Class Action

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Despite claims from the plaintiffs’ bar that the Supreme Court’s decision in Spokeo Inc. v. Robins, 136 S. Ct. 1540 (2016), did not significantly change the landscape for class actions, courts continue to rely on Spokeo to dismiss claims that have no concrete injury beyond a statutory violation. In the last month, two more cases — including one federal circuit-level decision and one TCPA decision — were dismissed because the plaintiff was unable to demonstrate Article III standing under Spokeo. These cases demonstrate the important role that Spokeo-related arguments can play in stymying class actions.

In Nicklaw v. CitiMortgage, Inc., 2016 U.S. App. LEXIS 18206 (11th Cir. Oct. 6, 2016), the court held that the plaintiff lacked Article III standing to pursue a claim where the class action complaint alleged statutory violations and sought only statutory damages.  The only claim asserted by the plaintiff in Nicklaw was that the plaintiff failed to comply with a New York statute requiring it to sign and record a certificate of discharge within 30 days of a mortgage satisfaction. Based on the defendant’s alleged failure to do so,  the plaintiff sought monetary damages. The court held that plaintiff alleged “neither a harm nor a material risk of harm that the district court could remedy.” This opinion marked the first time that the Eleventh Circuit had applied the Spokeo framework and will undoubtedly have a ripple effect on district court cases within the circuit (and beyond) when defendants make similar arguments. Although Nicklaw is not a media or privacy case, it certainly provides a roadmap for all manner of class actions.
Continue Reading Spokeo as a Class-Action Silver Bullet? Two More Dismissals Based on Lack of Concrete Harm

A relatively new breed of data breach class action involves financial institutions suing merchants for expenses associated with credit card data breaches. Although merchants may not have contractual privity with the card issuers (and instead may have contractual privity with the credit card brands or payment processors), the financial institutions in these cases claim that the retailers should still compensate the financial institutions for costs associated with fraudulent charges and reissuance of credit cards as a result of a data breach. In the most recent decision involving these sorts of claims, an Illinois federal judge found the financial institutions’ claims against the Shnucks grocery store chain too vague to survive Rule 12 dismissal. See Cmty. Bank of Trenton v. Schnuck Mkts., 2016 U.S. Dist. LEXIS 133482 (S.D. Ill. Sept. 28, 2016). The court reasoned that although “the parties are charting relatively new territory in the data breach context by presenting a case between financial institutions and a merchant (as opposed to customers and a merchant), . . . the Court notes that the generality made it difficult to assess the plausibility of such claims.” Id. at *8-9.
Continue Reading Schnucks Shakes Card Issuer Data Breach Class Action, For Now

For years, we have been documenting the rise in wage/hour class action lawsuits and precautionary steps your organization may take to mitigate the risks and liability inherent in those claims. And, while wage/hour lawsuits continue to be filed at record rates, the plaintiffs’ bar is now flirting with a new type of class action lawsuit which poses a threat to any employer that operates a website. These lawsuits allege that company websites are inaccessible to the blind and/or visually impaired and therefore violate Title III of the Americans with Disabilities Act (ADA) and various states’ laws.

Background

Title III prohibits discrimination against individuals “on the basis of disability in the full and equal enjoyment of the goods, services, facilities, privileges, advantages, or accommodations of any place of public accommodation.” Title III requires “reasonable modification” of “policies, practices, and procedures” and the provision of “auxiliary aids” to ensure effective communication with the disabled. A flurry of recent lawsuits and attorney demand letters allege that websites violate Title III because they are not accessible to the visually impaired; for example, that they are not compatible with screen-reading software that describes images on the website, that they require the use of a mouse instead of making all functionality available from a keyboard, or that video content does not contain an audio description.

Because these lawsuits are relatively new, courts are split as to whether Title III applies only to websites that have a sufficient nexus to a company’s physical locations, or whether it applies to websites in and of themselves. Most of these cases are in the early stages of litigation and, so far, provide little substantive guidance on what steps, if any, businesses must take to make their websites compliant with Title III.
Continue Reading Is Your Website Accessible to the Blind and Visually Impaired? Plaintiffs’ Firms and the Department of Justice Are Taking Notice

I. Introduction

On January 20, 2016, the U.S. Supreme Court issued its highly anticipated opinion in Campbell-Ewald Co. v. Gomez, ruling that an unaccepted settlement offer, or offer of judgment, without actual payment and/or entry of judgment does not moot a named plaintiff’s class action claims.  In essence, the ruling prevents defendants from offering (but not paying) complete individual relief and then arguing for dismissal of a putative class action based on satisfaction of the class representative’s individual claim.  Although this ruling was a loss for class action defendant Campbell-Ewald Co. (“Campbell”), the opinion potentially validates a powerful tool for class action defendants going forward because it suggests that actual payment of complete individual relief and/or entry of judgment for that individual relief, rather than a mere offer, is sufficient to fully satisfy a class representative’s individual claim, resulting in the entry of judgment based on the absence of Article III standing and in dismissal of the class claims without prejudice.
Continue Reading Defense Implications of Campbell-Ewald: The Sky is NOT Falling

On July 20, 2015, the Seventh Circuit reinstated a data breach class action in Remijas v. Neiman Marcus Group, LLC, No. 14-3122, after a 2013 malware attack on Neiman Marcus’s computer systems that resulted in the theft of customers’ credit and debit card information. The plaintiffs argued that they had constitutional standing to pursue their claims against the retailer based on an alleged increased risk of future fraudulent charges and greater susceptibility to identity theft. This decision is troubling and could have a potentially significant and wide-ranging impact on pending and future class actions brought in the wake of similar data breaches. In fact, plaintiffs’ lawyers already are citing the decision in other data breach class actions facing Rule 12 standing challenges. See, e.g., In re Barnes & Noble Pin Pad Litigation, No. 12-08617, U.S. Northern District of Illinois.
Continue Reading Seventh Circuit Resurrects Data Breach Class Action and Stymies Standing Challenge

The U.S. Supreme Court today granted certiorari to an advertising partner of the U.S. Navy in a case involving “mooting” and the Telephone Consumer Protection Act (TCPA).  See Campbell-Ewald Company v. Gomez, 14-857. As we indicated in a previous Media Privacy and Risk Report post, this appeal could resolve a circuit split on whether, and so, under what circumstances, a putative class action defendant may offer full and complete relief to a class representative and eliminate the case or controversy as to that individual plaintiff.
Continue Reading U.S. Supreme Court Grants Certiorari in TCPA “Mooting” Appeal

As we have written about in this space before, the ultimate result of the circuit split on the issue commonly known as “mooting” will be critical to the future of class actions under statutes such as the Telephone Consumer Protection Act, 47 U.S.C. § 227 (“TCPA”). In Genesis Healthcare v. Symczyk, 133 S. Ct. 1523 (2013), the Supreme Court gave a glimpse of how it could rule on this issue, holding that “[i]f an intervening circumstance deprives the plaintiff of a ‘personal stake in the outcome of the lawsuit,’ at any point during litigation, the action can no longer proceed and must be dismissed as moot.” Id. at 1528. But some lower courts (relying in part on Justice Kagan’s dissent) have held that this standard does not necessarily apply in the class action context because the Genesis case was a collective action under the Fair Labor Standards Act, 29 U.S.C. § 216, not a class action under Rule 23. Setting aside whether this is a meaningful distinction—we have argued in various courts that it is not—it appears the Supreme Court will have an opportunity this term to directly address the issue of mooting in the class action context.
Continue Reading Will Supreme Court Address “Mooting” in Gomez v. Campbell-Ewald?

In yet another victory for advocates of what is colloquially referred to as “mooting,” U.S. District Judge Sandra J. Feuerstein recently rejected the arguments of TCPA plaintiffs’ lawyers Aytan Bellin (based in New York), Brian Wanca (based in Illinois) and Max Margulis (based in Missouri) and dismissed a TCPA putative class action because the putative class representative had been offered full and complete relief and thus no longer had Article III standing under the U.S. Constitution. See Lary v. Rexall Sundown, Inc., 2015 U.S. Dist. LEXIS 16733 (E.D.N.Y. Feb. 10, 2015).   According to Judge Feuerstein:

This Court finds that the question is one which should be resolved in favor of defendants unless and until Congress provides legislation to clearly state a procedure which (a) denies the defendants the opportunity to make a Rule 68 offer for a stated period; or (b) requires plaintiffs to move for class certification within a specified period. Based upon the foregoing and the fact that plaintiff’s motion for class certification has not been determined, CCG’s pre-certification offer, which provides all the relief plaintiff could recover, moots plaintiff’s claim.

Id. at *40.

Continue Reading Mooting Victories Pile Up—TCPA Dismissal in E.D.N.Y.

By now, most attorneys who handle class action litigation are familiar with the defense strategy commonly known as “mooting.”(This terminology is, frankly, imprecise, but we will save the semantics discussion for another day.) The cautious plaintiffs’ attorney will file a cursory motion for class certification with the complaint to minimize the likelihood of mooting.The defense attorney will serve an offer of judgment for full relief as soon as possible and immediately move to dismiss. But in light of conflicting circuit court decisions, the legal landscape is unclear on the ultimate effect of these maneuvers. Luckily, we’re here to help.
Continue Reading Four Approaches and Counting: The Circuit Split on “Mooting”

In a decision subject to surprisingly little commentary by TCPA pundits, the Illinois Court of Appeals handed a significant victory to TCPA defense lawyers in November 2014 on the issue of “mooting” a putative class representative’s individual claim. See Ballard RN Ctr., Inc. v. Kohll’s Pharm. & Homecare, Inc., 2014 IL App. (1st) 131543 (2014). Despite the fact that the plaintiff had filed a motion for class certification before an offer of full and complete individual relief by the defendant, the court found that the plaintiff’s individual TCPA claim was still “mooted” because the motion for class certification that the plaintiff had filed was cursory and devoid of facts.  Id. at P59.

According to the court, “[I]f a putative class action plaintiff could circumvent the holding of Barber merely by filing a contentless ‘shell’ motion for class certification contemporaneously with its complaint, then it would effectively eviscerate the Barber decision.” Id. (referring to Barber v. American Airlines, Inc., 241 Ill. 2d 450, 455 (2011) (holding that class representative’s claim is moot when defendant offers full and complete relief before filing of motion for class certification)).
Continue Reading Cursory Class Certification Motion Not Enough in Illinois?