Supreme Court affirms Eight Circuit decision on Article III standing

Class Action Litigation Newsletter Summer 2020: US Supreme Court

Thole et al. v. U.S. Bank N.A. et al., 140 S. Ct. 1615 (2020)

Supreme Court affirms Eight Circuit decision on Article III standing, highlighting how a plaintiff must establish a concrete injury to file suit and that an “equitable or property interest” is insufficient. 

This putative class action under the Employee Retirement Income Security Act of 1974 (ERISA) was pursued by plaintiffs James Thole and Sherry Smith, retired participants in U.S. Bank’s defined-benefit retirement plan (the Plan). The Plan guaranteed plaintiffs a fixed payment each month regardless of (1) the Plan’s value at any one moment and (2) the investment decisions that had been undertaken by the Plan’s fiduciaries. Nevertheless, plaintiffs alleged that defendants, including U.S. Bank, “violated ERISA’s duties of loyalty and prudence by poorly investing the [P]lan’s assets,” and requested repayment of $750 million to the Plan. The U.S. District Court for the District of Minnesota dismissed the case and the Eighth Circuit affirmed, finding that plaintiffs lacked standing.

In its decision, the Supreme Court affirmed the Eighth Circuit’s decision on the ground that plaintiffs lacked Article III standing. At the heart of this decision was the fact that the Plan was a defined-benefit, and not a defined-contribution, plan; the latter is typically tied to the value of an account and benefits can turn on the plan fiduciaries’ investment decisions, whereas the former is not. As such, plaintiffs were not missing any vested pension benefits.

The Court explained, “Thole and Smith have received all of their monthly benefit payments so far, and the outcome of this suit would not affect their future benefit payments. If Thole and Smith were to lose this lawsuit, they would still receive the exact same monthly benefits that they are already entitled to receive, not a penny less. If Thole and Smith were to win this lawsuit, they would still receive the exact same monthly benefits that they are already slated to receive, not a penny more. The plaintiffs therefore have no concrete stake in this lawsuit.” The absence of a “concrete stake in the lawsuit” means that plaintiffs could not satisfy the first element of Article III standing, that is, a concrete, particularized, and actual or imminent injury.

In so holding, the Court rejected plaintiffs’ various attempts to establish standing, including their analogies to trust law and a contention that they had “an equitable or property interest in” the Plan (and thus necessarily any injury to the Plan is an injury to them as Plan participants). The Court highlighted that plaintiffs could have established standing by sufficiently alleging that the mismanagement of the Plan was “so egregious that it substantially increased the risk that the [P]lan and the employer would fail and be unable to pay the participants’ future pension benefits.” But plaintiffs had not done so, providing only a “bare allegation of plan underfunding.”

Barr v. Am. Ass’n of Political Consultants, Inc. et al., — S. Ct. —, 2020 U.S. LEXIS 3544, 2020 WL 3633780 (2020)

Supreme Court finds 2015 government-debt exception to the Telephone Consumer Protection Act of 1991 (the TCPA) unconstitutional, but preserves general robocall restriction.

This decision involved the scope of the TCPA, often the focus of class action lawsuits. In this case, plaintiffs (the American Association of Political Consultants and three other political system organizations) filed a declaratory judgment action asserting that their First Amendment rights were violated by the TCPA’s prohibition on making robocalls to cell phones, which they believed would bolster their political outreach efforts. The District Court for the Eastern District of North Carolina determined that the robocall restriction with the government-debt exception implemented in 2015 required strict scrutiny, but that the law survived strict scrutiny because of the government’s compelling interest in collecting debt. The Fourth Circuit vacated that judgment, agreeing that the robocall restriction, with its 2015 amendment, required strict scrutiny but disagreeing that the law survived such scrutiny.

The Supreme Court agreed with the Fourth Circuit that (1) the robocall restriction was a content-based restriction, which required strict scrutiny, and (2) that the 2015 exception for debt collection could not satisfy such scrutiny, making it unconstitutional. But the Court found that the government-debt exception could be severed, leaving the general robocall restrictions in the TCPA.

 

For more information on how you can discover if the party claiming to have Standing to foreclose on your home really does have the legal standing needed to do so contact FRAUD STOPPERS today and get a free mortgage fraud analysis. 

Do not take the chance to be scammed out of your hard earned money by known scammers like Storm Bradford of the Mortgage Fraud Examiners because you cannot afford to be scammed by Storm or his friend Bob Hurt. They are known bad guys who do work with the banks foreclosing on innocent homeowners. For more information on scams to avoid read this: https://fraudstoppers.org/storm-bradford-and-the-mortgage-fraud-examiners-are-not-the-only-scams-you-need-to-watch-out-for-here-are-some-more/

 

 

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