MVA Litigation Blog

A defendant by any other name does not smell as sweet when it comes to removing class actions from state court to federal court, even under the Class Action Fairness Act of 2005 (“CAFA”). Congress passed CAFA to address perceived abuses in class action litigation and to provide an avenue for defendants to remove class actions filed in state courts to the more neutral ground of the federal court system. But, who can avail themselves of the removal authority provided by CAFA? The U.S. Supreme Court recently held in Home Depot U.S.A. , Inc. v. Jackson, 587 U. S. ____ (2019) that only the ...

We have been following the Frank v. Gaos, 586 U. S. __ (2019) class action case, which presented an opportunity for the U.S. Supreme Court to determine the limits on the use of the cy pres doctrine in the context of class action settlements to distribute damages paid by a defendant company to entities other than the plaintiff class. On March 20, 2019, the U.S. Supreme Court halted Gaos in its tracks, vacating the Ninth Circuit’s decision approving the contested cy pres settlement and remanding the case for further proceedings to determine whether any named plaintiffs had ...

What is the value of the class action mechanism if no redress is provided to plaintiffs at all? Is the class action about providing a remedy to plaintiffs, is it just about getting the defendant company to pay something to someone…or has it evolved simply into a mechanism for plaintiffs’ attorneys to collect fees? These are several of the questions raised by Frank v. Gaos, (No. 17-961), which presents the U.S. Supreme Court with an extreme case of the use of the cy pres doctrine in the context of class action cases. The High Court is faced with a cy pres-only settlement in which the ...

We have been talking about Frank v. Gaos, (No. 17-961), since the U.S. Supreme Court decided to tackle the extreme case of the use of the cy pres doctrine in the context of class action cases. The settlement is a cy pres-only agreement which called for distribution of all funds paid by the defendant directly to charitable organizations and plaintiffs’ attorneys (in the form of attorneys’ fees) and there was no attempt at all to distribute any funds to the plaintiff class. The Supreme Court oral argument was held in Gaos on October 31st and the Justices probed several aspects of the heart ...

There has been a lot of discussion surrounding class action litigation over the course of the last several years. The U.S. Supreme Court has tackled a variety of issues ranging from the use of class action waivers in arbitration agreements to whether class action plaintiffs can base claims solely on statutory damages when they have suffered no concrete injury themselves. The use of class waivers in arbitration agreements, in particular, has been front and center with the Consumer Financial Protection Bureau’s (CFPB) arbitration study declaring that class waivers were ...

It is easy to overgeneralize the outcome of a legal dispute as pro-plaintiff or pro-defendant to paint a picture of which way a court is leaning and who is finding favor. This week, the U.S. Supreme Court issued its second class action decision in as many months that is favorable for defendant companies. No doubt this will stir grumblings about pro-business interests being elevated above the individual. But, at its heart, the Supreme Court’s decision in China Agritech, Inc. v. Resh, 584 U.S. ___ (2018) simply holds class actions plaintiffs to the bounds of the law as proscribed in the ...

The viability of class waivers in employment agreements has been a closely watched battle in the courts since the National Labor Relations Board (NLRB) ruled in D. R. Horton, Inc. and Michael Cuda, Case 12–CA–25764, 357 NLRB No. 184 (2012) that class waivers in individual employment agreements violate the National Labor Relations Act (NLRA) by preventing employees from engaging in concerted action related to their employment. Faced with an Executive Branch that was “speaki[ng] from both sides of its mouth” on this issue and a Congress that recently overturned another ...

In 2017, federal securities class actions were filed at a rapid clip, averaging more than one per day - a level not seen in nearly 20 years according to survey data. It was the third year of growth and a 44% increase over 2016. Only a small subset (25 or 5.7%) of the record-setting 432 federal securities class actions filed last year were claims filed under Section 11 of the federal Securities Act of 1933 (1933 Act), which is at the heart of the U.S. Supreme Court’s decision in Cyan Inc. v. Beaver County Employees Retirement Fund. The 1933 Act requires companies offering securities to the ...

This year important questions regarding the viability of class action waivers in arbitration agreements have moved close to resolution. In July, the Consumer Financial Protection Bureau (CFPB) issued a long-awaited final rule that prohibited class waivers in arbitration agreements related to a broad range of financial products. And employees and the National Labor Relations Board (NLRB) have continued to push against the enforceability of class waivers in the context of individual employment agreements, driving the issue to the U.S. Supreme Court for review. On November 1 ...

U.S. businesses have the good fortune to be on the receiving end of a favorable U.S. Senate vote nullifying the hotly-contested Consumer Financial Protection Bureau (CFPB) rule banning class action waivers in certain consumer finance arbitration agreements. The rule, issued by the agency in July 2017, took several years to finalize and was criticized for being based on a flawed data, the result of the agency overreaching, and more beneficial to class action plaintiffs’ attorneys than the consumers it was supposed to protect. Our previous posts discuss in detail ...

The Consumer Financial Protection Bureau (CFPB) recently announced the release of its final rule prohibiting the use of class action waivers in certain consumer finance arbitration agreements. The rule has been several years in the making, and has been widely followed and hotly contested. The final rule was announced on July 10, 2017 and published in the Federal Register on July 19, 2017. Accordingly, it is set to take effect on September 18, 2017 (60 days following publication) and to apply to contracts entered into on or after March 19, 2018 (180 days after the effective date ...

The Consumer Financial Protection Bureau (CFPB) recently announced the release of its final rule that prohibits the use of class action waivers in certain consumer finance arbitration agreements. This rule banning class waivers has been several years in the making, and has been widely followed and hotly contested. The CFPB reports that it received more than 110,000 comments on its proposed rule during the comment period, which raised concerns regarding “whether the effects of arbitration agreements are salient to consumers, whether arbitration has proved to be a fair and ...

COMPANIES DEFENDING CLASS ACTIONS IN NC HAVE NEW RIGHT TO APPEAL CLASS CERTIFICATION (June 4, 2017): The North Carolina legislature recently passed H.B. 239, over Gubernatorial veto, which gives company defendants the right to appeal trial court decisions allowing class certification directly to the North Carolina Supreme Court, securing a guaranteed avenue for early review of class action cases that was not available to companies in the North Carolina courts before and minimizing delays and costs associated with the two-step appellate process. Read more.

The North Carolina legislature recently passed H.B. 239, over Gubernatorial veto, which gives company defendants the right to appeal trial court decisions allowing class certification directly to the North Carolina Supreme Court. This law parts from North Carolina case law precedent and eliminates the need for the NC Supreme Court to invoke its supervisory authority to review a grant of class certification prior to resolution of a trial, as the court recently did in Fisher v. Flue-Cured Tobacco Coop. Stabilization Corp., 794 S.E.2d 699, 2016 N.C. LEXIS 1120, (NC Dec. 21, 2016 ...

As class action litigation has continued to proliferate, we have seen efforts to rein in the perceived abuses of the system on multiple fronts. Over a decade ago, Congress passed the Class Action Fairness Act of 2005 (CAFA) to provide an avenue for defendants to remove class actions filed in state courts to the more neutral ground of the federal court system. In the last several years, the courts have been called on repeatedly to define the contours of CAFA and the Judicial Conference Advisory Committee on Civil Rules (Advisory Committee) initiated proposed amendments to Federal Rule of ...

In the years following the U.S. Supreme Court’s AT&T Mobility v. Concepcion decision, more and more courts enforced class waivers in arbitration agreements based on the commands of the Federal Arbitration Act (FAA). The National Labor Relations Board (NLRB) parted with the post-Concepcion trend to enforce class waivers in D. R. Horton, Inc. and Michael Cuda, Case 12–CA–25764, 357 NLRB No. 184 (Jan. 3, 2012), however, and held that such waivers in individual employment agreements violate the National Labor Relations Act (NLRA) by prohibiting employees from acting in ...

Federal class action jurisprudence has been evolving rapidly over the course of the last 5-6 years, with several major U.S. Supreme Court decisions defining and redefining many aspects of class litigation. With the first round of proposed amendments in over a decade, the civil rule governing federal class litigation is set to follow suit. On August 12, 2016, the Judicial Conference Advisory Committee on Civil Rules (Advisory Committee) published proposed amendments to Federal Rule of Civil Procedure 23, which have been in the works since the 2011 formation of the Rule 23 ...

DEFEATED NC CLASS ACTION ULTIMATELY RESULTS IN VICTORY IN MAP ACT FIGHT AGAINST NCDOT (June 16, 2016): What began several years ago as a defeated attempt at a class action against the North Carolina Department of Transportation (NCDOT) ultimately resulted in a win plaintiff landowners in Kirby v. NCDOT (No. 56PA14-2). On June 10, 2016, the North Carolina Supreme Court held that the State’s restrictions placed on property owners under the Roadway Corridor Official Map Act (Map Act) constitute a taking of their property, requiring the state to compensate the landowners ...

What began several years ago as a defeated attempt at a class action against the North Carolina Department of Transportation (NCDOT) ultimately resulted in a win this month for plaintiff landowners in Kirby v. NCDOT (No. 56PA14-2). On June 10, 2016, the North Carolina Supreme Court held that the State's restrictions placed on property owners under the Roadway Corridor Official Map Act (Map Act) constitute a taking of their property, requiring the state to compensate the landowners appropriately. The case was brought originally as a putative class action on behalf of nearly 800 ...

On May 24, 2016, the Consumer Financial Protection Bureau’s (CFPB) long-anticipated Proposed Rule prohibiting the use of class action waivers in consumer finance arbitration agreements was published in the Federal Register and opened for public comment. The Proposed Rule has been expected following the CFPB’s previous study and statements regarding the impact that arbitration agreement class action waivers have on consumers. The CFPB took 370+ pages to explain and justify its proposal, which boils down to consumers of financial products do not typically pursue redress ...

Our goal is to serve as a cutting-edge resource for companies operating in an increasingly globalized and regulated business environment. Moore & Van Allen’s MLB Litigation Brief is a complement to our Litigation Blog’s in-depth individual treatment of critical issues emerging in federal, North Carolina state, and international litigation, as well as in arbitration, regulatory enforcement, and related business practices. MLB Litigation Brief hits the highlights of recent developments, streamlining access to critical information for our readers. Subscribe to the MVA ...

Class actions consume considerable company resources and can pose significant risk of exposure in the $ millions or $ billions. Therefore, it is critical for companies to prepare themselves – to know the trends in class action litigation and the tools available to minimize their exposure to class action liability. Over the last several weeks, the Supreme Court has heard arguments in three cases that have potential to further define the landscape of class action litigation: Campbell-Ewald Co. v. Gomez (No. 14-857), Spokeo, Inc. v. Robins (No. 13-1339), and Tyson Foods, Inc. v ...

Class actions consume considerable company resources and can pose significant risk of exposure in the $ millions or $ billions. Therefore, it is critical for companies to prepare themselves – to know the trends in class action litigation and the tools available to minimize their exposure to class action liability. Over the last several weeks, the Supreme Court has heard arguments in three cases that have potential to further define the landscape of class action litigation: Campbell-Ewald Co. v. Gomez (No. 14-857), Spokeo, Inc. v. Robins (No. 13-1339), and Tyson Foods, Inc. v ...

Class actions consume considerable company resources and can pose significant risk of exposure in the $ millions or $ billions. Therefore, it is critical for companies to prepare themselves – to know the trends in class action litigation and the tools available to minimize their exposure to class action liability. Over the last several weeks, the Supreme Court has heard arguments in three cases that have potential to further define the landscape of class action litigation: Campbell-Ewald Co. v. Gomez (No. 14-857), Spokeo, Inc. v. Robins (No. 13-1339), and Tyson Foods, Inc. v ...

The North Carolina Court of Appeals considered for the first time whether it is legal in a class action settlement agreement for one party to agree to pay the other’s attorneys' fees and expenses. The court concluded that it is legal, subject to appropriate judicial review. But, the court’s ruling leaves local North Carolina counsel shut out of the roughly $1 million attorneys’ fee award granted to New York lead counsel. The appellate court’s opinion in Ehrenhaus v. Baker, Nos. 14-1201, 14-1083 (N.C. Ct. App. Sept. 15, 2015)(“Ehrenhaus II”) reads much like a primer on ...

The Consumer Financial Protection Bureau (“CFPB”) made clear this week that, in its view, class action waivers should be on the chopping block in the agency’s upcoming rulemaking aimed at regulating the use of arbitration clauses in consumer financial agreements.  In an October 7, 2015 release, CFPB Director Cordray expressed the agency’s critical stance on companies’ use of arbitration agreements that prohibit consumers from participating in class actions, calling such clauses a “free pass to sidestep the courts and avoid accountability for wrongdoing,” while ...

Circumscribing an individual’s power to subject companies to class and collective actions has been on the forefront of corporate litigation for several years, particularly in light of the growing trend of class action filings.  An increasingly common scenario facing corporate defendants is the “no-injury class” in which many members of a certified class actually sustained no injury or damages, resulting in a much larger class to which damages might be awarded.  This issue has arisen in a variety of contexts, including product liability class actions like the Whirlpool moldy ...

A recent global survey of corporate counsel revealed that the increasing number of class actions filed is considered to be the most important litigation trend currently facing companies.  Over the last several years, companies and plaintiffs alike have been urging the U.S. Supreme Court to clarify the boundaries of class action litigation.  The High Court recently agreed to tackle an issue presented by Campbell-Ewald Co. v. Gomez (No. 14-857), which has the potential to arm companies with a method for shutting putative class actions down early.  The reality facing corporations is ...

Our goal is to serve as a cutting-edge resource for companies operating in an increasingly globalized and regulated business environment. Moore & Van Allen’s MLB Litigation Brief is a complement to our Litigation Blog’s in-depth individual treatment of critical issues emerging in federal, North Carolina state, and international litigation, as well as in arbitration, regulatory enforcement, and related business practices. MLB Litigation Brief hits the highlights of recent developments, streamlining access to critical information for our readers. Subscribe to the ...

On Tuesday, the Consumer Financial Protection Bureau ("CFPB") released its long-awaited "Arbitration Study: Report to Congress, pursuant to Dodd–Frank Wall Street Reform and Consumer Protection Act § 1028(a)", which presents the results of the agency’s study of the use of arbitration agreements in the context of consumer finance agreements for credit cards, checking accounts, payday and other small dollar loans, general purpose reloadable prepaid cards, private student loans, auto purchase loans, and mobile wireless agreements.  The 728-page study is extensive, to ...

Most of the cases that come to mind when you think “class action” consist of a large group of plaintiffs (hundreds or multiple thousands) seeking authorization to proceed as a class in one lawsuit against one or a handful of defendants. It is the rare case in which a large group of defendants are certified as a class in order to facilitate resolution of one plaintiffs’ claims against them. Rare though it may be, Federal Rule of Civil Procedure 23(a) does explicitly allow for the certification of defendant classes if the prerequisites for class certification (numerosity ...

In the wake of several favorable U.S. Supreme Court decisions, companies increasingly are using arbitration agreements to control their exposure to class action liability.  Although recent cases have reinforced the power of arbitration agreements, companies must tread carefully when crafting their arbitration contracts and related class waivers.  In conjunction with giving force to arbitration agreements, the Federal Arbitration Act (“FAA”) limits the federal courts’ ability to review and reverse arbitrator decisions construing those agreements.  The Supreme ...

The Class Action Fairness Act of 2005 (“CAFA”) has found its way to the steps of the U.S. Supreme Court several times in the last two years, as plaintiffs and defendants seek to define the parameters of the federal law enacted, in part, to rectify state and local court abuses of the class action process and demonstrated biases against out-of-state defendants.  CAFA provides that a defendant may remove a state class action to federal court if the matter in controversy exceeds $5,000,000, exclusive of interest and costs, and certain other criteria are met.  On December 15, the U.S ...

Class action settlements, certification of issues classes, and class notice requirements are among the topics that may be the subject of upcoming proposed amendments to Federal Rule of Civil Procedure 23. On the agenda for the October 30-31, 2014 Advisory Committee on Civil Rules meeting is a report from the Rule 23 Subcommittee, which was formed in 2011 to consider modifying the rule governing class actions for the first time since the 2001-2003 cycle of amendments. Since its formation, the Subcommittee has identified several issues that may necessitate changes to Rule 23 and is now ...

The Eleventh Circuit in Walthour v. Chipio Windshield Repair, LLC, No. 13-11309 (11th Cir. March 21, 2014) recently joined the Second, Fourth, Fifth, and Eighth Circuits in upholding class arbitration waivers in a Fair Labor Standards Act (“FLSA”) action.  Plaintiffs in Walthour argued that the statutory right to file a collective action under the FLSA cannot be waived, as it is a substantive right.  Plaintiffs pointed to the statute’s text, legislative history and purposes to support their position that the FLSA’s right to collective action trumps the Federal ...

On February 24, 2014, the U.S. Supreme Court denied certiorari in three “moldy” washing machine class actions, which presented questions regarding Fed. R. Civ. P. 23’s commonality and predominance requirements as clarified by Wal-­Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541 (2011) and Comcast Corp. v. Behrend, 133 S. Ct. 1426 (2013). In a previous post, we discussed in detail the Sixth Circuit’s rationale for upholding the trial court’s certification of a liability class in  Whirlpool Corp. v. Glazer, et al (No. 13-431), despite the fact that there were four different ...

            In our November, 2012 series, “Once Around the Dance Floor With a Public Injunction, the Vindication of State Rights and AT&T Mobility v. Concepcion,” we discussed the potential impact of the impending Ninth Circuit Court of Appeals en banc review of Kilgore v. Keybank Nat’l Ass’n, No. 3:08-CV-02958-THE (N.D.Cal.). (See posts here, here, and here). In the initial appellate review of Kilgore, a Ninth Circuit three-judge panel held that California’s Broughton-Cruz rule that prohibits the arbitration of public injunction claims was preempted by the Federal Arbitration ...

            The Fourth Circuit Court of Appeals recently issued a decision placing the AT&T Mobility, LLC v. Concepcion, 131 S.Ct. 1740 (2011) stamp of approval on class arbitration waivers in this Circuit.  In Muriithi v. Shuttle Express, Inc., No. 11-1445, 2013 U.S. App. LEXIS 6464 (4th Cir. Apr. 1, 2013), the Fourth Circuit took on several issues surrounding class arbitration waivers that have been the source of disagreement among lower courts since Concepcion.  The Shuttle Express plaintiff was a shuttle driver for defendant Shuttle Express, a company that provides transportation for ...

            The line-up of class action cases to be reviewed and ruled upon by the U.S. Supreme Court this year is stacked with heavy hitters.  On the same day that the Court issued its opinion in the Amgen securities fraud class action case (covered in last week's post), the Court heard oral arguments in American Express Co., et al. v. Italian Colors Restaurant, et al., (S.Ct. No. 12-133).  Amex is the first Supreme Court class arbitration waiver case that explores the impact of AT&T Mobility LLC v. Concepcion, 131 S.Ct. 1740 (2011) on federal claims.  The putative class plaintiffs are corporations and a ...