U.S. Supreme Court Remands Spokeo; Ninth Circuit Must Consider Whether “Concrete” Injury Occurred

Spokeo, Inc. v. Robins has been closely watched because of its potential implications for class actions alleging mere “technical violations” of consumer protection statutes.  Yesterday, the U.S. Supreme Court issued a 6-2 decision confirming that a plaintiff must have suffered a “concrete” injury to have standing under Article III of the U.S. Constitution.  According to the Court, a plaintiff who suffers the injury defined in a consumer protection statute may or may not have suffered an injury sufficiently “concrete” to have standing.  But because the Ninth Circuit Court of Appeals had failed to address the concreteness of Plaintiff’s injury as a separate issue, the Supreme Court remanded the case.

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Eighth Circuit Reverses District Court for Ignoring Price-Impact Evidence That Rebutted the Fraud-on-the-Market Presumption and Defeated Class Certification

In IBEW Local 98 Pension Fund v. Best Buy Co., Inc., No. 14-3178 (8th Cir. Apr. 12, 2016), the United States Court of Appeals for the Eighth Circuit held, in a Rule 10b-5 securities fraud action, that the district court incorrectly analyzed the price-impact evidence submitted by defendants to rebut the fraud-on-the-market presumption of reliance that plaintiffs had invoked to satisfy Rule 23(b)(3)’s predominance requirement.  Two years ago, the U.S. Supreme Court, in Haliburton Co. v. Erica P. John Fund, Inc., 134 S.Ct. 2398, 2414-16 (2014) (Halliburton II), recognized a defendant’s right to rebut the presumption using price-impact evidence at the class-certification stage.  Based on Haliburton II, the majority panel determined that defendants had submitted “overwhelming” evidence that the alleged misstatement caused no stock price inflation.  The panel rejected plaintiffs’ theory that the misstatement could nevertheless have “maintained” the stock’s already-inflated price at the allegedly inflated level.  The decision importantly limits the fraud-on-the-market presumption to cases in which the alleged misstatement is the independent cause of new or additional stock price inflation. Continue Reading

Reading The Tea Leaves – How Will The U.S. Supreme Court Decide Spokeo?

While the U.S. Supreme Court has issued decisions on two of its major class action cases this term, Campbell-Ewald Co. v. Gomez and Tyson Foods v. Bouaphekeo (see January 20, 2016 blog and May 5, 2016 blog), one other previously argued case remains undecided, Spokeo, Inc. v. Robbins.  What will happen with this case given the recent passing of Justice Scalia?    Continue Reading

Statistical Modeling in Class Actions: The U.S. Supreme Court Weighs in, Kind of

A U.S. Supreme Court decision expected to potentially change (or at least clarify) the rules on the hot-button issue of statistical modeling in class actions ended up turning much more on case law specific to the Fair Labor Standards Act (“FLSA”), and on some litigation strategy decisions made at the trial court level.  The Court’s 7-1 decision in Tyson Foods v. Bouaphakeo, thus became much less of a blockbuster than many had expected.   Continue Reading

Mooting Class Actions by Offer of Judgment – Episode 2: The Ninth Circuit Strikes Back

In Campbell-Ewald v. Gomez, 136 S. Ct. 663 (Jan. 20, 2016), the Supreme Court resolved a split among courts and held that an unaccepted settlement offer of complete individual relief does not moot the plaintiff’s lawsuit.  However, the Court expressly left open the question of “whether the result would be different if a defendant deposits the full amount of the plaintiff’s individual claim in an account payable to the plaintiff, and then the court enters judgment for the plaintiff in that amount.”  136 S. Ct. at 672.  Continue Reading

Back at it Again (with the Standing Opinions): Seventh Circuit Reiterates Article III Standing in Data Breach Class Actions

On July 20, 2015, the Seventh Circuit issued its opinion in Remijas v. Neiman Marcus Group, 794 F. 3d 688 (7th Circ. 2015), which immediately became the low-water mark for Article III standing in data breach cases.  In short, Remijas became the first Circuit decision to expressly and expansively recognize that risk of future injury and time and money spent protecting against identity theft as a result of a data breach were sufficient to confer Article III standing.

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Attacking Class Action Allegations On The Pleadings Can Be A Successful Strategy

Not all class action allegations are created equal. Certain types of claims are more likely to be amenable to class treatment – generally those involving uniform policies that result in uniform injuries; other claims seem destined for individualized treatment – generally those involving a variety of unpredictable factors that determine liability as to each putative class member.  And some class claims, due to their very nature, are so individualized that the class allegations should be dismissed on the pleadings.  Indeed, the California court of appeal recently reminded us that some class allegations deserve dismissal on demurrer.  The case is Schermer v. Tatum, D067807 (Cal. App. 4th Dis. Mar. 18, 2016). Continue Reading

Mooting Plaintiff’s Class Action Even After Plaintiff Refuses An Offer Of Judgment

For years, litigants have battled over whether a defendant’s offer of judgment, which completely satisfies the plaintiff’s individual claim, can moot a class action. In Campbell-Ewald v. Gomez, 136 S. Ct. 663 (2016), the U.S. Supreme Court recently held that no case is mooted when a plaintiff refuses to accept an offer of judgment.  The Supreme Court, however, left open the question of what happens when a defendant follows through with its offer by tendering complete individual relief, depositing the monetary relief with the court, and moving for entry of judgment. Continue Reading

The Game Goes On: Sheppard Mullin Obtains Dismissal With Prejudice of Class Action Alleging Social Gaming Micro-transactions Constitute Illegal Gambling

Another lawsuit alleging illegal gambling in a social game has been dismissed.  Over the last year, social gaming mobile applications have come under attack from the Plaintiffs’ bar as gambling in disguise.  Plaintiffs’ attorneys theorize that in-app micro-transactions where consumers pay cash for virtual items (i.e., gold coins or gems) designed to speed up or otherwise enhance gameplay are, in effect, wagers insofar as other in-game materials can subsequently be “won” with those items.  None of the plaintiffs have prevailed in these recent cases. Continue Reading

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