The Supreme Court Preview, Part III: A Couple Spare Parts

2 November 2015 Dashboard Insights Blog

This is the third and final post in our series, “The Supreme Court Preview.” View the previous post here.

While the Court’s review of bedrock principles of class action litigation and the continuing struggle to enforce arbitration clauses  in the face of hostile state law are two important topics to watch, they are not the only issues the Court will address this term. Two cases before the Court this term deal with topics that might not be at the forefront of a general counsel’s mind, but that might nonetheless change the landscape of risks that in-house counsel have to manage.

Article III Standing

Article III standing is a bedrock principle of the judicial system. Part of the standing analysis is deceptively simple: if there is no injury, there is no standing, and therefore, no right to seek relief in federal court. Spokeo looks to resolve a fundamental question on what is required to establish standing—and while not a class action case itself, it could have a major impact on the viability of certain consumer class actions.

  • Spokeo, Inc. v. Robins, No. 13-1339: Spokeo raises the question of whether a plaintiff can assert standing based on nothing more than the violation of a federal statute—if Congress creates a statutory right, can a plaintiff establish standing based on alleging a violation of that right, despite being unable to show any other injury? The question has far-reaching implications for regulated industries potentially subject to consumer or employee claims for breaches of statutes where other harm may not be clear—for example, statutes concerning data privacy violations, or fair credit reporting issues (such as those presented in Spokeo itself). Combined with the class action cases above, Spokeo could have a major impact on the exposure businesses have to statutory claims.

RICO and Extraterritoriality

RICO can provide plaintiffs with a powerful tool to wield against corporate defendants. But what happens when the alleged conspiracy has little or no connection to U.S. soil? The Court is primed to answer that question this term.

  • RJR Nabisco, Inc. v. European Community, No. 15-138: The European Community and a group of 26 member nations brought RICO claims against RJR Nabisco, claiming that its cigarette business participated in a money-laundering operation for narcotics dealers in Europe and Russia. The district court dismissed the RICO claims, holding that RICO did not apply to conduct taking place and directed overseas. The Second Circuit reversed, holding that if the RICO predicate acts could be enforced as to extraterritorial conduct, then so too could civil RICO claims. RJR Nabisco will argue to the Supreme Court that this ruling is wrong—that RICO is separate from its predicate acts, and just because a predicate act can apply extraterritorially, the RICO claim cannot. How the Court rules may impact how foreign plaintiffs can apply RICO to bring claims for alleged conduct overseas. When the Treasury Department is busy asking Toyota why its trucks are popular with ISIS fighters, and two years after the Supreme Court decided another case filed against an automaker based on conduct taking place entirely overseas, it is not hard to see how the ruling in RJR Nabisco could affect the potential exposure of auto industry businesses to RICO claims.
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