{"id":1116,"date":"2024-01-19T14:31:01","date_gmt":"2024-01-19T18:31:01","guid":{"rendered":"https:\/\/blogs.duanemorris.com\/classactiondefense\/?p=1116"},"modified":"2024-01-19T14:40:26","modified_gmt":"2024-01-19T18:40:26","slug":"trend-5-us-supreme-court-rulings","status":"publish","type":"post","link":"https:\/\/blogs.duanemorris.com\/classactiondefense\/2024\/01\/19\/trend-5-us-supreme-court-rulings\/","title":{"rendered":"Trend #5 \u2013 U.S. Supreme Court Rulings Continue To Impact The Class Action Landscape"},"content":{"rendered":"<p><strong><a href=\"http:\/\/blogs.duanemorris.com\/classactiondefense\/wp-content\/uploads\/sites\/56\/2024\/01\/T5-cover.png\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-full wp-image-1078\" src=\"http:\/\/blogs.duanemorris.com\/classactiondefense\/wp-content\/uploads\/sites\/56\/2024\/01\/T5-cover.png\" alt=\"\" width=\"1600\" height=\"900\" srcset=\"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-content\/uploads\/sites\/56\/2024\/01\/T5-cover.png 1600w, https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-content\/uploads\/sites\/56\/2024\/01\/T5-cover-300x169.png 300w, https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-content\/uploads\/sites\/56\/2024\/01\/T5-cover-1024x576.png 1024w, https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-content\/uploads\/sites\/56\/2024\/01\/T5-cover-768x432.png 768w, https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-content\/uploads\/sites\/56\/2024\/01\/T5-cover-1536x864.png 1536w\" sizes=\"auto, (max-width: 767px) 89vw, (max-width: 1000px) 54vw, (max-width: 1071px) 543px, 580px\" \/><\/a><\/strong><\/p>\n<p>By Gerald L. Maatman, Jr. and Jennifer A. Riley<\/p>\n<p><strong><em>Duane Morris Takeaway: <\/em><\/strong><em>As the ultimate referee of law, the U.S. Supreme Court traditionally has defined the playing field for class action litigation and, through its rulings, has impacted the class action landscape. The past year did not buck that trend. On June 29, 2023, the U.S. Supreme Court ruled in Students for Fair Admissions, Inc., et al. v. President &amp; Fellows of Harvard College, 600 U.S. 181 (2023), that two colleges and universities that considered race as a factor in the admissions process violated the Equal Protection Clause of the U.S. Constitution and Title VI of the Civil Rights Act of 1964. The ruling is fueling controversy along with a wave of claims that is likely to expand. <\/em><\/p>\n<p>Check out the video below to see Duane Morris partner Jennifer Riley discuss the impact of U.S. Supreme Court rulings on the class action landscape in 2023, and what is coming in 2024.<\/p>\n<p><iframe loading=\"lazy\" title=\"DMCAR Trend #5 \u2013 U.S. Supreme Court Rulings Continue To Impact The Class Action Landscape\" width=\"525\" height=\"295\" src=\"https:\/\/www.youtube.com\/embed\/Wjbf56bIzk4?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe><\/p>\n<p><strong>Trend #5 \u2013 U.S. Supreme Court Rulings Continue To Impact The Class Action Landscape<\/strong><\/p>\n<ol>\n<li><strong>The U.S. Supreme Court\u2019s Decision<\/strong><\/li>\n<\/ol>\n<p>Students for Fair Admissions, an advocacy group, brought two lawsuits alleging that the use of race as a factor in admissions by Harvard and the University of North Carolina, respectively, violated Title VI and the Equal Protective Clause of the Fourteenth Amendment. The U.S. Supreme Court agreed.<\/p>\n<p>After reviewing the language of the Fourteenth Amendment (no State shall \u201cdeny to any person . . . the equal protection of the laws\u201d), the Supreme Court began its analysis by recapping its early jurisprudence, including its decision in <em>Brown v. Board of Education<\/em>, 347 U. S. 483, 493 (1954), wherein it held that the right to a public education \u201cmust be made available to all on equal terms.\u201d <em>Students<\/em>, 600 U.S. at 201, 204. The Supreme Court noted that these decisions, and others like them, reflect the broad \u201ccore purpose\u201d of the Equal Protection Clause: \u201c[D]o[ing] away with all governmentally imposed discrimination based on race.\u201d <em>Id.<\/em> at 206.<\/p>\n<p>The Supreme Court explained that, accordingly, any exceptions to the Equal Protection Clause\u2019s guarantee must survive a daunting two-step examination known as \u201cstrict scrutiny,\u201d which asks, first, whether the racial classification is used to \u201cfurther compelling governmental interests\u201d and, second, whether the government\u2019s use of race is \u201cnarrowly tailored\u201d or \u201cnecessary\u201d to achieve that interest. <em>Id.<\/em> at 206-07. In <em>Grutter v. Bollinger<\/em>, 539 U.S. 306, 325 (2003), the Supreme Court endorsed the view that \u201cstudent body diversity is a compelling state interest\u201d but insisted on limits in how universities consider race. In particular, the Supreme Court sought to guard against two dangers: (i) the risk that the use of race will devolve into \u201cillegitimate . . . stereotyp[ing]\u201d and (ii) the risk that race will be used as a negative to discriminate <em>against<\/em> those racial groups that are not the beneficiaries of the race-based preference. To manage its concerns, <em>Grutter<\/em> imposed a third limit on race-based admissions programs. \u201cAt some point,\u201d the Supreme Court held, \u201cthey must end.\u201d <em>Students<\/em>, 600 U.S. at 212.<\/p>\n<p><a href=\"http:\/\/blogs.duanemorris.com\/classactiondefense\/wp-content\/uploads\/sites\/56\/2024\/01\/SC.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"alignright size-medium wp-image-1115\" src=\"http:\/\/blogs.duanemorris.com\/classactiondefense\/wp-content\/uploads\/sites\/56\/2024\/01\/SC-300x200.jpg\" alt=\"\" width=\"300\" height=\"200\" srcset=\"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-content\/uploads\/sites\/56\/2024\/01\/SC-300x200.jpg 300w, https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-content\/uploads\/sites\/56\/2024\/01\/SC.jpg 749w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\" \/><\/a>In <em>Students for Fair Admissions<\/em>, the U.S. Supreme Court held that the defendants\u2019 race-conscious admissions systems failed each factor and, therefore, ran afoul of the Equal Protection Clause. As an initial matter, the U.S. Supreme Court found that defendants failed to operate their race-based admissions programs in a manner that is \u201csufficiently measurable to permit judicial [review].\u201d <em>Id.<\/em> at 214-17. Second, the U.S. Supreme Court held that the race-based admissions systems failed to comply with the twin commands of the Equal Protection Clause that race may never be used as a \u201cnegative\u201d and that it may not operate as a stereotype. <em>Id. <\/em>at 218-219. The U.S. Supreme Court explained that \u201ccollege admissions are zero-sum. A benefit provided to some applicants but not to others necessarily advantages the former group at the expense of the latter.\u201d <em>Id. <\/em>Third, the U.S. Supreme Court held that the admissions programs lack a \u201clogical end point\u201d as <em>Grutter <\/em>required. <em>Id.<\/em> at 221. As a result, the U.S. Supreme Court determined that the admissions programs \u201ccannot be reconciled with the guarantees of the Equal Protection Clause.\u201d <em>Id.<\/em> at 230.<\/p>\n<ol start=\"2\">\n<li><strong>The Ruling\u2019s Early Impact<\/strong><\/li>\n<\/ol>\n<p>On July 19, 2023, in <em>Ultima Services Corp., et al. v. U.S. Department of Agriculture<\/em>, No. 20-CV-00041, 2023 WL 4633481 (E.D. Tenn. July 19, 2023), a district court extended <em>Students for Fair Admissions <\/em>to the government contracting context and held that the Small Business Association\u2019s use of racial preferences to award government contracts likewise violates the Equal Protection Clause.<\/p>\n<p>Section 8(a) of the Small Business Act instructs the Small Business Administration (the SBA) to contract with other agencies \u201cto furnish articles, equipment, supplies, services, or materials to the Government,\u201d 15 U.S.C. \u00a7 637(a)(1)(A), and to \u201carrange for the performance of such procurement contracts by [subcontracting with] socially and economically disadvantaged small business concerns,\u201d 15 U.S.C. \u00a7 637(a)(1)(B). The SBA adopted a regulation creating a \u201crebuttable presumption\u201d that \u201cBlack Americans; Hispanic Americans; Native Americans; Asian Pacific Americans [; and] Subcontinent Asian Americans\u201d are \u201csocially disadvantaged.\u201d 13 C.F.R. \u00a7 124.103(b)(1).<\/p>\n<p>The district court held that the \u00a7 8(a) program does not satisfy strict scrutiny. First, the Administration did not assert a compelling interest. The district court reasoned that while the government \u201chas a compelling interest in remediating specific, identified instances of past discrimination,\u201d the program lacked any such stated goals. <em>Id.<\/em> at *11. Second, the district court held that, even if the SBA had a compelling interest in remediating specific past discrimination, the \u00a7 8(a) program was not narrowly tailored to serve that alleged compelling interest. <em>Id.<\/em> at *14. The \u00a7 8(a) program had no logical end point or termination date, was both underinclusive and overinclusive relative to its \u201cimprecise\u201d racial categories, and failed to review race-neutral alternatives.<\/p>\n<p>The district court concluded that the defendants\u2019 use of the rebuttable presumption violated Ultima&#8217;s Fifth Amendment right to equal protection, and it enjoined defendants from using the rebuttable presumption of social disadvantage in administering the program. <em>Id.<\/em> at *18.<\/p>\n<p>Although the district court in <em>Ultima<\/em> limited its holding to the use of a \u201crebuttable presumption\u201d in administration of \u00a7 8(a) programs, in addressing the requirement that racially conscious government programs must have a \u201clogical end point,\u201d it cited <em>Students for Fair Admissions<\/em> and noted that \u201cits reasoning is not limited to just [college admissions programs].\u201d <em>Id.<\/em> at *15 n.8. Thus, the first opinion considering the impact of <em>Students for Fair Admissions<\/em> extended it beyond college admissions, reflecting the decision\u2019s potential to fuel claims asserted under 42 U.S.C. \u00a7 1981, Title VII, and other anti-discrimination statutes.<\/p>\n<ol start=\"3\">\n<li><strong>Implications For Class Action Litigation <\/strong><\/li>\n<\/ol>\n<p>The Supreme Court\u2019s decision has also caused private sector employers to question whether the ruling impacts their diversity, equity, and inclusion (DEI) initiatives. While politicians moved quickly to stake out positions on the issue, the plaintiffs\u2019 class action bar and advocacy groups moved to take advantage of the uncertainty to line up a deluge of claims.<\/p>\n<p>In the wake of <em>Students for Fair Admissions<\/em>, the Office for Federal Contractor Compliance Programs (OFCCP), the office responsible for overseeing affirmative action programs for federal contractors, promptly updated its website to state that its affirmative action programs are separate from those that educational institutions implemented to increase racial diversity in their student bodies. The OFCCP stated that \u201c[t]here continue to be lawful and appropriate ways to foster equitable and inclusive work environments and recruit qualified workers of all backgrounds.\u201d<\/p>\n<p>Likewise, in response to the decision, EEOC Chair Charlotte Burrows, a Democratic appointee, promptly issued a statement declaring that the decision \u201cdoes not address employer efforts to foster diverse and inclusive workforces or to engage the talents of all qualified workers, regardless of their background. It remains lawful for employers to implement diversity, equity, inclusion, and accessibility programs that seek to ensure workers of all backgrounds are afforded equal opportunity in the workplace.\u201d<\/p>\n<p>By contrast, Andrea Lucas, a Republican-appointed EEOC Commissioner, emphasized a different sentiment in a Fox News interview regarding the impact of <em>Students for Fair Admissions<\/em>: \u201cI think this [decision] is going to be a wake-up call for employers. . . . Even though many lawyers don\u2019t use the word affirmative action, it\u2019s rampant today. . . . Pretty much everywhere there is a ton of pressure . . . across corporate America to take race-conscious . . . actions in employment law. That\u2019s been illegal and it is still illegal.\u201d As to potential challenges, she added: \u201cI have noticed an increasing number of challenges to corporate DEI programs and I would expect that this decision is going to shine even more of a spotlight about how out of alignment some of those programs are. . . I expect that you are going to have a rising amount of challenges.\u201d<\/p>\n<p>Consistent with predictions, in the wake of the U.S. Supreme Court\u2019s ruling, Republican Attorneys General from 13 states and Senator Tom Common of Arkansas sent a letter to the CEOs of Fortune 100 companies stating: \u201c[T]oday\u2019s major companies adopt explicitly . . . discriminatory practices [including], among other things, explicit racial quotas and preferences in hiring, recruiting, retention, promotion, and advancement.\u201d They urged the companies to cease unlawful hiring practices. In response, 21 Democratic Attorneys General sent a letter condemning the Republican Attorneys General\u2019s \u201cattempt at intimidation\u201d: \u201cWhile we agree with our colleagues that \u201ccompanies that engage in racial discrimination should and will face serious legal consequences&#8230;[w]e write to reassure you that corporate efforts to recruit diverse workforces and create inclusive work environments are legal and reduce corporate risk for claims of discrimination.\u201d<\/p>\n<p>On September 19, 2023, Students for Fair Admissions filed a lawsuit in the U.S. District Court for the Southern District of New York seeking to end race-conscious admissions at the U.S. Military Academy. . <em>See Students for Fair Admissions v. U.S. Military Academy at West Point, et al.<\/em>, No. 7:23 Civ. 08262 (S.D.N.Y.). The group alleged that the admissions program at West Point, which takes race into account in its admissions process for future Army officers, is unconstitutional and unnecessary for a service that relies on soldiers following orders regardless of skin color.<\/p>\n<p>The group filed a similar action against the U.S. Naval Academy on October 5, 2023, in the U.S. District Court for the District of Maryland.<em> See Students for Fair Admissions v. U.S. Naval Academy, et al.<\/em>, No. 23-CV-2699 (D. Md.). The group seeks to prevent the Naval Academy in Annapolis, Maryland from taking race into account in the selection of an entering class of midshipmen. After filing suit, the group promptly sought a preliminary injunction.<\/p>\n<p>On December 20, 2023, a federal judge denied a request to temporarily bar the Naval Academy from using race in its admissions process while the parties litigate the case. <em>Students for Fair Admissions v. U.S. Naval Academy<\/em>, No. 23-CV-2699, 2023 WL 8806668, at *1 (D. Md. Dec. 20, 2023) (noting that plaintiff\u2019s requested injunctive relief \u201cwould undoubtedly alter the status quo,\u201d and, at this stage, the parties have not developed a factual record from which the court can determine whether the Naval Academy&#8217;s admissions practices will survive strict scrutiny).<\/p>\n<p>On October 4, 2023, another advocacy group, the America First Legal Foundation asked the EEOC to launch an investigation into Salesforce\u2019s allegedly \u201cunlawful employment practices\u201d claiming that, through its programs promoting diversity and equality, it engaged in unlawful race-based and sex-based discrimination. The group has lodged similar accusations against than a dozen other companies alleging that they maintain programs that aim to increase workplace representation of women and minorities at the expense of White, heterosexual men. The American Alliance for Equal Rights filed lawsuits against additional companies, including law firms, claiming that their grants and programs excluded individuals based on their race.<\/p>\n<p>Finally, on December 19, 2023, a Wisconsin attorney represented by the Wisconsin Institute for Law &amp; Liberty filed suit alleging that a clerkship program maintained by the Wisconsin State Bar is unconstitutional because its eligibility requirements and selection processes discriminate among students based on various protected traits, primarily race. <em>See<\/em> <em>Suhr v. Dietrich, et al.<\/em>, Case No. 23-CV-01697 (E.D. Wis.). He claims that members of Bar leadership are violating his First Amendment rights because they are using his mandatory dues as a practicing attorney to fund the program.<\/p>\n<p>As these questions continue to percolate, and courts start to weave a patchwork quilt of rulings, such uncertainty is likely to fuel class action filings and settlements in the workplace class action space at an increasing rate. Companies should expect to see more governmental enforcement activity, litigation focused on alleged \u201creverse\u201d discrimination, and claims challenging DEI initiatives.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>By Gerald L. Maatman, Jr. and Jennifer A. Riley Duane Morris Takeaway: As the ultimate referee of law, the U.S. Supreme Court traditionally has defined the playing field for class action litigation and, through its rulings, has impacted the class action landscape. The past year did not buck that trend. On June 29, 2023, the &hellip; <\/p>\n<p class=\"link-more\"><a href=\"https:\/\/blogs.duanemorris.com\/classactiondefense\/2024\/01\/19\/trend-5-us-supreme-court-rulings\/\" class=\"more-link\">Continue reading<span class=\"screen-reader-text\"> &#8220;Trend #5 \u2013 U.S. Supreme Court Rulings Continue To Impact The Class Action Landscape&#8221;<\/span><\/a><\/p>\n","protected":false},"author":583,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[],"ppma_author":[30],"class_list":["post-1116","post","type-post","status-publish","format-standard","hentry","category-general"],"authors":[{"term_id":30,"user_id":583,"is_guest":0,"slug":"classactiondefense","display_name":"Class Action Defense","avatar_url":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-content\/uploads\/sites\/56\/2020\/10\/dmlogo.jpg","0":null,"1":"","2":"","3":"","4":"","5":"","6":"","7":"","8":""}],"_links":{"self":[{"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/posts\/1116","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/users\/583"}],"replies":[{"embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/comments?post=1116"}],"version-history":[{"count":0,"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/posts\/1116\/revisions"}],"wp:attachment":[{"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/media?parent=1116"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/categories?post=1116"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/tags?post=1116"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/ppma_author?post=1116"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}