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Business News: Justices To Mull Future Of Class-Action Cases

09/30/2015 | 08:00pm US/Eastern
   By Jess Bravin 

WASHINGTON -- The long-running battle over class-action lawsuits goes into full swing in the Supreme Court term beginning next week with cases that could shift the rules for group lawsuits against businesses.

The court will hear several cases involving a wide range of disputes, from consumers alleging a pay-television provider overcharged them to meatpacking workers claiming they were underpaid. Although the cases typically present questions of legal procedure rather than broad conceptions of individual rights, the practical impact of their outcomes could determine whether many kinds of lawsuits can get into court at all.

Under Chief Justice John Roberts, the court has cast a skeptical eye toward class-action litigation, nearly always splitting 5-4 along ideological lines when setting rules for how multiparty litigation is conducted. The dynamic has tended to favor businesses, which have sought for decades to rein in class-action cases.

Stephen Burbank, a University of Pennsylvania law professor who has co-written a book examining private lawsuits on federal rights, said the split on the mechanics of litigation in part reflects the legal stakes involved. "Everyone has woken up to the dirty little secret that procedure is power," Mr. Burbank said.

Corporate defense lawyers say that while the court's conservative majority has yet to fundamentally tilt the odds against plaintiffs.

"There's always this hope before the Supreme Court term that we have these really great issues that are going to be decided, and there will be a sweeping change in the way class actions work," said Paul Karlsgodt, who heads Baker & Hostetler LLP's national class-action defense practice in Denver. Instead, recent decisions have included "sweeping statements, but not necessarily a sweeping holding that had an impact on practice."

On Tuesday, the justices will hear an appeal filed by DirecTV to dismiss a class-action suit alleging the company improperly charged California customers for early cancellation of a service contract.

DirecTV, acquired by AT&T Inc. earlier this year, argues its customer contract bars individuals from suing the company or seeking a class remedy for disputes, instead requiring private arbitration. A state appeals court rejected DirecTV's argument.

On October 14, the court will hear argument on whether an individual can lead a class of plaintiffs when he was offered full restitution available under the law to settle.

The case involves a complaint brought by Jose Gomez, a California man who received unsolicited text messages on Navy recruitment from Campbell-Ewald, Co., a marketing agency. The company has unsuccessfully argued its settlement offer to Mr. Gomez requires the suit to be dismissed.

On Nov. 10, the court hears a case that some experts believe could produce the term's most significant class-action decision.

The suit against Tyson Foods Inc. involves whether employees are entitled to pay for time spent suiting up for work. Employees claimed they were underpaid for time spent donning and doffing protective gear and clothing.

Decisions in the cases are expected before July 2016.

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