Class Action Defense

On April 16, 2013, the U.S. Supreme Court concluded, in a 5-4 decision, that when the individual plaintiff in a "collective action" under the Fair Labor Standards Act (FLSA) resolves her own claims before certification, the case is moot and must be dismissed.  Genesis Healthcare Corp v. Symczyk, No. 11-1059 (U.S. 2013).

This is the latest opinion in the ongoing litigation arising out of a massive data breach suffered by Hannaford Bros. grocery stores. In re Hannaford Bros. Privacy Litigation, __F. Supp. 2d __, Case No. 2:08-MD-1954-DBH, 2013 WL 1182733 (D. Me. Mar. 20, 2013).

On March 27, 2013, the U.S. Supreme Court issued its decision in Comcast Corp. v. Behrend, 569 U.S. ___, No. 11-864, 2013 WL 1222646 (Mar. 27, 2013).

The U.S. Supreme Court unanimously ruled in Standard Fire Insurance Co. v. Knowles, 568 U.S. __, No. 11-1450, 2013 WL 1104735 (Mar. 19, 2013), that plaintiffs attempting to bring a class action lawsuit cannot escape federal jurisdiction by agreeing to seek less than $5 million in damages.

A federal judge in the Northern District of California recently added to the growing list of cases rejecting attempts to recover damages resulting from data breaches.  In In re LinkedIn User Privacy Litigation, Case no. 5:12-CV-03088 EJD (March 6, 2013), the court dismissed a lawsuit brought by LinkedIn users who were upset over the June 2012 posting of 6.5 million stolen LinkedIn user passwords.

On Tuesday, on remand from the U.S. Supreme Court, the Ninth Circuit held that the certification requirements set forth by the U.S. Supreme Court for a multimillion plaintiff gender discrimination class action in Dukes v. Wal-Mart Stores, 131 S. Ct. 2541 (2011), applied equally to a 200-person class of newspaper employees with wage and hour claims.     

In its long-awaited decision in Amgen Inc. v. Connecticut Retirement Plans & Trust Funds, No. 11-1085 (U.S. Feb. 27, 2013), the U.S. Supreme Court held that plaintiffs in a securities-fraud class action do not need to establish the materiality of alleged misrepresentations in seeking class certification.

The California Supreme Court recently issued a landmark ruling in Apple Inc. v. Superior Court (formerly Krescent v. Apple Inc. in trial court proceedings), a case with wide-reaching implications for consumer privacy in e-commerce. The issue before the Court was whether California’s Song-Beverly Credit Card Act (the Act), which generally prohibits retailers from collecting or requesting personal identification information (PII) as a condition of accepting credit card payments, should apply to online retailers.

Companies that accept online credit card payments should be keeping an ear very close to the ground for the California Supreme Court’s decision in Apple v. Superior Court (Krescent), expected within the next few weeks.  Depending on how the court rules, the case has the potential to spawn a flood of class actions against online retailers and change the way web payments are processed.

A Supreme Court decision long-awaited by the class action bar and businesses was a surprise non-event last Thursday when, seven months after hearing oral arguments in First American Financial Corp. v. Edwards, the Supreme Court issued an order dismissing the writ of certiorari in the case as improvidently granted.  The Supreme Court's per curiam order, presented without reasoning, left intact the Ninth Circuit's holding that a plaintiff who pled a statutory violation but not actual damages had standing under Article III of the U.S. Constitution, which requires that a plaintiff has suffered a concrete “injury in fact.”  The Supreme Court's decision means that, at least in the Ninth Circuit “[t]he injury required by Article III can exist solely by virtue of ‘statutes creating legal rights, the invasion of which creates standing.’”

Several class action complaints filed in recent months take a novel approach regarding the requirements for website privacy policies under California's "Shine the Light" law.

On January 6, 2012, the U.S. District Court for the Central District of California dismissed with prejudice Mehrens v. Redbox Automated Retail, LLC, a putative class action against Redbox alleging that Redbox violated California's Song-Beverly Credit Card Act by requesting ZIP codes and email addresses in connection with credit card transactions.

In AT&T Mobility LLC v. Concepcion, the U.S. Supreme Court ruled that arbitration provisions governed by the Federal Arbitration Act may disallow class action proceedings.  In doing so, the Court disapproved the California Supreme Court's decision in Discover Bank v. Superior Court, which held that a consumer arbitration provision prohibiting class arbitration was unconscionable and unenforceable.

In AT&T Mobility v. Concepcion, No. 09-893, the U.S. Supreme Court validated consumer contracts with arbitration clauses containing class action waivers. This decision may cause companies that do not have arbitration provisions in their consumer contracts to add them in order to limit or avoid class actions.

On February 10, 2011, the California Supreme Court held that a customer's ZIP code is "personal identification information" ("PII") under the California Song-Beverly Credit Card Act of 1971 and that businesses cannot request and record a customer's ZIP code during a credit card transaction.