For over 40 years, putative class members have escaped some of the curbs against late-filed lawsuits that apply to normal cases. Last week, the United States Supreme Court brought back some of those curbs, threatening to reduce the number of spin-off cases that often result from class actions. Lawsuits under the Truth in Lending Act are directly affected. Continue Reading SCOTUS Resolves Dispute Over Class-Action Timing, TILA Cases Affected
A favorite strategy among class-action lawyers is to find a consumer-friendly jurisdiction and then file as many lawsuits there as possible. The new cases often involve consumers from around the country. In a recent decision, the United States Supreme Court all but ended that tactic. Continue Reading High Court Limits Nationwide Class Actions
In a putative class action, the court’s decision about whether to certify the class is always one of the case’s most important rulings—if not the most important ruling. The right to appeal that decision is limited. Some clever plaintiffs’ lawyers had found a way around that limitation, but the U.S. Supreme Court recently blocked their route. Continue Reading Supreme Court Outlaws Class-Action Trick
Last year, the U.S. Supreme Court answered an important constitutional question: Can Congress authorize a lawsuit in which the plaintiff suffered no financial injury? The court’s disappointing answer (“it depends”) has perplexed courts across the nation. That confusion has spread to an area of vital interest to the real estate industry, the timely recording of satisfactions of mortgages. Continue Reading Federal Judges Spar Over Mortgage-Satisfaction Lawsuit
Many states require lenders to record satisfactions of mortgage soon after the underlying debt is paid off. The failure to do so can result in monetary penalties. In light of a recent decision from the U.S. Supreme Court, judges now disagree about whether those situations can also lead to viable lawsuits. Continue Reading Judicial Feud Erupts Over Recording of Mortgage Releases
Last week, in a much anticipated decision, the U.S. Supreme Court addressed whether a consumer can sue over violations of statutory rights without herself having suffered an actual, concrete harm. The Supreme Court said “no,” but gave little detail about which injuries are concrete enough to pass constitutional muster. That lingering uncertainty is likely to help at least some companies defeat class certification. Continue Reading Supreme Court Bolsters Existing Weapon Against Class Certification
Five years ago, the U.S. Supreme Court seemed to reject the use of statistical proof in class actions, dismissing the evidence as “a novel project.” But, last week, the high court appeared to reverse course. Its new decision, Tyson Foods, Inc. v. Bouaphakeo, is thoroughly enigmatic and contradictory. It will no doubt spawn endless legal battles, and the real estate industry will have to monitor how lower courts struggle to decipher it. Continue Reading Statistical Evidence Lives Again in Class Actions
On January 15, 2015, the United States Supreme Court agreed to address whether an appellate court has jurisdiction to review an order denying class certification after the plaintiff voluntarily dismissed his or her claims with prejudice. Continue Reading Supreme Court Agrees to Review Propriety of Plaintiffs’ Questionable Maneuver Around FRCP 23(f)
Last week, a federal appeals court in California revived a twice-failed bid for class certification by homeowners who claim to have been harmed by a group of so-called captive title agencies. The court said it would not defer to the expansive arguments raised by the Consumer Financial Protection Bureau in the agency’s friend-of-the-court brief. But, as it turns out, the court did exactly that. An upcoming ruling from the U.S. Supreme Court might ultimately change that result.
The case, Edwards v. First American Corporation, has a long and tortured history. Plaintiff Denise Edwards bought a home in Cleveland, Ohio, and used Tower City Title Agency, LLC, as her settlement agent. Before that, First American Title Insurance Company had purchased a 17.5% ownership interest in Tower City, which agreed as part of that deal, to refer future title business to First American. Edwards sued, claiming that, under the Real Estate Settlement Procedures Act (RESPA), the new ownership structure was an unlawful referral arrangement. First American had similar ownership interests with 179 other title agencies all over the country, Edwards asserted.
The trial court denied Edwards’ motion for class certification, but the United States Court of Appeals for the Ninth Circuit reversed that decision. First American then successfully persuaded the U.S. Supreme Court to hear the case on appeal. (Disclosure: In that proceeding, I wrote an amicus brief on behalf of other title insurance underwriters, urging the Supreme Court to accept the case.) The high court was supposed to decide whether the U.S. Constitution allows a plaintiff to sue when that person has suffered no money damages but instead complains only of a violation of statutorily-created rights. Yet, after the case had been fully briefed and set for ruling, the Supreme Court did an about-face and declined to hear the appeal, which it said it had “improvidently granted.”
Superman’s weakness is kryptonite, Dracula’s holy water, and the Wolfman’s silver bullets. What about class-action plaintiffs? On May 18, 2015, the U.S. Supreme Court agreed to hear a case that, depending on its result, could allow companies to defeat nearly every type of class action out there. The idea would be for a business to offer full payment (presumably a small sum) to the individual trying to create a class action. That offer would then “moot” the plaintiff’s lawsuit and cut off her ability to seek class liability. The process would be repeated for any other would-be class representative, and in theory the paltry recoveries would discourage crusading attorneys from pursuing the case. Will it work?
That question has divided courts around the country. Some federal courts of appeals have approved this sort of “pick off” strategy, while others have flatly rejected it. And two years ago, in the case of Genesis Healthcare Corporation v. Symczyk, the U.S. Supreme Court came close to resolving the debate. But Symczyk was technically not a class action, but rather it was a collective action under the federal Fair Labor Standards Act (FLSA). Although the high court allowed the pick-off maneuver to work in that case, the tribunal’s language implied that the same outcome would not necessarily occur in a garden-variety class action. Since then, lower courts have seized on that language as grounds for spurning pick-offs outside the context of FLSA actions.