Last week brought two significant appeals court victories for Washington Legal Foundation in cases in which we filed amicus briefs. The cases involved two highly contested civil-litigation issues: state-law liability for allegedly misleading food labeling and “fraudulent joinder.”
Featured Expert Contributor – Civil Justice/Class Actions
Over the last thirty years, Associate Justice Antonin Scalia established a powerful presence on the Supreme Court on issues of interest to the business community. WLF’s General Counsel, Mark Chenoweth, deftly addressed this from a broader perspective in a recent interview with Metropolitan Corporate Counsel. In the specific area of class-action litigation, Justice Scalia repeatedly thwarted the plaintiffs’ bar’s efforts to encourage liberal interpretation of Rule of Civil Procedure 23 and broadly applied the preemptive effect of the Federal Arbitration Act (FAA). His death and vacancy have generated much speculation about how the post-Scalia high court will address class actions and other related cases in the terms ahead. Continue reading
The U.S. Court of Appeals for the Ninth Circuit this week denied Uber Technologies’s petition for Rule 23(f) interlocutory review of an order granting class certification in a major challenge to the manner in which Uber operates its ride-sharing business. The four named plaintiffs assert that every Uber driver should be classified as an employee, not (as is currently the case) an independent contractor. The denial of review is not unusual when viewed in isolation. Although Rule 23(f) grants federal appeals courts discretionary authority to hear interlocutory appeals from class-certification orders, appeals courts permit such appeals in only a fraction of all cases, and the default rule continues to be that litigants must await issuance of a final judgment before appealing from pre-judgment rulings to which they object. Continue reading
Congress adopted the Class Action Fairness Act (CAFA) in 2005 in response to concerns that plaintiffs’ lawyers were gaming the system to prevent removal of class actions and “mass actions” (lawsuits with more than 100 named plaintiffs) from state court to federal court. CAFA provided state-court defendants the option of removing a case to federal court when the suit is both substantial and involves numerous plaintiffs, even when complete diversity of citizenship is lacking.
Immediately thereafter, the plaintiffs’ bar began to undermine CAFA by coming up with new ways to keep their mass lawsuits in state courts. Among other schemes, plaintiffs’ lawyers divided their clients (often numbering in the thousands) among multiple lawsuits in the same state court, thereby ensuring that CAFA’s 100-plaintiff threshold would not be surpassed in any one lawsuit. An excellent 2014 en banc decision from the U.S. Court of Appeals for the Ninth Circuit imposed strict limits on use of this removal-defeating tactic. The court held in Corber v. Xanodyne Pharmaceuticals, Inc. that if, after filing their separate lawsuits, the plaintiffs ask the state court to coordinate the cases for all purposes, the cases should be deemed unified and thus removable under CAFA’s mass-action provision. But a Ninth Circuit panel decision this month, Briggs v. Merck Sharp & Dohme, creates a roadmap that allows plaintiffs to coordinate their lawsuits yet avoid removal—thereby eviscerating Corber. The decision suggests that the panel (Judges Fletcher, Berzon, and Paez) feels free to thumb their collective nose at Ninth Circuit en banc decisions; it ought to be reversed. Continue reading
The usual spate of articles by Supreme Court scribes pronouncing the Roberts Court staunchly pro-business were noticeably sparser as the latest term ended. When journalists are reduced to using the Obamacare and same-sex marriage cases as their main exhibits to prove the Supreme Court’s supposed pro-business tilt, you know it wasn’t a banner year for business.
Of course there were a few notable losses (King v. Burwell itself, Oneok, and Texas Dept. of Housing come to mind). But the fact that free enterprise did not fare well this term had comparatively little to do with the decisions the Supreme Court issued. Rather, business civil liberties suffered more overall from the various state supreme court and federal courts of appeals cases that the high court left on the cutting-room floor.
The tally that follows comprises more than just the cases of a disappointed cert seeker. WLF did not participate in more than half of the examples discussed below. However, the cert petitions mentioned here are all cases where free enterprise, individual and business civil liberties, or rule of law interests were at stake. From the free-market vantage point, it once again appears that the Court did not make enough room on its docket for cases implicating significant liberty interests. By choosing a lighter load, the Court allows legal uncertainty to linger, lower-court disobedience to fester, adventuresome new legal theories to propagate, and injustices implicating millions, if not billions, of dollars to prevail. Continue reading
Rule 23(f) of the Federal Rules of Civil Procedure gives appeals courts unfettered discretion in deciding whether to permit an interlocutory appeal from a class certification decision. Most circuits have exercised that discretion sparingly. But a U.S. Court of Appeals for the Ninth Circuit decision issued last week affirmed that circuit’s unique rule: plaintiffs (but not defendants) are entitled to take an immediate appeal from an adverse class certification ruling, even when an appeals court panel has previously denied discretionary appeal under Rule 23(f). All plaintiffs need do is stipulate to dismissal of the complaint with prejudice, and then seek review of the order denying certification in connection with an appeal from the final judgment of dismissal. Never mind that a plaintiff who stipulates to dismissal of his lawsuit might reasonably be deemed to have abandoned his claims. Continue reading
On April 27, 2015, the U.S. Court of Appeals for the Ninth Circuit issued a 2-1 decision in Allen v. Boeing, reaffirming the court’s prior interpretation of the Class Action Fairness Act of 2005’s (CAFA’s) “single local event” exception, which it previously reviewed in Nevada v. Bank of America Corp.
CAFA expands federal jurisdiction over certain mass actions that fall within its purview. CAFA defines such actions as any civil action in which “monetary relief claims of 100 or more persons are proposed to be tried jointly on the ground that the plaintiff’s claims involve common questions of law or fact.”1
CAFA, however, enumerates a number of exceptions which exclude an action from enjoying CAFA mass action jurisdiction and require remand to state court. Pursuant to the single local event exception, civil actions in which “all of the claims in the action arise from an event or occurrence in the State in which the action was filed, and that allegedly result in injuries in that State or States contiguous to that State” are excluded from CAFA’s mass action jurisdiction.2 In Allen, the Ninth Circuit was called upon to interpret the breadth of this exception. Continue reading