Business Groups Eye Court for Limits on Class Actions

      Even for Supreme Court nerds, the legal issue in the case argued on Wednesday [Oct. 14] might have seemed impenetrably technical and minimally significant at most. But the stakes in Campbell-Ewald Co. v. Gomez are actually quite high as business groups join the Michigan-based marketing company in backing a legal tactic to kill potential class action suits before they can get started.
      Jose Gomez sued Campbell-Ewald under the federal Telephone Consumer Protection Act for an unsolicited recruiting message the company sent out under contract with the U.S. Navy. The company offered to pay Gomez $1,503 for each unsolicited message and to promise to send no more. Gomez, who had filed the suit as a potential class action on behalf of other privacy-invaded text message users, never accepted the settlement.
      At the Supreme Court, the company’s high-priced Washington lawyer, former U.S. solicitor general Gregory Garre, argued the case was over: moot, in legal terms. Gomez’s attorney, Stanford law professor Jonathan Mitchell, said, in essence, not so fast. And, however technical the issue might seem, the justices divided predictably along ideological lines, with three conservatives eager to kick the case and three liberals not so much.
      The case is one of three that the Roberts Court conservatives have teed up for the term in what appears to be a continuing campaign to rein in class actions. Consumers, workers, and investors use this legal device to pool low-figure legal injuries into financially viable lawsuits against business defendants. Business interests regard them as a form of legal blackmail that companies settle to avoid expensive litigation and the risk of seven- or eight-figure damage awards.
      Two more class action cases are set for argument in November. In Tyson Foods Co. v. Bouaphakeo, the big food processing company wants to thwart a class action brought by workers who say they are being denied overtime for time spent putting on or taking off work-required protective gear (argument: Nov. 10). In the other, Spokeo, Inc. v. Robins, the search engine company is seeking to avert a class action brought under the Fair Credit Reporting Act by a Chicago man allegedly injured by inaccurate information reported about him (argument: Nov. 2).
      The U.S. Chamber of Commerce has joined in each of the cases with various other business and conservative interest groups to urge the court to rule for the companies and limit legal tactics for plaintiffs in future cases. The Chamber has an impressive 69 percent win rate with the Roberts Court: higher than the 56 percent win rate with the Rehnquist Court, according to the Constitutional Accountability Center.
      Those business victories includ several big ones that limit class actions. In the highest-profile decision, the court in 2011 spared Walmart, the nation’s largest private employer, from a big sex discrimination suit brought on behalf of women employees. The 5-4 ruling in Wal-Mart Stores, Inc. v. Dukes, divided along ideological lines, forced plaintiffs’ attorneys to slice the suit into smaller pieces under procedural rules that still blocked success.
      In last week’s case, Garre made clear that class actions are the target in Campbell-Ewald’s seemingly arcane civil procedure question. “As a practical matter,” Garre told the justices, plaintiffs in class actions “get pennies on the dollars for their claim. The big money goes to the class-action lawyers.”
      From the bench, Justice Elena Kagan tried to steer the argument away from that debate. “Both sides have these class action policy arguments,” Kagan told Garre. “But it’s important not to let those drive this pretty technical mootness question.” Kagan, along with liberal colleagues Ruth Bader Ginsburg and Sonia Sotomayor, repeatedly insisted that Campbell-Ewald had not offered Gomez “complete” relief for his claim because he still had a request for attorney’s fees and a permanent court-ordered injunction.
      From the opposite perspective, Chief Justice John G. Roberts Jr. wondered why a court should “waste its time” on Gomez’s case, but he recognized what was at stake. “This is all about class certification,” Roberts told Gomez’s attorney, Mitchell. Conservatives Antonin Scalia and Samuel A. Alito Jr. signaled their distaste for the suit just as bluntly. Alito in particular echoed Garre’s unfavorable opinion about class action lawyers.
      As usual, Justice Anthony M. Kennedy appeared likely to hold the decisive vote. In an early exchange with Garre, Kennedy indicated he was not buying the argument for ditching the case, as a matter of civil procedure. Kagan’s effort to defuse the policy arguments may have been intended to give Kennedy a narrow ground to join the liberal bloc without going back on his previous votes to limit class actions.
      The Obama administration backed the plaintiffs’ side of the case — in contrast to the Bush administration’s support for business defendants in previous class action cases. Liberal groups backed Gomez, but so did the conservative National Right to Work Legal Defense Foundation, which uses class actions to sue labor unions.
      The plaintiffs’ bar fears that a ruling for Campbell-Ewald will give business defendants a road map for blocking class actions by paying off individual plaintiffs one at a time  — in effect, for pennies on the dollar of the potential awards in a mass suit. Given the Roberts Court’s pro-business track record, they have reason to worry.