Some years are exciting in class action practice; others are tamer. In general, in any established area of the law, precedent accumulates only incrementally. And, with the modern Rule 23 entering its 50th anniversary year, it makes sense that this might be one of the years that would demonstrate that principle. There were no stunning reversals or announcements of new law this year. The Supreme Court cases promising fireworks this term were argued in 2015, but decisions held until 2016. So this year’s ten most important cases were mostly building blocks adding to pre-existing trends in the law. As a result, this list may feel a little arbitrary, and there are good arguments for looking at other cases as significant as well. Nonetheless, here are ten cases from this year you’re likeliest to see cited in various forms.
DirecTV, Inc. v. Imburgia (S.Ct. 2015). In the wake of Concepcion, several state courts—most notably California—have sought additional ways to limit the use of class action waivers in arbitration agreements. California tried to hold that a class arbitration waiver was unenforceable; Justice Breyer, writing for a 6-judge majority, held that the Federal Arbitration Act preempted the lower court’s decision.
Mullins v. Direct Digital, LLC, 795 F.3d 654 (7th Cir. 2015). Ascertainability is becoming one of the primary battlegrounds in class certification fights. And this is one of the first counterattacks to the Third Circuit’s aggressive holdings on ascertainability. In this opinion, the Seventh Circuit affirmed the lower court’s certification of a food labeling class, holding that ascertainability does not require an administratively feasible method of identifying a proposed class, just an objective one. Expect to see this cited in class cert reply briefs for some time to come.
Neale v. Volvo N. Am. LLC, 794 F.3d 353 (3d Cir 2015). One of the frustrating things about “no-injury” cases is the way in which they conflate a number of different Rule 23 issues. In Neale, the lower court granted certification in a case alleging that certain Volvos had a sunroof drainage defect. The defendant appealed, arguing in part that the class lacked standing because many of the class members had experienced no problems with their sunroofs. The Third Circuit vacated and remanded, clarifying that, while the case before it presented numerous predominance problems, so long as the named plaintiff has a valid claim, Article III standing is met.
Johnson v. Nextel Communications, Inc., 780 F.3d 128, 146 (2d Cir. 2015). In vacating the certification of a labor negotiation class, the Second Circuit reaffirmed the problem of state law variations in strong terms: “Once it is established that the substantive law of each class member’s state will apply to his or her claims, the case for finding the predominance of common issues and the superiority of trying this case as a class action diminishes to the vanishing point.”
Remijas v. Neiman Marcus Group, 794 F.3d 688 (7th Cir 2015). The plaintiffs sued Neiman Marcus, alleging that its susceptibility to hackers had caused them some form of unspecified future harm. The lower court dismissed the case, holding the plaintiffs lacked Article III standing. The Seventh Circuit reversed, holding that “injuries associated with resolving fraudulent charges and protecting oneself against future identity theft” provided injury concrete enough for standing. At the time, it was heralded as a case that would enable data-breach class actions. Little so far has changed that analysis.
In re BankAmerica Corp. Secs. Litig., 775 F.3d 1060 (8th Cir. 2015). The Eighth Circuit reversed a settlement with a significant cy pres component. In doing so, it held that cy pres must be used as a last resort, and the money must go to something that will provide an actual indirect benefit to the class. In the continued fight over the propriety of cy pres relief, this stands out as a particularly sharp declaration of principle.
Allen v Bedolla, 787 F.3d 1218 (9th Cir 2015). The Ninth Circuit vacated a settlement in keeping with its “high procedural standard for review of class action settlements negotiated without a certified class.” It appeared particularly concerned about the possibility of collusion. Its analysis of the nuances district courts must watch is particularly important.
Reyes v. Dollar Tree Stores, Inc., 781 F.3d 1185 (9th Cir. 2015). The Ninth Circuit reversed a remand under CAFA, holding that certification of class worth more than $5 million was ground for re-removal. In other words, it doesn’t matter how far plaintiffs can push a case in state court, if it belongs in federal court, it should wind up there.
Graham v. R.J .Reynolds Tobacco Co., 782 F.3d 1261 (11th Cir. 2015). Ever since the Florida Supreme Court affirmed certification of the Engle tobacco litigation, the federal courts have struggled with how to implement the Florida jury verdict (that “all cigarettes are inherently defective and that every cigarette sale is an inherently negligent act”) consistent with due process. In rejecting the district court’s verdict for the jury in one of the Engle progeny cases on obstacle preemption grounds, the Eleventh Circuit showed just how difficult it is to transform vague classwide findings into actual money for class members.
Pagliaroni v. Mastic Home Exteriors, Inc., 2015 U.S. Dist. LEXIS 126543 (D. Mass. Sep. 22, 2015). More and more defendants are challenging no-injury class actions on typicality grounds. After all, if the named plaintiff suffered an actual loss, but most of the class did not, it should be obvious why the named plaintiff is atypical. In denying certification of a proposed class of homeowners who alleged a latent defect in their decks, the District of Massachusetts showed that the typicality challenge is gaining traction.
Correction: I originally had the wrong procedural posture for Neale in this post, a dumb error. Thanks to Matthew Mendelsohn of @MendelsohnLaw for spotting it. The error has been corrected.