Emily Westridge Black and Jasmine Tobias 2016-12-20 17:54:49
In 2016, the U.S. Supreme Court issued two important opinions addressing Article III standing and a third opinion reaffirming the primacy of the Federal Arbitration Act, or the FAA. Article III Standing Developments In Spokeo, Inc. v. Robins,1 the court held that statutory violations alone are insufficient to confer Article III standing—instead, plaintiffs must allege concrete harm. The plaintiff in this case brought class action claims alleging that Spokeo violated the Fair Credit Reporting Act by misrepresenting class members’ personal information on its website. Spokeo moved to dismiss, arguing that the plaintiff had not alleged actual harm sufficient to meet the injury-in-fact requirement for standing. The district court agreed and dismissed the case, but the 9th Circuit reversed, holding that the plaintiff had standing because of the alleged violation of statutory rights under the FCRA. The court vacated and remanded, holding that the 9th Circuit had analyzed whether the plaintiff had alleged a particularized injury but not whether he had alleged a “real” concrete injury-in-fact. “Congress’ role in identifying and evaluating intangible harms does not mean that a plaintiff automatically satisfies the injury-in-fact requirement whenever a statute grants a person a statutory right and purports to authorize that person to sue to vindicate that right,” the court held. Instead, Article III standing requires concrete harm “even in the context of a statutory violation.” In other words, plaintiffs must allege a concrete harm apart from a “bare procedural violation.” In Campbell-Ewald Co. v. Gomez,2 the court held that an unaccepted settlement offer or offer of judgment for full relief does not moot a plaintiff’s case. This case involved a class action brought by Gomez alleging that Campbell-Ewald violated the Telephone Consumer Protection Act by sending text message solicitations on behalf of the U.S. Navy to individuals who had not opted-in to receive the messages. Before Gomez filed a motion for class certification, Campbell-Ewald offered to settle his individual claim and filed an offer of judgment pursuant to Federal Rule of Civil Procedure 68. Gomez rejected the settlement and allowed the Rule 68 offer to expire without accepting it. Campbell-Ewald then argued that Gomez lacked the Article III standing necessary to maintain the suit because the rejected offers mooted his claim. Reversing a lower court, the 9th Circuit held that the unaccepted offers did not moot Gomez’s individual and class claims. Citing “basic” contract principles, the court affirmed and held that the parties remained adverse because Campbell-Ewald’s offers had “no continuing efficacy” once rejected. Notably, however, the court refused to decide whether a claim could be mooted “if a defendant deposits the full amount of the plaintiff’s individual claim in an account payable to the plaintiff, and the court then enters judgment for the plaintiff in that amount.” We expect defendants to test this approach going forward. Enforcing the Federal Arbitration Act In DirecTV, Inc. v. Imburgia,3 the court once again reaffirmed the primacy of the FAA, holding that California customers were bound by a class-arbitration waiver in their DirecTV contracts, even though the waivers were unenforceable under California law when the contracts were entered in 2008. The court held that its 2011 ruling in AT&T Mobility, LLC v. Concepcion4 that the FAA preempts state laws prohibiting class action waivers applied to retroactively invalidate the California law. The holding in DirecTV follows a line of recent Supreme Court decisions that strongly favor arbitration agreements, including Concepcion, American Express Co. v. Italian Colors Restaurant,5 and Stolt-Nielsen S.A. v. Animalfeeds Int’l Corp.6 This decision further strengthens the FAA and solidifies the place of arbitration in business litigation. Notes 1) 136 S. Ct. 1540 (2016). 2) 136 S. Ct. 663 (2016). 3) 136 S. Ct. 463 (2015). 4) 563 U.S. 333 (2011). 5) 133 S. Ct. 2304 (2013). 6) 559 U.S. 662 (2010). EMILY WESTRIDGE BLACK is a partner in the Austin office of Haynes and Boone and specializes in complex commercial litigation, antitrust, and white-collar defense. JASMINE TOBIAS is an associate in the Dallas office of Haynes and Boone and specializes in complex commercial litigation, antitrust, and white-collar defense.
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