The U.S. Supreme Court considers three cases that might dramatically affect the ability of consumers and investors to obtain protection in the courts. In each case AARP Foundation Litigation attorneys filed AARP’s friend-of-the-court brief.

Background

Olivea Marx invoked the federal Fair Debt Collection Practices Act (FDCPA) after General Revenue Corporation (GRC) sought to collect a student loan. Among the actions Marx objected to: a fax sent to her employer asking about her employment status. A trial court agreed with GRC that the fax did not violate the law, and the court then ordered Marx to pay GRC’s court costs. AARP filed a brief with four other consumer rights organizations, arguing that the FDCPA was enacted with the explicit intent of being enforceable by vulnerable consumers in recognition of the fact that government agencies only would have resources and reach to prosecute the most egregious of violations. The brief points out that the FDCPA protects companies against lawsuits filed in bad faith by consumers. The need for consumer enforcement remains pressing: Americans carry more credit debt today than ever before, technological advances make it cheaper than ever to enter into the debt collection business, the economic downturn has increased vulnerability, and the rise of identity theft has increased the risk of erroneous debt. At the same time, complaints about aggressive efforts to collect old, erroneous or time-barred debts have skyrocketed.

AARP also filed briefs in two cases that address class action certification — one in the realm of consumer protection, and the other in the area of securities fraud. Customers challenged Comcast cable practices, claiming they were anticompetitive, raising the cost of basic cable for viewers. An appeals court ruled that the plaintiffs could proceed as a class without proving damages, because the damages are capable of being proved on a classwide basis at trial. A ruling overturning this holding would have the potential to severely limit the ability of consumers to enforce their rights by making it too expensive to bring class action litigation. In a separate case, investors challenged Amgen’s omissions of disclosures and the truth of actual representations pertaining to two of the company’s pharmaceutical products. The company argued that before the court can certify the action as a class action, plaintiffs must show not only that the representations upon which they relied were fraudulent but that they were also material to the investors’ claimed losses. AARP’s brief argues that materiality is not a proper question at the class certification stage, but rather that it is a question for later in the proceedings.

Class action litigation is often the only way individuals can challenge practices that cost a large number of people a small amount of money. Few attorneys would take on complicated cases against well-funded defendants for such small individual recovery.

Case status

Marx v. GRC., Comcast v. Behrend, and Amgen v. Conn. Ret. Plans are before the U.S. Supreme Court.