Monday, June 12, 2017
Today the Supreme Court issued its long-awaited decision in Microsoft Corp. v. Baker, a case for which cert was granted nearly a year and a half ago. The plaintiffs in the case had sought certification of a class action, but the district court refused. After failing to receive permission to appeal the class-certification ruling under Rule 23(f), the plaintiffs (in the words of Justice Ginsburg’s majority opinion) “stipulated to a voluntary dismissal of their claims ‘with prejudice,’ but reserved the right to revive their claims should the Court of Appeals reverse the District Court’s certification denial.”
Today’s decision finds that such a stipulated voluntary dismissal did not create appellate jurisdiction, although the Court splits 5-3 on the basis for that conclusion. Joined by Justices Kennedy, Breyer, Sotomayor and Kagan, Justice Ginsburg writes:
We hold that the voluntary dismissal essayed by respondents does not qualify as a “final decision” within the compass of §1291. The tactic would undermine §1291’s firm finality principle, designed to guard against piecemeal appeals, and subvert the balanced solution Rule 23(f) put in place for immediate review of class-action orders.
A concurring opinion by Justice Thomas (joined by Chief Justice Roberts and Justice Alito) concludes that there was a “final decision” for purposes of § 1291, because the district court’s order “dismissed all of the plaintiffs’ claims with prejudice and left nothing for the District Court to do but execute the judgment.” Justice Thomas, however, reasons that “the Court of Appeals lacked jurisdiction under Article III of the Constitution,” because “[w]hen the plaintiffs asked the District Court to dismiss their claims, they consented to the judgment against them and disavowed any right to relief from Microsoft.”
Justice Gorsuch—who was not yet on the Court at the time of oral argument—took no part in the case.
Monday, April 17, 2017
Today’s oral arguments at the Supreme Court featured lots of civil procedure and federal courts issues. Transcripts below:
- Perry v. Merit Systems Protection Board (earlier coverage here)
- Town of Chester v. Laroe Estates (earlier coverage here)
- California Public Employees Retirement System v. ANZ Securities (earlier coverage here)
Friday, April 7, 2017
Russell Gold has posted on SSRN his article, “Clientless” Lawyers, 92 Wash. L. Rev. 87 (2017). Here’s the abstract:
Class counsel and prosecutors have a lot more in common than scholars realize. These lawyers have clients, but their clients are diffuse and lack a formal decisionmaking structure. Because of the nature of their clients, class counsel and prosecutors have to make decisions for their clients that one would ordinarily expect clients to make — and indeed that legal ethics rules would expressly require clients to make in other contexts — such as decisions concerning objectives of representation or whether to settle or plead guilty. Both complex litigation and criminal law scholars recognize that these lawyers’ self-interests diverge from their clients’ interests. But the complex litigation and criminal law literatures discuss the ensuing accountability problem solely in their own spheres. This article considers the insights about accountability that complex litigation can learn from criminal law.
More specifically, the article argues that although there are real differences between the two systems, these differences do not justify the completely different approaches to accountability that the two contexts employ. Rather, the comparison suggests that internal checks within class counsel’s firm, between plaintiffs’ firms, or between third-party funders and class counsel can improve accountability, much as internal checks improve accountability within some prosecutors’ offices.
Wednesday, March 29, 2017
Nora Freeman Engstrom has posted on SSRN her article, Retaliatory RICO and the Puzzle of Fraudulent Claiming, 115 Mich. L. Rev. 639 (2017). Here’s the abstract:
Over the past century, the allegation that the tort liability system incentivizes legal extortion and is chock-full of fraudulent claims has dominated public discussion and prompted lawmakers to ever-more-creatively curtail individuals’ incentives and opportunities to seek redress. Unsatisfied with these conventional efforts, in recent years, at least a dozen corporate defendants have "discovered” a new fraud-fighting tool. They’ve started filing retaliatory RICO suits against plaintiffs and their lawyers and experts, alleging that the initiation of certain nonmeritorious litigation constitutes racketeering activity—while tort reform advocates have applauded these efforts and exhorted more “courageous” companies to follow suit.
Curiously, though, all of this has taken place against a virtual empirical void. Is the tort liability system actually brimming with fraudulent claims? No one knows. There has been no serious attempt to analyze when, how often, or under what conditions fraudulent claiming proliferates. Similarly, tort reformers support RICO’s use because, they say, conventional mechanisms to deter fraud fall short. But are conventional mechanisms insufficient? Hard to say, as there is no comprehensive inventory of the myriad formal and informal mechanisms already in use; nor do we have even a vague sense of how those mechanisms actually operate. Further, though courts have started to green-light retaliatory RICO actions, no one has carefully analyzed whether these suits are, on balance, beneficial. Indeed, few have so much as surfaced relevant risks. Addressing these questions, this Article attempts to bring overdue attention to a problem central to the tort system’s operation and integrity.
Tuesday, March 21, 2017
Several interesting civil procedure cases on the Supreme Court’s March 2017 oral argument calendar (more details in the links)...
Today (3/21): Microsoft v. Baker
Tomorrow (3/22): Water Splash v. Menon
Monday (3/27): TC Heartland v. Kraft Foods
Friday, March 10, 2017
We covered earlier several bills that could make significant changes to federal civil procedure. Two of these passed the House of Representatives yesterday.
- H.R. 725 (the Innocent Party Protection Act) passed by a vote of 224–194.
- H.R. 985 (the Fairness in Class Action Litigation Act) passed by a vote of 220-201-1.
Stay tuned. Getting to 60 votes in the Senate will be a more difficult proposition.
Thursday, March 9, 2017
Now on the Courts Law section of JOTWELL is Suzette Malveaux’s essay, The Impact of Wal-Mart v. Dukes on Employment Discrimination Class Actions Five Years Out: A Forecast That Suggests More a Wave Than a Tsunami. Suzette reviews a recent article by Michael Selmi & Sylvia Tsakos, Employment Discrimination Class Actions After Wal-Mart v. Dukes, 48 Akron L. Rev. 803 (2015).
Monday, March 6, 2017
Now on the Courts Law section of JOTWELL is Alexandra Lahav’s essay, (Almost) Everything You Wanted to Know About Class Actions. Alexandra reviews John Coffee’s recent book, Entrepreneurial Litigation: Its Rise, Fall, and Future.
Thursday, March 2, 2017
The House of Representatives Committee on Rules has announced that it will meet the week of March 6 “to grant a rule that may provide a structured amendment process for floor consideration of” H.R. 720 (amendments to FRCP 11), H.R. 725 (on so-called “fraudulent” joinder), and H.R. 985 (on class actions and MDLs).
Hat tip: Adam Zimmerman
Wednesday, February 22, 2017
Tuesday, February 21, 2017
Friday, February 17, 2017
Five bills that would generally operate to favor corporate defendants in civil lawsuits have passed the House Judiciary Committee with blinding speed and have been referred to the full House:
Fairness in Class Action Litigation Act
Bob Goodlatte (R-VA-6)
Furthering Asbestos Claim Transparency (FACT) Act
Blake Farenthold (R-TX-27)
Stop Settlement Slush Funds Act
Bob Goodlatte (R-VA-6)
Innocent Party Protection Act
Ken Buck (R-CO-4)
Lawsuit Abuse Reduction Act
Lamar Smith (R-TX-21)
We briefly described four of the bills here. The bills are opposed by over 50 advocacy groups for civil rights, consumer protection, and environmental protection.
Thursday, February 16, 2017
Theodore Eisenberg (deceased), Geoffrey Miller, and Roy Germano have posted on SSRN their paper Attorneys' Fees in Class Actions: 2009-2013, a follow-up to earlier studies.
We study attorney fee awards in 458 class action settlements reported in the five years from 2009-2013. Despite the financial crisis and its many effects on our national life, little has changed in class action attorneys’ fees. Average percentage fees are in line with prior studies. The key determinant of the fee continues to be the size of the class recovery: the amazingly regular relationship between these variables continues in the present data. We continue to find a “scaling” effect, in the sense that fees as a percentage of the recovery decrease as the size of the recovery increases. As in the previous Eisenberg-Miller studies, we find that fees are a function of risk – larger fees in higher-risk cases – although in the most recent data the effect is only weakly statistically significant. We document an inverse relationship between the percentage fee and the lodestar multiplier: cases with lower percentage fees are associated with higher multipliers. Likewise lodestar multipliers tend to rise with the size of class recovery.
Monday, February 13, 2017
While Trump Distracts, Republicans Introduce Four Bills Restricting Ordinary Citizens’ Access to the Courts
Four bills have been introduced in Congress that would limit plaintiffs' access to the courts. The title of each bill is misleading, in that the effect of each bill would be very different from what its title indicates.
1. Probably the most far-ranging bill is the so-called "Fairness in Class Action Litigation Act of 2017," H.R. 985.
This bill would critically hobble class actions by making them much more difficult to certify and reducing the compensation to plaintiffs’ class action lawyers.
The major provisions of the bill with respect to class actions are (this is not an exhaustive list):
Saturday, January 28, 2017
Here is the complaint in Darweesh v. Trump, which was filed early this morning in U.S. District Court for the Eastern District of New York:
Some coverage of the case:
Friday, January 13, 2017
Today the U.S. Supreme Court granted certiorari in California Public Employees' Retirement System v. ANZ Securities, Inc., which presents the question: “Does the filing of a putative class action serve, under the American Pipe rule, to satisfy the three-year time limitation in Section 13 of the Securities Act with respect to the claims of putative class members?”
(This question was the subject of an earlier Supreme Court case (IndyMac), but cert in that case was dismissed as improvidently granted because of a settlement.)
You can find all the cert-stage briefing—and follow the merits briefs as they come in—at SCOTUSblog.
Today the U.S. Supreme Court granted certiorari in three cases that raise the question of whether arbitration agreements that forbid class claims violate federal labor law. The cases, which were consolidated by the Court, are:
Tuesday, January 10, 2017
Last week, the U.S. Court of Appeals for the Ninth Circuit decided Briseno v. ConAgra Foods Inc., which addresses what has come to be known in other federal courts as the “ascertainability” requirement. The entire opinion is worth a read, but here are some highlights.
At the outset, the court took issue with the term “ascertainability.” It explained in a footnote:
ConAgra called this a failure of “ascertainability.” We refrain from referring to “ascertainability” in this opinion because courts ascribe widely varied meanings to that term. For example, some courts use the word “ascertainability” to deny certification of classes that are not clearly or objectively defined. See, e.g., Brecher v. Republic of Argentina, 806 F.3d 22, 24–26 (2d Cir. 2015) (holding that a class defined as all owners of beneficial interests in a particular bond series, without reference to the time owned, was too indefinite); DeBremaecker v. Short, 433 F.2d 733, 734 (5th Cir. 1970) (affirming denial of class certification because a class composed of state residents “active in the ‘peace movement’” was uncertain and overbroad). Others have used the term in referring to classes defined in terms of success on the merits. See, e.g., EQT Prod. Co. v. Adair, 764 F.3d 347, 360 n.9 (4th Cir. 2014) (remanding and instructing the district court to consider, “as part of its class-definition analysis,” inter alia , whether the proposed classes could be defined without creating a fail-safe class).
Stated more precisely, ConAgra’s argument was that “there would be no administratively feasible way to identify members of the proposed classes because consumers would not be able to reliably identify themselves as class members.” The court, however, rejected the argument that class certification requires—separate and apart from the enumerated requirements in Rule 23—that there be “an administratively feasible way to determine who is in the class.” It wrote: “We have not previously interpreted Rule 23 to require such a demonstration, and, for the reasons that follow, we do not do so now.”
The court also said the following about case law from other circuits:
We recognize that the Third Circuit does require putative class representatives to demonstrate “administrative feasibility” as a prerequisite to class certification. See Byrd v. Aaron’s Inc., 784 F.3d 154, 162–63 (3d Cir. 2015); Carrera v. Bayer Corp., 727 F.3d 300, 306–08 (3d Cir. 2013). The Third Circuit justifies its administrative feasibility requirement not through the text of Rule 23 but rather as a necessary tool to ensure that the “class will actually function as a class.” Byrd, 784 F.3d at 162. The Third Circuit suggests that its administrative feasibility prerequisite achieves this goal by (1) mitigating administrative burdens; (2) safeguarding the interests of absent and bona fide class members; and (3) protecting the due process rights of defendants. See Carrera, 727 F.3d at 307, 310. The Seventh Circuit soundly rejected those justifications in Mullins v. Direct Digital, LLC, 795 F.3d 654 (7th Cir. 2015), and the Sixth Circuit followed suit, see Rikos v. Procter & Gamble Co., 799 F.3d 497, 525 (6th Cir. 2015) (citing Mullins in declining to follow Carrera). We likewise conclude that Rule 23’s enumerated criteria already address the interests that motivated the Third Circuit and, therefore, that an independent administrative feasibility requirement is unnecessary.
Tuesday, November 29, 2016
The NYU Law Review and the Center on Civil Justice are hosting a symposium entitled “Rule 23 @ 50” this Friday and Saturday. From the announcement:
This is a wonderful time to reflect on Rule 23 – what it was meant to do; whether it has met its promise; if not, why not, and what can be done to remedy the situation; and what is in store for the Rule going forward.
When: December 2–3, 2016.
Where: Vanderbilt Hall, 40 Washington Square South.
Panels will explore the history of the rule, its use in civil rights and mass tort cases, what the rule was meant to accomplish, whether it has done so, and if not, whether there are ways to fix the situation. There will be an oral history interview with Professor Arthur Miller, who was there at the creation of the rule. The conference will conclude with a judges’ roundtable moderated by Professor Miller.
Tuesday, November 1, 2016
As covered earlier, the Standing Committee has published proposed amendments to the Federal Rules of Civil Procedure (along with proposed amendments to the Appellate, Bankruptcy & Criminal Rules). The proposed amendments to Rule 23 (which deal principally with class action settlements) have received much of the attention, but the proposals also include changes to Rules 5, 62, and 65.1.
The first public hearing on the proposed civil rules amendments takes place this Thursday, November 3, in Washington, D.C. The public comment period runs until February 15, 2017.