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.
Friday, October 28, 2016
Bob Bone has posted on SSRN a draft of his article Tyson Foods and the Future of Statistical Adjudication, which will be published in the North Carolina Law Review. Here’s the abstract:
Statistical adjudication, the practice of using sampling and other statistical techniques to adjudicate large case aggregations, is highly controversial today. In all its forms, statistical adjudication decides cases on the basis of statistical extrapolation rather than case-specific facts. For example, a court adjudicating a large class action might try a random sample of cases, average the trial verdicts, and give the average to all the other cases in the aggregation. In Wal-Mart Stores, Inc. v. Dukes, the Supreme Court rejected a sampling proposal as inconsistent with the Rules Enabling Act, calling it “Trial by Formula.” In the wake of this decision, at least one commentator declared the death of statistical adjudication.
In an important decision last term, Tyson Foods, Inc. v. Bouaphakeo, the Court changed course and breathed new life into statistical adjudication. It upheld the use of sampling to establish liability and damages in a Fair Labor Standards Act case and indicated that the procedure might be available in other cases as well. The Court’s opinion is far from clear, however, and offers little guidance to lower court judges trying to determine when and how to use the procedure in future cases.
This Article explores the impact of Tyson Foods on the future of statistical adjudication. Part I defines statistical adjudication and distinguishes it from statistical evidence. Part II shows that Tyson Foods is a case of statistical adjudication, not statistical evidence. Part III takes a closer look at the Court’s opinion in an effort to tease out factors and principles to guide future use. Part IV explores reasons for the vague discomfort with the procedure, reasons that seem to be tied to nagging doubts about the legitimacy of the procedure. Critics worry that statistical adjudication is too strange a fit with adjudication, too substantive to be legitimately implemented as procedure, and too mechanical to count as a proper form of adjudicative reasoning. Part IV argues that statistical adjudication is not as strange as it might seem, that its outcome effects do not make it too substantive, and that while it substitutes a mechanical decision algorithm for the usual reasoning process, it does so in a way that can be justified as legitimate. It is time that we recognize statistical adjudication for what it is: a useful procedural tool that, when carefully designed and selectively deployed, is capable of adjudicating large case aggregations fairly and efficiently.
Sunday, October 23, 2016
Wednesday, October 12, 2016
Today on the Courts Law section of JOTWELL is Brooke Coleman’s essay, Racketeers, Mobsters, & Plaintiffs’ Mass-Action Attorneys. Brooke reviews Briana Rosenbaum’s forthcoming Iowa Law Review article, The RICO Trend in Class Action Warfare.
Friday, October 7, 2016
Rick Marcus has posted on SSRN his article, Bending in the Breeze: American Class Actions in the Twenty-First Century, which was published in the DePaul Law Review. Here’s the abstract:
It is always better to have the breeze at your back, but that surely has not recently been the case for class action proponents. At the risk of overstating, there is a certain fin de siecle flavor to current procedural discussions, at least among academics; it seems that several foundational principles of late twentieth century procedural ordering have come under attack in the twenty-first century. Although not alone among those principles, class actions have a prominent role. Dean Robert Klonoff has recently written of "The Decline of Class Actions," and Professor Linda Mullenix has written of "Ending Class Actions as We Know Them." Professor Arthur Miller-who was present at the creation of the modern class action-has suggested that we face "the death of aggregate litigation by a thousand paper cuts." But he, at least, sees some "rays of light that indicate it will survive."' It is likely an overstatement to claim that any of these prominent academics foresees the imminent demise of American class actions. But as we shall see, lawyers sometimes view things in more apocalyptic terms. At the same time, most or all would probably agree with Judge Boyle about the increasing headwinds that plaintiffs face.
Without questioning in the least the idea that proponents of the class action have suffered some reverses recently, I intend to argue that Professor Miller's optimism about American aggregate litigation is justified. Like Confucius' green reed, the class action is likely to bend in the breeze and survive the current, cold climate. In significant part, this attitude stems from an appreciation of the exceptional character of American class actions in particular and the American bench and bar in general. As Professor Christopher Hodges of Oxford began his study of European techniques for affording relief in court to groups, lawmakers in Europe sought to avoid "a US-style court-based mechanism." And Canadian Professor Janet Walker introduced an international panel on group litigation in Moscow by noting that "everyone, at least outside the United States, seems also to agree that they do not want to adopt U.S.-style class actions in their legal systems."
Against this background, it does not seem that American aggregate litigation in general, and class actions in particular, are in danger of extinction. Indeed, one book published in 2014 on European group litigation worries in its title whether they-compared to American aggregate litigation-are "squeaking mice," and Dean Klonoff has recently explained why most nations do not have U.S.-style class actions."
Monday, September 26, 2016
On November 11-12, 2016, the University of Pennsylvania Law Review is hosting a symposium entitled “1966 and All That: Class Actions and Their Alternatives After Fifty Years.”
Wednesday, September 14, 2016
Yesterday the U.S. Court of Appeals for the Third Circuit issued its decision in In re: Modafinil Antitrust Litigation. The court addresses Rule 23(a)(1), which provides that to certify a class action the class must be “so numerous that joinder of all members is impracticable.”
From the opinion’s introduction:
When thinking of a class action brought under Rule 23(b)(3), we typically think of a large aggregation of individuals (hundreds or even thousands), each with small claims. This case is quite different from that. Here, we are faced with a putative class of twenty-two large and sophisticated corporations, most of which have multi-million dollar claims, who wish to take advantage of the class action device. While we do not foreclose the possibility of class status in this case, or where the putative class is of similar composition, Plaintiffs have not met their burden of showing that the numerosity requirement of Rule 23(a)(1) has been satisfied. We now provide a framework for district courts to apply when conducting their numerosity analyses, and we will remand to the District Court to allow such an analysis in this case.
Thursday, August 25, 2016
Briana Rosenbaum has posted on SSRN a draft of her article, The RICO Trend in Class Action Warfare, which will be published in the Iowa Law Review. Here’s the abstract:
Aggregate litigation, including class-actions and mass actions, have been under attack for decades. Recent Supreme Court cases have further weakened class actions, and the current Congress is considering numerous aggregate litigation and tort reform efforts. Recently, defendants in aggregate litigation have employed an additional tactic by filing civil RICO cases against plaintiffs’ counsel alleging they fraudulently concealed a few baseless lawsuits among larger sets of claims. The predicate acts in those RICO cases consist solely of litigation filings: the filing of complaints and related litigation documents in aggregate litigation. Members of the defense bar have made no secret of the fact that these RICO cases are part of a larger strategy to prevent plaintiffs’ attorneys from bringing large-scale litigation. Despite the rich literature on aggregate litigation, there is little scholarship exploring this recent aggressive use of RICO by the defense bar and corporate interest groups to punish plaintiffs’ attorneys for the alleged fraudulent filing of aggregate litigation.
This Article pulls together several previously unassociated areas of law—including RICO, Rule 11, complex litigation, SLAPP motions, and asbestos litigation—to develop a model for defendants’ use of RICO as a tool of reprisal. It argues that holding plaintiffs’ attorneys liable under civil RICO solely for litigation activities is illegal, results in the lamentable federalization of state common law, and leads to improper forum shopping. The RICO reprisal also avoids legitimate state protections for litigation activity and is a thinly veiled attempt by the defense bar to further weaken aggregate litigation by targeting the plaintiffs’ attorneys themselves. This use of RICO punishes the aggregate litigation device itself, rather than the underlying fraudulent conduct; as a remedy for frivolous aggregate litigation conduct, it is both over- and under-inclusive. The Article concludes by proposing several alternatives, including effectively barring any civil RICO action targeting attorneys’ pure litigation activities without a showing of malicious intent—a proposal that draws on existing common law litigation privilege doctrine.
Tuesday, August 23, 2016
Michael Sant'Ambrogio and Adam Zimmerman have posted on SSRN a draft of their article, Inside the Agency Class Action, which will be published in the Yale Law Journal. Here’s the abstract:
Federal agencies in the United States hear almost twice as many cases each year as all the federal courts. But agencies routinely avoid using tools that courts rely on to efficiently resolve large groups of claims: class actions and other complex litigation procedures. As a result, across the administrative state, the number of claims languishing on agency dockets has produced crippling backlogs, arbitrary outcomes and new barriers to justice.
A handful of federal administrative programs, however, have quietly bucked this trend. The Equal Employment Opportunity Commission has created an administrative class action procedure, modeled after Rule 23 of the Federal Rules of Civil Procedure, to resolve “pattern and practice” claims of discrimination by federal employees before administrative judges. Similarly, the National Vaccine Injury Compensation Program has used “Omnibus Proceedings” resembling federal multidistrict litigation to pool common claims regarding vaccine injuries. And facing a backlog of hundreds of thousands of claims, the Office of Medicare Hearings and Appeals recently instituted a new “Statistical Sampling Initiative,” which will resolve hundreds of common medical claims at a time by statistically extrapolating the results of a few hearing outcomes.
This Article is the first to map agencies’ nascent efforts to use class actions and other complex procedures in their own hearings. Relying on unusual access to many agencies—including agency policymakers, staff and adjudicators—we take a unique look “inside” administrative tribunals that use mass adjudication in areas as diverse as employment discrimination, mass torts, and health care. In so doing, we unearth broader lessons about what aggregation procedures mean for policymaking, enforcement and adjudication. Even as some fear that collective procedures may stretch the limits of adjudication, our study supports a very different conclusion: group procedures can form an integral part of public regulation and the adjudicatory process itself.
Friday, August 19, 2016
Last week the California Supreme Court issued an important decision on how to calculate the amount of attorney fees in class actions: Laffitte v. Robert Half International Inc.
Alison Frankel (Reuters) has this report.