Supreme Court Will Review Two Important Cases Regarding Scope Of Personal Jurisdiction

By Andrew J. Pincus, Archis A. Parasharami and Matt Waring on January 24, 2017 Posted in Motions Practice, U.S. Supreme Court

Every first-year law student learns that one of the first questions a defendant must ask is whether the court in which a lawsuit is filed has personal jurisdiction—that is, whether the state or federal court can exercise power over the defendant. The Due Process Clause of the Fourteenth Amendment limits the reach of that power, preventing a court from exercising jurisdiction over a defendant that has no ties to the State in which the court sits.

Applying this limitation, the U.S. Supreme Court has recognized two kinds of personal jurisdiction: general and specific. General jurisdiction permits courts to adjudicate claims against a defendant arising out of actions occurring anywhere in the world (subject, of course, to any limits specific to a particular cause of action). It requires that the defendant be considered “at home” in the forum.

Specific jurisdiction, by contrast, empowers a court to adjudicate particular claims relating to a defendant’s conduct within the forum. To be subject to specific jurisdiction, the defendant must have established contacts with the forum, and the lawsuit must arise out of those contacts.

Both of these forms of personal jurisdiction have been examined by the Supreme Court in recent years, but the lower courts remain in disarray over how to apply the Court’s precedents. Likely for that reason, the Court has recently agreed to review two cases addressing both facets of personal jurisdiction.

First, the Court granted certiorari in BNSF Railway Co. v. Tyrrell, in which (in our view) the Montana courts failed to honor Supreme Court precedent establishing limits on general jurisdiction. Second, the Court granted review in Bristol-Myers Squibb Co. v. Superior Court, in which the California courts similarly flouted the limits on specific jurisdiction by allowing out-of-state plaintiffs to sue in California for claims that have nothing to do with the state. Defendants who face class and mass actions should follow both cases closely, and both will be important barometers for whether the Court is committed to maintaining strict limits on the scope of personal jurisdiction. (We filed an amicus brief (pdf) for the U.S. Chamber of Commerce in Bristol-Myers Squibb explaining the disarray in the lower courts and why that case in particular warranted Supreme Court review.)

Supreme Court Will Review NLRB’s Anti-Arbitration D.R. Horton Rule

By Evan M. Tager, Archis A. Parasharami and Matt Waring on January 17, 2017 Posted in Arbitration, U.S. Supreme Court

As we’ve noted in this space before, one of the most persistent efforts to undermine the Supreme Court’s decision in AT&T Mobility LLC v. Concepcion—which held that the Federal Arbitration Act (FAA) generally requires enforcing arbitration agreements that waive class or collective proceedings—has been spearheaded by the National Labor Relations Board. In 2012, the Board concluded in the D.R. Horton case (pdf) that Section 7 of the National Labor Relations Act (NLRA), which protects the ability of employees to engage in “concerted activities” (for example, union organizing), supersedes the Supreme Court’s interpretation of the FAA in Concepcion and its progeny and requires that employees be allowed to bring class actions (either in court or in arbitration).

Until recently, the D.R. Horton rule had been rejected by every appellate court to consider it—the Second Circuit, Fifth Circuit, and Eighth Circuit as well as the California and Nevada Supreme Courts—not to mention numerous federal district courts. But last year, the Seventh Circuit and Ninth Circuit parted ways with this consensus, agreeing with the Board and concluding that (at least in some circumstances) agreements between employers and employees to arbitrate their disputes on an individual basis are unenforceable.

This circuit split all but guaranteed that the Supreme Court would need to step in, and sure enough, last Friday, the Court granted certiorari in three cases involving the validity of the D.R. Horton rule. (We drafted amicus briefs for the U.S. Chamber of Commerce in each case). One case, NLRB v. Murphy Oil USA, Inc., arises out of a Board decision finding that an employer had engaged in an unfair labor practice by entering into arbitration agreements with its employees, and the other two, Epic Systems Corp. v. Lewis and Ernst & Young LLP v. Morris, are private-party disputes in which employees invoked D.R. Horton to challenge their arbitration agreements.

Ninth Circuit rejects meaningful ascertainability requirement for class certification, cementing deep circuit split

By Archis A. Parasharami and Daniel Jones on January 6, 2017 Posted in Ascertainability, Class Certification, Superiority

Can you have a class action if class members can’t reliably be found? That question is at the heart of the debate over ascertainability—one that has divided the federal courts. Earlier this week, the Ninth Circuit weighed in, holding in Briseno v. ConAgra Foods, Inc. (pdf) that plaintiffs need not demonstrate “an administratively feasible way to identify class members [as] a prerequisite to class certification.”

That conclusion is disappointing.

D.C. Circuit Weighing FCC’s Controversial 2015 TCPA Declaratory Ruling

By Kevin Ranlett and Archis A. Parasharami on October 19, 2016 Posted in Class Action Trends, Motions Practice

Today, a panel of the D.C. Circuit—composed of Judges Srinivasan and Pillard and Senior Judge Edwards—heard argument in ACA International v. FCC, the consolidated appeals from the FCC’s 2015 Declaratory Ruling and Order, which greatly expanded the reach of the Telephone Consumer Protection Act (“TCPA”). (An audio recording of the argument is here, and Kevin attended the argument.) The case has been closely watched, and a number of TCPA class actions around the country have been stayed to await the D.C. Circuit’s decision. More detail is below the fold, but here are our quick impressions from the argument:

The panel asked tough questions of lawyers for both sides in an argument that went two full hours over the allotted 40 minutes.
The panel focused most of its attention on the FCC’s new—and far-reaching—definition of an automatic telephone dialing system (ATDS, or “autodialer”). All three judges expressed discomfort with the fact that the FCC’s new definition could be read to cover smartphones.
Judge Edwards repeatedly voiced criticisms of the FCC’s expansive readings of the TCPA across the board, and may be inclined to vacate large portions of the FCC’s Declaratory Ruling.
Judge Pillard seemed the most receptive to the FCC’s arguments.
Judges Srinivasan was the hardest to read, but it seems possible that he might join Judge Edwards in setting aside major portions of the FCC’s Declaratory Ruling.

Plaintiffs’ Lawyers Try to Spin Spokeo

By Andrew J. Pincus on May 18, 2016 Posted in Motions Practice, U.S. Supreme Court

A peculiar thing happened after the Supreme Court announced its decision in Spokeo, Inc. v. Robins (pdf) on Monday.

Even though the Court ruled in favor of Spokeo—vacating the Ninth Circuit’s ruling that the plaintiff had standing to sue and holding that the court of appeals had applied a legal standard too generous to plaintiffs—both sides declared victory. (Full disclosure: I argued on behalf of Spokeo in the Supreme Court.)

Spokeo tweeted:

Jay Edelson,

What’s going on?

Supreme Court Holds in Spokeo that Plaintiffs Must Show “Real” Harm to Have Standing to Sue for Statutory Damages

By Andrew J. Pincus, Archis A. Parasharami and John Nadolenco on May 16, 2016 Posted in Motions Practice, U.S. Supreme Court

The Supreme Court today issued its decision in Spokeo, Inc. v. Robins (pdf), a closely-watched case presenting the question whether Article III’s “injury-in-fact” requirement for standing to sue in federal court may be satisfied by alleging a statutory violation without any accompanying real world injury.

The Court held that a plaintiff must allege “concrete” harm—which it described as harm that is “real”—to have standing to sue, and that the existence of a private right of action under a federal statute does not automatically suffice to meet the “real” harm standard. The decision is likely to have a meaningful impact on class action litigation based on alleged statutory violations. Justice Alito authored the opinion for the Court, joined by Chief Justice Roberts and Justices Kennedy, Thomas, Breyer, and Kagan. (We and our colleagues represented Spokeo before the Supreme Court.)

The CFPB’s Proposed Anti-Arbitration Rule

By Andrew J. Pincus, Steven M. Kaplan and Archis A. Parasharami on May 12, 2016 Posted in Arbitration

The rule (pdf) just proposed by the Consumer Financial Protection Bureau to regulate arbitration agreements is not a surprise: the Bureau has said for months that it was developing such a rule.

This post examines the details of the proposal—how it would regulate arbitration, its scope, and its effective date. We also discuss the course of the rulemaking process, including potential judicial review of any final rule. In a future post, we’ll evaluate the CFPB’s purported justifications for the regulation.

The bottom line: The CFPB’s proposal is effectively a blanket ban on the use of arbitration by companies in the consumer financial services arena. It is an attempt to overrule by regulation the Supreme Court’s landmark decision five years ago in AT&T Mobility LLC v. Concepcion (in which we represented AT&T). Businesses that are concerned about the ramifications of this proposal will have 90 days from the date the proposal is published in the Federal Register to submit comments to the agency, and if a rule is adopted in the present form of the proposal, parties are certain to seek judicial review.

Fourth Circuit: Courts, Not Arbitrators, Decide If Arbitration Agreement Authorizes Class-Wide Arbitration

By Archis A. Parasharami, Kevin Ranlett and Charles E. Harris II on April 4, 2016 Posted in Arbitration

A unanimous panel of the Fourth Circuit has held Del Webb Communities, Inc. v. Carlson that the question whether an arbitration agreement authorizes class-wide arbitration is for the courts, not an arbitrator, to decide—unless the agreement clearly and unmistakably delegates that issue to the arbitrator. In so holding, the Fourth Circuit aligned itself with decisions of the Third and Sixth Circuits. As we discuss below, the decision benefits businesses that seek to enforce individual arbitration when the arbitration agreement does not expressly authorize class arbitration: If the important question of the availability of class-wide arbitration was assigned to an arbitrator, meaningful judicial review of that decision would not be available.

What does Tyson Foods, Inc. v. Bouaphakeo mean for class actions?

By Andrew J. Pincus on March 23, 2016 Posted in Class Certification, Employment, Predominance, U.S. Supreme Court

The class action plaintiffs’ bar celebrated yesterday’s Supreme Court’s decision in Tyson Foods, Inc. v. Bouaphakeo (pdf), rejecting Tyson’s challenge to class certification. One lawyer called it “a huge David v. Goliath victory.”

But when plaintiffs’ lawyers wake up this morning and focus on the details of the Court’s opinion, they are in for a serious post-celebration hangover.

The Court’s reasoning for the first time maps a clear route for defendants to use in challenging plaintiffs’ use of statistical evidence in class actions. It also provides important guidance for defendants about preserving the ability to challenge plaintiffs’ reliance on statistics.

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Supreme Court affirms certification of FLSA collective action in Tyson Foods, Inc. v. Bouaphakeo

By Tim Bishop and Chad Clamage on March 23, 2016 Posted in Class Certification, Employment, Predominance, U.S. Supreme Court

Under Federal Rule of Civil Procedure 23(b)(3), a court may certify a suit for damages as a class action when “there are questions of law or fact common to the class” that “predominate over any questions affecting only individual members.” Similar certification standards apply when a plaintiff seeks to certify a collective action under the Fair Labor Standards Act (FLSA). Yesterday, in its highly anticipated decision in Tyson Foods, Inc. v. Bouaphakeo (pdf), the Supreme Court affirmed the certification of an FLSA collective action where the evidence tying class members together was a study of a representative sample of similarly situated workers.