The Supreme Court Preview, Part I: The Court To Overhaul Class Actions?

A fresh Supreme Court term has kicked off, with a new slate of cases awaiting the Court’s decision. Among these cases are several that the automotive industry should keep an eye on, as they impact the law in ways that will affect how industry members do business. In our series, “The Supreme Court Preview,” Dashboard Insights will provide an overview of these cases, and explain why counsel for the automotive industry should keep an eye on these developments.

We’ll begin with one of the major themes of this Term: class actions.

Whether it decides to take the opportunity or not, the Court has a chance this Term to reshape the law applying to class actions. The Court’s decisions could either prop the courthouse doors open for large class actions with bet-the-company implications, or could pump the brakes on many types of class actions.

• Campbell-Ewald Co. v. Gomez, No. 14-857: If you offer judgment to a lead plaintiff, offering everything he or she wants, can he or she continue to prosecute a class action? What if plaintiff doesn’t accept the offer? In Genesis Healthcare Corp. v. Symcyzk, the Supreme Court decided two years ago that where an individual plaintiff’s claims were mooted by an offer of judgment, she could not continue to prosecute a Fair Labor Standards Act collective action, as she had no separate personal interest in representing such a collective action. But in Genesis Healthcare, the Court expressly ducked the question of whether an unaccepted offer of judgment to the lead plaintiff in fact mooted her claim, taking as a given the lower court’s ruling on the issue because it had not been presented to the Court for review (provoking a sharp four-Justice dissent criticizing the mootness determination and instructing other courts: “Don’t try this at home.”).   Courts have continued to wrestle with mootness questions in recent years, with some courts (such as the Fifth and Seventh Circuit Courts of Appeals in recent months) agreeing with the Genesis Healthcare dissent and holding that an unaccepted offer of full relief is a legal nullity that does not moot an individual claim or a plaintiff’s class action. Campbell-Ewald raises the question squarely, and its decision, should the Court adopt the petitioner’s arguments, could give the defense bar powerful new weapons to yield at the outset of a class action—potentially up to mooting a class action entirely by simply offering the named plaintiff complete relief at the outset of the case. (Alternatively, the Court could leave all these issues for a later date and decide this case on governmental immunity grounds, which are also presented in this case.)
• Tyson Foods, Inc. v. Bouaphakeo, No. 14-1146: Workers at a food-processing facility filed a collective action under the Fair Labor Standards Act and a class action under Iowa wage laws, based on alleged violations of overtime rules when they were not paid overtime for the time they spent donning and doffing protective equipment. The trial court certified the FLSA collective action and the Iowa state law class action, and tried the actions together, resulting in a plaintiff verdict, affirmed by the Eighth Circuit. Tyson Foods now asks the Supreme Court to decide whether the statistical aggregating techniques used to establish class-wide liability and damages were valid under either the FLSA or class action rules, and whether the FLSA collective action or class action was proper when the case likely included hundreds of plaintiffs who were not improperly denied overtime and thus suffered no injury. This case, like the Wal-Mart Stores, Inc. v. Dukes case four years ago, has the potential to shape just how homogenous a group of plaintiffs needs to be to bring a collective or class action under the FLSA or federal class action rules—something that any large employer or producer of consumer goods should watch closely.