The Telephone Consumer Protection Act remains a hotbed of class action litigation. With statutory damages of up to $1,500 for each call, text or fax, the potential exposure creates the threat of annihilating damages for some businesses. This article discusses an additional, often overlooked, tool for defendants in TCPA cases — moving to compel arbitration. It may be useful in cases that raise the threat of what former Second Circuit Judge Henry Friendly once referred to as “blackmail settlements”: cases where the potential damages are so overwhelming that even defendants with meritorious defenses may feel compelled to settle.
On January 22, 2018, the United States Supreme Court, quietly and without commentary, declined to review the Ninth Circuit Court of Appeals’ recent decision in the storied Spokeo, Inc. v. Robins case. In 2016, the Supreme Court issued a decision in the same case to provide guidance on how federal courts should analyze Article III standing in cases alleging statutory violations.
Last week, a split Ninth Circuit panel in In re Hyundai and Kia Fuel Economy Litigation vacated the certification of a nationwide class for settlement purposes because the district court failed to address choice-of-law issues and the variations in the relevant state laws, and also improperly “presumed” reliance on allegedly “misleading advertising.” The case demonstrates the significant obstacles to certifying a nationwide class. Judge Sandra Ikuta’s majority opinion, joined by Judge Andrew Kleinfeld, also emphasizes the duty to conduct a “rigorous analysis” into whether a proposed class meets Rule 23’s requirements before granting certification, even in the context of certifying a class for settlement purposes.
Earlier this month, Judge Leinenweber of the Northern District of Illinois rejected a named plaintiff’s attempt to bring a nationwide class action, basing his decision on the Supreme Court’s decision last June in Bristol-Myers Squibb Co. v. Superior Court of California (“Bristol-Myers”). As discussed in a previous post on this blog, the Bristol-Myers decision—and now its lower court progeny—bolsters a jurisdictional ground for defendants resisting class actions purporting to cover claims of proposed multi-state classes comprised of non-forum residents.
The Ninth Circuit’s recent decision in Italian Colors Rest. v. Becerra (“Italian Colors”), upheld an as-applied constitutional challenge to a California law prohibiting retailers from imposing a surcharge on customers paying with a credit card. In a unanimous decision, a three-judge panel for the Ninth Circuit agreed with the district court that an over 30-year-old statutory law violated the merchant plaintiffs’ First Amendment rights by prohibiting them from posting a single “sticker price” and then charging an extra fee for consumers who chose to use a credit card to make payment. The Ninth Circuit thus set the stage for similar challenges pending across the country.