Monday, March 21, 2011
Alexandra Lahav (University of Connecticut) has posted Book Review: Are Class Actions Unconstitutional to SSRN.
This is a book review of Martin Redish, Wholesale Justice: Constitutional Democracy and the Problem of the Class Action Lawsuit (Stanford U. Press, 2009).
In Wholesale Justice, Redish argues that class actions are unconstitutional and must be significantly reformed. The argument he presents is one that will surely be debated in courtrooms as well as classrooms and is especially significant given that the Supreme Court is hearing four major class action cases in the October 2010 term. After summarizing Redish's arguments, the review demonstrates that class actions are both constitutional and consistent with ideals of democratic accountability. In the end, the question is not whether the class action is constitutional (it is) but whether class actions are socially beneficial. This is a policy issue, not a constitutional one. Nevertheless, a broader point in Redish's book deserves serious attention. Too often procedures and remedies stealthily prevent the vindication of substantive rights. The appropriate solution to this accountability problem is a more robust public discussion of the relationship between rights and remedies.
Tuesday, March 8, 2011
PENNumbra, the online companion to the Penn Law Review is hosting a debate about the procedural future of mass torts between Sergio Campos (University of Miami) and Howard Erichson (Fordham University).
From Sergio's opening statement:
The evolving case law on aggregate litigation, based largely on notions of notice and due process (embodied in “day in court” principles), has been met with significant criticism on both sides by reformers who claim that the system is inherently unfair or encourages wasteful litigation.
In The Future of Mass Torts... And How to Stop It, Professor Sergio Campos argues for a change in course from the current treatment of mass torts. The current model of providing each individual plaintiff a “day in court,” he suggests, ultimately undermines plaintiffs’ interests by dividing the potential recovery—and thus the litigation incentives—among the plaintiffs while leaving the defendant with the full incentive to avoid litigation. Although the Supreme Court has recently upheld plaintiffs’ right to individual litigation, due process need not be inherently inflexible. By looking to older precedent, such as Mullane v. Central Hanover Bank & Trust Co., Campos supports a “compelled, collective ownership” of claims by procedures such as multi-district litigation or the mandatory class action. Although this model may infringe on “litigant autonomy,” Campos argues that this is ultimately necessary to best protect the interests of mass tort plaintiffs.
Monday, January 24, 2011
The Fifth Circuit rejected the $21 million settlement of a class action over damage caused by the levee breaches on the grounds that it did not grapple with the fairness of dispersal of funds and instead "punted" that job to the special master.
Thursday, December 16, 2010
Monday, November 8, 2010
The Sunday Magazine of the New York TImes has a long and interesting feature on the role on organization of lawyers in the BP litigation with a particular emphasis on the personalities involved and their past association with complex litigation. A very interesting read.
Monday, October 25, 2010
The Third Circuit has held in Farina v. Nokia that consumers may not sue cellphone companies over health hazards posed by cellphone radio wave emissions because this conflicts with the FCC's power to regulate the industry.
Monday, October 4, 2010
Toyota has filed motions to dismiss in many of sudden acceleration cases including a case recently filed in Virginia. They argue that the plaintiffs have failed to state a claim because they cannot identify a specific defect which caused the accelaration, therefore failing to meet the "heightened" Twombly/Iqbal standard.
The National Law Journal reports here.
Thursday, September 30, 2010
On Wednesday, the House passed a $7.4 billion dollar bill to provide medical treatment for those suffering from respiratory difficulties in the aftermath of 9/11. Because the first responders will be a large beneficiary of this legislation, it is thought that this will speed the settlement in the 9/11 cases pending before Judge Hellerstein because the current version of the legislation does not require the workers to choose between public funds and the settlement. The National Law Journal has further analysis here.
Monday, September 27, 2010
On Friday, Justice Scalia (Circuit Justice for the Fifth Circuit) issued an order staying a quarter-of-a-billion-dollar judgment entered in Louisiana state court against several tobacco companies. The case is Philip Morris USA Inc. v. Scott (No. 10A273, docket available here), and the lower court opinion is at 36 So. 3d 1046. The defendants sought the stay to give them time to file a cert. petition, which will challenge the judgment on federal due process grounds. In granting the stay, Justice Scalia concludes: “I think it reasonably probable that four Justices will vote to grant certiorari, and significantly possible that the judgment below will be reversed.”
More from Scalia’s Opinion in Chambers:
Applicants complain of many violations of due process, including (among others) denial of the opportunity to cross-examine the named representatives of the class, factually unsupported estimations of the number of class members entitled to relief, and constant revision of the legal basis for the plaintiffs’ claim during the course of litigation. Even though the judgment that is the alleged consequence of these claimed errors is massive—more than $250 million—I would not be inclined to believe that this Court would grant certiorari to consider these fact-bound contentions that may have no effect on other cases.
But one asserted error in particular (and perhaps some of the others as well) implicates constitutional constraints on the allowable alteration of normal process in class actions. This is a fraud case, and in Louisiana the tort of fraud normally requires proof that the plaintiff detrimentally relied on the defendant’s misrepresentations. 949 So. 2d, at 1277. Accordingly, the Court of Appeal indicated that members of the plaintiff class who wish to seek individual damages, rather than just access to smoking cessation measures, would have to establish their own reliance on the alleged distortions. Ibid. But the Court of Appeal held that this element need not be proved insofar as the class seeks payment into a fund that will benefit individual plaintiffs, since the defendants are guilty of a “distort[ion of] the entire body of public knowledge” on which the “class as a whole” has relied. Id., at 1277–1278. Thus, the court eliminated any need for plaintiffs to prove, and denied any opportunity for applicants to contest, that any particular plaintiff who benefits from the judgment (much less all of them) believed applicants’ distortions and continued to smoke as a result.
Applicants allege that this violates their due-process right to “an opportunity to present every available defense.” Lindsey v. Normet, 405 U. S. 56, 66 (1972) (internal quotation marks omitted) (quoting American Surety Co. v. Baldwin, 287 U. S. 156, 168 (1932)). . . . The apparent consequence of the Court of Appeal’s holding is that individual plaintiffs who could not recover had they sued separately can recover only because their claims were aggregated with others’ through the procedural device of the class action.
The extent to which class treatment may constitutionally reduce the normal requirements of due process is an important question. National concern over abuse of the class-action device induced Congress to permit removal of most major class actions to federal court, see 28 U. S. C. §1332(d), where they will be subject to the significant limitations of the Federal Rules. Federal removal jurisdiction has not been accorded, however, over many class actions in which more than two-thirds of the plaintiff class are citizens of the forum State. See §1332(d)(4). Because the class here was drawn to include only residents of Louisiana, this suit typifies the sort of major class action that often will not be removable, and in which the constraints of the Due Process Clause will be the only federal protection. There is no conflict between federal courts of appeals or between state supreme courts on the principal issue I have described; but the former seems impossible, since by definition only state class actions are at issue; and the latter seems implausible, unless one posits the unlikely case where the novel approach to class-action liability is a legislative rather than judicial creation, or the creation of a lower state court disapproved by the state supreme court on federal constitutional grounds. This constitutional issue ought not to be permanently beyond our review.
For additional coverage, see Lyle Denniston’s post on SCOTUSblog.
Monday, August 23, 2010
The Fulton County Daily Report describes the settlement in lawsuits over vitamin supplements:
"DeKalb County State Court Judge Alvin T. Wong participated in the mass mediation at the request of U.S. District Court Judge R. David Proctor of the Northern District of Alabama, who presides over multidistrict federal litigation involving the Total Body Formula liquid supplements.
In addition to the 34 federal cases over the supplement, several dozen cases in state courts across the country were also pending. Wong said Proctor asked him to get involved in the mediation because he presided over about 60 cases, the largest number of state court cases."
Saturday, August 21, 2010
The New York Times has a feature on Ken Feinberg and the new challenges of administering the BP Spill Fund.
From the article:
The attacks of Sept. 11 were largely fixed in time and place, killing almost 3,000 in a morning and raining destruction on three distinct areas: Lower Manhattan, the Pentagon and a field in Pennsylvania.
The oil spill, by contrast, is more open-ended. When the Deepwater Horizon rig exploded, 11 workers were killed and oil was sent gushing into the Gulf of Mexico for months, damaging the environment and the economies of at least four states for what could well be years.
The two funds are different, too. The Sept. 11 fund was created to compensate people who were injured in the attacks and the families of people who were killed, while the oil spill fund will largely compensate people and businesses for lost income.
Tuesday, August 17, 2010
Thursday, July 29, 2010
The National Law Journal reports a decision from the Seventh Circuit holding that the insurers of sellers of baby products had no duty to defend the insured in a class action lawsuit that sought only economic damages.
Sunday, July 25, 2010
Ronen Perry (University of Haifa) has posted Economic Loss, Punitive Damages, and the Exxon Valdez Litigation to SSRN.
On March 24, 1989, an Exxon supertanker ran aground on Bligh Reef off the Alaskan coast, spilling millions of gallons of crude oil into Prince William Sound. The spill was probably the worst environmental disaster in American history, and sparked unusually extensive and complex litigation, as well as a vast academic literature. But the natural focus on concrete legal and procedural questions has left at least one abstract juridical puzzle unsolved - one that goes to the very foundation of tort liability.
The article uncovers a fundamental yet unnoticed inconsistency in American land-based and maritime tort law that surfaced following the unprecedented spill. The understandable emphasis on the award of punitive damages in recent literature has overshadowed an extremely important part of the Exxon Valdez litigation, namely the wholesale rejection of numerous claims for purely economic loss by the federal district court in the early 1990s. Thus, on the one hand, liability for economic loss was strictly limited under the renowned Robins Dry Dock v. Flint, leaving dozens of thousands of victims uncompensated. On the other hand, liability was expanded through an award of punitive damages to relatively few successful claimants. While these two components of the legal saga might not seem incompatible from a simple doctrinal perspective, they are inconsistent on a deeper - justificatory - level. This inconsistency transcends the Exxon Valdez litigation: It is a troubling trait of land-based and maritime tort law, which happened to surface when the Exxon oil submerged.
The first two parts introduce the clashing rules and their underlying rationales: Part I discusses the origins of the exclusionary (economic loss) rule, its scope of application, and most importantly - its main justifications in American case law and academic literature. Part II provides a short history of punitive damages, and discusses the common justifications for this private law anomaly. Next, Part III shows how the two rules were applied through the Exxon Valdez litigation, and explains why their in tandem application gives rise to incoherence on the justificatory level. After delineating the contours of the stark incongruity, the article proposes a conceptual framework for resolution. Generally, it holds that if courts believe liability must be expanded beyond the limits set by the exclusionary rule in order to obtain certain levels of deterrence and retribution, relaxing the exclusionary rule and allowing more victims to recover is a more defensible path than awarding punitive damages to the already compensated few. The former simply extends the application of two general principles of tort law, whereas the latter is based on problematic exceptions to these universal principles and generates severe distributive injustice.
Through this analysis, the article not only sheds new light on the particular proceedings and on the common law of torts, but also lays the foundation for a more holistic approach to legal reasoning: a transition from fragmentation to integration. “Can two walk together, except they be agreed?” the biblical prophet rhetorically inquires. The Exxon Valdez litigation shows that they can, but this article concludes that they should not.
Wednesday, July 21, 2010
Discovery Order in Toyota MDL incorporates elements of parallel state and federal administrative investigations
The National Law Journal reports that the California federal judges hearing the Toyota MDLs has approved a new joint discovery plan.
Of interest to civ pro folks is the fact that the plan takes advantage of discovery and facts already prepared for cases pending in other states and from a federal administrative investigation:
In their joint discovery plan, the parties submitted 21 topics to be covered in depositions, including the location and access to documents and people associated with the electronic throttle control systems in Toyota vehicles -- specifically, documents in two state court cases in Michigan and California.
Discovery will include information about customer complaints and internal studies of sudden unintended acceleration, the whereabouts of electronic data recorders and Toyota's advertising, sales and public relations materials. Toyota must provide nonprivileged documents that it produced earlier this year to the National Highway Traffic Safety Administration, Congress and state attorneys general.
Tuesday, June 15, 2010
The article documents the difficulties that private parties and various levels of government authorities have faced in coordinating control and cleanup efforts. From the article:
Closer to shore, the efforts to keep the oil away from land have not fared much better, despite a response effort involving thousands of boats, tens of thousands of workers and millions of feet of containment boom.
From the beginning, the effort has been bedeviled by a lack of preparation, organization, urgency and clear lines of authority among federal, state and local officials, as well as BP. As a result, officials and experts say, the damage to the coastline and wildlife has been worse than it might have been if the response had been faster and orchestrated more effectively.
“The present system is not working,” Senator Bill Nelson of Florida said Thursday at a hearing in Washington devoted to assessing the spill and the response. Oil had just entered Florida waters, Senator Nelson said, adding that no one was notified at either the state or local level, a failure of communication that echoed Mr. Bonano’s story and countless others along the Gulf Coast.
“The information is not flowing,” Senator Nelson said. “The decisions are not timely. The resources are not produced. And as a result, you have a big mess, with no command and control.” (emphasis added)
This should not be news. Similar complaints were leveled in the aftermath of Hurricane Katrina. Erin Ryan (William & Mary) gives a thorough outline of these problems and various responses in her article Federalism and the Tug of War Within: Seeking Checks and Balance in the Interjurisdictional Gray Area, 66 Md. L. Rev. 503, 518-36 (2007).
Are these problems of cooperative/shared/interactive federalism intractable? Or can we learn and improve from the Katrina and BP experiences before the next disaster, particularly before incidences that might have a lower profile but cause equal devastation to local residents and paralysis among state, local, and federal officials.
Wednesday, June 9, 2010
This week the U.S. Senate has been holding hearings to consider legislation that would lift or alter the liability cap for oil spills. Under the 1990 Oil Pollution Act (33 U.S.C. s. 2704), BP's liability is limited to $75 million in economic damages. Various proposals have suggested raising the cap to $10 billion or eliminating it completely.
Representatives of the oil industry are lobbying against the change, arguing that that any change to the law would expose the federal government to breach of contract liability with the oil industry.
Monday, June 7, 2010
Wednesday, June 2, 2010
A few months ago, the lawyers representing the first responders, recovery workers, and contractors at Ground Zero came to a draft settlement with lawyers for NYC, the captive insurer, and other defendants. After the parties presented the proposed settlement to the court, Judge Hellerstein more or less rejected the deal, prompting criticism from some lawyers and scholars as to his authority to "reject" a settlement for a case that is not a class action.
Now the lawyers for the plaintiffs have offered to reduce their attorneys fees --an earlier sticking point for Judge Hellerstein -- so that more money would go directly to the plaintiffs. The original settlement provided for 30% or more of the settlement to go to the attorneys in fees. The new proposal would cap fees at 20%.
The Associate Press reports more here.
Thursday, May 27, 2010
The National Law Journal reports that two federal judges have come to opposite rulings about whether to stay litigation until decisions about consolidation are made and more potential lawsuits are filed.
As I have written previously, I believe that courts should proceed with caution when casting too wide a consolidation net in the aftermath of a major catastrophe. The problems of whether it is fairer or more efficient for cases to move forward on their own or to be consolidated with other cases is a serious question for which I do not believe there are clear or easy answers.