On March 31, the Supreme Court released its opinion in Shady Grove Orthopedic Assoc., P.A. v. Allstate Insurance Co ., No. 08-1008, a case involving a procedural issue that could have been lifted from a first-year civil procedure exam. Despite its academic underpinnings, however, the Court’s decision could have broad, real world implications on class action practice in federal court. Perhaps as a testimony to its importance, the decision has already been heralded as a victory by consumer advocates and criticized by big business as opening up the federal courts to an avalanche of class action lawsuits. While the true impact of the decision undoubtedly lies somewhere between these extremes, it is now clear, as even Justice Scalia acknowledged in his opinion, that it will “produce forum shopping” by “keeping the federal-court door open to class actions that cannot proceed in state court.”
At the outset, it is worth noting that the decision produced three opinions that include uncommon alliances and an unusual vote tally: Justice Scalia wrote for the Court, and was joined, in whole or in part, by Chief Justice Roberts, and Justices Stevens, Thomas, and Sotomayor; Justice Stevens wrote separately to concur in the judgment of the Court, but not its reasoning; Justice Ginsburg wrote for the dissent, and was joined by Justices Kennedy, Breyer and Alito. In the end, there were five votes for the Court’s judgment, but only four votes for its reasoning. Thus, the lower federal courts are left with the task of unraveling the controlling test from what was essentially a 4-1-4 decision on how issues like those raised in Shady Grove should be resolved going forward.
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