Supreme Court Update: Genesis Healthcare Corp. v. Symczyk (11-1059), Kiobel v. Royal Dutch Petroleum Co. (10-1491), and Boyer v. Louisiana (11-9953)

April 30, 2013 Supreme Court Update

Greetings, Court fans!

We're back to bring you Genesis Healthcare Corp. v. Symczyk (11-1059), on whether a FLSA collective action can proceed after the named plaintiff's claim is rendered moot, Kiobel v. Royal Dutch Petroleum Co. (10-1491), in which the Court held that the Alien Tort Statute does not have extraterritorial reach, and Boyer v. Louisiana (11-9953), in which the Court dismissed a speedy trial petition as improvidently granted.

Genesis Healthcare Corp. v. Symczyk (11-1059) resulted in a 5-4 split that, depending upon your vantage point, marks either a major victory for the defense collective action bar, or a complete non-event. Here are the facts: An employee (Symczyk) filed an action on behalf of herself and other "similarly situated" individuals under the Fair Labor Standards Act of 1938 (FLSA), which has provisions for opt-in "collective actions," which are distinct from the opt-out damages class actions provisions in Rule 23. The defendant, Genesis Healthcare, filed a Rule 68 offer of judgment that fully satisfied Symczyk's individual claim. Symczyk did not accept the offer. End of story? No, or it would be a dull tale indeed. Genesis then asked the court to dismiss the case as moot on the basis that its offer of judgment had completely satisfied Symczyk's individual claim and therefore she no longer had any personal stake in the outcome. The trial court agreed and dismissed the case. On appeal, the Third Circuit agreed that, regardless of whether Symczyk accepted the offer of judgment, under its existing precedent, her individual claim was moot. However, the Third Circuit reversed the district court's conclusion as to the collective action, reasoning that the collective action framework of FLSA would be thwarted if defendants were permitted to "pick off" named plaintiffs with strategic Rule 68 offers.

The majority, led by Justice Thomas, reversed that part of the Third Circuit's ruling. Assuming that the unaccepted Rule 68 offer here mooted Symczyk's claim (an issue the Court found was not properly before it since Symczyk had not filed a cross-petition for cert and had, according to the majority, waived the issue below), the Court found that the collective action also had to be dismissed. The Court first distinguished prior cases in the Rule 23 context, where it had found that a class action was not rendered moot when a named plaintiff's claim became moot only after a decision certifying a class or incorrectly denying certification of a class. In either situation, the named plaintiff's case remained live at the point where the class did or should have gained "independent legal status." The Court distinguished this case in two ways. First, FLSA is different from Rule 23 because it is an opt-in collective action and thus, no independent legal status exists when a collective action is conditionally certified – the only result is the sending of a letter. Second, here, Symczyk had not yet moved for conditional certification at the time her claim became moot. (While the Court mentioned the differences in Rule 23 and FLSA, it is not clear why the Court's reasoning wouldn't apply to Rule 23 class actions before a certification motion is made since no entity with "independent legal status" would yet exist. Indeed, the Court noted that the one decision stating that Rule 23 would be frustrated by allowing defendants to pick off named plaintiffs did so "in dicta" and might no longer be good law in light of subsequent decisions.) The majority also found that this case did not fall within the line of authority holding that an "inherently transitory" class action could go forward even upon the termination of the named plaintiff's individual claim. This exception "has invariably focused on the fleeting nature of the challenged conduct giving rise to the claim, not on the defendant's litigation strategy." This exception is designed for situations seeking injunctive relief for fleeting conduct, such as allegedly improper pretrial detention policy, not for damages actions, which remain live until settled or judicially resolved. Accordingly, Symczyk had no personal interest in representing the putative, unknown class members, nor any other interest that would preserve her suit from mootness, and it was properly dismissed.

Justice Kagan authored the dissent, proving that she is every bit Scalia's equal when it comes to blistering, yet witty, prose. "Feel free to relegate the majority's decision to the furthest reaches of your mind," she writes, as the "situation it addresses should never arise again." Why? Because an unaccepted Rule 68 offer of judgment can't moot anything. By its terms the Rule states that an unaccepted offer "is considered withdrawn" and is to be considered for no purpose other than allocating costs. No matter how good the offer was, when Symczyk didn't accept it, it became a nullity and Symczyk had exactly the same interest in her individual claim that she possessed before the offer. "Her claim was not moot, and the District Court could not send her away empty-handed. So a friendly suggestion to the Third Circuit: Rethink your mootness-by-unaccepted offer theory. And a note to all other courts of appeals: Don't try this at home." As Justice Kagan points out, the majority doesn't hold otherwise. Instead, it merely sidesteps the issue to "reach the oh-so-much-more-interesting question relating to her proposed collective action." In the dissent's view, the critical issue of the mootness of Symczyk's claim was properly brought to the Court in the question presented and, even if there were waiver by Symczyk, the Court should not make "ridiculous" assumptions just because a party failed to challenge established Circuit precedent below. The end result: "The majority's decision is fit for nothing: Aside from getting this case wrong, it serves only to address a make-believe problem." (Perhaps, or perhaps the majority – which has certainly seen fit to DIG an ill-fitting case when it wanted to – has taken a substantial step toward allowing defendants to "pick off" named plaintiffs in both the collective and class action setting with Rule 68 offers. Only time will tell.)

In Kiobel v. Royal Dutch Petroleum Co. (10-1491), the Court took up the reach of the Alien Tort Statute ("ATS"), a law that has been on the books since 1789. The ATS provides that "[t]he district courts shall have original jurisdiction of any civil action by an alien for a tort only, committed in violation of the law of nations or a treaty of the United States." Nigerian nationals now living in the United States invoked the statute to sue Dutch, British, and Nigerian corporations, which the petitioners alleged had induced and abetted Nigerian military and police forces to commit an array of atrocities in Nigeria throughout the early 1990s after residents protested the environmental effects of the companies' activities. The petitioners contended that the corporations' actions violated the law of nations. After the district court dismissed several claims, the Second Circuit, considering an interlocutory appeal, dismissed the entire complaint, concluding that the law of nations does not recognize corporate liability.

The Court affirmed on alternate grounds in an opinion authored by the Chief and joined by Justices Scalia, Kennedy, Thomas, and Alito. The ATS grants jurisdiction to federal district courts but creates no cause of action on its own. It is "best read as having been enacted on the understanding that the common law would provide a cause of action for [a] modest number of international law violations." To the majority, the question was not whether the petitioners stated a claim under the ATS, but whether such a claim could reach conduct occurring in sovereign foreign territory. And the answer hinged on a canon known as the presumption against extraterritorial application, which provides that "[w]hen a statute gives no clear indication of an extraterritorial application, it has none." Although the Court has typically invoked the canon when considering laws regulating conduct, it determined that the canon applies equally to jurisdictional statutes like the ATS. In fact, according to the majority, "the danger of unwarranted judicial interference in the conduct of foreign policy is magnified in the context of the ATS, because the question is not what Congress has done but instead what courts may do." The petitioners countered that even if the presumption applied, the text, history, and purposes of the ATS – and particularly what petitioners considered the obvious point that Congress in 1789 intended the law to apply to pirates operating on the high seas – rebutted the presumption here. The Court wasn't persuaded – the ATS could not reach conduct occurring overseas absent a "clear indication of extraterritoriality." Pirates notwithstanding, the Court found none.

Justice Kennedy filed a separate, one paragraph concurrence noting that the Court had left open several questions about the reach of the ATS, and that the application of the presumption against extraterritoriality in other contexts – for example, to claims arising under the Torture Victim Protection Act – would be resolved another day. Justice Alito, joined by Justice Thomas, also concurred, explaining that he would have gone farther than the majority did. Precedent explains that the presumption against extraterritoriality applies unless the event that was "the focus of congressional concern" in enacting the statute occurred in the United States. When Congress enacted the ATS, its "concern" was the "three principal offenses against the law of nations" – violation of safe conducts, infringement of the rights of ambassadors, and piracy. In Sosa v. Alvarez-Machain (2004), the Court held, therefore, that "federal courts should not recognize private claims under federal common law for violations of any international law norm with less definite content and acceptance among civilized nations than the historical paradigms familiar when [the ATS] was enacted." Justice Alito stressed the importance of these requirements of "definiteness and acceptance among civilized nations."

Finally, Justice Breyer – joined by Justices Ginsburg, Sotomayor, and Kagan – concurred in the judgment but disagreed with the majority's reasoning. The dissenters would not have invoked the presumption against extraterritoriality, but instead – relying on Sosa, history, and the example of other nations – would find jurisdiction under the ATS as long as "(1) the alleged tort occurs on American soil, (2) the defendant is an American national, or (3) the defendant's conduct substantially and adversely affects an important American national interest, and that includes a distinct interest in preventing the United States from becoming a safe harbor . . . for a torturer or other common enemy of mankind." In this case, Justice Breyer concluded, the parties and conduct lacked sufficient ties to the United States to establish jurisdiction under the ATS.

The Court also checked one more case off its docket, without rendering a decision, dismissing the writ as improvidently granted (DIG'ing) in Boyer v. Louisiana (11-9953). The Court took up the case to decide whether a delay in a criminal trial caused by a state's failure to fund counsel for an indigent defendant counted against the State for speedy trial purposes. That issue will now have to wait for another day. The DIG prompted a concurring opinion by Justices Alito, Scalia, and Thomas, who believed that the factual record established that the vast bulk of the delay was directly caused by the defendant, thus making it a factually inappropriate case to consider the issue. Justices Sotomayor, Ginsburg, Breyer and Kagan dissented from the dismissal, as they believed that the record adequately established delay because of a funding crisis. They would have decided the case . . . and decided it in favor of Boyer.

Finally, the Court added one more case to its docket for next Term, Burrage v. United States (12-7515), which asks: (1) "Whether the crime of distribution of drugs causing death under 21 U.S.C. § 841 is a strict liability crime, without a foreseeability or proximate cause requirement;" and (2) "Whether a person can be convicted for distribution of heroin causing death utilizing jury instructions which allow a conviction when the heroin that was distributed ‘contributed to' death by ‘mixed drug intoxication,' but was not the sole cause of death of person."

There will be more to come soon. Until then, happy spring to all.

Kim, Jenny & Julie

From the Appellate and Complex Legal Issues Practice Group at Wiggin and Dana. For more information, contact Kim Rinehart or any other member of the Practice Group at 203-498-4400.