Thursday, April 17, 2014
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 email@example.com. 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 firstname.lastname@example.org.
Tuesday, April 15, 2014
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.
Tuesday, April 8, 2014
Joe Seiner (South Carolina) has posted on SSRN a draft of his article The Issue Class, which will be published in the Boston College Law Review. Here’s the abstract:
In Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541 (2011), the Supreme Court refused to certify a proposed class of one and a half million female workers who had alleged that the nation’s largest private employer had discriminated against them on the basis of their sex. The academic response to the case has been highly critical of the Court’s decision. This paper does not weigh in on the debate of whether the Court missed the mark. Instead, this Article addresses a more fundamental question that has gone completely unexplored. Given that Wal-Mart is detrimental to plaintiffs, what is the best tool currently available for workers to pursue systemic employment discrimination claims?
Surveying the case law and federal rules, this paper identifies one little used procedural tool that offers substantial potential to workplace plaintiffs seeking to pursue systemic claims — issue class certification. Rule 23(c)(4)(A) of the Federal Rules of Civil Procedure permits the issue class, allowing common issues in a class case to be certified while the remaining issues are litigated separately. The issue class is typically used where a case has a common set of facts but the plaintiffs have suffered varying degrees of harm. This is precisely the situation presented by many workplace class action claims.
This paper explains how the issue class is particularly useful for systemic discrimination claims. The paper further examines why traditional class treatment often fails in workplace cases, and addresses how the plaintiffs in Wal-Mart could have benefited from issue class certification. Finally, this Article discusses some of the implications of using the issue class in employment cases, and situates the paper in the context of the broader academic scholarship. This paper seeks to fill the current void in the academic scholarship by identifying one overlooked way for plaintiffs to navigate around the Supreme Court’s decision.
Thursday, March 20, 2014
I have admittedly fallen down on my self-appointed job of reporting on bitcoin litigation. Somewhat belatedly, I provide an update on some of the litigation surrounding the collapse of Mt. Gox, one of the earliest, largest, and best-known bitcoin exchanges.
On Feb. 27, 2014, a putative class action, Greene v. Mt. Gox Inc., Mt. Gox KK, Tibanne KK, and Mark Karpeles, No. 1:14-cv-1437, was filed in the Northern District of Illinois. Subject matter jurisdiction was premised on the Class Action Fairness Act. The complaint alleged counts for consumer fraud, common law fraud, negligence, and conversion, among other causes of action.
Two classes are proposed:
(1) Payment Class: All persons in the United States who paid a fee to Mt. Gox to buy, sell, or otherwise trade bitcoins.
(2) Frozen Currency Class: All persons in the United States who had bitcoins or Fiat Currency stored with Mt. Gox on Feb. 7, 2014.
On March 9, 2014, Mt. Gox Co., Ltd., which apparently is also known as Mt. Gox KK, filed a bankruptcy petition under Chapter 15 (foreign proceeding) in the Northern District of Texas, No. 3:14-bk-31229. Under the automatic stay, the Greene proceeding was stayed against defendant Mt. Gox KK.
However, as against the remaining defendants, Judge Feinerman in the Greene case entered a temporary restraining order on March 11, 2014. The court ruled that plaintiff had demonstrated a likelihood of success on the merits with respect to claims under the Illinois Consumer Fraud Act, common law fraud, negligence, conversion, and for an accounting, and restrained the defendants from selling, transferring, disposing of, or concealing any of their assets or records, including preservation of their web site.
Monday, March 10, 2014
The Supreme Court has granted certiorari in Public Employees' Retirement System of Mississippi v. IndyMac MDS, Inc.
Issue: 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.
SCOTUSblog has a post on the case.
Saturday, March 1, 2014
The Supreme Court, in Chadbourne & Parke LLC v. Troice, in an opinion by Justice Breyer, held that the Securities Litigation Uniform Standards Act of 1998 did not forbid "a class action in which the plaintiffs allege (1) that they 'purchase[d]' uncovered securities (certificates of deposit that are not traded on any national exchange), but (2) that the defendants falsely told the victims that the uncovered securities were backed by covered securities."
An analysis of the opinion is on SCOTUSblog here.
Tuesday, February 25, 2014
Plaintiffs filed class complaints against CarMax, alleging wage and hour violations. The trial court granted CarMax's motion to compel arbitration, and the California Court of Appeals reversed.
SCOTUS granted CarMax's petition for certiorari, vacated the judgment, and remanded the case for further consideration in light of American Express Co. v. Italian Colors Restaurant, 570 U.S. ___ (2013).
Monday, February 24, 2014
Today the Supreme Court denied certiorari in three cases that have come to be known as the “smelly washing machine” class actions. In all three, the lower court certified the class action, and the defendants—invoking Wal-Mart and Comcast—sought certiorari. The cases are:
- Whirlpool Corp. v. Glazer (S.Ct. No. 13-431), from the Sixth Circuit
- Sears Roebuck & Co v. Butler (S.Ct. No. 13-430), from the Seventh Circuit
- BSH Home Appliances Corp. v. Cobb (S.Ct. No. 13-138), from the Ninth Circuit (which did not issue an opinion but denied permission under Rule 23(f) to appeal the district court’s order granting class certification).
Tuesday, January 14, 2014
The Supreme Court has issued Mississippi ex rel. Hood v. AU Optronics Corp.
Justice Sotomayor wrote the opinion for a unanimous Court.
From the reporter's syllabus:
Petitioner Mississippi sued respondent liquid crystal display (LCD) manufacturers in state court,alleging violations of state law and seeking, inter alia, restitution for LCD purchases made by itself and its citizens. Respondents sought to remove the case to federal court. The District Court held that the suit qualified as a mass action under §1332(d)(11)(B)(i), but remanded the suit to state court on the ground that it fell within CAFA’s“general public” exception, §1332(d)(11)(B)(ii)(III). The Fifth Circuit reversed, agreeing with the District Court that the suit was a massaction but finding the general public exception inapplicable.
Held: Because Mississippi is the only named plaintiff, this suit does not constitute a mass action under CAFA.
Thursday, January 9, 2014
In National Review online, Tiger Joyce, president of the American Tort Reform Association, urges the Supreme Court to grant cert in Sears, Roebuck & Co. v. Butler and a similar case. Adam Steinman reported on the Butler opinion here.
In Butler, Judge Posner reaffirmed class certification in a case alleging mold growth in washing machines, after the Supreme Court vacated the Seventh Circuit's earlier judgment reported at 702 F.3d 359 (7th Cir.2012) and remanded the case for reconsideration in light of Comcast Corp. v. Behrend.
ATRA president Joyce urges the Supreme Court to grant the petition and "rein in crazy class-action lawsuits" and send a message to "activist" and "disrespectful" lower courts.
Monday, November 18, 2013
Earlier this month we covered Chief Justice Roberts’ statement in Marek v. Lane, a case challenging a class action settlement that included cy pres remedies. In his statement, Chief Justice Roberts agreed with the decision to deny certiorari but raised a number of concerns about cy pres remedies, concluding that “[i]n a suitable case, this Court may need to clarify the limits on the use of such remedies.”
Today, Justice Alito issued a similar statement “respecting the denial of the petition for writ of certiorari” in another case involving a class action settlement: Martin v. Blessing (No. 13-169). You can find his six-page statement in today’s order list, beginning on page 13 of the pdf file. It begins:
The petition in this case challenges a highly unusual practice followed by one District Court Judge in assessing the adequacy of counsel in class actions. This judge insists that class counsel “ensure that the lawyers staffed on the case fairly reflect the class composition in terms of relevant race and gender metrics.” App. to Pet. for Cert. 35a. The uniqueness of this practice weighs against review by this Court, but the meaning of the Court’s denial of the petition should not be misunderstood.
The judge is U.S. District Judge Harold Baer of the Southern District of New York, and Justice Alito writes that “[b]ased on the materials now before us, I am hard-pressed to see any ground on which Judge Baer’s practice can be defended.” [p.3]
Friday, November 15, 2013
1. Whether this Court should overrule or substantially modify the holding of Basic Inc. v. Levinson, 485 U.S. 224 (1988), to the extent that it recognizes a presumption of classwide reliance derived from the fraud-on-the-market theory.
2. Whether, in a case where the plaintiff invokes the presumption of reliance to seek class certification, the defendant may rebut the presumption and prevent class certification by introducing evidence that the alleged misrepresentations did not distort the market price of its stock.
Links to the cert-stage briefing and the Fifth Circuit’s opinion below available are at SCOTUSblog. If the name of this case sounds familiar, it’s been up to the Supreme Court before. In 2011, the Court unanimously decided that the plaintiff was not required to prove loss causation at the class-certification phase. But at the end of the opinion, Chief Justice Roberts alluded to the issues the Court will now confront:
Because we conclude the Court of Appeals erred by requiring EPJ Fund to prove loss causation at the certification stage, we need not, and do not, address any other question about Basic, its presumption, or how and when it may be rebutted. To the extent Halliburton has preserved any further arguments against class certification, they may be addressed in the first instance by the Court of Appeals on remand.
Thursday, November 14, 2013
Following the Supreme Court's reversal of certification of an antitrust class in Comcast Corp. v. Behrend, 133 S. Ct. 1426 (2013), the district court in the case has allowed plaintiffs to present another motion for certification of a narrower class. Glaberson v. Comcast Corp., No. 03-6604 (E.D. Pa. Nov. 13, 2013).
The court rejected Comcast's argument that the rule of mandate prevented the court from considering another motion for class certification, holding:
The Supreme Court reversed our prior certification order because the Plaintiffs’ proffered evidence on antitrust impact was not limited to the overbuilding theory, and thus failed the predominance requirement in Fed. R. Civ. P. 23(b)(3). Importantly, the Supreme Court did not decide as a matter of law that class-wide proof could never be established. Rather, the Supreme Court’s opinion clearly contemplates that a damages model that measured only the antitrust impact of the overbuilding theory, and also plausibly showed that the extent of overbuilding, absent deterrence would have been the same in all counties, or that the extent was irrelevant to any effect upon Comcast’s ability to charge supra-competitive prices, could be common evidence. Comcast Corp., 133 S. Ct. at 1435 n.6. Under the Third Circuit’s law of mandate, Plaintiffs’ ability to certify a significantly narrowed class based on a more limited antitrust impact model that satisfies Footnote 6 is a “matter left open by the mandate,” since it was not decided by the Supreme Court in the first appeal and deemed finally settled.
Wednesday, November 13, 2013
The Fall 2013 newsletter from the ABA Mass Torts Litigation Committee has several blurbs of possible interest to Civil Procedure professors (the summaries below are in the newsletter's words), including:
By Deborah A. Elsasser, Nicholas Magali, and Philip R. Weissman
Some claimants have the opportunity to try their claims in Florida while others will litigate in Italy.
Undoubtedly, the outcome of this case will impact the "jurisdictional gamesmanship" involved with the litigation of mass-torts actions.
Monday, November 4, 2013
SCOTUS, Class Actions & Cy Pres: Cert. Denied in Marek v. Lane, but with a Statement by Chief Justice Roberts
Today the Supreme Court denied certiorari in Marek v. Lane (No. 13-136), a closely watched class action against Facebook. Four class members had objected to the settlement of that class action, which included as a cy pres remedy “the establishment of a new charitable foundation that would help fund organizations dedicated to educating the public about online privacy.” The settlement was approved by the district court and on appeal to the Ninth Circuit, prompting a petition for certiorari by one of the objectors.
Scroll to the end of today’s order list, however, and you’ll find a “Statement of Chief Justice Roberts respecting the denial of certiorari.” Here’s the final paragraph of the Chief’s statement:
I agree with this Court’s decision to deny the petition for certiorari. Marek’s challenge is focused on the particular features of the specific cy pres settlement at issue. Granting review of this case might not have afforded the Court an opportunity to address more fundamental concerns surrounding the use of such remedies in class action litigation, including when, if ever, such relief should be considered; how to assess its fairness as a general matter; whether new entities may be established as part of such relief; if not, how existing entities should be selected; what the respective roles of the judge and parties are in shaping a cy pres remedy; how closely the goals of any enlisted organization must correspond to the interests of the class; and so on. This Court has not previously addressed any of these issues. Cy pres remedies, however, are a growing feature of class action settlements. See Redish, Julian, & Zyontz, Cy Pres Relief and the Pathologies of the Modern Class Action: A Normative and Empirical Analysis, 62 Fla. L. Rev. 617, 653–656 (2010). In a suitable case, this Court may need to clarify the limits on the use of such remedies.
Tuesday, September 10, 2013
Of interest to devotees of the AMC show "Breaking Bad":
Purchasers of Season 5 of the show on iTunes have filed a putative class action against Apple in federal court in the Northern District of California for attempting to charge them again for the last eight episodes. The complaint is available here. Plaintiff asserts federal jurisdiction under the Class Action Fairness Act.
Tuesday, August 27, 2013
Following its decision in Comcast v. Behrend, the Supreme Court remanded a number of class actions for reconsideration (two in April and one in June). Last month, the Sixth Circuit found that class certification remained proper in Glazer v. Whirlpool, a class action involving defective washing machines. The Seventh Circuit has now done the same in a similar washing machine class action against Sears. The entire opinion (Butler v. Sears) is worth a read; Judge Posner’s discussion of Comcast starts on page 5. Here are some excerpts:
Tuesday, August 13, 2013
Here’s Adam Liptak’s latest story, When Lawyers Cut Their Clients Out of the Deal, which discusses a recent Ninth Circuit decision on cy pres settlements that is the subject of a pending Supreme Court cert. petition, Marek v. Lane (No. 13-136).
Monday, August 12, 2013
Hot on the heels of Genesis Healthcare Corp. v. Symczyk, 133 S. Ct. 1523 (2013), comes a new Second Circuit decision heralding the slow strangulation of Fair Labor Standards Act cases: Sutherland v. Ernst & Young LLP, No. 12-304-cv (2d Cir. Aug. 9, 2013).
Plaintiff, a former employee of Ernst & Young, brought a class action on behalf of herself and other similarly situated to recover overtime wages under the FLSA and the New York Department of Labor's Minimum Wage Order. Plaintiff's employment contract, naturally, contained a mandatory arbitration clause that specifically applied to the FLSA and state wage laws, as well as a provision that "disputes pertaining to different employees will be heard in separate proceedings."
Plaintiff's individual alleged unpaid overtime wages were $1,867.02. The district court denied Ernst & Young's motion to dismiss, stay the proceedings, or compel arbitration on an individual bases. The district court reasoned that "[e]nforcement of the class waiver provision in this case would effectively ban all proceeings by [plaintiff] against E&Y."
The Second Circuit reversed. Citing American Express Co. v. Italian Colors Restaurant, 133 S. Ct. 2304 (2013), the court held that the "effective vindication doctrine" (which might allow invalidation of a class-action waiver) was not satisfied even if the cost of proceeding individually in arbitration would exceed the potential recovery. Further, the court held that FLSA "does not include a 'contrary congressional command' that prevents a class-action waiver provision in an arbitration agreement from being enforced by its terms."