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.

Continue Reading Pending Supreme-Court Case Could End Class Actions as We Know Them

On April 27, the U.S. Supreme Court agreed to hear the case of Spokeo, Inc. v. Robins—a lawsuit that, depending on its outcome, could end private enforcement of scores of federal laws, including RESPA. Spokeo raises a simplistic question, one you might think had been answered long ago: Can Congress create legal rights that, if violated, an aggrieved party can sue over if that person has not been financially harmed or injured in some concrete way? For example, most plaintiffs in RESPA cases cannot prove that they suffered money damages as a result of alleged kickbacks. That’s not a problem now, but Spokeo could throw them out of court.

Spokeo describes itself as a “people search engine that organizes White Pages listings, Public Records and Social Network Information to help you safely find and learn about people.” The plaintiff, Thomas Robins, is unemployed and accuses the company of spreading false information about him, which he says hurts his job prospects. He sued Spokeo under the Fair Credit Reporting Act (FCRA). It’s not clear to me how a “people search engine” could qualify as a credit reporting agency, but Spokeo must be worried about potential FCRA liability because it has chosen to fight to the death on a collateral question (standing), rather than focus on the potential inapplicability of the statute.

The question the Supreme Court has agreed to address is: “Whether Congress may confer [constitutional] standing upon a plaintiff who suffers no concrete harm, and who therefore could not otherwise invoke the jurisdiction of a federal court, by authorizing a private right of action based on a bare violation of a federal statute?”

Continue Reading Fate of RESPA and TILA Class Actions Hangs in Balance at Supreme Court