‘Big Business’ and Genesis HealthCare Corp v. Symczyk

The New York Times’ strained attempts to paint the Roberts Court as the handmaiden of big business continue, this time in the form of Lincoln Caplan’s criticism of the Court’s decision in Genesis HealthCare Corp. v. SymczykGenesis involves plaintiff Laura Symczyk’s “collective action” lawsuit, on behalf of her and other unnamed but similarly situated employees, for her employer’s alleged violations of the Fair Standards Labor Act. Ms. Symczyk went to trial despite her employer’s FRCP 68 settlement, which covered all of her damages but not those of other employees. The Court addressed two questions: (1) did her employer’s settlement offer moot Ms. Symczyk’s standing to sue; and (2) if so, could she continue the lawsuit for the other employees? The Supreme Court answered yes to the first question, and no to the second, and dismissed the lawsuit.

Caplan’s characterization of Genesis — “outrageous” and nonsensical, “giv[ing] corporations the upper hand over everyone else” — falls flat. Genesis is actually notable for its narrowness and sensible affirmation of essential standing principles.

Contrary to Caplan’s sky-is-falling routine, the Supreme Court’s ruling against the plaintiff’s personal standing was a model of judicial minimalism. Ms. Symczyk could not sue for personal damages because she had conceded this point in the lower court, and the Court decided to avoid an issue that was improperly before it. Perhaps the Court should rule that a similarly situated plaintiff lacks standing, but a later Court can adjudicate that question after full briefing on the matter.

Caplan’s attempt to fit the remaining decision — which denied Plaintiff’s capacity to represent unnamed employees — into a pro-business framework ignores other considerations. The Court actually dismissed the lawsuit because plaintiff could not find anyone else to join the lawsuit. For all the Court knew, Ms. Symczyk was the only employee that her employer’s conduct had affected.

More importantly, Caplan wrongly discredits the constitutional principle of standing, which is the basis for denying Ms. Symczyk’s remaining claim. Genesis’s majority opinion elaborates on why this concept is so important:  

Article III, §2, of the Constitution limits the jurisdiction of federal courts to “Cases” and “Controversies,” which restricts the authority of federal courts to resolving “‘the legal rights of litigants in actual controversies.’” In order to invoke federal-court jurisdiction, a plaintiff must demonstrate that he possesses a legally cognizable inter­est, or “‘personal stake,’” in the outcome of the action. This requirement ensures that the Federal Judiciary confines itself to its constitutionally limited role of adjudicating actual and concrete disputes, the resolu­tions of which have direct consequences on the parties involved. (citations omitted). 

Even if standing was constitutionally irrelevant, Genesis would still not fit into Caplan’s inflexible “pro-business bias” framework. Other plaintiffs can still sue the defendant, or even initiate an identical “collective action” lawsuit. They would just need a direct personal stake in the litigation to defend the lawsuit — something that Ms. Symczyk did not possess. This actually can protect the unnamed employees in the “collective action” lawsuit, since robustly pursuing a legal claim might be difficult without a direct personal stake in the outcome.

Narrowness aside, Genesis does provide some relief from certain “collective action” lawsuits, which Caplan spins as a handout for big business. However, as I’ve written about in the context of Dodd-Frank, smaller institutions, with their lower profit margins, can actually benefit most from reduced business costs. Genesis provides this relief in the form of decreased litigation costs, which the small business community welcomed with a cheer. As the NFIB’s press release explained:  

 “The Supreme Court’s decision today has significant implications for small-business owners, who are disproportionately impacted by costly wage and hour lawsuits. Small employers don’t have the financial advantages of much larger firms; diverting their limited resources for unnecessary litigation could mean the end of their business and all the jobs they created,” said Karen Harned, executive director of the NFIB Small Business Legal Center. “The ruling today is a victory for small businesses because it will make it easier to stop frivolous lawsuits before they become multi-million dollar affairs.”

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