Seyfarth Synopsis: On Monday, March 26, the U.S. Supreme Court focused on two notable class action issues, each with the potential to significantly impact workplace litigation. In today’s video vlog, Partner Jerry Maatman of Seyfarth Shaw breaks down the importance of class action tolling issues and the concept of “cy pres” settlements for employers.
The first Supreme Court case discussed in the video is China Agritech v. Resh, et al. No. 17-432. This case involves allegations of securities fraud by a class of shareholders against a Chinese fertilizer company. Plaintiffs failed to gain class certification in two successive class actions, and while these lawsuits were pending, the two-year statute of limitations for securities fraud claims expired. Nevertheless, the 9th Circuit allowed a third class action to move forward on the basis of American Pipe tolling, and Defendant China Agritech appealed to the Supreme Court. The Supreme Court’s consideration of the boundaries of American Pipe tolling in the China Agritech case may well have profound implications for workplace class action litigation.
Next, we analyze the legal concept of “cy pres” distributions in class action settlement. “Cy pres” is a French doctrine translated to mean “as close as possible.” This notion was originally intended to apply to trust-law and the division of excess charitable funds. However, it has been adapted by the Plaintiffs’ bar to apply in situations involving class action settlements without a clear beneficiary. On March 26, the Supreme Court denied certiorari in two matters addressing this topic, including Tavares et al. v. Gene Whitehouse et al., No. 17-429, and the combined cases Tingle v. Perdue, No. 17-807 and Mandan v. Perdue, No. 17-897. The Perdue cases considered the distribution from a $380 million settlement of a landmark 2010 Native American discrimination case known as the Keepseagle.
As Jerry discusses in the video, the outcomes of both debates have the potential to shift important facets of class action litigation. Notably, for the China Agritech case, the Supreme Court might re-shape the landmark 1974 decision in American Pipe & Construction v. Utah, 414 U.S. 538 (1974). Regarding “cy pres” settlement distributions, though the Supreme Court denied review in this instance, the debate is too pressing in respect to class action litigation to be avoided for long. Make sure to watch the video above for Jerry’s complete analysis on both topics!