On March 30, the Supreme Court will hear arguments on whether a damages class action, is permitted by Article III of the Constitution or Rule 23 of the Federal Rules of Civil Procedure where the majority of the class has suffered no actual injury. Notably, this is the first time the Supreme Court will apply the rulings of Spokeo, which held that a plaintiff “cannot satisfy the demands of Article III by alleging a bare procedural violation,” to an entire class. The Supreme Court’s forthcoming decision will have significant implications on defenses to class actions, and could possibly expand liability for companies most often entangled in class actions with plaintiffs that have tenuous claims based only on statutorily created rights of action.
2018 Amendments to Rule 23 – Summarized
Effective December 1 of this year, Rule 23 of the Federal Rules of Civil Procedure – governing class action lawsuits – was amended. Among other things, the amendments modernize the rule with respect to electronic communications, set forth a more unified approach to approving settlements, and discourage bad faith objectors to class action settlements.
The Supreme Court Says “Game Over” to Crafty Gamers’ Attempt to Circumvent Class Certification Appeals
The Xbox 360 is designed for gaming. Appellate litigation, gamers learned, is not.
On behalf of a putative class of purchasers of the Xbox 360, a group of gamers brought suit alleging a defect with the consoles. After the district court struck the class allegations, plaintiffs sought permission to appeal under Rule 23(f), which the Ninth Circuit denied. Rather than proceeding in litigation to final judgment, plaintiffs instead voluntarily dismissed their claims, with prejudice, while reserving a right to appeal the order striking class allegations. Plaintiffs then appealed the order under Section 1291. On appeal, the Ninth Circuit held that it had appellate jurisdiction and thus the case was still “sufficiently adverse” to be heard under §1291. The Supreme Court granted certiorari on the question of whether courts of appeals “have jurisdiction under §1291 and Article III . . . to review an order denying class certification (or, as here, an order striking class allegations) after the named plaintiffs have voluntarily dismissed their claims with prejudice.”
Home Depot Data Breach Derivative Suit Sent Home
Judge Thomas W. Thrash Jr. of the U.S. District Court of Georgia permanently shelved a derivative suit brought by shareholders of Home Depot.
Home Depot is a multinational home improvement retailer. In September, 2014, Home Depot suffered a data breach that resulted in $192 million in net losses. This breach followed the widely publicized data breaches at several other major retailers and department stores.
Where’s the Octopus? New False Advertising Class Action against Goya Foods, Inc. Claims Octopus is Missing from Products
A new putative consumer class action claiming damages in excess of $5,000,000 was filed earlier this month in the Northern District of California against Goya Foods, Inc. (“Goya”). The plaintiff, a purchaser of Goya octopus products from the website Amazon.com, alleges that Goya tricked consumers into purchasing its products by labeling them as octopus when in reality, the products contained jumbo squid. The plaintiff alleges that independent DNA testing showed that Goya’s products were in fact jumbo squid, which is significantly cheaper and of lower quality than octopus.
The Supreme Court’s Spokeo Decision and its Potential Impact on Privacy and Data Security Class Actions
On May 16, 2016, the Supreme Court decided Spokeo, Inc. v. Robins, ruling that a plaintiff must sufficiently allege an injury that is both concrete and particularized in order to have Article III standing, and further that a “bare procedural violation” of a plaintiff’s statutory right may not be sufficiently “concrete” under this analysis. This ruling has the potential to affect class actions generally, but may prove especially influential in privacy and data security class actions.
Spotify, NMPA Accused of a Concerted Effort to Taint the Class Pool
In a putative class action alleging widespread copyright infringement commenced in December 2015 against Spotify, Plaintiff, the lead singer for the bands Cracker and Camper Van Beethoven, recently moved pursuant to Federal Rule of Civil Procedure 26(d) to monitor — and possibly prevent — Spotify USA, Inc. (“Spotify”) from engaging in communications with individuals who fall within the Complaint’s definition of class members. Lowery v. Spotify USA, Inc. The communications at issue concern Spotify’s estimated $30 million settlement with the National Music Publishers Association (“NMPA”), which is not a party to the litigation. The dispute raises an interesting question regarding the appropriate role for the court to play in refereeing class action settlement politics when class counsel has extra-judicial competition in seeking to represent the class.