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class actions

Supreme Court Rules in Favor of Class Actions

The U.S. Supreme Court, 6-3, has ruled that class action defendants can't defeat lawsuits just by offering lead plaintiffs everything they sought to recover, The New York Times' Adam Liptak reports. That means companies can't pick off class representatives and thus defeat class actions.

The plaintiff received unwanted text messages and sued under the Telephone Consumer Protection Act. The case is Campbell-Ewald Co. v. Gomez.

Supreme Court Rejects Another Consumer Class Action

The U.S. Supreme Court, 6-3, has rejected another class action. This time, the majority of the court ruled this week that a class action cannot proceed against DirecTV over early-termination fees because those fees have to handled by private arbitration, The Washington Post's Robert Barnes reports.

The majority opinion, written by Justice Stephen Breyer, struck down a California law that makes class-action bans in contracts unenforceable.

Barnes further notes the ruling continues the trend of strengthening the authority of companies to channel consumer complaints into arbitration.

Ninth Circuit Sides with Veterans in Lawsuit Over Experiments

The U.S. Court of Appeals for the Ninth Circuit has ruled that the federal government must continue to provide medical care to veterans exposed to chemical and biological-weapons experiments as well as any new information that may affect their health, Metropolitan News-Enterprise's Kenneth Ofgang reports. The experiments took place between 1942 and 1975.

The panel said the fact that care is available through the Department of Veterans Affairs is insufficient basis to not compel the government to provide care to the entire class of test subjects.

The panel also found a basis for compelling medical care in a 1988 military regulation finding that test subjects have a duty to be warned even if their participation in the research is now over. The military had argued that the regulation only apply prospectively.

Class Actions Face New Test in Supreme Court Next Term

Class actions will face a new test in the U.S. Supreme Court next year after the justices granted certiorari on two issues:

1) Can workers at an Iowa meatpacking plant rely on statistical sampling to establish liability and damages regarding wages?

2) Can a class be certified when it contains membesr who weren't injured and have no legal right to damages?

Reuters' Alison Frankel says in her analysis that class action lawyers "could be looking back with nostalgia and regret at the good old days when they only had to worry about Wal-Mart v. Dukes and Comcast v. Behrend."

Frankel notes that the Supreme Court also has taken up Spokeo v. Robins, presenting "the question of whether Congress can confer constitutional standing on otherwise uninjured class members by providing a private right to recover statutory damages for violations of consumer laws."

The Supreme Court also has taken up Campbell-Ewald v. Gomez, presenting the issue of whether defendants can stop class actions by offering lead plaintiffs a settlement that addresses their full damages.

Supreme Court Considers Letting Businesses Pay to End Class Actions

The U.S. Supreme Court has agreed to decide whether a defendant in a class action case can end litigation by offering full payment to the lead plaintiff, Bloomberg's Greg Stohr reports.

Plaintiff Campbell-Ewald Co. is facing hundreds of millions of dollars for allegedly violating the Telephone Consumer Protection Act (TCPA) by sending automated text messages. The lead plaintiff was offered $1,503 for each text mesage he received, which Campbell-Ewald said makes the case legally moot because the lead plaintiff was offered everything to which he might be entitled.

The TCPA is being criticized by Campbell-Ewald as "' an extortionist weapon in the hands of class action attorneys seeking to extract lucrative attorneys’ fees for class-wide settlements.'"

Anti-Union Workers Can't Sue as Class

The U.S. Court of Appeals for the Sixth Circuit has ruled that nonunionized child care providers in Michigan can't form a class with union members to sue over union dues being deducted from their state subsidies, Courthouse News' Lorraine Bailey reports.

Under a collective bargaining agreement, all home child care providers in Michigan who were receiving state subsidies had to become a union member or have a portion of their subsidies deducted to cover union costs (the progam of collective bargaining at issue has since ended). The Sixth Circuit said the proposed class of 40,000 childcare workers was problematic for including any provider--whether they voted to join the union or not.

Black Steelworkers Can Proceed with Racial Bias Class Action

The U.S. Court of Appeals for the Fourth Circuit has ruled that black employees of a Nucor Corp. steel plant can proceed as a class with their claims that their employer violated the Civil Rights Act with discrimination in job promotions, the Daily Labor Report's Lisa Nagele-Piazza reports.

The Fourth Circuit, 2-1, reversed a lower decision to decertify the class action in which the black steelworkers allege that they faced disparate treatment and disparate impact from discrimination in promotions. The lower court had found that the class did not meet the U.S. Supreme Court's heightened standard in Wal-Mart Stores Inc. v. Dukes for whether there are questions of law or fact common to the class.

Ninth Circuit Upholds Class Action Challenging Prison Conditions

The U.S. Court of Appeals for the Ninth Circuit has refused to reconsider a class action by 33,000 Arizona prison inmates over a strong dissent, Courthouse News' Tim Hull reports. The dissent said that inmates failed to demonstrate that their class has commonality and typicality: "'First, before certifying a class, a court must ensure that all members of the potential class have the same sort of claim, and that the claim is susceptible to classwide resolution. Second, a prisoner does not have an Eighth Amendment claim merely because the prisoner is incarcerated in a prison with a defective medical system,'" Judge Sandra Ikuta wrote.

The plaintiffs allege that inadequate healthcare in Arizona's prisons has violated their Eighth Amendment rights. For example, prison officials allegedly made it difficult for inmates to get medications, medical devices and dental care beyond having their teeth pulled.

The case has now settled, and the dissent said class certification should be vacated despite the mootness issues.

Arbitration-Skeptical California Supreme Court Takes Up Cases

The Recorder's Marisa Kendall reports on the ebb and flow between arbitration and class actions and the U.S. Supreme Court and the California Supreme Court. The U.S. Supreme Court's ruling in AT& T Mobility v. Concepcion led to class actions drying up; the justices found that the Federal Arbitration Act pre-empted California's ban on class arbitration. As a result, companies shielded themselves with agreements providing that disputes with customers and employees must be resolved through arbitration.

But the California Supreme Court has agreed to review whether consumers seeking injunctive relief under California law can be forced into arbitration. The California justices also will hear a case that will "potentially lay out new grounds by which courts can reject unfair or one-sided arbitration agreements." In the latter case, the Kendall reports the California Supreme Court is likely to use the case to clarify what makes an arbitration agreement too one-sided or unfair to enforce.

Investors Need a More Muscular SEC

New York Times editor Gretchen Morgenson argues that investors need a more muscular Securities and Exchange Commission. Even though billions of dollars have been paid by financial firms to settle regulatory and legal actions related to the mortgage crisis, most of that money went to the Department of Treasury or states. The SEC has collected $2.6 billion in penalties and disgorgement of profits in its actions, but class actions on behalf of stockholders and debtholders has recovered much more for investors, Morgenson reports. In six cases involving both private lawsuits and SEC action, the SEC recovered $400 million, while private plaintiffs recovered $3.8 billion. The agency "is clearly hamstrung in its efforts to generate recoveries on behalf of harmed investors" and should be authorized by Congress to be able to recover penalties equal to investor losses, Morgenson argues. Investors also should be able to bring private actions udner the securities laws, she argues.


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