U.S. Supreme Court docket for this term focused on class actions

Posted on: January 10th, 2011 by Steve Larson
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As indicated earlier in this blog, this term the U.S. Supreme Court will be focusing on more issues involved in class actions than it has in decades.  It granted certiorari in the now well known case of Dukes v. Wal-Mart, Inc., and should be issuing an opinion this term in the equally well known case entitled AT&T Mobility v. Concepcion.  Both of these cases from the Ninth Circuit were decided in favor of the plaintiffs, but the Ninth Circuit is the most reversed Circuit in the country, so decisions in these cases could reconfigure the class action landscape.

In addition to the Wal-Mart and AT&T Mobility cases, the U.S. Supreme Court will decide a class action related issue in Smith v. Bayer Corp, in which a federal court enjoined a state court class action from proceeding against the drug company.  Further, a petition has been filed by the Big Tobacco companies in Phillip Morris v, Scott, to ask the court to review, on due process grounds, the use of the class action device by Louisiana courts to deal with smoking-cessation claims involving more than 500,000 class members.

In the Wal-Mart case, the justices have set up two questions for them to answer; (1) whether it was proper to certify a class seeking backpay under Federal Rule of Civil Procedure 23(b)(2) – a rule allowing class actions seeking injunctive relief, and (2) whether certification under Rule 23(b)(2) was consistent with the requirements of Rule 23(a).

In the AT&T Mobility case, the court will decide whether the Federal Arbitration Act precludes states from refusing to enforce class action bans within arbitration agreements.  The AT&T Mobility case is potentially more important than the Wal-Mart case, because it goes to the very core of what class actions were designed to do.  An opinion in favor of AT&T would eviscerate class actions, because all large corporations would put language into their boilerplate terms and agreements that would ban class actions.

If the U.S. Supreme Court rules against the plaintiffs in these cases, I am concerned that it will demonstrate that the majority of the U.S. Supreme Court is dedicated to protecting corporate interests and giving corporations what they want.  Citizens United v. FEC, where the majority of the court held that corporations were considered citizens under the constitution and thus had a First Amendment right to make unlimited campaign contributions, exemplifies this concern, but unfortunately, it is not the only example.   Bell Atlantic v. Twombley, where the court raised the bar for pleading antitrust conspiracy claims  and Ashcroft v. Iqubal, which established a new higher pleading standard for all civil actions are also examples.

This term will be a very important one for consumers, employees, shareholders, and anyone else that has to deal with large corporations.  I am concerned that the conservative majority of the U.S. Supreme Court may attempt to eliminate the only effective tool an individual has for leveling the playing field with a large corporation.