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From a practitioner’s standpoint, one of my five least-favorite recent developments in federal class-action practice is the explosion in the number of premature motions for class certification that would-be class representatives file.

I understand the motivation behind these motions—often filed along with the initial complaint. Of course, they are not seriously intended to induce a ruling on class certification; to the contrary, they expressly request that the issue be tabled until the completion of discovery. The real reason that plaintiffs’ counsel file these motions is that they want to preclude the defendant from mooting the putative class action by making…
Continue Reading Judges Irked At Placeholder Class-Certification Motions Too

Before the Supreme Court’s decision last Term in Genesis Healthcare Corp. v. Symczyk, 133 S. Ct. 1523 (2013), the Ninth Circuit had held that a named plaintiff can continue to pursue a putative class action even after the defendant has extended that plaintiff an offer of judgment for the full individual relief sought in the complaint, including reasonable attorneys’ fees and costs. See Pitts v. Terrible Herbst, Inc., 653 F.3d 1081 (9th Cir. 2011). In a case that bears watching, a federal district judge in California recently certified for interlocutory review the question whether Pitts’s mootness holding remains good law. See Chen v. Allstate Ins. Co., No. 4:13-cv-00685-PJH (N.D. Cal. July 31, 2013).
Continue Reading Will the Ninth Circuit Revisit the Issue of Whether an Offer of Judgment to the Named Plaintiff Can Moot a Class Action?

Under the American Pipe rule, in federal court the filing of a class action tolls the statute of limitations for would-be class members. Otherwise, the Supreme Court reasoned in American Pipe, putative class members would have to intervene or file their own individual actions during the pendency of the class action in case class certification is denied to avoid having their claims become time-barred.

But does the American Pipe rule also apply to statutes of repose, which create an absolute right to be free from liability after a certain time frame? District courts had reached conflicting decisions on…
Continue Reading Class Action Filing Doesn’t Toll Statute of Repose for Securities Claims, Says Second Circuit

The Supreme Court’s decision today in American Express Co. v. Italian Colors Restaurant (pdf), No. 12-133, eliminated the last significant obstacle to adoption of fair, efficient arbitration systems that increase access to justice for consumers while reducing transaction costs for everyone, particularly the huge legal fees of both plaintiffs’ lawyers and defense lawyers.

In AT&T Mobility LLC v. Concepcion, 131 S. Ct. 1740 (2011), the Supreme Court held that the Federal Arbitration Act (FAA) prohibits courts from refusing to enforce arbitration agreements on the ground that they do not provide for class actions. Today’s ruling in American Express makes clear that Concepcion’s determination applies to claims under federal law as well. Mayer Brown represented AT&T Mobility in Concepcion and filed an amicus brief (pdf) for the Chamber of Commerce of the United States of America and Business Roundtable in American Express.

American Express has significant implications both for courts’ consideration of attempts to invalidate arbitration agreements and for the policy debate over the enforceability of those agreements. We discuss both, after explaining the grounds for the Supreme Court’s ruling.Continue Reading Supreme Court Rejects Challenge to Arbitration Agreements

Here’s a common scenario:  After unsuccessfully moving for class certification and having a petition for review under Federal Rule of Civil Procedure 23(f) rebuffed, the plaintiff wants to take another shot at an appeal.  Can the plaintiff simply settle his individual claims—subject to his right to appeal the denial of class certification—so that he has a dismissal giving him an automatic right to an immediate appeal?

If you’re in the Third, Seventh, Eighth, or Ninth Circuit, the answer is no. Each of these courts have held that they lack jurisdiction over the appeal of a would-be class representative following such…
Continue Reading Eighth Circuit Holds that a Plaintiff who Settles Individual Claims Lacks Standing to Challenge Denial of Class Certification

Today, the Supreme Court issued its long-awaited decision in Kiobel v. Royal Dutch Petroleum (pdf) on the scope of the Alien Tort Statute (“ATS”), 28 U.S.C. § 1350, a law that creates federal jurisdiction for civil actions brought by aliens for torts committed in violation of the law of nations or a U.S. treaty. In Kiobel, the Court held that presumption against applying federal statutes extraterritorially applies to the ATS, and affirmed the dismissal of an ATS complaint alleging violations of international law in Nigeria. Kiobel thus is a very welcome development for businesses that have been targeted by lawsuits under the ATS, an increasingly common vehicle for unjustified class actions in recent years.

See additional discussion below the fold.
Continue Reading Supreme Court Holds That Alien Tort Statute Doesn’t Apply Extraterritorially

The Fair Labor Standards Act of 1938 (“FLSA”) permits an employee to file a “collective action” for damages against an employer individually and on behalf of other “similarly situated” employees who later choose to join the lawsuit. 29 U.S.C. § 216(b). In Genesis Healthcare Corp. v. Symczyk, before any other employee had opted to join the suit, the defendant made an offer of judgment to the named plaintiff for the full relief sought by her individual claims. Today, the Supreme Court held—by a 5-4 vote—that the district court had properly dismissed the FLSA collective action for lack of…
Continue Reading Supreme Court Holds that Plaintiff Whose Individual Claims Were Mooted by an Offer of Judgment Lacks Standing to Maintain FLSA Collective Action

A new paper by Fordham law professor Howard Erichson, entitled “The Problem with Settlement Class Actions”—and a blog post about it by Andrew Trask—caught my eye.

The paper uses two recent class settlements, In re AIG and Sullivan v. DB Investments, Inc., as the springboard to discuss settlement class actions. Erichson argues that the problem with class settlements isn’t that the would-be class counsel will collude with defendants to reach a deal that sells out the rights of absent class members. Instead, he says that plaintiffs’ lawyers simply lack sufficient leverage to negotiate a fair deal because…
Continue Reading Is There A Problem With Settlement Class Actions?

Here’s the situation: You’re facing a class action in federal court in which the plaintiffs define the putative class so broadly as to encompass many people who weren’t injured by the alleged wrongdoing. For example, consider a false-advertising class action on behalf of “all purchasers” of a product that the vast majority of purchasers would have used without any problem whatsoever, meaning that the alleged rarely occurring (or entirely hypothetical) defect that the defendant failed to disclose makes no difference to them. What’s the best way to attack this weakness in the complaint?

One option would be to characterize the…
Continue Reading Do the Plaintiffs Lack Standing or Are Their Claims Simply Meritless—or Both?

Since Concepcion, the plaintiffs’ bar has been exhorting courts to recognize exceptions to its holding that courts may not refuse to enforce an arbitration agreement on the ground that it precludes class actions.  In the employment context, the plaintiffs’ bar thought that it had a winner with Chen-Oster v. Goldman Sachs,  in which a magistrate judge concluded (and a district court agreed) that Title VII bars enforcement of such agreements when the named plaintiff seeks to rely on “pattern-or-practice” evidence of discrimination.  Last week, however, the Second Circuit reversed Chen-Oster and closed the loophole in Parisi v. Goldman, …
Continue Reading Second Circuit Reverses Denial Of Individual Arbitration In Title VII Class Action