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Arguing that Article III’s “Case or Controversy” Requirement bars a plaintiff from suing in federal court for the technical violation of a statute that has not caused any concrete harm.
This case was a putative consumer class action pending before the United States Supreme Court on the merits. The plaintiff and putative class representative, Thomas Robins, sought statutory damages in federal court under the Fair Credit Reporting Act, 15 U.S.C. § 1681 et seq. (“FCRA”), for a technical violation of that statute that has not caused him any harm. (In particular, Robins alleged that the defendant, Spokeo, Inc., a website operator that provides users with information about other individuals, published false (but favorable!) information about him, such as by misstating his educational level and financial status.) FCRA permits recovery for the bare violation of a statutory right. The case thus raises a constitutional separation of powers issue long familiar to NELF: does Article III of the United States Constitution, which limits the federal judiciary’s jurisdiction to “cases” and “controversies,” confer standing on a plaintiff who alleges a violation of a federal statute but who does not allege any resulting injury? Can Congress create standing in the federal courts that otherwise would not exist by legislative fiat? The Supreme Court has interpreted Article III’s case-or-controversy requirement as mandating “injury in fact”—i.e., a “concrete” and “particularized” harm that is “actual or imminent.” Clapper v. Amnesty Internat’l USA, 133 S. Ct. 1138, 1147 (2013). Despite this clear constitutional requirement of injury in fact, the Ninth Circuit in this case denied the motion to dismiss of defendant Spokeo, Inc., a website operator that provides users with information about other individuals. The lower court concluded that, because FCRA allows a plaintiff to recover statutory damages for the bare violation of a statutory right, the statutory violation is itself an injury in fact sufficient to satisfy Article III. Notably, NELF briefed the same standing issue in the Supreme Court in 2011, in Edwards v. First American Corp., a case also arising from the Ninth Circuit. (And the Ninth Circuit in this case has based its decision primarily on its Edwards decision.) In Edwards, the Supreme Court granted certiorari but then dismissed the case without reaching the merits, on the basis that certiorari had been improvidently granted. While the Court did not explain its decision, it may have been due to the unique procedural posture of that case. Therefore, this pressing issue of Article III standing, in the absence of any actual injury, remains unresolved. (NELF has also briefed the same issue at the state statutory level, in particular under Mass. G. L. 93A before the Massachusetts Supreme Judicial Court. See Hershenow v. Enterprise Rent–A–Car Co., 445 Mass. 790 (2006)). Moreover, there are several federal statutes, like the ones at issue here and in Edwards (the Real Estate Settlement Procedures Act, 12 U.S.C. §§ 2601 et seq.), that allow plaintiffs to recover statutory damages (and reasonable attorney’s fees) without proving any concrete harm.* Therefore, the issue of Article III standing is of great significance to businesses in our region and the country as a whole. A business’s broad exposure to liability for statutory damages and attorney’s fees under these numerous laws is compounded by the class action mechanism, which is the procedural vehicle of choice for many consumers and employees (and their attorneys) suing under such statutes. Putative class members arguably need only show the bare, classwide violation of a common statutory right to obtain class certification. Businesses are thereby exposed to potential liability for vast, aggregated sums of statutory damages and high attorney’s fees, often resulting in a large settlement on a claim in which no class member has been injured. NELF, joined by Associated Industries of Massachusetts, argued, on behalf of Spokeo, that Article III requires dismissal of Robins’ complaint because it fails to allege any injury in fact. “Injury in law” under FCRA, based on the bare violation of a statutory right, cannot satisfy Article III’s requirement that the violation must cause some concrete harm. Congress cannot create an injury in fact. It can only provide a private remedy to redress an injury in fact. Therefore, the injury-in-fact requirement under Article III is not satisfied merely because Congress has authorized an award of statutory damages for the violation of a statutory right. A federal court must always exercise independent review of a federal statute, along with the allegations of a plaintiff’s complaint invoking that statute, to determine whether the plaintiff has identified a concrete harm resulting from the violation of a statute. In short, the Article III inquiry to determine an injury in fact “has nothing to do with the text of the statute relied upon.” Steel Co. v. Citizens for a Better Environment, 523 U.S. 83, 97 (1998). As the Court has emphasized, “[i]t is settled that Congress cannot erase Article III’s standing requirements by statutorily granting the right to sue to a plaintiff who would not otherwise have standing . . . .” Raines v. Byrd, 521 U.S. 811, 820 (1997). Simply put, statutory standing to sue in federal court does not automatically create constitutional standing under Article III. In reaching its decision, the Ninth Circuit and other federal circuit courts have apparently disregarded this key precedent and have also misinterpreted other Supreme Court precedent as equating statutory standing with Article III standing. Certiorari should therefore be granted to resolve the confusion among the lower courts on this crucial issue and clarify that injury in fact is not coextensive with injury in law. NELF initially filed an amicus brief supporting the defendant, Spokoe Inc’s petition for certiorari. When certiorari was granted in April, 2015, NELF filed an amicus brief on the merits in the case. On Monday, May 23, 2016, the Supreme Court issued its decision, agreeing with NELF, 6-2, that the plaintiff lacked standing because he had not demonstrated a concrete injury. Rather than dismissing the case, however, the Supreme Court remanded the case to the lower courts for a determination whether the plaintiff could demonstrate a concrete injury resulting from the alleged breach of the FCRA. Although the Supreme Court did not dismiss the case outright, as NELF had argued it should do, this is nonetheless this is a victory for the principles underlying NELF’s brief—namely separation of powers and the federal judiciary’s exclusive authority to determine whether standing exists. In short, Congress cannot create standing in federal court for the mere breach of a statutory requirement that Congress has enacted. *See, e.g., the Truth in Lending Act, 15 U.S.C. § 1640(a)(2)(B)); the Fair Debt Collection Practices Act, 15 U.S.C. § 1692k(a)(2)(B); the Telephone Consumer Protection Act, 47 U.S.C. § 227(b); the Employee Retirement Income Security Act, 29 U.S.C. § 1132(a)(2); and the Video Privacy Protection Act, 18 U.S.C. § 2710(c)(1). Supporting the Broad Sweep of ERISA Preemption with Regard to State Law Requirements
The issue before the United States Supreme Court in this case was whether the preemption provision of the Employee Retirement Income Security Act (“ERISA”) barred a State from imposing reporting requirements on ERISA plans beyond what ERISA itself requires. The case arose when Liberty Mutual instructed the third-party administrator of its ERISA plan in Vermont not to comply with a subpoena from the State requiring that certain health claims information be collected pursuant to Vermont law. Vermont, like a number of other States (including the other five in New England), has a statute that requires health care providers and health care payers in Vermont to provide claims data and related information to the State’s specialized health care database. The State says that it relies on the data collected to inform its health care policy decisions in a number of ways. As the basis for its refusal to comply with this Vermont law, Liberty Mutual argued, both in the suit it brought in the Vermont federal District court and, subsequently, in the Court of Appeals for the Second Circuit, that since ERISA requires certain forms of reporting by ERISA plans, any additional form of reporting imposed by State law is preempted under ERISA’s broad preemption provision. Liberty Mutual lost on summary judgment in the district court, but obtained a ruling its favor from the Court of Appeals in a split 2-1 decision. On June 29, 2015, the Supreme Court granted certiorari to hear the matter on the merits, and NELF filed an amicus brief in support of Liberty Mutual. In its brief, NELF addressed recent Supreme Court ERISA decisions in which the court adopts a “presumption against preemption,” and NELF argued that there exist several reasons for the Court to abandon or limit its use of that presumption. The presumption is usually traced back to Rice v. Santa Fe Elevator Corp., 331 U.S. 218, 230 (1947), where the Court adopted a working “assumption” that the “historic police powers of the States” should not be deemed to be superseded when “Congress legislate[s] . . . in [a] field which the States have traditionally occupied” unless such preemption was “the clear and manifest purpose of Congress.” As preemption has long been declared by the Court to be a matter of congressional intention, use of the presumption is especially inapt when one is dealing with an express preemption provision, as in ERISA. Such an express provision banishes the need for any kind of presumption because it clearly establishes the fact of Congress’s intention to preempt. From that point on, the actual language, purpose, and context of the statute provide much surer guidance to Congress’s intended meaning than could be given by any presumption unmoored to the statutory text. Not surprisingly, therefore, while the presumption formulated in Rice may have been adopted by the Court in order to assist it in discerning Congress’s intention, there has been no shortage of scholars who, however much they may disagree among themselves on other legal points, agree that the Court has signally failed to employ the presumption in a consistent methodological fashion. Moreover, use of the presumption in instances of express preemption is bedeviled by the problem of deciding how narrowly or expansively to define the relevant field of supposed traditional State regulation. Cf. Garcia v. San Antonio Metro. Transit Auth., 469 U.S. 528, 546-47 (1985) (“We therefore now reject, as unsound in principle and unworkable in practice, a rule of state immunity from federal regulation that turns on a judicial appraisal of whether a particular governmental function is ‘integral’ or ‘traditional.’”). The present case exemplified that problem, as the two sides contended over whether the field should be viewed broadly, with the emphasis falling on traditional State health and welfare concerns, or narrowly, with the focus on the novelty of the means by which data is to be collected under the Vermont law. This disagreement was mirrored in the differing views of the majority opinion and the dissent in the appeals court. Finally, because the judicially fashioned presumption against preemption necessarily works to narrow interpretation, it gives the safeguards of federalism a kind of double weight, beyond the weighting given by Congress when it composed the text of the statute. For these reasons, the “presumption against preemption” is an entirely inappropriate tool of statutory construction, and NELF urged the Court not to adopt it in this case when determining the scope of the express preemption provision found in ERISA. On March 1, 2016, the Supreme Court issued its decision in this case. The Court agreed with NELF, 6-2, holding that ERISA preempts Vermont’s statute as applied to ERISA plans. Supporting the Lower Court’s Decision that, in a Constructive Discharge Case Brought Under Title VII, the Administrative Filing Period Begins to Run With the Last Allegedly Wrongful Act By the Employer, Not When the Employee Chooses to Resign.
The question presented in this case was, in a claim of constructive discharge under Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq., does the administrative limitations period begin with the last discriminatory or retaliatory act of the employer before the employee resigns, or does it begin instead with the employee’s resignation? A constructive discharge claim can be understood as “an aggravated case” of discrimination or retaliation, in which the employee resigns and then alleges that the employer committed acts of discrimination or retaliation that were so severe that the employee reasonably felt compelled to quit. For employers, and thus of great importance to many of NELF’s supporters, the crucial difference between a constructive discharge claim and the underlying claim of discrimination or retaliation is remedial. The prevailing employee can recover not only for the employer’s discrimination or retaliation but also for his own act of resigning, as if it were a termination for damages purposes. Thus, the prevailing constructive-discharge plaintiff can recover back pay, and possibly front pay, along with any other (economic and non-economic) damages attributable to the employer’s discriminatory or retaliatory conduct, and punitive damages. An employee suing under Title VII for any claim must first exhaust his administrative remedies by filing or initiating contact with the Equal Employment Opportunity Commission (“EEOC”) within a specified period of time. Failure to do so will most likely bar the employee from suing in court. In particular, a private-sector employee must file his charge of discrimination or retaliation with the EEOC within 180 or 300 days “after the alleged unlawful employment practice occurred.” 42 U.S.C. § 2000e-5(e)(1). A federal employee, such as the employee in this case, must initiate contact with an EEOC counselor for potential settlement “within 45 days of the date of the matter alleged to be discriminatory or, in the case of personnel action, within 45 days of the effective date of the action.” 29 C.F.R. § 1614.105(a)(1) (emphasis added). The parties in this case have focused on the italicized language as the applicable regulatory provision. As with a statute of limitations, the purpose of this filing deadline is to require employees to act promptly in enforcing their rights, to protect employers from having to defend old claims, and to provide employers with certainty and repose that, after a date certain, they will not have to defend their actions in litigation. NELF argued, in its amicus brief on the merits, that in a claim for constructive discharge, as with most any other claim of discrimination or retaliation under Title VII, the administrative limitations period begins with the employer’s last discriminatory or retaliatory act, not with the employee’s resignation in response to that conduct. This is required by the plain language of the limitations provision applicable to federal-sector employees under the EEOC regulation, and by Title VII’s general provision applicable to both private-sector and state employees. And the Court has already interpreted Title VII’s limitations provision as focusing on the employer’s challenged conduct, not on the injurious consequences to the employee. Delaware State College v. Ricks, 449 U.S. 250 (1980). Ricks should apply here because the relevant language in the EEOC regulation is synonymous with Title VII’s limitations provision, and because neither provision treats constructive discharge claims differently from the “traditional” discrimination claim discussed in Ricks. Moreover, NELF pointed out that the Court has observed that Congress would have been well aware of constructive discharge claims when it enacted Title VII. Pennsylvania State Police v. Suders, 542 U.S. 129, 141-42 (2004). And yet Congress made no special allowance concerning the timeliness of constructive discharge claims. Therefore, Congress should be deemed to have rejected any differential treatment for the filing of constructive discharge claims by private-sector and state employees under Title VII. And the EEOC, in turn, should be deemed to have followed suit with its similarly worded provision for federal employees. Suders also held that, in a constructive discharge claim under Title VII, the employee’s decision to resign is not an action imputed to the employer. Instead, the resignation remains a separate act of the employee. Therefore, the resignation is not an “alleged unlawful employment practice” under Title VII or a “matter alleged to be discriminatory” under the EEOC regulation. While the employer may indeed be liable in damages for the employee’s resignation as if it were a termination, Suders carefully distinguished the employer’s monetary liability from any vicarious liability for the employee’s resignation. The employer is liable in damages for the employee’s reasonable resignation simply because the resignation is a foreseeable consequence of the employer’s proven wrongful conduct. After all, Suders explained that a constructive discharge claim is merely “an aggravated case” of discrimination or retaliation. A constructive discharge claim is a dependent claim that rides “piggyback” on the underlying claim of discrimination or retaliation. The only difference between a constructive discharge claim and the underlying claim of discrimination or retaliation is the severity of the employer’s wrongful conduct, and hence the applicable measure of damages. There is no reason, therefore, why the limitations period should be any different for the constructive discharge claim merely because the employee is seeking additional remedies that would not apply in the underlying claim of discrimination or retaliation. Finally, Suders teaches that a constructive discharge claim is an objective inquiry, asking whether the employee’s resignation was a reasonable response to the employer’s challenged conduct. The facts necessary to determine such reasonableness are generally established once the employer has taken official action against the employee, or when a supervisor or co-worker has committed the last in a series of related acts of harassment against the employee before he resigns. At that moment in time, the employee is most likely on notice that resignation may be the only reasonable response to the employer’s allegedly severe conduct. Therefore, this inquiry focuses on the severity of the employer’s disputed conduct. It does not concern the particular timing of each employee’s resignation. Accordingly, the employer’s conduct should begin the limitations period, not the employee’s subsequent resignation in response to that conduct. On May 23, 2016, the Supreme Court issued its decision. Disagreeing with NELF’s conclusion, the Court held that because “the matter alleged to be discriminatory” in a constructive discharge claim is an employee’s resignation, the limitations period for such actions begins running only after an employee resigns. Justice Alito filed a concurring opinion in which, while he agreed with the Court’s conclusion, he pointed out the problems with the majority’s conclusion and suggested a slightly different framework of analysis. Justice Thomas was the sole dissenter. Opposing Plaintiff’s Argument That Her Copying and Dissemination of Her Law Firm Employer’s Sensitive and/or Confidential Documents In Order to Advance Her Discrimination Claim Constituted “Protected Activity” Such That Her Termination for Such Conduct Constituted Unlawful Retaliation.
The question presented in this matter before Massachusetts’s highest court was whether an employer may lawfully terminate an employee who violated the employer's confidentiality policies to gather evidence in support of a discrimination claim. The Massachusetts anti-discrimination statute, Mass. G.L. c. 151B, § 4(4), declares it an unlawful practice for any employer "to discharge, expel or otherwise discriminate against any person because he has opposed any practices forbidden under this chapter or because he has filed a complaint, testified or assisted in any proceeding" before the Massachusetts Commission Against Discrimination ("MCAD"). Mass. G.L. c. 151B § 4(4) (2015) (emphasis added). Under this and other anti-retaliation provisions like it, courts have identified certain employee actions as "protected activities," declaring that adverse employment actions with a causal connection to such protected activities establish at least a prima facie case of retaliation. In this case, Mintz, Levin, Cohn, Ferris, Glovsky & Popeo, P.C. ("Mintz Levin") terminated Verdrager, an associate attorney, for violating its computer use and confidentiality policies, when it discovered she had secretly copied internal documents from its computer systems to support a gender discrimination claim that she had made against the firm. It turned out that, over the course of a year, Verdrager had accessed, copied, and transmitted a multitude of her employer's confidential and sensitive internal documents, including some arguably subject to protection under the attorney-client privilege. Verdrager, who lost on summary judgment in the Superior Court, contends in this appeal that, when it fired her for violating the firm’s policies, Mintz Levin unlawfully retaliated against her for engaging in "protected activity" in support of her discrimination claims. In connection with its consideration of Verdrager’s appeal, the Massachusetts Court issued a call for amicus briefs on the following question: Whether, and in what circumstances, an employee may engage in so-called self-help discovery during the course of her employment, by collecting and copying documents of the employer that she intends to use in a discrimination case against the employer; whether, and to what extent, an employee who obtains documents in such a fashion is engaged in protected activity for purposes of G. L. c. 151B, such that she may not be subject to adverse employment action as a consequence. In answering this question, NELF’s amicus brief in support of the employer, Mintz Levin, made two principal arguments. First NELF argued that, based on the clear language of the Massachusetts employment discrimination statute, “self-help” discover is simply not a protected activity. The statute, on its face, restricts an employee’s protected activity only to three categories of conduct: opposing discriminatory practices with one’s employer (such as by informal complaints or use of an employer’s grievance procedures); the formal filing of a charge of discrimination; or participation in an administrative or judicial proceeding. An unauthorized breach of an employer’s confidentiality policies to obtain confidential documents is simply not covered. Second, NELF argued that, even if the type of activity at issue here might be protected in other circumstances, in this case the deliberate and unnecessary violation of her employer’s legitimate confidentiality polices robs what the plaintiff did of any protection. Put another way, the employee’s actions were not reasonable in the circumstances, given the firm’s written polices and even its ethical duty, as a law firm, maintain the strict confidentiality of its internal documents. In a disappointing decision issued on May 31, 2016, the SJC reversed the Superior Court’s summary judgment in Mintz Levin’s favor and, finding that the defendant was not entitled to summary judgment, remanded the case to the Superior Court for further proceedings, consistent with the SJC’s decision, on the plaintiff’s G.L. c. 151B claims. With regard to the amicus question addressed by NELF, the Court noted that it did not need to address the question “as it is relevant only to the plaintiff’s claim that her termination was retaliatory, and we have determined that the defendants are not entitled to summary judgment on that issue.” However, to provide guidance to the trial court, the Court did address the issue, which was one of first impression in Massachusetts, and, disagreeing with NELF’s first argument that c. 151B on its face did not protect self-help discovery, ruled that “[t]aking into consideration the interests at stake and the views of other courts that have addressed the matter, we conclude that such conduct may in certain circumstances constitute protected activity under [G.L. c. 151B], but only if the employee’s actions are reasonable in the totality of the circumstances.” In this connection, the Court emphasized that the seriousness of this test, and adopted as a non-exhaustive framework the seven factors suggested by the court in Quinlan v. Curtiss-Wright Corp., 204 N.J. 2329 (2010). With regard to NELF’s second argument, that Verdrager’s actions were not protected activity because they were not reasonable, the SJC offered no opinion, preferring for that to be decided by the Superior Court at trial. Arguing that the Housing Appeals Committee Did Not Exceed Its Authority by Supposedly “Invalidating” Town Bylaws and, In the Process, Failing to Presume their Validity While Also Misallocating to the Town the Burden of Proof as to the Issue.
In 1955, in order to facilitate the construction of affordable housing, Massachusetts enacted General Law c. 40B, which enables a developer to obtain a single, comprehensive permit for the construction of any project that includes affordable housing units. Should a town deny the application for such a permit, the developer may appeal to the state-wide Housing Appeals Committee (HAC). The law arose in response to towns’ use of local laws to exclude affordable housing from their locale. In the present case, the developer, Hollis Hills LLC, sought a comprehensive permit, believing the sewer fees for its project in Lunenburg would be about $17,000 under applicable town bylaws, only to discover later that the town would invoke different bylaws, under which the fees soared to about $1.75 million. Against its will, Lunenburg had previously been required by the HAC to grant Hollis Hills a comprehensive permit (see Zoning Board of Appeals of Lunenburg v. Housing Appeals Committee, 464 Mass. 38 (2013)), with the issue of sewer fees reserved for later determination. Subsequently, when reviewing the sewer fees at issue, the HAC ruled, after taking extensive evidence, that the bylaws relied on by the town for setting the fees so high had not even been enacted at the relevant time (i.e., the date the permit application was submitted) and therefore they could not be used to calculate the fees applicable to the project. The town appealed to the Superior Court, arguing that the HAC was wrong about the relevant time, had erroneously placed the burden on the town to prove what bylaws were in effect at that time, and had exceeded its powers by, supposedly, “invalidating” the town’s preferred set of sewer-fee bylaws, whose validity, so the town claimed, should have been presumed by the HAC. The court dismissed the appeal on grounds that the town had failed to preserve these issues below. The town then appealed to the Appeals Court, where it repeated its arguments. NELF filed a brief supporting Hollis Hills and asking the Appeals Court to affirm the judgment below, albeit on substantive grounds, rather than on the procedural grounds cited by the trial judge. NELF pointed out that, under statute and case law, Massachusetts courts and adjudicatory agencies like the HAC are not permitted to take judicial notice of either the text or the effective date of local laws. In short, what local law governs is a question of fact that must be proven by the proponent, just as any other facts a party wishes to establish. The burden of proof was therefore properly placed on the town by the HAC, NELF contended, and the HAC’s ruling that the town had failed to carry its burden was therefore not an “invalidation” of the bylaws. NELF then demonstrated that the principle that the validity of laws is to be presumed applies only when there is a direct judicial challenge to a law’s validity, as occurred in all ten of the cases the town relied on to argue its point. Here, by contrast, the HAC was dealing with the antecedent evidentiary problem of determining what legal text counts as the apparently applicable law in the first place. NELF concluded its brief by discussing the aims of the comprehensive permit law and how the past use of local laws to exclude projects like Hollis Hills makes it imperative that a permit not be subject to local laws enacted after the developer submits its application. On March 3, 2016, the Massachusetts Appeals Court, agreeing with NELF, affirmed the judgment below. Addressing the issue briefed by NELF, the court wrote: “Furthermore, the HAC did not purport to invalidate any of the town’s regulations; it decided simply that in this case, other than a charge of $125 per unit, no validly adopted sewer charge applies to the project. That this determination required the HAC to consider whether the town validly had adopted fees does not mean the HAC ‘invalidated’ any town regulations.” |
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