Corporate America has been tireless in trying to sharply limit, or simply eliminate, all class action lawsuits. When corporations break the law by doing things such as not paying workers for time they work, paying women less than men, or by violating privacy rights in willful ways, Corporate America knows that workers and consumers can band together in a class action. If that ability to organize is taken away, however, in a great many cases consumers and workers will not be able to fight illegal conduct at all.
On too many occasions, corporations that don’t want to be hemmed in by consumer protection and civil rights laws have found a willing partner in battling those actions among the five conservative members of the U.S. Supreme Court. On several key occasions in recent years, the Court has invented new rules of federal law that have sharply limited when individuals can join together and enforce the law through class actions.
Things could get much worse, though. There are no less than three cases in the Court’s upcoming term that could be disastrous for consumers, workers and small businesses cheated by anti-competitive behavior that violates antitrust and other laws. In each of the three cases, the plaintiffs won in the trial court under laws that have been on the books for years and accepted by nearly all of the lower courts. In each case, Corporate America is asking the Supreme Court to invent a new federal law that would immunize them.
These are the three cases, and questions, the Court will tackle in the coming weeks.
Tyson v. Bouaphaekeo: Should Courts Ignore Statistical Evidence If It Proves a Corporation Broke the Law?
As part of their job, meat processing employees in an Iowa plant had to put on and take off certain protective clothes when they were working in an area using certain knives. Tyson Foods estimated it would take four minutes to do these tasks, and that’s all it paid them for. In fact, it takes a lot longer. That’s why a jury found that Tyson owed workers $5.8 million for underpaying its employees. (This is what we would call “wage theft.”)
One of the pieces of evidence the jury considered was a statistical sample of 744 observations of employees putting on and taking off the protective gear. That data clearly showed that it took far longer than the four minutes Tyson claimed. Tyson now says that using this statistical evidence was illegal, because it was a “trial by formula.” Tyson now says it should be able to have an individual trial for every single employee, and that using a sample of 744 observations is improper.
That’s a pretty staggering idea. Courts have allowed juries and judges to infer facts from statistical evidence for decades; the idea that no jury could consider statistical evidence without it being a supposedly illegal “trial by formula” is radical. Our military and intelligence services use statistical analyses in their national security strategies, and pharmaceutical and medical companies all rely upon statistical analyses of results and observations in their work, too. They do because it has been shown to be effective. Now, Tyson is arguing that when it comes to proving a corporation violated the law in a class action, courts should pretend that in that one context, statistical analyses of data is banned. This is pretty convenient for corporations engaged in wage theft, but it makes no sense at all as a matter of law.
Spokeo v. Robins: Should the Court Essentially Repeal Hundreds of Statutes that Let People Sue for Set Sums When a Company Breaks the Law?
Spokeo is a company that “scrapes” information from a variety of sources on the internet, and then sells it to people who want to find out about others. In this case, the plaintiff says Spokeo got a lot of facts wrong about him: his age, education, employment and marital status, and a number of other facts. Under the Fair Credit Reporting Act, if an agency that gathers information about people sells false information about someone; and willfully uses lousy procedures that are likely to make substantial mistakes, they have to pay a set amount (up to $1,000) to any consumer about whom they made a false statement. The consumer doesn’t have to prove they lost money or suffered physical injury because of the false statement. Congress just presumed that it would bad for consumers to have corporations lying about them and wanted to discourage corporations from willfully doing so.
This idea of “statutory damages” is a very old one in American law, and is included in literally hundreds of statutes. That’s because, if someone lies about you, how can you put a number on how much it hurt you? So rather than bar victims of this kind of illegal act from receiving anything, legislatures give them a flat dollar figure, as sort of rough justice.
Now, Corporate America is asking the Supreme Court to say that if an individual can’t prove in what it calls a “concrete way” just how much they were harmed because of a lie, that the Constitution says they were not injured at all. In an extremely clever but very ugly feat of focus group politics, corporate advocates call this a “no injury” case, and say that the hundreds of statutes that Congress passed creating statutory damages for hard-to-measure injuries are all unconstitutional.
This would be a sweet deal for corporations that willfully create procedures through which they report false things about consumers, and if Spokeo wins, it will suddenly become much easier for corporations to violate Americans’ privacy. If the Supreme Court does invent this new rule of law, it will essentially strike down hundreds of existing laws (talk about activism!) by doing so.
Campbell-Ewald v. Gomez: Does the Constitution Authorize Corporations to Bribe Named Class Representatives to Sell Out Everybody Else?
The basic idea of a class action is that one or more people are going to come forward on behalf of everyone in a group who’s been treated a certain way. The people who bring the case are called the “named class representatives,” and they have an obligation to protect the interests and stick up for everyone whom they’re representing. The idea is not that someone files a case and says “I’m suing for a group of people who were all cheated the same way, but if you pay me off, I’ll toss them all under the bus and just take some money for myself.”
But in Campbell-Ewald, that is exactly the argument the defendant is making. The corporation wants to pay off the named class representative by offering the exact amount of money he is owed under the law, and then argues that the Constitution magically requires that every other person who has a claim disappear.
First, this argument runs exactly counter to the core idea that the named class representative is supposed to adequately represent everyone else in the class. As a system, we want the people who come forward on behalf of a class to take their obligations to the rest of the class seriously. We want people who know that it’s not all about them, but that it’s about protecting the rights of a group.
Second, the defendant’s repulsive argument here encourages the worst kind of game playing. Are you a corporation who’s been caught red-handed, cheating a crowd of people? Well, under this theory, you can just pay off the people who step forward to bring a case one by one. You’ll never have to pay off anywhere near all of the people you cheated. (If there’s no class action, no one will ever be able to find them all, explain to them what happened, and get them to come forward). So, corporations just have to individually pay off the people who step forward. The laws won’t be enforced, and the corporation will get to keep nearly all the money it took. Is that justice? Maybe it’s considered justice in the board rooms of corporations that break the law and cheat people, but nowhere else.
So What Will Happen?
It’s really hard to know. There is no doubt that the U.S. Supreme Court has five justices who have a very strong deregulatory impulse; they seem to feel that we have way too many laws protecting consumers and workers, and they don’t mind reining them in. On the other hand, even the five pro-corporate justices on this Court sometimes fail to get a full majority to support very radical changes in the law. When the Court was asked to basically eliminate nearly all class actions in cases involving securities fraud a few years ago, that was a bridge too far for the majority. The betting here is that Corporate America has asked for too much in each of these cases: they want rulings that are so radical, so counter to what the law has been for years, that there won’t be five votes to let them get away with such behavior. But if I’m wrong, we’re in for a lot of trouble.