Tuesday, March 29, 2011
This coming Friday, the University of Cincinnati College of Law is holding its 2011 Corporate Law Symposium, which is about The Principles and Politics of Aggregate Litigation: CAFA, PSLRA, and Beyond. The symposium is this Friday, April 1 (no joke), 2011. Here's a description and the schedule of events:
The Principles and Politics of Aggregate Litigation: CAFA, PSLRA, and Beyond
6 hours of CLE credit have been applied for in Ohio. Approval is expected.
Date: April 1, 2011
Time: 8:45 a.m. – 4:45 p.m.
Location: Room 114
Webcast: View the webcast here: https://www.uc.edu/ucvision/event.aspx?eventid=267
The Principles and Politics of Aggregate Litigation: CAFA, PSLRA, and Beyond
Aggregate litigation and its impact on business are hot-button issues for courts, policy makers, practitioners and academics. Calls for reform come from both critics and defenders of class actions, as courts work out implementation of Congress’s recent efforts to rein in perceived abuses -- the Private Securities Litigation Reform Act and the Class Action Fairness Act. Recently, the ALI Aggregate Litigation Project focused on the serious problems of management, costs, and risks of underrepresentation presented by large cases and sought to identify good procedures for handling aggregate litigation. Our panelists will present theory, empirical data and practical insights to explore various aspects of aggregate litigation from a variety of perspectives.
Schedule of Events
8:45-9:00 a.m. Welcome: Louis Bilionis, Dean and Nippert Professor of Law, University of Cincinnati College of Law
9:00-10:30 a.m. PANEL I: Class Actions
Moderator: Darrell Miller, Associate Professor of Law, University of Cincinnati College of Law
Robert H. Klonoff, Dean, Lewis & Clark Law School
Reflections on the ALI Aggregate Litigation Project
The recently completed ALI Aggregate Litigation Project focused on the serious problems of management, costs and the risks of underrepresentation presented by large cases and sought to identify good procedures for handling aggregate litigation. Dean Klonoff, Associate Reporter, reflects on the work of the Project and the paramount role of the late Professor Richard A. Nagareda, also Associate Reporter.
Emery G. Lee III, Senior Researcher, Federal Judicial Center and Thomas E. Willging, Senior Researcher (Retired), Federal Judicial Center
Disappearing (Class Action Fairness) Act: Class Certification and Settlement in the Federal Courts
This study reports on empirical findings on class certification and settlement in a representative sample of class actions filed between 2003 and 2007.
Laura Hines, Professor of Law, University of Kansas School of Law
Reconsidering the Issue Class Action
Although the Supreme Court recently declined an opportunity to weigh in on the propriety of the issue class action, the majority of federal courts of appeals and the ALI Aggregate Litigation Project have embraced such class actions. This paper will explore the evolving certification criteria, effect on settlement dynamics, and other unresolved questions regarding the issue class action.
10:30-10:45 a.m. Break
10:45 a.m. -12:15 p.m. PANEL II: Securities Class Actions
Moderator: Lynn Bai, Associate Professor of Law, University of Cincinnati College of Law
Michael A. Perino, Dean George W. Matheson Professor, St. John's University School of Law
Institutional Activism through Litigation: An Empirical Analysis of Public Pension Fund Participation in Securities Class Actions
The PSLRA’s lead plaintiff provision enlisted institutional investors to monitor class counsel in order to curb the agency costs endemic in securities class actions. This paper uses a sample of 731 settlements to examine the efficacy of this provision. It finds that, even when controlling for institutional self-selection of potentially easier or higher quality cases, cases with public pension lead plaintiffs have larger recoveries and lower fee requests and fee awards than cases with other lead plaintiff types. The paper also finds evidence consistent with the existence of a significant positive externality associated with public pension participation. Over time, fee requests and fee awards have on average declined significantly even in cases without such lead plaintiffs. These findings suggest that public pensions act as more effective monitors of class counsel than traditional plaintiffs and that the lead plaintiff provision has substantially reduced the transactions costs associated with securities class actions.
Elizabeth Chamblee Burch, Assistant Professor, Florida State University College of Law
Optimal Lead Plaintiffs
In securities class actions, Rule 23’s adequate-representation requirement is often subsumed by the PSLRA’s lead-plaintiff appointment process. Although Rule 23 aims to prevent conflicts of interest between the representatives and the class, courts define “interests” in terms of a widely shared desire to recover one’s losses. This broad definition allows judges to certify securities class actions and thus promotes corporate accountability, but it also means that plaintiffs’ attorneys can pursue an institutional lead plaintiff’s interests at the other class members’ expense. The “other class members” are principally small investors who need the class-action vehicle the most. Accordingly, Elizabeth Burch will discuss one answer to this conundrum: appointing a diverse lead-plaintiff group and linking diversity to class members’ heterogeneous interests.
Jennifer J. Johnson, Jeffrey Bain Faculty Scholar, Lewis & Clark Law School
Securities Class Actions in State Court: Down but Not Out
This paper explores the remnants of securities class actions in state court in light of congressional efforts to preempt this field embodied in the Securities Litigation Uniform Standards Act of 1998 (SLUSA) and the Class Action Fairness Act of 2005 (CAFA). SLUSA precludes both state and federal courts from adjudicating class actions based upon state statutory or common law, that allege a misrepresentation in connection with the purchase or sale of nationally traded securities. In combination, SLUSA and CAFA direct most remaining securities class actions to federal court. The paper will analyze data on state securities class action filings in the aftermath of SLUSA and CAFA to evaluate the impact of federal preemption and its wisdom as a policy choice.
12:15-1:30 p.m. LUNCH SPEAKER:
Theodore H. Frank, Center for Class Action Fairness
Beyond Coupons: Structuring CAFA Settlements to Maximize Attorneys' Fees
One of CAFA's stated goals was to eliminate settlements where "counsel are awarded large fees, while leaving class members with coupons or other awards of little or no value." As such, statutory language was enacted requiring additional scrutiny of coupon settlements. But the incentive for class attorneys to negotiate high fees for themselves at the expense of class benefits has not disappeared. What other mechanisms are settling parties using to exaggerate the value of class settlements to rationalize disproportionate attorneys' fees? Mr. Frank, using examples from the Center's docket, will discuss the mechanisms class attorneys use, even after CAFA, to maximize attorneys' fee requests.
1:30-3:00 p.m. PANEL III: Aggregate Litigation
Moderator: Lydie Nadia Cabrera Pierre-Louise, Visiting Assistant Professor of law, University of Cincinnati College of Law
G. Robert Blakey, William J. & Dorothy K. O’Neill Chair in Law, Notre Dame Law School
Some Thoughts about the 1995 Securities Fraud Exclusion from Civil RICO
This paper reviews the legislative history, text, and misguided judicial interpretation of the 1995 exclusion of securities fraud from civil RICO, particularly in light of the events of 2007-08. It is one matter not to let civil RICO remedies displace securities fraud remedies; it is another matter entirely to learn that because of the exclusion, you cannot recover under either statute.
Francis E. Mc Govern, Professor of Law, Duke University School of Law
When Aggregate Litigations Conflict: Problems Involving Overlapping Compensation Systems
This paper examines several instances when there are multiple aggregations of claimants implicating multiple, discrete, and overlapping compensation systems. Examples include the asbestos cases: workers' compensation, health and other insurance, governmental compensation, common law relief, bankruptcy trust funds; 9/11: workers' compensation, health and other insurance, other collateral sources, statutory or other governmental compensation, common law remedies; oil spill: workers' compensation, health and other insurance, other collateral sources, Oil Pollution Act of 1990, other state statutory relief, and common law remedies.
Linda S. Mullenix, Morris & Rita Atlas Chair in Law, The University of Texas School of Law
Of Dubious Doctrines: The Quasi Class Action
This paper examines the concept of the quasi class action, articulated by Judge Jack Weinstein in theZyprexa litigation, and the spread of this doctrine to other mass tort and MDL proceedings. Although the doctrine’s critics have focused almost exclusively on the doctrine’s impact on attorney fees, the judicial embrace of the quasi class action expands a new type of lawlessness in resolving law-scale aggregate litigation.
3:00-3:15 p.m. Break
3:15-4:30 p.m. PRACTITIONERS’ ROUNDTABLE
A distinguished panel discusses cutting-edge issues that concern the bench and bar.
Moderator:Michael Solimine,Donald P. Klekamp Professor of Law,University of Cincinnati College of Law
Paul M. De Marco, Waite, Schneider, Bayless & Chesley
Judge Patrick Fischer, Ohio First District Court of Appeals
Caroline H. Gentry, Porter Wright
Richard S. Wayne, Strauss & Troy
4:30-4:45 Concluding Remarks: Barbara Black, Charles Hartsock professor of law and Director, Corporate Law Center, University of Cincinnati College of Law
Monday, March 28, 2011
Though Dukes v. Wal-Mart Stores, Inc. concerns employment discrimination as opposed to mass torts, it has the potential to change Rule 23(a)'s class certification standard across the board. So, for those of you who have been following the case, Adam Liptak has an interesting article in today's New York Times on the evidentiary questions concerning social framework evidence that lies at the heart of the Dukes controversy.
For other commentary on tomorrow's oral argument, here's a link to Sarah Crawford's ACS post.
Sunday, March 27, 2011
The Mississippi College Law Review has posted the video for its symposium, Beyond the Horizon: The Gulf Oil Spill Crisis -- Analyzing the Economic, Environmental, and Legal Implications of the Oil Spill.
Panel One included Ms. Trudy Fisher, Executive Director, Mississippi Department of Environmental Quality; Professor Kenneth Murchison, James E. & Betty M. Phillips Professor, Paul M. Herbert Law Center Louisiana State University; and Professor David Robertson, W. Page Keeton Chair in Tort Law University Distinguished Teaching Professor, University of Texas at Austin. The moderator for Panel One was Ms. Betty Ruth Fox, Of Counsel, Watkins & Eager.
Panel Two included Professor Jamison Colburn, Professor of Law, Penn State University; Professor Edward Sherman, W.R. Irby Chair & Moise S. Steef, Jr. Professor of Law, Tulane University; and myself. The moderator for Panel Two was Professor Jeffrey Jackson, Owen Cooper Professor of Law, Mississippi College School of Law.
Kenneth Feinberg, claims administrator for the Gulf Coast Claims Facility, delivered the symposium Keynote Presentation.
Papers from the symposium will published in the Mississippi College Law Review. Here's the abstract for my symposium talk and forthcoming article:
The Gulf Coast Claims Facility set up following the BP Gulf Oil Spill might be seen as creating a new category of claims fund that might be termed a quasi-public mass tort claims fund. Unlike purely public funds such as the 9/11 Victim Compensation Fund, or purely private funds such as are increasingly created for mass settlements as in Vioxx, the Gulf Coast Claims Facility is funded privately by BP, but bears the public imprimatur of having been initially negotiated by President Obama. Indeed, in an Oval Office Address, President Obama promised that claims would be "fairly" paid and that the fund would "not be controlled by BP," but would instead be administered by an "independent third party." While a quasi-public fund has the advantage of delivering swift compensation in response to an ongoing crisis, the quasi-public fund risks claimant confusion about claim-administrator independence and whether claimants should retain their own counsel to assist in evaluating fund settlement offers. In turn, that claimant confusion can jeopardize the fund's societal savings in attorney-fee transaction costs, and lower claimant participation in the fund. Accordingly, to minimize claimant confusion, a quasi-public fund should provide transparency in its fee structure for claims administrators, and seek a claims-administrator fee structure that minimizes bias, such as utilizing a fixed fee not subject to reevaluation or having defendant agree to a third-party panel's assessment of fees for claims administrators. With regard to the Gulf Coast Claim Facility, claimant participation would likely be enhanced by greater transparency and use of a third-party panel to determine claim-administrator fees.
Friday, March 25, 2011
S. Todd Brown (Buffalo) has posted a paper entitled The Market for Specious Claims on SSRN. It promises to be an interesting application of the adverse selection problem to our favorite subject here at the Mass Tort Litigation Blog! Here is the abstract:
Few problems are more disruptive to the efficient operation of comprehensive mass tort settlements than over-subscription, which, at times, appears to be fueled primarily by specious claims. In settlements with opt out rights, a flood of claims can generate a market for lemons, with the weakest claims submitting to the settlement and the strongest opting out and seeking recovery at trial or in private settlement. In binding settlements, they may result in a commons problem, requiring dramatic reductions in payment that effectively transfer recoveries from those with intrinsically strong claims to those with weak claims.
This Article evaluates the history of three mass torts where specious claim practices were uncovered and identifies common themes that reflect broader lessons about the potential for over-subscription. In particular, although commentators often focus on the incentives that drive claim recruiting, this Article explains that over-subscription has its origins in claim development incentives, which may be distorted by fixed settlement criteria and encourage practices that lend themselves to specious claim filings. This dynamic is particularly likely to generate specious claim markets for low or negative expected value claims. Moreover, the manner in which this process unfolds presents special difficulties for ethical enforcement and deterrence, suggesting that other mechanisms for controlling specious claim markets may be necessary.
Thursday, March 10, 2011
Patrick Luff (Oxford) has posted Risk Regulation and Regulatory Litigation on SSRN. Here is the abstract:
Since at least the 1960s, when Congress enacted civil rights statutes that provided for private enforcement, courts have been hotbeds of public policy. Only recently, however, has this phenomenon been recognized for what it is: courts have become essential actors in the regulatory state. What little scholarship there is on the use of courts to achieve regulatory ends is often heavy on rhetoric, but short on theory. While commentators have been quick to criticize the phenomenon of regulatory litigation, they have done little to determine what it actually is. As a result, the young field of regulatory litigation lacks fundamental theoretical discussions necessary for the fruitful development of the field. This article fills the gaps in the theoretical literature in three ways. First, this article presents the theory that regulatory litigation has developed to address the gaps between socially demanded levels of risk regulation and the amount of risk protection actually provided by the state. Second, this article collects and analyzes the scholarship to date that attempts to find the line that divides regulatory from non-regulatory litigation, and explains how and why previous definitions of regulatory litigation have fallen short. Finally, this article presents a theoretical discussion of the nature of regulatory litigation that distinguishes between top-down regulation through statutory promulgation and bottom-up regulation that occurs through the remedial choices made by litigants and judges.
I've just posted a book review of Martin Redish's book Wholesale Justice: Constitutional Democracy and the Problem of the Class Action Lawsuit (Stanford U. Press 2009) to SSRN.
Here is a link to the review, entitled Are Class Actions Unconstitutional?
In Wholesale Justice, Martin 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
Sergio Campos (Miami) sent me the link to the following debate on the University of Pennsylvania Law Review's internet companion Pennumbra (cute eh? the italics are in the original)
The short piece is called "The Future of Mass Torts - and How to Stop It" - its a defense of the deterrence rationale for limiting individual control of cases in mass tort situations. Our own Howard Erichson is scheduled to respond. Enjoy!
Saturday, March 5, 2011
The title of an article by John Markoff at the NYTimes called "Armies of Expensive Lawyers, Replaced by Computers" says it all. The article is about software programs that sort through documents received in e-discovery.
I often tell my students that if they want to find a growth sector in law, its development of tools for conducting e-discovery -- those law students who have computer engineering degrees or programming knowledge can really make a place for themselves in a world where technology is going to shrink the need for associates and contract attorneys who grind through giant databases of documents.