On June 25, 2018, the Supreme Court upheld a Second Circuit opinion that American Express did not violate antitrust law by prohibiting merchants from encouraging customers to use non-American Express credit cards. As part of their agreements with American Express, merchants were required not to steer customers to use non-American Express credit cards (merchants could still express a preference for cash, checks or debit cards). The state of Ohio, the United States, and several other states brought suit alleging that these “anti-steering” provisions violated Section 1 of the Sherman Act as an “unreasonable restraint of trade.” The Supreme Court opined that the relevant market in which to assess the anti-steering provisions is two-sided; that is, courts must consider competitive effects and benefits on both the consumer payments and payment processing sides of the transactions.
In a 5-4 decision with major implications for e-commerce retailers, the Supreme Court has closed the “online sales tax loophole” by holding that a state may collect sales tax from out-of-state sellers that do not maintain a physical presence in the state. The decision, South Dakota v. Wayfair, Inc. et al., No. 17-494, 585 U.S. __ (2018), overturns two prior Supreme Court cases holding that an out-of-state seller’s duty to collect and remit tax to a consumer’s home state depended on whether the seller had a physical presence in that state. The Court found that this “Physical Presence Rule” was inconsistent with “the present realities of the interstate marketplace” and was costing states an estimated $8 to $33 billion in revenue each year. The Court also was persuaded by the notoriously low rate of consumer compliance with use taxes, and by the fact that the state law in question afforded small merchants a “reasonable degree of protection” by applying only to sellers that annually delivered more than $100,000 of goods or services or engaged in 2,000 or more separate transactions for the delivery of goods or services into the state. The dissenting opinion by Chief Justice Roberts insists that Congress, not the courts, should have undertaken the task to overturn the Physical Presence Rule and that the burden of this new tax regime will fall disproportionately on start-ups and small businesses.
On June 11, 2018, the United States Supreme Court ruled that American Pipe tolling does not extend to follow-on class actions brought after the statute of limitations period has run. This decision resolves a split between circuit courts over the question of whether a putative class member can rely on American Pipe to toll applicable statute of limitations to file a new class action in lieu of promptly joining an existing suit or filing an individual action. The Court held that “American Pipe tolls the statutes of limitations during the pendency of a putative class action, allowing unnamed class members to join the action individually or file individual claims. But American Pipe does not permit the maintenance of a follow-on class action past expiration of the statute of limitations.” China Agritech, Inc. v. Resh, — S. Ct. —, 2018 WL 2767565, at *3 (2018). Continue Reading Supreme Court Limits American Pipe Tolling for Consecutive Class Actions
In a major win for employers, the U.S. Supreme Court held that arbitration agreements with class action waivers do not violate the National Labor Relations Act (“NLRA”). As reported on the Hunton Employment & Labor Perspectives Blog, the Supreme Court’s narrow 5-4 decision paves the way for employers to include such waivers in arbitration agreements to avoid class and collective actions. Continue Reading SCOTUS Holds Class Action Waivers Do Not Violate the NLRA
As reported on Hunton’s Employment & Labor Perspectives blog, the U.S. Supreme Court has voted to hear an appeal of the Ninth Circuit’s decision in Varela v. Lamps Plus, Inc. The Supreme Court is expected to decide whether workers can pursue their claims through class-wide arbitration when the underlying arbitration agreement is silent on the issue. The case could have wide-reaching consequences for employers who use arbitration agreements. Continue Reading SCOTUS to Review Right to Class Arbitration in Silent Agreements
The California Supreme Court has adopted a new three-part test to determine whether a worker is an independent contractor or an employee under California’s wage orders, which regulate wages, hours and working conditions. The highly anticipated ruling could have wide-ranging effects for businesses operating in California and beyond, as companies try to navigate the new gig economy. Continue Reading California Supreme Court Adopts New Independent Contractor Test
Since the United States Supreme Court’s decisions in Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915 (2011) and Daimler AG v. Bauman, 134 S. Ct. 746 (2014)—and particularly in light of the Court’s more recent decisions in Bristol-Myers Squibb Co. v. Superior Court, 137 S. Ct. 1773 (2017) and BNSF Ry. Co. v. Tyrrell, 137 S. Ct. 1549 (2017)—courts across the country have applied a more exacting standard for assessing whether defendants can be subject to general personal jurisdiction in a particular forum. Under this standard, a plaintiff must demonstrate that the defendant’s contacts with the forum are so continuous and systematic as to render it “essentially at home” there. In most instances, a company is “essentially at home” only in the state where it is incorporated and the state where it operates its principal place of business. This has been a largely positive result for companies in the retail product industry that may have strategic incentive to avoid becoming subject to “all purpose” general personal jurisdiction in each state in which their products are sold. Continue Reading Challenging the Consent-Based Theory of General Personal Jurisdiction in Pennsylvania
As reported on the Hunton Privacy & Information Security Law Blog, on March 8, 2018, the Ninth Circuit Court of Appeals (“Ninth Circuit”) reversed a decision from the United States District Court for the District of Nevada. The trial court found that one subclass of plaintiffs in In re Zappos.Com, Inc. Customer Data Security Breach Litigation had not sufficiently alleged injury in fact to establish Article III standing. The opinion focused on consumers who did not allege that any fraudulent charges had been made using their identities, despite hackers accessing their names, account numbers, passwords, email addresses, billing and shipping addresses, telephone numbers, and credit and debit card information in a 2012 data breach. Continue Reading Ninth Circuit Reverses District Court Decision in Zappos Consumer Data Breach Case
Last week, the United States Court of Appeals for the Second Circuit, sitting en banc, became the second federal appellate court to officially recognize a discrimination claim under Title VII based solely on the plaintiff’s sexual orientation. The Court’s decision in Zarda v. Altitude Express follows on the heels of the Seventh Circuit’s decision last April in Hively v. Ivy Tech Community College of Indiana, in which the Seventh Circuit also overturned its prior cases to recognize protections based on sexual orientation under Title VII. Continue Reading Circuit Courts Recognize Employment Protections for Sexual Orientation Under Title VII
In a highly anticipated opinion, a Federal Judge in California ruled in favor of GrubHub, an internet food ordering service, finding it properly classified a delivery driver as an independent contractor.
In Lawson v. GrubHub, the plaintiff, a delivery driver, alleged that GrubHub violated California’s minimum wage, overtime and employee expense reimbursement laws by misclassifying him as an independent contractor when he was really an employee. He brought the case on behalf of himself and as a representative action pursuant to the California Private Attorney General Act. Continue Reading GrubHub Driver Ruled Independent Contractor in First of Its Kind Gig Economy Trial