“Stand-Alone” REALLY Does Mean Stand-Alone and the Quest for Clarity

FCRA

Ninth Circuit Court of Appeals interprets the FCRA[1]

On January 29, 2019, the Ninth Circuit Court of Appeals issued a far-reaching opinion that will likely impact the hiring process of prospective employers who conduct background checks on applicants.

Desiree Gilberg (“Gilberg”) brought a class action suit against prospective employers (collectively, “CheckSmart”) alleging violations of the Fair Credit Reporting Act (the “FCRA”) and California’s Investigative Consumer Reporting Agencies Act (the “CICRAA”). The FCRA requires employers who use consumer reports as part of the hiring process to provide an applicant with a “clear and conspicuous” disclosure that the consumer report will be used “in a document that consists solely of the disclosure.” 15 U.S.C. 1681b(b)(2)(A)(i) (emphasis added). The CICRAA has similar requirements. See Cal. Civ. Code §§1785.20(5)(a) & 1786.16(a)(2)(B).

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RESPA Class Action Case Cannot Survive Scrutiny under Spokeo or Menominee

RESPA

On December 7, 2018, a federal court in Maryland issued an important ruling in a Real Estate Settlement Procedures Act (“RESPA”) case[1] (“Baehr”), granting a defense motion for summary judgment. The court dismissed the action entirely for lack of Article III standing and because the plaintiffs could not equitably toll RESPA’s statute of limitations. Foley partners and long-time blog contributors Jay Varon and Jennifer Keas served as lead counsel for the defense. This is a noteworthy development for RESPA cases and consumer class actions generally, as the court interpreted and relied on standards set forth by the U.S. Supreme Court in Spokeo, Inc. v. Robins[2] and Menominee Indian Tribe v. United States.[3] .

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Defendant Communications with Members of a Class Action Suit: Toeing the Line

Communications

As the saying goes: “Everything in moderation— especially communications from defendant employers to putative members of a class action suit.”

While this might not be exactly how the saying goes, a trial court in Massachusetts recently found that such a principle does limit how and when defendants can contact members of a putative class action.  In Frost v. Malden/Dockside, Inc.,[1] the plaintiff sought to limit the defendant employer from communicating with putative class members until the court had ruled on the issue of class certification, filing a preliminary injunction to cut off settlement communications.  The court granted the injunction, ruling in favor of protecting the settlement process from any untoward influence.

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Eleventh Circuit Creates Circuit Split as to Who Decides Whether an Arbitration Agreement Permits Class Arbitration

Arbitration

As the U.S. Supreme Court observed memorably in First Options of Chicago, Inc. v. Kaplan,[1] arbitration disputes often raise “three types of disagreement” relevant to resolution of the dispute: (1) a disagreement as to the merits of the dispute; (2) a disagreement as to whether the dispute is subject to arbitration; and (3) a dispute as to who gets to decide, in the first instance, whether the dispute is subject to arbitration.  The Court of Appeals for the Eleventh Circuit recently waded into this latter question, creating a circuit split with decisions by four other sister circuit courts of appeals.  While a majority of circuit courts have held that an arbitration agreement’s incorporation of an arbitration forum’s rules can reflect the parties’ “clear and unmistakable” intent to delegate questions of arbitrability to the arbitrator, these four other circuits have held that incorporation of forum rules does not include delegation of authority to decide whether the parties’ agreement permits class arbitration.  The Eleventh Circuit disagrees.

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Examining Class Cert. At 9th Circ. After Sali Ruling

Sali

The Ninth Circuit is at it again, blazing a different path than its sister circuits. In Sali v. Corona Regional Medical Center, 889 F.3d 623 (9th Cir. 2018), the Court reversed a district court’s order that denied class certification on the grounds that the sole evidence offered in support was a self-serving declaration that included unauthenticated documents and improper opinion testimony and was therefore inadmissible.  In ruling that evidence offered in support of class certification need not be admissible at trial, the Ninth Circuit has arguably shown again why its reputation as one of the most plaintiff-friendly jurisdictions is well-deserved.

This article addresses (1) the Sali Court’s analysis and holding, (2) how Sali directly conflicts with most other circuits, and (3) the impact this ruling is likely to have on class action defendants in the Ninth Circuit.

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