class Actions, Again

Over recent years the United States Supreme Court has waded deep into the waters of class certification, significantly altering the playing field for class action claims.  As the Supreme Court continues its 2015 session, it takes on issues that may continue to alter the landscape, including (i) whether settlement with a class representative can be used to effectively terminate class claims, (ii) whether a class action can proceed even though the plaintiff representative has incurred no concrete, actual damage, and (iii) the validity of statistical modeling to substantiate alleged class-wide damages claims. 

First, on October 14, the Court heard argument in Campbell-Ewald Company v. Gomez, an appeal from the Ninth Circuit.  In Campbell-Ewald, Plaintiff Gomez sued under the Telephone Consumer Protection Act after receiving unwanted text message advertisements.  Defendant Campbell-Ewald offered to settle Gomez’s claims by providing all of the relief Gomez could expect to receive, in effect attempting to “pick off” the named plaintiff before the class was certified.  Gomez rejected the offer.  The question before the Supreme Court is whether the case became moot after the offer of complete relief to the named plaintiff, or whether the status of the case as a proposed class action allows the case to proceed.  If Campbell-Ewald prevails, defendants will have a potent tool available, effectively allowing disposal of proposed class actions where the damages can be readily determined, and where the defendant is willing to pay those damages to the named plaintiffs.

On November 2, the Court will hear another case arising from the Ninth Circuit, Spokeo v. Robins.  There, Plaintiff Robins sued under the Fair Credit Reporting Act after learning that Spokeo, a data aggregation company, had posted inaccurate personal information about him.  Although the information posted was generally more favorable, e.g. –  it depicted Robins as employed when he was not, and better off financially than he really was — Robins sued nonetheless, claiming the damages defined in the statute.  The question for the Court will be whether the named plaintiff in a proposed class action has standing to sue under Article III of the United States Constitution where a statutory violation has occurred, but the plaintiff has suffered no actual, concrete harm; in other words, whether Congress may confer standing via statute even where constitutional standing is absent.  The case should resolve a split between the Second and Fourth Circuits on the one hand, which have found no standing in such circumstances, and the Sixth and Seventh Circuits on the other hand, which have gone the other way.  If Robins prevails many, similar “technical violation” class action cases are sure to follow.

Lastly, on November 10, the Court will hear Tyson Foods v. Bouaphekeo, an employment case from the Eighth Circuit alleging that food processing employees were improperly denied sufficient pay for the time they spent changing into and out of special job-required clothing.  The point in dispute is whether the proposed class can be certified where the Plaintiffs will use a statistical model – essentially a time average derived from observing a sample of the employees changing their clothes — to prove class-wide damages.  Plaintiffs contend this is a standard and accepted methodology in class actions.  The Defendant argues that some proposed class members took less time than the average, entitling them to a lesser recovery, and that some incurred no damage at all since they changed within the allotted (and paid for) amount of time.  They argue that class certification is inappropriate given this variability, and given the lack of damage for some.  The case is seen as testing the validity of statistical modeling for class certification, making it probably the most significant of the class action cases currently set to be heard by the Court this term.

Copyright © 2020, Sheppard Mullin Richter & Hampton LLP.National Law Review, Volume V, Number 300


About this Author

David S. Cannon, Sheppard Mullin, Government Contracts Attorney, High Stakes Litigation Lawyer, San Francisco,

David Cannon is a partner in the Government Contracts, Investigations & International Trade Practice Group in the firm's San Francisco office.

Mr. Cannon handles high-stakes litigation, including banking, commercial litigation and intellectual property disputes.  In banking-related matters, he has handled securities fraud claims, as well as mortgage and lender disputes stemming from the financial crisis.  This work has included large scale class actions in federal and California state courts.  With commercial disputes, he has helped...