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Texas Lawyer named Dallas partner Olivia Adendorff among 25 lawyers featured as the 2019 “On the Rise” honorees in its Professional Excellence Awards, an annual list of “fantastic lawyers who have dedicated themselves to building exceptional careers” and “advancing the profession as a whole.” The report was published on September 3, 2019. Olivia Adendorff has handled a wide assortment of antitrust, consumer protection, and general litigation matters, with particular expertise in managing complex commercial class actions. She has practiced in federal district and appellate courts across the country, including appearing before the Fifth, Sixth, Seventh, Ninth, and Eleventh circuit courts of appeal.

The Best Lawyers in America® 2020 has recognized 158 Gibson Dunn attorneys in 54 practice areas. Additionally, 48 lawyers were recognized in Best Lawyers International in Belgium, Brazil, France, Germany, Singapore, United Arab Emirates and United Kingdom.

Click for PDF Decided May 28, 2019 Home Depot U.S.A., Inc. v. George W. Jackson, No. 17-1471 Today, the Supreme Court held 5-4 that when a defendant in a state court action files a counterclaim against a third party as a class action, the third-party defendant may not remove the class action counterclaim to federal court. Background: Citibank filed an action in state court to collect on a credit card debt.  In response, the debtor filed a class action counterclaim under state consumer protection law against Citibank and named Home Depot—a third-party retailer not previously involved in the case—as an additional defendant.  Relying upon the Class Action Fairness Act of 2005 (CAFA), which permits “any defendant” to remove certain state class actions to federal court, see 28 U.S.C. § 1453(b), as well as the general removal provision, 28 U.S.C. § 1441(a), Home Depot sought to remove the case to federal court.  A federal district court concluded that Home Depot could not do so because Home Depot was not a defendant in the original debt-collection action and therefore was not a “defendant” within the meaning of the removal statute.  The Fourth Circuit affirmed. Issue: Does a third-party defending itself against a class action counterclaim qualify as a “defendant” under the general removal provision or the removal provision of CAFA, such that the third-party may remove the case from state to federal court? Court’s Holding: No.  The term “defendant” in the removal statutes means only “the party sued by the original plaintiff,” not a counterclaim defendant or third-party joined in the case by a defendant. “[T]he limits that Congress has imposed on removal show that it did not intend to allow all defendants an unqualified right to remove.” Justice Thomas, writing for the majority What It Means: The Court explained that district courts determine whether a civil action is removable to federal court by assessing whether the action—not the claim—could have been filed originally in federal court.  As a result, the Court reasoned, removal must be based on the complaint, not any later-filed counterclaims or third-party claims. The Court emphasized that “the filing of counterclaims that included class-action allegations against a third party did not create a new ‘civil action’ with a new ‘plaintiff’ and a new ‘defendant.’”  Instead, the “defendant” for purposes of removal was the party sued by the original plaintiff.  The Court thus extended to third-party counterclaim defendants its longstanding holding in Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100 (1941), that an original plaintiff may not remove a state court counterclaim to federal court. The Court concluded that CAFA did not require a different result:  CAFA was “intended only to alter certain restrictions on removal”—such as the requirement that all defendants agree to removal—“not [to] expand the class of parties who can remove a class action.”  The Court thus held that the word “defendant” had the same meaning in CAFA as in the general removal provision. The decision was authored by Justice Thomas and joined by Justices Ginsburg, Breyer, Sotomayor, and Kagan.  Justice Alito authored a dissent on behalf of the four remaining Justices.  Although “counterclaim class actions” are relatively rare, Justice Alito cautioned that the Court’s decision could encourage more plaintiffs to structure their class actions as counterclaims in state courts in an attempt to circumvent the protections afforded by CAFA and to avoid litigating in a federal forum.  The majority emphasized that authority to amend the statute to preclude such litigation tactics rests with Congress, not the Court. As always, Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding developments at the Supreme Court.  Please feel free to contact the following practice leaders: Appellate and Constitutional Law Practice Allyson N. Ho +1 214.698.3233 aho@gibsondunn.com Mark A. Perry +1 202.887.3667 mperry@gibsondunn.com Related Practice: Class Actions Theodore J. Boutrous, Jr. +1 213.229.7804 tboutrous@gibsondunn.com Christopher Chorba +1 213.229.7396 cchorba@gibsondunn.com Theane Evangelis +1 213.229.7726 tevangelis@gibsondunn.com © 2019 Gibson, Dunn & Crutcher LLP Attorney Advertising:  The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice.

Click for PDF This update provides an overview and summary of key class action developments during the first quarter of 2019 (January through March), as well as an important decision concerning class arbitration that the Supreme Court issued in April. Part I summarizes the Supreme Court’s three recent opinions concerning the Federal Arbitration Act, Henry Schein, Inc. v. Archer & White Sales, Inc., 139 S. Ct. 524 (2019), New Prime, Inc. v. Oliveira, 139 S. Ct. 532 (2019), and Lamps Plus, Inc. v. Varela, No. 17-988, 2019 WL 1780275 (U.S. Apr. 24, 2019). Part II covers the Supreme Court’s decision in Frank v. Gaos, 139 S. Ct. 1041 (2019), which remanded the closely watched case and directed the lower courts to assess whether the plaintiffs have Article III standing, rather than providing the much-anticipated guidance on the propriety of cy pres-only class action settlements. Part III discusses the Supreme Court’s decision in Nutraceutical Corp. v. Lambert, 139 S. Ct. 710 (2019), that the 14-day deadline to seek permission to appeal a class certification order under Rule 23(f) is not subject to equitable tolling. Part IV addresses a mandamus petition pending in the Ninth Circuit regarding Northern District of California Judge William H. Alsup’s local policy of barring parties from engaging in class settlement discussions before class certification has been granted. I.  The Supreme Court Issues Three Decisions on the Federal Arbitration Act Arbitration has been a hot topic at the Supreme Court in the first few months of 2019, with the high court issuing three notable decisions on the Federal Arbitration Act (“FAA”). Who Decides Arbitrability?  First, on January 8, the Court decided Henry Schein, Inc. v. Archer & White Sales, Inc., 139 S. Ct. 524 (2019).  Writing for a unanimous Court in his first opinion, Justice Kavanaugh held that courts may not decline to enforce agreements delegating arbitrability issues to an arbitrator, even if the court concludes that the claim of arbitrability is “wholly groundless.”  Id. at 531. The defendants in the underlying antitrust lawsuit had sought to compel arbitration based on a clause in their contracts with the plaintiff that purported to require arbitration of any “dispute arising under or related to” the contracts, with an exception for “actions seeking injunctive relief.”  Id. at 528 (quotation marks and citation omitted).  Although the plaintiff had sought damages as well as injunctive relief, the defendants argued that arbitration was required because damages were the predominant form of relief requested.  Id.  Relying on a purported exception to the rule that parties may delegate arbitrability decisions to arbitrators, the Fifth Circuit held that the trial court properly declined to refer the arbitrability issue to an arbitrator because the plaintiff’s claim for injunctive relief made the defendants’ request for arbitration “wholly groundless.”  Id. The Supreme Court reversed, holding that courts must enforce agreements to delegate arbitrability issues to an arbitrator, even if the court concludes that a claim of arbitrability is “wholly groundless,” because that exception has no basis in either the text of the FAA or in the line of Supreme Court cases that expressly allowed parties to delegate arbitrability decisions to the arbitrator.  Id. at 531.  The Court was also skeptical that the “wholly groundless” exception would promote efficiency, as the plaintiff had argued.  Rather, the Court noted that such an exception would “inevitably spark collateral litigation” over whether a claim of arbitrability was merely “groundless” as opposed to “wholly groundless.”  Id. at 530-31.  As has been a theme with the Court in recent years, the Henry Schein decision again emphasized the importance of enforcing arbitration agreements as drafted and avoiding exceptions that would permit judicial second-guessing. Just one week after its decision in Henry Schein, the Court issued the opinion in New Prime, Inc. v. Oliveira, 139 S. Ct. 532 (2019), which we previewed in our third quarter 2018 update.  Writing for another unanimous Court (8-0, with Justice Kavanaugh taking no part in the decision), Justice Gorsuch held that it is up to courts—not arbitrators—to decide the applicability of Section 1 of the FAA (9 U.S.C. § 1), which exempts from arbitration any disputes involving “contracts of employment” of certain transportation workers.  The Court also held that the § 1 exemption applies not only to employer-employee agreements but also to independent contractor agreements. We Meant What We Said In Stolt-Nielsen.  Next, the Court decided Lamps Plus, Inc. v. Varela, No. 17-988, 2019 WL 1780275 (U.S. Apr. 24, 2019), which built upon the Court’s earlier holding in Stolt-Nielsen S.A. v. AnimalFeeds Int’l Corp., 559 U.S. 662 (2010), that class arbitration so fundamentally changes the nature of dispute resolution that the parties must expressly agree to it. In Stolt-Nielsen, the parties had stipulated that their contract was silent on the issue of class arbitration.  The Court thus held that “a party may not be compelled under the FAA to submit to class arbitration unless there is a contractual basis for concluding that the party agreed to do so”—silence is not enough.  Stolt-Nielsen, 559 U.S. at 684.  Following this decision, the parties in Lamps Plus never stipulated that the agreement was “silent” on this issue, and the plaintiffs attempted to infer an agreement to class arbitration from various provisions in the agreement.  In its 5-4 decision, the Court held that an agreement that is ambiguous on whether it allows class arbitration is not sufficient; the FAA preempts state laws that require class arbitration when an arbitration agreement is ambiguous as to whether the parties consented to such a procedure.  Lamps Plus, 2019 WL 1780275, at *6. Lamps Plus involved a dispute over the availability of class arbitration in an employment dispute.  The defendant-employer argued that the agreement required individual arbitration because, among other reasons, it provided that the plaintiff must arbitrate claims or controversies that “I may have against the Company.”  The plaintiff-employee, on the other hand, argued that the agreement was ambiguous in part because it provided that “arbitration shall be in lieu of any and all lawsuits or other civil legal proceedings.”  The Ninth Circuit applied California contract law and found the agreement ambiguous, which led the court to apply a doctrine that requires contractual ambiguities to be resolved against the drafter.  Varela v. Lamps Plus, Inc., 701 F. App’x 670 (9th Cir. 2017). Writing for the Court, Chief Justice Roberts emphasized that “arbitration ‘is a matter of consent, not coercion,’” and therefore “courts may not infer consent to participate in class arbitration absent an affirmative ‘contractual basis for concluding that the party agreed to do so.’”  Lamps Plus, 2019 WL 1780275, at *5–6 (quoting Stolt-Nielsen, 559 U.S. at 681, 684).  The Court also noted that class arbitration is generally not contemplated by the FAA, id. at *7, and that arbitration loses many of its advantages (“lower costs, greater efficiency and speed, and the ability to choose expert adjudicators to resolve specialized disputes”) when done on a classwide basis.  Id. at *5.  The Court found that California’s anti-drafter interpretation doctrine is grounded in public policy and invoked only once a court finds that it cannot discern the parties’ intent.  Id. at *6–7.  But, the Court held a public-policy consideration cannot trump the FAA’s consent requirement, and California’s rule was therefore preempted.  Id. at *7. Justice Thomas joined the majority in full, but also filed a concurring opinion to state his view that the contract at issue was not “ambiguous” and therefore Stolt-Nielsen foreclosed the availability of class arbitration.  Id. at *8–9.  Justice Thomas would not have evaluated whether “California’s contra proferentem rule, as applied here, ‘stands as an obstacle to the accomplishment and execution of the full purposes and objectives’ of the FAA” because he “remain[s] skeptical of this Court’s implied pre-emption precedents.”  Id. at *9 (citations omitted). Justices Kagan, Ginsburg, Breyer, and Sotomayor each filed a dissenting opinion.  Writing the principal dissent, Justice Kagan emphasized the capacious language in the contract providing that “any and all disputes, claims, or controversies” must be arbitrated.  Id. at *16.  In her view, this language was “broad enough to cover both individual and class actions.”  Id. at *17.  Alternatively, Justice Kagan wrote that the contract is ambiguous and California courts would therefore apply the anti-drafter doctrine to permit class arbitration.  Id. at *17–19.  This approach is correct, she asserted, because that interpretive rule does not facially discriminate against arbitration.  Id. Lamps Plus marks a substantial victory for class-action defendants, as plaintiffs will no longer be able to seek classwide arbitration with an unsuspecting defendant based on supposed ambiguities in an arbitration agreement.  As a result, defendants can now enjoy greater assurance that arbitration agreements calling for individual, bilateral arbitration will not be construed to require aggregate dispute resolution.  But as the intervening seven years between Stolt-Nielsen and Lamps Plus demonstrate, plaintiffs’ attorneys will continue to seek ways to evade individual arbitration. II.  The Supreme Court Remands for Standing Analysis Under Spokeo, Rather than Weighing in on the Propriety of Cy Pres-Only Class Action Settlements The Supreme Court also issued a decision this past quarter in the Frank v. Gaos, 139 S. Ct. 1041 (2019), a case we previously discussed in our 2017 fourth quarter update, and in our first, second, and third quarter updates in 2018.   In its decision, the Supreme Court ended up not addressing the issue it had granted certiorari to decide—the propriety of cy pres-only settlements that provide no direct compensation to class members.  Instead, at the urging of the Solicitor General, the Court vacated and remanded “for the courts below to address the plaintiffs’ standing in light of Spokeo.”  Id. at 1046. The plaintiff, Paloma Gaos, had alleged that “Google’s transmissions of user’s search terms in referrer headers” violated the Stored Communications Act (SCA), which provides a private right of action when “a person or entity providing an electronic communication service to the public . . . knowingly divulge[s] to any person or entity the contents of a communication while in electronic storage by that service,” 18 U.S.C. § 2702(a)(1).  Gaos, 139 S. Ct. at 1044.  After initially dismissing the complaint for lack of standing in a pre-Spokeo decision, the district court permitted the SCA claim to proceed.  Relying on the Ninth Circuit’s decision in Edwards v. First American Corp., 610 F.3d 514 (2010), the district court determined that Gaos established standing in her amended complaint by alleging a violation that was “specific to her (i.e., based on a search she conducted).”  Gaos, 139 S. Ct. at 1044. The putative class action was consolidated with another complaint; the parties reached a classwide settlement.  Id. at 1045.  The terms of that settlement included Google agreeing to pay $8.5 million, with most of the funds to be distributed not to absent class members but to six cy pres recipients.  Id.  The cy pres recipients were selected by class counsel and Google to “promote public awareness and education . . . related to protecting privacy on the internet.”  139 S. Ct. at 1044. Five class members objected to the settlement, and two of them appealed the approval of the settlement to the Ninth Circuit.  The objectors took issue “with the choice of cy pres recipients because Google has in the past donated to at least some” of them, three others had “previously received Google settlement funds,” and another three were “organizations housed at class counsel’s alma maters.”  In re Google Referrer Header Privacy Litig., 869 F.3d 737, 744 (9th Cir. 2017). The Ninth Circuit affirmed and the Supreme Court thereafter granted certiorari to determine whether the cy pres-only settlement was fair, reasonable, and adequate under Rule 23(e)(2).  Gaos, 193 S. Ct. at 1045.  The case attracted significant attention from the class actions bar, as well as from non-profits who receive cy pres donations, leading to the filing of over twenty amicus briefs. The most influential amicus brief proved to be the Solicitor General’s, which urged the Court to vacate the Ninth Circuit decision and remand the case so the lower courts could address the standing issue.  The district court had found standing based on the Ninth Circuit’s decision in Edwards, which had held “that the violation of a statutory right automatically satisfies the injury-in-fact requirement whenever a statute authorizes a person to sue to vindicate that right.”  Gaos, 139 S. Ct. at 1046.  But in between the district court’s decision and the Ninth Circuit’s ruling on the cy pres issue, the Supreme Court abrogated Edwards in Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016), holding that “Article III standing requires a concrete injury even in the context of a statutory violation.”  Id. at 1549.  The Ninth Circuit, however, did not address Spokeo in its opinion in Goas. Noting that it is “a court of review, not first view,” the Supreme Court remanded the issue of Article III standing back to the lower courts, explaining that “no court in this case has analyzed whether any named plaintiff has alleged SCA violations that are sufficiently concrete and particularized to support standing.”  Gaos, 139 S. Ct. at 1046. Justice Thomas dissented, contending a plaintiff need only allege invasion of a private right to establish standing, and the Stored Communications Act and state law created such private rights.  Id. at 1047.  On the merits, he opined that the cy pres settlement provided class members with no meaningful relief, rendering it unfair and unreasonable under Rule 23(e)(2).  Id. at 1048. Depending on how the standing issue is resolved on remand, Gaos may make a return trip the Supreme Court in the near future, as the propriety of cy pres-only class action settlements remains an important and unresolved issue. III.  The Supreme Court Rejects Equitable Tolling Under Rule 23(f) The Supreme Court also resolved a circuit split over whether Federal Rule of Civil Procedure 23(f)’s 14-day deadline for seeking permission to appeal a class certification order is subject to equitable tolling.  In Nutraceutical Corp. v. Lambert, 139 S. Ct. 710 (2019), the Court unanimously answered “no” to this question. As previewed in our past updates in 2017 and 2018, Lambert involved claims that Nutraceutical’s marketing of a dietary supplement violated California consumer-protection laws.  Id. at 713.  The district court initially certified a class but then decertified it in February 2015.  Id.  Instead of appealing the decertification decision within Rule 23(f)’s fourteen-day window, Lambert informed the district court that he would move for reconsideration.  Id.  He filed that motion twenty days after the decertification order and sought appellate review only after the court denied his bid for reconsideration.  Id.  Over Nutraceutical’s objection, the Ninth Circuit deemed Lambert’s petition for review timely, reasoning that Rule 23(f)’s deadline was “non-jurisdictional” and was equitably tolled.  Id. A unanimous Supreme Court reversed.  Id. at 718.  Writing for the Court, Justice Sotomayor first held that Rule 23(f)’s time limitation was a nonjurisdictional claim-processing rule.  Id. at 712, 714.  The Court then turned to whether the rule was mandatory or subject to tolling.  Id. at 714.  Looking to “whether the text of the rule le[ft] room for such flexibility,” the Court found clear guidance in the Federal Rules of Procedure and Federal Rules of Appellate Procedure.  Id. at 714–15.  First, Rule 23(f) imposed a time limitation without qualification, and Federal Rule of Appellate Procedure 5 “single[d] out Civil Rule 23(f) for inflexible treatment.”  Id. at 715.  Second, Rule 23(f)’s deadline was expressly carved out from the other rules providing for tolling under Rule 26—“express[ing] a clear intent to compel rigorous enforcement of Rule 23(f)’s deadline, even where good cause for equitable tolling might otherwise exist.”  Id. Lambert continues the Supreme Court’s trend of enforcing the Federal Rules as written in class actions.  It also realigns the Ninth Circuit with other courts across the country, reminding litigants to not rely on courts’ powers to forgive tardy filings.  But the decision expressly leaves three related questions unanswered.  First, it remains unclear whether a motion for reconsideration filed within Rule 23(f)’s 14-day deadline tolls the time to file for permission to appeal under Rule 23(f) itself, as every circuit to have considered the issue has concluded, but was met with skepticism by some of the Justices during oral argument.  Id. at 717 n.7.  Second, the Court did not decide whether the deadline is tolled if a district court misleads a litigant about the deadline.  Id.  Third, the Court did not decide what happens if there was an “insurmountable impediment to filing timely.”  Id. IV.  The Ninth Circuit Considers District Judge’s Rule Prohibiting Pre-Certification Class Settlement Discussions Finally, parties litigating in the Northern District of California may take special interest in a mandamus petition pending before the Ninth Circuit that challenges Judge William H. Alsup’s policy barring class action settlement discussions before class certification is granted.  See In re: Logitech, Inc., No. 19-70248, Dkt. 1-1 (9th Cir. Jan. 25, 2019).  Judge Alsup’s standing order for class actions limits settlement discussions between opposing counsel until they know what claims are certified for class treatment or until the district court grants a motion under Rule 23(g)(3) for the appointment of interim class counsel.  Id. at 3-4. The plaintiff in Logitech filed suit on behalf of a putative class, alleging various false-advertising claims.  Id. at 1.  After several months of litigating, the parties filed a joint stipulation explaining that pre-certification settlement was appropriate, and requesting that a magistrate judge oversee the process.  Id. at 4.  The plaintiff also filed a motion for appointment of interim class counsel to oversee the settlement process.  Id. at 3-4.  Judge Alsup expressed concern that the resulting settlement would have a “collusive” effect on absent class members pre-certification, and thus the court declined to allow settlement talks to proceed before certification and denied the motion for appointment of interim class counsel.  Id. at 5–7. Logitech argues that Judge Alsup’s policy amounts to an unconstitutional prior restraint on free speech that also violates Rule 23 and the “strong judicial policy that favors settlements, particularly where complex class action litigation is concerned.”  Id. at 10, 19.  It also argued Judge Alsup’s policy does not survive strict scrutiny review because it is not content-neutral—it specifically forbids settlement discussions—and because it is not the least restrictive means “to prevent inappropriately discounted settlements.”  Id. at 12-14 (quotation marks and citation omitted).  Logitech also contended that Rule 23 confirms that parties may engage in pre-certification settlement discussions, as the Advisory Committee Notes state that “if a class has not been certified,” the parties must give the court a sufficient basis in the record to conclude that it will be able to certify the class “after the final hearing” assessing the settlement.  Id. at 20. Judge Alsup filed a response to Logitech’s petition in which he explained the reasoning behind his rule.  See In re: Logitech, Inc., No. 19-70248, Dkt. 4-1 (9th Cir. Feb. 28, 2019).  The court first explained that for absent class members, “there is an important difference between a class settlement struck before a ruling under Rule 23 seeking class certification and one negotiated after a class has been certified.”  Id. at 2.  When parties negotiate a classwide settlement before certification, Judge Alsup noted that “plaintiff’s counsel necessarily negotiates from a position weakened by the uncertainty over whether or not counsel will later win or lose a class certification motion,” which he asserted can prejudice any settlement.  Id. at 2-3.  Thus, absent class members deserve “to have their recovery discounted only on the merits of their claims without further discount based on possible unsuitability of the case for class certification.”  Id. at 4. The Ninth Circuit referred the mandamus petition to a motions panel and oral argument has been set for July 18, 2019. The following Gibson Dunn lawyers prepared this client update: Christopher Chorba, Theane Evangelis, Kahn Scolnick, Bradley Hamburger, Jeremy Smith, Nathan Strauss, Julian Kleinbrodt, Tim Kolesk, Lauren Fischer, and Kory Hines. Gibson Dunn attorneys are available to assist in addressing any questions you may have regarding these developments.  Please contact the Gibson Dunn lawyer with whom you usually work in the firm’s Class Actions or Appellate and Constitutional Law practice groups, or any of the following lawyers: Theodore J. Boutrous, Jr. – Co-Chair, Litigation Practice Group – Los Angeles (+1 213-229-7000, tboutrous@gibsondunn.com) Christopher Chorba – Co-Chair, Class Actions Practice Group – Los Angeles (+1 213-229-7396, cchorba@gibsondunn.com) Theane Evangelis – Co-Chair, Class Actions Practice Group – Los Angeles (+1 213-229-7726, tevangelis@gibsondunn.com) Kahn A. Scolnick – Los Angeles (+1 213-229-7656, kscolnick@gibsondunn.com) Bradley J. Hamburger – Los Angeles (+1 213-229-7658, bhamburger@gibsondunn.com) © 2019 Gibson, Dunn & Crutcher LLP Attorney Advertising:  The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice.

Click for PDF Decided April 24, 2019 Lamps Plus, Inc. v. Varela, No. 17-988 Today, the Supreme Court held 5-4 that the Federal Arbitration Act (FAA) preempts state laws that require class arbitration where an arbitration agreement is ambiguous as to whether the parties consented to such a procedure. Background: In Stolt-Nielsen S.A. v. AnimalFeeds International Corp., 559 U.S. 662 (2010), the Supreme Court held that a party may not be compelled to submit to class arbitration if the parties’ agreement does not clearly evidence that the party agreed to do so. Here, the parties disputed whether their agreement could be read to allow class arbitration. The defendant argued that the agreement required individual arbitration because it provided that the plaintiff must arbitrate claims or controversies that “I may have against the Company.” The plaintiff argued that the agreement was ambiguous because it provided that “arbitration shall be in lieu of any and all lawsuits or other civil legal proceedings.” Agreeing with the plaintiff, the Ninth Circuit found the agreement ambiguous. And because the agreement was governed by California law, the Ninth Circuit applied the state-law principle that contractual ambiguities are resolved against the drafter to hold that the agreement should be interpreted to require the defendant to submit to class arbitration. Issue: Whether the Federal Arbitration Act forecloses a state-law interpretation of an arbitration agreement that would authorize class arbitration based solely on general language commonly used in arbitration. Court’s Holding: Yes. The FAA preempts state laws that would “impose class arbitration in the absence of the parties’ consent,” and courts may not rely on state contract law to “infer from an ambiguous agreement that the parties have consented to arbitrate on a classwide basis.” “The [Federal Arbitration Act] requires more than ambiguity to ensure that the parties actually agreed to arbitrate on a classwide basis.” Chief Justice Roberts, writing for the majority What It Means: The Court’s opinion reaffirms Stolt-Nielsen’s observation that class arbitration is fundamentally different from bilateral arbitration, and that bilateral arbitration is the default mode of arbitrating under the FAA.  If parties wish to resolve disputes in arbitration on a classwide basis, their arbitration agreement must unambiguously so provide.  As the Court noted, “[l]ike silence, ambiguity does not provide a sufficient basis to conclude that parties to an arbitration agreement agreed to ‘sacrifice[] the principal advantage of arbitration’” by agreeing to classwide arbitration. The Court’s decision also makes clear that the FAA preempts state laws that conflict with the strong federal policy favoring bilateral arbitration.  Courts “may not rely on state contract principles to ‘reshape traditional individualized arbitration by mandating classwide arbitration procedures without the parties’ consent.’” The Court’s decision is a victory for defendants who are party to an arbitration agreement that is silent or ambiguous as to class arbitration.  The decision should help to ensure that defendants cannot be forced into unfair or inefficient class arbitration proceedings against their will. Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding developments at the Supreme Court.  Please feel free to contact the following practice leaders: Appellate and Constitutional Law Practice Allyson N. Ho +1 214.698.3233 aho@gibsondunn.com Mark A. Perry +1 202.887.3667 mperry@gibsondunn.com Related Practice: Class Actions Theodore J. Boutrous, Jr. +1 213.229.7804 tboutrous@gibsondunn.com Christopher Chorba +1 213.229.7396 cchorba@gibsondunn.com Theane Evangelis +1 213.229.7726 tevangelis@gibsondunn.com

Click for PDF Decided March 20, 2019 Frank v. Gaos, No. 17-961  The Supreme Court determined that questions concerning plaintiffs’ standing to challenge Google’s alleged violations of user privacy prevented the Court from deciding whether cy pres-only class action settlements are fair, reasonable, and adequate under Federal Rule of Civil Procedure 23(e). Background: Plaintiffs, on behalf of a putative class of 129 million users of Google’s search engine, alleged that Google violated users’ privacy under the Stored Communications Act, 18 U.S.C. § 2701 et seq., by disclosing the search terms they used to third-party websites. The parties agreed to an $8.5 million class action settlement consisting of $2 million in attorneys’ fees and costs and $6.5 million distributed as a cy pres award to various institutions studying internet privacy and information sharing. Under the proposed settlement, class members would receive no money. The district court approved the settlement, concluding that it would not be feasible to distribute the $6.5 million portion of the settlement to class members. The Ninth Circuit affirmed. Issue:  Whether a class action settlement is fair, reasonable, and adequate under Federal Rule of Civil Procedure 23(e) when class members receive no direct, monetary relief and instead all of the settlement funds are distributed to cy pres beneficiaries. Court’s Holding:  The lower courts should decide in the first instance whether any named plaintiff has Article III standing. “Resolution of the standing question should take place in the District Court or the Ninth Circuit in the first instance. We therefore vacate and remand for further proceedings.” Per Curiam What It Means: Although the Supreme Court granted certiorari to decide an important question concerning cy pres awards, the Court, in response to an argument raised by the Solicitor General in an amicus brief, ordered supplemental briefing on whether any named plaintiff had Article III standing. The Court ultimately accepted the Solicitor General’s view that the case should be remanded for the lower courts to address that question in the first instance—thus demonstrating the effect that an amicus brief can have on the outcome of a case. In the lower courts, the plaintiffs alleged that they had Article III standing because Google, by disclosing their search terms, allegedly violated their rights under the Stored Communications Act to be free from unlawful disclosure of certain communications. But the Supreme Court questioned whether those allegations established Article III standing in light of Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016), which recognized that the alleged violation of a statutory right does not automatically satisfy Article III’s injury-in-fact requirement. Justice Thomas dissented. As in his concurring opinion in Spokeo, Justice Thomas reiterated that “a plaintiff seeking to vindicate a private right need only allege an invasion of that right to establish standing.” He would have held that the named plaintiffs had standing based on the alleged violation of Google’s private duties owed to them under state and federal law. Justice Thomas also would have reversed the class certification and class settlement orders and held that the absent class members’ interests were not adequately represented because only the named plaintiffs and class counsel received significant benefits, and the lack of relief for absent class members rendered the settlement unfair and unreasonable under Rule 23(e). Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding developments at the Supreme Court.  Please feel free to contact the following practice leaders: Appellate and Constitutional Law Practice Mark A. Perry +1 202.887.3667 mperry@gibsondunn.com Related Practice: Class Actions Theodore J. Boutrous, Jr. +1 213.229.7804 tboutrous@gibsondunn.com Christopher Chorba +1 213.229.7396 cchorba@gibsondunn.com Theane Evangelis +1 213.229.7726 tevangelis@gibsondunn.com

Los Angeles partner Christopher Chorba and associate Jeremy Smith are the authors of “So will a Martian invasion extend the Rule 23(f) deadline?” [PDF] published by The Daily Journal on March 13, 2019.

Click for PDF Decided February 26, 2019 Nutraceutical Corp. v. Lambert, No. 17-1094 Today, the Supreme Court held 9-0 that Federal Rule of Civil Procedure 23(f)’s 14-day deadline for filing a petition for permission to appeal an order granting or denying class certification is not subject to equitable tolling. Background: Federal Rule of Civil Procedure 23(f) imposes a 14-day deadline to petition for permission to appeal from an order granting or denying class certification. After a district court decertified a class, plaintiff was granted 20 days in which to file a motion for reconsideration.  Plaintiff timely filed the motion 20 days after issuance of the decertification order, which the court denied three months later. Plaintiff then filed a Rule 23(f) petition for permission to appeal 14 days after the denial of reconsideration. The Ninth Circuit granted the petition, holding that Rule 23(f)’s deadline was not jurisdictional and that equitable circumstances may warrant tolling the Rule 23(f) deadline, including where a plaintiff timely informs the district court of his intention to file a reconsideration motion before the Rule 23(f) deadline has lapsed. Issue: Whether Federal Rule of Civil Procedure 23(f)’s 14-day deadline to file a petition for permission to appeal an order granting or denying class-action certification is subject to equitable tolling. Court’s Holding: No.  Rule 23(f)’s 14-day deadline is not subject to equitable tolling. “The Rules . . . express a clear intent to compel rigorous enforcement of Rule 23(f)’s deadline, even where good cause for equitable tolling might otherwise exist.” Justice Sotomayor, writing for the unanimous Court What It Means: The Court’s ruling means that a court may not forgive a party’s failure to file a petition for permission to appeal within Rule 23(f)’s 14-day window.  Although this case arose in the context of a plaintiff’s petition for permission to appeal an order denying class certification, it applies with equal force to petitions filed by defendants seeking to appeal orders granting class certification.  It is therefore imperative that petitions for permission to appeal are filed within Rule 23(f)’s 14-day window. The Court focused on the text of Federal Rule of Appellate Procedure 5(a)(2), which provides that a petition for permission to appeal “must be filed within the time specified,” and Federal Rule of Appellate Procedure 26(b), which states that a court of appeals “may not extend the time to file . . . a petition for permission to appeal.” The Court’s decision makes clear that whether other rules are subject to equitable tolling will depend on whether the pertinent rule or rules “show a clear intent to preclude tolling,” and not on whether the rule is jurisdictional in nature. Two questions remain open after the Court’s decision.  First, the Court did not address whether a motion for reconsideration filed before Rule 23(f)’s 14-day deadline has elapsed may reset the clock.  Second, the Court did not consider whether an order denying reconsideration may itself be appealable under Rule 23(f). Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding developments at the Supreme Court.  Please feel free to contact the following practice leaders: Appellate and Constitutional Law Practice Caitlin J. Halligan +1 212.351.3909 challigan@gibsondunn.com Mark A. Perry +1 202.887.3667 mperry@gibsondunn.com Related Practice: Class Actions Theodore J. Boutrous, Jr. +1 213.229.7804 tboutrous@gibsondunn.com Christopher Chorba +1 213.229.7396 cchorba@gibsondunn.com Theane Evangelis +1 213.229.7726 tevangelis@gibsondunn.com

Although class action litigation in the United States remains an outlier in the global legal landscape, recent developments in Europe indicate that class or representative actions could soon become more meaningful parts of European legal frameworks. In the last nine months, the European Commission proposed the first EU-wide class action regime, and a new law took effect in Germany that permits representative actions on behalf of consumers. These and other developments could have significant implications for global companies that could be subject to new legal challenges in foreign jurisdictions. A panel of Gibson Dunn partners from the United Kingdom, France, Germany, and the United States provide insights into these emerging trends and offer practical guidance to in-house attorneys for managing associated risks. Topics to be covered: Availability and contours of class actions in Germany, France, and the UK Differences in US versus European class action frameworks Significance of the EU Directive: “New Deal for Consumers” Expectations for the future View Slides (PDF) PANELISTS: Chantale Fiebig Partner in the Washington, D.C. office whose practice focuses on complex civil litigation in federal court. Ms. Fiebig has substantial experience litigating consumer class actions, particularly relating to products that are heavily regulated. She has successfully defended claims involving branded pharmaceuticals, polyurethane foam, automobiles, and food and beverage products, among others. Daniel W. Nelson Partner in the Washington, D.C. office, Co-Chair of the firm’s Environmental Litigation and Mass Tort Practice Group, and a member of the Class Actions and Complex Litigation Practice Group. Mr. Nelson has a national complex litigation practice spanning a wide range of areas, with a particular focus on environmental and mass tort litigation, complex business litigation, antitrust litigation, and class action litigation. He has served as the lead defense counsel for clients in the courts of more than 30 states, and he has defended more than 150 class action lawsuits, including as lead trial counsel in securing a defense verdict in a certified class action jury trial. Eric Bouffard Partner in the Paris office and a member of the firm’s Litigation, International Arbitration and Business Restructuring Practice Groups. Mr. Bouffard is particularly active in cross-border litigation, commercial arbitration, insurance and reinsurance, commercial law (including insolvency and recovery of debt), industrial risk (latent defects, interruption of production, delay and consequential losses) and international trade before both judicial courts and arbitral tribunals. Finn Zeidler Partner in the Frankfurt office and a member of the firm’s Litigation and White Collar Defense and Investigations Practice Groups. Mr. Zeidler focuses his litigation practice on corporate and commercial litigation and arbitration, often with a transatlantic background. Another focus of his practice is on white-collar crime and regulatory investigations as well as on compliance issues, often with cross-border elements. He has significant experience in the automotive, financial and new energy sectors. Among others, Mr. Zeidler has represented German publicly-listed corporations in proceedings under the German legal regulation “KapMuG”, concerning securities mass actions. Osma Hudda Partner in the London office and a member of the firm’s Dispute Resolution Practice Group. Ms. Hudda has broad-based dispute resolution experience including litigation, international arbitration and regulatory investigations. Her litigation experience has involved representing clients in Employment Tribunals, the High Court and Court of Appeal. Ms. Hudda also has defended companies involved in regulatory investigations in the UK and internationally as well as assisting clients in large scale internal investigations and related compliance issues. MCLE CREDIT INFORMATION: This program has been approved for credit in accordance with the requirements of the New York State Continuing Legal Education Board for a maximum of  1.0 credit hour, of which 1.0 credit hour may be applied toward the areas of professional practice requirement. This course is approved for transitional/non-transitional credit. Attorneys seeking New York credit must obtain an Affirmation Form prior to watching the archived version of this webcast. Please contact Jeanine McKeown (National Training Administrator), at 213-229-7140 or jmckeown@gibsondunn.com to request the MCLE form. This program has been approved for credit in accordance with the requirements of the Texas State Bar for a maximum of 1.0 credit hour, of which 1.0 credit hour may be applied toward the area of accredited general requirement. Attorneys seeking Texas credit must obtain an Affirmation Form prior to watching the archived version of this webcast. Please contact Jeanine McKeown (National Training Administrator), at 213-229-7140 or jmckeown@gibsondunn.com to request the MCLE form. Gibson, Dunn & Crutcher LLP certifies that this activity has been approved for MCLE credit by the State Bar of California in the amount of 1.0 hour. California attorneys may claim “self-study” credit for viewing the archived version of this webcast.  No certificate of attendance is required for California “self-study” credit.

Law360 named Gibson Dunn one of its five Class Action Practice Groups of the Year [PDF] for 2018. The practice group was recognized “as a leader in ‘gig economy’ lawsuits.” The firm’s Class Action practice was profiled on January 22, 2019. Gibson Dunn’s Class Actions Practice Group has an unrivaled record of success in the defense of high-stakes class action lawsuits across the United States. We have successfully litigated many of the most significant class actions in recent years, amassing an impressive win record in trial and appellate courts, including before the U. S. Supreme Court, that have changed the class action landscape nationwide.

Click for PDF This update provides an overview and summary of key class action developments during the fourth quarter of 2018 (October through December). Part I summarizes amendments to Rule 23 that went into effect on December 1, 2018. Part II covers an important First Circuit decision in In re Asacol Antitrust Litigation, in which the court reversed a class certification order where a significant number of uninjured individuals were included in the certified class. Part III discusses a Second Circuit decision rejecting an attempt by defendants to moot putative class actions. Part IV addresses a Ninth Circuit decision considering what constitutes a “coupon” settlement subject to increased scrutiny under the Class Action Fairness Act. I.   December 2018 Amendments to Rule 23 First, new amendments to Rule 23 took effect on December 1, 2018.  These amendments focus on procedural issues relating to class settlement and notice to absent class members.  We have briefly summarized the changes below: Electronic Notice to Rule 23(b)(3) Classes:  Rule 23(c)(2)(B), which governs notice requirements for Rule 23(b)(3) classes, now expressly permits notice via electronic or other means, so long as the selected method is “the best notice practicable under the circumstances.” Explicit Standards for Settlement Approval:  To provide courts with a standard set of substantive and procedural concerns to consider when determining whether a settlement is “fair, reasonable, and adequate,” the amended Rule 23(e)(2) directs courts to consider:  (1) the adequacy of representation by class representatives and class counsel; (2) whether “the proposal was negotiated at arm’s length”; (3) the adequacy of relief, taking into account various factors; and (4) whether “class members are treated equitably relative to each other.” Many courts had already been relying on these factors, but there was not always uniformity among the federal circuits.  The advisory committee’s comments also specifically note that the amended language was not intended to displace other factors courts have used to determine fairness, reasonableness, and adequacy. Addressing “Bad Faith” Objectors:  The amendments to Rule 23(e)(5) attempt to deter “bad faith” objections to class settlements in two ways.  First, Rule 23(e)(5)(A) requires objectors to state specific grounds for any objection and whether the objection applies to the entire class, a subset of the class, or just the objector.  Second, a new provision—Rule 23(e)(5)(B)—prohibits an objector from receiving consideration for withdrawing an objection or for abandoning an appeal from a judgment approving the proposal, unless approved by the court after a hearing.  These changes are designed to curb meritless objections that are asserted by objectors in order to obtain payoffs in return for withdrawing the objections—a disturbing trend that has increased in recent years. Standards for Approving Notice of Proposed Class Settlement:  In an effort to avoid scenarios in which the parties provide notice after preliminary approval of a class settlement, only to have the court deny final approval or order additional notice, the amendment to Rule 23(e)(1) now requires parties to provide the court “with information sufficient to enable [the court] to determine whether to give notice of the proposal to the class.”  Based on the information provided by the parties, Rule 23(e)(1) also now mandates that a court determine, before sending notice to the class, that the proposed class will likely be certified and the proposed settlement is likely to earn final approval.  Before this change, many courts at the preliminary approval stage had merely been asking whether a settlement was within the “range of reasonableness,” so it was not entirely unusual for courts to grant preliminary approval, direct costly notice to be issued to the class, but then deny final approval based on concerns that could have been spotted at the outset.  This amendment thus aims to prevent situations in which a court is asked to order notice based on insufficient information, and thereafter must order a second notice, which is both wasteful and confusing to class members. Clarification of Interlocutory Appeals Permitted under Rule 23(f):  The amendment to Rule 23(f) clarifies that an order to give notice of proposed settlement under Rule 23(e)(1) cannot be appealed under Rule 23(f).  As such, Rule 23(f) permits parties to seek permission to pursue an interlocutory appeal only of an order granting or denying class certification.  Rule 23(f) also extends the 14 day time limit to 45 days for cases where the U.S. government is a party. II.   First Circuit Reverses Class Certification Order Because at Least 10% of Class Members Suffered No Injury  As we have discussed in a past update, the federal courts of appeals have long been divided over whether it is permissible to certify a class that includes uninjured class members who lack standing under Article III.  Although the Supreme Court has never squarely addressed the issue, the Court noted in Tyson Foods, Inc. v. Bouaphakeo, 136 S. Ct. 1036 (2016), that “the question whether uninjured class members may recover is one of great importance.”  Id. at 1050.  And Chief Justice Roberts in his Tyson Foods concurring opinion expressed his view that “Article III does not give federal courts the power to order relief to any uninjured plaintiff, class action or not.”  Id. at 1053 (Roberts, C.J., concurring). This past quarter, the First Circuit addressed this issue in In re Asacol Antitrust Litigation, 907 F.3d 42 (1st Cir. 2018).  The court reversed an order certifying a class of indirect purchasers of the anti-inflammatory drug Asacol because “there are apparently thousands [of class members] who in fact suffered no injury” and the “need to identify those individuals will predominate and render a[ class] adjudication unmanageable.”  Id. at 53–54. The plaintiffs sought to represent a class of buyers who purportedly bought Allergan medicines at artificially high prices because Allergan’s predecessor allegedly pulled Asacol off the shelves just before its patent expired and replaced it with a newer version of the drug, which had a later patent expiration date.  Id. at 45–47.  According to the plaintiffs, this conduct injured them because it “allegedly precluded generic manufacturers from introducing a generic version of Asacol, which would have provided a lower-cost alternative.”  Id. at 44. It was undisputed that at least 10% of the putative class members—”thousands” of individuals—had not suffered any injury attributable to the allegedly anticompetitive conduct because they were brand loyalists who would not have switched to a generic drug had one been available.  Id. at 53–54.  Nonetheless, the district court certified a class that included those uninjured persons, reasoning that the uninjured class members could be removed in a subsequent proceeding conducted by a claims administrator.  Id. at 47. The First Circuit reversed, holding that the plaintiffs could not satisfy the predominance requirement of Rule 23(b)(3) because individualized issues relating to the uninjured class members would predominate.  As the First Circuit noted, “determining whether any given individual was injured (and therefore has a claim) turns on an assessment of the individual facts concerning that person,” and “the defendant must be offered the opportunity to challenge each class member’s proof that the defendant is liable to that class member.”  Id. at 55. The court rejected the plaintiffs’ argument that class members could submit affidavits to a claims administrator who could distinguish injured class members from uninjured members, explaining that such a process could only work if the declarations would be “unrebutted.”  Id. at 52–53.  But where the “defendants have expressly stated their intention to challenge any affidavits that might be gathered,” the affidavits would not be sufficient, as a “claims administrator’s review of contested forms completed by consumers concerning an element of their claims would fail to be protective of defendants’ Seventh Amendment and due process rights.”  Id. (internal quotation marks omitted).  The First Circuit emphasized that “[t]he fact that plaintiffs seek class certification provides no occasion for jettisoning the rules of evidence and procedure, the Seventh Amendment, or the dictate of the Rules Enabling Act.”  Id. at 53. In reaching its decision, the First Circuit distinguished the Supreme Court’s decision in Tyson Foods, where the underlying substantive law—the Fair Labor Standards Act—supported the admissibility of representative evidence, noting that the plaintiffs in Asacol had “point[ed] to no such substantive law that would make an opinion that ninety percent of class members were injured both admissible and sufficient to prove that any given individual class member was injured.”  Id. at 54. The First Circuit also disagreed with the plaintiffs’ assertion that the district court could proportionately reduce the aggregate damages award by the percentage of uninjured class members, concluding that this approach incorrectly assumed that the amount of damages did not depend on the number of class members harmed.  Id. at 55.  Rather, “proving that the defendant is not liable to a particular individual because that individual suffered no injury reduces the amount of the possible total damages.”  Id.  Moreover, if the plaintiffs’ approach were permissible, “there would be no logical reason to prevent a named plaintiff from bringing suit on behalf of a large class of people, forty-nine percent or even ninety-nine percent of whom were not injured, so long as aggregate damages on behalf of ‘the class’ were reduced proportionately.”  Id. at 56.  The First Circuit concluded that “[s]uch a result would fly in the face of the core principle that class actions are the aggregation of individual claims, and do not create a class entity or re-apportion substantive claims.”  Id. Asacol represents a significant victory for class action defendants, who often are faced with putative classes filled with uninjured persons who could never assert a viable claim on an individual basis.  The plaintiffs have filed a petition for rehearing en banc, which remains pending. III.   The Second Circuit Rejects Attempt to Moot Putative Class Actions As we have discussed previously, including in our 2016 year-end update, the Supreme Court decided in Campbell-Ewald Co. v. Gomez that an unaccepted settlement offer—even an offer of complete relief—does not necessarily moot a plaintiff’s claim.  136 S. Ct. 663, 670–71 (2016).  However, the Court did not decide “whether the result would be different if a defendant deposits the full amount of the plaintiff’s individual claim in an account payable to the plaintiff, and the court then enters judgment for the plaintiff in that amount.”  Id. at 672.  Nonetheless, the trend has been to reject a distinction between an unaccepted offer of judgment and an unaccepted offer combined with the delivery of money to the plaintiff, as we reported in May 2017. That trend continued in the Second Circuit this past quarter.  In Geismann v. ZocDoc, Inc., 909 F.3d 534 (2d Cir. 2018), the court held that tendering payment to the named plaintiff does not moot putative class claims.  The plaintiff filed a putative class action alleging violations of the Telephone Consumer Protection Act.  Id. at 536–37.  The defendant made two attempts to moot the plaintiff’s individual claims.  It first made a settlement offer under Rule 68, which the plaintiff rejected.  Id. at 537.  The district court then entered judgment in the amount of the offer, and dismissed the action as moot.  The plaintiff appealed, and the Second Circuit applied Campbell-Ewald to reverse, holding that the offer did not moot the claims.  Id.  On remand, the defendant tried again, this time tendering payment to the court under Rule 67.  Id.  The district court again entered judgment for the defendant, and the plaintiff again appealed.  Id. The Second Circuit followed the reasoning set forth by the Seventh Circuit in Fulton Dental, LLC v. Bisco, Inc., 860 F.3d 541 (7th Cir. 2017), and held that, under Campbell-Ewald, an unaccepted tender of payment under Rule 67 is the same as an unaccepted offer of payment—neither is binding under contract law until accepted, and neither moots a plaintiff’s claims.  Geismann, 909 F.3d at 541.  The court explained that the Rule 67 procedure provides for safekeeping of disputed funds pending resolution of litigation, but it cannot alter the parties’ contractual relationship and legal duties.  Id. at 541–42.  “[A] conclusion otherwise,” the court reasoned, “would risk placing the defendant in control of a putative class action, effectively allowing the use of tactical procedural maneuvers to thwart class litigation at will.”  Id. at 543. While courts continue to be skeptical of attempts to moot putative class actions through efforts to make a named plaintiff whole, it is important to note that the Supreme Court in Campbell-Ewald left open the possibility that actual delivery of money to the named plaintiff—as opposed to a mere settlement offer—might result in mootness.  Given that unanswered question, it is possible the Court may eventually weigh in on these issues again. IV.   The Ninth Circuit Provides Guidance on Identifying a “Coupon” Settlement The Class Action Fairness Act (“CAFA”) imposes certain limitations and requirements in the event a class action settlement includes coupons.  Specifically, under CAFA, district courts must consider “the value to class members of the coupons that are redeemed,” and not the aggregate value of all coupons that are simply offered, when assessing the amount of relief awarded to the class for purposes of awarding attorney’s fees for class counsel.  28 U.S.C. § 1712(a) (emphasis added).  However, CAFA does not define what is a “coupon,” leaving that term for the courts to interpret. The Ninth Circuit took up that issue in In re Easysaver Rewards Litigation, 906 F.3d 747 (9th Cir. 2018).  The plaintiffs in that case alleged that after they had purchased defendants’ products online, the defendants had, without plaintiffs’ knowledge or consent, enrolled the plaintiffs in a “rewards” program that charged them ongoing fees for no actual benefits.  The parties ultimately reached a proposed settlement that included a $20 credit that class members could use to purchase additional products from the defendants online.  The district court approved the settlement and awarded attorney’s fees to class counsel based on the total value of the credits offered (not just those redeemed), reasoning that the credits did not count as “coupons” because “of how closely the relief matched class members’ alleged injury.”  Id. at 756. The Ninth Circuit reversed.  The court reiterated its three-factor inquiry for determining what constitutes a coupon under CAFA: “(1) whether class members have ‘to hand over more of their own money before they can take advantage of’ a credit, (2) whether the credit is valid only ‘for select products or services,’ and (3) how much flexibility the credit provides, including whether it expires or is freely transferrable.”  Id. at 755 (quoting In re Online DVD, 779 F.3d 934, 951 (9th Cir. 2015)). Applying these factors to the credits in Easysaver, the Ninth Circuit concluded that the credits were coupons.  First, class members could use the credits to purchase only a very limited universe of online products—such as flowers, chocolates, and similar gifts—without spending any of their own money.  Id. at 757.  In fact, when asked at the fairness hearing whether a class member could purchase anything from the defendants’ websites for the amount of the credits once shipping charges were included, counsel replied:  “If you include shipping, I’m not sure.”  Id.  Second, the Ninth Circuit was troubled by the fact that in order to take advantage of the credit, class members “must hand over their billing information again to the very company that they believe mishandled that information in the first place,” resulting in the same activity that they believe led to their injury.  Id.  Third, the credits also had a series of blackout periods—including Mother’s Day, Valentine’s Day, and other holidays on which consumers most often buy flowers and chocolates.  Id. The district court erred, according to the Ninth Circuit, by improperly relying on a fourth factor—i.e., “how closely the relief matched class members’ alleged injury.”  Id. at 756.  The court explained that while this equivalence “bore on the fairness of the settlement,” it did not impact “whether the vouchers were coupons under CAFA.”  Id.  This holding brings the Ninth Circuit in line with the Seventh Circuit, which has rejected a similar analysis.  See In re Sw. Airlines Voucher Litig., 799 F.3d 701, 706 (7th Cir. 2015). The proposed credits in Easysaver bore several key indicia of a coupon settlement, and the Ninth Circuit plainly was suspicious of the actual value, if any, to class members, particularly given the underlying nature of the defendants’ alleged wrongdoing.  This opinion reinforces the incentives for plaintiffs’ counsel to avoid artificial inflation of a settlement “without a concomitant increase in the actual value of relief for the class.”  Easysaver, 906 F.3d at 755. The following Gibson Dunn lawyers prepared this client update: Christopher Chorba, Theane Evangelis, Kahn A. Scolnick, Bradley J. Hamburger, Jeremy Smith, Wesley Sze, Jennafer Tryck, Gatsby Miller and Andrenna Berggren. Gibson Dunn attorneys are available to assist in addressing any questions you may have regarding these developments.  Please contact the Gibson Dunn lawyer with whom you usually work in the firm’s Class Actions or Appellate and Constitutional Law practice groups, or any of the following lawyers: Theodore J. Boutrous, Jr. – Co-Chair, Litigation Practice Group – Los Angeles (+1 213-229-7000, tboutrous@gibsondunn.com) Christopher Chorba – Co-Chair, Class Actions Practice Group – Los Angeles (+1 213-229-7396, cchorba@gibsondunn.com) Theane Evangelis – Co-Chair, Class Actions Practice Group – Los Angeles (+1 213-229-7726, tevangelis@gibsondunn.com) Kahn A. Scolnick – Los Angeles (+1 213-229-7656, kscolnick@gibsondunn.com) Bradley J. Hamburger – Los Angeles (+1 213-229-7658, bhamburger@gibsondunn.com) © 2019 Gibson, Dunn & Crutcher LLP, 333 South Grand Avenue, Los Angeles, CA 90071 Attorney Advertising:  The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice.

Gibson, Dunn & Crutcher LLP is pleased to announce its selection by Law360 as a Law Firm of the Year for 2018, featuring the four firms that received the most Practice Group of the Year awards in its profile, “The Firms That Dominated in 2018.” [PDF] Of the four, Gibson Dunn “led the pack with 11 winning practice areas” for “successfully securing wins in bet-the-company matters and closing high-profile, big-ticket deals for clients throughout 2018.” The awards were published on January 13, 2019. Law360 previously noted that Gibson Dunn “dominated the competition this year” for its Practice Groups of the Year, which were selected “with an eye toward landmark matters and general excellence.” Gibson Dunn is proud to have been honored in the following categories: Appellate [PDF]: Gibson Dunn’s Appellate and Constitutional Law Practice Group is one of the leading U.S. appellate practices, with broad experience in complex litigation at all levels of the state and federal court systems and an exceptionally strong and high-profile presence and record of success before the U.S. Supreme Court. Class Action [PDF]: Our Class Actions Practice Group has an unrivaled record of success in the defense of high-stakes class action lawsuits across the United States. We have successfully litigated many of the most significant class actions in recent years, amassing an impressive win record in trial and appellate courts, including before the U. S. Supreme Court, that have changed the class action landscape nationwide. Competition [PDF]: Gibson Dunn’s Antitrust and Competition Practice Group serves clients in a broad array of industries globally in every significant area of antitrust and competition law, including private antitrust litigation between large companies and class action treble damages litigation; government review of mergers and acquisitions; and cartel investigations, internationally across borders and jurisdictions. Cybersecurity & Privacy [PDF]: Our Privacy, Cybersecurity and Consumer Protection Practice Group represents clients across a wide range of industries in matters involving complex and rapidly evolving laws, regulations, and industry best practices relating to privacy, cybersecurity, and consumer protection. Our team includes the largest number of former federal cyber-crimes prosecutors of any law firm. Employment [PDF]: No firm has a more prominent position at the leading edge of labor and employment law than Gibson Dunn. With a Labor and Employment Practice Group that covers a complete range of matters, we are known for our unsurpassed ability to help the world’s preeminent companies tackle their most challenging labor and employment matters. Energy [PDF]: Across the firm’s Energy and Infrastructure, Oil and Gas, and Energy, Regulation and Litigation Practice Groups, our global energy practitioners counsel on a complex range of issues and proceedings in the transactional, regulatory, enforcement, investigatory and litigation arenas, serving clients in all energy industry segments. Environmental [PDF]: Gibson Dunn has represented clients in the environmental and mass tort area for more than 30 years, providing sophisticated counsel on the complete range of litigation matters as well as in connection with transactional concerns such as ongoing regulatory compliance, legislative activities and environmental due diligence. Real Estate [PDF]: The breadth of sophisticated matters handled by our real estate lawyers worldwide includes acquisitions and sales; joint ventures; financing; land use and development; and construction. Gibson Dunn additionally has one of the leading hotel and hospitality practices globally. Securities [PDF]: Our securities practice offers comprehensive client services including in the defense and handling of securities class action litigation, derivative litigation, M&A litigation, internal investigations, and investigations and enforcement actions by the SEC, DOJ and state attorneys general. Sports [PDF]: Gibson Dunn’s global Sports Law Practice represents a wide range of clients in matters relating to professional and amateur sports, including individual teams, sports facilities, athletic associations, athletes, financial institutions, television networks, sponsors and municipalities. Transportation [PDF]: Gibson Dunn’s experience with transportation-related entities is extensive and includes the automotive sector as well as all aspects of the airline and rail industries, freight, shipping, and maritime. We advise in a broad range of areas that include regulatory and compliance, customs and trade regulation, antitrust, litigation, corporate transactions, tax, real estate, environmental and insurance.

Law360 named eight Gibson Dunn partners among its 2018 MVPs and noted that the firm had the most MVPs of any law firms this year.  Law360 MVPs feature lawyers who have “distinguished themselves from their peers by securing hard-earned successes in high-stakes litigation, complex global matters and record-breaking deals.” Gibson Dunn’s MVPs are: Christopher Chorba, a Class Action MVP [PDF] – Co-Chair of the firm’s Class Actions Group and a partner in our Los Angeles office, he defends class actions and handles a broad range of complex commercial litigation with an emphasis on claims involving California’s Unfair Competition and False Advertising Laws, the Consumers Legal Remedies Act, the Lanham Act, and the Class Action Fairness Act of 2005. His litigation and counseling experience includes work for companies in the automotive, consumer products, entertainment, financial services, food and beverage, social media, technology, telecommunications, insurance, health care, retail, and utility industries. Michael P. Darden, an Energy MVP [PDF] – Partner in charge of the Houston office, Mike focuses his practice on international and U.S. oil & gas ventures and infrastructure projects (including LNG, deep-water and unconventional resource development projects), asset acquisitions and divestitures, and energy-based financings (including project financings, reserve-based loans and production payments). Thomas H. Dupree Jr., an MVP in Transportation [PDF] –  Co-partner in charge of the Washington, DC office, Tom has represented clients in a wide variety of trial and appellate matters, including cases involving punitive damages, class actions, product liability, arbitration, intellectual property, employment, and constitutional challenges to federal and state statutes.  He has argued more than 80 appeals in the federal courts, including in all 13 circuits as well as the United States Supreme Court. Joanne Franzel, a Real Estate MVP [PDF] – Joanne is a partner in the New York office, and her practice has included all forms of real estate transactions, including acquisitions and dispositions and financing, as well as office and retail leasing with anchor, as well as shopping center tenants. She also has represented a number of clients in New York City real estate development, representing developers as well as users in various mixed-use projects, often with a significant public/private component. Matthew McGill, an MVP in the Sports category [PDF] – A partner in the Washington, D.C. office, Matt practices appellate and constitutional law. He has participated in 21 cases before the Supreme Court of the United States, prevailing in 16. Spanning a wide range of substantive areas, those representations have included several high-profile triumphs over foreign and domestic sovereigns. Outside the Supreme Court, his practice focuses on cases involving novel and complex questions of federal law, often in high-profile litigation against governmental entities. Mark A. Perry, an MVP in the Securities category [PDF] – Mark is a partner in the Washington, D.C. office and is Co-chair of the firm’s Appellate and Constitutional Law Group.  His practice focuses on complex commercial litigation at both the trial and appellate levels. He is an accomplished appellate lawyer who has briefed and argued many cases in the Supreme Court of the United States. He has served as chief appellate counsel to Fortune 100 companies in significant securities, intellectual property, and employment cases.  He also appears frequently in federal district courts, serving both as lead counsel and as legal strategist in complex commercial cases. Eugene Scalia, an Appellate MVP [PDF] – A partner in the Washington, D.C. office and Co-Chair of the Administrative Law and Regulatory Practice Group, Gene has a national practice handling a broad range of labor, employment, appellate, and regulatory matters. His success bringing legal challenges to federal agency actions has been widely reported in the legal and business press. Michael Li-Ming Wong, an MVP in Cybersecurity and Privacy – Michael is a partner in the San Francisco and Palo Alto offices. He focuses on white-collar criminal matters, complex civil litigation, data-privacy investigations and litigation, and internal investigations. Michael has tried more than 20 civil and criminal jury trials in federal and state courts, including five multi-week jury trials over the past five years.

Click for PDF This update provides an overview and summary of significant class action developments during the third quarter of 2018 (July through September), as well as a brief look ahead to some of the key class action issues anticipated for the end of 2018 and into 2019. Part I covers the class action cases on the U.S. Supreme Court’s docket this Term. Part II reviews several decisions from the federal courts of appeals relating to the interplay between class actions and arbitration agreements, including Gibson Dunn’s recent win before the Ninth Circuit in O’Connor v. Uber Technologies. Part III highlights two decisions that have created circuit splits on important issues of class action procedure. Part IV wraps up with a discussion of a new Ninth Circuit decision on the amount-in-controversy requirement in the Class Action Fairness Act (CAFA). I.   The U.S. Supreme Court Is Hearing Argument on Arbitration Issues and Will Consider Several Other Class Action Cases As previewed in our first and second quarter 2018 updates, an eight-member U.S. Supreme Court heard argument on October 3, 2018 in New Prime Inc. v. Oliveira (No. 17‑340).  (Gibson Dunn represents the petitioner, New Prime Inc.) The Court—now with all nine members—will also hear argument in three other cases involving arbitration or class action issues in late October, as previewed in our first and second quarter 2018 updates and 2018 Supreme Court Roundup.  On October 29, the Court will hear argument in Lamps Plus, Inc. v. Varela (No. 17‑988), to decide whether the Federal Arbitration Act forecloses a state-law interpretation of an arbitration agreement that authorizes class arbitration based on general language commonly used in such agreements.  The same day, argument will be held in Henry Schein, Inc. v. Archer & White Sales, Inc. (No. 17-1272), which concerns whether a court can decline to enforce an agreement delegating questions of arbitrability to an arbitrator if the court concludes that the claim of arbitrability is “wholly groundless.”  And on October 31, in Frank v. Gaos (No. 17-961), the Court will consider the validity of cy pres-only settlements that provide no direct compensation to class members. The Court also added another class action case to its docket in September, Home Depot U.S.A., Inc. v. Jackson (No. 17-1471), which presents two questions regarding the permissibility of removal to federal court under CAFA:  (a) whether CAFA’s statement that “any defendant” may remove an action permits removal by a party that was brought into the suit when an original named defendant filed a counterclaim, and (b) whether the Supreme Court’s holding in Shamrock Oil & Gas Co. v. Sheets, 313 U.S. 100 (1941)—that an original plaintiff may not remove a counterclaim against it—extends to third-party counterclaim defendants.  In Home Depot, Citibank filed a state-court collection action against Jackson, and Jackson filed a counterclaim against Citibank, Home Depot, and another company, alleging class-action consumer-protection claims.  The Fourth Circuit held that Home Depot could not remove the case to federal court under CAFA because Home Depot was a counterclaim defendant, not an original defendant.  The three other circuits to have addressed this issue have also held that CAFA does not permit removal in these circumstances.  Home Depot argues that this interpretation creates an “unfortunate loophole” in CAFA’s grant of federal jurisdiction over certain class actions, allowing plaintiffs’ attorneys to keep consumer class actions out of federal court simply by bringing them as counterclaims in minor debt-collection and other state court suits.  Home Depot presents the Court with the opportunity to determine whether its precedent and CAFA’s text requires this result. II.   Several Federal Courts of Appeals Issue Significant Rulings Regarding the Interplay Between Class Actions and Arbitration Arbitration—and class arbitration in particular—continues to be actively litigated in the circuit courts. In an important decision that will have significant implications for attempts to pursue class actions notwithstanding individual arbitration agreements, the Ninth Circuit in O’Connor v. Uber Technologies, Inc., 904 F.3d 1087, 2018 WL 4568553 (9th Cir. 2018), reversed an order certifying a class of hundreds of thousands of current and former drivers alleging they were misclassified as independent contractors.  Relying on its earlier decision in Mohamed v. Uber Technologies, Inc., 848 F.3d 1201 (9th Cir. 2016), which upheld the enforceability of Uber’s arbitration agreements with drivers, the Ninth Circuit reversed the district court’s class certification orders, orders denying Uber’s motions to compel arbitration, and orders regulating Uber’s communications with drivers under Rule 23(d).  (Gibson Dunn represented Uber in O’Connor and Mohamed.) In O’Connor, the plaintiffs argued that the arbitration agreements were unenforceable because the named plaintiffs had supposedly “opted out of arbitration on behalf of the entire class,” and the agreements contained class-action waivers that violated the National Labor Relations Act.  2018 WL 4568553, at *4.  The Ninth Circuit rejected both arguments, holding that the plaintiffs’ opt-out argument—which was premised on the Georgia Supreme Court’s decision in Bickerstaff v. Suntrust Bank, 788 S.E.2d 787 (Ga. 2016)—was not supported by federal law and, in fact, “would be preempted by the FAA.”  O’Connor, 2018 WL 4568553, at *4–5.  The court also held that the plaintiffs’ NLRA argument was “extinguished” by Epic Systems Corp. v. Lewis, 138 S. Ct. 1612 (2018).  O’Connor, 2018 WL 4568553, at *5. Because the district court’s class-certification orders were premised on its erroneous finding that the arbitration agreements were unenforceable, the Ninth Circuit reversed the district court’s decisions on those issues as well, emphasizing that a class cannot be certified where drivers “entered into agreements to arbitrate their claims and . . . waive[d] their right to participate in a class action with regard to those claims.”  O’Connor, 2018 WL 4568553, at *5.  The Ninth Circuit’s decision in O’Connor makes clear that a class cannot be certified where putative class members are subject to binding arbitration agreements that include class waivers. In several other decisions this past quarter, the Tenth and Eleventh Circuits sided with the Second and Fifth Circuits in a widening split with the Third, Fourth, Sixth, and Eighth Circuits over whether the availability of class arbitration is a “question of arbitrability” that presumptively must be decided by courts in the first instance, absent clear evidence of contrary intent in the parties’ arbitration agreement. In Spirit Airlines, Inc. v. Maizes, 899 F.3d 1230 (11th Cir. 2018), the Eleventh Circuit affirmed a district court’s ruling that the availability of class arbitration was presumptively one for the court to decide, but that the parties’ arbitration agreement evidenced a clear intent to overcome that default presumption.  Id. at 1233–34.  In particular, the parties’ agreement adopted American Arbitration Association (AAA) arbitration rules, including Rule 3 of the AAA’s Supplementary Rules for Class Arbitrations, which explicitly provides that an arbitrator shall decide whether an arbitration clause permits class arbitration.  Id.  Siding with the Fifth Circuit, the Eleventh Circuit rejected the “higher burden for showing ‘clear and unmistakable’ evidence for questions of class arbitrability [relative to] . . . ordinary questions of arbitrability” adopted by the Third, Fourth, Sixth, and Eighth Circuits following Stolt-Nielsen S.A. v. AnimalFeeds Int’l Corp., 559 U.S. 662 (2010).  See Catamaran Corp. v. Towncrest Pharmacy, 864 F.3d 966, 972-73 (8th Cir. 2017) (“The risks incurred by defendants in class arbitration . . . and the difficulties presented by class arbitration . . . all demand a more particular delegation of the issue than we may otherwise deem sufficient in bilateral disputes.”); accord Chesapeake Appalachia, LLC v. Scout Petroleum, LLC, 809 F.3d 746, 762–63 (3d Cir. 2016); Dell Webb Cmtys., Inc. v. Carlson, 817 F.3d 867, 876–77 (4th Cir. 2015); Reed Elsevier, Inc. ex rel. LexisNexis Div. v. Crockett, 734 F.3d 594, 599–600 (6th Cir. 2013).  But see Wells Fargo Advisors, L.L.C. v. Sappington, 884 F.3d 392, 395 (2d Cir. 2018); Robinson v. J & K Admin. Mgmt. Servs., Inc., 817 F.3d 193, 196 (5th Cir. 2016). The Eleventh Circuit reached the same conclusion one month later in JPay, Inc. v. Kobel, 904 F.3d 923 (11th Cir. 2018), affirming a district court’s summary judgment ruling that the availability of class arbitration was presumptively one for the court to decide, but that, like Spirit Airlines, the parties’ arbitration agreement evidenced a clear intent to overcome that default presumption by adopting the AAA’s arbitration rules.  Id. at 937–40.  The court acknowledged that a plurality of the U.S. Supreme Court in Green Tree Financial Corp. v. Bazzle, 539 U.S. 444 (2003), held that whether an agreement provides for class arbitration is not a question of arbitrability, but observed that the Supreme Court has since repeatedly emphasized—in Stolt-Nielsen and Oxford Health Plans LLC v. Sutter, 569 U.S. 564 (2013)—that Bazzle was a plurality opinion and that the question remains open.  JPay, 904 F.3d at 931. Similarly, in Dish Network, L.L.C. v. Ray, 900 F.3d 1240 (10th Cir. 2018), the Tenth Circuit held that the issue of classwide arbitrability presumptively is for a court to decide, but rejected the argument that the arbitrator exceeded his authority in considering that issue and ordering class arbitration because the parties’ agreement demonstrated a clear intent to delegate the issue to the arbitrator.  As in Spirit Airlines and JPay, the parties agreed that “any claim, controversy and/or dispute between them” would be resolved through arbitration under AAA rules, which give the arbitrator authority to decide his own jurisdiction.  Id. at 1245–46. These cases serve as an important reminder to pay close attention to the terms incorporated by reference into an arbitration agreement in order to avoid inadvertently delegating key issues like classwide arbitrability to an arbitrator, whose decision may be unreviewable by a court or reviewable only under a highly deferential standard.  Also, as noted above and in our second quarter 2018 update, the Supreme Court in Lamps Plus, Inc. v. Varela (No. 17‑988), will decide whether the FAA forecloses a state-law interpretation of an arbitration agreement that would authorize class arbitration based solely on general language commonly used in such agreements.  While not explicitly teed up for resolution in Lamps Plus, the Court could weigh in on the widening split over whether the availability of classwide arbitration presumptively should be decided by a court or an arbitrator. III.   Circuit Splits Regarding Appealability of Class Action Orders After Settlement and on the Propriety of “Issue” Certification Class action procedure was another active topic this past quarter, with a Tenth Circuit decision breaking with the Ninth Circuit on the question whether class certification rulings may be appealed following settlement and voluntary dismissal of individual claims, and a Sixth Circuit decision that deepens an existing circuit split as to whether predominance is a prerequisite to “issue” certification under Rule 23(c)(4).  Ultimately, one or both of these questions may end up before the Supreme Court. In Anderson Living Trust v. WPX Energy Production, LLC, 904 F.3d 1135 (10th Cir. 2018), the Tenth Circuit held—contrary to the Ninth Circuit’s decision in Brown v. Cinemark USA, Inc., 876 F.3d 1199 (9th Cir. 2017)—that voluntary dismissal of individual claims following settlement does not convert a previous denial of class certification into a final appealable order.  In Anderson, the parties settled the plaintiffs’ individual claims two years after the district court had denied class certification.  The district court then entered a stipulated judgment dismissing the individual claims with prejudice, but reserving the plaintiffs’ right, if any, to appeal the class-certification denial.  But the Tenth Circuit dismissed the appeal, relying on the U.S. Supreme Court’s decision in Microsoft v. Baker, 137 S. Ct. 1702 (2017), which held that the federal courts of appeals lack jurisdiction “to review an order denying class certification . . . after the named plaintiffs have voluntarily dismissed their claims with prejudice.”  Id. at 1712.  The Ninth Circuit in Brown had come to the opposite conclusion, and distinguished Baker on the ground that there was a difference between dismissing claims following a settlement for consideration and dismissing claims voluntarily as a mechanism to trigger appellate review.  The Tenth Circuit, by contrast, held that distinction was illusory, and that the policy concerns articulated in Baker—the danger of protracted litigation and piecemeal appeals, preventing parties from usurping Rule 23(f), and wanting to avoid giving plaintiffs an asymmetrical advantage in seeking interlocutory review of class certification decisions—applied in both scenarios. The Sixth Circuit in Martin v. Behr Dayton Thermal Products, 896 F.3d 405 (6th Cir. 2018), added to the division among the federal courts of appeals as to whether plaintiffs must satisfy Rule 23(b)(3)’s predominance requirement for a claim as a whole when seeking “issue” certification under Rule 23(c)(4).  In Martin, a group of Ohio residents alleged that four companies had contaminated the local drinking water.  Plaintiffs sought class certification under Rule 23(b)(3), which requires that “questions of law or fact common to class members predominate over any questions affecting only individual members, and that a class action is superior to other available methods for fairly and efficiently adjudicating the controversy,” as well as Rule 23(c)(4), which provides that “[w]hen appropriate, an action may be brought or maintained as a class action with respect to particular issues.”  The district court denied certification under Rule 23(b)(3), holding that the plaintiffs could not meet that rule’s predominance requirement as to “injury-in-fact and causation,” but granted certification under Rule 23(c)(4) on seven discrete issues, including the extent of “[e]ach [d]efendant’s role in creating the contamination” at issue and “[w]hether [the d]efendants negligently failed to investigate and remediate the contamination at and flowing from their respective [f]acilities.”  Martin, 896 F.3d at 409–10. The Sixth Circuit affirmed the class certification order.  It noted the existing circuit split between the “broad” view of Rule 23(c)(4) taken by the Second, Fourth, Seventh, and Ninth Circuits, and the “narrow” view held by the Fifth and Eleventh Circuits.  According to the Sixth Circuit, under the “broad” view of Rule 23(c)(4), a district court may certify a class on specific common issues “even where predominance has not been satisfied for the cause of action as a whole,” so long as predominance and superiority are satisfied for the issues identified for class treatment.  Martin, 896 F.3d at 411–12.  The “narrow” view of Rule 23(c)(4), by contrast, “prohibits certification if predominance has not been satisfied as to the cause of action as a whole.”  Id.  The Sixth Circuit adopted the broad view, reasoning that it “respects each provision’s contribution to class determinations by maintaining Rule 23(b)(3)’s rigor without rendering Rule 23(c)(4) superfluous.”  Id. at 413.  The court also explained that the superiority requirement of Rule 23 “functions as a backstop against inefficient use of Rule 23(c)(4).”  Id. IV.   Ninth Circuit Clarifies CAFA’s Amount-In-Controversy Requirement Finally, the Ninth Circuit’s opinion in Fritsch v. Swift Transportation Co. of Arizona, LLC, 899 F.3d 785 (9th Cir. 2018), slightly relaxed the amount-in-controversy requirement for defendants seeking to remove an action to federal court under CAFA.  This holding will likely be of particular import in cases brought under Title VII and other statutes that include a fee-shifting provision for prevailing plaintiffs. Fritsch was a putative wage-and-hour class action asserting various violations of the California Labor Code.  899 F.3d at 789.  The defendant removed the case to federal court, relying on a combination of claimed damages and attorneys’ fees to meet the $5 million removal threshold under CAFA.  Id.  The district court concluded that the defendant could not include any fees beyond those that had “been incurred prior to removal,” which caused the total amount in controversy to fall below the removal threshold.  Id.  The Ninth Circuit reversed, explaining that under existing circuit precedent, while the threshold is measured “at the time of removal,” it includes “all relief claimed at the time of removal to which the plaintiff would be entitled if she prevails.”  Id. at 793 (quotation omitted).  For attorneys’ fees, this meant that district courts “must include future attorneys’ fees recoverable by statute or contract when assessing whether the amount-in-controversy requirement is met,” rather than just fees actually incurred at the time of removal.  Id. at 794.  In so ruling, the Ninth Circuit parted ways with the Seventh Circuit’s decision in Gardynski-Leschuck v. Ford Motor Co., 142 F.3d 955, 958 (7th Cir. 1998), which had held that future attorneys’ fees are too speculative to count toward the amount-in-controversy requirement for federal jurisdiction under the Magnuson-Moss Warranty Act.  Fritsch, 899 F.3d at 795.  To address the concern that future fees may be too speculative, the Ninth Circuit held that a district court must count only those future fees that the removing defendant can substantiate under a preponderance-of-the-evidence standard.  Id. at 795–96. The following Gibson Dunn lawyers prepared this client update: Christopher Chorba, Theane Evangelis, Kahn A. Scolnick, Bradley J. Hamburger, Brandon J. Stoker, Lauren M. Blas, David Schnitzer, Jessica Culpepper, Gatsby Miller, and Timothy Kolesk. Gibson Dunn attorneys are available to assist in addressing any questions you may have regarding these developments.  Please contact the Gibson Dunn lawyer with whom you usually work in the firm’s Class Actions or Appellate and Constitutional Law practice groups, or any of the following lawyers: Theodore J. Boutrous, Jr. – Co-Chair, Litigation Practice Group – Los Angeles (+1 213-229-7000, tboutrous@gibsondunn.com) Christopher Chorba – Co-Chair, Class Actions Practice Group – Los Angeles (+1 213-229-7396, cchorba@gibsondunn.com) Theane Evangelis – Co-Chair, Class Actions Practice Group – Los Angeles (+1 213-229-7726, tevangelis@gibsondunn.com) Kahn A. Scolnick – Los Angeles (+1 213-229-7656, kscolnick@gibsondunn.com) Bradley J. Hamburger – Los Angeles (+1 213-229-7658, bhamburger@gibsondunn.com) © 2018 Gibson, Dunn & Crutcher LLP Attorney Advertising:  The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice.

Click for PDF This update provides an overview and summary of significant class action developments during the second quarter of 2018 (April through June), as well as a brief look ahead to some of the key class action issues anticipated later this year. Part I discusses the U.S. Supreme Court’s decisions in two key cases, Epic Systems Corp. v. Lewis, and China Agritech, Inc. v. Resh. Part II looks forward to the Supreme Court’s October 2018 Term and previews a new class action case on the Court’s docket, Nutraceutical Corp. v. Lambert. Part III discusses two recent circuit-level cases involving class action settlements. I.     The U.S. Supreme Court Affirms Validity of Arbitration Clauses in Employment Agreements, and Limits American Pipe Tolling to Individual Suits The Supreme Court issued two important opinions in the past quarter of significant relevance to class action defendants. First, in the consolidated cases of Epic Systems Corp. v. Lewis, Ernst & Young LLP v. Morris, and National Labor Relations Board v. Murphy Oil USA, Inc., 138 S. Ct. 1612 (2018), the Supreme Court held that arbitration agreements in which an employee waives his right to bring a claim against an employer on a class or collective basis are enforceable under the Federal Arbitration Act (“FAA”) and do not violate the National Labor Relations Act (“NLRA”).  The Court’s ruling resolved a longstanding circuit split on this issue. In a 5-4 decision written by Justice Gorsuch, the Court held that “Congress has instructed in the Arbitration Act that arbitration agreements providing for individualized proceedings must be enforced, and neither the Arbitration Act’s saving clause nor the NLRA suggests otherwise.”  138 S. Ct. at 1616, 1624–27.  The Court rejected the employees’ argument that the FAA’s savings clause—which allows courts to refuse to enforce arbitration agreements “upon such grounds as exist at law or in equity for the revocation of any contract”—precludes enforcement of their arbitration agreements.  Because the employees’ argument was not applicable to “any” contract, and instead singled out “individualized arbitration proceedings” as invalid, the Court explained that the savings clause was not implicated, and there was no “generally applicable contract defense[]” to overcome the FAA’s presumption of enforceability.  Id. at 1622–23. The Court also rejected the argument that enforcing an arbitration agreement’s class action waiver would violate employees’ right to engage in collective action under the NLRA.  It disagreed with the suggestion that the later-passed NLRA had impliedly repealed portions of the FAA, emphasizing that “repeals by implication are ‘disfavored,’” and “Congress ‘does not alter the fundamental details of a regulatory scheme in vague terms or ancillary provisions.’”  Id. at 1624, 1626–27.  Section 7 of the NLRA, moreover, “focuses on the right to organize unions and bargain collectively,” “does not express approval or disapproval of arbitration,” and “does not even hint at a wish to displace the Arbitration Act—let alone accomplish that much clearly and manifestly.”  Id. at 1624. Finally, the Court declined to apply Chevron deference to the NLRB’s contrary conclusions, noting that Congress had not given the NLRB any authority to interpret the FAA, a statute that the agency does not administer.  The Court also observed that although Chevron deference is premised on the notion that “‘policy choices’ should be left to the Executive Branch,” “here the Executive seems to be of two minds, for [the Court] received competing briefs from the [NLRB] and the United States (through the Solicitor General),” the latter of which had supported the employers.  Id. at 1630. Justice Ginsburg, joined by Justices Breyer, Sotomayor, and Kagan, dissented.  They expressed concern that “underenforcement of federal and state” employment statutes will result from the majority’s decision, because employees will be deterred by the relative expense and “slim relief obtainable” in individual suits.  Id. at 1637, 1646–48 (Ginsburg, J., dissenting).  In response, the majority observed that “the dissent retreats to policy arguments,” and underscored that “[t]he respective merits of class actions and private arbitration as means of enforcing the law are questions constitutionally entrusted not to the courts to decide but to the policymakers in the political branches where those questions remain hotly contested.”  Id. at 1632. Epic Systems confirms that courts will continue to enforce agreements between employers and employees to arbitrate their disputes on an individual—rather than class or collective—basis, and continues the Supreme Court’s trend of enforcing the FAA’s strong policy favoring arbitration. In the second important class action case of the Term, China Agritech, Inc. v. Resh, 138 S. Ct. 1800, the Court declined to extend the rule of equitable tolling announced in American Pipe & Construction Co. v. Utah, 414 U.S. 538 (1974), to the filing of successive class actions. Under American Pipe, the timely filing of a class action tolls the applicable statute of limitations for “all persons encompassed by the class complaint” to intervene in the action or to file individual suits after the denial of class certification.  China Agritech, 138 S. Ct. at 1804–05.  The Ninth Circuit had extended that ruling to the successive filing of class actions, but the Supreme Court reversed, explaining that the concerns underlying American Pipe simply do not apply in the class action context.  The rule announced in American Pipe serves to promote “the efficiency and economy of litigation” embodied in Rule 23, on the theory that plaintiffs “reasonably rel[y] on the class representative . . . to protect their interests in their individual claims,” and without equitable tolling, potential class members “would be induced to file protective motions to intervene” (id. at 1806), or “a needless multiplicity of [separate] actions” to protect their interests in the event certification is denied (id. at 1810). Extending American Pipe tolling to successive class actions, however, “would allow the statute of limitations to be extended time and again” and allow plaintiffs “limitless bites at the apple.”  Id. at 1808–09.  The Court noted that in those circuits that had already declined to extend American Pipe to successive class actions, there had not been “a disproportionate number of duplicative, protective class action filings.”  Id. at 1810.  The Court also reasoned that “efficiency favors early assertion of competing class representative claims” (id. at 1807), and early filing “may aid a district court in determining, early on, whether class treatment is warranted” (id. at 1811). All of the justices joined the Court’s opinion in China Agritech except for Justice Sotomayor, who wrote an opinion concurring in the judgment but expressing the view that the Court’s holding should be limited to cases governed by the Private Securities Litigation Reform Act.  Id. at 1811–15 (Sotomayor, J., concurring in the judgment). China Agritech emphasizes the importance of timely filing putative class actions and reaffirms the class action defendant’s reasonable expectation that class claims will not continue to emerge after the statute of limitations period has expired. II.     The U.S. Supreme Court Is Poised to Weigh In on the Timing of Rule 23(f) Petitions, Arbitration Issues, and the Validity of Cy Pres-Only Settlements The Supreme Court’s October 2018 Term promises to be another active one in the class action space, particularly on a number of bread-and-butter issues relating to class action procedure, settlement, and arbitration. On June 25, 2018, the Supreme Court granted certiorari in Nutraceutical Corp. v. Lambert (No. 17‑1094) to resolve whether equitable exceptions apply to non-jurisdictional claims-processing rules, and specifically, to decide if and when an appellate court may equitably toll the time to file a petition for permission to appeal the grant or denial of class certification under Federal Rule of Civil Procedure 23(f).  Ordinarily, a Rule 23(f) petition must be filed within 14 days following the grant or denial of class certification or decertification, but the Ninth Circuit held that, under the particular circumstances of the case, the filing of a motion for reconsideration 20 days after the decertification order equitably tolled the 14-day deadline.  The Ninth Circuit acknowledged, however, that its ruling conflicted with the other circuit courts that have considered the issue.  (We covered the Ninth Circuit’s decision in Lambert in our third quarter 2017 update.) As noted in our first quarter 2018 update, the Supreme Court is also expected to resolve a series of other issues of interest to class action practitioners in the coming Term.  In New Prime Inc. v. Oliveira (No. 17‑340), the Court will decide whether (a) a dispute regarding the applicability of the FAA must be resolved by an arbitrator under a valid delegation clause, and (b) an exemption for contracts of employment for transportation workers in Section 1 of the FAA applies to independent contractors.  Briefing is currently underway.  (Gibson Dunn represents the petitioner, New Prime, Inc.)  In Lamps Plus, Inc. v. Varela (No. 17‑988), the Court will decide whether the FAA forecloses a state-law interpretation of an arbitration agreement that would authorize class arbitration based solely on general language commonly used in such agreements.  And in Frank v. Gaos (No. 17-961), the Court will consider the validity of cy pres-only settlements that provide no direct compensation to class members.  Opening briefs were filed in both cases on July 9, 2018. III.     The Seventh and Eighth Circuits Issue Notable Class Action Settlement Decisions The federal courts of appeals continue to closely scrutinize class action settlements, and this past quarter saw the issuance of two significant decisions (which both coincidentally involved Target Corp.). In Pearson v. Target Corp., No. 17‑2275,  — F.3d —, 2018 WL 3117848 (7th Cir. June 26, 2018), the Seventh Circuit examined a common tactic employed by professional objectors—filing baseless appeals from a settlement approval as a form of “blackmail,” hoping that the parties will pay them to dismiss the appeals so that the settlement can become effective. In 2014, the parties in Pearson had agreed to a classwide settlement in response to allegations that the defendants had “violated consumer protection laws by making false claims about the efficacy of [a dietary] supplement.”  Id. at *1.  Ted Frank, a frequent objector to class action settlements, objected to the awards to class counsel in the district court, and appealed the settlement approval order to the Seventh Circuit.  The Seventh Circuit agreed with Frank’s objections and reversed the district court, holding that “the settlement provided outsized benefits to class counsel.”  Id. On remand, the parties reached a new settlement, which the district court approved.  It then dismissed the case “‘without prejudice’ so as to allow the Court to supervise the implementation and administration of the Settlement.”  Id.  Three different class members then objected and filed appeals.  Id. at *2.  All three subsequently dismissed their appeals, and the district court entered a new order dismissing the case with prejudice.  Id.  Frank then moved to intervene and disgorge any side settlements made with the other three objectors.  His concern was “‘objector blackmail’” in which an “absent class member objects to a settlement with no intention of improving the settlement for the class,” “appeals, and pockets a side payment in exchange for voluntarily dismissing the appeal.”  Id. at *1.  The district court refused to hear the motion, reasoning that the dismissal with prejudice had divested the court of jurisdiction.  Frank then moved under Federal Rule of Civil Procedure 60(b) to vacate the dismissal with prejudice and restore the court’s jurisdiction over the settlement.  Id. at *2.  The district court denied that motion as well, which led to Frank’s second appeal and the subject of this decision.  Id. The Seventh Circuit again ruled in Frank’s favor.  Writing for a three-judge panel, Judge Wood explained that Frank could bring a Rule 60(b) motion because he had objected the settlement and thus qualified as a “party.”  Id.  On the merits, the court held that the district court should have granted the Rule 60(b) motion because (1) the objectors voluntarily dismissed their appeals before briefing raised concerns that they had done so at the expense of the class; (2) the class was comprised of ordinary consumers rather than sophisticated financial institutions (and thus needed greater protection from the court); (3) Frank sought only to effectuate the limited ancillary jurisdiction contemplated by the settlement itself, so the interest in finality was less compelling that it would be had Frank sought to unwind the settlement and re-litigate merits issues; and (4) Rule 60(b)(6) exists as an “‘equitable’” “safety valve” for precisely these types of situations.  Id. at *3-4. This decision continues the trend among the federal courts of appeals to carefully scrutinize class settlements, particularly when they involve “ordinary consumers.”  And, as the Seventh Circuit recognized, it also highlights the importance of “an amendment of Rule 23”—Rule 23(e)(5)(B)—which is “designed to prevent this problem from recurring.”  Id. at *5.  That proposed rule would require district court approval, after a hearing, of any “‘payment or other consideration’ provided for ‘forgoing or withdrawing an objection’ or ‘forgoing, dismissing, or abandoning an appeal.’”  Id.  If Congress allows this new rule to go into effect, observers will be keen to see whether it “solve[s] the problem” of “objector blackmail,” or whether objectors will find new, creative ways to “leverage[]” the process “for a purely personal gain.”  Id. at *1, *5. The second case, In re Target Corporation Customer Data Security Breach Litigation, 892 F.3d 968 (8th Cir. 2018), also involved the re-examination of a class action settlement, at the urging of an objector, after the Eighth Circuit had rejected an earlier settlement. With the earlier settlement, the Eighth Circuit concluded the district court had “failed to conduct the appropriate pre-certification analysis.”  Id. at 972.  On the second go-around, however, the Eighth Circuit affirmed the judgment of the district court, reasoning that the court had not “fundamentally misunderstood the structure of the settlement agreement” (id. at 973), nor was separate legal counsel required to protect the interests of the subclass of plaintiffs who had yet to suffer any material loss from the data breach that formed the basis for the suit (id. at 976).  On the latter point, the Eighth Circuit maintained that the interests of those class members with “documented losses” and those without losses were “more congruent than disparate” because it was “hypothetically possible that a member” of either subclass could “suffer some future injury.”  Id. at 975-76. The Eighth Circuit also affirmed the district court’s approval of the settlement.  Even though it noted the district court’s analysis of the $6.75 million fee award may have been “perfunctory,” it held the court’s reasoning was sufficient and that the lodestar multiplier applied was “well within amounts [the court had] deemed reasonable in the past.”  Id. at 977.  The court also held that the district court was within its discretion to approve the settlement despite the objectors’ concerns about what arguably constituted a “clear-sailing” provision requiring defendants not to oppose the attorney’s fees request, and a “kicker” provision that permitted unused settlement funds to be returned to defendants rather than distributed to the class.  Id. at 979. The following Gibson Dunn lawyers prepared this client update: Christopher Chorba, Theane Evangelis, Kahn A. Scolnick, Bradley J. Hamburger, Brandon J. Stoker, Jeremy S. Smith, Lauren M. Blas, Michael Eggenberger, and Gatsby Miller. Gibson Dunn attorneys are available to assist in addressing any questions you may have regarding these developments.  Please contact the Gibson Dunn lawyer with whom you usually work in the firm’s Class Actions or Appellate and Constitutional Law practice groups, or any of the following lawyers: Theodore J. Boutrous, Jr. – Co-Chair, Litigation Practice Group – Los Angeles (+1 213-229-7000, tboutrous@gibsondunn.com) Christopher Chorba – Co-Chair, Class Actions Practice Group – Los Angeles (+1 213-229-7396, cchorba@gibsondunn.com) Theane Evangelis – Co-Chair, Class Actions Practice Group – Los Angeles (+1 213-229-7726, tevangelis@gibsondunn.com) Kahn A. Scolnick – Los Angeles (+1 213-229-7656, kscolnick@gibsondunn.com) Bradley J. Hamburger – Los Angeles (+1 213-229-7658, bhamburger@gibsondunn.com) © 2018 Gibson, Dunn & Crutcher LLP, 333 South Grand Avenue, Los Angeles, CA 90071 Attorney Advertising:  The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice.

Click for PDF China Agritech Inc. v. Resh, No. 17-432 Decided June 11, 2018 Today, the Supreme Court held that the filing of a class action does not toll the statute of limitations for putative class members to file their own class actions. That means that if class certification is denied, putative class members cannot file successive class actions after the statute of limitations has expired. Background: Stockholders filed two timely class actions against China Agritech, Inc. alleging that the company violated the Securities Exchange Act of 1934.  After class certification was denied in both actions, stockholders filed a third class action, well outside the two-year limitations period.  They argued that their claims were timely because the limitations period was tolled while the earlier class actions were pending. Issue: Whether previously absent class members may bring a class action outside the applicable limitations period on the theory that the pendency of a previous class action (in which the court ultimately denied class certification) tolled the statute of limitations during the pendency of earlier class actions. Court’s Holding: No. Previously absent class members may not bring successive (also called “stacked”) class actions outside the limitations period. “The ‘efficiency and economy of litigation’ that support tolling individual claims, . . . do not support maintenance of untimely successive class actions; any additional class filings should be made early on, soon after the commencement of the first action seeking class certification.” Justice Ginsburg, writing for the Court Gibson Dunn filed amicus briefs arguing against tolling for successive class actions for the Chamber of Commerce, Retail Litigation Center, and the American Tort Reform Association What It Means: The Court declined to extend the equitable tolling rule established in American Pipe & Construction Co. v. Utah, 414 U.S. 538 (1974), which permits putative class members to wait for a decision on class certification before filing an individual claim or intervening in the original lawsuit.  The Court held that the American Pipe rule does not toll the statute of limitations for putative class members to file class actions, so all class claims must be filed within the limitations period. The ruling ensures that when class certification is denied, a new plaintiff cannot revive otherwise expired claims by filing the case as a class action.  The Court explained that the decision about whether to certify a class should be made at the outset of the case for all would-be class representatives, and class members should not be able to extend the statute of limitations indefinitely by filing successive class actions each time class certification is denied. The Court made clear that its ruling applies regardless of the reason the court denied class certification in the first case. The Court stated that its ruling is not likely to lead to a dramatic increase in the number of protective class actions filed during the limitations period.  The majority of courts of appeals had already adopted the same rule, and those courts did not experience an increase in protective class action filings. Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding developments at the Supreme Court.  Please feel free to contact the following practice leaders: Appellate and Constitutional Law Practice Caitlin J. Halligan +1 212.351.3909 challigan@gibsondunn.com Mark A. Perry +1 202.887.3667 mperry@gibsondunn.com Nicole A. Saharsky +1 202.887.3669 nsaharsky@gibsondunn.com Related Practice: Class Actions Theodore J. Boutrous, Jr. +1 213.229.7804 tboutrous@gibsondunn.com Christopher Chorba +1 213.229.7396 cchorba@gibsondunn.com Theane Evangelis +1 213.229.7726 tevangelis@gibsondunn.com   © 2018 Gibson, Dunn & Crutcher LLP Attorney Advertising:  The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice.

Los Angeles partners Kahn Scolnick and Bradley Hamburger are the authors of “A Better Method For Achieving Broader Class Action Reform,” [PDF] published in Law360 on June 5, 2018.

Click for PDF Epic Systems Corp. v. Lewis, No. 16-285; Ernst & Young LLP v. Morris, No. 16-300; National Labor Relations Board v. Murphy Oil USA, No. 16-307 Decided May 21, 2018 Today, the Supreme Court held 5-4 that an employee’s agreement to arbitrate employment-related disputes with his employer through individual arbitration is enforceable under the Federal Arbitration Act. The Court rejected the argument that enforcing the arbitration agreement’s class action waiver would violate employees’ right to engage in collective action under the National Labor Relations Act. Background: The Federal Arbitration Act (FAA) provides that agreements to arbitrate transactions involving interstate commerce “shall be valid, irrevocable, and enforceable,” except “upon such grounds as exist at law or in equity for the revocation of any contract.”  9 U.S.C. § 2.  In these consolidated cases, the employees agreed to arbitrate work-related disputes through individual arbitration, but later sued their employers in federal courts, arguing that the arbitration agreements were invalid because they violated employees’ right to engage in “concerted activities” under the National Labor Relations Act (NLRA).  29 U.S.C. § 157. Issue: Whether an agreement that requires an employer and an employee to resolve work-related disputes through individual arbitration, and waive class proceedings, is enforceable under the FAA, notwithstanding the employee’s NLRA right to engage in concerted activities.Court’s Holding: Yes.  Arbitration agreements requiring individual arbitration of employment disputes are enforceable notwithstanding the NLRA collective-action right. What It Means: The Supreme Court ruling confirms that courts will continue to enforce agreements between employers and employees to arbitrate their disputes on an individual basis, rather than in class action litigation. This case continues the Supreme Court’s trend of enforcing the FAA’s strong policy favoring arbitration. The Court held that under the FAA’s saving clause, litigants only can challenge an arbitration agreement on grounds that would apply to “any” contract—not on grounds specific to arbitration. The Court’s reasoning suggests that state laws restricting arbitration are not likely to withstand challenge under the FAA. Clients should consult a Gibson Dunn attorney regarding the nuances created by different jurisdictions. The Court determined that the NLRA’s “concerted activities” provision was intended to protect organizing and collective bargaining in the workplace, not the treatment of class actions or class arbitration. Interestingly, the Solicitor General said the arbitration agreements are enforceable, but the National Labor Relations Board (NLRB) said they are not enforceable – and both argued their positions before the Supreme Court. For this reason (and others), the Court declined to afford Chevron deference to the NLRB’s view. “It is this Court’s duty to interpret Congress’s statutes as a harmonious whole rather than at war with one another. And abiding that duty here leads to an unmistakable conclusion.” Justice Gorsuch, writing for the Court Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding developments at the Supreme Court.  Please feel free to contact the following practice leaders: Appellate and Constitutional Law Practice Caitlin J. Halligan +1 212.351.3909 challigan@gibsondunn.com Mark A. Perry +1 202.887.3667 mperry@gibsondunn.com Nicole A. Saharsky +1 202.887.3669 nsaharsky@gibsondunn.com   Gibson Dunn’s Labor and Employment lawyers are available to assist in addressing any questions you may have regarding arbitration programs. Please feel free to contact the following practice leaders or the attorneys with whom you work: Labor and Employment Practice Catherine A. Conway +1 213.229.7822 cconway@gibsondunn.com) Eugene Scalia +1 202.955.8206 escalia@gibsondunn.com Jason C. Schwartz +1 202.955.8242 jschwartz@gibsondunn.com   Related Practice: Class Actions Theodore J. Boutrous, Jr. +1 213.229.7804 tboutrous@gibsondunn.comm Christopher Chorba +1 213.229.7396 cchorba@gibsondunn.com Theane Evangelis +1 213.229.7726 tevangelis@gibsondunn.com   © 2018 Gibson, Dunn & Crutcher LLP Attorney Advertising: The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice.

Click for PDF This update provides an overview and summary of significant class action developments during the first quarter of 2018 (January through March), as well as a brief look ahead to some of the key class action issues anticipated later this year. Part I addresses developments at the United States Supreme Court, including the oral arguments in China Agritech, Inc. v. Resh, the decision in Jennings v. Rodriguez and its implications for Rule 23(b)(2) class actions, and three grants of certiorari in cases relating to class actions (including in two important arbitration cases, and in another that will address the use of cy pres in class action settlements). Part II covers the Ninth Circuit’s decision in In re Hyundai & Kia Fuel Economy Litigation, which may have significant consequences for plaintiffs attempting to certify nationwide class actions, as well as parties attempting to settle such actions. Part III describes several rulings addressing important issues regarding class settlements, including recent activity by the U.S. Department of Justice in scrutinizing these settlements. Part IV discusses a series of decisions from the federal courts of appeals, involving (among other things) what it takes to establish standing under Article III in data breach class actions. Part V addresses a new California Court of Appeal decision regarding the standards applicable to the use of experts at class certification. I.   The U.S. Supreme Court Hears Argument on the Tolling Effect of Putative Class Actions, Issues Guidance on Rule 23(b)(2) Class Actions, and Grants Certiorari in Three Important Cases As previewed in our fourth quarter 2017 update, the U.S. Supreme Court heard oral argument on March 26, 2018, in China Agritech, Inc. v. Resh (No. 17-432).  The case concerns the scope of the equitable tolling rule of American Pipe and Construction Co. v. Utah, 414 U.S. 538 (1974), which held that the filing of a class action tolls the statute of limitations for absent class members and permits them to bring subsequent individual suits after the original class action has been dismissed.  China Agritech asks whether the American Pipe rule should be extended to permit absent class members to bring successive class action lawsuits—a question that has divided the courts of appeals. The oral argument did not suggest a clear answer.  While some justices seemed skeptical of barring individuals who relied on their membership in a class action (as a reason not to sue within the limitations period) from then using Rule 23 in a subsequent suit, others expressed concern that applying the American Pipe rule to subsequent class actions would encourage “stacked” successive class actions that would undermine the efficiency rationales underlying the class action device.  (Gibson Dunn filed an amicus brief in this case on behalf of the Chamber of Commerce of the United States, the Retail Litigation Center, Inc., and the American Tort Reform Association in support of the petitioner.) The Court also provided guidance regarding Rule 23(b)(2) classes in Jennings v. Rodriguez, 138 S. Ct. 830 (2018), a case involving the government’s detention of aliens without bond hearings.  The Court instructed the Ninth Circuit to “consider whether a Rule 23(b)(2) class action continues to be the appropriate vehicle for respondents’ [due process] claims in light of” its holding in Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338 (2011), that “‘Rule 23(b)(2) applies only when a single injunction or declaratory judgment would provide relief to each member of the class.'”  Id. at 851–52 (quoting Dukes, 564 U.S. at 360).  Writing for the majority, Justice Alito explained that Rule 23(b)(2) may no longer permit class treatment because some class members may not be entitled to bond hearings as a matter of constitutional due process.  Id. at 852.  The Court also instructed the Ninth Circuit to consider whether the “flexible” due process inquiry, which “calls for such procedural protections as the particular situation demands,” can be adjudicated in a class action.  Id. (quotations omitted). Looking ahead, there are several significant class action issues on the Court’s docket.  As noted in our fourth quarter 2017 update, by June 2018, the Court is expected to decide whether the National Labor Relations Act precludes enforcement of class action waivers in mandatory employment arbitration agreements, which is the question presented in a consolidated trio of cases, Epic Systems Corp. v. Lewis (No. 16-285), National Labor Relations Board v. Murphy Oil USA, Inc. (No. 16-307), and Ernst & Young LLP v. Morris (No. 16-300). In the past three months, the Court granted certiorari in three more cases that will address issues relevant to class actions. First, on February 26, 2018, the Court granted certiorari in New Prime Inc. v. Oliveira (No. 17‑340) to resolve two important issues concerning the interpretation and scope of the Federal Arbitration Act (“FAA”):  (a) whether a dispute regarding the applicability of the FAA must be resolved by an arbitrator under a valid delegation clause, and (b) whether an exemption for contracts of employment for transportation workers in Section 1 of the FAA applies to independent contractors.  Both questions have divided the federal courts of appeals.  The case presents an opportunity for the Court to establish uniform, national rules concerning the interpretation of the FAA, including the ability of parties to incorporate enforceable arbitration provisions in agreements governing independent contractors.  (Gibson Dunn represents the petitioner, New Prime Inc.) Second, on April 30, 2018, the Court granted certiorari in Lamps Plus, Inc. v. Varela (No. 17‑988), which presents the question whether the FAA forecloses a state-law interpretation of an arbitration agreement that would authorize class arbitration based solely on general language commonly used in arbitration agreements.  Lamps Plus presents the Court with an opportunity to again wrestle with the propriety of class arbitration, an issue that the Court previously addressed in Stolt-Nielsen, S.A. v. AnimalFeeds International Corp., 559 U.S. 662 (2010). Finally, on April 30, 2018, the Court granted certiorari in Frank v. Gaos (No. 17-961), which we discussed in our third quarter 2017 update and our fourth quarter 2017 update.  Frank, which involved a class action settlement of claims against Google, concerns the validity of cy pres-only settlements that provide no direct compensation to class members.  Frank presents an opportunity to address the “fundamental concerns” with cy pres-only settlements that Chief Justice Roberts previously identified, “including when, if ever, such relief should be considered; how to assess its fairness as a general matter; whether new entities may be established as part of such relief; if not, how existing entities should be selected; what the respective roles of the judge and parties are in shaping a cy pres remedy,” among other issues.  Marek v. Lane, 134 S. Ct. 8, 9 (2013) (Roberts, C.J., respecting denial of certiorari). II.   Ninth Circuit Vacates Certification of Nationwide Settlement Class This past quarter, the Ninth Circuit likely increased the scrutiny that district courts must now apply to the certification of nationwide class actions asserting state-law claims.  In In re Hyundai & Kia Fuel Economy Litigation, 881 F.3d 679 (9th Cir. 2018), a divided panel vacated a nationwide class action settlement because the district court failed to properly analyze whether California law could be applied to all class members. This action arose out of alleged misstatements concerning the fuel efficiency of certain Hyundai and Kia vehicles.  In re Hyundai, 881 F.3d at 694-95.  The district court certified a nationwide Rule 23(b)(3) class for settlement purposes and granted preliminary approval of a proposed class settlement.  Id. at 700-01.  The district court ruled that it was not required to analyze whether there were significant differences between California law and the laws of the other states at issue because differences in state law could be addressed during a hearing on the fairness of the settlement.  Id. at 700.  The district court approved the settlement without conducting a choice-of-law analysis.  See id. at 701. The Ninth Circuit vacated the class certification order.  It emphasized that, under Mazza v. American Honda Motor Co., 666 F.3d 581 (9th Cir. 2012), “the district court was required to apply California’s choice of law rules to determine whether California law could apply to all plaintiffs in the nationwide class, or whether the court had to apply the law of each state, and if so, whether variations in state law defeated predominance.”  In re Hyundai, 881 F.3d at 702.  The Ninth Circuit agreed that district courts need not consider “litigation management issues” in deciding whether to certify a settlement class, but they were still obligated to ensure that the class “meets all of the prerequisites of Rule 23,” including its predominance requirement.  Id.  Punting the decision about choice-of-law issues to a “fairness hearing” was not a viable option, as a “fairness hearing under Rule 23(e) is no substitute for rigorous adherence to those provisions of the Rule designed to protect absentees[.]”  Id. at 703 (alteration in original) (quoting Ortiz v. Fibreboard Corp., 527 U.S. 815, 849 (1999)). The Ninth Circuit also took steps to limit the perception that nationwide or mass advertising campaigns can produce a “common” question of whether the class relied on certain misrepresentations by the defendants.  The court reasoned that even though there was some evidence of nationwide advertising, there was no evidence of uniform representations to used car purchasers, and no evidence of the sort of “massive advertising campaign” that could give rise to a presumption of reliance as to such purchasers.  In re Hyundai, 881 F.3d at 704.  It also rejected the argument that individualized questions regarding exposure to the advertising could simply be ignored in the settlement context. Judge Nguyen’s dissent claimed, among other things, that the majority improperly shifted the burden from the objectors to the district court or class counsel to decide whether other states’ laws apply and argued that the majority’s decision had created a circuit split and ran afoul of Erie Railroad v. Tompkins, 304 U.S. 64 (1938). The settling parties filed petitions for rehearing and rehearing en banc in March.  The objectors were ordered to file their response and did so on March 28.  The petitions are currently pending. III.   Notable Decisions Involving Objections to Class Action Settlements There were two other notable decisions regarding class action settlements this quarter. First, the United States Department of Justice signaled a renewed interest in policing class action settlements.  According to reports, the DOJ receives more than 700 notices of class action settlements each year as required by the Class Actions Fairness Act (“CAFA”), but it had only participated in two cases.  Dep’t of Justice, Associate Attorney General Brand Delivers Remarks to the Washington, D.C. Lawyers Chapter of the Federalist Society (Feb. 15, 2018), https://www.justice.gov/opa/speech/associate-attorney-general-brand-delivers-remarks-washington-dc-lawyers-chapter.  At a conference on February 15, however, Associate Attorney General Rachel L. Brand warned that “If a settlement isn’t fair or reasonable under CAFA, DOJ may file a statement of interest saying so.  Be on the lookout in the coming days for the first example.”  Id. The DOJ followed through on this promise in Cannon v. Ashburn Corp., No. 16-cv-1452, 2018 WL 1806046 (D.N.J. Apr. 17, 2018), where the district court denied a motion for final settlement approval based in part on the concerns raised by the DOJ.  The DOJ had filed a “statement of interest” objecting to the class settlement of claims involving alleged false advertising in connection with the sale of wines.  Id. at *12.  The proposed settlement offered class members coupons worth between $0.20 to $2.25 per bottle of wine purchased, with a total settlement value estimated at $10.8 million.  Id. at *3.  Class counsel were to receive $1.7 million in fees.  Id.  In its “statement of interest,” the DOJ argued that class counsel should not receive a “windfall” of $1.7 million, given the minimal benefit to class members and the apparent lack of merit of the claims.  Statement of Interest of the United States at 1, Cannon v. Ashburn Corp., No. 16‑cv‑1452 (Feb. 16, 2018), ECF No. 58.  Arguing that the settlement was “a textbook coupon settlement” that would force class members to engage in future business with the defendant if they wanted to receive any benefit, the DOJ urged the court, should it grant approval, to defer payment of fees to class counsel until the total value of redeemed coupons is known.  Id. at 9–11, 16.  The Arizona Attorney General also weighed in on behalf of 19 states’ Attorneys General, as did ten objectors.  2018 WL 1806046, at *4.  This case may be the first example of what appears to be a new trend of heightened scrutiny of class action settlements by both state and federal law enforcement officials. Second, in Low v. Trump University, LLC, 881 F.3d 1111 (9th Cir. 2018), the Ninth Circuit affirmed the district court’s order approving a class settlement between Trump University and its former students.  Id. at 1113.  A lone objector sought to opt out of the class after receiving a court-approved settlement notice and submitting her claim.  Id. at 1115-16.  The district court approved the settlement and the objector appealed.  Id. at 1116.  The objector argued that a single sentence in the long-form notice stating that class members would “be notified about how to obtain a share (or how to ask to be excluded from any settlement)” led her to believe that there would be a second opportunity to opt out.  Id. at 1117.  The Ninth Circuit found that, “reading the notice as a whole and in context,” it “promised only one opportunity to opt out,” and observed that there is “‘no authority of any kind suggesting that due process requires that members of a Rule 23(b)(3) class be given a second chance to opt out.'”  Id. at 1121 (quoting Officers for Justice v. Civil Serv. Comm’n of S.F., 688 F.2d 615, 635 (9th Cir. 1982)). IV.   In re Zappos.com and Other Notable Opinions from the Federal Courts of Appeals Addressing Article III Standing The issue of Article III standing in putative class actions, and in data privacy class actions in particular, continues to be a hotly litigated issue. The most significant decision this quarter came from the Ninth Circuit, which reversed the dismissal of a putative class action relating to the breach of Zappos.com’s data systems that had allegedly exposed the “names, account numbers, passwords, email addresses, billing and shipping addresses, telephone numbers, and credit and debit card information” of 24 million customers.  In re Zappos.com, Inc., — F.3d —, No. 16-16860, 2018 WL 1883212, at *2 (9th Cir. Apr. 20, 2018).  The district court ruled that those plaintiffs who alleged “actual fraud occurred as a direct result of the breach” had Article III standing, but that those plaintiffs who “failed to allege . . . actual identity theft or fraud” based on the breach did not.  Id. at *3. The Ninth Circuit reversed, concluding that the dismissed plaintiffs had “sufficiently alleged standing based on the risk of identity theft.”  Zappos, 2018 WL 1883212, at *2.  The Ninth Circuit relied heavily on its previous decision in Krottner v. Starbucks Corp., 628 F.3d 1139 (9th Cir. 2010), which had addressed “the Article III standing of victims of data theft.”  Zappos, 2018 WL 1883212, at *3.  The court considered whether Krottner was still good law following the Supreme Court’s decision in Clapper v. Amnesty International, USA, 568 U.S. 398 (2013), but ultimately concluded that “Krottner is not clearly irreconcilable with Clapper” and thus “control[led] the results here.”  Zappos, 2018 WL 1883212, at *5–*6. Applying Krottner, the Ninth Circuit reasoned that “the sensitivity of the personal information, combined with its theft,” meant that “the plaintiffs had adequately alleged an injury in fact” for standing purposes.  Zappos, 2018 WL 1883212, at *6.  Because the hackers had allegedly accessed full credit card numbers, the stolen information “gave hackers the means to commit fraud or identity theft,” as underscored by those “plaintiffs who alleged that the hackers had already commandeered their accounts or identities using information taken from Zappos.”  Id.  Finding the other elements of Article III standing satisfied, the Ninth Circuit remanded the case to the district court for further proceedings. While In re Zappos.com held that Article III was satisfied based on the facts alleged there, three other decisions issued this past quarter came to the opposite conclusion and thus affirmed the dismissal of putative class actions: In Owner-Operator Independent Drivers Association v. U.S. Department of Transportation, 879 F.3d 339 (D.C. Cir. 2018), the D.C. Circuit held that commercial truck drivers lacked Article III standing to sue the Department of Transportation for inaccuracies in its database of driver-safety information.  Five commercial truck drivers sued the Department because their records contained inaccuracies, but only two of the drivers ever had the inaccurate information shared with future employers.  Id. at 340.  On these facts, the court determined that “the mere existence of inaccurate database information is not sufficient to confer Article III standing” because there was no concrete or de facto harm.  Id. at 345.  Nevertheless, the court found the actual dissemination of inaccurate information was sufficient to confer standing for the two truck drivers whose information had in fact been shared.  Id. In Bassett v. ABM Parking Services, Inc., 883 F.3d 776 (9th Cir. 2018), the Ninth Circuit agreed with the Second and Seventh Circuits that alleging “a statutory violation,” without more, was “too speculative” a “theory of exposure to identity theft” to confer Article III standing on a plaintiff to litigate claims under the Fair and Accurate Credit Transactions Act and the Fair Credit Reporting Act.  Id. at 777, 783; see also Crupar–Weinmann v. Paris Baguette Am., Inc., 861 F.3d 76 (2d Cir. 2017); Meyers v. Nicolet Rest. of De Pere, LLC, 843 F.3d 724 (7th Cir. 2016).  The court determined that this bare procedural violation failed to establish a concrete harm and that plaintiff’s “theory of ‘exposure’ to identity theft”—premised on the printing of a few digits of his credit card on a parking receipt—”[was] . . . ‘too speculative for Article III purposes.'”  Bassett, 883 F.3d at 783 (quoting Missouri ex rel. Koster v. Harris, 847 F.3d 646, 654 (9th Cir. 2017)). In Hagy v. Demers & Adams, 882 F.3d 616 (6th Cir. 2018), the Sixth Circuit ruled that alleging a violation of the Fair Debt Collection Practices Act (“FDCPA”) is not enough to confer Article III standing.  The defendant’s attorney sent plaintiffs a debt-collection letter stating there would be no more “attempt[s] to collect any deficiency balance.”  Id. at 619.  This letter failed to disclose that it was a “communication . . . from a debt collector” in violation of the FDCPA.  Id. (quoting 15 U.S.C. § 1692e(11)).  The court determined that “[f]ar from causing . . . any injury, tangible or intangible, the . . . letter gave [plaintiffs] peace of mind.” Id. at 621.  It accordingly declined to elevate a “bare violation” of the statute to an injury sufficient for Article III standing, as “there must be some limits on Congress’s power to create injuries in fact suitable for judicial resolution.” Id. at 622-23. V.   California Court of Appeal Adopts Majority Position of Federal Courts of Appeals in Holding that the State’s Daubert Equivalent Applies at Class Certification In an important new decision, Apple Inc. v. Superior Court of San Diego County, 19 Cal. App. 5th 1101 (2018), the Court of Appeal held that Sargon Enterprises, Inc. v. University of Southern California, 55 Cal. 4th 747 (2012), which adopts a standard comparable to that by which federal courts evaluate the admissibility of expert testimony under Daubert v. Merrell Dow Pharmaceuticals, 509 U.S. 579 (1993), “applies to expert opinion evidence submitted in connection with a motion for class certification.”  Apple, 19 Cal. App. 5th at 1106.  The ruling aligns California law with the majority of federal courts of appeals. A proposed class of consumers sought certification of their putative class claims that a purportedly defective power button on older iPhone models decreased the phones’ value.  The plaintiffs relied on expert declarations to support their certification motion, and the trial court held that it did not need to apply the Sargon standard until evidentiary hearings later in the proceedings.  The Court of Appeal reversed, reasoning that certifying the class based on inadmissible evidence “would merely lead to its exclusion at trial, imperiling continued certification of the class and wasting the time and resources of the parties and the court.”  Apple, 19 Cal. App. 5th at 1117.  The court was careful to clarify, however, that the scope of Sargon‘s applicability at class certification was “limited . . . compared with the inquiry at trial” because the court “need not rule on the admissibility of certain expert opinion evidence” that is “irrelevant or unnecessary for [the class certification] decision.”  Id. at 1120. The ruling rested in part on the recognition that “[a]lthough some federal courts appear to have a largely semantic disagreement over whether to apply a ‘full’ or ‘focused’ Daubert analysis, the substantive result appears the same,” and these decisions show that applying the standard is both feasible and desirable.  Apple, 19 Cal. App. 5th at 1119-20.  Four circuits endorse a “full” Daubert analysis at class certification, see In re Blood Reagents Antitrust Litig., 783 F.3d 183 (3d Cir. 2015); In re Carpenter Co., No. 14-0302, 2014 WL 12809636 (6th Cir. Sept. 29, 2014); Sher v. Raytheon Co., 419 F. App’x 887 (11th Cir. 2011); American Honda Motor Co. v. Allen, 600 F.3d 813 (7th Cir. 2010), while the Eighth Circuit, and more recently, the Ninth Circuit, have adopted a more “focused” approach, see In re Zurn Pex Plumbing Prod. Liab. Litig., 644 F.3d 604 (8th Cir. 2011); Sali v. Corona Regional Medical Ctr., No. 15-56460 (9th Cir. May 3, 2018).  Although the Supreme Court has suggested that Daubert should apply to expert evidence at class certification, it has yet to squarely resolve the issue.  See Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 354 (2011) (“The District Court concluded that Daubert did not apply to expert testimony at the certification stage of class-action proceedings. . . . We doubt that is so. . . .”) (internal citation omitted). Apple v. Superior Court joins a growing body of case law recognizing that the “corrosive effects of improper expert opinion testimony may be felt with substantial force at class certification,” so courts must scrutinize such testimony at that stage.  19 Cal. App. 5th at 1119. The following Gibson Dunn lawyers prepared this client update: Christopher Chorba, Theane Evangelis, Kahn Scolnick, Bradley J. Hamburger, Lauren M. Blas, Gregory Bok, Jessica Culpepper, Wesley Sze, and Josh Burk. Gibson Dunn are available to assist in addressing any questions you may have regarding these developments.  Please contact the Gibson Dunn lawyer with whom you usually work in the firm’s Class Actions or Appellate and Constitutional Law practice groups, or any of the following lawyers: Theodore J. Boutrous, Jr. – Co-Chair, Litigation Practice Group – Los Angeles (+1 213-229-7000, tboutrous@gibsondunn.com) Christopher Chorba – Co-Chair, Class Actions Practice Group – Los Angeles (+1 213-229-7396, cchorba@gibsondunn.com) Theane Evangelis – Co-Chair, Class Actions Practice Group – Los Angeles (+1 213-229-7726, tevangelis@gibsondunn.com) Kahn A. Scolnick – Los Angeles (+1 213-229-7656, kscolnick@gibsondunn.com) Bradley J. Hamburger – Los Angeles (+1 213-229-7658, bhamburger@gibsondunn.com) © 2018 Gibson, Dunn & Crutcher LLP Attorney Advertising:  The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice.

Click for PDF Cyan, Inc. v. Beaver County Employees Retirement Fund, No. 15-1439 Decided March 20, 2018 Today, the Supreme Court held 9-0 that class actions alleging only federal claims under the Securities Act of 1933 may be heard in state court and, if brought in state court, cannot be removed to federal court. Background: Federal and state courts have traditionally shared jurisdiction over claims under the Securities Act of 1933. After the Private Securities Litigation Reform Act of 1995 (PSLRA) tightened standards for pleading and proving federal securities fraud class actions, plaintiffs began filing those claims in state court. In response, Congress enacted the Securities Litigation Uniform Standards Act of 1998 (SLUSA), which requires certain “covered class actions” alleging state law securities claims to be heard and dismissed in federal court. 15 U.S.C. § 77p(c). But courts were split over whether covered class actions filed in state court that allege only claims under the 1933 Act also must be heard in federal court. In this case, investors in Cyan, Inc. filed a class action in California state court alleging only claims under the 1933 Act. The California courts refused to dismiss the case for lack of subject-matter jurisdiction. Issues: (1) Whether state courts lack subject-matter jurisdiction over class actions that allege only Securities Act of 1933 claims, and (2) Whether defendants in class actions filed in state court that allege only 1933 Act claims may remove the cases to federal court. “[W]e will not revise [Congress’s] legislative choice, by reading a conforming amendment and a definition in a most improbable way, in an effort to make the world of securities litigation more consistent or pure.” Justice Kagan,writing for the Court Court’s Holding: SLUSA does not deprive state courts of subject-matter jurisdiction over class actions raising only claims under the 1933 Act and does not authorize defendants to remove such actions to federal court. What It Means: SLUSA has often been the subject of statutory-interpretation disputes. But here, the unanimous Court held that SLUSA’s “clear statutory language” does not preclude state courts from adjudicating class actions involving 1933 Act claims. SLUSA’s class-action bar and federal-court-channeling provision apply only to state law claims. Under SLUSA, covered securities class actions based on the 1934 Act must proceed in federal court. 15 U.S.C. § 78aa. But as a result of the Court’s decision today, covered class actions based only on the 1933 Act may proceed in state court. Either way, the Court emphasized, the substantive protections of the PSLRA (such as the safe harbor for forward-looking statements) apply to all claims under both the 1933 and 1934 Acts. The United States argued that SLUSA permits defendants in class actions filed in state court that raise 1933 Act claims to remove those actions to federal court. The Court disagreed. In the wake of this ruling, businesses should expect to see more securities class actions alleging violations of the 1933 Act in state court, because plaintiffs will seek to take advantage of state courts that are perceived to be friendlier to their interests. This significant loophole may prompt Congress to enact new legislation, similar to SLUSA, to ensure that plaintiffs are required to bring securities class actions in federal court. Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding developments at the Supreme Court.  Please feel free to contact the following practice leaders: Appellate and Constitutional Law Practice Caitlin J. Halligan +1 212.351.3909 challigan@gibsondunn.com Mark A. Perry +1 202.887.3667 mperry@gibsondunn.com Nicole A. Saharsky +1 202.887.3669 nsaharsky@gibsondunn.com Related Practice: Securities Litigation Brian M. Lutz +1 415.393.8379 blutz@gibsondunn.com Robert F. Serio +1 212.351.3917 rserio@gibsondunn.com Meryl L. Young +1 949.451.4229 myoung@gibsondunn.com Related Practice: Class Actions Theodore J. Boutrous, Jr. +1 213.229.7804 tboutrous@gibsondunn.com Christopher Chorba +1 213.229.7396 cchorba@gibsondunn.com Theane Evangelis +1 213.229.7726 tevangelis@gibsondunn.com © 2018 Gibson, Dunn & Crutcher LLP Attorney Advertising:  The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice.