consumer class action litigation: regulatory and case

Consumer Class Action Litigation:

Regulatory and Case Developments Leveraging the Latest Decisions on Certification, Causation, Class Notice and More

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WEDNESDAY, NOVEMBER 28, 2012

Presenting a live 90-minute webinar with interactive Q&A

Barry Goheen, Partner, King & Spalding, Atlanta

David S. Almeida, Partner, Sedgwick, Chicago

Mark P. Chalos, Partner, Lieff Cabraser Heimann & Bernstein, Nashville, Tenn.

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Concepcion Update

David Almeida, Partner, Sedgwick LLP, Chicago

AT&T Mobility LLC v. Concepcion 131 S. Ct. 1740 (2011)

Wireless service contract included class arbitration waiver

Lower courts found arbitration agreement unconscionable

Applied California‟s Discover Bank test: class action waivers

are unconscionable if (a) part of an adhesion contract, (b)

damages are predictably small, and (c) the consumer alleges

a scheme to cheat consumers.

Supreme Court held that FAA preempts Discover Bank test

It is impermissible to create categorical judicial and legal

exceptions that trump parties‟ contractual agreements to

arbitrate 6

Post-Concepcion Decisions Citing decisions: analysis by federal courts

7

Post-Concepcion Decisions Citing decisions: analysis by date (federal and state)

8

Recent Post-Concepcion Decisions

CompuCredit Corp. v. Greenwood, 132 S.Ct. 665

(2012) - Test case for theory that other federal statutes “override”

the FAA by providing an unwaivable right to bring a class

action despite an arbitration agreement

- Issue: whether the CROA “precludes enforcement of an

arbitration agreement in a lawsuit alleging violations of

that Act”

- Held: Because the CROA is silent on whether claims

under the Act can proceed in an arbitrable forum, the FAA

requires the arbitration agreement to be enforced

according to its terms

9


Marmet Health Care Ctr., Inc. v. Brown, 132 S. Ct.

1201 (2012)

Put to rest speculation that Concepcion‟s preemption

holding did not apply in state court

“As this Court reaffirmed last Term, „[w]hen state law

prohibits outright the arbitration of a particular type of

claim, the analysis is straightforward: The conflicting

rule is displaced by the FAA‟ . . . . That rule resolves

these cases.” (quoting Concepcion)

10


In re Amer. Express Merchants' Litigation, 667 F.3d

204 (2nd Cir. 2012)

Concepcion‟s reasoning inapplicable

A class action waiver is unenforceable when it

precludes plaintiffs from vindicating their federal

statutory rights

Cost of hiring expert needed to prove claims far

exceeds potential award for individual class

member

Thus, individual arbitration would deprive

plaintiffs of antitrust laws‟ provisions

11


In re Zappos.com, Inc., Customer Data Security Breach

Litigation (D. Nev. Sep. 27, 2012)

Defendants moved to compel arbitration based on

provision in its “Terms of Use”

Agreement to arbitrate all disputes “relating in any

way to your visit to the Site or to the products you

purchase through the Site”

Class arbitration waiver

Court denied motion, finding arbitration agreement

unenforceable on contract law grounds

“the advent of the Internet has not changed the

basic requirements of a contract . . .” 12



Litigation (D. Nev. Sep. 27, 2012) (cont.)

Zappos Terms of Use constituted a “browsewrap”

agreement

Required no affirmative action by website user to

agree to terms

“Without direct evidence that Plaintiffs click on the

Terms of Use, we cannot conclude that Plaintiffs

ever viewed, let alone manifested assent to, the

Terms of Use.”

14



Litigation (D. Nev. Sep. 27, 2012) (cont.)

Zappos Terms of Use constituted an illusory contract

Zappos “reserved the right to change . . . these

terms and conditions at any time”

“In effect, the agreement allows Zappos to hold its

customers and users to the promise to arbitrate

while reserving it own escape hatch.”

15

FRCP 68 OFFER OF JUDGMENT

•FRCP 68(a): At least 14 days before the date set for trial, a

party defending against a claim may serve on an opposing party an

offer to allow judgment on specified terms, with the costs then

accrued. If, within 14 days after being served, the opposing party

serves written notice accepting the offer, either party may then file

the offer and notice of acceptance plus proof of service. The clerk

must then enter judgment.

• Mootness Issue: As a general matter, an offer of judgment

that fully satisfies the plaintiff‟s demand for relief moots the case

and deprives the court of subject matter jurisdiction, as no case or

controversy exists anymore. See, e.g., Holstein v. City of Chicago,

29 F.3d 1145 (7th Cir. 1994).

16

RULE 68 OFFERS AND CLASS ACTIONS

• The Issue: Plaintiff files class action complaint. Before class is

certified, defendant makes lone plaintiff a Rule 68 offer that fully

satisfies plaintiff‟s prayer for relief. Plaintiff either rejects or doesn‟t

respond to offer during 14-day window. Defendant then files a

motion to dismiss for lack of subject-matter jurisdiction, on the

grounds that the case is moot and plaintiff lacks Article III standing

to proceed in federal court.

• No Supreme Court Case Directly on Point: In Sosna v.

Iowa, 419 U.S. 393 (1975), the Burger Court held that once a class

has been certified, the subsequent mooting of the individual

plaintiff‟s claim does not moot the class action. Although the High

Court has never addressed the issue described above, several

federal Courts of Appeal have adjudicated this issue head on…

17

RULE 68 AND THE “PICK OFF” ISSUE IN CLASS ACTION CASES

• Courts Don’t Look Favorably upon Rule 68 Offers in

Putative Class Actions: Four Courts of Appeal have held that,

absent undue delay in the filing of a motion for class certification, a

defendant‟s Rule 68 offer made prior to the named plaintiff‟s filing of such

motion does not moot the class action. Instead, the class certification

motion “relates back” to the date of filing of the class complaint, so the

Rule 68 offer does not moot the entire controversy.

• Third Circuit: Weiss v. Regal Collections, 385 F.3d 337 (3d Cir. 2004).

• Fifth Circuit: Sandoz v. Cingular Wireless, LLC, 553 F.3d 913 (5th Cir. 2008).

• Ninth Circuit: Pitts v. Terrible Herbst, Inc., 653 F.3d 1081 (9th Cir. 2011).

•Tenth Circuit: Lucero v. Bureau of Collection Recovery, Inc., 639 F.3d 1239

(10th Cir. 2011).

•Main Rationale of these Circuits: Premised on the notion that it is

“unfair” to moot a putative class action by “picking off” an individual’s claim prior to

the deadline for filing a motion for class certification. None of these decisions,

however, addressed the Article III mootness issues. 18

RULE 68 OFFER V. OFFER OF SETTLEMENT

• Key Distinctions: Rule 68 offers are made pursuant to the Federal

Rules, are valid for 14 days, and mandate the Court‟s entry of judgment

against the defendant; Mere settlement offers of full relief, however, are

governed solely by contract law and do not require the Court to enter a

judgment.

• Circuit Split: Seventh Circuit vs. Eleventh Circuit

•Damasco v. Clearwire Corp., 662 F.3d 891 (7th Cir. 2011): Held, that

defendant‟s unilateral settlement offer of full statutory damages, which was

made pursuant to state law and not Rule 68, moots the individual plaintiff‟s case

and requires dismissal of the action, even though plaintiff filed a class action

complaint and hadn‟t had the opportunity to move for class certification.

•Zinni v. ER Solutions, Inc., 692 F.3d 1162 (11th Cir. 2012): Held, that

settlement offers for full amount of statutory damages did not moot class claims,

as defendant did not offer to have judgment entered against it, thus making the

offer deficient. 19

GENESIS HEALTHCARE CORP. V. SYMCZYK

• Issue Before SCOTUS: Whether a case becomes moot, and thus beyond

the judicial power of Article III, when the lone plaintiff receives an offer from the

defendant to satisfy all of the plaintiff‟s claims?

• Rule 68 Offer Made to Moot Plaintiff’s FLSA Action: The plaintiff in

this action sought relief under the Fair Labor Standards Act, 29 U.S.C. § 216(b),

by initiating a collective action against her employer. Defendants filed an answer

and served plaintiff with a Rule 68 offer that provided for the maximum relief

available on plaintiff‟s claims. Plaintiff didn‟t respond to the offer, and defendants

filed a Rule 12(b)(1) motion to dismiss for lack of subject-matter jurisdiction.

• 3d Circuit’s Ruling: Reversed the district court and held that the Rule 68

offer did not moot the FLSA collective action.

• SCOTUS Ruling Expected by June 2013: Symczyk is a FLSA action, not

a Rule 23 class action. Thus, it is possible that the Court could limit its holding to

FLSA actions only. We‟ll know soon enough. 20

CONSUMER CLASS ACTION LITIGATION:

REGULATORY AND CASE

DEVELOPMENTS

Barry Goheen

KING & SPALDING LLP

1180 Peachtree Street, N.E.

Atlanta, GA 30309-3521

(404) 572-4600

[email protected]

November 28, 2012

22

Wal-Mart Stores, Inc. v. Dukes

I. OVERVIEW

• Putative class of 1.5 million female current and former employees

of the nation‟s largest retailer alleged that the company

discriminated against them on the basis of sex by denying them

equal pay or promotions, in violation of Title VII. 131 S. Ct. 2541,

2547 (2011).

• Specifically, the plaintiffs alleged that Wal-Mart‟s policy of

affording discretion over pay and promotions to local managers

results in an unlawful disparate impact on female employees. Id.

at 2548.

• The plaintiffs sought injunctive and declarative relief, as well as

punitive damages and back pay. Id.

23


II. HOLDING

A. Commonality

• Majority opinion focused on the commonality requirement of FRCP 23(a)(2).

Id. at 2550-51. This prerequisite demands more than just mere common

questions; rather, the class proceeding must have the capacity to raise

common answers apt to drive the resolution of the litigation. Id. at 2551.

• In this case, the Court held “it will be impossible to say that examination of all

the class members‟ claims for relief will produce a common answer to the

crucial question why was I disfavored.” Id. at 2553.

• The only true common thread in this case was Wal-Mart‟s policy of vesting its

local managers with discretion over pay and promotion, but the Court held that

“it is quite unbelievable that all managers would exercise their discretion in a

common way without some common direction.” Id. at 2554-55.

24


B. Rule 23(b)(2) And Money Damages

• Class was also improperly certified under FRCP 23(b)(2). At least

where (as in Dukes) monetary relief is not incidental to the injunctive or

declaratory relief sought, a class may not be certified under 23(b)(2).

Id. at 2557.

• Rule 23(b)(2) does not authorize class certification when each class

member would be entitled to an individualized award of monetary

damages. Id.

• Individualized monetary claims must receive the procedural protections

of FRCP 23(b)(3): Predominance of common questions, superiority of

the class proceeding, mandatory notice, and the right to opt out.

25


C. Other Issues

• To adequately determine whether the class meets the commonality

prerequisite, courts must sometimes look beyond the pleadings. This

rigorous analysis may sometimes overlap with the merits of plaintiff‟s

underlying claim. Id. at 2551.

• “Trial by Formula”: “Because the Rules Enabling Act forbids

interpreting rule 23 to „abridge, enlarge or modify any substantive right,‟

28 U.S.C.

2072(b), … a class cannot be certified on the premise that

Wal-Mart will not be entitled to litigate its statutory defenses to

individual claims.” Id. at 2561.

26


D. Update

• 23(a)(2)/cases finding commonality post-Dukes: Ross v. RBS Citizens, 667

F.3d 900 (7th Cir. 2012) (FLSA case); In re Whirlpool Corp. Front-Loading

Washer Prod. Liab. Lit., 678 F.3d 409 (6th Cir. 2012) (product liability case).

• Pagan v. Abbott Laboratories, Inc., __ F. Supp. 2d __, 2012 WL 5289622, *9

(E.D.N.Y. Oct. 20, 2012) (“Merely raising common questions, as the Plaintiffs do

in the motion papers, is not sufficient to satisfy Rule 23(a)(2)”) (denying

certification).

• 23(b)(2): “After the Supreme Court‟s decision in Dukes, the right to notice and

an opportunity to opt out under Rule 23 now applies not only when a class

action is predominately for money damages, but also when a claim for money

damages is more than „incidental.‟” Hecht v. United Collection Bureau, Inc., 691

F.3d 218, 221 (2d Cir. 2012).

• Gates v. Rohm and Haas Co., 655 F.3d 255 (3d Cir. 2012): affirming denial of

23(b)(2) certification in case seeking medical monitoring remedy.

27


D. Update (cont.)

• Merits analysis: “the court should not turn the class certification

proceedings into a dress rehearsal for the trial on the merits.” Messner

v. Northshore Univ. HealthSystem, 669 F.3d 802, 811 (7th Cir. 2012).

• Merits analysis: “Eisen is best understood to preclude a merits inquiry

that is not necessary to determine a Rule 23 requirement.” Behrend v.

Comcast Corp., 655 F.3d 182, 190 (3d Cir. 2011).

• Merits analysis: “the courts need not address at the class certification

stage any merits inquiry that is unnecessary to the Rule 23

determination and … any findings made for class certification purposes

do not bind the fact-finder on the merits.” In re Whirlpool, 678 F.3d at

417.

Consumer Class Actions: Regulatory

and Case Developments

November 28, 2012

Mark P. Chalos

[email protected]

Nashville, Tennessee

www.lieffcabraser.com

III. Nationwide Classes

• Viability of nationwide classes

• Mazza v. American Honda, 666 F.3d 581

(9th Cir. 2012)

– - D.Ct certified nationwide class under CA law

for consumers claiming defective braking

system in Acura vehicles

29


Mazza (cont’d)

• 9th Cir reversed class cert in a 2-1 decision

• 9th Cir applied CA choice of law rules

– Found material differences between CA and

other states‟ laws (i.e. scienter, reliance)

– Found other states have interest in applying

its own laws

30


• What Mazza Said:

– “Under the facts and circumstances of this

case, we hold that each class member‟s

consumer protection claim should be

governed by the consumer protection laws of

the jurisdiction in which the transaction took

place”

31


• What Mazza DIDN‟T Say:

– Did not hold that CA choice of law rules

prohibited nationwide classes in all cases

– “Expressed no view” whether subclasses for

states by group with similar laws would be

appropriate

32


• Post-Mazza: • Schwartz v. Lights of America, et al, 2012 U.S. Dist.

142789 (C.D. Cal. August 31, 2012)

• Followed Mazza and declined to certify

nationwide class under CA law

• “Mazza does not foreclose the possibility of

nationwide class actions where a material conflict

of law exists between the states”

• Suggested subclasses for individual states or

groups of states (Fn.6)

33


• Post-Mazza:

• In re Pom Wonderful, MDL 2199 (C.D. Cal.

2012)

– Certified nationwide class under CA law

– Def failed to carry burden to establish material

differences in state law, true conflict exists,

and that any other state‟s interests outweigh

CA‟s

34


• Post-Mazza:

• In re Pom Wonderful, (cont‟d)

– Reads Mazza as confined to facts

– “To the extent Pom argues that CA law cannot

be applied to consumers nationwide as a

matter of law, Pom is incorrect.”

– Mazza did not vacate D. Ct order “as a matter

of law”

35



– Agne v. Papa John’s International, Inc., 2012

U.S. Dist. 162088 (W.D. Wash., November 9,

2012)

• Unsolicited text messaging

• Certified nationwide class under federal statute

36


• Viability of nationwide classes - NJ

– Mercedes-Benz Tele Aid (MDL 1914)

• Analog roadside assistance system

• D.NJ certified nationwide class under NJ law

• District court denied two reconsideration motions

and 3rd Cir denied 23f

37


• Viability of nationwide classes - NJ

– Contra:

– Maloney v. Microsoft, 2011 U.S. Dist. LEXIS

134841 (D.NJ Nov. 21, 2011)

– D. Ct. refused to certify nationwide class

under NJ law

– Criticized Mercedes as outlier

38



– Subclasses as an additional manageability

mechanism

• E.g., Pella Corp. v. Saltzman, 606 F.3d 391 (7th

Cir. 2010))

39

40

Managing Aggregate Litigation: The Engle Saga

I. OVERVIEW

A. Original Class And Trial Plan

• Originally certified class: “All Florida citizens and residents, and their survivors,

who have suffered, presently suffer or who have died from diseases and

medical conditions caused by their addiction to cigarettes that contain nicotine.”

• Phased Trial

» Phase I: Jury determined certain generalized issues of defendant‟s conduct liability

and whether that conduct could potentially lead to an entitlement to punitive

damages

» Phase II-A: Jury tried the compensatory damages claims of class representatives

» Phase II-B: Jury determined lump sum of punitive damages for the class as a whole -

- $145 billion in the aggregate

» Phase III was slated to be individual trials of each class member but trial court

entered judgment without ever conducting trials of the class member claims

41


B. Phase I Findings

1. Smoking causes lung cancer. [Generic Causation]

2. Cigarettes that contain nicotine are addictive or dependence producing.

[Addiction/Dependence]

3. Defendants placed cigarettes on the market that were defective and unreasonably

dangerous. [Strict Liability]

4. Defendants concealed or omitted material information, not otherwise known or available,

knowing the material was false and misleading, or failed to disclose a material fact

concerning or proving the health effects and/or addictive nature of smoking cigarettes.

[Fraud by Concealment]

5. Defendants entered into an agreement to conceal or omit information regarding the health

effects of cigarette smoking, or the addictive nature of smoking cigarettes, with the intention

that smokers and members of the public rely to their detriment. [Civil Conspiracy-

Concealment]

6. Defendants failed to exercise the degree of care which a reasonable cigarette manufacturer

would exercise under like circumstances. [Negligence]

42

C. Key Holdings of the Florida Supreme Court’s 2006 decision, Engle v.

Liggett, 945 So. 2d 1246 (Fla. 2006):

• Class must be decertified as the individual claims of class members are too

individualized to be decided in a class action

• Class member claims must be tried in individual cases -- class members had

one year from the date of the mandate in early 2007 to file claims -- and by

January 2008, roughly 8000 claims in the form of some 3000 plus cases in state

and federal court had been filed

• Punitive damages award reversed because Florida and federal law require

plaintiff by plaintiff compensatory damages before punitive damages can be set

• But court salvaged Phase I class trial in part: certain findings from Phase I trial

will be res judicata in future individual trials -- the parties are in strong

disagreement on what this means, and how it must be limited by due process.

How can courts apply meaningless, non-specific findings in future trials without

making up what the findings mean in violation of due process?


43

D. Recent Developments

• In July of 2010, the Eleventh Circuit held that Engle progeny plaintiffs could rely

on the class action findings in establishing their claims only if they could show

that specific facts were actually adjudicated in the class action trial. Brown v.

R.J. Reynolds, 611 F.3d 1324, 1334-36 (11th Cir. 2010).

• In December 2010, the First District Court of Appeal of Florida addressed the

issue as the first state appellate court. The First DCA rejected the Eleventh

Circuit‟s analysis and held that the Engle findings established the conduct

elements of the plaintiffs‟ claims. R.J. Reynolds v. Martin, 53 So. 3d 1060,

1067, 1069 (Fla. 1st DCA 2010). The Supreme Court of Florida and United

States Supreme Court denied the defendants‟ petitions for certiorari.

• Thousands of cases still remain active in state and federal courts throughout

Florida; many verdicts are on appeal; Florida Supreme Court has accepted

jurisdiction in one appeal.


44

Smith et al. v. Bayer Corp.

I. OVERVIEW

• Bayer removed West Virginia state court action in which plaintiff alleged that a

pharmaceutical product violated West Virginia consumer protection laws. The

case was then moved to an MDL in the District of Minnesota. That court

denied plaintiffs‟ motion for class certification under FRCP 23(b)(3) because

the individual question of proof of actual loss predominated. 131 S. Ct. 2368,

2373 (2011).

• A second case arising out of the same product involving similar claims was

brought by a different plaintiff in another West Virginia state court. This case

remained in West Virginia state court. Plaintiff moved for class certification

under West Virginia‟s Rule 23. Id. at 2373-74.

• Bayer moved the District Court of Minnesota to issue an injunction to protect its

judgment denying class certification. The District Court agreed and enjoined

the state court in West Virginia from ruling on plaintiff‟s motion for class

certification. Id. at 2374.

45


II. HOLDING

• The Supreme Court reversed, holding that concepts of res judicata or collateral estoppel did not bar re-litigation of the class certification issue. Id. at 2375-76. The Court identified two reasons.

• First, the issues in the two cases were not identical (id. at 2376-79).

» Even though both courts would have interpreted the identical text of Rule 23, the analysis would have differed.

» The West Virginia state court would have applied W. Va. Rule 23 as interpreted by the West Virginia Supreme Court, while the District of Minnesota applied the Eighth Circuit‟s analysis of FRCP 23.

• Second, the plaintiff in the second case was not a party to the first action (id. at 2380-82).

» the term “party” does not encompass unnamed members of a putative class before

certification. Id. at 2379.

» the exception allowing a properly conducted class action to bind a nonparty does not

apply here, because class certification was denied in the first case. Neither a

proposed class action nor a rejected class action may bind nonparties.

46


III. UPDATE

• Courts consistently have followed Bayer. In Smentek v. Dart, 683 F.3d 373 (7th Cir. 2012),

two judges in separate suits denied certification in

1983 dental treatment suits brought by

Cook County jail inmates. A third case was certified, and the Seventh Circuit refused to

decertify: “The rule urged by the defendants in this case that the denial of class

certification bars the certification of the same or similar class in a suit by a member of the

same class as the previous suit … would contradict the holding of Smith v. Bayer Corp.,

which is that a class member who did not become a party to the previous parallel class

action is not precluded from seeking class certification in his class action.” 683 F.3d at

377.

• Baker v. Microsoft Corp., 851 F. Supp. 2d 1274 (W.D. Wash. 2012): Court held that “a

denial of class certification should raise a rebuttable presumption against the same

aggregate treatment in another court. The basis for this presumption is not preclusion but,

rather, comity.” Id. at 1278 (quoting ALI, Principles of the Law Aggregate Litigation,

2.11). The Baker court held that plaintiffs failed to rebut the presumption and denied a

class certification to a class based on the same allegations that had led a prior judge to

deny certification.

47


• See also Brown v. American Airlines, Inc., ___ F.R.D. ___, 2011 WL

9131817 (C.D. Cal. Aug. 29, 1011) (following Bayer); Browning v. Data

Access Systems, Inc., 2012 WL 2054722 (E.D. Pa. June 6, 2012) (following

Bayer).

• Thorogood v. Sears Roebuck and Co., 678 F.3d 546, 552 (7th Cir. 2012):

vacating injunction against copycat state court class action: “The

[Supreme] Court … listed alternatives to preclusion: stare decisis, comity,

consolidation of overlapping suits by the Panel on Multidistrict Litigation …,

changes to the Federal Rules of Civil Procedure, and federal legislation.

Sears will have to tread one or more of these paths if it wants relief from this

copycat class action and perhaps more such actions to come; we can‟t save

it.”

48

Shady Grove Orthopedic v. Allstate Ins. Co.

I. HOLDING

• In 2010, the Supreme Court in Shady Grove Orthopedic v. Allstate Ins. Co.,

130 S. Ct. 1431 (2010), held that FRCP 23 in a diversity suit preempted a New

York state law that barred class adjudication of the underlying claim.

• Justice Scalia‟s plurality opinion held that Rule 23 is procedural in nature and

therefore does not violate the Rules Enabling Act, “regardless of its incidental

effect upon state-created rights.” Id. at 1444.

• Supplying the crucial fifth vote, Justice Stevens concurred in the result but

disagreed with this analysis. He opined that Rule 23 does not displace state

law when the “state law is actually part of a State‟s framework of substantive

rights or remedies.” Id. at 1449. Rule 23 “cannot govern a particular case in

which the rule would displace a state law that is procedural in the ordinary use

of the term but is so intertwined with a state right or remedy that it functions to

define the scope of the state-created right.” Id. at 1452.

49

The Aftermath of Shady Grove

II. UPDATE

• Lower courts are employing Justice Stevens‟ analysis, inquiring whether the

state law is so intertwined with the right or remedy that it defines the scope of

the right. See, e.g., Leonard v. Abbott Laboratories, Inc., 2012 WL 764199, *12

(E.D.N.Y. Mar. 5, 2012) (“[T]he Court agrees with the majority of district and

circuit courts that have found Justice Stevens[‟] concurring opinion was on the

„narrowest grounds,‟ and therefore is the controlling opinion.”); see also In re

Wellbutrin XL Antitrust Lit., 756 F. Supp. 2d 670, 675 (E.D. Pa. 2010); In re

Whirlpool Corp. Front-Loading Washer Products Liab. Lit., 2010 WL 2756947

(N.D. Ohio July 12, 2010); Bearden v. Honeywell Int'l, Inc., 2010 WL 3239285

(M.D. Tenn. Aug. 16, 2010).

• Appellate courts also have adopted Justice Stevens‟ concurrence. See James

River Ins. Co. v. Rapid Funding, LLC, 658 F.3d 1207, 1217 (10th Cir. 2011)

(“Justice Stevens concurred, and the Tenth Circuit has understood his

concurrence to be the controlling opinion in Shady Grove.“)

50

Barry Goheen

[email protected]

404.572.4618

Barry Goheen is a partner in King & Spalding's Business Litigation Practice Group. He practices

in the firm's general and commercial litigation area and focuses on class actions and other multi-

party litigation.

Mr. Goheen has served as lead or co-counsel in over 40 class actions in all areas of the law,

including antitrust, securities fraud, consumer protection, financial services and products, product

liability, privacy, and general commercial disputes in state and federal courts representing such

clients as The Coca-Cola Company, Wal-Mart, SunTrust Banks, Bank of America, Countrywide,

Fifth Third, Brown & Williamson Tobacco Corporation, Jefferson-Pilot Life Insurance Company,

Equifax, and Lockheed Martin Corporation.

His class action matters include:

• Participation in several phases of a multi-phase trial of a product liability class action in

Miami, Florida.

• Co-counsel in the defense of nationwide class action brought against insurance company

alleging unfair insurance practices.

• Lead counsel in the defense of a proposed nationwide RICO class action brought against

automobile manufacturer alleging misrepresentation of horsepower in the vehicles.

• Co-counsel in the defense of nationwide antitrust class action brought by purchasers of

souvenirs at NASCAR events.

• Lead or co-counsel in defense of over 30 proposed class actions brought by consumers of

cigarette products, obtaining dismissal or denial of class certification in all but two cases.

• Lead counsel in numerous class actions arising out of financial services and products,

including for SunTrust, Bank of America, Countrywide, Fifth Third, Advance America, and

Harland Financial Solutions.

mailto:[email protected]

VII. Supreme Court Summary

• Comcast Corp. v. Behrend

– S. Ct. Docket No. 11-864

– Decision below: 655 F.3d 182 (3rd Cir. 2011)

– Antirust case involving delivery of cable

services

51


• Comcast v. Behrend (cont‟d)

– D. Ct certified class after four-day evidentiary

hearing with live testimony from fact and

expert witnesses

• Court certified:

– (1) antitrust impact; and

– (2) class-wide damages

– 3rd Cir. affirmed

52


• Comcast v. Behrend (cont‟d)

– Sup Ct. granted cert:

• “Whether a district court may certify a class action

without resolving whether the plaintiff class has

introduced admissible evidence, including expert

testimony, to show that the case is susceptible to

awarding damages on a class-wide basis.”

– Argued Nov. 5, 2012

53


• In re Whirlpool Front Loading Washers

MDL 2001, (N.D. Ohio)

– Allegedly defectively designed FLW

– D. Ct certified an liability class of Ohio

consumers under Ohio law

– 6th Cir affirmed 3-0

– No votes for en banc review

54


• In re Whirlpool Front Loading Washers

MDL 2001, (N.D. Ohio)

– 9/14/2012 – Pet. for cert filed

– 10/9/2012 – Response requested

55

ARTICLE III STANDING: FIRST AMERICAN

FINANCIAL V. EDWARDS (U.S. SUPREME COURT)

• Issue: Whether a private purchaser of real estate settlement services has

standing to sue under Article III, § 2?

• Significance: Although the lawsuit was brought under the Real Estate

Settlement Procedures Act (RESPA), the Court seemed set to decide what limits

Article III places on Congress‟s power to create statutory rights enforceable

through a private right of action. Specifically, must a plaintiff show he/she

suffered an “actual injury” from a defendant‟s unlawful conduct besides plaintiff‟s

violation of legal rights under a federal statute?

• Surprising End to Potentially Big Case: On June 28, 2012, the

Supreme Court dismissed the case in a one-sentence order, stating that the writ

of certiorari was “improvidently granted.” This is not a comment on the merits,

and there has been speculation that the Court passed on this case in light of the

blockbuster Health Care Cases decided the same day. In all likelihood, the Court

will take this issue up again fairly soon.

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A FEW CASES TO WATCH RE: RULE 68 AND ARTICLE III STANDING

• Rule 68 Offer of Judgment: Hrivnak v. NCO Portfolio Mgmt.,

No. 1:10-cv-646 (N.D. Ohio), on appeal to the Sixth Circuit. In accordance

with the Third, Fifth, Ninth and Tenth circuits, the district court ruled that a

Rule 68 offer of judgment made prior to the filing of a class certification

motion does not render the individual plaintiff‟s claims moot. A three-judge

panel of the 6th circuit heard oral argument on June 8, 2012. A decision is

expected in 2013.

• Article III Standing under TCPA: Holtzman v. Turza, No. 08-

cv-2014 (N.D. Ill.), on appeal to Seventh Circuit. Similar to the Edwards

issue, the 7th circuit is considering whether “actual receipt” of a fax is a

necessary requirement to establish Article III standing for TCPA plaintiffs.

Regardless of how the 7th circuit rules, this could be the Edwards-type

case the Supreme Court is looking for, as it concerns the limits of Article III

standing under consumer-protection statutes providing for statutory

damages in lieu of actual damages.

57

Contact Information

David Almeida, Sedgwick LLP

312.849.1985

[email protected]

LinkedIn:

www.linkedin.com/in/davidsalmeida

twitter.com/almeidage

Digital Media Law Blog: http://digital-media-law.com

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America, Bermuda* and Europe, Sedgwick‟s collective experience

spans the globe and virtually every industry. For more information

about Sedgwick, its attorneys, and its services, visit the firm‟s website

at www.sedgwicklaw.com.

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