Yesterday, in the case of Maracich v. Spears, the Supreme Court ruled that the Driver’s Privacy Protection Act of 1994 (DPPA) prohibits trial lawyers from accessing names and contact information from states’ drivers license databases with the intention of soliciting potential clients for litigation. Under DPPA, the general rule is that states must keep the information in such databases private; there is a “litigation exception” for queries intended to investigate or prepare for legal proceedings, but the Court ruled that soliciting clients was not part of its scope. As I argue in a new post at Cato at Liberty, the dispute brought about a curious reversal in the polarities displayed in the case of Maryland v. King earlier this month: the pro-privacy justices in that case were more likely to be willing to dispense with privacy this time, and vice versa.
The underlying lawsuit (Kevin Russell at SCOTUSBlog and background here, here) also involves a bit of a reversal: class action lawyers are themselves being sued in a class action. The majority opinion by Justice Anthony Kennedy sketches in some of the background:
In the case now before the Court, petitioners are South Carolina residents whose personal information was obtained by respondents from the South Carolina DMV and used without their consent to send solicitation letters asking them to join the lawsuits against the car dealerships. Petitioner Edward Maracich received one of the letters in March 2007. While his personal information had been disclosed to respondents because he was one of many buyers from a particular dealership, Maracich also happened to be the dealership’s director of sales and marketing. Petitioners Martha Weeks and John Tanner received letters from respondents in May 2007. In response to the letter, Tanner called Richard Harpootlian, one of the respondent attorneys listed on the letter. According to Tanner, Harpootlian made an aggressive sales pitch to sign Tanner as a client for the lawsuit without asking about the circumstances of his purchase.
Some of these points may be relevant on remand, because the court will be asked to consider whether the original solicitation letter (marked “SOLICITATION”) had the predominant purpose of investigating the developing lawsuit, or of attracting clients for it. And this leads to the third turnabout. In the second class action, the one over privacy and the lawyers’ use of the DMV database, petitioners are seeking specified statutory damages of $2,500 for each person whose privacy was breached, which could add up to an “astronomical” (as Justice Ginsburg put it in her dissent) sum of hundreds of millions of dollars in all. Indeed, the majority opinion as well as the dissent signaled disquiet at a possible assessment of damages so far out of proportion to any actual harm done — a phenomenon we have seen again and again in statutory class or group damages cases in the past. Some trial lawyers have in the past pooh-poohed, as the griping of sore losers, complaints about mechanical multiplication of statutory damages into huge sums (e.g. FACTA, junk faxes, song piracy, California Labor Code). In this case, such multiplication could pose a threat to the fiscal well-being of some of their own number. (& welcome TortsProf, Legal Ethics Forum, SCOTUSBlog readers)
Today the Supreme Court vacated the Seventh Circuit’s decision in Sears v. Butler, the front-loading washing-machine class action case, and sent it back for reconsideration in the light of the Court’s Comcast decision, which sounds like a good outcome. Our discussion last week is here.
…2. The new front-loading washers turn out to have novel maintenance issues. In particular, they may develop musty smells unless owners practice some combination of leaving doors open to vent, wiping down surfaces, and other steps. Some consumers are irritated at this and regret the purchase, others not.
3. Trial lawyers sue all the major makers in class actions saying the new designs are defective, even though Consumer Reports rates the new category of washer “best in class” despite its drawbacks.
4. One of these class actions lands before Judge Posner at the Seventh Circuit, and he rules for letting it go forward on a theory of “predominance” (do these plaintiffs all belong in the same suit, when many are experiencing no problem at all?) that varies interestingly from what people assumed the Supreme Court’s thinking was on that subject.
5. The U.S. Supreme Court decides (coming up momentarily) whether to grant certiorari in Sears v. Butler.
There isn’t actually a strong logical chain linking 1) through 5); it’s kind of happenstance that the case threw up an issue involving predominance that the Supreme Court might find worth its attention, as opposed to merely presenting an overall profile of “hasn’t the whole system just become a crazy way to enrich lawyers?” Because “hasn’t the whole system just become a crazy way to enrich lawyers?” doesn’t count as a well-formed question for certiorari. [Ted Frank, more, Daniel Fisher] (& cross-posted, adapted, at Cato at Liberty) Update: Court vacates and remands in light of Comcast.) (& thanks to Marissa Miller, SCOTUSBlog, for roundup link)
“A retirement fund for police and firefighters in Florida is suing Lululemon Athletica Inc., taking issue with a decision by Lululemon’s compensation committee to boost the maximum payout of the executive bonus plan just before a $60 million recall of yoga pants.” [New York Post]
The cultural institution doesn’t make clear enough to visitors that its admission donation is only recommended, according to the lawyers [NY Daily News]
As I noted in this morning’s roundup, the Supreme Court spoke on Wednesday about class certification in an antitrust case from Philadelphia. Although a rather narrow and technical ruling it was not devoid of interest, or so I argue in a new post at Cato at Liberty.
Never mind the (alleged by former employee) lurid sex stuff, says Daniel Fisher, let’s talk about this law firm’s shortcomings in filing securities actions [Forbes]
Paul Karlsgodt at Class Action Blawg reports that the bill “sets forth some specific requirements for class certification that are much more exacting than those required under federal Rule 23 and most state class action rules” and summarizes the provisions as follows (quoting directly):
- clear and convincing evidence would be required to justify a grant of class certification
- orders granting class certification would have to be supported by a detailed written statement of the reasons and evidence justifying the decision
- in assessing superiority, the court would be required to consider, among other things, ”whether it is probable that the amount which may be recovered by individual class members will be large enough in relation to the expense and effort of administering the action to justify maintaining the case as a class action”
- there would be a rebuttable presumption against class certification in cases involving claims where individual knowledge, causation, and reliance are required elements
- certification of a case as a class action would not relieve any class member of the requirement of proving individual injury or damages
- class notice must include a statement of ”the possible financial consequences for the class”
- the law would expressly provide that the plaintiff would bear the initial cost of distributing notice to the class
- appeals from orders granting or denying class certification could be taken as a matter of right the same as a final judgment, and trial court proceedings would be automatically stayed pending the appeal.
11 inches is more like it, according to a bunch of lawyers who’ve filed class actions [ABC News, Chicago Tribune, ] Ron Miller is not too impressed.
P.S.: “I trust every member of the class will be able to prove that their foot is longer than their sandwich” [@eggs_over_easy]
Dan Brillman at Reuters recalls the Milli Vanilli affair, which set the standard and led to some silly but lucrative class-action suits.
Andrew Trask notices an article in The Economist on the economics of bargaining between shipowners and Somali pirates, and realizes that the insights carry over to the economics of bargaining between defendants and class action lawyers. No prizes for guessing which side in the negotiation parallels that of the lawyers [Class Strategist]
Class action lawyers have filed suit saying that contrary to its marketing, the popular beverage doesn’t actually “give you wings.” [Reuters, ABA Journal] Meanwhile, the same scientific observation that underlies the lawyers’ action — that pharmacologically, the drinks don’t seem to deliver effects readily distinguishable from those of a strong coffee — is hard to square with the oft-expressed fear that Red Bull et al pose unusual risks to consumers, although the New York Times does seem to manage to keep both ideas in its head at once. [Jacob Sullum]
More: Ron Miller, in comments (“this completely mischaracterizes the lawsuit”).
If you’re going to arrange a would-be class action on behalf of buyers dreadfully shocked that a ready-to-drink cocktail marketed as all-natural in fact included trace quantities of sodium benzoate, be sure your client does not lack “typicality.” [Alison Frankel, Reuters] Sodium benzoate is the sodium salt of benzoic acid, a spoilage retardant which occurs naturally in cranberries, plums, apples and other foodstuffs, but is typically synthesized for food use.
Roger Parloff at Fortune is out with a great piece on the Texarkana, Ark. shenanigans that led up to the Supreme Court’s decision to hear a case challenging evasion of the reformist Class Action Fairness Act (CAFA). I discuss at Cato at Liberty.