Back in January 2012, I posted a short item titled, Supreme Court Sets The Tone For 2012 Term: Might Makes Right, in which I recounted how the Supreme Court had begun the 2011-2012 term with two opinions that were great if you own a prison management company or fake credit repair company, but not so great if you were injured by a private prison’s malfeasance or defrauded by a consumer credit company.
The rest of that term went as expected, with opinions knocking our various discrimination plaintiffs (Hosanna-Tabor Church v. EEOC), mesothelioma victims (Kurns v. Railroad Friction Products) and workers wrongly denied overtime (Christopher v. SmithKline Beecham Corp.). There were certainly some blockbuster cases that term — like the surprise Affordable Care Act decision — but nothing earth-shattering relating to civil justice.
Now we’ve reached the end of the 2012-2013 term, at least as it comes to cases affecting civil litigation brought by or against consumers and patients — you know, the people — and it’s time to recount the worst cases, the ones that contorted all logic and sense to deny people they day in court. As The Atlantic reported, June 24, 2013 in particular was “good for corporations,” with the Vance, Barlett, and Nasser opinions all at once, each of which we’ll cover.
Marx v. General Revenue Corp. (February 26, 2013): Marx drove right over the language of the Fair Debt Collection Practices Act, holding that, although Congress specifically said that costs for a prevailing defendant could only be awarded to prevailing defendants to cases “brought in bad faith and for the purpose of harassment,” Congress didn’t really mean that, they meant to apply Federal Rule of Civil Procedure 54(d)(1), which, of course, says it doesn’t apply when a federal statute includes a specific costs provision. Huh? Anything to deter consumer lawyers from helping out debtors, I suppose.
Genesis HealthCare Corp. v. Symczyk (April 16, 2013): In this abominable opinion, the Supreme Court held that Congress doesn’t really care about enforcement of the Fair Labor Standards Act. In the FLSA, Congress specifically created a “collective action” procedure that, like a class action, allows one worker to sue on behalf of herself and her co-workers. The Supreme Court held, 5-4, that Congress didn’t really care about collective actions, and so defendant employers could “pick off” individual claims — which are usually at most a couple thousand dollars — and thereby avoid facing anything near full liability forever.
The cruel irony of the case is that the plaintiff didn’t get her money, either: the defendants’ “pick off” offer had a time limit on it. The hope is that, because the case was so procedurally convoluted (more here), it did not actually reach the question of whether this sort of “pick off” strategy works outside identical cases.
Vance v. Ball State University (June 24, 2013): Vance, a discrimination case, came up with the legal fiction that, in a workplace, people who control employees’ day-to-day schedules and assignments can never be considered “supervisors” under anti-discrimination laws, and thus employees can’t hold their employers liable when the people who control their day-to-day schedules and assignments start harassing them. As Justice Ginsburg notes, it means you cannot sue your supervisor if they, for example, commented frequently on your “fantastic ass,” “luscious lips,” and “beautiful eyes,” and, using deplorable racial epithets, opine that people like you do not “belong in the business,” and then deny you overtime when you complain, so long as they don’t have the power to fire you, which is what happened in Mack v. Otis Elevator, 326 F. 3d 116 (2d Cir. 2003).
UT Southwestern Medical Center v. Nassar (June 24, 2013): Nassar re-wrote employment antidiscrimination law in an effort to make it much harder to prove retaliation claims. It used to be that employees could sue their employers if they retaliated against them; that’s still in theory the case, but Nasser raises the standard of proof to the point that employers can avoid liability if they can show any other reason for the retaliatory conduct. Employees who complained about discrimination always had to worry about their employers “building a case against them” afterwards — i.e., an excuse to fire them — and now it’s much easier for employers to get away with it.
Amgen Inc. v. Connecticut Retirement Plans and Trust Funds (February 27, 2013): Amgen involved a securities fraud lawsuit, and I previously discussed it here. It reaffirmed a fundamental principle of class actions: “Rule 23(b)(3), however, does not require a plaintiff seeking class certification to prove that each element of her claim is susceptible to classwide proof. What the rule does require is that common questions “predominate over any questions affecting only individual [class] members.” Fed. Rule Civ. Proc. 23(b)(3) (emphasis added).” (One internal citation and quotation omitted). Six Justices of the Supreme Court agreed that, if the defendant had one argument it felt could be used to dismiss all of the class members claims, then, as a logical matter, “the questions of law or fact common to class members predominate over any questions affecting only individual members.”
Seems like a no-brainer, right? It is, and it seems that investor class actions will continue to thrive for the foreseeable future. The problem comes when employees or consumers are bringing class actions. They’re unfairly subjected to completely different class action rules under Wal-Mart Stores, Inc. v. Dukes, 131 S.Ct. 2541 (2011)(blowing up employee discrimination class action) and Comcast v. Behrend, discussed in a minute.
Comcast v. Behrend (March 27, 2013). The simple rule in Amgen, it turns out, was solely for the benefit of investors. The class action rules for consumers are completely different. Behrend, which I previously discussed here, was an 5-4 opinion overturning certification of a class action against Comcast on behalf of millions of Philadelphia-area consumers who were overcharged by over $875 million from 1998 to 2007 due to Comcast gobbling up local cable providers so it could control their rates. The Court didn’t deny that the plaintiffs had ample evidence of antitrust violations. Instead, they absurdly claimed that the cable television market is so irreducibly complicated that its inner workings are “not capable of classwide proof.” The name-checking of Montgomery County and Camden County and the like serve only to show how dishonest the opinion is: those counties are all part of the same cable television market.
US Airways, Inc. v. McCutchen (April 16, 2013). McCutchen, which I previously discussed here, makes injured workers and their family members into unpaid collection agents for their employer’s ERISA medical benefits plan. This case takes money directly out of working families’ pockets: once an ERISA beneficiary (i.e., a worker or their spouse or child) wins or settles a case — even if they had to hire a lawyer on a contingent fee to bring the case, and even if the settlement produced nowhere near the amount of actual damages — the ERISA plan, which did nothing to support the litigation, can demand to be reimbursed in full.
The decision has already affected a wide variety of personal injury cases in which the defendant has inadequate insurance, like in most car accident cases that cause permanent injury, substantial lost wages, or both. If a plaintiff’s medical bills are more than, say, a third of the available insurance, then the case is likely worthless, because the ERISA Plan and the costs of bringing the lawsuit will eat up the bulk of the recovery.
In a fair world, your ERISA plan — which did nothing at all to recover the settlement — would have to compromise their bill, to account for the fact that you had to hire a lawyer with part of the settlement and then had to accept a compromised settlement, due to inadequate insurance. That’s what Medicare does. But nobody said the Supreme Court cared about being fair.
Now that you’ve seen the math, do you see who benefits? Working families who suffer injuries lose, as do their lawyers. ERISA Plans will lose, too, even if they’re too short-sighted to realize it, because lawyers won’t take cases with large ERISA liens. The winners, as usual, are insurance companies, who won’t have to pay as often for their insured’s negligence and recklessness.
Mutual Pharmaceutical Co. v. Bartlett (June 24, 2013): Bartlett involves a woman who, thanks to a pointless generic pain medication with no benefits over other medications yet huge additional risks, now lives in “hell on earth.” The Supreme Court didn’t care, and, out of spite, applied the new legal principle that, if state tort laws might affect the profits of generic drug companies, then federal law absolves the drug company of any responsibility. That’s not how they worded it — they contorted the English language to claim it’s “impossible” to sell a drug if you’re held responsible for the damage it causes, reasoning that you would normally see from an intemperate toddler try to evade responsibility for breaking something — but it’s the only way to interpret it.
Lest it go unsaid, Congress has never passed any law precluding states from holding drug companies responsible for their dangerous drugs — this “implied preemption” emanates entirely from the imagination of a slim majority of the Supreme Court.
American Express Co. v. Italian Colors Restaurant (June 20, 2013): AmEx is about the extent to which companies may force arbitration, so you already know how it ends: a small business can’t bring antitrust claims against American Express, because the claims are forced into expensive arbitration where the cost to arbitrate exceeds the value of the case. Walter Olson thinks it’s “not the end of the world,” and I agree as a matter of hyperbole, but I disagree as a matter of consumer rights. Putting aside the disastrous consequences, there’s two important legal points I’d like to raise.
First, let me paraphrase something I wrote a year ago about Justice Scalia’s dubious Reading Law book: the actual text of the Federal Arbitration Act doesn’t say that arbitration should be given special treatment, it merely says: “A written provision in any … contract evidencing a transaction involving commerce to settle by arbitration a controversy … shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.” Yet, the Supreme Court has been on the warpath to proclaim “arbitration” a magical incantation that trumps all state laws — and, now, with AmEx, all federal laws, too. AmEx holds that the magical power of the word “arbitration” trumps even federal antitrust laws. One wonders if you could use the word “arbitration” in a phone call and thus force the NSA into it, too.
Second, it was merely a year ago that Justice Alito, on behalf of himself, Roberts, Scalia, Kennedy, and Thomas, worried about how, when it comes to mandatory arbitration, “the onus is on the [plaintiff] to come up with the resources to mount the legal challenge [to the defendant’s conduct] in a timely fashion,” and that the dissent in that case was wrong to accept how the defendant there offered to pay for the arbitrator because “the painful burden of initiating and participating in [arbitration] disputes cannot be so easily relieved.” The Court thus held that forcing the plaintiff to initiate arbitration violated their rights. So why did they care in that case about the burdens of litigation and arbitration? Because the defendant there was a union. So when a union demands arbitration with its members — and offers to pay for it! — that creates a “painful burden” that must be swept aside, but when a telecommunications or credit company with a monopoly demands arbitration (and, of course, makes the consumer pay their own way in the arbitration), that’s just business.
But when it came to a small business trying to sue a huge monopolistic corporation for antitrust violations, well, Justice Scalia says “the fact that it is not worth the expense involved in proving a statutory remedy does not constitute the elimination of the right to pursue that remedy.” Compare that odious sentence to the fundamental principle of our law that, where there is a right, there is a remedy. See Marbury v. Madison, 5 U.S. (1 Cranch ) 137, 163-66 (1803)(“It is a general and indisputable rule, that where there is a legal right, there is also a legal remedy by suit or action at law, whenever that right is invaded. . . . For it is a settled and invariable principle in the laws of England, that every right, when withheld, must have a remedy, and every injury its proper redress”)(quoting 3 WILLIAM BLACKSTONE, COMMENTARIES 23).
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All in all, a good year for debt collectors, employers that violate the Fair Labor Standards Act, employers that permit discrimination and harassment (and retaliate against employees who complain), corporations that violate antitrust law (two victories for them), insurance companies, and drug makers selling generic drugs that produce more harm than good. Not such a good year for consumers, employees, and patients.