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Defending Statutory Damages Class Actions after TransUnion: A Guide for Defense Counsel
Adam Unikowsky, Jenner & Block
Deborah White, Retail Litigation Center
The Retail Litigation Center commissioned Adam Unikowsky of Jenner & Block to develop “Defending Statutory Damages Class Actions after TransUnion: A Guide for Defense Counsel,” in order to share cross-cutting statutory damages defense strategies that arise from TransUnion v. Ramirez, 141 S. Ct. 2190 (2021) with corporate defense counsel.
Class actions pose well-known litigation risks for corporate defendants. The successful national retailers who are the RLC’s members are at disproportionate risk for these suits given their vast numbers of employees and customers — all of whom constitute ready-made classes for the plaintiffs’ bar. A low-value nuisance suit can transform into bet-the-company litigation when brought as a class action. The stakes are magnified by statutory damages provisions that authorize meaningful damages awards for each trivial technical violation. When a large class is certified, the potential awards are astronomical. Because these cases tend to be easy to bring – and lucrative for plaintiffs’ attorneys – they tend to spawn ‘waves’ of litigation if the earliest cases are not successfully defended.
The Guide addresses three strategies for defending against statutory damages class actions. First, it examines defenses based on TransUnion, which held that uninjured class members cannot recover statutory damages. Because TransUnion is so new, there is little law on how to use it most effectively. The Guide addresses how TransUnion may be deployed in different procedural scenarios, as well as strategies to consider in state court litigation.
Second, the Guide addresses defenses to statutory damages class actions grounded in Rule 23’s superiority requirement. Defendants can argue that because statutory damages class actions are fundamentally unfair to defendants, they are not “superior” to individualized litigation under Rule 23. While courts have reached varying conclusions on this issue, we believe there is a potential to create good law that would substantially limit plaintiffs’ ability to bring such suits.
Third, the Guide addresses potential constitutional defenses to statutory damages class actions, again grounded in the fundamental unfairness of subjecting defendants to such astronomical liability in a single proceeding. Such defenses could be presented in both federal and state court—a particularly salient consideration in a post-TransUnion world.
The purpose of the Guide is to foster discussion among the retail industry’s in-house litigators and their outside counsel experts to enhance coordination among the defense bar and, ultimately, to strengthen the fabric of the law available to defend against meritless statutory damages mass action litigation. If you would like a copy of The Guide, please contact Deborah White, President, Retail Litigation Center at firstname.lastname@example.org.