28 th National Conference on Consumer Finance Class Actions & Litigation - PowerPoint Presentation

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28th National Conference on Consumer Finance Class Actions & Litigation

Adapting Your Consumer Finance Class Action and Litigation Strategies to Recent and Forthcoming Supreme Court Decisions

April 4-5, 2017

Christopher Chorba

Gibson, Dunn & Crutcher LLPLos Angeles

Tweeting about this conference?

Historical Overview

of Class ActionsSupreme Court’s interest in class actions increasing

—1966-2000:

Eight key SCOTUS decisions construing FRCP 23.2011-2016: Approximately twice as many such decisions.Mature Circuit Splits and Issues on the Horizon—

Ascertainability, Class Arbitration, Settlement Issues, CAFA, FRCP 23 amendments, etc.

Monumental

Decisions in 2009Dukes/Comcast—Rule 23(b)Stolt-Nielsen/Concepcion/Italian Colors/DirecTV

—Class ArbitrationStandard Fire/Dart Cherokee

—CAFA

2015 TermTyson Foods, Inc. v. Bouaphakeo—FLSA Liability and Damages May Be Based on Statistical Sampling.

Campbell-Ewald Co. v. Gomez—A Defendant Cannot Moot a Class Action With an Offer of Settlement.Spokeo, Inc. v. Robins—Standing Requires Injury-In-Fact That is Both “Particularized” and “Concrete.”

2016 Term

Microsoft v. Baker—Appealability of Class Certification Denials After Voluntary DismissalsNinth Circuit exercises jurisdiction over dismissal that is the “product of a stipulation.” Baker v. Microsoft Corp., 797 F.3d 607, 612 (9th Cir. 2015) (citations omitted).Cert Issue:

Whether a court may exercise jurisdiction under 28 U.S.C. Section 1291 over a denial of class certification even after plaintiffs voluntarily dismiss their claims.Oral argument

: March 21, 2017

2017 TermNLRALewis v. Epic Sys. Corp., 823 F.3d 1147, 1158 (

7th Cir. 2016) (finding NLRA falls under FAA savings clause).Ernst & Young, LLP v. Morris, 834 F.3d 975, 986 (9th Cir. 2016) (finding FAA does not mandate enforcement of contract terms that waive substantive rights under NLRA).

FAA

Murphy Oil USA, Inc. v. NLRB

, 808 F.3d 1013, 1018 (5th Cir. 2015) (finding no unfair labor practice where employer required employees to relinquish right to pursue class claims by signing arbitration agreements).

Does the FAA or NLRA Drive the Cart?

Cases Consolidated and Cert Granted Jan. 13, 2017

Broader Horizon IssuesAscertainability—Whether in addition to objective criteria, Rule 23 requires a

reliable/feasible mechanism for identifying class membersYES: First, Second, Third, Fourth, and Eleventh CircuitsNO: Sixth, Seventh, Eighth, and Ninth CircuitPossible Cert Petition: Briseno v. ConAgra Foods, Inc., 844 F.3d 1121, 1123 (9th Cir. 2017) (finding no “administrative feasibility” requirement under Rule 23).

Class Settlements—Cy Pres (Lane v. FB), Attorneys’ Fees, Approval Factors, Class Rep. Incentive AwardsPost-

Dukes/Comcast Issues—Dukes: May be permissible to apply Daubert to expert testimony at the class certification stageComcast: Individual damage calculations

may preclude certification

Broader Horizon Issues

CAFA vs. SpokeoSpokeo—bare procedural violation alone cannot satisfy Article III; intangible injury can be concrete.The Spokeo

Dilemmas:1. Aggressive arguments for dismissal under Spokeo may lead to re-filing in a less desirable state, without

the ability to remove againKhan v. Children’s Nat’l Health Sys., 188 F. Supp. 3d 524, 534-35 (D. Md. 2017).

2. Defendants risk sanctions if they seek Art. III dismissal after removing under CAFAMocek v. Allsaints USA Ltd., 2016 WL 7116590, at *3 (N.D. Ill. Dec. 7, 2016).

Broader Horizon IssuesFRCP 23 AmendmentsListing factors to consider when approving

a class action settlement, such as whether the “relief provided for the class is adequate” and “whether class members are treated equitably relative to each other.” (Proposed Rule 23(e)(2).)Permitting notice of a proposed class settlement or a class certified under Rule 23(b)(3) to be made via “electronic means, or other appropriate means.” (Proposed Rule 23(c)(2)(B).)Requiring a class objector to “state with specificity the grounds for the objection.” (Proposed Rule 23(e)(5

)(A).)

Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016)Ninth Circuit: Violation of statutory right under Fair Credit Reporting Act (“FCRA”) sufficient to confer Article III standing on plaintiff. Robins v. Spokeo, Inc.

, 742 F.3d 409 (9th Cir. 2014).Supreme Court vacates and remands so Ninth Circuit can determine if FCRA violation was “concrete.”What is “concrete” injury according to Supreme Court?Can be intangibleBare procedural violation insufficient if “divorced from any concrete harm”If “risk of real harm,” violation of procedural right may be “sufficient” to constitute concrete injury

Art. III Standing Pursuant to Spokeo

?Fair Debt Collection Practices Act (“FDCPA”)YES: Church v. Accretive Health Inc., 654 F. App’x 990, 995 (11th Cir. Jul. 6, 2017)—finding “legally cognizable injury” under FDCPA

Fair Credit Reporting Act (“FCRA”)

YES: In re Horizon Healthcare Servs. Inc. Data Breach Litig., 2017 WL 242554, at *10 (3d Cir. Jan. 20, 2017)—FCRA violation akin to common law tort of invasion of privacy and sufficient to establish concrete injuryEqual Credit Opportunity Act (“ECOA”)YES:

Dorton v. Kmart Corp., 2017 WL 372016, at *5 (E.D. Mich. Jan. 26, 2017)—defendants’ failure to satisfy all of ECOA’s notice requirements caused concrete harm to plaintiffTruth in Lending Act (“TILA”)YES: Strubel v. Comenity Bank, 842 F.3d 181, 190-91 (2d Cir. 2016)—some TILA violations constituted concrete injuries under Spokeo

Art. III Standing Pursuant to Spokeo?

Real Estate Settlement Procedures Act (“RESPA”)YES: Diedrich v. Ocwen Loan Servicing, LLC, 839 F.3d 583, 591 (7th Cir. 2016

)—plaintiffs who they claimed they were forced to pay the defendant more money and higher interest rates alleged concrete injuries Telephone Consumer Protection Act (“TCPA”)

YES: Van Patten v. Vertical Fitness Grp., LLC, 2017 WL 460663, at *4 (9th Cir. Jan. 30, 2017)—(finding “unsolicited contact” under TCPA to be a “concrete, de facto injury”YES, but . . . professional plaintiffs? Morris v. UnitedHealthcare Ins. Co.

, 2016 WL 7115973, at *5-6 (E.D. Tex. Nov. 9, 2016)—plaintiff who filed at least 36 TCPA lawsuits alleged concrete injury under statute, but warning of risk of professional plaintiffsNO: Romero v. Dep’t Stores Nat’l Bank, 2016 WL 4184099, at *3 (S.D. Cal. Aug. 5, 2016)—finding no concrete injury*NOTE: Inconsistent with 9th Circuit’s ruling in Van Patten

Art. III Standing Pursuant to Spokeo?

RecapWith exception of Romero (S.D. Cal.), courts have found concrete injuries under consumer finance statutes.Fact that Congress passed a statute addressing injuries weighs heavily for many courts in finding standing.Strategy Implication? May be difficult to argue no standing even post-Spokeo.

Campbell-Ewald Co. v. Gomez

,136 S. Ct. 663 (2016).Ninth Circuit:

Unaccepted offer of judgment under Rule 68 “that would fully satisfy a plaintiff’s claim is insufficient to render the claim moot.” 768 F.3d 871, 875 (9th Cir. 2014).The Supreme Court

affirms, holding an unaccepted settlement offer, like an unaccepted contract offer, is a “legal nullity.” 136 S. Ct. at 670.

BUT:

Court

does not decide

whether claim would be moot if “defendant deposit[ed] the full amount of the plaintiff’s individual claim in [plaintiff’s account].”

Id.

at 672.

Plaintiff’s Claim Moot under Campbell-Ewald?

Fair Debt Collection Practices Act (“FDCPA”)NO: Conway v. Portfolio Recovery Assocs., LLC, 840 F.3d 333, 335 (6th Cir. 2016)—entry of judgment based on unaccepted offer was “erroneous” per

Campbell-EwaldTruth in Lending Act (“TILA”)

NO, but . . . Refiling? Price v. Berman’s Auto., 2016 WL 1089417, at *3 (D. Md. Mar. 21, 2016)—return of settlement check precluded mootness of TILA claim, but dismissal would be proper if the defendant refiled its

motion to dismiss and reissued its checkFair Credit Reporting Act (“FCRA”)YES: In re Michaels Stores, Inc., 2016 WL 947150, at *2-3 (D.N.J. Mar. 14, 2016)—plaintiff’s claims moot per Campbell-Ewald because she accepted a Rule 68 offerTelephone Consumer Protection Act (“TCPA”)YES: Fulton Dental, LLC v. Bisco, Inc., 2016 WL 4593825, at *7-8 (N.D. Ill. Sept. 2, 2016)—tender of full amount extinguished plaintiff’s individual claimsStrategy: Filing motion and tendering full amount may moot plaintiff’s claims.

Tyson Foods, Inc. v. Bouaphakeo, 136 S. Ct. 1036 (2016).

Eighth Circuit permits statistical sampling to show how much in overtime the defendant failed to pay in violation of the Fair Labor Standards Act (“FLSA”).Supreme Court

affirms—representative sampling allowed in an FLSA opt-in class action so long as “each class member could have relied on that sample to establish liability if he or she had brought an individual action.”

Tyson Foods, Inc. v. Bouaphakeo, 136 S. Ct. 1036, 1046 (2016).Reliance on samples was permissible “in the circumstances of this case” under Mt. Clemens

because Tyson Foods created an evidentiary gap by failing to retain records of employees’ actual time worked. See id. at 1047 (emphasis added) (citing Anderson v. Mt. Clemens, 328 U.S. 680, 685 (1946)).

Questions?

Christopher ChorbaGibson, Dunn & Crutcher LLP333 S. Grand AvenueLos Angeles, CA 90071-3197Tel: 213-229-7396

cchorba@gibsondunn.com

Chris is Co-Chair of the Class Actions Practice Group and Co-Partner in Charge of the Los Angeles Area offices of Gibson, Dunn & Crutcher LLP. He has substantial experience litigating a wide range of complex commercial matters in California and throughout the country, with a specialty in defending consumer class and representative actions involving California’s consumer protection and false advertising laws. His litigation and counseling experience includes work for companies in the automotive, computer and technology, entertainment, food and beverage, health care, insurance, retail, telecommunications, and utility industries.