The Supreme Court recently granted certiorari in Spokeo v. Robins, a case that has the potential to redefine standing in federal court. The Ninth Circuit’s February 2014 decision permitted plaintiff Thomas Robins to establish standing under the Fair Credit Reporting Act (“FCRA”) with nothing more than a speculative injury. This contravenes Supreme Court precedent, which finds standing when a plaintiff suffers a harm that is actual, distinct, palpable, and concrete; attenuated and hypothetical injuries do not constitute an injury-in-fact. The implications of the Ninth Circuit’s holding in Spokeo v. Robins have grabbed the attention of companies in nearly every industry. Their concern, as expressed by the U.S. Chamber of Commerce – granting standing to plaintiffs who have not suffered an injury-in-fact will open the flood gates to no-injury class actions brought under statutes that authorize a private right of action. But, in truth, the implications to businesses could extend beyond this.
Continue Reading No Injury? No Problem.

The Seventh Circuit has struck down a common feature of preliminary approval orders of federal class action settlements. The Seventh Circuit held that a federal court may not preliminarily enjoin class members from prosecuting related state lawsuits while the court decides whether to give final approval to the class settlement.  Adkins v. Nestlé Purina PetCare Co., No. 14-3436, 2015 WL 864931 (7th Cir. Mar. 2, 2015).

These types of preliminary injunctions are commonly used in a broad range of consumer and other class settlements, and they are particularly important when a defendant is facing several competing class actions on the same issue.  But the Seventh Circuit held that these injunctions violate the Anti-Injunction Act, 28 U.S.C. § 2283—even though the court acknowledged that federal settlements “may well collapse” if state actions go to judgment before federal courts can approve the settlements.    
Continue Reading Seventh Circuit Guts Important Tool for Resolving Federal Class Actions

On Monday, December 15, the U.S. Supreme Court issued an opinion that makes it easier for defendants to remove class actions to federal court under the Class Action Fairness Act of 2005 (“CAFA”). Dart Cherokee Basin Operating Co. v. Owens does so in three ways:

1.     A defendant’s Notice of Removal does not have to include evidentiary submissions to establish federal jurisdiction under CAFA.  A CAFA class action can be removed to federal court if the amount in controversy – i.e. value of the case – exceeds $5 million.  Under Dart, defendants need only make a “plausible allegation” that the value of the case satisfies this jurisdictional amount.  Evidence supporting the amount alleged is not required. This “plausible allegation” standard echoes the “short and plain statement” pleading standard in Federal Rule of Civil Procedure 8(a). If neither the plaintiff nor the district court contests the defendant’s allegations regarding the amount in controversy, no “evidence” is necessary.  But if the allegations are contested, both sides submit proof, and the court will decide, by a preponderance of the evidence standard, whether the amount in controversy is met.
Continue Reading Supreme Court Eases Removal of CAFA Actions