April 16, 2010
Symposium on Civil Procedure Reform
The Denver University Law Review has just published a symposium issue on civil procedure reform, with contributions from judges, academics, and practitioners. Links are below:
To Revise or not to Revise: That Is the Question
Mark R. Kravitz
Rebecca Love Kourlis et. al.
Improving Rule 1: A Master Rule for the Federal Rules
Robert G. Bone
Situating Inherent Power Within a Rules Regime
Samuel P. Jordan
Nationwide Personal Jurisdiction for our Federal Courts
A. Benjamin Spencer
Resolving Cases “On the Merits”
Apportioning Due Process: Preserving the Right to Affordable Justice
Limiting Evasive Discovery: A Proposal for Three Cost-Saving Amendments to the Federal Rules
Daniel C. Girard & Todd I. Espinosa
Proportional Discovery: Making it the Norm, Rather Than the Exception
Gordon W. Netzorg & Tobin D. Kern
Mandating Resonableness in a Resonable Inquiry
Patrick Oot et. al.
April 15, 2010
Bai, Cox & Thomas on Securities Class Action Settlements
Professors Lynn Bai (Cincinnati), James Cox (Duke) and Randall Thomas (Vanderbilt) have posted on SSRN their forthcoming article, Lying and Getting Caught: An Empirical Study of the Effect of Securities Class Action Settlements on Targeted Firms, 158 U. Penn L. Rev. (forthcoming 2010). Here's the abstract:
Private suits have long been championed as a necessary mechanism not only to compensate investors for harms they suffer from financial frauds but also to enhance the deterrence of wrongdoing. But many critics have claimed that there a hidden dark side to the successful prosecution of a securities class action. In this paper, we shed light on these issues by examining whether the revelation of earlier misstatements, the initiation of private suit, and the payment of a substantial settlement, weaken the defendant firm so that the firm is permanently worse off as a consequence of the settlement.
We find that defendant firms that settle securities class actions experience no significant declines in sales opportunities as a result of the lawsuit and settlement, but do experience a reduced level of operating efficiency while the lawsuit was pending (but not after it is settled). Most significantly, we also observe that defendant firms experience liquidity problems post-settlement and worsening Altman Z-scores (and a greater propensity to file bankruptcy) during that time period as well. Beginning with the filing of the class action, firm share prices are punished to the extent that investor returns do not recover.
We conclude that there is something in our results for both sides of the debate regarding the effects of securities litigation. One side could point toward our findings as evidence that the litigation is not a zero sum game for wrongdoers where only the insurer pays. On the other hand, others would claim that settlements, if not the entire litigation process, are a menace because they drain funds from the corporation that could better be directed toward strengthening its financial position.
April 14, 2010
Singer and Kulick on Class Certification in Antitrust Cases
Hal J. Singer and Robert B. Kulick have posted Class Certification in Antitrust Cases: An Economic Framework to SSRN.
A number of recent appellate court decisions pertaining to class certification in antitrust cases have spawned uncertainty and debate about the future course of antitrust enforcement through the class-action mechanism. One leitmotif of these decisions is that Federal Rule of Civil Procedure’s 23(b)(3) “predominance” standard can only be satisfied by “rigorous analysis.” Some antitrust practitioners have argued that these statements regarding rigorous analysis must indicate that many issues traditionally thought of as merits issues must now be resolved during the class-certification inquiry. Yet the same decisions by appellate courts have emphasized that the class-certification process is a limited inquiry and that plaintiffs are not required to prove the validity of their claims regarding violation and impact to achieve class certification.
In this article, we propose an economic framework for interpreting the rule 23(b)(3) predominance standard. We believe that our analysis resolves the apparent conflict between the principle of conducting a rigorous analysis during the class certification inquiry and the principle of conducting an inquiry that implicates the validity of allegations at issue. Our approach also gives a specific economic meaning to the principle articulated by the Supreme Court in Amchem that class certification ultimately comes down to a question of whether a proposed class is sufficiently cohesive to warrant certification. Furthermore, our approach provides a compelling economic justification for a specific puzzle in antitrust class-action jurisprudence: Plaintiffs seeking class certification have often been successful when they have been able to prove that (1) the prices paid by all class members are linked by a common element of pricing, and (2) this common element was altered by the challenged conduct in a way that harmed plaintiffs. Despite the fact that this argument is often advanced through economic expert testimony, some antitrust practitioners have suggested that this approach lacks an economic basis. We review several cases where plaintiffs successfully used this approach to certify a class and show how our framework provides an economic basis for the court’s affirmative decisions in these cases. Our framework also suggests a specific delineation of the responsibilities of class-certification experts, liability experts, and damages experts.
Acquaviva & Castiglione on Judicial Diversity
Gregory L. Acquaviva (Law Clerk, Unites States Court of Appeals for the Third Circuit) and John D. Castiglione (Latham & Watkins) have posted "Judicial Diversity on State Supreme Courts" on SSRN. It will be published in the Seton Hall Law Review.
The abstract states:
April 13, 2010
Hot Off The Presses: Recent Articles Of Interest
With hat tip to the Current Index of Legal Periodicals, here are some recent articles that may be of interest:
Bryan Adamson, Critical Error: Courts' Refusal to Recognize Intentional Race Discrimination Findings as Constitutional Facts, 28 Yale L. & Pol'y Rev. 1 (2009)
Philip S. Bonforte, Pushing Boundaries: The Role of Politics in Districting the Federal Circuit System, 6 Seton Hall Cir. Rev. 29 (2009)
Nan S. Ellis, The Class Action Fairness Act of 2005: The Story Behind the Statute, 35 J. Legis. 76 (2009)
James F. Ianelli, The Sound of Silence: Eligibility Qualifications and Article III, 6 Seton Hall Cir. Rev. 55 (2009)
Carolyn Shapiro, The Law Clerk Proxy Wars: Secrecy, Accountability, and Ideology in the Supreme Court, 37 Fla. St. U. L. Rev. 101 (2009)
Charles Silver & Geoffrey P. Miller, The Quasi-Class Action Method of Managing Multi-District Litigations: Problems and a Proposal, 63 Vand. L. Rev. 107 (2010)
Allison A. Luczak, Comment, A Delicate Balance of Life Tenure and Independence: Conditional Resignations from the Federal Bench, 93 Marq. L. Rev. 309 (2009)
April 12, 2010
Kapeliuk & Klement on Contracting Around Twombly
Daphna Kapeliuk and Alon Klement (Interdisciplinary Center Herzliyah - Radzyner School of Law) have posted on SSRN their forthcoming article Contracting Around Twombly, 60 DePaul L. Rev. (forthcoming Oct. 2010). Here's the abstract:
The Supreme Court's recent decisions in Bell Atlantic Corp. v. Twombly and Ashcroft v. Iqbal have generated a heated debate over which is the most just and efficient transsubstantive pleading standard. Unlike the vast scholarship that followed these decisions, we do not take sides in this debate. Instead, we focus on a subset of cases in which litigants have prior contractual relationships. We argue that if contracting parties are allowed to contract around the Twombly pleading standard, they will be able to overcome problems of inadequate screening and to realize both pre-dispute and post-dispute opportunities that would prove unfeasible otherwise.
Hence, we propose a novel approach for addressing the question whether the Twombly standard performs better than its predecessor in contract cases. We suggest that the answer to this question should be informed by analyzing the costs of modifying the Twombly standard and the difficulties in implementing such modification, in addition to the proportion of cases where this modification would have been chosen by contracting parties. As we show, even if aggregatively, over all contracts, the Twombly pleading standard would have been chosen less often, it may still promise improved efficiency and justice in contract cases, due to the lower costs of contracting around it.
JPML Announces Consolidation of Toyota Litigation
The JPML has ordered a consolidation of more than 200 lawsuits against Toyota before Judge James Selma in the Central District of California. This order combines the personal injury lawsuits with class actions alleging economic damages.
The order is available here.
As I have argued previously in the context of the 9/11 cases and Hurricane Katrina litigation, consolidating these lawsuits around such a loosely defined event, here, the acceleration problems, might not necessarily be the most efficient or just way of handling such mass tort litigation.
Bassett on Preclusion in Class Actions
Professor Debra Lyn Bassett (Southwestern Law School) has posted "Just Go Away: Representation, Due Process, and Preclusion in Class Actions" on SSRN. It will be published in the Brigham Young University Law Review.
The abstract states: