Thursday, April 23, 2015

First Annual Civil Procedure Workshop: July 16-17, Seattle University

As we covered earlier, the first annual Civil Procedure Workshop is being held July 16-17 at Seattle University School of Law. You can find more details and registration information in the document linked below:

Download Seattle Civil Procedure Workshop Registration 

 

 

April 23, 2015 in Class Actions, Conferences/Symposia | Permalink | Comments (0)

Thursday, April 9, 2015

Third Circuit Holds Daubert Applies to Expert Testimony on Class Certification Motion

In In re Blood Reagents Antitrust Litigation, No. 12-4067 (3d Cir. April 8, 2015), the court vacated the trial court's certification of a class of purchasers of blood reagents, which alleged price-fixing by the two defendants.

In part, the court vacated because the class certification had occurred before the Supreme Court's decision in Comcast Corp. v. Behrend, 133 S. Ct. 1426 (2013).  In addition, the court held that if, on a motion for class certification, plaintiffs relied on expert testimony to establish "predominance" under Rule 23(b)(3), then the expert's testimony must satisfy the Daubert standard for admissibility.

On the earlier motion for class certification, the plaintiffs had relied in part on expert testimony to produce their antitrust impact analyses and damages models.  The district court held that the expert's testimony "could evolve to become admissible evidence" at trial.  The Third Circuit held that "the trial court should have scrutinized the plaintiffs' expert's testimony under Daubert."

The court stated that it was joining the Seventh and Eighth Circuits in holding Daubert applicable on class certification motions.

April 9, 2015 in Class Actions, Recent Decisions | Permalink | Comments (0)

Monday, March 23, 2015

Advisory Committee Agenda Includes Class Action Amendment "Sketches," Loser-Pays Report

The Advisory Committee on Civil Rules has released the 640-page agenda for its April 9-10, 2015 meeting.

The agenda includes many items that are of interest.  The following is far from an exhaustive list:

  •  In the Draft Minutes for the Committee's October 30, 2014 meeting (p. 39):

 "Judge Campbell reported that the Forms Working Group in the Administrative Office has already begun deliberating what response they might make if the proposed abrogation of Rule 84 and the Rule 84 Forms is approved by the Supreme Court and Congress. They have begun to think about new forms that might be created. This Committee will keep in touch with the Working Group, perhaps by means as formal as appointing a liaison member."

  • The Report of the Rule 23 Subcommittee considers the following topics.  Some contain "sketches" of possible amendments to the rule on class actions (p. 243):
  • Settlement approval criteria (p. 246)
  • Settlement class certification (p. 253)
  • Cy pres treatment (p. 263)
  • Dealing With Objectors (p. 272)
  • Rule 68 Offers and Mootness (p. 277)
  • Issue Classes (p. 281)
  • Notice (p. 284)
  •  The Discovery Subcommittee reports on "Requester Pays Issues."  (p. 333)

 

March 23, 2015 in Class Actions, Federal Rules of Civil Procedure | Permalink | Comments (1)

Tuesday, March 17, 2015

Fitzpatrick on Class Actions

Brian Fitzpatrick (Vanderbilt) has posted two new articles to SSRN on class actions.

The End of Class Actions: In this Article, I give a status report on the life expectancy of class action litigation following the Supreme Court’s decisions in Concepcion and American Express. These decisions permitted corporations to opt out of class action liability through the use of arbitration clauses, and many commentators, myself included, predicted that they would eventually lead us down a road where class actions against businesses would be all but eliminated. Enough time has now passed to make an assessment of whether these predictions are coming to fruition. I find that, although there is not yet solid evidence that businesses have flocked to class action waivers — and that one big category of class action plaintiffs (shareholders) remain insulated from Concepcion and American Express altogether — I still see every reason to believe that businesses will eventually be able to eliminate virtually all class actions that are brought against them, including those brought by shareholders.

An Empirical Look at Compensation in Consumer Class Actions:  Consumer class actions are under broad attack for providing little in compensation to class members. One response to this charge is the argument that one of us has made elsewhere: consumer class actions should not be measured by their compensatory value but by their deterrence value. But here we take up this critique of consumer class actions on its own terms: can they serve a meaningful compensatory role? Scholars have taken up this question before, but they have been stymied by the lack of available data. In this article, we present original data on the distribution of class action settlements in fifteen related small-stakes consumer class action lawsuits against some of the largest banks in the United States. We obviously can make no claim that these settlements are representative of most consumer class actions. Nonetheless, we believe our findings support the notion that, under certain circumstances, consumer class actions can indeed serve a meaningful compensatory role: when they eschew claim forms in favor of automatic distributions and when they rely on direct deposits or standard-sized checks rather than the cheaper, postcard-sized variety to make those distributions.

RJE

March 17, 2015 in Class Actions, Recent Scholarship | Permalink | Comments (0)

Friday, March 13, 2015

Would the Alabama Supreme Court prefer no marriage at all?

There’s an interesting paragraph in this week’s order from the Alabama Supreme Court, which confirmed that Mobile County probate judge Don Davis is subject to its earlier mandamus ruling even though he is also the subject of a federal-court injunction. In trying to make sense of this situation, Judge Davis had stopped issuing marriage licenses altogether. 

Here’s what the Alabama Supreme Court said (emphasis mine) on p.9

Section 30-1-9, Ala. Code 1975, provides that Judge Davis "may" issue “marriage licenses." To the extent he exercises this authority, he must issue those licenses in accordance with the meaning of the term "marriage" in that Code section and in accordance with other provisions of Alabama law, as discussed in our March 3 opinion. 

Is the implication here that Judge Davis has no obligation to issue marriage licenses to anyone? That he can refuse to issue them across the board, just as long as no marriage licenses are issued to same-sex couples? 

Meanwhile, expect some more activity in federal court next week. Judge Granade has ordered Judge Davis to file a response to the Strawser plaintiffs’ motion for class certification by Tuesday, March 17.

[Cross-posted at PrawfsBlawg]

 

 

March 13, 2015 in Class Actions, Current Affairs, Federal Courts, Recent Decisions, State Courts | Permalink | Comments (0)

Wednesday, March 11, 2015

New developments in the Alabama same-sex marriage litigation

The litigation over Alabama’s ban on same-sex marriage has taken many twists and turns in these early months of 2015, but the main action has been in two arenas: the Alabama Supreme Court and U.S. District Judge Callie Granade’s courtroom in the Southern District of Alabama. Of course, everyone will be watching the U.S. Supreme Court as well, where Obergefell v. Hodges will be argued next month. And it was the Supreme Court’s February order refusing to stay Judge Granade’s initial injunction that began the latest round of activity. Here’s where things stand:

The Alabama Supreme Court said its piece last week, granting a writ of mandamus ordering all Alabama probate judges to stop granting marriage licenses. The merits of that ruling are certainly open to debate—both on the key constitutional issue and the standing/jurisdiction issue—but there are a few things to keep in mind going forward. First, the mandamus action was brought by two groups opposing same-sex marriage (acting as “relators” for the State of Alabama) against the Alabama probate judges. No individuals or couples who might wish to challenge Alabama’s same-sex marriage ban were parties to that proceeding, so as a matter of preclusion the ruling by the Alabama Supreme Court does not prevent them from seeking relief in federal court.

Second, the court ordered Alabama probate judges not to issue new same-sex marriage licenses (and it seems to have had that effect), but it ignored the relators request to order Alabama probate judges “not to recognize any marriage licenses issued to same sex couples.” In doing so, the court avoided one potential direct conflict with the federal judiciary, insofar as Judge Granade had previously ordered Mobile County probate judge Don Davis to issue marriage licenses to four same-sex couples in the Strawser case. Indeed, the Alabama Supreme Court’s order asked Davis to “advise” it “as to whether he is bound by any existing federal court order regarding the issuance of any marriage license other than the four marriage licenses he was ordered to issue in Strawser.” His deadline was last Thursday (3/5), but he’s asked for more time to respond. [Update: Today the Alabama Supreme Court posted on its website an order confirming that Judge Davis was also subject to its mandamus ruling, but only after determining for itself (whether correctly or not) that Judge Granade’s injunction did not extend beyond those four licenses.] 

Continue reading

March 11, 2015 in Class Actions, Current Affairs, Federal Courts, Federal Rules of Civil Procedure, In the News, Recent Decisions, State Courts, Supreme Court Cases | Permalink | Comments (0)

Annual Federal Courts Data, Final Government Arbitration Study Released

In a data bonanza for numbers geeks, the federal government separately released two reports yesterday: the long-awaited Final Arbitration Study by the Consumer Finance Protection Bureau and the less-awaited Judicial Business of the United States Courts: Annual Report of the Director 2014.

I will post more about each of these reports as I digest them.  The CFPB report is over 700 pages long and contains a wealth of empirical information about arbitration clauses in consumer financial instruments such as credit cards.  This information includes the effect of arbitration clauses on consumer prices (none) and the interplay of arbitration clauses and class actions.  As for the 2014 federal courts data, I will add pertinent measures to my existing database to enable a longer-term view.     

 

March 11, 2015 in Class Actions, Federal Courts, In the News | Permalink | Comments (0)

Saturday, February 28, 2015

House Committee Hearing on CAFA Dominated by US Chamber of Commerce

I wanted to post a quick blurb about my testimony yesterday before the Subcommittee on the Constitution and Civil Justice of the House Judiciary Committee in the hearing on The State of Class Actions Ten Years After the Class Action Fairness Act.

Here is the Prepared Statement I submitted 48 hours in advance of the hearing.

Not surprisingly given Republicans' control of the House, of the four witnesses testifying at the hearing, I was the only one offered by the Democrats.  The others were representing the US Chamber, DRI-the Voice of the Defense Bar, and Skadden Arps.

Continuing the proud tradition of "tort reformers" in spinning corporations' huge legal victories as tragic defeats, one would have never known that Wal-Mart v. Dukes, AT&T Mobility v. Concepcion, and American Express v. Italian Colors (among many other corporate victories in the Supreme Court, the Advisory Committee, and state legislatures) had ever happened.  Instead, listening to the Republican-sponsored witnesses and members of the Committee and Subcommittee, it seemed instead that democracy itself, and even the world economy, were threatened by legions of liberal federal judges granting class certifications in cases in which no class members had been injured.  (Yes, the new urban myth of corporate interests is the so-called "no injury" class.)

As a former litigator, it was agony sitting there and not being able to object ("Mischaracterizes the evidence!"  "Assumes facts not in evidence!" "Irrelevant!") to some of the things coming out of people's mouths.  

It was also depressing to calculate how much I would have earned at the going hourly rate of an attorney with my background and experience in an urban market IF ANYONE HAD BEEN PAYING ME -- which of course, no one was.  (My dear law school, St. Thomas, reimbursed my measly travel expenses.)

Somehow, I doubt that the other three witnesses were appearing pro bono.

But someone has to stand up for rights of injured, cheated, and discriminated-against Americans and the plaintiffs' lawyers who represent them.  I am honored to have tried my best to do so.

 

 

 

 

 

February 28, 2015 in Class Actions, Current Affairs, Federal Rules of Civil Procedure, Mass Torts | Permalink | Comments (0)

Tuesday, February 10, 2015

Second Circuit Opinion on Class Certification & SCOTUS’s Comcast Decision

Today the U.S. Court of Appeals for the Second Circuit issued its decision in Roach v. T.L. Cannon Corp. The opinion begins:

“This appeal presents the question of whether the Supreme Court’s decision in Comcast Corp. v. Behrend, 133 S. Ct. 1426 (2013), overruled the law of this Circuit that class certification pursuant to Rule 23(b)(3) of the Federal Rules of Civil Procedure cannot be denied merely because damages have to be ascertained on an individual basis. The United States District Court for the Northern District of New York (McAvoy, J.) concluded that Comcast permits certification under Rule 23(b)(3) only when damages are measurable on a classwide basis, and denied Plaintiffs-Appellants’ motion for class certification.

“We hold that Comcast does not mandate that certification pursuant to Rule 23(b)(3) requires a finding that damages are capable of measurement on a classwide basis.”

And from later in the opinion:

“The Supreme Court did not foreclose the possibility of class certification under Rule 23(b)(3) in cases involving individualized damages calculations. Our reading of Comcast is consistent with the Supreme Court’s statement in Comcast that its decision turned upon 'the straightforward application of class-certification principles.' 133 S. Ct. at 1433. Our reading is also consistent with the interpretation of those Circuits that have had the opportunity to apply Comcast.”

 

H/T: Perry Cooper 

 

 

 

February 10, 2015 in Class Actions, Federal Rules of Civil Procedure, Recent Decisions, Supreme Court Cases | Permalink | Comments (0)

Tuesday, February 3, 2015

Dart Cherokee and Class-Certification Appeals under Rule 23(f)

We covered earlier the Supreme Court’s decision in Dart Cherokee Basin Operating Co. v. Owens, a case where cert. was granted to resolve what had to be contained in a notice of removal, only to have a 5-4 fight erupt over questions of Supreme Court jurisdiction and the proper standard of review.

Scott Gant and Christopher Hayes have now posted a piece entitled 'Dart' and Class Certification Order Jurisdiction, which argues the Dart Cherokee “also resolves uncertainty about whether the Supreme Court has jurisdiction to review a district court’s interlocutory order granting or denying class certification when the court of appeals has declined to review the order.”

 

February 3, 2015 in Class Actions, Federal Courts, Federal Rules of Civil Procedure, Recent Decisions, Supreme Court Cases | Permalink | Comments (0)

Tuesday, December 16, 2014

Rosenberg & Spier on Class Actions

Now available on the Journal of Legal Analysis website is David Rosenberg and Kathryn Spier’s article, Incentives to Invest in Litigation and the Superiority of the Class Action. Here’s the abstract:

We formally demonstrate the general case for class action in a rent-seeking contest model, explaining why separate action adjudication is biased in the defendant’s favor and collective adjudication is bias free. Separate action bias arises from the defendant’s investment advantage in capitalizing on centralized control over the aggregate (classwide) stake in the common question defense, while the plaintiff, with only an individual recovery at stake, spends much less. Class action eliminates bias by enabling both parties to make their best case through centralized optimal classwide investments. Our social benefit–cost analysis shows that class action surpasses alternative methods for achieving bias-free adjudication.

And here’s a link to the PDF file.

H/T: Larry Solum (who justifiably says to download it while it’s hot).

 

 

December 16, 2014 in Class Actions, Recent Scholarship | Permalink | Comments (0)

Monday, December 8, 2014

Supreme Court Denies Cert in BP Oil Spill Settlement

As reported by SCOTUSBlog and The National Law Journal, the Supreme Court denied BP's cert petition that sought to reopen the Deepwater Horizon settlement.

Although I have only a passing familiarity with the incredibly convoluted BP litigation, I predicted this summer (but not publicly), when BP filed its petition, that the Court would deny cert.  BP repeatedly attempted to undo a settlement agreement that it negotiated for a year and strongly advocated to be approved at the time, and the procedural posture of its cert petition was murky.

Based on a quick reading of the cert petition, it seemed to me that BP mischaracterized both the settlement agreement and the lower courts' orders so it could manufacture a claimed "circuit split."   BP characterized the class as including people who suffered no damage traceable to Deepwater Horizon, but that didn't seem accurate to me.  I think that under the settlement agreement (which is 1,000 pages long and I admittedly have not read it), the claimants have to file a form that certifies that they did suffer such damage.  BP, which agreed to that in the settlement, later changed its mind and said that wasn't good enough proof.

In 2012 the Court also denied cert in the DB Investments (a/k/a De Beers Diamonds) antitrust class action, which was cited in BP's cert petition.  Objectors to the De Beers settlement agreement urged a similar argument that some class members had no cognizable claim.

 

December 8, 2014 in Class Actions, Mass Torts, Supreme Court Cases | Permalink | Comments (0)

Tuesday, October 14, 2014

The Advisory Committee's Gargantuan New Agenda

Far from resting on its laurels after pushing through the latest round of defense-oriented amendments to the FRCP, the Advisory Committee on Civil Rules continues its assault.  This time, among many other things, it's tackling class actions – as if the Supreme Court wasn't already doing a pretty good job of eviscerating class actions by itself.

The 588-page agenda book for the Committee's meeting in Washington, D.C. on October 30-31, 2014 is on the U.S. Courts website here.

October 14, 2014 in Class Actions, Federal Courts, Federal Rules of Civil Procedure | Permalink | Comments (0)

Monday, September 29, 2014

Supreme Court Dismisses IndyMac Case on Statute of Limitations in Class Actions

SCOTUSblog reports that the Court dismissed the writ of certiorari in Public Employees' Retirement System v. IndyMac MBS, Inc. as improvidently granted.   The issue in the case was whether the filing of a putative class action serves, under American Pipe & Construction Co. v. Utah, to satisfy the three year time limitation in § 13 of the Securities Act with respect to the claims of putative class members.

The Court was set to hear argument in the case on Monday, but became aware of a pending settlement proposal.

 

 

September 29, 2014 in Class Actions, Supreme Court Cases | Permalink | Comments (0)

Sunday, August 17, 2014

Wasserman on Mass Torts, Future Claimants & Global Peace

Rhonda Wasserman (Pittsburgh) has posted on SSRN a draft of her article, Future Claimants and the Quest for Global Peace, which will appear in the Emory Law Journal. Here’s the abstract: 

In the mass tort context, the defendant typically seeks to resolve all of the claims against it in one fell swoop.  But the defendant’s interest in global peace is often unattainable in cases involving future claimants – those individuals who have already been exposed to a toxic material or defective product, but whose injuries have not yet manifested sufficiently to support a claim or motivate them to pursue it.  The class action vehicle cannot be used because it is impossible to provide reasonable notice and adequate representation to future claimants.  Likewise, non-class aggregate settlements cannot be deployed because future claimants will not have contacted attorneys whose participation is critical to those alternative methods of dispute resolution. 

In lieu of class actions and non-class aggregate settlements, this Article proposes a hybrid public-private claims resolution process designed to provide many of the benefits of global peace, while preserving the constitutional rights of future claimants and ensuring them fair compensation as their injuries manifest.  Under this proposal, defendants would secure judicial approval of a fair and reasonable class action settlement of the current claims and then, through an extra-judicial process, make fair offers on comparable terms to future claimants as their claims mature, adjusted to take into account the time value of money and intervening changes in legal doctrine and medical advances.  Since the class action settlement would not purport to bind the future claimants, their constitutional rights would be protected.  And even though the future claimants would not be bound by the class action judgment nor obligated to accept the fair offers on comparable terms, they would have an incentive to accept them, rather than sue in tort, because they would be assured fair compensation without incurring the costs of litigation.

 

 

August 17, 2014 in Class Actions, Mass Torts, Recent Scholarship | Permalink | Comments (0)

Saturday, August 2, 2014

No Federal Jurisdiction Over Deceptive Marketing Claims Against Credit Card Companies

From the summary prepared by court staff of the Ninth Circuit:

Reversing the district court’s denial of a motion for a remand to state court, the panel held that neither the federal question statute nor the Class Action Fairness Act provided the district court with subject matter jurisdiction over the Hawaii Attorney General’s complaints against six credit card providers, alleging that each violated state law by deceptively marketing and improperly enrolling cardholders in add-on credit card products.

Joining the Fifth Circuit, the panel held that the Attorney General’s claims were not preempted by National Bank Act provisions completely preempting state law claims challenging interest rates charged by national banks. . . . [T]he complaints’ state law claims were not preempted because they did not challenge the “rate of interest” that the card providers charged. Instead, . . . the complaints’ unfair and deceptive practice claims targeted alleged marketing misrepresentations, and their unjust enrichment claims arose from the purported failure to obtain consent before enrolling consumers in debt protection products.

Agreeing with the Second, Third, and Fourth Circuits, the panel held that CAFA did not provide an alternate basis for jurisdiction because the Attorney General brought civil enforcement actions or common law parens patriae suits, rather than class actions, and the complaints specifically disclaimed class status.

State of Hawaii ex rel. Louie v. HSBC Bank Nevada, N.A., No. 1:12-cv-00266-LEKKSC (Aug. 1, 2014).

August 2, 2014 in Class Actions, Recent Decisions, Subject Matter Jurisdiction | Permalink | Comments (0)

Saturday, July 26, 2014

Wiessner on Mass Claims in the Context of Argentina's Debt Defaults

My colleague Siegfried Wiessner, Professor of Law and the Director of St. Thomas' Graduate Program in Intercultural Human Rights, has posted on SSRN his article Democratizing International Arbitration? Mass Claims Proceedings in Abaclat v. Argentina.  This is a fascinating account of the decision of the International Center for the Settlement of Investment Disputes to allow some 60,000 individual Italian bondholders to proceed against Argentina for its default on those bonds – the first mass claim presented before an ICSID tribunal.  In support of the ICSID's decision, Professor Wiessner surveys US class action practice, the European Union's collective redress mechanisms (including representative collective actions, group actions, and test cases), and International Mass Claims Commissions.

Abstract:     

Mass claims have been accepted, in principle, in the landmark 2011 ICSID Decision on Jurisdiction and Admissibility of Abaclat v. Argentina. Welcoming this development as providing novel access for the common man and woman to international investment arbitration, the author explores related streamlined procedures in domestic and international law -- such as class actions and international mass claims commissions as well as vanguard use of technology and statistical methods -- that allow the processing of a high number of claims arising from common factual and/or legal issues with a view toward elaborating rules and mechanisms tailor-made for the context of international arbitration.

July 26, 2014 in Class Actions, International Courts, International/Comparative Law | Permalink | Comments (0)

Tuesday, June 24, 2014

SCOTUS Upholds Basic v. Levinson, But Gives Halliburton A Partial Victory

In the latest Supreme Court round of Halliburton Co. v. Erica P. John Fund, Inc., the Court declined Halliburton's invitation to overrule Basic v. Levinson,  but remanded to allow Halliburton, at the class certification stage, to attempt to rebut the presumption that the alleged misrepresentations actually affected the price of the stock.  The Court's final two paragraphs:

More than 25 years ago [in Basic], we held that plaintiffs could satisfy the reliance element of the Rule 10b–5 cause of action by invoking a presumption that a public, material misrepresentation will distort the price of stock traded in an efficient market, and that anyone who purchases the stock at the market price may be considered to have done so in reliance on the misrepresentation. We adhere to that decision and decline to modify the prerequisites for invoking the presumption of reliance. But to maintain the consistency of the presumption with the class certificationrequirements of Federal Rule of Civil Procedure 23, defendants must be afforded an opportunity before class certification to defeat the presumption through evidencethat an alleged misrepresentation did not actually affect the market price of the stock.


Because the courts below denied Halliburton that opportunity, we vacate the judgment of the Court of Appeals for the Fifth Circuit and remand the case for further proceedings consistent with this opinion.

Some coverage of the case:

New York Times

Wall Street Journal

June 24, 2014 in Class Actions, Recent Decisions, Supreme Court Cases | Permalink | Comments (0)

Thursday, April 17, 2014

Call for Papers: Akron L. Rev. Symposium Issue on Class Actions

SYMPOSIUM ISSUE

UNIVERSITY OF AKRON LAW REVIEW

 

The Class Action After A Decade of Roberts Court Decisions 

The Akron Law Review invites academic papers on the reasoning, dimensions, and possible impacts of one or more of the class action or other multi-party action cases decided by the “Roberts Court” (2005-present) We welcome papers of any length and request submission before September 14, 2014. Publication will occur in spring of 2015. 

As the Supreme Court of the United States recognized:

The policy at the very core of the class action mechanism is to overcome the problem that small recoveries do not provide the incentive for any individual to bring a solo action prosecuting his or her rights. A class action solves this problem by aggregating the relatively paltry potential recoveries into something worth someone’s (usually an attorney’s) labor.

Amchem Products, Inc. v. Windsor, 117 S.Ct. 2231, 2246 (1997) (quoting Mace v. Van Ru Credit Corp., 109 F.3d 338, 344 (7th Cir. 1997)). Earlier in 2014, the Court refused to intervene in a class action brought by consumers in “the case of the moldy washing machines” against three large corporations. Sears, Roebuck & Co. v. Butler, 13-430, Whirlpool v. Glazer, 13-431, and BSM Home Appliances v. Cobb, 13-138. Although a victory for consumers, the decision is arguably an anomaly amidst recent pro-business cases restricting plaintiffs’ class certification. See e.g., Comcast v. Berend, 133 S. Ct. 1426 (2013); AT&T Mobility v. Concepcion, 131 S. Ct. 1740 (2011); Wal-Mart v. Dukes, 131 S. Ct. 2541 (2011). Multi-party litigation may well be changing, and the Akron Law Review seeks your contribution to the conversation.

Your contribution to this conversation will be both timely and visible. The Washington and Lee Law Review Rankings ranked the Akron Law Review as a top 55 general, student-edited journal (in combined score based on impact factor and citation). Additionally, Ohio Supreme Court Justices cited the Akron Law Review more times in the past decade than any other journal. See Jared Klaus, Law Reviews: An Undervalued Resource, 26 Ohio Lawyer, May/June 2012, at 28.

 You may submit manuscripts by email or regular mail. To submit by email, please forward a copy of your article in Word format to lawreview@uakron.edu. You may submit a hardcopy to: Justin M. Burns, Editor-in-Chief, Akron Law Review, The University of Akron School of Law, 150 University Avenue, Akron, Ohio 44325. If you have any questions, please feel free to contact Justin Burns at jmb349@zips.uakron.edu.

April 17, 2014 in Class Actions, Conferences/Symposia | Permalink | Comments (0)

Tuesday, April 15, 2014

Wasserman on Cy Pres Distributions of Class Action Settlements

Rhonda Wasserman (Pittsburgh) has posted on SSRN a draft of her article, Cy Pres in Class Action Settlements, which will be published in the Southern California Law Review. Here’s the abstract: 

Monies reserved to settle class action lawsuits often go unclaimed because absent class members cannot be identified or notified or because the paperwork required is too onerous. Rather than allow the unclaimed funds to revert to the defendant or escheat to the state, courts are experimenting with cy pres distributions – they award the funds to charities whose work ostensibly serves the interests of the class “as nearly as possible.”

Although laudable in theory, cy pres distributions raise a host of problems in practice. They often stray far from the “next best use,” sometimes benefitting the defendant more than the class. Class counsel often lacks a personal financial interest in maximizing direct payments to class members because its fee is just as large if the money is paid cy pres to charity. And if the judge has discretion to select the charitable recipient of the unclaimed funds, she may select her alma mater or another favored charity, thereby creating an appearance of impropriety.

To minimize over-reliance on cy pres distributions and to tailor them to serve the best interests of the class, the Article makes four pragmatic recommendations. First, to align the interests of class counsel and the class, courts should presumptively reduce attorneys’ fees in cases in which cy pres distributions are made. Second, to ensure that class members and courts have the information they need to assess the fairness of a settlement that contemplates a cy pres distribution, class counsel should be required to make a series of disclosures when it presents the settlement for judicial approval. Third, to inject an element of adversarial conflict into the fairness hearing and to ensure that the court receives the information needed to scrutinize the proposed cy pres distribution, the court should appoint a devil’s advocate to oppose it. Finally, the court should be required to make written findings in connection with its review of any class action settlement that contemplates a cy pres distribution.

 

 

April 15, 2014 in Class Actions, Recent Scholarship | Permalink | Comments (0)