The Seventh Circuit’s recent decision in Wallrich v. Samsung Electronics America, Inc. is significant news in the world of mass arbitration. In recent years, businesses have faced an increasing risk of being targeted by abusive mass arbitration campaigns that seek to leverage the arbitration fees the business must pay, win or lose, to coerce a settlement of even meritless claims. In Wallrich, Samsung was facing a mass arbitration that it contended was based on meritless claims; among other things, Samsung said, some of the claimants were not really Samsung customers at all.Continue Reading Seventh Circuit reverses order forcing Samsung to pay arbitration fees for mass arbitration
Supreme Court to decide what constitutes an autodialer under the TCPA
In a very big deal for TCPA class actions, the Supreme Court granted review today in Facebook, Inc. v. Duguid. The petition (pdf) raises the most significant issue in litigation under the Telephone Consumer Protection Act (TCPA): what kind of equipment constitutes an “automatic telephone dialing system” (ADTS) triggering the TCPA’s restrictions on calls and texts? (The other question presented by the petition—the constitutionality and severability of the exception for government debts—was decided by the Court earlier this week.)
As we have reported, there is a deep circuit split over how to read the statutory language defining
Continue Reading Supreme Court to decide what constitutes an autodialer under the TCPA
Seventh and Eleventh Circuits Reject, But Second Circuit Follows, Ninth Circuit’s Expansive Autodialer Definition in Marks
One of the most hotly-contested issues in litigation under the Telephone Consumer Protection Act (TCPA) is what equipment counts as an “automatic telephone dialing system” (ATDS) triggering the TCPA’s restrictions. In 2018, the D.C. Circuit threw out the FCC’s interpretation of the statutory definition of an ATDS—which was so broad as to encompass smartphones—as arbitrary and capricious. (See our report on the D.C. Circuit’s ACA International v. FCC decision.) In the wake of that decision—while parties await the FCC’s new rule—courts around the country have been weighing in how best to interpret the statutory text.
The issue is now the subject of a deep circuit split. In recent months, both the Seventh Circuit in Gadelhak v. AT&T Services, Inc. and the Eleventh Circuit in Glasser v. Hilton Grand Vacations Co. (pdf) have concluded that equipment that dials from a pre-selected list of phone numbers does not qualify as an ATDS. (Disclosure: Mayer Brown represented AT&T in Gadelhak; Archis was on the briefs in the Seventh Circuit.) The Seventh and Eleventh Circuits thus rejected the Ninth Circuit’s more expansive interpretation of ATDS in Marks v. Crunch San Diego, LLC. (See our report on Marks.) The Second Circuit, in contrast, recently followed the Marks interpretation in Duran v. La Boom Disco.
In light of this growing divide, lawyers on both sides of the “v.” are waiting for the Supreme Court to step in.Continue Reading Seventh and Eleventh Circuits Reject, But Second Circuit Follows, Ninth Circuit’s Expansive Autodialer Definition in Marks
Seventh Circuit enforces important limit on class action tolling
As we have noted before, the tolling rule created by the Supreme Court in the American Pipe case–which tolls the statute of limitations for absent class members when a class action is filed–generates vigorous disputes over when stale or successive claims will be allowed. The Seventh Circuit recently considered one such dispute in Collins v. Village of Palatine, holding that the statute of limitations is not tolled during the pendency of an ultimately successful appeal from the dismissal of a putative class action that had not been certified.
Continue Reading Seventh Circuit enforces important limit on class action tolling
Two Recent Appellate Decisions Illustrate Divergent Approaches To Spokeo
Hundreds of lower courts have interpreted and applied the Supreme Court’s decision in Spokeo, Inc. v. Robins over the past ten months. We will provide a more comprehensive report on the post-Spokeo landscape in the near future, but the overarching takeaway is that the majority of federal courts of appeals have faithfully applied Spokeo’s core holdings that “Article III standing requires a concrete injury even in the context of a statutory violation,” and that a plaintiff does not “automatically satisf[y] the injury-in-fact requirement whenever a statute grants a person a statutory right and purports to authorize that person to sue to vindicate that right.” Nonetheless, a handful of other decisions have been receptive to arguments by the plaintiffs’ bar that Spokeo did not make a difference in the law of standing, and that the bare allegation that a statutory right has been violated, without more, remains enough to open the federal courthouse doors to “no-injury” class actions.
Two recent decisions by the Seventh and Third Circuits illustrate these contrasting approaches.Continue Reading Two Recent Appellate Decisions Illustrate Divergent Approaches To Spokeo
Court Strikes Class Allegations in TCPA Case
The recent decision in Cholly v. Uptain Group, No. 15 C 5030, 2017 WL 449176 (N.D. Ill. Feb. 1, 2017), drives home the point—as we’ve discussed on the blog before—that sometimes the pleadings alone reveal that the requirements for class certification cannot possibly be met. In Cholly, the plaintiff alleged the defendant debt collector violated the Telephone Consumer Protection Act (“TCPA”) by calling her mobile phone using an automatic telephone dialing system (“ATDS”) after she had told the defendant to stop calling. The plaintiff sought to represent (i) a class of persons who received calls from the defendant
Continue Reading Court Strikes Class Allegations in TCPA Case
Supreme Court Will Review NLRB’s Anti-Arbitration D.R. Horton Rule
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.Continue Reading Supreme Court Will Review NLRB’s Anti-Arbitration D.R. Horton Rule
Ninth Circuit rejects meaningful ascertainability requirement for class certification, cementing deep circuit split
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.Continue Reading Ninth Circuit rejects meaningful ascertainability requirement for class certification, cementing deep circuit split
Ten Things Class Action Practitioners Need To Know About Potential Amendments To Federal Rule Of Civil Procedure 23
Rule 23 may be in for some major changes. The Advisory Committee has commissioned a Rule 23 subcommittee to investigate possible revisions to the class action rules. That subcommittee issued a report (pdf) discussing its progress, and recently has been conducting a “listening tour” of sorts regarding potential rule changes.
Our initial view is that the business community should have serious concerns about the approach that at least some members of the subcommittee appear to be taking, as several proposals are aimed at rolling back judicial decisions—including Supreme Court decisions—that are critical to ensuring that class actions satisfy the requirements of due process.
Here are ten things you need to know from the subcommittee’s report.Continue Reading Ten Things Class Action Practitioners Need To Know About Potential Amendments To Federal Rule Of Civil Procedure 23
Supreme Court To Decide Whether To Hear Four High-Stakes Cases Asking When A Suit May Be Litigated As A Class Action
The Supreme Court will decide before the end of this Term whether to hear any or all of four important cases that raise recurring questions of class action law that have sharply divided the lower courts. These cases address questions that we have blogged about before (e.g., here and here): whether a class full of uninjured members may be certified, and whether plaintiffs may rely on experts and statistics to gloss over individualized differences among class members in order to prove their class claims and damages. These questions strike at the heart of what it means to be a “class,” because class actions generally must be litigated using common evidence to show that each class member has been harmed.
Continue Reading Supreme Court To Decide Whether To Hear Four High-Stakes Cases Asking When A Suit May Be Litigated As A Class Action