Happy Holiday season to our loyal readers of the Workplace Class Action Blog!

Our elves are busy at work this holiday season in wrapping up our start-of-the-year kick-off publication – Seyfarth Shaw’s Annual Workplace Class Action Litigation Report.

We anticipate going to press in early January, and launching the 2018 Report to our readers from our Blog.

This will be our Fourteenth Annual Report, and the biggest yet with analysis of over 1,350 class certification rulings from federal and state courts in 2017.  The Report will be available for download as an E-Book too.

The Report is the sole compendium in the U.S. dedicated exclusively to workplace class action litigation, and has become the “go to” research and resource guide for businesses and their corporate counsel facing complex litigation. We were again honored this year with a review of our Report by Employment Practices Liability Consultant Magazine (“EPLiC”). Here is what EPLiC said: “The Report is a definitive ‘must-have’ for legal research and in-depth analysis of employment-related class action litigation.  Anyone who practices in this area, whether as an attorney, a business executive, a risk manager, an underwriter, a consultant, or a broker cannot afford to be without it. Importantly, the Report is the only publication of its kind in the United States. It is the sole compendium that analyzes workplace class actions from ‘A to Z.’”  You can read more about the review here.  Furthermore, EPLiC recognized our Report as the “state-of-the-art word” on workplace class action litigation.

The 2018 Report will analyze rulings from all state and federal courts – including private plaintiff class actions and collective actions, and government enforcement actions –  in the substantive areas of Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act, the Fair Labor Standards Act, the Employee Retirement Income Security Act, and the Class Action Fairness Act of 2005. It also features chapters on EEOC pattern or practice rulings, state law class certification decisions, and non-workplace class action rulings that impact employers. The Report also analyzes the leading class action settlements for 2017 for employment discrimination, wage & hour, and ERISA class actions, as well as settlements of government enforcement actions, both with respect to monetary values and injunctive relief provisions.

Information on downloading your copy of the 2018 Report will be available on our blog in early January. Happy Holidays!

Seyfarth Synopsis: A somewhat bizarre event – even by this year’s standard of unusual current events – hit the news stream earlier this week, as two “Acting Directors” showed up to work on Monday morning at the U.S. Government’s Consumer Financial Protection Bureau, also known as the CFPB. In today’s vlog, Partner Jerry Maatman of Seyfarth Shaw, LLP gives our readers an explanation of the situation at the CFPB, discusses the agency’s significance for employers, and forecasts potential class action implications based on these developments.

Summary

The Consumer Financial Protection Bureau (“CFPB”) has been a controversial government agency since its authorization under the Dodd-Frank Wall Street Reform and Consumer Protection Act in 2011. Formed out of a post-2008 recession by then-Harvard Law Professor and current U.S. Senator Elizabeth Warren, the CFPB is designed – per its legislative history – to “protect consumers from unfair, deceptive, or abusive practices and take action against companies that break the law.” As of January 2017, this consumer-friendly agency had secured nearly $12 billion to 29 million consumers.

On Monday, November 27th, both Leandra English and Mick Mulvaney sent out emails to CFPB staff members claiming to be the Acting Director of the agency. This conflict stemmed from Richard Cordray, longtime Director of the CFPB, relinquishing his duties effective November 24 at midnight. Upon his departure, Cordray named English as the Deputy Director, on the assumption that she would assume leadership as Acting Director (and Cordray would block the White House from interfering). However, at the same time, President Trump used his federal appointment power under the Federal Vacancies Reform Act (FVRA) to name Mick Mulvaney as Acting Director. English subsequently filed a lawsuit seeking an injunction against President Trump and Acting Director Mulvaney in the U.S. District Court for the District of Columbia, but Judge Timothy Kelly ruled in favor of Trump and Mulvaney.

This week’s leadership debacle was not the only time the CFPB has been in the news recently. Last month, the U.S. Senate voted to repeal the CFPB’s Arbitration Rule by a narrow 51-50 vote. The existence of this broad rule effectively barred financial institutions from including a class action ban in their arbitration agreements with consumers. Similar to the agency itself, the Arbitration Rule was a strictly partisan issue. The Republican Party claimed that the rule allowed trial lawyers to “line their pockets” off unnecessary customer class actions and hurt American business. On the other side, Democrats argued that the repeal of this rule and ensuing limitations to the CFPB placed too much power in the hands of big business and hurt consumers.

As the vlog outlines, potential class action implications of this controversial agency are yet to be seen. Assuming that Acting Director Mulvaney remains in control at the CFPB, it is safe to say the agency he once called a joke “in a sick, sad way” is headed for a limitation in institutional reach and power. More importantly, though, the upcoming U.S. Supreme Court decisions regarding class action waivers in NLRB v. Murphy Oil USA, Inc. (No. 16-307), Epic Systems Corp. v. Lewis (No. 16-285), and Ernst & Young LLP v. Morris (No. 16-300) will have a profound impact on future class action litigation. One takeaway from this situation that cannot be debated, though, is Jerry’s final thought of the vlog. “We are living in interesting times these days.”

Seyfarth Synopsis: In early September of 2017, Judge Richard Posner announced his retirement from the U.S. Court of Appeals for the Seventh Circuit, a position he had held since his appointment by President Reagan in 1981.  Judge Posner served as Chief Judge of the Seventh Circuit from 1993-2000. Scholars and commentators agree that Judge Posner wrote some of the most influential legal decisions of the past 50 years.  In this video, Partner Jennifer Riley discusses the accomplished career of Justice Posner with esteemed class action litigator Jerry Maatman.  In particular, they highlight the class action legacy in Judge Posner’s opinions.

 

Summary

Prior to his retirement this Fall, Judge Posner was one of the most well-known U.S. Appellate Court justices in recent history.  He is held in high regard in the fields of law and economics, and is famous for his writings on topics such as contract law, civil rights, antitrust laws, workplace rights, and federal jurisprudence.  An author of over 40 books, Judge Posner was cited as often as any federal judge in the U.S.

In terms of class actions, Judge Posner wrote a number of famous opinions regarding the interpretation of Rule 23.  These decisions include cases such as Thorogood v. Sears, Roebuck & Co., In Re Walgreen Co. Stockholder Litigation, and Eubank, et al. v. Pella Corp.  Though the Seventh Circuit often has been regarded as a fairly conservative jurisdiction, its track record has been somewhat “certification friendly”  in terms of Rule 23 issues while Judge Posner was active.  His focus on protecting the participants in a class action and his exacting scrutiny over settlements are cemented in his legacy on the bench.  As Jerry emphasizes in the video, whether or not legal professionals agree with Judge Posner’s class action interpretations, they must certainly take account of his positions on Rule 23 issues.

Thank you to our Partners Jennifer Riley and Jerry Maatman for participating in yet another interesting vlog.  Readers of the blog know to stay tuned, as we will continue to produce content on the hottest legal issues!

 

By Gerald L. Maatman, Jr. and John S. Marrese

Seyfarth Synopsis:  In In Re Subway Footlong Sandwich Mktg. & Sales Practices Litig., No. 16-1652 (7th Cir. Aug. 25, 2017), the U.S. Court of Appeals for the Seventh Circuit overturned a district court’s approval of a class action settlement involving Subway sandwich purchasers who sued for alleged consumer fraud.  The Seventh Circuit called the settlement “worthless” in terms of alleged relief to the class. The decision illustrates that companies defending class action litigation cannot exit such lawsuits by simply “buying peace” by paying-off plaintiffs’ lawyers without providing any value to the class. In this respect, it is one of those unique rulings that is well worth a read by corporate counsel and business executive alike.

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In In Re Subway Footlong Sandwich Mktg. & Sales Practices Litig., No. 16-1652, 2017 U.S. App. LEXIS 16260 (7th Cir. Aug. 25, 2017), the U.S. Court of Appeals for the Seventh Circuit addressed the propriety of an injunctive relief settlement for a class of Subway “Footlong” sandwich purchasers.

A number of state-law consumer protection class actions were filed against Subway based on Subway’s alleged failure to ensure that its Footlong sandwiches were actually 12 inches long.  Id. at *3-5.  Limited discovery showed that the claims had little merit. Subway had always taken steps to ensure that its sandwiches were proper length, but bread length nonetheless varies due to natural and unpreventable variation in the bread-baking process.  Id. at *5.

Rather than pursue resolution on the merits, the parties reached a class-wide settlement for injunctive relief whereby Subway agreed to implement redundant and futile measures in an attempt to ensure Footlongs lived up to their name.  Id. at *7.  Plaintiffs’ attorneys received $520,000 in return for attorneys’ fees.  Id. at *8.  The district court approved of the settlement over objections by certain class members.  Id.

On appeal, the Seventh Circuit reversed, finding that the settlement was “worthless” to the class.  Id. at *14.

Case Background

In 2013, after an online photo went viral showing one customer’s Footlong Subway sandwich was in fact only 11 inches, a slew of plaintiffs’ attorneys filed putative class actions against Subway for damages and injunctive relief.  Id. at *3-4.   The class actions were consolidated in a multidistrict litigation in the U.S. District Court for the Eastern District of Wisconsin.  Id. at *4-5.

Limited discovery revealed that the claims had little merit as: (i) Subway had taken steps to ensure that its Footlongs were in fact 12 inches long; (ii) the minor variability in bread length revealed was due to natural and unpreventable variability in the baking process; and (iii) irrespective of bread length, customers received the same amount of meat, cheese, and other toppings on a sandwich.  Id. Such facts eliminated any hope of certification of a damages class under Rule 23(b)(3), so class counsel focused on certification of a Rule 23(b)(2) injunctive relief class instead.  Id. at *5-6.

The parties subsequently reached a settlement for injunctive relief whereby Subway agreed to implement measures aimed at ensuring Subway Footlongs were in fact 12 inches long, including: (i) requiring franchisees to use a measuring tool for sandwiches; (ii) requiring corporate quality-control inspectors to measure baked bread and check oven operation during regularly scheduled visits; and (iii) posting a notice on its website and in restaurants notifying customers of the variability in baked bread.  Id. at *7.

In return, the plaintiffs agreed to cap their requests for attorneys’ fees at $525,000 and incentive awards at $1,000.  Id. The district court preliminarily approved the settlement, and class counsel filed a motion seeking $520,000 in fees for class counsel and $500 incentive awards for each named plaintiff.  Id. at *8.

A professional objector who was also a member of the class objected to the settlement.  However, the district court overruled the objection, approved the settlement, and certified a class of persons nationwide who had purchased six-inch and Footlong Subway sandwiches between 2003 and 2015.  Id.

The objector appealed.

The Decision

On appeal, the U.S. Court of Appeals for the Seventh Circuit reversed the district court’s approval of the class action settlement.  Id. at *14.

The Seventh Circuit found that the settlement was “worthless” and that “[n]o class action settlement that yields zero benefits for the class should be approved[.]”  Id. at *11.  The Seventh Circuit explained that irrespective of the measures Subway promised to take under the settlement, “there’s still the same small chance that Subway will sell a class member a sandwich that is slightly shorter than advertised.”  Id. at *13 (emphasis in original).

Moreover, the Seventh Circuit found that class members’ right under the settlement to hold Subway in contempt for violating the injunction did not add any value.  Id. at *14.  “Contempt as a remedy to enforce a worthless settlement is itself worthless.  Zero plus zero equals zero.”  Id.

Finally, though not part of its holding, the Seventh Circuit expressed its disdain for the Footlong lawsuits by proclaiming that, because the consolidated class actions sought worthless relief, they “should have been dismissed out of hand.” Id. at *14 (internal quotations and citation omitted).

Implication For Employers

As shown by the Seventh Circuit’s decision, paying-off class action plaintiffs’ counsel can be a poor strategy for efficient resolution of class litigation.  If an employer wishes to realize the cost-savings of early settlement, it must ensure that settlement provides actual value to the class and fees to class counsel commensurate with that value.  Otherwise, expected cost-savings are squandered on opposing objectors (or the trial judge), with the possibility that the trial or an appellate court rejects the settlement and returns the litigation to where settlement talks began.

As an alternative approach, employers should consider efficient and realistic paths to summary judgment.  That approach can make good sense in the face of attorney-driven class litigation with no emotional appeal like the Subway case.  The Seventh Circuit’s emphatic command that meritless class actions should be “dismissed out of hand” should give employers and counsel more confidence in that regard.

fireworks-227383_960_720By Gerald L. Maatman, Jr.

Seyfarth Synopsis: In its recent review of Seyfarth’s 2017 Annual Workplace Class Action Litigation Report, EPLiC called it the “must have” resource that corporate counsel “cannot afford to be without it…”

We are humbled and honored by the recent review of our 2017 Annual Workplace Class Action Litigation Report by Employment Practices Liability Consultant Magazine (“EPLiC”) – the review is here.

EPLiC said: “The Report is a definitive ‘must-have’ for legal research and in-depth analysis of employment-related class action litigation.  Anyone who practices in this area, whether as an attorney, a business executive, a risk manager, an underwriter, a consultant, or a broker cannot afford to be without it. Importantly, the Report is the only publication of its kind in the United States. It is the sole compendium that analyzes workplace class actions from ‘A to Z.’”

We are often asked – “How does it happen – how do you produce your Annual Workplace Class Action Litigation Report”?

The answer is pretty simple – we live, eat, and breathe workplace class action law 24/7.

Each and every morning we check the previous day’s filings of EEOC lawsuits and workplace class actions relative to employment discrimination, ERISA, and wage & hour claims. We do so on a national basis, both in federal courts and all 50 states. Then we check, log, and analyze every ruling on Rule 23 certification motions and subsidiary issues throughout federal and state trial and appellate courts. This is also done on a national basis.  We put this information in our customized database; we analyze and compare the rulings on class action issues and Rule 23 topics, and then we prepare an analysis of each and every decision.

Our class action practitioners – a group of over 175 Seyfarth lawyers – contribute to the process of building the database and analyzing decisional law on a daily basis.

We have being doing this on a 24/7 basis for over 13 years, and publishing the Annual Workplace Class Action Litigation Report in the first week of January of each calendar year.

The result is a compendium of workplace class action law that is unique in its analysis, scope, and comprehensiveness.

We are particularly proud that EPLiC recognized our Report as the “state-of-the-art report” on workplace class action litigation.

Thanks EPLiC. We sincerely appreciate the kudos.

Now, even less than half way through the year, we have tracked and analyzed more class action decisions to this point in 2017 than at the halfway point in past years. On this pace, our 2018 Report will cover more decisions than ever before.

santa1Happy Holiday season to our loyal readers of the Workplace Class Action Blog!

Our elves are busy at work this holiday season in wrapping up our start-of-the-year kick-off publication – Seyfarth Shaw’s Annual Workplace Class Action Litigation Report.

We anticipate going to press in early January, and launching the 2017 Report to our readers from our Blog.

This will be our Thirteenth Annual Report, and the biggest yet with analysis of over 1,300 class certification rulings from federal and state courts in 2016.  The Report will be available for download as an E-Book too.

The Report is the sole compendium in the U.S. dedicated exclusively to workplace class action litigation, and has become the “go to” research and resource guide for businesses and their corporate counsel facing complex litigation. We were again honored this year with a review of our Report by Employment Practices Liability Consultant Magazine (“EPLiC”). Here is what EPLiC said: “The Report is a ‘must-have’ for legal research and in-depth analysis of employment-related class action litigation.  Anyone who practices in this area, whether as an attorney, risk manager, underwriter, or broker cannot afford to be without it. Importantly, the Report is the only publication of its kind in the United States.”  You can read more about the review here.  Furthermore, EPLiC recognized our Report as the “state-of-the-art word” on workplace class action litigation.

The 2017 Report will analyze rulings from all state and federal courts – including private plaintiff class actions and collective actions, and government enforcement actions –  in the substantive areas of Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act, the Fair Labor Standards Act, the Employee Retirement Income Security Act, and the Class Action Fairness Act of 2005. It also features chapters on EEOC pattern or practice rulings, state law class certification decisions, and non-workplace class action rulings that impact employers. The Report also analyzes the leading class action settlements for 201 for employment discrimination, wage & hour, and ERISA class actions, as well as settlements of government enforcement actions, both with respect to monetary values and injunctive relief provisions.

Information on downloading your copy of the 2017 Report will be available on our blog in early January. Happy Holidays!

supreme courtBy Gerald L. Maatman, Jr., Pamela Q. Devata, and Rebecca S. Bjork

This morning the Supreme Court of the United States issued an important ruling that will affect employers’ ability to defend against a variety of lawsuits brought as class actions, including employment discrimination, Equal Pay Act, Worker Adjustment & Retraining Notification Act, and Fair Credit Reporting Act cases.  In a 6-3 decision in Campbell-Ewald Co. v. Gomez, No. 14-857 (U.S. Jan. 20, 2016), which our readers can review here, the Supreme Court ruled that when a party defending against a claim in a federal lawsuit makes an offer to a named plaintiff under Rule 68 to pay money to completely cover the alleged damages he is seeking and his accumulated costs to that point, and the plaintiff does not accept it, the lawsuit nonetheless may proceed. As explained below, this decision is a game-changer because it denies defendants the opportunity to use Rule 68 to moot the claims of named plaintiffs, and therefore end the class action, by removing the basis for subject-matter jurisdiction under the “cases and controversies” clause of Article III of the U.S. Constitution.

What Is Federal Rule of Civil Procedure 68?

Rule 68 is a relatively obscure provision. Known as the “offer of judgment” rule, it shifts costs to a plaintiff who rejects an offer which is more favorable than the ultimate judgment. Sub-section (a) of Rule 68 states that at least 14 days before a trial date, “a party defending against a claim may serve on an opposing party an offer to allow judgment on specified terms, with the costs then accrued.  If, within 14 days after being served, the opposing party serves written notice accepting the offer, either party may then file the offer and notice of acceptance, plus proof of service.  The clerk must then enter judgment.”  That portion of Rule 68 is straightforward, and operates as a form of settlement to spare the courts of the obligation to carry through with the trial.

Defendants’ increasing use of Rule 68 offers in employment-related class actions arose from the language of sub-section (d), which states:  “If the judgment that the offeree finally obtains is not more favorable than the unaccepted offer, the offeree must pay the costs incurred after the offer was made.”  This provision serves to put pressure on the plaintiff to weigh the risks of proceeding to trial, given that he or she will be ultimately liable to pay the offeror the costs it incurred after the date the offer of judgment was rejected. Thus, the purpose of Rule 68 is plainly to encourage settlement and avoid unnecessary trials.  It essentially permits a defendant to make a settlement offer that raises the stakes for the plaintiff who continues to litigate.  It accomplishes this goal by providing that if the plaintiff does not accept the offer within 14 days and the ultimate judgment obtained by the plaintiff is not greater than the offer, the plaintiff must pay the statutory costs incurred by the defendant after the date the offer is made.  Simply put, Rule 68 shifts to the plaintiff the cost of litigating a lawsuit that the defendant should not have been forced to defend.

The Supreme Court recently interpreted Rule 68 in a 2013 case involving a collective action (a case entitled Genesis HealthCare Corp. v. Symczk, 133 S. Ct. 1523 (2013) – the procedures that require individuals to opt-in to obtain relief in a lawsuit brought by a representative plaintiff, such as under the Equal Pay Act.  But due to a concession made by the plaintiff in that case, the Supreme Court did not reach the key question it decided today in Campbell-Ewald.  As Justice Ginsburg, who wrote the majority opinion today put it, “Is an unaccepted offer to satisfy the named plaintiff’s individual claim sufficient to render a case moot when the complaint seeks relief on behalf of the plaintiff and a class of persons similarly situated?”  Campbell-Ewald, slip op. at 1.

What Did The Supreme Court Rule Today About Unaccepted Offers Of Judgment?

Today, Justices Ginsburg, Kagan, Sotomayor, Kennedy, and Breyer, with Justice Thomas concurring, denied defendants the option of arguing that because the named plaintiff did not accept a full settlement offer under Rule 68 before filing the motion for class certification, he or she does not have a sufficient interest in the controversy to create jurisdiction under Article III of the U.S. Constitution, and both the individual and class claims must be dismissed for lack of subject-matter jurisdiction.  The U.S. Courts of Appeal for the Third, Fourth, and Sixth Circuits had previously ruled that an unaccepted offer under Rule 68 can moot a named plaintiff’s claim in this way, while the First, Second Fifth, Seventh, and Eleventh Circuits had held it could not.  The Supreme Court entered the fray to resolve this split amongst the circuits.  Id. at 5-6.

Under Article III, only “cases” or “controversies” can create federal court jurisdiction, and if the named plaintiff no longer has a personal stake in the outcome of the lawsuit – as opposed to an interest in simply the class action aspects of it – the case must be dismissed as moot.  This was the Supreme Court’s holding in 2013 when it last interpreted Rule 68 in the context of representative lawsuits.  Id. at 6.  In Genesis HealthCare Corp. v. Symczyk, the plaintiff had conceded that the unaccepted offer of judgment made by the defendant in that case served to moot her individual claim, and the Supreme Court considered only whether the lawsuit was justiciable based solely on her interest in pursuing collective action allegations against the defendant.  The answer in that case was “no,” but Justice Kagan in dissent argued that the Supreme Court should have reached the issue that plaintiff conceded – and should have ruled that an unaccepted offer does not moot the plaintiff’s individual claim in the first place.  Campbell-Ewald, slip op. at 7-8.

The Supreme Court now has adopted Justice Kagan’s view in that dissent, and reached the issue explicitly, because Mr. Gomez did not make the same concession Ms. Symczyk made – namely, that his failure to respond to Campbell-Ewald’s offer made his individual claim moot.  Gomez had alleged that Campbell-Ewald, a marketing communications company hired by the U.S. Navy to assist in recruiting volunteers, had violated the Telephone Consumer Protection Act (“TCPA”) by retaining a subcontractor who sent text messages to his telephone encouraging him to serve in the Navy, messages he did not consent to receive.  Id. at 1-3.  He filed a class action lawsuit under the TCPA seeking to represent a nationwide class and obtain treble statutory damages plus costs and attorneys’ fees. Id. at 3.  Before his motion for class certification was due, Campbell-Ewald proposed to settle his individual claim by paying him the amount of money he could receive in statutory damages under the TCPA, plus costs, by serving on him a Rule 68 offer of judgment.  Id. at 3-4.  The 14-day time period for Gomez to respond elapsed, and Campbell-Ewald then moved to dismiss the case under Rule12(b)(1) for lack of subject-matter jurisdiction, arguing his claim had become moot because the offer provided him with complete relief, and therefore the class claims were moot as well.  Id. at 4.

Both the District Court and the U.S. Court of Appeals for the Ninth Circuit denied the motion to dismiss (but made differing rulings regarding the doctrine of “derivative sovereign immunity” that are not relevant here). Today’s majority at the Supreme Court affirmed the Ninth Circuit, and held that “Gomez’s complaint was not effaced by Campbell’s unaccepted offer to satisfy his individual claim.”  Id. at 8.  The Supreme Court did so by applying “basic principles of contract law” that an offer made but not accepted has no force, and is “only a proposal, binding neither Campbell nor Gomez.” Id. at 8-9.  It also noted that by not responding to the offer, Gomez was left “emptyhanded,” so his individual claim was not made moot by the unaccepted offer, so that claim “retains its vitality during the time involved in determining whether the case could proceed on behalf of a class.”  Id. at 11.

The dissenting Justices argued that this case presents a classic case of mootness because Campbell-Ewald offered to give Gomez the maximum amount that he could recover, “but it turns out he wants more.  He wants a federal court to say he is right.  The problem for Gomez is that the federal courts exist to resolve real disputes, not to rule on a plaintiff’s entitlement to relief already there for the taking.”  Id. slip op. at 1 (dissenting opinion, Roberts, J.). Because the plaintiff filed suit “seeking redress for an alleged injury, and the defendant agrees to fully redress that injury, there is no longer a case or controversy for purposes of Article III.”  Id. at 4 (emphasis in original).  Essentially, according to the dissenters, once an offer to completely redress the plaintiff’s injury has been made, there is no need for a court to redress that injury, and the adversity necessary to confer subject matter jurisdiction no longer exists.  Id. at 4.

What Should Employers Do Now, If They Wish To Use Rule 68 To Try And End Class Actions?

Although employers and other defendants facing class action lawsuit lost an important strategy today in the Supreme Court, due to the expense of defending against class certification motions, they still may use Rule 68 to attempt to create settlement leverage, and may even be able to re-invent the Rule 68 procedure to try to moot plaintiff’s claims.  Importantly, the majority limited the holding to situations where there is merely an “offer” to settle the claims.  They expressly reserved and did not decide the question of whether the outcome would be different if a defendant invokes Rule 68 and “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.”   Id. at 11.  Further, the majority did not eviscerate the requirement of Rule 68(d), which shifts costs of an unaccepted offer of judgment to the plaintiff going forward.  The majority noted that the “built-in sanction” for a plaintiff who rejects an offer remains: “the offeree must pay the costs incurred after the offer was made.”  Id. at 9.

So in the end, it is likely that parties defending against claims will continue to use Rule 68, and will do so in these two specific ways that ironically were explicitly suggested by Justice Ginsburg’s majority opinion.  And one prediction we will make here is that, as a result, it is likely that litigation over Rule 68 will turn on disputes over whether creating an “account payable” to a plaintiff satisfies the Rule’s requirement that an “offer” be made to the plaintiff.  Stay tuned as we continue to follow developments in this important area of class action law.

#16-3130 2016 WCAR Tickit Icon R!By Gerald L. Maatman, Jr.

Our 2016 Workplace Class Action Report is now available. At 853 pages, it analyzes 1,314 rulings and is our biggest and best Report ever.

Click here to order your copy in eBook format. Click here to download Chapter 1 on the 2015 Executive Summary/Key Trends. Our annual webinar on the Report is now set for February 1, 2015, and a link to register for the webinar is here.

The Report is the sole compendium in the U.S. dedicated exclusively to workplace class action litigation, and has become the “go to” research and resource guide for businesses and their corporate counsel facing complex litigation. We were humbled and honored by the review of our Report by Employment Practices Liability Consultant Magazine (“EPLiC”) – the review is here. EPLi said: “The Report is the singular, definitive source of information, research, and in-depth analysis on employment-related class action litigation. Practitioners and corporate counsel should not be without it on their desk, since the Report is the sole compendium of its kind in the United States.”

The 2016 Report analyzes rulings from all state and federal courts – including private plaintiff class actions and collective actions, and government enforcement actions –  in the substantive areas of Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act, the Fair Labor Standards Act, the Employee Retirement Income Security Act, and the Class Action Fairness Act of 2005. It also features chapters on EEOC pattern or practice rulings, state law class certification decisions, and non-workplace class action rulings that impact employers. The Report also analyzes the leading class action settlements for 2015 for employment discrimination, wage & hour, and ERISA class actions, as well as settlements of government enforcement actions, both with respect to monetary values and injunctive relief provisions.

We hope our loyal blog readers will enjoy it!

Executive Summary

Workplace class action litigation often poses unique “bet-the-company” risks for employers. An adverse judgment in a class action has the potential to bankrupt a business. Likewise, the on-going defense of a class action can drain corporate resources long before the case reaches a decision point. Companies that do business in multiple states are also susceptible to “copy-cat” class actions, whereby plaintiffs’ lawyers create a domino effect of litigation filings that challenge corporate policies and practices. Hence, workplace class actions can adversely impact a corporation’s market share, jeopardize or end the careers of senior management, and cost millions of dollars in defense fees. For these reasons, workplace class action litigation risks are at the top of the list of problems that keep business leaders up at night.

Skilled plaintiffs’ class action lawyers and governmental enforcement litigators are not making that challenge any easier. They are continuing to develop new theories and approaches to prosecuting complex employment litigation. In turn, the events of the past year in the workplace class action world demonstrate that the array of litigation issues facing businesses are continuing to accelerate while also undergoing significant change. Governmental enforcement litigation pursued by the U.S. Equal Employment Commission (“EEOC”) and the U.S. Department of Labor (“DOL”) also manifests an aggressive “push-the-envelope” agenda of two activist agencies, with regulatory oversight of workplace issues continuing as a high priority. The combination of these factors are challenging businesses to integrate their litigation and risk mitigation strategies to navigate these exposures. These challenges are especially acute for businesses in the context of complex workplace litigation.

Key Trends Of 2015

An overview of workplace class action litigation developments in 2015 reveals five key trends.

First, class action dynamics increasingly have been shaped and influenced by recent rulings of the U.S. Supreme Court. Over the past several years, the Supreme Court has accepted supreme courtmore cases for review – and issued more rulings than ever before that have impacted the prosecution and defense of class actions and government enforcement litigation. The past year continued that trend, with several key decisions on complex employment litigation issues, and more cases accepted for review that are posed for rulings in 2016. While the Supreme Court led by Chief Justice John Roberts is often thought to be pro-business, the array of its key rulings impacting class action workplace issues is anything but one-dimensional. Some decisions may be viewed as hostile to the expansive use of Rule 23, while others are hospitable and strengthen the availability of class actions. Further, the Supreme Court has declined several opportunities to impose more restraints on class actions, and by often deciding cases on narrow grounds, it has left many gaps to be filled in by and thereby fueled disagreements arising amongst lower federal courts. Suffice it to say, the range of rulings form a complex tapestry that precludes an overarching generalization that the Supreme Court is pro-business or pro-worker on class actions.

Second, the monetary value of employment-related class action settlements reached an all-time high in 2015. The plaintiffs’ employment class action bar and governmental enforcement litigators successfully translated their case filings into larger class-wide settlements at unprecedented levels. The top ten settlements in various employment-related categories totaled $2.48 billion over the past year as compared to $1.87 billion in 2014. As success in the class action litigation context often serves to encourage pursuit of more class actions by “copy-cat” litigants, 2016 is apt to see the filing of more class actions than in previous years.

#15-3099 2015 WCAR Infographics - Aggregate Settlement Amounts R

Third, federal and state courts issued more favorable class certification rulings for the plaintiffs’ bar in 2015 than in past years. In addition to converting their class certification rulings into class action settlements with higher values and pay-outs, plaintiffs’ lawyers continued to craft refined and more successful class certification theories to counter the more stringent Rule 23 certification requirements established in Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541 (2011), and Comcast Corp. v. Behrend, 133 S. Ct. 1426 (2013). In the areas of employment discrimination, wage & hour, and ERISA class actions, the plaintiffs’ bar scored exceedingly well in securing class certification rulings in 2015. Statistically, the plaintiffs’ bar secured class certification at an astounding rate of 75% of cases in 2015. In sum, class actions continue to be certified in significant numbers and certain “magnet” jurisdictions continue to issue decisions that encourage or, in effect, force the resolution of large numbers of claims through class action mechanisms.

#15-3099 2015 WCAR Infographics - U.S. Circuit Courts of Appeal R7

Fourth, complex employment-related litigation filings are up from past years, but by far and away, wage & hour class actions and collective actions are the leading type of “high stakes” lawsuits being pursued by the plaintiffs’ bar. Case filing statistics for 2015 reflected that wage & hour litigation outpaced all other categories of lawsuits, and increased yet again over the past year, with no end in sight of the crest of the tidal wave of case filings. Additional factors set to coalesce in 2016 – including new FLSA regulations, the impact of digital technology, and increased scrutiny of independent contractor and joint employer relationships – are apt to drive these exposures even higher for Corporate America.

Fifth, government enforcement lawsuits brought by the DOL and EEOC continued the aggressive litigation programs of both agencies. Settlement numbers for government enforcement litigation in 2015 increased substantially over 2014, as did the litigation dockets of the DOL and the EEOC. This trend is critical to employers, as both agencies have a focus on “big impact” lawsuits against companies and “lead by example” in terms of areas that the private plaintiffs’ bar aims to pursue.

Implications For Employers

The one constant in workplace class action litigation is change. More than any other year in recent memory, 2015 was a year of great change in the landscape of Rule 23. As these issues play out in 2016, additional chapters in the class action playbook will be written.

The lesson to draw from 2015 is that the private plaintiffs’ bar and government enforcement attorneys are apt to be equally, if not more, aggressive in 2016 in bringing class action and collective action litigation against employers.

These novel challenges demand a shift of thinking in the way companies formulate their strategies. As class actions and collective actions are a pervasive aspect of litigation in Corporate America, defending and defeating this type of litigation is a top priority for corporate counsel. Identifying, addressing, and remediating class action vulnerabilities, therefore, deserves a place at the top of corporate counsel’s priorities list for 2016.

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By Gerald L. Maatman, Jr.

Each year the American Tort Reform Association (“ATRA”) publishes its “Judicial Hellholes Report” and examines problems in state court systems and challenges for corporate defendants in the fair and unbiased administration of justice. The ATRA’s 2015 Report was recently published; a copy is here, as well as an executive summary here.

Insofar as the Report identifies and defines a judicial hellhole as a jurisdiction where judges in civil cases systematically apply laws and procedures in an unfair and unbalanced manner, the Judicial Hellholes Report is an important read for corporate counsel facing class action exposures. In sum, if one has to litigate class actions and make decisions with respect to venue strategy, the Report is a “must read.”

The 2015 Hellholes

The ATRA included 8 jurisdictions on its hellholes list – including, in order, (1) California, (2) New York (especially in its treatment of asbestosis litigation in New York City), (3) Florida, (4) Missouri, (5) Illinois (especially Madison County, Illinois), (6) Louisiana, (7) Texas (especially Hidalgo County, Texas and the U.S. District Court for the Eastern District of Texas), and (8) Virginia (especially Newport News, Virginia)  – where it ranked the venues as the “most unfair” in their handling of civil litigation.

The 2015 “Watch List”

The ATRA included 6 jurisdictions on its “watch list,” including New Jersey (especially Atlantic County), Mississippi (in the Delta region), Montana, Nevada, Virginia (principally in the Newport News area), and Pennsylvania (especially in Philadelphia). Just a notch below the 6 hellholes, the “watch list” jurisdictions also present significant challenges for corporate defendants.

Implications For Employers

The Judicial Hellholes Report dovetails with the experience of employers in high-stakes workplace class actions, as California, Florida, Illinois, Massachusetts, Nevada, New Jersey, New York, and Pennsylvania are among the leading states where plaintiffs’ lawyers file employment discrimination and wage & hour class actions in state courts. These jurisdictions are linked by class certification standards that are more plaintiff-friendly and generous damages recoveries under state laws.

workshopBy Gerald L. Maatman, Jr.

Happy Holiday season to our loyal readers of the Workplace Class Action Blog!

Our elves are busy at work this holiday season in wrapping up the galley proofs of our start-of-the-year kick-off publication – Seyfarth Shaw’s Annual Workplace Class Action Litigation Report.

We anticipate going to press in the first week of January, and launching the 2016 Report to our readers from our Blog.

This will be our Twelfth Annual Report, and the biggest yet with analysis of over 1,250 class certification rulings from federal and state courts in 2015. As last year, the Report will be available for download as an E-Book too.

The Report is the sole compendium in the U.S. dedicated exclusively to workplace class action litigation, and has become the “go to” research and resource guide for businesses and their corporate counsel facing complex litigation. We were humbled and honored by the review of our Report by Employment Practices Liability Consultant Magazine (“EPLiC”) – the review is here. EPLiC said: “The Report is the singular, definitive source of information, research, and in-depth analysis on employment-related class action litigation. Practitioners and corporate counsel should not be without it on their desk, since the Report is the sole compendium of its kind in the United States.”

The 2016 Report will analyze rulings from all state and federal courts – including private plaintiff class actions and collective actions, and government enforcement actions –  in the substantive areas of Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act, the Fair Labor Standards Act, the Employee Retirement Income Security Act, and the Class Action Fairness Act of 2005. It also features chapters on EEOC pattern or practice rulings, state law class certification decisions, and non-workplace class action rulings that impact employers. The Report also analyzes the leading class action settlements for 2015 for employment discrimination, wage & hour, and ERISA class actions, as well as settlements of government enforcement actions, both with respect to monetary values and injunctive relief provisions.

Information on downloading your copy of the 2016 Report will be available on our blog in early January. Happy Holidays!