?
One of my favorite blogs is Law and the Multiverse, which manages to entertainingly discuss how our real world laws would apply to the supernatural or unreal worlds in comic books. A recent decision by Judge Posner gave me the image of class action lawsuits as dueling with a legal Hydra, and I wondered how the Law and Multiverse folks would treat the topic.
For those unfamiliar with the term, the Hydra was a monster in Greek mythology that was defeated by Hercules. It had multiple heads and the only way to defeat it was to figure out how to remove the final head. However, each time he removed one head, another two would sprout out and take its place. If you saw the recent Captain America movie, you also heard a reference to Hydra, the shadowy organization bent on world domination, with the catch-phrase: ?Cut off one head and another shall take its place.?
Now, by no means do I want to characterize class action lawsuits or their plaintiffs as a menace. However, a very real and expensive litigation problem can come up for employers who resolve one lawsuit through either a settlement or by preventing one class of plaintiffs from being recognized, only to have a nearly identical lawsuit initiated by another plaintiff. In other words, employers could face a situation of stopping one class action lawsuit or one set of plaintiffs, only to face a second or third version of the same type of lawsuit from others unaffected by the outcome of the first case.
In Espenscheid v. DirectSat USA, LLC, which originated in the Western District of Wisconsin and is currently at the 7th Circuit Court of Appeals, a class action lawsuit was brought under the Fair Labor Standards Act and the wage laws for Wisconsin, Minnesota, and Pennsylvania. A rather large group of satellite television installers, 1000 at one point, were claiming the company failed to compensate them fully for all hours worked. The company successfully prevented the class from being recognized and, therefore, the three named parties in the lawsuit had to proceed on their own.
The employer actually settled the case with the three individuals and the case was dismissed. The settlement could have ended the matter. However, the settlement reserved the right of the plaintiffs to appeal whether the class action should have been recognized. My first thought on reading that was, ?why would you settle but allow the other party to keep coming back?!?? Was the concession needed to settle lengthy lawsuits of the underlying wage claims, while leaving room for the plaintiffs to rescue an argument they had already lost? Perhaps, though that seems like a costly concession if the appeal is successful and the class action gets reinstated.
During the appeal, the employer argued that the three individuals could no longer be parties to the lawsuit and could not pursue the appeal, which could have been a subtle way of finally putting the matter to rest. Since the three individuals had settled their underlying claims, the employer argued that there was no basis or standing for the plaintiffs to pursue the class action. The court did not agree.
Judge Posner, writing for the court, stated that dismissing the named plaintiffs on simple procedural grounds would not make sense. The underlying question of whether the class action should have proceeded was still unresolved, which meant another plaintiff could have stepped forward to take their place and the litigation would have restarted at the District Court level, perhaps even with a different judge. (Hello forum shopping Hydra). That occurrence would have been wasteful for the courts, and consequentially also expensive and duplicative for the employer.
Since the employer?s procedural argument failed, I expect that the case is still continuing at the appellate level. This brings me back to the concern of whether the employer made a mistake in leaving room for the plaintiffs to appeal and resurrect the class action. I do not think so.
In a decision from earlier in the year, Smentek v. Dart, the 7th Circuit considered a case where two similar class actions had already been dismissed by the courts and yet, a third one materialized. The reason the first or second dismissal did not preclude the third or even further cases was that that ?neither a proposed class action nor a rejected class action may bind nonparties.? That comes from the U.S. Supreme Court case of Smith v. Bayer Corp. In other words, a simple rejection of one proposed class does not cut off the rights of other claimants who were never part of the original case. While the employer could stop one litigant, room would be left for another or third to follow.
So, one way to stop the Class Action Hydra seems to be if a class was certified and the underlying? claim were then dismissed. The class certification would then capture similarly situated plaintiffs, who would be bound by court?s dismissal.
Author: Attorney Nilesh P. Patel?
?
?
?
?
?
Source: http://mahalawgroup.com/hydra-like-classactions/
katy perry russell brand mark hurd new ipad 3 jodie fisher zooey deschanel yvette prieto hypertrophic cardiomyopathy
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.