The Supreme Court’s Class Action Jurisprudence

Abstract

Class action filings in the federal courts surged after the Class Action Fairness Act of 2005 (CAFA) took effect, and resolution of major controversies in a single multidistrict litigation became the norm. Correspondingly, since 2010, the Supreme Court has shown an increased interest in class action procedure. As with other cases, when the Court grants review in a class case it reverses more often than not—a pattern that makes the certiorari stage critical to litigants. Although the Justices in recent cases reached consensus on minor points of class action procedure, their opinions diverged on more significant issues. With Justices Gorsuch, Kavanaugh, and Barrett now on the Court, strict constructionism will no doubt influence how class action law develops. Even before these Justices were seated, the Court’s decisions reflected a divide in how the Justices view the class action device. The 5‒3 decision in American Express Co. v. Italian Colors Restaurant demonstrates these contrasting views. 570 U.S. 228 (2013). A restaurant alleging an antitrust tying violation filed a class action against American Express on behalf of similarly situated merchants. Justice Scalia’s opinion for the Court held that the restaurant could not nullify a provision in its contract with American Express mandating that all disputes between them be decided in individual arbitration. Rejecting the argument that enforcing this clause would serve to immunize American Express, the Court held that “courts must ‘rigorously enforce’ arbitration agreements according to their terms.” Id. at 233 (citation omitted). Only if an arbitration agreement waives a party’s right to pursue statutory remedies may the agreement be invalidated, the Court reasoned, and the class waiver “no more eliminates [the contracting] parties’ right to pursue their statutory remedy than did federal law before its adoption of the class action . . . in 1938.” Id. at 236. In addition, the Federal Arbitration Act’s (FAA) “command to enforce arbitration agreements trumps any interest in ensuring the prosecution of low-value claims.” Id. at 238 n.5. Justice Kagan, joined by Justices Ginsburg and Breyer, dissented, opining that for the restaurant to pursue its claim individually in arbitration would be a “fool’s errand” as “[n]o rational actor would bring a claim worth tens of thousands of dollars if doing so meant incurring costs in the hundreds of thousands.” Id. at 240, 245 (Kagan, J., dissenting). The dissent further asserted that the majority, “bent on diminishing the usefulness of Rule 23,” had reasoned as if it were still “ye olde glory days.” Id. at 251‒52 (Kagan, J., dissenting). Despite disagreements over how competing class action policies should be balanced, the Court’s precedents make clear that Rule 23 must be interpreted as written. See Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 620 (1997) (“[O]f overriding importance, courts must be mindful that the Rule as now composed sets the requirements they are bound to enforce.”). The Court’s most recent class action decisions have been unanimous. The per curiam ruling in Frank v. Gaos, 139 S. Ct. 1041 (2019), avoided reaching the cy pres issue presented, remanding for an assessment of whether plaintiffs whose search terms Google allegedly shared with third parties had standing to maintain Stored Communications Act claims under Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016). In China Agritech, Inc. v. Resh, the Justices agreed that the tolling of statutes of limitations by a class action filing does not apply to class—as opposed to individual—claims filed after a denial of class certification. 138 S. Ct. 1800 (2018) (distinguishing American Pipe & Constr. Co. v. Utah, 414 U.S. 538 (1974)). And in Microsoft Corporation v. Baker, the Court unanimously held (with three Justices concurring in the judgment) that class plaintiffs cannot manufacture a final judgment subject to immediate appellate review by voluntarily dismissing their claims upon a denial of certification. 137 S. Ct. 1702 (2017). The Court will continue to engage with this consequential area of civil procedure in 2021, having granted review in two cases raising class certification issues. Goldman Sachs Grp. v. Arkansas Teacher Ret. Sys., No. 20–222; TransUnion LLC v. Ramirez, No. 20–297. In keeping with how class action issues that reach the Supreme Court are often analyzed, this essay largely focuses on public policy. After a brief excursion into the origins and development of class actions in our legal system, I describe how the Court has approached dueling policies embedded in Rule 23. The discussion then shifts gears, delving more deeply into three of the Court’s most influential class action decisions. I proceed to consider the more immediate matter of how class action jurisprudence has evolved in the twenty-first century. The conclusion frames some open questions of class action law that the Court may address in years to come.