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Dart Cherokee Basin Operating Company, LLC v. Owens

Issues

Is a defendant seeking removal from state to federal court under the Class Action Fairness Act required to present evidence supporting jurisdiction in the notice of removal?

In 2012, Brandon W. Owens filed a class action petition in Kansas state court, alleging that Dart Cherokee Basin Operating Company and Cherokee Basin Pipeline owed royalty payments derived from certain gas wells. Dart and Cherokee sought to remove the case to federal court, asserting jurisdiction under 28 U.S.C. § 1332(d), commonly known as the Class Action Fairness Act of 2005 (“CAFA”). In their notice of removal, Dart and Cherokee did not include supporting evidence of its allegation that the jurisdictional amount was met. Dart and Cherokee contend that mere allegations of the amount in controversy is sufficient to establish jurisdiction if there is no dispute over that amount. In opposition, Owens argues that the notice of removal has to contain factual evidence supporting federal jurisdiction. The Supreme Court will decide how much evidence of the jurisdictional requirements—if any—a CAFA defendant seeking removal is required to include in his or her notice of removal. The resolution of this case will have a significant impact on a defendant’s burden in seeking removal and, in turn, large effects on the availability of a federal forum for many state court defendants.

Questions as Framed for the Court by the Parties

A defendant seeking removal of a case to federal court must file a notice of removal containing "a short and plain statement of the grounds for removal" and attach only the state court filings served on such defendant. 28 U.S.C. § 1446(a). Consistent with that statutory pleading requirement, the First, Fourth, Fifth, Seventh, Eighth, Ninth, and Eleventh Circuits require only that a notice of removal contain allegations of the jurisdictional facts supporting removal; those courts do not require the defendant to attach evidence supporting federal jurisdiction to the notice of removal. District courts in those Circuits may consider evidence supporting removal even if it comes later in response to a motion to remand.

Here, in a clean break from Section 1446(a)'s language and its sister Circuits' decisions, the Tenth Circuit let stand an order remanding a class action to state court based upon the district court's refusal to consider evidence establishing federal jurisdiction under the Class Action Fairness Act (CAFA) because that evidence was not attached to the notice of removal. (That evidence, which was not disputed, came later in response to the motion to remand.)

The question presented is:

Whether a defendant seeking removal to federal court is required to include evidence supporting federal jurisdiction in the notice of removal, or is alleging the required "short and plain statement of the grounds for removal" enough?

In 2012, Respondent Brandon W. Owens filed a class action petition in Kansas state court against Petitioners Dart Cherokee Basin Operating Company, LLC and Cherokee Basin Pipeline, LLC (“Dart and Cherokee”).

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Frank v. Gaos

Issues

When, if at all, does a cy pres award of class action that provides no direct relief to class members support class certification and comport with the requirement that a settlement binding class members be “fair, reasonable, and adequate”?

Cy press settlements allow courts to distribute portions of class action settlement funds to outside beneficiaries—such as non-profit organizations—for the indirect benefit of the class.  This case asks the Supreme Court to decide whether lower courts violated Federal Rule of Civil Procedure 23(e) when they certified a cy pres settlement, which did not award settlement money to class members, in a class action against Google. Petitioner and class member Theodore H. Frank asserts that the courts should not have certified the cy pres class settlement because it was not “fair, reasonable, and adequate” in the meaning of Rule 23(e), given that it did not compensate class members for their injuries. Frank argues that the attorney fees of class counsel were disproportionate given that class members received no return and contends that cy pres awards generate potential conflicts between interests of class counsel and their clients. Finally, Frank contends that in the case at hand, class counsel had conflicts with the beneficiaries of the cy pres settlement. Other class members, such as Paloma Gaos, and Google respond that the cy pres settlement was “fair, reasonable, and adequate,” as distributing settlement money to each class member would be infeasible. Google and Gaos further indicate that the attorney fees were court-approved and state that Frank does not actually contest the award of attorneys’ fees. Finally, Google and Gaos assert that class counsel had no conflicts with the beneficiaries of the cy pres settlement, as the beneficiaries were chosen on their own merits. The outcome of this case has large implications for class action members, their freedom of speech, their due process rights, and to the awarding of cy pres settlements.

Questions as Framed for the Court by the Parties

Whether, or in what circumstances, a cy pres award of class action proceeds that provides no direct relief to class members supports class certification and comports with the requirement that a settlement binding class members must be “fair, reasonable, and adequate.”

Google Search users Paloma Gaos, Anthony Italiano, and Gabriel Priyev (“Plaintiffs”) filed consolidated class action claims against Google, Inc. (“Google”), alleging privacy violations, violations of the Stored Communications Act, 18 U.S.C.

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Shady Grove Orthopedic Associates, P.A. v. Allstate Insurance Company

Issues

Whether a state legislature may prohibit federal courts from using the class action device for state law claims?

 

Shady Grove Orthopedic Associates filed a class action lawsuit in federal court, arguing that Allstate Insurance Companyviolated New York law in failing to pay interest to policyholders. The district court dismissed the case on the grounds that New York law prevented a class action lawsuit in this context, and the Second Circuit affirmed. This case concerns the application of state law in federal court under the Erie Doctrine, particularly whether New York class action law applies in federal court and whether it conflicts with Rule 23 of the Federal Rules of Civil Procedure. Shady Grove argues that Rule 23 is the comprehensive class action rule for federal courts, and that New York law cannot undermine federal court procedure. Allstate claims that state law applies because plaintiffs would have different rights in state and federal court. The case will address Rule 23 and the ability of states to restrict class action lawsuits.

Questions as Framed for the Court by the Parties

1. Can a state legislature properly prohibit the federal courts from using the class action device for state law claims?

2. Can state legislatures dictate procedure in the federal courts?

3. Could state-law class actions eventually disappear altogether, as more state legislatures declare them off limits to the federal courts?

Shady Grove Orthopedic Associates (“Shady Grove”) provided medical care to Sonia Galvez for her injuries as a result of a car accident in May, 2005. See Shady Grove Orthopedic Assocs. v. Allstate Ins. Co. (“Shady Grove I”), 466 F. Supp. 2d 467, 469 (E.D.N.Y.

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TransUnion LLC v. Ramirez

Issues

Should a class action lawsuit pursuing statutory damages be allowed under Article III or Federal Rule of Civil Procedure 23 when the majority of the class members did not experience harm as severe as that suffered by the named plaintiff?

This case asks the Supreme Court to determine whether Article III or the typicality requirement of Federal Rule of Civil Procedure 23 (“FRCP”) should allow a class action claiming statutory damages when most of the class members did not suffer actual injury, or an injury similar to that of the class representative. Petitioner TransUnion, LLC (“TransUnion”) argues that in order for a class in a statutory damages action to have standing under Article III, each absent class member must show common concrete injury and, if future risk constitutes the injury, must demonstrate that such risk is certainly impending. TransUnion asserts that to achieve typicality under FRCP 23, a class representative’s facts must be substantially shared with those of the rest of the class. Respondent Sergio L. Ramirez (“Ramirez”) counters that a class may show Article III injury by demonstrating that the harm caused by a statutory violation is analogous to that of common law claims. Ramirez also asserts that the typicality requirement is satisfied when a class representative shares the same interest and has suffered injury common to the absent class members. This case involves questions of how the Court should weigh the role of class actions and statutory damages in protecting consumers against the due process rights of litigants.

Questions as Framed for the Court by the Parties

Whether either Article III or Federal Rule of Civil Procedure 23 permits a damages class action when the vast majority of the class suffered no actual injury, let alone an injury anything like what the class representative suffered.

In February 2011, Sergio Ramirez (“Ramirez”) went to a Nissan dealership and decided to buy a new car with his wife. Ramirez v. TransUnion LLC at 1017. After running a joint credit check on Ramirez and his wife, the dealership informed Ramirez that they could not complete the purchase because his name matched one appearing on a “terrorist” list maintained by the Department of the Treasury’s Office of Foreign Assets Controls (“OFAC”).

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Wal-Mart Stores, Inc. v. Dukes

Issues

1. Can a court certify a class action lawsuit under Federal Rule of Civil Procedure 23(b)(2) where the class action members bring claims for back pay?

2. Does the class defined by the district court meet all the requirements of Federal Rule of Civil Procedure 23(a)?

 

Respondent Betty Dukes and other women have brought a Title VII employment discrimination case against Petitioner Wal-Mart Stores. The United States District Court for the Northern District of California certified a class action comprised of all women employed at any Wal-Mart store since December 26, 1998 who may have been or will be subjected to Wal-Mart’s allegedly discriminatory practices and policies. Wal-Mart appealed, challenging the class certification, but the United States Court of Appeals for the Ninth Circuit affirmed the district court’s ruling. Wal-Mart now appeals to the Supreme Court, arguing that the class certification does not meet the requirements of Federal Rule of Civil Procedure 23(a). Wal-Mart also claims that class certification was improper under Federal Rule of Civil Procedure 23(b)(2) because the employees primarily seek monetary compensation in the form of back pay, and Rule 23(b)(2) does not authorize certification of claims seeking monetary relief. On the other hand, the employees assert that they meet the requirements for class certification under Rule 23(a) because all female employees face the same Wal-Mart policies and share the common issue of discriminatory treatment under those policies. The employees further argue that class actions certified under Rule 23(b)(2) are not precluded from seeking monetary relief, and deny that back pay is a form of monetary compensation. The Supreme Court’s decision will affect the evidence required to bring an employment discrimination class action suit, the relief available to plaintiffs in a class action, and employers’ willingness to settle to avoid liability in class actions.

Questions as Framed for the Court by the Parties

1. Whether claims for monetary relief can be certified under Federal Rule of Civil Procedure 23(b)(2) - which by its terms is limited to injunctive or corresponding declaratory relief - and, if so, under what circumstances.

2. Whether the class certification ordered under Rule 23(b)(2) was consistent with Rule 23(a).

Petitioner Wal-Mart Stores, Inc. opened its first store in Rogers, Arkansas in 1962. See Walmart.com, About UsThe company now boasts nearly 9,000 retail locations in 15 countries and employs over two million people. See id.

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Additional Resources

· Wex: Class Actions

· N.Y. Times, Adam Liptak and Steven Greenhouse: Supreme Court Agrees to Hear Wal-Mart Appeal (Dec. 6, 2010)

· Summary Judgments, Michael Waterstone: The Future of Employment Discrimination Class Actions (Jan. 10, 2011)

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