Torts/Personal Injury,
Civil Litigation
Sep. 8, 2022
A pyrrhic victory for class action defendants
By reducing the damages award on due process grounds, the court made clear – despite the plaintiff’s insistence to the contrary – that the award of aggregate statutory damages under Sections 349 and 350 is not automatic.
Alexander M. Smith
Partner
Jenner & Block LLP
Phone: (213) 239-2622
Email: asmith@jenner.com
Harvard Univ Law School; Cambridge MA
In Shady Grove Orthopedic Associates, P.A. v. Allstate Insurance Co., 559 U.S. 393 (2009), the Supreme Court held that N.Y. C.P.L.R. § 901(b), which prohibits courts from awarding statutory damages in class actions, is a "procedural" rule that does not apply to federal courts sitting in diversity. Since Shady Grove, plaintiffs have routinely used the threat of statutory damages under New York law to bludgeon defendants into settling class actions - incl...
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