March 13, 2017
As Judge Neil Gorsuch proceeds through the Senate confirmation process, we are continuing to review his jurisprudence and to assess how he might affect the Supreme Court should the Senate approve his nomination. We are publishing these analyses in a series of client alerts focusing on individual subject matters. This alert focuses on class actions.
Judge Gorsuch’s body of published Tenth Circuit opinions includes only a handful of cases involving class actions and other aggregated litigation, providing limited insights into his views on current controversies in class action practice. Nonetheless, if confirmed to fill Justice Scalia’s seat on the Court, Judge Gorsuch will likely have an opportunity to help resolve many open questions in this area of law, including clarifying the proper role of statistical evidence in establishing class-wide liability, and resolving whether Federal Rule of Civil Procedure 23 has a distinct "ascertainability" requirement.
We examine below three of Judge Gorsuch’s Tenth Circuit opinions, which provide some indication that he gives the same serious attention to the text of the federal rules as he gives to statutes, including those that define the limits of federal jurisdiction. His opinions also indicate that he respects the traditional meaning assigned to terms of art, and that he is willing to consider practical consequences in ruling on class action remedies.
Judge Gorsuch has authored three published opinions for unanimous panels that provide some indications about his approach to areas of law important to class action practice. One of those opinions involved a class claim for injunctive relief, and two involved jurisdiction under the Class Action Fairness Act ("CAFA").
Rule 23(b)(2) Injunctive Relief Classes. In the case involving a class claim for injunctive relief, Shook v. Board of County of El Paso, 543 F.3d 597 (10th Cir. 2008), Judge Gorsuch showed careful attention to the practical consequences of class action remedies, and recognized that district courts have "considerable discretion" over certification. Id. at 603. County jail inmates brought a putative class action alleging that jail conditions for prisoners with mental health conditions violated the Eighth Amendment’s prohibition against cruel and unusual punishment. Writing for the panel, Judge Gorsuch declined to disturb the district court’s denial of class certification–a relatively rare appellate outcome in the context of putative classes that seek only injunctive relief. Id. at 604-05. Because it is easier to obtain certification for a class seeking exclusively injunctive relief than it is for a class seeking monetary damages, appellate affirmances of denials of class certification for injunctive relief are somewhat more infrequent, making Judge Gorsuch’s opinion even more worthy of careful study.
The Shook opinion focused on the injunctive relief requested, concluding that the plaintiffs had not satisfied Rule 23(b)(2)’s requirement that "injuries must be sufficiently similar that they can be addressed in" one injunction. Id. at 604. The plaintiffs sought an injunction compelling defendants to "cease using restraints, pepper spray, and electroshock weapons (‘tasers’) against prisoners exhibiting signs of mental illness." Id. at 605. That prayer for relief, Judge Gorsuch explained, failed Rule 23(b)(2)’s requirement that classes must be cohesive because the relief would require an injunction that "distinguishes . . . between how prison officials may treat class members, rather than prescribing a standard of conduct applicable to all class members." Id.
Also important to Judge Gorsuch’s opinion was Rule 65(d), which requires that a requested injunction "describe in reasonable detail . . . the act or acts restrained or required." The plaintiffs’ request failed that requirement because it vaguely sought an "’adequate’ system to provide ‘appropriate’ medication to inmates." Id. at 605-06. Moreover, because the class was so fluid (it was defined to include future inmates), "enforcing the injunction would require monitoring changes to [class] characteristics over time." Id. at 606. The plaintiffs could have avoided these problems, Judge Gorsuch observed, by using subclasses under Rule 23(c)(5). Id. at 607. While noting that the district court could have sua sponte suggested subclasses as a possible resolution, he placed the burden of proposing and constructing subclasses squarely on the plaintiffs. Id.
CAFA. In the more recent of his two CAFA decisions, Judge Gorsuch stressed the need to construe the statute’s terms consistently with historical usage in related jurisdictional statutes, and reached a result upholding congressional intent to expand federal jurisdiction over large class actions. In Hammond v. Stamps.com, 844 F.3d 909 (10th Cir. 2016), a customer who purchased postage stamps from defendant Stamps.com filed a putative class action in state court alleging unlawful trade practices. After Stamps.com removed to federal court, the district court granted the customer’s motion to remand to state court. Id. at 911. Judge Gorsuch vacated the judgment and remanded, holding that the amount in controversy was sufficient to meet CAFA’s minimum for removal to a federal district court. Id. at 914.
His reasoning in Hammond hinged on CAFA’s use of the jurisdictional term "in controversy." 28 U.S.C. § 1332(d)(2). The district court declined jurisdiction based on its belief that the defendant had not established that the value of the case was likely to exceed the minimum threshold. But Judge Gorsuch reasoned that the phrase "in controversy" was one "heavily encrusted with meaning" before Congress enacted CAFA, and that the term had never been understood to require a "probabilistic judgment" concerning "what damages the plaintiff will likely prove." Id. at 912. CAFA jurisdiction, and thus removal, depends on "what a factfinder might conceivably lawfully award." Id.
In the other CAFA case, BP America, Inc. v. Oklahoma ex rel. Edmondson, 613 F.3d 1029 (10th Cir. 2010), Judge Gorsuch clarified the standard for discretionary appeals from remands to state court. Oklahoma sued a propane gas distributor in state court alleging manipulation of gas prices in violation of the Oklahoma Consumer Protection Act. The distributor removed the action, arguing that it qualified as a mass action under CAFA. The district court remanded to state court, and the distributor moved for leave to appeal.
Writing for a unanimous panel, Judge Gorsuch granted leave to appeal even though, "[g]enerally speaking, federal courts of appeals may not review district court remand orders." Id. at 1032 (citing 28 U.S.C. § 1447(d)). Under Section 1453(c)(1), "a court of appeals may accept an appeal from an order of a district court granting or denying a motion to remand a class action to the State court from which it was removed if application is made to the court of appeals not [more] than 7 days after entry of the order." Judge Gorsuch rejected Oklahoma’s argument that the district court’s remand order divested all federal jurisdiction in favor of the state courts. The plain terms of Section 1453(c)(1), he stressed, did not impose any conditions on the discretion of courts of appeals to allow an appeal if filed within the specified time. Id. at 1033-34.
Because Judge Gorsuch has not authored a large number of opinions on class actions, we have been unable to paint with a broad brush in detailing how his views might impact this area of law. Still, his handful of relevant opinions suggest that he will adhere to the plain language of the federal rules and CAFA, and preserve the historically familiar meanings assigned to jurisdictional terms of art.
Judge Gorsuch’s confirmation also could have significant ramifications for class action law because he would fill the seat of Justice Scalia, who authored many 5-4 opinions of great consequence in this area. For example, Justice Scalia wrote for the majority in Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338 (2011), and Comcast Corp. v. Behrend, 133 S. Ct. 1426 (2013), both of which involved interpreting Rule 23. The proper construction of these opinions, and the issues they address, could make their way back to the Court in the coming years, resulting in potentially significant developments in class action law. See, e.g., Julian W. Poon, Blaine H. Evanson, & Bradley J. Hamburger, "Emerging Issues in the Law of Class Certification," Bloomberg/BNA Class Action Litigation Report (Oct. 24, 2014), http://www.gibsondunn.com/wp-content/uploads/documents/publications/Poon-Emerging-Issues-in-the-Law-of-Class-Certification-10.24.2014.pdf.
The Court also might soon clarify the role of statistical evidence in establishing class-wide liability–a question touched on but not resolved definitively last Term in Tyson Foods, Inc. v. Bouaphakeo, 136 S. Ct. 1036 (2016), and that continues to spark confusion in the lower courts. Further, the Court may finally decide to address the persistent circuit split on whether Rule 23 has a distinct "ascertainability" requirement. See, e.g., Gibson Dunn 2016 Year-End Update on Class Actions (Feb. 1, 2017), http://www.gibsondunn.com/wp-content/uploads/documents/publications/2016-Year-End-Update-on-Class-Actions.pdf. Given that these issues have divided the lower courts, and that class action disputes often closely divide the Court, Judge Gorsuch’s vote on these issues could be critical to future developments in this area.
Finally, the Court recently granted certiorari in Bristol-Myers Squibb Co. v. Superior Court of California, San Francisco County, No. 16-466, which raises questions concerning the distinction between general and specific personal jurisdiction in mass tort cases. Judge Gorsuch’s Senate confirmation hearings begin on March 20, 2017, and if confirmed soon thereafter, he would be available to cast the ninth vote in Bristol-Myers–providing perhaps our first glimpse into his views on these issues as a sitting Justice.
Gibson Dunn’s lawyers 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 Appellate and Constitutional Law or Class Actions practice groups, or any of the following:
Appellate and Constitutional Law Group:
Theodore J. Boutrous, Jr. – Los Angeles (+1 213-229-7000, firstname.lastname@example.org)
Mark A. Perry – Washington, D.C. (+1 202-887-3667, email@example.com)
James C. Ho – Dallas (+1 214-698-3264, firstname.lastname@example.org)
Caitlin J. Halligan – New York (+1 212-351-4000, email@example.com)
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