Civil Procedure & Federal Courts Blog

Dodge on Disaggregative Mechanisms

Jaime Dodge (University of Georgia) has posted Disaggregative Mechanisms: The New Frontier of Mass-Claims Resolution Without Class Actions to SSRN.

Aggregation has long been viewed as the primary if not sole vehicle for mass claims resolution. For a half-century, scholars have consistently viewed the consolidated litigation of similar claims through joinder, class actions and more recently multi-district litigation as the only mechanism for efficiently resolving mass claims. In this Article, I challenge that long-standing and fundamental conception. The Article seeks to reconceptualize our understanding of mass claims resolution, arguing that we are witnessing the birth of a second, unexplored branch of mass claims resolution mechanisms — which I term “disaggregative” dispute resolution systems because they lack the traditional aggregation of common questions that has been the hallmark of traditional mass claims litigation. Disaggregation returns to a focus on the individual akin to that of the single-plaintiff system, but uses either procedural or substantive streamlining, or a shift of costs to the defendant, to correct the asymmetries that prompted the creation of class actions. Many of our most innovative claims structures — from the BP GCCF and the fund created in the wake of the Costa Concordia disaster, to the common single-plaintiff arbitration clauses in consumer and employment agreements — use this new, bottom-up model of disaggregative mass claims resolution instead of the familiar top-down aggregative model.

These next-generation systems have been heralded as a significant advancement in mass claims resolution, capable of awarding more compensation to claimants more quickly and at lower cost than aggregate litigation. But like the single-plaintiff and aggregate litigation systems that preceded it, disaggregation has its flaws. Because the defendant typically designs these systems, they often give rise to questions about legitimacy and the accuracy of compensation. More shockingly, situating disaggregation within the existing doctrinal trends reveals that the rise of disaggregation allows corporations to avoid class actions in a far broader swath of cases than has previously been identified — such that class actions will, as a practical matter, proceed only at the defendant’s election, raising substantial questions about the viability of private actions as a mechanism for the enforcement of law. Yet, because these systems are the product of contract, attempts to restrict these systems have largely failed. The answer to these problems lies in an unlikely and potentially controversial approach: expanding rather than restricting the availability of disaggregation, by creating a public mechanism for disaggregation — comparable to the existing public aggregation mechanisms.

RJE

Miller on the Deformation of Federal Civil Procedure

Now available online is an article by Arthur Miller (NYU) entitled Simplified Pleading, Meaningful Days in Court, and Trials on the Merits: Reflections on the Deformation of Federal Procedure, 88 N.Y.U. L. Rev. 286 (2013). Here’s the abstract:

When the Federal Rules of Civil Procedure were promulgated in 1938, they reflected a policy of citizen access for civil disputes and sought to promote their resolution on the merits rather than on the basis of the technicalities that characterized earlier procedural systems. The federal courts applied that philosophy of procedure for many years. However, the last quarter century has seen a dramatic contrary shift in the way the federal courts, especially the U.S. Supreme Court, have interpreted and applied the Federal Rules and other procedural matters. This shift has produced the increasingly early procedural disposition of cases prior to trial. Indeed, civil trials, especially jury trials, are very few and far between today.

The author examines the significant manifestations of this dramatic change, and traces the shift in judicial attitude back to the three pro-summary judgment decisions by the Supreme Court in 1986. Furthermore, he goes on to discuss the judicial gatekeeping that has emerged regarding (1) expert testimony, (2) the constriction of class action certification, (3) the enforcement of arbitration clauses in an extraordinary array of contracts (many adhesive in character), (4) the Court’s abandonment of notice pleading in favor of plausibility pleading (which, in effect, is a return to fact pleading), (5) the intimations of a potential narrowing of the reach of in personam jurisdiction, and (6) a number of limitations on pretrial discovery that have resulted from Rule amendments during the last twenty-five years.

All of these changes restrict the ability of plaintiffs to reach a determination of their claims’ merits, which has resulted in a narrowing effect on citizen access to a meaningful day in court. Beyond that, these restrictive procedural developments work against the effectiveness of private litigation to enforce various public policies involving such matters as civil rights, antitrust, employment discrimination, and securities regulation.

Concerns about abusive and frivolous litigation, threats of extortionate settlements, and the high cost of today’s large-scale lawsuits motivate these deviations from the original philosophy of the Federal Rules, but these concerns fail to take proper account of other systemic values. The author argues that these assertions are speculative and not empirically justified, are overstated, and simply reflect the self-interest of various groups that seek to terminate claims asserted against them as early as possible to avoid both discovery and a trial. Indeed, they simply may reflect a strong pro-business and pro-government orientation of today’s federal judiciary. The author cautions that some restoration of the earlier underlying philosophy of the Federal Rules is necessary if we are to preserve the procedural principles that should underlie our civil justice system and maintain the viability of private litigation as an adjunct to government regulation for the enforcement of important societal policies and values.

--A 

Epstein on Comcast v. Behrend

Professor Richard Epstein (NYU) has a post on PointofLaw.com entitled The Precarious Status of Class Action Antitrust Litigation after Comcast v. Behrend. It begins:

The recent Supreme Court decision in Comcast v. Behrend is not likely to attract much popular press. The case is worlds apart from the Court's highly publicized class-action decision in Wal-Mart v. Dukes, which addressed burning issues of workplace parity between men and women. In contrast, Behrend reads like a quintessential technical case reserved for class action gurus and antitrust professionals. But on closer look, it may well turn out to be much more.

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Grimmelman on Future Conduct and Class Actions

James Grimmelman (New York Law School) has posted Future Conduct and the Limits of Class-Action Settlements to SSRN.

This Article identifies a new and previously unrecognized trend in class-action settlements: releases for the defendant’s future conduct. Such releases, which hold the defendant harmless for wrongs it will commit in the future, are unusually dangerous to class members and to the public. Even more than the “future claims” familiar to class-action scholars, future-conduct releases pose severe informational problems for class members and for courts. Worse, they create moral hazard for the defendant, give it concentrated power, and thrust courts into a prospective planning role they are ill-equipped to handle.

Courts should guard against the dangers of future-conduct releases with a standard and a rule. The standard is heightened scrutiny for all settlements containing such releases; the Article describes the warning signs courts must be alert to and the safeguards courts should insist on. The rule is parity of preclusion: a class-action settlement may release future-conduct claims if and only if they could have been lost in litigation. Parity of preclusion elegantly harmonizes a wide range of case law while directly addressing the normative problems with future- conduct releases. The Article concludes by applying its recommendations to seven actual future-conduct settlements, in each case yielding a better result or clearer explanation than the court was able to provide.

RJE

Erichson on Settlement Class Actions

Professor Howard Erichson (Fordham) has posted on SSRN a draft of his article, The Problem of Settlement Class Actions. Here’s the abstract:

This article argues that class actions should never be certified solely for purposes of settlement. Contrary to the widespread “settlement class action” practice that has emerged in recent decades, contrary to current case law permitting settlement class certification, and contrary to recent proposals that would extend and facilitate settlement class actions, this article contends that settlement class actions are ill-advised as a matter of litigation policy and illegitimate as a matter of judicial authority. This is not to say that disputes should not be resolved on a classwide basis, or that class actions should not be resolved by negotiated resolutions. Rather, this article contends that if a dispute is to be resolved on a classwide basis, then the resolution should occur after a court has found the matter suitable for classwide adjudication regardless of settlement.

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Seiner on Wal-Mart v. Dukes

Professor Joe Seiner (South Carolina) has posted on SSRN a draft of his article, Weathering Wal-Mart, which will be published in the Notre Dame Law Review. Here’s the abstract:

In Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2531 (2011), the Supreme Court held that a proposed class of over a million women that had alleged pay and promotion discrimination against the nation’s largest retailer could not be certified. According to the Court, the plaintiffs had failed to establish a common thread in the case sufficient to tie their claims together. The academic response to Wal-Mart was immediate and harsh: the decision will serve as the death knell for mass employment litigation, undermining the workplace protections provided by Title VII of the Civil Rights Act of 1964 (Title VII). This Article embraces the view offered by scholars to date, and does not engage the debate over the extent to which Wal-Mart will eviscerate the employment rights of workers.

Instead, this Article attempts — for the first time — to find a solution to the problem created by Wal-Mart. The academic literature has yet to explore possible ways to minimize the impact of the Court’s decision, and this Article seeks to fill that void in the scholarship. Though the case undoubtedly weakens the ability of Title VII plaintiffs to pursue class-action claims, the decision still leaves substantial room for creative approaches to systemic discrimination. This paper offers three such solutions to the problem created by Wal-Mart: the governmental approach, the procedural response, and revised relief. This Article critiques each approach, and explains how they are useful in pursuing workplace cases that involve company-wide discrimination. This paper also situates these proposals in the context of the existing literature.

The thesis of this Article is simple. Taking at face value the argument of scholars that Wal-Mart has created a gaping hole for victims of systemic discrimination, this paper asks what tools are still available for plaintiffs to help fill that hole. Wal-Mart signals a sea change for mass-employment litigation. The challenge now will be to find imaginative ways of pursuing systemic discrimination claims. For the first time in the academic literature, this Article takes on that challenge.

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SCOTUS Remands Two Class Actions in the Wake of Comcast Corp. v. Behrend

Yesterday’s Supreme Court order list includes “GVRs” in two class actions, remanding them “for further consideration in light of Comcast Corp. v. Behrend.” The two cases are RBS Citizens, N.A. v. Ross (No. 12-165), which was sent back to the Seventh Circuit, and Whirlpool Corp. v. Glazer (No. 12-322), which was sent back to the Sixth Circuit. For more coverage, check out:

• Lyle Denniston (SCOTUSblog)
• Lawrence Hurley (Reuters)
• Jessie Kokrda Kamens & Martina S. Barash (Bloomberg BNA, Class Action Litigation Report; subscription required)
• Alexandra Lahav (Mass Tort Litigation Blog)

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SCOTUS Decision in Comcast Corp. v. Berhend

Today the Supreme Court decided Comcast Corp. v. Behrend (No. 11-864), a case challenging a Third Circuit decision affirming certification of an antitrust class action. For our earlier coverage, see here and here. By a 5-to-4 vote, the Court concluded that the class action did not satisfy Rule 23(b)(3). Justice Scalia writes the majority opinion. Here’s an excerpt [Slip Op. 6-7]:

Respondents’ class action was improperly certified under Rule 23(b)(3). By refusing to entertain arguments against respondents’ damages model that bore on the propriety of class certification, simply because those arguments would also be pertinent to the merits determination, the Court of Appeals ran afoul of our precedents requiring precisely that inquiry. And it is clear that, under the proper standard for evaluating certification, respondents’ model falls far short of establishing that damages are capable of measurement on a classwide basis. Without presenting another methodology, respondents cannot show Rule 23(b)(3) predominance: Questions of individual damage calculations will inevitably overwhelm questions common to the class.

The dissenting opinion is co-authored by Justices Ginsburg and Breyer, and joined by Sotomayor and Kagan. Among other things, the dissenters argue that case should have been DIG’ed—that the writ of certiorari should have been dismissed as improvidently granted. [See Dissenting Op. 1-2] They note that the Supreme Court had reformulated the question presented when granting certiorari, but that “our reformulated question was inapt” given Comcast’s failure to preserve certain issues.Turning to Rule 23, the dissenting opinion states:

While the Court’s decision to review the merits of the District Court’s certification order is both unwise and unfair to respondents, the opinion breaks no new ground on the standard for certifying a class action under Federal Rule of Civil Procedure 23(b)(3). In particular, the decision should not be read to require, as a prerequisite to certification, that damages attributable to a classwide injury be measurable “‘on a class-wide basis.’” See ante, at 2–3 (acknowledging Court’s dependence on the absence of contest on the matter in this case); Tr. of Oral Arg. 41. To gain class-action certification under Rule 23(b)(3), the named plaintiff must demonstrate, and the District Court must find, “that the questions of law or fact common to class members predominate over any questions affecting only individual members.” This predominance requirement is meant to “tes[t] whether proposed classes are sufficiently cohesive to warrant adjudication by representation,” Amchem Products, Inc. v. Windsor, 521 U.S. 591, 623 (1997), but it scarcely demands commonality as to all questions. See 7AA C. Wright, A. Miller, & M. Kane, Federal Practice and Procedure §1778, p. 121 (3d ed. 2005) (hereinafter Wright, Miller, & Kane). In particular, when adjudication of questions of liability common to the class will achieve economies of time and expense, the predominance standard is generally satisfied even if damages are not provable in the aggregate. See Advisory Committee’s 1966 Notes on Fed. Rule Civ. Proc. 23, 28 U. S. C. App., p. 141 (“[A] fraud perpetrated on numerous persons by the use of similar misrepresentations may be an appealing situation for a class action, and it may remain so despite the need, if liability is found, for separate determination of the damages suffered by individuals within the class.”); 7AA Wright, Miller, & Kane §1781, at 235–237. Recognition that individual damages calculations do not preclude class certification under Rule 23(b)(3) is well nigh universal. 

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Moore on Confronting the Myth of "State Court Class Action Abuses"

In the shameless self-promotion category . . .

I have posted on SSRN a draft of my article "Confronting the Myth of 'State Court Class Action Abuses' Through an Understanding of Heuristics and a Plea for More Statistics."  The paper has been accepted for publication in the UMKC Law Review, Volume 82, No. 1 (2013).

Abstract:

      The Supreme Court heard five cases involving class actions this term.  One of these cases, Standard Fire Insurance Company v. Knowles, brought the Class Action Fairness Act to the Court for the first time.  Petitioner insurance company and its numerous business-interest amici repeatedly claimed before the Court that "state court class action abuses" should justify removal of the case (which was based on state law and filed in state court) to federal court. 

      The charge of "state court class action abuses" echoes the same rhetoric that CAFA's supporters used in their ultimately successful efforts to pass the legislation.  Hyperbolic assertions of a "flood of state court class actions" in which plaintiffs' lawyers were "abusing" the limits of diversity jurisdiction to keep cases in state court, and state courts were "abusing" the class action device by granting "drive-by" class certifications, fill the pages of CAFA's legislative history.

        Unfortunately for the quality of the debate, then and now, no current data and very little past data about class actions are readily and publicly available, for federal or state courts.  In other words, courts in the United States offer no data on such basic questions as the number of cases filed as class actions, the percentage of cases designated as class actions that are eventually certified as such, or the ultimate disposition of such cases.  

        To be sure, the herculean efforts of the Federal Judicial Center, the California Office of Court Research, and private academic researchers have resulted in the compilation of databases that provided partial answers to some of these questions.  But these limited efforts are well beyond the resources and skill available to the public, the press, and even to most policy-makers and the Court. 

      What does the lack of baseline data on class actions mean?  A wealth of psychological research has shown that human cognition and judgment are subject to a variety of heuristics and biases.  For example, the mantra of "state court class action abuses" has a "priming effect" making it easier to see or imagine such "abuses."  Further, the mind automatically attempts to create a coherent story out of the information it has, even if that information is incomplete or invalid.  This manifests itself in many ways, including the "anchoring effect," the "availability heuristic," and the "representativeness heuristic," which are exploited by those spreading the myth of "state court class action abuses."  Even if a person knew the base rate of class action filings or dispositions, for example, the "representativeness heuristic" would make it difficult to avoid making judgments about class actions based on negative stereotypical anecdotes.  Without such base rates available at all, it will be almost impossible.  One can only hope that the Court will resist the lure of class action mythology as it considers the five class action cases pending this term.

PM

SCOTUS Decision in Standard Fire Insurance v. Knowles

Today the Supreme Court issued a unanimous decision in Standard Fire Insurance Co. v. Knowles (No. 11-1450), covered earlier here. The Court concludes that removal under the Class Action Fairness Act (CAFA) is proper even if the named plaintiff in a state court class action stipulates that the class will not seek aggregate damages in excess of CAFA’s $5 million threshold.

Justice Breyer’s opinion (a quick read at 7 pages) emphasizes that—prior to class certification—the named plaintiff’s stipulation is not binding on the other class members:

[A] plaintiff who files a proposed class action cannot legally bind members of the proposed class before the class is certified. See Smith v. Bayer Corp., 564 U. S. ___, ___ (2011)…. Because his precertification stipulation does not bind anyone but himself, Knowles has not reduced the value of the putative class members’ claims. For jurisdictional purposes, our inquiry is limited to examining the case “as of the time it was filed in state court,” Wisconsin Dept. of Corrections v. Schacht, 524 U. S. 381, 390 (1998). At that point, Knowles lacked the authority to concede the amount-in-controversy issue for the absent class members. [Slip Op. 4]

Justice Breyer is more sympathetic to a different argument against CAFA jurisdiction. He writes:  

The strongest counterargument, we believe, takes a syllogistic form: First, this complaint contains a presently nonbinding stipulation that the class will seek damages that amount to less than $5 million. Second, if the state court eventually certifies that class, the stipulation will bind those who choose to remain as class members. Third, if the state court eventually insists upon modification of the stipulation (thereby permitting class members to obtain more than $5 million), it will have in effect created a new, different case. Fourth, CAFA, however, permits the federal court to consider only the complaint that the plaintiff has filed, i.e., this complaint, not a new, modified (or amended) complaint that might eventually emerge. [Slip Op. 5-6]

But he is ultimately unpersuaded:

Our problem with this argument lies in its conclusion. We do not agree that CAFA forbids the federal court to consider, for purposes of determining the amount in controversy, the very real possibility that a nonbinding, amount-limiting, stipulation may not survive the class certification process. This potential outcome does not result in the creation of a new case not now before the federal court. To hold otherwise would, for CAFA jurisdictional purposes, treat a nonbinding stipulation as if it were binding, exalt form over substance, and run directly counter to CAFA’s primary objective: ensuring “Federal court consideration of interstate cases of national importance.” §2(b)(2), 119 Stat. 5. It would also have the effect of allowing the subdivision of a $100 million action into 21 just-below-$5-million state-court actions simply by including nonbinding stipulations; such an outcome would squarely conflict with the statute’s objective. [Slip Op. 6]

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SCOTUS Decision in Amgen: Class Certification in Securities Fraud Cases

Today the Supreme Court issued its decision in Amgen v. Connecticut Retirement Plans (No. 11-1085), covered earlier here. The basic issue is whether, in a securities fraud case, proof of “materiality” is required in order to certify a class action. The Court splits 6-to-3, with Justice Ginsburg writing the majority opinion (joined by Roberts, Breyer, Alito, Sotomayor, and Kagan). Here’s an excerpt from the first few paragraphs of Justice Ginsburg’s opinion (Slip Op. 2-3):

The issue presented concerns the requirement stated in Rule 23(b)(3) that “the questions of law or fact common to class members predominate over any questions affecting only individual members.” Amgen contends that to meet the predominance requirement, Connecticut Retirement must do more than plausibly plead that Amgen’s alleged misrepresentations and misleading omissions materially affected Amgen’s stock price. According to Amgen, certification must be denied unless Connecticut Retirement proves materiality, for immaterial misrepresentations or omissions, by definition, would have no impact on Amgen’s stock price in an efficient market.

While Connecticut Retirement certainly must prove materiality to prevail on the merits, we hold that such proof is not a prerequisite to class certification. Rule 23(b)(3) requires a showing that questions common to the class predominate, not that those questions will be answered, on the merits, in favor of the class. Because materiality is judged according to an objective standard, the materiality of Amgen’s alleged misrepresentations and omissions is a question common to all members of the class Connecticut Retirement would represent. The alleged misrepresentations and omissions, whether material or immaterial, would be so equally for all investors composing the class. As vital, the plaintiff class’s inability to prove materiality would not result in individual questions predominating. Instead, a failure of proof on the issue of materiality would end the case, given that materiality is an essential element of the class members’ securities­fraud claims. As to materiality, therefore, the class is entirely cohesive: It will prevail or fail in unison. In no event will the individual circumstances of particular class members bear on the inquiry.

Essentially, Amgen, also the dissenters from today’s decision, would have us put the cart before the horse. To gain certification under Rule 23(b)(3), Amgen and the dissenters urge, Connecticut Retirement must first establish that it will win the fray. But the office of a Rule 23(b)(3) certification ruling is not to adjudicate the case; rather, it is to select the “metho[d]” best suited to adjudication of the controversy “fairly and efficiently.”

Justice Alito writes a concurring opinion. Justice Scalia writes a dissenting opinion. And Justice Thomas writes a dissenting opinion (joined by Kennedy and partially by Scalia).

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Judge Rules on Motion to Dismiss Second Amended Complaint in BP Securities Litigation

On February 6, Judge Keith Ellison in the Southern District of Texas granted in part and denied in part defendants' motion to dismiss the Second Amended Complaint in MDL No. 10-md-2185, In re BP p.l.c. Securities Litigation. The ruling was summarized in the National Law Journal as "allow[ing] investors to go forward on claims that BP and former chief executive officer Anthony Hayward misled the public about the scope of BP's operating management system, or OMS—a safety program introduced before the 2010 [Deepwater Horizon] disaster spread millions of gallons of oil throughout the Gulf of Mexico."

--PM

Rate of Class Action Filings Hard To Gauge, Commentator Reports

An online ABA Section of Litigation article by Robert J. Herrington, “The Numbers Game – Dukes and Concepcion” attempted to address whether class action filings may be down after Dukes and Concepcion.  Like many of us, he discovered that such data is generally unavailable.  His review of several non-random surveys was inconclusive.

--PM

8th Circuit Decertifies Rule 23(b)(3) Class Action Involving Domino's Delivery Drivers

Yesterday the U.S. Court of Appeals for the Eighth Circuit issued its decision in Luiken v. Domino’s Pizza, LLC, which begins: 

The district court certified a Rule 23(b)(3) class of about 1,600 Minnesota delivery drivers employed by Domino’s Pizza LLC between March 6, 2006, and February 28, 2010. The drivers allege that, under Minnesota  law, a fixed delivery charge that customers paid Domino’s was a gratuity wrongfully withheld from them. This court granted an interlocutory appeal and now reverses the class certification.

Coverage here (from Brendan O’Brien, Thomson Reuters).

--A

(Hat tip: Michelle Olsen, @AppellateDaily)

Class Action Conference at GW

All Civil Procedure teachers are invited to attend a Symposium on Class Actions to be held at the George Washington University Law School on March 7 and 8.  Many of the leading academics and class action practitioners in the nation will be participating on the five panels discussing the many controversial issues attending modern class action litigation.  The Symposium is jointly sponsored by the James F. Humphreys Complex Litigation Center at GW and by Public Justice.  Papers prepared for the Symposium by panelists will later be published in the GW Law Review.

 

There is no registration fee, but if you plan to attend please notify Frances Arias [farias@law.gwu.edu] at GW of your intentions so that the GW Law School can plan for your visit.  If you have questions about the event, please feel free to contact Professor Roger Trangsrud at GW [rtrang@law.gwu.edu and 202-994-6182].

 

A summary of the program is set out below.

 

 

                Schedule for Class Action Conference at GW on March 7-8

 

                Thursday

 

2:00 p.m. - Introductory Remarks [Burns Moot Court Room at GW Law]

 

2:15 - 3:45 p.m. - Panel One  

 

                The Proper Process to Follow before a Certification Decision is Made

 

                What evidentiary showing must the plaintiffs make before the trial court may certify a class action?  To what extent should the court assess the merits of the plaintiff’s case in making the certification decision?  Is this consistent with the Seventh Amendment?  To what extent should the trial court  evaluate the expert witness testimony of the parties before making the certification decision?  Does Daubertg apply and, if so, should Daubert hearings be held at this point?  Should pre-certification discovery be regulated or not?

 

                Moderator: Rick Marcus [Hastings]

 

                Panelists: Geoff Hazard [Hastings], Linda Mullenix [Texas], George Gordon [Dechert], Tom Sobol [Hagens Berman], Gerson Smoger [Smoger & Asso.]

 

4:00 - 5:30 p.m. - Panel Two

 

                Common Questions:  The Proper Relationship of 23(a)(2), 23(b)(3), and 23(c)(4) 

 

                Did the Supreme Court in Dukes properly interpret the 23(a)(2) common question requirement?  What must plaintiffs prove to show that common questions predominate over noncommon questions?  If class counsel has not asserted all claims available to class members, does that justify denying certification?  Should class actions be certified which will resolve some common issues, but which will later require individual adjudication of the remaining noncommon issues?  For common issues to predominate, must plaintiffs show that some proportion of the class suffered the relevant form of the injury?

 

                Moderator: Alan Morrison [GW]

 

                Panelists: Bob Bone [Texas], Josh Davis [San Francisco], Eric Cramer [Berger & Montague], Ted Boutros [Gibson Dunn]

 

 

                Friday

 

9:00 - 10:30 a.m. - Panel Three

 

                Class Actions and Remedies

 

                To what extent, if at all, can plaintiffs seek monetary remedies in b(1) or b(2) class actions?  Should class actions be certified if it is likely impracticable to distribute some or all of any resulting monetary settlement or judgment to the class?  Can the amount of the class recovery be determined by statistical sampling or other approximating methods or is individual proof of each class member’s loss necessary?  Should cy pres and fluid damage remedies by allowed in class actions and, if so, when and subject to what rules?

 

                Moderator: Bill Rubenstein [Harvard]

 

                Panelists: Ed Sherman [Tulane], Bob Klonoff [Lewis & Clark], Jay Tidmarsh [Notre Dame], Arthur Bryant [Public Justice]

 

 

10:45 a.m. - 12:15 p.m. - Panel Four

 

                Settlement Class Actions and Settlement Approval  

 

                Should the standard for class certification be different for purposes of settlement than for purposes of litigation?  If so, how?  Should the rules for approving class action settlements be altered?  If so, how?  Need every member of a settlement class have a viable claim?  How can the system ensure fairness, adequacy, and reasonableness of class action settlements without leaving legitimate settlements vulnerable to unjustified objections?

 

                Moderator: Sam Issacharoff [NYU]

 

                Panelists: Howard Erichson [Fordham], Roger Trangsrud [GW], Brian Fitzpatrick [Vanderbilt],  Elizabeth Cabraser [Lieff, Cabraser], David Sorensen [Berger & Montague]

 

 

2:00 - 3:30 p.m. - Panel Five

 

                Arbitration and Class Actions

 

                Should any form of class action be allowed in arbitration proceedings?  Are there any limits on the ability of employers or merchants to restrict the ability of employees or consumers to pursue class action litigation?  Should arbitration clauses be enforced even where doing so would prevent the effective vindication of substantive rights?  Does it matter that such substantive rights arise out of state or federal law?  Should legislation be passed or Rule 23 amended to define when negative value claims can be pursued within or without the arbitration process?

 

                Moderator: Rich Freer [Emory]

 

                Panelists: Myriam Gilles [Cardozo], Deborah Hensler [Stanford], Paul Bland [Public Justice], Jon Jacobson [Wilson, Sonsini], Jon Cuneo [Cuneo Gilbert]

RJE

SCOTUS Cert Grants on SLUSA: The Troice Troika

On Friday the Supreme Court granted certiorari in three cases on the Securities Litigation Uniform Standards Act (SLUSA). At issue is the scope of SLUSA’s 15 U.S.C. § 78bb(f)(1)(A), which blocks class actions based on state law that involve “a misrepresentation or omission of a material fact in connection with the purchase or sale of a covered security.” Links below:

Chadbourne & Parke v. Troice, No. 12-79:

• Question Presented
• Supreme Court Docket
• SCOTUSblog Case File

Willis of Colorado Inc. v. Troice, No. 12-86:

• Question Presented
• Supreme Court Docket
• SCOTUSblog Case File

Proskauer, Rose v. Troice, No. 12-88

• Question Presented
• Supreme Court Docket
• SCOTUSblog Case File

For more coverage, see:

• Lyle Denniston (SCOTUSblog)
• Mark Sherman (Associated Press)
• Greg Stohr (Bloomberg)

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SCOTUS Oral Argument in Standard Fire v. Knowles

Yesterday the Supreme Court heard oral argument in The Standard Fire Insurance Co. v. Knowles (No. 11-1450), which considers whether plaintiffs can block CAFA removal by stipulating that the class is seeking damages below the $5 million threshold for CAFA diversity jurisdiction. Check out the oral argument transcript.

For additional coverage:

• Associated Press (Mark Sherman)
• Bloomberg (Greg Stohr)
• How Appealing (Howard Bashman)
• National Law Journal (Tony Mauro)
• N.Y. Times (Adam Liptak)
• Reuters (Jonathan Stempel)
• SCOTUSblog (Prof. Debra Lyn Bassett, Southwestern Law School)
• @SCOTUSHUMOR (Prof. Jay Wexler, Boston University)

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Freer on Class Actions at the Supreme Court

Professor Richard Freer (Emory) has posted on SSRN a draft of his article, The Supreme Court and the Class Action: Where We Are and Where We Might Be Going. Here's the abstract:

In 2010 and 2011, the Supreme Court decided five class action cases. In 2012, it has agreed to hear four more. This piece summarizes what the Court has done and where it appears to be going concerning aggregate litigation. The goal of this piece is more practical than theoretical: to place all nine cases in context and draw preliminary conclusions about the impact these cases have had and will have -- not only on class action practice, but in other areas, including the Erie Doctrine, waivers of class arbitration, anti-suit injunctions, the binding effect of judgments on class members, enforcement of Rule 10b-5, and the apparent efforts of defendants to front-load litigation by demanding greater consideration of merits-based facts (and qualification of experts) at the class certification stage.

The cases dealing with waivers of class arbitration implicate the role of the civil suit in law enforcement. If small (usually consumer) claims cannot be pursued on an aggregate basis, they may never be vindicated; individuals and lawyers will not find it economically feasible to do so. Yet the Court appears unwilling to recognize a public-policy exception to the primacy of contract. Thus, if the underlying contract waives aggregate litigation or arbitration, apparently this will not be trumped by the concern that the relevant law (often consumer protection laws) will not be enforced through civil litigation.

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The Seventh Circuit Explains “Incidental Monetary Relief” that May be Certified Under Rule 23(b)(2)

A new Case Note posted by the ABA Class Action & Derivative Suits Committee:

Judge Posner's opinion in Johnson v. Meriter Health Services Employee Retirement Plan, No. 12-2216 (7th Cir. Dec. 4, 2012), focuses on one question arguably left open by Wal-Mart Stores v. Dukes – what kind of incidental monetary relief may be certified in a Rule 23(b)(2) case? The Court affirmed the class certification order in this ERISA class action, concluding that the variations and the complexity of the claims did not destroy commonality because the claims of each sub-class were homogeneous. The Court also noted that the Supreme Court's holding that damages could not be sought in a Rule 23(b)(2) action was limited to “monetary relief [which] is not incidental to
the injunctive or declaratory relief.” Here, the plan participants were permitted to seek monetary relief incidental to the declaration of their rights under the subject pension plan. The Court also provided detailed guidance as to calculating this incidental monetary relief where the plaintiffs' claims might require an evidentiary hearing, including certification of a Rule 23(b)(2) class with notice and opt out, bifurcated certification, or damage calculations via a computer program.

Submitted by Jocelyn Larkin, Impact Fund

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This Week's SCOTUS Oral Arguments: Mootness, Class Actions, And FRCP 54(d) (Oh My!)

The Supreme Court heard oral argument in several interesting cases this week. Below are some links…

Already LLC v. Nike Inc., No. 11-982 (Article III & mootness)

• Oral argument transcript
• PatentlyO (Megan La Belle)
• Reuters (Jonathan Stempel)
• SCOTUSblog (Lyle Denniston)

Amgen Inc. v. Connecticut Retirement Plans, No. 11-1085 (class actions)

• Oral argument transcript
• Jurist (Julia Zebley)
• N.Y. Times (Adam Liptak)
• Point of Law (Ted Frank)
• Reuters (Jonathan Stempel)
• SCOTUSblog (Steven Kaufhold)

Comcast v. Behrend, No. 11-864 (class actions)

• Oral argument transcript
• Jurist (Julia Zebley)
• N.Y. Times (Adam Liptak)
• Reuters (Jonathan Stempel)
• SCOTUSblog (Sergio Campos)
• Wall Street Journal (Brent Kendall)
  

Marx v. General Revenue Corp., No. 11-1175 (Rule 54(d))

• Oral argument transcript
• Consumer Financial Services Blog (Don Maurice)

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