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SUPREME COURT DOCKET REPORT

Mayer Brown's Supreme Court and Appellate Practice Group distributes a Docket Report whenever the Supreme Court grants certiorari in a case of interest to the business community. We also email the Docket Report to our subscribed members and if you don't already subscribe to the Docket Report and would like to, please click here.

October Term 2010 - December 6, 2010

Today the Supreme Court granted certiorari in two cases of interest to the business community:


Class Certification—Rule 23(b)

To be certified, a class must meet all the requirements of Federal Rule of Civil Procedure 23(a)—numerosity, commonality, typicality, and adequacy—and at least one of the three requirements set forth in Rule 23(b). Rule 23(b)(2) allows certification when “final injunctive relief or declaratory relief is appropriate respecting the class as a whole.” But Rule 23(b)(2) does not expressly authorize class actions seeking monetary relief, and, according to the advisory committee notes, “does not extend to cases in which the appropriate final relief relates exclusively or predominantly to money damages.” Relying on the text of Rule 23(b)(2) and the accompanying advisory committee note, most courts have held that class actions seeking primarily monetary relief must be certified, if at all, under Rule 23(b)(3), which requires the plaintiff to establish that common issues predominate over individual ones and that a class action would be superior to other means for resolving the dispute. Today the Supreme Court granted certiorari in Wal-Mart Stores, Inc. v. Dukes, No. 10-277, to address the requirements for class certification under Rule 23(b)(2). The question presented is whether claims for monetary relief may be certified under Rule 23(b)(2), and, if so, under what circumstances. The Court further directed the parties to brief the question whether the particular class certification ordered under Rule 23(b)(2) was consistent with the four requirements of Rule 23(a).

This case is of tremendous importance to businesses nationwide, as demonstrated by the large number of amicus briefs filed in support of the petition. Class certification is a critical stage in any class action, and the scope of Rule 23(b)(2) can affect class action litigation in virtually any context. If the Court affirms a permissive approach to certifying claims for monetary relief under Rule 23(b)(2), then certification of class actions seeking monetary damages will become easier and businesses will face greatly increased exposure to class action liability. Wholly apart from its broader significance, the case is of interest in its own right, as the Ninth Circuit’s decision below certified a class of historic size against the world’s largest private employer, with potential damages in the billions of dollars.

In 2001, six plaintiffs brought a class action in a California federal district court alleging that Wal-Mart had engaged in company-wide gender discrimination in violation of Title VII of the 1964 Civil Rights Act. The plaintiffs asserted that women employed in Wal-Mart stores around the country received less pay and fewer promotions than men in comparable positions. The district court certified a class that encompassed the claims of up to 1.5 million female employees seeking injunctive and declaratory relief and back pay. After a panel of the Ninth Circuit affirmed, the Ninth Circuit granted en banc review and—as described in an earlier Mayer Brown client alert—ultimately affirmed by a vote of 6-5.

The Ninth Circuit concluded that the plaintiffs’ claims for back pay—despite possibly totaling billions of dollars—did not predominate over their requests for injunctive and declaratory relief. In so holding, the Ninth Circuit announced a new standard for determining when claims for monetary relief predominate over claims for injunctive relief such that a class may be certified under the more lenient Rule 23(b)(2) standard. According to the Ninth Circuit, a class may be certified under Rule 23(b)(2) if it seeks “monetary damages that are not ‘superior [in] strength, influence, or authority’ to injunctive and declaratory relief.” 603 F.3d at 616. To determine whether that standard is met in a given case, the Ninth Circuit directed consideration of four factors, including whether the request for monetary relief introduces new and significant legal or factual issues, whether it requires individualized hearings, and whether its size and nature raise due process and manageability concerns.

The Ninth Circuit’s en banc decision created a three-way circuit split, between the Ninth Circuit; the Second Circuit, which determines whether monetary relief predominates by examining, among other things, whether reasonable plaintiffs would bring the suit “even in the absence of a possible monetary recovery” (Robinson v. Metro-North Commuter R.R., 267 F.3d 147, 164 (2d Cir. 2001)); and several other circuits, which hold that monetary relief predominates “unless it is incidental to requested injunctive or declaratory relief” (Allison v. Citgo Petroleum Group, 151 F.3d 402, 415 (5th Cir. 1998)).

Absent extensions, amicus briefs in support of the petitioner will be due on January 27, 2011, and amicus briefs in support of the respondents will be due on March 1, 2011. Any questions about this case should be directed to Evan Tager (+1 202 263 3240) or Archis Parasharami (+1 202 263 3328) in our DC office.


Emissions of Greenhouse Gases—Federal Common Law Nuisance Claims

Today the Supreme Court granted certiorari in American Electric Power Co. v. Connecticut, No. 10-174, to decide whether states and private parties can seek to impose emissions caps on greenhouse gases based on public nuisance claims under federal common law.

The Court’s resolution of this issue is likely to have significant consequences for utilities and other industries that emit greenhouse gases. If the Court allows plaintiffs to limit greenhouse gas emissions through common law tort claims, the scope of industry liability and court-mandated abatement remedies could be substantially expanded.

The case arose when eight states, three nonprofit land trusts, and a municipality brought suit to hold four private utilities and the Tennessee Valley Authority jointly and severally liable for emitting carbon dioxide, which, the plaintiffs allege, creates a public nuisance by contributing to global warming. Plaintiffs sought injunctive relief to reduce the defendants’ carbon dioxide emission levels. Applying the criteria set forth in Baker v. Carr, 369 U.S. 186 (1962), the district court dismissed the suit as presenting non-justiciable political questions.

In the decision below, a two-judge panel of the Second Circuit reversed and permitted the plaintiffs’ suit to proceed. Describing the case as “an ordinary tort suit,” the Second Circuit held that the plaintiffs’ claims did not involve political questions because they could be decided based on common law nuisance principles “‘constitutionally committed’” to the judiciary. 582 F.3d at 331, 325. The court further held that the plaintiffs’ allegations were sufficient at the pleading stage to establish standing and to state a claim under the federal common law of nuisance.

The Supreme Court granted certiorari on three questions. The first is whether states and private parties have standing to seek emissions caps based on defendants’ alleged contribution to global climate change. The defendants contend that the plaintiffs do not have standing to assert claims for damages resulting from climate change because the alleged injury is not traceable to the defendants and because it would not be redressed by imposing emission caps on them. The plaintiffs argue, and the Second Circuit held, that standing is conferred by plaintiffs’ allegation that the defendants are contributing to a common-law nuisance.

The second question is whether a cause of action to cap carbon dioxide emissions can be implied under federal common law. The defendants contend that the Clean Air Act establishes a comprehensive statutory scheme that displaces any federal common law nuisance claim seeking to enjoin the emissions of greenhouse gases. By contrast, the plaintiffs argue, and the Second Circuit held, that the Clean Air Act does not displace their common-law claims unless and until the Environmental Protection Agency takes regulatory action to control such emissions.

The third question the Supreme Court will decide is whether the plaintiffs’ suit presents a non-justiciable political question. Arguing that it is impossible to balance the potential risks of climate change against the socioeconomic utility of defendants’ conduct using “judicially discoverable and manageable standards” and without “initial policy determination[s] of a kind clearly for nonjudicial discretion” (Baker, 369 U.S. at 217), the defendants contend that determining a reasonable level of carbon dioxide emissions involves the type of policy trade-offs specifically reserved for the political branches, while the plaintiffs contend, and the Second Circuit agreed, that common law nuisance claims such as those asserted in plaintiffs’ suit have always been considered justiciable.

Justice Sotomayor has recused herself in American Electric because prior to her nomination in 2009 she served on the Second Circuit panel that heard the case (although she did not participate in the ruling itself). As a result, the case will be decided by only eight Justices. If the Justices are ultimately divided 4-4, the lower court decision will be affirmed.

Absent extensions, amicus briefs in support of the petitioners will be due on January 27, 2011, and amicus briefs in support of the respondents will be due on March 1, 2011. Any questions about this case should be directed to Tim Bishop (+1 312 701 7829) in our Chicago office.


Mayer Brown's Supreme Court & Appellate practice distributes a Docket Report whenever the Supreme Court grants certiorari in a case of interest to the business community and distributes a Docket Report-Decision Alert whenever the Court decides such a case. We hope you find the Docket Reports and Decision Alerts useful, and welcome feedback on them (which should be addressed to Andrew Tauber, their general editor, at atauber@mayerbrown.com or +1 202 263 3324).

Feel free to forward this message to anyone who you believe might be interested in the Docket Report.

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Mayer Brown's Supreme Court & Appellate practice distributes a Docket Report whenever the Supreme Court grants certiorari in a case of interest to the business community and distributes a Docket Report-Decision Alert whenever the Court decides such a case. We hope you find the Docket Reports and Decision Alerts useful, and welcome feedback on them (which should be addressed to Andrew Tauber, their general editor, at atauber@mayerbrown.com or +1 202 263 3324).

Mayer Brown Supreme Court Docket Reports provide information and comments on legal issues and developments of interest to our clients and friends. They are not a comprehensive treatment of the subject matter covered and are not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed. 



 
 
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