If past is prelude, SCOTUS will just tinker in this term’s class action cases

November 18, 2015

(Reuters) – To celebrate the 10th anniversary of Chief Justice John Roberts’ inauguration, the Akron Law Review has published a collection of papers on the impact of the Roberts Court’s decisions on class actions. The articles, a mix of studies by law professors and class action practitioners, were all written before the U.S. Supreme Court heard arguments this fall in a trio of cases posing some fundamental questions about class actions, such as whether Congress can legislate constitutional standing and whether classes can be certified if they contain members who have not been injured.

But based on a paper by BakerHostetler lawyers Paul Karlsgodt and Dustin Dow, the court isn’t likely to provide sweeping answers to those questions. According to “The Practical Approach,” if you put aside the Supreme Court’s support for arbitration provisions barring class actions and some rhetoric in opinions by Justice Antonin Scalia, this batch of justices has been surprisingly restrained in its class action precedent.

“The Roberts Court has been reluctant to issue sweeping opinions that establish firm doctrinal rules governing class action practice,” the Baker study said. “Instead, the court more often has simply decided the case in front of it and left it to lower courts and lawyers to further fill in doctrinal gaps.” (On the other side of the class action v., Elizabeth Cabraser of Lieff Cabraser Heimann & Bernstein reached much the same conclusion in her paper for the Akron symposium, “The Class Abides.”)

The lead author of the BakerHostetler article, Karlsgodt, told me in an interview Wednesday that, based on oral arguments this term in Campbell-Ewald v. Gomez, Spokeo v. Robins and Tyson Foods v. Bouaphakeo, he’s expecting the trend to continue. The court, he said, will probably continue to avoid sweeping doctrinal changes and instead issue narrowly tailored opinions that hew closely to the facts of the specific cases. As I’ve written, that approach will surely disappoint class action opponents who have been hoping the court would use the Spokeo and Tyson cases, in particular, to rein in big cases.

There is a gap, Karlsgodt said, between perceptions of the Roberts Court’s class action opinions in cases like Wal-Mart v. Dukes and Comcast v. Behrend – which were initially thought to be class action killers – and the real-world impact of those decisions. “It’s only now that people have been starting to realize they had been hitting singles when they thought they were hitting home runs,” he said.

This term’s base hit, he said, may come in the Campbell-Ewald case, in which the justices will decide whether the offer of full judgment to named plaintiffs moots class actions. Though Karlsgodt said Justice Anthony Kennedy, the presumed swing vote, did not clearly signal his opinion, it’s certainly possible the court will hold that defendants can pick off named plaintiffs. If it does, he said, defendants in small-dollar consumer class actions, should be able to kill off lawyer-driven suits – at least until plaintiffs’ lawyers figure out how to attract a string of named plaintiffs, making it too expensive and cumbersome to keep picking them off.

In the Spokeo and Tyson cases, Karlsgodt said, the justices seemed determined to stick closely to case-specific questions rather than stray into a public policy discussion of class actions. He said it was worth noting that in the Spokeo case, even the reliably liberal Justice Elena Kagan seemed to suggest Congress can’t simply declare through a statute that a plaintiff has been injured. But Karlsgodt predicted the Supreme Court’s ultimate Spokeo opinion will turn on congressional intent just in enacting the statute at issue in the case, the Fair Credit Reporting Act. The decision will probably not wipe out class actions based on federal laws giving consumers a private right of action to pursue statutory damages.

“With very few exceptions, there is just not a majority of the court that thinks class actions as a procedural mechanism are such a horrible thing,” Karlsgodt said.

Of course, he pointed out that the Supreme Court is full of surprises. This could be the term that the justices could give class action detractors the home run they’ve been swinging for. “It’s like they say in the investment ads,” Karlsgodt said. “Past performance is no guarantee of future results.”

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