Editor’s note: This article is the first of a two-part series.
The vacation is over. After a summer of Olympic glories and relaxing days at the beach, it is time to re-engage with the Supreme Court. Perhaps more than anyone, the justices desperately needed a break after the frenzy surrounding their annual end-of-term fireworks, which culminated in their opinions in the Affordable Care Act cases. They have returned to Washington to examine several important matters for the business community, as well as take up their usual assortment of interesting criminal and First Amendment cases.
This article discusses some of the most prominent cases, by subject matter, in which the justices will hear argument between now and January 2013. Next week, the court will announce cases that it will review between January and April 2013. Already, though, the docket is filled with interesting cases, such as:
Collective Action Cases/Damages
Two terms ago, the justices issued a series of opinions restricting the ability to utilize class actions as a vehicle for recovery. In Wal-Mart Stores v. Dukes, a 5-4 majority held that a proposed class of over 1 million Wal-Mart employees could not satisfy the “commonality” requirement of Rule 23. In another 5-4 decision, the court endorsed the use of an arbitration agreement in AT&T Mobility LLC v. Concepcion that precluded recovery by class action.
In the coming months, the court will examine several questions relating to damages in collective action cases. On November 5, the court will hear argument in two cases addressing whether defendants can repel class actions before certification by showing that there are no damages. First, Amgen v. Connecticut Retirement Plans and Trust Funds addresses critical issues relating to securities-fraud class actions brought under Securities and Exchange Commission Rule 10b-5 and premised on the fraud-on-the-market theory: (1) whether district courts must require proof of materiality before certifying a plaintiff class; and (2) whether district courts must allow a defendant to present evidence rebutting the applicability of the fraud-on-the-market theory before certifying a plaintiff class.
The second case argued on November 5 has some local color. The justices will review the U.S. Court of Appeals for the Third Circuit’s decision in Comcast v. Behrend and address another question related to “early termination” of proposed class actions. In that case, the court will decide whether — before certifying a class action — a district court must find that the plaintiff proved with admissible evidence (including expert testimony) that damages may be awarded appropriately on a class-wide basis. In this way, Comcast is an extension of the Wal-Mart case from 2011, in which the court held that a class can only be certified if the plaintiffs satisfy all requirements for class certification under Rule 23.
The court will retain its focus on damages in class or collective actions cases in its review of another Third Circuit decision, Genesis HealthCare v. Symczyk. Under the Fair Labor Standards Act, a single plaintiff may initiate a case and seek conditional certification as a collective action, at which point additional plaintiffs may be invited to opt-in to the action. The Symczyk case presents a circumstance in which, prior to this conditional certification, an employer tendered an offer of judgment pursuant to Rule 68 for all damages sought by the initial plaintiff. The employer claimed that this offer mooted the case, noting additionally that no other plaintiff has ever opted into the suit (even today). The district court (Judge Michael M. Baylson) agreed, but the Third Circuit reversed on the theory that the district court’s rule would encourage employers to “kill” FLSA collective actions before additional plaintiffs could be effectively invited to join.
Interestingly, the court’s collective action cases may be affected by the Article III dispute arising in a national security case, as well. The court may apply some of the same principles from the above-mentioned collective action cases in Clapper v. Amnesty International USA. In that case, the federal government petitioned the court to determine whether a group of plaintiffs lacked Article III standing to obtain prospective relief from an alleged wiretapping program when they failed to proffer evidence that the government would “imminently acquire” their communications or even that the requested injunction would redress their purported injuries. Although this case is not a class action, it involves multiple plaintiffs, and the timing and content of the court’s analysis of the relevant Article III issues in Clapper may produce some “jurisprudential synergies” with the collective action cases.
The court will return to a question it addressed nearly 15 years ago involving Title VII liability. In Faragher v. City of Boca Raton and Burlington Industries v. Ellerth, the court held that employers could be held vicariously liable for harassment by supervisors; it likewise held, though, that employers could only be held liable for harassment by non-supervisors upon a showing of negligence. In Vance v. Ball State University, the court will address how to define the term “supervisor” in the application of Faragher — does it require a power to hire/fire/discipline the victim, or can it apply more broadly to employees who direct the victim’s daily work?
The court will also review an ERISA decision from the Third Circuit, U.S. Airways v. McCutchen. In that case, a U.S. Airways employee suffered severe injuries in a car crash, and the company’s ERISA plan paid over $66,000 in medical costs. Later, the employee recovered over $100,000 in a lawsuit against the responsible parties, and, as the terms of the ERISA plan allowed, U.S. Airways sued to recoup the money it contributed toward the employee’s medical costs. The Third Circuit held, in essence, that equitable principles precluded application of the terms of the plan.
So far, the court’s environmental law cases this term could collectively be summarized as: Supreme Court v. Ninth Circuit. Interestingly, all three of these cases involve questions relating to the treatment of stormwater under the Clean Water Act. While two of the (consolidated) cases will almost certainly be reversed, the outcome of the third case is not as clear.
If such an occupation existed, Supreme Court bookmakers would have no trouble assigning low odds of a 9-0 reversal to two Ninth Circuit decisions regarding the Clean Water Act’s treatment of stormwater on logging roads. In two cases — Decker v. Northwest Environmental Defense Center and Georgia-Pacific West v. Northwest Environmental Defense Center — the Ninth Circuit held that the act requires logging-road operators to obtain permits for the discharge of pollutants caused by stormwater. This result does not seem absurd on its face, yet: (1) the U.S. Environmental Protection Agency has interpreted the act for 35 years not to require federal permits and instead to allow state officials to regulate storm run-off; (2) the government confessed error at the certiorari stage (and the court still took the case for argument); (3) Congress stayed the permitting of logging roads with temporary legislation and introduced permanent legislation to reverse the ruling outright; and (4) the EPA is apparently planning to issue its own rule that expressly rejects the Ninth Circuit’s interpretation of the Clean Water Act. So, yeah, except for all of those things, the Ninth Circuit’s ruling looked pretty good.
Stormwater is again the focus in another case from the Ninth Circuit, Los Angeles County Flood Control District v. Natural Resources Defense Council. This case involves a flood-control authority that was sued under the Clean Water Act based on pollutants discharged into waters that it oversees by other parties. The Ninth Circuit held that the local-government entity could be held liable, but that seems to contradict a 2004 Supreme Court decision holding that a “transfer” of pollutants does not constitute a “discharge” under the Clean Water Act. If the court affirms the Ninth Circuit’s ruling, state and local governments could be held liable for a wide range of pollution by other parties simply because the governments tried to address the impact of flooding on their citizens — a result that reasonable minds might imagine would get reversed by legislation. The long-term impact of this case, therefore, is likely to come in its interpretive methodology as opposed to its end-result.
It bears noting that all of these cases come to the court via “citizen suit” provisions of the Clean Water Act. As discussed earlier, the court will be grappling with litigants’ Article III eligibility — standing, mootness, etc. — in several other cases this term. It will be interesting to see whether this focus produces any holding or dicta in the environmental cases that might curtail future use of the citizen-suit mechanism. •
Stephen A. Miller practices in the commercial litigation group at Cozen O’Connor’s Philadelphia office. Prior to joining Cozen O’Connor, he clerked for Justice Antonin Scalia on the Supreme Court and served as a federal prosecutor for nine years in the Southern District of New York and the Eastern District of Pennsylvania.