October 14, 2011
Sternlight on Concepcion
Jean Sternlight (UNLV) has posted a draft of her lastest article on Concepcion, which is titled "Tsunami: AT&T Mobility v. Concepcion Impedes Access to Justice." Here's the abstract:
This essay explores the policy implications of the Supreme Court’s recent 5-4 decision in AT&T Mobility v. Concepcion. Concepcion held that lower courts’ use of California’s Discover Bank rule to hold unconscionable a class action waiver contained in an arbitration clause was preempted by the Federal Arbitration Act. Following the decision, commentators observed that the impact of the decision would depend on how narrowly or broadly the holding would be interpreted by lower courts. After examining post-Concepcion lower court decisions focused on the validity of arbitral class action waivers this essay finds that that most courts are interpreting Concepcion broadly, thereby dooming most unconscionability attacks on arbitral class action waivers. The essay then explores the policy implications of this trend. It suggests that if not legislatively or administratively limited Concepcion will substantially harm consumers, employees, and perhaps others by permitting companies to use arbitration clauses to exempt themselves from class actions, thereby giving them free rein to engage in fraud, torts, discrimination, and other harmful acts.
Trask on Wal-Mart v. Dukes and Legal Strategy
Andrew Trask of McGuire Woods has posted his article, "Wal-Mart v. Dukes: Class Actions and Legal Strategy," on SSRN. Here's the brief abstract:
The Court’s decision in Wal-Mart v. Dukes, like its other class action rulings in the 2010-11 term, reflects an effort to ‘‘reset’’ class certification strategies. By passing judgment on the propriety of a number of the more strategic innovations in class action practice, the Court has cleared away doctrinal developments that did not necessarily reflect the intent of Rule 23.
Gilles and Friedman on "After Class: Aggregate Litigation in the Wake of AT&T Mobility v. Concepcion"
Myriam Gilles and Gary Friedman have posted a draft of their article, "After Class: Aggregate Litigation in the Wake of AT&T Mobility v. Concepcion," on SSRN. Here's the abstract:
Class actions are on the ropes. Courts in recent years have ramped up the standards governing the certification of damages classes and created new standing requirements for consumer class actions. Most recently, in Wal-Mart v. Dukes, the Supreme Court articulated a new and highly restrictive interpretation of the commonality requirement of Rule 23(a). But all of this pales in comparison to the Court’s April 2011 decision in AT&T Mobility v. Concepcion, broadly validating arbitration provisions containing class action waivers. The precise reach of AT&T warrants close scrutiny. Our analysis suggests that following AT&T, some plaintiffs will be able to successfully challenge class waivers under certain circumstances. Also, the new Consumer Financial Protection Bureau - if it is not still-born at the hands of hostile congressional midwives - is likely to eliminate some class action waivers in the financial services field. But most class cases will not survive the impending tsunami of class action waivers. And as this great mass of consumer protection, antitrust, employment and other cases is swept out to sea, the question arises: what or who can fill the resulting enforcement gap?
And here, we believe the “private attorney general” role assumed by class action lawyers over the past several decades will inevitably give way to a world in which state attorneys general make unprecedented use of their parents repatriate authority. Insulated from the threats posed by class action waivers and restrictive class action standing doctrine, AGs are now uniquely positioned to represent the interests of their citizens in the very consumer, antitrust, wage-and-hour and other cases that have long provided the staple of private class action practice. And to tackle complex cases, underfunded AG offices will make use of the private class action lawyers who have acquired expertise in originating, investigating and prosecuting class cases. Of course, there are political risks here - given the model’s dependency on contingent fee arrangements - but there are also substantial political benefits, as AGs around the country begin to take leadership positions in the sort of complex, big-ticket cases that are likely to contribute meaningfully to state coffers - and redress the injuries of consumers and employees who would otherwise have no recourse in a post-AT&T world.
October 10, 2011
Update on Bellwether Trials in Toyota Acceleration Cases
Today's Wall Street Journal Law Blog has an update on the state and federal Toyota acceleration cases. California Superior Court Judge Anthony Mohr has penciled in bellwether trials to begin in April of 2012, but Judge Selna, who is presiding over the federal MDL, estimates that bellwether trials will not begin there until February 2013. Likewise, plaintiffs' attorneys litigating before Judge Robert Schaffer in Texas suspect that they too will not try a case until 2013.
Morris Ratner on A New Model of Plaintiffs' Class Action Attorneys
Morris Ratner (Harvard) has posted to SSRN his article, A New Model of Plaintiffs' Class Action Attorneys, Rev. Litig. (forthcoming). The article presents a nuanced, updated portrait of plaintiffs' class action firms today that challenges prior conceptions of class-counsel bias. Here's the abstract:
This Article offers a new model for conceptualizing plaintiffs’ class action attorneys, and thus for understanding principal-agent problems in class action litigation. It responds to the work of Professor John C. Coffee, Jr., who, in a series of influential articles, demonstrated that principal-agent problems may be acute in class action litigation because class members lack the information or financial incentive to monitor class counsel; class counsel is thus free to pursue his own interests at the expense of the class members. But what are those interests, and how do they diverge from the class members’ interests? Professor Coffee provided one answer to this sub-set of questions, presenting a conventional account of class counsel and the precise parameters of his disloyalty corresponding with three descriptive assertions: that class counsel is either a solo practitioner or in a small firm; that he is predominantly interested in maximizing his law firm profit; and he capably pursues his fee-maximizing goal by investing his time in cases based on confident predictions about expected fees. In this Article, I articulate an updated and competing conception of the dominant class action attorneys and firms: the leading firms today are relatively large and internally complex; law firm structural complexity creates diverse incentives other than maximization of law firm profit; and class counsel invest time in cases for complex reasons other than the effect on expected fees, particularly because fees are notoriously difficult to predict. Modeling class counsel to recognize this complexity has three virtues: it better reflects the actual characteristics of the most significant class action attorneys, and hence is a more accurate descriptive tool; as such, it enables a more precise understanding of the extent and nature of agency or loyalty problems; and thus, finally, it provides a more solid basis for reforms. In particular, this new model sheds insight on the importance of direct versus incentive-based regulation to manage agency costs in class actions. In light of the diverse incentives this new model reveals, direct regulation of outcomes by trial courts using enhanced final approval standards should be a central part of any package of reforms to manage agency costs in class litigation.