Thursday, January 14, 2010
Steve Gensler has posted on SSRN a new article examining the Oklahoma state court experience with class action filings post-CAFA. The paper will be published as part of the Kansas Law Review symposium on aggregate litigation since Amchem and Ortiz. Here is the link and abstract for The Other Side of the CAFA Effect: An Empirical Analysis of Class Action Activity in the Oklahoma State Courts:
When Congress passed the Class Action Fairness Act of 2005 (CAFA), its stated purpose was to shift nationwide state-law class actions from state court to federal court in order to combat allegedly abusive state-court practices. While the Federal Judicial Center has documented an increase in class action filings in federal court, it has been quick to point out that it cannot say that CAFA has caused a shift in class action filings from state court to federal court. That conclusion would require parallel data about state-court class action filings to see if there has been a corresponding decrease. This paper provides that data for Oklahoma, a state many saw as a target of CAFA due to its having a reputation as a class action friendly forum. This study documents a significant drop in class action filings in Oklahoma post-CAFA. At the same time, though, federal filings in Oklahoma have also dropped. This across-the-board decrease suggests that CAFA has shifted nationwide class actions from Oklahoma state court to federal courts in places other than Oklahoma as plaintiff's class action lawyers now learn to forum shop the circuits as they did the states pre-CAFA. This paper also provides interim data on various aspects of Oklahoma class action practice including how often motions to certify are made, how often they are granted, and the outcomes of certified cases.
Wednesday, January 13, 2010
The folks over at Drug and Device Law (now under partially new management that apparently is more fond of literary allusions than the old) have an interesting post on misjoinder, for those of you interested in the real nitty gritty of procedure. The bottom line: they are worried about plaintiffs who jigger their cases through joinder to avoid the federal courts' jurisdiction. For those of you not into the technical aspects of procedure in complex litigation, there are lots of federalism issues raised by this as well.
Usually when academics and policymakers talk about class action lawyers selling out the interests of the class in favor of increasing their fees there isn't any direct proof that this is what occurred, and its always hard to second guess the outcome of negotiations (not to mention hindsight bias). But here is a case that is quite obvious, the kind that ends up making things worse for upstanding plaintiffs lawyers.
A class action lawyer settled a class action on behalf of 7 plaintiffs, paying the class reps $7 million and himself $2 million, rather than arranging payment for the entire class. The settlement was overturned.
Now whether this is an efficient approach from an economic perspective I leave to your consideration. But in any event its not currently permitted. For an argument that it is more efficient to pay the lawyers than try to pay the class from a deterrence perspective, see Myriam Gilles & Gary Friedman, Exploding the Class Action Agency Costs Myth - the link is to SSRN.
The Florida Bar has recommended discipline. You can see the article here at the ABA Law Journal.
Monday, January 11, 2010
The Associated Press is reporting a study that demonstrated that there are alarming percentages of the heavy metal Cadmium, which among other things causes cancer, in certain inexpensive children's jewelry (particularly charm bracelets). Some of the jewelry was sold at Wal-Mart and Claire's (a ubiquitous accessory chain here on the East Coast that many parents will be familiar with).
It seems that if its not one dangerous substance (lead) its another (cadmium). This underscores the importance of regulating consumer goods, especially children's toys and jewelry. Trying to compensate parents after the fact for the damages caused by exposure to carcinogens, while important, will never be as good as preventing the damage in the first place.