Although not explicitly stated in the text of Rule 23, for several decades courts have held that a putative class must be clearly defined and based on objective criteria as prerequisites to class certification. Courts and commentators alike have referred to this threshold showing as the “ascertainability” requirement without a common understanding of what exactly it means for a class to be ascertainable. During the past few years, however, certain federal courts throughout the country have begun to adopt a more rigid view of Rule 23’s implicit ascertainability requirement, which has resulted in the short-circuiting of several class actions at the certification stage. This trend has been most prominent in the Third Circuit, which now requires plaintiffs to prove that there is a “reliable and administratively feasible” way to identify all those who fall within the class definition. See, e.g., Carrera v. Bayer Corp., 727 F.3d 300 (3d Cir. 2013).
On August 3, 2015, the California Supreme Court issued its long-awaited arbitration decision in Sanchez v. Valencia Holding Co., LLC, No. B228027. The Court held that the arbitration provision found in a standard form auto finance and sales contract widely used by auto dealerships and lenders throughout California is not unconscionable. Not surprisingly, the Court acknowledged the recent U.S. Supreme Court authority holding that the Federal Arbitration Act (“FAA”) preempts conflicting state law, and affirmed that California law must now recognize the enforceability of class action waivers contained in arbitration provisions under the FAA. Nevertheless, arbitration provisions can be rendered unenforceable, depending on a fact intensive analysis of unconscionability. The Court refused to apply a uniform, bright-line standard. The ruling is unlikely to stem the tide of litigation over the enforceability of arbitration provisions in high stakes class action litigation.
As a result of the Supreme Court’s decision in Clapper v. Amnesty Int’l USA, 133 S. Ct. 1138, 1147 (2013), data breach class actions were largely considered dead in the water. The overwhelming majority of courts, relying heavily on Clapper, dismiss data breach actions for the simple reason that until a consumer suffers actual identity theft, she lacks Article III standing to sue. In other words, without actual identity theft, the risk of future harm—as well as any money spent attempting to protect against potential identity theft—is purely speculative and does not suffice to constitute a legally cognizable injury. Continue Reading
On June 23, 2015, the Ninth Circuit in Cabral v. Supple LLC, — Fed. Appx. –, 2015 WL 3855142 (9th Cir. June 23, 2015) placed a significant hurdle in the path of false advertising class actions. Specifically, the Court held that in class actions “based upon alleged misrepresentations in advertising and the like,” in order for common questions to predominate—an essential Rule 23(b) inquiry—“it is critical that the misrepresentation in question be made to all of the class members.” Continue Reading
On May 11, 2015, in an opinion written by Judge Posner, the Seventh Circuit reversed an order denying Sprint’s motion to compel arbitration in a class action allegation violations of the Telephone Consumer Protection Act (“TCPA”). The thrust of the dispute was not whether there was a valid agreement to arbitrate between Sprint and the plaintiffs, but whether that agreement was broad enough to apply to conduct that occurred after the termination of the agreement. In Andermann v. Sprint Spectrum L.P., __ F.3d __, 2015 WL 2167846 (7th Cir. May 11, 2015), the Seven Circuit said it was. Continue Reading
July 21, 2015 Update: On July 20, 2015, the Ninth Circuit Court of Appeals denied Microsoft’s petition for rehearing en banc and amended its March 18, 2015, opinion to add a footnote supporting the conclusion that it had jurisdiction because a stipulated dismissal is an appealable judgment. The amended opinion can be accessed here.
We recently reported on a Ninth Circuit Court of Appeals opinion reversing a district court’s decision to strike class action allegations in a putative class action against Microsoft. Baker v. Microsoft Corp., No. 12-35946, 2015 U.S. App. LEXIS 4317 (9th Cir. Mar. 18, 2015). In Baker v. Microsoft Corporation, the Ninth Circuit panel of judges held that proof that individual class members were damaged by an alleged defect (here, a defect in Xbox 360 video game consoles resulting in scratched game discs) was not necessary for a class action to be certified. Id. at *20. You can read the full article here. Continue Reading
In two recent decisions, Reid v. Johnson & Johnson, __ F.3d __, Case No. 12-56726 (9th Cir. March 13, 2015) and Astiana v. The Hain Celestial Group, Inc., __ F.3d __, Case No. 12-17596 (9th Cir. April 10, 2015), the Ninth Circuit either rejected or minimized the use of preemption and primary jurisdiction as defenses to allegations of false labeling of food and cosmetics. Continue Reading
July 21, 2015 Update: On July 20, 2015, the Ninth Circuit Court of Appeals amended its March 18, 2015, opinion to add a footnote supporting the conclusion that it had jurisdiction because a stipulated dismissal is an appealable judgment. The amended opinion can be accessed here.
The Ninth Circuit Court of Appeals recently reversed a district court’s decision to strike the class action allegations in Baker v. Microsoft Corp., No. 12-35946, 2015 U.S. App. LEXIS 4317 (9th Cir. Mar. 18, 2015). In Baker, the putative class alleged that a design defect in Xbox 360 video game consoles caused the consoles to malfunction and scratch game discs – although only 0.4% of Xbox console owners reported such problems. Id. at *1-4. The majority opinion held that the district court should have followed an earlier Ninth Circuit decision rejecting the notion that individual manifestations of a defect preclude resolution of claims on a class-wide basis. Id., citing Wolin v. Jaguar Land Rover N. Am., LLC, 617 F.3d 1168 (9th Cir. 2010). “[P]roof that [a alleged design defect] caused individual damages is not necessary . . . Rather, plaintiffs’ breach of express warranty claim presents a common factual question – is there a defect? – and a common mixed question of law and fact – does that defect breach the express warranty?” Baker, 2015 U.S. App. LEXIS 4317 at *16-17. Notably, the Ninth Circuit’s decision only determined that the district court misapplied the law in striking the class action allegations from the complaint. Id. at *20. The decision expressly disclaimed any determination of whether the issues would be best decided on a class-basis or whether class certification should be granted. Id. Continue Reading
In Jordan v. Nationstar Mortgage LLC, No. 14-35943 and 15-35113, 2015 WL 1447217 (Apr. 1, 2015 9th Cir.), a Ninth Circuit panel held that cases subject to the Class Action Fairness Act (“CAFA”) become “removable” only when removal under CAFA is first ascertainable even if the initial pleading earlier disclosed a separate non-CAFA basis for removal which the defendant chose not to pursue. This holding changes Ninth Circuit law which ordinarily requires courts to strictly construe removal statutes against removal and to generally treat as untimely any notice of removal filed more than 30 days after receipt of an initial pleading disclosing a removal basis. The panel considered itself no longer bound to this circuit precedent given the U.S. Supreme Court’s recent decision in Dart Cherokee Basin Operating Co., LLC v. Owens, 135 S. Ct. 547 (2014), which recognized Congress’s strong preference that federal courts adjudicate certain interstate class actions. A significant Ninth Circuit shift, Jordan opens the door for more lenient and less technical applications of removal requirements in CAFA cases. Continue Reading
In a victory for Sheppard Mullin and its client, in Trabert v. Consumer Portfolio Serv., Inc., __ Cal. App. 4th. __, 2015 WL 880949 (4th Dist. Mar. 3, 2015), the California Court of Appeal compelled arbitration and enforced a class action waiver after severing an arbitration term. Continue Reading