The U.S. Supreme Court has issued numerous decisions over the past decade addressing arbitration agreements.  In one of the Roberts Court’s first forays into the arbitration arena, the Court held that class or collective arbitration is only available where the parties have affirmatively agreed to resolve their disputes through such procedures.  But who determines whether the parties have so agreed — a court or an arbitrator?
The U.S. Supreme Court to Address Whether Counterclaim Defendants Can Remove Class Action Claims Under CAFA
On September 27, 2018, the United States Supreme Court granted the petition for writ for certiorari in Home Depot U.S.A., Inc. v. Jackson, No. 17-1471 (“Home Depot”), to address two issues: (1) whether, under the federal Class Action Fairness Act (“CAFA”), a third-party defendant can remove to federal court class action claims that are brought as counterclaims by the defendant/third-party plaintiff; and (2) whether the Supreme Court’s holding in Shamrock Oil & Gas Co. v. Sheets  — that an original plaintiff may not remove a counterclaim against it — extends to third-party counterclaim defendants.  Resolution of these issues by the Supreme Court may have significant implications for any counterclaim or third-party defendant (and possibly any counterclaim defendant) seeking to remove a class action or a mass action from state to federal court.
On behalf of the American Bankers Association and state bankers associations across the country, K&L Gates partner Paul F. Hancock and associate Olivia Kelman crafted a comment that was submitted to the U.S. Department of Housing and Urban Development (“HUD” or “Department”) on August 20, 2018, in support of reopening rulemaking regarding the Department’s implementation of the Fair Housing Act’s disparate impact standard. On June 20, 2018, HUD issued an advance notice of proposed rulemaking that sought public comment on possible amendments to the Department’s 2013 final disparate impact rule in light of the U.S. Supreme Court’s decision in Texas Department of Housing and Community Affairs v. Inclusive Communities Project, Inc., 135 S. Ct. 2507 (2015). In that decision, the Supreme Court articulated the standards for, and the constitutional limitations on, disparate impact claims under the Fair Housing Act. The comment explains that the rule should be amended because it adopts standards that are inconsistent with Supreme Court precedent, fails to provide much needed guidance to entities seeking to comply with the law, and is therefore outdated and ineffective. A copy of the comment is available here.
On June 28, 2018, California Governor Jerry Brown signed into law the California Consumer Privacy Act of 2018 (“CCPA”). CCPA grants new privacy rights to Californian residents and applies a notice and consent framework to most businesses operating in California that collect personal information from those residents.
Recent activity in Congress suggests that the return from the July 4th recess will see a continued push to reform the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (“Dodd-Frank”) before year’s end. This alert provides an overview of the current state of play and the most likely outcome.
Should a Massachusetts homeowner be allowed to claim a homestead exemption in a principal residence that is also used for business or other commercial purposes? Answering this question several years ago as a matter of first impression, the U.S. Bankruptcy Court for the District of Massachusetts adopted a fact-intensive, case-by-case inquiry into the “predominant use” of the property. The predominant use test was developed to address the point at which an owner forfeits homestead protection in the pursuit of commercial activity. The inquiry recognizes the ubiquity of the home office or boarder in modern residences. Bankruptcy Judge Elizabeth Katz’s recent opinion in In re Shove takes a fresh look at the Massachusetts Homestead Statute and rejects the predominant use inquiry as unnecessary and, in some cases, unduly burdensome on the homesteader.
On Tuesday, June 12, 2018, a Texas federal judge denied a joint request from the Consumer Financial Protection Bureau (“CFPB”) and two payday-lending trade groups to stay the August 2019 deadline for industry compliance with the Payday Loan Rule (the “Rule”). The decision was issued in Community Financial Services Association of America, Ltd., v. Consumer Financial Protection Bureau, No. 1:18-cv-295-LY, an action that was filed in April 2018 by the trade groups against the CFPB, seeking to invalidate the Rule as arbitrary and capricious in violation of the Administrative Procedures Act (“APA”), among other things. (For more about the litigation, click here.) In late May 2018, the plaintiff trade groups and the defendant CFPB jointly asked the Court to stay the Rule’s compliance deadline, but the Court’s decision Tuesday quickly and summarily rejected that request. The Court stayed only the litigation, leaving August 2019 as the operative date for industry participants to comply with the Rule.
The U.S. Supreme Court has ruled that a plaintiff cannot file a class action outside the applicable statute of limitations merely because an unsuccessful prior class action tolled the limitations period for individual claims. In China Agritech v. Resh, the Court held that its prior jurisprudence “does not permit the maintenance of a follow-on class action past expiration of the statute of limitations.” Rather, that jurisprudence only tolls the statute of limitations for unnamed class members to intervene in the action “individually or file individual claims if the class fails.” In reaching this conclusion, the Court recognized that “[t]he Federal Rules [of Civil Procedure] provide a range of mechanisms to aid courts in” overseeing complex litigation, such as where individual claims are added on after a denial of class certification. But, critically, “[w]hat the Rules do not offer is a reason to permit plaintiffs to exhume failed class actions by filing new, untimely class claims.”
In Stolt-Nielsen S.A. v. AnimalFeeds International Corp.,  the U.S. Supreme Court held that “a party may not be compelled” under the Federal Arbitration Act (“FAA”) “to submit to class arbitration unless there is a contractual basis for concluding that the party agreed to do so.”  The Stolt-Nielsen Court found that an agreement that is silent on the availability of class arbitration does not provide sufficient evidence that the parties intended to submit to class, as opposed to individual, arbitration.  The Court, however, left open the question of what level of specificity an agreement must contain to demonstrate the parties’ consent to submit a dispute to class arbitration. 
In Dieffenbach v. Barnes & Noble, Inc., the Seventh Circuit allowed a data breach class action to survive the pleadings stage, including a challenge to the plaintiffs’ standing. At the same time, the Court indicated that the plaintiffs may have a tough time proving their claims on the merits or establishing that class certification is warranted. That warning may put the brakes on this action as well as others brought on a similar theory of liability.