February 2, 2012
Ronald Brand on Access-to-Justice Analysis on a Due Process Platform
Ronald Brand (Pittsburgh) has posted to SSRN his article, Access-to-Justice Analysis on a Due Process Platform. Here is the abstract:
In their article, Forum Non Conveniens and The Enforcement of Foreign Judgments, Christopher Whytock and Cassandra Burke Robertson provide a wonderful ride through the landscape of the law of both forum non convenience and judgments recognition and enforcement. They explain doctrinal development and current case law clearly and efficiently, in a manner that educates, but does not overburden, the reader. Based upon that explanation, they then provide an analysis of both areas of the law and offer suggestions for change. Those suggestions, they tell us, are necessary to close the “transnational access-to-justice gap” that results from apparent differences between rules applied in a forum non conveniens analysis and rules applied to the question of recognition of foreign judgments. While the analysis is good, it ignores core differences among legal systems, particularly the due process core of U.S. jurisdictional jurisprudence and the “access to justice” approach to jurisdiction, particularly of European civil law systems (from which most other civil law systems draw their origins). This distinction involves a fundamental difference, with U.S. doctrine focusing on the rights of the defendant and the civil law doctrine focusing on the rights of the plaintiff. So long as this difference exists, it will not be possible to wrap the process of declining jurisdiction and the process of recognition of foreign judgments in the same cloak of doctrine in order to provide common or connected analysis.
Rhonda Wasserman on Secret Class Action Settlements
Professor Rhonda Wasserman (Pittsburgh) has posted to SSRN her article, Secret Class Action Settlements. Here is the abstract:
This Article analyzes the phenomenon of secret class action settlements. To illustrate the practice, Part I undertakes a case study of a class action lawsuit that recently settled under seal. Part II seeks to ascertain the scope of the practice. Part II.A examines newspaper accounts describing class action settlements from around the country. Part II.B focuses on a single federal judicial district – the Western District of Pennsylvania – and seeks to ascertain the percentage of suits filed as class actions that were settled under seal. Having gained some understanding of the scope of the practice, the Article then seeks to assess it normatively. Part III analyzes the policy debate surrounding secret settlements of civil suits in general, fleshing out the competing policy objectives served by public access to, and confidentiality of, settlement agreements. Finally, Part IV examines the statutory, logistical and policy-based constraints that call into serious question the legality, efficacy and wisdom of secret class action settlements
Honda Loses Small Claims Court Suit Over Hybrid Fuel Economy, Raising Questions About Alternatives to Class Actions
As the L.A. Times reports, Honda has lost a case filed in small claims court in California by a Civic hybrid owner who claims her Honda misrepresented the gas mileage possible. The owner apparently opted out of a proposed class action settlement that might provide $100 and new-car rebate coupons to Civic owners, and pay class counsel $8.5 million in attorneys fees. Instead, she filed in small claims court and after 3 hours of testimony over two days, she was awarded $9,867.19 in damages. (In California small claims courts, parties must appear without separate counsel; plaintiff here was an attorney representing herself, though her bar membership is apparently inactive.) Honda, however, plans to appeal the small claims award to Los Angeles County District Court. (H/t to my Mass Tort Litigation student Michelle Rosenberg, who sent me the story.)
Might small claims court be a viable alternative to class action litigation? Class actions of course are most appropriate in so-called negative value claims, where the cost of bringing individual suit exceeds the recovery sought. Small claims court, with its radically diminished transaction costs (and no attorneys' fees), could be seen to shrink the realm of negative value claims. And smalls claims court avoids the potential conflict of interest arising from the temptation for class counsel to settle class claims for a less than optimal amount, in pursuit of a hefty, sure, and speedy class counsel fee. Small claims court still wouldn't be worth the trouble of people who think they were defrauded only a dollar or two, but it might be a viable alternative if hundreds of dollars per claimant were at stake.
January 31, 2012
Leading Law Firm Brands in U.S. for Major Litigation
Marketing-research company Acritas has released the results of its client-interview-based study of top law-firm brands, according to AmLaw Daily. The firms most likely to be considered for major litigation were Skadden, Arps, Slate, Meagher & Flom; Kirkland & Ellis; Jones Day; Gibson, Dunn & Crutcher; and Sidley Austin. All have active mass tort or products liability practices.
A particular congratulations to my former firm colleagues at Skadden and Jones Day, which placed #1 and #2 in the overall ranking of leading U.S. law firm brands.
Daniel Klerman on Personal Jurisdiction and Products Liability
Daniel Klerman (USC) has posted to SSRN his article, Personal Jurisdiction and Products Liability: An Economic Analysis. Here is the abstract:
This article is the first sustained economic analysis of personal jurisdiction. It argues that plaintiffs should be able to sue where they purchased a product which caused injury. Such a rule allows manufacturers to set prices which take into account the quality of the forum state’s courts. If the courts are biased against out-of-state corporations, have overly generous judges or juries, or apply substantive law which is excessively pro-consumer, manufacturers can, through contracts with distributors and retailers, charge a higher price to consumers in that state. This prevents judges and juries from engaging in inter-state redistribution and gives states an incentive to provide efficient substantive rules and adjudicative institutions. In contrast, a rule which required suit in a place more fully under the control of the defendant – such as the place of manufacture or the location of the distributor – would encourage manufacturers to select inefficiently pro-defendant jurisdictions for their activities. Because consumers are unlikely to know where products are manufactured or distributed and are unlikely to be able to evaluate the quality of the law in those states, it is implausible to think that the market will give manufacturers incentives to locate their jurisdiction-triggering activities in states with efficient laws and institutions. This analysis is particularly important, because the Supreme Court has recently deadlocked on personal jurisdiction in product liability cases.
Zamir, Medina, and Segal on the Uniformity of Lawyers' Contingent Fee Rates
Eyal Zamir (Hebrew Univ.), Barak Medina (Hebrew Univ.), and Uzi Segal (Boston College, Economics) have posted to SSRN their article, The Puzzling Uniformity of Lawyers’ Contingent Fee Rates: An Assortative Matching Solution. Here is the abstract:
Lawyers’ Contingent Fee (CF) rates are rather uniform, often one-third of the recovery. Arguably, this uniformity attests to collusion in the market, resulting in clients paying supra-competitive fees. This paper challenges this common argument.
Uniform CF rates are not necessarily superior to negotiable ones; yet they provide clients with an important advantage. They result in clients making a defacto “take-it-or-leave-it” offer. It precludes lawyers from exploiting their private information about the lawsuit’s expected value and the amount of work it requires. The uniformity of CF rates enables clients to hire the best available lawyer, either directly, if clients know lawyers’ ranking, or indirectly, through the referral system. This uniformity thus fosters a positive assortative matching of lawyers and clients. Finally, the fact that both direct clients and clients obtained through paid-for referrals pay the same CF rate does not attest to cross-subsidization, as the cases a lawyer gets through referrals are quite different than those she gets directly.
January 30, 2012
More on the Second Circuit's Refusal to Block Enforcement of Ecuadoran Judgment
No Formaldehyde Liability for US for FEMA Trailers After Hurricanes Katrina and Rita, Fifth Circuit Holds
The decision in In re FEMA Trailer Formaldehyde Products Liability Litigation, Nos. 10-30921, 10-30945 (5th Cir. Jan. 23, 2012), turns on liablity for the government "to the same extent" as private individuals, under the Federal Torts Claims Act, and the protection afforded private individuals giving voluntary disaster assistance under Good Samaritan statutes in Alabama and Mississippi.
January 29, 2012
PIP Breast Implants and Mass Torts in Europe
According to this article from CNN, French authorities have arrested Jean-Claude Mas, the founder of Poly Implant Protheses (PIP), in connection with alleged manslaughter and involuntary harm to a woman who died from cancer and had PIP breast implants. The article notes that 300,000 women in 65 countries received PIP breast implants, and that questions have been raised about the use of non-medical-grade silicon and PIP went bankrupt in late 2010.
The PIP breast-implants controversy may present an opportunity to observe non-U.S.-style mechanisms for what here would likely have been a mass tort litigation. Since the PIP breast implants were not permitted to be sold in the U.S., litigation may be concentrated abroad. In general, my sense is that the European approach is more reliant on criminal law than tort for deterrence, compensatory damages are limited because of the comparatively extensive governmental social insurance, punitive damages are unavailable, and class actions are traditionally not embraced (though class actions appear to be on the rise globally -- see, e.g., the Stanford Global Class Actions Exchange).
Interestingly, according to the article, one French woman who received PIP breast implants said, "Too bad we do not have a justice system like they do in the United States which allows the accumulation of penalties...because the small punishment he will receive for what he did to 300,000 to 400,000 women, is not much compared to what we have suffered because of him."
(H/t to my Mass Tort Litigation student Abigail Anderson for sending me the CNN story.)