Games People Play: Supreme Court Can Put a Stop to an Obvious CAFA Workaround

Featured Expert Contributor, Litigation Strategies

Joe G. Hollingsworth, a Partner at Hollingsworth LLP, with Katharine R. Latimer, a Partner at the firm and a member of WLF’s Legal Policy Advisory Board.

A printer-friendly PDF version of this commentary is available here.

Earlier this fall, the Supreme Court took up the Class Action Fairness Act of 2005 (CAFA) when it granted certiorari in Home Depot U.S.A., Inc. v. Jackson, 880 F.3d 165 (4th Cir. 2018).  We’re hoping for a slap-down because the Home Depot decision and its ilk improperly deny an entire sub-category of defendants protection from abusive state court class actions.

CAFA is an important statutory safeguard that Congress enacted to rectify serious class action abuses in state courts.  See CAFA, S. Rep. No. 109-14, at 13 (2005).  Congress expressly found that ungainly and abusive interstate class actions “(A) harmed class members with legitimate claims and defendants that have acted responsibly; (B) adversely affected interstate commerce; and (C) undermined public respect for our judicial system.”  CAFA § 2(a)(2) (codified at 28 U.S.C. § 1711 notes). Continue reading “Games People Play: Supreme Court Can Put a Stop to an Obvious CAFA Workaround”

Unreasonable Second Circuit Decision Sets Daunting Precedent for Packaged-Food Makers

cheez itA decision this month from the U.S. Court of Appeals for the Second Circuit reunites us with an old friend, The Reasonable Consumer. As we’ve discussed in previous posts here and in Washington Legal Foundation publications, The Reasonable Consumer has figured prominently in consumer class-action lawsuits that allege harm from supposedly deceptive or misleading food labels. That’s because the question at issue in the Second Circuit case, Mantikas v. Kellogg Company, is a common one in Food Court litigation: would a reasonable consumer interpret the relevant information on the food package the same way the plaintiff claims to have read it, and be similarly misled? Continue reading “Unreasonable Second Circuit Decision Sets Daunting Precedent for Packaged-Food Makers”

In 2019, Federal Appellate Courts Will Address Impact of SCOTUS Jurisdiction Ruling on Class Actions

DC CircuitSince the U.S. Supreme Court’s landmark decision in Bristol-Myers Squibb v. Superior Court (BMS), litigants and courts have struggled to determine its impact on future cases.  The Court held in BMS that courts may not exercise jurisdiction over nonresident defendants with respect to nonresident plaintiffs’ claims arising from conduct that occurred outside the State. This limits defendants’ exposure to nationwide mass-tort actions to States where they are “at home” and subject to that forum’s general personal jurisdiction.

Class actions are now at the forefront of the fight to define BMS. To date, no federal circuit court has considered whether BMS applies equally to class actions as it does to mass-tort actions. But several circuit courts will have the opportunity to resolve this question in 2019, quite possibly with differing results. A WLF Working Paper published in March 2018 framed the question these courts will have to answer as follows: If joinder of plaintiffs does not establish specific jurisdiction over the defendant for nonresident plaintiffs’ claims (as in BMS), can the result be any different when the nonresident plaintiffs are instead absent members of a class? Continue reading “In 2019, Federal Appellate Courts Will Address Impact of SCOTUS Jurisdiction Ruling on Class Actions”

Kimberly-Clark Seeks Supreme Court Review in “Flushable” Wipes Case

roibal_lucia_webGuest Commentary

By Lucía Roibal, an Associate with Morrison & Foerster LLP in the firm’s San Francisco, CA office. This commentary is reposted with permission, originally appearing on November 30, 2018 in the firm’s Class Dismissed  blog.

On September 6, 2018, Kimberly-Clark and affiliates filed a petition for writ of certiorari in Kimberly-Clark, et al. v. Davidson, No. 18-304, following a decision in the Ninth Circuit denying Kimberly-Clark’s motion to dismiss.  As noted in previous posts (here and here), the Ninth Circuit had resolved a split among district courts in the circuit and held that a previously deceived consumer may have standing to seek an injunction against false advertising or labeling if he or she sufficiently alleges intent to repurchase the product in the future.  In Kimberly-Clark’s petition, the companies ask the Supreme Court to resolve the issue of whether a consumer, who after using a product and determining that a representation concerning that product is allegedly misleading, can plausibly allege a “real and immediate threat” that she will be deceived by the same representation in the future so as to establish standing to seek an injunction. Continue reading “Kimberly-Clark Seeks Supreme Court Review in “Flushable” Wipes Case”

What Did We Learn From the Supreme Court Oral Argument in Apple v. Pepper?

supreme courtWe’ve blogged previously about the Supreme Court’s biggest antitrust case of the October Term 2018, Apple v. Pepper. The case asks the Court to decide whether iPhone users who buy apps from Apple’s App Store may sue Apple for alleged antitrust violations, or whether only third-party app developers may bring such claims. The answer turns on whether and how the Court applies the rule announced in Illinois Brick Co. v. Illinois, which holds that only the direct purchaser of a good or service may sue an allegedly abusive monopolist for damages.

The Court heard oral argument in the case on Monday morning. Apple is represented by Daniel Wall of Latham & Watkins. He argues that the Illinois Brick rule is dispositive here for Apple because the plaintiffs’ antitrust claim hinges on precisely the sort of “pass through” theory of harm that Illinois Brick prohibits. Continue reading “What Did We Learn From the Supreme Court Oral Argument in Apple v. Pepper?”

Demands for On-Label Disclosure of Possible Supply-Chain Abuses Fail in Ninth Circuit

GLFoodCourtA little over two years ago on this site, we discussed a new strain of food-labeling class action lawsuits quite unlike the run-of-the-mill “Food Court” litigation. Instead of complaining that consumers had been misled by a food label’s use of a term such as “natural,” these suits claimed harm from a company’s failure to disclose possible human-rights abuses in its supply chain. Products such as animal food and processed chocolate, which include ingredients from foreign locations where forced child labor is prevalent, have been popular targets.

As we noted in the 2016 post, these supply-chain suits found far less success in California federal district courts than have other food-labeling claims. Undeterred by the losses, the plaintiffs’ lawyers appealed to the U.S. Court of Appeals for the Ninth Circuit, forcing the victorious defendants to invest millions more in attorneys’ fees. In a series of opinions issued over the past two months, the appeals court has uniformly affirmed the suits’ dismissals. Continue reading “Demands for On-Label Disclosure of Possible Supply-Chain Abuses Fail in Ninth Circuit”

Trio of Soda Cases Test the Limits of Attorney-Driven Class Action Lawsuits

marguliesGuest Commentary

By Jeffrey B. Margulies, Partner-in-Charge of the Los Angeles, CA office of Norton Rose Fulbright US LLP.

The approach of many plaintiff consumer class-action lawyers is not difficult to discern: Concoct a factual theory to support a claim under California’s consumer-friendly laws that survives a motion to dismiss and a motion for class certification. Even if the liability case is highly improbable, the economics of the exposure to a certified class of consumers will compel all but the bravest of defendants to settle, handsomely rewarding the plaintiffs’ lawyers with fees. District courts in the Northern District of California, home to a surfeit of cases over alleged mislabeling of foods and beverages, have allowed many dubious factual claims to proceed.

Yet, even as (or perhaps because) the Ninth Circuit has removed obstacles to consumer class actions such as ascertainability (Briseno v. ConAgra Foods, Inc.) and standing to pursue injunctive relief (Davidson v. Kimberly-Clark Corporation), a trio of recent district court decisions over sodas appears to signal either that the Food Court is growing less tolerant of factually implausible claims, or that the plaintiff’s bar has gone a bridge too far. Continue reading “Trio of Soda Cases Test the Limits of Attorney-Driven Class Action Lawsuits”