Top Five Developing Issues in Class Action Litigation

by Akin Gump Strauss Hauer & Feld LLP

Akin Gump Strauss Hauer & Feld LLP

Class action litigation is a rapidly developing area of the law. Here are the top five trends to keep an eye on as we approach the new year:

1. Standing to Pursue Statutory Claims

In June 2016, the U.S. Supreme Court held in Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016), that “Article III standing requires a concrete injury even in the context of a statutory violation,” clarifying that Congress’ enactment of a statutory right, by itself, is not necessarily enough to confer standing. Under Spokeo, the allegation of “a bare procedural violation, divorced from any concrete harm” is insufficient to establish standing.

Seizing on the Spokeo decision, defendants—particularly in class actions—have attacked the standing of plaintiffs pursuing claims under federal statutes, such as the Fair Credit Reporting Act (FCRA), Fair and Accurate Credit Transactions Act (FACTA), Telephone Consumer Protection Act (TCPA) and Fair Debt Collection Practices Act (FDCPA). These challenges have resulted in hundreds of judicial decisions by federal courts around the country.

While the decisions have varied widely, some trends have emerged. For example, while a growing majority of courts have found standing in TCPA and FDCPA cases, courts are about evenly split in FCRA cases, and a majority of courts have found no standing in FACTA cases. Many courts have reached opposite conclusions despite being confronted with indistinguishable facts. We expect that it may take years for the law to crystallize on these issues as the judicial decisions work their way up through circuit courts and perhaps back to the Supreme Court.

For additional information on standing to pursue statutory claims, please see:

2. Ascertainability Requirement

For a class to be certified, the class definition must provide objective criteria for determining whether a particular individual is a member of the proposed class. This requirement is referred to as “ascertainability.” While Federal Rule of Civil Procedure 23 does not expressly refer to ascertainability, most courts have held that the ascertainability requirement is implicit in Rule 23.

Courts differ, however, as to what a plaintiff must show at the class certification stage to satisfy the ascertainability requirement. The 3rd Circuit and some lower courts have held class action plaintiffs to a “heightened ascertainability” standard by requiring that, in addition to defining the outer boundaries of a class using objective criteria, there must also be an “administratively feasible” method to identify class members. See, e.g., Carrera v. Bayer Corp., 727 F.3d 300, 305-07 (3d Cir. 2013). By contrast, the 2nd, 6th, 7th, 8th and 9th Circuits, and the majority of lower courts have held that there is no “heightened ascertainability” requirement in those jurisdictions. See, e.g., Sandusky Wellness Ctr., LLC, v. Medtox Sci., Inc., 821 F.3d 992, 995-96 (8th Cir. 2016); Rikos v. Procter & Gamble Co., 799 F.3d 497, 525 (6th Cir. 2015); Mullins v. Direct Digital, LLC, 795 F.3d 654, 658 (7th Cir. 2015). The Supreme Court has not addressed this issue, but many court watchers expect that to change in the near future.

For additional information on the ascertainability requirement, please see:

3. Fairness in Class Action Litigation Act of 2017

Currently gaining traction in the Senate is the Fairness in Class Action Litigation Act of 2017, which passed the U.S. House of Representatives on March 9 by a vote of 220-201. The bill would make a number of changes to class action requirements and procedures, many of which would serve to benefit defendants and impose additional requirements and risks for class counsel. For example:

  • The bill would require, for class certification, that each member of the proposed class must have suffered the same “type and scope” of injury (which would effectively eliminate classes containing uninjured members), and would impose an “administrative feasibility” requirement (which, as discussed above, many courts have found is not required for certification under Rule 23).
  • The bill would impose an automatic stay of discovery pending a motion to transfer or motion to strike class allegations, reducing costs and burdens on defendants in the early stages of litigation, and would also create a right to immediately appeal from class certification orders (which currently lies in the discretion of appellate courts and is often denied).
  • On top of these changes, the bill would put additional pressure on plaintiffs’ attorneys by requiring that attorney’s fees be calculated based on the actual class recovery, requiring class action complaints to disclose any relationships and potential conflicts of interest between proposed class representatives and their class counsel, and creating new disclosure requirements relating to class settlements and third-party funding.

It remains to be seen what will happen to the bill in the Senate. Many commentators believe that changes to the bill are likely.

For more information on the Fairness in Class Action Litigation Act of 2017, please see:

4. CFPB’s Prohibition of Consumer Arbitration Agreements

On July 10, 2017, the Consumer Financial Protection Bureau (CFPB) issued a new rule prohibiting banks and credit card companies from including class action waivers in their arbitration agreements with consumers. Without such waivers, consumers are able to consolidate their cases into class actions, provided that they are able to meet other legal requirements for filing class actions.

In addition to prohibiting class action waivers in arbitration agreements, the rule imposes significant reporting requirements on banks and credit card companies that choose to continue using arbitration agreements. Companies are required to provide records to the CFPB regarding their arbitrations, including claims sought, counterclaims raised, other filings and final awards that are issued. The CFPB intends to post these materials (after redacting consumers’ personal information) on its website beginning in July 2019.

The new rule has received widespread criticism, with opponents arguing that the rule is anti-consumer and anti-business, and promotes frivolous litigation. Congress can, and likely will, take action to nullify the new rule before it goes into effect next year, which would also prohibit the CFPB from attempting to enact any similar type of rule in the future. Even if Congress does not act, substantial political and legal challenges threaten to undercut the power of the CFPB, and of its Director, Richard Cordray, in particular. Cordray has vigorously defended the rule, since speculation has grown that he plans to run for governor of Ohio in 2018.

For additional information on arbitration agreements in the class action context, please see:

5. Mooting Class Actions Through Unaccepted Offers of Judgment

In Campbell-Ewald Co. v. Gomez, 136 S. Ct. 663 (2016), the Supreme Court held that, prior to certification of a class, an unaccepted offer of judgment in full satisfaction of the named plaintiff’s claims does not moot the case. Quoting Justice Kagan’s dissenting opinion in an earlier case, the Court reasoned that “[a]n unaccepted settlement offer—like any unaccepted contract offer—is a legal nullity, with no operative effect.” However, the Court expressly left open the possibility that the result may be different where a defendant deposits the full amount of the plaintiff’s individual claim in an account payable to the plaintiff and the district court then enters judgment for the plaintiff in that amount.

Since the Gomez decision, several defendants have attempted to defeat putative class action cases by following the Supreme Court’s suggestion. These efforts have been unsuccessful. In Chen v. Allstate Inc. Co., 819 F. 3d 1136 (9th Cir. 2016), the 9th Circuit held that depositing funds into an escrow account payable to the plaintiff, followed by entry of judgment for the plaintiff, was ineffective to moot the case. The court reasoned that placing the funds in an escrow account is not the same as actual receipt of funds by the plaintiff and that it would be inappropriate to enter judgment before the plaintiff had a fair opportunity to move for class certification. The 7th Circuit reached a similar holding in Fulton Dental, LLC v. Bisco, Inc., 860 F. 3d 541 (7th Cir. 2017).

However, courts have recognized that an unaccepted settlement offer can defeat an individual plaintiff’s claims after a motion for class certification has been considered and denied. In Leyse v. Lifetime Entm’t Servs., LLC, 679 F. App’x 44 (2d Cir. 2017), the 2nd Circuit held that, while such an offer “does not moot a case—that is, it does not strip the district court of jurisdiction over the case—such an offer, if rejected, may nonetheless permit a court to enter a judgment in the plaintiff’s favor.” Stay tuned for further developments in this area.

For additional information about attempts to moot class actions by picking off lead plaintiffs, please see:

Written by:

Akin Gump Strauss Hauer & Feld LLP

Akin Gump Strauss Hauer & Feld LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.