Smith v. Bayer: Blurring Ideological Expectations

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Following on the Court’s relatively pro-class action decision in Taylor v. Sturgill, class action advocates are hoping for another victory in Smith v. Bayer, 593 F.3d 716 (8th Cir.), cert. granted, 131 S. Ct. 61 (U.S. Sept. 28, 2010) (No. 09-1205). However, two justices thought to be favorably disposed toward the plaintiffs gave indications at the January 11th oral argument that they are perhaps not prepared to embrace the relatively formalistic approach that would be required in order to prevent the denial of class certification in a federal district court from being res judicata as to a substantively identical class action in state court.

First, in response to the familiar argument that class actions are the only way many consumer claims will ever be litigated because of the prohibitive cost of individual actions, Justice Sotomayor abruptly cut off plaintiffs’ counsel and said, “Actually not true.” She elaborated with a critique incongruous with the expectation that she would be a reliably pro-class action vote: “The issue is how much money the lawyers are going to receive, really, because plaintiff gets . . . a statutory violation amount, which is going to be the same whether it’s in a class action or an individual action, so it’s really not the plaintiff who stands to win.” Later in the oral argument, Justice Breyer posed a challenging hypothetical, in which he suggested “if . . . an intervenor, joins a litigation late, and there have been a lot of procedural rulings, . . . that intervenor takes the case as he finds it. . . . [I]s your client analogous to that person who joins litigation late?” Against the well-established rule that an intervenor is not entitled to a procedural tabula rasa, the plaintiffs’ attorney struggled to explain why a subsequent state court class representative would be entitled to a full procedural reprise of class certification, whereas an intervenor is not even entitled to a full complement of discovery.

Oral argument is a notoriously unreliable basis on which to predict Supreme Court outcomes, and justices will frequently play against type to co-opt arguments that they oppose. As we enter an era of increasing federal dominion over class actions, the decisions in several key cases this term (Smith v. Bayer, Dukes v. Wal-Mart and AT&T v. Concepcion) could change the class action landscape considerably.

The Smith v. Bayer oral argument transcript is available here.