The blog will be on hiatus until after the first of the year. Happy holidays to everyone, and thanks as always for reading. As of this past October, it has been nine years of blogging. Knowing that you are all out there reading is what keeps me motivated. Best wishes to all for a happy and prosperous 2013.
Last month, the First Circuit affirmed an order granting class certification (and the judgment in favor of the class) in a tip-pooling case brought under Massachusetts law. Matamoros v. Starbucks
Corp., ___ F.3d ___, 2012 WL 5458443 (1st Cir. Nov.
In a last-ditch
effort to defeat class certification, [defendant]
posits that a class action will not
resolve the rights of all interested persons [if certain employees are not
included in the class definition]. This prognostication constitutes little
more than whistling past the graveyard. …. [T]he
mere fact that a class action will not resolve every conceivable issue touching
upon a challenged policy or practice does not require a court to throw out the
baby with the bath water. So it is
here: considerations of fairness and judicial economy are well-served by
resolving [the smaller group of employees’] claims in a class action.
In In re Insurance Installment Fee Cases, ___ Cal.App.4th ___ (Dec. 13, 2012), the Court of Appeal (Fourth Appellate District, Division One) discussed the three-way split in authority regarding the test for "unfair" conduct in UCL cases brought by consumers. Slip op. at 28-30.
The Court held that the complaint did not allege conduct by the defendant that violated the UCL under any of the tests. Id. at 30-31. The opinion also briefly addresses the "unfair" and "fraudulent" prongs.
On December 4, 2012, the Court of Appeal (First Appellate District, Division Two) handed down an interesting, but unpublished, UCL opinion. People ex rel. Herrera v. Stender, 2012 WL 6016722, No. A131625 (Dec. 4, 2012).
The San Francisco City Attorney sought to invoke the UCL in an attempt to shut down an immigration law practice allegedly headed up by an attorney who had resigned from the Bar with disciplinary charges pending. The opinion holds that the Rules of Professional Conduct can form the predicate of a UCL "unlawful" prong claim. Slip op. at 17-18. It also addresses the economic abstention doctrine (id. at 29-30) and the scope of injunctive relief available under the UCL.
In both cases, the Court of Appeal (Second Appellate District, Division Eight) affirmed orders denying class certification of meal period claims, and in doing so, badly misstated the Supreme Court's holding in Brinker. According to both opinions, Brinker supposedly held that employers need only "offer" meal periods or make them "available." In fact, however, Brinkeraccepted the workers' argument on this point, and held that employers must affirmatively relieve workers of all duty for their meal periods.
On Wednesday, the Supreme Court signaled its disapproval of the Court of Appeal's analyses in Lamps Plus and Hernandez by depublishing both opinions. Copies of my depublication requests are available here and here.
CELA also filed depublication requests in these two cases, and in Lamps Plus, a request was filed by a group of workers represented by Eve Cervantez.
My post from September mentioned a third Brinker "grant and hold" case, Muldrow v. Surrex Solutions Corp., 208 Cal.App.4th 1381 (2012). The depublication request in that case remains pending.
Yesterday, I had a report by Eric Kingsley on Tuesday's Ninth Circuit en banc argument in Kilgore v. KeyBank National Assn., No. 09-16703 (9th Cir.).
Today, I have this report by Edie Mermelstein of the Law Offices of F. Edie Mermelstein in Huntington Beach. Thank you, Edie!
To kick off oral argument, Andrew Pincus, appearing as amicus for KeyBank,
representing the Chamber of Commerce, was asked by Chief Judge Kozinski if Concepcion
is distinguishable because a public injunction is a remedy and not a
claim. Pincus, who argued on behalf of AT&T at the US Supreme Court
in Concepcion, responded by citing to Mastrobono v. Shearson
Lehman Hutton, Inc. (1995) 514 US 52, where punitive damages (a
remedy) was preempted by the FAA.
Judge Smith then asked Pincus if Concepcion is controlling, and if
so why? Judge Smith wanted to know what public injunction Plaintiffs were
seeking where the helicopter training school in question had already shut down,
asking “what are we protecting the public from?” Judge Hurwitz questioned
whether Concepcion bars any state rule from limiting arbitration, even
where public health and safety are concerned. Pincus responded that a
public injunction requires class certification raising UCL standing
requirements after Proposition 64, and contending class arbitration falls
squarely within the holding in Concepcion. Judge McKeown brought
up the savings clause under the FAA raising unconscionability as a general
contract defense. Judge Callahan followed up with a question to Pincus
asking whether a court or an arbitrator should decide the issue of
unconscionability. Pincus was quick to respond the Court should decide
whether an arbitration provision is deemed unconscionable.
Judge McKeown asked about whether there is an intersection between unconscionability
and public policy, raising the U.S. Supreme Court’s recent decision in Marmet
Health Care Ctr., Inc. v. Brown, (2012) 132 S. Ct. 1201. Judge
McKeown pondered whether a violation of public policy, as unconscionable was
left open by Marmet. Then Judge Smith asked if the panel should
withhold its opinion until the Supreme Court rules on American Express Co.
v. Italian Colors Restaurant. Pincus distinguished the case at bar
on state law versus federal law vindication of rights, urging the panel to find
the Amex case has no relevance on that basis.
The argument then shifted to Cruz/Broughton with Judge Watford
attempting to elicit a response to whether individual
arbitration can be forced when a public injunction is being sought. Pincus pointed
again to the use of the class action device as mandated by Proposition 64,
pointing specifically to Business and Professions Code §17203. Judge
Callahan asked Pincus if the panel were to agree with the Defendant’s position
and overrule Broughton and Cruz would it only be binding in federal courts or would it overrule California law. Pincus answered it
would only be persuasive authority in California.
Splitting the argument, Scott O’Connell stepped in for KeyBank stating the
panel need not overrule Broughton/Cruz because Plaintiffs here are
simply looking for debt relief and can obtain all relief with no need for
representative status because KeyBank no longer makes student loans for
vocational training. Judge Watford then asked if the panel should wait
for the California Supreme Court to rule on Iskanian. Shockingly,
KeyBank’s counsel was not familiar with the California case, but stated that
under Concepcion and the supremacy clause, the case should be sent to
arbitration. Judge Fletcher questioned whether the type of relief
sought in this case is a public injunction within the meaning of Cruz.
Judge Pregerson then raised Proposition 64 standing requirements and
commented that a representative must be injured in order to seek a public
injunction. Judge Watford asked O’Connell how he could obtain an order in
arbitration forbidding a Defendant from continuing unlawful activities.
O’Connell admitted, “you can’t get it.”
Judge Fletcher keyed in on the Proposition 64 standing issue, pointing out
that only people who have not been victims, because they have not signed
contracts and are not subject to the arbitration clause, could bring a
representative action; however, after Proposition 64 a representative must be
injured by the business practice. O’Connell admitted that there would be no
prospective relief available where there is a general fraud on the public and
an arbitration clause, unless brought by the Attorney General. The
discussion then moved to additional standing concerns revolving around Article III standing and Judge Hurwitz noted that Defendant had removed the case to federal court and there is a statutory issue. No resolution to this issue
Judge McKeown zeroed in on the specific arbitration provision at issue in
the KeyBank agreement seeking clarification on the opt-out provision and the
60-day period in which to opt out and retain full access to the courts. Judge
McKeown then circled back around to where do public policy and
unconscionability intersect, adding a new query as to whether choice of venue
could also be considered unconscionable. O’Connell relied on the
Supremacy Clause and reiterated that all claims must be arbitrated where a
valid arbitration agreement is in place.
Judge Hurwitz raised Cruz/Broughton again and asked whether the
question should be certified to the California Supreme Court. O’Connell
did not believe the question needed to be certified where there was no
possibility of future harm, because KeyBank no longer funds loans to trade and
James C. Sturdevant appearing for Plaintiffs launched into his opening and
stated that Broughton/Cruz should be analyzed by California. Judge
Tallman was the first to interrupt Sturdevant’s prepared argument asking what
could be wrong with compelling the individual representatives to arbitration,
and then litigate the public injunction claim to restrain the business
practice after. Sturdevant was adamant that only public injunctive relief
was requested in the operative complaint. Judge Tallman observed the
individual representatives actually wanted individual relief in the form of debt
relief. Chief Judge Kozinski echoed that the Plaintiffs here were trying
to get out from under their student loan debt and he could not see how it is not
an individual claim. Sturdevant made an attempt to reframe relief sought
as prohibiting KeyBank from debt collection enforcement and restraining KeyBank from negatively affecting plaintiffs’ credit reporting. Judge McKeown
attempted to clarify the relief as (1) declaratory relief so plaintiffs no
longer owe money and (2) separately to correct KeyBank’s business
practices. Chief Judge Kozinski asked Sturdevant why plaintiffs could not
litigate before an arbitrator. Sturdevant stood firm that Plaintiffs were
seeking a public injunction and therefore their substantive rights would not be
vindicated. Chief Judge Kozinski re-asked the same question and
Sturdevant again stood firm that the claims cannot be arbitrated because all
relief sought would take the form of a public injunction.
“California, an unusual cart”
Chief Judge Kozinski posed the question, “What’s wrong with putting the cart
before the horse?” The precursor to the horse and the cart analogy was
ushered in by Judge Hurwitz repeatedly pressuring Plaintiffs’ counsel to
concede liability of individual claims to an arbitrator, and only after an
individual plaintiff succeeds in arbitration, would a claim for public
injunction be brought in district court. Plaintiffs’ counsel would not
concede and repeated on more than one occasion that it would eliminate
plaintiffs’ substantive rights. Judge Tallman pushed on the form of
relief and questioned Sturdevant about whether the initial complaint sought
solely public injunctive relief. Sturdevant referred back to the second
and third amended complaints and could not answer as to the original
Judge Smith shifted the focus back to the class vehicle and sought agreement
that without the class allegations, all plaintiffs have are individual
claims. Sturdevant answered in the affirmative, but again clarified that
the plaintiffs would not be able to vindicate all their substantive
rights. Judge Smith questioned the need for prospective relief noting KeyBank no longer issues these types of notes. Sturdevant stated that KeyBank continues to engage in school funding and continues to violate the FTC’s “Holder Rule” [16 C.F.R. § 433.2] which is the predicate violation under the UCL. Judge
Smith admitted to struggling with public injunction based on the case-specific
facts and raised bifurcation as an option. Sturdevant repeated
bifurcation is not a viable option where a party then cannot vindicate all
of its statutory rights.
Chief Judge Kozinski asked whether California could eliminate the authority
of an arbitrator with respect to public relief and stay consistent with the
FAA. Sturdevant stated that this is not a question in this case. Chief Judge
Kozinski asked Sturdevant to answer his question. Sturdevant stated that
it was not like being at the optometrist. Chief Judge Kozinski said that
the panel’s opinion most certainly would be like being in front of the
optometrist, as the answer to the question will be either “yes” or “no.”
Chief Judge Kozinski continued to push and wanted to hear Sturdevant’s reply to
whether California can restrict arbitration. Sturdevant finally replied
that California couldn’t take away a fundamental right.
Judge Pregerson, who commented that he has known Sturdevant for years, posed
the question, “what is the bottom line of your lawsuit?” Sturdevant
answered that the lawsuit is to protect the students and others like them. Judge
Pregerson inquired as to why each of these students cannot arbitrate
individually. Sturdevant answered that the operative complaint does not
seek individual relief, but seeks broad public relief. Judge Pregerson finished
up questioning asking what would the injunction restrain KeyBank from
doing? Sturdevant stated that KeyBank would be restrained from making
loans in the future that violate the Holder Rule.
Judge Hurwitz continued with fact intensive clarification naming two
distinct groups (1) helicopter students and (2) future students. Noting
there are approximately 500 people in the first group. As for the future
group, Judge Hurwitz inquired as to the ongoing business behavior and whether
the alleged bad acts are continuing. Sturdevant pointed to the third
amended complaint as the operative complaint and deferred to needing to find
the evidence, but the allegations are that after the Holder Rule was
violated, KeyBank continued to pay money to the school, unnecessarily
Judge McKeown brought the discussion back to standing and again cited the Marmet
case and back to Concepcion. Sturdevant commented in Marmet West
Virginia prohibited any arbitration clauses in all nursing home claims. Judge
McKeown wanted to know why this case is not the same. Sturdevant stated
that there is an inherent conflict where the claims for relief cannot be issued
or administered by an arbitrator.
Judge Tallman asked why the plaintiffs cannot first go to arbitration and
then go to the District Court and get enforcement and relief. Chief Judge
Kozinski wanted to know why arbitrators cannot issue injunctive relief.
Sturdevant argued that there is an inherent conflict. Chief Judge
Kozinski asked the same question again. Judge Christen asked whether an
arbitrator can enter or enforce a public injunction. Sturdevant again
stated that there is an inherent conflict and there are no cases to support
such an act. Judge Pregerson commented, “if they did it they’d be out of
KeyBank’s counsel closed with a citation to Preston v. Ferrer
(2008) 552 U.S. 346, with Chief Judge Kozinski noting case-specific facts
of the cooling off period of 60 days.
Questioning closed with Judge Pregerson asking why KeyBank got out of the
vocational student loan business and why KeyBank continued to pay the
J. Pincus– Chamber of Commerce, Amicus for KeyBank
Yesterday, an en banc panel of the Ninth Circuit heard oral argument in Kilgore v. KeyBank National Assn., No. 09-16703 (9th Cir.). The audio recording of the argument has already been posted and is available at this link.
I've received two reports on the argment from attorneys who attended in person. First, Eric Kingsley of Kingsley & Kingsley in Encino provided the following detailed recap:
Despite the pomp and
circumstance of an eleven-judge en banc panel of the 9th Circuit, it appears
the Circuit is not likely to significantly alter the arbitration
jurisprudence. Despite an hour of lively debate on the intricacies of the
Broughton/Cruz exemption and the effect of the United States Supreme Court’s
opinion in AT&T v. Concepcion, including a lengthy discussion of
whether or not Justice Thomas joined in the majority view (he did reluctantly),
the court seems inclined to kick the can down the road and find a way to stay
the action or avoid reaching the ultimate issue. The issue to be decided
was whether or not there is an exemption to arbitration found in two California cases -- Broughton and Cruz – which carved out an exception for public
injunctions, as not being subject to arbitration.
All of the judges, except for
Judge Murguia, had something to say, and the two most junior jurists, Judges Watford and
Hurwitz, took a very active role in the questioning. Judge Kozinski, however,
seemed to set the tone from the start and throughout the questioning. At
the outset of the arguments, he questioned the Chamber of Commerce’s
lawyer, Andrew Pincus (the attorney who also argued the Concepcion case for
AT&T in front of the Supreme Court), about whether a public injunction was
a claim or a remedy. Later, Judge Kozinski went toe to toe with Plaintiff’s
counsel regarding whether California could categorically ban arbitrators from
ordering injunctive relief. The direct question was evaded and was never
really answered by Plaintiff’s counsel James Sturdevant as he attempted to joke
back to the Chief Judge about it not being an ophthalmologist’s office.
(In other words a Yes or No question). Judge Kozinski retorted that the opinion
would answer this very question and counsel was free to answer the question or
not or simply state that he didn’t know. He was visibly agitated and
condescending and not pleased with Plaintiff’s counsel’s evasiveness.
On the flip side, in the most
difficult moment for the defense, Judge Hurwitz challenged Andrew Pincus about
the intersection of arbitration and health and safety concerns. He posed
a hypothesis about poisoned water and whether an arbitration agreement would be
the only way for a consumer to assert a claim against a water district.
Pincus, unflinching, indicated that yes, arbitration would be the only
remedy (gotta love arbitration don’t you, the FAA trumps poisoned water).
Judge Hurwitz seemed unconvinced by this explanation. Later Judge Watford
asked defense attorney Scott O’Connell a similar question in terms of who could
address the alleged misconduct if no class member could as they were all
subject to individual arbitration under Concepcion. The answer
from defense counsel was that the Attorney General could bring a claim, or
someone who did not sign the arbitration agreement (everyone did here).
Defendant’s main argument was that the FAA is supreme and would trump any state
attempts to subdue arbitration even in sympathetic cases. However,
these exchanges likely will not likely find their way into the opinion because
the Plaintiff had bigger problems.
Judge McKeown asked both sides on
several occasions how the unconscionability analysis might intersect with
public policy. This seemed the best opening for Plaintiff, but the
exchanges did not seem to satisfy her that it rose to the level that could
justify striking the agreement. Judge Smith followed up by asking if the
court might consider staying this action so the Supreme Court could rule on the
American Express v. Italian Colors case in which certiorari was recently granted
and perhaps resolve the issue of “vindication of
rights.” Judge Watford brought up the issue of severing the claims and
allowing the District Court to supervise the public injunction once the
arbitrator ruled on the merits of the individuals’ claim. At times
throughout the argument, Judges Kozinski, Tallman, Smith and even Hurwitz
seemed to endorse this approach. Judge Kozinski stated, in response to
Plaintiff’s counsel’s argument, that perhaps putting the cart before the horse
made the most sense here. He joked that this is certainly not unheard of
Judge Hurwitz, also signaling
that it may be easier to refrain from wading through deeper waters, asked if
this court might consider waiting for Iskanian to be decided by the
California Supreme Court. To the audible shock of many in the gallery,
defense counsel was not familiar with that particular case. To be fair to
Mr. O’Connell, he is from New Hampshire. However, if you travel to
California to argue a case in front of an en banc panel of the 9th Circuit
regarding an issue of California law, you should know of similar issues being heard in that state’s supreme court. I was embarrassed for him.
While both sides agreed with the
court that it was the court’s decision on unconscionability and not the
arbitrator’s, there was generally very little discussion about the
Judge Hurwitz asked a series of
questions of defense counsel including whether the question should certified to
the California Supreme Court and whether the 9th Cir. could conclude that the
Broughton/Cruz exception in this case was not met. Obviously defense
agreed with the latter, but concluded that certification did not make sense
Plaintiff had a very tough
time. I think this was due in part to Plaintiff’s counsel fighting the
panel where they agreed with him (or at least many sympathetic members).
He also failed to convey the crux of his argument until late in the
argument. He had rehearsed talking points about the fact that sending the
case to arbitration first to deal with the individuals’ claims was not possible
because that would mean giving up a substantive right. To summarize
briefly, the Plaintiffs were students of a vocational school who had loans
through the bank Defendant. Plaintiffs claimed that Defendant had violated a particular federal law and brought a single claim – under
B&P §17200 – seeking an injunction ordering the Defendant (1) not to
enforce its loans, and (2) not to report the defaults to credit reporting
agencies for all students who had these loans. As such, Plaintiffs
argued that the case was not appropriate for arbitration because the arbitrator
could not decide whether public injunctive relief was appropriate. At
first the Judges were confused. Then Judge McKeown, in an apparent
attempt to clarify what relief was being sought, stated that in reality what
was being asked for was a declaratory judgment stating that Defendant can’t
collect the money from the individual Plaintiffs. The Judges' recurring
questioning made it clear that they thought the arbitrator could decide that
question first and then let the court deal with the public injunction if
necessary. Obviously this would destroy the Plaintiffs’ case, but
Plaintiffs’ counsel kept pounding the point that the relief sought could not
properly be awarded by the arbitrator. While it’s easy for me to Monday
morning quarterback, he needed a different approach in order to win the
day. He pounded the substantive right argument to death and in my opinion
the panel just wasn’t buying it.
Judge Pregerson got into the argument
late, mowing over some of his colleagues who repeatedly yielded to the most
senior judge on the bench. At one point he answered the Plaintiffs’
question. When asked by Judge Christen why the arbitrator could not order
injunctive relief, Judge Pregerson replied “if they did it, they would be out
of business in the future.” While this comment rings true regarding a high-stakes case and the likelihood of a courageous arbitrator issuing an injunction
to stop illicit behavior, some of Judge Pregerson's other comments did not seem to
indicate he favored the Plaintiffs’ position.
In the end, I expect
they will stay the case pending one of the other cases before our, or the nation’s,
highest court. Also possible is a very narrow opinion that says that the
Broughton/Cruz exception does not apply to this case at all. Alternatively, they might not get
that far, though the arguments flow from the same analysis, and instead they may order the arbitration bifurcated. The arbitration will go first and if the Plaintiffs win, the
court can supervise the issuance and compliance with the injunctive
relief. What I can predict with some certainty is that this case is
unlikely to find its way to the U.S. Supreme Court because this panel is going
to play it safe.
Thanks, Eric, for providing this report. Tomorrow I will have the second report.
In Johnson v. Meriter Health Services Employee Retirement Plan, ___ F.3d ___ (7th Cir. Dec. 4, 2012), the Seventh Circuit (Judge Posner) affirmed class certification under Rule 23(b)(2) of various claims seeking reformation of a defined benefit pension plan under ERISA. The opinion has some interesting language on subclasses as well as on Dukes, which Judge Posner distinguishes.
Meriter argues that because the subclasses make so many different claims, the class action does not satisfy the requirement of Rule 23(b)(2) that the defendant have “acted . . . on grounds that apply generally to the class.” The requirement applies to subclasses, however, rather than to the class action out of which the subclasses have been carved. “[T]he fact that a class is overbroad and should be divided into subclasses is not in itself a reason for refusing to certify the case as a class action.” Culver v. City of Milwaukee, 277 F.3d 908, 912 (7th Cir. 2002). One can if one wants think of this class action as actually 10 separate class actions and apply the standard in Rule 23(b)(2) to each of them—and each of them satisfies the standard.
Slip op. at 9. The discussion of Dukes at pp. 10-17 of the slip opinion is worth a read. The whole thing makes me nostalgic because I wrote my law review article on an ERISA issue and today is probably the first time since then that I have had occasion to type the phrase "defined benefit pension plan."
In Stolt-Nielsen v. AnimalFeeds International Corp., 130 S. Ct. 1758, 1776 (2010), this Court made clear that "class-action arbitration changes the nature of arbitration to such a degree that it cannot be presumed the parties consented to it by simply agreeing to submit their disputes to arbitration." In this case, an arbitrator concluded that the parties affirmatively consented to class arbitration on the basis of a contract provision stating: "No civil action concerning any dispute arising under this Agreement shall be instituted before any court, and all such disputes shall be submitted to final and binding arbitration." The question presented is:
Whether an arbitrator acts within his powers under the Federal Arbitration Act (as the Second and Third Circuits have held) or exceeds those powers (as the Fifth Circuit has held) by determining that parties affirmatively "agreed to authorize class arbitration," Stolt-Nielsen, 130 S. Ct. at 1776, based solely on their use of broad contractual language precluding litigation and requiring arbitration of any dispute arising under their contract.
In April, the Third Circuit affirmed the district court's ruling that the arbitrator had not exceeded his authority in finding that the parties' agreement authorized class arbitration. Sutter v. Oxford Health Plans LLC, 675 F.3d 215 (3d Cir. 2012). The underlying dispute is a breach of contract claim related to the reimbursement rates paid by Oxford Health to physicians and other heathcare providers for primary care services. The arbitration clause appeared in the "primary care physician agreement" between the healthcare providers and Oxford Health.
The defendant's main argument was that under Stolt-Nielsen, class arbitration was permitted only if the contract explicitly authorized it. The Third Circuit declined to interpret Stolt-Nielsen so narrowly:
Stolt-Nielsen did not establish a bright line
rule that class arbitration is allowed only under an arbitration
agreement that incants "class arbitration" or otherwise
expressly provides for aggregate procedures.
Stolt-Nielsen, 130 S.Ct. at 1776 n. 10; Jock v.Sterling Jewelers Inc., 646 F.3d 113, 124 (2d Cir. 2011)
(holding that an arbitrator did not exceed her powers by ruling
that class arbitration was allowed under an agreement lacking
an express class provision). The Court underscored this point,
writing, "We have no occasion to decide what contractual basis
may support a finding that the parties agreed to authorize
class-action arbitration. Here, as noted, the parties
stipulated that there was `no agreement' on the issue of
class-action arbitration." 130 S.Ct. at 1776 n. 10; seealso id. at 1783 (Ginsburg, J., dissenting) ("[T]he Court
does not insist on express consent to class arbitration.").
Instead, Stolt-Nielsen established a default
rule under the Federal Arbitration Act: "[A] party may not be
compelled under the FAA to submit to class arbitration unless
there is a contractual basis for concluding that the party
agreed to do so." Id. at 1775 (emphasis in
original). Absent a contractual basis for finding that the
parties agreed to class arbitration, an arbitration award
ordering that procedure exceeds the arbitrator's powers and
will be subject to vacatur under § 10(a)(4).
Id. at 222 (footnote omitted). The Court agreed with the arbitrator that the arbitration clause was broad enough to support the conclusion that the parties agreed to class arbitration. The clause read:
No civil action concerning any dispute arising under this Agreement
shall be instituted before any court, and all such disputes shall be
submitted to final and binding arbitration in New Jersey, pursuant to
the Rules of the American Arbitration Association with one arbitrator.
Id. at 223 (emphasis added). The clause contained no language prohibiting class actions, and the arbitrator reasoned that the phrase "all such disputes" was broad enough to include them. The Third Circuit held that the arbitrator's interpretation of the agreement was not "totally irrational," which was all that affirmance required. Id. at 224-225.
In oral arguments Tuesday, state Supreme Court justices appeared sympathetic to a plaintiff who was barred from suing Canon Business Solutions Inc. because he failed to bring his lawsuit within a four-year statute of limitations time period.
The big picture question before the court was whether the multiple alleged overcharges by Canon were one distinct act, or if each overcharge was a separate act that triggered the statute of limitations clock anew. Aryeh's lawyers, adopting a position articulated by the dissenting justice in the appellate court, argued each overcharge should be considered a separate act.
The justices spent little time on a second question that had garnered the interest of many consumer attorneys: whether courts should take into account "delayed discovery," or the time the plaintiff finds out about the alleged unfair activity, in Unfair Competition Law cases.
The Recorder's blog, Legal Pad, had an interesting post last Saturday on the makeup of the en banc panel in Kilgore v. KeyBank National Assn., No. 09-16703 (9th Cir.).
We're about to find out more about the Obama judges, as four have been assigned to an en banc
panel in a closely watched case on consumer arbitration contracts .... With the rest of each
11-member en banc panel more or less evenly divided among
established conservatives, liberals and moderates, the Obama appointees
as a group would appear to hold the balance of power in each case.
Judge Mary Murguia, appointed to the court in 2010, and Judges Morgan
Christen, Paul Watford and Andrew Hurwitz, all of whom arrived this
year, will join Chief Judge Alex Kozinski and Judges Harry Pregerson, M.
Margaret McKeown, William Fletcher, Richard Tallman, Consuelo Callahan
and Milan Smith for argument Dec. 11 in Kilgore v. KeyBank National Association. The case will determine whether the Federal Arbitration Act preempts a
California rule that prohibits the arbitration of claims for broad,
public injunctive relief.
The case is set for argument before the Ninth Circuit in Pasadena on December 11, 2012 at 10:00 a.m. Some of the briefs are available at this link.
On September 4, 2012, in Dennis v. Kellogg Co., 2012 WL 3800230 (9th Cir. Sept. 4, 2012), the U.S. Court of Appeals for the Ninth Circuit reissued its July 2012 opinion striking down a consumer class action settlement solely on the basis of a faulty cy pres distribution provision. Among other things, the court found that the cy pres distribution of Kellogg product to "unspecified charities involved in feeding the indigent" did not bear a sufficient nexus to the claims in the false advertising action to support a class settlement. The panel of experts will discuss the Dennis decision and others, and offer their insights into the future of class settlements containing cy pres provisions.
Aaron Blynn,Genovese Joblove & Battista P.A.
Alexis Amezcua, Morrison Foerster
Don Beshada, Beshada Farnese LLP
Lee Peeler, Advertising Self-Regulatory Council, Council of Better Business Bureaus
Today at 10:00 a.m. Eastern, the U.S. Supreme Court will hear oral argument in Genesis HealthCare Corp. v. Symczyk, no. 11-1059. This case involves whether a defendant may "pick off" the named plaintiff in a FLSA collective action by offering full, individual relief to that plaintiff.
Oral argument transcripts are generally posted on the Supreme Court's website later the same day. The transcript in this case should be available this afternoon at this link.
My previous post on this case is here. The case is worth following because it could potentially impact how courts approach attempts to "pick off" the class representative in a Rule 23 class action. Last year, the Ninth Circuit held that such "picking off" is not permitted. Pitts v. Terrible Herbst, Inc., 653 F.3d 1081 (9th Cir. 2011) (discussed in this blog post). In this case, the Third Circuit agreed in the FLSA context. Symczyk v. Genesis HealthCare Corp., 656 F.3d 189 (3d Cir. 2011).
SCOTUSblog has a detailed oral argument preview as well as a case page with links to all of the briefs. One interesting development is that the Solicitor General filed an amicus brief supporting affirmance and has requested oral argument time.
UPDATE: The ever-reliable SCOTUSblog has a detailed recap of the argument.