Gibbons Law Alert
In the thick of a torrent of litigation, mostly class actions, premised upon purportedly unlawful contractual provisions under the New Jersey Truth-in-Consumer Contract, Warranty and Notice Act (“TCCWNA”) – a statute that permits “no-injury” claims – the District of New Jersey has reaffirmed a bright-line rule concerning this law: Omissions don’t trigger liability.
Class actions brought under the New Jersey Truth-in-Consumer Contract, Warranty, and Notice Act (“TCCWNA”) are on the rise. This year alone, Wal-Mart, J. Crew, Avis, Toys R Us, and Apple – among many others – have been sued under this unique state statute that prohibits certain types of unlawful provisions in consumer contracts and other documents. In the past decade, courts have continued to expand the scope of this law – from the New Jersey Supreme Court, which, in 2013, instructed lower courts to construe the statute broadly, to the District of New Jersey, which, in 2014, allowed a TCCWNA class action to go forward against contracts containing commonly-worded exculpatory and indemnification provisions.
After much anticipation, the United States Supreme Court issued its decision in Spokeo v. Robins, a case that many believed would finally establish a definitive ruling as to whether a federal statute which awards statutory damages to those impacted is sufficient to confer Article III standing. The question is particularly relevant in the class action context where class members could be awarded statutory damages in the absence of any actual damages. Unfortunately, although the Court considered the scope of the injury-in-fact requirement, the 6-2 decision still leaves the standing question open to interpretation by courts and by both plaintiffs and defendants.
In Tyson Foods, Inc. v. Bouaphakeo, the Supreme Court of the United States definitively answered the question of whether statistical “representative evidence” may be used in class actions to establish that “questions of law or fact common to class members predominate over any questions affecting only individual members” pursuant to Rule 23(b)(3). According to the Court’s much-anticipated opinion, the answer is yes: “Its permissibility turns not on the form a proceeding takes – be it a class or individual action – but on the degree to which the evidence is reliable in proving or disproving the elements of the relevant cause of action.”
The Supreme Court of the United States recently issued its ruling in Campbell-Ewald v. Gomez, a closely watched appeal in which the Court held that a complete offer of relief to a named plaintiff in a class action does not moot the individual’s claim. As explained by Justice Ginsburg, writing for the majority and drawing upon lessons taught to a “first-year law student,” an unaccepted settlement offer “creates no lasting right or obligation,” “has no force,” and, thus, “is a legal nullity, with no operative effect” that “does not moot a plaintiff’s case.” The Court’s opinion follows up on its 2013 decision in Genesis Healthcare Corp. v. Symczyk, in which it assumed that an offer of complete relief, even if unaccepted, moots a plaintiff’s individual claim to the extent the plaintiff’s Fair Labor Standards Act (“FLSA”) collective-action allegations could not stand on their own.
In Chesapeake Appalachia, L.L.C. v. Scout Petroleum, L.L.C., the Third Circuit picked up where it left off after Opalinski v. Robert Half International Inc. In Opalinski, the Circuit held, for the first time, that “the availability of class arbitration constitutes a ‘question of arbitrability’ to be decided by the courts—and not the arbitrators—unless the parties’ arbitration agreement ‘clearly and unmistakably’ provides otherwise.”
“[T]he disappointment of wanting to attend a concert or athletic event only to discover that the event has sold out,” does not confer constitutional standing. That was the take away from the Third Circuit Court of Appeals recent precedential decision, Finkelman v. Nat’l Football League. Addressing the always-thorny contours of constitutional standing to bring a federal lawsuit, the Court held, in the face of high Super Bowl ticket prices, that neither non-purchasers of tickets nor purchasers of “scalped” tickets at elevated prices, had standing to sue under Article III. This opinion sets up yet another obvious roadblock in the path of plaintiffs looking to bring claims—whether or not as class actions—when their perceived injuries are either non-existent or so tenuous as to make “difficulties in alleging an injury-in-fact . . . insurmountable.”
In a precedential opinion in Neale v. Volvo Cars of North America, the U.S. Court of Appeals for the Third Circuit held that putative class members need not establish Article III standing, and emphasized that the Supreme Court’s decision in Comcast v. Behrend, 133 S. Ct. 1426 (2013) “was not breaking any new ground” because “the predominance analysis was specific to the antitrust claim at issue.”
In a recent precedential 2-1 decision, Chavez, et al. v. Dole Food Company, Inc., et al., the Third Circuit emphasized the importance of the “first filed” rule and affirmed the dismissal of a Delaware suit that was “materially identical” to one first brought in Louisiana. The Circuit Court reiterated that “[t]he ‘first filed’ rule is a well-established policy of the federal courts that in all cases of concurrent jurisdiction, the court which first has possession of the subject must decide it. This rule permits the district courts, in their discretion, to stay, transfer, or dismiss cases that are duplicates of those brought previously in other federal fora.”
The Court of Appeals for the Seventh Circuit recently held that class action plaintiffs alleging injuries due to corporate hacking scandals have standing to pursue those claims in federal court, based on both actual injuries suffered repairing damage done by fraudulent charges, as well as costs of mitigating potential future harm, such as credit monitoring. Remijas v. Neiman Marcus Group, LLC, No. 14-3122 (7th Circ. July 20, 2015). As with other cases that come to the same conclusion, the court placed great emphasis on the fact that the data thieves were specifically targeting personal data, as well as the company’s admission of the breach and offer of a year of credit monitoring to those whose information had been exposed.