2016 Class Action Year-End Review A Summary of Class Action Litigation in 2016 March 2017 bakerlaw.com 1 2016 CLASS ACTION YEAR-END REVIEW Table of Contents I. Introduction 1 II. Developments in Class Action Procedure 3 A. Class Standing Issues 5 B. Offers of Judgment 8 C. Ascertainability 15 D. Class Settlements 17 III. Developments by Subject Matter 25 A. Employment and Waivers 27 B. Antitrust 34 C. Privacy 39 D. Consumer 54 2 2016 CLASS ACTION YEAR-END REVIEW I. Introduction 1 2016 CLASS ACTION YEAR-END REVIEW I. Introduction Written by Dustin M. Dow If you were paying attention to class actions in 2016, you already know the answers to the big questions. Generally speaking, unaccepted offers of judgment to named plaintiffs will not foreclose class claims (with some exceptions). And standing to assert class claims requires more than just a statutory violation – a plaintiff must establish some concrete, particularized injury that does more than recite a statute. Those edicts came down from the Supreme Court in Campbell-Ewald Co. v. Gomez and Spokeo v. Robins – the two most prominent class action decisions of 2016. Discussed in depth below, Campbell-Ewald and Spokeo wielded significant influence throughout the year and will continue to do so throughout 2017 and beyond. But if you found your way here to BakerHostetler’s 2016 edition of the Class Action Year-End Review, you didn’t need us to tell you about Campbell-Ewald and Spokeo. You may not, however, know about the exception to Campbell-Ewald or the different applications of Spokeo throughout the class action arena. More the point, 2016 was about a lot more than just a couple of Supreme Court cases. The doctrine of ascertainability, which has gone back and forth the past several years, shifted again in favor of lower standards for certification. And attorneys’ fees provisions in class settlements continue to gum up class resolution, a rising trend that has been discussed before in these pages and is updated here with new information. The story of 2016 is also about 2017. Late in the year, the Supreme Court granted certiorari review of three consolidated cases involving class action waivers in arbitration agreements in the employment sector. Oral arguments are set for October, but the ramifications and potential impact are already being debated by observers and lower courts. As in previous years, the nuances of class action procedure are in a continuous state of change. In 2016, we saw these changes in a wide variety of areas, including how the courts deal with ascertainability, standing, class-action waivers, and certification standards. This Year-End Review provides you with the necessary overview and insight to make sense of it all and to understand where it’s going in 2017. 2 2016 CLASS ACTION YEAR-END REVIEW II. Developments in Class Action Procedure 3 2016 CLASS ACTION YEAR-END REVIEW II. Developments in Class Action Procedure Written by Sam Camardo The Supreme Court was poised to answer burning class action procedure questions in 2016. Spokeo dealt with the extent to which alleging that the defendant violated a federal statute – absent any independent injury – sufficed to allege injury in fact. Campbell-Ewald addressed whether a defendant could moot a putative class action through a pre-class certification offer of judgment. Those decisions were issued but left much open to interpretation. Spokeo reaffirmed the principle that an injury must be “concrete” in addition to being particularized. But the Court offered little in terms of guidance on when a statutory violation one suffers is a concrete injury. Campbell-Ewald held that an unaccepted offer of judgment does not moot a putative class action. But it left open the impact of a defendant’s actual tender of compensation to the plaintiff – say, a cashier’s check – on the mootness question. This review discusses these decisions, the lower courts’ reaction to them and more. 4 2016 CLASS ACTION YEAR-END REVIEW II. Developments in Class Action Procedure A. Class Standing Issues Written by Sam Camardo The centerpiece of class action standing in 2016 was the Supreme Court’s decision in Robins v. Spokeo, 136 S. Ct. 1540 (2016). The Court considered what, exactly, the requirement that an alleged “invasion of a legally protected interest” be “concrete and particularized” means. Unfortunately, the Court’s decision in Spokeo was not a model of clarity, so much so that both sides counted the case as a win.1 Spokeo Inc. operates an online “people search engine.” After the plaintiff, Robins, learned that inaccurate information about him was available on Spokeo, he sued the company for Fair Credit Reporting Act (FCRA) violations on behalf of a putative class. The district court dismissed this claim, holding that Robins merely alleged that Spokeo violated FCRA without any injury to him. That, the district court held, was insufficient to allege standing under Article III.2 The Ninth Circuit disagreed. That court held that Robins alleged that “Spokeo violated his statutory rights.”3 According to the panel, Robins’s “personal interests in the handling of his credit information are individualized,” and thus sufficient to confer Article III standing. In a much-anticipated opinion, the Supreme Court vacated and reversed the Ninth Circuit’s ruling. The problem was the Ninth Circuit’s failure to analyze the “concreteness” requirement of an injury in fact. The panel instead hinged its decision on only the particularized nature of Robins’s alleged statutory violation. Particularity, the Court explained, was “necessary to establish injury in fact, but it is not sufficient.”4 An alleged injury must also be “concrete.” But the Court frustratingly declined to determine whether Robins’s allegations sufficed, opting to remand for the lower courts to sort out that question. The Court provided only general observations: “A ‘concrete’ injury,” Justice Alito explained, “must be ‘de facto’; that is, it must actually exist.” But “concrete” is not “synonymous with ‘tangible,’” and Congress may identify and elevate intangible injuries to compensable ones. Yet “Congress’s role in identifying and elevating intangible harms does not mean that a plaintiff automatically satisfies the injury-in-fact requirement whenever a statute grants a person a statutory right and purports to authorize that person to sue to vindicate that right. ... Robins could not, for example, allege a bare procedural violation, divorced from any concrete harm, and satisfy the injury-in-fact requirement of Article III.” 1 See http://blogs.reuters.com/alison-frankel/2016/05/16/brace-for-more-class-action-challenges-post-spokeo/. 2 Robins v. Spokeo, Inc., 2011 WL 597867, at *1 (C.D. Cal. Jan. 27, 2011). 3 Robins v. Spokeo, Inc., 742 F.3d 409, 413 (9th Cir. 2014) (emphasis in original). 4 Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1548 (2016). 5 2016 CLASS ACTION YEAR-END REVIEW II. Developments in Class Needless to say, Spokeo left much open to interpretation. And the courts have already diverged Action Procedure about what the decision meant. Some circuits have sided with defendants, agreeing that something more than a technical statutory violation must be alleged. The Seventh Circuit in Meyers v. Nicolet Restaurant of De Pere, LLC,5 held that Spokeo requires a plaintiff to “allege a concrete injury that resulted from the violation in his case.” Unlike the Supreme Court, the Seventh Circuit clarified: “In other words, Congress’ judgment that there should be a legal remedy for the violation of a statute does not mean each statutory violation creates an Article III injury.” And so it was in Meyers: The mere fact that Congress decided receiving a credit card receipt with more than four digits is an injury was not enough for the plaintiff to sue. Several other circuits have likewise come down against plaintiffs seeking to sue based solely on statutory violations, even if personal to the plaintiff. In Hancock v. Urban Outfitters, Inc.,6 the D.C. Circuit held that the plaintiffs failed to allege standing based on a department store clerk asking for their ZIP codes, a violation of a District of Columbia consumer protection statute. The Fifth Circuit in Lee v. Verizon Communications, Inc.,7 rejected a plaintiff’s claim that the breach of an ERISA duty – mismanagement of the pension plan – alone was sufficient to confer standing. A plaintiff’s allegation that a cable company retained personal information about him for more than 30 days, which violates the Cable Communications Policy Act, was not enough to confer standing for the Eighth Circuit.8 And the Eleventh Circuit held that a defendant’s failure to record a satisfaction of a mortgage within the required 30 days under state statute, absent harm flowing from that failure, was insufficient.9 But the Ninth Circuit and Third Circuit, however, arguably read Spokeo more broadly. In two privacy class actions – In re Nickelodeon Consumer Privacy Litigation10 and In re Horizon Healthcare Services Inc. Data Breach Litigation11 – the Third Circuit sketched a broad view of the “concreteness” requirement, holding that “we do not believe that the Court [ ] intended to change the traditional standard for the establishment of standing.” And thus, so long as “Congress has expressed an intent to make an injury redressable,” it is “concrete” for Article III purposes. The Third Circuit acknowledged, however, that Spokeo places some limits on Congress’s right to elevate “procedural” injuries to the level of “concrete.” But the Third Circuit determined that neither Nickelodeon nor Horizon required it to consider that limitation. The Ninth Circuit, too, held that Congress has wide latitude to establish that an intangible harm is “concrete.” In Van Patten v. Vertical Fitness Grp., LLC,12 the panel held that the plaintiff had standing to sue for violations of the Telephone Consumer Protection Act (TCPA), regardless of any additional harm.