Class Action Procedure

GavelOn April 24, 2019, the U.S. Supreme Court issued an important decision touching a number of hot button issues and litigation threats facing American businesses — including class actions, arbitration agreements and data privacy.

The case, Lamps Plus, Inc. v. Varela, 17-988, 2019 WL 1780275 (U.S. Apr. 24, 2019), stemmed from a data breach in which a hacker posing as a company official “tricked” a Lamps Plus employee into disclosing the tax information of approximately 1,300 workers.  Among those 1,300 workers was Frank Varela, the named plaintiff.  Id. at *2.  Following the data breach, Mr. Varela became the victim of identity theft when a fraudulent federal income tax return was filed in his name. 
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Clients regularly ask: If we win this putative class action, can the opposition just file another one on behalf of another as-yet-unidentified putative class representative?  Until June 11, the answer was “Maybe?”  Now, the answer is clearly no.

In a unanimous decision, the Supreme Court (in reversing the Ninth Circuit) clarified