Companies forced to rethink U.S. high court class action strategy

Tue May 17, 2016 7:46pm EDT
 
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By Lawrence Hurley

WASHINGTON (Reuters) - Lawyers for companies trying to fend off costly class action lawsuits are rethinking longstanding legal strategies after businesses lost two key U.S. Supreme Court cases as well as their staunchest supporter on the bench.

At the start of the court's term in October, the business community had reason to believe the justices would further pare back class action litigation after rulings spearheaded by conservative Justice Antonin Scalia favoring corporate defendants in prior years. But the term has defied expectations.

The justices ruled against businesses in two of the three class action cases they considered, with the sole case won by a corporate defendant coming in a narrow decision favoring online people-search company Spokeo Inc on Monday.

And Scalia died in February, depriving companies of their most vigorous ally on the court in such cases.

Lawyers representing employees and consumers now see the chance of a legal counterattack aimed at expanding the type of class action cases that courts will allow, with the possibility that the conservative Scalia will be replaced by a more liberal appointee.

Without Scalia, "it's statistically harder to get the votes you need" on the Supreme Court, said Warren Postman, a lawyer with the U.S. Chamber of Commerce's litigation arm. Lawyers for corporations will be "waiting to see how the court shapes up based on the next appointee," Postman added.

Scalia's seat may remain vacant well into 2017.

The Republican-led Senate has refused to act on Democratic President Barack Obama's nomination of centrist appellate judge Merrick Garland to replace Scalia. If Democratic front-runner Hillary Clinton wins the Nov. 8 presidential election and gets to replace Scalia, she may choose a more liberal nominee.   Continued...

 
The U.S. Supreme Court building is seen in Washington, March 16, 2016. REUTERS/Jim Bourg/Files